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crs_R46330	crs_R46330_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Throughout U.S. history, Congress has created advisory commissions to assist in the development of public policy. Among other contexts, commissions have been used following crisis situations, including the September 11, 2001, terrorist attacks and the 2008 financial crisis. In such situations, advisory commissions may potentially provide Congress with a high-visibility forum to assemble expertise that might not exist within the legislative environment; allow for the in-depth examination of complex, cross-cutting policy issues; and lend bipartisan credibility to a set of findings and recommendations. As Congress considers its range of responses to the coronavirus pandemic, the creation of one or more congressional advisory commissions is an option that could provide a platform for evaluating various pandemic-related policy issues over time. Past congressional advisory commissions have retrospectively evaluated policy responses, brought together diverse groups of experts, and supplemented existing congressional oversight mechanisms. Policymakers may determine that creating an advisory commission is unnecessary and instead prefer to utilize existing congressional oversight structures, such as standing or select committees, or already established oversight entities. This report provides a comparative analysis of five proposed congressional advisory commissions that would investigate various aspects of the COVID-19 pandemic. The five proposed commissions are found in H.R. 6429 (the National Commission on COVID-19 Act, sponsored by Representative Stephanie Murphy), H.R. 6431 (the Made in America Emergency Preparedness Act, sponsored by Representative Brian Fitzpatrick), H.R. 6440 (the Pandemic Rapid Response Act, sponsored by Representative Rodney Davis), H.R. 6455 (the COVID-19 Commission Act, sponsored by Representative Bennie Thompson), and H.R. 6548 (the National Commission on the COVID-19 Pandemic in the United States Act, sponsored by Representative Adam Schiff). The overall structures of each of the proposed commissions are similar in many respects, both to each other and to previous independent advisory entities established by Congress. Specifically, the proposed commissions would (1) exist temporarily; (2) serve in an advisory capacity; and (3) report a work product detailing the commission's findings, conclusions, and recommendations. That said, each particular proposed commission has distinctive elements, particularly concerning its membership structure, appointment structure, and time line for reporting its work product to Congress. This report compares the (1) membership structure, (2) appointment structure, (3) rules of procedure and operation, (4) duties and reporting requirements, (5) powers of the commission, (6) staffing issues, and (7) funding for each of the proposed COVID-19 commissions. Table 1 (at the end of this report) provides a side-by-side comparison of major provisions of the five proposals. Membership Structure Several matters related to a commission's membership structure might be considered. They include the size of a commission, member qualifications, compensation of commission members, and requirements for partisan balance. Size of Commission In general, there is significant variation in the size of congressional advisory commissions. Among 155 identified congressional commissions created between the 101 st Congress and the 115 th Congress, the median size was 12 members, with the smallest commission having 5 members and the largest 33 members. The membership structure of each of the five proposed commissions is similar to previous independent advisory entities created by Congress. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 would each create a 10-member entity. H.R. 6455 would create a 25-member entity. Qualifications Past legislation creating congressional commissions has often required or suggested that commission members possess certain substantive qualifications. Such provisions arguably make it more likely that the commission is populated with genuine experts in the policy area, which may improve the commission's final work product. H.R. 6455 would provide that commissioners "shall be a United States person with significant expertise" in a variety of fields related to public health and public administration. H.R. 6440 , H.R. 6429 , H.R. 6431 , and H.R. 6548 would provide "the sense of Congress" that commission members should be "prominent U.S. citizens" who are nationally recognized experts in a variety of fields relevant to the pandemic and response efforts. In addition, H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 all prohibit the appointment of federal, state, and local government employees and officers. H.R. 6455 would prohibit federal employees from being commission members. Compensation of Commission Members Some congressional commissions have compensated their members. For example, the National Commission on Terrorist Attacks Upon the United States (9/11 Commission) and the Financial Crisis Inquiry Commission provided that commission members could be compensated at a daily rate of basic pay. Nearly all have reimbursed members for travel expenses. Those that have provided for commissioner compensation most frequently provided compensation at the daily equivalent of level IV of the Executive Schedule. Each of the five proposals would provide that commission members be compensated at a rate "not to exceed the daily equivalent of the annual rate of basic pay" for level IV of the Executive Schedule, "for each day during which that member is engaged in the actual performance of duties of the Commission." Members of three proposed commissions would receive travel expenses, including a per diem. Partisan Limitations Each proposal provides a limit on the number of members appointed from the same political party. H.R. 6455 would provide that not more than 13 of its 25 members may be from the same party. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 would provide that not more than 5 (of 10) members are from the same party. Most previous advisory entities created by Congress do not impose formal partisan restrictions on the membership structure. It may also be difficult to assess the political affiliation of potential members, who may have no formal affiliation (voter registration, for example) with a political party. Instead, most past advisory commissions usually achieve partisan balance through the appointment structure; for instance, by providing equal (or near-equal) numbers of appointments to congressional leaders of each party. Appointment Structure Past congressional commissions have used a wide variety of appointment structures. Considerations regarding appointment structures include partisan balance, filling vacancies, and the time line for making commission appointments. The statutory scheme may directly designate members of the commission, such as a specific cabinet official or a congressional leader. In other cases, selected congressional leaders, often with balance between the parties, appoint commission members. A third common statutory scheme is to have selected leaders, such as committee chairs and ranking members, recommend candidates for appointment to a commission. These selected leaders may act either in parallel or jointly, and the recommendation may be made either to other congressional leaders, such as the Speaker of the House and President pro tempore of the Senate, or to the President. Each of the five commission proposals would delegate most or all appointment authority to congressional leaders (including chamber, party, and committee leaders; see Table 1 for details). Additionally, H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 provide for one appointment to be made by the President. H.R. 6429 , H.R. 6431 , and H.R. 6548 would have the President appoint the commission's chair. H.R. 6455 has its membership appointed by the chairs and ranking members of designated House and Senate committees, and the Joint Economic Committee. H.R. 6455 does not provide any executive branch appointments. Attention to the proper balance between the number of members appointed by congressional leaders and by other individuals (such as the President), or to the number of Members of Congress required to be among the appointees, or to the qualifications of appointees, can be significant factors in enabling a commission to fulfill its congressional mandate. In general, a commission's appointment scheme can impact both the commission's ability to fulfill its statutory duties and its final work product. For instance, if the scheme provides only for the appointment of Members of Congress to the commission, it arguably might not have the technical expertise or diversity of knowledge to complete its duties within the time given by statute. Similarly, if the appointment scheme includes qualifying provisos so specific that only a small set of private citizens could serve on the panel, the commission's final work product may arguably only represent a narrow range of viewpoints. None of the proposed COVID-19 commissions specify whether Members of Congress may serve on the commission. Partisan Balance in Appointment Authority Most previous congressional advisory commissions have been structured to be bipartisan, with an even (or near-even) split of appointments between leaders of the two major parties. By achieving a nonpartisan or bipartisan character, congressional commissions may make their findings and recommendations more politically acceptable to diverse viewpoints. The bipartisan or nonpartisan arrangement can give recommendations strong credibility, both in Congress and among the public, even when dealing with divisive public policy issues. Similarly, commission recommendations that are perceived as partisan may have difficulty gaining support in Congress. In some cases, however, bipartisanship also can arguably impede a commission's ability to complete its mandate. In situations where a commission is tasked with studying divisive or partisan issues, the appointment of an equal number of majority and minority commissioners may serve to promote partisanship within the commission rather than suppress it, raising the possibility of deadlock where neither side can muster a majority to act. Each of the five proposals employs a structure where leaders in both the majority and minority parties in Congress would make appointments. H.R. 6429 , H.R. 6431 , and H.R. 6548 would provide for five majority and five minority appointments, including one for the President. H.R. 6440 would include two each by the Senate majority leader, the Senate minority leader, and the Speaker of the House, with one appointment by the House minority leader and one by the President, and the chair appointed by the Speaker and vice chair appointed by the Senate majority leader. H.R. 6455 would have 12 majority and 12 minority appointments made by the 12 committee chairs and ranking members and one member jointly appointed by the chair and vice chair of the Joint Economic Committee. Vacancies All five proposals provide that vacancies on the commission will not affect its powers and would be filled in the same manner as the original appointment. Deadline for Appointments Three of the bills propose specific deadlines for the appointment of commissioners. H.R. 6429 and H.R. 6548 provide that appointments are made between specific dates in January or February 2021. Further, H.R. 6429 provides that commission members could be appointed in September 2020, if there is no longer a COVID-19 public health emergency in effectâas determined by the Secretary of Health and Human Servicesâas of August 31, 2020. H.R. 6440 would require all appointments be made by December 15, 2020. H.R. 6455 would require appointments to be made within 45 days after enactment. H.R. 6429 , H.R. 6440 , and H.R. 6548 would start the commission's work in early 2021, as the commission cannot operate without the appointment of members. H.R. 6429 , however would provide that the proposed commission's work would begin no later than October 31, 2020, if members are appointed in September 2020. H.R. 6431 does not specify a deadline for the appointment of members. Typically, deadlines for appointment can range from several weeks to several months. For example, the deadline for appointments to the Antitrust Modernization Commission was 60 days after the enactment of its establishing act. The deadline for appointment to the Commission on Wartime Contracting in Iraq and Afghanistan was 120 days from the date of enactment. The deadline for appointment to the 9/11 Commission was December 15, 2002, 18 days after enactment of the act. Rules of Procedure and Operations While most statutes that authorize congressional advisory commissions do not provide detailed procedures for how the commission should conduct its business, the statutory language may provide a general structure, including a mechanism for selecting a chair and procedures for creating rules. None of the five COVID-19 commission proposals contain language that directs the process for potentially adopting rules of procedure. For a comparison of each proposed commission's specified rules of procedures and operations, see Table 1 . Chair Selection Each bill provides for the selection of a chair and/or vice chair of the commission. H.R. 6429 , H.R. 6431 , and H.R. 6548 would have the chair appointed by the President and the vice chair appointed by congressional leaders of the political party opposite the President. H.R. 6440 would have the chair appointed by the Speaker of the House (in consultation with the Senate majority leader and the House minority leader) and the vice chair appointed by the Senate majority leader (in consultation with the Speaker of the House and the Senate minority leader). H.R. 6455 would have the chair and vice chair chosen from among commission members by a majority vote of the commission, and would require the chair and vice chair to have "significant experience" in areas to be studied by the commission. Initial Meeting Deadline As with the timing of commission appointments, some authorizing statutes are prescriptive in when the commission's first meeting should take place. Three of the bills analyzed here provide specific time lines for the commission's first meeting. H.R. 6429 would require the first meeting to be no later than March 15, 2021, unless members are appointed in September 2020 (if no public health emergency exists). H.R. 6455 would require the first meeting within 45 days after the appointment of all commission members, which isâgiven the 45-day deadline for appointmentâeffectively a maximum of 90 days after enactment. H.R. 6548 would direct the commission to hold its initial meeting "as soon as practicable," but not later than March 5, 2021. H.R. 6431 and H.R. 6440 do not provide for an initial meeting deadline. Instead, they direct the commission to meet "as soon as practicable." Quorum Most commission statutes provide that a quorum will consist of a particular number of commissioners, usually a majority, but occasionally a supermajority. All five bills would provide for a quorum requirement. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 would define a quorum as 6 (of 10) members. H.R. 6455 would provide that a quorum is 18 of 25 members (72%). Public Access All five commission bills would require commission meetings to be open to the public. Each bill would also require that reports be made publicly available. Formulating Other Rules of Procedure and Operations Absent statutory guidance (eithe r in general statutes or in individual statutes authorizing commissions), advisory entities vary widely in how they adopt their rules of procedure. In general, three models exist: formal written rules, informal rules, and the reliance on norms. Any individual advisory entity might make use of all three of these models for different types of decisionmaking. The choice to adopt written rules or rely on informal norms to guide commission procedure may be based on a variety of factors, such as the entity's size, the frequency of meetings, member preferences regarding formality, the level of collegiality among members, and the amount of procedural guidance provided by the entity's authorizing statute. Regardless of how procedural issues are handled, protocol for decisionmaking regarding the following operational issues may be important for the commission to consider at the outset of its existence: eligibility to vote and proxy rules; staff hiring, compensation, and work assignments; hearings, meetings, and field visits; nonstaff expenditures and contracting; reports to Congress; budgeting; and procedures for future modification of rules. None of the five COVID-19 commission proposals specify that the proposed commission must adopt written rules. FACA Applicability The Federal Advisory Committee Act (FACA) mandates certain structural and operational requirements, including formal reporting and oversight procedures, for certain federal advisory bodies that advise the executive branch. Three proposals ( H.R. 6429 , H.R. 6431 , and H.R. 6548 ) specifically exempt the proposed commission from FACA. Of the remaining two, FACA would also likely not apply to the commission proposed in H.R. 6455 because it would be appointed entirely by Members of Congress, although it only specifies that its final report is public, not whether it is specifically sent to Congress and/or the President. It is not clear that FACA would apply to the commission proposed in H.R. 6440 . Although it includes a presidential appointment and its report would be sent to both Congress and the President, its establishment clause specifies that the commission "is established in the legislative branch," and a super-majority of its members would be appointed by Congress. Duties and Reporting Requirements Most congressional commissions are generally considered policy commissionsâtemporary bodies that study particular policy problems and report their findings to Congress or review a specific event. General Duties All five of the proposed commissions would be tasked with duties that are analogous to those of past policy commissions. While the specific mandates differ somewhat, all proposed commissions are tasked with investigating aspects of the COVID-19 pandemic and submitting one or more reports that include the commission's findings, conclusions, and recommendations for legislative action. H.R. 6440 would specifically require the commission to avoid unnecessary duplication of work being conducted by the Government Accountability Office (GAO), congressional committees, and executive branch agency and independent commission investigations. Reports Each proposed commission would be tasked with issuing a final report detailing its findings, conclusions, and recommendations. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 would provide that the commission "may submit" interim reports to Congress and the President, but do not provide time lines on when those reports might be submitted. In each case, the interim report would need to be agreed to by a majority of commission members. H.R. 6431 would also require the commission to submit a report on actions taken by the states and a report on essential products, materials, ingredients, and equipment required to fight pandemics. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 also specify that final reports shall be agreed to by a majority of commission members. H.R. 6455 does not specify a vote threshold for approval of its report. None of the bills make specific provisions for the inclusion of minority viewpoints. Presumably this would leave each commission with discretion on whether to include or exclude minority viewpoints. Past advisory entities have been proposed or established with a variety of statutory reporting conditions, including the specification of majority or super-majority rules for report adoption and provisions requiring the inclusion of minority viewpoints. In practice, advisory bodies that are not given statutory direction on these matters have tended to work under simple-majority rules for report adoption. Report Deadlines H.R. 6429 would require a final report one year after the commission's initial meeting. H.R. 6431 and H.R. 6440 would require a final report not later than 18 months after enactment. H.R. 6455 would require a final report to be published not later than 18 months after the commission's first meeting. H.R. 6548 would require a final report by October 15, 2021. This deadline could be extended by 90 days upon a vote of no fewer than 8 (out of 10) commission members. The commission could vote to extend its final report deadline up to three times, and would be required to notify Congress, the President, and the public of any such extension. While such a deadline would potentially give the commission a defined period of time to complete its work, setting a particular date for report completion could potentially create unintended time constraints. Any delay in the passage of the legislation or in the appointment process would reduce the amount of time the commission has to complete its work, even with the opportunity for the commission to extend its own deadline up to three times. The length of time a congressional commission has to complete its work is arguably one of the most consequential decisions when designing an advisory entity. If the entity has a short window of time, the quality of its work product may suffer or it may not be able to fulfill its statutory mandate on time. On the other hand, if the commission is given a long period of time to complete its work, it may undermine one of a commission's primary legislative advantages, the timely production of expert advice on a current matter. A short deadline may also affect the process of standing up a new commission. The selection of commissioners, recruitment of staff, arrangement of office space, and other logistical matters may require expedited action if short deadlines need to be met. Report Submission Of the five proposed commissions, four ( H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 ) are directed to submit their reports to both Congress and the President. H.R. 6455 requires that the report is made public. Most congressional advisory commissions are required to submit their reports to Congress, and sometimes to the President or an executive department or agency head. For example, the National Commission on Severely Distressed Public Housing's final report was submitted to both Congress and the Secretary of Housing and Urban Development. Commission Termination Congressional commissions are usually statutorily mandated to terminate. Termination dates for most commissions are linked to either a fixed period of time after the establishment of the commission, the selection of members, or the date of submission of the commission's final report. Alternatively, some commissions are given fixed calendar termination dates. All five commission proposals would provide for the commission to terminate within a certain period of time following submission of its final report. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6455 would each direct the commission to terminate 60 days after the submission; H.R. 6548 specifies a time line of 90 days after submission. Commission Powers Each of the five proposals would provide the proposed commission with certain powers to carry out its mission (see Table 1 for specifics). One general issue for commissions is who is authorized to execute such powers. In some cases, the commission itself executes its powers, with the commission deciding whether to devise rules and procedures for the general use of such power. In other cases, the legislation specifically authorizes the commission to give discretionary power to subcommittees or individual commission members. Finally, the legislation itself might grant certain powers to individual members of the commission, such as the chair. Hearings and Evidence All five bills would provide the proposed commission with the power to hold hearings, take testimony, and receive evidence. All five commissions would also be provided the power to administer oaths to witnesses. Subpoenas Four of the bills would provide the commission with subpoena power. H.R. 6440 would not provide subpoena power to the commission. H.R. 6429 , H.R. 6431 , and H.R. 6548 would provide that subpoenas could only be issued by either (1) agreement of the chair and vice chair, or (2) the affirmative vote of 6 (of 10) commission members. H.R. 6455 would require that a subpoena could only be issued by either agreement of the chair and vice chair or an affirmative vote of 18 (of 25) commission members. All four bills that would provide subpoena power contain substantially similar judicial methods of subpoena enforcement. Administrative Support All five of the bills would provide that the commission receive administrative support from the General Services Administration (GSA). The GSA provides administrative support to dozens of federal entities, including congressional advisory commissions. Each of the five bills would provide that GSA be reimbursed for its services by the commission. Each bill also provides that other departments or agencies may provide funds, facilities, staff, and other services to the commission. Other Powers Without explicit language authorizing certain activities, commissions often cannot gather information, enter into contracts, use the U.S. mail like an executive branch entity, or accept donations or gifts. All five bills direct that federal agencies provide information to the commission upon request. H.R. 6429 , H.R. 6431 , and H.R. 6548 would also provide that the commission could use the U.S. mails in the same manner as any department or agency, enter into contracts, and accept gifts or donations of services or property. Staffing The proposed COVID-19 commissions contain staffing provisions commonly found in congressional advisory commission legislation. Congressional advisory commissions are usually authorized to hire staff. Most statutes specify that the commission may hire a lead staffer, often referred to as a "staff director," "executive director," or another similar title, in addition to additional staff as needed. Rather than mandate a specific staff size, many commissions are instead authorized to appoint a staff director and other personnel as necessary, subject to the limitations of available funds. Most congressional commissions are also authorized to hire consultants, procure intermittent services, and request that federal agencies detail personnel to aid the work of the commission. Director and Commission Staff Four of the bills provide that the commission may hire staff without regard to certain laws regarding the competitive service; H.R. 6440 does not specifically exempt the commission from such laws. Four bills ( H.R. 6429 , H.R. 6431 , H.R. 6455 , and H.R. 6548 ) would authorize, but not require, the commission to hire a staff director and additional staff, as appropriate. Four proposals would limit staff salaries to level V of the executive schedule. Three of the bills would specifically designate staff as federal employees for the purposes of certain laws, such as workman's compensation, retirement, and other benefits. Detailees When authorized, some commissions can have federal agency staff detailed to the commission. All five bills would provide that federal employees could be detailed to the commission. Four bills would provide that the detailee would be without reimbursement to his or her home agency. H.R. 6440 would allow detailees on a reimbursable basis. Experts and Consultants All five bills would provide the commission with the authority to hire experts and consultants. Four of the bills limit the rate of pay for consultants to level IV of the Executive Schedule. H.R. 6440 does not specify a specific limit. Security Clearances Four bills would provide that federal agencies and departments shall cooperate with the commission to provide members and staff appropriate security clearances. H.R. 6440 does not contain a security clearance provision. Funding and Costs Commissions generally require funding to help meet their statutory goals. When designing a commission, therefore, policymakers may consider both how the commission will be funded, and how much funding the commission will be authorized to receive. Four of the five proposals specify a funding mechanism for the commission. How commissions are funded and the amounts that they receive vary considerably. Several factors can contribute to overall commission costs. These factors might include the cost of hiring staff, contracting with outside consultants, and engaging administrative support, among others. Additionally, most commissions reimburse the travel expenditures of commissioners and staff, and some compensate their members. The duration of a commission can also significantly affect its cost; past congressional commissions have been designed to last anywhere from several months to several years. Costs It is difficult to estimate or predict the potential overall cost of any commission. Annual budgets for congressional advisory entities range from several hundred thousand dollars to millions of dollars annually. Overall expenses for any individual advisory entity depend on a variety of factors, the most important of which are the number of paid staff and the commission's duration and scope. Some commissions have few full-time staff; others employ large numbers, such as the National Commission on Terrorist Attacks Upon the United States, which had a full-time paid staff of nearly 80. Secondary factors that can affect commission costs include the number of commissioners, how often the commission meets or holds hearings, whether or not the commission travels or holds field hearings, and the publications the commission produces. Authorized Funding Three of the bills ( H.R. 6429 , H.R. 6440 , and H.R. 6548 ) would authorize the appropriation of "such sums as may be necessary" for the commission, to be derived in equal amounts from the contingent fund of the Senate and the applicable accounts of the House of Representatives. H.R. 6429 and H.R. 6548 would provide that funds are available until the commission terminates. H.R. 6455 would authorize the appropriation of $4 million for the commission, to remain available until the commission terminates. H.R. 6431 does not include an authorization of appropriations. Comparison of Proposals to Create a COVID-19 Commission Table 1 provides a side-by-side comparison of major provisions of the five proposals. For each bill, the membership structure, appointment structure, rules of procedure and operation, duties and reporting requirements, proposed commission powers, staffing provisions, and funding are compared. Summary:	null	96	31,300	31,302	31,302	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Throughout U.S. history, Congress has created advisory commissions to assist in the development of public policy. Among other contexts, commissions have been used following crisis situations, including the September 11, 2001, terrorist attacks and the 2008 financial crisis. In such situations, advisory commissions may potentially provide Congress with a high-visibility forum to assemble expertise that might not exist within the legislative environment; allow for the in-depth examination of complex, cross-cutting policy issues; and lend bipartisan credibility to a set of findings and recommendations. As Congress considers its range of responses to the coronavirus pandemic, the creation of one or more congressional advisory commissions is an option that could provide a platform for evaluating various pandemic-related policy issues over time. Past congressional advisory commissions have retrospectively evaluated policy responses, brought together diverse groups of experts, and supplemented existing congressional oversight mechanisms. Policymakers may determine that creating an advisory commission is unnecessary and instead prefer to utilize existing congressional oversight structures, such as standing or select committees, or already established oversight entities. This report provides a comparative analysis of five proposed congressional advisory commissions that would investigate various aspects of the COVID-19 pandemic. The five proposed commissions are found in H.R. 6429 (the National Commission on COVID-19 Act, sponsored by Representative Stephanie Murphy), H.R. 6431 (the Made in America Emergency Preparedness Act, sponsored by Representative Brian Fitzpatrick), H.R. 6440 (the Pandemic Rapid Response Act, sponsored by Representative Rodney Davis), H.R. 6455 (the COVID-19 Commission Act, sponsored by Representative Bennie Thompson), and H.R. 6548 (the National Commission on the COVID-19 Pandemic in the United States Act, sponsored by Representative Adam Schiff). The overall structures of each of the proposed commissions are similar in many respects, both to each other and to previous independent advisory entities established by Congress. Specifically, the proposed commissions would (1) exist temporarily; (2) serve in an advisory capacity; and (3) report a work product detailing the commission's findings, conclusions, and recommendations. That said, each particular proposed commission has distinctive elements, particularly concerning its membership structure, appointment structure, and time line for reporting its work product to Congress. This report compares the (1) membership structure, (2) appointment structure, (3) rules of procedure and operation, (4) duties and reporting requirements, (5) powers of the commission, (6) staffing issues, and (7) funding for each of the proposed COVID-19 commissions. Table 1 (at the end of this report) provides a side-by-side comparison of major provisions of the five proposals. Membership Structure Several matters related to a commission's membership structure might be considered. They include the size of a commission, member qualifications, compensation of commission members, and requirements for partisan balance. Size of Commission In general, there is significant variation in the size of congressional advisory commissions. Among 155 identified congressional commissions created between the 101 st Congress and the 115 th Congress, the median size was 12 members, with the smallest commission having 5 members and the largest 33 members. The membership structure of each of the five proposed commissions is similar to previous independent advisory entities created by Congress. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 would each create a 10-member entity. H.R. 6455 would create a 25-member entity. Qualifications Past legislation creating congressional commissions has often required or suggested that commission members possess certain substantive qualifications. Such provisions arguably make it more likely that the commission is populated with genuine experts in the policy area, which may improve the commission's final work product. H.R. 6455 would provide that commissioners "shall be a United States person with significant expertise" in a variety of fields related to public health and public administration. H.R. 6440 , H.R. 6429 , H.R. 6431 , and H.R. 6548 would provide "the sense of Congress" that commission members should be "prominent U.S. citizens" who are nationally recognized experts in a variety of fields relevant to the pandemic and response efforts. In addition, H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 all prohibit the appointment of federal, state, and local government employees and officers. H.R. 6455 would prohibit federal employees from being commission members. Compensation of Commission Members Some congressional commissions have compensated their members. For example, the National Commission on Terrorist Attacks Upon the United States (9/11 Commission) and the Financial Crisis Inquiry Commission provided that commission members could be compensated at a daily rate of basic pay. Nearly all have reimbursed members for travel expenses. Those that have provided for commissioner compensation most frequently provided compensation at the daily equivalent of level IV of the Executive Schedule. Each of the five proposals would provide that commission members be compensated at a rate "not to exceed the daily equivalent of the annual rate of basic pay" for level IV of the Executive Schedule, "for each day during which that member is engaged in the actual performance of duties of the Commission." Members of three proposed commissions would receive travel expenses, including a per diem. Partisan Limitations Each proposal provides a limit on the number of members appointed from the same political party. H.R. 6455 would provide that not more than 13 of its 25 members may be from the same party. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 would provide that not more than 5 (of 10) members are from the same party. Most previous advisory entities created by Congress do not impose formal partisan restrictions on the membership structure. It may also be difficult to assess the political affiliation of potential members, who may have no formal affiliation (voter registration, for example) with a political party. Instead, most past advisory commissions usually achieve partisan balance through the appointment structure; for instance, by providing equal (or near-equal) numbers of appointments to congressional leaders of each party. Appointment Structure Past congressional commissions have used a wide variety of appointment structures. Considerations regarding appointment structures include partisan balance, filling vacancies, and the time line for making commission appointments. The statutory scheme may directly designate members of the commission, such as a specific cabinet official or a congressional leader. In other cases, selected congressional leaders, often with balance between the parties, appoint commission members. A third common statutory scheme is to have selected leaders, such as committee chairs and ranking members, recommend candidates for appointment to a commission. These selected leaders may act either in parallel or jointly, and the recommendation may be made either to other congressional leaders, such as the Speaker of the House and President pro tempore of the Senate, or to the President. Each of the five commission proposals would delegate most or all appointment authority to congressional leaders (including chamber, party, and committee leaders; see Table 1 for details). Additionally, H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 provide for one appointment to be made by the President. H.R. 6429 , H.R. 6431 , and H.R. 6548 would have the President appoint the commission's chair. H.R. 6455 has its membership appointed by the chairs and ranking members of designated House and Senate committees, and the Joint Economic Committee. H.R. 6455 does not provide any executive branch appointments. Attention to the proper balance between the number of members appointed by congressional leaders and by other individuals (such as the President), or to the number of Members of Congress required to be among the appointees, or to the qualifications of appointees, can be significant factors in enabling a commission to fulfill its congressional mandate. In general, a commission's appointment scheme can impact both the commission's ability to fulfill its statutory duties and its final work product. For instance, if the scheme provides only for the appointment of Members of Congress to the commission, it arguably might not have the technical expertise or diversity of knowledge to complete its duties within the time given by statute. Similarly, if the appointment scheme includes qualifying provisos so specific that only a small set of private citizens could serve on the panel, the commission's final work product may arguably only represent a narrow range of viewpoints. None of the proposed COVID-19 commissions specify whether Members of Congress may serve on the commission. Partisan Balance in Appointment Authority Most previous congressional advisory commissions have been structured to be bipartisan, with an even (or near-even) split of appointments between leaders of the two major parties. By achieving a nonpartisan or bipartisan character, congressional commissions may make their findings and recommendations more politically acceptable to diverse viewpoints. The bipartisan or nonpartisan arrangement can give recommendations strong credibility, both in Congress and among the public, even when dealing with divisive public policy issues. Similarly, commission recommendations that are perceived as partisan may have difficulty gaining support in Congress. In some cases, however, bipartisanship also can arguably impede a commission's ability to complete its mandate. In situations where a commission is tasked with studying divisive or partisan issues, the appointment of an equal number of majority and minority commissioners may serve to promote partisanship within the commission rather than suppress it, raising the possibility of deadlock where neither side can muster a majority to act. Each of the five proposals employs a structure where leaders in both the majority and minority parties in Congress would make appointments. H.R. 6429 , H.R. 6431 , and H.R. 6548 would provide for five majority and five minority appointments, including one for the President. H.R. 6440 would include two each by the Senate majority leader, the Senate minority leader, and the Speaker of the House, with one appointment by the House minority leader and one by the President, and the chair appointed by the Speaker and vice chair appointed by the Senate majority leader. H.R. 6455 would have 12 majority and 12 minority appointments made by the 12 committee chairs and ranking members and one member jointly appointed by the chair and vice chair of the Joint Economic Committee. Vacancies All five proposals provide that vacancies on the commission will not affect its powers and would be filled in the same manner as the original appointment. Deadline for Appointments Three of the bills propose specific deadlines for the appointment of commissioners. H.R. 6429 and H.R. 6548 provide that appointments are made between specific dates in January or February 2021. Further, H.R. 6429 provides that commission members could be appointed in September 2020, if there is no longer a COVID-19 public health emergency in effectâas determined by the Secretary of Health and Human Servicesâas of August 31, 2020. H.R. 6440 would require all appointments be made by December 15, 2020. H.R. 6455 would require appointments to be made within 45 days after enactment. H.R. 6429 , H.R. 6440 , and H.R. 6548 would start the commission's work in early 2021, as the commission cannot operate without the appointment of members. H.R. 6429 , however would provide that the proposed commission's work would begin no later than October 31, 2020, if members are appointed in September 2020. H.R. 6431 does not specify a deadline for the appointment of members. Typically, deadlines for appointment can range from several weeks to several months. For example, the deadline for appointments to the Antitrust Modernization Commission was 60 days after the enactment of its establishing act. The deadline for appointment to the Commission on Wartime Contracting in Iraq and Afghanistan was 120 days from the date of enactment. The deadline for appointment to the 9/11 Commission was December 15, 2002, 18 days after enactment of the act. Rules of Procedure and Operations While most statutes that authorize congressional advisory commissions do not provide detailed procedures for how the commission should conduct its business, the statutory language may provide a general structure, including a mechanism for selecting a chair and procedures for creating rules. None of the five COVID-19 commission proposals contain language that directs the process for potentially adopting rules of procedure. For a comparison of each proposed commission's specified rules of procedures and operations, see Table 1 . Chair Selection Each bill provides for the selection of a chair and/or vice chair of the commission. H.R. 6429 , H.R. 6431 , and H.R. 6548 would have the chair appointed by the President and the vice chair appointed by congressional leaders of the political party opposite the President. H.R. 6440 would have the chair appointed by the Speaker of the House (in consultation with the Senate majority leader and the House minority leader) and the vice chair appointed by the Senate majority leader (in consultation with the Speaker of the House and the Senate minority leader). H.R. 6455 would have the chair and vice chair chosen from among commission members by a majority vote of the commission, and would require the chair and vice chair to have "significant experience" in areas to be studied by the commission. Initial Meeting Deadline As with the timing of commission appointments, some authorizing statutes are prescriptive in when the commission's first meeting should take place. Three of the bills analyzed here provide specific time lines for the commission's first meeting. H.R. 6429 would require the first meeting to be no later than March 15, 2021, unless members are appointed in September 2020 (if no public health emergency exists). H.R. 6455 would require the first meeting within 45 days after the appointment of all commission members, which isâgiven the 45-day deadline for appointmentâeffectively a maximum of 90 days after enactment. H.R. 6548 would direct the commission to hold its initial meeting "as soon as practicable," but not later than March 5, 2021. H.R. 6431 and H.R. 6440 do not provide for an initial meeting deadline. Instead, they direct the commission to meet "as soon as practicable." Quorum Most commission statutes provide that a quorum will consist of a particular number of commissioners, usually a majority, but occasionally a supermajority. All five bills would provide for a quorum requirement. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 would define a quorum as 6 (of 10) members. H.R. 6455 would provide that a quorum is 18 of 25 members (72%). Public Access All five commission bills would require commission meetings to be open to the public. Each bill would also require that reports be made publicly available. Formulating Other Rules of Procedure and Operations Absent statutory guidance (eithe r in general statutes or in individual statutes authorizing commissions), advisory entities vary widely in how they adopt their rules of procedure. In general, three models exist: formal written rules, informal rules, and the reliance on norms. Any individual advisory entity might make use of all three of these models for different types of decisionmaking. The choice to adopt written rules or rely on informal norms to guide commission procedure may be based on a variety of factors, such as the entity's size, the frequency of meetings, member preferences regarding formality, the level of collegiality among members, and the amount of procedural guidance provided by the entity's authorizing statute. Regardless of how procedural issues are handled, protocol for decisionmaking regarding the following operational issues may be important for the commission to consider at the outset of its existence: eligibility to vote and proxy rules; staff hiring, compensation, and work assignments; hearings, meetings, and field visits; nonstaff expenditures and contracting; reports to Congress; budgeting; and procedures for future modification of rules. None of the five COVID-19 commission proposals specify that the proposed commission must adopt written rules. FACA Applicability The Federal Advisory Committee Act (FACA) mandates certain structural and operational requirements, including formal reporting and oversight procedures, for certain federal advisory bodies that advise the executive branch. Three proposals ( H.R. 6429 , H.R. 6431 , and H.R. 6548 ) specifically exempt the proposed commission from FACA. Of the remaining two, FACA would also likely not apply to the commission proposed in H.R. 6455 because it would be appointed entirely by Members of Congress, although it only specifies that its final report is public, not whether it is specifically sent to Congress and/or the President. It is not clear that FACA would apply to the commission proposed in H.R. 6440 . Although it includes a presidential appointment and its report would be sent to both Congress and the President, its establishment clause specifies that the commission "is established in the legislative branch," and a super-majority of its members would be appointed by Congress. Duties and Reporting Requirements Most congressional commissions are generally considered policy commissionsâtemporary bodies that study particular policy problems and report their findings to Congress or review a specific event. General Duties All five of the proposed commissions would be tasked with duties that are analogous to those of past policy commissions. While the specific mandates differ somewhat, all proposed commissions are tasked with investigating aspects of the COVID-19 pandemic and submitting one or more reports that include the commission's findings, conclusions, and recommendations for legislative action. H.R. 6440 would specifically require the commission to avoid unnecessary duplication of work being conducted by the Government Accountability Office (GAO), congressional committees, and executive branch agency and independent commission investigations. Reports Each proposed commission would be tasked with issuing a final report detailing its findings, conclusions, and recommendations. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 would provide that the commission "may submit" interim reports to Congress and the President, but do not provide time lines on when those reports might be submitted. In each case, the interim report would need to be agreed to by a majority of commission members. H.R. 6431 would also require the commission to submit a report on actions taken by the states and a report on essential products, materials, ingredients, and equipment required to fight pandemics. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 also specify that final reports shall be agreed to by a majority of commission members. H.R. 6455 does not specify a vote threshold for approval of its report. None of the bills make specific provisions for the inclusion of minority viewpoints. Presumably this would leave each commission with discretion on whether to include or exclude minority viewpoints. Past advisory entities have been proposed or established with a variety of statutory reporting conditions, including the specification of majority or super-majority rules for report adoption and provisions requiring the inclusion of minority viewpoints. In practice, advisory bodies that are not given statutory direction on these matters have tended to work under simple-majority rules for report adoption. Report Deadlines H.R. 6429 would require a final report one year after the commission's initial meeting. H.R. 6431 and H.R. 6440 would require a final report not later than 18 months after enactment. H.R. 6455 would require a final report to be published not later than 18 months after the commission's first meeting. H.R. 6548 would require a final report by October 15, 2021. This deadline could be extended by 90 days upon a vote of no fewer than 8 (out of 10) commission members. The commission could vote to extend its final report deadline up to three times, and would be required to notify Congress, the President, and the public of any such extension. While such a deadline would potentially give the commission a defined period of time to complete its work, setting a particular date for report completion could potentially create unintended time constraints. Any delay in the passage of the legislation or in the appointment process would reduce the amount of time the commission has to complete its work, even with the opportunity for the commission to extend its own deadline up to three times. The length of time a congressional commission has to complete its work is arguably one of the most consequential decisions when designing an advisory entity. If the entity has a short window of time, the quality of its work product may suffer or it may not be able to fulfill its statutory mandate on time. On the other hand, if the commission is given a long period of time to complete its work, it may undermine one of a commission's primary legislative advantages, the timely production of expert advice on a current matter. A short deadline may also affect the process of standing up a new commission. The selection of commissioners, recruitment of staff, arrangement of office space, and other logistical matters may require expedited action if short deadlines need to be met. Report Submission Of the five proposed commissions, four ( H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6548 ) are directed to submit their reports to both Congress and the President. H.R. 6455 requires that the report is made public. Most congressional advisory commissions are required to submit their reports to Congress, and sometimes to the President or an executive department or agency head. For example, the National Commission on Severely Distressed Public Housing's final report was submitted to both Congress and the Secretary of Housing and Urban Development. Commission Termination Congressional commissions are usually statutorily mandated to terminate. Termination dates for most commissions are linked to either a fixed period of time after the establishment of the commission, the selection of members, or the date of submission of the commission's final report. Alternatively, some commissions are given fixed calendar termination dates. All five commission proposals would provide for the commission to terminate within a certain period of time following submission of its final report. H.R. 6429 , H.R. 6431 , H.R. 6440 , and H.R. 6455 would each direct the commission to terminate 60 days after the submission; H.R. 6548 specifies a time line of 90 days after submission. Commission Powers Each of the five proposals would provide the proposed commission with certain powers to carry out its mission (see Table 1 for specifics). One general issue for commissions is who is authorized to execute such powers. In some cases, the commission itself executes its powers, with the commission deciding whether to devise rules and procedures for the general use of such power. In other cases, the legislation specifically authorizes the commission to give discretionary power to subcommittees or individual commission members. Finally, the legislation itself might grant certain powers to individual members of the commission, such as the chair. Hearings and Evidence All five bills would provide the proposed commission with the power to hold hearings, take testimony, and receive evidence. All five commissions would also be provided the power to administer oaths to witnesses. Subpoenas Four of the bills would provide the commission with subpoena power. H.R. 6440 would not provide subpoena power to the commission. H.R. 6429 , H.R. 6431 , and H.R. 6548 would provide that subpoenas could only be issued by either (1) agreement of the chair and vice chair, or (2) the affirmative vote of 6 (of 10) commission members. H.R. 6455 would require that a subpoena could only be issued by either agreement of the chair and vice chair or an affirmative vote of 18 (of 25) commission members. All four bills that would provide subpoena power contain substantially similar judicial methods of subpoena enforcement. Administrative Support All five of the bills would provide that the commission receive administrative support from the General Services Administration (GSA). The GSA provides administrative support to dozens of federal entities, including congressional advisory commissions. Each of the five bills would provide that GSA be reimbursed for its services by the commission. Each bill also provides that other departments or agencies may provide funds, facilities, staff, and other services to the commission. Other Powers Without explicit language authorizing certain activities, commissions often cannot gather information, enter into contracts, use the U.S. mail like an executive branch entity, or accept donations or gifts. All five bills direct that federal agencies provide information to the commission upon request. H.R. 6429 , H.R. 6431 , and H.R. 6548 would also provide that the commission could use the U.S. mails in the same manner as any department or agency, enter into contracts, and accept gifts or donations of services or property. Staffing The proposed COVID-19 commissions contain staffing provisions commonly found in congressional advisory commission legislation. Congressional advisory commissions are usually authorized to hire staff. Most statutes specify that the commission may hire a lead staffer, often referred to as a "staff director," "executive director," or another similar title, in addition to additional staff as needed. Rather than mandate a specific staff size, many commissions are instead authorized to appoint a staff director and other personnel as necessary, subject to the limitations of available funds. Most congressional commissions are also authorized to hire consultants, procure intermittent services, and request that federal agencies detail personnel to aid the work of the commission. Director and Commission Staff Four of the bills provide that the commission may hire staff without regard to certain laws regarding the competitive service; H.R. 6440 does not specifically exempt the commission from such laws. Four bills ( H.R. 6429 , H.R. 6431 , H.R. 6455 , and H.R. 6548 ) would authorize, but not require, the commission to hire a staff director and additional staff, as appropriate. Four proposals would limit staff salaries to level V of the executive schedule. Three of the bills would specifically designate staff as federal employees for the purposes of certain laws, such as workman's compensation, retirement, and other benefits. Detailees When authorized, some commissions can have federal agency staff detailed to the commission. All five bills would provide that federal employees could be detailed to the commission. Four bills would provide that the detailee would be without reimbursement to his or her home agency. H.R. 6440 would allow detailees on a reimbursable basis. Experts and Consultants All five bills would provide the commission with the authority to hire experts and consultants. Four of the bills limit the rate of pay for consultants to level IV of the Executive Schedule. H.R. 6440 does not specify a specific limit. Security Clearances Four bills would provide that federal agencies and departments shall cooperate with the commission to provide members and staff appropriate security clearances. H.R. 6440 does not contain a security clearance provision. Funding and Costs Commissions generally require funding to help meet their statutory goals. When designing a commission, therefore, policymakers may consider both how the commission will be funded, and how much funding the commission will be authorized to receive. Four of the five proposals specify a funding mechanism for the commission. How commissions are funded and the amounts that they receive vary considerably. Several factors can contribute to overall commission costs. These factors might include the cost of hiring staff, contracting with outside consultants, and engaging administrative support, among others. Additionally, most commissions reimburse the travel expenditures of commissioners and staff, and some compensate their members. The duration of a commission can also significantly affect its cost; past congressional commissions have been designed to last anywhere from several months to several years. Costs It is difficult to estimate or predict the potential overall cost of any commission. Annual budgets for congressional advisory entities range from several hundred thousand dollars to millions of dollars annually. Overall expenses for any individual advisory entity depend on a variety of factors, the most important of which are the number of paid staff and the commission's duration and scope. Some commissions have few full-time staff; others employ large numbers, such as the National Commission on Terrorist Attacks Upon the United States, which had a full-time paid staff of nearly 80. Secondary factors that can affect commission costs include the number of commissioners, how often the commission meets or holds hearings, whether or not the commission travels or holds field hearings, and the publications the commission produces. Authorized Funding Three of the bills ( H.R. 6429 , H.R. 6440 , and H.R. 6548 ) would authorize the appropriation of "such sums as may be necessary" for the commission, to be derived in equal amounts from the contingent fund of the Senate and the applicable accounts of the House of Representatives. H.R. 6429 and H.R. 6548 would provide that funds are available until the commission terminates. H.R. 6455 would authorize the appropriation of $4 million for the commission, to remain available until the commission terminates. H.R. 6431 does not include an authorization of appropriations. Comparison of Proposals to Create a COVID-19 Commission Table 1 provides a side-by-side comparison of major provisions of the five proposals. For each bill, the membership structure, appointment structure, rules of procedure and operation, duties and reporting requirements, proposed commission powers, staffing provisions, and funding are compared.	Summary:	gov_report	1,024	null	0
crs_R46255	crs_R46255_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The U.S. government administers multiple international food assistance programs that aim to alleviate hunger and improve food security in other countries. Some of these programs provide emergency assistance to people affected by conflict or natural disaster. Other programs provide nonemergency assistance to address chronic poverty and hunger, such as by providing food to people during a seasonal food shortage or training communities on issues related to nutrition. U.S. international food assistance programs originated in 1954 with the Food for Peace Act (P.L. 83-480), also referred to as P.L. 480 . Historically, the United States has provided international food assistance primarily through in-kind aid , whereby U.S. commodities are shipped to countries in need. Congress typically funds in-kind food aid programs through the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Actâknown as the Agriculture appropriations bill. The Agriculture appropriations bill funds the U.S. Department of Agriculture (USDA) except for the Forest Service. In 2010, the U.S. Agency for International Development (USAID) began providing market-based assistance to supplement in-kind aid in emergency and nonemergency situations. Market-based assistance provides cash transfers, vouchers, or local and regional procurement (LRP)âfood purchased in the country or region where it is to be distributed rather than purchased in the United States. Congress funds most market-based assistance through the Department of State, Foreign Operations, and Related Programs (SFOPS) appropriations bill. The SFOPS appropriations bill funds the U.S. Department of State, USAID, and other non-defense foreign policy agencies. For FY2020, the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ) provided approximately $4.091 billion for U.S. international food assistance programs. This was an 11% decrease from the $4.581 billion provided in FY2019. Division B of P.L. 116-94 provided $1.945 billion for international food assistance programs in Agriculture appropriations, including $1.725 billion for the Food for Peace (FFP) Title II program and $220 million for the McGovern-Dole International Food for Education and Child Nutrition Program. Division G of P.L. 116-94 provided an estimated $2.146 billion for international food assistance programs in SFOPS appropriations. This included an estimated $2.066 billion for the Emergency Food Security Program (EFSP) and $80 million for the Community Development Fund (CDF). This report provides an overview of accounts in the Agriculture and SFOPS appropriations bills that fund international food assistance programs. It summarizes the Trump Administration's FY2020 budget request for international food assistance. The report then details the international food assistance provisions in the FY2020 enacted Agriculture and SFOPS appropriations billsâDivision B and Division G of P.L. 116-94 , respectively. International Food Assistance Programs Congress funds most U.S. international food assistance programs through two annual appropriations billsâthe Agriculture appropriations bill and the SFOPS appropriations bill. The following sections detail each account in the Agriculture and SFOPS appropriations bills that funds international food assistance and the programs funded through these accounts. Table 1 lists each international food assistance account along with the respective appropriations bill, funded programs, primary delivery method, and implementing agency. Figure 1 depicts each U.S. international food assistance program by authorizing and appropriations committee jurisdiction and implementing agency. Agriculture-Funded International Food Assistance Accounts Some international food assistance programs under the jurisdiction of the Agriculture appropriations committees receive discretionary funding, while other programs receive mandatory funding. Congress authorizes discretionary funding levels in authorizing legislation. A program's receipt of any of the authorized funding then awaits congressional discretion in annual appropriations. With mandatory funding, Congress authorizes and provides funding in authorizing legislation. Thus, programs with mandatory funding do not require a separate appropriation. The Food for Peace Act (P.L. 83-480) is the primary authorizing legislation for international food assistance programs funded through agriculture appropriations. Congress reauthorizes discretionary and mandatory funding levels for these programs in periodic farm bills, most recently the Agriculture Improvement Act of 2018 (2018 farm bill; P.L. 115-334 ). Congress provides discretionary funding for international food assistance programs through three accounts in the Foreign Assistance and Related Programs title of the Agriculture appropriations bill: the Food for Peace Title I Direct Credit and Food for Progress Program account, the Food for Peace Title II Grants account, and the McGovern-Dole International Food for Education and Child Nutrition Program Grants account. Congress has periodically provided additional discretionary funding for international food assistance in the General Provisions title of the Agriculture appropriations bill. Food for Peace Title I Direct Credit and Food for Progress Program Account The Food for Peace (FFP) Title I Direct Credit and Food for Progress Program account provides administrative expenses for the FFP Title I and Food for Progress programs. FFP Title I provides concessional sales âsales on credit terms below market rates (loans)âof U.S. commodities to governments of developing countries and private entities. USDA administers FFP Title I. Congress has not appropriated funds for new FFP Title I sales since FY2006 but continues to appropriate funds to administer the FFP Title I loans provided before FY2006. Food for Progress donates U.S. agricultural commodities to governments or organizations to be monetized âsold on local markets in recipient countries to generate proceeds for economic development projects. Congress has authorized Food for Progress to receive both mandatory and discretionary funding. This account receives annual appropriations to cover administrative expenses. Congress primarily funds programmatic activities through mandatory funding. Food for Peace Title II Grants Account The Food for Peace Title II Grants account funds the FFP Title II program. FFP Title II donates U.S. agricultural commodities to recipients in foreign countries. FFP Title II provides both emergency and nonemergency aid. Typically, the majority of FFP Title II funds support emergency aid. USAID administers FFP Title II. Congress appropriates FFP Title II funds to USDA, which then transfers the funds to USAID. Since the mid-1980s, FFP Title II has received the majority of funds appropriated to international food assistance in the Agriculture appropriations bill. FFP Title II also receives some funding for nonemergency assistance from the Community Development Fund in the SFOPS appropriations bill (see " SFOPS-Funded International Food Assistance Accounts "). McGovern-Dole International Food for Education and Child Nutrition Program Grants Account This account funds the McGovern-Dole International Food for Education and Child Nutrition Program. McGovern-Dole donates U.S. agricultural commodities to school feeding programs and pregnant or nursing mothers in qualifying countries. USDA administers McGovern-Dole. Since FY2016, Congress has set aside a portion of McGovern-Dole funds for LRP. The 2018 farm bill authorized USDA to use up to 10% of annual McGovern-Dole funds for LRP. The Farmer-to-Farmer Program Set-Aside Congress funds the Farmer-to-Farmer Program, also known as FFP Title V, through a set-aside of the total appropriation for Food for Peace Act programs. This program finances short-term placements for U.S. volunteers to provide technical assistance to farmers in developing countries. USAID administers the Farmer-to-Farmer Program. Statute sets minimum program funding as the greater of $10 million or 0.5% of annual funds for Food for Peace Act programs and maximum program funding as the greater of $15 million or 0.6% of annual funds for Food for Peace Act programs. Programs with Mandatory Funding Congress has authorized certain U.S. international food aid programs to receive mandatory funding. Food for Progress relies primarily on mandatory funding financed through USDA's Commodity Credit Corporation (CCC). Food for Progress does not typically receive discretionary funding beyond funding for administrative expenses provided by the FFP Title I account. However, in FY2019, Congress provided discretionary funding for Food for Progress in the General Provisions title of the Agriculture Appropriations Act. The Bill Emerson Humanitarian Trust (BEHT) is a reserve of funds held by the CCC. USDA can use BEHT funds to supplement FFP Title II activities, especially when FFP Title II funds alone cannot meet emergency international food needs. If USDA provides aid through BEHT, Congress may appropriate funds to the CCC in a subsequent fiscal year to reimburse the CCC for the value of the released funds. USDA did not release funds from BEHT in FY2019, and Congress did not appropriate any BEHT reimbursement funds to the CCC in FY2020. SFOPS-Funded International Food Assistance Accounts Congress funds international food assistance programs through two funding accounts in the SFOPS appropriation using discretionary funds. International Disaster Assistance The International Disaster Assistance (IDA) funding account provides for EFSP, which USAID first employed in FY2010 to supplement its emergency FFP Title II in-kind aid. Congress permanently authorized the program in the Global Food Security Act of 2016 ( P.L. 114-195 ). Congress does not specify the exact funding level for EFSP in its annual appropriation; rather, USAID determines the allocation of IDA funds in response to humanitarian need in any given year. Between FY2015 and FY2019, EFSP represented an average of 47% of the whole IDA appropriation. Development Assistance Congress designates funding within the Development Assistance (DA) account for CDF. CDF funds complement FFP Title II nonemergency programs. USAID first used CDF in FY2010 to reduce its reliance on monetization âthe practice of implementing partners selling U.S. commodities on local markets and using the proceeds to fund programs. As with EFSP, CDF offers USAID the flexibility to pursue market-based interventions including cash transfers, food vouchers, and LRP. Today, CDF continues to complement FFP Title II nonemergency programming but is no longer needed to offset monetization, as the practice is no longer a legislative requirement. Congress designates the level of CDF in its reports accompanying annual appropriations (often referred to as a "soft earmark"). For more information on CDF, see CRS Report R45879, International Food Assistance: Food for Peace Nonemergency Programs , by Emily M. Morgenstern. The Administration's FY2020 Budget Request For the third year in a row, the Trump Administration's FY2020 budget request proposed eliminating McGovern-Dole and FFP Title II. However, unlike in the FY2018 and FY2019 requestsâin which the President proposed shifting all funding for international food assistance to the IDA account within the SFOPS appropriations billâthe President's FY2020 request proposed creating a new International Humanitarian Assistance (IHA) account. The proposed IHA account would have consolidated four humanitarian assistance accountsâthe IDA, Migration and Refugee Assistance, and Emergency Refugee and Migration Assistance accounts that are funded in SFOPS appropriations, along with FFP Title II within Agriculture appropriationsâinto a single account within the SFOPS appropriations bill. The FY2020 budget request also repeated past proposals to eliminate Food for Progress and merge the DA account with the Economic Support Fund (ESF), Democracy Fund (DF), and Assistance for Europe, Eurasia, and Central Asia (AEECA) accounts to create a new Economic Support and Development Fund (ESDF) within SFOPS appropriations. Congress did not adopt the Administration's FY2020 proposals to eliminate FFP Title II, McGovern-Dole, or Food for Progress or create the new combined IHA and ESDF accounts. The following section summarizes the Administration's FY2020 budget requests for U.S. international food assistance programs in the Agriculture and SFOPS appropriations bills. FY2020 Agriculture Funding Request For FY2020, the Trump Administration requested discretionary funding for one international food assistance program account. The Administration requested $135,000 for the FFP Title I account to carry out existing FFP Title I loans and Food for Progress projects. This amount would have been $14,000 less than the FY2019 enacted amount for the FFP Title I account. The Administration's FY2020 budget request stated that the workload to administer FFP Title I was "significantly less than previously estimated" and that "funds were redirected to meet higher priorities." The FY2020 request also repeated the FY2018 and FY2019 proposals to eliminate FFP Title II, and McGovern-Dole and the FY2019 proposal to eliminate Food for Progress. Regarding FFP Title II, the Administration stated "To replace the inefficient food aid provided through Title II, the 2020 request includes funding for emergency food needs within the new, more efficient International Humanitarian Assistance (IHA) account." Eliminating FFP Title II would fund all emergency food assistance through the SFOPS appropriations rather than jointly between the SFOPS and Agriculture appropriations bills. Regarding the proposed elimination of McGovern-Dole, the Administration's FY2020 request stated, "In kind food aid is associated with high transportation and other costs and is inefficient compared to other types of development assistance. In addition, the McGovern Dole program has unaddressed oversight and performance monitoring challenges." Food for Progress primarily receives mandatory funding. The FY2020 request proposes to eliminate mandatory funding authority, estimating that this would result in $1.7 billion in savings over 10 years. FY2020 SFOPS Funding Request The FY2020 SFOPS budget proposal included a combined IHA account that would have consolidated the four humanitarian assistance accounts. According to budget documents, the IHA account would have supported "all aspects of humanitarian assistance, including shelter, protection, emergency health and nutrition, the provision of safe drinking water, livelihoods supports, emergency food interventions, rehabilitation, disaster risk reduction, and transition to development assistance programs," among other activities. The account would have been managed by the newly consolidated Humanitarian Assistance Bureau at USAID but with a "senior dual-hat leader" under the policy authority of the Secretary of State reporting to both the Secretary of State and the USAID administrator. The Administration proposed $5.97 billion for the IHA account, a 37% decrease from the combined FY2019 appropriations for IDA, FFP Title II, Migration and Refugee Assistance, and Emergency Refugee and Migration Assistance. The FY2020 SFOPS budget proposal also included a combined ESDF account that would have merged the DA, ESF, DF, and AEECA accounts. The FY2020 proposal included $5.23 billion for ESDF, a 32% decrease from the FY2019 appropriations for the four accounts combined. Potential Implications of the FY2020 Funding Request Moving funding from FFP Title II to a new IHA could have changed how the United States delivers food assistance to recipient countries. Statute requires that nearly all assistance distributed under FFP Title II be in-kind aid. By contrast, EFSP, which Congress currently funds through the IDA account but which the Administration proposed to fund through the new IHA, does not have a statutory requirement to provide a portion of assistance as in-kind aid. EFSP can provide in-kind aid or market-based assistance. Therefore, under current statutes, shifting international food assistance funding from FFP Title II to IHA would have meant this funding would not have needed to adhere to the FFP Title II requirement to provide in-kind aid. This could have increased the portion of food assistance provided as market-based assistance rather than in-kind aid and would have shifted implementation from USDA to USAID. Proposals to shift U.S. international food assistance funding from in-kind food aid to market-based food assistance are not new. Both the Obama and George W. Bush Administrations proposed increasing the portion of U.S. international food assistance delivered as market-based assistance. Some proponents of increasing the use of market-based assistance argue that it could improve program efficiency. However, some interested parties assert that the Trump Administration's proposed decrease in overall funding for international food assistance could offset potential efficiency gains, resulting in fewer people receiving assistance. Some opponents of increasing the share of food assistance that is market-based rather than in-kind maintain that in-kind aid ensures that the United States provides high-quality food to recipients. Certain stakeholders, such as some agricultural commodity groups, may also oppose such changes due to their implications for U.S. government purchase of U.S. commodities. In addition to the implications above, there are a number of international food assistance issues in which Members of Congress have expressed interest. These include the share of in-kind and market-based food assistance, cargo preference requirements, and congressional jurisdiction, among others. For more information on the broad range of international food assistance-related issues, see CRS Report R45422, U.S. International Food Assistance: An Overview , by Alyssa R. Casey. Congressional Appropriations The FY2020 Agriculture Appropriations Act provided funding for U.S. international food assistance programs in the Foreign Assistance and Related Programs title (Title V). This included funding for FFP Title II and McGovern-Dole. The act also provided funding for administrative expenses to manage existing FFP Title I loans that originated while the FFP Title I program was active. Unlike in FY2019, Congress did not provide discretionary funding in FY2020 for the Food for Progress program. The FY2020 SFOPS Appropriations Act provided funding for international food assistance programs in Bilateral Assistance (Title III). Figure 2 shows funding trends for international food assistance programs for FY2015-FY2020. Table 2 details appropriations for international food assistance programs for FY2018-FY2020, including proposed funding levels in the FY2020 Administration's request and House and Senate Agriculture and SFOPS appropriations bills. FY2020 Agriculture Appropriations The Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 , Div. B) provided $1.945 billion for international food assistance programs, roughly level with the FY2019 enacted amount of $1.942 billion. The FY2020 enacted amount was less than the $2.085 billion in the House-passed Agriculture appropriations bill ( H.R. 3055 ) but more than the $1.926 billion in the Senate-passed bill ( H.R. 3055 ). Congress did not adopt the Administration's FY2020 proposal to eliminate FFP Title II, McGovern-Dole, and Food for Progress. The FY2020 act provided $1.725 billion for FFP Title II, a 0.5% increase from the $1.716 billion provided in FY2019. In FY2020, Congress provided all FFP Title II funding in the Foreign Assistance and Related Programs title (Title V) of the Agriculture appropriations bill. This was a change from FY2019, when Congress provided the majority of FFP Title II funding ($1.5 billion) in the Foreign Assistance title but provided additional funding for FFP Title II ($216 million) in the bill's General Provisions title (Title VII). The FY2020 act provided $220 million for McGovern-Dole, a 5% increase from the FY2019 enacted amount of $210. Congress directed a minimum of $20 million of McGovern-Dole funding and a maximum of 10% of total program funding ($22 million) be set aside for LRP. This was an increase from the $15 million set-aside in FY2019. The FY2020 act also provided $142,000 for FFP Title I and Food for Progress administrative expenses, equal to the FY2019 enacted amount. Unlike in FY2019, the FY2020 act did not provide discretionary appropriations for Food for Progress. Congress typically funds this program through mandatory funding. The 2018 farm bill ( P.L. 115-334 , Â§3302) authorized new pilot agreements within the Food for Progress program to directly fund economic development projects rather than funding the projects through monetizing commodities. The 2018 farm bill authorized $10 million per year for FY2019-FY2023 for pilot agreements, subject to annual appropriations. Congress did not appropriate funding for Food for Progress pilot agreements in FY2019 or FY2020. FY2020 SFOPS Appropriations Division G of the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ) provided funds for international food assistance programs appropriated under the SFOPS measure. The enacted IDA appropriation level grew by 0.2%, from $4.385 billion in FY2019 to $4.395 billion in FY2020. As in prior fiscal years, the measure did not determine a specific level for EFSP. IDA funds are designated to "carry out the provisions of section 491 of the Foreign Assistance Act of 1961 for international disaster relief, rehabilitation, and reconstruction assistance." Because the account is meant to respond to international emergencies, Congress tends to appropriate funds in a lump sum instead of directing funds toward specific countries or crises. As in previous fiscal years, the final FY2020 act included $80 million for CDF under DA. Policy-Related Provisions In addition to providing funding, the Agriculture and SFOPS appropriations bills may contain policy-related provisions that direct the executive branch how to spend certain funds. Provisions included in appropriations act text have the force of law but generally only for the duration of the fiscal year for which the act provides appropriations. Policy-related provisions generally do not amend the U.S. Code . Table 3 compares select policy-related provisions pertaining to U.S. international food aid programs from the Foreign Assistance and Related Programs (Title V) and General Provisions (Title VII) titles of the FY2019 and FY2020 Agriculture Appropriations Acts. There was no language from the SFOPS bills for a similar table. The explanatory statement that accompanies the appropriations act, as well as the committee reports that accompany the House and Senate committee-reported bills, can provide statements of support for certain programs or directions to federal agencies on how to spend certain funding provided in the appropriations bill. While these documents generally do not have the force of law, they can express congressional intent. The committee reports and explanatory statement may need to be read together to capture all of the congressional intent for a given fiscal year. Table 4 compares selected policy-related provisions pertaining to U.S. international food aid programs from the FY2019 and FY2020 House and Senate committee reports and explanatory statement for the FY2020 Agriculture Appropriations Act. Table 5 compares one selected policy-related provision pertaining to U.S. international food assistance programs from the FY2019 and FY2020 House and Senate committee reports and explanatory statement for the FY2020 SFOPS appropriation. Summary:	null	96	24,098	24,100	24,100	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The U.S. government administers multiple international food assistance programs that aim to alleviate hunger and improve food security in other countries. Some of these programs provide emergency assistance to people affected by conflict or natural disaster. Other programs provide nonemergency assistance to address chronic poverty and hunger, such as by providing food to people during a seasonal food shortage or training communities on issues related to nutrition. U.S. international food assistance programs originated in 1954 with the Food for Peace Act (P.L. 83-480), also referred to as P.L. 480 . Historically, the United States has provided international food assistance primarily through in-kind aid , whereby U.S. commodities are shipped to countries in need. Congress typically funds in-kind food aid programs through the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Actâknown as the Agriculture appropriations bill. The Agriculture appropriations bill funds the U.S. Department of Agriculture (USDA) except for the Forest Service. In 2010, the U.S. Agency for International Development (USAID) began providing market-based assistance to supplement in-kind aid in emergency and nonemergency situations. Market-based assistance provides cash transfers, vouchers, or local and regional procurement (LRP)âfood purchased in the country or region where it is to be distributed rather than purchased in the United States. Congress funds most market-based assistance through the Department of State, Foreign Operations, and Related Programs (SFOPS) appropriations bill. The SFOPS appropriations bill funds the U.S. Department of State, USAID, and other non-defense foreign policy agencies. For FY2020, the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ) provided approximately $4.091 billion for U.S. international food assistance programs. This was an 11% decrease from the $4.581 billion provided in FY2019. Division B of P.L. 116-94 provided $1.945 billion for international food assistance programs in Agriculture appropriations, including $1.725 billion for the Food for Peace (FFP) Title II program and $220 million for the McGovern-Dole International Food for Education and Child Nutrition Program. Division G of P.L. 116-94 provided an estimated $2.146 billion for international food assistance programs in SFOPS appropriations. This included an estimated $2.066 billion for the Emergency Food Security Program (EFSP) and $80 million for the Community Development Fund (CDF). This report provides an overview of accounts in the Agriculture and SFOPS appropriations bills that fund international food assistance programs. It summarizes the Trump Administration's FY2020 budget request for international food assistance. The report then details the international food assistance provisions in the FY2020 enacted Agriculture and SFOPS appropriations billsâDivision B and Division G of P.L. 116-94 , respectively. International Food Assistance Programs Congress funds most U.S. international food assistance programs through two annual appropriations billsâthe Agriculture appropriations bill and the SFOPS appropriations bill. The following sections detail each account in the Agriculture and SFOPS appropriations bills that funds international food assistance and the programs funded through these accounts. Table 1 lists each international food assistance account along with the respective appropriations bill, funded programs, primary delivery method, and implementing agency. Figure 1 depicts each U.S. international food assistance program by authorizing and appropriations committee jurisdiction and implementing agency. Agriculture-Funded International Food Assistance Accounts Some international food assistance programs under the jurisdiction of the Agriculture appropriations committees receive discretionary funding, while other programs receive mandatory funding. Congress authorizes discretionary funding levels in authorizing legislation. A program's receipt of any of the authorized funding then awaits congressional discretion in annual appropriations. With mandatory funding, Congress authorizes and provides funding in authorizing legislation. Thus, programs with mandatory funding do not require a separate appropriation. The Food for Peace Act (P.L. 83-480) is the primary authorizing legislation for international food assistance programs funded through agriculture appropriations. Congress reauthorizes discretionary and mandatory funding levels for these programs in periodic farm bills, most recently the Agriculture Improvement Act of 2018 (2018 farm bill; P.L. 115-334 ). Congress provides discretionary funding for international food assistance programs through three accounts in the Foreign Assistance and Related Programs title of the Agriculture appropriations bill: the Food for Peace Title I Direct Credit and Food for Progress Program account, the Food for Peace Title II Grants account, and the McGovern-Dole International Food for Education and Child Nutrition Program Grants account. Congress has periodically provided additional discretionary funding for international food assistance in the General Provisions title of the Agriculture appropriations bill. Food for Peace Title I Direct Credit and Food for Progress Program Account The Food for Peace (FFP) Title I Direct Credit and Food for Progress Program account provides administrative expenses for the FFP Title I and Food for Progress programs. FFP Title I provides concessional sales âsales on credit terms below market rates (loans)âof U.S. commodities to governments of developing countries and private entities. USDA administers FFP Title I. Congress has not appropriated funds for new FFP Title I sales since FY2006 but continues to appropriate funds to administer the FFP Title I loans provided before FY2006. Food for Progress donates U.S. agricultural commodities to governments or organizations to be monetized âsold on local markets in recipient countries to generate proceeds for economic development projects. Congress has authorized Food for Progress to receive both mandatory and discretionary funding. This account receives annual appropriations to cover administrative expenses. Congress primarily funds programmatic activities through mandatory funding. Food for Peace Title II Grants Account The Food for Peace Title II Grants account funds the FFP Title II program. FFP Title II donates U.S. agricultural commodities to recipients in foreign countries. FFP Title II provides both emergency and nonemergency aid. Typically, the majority of FFP Title II funds support emergency aid. USAID administers FFP Title II. Congress appropriates FFP Title II funds to USDA, which then transfers the funds to USAID. Since the mid-1980s, FFP Title II has received the majority of funds appropriated to international food assistance in the Agriculture appropriations bill. FFP Title II also receives some funding for nonemergency assistance from the Community Development Fund in the SFOPS appropriations bill (see " SFOPS-Funded International Food Assistance Accounts "). McGovern-Dole International Food for Education and Child Nutrition Program Grants Account This account funds the McGovern-Dole International Food for Education and Child Nutrition Program. McGovern-Dole donates U.S. agricultural commodities to school feeding programs and pregnant or nursing mothers in qualifying countries. USDA administers McGovern-Dole. Since FY2016, Congress has set aside a portion of McGovern-Dole funds for LRP. The 2018 farm bill authorized USDA to use up to 10% of annual McGovern-Dole funds for LRP. The Farmer-to-Farmer Program Set-Aside Congress funds the Farmer-to-Farmer Program, also known as FFP Title V, through a set-aside of the total appropriation for Food for Peace Act programs. This program finances short-term placements for U.S. volunteers to provide technical assistance to farmers in developing countries. USAID administers the Farmer-to-Farmer Program. Statute sets minimum program funding as the greater of $10 million or 0.5% of annual funds for Food for Peace Act programs and maximum program funding as the greater of $15 million or 0.6% of annual funds for Food for Peace Act programs. Programs with Mandatory Funding Congress has authorized certain U.S. international food aid programs to receive mandatory funding. Food for Progress relies primarily on mandatory funding financed through USDA's Commodity Credit Corporation (CCC). Food for Progress does not typically receive discretionary funding beyond funding for administrative expenses provided by the FFP Title I account. However, in FY2019, Congress provided discretionary funding for Food for Progress in the General Provisions title of the Agriculture Appropriations Act. The Bill Emerson Humanitarian Trust (BEHT) is a reserve of funds held by the CCC. USDA can use BEHT funds to supplement FFP Title II activities, especially when FFP Title II funds alone cannot meet emergency international food needs. If USDA provides aid through BEHT, Congress may appropriate funds to the CCC in a subsequent fiscal year to reimburse the CCC for the value of the released funds. USDA did not release funds from BEHT in FY2019, and Congress did not appropriate any BEHT reimbursement funds to the CCC in FY2020. SFOPS-Funded International Food Assistance Accounts Congress funds international food assistance programs through two funding accounts in the SFOPS appropriation using discretionary funds. International Disaster Assistance The International Disaster Assistance (IDA) funding account provides for EFSP, which USAID first employed in FY2010 to supplement its emergency FFP Title II in-kind aid. Congress permanently authorized the program in the Global Food Security Act of 2016 ( P.L. 114-195 ). Congress does not specify the exact funding level for EFSP in its annual appropriation; rather, USAID determines the allocation of IDA funds in response to humanitarian need in any given year. Between FY2015 and FY2019, EFSP represented an average of 47% of the whole IDA appropriation. Development Assistance Congress designates funding within the Development Assistance (DA) account for CDF. CDF funds complement FFP Title II nonemergency programs. USAID first used CDF in FY2010 to reduce its reliance on monetization âthe practice of implementing partners selling U.S. commodities on local markets and using the proceeds to fund programs. As with EFSP, CDF offers USAID the flexibility to pursue market-based interventions including cash transfers, food vouchers, and LRP. Today, CDF continues to complement FFP Title II nonemergency programming but is no longer needed to offset monetization, as the practice is no longer a legislative requirement. Congress designates the level of CDF in its reports accompanying annual appropriations (often referred to as a "soft earmark"). For more information on CDF, see CRS Report R45879, International Food Assistance: Food for Peace Nonemergency Programs , by Emily M. Morgenstern. The Administration's FY2020 Budget Request For the third year in a row, the Trump Administration's FY2020 budget request proposed eliminating McGovern-Dole and FFP Title II. However, unlike in the FY2018 and FY2019 requestsâin which the President proposed shifting all funding for international food assistance to the IDA account within the SFOPS appropriations billâthe President's FY2020 request proposed creating a new International Humanitarian Assistance (IHA) account. The proposed IHA account would have consolidated four humanitarian assistance accountsâthe IDA, Migration and Refugee Assistance, and Emergency Refugee and Migration Assistance accounts that are funded in SFOPS appropriations, along with FFP Title II within Agriculture appropriationsâinto a single account within the SFOPS appropriations bill. The FY2020 budget request also repeated past proposals to eliminate Food for Progress and merge the DA account with the Economic Support Fund (ESF), Democracy Fund (DF), and Assistance for Europe, Eurasia, and Central Asia (AEECA) accounts to create a new Economic Support and Development Fund (ESDF) within SFOPS appropriations. Congress did not adopt the Administration's FY2020 proposals to eliminate FFP Title II, McGovern-Dole, or Food for Progress or create the new combined IHA and ESDF accounts. The following section summarizes the Administration's FY2020 budget requests for U.S. international food assistance programs in the Agriculture and SFOPS appropriations bills. FY2020 Agriculture Funding Request For FY2020, the Trump Administration requested discretionary funding for one international food assistance program account. The Administration requested $135,000 for the FFP Title I account to carry out existing FFP Title I loans and Food for Progress projects. This amount would have been $14,000 less than the FY2019 enacted amount for the FFP Title I account. The Administration's FY2020 budget request stated that the workload to administer FFP Title I was "significantly less than previously estimated" and that "funds were redirected to meet higher priorities." The FY2020 request also repeated the FY2018 and FY2019 proposals to eliminate FFP Title II, and McGovern-Dole and the FY2019 proposal to eliminate Food for Progress. Regarding FFP Title II, the Administration stated "To replace the inefficient food aid provided through Title II, the 2020 request includes funding for emergency food needs within the new, more efficient International Humanitarian Assistance (IHA) account." Eliminating FFP Title II would fund all emergency food assistance through the SFOPS appropriations rather than jointly between the SFOPS and Agriculture appropriations bills. Regarding the proposed elimination of McGovern-Dole, the Administration's FY2020 request stated, "In kind food aid is associated with high transportation and other costs and is inefficient compared to other types of development assistance. In addition, the McGovern Dole program has unaddressed oversight and performance monitoring challenges." Food for Progress primarily receives mandatory funding. The FY2020 request proposes to eliminate mandatory funding authority, estimating that this would result in $1.7 billion in savings over 10 years. FY2020 SFOPS Funding Request The FY2020 SFOPS budget proposal included a combined IHA account that would have consolidated the four humanitarian assistance accounts. According to budget documents, the IHA account would have supported "all aspects of humanitarian assistance, including shelter, protection, emergency health and nutrition, the provision of safe drinking water, livelihoods supports, emergency food interventions, rehabilitation, disaster risk reduction, and transition to development assistance programs," among other activities. The account would have been managed by the newly consolidated Humanitarian Assistance Bureau at USAID but with a "senior dual-hat leader" under the policy authority of the Secretary of State reporting to both the Secretary of State and the USAID administrator. The Administration proposed $5.97 billion for the IHA account, a 37% decrease from the combined FY2019 appropriations for IDA, FFP Title II, Migration and Refugee Assistance, and Emergency Refugee and Migration Assistance. The FY2020 SFOPS budget proposal also included a combined ESDF account that would have merged the DA, ESF, DF, and AEECA accounts. The FY2020 proposal included $5.23 billion for ESDF, a 32% decrease from the FY2019 appropriations for the four accounts combined. Potential Implications of the FY2020 Funding Request Moving funding from FFP Title II to a new IHA could have changed how the United States delivers food assistance to recipient countries. Statute requires that nearly all assistance distributed under FFP Title II be in-kind aid. By contrast, EFSP, which Congress currently funds through the IDA account but which the Administration proposed to fund through the new IHA, does not have a statutory requirement to provide a portion of assistance as in-kind aid. EFSP can provide in-kind aid or market-based assistance. Therefore, under current statutes, shifting international food assistance funding from FFP Title II to IHA would have meant this funding would not have needed to adhere to the FFP Title II requirement to provide in-kind aid. This could have increased the portion of food assistance provided as market-based assistance rather than in-kind aid and would have shifted implementation from USDA to USAID. Proposals to shift U.S. international food assistance funding from in-kind food aid to market-based food assistance are not new. Both the Obama and George W. Bush Administrations proposed increasing the portion of U.S. international food assistance delivered as market-based assistance. Some proponents of increasing the use of market-based assistance argue that it could improve program efficiency. However, some interested parties assert that the Trump Administration's proposed decrease in overall funding for international food assistance could offset potential efficiency gains, resulting in fewer people receiving assistance. Some opponents of increasing the share of food assistance that is market-based rather than in-kind maintain that in-kind aid ensures that the United States provides high-quality food to recipients. Certain stakeholders, such as some agricultural commodity groups, may also oppose such changes due to their implications for U.S. government purchase of U.S. commodities. In addition to the implications above, there are a number of international food assistance issues in which Members of Congress have expressed interest. These include the share of in-kind and market-based food assistance, cargo preference requirements, and congressional jurisdiction, among others. For more information on the broad range of international food assistance-related issues, see CRS Report R45422, U.S. International Food Assistance: An Overview , by Alyssa R. Casey. Congressional Appropriations The FY2020 Agriculture Appropriations Act provided funding for U.S. international food assistance programs in the Foreign Assistance and Related Programs title (Title V). This included funding for FFP Title II and McGovern-Dole. The act also provided funding for administrative expenses to manage existing FFP Title I loans that originated while the FFP Title I program was active. Unlike in FY2019, Congress did not provide discretionary funding in FY2020 for the Food for Progress program. The FY2020 SFOPS Appropriations Act provided funding for international food assistance programs in Bilateral Assistance (Title III). Figure 2 shows funding trends for international food assistance programs for FY2015-FY2020. Table 2 details appropriations for international food assistance programs for FY2018-FY2020, including proposed funding levels in the FY2020 Administration's request and House and Senate Agriculture and SFOPS appropriations bills. FY2020 Agriculture Appropriations The Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 , Div. B) provided $1.945 billion for international food assistance programs, roughly level with the FY2019 enacted amount of $1.942 billion. The FY2020 enacted amount was less than the $2.085 billion in the House-passed Agriculture appropriations bill ( H.R. 3055 ) but more than the $1.926 billion in the Senate-passed bill ( H.R. 3055 ). Congress did not adopt the Administration's FY2020 proposal to eliminate FFP Title II, McGovern-Dole, and Food for Progress. The FY2020 act provided $1.725 billion for FFP Title II, a 0.5% increase from the $1.716 billion provided in FY2019. In FY2020, Congress provided all FFP Title II funding in the Foreign Assistance and Related Programs title (Title V) of the Agriculture appropriations bill. This was a change from FY2019, when Congress provided the majority of FFP Title II funding ($1.5 billion) in the Foreign Assistance title but provided additional funding for FFP Title II ($216 million) in the bill's General Provisions title (Title VII). The FY2020 act provided $220 million for McGovern-Dole, a 5% increase from the FY2019 enacted amount of $210. Congress directed a minimum of $20 million of McGovern-Dole funding and a maximum of 10% of total program funding ($22 million) be set aside for LRP. This was an increase from the $15 million set-aside in FY2019. The FY2020 act also provided $142,000 for FFP Title I and Food for Progress administrative expenses, equal to the FY2019 enacted amount. Unlike in FY2019, the FY2020 act did not provide discretionary appropriations for Food for Progress. Congress typically funds this program through mandatory funding. The 2018 farm bill ( P.L. 115-334 , Â§3302) authorized new pilot agreements within the Food for Progress program to directly fund economic development projects rather than funding the projects through monetizing commodities. The 2018 farm bill authorized $10 million per year for FY2019-FY2023 for pilot agreements, subject to annual appropriations. Congress did not appropriate funding for Food for Progress pilot agreements in FY2019 or FY2020. FY2020 SFOPS Appropriations Division G of the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ) provided funds for international food assistance programs appropriated under the SFOPS measure. The enacted IDA appropriation level grew by 0.2%, from $4.385 billion in FY2019 to $4.395 billion in FY2020. As in prior fiscal years, the measure did not determine a specific level for EFSP. IDA funds are designated to "carry out the provisions of section 491 of the Foreign Assistance Act of 1961 for international disaster relief, rehabilitation, and reconstruction assistance." Because the account is meant to respond to international emergencies, Congress tends to appropriate funds in a lump sum instead of directing funds toward specific countries or crises. As in previous fiscal years, the final FY2020 act included $80 million for CDF under DA. Policy-Related Provisions In addition to providing funding, the Agriculture and SFOPS appropriations bills may contain policy-related provisions that direct the executive branch how to spend certain funds. Provisions included in appropriations act text have the force of law but generally only for the duration of the fiscal year for which the act provides appropriations. Policy-related provisions generally do not amend the U.S. Code . Table 3 compares select policy-related provisions pertaining to U.S. international food aid programs from the Foreign Assistance and Related Programs (Title V) and General Provisions (Title VII) titles of the FY2019 and FY2020 Agriculture Appropriations Acts. There was no language from the SFOPS bills for a similar table. The explanatory statement that accompanies the appropriations act, as well as the committee reports that accompany the House and Senate committee-reported bills, can provide statements of support for certain programs or directions to federal agencies on how to spend certain funding provided in the appropriations bill. While these documents generally do not have the force of law, they can express congressional intent. The committee reports and explanatory statement may need to be read together to capture all of the congressional intent for a given fiscal year. Table 4 compares selected policy-related provisions pertaining to U.S. international food aid programs from the FY2019 and FY2020 House and Senate committee reports and explanatory statement for the FY2020 Agriculture Appropriations Act. Table 5 compares one selected policy-related provision pertaining to U.S. international food assistance programs from the FY2019 and FY2020 House and Senate committee reports and explanatory statement for the FY2020 SFOPS appropriation.	Summary:	gov_report	1,024	null	1
crs_R45933	crs_R45933_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction On August 1, 2018 , the World Health Organization (WHO) reported a new Ebola outbreak in eastern DRC, about a week after having declared the end of a separate outbreak in the west of the country. As of September 24, 2019, the WHO had reported 3,175 cases in the current outbreak, including 2,119 deaths. About 58% of all cases have been women and 28% children. The current outbreak is the 10 th on record in DRC, the largest to have occurred in the country, and the second largest ever, after the 2014-2016 Ebola outbreak in West Africa. Cases have been concentrated in North Kivu and Ituri provinces ( Figure 1 ), where long-running conflicts had already caused a protracted humanitarian crisis and are complicating Ebola control efforts. The number of new Ebola cases identified per week has fluctuated since the start of the outbreak ( Figure 2 ), but has generally trended downward slowly since peaking in April 2019. The current outbreak has coincided with a fraught political transition process in DRC. A new president, parliament, provincial-level assemblies, and governors were elected between late 2018 and mid-2019, after years of delays, gridlock, political violence, and repression of opposition voices. Election delays in the Ebola-affected areas, an opposition stronghold, heightened tensions and spurred conspiracy theories, arguably hindering Ebola response. President Felix Tshisekedi, inaugurated in January 2019, was previously an opposition figure, but the coalition of his predecessor Joseph Kabila won supermajorities in parliament and at the provincial level. Observers questioned the legitimacy of the election results, and tense negotiations between the two political blocs (Tshisekedi's and Kabila's) delayed the naming of a new cabinet until late August 2019, while complicating relations between the national and provincial/local officials. Several factors have foiled outbreak control efforts, including low Ebola awareness (early symptoms are similar to other common ailments like malaria), community distrust of health interventions, belated visits to health facilities (at which point survival prospects decline rapidly), and infection prevention control lapses in health facilities. Attacks by militia and criminal groups, political protests, health worker strikes, and security force abuses have also disrupted and impeded the response. In mid-September, for example, violent attacks in a new hotspot (Lwemba, Ituri Province) after the death of a local healthcare worker from Ebola prompted the indefinite suspension of Ebola control activities in the area. As a result, new cases continue to stem from unknown chains of transmission, and deaths continue to occur outside Ebola treatment centers. U.S. officials and other health experts have repeatedly raised concerns about broader challenges in DRC related to its health care system, political tensions, local grievances, and instability. USAID Administrator Mark Green testified to Congress in April 2019 that in DRC, "You have a failed democracy in many, many waysâ¦. It will take more than simply a medical approach. It will take a development approach to try to tackle this terrible disease and to contain its outbreak." After traveling to DRC in August 2019, Administrator Green wrote, "Decades of corrupt, authoritarian rule during which communities were denied any meaningful voice in their government have undermined the Congolese people's trust in institutions." Health experts have been troubled by reports of Ebola cases in major DRC cities (including the capital of North Kivu, Goma) and outside of DRC. Between June and August 2019, a total of four cross-border cases were detected in Uganda. Observers expressed optimism about the rapid detection and containment of these cases, but new concerns have arisen about subsequent suspected cases in Tanzania. In mid-September, WHO was informed by unofficial sources of a number of suspected Ebola cases in that country, including in the capital city of Dar es Salaam, while Tanzanian authorities asserted that there were no confirmed or suspected Ebola cases in the country. WHO has reportedly since sent personal protective equipment (PPE) and vaccination supplies to Tanzania, and recommended that the sickened patients (one of whom reportedly died) receive secondary confirmation testing at a WHO facility. As of September 21, none of the cases had received secondary confirmation. Ebola control in other neighboring countries such as South Sudan, Burundi, or Central Africa Republic, which have minimal state capacity and are affected by protracted conflicts and political crises, could be highly challenging if required. The International Response Outbreak control, treatment, and disease surveillance activities are being carried out primarily by DRC government employees (including health workers and frontline workers, who provide routine and essential services), as well as by international nongovernmental organizations, with U.N. agencies (including the WHO), other multilateral entities (including the World Bank), and foreign governments providing funding, expertise, coordination, and logistical assistance. Classic Ebola outbreak control protocol entails infection prevention control (IPC) in health care facilities; management and isolation of patients in Ebola Treatment Centers (ETCs); fever surveillance with rapid diagnosis; tracing of Ebola cases and their contacts; and community awareness and adherence to IPC protocols, safe patient and body transport, safe burials, and household and environmental decontamination. The extraordinary conditions on the ground in affected areas of eastern DRC have limited the effectiveness of conventional control measures, however, and are requiring ever-evolving strategies for containment, including aggressive vaccination campaigns (see text box below). Since the WHO declared the outbreak to be a Public Health Emergency of International Concern (PHEIC) in July 2019, it has sought to garner additional donor funds, as well as international support for addressing the political and security issues affecting Ebola control. In July 2019, the WHO and the DRC Ministry of Health (MoH) released a fourth strategic response plan to "definitively defeat" the Ebola epidemic ( Table 1 ). The strategic plan is expected to cost over $462 million, including about $288 million for the public health response portion ( Table 1 ). In July 2019, the World Bank announced that it would provide $300 million toward the plan, about half of which would support the public health response, on top of prior funding commitments (discussed below). The public health portion of the strategic plan, covering July 1 through December 31, 2019, purportedly takes into account lessons learned from the third strategic response plan (February through July 2019). This portion of the plan is based on strengthening political commitment, security, and operational support to improve acceptance of the response and access to insecure areas; deepening support for addressing the varied needs of communities affected by Ebola (beyond a single-minded focus on containment efforts), as a means toward fostering community ownership and involvement in Ebola responses; improving financial planning, monitoring and reporting; and bolstering preparedness of neighboring provinces and countries. The World Bank has urged other countries to provide additional support, and the WHO Director-General has urged donors to address disbursement delays. As of September 11, 2019, the WHO had received less than $60 million of the $288 million it sought for the current phase of the public health response. The United States is the top country donor for the public health response and has provided almost $158 million for the Ebola humanitarian response, largely supporting activities by nongovernmental organizations (NGOs), as discussed below. DRC Government Role DRC government employees and other Congolese nationals are the primary responders to the Ebola epidemic on the ground. As WHO Executive Director for Health Emergencies Dr. Michael Ryan noted in June 2019, "If you go into the treatment facilities now it is Congolese doctors and nurses in the front line. There may be NGO or WHO badges on the tents but the doctors and nurses are Congolese; surveillance officers are Congolese; 80% of the vaccinators in this response are Congolese." The DRC government has provided health workers and administrative personnel, hired local frontline workers, organized volunteers, and conducted information awareness campaigns. The government has also offered certain health services free of charge in selected government health facilities, with donor support (discussed below). From the start of the current outbreak, the DRC government's health responses were coordinated by the MoH, as in past Ebola outbreaks in DRC. In July 2019, however, President Tshisekedi transferred coordination responsibilities to an expert committee headed by the director of DRC's biomedical research institute, Dr. Jean-Jacques Muyembe, who reports directly to the president. Dr. Muyembe is a recognized expert on Ebola who helped investigate the first known outbreak of the disease, in DRC in 1976. Then-Health Minister Dr. Oly Ilunga resigned following Dr. Muyembe's appointment, citing a dilution of his authority as well as confusion about the coordination of DRC government Ebola responses, an insufficient focus on the health system, and opposition to utilizing the Johnson & Johnson experimental vaccine (see text box above). Ilunga was subsequently the target of scathing criticism in the leaked report of a DRC government investigative commission, which indicated, among other things, that Ilunga and his team had displayed an "aggressive and ostentatious attitude" when visiting the outbreak area and had squandered Ebola response funds on fancy cars and hotel rooms. These developments have suggested an internal power struggle over policy and control of funds for Ebola response. U.N. and Other Multilateral Organizations Humanitarian experts, including U.S. officials, have repeatedly asserted that broader humanitarian access and security issues have stymied outbreak control efforts, and that international response efforts require increased coordination and transparency. In response to such concerns, in May 2019 U.N. Secretary-General AntÃ³nio Guterres appointed MONUSCO Deputy Special Representative David Gressly, a U.S. citizen, to serve as a new U.N. Emergency Ebola Response Coordinator charged with establishing a "strengthened coordination and support mechanism" for Ebola response. While the WHO is to continue to lead "all health operations and technical support activities to the government," Gressly is leading a broader U.N.-wide effort to strengthen political engagement, financial tracking, humanitarian coordination, and "preparedness and readiness planning" for Goma and surrounding countries. Gressly, who continues to report to the head of MONUSCO, portrayed his new role as a reflection of the need for "more than just a public health response." The WHO has deployed some 700 personnel to DRC since the current outbreak began. These personnel are coordinating the public health response and providing operational and technical support to DRC government personnel and other actors. Particular areas of focus include detection and rapid isolation of Ebola cases, intensification of rapid multidisciplinary public health actions for Ebola cases, community engagement, and health system strengthening. In addition, the WHO is coordinating regional readiness exercises and assessments in adjacent areas of DRC and neighboring countries. Vaccination and disease surveillance efforts have been bolstered in Uganda, Rwanda, and Burundi. The World Bank has stepped up its role in supporting the Ebola response effort since mid-2019. On July 24, the World Bank Group announced it was mobilizing up to $300 millionâto be financed through the Bank's International Development Association and its Crisis Response Windowâon top of $100 million disbursed previously through the International Development Association and the Bank's Pandemic Emergency Financing Facility (PEF). The PEF announced a further $30 million disbursement for DRC on August 23, 2019. World Bank resources have financed free health care and essential medicines in clinics in all affected areas, hazard pay for frontline health workers, handwashing stations, mobile laboratories, decontamination teams, psychosocial support teams, community engagement campaigns, and vaccination efforts. The injection of new resources aims to build on existing World Bank support to strengthen the DRC health system. The African Union (AU) Africa Centers for Disease Control and Prevention (Africa CDC) has supported international response efforts by deploying members of its voluntary response corps to DRC and neighboring countries. Africa CDC voluntary responders include epidemiologists and anthropologists, as well as communication, laboratory, and logistics experts from various African countries who are "on standby for emergency deployment." To date, these responders have trained local health workers and community volunteers, set up laboratories, supplied personal protective equipment, and trained people in port-of-entry screening. The U.S. Government Response USAID and the U.S. Centers for Disease Control and Prevention (CDC) deployed staff to DRC and the region when the outbreak was first detected in August 2018. The United States is also the top country donor to the Ebola response effort, as noted above. As of September 10, USAID had announced more than $148 million for direct support to the Ebola response within DRC and another $9.8 million to support preparedness and prevention activities in neighboring countries. Those funds were drawn primarily ($156.1 million) from unobligated FY2015 International Disaster Assistance (IDA) funds that Congress appropriated on an emergency basis for Ebola response during the West Africa outbreak ( P.L. 113-235 ). According to USAID, the available balance of FY2015 emergency IDA Ebola funds stood at $105.5 million as of September 9. More broadly, the United States is the top bilateral humanitarian donor to DRC and the top financial contributor to MONUSCO, which is providing logistical and security support to Ebola response efforts. USAID Administrator Green testified before Congress in April 2019 that "there is sufficient money for fighting Ebola in DRC," asserting that nonfinancial challenges posed the primary constraint to containment efforts. U.S. funding commitments have continued to grow since then, however, as the outbreak has persisted and broadened. U.S. personnel are providing technical support from Kinshasa, Goma, and neighboring Rwanda and Uganda, while implementing partners (U.N. agencies and NGOs) are administering Ebola response efforts within the outbreak zone with U.S. resources. The Administration has placed strict constraints on the movement of U.S. personnel to and within affected areas, due to security threats. In September 2018, USAID and CDC withdrew personnel from the immediate outbreak zone due to security concerns, despite CDC's stated preference to maintain staff in the field. U.S. support for outbreak control has included the following: USAID has provided grant funding to NGOs and U.N. entities carrying out Ebola response and preparedness activities, drawing primarily on IDA funds (as noted above). In October 2018, USAID deployed a Disaster Assistance Response Team (DART) to coordinate the U.S. response in support of the DRC government, the WHO, and other partners. USAID Ebola response funds have supported disease surveillance, infection prevention and control, safe and dignified burials, water and sanitation aid, prepositioning of medical supplies, humanitarian coordination, and logistics. U.S. bilateral economic and health aid funding for DRC has also supported programs that may ease humanitarian access or otherwise complement Ebola response activities. CDC personnel have provided direct technical support to the DRC government, the WHO, and USAID's DART for disease surveillance, contact tracing, data management, infection protection and control, risk communication and community engagement, laboratory strengthening, emergency management, and surveillance at points of entry. CDC staff also have supported Ebola preparedness efforts in neighboring countries. The Department of Defense has supplied laboratory training to Ugandan researchers and has partnered with them to conduct clinical Ebola vaccine trials. Challenges Security Threats and Political Tensions Security threats have periodically forced the temporary cessation of Ebola case management in some areas, interrupted contact tracing, and frustrated surveillance efforts in high-transmission areas. Dozens of armed groups are active in the areas most affected by the outbreak. These include an array of local militias, along with the Allied Democratic Forces (ADF), a relatively large and opaque group implicated in attacks on U.N. peacekeepers, local military forces, and civilians. Road travel is often dangerous, with frequent reports of militia attacks, armed robbery, and kidnappings. In April 2019, the Islamic State claimed responsibility for an attack on local soldiers previously attributed to the ADF, the latest in a series of signs of emerging ties between the two. State security force personnel reportedly maintain ties with armed groups and have been implicated in atrocities, including civilian massacres in Beni territory since 2014. Local mistrust of government officials and outsiders (including Congolese who are not from the immediate area)âsometimes rooted in conflict dynamics, ethnic tensions, and political frictionâhas prompted some community resistance to Ebola control efforts and led to attacks on health workers and facilities, including Ebola treatment centers. Some communities in Beni and Butembo have long opposed DRC's central government and complained of neglect and persecution. WHO officials have urged broader international support for "political mediation, engagement with opposition, and negotiated solutions," asserting that "[j]ust purely focusing on community engagement and participation will not fix what are deep seated political issues that need to be addressed at a higher level." Perceptions that outsiders are profiting financially from the outbreak, or that international intervention is driven more by fear of contagion than concern for locals' wellbeing, appear to have fueled conspiracy theories and community resistance. At a July 15 donors event on Ebola response in Geneva, WHO Director-General Dr. Tedros Adhanom Ghabreyesusi said that Congolese in the outbreak zone had asked him, "Are you here to help us, or to prevent this thing from coming to you? Are you doing this for us, or for yourself?" He added, "It embarrasses me.â¦ We should not appear to be seen as if we are parachuting in and out because of Ebola." DRC's then-Health Minister argued in the same meeting that local perceptions that the response was bringing cash into the region had fueled threats to health workers, including kidnappings. Health System Constraints Local perceptions that donors are more concerned with preventing the spread of Ebola to their countries than with helping Congolese communities are rooted, in part, in enduring health challenges. Maternal and infant deaths, for example, have for years regularly exceeded the current count of Ebola deaths but have received comparatively little attention. Authorities have redirected health resources in some areas for Ebola control, deepening local frustrations. Vaccination campaigns have also been interrupted in some Ebola hotspots. In Ituri province, for example, inadequate supply of measles vaccine has limited containment of a measles outbreak that began in January and has infected over 161,000 people, claiming over 3,000 lives. Health workers also are fighting a cholera outbreak that has infected over 15,000 people and killed at least 287. The WHO has reported that Ebola transmission is likely occurring in ill-equipped and understaffed health facilities. Inconsistent adherence to infection prevention and control, periodic disruptions in supply chain systems, and limited access to water for handwashing in some health facilities have complicated Ebola control efforts. In addition, some health workers have refused to wear personal protective equipment in health facilities or perform rudimentary infection prevention and control measures due to threats of violence by some members of the community. As of August 27, 2019, 156 health workers had contracted Ebola, at least 34 of whom had died. The MoH, WHO, and other partners have identified health facilities of concern and are addressing lapses in triage, case detection, and infection prevention and control. Reported Progress Community Engagement. The WHO and implementing partners have worked to deepen local engagement, with some reported positive results. Local Ebola committees in Butembo and Katwa (at the center of the outbreak zone in North Kivu), for example, are chaired and managed by community members who plan Ebola awareness and sensitization campaigns. Improved community engagement has reportedly contributed to increased participation in vaccine campaigns and safe and dignified burial practices. For example, the WHO reported in July 2019 that a high-risk contact in Katwa had sought vaccination and offered to bring other contacts. In an effort to reduce the risk of transmission and broaden access to Ebola treatment and case finding, the WHO also plans to establish smaller patient transit centers closer to communities. Replicating engagement activities in emergent hot spots remains a challenge, however. Ebola Therapeutics Advance. In August 2019, a clinical trial of four investigational Ebola treatments in DRC identified two "strong performers," leading the WHO to state that "these are the only drugs that future patients will be treated with." The trial, launched in late 2018, was co-sponsored by DRC's national biomedical research institute and the U.S. National Institutes of Health, and was carried out by an international research consortium coordinated by the WHO. Issues for Congress U.S. Funding for DRC Ebola Response In FY2015, in the context of the West Africa outbreak, Congress appropriated $5.1 billion for Ebola response and preparedness on an emergency basis, including $1.436 billion in multiyear International Disaster Assistance (IDA) funds (Title IX of Division J, P.L. 113-235 ). U.S. funding for responding to the current outbreak has drawn primarily on the unobligated balance of these IDA funds. According to USAID, $105.5 million of these funds remained available for expenditure as of September 9, 2019. Should the outbreak continue or expand in new ways, Congress may consider what funding mechanisms, if any, the United States might use to support Ebola control. At the same time, the United States remains the lead country donor to the current Ebola response effort. Members may examine the U.S. role, vis-Ã -vis other actors (including other countries, multilateral entities, and private sources), in financing Ebola response activities, and may debate strategies for securing additional contributions from other donors. U.S. Aid Restrictions Related to Trafficking in Persons DRC is ranked as "Tier III" (worst) under the Trafficking Victims Protection Act (TVPA, P.L. 106-386 , as amended), which triggers prohibitions on certain types of U.S. aid absent a full or partial presidential waiver. In FY2019, in a departure from previous practice, President Trump did not partially waive the restrictions for DRC. Thus, pursuant to the TVPA, no "nonhumanitarian, nontrade-related" assistance may be provided "to the government" of DRC. IDA funds, the core source of funding for U.S. Ebola response support to date, are exempt from the TVPA restrictions (22 U.S.C. Â§7102[10]). The TVPA further exempts economic and development assistance "in support of programs of nongovernmental organizations." In practice, the Administration has interpreted the TVPA restrictions to apply broadly to various programs funded through the Development Assistance (DA) and Economic Support Fund (ESF) accounts, including some that would be implemented by NGOs, though it has not publicly provided a full account of affected activities. Some Members of Congress have expressed concern that some U.S. assistance that could help promote humanitarian access in Ebola-affected areas has been held up as a result. Testifying before the Senate in July 2019, a senior USAID official affirmed that some FY2018 aid resources that could help with Ebola control remained restricted in connection with the TVPA, but he and other Administration witnesses did not provide further details. Two bills introduced in the 116 th Congress ( S. 1340 , the Ebola Eradication Act of 2019, and H.R. 3085 , a House companion bill) would authorize assistance for a range of activities that could help lower community resistance or otherwise support Ebola control efforts in DRC and neighboring states, "notwithstanding" the TVPA restrictions. S. 1340 passed the Senate on September 23, 2019. Similar language was included in a draft FY2020 State, Foreign Operations Appropriations bill circulated by the Senate Appropriations Committee on September 18, 2019. That bill would also broadly provide at least $298.3 million in U.S. bilateral assistance for "stabilization, global health, and bilateral economic assistance" to DRCâslightly higher than the U.S. allocation for DRC in recent years, not counting food aidâ"including in areas affected by, and at risk from, the Ebola virus disease." Global Health Security The current Ebola outbreak has prompted resumption of discussions about strengthening health systems worldwide, particularly with regard to pandemic preparedness. In 2014, during the Obama Administration, the United States and the WHO co-launched the Global Health Security Agenda (GHSA) to improve countries' ability to prevent, detect, and respond to infectious disease threats. The United States, the largest donor to this multilateral effort, pledged to support it with $1 billion from FY2015 through FY2019. The Trump Administration has built on these efforts. In May 2019, the White House released the United States Government Global Health Security Strategy , which outlined the U.S. role in extending the Global Health Security Agenda and improving global health security worldwide. Although the Trump Administration, through the strategy and public statements, has supported extending the GHSA through 2024, officials have not provided comprehensive information on what that support would entail. Members of Congress may continue to debate what role, if any, the United States should play in supporting global health system strengthening efforts to bolster global health security, and whether to adjust funding levels to meet ongoing and future infectious disease threats. Through regular appropriations, disease outbreak prevention and global health security efforts are funded through USAID pandemic influenza and CDC global health protection line items ( Table 2 ). On September 19, 2019, the House passed the Continuing Appropriations Act, 2020, and Health Extenders Act of 2019 ( H.R. 4378 ), which would authorize the transfer to the CDC of up to $20 million for Ebola preparedness and response activities from the Infectious Disease Rapid Response Reserve Fund. Other relevant bills introduced in the 116 th Congress include H.R. 2166 , which would codify U.S. engagement in the GHSA as specified in an executive order issued by the Obama Administration, and H.R. 826 , which seeks to facilitate research and treatment of neglected tropical diseases, including Ebola. Summary:	null	96	28,169	28,171	28,171	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction On August 1, 2018 , the World Health Organization (WHO) reported a new Ebola outbreak in eastern DRC, about a week after having declared the end of a separate outbreak in the west of the country. As of September 24, 2019, the WHO had reported 3,175 cases in the current outbreak, including 2,119 deaths. About 58% of all cases have been women and 28% children. The current outbreak is the 10 th on record in DRC, the largest to have occurred in the country, and the second largest ever, after the 2014-2016 Ebola outbreak in West Africa. Cases have been concentrated in North Kivu and Ituri provinces ( Figure 1 ), where long-running conflicts had already caused a protracted humanitarian crisis and are complicating Ebola control efforts. The number of new Ebola cases identified per week has fluctuated since the start of the outbreak ( Figure 2 ), but has generally trended downward slowly since peaking in April 2019. The current outbreak has coincided with a fraught political transition process in DRC. A new president, parliament, provincial-level assemblies, and governors were elected between late 2018 and mid-2019, after years of delays, gridlock, political violence, and repression of opposition voices. Election delays in the Ebola-affected areas, an opposition stronghold, heightened tensions and spurred conspiracy theories, arguably hindering Ebola response. President Felix Tshisekedi, inaugurated in January 2019, was previously an opposition figure, but the coalition of his predecessor Joseph Kabila won supermajorities in parliament and at the provincial level. Observers questioned the legitimacy of the election results, and tense negotiations between the two political blocs (Tshisekedi's and Kabila's) delayed the naming of a new cabinet until late August 2019, while complicating relations between the national and provincial/local officials. Several factors have foiled outbreak control efforts, including low Ebola awareness (early symptoms are similar to other common ailments like malaria), community distrust of health interventions, belated visits to health facilities (at which point survival prospects decline rapidly), and infection prevention control lapses in health facilities. Attacks by militia and criminal groups, political protests, health worker strikes, and security force abuses have also disrupted and impeded the response. In mid-September, for example, violent attacks in a new hotspot (Lwemba, Ituri Province) after the death of a local healthcare worker from Ebola prompted the indefinite suspension of Ebola control activities in the area. As a result, new cases continue to stem from unknown chains of transmission, and deaths continue to occur outside Ebola treatment centers. U.S. officials and other health experts have repeatedly raised concerns about broader challenges in DRC related to its health care system, political tensions, local grievances, and instability. USAID Administrator Mark Green testified to Congress in April 2019 that in DRC, "You have a failed democracy in many, many waysâ¦. It will take more than simply a medical approach. It will take a development approach to try to tackle this terrible disease and to contain its outbreak." After traveling to DRC in August 2019, Administrator Green wrote, "Decades of corrupt, authoritarian rule during which communities were denied any meaningful voice in their government have undermined the Congolese people's trust in institutions." Health experts have been troubled by reports of Ebola cases in major DRC cities (including the capital of North Kivu, Goma) and outside of DRC. Between June and August 2019, a total of four cross-border cases were detected in Uganda. Observers expressed optimism about the rapid detection and containment of these cases, but new concerns have arisen about subsequent suspected cases in Tanzania. In mid-September, WHO was informed by unofficial sources of a number of suspected Ebola cases in that country, including in the capital city of Dar es Salaam, while Tanzanian authorities asserted that there were no confirmed or suspected Ebola cases in the country. WHO has reportedly since sent personal protective equipment (PPE) and vaccination supplies to Tanzania, and recommended that the sickened patients (one of whom reportedly died) receive secondary confirmation testing at a WHO facility. As of September 21, none of the cases had received secondary confirmation. Ebola control in other neighboring countries such as South Sudan, Burundi, or Central Africa Republic, which have minimal state capacity and are affected by protracted conflicts and political crises, could be highly challenging if required. The International Response Outbreak control, treatment, and disease surveillance activities are being carried out primarily by DRC government employees (including health workers and frontline workers, who provide routine and essential services), as well as by international nongovernmental organizations, with U.N. agencies (including the WHO), other multilateral entities (including the World Bank), and foreign governments providing funding, expertise, coordination, and logistical assistance. Classic Ebola outbreak control protocol entails infection prevention control (IPC) in health care facilities; management and isolation of patients in Ebola Treatment Centers (ETCs); fever surveillance with rapid diagnosis; tracing of Ebola cases and their contacts; and community awareness and adherence to IPC protocols, safe patient and body transport, safe burials, and household and environmental decontamination. The extraordinary conditions on the ground in affected areas of eastern DRC have limited the effectiveness of conventional control measures, however, and are requiring ever-evolving strategies for containment, including aggressive vaccination campaigns (see text box below). Since the WHO declared the outbreak to be a Public Health Emergency of International Concern (PHEIC) in July 2019, it has sought to garner additional donor funds, as well as international support for addressing the political and security issues affecting Ebola control. In July 2019, the WHO and the DRC Ministry of Health (MoH) released a fourth strategic response plan to "definitively defeat" the Ebola epidemic ( Table 1 ). The strategic plan is expected to cost over $462 million, including about $288 million for the public health response portion ( Table 1 ). In July 2019, the World Bank announced that it would provide $300 million toward the plan, about half of which would support the public health response, on top of prior funding commitments (discussed below). The public health portion of the strategic plan, covering July 1 through December 31, 2019, purportedly takes into account lessons learned from the third strategic response plan (February through July 2019). This portion of the plan is based on strengthening political commitment, security, and operational support to improve acceptance of the response and access to insecure areas; deepening support for addressing the varied needs of communities affected by Ebola (beyond a single-minded focus on containment efforts), as a means toward fostering community ownership and involvement in Ebola responses; improving financial planning, monitoring and reporting; and bolstering preparedness of neighboring provinces and countries. The World Bank has urged other countries to provide additional support, and the WHO Director-General has urged donors to address disbursement delays. As of September 11, 2019, the WHO had received less than $60 million of the $288 million it sought for the current phase of the public health response. The United States is the top country donor for the public health response and has provided almost $158 million for the Ebola humanitarian response, largely supporting activities by nongovernmental organizations (NGOs), as discussed below. DRC Government Role DRC government employees and other Congolese nationals are the primary responders to the Ebola epidemic on the ground. As WHO Executive Director for Health Emergencies Dr. Michael Ryan noted in June 2019, "If you go into the treatment facilities now it is Congolese doctors and nurses in the front line. There may be NGO or WHO badges on the tents but the doctors and nurses are Congolese; surveillance officers are Congolese; 80% of the vaccinators in this response are Congolese." The DRC government has provided health workers and administrative personnel, hired local frontline workers, organized volunteers, and conducted information awareness campaigns. The government has also offered certain health services free of charge in selected government health facilities, with donor support (discussed below). From the start of the current outbreak, the DRC government's health responses were coordinated by the MoH, as in past Ebola outbreaks in DRC. In July 2019, however, President Tshisekedi transferred coordination responsibilities to an expert committee headed by the director of DRC's biomedical research institute, Dr. Jean-Jacques Muyembe, who reports directly to the president. Dr. Muyembe is a recognized expert on Ebola who helped investigate the first known outbreak of the disease, in DRC in 1976. Then-Health Minister Dr. Oly Ilunga resigned following Dr. Muyembe's appointment, citing a dilution of his authority as well as confusion about the coordination of DRC government Ebola responses, an insufficient focus on the health system, and opposition to utilizing the Johnson & Johnson experimental vaccine (see text box above). Ilunga was subsequently the target of scathing criticism in the leaked report of a DRC government investigative commission, which indicated, among other things, that Ilunga and his team had displayed an "aggressive and ostentatious attitude" when visiting the outbreak area and had squandered Ebola response funds on fancy cars and hotel rooms. These developments have suggested an internal power struggle over policy and control of funds for Ebola response. U.N. and Other Multilateral Organizations Humanitarian experts, including U.S. officials, have repeatedly asserted that broader humanitarian access and security issues have stymied outbreak control efforts, and that international response efforts require increased coordination and transparency. In response to such concerns, in May 2019 U.N. Secretary-General AntÃ³nio Guterres appointed MONUSCO Deputy Special Representative David Gressly, a U.S. citizen, to serve as a new U.N. Emergency Ebola Response Coordinator charged with establishing a "strengthened coordination and support mechanism" for Ebola response. While the WHO is to continue to lead "all health operations and technical support activities to the government," Gressly is leading a broader U.N.-wide effort to strengthen political engagement, financial tracking, humanitarian coordination, and "preparedness and readiness planning" for Goma and surrounding countries. Gressly, who continues to report to the head of MONUSCO, portrayed his new role as a reflection of the need for "more than just a public health response." The WHO has deployed some 700 personnel to DRC since the current outbreak began. These personnel are coordinating the public health response and providing operational and technical support to DRC government personnel and other actors. Particular areas of focus include detection and rapid isolation of Ebola cases, intensification of rapid multidisciplinary public health actions for Ebola cases, community engagement, and health system strengthening. In addition, the WHO is coordinating regional readiness exercises and assessments in adjacent areas of DRC and neighboring countries. Vaccination and disease surveillance efforts have been bolstered in Uganda, Rwanda, and Burundi. The World Bank has stepped up its role in supporting the Ebola response effort since mid-2019. On July 24, the World Bank Group announced it was mobilizing up to $300 millionâto be financed through the Bank's International Development Association and its Crisis Response Windowâon top of $100 million disbursed previously through the International Development Association and the Bank's Pandemic Emergency Financing Facility (PEF). The PEF announced a further $30 million disbursement for DRC on August 23, 2019. World Bank resources have financed free health care and essential medicines in clinics in all affected areas, hazard pay for frontline health workers, handwashing stations, mobile laboratories, decontamination teams, psychosocial support teams, community engagement campaigns, and vaccination efforts. The injection of new resources aims to build on existing World Bank support to strengthen the DRC health system. The African Union (AU) Africa Centers for Disease Control and Prevention (Africa CDC) has supported international response efforts by deploying members of its voluntary response corps to DRC and neighboring countries. Africa CDC voluntary responders include epidemiologists and anthropologists, as well as communication, laboratory, and logistics experts from various African countries who are "on standby for emergency deployment." To date, these responders have trained local health workers and community volunteers, set up laboratories, supplied personal protective equipment, and trained people in port-of-entry screening. The U.S. Government Response USAID and the U.S. Centers for Disease Control and Prevention (CDC) deployed staff to DRC and the region when the outbreak was first detected in August 2018. The United States is also the top country donor to the Ebola response effort, as noted above. As of September 10, USAID had announced more than $148 million for direct support to the Ebola response within DRC and another $9.8 million to support preparedness and prevention activities in neighboring countries. Those funds were drawn primarily ($156.1 million) from unobligated FY2015 International Disaster Assistance (IDA) funds that Congress appropriated on an emergency basis for Ebola response during the West Africa outbreak ( P.L. 113-235 ). According to USAID, the available balance of FY2015 emergency IDA Ebola funds stood at $105.5 million as of September 9. More broadly, the United States is the top bilateral humanitarian donor to DRC and the top financial contributor to MONUSCO, which is providing logistical and security support to Ebola response efforts. USAID Administrator Green testified before Congress in April 2019 that "there is sufficient money for fighting Ebola in DRC," asserting that nonfinancial challenges posed the primary constraint to containment efforts. U.S. funding commitments have continued to grow since then, however, as the outbreak has persisted and broadened. U.S. personnel are providing technical support from Kinshasa, Goma, and neighboring Rwanda and Uganda, while implementing partners (U.N. agencies and NGOs) are administering Ebola response efforts within the outbreak zone with U.S. resources. The Administration has placed strict constraints on the movement of U.S. personnel to and within affected areas, due to security threats. In September 2018, USAID and CDC withdrew personnel from the immediate outbreak zone due to security concerns, despite CDC's stated preference to maintain staff in the field. U.S. support for outbreak control has included the following: USAID has provided grant funding to NGOs and U.N. entities carrying out Ebola response and preparedness activities, drawing primarily on IDA funds (as noted above). In October 2018, USAID deployed a Disaster Assistance Response Team (DART) to coordinate the U.S. response in support of the DRC government, the WHO, and other partners. USAID Ebola response funds have supported disease surveillance, infection prevention and control, safe and dignified burials, water and sanitation aid, prepositioning of medical supplies, humanitarian coordination, and logistics. U.S. bilateral economic and health aid funding for DRC has also supported programs that may ease humanitarian access or otherwise complement Ebola response activities. CDC personnel have provided direct technical support to the DRC government, the WHO, and USAID's DART for disease surveillance, contact tracing, data management, infection protection and control, risk communication and community engagement, laboratory strengthening, emergency management, and surveillance at points of entry. CDC staff also have supported Ebola preparedness efforts in neighboring countries. The Department of Defense has supplied laboratory training to Ugandan researchers and has partnered with them to conduct clinical Ebola vaccine trials. Challenges Security Threats and Political Tensions Security threats have periodically forced the temporary cessation of Ebola case management in some areas, interrupted contact tracing, and frustrated surveillance efforts in high-transmission areas. Dozens of armed groups are active in the areas most affected by the outbreak. These include an array of local militias, along with the Allied Democratic Forces (ADF), a relatively large and opaque group implicated in attacks on U.N. peacekeepers, local military forces, and civilians. Road travel is often dangerous, with frequent reports of militia attacks, armed robbery, and kidnappings. In April 2019, the Islamic State claimed responsibility for an attack on local soldiers previously attributed to the ADF, the latest in a series of signs of emerging ties between the two. State security force personnel reportedly maintain ties with armed groups and have been implicated in atrocities, including civilian massacres in Beni territory since 2014. Local mistrust of government officials and outsiders (including Congolese who are not from the immediate area)âsometimes rooted in conflict dynamics, ethnic tensions, and political frictionâhas prompted some community resistance to Ebola control efforts and led to attacks on health workers and facilities, including Ebola treatment centers. Some communities in Beni and Butembo have long opposed DRC's central government and complained of neglect and persecution. WHO officials have urged broader international support for "political mediation, engagement with opposition, and negotiated solutions," asserting that "[j]ust purely focusing on community engagement and participation will not fix what are deep seated political issues that need to be addressed at a higher level." Perceptions that outsiders are profiting financially from the outbreak, or that international intervention is driven more by fear of contagion than concern for locals' wellbeing, appear to have fueled conspiracy theories and community resistance. At a July 15 donors event on Ebola response in Geneva, WHO Director-General Dr. Tedros Adhanom Ghabreyesusi said that Congolese in the outbreak zone had asked him, "Are you here to help us, or to prevent this thing from coming to you? Are you doing this for us, or for yourself?" He added, "It embarrasses me.â¦ We should not appear to be seen as if we are parachuting in and out because of Ebola." DRC's then-Health Minister argued in the same meeting that local perceptions that the response was bringing cash into the region had fueled threats to health workers, including kidnappings. Health System Constraints Local perceptions that donors are more concerned with preventing the spread of Ebola to their countries than with helping Congolese communities are rooted, in part, in enduring health challenges. Maternal and infant deaths, for example, have for years regularly exceeded the current count of Ebola deaths but have received comparatively little attention. Authorities have redirected health resources in some areas for Ebola control, deepening local frustrations. Vaccination campaigns have also been interrupted in some Ebola hotspots. In Ituri province, for example, inadequate supply of measles vaccine has limited containment of a measles outbreak that began in January and has infected over 161,000 people, claiming over 3,000 lives. Health workers also are fighting a cholera outbreak that has infected over 15,000 people and killed at least 287. The WHO has reported that Ebola transmission is likely occurring in ill-equipped and understaffed health facilities. Inconsistent adherence to infection prevention and control, periodic disruptions in supply chain systems, and limited access to water for handwashing in some health facilities have complicated Ebola control efforts. In addition, some health workers have refused to wear personal protective equipment in health facilities or perform rudimentary infection prevention and control measures due to threats of violence by some members of the community. As of August 27, 2019, 156 health workers had contracted Ebola, at least 34 of whom had died. The MoH, WHO, and other partners have identified health facilities of concern and are addressing lapses in triage, case detection, and infection prevention and control. Reported Progress Community Engagement. The WHO and implementing partners have worked to deepen local engagement, with some reported positive results. Local Ebola committees in Butembo and Katwa (at the center of the outbreak zone in North Kivu), for example, are chaired and managed by community members who plan Ebola awareness and sensitization campaigns. Improved community engagement has reportedly contributed to increased participation in vaccine campaigns and safe and dignified burial practices. For example, the WHO reported in July 2019 that a high-risk contact in Katwa had sought vaccination and offered to bring other contacts. In an effort to reduce the risk of transmission and broaden access to Ebola treatment and case finding, the WHO also plans to establish smaller patient transit centers closer to communities. Replicating engagement activities in emergent hot spots remains a challenge, however. Ebola Therapeutics Advance. In August 2019, a clinical trial of four investigational Ebola treatments in DRC identified two "strong performers," leading the WHO to state that "these are the only drugs that future patients will be treated with." The trial, launched in late 2018, was co-sponsored by DRC's national biomedical research institute and the U.S. National Institutes of Health, and was carried out by an international research consortium coordinated by the WHO. Issues for Congress U.S. Funding for DRC Ebola Response In FY2015, in the context of the West Africa outbreak, Congress appropriated $5.1 billion for Ebola response and preparedness on an emergency basis, including $1.436 billion in multiyear International Disaster Assistance (IDA) funds (Title IX of Division J, P.L. 113-235 ). U.S. funding for responding to the current outbreak has drawn primarily on the unobligated balance of these IDA funds. According to USAID, $105.5 million of these funds remained available for expenditure as of September 9, 2019. Should the outbreak continue or expand in new ways, Congress may consider what funding mechanisms, if any, the United States might use to support Ebola control. At the same time, the United States remains the lead country donor to the current Ebola response effort. Members may examine the U.S. role, vis-Ã -vis other actors (including other countries, multilateral entities, and private sources), in financing Ebola response activities, and may debate strategies for securing additional contributions from other donors. U.S. Aid Restrictions Related to Trafficking in Persons DRC is ranked as "Tier III" (worst) under the Trafficking Victims Protection Act (TVPA, P.L. 106-386 , as amended), which triggers prohibitions on certain types of U.S. aid absent a full or partial presidential waiver. In FY2019, in a departure from previous practice, President Trump did not partially waive the restrictions for DRC. Thus, pursuant to the TVPA, no "nonhumanitarian, nontrade-related" assistance may be provided "to the government" of DRC. IDA funds, the core source of funding for U.S. Ebola response support to date, are exempt from the TVPA restrictions (22 U.S.C. Â§7102[10]). The TVPA further exempts economic and development assistance "in support of programs of nongovernmental organizations." In practice, the Administration has interpreted the TVPA restrictions to apply broadly to various programs funded through the Development Assistance (DA) and Economic Support Fund (ESF) accounts, including some that would be implemented by NGOs, though it has not publicly provided a full account of affected activities. Some Members of Congress have expressed concern that some U.S. assistance that could help promote humanitarian access in Ebola-affected areas has been held up as a result. Testifying before the Senate in July 2019, a senior USAID official affirmed that some FY2018 aid resources that could help with Ebola control remained restricted in connection with the TVPA, but he and other Administration witnesses did not provide further details. Two bills introduced in the 116 th Congress ( S. 1340 , the Ebola Eradication Act of 2019, and H.R. 3085 , a House companion bill) would authorize assistance for a range of activities that could help lower community resistance or otherwise support Ebola control efforts in DRC and neighboring states, "notwithstanding" the TVPA restrictions. S. 1340 passed the Senate on September 23, 2019. Similar language was included in a draft FY2020 State, Foreign Operations Appropriations bill circulated by the Senate Appropriations Committee on September 18, 2019. That bill would also broadly provide at least $298.3 million in U.S. bilateral assistance for "stabilization, global health, and bilateral economic assistance" to DRCâslightly higher than the U.S. allocation for DRC in recent years, not counting food aidâ"including in areas affected by, and at risk from, the Ebola virus disease." Global Health Security The current Ebola outbreak has prompted resumption of discussions about strengthening health systems worldwide, particularly with regard to pandemic preparedness. In 2014, during the Obama Administration, the United States and the WHO co-launched the Global Health Security Agenda (GHSA) to improve countries' ability to prevent, detect, and respond to infectious disease threats. The United States, the largest donor to this multilateral effort, pledged to support it with $1 billion from FY2015 through FY2019. The Trump Administration has built on these efforts. In May 2019, the White House released the United States Government Global Health Security Strategy , which outlined the U.S. role in extending the Global Health Security Agenda and improving global health security worldwide. Although the Trump Administration, through the strategy and public statements, has supported extending the GHSA through 2024, officials have not provided comprehensive information on what that support would entail. Members of Congress may continue to debate what role, if any, the United States should play in supporting global health system strengthening efforts to bolster global health security, and whether to adjust funding levels to meet ongoing and future infectious disease threats. Through regular appropriations, disease outbreak prevention and global health security efforts are funded through USAID pandemic influenza and CDC global health protection line items ( Table 2 ). On September 19, 2019, the House passed the Continuing Appropriations Act, 2020, and Health Extenders Act of 2019 ( H.R. 4378 ), which would authorize the transfer to the CDC of up to $20 million for Ebola preparedness and response activities from the Infectious Disease Rapid Response Reserve Fund. Other relevant bills introduced in the 116 th Congress include H.R. 2166 , which would codify U.S. engagement in the GHSA as specified in an executive order issued by the Obama Administration, and H.R. 826 , which seeks to facilitate research and treatment of neglected tropical diseases, including Ebola.	Summary:	gov_report	1,024	null	2
crs_R45974	crs_R45974_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Status of FY2020 Agriculture Appropriations On December 20, 2019, Congress passed and the President signed into law a full-year FY2020 appropriationâthe Further Consolidated Appropriations Act ( P.L. 116-94 , Committee Print 38-679 )âthat included Agriculture appropriations in Division B ( Table 1 ). During the regular appropriations cycle, the House passed a five-bill minibus appropriation on June 25, 2019 ( H.R. 3055 ), and the Senate passed a four-bill minibus on October 31, 2019 ( H.R. 3055 ). In both cases, Agriculture was in Division B. To develop these bills, the House and Senate Appropriations Committees reported Agriculture subcommittee bills ( H.R. 3164 and S. 2522 , respectively) with their own more detailed reports ( H.Rept. 116-107 and S.Rept. 116-110 , respectively). See Figure 1 for a comparison of timelines and Appendix D for more details. The Administration released its budget request in two parts: an overview on March 11, 2019, and more detailed documents on March 18, 2019. In the absence of an enacted appropriation at the beginning of the fiscal year, FY2020 began with two continuing resolutions (CRs). For overall spending levels, the House set its subcommittee allocations on May 14, 2019 ( H.Rept. 116-59 ). The Senate set its subcommittee allocation on September 12, 2019 ( S.Rept. 116-104 ), after the Bipartisan Budget Act of 2019 ( P.L. 116-37 ) raised caps on discretionary spending. The discretionary total of the FY2020 Agriculture appropriations act is $23.5 billion. This is $183 million more than the comparable amount for FY2019 (+0.8%) that includes the Commodity Futures Trading Commission (CFTC). The appropriation also carries about $129 billion of mandatory spending that is largely determined in authorizing laws ( Table 2 ). Scope of Agriculture Appropriations The Agriculture appropriations billâformally known as the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Actâfunds all of the U.S. Department of Agriculture (USDA), excluding the U.S. Forest Service. It also funds the Food and Drug Administration (FDA) in the Department of Health and Human Services and, in even-numbered fiscal years, CFTC. Jurisdiction is with the House and Senate Committees on Appropriations and their Subcommittees on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies. The bill includes mandatory and discretionary spending, but the discretionary amounts are the primary focus ( Figure 2 ). Some programs are not in the authorizing jurisdiction of the House or Senate Agriculture Committees, such as FDA, Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), or child nutrition (checkered regions in Figure 2 ). The federal budget process treats discretionary and mandatory spending differently: Discretionary spending is controlled by annual appropriations acts and receives most of the attention during the appropriations process. The annual budget resolution process sets spending limits for discretionary appropriations. Agency operations (salaries and expenses) and many grant programs are discretionary. Mandatory spending is carried in the appropriation and usually advanced unchanged, since it is controlled by budget rules during the authorization process. Spending for so-called entitlement programs is determined in laws such as the 2018 farm bill and 2010 child nutrition reauthorizations. In the FY2020 appropriation ( P.L. 116-94 ), the discretionary amount is 15% ($23 billion) of the $153 billion total. Mandatory spending carried in the act comprised $129 billion, about 85% of the total, of which about $106 billion is attributable to programs in the 2018 farm bill. Within the discretionary total, the largest spending items are WIC; agricultural research; rural development; FDA; foreign food aid and trade; farm assistance loans and salaries; food safety inspection; animal and plant health programs; and technical assistance for conservation program. The main mandatory spending items are the Supplemental Nutrition Assistance Program (SNAP) and other food and nutrition act programs, child nutrition (school lunch and related programs), crop insurance, and farm commodity and conservation programs that are funded through USDA's Commodity Credit Corporation (CCC). SNAP is referred to as an "appropriated entitlement" and requires an annual appropriation. Amounts for the nutrition program are based on projected spending needs. In contrast, the CCC appropriations reimburse spending from a line of credit. Recent Trends in Agriculture Appropriations Discretionary Agriculture appropriations were at an all-time high in FY2010, declined through FY2013, and have gradually increased since then. Changes within titles have generally been proportionate to changes in the overall bill, though some areas have sustained relative increases, such as FDA and rural development. The stacked bars in Figure 3 represent the discretionary authorization for each appropriations title. The total of the positive stacked bars is the budget authority in Titles I-VI. In FY2018, USDA reorganization affected the placement of some programs between Titles I and II of the bill (most noticeably, the Farm Service Agency). In most years, the cumulative appropriation for the agencies is higher than the official discretionary total in the spending allocation (the blue line) because of the budgetary offset from negative amounts in Title VII (general provisions) and other negative scorekeeping adjustments. These negative offsets are mostly due to rescissions of prior-year unobligated funds and, before FY2018, limits placed on mandatory programs. Historical trends may be tempered by inflation adjustments, as shown in the dotted line. The inflation-adjusted totals from FY2011-FY2017 had been fairly steady until increases in the FY2018-FY2020 appropriations. Action on FY2020 Appropriations Administration's Budget Request The Trump Administration released a general overview of its FY2020 budget request on March 11, 2019, and a detailed budget proposal to Congress on March 18, 2019. USDA released its more detailed budget summary and justification, as did the FDA, and the independent agencies of the CFTC and the Farm Credit Administration. The Administration also highlighted separately some of its proposed reductions and eliminations. For accounts in the jurisdiction of the Agriculture appropriations bill, the Administration's budget requested $19.2 billion, a $4.1 billion reduction from FY2019 (-18%; Table 2 , Figure 3 ). The Administration released its budget request for FY2020 after Congress had enacted the omnibus FY2019 appropriation in February 2019 ( P.L. 116-6 ). Amounts in the FY2019 column of the Administration's budget documents are based on FY2018 levels, not enacted FY2019 amounts. Discretionary Budget Caps and Subcommittee Allocations Budget enforcement has procedural and statutory elements. The procedural elements relate to a budget resolution and are enforced with points of order. The statutory elements impose discretionary spending limits and are enforced with budget caps and sequestration. Budget Resolution Typically, each chamber's Appropriations Committee receives a top-line limit on discretionary budget authority, referred to as a "302(a)" allocation, from the Budget Committee via an annual budget resolution. The Appropriations Committees then in turn subdivide the allocation among their subcommittees, referred to as the "302(b)" allocations. For FY2020, the House did not report or pass a budget resolution. The Senate Budget Committee reported S.Con.Res. 12 , though it received no further action. Budget Caps The Budget Control Act of 2011 (BCA, P.L. 112-25 ) set discretionary budget caps through FY2021 as a way of reducing federal spending. Sequestration is an across-the-board backstop to achieve budget reductions if spending exceeds the budget caps (2 U.S.C. Â§901(c)). Bipartisan Budget Acts (BBAs) have avoided sequestration on discretionary spendingâwith the exception of FY2013âby raising those caps four times in two-year increments in 2013, 2015, 2018, and 2019 ( Figure 4 ). Most recently, the BBA of 2019 ( P.L. 116-37 ) raised the cap on nondefense discretionary spending by $78 billion for FY2020 (to $621 billion) and by $72 billion for FY2021 (to $627 billion). The amount for FY2020 is 4.1% greater than the nondefense cap in FY2019. The BBA also provides language to execute (or "deem") those higher caps for the appropriations process without a budget resolution. Discretionary Spending Allocations In the absence of a budget resolution and before the BBA that occurred in August, the House Appropriations Committee on May 14, 2019, set an overall discretionary target and provided subcommittee allocations ( H.Rept. 116-59 ). The allocation for Agriculture appropriations was $24.3 billion, $1 billion greater (+4.3%) than the comparable amount for FY2019 ( Table 2 ). The Senate waited for the overall budget agreement in the BBA of 2019 before setting subcommittee allocations or proceeding to mark up appropriations bills. On September 12, 2019, the Senate Appropriations Committee set its subcommittee allocations ( S.Rept. 116-104 ). The subcommittee allocation was $23.1 billion, $0.1 billion greater (+0.3%) than FY2019. Without Congress having agreed on a joint budget resolution, different subcommittee allocations between the chambers further necessitated reconciliation in the final appropriation. Budget Sequestration on Mandatory Spending Despite the BBA agreements that raise discretionary spending caps and avoid sequestration on discretionary accounts, sequestration still impacts mandatory spending through FY2029. Sequestration on mandatory accounts began in FY2013, continues to the present, and has been extended five times beyond the original FY2021 sunset of the BCA. See Appendix C for effects. House Action The House Agriculture Appropriations Subcommittee marked up its FY2020 bill on May 23, 2019, by voice vote. On June 4, 2019, the full Appropriations Committee passed and reported an amended bill ( H.R. 3164 , H.Rept. 116-107 ) by a vote of 29-21. The committee adopted four amendments by voice vote. On June 25, 2019, the House passed a five-bill minibus appropriation ( H.R. 3055 ) with the Agriculture bill as Division B ( Table 1 , Figure 1 ). Under a structured rule, the Rules Committee allowed 35 amendments for floor debate (H.Res. 445, H.Rept. 116-119 ). The House considered 33 of those amendments, of which 31 were adopted and two were rejected. Of the 31 amendments that were adopted, 28 were adopted en bloc by voice vote, two were adopted by recorded votes, and another was adopted separately by voice vote. Of the 31 amendments that were adopted, 14 revised funding amounts with offsets, three added policy statements, and 14 made no substantive changes but were for the purposes of discussion. The $24.3 billion discretionary total in the House-passed FY2020 Agriculture appropriation would have been $1 billion more than (+4%) the comparable amount enacted for FY2019 that includes the CFTC ( Table 2 , Figure 3 ). Generally speaking, the House-passed bill did not include most of the reductions proposed by the Administration. Comparison of Discretionary Authority: House-Passed Bill to FY2019 Table 3 provides details of the House-passed bill at the agency level. The primary changes from FY2019 that comprised the $1 billion increase, ranked by increases and decreases, include the following: Increase Rural Development accounts by $412 million (+14%), including a $144 million increase for the Rural Housing Service (+9%) and a $238 million increase for the Rural Utilities Service (+38%) to support rural water and waste disposal and rural broadband. In addition, the General Provisions title included a $393 million increase for the ReConnect Broadband Pilot Program (+314%). Increase foreign agricultural assistance by $377 million (+19%), including increasing Food for Peace humanitarian assistance by $350 million and McGovern-Dole Food for Education by $25 million. In FY2019, Food for Peace had received a temporary increase of $216 million in the General Provisions title. The larger FY2020 amount would have been to the program's base appropriation rather than the FY2019 approach that used the General Provisions. Increase related agencies appropriations by $232 million, including raising FDA appropriations by $185 million (+6%) and the CFTC by $47 million (+18%). Increase other agricultural program appropriations by $151 million, including the following: Increase departmental administration accounts by a net $205 million (+53%), including funding most of the Administration's request for a $271 million increase for construction to renovate USDA headquarters. Increase USDA regulatory programs by $56 million, including increasing the Animal and Plant Health Inspection Service by $23 million (+2%) and the Agricultural Marketing Service by $33 million (+20%). Decrease agricultural research by a net $134 million (-4%). Agricultural Research Service (ARS) construction would have been reduced by $331 million from FY2019 (-87%), while salaries and expenses would have increased for ARS (+$44 million, +3%) and the National Institute of Food and Agriculture (NIFA) (+$146 million, +10%). Some of these increases would have been offset by a net change of -$175 million in budget authority through the General Provisions title. This was mostly a combination of greater rescissions of carryover balances in WIC (-$300 million) and the absence of continuing the FY2019 appropriations in the General Provisions for Food for Peace (-$216 million, as mentioned above) and rural water and waste disposal (-$75 million). The General Provisions would have provided increases in funding for rural broadband (+$393 million, as mentioned above) and several appropriations for miscellaneous programs (+$33 million). Comparison of Mandatory Spending: House-Passed Bill to FY2019 In addition to discretionary spending, the House-passed bill also carried mandatory spending that totaled $131 billion. This was about $2 billion more than in FY2019 generally because of automatic changes from economic conditions and expectations about enrollment in entitlement programs. Reimbursement for the CCC was projected to increase by $10 billion, mostly due to the cost of the first year of the Trump Administration's trade aid assistance package . Estimates for child nutrition programs would have increased by $0.9 billion. Crop insurance spending would have decreased by $6.4 billion, and SNAP spending decreased by about $2.4 billion. Senate Action The Senate Agriculture Appropriations Subcommittee marked up its FY2020 bill on September 17, 2019. On September 19, 2019, the full Appropriations Committee passed and reported an amended bill ( S. 2522 , S.Rept. 116-110 ) by a vote of 31-0. The committee adopted a manager's amendment with three additions to bill text and 19 additions to report language. On October 31, 2019, the Senate passed a four-bill minibus appropriation ( H.R. 3055 , after adopting S.Amdt. 948 , which was composed of four Senate-reported bills and amended by floor amendments). The Agriculture bill is Division B ( Table 1 , Figure 1 ). The Senate adopted 16 amendments to Division B, of which 14 were adopted en bloc by unanimous consent and two were adopted by recorded votes. Of these 16 amendments, eight revised funding amounts with offsets, three revised funding amounts within an existing appropriation, three changed the terms of an appropriation, and two required reports or studies. The $23.1 billion discretionary total in the Senate-passed FY2020 Agriculture appropriation would have been $57 million more than (+0.2%) the amount enacted for FY2019 ( Table 2 , Figure 3 ). The Senate bill was $894 million less than (-3.7%) the House-passed bill on a comparable basis without CFTC. Generally speaking, the Senate-passed bill did not include most of the reductions proposed by the Administration. Table 3 provides details of the Senate-passed bill at the agency level. Comparison of Discretionary Authority: Senate-Passed to House-Passed Bill Compared to the House-passed bill and ranked by increases and decreases, the primary changes in the Senate-passed bill that comprised the -$894 million difference from the House bill included the following: Agricultural research would have been $193 million greater in the Senate-passed bill than in the House-passed bill. ARS buildings and facilities would have been $255 million greater than in the House-passed bill, ARS salaries and expenses $77 million greater, and NIFA $132 million less. Departmental administration accounts would have been $97 million greater in the Senate bill than in the House bill, mostly by maintaining appropriations for the Chief Information Officer, General Counsel, and Departmental Administration that would have been reduced as offsets to pay for floor amendments that were adopted in the House bill. Rural Development would have been $407 million less in the Senate-passed bill than in the House-passed bill, mostly by a $300 million less for the Rural Utilities Service ($233 million less for rural water and waste disposal grants, $41 million less for distance learning and telemedicine, and $25 million less for existing non-pilot rural broadband programs), $70 million less for Rural Housing Service, and $22 million less for the Rural Business-Cooperative Service. In addition, for the separate ReConnect Broadband Pilot Program, the General Provisions title in the Senate-passed bill would not have provided for any of the $518 million that the House bill contained. Foreign agricultural assistance would have been $159 million less in the Senate bill than in the House bill, mostly by not increasing Food for Peace as much as in the House bill, and maintaining the McGovern-Dole program at a constant level. FDA appropriations would have been $105 million less in the Senate-passed bill than in the House-passed bill. Comparison of Mandatory Spending: Senate-Passed to House-Passed Bill In addition to discretionary spending, the Senate-passed bill also carried mandatory spending that totaled $129 billion. This was $153 million less than in FY2019 and $2.3 billion less than in the House-passed bill. Compared to the House-passed bill, amounts for CCC and crop insurance were the same. Mandatory amounts for the child nutrition programs were about $400 million less than the House bill, and the amount for SNAP was about $1.9 billion less than in the House bill. Continuing Resolutions In the absence of a final Agriculture appropriation at the beginning of FY2020 on October 1, 2019, Congress passed a CR to continue operations and prevent a government shutdown ( P.L. 116-59 , Division A). The first CR lasted nearly eight weeks until November 21, 2019. On November 21, a second CR ( P.L. 116-69 ) was enacted to last until December 20, 2019. On December 20, Congress passed and the President signed a full-year FY2020 appropriation. In general, a CR continues the funding rates and conditions that were in the previous year's appropriation. The Office of Management and Budget (OMB) may prorate funding to the agencies on an annualized basis for the duration of the CR through a process known as apportionment. For the first 52 days (about 14% of FY2020) through November 21, 2019, and the next 29 days (about 8% of FY2020) through December 20, 2019, the CRs continued the terms of the FY2019 Agriculture appropriations act (Â§101) with a proviso for rural development in the anomalies below; and provided sufficient funding to maintain mandatory program levels, including for nutrition programs (Â§111). This is similar to the approach taken in recent years. CRs may adjust prior-year amounts through anomalies or make specific administrative changes. Five anomalies applied specifically to the Agriculture appropriation during the first CR: Rural Water and Waste Disposal Program (Â§101(1)) . Allowed the CR to cover the cost of direct loans in addition to loan guarantees and grants. In FY2019, direct loans did not require appropriation because they had a negative subsidy rate (i.e., fees and repayments more than covered the cost of loan making). In FY2020, OMB estimated a need for a positive subsidy rate. Disaster Assistance for Sugar Beet Processors (Â§116) . Amended the list of eligible losses that may be covered under the Additional Supplemental Appropriations for Disaster Relief Act of FY2019 ( P.L. 116-20 , Title I) to include payments to cooperative processors for reduced sugar beet quantity and quality. The FY2019 supplemental provided $3 billion to cover agricultural production losses in 2018 and 2019 from natural disasters. Agricultural Research (Â§117) . Allowed USDA to waive the nonfederal matching funds requirement for grants made under the Specialty Crop Research Initiative (7 U.S.C. Â§7632(g)(3)). The requirement was added in the 2018 farm bill. Summer Food for Children Demonstration Projects (Â§118) . Allocated funding for the Food and Nutrition Service summer food for children demonstration projects at a rate so that projects could fully operate by May 2020 (prior to summer service, which typically starts in June). Similar provisions have been part of previous CRs. These projects, which include the Summer Electronic Benefit Transfer (EBT) demonstration, have operated in selected states since FY2010. C ommodity C redit C orporation ( Â§119 ) . Allowed CCC to receive its appropriation about a month earlier than usual so that it could reimburse the Treasury for a line of credit prior to a customary final report and audit. Many payments to farmers were due in October 2019, including USDA's plan to make supplemental payments under its trade assistance program. Without the anomaly, CCC might have exhausted its $30 billion line of credit in October or November 2019 before the audit was completed, which could have suspended payments. A similar provision was part of a CR in FY2019. In addition, the FY2020 CR required USDA to submit a report to Congress by October 31, 2019, with various disaggregated details about Market Facilitation Program payments, trade damages, and whether commodities were purchased from foreign-owned companies under the program. Hemp (Â§120) . Provided $16.5 million on an annualized basis to the USDA Agricultural Marketing Service to implement the Hemp Production Program ( P.L. 115-334 , Â§10113), which was created in the 2018 farm bill. The second CR continued the terms of the first CR until December 20, 2019. It added one new anomaly for Agriculture appropriations: Commodity Assistance Program (Â§146). Allowed funding for the Commodity Supplemental Food Program (CSFP) to be apportioned at a rate to maintain current program caseload. This meant that funding available under the second CR could exceed amounts that would otherwise would have been available. FY2020 Further Consolidated Appropriations Act On December 20, 2019, Congress passed and the President signed a full-year FY2020 appropriationâthe Further Consolidated Appropriations Act ( P.L. 116-94 , Committee Print 38-679 ) âthat included Agriculture appropriations in Division B. This was the second of two consolidated appropriations acts that were passed in tandem: P.L. 116-93 , which covered four appropriations subcommittee bills, and P.L. 116-94 , which covered eight appropriations subcommittee bills. The official discretionary total of the FY2020 Agriculture appropriation is $23.5 billion. This is $183 million more than (+0.8%) the comparable amount for FY2019 that includes CFTC. The appropriation also carries about $129 billion of mandatory spending that is largely determined in authorizing laws. Thus the overall total of the agriculture portion is $153 billion. In addition to these amounts, the appropriation includes budget authority that is designated as emergency spending and does not count against discretionary spending caps. These include $535 million to FDA for Ebola prevention and treatment, and $1.5 billion to USDA for the Wildfires and Hurricanes Indemnity Program (WHIP). The latter amount was offset by a $1.5 billion rescission of unobligated WHIP funding from a prior appropriation and emergency designation. Comparison of Discretionary Authority Table 3 provides details of the enacted FY2020 Agriculture appropriation at the agency level, and compared with the House- and Senate-passed bills, the Administration's request, and three prior years. The primary changes from FY2019 that comprised the overall $183 million increase, ranked by increases and decreases, include the following: Increase foreign agricultural assistance by $235 million (+12%), including increasing Food for Peace humanitarian assistance by $225 million and McGovern-Dole Food for Education by $10 million. In FY2017-FY2019, Food for Peace had received temporary increases in the General Provisions title, including $216 million in FY2019. The larger FY2020 amount replaces the temporary amount with an increase in the program's base appropriation. Increase Rural Development accounts by $229 million (+8%), including a $130 million increase for the Rural Utilities Service (+21%) to support rural water and waste disposal and telemedicine and an $81 million increase for the Rural Housing Service (+5%). In addition, the General Provisions title included a $175 million increase for a rural broadband pilot program (+140%). Increase related agencies appropriations by $138 million, including raising FDA appropriations by $91 million (+3%) and the CFTC by $47 million (+18%). Increase other agricultural program appropriations by $199 million, including the following: Increase departmental administration accounts by a net $82 million (+21%), including funding for construction to renovate USDA headquarters. Increase USDA regulatory programs by $59 million, including increasing the Animal and Plant Health Inspection Service by $32 million (+3%) and the Agricultural Marketing Service by $28 million (+17%). Decrease agricultural research by a net $18 million (-0.5%). Agricultural Research Service (ARS) construction is reduced by $189 million compared with FY2019 (-49%), while salaries and expenses are increased for ARS (+$111 million, +9%) and grants for the National Institute of Food and Agriculture (NIFA) (+$56 million, +4%). Increase Farm Service Agency salaries and expenses by $47 million (+3%). Increase Natural Resources Conservation Service appropriations by $35 million, including Watershed and Flood Prevention by $25 million (+17%), and Conservation Operations by $10 million (+1%). Decrease Food and Nutrition Service discretionary appropriations by $54 million, including decreasing WIC by $75 million (-1%) and increasing Commodity Assistance Programs by $22 million (+7%). Some of these increases are offset by a net change of -$570 million in budget authority through the General Provisions title. This was mostly a combination of greater rescissions of carryover balances in WIC (-$500 million) and the absence of continuing the FY2019 appropriations in the General Provisions for Food for Peace (-$216 million, as mentioned above) and rural water and waste disposal grants (-$75 million). The General Provisions provides increases in funding for rural broadband (+$175 million, as mentioned above) and several appropriations for miscellaneous programs (+$63 million over FY2019). Not included above is emergency funding that is not subject to discretionary budget caps. This includes funding for Ebola ($535 million) and the Wildfires and Hurricanes Indemnity Program (WHIP, $1.5 billion). The latter emergency authorization was offset by an identically sized rescission of prior-year emergency funding for WHIP. Comparison of Mandatory Spending In addition to discretionary spending, the House-passed bill also carried mandatory spendingâlargely determined in separate authorizing lawsâthat totals $129 billion. This is about $354 million more than (+0.3%) FY2019, generally due to automatic changes from economic conditions and expectations about enrollment in entitlement programs. Reimbursement to the Treasury for the CCC increased by $10.9 billion (+71%), mostly due to the cost of the Trump Administration's trade aid assistance that was announced in 2018. Child nutrition programs increase by $0.5 billion (+2%). Crop insurance spending decreases by $5.5 billion (-35%), and SNAP spending decreases by about $5.6 billion (-8%). Policy-Related Provisions Besides setting spending authority, appropriations acts are also a vehicle for policy-related provisions that direct executive branch actions. These provisions, limitations, or riders may have the force of law if they are included in the act's text, but their effect is generally limited to the current fiscal year unless they amend the U.S. Code , which is rare in appropriations acts. Table 4 compares some of the primary policy provisions that are included directly in the FY2020 Agriculture appropriations act, and its development in the House and Senate bills. Report language may also provide policy instructions. Although report language does not carry the force of text in an act, it often explains congressional intent, which the agencies may be expected to follow. Statements in the joint explanatory statement and the committee reports are not included in Table 4 . In the past, Congress has said that committee reports and the joint explanatory statement need to be read together to capture all of the congressional intent for a fiscal year. For example, the explanatory statement for the FY2020 Further Consolidated Appropriations act instructs that the House and Senate reports should be read together with the conference agreement: Congressional Directives. The statement is silent on provisions that were in both the House Report ( H.Rept. 116-107 ) and Senate Report ( S.Rept. 116-110 ) that remain unchanged by this agreement, except as noted in this statement. The House and Senate report language that is not changed by the statement is approved and indicates congressional intentions. The statement, while repeating some report language for emphasis, does not intend to negate the language referred to above unless expressly provided herein. Appendix A. Appropriations in Administrative Accounts Appendix B. Appropriations in General Provisions Appendix C. Budget Sequestration Sequestration is a process to reduce federal spending through automatic, largely across-the-board reductions that permanently cancel mandatory and/or discretionary budget authority. Sequestration is triggered as a budget enforcement mechanism when federal spending would exceed statutory budget goals. Sequestration is currently authorized by the BCA ( P.L. 112-25 ). A sequestration rate is the percentage reduction that is subtracted from an appropriated budget authority to achieve an intended budget goal. OMB computes these rates annually. Table C-1 shows the rates of sequestration that have been announced and the total amounts of budget authority that have been cancelled from accounts in Agriculture appropriations. Table C-2 provides additional detail at the program level for mandatory accounts. Discretionary Spending For discretionary spending, sequestration is authorized through FY2021 if discretionary defense and nondefense spending exceed caps that are specified in statute (2 U.S.C. Â§901(c)). In FY2013, the timing of the appropriations acts and the first year of sequestration resulted in triggering sequestration on discretionary spending. In FY2014-FY2019, BBAs in 2013, 2015, and 2018 ( P.L. 113-67 , P.L. 114-74 , and P.L. 115-123 , respectively) have avoided sequestration on discretionary spending. These BBAs raised the discretionary budget caps that were placed in statute by the BCA and allowed Congress to enact larger appropriations than would have been allowed. The enacted appropriations in FY2014-FY2019 met the spending limitations of the revised budget caps, and therefore no sequestration on discretionary accounts was necessary. For FY2020-FY2021, the BBA of 2019 ( P.L. 116-37 ) similarly provides a higher discretionary cap that may avoid sequestration (see " Discretionary Budget Caps and Subcommittee Allocations "). Mandatory Spending Sequestration Occurs and Continues For mandatory spending, sequestration is presently authorized and scheduled to continue through FY2029, having been amended and extended by budget acts that were subsequent to the BCA (2 U.S.C. Â§901a(6)). That is, sequestration of mandatory spending has not been avoided by the BBAs and continues to apply annually to certain accounts ( Table C-2 ). The original FY2021 sunset on the sequestration of mandatory accounts has been extended five times as an offset to pay for raising the caps on discretionary spending to avoid sequestration in the near term (or as a general budgetary offset for other authorization acts): 1. Congress extended the duration of mandatory sequestration by two years (until FY2023) as an offset in BBA 2013. 2. Congress extended it by another year (until FY2024) to maintain retirement benefits for certain military personnel ( P.L. 113-82 ). 3. Congress extended sequestration on nonexempt mandatory accounts another year (until FY2025) as an offset in BBA 2015. 4. Congress extended sequestration on nonexempt mandatory accounts for two years (until FY2027) as an offset in BBA 2018 ( P.L. 115-123 , Â§30101(c)). 5. Congress extended sequestration on nonexempt mandatory accounts by another two years (until FY2029) as an offset in BBA 2019 ( P.L. 116-37 , Â§402). Exemptions from Sequestration Some USDA mandatory programs are statutorily exempt from sequestration. Those expressly exempt by statute are the nutrition programs (SNAP, the child nutrition programs, and the Commodity Supplemental Food Program) and the Conservation Reserve Program. Some prior legal obligations in the Federal Crop Insurance Corporation and the farm commodity programs may be exempt as determined by OMB. Generally speaking, the experience since FY2013 is that OMB has ruled that most of crop insurance is exempt from sequestration, while the farm commodity programs, disaster assistance, and most conservation programs have been subject to it. Implementation of Sequestration Nonexempt mandatory spending in FY2020 is to be reduced by a 5.9% sequestration rate ( Table C-1 ) and thus would be paid at 94.1% of what would otherwise have been provided. This is projected to result in a reduction of about $1.4 billion from mandatory agriculture accounts in FY2020, including over $900 million from amounts paid by the CCC ( Table C-2 ). For example, for the farm commodity programs that support farm income such as the Agricultural Risk Coverage and Price Loss Coverage programs, payments to farmers are computed by a regular formula authorized in the farm bill, and the final actual payment to the farmer is reduced by the sequestration rate. For programs that operate on a fixed budget authority, such as the Environmental Quality Incentives Program and the Market Assistance Program, the sequestration rate is applied to the available budget authority for the fiscal year. Appendix D. Action on Agriculture Appropriations, FY1996-FY2020 Summary:	null	96	35,648	35,650	35,650	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Status of FY2020 Agriculture Appropriations On December 20, 2019, Congress passed and the President signed into law a full-year FY2020 appropriationâthe Further Consolidated Appropriations Act ( P.L. 116-94 , Committee Print 38-679 )âthat included Agriculture appropriations in Division B ( Table 1 ). During the regular appropriations cycle, the House passed a five-bill minibus appropriation on June 25, 2019 ( H.R. 3055 ), and the Senate passed a four-bill minibus on October 31, 2019 ( H.R. 3055 ). In both cases, Agriculture was in Division B. To develop these bills, the House and Senate Appropriations Committees reported Agriculture subcommittee bills ( H.R. 3164 and S. 2522 , respectively) with their own more detailed reports ( H.Rept. 116-107 and S.Rept. 116-110 , respectively). See Figure 1 for a comparison of timelines and Appendix D for more details. The Administration released its budget request in two parts: an overview on March 11, 2019, and more detailed documents on March 18, 2019. In the absence of an enacted appropriation at the beginning of the fiscal year, FY2020 began with two continuing resolutions (CRs). For overall spending levels, the House set its subcommittee allocations on May 14, 2019 ( H.Rept. 116-59 ). The Senate set its subcommittee allocation on September 12, 2019 ( S.Rept. 116-104 ), after the Bipartisan Budget Act of 2019 ( P.L. 116-37 ) raised caps on discretionary spending. The discretionary total of the FY2020 Agriculture appropriations act is $23.5 billion. This is $183 million more than the comparable amount for FY2019 (+0.8%) that includes the Commodity Futures Trading Commission (CFTC). The appropriation also carries about $129 billion of mandatory spending that is largely determined in authorizing laws ( Table 2 ). Scope of Agriculture Appropriations The Agriculture appropriations billâformally known as the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Actâfunds all of the U.S. Department of Agriculture (USDA), excluding the U.S. Forest Service. It also funds the Food and Drug Administration (FDA) in the Department of Health and Human Services and, in even-numbered fiscal years, CFTC. Jurisdiction is with the House and Senate Committees on Appropriations and their Subcommittees on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies. The bill includes mandatory and discretionary spending, but the discretionary amounts are the primary focus ( Figure 2 ). Some programs are not in the authorizing jurisdiction of the House or Senate Agriculture Committees, such as FDA, Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), or child nutrition (checkered regions in Figure 2 ). The federal budget process treats discretionary and mandatory spending differently: Discretionary spending is controlled by annual appropriations acts and receives most of the attention during the appropriations process. The annual budget resolution process sets spending limits for discretionary appropriations. Agency operations (salaries and expenses) and many grant programs are discretionary. Mandatory spending is carried in the appropriation and usually advanced unchanged, since it is controlled by budget rules during the authorization process. Spending for so-called entitlement programs is determined in laws such as the 2018 farm bill and 2010 child nutrition reauthorizations. In the FY2020 appropriation ( P.L. 116-94 ), the discretionary amount is 15% ($23 billion) of the $153 billion total. Mandatory spending carried in the act comprised $129 billion, about 85% of the total, of which about $106 billion is attributable to programs in the 2018 farm bill. Within the discretionary total, the largest spending items are WIC; agricultural research; rural development; FDA; foreign food aid and trade; farm assistance loans and salaries; food safety inspection; animal and plant health programs; and technical assistance for conservation program. The main mandatory spending items are the Supplemental Nutrition Assistance Program (SNAP) and other food and nutrition act programs, child nutrition (school lunch and related programs), crop insurance, and farm commodity and conservation programs that are funded through USDA's Commodity Credit Corporation (CCC). SNAP is referred to as an "appropriated entitlement" and requires an annual appropriation. Amounts for the nutrition program are based on projected spending needs. In contrast, the CCC appropriations reimburse spending from a line of credit. Recent Trends in Agriculture Appropriations Discretionary Agriculture appropriations were at an all-time high in FY2010, declined through FY2013, and have gradually increased since then. Changes within titles have generally been proportionate to changes in the overall bill, though some areas have sustained relative increases, such as FDA and rural development. The stacked bars in Figure 3 represent the discretionary authorization for each appropriations title. The total of the positive stacked bars is the budget authority in Titles I-VI. In FY2018, USDA reorganization affected the placement of some programs between Titles I and II of the bill (most noticeably, the Farm Service Agency). In most years, the cumulative appropriation for the agencies is higher than the official discretionary total in the spending allocation (the blue line) because of the budgetary offset from negative amounts in Title VII (general provisions) and other negative scorekeeping adjustments. These negative offsets are mostly due to rescissions of prior-year unobligated funds and, before FY2018, limits placed on mandatory programs. Historical trends may be tempered by inflation adjustments, as shown in the dotted line. The inflation-adjusted totals from FY2011-FY2017 had been fairly steady until increases in the FY2018-FY2020 appropriations. Action on FY2020 Appropriations Administration's Budget Request The Trump Administration released a general overview of its FY2020 budget request on March 11, 2019, and a detailed budget proposal to Congress on March 18, 2019. USDA released its more detailed budget summary and justification, as did the FDA, and the independent agencies of the CFTC and the Farm Credit Administration. The Administration also highlighted separately some of its proposed reductions and eliminations. For accounts in the jurisdiction of the Agriculture appropriations bill, the Administration's budget requested $19.2 billion, a $4.1 billion reduction from FY2019 (-18%; Table 2 , Figure 3 ). The Administration released its budget request for FY2020 after Congress had enacted the omnibus FY2019 appropriation in February 2019 ( P.L. 116-6 ). Amounts in the FY2019 column of the Administration's budget documents are based on FY2018 levels, not enacted FY2019 amounts. Discretionary Budget Caps and Subcommittee Allocations Budget enforcement has procedural and statutory elements. The procedural elements relate to a budget resolution and are enforced with points of order. The statutory elements impose discretionary spending limits and are enforced with budget caps and sequestration. Budget Resolution Typically, each chamber's Appropriations Committee receives a top-line limit on discretionary budget authority, referred to as a "302(a)" allocation, from the Budget Committee via an annual budget resolution. The Appropriations Committees then in turn subdivide the allocation among their subcommittees, referred to as the "302(b)" allocations. For FY2020, the House did not report or pass a budget resolution. The Senate Budget Committee reported S.Con.Res. 12 , though it received no further action. Budget Caps The Budget Control Act of 2011 (BCA, P.L. 112-25 ) set discretionary budget caps through FY2021 as a way of reducing federal spending. Sequestration is an across-the-board backstop to achieve budget reductions if spending exceeds the budget caps (2 U.S.C. Â§901(c)). Bipartisan Budget Acts (BBAs) have avoided sequestration on discretionary spendingâwith the exception of FY2013âby raising those caps four times in two-year increments in 2013, 2015, 2018, and 2019 ( Figure 4 ). Most recently, the BBA of 2019 ( P.L. 116-37 ) raised the cap on nondefense discretionary spending by $78 billion for FY2020 (to $621 billion) and by $72 billion for FY2021 (to $627 billion). The amount for FY2020 is 4.1% greater than the nondefense cap in FY2019. The BBA also provides language to execute (or "deem") those higher caps for the appropriations process without a budget resolution. Discretionary Spending Allocations In the absence of a budget resolution and before the BBA that occurred in August, the House Appropriations Committee on May 14, 2019, set an overall discretionary target and provided subcommittee allocations ( H.Rept. 116-59 ). The allocation for Agriculture appropriations was $24.3 billion, $1 billion greater (+4.3%) than the comparable amount for FY2019 ( Table 2 ). The Senate waited for the overall budget agreement in the BBA of 2019 before setting subcommittee allocations or proceeding to mark up appropriations bills. On September 12, 2019, the Senate Appropriations Committee set its subcommittee allocations ( S.Rept. 116-104 ). The subcommittee allocation was $23.1 billion, $0.1 billion greater (+0.3%) than FY2019. Without Congress having agreed on a joint budget resolution, different subcommittee allocations between the chambers further necessitated reconciliation in the final appropriation. Budget Sequestration on Mandatory Spending Despite the BBA agreements that raise discretionary spending caps and avoid sequestration on discretionary accounts, sequestration still impacts mandatory spending through FY2029. Sequestration on mandatory accounts began in FY2013, continues to the present, and has been extended five times beyond the original FY2021 sunset of the BCA. See Appendix C for effects. House Action The House Agriculture Appropriations Subcommittee marked up its FY2020 bill on May 23, 2019, by voice vote. On June 4, 2019, the full Appropriations Committee passed and reported an amended bill ( H.R. 3164 , H.Rept. 116-107 ) by a vote of 29-21. The committee adopted four amendments by voice vote. On June 25, 2019, the House passed a five-bill minibus appropriation ( H.R. 3055 ) with the Agriculture bill as Division B ( Table 1 , Figure 1 ). Under a structured rule, the Rules Committee allowed 35 amendments for floor debate (H.Res. 445, H.Rept. 116-119 ). The House considered 33 of those amendments, of which 31 were adopted and two were rejected. Of the 31 amendments that were adopted, 28 were adopted en bloc by voice vote, two were adopted by recorded votes, and another was adopted separately by voice vote. Of the 31 amendments that were adopted, 14 revised funding amounts with offsets, three added policy statements, and 14 made no substantive changes but were for the purposes of discussion. The $24.3 billion discretionary total in the House-passed FY2020 Agriculture appropriation would have been $1 billion more than (+4%) the comparable amount enacted for FY2019 that includes the CFTC ( Table 2 , Figure 3 ). Generally speaking, the House-passed bill did not include most of the reductions proposed by the Administration. Comparison of Discretionary Authority: House-Passed Bill to FY2019 Table 3 provides details of the House-passed bill at the agency level. The primary changes from FY2019 that comprised the $1 billion increase, ranked by increases and decreases, include the following: Increase Rural Development accounts by $412 million (+14%), including a $144 million increase for the Rural Housing Service (+9%) and a $238 million increase for the Rural Utilities Service (+38%) to support rural water and waste disposal and rural broadband. In addition, the General Provisions title included a $393 million increase for the ReConnect Broadband Pilot Program (+314%). Increase foreign agricultural assistance by $377 million (+19%), including increasing Food for Peace humanitarian assistance by $350 million and McGovern-Dole Food for Education by $25 million. In FY2019, Food for Peace had received a temporary increase of $216 million in the General Provisions title. The larger FY2020 amount would have been to the program's base appropriation rather than the FY2019 approach that used the General Provisions. Increase related agencies appropriations by $232 million, including raising FDA appropriations by $185 million (+6%) and the CFTC by $47 million (+18%). Increase other agricultural program appropriations by $151 million, including the following: Increase departmental administration accounts by a net $205 million (+53%), including funding most of the Administration's request for a $271 million increase for construction to renovate USDA headquarters. Increase USDA regulatory programs by $56 million, including increasing the Animal and Plant Health Inspection Service by $23 million (+2%) and the Agricultural Marketing Service by $33 million (+20%). Decrease agricultural research by a net $134 million (-4%). Agricultural Research Service (ARS) construction would have been reduced by $331 million from FY2019 (-87%), while salaries and expenses would have increased for ARS (+$44 million, +3%) and the National Institute of Food and Agriculture (NIFA) (+$146 million, +10%). Some of these increases would have been offset by a net change of -$175 million in budget authority through the General Provisions title. This was mostly a combination of greater rescissions of carryover balances in WIC (-$300 million) and the absence of continuing the FY2019 appropriations in the General Provisions for Food for Peace (-$216 million, as mentioned above) and rural water and waste disposal (-$75 million). The General Provisions would have provided increases in funding for rural broadband (+$393 million, as mentioned above) and several appropriations for miscellaneous programs (+$33 million). Comparison of Mandatory Spending: House-Passed Bill to FY2019 In addition to discretionary spending, the House-passed bill also carried mandatory spending that totaled $131 billion. This was about $2 billion more than in FY2019 generally because of automatic changes from economic conditions and expectations about enrollment in entitlement programs. Reimbursement for the CCC was projected to increase by $10 billion, mostly due to the cost of the first year of the Trump Administration's trade aid assistance package . Estimates for child nutrition programs would have increased by $0.9 billion. Crop insurance spending would have decreased by $6.4 billion, and SNAP spending decreased by about $2.4 billion. Senate Action The Senate Agriculture Appropriations Subcommittee marked up its FY2020 bill on September 17, 2019. On September 19, 2019, the full Appropriations Committee passed and reported an amended bill ( S. 2522 , S.Rept. 116-110 ) by a vote of 31-0. The committee adopted a manager's amendment with three additions to bill text and 19 additions to report language. On October 31, 2019, the Senate passed a four-bill minibus appropriation ( H.R. 3055 , after adopting S.Amdt. 948 , which was composed of four Senate-reported bills and amended by floor amendments). The Agriculture bill is Division B ( Table 1 , Figure 1 ). The Senate adopted 16 amendments to Division B, of which 14 were adopted en bloc by unanimous consent and two were adopted by recorded votes. Of these 16 amendments, eight revised funding amounts with offsets, three revised funding amounts within an existing appropriation, three changed the terms of an appropriation, and two required reports or studies. The $23.1 billion discretionary total in the Senate-passed FY2020 Agriculture appropriation would have been $57 million more than (+0.2%) the amount enacted for FY2019 ( Table 2 , Figure 3 ). The Senate bill was $894 million less than (-3.7%) the House-passed bill on a comparable basis without CFTC. Generally speaking, the Senate-passed bill did not include most of the reductions proposed by the Administration. Table 3 provides details of the Senate-passed bill at the agency level. Comparison of Discretionary Authority: Senate-Passed to House-Passed Bill Compared to the House-passed bill and ranked by increases and decreases, the primary changes in the Senate-passed bill that comprised the -$894 million difference from the House bill included the following: Agricultural research would have been $193 million greater in the Senate-passed bill than in the House-passed bill. ARS buildings and facilities would have been $255 million greater than in the House-passed bill, ARS salaries and expenses $77 million greater, and NIFA $132 million less. Departmental administration accounts would have been $97 million greater in the Senate bill than in the House bill, mostly by maintaining appropriations for the Chief Information Officer, General Counsel, and Departmental Administration that would have been reduced as offsets to pay for floor amendments that were adopted in the House bill. Rural Development would have been $407 million less in the Senate-passed bill than in the House-passed bill, mostly by a $300 million less for the Rural Utilities Service ($233 million less for rural water and waste disposal grants, $41 million less for distance learning and telemedicine, and $25 million less for existing non-pilot rural broadband programs), $70 million less for Rural Housing Service, and $22 million less for the Rural Business-Cooperative Service. In addition, for the separate ReConnect Broadband Pilot Program, the General Provisions title in the Senate-passed bill would not have provided for any of the $518 million that the House bill contained. Foreign agricultural assistance would have been $159 million less in the Senate bill than in the House bill, mostly by not increasing Food for Peace as much as in the House bill, and maintaining the McGovern-Dole program at a constant level. FDA appropriations would have been $105 million less in the Senate-passed bill than in the House-passed bill. Comparison of Mandatory Spending: Senate-Passed to House-Passed Bill In addition to discretionary spending, the Senate-passed bill also carried mandatory spending that totaled $129 billion. This was $153 million less than in FY2019 and $2.3 billion less than in the House-passed bill. Compared to the House-passed bill, amounts for CCC and crop insurance were the same. Mandatory amounts for the child nutrition programs were about $400 million less than the House bill, and the amount for SNAP was about $1.9 billion less than in the House bill. Continuing Resolutions In the absence of a final Agriculture appropriation at the beginning of FY2020 on October 1, 2019, Congress passed a CR to continue operations and prevent a government shutdown ( P.L. 116-59 , Division A). The first CR lasted nearly eight weeks until November 21, 2019. On November 21, a second CR ( P.L. 116-69 ) was enacted to last until December 20, 2019. On December 20, Congress passed and the President signed a full-year FY2020 appropriation. In general, a CR continues the funding rates and conditions that were in the previous year's appropriation. The Office of Management and Budget (OMB) may prorate funding to the agencies on an annualized basis for the duration of the CR through a process known as apportionment. For the first 52 days (about 14% of FY2020) through November 21, 2019, and the next 29 days (about 8% of FY2020) through December 20, 2019, the CRs continued the terms of the FY2019 Agriculture appropriations act (Â§101) with a proviso for rural development in the anomalies below; and provided sufficient funding to maintain mandatory program levels, including for nutrition programs (Â§111). This is similar to the approach taken in recent years. CRs may adjust prior-year amounts through anomalies or make specific administrative changes. Five anomalies applied specifically to the Agriculture appropriation during the first CR: Rural Water and Waste Disposal Program (Â§101(1)) . Allowed the CR to cover the cost of direct loans in addition to loan guarantees and grants. In FY2019, direct loans did not require appropriation because they had a negative subsidy rate (i.e., fees and repayments more than covered the cost of loan making). In FY2020, OMB estimated a need for a positive subsidy rate. Disaster Assistance for Sugar Beet Processors (Â§116) . Amended the list of eligible losses that may be covered under the Additional Supplemental Appropriations for Disaster Relief Act of FY2019 ( P.L. 116-20 , Title I) to include payments to cooperative processors for reduced sugar beet quantity and quality. The FY2019 supplemental provided $3 billion to cover agricultural production losses in 2018 and 2019 from natural disasters. Agricultural Research (Â§117) . Allowed USDA to waive the nonfederal matching funds requirement for grants made under the Specialty Crop Research Initiative (7 U.S.C. Â§7632(g)(3)). The requirement was added in the 2018 farm bill. Summer Food for Children Demonstration Projects (Â§118) . Allocated funding for the Food and Nutrition Service summer food for children demonstration projects at a rate so that projects could fully operate by May 2020 (prior to summer service, which typically starts in June). Similar provisions have been part of previous CRs. These projects, which include the Summer Electronic Benefit Transfer (EBT) demonstration, have operated in selected states since FY2010. C ommodity C redit C orporation ( Â§119 ) . Allowed CCC to receive its appropriation about a month earlier than usual so that it could reimburse the Treasury for a line of credit prior to a customary final report and audit. Many payments to farmers were due in October 2019, including USDA's plan to make supplemental payments under its trade assistance program. Without the anomaly, CCC might have exhausted its $30 billion line of credit in October or November 2019 before the audit was completed, which could have suspended payments. A similar provision was part of a CR in FY2019. In addition, the FY2020 CR required USDA to submit a report to Congress by October 31, 2019, with various disaggregated details about Market Facilitation Program payments, trade damages, and whether commodities were purchased from foreign-owned companies under the program. Hemp (Â§120) . Provided $16.5 million on an annualized basis to the USDA Agricultural Marketing Service to implement the Hemp Production Program ( P.L. 115-334 , Â§10113), which was created in the 2018 farm bill. The second CR continued the terms of the first CR until December 20, 2019. It added one new anomaly for Agriculture appropriations: Commodity Assistance Program (Â§146). Allowed funding for the Commodity Supplemental Food Program (CSFP) to be apportioned at a rate to maintain current program caseload. This meant that funding available under the second CR could exceed amounts that would otherwise would have been available. FY2020 Further Consolidated Appropriations Act On December 20, 2019, Congress passed and the President signed a full-year FY2020 appropriationâthe Further Consolidated Appropriations Act ( P.L. 116-94 , Committee Print 38-679 ) âthat included Agriculture appropriations in Division B. This was the second of two consolidated appropriations acts that were passed in tandem: P.L. 116-93 , which covered four appropriations subcommittee bills, and P.L. 116-94 , which covered eight appropriations subcommittee bills. The official discretionary total of the FY2020 Agriculture appropriation is $23.5 billion. This is $183 million more than (+0.8%) the comparable amount for FY2019 that includes CFTC. The appropriation also carries about $129 billion of mandatory spending that is largely determined in authorizing laws. Thus the overall total of the agriculture portion is $153 billion. In addition to these amounts, the appropriation includes budget authority that is designated as emergency spending and does not count against discretionary spending caps. These include $535 million to FDA for Ebola prevention and treatment, and $1.5 billion to USDA for the Wildfires and Hurricanes Indemnity Program (WHIP). The latter amount was offset by a $1.5 billion rescission of unobligated WHIP funding from a prior appropriation and emergency designation. Comparison of Discretionary Authority Table 3 provides details of the enacted FY2020 Agriculture appropriation at the agency level, and compared with the House- and Senate-passed bills, the Administration's request, and three prior years. The primary changes from FY2019 that comprised the overall $183 million increase, ranked by increases and decreases, include the following: Increase foreign agricultural assistance by $235 million (+12%), including increasing Food for Peace humanitarian assistance by $225 million and McGovern-Dole Food for Education by $10 million. In FY2017-FY2019, Food for Peace had received temporary increases in the General Provisions title, including $216 million in FY2019. The larger FY2020 amount replaces the temporary amount with an increase in the program's base appropriation. Increase Rural Development accounts by $229 million (+8%), including a $130 million increase for the Rural Utilities Service (+21%) to support rural water and waste disposal and telemedicine and an $81 million increase for the Rural Housing Service (+5%). In addition, the General Provisions title included a $175 million increase for a rural broadband pilot program (+140%). Increase related agencies appropriations by $138 million, including raising FDA appropriations by $91 million (+3%) and the CFTC by $47 million (+18%). Increase other agricultural program appropriations by $199 million, including the following: Increase departmental administration accounts by a net $82 million (+21%), including funding for construction to renovate USDA headquarters. Increase USDA regulatory programs by $59 million, including increasing the Animal and Plant Health Inspection Service by $32 million (+3%) and the Agricultural Marketing Service by $28 million (+17%). Decrease agricultural research by a net $18 million (-0.5%). Agricultural Research Service (ARS) construction is reduced by $189 million compared with FY2019 (-49%), while salaries and expenses are increased for ARS (+$111 million, +9%) and grants for the National Institute of Food and Agriculture (NIFA) (+$56 million, +4%). Increase Farm Service Agency salaries and expenses by $47 million (+3%). Increase Natural Resources Conservation Service appropriations by $35 million, including Watershed and Flood Prevention by $25 million (+17%), and Conservation Operations by $10 million (+1%). Decrease Food and Nutrition Service discretionary appropriations by $54 million, including decreasing WIC by $75 million (-1%) and increasing Commodity Assistance Programs by $22 million (+7%). Some of these increases are offset by a net change of -$570 million in budget authority through the General Provisions title. This was mostly a combination of greater rescissions of carryover balances in WIC (-$500 million) and the absence of continuing the FY2019 appropriations in the General Provisions for Food for Peace (-$216 million, as mentioned above) and rural water and waste disposal grants (-$75 million). The General Provisions provides increases in funding for rural broadband (+$175 million, as mentioned above) and several appropriations for miscellaneous programs (+$63 million over FY2019). Not included above is emergency funding that is not subject to discretionary budget caps. This includes funding for Ebola ($535 million) and the Wildfires and Hurricanes Indemnity Program (WHIP, $1.5 billion). The latter emergency authorization was offset by an identically sized rescission of prior-year emergency funding for WHIP. Comparison of Mandatory Spending In addition to discretionary spending, the House-passed bill also carried mandatory spendingâlargely determined in separate authorizing lawsâthat totals $129 billion. This is about $354 million more than (+0.3%) FY2019, generally due to automatic changes from economic conditions and expectations about enrollment in entitlement programs. Reimbursement to the Treasury for the CCC increased by $10.9 billion (+71%), mostly due to the cost of the Trump Administration's trade aid assistance that was announced in 2018. Child nutrition programs increase by $0.5 billion (+2%). Crop insurance spending decreases by $5.5 billion (-35%), and SNAP spending decreases by about $5.6 billion (-8%). Policy-Related Provisions Besides setting spending authority, appropriations acts are also a vehicle for policy-related provisions that direct executive branch actions. These provisions, limitations, or riders may have the force of law if they are included in the act's text, but their effect is generally limited to the current fiscal year unless they amend the U.S. Code , which is rare in appropriations acts. Table 4 compares some of the primary policy provisions that are included directly in the FY2020 Agriculture appropriations act, and its development in the House and Senate bills. Report language may also provide policy instructions. Although report language does not carry the force of text in an act, it often explains congressional intent, which the agencies may be expected to follow. Statements in the joint explanatory statement and the committee reports are not included in Table 4 . In the past, Congress has said that committee reports and the joint explanatory statement need to be read together to capture all of the congressional intent for a fiscal year. For example, the explanatory statement for the FY2020 Further Consolidated Appropriations act instructs that the House and Senate reports should be read together with the conference agreement: Congressional Directives. The statement is silent on provisions that were in both the House Report ( H.Rept. 116-107 ) and Senate Report ( S.Rept. 116-110 ) that remain unchanged by this agreement, except as noted in this statement. The House and Senate report language that is not changed by the statement is approved and indicates congressional intentions. The statement, while repeating some report language for emphasis, does not intend to negate the language referred to above unless expressly provided herein. Appendix A. Appropriations in Administrative Accounts Appendix B. Appropriations in General Provisions Appendix C. Budget Sequestration Sequestration is a process to reduce federal spending through automatic, largely across-the-board reductions that permanently cancel mandatory and/or discretionary budget authority. Sequestration is triggered as a budget enforcement mechanism when federal spending would exceed statutory budget goals. Sequestration is currently authorized by the BCA ( P.L. 112-25 ). A sequestration rate is the percentage reduction that is subtracted from an appropriated budget authority to achieve an intended budget goal. OMB computes these rates annually. Table C-1 shows the rates of sequestration that have been announced and the total amounts of budget authority that have been cancelled from accounts in Agriculture appropriations. Table C-2 provides additional detail at the program level for mandatory accounts. Discretionary Spending For discretionary spending, sequestration is authorized through FY2021 if discretionary defense and nondefense spending exceed caps that are specified in statute (2 U.S.C. Â§901(c)). In FY2013, the timing of the appropriations acts and the first year of sequestration resulted in triggering sequestration on discretionary spending. In FY2014-FY2019, BBAs in 2013, 2015, and 2018 ( P.L. 113-67 , P.L. 114-74 , and P.L. 115-123 , respectively) have avoided sequestration on discretionary spending. These BBAs raised the discretionary budget caps that were placed in statute by the BCA and allowed Congress to enact larger appropriations than would have been allowed. The enacted appropriations in FY2014-FY2019 met the spending limitations of the revised budget caps, and therefore no sequestration on discretionary accounts was necessary. For FY2020-FY2021, the BBA of 2019 ( P.L. 116-37 ) similarly provides a higher discretionary cap that may avoid sequestration (see " Discretionary Budget Caps and Subcommittee Allocations "). Mandatory Spending Sequestration Occurs and Continues For mandatory spending, sequestration is presently authorized and scheduled to continue through FY2029, having been amended and extended by budget acts that were subsequent to the BCA (2 U.S.C. Â§901a(6)). That is, sequestration of mandatory spending has not been avoided by the BBAs and continues to apply annually to certain accounts ( Table C-2 ). The original FY2021 sunset on the sequestration of mandatory accounts has been extended five times as an offset to pay for raising the caps on discretionary spending to avoid sequestration in the near term (or as a general budgetary offset for other authorization acts): 1. Congress extended the duration of mandatory sequestration by two years (until FY2023) as an offset in BBA 2013. 2. Congress extended it by another year (until FY2024) to maintain retirement benefits for certain military personnel ( P.L. 113-82 ). 3. Congress extended sequestration on nonexempt mandatory accounts another year (until FY2025) as an offset in BBA 2015. 4. Congress extended sequestration on nonexempt mandatory accounts for two years (until FY2027) as an offset in BBA 2018 ( P.L. 115-123 , Â§30101(c)). 5. Congress extended sequestration on nonexempt mandatory accounts by another two years (until FY2029) as an offset in BBA 2019 ( P.L. 116-37 , Â§402). Exemptions from Sequestration Some USDA mandatory programs are statutorily exempt from sequestration. Those expressly exempt by statute are the nutrition programs (SNAP, the child nutrition programs, and the Commodity Supplemental Food Program) and the Conservation Reserve Program. Some prior legal obligations in the Federal Crop Insurance Corporation and the farm commodity programs may be exempt as determined by OMB. Generally speaking, the experience since FY2013 is that OMB has ruled that most of crop insurance is exempt from sequestration, while the farm commodity programs, disaster assistance, and most conservation programs have been subject to it. Implementation of Sequestration Nonexempt mandatory spending in FY2020 is to be reduced by a 5.9% sequestration rate ( Table C-1 ) and thus would be paid at 94.1% of what would otherwise have been provided. This is projected to result in a reduction of about $1.4 billion from mandatory agriculture accounts in FY2020, including over $900 million from amounts paid by the CCC ( Table C-2 ). For example, for the farm commodity programs that support farm income such as the Agricultural Risk Coverage and Price Loss Coverage programs, payments to farmers are computed by a regular formula authorized in the farm bill, and the final actual payment to the farmer is reduced by the sequestration rate. For programs that operate on a fixed budget authority, such as the Environmental Quality Incentives Program and the Market Assistance Program, the sequestration rate is applied to the available budget authority for the fiscal year. Appendix D. Action on Agriculture Appropriations, FY1996-FY2020	Summary:	gov_report	1,024	null	3
crs_R46317	crs_R46317_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The President is responsible for appointing individuals to certain positions in the federal government. In some instances, the President makes these appointments using authorities granted to the President alone. Other appointments, generally referred to with the abbreviation PAS, are made by the President with the advice and consent of the Senate via the nomination and confirmation process. This report identifies, for the 115 th Congress, all nominations submitted to the Senate for full-time positions on 34 regulatory and other collegial boards and commissions. This report includes profiles on the leadership structures of each of these 34 boards and commissions as well as a pair of tables presenting information on each body's membership and appointment activity as of the end of the 115 th Congress. The profiles discuss the statutory requirements for the appointed positions, including the number of members on each board or commission, their terms of office, whether they may continue in their positions after their terms expire, whether political balance is required, and the method for selecting the chair. The first table in each pair provides information on full-time positions requiring Senate confirmation as of the end of the 115 th Congress. The second table tracks appointment activity for each board or commission within the 115 th Congress by the Senate (confirmations, rejections, returns to the President, and elapsed time between nomination and confirmation), as well as further related presidential activity (including withdrawals and recess appointments). In some instances, no appointment action occurred within a board or commission during the 115 th Congress. Information for this report was compiled using the Senate nominations database at https://www.congress.gov/ (users can click the "nominations" tab on the left-hand side of the page to search the database), the Congressional Record (daily edition), the Weekly Compilation of Presidential Documents , telephone discussions with agency officials, agency websites, the United States Code , and the 2016 Plum Book ( United States Government Policy and Supporting Positions ). Congressional Research Service (CRS) reports regarding the presidential appointments process, nomination activity for other executive branch positions, recess appointments, and other related matters are available to congressional clients at http://www.crs.gov . Characteristics of Regulatory and Other Collegial Bodies Common Features Federal executive branch boards and commissions discussed in this report share, among other characteristics, the following: (1) they are independent executive branch bodies located, with four exceptions, outside executive departments; (2) several board or commission members head each entity, and at least one of these members serves full time; (3) the members are appointed by the President with the advice and consent of the Senate; and (4) the members serve fixed terms of office and, except in a few bodies, the President's power to remove them is restricted. Terms of Office For most of the boards and commissions included in this report, the fixed terms of office for member positions have set beginning and end dates, irrespective of whether the posts are filled or when appointments are made. In contrast, for a few agencies, such as the Chemical Safety and Hazard Investigation Board, the full term begins when an appointee takes office and expires after the incumbent has held the post for the requisite period of time. The end dates of the fixed terms of a board's members are staggered, so that the terms do not expire all at once. The use of terms with fixed beginning and end dates is intended to minimize the occurrence of simultaneous board member departures and thereby increase leadership continuity. Under such an arrangement, an individual is nominated to a particular position and a particular term of office. An individual may be nominated and confirmed for a position for the remainder of an unexpired term to replace an appointee who has resigned (or died). Alternatively, an individual might be nominated for an upcoming term with the expectation that the new term will be under way by the time of confirmation. Occasionally, when the unexpired term has been for a relatively short period, the President has submitted two nominations of the same person simultaneouslyâthe first to complete the unexpired term and the second to complete the entire succeeding term of office. Appointment of Chairs and Political Independence On some commissions, the chair is subject to Senate confirmation and must be appointed from among the incumbent commissioners. If the President wishes to appoint, as chair, someone who is not on the commission, the President simultaneously submits two nominations for the nomineeâone for member and the other for chair. As independent entities with staggered membership, executive branch boards and commissions have more political independence from the President than do executive departments. Nonetheless, the President can sometimes exercise significant influence over the composition of a board or commission's membership when he designates the chair or has the opportunity to fill a number of vacancies at once. For example, President George W. Bush had the chance to shape the Securities and Exchange Commission (SEC) during the first two years of his presidency because of existing vacancies, resignations, and a member's death. Likewise, during the same time period, President Bush was able to submit nominations for all of the positions on the National Labor Relations Board because of existing vacancies, expiring recess appointments, and resignations. Simultaneous turnover of board or commission membership may result from coincidence, but it also may be the result of a buildup of vacancies after extended periods of time in which the President does not nominate, or the Senate does not confirm, members. Political Affiliations and Inspectors General Two other notable characteristics apply to appointments to some of the boards and commissions. First, for 26 of the 34 bodies discussed in this report, the law limits the number of appointed members who may belong to the same political party, usually to no more than a bare majority of the appointed members (e.g., two of three or three of five). Second, advice and consent requirements also apply to inspector general appointments in four of these organizations and general counsel appointments in three. Appointments During the 115th Congress During the 115 th Congress, President Donald Trump submitted nominations to the Senate for 112 of the 151 full-time positions on 34 regulatory and other boards and commissions. In attempting to fill these 112 positions, he submitted a total of 140 nominations, of which 75 were confirmed, 12 were withdrawn, and 53 were returned to the President. No recess appointments were made. Table 1 summarizes the appointment activity for the 115 th Congress. At the end of the Congress, 22 incumbents were serving past the expiration of their terms. In addition, there were 43 vacancies among the 151 positions. Length of Time to Confirm a Nomination The length of time a given nomination may be pending in the Senate has varied widely. Some nominations have been confirmed within a few days, others have been confirmed within several months, and some have never been confirmed. In the board and commission profiles, this report provides, for each board or commission nomination confirmed in the 115 th Congress, the number of days between nomination and confirmation ("days to confirm"). Under Senate rules, nominations not acted on by the Senate at the end of a session of Congress (or before a recess of 30 days) are returned to the President. The Senate, by unanimous consent, often waives this ruleâalthough not always. In cases where the President resubmits a returned nomination, this report measures the days to confirm from the date of receipt of the resubmitted nomination, not the original. For those nominations confirmed in the 115 th Congress, a mean of 121.0 days elapsed between nomination and confirmation. The median number of days elapsed was 91.0. Organization of the Report Board and Commission Profiles Each of the 34 board or commission profiles in this report is organized into three parts. First, the leadership structure section discusses the statutory requirements for the appointed positions, including the number of members on each board or commission, their terms of office, whether these members may continue in their positions after their terms expire, whether political balance is required, and the method for selecting the chair. The first table lists incumbents to full-time positions as of the end of the 115 th Congress, along with party affiliation (where applicable), date of first confirmation, and term expiration date. Incumbents whose terms have expired are italicized. Most incumbents serve fixed terms of office and are removable only for specified causes. They generally remain in office when a new Administration assumes office following a presidential election. The second table lists appointment action for vacant positions during the 115 th Congress. This table provides the name of the nominee, position title, date of nomination or appointment, date of confirmation, and number of days between receipt of a nomination and confirmation, and notes relevant actions other than confirmation (e.g., nominations returned to or withdrawn by the President). When more than one nominee has had appointment action, the second table also provides statistics on the length of time between nomination and confirmation. The average days to confirm are provided in the form of a mean number. Additional Appointment Information Appendix A provides two tables. Table A-1 includes information on each of the nominations and appointments to regulatory and other collegial boards and commissions during the 115 th Congress. It is alphabetically organized and follows a similar format to that of the "Appointment Action" sections discussed above. It identifies the board or commission involved and the dates of nomination and confirmation. It also indicates if a nomination was withdrawn, returned, rejected, or if a recess appointment was made. In addition, it provides the mean and median number of days taken to confirm a nomination. Table A-2 contains summary information on appointments and nominations by organization. For each of the 34 independent boards and commissions discussed in this report, it shows the number of positions, vacancies, incumbents whose term had expired, nominations, individual nominees, positions to which nominations were made, confirmations, nominations returned to the President, nominations withdrawn, and recess appointments. A list of organization abbreviations can be found in Appendix B . Chemical Safety and Hazard Investigation Board10 The Chemical Safety and Hazard Investigation Board is an independent agency consisting of five members who serve five-year terms (no political balance is required), including a chair. The President appoints the members, including the chair, with the advice and consent of the Senate. When a term expires, the incumbent must leave office. Commodity Futures Trading Commission11 The Commodity Futures Trading Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. At the end of a term, a member may remain in office, unless replaced, until the end of the next session of Congress. The chair is also appointed by the President, with the advice and consent of the Senate. Consumer Product Safety Commission12 The statute establishing the Consumer Product Safety Commission calls for five members who serve seven-year terms. No more than three members may be from the same political party. A member may remain in office for one year at the end of a term, unless replaced. The chair is also appointed by the President, with the advice and consent of the Senate. Defense Nuclear Facilities Safety Board13 The Defense Nuclear Facilities Safety Board consists of five members (no more than three may be from the same political party) who serve five-year terms. After a term expires, a member may continue to serve until a successor takes office. The President designates the chair and vice chair. Election Assistance Commission14 The Election Assistance Commission consists of four members (no more than two may be from the same political party) who serve four-year terms. After a term expires, a member may continue to serve until a successor takes office. The chair and vice chair, from different political parties and designated by the commission, change each year. Equal Employment Opportunity Commission15 The Equal Employment Opportunity Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. An incumbent whose term has expired may continue to serve until a successor is appointed, except that no such member may continue to serve (1) for more than 60 days when Congress is in session, unless a successor has been nominated; or (2) after the adjournment of the session of the Senate in which the successor's nomination was submitted. The President designates the chair and the vice chair. The President also appoints the general counsel, with the advice and consent of the Senate. Export-Import Bank Board of Directors16 The Export-Import Bank Board of Directors comprises the bank president, who serves as chair; the bank first vice president, who serves as vice chair; and three other members (no more than three of these five may be from the same political party). All five members are appointed by the President, with the advice and consent of the Senate, and serve for terms of up to four years. An incumbent whose term has expired may continue to serve until a successor is qualified, or until six months after the term expiresâwhichever occurs earlier. The President also appoints an inspector general, with the advice and consent of the Senate. Farm Credit Administration18 The Farm Credit Administration consists of three members (no more than two may be from the same political party) who serve six-year terms. A member may not succeed himself or herself unless he or she was first appointed to complete an unexpired term of three years or less. A member whose term expires may continue to serve until a successor takes office. One member is designated by the President to serve as chair for the duration of the member's term. Federal Communications Commission19 The Federal Communications Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, a member may continue to serve until the end of the next session of Congress, unless a successor is appointed before that time. The President designates the chair. Federal Deposit Insurance Corporation BoardÂ ofÂ Directors20 The Federal Deposit Insurance Corporation Board of Directors consists of five members, of whom twoâthe comptroller of the currency and the director of the Consumer Financial Protection Bureauâare ex officio. The three appointed members serve six-year terms. An appointed member may continue to serve after the expiration of a term until a successor is appointed. Not more than three members of the board may be from the same political party. The President appoints the chair and the vice chair, with the advice and consent of the Senate, from among the appointed members. The chair is appointed for a term of five years. The President also appoints the inspector general, with the advice and consent of the Senate. Federal Election Commission22 The Federal Election Commission consists of six members (no more than three may be from the same political party) who may serve for a single term of six years. When a term expires, a member may continue to serve until a successor takes office. The chair and vice chair, from different political parties and elected by the commission, change each year. Generally, the vice chair succeeds the chair. Federal Energy Regulatory Commission23 The Federal Energy Regulatory Commission, an independent agency within the Department of Energy, consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, a member may continue to serve until a successor takes office, except that such commissioner may not serve beyond the end of the session of the Congress in which his or her term expires. The President designates the chair. Federal Labor Relations Authority24 The Federal Labor Relations Authority consists of three members (no more than two may be from the same political party) who serve five-year terms. After the date on which a five-year term expires, a member may continue to serve until the end of the next Congress, unless a successor is appointed before that time. The President designates the chair. The President also appoints the general counsel, with the advice and consent of the Senate. Federal Maritime Commission25 The Federal Maritime Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, a member may continue to serve until a successor takes office. The President designates the chair. Federal Mine Safety and Health Review Commission26 The Federal Mine Safety and Health Review Commission consists of five members (no political balance is required) who serve six-year terms. When a term expires, the member must leave office. The President designates the chair. Federal Reserve System Board of Governors27 The Federal Reserve System Board of Governors consists of seven members (no political balance is required) who serve 14-year terms. When a term expires, a member may continue to serve until a successor takes office. The President appoints the chair and vice chair, who are separately appointed as members, for four-year terms, with the advice and consent of the Senate. Federal Trade Commission28 The Federal Trade Commission consists of five members (no more than three may be from the same political party) who serve seven-year terms. When a term expires, the member may continue to serve until a successor takes office. The President designates the chair. Financial Stability Oversight Council29 The Financial Stability Oversight Council consists of 10 voting members and 5 nonvoting members, and is chaired by the Secretary of the Treasury. Of the 10 voting members, 9 serve ex officio, by virtue of their positions as leaders of other agencies. The remaining voting member is appointed by the President with the advice and consent of the Senate and serves full time for a term of six years. Of the five nonvoting members, two serve ex officio. The remaining three nonvoting members are designated through a process determined by the constituencies they represent, and they serve for terms of two years. The council is not required to have a balance of political party representation. Foreign Claims Settlement Commission30 The Foreign Claims Settlement Commission, located in the Department of Justice, consists of three members (political balance is not required) who serve three-year terms. When a term expires, the member may continue to serve until a successor takes office. Only the chair, who is appointed by the President with the advice and consent of the Senate, serves full time. Merit Systems Protection Board31 The Merit Systems Protection Board consists of three members (no more than two may be from the same political party) who serve seven-year terms. A member who has been appointed to a full seven-year term may not be reappointed to any following term. When a term expires, the member may continue to serve for one year, unless a successor is appointed before that time. The President appoints the chair, with the advice and consent of the Senate, and designates the vice chair. National Credit Union Administration BoardÂ ofÂ Directors32 The National Credit Union Administration Board of Directors consists of three members (no more than two members may be from the same political party) who serve six-year terms. When a term expires, a member may continue to serve until a successor takes office. The President designates the chair. National Labor Relations Board33 The National Labor Relations Board consists of five members who serve five-year terms. Political balance is not required, but, by tradition, no more than three members are from the same political party. When a term expires, the member must leave office. The President designates the chair. The President also appoints the general counsel, with the advice and consent of the Senate. National Mediation Board34 The National Mediation Board consists of three members (no more than two may be from the same political party) who serve three-year terms. When a term expires, the member may continue to serve until a successor takes office. The board annually designates a chair. National Transportation Safety Board35 The National Transportation Safety Board consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, a member may continue to serve until a successor takes office. The President appoints the chair from among the members for a two-year term, with the advice and consent of the Senate, and designates the vice chair. Nuclear Regulatory Commission36 The Nuclear Regulatory Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, the member must leave office. The President designates the chair. The President also appoints the inspector general, with the advice and consent of the Senate. Occupational Safety and Health ReviewÂ Commission38 The Occupational Safety and Health Review Commission consists of three members (political balance is not required) who serve six-year terms. When a term expires, the member must leave office. The President designates the chair. Postal Regulatory Commission39 The Postal Regulatory Commission consists of five members (no more than three may be from the same political party) who serve six-year terms. After a term expires, a member may continue to serve until his or her successor takes office, but the member may not continue to serve for more than one year after the date upon which his or her term otherwise would expire. The President designates the chair, and the members select the vice chair. Privacy and Civil Liberties Oversight Board40 The Privacy and Civil Liberties Oversight Board consists of five members (no more than three may be from the same political party) who serve six-year terms. When a term expires, the member may continue to serve until a successor takes office. Only the chair, who is appointed by the President with the advice and consent of the Senate, serves full time. The Implementing Recommendations of the 9/11 Commission Act of 2007, P.L. 110-53 , Title VIII, Section 801 (121 Stat. 352), established the Privacy and Civil Liberties Oversight Board. Previously, the Privacy and Civil Liberties Oversight Board functioned as part of the White House Office in the Executive Office of the President. That board ceased functioning on January 30, 2008. Railroad Retirement Board41 The Railroad Retirement Board consists of three members (political balance is not required) who serve five-year terms. When a term expires, the member may continue to serve until a successor takes office. The President appoints the chair and an inspector general with the advice and consent of the Senate. Securities and Exchange Commission43 The Securities and Exchange Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, the member may continue to serve until the end of the next session of Congress, unless a successor is appointed before that time. The President designates the chair. Surface Transportation Board44 The Surface Transportation Board, located within the Department of Transportation, consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, the member may continue to serve until a successor takes office but for not more than one year after expiration. The President designates the chair. United States International Trade Commission45 The United States International Trade Commission consists of six members (no more than three may be from the same political party) who serve nine-year terms. A member of the commission who has served for more than five years is ineligible for reappointment. When a term expires, a member may continue to serve until a successor takes office. The President designates the chair and vice chair for two-year terms of office, but they may not belong to the same political party. The President may not designate a chair with less than one year of continuous service as a member. This restriction does not apply to the vice chair. United States Parole Commission The United States Parole Commission is an independent agency in the Department of Justice. The commission consists of five commissioners (political balance is not required) who serve for six-year terms. When a term expires, a member may continue to serve until a successor takes office. In most cases, a commissioner may serve no more than 12 years. The President designates the chair (18 U.S.C. Â§4202). The commission was previously scheduled to be phased out, but Congress has extended its life several times. Under P.L. 113-47 , Section 2 (127 Stat. 572), it was extended until November 1, 2018 (18 U.S.C. Â§3551 note). United States Sentencing Commission46 The United States Sentencing Commission is a judicial branch agency that consists of seven voting members, who are appointed to six-year terms, and one nonvoting member. The seven voting members are appointed by the President, with the advice and consent of the Senate, and only the chair and three vice chairs serve full time. The President appoints the chair, with the advice and consent of the Senate, and designates the vice chairs. At least three members must be federal judges. No more than four members may be of the same political party. No more than two vice chairs may be of the same political party. No voting member may serve more than two full terms. When a term expires, an incumbent may continue to serve until he or she is reappointed, a successor takes office, or Congress adjourns sine die at the end of the session that commences after the expiration of the term, whichever is earliest. The Attorney General (or designee) serves ex officio as a nonvoting member. The chair of the United State Parole Commission also is an ex officio nonvoting member of the commission. Appendix A. Summary of All Nominations and Appointments to Collegial Boards andÂ Commissions Appendix B. Board and Commission Abbreviations Summary:	null	96	27,446	27,448	27,448	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The President is responsible for appointing individuals to certain positions in the federal government. In some instances, the President makes these appointments using authorities granted to the President alone. Other appointments, generally referred to with the abbreviation PAS, are made by the President with the advice and consent of the Senate via the nomination and confirmation process. This report identifies, for the 115 th Congress, all nominations submitted to the Senate for full-time positions on 34 regulatory and other collegial boards and commissions. This report includes profiles on the leadership structures of each of these 34 boards and commissions as well as a pair of tables presenting information on each body's membership and appointment activity as of the end of the 115 th Congress. The profiles discuss the statutory requirements for the appointed positions, including the number of members on each board or commission, their terms of office, whether they may continue in their positions after their terms expire, whether political balance is required, and the method for selecting the chair. The first table in each pair provides information on full-time positions requiring Senate confirmation as of the end of the 115 th Congress. The second table tracks appointment activity for each board or commission within the 115 th Congress by the Senate (confirmations, rejections, returns to the President, and elapsed time between nomination and confirmation), as well as further related presidential activity (including withdrawals and recess appointments). In some instances, no appointment action occurred within a board or commission during the 115 th Congress. Information for this report was compiled using the Senate nominations database at https://www.congress.gov/ (users can click the "nominations" tab on the left-hand side of the page to search the database), the Congressional Record (daily edition), the Weekly Compilation of Presidential Documents , telephone discussions with agency officials, agency websites, the United States Code , and the 2016 Plum Book ( United States Government Policy and Supporting Positions ). Congressional Research Service (CRS) reports regarding the presidential appointments process, nomination activity for other executive branch positions, recess appointments, and other related matters are available to congressional clients at http://www.crs.gov . Characteristics of Regulatory and Other Collegial Bodies Common Features Federal executive branch boards and commissions discussed in this report share, among other characteristics, the following: (1) they are independent executive branch bodies located, with four exceptions, outside executive departments; (2) several board or commission members head each entity, and at least one of these members serves full time; (3) the members are appointed by the President with the advice and consent of the Senate; and (4) the members serve fixed terms of office and, except in a few bodies, the President's power to remove them is restricted. Terms of Office For most of the boards and commissions included in this report, the fixed terms of office for member positions have set beginning and end dates, irrespective of whether the posts are filled or when appointments are made. In contrast, for a few agencies, such as the Chemical Safety and Hazard Investigation Board, the full term begins when an appointee takes office and expires after the incumbent has held the post for the requisite period of time. The end dates of the fixed terms of a board's members are staggered, so that the terms do not expire all at once. The use of terms with fixed beginning and end dates is intended to minimize the occurrence of simultaneous board member departures and thereby increase leadership continuity. Under such an arrangement, an individual is nominated to a particular position and a particular term of office. An individual may be nominated and confirmed for a position for the remainder of an unexpired term to replace an appointee who has resigned (or died). Alternatively, an individual might be nominated for an upcoming term with the expectation that the new term will be under way by the time of confirmation. Occasionally, when the unexpired term has been for a relatively short period, the President has submitted two nominations of the same person simultaneouslyâthe first to complete the unexpired term and the second to complete the entire succeeding term of office. Appointment of Chairs and Political Independence On some commissions, the chair is subject to Senate confirmation and must be appointed from among the incumbent commissioners. If the President wishes to appoint, as chair, someone who is not on the commission, the President simultaneously submits two nominations for the nomineeâone for member and the other for chair. As independent entities with staggered membership, executive branch boards and commissions have more political independence from the President than do executive departments. Nonetheless, the President can sometimes exercise significant influence over the composition of a board or commission's membership when he designates the chair or has the opportunity to fill a number of vacancies at once. For example, President George W. Bush had the chance to shape the Securities and Exchange Commission (SEC) during the first two years of his presidency because of existing vacancies, resignations, and a member's death. Likewise, during the same time period, President Bush was able to submit nominations for all of the positions on the National Labor Relations Board because of existing vacancies, expiring recess appointments, and resignations. Simultaneous turnover of board or commission membership may result from coincidence, but it also may be the result of a buildup of vacancies after extended periods of time in which the President does not nominate, or the Senate does not confirm, members. Political Affiliations and Inspectors General Two other notable characteristics apply to appointments to some of the boards and commissions. First, for 26 of the 34 bodies discussed in this report, the law limits the number of appointed members who may belong to the same political party, usually to no more than a bare majority of the appointed members (e.g., two of three or three of five). Second, advice and consent requirements also apply to inspector general appointments in four of these organizations and general counsel appointments in three. Appointments During the 115th Congress During the 115 th Congress, President Donald Trump submitted nominations to the Senate for 112 of the 151 full-time positions on 34 regulatory and other boards and commissions. In attempting to fill these 112 positions, he submitted a total of 140 nominations, of which 75 were confirmed, 12 were withdrawn, and 53 were returned to the President. No recess appointments were made. Table 1 summarizes the appointment activity for the 115 th Congress. At the end of the Congress, 22 incumbents were serving past the expiration of their terms. In addition, there were 43 vacancies among the 151 positions. Length of Time to Confirm a Nomination The length of time a given nomination may be pending in the Senate has varied widely. Some nominations have been confirmed within a few days, others have been confirmed within several months, and some have never been confirmed. In the board and commission profiles, this report provides, for each board or commission nomination confirmed in the 115 th Congress, the number of days between nomination and confirmation ("days to confirm"). Under Senate rules, nominations not acted on by the Senate at the end of a session of Congress (or before a recess of 30 days) are returned to the President. The Senate, by unanimous consent, often waives this ruleâalthough not always. In cases where the President resubmits a returned nomination, this report measures the days to confirm from the date of receipt of the resubmitted nomination, not the original. For those nominations confirmed in the 115 th Congress, a mean of 121.0 days elapsed between nomination and confirmation. The median number of days elapsed was 91.0. Organization of the Report Board and Commission Profiles Each of the 34 board or commission profiles in this report is organized into three parts. First, the leadership structure section discusses the statutory requirements for the appointed positions, including the number of members on each board or commission, their terms of office, whether these members may continue in their positions after their terms expire, whether political balance is required, and the method for selecting the chair. The first table lists incumbents to full-time positions as of the end of the 115 th Congress, along with party affiliation (where applicable), date of first confirmation, and term expiration date. Incumbents whose terms have expired are italicized. Most incumbents serve fixed terms of office and are removable only for specified causes. They generally remain in office when a new Administration assumes office following a presidential election. The second table lists appointment action for vacant positions during the 115 th Congress. This table provides the name of the nominee, position title, date of nomination or appointment, date of confirmation, and number of days between receipt of a nomination and confirmation, and notes relevant actions other than confirmation (e.g., nominations returned to or withdrawn by the President). When more than one nominee has had appointment action, the second table also provides statistics on the length of time between nomination and confirmation. The average days to confirm are provided in the form of a mean number. Additional Appointment Information Appendix A provides two tables. Table A-1 includes information on each of the nominations and appointments to regulatory and other collegial boards and commissions during the 115 th Congress. It is alphabetically organized and follows a similar format to that of the "Appointment Action" sections discussed above. It identifies the board or commission involved and the dates of nomination and confirmation. It also indicates if a nomination was withdrawn, returned, rejected, or if a recess appointment was made. In addition, it provides the mean and median number of days taken to confirm a nomination. Table A-2 contains summary information on appointments and nominations by organization. For each of the 34 independent boards and commissions discussed in this report, it shows the number of positions, vacancies, incumbents whose term had expired, nominations, individual nominees, positions to which nominations were made, confirmations, nominations returned to the President, nominations withdrawn, and recess appointments. A list of organization abbreviations can be found in Appendix B . Chemical Safety and Hazard Investigation Board10 The Chemical Safety and Hazard Investigation Board is an independent agency consisting of five members who serve five-year terms (no political balance is required), including a chair. The President appoints the members, including the chair, with the advice and consent of the Senate. When a term expires, the incumbent must leave office. Commodity Futures Trading Commission11 The Commodity Futures Trading Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. At the end of a term, a member may remain in office, unless replaced, until the end of the next session of Congress. The chair is also appointed by the President, with the advice and consent of the Senate. Consumer Product Safety Commission12 The statute establishing the Consumer Product Safety Commission calls for five members who serve seven-year terms. No more than three members may be from the same political party. A member may remain in office for one year at the end of a term, unless replaced. The chair is also appointed by the President, with the advice and consent of the Senate. Defense Nuclear Facilities Safety Board13 The Defense Nuclear Facilities Safety Board consists of five members (no more than three may be from the same political party) who serve five-year terms. After a term expires, a member may continue to serve until a successor takes office. The President designates the chair and vice chair. Election Assistance Commission14 The Election Assistance Commission consists of four members (no more than two may be from the same political party) who serve four-year terms. After a term expires, a member may continue to serve until a successor takes office. The chair and vice chair, from different political parties and designated by the commission, change each year. Equal Employment Opportunity Commission15 The Equal Employment Opportunity Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. An incumbent whose term has expired may continue to serve until a successor is appointed, except that no such member may continue to serve (1) for more than 60 days when Congress is in session, unless a successor has been nominated; or (2) after the adjournment of the session of the Senate in which the successor's nomination was submitted. The President designates the chair and the vice chair. The President also appoints the general counsel, with the advice and consent of the Senate. Export-Import Bank Board of Directors16 The Export-Import Bank Board of Directors comprises the bank president, who serves as chair; the bank first vice president, who serves as vice chair; and three other members (no more than three of these five may be from the same political party). All five members are appointed by the President, with the advice and consent of the Senate, and serve for terms of up to four years. An incumbent whose term has expired may continue to serve until a successor is qualified, or until six months after the term expiresâwhichever occurs earlier. The President also appoints an inspector general, with the advice and consent of the Senate. Farm Credit Administration18 The Farm Credit Administration consists of three members (no more than two may be from the same political party) who serve six-year terms. A member may not succeed himself or herself unless he or she was first appointed to complete an unexpired term of three years or less. A member whose term expires may continue to serve until a successor takes office. One member is designated by the President to serve as chair for the duration of the member's term. Federal Communications Commission19 The Federal Communications Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, a member may continue to serve until the end of the next session of Congress, unless a successor is appointed before that time. The President designates the chair. Federal Deposit Insurance Corporation BoardÂ ofÂ Directors20 The Federal Deposit Insurance Corporation Board of Directors consists of five members, of whom twoâthe comptroller of the currency and the director of the Consumer Financial Protection Bureauâare ex officio. The three appointed members serve six-year terms. An appointed member may continue to serve after the expiration of a term until a successor is appointed. Not more than three members of the board may be from the same political party. The President appoints the chair and the vice chair, with the advice and consent of the Senate, from among the appointed members. The chair is appointed for a term of five years. The President also appoints the inspector general, with the advice and consent of the Senate. Federal Election Commission22 The Federal Election Commission consists of six members (no more than three may be from the same political party) who may serve for a single term of six years. When a term expires, a member may continue to serve until a successor takes office. The chair and vice chair, from different political parties and elected by the commission, change each year. Generally, the vice chair succeeds the chair. Federal Energy Regulatory Commission23 The Federal Energy Regulatory Commission, an independent agency within the Department of Energy, consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, a member may continue to serve until a successor takes office, except that such commissioner may not serve beyond the end of the session of the Congress in which his or her term expires. The President designates the chair. Federal Labor Relations Authority24 The Federal Labor Relations Authority consists of three members (no more than two may be from the same political party) who serve five-year terms. After the date on which a five-year term expires, a member may continue to serve until the end of the next Congress, unless a successor is appointed before that time. The President designates the chair. The President also appoints the general counsel, with the advice and consent of the Senate. Federal Maritime Commission25 The Federal Maritime Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, a member may continue to serve until a successor takes office. The President designates the chair. Federal Mine Safety and Health Review Commission26 The Federal Mine Safety and Health Review Commission consists of five members (no political balance is required) who serve six-year terms. When a term expires, the member must leave office. The President designates the chair. Federal Reserve System Board of Governors27 The Federal Reserve System Board of Governors consists of seven members (no political balance is required) who serve 14-year terms. When a term expires, a member may continue to serve until a successor takes office. The President appoints the chair and vice chair, who are separately appointed as members, for four-year terms, with the advice and consent of the Senate. Federal Trade Commission28 The Federal Trade Commission consists of five members (no more than three may be from the same political party) who serve seven-year terms. When a term expires, the member may continue to serve until a successor takes office. The President designates the chair. Financial Stability Oversight Council29 The Financial Stability Oversight Council consists of 10 voting members and 5 nonvoting members, and is chaired by the Secretary of the Treasury. Of the 10 voting members, 9 serve ex officio, by virtue of their positions as leaders of other agencies. The remaining voting member is appointed by the President with the advice and consent of the Senate and serves full time for a term of six years. Of the five nonvoting members, two serve ex officio. The remaining three nonvoting members are designated through a process determined by the constituencies they represent, and they serve for terms of two years. The council is not required to have a balance of political party representation. Foreign Claims Settlement Commission30 The Foreign Claims Settlement Commission, located in the Department of Justice, consists of three members (political balance is not required) who serve three-year terms. When a term expires, the member may continue to serve until a successor takes office. Only the chair, who is appointed by the President with the advice and consent of the Senate, serves full time. Merit Systems Protection Board31 The Merit Systems Protection Board consists of three members (no more than two may be from the same political party) who serve seven-year terms. A member who has been appointed to a full seven-year term may not be reappointed to any following term. When a term expires, the member may continue to serve for one year, unless a successor is appointed before that time. The President appoints the chair, with the advice and consent of the Senate, and designates the vice chair. National Credit Union Administration BoardÂ ofÂ Directors32 The National Credit Union Administration Board of Directors consists of three members (no more than two members may be from the same political party) who serve six-year terms. When a term expires, a member may continue to serve until a successor takes office. The President designates the chair. National Labor Relations Board33 The National Labor Relations Board consists of five members who serve five-year terms. Political balance is not required, but, by tradition, no more than three members are from the same political party. When a term expires, the member must leave office. The President designates the chair. The President also appoints the general counsel, with the advice and consent of the Senate. National Mediation Board34 The National Mediation Board consists of three members (no more than two may be from the same political party) who serve three-year terms. When a term expires, the member may continue to serve until a successor takes office. The board annually designates a chair. National Transportation Safety Board35 The National Transportation Safety Board consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, a member may continue to serve until a successor takes office. The President appoints the chair from among the members for a two-year term, with the advice and consent of the Senate, and designates the vice chair. Nuclear Regulatory Commission36 The Nuclear Regulatory Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, the member must leave office. The President designates the chair. The President also appoints the inspector general, with the advice and consent of the Senate. Occupational Safety and Health ReviewÂ Commission38 The Occupational Safety and Health Review Commission consists of three members (political balance is not required) who serve six-year terms. When a term expires, the member must leave office. The President designates the chair. Postal Regulatory Commission39 The Postal Regulatory Commission consists of five members (no more than three may be from the same political party) who serve six-year terms. After a term expires, a member may continue to serve until his or her successor takes office, but the member may not continue to serve for more than one year after the date upon which his or her term otherwise would expire. The President designates the chair, and the members select the vice chair. Privacy and Civil Liberties Oversight Board40 The Privacy and Civil Liberties Oversight Board consists of five members (no more than three may be from the same political party) who serve six-year terms. When a term expires, the member may continue to serve until a successor takes office. Only the chair, who is appointed by the President with the advice and consent of the Senate, serves full time. The Implementing Recommendations of the 9/11 Commission Act of 2007, P.L. 110-53 , Title VIII, Section 801 (121 Stat. 352), established the Privacy and Civil Liberties Oversight Board. Previously, the Privacy and Civil Liberties Oversight Board functioned as part of the White House Office in the Executive Office of the President. That board ceased functioning on January 30, 2008. Railroad Retirement Board41 The Railroad Retirement Board consists of three members (political balance is not required) who serve five-year terms. When a term expires, the member may continue to serve until a successor takes office. The President appoints the chair and an inspector general with the advice and consent of the Senate. Securities and Exchange Commission43 The Securities and Exchange Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, the member may continue to serve until the end of the next session of Congress, unless a successor is appointed before that time. The President designates the chair. Surface Transportation Board44 The Surface Transportation Board, located within the Department of Transportation, consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, the member may continue to serve until a successor takes office but for not more than one year after expiration. The President designates the chair. United States International Trade Commission45 The United States International Trade Commission consists of six members (no more than three may be from the same political party) who serve nine-year terms. A member of the commission who has served for more than five years is ineligible for reappointment. When a term expires, a member may continue to serve until a successor takes office. The President designates the chair and vice chair for two-year terms of office, but they may not belong to the same political party. The President may not designate a chair with less than one year of continuous service as a member. This restriction does not apply to the vice chair. United States Parole Commission The United States Parole Commission is an independent agency in the Department of Justice. The commission consists of five commissioners (political balance is not required) who serve for six-year terms. When a term expires, a member may continue to serve until a successor takes office. In most cases, a commissioner may serve no more than 12 years. The President designates the chair (18 U.S.C. Â§4202). The commission was previously scheduled to be phased out, but Congress has extended its life several times. Under P.L. 113-47 , Section 2 (127 Stat. 572), it was extended until November 1, 2018 (18 U.S.C. Â§3551 note). United States Sentencing Commission46 The United States Sentencing Commission is a judicial branch agency that consists of seven voting members, who are appointed to six-year terms, and one nonvoting member. The seven voting members are appointed by the President, with the advice and consent of the Senate, and only the chair and three vice chairs serve full time. The President appoints the chair, with the advice and consent of the Senate, and designates the vice chairs. At least three members must be federal judges. No more than four members may be of the same political party. No more than two vice chairs may be of the same political party. No voting member may serve more than two full terms. When a term expires, an incumbent may continue to serve until he or she is reappointed, a successor takes office, or Congress adjourns sine die at the end of the session that commences after the expiration of the term, whichever is earliest. The Attorney General (or designee) serves ex officio as a nonvoting member. The chair of the United State Parole Commission also is an ex officio nonvoting member of the commission. Appendix A. Summary of All Nominations and Appointments to Collegial Boards andÂ Commissions Appendix B. Board and Commission Abbreviations	Summary:	gov_report	1,024	null	4
crs_R46251	crs_R46251_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Jurisdiction of House Committees When legislation is introduced in the House or received from the Senate, it is referred to one or more committees primarily on the basis of the jurisdictional statements contained in clause 1 of House Rule X. These statements define the policy subjects on which each standing committee may exercise jurisdiction on behalf of the chamber. The statements themselves tend to address broad policy areas and not specific departments, agencies, or programs of the federal government. Many federal departments and agencies handle a wide variety of policy areas that do not fit neatly within the subject matter jurisdiction of one or another standing committee. Because committee jurisdiction often is expressed in general policy terms, it is possible for more than one committee to claim jurisdiction over different aspects of a broad subject that may encompass a myriad of specific programs and activities. Additional guidance and context to the referral of measures addressing particular policy areas can be found in notes and annotations written by the House Parliamentarian located below the jurisdictional statements of each standing committee in the House Manual . Take the subject of roads for example. When it comes to the design and planning of road construction or maintenance, the House Transportation and Infrastructure Committee exercises jurisdiction on the basis of its responsibility defined in clause 1(r)(11) of Rule X for the "Construction or maintenance of roads or post roads (other than appropriations therefor)." However, as suggested by the parenthetical in this jurisdictional statement, the amount of money made available for road construction or maintenance through the annual appropriations process is a matter within the domain of the House Committee on Appropriations, which has jurisdiction over the "Appropriation of the revenue for the support of the Government." Furthermore, in addition to federal spending that occurs through the annual appropriations process, funding for the construction and maintenance of the nation's roadways may also be drawn from the Highway Trust Fund, which accrues revenue mainly from the collection of federal gasoline taxes. The use of general revenues to fund a particular federal activityâin this case, highwaysâis by precedent considered a matter of revenue collection and within the purview of the House Committee on Ways and Means, which has jurisdiction over "Revenue measures generally." Additional committees as well may exercise jurisdiction over aspects of the nation's roadways, depending on how subjects within their jurisdictions are connected to issues involving roads. Referral of Legislation in the House When a Member introduces a bill or resolution, or when legislation from the Senate is received in the House, clause 2 of House Rule XII directs the Speaker to refer the measure to committee in such manner as to ensure to the maximum extent feasible that each committee that has jurisdiction under clause 1 of Rule X over the subject matter of a provision thereof may consider such provision and report to the House thereon. Multiple referralâreferring a measure to more than one committeeâis common in the House as a result of the standing rules governing jurisdiction (Rule X) and the referral of legislation to committee (Rule XII). When language in a measure is within a committee's jurisdiction, it will trigger ("to the maximum extent feasible") a referral of the measure to that committee. In practice, the entire bill is sent to each committee of referral with the expectation that each committee will act only on matters that fall within its jurisdiction. Committees often monitor their own legislative actions and those of their counterparts for any jurisdictional issues that may arise when a committee reports its recommended changes to the House. When legislation is multiply referred, the Speaker identifies a "primary" committee of referral, which is the panel understood to exercise jurisdiction over the main subject of the measure. House Rule XII further provides the Speaker with the authority to refer legislation to more than one committee either at the point of introduction (an "initial additional referral"), or after another committee has filed its report (a "sequential referral"). The Speaker may also divide a measure into its component parts and refer individual pieces to different House panels (a "split referral"), but split referrals are rare in current practice. The Speaker is empowered to place time limits on any referral and always does so in the case of a sequential referral. In most cases, once the primary committee has reported to the House, the Speaker will set a deadline for additional committees of referral to report or be automatically discharged from further consideration. Although the Speaker has the authority to do so, rarely are time limits established on deliberations of a primary committee, or extended beyond the deadline imposed by a sequential referral. Due to their presumed expertise on matters within their jurisdiction, committees of primary or sole referral generally enjoy deference from the House on whether or not to report legislation to the full chamber. With House approval, the Speaker may appoint Members from relevant committees of jurisdiction to a special, select, or ad hoc committee in order to receive and review specific matters and report to the House its findings or recommendations. Rule XII further indicates that the Speaker "may make such other [referral] provision as may be considered appropriate." House rules vest these powers of referral in the Speaker; in practice, the House Parliamentarian makes day-to-day referral decisions acting as the Speaker's nonpartisan and disinterested agent. Worth noting is that House rules and procedures for referring legislation have changed in recent decades. For instance, prior to January 3, 1975, House rules provided no formal mechanism for a measure to be referred to two or more committees with a jurisdictional claim to the measure's subject matter. The ability of the Speaker to refer legislation to more than one committee was first established in House rules through the adoption of H.Res. 988 (93 th Congress), the Committee Reform Amendments of 1974, which became effective at the start of the 94 th Congress (1975-1976). Furthermore, at the outset of the 98 th Congress (1983-1984), Speaker O'Neill announced a policy of identifying a "primary" committee of jurisdiction when legislation was multiply referred, and beginning in the 104 th Congress (1995-1996) the designation of a primary committee of referral by the Speaker has been a requirement of House rules. Additional Factors Affecting Jurisdiction and Referral Clause 1 of House Rule X is the main determinant of House committee jurisdiction, but other factors may also influence how legislation is referred. For instance, some committees have crafted written memoranda between them memorializing their common understanding of the jurisdictional boundaries guiding the referral of measures on topics that are jurisdictionally ambiguous, or over which multiple committees make a claim. Such memoranda cannot override the explicit jurisdictional statements of Rule X, but they can be viewed as explanations of the committees' common understanding of these statements. In some cases, committees have published these memoranda in the Congressional Record . The act of referring measures to committees also can serve as a determinant of House committee jurisdiction. According to Hinds' Precedents of the U.S. House of Representatives , when the House refers "a bill or resolution to any committee ... jurisdiction is thereby conferred." Consequently, once a measure has been referred to a committee, precedent is established for future referrals to that committee of measures of the same type. This is true even in the case of an erroneous reference to committee. If the error is not corrected, jurisdiction is conferred on the committee by the referral. If a measure is enacted into law, amendments to the law are presumed to be within the originating committee's jurisdiction. The referral of certain kinds of measures may also be defined in statute. The House rulebook contains 35 different sets of statutory legislative procedures (also called "expedited" or "fast-track" procedures) that apply only to a narrow class of items described in the statute itself. Some statutory procedures contain "automatic referral" provisions specifying the committee(s) to which a particular item would be referred if one were introduced or received by the House. For instance, if the Defense Base Closure Commission reports to Congress a recommendation to relocate or close U.S. military bases, the Defense Base Closure and Realignment Act of 1990 ( P.L. 101-510 ) allows for expedited consideration of a House or Senate joint resolution disapproving the commission's recommendation. If such a joint resolution were introduced in the House, Section 2908(b) of that act indicates that it "shall be referred to the Committee on Armed Services." Jurisdiction and Referral to House Subcommittees The jurisdictions of subcommittees are not explicitly stated in House rules. The jurisdiction of a subcommittee is generally determined by the full committee that created it. In many cases, the full committee will establish the jurisdictions of its subcommittees in the rules that committees are required to adopt during the first few months of a new Congress. If a subcommittee's jurisdiction is not defined by its parent committee, measures are generally referred to subcommittee or retained by the full committee at the discretion of its chair. Some committees rely more heavily on their subcommittees to process legislation and make recommendations than do other committees. Legislative and Oversight Jurisdiction An important distinction can be drawn between legislative and oversight jurisdiction. Legislative jurisdiction describes the authority of a committee to receive and report measures to the House. Oversight jurisdiction refers to a committee's ability to review matters within its purview, for instance by conducting hearings and investigations. Legislative jurisdiction is defined in clause 1 of Rule X, while clause 2 of the same rule directs all standing committees to "review and study on a continuing basis the application, administration, execution, and effectiveness of laws and programs addressing subjects within its [legislative] jurisdiction." Several committees are given additional oversight duties in clause 3 of Rule X, and the fourth clause of that rule specifies additional functions committees are expected to fulfill. Clause 4(f) of Rule X, for instance, instructs each standing committee to submit to the Budget Committee its "views and estimates" on policy proposals contained in the President's budget submission to Congress that fall within its jurisdiction. Some committees interpret their oversight responsibilities more broadly than others do, which can lead to jurisdictional disputes over which committee is best equipped to conduct hearings, investigations, or other oversight activities. Many policy areas are complex and multidimensional, and considering how subject matter responsibilities are allocated broadly across committees, more than one committee may be involved in overseeing specific aspects of a general subject. Similar to the example of roads explained above in which a number of committees can play a role based on their subject matter (legislative) jurisdictions, oversight of a given area might also be shared by committees exercising different Rule X responsibilities. Summary:	null	96	11,839	11,841	11,841	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Jurisdiction of House Committees When legislation is introduced in the House or received from the Senate, it is referred to one or more committees primarily on the basis of the jurisdictional statements contained in clause 1 of House Rule X. These statements define the policy subjects on which each standing committee may exercise jurisdiction on behalf of the chamber. The statements themselves tend to address broad policy areas and not specific departments, agencies, or programs of the federal government. Many federal departments and agencies handle a wide variety of policy areas that do not fit neatly within the subject matter jurisdiction of one or another standing committee. Because committee jurisdiction often is expressed in general policy terms, it is possible for more than one committee to claim jurisdiction over different aspects of a broad subject that may encompass a myriad of specific programs and activities. Additional guidance and context to the referral of measures addressing particular policy areas can be found in notes and annotations written by the House Parliamentarian located below the jurisdictional statements of each standing committee in the House Manual . Take the subject of roads for example. When it comes to the design and planning of road construction or maintenance, the House Transportation and Infrastructure Committee exercises jurisdiction on the basis of its responsibility defined in clause 1(r)(11) of Rule X for the "Construction or maintenance of roads or post roads (other than appropriations therefor)." However, as suggested by the parenthetical in this jurisdictional statement, the amount of money made available for road construction or maintenance through the annual appropriations process is a matter within the domain of the House Committee on Appropriations, which has jurisdiction over the "Appropriation of the revenue for the support of the Government." Furthermore, in addition to federal spending that occurs through the annual appropriations process, funding for the construction and maintenance of the nation's roadways may also be drawn from the Highway Trust Fund, which accrues revenue mainly from the collection of federal gasoline taxes. The use of general revenues to fund a particular federal activityâin this case, highwaysâis by precedent considered a matter of revenue collection and within the purview of the House Committee on Ways and Means, which has jurisdiction over "Revenue measures generally." Additional committees as well may exercise jurisdiction over aspects of the nation's roadways, depending on how subjects within their jurisdictions are connected to issues involving roads. Referral of Legislation in the House When a Member introduces a bill or resolution, or when legislation from the Senate is received in the House, clause 2 of House Rule XII directs the Speaker to refer the measure to committee in such manner as to ensure to the maximum extent feasible that each committee that has jurisdiction under clause 1 of Rule X over the subject matter of a provision thereof may consider such provision and report to the House thereon. Multiple referralâreferring a measure to more than one committeeâis common in the House as a result of the standing rules governing jurisdiction (Rule X) and the referral of legislation to committee (Rule XII). When language in a measure is within a committee's jurisdiction, it will trigger ("to the maximum extent feasible") a referral of the measure to that committee. In practice, the entire bill is sent to each committee of referral with the expectation that each committee will act only on matters that fall within its jurisdiction. Committees often monitor their own legislative actions and those of their counterparts for any jurisdictional issues that may arise when a committee reports its recommended changes to the House. When legislation is multiply referred, the Speaker identifies a "primary" committee of referral, which is the panel understood to exercise jurisdiction over the main subject of the measure. House Rule XII further provides the Speaker with the authority to refer legislation to more than one committee either at the point of introduction (an "initial additional referral"), or after another committee has filed its report (a "sequential referral"). The Speaker may also divide a measure into its component parts and refer individual pieces to different House panels (a "split referral"), but split referrals are rare in current practice. The Speaker is empowered to place time limits on any referral and always does so in the case of a sequential referral. In most cases, once the primary committee has reported to the House, the Speaker will set a deadline for additional committees of referral to report or be automatically discharged from further consideration. Although the Speaker has the authority to do so, rarely are time limits established on deliberations of a primary committee, or extended beyond the deadline imposed by a sequential referral. Due to their presumed expertise on matters within their jurisdiction, committees of primary or sole referral generally enjoy deference from the House on whether or not to report legislation to the full chamber. With House approval, the Speaker may appoint Members from relevant committees of jurisdiction to a special, select, or ad hoc committee in order to receive and review specific matters and report to the House its findings or recommendations. Rule XII further indicates that the Speaker "may make such other [referral] provision as may be considered appropriate." House rules vest these powers of referral in the Speaker; in practice, the House Parliamentarian makes day-to-day referral decisions acting as the Speaker's nonpartisan and disinterested agent. Worth noting is that House rules and procedures for referring legislation have changed in recent decades. For instance, prior to January 3, 1975, House rules provided no formal mechanism for a measure to be referred to two or more committees with a jurisdictional claim to the measure's subject matter. The ability of the Speaker to refer legislation to more than one committee was first established in House rules through the adoption of H.Res. 988 (93 th Congress), the Committee Reform Amendments of 1974, which became effective at the start of the 94 th Congress (1975-1976). Furthermore, at the outset of the 98 th Congress (1983-1984), Speaker O'Neill announced a policy of identifying a "primary" committee of jurisdiction when legislation was multiply referred, and beginning in the 104 th Congress (1995-1996) the designation of a primary committee of referral by the Speaker has been a requirement of House rules. Additional Factors Affecting Jurisdiction and Referral Clause 1 of House Rule X is the main determinant of House committee jurisdiction, but other factors may also influence how legislation is referred. For instance, some committees have crafted written memoranda between them memorializing their common understanding of the jurisdictional boundaries guiding the referral of measures on topics that are jurisdictionally ambiguous, or over which multiple committees make a claim. Such memoranda cannot override the explicit jurisdictional statements of Rule X, but they can be viewed as explanations of the committees' common understanding of these statements. In some cases, committees have published these memoranda in the Congressional Record . The act of referring measures to committees also can serve as a determinant of House committee jurisdiction. According to Hinds' Precedents of the U.S. House of Representatives , when the House refers "a bill or resolution to any committee ... jurisdiction is thereby conferred." Consequently, once a measure has been referred to a committee, precedent is established for future referrals to that committee of measures of the same type. This is true even in the case of an erroneous reference to committee. If the error is not corrected, jurisdiction is conferred on the committee by the referral. If a measure is enacted into law, amendments to the law are presumed to be within the originating committee's jurisdiction. The referral of certain kinds of measures may also be defined in statute. The House rulebook contains 35 different sets of statutory legislative procedures (also called "expedited" or "fast-track" procedures) that apply only to a narrow class of items described in the statute itself. Some statutory procedures contain "automatic referral" provisions specifying the committee(s) to which a particular item would be referred if one were introduced or received by the House. For instance, if the Defense Base Closure Commission reports to Congress a recommendation to relocate or close U.S. military bases, the Defense Base Closure and Realignment Act of 1990 ( P.L. 101-510 ) allows for expedited consideration of a House or Senate joint resolution disapproving the commission's recommendation. If such a joint resolution were introduced in the House, Section 2908(b) of that act indicates that it "shall be referred to the Committee on Armed Services." Jurisdiction and Referral to House Subcommittees The jurisdictions of subcommittees are not explicitly stated in House rules. The jurisdiction of a subcommittee is generally determined by the full committee that created it. In many cases, the full committee will establish the jurisdictions of its subcommittees in the rules that committees are required to adopt during the first few months of a new Congress. If a subcommittee's jurisdiction is not defined by its parent committee, measures are generally referred to subcommittee or retained by the full committee at the discretion of its chair. Some committees rely more heavily on their subcommittees to process legislation and make recommendations than do other committees. Legislative and Oversight Jurisdiction An important distinction can be drawn between legislative and oversight jurisdiction. Legislative jurisdiction describes the authority of a committee to receive and report measures to the House. Oversight jurisdiction refers to a committee's ability to review matters within its purview, for instance by conducting hearings and investigations. Legislative jurisdiction is defined in clause 1 of Rule X, while clause 2 of the same rule directs all standing committees to "review and study on a continuing basis the application, administration, execution, and effectiveness of laws and programs addressing subjects within its [legislative] jurisdiction." Several committees are given additional oversight duties in clause 3 of Rule X, and the fourth clause of that rule specifies additional functions committees are expected to fulfill. Clause 4(f) of Rule X, for instance, instructs each standing committee to submit to the Budget Committee its "views and estimates" on policy proposals contained in the President's budget submission to Congress that fall within its jurisdiction. Some committees interpret their oversight responsibilities more broadly than others do, which can lead to jurisdictional disputes over which committee is best equipped to conduct hearings, investigations, or other oversight activities. Many policy areas are complex and multidimensional, and considering how subject matter responsibilities are allocated broadly across committees, more than one committee may be involved in overseeing specific aspects of a general subject. Similar to the example of roads explained above in which a number of committees can play a role based on their subject matter (legislative) jurisdictions, oversight of a given area might also be shared by committees exercising different Rule X responsibilities.	Summary:	gov_report	1,024	null	5
crs_R45832	crs_R45832_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The federal government is the largest energy consumer in the United States. Within the federal government, the U.S. Department of Defense (DOD) consumes more energy than any other agency. In FY2017, DOD consumed 707.9 trillion British thermal units (Btu) of energyâroughly 16 times that of the second largest consumer in the federal government, the U.S. Postal Service ( Figure 1 ). In FY2017, DOD spent approximately $11.9 billion on energy, roughly 76% of the entire federal government's energy expenditures, and roughly 2% of DOD's FY2017 budget. Energy efficiencyâproviding the same or an improved level of service with less energyâover time can lead to a reduction in agency expenses. DOD uses energy for a variety of purposes across the various services of the military. For example, DOD's efficient management of energy can also lead to less refueling and fewer fuel convoys. Reducing the frequency and duration of fueling in combat zones could reduce exposure and risk which could save lives. This report provides an introduction to federal energy management rules applicable to DOD. The report includes an overview of federal statutes and executive orders that govern DOD energy management, and presents data on the status and trends for DOD energy use. Further, the scope of this report excludes nuclear energy for the propulsion of aircraft carriers, submarines, and energy used for military space operations. The report also references agency level guiding documents that provide the basis for how DOD implements these policies. Finally, this report identifies selected considerations for Congress. DOD Energy Management Requirements Federal energy management requirements include reductions in fossil fuel consumption, increases in renewable energy use, and energy efficiency targets for government fleets and buildings. In addition to the energy management requirements that apply to federal agencies, DOD's energy policy is designed to ensure the readiness of U.S. armed forces through energy security and resilience. DOD, through statute (e.g., 10 U.S.C. Â§2922e), has authority to suspend certain requirements to meet established operational military demands. Legislation In the 1970s, Congress began mandating energy use reductions for federal agencies, directing agencies to improve the efficiency of buildings and facilities and reduce fossil fuel dependence. Legislation aimed at reducing federal agency energy consumption can be traced back to the Energy Policy and Conservation Act (EPCA, P.L. 94-163 ) as shown in Table 1 . Among other provisions, EPCA directed the President to implement a 10-year plan for energy conservation and efficiency standards for government procurement. In 1977, Congress passed into law an act establishing the Department of Energy ( P.L. 95-91 ). The following year, Congress enacted the National Energy Conservation Policy Act (NECPA, P.L. 95-619 ), which, among other actions, established a program to retrofit federal buildings to improve energy efficiency. The Energy Policy Act of 1992 (EPAct92, P.L. 102-486 ) amended NECPA and authorized alternative financing methods for federal energy projects, including energy savings performance contracts (ESPCs) and utility energy service contracts (UESCs), among other provisions. Since NECPA and EPAct92, two laws contain provisions that set energy management requirements for all federal agenciesâthe Energy Policy Act of 2005 (EPAct05, P.L. 109-58 ) and the Energy Independence and Security Act of 2007 (EISA, P.L. 110-140 ). EPAct05 and EISA amended and addressed additional energy management targets for the federal government, among other things. Federal agencies report energy consumption annually to the Department of Energy's (DOE) Federal Energy Management Program (FEMP). EISA Section 527 (42 U.S.C. Â§17143), requires federal agencies to report to the Office of Management and Budget (OMB) on the status and implementation of energy efficiency improvements, energy reduction costs, and greenhouse gas (GHG) emissions. Subsequently, EISA Section 528 (42 U.S.C. Â§17144) directs OMB to provide a summary of this information and an evaluation of progress for the federal government to the Committee on Oversight and Government Reform of the House of Representatives and the Committee on Governmental Affairs of the Senate. The Director of OMB compiles the compliance status of the EISA requirements and description of each into an agency scorecard. Appendix B contains a selected compilation of federal energy management requirements for all agencies. The annual National Defense Authorization Act (NDAA) has included provisions related to DOD energy management and authorities. For example, Congress, by enacting the Department of Defense Authorization Act for FY1985 ( P.L. 98-525 ), granted the Secretary of Defense waiver authority for the acquisition of petroleum. NDAA for FY2000 Section 803 ( P.L. 106-65 ) amended this waiver authority to extend beyond petroleum to "a defined fuel source." This authority permits the Secretary of Defense to waive any provision that would otherwise prescribe terms and conditions of a defined fuel purchase contract if market conditions have affected or will adversely affect the acquisition of the fuel source; and if the waiver will expedite acquisition for government needs (10 U.S.C. Â§2922e). With one exception, the NDAA for FY2018 ( P.L. 115-91 ), every NDAA since 1993 contains a section on "authorized energy conservation projects." For instance, NDAA for FY2007 ( P.L. 109-364 ) added a section regarding renewable energy production or procurement goals to 10 U.S.C. Â§2911. As amended by several NDAAs, this DOD specific goal requires DOD to consume 25% of total facility energy from renewable sources by FY2025 ( Appendix A ). Further, NDAAs have contributed to a number of internal DOD energy management protocols. For instance, the NDAA for FY2011 Section 2832 ( P.L. 111-383 ) directs the Secretary of Defense to develop an Energy Performance Master Plan (including metrics for measurement, use of a baseline standard, separate plans for each branch, etc.) to achieve performance goals set by law, executive orders, and DOD policies. The NDAA for FY2015 requires an annual report that certifies whether or not the President's budget is adequate to meet objectives of the Operational Energy Strategy as outlined in 10 U.S.C. 2926. NDAAs continue to address energy security and resilience for DOD. In 2018, for example, Congress enacted the NDAA for FY2019 ( P.L. 115-232 ), authorizing appropriations of $193 million for energy resilience and conservation investment programs. Multiple statutes, in addition to those above, establish the legislative authority for DOD energy management. Selected sections of the U.S. Code applicable to DOD energy management are delineated in Appendix A . Executive Orders Over several administrations, Presidents have issued executive orders to establish energy management guidelines and targets for the federal government. Executive orders applied specifically to government vehicles, buildings, and computer equipment. Since 1991, 12 executive orders have been issued on federal energy management ( Appendix C ). Only Executive Order 13834, "Efficient Federal Operations" (E.O. 13834), is currently in effect. All the others have been revoked by subsequent orders. On May 17, 2018, President Trump issued E.O. 13834, revoking E.O. 13693 and its specific targets for federal agencies. E.O. 13834 directs the heads of agencies to meet "statutory requirements in a manner that increases efficiency, optimizes performance, eliminates unnecessary use of resources, and protects the environment," but contains no specific targets. The White House Council on Environmental Quality Office of Federal Sustainability issued implementing instructions for E.O. 13834 in April 2019. The Office of Federal Sustainability's website provides resources, guidance documents, and reported energy performance data across federal agencies to support implementation of E.O. 13834. The Office of Federal Sustainability also lists other relevant U.S. code provisions, public laws, and other resources that federal agencies are required to follow. Agency Policies and Procedures DOD issues directives, memorandums, manuals, and guidance instructions to military departments and agencies on complying with statues and executive orders. For instance, DOD Instruction (DODI) 4170.11, Installation Energy Management, and DOD Directive (DODD) 4180.01, DOD Energy Policy , provide guidance for energy planning, use, implementation and management. These and other guidance documents outline best practices to meet federal goals within the context of the agency's mission, while giving flexibility to military departments for achieving goals. Military departments within DOD are tasked with following agency policies and procedures to issue internal energy strategies to meet the specific needs of their mission. The Energy Performance Master Plan tasks each military department and defense agency to develop their own master plans toward meeting federal requirements. Military departments can have their own goals and guiding documents within the parameters of statute and executive order (e.g., the Army's Energy Security and Sustainability Strategy or the Secretary of the Navy's Energy Goals). Further, 10 U.S.C. 2925 mandates DOD to submit to Congress two annual reports on the progress of meeting federal and executive energy targets: the Operational Energy Annual Report and the Annual Energy Management and Resilience Report (AEMRR), which includes the Energy Performance Master Plan. These reports compile energy use information from the various DOD departments on their progress toward meeting federal requirements. For federal-wide requirements, implementing instructions and guidance documents are often issued by DOE. For instance, EPAct05 has a renewable electricity consumption requirement of 7.5% for the federal government by FY2013. The President, acting through the Secretary of DOE, under Section 203 of EPAct05, is to ensure that the federal government meets the requirement. In order to ensure this, DOE issued guidance to federal agencies on how to meet the requirement. DOD Energy Status DOD categorizes energy as either "installation" or "operational." Installation energy refers to "energy needed to power fixed installations and enduring locations as well as non-tactical vehicles (NTVs)." Installation energy historically represents roughly 30% of DOD total energy and is subject to federal energy efficiency and conservation requirements, as reported to Congress in the AEMRR. In FY2017, DOD spent $3.48 billion on installation energy and NTV fuels. Operational energy (e.g., jet fuel) is "the energy required for training, moving, and sustaining military forces and weapons platforms for military operations and trainingâincluding energy used by tactical power systems and generators at non-enduring locations." Federal energy management requirements outlined in Appendix A and Appendix B do not apply to operational energy. However, under 10 U.S.C. 2926, DOD does have an operational energy policy to promote readiness of military missions. From FY2003 to FY2017 the federal government reduced total site-delivered energy use by 19.2% compared to the FY2003 baseline in all sectors. During the same time period, DOD reduced site-delivered energy use by 20.9%. While overall, DOD has reduced energy use, its energy use has not necessarily been consistent from one year to the next. For example, during the War in Iraq (FY2003 to FY2004), energy use increased from 895 trillion Btu to 960 trillion Btu, as shown in Figure 2 . Installation Energy Representing roughly 30% of DOD total energy use, installation energy is subject to federal energy management requirements. Federal energy management requirements include energy efficiency targets for government buildings, renewable energy use goals, and fossil fuel reductions for the NTV fleet. According to the AEMRR FY2017, energy and cost savings compared to an FY2005 baseline resulted in $5.67 billion in total savings through FY2017. The AEMRR also notes that the DOD increased installation energy consumption levels by 0.3% from FY2016 to FY2017. Building Efficiency 42 U.S.C. Â§8253(a) requires federal agencies to achieve a 30% reduction from FY2003 levels in energy consumption per gross square foot (GSF) for goal federal buildings by FY2015 ( Appendix B ). Goal buildings are federal buildings subject to federal energy performance requirements. DOD examples of goal buildings include the Army's Holston Ammunition Plant in Tennessee and the Navy's Camp Lemonnier in Djibouti. Excluded facilities are federal buildings not required to meet the federal building energy performance requirement for the fiscal year according to the criteria under Section 543(c)(3) of NECPA. Federal agencies may typically exclude buildings that have a dedicated energy process that overwhelms other building consumption, such as one designed for a national security function or for the storage of historical artifacts. DOD manages nearly 300,000 buildings, most of which are subject to federal energy management. In FY2015, DOD did not meet the 30% reduction target, as DOD reduced building energy intensity by 16.5% relative to FY2003 levels. In FY2017, DOD consumed 91,709 Btu/GSF, a 21.8% decrease from baseline FY2003. Increasing building efficiencies and reducing energy intensity can be supported through alternative funding mechanisms (e.g., ESPCs, UESCs, power purchase agreements). In FY2017, the Army, for example, awarded $289.3 million in ESPC and UESC projects estimated to save 1,132 billion Btu annually. According to the AEMRR FY2017, these projects could avoid costs of $17.2 million annually from the project savings. In addition to the energy efficiency requirement, EISA Section 433 requires federal agencies to reduce fossil fuel consumption in new or majorly renovated buildings ( Table B-1 ) by specified amounts. By FY2020, these buildings are supposed to reduce fossil fuel consumption by 80% relative to a similar building's consumption levels in FY2003. DOE proposed a rulemaking for comment on this legislation on October 15, 2010. However, the rulemaking was not finalized, and no further action has been taken since December 2014 when the comment period closed. DOD has not reported on this requirement. Renewables EPAct05 requires federal agencies to reach 7.5% total renewable electricity consumption by FY2013. According to implementing instructions to comply with EPAct05, agencies must maintain ownership of renewable energy credits (RECs). If DOD sells a REC to meet state requirements, and it is not replaced with another REC, then the renewable electricity DOD produced does not receive credit toward the EPAct05 goal. Within these reporting requirements, in FY2013, DOD reached 5% renewable electricity consumption, and in FY2017, DOD reached nearly 6% of total electricity consumption from renewables. Solar photovoltaic sources contributed to this increase reaching 627,783 megawatt-hours (MWh) up from 396,268 MWh in FY2016. RECs are created when a renewable source of energy generates a megawatt-hour of electricity. Each REC has a unique identification number and provides data (e.g., the resource type, service date, location, etc.) that is traceable and certifiable. RECs can be traded and have monetary value. They are used by utilities to comply with state renewable electricity standards. Thus, RECs can help improve the return on investment for renewable projects. The ownership of these credits is often a contract stipulation associated with the project for the developer. State and/or local renewable requirements play a role in determining the contract stipulations for the credit ownership. In addition to EPAct05 goal of 7.5% renewable electricity by FY2013, DOD in accordance with 10 U.S.C. Â§2911(g) is required to "produce or procure" 25% renewable energy (electrical and non-electrical) by FY2025. The purchasing of RECs is not mandatory for DOD to comply with this goal. DOD's 2011 Energy Performance Master Plan set an interim goal of 15% renewable energy consumption by FY2018. Under Â§2911(g), in FY2017 DOD's renewable energy consumption reached approximately 8.7% of total facility energy use. Non-Tactical Vehicles Fleet In FY2017, DOD consumed around 8,764 billion Btu of NTV fuel, roughly 4.3% of DOD installation energy. EISA requires federal vehicle fleets to reduce petroleum consumption from the FY2005 baseline by 20% no later than October 1, 2015 ( Appendix B ). In FY2015, DOD complied with the EISA target with a reduction in NTV fleet petroleum consumption of 27% compared to FY2005 baseline. DOD has continued to reduce installation vehicle fleet petroleum consumption and reached a 34.5% reduction in FY2017. At the branch level, the FY2017 AEMRR states that the Air Force experienced an increase of 9.3% in consumption compared to the FY2005 baseline. Despite this increase, the Air Force, according to the AEMRR, does continue to implement programs to reduce consumption and increase alternative fuel use in research and development. In addition to the petroleum consumption reduction goal, federal agencies under EISA are to increase alternative fuel consumption by 10% compared to a FY2005 baseline no later than October 1, 2015 ( Appendix B ). According to the Office of Federal Sustainability, DOD met the alternative fuel consumption target in FY2015 reaching 10.6% of total fuel consumption. However, in FY2017, DOD's alternative fuel consumption decreased to 9.4% of the total installation fleet fuel consumed. These requirements apply only to installation energy and do not apply to operational energy. Operational Energy Operational energy constitutes roughly 70% of DOD's total energy use. In FY2017, DOD spent $8.2 billion on operational energy expenditures. The largest portion of this came from jet fuel at nearly 394 trillion Btu or roughly 56% of total DOD energy consumption for FY2017. DOD depends on jet fuel and other petroleum products to perform mission operations. According to DOD's FY2017 Operational Energy Annual Report , from FY2013 to FY2017, total operational energy demand remained relatively stable, around 87 million barrels of fuel per year (roughly 500 trillion Btu), while the price of crude oil fluctuated. The price of oil declined by roughly 60% in 2014, which contributed to a decrease in fuel expenditures from $14.8 billion in FY2013 to $8.2 billion in FY2017, around a 45% reduction. DOD's efficient management of fuel can also lead fewer fuel convoys. Reducing the frequency and duration of fueling in combat zones could reduce exposure and risk which could save lives. According to a 2009 report by the Army Environmental Policy Institute, for every 24 fuel-related convoys in Afghanistan there was roughly one casualty. A challenge is balancing mission operations (i.e., increasing weapons systems and combat performance) while also increasing efficiency. Considerations for Congress Some questions Congress may be interested in considering include: What kind of federal energy efficiency requirements should DOD have for operational energy, if any? To what extent do federal energy management targets need to be updated? What role is there for Congress to clarify or provide oversight on implementing federal energy management goals? How are alternative financing mechanisms supporting DOD's attainment of federal energy management goals? To what extent should Congress support these mechanisms? Operational Energy As noted, existing statutory energy management goals do not apply to operational energy, but DOD's operational energy policy is mandated by 10 U.S.C. 2926. As part of the operational energy policy, DOD establishes a strategy including plans and performance metrics. Further, DOD is mandated to submit to Congress both a report on the strategy (Operational Energy Strategy) and a report certifying that the proposed Presidential budget supports the implementation of the strategy (Operational Energy Budget Certification Report). Operational energy comprises 70% of energy use within DOD, much of which consists of petroleum-based fuels. Federal energy management goals do not apply to most of DOD's energy use. Congress may consider setting mission priorities for DOD. Congress could also consider mandating whether or not DOD should prioritize energy access over energy conservation, or vice versa. While making operational equipment more fuel efficient could increase range and decrease refueling convoys, the challenge is how to prioritize maintaining combat readiness and mission operations. Congress may consider legislation addressing operational energy, such as setting a standard fuel efficiency target or a requirement for alternative fuel use. Congress may also consider continuing to leave operational energy efficiency goals to be determined by DOD or each military branch. While this option could provide more flexibility, it could also lead to some challenges. For instance, in 2009, Navy Secretary Ray Mabus announced plans for the Navy to consume half of all fuel from alternative sources by 2020 (see textbox on Secretary of the Navy Energy Goals). The announcement also included a 2016 goal to deploy a carrier strike group using alternative fuels (e.g., nuclear power, biofuels) and energy conservation measures, an initiative known as the Great Green Fleet. The Great Green Fleet deployed in 2016 and conducted operations using alternative fuels and energy-efficient technologies and operating procedures. Some critics of the Navy energy goals noted that the Navy implemented these energy targets based on limited analysis. For instance, a House Armed Services Committee hearing in March 2012 inquired how the Navy determined the 50% goal for biofuel use, how it was determined that 50% was the amount the Navy should have, whether it could be attained by 2020, and what metrics were used to make this determination. A 2011 study by Logistics Management Institute (LMI) was referenced as a source that outlined the attainability of the goal; however, it had been released two years after the announcement of the energy plan. Supporters of the Navy's energy goals noted the benefits of a more diverse fuel supply and utilizing domestically produced biofuels. DOD is subject to oil price volatility, as such a more diverse fuel supply could potentially reduce dependence on the volatile market (see textbox on Department of Defense Fuel Procurement). According to Assistant Secretary of the Navy, Energy, Installations, and Environment Jackalyne Pfannenstiel's 2012 testimony, "without more domestically produced fuels, the [Navy] will continue to be subjected to fuel price volatility and be compelled to trade training, facility sustainment, and needed programs to pay for unplanned bills." If Congress were to set a target, reporting data and status updates could also be included in legislation to provide increased accountability of these programs. According to a 2016 naval announcement, the alternative fuel used for the Great Green Fleet was cost competitive and was made from 10% beef tallow and 90% marine diesel. Adjusting Targets In many cases, federal energy management goals in statute or executive order established targets for FY2015 (e.g., EISA petroleum and alternative fuel consumption targets were due no later than October 1, 2015). Several agencies, including DOD, did not reach the targeted goals. Congress may consider establishing new targets. Alternatively, Congress may instead remove statutory targets altogether, instead directing heads of federal agencies to establish protocols that foster efficiency and cost reductions that serve the mission of the agency. Uniform Federal Energy Targets If given the flexibility, agencies may opt to set more easily attainable targets based on budget and mission needs, which may not have as much of an impact on total federal energy use. In March 2015, then-Secretary of Energy Ernest Moniz convened a Task Force of members from the private sector, universities, and nonprofit organizations to review various components of E.O. 13693, including target setting. The Task Force argued that setting energy goals across all agencies "may drive some agencies to over-invest in the targeted area of energy-performance improvement to the detriment of other operational priorities. Conversely, uniform energy goals may understate the potential for cost-effective investments in energy efficiency for other agencies." Primary agency concerns may include their potential cost and mission impact. Congress and agencies may have different perspectives regarding these concerns. Successful attainment of established targets have varied from agency to agency. Some agencies may inherently be more energy intensive than others and as such may face challenges financing projects to reach certain targets. Technology-Forcing Targets Leaving targets to agencies may provide some flexibility, as not all agencies have the same energy needs. Agencies might choose to set ambitious targets that some may consider too costly and may not be based on consistent data. In some cases, meeting targets could come at a high cost, particularly in the early stages of development. Some may argue that the high cost for early research and development (R&D) may be acceptable, especially if in the long term it drives costs down. If Congress were to direct DOD to set a standard, DOD may set a goal that could require additional R&D to develop equipment that meets the standard, but also does not diminish combat readiness. For instance, a test of the Great Green Fleet in the summer of 2012 reportedly cost the Navy nearly $27 a gallon for 450,000 gallons of biofuel. By 2016, the Navy achieved competitive prices with conventional fuels with a 90% diesel blend with 10% biofuel. The Navy reportedly contracted with a California firm to purchase 77 million gallons of biofuel from beef fat at $2.05, including a 15 cent per gallon subsidy. The 2016 DOE Task Force report also noted the historical role of the federal government as an adopter of new technologies, providing a faster pathway toward commercial viability. While this may not always be the most economic approach, it could provide a greater benefit to a technology's deployment into the commercial market. Baseline Modification Further, Congress may consider readjusting the baselines, as some argue that the baselines may not have been properly informed using consistent data. For instance, according to a 2014 DOE report, "goals must be based on well-informed estimates of savings potential." The 2014 DOE report recommended that several criteria should be taken into consideration when establishing a baseline, such as weather, data quality and availability, consistency of agency mission operations, and varying degrees of savings. The report also noted that perhaps a three-year average should be taken to set a baseline, as this helps reduce abnormal factors experienced in any particular year. If Congress establishes a new baseline, agency reporting data and perceived progress could be affected. For example, the DOE report explains, "using a more recent baseline yearâand setting a lower percent reduction goalâmay give the impression that the federal government is not doing enough to reduce energy use, when in fact significant reductions have already been made." Implementing Federal Requirements EISA Section 433 In regards to EISA Section 433, federal agencies are mandated to reduce fossil fuel consumption by 80% by FY2020, with an ultimate goal of 100% by FY2030. As noted, the rulemaking for this legislation has not been finalized. Without a finalized rule it is difficult to track and evaluate the progress toward this goal. DOD has not included this metric in annual reports. Congress may consider in its oversight role directing DOE to finalize this rule. Alternatively, Congress may consider updating the legislation, perhaps by either adjusting the targets, or removing the requirement entirely. While tracking energy management compliance may come at a cost (e.g., labor, data collecting, etc.), the data can be used to indicate progress toward greater efficiency and could demonstrate whether or not a program has proven effective and provided cost savings. The 2016 DOE Task Force report notes that one of the major challenges in evaluating the energy efficiency of projects in the federal government is the lack of data concerning, "building profiles, energy usage, and energy spending over time." Renewable Energy Credit Ownership Additionally, Congress may consider clarifying REC ownership in legislation, instead of directing DOE to issue guidance on qualifications to meet federal targets. For instance, DOE's implementation guidance for EPAct05 requires DOD and all federal agencies to retain ownership of RECs to count toward the 7.5% renewable electricity consumption goal. However, 10 U.S.C. Â§2911(g), a 25% renewable energy production goal for DOD, does not make purchasing RECs mandatory. Further, according to a 2016 Government Accountability Office (GAO) report, DOD project documentation of renewable energy goals was not always clear, especially when determining whether or not a project contributed toward a particular goal. If Congress opts to require DOD to maintain ownership of RECs to meet all relevant energy goals, proper data and measurement collection may be a factor to consider. Additionally, if Congress were to require agency ownership of RECs, DOD's progress toward 10 U.S.C. Â§2911(g) may decline. For instance, the 2016 GAO report reviewed documentation of 17 DOD renewable energy projects. All 17 projects contributed to 10 U.S.C. Â§2911(g), but 8 of those projects did not contribute to EPAct05. In practice, military services may not necessarily retain ownership of RECs associated with all projects. Some DOD services may find that relinquishing REC ownership is within the best interest of the service and the particular contract, despite not qualifying for the EPAct05 requirement. The Navy, for instance, has had difficulty meeting renewable energy consumption targets under EPAct05, noting in the FY2017 AEMRR : "The Navy's performance regarding the renewable electricity goal is a function of the strategic decision to allow other parties to monetize the value of RECs associated with its financed energy projects." In certain projects, military services might decide to relinquish REC ownership. In some instances of ESPC/UESC contracts, RECs can be leveraged to finance additional project improvements. Financing Mechanisms DOD has steadily decreased its buildings' energy intensity in response to mandated energy reduction goals through investment in energy conservation projects. One of the challenges DOD faces in meeting these targets is implementing appropriate financing mechanisms. ESPCs have become a preferred means of making energy efficiency improvements because, in part, funds do not have to be directly appropriated (or programmed). However, as Energy Savings Contractors (ESCOs) assume a certain risk in guaranteeing savings through ESPCs, the risk is factored into their cost. DOD has been increasing reliance on UESCs and ESPCs. With $2.9 billion awarded in FY2017, these contracts can assist with increasing efficiency and meeting renewable energy management goals without up-front appropriated funds for the investment. Congress may consider options to increase the effectiveness of these mechanisms in attaining federal energy management goals. Training One option may be to increase training and awareness of UESCs and ESPCs. A Senate Committee on Armed Services report ( S.Rept. 115-125 ) accompanying NDAA FY2018 ( S. 1519 ) directed the Secretary of Defense to assess ESPCs and the potential savings through increased training. DOD disagreed with the need for more training, noting in the AEMRR FY2017, "the financial risk is too high to implement these training improvements based on assumptions about future savings and therefore [DOD] will not commit limited resources to an assessment that would draw from efforts focused on energy resilience and mission assurance." Further, DOD has stated that training improvements do not necessarily guarantee behavioral changes that would contribute to energy and costs savings. It is difficult to determine project savings if data is not being collected appropriately and consistently. Eight reports since 2013 by GAO, DOD Inspector General (DOD IG), and U.S. Army Audit Agency evaluated challenges with DOD utilizing ESPCs. The recommendations highlighted a lack of developed guidance for ESPC training, data management, and contract administration. According to a summary DOD IG report in February 2019, the Assistant Secretary of Defense for Energy, Installation, and Environment, as well as Navy, Air Force, and DLA ESPC program managers, did not collect ESPC project data due to decentralization and not requesting performance and savings data, despite DOD instruction. Five reports noted that base contracting officials were not complying with the measurement and verification requirements under Section 432 of EISA for a number of reasons, including a lack of awareness of the requirements. Training and guidance for utilizing ESPCs and UESCs is provided to all federal agencies through FEMP. However, challenges remain. During a December 2018 House Committee on Energy and Commerce, Subcommittee on Energy hearing, Leslie Nicholls, Strategic Director for FEMP, noted that measurement and verification is "not necessarily consistently applied and utilized throughout the federal government." She further noted that FEMP would like to continue training both at the technical level and for contracting officers. As noted in the February 2019 DOD IG report, DOD branches were implementing the IG recommendations regarding ESPC guidance. Congress may consider the value of training and guidance for proper measurement and data verification, and whether better data would demonstrate accurate cost savings of ESPCs and USECs relative to the cost of training. Appendix A. Summary of DOD Energy Goals and Contracting Authority in 10 U.S.C. Â§ 2208. Working-capital funds (t) Permits up to $1,000,000,000 in Working Capital Fund, Defense for petroleum market volatility. Â§ 2 410q . Multiyear Contracts: Purchase of Electricity from Renewable Energy Sources (a) Multiyear Contracts Authorized: Authorizes the use of multiyear contracts for the Secretary of Defense for a period of 10 years from a renewable energy source, as defined in 42 U.S.C. 15852(b)(2). (b) Limitations on Contracts for Periods in Excess of Five Years: The Secretary of Defense may enter into a contract over five years on the basis that the contract is cost effective and purchasing electricity from the source would not be economic without a contract for over five years. (c) Relationship to Other Multiyear Contracting Authority: this section does not preclude DOD "from using other multiyear contracting authority of the Department to purchase renewable energy." Â§ 2911. Energy P olicy of the Department of Defense (a) General Energy Policy: directs the Secretary of Defense to "ensure the readiness of the armed forces for their military missions by pursuing energy security and energy resilience." (b) Authorities: permits the Secretary of Defense to establish metrics and standards for measuring energy resilience; authorizes the selection of facility energy projects using renewables, as well as "giving favorable consideration to projects that provide power directly to a military facility or into the installation electrical distribution network." (c) Energy Performance Goals: directs the Secretary of Defense to "submit to congressional defense committees energy performance goals" for DOD annually. (d) Energy Performance Master Plan: directs the Secretary of Defense to develop a plan annually (including metrics for measurement, use of a baseline standard, separate plans for each branch, etc.) to achieve the performance goals set by law, executive orders, and DOD policies. (e) Special Considerations: directs the Secretary of Defense to consider a set of specified factors (e.g., energy resilience, economies of scale, conservation measures) when developing the Performance Goals and Master Plan. (f) Selection of Energy Conservation Measures: the energy conservation measures are to be limited to ones that "are readily available; demonstrate an economic return on the investment; are consistent with the energy performance goals and energy performance master plan for the Department; and are supported by the special considerations specified in subsection (c)." (g) Goal Reg arding Use of Renewable Energy t o Meet Facility Energy Needs : "to produce or procure not less than 25 percent of the total quantity of facility energy it consumes within its facilities during fiscal year 2025 and each fiscal year thereafter from renewable energy sources." Â§ 2913. Energy Savings Contracts and Activities (a) Shared Energy Savings Contracts: directs the Secretary of Defense to develop a simple method to accelerate contracts for shared energy savings services. Â§Â§2922 -2922h. Energy-Related Procurement : outlines contracting and procurement specifications for various energy types (e.g., natural gas, renewables, fuel derived from coal). Â§ 2922e. Acquisition of C ertain F uel S ources: A uthority to W aive C ontract P rocedures; A cquisition by E xchange; S ales A uthority : permits the Secretary of Defense to waive any provision that would otherwise prescribe terms and conditions of a fuel purchase contract if market conditions have affected or will adversely affect the acquisition of the fuel source; and if the waiver will expedite the acquisition for government needs. Â§ 2 926 Operational Energy Activities: provides DOD with an operational energy policy; delineates authorities for operational energy procurement; establishes the role for the Assistant Secretary of Defense for Energy, Installations, and Environment (ASD EI&E); requires the ASD EI&E to establish an operational energy strategy and to review and make recommendations to the Secretary of Defense on budgetary operational energy matters, as well as grants access to records and studies on military initiatives related to operational energy. Appendix B. Summary of Federal Energy Goals and Contracting Authority in 42 U.S.C. Â§ 6374e. Federal Fleet Conservation R equirements : each federal agency is directed to increase alternative fuel use and decrease petroleum fuel consumption for federal fleets, with the goal of achieving a 10% increase in annual alternative fuels and a 20% reduction in annual petroleum consumption as compared to a FY2005 baseline by October 1, 2015. Â§ 6834 . Federal Building Energy Efficiency Standards : starting August 2006, if cost-effective over the life cycle, new federal buildings must be designed to achieve energy consumption levels at least 30% below ASHRAE Standard 90.1 (for commercial buildings) or the International Energy Conservation Code (for residential buildings). In addition, starting December 2008, new federal buildings and those undergoing major renovations are to be designed so that fossil fuel consumption is reduced by 80% in 2020 compared to a similar building in FY2003, and 100% by 2030, as specified in Table B-1 . Â§ 8253. Energy Management R equirements: directs federal agencies to reduce building energy consumption per square foot by 30% compared to the FY2003 baseline by FY2015. Â§ 8256(c) Utility Incentive Program: authorizes and encourages agency participation in programs (Utility Energy Savings Contracts, or UESCs) to "increase energy efficiency and for water conservation or the management of electricity demand conducted by gas, water, or electric utilities and generally available to customers of such utilities." Â§ 8287. Authority to Enter into Contracts: authorizes the head of a federal agency to enter Energy Savings Performance Contracts (ESPCs). Each contract may be for a period not to exceed 25 years. The contract directs the contractor to incur the costs of energy savings measures, in exchange for a share of the savings resulting from the measures taken. Â§ 13212. Minimum Federal Fleet Requirement : the total percentage of alternative-fueled or "low greenhouse gas emitting" light-duty vehicles acquired by a federal fleet annually are 75% in FY1999 and thereafter. Â§ 15852 . Federal Purchase Requirement : the President, acting through the Secretary of Energy, is directed to "ensure that, to the extent economically feasible and technically practicable, of the total amount of electric energy the Federal Government consumes during any fiscal year" not less than 7.5% is renewable energy in FY2013 and each fiscal year thereafter. Â§ 16122. Federal and State P rocurement of Fuel Cell V ehicles and Hydrogen E nergy S ystems : requires the federal government to adopt fuel cell vehicles and hydrogen energy systems as soon as practicable. Appendix C. Executive Orders Summary:	null	96	41,522	41,524	41,524	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The federal government is the largest energy consumer in the United States. Within the federal government, the U.S. Department of Defense (DOD) consumes more energy than any other agency. In FY2017, DOD consumed 707.9 trillion British thermal units (Btu) of energyâroughly 16 times that of the second largest consumer in the federal government, the U.S. Postal Service ( Figure 1 ). In FY2017, DOD spent approximately $11.9 billion on energy, roughly 76% of the entire federal government's energy expenditures, and roughly 2% of DOD's FY2017 budget. Energy efficiencyâproviding the same or an improved level of service with less energyâover time can lead to a reduction in agency expenses. DOD uses energy for a variety of purposes across the various services of the military. For example, DOD's efficient management of energy can also lead to less refueling and fewer fuel convoys. Reducing the frequency and duration of fueling in combat zones could reduce exposure and risk which could save lives. This report provides an introduction to federal energy management rules applicable to DOD. The report includes an overview of federal statutes and executive orders that govern DOD energy management, and presents data on the status and trends for DOD energy use. Further, the scope of this report excludes nuclear energy for the propulsion of aircraft carriers, submarines, and energy used for military space operations. The report also references agency level guiding documents that provide the basis for how DOD implements these policies. Finally, this report identifies selected considerations for Congress. DOD Energy Management Requirements Federal energy management requirements include reductions in fossil fuel consumption, increases in renewable energy use, and energy efficiency targets for government fleets and buildings. In addition to the energy management requirements that apply to federal agencies, DOD's energy policy is designed to ensure the readiness of U.S. armed forces through energy security and resilience. DOD, through statute (e.g., 10 U.S.C. Â§2922e), has authority to suspend certain requirements to meet established operational military demands. Legislation In the 1970s, Congress began mandating energy use reductions for federal agencies, directing agencies to improve the efficiency of buildings and facilities and reduce fossil fuel dependence. Legislation aimed at reducing federal agency energy consumption can be traced back to the Energy Policy and Conservation Act (EPCA, P.L. 94-163 ) as shown in Table 1 . Among other provisions, EPCA directed the President to implement a 10-year plan for energy conservation and efficiency standards for government procurement. In 1977, Congress passed into law an act establishing the Department of Energy ( P.L. 95-91 ). The following year, Congress enacted the National Energy Conservation Policy Act (NECPA, P.L. 95-619 ), which, among other actions, established a program to retrofit federal buildings to improve energy efficiency. The Energy Policy Act of 1992 (EPAct92, P.L. 102-486 ) amended NECPA and authorized alternative financing methods for federal energy projects, including energy savings performance contracts (ESPCs) and utility energy service contracts (UESCs), among other provisions. Since NECPA and EPAct92, two laws contain provisions that set energy management requirements for all federal agenciesâthe Energy Policy Act of 2005 (EPAct05, P.L. 109-58 ) and the Energy Independence and Security Act of 2007 (EISA, P.L. 110-140 ). EPAct05 and EISA amended and addressed additional energy management targets for the federal government, among other things. Federal agencies report energy consumption annually to the Department of Energy's (DOE) Federal Energy Management Program (FEMP). EISA Section 527 (42 U.S.C. Â§17143), requires federal agencies to report to the Office of Management and Budget (OMB) on the status and implementation of energy efficiency improvements, energy reduction costs, and greenhouse gas (GHG) emissions. Subsequently, EISA Section 528 (42 U.S.C. Â§17144) directs OMB to provide a summary of this information and an evaluation of progress for the federal government to the Committee on Oversight and Government Reform of the House of Representatives and the Committee on Governmental Affairs of the Senate. The Director of OMB compiles the compliance status of the EISA requirements and description of each into an agency scorecard. Appendix B contains a selected compilation of federal energy management requirements for all agencies. The annual National Defense Authorization Act (NDAA) has included provisions related to DOD energy management and authorities. For example, Congress, by enacting the Department of Defense Authorization Act for FY1985 ( P.L. 98-525 ), granted the Secretary of Defense waiver authority for the acquisition of petroleum. NDAA for FY2000 Section 803 ( P.L. 106-65 ) amended this waiver authority to extend beyond petroleum to "a defined fuel source." This authority permits the Secretary of Defense to waive any provision that would otherwise prescribe terms and conditions of a defined fuel purchase contract if market conditions have affected or will adversely affect the acquisition of the fuel source; and if the waiver will expedite acquisition for government needs (10 U.S.C. Â§2922e). With one exception, the NDAA for FY2018 ( P.L. 115-91 ), every NDAA since 1993 contains a section on "authorized energy conservation projects." For instance, NDAA for FY2007 ( P.L. 109-364 ) added a section regarding renewable energy production or procurement goals to 10 U.S.C. Â§2911. As amended by several NDAAs, this DOD specific goal requires DOD to consume 25% of total facility energy from renewable sources by FY2025 ( Appendix A ). Further, NDAAs have contributed to a number of internal DOD energy management protocols. For instance, the NDAA for FY2011 Section 2832 ( P.L. 111-383 ) directs the Secretary of Defense to develop an Energy Performance Master Plan (including metrics for measurement, use of a baseline standard, separate plans for each branch, etc.) to achieve performance goals set by law, executive orders, and DOD policies. The NDAA for FY2015 requires an annual report that certifies whether or not the President's budget is adequate to meet objectives of the Operational Energy Strategy as outlined in 10 U.S.C. 2926. NDAAs continue to address energy security and resilience for DOD. In 2018, for example, Congress enacted the NDAA for FY2019 ( P.L. 115-232 ), authorizing appropriations of $193 million for energy resilience and conservation investment programs. Multiple statutes, in addition to those above, establish the legislative authority for DOD energy management. Selected sections of the U.S. Code applicable to DOD energy management are delineated in Appendix A . Executive Orders Over several administrations, Presidents have issued executive orders to establish energy management guidelines and targets for the federal government. Executive orders applied specifically to government vehicles, buildings, and computer equipment. Since 1991, 12 executive orders have been issued on federal energy management ( Appendix C ). Only Executive Order 13834, "Efficient Federal Operations" (E.O. 13834), is currently in effect. All the others have been revoked by subsequent orders. On May 17, 2018, President Trump issued E.O. 13834, revoking E.O. 13693 and its specific targets for federal agencies. E.O. 13834 directs the heads of agencies to meet "statutory requirements in a manner that increases efficiency, optimizes performance, eliminates unnecessary use of resources, and protects the environment," but contains no specific targets. The White House Council on Environmental Quality Office of Federal Sustainability issued implementing instructions for E.O. 13834 in April 2019. The Office of Federal Sustainability's website provides resources, guidance documents, and reported energy performance data across federal agencies to support implementation of E.O. 13834. The Office of Federal Sustainability also lists other relevant U.S. code provisions, public laws, and other resources that federal agencies are required to follow. Agency Policies and Procedures DOD issues directives, memorandums, manuals, and guidance instructions to military departments and agencies on complying with statues and executive orders. For instance, DOD Instruction (DODI) 4170.11, Installation Energy Management, and DOD Directive (DODD) 4180.01, DOD Energy Policy , provide guidance for energy planning, use, implementation and management. These and other guidance documents outline best practices to meet federal goals within the context of the agency's mission, while giving flexibility to military departments for achieving goals. Military departments within DOD are tasked with following agency policies and procedures to issue internal energy strategies to meet the specific needs of their mission. The Energy Performance Master Plan tasks each military department and defense agency to develop their own master plans toward meeting federal requirements. Military departments can have their own goals and guiding documents within the parameters of statute and executive order (e.g., the Army's Energy Security and Sustainability Strategy or the Secretary of the Navy's Energy Goals). Further, 10 U.S.C. 2925 mandates DOD to submit to Congress two annual reports on the progress of meeting federal and executive energy targets: the Operational Energy Annual Report and the Annual Energy Management and Resilience Report (AEMRR), which includes the Energy Performance Master Plan. These reports compile energy use information from the various DOD departments on their progress toward meeting federal requirements. For federal-wide requirements, implementing instructions and guidance documents are often issued by DOE. For instance, EPAct05 has a renewable electricity consumption requirement of 7.5% for the federal government by FY2013. The President, acting through the Secretary of DOE, under Section 203 of EPAct05, is to ensure that the federal government meets the requirement. In order to ensure this, DOE issued guidance to federal agencies on how to meet the requirement. DOD Energy Status DOD categorizes energy as either "installation" or "operational." Installation energy refers to "energy needed to power fixed installations and enduring locations as well as non-tactical vehicles (NTVs)." Installation energy historically represents roughly 30% of DOD total energy and is subject to federal energy efficiency and conservation requirements, as reported to Congress in the AEMRR. In FY2017, DOD spent $3.48 billion on installation energy and NTV fuels. Operational energy (e.g., jet fuel) is "the energy required for training, moving, and sustaining military forces and weapons platforms for military operations and trainingâincluding energy used by tactical power systems and generators at non-enduring locations." Federal energy management requirements outlined in Appendix A and Appendix B do not apply to operational energy. However, under 10 U.S.C. 2926, DOD does have an operational energy policy to promote readiness of military missions. From FY2003 to FY2017 the federal government reduced total site-delivered energy use by 19.2% compared to the FY2003 baseline in all sectors. During the same time period, DOD reduced site-delivered energy use by 20.9%. While overall, DOD has reduced energy use, its energy use has not necessarily been consistent from one year to the next. For example, during the War in Iraq (FY2003 to FY2004), energy use increased from 895 trillion Btu to 960 trillion Btu, as shown in Figure 2 . Installation Energy Representing roughly 30% of DOD total energy use, installation energy is subject to federal energy management requirements. Federal energy management requirements include energy efficiency targets for government buildings, renewable energy use goals, and fossil fuel reductions for the NTV fleet. According to the AEMRR FY2017, energy and cost savings compared to an FY2005 baseline resulted in $5.67 billion in total savings through FY2017. The AEMRR also notes that the DOD increased installation energy consumption levels by 0.3% from FY2016 to FY2017. Building Efficiency 42 U.S.C. Â§8253(a) requires federal agencies to achieve a 30% reduction from FY2003 levels in energy consumption per gross square foot (GSF) for goal federal buildings by FY2015 ( Appendix B ). Goal buildings are federal buildings subject to federal energy performance requirements. DOD examples of goal buildings include the Army's Holston Ammunition Plant in Tennessee and the Navy's Camp Lemonnier in Djibouti. Excluded facilities are federal buildings not required to meet the federal building energy performance requirement for the fiscal year according to the criteria under Section 543(c)(3) of NECPA. Federal agencies may typically exclude buildings that have a dedicated energy process that overwhelms other building consumption, such as one designed for a national security function or for the storage of historical artifacts. DOD manages nearly 300,000 buildings, most of which are subject to federal energy management. In FY2015, DOD did not meet the 30% reduction target, as DOD reduced building energy intensity by 16.5% relative to FY2003 levels. In FY2017, DOD consumed 91,709 Btu/GSF, a 21.8% decrease from baseline FY2003. Increasing building efficiencies and reducing energy intensity can be supported through alternative funding mechanisms (e.g., ESPCs, UESCs, power purchase agreements). In FY2017, the Army, for example, awarded $289.3 million in ESPC and UESC projects estimated to save 1,132 billion Btu annually. According to the AEMRR FY2017, these projects could avoid costs of $17.2 million annually from the project savings. In addition to the energy efficiency requirement, EISA Section 433 requires federal agencies to reduce fossil fuel consumption in new or majorly renovated buildings ( Table B-1 ) by specified amounts. By FY2020, these buildings are supposed to reduce fossil fuel consumption by 80% relative to a similar building's consumption levels in FY2003. DOE proposed a rulemaking for comment on this legislation on October 15, 2010. However, the rulemaking was not finalized, and no further action has been taken since December 2014 when the comment period closed. DOD has not reported on this requirement. Renewables EPAct05 requires federal agencies to reach 7.5% total renewable electricity consumption by FY2013. According to implementing instructions to comply with EPAct05, agencies must maintain ownership of renewable energy credits (RECs). If DOD sells a REC to meet state requirements, and it is not replaced with another REC, then the renewable electricity DOD produced does not receive credit toward the EPAct05 goal. Within these reporting requirements, in FY2013, DOD reached 5% renewable electricity consumption, and in FY2017, DOD reached nearly 6% of total electricity consumption from renewables. Solar photovoltaic sources contributed to this increase reaching 627,783 megawatt-hours (MWh) up from 396,268 MWh in FY2016. RECs are created when a renewable source of energy generates a megawatt-hour of electricity. Each REC has a unique identification number and provides data (e.g., the resource type, service date, location, etc.) that is traceable and certifiable. RECs can be traded and have monetary value. They are used by utilities to comply with state renewable electricity standards. Thus, RECs can help improve the return on investment for renewable projects. The ownership of these credits is often a contract stipulation associated with the project for the developer. State and/or local renewable requirements play a role in determining the contract stipulations for the credit ownership. In addition to EPAct05 goal of 7.5% renewable electricity by FY2013, DOD in accordance with 10 U.S.C. Â§2911(g) is required to "produce or procure" 25% renewable energy (electrical and non-electrical) by FY2025. The purchasing of RECs is not mandatory for DOD to comply with this goal. DOD's 2011 Energy Performance Master Plan set an interim goal of 15% renewable energy consumption by FY2018. Under Â§2911(g), in FY2017 DOD's renewable energy consumption reached approximately 8.7% of total facility energy use. Non-Tactical Vehicles Fleet In FY2017, DOD consumed around 8,764 billion Btu of NTV fuel, roughly 4.3% of DOD installation energy. EISA requires federal vehicle fleets to reduce petroleum consumption from the FY2005 baseline by 20% no later than October 1, 2015 ( Appendix B ). In FY2015, DOD complied with the EISA target with a reduction in NTV fleet petroleum consumption of 27% compared to FY2005 baseline. DOD has continued to reduce installation vehicle fleet petroleum consumption and reached a 34.5% reduction in FY2017. At the branch level, the FY2017 AEMRR states that the Air Force experienced an increase of 9.3% in consumption compared to the FY2005 baseline. Despite this increase, the Air Force, according to the AEMRR, does continue to implement programs to reduce consumption and increase alternative fuel use in research and development. In addition to the petroleum consumption reduction goal, federal agencies under EISA are to increase alternative fuel consumption by 10% compared to a FY2005 baseline no later than October 1, 2015 ( Appendix B ). According to the Office of Federal Sustainability, DOD met the alternative fuel consumption target in FY2015 reaching 10.6% of total fuel consumption. However, in FY2017, DOD's alternative fuel consumption decreased to 9.4% of the total installation fleet fuel consumed. These requirements apply only to installation energy and do not apply to operational energy. Operational Energy Operational energy constitutes roughly 70% of DOD's total energy use. In FY2017, DOD spent $8.2 billion on operational energy expenditures. The largest portion of this came from jet fuel at nearly 394 trillion Btu or roughly 56% of total DOD energy consumption for FY2017. DOD depends on jet fuel and other petroleum products to perform mission operations. According to DOD's FY2017 Operational Energy Annual Report , from FY2013 to FY2017, total operational energy demand remained relatively stable, around 87 million barrels of fuel per year (roughly 500 trillion Btu), while the price of crude oil fluctuated. The price of oil declined by roughly 60% in 2014, which contributed to a decrease in fuel expenditures from $14.8 billion in FY2013 to $8.2 billion in FY2017, around a 45% reduction. DOD's efficient management of fuel can also lead fewer fuel convoys. Reducing the frequency and duration of fueling in combat zones could reduce exposure and risk which could save lives. According to a 2009 report by the Army Environmental Policy Institute, for every 24 fuel-related convoys in Afghanistan there was roughly one casualty. A challenge is balancing mission operations (i.e., increasing weapons systems and combat performance) while also increasing efficiency. Considerations for Congress Some questions Congress may be interested in considering include: What kind of federal energy efficiency requirements should DOD have for operational energy, if any? To what extent do federal energy management targets need to be updated? What role is there for Congress to clarify or provide oversight on implementing federal energy management goals? How are alternative financing mechanisms supporting DOD's attainment of federal energy management goals? To what extent should Congress support these mechanisms? Operational Energy As noted, existing statutory energy management goals do not apply to operational energy, but DOD's operational energy policy is mandated by 10 U.S.C. 2926. As part of the operational energy policy, DOD establishes a strategy including plans and performance metrics. Further, DOD is mandated to submit to Congress both a report on the strategy (Operational Energy Strategy) and a report certifying that the proposed Presidential budget supports the implementation of the strategy (Operational Energy Budget Certification Report). Operational energy comprises 70% of energy use within DOD, much of which consists of petroleum-based fuels. Federal energy management goals do not apply to most of DOD's energy use. Congress may consider setting mission priorities for DOD. Congress could also consider mandating whether or not DOD should prioritize energy access over energy conservation, or vice versa. While making operational equipment more fuel efficient could increase range and decrease refueling convoys, the challenge is how to prioritize maintaining combat readiness and mission operations. Congress may consider legislation addressing operational energy, such as setting a standard fuel efficiency target or a requirement for alternative fuel use. Congress may also consider continuing to leave operational energy efficiency goals to be determined by DOD or each military branch. While this option could provide more flexibility, it could also lead to some challenges. For instance, in 2009, Navy Secretary Ray Mabus announced plans for the Navy to consume half of all fuel from alternative sources by 2020 (see textbox on Secretary of the Navy Energy Goals). The announcement also included a 2016 goal to deploy a carrier strike group using alternative fuels (e.g., nuclear power, biofuels) and energy conservation measures, an initiative known as the Great Green Fleet. The Great Green Fleet deployed in 2016 and conducted operations using alternative fuels and energy-efficient technologies and operating procedures. Some critics of the Navy energy goals noted that the Navy implemented these energy targets based on limited analysis. For instance, a House Armed Services Committee hearing in March 2012 inquired how the Navy determined the 50% goal for biofuel use, how it was determined that 50% was the amount the Navy should have, whether it could be attained by 2020, and what metrics were used to make this determination. A 2011 study by Logistics Management Institute (LMI) was referenced as a source that outlined the attainability of the goal; however, it had been released two years after the announcement of the energy plan. Supporters of the Navy's energy goals noted the benefits of a more diverse fuel supply and utilizing domestically produced biofuels. DOD is subject to oil price volatility, as such a more diverse fuel supply could potentially reduce dependence on the volatile market (see textbox on Department of Defense Fuel Procurement). According to Assistant Secretary of the Navy, Energy, Installations, and Environment Jackalyne Pfannenstiel's 2012 testimony, "without more domestically produced fuels, the [Navy] will continue to be subjected to fuel price volatility and be compelled to trade training, facility sustainment, and needed programs to pay for unplanned bills." If Congress were to set a target, reporting data and status updates could also be included in legislation to provide increased accountability of these programs. According to a 2016 naval announcement, the alternative fuel used for the Great Green Fleet was cost competitive and was made from 10% beef tallow and 90% marine diesel. Adjusting Targets In many cases, federal energy management goals in statute or executive order established targets for FY2015 (e.g., EISA petroleum and alternative fuel consumption targets were due no later than October 1, 2015). Several agencies, including DOD, did not reach the targeted goals. Congress may consider establishing new targets. Alternatively, Congress may instead remove statutory targets altogether, instead directing heads of federal agencies to establish protocols that foster efficiency and cost reductions that serve the mission of the agency. Uniform Federal Energy Targets If given the flexibility, agencies may opt to set more easily attainable targets based on budget and mission needs, which may not have as much of an impact on total federal energy use. In March 2015, then-Secretary of Energy Ernest Moniz convened a Task Force of members from the private sector, universities, and nonprofit organizations to review various components of E.O. 13693, including target setting. The Task Force argued that setting energy goals across all agencies "may drive some agencies to over-invest in the targeted area of energy-performance improvement to the detriment of other operational priorities. Conversely, uniform energy goals may understate the potential for cost-effective investments in energy efficiency for other agencies." Primary agency concerns may include their potential cost and mission impact. Congress and agencies may have different perspectives regarding these concerns. Successful attainment of established targets have varied from agency to agency. Some agencies may inherently be more energy intensive than others and as such may face challenges financing projects to reach certain targets. Technology-Forcing Targets Leaving targets to agencies may provide some flexibility, as not all agencies have the same energy needs. Agencies might choose to set ambitious targets that some may consider too costly and may not be based on consistent data. In some cases, meeting targets could come at a high cost, particularly in the early stages of development. Some may argue that the high cost for early research and development (R&D) may be acceptable, especially if in the long term it drives costs down. If Congress were to direct DOD to set a standard, DOD may set a goal that could require additional R&D to develop equipment that meets the standard, but also does not diminish combat readiness. For instance, a test of the Great Green Fleet in the summer of 2012 reportedly cost the Navy nearly $27 a gallon for 450,000 gallons of biofuel. By 2016, the Navy achieved competitive prices with conventional fuels with a 90% diesel blend with 10% biofuel. The Navy reportedly contracted with a California firm to purchase 77 million gallons of biofuel from beef fat at $2.05, including a 15 cent per gallon subsidy. The 2016 DOE Task Force report also noted the historical role of the federal government as an adopter of new technologies, providing a faster pathway toward commercial viability. While this may not always be the most economic approach, it could provide a greater benefit to a technology's deployment into the commercial market. Baseline Modification Further, Congress may consider readjusting the baselines, as some argue that the baselines may not have been properly informed using consistent data. For instance, according to a 2014 DOE report, "goals must be based on well-informed estimates of savings potential." The 2014 DOE report recommended that several criteria should be taken into consideration when establishing a baseline, such as weather, data quality and availability, consistency of agency mission operations, and varying degrees of savings. The report also noted that perhaps a three-year average should be taken to set a baseline, as this helps reduce abnormal factors experienced in any particular year. If Congress establishes a new baseline, agency reporting data and perceived progress could be affected. For example, the DOE report explains, "using a more recent baseline yearâand setting a lower percent reduction goalâmay give the impression that the federal government is not doing enough to reduce energy use, when in fact significant reductions have already been made." Implementing Federal Requirements EISA Section 433 In regards to EISA Section 433, federal agencies are mandated to reduce fossil fuel consumption by 80% by FY2020, with an ultimate goal of 100% by FY2030. As noted, the rulemaking for this legislation has not been finalized. Without a finalized rule it is difficult to track and evaluate the progress toward this goal. DOD has not included this metric in annual reports. Congress may consider in its oversight role directing DOE to finalize this rule. Alternatively, Congress may consider updating the legislation, perhaps by either adjusting the targets, or removing the requirement entirely. While tracking energy management compliance may come at a cost (e.g., labor, data collecting, etc.), the data can be used to indicate progress toward greater efficiency and could demonstrate whether or not a program has proven effective and provided cost savings. The 2016 DOE Task Force report notes that one of the major challenges in evaluating the energy efficiency of projects in the federal government is the lack of data concerning, "building profiles, energy usage, and energy spending over time." Renewable Energy Credit Ownership Additionally, Congress may consider clarifying REC ownership in legislation, instead of directing DOE to issue guidance on qualifications to meet federal targets. For instance, DOE's implementation guidance for EPAct05 requires DOD and all federal agencies to retain ownership of RECs to count toward the 7.5% renewable electricity consumption goal. However, 10 U.S.C. Â§2911(g), a 25% renewable energy production goal for DOD, does not make purchasing RECs mandatory. Further, according to a 2016 Government Accountability Office (GAO) report, DOD project documentation of renewable energy goals was not always clear, especially when determining whether or not a project contributed toward a particular goal. If Congress opts to require DOD to maintain ownership of RECs to meet all relevant energy goals, proper data and measurement collection may be a factor to consider. Additionally, if Congress were to require agency ownership of RECs, DOD's progress toward 10 U.S.C. Â§2911(g) may decline. For instance, the 2016 GAO report reviewed documentation of 17 DOD renewable energy projects. All 17 projects contributed to 10 U.S.C. Â§2911(g), but 8 of those projects did not contribute to EPAct05. In practice, military services may not necessarily retain ownership of RECs associated with all projects. Some DOD services may find that relinquishing REC ownership is within the best interest of the service and the particular contract, despite not qualifying for the EPAct05 requirement. The Navy, for instance, has had difficulty meeting renewable energy consumption targets under EPAct05, noting in the FY2017 AEMRR : "The Navy's performance regarding the renewable electricity goal is a function of the strategic decision to allow other parties to monetize the value of RECs associated with its financed energy projects." In certain projects, military services might decide to relinquish REC ownership. In some instances of ESPC/UESC contracts, RECs can be leveraged to finance additional project improvements. Financing Mechanisms DOD has steadily decreased its buildings' energy intensity in response to mandated energy reduction goals through investment in energy conservation projects. One of the challenges DOD faces in meeting these targets is implementing appropriate financing mechanisms. ESPCs have become a preferred means of making energy efficiency improvements because, in part, funds do not have to be directly appropriated (or programmed). However, as Energy Savings Contractors (ESCOs) assume a certain risk in guaranteeing savings through ESPCs, the risk is factored into their cost. DOD has been increasing reliance on UESCs and ESPCs. With $2.9 billion awarded in FY2017, these contracts can assist with increasing efficiency and meeting renewable energy management goals without up-front appropriated funds for the investment. Congress may consider options to increase the effectiveness of these mechanisms in attaining federal energy management goals. Training One option may be to increase training and awareness of UESCs and ESPCs. A Senate Committee on Armed Services report ( S.Rept. 115-125 ) accompanying NDAA FY2018 ( S. 1519 ) directed the Secretary of Defense to assess ESPCs and the potential savings through increased training. DOD disagreed with the need for more training, noting in the AEMRR FY2017, "the financial risk is too high to implement these training improvements based on assumptions about future savings and therefore [DOD] will not commit limited resources to an assessment that would draw from efforts focused on energy resilience and mission assurance." Further, DOD has stated that training improvements do not necessarily guarantee behavioral changes that would contribute to energy and costs savings. It is difficult to determine project savings if data is not being collected appropriately and consistently. Eight reports since 2013 by GAO, DOD Inspector General (DOD IG), and U.S. Army Audit Agency evaluated challenges with DOD utilizing ESPCs. The recommendations highlighted a lack of developed guidance for ESPC training, data management, and contract administration. According to a summary DOD IG report in February 2019, the Assistant Secretary of Defense for Energy, Installation, and Environment, as well as Navy, Air Force, and DLA ESPC program managers, did not collect ESPC project data due to decentralization and not requesting performance and savings data, despite DOD instruction. Five reports noted that base contracting officials were not complying with the measurement and verification requirements under Section 432 of EISA for a number of reasons, including a lack of awareness of the requirements. Training and guidance for utilizing ESPCs and UESCs is provided to all federal agencies through FEMP. However, challenges remain. During a December 2018 House Committee on Energy and Commerce, Subcommittee on Energy hearing, Leslie Nicholls, Strategic Director for FEMP, noted that measurement and verification is "not necessarily consistently applied and utilized throughout the federal government." She further noted that FEMP would like to continue training both at the technical level and for contracting officers. As noted in the February 2019 DOD IG report, DOD branches were implementing the IG recommendations regarding ESPC guidance. Congress may consider the value of training and guidance for proper measurement and data verification, and whether better data would demonstrate accurate cost savings of ESPCs and USECs relative to the cost of training. Appendix A. Summary of DOD Energy Goals and Contracting Authority in 10 U.S.C. Â§ 2208. Working-capital funds (t) Permits up to $1,000,000,000 in Working Capital Fund, Defense for petroleum market volatility. Â§ 2 410q . Multiyear Contracts: Purchase of Electricity from Renewable Energy Sources (a) Multiyear Contracts Authorized: Authorizes the use of multiyear contracts for the Secretary of Defense for a period of 10 years from a renewable energy source, as defined in 42 U.S.C. 15852(b)(2). (b) Limitations on Contracts for Periods in Excess of Five Years: The Secretary of Defense may enter into a contract over five years on the basis that the contract is cost effective and purchasing electricity from the source would not be economic without a contract for over five years. (c) Relationship to Other Multiyear Contracting Authority: this section does not preclude DOD "from using other multiyear contracting authority of the Department to purchase renewable energy." Â§ 2911. Energy P olicy of the Department of Defense (a) General Energy Policy: directs the Secretary of Defense to "ensure the readiness of the armed forces for their military missions by pursuing energy security and energy resilience." (b) Authorities: permits the Secretary of Defense to establish metrics and standards for measuring energy resilience; authorizes the selection of facility energy projects using renewables, as well as "giving favorable consideration to projects that provide power directly to a military facility or into the installation electrical distribution network." (c) Energy Performance Goals: directs the Secretary of Defense to "submit to congressional defense committees energy performance goals" for DOD annually. (d) Energy Performance Master Plan: directs the Secretary of Defense to develop a plan annually (including metrics for measurement, use of a baseline standard, separate plans for each branch, etc.) to achieve the performance goals set by law, executive orders, and DOD policies. (e) Special Considerations: directs the Secretary of Defense to consider a set of specified factors (e.g., energy resilience, economies of scale, conservation measures) when developing the Performance Goals and Master Plan. (f) Selection of Energy Conservation Measures: the energy conservation measures are to be limited to ones that "are readily available; demonstrate an economic return on the investment; are consistent with the energy performance goals and energy performance master plan for the Department; and are supported by the special considerations specified in subsection (c)." (g) Goal Reg arding Use of Renewable Energy t o Meet Facility Energy Needs : "to produce or procure not less than 25 percent of the total quantity of facility energy it consumes within its facilities during fiscal year 2025 and each fiscal year thereafter from renewable energy sources." Â§ 2913. Energy Savings Contracts and Activities (a) Shared Energy Savings Contracts: directs the Secretary of Defense to develop a simple method to accelerate contracts for shared energy savings services. Â§Â§2922 -2922h. Energy-Related Procurement : outlines contracting and procurement specifications for various energy types (e.g., natural gas, renewables, fuel derived from coal). Â§ 2922e. Acquisition of C ertain F uel S ources: A uthority to W aive C ontract P rocedures; A cquisition by E xchange; S ales A uthority : permits the Secretary of Defense to waive any provision that would otherwise prescribe terms and conditions of a fuel purchase contract if market conditions have affected or will adversely affect the acquisition of the fuel source; and if the waiver will expedite the acquisition for government needs. Â§ 2 926 Operational Energy Activities: provides DOD with an operational energy policy; delineates authorities for operational energy procurement; establishes the role for the Assistant Secretary of Defense for Energy, Installations, and Environment (ASD EI&E); requires the ASD EI&E to establish an operational energy strategy and to review and make recommendations to the Secretary of Defense on budgetary operational energy matters, as well as grants access to records and studies on military initiatives related to operational energy. Appendix B. Summary of Federal Energy Goals and Contracting Authority in 42 U.S.C. Â§ 6374e. Federal Fleet Conservation R equirements : each federal agency is directed to increase alternative fuel use and decrease petroleum fuel consumption for federal fleets, with the goal of achieving a 10% increase in annual alternative fuels and a 20% reduction in annual petroleum consumption as compared to a FY2005 baseline by October 1, 2015. Â§ 6834 . Federal Building Energy Efficiency Standards : starting August 2006, if cost-effective over the life cycle, new federal buildings must be designed to achieve energy consumption levels at least 30% below ASHRAE Standard 90.1 (for commercial buildings) or the International Energy Conservation Code (for residential buildings). In addition, starting December 2008, new federal buildings and those undergoing major renovations are to be designed so that fossil fuel consumption is reduced by 80% in 2020 compared to a similar building in FY2003, and 100% by 2030, as specified in Table B-1 . Â§ 8253. Energy Management R equirements: directs federal agencies to reduce building energy consumption per square foot by 30% compared to the FY2003 baseline by FY2015. Â§ 8256(c) Utility Incentive Program: authorizes and encourages agency participation in programs (Utility Energy Savings Contracts, or UESCs) to "increase energy efficiency and for water conservation or the management of electricity demand conducted by gas, water, or electric utilities and generally available to customers of such utilities." Â§ 8287. Authority to Enter into Contracts: authorizes the head of a federal agency to enter Energy Savings Performance Contracts (ESPCs). Each contract may be for a period not to exceed 25 years. The contract directs the contractor to incur the costs of energy savings measures, in exchange for a share of the savings resulting from the measures taken. Â§ 13212. Minimum Federal Fleet Requirement : the total percentage of alternative-fueled or "low greenhouse gas emitting" light-duty vehicles acquired by a federal fleet annually are 75% in FY1999 and thereafter. Â§ 15852 . Federal Purchase Requirement : the President, acting through the Secretary of Energy, is directed to "ensure that, to the extent economically feasible and technically practicable, of the total amount of electric energy the Federal Government consumes during any fiscal year" not less than 7.5% is renewable energy in FY2013 and each fiscal year thereafter. Â§ 16122. Federal and State P rocurement of Fuel Cell V ehicles and Hydrogen E nergy S ystems : requires the federal government to adopt fuel cell vehicles and hydrogen energy systems as soon as practicable. Appendix C. Executive Orders	Summary:	gov_report	1,024	null	6
crs_R46353	crs_R46353_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The global pandemic of Coronavirus Disease 2019 (COVID-19) is affecting communities around the world and throughout the United States, with case counts growing daily. Containment and mitigation efforts by federal, state, and local governments have been undertaken to flatten the curve âthat is, to curb widespread transmission that could overwhelm the nation's health care system. Federal response efforts have included the enactment of laws to provide authorities and supplemental funding to prevent, prepare for, and respond to the pandemic. This report focuses on supplemental FY2020 discretionary appropriations provided to programs and activities traditionally funded by the Departments of Labor, Health and Human Services, and Education, and Related Agencies (LHHS) appropriations bill. As of the date of this report, LHHS supplemental appropriations for COVID-19 response have been provided in four separate supplemental appropriations measures: Title III, Division A, of the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 ( P.L. 116-123 ), enacted on March 6, 2020. Title V, Division A, of the Families First Coronavirus Response Act (FFCRA, P.L. 116-127 ), enacted on March 18, 2020. Title VIII, Division B, of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136 ), enacted on March 27, 2020. Title I, Division B, of the Paycheck Protection Program and Health Care Enhancement Act (PPPHCEA, P.L. 116-139 ), enacted on April 24, 2020. In total, LHHS has received roughly $280 billion in supplemental discretionary appropriations from these COVID-19 response measures. These funds are in addition to roughly $195 billion in regular FY2020 LHHS discretionary appropriations provided in Division A of P.L. 116-94 , the FY2020 LHHS omnibus appropriations act that was enacted on December 20, 2019. Unlike the annual discretionary appropriations, however, these additional funds were designated as an "emergency requirement" and thus were effectively exempted from otherwise applicable budget enforcement requirements (such as the statutory discretionary spending limits). Overall, the COVID-19 supplemental funds have increased FY2020 LHHS discretionary appropriations by approximately 143%. Legislative History The relevant legislative history of each of the four enacted laws containing LHHS supplemental appropriations is detailed below. P.L. 116-123 (H.R. 6074), Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 In the weeks leading up to the supplemental appropriations action in Congress, Alex Azar, the Secretary of the U.S. Department of Health and Human Services (HHS), took administrative steps to allocate existing funding to COVID-19 response efforts. These included issuing a determination on January 25, 2020, allowing the allotment of $105 million from the Infectious Diseases Rapid Response Reserve Fund (IDRRRF). He also reportedly informed Congress on February 2 that he would potentially exercise his authority to transfer $136 million in existing funds within HHS to increase the budgetary resources of several operating divisions and offices that were tasked with COVID-19 response. In response, the Chair of the House Appropriations Committee, Representative Nita Lowey, and the Chair of the LHHS Subcommittee, Representative Rosa DeLauro, sent the Secretary a letter expressing concern that budgetary resources available to HHS at that time would not be sufficient. On February 24, 2020, the Trump Administration sent Congress a request for supplemental appropriations of $1.25 billion for the Public Health and Social Services Emergency Fund (PHSSEF) at HHS. The request letter included a number of other proposals, largely but not exclusively related to re-purposing existing funds toward response efforts. All told, the Administration estimated needing to allocate approximately $2.5 billion toward COVID-19 response efforts. (For the most part, amounts for other LHHS aspects of the request generally were unspecified in the publicly released request letter.) Several days after the Administration's request, the Chair of the House Appropriations Committee introduced H.R. 6074 on March 4, 2020. The measure passed the House that same day by a vote of 415-2, passed the Senate on March 5 by a vote of 96-1, and was signed into law ( P.L. 116-123 ) on March 6. According to the Congressional Budget Office (CBO), P.L. 116-123 provided a total of $7.8 billion in supplemental appropriations in Division A, of which roughly $6.4 billion (about 83%) was for LHHS accounts and activities. (Division B contained authorization provisions related to certain LHHS programs and activitiesâproviding the HHS Secretary authority to temporarily waive or modify the application of certain Medicare requirements with respect to telehealth services. The mandatory spending budgetary effects of these provisions are outside the scope of this report.) P.L. 116-127 (H.R. 6201), Families First Coronavirus Response Act (FFCRA) A second COVID-19 response measure was developed by Congress and the Administration soon after the first was enacted. Initially, H.R. 6201 was introduced by the Chair of the House Appropriations Committee on March 11, 2020. The House amended and passed the measure by a vote of 363-40 on March 14, but further alterations to the final legislative package were negotiated over the next two days. On March 16, the House (by unanimous consent) considered and agreed to a resolution ( H.Res. 904 ) that directed the Clerk to make changes to the legislation when preparing the final, official version of the House-passed bill ( engrossment ). The engrossed version was sent to the Senate and ultimately passed without amendment by a vote of 90-8 on March 18. The President signed the bill into law ( P.L. 116-127 ) the same day. Division A of P.L. 116-127 was estimated by CBO to provide a total of $2.5 billion in supplemental appropriations, of which $1.25 billion (approximately 51%) was for LHHS accounts and activities. (Other divisions of the act contained authorization provisions that in some cases relate to LHHS programs and activitiesâfor instance, provisions providing a 6.2% increase to the federal matching assistance percentage for Medicaid and certain other programs. The mandatory spending budgetary effects of such provisions are outside scope of this report.) P.L. 116-136 (H.R. 748), Coronavirus Aid, Relief, and Economic Security Act (CARES Act) On March 17, 2020, the Administration released a second request for FY2020 supplemental appropriations of $45.8 billion for COVID-19 response, of which $11.1 billion was for LHHS accounts and activities. Over the next several days, Congress and the Administration negotiated the scope and scale of this legislative response, which was expected to involve authorities and additional funding for numerous programs across the federal government. The legislative vehicle that was ultimately chosen for this package was H.R. 748 , an unrelated measure that had been passed previously by the House. Prior to when a deal was reached between Congress and the Administration, the Senate voted on March 22 (47-47) and March 23 (49-46) not to invoke cloture on the motion to proceed to H.R. 748 . The measure was ultimately laid before the Senate by unanimous consent and passed with a substitute amendment by a vote of 96-0 on March 25. The House subsequently took up the Senate amendment on March 27, and agreed to it by a voice vote. The bill was signed into law ( P.L. 116-136 ) by the President that same day. According to CBO, P.L. 116-136 provided about $330 billion in supplemental appropriations in Division B, of which $172.1 billion (approximately 57%) was for LHHS accounts and activities. (Division A contained authorization provisions that in some cases relate to LHHS programs and activitiesâfor instance, $1.320 billion in mandatory funds for the HRSA health centers program. The mandatory spending budgetary effects of such provisions are outside the scope of this report.) P.L. 116-139 (H.R. 266), Paycheck Protection Program and Health Care Enhancement Act (PPPHCEA) About three weeks after the enactment of the CARES Act, Congress and the President came to an agreement that, among other provisions, provided additional supplemental appropriations to HHS for the Provider Relief Fund and to support COVID-19 testing. The legislative vehicle that was used for the agreement was H.R. 266 , an unrelated appropriations bill that had been passed previously by the House. On April 21, 2020, the measure was laid before the Senate by unanimous consent and passed with a substitute amendment by voice vote. The House adopted the Senate version of the proposal on April 23 by a vote of 388-5. The President signed the bill into law ( P.L. 116-139 ) the following day. According to CBO, P.L. 116-139 provided $162.1 billion in supplemental appropriations in Division B, of which $100 billion (approximately 62%) was for LHHS. (Division A contained no provisions related to LHHS programs and activities. The mandatory spending budgetary effects of the authorization provisions in Division A are outside the scope of this report.) Funding Overview As previously mentioned, LHHS has received in total roughly $280 billion in supplemental discretionary appropriations from the COVID-19 response measures ( Table 1 ). HHS received funding in all four supplemental appropriations acts, whereas the Department of Labor (DOL), the Department of Education (ED), and entities funded under the Related Agencies (RA) heading received funding in the third supplemental only. HHS received the vast majority of all LHHS COVID-19 supplemental fundsâ$248 billion, or 89%. ED received the second-largest shareâ$31 billion, or 11%. DOL and RA received approximately 0.1% and 0.2%, respectively. The remainder of this report provides highlights for HHS, DOL, ED, and RA, and includes a detailed table ( Table 2 ) organized by department or agency and by account, program, or activity. Department of Labor The majority of DOL funds ($345 million) in the third measure are for dislocated worker assistance through activities authorized by the Workforce Innovation and Opportunity Act (WIOA). Specifically, the DOL funds are for the WIOA National Reserve, which provides National Dislocated Worker Grants (NDWGs) to states and localities to assist with worker dislocation resulting from natural disasters and mass layoffs. These funds are generally expected to address workforce-related effects of the COVID-19 pandemic. Department of Health and Human Services The majority of HHS funds (93%) in the supplemental appropriations measures have been appropriated to the Public Health and Social Services Emergency Fund (PHSSEF). The PHSSEF account is used by the HHS Secretary for one-time or short-term funding, such as emergency supplemental appropriations, and for some ongoing public health preparedness activities in the Office of the HHS Assistant Secretary for Preparedness and Response (ASPR). Accounts at the Centers for Disease Control and Prevention (CDC) received approximately 3% of the supplemental HHS appropriations provided in the COVID-19 response measures. Accounts at the Administration for Children and Families (ACF) received a similar amount. Remaining funds were provided in smaller amounts to the National Institutes of Health (NIH), the Administration for Community Living (ACL), the Substance Abuse and Mental Health Services Administration (SAMHSA), and the Centers for Medicare and Medicaid Services (CMS). While amounts shown in Table 2 are displayed as appropriated, readers should note that the first, third, and fourth COVID-19 supplemental appropriations acts authorized HHS to transfer funds made available in these acts, provided the transfers are made to prevent, prepare for, and respond to the pandemic. (This broad authority giving HHS discretion over certain transfers is in addition to provisions in these three measures that direct HHS to make specific transfers.) The first measure broadly allowed for HHS to transfer funds among accounts at CDC, NIH, and PHSSEF. The third measure allowed for transfers among amounts at CDC, PHSSEF, ACF, ACL, and NIH. The fourth measure allowed for transfers among accounts at CDC, NIH, PHSSEF, and the Food and Drug Administration, but limited the amounts available for such transfers (e.g., it excluded from this authority $75 billion provided to the PHSSEF for the "Provider Relief Fund"). The acts require HHS to notify the House and the Senate appropriations committees 10 days in advance of such transfers. PHSSEF The PHSSEF received about $232 billion in funding across the four measures. This accounts for 83% of all LHHS funds provided in the acts (and 93% of the HHS funds in the LHHS titles of the bills). These PHSSEF funds may support various activities, including health care surge capacity and the development and purchase of medical countermeasures, including vaccines. In general, PHSSEF supplemental funding has been provided for four main sets of activities. Medical Countermeasures and Surge Capacity: The first and third measures each provided funding to support the development, and in some cases federal purchase, of COVID-19 medical countermeasures, such as diagnostic tests, treatments, vaccines, and medical supplies, as well as for healthcare workforce and other surge capacity activities. In total, approximately $30.4 billion has been provided for these activities. Note that the bills also specify that some of these funds are to be transferred elsewhere (e.g., to other federal agencies for the care of persons under federal quarantine) or reserved for specific purposes or activities (e.g., deposits to the Strategic National Stockpile). These activities may be carried out by various ASPR components, especially the Biomedical Advanced Research and Development Authority (BARDA) for countermeasure development and procurement. COVID-19 Testing for the Uninsured : The second supplemental measure included $1 billion to provide reimbursements for COVID-19 testing and related services for persons who are uninsured. In addition, the fourth measure specified that up to $1 billion out of the amounts appropriated for broader COVID-19 testing purposes (discussed below) may be used to cover the costs of testing for the uninsured. Both measures provide for these payments to be made according to the National Disaster Medical System (NDMS) definitive care reimbursement mechanism. However, the program is administered by HRSA. Provider Relief Fund: The third and fourth supplemental measures each provided funding for a "Provider Relief Fund" to assist health care providers and facilities affected by the COVID-19 pandemic. These funds are intended to reimburse eligible health care providers for health care-related expenses or lost revenues that are attributable to COVID-19. The measures define eligible providers broadly as any that provide "diagnoses, testing, or care for individuals with possible or actual cases of COVID-19." In total, $175 billion has been appropriated for the Provider Relief Fund. COVID-19 Testing , Surveillance, and Contact Tracing : The fourth supplemental measure provided $25 billion to augment national capacity for COVID-19 containment, including expanded testing capacity, and workforce and technical capacity for disease surveillance and contact tracing. The bill directed HHS to reserve some of these funds for specific purposes (e.g., not less than $11 billion is for states, localities, territories, tribes, tribal organizations, urban Indian health organizations, or health service providers to tribes). In addition, the bill specified that certain funds are to be transferred to other agencies and accounts (e.g., $600 million is to be transferred to the FDA for diagnostic, serological, antigen, and other tests). In addition to the activities specified above, PHSSEF appropriations in the first, third, and fourth supplemental measures called for some portion of the funds to be transferred to other agencies or accounts for particular activities. For instance, some PHSSEF funds are required to be transferred to the HRSA for health centers, rural health, the Ryan White HIV/AIDS program, and health care systems. Other HHS Funding Further public health-related funding for preparedness and response was appropriated to the CDC ($6.5 billion) and NIH ($1.8 billion) in the first and third supplemental measures. In addition, the fourth supplemental explicitly directed certain PHSSEF appropriations to be transferred to CDC and NIH for COVID-19 response activities. When accounting for these transfers, total funding directed to the CDC would come to not less than $7.5 billion and total funding directed to NIH would come to not less than $3.6 billion. The CDC funding was intended, among other things, to support grants, or cooperative agreements with grants to states, localities, tribes and other entities, for public health activities (e.g., surveillance, infection control, diagnostics, laboratory support, and epidemiology), as well as for global disease detection and modernization of public health data collection. The funds may also be used to support public outreach campaigns, and provide guidance to physicians, health care workers, and others. Most of the NIH funding was provided to several institutes to support basic scientific research as well as research on potential vaccines, therapeutics, and diagnostics related to COVID-19. ACL received a total of $1.2 billion in the second and third response measures. The majority of this funding ($750 million) was spread across a variety of activities that the agency undertakes to help provide meals to low-income seniors. SAMHSA received $425 million in the third measure, with $250 million for Certified Community Behavioral Health Clinics, $50 million for suicide prevention programs, and not less than $15 million for Indian Tribes. The measure specified that not less than $100 million be made available as emergency response grants for state governments for crisis intervention services, mental health and substance use disorder treatment, and recovery supports for individuals affected by the pandemic. CMS received $200 million in the third measure. At least half of this appropriation was to be spent on additional infection control surveys for federally certified facilities with populations vulnerable to severe illness from COVID-19. ACF received $6.3 billion in the third measure. These funds were directed to a number of human services programs. For instance, the Child Care and Development Block Grant received $3.5 billion to provide continued assistance to child care providers in the event of decreased enrollment or program closures. These funds may also be used to support child care facilities that are open and operating, including those providing care for the children of essential workers. Several other ACF programs received funding, including the Community Services Block Grant ($1 billion), Head Start ($750 million), and the Low Income Home Energy Assistance Program ($225 million). Department of Education Almost all of the $30.925 billion in supplemental ED appropriations provided in the third measure are for the Education Stabilization Fund (ESF). The ESF is composed of three emergency relief funds: (1) a Governor's Emergency Education Relief (GEER) Fund (Â§18002), (2) an Elementary and Secondary School Emergency Relief Fund (ESSERF; Â§18003), and (3) a Higher Education Emergency Relief (HEER) Fund (Â§18004). The third measure provided a total of $30.750 billion for the ESF and specified that these funds are to remain available through September 30, 2021. The GEER Fund may be used to provide emergency support through grants to local educational agencies (LEAs) that the state educational agency (SEA) or governor determines to have been the most significantly impacted by COVID-19. Emergency support may also be provided through grants to institutions of higher education (IHEs) serving students within the state that the governor determines to have been the most significantly impacted by COVID-19. A governor may also choose to provide emergency support to any other IHE, LEA, or education-related entity within the state that he or she deems "essential for carrying out emergency educational services" to students for a broad array of purposes ranging from any activity authorized under various federal education laws to the provision of child care and early childhood education, social and emotional support, and the protection of education-related jobs. Funds from the ESSERF are to be awarded to states based on their relative shares of grants awarded under Title I-A of the Elementary and Secondary Education Act (ESEA), as amended. SEAs are required to provide at least 90% of the funds to LEAs to be used for myriad purposes such as any activity authorized under various federal education laws (e.g., ESEA), coordination of preparedness and response to the COVID-19 pandemic, technology acquisition, mental health, and activities related to summer learning. Funds retained by the SEA must be used for emergency needs, as determined by the SEA, to address issues in response to the COVID-19 pandemic and for administration. The HEER Fund is to distribute funds to IHEs to address needs directly related to the COVID-19 pandemic, including, but not limited to, transitioning courses to distance education and grant aid to students for their educational costs such as food, housing, course materials, health care, and child care. Related Agencies The Social Security Administration (SSA) received the largest amount ($300 million) among the related agencies. These funds were provided to the SSA Limitation on Administrative Expenses account to support the salaries and benefits of all SSA employees affected as a result of office closures. The funds are also to be used for costs associated with telework, phone, and communication services for employees; for overtime costs and supplies; and for processing disability and retirement benefit workloads and backlogs. Detailed LHHS Programs and Activities Supplemental Amounts Table 2 displays funding directed to LHHS programs and activities, as enacted, across the four COVID-19 supplemental appropriations acts. It is organized by department or agency and by account, program, or activity. The table also indicates a number of cases in which appropriations language reserved funds within a particular account for specific programs or activities, or directed that funds be transferred to other accounts. It makes note of instances in which these reservations are for not less than (NLT) or not more than (NMT) a certain dollar amount. In cases where the bill text calls for transfers, funds are shown in the account to which they were appropriated, not in the account to which they are to be transferred. Summary:	null	96	23,175	23,177	23,177	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The global pandemic of Coronavirus Disease 2019 (COVID-19) is affecting communities around the world and throughout the United States, with case counts growing daily. Containment and mitigation efforts by federal, state, and local governments have been undertaken to flatten the curve âthat is, to curb widespread transmission that could overwhelm the nation's health care system. Federal response efforts have included the enactment of laws to provide authorities and supplemental funding to prevent, prepare for, and respond to the pandemic. This report focuses on supplemental FY2020 discretionary appropriations provided to programs and activities traditionally funded by the Departments of Labor, Health and Human Services, and Education, and Related Agencies (LHHS) appropriations bill. As of the date of this report, LHHS supplemental appropriations for COVID-19 response have been provided in four separate supplemental appropriations measures: Title III, Division A, of the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 ( P.L. 116-123 ), enacted on March 6, 2020. Title V, Division A, of the Families First Coronavirus Response Act (FFCRA, P.L. 116-127 ), enacted on March 18, 2020. Title VIII, Division B, of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136 ), enacted on March 27, 2020. Title I, Division B, of the Paycheck Protection Program and Health Care Enhancement Act (PPPHCEA, P.L. 116-139 ), enacted on April 24, 2020. In total, LHHS has received roughly $280 billion in supplemental discretionary appropriations from these COVID-19 response measures. These funds are in addition to roughly $195 billion in regular FY2020 LHHS discretionary appropriations provided in Division A of P.L. 116-94 , the FY2020 LHHS omnibus appropriations act that was enacted on December 20, 2019. Unlike the annual discretionary appropriations, however, these additional funds were designated as an "emergency requirement" and thus were effectively exempted from otherwise applicable budget enforcement requirements (such as the statutory discretionary spending limits). Overall, the COVID-19 supplemental funds have increased FY2020 LHHS discretionary appropriations by approximately 143%. Legislative History The relevant legislative history of each of the four enacted laws containing LHHS supplemental appropriations is detailed below. P.L. 116-123 (H.R. 6074), Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 In the weeks leading up to the supplemental appropriations action in Congress, Alex Azar, the Secretary of the U.S. Department of Health and Human Services (HHS), took administrative steps to allocate existing funding to COVID-19 response efforts. These included issuing a determination on January 25, 2020, allowing the allotment of $105 million from the Infectious Diseases Rapid Response Reserve Fund (IDRRRF). He also reportedly informed Congress on February 2 that he would potentially exercise his authority to transfer $136 million in existing funds within HHS to increase the budgetary resources of several operating divisions and offices that were tasked with COVID-19 response. In response, the Chair of the House Appropriations Committee, Representative Nita Lowey, and the Chair of the LHHS Subcommittee, Representative Rosa DeLauro, sent the Secretary a letter expressing concern that budgetary resources available to HHS at that time would not be sufficient. On February 24, 2020, the Trump Administration sent Congress a request for supplemental appropriations of $1.25 billion for the Public Health and Social Services Emergency Fund (PHSSEF) at HHS. The request letter included a number of other proposals, largely but not exclusively related to re-purposing existing funds toward response efforts. All told, the Administration estimated needing to allocate approximately $2.5 billion toward COVID-19 response efforts. (For the most part, amounts for other LHHS aspects of the request generally were unspecified in the publicly released request letter.) Several days after the Administration's request, the Chair of the House Appropriations Committee introduced H.R. 6074 on March 4, 2020. The measure passed the House that same day by a vote of 415-2, passed the Senate on March 5 by a vote of 96-1, and was signed into law ( P.L. 116-123 ) on March 6. According to the Congressional Budget Office (CBO), P.L. 116-123 provided a total of $7.8 billion in supplemental appropriations in Division A, of which roughly $6.4 billion (about 83%) was for LHHS accounts and activities. (Division B contained authorization provisions related to certain LHHS programs and activitiesâproviding the HHS Secretary authority to temporarily waive or modify the application of certain Medicare requirements with respect to telehealth services. The mandatory spending budgetary effects of these provisions are outside the scope of this report.) P.L. 116-127 (H.R. 6201), Families First Coronavirus Response Act (FFCRA) A second COVID-19 response measure was developed by Congress and the Administration soon after the first was enacted. Initially, H.R. 6201 was introduced by the Chair of the House Appropriations Committee on March 11, 2020. The House amended and passed the measure by a vote of 363-40 on March 14, but further alterations to the final legislative package were negotiated over the next two days. On March 16, the House (by unanimous consent) considered and agreed to a resolution ( H.Res. 904 ) that directed the Clerk to make changes to the legislation when preparing the final, official version of the House-passed bill ( engrossment ). The engrossed version was sent to the Senate and ultimately passed without amendment by a vote of 90-8 on March 18. The President signed the bill into law ( P.L. 116-127 ) the same day. Division A of P.L. 116-127 was estimated by CBO to provide a total of $2.5 billion in supplemental appropriations, of which $1.25 billion (approximately 51%) was for LHHS accounts and activities. (Other divisions of the act contained authorization provisions that in some cases relate to LHHS programs and activitiesâfor instance, provisions providing a 6.2% increase to the federal matching assistance percentage for Medicaid and certain other programs. The mandatory spending budgetary effects of such provisions are outside scope of this report.) P.L. 116-136 (H.R. 748), Coronavirus Aid, Relief, and Economic Security Act (CARES Act) On March 17, 2020, the Administration released a second request for FY2020 supplemental appropriations of $45.8 billion for COVID-19 response, of which $11.1 billion was for LHHS accounts and activities. Over the next several days, Congress and the Administration negotiated the scope and scale of this legislative response, which was expected to involve authorities and additional funding for numerous programs across the federal government. The legislative vehicle that was ultimately chosen for this package was H.R. 748 , an unrelated measure that had been passed previously by the House. Prior to when a deal was reached between Congress and the Administration, the Senate voted on March 22 (47-47) and March 23 (49-46) not to invoke cloture on the motion to proceed to H.R. 748 . The measure was ultimately laid before the Senate by unanimous consent and passed with a substitute amendment by a vote of 96-0 on March 25. The House subsequently took up the Senate amendment on March 27, and agreed to it by a voice vote. The bill was signed into law ( P.L. 116-136 ) by the President that same day. According to CBO, P.L. 116-136 provided about $330 billion in supplemental appropriations in Division B, of which $172.1 billion (approximately 57%) was for LHHS accounts and activities. (Division A contained authorization provisions that in some cases relate to LHHS programs and activitiesâfor instance, $1.320 billion in mandatory funds for the HRSA health centers program. The mandatory spending budgetary effects of such provisions are outside the scope of this report.) P.L. 116-139 (H.R. 266), Paycheck Protection Program and Health Care Enhancement Act (PPPHCEA) About three weeks after the enactment of the CARES Act, Congress and the President came to an agreement that, among other provisions, provided additional supplemental appropriations to HHS for the Provider Relief Fund and to support COVID-19 testing. The legislative vehicle that was used for the agreement was H.R. 266 , an unrelated appropriations bill that had been passed previously by the House. On April 21, 2020, the measure was laid before the Senate by unanimous consent and passed with a substitute amendment by voice vote. The House adopted the Senate version of the proposal on April 23 by a vote of 388-5. The President signed the bill into law ( P.L. 116-139 ) the following day. According to CBO, P.L. 116-139 provided $162.1 billion in supplemental appropriations in Division B, of which $100 billion (approximately 62%) was for LHHS. (Division A contained no provisions related to LHHS programs and activities. The mandatory spending budgetary effects of the authorization provisions in Division A are outside the scope of this report.) Funding Overview As previously mentioned, LHHS has received in total roughly $280 billion in supplemental discretionary appropriations from the COVID-19 response measures ( Table 1 ). HHS received funding in all four supplemental appropriations acts, whereas the Department of Labor (DOL), the Department of Education (ED), and entities funded under the Related Agencies (RA) heading received funding in the third supplemental only. HHS received the vast majority of all LHHS COVID-19 supplemental fundsâ$248 billion, or 89%. ED received the second-largest shareâ$31 billion, or 11%. DOL and RA received approximately 0.1% and 0.2%, respectively. The remainder of this report provides highlights for HHS, DOL, ED, and RA, and includes a detailed table ( Table 2 ) organized by department or agency and by account, program, or activity. Department of Labor The majority of DOL funds ($345 million) in the third measure are for dislocated worker assistance through activities authorized by the Workforce Innovation and Opportunity Act (WIOA). Specifically, the DOL funds are for the WIOA National Reserve, which provides National Dislocated Worker Grants (NDWGs) to states and localities to assist with worker dislocation resulting from natural disasters and mass layoffs. These funds are generally expected to address workforce-related effects of the COVID-19 pandemic. Department of Health and Human Services The majority of HHS funds (93%) in the supplemental appropriations measures have been appropriated to the Public Health and Social Services Emergency Fund (PHSSEF). The PHSSEF account is used by the HHS Secretary for one-time or short-term funding, such as emergency supplemental appropriations, and for some ongoing public health preparedness activities in the Office of the HHS Assistant Secretary for Preparedness and Response (ASPR). Accounts at the Centers for Disease Control and Prevention (CDC) received approximately 3% of the supplemental HHS appropriations provided in the COVID-19 response measures. Accounts at the Administration for Children and Families (ACF) received a similar amount. Remaining funds were provided in smaller amounts to the National Institutes of Health (NIH), the Administration for Community Living (ACL), the Substance Abuse and Mental Health Services Administration (SAMHSA), and the Centers for Medicare and Medicaid Services (CMS). While amounts shown in Table 2 are displayed as appropriated, readers should note that the first, third, and fourth COVID-19 supplemental appropriations acts authorized HHS to transfer funds made available in these acts, provided the transfers are made to prevent, prepare for, and respond to the pandemic. (This broad authority giving HHS discretion over certain transfers is in addition to provisions in these three measures that direct HHS to make specific transfers.) The first measure broadly allowed for HHS to transfer funds among accounts at CDC, NIH, and PHSSEF. The third measure allowed for transfers among amounts at CDC, PHSSEF, ACF, ACL, and NIH. The fourth measure allowed for transfers among accounts at CDC, NIH, PHSSEF, and the Food and Drug Administration, but limited the amounts available for such transfers (e.g., it excluded from this authority $75 billion provided to the PHSSEF for the "Provider Relief Fund"). The acts require HHS to notify the House and the Senate appropriations committees 10 days in advance of such transfers. PHSSEF The PHSSEF received about $232 billion in funding across the four measures. This accounts for 83% of all LHHS funds provided in the acts (and 93% of the HHS funds in the LHHS titles of the bills). These PHSSEF funds may support various activities, including health care surge capacity and the development and purchase of medical countermeasures, including vaccines. In general, PHSSEF supplemental funding has been provided for four main sets of activities. Medical Countermeasures and Surge Capacity: The first and third measures each provided funding to support the development, and in some cases federal purchase, of COVID-19 medical countermeasures, such as diagnostic tests, treatments, vaccines, and medical supplies, as well as for healthcare workforce and other surge capacity activities. In total, approximately $30.4 billion has been provided for these activities. Note that the bills also specify that some of these funds are to be transferred elsewhere (e.g., to other federal agencies for the care of persons under federal quarantine) or reserved for specific purposes or activities (e.g., deposits to the Strategic National Stockpile). These activities may be carried out by various ASPR components, especially the Biomedical Advanced Research and Development Authority (BARDA) for countermeasure development and procurement. COVID-19 Testing for the Uninsured : The second supplemental measure included $1 billion to provide reimbursements for COVID-19 testing and related services for persons who are uninsured. In addition, the fourth measure specified that up to $1 billion out of the amounts appropriated for broader COVID-19 testing purposes (discussed below) may be used to cover the costs of testing for the uninsured. Both measures provide for these payments to be made according to the National Disaster Medical System (NDMS) definitive care reimbursement mechanism. However, the program is administered by HRSA. Provider Relief Fund: The third and fourth supplemental measures each provided funding for a "Provider Relief Fund" to assist health care providers and facilities affected by the COVID-19 pandemic. These funds are intended to reimburse eligible health care providers for health care-related expenses or lost revenues that are attributable to COVID-19. The measures define eligible providers broadly as any that provide "diagnoses, testing, or care for individuals with possible or actual cases of COVID-19." In total, $175 billion has been appropriated for the Provider Relief Fund. COVID-19 Testing , Surveillance, and Contact Tracing : The fourth supplemental measure provided $25 billion to augment national capacity for COVID-19 containment, including expanded testing capacity, and workforce and technical capacity for disease surveillance and contact tracing. The bill directed HHS to reserve some of these funds for specific purposes (e.g., not less than $11 billion is for states, localities, territories, tribes, tribal organizations, urban Indian health organizations, or health service providers to tribes). In addition, the bill specified that certain funds are to be transferred to other agencies and accounts (e.g., $600 million is to be transferred to the FDA for diagnostic, serological, antigen, and other tests). In addition to the activities specified above, PHSSEF appropriations in the first, third, and fourth supplemental measures called for some portion of the funds to be transferred to other agencies or accounts for particular activities. For instance, some PHSSEF funds are required to be transferred to the HRSA for health centers, rural health, the Ryan White HIV/AIDS program, and health care systems. Other HHS Funding Further public health-related funding for preparedness and response was appropriated to the CDC ($6.5 billion) and NIH ($1.8 billion) in the first and third supplemental measures. In addition, the fourth supplemental explicitly directed certain PHSSEF appropriations to be transferred to CDC and NIH for COVID-19 response activities. When accounting for these transfers, total funding directed to the CDC would come to not less than $7.5 billion and total funding directed to NIH would come to not less than $3.6 billion. The CDC funding was intended, among other things, to support grants, or cooperative agreements with grants to states, localities, tribes and other entities, for public health activities (e.g., surveillance, infection control, diagnostics, laboratory support, and epidemiology), as well as for global disease detection and modernization of public health data collection. The funds may also be used to support public outreach campaigns, and provide guidance to physicians, health care workers, and others. Most of the NIH funding was provided to several institutes to support basic scientific research as well as research on potential vaccines, therapeutics, and diagnostics related to COVID-19. ACL received a total of $1.2 billion in the second and third response measures. The majority of this funding ($750 million) was spread across a variety of activities that the agency undertakes to help provide meals to low-income seniors. SAMHSA received $425 million in the third measure, with $250 million for Certified Community Behavioral Health Clinics, $50 million for suicide prevention programs, and not less than $15 million for Indian Tribes. The measure specified that not less than $100 million be made available as emergency response grants for state governments for crisis intervention services, mental health and substance use disorder treatment, and recovery supports for individuals affected by the pandemic. CMS received $200 million in the third measure. At least half of this appropriation was to be spent on additional infection control surveys for federally certified facilities with populations vulnerable to severe illness from COVID-19. ACF received $6.3 billion in the third measure. These funds were directed to a number of human services programs. For instance, the Child Care and Development Block Grant received $3.5 billion to provide continued assistance to child care providers in the event of decreased enrollment or program closures. These funds may also be used to support child care facilities that are open and operating, including those providing care for the children of essential workers. Several other ACF programs received funding, including the Community Services Block Grant ($1 billion), Head Start ($750 million), and the Low Income Home Energy Assistance Program ($225 million). Department of Education Almost all of the $30.925 billion in supplemental ED appropriations provided in the third measure are for the Education Stabilization Fund (ESF). The ESF is composed of three emergency relief funds: (1) a Governor's Emergency Education Relief (GEER) Fund (Â§18002), (2) an Elementary and Secondary School Emergency Relief Fund (ESSERF; Â§18003), and (3) a Higher Education Emergency Relief (HEER) Fund (Â§18004). The third measure provided a total of $30.750 billion for the ESF and specified that these funds are to remain available through September 30, 2021. The GEER Fund may be used to provide emergency support through grants to local educational agencies (LEAs) that the state educational agency (SEA) or governor determines to have been the most significantly impacted by COVID-19. Emergency support may also be provided through grants to institutions of higher education (IHEs) serving students within the state that the governor determines to have been the most significantly impacted by COVID-19. A governor may also choose to provide emergency support to any other IHE, LEA, or education-related entity within the state that he or she deems "essential for carrying out emergency educational services" to students for a broad array of purposes ranging from any activity authorized under various federal education laws to the provision of child care and early childhood education, social and emotional support, and the protection of education-related jobs. Funds from the ESSERF are to be awarded to states based on their relative shares of grants awarded under Title I-A of the Elementary and Secondary Education Act (ESEA), as amended. SEAs are required to provide at least 90% of the funds to LEAs to be used for myriad purposes such as any activity authorized under various federal education laws (e.g., ESEA), coordination of preparedness and response to the COVID-19 pandemic, technology acquisition, mental health, and activities related to summer learning. Funds retained by the SEA must be used for emergency needs, as determined by the SEA, to address issues in response to the COVID-19 pandemic and for administration. The HEER Fund is to distribute funds to IHEs to address needs directly related to the COVID-19 pandemic, including, but not limited to, transitioning courses to distance education and grant aid to students for their educational costs such as food, housing, course materials, health care, and child care. Related Agencies The Social Security Administration (SSA) received the largest amount ($300 million) among the related agencies. These funds were provided to the SSA Limitation on Administrative Expenses account to support the salaries and benefits of all SSA employees affected as a result of office closures. The funds are also to be used for costs associated with telework, phone, and communication services for employees; for overtime costs and supplies; and for processing disability and retirement benefit workloads and backlogs. Detailed LHHS Programs and Activities Supplemental Amounts Table 2 displays funding directed to LHHS programs and activities, as enacted, across the four COVID-19 supplemental appropriations acts. It is organized by department or agency and by account, program, or activity. The table also indicates a number of cases in which appropriations language reserved funds within a particular account for specific programs or activities, or directed that funds be transferred to other accounts. It makes note of instances in which these reservations are for not less than (NLT) or not more than (NMT) a certain dollar amount. In cases where the bill text calls for transfers, funds are shown in the account to which they were appropriated, not in the account to which they are to be transferred.	Summary:	gov_report	1,024	null	7
crs_R46109	crs_R46109_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Congress maintains an ongoing interest in the pace of U.S. innovation and technological advancement due to its influence on the economy, national security, public health, and other national goals. Historically, the federal government has played a significant role in supporting research and development (R&D)âespecially basic researchâthat has led to scientific breakthroughs and new technologies. The global landscape for innovation is rapidly evolvingâthe pace of innovation has increased and the composition of R&D funding has changed (i.e., private R&D investments are larger than public R&D investments and the U.S. share of global R&D has declined). These changes have led some to call for new approaches and the expansion of existing mechanisms to help the United States maintain its leadership role in innovation and technology. One mechanism that has received some attention is the possibility of establishing additional agency-related entities that would facilitate the use of private donations in federally generated research projects. In addition, such entities might play a role in the commercialization of new technologies. The potential establishment of such entities in statute raises several questions: What kinds of organizations has Congress established in the past to address similar needs in the federal government? What are the strengths and weaknesses of these potential models? What are the opportunities and risks of developing a new entity for federal R&D using one of these models? The varied organizational arrangements of the executive branch have resulted from more than two centuries of legislative and administrative actions. These arrangements reflect a diversity of viewpoints, policy preferences, and political goals among the thousands of elected and appointed officials who have played a role in creating and shaping them. During the middle of the 20 th century, hybrid organizational formsâincorporating both public and private characteristicsâbegan to grow in number. These organizational forms, sometimes collectively referred to as "quasi-governmental entities," differ from one another in their specific features, relationship to the federal government, funding mechanisms, purposes, levels of accountability to elected officials, and use of private sector incentives and efficiencies, among other characteristics. Agency-related nonprofit research foundations and corporations fall into this category of organizations. Background on Quasi-Governmental Entities Working with successive administrations, Congress has established, or provided for the establishment of, many quasi-governmental entities. Some of the considerations that contributed to their creation and development were linked to political and policymaking dynamics that were idiosyncratic to the specific time and issue at hand. Nonetheless, observers have identified some common purposes for, and expected benefits of, establishing such entities: providing for stable funding during federal budget tightening and uncertainty; freeing a program from general government management laws, particularly those pertaining to caps on personnel and compensation; harnessing business principles and mechanisms with the aim of providing government-driven solutions without the "red tape" associated with the federal bureaucracy; and providing authorities tailored to the desired mission and functions that allow flexible approaches not typically allowed under statutes or regulations, such as those in the area of financial management. In comparison to traditional government agencies, quasi-governmental entities of various kinds have been touted for their potential to harness business-like entrepreneurial incentives and drive, greater managerial flexibility, and increased employee input in decisionmaking to better carry out the entity's responsibilities. As quasi-governmental organizations have grown in number and variety, some observers have criticized the exemption from government management laws of many such entities. A complex legal framework has been established over time to guide government agencies so that their actions adhere to the values of democratic governance, such as accountability, transparency, and fairness. It might be difficult for stakeholders to verify on an ongoing basis that the activities of a quasi-governmental entity, established by statute and vested with the power to carry out some public purpose, are directed to the public good rather than private gain without the routine accountability and transparency provided by this legal framework. Many of these laws and regulations specify the processes by which action must be taken. Some have criticized such governmental processes as "red tape," particularly in cases where they appear to have been applied overzealously, slowly, or seemingly without regard for an individual's or business's need for a service or flexibility. Arguably, quasi-governmental entities involve a tradeoff: What appears to some to be red tape during an administrative encounter may appear to others to be an essential accountability or transparency mechanism. Most federal agencies are funded through the annual appropriations process, and Congress has sometimes used the "power of the purse" to influence agency priorities and activities. Most federal agencies are headed by appointees of the President subject to Senate advice and consent, and the confirmation process provides Senators with an opportunity to discuss agency issues and concerns with these leaders. Congress establishes, or provides for the establishment of, quasi-governmental entities, but it might not have the same level of influence over them as it does over conventional federal agencies. Congressional committees have reviewed the actions and structure of some of these entities during oversight hearings, and Congress has sometimes enacted changes to their enabling statutes. At the same time, many quasi-governmental entities do not receive appropriated funds and are not led by advice and consent appointees, shielding them from two potential avenues of congressional influence. In addition to criticisms related to oversight, accountability, and transparency, some have questioned whether private sector management techniques are always appropriate for managing government functions. Most public administration scholars have agreed that public enterprises can benefit from some general management mechanisms developed in the private sector. Some scholars have argued, however, that the blanket application of private sector management assumptions to the public sector might miss important differences between the two. These differences include, for example, the role of constitutional law. As one public administration scholar stated, "although politicians, reformers, and media pundits often call for running government like a business, constitutional law makes the public's business very different from others." Some observers also have noted differences in the "bottom line" of the two sectors, and the consequent complexity associated with measuring performance in accomplishing a public purpose. This report discusses a specific category of quasi-governmental entities: agency-related nonprofit organizations that have been established in statute for the express purpose of advancing or facilitating the R&D mission of a federal agency. It describes the characteristics of several illustrative organizations of this type. It examines the available record of these entities' performances and discusses related praise and criticism of these organizational arrangements. Finally, the report identifies potential issues for consideration related to oversight of existing quasi-governmental R&D support organizations as well as potential issues for consideration should Congress elect to establish similar organizations. Existing Agency-Related Nonprofit R&D Organizations Congress has created a number of agency-related nonprofit research foundations and corporations to advance the R&D needs of the federal government and to overcome perceived barriers associated with federal agencies' ability to partner or otherwise engage with industry, academia, and other entities. The stated goals and potential benefits of these quasi-governmental R&D support organizations are that they may: provide a flexible and efficient mechanism for establishing public-private R&D partnerships (see the box, "What Are Public-Private Partnerships?" for more information); enable the solicitation, acceptance, and use of private donations to supplement the work performed with federal R&D funds; increase technology transfer and the commercialization of federally funded R&D; improve the ability of federal agencies to attract and retain scientific talent, including through the use of fellowships, personnel exchanges, and endowed positions; and enhance public education and awareness regarding the role and value of federal R&D. The following sections provide a brief overview of the purpose and intent, governance structure, and federal funding of selected congressionally mandated, federal agency-related nonprofit research foundations and corporations. The foundations discussed include those connected with the work of the National Institutes of Health (NIH), the Centers for Disease Control and Prevention (CDC), the U.S. Food and Drug Administration (FDA), the U.S. Department of Agriculture (USDA), and the Uniformed Services University of the Health Sciences (USU). Nonprofit research and education corporations associated with the work of the Department of Veterans Affairs (VA) are also discussed. All the foundations discussed have been funded through a combination of public and private monies and foster public-private R&D partnerships. However, the level of public support received by the foundations differs, as do the composition and appointment of their governing boards. Federal agencies and Congress have also initiated the creation of other organizations and entities to advance the R&D needs of federal agencies. Federally initiated venture capital firms and strategic investment initiatives, including In-Q-Tel, are often mentioned as an effective model. See the Appendix , "Federally Initiated and Funded Venture Capital Firms," for more information and illustrative examples of such organizations. Foundation for the National Institutes of Health (FNIH) In 1990, Congress directed the Secretary of Health and Human Services (HHS) to establish a nonprofit corporationâthe National Foundation for Biomedical Research, which is now known as the Foundation for the National Institutes of Health (FNIH). Initially, the foundation was tasked with attracting and retaining internationally known scientists to NIH "by offering competitive support for salaries, equipment, and space" through privately funded endowed positions. In 1993, Congress broadened the purpose of the foundation to include "support [for] the National Institutes of Health in its mission, and to advance collaboration with biomedical researchers from universities, industry, and nonprofit organizations." According to FNIH, the foundation creates public-private partnerships and alliances to advance breakthrough biomedical discoveries that can change and improve the quality of people's lives. FNIH raises funds, provides scientific expertise, and administers research programs to address a wide range of health challenges in support of NIH's mission. FNIH also supports the training of new researchers, supports patient programs, and organizes health-related educational events and symposia. One example of an FNIH-initiated project is the Biomarkers Consortium. FNIH manages the consortiumâconsisting of 32 companies, 15 nonprofit organizations, NIH, and FDAâwith the goal of increasing the identification, development, and regulatory approval of biomarkers to support and improve drug development, preventative medicine, and medical diagnostics. In 2018, FDA approved the use of a new biomarkerâsupported by the consortiumâthat is expected to improve the detection of kidney injury in healthy volunteers participating in clinical drug trials. FNIH's governance structure and powers are specified in its organic act and bylaws. FNIH is governed by a board of directors composed of non-voting, ex officio members and voting, appointed members with day-to-day operations overseen by an executive director. Congress designated certain Members of Congress and federal officials as ex officio board members and tasked them with appointing the initial members of the board from a list of candidates provided by the National Academy of Sciences. According to FNIH's bylaws, the number of appointed board members must be at least 6 and no more than 32; the term of an appointed member is 3 to 5 years; there is no limit on the number of terms an appointed member may serve; and any vacancies in the membership of the board shall be filled through election by the board. Congress empowered the board to establish bylaws to govern the general operations of the foundation, including policies for the acceptance, solicitation, and disposition of donations and grants. It also required the board to ensure that the bylaws do not compromise, appear to compromise, or reflect unfavorably on NIH and the ability of NIH to fulfill its responsibilities to the public. Furthermore, Congress made the board of directors accountable for "the integrity of the operations of the Foundation" through the development and enforcement of standards of conduct, financial disclosure statements, and conflict of interest policies and procedures. FNIH operations and activities have been funded through a combination of private donations and a share of NIH appropriations. According to FNIH, since its initial incorporation in 1996, the foundation has raised more than $1 billion in support of NIH's mission. According to tax filings, FNIH provided NIH with $22.6 million in assistance in 2017 and $16.9 million in 2016. Congress authorized the Director of NIH to "provide facilities, utilities and support services to the Foundation if it is determined by the Director to be advantageous to the research programs of the National Institutes of Health" and to transfer no less than $500,000 and no more than $1.25 million of the agency's annual appropriations to FNIH. Between FY2015 and FY2019, NIH transferred between $1 million and $1.25 million annually to FNIH for administrative and operational expenses (less than 0.01% of NIH's annual budget). In the President's FY2020 budget, NIH requested $1.1 million for this purpose. Additionally, since FY2008, FNIH has received $602,803 in federal grants, contracts, and other financial assistance. National Foundation for the Centers for Disease Control and Prevention In 1992, Congress authorized the establishment of the National Foundation for the Centers for Disease Control and Prevention (CDC Foundation) to "support and carry out activities for the prevention and control of diseases, disorders, injuries, and disabilities, and for promotion of public health." A House committee report stated: In the midst of budget restraint and personnel limitations, CDC itself is often strained to meet the basic demands of its mission. Efforts to experiment (some of which will necessarily fail), to do long-term planning, and to recruit and retain temporary staff are usually luxuries that the agency cannot afford, however productive they may ultimately be. The Committee has, therefore, undertaken to create a mechanism for the establishment of a private non-profit foundation to provide these innovative and supplementary activities in public health in association with the CDC. Once established, such a foundation could seek private support for these efforts from both individuals and organizations, and could bring charitable funds and flexibility to these goals. The CDC Foundation is authorized to support a number of activities, including using private funds to establish endowed positions at CDC; creating programs for state, local, and international public health officials to work and study at CDC; conducting forums for the exchange of public health information; and funding research and other public health studies. The foundation guidelines state that it: helps CDC pursue innovative ideas that might not be possible without the support of external partners.... CDC Foundation partnerships help CDC launch new programs, expand existing programs that show promise, or establish a proof of concept through a pilot project before scaling it up. In each partnership, external support gives CDC the flexibility to quickly and effectively connect with other experts, information and technology needed to address a public health challenge. For example, in 2018, the CDC Foundation used funding from the United Nation Children's Fund (UNICEF) to create a partnership between researchers from CDC, the Georgia Institute of Technology, and Micron Biomedical to develop a dissolving measles and rubella microneedle vaccination patch. While the current measles and rubella vaccination is effective, challenges associated with delivery of the vaccine that have impeded eradication efforts. For example, the vaccine must be refrigerated until it is injected, and it must be administered by a trained medical professional. The dissolving microneedle patch has the potential to overcome such challenges and improve vaccination coverage. The CDC Foundation's governance structure and powers are specified in statute and through the foundation's bylaws. The CDC Foundation is governed by a board of directors composed of appointed members and overseen by an executive director. Congress created a committee composed of representatives from the public health and nonprofit sectors to incorporate the foundation, to establish its general policies and initial bylaws, and to appoint the initial members of the board of directors. The term of service of a board member is five years, and any vacancies in the membership of the board are filled through appointment by the board. Congress tasked the CDC Director with serving as a liaison between the agency and the CDC Foundation, but did not designate the CDC Director as an ex officio member of the board. According to the CDC Foundation, such an arrangement guarantees that the foundation remains independent from CDC, while ensuring that the CDC Foundation's "programs and activities have the greatest possible impact for CDC and public health." Additionally, Congress required the board of directors to establish bylaws and general policies for the foundation, including policies for ethical standards, the acceptance and disposition of donations, and the general operation of the foundation. Congress required that the bylaws not reflect unfavorably upon the ability of the foundation or CDC to carry out its responsibilities or official duties in a fair and objective manner; or compromise, or appear to compromise, the integrity of any governmental program or any officer or employee involved in such program. CDC Foundation operations and activities have been funded through a combination of private donations and a share of CDC appropriations. Since 1995, the CDC Foundation has raised more than $800 million in support of CDC and its mission. In both 2015 and 2016, the CDC Foundation transferred $5.6 million to CDC. Additionally, the CDC Foundation provided the agency with $38.5 million in noncash donations (e.g., insecticides and contraceptives in response to the Zika virus) over that same period. Congress authorized the CDC to provide the CDC Foundation with $1.25 million annually (roughly 0.02% of CDC's annual budget). According to the CDC Foundation's audited financial statements, CDC has provided the foundation with a $1.25 million for operating expenses each year since 2012. Additionally, since FY2008, the CDC Foundation has received $55.4 million in federal grants, contracts, and other financial assistance. Reagan-Udall Foundation for the Food and Drug Administration In 2007, Congress established the Reagan-Udall Foundation for the Food and Drug Administration (Reagan-Udall Foundation) with the purpose of advancing FDA's mission "to modernize medical, veterinary, food, food ingredient, and cosmetic product development, accelerate innovation, and enhance product safety." The duties of the Reagan-Udall Foundation include identifying unmet needs and supporting regulatory science research and other programs to improve the development, manufacture, and evaluation (including post-market evaluation) of FDA-regulated products. According to the Reagan-Udall Foundation, it accomplishes its tasks by establishing public-private research collaborations, ensuring new knowledge is in the public domain, allowing broad-based participation, training the next generation of regulatory scientists, and leveraging outside resources for its activities. In 2017, the Reagan-Udall Foundation launched the Innovation in Medical Evidence Development and Surveillance (IMEDS) program which provides FDA regulated industries, universities, and nonprofits with access to distributed electronic healthcare data that can be used to evaluate medical product safety and assess drug effectiveness. Thus far, IMEDS is the largest program supported and managed by the foundation. The governing structure, purposes, and powers of the Reagan-Udall Foundation are specified in the statute establishing the foundation and further defined by the foundation's bylaws. The Reagan-Udall Foundation is governed by a board of directors composed of appointed and ex officio members, including the FDA Commissioner and the Director of NIH. A board-appointed executive director oversees the day-to-day operations of the foundation. Congress directed federal officialsâFDA Commissioner, NIH Director, CDC Director, and the Director of the Agency for Healthcare Research and Qualityâto appoint the initial board members from candidates provided by the National Academy of Sciences, patient and consumer advocacy groups, professional scientific and medical societies, and industry trade organizations. Subsequent to these initial appointments, board vacancies are to be filled through appointment by the board. According to the foundation's bylaws, the board of directors shall be composed of no more than 17 appointed members, including no more than 5 members from the general pharmaceutical, device, food, cosmetic and biotechnology industries and at least 3 members from academic research organizations, 2 members representing patient or consumer advocacy organizations, and 1 member representing health care providers. Furthermore, Congress directed the board of directors to craft bylaws for the foundation, including establishing policies for ethical standards, conflicts of interest, the acceptance, solicitation, and disposition of donations and grants, carrying out memoranda of understanding and cooperative agreements, and for review and awarding of grants and contracts. As detailed in financial reports, the Reagan-Udall Foundation has raised or received nearly $21 million in support of the foundation since 2009, including grants, contributions, and funds transferred from FDA. Congress authorized FDA to provide the Reagan-Udall Foundation with between $500,000 and $1.25 million annually. FDA transferred $1.25 million to the Reagan-Udall Foundation in 2017 and $1 million in 2016 (less than 0.03% of FDA's annual budget). Additionally, since FY2008, the Reagan-Udall Foundation has received $1 million in federal grants, contracts, and other financial assistance. Foundation for Food and Agriculture Research (FFAR) In 2014, Congress created the Foundation for Food and Agriculture Research (FFAR) to advance the research mission of the U.S. Department of Agriculture (USDA) by focusing on agricultural issues of national and international significance, including food security and safety. In establishing FFAR, Congress expressed the importance of American leadership in meeting the needs of a growing population, cited the difficulty associated with overcoming declining federal investments in agriculture research, and highlighted the potential role of the foundation in "supplementing USDA's basic and applied research activities." According to the conference report: The Managers do not intend for the Foundation to be duplicative of current funding or research efforts, but rather to foster public-private partnerships among the agricultural research community, including federal agencies, academia, non-profit organizations, corporations and individual donors to identify and prioritize the most pressing needs facing agriculture. It is the Managers view that the Foundation will complement the work of USDA basic and applied research activities and further advance USDA's research mission. Furthermore, the Managers do not intend in any way for the Foundation's funding to offset or allow for a reduction in the appropriated dollars that go to agricultural research. FFAR is authorized to award grants, or enter into contracts, memoranda of understanding, or cooperative agreements with universities, industry, non-profits, USDA, or consortia, to "efficiently and effectively advance the goals and priorities of the Foundation." It is required to identify unmet and emerging needs, facilitate technology transfer, and to coordinate its activities with those of USDA to minimize duplication and avoid potential conflicts with the department. The foundation currently supports research in six challenge areasâsoil health, sustainable water management, next generation crops, advanced animal systems, urban food systems, and the health-agriculture nexusâin addition to supporting graduate fellowships and early and mid-career awards for agricultural researchers. FFAR also supports strategic initiatives with the potential to further the foundation's mission. For example, in 2017, FFAR awarded researchers at the University of Illinois $15 million to expand their work in improving photosynthesis efficiency and crop yields to soybeans and other crops critical to food security in developing countries. FFAR's investment was matched by $30 million from the Bill and Melinda Gates Foundation and the United Kingdom Department for International Development. According to FFAR, public-private partnerships are generally funded through a competitive grants process or through direct contract; however, the foundation also uses prize competitions to encourage the development of new technologies. The governance structure of FFAR is specified in the statute establishing the foundation and further defined by the foundation's bylaws. FFAR is governed by a board of directors composed of appointed and ex officio members. The day-to-day operations of FFAR are overseen by an executive director, who is appointed by the board. Congress required the ex officio members of the boardâthe Secretary of Agriculture, the Under Secretary of Agriculture for Research, Education and Economics, the Administrator of the Agriculture Research Service, the Director of the National Institute of Food and Agriculture, and the Director of the National Science Foundationâto select the initial appointed board members from lists of candidates provided by the National Academy of Sciences and by industry. According to FFAR's bylaws, the board must consist of no less than 15 and no more than 21 appointed members; any vacancies in the membership of the board shall be filled through appointment by the board; a board member's term of service is 5 years; and a board member may be reappointed, but may not serve for more than 10 years. Additionally, Congress tasked the board of directors with crafting bylaws for the general operation of the foundation and with establishing ethical standards for the acceptance, solicitation, and disposition of donations and grants. Congress also required that the bylaws and policies of FFAR preserve the integrity of the foundation and USDA, including the development and enforcement of a conflict of interest policy. In addition to the board of directors, FFAR has established advisory councils for each of the foundation's challenge areas. According to FFAR, advisory council members provide board members and foundation staff with advice and recommendations on "program development and implementation, potential partnerships and other matters of significance" and represent a diverse set of industries, professional backgrounds, and geographic areas. FFAR activities and operations have been funded through a combination of public and private funds. Through the Agricultural Act of 2014 (), Congress provided FFAR with $200 million to enter into public-private partnerships and advanced agricultural research. However, federal funds can only be expended if the foundation secures matching funds from a non-federal source. In testimony before the Senate, the executive director of FFAR, Dr. Sally Rockey, stated: What we have discovered over the past two years is that we have two distinct advantages over other government-established research foundations. First is our public funding, which gives FFAR the flexibility to seek out diverse partnerships, especially with the private sector. Rather than raising money for a government agency, which is the model for most government established research foundations, FFAR leverages public fundingâmore than doubling that fundingâfor the public good and, in the process, develops a new community of partners. Second is our independence, which allows us to focus almost exclusively on results. When partners are focused just on the science and equally invested in seeing measurable outcomes as soon as possible, new partnerships may develop. In 2017, FFAR awarded 39 grants and $45.8 million in funding ($110.6 million when matching funds are included). In 2018, FFAR awarded 55 grants and $32.2 million in funding (more than $60 million when matching funds are included). USDA's Agricultural Research Service (ARS) was the recipient of three grants and $1.7 million in funding from FFAR ($3.6 million when matching funds are included) in 2018. In the Agriculture Improvement Act of 2018 ( P.L. 115-334 ), Congress directed the Secretary of Agriculture to transfer an additional $185 million to FFAR "to leverage private funding, matched with federal dollars to support public agricultural research"; however, these federal funds were not to be transferred until FFAR provided Congress with a strategic plan detailing how the foundation will become self-sustaining. Congress required the strategic plan to describe agricultural research opportunities and objectives identified by FFAR's advisory councils and approved by the board, and to provide transparency into the foundation's grant review and awards process. FFAR released the required strategic plan in 2019; the plan outlines several actions that the foundation will pursue to diversify its funding base, but also indicates that federal funds are a "critical component of FFAR's model." Henry M. Jackson Foundation for the Advancement of Military Medicine In 1983, Congress created the Foundation for the Advancement of Military Medicineânow known as the Henry M. Jackson Foundation for the Advancement of Military Medicine (HJF)âto carry out and participate in cooperative medical research and education projects with the Uniformed Services University of the Health Sciences (USU). In describing the purpose and role of HJF, Congress stated: The Foundation will be a nonprofit, charitable corporation which will receive gifts, grants and legacies on behalf of both itself and the Uniformed Services Universityâ¦. [By] channeling private resources to the Uniformed Services University, the Foundation will help the University and military medicine maintain advanced scientific teaching and research. In addition, the Foundation will support the growing international role of the University in its cooperative research in other countries and in its programs with medical schools training military officers both here and abroad. In general, HJF implements its mandate by offering research support and services to USU and other military research centers and facilities, including proposal development, research program administration and management, regulatory compliance, technical staffing, and technology transfer assistance. P.L. 98-132 authorized HJF to enter into contracts with USU "for the purposes of carrying out cooperative enterprises in medical research, medical consultation, and medical education, including contracts for the provision of such personnel and services as may be necessary to carry out such cooperative enterprises." According to HJF, more than 1,100 of HJF's employees participated in or supported collaborative research and education projects at USU in FY2018. For example, HJF entered into a license agreement from the USU-HJF Joint Office of Technology Transfer with Profectus BioSciences to develop a human vaccine for the Nipah virusâan infection that can lead to inflammation of the brain and respiratory illnessâbased on a technology created more than 15 years ago by a USU scientist. Specifically, HJF, USU, and Profectus are collaborating on the development of a clinical assay to evaluate the Nipah virus vaccine response. The collaborative research is supported, in part, by NIH. HJF is governed by a council of directors composed of appointed and ex officio members, including the chair and ranking members of the Senate and House Committees on Armed Services and the Dean of USU. The ex officio members are responsible for appointing the other members of the council of directors. In 2018, Congress increased the number of appointed members from four to six. A council-appointed executive director oversees the day-to-day operations of HJF. In 1986, Congress appropriated $10 million to HJF "to support the purposes of the Foundation, its on-going educational and public services programs and to serve as a memorial to the late Senator Henry M. Jackson." However, HJF's revenue is generally derived from the administration of grants and contractsâHJF manages or administers grants and contracts on behalf of USU or other military research centers and collects indirect costs or overhead associated with the provided services. According to HJF, in FY2018, the foundation received $483.9 million in grants and contracts and expended $468.7 million on program services associated with research grants and contracts. According to USAspending.gov, since FY2008, HJF has received $6.1 billion in federal grants, contracts, and other financial assistance, primarily from the Department of Defense. Department of Veterans Affairs Nonprofit Research and Education Corporations In 1988, Congress authorized the Secretary of Veterans Affairs (VA) to establish a nonprofit corporation (NPC) at any of the VA medical centers "to provide a flexible funding mechanism" and facilitate the conduct of approved research. Congress extended the authority of NPCs in 1999 to include approved education and training activities (e.g., educational courses for patients and families and training for VA employees associated with new technologies or specialties). Congress also authorized any NPC to facilitate the conduct of approved research and education activities at more than one VA medical center (such NPCs are known as multi-medical center research corporations). In general, NPCs implement their mandate by providing research and management services to VA medical researchers conducting projects using non-VA funds. In describing the need for NPCs, Congress indicated that support for research from non-VA funding sources, including NIH, DOD, private foundations, and companies, benefited veteran patients, where existing mechanisms for administering non-VA funds had disadvantages. A committee report on the authorizing legislation stated: Funds that are channeled through affiliated medical schools [to VA medical centers] are subject to the terms and conditions which the school applies to funds obtained by researchers employed by the school. In many cases, this means that a percentage, which varies from 15 to 40 percent or more, of the funds obtained is retained by the medical school for "overhead" and related expenses of the school. In contrast, by authorizing NPCs to accept, administer, retain, and spend non-VA research funding on behalf of VA investigators, indirect costs or overhead derived from such funds could be applied to the VA medical center. According to the U.S. Government Accountability Office (GAO): Nonprofit corporations support VA's research environment by funding a portion of the department's research needs, such as laboratory equipment and improvements to infrastructure, and by providing flexible personnel and contracting arrangements to respond to investigators' needs. The governance structure of NPCs is specified in the statute providing the authority for their establishment and further defined by VA procedures and instructions. Each NPC is governed by a board of directors with its day-to-day operations overseen by an executive director. The VA Secretary is responsible for appointing all members of an NPC's board of directors. Each board of directors must include the director of the VA medical center, the chief of staff, and associate chief(s) of staff of the medical centerâall acting within their official capacitiesâand two non-federal members. Additionally, the board of directors of a multi-medical research corporation must include the director of each of the VA medical centers served by the NPC. The executive director of an NPC is appointed by its board of directors with the concurrence of the VA Under Secretary of Health. Congress placed NPCs under the jurisdiction of VA's Inspector General; required each NPC to conduct regular audits and provide an annual statement of operations, activities, and accomplishments to VA; and made all NPC employees, including members of the board of directors, subject to conflict of interest policies adopted by the NPC. Additionally, VA conducts oversight of NPCs through the agency's Nonprofit Program Oversight Board (NPOB), the Nonprofit Program Office (NPPO), and the Veteran Health Administration's Chief Financial Officer (VHA CFO). Specifically: The NPOB is VA's senior management oversight body for NPCs. It reviews the activities of NPCs to ensure they are consistent with VA policies and makes recommendations to the VA Secretary (through the Under Secretary of Health) regarding any changes in NPC policy. The NPPO serves as a liaison between VHA and the NPCs. It provides oversight, guidance, and education to the NPCs to ensure compliance with VA policies and regulations, conducts triennial reviews of NPCs, compiles NPC data for an annual report to Congress, and ensures any corrective measures are implemented. The VHA CFO provides financial oversight of NPCs. There are currently 83 NPCs located in 42 states, Puerto Rico, and the District of Columbia. According to VA, in 2017, NPCs generated $261 million in revenueâspending 84% on research, 15% on administrative overhead, and 1% on education related activities. VA describes NPCs as "self-sustainingâ¦. [F]unds are not received into a government account. No appropriation is required to support these activities." However, approximately 70% of the revenue generated by NPCs in 2017 ($183 million) was from federal sourcesâprimarily NIH and DOD grants and contracts. VA states that from 2008 to 2017 NPCs contributed $2.2 billion to VA research. In 2018, NPCs generated $236 million in revenues. Issues for Congress In an April 2019 report, the National Institute of Standards and Technology described benefits that might be realized if Congress provided all federal R&D agencies with the authority to establish agency-related nonprofit research foundations. For example, they can actively seek "gifts and other monetary donations from private donors and organizations," and they "have facilitated technology commercialization and generated revenue to reinvest in R&D." In addition, while government agencies are, with certain exceptions, subject to management laws designed to ensure accountability, transparency, and fairness, agency-related foundations may be exempt from them. Such exemptions may facilitate flexibility, but they may also make it difficult for stakeholders to verify on an ongoing basis that the foundation's activities are directed to the public good rather than private gain. Prior to extending the authority to establish agency-related nonprofit research foundations and corporations to additional federal agencies and laboratories there are a number of issues that Congress might consider. The following sections examine some of these issues, including transparency, independence, and effectiveness. Conflict of Interest and Industry Influence To date, most federal agencies with affiliated nonprofit research foundations or corporations work in the area of medicine and public healthâan area where public trust is considered essential. The conflict of interest policies of affiliated nonprofit research foundations and corporations vary. For example, all HJF employees are required to submit annual conflict disclosure and certification forms; under its cooperative agreement with the CDC, the CDC Foundation is required to conduct a conflict of interest review prior to accepting a gift for the CDC from a potential donor; and VA employees serving as NPC directors are subject to federal conflict of interest laws and regulations. Recent media reports and investigations have nevertheless raised concerns about conflicts of interest and the potential for undue industry influence in public-private R&D partnerships formed and managed by agency-related nonprofit foundations. According to some, industry involvement in R&D partnerships has the potential to erode public trust and confidence in federal agency decisionmaking, which may be based, in part, on the results of R&D supported by the public-private partnership. Others assert that issues associated with conflict of interest are overstated and rare, that other biasesâbeyond financial tiesâalso influence research, and that policy responses to such concerns have been overly burdensome and are impeding the translation of R&D into new products and technologies. Three recent examples illustrate these conflict of interest and undue influence concerns. R&D Partnership Between the National Football League and NIH In 2015 and 2016, reporting by ESPN and others alleged that the National Football League (NFL) attempted to influence the selection of a grant recipient by NIH for a study on aÂ degenerative brain disease known as CTE, or chronic traumatic encephalopathy. NIH had planned to fund the CTE study from a $30 million NFL donation to NIH through FNIH. Democratic committee staff of the House Committee on Energy and Commerce launched an investigation of the allegations and issued a report in May 2016. The report stated: Democratic Committee staff received evidence to support the allegations that the NFL inappropriately attempted to influence the selection of NIH research applicants funded by the NFL's $30 million donation to NIHâ¦. Despite the NFL's attempts to influence the selection of research applicants, the integrity of the peer review process was preserved and funding decisions were made solely based on the merit of the research applications. The report included findings and recommendations directed at FNIH and its role in the creation and management of R&D partnerships between NIH and the private sector. Specifically, the investigation found that "FNIH did not adequately fulfill its role of serving as an intermediary between NIH and the NFL" and recommended the following actions: FNIH must establish clearer guidelines regarding donor communications with NIH. FNIH must come to a mutual understanding with donors at the beginning of the process regarding their degree of influence over the research they are funding and remind donors that NIH policy prohibits them from exerting influence at any point in the grant decision-making process. FNIH should provide donors with the clear, unambiguous language from the NIH Policy Manual, which states that a donor may not dictate terms that include "any delegation of NIH's inherently governmental responsibilities or decision-making," or "participation in peer review or otherwise exert real or potential influence in grant or contract decision-making." NIH and FNIH should jointly develop a process to address concerns about donors acting improperly. FNIH issued the following statement in response to the report: The FNIH acted appropriately, with integrity and transparency, in fulfilling its mandate under SHRP [Sports and Health Research Program]. As acknowledged by the Democratic Staff report, the governing documents among the FNIH, NIH and NFL made clear that the NIH had exclusive control over the scientific and administrative aspects of the program. The report makes recommendations regarding communication issues that the FNIH has already identified and taken steps to address. The FNIH has strengthened protocols around communications among NIH, NIH researchers and FNIH donors that will prevent unauthorized contact among parties. The FNIH has had a long history of successful and productive public-private partnerships in support of the NIH mission. These adjustments to governing agreements will help ensure the success of future scientific partnerships in support of human health. On September 15, 2016, four Republican members of the House Committee on Energy and Commerce sent a letter to the Inspector General of the Department of Health and Human Services related to the allegations of undue influence by the NFL. The letter stated: There appear to be important questions and concerns related to these events that have not been adequately vetted or addressedâ¦. This grant award has become the source of tremendous public debate and, therefore, clear answers and lessons are necessary. For these the reasons, the Committee refers this matter to your attention and requests a thorough and objective review by the Office of the Inspector General to assess whether the policies and procedures concerning public-private partnerships under the authority of FNIH were followed, and if not, what revisions or reforms should be considered. This will help SHRP, and other public-private partnerships, avoid similar distractions in the future so all parties can focus on what matters mostâthe science. Opioid Epidemic Public-Private Partnership In 2018, NIH was engaged with FNIH and potential donors, including pharmaceutical companies, regarding the development of a public-private partnership that would seek to address the opioid crisis. Potential conflicts of interest and ethical concerns were raised by both NIH and FNIH. The Director of NIH asked a working group of the Advisory Committee to the NIH Director (ACD) and the FNIH Board to examine the appropriateness of establishing a partnership between NIH, FNIH, and various pharmaceutical companies. On March 16, 2018, the FNIH Board held a meeting to discuss the possibility of forming such a partnership. The FNIH Board decided that an approach that relies disproportionately on input and financing from pharmaceutical companies is not appropriate in this circumstance. The FNIH is uncomfortable seeking or receiving monetary donations from any pharmaceutical company or industry representative at this time to support implementation of the research plan as presented. Doing so poses unacceptably high risk of public skepticism concerning the eventual scientific outcomes given the responsibility some companies may bear in having created the crisis. Also, it would likely undermine public confidence in the many other valuable public-private partnerships that the NIH and FNIH have created and will create to improve human health. The principal recommendation of the A CD working g roup was that "to mitigate the risk of real or perceived conflict of interest, it would be preferable if only Federal funds were used to support the research efforts included in this public-private partnership." The working group also offered a number of recommendations if a public-private partnership were to be established, including that any industry funding should be provided without preconditions and in full, that NIH should publicly disclose its research plan for the partnership, and that the agency should clarify and define the governance structure associated with the collaboration. In April 2018, NIH launched the Helping to End Addiction Long-term (HEAL) Initiativeâan agency-wide "effort to speed scientific solutions to stem the national opioid public health crisis." In a press release on the use of public-private partnerships as part of HEAL, the Director of NIH stated: I fully embrace [the ACD Working Group's] recommendation that NIH should vigorously address the national opioid crisis with government funds and decline cash contributions through partnerships from the private sector. It is clear, however, that the opioid crisis is beyond the scope of any one organization or sector. NIH and biopharmaceutical companies bring unique skills and assets to bear on this crisis. NIH will use the ACD guidance as we continue our discussions with biopharmaceutical organizations to advance focused medication development for addiction and painâ¦We agree with and appreciate the ACD's guidance to verify donated assets and tailor the governance structures for each initiative that may be pursued through public-private partnerships to ensure appropriate oversight and guidance. Any partnerships that NIH does establish with biopharmaceutical organizations as part of the HEAL Initiative will be done with the utmost transparency. Coca-Cola Funding for Obesity Research Some have raised concerns regarding the ability of industry to influence CDC and FDA decisionmaking by way of donations to the CDC Foundation and Reagan-Udall Foundation. For example, some have questioned donations made by the Coca-Cola Company to the CDC Foundation for research and other activities associated with obesity and diet issues. In February, two members of Congress sent a letter asking the Department of Health and Human Services' Inspector General to "investigate the relationship between the CDC and Coca-Cola outlined in this report [a 2019 paper by Hessari et al.], determine whether there is a broader pattern of inappropriate industry influence at the agency, and make recommendations to address this issue." In addition to managing conflicts of interest that may result from public-private partnerships facilitated by an agency-related nonprofit foundation, a 2016 report by a working group of the Advisory Committee to the CDC Director noted the need for clarity in managing conflict of interest between the nonprofit foundation and the federal agency itself. The working group pointed out that the CDC Foundation "benefits financially from the grants it accepts and manages on the CDC's behalf," and noted that "ongoing oversight and management transparency are essential components of a conflict-of-interest policy, particularly where, as here, one of the partners is an agency whose greatest asset is the confidence of the public in its impartiality and integrity." Transparency and Accountability In response to concerns regarding conflict of interest and the potential for industry influence, in addition to the need to maintain public confidence in related decisionmaking, some have called for additional transparency in the development and management of public-private partnerships. These calls extend to agency-related nonprofit research foundations. For example, the Advisory Committee to the Director of the CDC recommended that the CDC should expect the CDC Foundation to provide the agency with a "complete record of evidence" and a "fully reasoned analysis" as to why a proposed public-private partnership would meet the agency's standards for entering into a private financial relationship. The advisory committee recommended that CDC only enter into a private financial relationship if the proposed project aligns with a stated CDC priority, the projected benefits to public health outweigh any potential risks to public trust in CDC, and the proposed project does not primarily benefit the private funder or position the private funder to exercise undue influence over CDC. Some have also called for the harmonization of policies, procedures, and standards used by federal agencies and agency-related nonprofit research foundations in the evaluation of proposed public-private partnerships and in addressing conflict of interest and undue influence concerns associated with such partnerships. In 2018, House appropriations report language directed both the CDC Foundation and FNIH to abide by existing reporting requirements and include in their respective annual reports the source and amount of all monetary gifts to the Foundation, as well as the source and description of all gifts of real or personal property. Each annual report shall disclose a specification of any restrictions on the purposes for which gifts to the Foundation may be used. The annual report shall not list "anonymous" as a source for any gift that includes a specification of any restrictions on the purpose for which the gift may be used. According to media reports, officials from FNIH and the CDC Foundation assert they are in compliance with existing disclosure requirements as outlined in their governing statutes and their annual reporting is similar to other nonprofit organizations. Independence and Oversight By design, quasi-governmental entities, including agency-related nonprofit research foundations and corporations, are independent from the federal government. Congress explicitly states in the statutes creating each of the organizations described above that the entity is "not an agency or instrumentality of the United States." In addition, these entities generally are not controlled by federal officials. However, Congress also structured these organizations so they would be associated with and in some instances largely reliant on the federal agencies they were created to support. The degree of independence an agency-related nonprofit research foundation or corporation hasâand by extension the degree of congressional oversight and influenceâvaries (i.e., the more independent, the less opportunity for oversight and vice versa). This variability can be ascribed, in large part, to the primary function of the organization and the governance structure established by Congress. For example, the primary function of HJF and the VA NPCs is to provide research and grant management services to USU and VA medical researchers, respectively. These researchers are full- or part-time federal employees who are, in general, conducting approved research using federal funds from other agencies (NIH and DOD). The financial strength of these entities is thus closely tied to the ability of USU and VA researchers to compete successfully for NIH, DOD, and other research grants. Additionally, the boards governing HJF and VA NPCs include Members of Congress and federal officials. Specifically, the board of a VA NPC must include the director, chief of staff, and associate chief(s) of staff of the VA medical centerâall acting in their official capacitiesâand the board of HJF includes the chair and ranking members of the Senate and House Committees on Armed Services. These factors likely make HJF and VA NPCs less independent than some of the other agency-related nonprofit foundations described in this report. However, given their dependencyâin particular on other federal fundsâseveral questions arise: Why are these entities needed? Are there alternative mechanisms for administering research funds from other federal agencies? Should these entities be soliciting more private funds? Comparatively, FNIH, the CDC Foundation, and the Reagan-Udall Foundation likely have more autonomy given their primary function of raising funds from the private sector to benefit and advance the mission of their affiliated federal agencies. Nonetheless, the success of these entities requires some level of interconnectedness to ensure their efforts are closely aligned with the priorities and needs of the federal agencies they support. Additionally, FNIH, the CDC Foundation, and the Reagan-Udall Foundation all receive administrative and operating costs from their affiliated federal agencies, in addition to having federal officials as ex officio members of their boards. These factors likely provide the federal agencies with the ability to influence and shape the relationship. The use of federal funds in supporting the operating expenses of these entities also provides a mechanism for congressional oversight. FFAR's purpose to advance the research mission of USDA is similar to that of FNIH, the CDC Foundation, and the Reagan-Udall Foundation. However, the way in which FFAR executes its missionâprimarily as a grant-making organizationâmay offer more independence. Congress tasked FFAR with developing and pursuing an agricultural R&D agenda that minimizes the duplication of existing USDA efforts and is focused on unmet needs and emerging areas of national and international significance. Currently, FFAR executes its R&D agenda by leveraging federal funds with non-federal sources. The use of federal funds provides Congress with an effective oversight mechanism. Congressional intent, however, is for FFAR to become self-sufficient. In the Agriculture Improvement Act of 2018 ( P.L. 115-334 ), Congress made the transfer of federal funds contingent upon the development of a strategic plan detailing how FFAR will become self-sustaining. Opportunities for congressional oversight or influence may diminish as FFAR becomes self-sustaining. That being said, FFAR's strategic plan states: This strategic planning and sustainability exploration demonstrates that FFAR requires Congressional funding to remain relevant, viable, to maintain velocity, and increase impact toward conquering the food and agriculture challenges of this timeâ¦. In the event that public funding for FFAR diminishes, the Foundation would be severely limited in its ability to deliver on the ambition and scale of impact that Congress originally envisioned. In this scenario, FFAR's capacity to fund ambitious, potentially transformative research projects would be restricted. Indeed, stakeholders indicate that FFAR will find it much more challenging to bring partners to the table and mobilize private funding as its credibility and matching power will be weakened without the "halo effect" of its Congressional funding and mandate. FFAR's strategic plan also indicates that the foundation will increase the non-federal matching requirement for some projects, diversify its co-funders, develop an annual fundraising program, pursue fees for services, and expand the size and number of consortia as part of its sustainability plan. Effectiveness and Need To date, the effectiveness of agency-affiliated nonprofit research foundations or corporations has not been formally assessed. In a 2002 report on the VA NPCs, GAO noted, "VA headquarters has not evaluated nonprofit corporations to measure their effectiveness or compare their operations. This type of high-level oversight and evaluation is a critical element of success." It is also unclear what might constitute an appropriate measure of success: number of partnerships formed? amount of private funds raised? number of technologies commercialized? Some have arguedâbased on the amount of private funds raisedâthat the Reagan-Udall Foundation is not meeting expectations and is less successful than the CDC Foundation and FNIH. The Reagan-Udall Foundation has raised approximately $21 million over the last decade for FDA. In comparison, FNIH provided NIH with that amount in a single year ($22 million in 2017). Lower than expected fundraising efforts have led some to question the purpose and need for the Reagan-Udall Foundation. It is difficult to determine the degree to which the partnerships developed and managed by some of the agency-affiliated nonprofit research foundations would have occurred in the absence of such foundations. Federal agencies engage in public-private partnerships through other mechanisms, including cooperative research and development agreements, and while federal agencies are not permitted to solicit gifts from the private sector, many are authorized to accept donations. Report language in the Senate energy and water appropriations bill for FY2020 directs the Department of Energy (DOE) to contract with the National Academy of Public Administration for a study that would assess existing agency-affiliated nonprofit research foundations to assist Congress in evaluating the merits of creating a DOE-related nonprofit research foundation. House appropriators included similar language in their version of the energy and water appropriations bill, but directed DOE to undertake the review on its own. Concluding Observations Congress established each of the agency-related nonprofit research foundations and corporations described in this report with the aim of advancing the R&D mission of the associated federal agency. While the way each organization pursues its mandate varies, three broad categories of activity emerge: (1) soliciting private funds to support R&D performed by federal scientists; (2) soliciting private funds (leveraged against federal funds in the case of FFAR) to support R&D performed by non-federal researchers; and (3) administering and managing research funds from federal and non-federal sources. These activities are often carried out as part of public-private R&D partnerships formed and managed by an agency-related nonprofit research foundation or corporation. While public-private partnerships are generally viewed as an effective mechanism for advancing the state of science and facilitating the transfer and commercialization of technologies to the marketplace, some say it is less clear whether agency-related nonprofit research foundations and corporations represent an effective model for the formation and management of such partnerships. Federal science agencies already have the authority to create partnerships, and many have the authority to accept gifts from individuals, nonprofits, and private sector firms in support of federal R&D and other agency activities. Federal agencies, however, are not permitted to solicit private funds, and many argue that the "red tape" associated with the establishment of public-private partnerships by federal agencies is a deterrent. This situation may cause some observers to raise the questionâwould a federal agency have achieved similar results in the absence of its agency-related nonprofit research foundation or corporation? While this question cannot be answered with any certainty, it does offer an opportunity for consideration of potential policy options. Among the options that Congress might consider are: crafting a broad, general nonprofit research foundation authority that federal science agencies could draw on to create an entity that meets their specific needs; examining the existing authorities of individual federal science agencies and, as appropriate, supplementing those authorities to increase the flexibility of an agency to enter into public-private partnerships; creating additional agency-related nonprofit research foundations on a case-by-case basis, tailored to the specific needs of particular federal science agencies; and maintaining the status quo, i.e., allowing agency-related nonprofit research foundations and corporations that currently exist to continue, and requiring other federal agencies to use their existing authorities to enter into public-private R&D partnerships and transfer federal technologies to the marketplace. If Congress decides to create additional agency-related nonprofit research foundations, clear articulation of purpose, role, and governance structure may be needed to maintain an appropriate balance between the flexibility associated with being a nongovernmental entity and the need for accountability, transparency, and public confidence in the results of R&D partnerships and other supported activities. Appendix. Federally Initiated and Funded Venture Capital Firms Over the last two decades, federal agencies and Congress have established several venture capital (VC) firms. The intent of these firms, including In-Q-Tel (IQT), the Army Venture Capital Initiative (AVCI), and Red Planet Capital (RPC), has been to help ensure agency access to leading-edge technologies and input into technology development to address mission needs. Several factors have contributed to the initiation of these organizations: a long-term shift in the composition of U.S. research and development funding from the federal government to the private sector; the substantial role of small start-ups in driving innovation, especially in information technology; and expanded U.S. and global commercial market opportunities that have diminished the relative attractiveness of serving the federal government market. In-Q-Tel. The Central Intelligence Agency (CIA), with congressional approval, established the first federal government-sponsored VC firm, In-Q-Tel, in 1999 . IQT is an independent, not-for-profit, non-stock company. It is a strategic investor that works closely with intelligence community (IC) entities and the Department of Defense (DOD). IQT's portfolio includes data analytics, cybersecurity, artificial intelligence, machine learning, ubiquitous computing, information technology solutions, communications, novel materials, electronics, commercial space, remote sensing, power and energy, and biotechnology. While the CIA has broad statutory authority in how it may expend its funds, according to a RAND Corporation report, the agency reportedly used an approach based on DOD's "other transaction" authority (10 U.S.C. 2371) for developing its contract with IQT. IQT has a management team and a board of trustees. The CIA is the executive agent for IQT. Federal agencies, primarily the CIA, provide funding to IQT, which in turn provides investments to selected firms based on needs articulated by the CIA. The In-Q-Tel Interface Center (QIC), a small group of CIA employees, serves as a liaison between the CIA and IQT. IQT investments generally range from $500,000 to $3 million. IQT asserts that for each dollar it has invested, private investors have provided $16. IQT pairs its investment with a development agreement in which IQT and the company work together to adapt the technology to meet IC needs. If successful, IC customers can buy the product directly from the company. IQT asserts that its model delivers rapid, cost-effective solutions: IQT identifies and adapts "ready-soon" technologiesâoff-the-shelf products that can be modified, tested, and delivered for use within 6 to 36 months depending on the difficulty of the problem. Approximately 75% of our deals involve multiple agencies from the [IC] and defense communities, which means a more cost efficient use of taxpayers' dollars. Profits from the liquidation of an IQT investment are allocated between additional IQT investing activity and other strategic information technology initiatives defined by the CIA, in accordance with a memorandum of understanding between the CIA and IQT. Army Venture Capital Initiative. In January 2002, Congress directed the Secretary of the Army to establish a venture capital investment corporation using $25 million previously appropriated to the Army for basic and applied research. The Army and Arsenal Venture Capital (formerly Military Commercial Technologies, Inc. (MILCOM)) jointly manage the AVCI through OnPoint Technologies, LLC (OPT), a not-for-profit corporation. In this relationship, the Army serves as strategic investor; provides guidance on technology priorities to OPT through its Communications Electronics Command (CECOM); and, through CECOM, provides administrative and contractual support to OPT. Army funds provided to OPT support investments and OPT expenses. Proceeds from the liquidation of investments are used in part to pay compensation to Arsenal Venture Capital with the balance used for new investments. In addition to providing $25 million in FY2002, Congress appropriated $12.6 million in FY2003 and $14.3 million in FY2005 for the AVCI. In addition, in FY2004, the Army reprogrammed $10 million for the AVCI. Since FY2005, Congress has not appropriated funds to the AVCI. AVCI invests alongside other VC firms at all stages of development, making investments of $500,000 to $2 million. AVCI asserts that for each dollar it has invested, private investors have provided $22. Focused initially on innovative power and energy technologies, AVCI's technology focus areas have expanded to include emerging technologies such as autonomy, cyber, health information systems, and advanced materials. AVCI seeks to foster the development of these technologies and their transfer to the soldier while attaining net returns for the investing organizations from commercial and defense markets. AVCI asserts that it is able to engage technology firms outside the traditional reach of DOD. Red Planet Capital. In September 2006, the National Aeronautics and Space Administration (NASA) announced a partnership with Red Planet Capital, Inc., a non-profit organization, to establish a venture capital fund, Red Planet Capital (RPC). The fund was "to support innovative, dual-use technologies [to] help NASA achieve its mission, [and] better position these technologies for future commercial use." NASA was to provide strategic direction and technical input to RPC, while the organization's principals were to identify investment opportunities, perform due diligence, and manage its equity investments. NASA intended to invest approximately $75 million over five years. Congress provided $6 million for RPC in FY2007. In FY2008, President George W. Bush proposed termination of the program: Government-sponsored venture capital funds provide a mechanism for Government agencies to indirectly take equity stakes in private firms, which potentially creates significant conflicts of interest and market distortions. The Administration believes that this mechanism poses difficult challenges to Government oversight and should only be used in exceptional situationsâ¦. The Administration further evaluated the fund and determined that, for NASA, these funds are better directed towards current priorities that will produce cost-effective, ascertainable outcomes. Congress provided no further appropriations for RPC. According to NASA, the fund was eliminated before it took an equity stake in any company. A RAND Corporation study states that RPC made a single investment prior to its termination, though it did not specify the amount. Over the last two decades, federal agencies and Congress have established several venture capital (VC) firms. The intent of these firms, including In-Q-Tel (IQT), the Army Venture Capital Initiative (AVCI), and Red Planet Capital (RPC), has been to help ensure agency access to leading-edge technologies and input into technology development to address mission needs. Several factors have contributed to the initiation of these organizations: a long-term shift in the composition of U.S. research and development funding from the federal government to the private sector; the substantial role of small start-ups in driving innovation, especially in information technology; and expanded U.S. and global commercial market opportunities that have diminished the relative attractiveness of serving the federal government market. In-Q-Tel. The Central Intelligence Agency (CIA), with congressional approval, established the first federal government-sponsored VC firm, In-Q-Tel, in 1999 . IQT is an independent, not-for-profit, non-stock company. It is a strategic investor that works closely with intelligence community (IC) entities and the Department of Defense (DOD). IQT's portfolio includes data analytics, cybersecurity, artificial intelligence, machine learning, ubiquitous computing, information technology solutions, communications, novel materials, electronics, commercial space, remote sensing, power and energy, and biotechnology. While the CIA has broad statutory authority in how it may expend its funds, according to a RAND Corporation report, the agency reportedly used an approach based on DOD's "other transaction" authority (10 U.S.C. 2371) for developing its contract with IQT. IQT has a management team and a board of trustees. The CIA is the executive agent for IQT. Federal agencies, primarily the CIA, provide funding to IQT, which in turn provides investments to selected firms based on needs articulated by the CIA. The In-Q-Tel Interface Center (QIC), a small group of CIA employees, serves as a liaison between the CIA and IQT. IQT investments generally range from $500,000 to $3 million. IQT asserts that for each dollar it has invested, private investors have provided $16. IQT pairs its investment with a development agreement in which IQT and the company work together to adapt the technology to meet IC needs. If successful, IC customers can buy the product directly from the company. IQT asserts that its model delivers rapid, cost-effective solutions: IQT identifies and adapts "ready-soon" technologiesâoff-the-shelf products that can be modified, tested, and delivered for use within 6 to 36 months depending on the difficulty of the problem. Approximately 75% of our deals involve multiple agencies from the [IC] and defense communities, which means a more cost efficient use of taxpayers' dollars. Profits from the liquidation of an IQT investment are allocated between additional IQT investing activity and other strategic information technology initiatives defined by the CIA, in accordance with a memorandum of understanding between the CIA and IQT. Army Venture Capital Initiative. In January 2002, Congress directed the Secretary of the Army to establish a venture capital investment corporation using $25 million previously appropriated to the Army for basic and applied research. The Army and Arsenal Venture Capital (formerly Military Commercial Technologies, Inc. (MILCOM)) jointly manage the AVCI through OnPoint Technologies, LLC (OPT), a not-for-profit corporation. In this relationship, the Army serves as strategic investor; provides guidance on technology priorities to OPT through its Communications Electronics Command (CECOM); and, through CECOM, provides administrative and contractual support to OPT. Army funds provided to OPT support investments and OPT expenses. Proceeds from the liquidation of investments are used in part to pay compensation to Arsenal Venture Capital with the balance used for new investments. In addition to providing $25 million in FY2002, Congress appropriated $12.6 million in FY2003 and $14.3 million in FY2005 for the AVCI. In addition, in FY2004, the Army reprogrammed $10 million for the AVCI. Since FY2005, Congress has not appropriated funds to the AVCI. AVCI invests alongside other VC firms at all stages of development, making investments of $500,000 to $2 million. AVCI asserts that for each dollar it has invested, private investors have provided $22. Focused initially on innovative power and energy technologies, AVCI's technology focus areas have expanded to include emerging technologies such as autonomy, cyber, health information systems, and advanced materials. AVCI seeks to foster the development of these technologies and their transfer to the soldier while attaining net returns for the investing organizations from commercial and defense markets. AVCI asserts that it is able to engage technology firms outside the traditional reach of DOD. Red Planet Capital. In September 2006, the National Aeronautics and Space Administration (NASA) announced a partnership with Red Planet Capital, Inc., a non-profit organization, to establish a venture capital fund, Red Planet Capital (RPC). The fund was "to support innovative, dual-use technologies [to] help NASA achieve its mission, [and] better position these technologies for future commercial use." NASA was to provide strategic direction and technical input to RPC, while the organization's principals were to identify investment opportunities, perform due diligence, and manage its equity investments. NASA intended to invest approximately $75 million over five years. Congress provided $6 million for RPC in FY2007. In FY2008, President George W. Bush proposed termination of the program: Government-sponsored venture capital funds provide a mechanism for Government agencies to indirectly take equity stakes in private firms, which potentially creates significant conflicts of interest and market distortions. The Administration believes that this mechanism poses difficult challenges to Government oversight and should only be used in exceptional situationsâ¦. The Administration further evaluated the fund and determined that, for NASA, these funds are better directed towards current priorities that will produce cost-effective, ascertainable outcomes. Congress provided no further appropriations for RPC. According to NASA, the fund was eliminated before it took an equity stake in any company. A RAND Corporation study states that RPC made a single investment prior to its termination, though it did not specify the amount. Summary:	null	96	78,128	78,130	78,130	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Congress maintains an ongoing interest in the pace of U.S. innovation and technological advancement due to its influence on the economy, national security, public health, and other national goals. Historically, the federal government has played a significant role in supporting research and development (R&D)âespecially basic researchâthat has led to scientific breakthroughs and new technologies. The global landscape for innovation is rapidly evolvingâthe pace of innovation has increased and the composition of R&D funding has changed (i.e., private R&D investments are larger than public R&D investments and the U.S. share of global R&D has declined). These changes have led some to call for new approaches and the expansion of existing mechanisms to help the United States maintain its leadership role in innovation and technology. One mechanism that has received some attention is the possibility of establishing additional agency-related entities that would facilitate the use of private donations in federally generated research projects. In addition, such entities might play a role in the commercialization of new technologies. The potential establishment of such entities in statute raises several questions: What kinds of organizations has Congress established in the past to address similar needs in the federal government? What are the strengths and weaknesses of these potential models? What are the opportunities and risks of developing a new entity for federal R&D using one of these models? The varied organizational arrangements of the executive branch have resulted from more than two centuries of legislative and administrative actions. These arrangements reflect a diversity of viewpoints, policy preferences, and political goals among the thousands of elected and appointed officials who have played a role in creating and shaping them. During the middle of the 20 th century, hybrid organizational formsâincorporating both public and private characteristicsâbegan to grow in number. These organizational forms, sometimes collectively referred to as "quasi-governmental entities," differ from one another in their specific features, relationship to the federal government, funding mechanisms, purposes, levels of accountability to elected officials, and use of private sector incentives and efficiencies, among other characteristics. Agency-related nonprofit research foundations and corporations fall into this category of organizations. Background on Quasi-Governmental Entities Working with successive administrations, Congress has established, or provided for the establishment of, many quasi-governmental entities. Some of the considerations that contributed to their creation and development were linked to political and policymaking dynamics that were idiosyncratic to the specific time and issue at hand. Nonetheless, observers have identified some common purposes for, and expected benefits of, establishing such entities: providing for stable funding during federal budget tightening and uncertainty; freeing a program from general government management laws, particularly those pertaining to caps on personnel and compensation; harnessing business principles and mechanisms with the aim of providing government-driven solutions without the "red tape" associated with the federal bureaucracy; and providing authorities tailored to the desired mission and functions that allow flexible approaches not typically allowed under statutes or regulations, such as those in the area of financial management. In comparison to traditional government agencies, quasi-governmental entities of various kinds have been touted for their potential to harness business-like entrepreneurial incentives and drive, greater managerial flexibility, and increased employee input in decisionmaking to better carry out the entity's responsibilities. As quasi-governmental organizations have grown in number and variety, some observers have criticized the exemption from government management laws of many such entities. A complex legal framework has been established over time to guide government agencies so that their actions adhere to the values of democratic governance, such as accountability, transparency, and fairness. It might be difficult for stakeholders to verify on an ongoing basis that the activities of a quasi-governmental entity, established by statute and vested with the power to carry out some public purpose, are directed to the public good rather than private gain without the routine accountability and transparency provided by this legal framework. Many of these laws and regulations specify the processes by which action must be taken. Some have criticized such governmental processes as "red tape," particularly in cases where they appear to have been applied overzealously, slowly, or seemingly without regard for an individual's or business's need for a service or flexibility. Arguably, quasi-governmental entities involve a tradeoff: What appears to some to be red tape during an administrative encounter may appear to others to be an essential accountability or transparency mechanism. Most federal agencies are funded through the annual appropriations process, and Congress has sometimes used the "power of the purse" to influence agency priorities and activities. Most federal agencies are headed by appointees of the President subject to Senate advice and consent, and the confirmation process provides Senators with an opportunity to discuss agency issues and concerns with these leaders. Congress establishes, or provides for the establishment of, quasi-governmental entities, but it might not have the same level of influence over them as it does over conventional federal agencies. Congressional committees have reviewed the actions and structure of some of these entities during oversight hearings, and Congress has sometimes enacted changes to their enabling statutes. At the same time, many quasi-governmental entities do not receive appropriated funds and are not led by advice and consent appointees, shielding them from two potential avenues of congressional influence. In addition to criticisms related to oversight, accountability, and transparency, some have questioned whether private sector management techniques are always appropriate for managing government functions. Most public administration scholars have agreed that public enterprises can benefit from some general management mechanisms developed in the private sector. Some scholars have argued, however, that the blanket application of private sector management assumptions to the public sector might miss important differences between the two. These differences include, for example, the role of constitutional law. As one public administration scholar stated, "although politicians, reformers, and media pundits often call for running government like a business, constitutional law makes the public's business very different from others." Some observers also have noted differences in the "bottom line" of the two sectors, and the consequent complexity associated with measuring performance in accomplishing a public purpose. This report discusses a specific category of quasi-governmental entities: agency-related nonprofit organizations that have been established in statute for the express purpose of advancing or facilitating the R&D mission of a federal agency. It describes the characteristics of several illustrative organizations of this type. It examines the available record of these entities' performances and discusses related praise and criticism of these organizational arrangements. Finally, the report identifies potential issues for consideration related to oversight of existing quasi-governmental R&D support organizations as well as potential issues for consideration should Congress elect to establish similar organizations. Existing Agency-Related Nonprofit R&D Organizations Congress has created a number of agency-related nonprofit research foundations and corporations to advance the R&D needs of the federal government and to overcome perceived barriers associated with federal agencies' ability to partner or otherwise engage with industry, academia, and other entities. The stated goals and potential benefits of these quasi-governmental R&D support organizations are that they may: provide a flexible and efficient mechanism for establishing public-private R&D partnerships (see the box, "What Are Public-Private Partnerships?" for more information); enable the solicitation, acceptance, and use of private donations to supplement the work performed with federal R&D funds; increase technology transfer and the commercialization of federally funded R&D; improve the ability of federal agencies to attract and retain scientific talent, including through the use of fellowships, personnel exchanges, and endowed positions; and enhance public education and awareness regarding the role and value of federal R&D. The following sections provide a brief overview of the purpose and intent, governance structure, and federal funding of selected congressionally mandated, federal agency-related nonprofit research foundations and corporations. The foundations discussed include those connected with the work of the National Institutes of Health (NIH), the Centers for Disease Control and Prevention (CDC), the U.S. Food and Drug Administration (FDA), the U.S. Department of Agriculture (USDA), and the Uniformed Services University of the Health Sciences (USU). Nonprofit research and education corporations associated with the work of the Department of Veterans Affairs (VA) are also discussed. All the foundations discussed have been funded through a combination of public and private monies and foster public-private R&D partnerships. However, the level of public support received by the foundations differs, as do the composition and appointment of their governing boards. Federal agencies and Congress have also initiated the creation of other organizations and entities to advance the R&D needs of federal agencies. Federally initiated venture capital firms and strategic investment initiatives, including In-Q-Tel, are often mentioned as an effective model. See the Appendix , "Federally Initiated and Funded Venture Capital Firms," for more information and illustrative examples of such organizations. Foundation for the National Institutes of Health (FNIH) In 1990, Congress directed the Secretary of Health and Human Services (HHS) to establish a nonprofit corporationâthe National Foundation for Biomedical Research, which is now known as the Foundation for the National Institutes of Health (FNIH). Initially, the foundation was tasked with attracting and retaining internationally known scientists to NIH "by offering competitive support for salaries, equipment, and space" through privately funded endowed positions. In 1993, Congress broadened the purpose of the foundation to include "support [for] the National Institutes of Health in its mission, and to advance collaboration with biomedical researchers from universities, industry, and nonprofit organizations." According to FNIH, the foundation creates public-private partnerships and alliances to advance breakthrough biomedical discoveries that can change and improve the quality of people's lives. FNIH raises funds, provides scientific expertise, and administers research programs to address a wide range of health challenges in support of NIH's mission. FNIH also supports the training of new researchers, supports patient programs, and organizes health-related educational events and symposia. One example of an FNIH-initiated project is the Biomarkers Consortium. FNIH manages the consortiumâconsisting of 32 companies, 15 nonprofit organizations, NIH, and FDAâwith the goal of increasing the identification, development, and regulatory approval of biomarkers to support and improve drug development, preventative medicine, and medical diagnostics. In 2018, FDA approved the use of a new biomarkerâsupported by the consortiumâthat is expected to improve the detection of kidney injury in healthy volunteers participating in clinical drug trials. FNIH's governance structure and powers are specified in its organic act and bylaws. FNIH is governed by a board of directors composed of non-voting, ex officio members and voting, appointed members with day-to-day operations overseen by an executive director. Congress designated certain Members of Congress and federal officials as ex officio board members and tasked them with appointing the initial members of the board from a list of candidates provided by the National Academy of Sciences. According to FNIH's bylaws, the number of appointed board members must be at least 6 and no more than 32; the term of an appointed member is 3 to 5 years; there is no limit on the number of terms an appointed member may serve; and any vacancies in the membership of the board shall be filled through election by the board. Congress empowered the board to establish bylaws to govern the general operations of the foundation, including policies for the acceptance, solicitation, and disposition of donations and grants. It also required the board to ensure that the bylaws do not compromise, appear to compromise, or reflect unfavorably on NIH and the ability of NIH to fulfill its responsibilities to the public. Furthermore, Congress made the board of directors accountable for "the integrity of the operations of the Foundation" through the development and enforcement of standards of conduct, financial disclosure statements, and conflict of interest policies and procedures. FNIH operations and activities have been funded through a combination of private donations and a share of NIH appropriations. According to FNIH, since its initial incorporation in 1996, the foundation has raised more than $1 billion in support of NIH's mission. According to tax filings, FNIH provided NIH with $22.6 million in assistance in 2017 and $16.9 million in 2016. Congress authorized the Director of NIH to "provide facilities, utilities and support services to the Foundation if it is determined by the Director to be advantageous to the research programs of the National Institutes of Health" and to transfer no less than $500,000 and no more than $1.25 million of the agency's annual appropriations to FNIH. Between FY2015 and FY2019, NIH transferred between $1 million and $1.25 million annually to FNIH for administrative and operational expenses (less than 0.01% of NIH's annual budget). In the President's FY2020 budget, NIH requested $1.1 million for this purpose. Additionally, since FY2008, FNIH has received $602,803 in federal grants, contracts, and other financial assistance. National Foundation for the Centers for Disease Control and Prevention In 1992, Congress authorized the establishment of the National Foundation for the Centers for Disease Control and Prevention (CDC Foundation) to "support and carry out activities for the prevention and control of diseases, disorders, injuries, and disabilities, and for promotion of public health." A House committee report stated: In the midst of budget restraint and personnel limitations, CDC itself is often strained to meet the basic demands of its mission. Efforts to experiment (some of which will necessarily fail), to do long-term planning, and to recruit and retain temporary staff are usually luxuries that the agency cannot afford, however productive they may ultimately be. The Committee has, therefore, undertaken to create a mechanism for the establishment of a private non-profit foundation to provide these innovative and supplementary activities in public health in association with the CDC. Once established, such a foundation could seek private support for these efforts from both individuals and organizations, and could bring charitable funds and flexibility to these goals. The CDC Foundation is authorized to support a number of activities, including using private funds to establish endowed positions at CDC; creating programs for state, local, and international public health officials to work and study at CDC; conducting forums for the exchange of public health information; and funding research and other public health studies. The foundation guidelines state that it: helps CDC pursue innovative ideas that might not be possible without the support of external partners.... CDC Foundation partnerships help CDC launch new programs, expand existing programs that show promise, or establish a proof of concept through a pilot project before scaling it up. In each partnership, external support gives CDC the flexibility to quickly and effectively connect with other experts, information and technology needed to address a public health challenge. For example, in 2018, the CDC Foundation used funding from the United Nation Children's Fund (UNICEF) to create a partnership between researchers from CDC, the Georgia Institute of Technology, and Micron Biomedical to develop a dissolving measles and rubella microneedle vaccination patch. While the current measles and rubella vaccination is effective, challenges associated with delivery of the vaccine that have impeded eradication efforts. For example, the vaccine must be refrigerated until it is injected, and it must be administered by a trained medical professional. The dissolving microneedle patch has the potential to overcome such challenges and improve vaccination coverage. The CDC Foundation's governance structure and powers are specified in statute and through the foundation's bylaws. The CDC Foundation is governed by a board of directors composed of appointed members and overseen by an executive director. Congress created a committee composed of representatives from the public health and nonprofit sectors to incorporate the foundation, to establish its general policies and initial bylaws, and to appoint the initial members of the board of directors. The term of service of a board member is five years, and any vacancies in the membership of the board are filled through appointment by the board. Congress tasked the CDC Director with serving as a liaison between the agency and the CDC Foundation, but did not designate the CDC Director as an ex officio member of the board. According to the CDC Foundation, such an arrangement guarantees that the foundation remains independent from CDC, while ensuring that the CDC Foundation's "programs and activities have the greatest possible impact for CDC and public health." Additionally, Congress required the board of directors to establish bylaws and general policies for the foundation, including policies for ethical standards, the acceptance and disposition of donations, and the general operation of the foundation. Congress required that the bylaws not reflect unfavorably upon the ability of the foundation or CDC to carry out its responsibilities or official duties in a fair and objective manner; or compromise, or appear to compromise, the integrity of any governmental program or any officer or employee involved in such program. CDC Foundation operations and activities have been funded through a combination of private donations and a share of CDC appropriations. Since 1995, the CDC Foundation has raised more than $800 million in support of CDC and its mission. In both 2015 and 2016, the CDC Foundation transferred $5.6 million to CDC. Additionally, the CDC Foundation provided the agency with $38.5 million in noncash donations (e.g., insecticides and contraceptives in response to the Zika virus) over that same period. Congress authorized the CDC to provide the CDC Foundation with $1.25 million annually (roughly 0.02% of CDC's annual budget). According to the CDC Foundation's audited financial statements, CDC has provided the foundation with a $1.25 million for operating expenses each year since 2012. Additionally, since FY2008, the CDC Foundation has received $55.4 million in federal grants, contracts, and other financial assistance. Reagan-Udall Foundation for the Food and Drug Administration In 2007, Congress established the Reagan-Udall Foundation for the Food and Drug Administration (Reagan-Udall Foundation) with the purpose of advancing FDA's mission "to modernize medical, veterinary, food, food ingredient, and cosmetic product development, accelerate innovation, and enhance product safety." The duties of the Reagan-Udall Foundation include identifying unmet needs and supporting regulatory science research and other programs to improve the development, manufacture, and evaluation (including post-market evaluation) of FDA-regulated products. According to the Reagan-Udall Foundation, it accomplishes its tasks by establishing public-private research collaborations, ensuring new knowledge is in the public domain, allowing broad-based participation, training the next generation of regulatory scientists, and leveraging outside resources for its activities. In 2017, the Reagan-Udall Foundation launched the Innovation in Medical Evidence Development and Surveillance (IMEDS) program which provides FDA regulated industries, universities, and nonprofits with access to distributed electronic healthcare data that can be used to evaluate medical product safety and assess drug effectiveness. Thus far, IMEDS is the largest program supported and managed by the foundation. The governing structure, purposes, and powers of the Reagan-Udall Foundation are specified in the statute establishing the foundation and further defined by the foundation's bylaws. The Reagan-Udall Foundation is governed by a board of directors composed of appointed and ex officio members, including the FDA Commissioner and the Director of NIH. A board-appointed executive director oversees the day-to-day operations of the foundation. Congress directed federal officialsâFDA Commissioner, NIH Director, CDC Director, and the Director of the Agency for Healthcare Research and Qualityâto appoint the initial board members from candidates provided by the National Academy of Sciences, patient and consumer advocacy groups, professional scientific and medical societies, and industry trade organizations. Subsequent to these initial appointments, board vacancies are to be filled through appointment by the board. According to the foundation's bylaws, the board of directors shall be composed of no more than 17 appointed members, including no more than 5 members from the general pharmaceutical, device, food, cosmetic and biotechnology industries and at least 3 members from academic research organizations, 2 members representing patient or consumer advocacy organizations, and 1 member representing health care providers. Furthermore, Congress directed the board of directors to craft bylaws for the foundation, including establishing policies for ethical standards, conflicts of interest, the acceptance, solicitation, and disposition of donations and grants, carrying out memoranda of understanding and cooperative agreements, and for review and awarding of grants and contracts. As detailed in financial reports, the Reagan-Udall Foundation has raised or received nearly $21 million in support of the foundation since 2009, including grants, contributions, and funds transferred from FDA. Congress authorized FDA to provide the Reagan-Udall Foundation with between $500,000 and $1.25 million annually. FDA transferred $1.25 million to the Reagan-Udall Foundation in 2017 and $1 million in 2016 (less than 0.03% of FDA's annual budget). Additionally, since FY2008, the Reagan-Udall Foundation has received $1 million in federal grants, contracts, and other financial assistance. Foundation for Food and Agriculture Research (FFAR) In 2014, Congress created the Foundation for Food and Agriculture Research (FFAR) to advance the research mission of the U.S. Department of Agriculture (USDA) by focusing on agricultural issues of national and international significance, including food security and safety. In establishing FFAR, Congress expressed the importance of American leadership in meeting the needs of a growing population, cited the difficulty associated with overcoming declining federal investments in agriculture research, and highlighted the potential role of the foundation in "supplementing USDA's basic and applied research activities." According to the conference report: The Managers do not intend for the Foundation to be duplicative of current funding or research efforts, but rather to foster public-private partnerships among the agricultural research community, including federal agencies, academia, non-profit organizations, corporations and individual donors to identify and prioritize the most pressing needs facing agriculture. It is the Managers view that the Foundation will complement the work of USDA basic and applied research activities and further advance USDA's research mission. Furthermore, the Managers do not intend in any way for the Foundation's funding to offset or allow for a reduction in the appropriated dollars that go to agricultural research. FFAR is authorized to award grants, or enter into contracts, memoranda of understanding, or cooperative agreements with universities, industry, non-profits, USDA, or consortia, to "efficiently and effectively advance the goals and priorities of the Foundation." It is required to identify unmet and emerging needs, facilitate technology transfer, and to coordinate its activities with those of USDA to minimize duplication and avoid potential conflicts with the department. The foundation currently supports research in six challenge areasâsoil health, sustainable water management, next generation crops, advanced animal systems, urban food systems, and the health-agriculture nexusâin addition to supporting graduate fellowships and early and mid-career awards for agricultural researchers. FFAR also supports strategic initiatives with the potential to further the foundation's mission. For example, in 2017, FFAR awarded researchers at the University of Illinois $15 million to expand their work in improving photosynthesis efficiency and crop yields to soybeans and other crops critical to food security in developing countries. FFAR's investment was matched by $30 million from the Bill and Melinda Gates Foundation and the United Kingdom Department for International Development. According to FFAR, public-private partnerships are generally funded through a competitive grants process or through direct contract; however, the foundation also uses prize competitions to encourage the development of new technologies. The governance structure of FFAR is specified in the statute establishing the foundation and further defined by the foundation's bylaws. FFAR is governed by a board of directors composed of appointed and ex officio members. The day-to-day operations of FFAR are overseen by an executive director, who is appointed by the board. Congress required the ex officio members of the boardâthe Secretary of Agriculture, the Under Secretary of Agriculture for Research, Education and Economics, the Administrator of the Agriculture Research Service, the Director of the National Institute of Food and Agriculture, and the Director of the National Science Foundationâto select the initial appointed board members from lists of candidates provided by the National Academy of Sciences and by industry. According to FFAR's bylaws, the board must consist of no less than 15 and no more than 21 appointed members; any vacancies in the membership of the board shall be filled through appointment by the board; a board member's term of service is 5 years; and a board member may be reappointed, but may not serve for more than 10 years. Additionally, Congress tasked the board of directors with crafting bylaws for the general operation of the foundation and with establishing ethical standards for the acceptance, solicitation, and disposition of donations and grants. Congress also required that the bylaws and policies of FFAR preserve the integrity of the foundation and USDA, including the development and enforcement of a conflict of interest policy. In addition to the board of directors, FFAR has established advisory councils for each of the foundation's challenge areas. According to FFAR, advisory council members provide board members and foundation staff with advice and recommendations on "program development and implementation, potential partnerships and other matters of significance" and represent a diverse set of industries, professional backgrounds, and geographic areas. FFAR activities and operations have been funded through a combination of public and private funds. Through the Agricultural Act of 2014 (), Congress provided FFAR with $200 million to enter into public-private partnerships and advanced agricultural research. However, federal funds can only be expended if the foundation secures matching funds from a non-federal source. In testimony before the Senate, the executive director of FFAR, Dr. Sally Rockey, stated: What we have discovered over the past two years is that we have two distinct advantages over other government-established research foundations. First is our public funding, which gives FFAR the flexibility to seek out diverse partnerships, especially with the private sector. Rather than raising money for a government agency, which is the model for most government established research foundations, FFAR leverages public fundingâmore than doubling that fundingâfor the public good and, in the process, develops a new community of partners. Second is our independence, which allows us to focus almost exclusively on results. When partners are focused just on the science and equally invested in seeing measurable outcomes as soon as possible, new partnerships may develop. In 2017, FFAR awarded 39 grants and $45.8 million in funding ($110.6 million when matching funds are included). In 2018, FFAR awarded 55 grants and $32.2 million in funding (more than $60 million when matching funds are included). USDA's Agricultural Research Service (ARS) was the recipient of three grants and $1.7 million in funding from FFAR ($3.6 million when matching funds are included) in 2018. In the Agriculture Improvement Act of 2018 ( P.L. 115-334 ), Congress directed the Secretary of Agriculture to transfer an additional $185 million to FFAR "to leverage private funding, matched with federal dollars to support public agricultural research"; however, these federal funds were not to be transferred until FFAR provided Congress with a strategic plan detailing how the foundation will become self-sustaining. Congress required the strategic plan to describe agricultural research opportunities and objectives identified by FFAR's advisory councils and approved by the board, and to provide transparency into the foundation's grant review and awards process. FFAR released the required strategic plan in 2019; the plan outlines several actions that the foundation will pursue to diversify its funding base, but also indicates that federal funds are a "critical component of FFAR's model." Henry M. Jackson Foundation for the Advancement of Military Medicine In 1983, Congress created the Foundation for the Advancement of Military Medicineânow known as the Henry M. Jackson Foundation for the Advancement of Military Medicine (HJF)âto carry out and participate in cooperative medical research and education projects with the Uniformed Services University of the Health Sciences (USU). In describing the purpose and role of HJF, Congress stated: The Foundation will be a nonprofit, charitable corporation which will receive gifts, grants and legacies on behalf of both itself and the Uniformed Services Universityâ¦. [By] channeling private resources to the Uniformed Services University, the Foundation will help the University and military medicine maintain advanced scientific teaching and research. In addition, the Foundation will support the growing international role of the University in its cooperative research in other countries and in its programs with medical schools training military officers both here and abroad. In general, HJF implements its mandate by offering research support and services to USU and other military research centers and facilities, including proposal development, research program administration and management, regulatory compliance, technical staffing, and technology transfer assistance. P.L. 98-132 authorized HJF to enter into contracts with USU "for the purposes of carrying out cooperative enterprises in medical research, medical consultation, and medical education, including contracts for the provision of such personnel and services as may be necessary to carry out such cooperative enterprises." According to HJF, more than 1,100 of HJF's employees participated in or supported collaborative research and education projects at USU in FY2018. For example, HJF entered into a license agreement from the USU-HJF Joint Office of Technology Transfer with Profectus BioSciences to develop a human vaccine for the Nipah virusâan infection that can lead to inflammation of the brain and respiratory illnessâbased on a technology created more than 15 years ago by a USU scientist. Specifically, HJF, USU, and Profectus are collaborating on the development of a clinical assay to evaluate the Nipah virus vaccine response. The collaborative research is supported, in part, by NIH. HJF is governed by a council of directors composed of appointed and ex officio members, including the chair and ranking members of the Senate and House Committees on Armed Services and the Dean of USU. The ex officio members are responsible for appointing the other members of the council of directors. In 2018, Congress increased the number of appointed members from four to six. A council-appointed executive director oversees the day-to-day operations of HJF. In 1986, Congress appropriated $10 million to HJF "to support the purposes of the Foundation, its on-going educational and public services programs and to serve as a memorial to the late Senator Henry M. Jackson." However, HJF's revenue is generally derived from the administration of grants and contractsâHJF manages or administers grants and contracts on behalf of USU or other military research centers and collects indirect costs or overhead associated with the provided services. According to HJF, in FY2018, the foundation received $483.9 million in grants and contracts and expended $468.7 million on program services associated with research grants and contracts. According to USAspending.gov, since FY2008, HJF has received $6.1 billion in federal grants, contracts, and other financial assistance, primarily from the Department of Defense. Department of Veterans Affairs Nonprofit Research and Education Corporations In 1988, Congress authorized the Secretary of Veterans Affairs (VA) to establish a nonprofit corporation (NPC) at any of the VA medical centers "to provide a flexible funding mechanism" and facilitate the conduct of approved research. Congress extended the authority of NPCs in 1999 to include approved education and training activities (e.g., educational courses for patients and families and training for VA employees associated with new technologies or specialties). Congress also authorized any NPC to facilitate the conduct of approved research and education activities at more than one VA medical center (such NPCs are known as multi-medical center research corporations). In general, NPCs implement their mandate by providing research and management services to VA medical researchers conducting projects using non-VA funds. In describing the need for NPCs, Congress indicated that support for research from non-VA funding sources, including NIH, DOD, private foundations, and companies, benefited veteran patients, where existing mechanisms for administering non-VA funds had disadvantages. A committee report on the authorizing legislation stated: Funds that are channeled through affiliated medical schools [to VA medical centers] are subject to the terms and conditions which the school applies to funds obtained by researchers employed by the school. In many cases, this means that a percentage, which varies from 15 to 40 percent or more, of the funds obtained is retained by the medical school for "overhead" and related expenses of the school. In contrast, by authorizing NPCs to accept, administer, retain, and spend non-VA research funding on behalf of VA investigators, indirect costs or overhead derived from such funds could be applied to the VA medical center. According to the U.S. Government Accountability Office (GAO): Nonprofit corporations support VA's research environment by funding a portion of the department's research needs, such as laboratory equipment and improvements to infrastructure, and by providing flexible personnel and contracting arrangements to respond to investigators' needs. The governance structure of NPCs is specified in the statute providing the authority for their establishment and further defined by VA procedures and instructions. Each NPC is governed by a board of directors with its day-to-day operations overseen by an executive director. The VA Secretary is responsible for appointing all members of an NPC's board of directors. Each board of directors must include the director of the VA medical center, the chief of staff, and associate chief(s) of staff of the medical centerâall acting within their official capacitiesâand two non-federal members. Additionally, the board of directors of a multi-medical research corporation must include the director of each of the VA medical centers served by the NPC. The executive director of an NPC is appointed by its board of directors with the concurrence of the VA Under Secretary of Health. Congress placed NPCs under the jurisdiction of VA's Inspector General; required each NPC to conduct regular audits and provide an annual statement of operations, activities, and accomplishments to VA; and made all NPC employees, including members of the board of directors, subject to conflict of interest policies adopted by the NPC. Additionally, VA conducts oversight of NPCs through the agency's Nonprofit Program Oversight Board (NPOB), the Nonprofit Program Office (NPPO), and the Veteran Health Administration's Chief Financial Officer (VHA CFO). Specifically: The NPOB is VA's senior management oversight body for NPCs. It reviews the activities of NPCs to ensure they are consistent with VA policies and makes recommendations to the VA Secretary (through the Under Secretary of Health) regarding any changes in NPC policy. The NPPO serves as a liaison between VHA and the NPCs. It provides oversight, guidance, and education to the NPCs to ensure compliance with VA policies and regulations, conducts triennial reviews of NPCs, compiles NPC data for an annual report to Congress, and ensures any corrective measures are implemented. The VHA CFO provides financial oversight of NPCs. There are currently 83 NPCs located in 42 states, Puerto Rico, and the District of Columbia. According to VA, in 2017, NPCs generated $261 million in revenueâspending 84% on research, 15% on administrative overhead, and 1% on education related activities. VA describes NPCs as "self-sustainingâ¦. [F]unds are not received into a government account. No appropriation is required to support these activities." However, approximately 70% of the revenue generated by NPCs in 2017 ($183 million) was from federal sourcesâprimarily NIH and DOD grants and contracts. VA states that from 2008 to 2017 NPCs contributed $2.2 billion to VA research. In 2018, NPCs generated $236 million in revenues. Issues for Congress In an April 2019 report, the National Institute of Standards and Technology described benefits that might be realized if Congress provided all federal R&D agencies with the authority to establish agency-related nonprofit research foundations. For example, they can actively seek "gifts and other monetary donations from private donors and organizations," and they "have facilitated technology commercialization and generated revenue to reinvest in R&D." In addition, while government agencies are, with certain exceptions, subject to management laws designed to ensure accountability, transparency, and fairness, agency-related foundations may be exempt from them. Such exemptions may facilitate flexibility, but they may also make it difficult for stakeholders to verify on an ongoing basis that the foundation's activities are directed to the public good rather than private gain. Prior to extending the authority to establish agency-related nonprofit research foundations and corporations to additional federal agencies and laboratories there are a number of issues that Congress might consider. The following sections examine some of these issues, including transparency, independence, and effectiveness. Conflict of Interest and Industry Influence To date, most federal agencies with affiliated nonprofit research foundations or corporations work in the area of medicine and public healthâan area where public trust is considered essential. The conflict of interest policies of affiliated nonprofit research foundations and corporations vary. For example, all HJF employees are required to submit annual conflict disclosure and certification forms; under its cooperative agreement with the CDC, the CDC Foundation is required to conduct a conflict of interest review prior to accepting a gift for the CDC from a potential donor; and VA employees serving as NPC directors are subject to federal conflict of interest laws and regulations. Recent media reports and investigations have nevertheless raised concerns about conflicts of interest and the potential for undue industry influence in public-private R&D partnerships formed and managed by agency-related nonprofit foundations. According to some, industry involvement in R&D partnerships has the potential to erode public trust and confidence in federal agency decisionmaking, which may be based, in part, on the results of R&D supported by the public-private partnership. Others assert that issues associated with conflict of interest are overstated and rare, that other biasesâbeyond financial tiesâalso influence research, and that policy responses to such concerns have been overly burdensome and are impeding the translation of R&D into new products and technologies. Three recent examples illustrate these conflict of interest and undue influence concerns. R&D Partnership Between the National Football League and NIH In 2015 and 2016, reporting by ESPN and others alleged that the National Football League (NFL) attempted to influence the selection of a grant recipient by NIH for a study on aÂ degenerative brain disease known as CTE, or chronic traumatic encephalopathy. NIH had planned to fund the CTE study from a $30 million NFL donation to NIH through FNIH. Democratic committee staff of the House Committee on Energy and Commerce launched an investigation of the allegations and issued a report in May 2016. The report stated: Democratic Committee staff received evidence to support the allegations that the NFL inappropriately attempted to influence the selection of NIH research applicants funded by the NFL's $30 million donation to NIHâ¦. Despite the NFL's attempts to influence the selection of research applicants, the integrity of the peer review process was preserved and funding decisions were made solely based on the merit of the research applications. The report included findings and recommendations directed at FNIH and its role in the creation and management of R&D partnerships between NIH and the private sector. Specifically, the investigation found that "FNIH did not adequately fulfill its role of serving as an intermediary between NIH and the NFL" and recommended the following actions: FNIH must establish clearer guidelines regarding donor communications with NIH. FNIH must come to a mutual understanding with donors at the beginning of the process regarding their degree of influence over the research they are funding and remind donors that NIH policy prohibits them from exerting influence at any point in the grant decision-making process. FNIH should provide donors with the clear, unambiguous language from the NIH Policy Manual, which states that a donor may not dictate terms that include "any delegation of NIH's inherently governmental responsibilities or decision-making," or "participation in peer review or otherwise exert real or potential influence in grant or contract decision-making." NIH and FNIH should jointly develop a process to address concerns about donors acting improperly. FNIH issued the following statement in response to the report: The FNIH acted appropriately, with integrity and transparency, in fulfilling its mandate under SHRP [Sports and Health Research Program]. As acknowledged by the Democratic Staff report, the governing documents among the FNIH, NIH and NFL made clear that the NIH had exclusive control over the scientific and administrative aspects of the program. The report makes recommendations regarding communication issues that the FNIH has already identified and taken steps to address. The FNIH has strengthened protocols around communications among NIH, NIH researchers and FNIH donors that will prevent unauthorized contact among parties. The FNIH has had a long history of successful and productive public-private partnerships in support of the NIH mission. These adjustments to governing agreements will help ensure the success of future scientific partnerships in support of human health. On September 15, 2016, four Republican members of the House Committee on Energy and Commerce sent a letter to the Inspector General of the Department of Health and Human Services related to the allegations of undue influence by the NFL. The letter stated: There appear to be important questions and concerns related to these events that have not been adequately vetted or addressedâ¦. This grant award has become the source of tremendous public debate and, therefore, clear answers and lessons are necessary. For these the reasons, the Committee refers this matter to your attention and requests a thorough and objective review by the Office of the Inspector General to assess whether the policies and procedures concerning public-private partnerships under the authority of FNIH were followed, and if not, what revisions or reforms should be considered. This will help SHRP, and other public-private partnerships, avoid similar distractions in the future so all parties can focus on what matters mostâthe science. Opioid Epidemic Public-Private Partnership In 2018, NIH was engaged with FNIH and potential donors, including pharmaceutical companies, regarding the development of a public-private partnership that would seek to address the opioid crisis. Potential conflicts of interest and ethical concerns were raised by both NIH and FNIH. The Director of NIH asked a working group of the Advisory Committee to the NIH Director (ACD) and the FNIH Board to examine the appropriateness of establishing a partnership between NIH, FNIH, and various pharmaceutical companies. On March 16, 2018, the FNIH Board held a meeting to discuss the possibility of forming such a partnership. The FNIH Board decided that an approach that relies disproportionately on input and financing from pharmaceutical companies is not appropriate in this circumstance. The FNIH is uncomfortable seeking or receiving monetary donations from any pharmaceutical company or industry representative at this time to support implementation of the research plan as presented. Doing so poses unacceptably high risk of public skepticism concerning the eventual scientific outcomes given the responsibility some companies may bear in having created the crisis. Also, it would likely undermine public confidence in the many other valuable public-private partnerships that the NIH and FNIH have created and will create to improve human health. The principal recommendation of the A CD working g roup was that "to mitigate the risk of real or perceived conflict of interest, it would be preferable if only Federal funds were used to support the research efforts included in this public-private partnership." The working group also offered a number of recommendations if a public-private partnership were to be established, including that any industry funding should be provided without preconditions and in full, that NIH should publicly disclose its research plan for the partnership, and that the agency should clarify and define the governance structure associated with the collaboration. In April 2018, NIH launched the Helping to End Addiction Long-term (HEAL) Initiativeâan agency-wide "effort to speed scientific solutions to stem the national opioid public health crisis." In a press release on the use of public-private partnerships as part of HEAL, the Director of NIH stated: I fully embrace [the ACD Working Group's] recommendation that NIH should vigorously address the national opioid crisis with government funds and decline cash contributions through partnerships from the private sector. It is clear, however, that the opioid crisis is beyond the scope of any one organization or sector. NIH and biopharmaceutical companies bring unique skills and assets to bear on this crisis. NIH will use the ACD guidance as we continue our discussions with biopharmaceutical organizations to advance focused medication development for addiction and painâ¦We agree with and appreciate the ACD's guidance to verify donated assets and tailor the governance structures for each initiative that may be pursued through public-private partnerships to ensure appropriate oversight and guidance. Any partnerships that NIH does establish with biopharmaceutical organizations as part of the HEAL Initiative will be done with the utmost transparency. Coca-Cola Funding for Obesity Research Some have raised concerns regarding the ability of industry to influence CDC and FDA decisionmaking by way of donations to the CDC Foundation and Reagan-Udall Foundation. For example, some have questioned donations made by the Coca-Cola Company to the CDC Foundation for research and other activities associated with obesity and diet issues. In February, two members of Congress sent a letter asking the Department of Health and Human Services' Inspector General to "investigate the relationship between the CDC and Coca-Cola outlined in this report [a 2019 paper by Hessari et al.], determine whether there is a broader pattern of inappropriate industry influence at the agency, and make recommendations to address this issue." In addition to managing conflicts of interest that may result from public-private partnerships facilitated by an agency-related nonprofit foundation, a 2016 report by a working group of the Advisory Committee to the CDC Director noted the need for clarity in managing conflict of interest between the nonprofit foundation and the federal agency itself. The working group pointed out that the CDC Foundation "benefits financially from the grants it accepts and manages on the CDC's behalf," and noted that "ongoing oversight and management transparency are essential components of a conflict-of-interest policy, particularly where, as here, one of the partners is an agency whose greatest asset is the confidence of the public in its impartiality and integrity." Transparency and Accountability In response to concerns regarding conflict of interest and the potential for industry influence, in addition to the need to maintain public confidence in related decisionmaking, some have called for additional transparency in the development and management of public-private partnerships. These calls extend to agency-related nonprofit research foundations. For example, the Advisory Committee to the Director of the CDC recommended that the CDC should expect the CDC Foundation to provide the agency with a "complete record of evidence" and a "fully reasoned analysis" as to why a proposed public-private partnership would meet the agency's standards for entering into a private financial relationship. The advisory committee recommended that CDC only enter into a private financial relationship if the proposed project aligns with a stated CDC priority, the projected benefits to public health outweigh any potential risks to public trust in CDC, and the proposed project does not primarily benefit the private funder or position the private funder to exercise undue influence over CDC. Some have also called for the harmonization of policies, procedures, and standards used by federal agencies and agency-related nonprofit research foundations in the evaluation of proposed public-private partnerships and in addressing conflict of interest and undue influence concerns associated with such partnerships. In 2018, House appropriations report language directed both the CDC Foundation and FNIH to abide by existing reporting requirements and include in their respective annual reports the source and amount of all monetary gifts to the Foundation, as well as the source and description of all gifts of real or personal property. Each annual report shall disclose a specification of any restrictions on the purposes for which gifts to the Foundation may be used. The annual report shall not list "anonymous" as a source for any gift that includes a specification of any restrictions on the purpose for which the gift may be used. According to media reports, officials from FNIH and the CDC Foundation assert they are in compliance with existing disclosure requirements as outlined in their governing statutes and their annual reporting is similar to other nonprofit organizations. Independence and Oversight By design, quasi-governmental entities, including agency-related nonprofit research foundations and corporations, are independent from the federal government. Congress explicitly states in the statutes creating each of the organizations described above that the entity is "not an agency or instrumentality of the United States." In addition, these entities generally are not controlled by federal officials. However, Congress also structured these organizations so they would be associated with and in some instances largely reliant on the federal agencies they were created to support. The degree of independence an agency-related nonprofit research foundation or corporation hasâand by extension the degree of congressional oversight and influenceâvaries (i.e., the more independent, the less opportunity for oversight and vice versa). This variability can be ascribed, in large part, to the primary function of the organization and the governance structure established by Congress. For example, the primary function of HJF and the VA NPCs is to provide research and grant management services to USU and VA medical researchers, respectively. These researchers are full- or part-time federal employees who are, in general, conducting approved research using federal funds from other agencies (NIH and DOD). The financial strength of these entities is thus closely tied to the ability of USU and VA researchers to compete successfully for NIH, DOD, and other research grants. Additionally, the boards governing HJF and VA NPCs include Members of Congress and federal officials. Specifically, the board of a VA NPC must include the director, chief of staff, and associate chief(s) of staff of the VA medical centerâall acting in their official capacitiesâand the board of HJF includes the chair and ranking members of the Senate and House Committees on Armed Services. These factors likely make HJF and VA NPCs less independent than some of the other agency-related nonprofit foundations described in this report. However, given their dependencyâin particular on other federal fundsâseveral questions arise: Why are these entities needed? Are there alternative mechanisms for administering research funds from other federal agencies? Should these entities be soliciting more private funds? Comparatively, FNIH, the CDC Foundation, and the Reagan-Udall Foundation likely have more autonomy given their primary function of raising funds from the private sector to benefit and advance the mission of their affiliated federal agencies. Nonetheless, the success of these entities requires some level of interconnectedness to ensure their efforts are closely aligned with the priorities and needs of the federal agencies they support. Additionally, FNIH, the CDC Foundation, and the Reagan-Udall Foundation all receive administrative and operating costs from their affiliated federal agencies, in addition to having federal officials as ex officio members of their boards. These factors likely provide the federal agencies with the ability to influence and shape the relationship. The use of federal funds in supporting the operating expenses of these entities also provides a mechanism for congressional oversight. FFAR's purpose to advance the research mission of USDA is similar to that of FNIH, the CDC Foundation, and the Reagan-Udall Foundation. However, the way in which FFAR executes its missionâprimarily as a grant-making organizationâmay offer more independence. Congress tasked FFAR with developing and pursuing an agricultural R&D agenda that minimizes the duplication of existing USDA efforts and is focused on unmet needs and emerging areas of national and international significance. Currently, FFAR executes its R&D agenda by leveraging federal funds with non-federal sources. The use of federal funds provides Congress with an effective oversight mechanism. Congressional intent, however, is for FFAR to become self-sufficient. In the Agriculture Improvement Act of 2018 ( P.L. 115-334 ), Congress made the transfer of federal funds contingent upon the development of a strategic plan detailing how FFAR will become self-sustaining. Opportunities for congressional oversight or influence may diminish as FFAR becomes self-sustaining. That being said, FFAR's strategic plan states: This strategic planning and sustainability exploration demonstrates that FFAR requires Congressional funding to remain relevant, viable, to maintain velocity, and increase impact toward conquering the food and agriculture challenges of this timeâ¦. In the event that public funding for FFAR diminishes, the Foundation would be severely limited in its ability to deliver on the ambition and scale of impact that Congress originally envisioned. In this scenario, FFAR's capacity to fund ambitious, potentially transformative research projects would be restricted. Indeed, stakeholders indicate that FFAR will find it much more challenging to bring partners to the table and mobilize private funding as its credibility and matching power will be weakened without the "halo effect" of its Congressional funding and mandate. FFAR's strategic plan also indicates that the foundation will increase the non-federal matching requirement for some projects, diversify its co-funders, develop an annual fundraising program, pursue fees for services, and expand the size and number of consortia as part of its sustainability plan. Effectiveness and Need To date, the effectiveness of agency-affiliated nonprofit research foundations or corporations has not been formally assessed. In a 2002 report on the VA NPCs, GAO noted, "VA headquarters has not evaluated nonprofit corporations to measure their effectiveness or compare their operations. This type of high-level oversight and evaluation is a critical element of success." It is also unclear what might constitute an appropriate measure of success: number of partnerships formed? amount of private funds raised? number of technologies commercialized? Some have arguedâbased on the amount of private funds raisedâthat the Reagan-Udall Foundation is not meeting expectations and is less successful than the CDC Foundation and FNIH. The Reagan-Udall Foundation has raised approximately $21 million over the last decade for FDA. In comparison, FNIH provided NIH with that amount in a single year ($22 million in 2017). Lower than expected fundraising efforts have led some to question the purpose and need for the Reagan-Udall Foundation. It is difficult to determine the degree to which the partnerships developed and managed by some of the agency-affiliated nonprofit research foundations would have occurred in the absence of such foundations. Federal agencies engage in public-private partnerships through other mechanisms, including cooperative research and development agreements, and while federal agencies are not permitted to solicit gifts from the private sector, many are authorized to accept donations. Report language in the Senate energy and water appropriations bill for FY2020 directs the Department of Energy (DOE) to contract with the National Academy of Public Administration for a study that would assess existing agency-affiliated nonprofit research foundations to assist Congress in evaluating the merits of creating a DOE-related nonprofit research foundation. House appropriators included similar language in their version of the energy and water appropriations bill, but directed DOE to undertake the review on its own. Concluding Observations Congress established each of the agency-related nonprofit research foundations and corporations described in this report with the aim of advancing the R&D mission of the associated federal agency. While the way each organization pursues its mandate varies, three broad categories of activity emerge: (1) soliciting private funds to support R&D performed by federal scientists; (2) soliciting private funds (leveraged against federal funds in the case of FFAR) to support R&D performed by non-federal researchers; and (3) administering and managing research funds from federal and non-federal sources. These activities are often carried out as part of public-private R&D partnerships formed and managed by an agency-related nonprofit research foundation or corporation. While public-private partnerships are generally viewed as an effective mechanism for advancing the state of science and facilitating the transfer and commercialization of technologies to the marketplace, some say it is less clear whether agency-related nonprofit research foundations and corporations represent an effective model for the formation and management of such partnerships. Federal science agencies already have the authority to create partnerships, and many have the authority to accept gifts from individuals, nonprofits, and private sector firms in support of federal R&D and other agency activities. Federal agencies, however, are not permitted to solicit private funds, and many argue that the "red tape" associated with the establishment of public-private partnerships by federal agencies is a deterrent. This situation may cause some observers to raise the questionâwould a federal agency have achieved similar results in the absence of its agency-related nonprofit research foundation or corporation? While this question cannot be answered with any certainty, it does offer an opportunity for consideration of potential policy options. Among the options that Congress might consider are: crafting a broad, general nonprofit research foundation authority that federal science agencies could draw on to create an entity that meets their specific needs; examining the existing authorities of individual federal science agencies and, as appropriate, supplementing those authorities to increase the flexibility of an agency to enter into public-private partnerships; creating additional agency-related nonprofit research foundations on a case-by-case basis, tailored to the specific needs of particular federal science agencies; and maintaining the status quo, i.e., allowing agency-related nonprofit research foundations and corporations that currently exist to continue, and requiring other federal agencies to use their existing authorities to enter into public-private R&D partnerships and transfer federal technologies to the marketplace. If Congress decides to create additional agency-related nonprofit research foundations, clear articulation of purpose, role, and governance structure may be needed to maintain an appropriate balance between the flexibility associated with being a nongovernmental entity and the need for accountability, transparency, and public confidence in the results of R&D partnerships and other supported activities. Appendix. Federally Initiated and Funded Venture Capital Firms Over the last two decades, federal agencies and Congress have established several venture capital (VC) firms. The intent of these firms, including In-Q-Tel (IQT), the Army Venture Capital Initiative (AVCI), and Red Planet Capital (RPC), has been to help ensure agency access to leading-edge technologies and input into technology development to address mission needs. Several factors have contributed to the initiation of these organizations: a long-term shift in the composition of U.S. research and development funding from the federal government to the private sector; the substantial role of small start-ups in driving innovation, especially in information technology; and expanded U.S. and global commercial market opportunities that have diminished the relative attractiveness of serving the federal government market. In-Q-Tel. The Central Intelligence Agency (CIA), with congressional approval, established the first federal government-sponsored VC firm, In-Q-Tel, in 1999 . IQT is an independent, not-for-profit, non-stock company. It is a strategic investor that works closely with intelligence community (IC) entities and the Department of Defense (DOD). IQT's portfolio includes data analytics, cybersecurity, artificial intelligence, machine learning, ubiquitous computing, information technology solutions, communications, novel materials, electronics, commercial space, remote sensing, power and energy, and biotechnology. While the CIA has broad statutory authority in how it may expend its funds, according to a RAND Corporation report, the agency reportedly used an approach based on DOD's "other transaction" authority (10 U.S.C. 2371) for developing its contract with IQT. IQT has a management team and a board of trustees. The CIA is the executive agent for IQT. Federal agencies, primarily the CIA, provide funding to IQT, which in turn provides investments to selected firms based on needs articulated by the CIA. The In-Q-Tel Interface Center (QIC), a small group of CIA employees, serves as a liaison between the CIA and IQT. IQT investments generally range from $500,000 to $3 million. IQT asserts that for each dollar it has invested, private investors have provided $16. IQT pairs its investment with a development agreement in which IQT and the company work together to adapt the technology to meet IC needs. If successful, IC customers can buy the product directly from the company. IQT asserts that its model delivers rapid, cost-effective solutions: IQT identifies and adapts "ready-soon" technologiesâoff-the-shelf products that can be modified, tested, and delivered for use within 6 to 36 months depending on the difficulty of the problem. Approximately 75% of our deals involve multiple agencies from the [IC] and defense communities, which means a more cost efficient use of taxpayers' dollars. Profits from the liquidation of an IQT investment are allocated between additional IQT investing activity and other strategic information technology initiatives defined by the CIA, in accordance with a memorandum of understanding between the CIA and IQT. Army Venture Capital Initiative. In January 2002, Congress directed the Secretary of the Army to establish a venture capital investment corporation using $25 million previously appropriated to the Army for basic and applied research. The Army and Arsenal Venture Capital (formerly Military Commercial Technologies, Inc. (MILCOM)) jointly manage the AVCI through OnPoint Technologies, LLC (OPT), a not-for-profit corporation. In this relationship, the Army serves as strategic investor; provides guidance on technology priorities to OPT through its Communications Electronics Command (CECOM); and, through CECOM, provides administrative and contractual support to OPT. Army funds provided to OPT support investments and OPT expenses. Proceeds from the liquidation of investments are used in part to pay compensation to Arsenal Venture Capital with the balance used for new investments. In addition to providing $25 million in FY2002, Congress appropriated $12.6 million in FY2003 and $14.3 million in FY2005 for the AVCI. In addition, in FY2004, the Army reprogrammed $10 million for the AVCI. Since FY2005, Congress has not appropriated funds to the AVCI. AVCI invests alongside other VC firms at all stages of development, making investments of $500,000 to $2 million. AVCI asserts that for each dollar it has invested, private investors have provided $22. Focused initially on innovative power and energy technologies, AVCI's technology focus areas have expanded to include emerging technologies such as autonomy, cyber, health information systems, and advanced materials. AVCI seeks to foster the development of these technologies and their transfer to the soldier while attaining net returns for the investing organizations from commercial and defense markets. AVCI asserts that it is able to engage technology firms outside the traditional reach of DOD. Red Planet Capital. In September 2006, the National Aeronautics and Space Administration (NASA) announced a partnership with Red Planet Capital, Inc., a non-profit organization, to establish a venture capital fund, Red Planet Capital (RPC). The fund was "to support innovative, dual-use technologies [to] help NASA achieve its mission, [and] better position these technologies for future commercial use." NASA was to provide strategic direction and technical input to RPC, while the organization's principals were to identify investment opportunities, perform due diligence, and manage its equity investments. NASA intended to invest approximately $75 million over five years. Congress provided $6 million for RPC in FY2007. In FY2008, President George W. Bush proposed termination of the program: Government-sponsored venture capital funds provide a mechanism for Government agencies to indirectly take equity stakes in private firms, which potentially creates significant conflicts of interest and market distortions. The Administration believes that this mechanism poses difficult challenges to Government oversight and should only be used in exceptional situationsâ¦. The Administration further evaluated the fund and determined that, for NASA, these funds are better directed towards current priorities that will produce cost-effective, ascertainable outcomes. Congress provided no further appropriations for RPC. According to NASA, the fund was eliminated before it took an equity stake in any company. A RAND Corporation study states that RPC made a single investment prior to its termination, though it did not specify the amount. Over the last two decades, federal agencies and Congress have established several venture capital (VC) firms. The intent of these firms, including In-Q-Tel (IQT), the Army Venture Capital Initiative (AVCI), and Red Planet Capital (RPC), has been to help ensure agency access to leading-edge technologies and input into technology development to address mission needs. Several factors have contributed to the initiation of these organizations: a long-term shift in the composition of U.S. research and development funding from the federal government to the private sector; the substantial role of small start-ups in driving innovation, especially in information technology; and expanded U.S. and global commercial market opportunities that have diminished the relative attractiveness of serving the federal government market. In-Q-Tel. The Central Intelligence Agency (CIA), with congressional approval, established the first federal government-sponsored VC firm, In-Q-Tel, in 1999 . IQT is an independent, not-for-profit, non-stock company. It is a strategic investor that works closely with intelligence community (IC) entities and the Department of Defense (DOD). IQT's portfolio includes data analytics, cybersecurity, artificial intelligence, machine learning, ubiquitous computing, information technology solutions, communications, novel materials, electronics, commercial space, remote sensing, power and energy, and biotechnology. While the CIA has broad statutory authority in how it may expend its funds, according to a RAND Corporation report, the agency reportedly used an approach based on DOD's "other transaction" authority (10 U.S.C. 2371) for developing its contract with IQT. IQT has a management team and a board of trustees. The CIA is the executive agent for IQT. Federal agencies, primarily the CIA, provide funding to IQT, which in turn provides investments to selected firms based on needs articulated by the CIA. The In-Q-Tel Interface Center (QIC), a small group of CIA employees, serves as a liaison between the CIA and IQT. IQT investments generally range from $500,000 to $3 million. IQT asserts that for each dollar it has invested, private investors have provided $16. IQT pairs its investment with a development agreement in which IQT and the company work together to adapt the technology to meet IC needs. If successful, IC customers can buy the product directly from the company. IQT asserts that its model delivers rapid, cost-effective solutions: IQT identifies and adapts "ready-soon" technologiesâoff-the-shelf products that can be modified, tested, and delivered for use within 6 to 36 months depending on the difficulty of the problem. Approximately 75% of our deals involve multiple agencies from the [IC] and defense communities, which means a more cost efficient use of taxpayers' dollars. Profits from the liquidation of an IQT investment are allocated between additional IQT investing activity and other strategic information technology initiatives defined by the CIA, in accordance with a memorandum of understanding between the CIA and IQT. Army Venture Capital Initiative. In January 2002, Congress directed the Secretary of the Army to establish a venture capital investment corporation using $25 million previously appropriated to the Army for basic and applied research. The Army and Arsenal Venture Capital (formerly Military Commercial Technologies, Inc. (MILCOM)) jointly manage the AVCI through OnPoint Technologies, LLC (OPT), a not-for-profit corporation. In this relationship, the Army serves as strategic investor; provides guidance on technology priorities to OPT through its Communications Electronics Command (CECOM); and, through CECOM, provides administrative and contractual support to OPT. Army funds provided to OPT support investments and OPT expenses. Proceeds from the liquidation of investments are used in part to pay compensation to Arsenal Venture Capital with the balance used for new investments. In addition to providing $25 million in FY2002, Congress appropriated $12.6 million in FY2003 and $14.3 million in FY2005 for the AVCI. In addition, in FY2004, the Army reprogrammed $10 million for the AVCI. Since FY2005, Congress has not appropriated funds to the AVCI. AVCI invests alongside other VC firms at all stages of development, making investments of $500,000 to $2 million. AVCI asserts that for each dollar it has invested, private investors have provided $22. Focused initially on innovative power and energy technologies, AVCI's technology focus areas have expanded to include emerging technologies such as autonomy, cyber, health information systems, and advanced materials. AVCI seeks to foster the development of these technologies and their transfer to the soldier while attaining net returns for the investing organizations from commercial and defense markets. AVCI asserts that it is able to engage technology firms outside the traditional reach of DOD. Red Planet Capital. In September 2006, the National Aeronautics and Space Administration (NASA) announced a partnership with Red Planet Capital, Inc., a non-profit organization, to establish a venture capital fund, Red Planet Capital (RPC). The fund was "to support innovative, dual-use technologies [to] help NASA achieve its mission, [and] better position these technologies for future commercial use." NASA was to provide strategic direction and technical input to RPC, while the organization's principals were to identify investment opportunities, perform due diligence, and manage its equity investments. NASA intended to invest approximately $75 million over five years. Congress provided $6 million for RPC in FY2007. In FY2008, President George W. Bush proposed termination of the program: Government-sponsored venture capital funds provide a mechanism for Government agencies to indirectly take equity stakes in private firms, which potentially creates significant conflicts of interest and market distortions. The Administration believes that this mechanism poses difficult challenges to Government oversight and should only be used in exceptional situationsâ¦. The Administration further evaluated the fund and determined that, for NASA, these funds are better directed towards current priorities that will produce cost-effective, ascertainable outcomes. Congress provided no further appropriations for RPC. According to NASA, the fund was eliminated before it took an equity stake in any company. A RAND Corporation study states that RPC made a single investment prior to its termination, though it did not specify the amount.	Summary:	gov_report	1,024	null	8
crs_R46142	crs_R46142_0	You are given a report by a government agency. Write a one-page summary of the report. Report: U nder long-standing Supreme Court precedent, Congress has "plenary power" to regulate immigration. This power, according to the Court, is the most complete that Congress possesses. It allows Congress to make laws concerning non-U.S. nationals (aliens) that would be unconstitutional if applied to citizens. And while the immigration power has proven less than absolute when directed at aliens already physically present within the United States, the Supreme Court has interpreted the power to apply with most force to the admission and exclusion of nonresident aliens. The Court has upheld or shown approval of laws excluding aliens on the basis of ethnicity, gender and legitimacy, and political belief. It has also upheld an executive exclusion policy that was premised on a broad statutory delegation of authority, even though some evidence considered by the Court tended to show that religious hostility may have prompted the policy. Outside of the immigration context, in contrast, laws and policies that discriminate on such bases are almost always struck down as unconstitutional. To date, the only judicially recognized limit on Congress's power to exclude aliens concerns lawful permanent residents (LPRs): they, unlike nonresident aliens, generally cannot be denied entry without a fair hearing as to their admissibility. The plenary power doctrine has roots in the Chinese Exclusion Case of 1889, which upheld a federal statute that provided for the exclusion of Chinese laborers. Some jurists and commentators have criticized the Chinese Exclusion Case for indulging antiquated notions of race. More generally, many legal scholars contend that the plenary power doctrine lacks a coherent rationale and that it is an anachronism that predates modern individual rights jurisprudence. Yet the Supreme Court continues to employ the doctrine. Some commentators have argued that the Court is in the process of narrowing the parameters of the doctrine's applicability, but they find support for this argument mainly in cases outside the exclusion context. In the exclusion context, the Court's 2018 decision in Trump v. Hawaii reaffirms the exceptional scope of the plenary power doctrine. Congress's plenary power to regulate the entry of aliens rests at least in part on implied constitutional authority. The Constitution itself does not mention immigration. It does not expressly confer upon any of the three branches of government the power to control the flow of foreign nationals into the United States or to regulate their presence once here. To be sure, parts of the Constitution address related subjects. The Supreme Court has sometimes relied upon Congress's enumerated powers over naturalization and foreign commerce, and to a lesser extent upon the Executive's implied Article II foreign affairs power, as sources of federal immigration power. Significantly, however, the Court has also consistently attributed the immigration power to the federal government's inherent sovereign authority to control its borders and its relations with foreign nations. It is this inherent sovereign power, according to the Court, that gives Congress essentially unfettered authority to restrict the entry of nonresident aliens. The Court has determined that the executive branch, by extension, possesses unusually broad authority to enforce laws pertaining to alien entry, and to do so under a level of judicial review much more limited than that which would apply outside of the exclusion context. Recent events have generated congressional interest in the constitutional division of responsibilities between Congress and the Executive in establishing and enforcing policies for the exclusion of aliens. Through three iterative executive actions in 2017, commonly known as the "Travel Ban," the President provided for the exclusion of broad categories of nationals of specified countries, most of which were predominantly Muslim. These executive actions relied primarily upon a delegation of authority in the Immigration and Nationality Act (INA) allowing the President, by way of proclamation, to exclude "any aliens" or "any class of aliens" whose entry he determines would be "detrimental to the interests of the United States." In June 2018, the Supreme Court upheld the third iteration of the Travel Ban as likely lawful, rejecting claims that it was motivated by unconstitutional religious discrimination and that it exceeded the President's authority under the INA. Since that decision, some Members of Congress have proposed curtailing executive authority to craft exclusion policy or subjecting executive exclusion decisions and policies to more stringent judicial review. This report provides an overview of the legislative and executive powers to exclude aliens. First, the report discusses a gatekeeping legal principle that frames those powers: nonresident aliens outside the United States cannot challenge their exclusion from the country in federal court because Congress has not expressly authorized such challenges. But aliens at the threshold of entry have more access to judicial review of exclusion decisions, compared to aliens abroad, because of statutory provisions and other considerations. Next, the report analyzes the extent to which the constitutional and statutory rights of U.S. citizens limit the exclusion power. Specifically, the report examines a line of Supreme Court precedent, starting with Kleindienst v. Mandel and ending with Trump v. Hawaii , that makes a highly curtailed form of judicial review available to U.S. citizens who claim that the exclusion of one or more aliens abroad violates the U.S. citizens' constitutional rights. The report concludes by analyzing the implications of these cases for the scope of the congressional power to legislate for the exclusion of aliens and, separately, for the scope of the executive power to take action to exclude aliens. Knauff and the General Rule Against Judicial Review of Exclusion Decisions As discussed later, Supreme Court case law on the exclusion of aliens has come to focus upon whether the rights of U.S. citizens limit the government's power to exclude. The case law arrived at this issue, however, only after the Supreme Court developed an underlying principle: nonresident aliens outside the United States do not have constitutional rights with respect to entry. Further, any statutory provisions that govern the admission of nonresident aliens do not permit judicial review unless Congress "expressly authorize[s]" such review, something that federal courts generally conclude Congress has not done. Put differently, Congress's plenary power over immigration includes not merely the power to set rules as to which aliens may enter the country and under what conditions, but also the power to have such rules "enforced exclusively through executive officers, without judicial intervention" unless Congress provides otherwise. Because Congress has not provided otherwise, judicial review of decisions to exclude aliens abroad is generally unavailable. The Supreme Court developed these general principles against judicial review of exclusion decisions in a series of cases between the late 19th and mid-20th centuries about aliens denied admission after arriving by sea. In one illustrative early case, the 1895 decision Lem Moon Sing v. United States , a Chinese national contended that immigration officers improperly denied him admission under the Chinese exclusion laws. Those laws barred the entry of Chinese laborers, but the Chinese national described himself as a merchant and argued that the laws therefore did not apply to him. As a consequence of his exclusion, he was detained by the steamship company. The Supreme Court recognized that the professed merchant could challenge the legality of his detention through a petition for habeas corpus. This procedural right ultimately proved hollow, however, because the Court held that it could not review the immigration officials' determination that the petitioner fell within the scope of the provision excluding Chinese laborers. The Court explained that Congress had precluded such review by providing in statute that the decisions of immigration officers to deny admission to aliens under the Chinese exclusion acts "shall be final, unless reversed on appeal to the secretary of the treasury." In other words, the statute allowed only the Secretary of the Treasury to review exclusion decisions under the acts. Accordingly, the Court limited its consideration of the habeas petition to the narrow question of whether the immigration officers who excluded the professed merchant had authority to make exclusion and admission decisions under the statutes (in other words, whether the officers had jurisdiction). Determining that the immigration officers did have such statutory authority, the Court rejected the habeas petition without reviewing the petitioner's contention that he was in fact a merchant, not a laborer. To review that contention, the Court reasoned, would "defeat the manifest purpose of congress in committing to subordinate immigration officers . . . exclusive authority to determine whether a particular alien seeking admission into this country belongs to the class entitled by some law or treaty to come into the country." The Court saw no constitutional problem in Congress's assignment of final authority over exclusion decisions to executive officials. The Court considered it a settled proposition that, because aliens lack constitutional rights with respect to entry, exclusion decisions "could be constitutionally committed for final determination to subordinate immigration or other executive officers . . . thereby excluding judicial interference so long as such officers acted within the authority conferred upon them by congress." Two major Supreme Court decisions from the 1950s appeared to transform the principle from Lem Moon Sing and earlier casesâthat Congress may bar judicial review of exclusion decisions affirmativelyâinto a presumption that judicial review of exclusion decisions is barred unless Congress expressly provides otherwise. First, in the 1950 case United States ex rel. Knauff v. Shaughnessy , the Court declared itself powerless to review an executive branch decision to exclude the German bride of a U.S. World War II veteran, even though executive officials failed to explain the exclusion beyond stating that the woman's entry would have been "prejudicial." The Court reiterated that aliens do not have constitutional rights with respect to entry and reasoned that, as a consequence, "[w]hatever the procedure authorized by Congress is, it is due process as far as an alien denied entry is concerned." In what would become an oft-cited sentence, the Court also announced the presumption against judicial review of exclusion decisions: "it is not within the province of any court, unless expressly authorized by law , to review the determination of the political branch of the Government to exclude a given alien." Next, in the 1953 case Shaughnessy v. Mezei , the Court refused to question the Executive's undisclosed reasons for denying entry to an essentially stateless alien returning to the United States after a prior period of residence, even though the exclusion relegated the stateless alien to potentially indefinite detention on Ellis Island. The Mezei Court cited Knauff for the proposition that federal courts may not review exclusion decisions "unless expressly authorized by law," and the Court held that the Attorney General's decision to exclude Mezei and detain him as a consequence of that exclusion was "final and conclusive." The issue of detention complicated the Knauff and Mezei cases. Because the aliens in both cases suffered detention as a result of their exclusion, they filed petitions for habeas corpus challenging the legality of their detention. And in both cases, in accord with Lem Moon Sing and other early precedents, and notwithstanding the Court's declaration in Knauff and Mezei that judicial review of the exclusion decisions was unavailable, the Court conducted a limited inquiry into whether the governing statutes empowered the Attorney General to exclude the aliens without a hearing. As explained further below, in the immigration context, the Supreme Court does not construe a general bar on judicial review to preclude habeas corpus review, although the proper scope of habeas review in cases concerning the exclusion of arriving aliens remains unclear. In any event, even though the Knauff and Mezei Courts conducted a limited habeas inquiry into the Attorney General's statutory authority to exclude aliens without a hearing, federal courts often cite the cases (and especially Knauff ) for the proposition that courts may not review exclusion decisions unless Congress expressly provides otherwise. Many scholars criticize Knauff and Mezei as incorrectly decided. The aspect of Mezei that upholds as constitutional the indefinite detention of an arriving alien, in particular, is controversial and has been limited by some lower federal courts to apply only in cases that implicate national security. The Supreme Court, however, has cited Knauff and earlier exclusion cases for the proposition that excluded nonresident aliens do not have grounds to challenge their exclusion in federal court. Under current law, this proposition forms the basis for the doctrine of consular nonreviewability, which bars judicial review in almost all circumstances of the denial of visas to aliens abroad. The general principle against judicial review of exclusion decisions applies with less force to executive decisions to exclude aliens arriving in the United States, even though the rule arose from cases about such aliens. The general principles that govern reviewability of both of these two categories of exclusion decisionsâ(1) visa denials and other exclusion decisions concerning aliens located abroad; and (2) decisions to deny entry to aliens arriving at U.S. borders or ports of entryâare discussed below. Nonresident Aliens Located Abroad: Consular Nonreviewability The doctrine of consular nonreviewability precludes judicial review of challenges brought by nonresident aliens located abroad against visa denials and also possibly against other actions by executive branch officials to deny them admission. Under the doctrine, the millions of nonresident aliens denied visas each year at U.S. consulates abroad cannot themselves challenge their visa denials in federal court on statutory or constitutional grounds. The doctrine may also bar U.S. citizens, LPRs, and U.S. entities from challenging the exclusion of a nonresident alien abroad on statutory grounds (as opposed to constitutional grounds), although the Supreme Court has not decided this issue. The general unavailability of judicial review of visa denials under the doctrine means that U.S. consular officers (the officials who adjudicate visas abroad) have considerable power to make final decisions about visa applications. Table 1 provides an overview of the types of claims to which the doctrine of consular nonreviewability applies. Legal Basis for Consular Nonreviewability Much controversy surrounds the doctrine of consular nonreviewability. Some scholars argue that it lacks a compelling foundation in law. No statute speaks expressly to the issue of whether visa decisions should be subject to judicial review. Even so, lower federal courts recognize the doctrine with apparent uniformity (although some have recognized exceptions to it, as discussed in the next subsection). As authority for the doctrine, courts often cite Knauff and the other Supreme Court cases referenced above concerning the denial of admission to aliens arriving by sea. In particular, the consular nonreviewability cases cite these Supreme Court precedents for the proposition that Congress's plenary immigration power includes the power to have statutes governing the admission of aliens "enforced exclusively through executive officers, without judicial intervention" and that "it is not within the province of any court, unless expressly authorized by law, to review the determination of the political branch of the Government to exclude a given alien." Thus, the reasoning that supports lower court applications of the doctrine appears to be that Congress has not expressly authorized judicial review of visa denials. Because the doctrine has its basis in Knauff and the presumption against judicial review of exclusion decisions, it does not apply to the decisions of domestic immigration authorities to deny immigration benefits, unless perhaps those decisions underlie eventual visa denials or otherwise work to exclude aliens located abroad. Some federal courts have sought to reconcile the doctrine of consular nonreviewability with the provisions governing judicial review of final agency action set forth in the Administrative Procedure Act (APA). The APA establishes a "strong presumption" that the actions of federal agenciesâincluding the Department of Stateâare subject to judicial review. Yet, according to these courts, Congress enacted the APA against the backdrop of already-existing consular nonreviewability jurisprudence and without expressly overruling that jurisprudence by providing for review of consular decisions. On this basis, these courts have concluded that the doctrine of consular nonreviewability constitutes a preexisting limitation on judicial review that the APA preserves through its stipulation, in 5 U.S.C. Â§â¯702(1), that nothing in the statute "affects other limitations on judicial review." In other words, the APA preserves consular nonreviewability as an exception to the general rule that judicial review is available for agency action. Although the doctrine of consular nonreviewability is well established, it remains true that no statute expressly bars judicial review of visa denials abroad. For this reason, courts generally hold that the doctrine "supplies a rule of decision, not a constraint on the subject matter jurisdiction of the federal courts." The legislative history of the original Immigration and Nationality Act of 1952 indicates that Congress considered and rejected the idea of creating within the Department of State a system of administrative appeals for visa denials, and the current version of the INA bars the Secretary of State from overturning visa decisions. But Congress has not legislated affirmatively to shield visa decisions from judicial review. The doctrine of consular nonreviewability is therefore premised upon the absence of any specific statutory authorization for the review of visa denials, not upon an explicit statutory prohibition on such review. Exceptions to Consular Nonreviewability Supreme Court case law qualifies the doctrine of consular nonreviewability in one important respect discussed at length later in this report: if a U.S. citizen challenges the exclusion of a nonresident alien abroad on the ground that the exclusion violates the citizen's constitutional rights, then, under the rule of Kleindienst v. Mandel and later cases, courts "engage[] in a circumscribed judicial inquiry" of the constitutional claim. Mandel recognized that U.S. citizens may have constitutional rights that bear upon the entry of nonresident aliens, even though nonresident aliens themselves do not have such rights. As such, the case law of multiple federal circuit courts of appeals establishes that "a U.S. citizen raising a constitutional challenge to the denial of a visa is entitled to a limited judicial inquiry regarding the reason for the decision." This is the only exception to consular nonreviewability that federal courts have recognized uniformly. As explained later in the section on the Mandel line of cases, it allows challengers only exceedingly slim prospects of obtaining relief from a visa denial. Lower federal courts have split over whether U.S. citizens may also challenge visa denials on statutory grounds. Some lower federal courts have recognized other exceptions to consular nonreviewability's bar on judicial review of decisions to exclude aliens abroad. For instance, at least one federal circuit court decision extends the Mandel principle to allow a limited level of judicial review of a constitutional challenge brought directly by an excluded nonresident alien (rather than a U.S. citizen) against the denial of a visa. This extension, however, seems at odds with Mandel itself, which concluded that a nonresident alien who was denied the statutory waivers needed to secure a visa "had no constitutional right of entry," and that limited judicial review was therefore available only because of constitutional claims brought by U.S. citizens against the alien's exclusion. Other federal appellate court decisions make clear that review of visa denials under Mandel is available only for claims brought by U.S. citizens. In another non-uniformly recognized exception, a line of decisions by the U.S. Court of Appeals for the Ninth Circuit allows nonresident aliens to challenge a consular officer's failure to act upon a visa application (as opposed to the denial of an application). The supporting rationale is that the Mandamus Act supplies a basis for judicial review where an official fails to take a legally required action, such as the adjudication of a visa application, even if the APA does not. This exception to the rule of consular nonreviewability is not as well established as the exception allowing for limited review of constitutional claims brought against visa denials by U.S. citizens. Federal district courts outside the Ninth Circuit have split over whether to recognize the exception. However, as discussed in the next section, in cases not specifically concerning the adjudication of visas, other courts have recognized that the Mandamus Act creates an exception to the presumption against judicial review of decisions to exclude aliens abroad. Other federal district court opinions may suggest further exceptions to consular nonreviewability that have yet to gain uniform recognition, such as an exception allowing visa applicants to challenge the validity of generally applicable statutes, regulations, or policies that govern their applications. Nonetheless, the review available under Mandel for constitutional challenges brought by U.S. citizens remains the only exception to consular nonreviewability grounded in Supreme Court case law and universally recognized by lower federal courts. Nonresident Aliens Abroad Who Seek Entry to Remedy Prior Violations of Constitutional or Statutory Rights Other cases concerning aliens abroad that implicate the presumption against judicial review of exclusion decisions and the doctrine of consular nonreviewability address the following question: may a federal court order the executive branch to grant entry to a nonresident alien located abroad in order to remedy violations of constitutional or statutory rights that the alien suffered while in the United States or while detained by the United States? The Seventh and Ninth Circuits have both answered in the affirmative. The D.C. Circuit, however, has held that Knauff bars courts from ordering the executive branch to grant entry to an alien unless a statutory provision authorizes courts to do so. The Ninth Circuit held that a federal district court has authority to order the executive branch to parole aliens whom it removed in violation of due process back into the country to attend fair removal proceedings. "Without a provision requiring the government to admit individual [aliens] into the United States so that they may attend the hearings to which they are entitled," the court reasoned, the determination that their removal proceedings violated due process "would be virtually meaningless." In other words, the only way to remedy the constitutional violation was to order the government to grant the aliens reentry. In a recent district court case that relied on the Ninth Circuit decision, the district court reasoned that ordering the government to grant reentry to aliens who were removed in violation of law did not contravene the political branches' broad authority over exclusion decisions because the remedy formed part of the review that Congress authorized courts to conduct of removal orders under the INA. The Seventh Circuit reached a broader holding in a different context. The case, Samirah v. Holder , concerned an alien who had overstayed his nonimmigrant visa but who had applied for LPR status (through a process called "adjustment of status"). When his mother fell ill in Jordan, the alien received a grant of advance parole from the Department of Homeland Security (DHS) so that he could visit her without abandoning his application for adjustment and with some assurance that he would be able to return to the United States to pursue the application. But while the alien was abroad, DHS revoked his advance parole and did not allow him to board a connecting flight back to the United States. Reviewing the alien's application for a writ of mandamus ordering executive branch officials to grant him reentry, the Seventh Circuit reasoned that DHS had used the advance parole as "a trapâa device for luring a nonlawful resident out of the United States so that he can be permanently excluded from this country." The circuit court held that DHS's parole regulation unambiguously granted the plaintiff a right to reenter the country to continue pursuing his pending application for adjustment of status and that the court could enforce that right through mandamus. Further, the circuit court reasoned that the Supreme Court's holding in Knauff âthat "it is not within the province of any court,Â unless expressly authorized by law , Â to review the determination of the political branch of the Government to exclude a given alien"âdoes not apply in instances where a statute or regulation grants an excluded alien a right to physical presence in the United States. Put differently, where a nonresident alien abroad "has a right, conferred by a regulation the validity of which is conceded all around, to be in this country," Knauff and the doctrine of consular nonreviewability do not bar a court from ordering executive branch officials to grant the alien entry. The Court did not clarify, however, whether the alien's right to be in the United States under the parole regulation also constituted an "express[] authoriz[ation]" of judicial review , within the meaning of Knauff , of the alien's exclusion. The Supreme Court, for its part, has held at least once that the potential existence of a right to entry does not give rise to judicial review of an alien's exclusion. A D.C. Circuit decision stands in tension with the Seventh and Ninth Circuit cases. In Kiyemba v. Obama , the D.C. Circuit held that it did not possess authority to order executive branch officials to grant entry into the United States to seventeen Chinese nationals detained without sufficient evidence as enemy combatants in Guantanamo Bay. The aliens feared that they would face persecution in China and requested entry and release into the United States, at least until authorities could locate an appropriate third country to accept them, but executive branch officials denied their request and continued to hold the aliens at Guantanamo Bay while pursuing resettlement options through diplomacy. Although the illegality of the aliens' detention was undisputed, the D.C. Circuit held that it could not order the government to release the aliens into the United States. The circuit court cited Knauff , Mezei , and other exclusion cases for the principle that the political branches have "exclusive power . . . to decide which aliens may, and which aliens may not, enter the United States," and reasoned that this principle barred it from granting the requested relief. The "critical question" under Knauff , the circuit court reasoned, was whether any law "expressly authorized" courts "to set aside the decision of the Executive Branch and to order the[] aliens brought to the United States." The Court concluded that the aliens did not have due process rights and that no other "statute or treaty" authorized it to override the executive branch's decision not to grant the aliens entry to the United States. As such, the rule that "in the United States, who can come in and on what terms is the exclusive province of the political branches" foreclosed the aliens' claims for relief. In conclusion, the Seventh and Ninth Circuit cases suggest that the doctrine of consular nonreviewability does not bar federal courts from ordering executive branch officials to grant entry to nonresident aliens abroad for the purpose of remedying constitutional, statutory, or regulatory violations that the aliens suffered in the United States. However, the cases may not fully explain how such judicial authority to order a nonresident alien's entry comports with Knauff and the principles underlying the doctrine of consular nonreviewability. The D.C. Circuit opinion, in contrast, appears to stand for the proposition that Knauff allows federal courts no authority to order the entry of a nonresident alien located outside the United States, unless a statute expressly authorizes such relief. Aliens Excluded at the Border or Port of Entry Under current law, the general rule against challenges to denials of entry appears less relevant in the context of arriving aliens at the threshold of entry, notwithstanding the rule's provenance in Knauff and other cases about such aliens. Unlike in the visa context, it is not rare for federal courts to review and even strike down executive exclusion decisions and policies concerning aliens arriving at the border. At least three interrelated considerations contribute to the diminished relevance of the rule against challenges to exclusion decisions in arriving alien cases. Detention and Other Consequences of Exclusion First, decisions to exclude arriving aliens, unlike decisions to exclude aliens abroad, typically result in detention. Although nonresident aliens do not have constitutional rights with respect to entry , they may enjoy some protection from burdensome enforcement measures, such as prolonged detention, that sometimes flow from denial of entry. Recall, for example, the 1953 Mezei case mentioned above, where the Supreme Court denied relief to a stateless alien whose exclusion left him detained on Ellis Island without prospects for release. Unlike cases about aliens denied visas abroad, Mezei raised not only the question of whether the alien had grounds to challenge his exclusion from the United States, but also whether the government could keep him in detention on Ellis Island as a consequence of the exclusion decision. The majority answered this second question in the affirmative, reasoning that Mezei's lack of constitutional rights with respect to entry, and Congress's decision not to provide him with any judicially enforceable statutory rights to entry, foreclosed his challenge to the detention that resulted from his exclusion. In dissent, Justice Jackson made a famous retort: Because the respondent has no right of entry, does it follow that he has no rights at all? Does the power to exclude mean that exclusion may be continued or effectuated by any means which happen to seem appropriate to the authorities? It would effectuate [an alien's] exclusion to eject him bodily into the sea or set him adrift in a rowboat. In more recent cases, the Supreme Court has hesitated to rely on Mezei for the proposition that the federal government has the constitutional power to subject arriving aliens to prolonged detention in order to carry out their exclusion. Some lower courts have gone further and held that arriving aliens have due process rights that offer some protection against unreasonably prolonged detention, reasoning that Mezei applies only in cases that implicate specific national security concerns. The Supreme Court has yet to resolve the issue. As such, the extent to which aliens arriving at the border enjoy constitutional protections against prolonged detention or other enforcement measures connected to the denial of entry is a disputed issue. And while the law remains clear on the point that arriving nonresident aliens do not have constitutional rights with respect to entry itself, the proposition that they may have constitutional rights against detention or other enforcement measures that implicate fundamental rights often leads to judicial review of issues arising from their exclusion. Habeas Corpus Review Second, also because of the detention issue, arriving alien cases may trigger some level of habeas corpus review. Knauff and Mezei establish that no judicial review is available for exclusion decisions unless a statute expressly authorizes such review. But at the same time, the cases confirm an arguably countervailing proposition: that arriving aliens who suffer detention as a consequence of exclusion may challenge their exclusion in habeas corpus proceedings. Thus, in Knauff , the Court disavowed judicial review but still considered and rejected the excluded alien's argument that the applicable statutes required the Attorney General to conduct a hearing on her admissibility and that an executive branch regulation providing to the contrary was "unreasonable." Similarly, in Mezei , the Court's habeas review included an assessment that the exclusion of the stateless alien in that case without a hearing conformed to the procedural requirements of the immigration statutes. As the Court has noted elsewhere, "[i]n the immigration context, 'judicial review' and 'habeas corpus' have historically distinct meanings." The Court has held in the deportation context that the preclusion of judicial review does not bar habeas corpus proceedings. Knauff , Mezei , and earlier exclusion cases suggest that the same principle applies in the exclusion context: the cases declare that judicial review is unavailable for challenges to exclusion decisions, but they nonetheless engage in some review of executive jurisdiction and procedure under the rubric of habeas corpus. The scope of federal court review in habeas corpus proceedings of a decision to exclude an alien appears extremely limited, although its exact contours remain unclear (as does the question whether such proceedings are constitutionally required). The habeas review that the Court conducted in Knauff and Mezei did not reach the merits of the exclusion decisions. In Knauff , the Court declined to review the Attorney General's determination that the German war bride's entry would be "prejudicial." Similarly, in Mezei , the Court held that it could not review the Attorney General's undisclosed reasons for excluding the stateless alien. As such, one might read Knauff and Mezei to mean that courts reviewing exclusion decisions in habeas proceedings (1) may review pure questions of law, such as whether immigration officials had jurisdiction to enforce the relevant exclusion statutes and whether the statute authorized them to forgo a hearing, but (2) may not review the basis for the officials' determination that the statutes require the aliens' exclusion. Other cases complicate this picture, however. In at least one early habeas case that the Supreme Court has not overruled, the Court reviewed and reversed the determination of immigration officers that a group of arriving aliens was subject to exclusion under the immigration statutes. One federal circuit court has interpreted Supreme Court case law to suggest that "the Suspension Clause requires review of legal and mixed questions of law and fact related to removal orders, including expedited removal orders." The proper reach of a habeas court's review of the exclusion of an arriving alien thus remains unsettled, although the Supreme Court is scheduled to consider this issue in 2020. Regardless, the availability of any level of habeas review in arriving alien cases means that, in practice, the general rule against judicial review of exclusion decisions applies with less force in this context than in the context of visa denials or other decisions to exclude aliens located abroad , where the lack of detention makes habeas unavailable. INA Framework for Judicial Review of Removal Orders Third and finally, Congress has established a limited framework in the INA for the review of orders of removal against arriving nonresident aliens. The INA sets forth two primary procedures by which DHS officials may remove aliens arriving in the United States. These procedures are expedited removal, a streamlined process that contemplates removal without a hearing before an immigration judge, and formal removal, a more traditional proceeding in which an immigration judge determines whether to order the alien's removal. The INA specifies the limited circumstances in which an alien ordered removed under these procedures may obtain judicial review. The INA also expressly bars or limits judicial review of a range of executive branch actions and determinations connected to the removal process. This INA scheme of limitations on judicial review purports to bar review of expedited removal orders in most circumstances, but it may not bar review of some executive branch exclusion policies that bear upon the expedited removal process (such as, for example, executive policies that restrict asylum eligibility for some aliens arriving at the border who are subject to expedited removal procedures). These INA provisions concerning the reviewability of removal orders appear to have replaced the Knauff presumptionâthat judicial review of exclusion decisions is unavailable "unless expressly authorized by law"âas the touchstone for whether executive decisions or policies for the exclusion of arriving nonresident aliens are subject to judicial review. When the INA expressly authorizes judicial review of orders or policies for the removal of arriving aliens, federal courts engage in such review. More broadly, however, federal courts have also shown a willingness to review statutory challenges to exclusion decisions or policies concerning aliens at the threshold of entry so long as the INA does not expressly bar such review (even if it does not expressly authorize review). This situation typically arises in cases where arriving aliens or their advocates challenge an executive branch exclusion policy under the APA. How judicial review in such exclusion casesâwhere the INA neither expressly authorizes nor bars reviewâcomports with the Knauff presumption remains largely unexplained in the case law. Yet the Supreme Court has on at least one occasion allowed for judicial review of inadmissibility determinations of arriving aliens on the ground that Congress had not expressly barred such review: in the 1956 case Brownwell v. We Shung , the Court held that arriving aliens could challenge inadmissibility determinations through declaratory judgment actions because the relevant statuteâa prior version of the INA that Congress later amended in disapproval of the Supreme Court decisionâdid not bar such actions. This decision appeared to disregard the presumption against judicial review of exclusion determinations established in Knauff and earlier exclusion cases, although the We Shung Court did not address this point. The underlying implication of We Shung , and of the more recent lower court decisions reviewing statutory challenges to executive branch policies concerning the exclusion of arriving aliens, may be that the INA's judicial review framework for orders of removal occupies the territory that the Knauff presumption against judicial review once occupied and therefore replaces the Knauff presumption as the law governing the availability of judicial review in arriving alien exclusion cases. To recap: the current case law generally provides that statutory challenges to the exclusion of arriving aliens are reviewable unless a statute expressly bars such judicial review. However, the case law does not thoroughly reconcile this approach with the Knauff presumption that there should be no review of an exclusion determination unless the review is expressly authorized in statute. Conclusion Concerning General Rule Against Judicial Review of Exclusion Decisions The line of Supreme Court exclusion jurisprudence culminating in Knauff and Mezei establishes that courts may not review challenges to the exclusion of nonresident aliens unless Congress expressly provides for such review. In the context of aliens located abroad, this jurisprudence has developed into the rule of consular nonreviewability, which bars judicial review in most circumstances of visa refusals and other decisions to exclude nonresident aliens abroad. In the context of arriving aliens, however, the Knauff presumption against judicial review of exclusion decisions appears to have been mostly overshadowed by constitutional issues concerning enforcement measures related to the denial of entry, the potential availability of some level of habeas review, and the framework of INA provisions governing judicial review of removal orders. Claims by U.S. Citizens Against an Alien's Exclusion Even as applied to aliens abroad, the rule against nonresident alien challenges to denials of entry has a major limitation: the rule only clearly forecloses challenges brought by nonresident aliens themselves. Thus, if a U.S. citizen claims that the exclusion of an alien violated the U.S. citizen's constitutional rights, the rule against alien challenges does not apply with its full force. Cases that invoke this limitation account for the entirety of the Supreme Court's modern exclusion jurisprudence. The Court has not considered a nonresident alien's own challenge to a denial of entry in decades. The question about the extent to which U.S. citizens can challenge an alien's exclusion, on the other hand, has occupied the Court in four important cases since 1972: Kleindienst v. Mandel , Fiallo v. Bell , the splintered Kerry v. Din , and Trump v. Hawaii . Under the rule that these cases establish, the government need satisfy only a "highly constrained" judicial inquiry into whether the exclusion "had a justification independent of unconstitutional grounds" in order to prevail against an American citizen's claim that the exclusion violated his or her constitutional rights. This is an extremely limited level of judicial review under which the government has always prevailed before the Supreme Court. Mandel and the Narrow Review of Exclusion Decisions In 1972, the Court confronted a case in which a group of American professors claimed that the exclusion of a Belgian intellectual, Ernest Mandel, violated the American professors'âand not Mandel'sâFirst Amendment rights. The professors had invited Mandel to speak at their universities. A provision of the INA rendered him ineligible for a visa because of his communist political beliefs. A separate provision authorized the Attorney General to waive Mandel's ineligibility upon a recommendation from the Department of State, but the Attorney General declined to do so. The case produced a standard of review for claims that the exclusion of an alien violates an American citizen's constitutional rights: [P]lenary congressional power to make policies and rules for exclusion of aliens has long been firmly established . . . . We hold that when the Executive exercises [a delegation of this power] negatively on the basis of a facially legitimate and bona fide reason , the courts will neither look behind the exercise of that discretion, nor test it by balancing its justification against the First Amendment interests of those who seek personal communication with the applicant. Applying this "facially legitimate and bona fide" test, the Court upheld Mandel's exclusion on the basis of the government's explanation that it denied the waiver because Mandel had abused visas in the past. The American professors and two dissenting Justices pointed to indications of pretext and argued that Mandel had actually been excluded because of his communist ideas. Nonetheless, the majority refused to "look behind" the government's justification to determine whether any evidence supported it. In other words, the Court accepted at face value the government's explanation for why it denied Mandel permission to enter. The "facially legitimate and bona fide" standard resolved what the Court saw as the major dilemma that the dispute over Mandel's visa posed for the bedrock principles of its immigration jurisprudence. Unlike Mandel himself and the unadmitted aliens from prior exclusion cases, the American professors stated a compelling First Amendment claim based on their "right to receive information" from the Belgian intellectual. But for the Court to grant relief on that claim, or even to grant full consideration of the claim, would have undermined Congress's plenary power to exclude aliens by interjecting the courts into the exclusion process. After all, many other exclusions of aliens for communist ideology could also have implicated the rights of U.S. citizens who sought to "meet and speak with" the excluded aliens. The "facially legitimate" standard protected the plenary power against dilution by limiting the reach of the American professors' claim. Under the standard, the professors were not entitled to balance their First Amendment rights against the government's exclusion power; they were entitled only to a constitutionally valid statement as to why the government exercised the exclusion power. Significantly, the Court left open the question whether the American professors' rights entitled them to even that much. Although the government proffered a "facially legitimate and bona fide" justification for Mandel's exclusion, the Court declined to say whether the government would have prevailed even if it had offered "no justification whatsoever." Subsequent Applications of Mandel: Fiallo, Din, and Trump v. Hawaii The Court has followed Mandel in three subsequent exclusion cases. The first of these cases, Fiallo v. Bell , concerned the constitutionality of a statute; the second, Kerry v. Din , concerned the Executive's application of a statute in an individual visa case; and the third, Trump v. Hawaii , concerned the Executive's invocation of statutory authority to exclude a broad class of aliens by presidential proclamation. All three cases reinforce the notion of the government's plenary power to exclude aliens even in the face of constitutional challenges brought by U.S. citizens. The second and third cases, however, indicate that a different standard of review than Mandel 's "facially legitimate and bona fide" test may apply when challengers present extrinsic evidence of an unconstitutional justification for an executive exclusion decision or policy. The Supreme Court has assumed without definitively holding that, in such cases, reviewing courts may consider the extrinsic evidence to determine whether the exclusion decision or policy "can reasonably be understood to result from a justification independent of unconstitutional grounds." Fiallo v. Bell In Fiallo v. Bell , the Court upheld a provision of the INA that classified people by gender and legitimacy. The statute granted special immigration preferences to the children and parents of U.S. citizens and LPRs, unless the parent-child relationship at issue was that of a father and his illegitimate child. Two U.S. citizens and two LPRs claimed that the restriction violated their equal protection rights by disqualifying their children or fathers from the preferences. Despite the "double-barreled discrimination" on the face of the statute, the Court upheld it as a valid exercise of Congress's "exceptionally broad power to determine which classes of aliens may lawfully enter the country." Although it relied on Mandel , the Fiallo Court did not identify a concrete "facially legitimate or bona fide" justification for the statute. Instead, the Court surmised that a desire to combat visa fraud or to emphasize close family ties may have motivated Congress to impose the gender and legitimacy restrictions. Similar to the analysis in Mandel , the Fiallo Court justified its limited review of the facially discriminatory statute as a way to prevent the assertion of U.S. citizen rights from undermining the sovereign prerogative to exclude aliens. Kerry v. Din In Kerry v. Din , the Court considered a U.S. citizen's claim that the Department of State violated her due process rights by denying her husband's visa application without sufficient explanation. The Department indicated that it denied the visa under a terrorism-related ineligibility but did not disclose the factual basis of its decision. The Court rejected the claim by a vote of 5 to 4 and without a majority opinion. Justice Scalia, writing for a plurality of three Justices, did not reach the Mandel analysis because he concluded that Din did not have a protected liberty interest under the Due Process Clause in her husband's ability to immigrate. But Justice Kennedy, in a concurring opinion for himself and Justice Alito, which some lower courts view as the controlling opinion in the case, assumed without deciding that the visa denial implicated due process rights but rejected the claim under the "facially legitimate and bona fide reason" test. Justice Kennedy's concurring opinion made two significant statements about how Mandel works in application. First, the government may satisfy the "facially legitimate and bona fide reason" standard by citing the statutory provision under which it has excluded the alien. Such a citation fulfills the "facially legitimate" prong by grounding the exclusion decision in legislative criteria enacted under Congress's "plenary power" to restrict the entry of aliens, and the citation also, by itself, suffices to "indicate[] [that the government] relied upon a bona fide factual basis" for the exclusion. Thus, because the government stated that it denied Din's husband's visa application under the terrorism-related ineligibility, it provided an adequate justification under Mandel even though it did not disclose the factual findings that triggered the ineligibility. Pointing to the statute suffices. Second, however, Justice Kennedy indicated that his interpretation of the "bona fide" prong might be susceptible to a caveat in some cases: Absent an affirmative showing of bad faith on the part of the consular officer who denied Berashk [Din's husband] a visaâwhich Din has not plausibly alleged with sufficient particularityâ Mandel instructs us not to "look behind" the Government's exclusion of Berashk for additional factual details beyond what its express reliance on [the terrorism-related ineligibility] encompassed. In other words, under Justice Kennedy's reading of the Mandel standard, courts will assume that the government has a valid basis for excluding an alien under a given statuteâ unless an affirmative showing suggests otherwise. In Din , the facts did not suggest bad faith, because Din's own complaint revealed a connection between the statutory ineligibility and her husband's case. Justice Kennedy therefore had no occasion to apply the caveat, and the opinion did not clarify what kind of "affirmative showing" would trigger it. Nonetheless, Justice Kennedy's concept of a bad faith exception to Mandel 's rule against judicial scrutiny of the government's underlying factual basis for an exclusion decision became a prominent issue in the Supreme Court's most recent exclusion case, Trump v. Hawaii . Trump v. Hawaii Most recently, in Trump v. Hawaii , the Court rejected a challenge brought by U.S. citizens, the state of Hawaii, and other U.S.-based plaintiffs against a presidential proclamation that provided for the indefinite exclusion of broad categories of nonresident aliens from seven countries, subject to some waivers and exemptions. Five of the seven countries covered by the proclamation were Muslim-majority countries. The proclamation, like two earlier executive orders that imposed entry restrictions of a similar nature, became known colloquially as the "Travel Ban" or "Muslim Ban." As statutory authority for the proclamation, the President relied primarily upon INA Â§ 212(f). That statute grants the President power "to suspend the entry of all aliens or any class of aliens" whose entry he "finds . . . would be detrimental to the interests of the United States." In the proclamation, the President concluded that the entry of the specified categories of nationals from the seven countries would have been "detrimental" to the United States because, based on the results of a multiagency review, the countries did not adequately facilitate the vetting of their nationals for security threats or because conditions in the countries posed particular risks to national security. Thus, the stated purpose of the proclamation was to protect national security by excluding aliens who could not be properly vetted due to the practices of their governments or the conditions in their countries. The challengers contended, however, that the actual purpose of the proclamation was to exclude Muslims from the United States. They based this argument primarily upon extrinsic evidenceâthat is, evidence outside of the four corners of the proclamationâincluding statements that the President had made as a candidate calling for a "total and complete shutdown of Muslims entering the United States." The challengers argued that the proclamation was illegal on statutory and constitutional grounds. With respect to statute, the challengers contended that INA Â§ 212(f) conferred upon the President only a "residual power to temporarily halt the entry of a discrete group of aliens engaged in harmful conduct" and therefore did not authorize the proclamation's indefinite exclusion of nationals of seven countries. The challengers also made other statutory arguments, including that the proclamation did not make sufficient findings that the entry of the excluded aliens would be "detrimental to the interests of the United States," as the language of Â§ 212(f) requires. With respect to the constitutional ground, the challengers argued that the proclamation violated the Establishment Clause because, based on the extrinsic evidence, the President issued the proclamation for the actual purpose of excluding Muslims from the United States. As such, according to plaintiffs, the proclamation ran afoul of the "clearest command" of the Establishment Clause: "that one religious denomination cannot be officially preferred over another." A five-Justice majority of the Supreme Court rejected all of these challenges in an opinion by Chief Justice Roberts that generally reaffirmed the unique breadth of the political branches' power to admit or exclude aliens. On the statutory claims, the Court declined to decide whether the doctrine of consular nonreviewability barred judicial review of the U.S. plaintiffs' arguments that the proclamation violated Â§ 212(f) and other provisions of the INA. The Court instead held that the proclamation did not violate the INA because Â§ 212(f) "exudes deference to the President" and grants him "'ample power' to impose entry restrictions in addition to those elsewhere enumerated in the INA," even restrictions as broad as those in the proclamation. The Court also reasoned that the "deference traditionally accorded the President" in national security and immigration matters means that courts must not conduct a "searching inquiry" into the basis of the President's determination under Â§ 212(f) that the entry of certain aliens would be "detrimental to the interests of the United States." The Court suggested that such a presidential determination might not be subject to judicial review at allâcalling the premise for such review "questionable"âbut ultimately held that, "even assuming some form of review [was] appropriate," the findings in the proclamation about the results of the multiagency review of vetting practices satisfied Â§ 212(f)'s requirements. In short, although the Court reviewed the statutory claims against the proclamation, it rejected those claims by holding that Congress has delegated extraordinary power to the President to exclude aliens and that the President's decisions to employ this power warrant deference. On the constitutional issue, the Court reiterated the holdings in Mandel and Fiallo that matters concerning the admission or exclusion of aliens are "'largely immune from judicial control'" and are subject only to "highly constrained" judicial inquiry when exclusion "allegedly burdens the constitutional rights of a U.S. citizen." Interestingly, however, the Court did not decide whether the limitations on the scope of this inquiry barred consideration of extrinsic evidence of the proclamation's purpose. Much of the litigation in the lower courts had turned on this issue. A majority of judges on the U.S. Court of Appeals for the Fourth Circuit, citing Justice Kennedy's concurrence in Din , had relied on the campaign statements and other extrinsic evidence of anti-Muslim animus to hold that the proclamation likely violated the First Amendment. Dissenting Fourth Circuit judges had reasoned that Mandel and the other exclusion cases prohibited consideration of the extrinsic evidence. The Supreme Court, instead of resolving this disagreement, assumed without deciding that consideration of the extrinsic evidence was appropriate in connection with a rational basis inquiry: AÂ conventional application ofÂ . . . [the] facially legitimate and bona fide [test] would put an end to our review. But the Government has suggested that it may be appropriate here for the inquiry to extend beyond the facial neutrality of the order. For our purposes today, we assume that we may look behind the face of the Proclamation to the extent of applying rational basis review. That standard of review considers whether the entry policy is plausibly related to the Government's stated objective to protect the country and improveÂ vetting processes. As a result, we may consider plaintiffs' extrinsic evidence, but will uphold the policy so long as it can reasonably be understood to result from a justification independent of unconstitutional grounds. In other words, the Court concluded that, even if plaintiffs' evidence of anti-Muslim animus warranted expansion of the scope of judicial review beyond the four corners of the proclamation itself, the appropriate inquiry remained extremely limited: whether the proclamation was rationally related to the national security concerns it articulated. And that rational basis inquiry, the Court explained, is one that the government "hardly ever" loses unless the laws at issue lack any purpose other than a "'bare . . . desire to harm a politically unpopular group.'" Applying this forgiving standard, the Court held that the proclamation satisfied it mainly because agency findings about deficient information-sharing by the governments of the seven covered countries established a "legitimate grounding in national security concerns, quite apart from any religious hostility." In the principal dissent, Justice Sotomayor argued that the majority failed to provide "explanation or precedential support" for limiting its analysis to rational basis review after deciding to go beyond the "facially legitimate and bona fide reason" inquiry. In Justice Sotomayor's view, the Court's Establishment Clause jurisprudence required the Court to strike down the proclamation because a "reasonable observer" familiar with the evidence would have concluded that the proclamation sought to exclude Muslims. She also reasoned that, even if rational basis review were the correct standard, the proclamation failed to satisfy it because the President's statements were "overwhelming . . . evidence of anti-Muslim animus" that made it impossible to conclude that the proclamation had a legitimate basis in national security concerns. Finally, Justice Sotomayor criticized the majority for, in her view, tolerating invidious religious discrimination "in the name of a superficial claim of national security." She compared the majority decision to Korematsu v. United States , a case that upheld as constitutional the compulsory internment of all persons of Japanese ancestry in the United States (including U.S. citizens) in concentration camps during World War II. (The majority responded that unlike the exclusion order in Korematsu the proclamation did not engage in express, invidious discrimination against U.S. citizens and that, as such, " Korematsu has nothing to do with this case." The majority also took the occasion to overrule Korematsu âwhich had long been considered bad law but which the Supreme Court had never expressly overruledâcalling it "gravely wrong the day it was decided." ) In conclusion, Trump v. Hawaii leaves some questions unresolved about how the Mandel test works in practice, but Trump v. Hawaii leaves no uncertainty on one point: Mandel and its progeny permit courts to conduct only a vanishingly limited review of executive decisions to exclude aliens abroad. The Court did not decide whether U.S. citizens may challenge exclusion decisions on statutory grounds or whether, and in what circumstances, courts may consider extrinsic evidence of the government's purpose for an exclusion decision or policy. Yet the majority opinion reaffirms that the standard of review that applies to constitutional claims brought by U.S. citizens against the exclusion of aliens abroad is a "highly constrained" one that favors the government heavily, even when extrinsic evidence suggests that the Executive may have acted for an unconstitutional purpose. Implications of Supreme Court Jurisprudence for the Scope of Congressional Power The Mandel line of cases embraces the broad view of congressional power over the admission and exclusion of aliens that the Supreme Court established in Knauff and earlier precedent, although the cases do leave some uncertainty about the outer edges of the congressional power. Mandel and Din appeared to take the absoluteness of Congress's exclusion power as a given. In Din , Justice Kennedy grounded his conclusionâthat a visa denial withstands constitutional attack so long as the government ties the exclusion to a statutory provisionâon the premise that Congress can impose whatever limitations it sees fit on alien entry. In other words, because Congress's limitations are valid per se , executive enforcement of those limitations is also valid. Mandel makes the same point, albeit mainly through omission. Recall that the case concerned application of an INA provision that rendered the Belgian academic ineligible for a visa because he held communist political beliefs. The Court acknowledged that the statute triggered First Amendment concerns by limiting, based on political belief, U.S. citizens' audience with foreign nationals. But the Court did not assess whether the statute violated the First Amendment. Rather, the Court accepted without significant analysis that Congress had the power to impose such an idea-based entry limitation. As a result, the Mandel decision considered only the First Amendment implications of the Attorney General's refusal to waive Mandel's communism-based ineligibility, not the statutory premise of the ineligibility. The untested assumption underlying Mandel and Din âthat Congress's immigration power encompasses the power to exclude based on any criteria whatsoever, including political beliefâraises a fundamental question about the nature of the plenary power. Often, the Supreme Court has described the power as one that triggers judicial deference , meaning that courts may conduct only a limited inquiry when considering the constitutionality of an exercise of the immigration power. But the plenary power doctrine, as some scholars have noted, can be understood another way, one that perhaps makes more sense of Mandel : the "plenary" refers to the scope of the power itself, in substance, and not to its immunity from judicial review. The congressional power to admit or exclude aliens is so complete, this theory goes, as to override the constitutional limitations that typically constrain legislative action. For example, the power overrides the First Amendment principles that would invalidate legislation that expressly provides for unfavorable treatment based on political belief in almost any other context. Aspects of Fiallo , however, arguably do not support this concept of a substantively limitless congressional power to regulate alien entry. Unlike Mandel and Din , which examined the Executive's application and implementation of authority delegated by statute, Fiallo squarely considered the constitutionality of a statute itself. And while Fiallo 's outcome (upholding an immigration law that discriminated by gender and legitimacy) aligns with the concept of an unbridled legislative power, the Court's reasoning wavered between statements suggesting that the legislative power might have limits and statements describing the power as absolute. The lack of clarity in the opinion seemed to stem from the awkwardness of applying Mandel âwhich fashioned a rule for review of executive action (the "facially legitimate and bona fide" test)âin a case reviewing legislative action. Ultimately, the Fiallo Court cited the Mandel test as an analogue but did not actually apply the test. Rather, the Court upheld the statute at issue under something that looked like a version of rational basis review, one in which a hypothetical justification suffices to sustain the statute. While extremely deferential, this version of rational basis review implies an underlying constitutional limitation against legislative unreasonableness, at least in theory. In other words, an even-handed reading of Fiallo suggests that statutes regulating the admission of aliens must at least be reasonable. Some scholars have argued that Fiallo was incorrectly decided and that stricter constitutional scrutiny should apply to admission and exclusion laws that classify aliens by factors such as race, religion, and gender. To date, this argument does not find support in Supreme Court precedent, particularly not after the Court relied on Fiallo in Trump v. Hawaii to describe the breadth of the political branches' exclusion power. To be sure, the Supreme Court has made clear that Congress cannot deny certain rights to aliens subject to criminal or deportation proceedings within the United States, and that the federal government cannot deny some procedural protections to LPRs returning from brief trips from abroad. But the Court has never suggested that laws regulating the admission of non-LPR aliens trigger anything more than the deferential rational basis review that it applied to the gender-based immigration preferences statute at issue in Fiallo . In other words, the Court has never called Fiallo into question. In one recent case, Sessions v. Morales-Santana , the Supreme Court applied heightened constitutional scrutiny to strike down a derivative citizenship statute that, much like the statute in Fiallo , used gender classifications. However, the Morales-Santana Court distinguished Fiallo and the plenary power doctrine by noting that the statute before it concerned citizenship, not immigration. Accordingly, Morales-Santana does not appear to portend imminent reconsideration of Fiallo . The term after Morales-Santana , the Court applied rational basis review in Trump v. Hawaii to an executive exclusion policy that was based on a statutory delegation of authority, suggesting that nothing more than rational basis review could apply to an exclusion statute itself. To summarize, dicta in two of the exclusion cases that decided challenges to executive action, Mandel and Din , give the impression of a substantively absolute congressional power to control the entry of aliens. But courts have generally interpreted Fiallo , which concerned a direct challenge to a law regulating alien admission and exclusion, to mean that such laws must at least survive a review for reasonableness. To date, the Supreme Court has not heeded calls by some scholars and litigants for more exacting review of laws regulating alien entry. Implications of Supreme Court Jurisprudence for the Scope of Executive Power Mandel , Din , and Trump v. Hawaii trace the contours of the Executive's exclusion power. As described above, Mandel 's "facially legitimate and bona fide reason" test governs claims that an exclusion decision or policy violates a U.S. citizen's constitutional rights. The Executive satisfies the test by identifying the statutory basis for the exclusion. Where the U.S. citizen challenger proffers extrinsic evidence that the Executive acted with an unconstitutional purpose, it might be proper for a reviewing court to consider that evidence, but only as part of a rational basis inquiry under which the exclusion decision or policy must be upheld if "it can reasonably be understood to result from a justification independent of unconstitutional grounds." However, the cases do not resolve definitively at least three issues about the executive power. These issues, discussed below, are (1) whether the Executive possesses inherent exclusion power, as opposed to solely statutory-based power; (2) the extent to which U.S. persons or entities may challenge an alien's exclusion on statutory grounds; and (3) the extent to which the Constitution limits the Executive's application of broad delegations of congressional power to make exclusion determinations. Source of Executive Power The Supreme Court's exclusion cases generally indicate that the authority to exclude aliens reaches the Executive through congressional delegation. The cases generally assign the constitutional power to regulate immigration to Congress and imply that an executive exclusion decision or policy must have a basis in statute. Mandel , Din , and Trump v. Hawaii illustrate this implied point: even though all three cases considered the constitutionality of executive action, the Court focused its analysis in each case on a statutory source of authority for the executive action. For instance, in Trump v. Hawaii , the Court analyzed whether the "Travel Ban" order fit within the President's authority under INA Â§ 212(f) to "suspend the entry of all aliens or any class of aliens." Trump v. Hawaii and the Court's other exclusion cases proceed on the assumption that executive action to exclude aliens requires statutory authorization. An opposing view held by at least one current Supreme Court Justice posits that the Executive has " inherent authority to exclude aliens from the country." Under this view, Congress does not have authority to constrain executive exclusion decisions. This view arguably finds some support in Supreme Court immigration jurisprudence. Many of the cases, for example, do not distinguish between Congress and the Executive when discussing the constitutional power to regulate immigration, suggesting that the two branches could share the power. Furthermore, at least one pre- Mandel Supreme Court decision states expressly that the Executive possesses inherent authority to exclude aliens. The case makes this statement, however, only to rebuff a challenge to the constitutionality of congressional delegations of immigration authority to executive agencies. In other words, the case states that the Executive has inherent exclusion authority only to explain why Congress may delegate exclusion authority to the Executive, not to establish that the Executive may exclude aliens absent statutory authority. The case goes on to acknowledge that, notwithstanding any inherent executive authority, in immigration matters the Executive typically acts upon congressional direction. The text of the Constitution itself does not resolve whether the Executive has a constitutional power to exclude aliens that is independent of statutory authorization. Because the federal government's immigration power rests at least in part upon an "inherent power as a sovereign" not enumerated in the Constitution, courts cannot determine who owns the power by reading Article I or Article II. Neither does Supreme Court precedent resolve the issue definitively. In one 1915 case, Gegiow v. Uhl , the Court held that an executive exclusion decision violated the governing statute. That holding implies that legislative restrictions on such decisions are constitutionally valid. But that brief decision did not discuss the concept of inherent executive authority over immigration, and more recent exclusion cases have not decided the issue because they have resolved statutory challenges by holding that the executive action at issue complied with the relevant statutes. On balance, the weight of authority favors the view that the power to exclude aliens belongs primarily to Congress, at least in the first instance. The idea that the Executive could exclude aliens in contravention of a statuteâor, to a lesser extent, without statutory authorizationâwould challenge separation of powers principles and does not find support even in the one Supreme Court opinion that expressly endorses the concept of an inherent executive immigration power. The idea of an extra-statutory executive exclusion power would also undermine basic features of the Court's exclusion jurisprudence, such as the long-standing rule that a court reviewing the exclusion of an arriving alien in habeas corpus proceedings must ascertain whether immigration officers had statutory authorization to make the exclusion determination. The point remains, however, that the Court has not established clearly that the Executive may not exclude aliens in contravention of a statute or without statutory authorization. This lack of definitive precedent on the issue may result from Congress's extremely broad delegation of exclusion authority to the Executive, most notably in INA Â§ 212(f), and from the limited judicial review available for executive enforcement of exclusion statutes. Finally, a specific aside about the field of diplomacy: because the Reception Clause of the Constitution grants the President the exclusive power to "receive Ambassadors and other public Ministers," it seems more than plausible that a President could override a statute at least when making decisions about the admission or exclusion of foreign diplomats. Statutory Challenges to Executive Decisions to Exclude Aliens Because executive exclusion power appears to derive primarily from statute, executive exclusion decisions or policies are susceptible in theory to attack on the ground that they violate the governing statutes. In Trump v. Hawaii , for instance, the Supreme Court analyzed and rejected arguments that the "Travel Ban" exclusion policy violated provisions of the INA. But the Court declined to resolve a threshold question about such challenges: whether they are barred by the doctrine of consular nonreviewability, which, as discussed above, forms part of the general rule against judicial review of exclusion decisions. Specifically, consular nonreviewability prohibits judicial review of a visa denial unless the denial burdens the constitutional rights of a U.S. citizen, in which case the deferential standard of review under the Mandel line of cases applies to the constitutional claim. The Mandel Court, in recognizing for the first time that U.S. citizens could challenge exclusion decisions despite the bar against such suits when brought by aliens, spoke narrowly of constitutional claims by U.S. citizens. Trump v. Hawaii reasoned that the statutory claims at issue there failed on the merits even if they were subject to judicial review, and the Court therefore declined to answer whether the Mandel exception also encompasses statutory claims brought by U.S. citizens against the exclusion of aliens abroad. At least two federal circuit courts have held that the doctrine of consular nonreviewability bars U.S. citizen challenges to visa denials on statutory grounds, at least when the citizen does not also state constitutional claims. These courts reasoned that permitting review of purely statutory claims would "convert[] consular nonreviewability into consular reviewability" and "eclipse the Mandel exception" by subjecting statutory claims to a more exacting level of review under the APA than constitutional claims receive under the "highly constrained" review that applies under the Mandel line of cases. On the other hand, in two other cases involving a combination of statutory and constitutional claims brought by U.S. citizens against visa denials, courts in the First Circuit and D.C. Circuit reviewed the statutory claims and rejected or called into question the visa denials on statutory grounds. One of these decisions concluded that the statutory claims were reviewable because, among other rationales, the canon of constitutional avoidance required the court to construe the relevant statutes before considering whether the Executive's application of the statutes violated the Constitution. In both cases, the courts analyzed the statutory claims without deferring to the government's determination that the INA required the denial of the visa applications at issue. As a result, the cases scrutinized the government's justifications for excluding aliens much more closely than the Supreme Court analyzed the constitutional claims in Trump v. Hawaii , Mandel , and Din . It was the Ninth Circuit's disagreement with this framework endorsed by the First and D.C. Circuitsâthat statutory challenges to visa denials should draw stricter review than constitutional challengesâthat led it, among other reasons, to hold in a pure statutory case that consular nonreviewability bars statutory claims. The Supreme Court has on at least two occasions rejected statutory challenges brought by U.S. citizens or organizations against the exclusion of aliens abroad without deciding whether such challenges are subject to judicial review. As already mentioned, in Trump v. Hawaii , the Court acknowledged but did not decide the reviewability question in a case that involved a combination of statutory and constitutional claims brought by U.S. citizens and other U.S. parties. In the 1993 case Sale v. Haitian Centers Council , the Court considered and ultimately rejected statutory challenges to the U.S. Coast Guard's interdiction and forced return of Haitian migrants trying to reach the United States by sea. Specifically, the Court analyzed and rejected the argument that the interdictions violated an INA provision requiring immigration authorities to determine whether aliens would suffer persecution in a particular country before returning them to that country. The Sale Court did not address the consular nonreviewability issue, even though the government argued it, but instead seemed to assume without discussion that the statutory challenges to the interdictions and forced returns were reviewable. The only clear holding about consular nonreviewability that arises from Hawaii and Sale is that the doctrine does not deprive federal courts of subject matter jurisdiction over statutory challenges brought by U.S. citizens against the exclusion of aliens abroad, even though the doctrine might supply a rule of decision requiring courts to reject such statutory challenges without reviewing their merits. In summary, federal appellate courts have held that the doctrine of consular nonreviewability bars exclusively statutory challenges brought by U.S. citizens against the executive branch decisions to exclude aliens abroad, but not where the citizens also press constitutional challenges. The Supreme Court has not resolved the issue, but the Court reviewed statutory challenges that were combined with constitutional challenges in Trump v. Hawaii and reviewed exclusively statutory challenges in Sale . Exclusions Based on Broad Delegations of Congressional Power Justice Kennedy concluded in Din that the plenary nature of Congress's power to exclude aliens means that an executive exclusion decision for a statutory reason is facially legitimate and bona fide. But what about where Congress transfers its exclusion power to the Executive with few limiting criteria? What constitutional restrictions does the Executive face in that scenario? Trump v. Hawaii indicates that the Executive, at least in theory, must comply with constitutional guarantees when exercising power delegated from Congress to create exclusion policies. Even though the Court in that case engaged in only a "highly constrained" level of judicial review, it stated that the purpose of the review was to determine whether the challenged exclusion policy could "reasonably be understood to result from a justification independent of unconstitutional grounds." Presumably, if the Court had concluded that the "Travel Ban" proclamation was "'inexplicable by anything other than [anti-Muslim] animus,'" it would have struck down the proclamation for violating the Establishment Clause. Although the proposition that constitutional guarantees restrict executive exercises of exclusion authority may seem unremarkable, the Court actually avoided deciding this issue in Mandel . The relevant statute in that case gave the Attorney General broad discretion to waive the communism-based ground for exclusion. The parties and the Court assumed that Congress had the authority to exclude communists based on their political ideas. The executive branch argued that it, too, could exercise congressionally delegated exclusion authority to deny entry based on political belief or for "any reason or no reason." The Mandel Court, in adopting the "facially legitimate and bona fide" standard, avoided addressing this contention. The Court reasoned that it did not have to decide whether the government could deny an inadmissibility waiver for "any reason or no reason" because the government had in fact supplied a reason for denying Mandel's waiverâhis alleged prior visa abuseâ"and that reason was facially legitimate and bona fide." Thus, Mandel left open the possibility that the First Amendment could limit the executive branch's, but not Congress's, power to exclude based on political belief, but the Court did not decide the issue. After Trump v. Hawaii , however, it seems relatively clear that executive exclusion policies must find support in justifications that are "independent of unconstitutional grounds," even though courts will apply only a "narrow standard of review" to assess those justifications. In other words, constitutional guarantees might not restrict Congress's exercise of the exclusion power, but they apparently do restrict the Executive's exercise of exclusion power delegated to it by Congress. Conclusion The Supreme Court has consistently reaffirmed that legislative and executive decisions to exclude aliens abroad are "'largely immune from judicial control.'" The doctrine of consular nonreviewability bars judicial review of decisions to exclude aliens abroad in most circumstances. And even where such decisions burden the constitutional rights of U.S. citizens, the Mandel line of cases stands for the proposition that federal courts must grant the decisions a level of deference so substantial that it mostly assures government victory over any challenges. Notably, however, Supreme Court precedent mainly describes the deference due to executive exclusion decisions as an issue within Congress's control. The doctrine of consular nonreviewability and the Mandel line of cases take their cue from legislative inaction: because Congress has not said that courts may review executive decisions to exclude aliens abroad, courts mostly do not conduct such review or (where constitutional claims of U.S. citizens are at stake) conduct only an extremely limited form of review. Ultimately, the cases indicate that Congress has authority to expand review through affirmative legislation. Summary:	null	96	84,570	84,572	84,572	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: U nder long-standing Supreme Court precedent, Congress has "plenary power" to regulate immigration. This power, according to the Court, is the most complete that Congress possesses. It allows Congress to make laws concerning non-U.S. nationals (aliens) that would be unconstitutional if applied to citizens. And while the immigration power has proven less than absolute when directed at aliens already physically present within the United States, the Supreme Court has interpreted the power to apply with most force to the admission and exclusion of nonresident aliens. The Court has upheld or shown approval of laws excluding aliens on the basis of ethnicity, gender and legitimacy, and political belief. It has also upheld an executive exclusion policy that was premised on a broad statutory delegation of authority, even though some evidence considered by the Court tended to show that religious hostility may have prompted the policy. Outside of the immigration context, in contrast, laws and policies that discriminate on such bases are almost always struck down as unconstitutional. To date, the only judicially recognized limit on Congress's power to exclude aliens concerns lawful permanent residents (LPRs): they, unlike nonresident aliens, generally cannot be denied entry without a fair hearing as to their admissibility. The plenary power doctrine has roots in the Chinese Exclusion Case of 1889, which upheld a federal statute that provided for the exclusion of Chinese laborers. Some jurists and commentators have criticized the Chinese Exclusion Case for indulging antiquated notions of race. More generally, many legal scholars contend that the plenary power doctrine lacks a coherent rationale and that it is an anachronism that predates modern individual rights jurisprudence. Yet the Supreme Court continues to employ the doctrine. Some commentators have argued that the Court is in the process of narrowing the parameters of the doctrine's applicability, but they find support for this argument mainly in cases outside the exclusion context. In the exclusion context, the Court's 2018 decision in Trump v. Hawaii reaffirms the exceptional scope of the plenary power doctrine. Congress's plenary power to regulate the entry of aliens rests at least in part on implied constitutional authority. The Constitution itself does not mention immigration. It does not expressly confer upon any of the three branches of government the power to control the flow of foreign nationals into the United States or to regulate their presence once here. To be sure, parts of the Constitution address related subjects. The Supreme Court has sometimes relied upon Congress's enumerated powers over naturalization and foreign commerce, and to a lesser extent upon the Executive's implied Article II foreign affairs power, as sources of federal immigration power. Significantly, however, the Court has also consistently attributed the immigration power to the federal government's inherent sovereign authority to control its borders and its relations with foreign nations. It is this inherent sovereign power, according to the Court, that gives Congress essentially unfettered authority to restrict the entry of nonresident aliens. The Court has determined that the executive branch, by extension, possesses unusually broad authority to enforce laws pertaining to alien entry, and to do so under a level of judicial review much more limited than that which would apply outside of the exclusion context. Recent events have generated congressional interest in the constitutional division of responsibilities between Congress and the Executive in establishing and enforcing policies for the exclusion of aliens. Through three iterative executive actions in 2017, commonly known as the "Travel Ban," the President provided for the exclusion of broad categories of nationals of specified countries, most of which were predominantly Muslim. These executive actions relied primarily upon a delegation of authority in the Immigration and Nationality Act (INA) allowing the President, by way of proclamation, to exclude "any aliens" or "any class of aliens" whose entry he determines would be "detrimental to the interests of the United States." In June 2018, the Supreme Court upheld the third iteration of the Travel Ban as likely lawful, rejecting claims that it was motivated by unconstitutional religious discrimination and that it exceeded the President's authority under the INA. Since that decision, some Members of Congress have proposed curtailing executive authority to craft exclusion policy or subjecting executive exclusion decisions and policies to more stringent judicial review. This report provides an overview of the legislative and executive powers to exclude aliens. First, the report discusses a gatekeeping legal principle that frames those powers: nonresident aliens outside the United States cannot challenge their exclusion from the country in federal court because Congress has not expressly authorized such challenges. But aliens at the threshold of entry have more access to judicial review of exclusion decisions, compared to aliens abroad, because of statutory provisions and other considerations. Next, the report analyzes the extent to which the constitutional and statutory rights of U.S. citizens limit the exclusion power. Specifically, the report examines a line of Supreme Court precedent, starting with Kleindienst v. Mandel and ending with Trump v. Hawaii , that makes a highly curtailed form of judicial review available to U.S. citizens who claim that the exclusion of one or more aliens abroad violates the U.S. citizens' constitutional rights. The report concludes by analyzing the implications of these cases for the scope of the congressional power to legislate for the exclusion of aliens and, separately, for the scope of the executive power to take action to exclude aliens. Knauff and the General Rule Against Judicial Review of Exclusion Decisions As discussed later, Supreme Court case law on the exclusion of aliens has come to focus upon whether the rights of U.S. citizens limit the government's power to exclude. The case law arrived at this issue, however, only after the Supreme Court developed an underlying principle: nonresident aliens outside the United States do not have constitutional rights with respect to entry. Further, any statutory provisions that govern the admission of nonresident aliens do not permit judicial review unless Congress "expressly authorize[s]" such review, something that federal courts generally conclude Congress has not done. Put differently, Congress's plenary power over immigration includes not merely the power to set rules as to which aliens may enter the country and under what conditions, but also the power to have such rules "enforced exclusively through executive officers, without judicial intervention" unless Congress provides otherwise. Because Congress has not provided otherwise, judicial review of decisions to exclude aliens abroad is generally unavailable. The Supreme Court developed these general principles against judicial review of exclusion decisions in a series of cases between the late 19th and mid-20th centuries about aliens denied admission after arriving by sea. In one illustrative early case, the 1895 decision Lem Moon Sing v. United States , a Chinese national contended that immigration officers improperly denied him admission under the Chinese exclusion laws. Those laws barred the entry of Chinese laborers, but the Chinese national described himself as a merchant and argued that the laws therefore did not apply to him. As a consequence of his exclusion, he was detained by the steamship company. The Supreme Court recognized that the professed merchant could challenge the legality of his detention through a petition for habeas corpus. This procedural right ultimately proved hollow, however, because the Court held that it could not review the immigration officials' determination that the petitioner fell within the scope of the provision excluding Chinese laborers. The Court explained that Congress had precluded such review by providing in statute that the decisions of immigration officers to deny admission to aliens under the Chinese exclusion acts "shall be final, unless reversed on appeal to the secretary of the treasury." In other words, the statute allowed only the Secretary of the Treasury to review exclusion decisions under the acts. Accordingly, the Court limited its consideration of the habeas petition to the narrow question of whether the immigration officers who excluded the professed merchant had authority to make exclusion and admission decisions under the statutes (in other words, whether the officers had jurisdiction). Determining that the immigration officers did have such statutory authority, the Court rejected the habeas petition without reviewing the petitioner's contention that he was in fact a merchant, not a laborer. To review that contention, the Court reasoned, would "defeat the manifest purpose of congress in committing to subordinate immigration officers . . . exclusive authority to determine whether a particular alien seeking admission into this country belongs to the class entitled by some law or treaty to come into the country." The Court saw no constitutional problem in Congress's assignment of final authority over exclusion decisions to executive officials. The Court considered it a settled proposition that, because aliens lack constitutional rights with respect to entry, exclusion decisions "could be constitutionally committed for final determination to subordinate immigration or other executive officers . . . thereby excluding judicial interference so long as such officers acted within the authority conferred upon them by congress." Two major Supreme Court decisions from the 1950s appeared to transform the principle from Lem Moon Sing and earlier casesâthat Congress may bar judicial review of exclusion decisions affirmativelyâinto a presumption that judicial review of exclusion decisions is barred unless Congress expressly provides otherwise. First, in the 1950 case United States ex rel. Knauff v. Shaughnessy , the Court declared itself powerless to review an executive branch decision to exclude the German bride of a U.S. World War II veteran, even though executive officials failed to explain the exclusion beyond stating that the woman's entry would have been "prejudicial." The Court reiterated that aliens do not have constitutional rights with respect to entry and reasoned that, as a consequence, "[w]hatever the procedure authorized by Congress is, it is due process as far as an alien denied entry is concerned." In what would become an oft-cited sentence, the Court also announced the presumption against judicial review of exclusion decisions: "it is not within the province of any court, unless expressly authorized by law , to review the determination of the political branch of the Government to exclude a given alien." Next, in the 1953 case Shaughnessy v. Mezei , the Court refused to question the Executive's undisclosed reasons for denying entry to an essentially stateless alien returning to the United States after a prior period of residence, even though the exclusion relegated the stateless alien to potentially indefinite detention on Ellis Island. The Mezei Court cited Knauff for the proposition that federal courts may not review exclusion decisions "unless expressly authorized by law," and the Court held that the Attorney General's decision to exclude Mezei and detain him as a consequence of that exclusion was "final and conclusive." The issue of detention complicated the Knauff and Mezei cases. Because the aliens in both cases suffered detention as a result of their exclusion, they filed petitions for habeas corpus challenging the legality of their detention. And in both cases, in accord with Lem Moon Sing and other early precedents, and notwithstanding the Court's declaration in Knauff and Mezei that judicial review of the exclusion decisions was unavailable, the Court conducted a limited inquiry into whether the governing statutes empowered the Attorney General to exclude the aliens without a hearing. As explained further below, in the immigration context, the Supreme Court does not construe a general bar on judicial review to preclude habeas corpus review, although the proper scope of habeas review in cases concerning the exclusion of arriving aliens remains unclear. In any event, even though the Knauff and Mezei Courts conducted a limited habeas inquiry into the Attorney General's statutory authority to exclude aliens without a hearing, federal courts often cite the cases (and especially Knauff ) for the proposition that courts may not review exclusion decisions unless Congress expressly provides otherwise. Many scholars criticize Knauff and Mezei as incorrectly decided. The aspect of Mezei that upholds as constitutional the indefinite detention of an arriving alien, in particular, is controversial and has been limited by some lower federal courts to apply only in cases that implicate national security. The Supreme Court, however, has cited Knauff and earlier exclusion cases for the proposition that excluded nonresident aliens do not have grounds to challenge their exclusion in federal court. Under current law, this proposition forms the basis for the doctrine of consular nonreviewability, which bars judicial review in almost all circumstances of the denial of visas to aliens abroad. The general principle against judicial review of exclusion decisions applies with less force to executive decisions to exclude aliens arriving in the United States, even though the rule arose from cases about such aliens. The general principles that govern reviewability of both of these two categories of exclusion decisionsâ(1) visa denials and other exclusion decisions concerning aliens located abroad; and (2) decisions to deny entry to aliens arriving at U.S. borders or ports of entryâare discussed below. Nonresident Aliens Located Abroad: Consular Nonreviewability The doctrine of consular nonreviewability precludes judicial review of challenges brought by nonresident aliens located abroad against visa denials and also possibly against other actions by executive branch officials to deny them admission. Under the doctrine, the millions of nonresident aliens denied visas each year at U.S. consulates abroad cannot themselves challenge their visa denials in federal court on statutory or constitutional grounds. The doctrine may also bar U.S. citizens, LPRs, and U.S. entities from challenging the exclusion of a nonresident alien abroad on statutory grounds (as opposed to constitutional grounds), although the Supreme Court has not decided this issue. The general unavailability of judicial review of visa denials under the doctrine means that U.S. consular officers (the officials who adjudicate visas abroad) have considerable power to make final decisions about visa applications. Table 1 provides an overview of the types of claims to which the doctrine of consular nonreviewability applies. Legal Basis for Consular Nonreviewability Much controversy surrounds the doctrine of consular nonreviewability. Some scholars argue that it lacks a compelling foundation in law. No statute speaks expressly to the issue of whether visa decisions should be subject to judicial review. Even so, lower federal courts recognize the doctrine with apparent uniformity (although some have recognized exceptions to it, as discussed in the next subsection). As authority for the doctrine, courts often cite Knauff and the other Supreme Court cases referenced above concerning the denial of admission to aliens arriving by sea. In particular, the consular nonreviewability cases cite these Supreme Court precedents for the proposition that Congress's plenary immigration power includes the power to have statutes governing the admission of aliens "enforced exclusively through executive officers, without judicial intervention" and that "it is not within the province of any court, unless expressly authorized by law, to review the determination of the political branch of the Government to exclude a given alien." Thus, the reasoning that supports lower court applications of the doctrine appears to be that Congress has not expressly authorized judicial review of visa denials. Because the doctrine has its basis in Knauff and the presumption against judicial review of exclusion decisions, it does not apply to the decisions of domestic immigration authorities to deny immigration benefits, unless perhaps those decisions underlie eventual visa denials or otherwise work to exclude aliens located abroad. Some federal courts have sought to reconcile the doctrine of consular nonreviewability with the provisions governing judicial review of final agency action set forth in the Administrative Procedure Act (APA). The APA establishes a "strong presumption" that the actions of federal agenciesâincluding the Department of Stateâare subject to judicial review. Yet, according to these courts, Congress enacted the APA against the backdrop of already-existing consular nonreviewability jurisprudence and without expressly overruling that jurisprudence by providing for review of consular decisions. On this basis, these courts have concluded that the doctrine of consular nonreviewability constitutes a preexisting limitation on judicial review that the APA preserves through its stipulation, in 5 U.S.C. Â§â¯702(1), that nothing in the statute "affects other limitations on judicial review." In other words, the APA preserves consular nonreviewability as an exception to the general rule that judicial review is available for agency action. Although the doctrine of consular nonreviewability is well established, it remains true that no statute expressly bars judicial review of visa denials abroad. For this reason, courts generally hold that the doctrine "supplies a rule of decision, not a constraint on the subject matter jurisdiction of the federal courts." The legislative history of the original Immigration and Nationality Act of 1952 indicates that Congress considered and rejected the idea of creating within the Department of State a system of administrative appeals for visa denials, and the current version of the INA bars the Secretary of State from overturning visa decisions. But Congress has not legislated affirmatively to shield visa decisions from judicial review. The doctrine of consular nonreviewability is therefore premised upon the absence of any specific statutory authorization for the review of visa denials, not upon an explicit statutory prohibition on such review. Exceptions to Consular Nonreviewability Supreme Court case law qualifies the doctrine of consular nonreviewability in one important respect discussed at length later in this report: if a U.S. citizen challenges the exclusion of a nonresident alien abroad on the ground that the exclusion violates the citizen's constitutional rights, then, under the rule of Kleindienst v. Mandel and later cases, courts "engage[] in a circumscribed judicial inquiry" of the constitutional claim. Mandel recognized that U.S. citizens may have constitutional rights that bear upon the entry of nonresident aliens, even though nonresident aliens themselves do not have such rights. As such, the case law of multiple federal circuit courts of appeals establishes that "a U.S. citizen raising a constitutional challenge to the denial of a visa is entitled to a limited judicial inquiry regarding the reason for the decision." This is the only exception to consular nonreviewability that federal courts have recognized uniformly. As explained later in the section on the Mandel line of cases, it allows challengers only exceedingly slim prospects of obtaining relief from a visa denial. Lower federal courts have split over whether U.S. citizens may also challenge visa denials on statutory grounds. Some lower federal courts have recognized other exceptions to consular nonreviewability's bar on judicial review of decisions to exclude aliens abroad. For instance, at least one federal circuit court decision extends the Mandel principle to allow a limited level of judicial review of a constitutional challenge brought directly by an excluded nonresident alien (rather than a U.S. citizen) against the denial of a visa. This extension, however, seems at odds with Mandel itself, which concluded that a nonresident alien who was denied the statutory waivers needed to secure a visa "had no constitutional right of entry," and that limited judicial review was therefore available only because of constitutional claims brought by U.S. citizens against the alien's exclusion. Other federal appellate court decisions make clear that review of visa denials under Mandel is available only for claims brought by U.S. citizens. In another non-uniformly recognized exception, a line of decisions by the U.S. Court of Appeals for the Ninth Circuit allows nonresident aliens to challenge a consular officer's failure to act upon a visa application (as opposed to the denial of an application). The supporting rationale is that the Mandamus Act supplies a basis for judicial review where an official fails to take a legally required action, such as the adjudication of a visa application, even if the APA does not. This exception to the rule of consular nonreviewability is not as well established as the exception allowing for limited review of constitutional claims brought against visa denials by U.S. citizens. Federal district courts outside the Ninth Circuit have split over whether to recognize the exception. However, as discussed in the next section, in cases not specifically concerning the adjudication of visas, other courts have recognized that the Mandamus Act creates an exception to the presumption against judicial review of decisions to exclude aliens abroad. Other federal district court opinions may suggest further exceptions to consular nonreviewability that have yet to gain uniform recognition, such as an exception allowing visa applicants to challenge the validity of generally applicable statutes, regulations, or policies that govern their applications. Nonetheless, the review available under Mandel for constitutional challenges brought by U.S. citizens remains the only exception to consular nonreviewability grounded in Supreme Court case law and universally recognized by lower federal courts. Nonresident Aliens Abroad Who Seek Entry to Remedy Prior Violations of Constitutional or Statutory Rights Other cases concerning aliens abroad that implicate the presumption against judicial review of exclusion decisions and the doctrine of consular nonreviewability address the following question: may a federal court order the executive branch to grant entry to a nonresident alien located abroad in order to remedy violations of constitutional or statutory rights that the alien suffered while in the United States or while detained by the United States? The Seventh and Ninth Circuits have both answered in the affirmative. The D.C. Circuit, however, has held that Knauff bars courts from ordering the executive branch to grant entry to an alien unless a statutory provision authorizes courts to do so. The Ninth Circuit held that a federal district court has authority to order the executive branch to parole aliens whom it removed in violation of due process back into the country to attend fair removal proceedings. "Without a provision requiring the government to admit individual [aliens] into the United States so that they may attend the hearings to which they are entitled," the court reasoned, the determination that their removal proceedings violated due process "would be virtually meaningless." In other words, the only way to remedy the constitutional violation was to order the government to grant the aliens reentry. In a recent district court case that relied on the Ninth Circuit decision, the district court reasoned that ordering the government to grant reentry to aliens who were removed in violation of law did not contravene the political branches' broad authority over exclusion decisions because the remedy formed part of the review that Congress authorized courts to conduct of removal orders under the INA. The Seventh Circuit reached a broader holding in a different context. The case, Samirah v. Holder , concerned an alien who had overstayed his nonimmigrant visa but who had applied for LPR status (through a process called "adjustment of status"). When his mother fell ill in Jordan, the alien received a grant of advance parole from the Department of Homeland Security (DHS) so that he could visit her without abandoning his application for adjustment and with some assurance that he would be able to return to the United States to pursue the application. But while the alien was abroad, DHS revoked his advance parole and did not allow him to board a connecting flight back to the United States. Reviewing the alien's application for a writ of mandamus ordering executive branch officials to grant him reentry, the Seventh Circuit reasoned that DHS had used the advance parole as "a trapâa device for luring a nonlawful resident out of the United States so that he can be permanently excluded from this country." The circuit court held that DHS's parole regulation unambiguously granted the plaintiff a right to reenter the country to continue pursuing his pending application for adjustment of status and that the court could enforce that right through mandamus. Further, the circuit court reasoned that the Supreme Court's holding in Knauff âthat "it is not within the province of any court,Â unless expressly authorized by law , Â to review the determination of the political branch of the Government to exclude a given alien"âdoes not apply in instances where a statute or regulation grants an excluded alien a right to physical presence in the United States. Put differently, where a nonresident alien abroad "has a right, conferred by a regulation the validity of which is conceded all around, to be in this country," Knauff and the doctrine of consular nonreviewability do not bar a court from ordering executive branch officials to grant the alien entry. The Court did not clarify, however, whether the alien's right to be in the United States under the parole regulation also constituted an "express[] authoriz[ation]" of judicial review , within the meaning of Knauff , of the alien's exclusion. The Supreme Court, for its part, has held at least once that the potential existence of a right to entry does not give rise to judicial review of an alien's exclusion. A D.C. Circuit decision stands in tension with the Seventh and Ninth Circuit cases. In Kiyemba v. Obama , the D.C. Circuit held that it did not possess authority to order executive branch officials to grant entry into the United States to seventeen Chinese nationals detained without sufficient evidence as enemy combatants in Guantanamo Bay. The aliens feared that they would face persecution in China and requested entry and release into the United States, at least until authorities could locate an appropriate third country to accept them, but executive branch officials denied their request and continued to hold the aliens at Guantanamo Bay while pursuing resettlement options through diplomacy. Although the illegality of the aliens' detention was undisputed, the D.C. Circuit held that it could not order the government to release the aliens into the United States. The circuit court cited Knauff , Mezei , and other exclusion cases for the principle that the political branches have "exclusive power . . . to decide which aliens may, and which aliens may not, enter the United States," and reasoned that this principle barred it from granting the requested relief. The "critical question" under Knauff , the circuit court reasoned, was whether any law "expressly authorized" courts "to set aside the decision of the Executive Branch and to order the[] aliens brought to the United States." The Court concluded that the aliens did not have due process rights and that no other "statute or treaty" authorized it to override the executive branch's decision not to grant the aliens entry to the United States. As such, the rule that "in the United States, who can come in and on what terms is the exclusive province of the political branches" foreclosed the aliens' claims for relief. In conclusion, the Seventh and Ninth Circuit cases suggest that the doctrine of consular nonreviewability does not bar federal courts from ordering executive branch officials to grant entry to nonresident aliens abroad for the purpose of remedying constitutional, statutory, or regulatory violations that the aliens suffered in the United States. However, the cases may not fully explain how such judicial authority to order a nonresident alien's entry comports with Knauff and the principles underlying the doctrine of consular nonreviewability. The D.C. Circuit opinion, in contrast, appears to stand for the proposition that Knauff allows federal courts no authority to order the entry of a nonresident alien located outside the United States, unless a statute expressly authorizes such relief. Aliens Excluded at the Border or Port of Entry Under current law, the general rule against challenges to denials of entry appears less relevant in the context of arriving aliens at the threshold of entry, notwithstanding the rule's provenance in Knauff and other cases about such aliens. Unlike in the visa context, it is not rare for federal courts to review and even strike down executive exclusion decisions and policies concerning aliens arriving at the border. At least three interrelated considerations contribute to the diminished relevance of the rule against challenges to exclusion decisions in arriving alien cases. Detention and Other Consequences of Exclusion First, decisions to exclude arriving aliens, unlike decisions to exclude aliens abroad, typically result in detention. Although nonresident aliens do not have constitutional rights with respect to entry , they may enjoy some protection from burdensome enforcement measures, such as prolonged detention, that sometimes flow from denial of entry. Recall, for example, the 1953 Mezei case mentioned above, where the Supreme Court denied relief to a stateless alien whose exclusion left him detained on Ellis Island without prospects for release. Unlike cases about aliens denied visas abroad, Mezei raised not only the question of whether the alien had grounds to challenge his exclusion from the United States, but also whether the government could keep him in detention on Ellis Island as a consequence of the exclusion decision. The majority answered this second question in the affirmative, reasoning that Mezei's lack of constitutional rights with respect to entry, and Congress's decision not to provide him with any judicially enforceable statutory rights to entry, foreclosed his challenge to the detention that resulted from his exclusion. In dissent, Justice Jackson made a famous retort: Because the respondent has no right of entry, does it follow that he has no rights at all? Does the power to exclude mean that exclusion may be continued or effectuated by any means which happen to seem appropriate to the authorities? It would effectuate [an alien's] exclusion to eject him bodily into the sea or set him adrift in a rowboat. In more recent cases, the Supreme Court has hesitated to rely on Mezei for the proposition that the federal government has the constitutional power to subject arriving aliens to prolonged detention in order to carry out their exclusion. Some lower courts have gone further and held that arriving aliens have due process rights that offer some protection against unreasonably prolonged detention, reasoning that Mezei applies only in cases that implicate specific national security concerns. The Supreme Court has yet to resolve the issue. As such, the extent to which aliens arriving at the border enjoy constitutional protections against prolonged detention or other enforcement measures connected to the denial of entry is a disputed issue. And while the law remains clear on the point that arriving nonresident aliens do not have constitutional rights with respect to entry itself, the proposition that they may have constitutional rights against detention or other enforcement measures that implicate fundamental rights often leads to judicial review of issues arising from their exclusion. Habeas Corpus Review Second, also because of the detention issue, arriving alien cases may trigger some level of habeas corpus review. Knauff and Mezei establish that no judicial review is available for exclusion decisions unless a statute expressly authorizes such review. But at the same time, the cases confirm an arguably countervailing proposition: that arriving aliens who suffer detention as a consequence of exclusion may challenge their exclusion in habeas corpus proceedings. Thus, in Knauff , the Court disavowed judicial review but still considered and rejected the excluded alien's argument that the applicable statutes required the Attorney General to conduct a hearing on her admissibility and that an executive branch regulation providing to the contrary was "unreasonable." Similarly, in Mezei , the Court's habeas review included an assessment that the exclusion of the stateless alien in that case without a hearing conformed to the procedural requirements of the immigration statutes. As the Court has noted elsewhere, "[i]n the immigration context, 'judicial review' and 'habeas corpus' have historically distinct meanings." The Court has held in the deportation context that the preclusion of judicial review does not bar habeas corpus proceedings. Knauff , Mezei , and earlier exclusion cases suggest that the same principle applies in the exclusion context: the cases declare that judicial review is unavailable for challenges to exclusion decisions, but they nonetheless engage in some review of executive jurisdiction and procedure under the rubric of habeas corpus. The scope of federal court review in habeas corpus proceedings of a decision to exclude an alien appears extremely limited, although its exact contours remain unclear (as does the question whether such proceedings are constitutionally required). The habeas review that the Court conducted in Knauff and Mezei did not reach the merits of the exclusion decisions. In Knauff , the Court declined to review the Attorney General's determination that the German war bride's entry would be "prejudicial." Similarly, in Mezei , the Court held that it could not review the Attorney General's undisclosed reasons for excluding the stateless alien. As such, one might read Knauff and Mezei to mean that courts reviewing exclusion decisions in habeas proceedings (1) may review pure questions of law, such as whether immigration officials had jurisdiction to enforce the relevant exclusion statutes and whether the statute authorized them to forgo a hearing, but (2) may not review the basis for the officials' determination that the statutes require the aliens' exclusion. Other cases complicate this picture, however. In at least one early habeas case that the Supreme Court has not overruled, the Court reviewed and reversed the determination of immigration officers that a group of arriving aliens was subject to exclusion under the immigration statutes. One federal circuit court has interpreted Supreme Court case law to suggest that "the Suspension Clause requires review of legal and mixed questions of law and fact related to removal orders, including expedited removal orders." The proper reach of a habeas court's review of the exclusion of an arriving alien thus remains unsettled, although the Supreme Court is scheduled to consider this issue in 2020. Regardless, the availability of any level of habeas review in arriving alien cases means that, in practice, the general rule against judicial review of exclusion decisions applies with less force in this context than in the context of visa denials or other decisions to exclude aliens located abroad , where the lack of detention makes habeas unavailable. INA Framework for Judicial Review of Removal Orders Third and finally, Congress has established a limited framework in the INA for the review of orders of removal against arriving nonresident aliens. The INA sets forth two primary procedures by which DHS officials may remove aliens arriving in the United States. These procedures are expedited removal, a streamlined process that contemplates removal without a hearing before an immigration judge, and formal removal, a more traditional proceeding in which an immigration judge determines whether to order the alien's removal. The INA specifies the limited circumstances in which an alien ordered removed under these procedures may obtain judicial review. The INA also expressly bars or limits judicial review of a range of executive branch actions and determinations connected to the removal process. This INA scheme of limitations on judicial review purports to bar review of expedited removal orders in most circumstances, but it may not bar review of some executive branch exclusion policies that bear upon the expedited removal process (such as, for example, executive policies that restrict asylum eligibility for some aliens arriving at the border who are subject to expedited removal procedures). These INA provisions concerning the reviewability of removal orders appear to have replaced the Knauff presumptionâthat judicial review of exclusion decisions is unavailable "unless expressly authorized by law"âas the touchstone for whether executive decisions or policies for the exclusion of arriving nonresident aliens are subject to judicial review. When the INA expressly authorizes judicial review of orders or policies for the removal of arriving aliens, federal courts engage in such review. More broadly, however, federal courts have also shown a willingness to review statutory challenges to exclusion decisions or policies concerning aliens at the threshold of entry so long as the INA does not expressly bar such review (even if it does not expressly authorize review). This situation typically arises in cases where arriving aliens or their advocates challenge an executive branch exclusion policy under the APA. How judicial review in such exclusion casesâwhere the INA neither expressly authorizes nor bars reviewâcomports with the Knauff presumption remains largely unexplained in the case law. Yet the Supreme Court has on at least one occasion allowed for judicial review of inadmissibility determinations of arriving aliens on the ground that Congress had not expressly barred such review: in the 1956 case Brownwell v. We Shung , the Court held that arriving aliens could challenge inadmissibility determinations through declaratory judgment actions because the relevant statuteâa prior version of the INA that Congress later amended in disapproval of the Supreme Court decisionâdid not bar such actions. This decision appeared to disregard the presumption against judicial review of exclusion determinations established in Knauff and earlier exclusion cases, although the We Shung Court did not address this point. The underlying implication of We Shung , and of the more recent lower court decisions reviewing statutory challenges to executive branch policies concerning the exclusion of arriving aliens, may be that the INA's judicial review framework for orders of removal occupies the territory that the Knauff presumption against judicial review once occupied and therefore replaces the Knauff presumption as the law governing the availability of judicial review in arriving alien exclusion cases. To recap: the current case law generally provides that statutory challenges to the exclusion of arriving aliens are reviewable unless a statute expressly bars such judicial review. However, the case law does not thoroughly reconcile this approach with the Knauff presumption that there should be no review of an exclusion determination unless the review is expressly authorized in statute. Conclusion Concerning General Rule Against Judicial Review of Exclusion Decisions The line of Supreme Court exclusion jurisprudence culminating in Knauff and Mezei establishes that courts may not review challenges to the exclusion of nonresident aliens unless Congress expressly provides for such review. In the context of aliens located abroad, this jurisprudence has developed into the rule of consular nonreviewability, which bars judicial review in most circumstances of visa refusals and other decisions to exclude nonresident aliens abroad. In the context of arriving aliens, however, the Knauff presumption against judicial review of exclusion decisions appears to have been mostly overshadowed by constitutional issues concerning enforcement measures related to the denial of entry, the potential availability of some level of habeas review, and the framework of INA provisions governing judicial review of removal orders. Claims by U.S. Citizens Against an Alien's Exclusion Even as applied to aliens abroad, the rule against nonresident alien challenges to denials of entry has a major limitation: the rule only clearly forecloses challenges brought by nonresident aliens themselves. Thus, if a U.S. citizen claims that the exclusion of an alien violated the U.S. citizen's constitutional rights, the rule against alien challenges does not apply with its full force. Cases that invoke this limitation account for the entirety of the Supreme Court's modern exclusion jurisprudence. The Court has not considered a nonresident alien's own challenge to a denial of entry in decades. The question about the extent to which U.S. citizens can challenge an alien's exclusion, on the other hand, has occupied the Court in four important cases since 1972: Kleindienst v. Mandel , Fiallo v. Bell , the splintered Kerry v. Din , and Trump v. Hawaii . Under the rule that these cases establish, the government need satisfy only a "highly constrained" judicial inquiry into whether the exclusion "had a justification independent of unconstitutional grounds" in order to prevail against an American citizen's claim that the exclusion violated his or her constitutional rights. This is an extremely limited level of judicial review under which the government has always prevailed before the Supreme Court. Mandel and the Narrow Review of Exclusion Decisions In 1972, the Court confronted a case in which a group of American professors claimed that the exclusion of a Belgian intellectual, Ernest Mandel, violated the American professors'âand not Mandel'sâFirst Amendment rights. The professors had invited Mandel to speak at their universities. A provision of the INA rendered him ineligible for a visa because of his communist political beliefs. A separate provision authorized the Attorney General to waive Mandel's ineligibility upon a recommendation from the Department of State, but the Attorney General declined to do so. The case produced a standard of review for claims that the exclusion of an alien violates an American citizen's constitutional rights: [P]lenary congressional power to make policies and rules for exclusion of aliens has long been firmly established . . . . We hold that when the Executive exercises [a delegation of this power] negatively on the basis of a facially legitimate and bona fide reason , the courts will neither look behind the exercise of that discretion, nor test it by balancing its justification against the First Amendment interests of those who seek personal communication with the applicant. Applying this "facially legitimate and bona fide" test, the Court upheld Mandel's exclusion on the basis of the government's explanation that it denied the waiver because Mandel had abused visas in the past. The American professors and two dissenting Justices pointed to indications of pretext and argued that Mandel had actually been excluded because of his communist ideas. Nonetheless, the majority refused to "look behind" the government's justification to determine whether any evidence supported it. In other words, the Court accepted at face value the government's explanation for why it denied Mandel permission to enter. The "facially legitimate and bona fide" standard resolved what the Court saw as the major dilemma that the dispute over Mandel's visa posed for the bedrock principles of its immigration jurisprudence. Unlike Mandel himself and the unadmitted aliens from prior exclusion cases, the American professors stated a compelling First Amendment claim based on their "right to receive information" from the Belgian intellectual. But for the Court to grant relief on that claim, or even to grant full consideration of the claim, would have undermined Congress's plenary power to exclude aliens by interjecting the courts into the exclusion process. After all, many other exclusions of aliens for communist ideology could also have implicated the rights of U.S. citizens who sought to "meet and speak with" the excluded aliens. The "facially legitimate" standard protected the plenary power against dilution by limiting the reach of the American professors' claim. Under the standard, the professors were not entitled to balance their First Amendment rights against the government's exclusion power; they were entitled only to a constitutionally valid statement as to why the government exercised the exclusion power. Significantly, the Court left open the question whether the American professors' rights entitled them to even that much. Although the government proffered a "facially legitimate and bona fide" justification for Mandel's exclusion, the Court declined to say whether the government would have prevailed even if it had offered "no justification whatsoever." Subsequent Applications of Mandel: Fiallo, Din, and Trump v. Hawaii The Court has followed Mandel in three subsequent exclusion cases. The first of these cases, Fiallo v. Bell , concerned the constitutionality of a statute; the second, Kerry v. Din , concerned the Executive's application of a statute in an individual visa case; and the third, Trump v. Hawaii , concerned the Executive's invocation of statutory authority to exclude a broad class of aliens by presidential proclamation. All three cases reinforce the notion of the government's plenary power to exclude aliens even in the face of constitutional challenges brought by U.S. citizens. The second and third cases, however, indicate that a different standard of review than Mandel 's "facially legitimate and bona fide" test may apply when challengers present extrinsic evidence of an unconstitutional justification for an executive exclusion decision or policy. The Supreme Court has assumed without definitively holding that, in such cases, reviewing courts may consider the extrinsic evidence to determine whether the exclusion decision or policy "can reasonably be understood to result from a justification independent of unconstitutional grounds." Fiallo v. Bell In Fiallo v. Bell , the Court upheld a provision of the INA that classified people by gender and legitimacy. The statute granted special immigration preferences to the children and parents of U.S. citizens and LPRs, unless the parent-child relationship at issue was that of a father and his illegitimate child. Two U.S. citizens and two LPRs claimed that the restriction violated their equal protection rights by disqualifying their children or fathers from the preferences. Despite the "double-barreled discrimination" on the face of the statute, the Court upheld it as a valid exercise of Congress's "exceptionally broad power to determine which classes of aliens may lawfully enter the country." Although it relied on Mandel , the Fiallo Court did not identify a concrete "facially legitimate or bona fide" justification for the statute. Instead, the Court surmised that a desire to combat visa fraud or to emphasize close family ties may have motivated Congress to impose the gender and legitimacy restrictions. Similar to the analysis in Mandel , the Fiallo Court justified its limited review of the facially discriminatory statute as a way to prevent the assertion of U.S. citizen rights from undermining the sovereign prerogative to exclude aliens. Kerry v. Din In Kerry v. Din , the Court considered a U.S. citizen's claim that the Department of State violated her due process rights by denying her husband's visa application without sufficient explanation. The Department indicated that it denied the visa under a terrorism-related ineligibility but did not disclose the factual basis of its decision. The Court rejected the claim by a vote of 5 to 4 and without a majority opinion. Justice Scalia, writing for a plurality of three Justices, did not reach the Mandel analysis because he concluded that Din did not have a protected liberty interest under the Due Process Clause in her husband's ability to immigrate. But Justice Kennedy, in a concurring opinion for himself and Justice Alito, which some lower courts view as the controlling opinion in the case, assumed without deciding that the visa denial implicated due process rights but rejected the claim under the "facially legitimate and bona fide reason" test. Justice Kennedy's concurring opinion made two significant statements about how Mandel works in application. First, the government may satisfy the "facially legitimate and bona fide reason" standard by citing the statutory provision under which it has excluded the alien. Such a citation fulfills the "facially legitimate" prong by grounding the exclusion decision in legislative criteria enacted under Congress's "plenary power" to restrict the entry of aliens, and the citation also, by itself, suffices to "indicate[] [that the government] relied upon a bona fide factual basis" for the exclusion. Thus, because the government stated that it denied Din's husband's visa application under the terrorism-related ineligibility, it provided an adequate justification under Mandel even though it did not disclose the factual findings that triggered the ineligibility. Pointing to the statute suffices. Second, however, Justice Kennedy indicated that his interpretation of the "bona fide" prong might be susceptible to a caveat in some cases: Absent an affirmative showing of bad faith on the part of the consular officer who denied Berashk [Din's husband] a visaâwhich Din has not plausibly alleged with sufficient particularityâ Mandel instructs us not to "look behind" the Government's exclusion of Berashk for additional factual details beyond what its express reliance on [the terrorism-related ineligibility] encompassed. In other words, under Justice Kennedy's reading of the Mandel standard, courts will assume that the government has a valid basis for excluding an alien under a given statuteâ unless an affirmative showing suggests otherwise. In Din , the facts did not suggest bad faith, because Din's own complaint revealed a connection between the statutory ineligibility and her husband's case. Justice Kennedy therefore had no occasion to apply the caveat, and the opinion did not clarify what kind of "affirmative showing" would trigger it. Nonetheless, Justice Kennedy's concept of a bad faith exception to Mandel 's rule against judicial scrutiny of the government's underlying factual basis for an exclusion decision became a prominent issue in the Supreme Court's most recent exclusion case, Trump v. Hawaii . Trump v. Hawaii Most recently, in Trump v. Hawaii , the Court rejected a challenge brought by U.S. citizens, the state of Hawaii, and other U.S.-based plaintiffs against a presidential proclamation that provided for the indefinite exclusion of broad categories of nonresident aliens from seven countries, subject to some waivers and exemptions. Five of the seven countries covered by the proclamation were Muslim-majority countries. The proclamation, like two earlier executive orders that imposed entry restrictions of a similar nature, became known colloquially as the "Travel Ban" or "Muslim Ban." As statutory authority for the proclamation, the President relied primarily upon INA Â§ 212(f). That statute grants the President power "to suspend the entry of all aliens or any class of aliens" whose entry he "finds . . . would be detrimental to the interests of the United States." In the proclamation, the President concluded that the entry of the specified categories of nationals from the seven countries would have been "detrimental" to the United States because, based on the results of a multiagency review, the countries did not adequately facilitate the vetting of their nationals for security threats or because conditions in the countries posed particular risks to national security. Thus, the stated purpose of the proclamation was to protect national security by excluding aliens who could not be properly vetted due to the practices of their governments or the conditions in their countries. The challengers contended, however, that the actual purpose of the proclamation was to exclude Muslims from the United States. They based this argument primarily upon extrinsic evidenceâthat is, evidence outside of the four corners of the proclamationâincluding statements that the President had made as a candidate calling for a "total and complete shutdown of Muslims entering the United States." The challengers argued that the proclamation was illegal on statutory and constitutional grounds. With respect to statute, the challengers contended that INA Â§ 212(f) conferred upon the President only a "residual power to temporarily halt the entry of a discrete group of aliens engaged in harmful conduct" and therefore did not authorize the proclamation's indefinite exclusion of nationals of seven countries. The challengers also made other statutory arguments, including that the proclamation did not make sufficient findings that the entry of the excluded aliens would be "detrimental to the interests of the United States," as the language of Â§ 212(f) requires. With respect to the constitutional ground, the challengers argued that the proclamation violated the Establishment Clause because, based on the extrinsic evidence, the President issued the proclamation for the actual purpose of excluding Muslims from the United States. As such, according to plaintiffs, the proclamation ran afoul of the "clearest command" of the Establishment Clause: "that one religious denomination cannot be officially preferred over another." A five-Justice majority of the Supreme Court rejected all of these challenges in an opinion by Chief Justice Roberts that generally reaffirmed the unique breadth of the political branches' power to admit or exclude aliens. On the statutory claims, the Court declined to decide whether the doctrine of consular nonreviewability barred judicial review of the U.S. plaintiffs' arguments that the proclamation violated Â§ 212(f) and other provisions of the INA. The Court instead held that the proclamation did not violate the INA because Â§ 212(f) "exudes deference to the President" and grants him "'ample power' to impose entry restrictions in addition to those elsewhere enumerated in the INA," even restrictions as broad as those in the proclamation. The Court also reasoned that the "deference traditionally accorded the President" in national security and immigration matters means that courts must not conduct a "searching inquiry" into the basis of the President's determination under Â§ 212(f) that the entry of certain aliens would be "detrimental to the interests of the United States." The Court suggested that such a presidential determination might not be subject to judicial review at allâcalling the premise for such review "questionable"âbut ultimately held that, "even assuming some form of review [was] appropriate," the findings in the proclamation about the results of the multiagency review of vetting practices satisfied Â§ 212(f)'s requirements. In short, although the Court reviewed the statutory claims against the proclamation, it rejected those claims by holding that Congress has delegated extraordinary power to the President to exclude aliens and that the President's decisions to employ this power warrant deference. On the constitutional issue, the Court reiterated the holdings in Mandel and Fiallo that matters concerning the admission or exclusion of aliens are "'largely immune from judicial control'" and are subject only to "highly constrained" judicial inquiry when exclusion "allegedly burdens the constitutional rights of a U.S. citizen." Interestingly, however, the Court did not decide whether the limitations on the scope of this inquiry barred consideration of extrinsic evidence of the proclamation's purpose. Much of the litigation in the lower courts had turned on this issue. A majority of judges on the U.S. Court of Appeals for the Fourth Circuit, citing Justice Kennedy's concurrence in Din , had relied on the campaign statements and other extrinsic evidence of anti-Muslim animus to hold that the proclamation likely violated the First Amendment. Dissenting Fourth Circuit judges had reasoned that Mandel and the other exclusion cases prohibited consideration of the extrinsic evidence. The Supreme Court, instead of resolving this disagreement, assumed without deciding that consideration of the extrinsic evidence was appropriate in connection with a rational basis inquiry: AÂ conventional application ofÂ . . . [the] facially legitimate and bona fide [test] would put an end to our review. But the Government has suggested that it may be appropriate here for the inquiry to extend beyond the facial neutrality of the order. For our purposes today, we assume that we may look behind the face of the Proclamation to the extent of applying rational basis review. That standard of review considers whether the entry policy is plausibly related to the Government's stated objective to protect the country and improveÂ vetting processes. As a result, we may consider plaintiffs' extrinsic evidence, but will uphold the policy so long as it can reasonably be understood to result from a justification independent of unconstitutional grounds. In other words, the Court concluded that, even if plaintiffs' evidence of anti-Muslim animus warranted expansion of the scope of judicial review beyond the four corners of the proclamation itself, the appropriate inquiry remained extremely limited: whether the proclamation was rationally related to the national security concerns it articulated. And that rational basis inquiry, the Court explained, is one that the government "hardly ever" loses unless the laws at issue lack any purpose other than a "'bare . . . desire to harm a politically unpopular group.'" Applying this forgiving standard, the Court held that the proclamation satisfied it mainly because agency findings about deficient information-sharing by the governments of the seven covered countries established a "legitimate grounding in national security concerns, quite apart from any religious hostility." In the principal dissent, Justice Sotomayor argued that the majority failed to provide "explanation or precedential support" for limiting its analysis to rational basis review after deciding to go beyond the "facially legitimate and bona fide reason" inquiry. In Justice Sotomayor's view, the Court's Establishment Clause jurisprudence required the Court to strike down the proclamation because a "reasonable observer" familiar with the evidence would have concluded that the proclamation sought to exclude Muslims. She also reasoned that, even if rational basis review were the correct standard, the proclamation failed to satisfy it because the President's statements were "overwhelming . . . evidence of anti-Muslim animus" that made it impossible to conclude that the proclamation had a legitimate basis in national security concerns. Finally, Justice Sotomayor criticized the majority for, in her view, tolerating invidious religious discrimination "in the name of a superficial claim of national security." She compared the majority decision to Korematsu v. United States , a case that upheld as constitutional the compulsory internment of all persons of Japanese ancestry in the United States (including U.S. citizens) in concentration camps during World War II. (The majority responded that unlike the exclusion order in Korematsu the proclamation did not engage in express, invidious discrimination against U.S. citizens and that, as such, " Korematsu has nothing to do with this case." The majority also took the occasion to overrule Korematsu âwhich had long been considered bad law but which the Supreme Court had never expressly overruledâcalling it "gravely wrong the day it was decided." ) In conclusion, Trump v. Hawaii leaves some questions unresolved about how the Mandel test works in practice, but Trump v. Hawaii leaves no uncertainty on one point: Mandel and its progeny permit courts to conduct only a vanishingly limited review of executive decisions to exclude aliens abroad. The Court did not decide whether U.S. citizens may challenge exclusion decisions on statutory grounds or whether, and in what circumstances, courts may consider extrinsic evidence of the government's purpose for an exclusion decision or policy. Yet the majority opinion reaffirms that the standard of review that applies to constitutional claims brought by U.S. citizens against the exclusion of aliens abroad is a "highly constrained" one that favors the government heavily, even when extrinsic evidence suggests that the Executive may have acted for an unconstitutional purpose. Implications of Supreme Court Jurisprudence for the Scope of Congressional Power The Mandel line of cases embraces the broad view of congressional power over the admission and exclusion of aliens that the Supreme Court established in Knauff and earlier precedent, although the cases do leave some uncertainty about the outer edges of the congressional power. Mandel and Din appeared to take the absoluteness of Congress's exclusion power as a given. In Din , Justice Kennedy grounded his conclusionâthat a visa denial withstands constitutional attack so long as the government ties the exclusion to a statutory provisionâon the premise that Congress can impose whatever limitations it sees fit on alien entry. In other words, because Congress's limitations are valid per se , executive enforcement of those limitations is also valid. Mandel makes the same point, albeit mainly through omission. Recall that the case concerned application of an INA provision that rendered the Belgian academic ineligible for a visa because he held communist political beliefs. The Court acknowledged that the statute triggered First Amendment concerns by limiting, based on political belief, U.S. citizens' audience with foreign nationals. But the Court did not assess whether the statute violated the First Amendment. Rather, the Court accepted without significant analysis that Congress had the power to impose such an idea-based entry limitation. As a result, the Mandel decision considered only the First Amendment implications of the Attorney General's refusal to waive Mandel's communism-based ineligibility, not the statutory premise of the ineligibility. The untested assumption underlying Mandel and Din âthat Congress's immigration power encompasses the power to exclude based on any criteria whatsoever, including political beliefâraises a fundamental question about the nature of the plenary power. Often, the Supreme Court has described the power as one that triggers judicial deference , meaning that courts may conduct only a limited inquiry when considering the constitutionality of an exercise of the immigration power. But the plenary power doctrine, as some scholars have noted, can be understood another way, one that perhaps makes more sense of Mandel : the "plenary" refers to the scope of the power itself, in substance, and not to its immunity from judicial review. The congressional power to admit or exclude aliens is so complete, this theory goes, as to override the constitutional limitations that typically constrain legislative action. For example, the power overrides the First Amendment principles that would invalidate legislation that expressly provides for unfavorable treatment based on political belief in almost any other context. Aspects of Fiallo , however, arguably do not support this concept of a substantively limitless congressional power to regulate alien entry. Unlike Mandel and Din , which examined the Executive's application and implementation of authority delegated by statute, Fiallo squarely considered the constitutionality of a statute itself. And while Fiallo 's outcome (upholding an immigration law that discriminated by gender and legitimacy) aligns with the concept of an unbridled legislative power, the Court's reasoning wavered between statements suggesting that the legislative power might have limits and statements describing the power as absolute. The lack of clarity in the opinion seemed to stem from the awkwardness of applying Mandel âwhich fashioned a rule for review of executive action (the "facially legitimate and bona fide" test)âin a case reviewing legislative action. Ultimately, the Fiallo Court cited the Mandel test as an analogue but did not actually apply the test. Rather, the Court upheld the statute at issue under something that looked like a version of rational basis review, one in which a hypothetical justification suffices to sustain the statute. While extremely deferential, this version of rational basis review implies an underlying constitutional limitation against legislative unreasonableness, at least in theory. In other words, an even-handed reading of Fiallo suggests that statutes regulating the admission of aliens must at least be reasonable. Some scholars have argued that Fiallo was incorrectly decided and that stricter constitutional scrutiny should apply to admission and exclusion laws that classify aliens by factors such as race, religion, and gender. To date, this argument does not find support in Supreme Court precedent, particularly not after the Court relied on Fiallo in Trump v. Hawaii to describe the breadth of the political branches' exclusion power. To be sure, the Supreme Court has made clear that Congress cannot deny certain rights to aliens subject to criminal or deportation proceedings within the United States, and that the federal government cannot deny some procedural protections to LPRs returning from brief trips from abroad. But the Court has never suggested that laws regulating the admission of non-LPR aliens trigger anything more than the deferential rational basis review that it applied to the gender-based immigration preferences statute at issue in Fiallo . In other words, the Court has never called Fiallo into question. In one recent case, Sessions v. Morales-Santana , the Supreme Court applied heightened constitutional scrutiny to strike down a derivative citizenship statute that, much like the statute in Fiallo , used gender classifications. However, the Morales-Santana Court distinguished Fiallo and the plenary power doctrine by noting that the statute before it concerned citizenship, not immigration. Accordingly, Morales-Santana does not appear to portend imminent reconsideration of Fiallo . The term after Morales-Santana , the Court applied rational basis review in Trump v. Hawaii to an executive exclusion policy that was based on a statutory delegation of authority, suggesting that nothing more than rational basis review could apply to an exclusion statute itself. To summarize, dicta in two of the exclusion cases that decided challenges to executive action, Mandel and Din , give the impression of a substantively absolute congressional power to control the entry of aliens. But courts have generally interpreted Fiallo , which concerned a direct challenge to a law regulating alien admission and exclusion, to mean that such laws must at least survive a review for reasonableness. To date, the Supreme Court has not heeded calls by some scholars and litigants for more exacting review of laws regulating alien entry. Implications of Supreme Court Jurisprudence for the Scope of Executive Power Mandel , Din , and Trump v. Hawaii trace the contours of the Executive's exclusion power. As described above, Mandel 's "facially legitimate and bona fide reason" test governs claims that an exclusion decision or policy violates a U.S. citizen's constitutional rights. The Executive satisfies the test by identifying the statutory basis for the exclusion. Where the U.S. citizen challenger proffers extrinsic evidence that the Executive acted with an unconstitutional purpose, it might be proper for a reviewing court to consider that evidence, but only as part of a rational basis inquiry under which the exclusion decision or policy must be upheld if "it can reasonably be understood to result from a justification independent of unconstitutional grounds." However, the cases do not resolve definitively at least three issues about the executive power. These issues, discussed below, are (1) whether the Executive possesses inherent exclusion power, as opposed to solely statutory-based power; (2) the extent to which U.S. persons or entities may challenge an alien's exclusion on statutory grounds; and (3) the extent to which the Constitution limits the Executive's application of broad delegations of congressional power to make exclusion determinations. Source of Executive Power The Supreme Court's exclusion cases generally indicate that the authority to exclude aliens reaches the Executive through congressional delegation. The cases generally assign the constitutional power to regulate immigration to Congress and imply that an executive exclusion decision or policy must have a basis in statute. Mandel , Din , and Trump v. Hawaii illustrate this implied point: even though all three cases considered the constitutionality of executive action, the Court focused its analysis in each case on a statutory source of authority for the executive action. For instance, in Trump v. Hawaii , the Court analyzed whether the "Travel Ban" order fit within the President's authority under INA Â§ 212(f) to "suspend the entry of all aliens or any class of aliens." Trump v. Hawaii and the Court's other exclusion cases proceed on the assumption that executive action to exclude aliens requires statutory authorization. An opposing view held by at least one current Supreme Court Justice posits that the Executive has " inherent authority to exclude aliens from the country." Under this view, Congress does not have authority to constrain executive exclusion decisions. This view arguably finds some support in Supreme Court immigration jurisprudence. Many of the cases, for example, do not distinguish between Congress and the Executive when discussing the constitutional power to regulate immigration, suggesting that the two branches could share the power. Furthermore, at least one pre- Mandel Supreme Court decision states expressly that the Executive possesses inherent authority to exclude aliens. The case makes this statement, however, only to rebuff a challenge to the constitutionality of congressional delegations of immigration authority to executive agencies. In other words, the case states that the Executive has inherent exclusion authority only to explain why Congress may delegate exclusion authority to the Executive, not to establish that the Executive may exclude aliens absent statutory authority. The case goes on to acknowledge that, notwithstanding any inherent executive authority, in immigration matters the Executive typically acts upon congressional direction. The text of the Constitution itself does not resolve whether the Executive has a constitutional power to exclude aliens that is independent of statutory authorization. Because the federal government's immigration power rests at least in part upon an "inherent power as a sovereign" not enumerated in the Constitution, courts cannot determine who owns the power by reading Article I or Article II. Neither does Supreme Court precedent resolve the issue definitively. In one 1915 case, Gegiow v. Uhl , the Court held that an executive exclusion decision violated the governing statute. That holding implies that legislative restrictions on such decisions are constitutionally valid. But that brief decision did not discuss the concept of inherent executive authority over immigration, and more recent exclusion cases have not decided the issue because they have resolved statutory challenges by holding that the executive action at issue complied with the relevant statutes. On balance, the weight of authority favors the view that the power to exclude aliens belongs primarily to Congress, at least in the first instance. The idea that the Executive could exclude aliens in contravention of a statuteâor, to a lesser extent, without statutory authorizationâwould challenge separation of powers principles and does not find support even in the one Supreme Court opinion that expressly endorses the concept of an inherent executive immigration power. The idea of an extra-statutory executive exclusion power would also undermine basic features of the Court's exclusion jurisprudence, such as the long-standing rule that a court reviewing the exclusion of an arriving alien in habeas corpus proceedings must ascertain whether immigration officers had statutory authorization to make the exclusion determination. The point remains, however, that the Court has not established clearly that the Executive may not exclude aliens in contravention of a statute or without statutory authorization. This lack of definitive precedent on the issue may result from Congress's extremely broad delegation of exclusion authority to the Executive, most notably in INA Â§ 212(f), and from the limited judicial review available for executive enforcement of exclusion statutes. Finally, a specific aside about the field of diplomacy: because the Reception Clause of the Constitution grants the President the exclusive power to "receive Ambassadors and other public Ministers," it seems more than plausible that a President could override a statute at least when making decisions about the admission or exclusion of foreign diplomats. Statutory Challenges to Executive Decisions to Exclude Aliens Because executive exclusion power appears to derive primarily from statute, executive exclusion decisions or policies are susceptible in theory to attack on the ground that they violate the governing statutes. In Trump v. Hawaii , for instance, the Supreme Court analyzed and rejected arguments that the "Travel Ban" exclusion policy violated provisions of the INA. But the Court declined to resolve a threshold question about such challenges: whether they are barred by the doctrine of consular nonreviewability, which, as discussed above, forms part of the general rule against judicial review of exclusion decisions. Specifically, consular nonreviewability prohibits judicial review of a visa denial unless the denial burdens the constitutional rights of a U.S. citizen, in which case the deferential standard of review under the Mandel line of cases applies to the constitutional claim. The Mandel Court, in recognizing for the first time that U.S. citizens could challenge exclusion decisions despite the bar against such suits when brought by aliens, spoke narrowly of constitutional claims by U.S. citizens. Trump v. Hawaii reasoned that the statutory claims at issue there failed on the merits even if they were subject to judicial review, and the Court therefore declined to answer whether the Mandel exception also encompasses statutory claims brought by U.S. citizens against the exclusion of aliens abroad. At least two federal circuit courts have held that the doctrine of consular nonreviewability bars U.S. citizen challenges to visa denials on statutory grounds, at least when the citizen does not also state constitutional claims. These courts reasoned that permitting review of purely statutory claims would "convert[] consular nonreviewability into consular reviewability" and "eclipse the Mandel exception" by subjecting statutory claims to a more exacting level of review under the APA than constitutional claims receive under the "highly constrained" review that applies under the Mandel line of cases. On the other hand, in two other cases involving a combination of statutory and constitutional claims brought by U.S. citizens against visa denials, courts in the First Circuit and D.C. Circuit reviewed the statutory claims and rejected or called into question the visa denials on statutory grounds. One of these decisions concluded that the statutory claims were reviewable because, among other rationales, the canon of constitutional avoidance required the court to construe the relevant statutes before considering whether the Executive's application of the statutes violated the Constitution. In both cases, the courts analyzed the statutory claims without deferring to the government's determination that the INA required the denial of the visa applications at issue. As a result, the cases scrutinized the government's justifications for excluding aliens much more closely than the Supreme Court analyzed the constitutional claims in Trump v. Hawaii , Mandel , and Din . It was the Ninth Circuit's disagreement with this framework endorsed by the First and D.C. Circuitsâthat statutory challenges to visa denials should draw stricter review than constitutional challengesâthat led it, among other reasons, to hold in a pure statutory case that consular nonreviewability bars statutory claims. The Supreme Court has on at least two occasions rejected statutory challenges brought by U.S. citizens or organizations against the exclusion of aliens abroad without deciding whether such challenges are subject to judicial review. As already mentioned, in Trump v. Hawaii , the Court acknowledged but did not decide the reviewability question in a case that involved a combination of statutory and constitutional claims brought by U.S. citizens and other U.S. parties. In the 1993 case Sale v. Haitian Centers Council , the Court considered and ultimately rejected statutory challenges to the U.S. Coast Guard's interdiction and forced return of Haitian migrants trying to reach the United States by sea. Specifically, the Court analyzed and rejected the argument that the interdictions violated an INA provision requiring immigration authorities to determine whether aliens would suffer persecution in a particular country before returning them to that country. The Sale Court did not address the consular nonreviewability issue, even though the government argued it, but instead seemed to assume without discussion that the statutory challenges to the interdictions and forced returns were reviewable. The only clear holding about consular nonreviewability that arises from Hawaii and Sale is that the doctrine does not deprive federal courts of subject matter jurisdiction over statutory challenges brought by U.S. citizens against the exclusion of aliens abroad, even though the doctrine might supply a rule of decision requiring courts to reject such statutory challenges without reviewing their merits. In summary, federal appellate courts have held that the doctrine of consular nonreviewability bars exclusively statutory challenges brought by U.S. citizens against the executive branch decisions to exclude aliens abroad, but not where the citizens also press constitutional challenges. The Supreme Court has not resolved the issue, but the Court reviewed statutory challenges that were combined with constitutional challenges in Trump v. Hawaii and reviewed exclusively statutory challenges in Sale . Exclusions Based on Broad Delegations of Congressional Power Justice Kennedy concluded in Din that the plenary nature of Congress's power to exclude aliens means that an executive exclusion decision for a statutory reason is facially legitimate and bona fide. But what about where Congress transfers its exclusion power to the Executive with few limiting criteria? What constitutional restrictions does the Executive face in that scenario? Trump v. Hawaii indicates that the Executive, at least in theory, must comply with constitutional guarantees when exercising power delegated from Congress to create exclusion policies. Even though the Court in that case engaged in only a "highly constrained" level of judicial review, it stated that the purpose of the review was to determine whether the challenged exclusion policy could "reasonably be understood to result from a justification independent of unconstitutional grounds." Presumably, if the Court had concluded that the "Travel Ban" proclamation was "'inexplicable by anything other than [anti-Muslim] animus,'" it would have struck down the proclamation for violating the Establishment Clause. Although the proposition that constitutional guarantees restrict executive exercises of exclusion authority may seem unremarkable, the Court actually avoided deciding this issue in Mandel . The relevant statute in that case gave the Attorney General broad discretion to waive the communism-based ground for exclusion. The parties and the Court assumed that Congress had the authority to exclude communists based on their political ideas. The executive branch argued that it, too, could exercise congressionally delegated exclusion authority to deny entry based on political belief or for "any reason or no reason." The Mandel Court, in adopting the "facially legitimate and bona fide" standard, avoided addressing this contention. The Court reasoned that it did not have to decide whether the government could deny an inadmissibility waiver for "any reason or no reason" because the government had in fact supplied a reason for denying Mandel's waiverâhis alleged prior visa abuseâ"and that reason was facially legitimate and bona fide." Thus, Mandel left open the possibility that the First Amendment could limit the executive branch's, but not Congress's, power to exclude based on political belief, but the Court did not decide the issue. After Trump v. Hawaii , however, it seems relatively clear that executive exclusion policies must find support in justifications that are "independent of unconstitutional grounds," even though courts will apply only a "narrow standard of review" to assess those justifications. In other words, constitutional guarantees might not restrict Congress's exercise of the exclusion power, but they apparently do restrict the Executive's exercise of exclusion power delegated to it by Congress. Conclusion The Supreme Court has consistently reaffirmed that legislative and executive decisions to exclude aliens abroad are "'largely immune from judicial control.'" The doctrine of consular nonreviewability bars judicial review of decisions to exclude aliens abroad in most circumstances. And even where such decisions burden the constitutional rights of U.S. citizens, the Mandel line of cases stands for the proposition that federal courts must grant the decisions a level of deference so substantial that it mostly assures government victory over any challenges. Notably, however, Supreme Court precedent mainly describes the deference due to executive exclusion decisions as an issue within Congress's control. The doctrine of consular nonreviewability and the Mandel line of cases take their cue from legislative inaction: because Congress has not said that courts may review executive decisions to exclude aliens abroad, courts mostly do not conduct such review or (where constitutional claims of U.S. citizens are at stake) conduct only an extremely limited form of review. Ultimately, the cases indicate that Congress has authority to expand review through affirmative legislation.	Summary:	gov_report	1,024	null	9
crs_R46196	crs_R46196_0	You are given a report by a government agency. Write a one-page summary of the report. Report: How Does Solar Energy Work?1 The energy in sunlight can be converted into electricity in either of two ways: by using solar photovoltaic cells or by concentrating solar energy to produce heat for electricity generation. Solar energy can also be used to heat water for direct use, but this report focuses only on electricity generation applications. Solar Photovoltaic (PV) Sunlight can interact with certain materials to directly produce electricity in a process known as the photovoltaic (PV) effect. Silicon (more specifically, crystalline-silicon, or c-Si) is the most commonly used material today, but other materials (e.g., cadmium telluride) also can be used. Research is ongoing into alternative materials and designs that might be more efficient or less expensive than c-Si. To construct a PV cell to generate electricity, PV material is manufactured into ingots, which are then cut into wafers ( Figure 1 ). Wafers are typically 15 centimeters (cm) wide along each side and around one-hundredth of a centimeter thick, although exact dimensions may vary by manufacturing process. Wafers are processed into cells, which are then assembled into modules, also called panels. A module typically consists of 60 to 72 cells mounted on a plastic backing within a frame. Modules are typically installed in groups, known as arrays, with the number of modules in the array depending upon the available space and the desired generation capacity of the project. A PV system includes modules and a variety of structural and electronic components, known as balance of system (BOS) equipment, to tie the system together. Structural BOS equipment includes brackets, on which the modules are mounted. For ground-mounted systems, these brackets can be either fixed or able to rotate during the day to face the sun. Mounting systems that can rotate are known as tracking systems. Modules mounted on tracking systems tend to generate more electricity than modules on fixed-mount systems, all else being equal, because the tracking systems can optimize the amount of sunlight hitting the module over the course of a day. One key piece of BOS equipment is an inverter, an electronic device that converts the electricity generated by PV modules into a form that is usable in the U.S. electric system. Other electronic BOS equipment includes charge controllers, circuit breakers, meters, and switch gear. Some PV systems also include integrated energy storage systems such as batteries. PV systems can be divided into three categories, based primarily on capacity. Utility- scale systems (i.e., solar farms) may range in capacity from a few megawatts (MW) to a few hundred MW. They are typically owned and operated like other central power plants. Utility-scale projects are typically connected to the electricity transmission system, the network of high-voltage lines that move electricity over long distances. Commercial-scale systems typically range in capacity from a few kilowatts (kW; 1,000 kW = 1 MW) to a few hundred kW. They may be installed on the ground or on rooftops, and are typically owned or hosted by commercial, industrial, or institutional entities. Some may be connected to the transmission system, and some may be connected to the electricity distribution system, the network of low-voltage lines that deliver electricity directly to most consumers. Residential -scale systems typically have generation capacity of a few kW. Most residential-scale projects are installed on rooftops and connected to the distribution system. Another way to categorize PV systems is by ownership model. Systems connected to the transmission system (typically utility-scale) are generally owned by utilities or independent power producers, as is the case for other central power plants. Smaller systems may use other ownership models, depending on what applicable state laws allow. Customer-owned systems are owned directly by the electricity consumer benefiting from the system. The consumer might buy the system outright or finance it in the same way as for other property improvements (e.g., loan). Third-party ownership (i.e., solar leasing) is an ownership model in which an electric consumer, such as a homeowner, allows a company to build a solar system on the consumer's property. The company owns and maintains the solar system while the consumer uses the electricity produced by the system. The consumer pays back the cost of the system to the company through either lease payments or a power purchase agreement. Community solar (i.e., solar gardens) is an ownership model in which multiple electricity consumers may purchase or lease shares of a solar system through a subscription. Subscribers can benefit from the project by receiving electricity, financial payments, or both. Community solar systems are usually not installed on a subscriber's property, and the systems may be owned by a utility or another type of entity. Concentrating Solar Power Concentrating solar power (CSP) technologies collect and concentrate energy from sunlight to heat certain fluids (liquids or gases). CSP plants use these heated fluids to produce electricity, either by creating steam to drive a steam turbine or by directly running a generator. CSP plants can be designed with thermal energy storage systems. At least one CSP plant with storage operating in the United States is capable of generating electricity 24 hours a day. How Much Electricity Comes From Solar Energy?11 Electricity generation from solar energy has grown in recent years, as shown in Figure 2 . Solar energy overall (PV and CSP combined) accounted for 0.7% of total U.S. electricity generation in 2014 and 2.2% of the total in 2018, according to data from the U.S. Energy Information Administration (EIA). Most generation (96% in 2018) from solar energy comes from PV systems. Large-scale systems, defined by EIA as those greater than 1 MW, accounted for 61% of overall generation from solar energy in 2014, the first year for which EIA reported generation data for different size categories. By 2018, the share from large-scale systems had increased to 68%. How Much Does a Solar PV System Cost?13 Costs for solar PV systems vary by size, as shown in Figure 3 . The figure shows an estimate of average U.S. solar PV system costs per unit of capacity, as of the first quarter of 2018 (Q1 2018), based on an analysis by the Department of Energy's National Renewable Energy Laboratory (NREL). Costs for any individual project could differ based on project-specific circumstances. Two general findings from NREL's analysis are supported by numerous other studies, namely that larger projects tend to be cheaper on a per-unit basis, and that costs for projects of all sizes have declined in recent years. Utility-scale systems have the lowest unit costs, ranging from an average of $1.06 per watt of direct current (hereinafter, W) to $1.13/W in 2018, depending on whether projects were mounted on fixed brackets or tracking systems, respectively. Commercial-scale systems cost $1.83/W on average in Q1 2018, and residential-scale systems cost $2.70/W on average. The total system cost differences shown in Figure 3 are driven primarily by higher "soft costs." These costs include, for example, costs associated with permitting, interconnecting with the grid, and installer overhead costs. The soft costs are much higher for smaller-scale systems, per watt, than for utility-scale systems. PV system costs have declined, as shown by data from the NREL analysis shown in Figure 4 . NREL reported costs from 2010 to Q1 2018. NREL credits cost declines over this time period to cost declines in all system components (i.e., modules, inverters, BOS equipment, labor, and other soft costs). PV module costs increased between 2017 and 2018 as a result of tariffs discussed in the section " How Are U.S. Tariffs Affecting Domestic Solar Manufacturing? ," offsetting cost declines in other system components, according to the NREL report. How Does Solar Energy Impact Electricity Costs for Consumers?16 Generalizing the cost impacts to consumers for solar systems is challenging because costs for these systems vary across the United States. Additionally, solar system costs are declining in both absolute terms (as discussed in the previous section) and relative to other sources of electric power. In parts of the country, new solar systems are sometimes among the least cost-options for generating electricity. This was not generally the case a few years ago. Policies aimed at promoting solar energy make an assessment of costs more complex. For example, tax incentives, as discussed in the section " What Federal Tax Incentives Support Solar Energy Development? ," can reduce the ownership costs for businesses or individuals that purchase solar energy systems. Some of those costs are then transferred to taxpayers. The following discussion focuses on electricity costs only from a consumer's point of view. Consumers' electricity costs can be measured in two ways. The first way is the electricity rate, typically expressed in cents per kilowatt-hour (cents/kWh). The second way is the electricity bill, typically the total costs for electricity that consumers pay each month expressed in dollars. In most cases, an electricity bill reflects the costs to produce electricity (typically, the applicable electricity rate times the amount of electricity consumed), the costs to deliver electricity to the consumer, and any other fees as determined by state or local regulators (e.g., contributions to funds that provide bill relief to low-income households). Electricity rates can go down while bills go up, and vice versa. Multiple factors can determine how solar energy might affect what consumers pay for electricity. Many of these factors vary based on local circumstances. They can also change over time as the profile of electricity sources changes. Comparing Electricity Costs One way to compare electricity costs is by estimating the lifetime costs of energy systems. Lifetime costs include the initial construction and installation cost plus operation and maintenance (O&M) costs, fuel costs, and other costs. Electricity rates are strongly influenced by total lifetime costs for all the electricity generators serving a given area. Lifetime costs for solar energy have historically been higher than for many other sources, but that is changing in many parts of the United States. For example, one commonly used measure of lifetime costs is the levelized cost of electricity (LCOE), usually expressed in dollars per megawatt-hour of generation ($/MWh) and averaged over the lifetime of a project. LCOE estimates attempt "apples-to-apples" comparisons among technologies because the estimates account for how much electricity a given power plant is expected to produce over its lifetime. According to widely cited estimates from one consulting firm, 2019 LCOE for new utility-scale solar systems ranged from $32/MWh to $42/MWh. By comparison, LCOE for new wind generation was $28/MWh-$54/MWh and for natural gas combined cycle generation was $44/MWh-$68/MWh. Another factor in consumers' bills is the extent to which electricity from solar energy displaces electricity generation from existing sources. If existing power plants are called upon to produce less electricity than planned when they were first built due to the availability of power from less expensive sources, the owners still need to pay the construction cost of their unneeded capacity. Such costs are known as stranded costs. Depending on each state's regulatory framework, stranded costs might be borne by power plant owners or be passed through to consumers in electric bills. To the extent that solar systems require new transmission lines to deliver electricity to consumers, the cost of building those lines may result in higher electricity bills. Utility-scale solar, which is frequently located in rural areas distant from consumers, may have higher associated cost impacts on bills than, for example, residential-scale solar, depending upon project details. On the other hand, installation of solar systems can sometimes avoid upgrades to transmission systems, resulting in potentially lower costs for consumers. In other cases, though, solar systems necessitate upgrades to local distribution systems, which might increase costs for customers. In states with carbon pricing policies in place, increased solar energy deployment could reduce the bill impacts associated with the carbon price. Generating solar energy has approximately zero marginal cost. Marginal costs reflect the variable costs of producing incremental amounts of electricity from an existing source. Marginal costs are typically dominated by fuel costs, which are not relevant for solar energy. When solar energy is present in an area, fewer fuel-consuming electricity sources are required, which tends to drive down marginal costs for the regional electricity system overall. This effect may diminish as the number of solar electricity generators increases in an area, because nearby solar PV systems tend to maximize their electricity production at the same time (usually midday). If all of the midday electricity demand were to be met by solar PV, there would no incremental cost benefit to adding more solar PV systems to the region. The rate and bill impacts discussed above would apply to all electricity consumers within a region in which solar energy development is taking place. Consumers that install rooftop solar systems or participate in community solar projects ("solar customers") could have different bill impacts. Most states allow solar customers to be financially compensated for the electricity generated by the projects they host. The most common type of policy for this compensation is net metering, though some states have established net metering alternatives. Depending on a consumer's electricity demand and the size of the solar energy project, solar consumers participating in net metering or related policies could reduce their electricity bills to zero. Is Solar Energy Reliable?22 One potential reliability concern for solar energy is due to its variable nature, dependent on the availability of sunlight. For example, solar PV systems cannot produce electricity at night, and their output can vary during the day depending on local weather conditions (e.g., cloudiness). The physical requirements of the electricity system are such that the supply and demand of electricity must equal each other at all times. Currently, to ensure reliability, other sources of electricity generation are used when solar energy is not available. Expanding other types of electricity system infrastructure, such as transmission lines or energy storage assets, could also address this limitation. Alternatively, policies and regulatory frameworks that incent greater electricity consumption during daytime hours and less at night (i.e., load shifting) could reduce the reliability impact of solar energy's variability. Another potential reliability concern for solar energy arises from the mismatch between the hours of the day when generation from solar energy peaks (typically midday) and when electricity demand peaks (typically several hours later). To maintain reliability, some sources of electricity have to quickly increase their output to account for the simultaneous drop-off in output from solar generators and increase in demand. As more solar systems are installed, the need for other sources that can quickly change output levels typically increases. This situation is often referred to as the "duck curve" because the shape of the plot showing the difference between demand and output from solar generators resembles a duck. Not all electricity generators are capable of quickly changing their output, and their deployment may not match the levels of deployment of solar generators. Load shifting, operational changes to non-solar sources, and deployment of more flexible resources (e.g., energy storage) are all possible ways to address the duck curve. Some analysis suggests that electric vehicle deployment might also act as a form of load shifting and address the duck curve, at least if vehicle charging occurs when output from solar sources is high. A third potential reliability concern comes from the fact that solar PV produces direct current (DC) electricity. Conventional generators produce alternating current (AC) electricity, and the grid is optimized for AC. An inverter is an electrical device that converts DC to AC; grid-connected solar PV systems require an inverter. For this reason, solar is sometimes referred to as an "inverter-based resource." Generators that produce AC also inherently contribute to grid reliability by providing what are known as "essential reliability services" or "ancillary services." Most of these services arise from the way generators physically respond to changes in the balance of electricity supply and demand over fractions of seconds. Inverter-based resources do not inherently provide these services, although inverters can be designed (and are being deployed) to provide some of these services. The electric power industry and its federal and state regulators have been studying ways to protect system reliability from the unique nature of inverter-based resources since at least 2008. Additionally, Congress has funded a variety of research programs related to electric reliability. No widespread reliability issues due to solar appear to have occurred to date, though some local reliability issues have been reported. What Federal Tax Incentives Support Solar Energy Development?30 Various provisions in the Internal Revenue Code (IRC) support investment in solar energy equipment. These provisions reduce the after-tax cost of investing in solar property, thereby encouraging taxpayers to invest in more solar property than they would have absent tax incentives. Tax incentives for solar energy property were first enacted in 1978. Several incentives for solar are currently part of the tax code. Historically, the value of tax incentives for solar has fluctuated, although the current tax credit rates were established in 2005. Under current law, solar tax incentives are scheduled to phase down in the coming years from their 2019 rates. Tax Incentives for Businesses Investments in certain renewable energy property, including solar, qualify for an investment tax credit (ITC). The amount of the credit is determined as a percentage of the taxpayer's basis in eligible property (generally, the basis is the cost of acquiring or constructing eligible property). The credit rate for solar was 30% through 2019, 26% in 2020 and 22% in 2021. Solar energy has a permanent 10% ITC that is to go into effect in 2022. The expiration dates for the ITC are commence construction deadlines. For example, solar property that was under construction by the end of 2019 may qualify for the 30% tax credit, even if the property is not placed in service (or ready for use) until a later date. Special provisions in the tax code allow solar energy property to be depreciated over a shorter period of time than would normally be the case. Specifically, solar energy property is classified as five-year property in the Modified Accelerated Cost Recovery System (MACRS). The depreciable basis (the amount that is recovered through depreciation deductions over time) of solar energy property is reduced by 50% of any ITC claimed. Thus, if a 30% ITC was claimed on a $1 million investment in solar energy property, $850,000 would be depreciated under the schedule for five-year MACRS property. Accelerating depreciation reduces the after-tax cost of investing in solar energy property. Temporarily, through 2022, certain investments in solar energy property are eligible for 100% bonus depreciation. This eligibility means that for these investments, the expense can be deducted immediately (i.e., expensed). Bonus depreciation is scheduled to phase down after 2022. It is scheduled to decrease to 80% in 2023, 60% in 2024, 40% in 2025, and 20% in 2026, before being 0% in 2027. Bonus depreciation may be claimed for new as well as used property. Regulated public utilities cannot claim bonus depreciation. Tax-exempt organizations, such as electric cooperatives, also cannot claim bonus depreciation, and typically are limited in their ability to benefit from tax incentives more broadly. Tax Incentives for Individuals Individuals purchasing solar energy property may qualify for the residential energy-efficient property credit. Through 2019, the tax credit for individuals is 30% of the cost of solar electric property installed on the taxpayer's residence. The tax credit rate is scheduled to be 26% in 2020 and 22% in 2021, with the credit expiring after 2021. The tax credit is nonrefundable, meaning that the amount of the credit a taxpayer can claim in the tax year is limited to the taxpayer's income tax liability. However, unused tax credits can be carried forward to the following tax year. How Much Do Solar Tax Incentives Cost? Tax expenditure estimates are one source of information on the "cost" of solar tax incentives. Tax expenditures are, by definition, the amount of forgone revenue associated with special provisions in the tax code, such as tax credits and accelerated cost recovery. For FY2019, the Joint Committee on Taxation (JCT) estimates that the amount of forgone revenue associated with the business ITC for solar was $3.4 billion. The amount of forgone revenue associated with the residential energy-efficient property credit for FY2019 was an estimated $2.0 billion. This figure, however, includes all eligible technologies. While most of this was due to solar energy property, JCT does not estimate the forgone revenue associated with solar separate from other eligible technologies. The revenue loss for five-year MACRS for all eligible energy property (primarily wind and solar, but other technologies are eligible) is estimated at less than $50 million in FY2018. Because bonus depreciation is not a solar- or even energy-specific provision, a tax expenditure estimate for bonus depreciation for solar is not available. Internal Revenue Service (IRS) data also provide information on individual claims of tax credits for solar electric property. In 2017, individuals filed 381,242 tax returns that claimed the residential energy-efficient property credit for solar electric property. The total cost of solar electric property for which tax credits were claimed was $5.5 billion, generating approximately $1.6 billion in individual income tax credits. What State Policies Support Solar Energy Development?46 Per the Federal Power Act, states have jurisdiction over most aspects of electricity generation and distribution. Consequently, many policies that affect the development solar energy are implemented by states. This section discusses one common state policy, a renewable portfolio standard. Other state policies designed to accelerate the deployment of solar energy include net metering (mentioned in the section " How Does Solar Energy Impact Electricity Costs for Consumers? "), state tax credits, and allowing third-party ownership (i.e., solar leasing). Renewable portfolio standards (or, more broadly, electricity portfolio standards), as typically implemented, set requirements on utilities to procure a minimum share of their electricity sales from specified renewable sources such as solar. Many factors influence solar energy development, but renewable portfolio standards are widely credited as being a key factor historically, as they have provided a policy-driven source of demand for renewable electricity generation. Twenty-nine states, three U.S. territories, and the District of Columbia are implementing mandatory electricity portfolio standards, and an additional eight states and one territory have voluntary standards. Of these, nine jurisdictions have targets of 100% clean energy. Jurisdictions differ in their definitions of eligible clean energy sources, but solar is eligible in all cases. Nineteen of these policies include specific requirements or extra incentives for solar. How Are U.S. Tariffs Affecting Domestic Solar Manufacturing?52 The United States has applied tariffs on imports of solar energy equipment since 2012. The different types of equipment comprising a solar PV system are discussed in the section " How Does Solar Energy Work? " The Obama Administration imposed double- and triple-digit antidumping and countervailing duty tariffs on U.S. imports of solar cells and modules from China in 2012 and 2015 and on imports from Taiwan in 2015. The Trump Administration imposed a tariff, which started at 30% in 2018 and declines by 5% yearly until reaching 15% in 2021, on photovoltaic solar cells and modules from most countries. The tariff includes some exemptions, such as an annual 2.5 gigawatt (GW) tariff-free quota for solar cells as long as the final module assembly takes place in the United States. Several dozen developing countries are excluded from the tariff as long as their import levels stay small, and certain technologies, such as thin-film solar PV products or smaller crystalline silicon PV cells, are not subject to the tariff. This tariff is scheduled to expire in February 2022, but it may be extended, at the President's discretion, for up to four additional years. It is assessed on top of the previously existing tariffs on Chinese and Taiwanese producers, leading to tariff rates as high as 239% on some PV products made in China. In 2018, the Trump Administration placed a 25% duty on steel and a 10% duty on aluminum imported from most countries. These duties affect BOS equipment, such as PV brackets, module frames, cabling, power electronics housing, batteries, and wiring, and are projected to add 2% - 5% to PV system costs. Additional tariffs on a long list of Chinese products, including inverters and other solar equipment, were imposed at a 10% rate in September 2018. The rate was raised to 25% in May 2019. The tariff effects have not been felt evenly across the solar industry's manufacturing segments (i.e., polysilicon production, ingot and wafer production, solar cell production, and module assembly). To date the tariffs have not encouraged expansion of U.S. manufacturing in the more technologically advanced segment of the PV manufacturing supply chain, namely the production of crystalline-silicon solar cells. However, U.S. production of solar modules, into which cells are assembled, rose in 2018, and a few companies, including one Chinese manufacturer, have opened solar module assembly plants in the United States. The increased domestic production of modules draws on imported parts and components, reflecting the industry's global supply chain. U.S. solar tariffs have negatively affected the one segment of the PV supply chain in which the United States traditionally has been the most competitive, the production of polysilicon, the key raw material used in the manufacture of the vast majority of solar cells. China retaliated against the Obama Administration tariffs by imposing double-digit tariffs on polysilicon shipped from the United States to China, which had been a significant export market for U.S. producers. These tariffs have had an adverse effect on U.S. production of polysilicon, which shrank 40% between 2015 and 2018. The U.S. share of global polysilicon production is also down, falling to 11% of the global total in 2017 from 29% in 2010. The production of wafers made from polysilicon, which in turn are cut to make individual cells, has largely been discontinued in the United States, with China accounting for more than 80% of global wafer production in 2017. Solar cell production has significant economies of scale, so manufacturers generally centralize production in large plants. As shown in Figure 5 , annual domestic U.S. PV cell production shrank to 124 megawatts (MW) in 2018, the lowest level since 2010. Domestic manufacturers of PV modules import nearly all of their solar cells, which represent a substantial portion of the cost and value of a finished module (27% in Q4 2018, according to Wood Mackenzie, an energy consultancy). China accounted for more than two-thirds of the world's solar cell production in 2017. Despite the various trade actions in 2018, solar cell prices in the United States declined from 20 cents per watt at the beginning of that year to 10 cents per watt at year-end 2018, which represented a 50% decrease in cost. Meanwhile, figures from the United States International Trade Commission (ITC) show U.S. imports of solar cells more than doubled by value from 2016 to 2018. This trend continued despite the additional tariffs on solar cells and modules that took effect in 2018, with U.S. imports of solar cells rising 32% during the first seven months of 2019 compared to the same period in 2018. One possible reason for the rise in cell imports is that the Trump Administration's solar tariff allows up to 2.5 GW of unassembled solar cells to be imported into the United States duty-free each year the tariff is in effect. These can then be assembled into solar modules in the United States. From February 2018 to the end of 2018, about a quarter, or 650 MW, of the duty-free tariff rate quota was filled. The low fill rate during the first year may be because there was not enough module assembly capacity in the United States to use those cells, and because some PV cells were stockpiled prior to the imposition of the tariff. If the 2.5 GW quota is reached in any year, foreign-made cells will be subject to U.S. tariffs for the balance of that year. The uncertainty surrounding the tariffs limits the incentive to expand solar cell production in the United States. For example, the Trump Administration's solar tariff is initially set to last four years, with the tariff rate declining by five percentage points in each year the tariff is in effect. The other tariffs may be discontinued at the President's discretion. A new cell factory would need a large capital investment and about two years to construct. The possibility that some or all of the tariffs will be eliminated in the near future may discourage creation of new manufacturing capacity. At present, Panasonic is the only major domestic producer of crystalline-silicon solar cells, and several producers of solar cells have closed U.S. plants since 2012. Unlike cell production, domestic module assembly is growing. A count by the Solar Foundation, a trade group, indicates that approximately 20 factories assembled PV modules in the United States in 2018. Annual U.S. PV module production increased to 1.4 GW in 2018, up from 970 MW in 2017, but down from a record high of 1.7 GW in 2016, the year the federal investment tax credit had been set to expire (see Figure 5 ). It typically takes about six months to construct a new solar-module assembly facility and begin operation at scale. PV Magazine , an industry publication, reported that 3.9 GW of new module manufacturing capacity was under construction or had recently come online as of late 2018. Hanwha Q Cells, a South Korean company, and Jinko Solar, a Chinese company (the largest module producer in the world), have opened new module-assembly facilities in the United States. A Canadian company, Heliene, reopened a shuttered solar module facility in Minnesota. NREL reports that several additional solar companies expect to add another 4 GW of U.S. module assembly capacity. In 2017, China accounted for more than 70% of total global module production. One challenge for domestic producers is that U.S. module facilities are smaller than the most efficient plants in Asia, meaning they generally lack the economies of scale that are central in driving down unit costs. The two companiesâSolarWorld and Sunivaâthat petitioned the Trump Administration to put tariffs on imported cells and modules have both ceased production. Because U.S. tariffs are much higher on imports from China and Taiwan than on products of other countries, the tariffs have encouraged manufacturers of cells and modules to serve the U.S. market from other Asian countries. PV module shipments into the United States from Malaysia, South Korea, Vietnam, Mexico, and Thailand have largely replaced module imports from China, which shrank to less than 1% of total U.S. imports by 2018. These five countries accounted for nearly 85% of $2.8 billion in PV modules imported into the United States in 2018. Inverters made in China now face a 25% U.S. tariff. To avoid the U.S. tariff, two large suppliers of inverters to the U.S. market are reportedly planning to shift production from China to other locations. According to the Solar Energy Industries Association (SEIA), U.S. inverter production is declining, primarily due to the closure of two major U.S. facilities at the end of 2016. Backsheets and junction boxes are other examples of solar energy components needed for solar panel assembly, and they are also among the products that face a 25% tariff if they are imported from China. Module prices globally have declined steeply over the past decade. While prices in the U.S. market have fallen as well, despite the tariffs on imported cells and modules, they remained 61% higher, on average, than the global average selling price in 2018, according to NREL. One factor contributing to this price differential is the preference of U.S. purchasers for Tier 1 solar modules, which may be 10% to 30% more expensive and may be more reliable than Tier 2 and Tier 3 solar modules, although they may not necessarily be the best-performing modules on the market. Projects using Tier 1 modules may be easier to finance than those using modules not classified as Tier 1. What U.S. Jobs Are Supported by the Solar Industry?86 The federal government does not collect data on employment in the solar energy industry. According to a report by the Solar Foundation, the industry provided 242,300 full-time equivalent jobs in 2018 ( Figure 6 ). Of these positions, 85% involved work other than manufacturing, such as installation of solar systems and project management, wholesale trade and distribution, and operations and maintenance. Most employment in the solar energy industryâ64% in 2018âinvolves two solar sectors, the installation of solar systems and project development, whether on rooftops of individual homes or larger projects. Although the federal government does not track employment specific to the solar energy industry, the Bureau of Labor Statistics (BLS) publishes occupational data for solar PV installers. These data indicate that employment in PV installation may be significantly lower than the figures reported by SEIA for the combined solar installation and project development segment of the industry. BLS predicts the overall employee occupational count for solar PV installers of 9,700 workers in 2018 will rise by 63% to 15,800 jobs in 2028. BLS predicts that solar installation will be the fastest-growing occupation in the nation over the next decade. BLS reports the median pay for a PV installer in 2018 was $42,680 per year, or $20.52 per hour, about 13% above the national median for all workers. At the end of 2018, the number of solar jobs as reported by the Solar Foundation was approximately 7% lower than in 2016, with installation jobs accounting for most of the decline. The annual number of PV systems installed in the United States shrank 14% to about 327,000 in 2018 from approximately 380,000 in 2016. Direct employment in U.S. solar manufacturing was about 34,000 workers in November 2018, according to the Solar Foundation, accounting for about 14% of total employment related to the solar energy sector. The number of reported jobs dropped by 4,400 from November 2016. One reason for the decline may be that the tariffs raised the cost of foreign inputs that are assembled into solar systems in U.S. factories, making those factories' products more expensive. Due to automation, a significant increase in employment in U.S. solar manufacturing is considered to be unlikely. One market research firm says module manufacturing accounted for about 1,200 U.S. jobs in 2018, but is projected to fall to just over a 1,000 workers by 2024. A review of publicly available information by CRS suggests that there are fewer than 2,000 workers involved in domestic polysilicon production. There is also limited employment related to the assembly of solar factory production equipment for wafers, cells, and modules in the United States because this equipment is made mainly in Europe and China. What Land Requirements Does Solar Energy Have?92 Land is required for the extraction, production, and consumption of energy and for the generation, transmission, and distribution of electricity. There is not a generally accepted standard metric or methodology for a comparison of land use impacts across energy technologies. Different studies evaluate land use in different ways and may or may not account for upstream and downstream process steps associated with electricity generation (e.g., extraction of fuels or resources used for electricity generation), for the intensity of the impact of the activity on the occupied land, or for the time-to-recovery. Other factors that may not be incorporated into comparisons include location-dependent factors, such as solar incidence, or co-location of different activities with the energy generation, such as solar panels on rooftops. Estimates of power density for different energy sources vary by methodology and technology type studied. Some estimates consider the area of the power plant only, while others include land areas used for fuel production, electricity transmission, waste disposal, or other factors. Estimates can change with time as technology innovation leads to increased energy efficiency; such is the case for solar energy, with newer and more efficient technologies leading to increased power density. When considering total land area occupied, renewable energy sources generally require more land to produce the same amount of electricity than nonrenewable sources. One metric used in the energy sector that accounts for land use is power density, which can be expressed as a unit of power per unit of area (e.g., watts per square meter). A review of 54 studies which examined the power density of electric power production in the United States found that solar energy has a lower power density than natural gas, nuclear, oil, and coal, but solar energy has a higher power density than wind, hydro, biomass, and most geothermal. The review accounted for energy conversion efficiencies, capacity factors, and infrastructure area, including infrastructure associated with energy production (e.g., mines). The review did not control for time, reporting that the earliest study included in the analysis was from 1974; however, the review concluded that, of the nine energy types evaluated, only solar had a statistically significant relationship between power density and time. Published values for power density for solar systems range from 1.5 to 19.6 W e /m 2 . Generally, solar thermal and utility-scale photovoltaic (PV) were found to require more land area to produce the same amount of electricity than residential PV and concentrated solar. While the technology for residential PV and utility-scale PV is similar, sloped rooftops may allow more sunlight to reach otherwise flat panels for residential systems, and the spacing of panels at utility-scale facilities (regardless of tilt) to provide for maintenance and to avoid shading may lead to lower power densities. Another review found that both location-dependent parameters and technology-dependent parameters affect the variability of land use energy intensity of solar electricity generation. In addition to power density, other factors may be relevant when evaluating energy sources and land use. Two examples are land use and land cover change, which account for the previous state of the land before an energy project was developed. In the case of solar, some solar energy systems may change land use and land cover to a smaller degree than others. For example, rooftop solar PV systems do not change how the underlying land is used or covered. Another factor is co-location of activities where land can be occupied but not used exclusively by its occupier. For example, farming and grazing can occur on land around wind turbines and underneath solar panels (this dual-use solar is referred to as "agrivoltaics"). Time-to-recovery is another factor to consider. Some technologies may impact land such that the land can recover to its previous state after use in a matter of months or a few years; other technologies may impact the land in such a way that it may take decades or centuries for the land to recover to its previous state. According to the Department of Energy, "further work is critically needed to determine appropriate land-use metrics for meaningful cross-comparisons." What Are Potential Impacts of Solar Energy Development on Agriculture?103 Agricultural land has become increasingly desirable for siting utility-scale solar PV systems (i.e., solar farms) for electrical generation. One concern that some raise about solar farm development is that siting solar arrays on agricultural lands can also displace agricultural production. With solar generation capacity in the United States increasing from less than 1 GW in 2010 to 50 GW in 2018, demand for large tracts of reliably sunlit, cleared, unobstructed acreage is also growing. California, North Carolina, Texas, and Florida had the largest U.S. cumulative solar capacity in the third quarter of 2019, with California the largest. While some individual farm operations develop PV arrays through their own investments in solar technologies as an income supplement or as an on-site energy source for their farming operations, private solar development companies have increasingly turned to long-term leasing arrangements with farmers to site PV arrays. Farmers benefit from the lease and solar developers get access to the scarce commodity of land. Prime agricultural lands often represent very large tracts of land in potentially suitable locations. As important as large tracts of acreage may be, other variables determine whether a satisfactory lease is negotiated. The quality of the terrain, local weather factors, proximity to grid connections, local transmission capacity, proximity to main roads, conservation and environmental impact issues, local/regional land use regulations, and flood risks all contribute to the suitability of particular agricultural acreage for a solar development company. In potential lease arrangements, farmers are often interested in whether or not the PV array will curtail, if not completely end, their ability to continue farming. Typically, contractors constructing solar farms will strip the topsoil and then mount the PV modules on concrete footings. Not only does this remove the land from agricultural production during the period of the lease, it can become prohibitively expensive to restore the land to production after a lease terminates. The concern that the agricultural land can be permanently lost to production even after a lease ends is a factor when considering whether to maximize energy capacity on land at the expense of agricultural production. Suitable land where solar generation can be maximized will tend to be highly compensated relative to the potential of the agricultural operation. For example, while marginally productive acreage may be tilled, its yield potential is often quite low, and the environmental costs can be high (e.g., erodible soils). This type of acreage may be suitable for maximization of solar generation without significant threat to overall agricultural production. Under other lease arrangements, solar energy development might occur without detriment to farming. While the land is attractive for siting solar PV arrays, it is also valuable as productive farmland. In these arrangements, vegetation growth may be possible under and around the solar system. The University of Massachusetts Crop Research and Education Center is exploring agrivoltaics, where modules are raised high enough off the ground and spaced in a way that crops can still grow around and beneath them, but also permit an economically viable solar development. Fear of a decline in agricultural production may be an important factor in some opposition to solar development, particularly where the value of the land for solar exceeds the current value for agriculture. Research examining the impact on agricultural yields of solar development could prove important to informing future investment in solar generation. State and federal grants to support development of dual-use agrivoltaic systems, such as the Solar Massachusetts Renewable Target (SMART), could help offset these systems' additional costs. Because U.S. agricultural land often enjoys favorable property tax treatment, different states/regions may establish regulations governing the use of agricultural lands for nonagricultural purposes. Local and regional planning commissions can constrain solar development, and may require various permits and clearances that could challenge the longer-term economic feasibility of the solar development, regardless of the suitability of the land for solar deployment. Successfully co-locating agricultural production with solar development could reduce some of the land use planning constraintsâor outright prohibitionsâthat may come with productive agricultural lands proposed for solar development. Summary:	null	96	45,970	45,972	45,972	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: How Does Solar Energy Work?1 The energy in sunlight can be converted into electricity in either of two ways: by using solar photovoltaic cells or by concentrating solar energy to produce heat for electricity generation. Solar energy can also be used to heat water for direct use, but this report focuses only on electricity generation applications. Solar Photovoltaic (PV) Sunlight can interact with certain materials to directly produce electricity in a process known as the photovoltaic (PV) effect. Silicon (more specifically, crystalline-silicon, or c-Si) is the most commonly used material today, but other materials (e.g., cadmium telluride) also can be used. Research is ongoing into alternative materials and designs that might be more efficient or less expensive than c-Si. To construct a PV cell to generate electricity, PV material is manufactured into ingots, which are then cut into wafers ( Figure 1 ). Wafers are typically 15 centimeters (cm) wide along each side and around one-hundredth of a centimeter thick, although exact dimensions may vary by manufacturing process. Wafers are processed into cells, which are then assembled into modules, also called panels. A module typically consists of 60 to 72 cells mounted on a plastic backing within a frame. Modules are typically installed in groups, known as arrays, with the number of modules in the array depending upon the available space and the desired generation capacity of the project. A PV system includes modules and a variety of structural and electronic components, known as balance of system (BOS) equipment, to tie the system together. Structural BOS equipment includes brackets, on which the modules are mounted. For ground-mounted systems, these brackets can be either fixed or able to rotate during the day to face the sun. Mounting systems that can rotate are known as tracking systems. Modules mounted on tracking systems tend to generate more electricity than modules on fixed-mount systems, all else being equal, because the tracking systems can optimize the amount of sunlight hitting the module over the course of a day. One key piece of BOS equipment is an inverter, an electronic device that converts the electricity generated by PV modules into a form that is usable in the U.S. electric system. Other electronic BOS equipment includes charge controllers, circuit breakers, meters, and switch gear. Some PV systems also include integrated energy storage systems such as batteries. PV systems can be divided into three categories, based primarily on capacity. Utility- scale systems (i.e., solar farms) may range in capacity from a few megawatts (MW) to a few hundred MW. They are typically owned and operated like other central power plants. Utility-scale projects are typically connected to the electricity transmission system, the network of high-voltage lines that move electricity over long distances. Commercial-scale systems typically range in capacity from a few kilowatts (kW; 1,000 kW = 1 MW) to a few hundred kW. They may be installed on the ground or on rooftops, and are typically owned or hosted by commercial, industrial, or institutional entities. Some may be connected to the transmission system, and some may be connected to the electricity distribution system, the network of low-voltage lines that deliver electricity directly to most consumers. Residential -scale systems typically have generation capacity of a few kW. Most residential-scale projects are installed on rooftops and connected to the distribution system. Another way to categorize PV systems is by ownership model. Systems connected to the transmission system (typically utility-scale) are generally owned by utilities or independent power producers, as is the case for other central power plants. Smaller systems may use other ownership models, depending on what applicable state laws allow. Customer-owned systems are owned directly by the electricity consumer benefiting from the system. The consumer might buy the system outright or finance it in the same way as for other property improvements (e.g., loan). Third-party ownership (i.e., solar leasing) is an ownership model in which an electric consumer, such as a homeowner, allows a company to build a solar system on the consumer's property. The company owns and maintains the solar system while the consumer uses the electricity produced by the system. The consumer pays back the cost of the system to the company through either lease payments or a power purchase agreement. Community solar (i.e., solar gardens) is an ownership model in which multiple electricity consumers may purchase or lease shares of a solar system through a subscription. Subscribers can benefit from the project by receiving electricity, financial payments, or both. Community solar systems are usually not installed on a subscriber's property, and the systems may be owned by a utility or another type of entity. Concentrating Solar Power Concentrating solar power (CSP) technologies collect and concentrate energy from sunlight to heat certain fluids (liquids or gases). CSP plants use these heated fluids to produce electricity, either by creating steam to drive a steam turbine or by directly running a generator. CSP plants can be designed with thermal energy storage systems. At least one CSP plant with storage operating in the United States is capable of generating electricity 24 hours a day. How Much Electricity Comes From Solar Energy?11 Electricity generation from solar energy has grown in recent years, as shown in Figure 2 . Solar energy overall (PV and CSP combined) accounted for 0.7% of total U.S. electricity generation in 2014 and 2.2% of the total in 2018, according to data from the U.S. Energy Information Administration (EIA). Most generation (96% in 2018) from solar energy comes from PV systems. Large-scale systems, defined by EIA as those greater than 1 MW, accounted for 61% of overall generation from solar energy in 2014, the first year for which EIA reported generation data for different size categories. By 2018, the share from large-scale systems had increased to 68%. How Much Does a Solar PV System Cost?13 Costs for solar PV systems vary by size, as shown in Figure 3 . The figure shows an estimate of average U.S. solar PV system costs per unit of capacity, as of the first quarter of 2018 (Q1 2018), based on an analysis by the Department of Energy's National Renewable Energy Laboratory (NREL). Costs for any individual project could differ based on project-specific circumstances. Two general findings from NREL's analysis are supported by numerous other studies, namely that larger projects tend to be cheaper on a per-unit basis, and that costs for projects of all sizes have declined in recent years. Utility-scale systems have the lowest unit costs, ranging from an average of $1.06 per watt of direct current (hereinafter, W) to $1.13/W in 2018, depending on whether projects were mounted on fixed brackets or tracking systems, respectively. Commercial-scale systems cost $1.83/W on average in Q1 2018, and residential-scale systems cost $2.70/W on average. The total system cost differences shown in Figure 3 are driven primarily by higher "soft costs." These costs include, for example, costs associated with permitting, interconnecting with the grid, and installer overhead costs. The soft costs are much higher for smaller-scale systems, per watt, than for utility-scale systems. PV system costs have declined, as shown by data from the NREL analysis shown in Figure 4 . NREL reported costs from 2010 to Q1 2018. NREL credits cost declines over this time period to cost declines in all system components (i.e., modules, inverters, BOS equipment, labor, and other soft costs). PV module costs increased between 2017 and 2018 as a result of tariffs discussed in the section " How Are U.S. Tariffs Affecting Domestic Solar Manufacturing? ," offsetting cost declines in other system components, according to the NREL report. How Does Solar Energy Impact Electricity Costs for Consumers?16 Generalizing the cost impacts to consumers for solar systems is challenging because costs for these systems vary across the United States. Additionally, solar system costs are declining in both absolute terms (as discussed in the previous section) and relative to other sources of electric power. In parts of the country, new solar systems are sometimes among the least cost-options for generating electricity. This was not generally the case a few years ago. Policies aimed at promoting solar energy make an assessment of costs more complex. For example, tax incentives, as discussed in the section " What Federal Tax Incentives Support Solar Energy Development? ," can reduce the ownership costs for businesses or individuals that purchase solar energy systems. Some of those costs are then transferred to taxpayers. The following discussion focuses on electricity costs only from a consumer's point of view. Consumers' electricity costs can be measured in two ways. The first way is the electricity rate, typically expressed in cents per kilowatt-hour (cents/kWh). The second way is the electricity bill, typically the total costs for electricity that consumers pay each month expressed in dollars. In most cases, an electricity bill reflects the costs to produce electricity (typically, the applicable electricity rate times the amount of electricity consumed), the costs to deliver electricity to the consumer, and any other fees as determined by state or local regulators (e.g., contributions to funds that provide bill relief to low-income households). Electricity rates can go down while bills go up, and vice versa. Multiple factors can determine how solar energy might affect what consumers pay for electricity. Many of these factors vary based on local circumstances. They can also change over time as the profile of electricity sources changes. Comparing Electricity Costs One way to compare electricity costs is by estimating the lifetime costs of energy systems. Lifetime costs include the initial construction and installation cost plus operation and maintenance (O&M) costs, fuel costs, and other costs. Electricity rates are strongly influenced by total lifetime costs for all the electricity generators serving a given area. Lifetime costs for solar energy have historically been higher than for many other sources, but that is changing in many parts of the United States. For example, one commonly used measure of lifetime costs is the levelized cost of electricity (LCOE), usually expressed in dollars per megawatt-hour of generation ($/MWh) and averaged over the lifetime of a project. LCOE estimates attempt "apples-to-apples" comparisons among technologies because the estimates account for how much electricity a given power plant is expected to produce over its lifetime. According to widely cited estimates from one consulting firm, 2019 LCOE for new utility-scale solar systems ranged from $32/MWh to $42/MWh. By comparison, LCOE for new wind generation was $28/MWh-$54/MWh and for natural gas combined cycle generation was $44/MWh-$68/MWh. Another factor in consumers' bills is the extent to which electricity from solar energy displaces electricity generation from existing sources. If existing power plants are called upon to produce less electricity than planned when they were first built due to the availability of power from less expensive sources, the owners still need to pay the construction cost of their unneeded capacity. Such costs are known as stranded costs. Depending on each state's regulatory framework, stranded costs might be borne by power plant owners or be passed through to consumers in electric bills. To the extent that solar systems require new transmission lines to deliver electricity to consumers, the cost of building those lines may result in higher electricity bills. Utility-scale solar, which is frequently located in rural areas distant from consumers, may have higher associated cost impacts on bills than, for example, residential-scale solar, depending upon project details. On the other hand, installation of solar systems can sometimes avoid upgrades to transmission systems, resulting in potentially lower costs for consumers. In other cases, though, solar systems necessitate upgrades to local distribution systems, which might increase costs for customers. In states with carbon pricing policies in place, increased solar energy deployment could reduce the bill impacts associated with the carbon price. Generating solar energy has approximately zero marginal cost. Marginal costs reflect the variable costs of producing incremental amounts of electricity from an existing source. Marginal costs are typically dominated by fuel costs, which are not relevant for solar energy. When solar energy is present in an area, fewer fuel-consuming electricity sources are required, which tends to drive down marginal costs for the regional electricity system overall. This effect may diminish as the number of solar electricity generators increases in an area, because nearby solar PV systems tend to maximize their electricity production at the same time (usually midday). If all of the midday electricity demand were to be met by solar PV, there would no incremental cost benefit to adding more solar PV systems to the region. The rate and bill impacts discussed above would apply to all electricity consumers within a region in which solar energy development is taking place. Consumers that install rooftop solar systems or participate in community solar projects ("solar customers") could have different bill impacts. Most states allow solar customers to be financially compensated for the electricity generated by the projects they host. The most common type of policy for this compensation is net metering, though some states have established net metering alternatives. Depending on a consumer's electricity demand and the size of the solar energy project, solar consumers participating in net metering or related policies could reduce their electricity bills to zero. Is Solar Energy Reliable?22 One potential reliability concern for solar energy is due to its variable nature, dependent on the availability of sunlight. For example, solar PV systems cannot produce electricity at night, and their output can vary during the day depending on local weather conditions (e.g., cloudiness). The physical requirements of the electricity system are such that the supply and demand of electricity must equal each other at all times. Currently, to ensure reliability, other sources of electricity generation are used when solar energy is not available. Expanding other types of electricity system infrastructure, such as transmission lines or energy storage assets, could also address this limitation. Alternatively, policies and regulatory frameworks that incent greater electricity consumption during daytime hours and less at night (i.e., load shifting) could reduce the reliability impact of solar energy's variability. Another potential reliability concern for solar energy arises from the mismatch between the hours of the day when generation from solar energy peaks (typically midday) and when electricity demand peaks (typically several hours later). To maintain reliability, some sources of electricity have to quickly increase their output to account for the simultaneous drop-off in output from solar generators and increase in demand. As more solar systems are installed, the need for other sources that can quickly change output levels typically increases. This situation is often referred to as the "duck curve" because the shape of the plot showing the difference between demand and output from solar generators resembles a duck. Not all electricity generators are capable of quickly changing their output, and their deployment may not match the levels of deployment of solar generators. Load shifting, operational changes to non-solar sources, and deployment of more flexible resources (e.g., energy storage) are all possible ways to address the duck curve. Some analysis suggests that electric vehicle deployment might also act as a form of load shifting and address the duck curve, at least if vehicle charging occurs when output from solar sources is high. A third potential reliability concern comes from the fact that solar PV produces direct current (DC) electricity. Conventional generators produce alternating current (AC) electricity, and the grid is optimized for AC. An inverter is an electrical device that converts DC to AC; grid-connected solar PV systems require an inverter. For this reason, solar is sometimes referred to as an "inverter-based resource." Generators that produce AC also inherently contribute to grid reliability by providing what are known as "essential reliability services" or "ancillary services." Most of these services arise from the way generators physically respond to changes in the balance of electricity supply and demand over fractions of seconds. Inverter-based resources do not inherently provide these services, although inverters can be designed (and are being deployed) to provide some of these services. The electric power industry and its federal and state regulators have been studying ways to protect system reliability from the unique nature of inverter-based resources since at least 2008. Additionally, Congress has funded a variety of research programs related to electric reliability. No widespread reliability issues due to solar appear to have occurred to date, though some local reliability issues have been reported. What Federal Tax Incentives Support Solar Energy Development?30 Various provisions in the Internal Revenue Code (IRC) support investment in solar energy equipment. These provisions reduce the after-tax cost of investing in solar property, thereby encouraging taxpayers to invest in more solar property than they would have absent tax incentives. Tax incentives for solar energy property were first enacted in 1978. Several incentives for solar are currently part of the tax code. Historically, the value of tax incentives for solar has fluctuated, although the current tax credit rates were established in 2005. Under current law, solar tax incentives are scheduled to phase down in the coming years from their 2019 rates. Tax Incentives for Businesses Investments in certain renewable energy property, including solar, qualify for an investment tax credit (ITC). The amount of the credit is determined as a percentage of the taxpayer's basis in eligible property (generally, the basis is the cost of acquiring or constructing eligible property). The credit rate for solar was 30% through 2019, 26% in 2020 and 22% in 2021. Solar energy has a permanent 10% ITC that is to go into effect in 2022. The expiration dates for the ITC are commence construction deadlines. For example, solar property that was under construction by the end of 2019 may qualify for the 30% tax credit, even if the property is not placed in service (or ready for use) until a later date. Special provisions in the tax code allow solar energy property to be depreciated over a shorter period of time than would normally be the case. Specifically, solar energy property is classified as five-year property in the Modified Accelerated Cost Recovery System (MACRS). The depreciable basis (the amount that is recovered through depreciation deductions over time) of solar energy property is reduced by 50% of any ITC claimed. Thus, if a 30% ITC was claimed on a $1 million investment in solar energy property, $850,000 would be depreciated under the schedule for five-year MACRS property. Accelerating depreciation reduces the after-tax cost of investing in solar energy property. Temporarily, through 2022, certain investments in solar energy property are eligible for 100% bonus depreciation. This eligibility means that for these investments, the expense can be deducted immediately (i.e., expensed). Bonus depreciation is scheduled to phase down after 2022. It is scheduled to decrease to 80% in 2023, 60% in 2024, 40% in 2025, and 20% in 2026, before being 0% in 2027. Bonus depreciation may be claimed for new as well as used property. Regulated public utilities cannot claim bonus depreciation. Tax-exempt organizations, such as electric cooperatives, also cannot claim bonus depreciation, and typically are limited in their ability to benefit from tax incentives more broadly. Tax Incentives for Individuals Individuals purchasing solar energy property may qualify for the residential energy-efficient property credit. Through 2019, the tax credit for individuals is 30% of the cost of solar electric property installed on the taxpayer's residence. The tax credit rate is scheduled to be 26% in 2020 and 22% in 2021, with the credit expiring after 2021. The tax credit is nonrefundable, meaning that the amount of the credit a taxpayer can claim in the tax year is limited to the taxpayer's income tax liability. However, unused tax credits can be carried forward to the following tax year. How Much Do Solar Tax Incentives Cost? Tax expenditure estimates are one source of information on the "cost" of solar tax incentives. Tax expenditures are, by definition, the amount of forgone revenue associated with special provisions in the tax code, such as tax credits and accelerated cost recovery. For FY2019, the Joint Committee on Taxation (JCT) estimates that the amount of forgone revenue associated with the business ITC for solar was $3.4 billion. The amount of forgone revenue associated with the residential energy-efficient property credit for FY2019 was an estimated $2.0 billion. This figure, however, includes all eligible technologies. While most of this was due to solar energy property, JCT does not estimate the forgone revenue associated with solar separate from other eligible technologies. The revenue loss for five-year MACRS for all eligible energy property (primarily wind and solar, but other technologies are eligible) is estimated at less than $50 million in FY2018. Because bonus depreciation is not a solar- or even energy-specific provision, a tax expenditure estimate for bonus depreciation for solar is not available. Internal Revenue Service (IRS) data also provide information on individual claims of tax credits for solar electric property. In 2017, individuals filed 381,242 tax returns that claimed the residential energy-efficient property credit for solar electric property. The total cost of solar electric property for which tax credits were claimed was $5.5 billion, generating approximately $1.6 billion in individual income tax credits. What State Policies Support Solar Energy Development?46 Per the Federal Power Act, states have jurisdiction over most aspects of electricity generation and distribution. Consequently, many policies that affect the development solar energy are implemented by states. This section discusses one common state policy, a renewable portfolio standard. Other state policies designed to accelerate the deployment of solar energy include net metering (mentioned in the section " How Does Solar Energy Impact Electricity Costs for Consumers? "), state tax credits, and allowing third-party ownership (i.e., solar leasing). Renewable portfolio standards (or, more broadly, electricity portfolio standards), as typically implemented, set requirements on utilities to procure a minimum share of their electricity sales from specified renewable sources such as solar. Many factors influence solar energy development, but renewable portfolio standards are widely credited as being a key factor historically, as they have provided a policy-driven source of demand for renewable electricity generation. Twenty-nine states, three U.S. territories, and the District of Columbia are implementing mandatory electricity portfolio standards, and an additional eight states and one territory have voluntary standards. Of these, nine jurisdictions have targets of 100% clean energy. Jurisdictions differ in their definitions of eligible clean energy sources, but solar is eligible in all cases. Nineteen of these policies include specific requirements or extra incentives for solar. How Are U.S. Tariffs Affecting Domestic Solar Manufacturing?52 The United States has applied tariffs on imports of solar energy equipment since 2012. The different types of equipment comprising a solar PV system are discussed in the section " How Does Solar Energy Work? " The Obama Administration imposed double- and triple-digit antidumping and countervailing duty tariffs on U.S. imports of solar cells and modules from China in 2012 and 2015 and on imports from Taiwan in 2015. The Trump Administration imposed a tariff, which started at 30% in 2018 and declines by 5% yearly until reaching 15% in 2021, on photovoltaic solar cells and modules from most countries. The tariff includes some exemptions, such as an annual 2.5 gigawatt (GW) tariff-free quota for solar cells as long as the final module assembly takes place in the United States. Several dozen developing countries are excluded from the tariff as long as their import levels stay small, and certain technologies, such as thin-film solar PV products or smaller crystalline silicon PV cells, are not subject to the tariff. This tariff is scheduled to expire in February 2022, but it may be extended, at the President's discretion, for up to four additional years. It is assessed on top of the previously existing tariffs on Chinese and Taiwanese producers, leading to tariff rates as high as 239% on some PV products made in China. In 2018, the Trump Administration placed a 25% duty on steel and a 10% duty on aluminum imported from most countries. These duties affect BOS equipment, such as PV brackets, module frames, cabling, power electronics housing, batteries, and wiring, and are projected to add 2% - 5% to PV system costs. Additional tariffs on a long list of Chinese products, including inverters and other solar equipment, were imposed at a 10% rate in September 2018. The rate was raised to 25% in May 2019. The tariff effects have not been felt evenly across the solar industry's manufacturing segments (i.e., polysilicon production, ingot and wafer production, solar cell production, and module assembly). To date the tariffs have not encouraged expansion of U.S. manufacturing in the more technologically advanced segment of the PV manufacturing supply chain, namely the production of crystalline-silicon solar cells. However, U.S. production of solar modules, into which cells are assembled, rose in 2018, and a few companies, including one Chinese manufacturer, have opened solar module assembly plants in the United States. The increased domestic production of modules draws on imported parts and components, reflecting the industry's global supply chain. U.S. solar tariffs have negatively affected the one segment of the PV supply chain in which the United States traditionally has been the most competitive, the production of polysilicon, the key raw material used in the manufacture of the vast majority of solar cells. China retaliated against the Obama Administration tariffs by imposing double-digit tariffs on polysilicon shipped from the United States to China, which had been a significant export market for U.S. producers. These tariffs have had an adverse effect on U.S. production of polysilicon, which shrank 40% between 2015 and 2018. The U.S. share of global polysilicon production is also down, falling to 11% of the global total in 2017 from 29% in 2010. The production of wafers made from polysilicon, which in turn are cut to make individual cells, has largely been discontinued in the United States, with China accounting for more than 80% of global wafer production in 2017. Solar cell production has significant economies of scale, so manufacturers generally centralize production in large plants. As shown in Figure 5 , annual domestic U.S. PV cell production shrank to 124 megawatts (MW) in 2018, the lowest level since 2010. Domestic manufacturers of PV modules import nearly all of their solar cells, which represent a substantial portion of the cost and value of a finished module (27% in Q4 2018, according to Wood Mackenzie, an energy consultancy). China accounted for more than two-thirds of the world's solar cell production in 2017. Despite the various trade actions in 2018, solar cell prices in the United States declined from 20 cents per watt at the beginning of that year to 10 cents per watt at year-end 2018, which represented a 50% decrease in cost. Meanwhile, figures from the United States International Trade Commission (ITC) show U.S. imports of solar cells more than doubled by value from 2016 to 2018. This trend continued despite the additional tariffs on solar cells and modules that took effect in 2018, with U.S. imports of solar cells rising 32% during the first seven months of 2019 compared to the same period in 2018. One possible reason for the rise in cell imports is that the Trump Administration's solar tariff allows up to 2.5 GW of unassembled solar cells to be imported into the United States duty-free each year the tariff is in effect. These can then be assembled into solar modules in the United States. From February 2018 to the end of 2018, about a quarter, or 650 MW, of the duty-free tariff rate quota was filled. The low fill rate during the first year may be because there was not enough module assembly capacity in the United States to use those cells, and because some PV cells were stockpiled prior to the imposition of the tariff. If the 2.5 GW quota is reached in any year, foreign-made cells will be subject to U.S. tariffs for the balance of that year. The uncertainty surrounding the tariffs limits the incentive to expand solar cell production in the United States. For example, the Trump Administration's solar tariff is initially set to last four years, with the tariff rate declining by five percentage points in each year the tariff is in effect. The other tariffs may be discontinued at the President's discretion. A new cell factory would need a large capital investment and about two years to construct. The possibility that some or all of the tariffs will be eliminated in the near future may discourage creation of new manufacturing capacity. At present, Panasonic is the only major domestic producer of crystalline-silicon solar cells, and several producers of solar cells have closed U.S. plants since 2012. Unlike cell production, domestic module assembly is growing. A count by the Solar Foundation, a trade group, indicates that approximately 20 factories assembled PV modules in the United States in 2018. Annual U.S. PV module production increased to 1.4 GW in 2018, up from 970 MW in 2017, but down from a record high of 1.7 GW in 2016, the year the federal investment tax credit had been set to expire (see Figure 5 ). It typically takes about six months to construct a new solar-module assembly facility and begin operation at scale. PV Magazine , an industry publication, reported that 3.9 GW of new module manufacturing capacity was under construction or had recently come online as of late 2018. Hanwha Q Cells, a South Korean company, and Jinko Solar, a Chinese company (the largest module producer in the world), have opened new module-assembly facilities in the United States. A Canadian company, Heliene, reopened a shuttered solar module facility in Minnesota. NREL reports that several additional solar companies expect to add another 4 GW of U.S. module assembly capacity. In 2017, China accounted for more than 70% of total global module production. One challenge for domestic producers is that U.S. module facilities are smaller than the most efficient plants in Asia, meaning they generally lack the economies of scale that are central in driving down unit costs. The two companiesâSolarWorld and Sunivaâthat petitioned the Trump Administration to put tariffs on imported cells and modules have both ceased production. Because U.S. tariffs are much higher on imports from China and Taiwan than on products of other countries, the tariffs have encouraged manufacturers of cells and modules to serve the U.S. market from other Asian countries. PV module shipments into the United States from Malaysia, South Korea, Vietnam, Mexico, and Thailand have largely replaced module imports from China, which shrank to less than 1% of total U.S. imports by 2018. These five countries accounted for nearly 85% of $2.8 billion in PV modules imported into the United States in 2018. Inverters made in China now face a 25% U.S. tariff. To avoid the U.S. tariff, two large suppliers of inverters to the U.S. market are reportedly planning to shift production from China to other locations. According to the Solar Energy Industries Association (SEIA), U.S. inverter production is declining, primarily due to the closure of two major U.S. facilities at the end of 2016. Backsheets and junction boxes are other examples of solar energy components needed for solar panel assembly, and they are also among the products that face a 25% tariff if they are imported from China. Module prices globally have declined steeply over the past decade. While prices in the U.S. market have fallen as well, despite the tariffs on imported cells and modules, they remained 61% higher, on average, than the global average selling price in 2018, according to NREL. One factor contributing to this price differential is the preference of U.S. purchasers for Tier 1 solar modules, which may be 10% to 30% more expensive and may be more reliable than Tier 2 and Tier 3 solar modules, although they may not necessarily be the best-performing modules on the market. Projects using Tier 1 modules may be easier to finance than those using modules not classified as Tier 1. What U.S. Jobs Are Supported by the Solar Industry?86 The federal government does not collect data on employment in the solar energy industry. According to a report by the Solar Foundation, the industry provided 242,300 full-time equivalent jobs in 2018 ( Figure 6 ). Of these positions, 85% involved work other than manufacturing, such as installation of solar systems and project management, wholesale trade and distribution, and operations and maintenance. Most employment in the solar energy industryâ64% in 2018âinvolves two solar sectors, the installation of solar systems and project development, whether on rooftops of individual homes or larger projects. Although the federal government does not track employment specific to the solar energy industry, the Bureau of Labor Statistics (BLS) publishes occupational data for solar PV installers. These data indicate that employment in PV installation may be significantly lower than the figures reported by SEIA for the combined solar installation and project development segment of the industry. BLS predicts the overall employee occupational count for solar PV installers of 9,700 workers in 2018 will rise by 63% to 15,800 jobs in 2028. BLS predicts that solar installation will be the fastest-growing occupation in the nation over the next decade. BLS reports the median pay for a PV installer in 2018 was $42,680 per year, or $20.52 per hour, about 13% above the national median for all workers. At the end of 2018, the number of solar jobs as reported by the Solar Foundation was approximately 7% lower than in 2016, with installation jobs accounting for most of the decline. The annual number of PV systems installed in the United States shrank 14% to about 327,000 in 2018 from approximately 380,000 in 2016. Direct employment in U.S. solar manufacturing was about 34,000 workers in November 2018, according to the Solar Foundation, accounting for about 14% of total employment related to the solar energy sector. The number of reported jobs dropped by 4,400 from November 2016. One reason for the decline may be that the tariffs raised the cost of foreign inputs that are assembled into solar systems in U.S. factories, making those factories' products more expensive. Due to automation, a significant increase in employment in U.S. solar manufacturing is considered to be unlikely. One market research firm says module manufacturing accounted for about 1,200 U.S. jobs in 2018, but is projected to fall to just over a 1,000 workers by 2024. A review of publicly available information by CRS suggests that there are fewer than 2,000 workers involved in domestic polysilicon production. There is also limited employment related to the assembly of solar factory production equipment for wafers, cells, and modules in the United States because this equipment is made mainly in Europe and China. What Land Requirements Does Solar Energy Have?92 Land is required for the extraction, production, and consumption of energy and for the generation, transmission, and distribution of electricity. There is not a generally accepted standard metric or methodology for a comparison of land use impacts across energy technologies. Different studies evaluate land use in different ways and may or may not account for upstream and downstream process steps associated with electricity generation (e.g., extraction of fuels or resources used for electricity generation), for the intensity of the impact of the activity on the occupied land, or for the time-to-recovery. Other factors that may not be incorporated into comparisons include location-dependent factors, such as solar incidence, or co-location of different activities with the energy generation, such as solar panels on rooftops. Estimates of power density for different energy sources vary by methodology and technology type studied. Some estimates consider the area of the power plant only, while others include land areas used for fuel production, electricity transmission, waste disposal, or other factors. Estimates can change with time as technology innovation leads to increased energy efficiency; such is the case for solar energy, with newer and more efficient technologies leading to increased power density. When considering total land area occupied, renewable energy sources generally require more land to produce the same amount of electricity than nonrenewable sources. One metric used in the energy sector that accounts for land use is power density, which can be expressed as a unit of power per unit of area (e.g., watts per square meter). A review of 54 studies which examined the power density of electric power production in the United States found that solar energy has a lower power density than natural gas, nuclear, oil, and coal, but solar energy has a higher power density than wind, hydro, biomass, and most geothermal. The review accounted for energy conversion efficiencies, capacity factors, and infrastructure area, including infrastructure associated with energy production (e.g., mines). The review did not control for time, reporting that the earliest study included in the analysis was from 1974; however, the review concluded that, of the nine energy types evaluated, only solar had a statistically significant relationship between power density and time. Published values for power density for solar systems range from 1.5 to 19.6 W e /m 2 . Generally, solar thermal and utility-scale photovoltaic (PV) were found to require more land area to produce the same amount of electricity than residential PV and concentrated solar. While the technology for residential PV and utility-scale PV is similar, sloped rooftops may allow more sunlight to reach otherwise flat panels for residential systems, and the spacing of panels at utility-scale facilities (regardless of tilt) to provide for maintenance and to avoid shading may lead to lower power densities. Another review found that both location-dependent parameters and technology-dependent parameters affect the variability of land use energy intensity of solar electricity generation. In addition to power density, other factors may be relevant when evaluating energy sources and land use. Two examples are land use and land cover change, which account for the previous state of the land before an energy project was developed. In the case of solar, some solar energy systems may change land use and land cover to a smaller degree than others. For example, rooftop solar PV systems do not change how the underlying land is used or covered. Another factor is co-location of activities where land can be occupied but not used exclusively by its occupier. For example, farming and grazing can occur on land around wind turbines and underneath solar panels (this dual-use solar is referred to as "agrivoltaics"). Time-to-recovery is another factor to consider. Some technologies may impact land such that the land can recover to its previous state after use in a matter of months or a few years; other technologies may impact the land in such a way that it may take decades or centuries for the land to recover to its previous state. According to the Department of Energy, "further work is critically needed to determine appropriate land-use metrics for meaningful cross-comparisons." What Are Potential Impacts of Solar Energy Development on Agriculture?103 Agricultural land has become increasingly desirable for siting utility-scale solar PV systems (i.e., solar farms) for electrical generation. One concern that some raise about solar farm development is that siting solar arrays on agricultural lands can also displace agricultural production. With solar generation capacity in the United States increasing from less than 1 GW in 2010 to 50 GW in 2018, demand for large tracts of reliably sunlit, cleared, unobstructed acreage is also growing. California, North Carolina, Texas, and Florida had the largest U.S. cumulative solar capacity in the third quarter of 2019, with California the largest. While some individual farm operations develop PV arrays through their own investments in solar technologies as an income supplement or as an on-site energy source for their farming operations, private solar development companies have increasingly turned to long-term leasing arrangements with farmers to site PV arrays. Farmers benefit from the lease and solar developers get access to the scarce commodity of land. Prime agricultural lands often represent very large tracts of land in potentially suitable locations. As important as large tracts of acreage may be, other variables determine whether a satisfactory lease is negotiated. The quality of the terrain, local weather factors, proximity to grid connections, local transmission capacity, proximity to main roads, conservation and environmental impact issues, local/regional land use regulations, and flood risks all contribute to the suitability of particular agricultural acreage for a solar development company. In potential lease arrangements, farmers are often interested in whether or not the PV array will curtail, if not completely end, their ability to continue farming. Typically, contractors constructing solar farms will strip the topsoil and then mount the PV modules on concrete footings. Not only does this remove the land from agricultural production during the period of the lease, it can become prohibitively expensive to restore the land to production after a lease terminates. The concern that the agricultural land can be permanently lost to production even after a lease ends is a factor when considering whether to maximize energy capacity on land at the expense of agricultural production. Suitable land where solar generation can be maximized will tend to be highly compensated relative to the potential of the agricultural operation. For example, while marginally productive acreage may be tilled, its yield potential is often quite low, and the environmental costs can be high (e.g., erodible soils). This type of acreage may be suitable for maximization of solar generation without significant threat to overall agricultural production. Under other lease arrangements, solar energy development might occur without detriment to farming. While the land is attractive for siting solar PV arrays, it is also valuable as productive farmland. In these arrangements, vegetation growth may be possible under and around the solar system. The University of Massachusetts Crop Research and Education Center is exploring agrivoltaics, where modules are raised high enough off the ground and spaced in a way that crops can still grow around and beneath them, but also permit an economically viable solar development. Fear of a decline in agricultural production may be an important factor in some opposition to solar development, particularly where the value of the land for solar exceeds the current value for agriculture. Research examining the impact on agricultural yields of solar development could prove important to informing future investment in solar generation. State and federal grants to support development of dual-use agrivoltaic systems, such as the Solar Massachusetts Renewable Target (SMART), could help offset these systems' additional costs. Because U.S. agricultural land often enjoys favorable property tax treatment, different states/regions may establish regulations governing the use of agricultural lands for nonagricultural purposes. Local and regional planning commissions can constrain solar development, and may require various permits and clearances that could challenge the longer-term economic feasibility of the solar development, regardless of the suitability of the land for solar deployment. Successfully co-locating agricultural production with solar development could reduce some of the land use planning constraintsâor outright prohibitionsâthat may come with productive agricultural lands proposed for solar development.	Summary:	gov_report	1,024	null	10
crs_R46326	crs_R46326_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction On March 13, 2020, President Donald J. Trump declared an emergency under Section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act; 42 U.S.C. Â§5191(b)) in response to coronavirus disease 2019 (COVID-19). The President's emergency declaration authorized assistance for COVID-19 response efforts for all U.S. states, territories, tribes, and the District of Columbia in accordance with Stafford Act Section 502. The emergency declaration authorized the Federal Emergency Management Agency's (FEMA's) Public Assistance (PA) program, which provides direct and financial assistance for emergency protective measures. The President's March 13, 2020 emergency declaration letter to the Acting Secretary of the Department of Homeland Security, the Secretary of the Department of Treasury, the Secretary of the Department of Health and Human Services, and the Administrator of the Federal Emergency Management Agency, stated that the President "believe[s] that the disaster is of such severity and magnitude nationwide that requests for a declaration of a major disaster ... may be appropriate." As of March 20, 2020, the President began approving major disaster declaration requests under the Stafford Act. As of April 22, 2020, the President had approved major disaster declaration requests for all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. This report provides answers to frequently asked questions (FAQs) regarding: Stafford Act declarations, including legal authorities, limitations on assistance, and other information related to the declaration request process; types of assistance available to state, territorial, and tribal governments, private nonprofit organizations, private entities, and individuals and households pursuant to the Stafford Act emergency and major disaster declarations for COVID-19; the Disaster Relief Fund (DRF), the source of funding for the Stafford Act emergency and major disaster declarations; and additional references. The scope of this report is limited to assistance authorized under the Stafford Act. There are, however, other types of assistance extrinsic to the Stafford Act that are activated by a Stafford declaration. This report does not address these other forms of assistance. Stafford Act Declarations The Stafford Act authorizes the President to issue two types of declarations that could provide federal assistance to states and localities in response to a public health incident, such as an infectious disease outbreak: (1) an "emergency declaration" (authorized under Stafford Act Section 501), or (2) a "major disaster declaration" (authorized under Stafford Act Section 401). The following questions relate to the Stafford Act declarations for COVID-19. The President declared an emergency for COVID-19. Do states, territories, and tribes still need to request a COVID-19 emergency declaration? The President's emergency declaration authorized assistance for COVID-19 response efforts for all U.S. states, territories, tribes, and the District of Columbia; specifically, it authorized FEMA Public Assistance (PA) emergency protective measures. Thus, states, territories, and tribes do not need to request separate emergency declarations in addition to the President's emergency declaration. If, however, a state, territory, or tribe needs supplementary federal assistance, the governor or chief executive may request that the declaration be amended to include additional areas or types of assistance. FEMA can approve a request for additional areas or forms of assistance after a presidential emergency declaration. The assistance provided pursuant to an emergency declaration is limited (see Table 1 , which lists the forms of assistance available pursuant to each type of declaration). If a state, territory, or tribe needs assistance that is only available pursuant to a major disaster declaration, they may submit a major disaster declaration request to the President (through FEMA). Although the President can declare an emergency unilaterally in certain circumstances, a major disaster declaration would need to be requested by state, territory, or tribal governments (see " Why didn't the President declare a national major disaster for COVID-19? "). Does the President have the authority to unilaterally declare an emergency under the Stafford Act? Section 501(b) of the Stafford Act allows the President to unilaterally declare an emergency for certain emergencies involving federal primary responsibility. The President's nationwide emergency declaration for COVID-19 was made under Stafford Act Section 501(b) on the grounds that the entire country is now facing a significant public health emergency ... [and] [o]nly the Federal Government can provide the necessary coordination to address a pandemic of this national size and scope.... It is the preeminent responsibility of the Federal Government to take action to stem a nationwide pandemic that has its origins abroad, which implicates its authority to regulate matters related to interstate matters and foreign commerce and to conduct the foreign relations of the United States. This is the first time a President has unilaterally declared a Stafford Act emergency for a public health incidentâspecifically, an infectious disease outbreak. Unilateral presidential declarations, however, have been made for incidents on a limited scale. Is there a cap on the amount of funding FEMA can spend under an emergency declaration? Although Stafford Act Section 503 sets a statutory "cap" of $5 million on spending for a single emergency, there is an exception. The $5 million limit may be exceeded when the President determines that: (A) continued emergency assistance is immediately required; (B) there is a continuing and immediate risk to lives, property, public health or safety; and (C) necessary assistance will not otherwise be provided on a timely basis. If the $5 million "cap" is exceeded, the President must report to Congress on the "nature and extent of emergency assistance requirements and shall propose additional legislation if necessary." Although the President's emergency declaration for COVID-19 covers the entire nation, each disaster-affected state and the District of Columbia, as well as some tribal governments, received a distinct emergency declaration (i.e., 57 separate emergency declarations). Therefore, it appears that each distinct emergency declaration may count as a "single emergency" for purposes of Stafford Act Section 503 and that the $5 million "cap" is not the nationwide limit on the amount of emergency assistance that FEMA can provide (see Appendix B for an example of a time when different states, territories, and tribes received presidential emergency declarations under the Stafford Act for the same incident). Major disaster declarations do not have a statutory or regulatory spending cap. As of April 22, 2020, all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands have received major disaster declarations for COVID-19. For more information on the funding available for the emergencies and major disasters declared for COVID-19, see the " Funding for Stafford Act Declarations " section. Is the COVID-19 emergency assistance time limited? The federal assistance provided must respond to the effects of the incident warranting an emergency or major disaster declaration "which took place during the incident period or was in anticipation of that incident." The emergency and major disaster declarations for COVID-19 currently list the incident period as "January 20, 2020 and continuing." In previous ongoing disasters, the "continuing" incident period has changed to a set date marking the end of the emergency or major disaster. In the case of COVID-19, the incident period may vary for each state, territorial, and tribal government as the threat of COVID-19 abates. According to federal regulations, FEMA determines the incident period in the FEMA-State Agreement. In May 2016, the agency released a fact sheet on responding to an infectious disease event, which states, "[i]n the event of an emergency declaration, FEMA would determine the incident period in coordination with HHS." The governor of each declared state or territory, or the chief executive for each declared Indian tribal government, must execute a FEMA-State Agreement in order to receive assistance pursuant to their COVID-19 emergency declaration. It is also possible to extend the incident period. Extensions of the incident period, and program extensions and end dates may be announced via news releases on FEMA's website. Why didn't the President declare a national major disaster for COVID-19? Stafford Act Section 401 states "[a]ll requests for a declaration by the President that a major disaster exists shall be made by the Governor of the affected State" or "[t]he Chief Executive of an affected Indian tribal government may submit a request for a declaration by the President that a major disaster exists.... " Although the President is not authorized by the Stafford Act to unilaterally declare a major disaster on behalf of a state, territory, or tribe, the President stated in his emergency declaration letter to the Acting Secretary of the Department of Homeland Security, the Secretary of the Department of Treasury, the Secretary of the Department of Health and Human Services, and the Administrator of the Federal Emergency Management Agency that he "believe[s] that the disaster is of such severity and magnitude nationwide that requests for a declaration of a major disaster ... may be appropriate." As of March 20, 2020, the President began approving major disaster declaration requests under the Stafford Act. As of April 22, 2020, all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands have received major disaster declarations for COVID-19. Have states, territories, and tribes ever received a major disaster declaration for an outbreak of an infectious disease, such as COVID-19? The President started approving major disaster declaration requests for COVID-19 as of March 20, 2020. These declarations are the first major disaster declarations issued under the Stafford Act for an infectious disease outbreak. Does it take a long time to approve a request for a major disaster declaration? The State of New York was the first state to receive a major disaster declaration for COVID-19. According to FEMA's "Daily Operations Briefing for Wednesday, March 18, 2020," New York requested a major disaster declaration on March 17, 2020. The President authorized New York's request on March 20, 2020. Other state requests for a major disaster for COVID-19 have also been processed within days of their submission. FEMA lists the approved presidential major disaster declarations for COVID-19 on the agency's "COVID-19 Disaster Declarations" and "Disasters" webpages. As of April 22, 2020, all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands have received major disaster declarations for COVID-19. Types of Stafford Act Assistance Different types of federal assistance are available pursuant to each type of declaration, with emergency declarations providing more limited forms of assistance than major disaster declarations. Federal assistance made available pursuant to Stafford Act declarations is intended to supplement local efforts to respond to and recover from emergencies and major disasters. Federal assistance may support state, territorial, tribal, and local governments, certain nonprofit organizations, and individuals and households. Table 1 lists the forms of assistance available pursuant to each type of declaration. The following questions relate to the federal response efforts for COVID-19, including assistance available to state, territorial, tribal, and local governments, private nonprofit organizations, private entities, and individuals and households. What is Emergency Declaration Assistance? Emergency declarations authorize some forms of Public Assistance (PA) and Individual Assistance (IA) but the assistance is generally more limited than assistance that is made available under a major disaster declaration. Table 1 lists the forms of assistance available pursuant to an emergency declaration. Emergency declarations often authorize certain forms of PA, which supplement the ability of a state, territory, or tribe to respond to an incident. Emergency declarations may authorize PA "emergency work" undertaken "to save lives, protect property and public health and safety, and lessen or avert the threat of a catastrophe, including precautionary evacuations," per Section 502 of the Stafford Act. FEMA's two categories of PA "emergency work" are debris removal (Category A) and emergency protective measures (Category B). Stafford Act emergency declarations for public health incidents have previously authorized emergency protective measures undertaken to reduce an immediate threat to life, public health, or safety, including emergency shelter and medicine, hazard communication, and provision and distribution of necessities. Individual Assistance, which helps individuals and households respond to post-disaster needs, can also be made available through an emergency declaration. One form of IAâthe Individuals and Households Program (IHP) (authorized under Stafford Act Section 408) may be authorized pursuant to an emergency declaration. What assistance is available for states, territories, and tribes under the emergency declaration for COVID-19? The emergency declarations issued for COVID-19 on March 13, 2020 authorized Public Assistance (PA) in accordance with Section 502 of the Stafford Act. Under this declaration, FEMA may reimburse states, tribes, and territories for costs incurred while performing emergency protective measures. Specifically, the COVID-19 emergency declarations authorized PA Category BâEmergency Protective Measures. States, territories, or tribes will be the PA grant Recipients and administer PA awards. State, territorial, and tribal governments that have received emergency or major disaster declarations may apply to FEMA for funds as PA grant Recipients. Local governments and certain nonprofit entities may apply for funds through the PA grant Recipient. Eligible applicants are to be reimbursed for 75% of eligible costs incurred while performing emergency protective measures. FEMA cannot provide financial assistance for activities that are covered by insurance, or any other source, including activities eligible for financial assistance from the Department of Health and Human Services (HHS). For example, PA applicants cannot receive reimbursement for COVID-19 public health surveillance work or other activities already funded by the HHS Public Health Emergency Preparedness Cooperation Agreement Program. Emergency protective measures encompass a wide range of activities. According to a FEMA news release on the COVID-19 emergency declaration , reimbursable activities may include "activation of State Emergency Operations Centers, National Guard costs, law enforcement and other measures necessary to protect public health and safety." On March 19, 2020, FEMA released a non-exclusive list of eligible emergency protective measures that was later supplemented with a non-exclusive list of eligible emergency medical care. What assistance is available for private nonprofit organizations and businesses under the emergency declaration for COVID-19? Under the Stafford Act, eligible private nonprofit organizations may receive reimbursement for costs incurred while performing eligible emergency protective measures through the PA program. For-profit entities are not eligible applicants for PA. President Trump's emergency declaration for COVID-19 authorized FEMA to reimburse state, territorial, tribal, and local government entities and certain nonprofit organizations (PNPs) for eligible costs incurred while performing emergency protective measures. Under the Stafford Act, certain PNPs may be eligible for PA if they provide "critical services" or non-critical, "essential" services available to the general public. PNPs providing critical services include educational, utility, irrigation, emergency, medical, rehabilitational, and temporary or permanent custodial care facilities. PNPs providing non-critical but essential services include, but are not limited to, community centers, libraries, homeless shelters, food banks, broadcasting facilities, houses of worship, senior citizen centers, rehabilitation facilities, and shelter workshops. Religiously affiliated PNPs must meet the same eligibility criteria as other PNPs. For-profit entities are not eligible to apply for reimbursement through the PA program. For-profit entities, however, may be eligible for COVID-19 assistance through the Small Business Administration (SBA). Eligible PA applicants and PA grant Recipients may also contract for-profit entities to perform emergency work. For example, FEMA specified that eligible governments "may contract with medical providers, including private for-profit hospitals, to carry out any eligible activity described in the Eligible Emergency Medical Care Activitiesâ¦." FEMA may then reimburse PA grant Recipients for the federal share of eligible costs incurred during the execution of the work. PA grant Recipients may then reimburse PA Applicants for eligible associated costs. What assistance is available for individuals under the emergency declaration for COVID-19? Individual Assistance (IA) was not authorized by the President's initial emergency declaration for COVID-19. However, IAâCrisis Counseling has been authorized for 10 states pursuant to their major disaster declarations for COVID-19 (for more information, see " What assistance is available to individuals under a major disaster declaration? "). Table A-1 includes a list of the categories of FEMA assistanceâincluding Crisis Counselingâauthorized pursuant to the major disaster declarations for COVID-19, organized by state and territory. What types of assistance for medical care will FEMA reimburse under the Stafford Act declarations for COVID-19? As of March 30, 2020, Stafford Act declarations for COVID-19 authorized FEMA to reimburse only state, territorial, tribal, and local governments and eligible nonprofits for the cost of uninsured emergency medical care. No assistance for individuals' medical costs has been authorized. All major disaster and emergency declarations issued under the Stafford Act as of March 30, 2020, authorized PA Category BâEmergency Protective Measures, through which FEMA may reimburse eligible state, territorial, tribal, and local governmental entities and eligible private nonprofit entities for the cost of uninsured emergency medical care directly related to COVID-19. Per Stafford Act Section 312, FEMA may not duplicate assistance provided by other entities, including the Department of Health and Human Services (HHS) or private medical insurers. FEMA may only reimburse medical care that is required as a result of COVID-19, and that eliminates or lessens immediate threats to life, public health, or safety. Typically, emergency medical care costs are eligible for up to 30 days from the date of an emergency or major disaster declaration. In the case of COVID-19, eligible emergency medical care costs are "eligible for the duration of the Public Health Emergency, as determined by HHS." However, the cost of long-term medical treatment is not eligible for reimbursement through PA, including the costs of medical care for COVID-19 patients admitted to a medical facility on an inpatient basis. Also not eligible are the costs of treatment for COVID-19 patients beyond the duration of the Public Health Emergency, and administrative costs associated with the treatment of COVID-19 patients. The HHS Secretary has invoked several public health emergency authorities for the COVID-19 response. Although FEMA's list of authorized medical care does not specify which public health emergency authority is meant in referring to the duration of eligibility, it probably refers to the declaration authority pursuant to Section 319 of the Public Health Service Act. The "Section 319" authority allows the HHS Secretary to carry out a specified set of actions to address public health emergencies, such as expediting or waiving certain administrative requirements that would otherwise apply to federal activities or federally administered grants. The declaration of a Public Health Emergency for COVID-19 was made on January 31, 2020. It is in effect for 90 days, and is expected by many to be renewed and remain in effect for the duration of the response. Table 3 includes the types of emergency medical care necessary to saves lives or protect public health and safety that are listed by FEMA as eligible for PA for COVID-19, as of March 31, 2020. FEMA may determine that other activities undertaken to reduce the threats to life, public health, or safety by COVID-19 are eligible emergency protective measures. To determine eligibility, FEMA's Regional Administrators may require that local, state, or federal officials certify that the work performed was necessary to cope with such threats. What measures must states, tribes, and territories take before FEMA may provide assistance for COVID-19 within their jurisdictions? According to FEMA, all U.S. states, territories, and the District of Columbia, as well as tribes that have received independent emergency declarations for COVID-19, must execute a FEMA-State/Tribal/Territory Agreement (hereinafter FEMA-State Agreement), as appropriate, and execute an applicable emergency plan in order to receive FEMA assistance. FEMA-State Agreements state the understandings, terms, and commitments under which FEMA disaster assistance is to be provided. FEMA-State Agreements describe the emergency or disaster (incident), the incident period, the type and extent of assistance to be made available, the federal and nonfederal cost share, and other terms and conditions of the declaration and provision of assistance. The state, territory, or tribe with an emergency or major disaster declaration becomes the PA grant Recipient and administers PA awards within its jurisdiction. FEMA also requires an Application for Federal Assistance and an update of a Public Assistance Plan before it will provide assistance through the PA program. Recipients may register accounts for all PA Applicants on the PA Grants portal, a FEMA maintained database. Eligible PA Applicants within the jurisdiction may then apply for PA, and awarded projects are tracked in the PA grants database. Can states/tribes request to receive certain kinds of emergency protective measures? FEMA has published guidance "on the types of emergency protective measures that may be eligible under FEMA's Public Assistance Program in accordance with the COVID-19 Emergency Declaration in order to ensure that resource constraints do not inhibit efforts to respond to this unprecedented disaster." The list of eligible emergency protective measures is not exhaustive. Moreover, FEMA stated that In accordance with section 502 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121-5207 (the "Stafford Act"), eligible emergency protective measures taken to respond to the COVID-19 emergency at the direction or guidance of public health officials may be reimbursed under Category B of FEMA's Public Assistance program. FEMA will not duplicate assistance provided by the U.S. Department of Health and Human Services (HHS), to include the Centers for Disease Control and Prevention (CDC), or other federal agencies. FEMA and PA grant Recipients (i.e., the state, territory, or tribe that administers the PA award) both review applications for Public Assistance to determine whether costs, work, and applicants are eligible to receive PA. FEMA may approve or decline requests for assistance (see Table 2 for a list of eligible emergency protective measures for COVID-19). FEMA regulations provide procedures by which an eligible PA Applicant, Subrecipient, or Recipient "may appeal any determination previously made related to an application for or the provision of Federal assistance." May applicants receive PA for management and disposal of medical waste and human remains? PA for disposal of medical waste and interment of human remains is included in eligible work authorized for all jurisdictions under PA Category BâEmergency Protective Measures. How long does it take to receive emergency assistance? In the case of COVID-19, FEMA introduced streamlined procedures in an effort to expedite the delivery of PA emergency assistance. According to FEMA, "[f]unding is immediately available should state, tribal, territorial or local officials request expedited assistance." On March 21, 2020, FEMA reported that the agency had obligated over $100 million in 24 hours for awards authorized under the March 13, 2020 emergency declarations for COVID-19 authorized under the Stafford Act. Generally, the time elapsed during delivery of PA emergency assistance will vary by state, incident, applicant, and project. A number of different factors involved in the PA application and reimbursement process affect the delivery of PA. Relevant factors include, but are not limited to, the scope of the project and the time required for the performance of eligible work. FEMA may obligate and disburse funds for small projects (those up to $131,100 in FY2020) upon the approval of a project worksheet, the form FEMA uses to document the details of the Applicant's work and costs claimed. For large projects (those equal to or greater than $131,100 in FY2020), FEMA may obligate funds to the PA grant Recipient upon the approval of a project worksheet. Applicants may request reimbursement for work completed from the PA grant Recipient. Can declarations be amended to provide additional types of assistance? After the President declares an emergency or major disaster, the governor or chief executive may request that the declaration be amended to include additional types of assistance. FEMA can approve such a request. It is not uncommon to authorize additional types of assistance subsequent to a presidential declaration. If FEMA denies a requested amendment, the governor or chief executive may appeal the decision in writing. The request and its justification must be submitted to the Assistant Administrator for the Disaster Assistance Directorate through the appropriate FEMA Regional Administrator for the FEMA region in which the state, territory, or tribe is located. The appeal is a "one-time request for reconsideration"âFEMA's determination on the appeal is final. Can the federal cost share be adjusted? The President has the authority to adjust the federal share of Public Assistance programs. The federal cost share may be increased at FEMA's recommendation when requested by a state, territory, or tribe. The federal share is set at 75% for eligible emergency protective measures performed by states pursuant to the Stafford Act declarations for COVID-19 (authorized under Stafford Act Section 502 for the emergency declarations, and Section 403 for the major disaster declarations). A state may also receive a loan or advance to cover the nonfederal share (i.e., the portion of the costs not borne by the federal government) in certain extraordinary situations. Specifically, Stafford Act Section 319 authorizes the President to either lend or advance the nonfederal share to an eligible Applicant or a state. This may be done whenâ (1) the State is unable to assume its financial responsibility under such cost-sharing provisionsâ (A) with respect to concurrent, multiple major disasters in a jurisdiction, or (B) after incurring extraordinary costs as a result of a particular disaster; and (2) the damages caused by such disasters or disaster are so overwhelming and severe that it is not possible for the applicant or the State to assume immediately their financial responsibility under this chapter. Any loan or advance must be repaid with interest. FEMA's regulations, as a condition for making such a loan, require that the state or eligible Applicant not be delinquent in payment of any debts to FEMA. If the governor's request for an advance is denied, the governor may appeal the decision in writing. As with other appeals of federal decisions regarding assistance provided pursuant to a disaster declaration, this is a one-time request for reconsideration. Congress has, on occasion, adjusted the federal share through legislation. For example, Section 4501 of the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 ( P.L. 110-28 ) authorized 100% federal share for Public Assistance and Individual Assistance for specific states following Hurricanes Katrina, Wilma, Dennis, and Rita. What is Major Disaster Assistance? Different types of federal assistance are available pursuant to each type of declaration, with major disaster declarations providing more forms of assistance than emergency declarations. As of April 22, 2020, the President had approved major disaster declaration requests for all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands for COVID-19. The specific types of assistance that may be available under a major disaster declaration are listed in Table 1 . Additionally, Table 4 lists the categories of assistance and the Stafford Act section under which they are authorized. When the President makes a major disaster declaration under the Stafford Act, states, tribes, and local governments, as well as certain private nonprofit organizations, may receive reimbursement through Public Assistance (PA) for "emergency work" undertaken to save lives, protect property, public health, and safety, and lessen or avert the threat of a catastrophe, or for "permanent work" undertaken to repair, restore, reconstruct, or replace disaster-damaged public and eligible private nonprofit facilities. As noted previously, most assistance under the Stafford Act related to public health incidents has been delivered through PA Category BâEmergency Protective Measures, including emergency shelter and medicine, hazard communication, and provision and distribution of necessities. Individual Assistance (IA) provides aid to affected individuals and households. If a major disaster is declared, the forms of IA that may be authorized include assistance for housing and for other needs assistance through the Individuals and Households Program; crisis counseling; disaster unemployment assistance; disaster legal services; and disaster case management services. Additionally, pursuant to a major disaster declaration the Hazard Mitigation Grant Program (HMGP) may be authorized. The HMGP funds mitigation and resiliency projects, typically across the entire state or territory. State, territorial, tribal, and local governments, as well as certain private nonprofit organizations, may apply for measures that reduce loss of life or property in future disasters or emergencies. As of April 22, 2020, FEMA reported that all requests for Hazard Mitigation Assistance through the Hazard Mitigation Grant Program (HMGP) for COVID-19 are under review. What assistance is available for states, territories, and tribes under a major disaster declaration for COVID-19? Major disaster declarations issued as of April 22, 2020 for COVID-19 have all authorized Public Assistance (PA) Category BâEmergency Protective Measures. Major disaster declarations issued for some states also authorized Individual Assistance through the Crisis Counseling Program. Table A-1 includes a list of the categories of FEMA assistance authorized pursuant to the major disaster declarations for COVID-19, organized by state and territory. Major disaster declarations may authorize Hazard Mitigation Assistance through the Hazard Mitigation Grant Program (HMGP). As of April 22, 2020, FEMA reported that all requests for Hazard Mitigation Assistance through the Hazard Mitigation Grant Program (HMGP) for COVID-19 are under review. States, tribes, or territories may request that major disaster declarations be amended to include additional forms of assistance or increase the federal cost-share for PA above 75% (see " Can declarations be amended to provide additional types of assistance? " and " Can the federal cost share be adjusted? "). What assistance is available for private nonprofit organizations and businesses under a major disaster declaration? Certain private nonprofit organizations may be eligible for reimbursement for work performed for eligible emergency protective measures. Eligible PNPs may apply for PA as Applicants or may be contracted by other primary PA grant Recipients or Applicants to perform eligible work. Businesses are not eligible for assistance authorized under the Stafford Act. PNPs may be eligible for PA if they provide "critical services" or non-critical, "essential" services available to the general public. PNPs providing critical services include educational, utility, irrigation, emergency, medical, rehabilitational, and temporary or permanent custodial care facilities. PNPs providing non-critical but essential services include, but are not limited to, community centers, libraries, homeless shelters, food banks, broadcasting facilities, houses of worship, senior citizen centers, rehabilitation facilities, facilities that provide health and safety services of a governmental nature, and shelter workshops. Religiously affiliated PNPs are eligible but must meet the same eligibility criteria of other PNPs. For-profit entities are not eligible to apply directly for public assistance as authorized under the Stafford Act. However, eligible PA applicants and PA grant Recipients may contract with for-profit entities to perform emergency work. FEMA may then reimburse PA grant Recipients for the federal share of eligible costs incurred during the execution of the work, and PA grant Recipients may then reimburse PA Applicants for eligible associated costs. For-profit entities may also be eligible for SBA COVID-19 assistance. What assistance is available to individuals under a major disaster declaration? As of April 22, 2020, the FEMA Crisis Counseling Assistance and Training Program (CCP) is the only form of Individual Assistance that has been authorized for some states pursuant to their major disaster declarations for COVID-19. IA-CCP was not authorized for every state that received a major disaster declaration; nor were the territories of the Commonwealth of Puerto Rico, the U.S. Virgin Islands, American Samoa, the Commonwealth of the Northern Mariana Islands, or Guam authorized to receive IA-CCP. Table A-1 includes a list of the categories of FEMA assistance authorized pursuant to the major disaster declarations for COVID-19, organized by state and territory. The CCP provides financial assistance to state, territorial, tribal, and local government agencies through a grant or cooperative agreement, which allows them to either provide or contract for crisis counseling services. The crisis counseling services are intended to assist disaster survivors "to prevent or mitigate adverse psychological effects caused or aggravated by a major disaster." FEMA operates the CCP with the Substance Abuse and Mental Health Services Administration (SAMHSA) within the Department of Health and Human Services (HHS). An emergency declaration or a major disaster declaration may be amended to allow for additional types of IA to be authorized (see Table 1 for a list of IA programs). The governor may request that the declaration be amended to include additional types of assistance. FEMA can approve a request for additional forms of assistance after a presidential declaration. If a governor of an affected state requested types of IA be authorized in their major disaster declaration request, and those forms of IA were not authorized, the governor may appeal the decision in writing (if a request to amend a declaration to add types of IA is denied, that decision may also be appealed). Although the CCP is the only form of IA authorized to date, individual relief has been provided through other sources. For example, the supplemental appropriations acts for COVID-19 address some of the other unmet needs of individuals (e.g., Section 2102 of the CARES Act ( P.L. 116-136 ) provides pandemic unemployment assistance). How do applicants receive funds through the Public Assistance program? FEMA introduced procedures the agency says are designed to simplify the PA application process for COVID-19 response work. State, territories, and tribes that have received emergency declarations or major disaster declarations for COVID-19 are PA grant Recipients, which administer PA awards in their jurisdictions. Prior to receiving funding, PA grant Recipients must execute FEMA-State/Tribal/Territorial Agreements, submit federal grant applications, and update Recipient Public Assistance Administrative Plans (see " What measures must states, tribes, and territories take before FEMA may provide assistance for COVID-19 within their jurisdictions? "). Eligible applicants may apply for funding through the Recipient's PA award. FEMA generally refers to PA Applicants as any entity that is responsible for PA-eligible work. Applicants may be state, tribal, territorial, and local governments, as well as eligible private nonprofits. For example, the Texas Department of State Health Services applied for PA funds for COVID-19 response as a PA Applicant. Those funds were administered by the state of Texas as the PA grant Recipient. As the PA Recipient, the state of Texas also administered funds through its PA award for state and local PA Applicants including the Texas Division of Emergency Management, Harris County, and the Texas Military Department. To receive PA funds, Applicants may submit a request for grant funds, a project worksheet describing the details of the work and costs claimed, and supporting documentation though the PA Grants Portal. FEMA and the PA grant Recipient evaluate these documents for eligibility and reasonableness. Once a project worksheet is approved, Applicants may receive reimbursement for eligible costs incurred while executing eligible emergency protective measures. FEMA's fact sheet on PA Simplified Application procedures for COVID-19 notes that expedited assistance may be available in certain cases. When expedited assistance is approved for large projects (in FY2020, projects over $131,100), FEMA obligates 50% of the total expected costs as soon as the project worksheet is approved, and the PA Applicant may be reimbursed at that time. The remaining federal share may be reimbursed once the Applicant submits documentation of actual costs incurred while performing eligible work. FEMA has provided expedited PA for multiple COVID-19 response efforts. How do applicants receive financial or direct assistance through the Individual Assistance program? The FEMA Crisis Counseling Assistance and Training Program (CCP) is the only form of IA that has been authorized for some states, as of April 22, 2020 (see Table A-1 for the list of states that have been authorized for Crisis Counseling). FEMA operates the CCP with the Substance Abuse and Mental Health Services Administration (SAMHSA) within the Department of Health and Human Services (HHS). Local, state, territorial, or tribal governments may apply for a grant to administer the CCP, or may contract with local mental health service providers. The CCP supports crisis counseling services for disaster survivors, and disaster survivors receive the assistance for free. Generally, the CCP is designed to connect individuals with community resources. CCP services may be advertised to disaster survivors through media outlets, websites, community events, etc. If other forms of IA are authorized pursuant to a major disaster declaration for COVID-19, those assistance programs would include different application requirements and processes. For example, if the Individuals and Households Program (IHP) is authorized, applicants in a declared disaster area may register for FEMA IA and Small Business Administration (SBA) disaster loan assistance. Individuals and households can register for assistance online, by telephone, or in-person at a Disaster Recovery Center (DRC). Individuals and households generally have 60 days from the date of a declaration to apply for FEMA IHP assistance. Funding for Stafford Act Declarations The following questions relate to the funding sources for the federal assistance under the Stafford Act that may supplement state, tribal, and local response efforts for COVID-19. Where does funding for Stafford Act assistance come from? Many forms of assistance made available pursuant to a Stafford Act declaration are funded through the Disaster Relief Fund (DRF), which is the primary source of funding for the federal government's domestic general disaster relief programs. The DRF is managed by FEMA, but as a funding structure, it predates both FEMA and the Stafford Act, having first been funded in 1948. Is there enough funding in the DRF for COVID-19? As a result of prior-year appropriations to fund long-term recovery work from previous disasters, the DRF had about $42.6 billion in unobligated balances as of the beginning of March 2020. Division B of the CARES Act ( P.L. 116-136 ), included $45 billion more for the DRF. This put the balance of funding in the DRF at its highest level in history. DRF resources are available for past, current, and future incidents. However, the majority of its funding is specifically set aside for the costs of major disasters. $41.6 billion of what was in the DRF was specifically for the costs of major disasters, and roughly $600 million was potentially available for emergencies. Of the funding provided in the CARES Act for the DRF, $25 billion was for major disasters and $15 billion was for any Stafford Act costs, including both emergency declarations and major disasters. It is not clear what the total draw on the DRF will be, since the pandemic is an evolving situation, there are other federal programs providing resources, and there is no precedent for using the Stafford Act to respond to a public health crisis. Is DRF funding set aside for COVID-19? DRF appropriations are not provided for specific emergencies or disasters; there is no COVID-19 account within the DRF. The most recent iterations of the appropriations bill text for the DRF indicate the funds are provided for the "necessary expenses in carrying out the Robert T. Stafford Disaster Relief and Emergency Assistance Act," thus covering all past and future disaster and emergency declarations. Previous versions of the appropriations language going back to 1950 also referenced the legislation authorizing general disaster relief rather than targeting specific disasters. On a number of occasions, specific disasters have been mentioned in the appropriation, but funding was not specifically directed to one disaster over others. While many disaster supplemental appropriations bills are associated with a specific incident or incidentsâsuch as P.L. 113-2 , "the Sandy Supplemental"âthe language in such acts does not limit the use of the supplemental appropriations to specific incidents. It provides funding "for major disasters declared pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act." This is also the case with the funding provided in Division B of the CARES Act. The DRF supplemental appropriation itself includes no incident-specific direction, or reference to COVID-19. While one of the general provisions of the law states that the funds provided in the act "may only be used to prevent, prepare for, and respond to coronavirus," the last subsection of that general provision indicates that restriction does not apply to the title that included the DRF appropriation. References Additional sources of assistance may be available to support the nation's response to and recovery from the COVID-19 pandemic. CRS has developed products on various topics related to the COVID-19 pandemic, including global issues, public health, economic impacts on individuals, impacts on business and the U.S. economy, executive branch response, congressional response and legislation, and legal analysis. The CRS COVID-19 resources are available at https://www.crs.gov/resources/coronavirus-disease-2019 . Some select products CRS has developed related to the COVID-19 pandemic and Stafford Act assistance programs are included below. For more information on the President's declarations under the Stafford Act for COVID-19, see CRS Insight IN11264, Presidential Declarations of Emergency for COVID-19: NEA and Stafford Act , by L. Elaine Halchin and Elizabeth M. Webster; CRS Insight IN11251, The Stafford Act Emergency Declaration for COVID-19 , by Erica A. Lee, Bruce R. Lindsay, and Elizabeth M. Webster; and CRS Insight IN11229, Stafford Act Assistance for Public Health Incidents , by Bruce R. Lindsay and Erica A. Lee. Stafford Act major disaster declarations for COVID-19 will automatically authorize Small Business Administration (SBA) Economic Injury Disaster Loans (EIDL) for businesses in declared counties and contiguous counties. For more information, see CRS Report R46284, COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options , by Robert Jay Dilger, Bruce R. Lindsay, and Sean Lowry For additional information about relief and assistance resources for small businesses, see CRS Insight IN11301, Small Businesses and COVID-19: Relief and Assistance Resources , by Maria Kreiser. For additional information about the actions taken by the U.S. federal government to quell the introduction and spread of COVID-19 in the United States, see CRS Report R46219, Overview of U.S. Domestic Response to Coronavirus Disease 2019 (COVID-19) , coordinated by Sarah A. Lister and Kavya Sekar. Appendix A. COVID-19 Approved Major Disaster Declarations and Authorized Assistance The following information is current as of April 22, 2020. Public Assistance Category BâEmergency Protective Measures has been authorized for all states and territories. Ten states have been authorized to receive Individual AssistanceâCrisis Counseling Assistance and Training Program (CCP) (referred to in Table A-1 as "Crisis Counseling"). Appendix B. Example of Emergency Declarations for the Same Incident Stafford Act emergencies have been declared for different states, territories, and tribes for the same incident. For example, the states of Florida, Georgia, South Carolina, and North Carolina, the U.S. Virgin Islands, and the Florida Seminole Tribe of Florida all received emergency declarations for Hurricane Dorian in 2019. The incident period and declaration date for the emergency declarations varied by state, territory, and tribe. This information is captured in Table B-1 . Summary:	null	96	47,825	47,827	47,827	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction On March 13, 2020, President Donald J. Trump declared an emergency under Section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act; 42 U.S.C. Â§5191(b)) in response to coronavirus disease 2019 (COVID-19). The President's emergency declaration authorized assistance for COVID-19 response efforts for all U.S. states, territories, tribes, and the District of Columbia in accordance with Stafford Act Section 502. The emergency declaration authorized the Federal Emergency Management Agency's (FEMA's) Public Assistance (PA) program, which provides direct and financial assistance for emergency protective measures. The President's March 13, 2020 emergency declaration letter to the Acting Secretary of the Department of Homeland Security, the Secretary of the Department of Treasury, the Secretary of the Department of Health and Human Services, and the Administrator of the Federal Emergency Management Agency, stated that the President "believe[s] that the disaster is of such severity and magnitude nationwide that requests for a declaration of a major disaster ... may be appropriate." As of March 20, 2020, the President began approving major disaster declaration requests under the Stafford Act. As of April 22, 2020, the President had approved major disaster declaration requests for all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. This report provides answers to frequently asked questions (FAQs) regarding: Stafford Act declarations, including legal authorities, limitations on assistance, and other information related to the declaration request process; types of assistance available to state, territorial, and tribal governments, private nonprofit organizations, private entities, and individuals and households pursuant to the Stafford Act emergency and major disaster declarations for COVID-19; the Disaster Relief Fund (DRF), the source of funding for the Stafford Act emergency and major disaster declarations; and additional references. The scope of this report is limited to assistance authorized under the Stafford Act. There are, however, other types of assistance extrinsic to the Stafford Act that are activated by a Stafford declaration. This report does not address these other forms of assistance. Stafford Act Declarations The Stafford Act authorizes the President to issue two types of declarations that could provide federal assistance to states and localities in response to a public health incident, such as an infectious disease outbreak: (1) an "emergency declaration" (authorized under Stafford Act Section 501), or (2) a "major disaster declaration" (authorized under Stafford Act Section 401). The following questions relate to the Stafford Act declarations for COVID-19. The President declared an emergency for COVID-19. Do states, territories, and tribes still need to request a COVID-19 emergency declaration? The President's emergency declaration authorized assistance for COVID-19 response efforts for all U.S. states, territories, tribes, and the District of Columbia; specifically, it authorized FEMA Public Assistance (PA) emergency protective measures. Thus, states, territories, and tribes do not need to request separate emergency declarations in addition to the President's emergency declaration. If, however, a state, territory, or tribe needs supplementary federal assistance, the governor or chief executive may request that the declaration be amended to include additional areas or types of assistance. FEMA can approve a request for additional areas or forms of assistance after a presidential emergency declaration. The assistance provided pursuant to an emergency declaration is limited (see Table 1 , which lists the forms of assistance available pursuant to each type of declaration). If a state, territory, or tribe needs assistance that is only available pursuant to a major disaster declaration, they may submit a major disaster declaration request to the President (through FEMA). Although the President can declare an emergency unilaterally in certain circumstances, a major disaster declaration would need to be requested by state, territory, or tribal governments (see " Why didn't the President declare a national major disaster for COVID-19? "). Does the President have the authority to unilaterally declare an emergency under the Stafford Act? Section 501(b) of the Stafford Act allows the President to unilaterally declare an emergency for certain emergencies involving federal primary responsibility. The President's nationwide emergency declaration for COVID-19 was made under Stafford Act Section 501(b) on the grounds that the entire country is now facing a significant public health emergency ... [and] [o]nly the Federal Government can provide the necessary coordination to address a pandemic of this national size and scope.... It is the preeminent responsibility of the Federal Government to take action to stem a nationwide pandemic that has its origins abroad, which implicates its authority to regulate matters related to interstate matters and foreign commerce and to conduct the foreign relations of the United States. This is the first time a President has unilaterally declared a Stafford Act emergency for a public health incidentâspecifically, an infectious disease outbreak. Unilateral presidential declarations, however, have been made for incidents on a limited scale. Is there a cap on the amount of funding FEMA can spend under an emergency declaration? Although Stafford Act Section 503 sets a statutory "cap" of $5 million on spending for a single emergency, there is an exception. The $5 million limit may be exceeded when the President determines that: (A) continued emergency assistance is immediately required; (B) there is a continuing and immediate risk to lives, property, public health or safety; and (C) necessary assistance will not otherwise be provided on a timely basis. If the $5 million "cap" is exceeded, the President must report to Congress on the "nature and extent of emergency assistance requirements and shall propose additional legislation if necessary." Although the President's emergency declaration for COVID-19 covers the entire nation, each disaster-affected state and the District of Columbia, as well as some tribal governments, received a distinct emergency declaration (i.e., 57 separate emergency declarations). Therefore, it appears that each distinct emergency declaration may count as a "single emergency" for purposes of Stafford Act Section 503 and that the $5 million "cap" is not the nationwide limit on the amount of emergency assistance that FEMA can provide (see Appendix B for an example of a time when different states, territories, and tribes received presidential emergency declarations under the Stafford Act for the same incident). Major disaster declarations do not have a statutory or regulatory spending cap. As of April 22, 2020, all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands have received major disaster declarations for COVID-19. For more information on the funding available for the emergencies and major disasters declared for COVID-19, see the " Funding for Stafford Act Declarations " section. Is the COVID-19 emergency assistance time limited? The federal assistance provided must respond to the effects of the incident warranting an emergency or major disaster declaration "which took place during the incident period or was in anticipation of that incident." The emergency and major disaster declarations for COVID-19 currently list the incident period as "January 20, 2020 and continuing." In previous ongoing disasters, the "continuing" incident period has changed to a set date marking the end of the emergency or major disaster. In the case of COVID-19, the incident period may vary for each state, territorial, and tribal government as the threat of COVID-19 abates. According to federal regulations, FEMA determines the incident period in the FEMA-State Agreement. In May 2016, the agency released a fact sheet on responding to an infectious disease event, which states, "[i]n the event of an emergency declaration, FEMA would determine the incident period in coordination with HHS." The governor of each declared state or territory, or the chief executive for each declared Indian tribal government, must execute a FEMA-State Agreement in order to receive assistance pursuant to their COVID-19 emergency declaration. It is also possible to extend the incident period. Extensions of the incident period, and program extensions and end dates may be announced via news releases on FEMA's website. Why didn't the President declare a national major disaster for COVID-19? Stafford Act Section 401 states "[a]ll requests for a declaration by the President that a major disaster exists shall be made by the Governor of the affected State" or "[t]he Chief Executive of an affected Indian tribal government may submit a request for a declaration by the President that a major disaster exists.... " Although the President is not authorized by the Stafford Act to unilaterally declare a major disaster on behalf of a state, territory, or tribe, the President stated in his emergency declaration letter to the Acting Secretary of the Department of Homeland Security, the Secretary of the Department of Treasury, the Secretary of the Department of Health and Human Services, and the Administrator of the Federal Emergency Management Agency that he "believe[s] that the disaster is of such severity and magnitude nationwide that requests for a declaration of a major disaster ... may be appropriate." As of March 20, 2020, the President began approving major disaster declaration requests under the Stafford Act. As of April 22, 2020, all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands have received major disaster declarations for COVID-19. Have states, territories, and tribes ever received a major disaster declaration for an outbreak of an infectious disease, such as COVID-19? The President started approving major disaster declaration requests for COVID-19 as of March 20, 2020. These declarations are the first major disaster declarations issued under the Stafford Act for an infectious disease outbreak. Does it take a long time to approve a request for a major disaster declaration? The State of New York was the first state to receive a major disaster declaration for COVID-19. According to FEMA's "Daily Operations Briefing for Wednesday, March 18, 2020," New York requested a major disaster declaration on March 17, 2020. The President authorized New York's request on March 20, 2020. Other state requests for a major disaster for COVID-19 have also been processed within days of their submission. FEMA lists the approved presidential major disaster declarations for COVID-19 on the agency's "COVID-19 Disaster Declarations" and "Disasters" webpages. As of April 22, 2020, all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands have received major disaster declarations for COVID-19. Types of Stafford Act Assistance Different types of federal assistance are available pursuant to each type of declaration, with emergency declarations providing more limited forms of assistance than major disaster declarations. Federal assistance made available pursuant to Stafford Act declarations is intended to supplement local efforts to respond to and recover from emergencies and major disasters. Federal assistance may support state, territorial, tribal, and local governments, certain nonprofit organizations, and individuals and households. Table 1 lists the forms of assistance available pursuant to each type of declaration. The following questions relate to the federal response efforts for COVID-19, including assistance available to state, territorial, tribal, and local governments, private nonprofit organizations, private entities, and individuals and households. What is Emergency Declaration Assistance? Emergency declarations authorize some forms of Public Assistance (PA) and Individual Assistance (IA) but the assistance is generally more limited than assistance that is made available under a major disaster declaration. Table 1 lists the forms of assistance available pursuant to an emergency declaration. Emergency declarations often authorize certain forms of PA, which supplement the ability of a state, territory, or tribe to respond to an incident. Emergency declarations may authorize PA "emergency work" undertaken "to save lives, protect property and public health and safety, and lessen or avert the threat of a catastrophe, including precautionary evacuations," per Section 502 of the Stafford Act. FEMA's two categories of PA "emergency work" are debris removal (Category A) and emergency protective measures (Category B). Stafford Act emergency declarations for public health incidents have previously authorized emergency protective measures undertaken to reduce an immediate threat to life, public health, or safety, including emergency shelter and medicine, hazard communication, and provision and distribution of necessities. Individual Assistance, which helps individuals and households respond to post-disaster needs, can also be made available through an emergency declaration. One form of IAâthe Individuals and Households Program (IHP) (authorized under Stafford Act Section 408) may be authorized pursuant to an emergency declaration. What assistance is available for states, territories, and tribes under the emergency declaration for COVID-19? The emergency declarations issued for COVID-19 on March 13, 2020 authorized Public Assistance (PA) in accordance with Section 502 of the Stafford Act. Under this declaration, FEMA may reimburse states, tribes, and territories for costs incurred while performing emergency protective measures. Specifically, the COVID-19 emergency declarations authorized PA Category BâEmergency Protective Measures. States, territories, or tribes will be the PA grant Recipients and administer PA awards. State, territorial, and tribal governments that have received emergency or major disaster declarations may apply to FEMA for funds as PA grant Recipients. Local governments and certain nonprofit entities may apply for funds through the PA grant Recipient. Eligible applicants are to be reimbursed for 75% of eligible costs incurred while performing emergency protective measures. FEMA cannot provide financial assistance for activities that are covered by insurance, or any other source, including activities eligible for financial assistance from the Department of Health and Human Services (HHS). For example, PA applicants cannot receive reimbursement for COVID-19 public health surveillance work or other activities already funded by the HHS Public Health Emergency Preparedness Cooperation Agreement Program. Emergency protective measures encompass a wide range of activities. According to a FEMA news release on the COVID-19 emergency declaration , reimbursable activities may include "activation of State Emergency Operations Centers, National Guard costs, law enforcement and other measures necessary to protect public health and safety." On March 19, 2020, FEMA released a non-exclusive list of eligible emergency protective measures that was later supplemented with a non-exclusive list of eligible emergency medical care. What assistance is available for private nonprofit organizations and businesses under the emergency declaration for COVID-19? Under the Stafford Act, eligible private nonprofit organizations may receive reimbursement for costs incurred while performing eligible emergency protective measures through the PA program. For-profit entities are not eligible applicants for PA. President Trump's emergency declaration for COVID-19 authorized FEMA to reimburse state, territorial, tribal, and local government entities and certain nonprofit organizations (PNPs) for eligible costs incurred while performing emergency protective measures. Under the Stafford Act, certain PNPs may be eligible for PA if they provide "critical services" or non-critical, "essential" services available to the general public. PNPs providing critical services include educational, utility, irrigation, emergency, medical, rehabilitational, and temporary or permanent custodial care facilities. PNPs providing non-critical but essential services include, but are not limited to, community centers, libraries, homeless shelters, food banks, broadcasting facilities, houses of worship, senior citizen centers, rehabilitation facilities, and shelter workshops. Religiously affiliated PNPs must meet the same eligibility criteria as other PNPs. For-profit entities are not eligible to apply for reimbursement through the PA program. For-profit entities, however, may be eligible for COVID-19 assistance through the Small Business Administration (SBA). Eligible PA applicants and PA grant Recipients may also contract for-profit entities to perform emergency work. For example, FEMA specified that eligible governments "may contract with medical providers, including private for-profit hospitals, to carry out any eligible activity described in the Eligible Emergency Medical Care Activitiesâ¦." FEMA may then reimburse PA grant Recipients for the federal share of eligible costs incurred during the execution of the work. PA grant Recipients may then reimburse PA Applicants for eligible associated costs. What assistance is available for individuals under the emergency declaration for COVID-19? Individual Assistance (IA) was not authorized by the President's initial emergency declaration for COVID-19. However, IAâCrisis Counseling has been authorized for 10 states pursuant to their major disaster declarations for COVID-19 (for more information, see " What assistance is available to individuals under a major disaster declaration? "). Table A-1 includes a list of the categories of FEMA assistanceâincluding Crisis Counselingâauthorized pursuant to the major disaster declarations for COVID-19, organized by state and territory. What types of assistance for medical care will FEMA reimburse under the Stafford Act declarations for COVID-19? As of March 30, 2020, Stafford Act declarations for COVID-19 authorized FEMA to reimburse only state, territorial, tribal, and local governments and eligible nonprofits for the cost of uninsured emergency medical care. No assistance for individuals' medical costs has been authorized. All major disaster and emergency declarations issued under the Stafford Act as of March 30, 2020, authorized PA Category BâEmergency Protective Measures, through which FEMA may reimburse eligible state, territorial, tribal, and local governmental entities and eligible private nonprofit entities for the cost of uninsured emergency medical care directly related to COVID-19. Per Stafford Act Section 312, FEMA may not duplicate assistance provided by other entities, including the Department of Health and Human Services (HHS) or private medical insurers. FEMA may only reimburse medical care that is required as a result of COVID-19, and that eliminates or lessens immediate threats to life, public health, or safety. Typically, emergency medical care costs are eligible for up to 30 days from the date of an emergency or major disaster declaration. In the case of COVID-19, eligible emergency medical care costs are "eligible for the duration of the Public Health Emergency, as determined by HHS." However, the cost of long-term medical treatment is not eligible for reimbursement through PA, including the costs of medical care for COVID-19 patients admitted to a medical facility on an inpatient basis. Also not eligible are the costs of treatment for COVID-19 patients beyond the duration of the Public Health Emergency, and administrative costs associated with the treatment of COVID-19 patients. The HHS Secretary has invoked several public health emergency authorities for the COVID-19 response. Although FEMA's list of authorized medical care does not specify which public health emergency authority is meant in referring to the duration of eligibility, it probably refers to the declaration authority pursuant to Section 319 of the Public Health Service Act. The "Section 319" authority allows the HHS Secretary to carry out a specified set of actions to address public health emergencies, such as expediting or waiving certain administrative requirements that would otherwise apply to federal activities or federally administered grants. The declaration of a Public Health Emergency for COVID-19 was made on January 31, 2020. It is in effect for 90 days, and is expected by many to be renewed and remain in effect for the duration of the response. Table 3 includes the types of emergency medical care necessary to saves lives or protect public health and safety that are listed by FEMA as eligible for PA for COVID-19, as of March 31, 2020. FEMA may determine that other activities undertaken to reduce the threats to life, public health, or safety by COVID-19 are eligible emergency protective measures. To determine eligibility, FEMA's Regional Administrators may require that local, state, or federal officials certify that the work performed was necessary to cope with such threats. What measures must states, tribes, and territories take before FEMA may provide assistance for COVID-19 within their jurisdictions? According to FEMA, all U.S. states, territories, and the District of Columbia, as well as tribes that have received independent emergency declarations for COVID-19, must execute a FEMA-State/Tribal/Territory Agreement (hereinafter FEMA-State Agreement), as appropriate, and execute an applicable emergency plan in order to receive FEMA assistance. FEMA-State Agreements state the understandings, terms, and commitments under which FEMA disaster assistance is to be provided. FEMA-State Agreements describe the emergency or disaster (incident), the incident period, the type and extent of assistance to be made available, the federal and nonfederal cost share, and other terms and conditions of the declaration and provision of assistance. The state, territory, or tribe with an emergency or major disaster declaration becomes the PA grant Recipient and administers PA awards within its jurisdiction. FEMA also requires an Application for Federal Assistance and an update of a Public Assistance Plan before it will provide assistance through the PA program. Recipients may register accounts for all PA Applicants on the PA Grants portal, a FEMA maintained database. Eligible PA Applicants within the jurisdiction may then apply for PA, and awarded projects are tracked in the PA grants database. Can states/tribes request to receive certain kinds of emergency protective measures? FEMA has published guidance "on the types of emergency protective measures that may be eligible under FEMA's Public Assistance Program in accordance with the COVID-19 Emergency Declaration in order to ensure that resource constraints do not inhibit efforts to respond to this unprecedented disaster." The list of eligible emergency protective measures is not exhaustive. Moreover, FEMA stated that In accordance with section 502 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121-5207 (the "Stafford Act"), eligible emergency protective measures taken to respond to the COVID-19 emergency at the direction or guidance of public health officials may be reimbursed under Category B of FEMA's Public Assistance program. FEMA will not duplicate assistance provided by the U.S. Department of Health and Human Services (HHS), to include the Centers for Disease Control and Prevention (CDC), or other federal agencies. FEMA and PA grant Recipients (i.e., the state, territory, or tribe that administers the PA award) both review applications for Public Assistance to determine whether costs, work, and applicants are eligible to receive PA. FEMA may approve or decline requests for assistance (see Table 2 for a list of eligible emergency protective measures for COVID-19). FEMA regulations provide procedures by which an eligible PA Applicant, Subrecipient, or Recipient "may appeal any determination previously made related to an application for or the provision of Federal assistance." May applicants receive PA for management and disposal of medical waste and human remains? PA for disposal of medical waste and interment of human remains is included in eligible work authorized for all jurisdictions under PA Category BâEmergency Protective Measures. How long does it take to receive emergency assistance? In the case of COVID-19, FEMA introduced streamlined procedures in an effort to expedite the delivery of PA emergency assistance. According to FEMA, "[f]unding is immediately available should state, tribal, territorial or local officials request expedited assistance." On March 21, 2020, FEMA reported that the agency had obligated over $100 million in 24 hours for awards authorized under the March 13, 2020 emergency declarations for COVID-19 authorized under the Stafford Act. Generally, the time elapsed during delivery of PA emergency assistance will vary by state, incident, applicant, and project. A number of different factors involved in the PA application and reimbursement process affect the delivery of PA. Relevant factors include, but are not limited to, the scope of the project and the time required for the performance of eligible work. FEMA may obligate and disburse funds for small projects (those up to $131,100 in FY2020) upon the approval of a project worksheet, the form FEMA uses to document the details of the Applicant's work and costs claimed. For large projects (those equal to or greater than $131,100 in FY2020), FEMA may obligate funds to the PA grant Recipient upon the approval of a project worksheet. Applicants may request reimbursement for work completed from the PA grant Recipient. Can declarations be amended to provide additional types of assistance? After the President declares an emergency or major disaster, the governor or chief executive may request that the declaration be amended to include additional types of assistance. FEMA can approve such a request. It is not uncommon to authorize additional types of assistance subsequent to a presidential declaration. If FEMA denies a requested amendment, the governor or chief executive may appeal the decision in writing. The request and its justification must be submitted to the Assistant Administrator for the Disaster Assistance Directorate through the appropriate FEMA Regional Administrator for the FEMA region in which the state, territory, or tribe is located. The appeal is a "one-time request for reconsideration"âFEMA's determination on the appeal is final. Can the federal cost share be adjusted? The President has the authority to adjust the federal share of Public Assistance programs. The federal cost share may be increased at FEMA's recommendation when requested by a state, territory, or tribe. The federal share is set at 75% for eligible emergency protective measures performed by states pursuant to the Stafford Act declarations for COVID-19 (authorized under Stafford Act Section 502 for the emergency declarations, and Section 403 for the major disaster declarations). A state may also receive a loan or advance to cover the nonfederal share (i.e., the portion of the costs not borne by the federal government) in certain extraordinary situations. Specifically, Stafford Act Section 319 authorizes the President to either lend or advance the nonfederal share to an eligible Applicant or a state. This may be done whenâ (1) the State is unable to assume its financial responsibility under such cost-sharing provisionsâ (A) with respect to concurrent, multiple major disasters in a jurisdiction, or (B) after incurring extraordinary costs as a result of a particular disaster; and (2) the damages caused by such disasters or disaster are so overwhelming and severe that it is not possible for the applicant or the State to assume immediately their financial responsibility under this chapter. Any loan or advance must be repaid with interest. FEMA's regulations, as a condition for making such a loan, require that the state or eligible Applicant not be delinquent in payment of any debts to FEMA. If the governor's request for an advance is denied, the governor may appeal the decision in writing. As with other appeals of federal decisions regarding assistance provided pursuant to a disaster declaration, this is a one-time request for reconsideration. Congress has, on occasion, adjusted the federal share through legislation. For example, Section 4501 of the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 ( P.L. 110-28 ) authorized 100% federal share for Public Assistance and Individual Assistance for specific states following Hurricanes Katrina, Wilma, Dennis, and Rita. What is Major Disaster Assistance? Different types of federal assistance are available pursuant to each type of declaration, with major disaster declarations providing more forms of assistance than emergency declarations. As of April 22, 2020, the President had approved major disaster declaration requests for all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands for COVID-19. The specific types of assistance that may be available under a major disaster declaration are listed in Table 1 . Additionally, Table 4 lists the categories of assistance and the Stafford Act section under which they are authorized. When the President makes a major disaster declaration under the Stafford Act, states, tribes, and local governments, as well as certain private nonprofit organizations, may receive reimbursement through Public Assistance (PA) for "emergency work" undertaken to save lives, protect property, public health, and safety, and lessen or avert the threat of a catastrophe, or for "permanent work" undertaken to repair, restore, reconstruct, or replace disaster-damaged public and eligible private nonprofit facilities. As noted previously, most assistance under the Stafford Act related to public health incidents has been delivered through PA Category BâEmergency Protective Measures, including emergency shelter and medicine, hazard communication, and provision and distribution of necessities. Individual Assistance (IA) provides aid to affected individuals and households. If a major disaster is declared, the forms of IA that may be authorized include assistance for housing and for other needs assistance through the Individuals and Households Program; crisis counseling; disaster unemployment assistance; disaster legal services; and disaster case management services. Additionally, pursuant to a major disaster declaration the Hazard Mitigation Grant Program (HMGP) may be authorized. The HMGP funds mitigation and resiliency projects, typically across the entire state or territory. State, territorial, tribal, and local governments, as well as certain private nonprofit organizations, may apply for measures that reduce loss of life or property in future disasters or emergencies. As of April 22, 2020, FEMA reported that all requests for Hazard Mitigation Assistance through the Hazard Mitigation Grant Program (HMGP) for COVID-19 are under review. What assistance is available for states, territories, and tribes under a major disaster declaration for COVID-19? Major disaster declarations issued as of April 22, 2020 for COVID-19 have all authorized Public Assistance (PA) Category BâEmergency Protective Measures. Major disaster declarations issued for some states also authorized Individual Assistance through the Crisis Counseling Program. Table A-1 includes a list of the categories of FEMA assistance authorized pursuant to the major disaster declarations for COVID-19, organized by state and territory. Major disaster declarations may authorize Hazard Mitigation Assistance through the Hazard Mitigation Grant Program (HMGP). As of April 22, 2020, FEMA reported that all requests for Hazard Mitigation Assistance through the Hazard Mitigation Grant Program (HMGP) for COVID-19 are under review. States, tribes, or territories may request that major disaster declarations be amended to include additional forms of assistance or increase the federal cost-share for PA above 75% (see " Can declarations be amended to provide additional types of assistance? " and " Can the federal cost share be adjusted? "). What assistance is available for private nonprofit organizations and businesses under a major disaster declaration? Certain private nonprofit organizations may be eligible for reimbursement for work performed for eligible emergency protective measures. Eligible PNPs may apply for PA as Applicants or may be contracted by other primary PA grant Recipients or Applicants to perform eligible work. Businesses are not eligible for assistance authorized under the Stafford Act. PNPs may be eligible for PA if they provide "critical services" or non-critical, "essential" services available to the general public. PNPs providing critical services include educational, utility, irrigation, emergency, medical, rehabilitational, and temporary or permanent custodial care facilities. PNPs providing non-critical but essential services include, but are not limited to, community centers, libraries, homeless shelters, food banks, broadcasting facilities, houses of worship, senior citizen centers, rehabilitation facilities, facilities that provide health and safety services of a governmental nature, and shelter workshops. Religiously affiliated PNPs are eligible but must meet the same eligibility criteria of other PNPs. For-profit entities are not eligible to apply directly for public assistance as authorized under the Stafford Act. However, eligible PA applicants and PA grant Recipients may contract with for-profit entities to perform emergency work. FEMA may then reimburse PA grant Recipients for the federal share of eligible costs incurred during the execution of the work, and PA grant Recipients may then reimburse PA Applicants for eligible associated costs. For-profit entities may also be eligible for SBA COVID-19 assistance. What assistance is available to individuals under a major disaster declaration? As of April 22, 2020, the FEMA Crisis Counseling Assistance and Training Program (CCP) is the only form of Individual Assistance that has been authorized for some states pursuant to their major disaster declarations for COVID-19. IA-CCP was not authorized for every state that received a major disaster declaration; nor were the territories of the Commonwealth of Puerto Rico, the U.S. Virgin Islands, American Samoa, the Commonwealth of the Northern Mariana Islands, or Guam authorized to receive IA-CCP. Table A-1 includes a list of the categories of FEMA assistance authorized pursuant to the major disaster declarations for COVID-19, organized by state and territory. The CCP provides financial assistance to state, territorial, tribal, and local government agencies through a grant or cooperative agreement, which allows them to either provide or contract for crisis counseling services. The crisis counseling services are intended to assist disaster survivors "to prevent or mitigate adverse psychological effects caused or aggravated by a major disaster." FEMA operates the CCP with the Substance Abuse and Mental Health Services Administration (SAMHSA) within the Department of Health and Human Services (HHS). An emergency declaration or a major disaster declaration may be amended to allow for additional types of IA to be authorized (see Table 1 for a list of IA programs). The governor may request that the declaration be amended to include additional types of assistance. FEMA can approve a request for additional forms of assistance after a presidential declaration. If a governor of an affected state requested types of IA be authorized in their major disaster declaration request, and those forms of IA were not authorized, the governor may appeal the decision in writing (if a request to amend a declaration to add types of IA is denied, that decision may also be appealed). Although the CCP is the only form of IA authorized to date, individual relief has been provided through other sources. For example, the supplemental appropriations acts for COVID-19 address some of the other unmet needs of individuals (e.g., Section 2102 of the CARES Act ( P.L. 116-136 ) provides pandemic unemployment assistance). How do applicants receive funds through the Public Assistance program? FEMA introduced procedures the agency says are designed to simplify the PA application process for COVID-19 response work. State, territories, and tribes that have received emergency declarations or major disaster declarations for COVID-19 are PA grant Recipients, which administer PA awards in their jurisdictions. Prior to receiving funding, PA grant Recipients must execute FEMA-State/Tribal/Territorial Agreements, submit federal grant applications, and update Recipient Public Assistance Administrative Plans (see " What measures must states, tribes, and territories take before FEMA may provide assistance for COVID-19 within their jurisdictions? "). Eligible applicants may apply for funding through the Recipient's PA award. FEMA generally refers to PA Applicants as any entity that is responsible for PA-eligible work. Applicants may be state, tribal, territorial, and local governments, as well as eligible private nonprofits. For example, the Texas Department of State Health Services applied for PA funds for COVID-19 response as a PA Applicant. Those funds were administered by the state of Texas as the PA grant Recipient. As the PA Recipient, the state of Texas also administered funds through its PA award for state and local PA Applicants including the Texas Division of Emergency Management, Harris County, and the Texas Military Department. To receive PA funds, Applicants may submit a request for grant funds, a project worksheet describing the details of the work and costs claimed, and supporting documentation though the PA Grants Portal. FEMA and the PA grant Recipient evaluate these documents for eligibility and reasonableness. Once a project worksheet is approved, Applicants may receive reimbursement for eligible costs incurred while executing eligible emergency protective measures. FEMA's fact sheet on PA Simplified Application procedures for COVID-19 notes that expedited assistance may be available in certain cases. When expedited assistance is approved for large projects (in FY2020, projects over $131,100), FEMA obligates 50% of the total expected costs as soon as the project worksheet is approved, and the PA Applicant may be reimbursed at that time. The remaining federal share may be reimbursed once the Applicant submits documentation of actual costs incurred while performing eligible work. FEMA has provided expedited PA for multiple COVID-19 response efforts. How do applicants receive financial or direct assistance through the Individual Assistance program? The FEMA Crisis Counseling Assistance and Training Program (CCP) is the only form of IA that has been authorized for some states, as of April 22, 2020 (see Table A-1 for the list of states that have been authorized for Crisis Counseling). FEMA operates the CCP with the Substance Abuse and Mental Health Services Administration (SAMHSA) within the Department of Health and Human Services (HHS). Local, state, territorial, or tribal governments may apply for a grant to administer the CCP, or may contract with local mental health service providers. The CCP supports crisis counseling services for disaster survivors, and disaster survivors receive the assistance for free. Generally, the CCP is designed to connect individuals with community resources. CCP services may be advertised to disaster survivors through media outlets, websites, community events, etc. If other forms of IA are authorized pursuant to a major disaster declaration for COVID-19, those assistance programs would include different application requirements and processes. For example, if the Individuals and Households Program (IHP) is authorized, applicants in a declared disaster area may register for FEMA IA and Small Business Administration (SBA) disaster loan assistance. Individuals and households can register for assistance online, by telephone, or in-person at a Disaster Recovery Center (DRC). Individuals and households generally have 60 days from the date of a declaration to apply for FEMA IHP assistance. Funding for Stafford Act Declarations The following questions relate to the funding sources for the federal assistance under the Stafford Act that may supplement state, tribal, and local response efforts for COVID-19. Where does funding for Stafford Act assistance come from? Many forms of assistance made available pursuant to a Stafford Act declaration are funded through the Disaster Relief Fund (DRF), which is the primary source of funding for the federal government's domestic general disaster relief programs. The DRF is managed by FEMA, but as a funding structure, it predates both FEMA and the Stafford Act, having first been funded in 1948. Is there enough funding in the DRF for COVID-19? As a result of prior-year appropriations to fund long-term recovery work from previous disasters, the DRF had about $42.6 billion in unobligated balances as of the beginning of March 2020. Division B of the CARES Act ( P.L. 116-136 ), included $45 billion more for the DRF. This put the balance of funding in the DRF at its highest level in history. DRF resources are available for past, current, and future incidents. However, the majority of its funding is specifically set aside for the costs of major disasters. $41.6 billion of what was in the DRF was specifically for the costs of major disasters, and roughly $600 million was potentially available for emergencies. Of the funding provided in the CARES Act for the DRF, $25 billion was for major disasters and $15 billion was for any Stafford Act costs, including both emergency declarations and major disasters. It is not clear what the total draw on the DRF will be, since the pandemic is an evolving situation, there are other federal programs providing resources, and there is no precedent for using the Stafford Act to respond to a public health crisis. Is DRF funding set aside for COVID-19? DRF appropriations are not provided for specific emergencies or disasters; there is no COVID-19 account within the DRF. The most recent iterations of the appropriations bill text for the DRF indicate the funds are provided for the "necessary expenses in carrying out the Robert T. Stafford Disaster Relief and Emergency Assistance Act," thus covering all past and future disaster and emergency declarations. Previous versions of the appropriations language going back to 1950 also referenced the legislation authorizing general disaster relief rather than targeting specific disasters. On a number of occasions, specific disasters have been mentioned in the appropriation, but funding was not specifically directed to one disaster over others. While many disaster supplemental appropriations bills are associated with a specific incident or incidentsâsuch as P.L. 113-2 , "the Sandy Supplemental"âthe language in such acts does not limit the use of the supplemental appropriations to specific incidents. It provides funding "for major disasters declared pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act." This is also the case with the funding provided in Division B of the CARES Act. The DRF supplemental appropriation itself includes no incident-specific direction, or reference to COVID-19. While one of the general provisions of the law states that the funds provided in the act "may only be used to prevent, prepare for, and respond to coronavirus," the last subsection of that general provision indicates that restriction does not apply to the title that included the DRF appropriation. References Additional sources of assistance may be available to support the nation's response to and recovery from the COVID-19 pandemic. CRS has developed products on various topics related to the COVID-19 pandemic, including global issues, public health, economic impacts on individuals, impacts on business and the U.S. economy, executive branch response, congressional response and legislation, and legal analysis. The CRS COVID-19 resources are available at https://www.crs.gov/resources/coronavirus-disease-2019 . Some select products CRS has developed related to the COVID-19 pandemic and Stafford Act assistance programs are included below. For more information on the President's declarations under the Stafford Act for COVID-19, see CRS Insight IN11264, Presidential Declarations of Emergency for COVID-19: NEA and Stafford Act , by L. Elaine Halchin and Elizabeth M. Webster; CRS Insight IN11251, The Stafford Act Emergency Declaration for COVID-19 , by Erica A. Lee, Bruce R. Lindsay, and Elizabeth M. Webster; and CRS Insight IN11229, Stafford Act Assistance for Public Health Incidents , by Bruce R. Lindsay and Erica A. Lee. Stafford Act major disaster declarations for COVID-19 will automatically authorize Small Business Administration (SBA) Economic Injury Disaster Loans (EIDL) for businesses in declared counties and contiguous counties. For more information, see CRS Report R46284, COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options , by Robert Jay Dilger, Bruce R. Lindsay, and Sean Lowry For additional information about relief and assistance resources for small businesses, see CRS Insight IN11301, Small Businesses and COVID-19: Relief and Assistance Resources , by Maria Kreiser. For additional information about the actions taken by the U.S. federal government to quell the introduction and spread of COVID-19 in the United States, see CRS Report R46219, Overview of U.S. Domestic Response to Coronavirus Disease 2019 (COVID-19) , coordinated by Sarah A. Lister and Kavya Sekar. Appendix A. COVID-19 Approved Major Disaster Declarations and Authorized Assistance The following information is current as of April 22, 2020. Public Assistance Category BâEmergency Protective Measures has been authorized for all states and territories. Ten states have been authorized to receive Individual AssistanceâCrisis Counseling Assistance and Training Program (CCP) (referred to in Table A-1 as "Crisis Counseling"). Appendix B. Example of Emergency Declarations for the Same Incident Stafford Act emergencies have been declared for different states, territories, and tribes for the same incident. For example, the states of Florida, Georgia, South Carolina, and North Carolina, the U.S. Virgin Islands, and the Florida Seminole Tribe of Florida all received emergency declarations for Hurricane Dorian in 2019. The incident period and declaration date for the emergency declarations varied by state, territory, and tribe. This information is captured in Table B-1 .	Summary:	gov_report	1,024	null	11
crs_R46180	crs_R46180_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction This report analyzes the effects of historic wet conditions during the 2019 growing season on major U.S. field crops, primarily corn and soybeans. These effects include record acres prevented from being planted, widespread delays in planting and harvesting of the corn and soybean crops, large crop insurance indemnity payments due to prevented plantings and weather-related yield losses, and additional ad hoc payments announced for producers experiencing both trade damage and losses from prevented planting. This report focuses on corn and soybeansâthe two largest commercial crops grown in the United States in terms of number of producers, cultivated area, volume produced, and value of production. Together, they account for 54% of land planted to major field crops since 2010. They are critical inputs for several sectors, including the livestock, biofuels, food processing, and export sectors. As a result, any delay or reduction from expected output for either of these crops can have important implications for market prices and the broader U.S. farm economy. The U.S. Department of Agriculture (USDA) forecasted an increased role of federal support for farm incomes in 2019âincluding $22.4 billion in direct support payments and $10.3 billion in federal crop insurance indemnity payments. Together, the forecast of USDA farm support plus crop insurance indemnities of $32.7 billion represents a 35.3% share of U.S. net farm income $92.5 billion. Since 2010, the federal crop insurance program has emerged as the largest component of the farm safety net in terms of taxpayer outlays, averaging $7.8 billion annually in premium subsidies. While USDA implements the federal crop insurance program, Congress is responsible for authorizing and funding it. The federal crop insurance program is permanently authorized by the Federal Crop Insurance Act of 1980 ( P.L. 96-365 ), as amended (7 U.S.C. Â§1501 et seq. ) and receives mandatory funding. Each of the past three farm billsâP.L. 10-246 (2008), P.L. 113-79 (2014), and P.L. 115-334 (2018)âhas included a separate title to modify crop insurance program provisions. Wet Spring Affects Corn and Soybean Planting U.S. agricultural production got off to a late start in 2019 due to prolonged cool, wet springtime conditions throughout the major growing regions, particularly in states across the northern plains and eastern Corn Belt. Saturated soils prevented many farmers from planting their intended crops (see text box below). Such acres are referred to as "prevent plant" (PPL) acres. In addition to the unplanted acres, sizeable portions of the U.S. corn and soybean crops were planted later than usual, especially in Illinois, Michigan, Missouri, Ohio, Wisconsin, and North and South Dakota. Traditionally, 96% of the U.S. corn crop is planted by June 2, but in 2019 by that date 67% of the crop had been planted ( Figure 1 ). Similarly, the U.S. soybean crop was planted with substantial delays. By June 16, 77% of the U.S. soybean crop was planted, whereas an average of 93% of the crop has been planted by that date during the previous five years ( Figure 2 ). Planting Delays Complicate Producer Choices Widespread planting delays for corn and soybeans pushed both crops' growing cycle into hotter, drier periods of the summer than usual. In addition, maximizing yield potential will likely depend on beneficial weather extending into the fall to achieve full crop maturity. This would potentially make crop growth vulnerable to an early freeze in the fall that would terminate further yield growth. Also, planting delays increase the complexity of producer decisionmaking. When the planting occurs after a crop insurance policy's "final planting date" (FPD), the "late planting period" clause in the policy comes into play, and insurance coverage starts to decline with each successive day of delay ( Figure 3 ). Insured acres planted on or before the FPD receive the full yield or revenue coverage that was purchased. However, if the crop is planted after the FPD, insurance coverage is reduced by 1% per day throughout the late-planting period (which begins the day after the FPD and extends for 25 days for both corn and soybeans). During the late-planting period, producers must decide whether to opt for a PPL indemnity payment or try to plant the crop under reduced insurance coverage with a heightened risk of reduced yields. Despite the risks associated with this choice, large portions of both the corn and soybean crops were planted after the FPD ( Figure 1 and Figure 2 ). The choice of planting versus not planting was complicated in 2019 by Secretary of Agriculture Perdue's announcement on May 23 that only producers with planted acres would be eligible for "trade damage" assistance payments in 2019 under the Market Facilitation Program (MFP). The Secretary's announcement, which came in the middle of the planting period, could have encouraged greater planting than would have otherwise occurred as farmers sought to ensure eligibility for the 2019 MFP payment. During 2018, U.S. soybean and corn producers had received MFP payments based on their farms' harvested output, including $1.65 per bushel for soybean and $0.01 per bushel for corn. For 2019, the Secretary of Agriculture was offering higher payment rates of $2.05 per bushel for soybeans and $0.14 for corn. However, the MFP payment formula would use planted acresânot harvested productionâand combine the commodity-specific payment rates of major program crops (referred to as "non-specialty crops") at the county level (weighted by historical county planted acres and yields) to derive a single county-level MFP payment rate. The potential for 2019 MFP payments could have provided sufficient incentive for some producers to plant their corn and soybean crops under conditions they would not have otherwise (e.g., to plant their crops in wet fields where potential yield-reducing problems associated with seed germination and soil compaction are increased). If such planting did occur, it likely prevented even larger PPL acres from being reported. Additionally, overarching uncertainty remained in 2019 associated with the then-ongoing trade dispute between the United States and China. The dispute had reduced U.S. agricultural exports in 2018 and dampened prospects for both commodity prices and export volumes in 2019. These factors further complicated producers' evaluations of market payoffs under different planting and crop insurance choices. Record PPL Acres in 2019 The two principal sources for data on PPL acres within USDAâthe Farm Service Agency (FSA) and the Risk Management Agency (RMA)âprovide similar but not identical estimates of PPL ( Figure 4 ). FSA oversees the implementation of USDA's farm revenue-support and disaster assistance programs. All producers that participate in these farm programs are required to report their acreage and yields to FSA in an annual acreage report that details crop production activity by specific field. RMA oversees the implementation of USDA's crop insurance programs. All participating producers provide detailed information on insured crops and land to RMA. Farmers report the same number of acres to RMA and FSA. However, not all farms participate in USDA farm programs or buy federal crop insurance. As a result, differences in reported acres planted, harvested, and prevented from being planted occur between the two sources. As of November 1, 2019, U.S. farmers reported to FSA that, of the cropland that they intended to plant this past spring, they were unable to plant 19.6 million acres due primarily to prolonged wet conditions that prevented field work. In contrast, RMA reported a record 18.8 million of PPL acres. The previous record for total PPL acres was set in 2011, when RMA reported 10.2 million acres and FSA reported 9.6 million of PPL. PPL Comparison by Crop: Corn and Soybeans Dominate In 2019, FSA reported 19.6 million PPL acres, including 11.4 million acres of corn and 4.5 million acres of soybeansâboth crops established new records for PPL acres by substantial margins. The previous record PPL for corn was 2.8 million acres in 2013, and for soybeans it was 2.1 million acres in 2015. By way of comparison, in 2019 RMA's PPL acres included slightly more soybean (5.3 versus 4.5 million) and wheat (2.4 versus 2.2 million) acres and less corn (9.5 versus 11.4 million) acres. For both datasets (FSA and RMA), corn, soybeans, and wheat accounted for over 90% of PPL acres (92.3% for FSA, 91.5% for RMA). RMA reported 2019 PPL indemnity payments of over $4.2 billion, with $2.6 billion (60.6%) for corn PPL acres and $1.1 billion (25%) for soybean PPL acres ( Table 1 ). The 2019 average national PPL payment rate for all crops was $224.04 per acre. Payment rates vary by crop and ranged from a low of $50 per acre for millet to a high of $1,432 per acre for dark air cured tobacco. Some economists have suggested that the large discrepancy in corn PPL acres between the two data sources (1.9 million acres) could be the result of acres originally intended to be planted to soybeans being claimed as corn PPL acres to obtain the higher PPL indemnity for corn available under federal crop insurance. In their analysis of historical PPL indemnity rates, the PPL payment rate was almost always higher for corn than soybeans. In 2019, corn's average PPL payment rate of $270.13 per acre was about $70 per acre (34.7%) higher than soybean's average PPL payment rate ( Table 1 ). Thus, producers had an incentive to claim PPL for corn to the maximum extent possible, whether corn or soybeans was the intended crop. A breakout of PPL acres by state and by major commodity is available in the Appendix to this report ( Table A-1 ). PPL Comparison by State: South Dakota Stands Out The unusually wet spring conditions that produced the record PPL acres in 2019 were heavily concentrated in Corn Belt states but were also reported in significant amounts in Arkansas, Texas, Mississippi, Louisiana, North Carolina, Tennessee, New York, and Oklahoma ( Table 2 ). However, the 3.9 million acres of PPL reported in South Dakota (primarily the eastern portion of the state) were more than double second-place Ohio, where 1.4 million PPL acres were reported. South Dakota's PPL acres accounted for over 20% of the national total in 2019, while its PPL indemnity payments of over $925 million accounted for 21.9% of national PPL indemnity payments. PPL Acres Eligible for Multiple Payments Farmers who were unable to plant a crop during the spring of 2019 due to natural causes were eventually eligible for multiple payments under federal farm programs. First, federal crop insurance provides PPL coverage under a standard policy that covers pre-planting cost and potential revenue loss. Second, the FY2019 supplemental authorized disaster assistance payments for PPL (referred to as "top up") in addition to crop insurance indemnities. Third, the Administration's 2019 MFP payments were based on planted acres. However, payments were also included for eligible cover crops planted on PPL acres. Crop Insurance PPL Indemnity Payments If producers are prevented from planting an insured crop because of an insured peril (described below), then the PPL provisions of a standard crop insurance policy compensate the affected producers for pre-planting costs incurred in preparation for planting their insured crops. Crop insurance PPL coverage is available for any farm-based COMBO policy. COMBO policies include individual yield or revenue insurance policies: Revenue protection (RP) insures a producer-selected coverage level of the farm's historical yield times the higher of the projected price or the harvest price. RP with the harvest price exclusion insures a producer-selected coverage level of the farm's historical yield times the projected price. Yield protection insures for a producer-selected coverage level of the farm's historical yield. Area-based revenue and yield policiesâsuch as Area Risk Protection and Area Yield Protectionâthat rely on county yields and revenues to trigger indemnity payments are not eligible for PPL indemnities. Calculating the PPL Indemnity As described in the section " Planting Delays Complicate Producer Choices ," policyholders who are prevented from planting acres until after the FPD may choose not to plant the crop and instead receive a PPL indemnity, calculated as a percentage of the original insurance guarantee (e.g., 55% for corn and 60% for soybean). For example, suppose that a corn producer with an insurable yield of 200 bushels per acre has purchased RP at an 80% coverage level with an RMA projected price of $4.00 per bushel. For this policy: The RP coverage guarantee is 200 x $4.00 x 80% = $640 per acre; The PPL indemnity is 55% x $640 = $352 per acre. Alternately, consider a hypothetical soybean producer with an average production history yield of 50 bushels per acre, an RMA projected price of $9.54 per bushel, and an RP policy with an 80% coverage level. For this policy: The RP coverage guarantee is 50 x $9.54 x 80% = $381.60 per acre; The PPL indemnity is 60% x $381.60 = $228.96 per acre. FY2019 Supplemental Top Up Payments for PPL Losses On June 3, 2019, Congress passed a FY2019 supplemental appropriations bill ( P.L. 116-20 ) that, among other assistance, authorized $3 billion in additional funds for disasters that impacted farmers and ranchers. The disaster funding is administered through multiple USDA programs and provides financial assistance to producers with production losses on both insured and non-insured crops. All of the agriculture funds are designated as emergency spending. The supplemental funding covers several types of agricultural losses from 2018 and 2019, including losses for crops prevented from being planted in 2019. In particular, producers who claimed PPL losses in 2019 are eligible for a top up of 10%-15% of their PPL indemnity. The PPL top up is 15% for producers with standard RP policies that include the harvest price option as a default and 10% for producers who opted out of the harvest price option and selected the RP with harvest price exclusion policy. For 2019, 91% of corn and soybean insured acres were covered by RP with harvest price option. Under the corn and soybean examples introduced earlier, the supplemental top up would be calculated as: For a corn RP policy: 15% x $352 = $52.80 per acre; For a soybean RP policy: 15% x $$228.96 = $34.34 per acre. Requirements Associated with the Top Up Payments The FY2019 supplemental program limits payments to up to 90% of losses, including payments from crop insurance and the non-insured disaster assistance program (NAP) but excluding MFP payments. For producers who did not purchase crop insurance or NAP in advance of the natural disasters, payments are limited to 70% of losses. In addition, all recipients of any FY2019 supplemental disaster payments (including the PPL top up) are required to purchase crop insurance or NAP for the next two crop years. MFP Payments for PPL Cover Crops Under USDA's 2019 MFP program, eligibility for paymentsâwhich range from $15 to $150 per acreâis restricted to planted acres, thus excluding any PPL acres. However, on June 10, 2019, Secretary Perdue announced that USDA was exploring "legal flexibilities" to provide a minimal per acre MFP payment to farmers who opted for a PPL indemnity but also planted an MFP-eligible cover crop (such as barley, oats, or rye) with the potential to be harvested and for subsequent use of those cover crops for forage. On July 29, 2019, USDA announced a 2019 MFP payment rate of $15 per acre for PPL losses claimed on non-specialty crop acres followed by a USDA-approved cover crop. Combined PPL Payments from Multiple Programs In summary, a producer can combine payments from multiple programs without having planted the intended cash crop. While it is not likely to cover all losses incurred, the combination can result in a higher payment in 2019 than was possible in previous years. Based on the above example, a corn farmer with a standard RP policy and an 80% coverage level could receive combined PPL payments of $419.80 per acre, including the PPL indemnity ($352), the supplemental top up payment ($52.80), and the MFP payment for an eligible cover crop planted on PPL acres ($15). By comparison, the original RP policy with 80% coverage would have guaranteed a maximum revenue of $640 per acre had the insured crop been planted. On such an RP policy, a yield loss of nearly 66% would be necessary to generate an indemnity payment that would match the federal payout under the suite of multiple programs available to PPL acres in 2019. Similarly, the hypothetical soybean producer with a standard RP policy and an 80% coverage level could receive combined PPL payments of $278.30 per acre, including the PPL indemnity ($228.96), the supplemental top up payment ($34.34), and the MFP payment for an eligible cover crop planted on PPL acres ($15). However, the second and third payment programsâthe top up and the extended MFP payment on eligible cover cropsâwere not known until later in the growing season (June 3 for the top up and July 29 for the extended MFP payment) after most late planting versus PPL decisions had been made. Some preliminary research suggests that some farmers that might have been better off choosing PPL with top up and extended MFP on cover crops but instead elected to plant corn or soybeans. This choice may have been driven in part by then-relatively high futures market prices and the prospect of qualifying for the 2019 MFP payment, which required planting an eligible crop as announced by Secretary Perdue on May 23. Late Harvest Suggests Additional Crop Losses In addition to the PPL acres, large portions of the corn and soybean crops were planted two to four weeks later than usual ( Figure 1 and Figure 2 ). Such late planting meant that initial crop development would be behind normal across much of the major growing regions and that eventual yields would depend on beneficial weather extending late into the fall to achieve full crop maturity. The late planting also rendered crop growth vulnerable to an early freeze in the fall. Widespread wet conditions continued into the fall, especially in the northern plains and western Corn Belt. North Dakota recorded the wettest September on record in 2019, while Iowa recorded the wettest October. Ultimately, much of the corn crop was harvested under wet conditions with high moisture content that required drying. An early cold spell in the Upper Midwest had already heightened the demand for propane that, in addition to serving as the primary energy source for drying corn, is used to heat hog barns and for other farm operations. This resulted in limited supplies and higher prices for propane. Many farmers chose to leave their corn in the field until more beneficial market conditions emerged. As of December 16, 2019âthe date of USDA's final weekly Crop Progress report for 2019âan estimated 8% (or 7.2 million acres) of the U.S. corn crop had yet to be harvested, adding further to the uncertainty of yields and harvested acreage for the 2019 corn crop ( Table 3 ). Implications for Congress Saturated soil conditions heading into the winter months suggest a continuation of wet conditions into the 2020 planting season and the potential for a repeat of planting difficulties in the months ahead. These unusual conditions have come in the midst of a continued trade dispute between the United States and China that has dampened demand for U.S. agricultural products from one of the United States' principal foreign markets and has compelled the Administration to undertake large ad hoc "trade aid" payments to producers of selected commodities. The record PPL acreage has resulted in record crop insurance PPL indemnity payments under the PPL provisions of standard federal crop insurance policies in 2019. Should wet conditions persist into 2020 and create a situation where farmers are again confronted with delayed or prevented planting, some producers may also bump up against a limit on the continued use of PPL. Under RMA rules, PPL can be taken only for crops planted on an insured unit in one of the four preceding crop years. Thus, four consecutive years of PPL would result in ineligibility for the affected cropland. Furthermore, while crop insurance indemnities can help to offset some of the financial loss associated with prevented planting or poor harvests, they are not designed to cover all of the associated losses. Another concern for producers is the timing and clarity (or lack thereof) with respect to USDA announcements about new payment programs that are linked to producer production choices. In general, to avoid adversely influencing producer behaviorâa precept of most farm policiesâsuch announcements should be made either well in advance of the spring planting period or well after production decisions have been made. A final looming concern for market watchers and policymakers is the increased role of USDA payments to support farm incomes in 2019. USDA forecasts $22.4 billion in direct support payments to the U.S. agricultural sector in 2019, including $14.3 billion in direct payments made under trade aid programs as well as over $8 billion in payments from other farm programs. In addition, USDA forecasts $10.3 billion in federal crop insurance indemnity payments. Together, forecasts of USDA farm support plus crop insurance indemnities combine for $32.7 billion in payments that represent a 35.3% share of USDA's November forecast of 2019 net farm income of $92.5 billion. Without this federal support, net farm income would be lower, primarily due to continued weak prices for most major crops. Should these conditions persist into 2020, they would signal the potential for continued dependence on federal programs to sustain farm incomes in 2020. Appendix. Supplementary Table Summary:	null	96	22,222	22,224	22,224	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction This report analyzes the effects of historic wet conditions during the 2019 growing season on major U.S. field crops, primarily corn and soybeans. These effects include record acres prevented from being planted, widespread delays in planting and harvesting of the corn and soybean crops, large crop insurance indemnity payments due to prevented plantings and weather-related yield losses, and additional ad hoc payments announced for producers experiencing both trade damage and losses from prevented planting. This report focuses on corn and soybeansâthe two largest commercial crops grown in the United States in terms of number of producers, cultivated area, volume produced, and value of production. Together, they account for 54% of land planted to major field crops since 2010. They are critical inputs for several sectors, including the livestock, biofuels, food processing, and export sectors. As a result, any delay or reduction from expected output for either of these crops can have important implications for market prices and the broader U.S. farm economy. The U.S. Department of Agriculture (USDA) forecasted an increased role of federal support for farm incomes in 2019âincluding $22.4 billion in direct support payments and $10.3 billion in federal crop insurance indemnity payments. Together, the forecast of USDA farm support plus crop insurance indemnities of $32.7 billion represents a 35.3% share of U.S. net farm income $92.5 billion. Since 2010, the federal crop insurance program has emerged as the largest component of the farm safety net in terms of taxpayer outlays, averaging $7.8 billion annually in premium subsidies. While USDA implements the federal crop insurance program, Congress is responsible for authorizing and funding it. The federal crop insurance program is permanently authorized by the Federal Crop Insurance Act of 1980 ( P.L. 96-365 ), as amended (7 U.S.C. Â§1501 et seq. ) and receives mandatory funding. Each of the past three farm billsâP.L. 10-246 (2008), P.L. 113-79 (2014), and P.L. 115-334 (2018)âhas included a separate title to modify crop insurance program provisions. Wet Spring Affects Corn and Soybean Planting U.S. agricultural production got off to a late start in 2019 due to prolonged cool, wet springtime conditions throughout the major growing regions, particularly in states across the northern plains and eastern Corn Belt. Saturated soils prevented many farmers from planting their intended crops (see text box below). Such acres are referred to as "prevent plant" (PPL) acres. In addition to the unplanted acres, sizeable portions of the U.S. corn and soybean crops were planted later than usual, especially in Illinois, Michigan, Missouri, Ohio, Wisconsin, and North and South Dakota. Traditionally, 96% of the U.S. corn crop is planted by June 2, but in 2019 by that date 67% of the crop had been planted ( Figure 1 ). Similarly, the U.S. soybean crop was planted with substantial delays. By June 16, 77% of the U.S. soybean crop was planted, whereas an average of 93% of the crop has been planted by that date during the previous five years ( Figure 2 ). Planting Delays Complicate Producer Choices Widespread planting delays for corn and soybeans pushed both crops' growing cycle into hotter, drier periods of the summer than usual. In addition, maximizing yield potential will likely depend on beneficial weather extending into the fall to achieve full crop maturity. This would potentially make crop growth vulnerable to an early freeze in the fall that would terminate further yield growth. Also, planting delays increase the complexity of producer decisionmaking. When the planting occurs after a crop insurance policy's "final planting date" (FPD), the "late planting period" clause in the policy comes into play, and insurance coverage starts to decline with each successive day of delay ( Figure 3 ). Insured acres planted on or before the FPD receive the full yield or revenue coverage that was purchased. However, if the crop is planted after the FPD, insurance coverage is reduced by 1% per day throughout the late-planting period (which begins the day after the FPD and extends for 25 days for both corn and soybeans). During the late-planting period, producers must decide whether to opt for a PPL indemnity payment or try to plant the crop under reduced insurance coverage with a heightened risk of reduced yields. Despite the risks associated with this choice, large portions of both the corn and soybean crops were planted after the FPD ( Figure 1 and Figure 2 ). The choice of planting versus not planting was complicated in 2019 by Secretary of Agriculture Perdue's announcement on May 23 that only producers with planted acres would be eligible for "trade damage" assistance payments in 2019 under the Market Facilitation Program (MFP). The Secretary's announcement, which came in the middle of the planting period, could have encouraged greater planting than would have otherwise occurred as farmers sought to ensure eligibility for the 2019 MFP payment. During 2018, U.S. soybean and corn producers had received MFP payments based on their farms' harvested output, including $1.65 per bushel for soybean and $0.01 per bushel for corn. For 2019, the Secretary of Agriculture was offering higher payment rates of $2.05 per bushel for soybeans and $0.14 for corn. However, the MFP payment formula would use planted acresânot harvested productionâand combine the commodity-specific payment rates of major program crops (referred to as "non-specialty crops") at the county level (weighted by historical county planted acres and yields) to derive a single county-level MFP payment rate. The potential for 2019 MFP payments could have provided sufficient incentive for some producers to plant their corn and soybean crops under conditions they would not have otherwise (e.g., to plant their crops in wet fields where potential yield-reducing problems associated with seed germination and soil compaction are increased). If such planting did occur, it likely prevented even larger PPL acres from being reported. Additionally, overarching uncertainty remained in 2019 associated with the then-ongoing trade dispute between the United States and China. The dispute had reduced U.S. agricultural exports in 2018 and dampened prospects for both commodity prices and export volumes in 2019. These factors further complicated producers' evaluations of market payoffs under different planting and crop insurance choices. Record PPL Acres in 2019 The two principal sources for data on PPL acres within USDAâthe Farm Service Agency (FSA) and the Risk Management Agency (RMA)âprovide similar but not identical estimates of PPL ( Figure 4 ). FSA oversees the implementation of USDA's farm revenue-support and disaster assistance programs. All producers that participate in these farm programs are required to report their acreage and yields to FSA in an annual acreage report that details crop production activity by specific field. RMA oversees the implementation of USDA's crop insurance programs. All participating producers provide detailed information on insured crops and land to RMA. Farmers report the same number of acres to RMA and FSA. However, not all farms participate in USDA farm programs or buy federal crop insurance. As a result, differences in reported acres planted, harvested, and prevented from being planted occur between the two sources. As of November 1, 2019, U.S. farmers reported to FSA that, of the cropland that they intended to plant this past spring, they were unable to plant 19.6 million acres due primarily to prolonged wet conditions that prevented field work. In contrast, RMA reported a record 18.8 million of PPL acres. The previous record for total PPL acres was set in 2011, when RMA reported 10.2 million acres and FSA reported 9.6 million of PPL. PPL Comparison by Crop: Corn and Soybeans Dominate In 2019, FSA reported 19.6 million PPL acres, including 11.4 million acres of corn and 4.5 million acres of soybeansâboth crops established new records for PPL acres by substantial margins. The previous record PPL for corn was 2.8 million acres in 2013, and for soybeans it was 2.1 million acres in 2015. By way of comparison, in 2019 RMA's PPL acres included slightly more soybean (5.3 versus 4.5 million) and wheat (2.4 versus 2.2 million) acres and less corn (9.5 versus 11.4 million) acres. For both datasets (FSA and RMA), corn, soybeans, and wheat accounted for over 90% of PPL acres (92.3% for FSA, 91.5% for RMA). RMA reported 2019 PPL indemnity payments of over $4.2 billion, with $2.6 billion (60.6%) for corn PPL acres and $1.1 billion (25%) for soybean PPL acres ( Table 1 ). The 2019 average national PPL payment rate for all crops was $224.04 per acre. Payment rates vary by crop and ranged from a low of $50 per acre for millet to a high of $1,432 per acre for dark air cured tobacco. Some economists have suggested that the large discrepancy in corn PPL acres between the two data sources (1.9 million acres) could be the result of acres originally intended to be planted to soybeans being claimed as corn PPL acres to obtain the higher PPL indemnity for corn available under federal crop insurance. In their analysis of historical PPL indemnity rates, the PPL payment rate was almost always higher for corn than soybeans. In 2019, corn's average PPL payment rate of $270.13 per acre was about $70 per acre (34.7%) higher than soybean's average PPL payment rate ( Table 1 ). Thus, producers had an incentive to claim PPL for corn to the maximum extent possible, whether corn or soybeans was the intended crop. A breakout of PPL acres by state and by major commodity is available in the Appendix to this report ( Table A-1 ). PPL Comparison by State: South Dakota Stands Out The unusually wet spring conditions that produced the record PPL acres in 2019 were heavily concentrated in Corn Belt states but were also reported in significant amounts in Arkansas, Texas, Mississippi, Louisiana, North Carolina, Tennessee, New York, and Oklahoma ( Table 2 ). However, the 3.9 million acres of PPL reported in South Dakota (primarily the eastern portion of the state) were more than double second-place Ohio, where 1.4 million PPL acres were reported. South Dakota's PPL acres accounted for over 20% of the national total in 2019, while its PPL indemnity payments of over $925 million accounted for 21.9% of national PPL indemnity payments. PPL Acres Eligible for Multiple Payments Farmers who were unable to plant a crop during the spring of 2019 due to natural causes were eventually eligible for multiple payments under federal farm programs. First, federal crop insurance provides PPL coverage under a standard policy that covers pre-planting cost and potential revenue loss. Second, the FY2019 supplemental authorized disaster assistance payments for PPL (referred to as "top up") in addition to crop insurance indemnities. Third, the Administration's 2019 MFP payments were based on planted acres. However, payments were also included for eligible cover crops planted on PPL acres. Crop Insurance PPL Indemnity Payments If producers are prevented from planting an insured crop because of an insured peril (described below), then the PPL provisions of a standard crop insurance policy compensate the affected producers for pre-planting costs incurred in preparation for planting their insured crops. Crop insurance PPL coverage is available for any farm-based COMBO policy. COMBO policies include individual yield or revenue insurance policies: Revenue protection (RP) insures a producer-selected coverage level of the farm's historical yield times the higher of the projected price or the harvest price. RP with the harvest price exclusion insures a producer-selected coverage level of the farm's historical yield times the projected price. Yield protection insures for a producer-selected coverage level of the farm's historical yield. Area-based revenue and yield policiesâsuch as Area Risk Protection and Area Yield Protectionâthat rely on county yields and revenues to trigger indemnity payments are not eligible for PPL indemnities. Calculating the PPL Indemnity As described in the section " Planting Delays Complicate Producer Choices ," policyholders who are prevented from planting acres until after the FPD may choose not to plant the crop and instead receive a PPL indemnity, calculated as a percentage of the original insurance guarantee (e.g., 55% for corn and 60% for soybean). For example, suppose that a corn producer with an insurable yield of 200 bushels per acre has purchased RP at an 80% coverage level with an RMA projected price of $4.00 per bushel. For this policy: The RP coverage guarantee is 200 x $4.00 x 80% = $640 per acre; The PPL indemnity is 55% x $640 = $352 per acre. Alternately, consider a hypothetical soybean producer with an average production history yield of 50 bushels per acre, an RMA projected price of $9.54 per bushel, and an RP policy with an 80% coverage level. For this policy: The RP coverage guarantee is 50 x $9.54 x 80% = $381.60 per acre; The PPL indemnity is 60% x $381.60 = $228.96 per acre. FY2019 Supplemental Top Up Payments for PPL Losses On June 3, 2019, Congress passed a FY2019 supplemental appropriations bill ( P.L. 116-20 ) that, among other assistance, authorized $3 billion in additional funds for disasters that impacted farmers and ranchers. The disaster funding is administered through multiple USDA programs and provides financial assistance to producers with production losses on both insured and non-insured crops. All of the agriculture funds are designated as emergency spending. The supplemental funding covers several types of agricultural losses from 2018 and 2019, including losses for crops prevented from being planted in 2019. In particular, producers who claimed PPL losses in 2019 are eligible for a top up of 10%-15% of their PPL indemnity. The PPL top up is 15% for producers with standard RP policies that include the harvest price option as a default and 10% for producers who opted out of the harvest price option and selected the RP with harvest price exclusion policy. For 2019, 91% of corn and soybean insured acres were covered by RP with harvest price option. Under the corn and soybean examples introduced earlier, the supplemental top up would be calculated as: For a corn RP policy: 15% x $352 = $52.80 per acre; For a soybean RP policy: 15% x $$228.96 = $34.34 per acre. Requirements Associated with the Top Up Payments The FY2019 supplemental program limits payments to up to 90% of losses, including payments from crop insurance and the non-insured disaster assistance program (NAP) but excluding MFP payments. For producers who did not purchase crop insurance or NAP in advance of the natural disasters, payments are limited to 70% of losses. In addition, all recipients of any FY2019 supplemental disaster payments (including the PPL top up) are required to purchase crop insurance or NAP for the next two crop years. MFP Payments for PPL Cover Crops Under USDA's 2019 MFP program, eligibility for paymentsâwhich range from $15 to $150 per acreâis restricted to planted acres, thus excluding any PPL acres. However, on June 10, 2019, Secretary Perdue announced that USDA was exploring "legal flexibilities" to provide a minimal per acre MFP payment to farmers who opted for a PPL indemnity but also planted an MFP-eligible cover crop (such as barley, oats, or rye) with the potential to be harvested and for subsequent use of those cover crops for forage. On July 29, 2019, USDA announced a 2019 MFP payment rate of $15 per acre for PPL losses claimed on non-specialty crop acres followed by a USDA-approved cover crop. Combined PPL Payments from Multiple Programs In summary, a producer can combine payments from multiple programs without having planted the intended cash crop. While it is not likely to cover all losses incurred, the combination can result in a higher payment in 2019 than was possible in previous years. Based on the above example, a corn farmer with a standard RP policy and an 80% coverage level could receive combined PPL payments of $419.80 per acre, including the PPL indemnity ($352), the supplemental top up payment ($52.80), and the MFP payment for an eligible cover crop planted on PPL acres ($15). By comparison, the original RP policy with 80% coverage would have guaranteed a maximum revenue of $640 per acre had the insured crop been planted. On such an RP policy, a yield loss of nearly 66% would be necessary to generate an indemnity payment that would match the federal payout under the suite of multiple programs available to PPL acres in 2019. Similarly, the hypothetical soybean producer with a standard RP policy and an 80% coverage level could receive combined PPL payments of $278.30 per acre, including the PPL indemnity ($228.96), the supplemental top up payment ($34.34), and the MFP payment for an eligible cover crop planted on PPL acres ($15). However, the second and third payment programsâthe top up and the extended MFP payment on eligible cover cropsâwere not known until later in the growing season (June 3 for the top up and July 29 for the extended MFP payment) after most late planting versus PPL decisions had been made. Some preliminary research suggests that some farmers that might have been better off choosing PPL with top up and extended MFP on cover crops but instead elected to plant corn or soybeans. This choice may have been driven in part by then-relatively high futures market prices and the prospect of qualifying for the 2019 MFP payment, which required planting an eligible crop as announced by Secretary Perdue on May 23. Late Harvest Suggests Additional Crop Losses In addition to the PPL acres, large portions of the corn and soybean crops were planted two to four weeks later than usual ( Figure 1 and Figure 2 ). Such late planting meant that initial crop development would be behind normal across much of the major growing regions and that eventual yields would depend on beneficial weather extending late into the fall to achieve full crop maturity. The late planting also rendered crop growth vulnerable to an early freeze in the fall. Widespread wet conditions continued into the fall, especially in the northern plains and western Corn Belt. North Dakota recorded the wettest September on record in 2019, while Iowa recorded the wettest October. Ultimately, much of the corn crop was harvested under wet conditions with high moisture content that required drying. An early cold spell in the Upper Midwest had already heightened the demand for propane that, in addition to serving as the primary energy source for drying corn, is used to heat hog barns and for other farm operations. This resulted in limited supplies and higher prices for propane. Many farmers chose to leave their corn in the field until more beneficial market conditions emerged. As of December 16, 2019âthe date of USDA's final weekly Crop Progress report for 2019âan estimated 8% (or 7.2 million acres) of the U.S. corn crop had yet to be harvested, adding further to the uncertainty of yields and harvested acreage for the 2019 corn crop ( Table 3 ). Implications for Congress Saturated soil conditions heading into the winter months suggest a continuation of wet conditions into the 2020 planting season and the potential for a repeat of planting difficulties in the months ahead. These unusual conditions have come in the midst of a continued trade dispute between the United States and China that has dampened demand for U.S. agricultural products from one of the United States' principal foreign markets and has compelled the Administration to undertake large ad hoc "trade aid" payments to producers of selected commodities. The record PPL acreage has resulted in record crop insurance PPL indemnity payments under the PPL provisions of standard federal crop insurance policies in 2019. Should wet conditions persist into 2020 and create a situation where farmers are again confronted with delayed or prevented planting, some producers may also bump up against a limit on the continued use of PPL. Under RMA rules, PPL can be taken only for crops planted on an insured unit in one of the four preceding crop years. Thus, four consecutive years of PPL would result in ineligibility for the affected cropland. Furthermore, while crop insurance indemnities can help to offset some of the financial loss associated with prevented planting or poor harvests, they are not designed to cover all of the associated losses. Another concern for producers is the timing and clarity (or lack thereof) with respect to USDA announcements about new payment programs that are linked to producer production choices. In general, to avoid adversely influencing producer behaviorâa precept of most farm policiesâsuch announcements should be made either well in advance of the spring planting period or well after production decisions have been made. A final looming concern for market watchers and policymakers is the increased role of USDA payments to support farm incomes in 2019. USDA forecasts $22.4 billion in direct support payments to the U.S. agricultural sector in 2019, including $14.3 billion in direct payments made under trade aid programs as well as over $8 billion in payments from other farm programs. In addition, USDA forecasts $10.3 billion in federal crop insurance indemnity payments. Together, forecasts of USDA farm support plus crop insurance indemnities combine for $32.7 billion in payments that represent a 35.3% share of USDA's November forecast of 2019 net farm income of $92.5 billion. Without this federal support, net farm income would be lower, primarily due to continued weak prices for most major crops. Should these conditions persist into 2020, they would signal the potential for continued dependence on federal programs to sustain farm incomes in 2020. Appendix. Supplementary Table	Summary:	gov_report	1,024	null	12
crs_R45843	crs_R45843_0	You are given a report by a government agency. Write a one-page summary of the report. Report: E ach term, the Supreme Court typically hears arguments in one or more cases concerning the rights and status of Indian tribes and their members. Prominent issues addressed by the Sup reme Court in recent terms have included (1) tribes' civil jurisdiction over nonmembers, (2) the scope of tribal sovereign immunity, and (3) termination of Indian parents' rights in adoption cases. The October 2018 term likewise featured several Indian law issues: the Court heard arguments in three significant cases, each of which implicated the complex relationships among tribal, state, and federal laws. In Washington State Department of Licensing v. Cougar Den , the Court upheld a Washington Supreme Court decision permitting a tribe to import fuel without paying state fuel taxes. The right to travel on public highways guaranteed by an 1855 treaty, the Court ruled, included the right to transport goods for sale on the reservation without paying additional taxes to do so. In Herrera v. Wyoming , the Court determined that neither Wyoming's admission into the Union nor the designation of the Bighorn National Forest abrogated an earlier treaty preserving tribal hunting rights. Thus, a tribe member's conviction for exercising those hunting rights in violation of Wyoming state law could not stand. Finally, in Carpenter v. Murphy , the Court reviewed whether Congress disestablished the Muscogee (Creek) reservation more than a century ago, with potential consequences for Oklahoma's ability to prosecute major crimes in the eastern half of the state. However, the eight Justices considering this case have not yet reached a decision, and the case is scheduled to be reargued in the October 2019 Supreme Court term. This report discusses each of these three cases in turn, focusing on analyses of the Supreme Court's interpretive rubric for treaties and relevant legislation, statements about the scope of legislative authority and discussions of legislative intent, and possibilities for future congressional action. Washington State Department of Licensing v. CougarÂ Den On March 19, 2019, the Supreme Court upheld a 2017 Washington Supreme Court decision defending a right-to-travel provision in an 1855 treaty (1855 Yakama Treaty) between the United States and the Yakama tribe against a state attempt to impose a motor fuels tax on a Yakama member. The treaty guaranteed the Yakamas the "right, in common with citizens of the United States, to travel upon all public highways." Cougar Den, Inc. (Cougar Den)âa business owned by a Yakama memberâpurchased and transported motor fuel into the state and resold it to on-reservation retailers. The Washington Supreme Court ruled that the treaty insulated Cougar Den from having to pay a Washington State motor fuels tax on that gasoline. The Supreme Court agreed, though in such a way that the limits of the right-to-travel provision in the 1855 Yakama Treaty may still not be perfectly clear. Nonetheless, this case could affect the interpretation of similar provisions in other treaties, and potentially impact state taxation of other activities both on- and off-reservation. Legal Backdrop: State Taxing Authority over Tribal Activity In general, states may tax off-reservation activities of Indian tribes unless an explicit federal law exempts those activities. In 1973, the Court decided Mescalero Apache Tribe v. Jones , holding that New Mexico could impose a gross receipts tax on a tribal ski resort operated on nonreservation land leased from the federal government. According to the Court in Mescalero , "[a]bsent express federal law to the contrary, Indians going beyond reservation boundaries have generally been held subject to nondiscriminatory state law otherwise applicable to all citizens of the State." Although Cougar Den involved a state tax imposed on off-reservation activity similar to the tax the Court upheld in Mescalero , the case arose against a backdrop of states having difficulty collecting taxes on tribal retailers selling goods to non-Indians on Indian reservations, even where courts had upheld the legality of those taxes. Collecting such taxes without tribal cooperation can be challenging because tribal sovereign immunity may defeat suits against a tribe absent tribal waiver or congressional consent. For example, in Moe v. Confederated Salish and Kootenai Tribes , the Supreme Court held that a state could impose record-keeping requirements on tribal retailers to facilitate collecting state taxes from on-reservation cigarette sales to non-Indians. However, in Washington v . Confederated Tribes of Colville Reservation , the Court later held that tribal sovereign immunity barred a state's enforcement action to compel a tribe to remit such taxes. And when Oklahoma later argued in Oklahoma Tax Commission v. Citizen Band Potawatomi Indian Tribe of Oklahoma that "decisions such as Moe and Colville give . . . [states] a right [to levy a tax] without a remedy [to collect the tax]," the Court responded by suggesting that states could tax wholesalers, enter into agreements with tribes for collecting the taxes, or secure congressional legislation to require tribes to remit the taxes. Factual Background: Washington's Motor Fuels Tax and the 1855Â Yakama Treaty A Washington statute imposes a motor fuels tax upon licensed importers who bring large quantities of fuel into the state by way of ground transportation. As of 2018, all 24 Indian tribes in Washington, other than the Yakamas, had negotiated fuel tax agreements under which they would pay the motor fuels tax to the state. The question before the Supreme Court in Cougar Den , then, was whether the 1855 Yakama Treaty forbade a similar tax from being imposed on fuel importation activities by Yakama members, on account of that treaty's protection of tribal members' right to travel off-reservation. Article III of the 1855 Yakama Treaty contains two clauses. The first clause states that "if necessary for the public convenience, roads may be run through the said reservation; and on the other hand, the right of way, with free access from the same to the nearest public highway, is secured to them." The second clause states that the Tribe also has "the right, in common with citizens of the United States, to travel upon all public highways." Some special canons of construction apply when courts interpret Indian treaties. According to the Supreme Court, courts must "give effect to the terms [of a treaty] as the Indians themselves would have understood them," considering "the larger context that frames the [t]reaty, including 'the history of the treaty, the negotiations, and the practical construction adopted by the parties.'" Partly because many such treaties (including the 1855 Yakama Treaty) were negotiated and drafted in a language other than the Indians' native language and often involved unequal bargaining power, the Supreme Court has stated that "any doubtful expressions in [treaties] should be resolved in the Indians' favor." However, courts must still take care not to extend treaty language beyond what it was intended to cover. Case Background: The Washington Supreme Court's Decision When considering whether the State of Washington could collect a motor fuels tax against Cougar Den, the Washington Supreme Court had to determine whether the right to travel conferred by the 1855 Yakama Treaty was implicated. Ultimately, a majority of that court held that it was: the State of Washington could not enforce its motor fuels tax against Yakama tribal members because that would infringe on the Tribe's treaty-protected right to travel. Specifically, the majority held that, "in this case, it was impossible for Cougar Den to import fuel without using the highway." Under the majority's view, the motor fuels tax constituted an impermissible burden or condition on tribal members' use of the highways to transport their goods, which violated the treaty. In reaching this decision, the majority relied heavily on a decision rendered by the U.S. Court of Appeals for the Ninth Circuit in United States v. Smiskin , which held that a Washington State law prohibiting the transportation and possession of unstamped cigarettes without prior notice to the state impermissibly restricted the right to travel protected by the 1855 Yakama Treaty. The Washington Supreme Court, reviewing the motor fuels tax, interpreted Ninth Circuit precedent to mean that the 1855 Yakama Treaty provision applied to "any trade, traveling, and importation that requires the use of public roads." By contrast, two dissenting state court justices read Ninth Circuit precedent narrowly. Because the fuel tax was directed against trade in a product, not the travel itself, the dissenting justices would have upheld the tax. The U.S. Supreme Court's Decision Washington appealed the Washington Supreme Court's decision to the U.S. Supreme Court, and the High Court granted review on June 25, 2018. In their arguments before the Court, the parties disagreed over the correct interpretation of the 1855 Yakama Treaty. Specifically, the parties disputed how the Yakama would have originally understood the right-to-travel provision. Citing another Ninth Circuit case, Cougar Den argued that the 1855 Yakama Treaty "guarantees the Yakama Nation and its members the ' right to transport goods to market without restriction .'" However, the Washington State taxing authority argued for a more literal and narrow interpretation of the treaty language, emphasizing that the right-to-travel provision contains no mention of taxes. In the state's view, because the fuel tax did not restrict tribe members' ability to travel on public highways, and because the 1855 Yakama Treaty "says nothing about a tax exemption at all," the Treaty did not preempt the tax's applicability to tribe members. The Supreme Court handed down its decision on March 19, 2019. By a 5-to-4 vote, the Court affirmed the Washington Supreme Court's decision, thereby prohibiting Washington from assessing its motor fuels tax against Cougar Den. However, there was no majority opinion; though five Justices voted to affirm, Justices Sotomayor and Kagan joined an opinion by Justice Breyer, while Justice Ginsburg joined a separate opinion by Justice Gorsuch. Justice Breyer's opinion noted that the treaty was not written in the tribe's native language, which Justice Breyer declared "put the Yakamas at a significant disadvantage." Justice Breyer contended that, based on precedent going back more than 100 years, courts interpreting an Indian treaty must "see that the terms of the treaty are carried out, so far as possible, in accordance with the meaning they were understood to have by the tribal representatives" at the time. Citing the historical record, Justice Breyer explained that the Yakamas would have understood the right to travel as including "the right to travel with goods for purposes of trade." Accordingly, because "to impose a tax upon traveling with certain goods burdens that travel," the motor fuels tax directly burdened Cougar Den's ability to travel with goods for purposes of trade, and thus impermissibly violated the 1855 Yakama Treaty. Justice Breyer also concluded that the tax at issue specifically burdened the type of travel the Yakamas had negotiated to protect: travel by public highway. (Washington's motor fuels tax was not assessed on distributors who imported fuel by pipeline or boat.) Justices Gorsuch, joined by Justice Ginsburg, took a somewhat shorter route to the same conclusion, noting "unchallenged factual findings" from an earlier federal district court case that the Yakamas "understood the right-to-travel provision to provide them 'with the right to travel on all public highways without being subject to any licensing and permitting fees related to the exercise of that right while engaged in the transportation of tribal goods.'" That factual finding, confirmed by a "wealth of historical evidence," in their view required a ruling for the Yakamas. While five Justices agreed that applying the fuel tax to Cougar Den would violate the 1855 Yakama Treaty, the Court's failure to render an opinion agreed upon by a majority of the Justices leaves some question as to how federal and state courts will construe and apply Cougar Den . To the extent that Justice Gorsuch's opinion rests on somewhat narrower grounds than Justice Breyer's, that may be deemed to be the controlling opinion of the Court. Because it relied on unchallenged evidence of the tribe's understanding of the right-to-travel provision, Justice Gorsuch's opinion leaves open the possibility that other, identical terms in other treaties could be interpreted differently, if there is different evidence about the relevant tribes' understanding. Chief Justice Roberts wrote an opinion on behalf of the four dissenting Justices, objecting that "the mere fact that a state law has an effect on the Yakamas while they are exercising a treaty right does not establish that the law impermissibly burdens the right itself." The Chief Justice's dissent went on to express concern that the plurality and concurring opinions could, for example, foreclose the applicability of "law[s] against possession of drugs or illegal firearms" by tribe members on public highways, because tribe members could invoke the treaty-protected right to travel when traveling with such items. The plurality responded to this concern by emphasizing that it did not "hold that the treaty deprives the State of the power to regulate to prevent danger to health or safety occasioned by a tribe member's exercise of treaty rights." Implications and Considerations for Congress The Court's decision in Cougar Den might prompt Congress to further consider the ability of states to enforce and collect valid state taxes from Indian tribes. Cougar Den involved a considerable amount of tax revenue; in December 2013, Washington assessed $3.6 million in taxes, penalties, and licensing fees against Cougar Den. And there are similar right-to-travel provisions in treaties with other tribes, including the Nez PercÃ© Indians of Idaho and the Flathead, Kootenay, and Upper Pend d'Oreilles Indians of Montana. These similarly worded treaties could give rise to future challenges to state taxing authority over tribe members. Moreover, Congress could choose to act in the event legislators believe that Chief Justice Roberts's fears about health and safety laws are well-founded. Because of Congress's plenary authority over Indian matters, only Congress, not a state, could act to limit or eliminate a right granted by treaty. However, if Congress chooses to do so, its intention must be "clear and plain." Cougar Den also might prompt further reflection on the differences between state and federal tax exemptions for tribes. Relying on Supreme Court precedent upholding a tax exemption based on explicit language in the General Allotment Act, the Ninth Circuit, for example, has generally held that an exemption from a federal tax must be explicit. Accordingly, the Yakama tribe is currently not exempt from federal heavy vehicle and diesel fuel taxes or from the federal excise tax on manufactured tobacco products because the right-to-travel provision in the 1855 Yakama Treaty is not sufficiently explicit to exempt the tribe from federal taxes. Legislation could be drafted either to eliminate or to enshrine that different treatment. Herrera v. Wyoming In Herrera v. Wyoming , the Supreme Court resolved a disagreement about whether either Wyoming's admission into the Union or the later establishment of the Bighorn National Forest abrogated the Crow Tribe of Indians' treaty rights to hunt on "unoccupied lands of the United States." The Court concluded that neither event categorically affected those treaty rights. This decision was especially notable because the Supreme Court formally repudiated its 1896 ruling in Ward v. Race Horse , which had held that Wyoming's admission into the Union effectively abrogated a similar hunting-rights provision in a treaty between the United States and another Indian tribe. Race Horse had already appeared to be in considerable tension with the Court's decision over a century later in Minnesota v. Mille Lacs Band of Chippewa Indians , when the Court declared that "[t]reaty rights are not impliedly terminated upon statehood." However, it was not until Herrera that the tension was resolved; the Court stated that it was "formaliz[ing] what is evident in Mille Lacs itself. While Race Horse 'was not expressly overruled' in Mille Lacs , 'it must be regarded as retaining no vitality' after that decision." This rejection of Race Horse undermined other cases relying on it, causing a domino effect that ultimately led the Supreme Court to reverse the Wyoming state court decisions that had declined to recognize the Crow Tribe's treaty hunting rights. Case Background: the Wyoming State Court Decisions The Herrera case arose after the petitioner, a Crow Tribe member, tracked several elk beyond the Crow reservation's Montana borders into the Bighorn National Forest in Wyoming. Herrera and his hunting companions eventually killed three elk, and Herrera was criminally charged by Wyoming with violating its state hunting laws. Herrera moved to dismiss the charges, arguing that he was exercising subsistence hunting rights long protected by the 1868 Treaty of Fort Laramie (1868 Treaty) between the Crow Tribe and the United States. In exchange for ceding much of the territory that would eventually become Wyoming to the United States, the Crow Tribe received a guarantee of "the right to hunt on the unoccupied lands of the United States so long as game may be found thereon . . . ." According to Herrera, this treaty provision provided him with permission to hunt off-reservation in the Bighorn National Forest and prevented Wyoming from going forward with his prosecution under state law. Wyoming disagreed, contending that the hunting rights conferred to Crow Tribe members under the 1868 Treaty were abrogated following Wyoming's 1890 admittance into the Union or, alternatively, the 1897 establishment of the Bighorn National Forest. Rejecting Herrera's claim of treaty protection, the trial court determined it was bound by a 1995 United States Court of Appeals for the Tenth Circuit (Tenth Circuit) decision in Crow Tribe of Indians v. Repsis . That decision held that the 1868 Treaty's hunting-rights provisions had been abrogated for the same reasons as the similarly worded treaty provisions in Race Horse . Alternatively, the Tenth Circuit concluded that the establishment of the Bighorn National Forest in 1897 rendered those lands "occupied" and therefore no longer subject to the access rights given to Crow tribal members by the 1868 Treaty. According to the Wyoming court, principles of collateral estoppel prevented Herrera from "attempting to relitigate the validity of the off-reservation treaty hunting right that was previously held to be invalid" by the Tenth Circuit. After Herrera was convicted and denied appeal in a higher Wyoming state court, he sought review in the U.S. Supreme Court, which granted his request. Legal Backdrop: Court Decisions Interpreting Statehood's Effects on Tribal Treaty Rights A key issue in Herrera concerned the interplay of the Court's prior decisions considering statehood's effect on the continuing viability of treaties between the United States and Indian tribes located within a newly acceded state's territorial boundaries. In Race Horse , the Court had taken the view that Congress's legislative action in admitting a state to the Union abrogated earlier treaties conferring tribal rights to nonreservation lands within the new state's territory. This decision was partly premised on the equal footing doctrineâthe idea that newly admitted states must enjoy sovereignty equal to that of existing states. In Race Horse itself, the Court held that a hunting right in a Shoshone-Bannock treatyâa provision with language identical to the 1868 Treatyâviolated the equal footing doctrine and had been abrogated by legislation admitting Wyoming to the Union. The Supreme Court reasoned that Wyoming's admission to the Union must have impliedly abrogated the treaty right, because "all the states" have the power "to regulate the killing of game within their borders," and the language of the Shoshone-Bannock treaty would impermissibly limit Wyoming's power to do so relative to other states. In other words, the "two facts" of the treaty's hunting rights and of Wyoming's statehood were "irreconcilable, in the sense that the two, under no reasonable hypothesis, [could] be construed as co-existing." The fact that Congress made no express statement abrogating the Shoshone-Bannock treaty rights did not change that reasoning. As a potentially alternative basis for its decision, the Court explained that because the treaty had been enacted while the land had territory status, it necessarily made only an "essentially perishable . . . temporary and precarious" promise, "intended to be of a limited duration." The equal footing doctrine's primacy in federal Indian law was short-lived, however. In United States v. Winans , less than a decade after Race Horse , the Court upheld tribal fishing rights granted to the Yakama tribe under the 1855 Yakama Treaty. The Court specifically concluded that those treaty rights were not displaced by the State of Washington's admission into the Union. According to the Winans Court, The extinguishment of the Indian title, opening the land for settlement, and preparing the way for future states, were appropriate to the objects for which the United States held the territory. And surely it was within the competency of the [nation] to secure to the Indians such a remnant of the great rights they possessed as "taking fish at all usual and accustomed places." Nor does it restrain the state unreasonably, if at all, in the regulation of the right. In short, just as Congress had the power to extinguish tribal title to the land, it had the power to reserve fishing rights to the tribes on nonreservation landâand respecting that preservation of rights was a reasonable restraint on, rather a dramatic curtailment of, state sovereignty. But Race Horse 's holding was not explicitly overruled by Winans , and roughly a century later, Wyoming charged another Crow Tribe member with illegally hunting elk in the Bighorn National Forest (in a case called Crow Tribe of Indians v. Repsis , which predated Herrera's case, but involved similar factual circumstances). The Crow Tribe sought a declaratory judgment in federal court, hoping to resecure the 1868 Treaty hunting and fishing rights. The Tenth Circuit ruled against the tribe, concluding that because the relevant provision of the 1868 Treaty was virtually identical to the one abrogated by the Supreme Court in Race Horse , the Race Horse decision mandated that the treaty rights be considered abrogated by statehood. In so doing, the Tenth Circuit also emphasized Race Horse 's conclusion that the 1868 Treaty granted only "temporary and precarious" rights, such that Congress could not have intended them to be binding on a later-created state. A few years after Repsis , the Supreme Court decided Minnesota v. Mille Lacs Band of Chippewa Indians , which involved fishing rights under an 1837 tribal treaty in Minnesota. There, the Court declined to apply Race Horse and rejected its reasoning, at least in substantial part. The earlier decision's equal-footing holding rested on a "false premise," the Court said, and its language about "temporary and precarious" treaty rights was "too broad to be useful." Noting that courts "interpret Indian treaties to give effect to the terms as the Indians themselves would have understood them," the High Court explained that "Congress may abrogate Indian treaty rights, but it must clearly express its intent to do so." Since there was no "clear evidence" of Congress's intent to abrogate the tribal fishing rights at issue, those rights simply were not abrogated. In the view of the Court, "[t]reaty rights are not impliedly terminated upon statehood." Although highly critical of Race Horse , the Court majority in Mille Lacs did not expressly overrule the earlier decision (though Chief Justice Rehnquist, writing in dissent, accused the majority of overruling Race Horse " sub silentio ," via "a feat of jurisprudential legerdemain"). The Herrera Decision: the Impact of Statehood Thus, when Herrera came before the Supreme Court, the question of whether Race Horse would affect the outcome was a point of disagreement between the parties. Herrera argued that " Mille Lacs forecloses any suggestion that Wyoming's admission terminated the Tribe's treaty hunting rights." Wyoming disagreed, arguing that at least one aspect of Race Horse remained good lawânamely, its recognition that rights conferred to tribal members by treaty may be only of a "temporary and precarious nature," so that the "the proper inquiry is whether Congress intended . . . [those] rights to be perpetual or to expire upon the happening of a clearly contemplated event, such as statehood." According to Wyoming, Mille Lacs did not disturbâand indeed, reaffirmedâthis aspect of Race Horse , which allowed for the conclusion that statehood terminates such temporary rights. Ultimately, the Supreme Court rejected Wyoming's arguments by a 5-4 vote. Writing for the Court majority, Justice Sotomayorâjoined by Justices Ginsburg, Breyer, Kagan, and Gorsuchâacknowledged that Race Horse "relied on two lines of reasoning"ânamely the equal footing doctrine and the "temporary and precarious" nature of certain treaty rights. The Court determined that Mille Lacs had "undercut both pillars of Race Horse 's reasoning," and "methodically repudiated that decision's logic." "[T]he crucial inquiry for treaty termination analysis" established by Mille Lacs "is whether Congress has expressly abrogated an Indian treaty right or whether a termination point identified in the treaty itself has been satisfied." Unless the legislation granting statehood "demonstrates Congress's clear intent to abrogate a treaty" or statehood is mentioned in the treaty itself as a termination point, "[s]tatehood is irrelevant" to treaty termination analysis. Applying the Mille Lacs test to Herrera's case thus involved two questions: (1) Did the Wyoming Statehood Act "show that Congress intended to end the 1868 Treaty hunting right"? and (2) Was there any evidence "in the treaty itself that Congress intended the hunting right to expire at statehood"? The Supreme Court concluded that the answer to both questions was "No"âthere was "simply . . . no evidence" in either the Wyoming Statehood Act or in the treaty itself that Congress intended the Crow Tribe's hunting rights to end at statehood. A Procedural Matter: Issue Preclusion Herrera faced an additional procedural hurdle at the Supreme Court: the parties disagreed over whether he should even be legally allowed to raise his arguments in the first place. The Wyoming state courts had ruled that the Tenth Circuit's 1995 decision in Repsis barred Herrera from even being able to litigate the question of whether the Crow Tribe retained any off-reservation hunting rights under the 1868 Treaty. In short, they said that question had already been answered. Thus, much of the briefing at the Supreme Court focused on issue preclusion, a doctrine that prevents parties from resurrecting an issue already directly decided in a previous case. Both Herrera and the United States as amicus curiae argued that preclusion should not apply when there had been an intervening change in the law, like the Supreme Court's Mille Lacs decision. Wyoming, however, maintained that Mille Lacs had not overruled Race Horse in its entirety, and that at least one line of its reasoning survived: in Wyoming's view, issue preclusion should at least attach to the Tenth Circuit's finding in Repsis that the 1868 Treaty rights were only temporary . In other words, Wyoming argued that Herrera should not be permitted to relitigate the issue of whether Congress intended the 1868 Treaty's hunting rights to be "temporary" rights that expired after statehood because the Tenth Circuit had already definitively answered that question. For the same reasons that the Supreme Court disagreed that statehood had necessarily abrogated Herrera's treaty rights, it likewise rejected Wyoming's claim of issue preclusion. Mille Lacs constituted a "change in law" that justified "an exception to preclusion in this case." "At a minimum," the Court said, "a repudiated decision does not retain preclusive force." The Herrera Decision: the Meaning of "Unoccupied Land"117 Having decided that the 1868 Treaty's hunting rights provision remained in effect even after Wyoming statehood, the Court then needed to decide whether the Bighorn National Forest should be considered "unoccupied" land under the terms of the treaty. The Tenth Circuit in Repsis had concluded that the establishment of the national forest in 1897 rendered the land "occupied" by the federal government because it was "no longer available for settlement," and the resources from the land could not be used "without federal permission." Wyoming similarly argued that "[c]reation of the Bighorn National Forest was an act of occupation, placing that land outside of the ambit of the Crow Treaty right"; in the state's view, because the national forest "is federal property, and the United States decides who may enter and what they may do," the national forest should constitute occupied land on which the 1868 Treaty would grant no special privileges. On the other hand, Herrera contended that the text and historical record of the 1868 Treaty demonstrate an understanding by the parties that "the term 'occupied' entailed actual, physical settlement of the land by non-Indian settlers." The United States, writing as amicus curiae, agreed. Herrera and the United States noted that, in other cases, the declaration of a national forest had led courts to declare the designated land "open and unclaimed." The Supreme Court reiterated that provisions of treaties with tribes must be interpreted as they would naturally have been understood by the tribes at the time those treaties were executed. In this case, the Supreme Court concluded "it is clear that the Crow Tribe would have understood the word 'unoccupied' to denote an area free of residence or settlement by non-Indians." That conclusion was based on analysis of the treaty's text, which used variations of the words "occupy" and "settle" at various points, and supported by both contemporaneous dictionary definitions and historical evidence from the time of the treaty negotiation and signing. Accordingly, "President Cleveland's proclamation creating Bighorn National Forest did not 'occupy' that area within the treaty's meaning. To the contrary, the President 'reserved' the lands 'from entry or settlement.'" The Herrera Decision: Dissent and Limitations The majority opinion in Herrera noted that its scope was limited in two distinct ways. First, the majority held only "that Bighorn National Forest is not categorically occupied, not that all areas within the forest are unoccupied." This leaves open the possibility that some parts of the Bighorn National Forest contain enough indicia of settlement to be considered "occupied," even though the rest of the forest is notâwhich would preclude exercise of Crow tribal hunting rights in those areas. Second, the Supreme Court declined to consider arguments that Wyoming could regulate the exercise of hunting rights to promote conservation purposes. Because those arguments were not considered by the state appellate court, the Supreme Court did "not pass on the viability of those arguments" in its opinion. That may leave open another avenue by which Wyoming could limit the exercise of tribal hunting rights within its borders. A dissent written by Justice Alito was joined by the remaining three members of the Court. The four dissenting Justices would have determined that the Tenth Circuit's decision in Repsis ("holding that the hunting right conferred by [the 1868 Treaty] is no longer in force") was still binding, such that "no member of the Tribe will be able to assert the hunting right that the Court addresses." In other words, the dissent would have started with the parties' issue preclusion arguments, and would have determined that Herrera had no right to relitigate an issue that had already been settled by a court. More specifically, although the dissent expressed some doubt that Mille Lacs represented a sufficient change in the law to foreclose Repsis 's conclusion that Wyoming statehood abrogated the 1868 Treaty rights, it would not have reached that question. Instead, the dissent would have given preclusive effect to Repsis 's alternate legal conclusion, which it says existed independently of Race Horse ânamely, that the Repsis court decided the Bighorn National Forest was not "unoccupied" within the treaty's meaning. Implications and Considerations for Congress Congress's plenary authority to govern interactions with Indian tribes remains clear. Congress may at any time expressly disavow any provision of the 1868 Treaty, or may plainly reaffirm its commitment to any Indian treaty that remains in effect. To the latter end, Congress could, if it wished, clarify that the Bighorn National Forest (or other national forests) should be treated as unoccupied lands for the purposes of construing Indian treaty rights. By contrast, Congress could also choose to broadly abrogate hunting and fishing rights in national forests or other areas, but Herrera reaffirms that if Congress does so, it must clearly state that intention. Carpenter v. Murphy In Carpenter v. Murphy , the Supreme Court is reviewing a decision by the U.S. Court of Appeals for the Tenth Circuit (Tenth Circuit) concerning whether Oklahoma could legally charge and convict Patrick Murphy, a member of the Muscogee (Creek) Nation who was convicted of killing a fellow tribe member. The validity of Murphy's murder conviction may turn on whether his crime was committed within the boundaries of the Muscogee (Creek) reservationâa reservation that Oklahoma says ceased to exist in the early 1900s. Although the Oklahoma state courts rejected Murphy's efforts to overturn his conviction, the Tenth Circuit concluded that the crime did occur on reservation land, and that Oklahoma thus lacked authority to prosecute Murphy. Although the Supreme Court heard oral arguments in Carpenter v. Murphy at the end of 2018, it ordered the case restored to the calendar and set for reargument in the October 2019 term. Whether the Court will ultimately agree with the Tenth Circuit's decision is uncertain, but if it does, the decision could have significant consequences beyond Murphy's case. The land where the crime occurred would then be "Indian country" under federal law, which Oklahoma says would significantly limit its criminal jurisdiction over offenses committed by Indians on such land. Such a decision could prompt additional litigation concerning the status of other tribal lands within Oklahoma. The Major Crimes Act and "Indian Country" The parties have asked the Supreme Court to decide whether the land that was historically designated as belonging to the Muscogee (Creek) Nation constitutes "Indian country," and if so, whether Oklahoma has any criminal jurisdiction over crimes like Murphy's. The federal government (and Congress in particular) has long been recognized as having plenary authority over Indian affairs, so states generally cannot exercise criminal jurisdiction over Indians in "Indian country" without federal permission. A federal statute defines "Indian country" to mean (1) all land within an Indian reservation, (2) all dependent Indian communities, and (3) all Indian allotments that still have Indian titles. An area qualifies as Indian country if it fits within any of these three categories, meaning a formal designation of Indian lands as a "reservation" is not required . Federal law establishes parameters for when states may prosecute certain crimes committed within Indian country. Most relevant to this case, the Major Crimes Act reserves federal jurisdiction over certain serious crimes, like murder and kidnapping, when committed by an Indian within Indian country. Federal jurisdiction under the Major Crimes Act generally forecloses overlapping state (though not tribal) jurisdiction, though legislative exceptions permit some states to exercise jurisdiction over such crimes. The Tenth Circuit Decision The Supreme Court has explained that Congress alone has the power to change or erase reservation boundaries. Once land is designated as a reservation, it generally stays that way until Congress eliminates ("disestablishes") or reduces ("diminishes") it. Appealing his state murder conviction to the Tenth Circuit, Murphy contended that the Muscogee (Creek) reservation had never been disestablished and therefore constituted "Indian country," precluding state jurisdiction over his offense. The Tenth Circuit agreed. In its decision, the Tenth Circuit briefly described the history of the Muscogee (Creek) reservation. In the 1820s, the federal government forcibly relocated the tribe's members (and members of several other tribes) to what is now present-day Oklahoma. As part of that relocation, the government signed a series of treaties with the Muscogee (Creek) Nation, ultimately giving the tribe a vast area of land roughly equivalent to present-day Oklahoma. That tract of land was later reduced. The final reduction occurred after the Civil War, when the Treaty of 1866 required the Muscogee (Creek) Nation to transfer the western half of its new lands back to the United States. Though the Muscogee (Creek) Nation later experienced many changes in its relationship with the federal governmentâmost notably related to tribal governance and a push for individual ownership of the landâthe boundaries of the Muscogee (Creek) land remained generally unchanged until at least the early 1900s. At that point, the "unique history" of Oklahoma began to transition toward statehood, effectively merging eastern Indian lands and western non-Indian lands into a single geographic entity. To determine whether Congress intended to disestablish the Muscogee (Creek) reservation land, the Tenth Circuit applied a three-step analysis employed in the Supreme Court's 1984 decision, Solem v. Bartlett . Under this framework, courts examine (1) the language of the governing federal statute; (2) the historical circumstances of the statute's enactment; and (3) subsequent events such as Congress's later treatment of an affected area. Importantly, the Solem framework instructs courts to resolve any uncertainty in favor of the tribes: if the evidence is not clear, courts "are bound by our traditional solicitude for the Indian tribes to rule that diminishment did not take place and that the old reservation boundaries survived . . . ." Using this framework, the Tenth Circuit agreed with Murphy that his criminal conduct occurred in Indian country, and Oklahoma therefore lacked jurisdiction over it. Although Oklahoma referenced eight separate federal acts that it viewed as collectively disestablishing the Muscogee (Creek) reservation, the Tenth Circuit ruled that none of those statutes clearly referred to disestablishment, and in some instances reflected Congress's continued recognition of the reservation's borders. Oklahoma's evidence that Congress intended to change its governance over the Muscogee (Creek) reservation failed to convince the Tenth Circuit that Congress also intended to erase the reservation boundaries. Similarly, the Tenth Circuit concluded that events subsequent to legislation cited by Oklahoma insufficiently supported the argument that Congress intended the Muscogee (Creek) reservation to be disestablished. In sum, the Tenth Circuit did not find that Congress clearly intended to disestablish the Muscogee (Creek) reservation, so it concluded that Oklahoma lacked jurisdiction to convict Murphy for a murder occurring on those lands. Appeal to the Supreme Court Oklahoma petitioned for certiorari review of the Tenth Circuit's decision, which the Supreme Court granted on May 21, 2018. In its brief to the Court, Oklahoma claimed that no one has treated the relevant land like a reservation since Oklahoma became a state in 1906. It also argued that because Congress broke certain promises in the treaties that had established the reservation, Congress must have intended to disestablish it. According to Oklahoma, it "is inconceivable that Congress created a new State by combining two territories while simultaneously dividing the jurisdiction of that new State straight down the middle by leaving the former Indian Territory as Indian country." In other words, in Oklahoma's characterization of the matter, Congress could not have intended the state to lack jurisdiction over major crimes in half its land mass. Finally, Oklahoma contended that the Solem framework should be inapplicable in the unique context of Oklahoma statehood. The federal government made similar arguments in a brief it filed in support of Oklahoma. However, the federal government additionally claimed that Congress had elsewhere granted Oklahoma broad criminal jurisdiction over Indian country, which it said should enable prosecution of cases like Murphy'sâregardless of whether his crime was committed in Indian country. More specifically, the United States argued that Congress had eliminated tribal jurisdiction and evinced an intent to have all crimes prosecuted by the same entity (whether committed by or against a tribal member or not) throughout the territory that became Oklahoma; in the United States' view, that intent should not be "implicitly" repealed by later statutes like the Major Crimes Act. Supplemental Briefing Ordered by the Supreme Court Following oral argument, the Supreme Court ordered both Oklahoma and Murphy to address whether or not Oklahoma would have criminal jurisdiction over cases like Murphy's if the crimes were found to have been committed in Indian country. It also asked the parties to address whether a reservation could ever not qualify as Indian country. These questions might be relevant if, for example, the Court sought additional information to clarify whether it would need to find that the Muscogee (Creek) reservation had been disestablished in order to conclude that Oklahoma could exercise jurisdiction over Murphy. In Murphy's supplemental brief, he began by stressing that Oklahoma had disavowed the argument that it could exercise criminal jurisdiction over him if the Muscogee (Creek) reservation endured. Murphy then argued that Congress has never given Oklahoma jurisdiction to prosecute crimes committed by Indians, andâanticipating the assertion that several statutes could be read together to implicitly accomplish that resultâdeclared that "when Congress transfers jurisdiction to States, its statutes are bell-clear." None of the statutes mentioned by the United States in its briefing, Murphy argued, do anything like clearly grant criminal jurisdiction over tribes and tribal members to the State of Oklahoma. Oklahoma adopted the United States' view that it had jurisdiction to prosecute crimes regardless of the Muscogee (Creek) land's status, based on a series of laws passed by Congress between 1897 and 1907. However, the state asked the Court not to "leave open whether [Muscogee (Creek) and other historical territories] constitute Indian reservations today," arguing that such a decision "risks undermining the convictions of many federal prisoners" and "may also undermine federal and tribal authority currently exercised on restricted allotments and trust lands." Both Murphy and Oklahoma answered the Court's second question in the negative: they agreed, under current law a federally established reservation always constitutes "Indian country" under the governing statute. Anticipating the U.S. Supreme Court's Decision The Supreme Court heard oral arguments in this case on November 27, 2018. Justice Gorsuch was not present at oral arguments and is not slated to participate in deciding the caseâpresumably because he participated in earlier discussions about this case while he was still a judge on the Tenth Circuit. A decision was expected by the end of the Supreme Court's 2018 term, but on June 27, 2019, the Court ordered this case restored to the calendar for reargument in the next term. If the Supreme Court reverses the Tenth Circuit and finds that the Muscogee (Creek) reservation was disestablished, Murphy's conviction and death sentence would be reinstated, and Oklahoma would presumably continue to prosecute cases like Murphy's. But if the Supreme Court agrees with Murphy and the Tenth Circuit that the Muscogee (Creek) reservation has not been disestablished, the decision's ramifications for federal, state, and tribal jurisdiction in the eastern half of Oklahoma might be significant, and could extend well beyond the Muscogee (Creek) reservation. In addition to the Muscogee (Creek) Nation, several other tribes were forcibly relocated to Oklahoma under similar circumstances and under the same or similar treaties. The parties in Murphy filed a joint appendix containing several historical maps depicting reservation boundaries in Oklahoma in the early 1900s. Oklahoma has argued that, if those statutes did not disestablish the Muscogee (Creek) reservation, similar arguments could be maintained with respect to other lands comprising most of eastern Oklahoma. If the Supreme Court agrees with the Tenth Circuit that Congress never disestablished reservations like the one in this case, Oklahoma argues that its ability to prosecute many crimes in the eastern part of the state would be significantly narrowed. According to Oklahoma and some amici, the Tenth Circuit's decision "would create the largest Indian reservation in America today . . . . That revolutionary result would shock the 1.8 million residents of eastern Oklahoma who have universally understood that they reside on land regulated by state government, not by tribes." If a significant part of Oklahoma is Indian country, then the burden would shift to the federal and tribal governments to prosecute many offenses involving Indian offenders or victims âat least, absent other federal statutory authority allowing the state to prosecute. However, other amici have joined Murphy in arguing that the Tenth Circuit's decision should be upheld. Some, including the Muscogee (Creek) Nation, contend that recognition of the Muscogee (Creek) reservation's continued existence would leave intact most state and local functions on those lands. For example, the Muscogee (Creek) Nation argues that even on reservation land, state and local governments retain most civil jurisdiction, including taxing and zoning authority. The Supreme Court might also seek to avoid the question of whether the Muscogee (Creek) reservation still exists. For example, the Supreme Court could decide either to reassess the approach it endorsed in Solem , orâas suggested by Tenth Circuit Chief Judge Tim Tymkovichâconclude that the Solem framework is ill-suited to the unique circumstances surrounding Oklahoma's statehood. Alternatively, the Court could adopt the federal government's argument that Oklahoma had jurisdiction to prosecute Murphy because earlier statutes granted such jurisdiction, thereby rendering the Major Crimes Act inapplicable. Implications and Considerations for Congress Regardless of the Supreme Court's decision, the choice to disestablish a reservation still lies solely with Congress. If the Supreme Court agrees that the Muscogee (Creek) reservation still exists, a statute clearly disestablishing it would limit this case's applicability in the future. Congress could also pass a law expressly giving Oklahoma jurisdiction to prosecute major crimes in Indian country if the Supreme Court holds that no such law currently exists. If the Supreme Court disagrees with the Tenth Circuit and holds that the Muscogee (Creek) reservation no longer exists, Congress couldâdepending on the exact grounds of the rulingâcountermand that decision by reestablishing or clarifying the continued existence of the Muscogee (Creek) reservation. Summary:	null	96	48,793	48,795	48,795	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: E ach term, the Supreme Court typically hears arguments in one or more cases concerning the rights and status of Indian tribes and their members. Prominent issues addressed by the Sup reme Court in recent terms have included (1) tribes' civil jurisdiction over nonmembers, (2) the scope of tribal sovereign immunity, and (3) termination of Indian parents' rights in adoption cases. The October 2018 term likewise featured several Indian law issues: the Court heard arguments in three significant cases, each of which implicated the complex relationships among tribal, state, and federal laws. In Washington State Department of Licensing v. Cougar Den , the Court upheld a Washington Supreme Court decision permitting a tribe to import fuel without paying state fuel taxes. The right to travel on public highways guaranteed by an 1855 treaty, the Court ruled, included the right to transport goods for sale on the reservation without paying additional taxes to do so. In Herrera v. Wyoming , the Court determined that neither Wyoming's admission into the Union nor the designation of the Bighorn National Forest abrogated an earlier treaty preserving tribal hunting rights. Thus, a tribe member's conviction for exercising those hunting rights in violation of Wyoming state law could not stand. Finally, in Carpenter v. Murphy , the Court reviewed whether Congress disestablished the Muscogee (Creek) reservation more than a century ago, with potential consequences for Oklahoma's ability to prosecute major crimes in the eastern half of the state. However, the eight Justices considering this case have not yet reached a decision, and the case is scheduled to be reargued in the October 2019 Supreme Court term. This report discusses each of these three cases in turn, focusing on analyses of the Supreme Court's interpretive rubric for treaties and relevant legislation, statements about the scope of legislative authority and discussions of legislative intent, and possibilities for future congressional action. Washington State Department of Licensing v. CougarÂ Den On March 19, 2019, the Supreme Court upheld a 2017 Washington Supreme Court decision defending a right-to-travel provision in an 1855 treaty (1855 Yakama Treaty) between the United States and the Yakama tribe against a state attempt to impose a motor fuels tax on a Yakama member. The treaty guaranteed the Yakamas the "right, in common with citizens of the United States, to travel upon all public highways." Cougar Den, Inc. (Cougar Den)âa business owned by a Yakama memberâpurchased and transported motor fuel into the state and resold it to on-reservation retailers. The Washington Supreme Court ruled that the treaty insulated Cougar Den from having to pay a Washington State motor fuels tax on that gasoline. The Supreme Court agreed, though in such a way that the limits of the right-to-travel provision in the 1855 Yakama Treaty may still not be perfectly clear. Nonetheless, this case could affect the interpretation of similar provisions in other treaties, and potentially impact state taxation of other activities both on- and off-reservation. Legal Backdrop: State Taxing Authority over Tribal Activity In general, states may tax off-reservation activities of Indian tribes unless an explicit federal law exempts those activities. In 1973, the Court decided Mescalero Apache Tribe v. Jones , holding that New Mexico could impose a gross receipts tax on a tribal ski resort operated on nonreservation land leased from the federal government. According to the Court in Mescalero , "[a]bsent express federal law to the contrary, Indians going beyond reservation boundaries have generally been held subject to nondiscriminatory state law otherwise applicable to all citizens of the State." Although Cougar Den involved a state tax imposed on off-reservation activity similar to the tax the Court upheld in Mescalero , the case arose against a backdrop of states having difficulty collecting taxes on tribal retailers selling goods to non-Indians on Indian reservations, even where courts had upheld the legality of those taxes. Collecting such taxes without tribal cooperation can be challenging because tribal sovereign immunity may defeat suits against a tribe absent tribal waiver or congressional consent. For example, in Moe v. Confederated Salish and Kootenai Tribes , the Supreme Court held that a state could impose record-keeping requirements on tribal retailers to facilitate collecting state taxes from on-reservation cigarette sales to non-Indians. However, in Washington v . Confederated Tribes of Colville Reservation , the Court later held that tribal sovereign immunity barred a state's enforcement action to compel a tribe to remit such taxes. And when Oklahoma later argued in Oklahoma Tax Commission v. Citizen Band Potawatomi Indian Tribe of Oklahoma that "decisions such as Moe and Colville give . . . [states] a right [to levy a tax] without a remedy [to collect the tax]," the Court responded by suggesting that states could tax wholesalers, enter into agreements with tribes for collecting the taxes, or secure congressional legislation to require tribes to remit the taxes. Factual Background: Washington's Motor Fuels Tax and the 1855Â Yakama Treaty A Washington statute imposes a motor fuels tax upon licensed importers who bring large quantities of fuel into the state by way of ground transportation. As of 2018, all 24 Indian tribes in Washington, other than the Yakamas, had negotiated fuel tax agreements under which they would pay the motor fuels tax to the state. The question before the Supreme Court in Cougar Den , then, was whether the 1855 Yakama Treaty forbade a similar tax from being imposed on fuel importation activities by Yakama members, on account of that treaty's protection of tribal members' right to travel off-reservation. Article III of the 1855 Yakama Treaty contains two clauses. The first clause states that "if necessary for the public convenience, roads may be run through the said reservation; and on the other hand, the right of way, with free access from the same to the nearest public highway, is secured to them." The second clause states that the Tribe also has "the right, in common with citizens of the United States, to travel upon all public highways." Some special canons of construction apply when courts interpret Indian treaties. According to the Supreme Court, courts must "give effect to the terms [of a treaty] as the Indians themselves would have understood them," considering "the larger context that frames the [t]reaty, including 'the history of the treaty, the negotiations, and the practical construction adopted by the parties.'" Partly because many such treaties (including the 1855 Yakama Treaty) were negotiated and drafted in a language other than the Indians' native language and often involved unequal bargaining power, the Supreme Court has stated that "any doubtful expressions in [treaties] should be resolved in the Indians' favor." However, courts must still take care not to extend treaty language beyond what it was intended to cover. Case Background: The Washington Supreme Court's Decision When considering whether the State of Washington could collect a motor fuels tax against Cougar Den, the Washington Supreme Court had to determine whether the right to travel conferred by the 1855 Yakama Treaty was implicated. Ultimately, a majority of that court held that it was: the State of Washington could not enforce its motor fuels tax against Yakama tribal members because that would infringe on the Tribe's treaty-protected right to travel. Specifically, the majority held that, "in this case, it was impossible for Cougar Den to import fuel without using the highway." Under the majority's view, the motor fuels tax constituted an impermissible burden or condition on tribal members' use of the highways to transport their goods, which violated the treaty. In reaching this decision, the majority relied heavily on a decision rendered by the U.S. Court of Appeals for the Ninth Circuit in United States v. Smiskin , which held that a Washington State law prohibiting the transportation and possession of unstamped cigarettes without prior notice to the state impermissibly restricted the right to travel protected by the 1855 Yakama Treaty. The Washington Supreme Court, reviewing the motor fuels tax, interpreted Ninth Circuit precedent to mean that the 1855 Yakama Treaty provision applied to "any trade, traveling, and importation that requires the use of public roads." By contrast, two dissenting state court justices read Ninth Circuit precedent narrowly. Because the fuel tax was directed against trade in a product, not the travel itself, the dissenting justices would have upheld the tax. The U.S. Supreme Court's Decision Washington appealed the Washington Supreme Court's decision to the U.S. Supreme Court, and the High Court granted review on June 25, 2018. In their arguments before the Court, the parties disagreed over the correct interpretation of the 1855 Yakama Treaty. Specifically, the parties disputed how the Yakama would have originally understood the right-to-travel provision. Citing another Ninth Circuit case, Cougar Den argued that the 1855 Yakama Treaty "guarantees the Yakama Nation and its members the ' right to transport goods to market without restriction .'" However, the Washington State taxing authority argued for a more literal and narrow interpretation of the treaty language, emphasizing that the right-to-travel provision contains no mention of taxes. In the state's view, because the fuel tax did not restrict tribe members' ability to travel on public highways, and because the 1855 Yakama Treaty "says nothing about a tax exemption at all," the Treaty did not preempt the tax's applicability to tribe members. The Supreme Court handed down its decision on March 19, 2019. By a 5-to-4 vote, the Court affirmed the Washington Supreme Court's decision, thereby prohibiting Washington from assessing its motor fuels tax against Cougar Den. However, there was no majority opinion; though five Justices voted to affirm, Justices Sotomayor and Kagan joined an opinion by Justice Breyer, while Justice Ginsburg joined a separate opinion by Justice Gorsuch. Justice Breyer's opinion noted that the treaty was not written in the tribe's native language, which Justice Breyer declared "put the Yakamas at a significant disadvantage." Justice Breyer contended that, based on precedent going back more than 100 years, courts interpreting an Indian treaty must "see that the terms of the treaty are carried out, so far as possible, in accordance with the meaning they were understood to have by the tribal representatives" at the time. Citing the historical record, Justice Breyer explained that the Yakamas would have understood the right to travel as including "the right to travel with goods for purposes of trade." Accordingly, because "to impose a tax upon traveling with certain goods burdens that travel," the motor fuels tax directly burdened Cougar Den's ability to travel with goods for purposes of trade, and thus impermissibly violated the 1855 Yakama Treaty. Justice Breyer also concluded that the tax at issue specifically burdened the type of travel the Yakamas had negotiated to protect: travel by public highway. (Washington's motor fuels tax was not assessed on distributors who imported fuel by pipeline or boat.) Justices Gorsuch, joined by Justice Ginsburg, took a somewhat shorter route to the same conclusion, noting "unchallenged factual findings" from an earlier federal district court case that the Yakamas "understood the right-to-travel provision to provide them 'with the right to travel on all public highways without being subject to any licensing and permitting fees related to the exercise of that right while engaged in the transportation of tribal goods.'" That factual finding, confirmed by a "wealth of historical evidence," in their view required a ruling for the Yakamas. While five Justices agreed that applying the fuel tax to Cougar Den would violate the 1855 Yakama Treaty, the Court's failure to render an opinion agreed upon by a majority of the Justices leaves some question as to how federal and state courts will construe and apply Cougar Den . To the extent that Justice Gorsuch's opinion rests on somewhat narrower grounds than Justice Breyer's, that may be deemed to be the controlling opinion of the Court. Because it relied on unchallenged evidence of the tribe's understanding of the right-to-travel provision, Justice Gorsuch's opinion leaves open the possibility that other, identical terms in other treaties could be interpreted differently, if there is different evidence about the relevant tribes' understanding. Chief Justice Roberts wrote an opinion on behalf of the four dissenting Justices, objecting that "the mere fact that a state law has an effect on the Yakamas while they are exercising a treaty right does not establish that the law impermissibly burdens the right itself." The Chief Justice's dissent went on to express concern that the plurality and concurring opinions could, for example, foreclose the applicability of "law[s] against possession of drugs or illegal firearms" by tribe members on public highways, because tribe members could invoke the treaty-protected right to travel when traveling with such items. The plurality responded to this concern by emphasizing that it did not "hold that the treaty deprives the State of the power to regulate to prevent danger to health or safety occasioned by a tribe member's exercise of treaty rights." Implications and Considerations for Congress The Court's decision in Cougar Den might prompt Congress to further consider the ability of states to enforce and collect valid state taxes from Indian tribes. Cougar Den involved a considerable amount of tax revenue; in December 2013, Washington assessed $3.6 million in taxes, penalties, and licensing fees against Cougar Den. And there are similar right-to-travel provisions in treaties with other tribes, including the Nez PercÃ© Indians of Idaho and the Flathead, Kootenay, and Upper Pend d'Oreilles Indians of Montana. These similarly worded treaties could give rise to future challenges to state taxing authority over tribe members. Moreover, Congress could choose to act in the event legislators believe that Chief Justice Roberts's fears about health and safety laws are well-founded. Because of Congress's plenary authority over Indian matters, only Congress, not a state, could act to limit or eliminate a right granted by treaty. However, if Congress chooses to do so, its intention must be "clear and plain." Cougar Den also might prompt further reflection on the differences between state and federal tax exemptions for tribes. Relying on Supreme Court precedent upholding a tax exemption based on explicit language in the General Allotment Act, the Ninth Circuit, for example, has generally held that an exemption from a federal tax must be explicit. Accordingly, the Yakama tribe is currently not exempt from federal heavy vehicle and diesel fuel taxes or from the federal excise tax on manufactured tobacco products because the right-to-travel provision in the 1855 Yakama Treaty is not sufficiently explicit to exempt the tribe from federal taxes. Legislation could be drafted either to eliminate or to enshrine that different treatment. Herrera v. Wyoming In Herrera v. Wyoming , the Supreme Court resolved a disagreement about whether either Wyoming's admission into the Union or the later establishment of the Bighorn National Forest abrogated the Crow Tribe of Indians' treaty rights to hunt on "unoccupied lands of the United States." The Court concluded that neither event categorically affected those treaty rights. This decision was especially notable because the Supreme Court formally repudiated its 1896 ruling in Ward v. Race Horse , which had held that Wyoming's admission into the Union effectively abrogated a similar hunting-rights provision in a treaty between the United States and another Indian tribe. Race Horse had already appeared to be in considerable tension with the Court's decision over a century later in Minnesota v. Mille Lacs Band of Chippewa Indians , when the Court declared that "[t]reaty rights are not impliedly terminated upon statehood." However, it was not until Herrera that the tension was resolved; the Court stated that it was "formaliz[ing] what is evident in Mille Lacs itself. While Race Horse 'was not expressly overruled' in Mille Lacs , 'it must be regarded as retaining no vitality' after that decision." This rejection of Race Horse undermined other cases relying on it, causing a domino effect that ultimately led the Supreme Court to reverse the Wyoming state court decisions that had declined to recognize the Crow Tribe's treaty hunting rights. Case Background: the Wyoming State Court Decisions The Herrera case arose after the petitioner, a Crow Tribe member, tracked several elk beyond the Crow reservation's Montana borders into the Bighorn National Forest in Wyoming. Herrera and his hunting companions eventually killed three elk, and Herrera was criminally charged by Wyoming with violating its state hunting laws. Herrera moved to dismiss the charges, arguing that he was exercising subsistence hunting rights long protected by the 1868 Treaty of Fort Laramie (1868 Treaty) between the Crow Tribe and the United States. In exchange for ceding much of the territory that would eventually become Wyoming to the United States, the Crow Tribe received a guarantee of "the right to hunt on the unoccupied lands of the United States so long as game may be found thereon . . . ." According to Herrera, this treaty provision provided him with permission to hunt off-reservation in the Bighorn National Forest and prevented Wyoming from going forward with his prosecution under state law. Wyoming disagreed, contending that the hunting rights conferred to Crow Tribe members under the 1868 Treaty were abrogated following Wyoming's 1890 admittance into the Union or, alternatively, the 1897 establishment of the Bighorn National Forest. Rejecting Herrera's claim of treaty protection, the trial court determined it was bound by a 1995 United States Court of Appeals for the Tenth Circuit (Tenth Circuit) decision in Crow Tribe of Indians v. Repsis . That decision held that the 1868 Treaty's hunting-rights provisions had been abrogated for the same reasons as the similarly worded treaty provisions in Race Horse . Alternatively, the Tenth Circuit concluded that the establishment of the Bighorn National Forest in 1897 rendered those lands "occupied" and therefore no longer subject to the access rights given to Crow tribal members by the 1868 Treaty. According to the Wyoming court, principles of collateral estoppel prevented Herrera from "attempting to relitigate the validity of the off-reservation treaty hunting right that was previously held to be invalid" by the Tenth Circuit. After Herrera was convicted and denied appeal in a higher Wyoming state court, he sought review in the U.S. Supreme Court, which granted his request. Legal Backdrop: Court Decisions Interpreting Statehood's Effects on Tribal Treaty Rights A key issue in Herrera concerned the interplay of the Court's prior decisions considering statehood's effect on the continuing viability of treaties between the United States and Indian tribes located within a newly acceded state's territorial boundaries. In Race Horse , the Court had taken the view that Congress's legislative action in admitting a state to the Union abrogated earlier treaties conferring tribal rights to nonreservation lands within the new state's territory. This decision was partly premised on the equal footing doctrineâthe idea that newly admitted states must enjoy sovereignty equal to that of existing states. In Race Horse itself, the Court held that a hunting right in a Shoshone-Bannock treatyâa provision with language identical to the 1868 Treatyâviolated the equal footing doctrine and had been abrogated by legislation admitting Wyoming to the Union. The Supreme Court reasoned that Wyoming's admission to the Union must have impliedly abrogated the treaty right, because "all the states" have the power "to regulate the killing of game within their borders," and the language of the Shoshone-Bannock treaty would impermissibly limit Wyoming's power to do so relative to other states. In other words, the "two facts" of the treaty's hunting rights and of Wyoming's statehood were "irreconcilable, in the sense that the two, under no reasonable hypothesis, [could] be construed as co-existing." The fact that Congress made no express statement abrogating the Shoshone-Bannock treaty rights did not change that reasoning. As a potentially alternative basis for its decision, the Court explained that because the treaty had been enacted while the land had territory status, it necessarily made only an "essentially perishable . . . temporary and precarious" promise, "intended to be of a limited duration." The equal footing doctrine's primacy in federal Indian law was short-lived, however. In United States v. Winans , less than a decade after Race Horse , the Court upheld tribal fishing rights granted to the Yakama tribe under the 1855 Yakama Treaty. The Court specifically concluded that those treaty rights were not displaced by the State of Washington's admission into the Union. According to the Winans Court, The extinguishment of the Indian title, opening the land for settlement, and preparing the way for future states, were appropriate to the objects for which the United States held the territory. And surely it was within the competency of the [nation] to secure to the Indians such a remnant of the great rights they possessed as "taking fish at all usual and accustomed places." Nor does it restrain the state unreasonably, if at all, in the regulation of the right. In short, just as Congress had the power to extinguish tribal title to the land, it had the power to reserve fishing rights to the tribes on nonreservation landâand respecting that preservation of rights was a reasonable restraint on, rather a dramatic curtailment of, state sovereignty. But Race Horse 's holding was not explicitly overruled by Winans , and roughly a century later, Wyoming charged another Crow Tribe member with illegally hunting elk in the Bighorn National Forest (in a case called Crow Tribe of Indians v. Repsis , which predated Herrera's case, but involved similar factual circumstances). The Crow Tribe sought a declaratory judgment in federal court, hoping to resecure the 1868 Treaty hunting and fishing rights. The Tenth Circuit ruled against the tribe, concluding that because the relevant provision of the 1868 Treaty was virtually identical to the one abrogated by the Supreme Court in Race Horse , the Race Horse decision mandated that the treaty rights be considered abrogated by statehood. In so doing, the Tenth Circuit also emphasized Race Horse 's conclusion that the 1868 Treaty granted only "temporary and precarious" rights, such that Congress could not have intended them to be binding on a later-created state. A few years after Repsis , the Supreme Court decided Minnesota v. Mille Lacs Band of Chippewa Indians , which involved fishing rights under an 1837 tribal treaty in Minnesota. There, the Court declined to apply Race Horse and rejected its reasoning, at least in substantial part. The earlier decision's equal-footing holding rested on a "false premise," the Court said, and its language about "temporary and precarious" treaty rights was "too broad to be useful." Noting that courts "interpret Indian treaties to give effect to the terms as the Indians themselves would have understood them," the High Court explained that "Congress may abrogate Indian treaty rights, but it must clearly express its intent to do so." Since there was no "clear evidence" of Congress's intent to abrogate the tribal fishing rights at issue, those rights simply were not abrogated. In the view of the Court, "[t]reaty rights are not impliedly terminated upon statehood." Although highly critical of Race Horse , the Court majority in Mille Lacs did not expressly overrule the earlier decision (though Chief Justice Rehnquist, writing in dissent, accused the majority of overruling Race Horse " sub silentio ," via "a feat of jurisprudential legerdemain"). The Herrera Decision: the Impact of Statehood Thus, when Herrera came before the Supreme Court, the question of whether Race Horse would affect the outcome was a point of disagreement between the parties. Herrera argued that " Mille Lacs forecloses any suggestion that Wyoming's admission terminated the Tribe's treaty hunting rights." Wyoming disagreed, arguing that at least one aspect of Race Horse remained good lawânamely, its recognition that rights conferred to tribal members by treaty may be only of a "temporary and precarious nature," so that the "the proper inquiry is whether Congress intended . . . [those] rights to be perpetual or to expire upon the happening of a clearly contemplated event, such as statehood." According to Wyoming, Mille Lacs did not disturbâand indeed, reaffirmedâthis aspect of Race Horse , which allowed for the conclusion that statehood terminates such temporary rights. Ultimately, the Supreme Court rejected Wyoming's arguments by a 5-4 vote. Writing for the Court majority, Justice Sotomayorâjoined by Justices Ginsburg, Breyer, Kagan, and Gorsuchâacknowledged that Race Horse "relied on two lines of reasoning"ânamely the equal footing doctrine and the "temporary and precarious" nature of certain treaty rights. The Court determined that Mille Lacs had "undercut both pillars of Race Horse 's reasoning," and "methodically repudiated that decision's logic." "[T]he crucial inquiry for treaty termination analysis" established by Mille Lacs "is whether Congress has expressly abrogated an Indian treaty right or whether a termination point identified in the treaty itself has been satisfied." Unless the legislation granting statehood "demonstrates Congress's clear intent to abrogate a treaty" or statehood is mentioned in the treaty itself as a termination point, "[s]tatehood is irrelevant" to treaty termination analysis. Applying the Mille Lacs test to Herrera's case thus involved two questions: (1) Did the Wyoming Statehood Act "show that Congress intended to end the 1868 Treaty hunting right"? and (2) Was there any evidence "in the treaty itself that Congress intended the hunting right to expire at statehood"? The Supreme Court concluded that the answer to both questions was "No"âthere was "simply . . . no evidence" in either the Wyoming Statehood Act or in the treaty itself that Congress intended the Crow Tribe's hunting rights to end at statehood. A Procedural Matter: Issue Preclusion Herrera faced an additional procedural hurdle at the Supreme Court: the parties disagreed over whether he should even be legally allowed to raise his arguments in the first place. The Wyoming state courts had ruled that the Tenth Circuit's 1995 decision in Repsis barred Herrera from even being able to litigate the question of whether the Crow Tribe retained any off-reservation hunting rights under the 1868 Treaty. In short, they said that question had already been answered. Thus, much of the briefing at the Supreme Court focused on issue preclusion, a doctrine that prevents parties from resurrecting an issue already directly decided in a previous case. Both Herrera and the United States as amicus curiae argued that preclusion should not apply when there had been an intervening change in the law, like the Supreme Court's Mille Lacs decision. Wyoming, however, maintained that Mille Lacs had not overruled Race Horse in its entirety, and that at least one line of its reasoning survived: in Wyoming's view, issue preclusion should at least attach to the Tenth Circuit's finding in Repsis that the 1868 Treaty rights were only temporary . In other words, Wyoming argued that Herrera should not be permitted to relitigate the issue of whether Congress intended the 1868 Treaty's hunting rights to be "temporary" rights that expired after statehood because the Tenth Circuit had already definitively answered that question. For the same reasons that the Supreme Court disagreed that statehood had necessarily abrogated Herrera's treaty rights, it likewise rejected Wyoming's claim of issue preclusion. Mille Lacs constituted a "change in law" that justified "an exception to preclusion in this case." "At a minimum," the Court said, "a repudiated decision does not retain preclusive force." The Herrera Decision: the Meaning of "Unoccupied Land"117 Having decided that the 1868 Treaty's hunting rights provision remained in effect even after Wyoming statehood, the Court then needed to decide whether the Bighorn National Forest should be considered "unoccupied" land under the terms of the treaty. The Tenth Circuit in Repsis had concluded that the establishment of the national forest in 1897 rendered the land "occupied" by the federal government because it was "no longer available for settlement," and the resources from the land could not be used "without federal permission." Wyoming similarly argued that "[c]reation of the Bighorn National Forest was an act of occupation, placing that land outside of the ambit of the Crow Treaty right"; in the state's view, because the national forest "is federal property, and the United States decides who may enter and what they may do," the national forest should constitute occupied land on which the 1868 Treaty would grant no special privileges. On the other hand, Herrera contended that the text and historical record of the 1868 Treaty demonstrate an understanding by the parties that "the term 'occupied' entailed actual, physical settlement of the land by non-Indian settlers." The United States, writing as amicus curiae, agreed. Herrera and the United States noted that, in other cases, the declaration of a national forest had led courts to declare the designated land "open and unclaimed." The Supreme Court reiterated that provisions of treaties with tribes must be interpreted as they would naturally have been understood by the tribes at the time those treaties were executed. In this case, the Supreme Court concluded "it is clear that the Crow Tribe would have understood the word 'unoccupied' to denote an area free of residence or settlement by non-Indians." That conclusion was based on analysis of the treaty's text, which used variations of the words "occupy" and "settle" at various points, and supported by both contemporaneous dictionary definitions and historical evidence from the time of the treaty negotiation and signing. Accordingly, "President Cleveland's proclamation creating Bighorn National Forest did not 'occupy' that area within the treaty's meaning. To the contrary, the President 'reserved' the lands 'from entry or settlement.'" The Herrera Decision: Dissent and Limitations The majority opinion in Herrera noted that its scope was limited in two distinct ways. First, the majority held only "that Bighorn National Forest is not categorically occupied, not that all areas within the forest are unoccupied." This leaves open the possibility that some parts of the Bighorn National Forest contain enough indicia of settlement to be considered "occupied," even though the rest of the forest is notâwhich would preclude exercise of Crow tribal hunting rights in those areas. Second, the Supreme Court declined to consider arguments that Wyoming could regulate the exercise of hunting rights to promote conservation purposes. Because those arguments were not considered by the state appellate court, the Supreme Court did "not pass on the viability of those arguments" in its opinion. That may leave open another avenue by which Wyoming could limit the exercise of tribal hunting rights within its borders. A dissent written by Justice Alito was joined by the remaining three members of the Court. The four dissenting Justices would have determined that the Tenth Circuit's decision in Repsis ("holding that the hunting right conferred by [the 1868 Treaty] is no longer in force") was still binding, such that "no member of the Tribe will be able to assert the hunting right that the Court addresses." In other words, the dissent would have started with the parties' issue preclusion arguments, and would have determined that Herrera had no right to relitigate an issue that had already been settled by a court. More specifically, although the dissent expressed some doubt that Mille Lacs represented a sufficient change in the law to foreclose Repsis 's conclusion that Wyoming statehood abrogated the 1868 Treaty rights, it would not have reached that question. Instead, the dissent would have given preclusive effect to Repsis 's alternate legal conclusion, which it says existed independently of Race Horse ânamely, that the Repsis court decided the Bighorn National Forest was not "unoccupied" within the treaty's meaning. Implications and Considerations for Congress Congress's plenary authority to govern interactions with Indian tribes remains clear. Congress may at any time expressly disavow any provision of the 1868 Treaty, or may plainly reaffirm its commitment to any Indian treaty that remains in effect. To the latter end, Congress could, if it wished, clarify that the Bighorn National Forest (or other national forests) should be treated as unoccupied lands for the purposes of construing Indian treaty rights. By contrast, Congress could also choose to broadly abrogate hunting and fishing rights in national forests or other areas, but Herrera reaffirms that if Congress does so, it must clearly state that intention. Carpenter v. Murphy In Carpenter v. Murphy , the Supreme Court is reviewing a decision by the U.S. Court of Appeals for the Tenth Circuit (Tenth Circuit) concerning whether Oklahoma could legally charge and convict Patrick Murphy, a member of the Muscogee (Creek) Nation who was convicted of killing a fellow tribe member. The validity of Murphy's murder conviction may turn on whether his crime was committed within the boundaries of the Muscogee (Creek) reservationâa reservation that Oklahoma says ceased to exist in the early 1900s. Although the Oklahoma state courts rejected Murphy's efforts to overturn his conviction, the Tenth Circuit concluded that the crime did occur on reservation land, and that Oklahoma thus lacked authority to prosecute Murphy. Although the Supreme Court heard oral arguments in Carpenter v. Murphy at the end of 2018, it ordered the case restored to the calendar and set for reargument in the October 2019 term. Whether the Court will ultimately agree with the Tenth Circuit's decision is uncertain, but if it does, the decision could have significant consequences beyond Murphy's case. The land where the crime occurred would then be "Indian country" under federal law, which Oklahoma says would significantly limit its criminal jurisdiction over offenses committed by Indians on such land. Such a decision could prompt additional litigation concerning the status of other tribal lands within Oklahoma. The Major Crimes Act and "Indian Country" The parties have asked the Supreme Court to decide whether the land that was historically designated as belonging to the Muscogee (Creek) Nation constitutes "Indian country," and if so, whether Oklahoma has any criminal jurisdiction over crimes like Murphy's. The federal government (and Congress in particular) has long been recognized as having plenary authority over Indian affairs, so states generally cannot exercise criminal jurisdiction over Indians in "Indian country" without federal permission. A federal statute defines "Indian country" to mean (1) all land within an Indian reservation, (2) all dependent Indian communities, and (3) all Indian allotments that still have Indian titles. An area qualifies as Indian country if it fits within any of these three categories, meaning a formal designation of Indian lands as a "reservation" is not required . Federal law establishes parameters for when states may prosecute certain crimes committed within Indian country. Most relevant to this case, the Major Crimes Act reserves federal jurisdiction over certain serious crimes, like murder and kidnapping, when committed by an Indian within Indian country. Federal jurisdiction under the Major Crimes Act generally forecloses overlapping state (though not tribal) jurisdiction, though legislative exceptions permit some states to exercise jurisdiction over such crimes. The Tenth Circuit Decision The Supreme Court has explained that Congress alone has the power to change or erase reservation boundaries. Once land is designated as a reservation, it generally stays that way until Congress eliminates ("disestablishes") or reduces ("diminishes") it. Appealing his state murder conviction to the Tenth Circuit, Murphy contended that the Muscogee (Creek) reservation had never been disestablished and therefore constituted "Indian country," precluding state jurisdiction over his offense. The Tenth Circuit agreed. In its decision, the Tenth Circuit briefly described the history of the Muscogee (Creek) reservation. In the 1820s, the federal government forcibly relocated the tribe's members (and members of several other tribes) to what is now present-day Oklahoma. As part of that relocation, the government signed a series of treaties with the Muscogee (Creek) Nation, ultimately giving the tribe a vast area of land roughly equivalent to present-day Oklahoma. That tract of land was later reduced. The final reduction occurred after the Civil War, when the Treaty of 1866 required the Muscogee (Creek) Nation to transfer the western half of its new lands back to the United States. Though the Muscogee (Creek) Nation later experienced many changes in its relationship with the federal governmentâmost notably related to tribal governance and a push for individual ownership of the landâthe boundaries of the Muscogee (Creek) land remained generally unchanged until at least the early 1900s. At that point, the "unique history" of Oklahoma began to transition toward statehood, effectively merging eastern Indian lands and western non-Indian lands into a single geographic entity. To determine whether Congress intended to disestablish the Muscogee (Creek) reservation land, the Tenth Circuit applied a three-step analysis employed in the Supreme Court's 1984 decision, Solem v. Bartlett . Under this framework, courts examine (1) the language of the governing federal statute; (2) the historical circumstances of the statute's enactment; and (3) subsequent events such as Congress's later treatment of an affected area. Importantly, the Solem framework instructs courts to resolve any uncertainty in favor of the tribes: if the evidence is not clear, courts "are bound by our traditional solicitude for the Indian tribes to rule that diminishment did not take place and that the old reservation boundaries survived . . . ." Using this framework, the Tenth Circuit agreed with Murphy that his criminal conduct occurred in Indian country, and Oklahoma therefore lacked jurisdiction over it. Although Oklahoma referenced eight separate federal acts that it viewed as collectively disestablishing the Muscogee (Creek) reservation, the Tenth Circuit ruled that none of those statutes clearly referred to disestablishment, and in some instances reflected Congress's continued recognition of the reservation's borders. Oklahoma's evidence that Congress intended to change its governance over the Muscogee (Creek) reservation failed to convince the Tenth Circuit that Congress also intended to erase the reservation boundaries. Similarly, the Tenth Circuit concluded that events subsequent to legislation cited by Oklahoma insufficiently supported the argument that Congress intended the Muscogee (Creek) reservation to be disestablished. In sum, the Tenth Circuit did not find that Congress clearly intended to disestablish the Muscogee (Creek) reservation, so it concluded that Oklahoma lacked jurisdiction to convict Murphy for a murder occurring on those lands. Appeal to the Supreme Court Oklahoma petitioned for certiorari review of the Tenth Circuit's decision, which the Supreme Court granted on May 21, 2018. In its brief to the Court, Oklahoma claimed that no one has treated the relevant land like a reservation since Oklahoma became a state in 1906. It also argued that because Congress broke certain promises in the treaties that had established the reservation, Congress must have intended to disestablish it. According to Oklahoma, it "is inconceivable that Congress created a new State by combining two territories while simultaneously dividing the jurisdiction of that new State straight down the middle by leaving the former Indian Territory as Indian country." In other words, in Oklahoma's characterization of the matter, Congress could not have intended the state to lack jurisdiction over major crimes in half its land mass. Finally, Oklahoma contended that the Solem framework should be inapplicable in the unique context of Oklahoma statehood. The federal government made similar arguments in a brief it filed in support of Oklahoma. However, the federal government additionally claimed that Congress had elsewhere granted Oklahoma broad criminal jurisdiction over Indian country, which it said should enable prosecution of cases like Murphy'sâregardless of whether his crime was committed in Indian country. More specifically, the United States argued that Congress had eliminated tribal jurisdiction and evinced an intent to have all crimes prosecuted by the same entity (whether committed by or against a tribal member or not) throughout the territory that became Oklahoma; in the United States' view, that intent should not be "implicitly" repealed by later statutes like the Major Crimes Act. Supplemental Briefing Ordered by the Supreme Court Following oral argument, the Supreme Court ordered both Oklahoma and Murphy to address whether or not Oklahoma would have criminal jurisdiction over cases like Murphy's if the crimes were found to have been committed in Indian country. It also asked the parties to address whether a reservation could ever not qualify as Indian country. These questions might be relevant if, for example, the Court sought additional information to clarify whether it would need to find that the Muscogee (Creek) reservation had been disestablished in order to conclude that Oklahoma could exercise jurisdiction over Murphy. In Murphy's supplemental brief, he began by stressing that Oklahoma had disavowed the argument that it could exercise criminal jurisdiction over him if the Muscogee (Creek) reservation endured. Murphy then argued that Congress has never given Oklahoma jurisdiction to prosecute crimes committed by Indians, andâanticipating the assertion that several statutes could be read together to implicitly accomplish that resultâdeclared that "when Congress transfers jurisdiction to States, its statutes are bell-clear." None of the statutes mentioned by the United States in its briefing, Murphy argued, do anything like clearly grant criminal jurisdiction over tribes and tribal members to the State of Oklahoma. Oklahoma adopted the United States' view that it had jurisdiction to prosecute crimes regardless of the Muscogee (Creek) land's status, based on a series of laws passed by Congress between 1897 and 1907. However, the state asked the Court not to "leave open whether [Muscogee (Creek) and other historical territories] constitute Indian reservations today," arguing that such a decision "risks undermining the convictions of many federal prisoners" and "may also undermine federal and tribal authority currently exercised on restricted allotments and trust lands." Both Murphy and Oklahoma answered the Court's second question in the negative: they agreed, under current law a federally established reservation always constitutes "Indian country" under the governing statute. Anticipating the U.S. Supreme Court's Decision The Supreme Court heard oral arguments in this case on November 27, 2018. Justice Gorsuch was not present at oral arguments and is not slated to participate in deciding the caseâpresumably because he participated in earlier discussions about this case while he was still a judge on the Tenth Circuit. A decision was expected by the end of the Supreme Court's 2018 term, but on June 27, 2019, the Court ordered this case restored to the calendar for reargument in the next term. If the Supreme Court reverses the Tenth Circuit and finds that the Muscogee (Creek) reservation was disestablished, Murphy's conviction and death sentence would be reinstated, and Oklahoma would presumably continue to prosecute cases like Murphy's. But if the Supreme Court agrees with Murphy and the Tenth Circuit that the Muscogee (Creek) reservation has not been disestablished, the decision's ramifications for federal, state, and tribal jurisdiction in the eastern half of Oklahoma might be significant, and could extend well beyond the Muscogee (Creek) reservation. In addition to the Muscogee (Creek) Nation, several other tribes were forcibly relocated to Oklahoma under similar circumstances and under the same or similar treaties. The parties in Murphy filed a joint appendix containing several historical maps depicting reservation boundaries in Oklahoma in the early 1900s. Oklahoma has argued that, if those statutes did not disestablish the Muscogee (Creek) reservation, similar arguments could be maintained with respect to other lands comprising most of eastern Oklahoma. If the Supreme Court agrees with the Tenth Circuit that Congress never disestablished reservations like the one in this case, Oklahoma argues that its ability to prosecute many crimes in the eastern part of the state would be significantly narrowed. According to Oklahoma and some amici, the Tenth Circuit's decision "would create the largest Indian reservation in America today . . . . That revolutionary result would shock the 1.8 million residents of eastern Oklahoma who have universally understood that they reside on land regulated by state government, not by tribes." If a significant part of Oklahoma is Indian country, then the burden would shift to the federal and tribal governments to prosecute many offenses involving Indian offenders or victims âat least, absent other federal statutory authority allowing the state to prosecute. However, other amici have joined Murphy in arguing that the Tenth Circuit's decision should be upheld. Some, including the Muscogee (Creek) Nation, contend that recognition of the Muscogee (Creek) reservation's continued existence would leave intact most state and local functions on those lands. For example, the Muscogee (Creek) Nation argues that even on reservation land, state and local governments retain most civil jurisdiction, including taxing and zoning authority. The Supreme Court might also seek to avoid the question of whether the Muscogee (Creek) reservation still exists. For example, the Supreme Court could decide either to reassess the approach it endorsed in Solem , orâas suggested by Tenth Circuit Chief Judge Tim Tymkovichâconclude that the Solem framework is ill-suited to the unique circumstances surrounding Oklahoma's statehood. Alternatively, the Court could adopt the federal government's argument that Oklahoma had jurisdiction to prosecute Murphy because earlier statutes granted such jurisdiction, thereby rendering the Major Crimes Act inapplicable. Implications and Considerations for Congress Regardless of the Supreme Court's decision, the choice to disestablish a reservation still lies solely with Congress. If the Supreme Court agrees that the Muscogee (Creek) reservation still exists, a statute clearly disestablishing it would limit this case's applicability in the future. Congress could also pass a law expressly giving Oklahoma jurisdiction to prosecute major crimes in Indian country if the Supreme Court holds that no such law currently exists. If the Supreme Court disagrees with the Tenth Circuit and holds that the Muscogee (Creek) reservation no longer exists, Congress couldâdepending on the exact grounds of the rulingâcountermand that decision by reestablishing or clarifying the continued existence of the Muscogee (Creek) reservation.	Summary:	gov_report	1,024	null	13
crs_R45870	crs_R45870_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Background Congress uses an annual appropriations process to fund the routine activities of most federal agencies. This process anticipates the enactment of 12 regular appropriations bills to fund these activities before the beginning of the fiscal year. When this process has not been completed before the start of the fiscal year, one or more continuing appropriations acts (commonly known as continuing resolutions or CRs) can be used to provide interim funding pending action on the regular appropriations. DOD has started the fiscal year under a CR for 13 of the past 18 years (FY2002-FY2019) and every year since FY2010 excluding FY2019. DOD has operated under a CR for an average of 119 days per year during the period FY2010-FY2019 compared to an average of 32 days per year during the period FY2002-FY2009 (see Figure 1 ). All told, since 2010, DOD has spent 1,186 daysâmore than 39 monthsâoperating under a CR, compared to 259 daysâless than 9 monthsâduring the 8 years preceding 2010. To preserve congressional prerogatives to shape federal spending in the regular appropriations bills, the eventual enactment of which is expected, CRs typically contain limitations intended to allow execution of funds in a manner that provides for continuation of projects and activities with relatively few departures from the way funds were allocated in the previous fiscal year. However, DOD funding needs typically change from year to year across the agency's dozens of appropriations accounts for a variety of reasons, including emerging, increasing, or decreasing threats to national security. If accountsâand activities within accountsâare funded by a CR at a lower level than was requested in the pending Administration budget, then DOD cannot obligate funds at the anticipated rate. This can restrict planned personnel actions, maintenance and training activities, and a variety of contracted support actions. Delaying or deferring such actions can also cause a ripple effect, generating personnel shortages, equipment maintenance backlogs, oversubscribed training courses, and a surge in end-of-year contract spending. Given the frequency of CRs in recent years, many DOD program managers and senior leaders work well in advance of the outcome of annual decisions on appropriations to minimize contracting actions planned for the first quarter of the coming fiscal year. The Defense Acquisition University, DOD's education service for acquisition program management, advises students that, "[m]embers of the [Office of the Secretary of Defense], the Services and the acquisition community must consider late enactment to be the norm [emphasis in original] rather than the exception and, therefore, plan their acquisition strategy and obligation plans accordingly." In anticipation of such a delay in the availability of full funding for programs, DOD managers can build program schedules in which planned contracting actions are pushed to later in the fiscal year when it is more likely that a full appropriation will have been enacted. Additionally, managers can take steps to defer hiring actions, restrict travel policies, or cancel nonessential education and training events for personnel to keep their spending within the confines of a CR. On their face, CRs are disruptive to routine agency operations and many of the procedures used by agencies to deal with limitations imposed by a CR entail costs. However, even though these disruptions have been routine for more than a decade, there has been little systematic analysis of the extent to which theses disruptions have led to measurable and significantly adverse impacts on U.S. military preparedness over the long run. Funding Available Under a CR An interim continuing resolution typically provides that budget authority is available at a certain rate of operations or funding rate for the covered projects and activities and for a specified period of time. The funding rate for a project or activity is based on the total amount of budget authority that would be available annually at the referenced funding level and is prorated based on the fraction of a year for which the interim CR is in effect. In recent fiscal years, the referenced funding level has been the amount of budget authority that was available under specified appropriations acts from the previous fiscal year, or that amount modified by some formula. For example, the first CR for FY2018 ( H.R. 601 \ P.L. 115-56 ) provided, "... such amounts as may be necessary, at a rate of operations as provided in the applicable appropriations Acts for fiscal year 2017 ... minus 0.6791%" (Division D, Section 101). While recent CRs typically have provided that the funding rates for certain accounts are to be calculated with reference to the funding rates in the previous year, Congress could establish a CR funding rate on any basis (e.g., the President's pending budget request, the appropriations bill for the pending year as passed by the House or Senate, or the bill for the pending year as reported by a committee of either chamber). Full Text Versus Formulaic CRs CRs have sometimes provided budget authority for some or all covered activities by incorporating the text of one or more regular appropriations bills for the current fiscal year. When this form of funding is provided in a CR or other type of annual appropriations act, it is often referred to as full text appropriations . When full text appropriations are provided, those covered activities are not funded by a rate for operations, but by the amounts specified in the incorporated text. This full text approach is functionally equivalent to enacting regular appropriations for those activities, regardless of whether that text is enacted as part of a CR. The "Department of Defense and Full-Year Continuing Appropriations Act, FY2011" ( P.L. 112-10 ) is one recent example. For DOD, the text of a regular appropriations bill was included as Division A, thus funding those covered activities via full text appropriations. In contrast, Division B of the bill provided funding for the projects and activities that normally would have been funded in the remaining eleven FY2011 regular appropriations according to a formula based on the previous fiscal year's appropriations laws. If formulaic interim or full-year continuing appropriations were to be enacted for DOD, the funding levels for both base defense appropriations and Overseas Contingency Operations (OCO) spending could be determined in a variety of ways. A separate formula could be established for defense spending, or the defense and nondefense spending activities could be funded under the same formula. Likewise, the level of OCO spending under a CR could be established by the general formula that applies to covered activities (as discussed above), or by providing an alternative rate or amount for such spending. For example, the first CR for FY2013 ( P.L. 112-175 ) provided the following with regard to OCO funding: Whenever an amount designated for Overseas Contingency Operations/Global War on Terrorism pursuant to Section 251(b)(2)(A) of the Balanced Budget and Emergency Deficit Control Act of 1985 (in this section referred to as an "OCO/GWOT amount") in an Act described in paragraph (3) or (10) of subsection (a) that would be made available for a project or activity is different from the amount requested in the President's fiscal year 2013 budget request, the project or activity shall be continued at a rate for operations that would be permitted by ... the amount in the President's fiscal year 2013 budget request. Additional Limitations that CRs May Impose CRs may contain limitations that are generally written to allow execution of funds in a manner that provides for minimal continuation of projects and activities in order to preserve congressional prerogatives prior to the time a full appropriation is enacted. As an example, an interim CR may prohibit an agency from initiating or resuming any project or activity for which funds were not available in the previous fiscal year. Congress has, in practice, included a specific section (usually Section 102) in the CR to expressly prohibit DOD from starting production on a program that was not funded in prior years (i.e., a new start ), and from increasing production rates above levels provided in the prior year. Congress may also limit certain contractual actions such as multiyear procurement contracts. Figure 2. Air Force Appropriations for Combat Rescue Helicopter An interim CR that uses the same formula to specify a funding rate for different appropriations accounts may cause problems for programs funded by more than one account, if the ratio of funding between the accounts changes from one year to the next. For example, as the Air Force program to procure a new combat rescue helicopter transitions from development to production between FY2019 and FY2020, the amount requested for R&D dropped by about $200 million while the amount requested for procurement rose by a 12-percent larger amount. Although the total amount requested for the program in FY2020 is thus $25 million higher than the total appropriated in FY2019, a CR that continued the earlier year's funding for the program would problematic: The nearly $200 million in excess R&D money could not be used to offset the more than $200 million shortfall in procurement funding, absent specific legislative relief. This kind of mismatch at the account level between the request and the CR is sometimes referred to as an issue with the color of money . Anomalies Even though CRs typically provide funds at a particular rate, CRs may also include provisions that enumerate exceptions to the duration, amount, or purposes for which those funds may be used for certain appropriations accounts or activities. Such provisions are commonly referred to as anomalies . The purpose of anomalies is to insulate some operations from potential adverse effects of a CR while providing time for Congress and the President to agree on full-year appropriations and avoiding a government shutdown. A number of factors could influence the extent to which Congress decides to include such additional authority or flexibility for DOD under a CR. Consideration may be given to the degree to which funding allocations in full-year appropriations differ from what would be provided by the CR. Prior actions concerning flexibility delegated by Congress to DOD may also influence the future decisions of Congress for providing additional authority to DOD under a longer-term CR. In many cases, the degree of a CR's impact can be directly related to the length of time that DOD operates under a CR. While some mitigation measures (anomalies) might not be needed under a short-term CR, longer-term CRs may increase management challenges and risks for DOD. An anomaly might be included to stipulate a set rate of operations for a specific activity, or to extend an expiring authority for the period of the CR. For example, the second CR for FY2017 ( H.R. 2028 \ P.L. 114-254 ) granted three anomalies for DOD: Section 155 funded the Columbia Class Ballistic Missile Submarine Program ( Ohio Replacement) at a specific rate for operations of $773,138,000. Section 156 allowed funding to be made available for multi-year procurement contracts, including advance procurement, for the AHâ64E Attack Helicopter and the UHâ60M Black Hawk Helicopter. Section 157 provided funding for the Air Force's KC-46A Tanker, up to the rate for operations necessary to support the production rate specified in the President's FY2017 budget request (allowing procurement of 15 aircraft, rather the FY2016 rate of 12 aircraft). In anticipation of an FY2018 CR, DOD submitted a list of programs that would be affected under a CR to the Office of Management and Budget (OMB). This "consolidated anomalies list" included approximately 75 programs that would be delayed by a prohibition on new starts and nearly 40 programs that would be negatively affected by a limitation on production quantity increases. OMB may or may not forward such a list to Congress as a formal request for consideration. Arguably, to the extent that anomalies make a CR more tolerable to an agency, they may reduce the incentive for Congress to reach a budget agreement. According to Mark Cancian, a defense budget analyst at the Center for Strategic and International Studies, "a CR with too many anomalies starts looking like an appropriations bill and takes the pressure off." H.R. 601 ( P.L. 115-56 ), the initial FY2018 CR, did not include any anomalies to address the programmatic issues included on the DOD list. H.R. 601 was extended through March 23, 2018, by four measures. The fourth measure ( P.L. 115-123 ) included an anomaly to address concerns raised by the Air Force regarding the effects of the CR on certain FY2018 construction requirements. How Agencies Implement a CR After enactment of a CR, OMB provides detailed directions to executive agencies on the availability of funds and how to proceed with budget execution. OMB will typically issue a bulletin that includes an announcement of an automatic apportionment of funds that will be made available for obligation, as a percentage of the annualized amount provided by the CR. Funds usually are apportioned either in proportion to the time period of the fiscal year covered by the CR, or according to the historical, seasonal rate of obligations for the period of the year covered by the CR, whichever is lower. A 30-day CR might, therefore, provide 30 days' worth of funding, derived either from a certain annualized amount that is set by formula or from a historical spending pattern. In an interim CR, Congress also may provide authority for OMB to mitigate furloughs of federal employees by apportioning funds for personnel compensation and benefits at a higher rate for operations, albeit with some restrictions. In 2017 testimony before the Senate Subcommittee on Federal Spending Oversight and Emergency Management, Committee on Homeland Security and Governmental Affairs, a senior Government Accountability Office (GAO) analyst remarked that CRs can create budget uncertainty and disruptions, complicating agency operations and causing inefficiencies. Director of Strategic Issues Heather Krause asserted that "this presents challenges for federal agencies continuing to carry out their missions and plan for the future. Moreover, during a CR, agencies are often required to take the most limited funding actions." Krause testified that agency officials report taking a variety of actions to manage inefficiencies resulting from CRs, including shifting contract and grant cycles to later in the fiscal year to avoid repetitive work, and providing guidance on spending rather than allotting specific dollar amounts during CRs, to provide more flexibility and reduce the workload associated with changes in funding levels. When operating under a CR, agencies encounter consequences that can be difficult to quantify, including additional obligatory paperwork, need for additional short-term contracting actions, and other managerial complications as the affected agencies work to implement funding restrictions and other limitations that the CR imposes. For example, the government can normally save money by buying in bulk under annual appropriations lasting a full fiscal year or enter into new contracts (or extend their options on existing agreements) to lock in discounts and exploit the government's purchasing power. These advantages may be lost when operating under a CR. Unique Implementation Challenges Faced by DOD All federal agencies face management challenges under a CR, but DOD faces unique challenges in providing the military forces needed to deter war and defend the country. In a letter to the leaders of the armed services committees dated September 8, 2017, then-Secretary of Defense James Mattis asserted that "longer term CRs impact the readiness of our forces and their equipment at a time when security threats are extraordinarily high. The longer the CR, the greater the consequences for our force." DOD officials argue that the department depends heavily on stable but flexible funding patterns and new start activities to maintain a modernized force ready to meet future threats. Former Defense Secretary Ashton Carter posited that CRs put commanders in a "straitjacket" that limits their ability to adapt, or keep pace with complex national security challenges around the world while responding to rapidly evolving threats like the Islamic State. Prohibitions on Certain Contracting Actions As discussed, a CR typically includes a provision prohibiting DOD from initiating new programs or increasing production quantities beyond the prior year's rate. This can result in delayed development, production, testing, and fielding of DOD weapon systems. An inability to execute funding as planned can induce costly delays and repercussions in the complex schedules of weapons system development programs. Under a CR, DOD's ability to enter into planned long-term contracts is also typically restricted, thus forfeiting the program stability and efficiencies that can be gained by such contracts. Additionally, DOD has testified to Congress that CRs impact trust and confidence with suppliers, which may increase costs, time, and potential risk. Misalignments in CR-Provided Funding Because CRs constrain funding by appropriations account rather than by program, DOD may encounter significant issues with programs that draw funds from several accounts. Already mentioned, above, is the color of money issue that can arise when a weapons program transitions from development into production. In such cases, the program could have excess R&D funding (based on the prior year's appropriation) and a shortfall in procurement funds needed to ramp up production. A CR also can result in problems specific to the apportionment of funding in the Navy's shipbuilding account, known formally as the Shipbuilding and Conversion, Navy (SCN) appropriation account. SCN appropriations are specifically annotated at the line-item level in the DOD annual appropriations bill. As a consequence, under a CR, SCN funding is managed not at the appropriations account level, but at the line-item level. For the SCN accountâuniquely among DOD acquisition accountsâthis can lead to misalignments (i.e., excesses and shortfalls) in funding under a CR for SCN-funded programs, compared to the amounts those programs received in the prior year. The shortfalls in particular can lead to program execution challenges under an extended or full-year CR. Assessing the Impact on DOD Published reports on the effect of CRs on agency operations typically provide anecdotal assertions that such funding measures increase costs and reduce efficiencies. However, these accounts typically do not provide data that would permit a systematic analysis of CR effects. Nor do they address the impact of CR-caused near-term bureaucratic disruption on the combat capability and readiness of U.S. forces over the longer-term. One exception to this general ruleâdiscussed belowâis a 2019 study by the RAND Corporation of the effect of CRs on a limited number of DOD procurement programs. That analysis, "did not find strong evidence â¦ indicating that CRs are generally associated with delays in procurement awards or increased costs," although the authors of the study emphasized that, because of its limited scope, the study, "does not imply that the widely expressed concerns regarding CR effects are invalid." The Navy's $4 Billion Price Tag One widely publicized estimate of the cost of recent CRs stands apart in the level of detail available on how the figure was calculated. In a December 4, 2017, speech at a defense symposium, Secretary of the Navy Richard Spencer said that CRs had cost the Navy, "about $4 billion since 2011." CRS asked the Navy for the source of the $4 billion figure and for details on how it was calculated. In response, the Navy provided CRS with an information paper that stated the following in part: CRs have averaged 106 days per year in the last decade, or 29% of each year. This means over one quarter of every year is lost or has to be renegotiated for over 100,000 DON [Department of the Navy] contracts (conservative estimate) and billions of dollars. Contractors translate this CR uncertainty into the prices they charge the government. â The cost factors at work here are: price uncertainty caused by the CR and reflected in higher rates charged to the government; government time to perform multiple incremental payments or renegotiate; and contractor time to renegotiate or perform unnecessary rework caused by the CR. These efforts are estimated at approximately 1/7 th of a man-year for all stakeholders or $26K [$26,000] per average contract. â $26K x 100,000 contracts = $2.6B [$2.6 billion] per year. While the estimate for each contract would be different, it can readily be seen that this is a low but reasonable estimate. The Navy paper did not provide any justification for the assumptions underpinning that calculation. RAND Procurement Study The literature on CR effects includes one relatively rigorous effort to determine whether multi-month CRs are associated with delays and cost increases in DOD procurement programs. The study, conducted in 2017 by the RAND Corporation, was sponsored by the office of DOD's senior acquisition official (the then-Under Secretary of Defense for Acquisition, Technology, and Logistics). Summarizing its review of the literature on CR effects, the RAND team said Because of a lack of quantitative data, many of the [asserted] consequences â¦ would be very difficult to estimate quantitatively or to conclusively demonstrate. All of the research that we reviewed on the consequences of operating under a CR employed qualitative approaches that focused on case studies, assertions, and anecdotal information. To see whether CRs systematically are associated with cost increases and delays in DOD procurements, RAND examined 151 procurement awards for relatively high-profile programs during FY2013-FY2015. In each of those years, DOD operated under CRs for several months. Comparing procurement awards originally scheduled to occur while the agency was under a CR with those made after a regular appropriations bill had been enacted, the study found no statistically significant difference between the two groups in whether an award was delayed; if it was delayed, the length of the delay; or whether the unit cost increased compared with the projected cost. RAND also compared the 151 procurement awards made during FY2013-FY2015âyears when there were prolonged CRsâwith 48 awards made during FY1999, when DOD operated under a CR for only the first 3 weeks of the fiscal year. A comparison of the awards made during the period of "long-CRs" (2013-15) with awards made during a period in which there was one relatively short CR (FY1999) showed no statistically significant difference in the percentage of awards that were delayed; for cases in which a delay occurred, longer delays in FY2013-FY2015 than in the earlier period; and larger unit-cost increases (relative to original projections) for cases during the FY1999 (i.e., the "short-CR" period). In sum, RAND concluded, "we did not find strong evidence â¦ that CRs are generally associated with delays in procurement awards or increased costs. On the other hand, given the limitations inherent in our statistical analysis, we cannot use its results to rule out the occurrence of these kinds of negative effects." Issues for Congress Inasmuch as CRs have become relatively routine, Congress may wish to mandate a broader and more systematic assessment of DOD's use of what the RAND study calls "levers of management discretion" to ameliorate their potential adverse impacts. In addition to cataloguing the techniques used and estimating their near-term costs, if any, Congress also may sponsor assessments of the impact of CRs over the longer term. After nearly a decade of managerial improvisation to cope with relatively long-term CRs' disruption of normal procedures, Congress may wish to look for evidence that the DOD has suffered adverse systemic impactsâproblems that go beyond marginal increases in cost or time to impair DOD's ability to protect the national security. Summary:	null	96	24,611	24,613	24,613	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Background Congress uses an annual appropriations process to fund the routine activities of most federal agencies. This process anticipates the enactment of 12 regular appropriations bills to fund these activities before the beginning of the fiscal year. When this process has not been completed before the start of the fiscal year, one or more continuing appropriations acts (commonly known as continuing resolutions or CRs) can be used to provide interim funding pending action on the regular appropriations. DOD has started the fiscal year under a CR for 13 of the past 18 years (FY2002-FY2019) and every year since FY2010 excluding FY2019. DOD has operated under a CR for an average of 119 days per year during the period FY2010-FY2019 compared to an average of 32 days per year during the period FY2002-FY2009 (see Figure 1 ). All told, since 2010, DOD has spent 1,186 daysâmore than 39 monthsâoperating under a CR, compared to 259 daysâless than 9 monthsâduring the 8 years preceding 2010. To preserve congressional prerogatives to shape federal spending in the regular appropriations bills, the eventual enactment of which is expected, CRs typically contain limitations intended to allow execution of funds in a manner that provides for continuation of projects and activities with relatively few departures from the way funds were allocated in the previous fiscal year. However, DOD funding needs typically change from year to year across the agency's dozens of appropriations accounts for a variety of reasons, including emerging, increasing, or decreasing threats to national security. If accountsâand activities within accountsâare funded by a CR at a lower level than was requested in the pending Administration budget, then DOD cannot obligate funds at the anticipated rate. This can restrict planned personnel actions, maintenance and training activities, and a variety of contracted support actions. Delaying or deferring such actions can also cause a ripple effect, generating personnel shortages, equipment maintenance backlogs, oversubscribed training courses, and a surge in end-of-year contract spending. Given the frequency of CRs in recent years, many DOD program managers and senior leaders work well in advance of the outcome of annual decisions on appropriations to minimize contracting actions planned for the first quarter of the coming fiscal year. The Defense Acquisition University, DOD's education service for acquisition program management, advises students that, "[m]embers of the [Office of the Secretary of Defense], the Services and the acquisition community must consider late enactment to be the norm [emphasis in original] rather than the exception and, therefore, plan their acquisition strategy and obligation plans accordingly." In anticipation of such a delay in the availability of full funding for programs, DOD managers can build program schedules in which planned contracting actions are pushed to later in the fiscal year when it is more likely that a full appropriation will have been enacted. Additionally, managers can take steps to defer hiring actions, restrict travel policies, or cancel nonessential education and training events for personnel to keep their spending within the confines of a CR. On their face, CRs are disruptive to routine agency operations and many of the procedures used by agencies to deal with limitations imposed by a CR entail costs. However, even though these disruptions have been routine for more than a decade, there has been little systematic analysis of the extent to which theses disruptions have led to measurable and significantly adverse impacts on U.S. military preparedness over the long run. Funding Available Under a CR An interim continuing resolution typically provides that budget authority is available at a certain rate of operations or funding rate for the covered projects and activities and for a specified period of time. The funding rate for a project or activity is based on the total amount of budget authority that would be available annually at the referenced funding level and is prorated based on the fraction of a year for which the interim CR is in effect. In recent fiscal years, the referenced funding level has been the amount of budget authority that was available under specified appropriations acts from the previous fiscal year, or that amount modified by some formula. For example, the first CR for FY2018 ( H.R. 601 \ P.L. 115-56 ) provided, "... such amounts as may be necessary, at a rate of operations as provided in the applicable appropriations Acts for fiscal year 2017 ... minus 0.6791%" (Division D, Section 101). While recent CRs typically have provided that the funding rates for certain accounts are to be calculated with reference to the funding rates in the previous year, Congress could establish a CR funding rate on any basis (e.g., the President's pending budget request, the appropriations bill for the pending year as passed by the House or Senate, or the bill for the pending year as reported by a committee of either chamber). Full Text Versus Formulaic CRs CRs have sometimes provided budget authority for some or all covered activities by incorporating the text of one or more regular appropriations bills for the current fiscal year. When this form of funding is provided in a CR or other type of annual appropriations act, it is often referred to as full text appropriations . When full text appropriations are provided, those covered activities are not funded by a rate for operations, but by the amounts specified in the incorporated text. This full text approach is functionally equivalent to enacting regular appropriations for those activities, regardless of whether that text is enacted as part of a CR. The "Department of Defense and Full-Year Continuing Appropriations Act, FY2011" ( P.L. 112-10 ) is one recent example. For DOD, the text of a regular appropriations bill was included as Division A, thus funding those covered activities via full text appropriations. In contrast, Division B of the bill provided funding for the projects and activities that normally would have been funded in the remaining eleven FY2011 regular appropriations according to a formula based on the previous fiscal year's appropriations laws. If formulaic interim or full-year continuing appropriations were to be enacted for DOD, the funding levels for both base defense appropriations and Overseas Contingency Operations (OCO) spending could be determined in a variety of ways. A separate formula could be established for defense spending, or the defense and nondefense spending activities could be funded under the same formula. Likewise, the level of OCO spending under a CR could be established by the general formula that applies to covered activities (as discussed above), or by providing an alternative rate or amount for such spending. For example, the first CR for FY2013 ( P.L. 112-175 ) provided the following with regard to OCO funding: Whenever an amount designated for Overseas Contingency Operations/Global War on Terrorism pursuant to Section 251(b)(2)(A) of the Balanced Budget and Emergency Deficit Control Act of 1985 (in this section referred to as an "OCO/GWOT amount") in an Act described in paragraph (3) or (10) of subsection (a) that would be made available for a project or activity is different from the amount requested in the President's fiscal year 2013 budget request, the project or activity shall be continued at a rate for operations that would be permitted by ... the amount in the President's fiscal year 2013 budget request. Additional Limitations that CRs May Impose CRs may contain limitations that are generally written to allow execution of funds in a manner that provides for minimal continuation of projects and activities in order to preserve congressional prerogatives prior to the time a full appropriation is enacted. As an example, an interim CR may prohibit an agency from initiating or resuming any project or activity for which funds were not available in the previous fiscal year. Congress has, in practice, included a specific section (usually Section 102) in the CR to expressly prohibit DOD from starting production on a program that was not funded in prior years (i.e., a new start ), and from increasing production rates above levels provided in the prior year. Congress may also limit certain contractual actions such as multiyear procurement contracts. Figure 2. Air Force Appropriations for Combat Rescue Helicopter An interim CR that uses the same formula to specify a funding rate for different appropriations accounts may cause problems for programs funded by more than one account, if the ratio of funding between the accounts changes from one year to the next. For example, as the Air Force program to procure a new combat rescue helicopter transitions from development to production between FY2019 and FY2020, the amount requested for R&D dropped by about $200 million while the amount requested for procurement rose by a 12-percent larger amount. Although the total amount requested for the program in FY2020 is thus $25 million higher than the total appropriated in FY2019, a CR that continued the earlier year's funding for the program would problematic: The nearly $200 million in excess R&D money could not be used to offset the more than $200 million shortfall in procurement funding, absent specific legislative relief. This kind of mismatch at the account level between the request and the CR is sometimes referred to as an issue with the color of money . Anomalies Even though CRs typically provide funds at a particular rate, CRs may also include provisions that enumerate exceptions to the duration, amount, or purposes for which those funds may be used for certain appropriations accounts or activities. Such provisions are commonly referred to as anomalies . The purpose of anomalies is to insulate some operations from potential adverse effects of a CR while providing time for Congress and the President to agree on full-year appropriations and avoiding a government shutdown. A number of factors could influence the extent to which Congress decides to include such additional authority or flexibility for DOD under a CR. Consideration may be given to the degree to which funding allocations in full-year appropriations differ from what would be provided by the CR. Prior actions concerning flexibility delegated by Congress to DOD may also influence the future decisions of Congress for providing additional authority to DOD under a longer-term CR. In many cases, the degree of a CR's impact can be directly related to the length of time that DOD operates under a CR. While some mitigation measures (anomalies) might not be needed under a short-term CR, longer-term CRs may increase management challenges and risks for DOD. An anomaly might be included to stipulate a set rate of operations for a specific activity, or to extend an expiring authority for the period of the CR. For example, the second CR for FY2017 ( H.R. 2028 \ P.L. 114-254 ) granted three anomalies for DOD: Section 155 funded the Columbia Class Ballistic Missile Submarine Program ( Ohio Replacement) at a specific rate for operations of $773,138,000. Section 156 allowed funding to be made available for multi-year procurement contracts, including advance procurement, for the AHâ64E Attack Helicopter and the UHâ60M Black Hawk Helicopter. Section 157 provided funding for the Air Force's KC-46A Tanker, up to the rate for operations necessary to support the production rate specified in the President's FY2017 budget request (allowing procurement of 15 aircraft, rather the FY2016 rate of 12 aircraft). In anticipation of an FY2018 CR, DOD submitted a list of programs that would be affected under a CR to the Office of Management and Budget (OMB). This "consolidated anomalies list" included approximately 75 programs that would be delayed by a prohibition on new starts and nearly 40 programs that would be negatively affected by a limitation on production quantity increases. OMB may or may not forward such a list to Congress as a formal request for consideration. Arguably, to the extent that anomalies make a CR more tolerable to an agency, they may reduce the incentive for Congress to reach a budget agreement. According to Mark Cancian, a defense budget analyst at the Center for Strategic and International Studies, "a CR with too many anomalies starts looking like an appropriations bill and takes the pressure off." H.R. 601 ( P.L. 115-56 ), the initial FY2018 CR, did not include any anomalies to address the programmatic issues included on the DOD list. H.R. 601 was extended through March 23, 2018, by four measures. The fourth measure ( P.L. 115-123 ) included an anomaly to address concerns raised by the Air Force regarding the effects of the CR on certain FY2018 construction requirements. How Agencies Implement a CR After enactment of a CR, OMB provides detailed directions to executive agencies on the availability of funds and how to proceed with budget execution. OMB will typically issue a bulletin that includes an announcement of an automatic apportionment of funds that will be made available for obligation, as a percentage of the annualized amount provided by the CR. Funds usually are apportioned either in proportion to the time period of the fiscal year covered by the CR, or according to the historical, seasonal rate of obligations for the period of the year covered by the CR, whichever is lower. A 30-day CR might, therefore, provide 30 days' worth of funding, derived either from a certain annualized amount that is set by formula or from a historical spending pattern. In an interim CR, Congress also may provide authority for OMB to mitigate furloughs of federal employees by apportioning funds for personnel compensation and benefits at a higher rate for operations, albeit with some restrictions. In 2017 testimony before the Senate Subcommittee on Federal Spending Oversight and Emergency Management, Committee on Homeland Security and Governmental Affairs, a senior Government Accountability Office (GAO) analyst remarked that CRs can create budget uncertainty and disruptions, complicating agency operations and causing inefficiencies. Director of Strategic Issues Heather Krause asserted that "this presents challenges for federal agencies continuing to carry out their missions and plan for the future. Moreover, during a CR, agencies are often required to take the most limited funding actions." Krause testified that agency officials report taking a variety of actions to manage inefficiencies resulting from CRs, including shifting contract and grant cycles to later in the fiscal year to avoid repetitive work, and providing guidance on spending rather than allotting specific dollar amounts during CRs, to provide more flexibility and reduce the workload associated with changes in funding levels. When operating under a CR, agencies encounter consequences that can be difficult to quantify, including additional obligatory paperwork, need for additional short-term contracting actions, and other managerial complications as the affected agencies work to implement funding restrictions and other limitations that the CR imposes. For example, the government can normally save money by buying in bulk under annual appropriations lasting a full fiscal year or enter into new contracts (or extend their options on existing agreements) to lock in discounts and exploit the government's purchasing power. These advantages may be lost when operating under a CR. Unique Implementation Challenges Faced by DOD All federal agencies face management challenges under a CR, but DOD faces unique challenges in providing the military forces needed to deter war and defend the country. In a letter to the leaders of the armed services committees dated September 8, 2017, then-Secretary of Defense James Mattis asserted that "longer term CRs impact the readiness of our forces and their equipment at a time when security threats are extraordinarily high. The longer the CR, the greater the consequences for our force." DOD officials argue that the department depends heavily on stable but flexible funding patterns and new start activities to maintain a modernized force ready to meet future threats. Former Defense Secretary Ashton Carter posited that CRs put commanders in a "straitjacket" that limits their ability to adapt, or keep pace with complex national security challenges around the world while responding to rapidly evolving threats like the Islamic State. Prohibitions on Certain Contracting Actions As discussed, a CR typically includes a provision prohibiting DOD from initiating new programs or increasing production quantities beyond the prior year's rate. This can result in delayed development, production, testing, and fielding of DOD weapon systems. An inability to execute funding as planned can induce costly delays and repercussions in the complex schedules of weapons system development programs. Under a CR, DOD's ability to enter into planned long-term contracts is also typically restricted, thus forfeiting the program stability and efficiencies that can be gained by such contracts. Additionally, DOD has testified to Congress that CRs impact trust and confidence with suppliers, which may increase costs, time, and potential risk. Misalignments in CR-Provided Funding Because CRs constrain funding by appropriations account rather than by program, DOD may encounter significant issues with programs that draw funds from several accounts. Already mentioned, above, is the color of money issue that can arise when a weapons program transitions from development into production. In such cases, the program could have excess R&D funding (based on the prior year's appropriation) and a shortfall in procurement funds needed to ramp up production. A CR also can result in problems specific to the apportionment of funding in the Navy's shipbuilding account, known formally as the Shipbuilding and Conversion, Navy (SCN) appropriation account. SCN appropriations are specifically annotated at the line-item level in the DOD annual appropriations bill. As a consequence, under a CR, SCN funding is managed not at the appropriations account level, but at the line-item level. For the SCN accountâuniquely among DOD acquisition accountsâthis can lead to misalignments (i.e., excesses and shortfalls) in funding under a CR for SCN-funded programs, compared to the amounts those programs received in the prior year. The shortfalls in particular can lead to program execution challenges under an extended or full-year CR. Assessing the Impact on DOD Published reports on the effect of CRs on agency operations typically provide anecdotal assertions that such funding measures increase costs and reduce efficiencies. However, these accounts typically do not provide data that would permit a systematic analysis of CR effects. Nor do they address the impact of CR-caused near-term bureaucratic disruption on the combat capability and readiness of U.S. forces over the longer-term. One exception to this general ruleâdiscussed belowâis a 2019 study by the RAND Corporation of the effect of CRs on a limited number of DOD procurement programs. That analysis, "did not find strong evidence â¦ indicating that CRs are generally associated with delays in procurement awards or increased costs," although the authors of the study emphasized that, because of its limited scope, the study, "does not imply that the widely expressed concerns regarding CR effects are invalid." The Navy's $4 Billion Price Tag One widely publicized estimate of the cost of recent CRs stands apart in the level of detail available on how the figure was calculated. In a December 4, 2017, speech at a defense symposium, Secretary of the Navy Richard Spencer said that CRs had cost the Navy, "about $4 billion since 2011." CRS asked the Navy for the source of the $4 billion figure and for details on how it was calculated. In response, the Navy provided CRS with an information paper that stated the following in part: CRs have averaged 106 days per year in the last decade, or 29% of each year. This means over one quarter of every year is lost or has to be renegotiated for over 100,000 DON [Department of the Navy] contracts (conservative estimate) and billions of dollars. Contractors translate this CR uncertainty into the prices they charge the government. â The cost factors at work here are: price uncertainty caused by the CR and reflected in higher rates charged to the government; government time to perform multiple incremental payments or renegotiate; and contractor time to renegotiate or perform unnecessary rework caused by the CR. These efforts are estimated at approximately 1/7 th of a man-year for all stakeholders or $26K [$26,000] per average contract. â $26K x 100,000 contracts = $2.6B [$2.6 billion] per year. While the estimate for each contract would be different, it can readily be seen that this is a low but reasonable estimate. The Navy paper did not provide any justification for the assumptions underpinning that calculation. RAND Procurement Study The literature on CR effects includes one relatively rigorous effort to determine whether multi-month CRs are associated with delays and cost increases in DOD procurement programs. The study, conducted in 2017 by the RAND Corporation, was sponsored by the office of DOD's senior acquisition official (the then-Under Secretary of Defense for Acquisition, Technology, and Logistics). Summarizing its review of the literature on CR effects, the RAND team said Because of a lack of quantitative data, many of the [asserted] consequences â¦ would be very difficult to estimate quantitatively or to conclusively demonstrate. All of the research that we reviewed on the consequences of operating under a CR employed qualitative approaches that focused on case studies, assertions, and anecdotal information. To see whether CRs systematically are associated with cost increases and delays in DOD procurements, RAND examined 151 procurement awards for relatively high-profile programs during FY2013-FY2015. In each of those years, DOD operated under CRs for several months. Comparing procurement awards originally scheduled to occur while the agency was under a CR with those made after a regular appropriations bill had been enacted, the study found no statistically significant difference between the two groups in whether an award was delayed; if it was delayed, the length of the delay; or whether the unit cost increased compared with the projected cost. RAND also compared the 151 procurement awards made during FY2013-FY2015âyears when there were prolonged CRsâwith 48 awards made during FY1999, when DOD operated under a CR for only the first 3 weeks of the fiscal year. A comparison of the awards made during the period of "long-CRs" (2013-15) with awards made during a period in which there was one relatively short CR (FY1999) showed no statistically significant difference in the percentage of awards that were delayed; for cases in which a delay occurred, longer delays in FY2013-FY2015 than in the earlier period; and larger unit-cost increases (relative to original projections) for cases during the FY1999 (i.e., the "short-CR" period). In sum, RAND concluded, "we did not find strong evidence â¦ that CRs are generally associated with delays in procurement awards or increased costs. On the other hand, given the limitations inherent in our statistical analysis, we cannot use its results to rule out the occurrence of these kinds of negative effects." Issues for Congress Inasmuch as CRs have become relatively routine, Congress may wish to mandate a broader and more systematic assessment of DOD's use of what the RAND study calls "levers of management discretion" to ameliorate their potential adverse impacts. In addition to cataloguing the techniques used and estimating their near-term costs, if any, Congress also may sponsor assessments of the impact of CRs over the longer term. After nearly a decade of managerial improvisation to cope with relatively long-term CRs' disruption of normal procedures, Congress may wish to look for evidence that the DOD has suffered adverse systemic impactsâproblems that go beyond marginal increases in cost or time to impair DOD's ability to protect the national security.	Summary:	gov_report	1,024	null	14
crs_R45755	crs_R45755_0	You are given a report by a government agency. Write a one-page summary of the report. Report: FY2020 Consideration: Overview of Actions The first section of this report provides an overview of the consideration of FY2020 legislative branch appropriations, with subsections covering each action to date, including the initial submission of the request on March 11, 2019; hearings held by the House Legislative Branch Appropriations Subcommittee in February, March, and April 2019 and hearings held by the Senate Legislative Branch Appropriations Subcommittee in March and April 2019; the House subcommittee markup held on May 1, 2019; the House full committee markup on May 9, 2019, and reporting of H.R. 2779 ; the Office of Management and Budget (OMB) letter from May 8, 2019, with the Administration's position on the legislative branch budget; discussion in June of the potential inclusion of legislative branch funding in H.R. 2740 (Rules Committee Print 116-17); the Senate full committee markup on September 26, 2019, and reporting of S. 2581 ; the enactment on September 27, 2019, of a continuing resolution providing funding through November 21 ( P.L. 116-59 ), and the enactment on November 21, 2019, of a continuing resolution providing funding through December 20 ( P.L. 116-69 ); and the enactment of the Further Consolidated Appropriations Act ( P.L. 116-94 ) on December 20, 2019, which included funding for legislative branch activities for FY2020 in Division E and additional language related to the legislative branch in Division P. It is followed by a section on prior year actions and funding, which contains a historical table and figure. The report then provides an overview of the FY2020 budget requests of individual legislative branch agencies and entities. Table 5 through Table 9 list enacted funding levels for FY2019 and the requested, House-reported, Senate-reported, and enacted levels for FY2020, while the Appendix lists House, Senate, and conference bills and reports; public law numbers; and enactment dates since FY1998. Status of FY2020 Appropriations: Dates and Documents Submission of FY2020 Budget Request on March 11, 2019 The White House submitted its budget for FY2020, which includes the legislative branch budget request, on March 11, 2019. As explained by OMB, The budget covers the agencies of all three branches of GovernmentâExecutive, Legislative, and Judicialâand provides information on Government-sponsored enterprises. In accordance with law or established practice, OMB includes information on agencies of the Legislative Branch, the Judicial Branch, and certain Executive Branch agencies as submitted by those agencies without change. The independence of the submissions by the legislative branch agencies and entities is codified in Title 31, Section 1105, of the U.S. Code , which states the following: Estimated expenditures and proposed appropriations for the legislative branch and the judicial branch to be included in each budget ... shall be submitted to the President ... and included in the budget by the President without change. Furthermore, Division C of the FY2012 Consolidated Appropriations Act ( P.L. 112-74 ) added language to Title 31, Section 1107, relating to budget amendments, stating the following: The President shall transmit promptly to Congress without change, proposed deficiency and supplemental appropriations submitted to the President by the legislative branch and the judicial branch. The FY2020 budget contained a request for $5.288 billion in new budget authority for legislative branch activities (+9.3%). Senate and House Hearings on the FY2020 Budget Requests Table 2 lists the dates of hearings of the legislative branch subcommittees in February, March, and April 2019. Prepared statements of witnesses were posted on the subcommittee websites, and hearing transcripts were published by the Government Publishing Office. House Appropriations Committee Subcommittee on the Legislative Branch Markup On May 1, 2019, the House Appropriations Committee Subcommittee on the Legislative Branch held a markup of the FY2020 bill. The subcommittee recommended $3.943 billion, a $135.2 million increase (+3.6%) from the comparable 2019 enacted level, not including Senate items, which are historically considered by the Senate and not included in the House bill. No amendments were offered, and the bill was ordered reported to the full committee by voice vote. House Appropriations Committee Legislative Branch Markup On May 9, 2019, the House Appropriations Committee met to mark up the FY2020 bill reported from its legislative branch subcommittee. The following amendments were considered: A manager's amendment, offered by Subcommittee Chairman Tim Ryan of Ohio, that would increase funding for the Veterans' History Project by $1.0 million, add report language, and include one technical change. The amendment was adopted by voice vote. A manager's amendment, offered by Subcommittee Chairman Tim Ryan of Ohio, that would increase the overall funding for the bill by $29.0 million to reflect revised 302(b) subcommittee allocations adopted by the committee on May 8 ( H.Rept. 116-59 ). The amendment would increase total House funding by $19.0 million and Architect of the Capitol funding by $10.0 million. Subcommittee Ranking Minority Member Jaime Herrera Beutler offered an amendment to the manager's amendment that would have stricken this additional funding and instead placed it in a spending reduction account. The amendment to the amendment failed by recorded vote (23-28), and the amendment was adopted by voice vote. The bill was ordered reported by recorded vote (28-22). As amended, the bill provided $3.972 billion, not including Senate items (+$164.2 million). OMB Letter of May 8, 2019 As it did during consideration of the FY2019 legislative branch appropriations bill, OMB submitted a letter with the Administration's views on the overall size of the legislative branch bill as well as the funding levels for specific accounts. In particular, the Administration letter cited funding levels for the House of Representatives and the Government Accountability Office (GAO). Discussion of the Legislative Branch Bill During Consideration of a Rule for Consideration of H.R. 2740 On June 3, the House Committee on Rules announced its intention to consider and report a resolution that would structure consideration in the House of H.R. 2740 , the Labor, Health and Human Services, and Education appropriations bill. The committee indicated that the resolution reported from the Rules Committee would add the text of four additional appropriations bills to the text of H.R. 2740 . This proposal would include the text of H.R. 2779 , the legislative branch appropriations bill as reported by the Committee on Appropriations (to be included as Division B of H.R. 2740 ). The Rules Committee made available the legislative text that included the five appropriations bills and directed Members to draft their amendments to that text (House Rules Committee Print 116-17). Proposed amendments were due to the committee by 10:00 a.m. on Friday, June 7, 2019. A total of 41 draft amendments were submitted related to legislative branch appropriations (Division B). Following reported discussions related to the automatic Member pay adjustment, the resolution reported from the House Rules Committee further altered the version of H.R. 2740 that would be considered by the House, removing the text of the legislative branch appropriations bill. The legislative branch appropriations bill neither funds nor adjusts Member salaries. Provisions prohibiting the automatic Member pay adjustment are sometimes included in the annual appropriations bills. A provision prohibiting the automatic Member pay adjustments could be included in any bill, or be introduced as a separate bill. H.R. 2740 , the Labor, Health and Human Services, Education, Defense, State, Foreign Operations, and Energy and Water Development Appropriations Act, 2020, was ultimately agreed to in the House on June 19, 2019, without the legislative branch appropriations funding. Senate Appropriations Committee Legislative Branch Markup and Reporting On September 26, the Senate Appropriations Committee met to mark up its version of the FY2020 legislative branch appropriations bill. It reported the bill on the same day (by recorded vote, 31-0; S. 2581 , S.Rept. 116-124 ). S. 2581 would have provided $3.600 billion, not including House items, an increase of $187.6 million (+5.5%) from the comparable FY2019 enacted level. Continuing Appropriations Resolutions Enacted Prior to the start of FY2020 on October 1, 2019, a continuing appropriations resolution (CR) providing funding for legislative branch activities through November 21, 2019, was enacted ( P.L. 116-59 , September 27). Another CR, providing funding through December 20, 2019, was enacted on November 21, 2019 ( P.L. 116-69 ). FY2020 Funding Enacted on December 20, 2019 The Further Consolidated Appropriations Act ( P.L. 116-94 ) was enacted on December 20, 2019. The act provides $5.049 billion for legislative branch activities for FY2020 in Division E (+$202.8 million, or +4.2%, from the FY2019 level). In addition, Division P (Other Matter) contains titles related to the legislative branch, including Title XIVâLibrary of Congress Technical Corrections . This title includes amendments related to the American Folklife Preservation Act; the National Library Service for the Blind and Print Disabled; establishing a uniform pay scale for Library of Congress Career Senior Executive Positions; and removing a cap on personnel for the Copyright Royalty Judges Program. Title XVâSenate Entities . This title includes amendments to 2 U.S.C. Â§6567 ("Funds for Secretary of Senate to assist in proper discharge within United States of responsibilities to foreign parliamentary groups or other foreign officials") and 2 U.S.C. Â§6616 ("Support services for Senate during emergency; memorandum of understanding with an executive agency"). Title XVIâLegislative Branch Inspectors General Independence . This title focuses on the Inspectors General for the Library of Congress, the Office of the Architect of the Capitol, and the Government Publishing Office. It includes sections on pay, limits on bonuses, counsel, and authorities; law enforcement authority; budgetary independence; and hiring authority. Title XVIIâManaging Political Fund Activity . This title states that the "Majority Leader and the Minority Leader may each designate up to 2 employees of their respective leadership office staff as designees referred to in the second sentence of paragraph 1 of rule XLI of the Standing Rules of the Senate." Funding in Prior Years: Brief Overview and Trends Legislative Branch: Historic Percentage of Total Discretionary Budget Authority The percentage of total discretionary budget authority provided to the legislative branch has remained relatively stable at approximately 0.4% since at least FY1976. The maximum level (0.48%) was in FY1995, and the minimum (0.31%) was in FY2009. FY2019 FY2019 funding was provided in Division B of the Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs Appropriations Act, 2019 ( P.L. 115-244 ), which was enacted on September 21, 2018. The $4.836 billion provided for the legislative branch represents an increase of $136.0 million (+2.9%) from the FY2018 enacted level. An additional $10.0 million in FY2019 supplemental appropriations for GAO "for audits and investigations related to Hurricanes Florence, Lane, and Michael, Typhoons Yutu and Mangkhut, the calendar year 2018 wildfires, earthquakes, and volcano eruptions, and other disasters declared pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act" was included in two bills considered in the 116 th Congress: H.R. 268 , which passed the House on January 16, 2019, but cloture was not invoked in the Senate; and H.R. 2157 , which passed the House on May 10 (Roll no. 202) and the Senate (with an amendment) on May 23, 2019 (Record Vote Number: 129). H.R. 2157 was enacted June 6, 2019 ( P.L. 116-20 ). FY2018 FY2018 funding was provided in Division I of the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), which was enacted on March 23, 2018. The $4.700 billion provided by the act represented an increase of $260.0 million (+5.9%) from the FY2017 enacted level. In addition, P.L. 115-123 , enacted February 9, 2018, provided $14.0 million to GAO "for audits and investigations relating to Hurricanes Harvey, Irma, and Maria and the 2017 wildfires." (Title IX of Division B). FY2017 FY2017 funding was provided in Division I of the Consolidated Appropriations Act, 2017 ( P.L. 115-31 ), which was enacted on May 5, 2017. The $4.440 billion provided by the act represented a $77.0 million increase (+1.7%) from the FY2016 enacted level. FY2016 FY2016 funding was provided in Division I of the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ), which was enacted on December 18, 2015. The $4.363 billion provided by the act represented a $63.0 million increase (+1.5%) from the FY2015 enacted level. FY2015 FY2015 funding was provided in Division H of the Consolidated and Further Continuing Appropriations Act, 2015 ( P.L. 113-235 ), which was enacted on December 16, 2014. The $4.300 billion provided by the act represented an increase of $41.7 million (+1.0%) from FY2014. FY2014 Neither a legislative branch appropriations bill nor a continuing resolution (CR) containing FY2014 funding was enacted prior to the beginning of the fiscal year on October 1, 2013. A funding gap, which resulted in a partial government shutdown, ensued for 16 days. The funding gap was terminated by the enactment of a CR ( P.L. 113-46 ) on October 17, 2013. The CR provided funding through January 15, 2014. Following enactment of a CR on January 15, 2014 ( P.L. 113-73 ), a consolidated appropriations bill was enacted on January 17 ( P.L. 113-76 ), providing $4.259 billion for the legislative branch for FY2014. FY2013 FY2013 funding of approximately $4.061 billion was provided by P.L. 113-6 , which was signed into law on March 26, 2013. The act funded legislative branch accounts at the FY2012 enacted level, with some exceptions (also known as "anomalies"), not including across-the-board rescissions required by Section 3004 of P.L. 113-6 . Section 3004 was intended to eliminate any amount by which the new budget authority provided in the act exceeded the FY2013 discretionary spending limits in Section 251(c)(2) of the Balanced Budget and Emergency Deficit Control Act, as amended by the Budget Control Act of 2011 ( P.L. 112-25 ) and the American Taxpayer Relief Act of 2012 ( P.L. 112-240 ). Subsequent to the enactment of P.L. 113-6 , OMB calculated that additional rescissions of 0.032% of security budget authority and 0.2% of nonsecurity budget authority would be required. The act did not alter the sequestration reductions implemented on March 1, which reduced most legislative branch accounts by 5.0%. The accompanying OMB report indicated a dollar amount of budget authority to be canceled in each account containing nonexempt funds. FY2012 and Prior Division G of the FY2012 Consolidated Appropriations Act ( P.L. 112-74 ) provided $4.307 billion for the legislative branch. This level was $236.9 million below (-5.2%) the FY2011 enacted level. P.L. 112-10 provided $4.543 billion for legislative branch operations in FY2011. This level represented a $125.1 million decrease (-2.7%) from the $4.668 billion provided in the FY2010 Legislative Branch Appropriations Act ( P.L. 111-68 ) and the FY2010 Supplemental Appropriations Act ( P.L. 111-212 ). The FY2009 Omnibus Appropriations Act provided $4.402 billion. In FY2009, an additional $25.0 million was provided for GAO in the American Recovery and Reinvestment Act of 2009. P.L. 111-32 , the FY2009 Supplemental Appropriations Act, also contained funding for a new Capitol Police radio system ($71.6 million) and additional funding for the Congressional Budget Office (CBO) ($2.0 million). As seen in Table 3 , legislative branch funding decreased each year from FY2010 through FY2013. Funding did not exceed the FY2010 level until FY2018. Figure 1 shows the same information graphically, while also demonstrating the division of budget authority across the legislative branch in FY2019. Figure 2 shows the timing of legislative branch appropriations actions, including the issuance of House and Senate reports, bill passage, and enactment, from FY1996 through FY2020. It shows that fiscal year funding for the legislative branch has been determined on or before October 1 six times during this period (FY1997, FY2000, FY2004, FY2006, FY2010, and FY2019); twice during the first month of the fiscal year (FY1998 and FY1999); twice in November (FY1996 and FY2002); seven times in December (FY2001, FY2005, FY2008, FY2012, FY2015, FY2016, and FY2020); and eight times in the next calendar year (FY2003, FY2007, FY2009, FY2011, FY2013, FY2014, FY2017, and FY2018). FY2017 funding, enacted on May 5, 2017, represented the latest date of enactment during this period. FY2020 Legislative Branch Funding Issues The following sections discuss the various legislative branch accounts. During consideration of the legislative branch bills, the House and Senate conform to a "longstanding practice under which each body of Congress determines its own housekeeping requirements and the other concurs without intervention." Senate Overall Funding The Senate requested $1.046 billion for FY2020, an 11.9% increase over the $934.8 million provided in FY2019. The Senate-reported bill recommended, and the FY2020 act provides, $969.4 million (+$34.6 million, +3.7%). Additional information on the Senate account is presented in Table 6 . Senate Committee Funding Appropriations for Senate committees are contained in two accounts. 1. The inquiries and investigations account contains funds for all Senate committees except Appropriations. The FY2019 level of $133.3 million was continued in the FY2020 request, the Senate-reported bill, and the FY2020 act. 2. The Committee on Appropriations account contains funds for the Senate Appropriations Committee. The FY2020 enacted level of $15.8 million, which is equivalent to the Senate-requested and -reported level, represents an increase of $297,000 (+1.9%) from the $15.5 million provided in FY2019. Senators' Official Personnel and Office Expense Account19 The Senators' Official Personnel and Office Expense Account provides each Senator with funds to administer an office. It consists of an administrative and clerical assistance allowance, a legislative assistance allowance, and an official office expense allowance. The funds may be used for any category of expenses, subject to limitations on official mail. The Senate requested $531.1 million, $102.1 million above (+23.8%) the $429.0 million provided in FY2019. Of this amount, $5.0 million is provided for compensating Senate interns. The Senate-reported bill recommended, and the FY2020 act provides, $449.0 million, an increase of $20.0 million (+4.7%). Administrative Provisions S. 2581 included two administrative provisions: 1. One provision, which was first included in FY2016, would require amounts remaining in the Senators' Official Personnel and Expense Account (SOPOEA) to be used for deficit reduction or to reduce the federal debt. This provision was included in P.L. 116-94 . 2. One provision would continue the freeze on Member salaries at the 2009 level. Member salaries are funded in a permanent appropriations account, and the legislative branch bill does not contain language funding or increasing Member pay. A provision prohibiting the automatic Member pay adjustments could be included in any bill, or be introduced as a separate bill. This provision was included in Section 7 of P.L. 116-94 . House of Representatives Overall Funding The House requested $1.356 billion for FY2020, an increase of 10.1% over the $1.232 billion provided for FY2019. The FY2020 act provides $1.366 billion, an increase of 10.8%. Additional information on headings in the House of Representatives account is presented in Table 7 . House Committee Funding Funding for House committees is contained in the appropriation heading "committee employees," which typically comprises two subheadings. The first subheading contains funds for personnel and nonpersonnel expenses of House committees, except the Appropriations Committee, as authorized by the House in a committee expense resolution. The House requested $139.1 million, an increase of $11.2 million (+8.8%) from the FY2019 enacted level of $127.9 million. The House-reported bill recommended, and the FY2020 act provides, $135.4 million, an increase of $7.5 million (+5.8%). The second subheading contains funds for the personnel and nonpersonnel expenses of the Committee on Appropriations. The House requested $25.4 million, an increase of $2.3 million (+10.0%) from the FY2019 enacted level of $23.1 million. The House-reported bill recommended, and the FY2020 act provides, $24.3 million, an increase of $1.2 million (+5.0%). Members' Representational Allowance21 The Members' Representational Allowance (MRA) is available to support Members in their official and representational duties. The House-requested level of $613.0 million represents an increase of $39.4 million (+6.9%) from the $573.6 million provided in FY2019. The House-reported bill recommended, and the FY2020 act provides, $615.0 million, an increase of $41.4 million (+7.2%). A separate account, included in the House-reported bill and the FY2020 act, contains $11.0 million for interns in House Member offices, and $365,000 for interns in House leadership offices. Administrative Provisions The House requested several administrative provisions related to unexpended balances from the MRA; limiting amounts available from the MRA for leased vehicles; providing additional transfer authority; establishing the allowance for compensation of interns in Member offices; providing for cybersecurity assistance from other federal entities; limiting or prohibiting the delivery of the printed B udget of the United States , the Federal Register , and the House telephone directory; allowing the use of expired funds for the payment of death gratuities for House employees; and allowing the use of expired funds for the employee compensation fund and unemployment compensation. The House-reported bill contained the provisions related to the unexpended MRA balances, leased vehicles, cybersecurity assistance, and use of expired funds. In addition, the House-reported bill included provisions relating to the compensation of interns in Member and Leadership offices; rescinding amounts in the Stationery and Page Dorm revolving funds; and providing for reduction in the amount of tuition charged for children of House Child Care Center employees. P.L. 116-94 includes the provisions from the House-reported bill. Support Agency Funding U.S. Capitol Police (USCP) The USCP is responsible for the security of the Capitol Complex, including, for example, the U.S. Capitol, the House and Senate office buildings, the U.S. Botanic Garden, and the Library of Congress buildings and adjacent grounds. The FY2019 enacted level was $456.3 million. In comparison, levels considered for FY2020 include the following: Requested: $463.3 million (+1.5%) House-reported: $463.3 million (+1.5%) Senate-reported: $464.3 million (+1.8%) Enacted: $464.3 million (+1.8%) Additional information on the USCP is presented in Table 8 . Appropriations for the police are contained in two accountsâa salaries account and a general expenses account. 1. Salariesâthe FY2019 act provided $374.8 million for salaries. The USCP requested, and the House-reported bill would have provided, $378.1 million (+0.9%). The Senate-reported bill recommended, and the FY2020 act provides, $379.1 million (+1.1%). 2. General expensesâthe FY2019 act provided $81.5 million for general expenses. The USCP-requested level of $85.3 million (+4.6%) was contained in the House-reported and Senate-reported bills and the FY2020 act. Another appropriation relating to the USCP appears within the Architect of the Capitol account for Capitol Police buildings and grounds. The FY2019 level was $57.7 million. The USCP requested $54.97 million (-4.8%); the House-reported bill would have provided $52.8 million (-8.4%); the Senate-reported bill would have provided $50.3 million (-12.8%); and the FY2020 act provides $55.2 million (-4.3%). Administrative Provision The USCP requested, and the House-reported bill and P.L. 116-94 contain, an administrative provision increasing the total limit on student loan repayments from $40,000 to $60,000. The Senate-reported bill did not include this provision. Office of Congressional Workplace Rights Formerly known as the Office of Compliance, the Office of Congressional Workplace Rights (OCWR) was renamed by the Congressional Accountability Act of 1995 Reform Act ( P.L. 115-397 ). It is an independent and nonpartisan agency within the legislative branch, and it was originally established to administer and enforce the Congressional Accountability Act of 1995. The act applies various employment and workplace safety laws to Congress and certain legislative branch entities. The FY2019 enacted level was $6.3 million, which was continued in the FY2020 request, the House-reported and Senate-reported versions of the bill, and the FY2020 act. Congressional Budget Office (CBO) CBO is a nonpartisan congressional agency created to provide objective economic and budgetary analysis to Congress. CBO cost estimates are required for any measure reported by a regular or conference committee that may affect revenues or expenditures. The FY2019 level was $50.7 million. In comparison, levels considered for FY2020 include the following: Requested: $53.6 million (+5.6%) House-reported: $52.7 million (+3.8%) Senate-reported: $54.9 million (+8.3%) Enacted: $54.9 million (+8.3%) Office of Technology Assessment (OTA) Since the closure of OTA, which was a legislative branch agency established in 1972 and last funded in FY1996, Congress has periodically reexamined funding for scientific and technological studies by the legislative branch. Some Members have expressed support for the refunding of OTA through the distribution of "Dear Colleague" letters, at committee hearings and in committee prints, and through the introduction of legislation or amendments. Since FY2002, funding for technology assessments has also been provided to GAO, with frequent references in appropriations and conference reports on the legislative branch appropriations bills. More recently, and in response to language in the FY2019 Senate and conference reports, GAO announced the formation of a new Science, Technology Assessment, and Analytics Team on January 29, 2019. Additionally, the conference report to accompany the FY2019 legislative branch appropriations bill ( H.R. 5895 ) required a study on technology assessments available to Congress: Technology Assessment Study: The Committees have heard testimony on, and received dozens of requests advocating for restoring funding to the Office of Technology Assessment, and more generally on how Congress equips itself with the deep technical advice necessary to understand and tackle the growing number of science and technology policy challenges facing our country. The conferees direct the Congressional Research Service (CRS) to engage with the National Academy of Public Administration or a similar external entity to produce a report detailing the current resources available to Members of Congress within the Legislative Branch regarding science and technology policy, including the GAO. This study should also assess the potential need within the Legislative Branch to create a separate entity charged with the mission of providing nonpartisan advice on issues of science and technology. Furthermore, the study should also address if the creation of such entity duplicates services already available to Members of Congress. CRS should work with the Committees in developing the parameters of the study and once complete, the study should be made available to relevant oversight Committees. The FY2020 House-reported bill would have provided $6.0 million for restarting OTA. The funding would remain available through FY2021. H.Rept. 116-64 further stated the following: To do its job in this modern era, Congress needs to understand and address the issues and risks resulting from a wide range of rapid technological developments such as cryptocurrencies, autonomous vehicles, gene editing, artificial intelligence, and the ever-expanding use of social media platforms, to give just a few examples. A re-opened OTA will play an important role in providing accurate, professional, and unbiased information about technological developments and policy options for addressing the issues those developments raise. In that role, OTA will complement the work of the Government Accountability Office in the area of science and technology.... Since the de-funding of OTA in 1995, there have been several unsuccessful attempts to restore the office. During that time, it has become increasingly clear that Congress does not have adequate resources available for the in-depth, high level analysis of fast-breaking technology developments and their public policy implications that was formerly provided by OTA. While the Government Accountability Office (GAO) has increased its technology assessment activities attempting to fill that gap, the structure and culture of GAO somewhat constrain its ability to replicate OTA. The Office's governance by a bipartisan board and its ability to tap outside expert resources and rely on a Technology Assessment Advisory Council provide the capacity to offer policy recommendation options to Congress, which are not available from other Congressional sources. The Senate-reported bill would not restart OTA, but S.Rept. 116-124 states that the Committee looks forward to reviewing the recommendations of the National Academy of Public Administration study currently underway, including the evaluation of options available to Congress in the area of science and technology. The Committee will continue to engage key authorizing committees and interested members as these discussions continue. S.Rept. 116-124 also addresses the role of the new GAO Science, Technology Assessment, and Analytics Team (STAA), stating In consultation with internal and external stakeholders, academic and nonprofit organizations, and Members of Congress, the STAA team submitted its plan for staffing needs, resources, areas of expertise, and the products and services that the team will provide or are currently providing to Congress. The plan demonstrates STAA's value and ability to assess upcoming technological and digital innovations. Presently, the STAA is providing Congress with technology assessments, technical assistance, and reports in the areas of oversight of Federal technology and science programs, as well as best practices in engineering sciences and cybersecurity. The Committee applauds the efforts of GAO's STAA team and encourages STAA to continue providing Congress with unbiased explanatory data while also exploring new areas for independent science and technology guidance, relevant to Congress. The National Academy of Public Administration (NAPA) study was released on November 14, 2019. It examined three options: Option 1âEnhancing Existing Entities Option 2âCreating a New Agency Option 3âEnhance Existing Entities and Create an Advisory Office NAPA recommended enhancing technology assessment capabilities of both CRS and GAO, while also establishing (1) an Office of the Congressional Science and Technology Advisorâled by an appointee of the House and Senate leadership and assisted by a small staffâand (2) a Congressional Science and Technology Coordinating Councilâchaired by the Congressional Science and Technology Advisorâto enhance coordination between GAO and CRS. The FY2020 act did not provide funding for restarting OTA. Rather, the explanatory statement accompanying H.R. 1865 stated the following: Science and Technology Needs in Congress : The report released on November 14, 2019, by the National Academy of Public Administration (NAPA) identified the existing gaps in science and technology expertise and resources available to Congress. The Committees, Members, stakeholders and other committees of jurisdiction working together will continue to evaluate the recommendations in the report to address this gap.... Science and Technology Issues : The funding provided will allow GAO to increase support for Congress' work on evolving science and technology issues. The 2019 report from the National Academy of Public Administration (NAPA) identified the need for GAO to focus its advice to Congress on technical assessments and short-to-medium term studies. The study also highlighted that although GAO's support requests from Congress have increased, GAO should consider expanding its outreach to the science and technology community and coordination with CRS to better fill these gaps. GAO is encouraged to dedicate a specific number of experts to work exclusively on GAO's Science, Technology Assessment, and Analytics (STAA) team that was created in January 2019, a recommendation that was included in the NAPA report. Architect of the Capitol (AOC) The Architect of the Capitol (AOC) is responsible for the maintenance, operation, development, and preservation of the U.S. Capitol Complex, which includes the Capitol and its grounds, House and Senate office buildings, Library of Congress buildings and grounds, Capitol Power Plant, Botanic Garden, Capitol Visitor Center, and USCP buildings and grounds. The AOC is responsible for the Supreme Court buildings and grounds, but appropriations for their expenses are not contained in the legislative branch appropriations bill. The FY2019 level was $733.7 million. In comparison, levels considered for FY2020 include the following: Requested: $831.7 million (+13.3%) House-reported: $624.7 million (-2.4%, not including Senate-items) Senate-reported: $585.8 million (+9.2%, not including House-items) Enacted: $695.9 million (-5.2%) Operations of the AOC are funded in the following 10 accounts: capital construction and operations, Capitol building, Capitol grounds, Senate office buildings, House office buildings, Capitol Power Plant, Library buildings and grounds, Capitol Police buildings and grounds, Capitol Visitor Center, and Botanic Garden. Additional funding information on the individual AOC accounts is presented in Table 9 . Administrative Provision The AOC also requested one administrative provision that prohibits the use of funds for bonuses for contractors behind schedule or over budget. This provision has been included in the annual appropriations acts since FY2015. The House-reported version of the provision would apply to FY2020 and each succeeding fiscal year. The Senate-reported bill included the annual provision, which was included in P.L. 116-94 . Library of Congress (LOC) The LOC serves simultaneously as Congress's parliamentary library and the de facto national library of the United States. Its broader services to the nation include the acquisition, maintenance, and preservation of a collection of more than 167 million items in various formats; hosting nearly 1.9 million visitors annually; service to the general public and scholarly and library communities; administration of U.S. copyright laws by its Copyright Office; and administration of a national program to provide reading material to the blind and physically handicapped. Its direct services to Congress include the provision of legal research and law-related services by the Law Library of Congress, and a broad range of activities by CRS, including in-depth and nonpartisan public policy research, analysis, and legislative assistance for Members and committees and their staff; congressional staff training; information and statistics retrieval; and continuing legal education for Members of both chambers and congressional staff. The FY2019 level was $696.1 million. In comparison, levels considered for FY2020 include the following: Requested: $747.1 million (+7.3%) House-reported: $720.3 million (+3.5%) Senate-reported: $735.8 million (+5.7%) Enacted: $725.4 million (+4.2%) These figures do not include additional authority to spend receipts. The House Appropriations Committee report ( H.Rept. 116-64 ) explains a change in the technology funding practice that affected the four LOC appropriations headings: Appropriations Shifts to Reflect Centralized Funding for Information Technology : During fiscal year 2018, in an effort to reduce duplication, increase efficiency, and better utilize specialized expertise, the Library of Congress began providing more Information Technology (IT) services centrally though its Office of the Chief Information Officer (OCIO) rather than in the Library's various component organizations. In fiscal years 2018 and 2019, Library components which have separate appropriations accounts reimbursed the main Library of Congress Salaries and Expenses account through intra-agency agreements for the IT services being provided to them centrally by the OCIO under this initiative. For fiscal year 2020, however, the Library has requested that funding for centralized IT services be appropriated directly to the main Salaries and Expenses account for use by the OCIO instead of to the component organizations receiving the services, in order to reflect where services are actually being performed and avoid the need for repeated reimbursement transactions. The Committee has agreed to this request. As a result, the Committee bill reflects a shift in appropriations totaling $13,556,000 to the Library of Congress Salaries and Expenses account, with $2,708,000 of that shift coming from the Copyright Office, $8,767,000 coming from the Congressional Research Service, and $2,081,000 coming from the National Library Service for the Blind and Physically Handicapped. H.Rept. 116-64 further contains a "note regarding IT centralization" accompanying each heading, comparing the FY2020 House-reported level to the FY2019 enacted level after accounting for this shift. The Senate Appropriations Committee report ( S.Rept. 116-124 ) similarly addressed the centralization, stating the following: The recommendation for this account also reflects a shift in appropriations associated with the centralization of information technology [IT] funding from across the Library into the Office of Chief Information Officer [OCIO]. A total of $13,556,000 will move to the OCIO in fiscal year 2020, reflecting the cost of IT activities that were funded previously within the Congressional Research Service, Copyright Office, and the National Library Service for the Blind and Physically Handicapped. The realignment of these funds will help facilitate the final phases of IT centralization across the Library. The Committee expects the Library to provide a detailed spend plan, including any increase in FTE levels for the IT modernization intended to be addressed with the funds provided in fiscal year 2020. The LOC headings include the following: 1. Salaries and expenses âThe FY2019 level was $474.1 million. The LOC requested $522.6 million (+10.2%). The House-reported bill would have provided $501.3 million, an increase of $13.7 million when reflecting the centralized IT funding, according to H.Rept. 116-64 . The Senate-reported bill would have provided $514.6 million. The FY2020 act provides $504.2 million. These figures do not include authority to spend receipts ($6.0 million in the FY2019 act, the FY2020 request, the House-reported and Senate-reported bills, and the FY2020 act). 2. Copyright Office âThe FY2019 level was $43.6 million. The LOC requested $43.3 million (-0.7%). The House-reported bill would have provided $42.15 million, an increase of $1.3 million when reflecting the centralized IT funding, according to H.Rept. 116-64 . The Senate-reported bill recommended, and the FY2020 act provides, $42.14 million. These figures do not include authority to spend receipts and prior year unobligated balances ($49.8 million in FY2019; $49.7 million in the FY2020 request, the House-reported and Senate-reported bills, and the FY2020 act). 3. Congressional Research Service âThe FY2019 level was $125.7 million. The FY2020 request contains $121.6 million (-3.3%). The House-reported bill would have provided $119.9 million, an increase of $2.99 million when reflecting the centralized IT funding, according to H.Rept. 116-64 . The Senate-reported bill recommended, and the FY2020 act provides, $120.5 million. 4. Books for the b lind and p hysically h andicapped âThe FY2019 level was $52.8 million. The LOC requested $59.6 million (+13.0%). The House-reported bill would have provided $56.9 million, an increase of $6.2 million when reflecting the centralized IT funding, according to H.Rept. 116-64 . The Senate-reported bill recommended, and the FY2020 act provides, $58.6 million. The AOC's budget also contains funds for LOC buildings and grounds. In FY2019, $68.5 million was provided. The FY2020 request contains $121.3 million (+77.1%), the House-reported bill would have provided $86.8 million (+26.7%), the Senate-reported bill would have provided $63.6 million (-7.1%), and the FY2020 act provides $55.7 million (-18.6%). Administrative Provision The LOC received authority to obligate funds for reimbursable and revolving fund activities ($194.6 million in the FY2019 act; $231.98 million in the FY2020 request , the House-reported and Senate-reported versions of the bill, and the FY2020 act). Government Publishing Office (GPO)44 The FY2019 enacted level of $117.0 million was continued in the FY2020 request, the House-reported and Senate-reported versions of the bill, and the FY2020 act. This level is approximately equivalent (-0.1%) to the level provided in FY2018 and FY2017. GPO's budget authority is contained in three accounts, with the allocation in the FY2020 request and bills varying slightly from the FY2019 enacted level: 1. Congressional publishingâThe FY2019 enacted level of $79.0 million is continued in the FY2020 request, the House-reported and Senate-reported versions of the bill, and the FY2020 act. 2. Public information programs of the Superintendent of Documents (salaries and expenses)âThe FY2020 requested, House-reported, Senate-reported, and enacted level of $31.3 million is $704,000 (-2.2%) less than the FY2019 enacted level of $32.0 million. 3. GPO Business Operations Revolving Fund âThe FY2020 requested, House-reported, Senate-reported, and enacted level of $6.7 million is $704,000 above the FY2019 enacted level of $6.0 million. Government Accountability Office (GAO) GAO responds to requests for studies of federal government programs and expenditures. GAO may also initiate its own work. The FY2019 enacted level was $589.8 million. In comparison, levels considered for FY2020 include the following: Requested: $647.6 million (+9.8%). House-reported: $615.6 million (+4.4%) Senate-reported: $639.4 million (+8.4%) Enacted: $630.0 million (+6.8%) These levels do not include offsetting collections ($35.9 million in the FY2019 act; $24.8 million in the FY2020 request, the House-reported and Senate-reported versions of the bill, and the FY2020 act). Open World Leadership Center Open World requested, and the House-reported bill would have provided, $5.8 million for FY2020, an increase of $200,000 (+3.6%) from the $5.6 million provided each year since FY2016. The Senate-reported bill recommended, and the FY2020 act provides $5.9 million, an increase of $300,000 (+5.4%). The Open World Leadership Center administers a program that supports democratic changes in other countries by inviting their leaders to observe democracy and free enterprise in the United States. Congress first authorized the program in 1999 to support the relationship between Russia and the United States. The program encouraged young federal and local Russian leaders to visit the United States and observe its government and society. Established at the LOC as the Center for Russian Leadership Development in 2000, the center was renamed the Open World Leadership Center in 2003, when the program was expanded to include specified additional countries. In 2004, Congress further extended the program's eligibility to other countries designated by the center's board of trustees, subject to congressional consideration. The center is housed in the LOC and receives services from the LOC through an interagency agreement. The legislative branch bills have included a provision since FY2016, also contained in the FY2020 act: That funds made available to support Russian participants shall only be used for those engaging in free market development, humanitarian activities, and civic engagement, and shall not be used for officials of the central government of Russia. The location and future of Open World, attempts to assess its effectiveness, and its inclusion in the legislative branch budget have been discussed at appropriations hearings and in report language for more than a decade. The funding level for Open World has also varied greatly during this period. For additional discussion, see the "Prior Year Discussion of Location and Funding of Open World" section in CRS Report R44899, Legislative Branch: FY2018 Appropriations , by Ida A. Brudnick. John C. Stennis Center for Public Service Training and Development The center was created by Congress in 1988 to encourage public service by congressional staff through training and development programs. The FY2020 request, the House- and Senate- reported versions of the bill, and the FY2020 act contain $430,000, which is approximately the same level provided annually since FY2006. General Provisions As in past years, Congress considered a number of general provisions related to the legislative branch. These provisions and their status are listed in Table 4 . Introduction to Summary Tables and Appendix Table 5 through Table 9 provide information on funding levels for the legislative branch overall, the Senate, the House of Representatives, the USCP, and the AOC. The tables are followed by an Appendix , which lists House, Senate, and conference bills and reports; public law numbers; and enactment dates since FY1998. Appendix. Fiscal Year Information and Resources Summary:	null	96	47,044	47,046	47,046	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: FY2020 Consideration: Overview of Actions The first section of this report provides an overview of the consideration of FY2020 legislative branch appropriations, with subsections covering each action to date, including the initial submission of the request on March 11, 2019; hearings held by the House Legislative Branch Appropriations Subcommittee in February, March, and April 2019 and hearings held by the Senate Legislative Branch Appropriations Subcommittee in March and April 2019; the House subcommittee markup held on May 1, 2019; the House full committee markup on May 9, 2019, and reporting of H.R. 2779 ; the Office of Management and Budget (OMB) letter from May 8, 2019, with the Administration's position on the legislative branch budget; discussion in June of the potential inclusion of legislative branch funding in H.R. 2740 (Rules Committee Print 116-17); the Senate full committee markup on September 26, 2019, and reporting of S. 2581 ; the enactment on September 27, 2019, of a continuing resolution providing funding through November 21 ( P.L. 116-59 ), and the enactment on November 21, 2019, of a continuing resolution providing funding through December 20 ( P.L. 116-69 ); and the enactment of the Further Consolidated Appropriations Act ( P.L. 116-94 ) on December 20, 2019, which included funding for legislative branch activities for FY2020 in Division E and additional language related to the legislative branch in Division P. It is followed by a section on prior year actions and funding, which contains a historical table and figure. The report then provides an overview of the FY2020 budget requests of individual legislative branch agencies and entities. Table 5 through Table 9 list enacted funding levels for FY2019 and the requested, House-reported, Senate-reported, and enacted levels for FY2020, while the Appendix lists House, Senate, and conference bills and reports; public law numbers; and enactment dates since FY1998. Status of FY2020 Appropriations: Dates and Documents Submission of FY2020 Budget Request on March 11, 2019 The White House submitted its budget for FY2020, which includes the legislative branch budget request, on March 11, 2019. As explained by OMB, The budget covers the agencies of all three branches of GovernmentâExecutive, Legislative, and Judicialâand provides information on Government-sponsored enterprises. In accordance with law or established practice, OMB includes information on agencies of the Legislative Branch, the Judicial Branch, and certain Executive Branch agencies as submitted by those agencies without change. The independence of the submissions by the legislative branch agencies and entities is codified in Title 31, Section 1105, of the U.S. Code , which states the following: Estimated expenditures and proposed appropriations for the legislative branch and the judicial branch to be included in each budget ... shall be submitted to the President ... and included in the budget by the President without change. Furthermore, Division C of the FY2012 Consolidated Appropriations Act ( P.L. 112-74 ) added language to Title 31, Section 1107, relating to budget amendments, stating the following: The President shall transmit promptly to Congress without change, proposed deficiency and supplemental appropriations submitted to the President by the legislative branch and the judicial branch. The FY2020 budget contained a request for $5.288 billion in new budget authority for legislative branch activities (+9.3%). Senate and House Hearings on the FY2020 Budget Requests Table 2 lists the dates of hearings of the legislative branch subcommittees in February, March, and April 2019. Prepared statements of witnesses were posted on the subcommittee websites, and hearing transcripts were published by the Government Publishing Office. House Appropriations Committee Subcommittee on the Legislative Branch Markup On May 1, 2019, the House Appropriations Committee Subcommittee on the Legislative Branch held a markup of the FY2020 bill. The subcommittee recommended $3.943 billion, a $135.2 million increase (+3.6%) from the comparable 2019 enacted level, not including Senate items, which are historically considered by the Senate and not included in the House bill. No amendments were offered, and the bill was ordered reported to the full committee by voice vote. House Appropriations Committee Legislative Branch Markup On May 9, 2019, the House Appropriations Committee met to mark up the FY2020 bill reported from its legislative branch subcommittee. The following amendments were considered: A manager's amendment, offered by Subcommittee Chairman Tim Ryan of Ohio, that would increase funding for the Veterans' History Project by $1.0 million, add report language, and include one technical change. The amendment was adopted by voice vote. A manager's amendment, offered by Subcommittee Chairman Tim Ryan of Ohio, that would increase the overall funding for the bill by $29.0 million to reflect revised 302(b) subcommittee allocations adopted by the committee on May 8 ( H.Rept. 116-59 ). The amendment would increase total House funding by $19.0 million and Architect of the Capitol funding by $10.0 million. Subcommittee Ranking Minority Member Jaime Herrera Beutler offered an amendment to the manager's amendment that would have stricken this additional funding and instead placed it in a spending reduction account. The amendment to the amendment failed by recorded vote (23-28), and the amendment was adopted by voice vote. The bill was ordered reported by recorded vote (28-22). As amended, the bill provided $3.972 billion, not including Senate items (+$164.2 million). OMB Letter of May 8, 2019 As it did during consideration of the FY2019 legislative branch appropriations bill, OMB submitted a letter with the Administration's views on the overall size of the legislative branch bill as well as the funding levels for specific accounts. In particular, the Administration letter cited funding levels for the House of Representatives and the Government Accountability Office (GAO). Discussion of the Legislative Branch Bill During Consideration of a Rule for Consideration of H.R. 2740 On June 3, the House Committee on Rules announced its intention to consider and report a resolution that would structure consideration in the House of H.R. 2740 , the Labor, Health and Human Services, and Education appropriations bill. The committee indicated that the resolution reported from the Rules Committee would add the text of four additional appropriations bills to the text of H.R. 2740 . This proposal would include the text of H.R. 2779 , the legislative branch appropriations bill as reported by the Committee on Appropriations (to be included as Division B of H.R. 2740 ). The Rules Committee made available the legislative text that included the five appropriations bills and directed Members to draft their amendments to that text (House Rules Committee Print 116-17). Proposed amendments were due to the committee by 10:00 a.m. on Friday, June 7, 2019. A total of 41 draft amendments were submitted related to legislative branch appropriations (Division B). Following reported discussions related to the automatic Member pay adjustment, the resolution reported from the House Rules Committee further altered the version of H.R. 2740 that would be considered by the House, removing the text of the legislative branch appropriations bill. The legislative branch appropriations bill neither funds nor adjusts Member salaries. Provisions prohibiting the automatic Member pay adjustment are sometimes included in the annual appropriations bills. A provision prohibiting the automatic Member pay adjustments could be included in any bill, or be introduced as a separate bill. H.R. 2740 , the Labor, Health and Human Services, Education, Defense, State, Foreign Operations, and Energy and Water Development Appropriations Act, 2020, was ultimately agreed to in the House on June 19, 2019, without the legislative branch appropriations funding. Senate Appropriations Committee Legislative Branch Markup and Reporting On September 26, the Senate Appropriations Committee met to mark up its version of the FY2020 legislative branch appropriations bill. It reported the bill on the same day (by recorded vote, 31-0; S. 2581 , S.Rept. 116-124 ). S. 2581 would have provided $3.600 billion, not including House items, an increase of $187.6 million (+5.5%) from the comparable FY2019 enacted level. Continuing Appropriations Resolutions Enacted Prior to the start of FY2020 on October 1, 2019, a continuing appropriations resolution (CR) providing funding for legislative branch activities through November 21, 2019, was enacted ( P.L. 116-59 , September 27). Another CR, providing funding through December 20, 2019, was enacted on November 21, 2019 ( P.L. 116-69 ). FY2020 Funding Enacted on December 20, 2019 The Further Consolidated Appropriations Act ( P.L. 116-94 ) was enacted on December 20, 2019. The act provides $5.049 billion for legislative branch activities for FY2020 in Division E (+$202.8 million, or +4.2%, from the FY2019 level). In addition, Division P (Other Matter) contains titles related to the legislative branch, including Title XIVâLibrary of Congress Technical Corrections . This title includes amendments related to the American Folklife Preservation Act; the National Library Service for the Blind and Print Disabled; establishing a uniform pay scale for Library of Congress Career Senior Executive Positions; and removing a cap on personnel for the Copyright Royalty Judges Program. Title XVâSenate Entities . This title includes amendments to 2 U.S.C. Â§6567 ("Funds for Secretary of Senate to assist in proper discharge within United States of responsibilities to foreign parliamentary groups or other foreign officials") and 2 U.S.C. Â§6616 ("Support services for Senate during emergency; memorandum of understanding with an executive agency"). Title XVIâLegislative Branch Inspectors General Independence . This title focuses on the Inspectors General for the Library of Congress, the Office of the Architect of the Capitol, and the Government Publishing Office. It includes sections on pay, limits on bonuses, counsel, and authorities; law enforcement authority; budgetary independence; and hiring authority. Title XVIIâManaging Political Fund Activity . This title states that the "Majority Leader and the Minority Leader may each designate up to 2 employees of their respective leadership office staff as designees referred to in the second sentence of paragraph 1 of rule XLI of the Standing Rules of the Senate." Funding in Prior Years: Brief Overview and Trends Legislative Branch: Historic Percentage of Total Discretionary Budget Authority The percentage of total discretionary budget authority provided to the legislative branch has remained relatively stable at approximately 0.4% since at least FY1976. The maximum level (0.48%) was in FY1995, and the minimum (0.31%) was in FY2009. FY2019 FY2019 funding was provided in Division B of the Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs Appropriations Act, 2019 ( P.L. 115-244 ), which was enacted on September 21, 2018. The $4.836 billion provided for the legislative branch represents an increase of $136.0 million (+2.9%) from the FY2018 enacted level. An additional $10.0 million in FY2019 supplemental appropriations for GAO "for audits and investigations related to Hurricanes Florence, Lane, and Michael, Typhoons Yutu and Mangkhut, the calendar year 2018 wildfires, earthquakes, and volcano eruptions, and other disasters declared pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act" was included in two bills considered in the 116 th Congress: H.R. 268 , which passed the House on January 16, 2019, but cloture was not invoked in the Senate; and H.R. 2157 , which passed the House on May 10 (Roll no. 202) and the Senate (with an amendment) on May 23, 2019 (Record Vote Number: 129). H.R. 2157 was enacted June 6, 2019 ( P.L. 116-20 ). FY2018 FY2018 funding was provided in Division I of the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), which was enacted on March 23, 2018. The $4.700 billion provided by the act represented an increase of $260.0 million (+5.9%) from the FY2017 enacted level. In addition, P.L. 115-123 , enacted February 9, 2018, provided $14.0 million to GAO "for audits and investigations relating to Hurricanes Harvey, Irma, and Maria and the 2017 wildfires." (Title IX of Division B). FY2017 FY2017 funding was provided in Division I of the Consolidated Appropriations Act, 2017 ( P.L. 115-31 ), which was enacted on May 5, 2017. The $4.440 billion provided by the act represented a $77.0 million increase (+1.7%) from the FY2016 enacted level. FY2016 FY2016 funding was provided in Division I of the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ), which was enacted on December 18, 2015. The $4.363 billion provided by the act represented a $63.0 million increase (+1.5%) from the FY2015 enacted level. FY2015 FY2015 funding was provided in Division H of the Consolidated and Further Continuing Appropriations Act, 2015 ( P.L. 113-235 ), which was enacted on December 16, 2014. The $4.300 billion provided by the act represented an increase of $41.7 million (+1.0%) from FY2014. FY2014 Neither a legislative branch appropriations bill nor a continuing resolution (CR) containing FY2014 funding was enacted prior to the beginning of the fiscal year on October 1, 2013. A funding gap, which resulted in a partial government shutdown, ensued for 16 days. The funding gap was terminated by the enactment of a CR ( P.L. 113-46 ) on October 17, 2013. The CR provided funding through January 15, 2014. Following enactment of a CR on January 15, 2014 ( P.L. 113-73 ), a consolidated appropriations bill was enacted on January 17 ( P.L. 113-76 ), providing $4.259 billion for the legislative branch for FY2014. FY2013 FY2013 funding of approximately $4.061 billion was provided by P.L. 113-6 , which was signed into law on March 26, 2013. The act funded legislative branch accounts at the FY2012 enacted level, with some exceptions (also known as "anomalies"), not including across-the-board rescissions required by Section 3004 of P.L. 113-6 . Section 3004 was intended to eliminate any amount by which the new budget authority provided in the act exceeded the FY2013 discretionary spending limits in Section 251(c)(2) of the Balanced Budget and Emergency Deficit Control Act, as amended by the Budget Control Act of 2011 ( P.L. 112-25 ) and the American Taxpayer Relief Act of 2012 ( P.L. 112-240 ). Subsequent to the enactment of P.L. 113-6 , OMB calculated that additional rescissions of 0.032% of security budget authority and 0.2% of nonsecurity budget authority would be required. The act did not alter the sequestration reductions implemented on March 1, which reduced most legislative branch accounts by 5.0%. The accompanying OMB report indicated a dollar amount of budget authority to be canceled in each account containing nonexempt funds. FY2012 and Prior Division G of the FY2012 Consolidated Appropriations Act ( P.L. 112-74 ) provided $4.307 billion for the legislative branch. This level was $236.9 million below (-5.2%) the FY2011 enacted level. P.L. 112-10 provided $4.543 billion for legislative branch operations in FY2011. This level represented a $125.1 million decrease (-2.7%) from the $4.668 billion provided in the FY2010 Legislative Branch Appropriations Act ( P.L. 111-68 ) and the FY2010 Supplemental Appropriations Act ( P.L. 111-212 ). The FY2009 Omnibus Appropriations Act provided $4.402 billion. In FY2009, an additional $25.0 million was provided for GAO in the American Recovery and Reinvestment Act of 2009. P.L. 111-32 , the FY2009 Supplemental Appropriations Act, also contained funding for a new Capitol Police radio system ($71.6 million) and additional funding for the Congressional Budget Office (CBO) ($2.0 million). As seen in Table 3 , legislative branch funding decreased each year from FY2010 through FY2013. Funding did not exceed the FY2010 level until FY2018. Figure 1 shows the same information graphically, while also demonstrating the division of budget authority across the legislative branch in FY2019. Figure 2 shows the timing of legislative branch appropriations actions, including the issuance of House and Senate reports, bill passage, and enactment, from FY1996 through FY2020. It shows that fiscal year funding for the legislative branch has been determined on or before October 1 six times during this period (FY1997, FY2000, FY2004, FY2006, FY2010, and FY2019); twice during the first month of the fiscal year (FY1998 and FY1999); twice in November (FY1996 and FY2002); seven times in December (FY2001, FY2005, FY2008, FY2012, FY2015, FY2016, and FY2020); and eight times in the next calendar year (FY2003, FY2007, FY2009, FY2011, FY2013, FY2014, FY2017, and FY2018). FY2017 funding, enacted on May 5, 2017, represented the latest date of enactment during this period. FY2020 Legislative Branch Funding Issues The following sections discuss the various legislative branch accounts. During consideration of the legislative branch bills, the House and Senate conform to a "longstanding practice under which each body of Congress determines its own housekeeping requirements and the other concurs without intervention." Senate Overall Funding The Senate requested $1.046 billion for FY2020, an 11.9% increase over the $934.8 million provided in FY2019. The Senate-reported bill recommended, and the FY2020 act provides, $969.4 million (+$34.6 million, +3.7%). Additional information on the Senate account is presented in Table 6 . Senate Committee Funding Appropriations for Senate committees are contained in two accounts. 1. The inquiries and investigations account contains funds for all Senate committees except Appropriations. The FY2019 level of $133.3 million was continued in the FY2020 request, the Senate-reported bill, and the FY2020 act. 2. The Committee on Appropriations account contains funds for the Senate Appropriations Committee. The FY2020 enacted level of $15.8 million, which is equivalent to the Senate-requested and -reported level, represents an increase of $297,000 (+1.9%) from the $15.5 million provided in FY2019. Senators' Official Personnel and Office Expense Account19 The Senators' Official Personnel and Office Expense Account provides each Senator with funds to administer an office. It consists of an administrative and clerical assistance allowance, a legislative assistance allowance, and an official office expense allowance. The funds may be used for any category of expenses, subject to limitations on official mail. The Senate requested $531.1 million, $102.1 million above (+23.8%) the $429.0 million provided in FY2019. Of this amount, $5.0 million is provided for compensating Senate interns. The Senate-reported bill recommended, and the FY2020 act provides, $449.0 million, an increase of $20.0 million (+4.7%). Administrative Provisions S. 2581 included two administrative provisions: 1. One provision, which was first included in FY2016, would require amounts remaining in the Senators' Official Personnel and Expense Account (SOPOEA) to be used for deficit reduction or to reduce the federal debt. This provision was included in P.L. 116-94 . 2. One provision would continue the freeze on Member salaries at the 2009 level. Member salaries are funded in a permanent appropriations account, and the legislative branch bill does not contain language funding or increasing Member pay. A provision prohibiting the automatic Member pay adjustments could be included in any bill, or be introduced as a separate bill. This provision was included in Section 7 of P.L. 116-94 . House of Representatives Overall Funding The House requested $1.356 billion for FY2020, an increase of 10.1% over the $1.232 billion provided for FY2019. The FY2020 act provides $1.366 billion, an increase of 10.8%. Additional information on headings in the House of Representatives account is presented in Table 7 . House Committee Funding Funding for House committees is contained in the appropriation heading "committee employees," which typically comprises two subheadings. The first subheading contains funds for personnel and nonpersonnel expenses of House committees, except the Appropriations Committee, as authorized by the House in a committee expense resolution. The House requested $139.1 million, an increase of $11.2 million (+8.8%) from the FY2019 enacted level of $127.9 million. The House-reported bill recommended, and the FY2020 act provides, $135.4 million, an increase of $7.5 million (+5.8%). The second subheading contains funds for the personnel and nonpersonnel expenses of the Committee on Appropriations. The House requested $25.4 million, an increase of $2.3 million (+10.0%) from the FY2019 enacted level of $23.1 million. The House-reported bill recommended, and the FY2020 act provides, $24.3 million, an increase of $1.2 million (+5.0%). Members' Representational Allowance21 The Members' Representational Allowance (MRA) is available to support Members in their official and representational duties. The House-requested level of $613.0 million represents an increase of $39.4 million (+6.9%) from the $573.6 million provided in FY2019. The House-reported bill recommended, and the FY2020 act provides, $615.0 million, an increase of $41.4 million (+7.2%). A separate account, included in the House-reported bill and the FY2020 act, contains $11.0 million for interns in House Member offices, and $365,000 for interns in House leadership offices. Administrative Provisions The House requested several administrative provisions related to unexpended balances from the MRA; limiting amounts available from the MRA for leased vehicles; providing additional transfer authority; establishing the allowance for compensation of interns in Member offices; providing for cybersecurity assistance from other federal entities; limiting or prohibiting the delivery of the printed B udget of the United States , the Federal Register , and the House telephone directory; allowing the use of expired funds for the payment of death gratuities for House employees; and allowing the use of expired funds for the employee compensation fund and unemployment compensation. The House-reported bill contained the provisions related to the unexpended MRA balances, leased vehicles, cybersecurity assistance, and use of expired funds. In addition, the House-reported bill included provisions relating to the compensation of interns in Member and Leadership offices; rescinding amounts in the Stationery and Page Dorm revolving funds; and providing for reduction in the amount of tuition charged for children of House Child Care Center employees. P.L. 116-94 includes the provisions from the House-reported bill. Support Agency Funding U.S. Capitol Police (USCP) The USCP is responsible for the security of the Capitol Complex, including, for example, the U.S. Capitol, the House and Senate office buildings, the U.S. Botanic Garden, and the Library of Congress buildings and adjacent grounds. The FY2019 enacted level was $456.3 million. In comparison, levels considered for FY2020 include the following: Requested: $463.3 million (+1.5%) House-reported: $463.3 million (+1.5%) Senate-reported: $464.3 million (+1.8%) Enacted: $464.3 million (+1.8%) Additional information on the USCP is presented in Table 8 . Appropriations for the police are contained in two accountsâa salaries account and a general expenses account. 1. Salariesâthe FY2019 act provided $374.8 million for salaries. The USCP requested, and the House-reported bill would have provided, $378.1 million (+0.9%). The Senate-reported bill recommended, and the FY2020 act provides, $379.1 million (+1.1%). 2. General expensesâthe FY2019 act provided $81.5 million for general expenses. The USCP-requested level of $85.3 million (+4.6%) was contained in the House-reported and Senate-reported bills and the FY2020 act. Another appropriation relating to the USCP appears within the Architect of the Capitol account for Capitol Police buildings and grounds. The FY2019 level was $57.7 million. The USCP requested $54.97 million (-4.8%); the House-reported bill would have provided $52.8 million (-8.4%); the Senate-reported bill would have provided $50.3 million (-12.8%); and the FY2020 act provides $55.2 million (-4.3%). Administrative Provision The USCP requested, and the House-reported bill and P.L. 116-94 contain, an administrative provision increasing the total limit on student loan repayments from $40,000 to $60,000. The Senate-reported bill did not include this provision. Office of Congressional Workplace Rights Formerly known as the Office of Compliance, the Office of Congressional Workplace Rights (OCWR) was renamed by the Congressional Accountability Act of 1995 Reform Act ( P.L. 115-397 ). It is an independent and nonpartisan agency within the legislative branch, and it was originally established to administer and enforce the Congressional Accountability Act of 1995. The act applies various employment and workplace safety laws to Congress and certain legislative branch entities. The FY2019 enacted level was $6.3 million, which was continued in the FY2020 request, the House-reported and Senate-reported versions of the bill, and the FY2020 act. Congressional Budget Office (CBO) CBO is a nonpartisan congressional agency created to provide objective economic and budgetary analysis to Congress. CBO cost estimates are required for any measure reported by a regular or conference committee that may affect revenues or expenditures. The FY2019 level was $50.7 million. In comparison, levels considered for FY2020 include the following: Requested: $53.6 million (+5.6%) House-reported: $52.7 million (+3.8%) Senate-reported: $54.9 million (+8.3%) Enacted: $54.9 million (+8.3%) Office of Technology Assessment (OTA) Since the closure of OTA, which was a legislative branch agency established in 1972 and last funded in FY1996, Congress has periodically reexamined funding for scientific and technological studies by the legislative branch. Some Members have expressed support for the refunding of OTA through the distribution of "Dear Colleague" letters, at committee hearings and in committee prints, and through the introduction of legislation or amendments. Since FY2002, funding for technology assessments has also been provided to GAO, with frequent references in appropriations and conference reports on the legislative branch appropriations bills. More recently, and in response to language in the FY2019 Senate and conference reports, GAO announced the formation of a new Science, Technology Assessment, and Analytics Team on January 29, 2019. Additionally, the conference report to accompany the FY2019 legislative branch appropriations bill ( H.R. 5895 ) required a study on technology assessments available to Congress: Technology Assessment Study: The Committees have heard testimony on, and received dozens of requests advocating for restoring funding to the Office of Technology Assessment, and more generally on how Congress equips itself with the deep technical advice necessary to understand and tackle the growing number of science and technology policy challenges facing our country. The conferees direct the Congressional Research Service (CRS) to engage with the National Academy of Public Administration or a similar external entity to produce a report detailing the current resources available to Members of Congress within the Legislative Branch regarding science and technology policy, including the GAO. This study should also assess the potential need within the Legislative Branch to create a separate entity charged with the mission of providing nonpartisan advice on issues of science and technology. Furthermore, the study should also address if the creation of such entity duplicates services already available to Members of Congress. CRS should work with the Committees in developing the parameters of the study and once complete, the study should be made available to relevant oversight Committees. The FY2020 House-reported bill would have provided $6.0 million for restarting OTA. The funding would remain available through FY2021. H.Rept. 116-64 further stated the following: To do its job in this modern era, Congress needs to understand and address the issues and risks resulting from a wide range of rapid technological developments such as cryptocurrencies, autonomous vehicles, gene editing, artificial intelligence, and the ever-expanding use of social media platforms, to give just a few examples. A re-opened OTA will play an important role in providing accurate, professional, and unbiased information about technological developments and policy options for addressing the issues those developments raise. In that role, OTA will complement the work of the Government Accountability Office in the area of science and technology.... Since the de-funding of OTA in 1995, there have been several unsuccessful attempts to restore the office. During that time, it has become increasingly clear that Congress does not have adequate resources available for the in-depth, high level analysis of fast-breaking technology developments and their public policy implications that was formerly provided by OTA. While the Government Accountability Office (GAO) has increased its technology assessment activities attempting to fill that gap, the structure and culture of GAO somewhat constrain its ability to replicate OTA. The Office's governance by a bipartisan board and its ability to tap outside expert resources and rely on a Technology Assessment Advisory Council provide the capacity to offer policy recommendation options to Congress, which are not available from other Congressional sources. The Senate-reported bill would not restart OTA, but S.Rept. 116-124 states that the Committee looks forward to reviewing the recommendations of the National Academy of Public Administration study currently underway, including the evaluation of options available to Congress in the area of science and technology. The Committee will continue to engage key authorizing committees and interested members as these discussions continue. S.Rept. 116-124 also addresses the role of the new GAO Science, Technology Assessment, and Analytics Team (STAA), stating In consultation with internal and external stakeholders, academic and nonprofit organizations, and Members of Congress, the STAA team submitted its plan for staffing needs, resources, areas of expertise, and the products and services that the team will provide or are currently providing to Congress. The plan demonstrates STAA's value and ability to assess upcoming technological and digital innovations. Presently, the STAA is providing Congress with technology assessments, technical assistance, and reports in the areas of oversight of Federal technology and science programs, as well as best practices in engineering sciences and cybersecurity. The Committee applauds the efforts of GAO's STAA team and encourages STAA to continue providing Congress with unbiased explanatory data while also exploring new areas for independent science and technology guidance, relevant to Congress. The National Academy of Public Administration (NAPA) study was released on November 14, 2019. It examined three options: Option 1âEnhancing Existing Entities Option 2âCreating a New Agency Option 3âEnhance Existing Entities and Create an Advisory Office NAPA recommended enhancing technology assessment capabilities of both CRS and GAO, while also establishing (1) an Office of the Congressional Science and Technology Advisorâled by an appointee of the House and Senate leadership and assisted by a small staffâand (2) a Congressional Science and Technology Coordinating Councilâchaired by the Congressional Science and Technology Advisorâto enhance coordination between GAO and CRS. The FY2020 act did not provide funding for restarting OTA. Rather, the explanatory statement accompanying H.R. 1865 stated the following: Science and Technology Needs in Congress : The report released on November 14, 2019, by the National Academy of Public Administration (NAPA) identified the existing gaps in science and technology expertise and resources available to Congress. The Committees, Members, stakeholders and other committees of jurisdiction working together will continue to evaluate the recommendations in the report to address this gap.... Science and Technology Issues : The funding provided will allow GAO to increase support for Congress' work on evolving science and technology issues. The 2019 report from the National Academy of Public Administration (NAPA) identified the need for GAO to focus its advice to Congress on technical assessments and short-to-medium term studies. The study also highlighted that although GAO's support requests from Congress have increased, GAO should consider expanding its outreach to the science and technology community and coordination with CRS to better fill these gaps. GAO is encouraged to dedicate a specific number of experts to work exclusively on GAO's Science, Technology Assessment, and Analytics (STAA) team that was created in January 2019, a recommendation that was included in the NAPA report. Architect of the Capitol (AOC) The Architect of the Capitol (AOC) is responsible for the maintenance, operation, development, and preservation of the U.S. Capitol Complex, which includes the Capitol and its grounds, House and Senate office buildings, Library of Congress buildings and grounds, Capitol Power Plant, Botanic Garden, Capitol Visitor Center, and USCP buildings and grounds. The AOC is responsible for the Supreme Court buildings and grounds, but appropriations for their expenses are not contained in the legislative branch appropriations bill. The FY2019 level was $733.7 million. In comparison, levels considered for FY2020 include the following: Requested: $831.7 million (+13.3%) House-reported: $624.7 million (-2.4%, not including Senate-items) Senate-reported: $585.8 million (+9.2%, not including House-items) Enacted: $695.9 million (-5.2%) Operations of the AOC are funded in the following 10 accounts: capital construction and operations, Capitol building, Capitol grounds, Senate office buildings, House office buildings, Capitol Power Plant, Library buildings and grounds, Capitol Police buildings and grounds, Capitol Visitor Center, and Botanic Garden. Additional funding information on the individual AOC accounts is presented in Table 9 . Administrative Provision The AOC also requested one administrative provision that prohibits the use of funds for bonuses for contractors behind schedule or over budget. This provision has been included in the annual appropriations acts since FY2015. The House-reported version of the provision would apply to FY2020 and each succeeding fiscal year. The Senate-reported bill included the annual provision, which was included in P.L. 116-94 . Library of Congress (LOC) The LOC serves simultaneously as Congress's parliamentary library and the de facto national library of the United States. Its broader services to the nation include the acquisition, maintenance, and preservation of a collection of more than 167 million items in various formats; hosting nearly 1.9 million visitors annually; service to the general public and scholarly and library communities; administration of U.S. copyright laws by its Copyright Office; and administration of a national program to provide reading material to the blind and physically handicapped. Its direct services to Congress include the provision of legal research and law-related services by the Law Library of Congress, and a broad range of activities by CRS, including in-depth and nonpartisan public policy research, analysis, and legislative assistance for Members and committees and their staff; congressional staff training; information and statistics retrieval; and continuing legal education for Members of both chambers and congressional staff. The FY2019 level was $696.1 million. In comparison, levels considered for FY2020 include the following: Requested: $747.1 million (+7.3%) House-reported: $720.3 million (+3.5%) Senate-reported: $735.8 million (+5.7%) Enacted: $725.4 million (+4.2%) These figures do not include additional authority to spend receipts. The House Appropriations Committee report ( H.Rept. 116-64 ) explains a change in the technology funding practice that affected the four LOC appropriations headings: Appropriations Shifts to Reflect Centralized Funding for Information Technology : During fiscal year 2018, in an effort to reduce duplication, increase efficiency, and better utilize specialized expertise, the Library of Congress began providing more Information Technology (IT) services centrally though its Office of the Chief Information Officer (OCIO) rather than in the Library's various component organizations. In fiscal years 2018 and 2019, Library components which have separate appropriations accounts reimbursed the main Library of Congress Salaries and Expenses account through intra-agency agreements for the IT services being provided to them centrally by the OCIO under this initiative. For fiscal year 2020, however, the Library has requested that funding for centralized IT services be appropriated directly to the main Salaries and Expenses account for use by the OCIO instead of to the component organizations receiving the services, in order to reflect where services are actually being performed and avoid the need for repeated reimbursement transactions. The Committee has agreed to this request. As a result, the Committee bill reflects a shift in appropriations totaling $13,556,000 to the Library of Congress Salaries and Expenses account, with $2,708,000 of that shift coming from the Copyright Office, $8,767,000 coming from the Congressional Research Service, and $2,081,000 coming from the National Library Service for the Blind and Physically Handicapped. H.Rept. 116-64 further contains a "note regarding IT centralization" accompanying each heading, comparing the FY2020 House-reported level to the FY2019 enacted level after accounting for this shift. The Senate Appropriations Committee report ( S.Rept. 116-124 ) similarly addressed the centralization, stating the following: The recommendation for this account also reflects a shift in appropriations associated with the centralization of information technology [IT] funding from across the Library into the Office of Chief Information Officer [OCIO]. A total of $13,556,000 will move to the OCIO in fiscal year 2020, reflecting the cost of IT activities that were funded previously within the Congressional Research Service, Copyright Office, and the National Library Service for the Blind and Physically Handicapped. The realignment of these funds will help facilitate the final phases of IT centralization across the Library. The Committee expects the Library to provide a detailed spend plan, including any increase in FTE levels for the IT modernization intended to be addressed with the funds provided in fiscal year 2020. The LOC headings include the following: 1. Salaries and expenses âThe FY2019 level was $474.1 million. The LOC requested $522.6 million (+10.2%). The House-reported bill would have provided $501.3 million, an increase of $13.7 million when reflecting the centralized IT funding, according to H.Rept. 116-64 . The Senate-reported bill would have provided $514.6 million. The FY2020 act provides $504.2 million. These figures do not include authority to spend receipts ($6.0 million in the FY2019 act, the FY2020 request, the House-reported and Senate-reported bills, and the FY2020 act). 2. Copyright Office âThe FY2019 level was $43.6 million. The LOC requested $43.3 million (-0.7%). The House-reported bill would have provided $42.15 million, an increase of $1.3 million when reflecting the centralized IT funding, according to H.Rept. 116-64 . The Senate-reported bill recommended, and the FY2020 act provides, $42.14 million. These figures do not include authority to spend receipts and prior year unobligated balances ($49.8 million in FY2019; $49.7 million in the FY2020 request, the House-reported and Senate-reported bills, and the FY2020 act). 3. Congressional Research Service âThe FY2019 level was $125.7 million. The FY2020 request contains $121.6 million (-3.3%). The House-reported bill would have provided $119.9 million, an increase of $2.99 million when reflecting the centralized IT funding, according to H.Rept. 116-64 . The Senate-reported bill recommended, and the FY2020 act provides, $120.5 million. 4. Books for the b lind and p hysically h andicapped âThe FY2019 level was $52.8 million. The LOC requested $59.6 million (+13.0%). The House-reported bill would have provided $56.9 million, an increase of $6.2 million when reflecting the centralized IT funding, according to H.Rept. 116-64 . The Senate-reported bill recommended, and the FY2020 act provides, $58.6 million. The AOC's budget also contains funds for LOC buildings and grounds. In FY2019, $68.5 million was provided. The FY2020 request contains $121.3 million (+77.1%), the House-reported bill would have provided $86.8 million (+26.7%), the Senate-reported bill would have provided $63.6 million (-7.1%), and the FY2020 act provides $55.7 million (-18.6%). Administrative Provision The LOC received authority to obligate funds for reimbursable and revolving fund activities ($194.6 million in the FY2019 act; $231.98 million in the FY2020 request , the House-reported and Senate-reported versions of the bill, and the FY2020 act). Government Publishing Office (GPO)44 The FY2019 enacted level of $117.0 million was continued in the FY2020 request, the House-reported and Senate-reported versions of the bill, and the FY2020 act. This level is approximately equivalent (-0.1%) to the level provided in FY2018 and FY2017. GPO's budget authority is contained in three accounts, with the allocation in the FY2020 request and bills varying slightly from the FY2019 enacted level: 1. Congressional publishingâThe FY2019 enacted level of $79.0 million is continued in the FY2020 request, the House-reported and Senate-reported versions of the bill, and the FY2020 act. 2. Public information programs of the Superintendent of Documents (salaries and expenses)âThe FY2020 requested, House-reported, Senate-reported, and enacted level of $31.3 million is $704,000 (-2.2%) less than the FY2019 enacted level of $32.0 million. 3. GPO Business Operations Revolving Fund âThe FY2020 requested, House-reported, Senate-reported, and enacted level of $6.7 million is $704,000 above the FY2019 enacted level of $6.0 million. Government Accountability Office (GAO) GAO responds to requests for studies of federal government programs and expenditures. GAO may also initiate its own work. The FY2019 enacted level was $589.8 million. In comparison, levels considered for FY2020 include the following: Requested: $647.6 million (+9.8%). House-reported: $615.6 million (+4.4%) Senate-reported: $639.4 million (+8.4%) Enacted: $630.0 million (+6.8%) These levels do not include offsetting collections ($35.9 million in the FY2019 act; $24.8 million in the FY2020 request, the House-reported and Senate-reported versions of the bill, and the FY2020 act). Open World Leadership Center Open World requested, and the House-reported bill would have provided, $5.8 million for FY2020, an increase of $200,000 (+3.6%) from the $5.6 million provided each year since FY2016. The Senate-reported bill recommended, and the FY2020 act provides $5.9 million, an increase of $300,000 (+5.4%). The Open World Leadership Center administers a program that supports democratic changes in other countries by inviting their leaders to observe democracy and free enterprise in the United States. Congress first authorized the program in 1999 to support the relationship between Russia and the United States. The program encouraged young federal and local Russian leaders to visit the United States and observe its government and society. Established at the LOC as the Center for Russian Leadership Development in 2000, the center was renamed the Open World Leadership Center in 2003, when the program was expanded to include specified additional countries. In 2004, Congress further extended the program's eligibility to other countries designated by the center's board of trustees, subject to congressional consideration. The center is housed in the LOC and receives services from the LOC through an interagency agreement. The legislative branch bills have included a provision since FY2016, also contained in the FY2020 act: That funds made available to support Russian participants shall only be used for those engaging in free market development, humanitarian activities, and civic engagement, and shall not be used for officials of the central government of Russia. The location and future of Open World, attempts to assess its effectiveness, and its inclusion in the legislative branch budget have been discussed at appropriations hearings and in report language for more than a decade. The funding level for Open World has also varied greatly during this period. For additional discussion, see the "Prior Year Discussion of Location and Funding of Open World" section in CRS Report R44899, Legislative Branch: FY2018 Appropriations , by Ida A. Brudnick. John C. Stennis Center for Public Service Training and Development The center was created by Congress in 1988 to encourage public service by congressional staff through training and development programs. The FY2020 request, the House- and Senate- reported versions of the bill, and the FY2020 act contain $430,000, which is approximately the same level provided annually since FY2006. General Provisions As in past years, Congress considered a number of general provisions related to the legislative branch. These provisions and their status are listed in Table 4 . Introduction to Summary Tables and Appendix Table 5 through Table 9 provide information on funding levels for the legislative branch overall, the Senate, the House of Representatives, the USCP, and the AOC. The tables are followed by an Appendix , which lists House, Senate, and conference bills and reports; public law numbers; and enactment dates since FY1998. Appendix. Fiscal Year Information and Resources	Summary:	gov_report	1,024	null	15
crs_RL32048	crs_RL32048_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Political History Iran is a country of nearly 80 million people, located in the heart of the Persian Gulf region. The United States was an ally of the late Shah of Iran, Mohammad Reza Pahlavi ("the Shah"), who ruled from 1941 until his ouster in February 1979. The Shah assumed the throne when Britain and Russia forced his father, Reza Shah Pahlavi (Reza Shah), from power because of his perceived alignment with Germany in World War II. Reza Shah had assumed power in 1921 when, as an officer in Iran's only military force, the Cossack Brigade (reflecting Russian influence in Iran in the early 20 th century), he launched a coup against the government of the Qajar Dynasty, which had ruled since 1794. Reza Shah was proclaimed Shah in 1925, founding the Pahlavi dynasty. The Qajar dynasty had been in decline for many years before Reza Shah's takeover. That dynasty's perceived manipulation by Britain and Russia had been one of the causes of the 1906 constitutionalist movement, which forced the Qajar dynasty to form Iran's first Majles (parliament) in August 1906 and promulgate a constitution in December 1906. Prior to the Qajars, what is now Iran was the center of several Persian empires and dynasties whose reach shrank steadily over time. After the 16 th century, Iranian empires lost control of Bahrain (1521), Baghdad (1638), the Caucasus (1828), western Afghanistan (1857), Baluchistan (1872), and what is now Turkmenistan (1894). Iran adopted Shiite Islam under the Safavid Dynasty (1500-1722), which ended a series of Turkic and Mongol conquests. The Shah was anti-Communist, and the United States viewed his government as a bulwark against the expansion of Soviet influence in the Persian Gulf and a counterweight to pro-Soviet Arab regimes and movements. Israel maintained a representative office in Iran during the Shah's time and the Shah supported a peaceful resolution of the Arab-Israeli dispute. In 1951, under pressure from nationalists in the Majles (parliament) who gained strength in the 1949 Majles elections, he appointed a popular nationalist parliamentarian, Dr. Mohammad Mossadeq, as prime minister. Mossadeq was widely considered left-leaning, and the United States was wary of his drive for nationalization of the oil industry, which had been controlled since 1913 by the Anglo-Persian Oil Company. His followers began an uprising in August 1953 when the Shah tried to dismiss him, and the Shah fled. The Shah was restored to power in a CIA-supported uprising that toppled Mossadeq ("Operation Ajax") on August 19, 1953. The Shah tried to modernize Iran and orient it toward the West, but in so doing he alienated the Shiite clergy and religious Iranians. He incurred broader resentment by using his SAVAK intelligence service to repress dissent. The Shah exiled Ayatollah Ruhollah Khomeini in 1964 because of Khomeini's active opposition to what he asserted were the Shah's anticlerical policies and forfeiture of Iran's sovereignty to the United States. Khomeini fled to and taught in Najaf, Iraq, a major Shiite theological center. In 1978, three years after the March 6, 1975, Algiers Accords between the Shah and Iraq's Baathist leaders that temporarily ended mutual hostile actions, Iraq expelled Khomeini to France, where he continued to agitate for revolution that would establish Islamic government in Iran. Mass demonstrations and guerrilla activity by pro-Khomeini forces caused the Shah's government to collapse. Khomeini returned from France on February 1, 1979, and, on February 11, 1979, he declared an Islamic Republic of Iran. Khomeini's concept of velayat-e-faqih (rule by a supreme Islamic jurisprudent, or "Supreme Leader") was enshrined in the constitution that was adopted in a public referendum in December 1979 (and amended in 1989). The constitution provided for the post of Supreme Leader of the Revolution. The regime based itself on strong opposition to Western influence, and relations between the United States and the Islamic Republic turned openly hostile after the November 4, 1979, seizure of the U.S. Embassy and its U.S. diplomats by pro-Khomeini radicals, which began the so-called hostage crisis that ended in January 1981 with the release of the hostages. Ayatollah Khomeini died on June 3, 1989, and was succeeded by Ayatollah Ali Khamene'i. The regime faced serious unrest in its first few years, including a June 1981 bombing at the headquarters of the Islamic Republican Party (IRP) and the prime minister's office that killed several senior elected and clerical leaders, including then-Prime Minister Javad Bahonar, elected President Ali Raja'i, and IRP head and top Khomeini disciple Ayatollah Mohammad Hussein Beheshti. The regime used these events, along with the hostage crisis with the United States, to justify purging many of the secular, liberal, and left-wing personalities that had been prominent in the years just after the revolution. Examples included the regime's first Prime Minister Mehdi Bazargan; the pro-Moscow Tudeh Party (Communist); the People's Mojahedin Organization of Iran (PMOI, see below); and the first elected president, Abolhassan Bani Sadr. The regime was under economic and military threat during the 1980-1988 Iran-Iraq War. Regime Structure, Stability, and Opposition Some experts attribute the acrimony that has characterized U.S.-Iran relations since the Islamic revolution to the structure of Iran's regime. Although there are some elected leadership posts and diversity of opinion, Iran's constitution—adopted in public referenda in 1980 and again in 1989—reserves paramount decisionmaking authority for a "Supreme Leader" (known in Iran as "Leader of the Revolution"). The President and the Majles (unicameral parliament) are directly elected, and since 2013, there have been elections for municipal councils that set local development priorities and select mayors. Even within the unelected institutions, factional disputes between those who insist on ideological purity and those considered more pragmatic are evident. In part because of the preponderant political power of the clerics and the security services, the regime has faced repeated periodic unrest from minorities, intellectuals, students, labor groups, the poor, women, and members of Iran's minority groups. (Iran's demographics are depicted in a text box below.) U.S. officials in successive Administrations have accused Iran's regime of widespread corruption, both within the government and among its pillars of support. In a speech on Iran on July 22, 2018, Secretary of State Michael Pompeo characterized Iran's government as "something that resembles the mafia more than a government." He detailed allegations of the abuse of privileges enjoyed by Iran's leaders and supporting elites to enrich themselves and their supporters at the expense of the public good. The State Department's September 2018 "Outlaw Regime" report (p. 41) states that "corruption and mismanagement at the highest levels of the Iranian regime have produced years of environmental exploitation and degradation throughout the country." Unelected or Indirectly Elected Institutions: The Supreme Leader, Council of Guardians, and Expediency Council Iran's power structure consists of unelected or indirectly elected persons and institutions. The Supreme Leader At the apex of the Islamic Republic's power structure is the "Supreme Leader." He is chosen by an elected body—the Assembly of Experts—which also has the constitutional power to remove him, as well as to redraft Iran's constitution and submit it for approval in a national referendum. The Supreme Leader is required to be a senior Shia cleric. Upon Ayatollah Khomeini's death, the Assembly selected one of his disciples, Ayatollah Ali Khamene'i, as Supreme Leader. Although he has never had Khomeini's undisputed political or religious authority, the powers of the office ensure that Khamene'i is Iran's paramount leader. Under the constitution, the Supreme Leader is commander-in-chief of the armed forces, giving him the power to appoint commanders. Khamene'i makes five out of the nine appointments to the country's highest national security body, the Supreme National Security Council (SNSC), including its top official, the secretary of the body. Khamene'i also has a representative of his office as one of the nine members, who typically are members of the regime's top military, foreign policy, and domestic security organizations. The Supreme Leader can remove an elected president, if the judiciary or the Majles (parliament) assert cause for removal. The Supreme Leader appoints half of the 12-member Council of Guardians , all members of the Expediency Council , and the judiciary head. Succession to Khamene'i There is no announced successor to Khamene'i. The Assembly of Experts could conceivably use a constitutional provision to set up a three-person leadership council as successor rather than select one new Supreme Leader. Khamene'i reportedly favors as his successor Hojjat ol-Eslam Ibrahim Raisi, whom he appointed in March 2019 as new head of the judiciary, and in 2016 to head the powerful Shrine of Imam Reza (Astan-e Qods Razavi) in Mashhad, which controls vast property and many businesses in the province. Raisi is a hardliner who has served as state prosecutor and was allegedly involved in the 1988 massacre of prisoners and other acts of repression. The 2019 judiciary appointment suggests that Raisi's chances of becoming Supreme Leader were not necessarily diminished by his loss in the May 2017 presidential elections. Still, the person Raisi replaced as judiciary chief, Ayatollah Sadeq Larijani, remains a succession candidate. Another contender is hardline Tehran Friday prayer leader Ayatollah Ahmad Khatemi, and some consider President Rouhani as a significant contender as well. Council of Guardians and Expediency Council Two appointed councils play a major role on legislation, election candidate vetting, and policy. Council of Guardians The 12-member Council of Guardians (COG) consists of six Islamic jurists appointed by the Supreme Leader and six lawyers selected by the judiciary and confirmed by the Majles . Each councilor serves a six-year term, staggered such that half the body turns over every three years. Currently headed by Ayatollah Ahmad Jannati, the conservative-controlled body reviews legislation to ensure it conforms to Islamic law. It also vets election candidates by evaluating their backgrounds according to constitutional requirements that each candidate demonstrate knowledge of Islam, loyalty to the Islamic system of government, and other criteria that are largely subjective. The COG also certifies election results. Municipal council candidates are vetted not by the COG but by local committees established by the Majles . Expediency Council The Expediency Council was established in 1988 to resolve legislative disagreements between the Majles and the COG. It has since evolved into primarily a policy advisory body for the Supreme Leader. Its members serve five-year terms. Longtime regime stalwart Ayatollah Ali Akbar Hashemi-Rafsanjani was reappointed as its chairman in February 2007 and served in that position until his January 2017 death. In August 2017, the Supreme Leader named a new, expanded (from 42 to 45 members) Council, with former judiciary head Ayatollah Mahmoud Hashemi Shahroudi as chairman. Shahroudi passed away in December 2018 and Sadeq Larijani, who was then head of the judiciary, was appointed by the Supreme Leader as his replacement. President Hassan Rouhani and Majles Speaker Ali Larijani were not reappointed as Council members but attend the body's sessions in their official capacities. The council includes former president Ahmadinejad. Domestic Security Organs The leaders and senior officials of a variety of overlapping domestic security organizations form a parallel power structure that is largely under the direct control of the Supreme Leader in his capacity as Commander-in-Chief of the Armed Forces. State Department and other human reports on Iran repeatedly assert that internal security personnel are not held accountable for human rights abuses. The domestic security organs include the following: The Islamic Revolutionary Guard Corps (IRGC). The IRGC's domestic security role is generally implemented through the IRGC-led volunteer militia force called the Basij . The Basij is widely accused of arresting women who violate the regime's public dress codes and raiding Western-style parties in which alcohol, which is illegal in Iran, might be served. However, IRGC bases are often located in urban areas, giving the IRGC a capability to quickly intervene to suppress large antigovernment demonstrations. Law Enforcement Forces. This body is an amalgam of regular police, gendarmerie, and riot police that serve throughout the country. It is the regime's first "line of defense" in suppressing antiregime demonstrations or other unrest. Ministry of Interior. The ministry exercises civilian supervision of Iran's police and domestic security forces. The IRGC and Basij are generally outside ministry control. Ministry of Intelligence and Security (MOIS). Headed by Mahmoud Alavi, the MOIS conducts domestic surveillance to identify regime opponents and try to penetrate antiregime cells. The Ministry works closely with the IRGC and Basij . Several of these organizations and their senior leaders or commanders are sanctioned by the United States for human rights abuses and other violations of U.S. Executive Orders. Elected Institutions/Recent Elections Several major institutional positions are directly elected by the population, but international observers question the credibility of Iran's elections because of the role of the COG in vetting candidates and limiting the number and ideological diversity of the candidate field. Women can vote and run for most offices, and some women serve as mayors, but the COG interprets the Iranian constitution as prohibiting women from running for the office of president. Candidates for all offices must receive more than 50% of the vote, otherwise a runoff is held several weeks later. Another criticism of the political process in Iran is the relative absence of political parties; establishing a party requires the permission of the Interior Ministry under Article 10 of Iran's constitution. The standards to obtain approval are high: to date, numerous parties have filed for permission since the regime was founded, but only those considered loyal to the regime have been granted license to operate. Some have been licensed and then banned after their leaders opposed regime policies, such as the Islamic Iran Participation Front and Organization of Mojahedin of the Islamic Revolution, discussed in the text box below. The Presidency The main directly elected institution is the presidency, which is formally and in practice subordinate to the Supreme Leader. Virtually every successive president has tried but failed to expand his authority relative to the Supreme Leader. Presidential authority, particularly on matters of national security, is also often circumscribed by key clerics and the generally hardline military and security organization called the Islamic Revolutionary Guard Corps (IRGC). But, the presidency is often the most influential economic policymaking position, as well as a source of patronage. The president appoints and supervises the cabinet, develops the budgets of cabinet departments, and imposes and collects taxes on corporations and other bodies. The presidency also runs oversight bodies such as the Anticorruption Headquarters and the General Inspection Organization, to which government officials are required to submit annual financial disclosures. Prior to 1989, Iran had both an elected president and a prime minister selected by the elected Majles (parliament). However, the holders of the two positions were constantly in institutional conflict and a 1989 constitutional revision eliminated the prime ministership. Because Iran's presidents have sometimes asserted the powers of their institution against the office of the Supreme Leader itself, since October 2011, Khamene'i has periodically raised the possibility of eventually eliminating the post of president and restoring the post of prime minister . The Majles Iran's Majles , or parliament, is a 290-seat, all-elected, unicameral body. There are five "reserved seats" for "recognized" minority communities—Jews, Zoroastrians, and Christians (three seats of the five). The Majles votes on each nominee to a cabinet post, and drafts and acts on legislation. Among its main duties is to consider and enact a proposed national budget (which runs from March 21 to March 20 each year, coinciding with Nowruz). It legislates on domestic economic and social issues, and tends to defer to executive and security institutions on defense and foreign policy issues. It is constitutionally required to ratify major international agreements, and it ratified the JCPOA in October 2015. The ratification was affirmed by the COG. Women regularly run and some generally are elected; there is no "quota" for the number of women. Majles elections occur one year prior to the presidential elections; the latest were held on February 26, 2016. The Assembly of Experts A major but little publicized elected institution is the 88-seat Assembly of Experts. Akin to a standing electoral college, it is empowered to choose a new Supreme Leader upon the death of the incumbent, and it formally "oversees" the work of the Supreme Leader. The Assembly can replace him if necessary, although invoking that power would, in practice, most likely occur in the event of a severe health crisis. The Assembly is also empowered to amend the constitution. It generally meets two times a year. Elections to the Assembly are held every 8-10 years, conducted on a provincial basis. Assembly candidates must be able to interpret Islamic law. In March 2011, the aging compromise candidate Ayatollah Mohammad Reza Mahdavi-Kani was named chairman, but he died in 2014. His successor, Ayatollah Mohammad Yazdi, lost his seat in the Assembly of Experts election on February 26, 2016 (held concurrently with the Majles elections), and COG Chairman Ayatollah Ahmad Jannati was appointed concurrently as the Assembly chairman in May 2016. Recent Elections Following the presidency regime stalwart Ali Akbar Hashemi-Rafsanjani during 1989-1997, a reformist, Mohammad Khatemi, won landslide victories in 1997 and 2001. However, hardliners marginalized him by the end of his term in 2005. Aided by widespread voiding of reformist candidacies by the COG, conservatives won a slim majority of the 290 Majles seats in the February 20, 2004, elections. In June 2005, the COG allowed eight candidates to compete (out of the 1,014 persons who filed), including Rafsanjani, Ali Larijani, IRGC stalwart Mohammad Baqer Qalibaf, and Tehran mayor Mahmoud Ahmadinejad. With reported tacit backing from Khamene'i, Ahmadinejad advanced to a runoff against Rafsanjani and then won by a 62% to 36% vote. Splits later erupted among hardliners, and pro-Ahmadinejad and pro-Khamene'i candidates competed against each other in the March 2008 Majles elections. Disputed 2009 Election . Reformists sought to unseat Ahmadinejad in the June 12, 2009, presidential election by rallying to Mir Hossein Musavi, who served as prime minister during the 1980-1988 Iran-Iraq War and, to a lesser extent, former Majles speaker Mehdi Karrubi. Musavi's generally young, urban supporters used social media to organize large rallies in Tehran, but pro-Ahmadinejad rallies were large as well. Turnout was about 85%. The Interior Ministry pronounced Ahmadinejad the winner (63% of the vote) only two hours after the polls closed. Supporters of Musavi, who received the second-highest total (about 35% of the vote) immediately protested the results as fraudulent because of the hasty announcement of the results—but some outside analysts said the results tracked preelection polls. Large antigovernment demonstrations occurred June 13-19, 2009. Security forces killed over 100 protesters (opposition figure—Iran government figure was 27), including a 19-year-old woman, Neda Soltani, who became an icon of the uprising. The opposition congealed into the "Green Movement of Hope and Change." Some protests in December 2009 overwhelmed regime security forces in some parts of Tehran, but the movement's activity declined after the regime successfully suppressed its demonstration on the February 11, 2010, anniversary of the founding of the Islamic Republic. As unrest ebbed, Ahmadinejad promoted his loyalists and a nationalist version of Islam that limits clerical authority, bringing him into conflict with Supreme Leader Khamene'i. Amid that rift, in the March 2012 Majles elections, candidates supported by Khamene'i won 75% of the seats, weakening Ahmadinejad. Since leaving office in 2013, and despite being appointed by Khamene'i to the Expediency Council, Ahmadinejad has emerged as a regime critic. His following appears to be limited, and he has faced prosecutions of alleged corruption, meanwhile returning to his prior work as a professor of civil engineering. June 2013 Election of Rouhani In the June 14, 2013, presidential elections, held concurrently with municipal elections, the major candidates included the following: Several hardliners that included Qalibaf (see above); Khamene'i foreign policy advisor Velayati; and then-chief nuclear negotiator Seyed Jalilli. Former chief nuclear negotiator Hassan Rouhani, a moderate and Rafsanjani ally. The COG denial of Rafsanjani's candidacy, which shocked many Iranians because of Rafsanjani's prominent place in the regime, as well as the candidacy of an Ahmadinejad ally. Green Movement supporters, who were first expected to boycott the vote, mobilized behind Rouhani after regime officials stressed that they were committed to a fair election. The vote produced a 70% turnout and a first-round victory for Rouhani, garnering about 50.7% of the 36 million votes cast. Hardliners generally garnered control of municipal councils in the major cities. Most prominent in Rouhani's first term cabinet were Foreign Minister: Mohammad Javad Zarif, a former Ambassador to the United Nations in New York, who was assigned to serve concurrently as chief nuclear negotiator (a post traditionally held by the chairman of the Supreme National Security Council). In September 2013, Rouhani appointed senior IRGC leader and former Defense Minister Ali Shamkhani, who generally espouses more moderate views than his IRGC peers, to head that body. Oil Minister: Bijan Zanganeh, who served in the same post during the Khatemi presidency and attracted significant foreign investment to the sector. He replaced Rostam Qasemi, who was associated with the corporate arm of the IRGC. Defense Minister: Hosein Dehgan. An IRGC stalwart, he was an early organizer of the IRGC's Lebanon contingent that evolved into the IRGC-Qods Force. He also was IRGC Air Force commander and deputy Defense Minister. Justice Minister: Mostafa Pour-Mohammadi. As deputy intelligence minister in late 1980s, he was reportedly a decisionmaker in the 1988 mass executions of Iranian prisoners. He was interior minister under Ahmadinejad. In the 115 th Congress, H.Res. 188 would have condemned Iran for the massacre. Majles and Assembly of Experts Elections in 2016 On February 26, 2016, Iran held concurrent elections for the Majles and for the Assembly of Experts. A runoff round for 68 Majles seats was held on April 29. For the Majles, 6,200 candidates were approved, including 586 female candidates. Oversight bodies invalidated the candidacies of about 6,000, including all but 100 reformists. Still, pro-Rouhani candidates won 140 seats, close to a majority, and the number of hardliners in the body was reduced significantly. Independents, whose alignments vary by issue, hold about 50 seats. Seventeen women were elected—the largest number since the revolution. The body reelected Ali Larijani as Speaker. For the Assembly of Experts election, 161 candidates were approved out of 800 who applied to run. Reformists and pro-Rouhani candidates defeated two prominent hardliners—the incumbent Assembly Chairman Mohammad Yazdi and Ayatollah Mohammad Taqi Mesbah-Yazdi. COG head Ayatollah Jannati retained his seat, but came in last for the 30 seats elected from Tehran Province. He was subsequently named chairman of the body. Presidential Election on May 19, 2017 In the latest presidential election on May 19, 2017, Rouhani won a first-round victory with about 57% of the vote. He defeated a major figure, Hojjat ol-Eslam Ibrahim Raisi—a close ally of Khamene'i. Even though other major hardliners had dropped out of the race to improve Raisi's chances, Raisi received only about 38% of the vote. Municipal elections were held concurrently. After vetting by local committees established by the Majles , about 260,000 candidates competed for about 127,000 seats nationwide. More than 6% of the candidates were women. The alliance of reformists and moderate-conservatives won control of the municipal councils of Iran's largest cities, including all 21 seats on the Tehran municipal council. The term of the existing councils expired in September 2017 and a reformist official, Mohammad Ali Najafi, replaced Qalibaf as Tehran mayor. However, Najafi resigned in March 2018 after criticism from hardliners for his viewing of a dance performance by young girls during a celebration of a national holiday. The current mayor, selected in November 2018, is Pirouz Hanachi. Second-Term Cabinet Rouhani was sworn into a second term in early August 2017. His second-term cabinet nominations retained most of the same officials in key posts, including Foreign Minister Zarif. Since the Trump Administration withdrew from the JCPOA in May 2018, hardliners have threatened to try to impeach Zarif for his role in negotiating that accord. In late February 2019, after being excluded from a leadership meeting with visiting President Bashar Al Asad of Syria, Zarif announced his resignation over the social media application Instagram. Rouhani did not accept the resignation and Zarif resumed his duties. Key changes to the second-term cabinet include the following: Minister of Justice Seyed Alireza Avayee replaced Pour-Mohammadi. Formerly a state prosecutor, Avayee oversaw trials of protesters in the 2009 uprising and is subject to EU travel ban and asset freeze. Defense Minister Amir Hatami, a regular military officer, became the first non-IRGC Defense Minister in more than 20 years and the first regular military officer in that position. The cabinet has two women vice presidents, and one other woman as a member of the cabinet (but not heading any ministry). Periodic Unrest Challenges Regime7 In December 2017, significant unrest erupted in more than 80 cities, mostly over economic conditions, although demonstrations were smaller than the 2009-2010 protests. Protests initially cited economic concerns—the high prices of staple foods—but quickly evolved to expressions of opposition to Iran's leadership and the expenditure of resources on interventions throughout the Middle East. Some protesters were motivated by Rouhani's 2018-2019 budget proposals to increase funds for cleric-run businesses (" bonyads ") and the IRGC, while cutting subsidies. Rouhani sought to defuse the unrest by acknowledging the right to protest and the legitimacy of some demonstrator grievances. Khamene'i at first attributed the unrest to covert action by Iran's foreign adversaries, particularly the United States, but he later acknowledged unspecified "problems" in the administration of justice. Security officers used force against protester violence in some cities, but experts say they generally exercised restraint. The government also temporarily shut down access to the social media site Instagram and a widely used messaging system called "Telegram." Iranian official media reported that 25 were killed and nearly 4,000 were arrested during that period of unrest. Since February 2018, some women have continued protesting the strict public dress code, and some have been detained. Small protests and other acts of defiance have continued since, including significant unrest in the Tehran bazaar in July 2018 in the context of shortages of some goods and shop closures due to the inability to price their goods for profit. Since September 2018, workers in various industries, including trucking and teaching, have conducted strikes to demand higher wages to help cope with rising prices. Rounds of nationwide teachers' strikes began in mid-February 2019. In mid-2018, possibly to try to divert blame for Iran's economic situation, the regime established special "anticorruption courts" that have, in some cases, imposed the death penalty on businessmen accused of taking advantage of reimposed sanctions for personal profit. Iran also has used military action against armed factions that are based or have support outside Iran. In early 2019, protests have taken place in southwestern Iran in response to the government's missteps in dealing with the effects of significant flooding in that area. The regime has tasked the leadership of the relief efforts to the IRGC and IRGC-QF, working with Iraqi Shia militias who are powerful on the Iraqi side of the border where the floods have taken place. President Trump and other senior officials have supported protests by warning the regime against using force and vowing to hold officials responsible for harming protestors. The Administration also has requested U.N. Security Council meetings to consider Iran's crackdown on the unrest, although no formal U.N. action was taken. The Administration also imposed U.S. sanctions on identified regime officials and institutions responsible for abuses against protestors, including then-judiciary chief Sadeq Larijani, representing the highest-level Iranian official sanctioned by the United States to date. In the 115 th Congress, several resolutions supported the protestors, including H.Res. 676 (passed House January 9, 2018), S.Res. 367 , H.Res. 675 , and S.Res. 368 . Human Rights Practices10 U.S. State Department reports, including the Iran Action Group's September 2018 "Outlaw Regime" document, and reports from a U.N. Special Rapporteur, have long cited Iran for a wide range of abuses—aside from its suppression of political opposition—including escalating use of capital punishment, executions of minors, denial of fair public trial, harsh and life-threatening conditions in prison, and unlawful detention and torture. In a speech on Iran on July 22, 2018, Secretary of State Pompeo recited a litany of U.S. accusations of Iranian human rights abuses, and stated "America is unafraid to expose human rights violations and support those who are being silenced." State Department and U.N. Special Rapporteur reports have noted that the 2013 revisions to the Islamic Penal Code a nd the 2015 revisions to the Criminal Procedure Code made some reforms, including eliminating death sentences for children convicted of drug-related offenses and protecting the rights of the accused. A "Citizen's Rights Charter," issued December 19, 2016, at least nominally protects free expression and is intended to raise public awareness of citizen rights. It also purportedly commits the government to implement the Charter's 120 articles. In August 2017, Rouhani appointed a woman, former vice president Shahindokht Molaverdi, to oversee implementation of the Charter. The State Department's human rights report for 2018 says that key Charter protections for individual rights of freedom to communicate and access information have not been implemented. A U.N. Special Rapporteur on Iran human rights was reestablished in March 2011 by the U.N. Human Rights Council (22 to 7 vote), resuming work done by a Special Rapporteur on Iran human rights during 1988-2002. The Rapporteur appointed in 2016, Asma Jahangir, issued two Iran reports, the latest of which was dated August 14, 2017 (A/72/322), before passing away in February 2018. The special rapporteur mandate was extended on March 24, 2018 and British-Pakistani lawyer Javaid Rehman was appointed in July 2018. The U.N. General Assembly has insisted that Iran cooperate by allowing the Special Rapporteur to visit Iran, but Iran has instead only responded to Special Rapporteur inquiries through agreed "special procedures." Despite the criticism of its human rights record, on April 29, 2010, Iran acceded to the U.N. Commission on the Status of Women. It also sits on the boards of the U.N. Development Program (UNDP) and UNICEF. Iran's U.N. dues are about $9 million per year. Iran has an official body, the High Council for Human Rights, headed by former Foreign Minister Mohammad Javad Larijani (brother of the Majles speaker and the judiciary head). It generally defends the government's actions to outside bodies rather than oversees the government's human rights practices, but Larijani, according to the Special Rapporteur, has questioned the effectiveness of drug-related executions and other government policies. As part of its efforts to try to compel Iran to improve its human rights practices, the United States has imposed sanctions on Iranian officials alleged to have committed human rights abuses, and on firms that help Iranian authorities censor or monitor the internet. Human rights-related sanctions are analyzed in significant detail in CRS Report RS20871, Iran Sanctions , by Kenneth Katzman. U.S.-Iran Relations, U.S. Policy, and Options The February 11, 1979, fall of the Shah of Iran, who was a key U.S. ally, shattered U.S.-Iran relations. The Carter Administration's efforts to build a relationship with the new regime in Iran ended after the November 4, 1979, takeover of the U.S. Embassy in Tehran by radical pro-Khomeini "Students in the Line of the Imam." The 66 U.S. diplomats there were held hostage for 444 days, and released pursuant to the January 20, 1981 "Algiers Accords." Their release was completed minutes after President Reagan's inauguration on January 20, 1981. The United States broke relations with Iran on April 7, 1980, two weeks prior to a failed U.S. military attempt to rescue the hostages. Iran has since then pursued policies that successive Administrations considered inimical to U.S. interests in the Near East region and beyond. Iran's authoritarian political system and human rights abuses have contributed to, but have not necessarily been central to, the U.S.-Iran rift, although some observers assert that Iran's behavior flows directly from the nature of its regime. Iran has an interest section in Washington, DC, under the auspices of the Embassy of Pakistan, and staffed by Iranian Americans. The former Iranian Embassy closed in April 1980 when the two countries broke diplomatic relations, and remains under the control of the State Department. Iran's Mission to the United Nations in New York runs most of Iran's diplomacy inside the United States. The U.S. interests section in Tehran, under the auspices of the Embassy of Switzerland, has no American personnel. The following sections analyze some key hallmarks of past U.S. policies toward Iran. Reagan Administration: Iran Identified as Terrorism State Sponsor The Reagan Administration designated Iran a "state sponsor of terrorism" in January 1984—a designation established by the Export Administration Act of 1979—largely in response to Iran's backing for the October 1983 bombing of the Marine Barracks in Beirut. The Administration also "tilted" toward Iraq in the 1980-1988 Iran-Iraq War. During 1987-1988, U.S. naval forces fought several skirmishes with Iranian naval elements while protecting oil shipments transiting the Persian Gulf from Iranian mines and other attacks. On April 18, 1988, Iran lost one-quarter of its larger naval ships in an engagement with the U.S. Navy, including a frigate sunk. However, the Administration contradicted its efforts to favor Iraq's war effort by providing arms to Iran ("TOW" antitank weapons and I-Hawk air defense batteries) in exchange for Iran's help in the releasing of U.S. hostages held in Lebanon. On July 3, 1988, U.S. forces in the Gulf mistakenly shot down Iran Air Flight 655 over the Gulf, killing all 290 on board, contributing to Iran's decision to accept a cease-fire in the war with Iraq in August 1988. George H. W. Bush Administration: "Goodwill Begets Goodwill" In his January 1989 inauguration speech, President George H.W. Bush, in stating that "goodwill begets goodwill" with respect to Iran, implied that U.S.-Iran relations could improve if Iran helped obtain the release of U.S. hostages held by Hezbollah in Lebanon. Iran's apparent assistance led to the release of all remaining U.S. hostages there by the end of December 1991. However, no U.S.-Iran thaw followed, possibly because Iran continued to back violent groups opposed to the U.S. push for Arab-Israeli peace that followed the 1991 U.S. liberation of Kuwait. Clinton Administration: "Dual Containment" The Clinton Administration articulated a strategy of "dual containment" of Iran and Iraq—an attempt to keep both countries simultaneously weak rather than alternately tilting to one or the other. In 1995-1996, the Administration and Congress banned U.S. trade and investment with Iran and imposed penalties on foreign investment in Iran's energy sector, in response to Iran's support for terrorist groups seeking to undermine the Israeli-Palestinian peace process. The election of the moderate Mohammad Khatemi as president in May 1997 precipitated a U.S. offer of direct dialogue, but Khatemi did not accept the offer. In June 1998, then-Secretary of State Madeleine Albright called for mutual confidence building measures that could lead to a "road map" for normalization. In a March 17, 2000, speech, the Secretary admitted past U.S. interference in Iran. George W. Bush Administration: Iran Part of "Axis of Evil" In his January 2002 State of the Union message, President Bush named Iran as part of an "axis of evil" including Iraq and North Korea. However, the Administration enlisted Iran's diplomatic help in efforts to try to stabilize post-Taliban Afghanistan and post-Saddam Iraq. The Administration rebuffed a reported May 2003 Iranian overture transmitted by the Swiss Ambassador to Iran for an agreement on all major issues of mutual concern ("grand bargain" proposal). State Department officials disputed that the proposal was fully vetted within Iran's leadership. The Administration aided victims of the December 2003 earthquake in Bam, Iran, including through U.S. military deliveries into Iran. As Iran's nuclear program advanced, the Administration worked with several European countries to persuade Iran to agree to limit its nuclear program. President Bush's January 20, 2005, second inaugural address and his January 31, 2006, State of the Union message stated that the United States would be a close ally of a "free and democratic" Iran—appearing to support regime change. Obama Administration: Pressure, Engagement, and the JCPOA President Obama asserted that there was an opportunity to persuade Iran to limit its nuclear program through diplomacy and to potentially rebuild a U.S.-Iran relationship after decades of mutual animosity. The approach emerged in President Obama's first message to the Iranian people on the occasion of Nowruz (Persian New Year, March 21, 2009), in which he stated that the United States "is now committed to diplomacy that addresses the full range of issues before us, and to pursuing constructive ties among the United States, Iran, and the international community." He referred to Iran as "The Islamic Republic of Iran," appearing to reject a policy of regime change. The Administration reportedly also loosened restrictions on U.S. diplomats' meeting with their Iranian counterparts at international meetings. In a speech to the "Muslim World" in Cairo on June 4, 2009, President Obama acknowledged that the United States had played a role in the overthrow of Mossadeq and said that Iran had a right to peaceful nuclear power. In addition, President Obama exchanged several letters with Supreme Leader Khamene'i, reportedly expressing the Administration's support for engagement with Iran. In 2009, Iran's crackdown on the Green Movement uprising and its refusal to accept compromises to limit its nuclear program caused the Obama Administration to shift to a "two track" strategy: stronger economic pressure coupled with offers of negotiations that could produce sanctions relief. The sanctions imposed during 2010-2013 received broad international cooperation and caused economic difficulty in Iran, but the Administration also altered U.S. regulations to help Iranians circumvent their government's restrictions on internet usage. In early 2013, the Administration began direct but unpublicized talks with Iranian officials in the Sultanate of Oman to probe Iran's willingness to reach a comprehensive nuclear accord. The Administration also repeatedly stated that a military option is "on the table." The election of Rouhani in June 2013 contributed to a U.S. shift to emphasizing diplomacy. President Obama, in his September 24, 2013 U.N. General Assembly speech, confirmed an exchange of letters with Rouhani stating U.S. willingness to resolve the nuclear issue peacefully and that the United States "[is] not seeking regime change." The two presidents spoke by phone on September 27, 2013—the first direct U.S.-Iran presidential contact since Iran's revolution. After the JCPOA was finalized in July 2015, the United States and Iran held bilateral meetings at the margins of all nuclear talks and in other settings, covering regional and bilateral issues. President Obama expressed hope that the JCPOA would "usher[] in a new era in U.S.-Iranian relations," while at the same time asserting that the JCPOA would benefit U.S. national security even without a broader rapprochement. President Obama met Foreign Minister Zarif at the September 2015 General Assembly session, but no contact was reported during the September 2016 U.N. General Assembly session. Still, the signs that U.S.-Iran relations could improve as a result of the JCPOA were mixed, including as discussed below. Coinciding with Implementation Day of the JCPOA (January 16, 2016), the dual citizens held by Iran at that time were released and a long-standing Iranian claim for funds paid for undelivered military equipment from the Shah's era was settled—resulting in $1.7 billion in cash payments (euros, Swiss francs, and other non-U.S. hard currencies) to Iran—$400 million for the original DOD monies and $1.3 billion for an arbitrated amount of interest. Administration officials asserted that the nuclear diplomacy provided an opportunity to resolve these outstanding issues, but some Members of Congress criticized the simultaneity of the financial settlement as paying "ransom" to Iran. Obama Administration officials asserted that it had long been assumed that the United States would need to return monies to Iran for the undelivered military equipment and that the amount of interest agreed was likely less than what Iran might have been awarded by the U.S.-Iran Claims Tribunal. Iran subsequently jailed several other dual nationals (see box below). Iran continued to provide support to allies and proxies in the region, and it continued "high speed intercepts" of U.S. warships in the Persian Gulf. Iran conducted at least four ballistic missile tests from the time the JCPOA was finalized in 2015 until the end of the Obama Administration, which termed the tests "defiant of" or "inconsistent with" Resolution 2231. The tests prompted additional U.S. designations for sanctions of entities that support Iran's program. Iranian officials argued that new U.S. visa requirements in the FY2016 Consolidated Appropriations Act ( P.L. 114-113 ) would cause European businessmen to hesitate to travel to Iran and thereby limit Iran's economic reintegration. Then-Secretary of State Kerry wrote to Foreign Minister Zarif on December 19, 2015, that the United States would implement the provision so as to avoid interfering with "legitimate business interests of Iran." In January 2016, Kerry worked with Zarif to achieve the rapid release of 10 U.S. Navy personnel who the IRGC took into custody when their two riverine crafts strayed into what Iran considers its territorial waters. There was no expansion of diplomatic representation such as the posting of U.S. nationals to staff the U.S. interests section in Tehran, nor did then-Secretary of State Kerry visit Iran. In 2014, Iran appointed one of those involved in the 1979 seizure of the U.S. embassy in Tehran—Hamid Aboutalebi—as ambassador to the United Nations. But, in April 2014, Congress passed S. 2195 ( P.L. 113-100 ), which gave the Administration authority to deny him a visa to take up his duties. The United States subsequently announced he would not be admitted. Iran replaced him with Gholam Ali Khoshroo, who studied in the United States and served in Khatemi's government. In May 2015, the two governments granted each other permission to move their respective interests sections to more spacious locations. Khoshroo was replaced in April 2019 by Majid Takht Ravanchi. Trump Administration: Return to Hostility and "Maximum Pressure" The Trump Administration has shifted policy back to the pre-JCPOA stance, asserting that the JCPOA addressed only nuclear issues and hindered the U.S. ability to roll back Iran's "malign" regional activities or reduce its military and missile capabilities. Administration officials assert that Administration policy is to pressure Iran's economy to (1) compel it to renegotiate the JCPOA to address the broad range of U.S. concerns and (2) deny Iran the revenue to continue to develop its strategic capabilities or intervene throughout the region. Administration statements of opposition to how Iran is governed suggest that an element of the policy is to create enough economic difficulties to stoke unrest in Iran, possibly to the point where the regime collapses. The policy, and elements of it, have been articulated as follows: Citing Iran's arming of the Houthis in Yemen, on February 1, 2017, then-National Security Adviser Michael Flynn stated that Iran was "officially on notice" about its provocative behavior. In April 2017, the Administration announced a six-month Iran policy review based on the premise that the JCPOA "only delays [Iran's] goal of becoming a nuclear state" and had failed to curb Iran's objectionable regional behavior. During his May 20-24, 2017, visit to the region, President Trump told Arab leaders in Saudi Arabia that "Until the Iranian regime is willing to be a partner for peace, all nations of conscience must work together to isolate Iran, deny it funding for terrorism, and pray for the day when the Iranian people have the just and righteous government they deserve." The following month, then-Secretary of State Tillerson testified that the Administration would work to support elements in Iran that would lead to a "peaceful transition" of Iran's government. On October 13, 2017, President Trump, citing the results of the policy review, stated that he would not certify Iranian JCPOA compliance (under the Iran Nuclear Agreement Review Act, INARA, P.L. 114-17 ), and that the United States would only stay in the accord if Congress and U.S. allies (1) address the expiration of JCPOA nuclear restrictions, (2) curb Iran's ballistic missile program, and (3) counter Iran's regional activities. The denial of certification under INARA triggered a 60-day period for Congress to take legislative action under expedited procedures to reimpose those sanctions that were lifted. Congress did not take such action. On January 12, 2018, the President announced that he would not continue to waive Iran sanctions at the next expiration deadline (May 12) unless the JCPOA's weaknesses were addressed by Congress and the European countries. Withdrawal from the JCPOA and Subsequent Pressure Efforts On May 8, 2018, following visits to the United States by the leaders of France and Germany imploring the United States to remain in the JCPOA, President Trump announced that the United States would withdraw from the JCPOA and reimpose all U.S. secondary sanctions, with full effect as of November 5, 2018. Statements by President Trump and Secretary of State Pompeo have since articulated U.S. policy as follows: On May 21, 2018, in his first speech as Secretary of State, Michael Pompeo announced a return to a U.S. strategy of pressuring Iran through sanctions and by working with allies against Iran's regional activities and proxies, as well as against its ballistic missile program, cyberattacks, and human rights abuses. He also expressed U.S. "solidarity" with the Iranian people. On July 22, 2018, in a speech to Iranian Americans at the Reagan Library in California, Secretary Pompeo recited a litany of Iranian human rights abuses, official corruption, and efforts to destabilize the region. The Secretary stated that "I have a message for the people of Iran. The United States hears you; the United States supports you; the United States is with you." On July 23, 2018, following threats by Rouhani and other Iranian leaders to cut off the flow of oil through the Persian Gulf if Iran's oil exports are prevented by sanctions, President Trump posted the following on Twitter: "To Iranian President Rouhani: NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE. WE ARE NO LONGER A COUNTRY THAT WILL STAND FOR YOUR DEMENTED WORDS OF VIOLENCE & DEATH. BE CAUTIOUS!" The tweet suggested to some that the United States might be intent on military action against Iran. On August 16, 2018, Secretary Pompeo announced the creation of an "Iran Action Group" at the State Department responsible for coordinating the department's Iran-related activities. The group is headed by Brian Hook, who holds the title of "Special Representative for Iran." In late September 2018, the group issued its "Outlaw Regime" report on Iran, in which Secretary of State Pompeo wrote in a preface that "The policy President Trump has laid out comes to terms fully with fact that the Islamic Republic of Iran is not a normal state ... " On October 3, 2018, the Administration abrogated the 1955 U.S.-Iran "Treaty of Amity, Economic Relations, and Consular Rights." Iran's legal representatives had cited the treaty to earn a favorable October 2 judgment from the International Court of Justice demanding that the United States reverse some humanitarian-related sanctions on Iran. The treaty, which provides for freedom of commerce between the two countries and unfettered diplomatic exchange, has long been mooted by post-1979 developments in U.S.-Iran relations. The abrogation of the treaty did not affect the status of the interests sections in each others' countries. Illustrating the extent to which the Administration wants U.S. partners to adopt U.S. policy toward Iran, the Administration organized a ministerial meeting in Warsaw, Poland, during February 13-14, 2019, focused on Middle East issues and with particular focus on countering the threat posed by Iran. For further information, see CRS In Focus IF11132, Coalition-Building Against Iran , by Kenneth Katzman On April 8, 2019, the Administration designated the IRGC as a foreign terrorist organization (FTO), blaming it for involvement in multiple past acts of Iran-backed terrorism and anti-U.S. actions. For further information, see CRS Insight IN11093, Iran's Revolutionary Guard Named a Terrorist Organization , by Kenneth Katzman. On April 22, 2019, the Administration announced it would no longer provide exceptions to countries that pledged to reduce their purchases of Iranian oil under the FY2012 National Defense Authorization Act ( P.L. 112-81 ). For further information, see CRS Insight IN11108, Iran Oil Sanctions Exceptions Ended , by Kenneth Katzman. As of May 3, 2019, U.S.-Iran tensions escalated following intelligence reports that Iran and/or its allies and proxies might be preparing to attack U.S. forces or personnel in the region, and the United States deployed additional forces to the Gulf to deter such action. As tensions escalated, U.S. officials issued a variety of statements. For example, on May 20, 2019, President Trump posted the following on Twitter: "If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again!" Yet, as May ended, President Trump and his senior aides and Cabinet officers all indicated that the United States did not seek war with Iran, did not seek to change Iran's regime, and welcomed talks to ease tensions and renegotiate a JCPOA. Policy Elements and Options As have its predecessors, the Trump Administration has not publicly taken any policy option "off the table." Some options, such as sanctions, are being emphasized, while others are being considered or threatened to varying degrees. Engagement and Improved Bilateral Relations Successive Administrations have debated the degree to which to pursue engagement with Iran, and U.S. efforts to engage Iran sometimes have not coincided with Iranian leadership willingness to engage the United States. President Trump has publicly welcomed engagement with Iran's President Rouhani, but Administration officials have set strict conditions for any significant improvement in U.S.-Iran relations. Secretary of State Pompeo, in his May 21, 2018, speech referenced above, stipulated a list of 12 behavior changes by Iran that would be required for a normalization of U.S.-Iran relations and to be included in a revised JCPOA. Many of the demands—such as ending support for Lebanese Hezbollah—would strike at the core of Iran's revolution and are unlikely to be met by Iran under any circumstances. At a July 30, 2018, press conference, President Trump stated he would be willing to meet President Rouhani without conditions, presumably during the September 2018 General Assembly meetings in New York. Rouhani indicated that the U.S-Iran relationship was not conducive to such a meeting, and President Trump later stated he would not meet with Rouhani during the General Assembly meetings, even though President Rouhani is probably "an absolutely lovely man." In December 2018, President Rouhani stated that the United States directly requested negotiations with Iran on eight occasions in 2017, and "indirectly" requested negotiations on three occasions in 2018. He said that Iran rebuffed these overtures. Following the U.S. designation of the IRGC as an FTO and the denial of further sanctions exceptions for the purchases of Iranian oil, Foreign Minister Zarif appeared to raise the possibility for some U.S.-Iran talks on selected issues. At an April 24, 2019 research institute public meeting in New York, Zarif offered to negotiate an exchange of Iranians held in U.S. jails for some or all of the U.S.-Iran nationals held by Iran (see box above). In the context of escalating U.S.-Iran tensions in May 2019, President Trump apparently sought to de-escalate by restating his interest in direct talks, stating the following on May 9, 2019: What they [Iranian leaders] should be doing is calling me up, sitting down; we can make a deal, a fair deal ... but they should call, and if they do, we're open to talk to them. In late May 2019, in the course of an official visit to Japan, President Trump said he would support Japanese Prime Minister Shinzo Abe's efforts to act as a mediator between the United States and Iran. Concurrently, Secretary Pompeo and other U.S. officials were in contact with leaders of Oman, Qatar, and Switzerland, apparently in an effort to explore the potential for talks with Iran. Possibly in connection, foreign ministers and other high-ranking diplomats from Iran and Oman, Qatar, and Kuwait exchanged visits. Military Action Successive Administrations have sought to back up other policy options with a capability to use military force against Iran. Prior to the JCPOA, supporters of military action against Iran's nuclear program argued that such action could set back Iran's nuclear program substantially. A U.S. ground invasion to remove Iran's regime apparently has not been considered at any time. The Obama Administration repeatedly stated that "all options are on the table" to prevent Iran from acquiring a nuclear weapon. However, the Obama Administration asserted that military action would set back Iran's nuclear advancement with far less certainty or duration than would a nuclear agreement. And Iranian retaliation could potentially escalate and expand throughout the region, reduce Iran's regional isolation, strengthen Iran's regime domestically, and raise oil prices. After the JCPOA was finalized, President Obama reiterated the availability of this option should Iran violate the agreement. Obama Administration officials articulated that U.S. military action against Iran might also be used if Iran attacked or prepared to attack U.S. allies or attempted to interrupt the free flow of oil or shipping in the Gulf or elsewhere. The Trump Administration has similarly stated that "all options are open," referring to military action. The Administration's pullout from the JCPOA was accompanied by threats to take unspecified action if Iran were to leave the accord and restart banned aspects of its nuclear program. In the context of significant U.S.-Iran tensions in May 2019 that resulted in added U.S. military deployments to the Gulf region, the Administration has reiterated threats to use force against Iran's nuclear program or if Iran were to attack U.S. forces or personnel in the region. Yet, as noted, President Trump has sought to de-escalate tensions and has told his top officials that the Administration does not want conflict with Iran. For more information on the potential for U.S. military action in the context of U.S.-Iran tensions, see CRS In Focus IF11212, U.S.-Iran Tensions Escalate , by Kenneth Katzman. Whereas the United States has not initiated military action against Iranian or Iran-backed forces in Syria, the Administration has publicly supported Israel's frequent strikes on Iranian and Hezbollah infrastructure there. And, the U.S. Navy has conducted operations to interdict Iranian weapons shipments to the Houthi rebels in Yemen. For detailed information on U.S. military activity in the region that is, in whole or in part, directed against Iran and Iranian allies, see CRS Report R44017, Iran's Foreign and Defense Policies , by Kenneth Katzman. Authorization for Force Issues With regard to presidential authorities, S.J.Res. 41 , which passed the Senate on September 22, 2012, in the 112 th Congress, rejects any U.S. policy that relies on "containment" of a potential nuclear Iran. No legislation has been enacted that would limit the President's authority to use military force against Iran, but neither has there been legislation authorizing the use of force against Iran. At a Senate Foreign Relations Committee hearing on April 10, 2019, Secretary of State Pompeo answered questions on whether the Administration considers the use of force against Iran as authorized, indicating that he would defer to Administration legal experts on that question. However, he indicated, in response to questions whether the 2001 authorization for force against Al Qaeda could apply to Iran, that Iran has harbored members of Al Qaeda. Economic Sanctions The U.S. withdrawal from the JCPOA and reimposition of all U.S. sanctions has major implications. The table below summarizes sanctions that have been used against Iran. Regime Change One recurring U.S. policy question has been whether the United States should support efforts within Iran to overthrow Iran's leadership. During the 2009 Green Movement uprising, the Obama Administration asserted that extensive U.S. support for the uprising would undermine the opposition's position in Iran. President Obama did, however, give some public support to the demonstrators, and his 2011 Nowruz (Persian New Year) address mentioned specific dissidents and said "young people of Iran ... I want you to know that I am with you." However, in a September 24, 2013, General Assembly speech, President Obama explicitly stated that the United States does not seek to change Iran's regime. The Trump Administration—in cited statements by Secretary Pompeo and other U.S. officials—asserts that its policy is to change Iran's behavior, not to change its regime. However, the content of these and other statements by Administration officials, in particular Secretary Pompeo's speech to Iranian Americans at the Reagan Library on July 22, 2018, suggests support for a regime change outcome. In his speech on May 21, 2017, in Saudi Arabia, President Trump stated that his Administration is hoping that Iran's government will change to one that the Administration considers "just and righteous." In testimony before two congressional committees in June 2017, then-Secretary of State Rex Tillerson said the Administration supports a "philosophy of regime change" for Iran (Senate Appropriations Committee) and that the Administration would "work toward support of those elements inside of Iran that would lead to a peaceful transition of that government" (House Foreign Affairs Committee). In his October 13, 2017, policy announcement on Iran, President Trump stated that we stand in total solidarity with the Iranian regime's longest-suffering victims: its own people. The citizens of Iran have paid a heavy price for the violence and extremism of their leaders. The Iranian people long to—and they just are longing, to reclaim their country's proud history, its culture, its civilization, its cooperation with its neighbors. Subsequently, President Trump issued statements of support for the December 2017-January 2018 protests in Iran on Twitter and in other formats. In his May 8, 2018, announcement of a U.S. withdrawal from the JCPOA, President Trump stated Finally, I want to deliver a message to the long-suffering people of Iran. The people of America stand with you.... But the future of Iran belongs to its people. They are the rightful heirs to a rich culture and an ancient land, and they deserve a nation that does justice to their dreams, honor to their history and glory to God. In his speech to the Heritage Foundation on May 21, 2018, Secretary of State Pompeo added that the United States expresses total solidarity with the Iranian people. In his Reagan Library speech on July 22, 2018, Pompeo recited a litany of Iranian regime human rights abuses and governmental corruption that called into question its legitimacy and, in several passages and answers to questions, clearly expressed the hope that the Iranian people will oust the current regime. The apparent support for a regime change policy was furthered by Secretary Pompeo's announcement during that speech that the Broadcasting Board of Governors is launching a new full-time Persian-language service for television, radio, digital, and social media to help "ordinary Iranians inside of Iran and around the globe can know that America stands with them." Yet, there were signs of a possible modification or shift, at least in tone, in the context of escalating U.S.-Iran tensions in May 2019 that some assessed as potentially leading to conflict. During his visit to Japan in late May, President Trump specifically ruled out a policy of regime change, stating the following on May 27: These are great people—has a chance to be a great country with the same leadership. We are not looking for regime change. I just want to make that clear. We're looking for no nuclear weapons. At times, some in Congress have advocated that the United States adopt a formal policy of overthrow of the regime. In the 111 th Congress, one bill said that it should be U.S. policy to promote the overthrow of the regime (the Iran Democratic Transition Act, S. 3008 ). Many of Iran's leaders, particularly Supreme Leader Khamene'i, continue to articulate a perception that the United States has never accepted the 1979 Islamic revolution. Khamene'i and other Iranian figures note that the United States provided funding to antiregime groups, mainly promonarchists, during the 1980s. Democracy Promotion and Internet Freedom Efforts Successive Administrations and Congresses have sought to at least lay the groundwork for eventual regime change through "democracy promotion" programs and sanctions on Iranian human rights abuses. Legislation authorizing democracy promotion in Iran was enacted in the 109 th Congress. The Iran Freedom Support Act ( P.L. 109-293 , signed September 30, 2006) authorized funds (no specific dollar amount) for Iran democracy promotion. Several laws and Executive Orders issued since 2010 are intended to promote internet freedom, and the Administration has amended U.S.-Iran trade regulations to allow for the sale to Iranians of consumer electronics and software that help them communicate. Then-Under Secretary of State Wendy Sherman testified on October 14, 2011, that some of the democracy promotion funding for Iran was used to train Iranians to use technologies that circumvent regime internet censorship. Many have argued that U.S. funding for such programs is counterproductive because the support has caused Iran to use the support as a justification to accuse the civil society activists of disloyalty. Some civil society activists have refused to participate in U.S.-funded programs, fearing arrest. The Obama Administration altered Iran democracy promotion programs somewhat toward working with Iranians inside Iran who are organized around apolitical issues such as health, education, science, and the environment. The State Department, which often uses appropriated funds to support prodemocracy programs run by organizations based in the United States and in Europe, refuses to name grantees for security reasons. The funds shown below have been obligated through DRL and the Bureau of Near Eastern Affairs in partnership with USAID. Some of the funds have also been used for cultural exchanges, public diplomacy, and broadcasting to Iran. A further indication of the sensitivity of specifying the use of the funds is that, since FY2010, funds have been provided for Iran civil society/democracy promotion as part of a broader "Near East Regional Democracy programs" (NERD). Iran asserts that funding democracy promotion represents a violation of the 1981 "Algiers Accords" that settled the Iran hostage crisis and provide for noninterference in each other's internal affairs. The George W. Bush Administration asserted that open funding of Iranian prodemocracy activists (see below) was a stated effort to change regime behavior, not to overthrow the regime, although some saw the Bush Administration's efforts as a cover to achieve a regime change objective. Broadcasting/Public Diplomacy Issues Another part of the democracy promotion effort has been the development of Iran-specific U.S. broadcasting services to Iran. Radio Farda ("tomorrow," in Farsi) began under Radio Free Europe/Radio Liberty (RFE/RL), in partnership with the Voice of America (VOA), in 2002. The service was established as a successor to a smaller Iran broadcasting effort begun with an initial $4 million from the FY1998 Commerce/State/Justice appropriation ( P.L. 105-119 ). It was to be called Radio Free Iran but was never formally given that name by RFE/RL. Based in Prague, Radio Farda broadcasts 24 hours/day, and its budget is over $11 million per year. No U.S. assistance has been provided to Iranian exile-run stations. As noted above, Secretary Pompeo has announced a new Persian-language channel for Iranians through various media, but it is not clear whether this new service will augment existing programs or form an entirely new program. VOA Persian Service. The VOA established a Persian-language service to Iran in July 2003. It consists of radio broadcasting (one hour a day of original programming); television (six hours a day of primetime programming, rebroadcast throughout a 24-hour period); and internet. The service has come been criticized by observers for losing much of its audience among young, educated, antiregime Iranians who are looking for signs of U.S. official support. The costs for the service are about $20 million per year. State Department Public Diplomacy Efforts The State Department has sought outreach to the Iranian population. In May 2003, the State Department added a Persian-language website to its list of foreign-language websites, under the authority of the Bureau of International Information Programs. The website was announced as a source of information about the United States and its policy toward Iran. In February 14, 2011, the State Department began Persian-language Twitter feeds in an effort to connect better with internet users in Iran. Since 2006, the State Department has been increasing the presence of Persian-speaking U.S. diplomats in U.S. diplomatic missions around Iran, in part to help identify and facilitate Iranian participation in U.S. democracy-promotion programs. The Iran unit at the U.S. Consulate in Dubai has been enlarged significantly into a "regional presence" office, and "Iran-watcher" positions have been added to U.S. diplomatic facilities in Baku, Azerbaijan; Istanbul, Turkey; Frankfurt, Germany; London; and Ashkabad, Turkmenistan, all of which have large expatriate Iranian populations and/or proximity to Iran. Summary:	null	96	70,231	70,233	70,233	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Political History Iran is a country of nearly 80 million people, located in the heart of the Persian Gulf region. The United States was an ally of the late Shah of Iran, Mohammad Reza Pahlavi ("the Shah"), who ruled from 1941 until his ouster in February 1979. The Shah assumed the throne when Britain and Russia forced his father, Reza Shah Pahlavi (Reza Shah), from power because of his perceived alignment with Germany in World War II. Reza Shah had assumed power in 1921 when, as an officer in Iran's only military force, the Cossack Brigade (reflecting Russian influence in Iran in the early 20 th century), he launched a coup against the government of the Qajar Dynasty, which had ruled since 1794. Reza Shah was proclaimed Shah in 1925, founding the Pahlavi dynasty. The Qajar dynasty had been in decline for many years before Reza Shah's takeover. That dynasty's perceived manipulation by Britain and Russia had been one of the causes of the 1906 constitutionalist movement, which forced the Qajar dynasty to form Iran's first Majles (parliament) in August 1906 and promulgate a constitution in December 1906. Prior to the Qajars, what is now Iran was the center of several Persian empires and dynasties whose reach shrank steadily over time. After the 16 th century, Iranian empires lost control of Bahrain (1521), Baghdad (1638), the Caucasus (1828), western Afghanistan (1857), Baluchistan (1872), and what is now Turkmenistan (1894). Iran adopted Shiite Islam under the Safavid Dynasty (1500-1722), which ended a series of Turkic and Mongol conquests. The Shah was anti-Communist, and the United States viewed his government as a bulwark against the expansion of Soviet influence in the Persian Gulf and a counterweight to pro-Soviet Arab regimes and movements. Israel maintained a representative office in Iran during the Shah's time and the Shah supported a peaceful resolution of the Arab-Israeli dispute. In 1951, under pressure from nationalists in the Majles (parliament) who gained strength in the 1949 Majles elections, he appointed a popular nationalist parliamentarian, Dr. Mohammad Mossadeq, as prime minister. Mossadeq was widely considered left-leaning, and the United States was wary of his drive for nationalization of the oil industry, which had been controlled since 1913 by the Anglo-Persian Oil Company. His followers began an uprising in August 1953 when the Shah tried to dismiss him, and the Shah fled. The Shah was restored to power in a CIA-supported uprising that toppled Mossadeq ("Operation Ajax") on August 19, 1953. The Shah tried to modernize Iran and orient it toward the West, but in so doing he alienated the Shiite clergy and religious Iranians. He incurred broader resentment by using his SAVAK intelligence service to repress dissent. The Shah exiled Ayatollah Ruhollah Khomeini in 1964 because of Khomeini's active opposition to what he asserted were the Shah's anticlerical policies and forfeiture of Iran's sovereignty to the United States. Khomeini fled to and taught in Najaf, Iraq, a major Shiite theological center. In 1978, three years after the March 6, 1975, Algiers Accords between the Shah and Iraq's Baathist leaders that temporarily ended mutual hostile actions, Iraq expelled Khomeini to France, where he continued to agitate for revolution that would establish Islamic government in Iran. Mass demonstrations and guerrilla activity by pro-Khomeini forces caused the Shah's government to collapse. Khomeini returned from France on February 1, 1979, and, on February 11, 1979, he declared an Islamic Republic of Iran. Khomeini's concept of velayat-e-faqih (rule by a supreme Islamic jurisprudent, or "Supreme Leader") was enshrined in the constitution that was adopted in a public referendum in December 1979 (and amended in 1989). The constitution provided for the post of Supreme Leader of the Revolution. The regime based itself on strong opposition to Western influence, and relations between the United States and the Islamic Republic turned openly hostile after the November 4, 1979, seizure of the U.S. Embassy and its U.S. diplomats by pro-Khomeini radicals, which began the so-called hostage crisis that ended in January 1981 with the release of the hostages. Ayatollah Khomeini died on June 3, 1989, and was succeeded by Ayatollah Ali Khamene'i. The regime faced serious unrest in its first few years, including a June 1981 bombing at the headquarters of the Islamic Republican Party (IRP) and the prime minister's office that killed several senior elected and clerical leaders, including then-Prime Minister Javad Bahonar, elected President Ali Raja'i, and IRP head and top Khomeini disciple Ayatollah Mohammad Hussein Beheshti. The regime used these events, along with the hostage crisis with the United States, to justify purging many of the secular, liberal, and left-wing personalities that had been prominent in the years just after the revolution. Examples included the regime's first Prime Minister Mehdi Bazargan; the pro-Moscow Tudeh Party (Communist); the People's Mojahedin Organization of Iran (PMOI, see below); and the first elected president, Abolhassan Bani Sadr. The regime was under economic and military threat during the 1980-1988 Iran-Iraq War. Regime Structure, Stability, and Opposition Some experts attribute the acrimony that has characterized U.S.-Iran relations since the Islamic revolution to the structure of Iran's regime. Although there are some elected leadership posts and diversity of opinion, Iran's constitution—adopted in public referenda in 1980 and again in 1989—reserves paramount decisionmaking authority for a "Supreme Leader" (known in Iran as "Leader of the Revolution"). The President and the Majles (unicameral parliament) are directly elected, and since 2013, there have been elections for municipal councils that set local development priorities and select mayors. Even within the unelected institutions, factional disputes between those who insist on ideological purity and those considered more pragmatic are evident. In part because of the preponderant political power of the clerics and the security services, the regime has faced repeated periodic unrest from minorities, intellectuals, students, labor groups, the poor, women, and members of Iran's minority groups. (Iran's demographics are depicted in a text box below.) U.S. officials in successive Administrations have accused Iran's regime of widespread corruption, both within the government and among its pillars of support. In a speech on Iran on July 22, 2018, Secretary of State Michael Pompeo characterized Iran's government as "something that resembles the mafia more than a government." He detailed allegations of the abuse of privileges enjoyed by Iran's leaders and supporting elites to enrich themselves and their supporters at the expense of the public good. The State Department's September 2018 "Outlaw Regime" report (p. 41) states that "corruption and mismanagement at the highest levels of the Iranian regime have produced years of environmental exploitation and degradation throughout the country." Unelected or Indirectly Elected Institutions: The Supreme Leader, Council of Guardians, and Expediency Council Iran's power structure consists of unelected or indirectly elected persons and institutions. The Supreme Leader At the apex of the Islamic Republic's power structure is the "Supreme Leader." He is chosen by an elected body—the Assembly of Experts—which also has the constitutional power to remove him, as well as to redraft Iran's constitution and submit it for approval in a national referendum. The Supreme Leader is required to be a senior Shia cleric. Upon Ayatollah Khomeini's death, the Assembly selected one of his disciples, Ayatollah Ali Khamene'i, as Supreme Leader. Although he has never had Khomeini's undisputed political or religious authority, the powers of the office ensure that Khamene'i is Iran's paramount leader. Under the constitution, the Supreme Leader is commander-in-chief of the armed forces, giving him the power to appoint commanders. Khamene'i makes five out of the nine appointments to the country's highest national security body, the Supreme National Security Council (SNSC), including its top official, the secretary of the body. Khamene'i also has a representative of his office as one of the nine members, who typically are members of the regime's top military, foreign policy, and domestic security organizations. The Supreme Leader can remove an elected president, if the judiciary or the Majles (parliament) assert cause for removal. The Supreme Leader appoints half of the 12-member Council of Guardians , all members of the Expediency Council , and the judiciary head. Succession to Khamene'i There is no announced successor to Khamene'i. The Assembly of Experts could conceivably use a constitutional provision to set up a three-person leadership council as successor rather than select one new Supreme Leader. Khamene'i reportedly favors as his successor Hojjat ol-Eslam Ibrahim Raisi, whom he appointed in March 2019 as new head of the judiciary, and in 2016 to head the powerful Shrine of Imam Reza (Astan-e Qods Razavi) in Mashhad, which controls vast property and many businesses in the province. Raisi is a hardliner who has served as state prosecutor and was allegedly involved in the 1988 massacre of prisoners and other acts of repression. The 2019 judiciary appointment suggests that Raisi's chances of becoming Supreme Leader were not necessarily diminished by his loss in the May 2017 presidential elections. Still, the person Raisi replaced as judiciary chief, Ayatollah Sadeq Larijani, remains a succession candidate. Another contender is hardline Tehran Friday prayer leader Ayatollah Ahmad Khatemi, and some consider President Rouhani as a significant contender as well. Council of Guardians and Expediency Council Two appointed councils play a major role on legislation, election candidate vetting, and policy. Council of Guardians The 12-member Council of Guardians (COG) consists of six Islamic jurists appointed by the Supreme Leader and six lawyers selected by the judiciary and confirmed by the Majles . Each councilor serves a six-year term, staggered such that half the body turns over every three years. Currently headed by Ayatollah Ahmad Jannati, the conservative-controlled body reviews legislation to ensure it conforms to Islamic law. It also vets election candidates by evaluating their backgrounds according to constitutional requirements that each candidate demonstrate knowledge of Islam, loyalty to the Islamic system of government, and other criteria that are largely subjective. The COG also certifies election results. Municipal council candidates are vetted not by the COG but by local committees established by the Majles . Expediency Council The Expediency Council was established in 1988 to resolve legislative disagreements between the Majles and the COG. It has since evolved into primarily a policy advisory body for the Supreme Leader. Its members serve five-year terms. Longtime regime stalwart Ayatollah Ali Akbar Hashemi-Rafsanjani was reappointed as its chairman in February 2007 and served in that position until his January 2017 death. In August 2017, the Supreme Leader named a new, expanded (from 42 to 45 members) Council, with former judiciary head Ayatollah Mahmoud Hashemi Shahroudi as chairman. Shahroudi passed away in December 2018 and Sadeq Larijani, who was then head of the judiciary, was appointed by the Supreme Leader as his replacement. President Hassan Rouhani and Majles Speaker Ali Larijani were not reappointed as Council members but attend the body's sessions in their official capacities. The council includes former president Ahmadinejad. Domestic Security Organs The leaders and senior officials of a variety of overlapping domestic security organizations form a parallel power structure that is largely under the direct control of the Supreme Leader in his capacity as Commander-in-Chief of the Armed Forces. State Department and other human reports on Iran repeatedly assert that internal security personnel are not held accountable for human rights abuses. The domestic security organs include the following: The Islamic Revolutionary Guard Corps (IRGC). The IRGC's domestic security role is generally implemented through the IRGC-led volunteer militia force called the Basij . The Basij is widely accused of arresting women who violate the regime's public dress codes and raiding Western-style parties in which alcohol, which is illegal in Iran, might be served. However, IRGC bases are often located in urban areas, giving the IRGC a capability to quickly intervene to suppress large antigovernment demonstrations. Law Enforcement Forces. This body is an amalgam of regular police, gendarmerie, and riot police that serve throughout the country. It is the regime's first "line of defense" in suppressing antiregime demonstrations or other unrest. Ministry of Interior. The ministry exercises civilian supervision of Iran's police and domestic security forces. The IRGC and Basij are generally outside ministry control. Ministry of Intelligence and Security (MOIS). Headed by Mahmoud Alavi, the MOIS conducts domestic surveillance to identify regime opponents and try to penetrate antiregime cells. The Ministry works closely with the IRGC and Basij . Several of these organizations and their senior leaders or commanders are sanctioned by the United States for human rights abuses and other violations of U.S. Executive Orders. Elected Institutions/Recent Elections Several major institutional positions are directly elected by the population, but international observers question the credibility of Iran's elections because of the role of the COG in vetting candidates and limiting the number and ideological diversity of the candidate field. Women can vote and run for most offices, and some women serve as mayors, but the COG interprets the Iranian constitution as prohibiting women from running for the office of president. Candidates for all offices must receive more than 50% of the vote, otherwise a runoff is held several weeks later. Another criticism of the political process in Iran is the relative absence of political parties; establishing a party requires the permission of the Interior Ministry under Article 10 of Iran's constitution. The standards to obtain approval are high: to date, numerous parties have filed for permission since the regime was founded, but only those considered loyal to the regime have been granted license to operate. Some have been licensed and then banned after their leaders opposed regime policies, such as the Islamic Iran Participation Front and Organization of Mojahedin of the Islamic Revolution, discussed in the text box below. The Presidency The main directly elected institution is the presidency, which is formally and in practice subordinate to the Supreme Leader. Virtually every successive president has tried but failed to expand his authority relative to the Supreme Leader. Presidential authority, particularly on matters of national security, is also often circumscribed by key clerics and the generally hardline military and security organization called the Islamic Revolutionary Guard Corps (IRGC). But, the presidency is often the most influential economic policymaking position, as well as a source of patronage. The president appoints and supervises the cabinet, develops the budgets of cabinet departments, and imposes and collects taxes on corporations and other bodies. The presidency also runs oversight bodies such as the Anticorruption Headquarters and the General Inspection Organization, to which government officials are required to submit annual financial disclosures. Prior to 1989, Iran had both an elected president and a prime minister selected by the elected Majles (parliament). However, the holders of the two positions were constantly in institutional conflict and a 1989 constitutional revision eliminated the prime ministership. Because Iran's presidents have sometimes asserted the powers of their institution against the office of the Supreme Leader itself, since October 2011, Khamene'i has periodically raised the possibility of eventually eliminating the post of president and restoring the post of prime minister . The Majles Iran's Majles , or parliament, is a 290-seat, all-elected, unicameral body. There are five "reserved seats" for "recognized" minority communities—Jews, Zoroastrians, and Christians (three seats of the five). The Majles votes on each nominee to a cabinet post, and drafts and acts on legislation. Among its main duties is to consider and enact a proposed national budget (which runs from March 21 to March 20 each year, coinciding with Nowruz). It legislates on domestic economic and social issues, and tends to defer to executive and security institutions on defense and foreign policy issues. It is constitutionally required to ratify major international agreements, and it ratified the JCPOA in October 2015. The ratification was affirmed by the COG. Women regularly run and some generally are elected; there is no "quota" for the number of women. Majles elections occur one year prior to the presidential elections; the latest were held on February 26, 2016. The Assembly of Experts A major but little publicized elected institution is the 88-seat Assembly of Experts. Akin to a standing electoral college, it is empowered to choose a new Supreme Leader upon the death of the incumbent, and it formally "oversees" the work of the Supreme Leader. The Assembly can replace him if necessary, although invoking that power would, in practice, most likely occur in the event of a severe health crisis. The Assembly is also empowered to amend the constitution. It generally meets two times a year. Elections to the Assembly are held every 8-10 years, conducted on a provincial basis. Assembly candidates must be able to interpret Islamic law. In March 2011, the aging compromise candidate Ayatollah Mohammad Reza Mahdavi-Kani was named chairman, but he died in 2014. His successor, Ayatollah Mohammad Yazdi, lost his seat in the Assembly of Experts election on February 26, 2016 (held concurrently with the Majles elections), and COG Chairman Ayatollah Ahmad Jannati was appointed concurrently as the Assembly chairman in May 2016. Recent Elections Following the presidency regime stalwart Ali Akbar Hashemi-Rafsanjani during 1989-1997, a reformist, Mohammad Khatemi, won landslide victories in 1997 and 2001. However, hardliners marginalized him by the end of his term in 2005. Aided by widespread voiding of reformist candidacies by the COG, conservatives won a slim majority of the 290 Majles seats in the February 20, 2004, elections. In June 2005, the COG allowed eight candidates to compete (out of the 1,014 persons who filed), including Rafsanjani, Ali Larijani, IRGC stalwart Mohammad Baqer Qalibaf, and Tehran mayor Mahmoud Ahmadinejad. With reported tacit backing from Khamene'i, Ahmadinejad advanced to a runoff against Rafsanjani and then won by a 62% to 36% vote. Splits later erupted among hardliners, and pro-Ahmadinejad and pro-Khamene'i candidates competed against each other in the March 2008 Majles elections. Disputed 2009 Election . Reformists sought to unseat Ahmadinejad in the June 12, 2009, presidential election by rallying to Mir Hossein Musavi, who served as prime minister during the 1980-1988 Iran-Iraq War and, to a lesser extent, former Majles speaker Mehdi Karrubi. Musavi's generally young, urban supporters used social media to organize large rallies in Tehran, but pro-Ahmadinejad rallies were large as well. Turnout was about 85%. The Interior Ministry pronounced Ahmadinejad the winner (63% of the vote) only two hours after the polls closed. Supporters of Musavi, who received the second-highest total (about 35% of the vote) immediately protested the results as fraudulent because of the hasty announcement of the results—but some outside analysts said the results tracked preelection polls. Large antigovernment demonstrations occurred June 13-19, 2009. Security forces killed over 100 protesters (opposition figure—Iran government figure was 27), including a 19-year-old woman, Neda Soltani, who became an icon of the uprising. The opposition congealed into the "Green Movement of Hope and Change." Some protests in December 2009 overwhelmed regime security forces in some parts of Tehran, but the movement's activity declined after the regime successfully suppressed its demonstration on the February 11, 2010, anniversary of the founding of the Islamic Republic. As unrest ebbed, Ahmadinejad promoted his loyalists and a nationalist version of Islam that limits clerical authority, bringing him into conflict with Supreme Leader Khamene'i. Amid that rift, in the March 2012 Majles elections, candidates supported by Khamene'i won 75% of the seats, weakening Ahmadinejad. Since leaving office in 2013, and despite being appointed by Khamene'i to the Expediency Council, Ahmadinejad has emerged as a regime critic. His following appears to be limited, and he has faced prosecutions of alleged corruption, meanwhile returning to his prior work as a professor of civil engineering. June 2013 Election of Rouhani In the June 14, 2013, presidential elections, held concurrently with municipal elections, the major candidates included the following: Several hardliners that included Qalibaf (see above); Khamene'i foreign policy advisor Velayati; and then-chief nuclear negotiator Seyed Jalilli. Former chief nuclear negotiator Hassan Rouhani, a moderate and Rafsanjani ally. The COG denial of Rafsanjani's candidacy, which shocked many Iranians because of Rafsanjani's prominent place in the regime, as well as the candidacy of an Ahmadinejad ally. Green Movement supporters, who were first expected to boycott the vote, mobilized behind Rouhani after regime officials stressed that they were committed to a fair election. The vote produced a 70% turnout and a first-round victory for Rouhani, garnering about 50.7% of the 36 million votes cast. Hardliners generally garnered control of municipal councils in the major cities. Most prominent in Rouhani's first term cabinet were Foreign Minister: Mohammad Javad Zarif, a former Ambassador to the United Nations in New York, who was assigned to serve concurrently as chief nuclear negotiator (a post traditionally held by the chairman of the Supreme National Security Council). In September 2013, Rouhani appointed senior IRGC leader and former Defense Minister Ali Shamkhani, who generally espouses more moderate views than his IRGC peers, to head that body. Oil Minister: Bijan Zanganeh, who served in the same post during the Khatemi presidency and attracted significant foreign investment to the sector. He replaced Rostam Qasemi, who was associated with the corporate arm of the IRGC. Defense Minister: Hosein Dehgan. An IRGC stalwart, he was an early organizer of the IRGC's Lebanon contingent that evolved into the IRGC-Qods Force. He also was IRGC Air Force commander and deputy Defense Minister. Justice Minister: Mostafa Pour-Mohammadi. As deputy intelligence minister in late 1980s, he was reportedly a decisionmaker in the 1988 mass executions of Iranian prisoners. He was interior minister under Ahmadinejad. In the 115 th Congress, H.Res. 188 would have condemned Iran for the massacre. Majles and Assembly of Experts Elections in 2016 On February 26, 2016, Iran held concurrent elections for the Majles and for the Assembly of Experts. A runoff round for 68 Majles seats was held on April 29. For the Majles, 6,200 candidates were approved, including 586 female candidates. Oversight bodies invalidated the candidacies of about 6,000, including all but 100 reformists. Still, pro-Rouhani candidates won 140 seats, close to a majority, and the number of hardliners in the body was reduced significantly. Independents, whose alignments vary by issue, hold about 50 seats. Seventeen women were elected—the largest number since the revolution. The body reelected Ali Larijani as Speaker. For the Assembly of Experts election, 161 candidates were approved out of 800 who applied to run. Reformists and pro-Rouhani candidates defeated two prominent hardliners—the incumbent Assembly Chairman Mohammad Yazdi and Ayatollah Mohammad Taqi Mesbah-Yazdi. COG head Ayatollah Jannati retained his seat, but came in last for the 30 seats elected from Tehran Province. He was subsequently named chairman of the body. Presidential Election on May 19, 2017 In the latest presidential election on May 19, 2017, Rouhani won a first-round victory with about 57% of the vote. He defeated a major figure, Hojjat ol-Eslam Ibrahim Raisi—a close ally of Khamene'i. Even though other major hardliners had dropped out of the race to improve Raisi's chances, Raisi received only about 38% of the vote. Municipal elections were held concurrently. After vetting by local committees established by the Majles , about 260,000 candidates competed for about 127,000 seats nationwide. More than 6% of the candidates were women. The alliance of reformists and moderate-conservatives won control of the municipal councils of Iran's largest cities, including all 21 seats on the Tehran municipal council. The term of the existing councils expired in September 2017 and a reformist official, Mohammad Ali Najafi, replaced Qalibaf as Tehran mayor. However, Najafi resigned in March 2018 after criticism from hardliners for his viewing of a dance performance by young girls during a celebration of a national holiday. The current mayor, selected in November 2018, is Pirouz Hanachi. Second-Term Cabinet Rouhani was sworn into a second term in early August 2017. His second-term cabinet nominations retained most of the same officials in key posts, including Foreign Minister Zarif. Since the Trump Administration withdrew from the JCPOA in May 2018, hardliners have threatened to try to impeach Zarif for his role in negotiating that accord. In late February 2019, after being excluded from a leadership meeting with visiting President Bashar Al Asad of Syria, Zarif announced his resignation over the social media application Instagram. Rouhani did not accept the resignation and Zarif resumed his duties. Key changes to the second-term cabinet include the following: Minister of Justice Seyed Alireza Avayee replaced Pour-Mohammadi. Formerly a state prosecutor, Avayee oversaw trials of protesters in the 2009 uprising and is subject to EU travel ban and asset freeze. Defense Minister Amir Hatami, a regular military officer, became the first non-IRGC Defense Minister in more than 20 years and the first regular military officer in that position. The cabinet has two women vice presidents, and one other woman as a member of the cabinet (but not heading any ministry). Periodic Unrest Challenges Regime7 In December 2017, significant unrest erupted in more than 80 cities, mostly over economic conditions, although demonstrations were smaller than the 2009-2010 protests. Protests initially cited economic concerns—the high prices of staple foods—but quickly evolved to expressions of opposition to Iran's leadership and the expenditure of resources on interventions throughout the Middle East. Some protesters were motivated by Rouhani's 2018-2019 budget proposals to increase funds for cleric-run businesses (" bonyads ") and the IRGC, while cutting subsidies. Rouhani sought to defuse the unrest by acknowledging the right to protest and the legitimacy of some demonstrator grievances. Khamene'i at first attributed the unrest to covert action by Iran's foreign adversaries, particularly the United States, but he later acknowledged unspecified "problems" in the administration of justice. Security officers used force against protester violence in some cities, but experts say they generally exercised restraint. The government also temporarily shut down access to the social media site Instagram and a widely used messaging system called "Telegram." Iranian official media reported that 25 were killed and nearly 4,000 were arrested during that period of unrest. Since February 2018, some women have continued protesting the strict public dress code, and some have been detained. Small protests and other acts of defiance have continued since, including significant unrest in the Tehran bazaar in July 2018 in the context of shortages of some goods and shop closures due to the inability to price their goods for profit. Since September 2018, workers in various industries, including trucking and teaching, have conducted strikes to demand higher wages to help cope with rising prices. Rounds of nationwide teachers' strikes began in mid-February 2019. In mid-2018, possibly to try to divert blame for Iran's economic situation, the regime established special "anticorruption courts" that have, in some cases, imposed the death penalty on businessmen accused of taking advantage of reimposed sanctions for personal profit. Iran also has used military action against armed factions that are based or have support outside Iran. In early 2019, protests have taken place in southwestern Iran in response to the government's missteps in dealing with the effects of significant flooding in that area. The regime has tasked the leadership of the relief efforts to the IRGC and IRGC-QF, working with Iraqi Shia militias who are powerful on the Iraqi side of the border where the floods have taken place. President Trump and other senior officials have supported protests by warning the regime against using force and vowing to hold officials responsible for harming protestors. The Administration also has requested U.N. Security Council meetings to consider Iran's crackdown on the unrest, although no formal U.N. action was taken. The Administration also imposed U.S. sanctions on identified regime officials and institutions responsible for abuses against protestors, including then-judiciary chief Sadeq Larijani, representing the highest-level Iranian official sanctioned by the United States to date. In the 115 th Congress, several resolutions supported the protestors, including H.Res. 676 (passed House January 9, 2018), S.Res. 367 , H.Res. 675 , and S.Res. 368 . Human Rights Practices10 U.S. State Department reports, including the Iran Action Group's September 2018 "Outlaw Regime" document, and reports from a U.N. Special Rapporteur, have long cited Iran for a wide range of abuses—aside from its suppression of political opposition—including escalating use of capital punishment, executions of minors, denial of fair public trial, harsh and life-threatening conditions in prison, and unlawful detention and torture. In a speech on Iran on July 22, 2018, Secretary of State Pompeo recited a litany of U.S. accusations of Iranian human rights abuses, and stated "America is unafraid to expose human rights violations and support those who are being silenced." State Department and U.N. Special Rapporteur reports have noted that the 2013 revisions to the Islamic Penal Code a nd the 2015 revisions to the Criminal Procedure Code made some reforms, including eliminating death sentences for children convicted of drug-related offenses and protecting the rights of the accused. A "Citizen's Rights Charter," issued December 19, 2016, at least nominally protects free expression and is intended to raise public awareness of citizen rights. It also purportedly commits the government to implement the Charter's 120 articles. In August 2017, Rouhani appointed a woman, former vice president Shahindokht Molaverdi, to oversee implementation of the Charter. The State Department's human rights report for 2018 says that key Charter protections for individual rights of freedom to communicate and access information have not been implemented. A U.N. Special Rapporteur on Iran human rights was reestablished in March 2011 by the U.N. Human Rights Council (22 to 7 vote), resuming work done by a Special Rapporteur on Iran human rights during 1988-2002. The Rapporteur appointed in 2016, Asma Jahangir, issued two Iran reports, the latest of which was dated August 14, 2017 (A/72/322), before passing away in February 2018. The special rapporteur mandate was extended on March 24, 2018 and British-Pakistani lawyer Javaid Rehman was appointed in July 2018. The U.N. General Assembly has insisted that Iran cooperate by allowing the Special Rapporteur to visit Iran, but Iran has instead only responded to Special Rapporteur inquiries through agreed "special procedures." Despite the criticism of its human rights record, on April 29, 2010, Iran acceded to the U.N. Commission on the Status of Women. It also sits on the boards of the U.N. Development Program (UNDP) and UNICEF. Iran's U.N. dues are about $9 million per year. Iran has an official body, the High Council for Human Rights, headed by former Foreign Minister Mohammad Javad Larijani (brother of the Majles speaker and the judiciary head). It generally defends the government's actions to outside bodies rather than oversees the government's human rights practices, but Larijani, according to the Special Rapporteur, has questioned the effectiveness of drug-related executions and other government policies. As part of its efforts to try to compel Iran to improve its human rights practices, the United States has imposed sanctions on Iranian officials alleged to have committed human rights abuses, and on firms that help Iranian authorities censor or monitor the internet. Human rights-related sanctions are analyzed in significant detail in CRS Report RS20871, Iran Sanctions , by Kenneth Katzman. U.S.-Iran Relations, U.S. Policy, and Options The February 11, 1979, fall of the Shah of Iran, who was a key U.S. ally, shattered U.S.-Iran relations. The Carter Administration's efforts to build a relationship with the new regime in Iran ended after the November 4, 1979, takeover of the U.S. Embassy in Tehran by radical pro-Khomeini "Students in the Line of the Imam." The 66 U.S. diplomats there were held hostage for 444 days, and released pursuant to the January 20, 1981 "Algiers Accords." Their release was completed minutes after President Reagan's inauguration on January 20, 1981. The United States broke relations with Iran on April 7, 1980, two weeks prior to a failed U.S. military attempt to rescue the hostages. Iran has since then pursued policies that successive Administrations considered inimical to U.S. interests in the Near East region and beyond. Iran's authoritarian political system and human rights abuses have contributed to, but have not necessarily been central to, the U.S.-Iran rift, although some observers assert that Iran's behavior flows directly from the nature of its regime. Iran has an interest section in Washington, DC, under the auspices of the Embassy of Pakistan, and staffed by Iranian Americans. The former Iranian Embassy closed in April 1980 when the two countries broke diplomatic relations, and remains under the control of the State Department. Iran's Mission to the United Nations in New York runs most of Iran's diplomacy inside the United States. The U.S. interests section in Tehran, under the auspices of the Embassy of Switzerland, has no American personnel. The following sections analyze some key hallmarks of past U.S. policies toward Iran. Reagan Administration: Iran Identified as Terrorism State Sponsor The Reagan Administration designated Iran a "state sponsor of terrorism" in January 1984—a designation established by the Export Administration Act of 1979—largely in response to Iran's backing for the October 1983 bombing of the Marine Barracks in Beirut. The Administration also "tilted" toward Iraq in the 1980-1988 Iran-Iraq War. During 1987-1988, U.S. naval forces fought several skirmishes with Iranian naval elements while protecting oil shipments transiting the Persian Gulf from Iranian mines and other attacks. On April 18, 1988, Iran lost one-quarter of its larger naval ships in an engagement with the U.S. Navy, including a frigate sunk. However, the Administration contradicted its efforts to favor Iraq's war effort by providing arms to Iran ("TOW" antitank weapons and I-Hawk air defense batteries) in exchange for Iran's help in the releasing of U.S. hostages held in Lebanon. On July 3, 1988, U.S. forces in the Gulf mistakenly shot down Iran Air Flight 655 over the Gulf, killing all 290 on board, contributing to Iran's decision to accept a cease-fire in the war with Iraq in August 1988. George H. W. Bush Administration: "Goodwill Begets Goodwill" In his January 1989 inauguration speech, President George H.W. Bush, in stating that "goodwill begets goodwill" with respect to Iran, implied that U.S.-Iran relations could improve if Iran helped obtain the release of U.S. hostages held by Hezbollah in Lebanon. Iran's apparent assistance led to the release of all remaining U.S. hostages there by the end of December 1991. However, no U.S.-Iran thaw followed, possibly because Iran continued to back violent groups opposed to the U.S. push for Arab-Israeli peace that followed the 1991 U.S. liberation of Kuwait. Clinton Administration: "Dual Containment" The Clinton Administration articulated a strategy of "dual containment" of Iran and Iraq—an attempt to keep both countries simultaneously weak rather than alternately tilting to one or the other. In 1995-1996, the Administration and Congress banned U.S. trade and investment with Iran and imposed penalties on foreign investment in Iran's energy sector, in response to Iran's support for terrorist groups seeking to undermine the Israeli-Palestinian peace process. The election of the moderate Mohammad Khatemi as president in May 1997 precipitated a U.S. offer of direct dialogue, but Khatemi did not accept the offer. In June 1998, then-Secretary of State Madeleine Albright called for mutual confidence building measures that could lead to a "road map" for normalization. In a March 17, 2000, speech, the Secretary admitted past U.S. interference in Iran. George W. Bush Administration: Iran Part of "Axis of Evil" In his January 2002 State of the Union message, President Bush named Iran as part of an "axis of evil" including Iraq and North Korea. However, the Administration enlisted Iran's diplomatic help in efforts to try to stabilize post-Taliban Afghanistan and post-Saddam Iraq. The Administration rebuffed a reported May 2003 Iranian overture transmitted by the Swiss Ambassador to Iran for an agreement on all major issues of mutual concern ("grand bargain" proposal). State Department officials disputed that the proposal was fully vetted within Iran's leadership. The Administration aided victims of the December 2003 earthquake in Bam, Iran, including through U.S. military deliveries into Iran. As Iran's nuclear program advanced, the Administration worked with several European countries to persuade Iran to agree to limit its nuclear program. President Bush's January 20, 2005, second inaugural address and his January 31, 2006, State of the Union message stated that the United States would be a close ally of a "free and democratic" Iran—appearing to support regime change. Obama Administration: Pressure, Engagement, and the JCPOA President Obama asserted that there was an opportunity to persuade Iran to limit its nuclear program through diplomacy and to potentially rebuild a U.S.-Iran relationship after decades of mutual animosity. The approach emerged in President Obama's first message to the Iranian people on the occasion of Nowruz (Persian New Year, March 21, 2009), in which he stated that the United States "is now committed to diplomacy that addresses the full range of issues before us, and to pursuing constructive ties among the United States, Iran, and the international community." He referred to Iran as "The Islamic Republic of Iran," appearing to reject a policy of regime change. The Administration reportedly also loosened restrictions on U.S. diplomats' meeting with their Iranian counterparts at international meetings. In a speech to the "Muslim World" in Cairo on June 4, 2009, President Obama acknowledged that the United States had played a role in the overthrow of Mossadeq and said that Iran had a right to peaceful nuclear power. In addition, President Obama exchanged several letters with Supreme Leader Khamene'i, reportedly expressing the Administration's support for engagement with Iran. In 2009, Iran's crackdown on the Green Movement uprising and its refusal to accept compromises to limit its nuclear program caused the Obama Administration to shift to a "two track" strategy: stronger economic pressure coupled with offers of negotiations that could produce sanctions relief. The sanctions imposed during 2010-2013 received broad international cooperation and caused economic difficulty in Iran, but the Administration also altered U.S. regulations to help Iranians circumvent their government's restrictions on internet usage. In early 2013, the Administration began direct but unpublicized talks with Iranian officials in the Sultanate of Oman to probe Iran's willingness to reach a comprehensive nuclear accord. The Administration also repeatedly stated that a military option is "on the table." The election of Rouhani in June 2013 contributed to a U.S. shift to emphasizing diplomacy. President Obama, in his September 24, 2013 U.N. General Assembly speech, confirmed an exchange of letters with Rouhani stating U.S. willingness to resolve the nuclear issue peacefully and that the United States "[is] not seeking regime change." The two presidents spoke by phone on September 27, 2013—the first direct U.S.-Iran presidential contact since Iran's revolution. After the JCPOA was finalized in July 2015, the United States and Iran held bilateral meetings at the margins of all nuclear talks and in other settings, covering regional and bilateral issues. President Obama expressed hope that the JCPOA would "usher[] in a new era in U.S.-Iranian relations," while at the same time asserting that the JCPOA would benefit U.S. national security even without a broader rapprochement. President Obama met Foreign Minister Zarif at the September 2015 General Assembly session, but no contact was reported during the September 2016 U.N. General Assembly session. Still, the signs that U.S.-Iran relations could improve as a result of the JCPOA were mixed, including as discussed below. Coinciding with Implementation Day of the JCPOA (January 16, 2016), the dual citizens held by Iran at that time were released and a long-standing Iranian claim for funds paid for undelivered military equipment from the Shah's era was settled—resulting in $1.7 billion in cash payments (euros, Swiss francs, and other non-U.S. hard currencies) to Iran—$400 million for the original DOD monies and $1.3 billion for an arbitrated amount of interest. Administration officials asserted that the nuclear diplomacy provided an opportunity to resolve these outstanding issues, but some Members of Congress criticized the simultaneity of the financial settlement as paying "ransom" to Iran. Obama Administration officials asserted that it had long been assumed that the United States would need to return monies to Iran for the undelivered military equipment and that the amount of interest agreed was likely less than what Iran might have been awarded by the U.S.-Iran Claims Tribunal. Iran subsequently jailed several other dual nationals (see box below). Iran continued to provide support to allies and proxies in the region, and it continued "high speed intercepts" of U.S. warships in the Persian Gulf. Iran conducted at least four ballistic missile tests from the time the JCPOA was finalized in 2015 until the end of the Obama Administration, which termed the tests "defiant of" or "inconsistent with" Resolution 2231. The tests prompted additional U.S. designations for sanctions of entities that support Iran's program. Iranian officials argued that new U.S. visa requirements in the FY2016 Consolidated Appropriations Act ( P.L. 114-113 ) would cause European businessmen to hesitate to travel to Iran and thereby limit Iran's economic reintegration. Then-Secretary of State Kerry wrote to Foreign Minister Zarif on December 19, 2015, that the United States would implement the provision so as to avoid interfering with "legitimate business interests of Iran." In January 2016, Kerry worked with Zarif to achieve the rapid release of 10 U.S. Navy personnel who the IRGC took into custody when their two riverine crafts strayed into what Iran considers its territorial waters. There was no expansion of diplomatic representation such as the posting of U.S. nationals to staff the U.S. interests section in Tehran, nor did then-Secretary of State Kerry visit Iran. In 2014, Iran appointed one of those involved in the 1979 seizure of the U.S. embassy in Tehran—Hamid Aboutalebi—as ambassador to the United Nations. But, in April 2014, Congress passed S. 2195 ( P.L. 113-100 ), which gave the Administration authority to deny him a visa to take up his duties. The United States subsequently announced he would not be admitted. Iran replaced him with Gholam Ali Khoshroo, who studied in the United States and served in Khatemi's government. In May 2015, the two governments granted each other permission to move their respective interests sections to more spacious locations. Khoshroo was replaced in April 2019 by Majid Takht Ravanchi. Trump Administration: Return to Hostility and "Maximum Pressure" The Trump Administration has shifted policy back to the pre-JCPOA stance, asserting that the JCPOA addressed only nuclear issues and hindered the U.S. ability to roll back Iran's "malign" regional activities or reduce its military and missile capabilities. Administration officials assert that Administration policy is to pressure Iran's economy to (1) compel it to renegotiate the JCPOA to address the broad range of U.S. concerns and (2) deny Iran the revenue to continue to develop its strategic capabilities or intervene throughout the region. Administration statements of opposition to how Iran is governed suggest that an element of the policy is to create enough economic difficulties to stoke unrest in Iran, possibly to the point where the regime collapses. The policy, and elements of it, have been articulated as follows: Citing Iran's arming of the Houthis in Yemen, on February 1, 2017, then-National Security Adviser Michael Flynn stated that Iran was "officially on notice" about its provocative behavior. In April 2017, the Administration announced a six-month Iran policy review based on the premise that the JCPOA "only delays [Iran's] goal of becoming a nuclear state" and had failed to curb Iran's objectionable regional behavior. During his May 20-24, 2017, visit to the region, President Trump told Arab leaders in Saudi Arabia that "Until the Iranian regime is willing to be a partner for peace, all nations of conscience must work together to isolate Iran, deny it funding for terrorism, and pray for the day when the Iranian people have the just and righteous government they deserve." The following month, then-Secretary of State Tillerson testified that the Administration would work to support elements in Iran that would lead to a "peaceful transition" of Iran's government. On October 13, 2017, President Trump, citing the results of the policy review, stated that he would not certify Iranian JCPOA compliance (under the Iran Nuclear Agreement Review Act, INARA, P.L. 114-17 ), and that the United States would only stay in the accord if Congress and U.S. allies (1) address the expiration of JCPOA nuclear restrictions, (2) curb Iran's ballistic missile program, and (3) counter Iran's regional activities. The denial of certification under INARA triggered a 60-day period for Congress to take legislative action under expedited procedures to reimpose those sanctions that were lifted. Congress did not take such action. On January 12, 2018, the President announced that he would not continue to waive Iran sanctions at the next expiration deadline (May 12) unless the JCPOA's weaknesses were addressed by Congress and the European countries. Withdrawal from the JCPOA and Subsequent Pressure Efforts On May 8, 2018, following visits to the United States by the leaders of France and Germany imploring the United States to remain in the JCPOA, President Trump announced that the United States would withdraw from the JCPOA and reimpose all U.S. secondary sanctions, with full effect as of November 5, 2018. Statements by President Trump and Secretary of State Pompeo have since articulated U.S. policy as follows: On May 21, 2018, in his first speech as Secretary of State, Michael Pompeo announced a return to a U.S. strategy of pressuring Iran through sanctions and by working with allies against Iran's regional activities and proxies, as well as against its ballistic missile program, cyberattacks, and human rights abuses. He also expressed U.S. "solidarity" with the Iranian people. On July 22, 2018, in a speech to Iranian Americans at the Reagan Library in California, Secretary Pompeo recited a litany of Iranian human rights abuses, official corruption, and efforts to destabilize the region. The Secretary stated that "I have a message for the people of Iran. The United States hears you; the United States supports you; the United States is with you." On July 23, 2018, following threats by Rouhani and other Iranian leaders to cut off the flow of oil through the Persian Gulf if Iran's oil exports are prevented by sanctions, President Trump posted the following on Twitter: "To Iranian President Rouhani: NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE. WE ARE NO LONGER A COUNTRY THAT WILL STAND FOR YOUR DEMENTED WORDS OF VIOLENCE & DEATH. BE CAUTIOUS!" The tweet suggested to some that the United States might be intent on military action against Iran. On August 16, 2018, Secretary Pompeo announced the creation of an "Iran Action Group" at the State Department responsible for coordinating the department's Iran-related activities. The group is headed by Brian Hook, who holds the title of "Special Representative for Iran." In late September 2018, the group issued its "Outlaw Regime" report on Iran, in which Secretary of State Pompeo wrote in a preface that "The policy President Trump has laid out comes to terms fully with fact that the Islamic Republic of Iran is not a normal state ... " On October 3, 2018, the Administration abrogated the 1955 U.S.-Iran "Treaty of Amity, Economic Relations, and Consular Rights." Iran's legal representatives had cited the treaty to earn a favorable October 2 judgment from the International Court of Justice demanding that the United States reverse some humanitarian-related sanctions on Iran. The treaty, which provides for freedom of commerce between the two countries and unfettered diplomatic exchange, has long been mooted by post-1979 developments in U.S.-Iran relations. The abrogation of the treaty did not affect the status of the interests sections in each others' countries. Illustrating the extent to which the Administration wants U.S. partners to adopt U.S. policy toward Iran, the Administration organized a ministerial meeting in Warsaw, Poland, during February 13-14, 2019, focused on Middle East issues and with particular focus on countering the threat posed by Iran. For further information, see CRS In Focus IF11132, Coalition-Building Against Iran , by Kenneth Katzman On April 8, 2019, the Administration designated the IRGC as a foreign terrorist organization (FTO), blaming it for involvement in multiple past acts of Iran-backed terrorism and anti-U.S. actions. For further information, see CRS Insight IN11093, Iran's Revolutionary Guard Named a Terrorist Organization , by Kenneth Katzman. On April 22, 2019, the Administration announced it would no longer provide exceptions to countries that pledged to reduce their purchases of Iranian oil under the FY2012 National Defense Authorization Act ( P.L. 112-81 ). For further information, see CRS Insight IN11108, Iran Oil Sanctions Exceptions Ended , by Kenneth Katzman. As of May 3, 2019, U.S.-Iran tensions escalated following intelligence reports that Iran and/or its allies and proxies might be preparing to attack U.S. forces or personnel in the region, and the United States deployed additional forces to the Gulf to deter such action. As tensions escalated, U.S. officials issued a variety of statements. For example, on May 20, 2019, President Trump posted the following on Twitter: "If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again!" Yet, as May ended, President Trump and his senior aides and Cabinet officers all indicated that the United States did not seek war with Iran, did not seek to change Iran's regime, and welcomed talks to ease tensions and renegotiate a JCPOA. Policy Elements and Options As have its predecessors, the Trump Administration has not publicly taken any policy option "off the table." Some options, such as sanctions, are being emphasized, while others are being considered or threatened to varying degrees. Engagement and Improved Bilateral Relations Successive Administrations have debated the degree to which to pursue engagement with Iran, and U.S. efforts to engage Iran sometimes have not coincided with Iranian leadership willingness to engage the United States. President Trump has publicly welcomed engagement with Iran's President Rouhani, but Administration officials have set strict conditions for any significant improvement in U.S.-Iran relations. Secretary of State Pompeo, in his May 21, 2018, speech referenced above, stipulated a list of 12 behavior changes by Iran that would be required for a normalization of U.S.-Iran relations and to be included in a revised JCPOA. Many of the demands—such as ending support for Lebanese Hezbollah—would strike at the core of Iran's revolution and are unlikely to be met by Iran under any circumstances. At a July 30, 2018, press conference, President Trump stated he would be willing to meet President Rouhani without conditions, presumably during the September 2018 General Assembly meetings in New York. Rouhani indicated that the U.S-Iran relationship was not conducive to such a meeting, and President Trump later stated he would not meet with Rouhani during the General Assembly meetings, even though President Rouhani is probably "an absolutely lovely man." In December 2018, President Rouhani stated that the United States directly requested negotiations with Iran on eight occasions in 2017, and "indirectly" requested negotiations on three occasions in 2018. He said that Iran rebuffed these overtures. Following the U.S. designation of the IRGC as an FTO and the denial of further sanctions exceptions for the purchases of Iranian oil, Foreign Minister Zarif appeared to raise the possibility for some U.S.-Iran talks on selected issues. At an April 24, 2019 research institute public meeting in New York, Zarif offered to negotiate an exchange of Iranians held in U.S. jails for some or all of the U.S.-Iran nationals held by Iran (see box above). In the context of escalating U.S.-Iran tensions in May 2019, President Trump apparently sought to de-escalate by restating his interest in direct talks, stating the following on May 9, 2019: What they [Iranian leaders] should be doing is calling me up, sitting down; we can make a deal, a fair deal ... but they should call, and if they do, we're open to talk to them. In late May 2019, in the course of an official visit to Japan, President Trump said he would support Japanese Prime Minister Shinzo Abe's efforts to act as a mediator between the United States and Iran. Concurrently, Secretary Pompeo and other U.S. officials were in contact with leaders of Oman, Qatar, and Switzerland, apparently in an effort to explore the potential for talks with Iran. Possibly in connection, foreign ministers and other high-ranking diplomats from Iran and Oman, Qatar, and Kuwait exchanged visits. Military Action Successive Administrations have sought to back up other policy options with a capability to use military force against Iran. Prior to the JCPOA, supporters of military action against Iran's nuclear program argued that such action could set back Iran's nuclear program substantially. A U.S. ground invasion to remove Iran's regime apparently has not been considered at any time. The Obama Administration repeatedly stated that "all options are on the table" to prevent Iran from acquiring a nuclear weapon. However, the Obama Administration asserted that military action would set back Iran's nuclear advancement with far less certainty or duration than would a nuclear agreement. And Iranian retaliation could potentially escalate and expand throughout the region, reduce Iran's regional isolation, strengthen Iran's regime domestically, and raise oil prices. After the JCPOA was finalized, President Obama reiterated the availability of this option should Iran violate the agreement. Obama Administration officials articulated that U.S. military action against Iran might also be used if Iran attacked or prepared to attack U.S. allies or attempted to interrupt the free flow of oil or shipping in the Gulf or elsewhere. The Trump Administration has similarly stated that "all options are open," referring to military action. The Administration's pullout from the JCPOA was accompanied by threats to take unspecified action if Iran were to leave the accord and restart banned aspects of its nuclear program. In the context of significant U.S.-Iran tensions in May 2019 that resulted in added U.S. military deployments to the Gulf region, the Administration has reiterated threats to use force against Iran's nuclear program or if Iran were to attack U.S. forces or personnel in the region. Yet, as noted, President Trump has sought to de-escalate tensions and has told his top officials that the Administration does not want conflict with Iran. For more information on the potential for U.S. military action in the context of U.S.-Iran tensions, see CRS In Focus IF11212, U.S.-Iran Tensions Escalate , by Kenneth Katzman. Whereas the United States has not initiated military action against Iranian or Iran-backed forces in Syria, the Administration has publicly supported Israel's frequent strikes on Iranian and Hezbollah infrastructure there. And, the U.S. Navy has conducted operations to interdict Iranian weapons shipments to the Houthi rebels in Yemen. For detailed information on U.S. military activity in the region that is, in whole or in part, directed against Iran and Iranian allies, see CRS Report R44017, Iran's Foreign and Defense Policies , by Kenneth Katzman. Authorization for Force Issues With regard to presidential authorities, S.J.Res. 41 , which passed the Senate on September 22, 2012, in the 112 th Congress, rejects any U.S. policy that relies on "containment" of a potential nuclear Iran. No legislation has been enacted that would limit the President's authority to use military force against Iran, but neither has there been legislation authorizing the use of force against Iran. At a Senate Foreign Relations Committee hearing on April 10, 2019, Secretary of State Pompeo answered questions on whether the Administration considers the use of force against Iran as authorized, indicating that he would defer to Administration legal experts on that question. However, he indicated, in response to questions whether the 2001 authorization for force against Al Qaeda could apply to Iran, that Iran has harbored members of Al Qaeda. Economic Sanctions The U.S. withdrawal from the JCPOA and reimposition of all U.S. sanctions has major implications. The table below summarizes sanctions that have been used against Iran. Regime Change One recurring U.S. policy question has been whether the United States should support efforts within Iran to overthrow Iran's leadership. During the 2009 Green Movement uprising, the Obama Administration asserted that extensive U.S. support for the uprising would undermine the opposition's position in Iran. President Obama did, however, give some public support to the demonstrators, and his 2011 Nowruz (Persian New Year) address mentioned specific dissidents and said "young people of Iran ... I want you to know that I am with you." However, in a September 24, 2013, General Assembly speech, President Obama explicitly stated that the United States does not seek to change Iran's regime. The Trump Administration—in cited statements by Secretary Pompeo and other U.S. officials—asserts that its policy is to change Iran's behavior, not to change its regime. However, the content of these and other statements by Administration officials, in particular Secretary Pompeo's speech to Iranian Americans at the Reagan Library on July 22, 2018, suggests support for a regime change outcome. In his speech on May 21, 2017, in Saudi Arabia, President Trump stated that his Administration is hoping that Iran's government will change to one that the Administration considers "just and righteous." In testimony before two congressional committees in June 2017, then-Secretary of State Rex Tillerson said the Administration supports a "philosophy of regime change" for Iran (Senate Appropriations Committee) and that the Administration would "work toward support of those elements inside of Iran that would lead to a peaceful transition of that government" (House Foreign Affairs Committee). In his October 13, 2017, policy announcement on Iran, President Trump stated that we stand in total solidarity with the Iranian regime's longest-suffering victims: its own people. The citizens of Iran have paid a heavy price for the violence and extremism of their leaders. The Iranian people long to—and they just are longing, to reclaim their country's proud history, its culture, its civilization, its cooperation with its neighbors. Subsequently, President Trump issued statements of support for the December 2017-January 2018 protests in Iran on Twitter and in other formats. In his May 8, 2018, announcement of a U.S. withdrawal from the JCPOA, President Trump stated Finally, I want to deliver a message to the long-suffering people of Iran. The people of America stand with you.... But the future of Iran belongs to its people. They are the rightful heirs to a rich culture and an ancient land, and they deserve a nation that does justice to their dreams, honor to their history and glory to God. In his speech to the Heritage Foundation on May 21, 2018, Secretary of State Pompeo added that the United States expresses total solidarity with the Iranian people. In his Reagan Library speech on July 22, 2018, Pompeo recited a litany of Iranian regime human rights abuses and governmental corruption that called into question its legitimacy and, in several passages and answers to questions, clearly expressed the hope that the Iranian people will oust the current regime. The apparent support for a regime change policy was furthered by Secretary Pompeo's announcement during that speech that the Broadcasting Board of Governors is launching a new full-time Persian-language service for television, radio, digital, and social media to help "ordinary Iranians inside of Iran and around the globe can know that America stands with them." Yet, there were signs of a possible modification or shift, at least in tone, in the context of escalating U.S.-Iran tensions in May 2019 that some assessed as potentially leading to conflict. During his visit to Japan in late May, President Trump specifically ruled out a policy of regime change, stating the following on May 27: These are great people—has a chance to be a great country with the same leadership. We are not looking for regime change. I just want to make that clear. We're looking for no nuclear weapons. At times, some in Congress have advocated that the United States adopt a formal policy of overthrow of the regime. In the 111 th Congress, one bill said that it should be U.S. policy to promote the overthrow of the regime (the Iran Democratic Transition Act, S. 3008 ). Many of Iran's leaders, particularly Supreme Leader Khamene'i, continue to articulate a perception that the United States has never accepted the 1979 Islamic revolution. Khamene'i and other Iranian figures note that the United States provided funding to antiregime groups, mainly promonarchists, during the 1980s. Democracy Promotion and Internet Freedom Efforts Successive Administrations and Congresses have sought to at least lay the groundwork for eventual regime change through "democracy promotion" programs and sanctions on Iranian human rights abuses. Legislation authorizing democracy promotion in Iran was enacted in the 109 th Congress. The Iran Freedom Support Act ( P.L. 109-293 , signed September 30, 2006) authorized funds (no specific dollar amount) for Iran democracy promotion. Several laws and Executive Orders issued since 2010 are intended to promote internet freedom, and the Administration has amended U.S.-Iran trade regulations to allow for the sale to Iranians of consumer electronics and software that help them communicate. Then-Under Secretary of State Wendy Sherman testified on October 14, 2011, that some of the democracy promotion funding for Iran was used to train Iranians to use technologies that circumvent regime internet censorship. Many have argued that U.S. funding for such programs is counterproductive because the support has caused Iran to use the support as a justification to accuse the civil society activists of disloyalty. Some civil society activists have refused to participate in U.S.-funded programs, fearing arrest. The Obama Administration altered Iran democracy promotion programs somewhat toward working with Iranians inside Iran who are organized around apolitical issues such as health, education, science, and the environment. The State Department, which often uses appropriated funds to support prodemocracy programs run by organizations based in the United States and in Europe, refuses to name grantees for security reasons. The funds shown below have been obligated through DRL and the Bureau of Near Eastern Affairs in partnership with USAID. Some of the funds have also been used for cultural exchanges, public diplomacy, and broadcasting to Iran. A further indication of the sensitivity of specifying the use of the funds is that, since FY2010, funds have been provided for Iran civil society/democracy promotion as part of a broader "Near East Regional Democracy programs" (NERD). Iran asserts that funding democracy promotion represents a violation of the 1981 "Algiers Accords" that settled the Iran hostage crisis and provide for noninterference in each other's internal affairs. The George W. Bush Administration asserted that open funding of Iranian prodemocracy activists (see below) was a stated effort to change regime behavior, not to overthrow the regime, although some saw the Bush Administration's efforts as a cover to achieve a regime change objective. Broadcasting/Public Diplomacy Issues Another part of the democracy promotion effort has been the development of Iran-specific U.S. broadcasting services to Iran. Radio Farda ("tomorrow," in Farsi) began under Radio Free Europe/Radio Liberty (RFE/RL), in partnership with the Voice of America (VOA), in 2002. The service was established as a successor to a smaller Iran broadcasting effort begun with an initial $4 million from the FY1998 Commerce/State/Justice appropriation ( P.L. 105-119 ). It was to be called Radio Free Iran but was never formally given that name by RFE/RL. Based in Prague, Radio Farda broadcasts 24 hours/day, and its budget is over $11 million per year. No U.S. assistance has been provided to Iranian exile-run stations. As noted above, Secretary Pompeo has announced a new Persian-language channel for Iranians through various media, but it is not clear whether this new service will augment existing programs or form an entirely new program. VOA Persian Service. The VOA established a Persian-language service to Iran in July 2003. It consists of radio broadcasting (one hour a day of original programming); television (six hours a day of primetime programming, rebroadcast throughout a 24-hour period); and internet. The service has come been criticized by observers for losing much of its audience among young, educated, antiregime Iranians who are looking for signs of U.S. official support. The costs for the service are about $20 million per year. State Department Public Diplomacy Efforts The State Department has sought outreach to the Iranian population. In May 2003, the State Department added a Persian-language website to its list of foreign-language websites, under the authority of the Bureau of International Information Programs. The website was announced as a source of information about the United States and its policy toward Iran. In February 14, 2011, the State Department began Persian-language Twitter feeds in an effort to connect better with internet users in Iran. Since 2006, the State Department has been increasing the presence of Persian-speaking U.S. diplomats in U.S. diplomatic missions around Iran, in part to help identify and facilitate Iranian participation in U.S. democracy-promotion programs. The Iran unit at the U.S. Consulate in Dubai has been enlarged significantly into a "regional presence" office, and "Iran-watcher" positions have been added to U.S. diplomatic facilities in Baku, Azerbaijan; Istanbul, Turkey; Frankfurt, Germany; London; and Ashkabad, Turkmenistan, all of which have large expatriate Iranian populations and/or proximity to Iran.	Summary:	gov_report	1,024	null	16
crs_R45913	crs_R45913_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Legislative proposals have been introduced since the 105 th Congress to create a national electricity portfolio standard that would require electric utilities to procure a certain share of the electricity they sell from specified sources. Twenty-nine states, three U.S. territories, and the District of Columbia are currently implementing mandatory portfolio standards, and an additional eight states and one territory have voluntary versions. Various existing and proposed portfolio standards use a range of terms for similar concepts. A renewable portfolio standard (RPS) typically means a requirement to procure electricity from renewable sources. A clean energy standard (CES) typically means a variant of an RPS that includes some nonrenewable sources, such as nuclear or selected fossil fuels, in the requirement. Some lawmakers and stakeholders use these terms interchangeably, and some use the term CES or "clean energy" to refer only to renewable sources. This report uses the more general term "portfolio standard" to avoid confusion between RPS and CES. At both the federal and state level, lawmakers express multiple goals for portfolio standards. These include greenhouse gas reduction, technology innovation, and job creation. Policy design choices, as discussed in this report, can influence the extent to which portfolio standards might achieve those or other goals. Other policies could potentially achieve the same goals as portfolio standards. For example, tax incentives or funding for technology research, development, and deployment could promote the use of certain types of electricity generation sources by reducing their costs. This report does not compare portfolio standards with other policy options, nor does it fully examine the costs and benefits of establishing a national portfolio standard compared to business-as-usual trends in the electric power sector. This report provides background on portfolio standards and an overview of policy design elements to inform debate around proposals introduced in the 116 th Congress, building on previous CRS reports addressing this topic. This report also analyzes potential effects of portfolio standard design choices, with an emphasis on economic effects, environmental effects, and potential interactions with state energy policies. Other potential effects that may be of congressional interest, but are outside the scope of this report, include public health, considerations regarding critical minerals used in some energy sources, electric reliability, cybersecurity, and geopolitics. U.S. Electricity Generation Profile A number of government agencies, nongovernmental organizations, academic researchers, and private sector entities analyzed potential effects of a national portfolio standard in 2011 and 2012 because of congressional interest at that time. Since 2012, the U.S. electric power sector has seen several changes in its generation profile that were unanticipated in those analyses. These include an increase in generation from sources using natural gas and renewable energy, along with a decrease in coal-fired generation. The current U.S. electricity generation profile and market trends may be important context for any congressional debate about a potential national portfolio standard. The U.S. Energy Information Administration (EIA) reports that total electricity generation was 4,047,766 gigawatt-hours (GWh) in 2012 and 4,207,353 GWh in 2018, an increase of 4%. Most of this increase occurred between 2017 and 2018, as shown in Figure 1 . Between 2012 and 2018, the share of electricity generation from different sources has changed. Coal generated 37% of total generation in 2012 and 27% in 2018. Natural gas generated 30% of total generation in 2012 and 35% in 2018. Renewable sources, including hydropower, wind, solar, geothermal, and biomass, generated 12% of total generation in 2012 and 18% in 2018. Many expect these trends to continue. For example, EIA's projection of current laws, regulations, and market trends show coal contributing 17% of total generation in 2050, natural gas contributing 39%, and renewable sources contributing 31%. Electric power sector observers generally agree on the factors causing these trends, although the relative importance of each factor is subject to some debate. The changes from 2012 to 2018 are due to a combination of (1) continued low natural gas prices and low wholesale electricity prices; (2) federal environmental regulations, especially on coal-fired power plants; (3) declining capital costs for wind and solar sources; (4) federal tax incentives for wind and solar sources; (5) state portfolio standards and other policies; (6) changing consumer preferences, especially large corporations' and institutions' commitments to procure more electricity from renewable sources; and (7) natural turnover as generators age. Differing perspectives over the relative influence of these factors could affect stakeholder views on the merits of a federal policy to promote greater use of certain energy sources for electricity generation. Some might argue that sources that are now cost competitive (e.g., natural gas, wind) may not require policy support to increase their share of the electricity generation profile. Others may see electricity generation as solely an area for state policy as discussed further in the section " Interaction with Other State Energy Policies ," below. A related consideration may be whether increasing the pace of change in the U.S. electricity portfolio could pose reliability risks. Key Portfolio Standard Concepts Key concepts in portfolio standard policymaking may or may not have identical meaning when used in other contexts. For convenience and clarity, this section introduces key concepts used in this report. As noted above, lawmakers and observers are not consistent in their use of terms related to portfolio standards. Renewable portfolio standard (RPS) is the most frequently used term to describe a portfolio standard, though renewable energy standard, alternative energy portfolio standard, and others are in use. The term clean energy standard (CES) is frequently used to refer to a variant of RPS in which certain nonrenewable sources are eligible in addition to renewable sources, but some federal legislative proposals have used the term "clean energy" to refer only to renewable sources. The Appendix provides more information about previously introduced bills. Banking refers to the extent to which credits issued in the program may be used for compliance after their vintage year (see definition, below). Banking provisions can equivalently be described in terms of expiration. For example, if credits expire after two years, then banking for two years is allowed. A related concept is borrowing which allows credits of future vintage years to be used for compliance. Base quantity of electricity is the sales volume to which the portfolio standard applies. The base quantity could equal total electricity sales, but it need not. Excluding sources from the calculation of the base quantity changes the required amount of generation from eligible sources in absolute terms. The base quantity to which the portfolio standard applies also affects the financial incentive that different sources receive. Even sources deemed ineligible under the portfolio standard could receive some policy support if they were excluded from the base quantity of electricity. This concept is discussed further in the section " Base Quantity of Electricity ." Carve outs , tiers, multipliers, partial crediting, and usage limits are all policy options for influencing the relative support that different types of eligible sources receive under a portfolio standard. Eligible sources will be available at different costs. Policymakers may want to avoid a situation where compliance is achieved mostly through the use of a single, low-cost source. A carve out is a requirement within the overall policy requirement to achieve a minimum level of compliance by using a certain source. Carve outs have been used, for example, to require use of solar energy even when that was more expensive than other eligible sources. The same goal might be accomplished through use of tiers . Typically, a carve out will apply to a single source type while a tier might apply to multiple source types. A related concept is that of usage limits that set maximum levels for compliance from certain sources. Multipliers are rules under which selected sources receive more than the usual amount of credit for generating electricity, but the credits are completely fungible (see definition, below) with others. Sources that are eligible for multipliers would receive extra policy support, relative to other sources. Multipliers could be used, for example, to encourage demonstration and commercialization of new technologies. P artial crediting would give selected sources less than the usual amount of credit and could be applied to sources lawmakers wanted to give less policy support. Clean energy , as used in this report, refers to the set of sources that lawmakers might choose to include in a portfolio standard. These sources could include wind, solar, geothermal, biomass, hydropower, marine energy, nuclear, natural gas combined cycle generators, or fossil fuel-fired generators equipped with carbon capture and sequestration technology (herein, CCS). Lawmakers could also choose to include nongenerating sources such as energy storage or energy efficiency. Other considerations about the choice of eligible sources are discussed in the section " Source Eligibility ." Covered entities are the entities with a compliance obligation under a portfolio standard. Most portfolio standards being implemented by states or proposed at the federal level have electricity distribution utilities as the covered entities. These utilities may or may not own electricity generators, depending on state and local regulatory regimes. Typically, a utility procures electricity from a number of different generators using a variety of energy sources (its portfolio ). Other considerations about the choice of covered entities are discussed in the section " Utility Applicability ." Credits are the unit of accounting for portfolio standards and other market-based policies. Electricity cannot easily be traced from its point of generation to its point of consumption, so accounting measures are required to assess compliance with a portfolio standard. In many existing portfolio standards, credits are issued by an administrator to a generator that uses a clean energy source. The number of credits issued is based on actual measured electricity generation (i.e., ex post ). The generator can then sell credits to a utility, and the utility surrenders them to the program administrator to demonstrate compliance. If a generator sells both electricity and associated credits to the same entity, the credit is bundled . If a generator sells electricity and associated credits to different entities, the credit is unbundled . Lawmakers could allow entities other than generators and utilities (e.g., financial institutions) to buy and sell credits, or they could allow only utilities with a compliance obligation to purchase credits. The price that utilities would pay for credits would depend on the portfolio standard stringency, the overall volume of electricity generated by clean energy sources, and other market factors. The sale of credits could create an additional source of revenue for a generator, potentially improving its economic performance relative to a business-as-usual scenario with no portfolio standard. In some cases, the ability to sell credits might be the deciding factor for whether a new generator would be constructed (or, for existing generators, whether a generator would remain operational instead of being retired). In other cases, generators may be profitable without the sale of credits, and the credits might create a windfall profit. The requirement to buy credits would likely increase the overall costs for a utility. Typically, a utility's costs for complying with a portfolio standard would be passed on to its customers. If a utility were unable to fully pass on its compliance costs, it might see reduced profitability. Fungibility is the attribute of credits allowing them to be used interchangeably and without penalty. Since many state portfolio standards already exist, federal policymakers would have to decide if these state credits would be fungible with federal credits under a federal portfolio standard. If they were, then current holders of state-issued credits could use them for compliance with a federal portfolio standard or sell them to another entity for that purpose. If they were not, then state-issued credits could potentially lose value, depending on the relative stringency of a national portfolio standard and the state portfolio standard. Some states have implemented cap-and-trade programs in addition to portfolio standards, both of which aim to reduce greenhouse gas emissions from the electricity generation. Like portfolio standards, cap-and-trade uses credits (also called allowances) as an accounting mechanism and for compliance purposes. Under existing state policies and federal proposals, credits under portfolio standards are not fungible with allowances under cap-and-trade programs for greenhouse gases. Market-based policies attempt to use financial incentives to achieve policy goals. Many discussions contrast them with command-and-control policies that set specific permissions or prohibitions. Portfolio standards indirectly provide financial incentives because they create demand for generation from certain eligible sources in electricity markets, even if those eligible sources are more expensive than ineligible sources. Some observers argue this mechanism is a disruption of market forces. In comparison, tax credits, grants, and loan guarantees provide direct financial incentives for eligible sources and therefore lower the cost of those sources in the market. Most portfolio standard proposals do not expressly prohibit use of ineligible sources, but they do create a financial disincentive to use them. Monitoring, reporting, and verification (MRV) are three distinct steps that ensure that market-based policies achieve the desired goals. In the case of portfolio standards, MRV practices would measure the amount of electricity generated by eligible sources and verify that each unit of electricity from eligible sources was used only once for the purpose of compliance. Monitoring and reporting electricity generation is commonplace in the industry, at least for large-scale generators connected to the electricity transmission system. Verification for market-based policies is often completed by an independent third party. Qualifying facilities (QFs) are established in the Public Utility Regulatory Policies Act of 1978 ( P.L. 95-617 ; PURPA) as certain small power production facilities and cogeneration facilities that receive special treatment. Utilities must purchase electricity from QFs at a price determined by what the utility would otherwise have to pay for electricity. There is no direct relationship between QFs under PURPA and sources that would be eligible under a portfolio standard, though the term "qualifying source" is sometimes used in both contexts. To avoid confusion, this report refers to sources defined as clean energy under a portfolio standard as "eligible sources." Registries , sometimes called tracking systems, are electronic databases used to facilitate credit issuance and transfer. State portfolio standards typically make use of registries in the following way. After an administrator verifies the amount of electricity generated from an eligible source, the administrator creates an appropriate number of credits. These credits are assigned a serial number and placed in the account of the appropriate entity in the registry. If the credit owner agrees to sell the credits to another entity, the owner files the necessary documentation with the administrator, who then authorizes the credits to be transferred to a different account in the registry. A covered entity would demonstrate compliance by transferring the required number of credits from its account to the administrator's account. The administrator would take action to retire the submitted credits to make sure they cannot be used again for compliance. Cybersecurity measures can help prevent theft of portfolio standard credits or other fraudulent activity. Some government agencies currently operate registries that could potentially be used to administer a national portfolio standard, and some private firms operate registries as well. Vintage refers to the time period in which a tradeable credit in a market-based policy is issued. Portfolio standards typically have annual compliance periods, with vintage expressed in years. In policies with shorter or longer compliance periods, the vintage could be associated with a specific month or a series of years. For example, if an eligible source generated electricity in the year 2025, it would receive a vintage 2025 credit. The banking and borrowing rules (see definitions, above) determine the years in which credits of a given vintage may be used for compliance. Portfolio Standard Design Elements If Congress chose to establish a national portfolio standard, lawmakers would face choices about the design of the policy. This section discusses some key design elements and potential effects of different choices. Often, design choices reflect a balance between increasing the certainty of achieving policy goals and decreasing the likelihood that consumers will experience undesirable cost increases. Design elements can interact with each other, so the potential effect of a choice about one element may be influenced by choices about others. Not all portfolio standard design choices must be made in legislation. Congress could direct an agency to promulgate regulations that implement a portfolio standard. The previous federal proposals summarized in the Appendix take different approaches. Some proposals made very few design choices and left most decisions to an agency, while others specified most design choices and left few decisions to an agency. Specifying details in legislation could add complexity that potentially impedes the legislative process or creates challenges in policy implementation. On the other hand, specifying details in legislation would give lawmakers greater control over policy design decisions. Source Eligibility Portfolio standards achieve their policy goals by increasing electricity generation from certain eligible energy sources, as defined by lawmakers. The various energy sources used for electricity generation have many different attributes that lawmakers might weigh in determining which sources could be eligible under a national portfolio standard. Recent state policy debates and many current discussions at the federal level have centered around three attributes: carbon intensity, technology maturity, and market competitiveness (i.e., cost). The debate around carbon intensity has focused on whether to include sources with a carbon intensity less than conventional coal-fired generators (i.e., low carbon sources), such as natural gas combined-cycle power plants, or include only those with a carbon intensity of zero (i.e., zero carbon sources). This debate closely relates to the desired environmental outcome of a portfolio standard. All else being equal, a portfolio standard that includes low carbon sources would likely result in higher greenhouse gas emissions from the electric power sector than a portfolio standard under which only zero carbon sources were eligible. Advocates for substantial greenhouse gas reductions disagree about whether all zero carbon sources should be eligible, with nuclear energy and CCS being particularly contentious. Advocates who support nuclear energy and CCS often present cost arguments, while advocates who oppose those sources often present arguments about environmental quality and environmental justice. The debates around technology maturity and market competitiveness both focus on the desired balance between supporting new technologies and supporting existing technologies. These debates closely relate to the desired economic and technological outcomes of a portfolio standard. Many mature technologies are less expensive than new technologies, so including them as eligible sources might achieve the policy goals at a lower overall cost. Mature technologies may be easier to deploy, from an operational point of view, since industry best practices and standards for their use are established. At the same time, a portfolio standard that includes mature technologies might not encourage the desired level of investment in new technologies. A compromise may be the use of carve outs, tiers, multipliers, partial crediting, or usage limits, as described above, to attempt to influence the extent to which covered entities used new or mature technologies for compliance. Energy storage and energy efficiency are not electricity sources, in the usual sense, because they do not generate electricity. Their supporters argue their deployment helps achieve similar policy goals as portfolio standards, namely technology innovation, greenhouse gas reduction, and job creation. Portfolio standards could incentivize energy storage and energy efficiency directly, for example, by defining them as eligible sources and providing an accounting methodology for issuing credits to them. Such accounting methodologies may be more complex than those used for electricity generation, especially for energy efficiency since energy savings cannot be directly measured. Alternatively, portfolio standards could indirectly incentivize deployment of energy storage or energy efficiency in the setting of the base quantity, as discussed in the section " Base Quantity of Electricity ." If lawmakers wanted to incentivize their deployment, another option could be to establish separate targets for energy storage deployment and energy efficiency alongside a portfolio standard. Some states with portfolio standards have taken that approach, and some previous federal proposals took that approach as well. Distributed energy resources (DER) are located near the point of consumption in the electric power sector (e.g., an individual home, commercial facility, or manufacturing plant). Federal portfolio standard proposals to date put a compliance obligation on electric utilities; however, utilities do not always own or operate DER. From the perspective of an electric utility, many DER are like energy efficiency in that they reduce electricity sales. Some, but not all, DER use renewable sources, so lawmakers might consider whether to include these as eligible sources. The electric power industry does not have established methodologies for measuring generation from DER, so these would need to be developed if DER were to receive credits. Alternatively, the setting of base quantities can influence the incentive DERs receive as discussed below. Other energy source attributes may be of interest to Congress. These include energy density, which can affect land requirements, and the geographic variability in resource quality. As is also the case for other topics, geographic variability in natural resources can potentially raise concerns about uneven wealth impacts in portfolio standard policymaking. For example, the nation's wind resources most suitable for wind energy development are concentrated in the central United States and offshore of the Northeast and Mid-Atlantic. The nation's largest solar resources are concentrated in the Southwest. If eligible sources under a portfolio standard were all concentrated in one region (or, similarly, if a lack of eligible sources were concentrated in one region), wealth transfer could occur, raising potential concerns over fairness. Relatedly, some regions have developed some resources more than others, for example via implementation of state portfolio standards. Including existing sources, such as those incentivized under state policies, could potentially result in wealth transfer from states that had not previously implemented supportive policies. On the other hand, excluding existing sources could be perceived as penalizing early actors. Utility Applicability Most homes, businesses, and other consumers acquire electricity from the electric grid and pay electric utilities to provide that electricity to them. Over 3,200 electric utilities operate in the United States, and they are generally classified by three ownership models. Investor-owned utilities (IOUs) are operated by private companies on a for-profit basis, and they deliver electricity in at least portions of every state except Nebraska. Publicly owned utilities (POUs, sometimes municipal utilities or munis) are owned by local governments and operated on a not-for-profit basis. Electric co-operatives (co-ops, sometimes rural co-ops) are member-owned organizations operated on a not-for-profit basis, typically located in rural areas. State governments allow IOUs to act as monopolies in their service territory, with no competition on electricity distribution, in exchange for accepting electricity rates as determined by state regulators. Similar to IOUs, POUs and co-ops are allowed to operate as monopolies with respect to electricity distribution. Unlike IOUs, they are generally exempt from regulation by state governments regarding electricity rates, investment decisions, and other operations. POUs and co-ops together serve about 27% of Americans. Lawmakers would have to decide to which type of utility a national portfolio standard would apply, if they chose to implement such a policy. If one class of utilities, such as co-ops, were excluded, then the overall effect of the policy might be reduced, since the excluded utilities could still procure electricity from ineligible sources above the levels set by the portfolio standard. On the other hand, excluding some utilities based on ownership model might be desirable in order to address concerns about overall compliance costs and cost distribution. POUs and co-ops often serve fewer customers than IOUs, so any fixed administrative costs associated with compliance must be shared by a smaller number of customers, resulting in relatively larger shares of administrative costs. Some state portfolio standards establish different (usually less stringent) targets for POUs and co-ops, while some exclude them altogether. Utility size, expressed as annual electricity sales, could be a more precise characteristic than ownership model in addressing concerns about higher administrative costs for smaller utilities, since some IOUs are small and some POUs are large. Figure 2 shows the share of utilities of each ownership model for selected utility size ranges. Table 1 shows the total number of utilities of each ownership model in the selected size ranges. Previous legislation has included different utility size thresholds for inclusion. Utilities that did not meet the specified size threshold would not have had a compliance obligation under those proposals. For example, S. 2146 in the 112 th Congress would have initially included utilities with at least 2 million megawatt-hours (MWh) of sales and then phased in smaller utilities of at least 1 million MWh of sales. The provisions of Title I of the Public Utility Regulatory Policies Act of 1978 (PURPA; P.L. 95-617 ) apply to utilities with at least 0.5 million MWh of sales. A potential consideration is the share of total U.S. electricity sales that would be covered by a portfolio standard if utility size thresholds were established. Figure 3 shows the share of total U.S. electricity sales associated with utilities of different sizes, for all ownership models. In 2017, 82% of U.S. electricity sales came from distribution utilities that had annual sales volumes greater than 2 million MWh, 87% came from utilities with sales greater than 1 million MWh, and 92% came from utilities with sales greater than 0.5 million MWh. Target and Stringency The target of a portfolio standard refers to "how much?" and "by when?" A target might be defined for a single year (e.g., 50% of electricity sales in 2050), or it might be phased in over multiple interim periods (e.g., 25% of electricity sales in 2020â2029; 40% of electricity sales in 2030â2039; 80% of electricity sales in 2040â2049). Target phase-in can be implemented in different approaches, as shown in Figure 4 . Each of these approaches has different implications for how individual source types might be affected, though actual outcomes would be influenced by other factors such as future technology costs and electricity demand. Linear phase-in would tend to benefit existing sources and mature technologies with relatively short development timelines, such as wind and solar. These sources could be available to generate electricity and meet near-term compliance obligations. A back-end loaded phase-in might avoid near-term electricity price increases and allow time for commercialization of new technologies, but it might not result in desired environmental results in the near term. A stepped phase-in could balance the advantages and disadvantages of the other two options. It might also lead to uneven investment patterns, with periods of relatively high project development associated with target increases followed by periods of relatively low project development during target plateau periods. The stringency of a policy indicates the changes the policy might make in generation profile compared to a business-as-usual scenario. Generally, the stringency of the policy will be positively correlated to the costs and benefits of implementing the policy, so as policy stringency increases, the costs and benefits will also increase. For example, a portfolio standard target of 50% of electricity sales by 2050 would likely cost more to implement than a target of 25% of electricity sales by 2050, all else being equal. Similarly, a portfolio standard target of 30% of electricity sales by 2030 would likely cost more to implement than a target of 30% of electricity sales by 2050. At the same time, the more stringent options (i.e., the higher target percentage or the earlier target date) could result in greater technology innovation and lower greenhouse gas emissions than the less stringent options. Another way to describe portfolio standards' stringency is the net change in generation from eligible sources. This approach acknowledges that the national electricity generation profile is currently quite diverse with many types of sources. The net change is the difference between the final requirement of the portfolio standard (i.e., the target) and the share of generation from eligible sources before the policy is implemented. Suppose a portfolio standard required 20% of generation to come from wind and solar sources by 2020. These sources contributed 9% of electricity generation in 2018, so the net change required by such a portfolio standard would be 11%. The different ways to describe portfolio standard stringency could influence public perception of it. In this example, the same target could either be described as 20% or 11%, with potentially different implications for perceived costs and benefits. Base Quantity of Electricity For portfolio standards that express compliance obligation as the percentage of electricity sales coming from clean energy sources, the base quantity is the denominator used to calculate the compliance obligation. The base quantity of electricity can determine the amount of generation from eligible sources a portfolio standard requires in absolute terms. It has been described as "perhaps the most important and least understood concept in the design of a [portfolio standard]." The base quantity could equal total electricity sales, but it need not. The base quantity could instead be a specified subset of total sales. Some portfolio standard proposals have excluded electricity generated from certain sources in the base quantity calculation (see Appendix ). Under such an approach, a utility with a compliance obligation would be incentivized to procure electricity from sources excluded from the base quantity because doing so would lower the amount of electricity from clean sources it would have to procure. To illustrate this point, consider a hypothetical portfolio standard with a 50% clean energy requirement. The compliance obligation for this portfolio standard would be expressed as If a utility sold 10 million MWh annually and the base quantity of electricity equaled the total sales, then the utility would have to procure 5 million MWh from clean energy sources. If electricity from certain sources were excluded from the base quantity, the required procurement changes. If a utility procured 1 million MWh of the 10 million MWh it sold from sources excluded from the base quantity, then the utility would have to procure 4.5 million MWh from clean energy sources. The portfolio standard, in this case, would incentivize the utility to procure electricity from both kinds of sources, namely those excluded from the base quantity and those defined as clean energy by the policy. The utility's incentive to procure electricity from sources excluded from the base quantity would generally be less than the incentive to procure electricity from clean energy sources, depending upon the cost of different energy sources and the overall portfolio standard stringency. If policymakers wanted to provide some policy support to certain sources, but less support than other sources receive, they might exclude certain sources from the base quantity calculation. A related consideration is the treatment of energy efficiency (EE) and DER (including, potentially, customer-sited energy storage). These result in reduced utility sales, so, to some extent, they are inherently included in the base quantity calculation. Utility investments that increased EE or generation from DER could also help the utility achieve compliance with a portfolio standard by reducing the amount of electricity it would have to procure from clean energy sources. For many utilities, reducing sales reduces the company's profitability, but some regulatory models are being developed and implemented in which profitability can be maintained or can increase as use of EE and DER increases. Cost Containment Mechanisms Future electricity demand, technology development, and technology costs are all uncertain. Ultimately, these uncertainties result in uncertainties around the cost to consumers of a portfolio standard, which could be an important consideration for lawmakers. To protect consumers from undesirably high electricity costs, portfolio standards can include provisions that reduce stringency in response to high costs. These various provisions are sometimes called safety valves. Safety valves need not be included in legislation, since Congress could amend a law establishing a portfolio standard in response to any concerns that developed. Including safety valves in legislation could, however, promote regulatory certainty for covered entities and consumers, because legislative action to address any concerns that might arise could potentially be a lengthy process. Another option could be for Congress to explicitly authorize an agency to implement safety valves. An alternative compliance payment (ACP) allows a utility to pay a fee in lieu of surrendering credits. The degree of cost control it might provide would depend on the level at which an ACP were set. For example, if electricity generation from eligible sources were available at 5 cents per kilowatt-hour (cents/kWh) and an ACP were 10 cents/kWh, utilities would likely procure electricity from the eligible sources instead of paying the ACP. If, however, the ACP were 3 cents/kWh, utilities would likely pay the ACP and procure electricity from ineligible sources. Use of ACP could be unlimited, or it could be limited to a certain share of overall compliance. If an ACP were included in a national portfolio standard, lawmakers would also have to decide how any collected revenue would be disbursed. One option would be to use the revenue to further desired policy goals, for example by funding greenhouse gas reduction programs or technology research and development. Another option would be to return the revenue to electricity consumers as a way of further reducing the cost impacts of a portfolio standard. Other options include treating it as general fund revenue, deficit or debt reduction, or other spending. Portfolio standards could include provisions to suspend or delay compliance with targets under certain conditions. These conditions could include compliance costs reaching a specified threshold or identification of reliability risks. Some cost containment for portfolio standards comes from the use of tradable credits to demonstrate compliance, especially if a portfolio standard allows unbundled credits. A low cost eligible source might be located outside of a utility's service territory. When utilities can use unbundled credits, they can demonstrate compliance by surrendering credits from this low cost source. The alternative, namely, disallowing tradable credits, could require utilities to procure electricity from high cost sources or could require the development of more sources than would be required to meet electricity demand, resulting in overall higher costs for consumers. One argument against unbundled credits is that they might not address concerns over localized concentrations of co-pollutants from conventional generators, known as hot spots. For example, if a utility procured electricity from an ineligible source that also emitted harmful air pollutants such as particulate matter or nitrogen dioxide, and the utility complied with the portfolio standard with credits associated with eligible sources located outside its service territory, hot spots might not be reduced to the extent they might be if unbundled credits were not allowed. Banking or borrowing could also decrease overall compliance costs. For instance, in years when utilities had access to many credits from low cost eligible sources, relative to what were required by the target, utilities might bank credits. If fewer credits were available in future years, relative to what were required by the target, a utility could surrender the banked credits, resulting in lower compliance costs. Banking could reduce a utility's exposure to volatility that can occur in electricity markets. This reduced risk can also reduce overall compliance costs, since a utility would not have to take other actions to reduce its risk exposure. To the extent that banking or borrowing could reduce the net change in generation, it might lead to reduced environmental benefits and reduced incentive for technology innovation. Alternatively, lawmakers could establish mechanisms to increase the stringency of a portfolio standard if certain thresholds were passed. Stringency could be increased by increasing the target to a higher percentage of electricity sales or moving the deadline to achieve the target to an earlier year. The trigger for such an action could be credit price, greenhouse gas emissions levels, technology development, or other thresholds. This might be one way to increase the desired benefits of a portfolio standard in cases where compliance costs were unexpectedly low. It might also create uncertainty for covered entities and potentially result in unintended consequences such as market participants avoiding actions they might otherwise take in order to avoid triggering a change in stringency. Selected Policy Considerations The previous section discussed some potential effects of different choices about design elements for a portfolio standard. A key theme in discussion of design elements is the balance between achieving policy objectives and minimizing electricity cost increases for consumers, assuming a portfolio standard were implemented. The potential effects discussed in this section might be characterized instead as the potential effect of a portfolio standard compared to business as usual. While the previous section addressed the question "How can a portfolio standard be designed?," this section addresses the question "What might happen if a portfolio standard were implemented?" Any projections of the effects of a policy on the U.S. electric power sector are subject to uncertainty around various factors. These include future economic activity, electricity demand, energy costs (e.g., natural gas prices), and technology costs. Some factors may be more strongly influenced by decisions made by foreign governments than by the federal government. For example, international demand for electricity from solar energy could lower the cost to produce solar panels, or countries with large critical mineral resources could impose export bans, increasing the cost in the United States of any technology using those minerals. Potential Economic Effects The overall effect on the American economy of a national portfolio standard would be influenced by multiple factors. Increased electricity costs could reduce economic activity, depending on the price response throughout the economy. Potential price responses are reduced electricity consumption, increased investment in efficiency measures, or reduced spending on other goods or services. Some price responses might have minimal effect on overall economic activity, for example if consumers shifted spending from electricity consumption to energy efficiency improvements. Potential economic effects might not be uniformly distributed. There could be regional differences in electricity price changes, given the geographic variability in energy resources. Utilities in regions with relatively less potential to develop eligible sources (i.e., regions in which eligible sources are relatively costlier) might buy credits from eligible generators in other regions. The cost of credits might result in higher electricity prices for customers of the utility buying credits. At the same time, customers of any utilities selling credits might see lower electricity prices. As discussed above, the ability to use unbundled credits for compliance could reduce overall compliance costs relative to the case where only bundled credits were allowed because utilities across the country could take advantage of low cost eligible sources. At the same time, unbundled credits could result in wealth transfer between different regions of the country. Policy design choices might affect any potential wealth transfer. Electricity prices already vary across the country as a result of differences in resource availability, electricity demand, and utility regulatory models. There might also be differences in cost distribution among household income levels. Generally, poorer Americans spend a larger portion of their income on electricity than wealthier Americans, so electricity cost increases could disproportionately affect them. Within the electric power sector, businesses associated with eligible sources might be positively affected while businesses associated with ineligible sources might be negatively affected. The affected businesses might be individual generators and also firms associated with their supply chains. For negatively affected businesses, the potential impacts might include loss of capital investment (sometimes referred to as stranded costs) and reduced employment. Communities surrounding a negatively affected generator might experience negative effects such as loss of tax revenue base and increased demands on social services. For positively affected businesses and communities, the opposite might be true, namely increased capital investment, increased employment, and other positive economic effects. Additionally, American businesses that develop goods or services used to comply with a portfolio standard could potentially expand into international markets, depending on whether eligible sources also experienced demand growth internationally. Depending on policy design details, local electricity market factors, and local energy resources, some existing businesses in the electric power sector could experience negligible effects of a potential national portfolio standard. Potential Environmental Effects Proponents of portfolio standards describe multiple environmental benefits, such as reduced greenhouse gas (GHG) emissions (i.e., climate change mitigation) and reduced air pollutants (i.e., improved air quality). The extent to which a portfolio standard might produce potential environmental benefits would depend in part on choices about source eligibility and stringency. Potential eligible sources vary in their GHG and air pollutant emissions, as well as other attributes such as water consumption and power density (which can affect land requirements). Implementation could affect environmental outcomes too. For example, some eligible sources might be deployable in either large-scale or small-scale installations, with differing effects on environmental factors such as land use. Some would argue these potential effects should be compared with potential effects of other energy options. A comprehensive comparison of potential environmental effects of various energy sources is beyond the scope of this report. Interaction with State Portfolio Standards The conditions under which federal law preempts state law can vary, and determination of federal preemption can be complex. Twenty-nine states, three U.S. territories, and the District of Columbia are currently implementing mandatory portfolio standards, and an additional eight states and one territory have voluntary versions. As of September 6, 2019, nine of these have targets of 100%. If Congress implemented a national portfolio standard, it could expressly preempt existing state portfolio standards. If a national portfolio standard were enacted that did not preempt state portfolio standards, utilities in states with existing portfolio standards might have to comply with both simultaneously. In practice, whichever standard had the higher stringency would determine the amount of eligible sources in a utility's portfolio. In this case, the relevant stringency could be either the required percentage of generation from eligible sources or the set of eligible sources itself. For example, some existing state portfolio standards include nuclear energy as an eligible source. If a national portfolio standard did not include nuclear energy, then a utility might be out of compliance with the federal standard even if it were in compliance with the state standard and the state and federal standard required the same amount of electricity from eligible sources. Assuming a generator were eligible for both a state and national program, a utility could procure electricity (or credits) from that generator to demonstrate compliance with both. In other words, the presence of two portfolio standards would not necessarily double the amount of procurement from eligible sources required. A utility covered under two portfolio standards might, however, face increased administrative costs associated with compliance. Although few technical barriers exist to the simultaneous operation of state and federal portfolio standards, other concerns may make this undesirable. Administrative cost burden for covered entities is one such concern. Another might be confusion for eligible sources about whether and how to receive credits for two portfolio standards. If Congress chose to preempt state programs, this could potentially disrupt project finances for recently developed or proposed sources and lead to investment losses in clean energy industries. Congress might also consider exempting utilities facing state portfolio standards of equal or greater stringency than the federal portfolio standards. Congress could also allow credits issued by states to be used for compliance with a federal program. This option would, effectively, allow a utility to use one credit to demonstrate compliance with two portfolio standards, though it could also reduce the policy outcomes relative to a utility having two distinct compliance obligations. An option included in some of the bills listed in the Appendix is to compensate utilities facing a state standard with a specified number of federal credits. Alternatively, Congress could choose not to explicitly address the question, and instead let state governments or judicial review decide whether state programs would be suspended if a national one were implemented. Interaction with Other State Energy Policies Under current law, state and local governments have authority for approving electricity generation and transmission assets. Compliance with a national portfolio standard might require new generation and transmission assets, but it is unclear to what extent state approval processes would consider national clean energy policy goals. Some stakeholders have argued that state approval processes for new electricity transmission lines, in particular, create barriers for deployment of certain electricity generation sources, especially wind. To the extent that a national portfolio standard required new transmission capacity, interest might increase in a stronger federal role in approving electricity transmission infrastructure. Congress has considered this in the past. For example, the Energy Policy Act of 2005 ( P.L. 109-58 ) authorized federal approval for some transmission infrastructure under certain conditions, though this authority has never been used. As noted in " Potential Environmental Effects " a national portfolio standard might alternatively incentivize distributed energy development or projects in other locations that might not require new transmission capacity. Some states have adopted policies to create competition among electricity generators, an effort known as deregulation or restructuring. In these states (and some portions of states), competitive electricity markets create price signals meant to, among other things, drive long-term investment decisions. Congress demonstrated support for restructuring efforts in the Energy Policy Act of 1992 ( P.L. 102-486 ). Portfolio standards require utilities to purchase electricity from sources that might be more expensive than other sources. This creates so-called out-of-market payments, sometimes characterized as subsidies, for eligible sources that could distort the operation of electricity markets. Eligible sources would still compete with each other for market share, creating some competitive pressure on prices among eligible sources. Appendix. Legislative Proposals in the 105th-116th Congresses This section lists previously introduced legislation that would have established national portfolio standards. CRS searched congress.gov using the phrases "renewable portfolio standard," "clean energy standard," "renewable energy standard," "renewable electricity standard," "renewable energy," and "clean energy," in full bill text or bill summaries for all Congresses. The earliest bill identified in this search was introduced in the 105 th Congress. Search results were refined by including only the Subject-Policy Area terms "Energy" and "Environmental Protection." Table A-1 provides selected policy design elements of the bills that would have established national portfolio standards that were identified using this search methodology. Bills are listed in order of introduction by Congress, with House bills listed first and Senate bills listed second. This table only provides information related to the bills' portfolio standards. Some of the bills in the table had multiple provisions, including some that might also affect the electric power sector, but those are not described here. Summary:	null	96	52,349	52,351	52,351	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Legislative proposals have been introduced since the 105 th Congress to create a national electricity portfolio standard that would require electric utilities to procure a certain share of the electricity they sell from specified sources. Twenty-nine states, three U.S. territories, and the District of Columbia are currently implementing mandatory portfolio standards, and an additional eight states and one territory have voluntary versions. Various existing and proposed portfolio standards use a range of terms for similar concepts. A renewable portfolio standard (RPS) typically means a requirement to procure electricity from renewable sources. A clean energy standard (CES) typically means a variant of an RPS that includes some nonrenewable sources, such as nuclear or selected fossil fuels, in the requirement. Some lawmakers and stakeholders use these terms interchangeably, and some use the term CES or "clean energy" to refer only to renewable sources. This report uses the more general term "portfolio standard" to avoid confusion between RPS and CES. At both the federal and state level, lawmakers express multiple goals for portfolio standards. These include greenhouse gas reduction, technology innovation, and job creation. Policy design choices, as discussed in this report, can influence the extent to which portfolio standards might achieve those or other goals. Other policies could potentially achieve the same goals as portfolio standards. For example, tax incentives or funding for technology research, development, and deployment could promote the use of certain types of electricity generation sources by reducing their costs. This report does not compare portfolio standards with other policy options, nor does it fully examine the costs and benefits of establishing a national portfolio standard compared to business-as-usual trends in the electric power sector. This report provides background on portfolio standards and an overview of policy design elements to inform debate around proposals introduced in the 116 th Congress, building on previous CRS reports addressing this topic. This report also analyzes potential effects of portfolio standard design choices, with an emphasis on economic effects, environmental effects, and potential interactions with state energy policies. Other potential effects that may be of congressional interest, but are outside the scope of this report, include public health, considerations regarding critical minerals used in some energy sources, electric reliability, cybersecurity, and geopolitics. U.S. Electricity Generation Profile A number of government agencies, nongovernmental organizations, academic researchers, and private sector entities analyzed potential effects of a national portfolio standard in 2011 and 2012 because of congressional interest at that time. Since 2012, the U.S. electric power sector has seen several changes in its generation profile that were unanticipated in those analyses. These include an increase in generation from sources using natural gas and renewable energy, along with a decrease in coal-fired generation. The current U.S. electricity generation profile and market trends may be important context for any congressional debate about a potential national portfolio standard. The U.S. Energy Information Administration (EIA) reports that total electricity generation was 4,047,766 gigawatt-hours (GWh) in 2012 and 4,207,353 GWh in 2018, an increase of 4%. Most of this increase occurred between 2017 and 2018, as shown in Figure 1 . Between 2012 and 2018, the share of electricity generation from different sources has changed. Coal generated 37% of total generation in 2012 and 27% in 2018. Natural gas generated 30% of total generation in 2012 and 35% in 2018. Renewable sources, including hydropower, wind, solar, geothermal, and biomass, generated 12% of total generation in 2012 and 18% in 2018. Many expect these trends to continue. For example, EIA's projection of current laws, regulations, and market trends show coal contributing 17% of total generation in 2050, natural gas contributing 39%, and renewable sources contributing 31%. Electric power sector observers generally agree on the factors causing these trends, although the relative importance of each factor is subject to some debate. The changes from 2012 to 2018 are due to a combination of (1) continued low natural gas prices and low wholesale electricity prices; (2) federal environmental regulations, especially on coal-fired power plants; (3) declining capital costs for wind and solar sources; (4) federal tax incentives for wind and solar sources; (5) state portfolio standards and other policies; (6) changing consumer preferences, especially large corporations' and institutions' commitments to procure more electricity from renewable sources; and (7) natural turnover as generators age. Differing perspectives over the relative influence of these factors could affect stakeholder views on the merits of a federal policy to promote greater use of certain energy sources for electricity generation. Some might argue that sources that are now cost competitive (e.g., natural gas, wind) may not require policy support to increase their share of the electricity generation profile. Others may see electricity generation as solely an area for state policy as discussed further in the section " Interaction with Other State Energy Policies ," below. A related consideration may be whether increasing the pace of change in the U.S. electricity portfolio could pose reliability risks. Key Portfolio Standard Concepts Key concepts in portfolio standard policymaking may or may not have identical meaning when used in other contexts. For convenience and clarity, this section introduces key concepts used in this report. As noted above, lawmakers and observers are not consistent in their use of terms related to portfolio standards. Renewable portfolio standard (RPS) is the most frequently used term to describe a portfolio standard, though renewable energy standard, alternative energy portfolio standard, and others are in use. The term clean energy standard (CES) is frequently used to refer to a variant of RPS in which certain nonrenewable sources are eligible in addition to renewable sources, but some federal legislative proposals have used the term "clean energy" to refer only to renewable sources. The Appendix provides more information about previously introduced bills. Banking refers to the extent to which credits issued in the program may be used for compliance after their vintage year (see definition, below). Banking provisions can equivalently be described in terms of expiration. For example, if credits expire after two years, then banking for two years is allowed. A related concept is borrowing which allows credits of future vintage years to be used for compliance. Base quantity of electricity is the sales volume to which the portfolio standard applies. The base quantity could equal total electricity sales, but it need not. Excluding sources from the calculation of the base quantity changes the required amount of generation from eligible sources in absolute terms. The base quantity to which the portfolio standard applies also affects the financial incentive that different sources receive. Even sources deemed ineligible under the portfolio standard could receive some policy support if they were excluded from the base quantity of electricity. This concept is discussed further in the section " Base Quantity of Electricity ." Carve outs , tiers, multipliers, partial crediting, and usage limits are all policy options for influencing the relative support that different types of eligible sources receive under a portfolio standard. Eligible sources will be available at different costs. Policymakers may want to avoid a situation where compliance is achieved mostly through the use of a single, low-cost source. A carve out is a requirement within the overall policy requirement to achieve a minimum level of compliance by using a certain source. Carve outs have been used, for example, to require use of solar energy even when that was more expensive than other eligible sources. The same goal might be accomplished through use of tiers . Typically, a carve out will apply to a single source type while a tier might apply to multiple source types. A related concept is that of usage limits that set maximum levels for compliance from certain sources. Multipliers are rules under which selected sources receive more than the usual amount of credit for generating electricity, but the credits are completely fungible (see definition, below) with others. Sources that are eligible for multipliers would receive extra policy support, relative to other sources. Multipliers could be used, for example, to encourage demonstration and commercialization of new technologies. P artial crediting would give selected sources less than the usual amount of credit and could be applied to sources lawmakers wanted to give less policy support. Clean energy , as used in this report, refers to the set of sources that lawmakers might choose to include in a portfolio standard. These sources could include wind, solar, geothermal, biomass, hydropower, marine energy, nuclear, natural gas combined cycle generators, or fossil fuel-fired generators equipped with carbon capture and sequestration technology (herein, CCS). Lawmakers could also choose to include nongenerating sources such as energy storage or energy efficiency. Other considerations about the choice of eligible sources are discussed in the section " Source Eligibility ." Covered entities are the entities with a compliance obligation under a portfolio standard. Most portfolio standards being implemented by states or proposed at the federal level have electricity distribution utilities as the covered entities. These utilities may or may not own electricity generators, depending on state and local regulatory regimes. Typically, a utility procures electricity from a number of different generators using a variety of energy sources (its portfolio ). Other considerations about the choice of covered entities are discussed in the section " Utility Applicability ." Credits are the unit of accounting for portfolio standards and other market-based policies. Electricity cannot easily be traced from its point of generation to its point of consumption, so accounting measures are required to assess compliance with a portfolio standard. In many existing portfolio standards, credits are issued by an administrator to a generator that uses a clean energy source. The number of credits issued is based on actual measured electricity generation (i.e., ex post ). The generator can then sell credits to a utility, and the utility surrenders them to the program administrator to demonstrate compliance. If a generator sells both electricity and associated credits to the same entity, the credit is bundled . If a generator sells electricity and associated credits to different entities, the credit is unbundled . Lawmakers could allow entities other than generators and utilities (e.g., financial institutions) to buy and sell credits, or they could allow only utilities with a compliance obligation to purchase credits. The price that utilities would pay for credits would depend on the portfolio standard stringency, the overall volume of electricity generated by clean energy sources, and other market factors. The sale of credits could create an additional source of revenue for a generator, potentially improving its economic performance relative to a business-as-usual scenario with no portfolio standard. In some cases, the ability to sell credits might be the deciding factor for whether a new generator would be constructed (or, for existing generators, whether a generator would remain operational instead of being retired). In other cases, generators may be profitable without the sale of credits, and the credits might create a windfall profit. The requirement to buy credits would likely increase the overall costs for a utility. Typically, a utility's costs for complying with a portfolio standard would be passed on to its customers. If a utility were unable to fully pass on its compliance costs, it might see reduced profitability. Fungibility is the attribute of credits allowing them to be used interchangeably and without penalty. Since many state portfolio standards already exist, federal policymakers would have to decide if these state credits would be fungible with federal credits under a federal portfolio standard. If they were, then current holders of state-issued credits could use them for compliance with a federal portfolio standard or sell them to another entity for that purpose. If they were not, then state-issued credits could potentially lose value, depending on the relative stringency of a national portfolio standard and the state portfolio standard. Some states have implemented cap-and-trade programs in addition to portfolio standards, both of which aim to reduce greenhouse gas emissions from the electricity generation. Like portfolio standards, cap-and-trade uses credits (also called allowances) as an accounting mechanism and for compliance purposes. Under existing state policies and federal proposals, credits under portfolio standards are not fungible with allowances under cap-and-trade programs for greenhouse gases. Market-based policies attempt to use financial incentives to achieve policy goals. Many discussions contrast them with command-and-control policies that set specific permissions or prohibitions. Portfolio standards indirectly provide financial incentives because they create demand for generation from certain eligible sources in electricity markets, even if those eligible sources are more expensive than ineligible sources. Some observers argue this mechanism is a disruption of market forces. In comparison, tax credits, grants, and loan guarantees provide direct financial incentives for eligible sources and therefore lower the cost of those sources in the market. Most portfolio standard proposals do not expressly prohibit use of ineligible sources, but they do create a financial disincentive to use them. Monitoring, reporting, and verification (MRV) are three distinct steps that ensure that market-based policies achieve the desired goals. In the case of portfolio standards, MRV practices would measure the amount of electricity generated by eligible sources and verify that each unit of electricity from eligible sources was used only once for the purpose of compliance. Monitoring and reporting electricity generation is commonplace in the industry, at least for large-scale generators connected to the electricity transmission system. Verification for market-based policies is often completed by an independent third party. Qualifying facilities (QFs) are established in the Public Utility Regulatory Policies Act of 1978 ( P.L. 95-617 ; PURPA) as certain small power production facilities and cogeneration facilities that receive special treatment. Utilities must purchase electricity from QFs at a price determined by what the utility would otherwise have to pay for electricity. There is no direct relationship between QFs under PURPA and sources that would be eligible under a portfolio standard, though the term "qualifying source" is sometimes used in both contexts. To avoid confusion, this report refers to sources defined as clean energy under a portfolio standard as "eligible sources." Registries , sometimes called tracking systems, are electronic databases used to facilitate credit issuance and transfer. State portfolio standards typically make use of registries in the following way. After an administrator verifies the amount of electricity generated from an eligible source, the administrator creates an appropriate number of credits. These credits are assigned a serial number and placed in the account of the appropriate entity in the registry. If the credit owner agrees to sell the credits to another entity, the owner files the necessary documentation with the administrator, who then authorizes the credits to be transferred to a different account in the registry. A covered entity would demonstrate compliance by transferring the required number of credits from its account to the administrator's account. The administrator would take action to retire the submitted credits to make sure they cannot be used again for compliance. Cybersecurity measures can help prevent theft of portfolio standard credits or other fraudulent activity. Some government agencies currently operate registries that could potentially be used to administer a national portfolio standard, and some private firms operate registries as well. Vintage refers to the time period in which a tradeable credit in a market-based policy is issued. Portfolio standards typically have annual compliance periods, with vintage expressed in years. In policies with shorter or longer compliance periods, the vintage could be associated with a specific month or a series of years. For example, if an eligible source generated electricity in the year 2025, it would receive a vintage 2025 credit. The banking and borrowing rules (see definitions, above) determine the years in which credits of a given vintage may be used for compliance. Portfolio Standard Design Elements If Congress chose to establish a national portfolio standard, lawmakers would face choices about the design of the policy. This section discusses some key design elements and potential effects of different choices. Often, design choices reflect a balance between increasing the certainty of achieving policy goals and decreasing the likelihood that consumers will experience undesirable cost increases. Design elements can interact with each other, so the potential effect of a choice about one element may be influenced by choices about others. Not all portfolio standard design choices must be made in legislation. Congress could direct an agency to promulgate regulations that implement a portfolio standard. The previous federal proposals summarized in the Appendix take different approaches. Some proposals made very few design choices and left most decisions to an agency, while others specified most design choices and left few decisions to an agency. Specifying details in legislation could add complexity that potentially impedes the legislative process or creates challenges in policy implementation. On the other hand, specifying details in legislation would give lawmakers greater control over policy design decisions. Source Eligibility Portfolio standards achieve their policy goals by increasing electricity generation from certain eligible energy sources, as defined by lawmakers. The various energy sources used for electricity generation have many different attributes that lawmakers might weigh in determining which sources could be eligible under a national portfolio standard. Recent state policy debates and many current discussions at the federal level have centered around three attributes: carbon intensity, technology maturity, and market competitiveness (i.e., cost). The debate around carbon intensity has focused on whether to include sources with a carbon intensity less than conventional coal-fired generators (i.e., low carbon sources), such as natural gas combined-cycle power plants, or include only those with a carbon intensity of zero (i.e., zero carbon sources). This debate closely relates to the desired environmental outcome of a portfolio standard. All else being equal, a portfolio standard that includes low carbon sources would likely result in higher greenhouse gas emissions from the electric power sector than a portfolio standard under which only zero carbon sources were eligible. Advocates for substantial greenhouse gas reductions disagree about whether all zero carbon sources should be eligible, with nuclear energy and CCS being particularly contentious. Advocates who support nuclear energy and CCS often present cost arguments, while advocates who oppose those sources often present arguments about environmental quality and environmental justice. The debates around technology maturity and market competitiveness both focus on the desired balance between supporting new technologies and supporting existing technologies. These debates closely relate to the desired economic and technological outcomes of a portfolio standard. Many mature technologies are less expensive than new technologies, so including them as eligible sources might achieve the policy goals at a lower overall cost. Mature technologies may be easier to deploy, from an operational point of view, since industry best practices and standards for their use are established. At the same time, a portfolio standard that includes mature technologies might not encourage the desired level of investment in new technologies. A compromise may be the use of carve outs, tiers, multipliers, partial crediting, or usage limits, as described above, to attempt to influence the extent to which covered entities used new or mature technologies for compliance. Energy storage and energy efficiency are not electricity sources, in the usual sense, because they do not generate electricity. Their supporters argue their deployment helps achieve similar policy goals as portfolio standards, namely technology innovation, greenhouse gas reduction, and job creation. Portfolio standards could incentivize energy storage and energy efficiency directly, for example, by defining them as eligible sources and providing an accounting methodology for issuing credits to them. Such accounting methodologies may be more complex than those used for electricity generation, especially for energy efficiency since energy savings cannot be directly measured. Alternatively, portfolio standards could indirectly incentivize deployment of energy storage or energy efficiency in the setting of the base quantity, as discussed in the section " Base Quantity of Electricity ." If lawmakers wanted to incentivize their deployment, another option could be to establish separate targets for energy storage deployment and energy efficiency alongside a portfolio standard. Some states with portfolio standards have taken that approach, and some previous federal proposals took that approach as well. Distributed energy resources (DER) are located near the point of consumption in the electric power sector (e.g., an individual home, commercial facility, or manufacturing plant). Federal portfolio standard proposals to date put a compliance obligation on electric utilities; however, utilities do not always own or operate DER. From the perspective of an electric utility, many DER are like energy efficiency in that they reduce electricity sales. Some, but not all, DER use renewable sources, so lawmakers might consider whether to include these as eligible sources. The electric power industry does not have established methodologies for measuring generation from DER, so these would need to be developed if DER were to receive credits. Alternatively, the setting of base quantities can influence the incentive DERs receive as discussed below. Other energy source attributes may be of interest to Congress. These include energy density, which can affect land requirements, and the geographic variability in resource quality. As is also the case for other topics, geographic variability in natural resources can potentially raise concerns about uneven wealth impacts in portfolio standard policymaking. For example, the nation's wind resources most suitable for wind energy development are concentrated in the central United States and offshore of the Northeast and Mid-Atlantic. The nation's largest solar resources are concentrated in the Southwest. If eligible sources under a portfolio standard were all concentrated in one region (or, similarly, if a lack of eligible sources were concentrated in one region), wealth transfer could occur, raising potential concerns over fairness. Relatedly, some regions have developed some resources more than others, for example via implementation of state portfolio standards. Including existing sources, such as those incentivized under state policies, could potentially result in wealth transfer from states that had not previously implemented supportive policies. On the other hand, excluding existing sources could be perceived as penalizing early actors. Utility Applicability Most homes, businesses, and other consumers acquire electricity from the electric grid and pay electric utilities to provide that electricity to them. Over 3,200 electric utilities operate in the United States, and they are generally classified by three ownership models. Investor-owned utilities (IOUs) are operated by private companies on a for-profit basis, and they deliver electricity in at least portions of every state except Nebraska. Publicly owned utilities (POUs, sometimes municipal utilities or munis) are owned by local governments and operated on a not-for-profit basis. Electric co-operatives (co-ops, sometimes rural co-ops) are member-owned organizations operated on a not-for-profit basis, typically located in rural areas. State governments allow IOUs to act as monopolies in their service territory, with no competition on electricity distribution, in exchange for accepting electricity rates as determined by state regulators. Similar to IOUs, POUs and co-ops are allowed to operate as monopolies with respect to electricity distribution. Unlike IOUs, they are generally exempt from regulation by state governments regarding electricity rates, investment decisions, and other operations. POUs and co-ops together serve about 27% of Americans. Lawmakers would have to decide to which type of utility a national portfolio standard would apply, if they chose to implement such a policy. If one class of utilities, such as co-ops, were excluded, then the overall effect of the policy might be reduced, since the excluded utilities could still procure electricity from ineligible sources above the levels set by the portfolio standard. On the other hand, excluding some utilities based on ownership model might be desirable in order to address concerns about overall compliance costs and cost distribution. POUs and co-ops often serve fewer customers than IOUs, so any fixed administrative costs associated with compliance must be shared by a smaller number of customers, resulting in relatively larger shares of administrative costs. Some state portfolio standards establish different (usually less stringent) targets for POUs and co-ops, while some exclude them altogether. Utility size, expressed as annual electricity sales, could be a more precise characteristic than ownership model in addressing concerns about higher administrative costs for smaller utilities, since some IOUs are small and some POUs are large. Figure 2 shows the share of utilities of each ownership model for selected utility size ranges. Table 1 shows the total number of utilities of each ownership model in the selected size ranges. Previous legislation has included different utility size thresholds for inclusion. Utilities that did not meet the specified size threshold would not have had a compliance obligation under those proposals. For example, S. 2146 in the 112 th Congress would have initially included utilities with at least 2 million megawatt-hours (MWh) of sales and then phased in smaller utilities of at least 1 million MWh of sales. The provisions of Title I of the Public Utility Regulatory Policies Act of 1978 (PURPA; P.L. 95-617 ) apply to utilities with at least 0.5 million MWh of sales. A potential consideration is the share of total U.S. electricity sales that would be covered by a portfolio standard if utility size thresholds were established. Figure 3 shows the share of total U.S. electricity sales associated with utilities of different sizes, for all ownership models. In 2017, 82% of U.S. electricity sales came from distribution utilities that had annual sales volumes greater than 2 million MWh, 87% came from utilities with sales greater than 1 million MWh, and 92% came from utilities with sales greater than 0.5 million MWh. Target and Stringency The target of a portfolio standard refers to "how much?" and "by when?" A target might be defined for a single year (e.g., 50% of electricity sales in 2050), or it might be phased in over multiple interim periods (e.g., 25% of electricity sales in 2020â2029; 40% of electricity sales in 2030â2039; 80% of electricity sales in 2040â2049). Target phase-in can be implemented in different approaches, as shown in Figure 4 . Each of these approaches has different implications for how individual source types might be affected, though actual outcomes would be influenced by other factors such as future technology costs and electricity demand. Linear phase-in would tend to benefit existing sources and mature technologies with relatively short development timelines, such as wind and solar. These sources could be available to generate electricity and meet near-term compliance obligations. A back-end loaded phase-in might avoid near-term electricity price increases and allow time for commercialization of new technologies, but it might not result in desired environmental results in the near term. A stepped phase-in could balance the advantages and disadvantages of the other two options. It might also lead to uneven investment patterns, with periods of relatively high project development associated with target increases followed by periods of relatively low project development during target plateau periods. The stringency of a policy indicates the changes the policy might make in generation profile compared to a business-as-usual scenario. Generally, the stringency of the policy will be positively correlated to the costs and benefits of implementing the policy, so as policy stringency increases, the costs and benefits will also increase. For example, a portfolio standard target of 50% of electricity sales by 2050 would likely cost more to implement than a target of 25% of electricity sales by 2050, all else being equal. Similarly, a portfolio standard target of 30% of electricity sales by 2030 would likely cost more to implement than a target of 30% of electricity sales by 2050. At the same time, the more stringent options (i.e., the higher target percentage or the earlier target date) could result in greater technology innovation and lower greenhouse gas emissions than the less stringent options. Another way to describe portfolio standards' stringency is the net change in generation from eligible sources. This approach acknowledges that the national electricity generation profile is currently quite diverse with many types of sources. The net change is the difference between the final requirement of the portfolio standard (i.e., the target) and the share of generation from eligible sources before the policy is implemented. Suppose a portfolio standard required 20% of generation to come from wind and solar sources by 2020. These sources contributed 9% of electricity generation in 2018, so the net change required by such a portfolio standard would be 11%. The different ways to describe portfolio standard stringency could influence public perception of it. In this example, the same target could either be described as 20% or 11%, with potentially different implications for perceived costs and benefits. Base Quantity of Electricity For portfolio standards that express compliance obligation as the percentage of electricity sales coming from clean energy sources, the base quantity is the denominator used to calculate the compliance obligation. The base quantity of electricity can determine the amount of generation from eligible sources a portfolio standard requires in absolute terms. It has been described as "perhaps the most important and least understood concept in the design of a [portfolio standard]." The base quantity could equal total electricity sales, but it need not. The base quantity could instead be a specified subset of total sales. Some portfolio standard proposals have excluded electricity generated from certain sources in the base quantity calculation (see Appendix ). Under such an approach, a utility with a compliance obligation would be incentivized to procure electricity from sources excluded from the base quantity because doing so would lower the amount of electricity from clean sources it would have to procure. To illustrate this point, consider a hypothetical portfolio standard with a 50% clean energy requirement. The compliance obligation for this portfolio standard would be expressed as If a utility sold 10 million MWh annually and the base quantity of electricity equaled the total sales, then the utility would have to procure 5 million MWh from clean energy sources. If electricity from certain sources were excluded from the base quantity, the required procurement changes. If a utility procured 1 million MWh of the 10 million MWh it sold from sources excluded from the base quantity, then the utility would have to procure 4.5 million MWh from clean energy sources. The portfolio standard, in this case, would incentivize the utility to procure electricity from both kinds of sources, namely those excluded from the base quantity and those defined as clean energy by the policy. The utility's incentive to procure electricity from sources excluded from the base quantity would generally be less than the incentive to procure electricity from clean energy sources, depending upon the cost of different energy sources and the overall portfolio standard stringency. If policymakers wanted to provide some policy support to certain sources, but less support than other sources receive, they might exclude certain sources from the base quantity calculation. A related consideration is the treatment of energy efficiency (EE) and DER (including, potentially, customer-sited energy storage). These result in reduced utility sales, so, to some extent, they are inherently included in the base quantity calculation. Utility investments that increased EE or generation from DER could also help the utility achieve compliance with a portfolio standard by reducing the amount of electricity it would have to procure from clean energy sources. For many utilities, reducing sales reduces the company's profitability, but some regulatory models are being developed and implemented in which profitability can be maintained or can increase as use of EE and DER increases. Cost Containment Mechanisms Future electricity demand, technology development, and technology costs are all uncertain. Ultimately, these uncertainties result in uncertainties around the cost to consumers of a portfolio standard, which could be an important consideration for lawmakers. To protect consumers from undesirably high electricity costs, portfolio standards can include provisions that reduce stringency in response to high costs. These various provisions are sometimes called safety valves. Safety valves need not be included in legislation, since Congress could amend a law establishing a portfolio standard in response to any concerns that developed. Including safety valves in legislation could, however, promote regulatory certainty for covered entities and consumers, because legislative action to address any concerns that might arise could potentially be a lengthy process. Another option could be for Congress to explicitly authorize an agency to implement safety valves. An alternative compliance payment (ACP) allows a utility to pay a fee in lieu of surrendering credits. The degree of cost control it might provide would depend on the level at which an ACP were set. For example, if electricity generation from eligible sources were available at 5 cents per kilowatt-hour (cents/kWh) and an ACP were 10 cents/kWh, utilities would likely procure electricity from the eligible sources instead of paying the ACP. If, however, the ACP were 3 cents/kWh, utilities would likely pay the ACP and procure electricity from ineligible sources. Use of ACP could be unlimited, or it could be limited to a certain share of overall compliance. If an ACP were included in a national portfolio standard, lawmakers would also have to decide how any collected revenue would be disbursed. One option would be to use the revenue to further desired policy goals, for example by funding greenhouse gas reduction programs or technology research and development. Another option would be to return the revenue to electricity consumers as a way of further reducing the cost impacts of a portfolio standard. Other options include treating it as general fund revenue, deficit or debt reduction, or other spending. Portfolio standards could include provisions to suspend or delay compliance with targets under certain conditions. These conditions could include compliance costs reaching a specified threshold or identification of reliability risks. Some cost containment for portfolio standards comes from the use of tradable credits to demonstrate compliance, especially if a portfolio standard allows unbundled credits. A low cost eligible source might be located outside of a utility's service territory. When utilities can use unbundled credits, they can demonstrate compliance by surrendering credits from this low cost source. The alternative, namely, disallowing tradable credits, could require utilities to procure electricity from high cost sources or could require the development of more sources than would be required to meet electricity demand, resulting in overall higher costs for consumers. One argument against unbundled credits is that they might not address concerns over localized concentrations of co-pollutants from conventional generators, known as hot spots. For example, if a utility procured electricity from an ineligible source that also emitted harmful air pollutants such as particulate matter or nitrogen dioxide, and the utility complied with the portfolio standard with credits associated with eligible sources located outside its service territory, hot spots might not be reduced to the extent they might be if unbundled credits were not allowed. Banking or borrowing could also decrease overall compliance costs. For instance, in years when utilities had access to many credits from low cost eligible sources, relative to what were required by the target, utilities might bank credits. If fewer credits were available in future years, relative to what were required by the target, a utility could surrender the banked credits, resulting in lower compliance costs. Banking could reduce a utility's exposure to volatility that can occur in electricity markets. This reduced risk can also reduce overall compliance costs, since a utility would not have to take other actions to reduce its risk exposure. To the extent that banking or borrowing could reduce the net change in generation, it might lead to reduced environmental benefits and reduced incentive for technology innovation. Alternatively, lawmakers could establish mechanisms to increase the stringency of a portfolio standard if certain thresholds were passed. Stringency could be increased by increasing the target to a higher percentage of electricity sales or moving the deadline to achieve the target to an earlier year. The trigger for such an action could be credit price, greenhouse gas emissions levels, technology development, or other thresholds. This might be one way to increase the desired benefits of a portfolio standard in cases where compliance costs were unexpectedly low. It might also create uncertainty for covered entities and potentially result in unintended consequences such as market participants avoiding actions they might otherwise take in order to avoid triggering a change in stringency. Selected Policy Considerations The previous section discussed some potential effects of different choices about design elements for a portfolio standard. A key theme in discussion of design elements is the balance between achieving policy objectives and minimizing electricity cost increases for consumers, assuming a portfolio standard were implemented. The potential effects discussed in this section might be characterized instead as the potential effect of a portfolio standard compared to business as usual. While the previous section addressed the question "How can a portfolio standard be designed?," this section addresses the question "What might happen if a portfolio standard were implemented?" Any projections of the effects of a policy on the U.S. electric power sector are subject to uncertainty around various factors. These include future economic activity, electricity demand, energy costs (e.g., natural gas prices), and technology costs. Some factors may be more strongly influenced by decisions made by foreign governments than by the federal government. For example, international demand for electricity from solar energy could lower the cost to produce solar panels, or countries with large critical mineral resources could impose export bans, increasing the cost in the United States of any technology using those minerals. Potential Economic Effects The overall effect on the American economy of a national portfolio standard would be influenced by multiple factors. Increased electricity costs could reduce economic activity, depending on the price response throughout the economy. Potential price responses are reduced electricity consumption, increased investment in efficiency measures, or reduced spending on other goods or services. Some price responses might have minimal effect on overall economic activity, for example if consumers shifted spending from electricity consumption to energy efficiency improvements. Potential economic effects might not be uniformly distributed. There could be regional differences in electricity price changes, given the geographic variability in energy resources. Utilities in regions with relatively less potential to develop eligible sources (i.e., regions in which eligible sources are relatively costlier) might buy credits from eligible generators in other regions. The cost of credits might result in higher electricity prices for customers of the utility buying credits. At the same time, customers of any utilities selling credits might see lower electricity prices. As discussed above, the ability to use unbundled credits for compliance could reduce overall compliance costs relative to the case where only bundled credits were allowed because utilities across the country could take advantage of low cost eligible sources. At the same time, unbundled credits could result in wealth transfer between different regions of the country. Policy design choices might affect any potential wealth transfer. Electricity prices already vary across the country as a result of differences in resource availability, electricity demand, and utility regulatory models. There might also be differences in cost distribution among household income levels. Generally, poorer Americans spend a larger portion of their income on electricity than wealthier Americans, so electricity cost increases could disproportionately affect them. Within the electric power sector, businesses associated with eligible sources might be positively affected while businesses associated with ineligible sources might be negatively affected. The affected businesses might be individual generators and also firms associated with their supply chains. For negatively affected businesses, the potential impacts might include loss of capital investment (sometimes referred to as stranded costs) and reduced employment. Communities surrounding a negatively affected generator might experience negative effects such as loss of tax revenue base and increased demands on social services. For positively affected businesses and communities, the opposite might be true, namely increased capital investment, increased employment, and other positive economic effects. Additionally, American businesses that develop goods or services used to comply with a portfolio standard could potentially expand into international markets, depending on whether eligible sources also experienced demand growth internationally. Depending on policy design details, local electricity market factors, and local energy resources, some existing businesses in the electric power sector could experience negligible effects of a potential national portfolio standard. Potential Environmental Effects Proponents of portfolio standards describe multiple environmental benefits, such as reduced greenhouse gas (GHG) emissions (i.e., climate change mitigation) and reduced air pollutants (i.e., improved air quality). The extent to which a portfolio standard might produce potential environmental benefits would depend in part on choices about source eligibility and stringency. Potential eligible sources vary in their GHG and air pollutant emissions, as well as other attributes such as water consumption and power density (which can affect land requirements). Implementation could affect environmental outcomes too. For example, some eligible sources might be deployable in either large-scale or small-scale installations, with differing effects on environmental factors such as land use. Some would argue these potential effects should be compared with potential effects of other energy options. A comprehensive comparison of potential environmental effects of various energy sources is beyond the scope of this report. Interaction with State Portfolio Standards The conditions under which federal law preempts state law can vary, and determination of federal preemption can be complex. Twenty-nine states, three U.S. territories, and the District of Columbia are currently implementing mandatory portfolio standards, and an additional eight states and one territory have voluntary versions. As of September 6, 2019, nine of these have targets of 100%. If Congress implemented a national portfolio standard, it could expressly preempt existing state portfolio standards. If a national portfolio standard were enacted that did not preempt state portfolio standards, utilities in states with existing portfolio standards might have to comply with both simultaneously. In practice, whichever standard had the higher stringency would determine the amount of eligible sources in a utility's portfolio. In this case, the relevant stringency could be either the required percentage of generation from eligible sources or the set of eligible sources itself. For example, some existing state portfolio standards include nuclear energy as an eligible source. If a national portfolio standard did not include nuclear energy, then a utility might be out of compliance with the federal standard even if it were in compliance with the state standard and the state and federal standard required the same amount of electricity from eligible sources. Assuming a generator were eligible for both a state and national program, a utility could procure electricity (or credits) from that generator to demonstrate compliance with both. In other words, the presence of two portfolio standards would not necessarily double the amount of procurement from eligible sources required. A utility covered under two portfolio standards might, however, face increased administrative costs associated with compliance. Although few technical barriers exist to the simultaneous operation of state and federal portfolio standards, other concerns may make this undesirable. Administrative cost burden for covered entities is one such concern. Another might be confusion for eligible sources about whether and how to receive credits for two portfolio standards. If Congress chose to preempt state programs, this could potentially disrupt project finances for recently developed or proposed sources and lead to investment losses in clean energy industries. Congress might also consider exempting utilities facing state portfolio standards of equal or greater stringency than the federal portfolio standards. Congress could also allow credits issued by states to be used for compliance with a federal program. This option would, effectively, allow a utility to use one credit to demonstrate compliance with two portfolio standards, though it could also reduce the policy outcomes relative to a utility having two distinct compliance obligations. An option included in some of the bills listed in the Appendix is to compensate utilities facing a state standard with a specified number of federal credits. Alternatively, Congress could choose not to explicitly address the question, and instead let state governments or judicial review decide whether state programs would be suspended if a national one were implemented. Interaction with Other State Energy Policies Under current law, state and local governments have authority for approving electricity generation and transmission assets. Compliance with a national portfolio standard might require new generation and transmission assets, but it is unclear to what extent state approval processes would consider national clean energy policy goals. Some stakeholders have argued that state approval processes for new electricity transmission lines, in particular, create barriers for deployment of certain electricity generation sources, especially wind. To the extent that a national portfolio standard required new transmission capacity, interest might increase in a stronger federal role in approving electricity transmission infrastructure. Congress has considered this in the past. For example, the Energy Policy Act of 2005 ( P.L. 109-58 ) authorized federal approval for some transmission infrastructure under certain conditions, though this authority has never been used. As noted in " Potential Environmental Effects " a national portfolio standard might alternatively incentivize distributed energy development or projects in other locations that might not require new transmission capacity. Some states have adopted policies to create competition among electricity generators, an effort known as deregulation or restructuring. In these states (and some portions of states), competitive electricity markets create price signals meant to, among other things, drive long-term investment decisions. Congress demonstrated support for restructuring efforts in the Energy Policy Act of 1992 ( P.L. 102-486 ). Portfolio standards require utilities to purchase electricity from sources that might be more expensive than other sources. This creates so-called out-of-market payments, sometimes characterized as subsidies, for eligible sources that could distort the operation of electricity markets. Eligible sources would still compete with each other for market share, creating some competitive pressure on prices among eligible sources. Appendix. Legislative Proposals in the 105th-116th Congresses This section lists previously introduced legislation that would have established national portfolio standards. CRS searched congress.gov using the phrases "renewable portfolio standard," "clean energy standard," "renewable energy standard," "renewable electricity standard," "renewable energy," and "clean energy," in full bill text or bill summaries for all Congresses. The earliest bill identified in this search was introduced in the 105 th Congress. Search results were refined by including only the Subject-Policy Area terms "Energy" and "Environmental Protection." Table A-1 provides selected policy design elements of the bills that would have established national portfolio standards that were identified using this search methodology. Bills are listed in order of introduction by Congress, with House bills listed first and Senate bills listed second. This table only provides information related to the bills' portfolio standards. Some of the bills in the table had multiple provisions, including some that might also affect the electric power sector, but those are not described here.	Summary:	gov_report	1,024	null	17
crs_R45878	crs_R45878_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Small businesses are owned by and employ a wide variety of entrepreneursâskilled trade technicians, medical professionals, financial consultants, technology innovators, and restaurateurs, among many others. As do large corporations, small businesses rely on loans to purchase inventory, to cover cash flow shortages that may arise from unexpected expenses or periods of inadequate income, or to expand operations. The Federal Reserve has reported that lending to small businesses declined during the Great Recession of 2007-2009. During the recession, many firms scaled down operations in anticipation of fewer sales, and lenders also tightened lending standards. A decade after the recession, evidence on whether lending to small business has increased is arguably inconclusive. Some small firms may be able to access the credit they need; however, others may still face credit constraints, and still others may be discouraged from applying for credit. Furthermore, drawing direct conclusions about small business access to credit can be difficult because available data are limited and fragmented. Congress has demonstrated an ongoing interest in small business loans (SBLs), viewing small businesses as a medium for stimulating the economy and creating jobs. Congress's interest in small business credit access generally focuses on (1) whether small businesses can secure credit from private lenders and (2) whether small businesses can obtain such credit at fair and competitive lending rates. In other words, policymakers are interested in whether market failures exist that impede small business access to credit and, if so, what policy interventions might be warranted to address those failures. Market failures, in economics and specifically in the SBL market context, refer to barriers that impede credit allocation by private lenders. For example, some lenders may be reluctant to lend to businesses with collateral assets (e.g., inventories) that are difficult to liquidate, as may be typical of some small businesses (e.g., restaurants). Under certain financial or regulatory circumstances, small loans may not generate sufficient returns to justify their origination costs, which also may be considered a market failure. In addition, market failures may exist when borrowers pay noncompetitive lending rates in excess of their default risk. Start-ups and some small businesses that provide niche products frequently must rely on mortgage or consumer credit or private equity investors rather than more traditional SBLs because lenders find it challenging to price loans for these firms, which could be another indicator of SBL market failure. Obtaining conclusive evidence on SBL market performance in terms of quantities and pricing is difficult for several reasons. First, there is no consensus definition of a small business across government and industry. Moreover, as the Federal Reserve stated, "fully comprehensive data that directly measure the financing activities of small businesses do not exist." Drawing conclusions about the availability and costs of SBLs is not possible using existing data sources, which lack information such as the size and financial characteristics of the businesses that apply for credit, the types of loan products they seek, the types of lenders to whom they applied for credit, and which credit requests were rejected and which were approved. Second, the risks small business owners take are not standardized and vary extensively across industries and locations. For this reason, determining whether SBL prices (lending rates and fees) are competitive is difficult without standardized benchmark prices that can be used to compare the relative prices of other SBLs. To address SBL market failures, Congress passed legislation to facilitate lending to small businesses that are likely to face hurdles obtaining credit. For example, the Small Business Act of 1953 (P.L. 83-163) established the Small Business Administration (SBA), which administers several types of programs to support capital access for small businesses that can demonstrate the inability to obtain credit at reasonable terms and conditions from private-sector lenders. The Community Reinvestment Act (CRA; P.L. 95-128 ) encouraged banks to address persistent unmet small business credit demands in low- and moderate-income (LMI) communities. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act; P.L. 111-203 ) required the Bureau of Consumer Financial Protection (CFPB) to collect data from small business lenders to identify the financing needs of small businesses, especially those owned by women and minorities. (The CFPB has not yet implemented this requirement.) In addition, various bills addressing the SBL market have been introduced in the 116 th Congress. For example, H.Res. 370 would express "the sense of the House of Representatives that small business owners seeking financing have fundamental rights, including transparent pricing and terms, competitive products, responsible underwriting, fair treatment from financing providers, brokers, and lead generators, inclusive credit access, and fair collection practices." H.R. 3374 would amend the Equal Credit Opportunity Act to require the collection of small business loan data related to LGBTQ-owned businesses. H.R. 1937 and S. 212 , the Indian Community Economic Enhancement Act of 2019, among other things, would require the Government Accountability Office to assess and quantify the extent to which federal loan guarantees, such as those provided by the SBA, have been used to facilitate credit access in these communities. This report examines th e difficulty of assessing and quantifying market failures in the SBL market, which consists of small business borrowers (demanders) and lenders (suppliers). It begins by reviewing various ways to define a small business, illustrating that there is no consensus definition of the demand side of the SBL market across government or industry. The focus then shifts to describing the supply sideânamely the types of lenders that lend to small businesses, as well as their lending business models and practices. The report subsequently attempts to identify credit shortages in certain SBL market segments (e.g., the market for small loans, loans for businesses with risky or unsuitable collateral, and loans for businesses in underserved communities). It also examines whether market failures associated with SBL pricing can be identified. Finally, the report concludes by briefly discussing the Dodd-Frank Act requirement that the CFPB collect data to facilitate the understanding of SBL market activity. The Demand for SBLs: Multiple Definitions of a Small Business There is no universally accepted definition of a small business. The federal government and industry define small businesses differently in different circumstances. Although factors such as annual earnings, number of employees, type of business, and market share are typically considered, determining the universe of small businesses from which to collect data is difficult without a consensus definition. If a consensus definition existed, then identifying a small business for data-collection purposes would become more feasibleâfor example, a concise question on a loan application might identify whether the business applying for the loan met certain defined factors making it a small business. Below are examples of the ways regulators, researchers, Congress, and industry have defined small businesses: The SBA defines a small business primarily by using a size standards table it compiles and updates periodically. The table lists size thresholds for various industries by either average annual receipts or number of employees. The SBA also defines small businesses differently for different SBA programs. For example, the SBA's 7(a), Certified Development Company/504, and Small Business Investment Company (SBIC) programs have alternative size standards based on tangible net worth and average net income. Academic research frequently uses a firm that has 500 employees or fewer (but does not monopolize an industry) as a proxy measure for a small business. This definition has been adopted by various federal agencies, such as the U.S. Census Bureau, the Bureau of Labor Statistics, and the Federal Reserve. In addition, some research views microbusinesses as a subset of small businesses. A common academic definition of a microbusiness is a firm with only one owner, five employees or fewer, and annual sales and assets under $250,000. Small business definitions in statute also vary. For example, the Internal Revenue Service (IRS) sets different size standards for small businesses under various tax laws. The IRS provides certain tax forms for self-employed taxpayers and small businesses with assets under $10 million. The Patient Protection and Affordable Care Act of 2010 (ACA; P.L. 111-148 ), however, defined a small business in multiple ways (e.g., fewer than 50 full-time employees to avoid ACA's employer shared responsibility provision; fewer than 25 full-time equivalent employees for tax credits, etc.). According to a Federal Deposit Insurance Corporation (FDIC) survey, small and large banks have their own definitions of a small business. Small banks (defined as banks with $10 billion or less in assets) view a small business as one in which the owner "wears many hats," referring to an owner who performs multiple tasks, perhaps because the firm is a start-up or still in its early growth stage. Large banks define small businesses more formally, in terms of annual revenues and sales. The Supply of SBLs: Background on Lenders and Industry Underwriting and Funding Practices This section provides background on small business lenders and underwriting practices. Although small businesses rely on a variety of credit sources that include personal (consumer or mortgage) credit, family, friends, and crowd-funding, they also rely on various types of financial institutions (banks and nonbanks). Financial institutions vary in how they are regulated, the business models they adopt, the types of loans they offer, and the growth stages of the small businesses they serve. These differences are all factors involved when evaluating whether shortages exist in the SBL market. Some lenders are increasingly using business credit scores to assess creditworthiness, and they may deny SBLs due to either a lack of or poor business credit history. The SBA since 2014 has also relied upon credit scores to qualify applicants for its 7(a) loan program. In 2016, the Small Business American Dream Gap Report found that many businesses failed to understand their business scores or even know that they had one. The text box below summarizes the information used to compute credit scores specifically for businesses. Types of Small Business Lenders Because banks have historically been the principal sources for commercial business lending, credit availability is frequently evaluated in terms of banking trends; however, nonbank financial institutions also engage in commercial business and industrial (C&I) lending. The Federal Reserve has reported that smaller firms are more likely than large firms to apply to nonbank lenders for credit. Credit unions have become an important source of small business loans in recent years. Likewise, nonbank fintech lenders have become an important source of credit in market segments that banks may have exited (e.g., business loans of $100,000 or less). Bank Lending to Small Businesses Because the types of SBLs made by a bank may be related to its size, this section begins with bank size definitions. Small community banks , which may be defined as having total assets of $1 billion or less, are considered a subset of the larger category of community banks; c ommunity banks may be defined as having total assets up to $10 billion. Large banks have total assets that exceed $10 billion. Community banks hold approximately 50% of outstanding SBLs (defined as the share of loans with principal amounts less than $100,000); however, the number and market share of community banks have been declining for more than a decade. Overall, the number of FDIC-insured institutions fell from a peak of 18,083 in 1986 to 5,477 in 2018. The number of institutions with less than $1 billion in assets fell from 17,514 to 4,704 during that time period, and the share of industry assets held by those banks fell from 37% to 7%. Meanwhile, the number of banks with more than $10 billion in assets rose from 38 to 138, and the share of total banking industry assets held by those banks increased from 28% to 84%. 87 The decline in community banks is meaningful because they have historically been one of the largest sources of funding for small businesses. Furthermore, some academic research suggests that, as banks grow, their enthusiasm for lending to starts-ups and small businesses may diminish. In 2015, the Federal Reserve highlighted a decline in the share of community banks' business loan portfolios with initial principal amounts under $100,000, suggesting that these banks were making fewer loans to small businesses. Credit Union Lending to Small Business Members Although some credit unions make SBLs, their commercial lending activities are limited. The Credit Union Membership Access Act of 1998 (CUMAA; P.L. 105-219 ) codified the definition of a credit union member business loan (MBL) and established a commercial lending cap, among other provisions. An MBL is any loan, line of credit, or letter of credit used for an agricultural purpose or for a commercial, corporate, or other business investment property or venture. The CUMAA limited (for one member or group of associated members) the aggregate amount of outstanding business loans to a maximum of 15% of the credit union's net worth or $100,000, whichever is greater. The CUMAA also limited the aggregate amount of MBLs made by a single credit union to the lesser of 1.75 times the credit union's actual net worth or 1.75 times the minimum net worth required to be well-capitalized. Three exceptions to the credit union aggregate MBL limit were authorized for (1) credit unions that have low-income designations or participate in the Community Development Financial Institutions program; (2) credit unions chartered for making business loans; and (3) credit unions with a history of primarily making such loans. Generally speaking, the volume of credit union MBL lending is minor in comparison to the banking system. As of September 30, 2015, for example, credit unions reportedly accounted for approximately 1.4% of the commercial lending done by the banking system. A large credit unionâone with $10 million or more in assetsâmight adopt a business lending model comparable to a small community bank or perhaps a midsize regional bank in the commercial loan market. Similar to community banks, approximately 85% of MBLs were secured by real estate in 2013, with some credit unions heavily concentrated in agricultural loans. A larger credit union (e.g., $1 billion or more in assets) could originate larger loans relative to most community banks with assets less than $1 billion. Despite competition with some banks in certain localities, the credit union system is significantly smaller than the banking system in terms of overall asset holdings and, correspondingly, has a smaller footprint in the broader commercial lending market. Marketplace (Fintech) Lending The share of SBLs originated by nonbank fintech lenders has expanded. However, whether the increase in originations reflects an increase in small business lending is unclear because not all fintechs retain their loan originations in their asset portfolios. Fintechs may generate revenues by (1) originating loans and collecting underwriting fees; (2) selling the loans to third-party investors (via adoption of a private placement funding model, discussed in the below text box "Funding Options for Lenders"); and (3) collecting loan servicing fees (from either the borrowers or investors). The fintech lending model has attained a competitive edge by streamlining and expediting the more traditional labor- and paper-intensive manual underwriting process by, for example, adopting online application submission and proprietary artificial intelligence for underwriting. For this reason, marketplace lending has been both a substitute (providing credit in some loan markets not served by banks) and a complement (via numerous bank partnerships) to the banking system. If, for example, a fintech partners with a bank and subsequently transfers (sells) its loan originations to a bank's balance sheet, the loan would be reported as a banking asset; such scenarios make it difficult to isolate fintech firms' impact in the broader SBL market. Access to Funding in Different Growth Stages This section explains the relationship between the growth stage of a small business and its access to credit. Start-ups and more established firms are likely to have different experiences obtaining business loans. In addition, underwriting requirements and the degree of loan product customization, which vary among lenders, may also be more suitable for borrowers at different stages. The text box at the end of this section summarizes some funding options for lenders that may also influence their underwriting practices and the types of loans they offer. Funding for Start-ups A firm's growth stage matters for credit access. During the initial start-up stage, small businesses typically have little collateral; their financial statements often lack sufficient histories of earnings and tax returns to meet lender requirements; and they typically do not have a performance track record during an economic downturn. As a result, lenders often find it difficult, time-consuming, and costly to determine whether a start-up is creditworthy. For this reason, start-ups often obtain funds from friends and family and drawdowns of personal savings. In addition, start-ups rely on financing from the owner's personal consumer credit products (e.g., credit cards, home equity loans) rather than a traditional commercial loan made by a financial institution. According to the Federal Reserve Small Business Credit Survey, which defines a small business as having $1 million or less in annual revenue, 42% of the small business owners surveyed used their personal credit scores to secure a loan and 45% used both their business and personal credit scores. Furthermore, having a low business credit score was reported as the number one reason why small businesses were rejected for credit, followed by an insufficient credit history. Because many small businesses rely on personal credit history and consumer credit products (rather than business credit), declines in consumer credit availability during economic downturns are also likely to affect small businesses' access to credit. Home equity credit during the 2007-2009 recession declined along with real estate collateral prices, contributing to tighter lending standards. Likewise, any consumer credit cost increase is likely to affect certain small businesses. For example, given the rise in credit card rates over the recession, small businesses that carried large debt balances over several payment cycles might have paid higher borrowing costs relative to a more conventional business loan. Hence, changes in the availability and pricing of consumer credit are likely to have similar effects on consumers and some small businesses, especially start-ups. Funding for Later-Stage Small Firms Once a firm enters into a more advanced growth stage, it may have one or more of the following attributes: a positive cash flow, more than two years of experience, a high business credit score, or achieves $1 million or more in annual revenues. Lenders can subsequently provide more mature businesses with one or more loans secured by their assets, supported by their credit and earnings histories. Accordingly, firms in later growth stages tend to have greater access to SBLs. Nevertheless, small firms still are more likely to obtain credit via relationship lending . Two prevailing commercial lending underwriting models are relationship and transactional lending . Small and community banks typically engage in relationship lending (or relationship banking), meaning that they develop close familiarity with their customers (i.e., soft information) and provide financial services within a circumscribed geographical area. Relationship lending provides a comparative advantage for pricing lending risks that are unique, infrequent, and localized. A relationship lender may also prefer being in close geographical proximity to the collateral (e.g., local real estate) borrowers used to secure their loans. The nature of the risks requires the loan underwriting process to be more labor-intensive. By contrast, large institutions typically engage in transactional lending that frequently relies on automated, statistical underwriting methodologies and large volumes. Transactional lending provides a comparative advantage for loan pricing when the borrowers face more conventional business risks (i.e., hard information, such as sales fluctuations, costs of inputs, specific industry factors, and other relevant metrics) rather than idiosyncratic risks that are difficult for an automated underwriting model to quantify. By relying on conventional financial metrics and documentation, transactional lenders do not need to be located near their borrowers to monitor their financial health. Moreover, because underwriting is more automated for these institutions, credit requests are most frequently denied because of (1) weak business performance, (2) insufficient loan collateral, and (3) having too much existing debt outstanding. A lender's underwriting model influences the way it defines a small business. As previously mentioned, community banks tend to describe small businesses as those whose owners multitask, meaning that they perform multiple large-scale tasks rather than relying on designated, full-time employees. Small businesses who face these types of challenges are unlikely to provide (in a timely manner) the metrics necessary for automated underwriting and, therefore, tend to be underwritten manually when requesting credit. For manual underwriting, small firms' credit scores are often not essential to evaluate creditworthiness and determine loan terms. Instead, relationship lending allows for more tailoring of loans (e.g., customized lending terms or repayment schedules) to small firms' idiosyncratic needs. Hence, lenders with relationship lending models are likely more well-adapted to underwrite businesses with risks that are unusual and oftentimes difficult to quantify. By contrast, large banks use metrics such as the dollar amount of annual sales revenues to categorize a small business. Automated underwriting becomes more amenable for businesses with business credit scores and the ability to provide financial documentation in a timely manner. A bank may offer an unsecured credit card loan to a firm with reliable financial performance records, thus reducing the monitoring costs associated with collateralized lending. Furthermore, firms with standardized financials can obtain more standardized (noncustomized) and competitively priced loans, which can be delivered faster. In general, the average costs to originate (and fund) loans decrease as the volume of loans or loan amounts increase. Lenders with transactional lending models can benefit more (relative to manual underwriters) from such economies of scale because their customer bases include more borrowers with standardized and quantifiable risks. Although they tend to rely on different types of credit, both start-ups and well-established firms may be highly dependent on certain lenders that specialize in underwriting loans for certain industries (e.g., maritime, breweries and distilleries, or moving). In addition, some lenders primarily engaged in transactional underwriting may still rely on relationship lending under some limited circumstances. For example, a larger firm may be willing to relax supplementary financial requirements (known as covenants) designed to reduce credit risk for borrowers with whom the firm has an ongoing relationship. This type of action may be considered a form of manual underwriting. Attempting to Identify SBL Market Failures This section attempts to find evidence of market failures that may be addressed by policy interventions. The specific areas of potential concern are (1) whether the lending industry is providing enough small loans for small businesses; (2) whether certain small businesses lack the type of collateral that lenders require to secure the loans; (3) whether the amount of credit provided in low- and moderate-income (LMI) communities is insufficient; and (4) whether the price of credit is too expensive for small businesses. Shortage of Small Loans Reviewing the number of small-sized loans may help determine if a SBL market shortage exists, assuming that (1) lenders make small-sized loans to small businesses and (2) an ideal size definition exists. The FDIC provides multiple size definitions of SBLs: loans with origination amounts less than or equal to $100,000; loans with origination amounts less than or equal to $250,000; loans to firms with gross annual revenues less than or equal to $1 million; and loans with origination amounts greater than $250,000 to firms satisfying any amenable small business definition. The FDIC's 2018 Small Business Lending Survey of 1,200 banks uses a C&I loan size limit of $1 million as a proxy for small business lending. In 2015, the Federal Reserve specifically highlighted the decline of community banks' business loans with initial principal amounts under $100,000. The current interest-rate environment, which has been at a historic low since the recent recession, may influence this outcome. In a low-interest-rate environment, even relationship lenders may have a greater incentive to increase loan sizes to generate sufficient interest income to cover the costs of providing them. Assuming that the underwriting, servicing, and compliance costs do not vary with loan size, then incurring those fixed costs for larger-sized loans, which may be more likely to generate more interest revenue, may be more economical for lenders. The retreat from the $100,000 loan market might be temporary if interest rates rise in the future. Nonetheless, denials of SBL requests because of a shift in lenders' preferences toward originating larger loans may indicate a market failure. Attempting to find a proxy for market failure by examining the availability of SBLs of $100,000 or any size threshold is challenging for the following reasons: According to the Federal Reserve's Survey of Lending Terms , at the beginning of 2017, the average C&I loan size for all domestic commercial banks (excluding U.S. branches and agencies of foreign banks) was approximately $575,000; the average business loan size at small domestic banks was approximately $123,000; and the average loan size at large domestic banks was approximately $729,000. By contrast, at the beginning of 2007 (prior to the 2007-2009 recession), the average C&I loan size for all domestic commercial banks was approximately $379,000; the average business loan size at small domestic banks was approximately $117,000; and the average loan size at large domestic banks was approximately $578,000. Despite the 51.7% increase in average C&I loan size for all domestic commercial banks, the average C&I loan size for small commercial banksâwhich hold approximately 50% of outstanding SBLsâincreased by a relatively modest 5.13%. Thus, it is not apparent that the smaller-size SBL market segment has been displaced. If lenders increase the total amount of SBLs made at $250,000 or $1 million, for example, while simultaneously making fewer loans of $100,000, then whether that outcome represents an increase or decrease in overall small business lending is subject to debate. Similarly, the FDIC noted that even the $1 million loan size limit may underestimate the amount of loans made to small firms. Some small firms (with annual revenues under $1 million) may get loans that exceed $1 million. Some SBLs may be secured by residential real estate and counted as mortgages. Conversely, the data collected may overstate SBLs to small businesses. The financial data on bank C&I loans do not report on loans made to a well-defined group of small firms. Instead, the data only report on small loans to all businesses (regardless of size), thus overstating the amount of SBLs, given that large businesses also receive loans of these sizes. The demand for $100,000 SBLs (from community banks) may have decreased. For example, technology firms, which represent many start-ups since the 2007-2009 recession, frequently do not purchase large amounts of inventory. Such firms that are able to operate out of the owners' homes may finance operations with personal savings and credit cards. Conversely, the demand for large loans may have increased . For example, some firms may determine that obtaining larger-size loans during the current low-interest-rate environment is more economical than having to reborrow at some point in the future at higher lending rates. In addition to the abovementioned issues, drawing conclusions about SBL shortages based primarily on the lending practices of community banks is premature in the absence of a comprehensive dataset that includes loans made by nonbank lenders. Fintech lenders may be filling the gap in small business lending left by a decline in community banks. Because fintech lenders generally are not required to hold capital against their portfolio loans or can fund via private placement, they may be able to take advantage of opportunities to lend to small businesses that would not generate sufficient profit margins for community banks. Loans retained in fintech lenders' portfolios or funded via private placement, however, are currently not reported to the federal banking regulators. Furthermore, businesses may have multiple loans and often seek credit from multiple lenders. In some cases, small businesses may be able to obtain credit from some lenders and not others, particularly in cases when borrowers inadvertently seek credit from lenders using incompatible underwriting models. In short, the focus on a particular loan size or particular lender type is arguably too narrow for evaluating performance in the SBL market. Collateral Eligibility for Secured Lending A market failure may exist if lenders are unwilling to provide loans backed by illiquid collateral (i.e., collateral that cannot be easily liquidated if the borrower fails to repay the loan)âan issue that may disproportionately affect certain small businesses. Banks and credit unions provide business loans via asset-based lending (ABL) guidelines that require firms to pledge assets (e.g., cash, receivables from inventory sales, inventory) as collateral for loans. For ABL purposes, federal banking regulators define a SBL as any loan to a small business (as defined by Section 3(a) of the Small Business Act of 1953 [P.L. 83-163 as amended] and implemented by the SBA) or a loan that does not exceed $2 million for commercial, corporate, business, or agricultural purposes. A bank typically provides fully collateralized short-term loans (under five years) to firms based upon their performance records (e.g., sufficient credit and earnings histories and assets), and it monitors the risks to the collateral that would need to be liquidated (sold) if the small business experienced financial distress. Similarly, credit unions can provide MBLs that comply with NCUA's ABL guidelines. Some firms' inventory, however, may not be ideal for ABL guidelines. Collateral that would be difficult to liquidate without losing too much value may not be acceptable. For example, restaurants (a common type of small business) have leases, cooking equipment (likely to resell for less than its initial sale price), and inventories of food that would not generate the income necessary to recoup losses from a loan default. Restaurants also have difficulty demonstrating the ability to repay a loan over a period of years. For this reason, lenders may not accept a restaurant's collateral as security for a loan. In response to this market failure, the SBA administers various programs to facilitate small business credit access (typically loans for up to $5 million and for 5-25 years) for financially healthy firms with collateral or inventory less likely to satisfy ABL requirements. Some borrowers that can demonstrate the ability to repay (e.g., minimum business credit score, management experience, minimum levels of cash flow, some collateral, and personal guarantees by the business owners) still may not be able to obtain affordable credit elsewhere (i.e., from other lenders), which might seem paradoxical. This may be because the firm's inventory does not turn over at a steady pace (e.g., seasonal merchandise), and a lender would face difficulty quickly liquidating the collateral if the firm became financially distressed. For a fee, the SBA may retain the credit risk of a small business loan up to a certain percentage, and the lender assumes the remaining share of credit risk to ensure incentive alignment during underwriting. SBA-guaranteed loans frequently have higher lending rates relative to ABL loans, taking into account the guarantee (and loan servicing) fees charged to borrowers to compensate the federal agency for retaining a majority of the default risk and the additional risk correlated with illiquid collateral. Following the recent recession, the SBA has reported an increase in the dollar amount of guaranteed lending over 2013-2018, which might indicate the ability to mitigate more market failures. If, however, borrowers fail to repay their loans and it is not possible to recover sufficient fees and proceeds from asset liquidations to cover the losses, then the SBA may need additional appropriations from Congress to account for the shortfall. The utility of government intervention in the form of SBA-guaranteed lending, therefore, is debatable. When borrowers are unable to obtain private-sector credit but subsequently repay their SBA loans, that outcome may suggest that a government guarantee helped correct a failure and improve SBL market performance. Conversely, when borrowers are unable to obtain private-sector credit and subsequently default on their SBA loans, that outcome suggests no market failure initially existed in the private SBL market. Monitoring loan performance is useful in distinguishing between a legitimate credit market barrier and an excessive lending risk, but such monitoring can only occur after loans have been originated and guaranteed, which underscores the difficulty of correctly identifying and effectively mitigating market failures. SBLs and the Community Reinvestment Act A market failure may exist if lenders make fewer SBLs in low- and moderate-income (LMI) areas than in higher-income areas. The Community Reinvestment Act of 1977 (CRA; P.L. 95-128 ) was designed to encourage banking institutions to meet the credit needs of their entire communities. The federal banking regulatory agenciesâthe Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currencyâcurrently implement the CRA. The regulators issue CRA credits, or points, when banks engage in qualifying activitiesâsuch as mortgage, consumer, and business lending; community investments; and low-cost services that would benefit LMI areas and entitiesâthat occur within a designated assessment area. These credits are then used to issue each bank a performance rating. The CRA requires these ratings be considered when banks apply for charters, branches, mergers, and acquisitions, among other things. Under the CRA, the banking regulators award CRA credit to certain SBLs (including small farm loans), provided these loans meet both (1) a size test and (2) a purpose test. Small businesses that receive an SBL must either (1) meet the size eligibility standards for the SBA's Certified Development Company/504 or SBIC programs or (2) have gross annual revenues of $1 million or less to qualify for CRA credit. The loans must also promote community and economic development, as explained in the federal bank regulators' guidelines, to qualify for CRA credit. Figure 1 shows the distribution of SBLs for $1 million or less that were eligible for CRA credit over the 2009-2017 period across census tracts grouped into four relative income categories as measured against median family income (MFI). For comparison, the last column shows the median percentages of total SBLs over the entire period. The median figures are as follows: 5.2% in the low-income tracts (< 50% of MFI), 16.7% in the moderate-income tracts (50% â¥ MFI < 80%), 40% in the middle-income tracts (80% â¥ MFI <120%), and 37.9% in the upper-income tracts (120% â¥ of MFI). This figure does not capture all CRA business lending because SBLs exceeding $1 million may also receive CRA credit. (In addition, the data in this figure represent a subset of lending activity that occurs in LMI tracts because large C&I loans, as well as consumer loans, may qualify for CRA credit.) Furthermore, changes in the number of SBL or CRA loans could indicate a change in the percentage of CRA credit awarded to SBLs, a change in total SBL originations, or both. Despite data limitations, the trends suggest that the share of SBLs in LMI areas has remained steady at approximately 20% for almost a decade. Whether that share can increase furtherâwhich would suggest that credit may not be accessible for small businesses located in LMI areasâis difficult to determine. For example, the demand for small business credit in LMI areas may be lower relative to higher-income areas. The number of potential businesses and lending opportunities in LMI areas may be comparatively lower if a greater percentage of small businesses locate in areas where their prospective customers would have sufficient incomes to sustain demand for the products or services they offer. In short, the data on SBLs awarded CRA credit do not provide a way to measure the demand for SBLs. There is no information on the number of businesses located in LMI areas that applied for loans and were subsequently rejected, making it difficult to conclude that a failure exists in the SBL market in LMI areas. Accordingly, Congress has called for the collection of data from small business lenders, discussed in more detail in the section entitled " CFPB Collection of Small Business Data ." Small Business Loan Pricing The pricing of SBLsâspecifically interest rates and feesâis another consideration for evaluating the small business credit market's overall performance. A small business might not seek credit if it is too expensive. A small business might determine that it cannot afford an offer for credit if more of its financial resources (e.g., net income) must be devoted to paying interest than reinvesting in operations. When loan prices are set substantially higher than the risks posed by borrowers and the costs to acquire the funds used to make the loans, the pricing is not considered competitive. In economics, a competitive price is one that multiple suppliers would offer to buyers for the same good or service. A competitive price is often the best or lowest that a buyer can find for a good or service and, therefore, can be used as a benchmark price when comparison shopping to evaluate other offers. Determining whether SBLs are competitively priced is challenging. A common market failure is imperfect information, or information asymmetry âwhen one party in a transaction has more accurate or more detailed information than the other party. This imbalance can result in inefficient outcomes. In the case of the small business credit market, the risks taken by small business owners are not standardized and vary extensively across industries and geographical locations. It is difficult for lenders to determine competitive loan pricing without sufficient comparable businesses from which to obtain reasonable estimates of expected losses and predict cash flows. Similarly, it may be difficult for small businesses to determine whether a loan offer is competitive without sufficient comparable business loans. Relationship lending, as previously discussed, can alleviate an SBL market failure that arises from the inability to price credit risks. Relationship lending allows a lender to collect more information about a borrower's financial behaviors, which may result in less stringent collateral requirements and greater access to credit at a lower price over time. Disclosure laws are another way to potentially resolve this type of market failure. In consumer credit markets, the Truth-In-Lending Act of 1968 (TILA; P.L. 90-301) requires lenders to disclose the total cost of credit to consumers in the form of an annual percentage rate (APR). TILA is designed to ensure borrowers are aware of their loan costs. For some consumer products, regulators require lenders to provide greater disclosures about product features that could result in borrowers paying excessive rates and fees, especially in cases where they are unaware of assessed penalty fees and interest-rate increases. Effective disclosures arguably mitigate the incentive for lenders to charge substantial markups above funding costs and borrowers' risks, thus resulting in lower loan prices. Although TILA applies to mortgage and consumer loans, it does not apply to business loans. For this reason, legislative proposals have been introduced in Congress to extend TILA disclosures to small firms. For example, H.R. 5660 , the Small Business Credit Card Act of 2018, would extend TILA disclosures to firms with 50 or fewer employees. Whether TILA protections for business credit would result in more competitive business loan terms is unclear. First, evidence suggests that TILA protections do not necessarily encourage consumers to shop for lower borrowing rates despite having more standardized (e.g., collateral) lending risks relative to businesses, suggesting it is unlikely TILA protections for small business would encourage them to shop around for credit. Second, some small businesses may already rely on certain types of credit to which TILA does apply. For example, some businesses obtain credit via personal credit cards and home equity loans, to which TILA disclosure requirements already apply. In addition, many lenders already disclose APRs on their business credit cards. CFPB Collection of Small Business Data The Dodd-Frank Act requires financial institutions to compile, maintain, and report information concerning credit applications made by women-owned, minority-owned, and small businesses. This data collection is intended to "facilitate enforcement of fair lending laws" and to "enable communities, governmental entities, and creditors to identify business and community development needs and opportunities of women-owned, minority-owned, and small businesses." The Dodd-Frank Act authorizes the CFPB to collect various data from financial institutions about the credit applications they receive from small businesses, including the number of the application and date it was received; the type and purpose of loan or credit applied for; the amount of credit applied for and approved; the type of action taken with regard to each application and the date of such action; the census tract of the principal place of business; the business's gross annual revenue; and the race, sex, and ethnicity of the business's principal owners. On May 10, 2017, the CFPB announced that it was seeking public comment about the small business financing market, including relevant business lending data used and maintained by financial institutions and the costs associated with the collection and reporting of data. Specifically, the CFPB requested information on five categories: "(1) small business definition, (2) data points, (3) financial institutions engaged in business lending, (4) access to credit and financial products offered to businesses, and (5) privacy." With respect to definition, the CFPB sought comment on the best definition of a small business and the burden of collecting data under that definition. In addition, the CFPB requested information on what data financial institutions should be required to collect and report, and which institutions should be exempted. The CFPB also requested feedback on product types offered to small businesses because the variety of terms and loan covenants that can be used to tailor loans, in addition to the interest rate, are part of the overall cost (price) of credit. The comment period closed on September 14, 2017. The CFPB has not yet issued a proposed rule, but it recently announced that such a rule was part of its spring 2019 regulatory agenda. Evaluating the small business lending market's overall performance (in terms of market failures) would be easier with less fragmented, more complete data. Collecting data, however, poses challenges for the CFPB and industry lenders. First, the Equal Credit Opportunity Act prohibits the collection of race and gender information, thus increasing the difficulty for the CFPB to implement a rule that would require such reporting. In addition, the collection and reporting of SBL data would likely need to be converted to a digital format. The fixed costs to implement digital reporting systems could be relatively larger for small financial institutions than for large institutions. Large institutions have more customers (to justify the initial expense) and offer a more limited range of standardized products. Depending upon the collection requirements eventually implemented, some institutions might decide to offer more standardized, less tailored financial products to reduce reporting costs. It is possible that more financial institutions may require minimum loan amounts (e.g., exit the loan market delineated as $100,000 and below) to ensure that the loans generate enough revenue to cover the costs to fund and report data. Conclusion From an economics viewpoint, the ability to evaluate the performance of various SBL market segmentsâspecifically whether (1) a small business credit shortage exists or (2) pricing for loans to small businesses is significantly above the lending risks and funding costsâis extremely challenging. Policymakers have been interested in whether market failures that impede small business access to capital exist and, if so, what policy interventions might address those market failures. However, it is difficult to discern which policy interventions would be most well-suited to addressing potential small business credit market failures without better data about the market itself. Arriving at more definitive conclusions about the availability and costs of SBLs might be possible with information such as the size and financial characteristics of the businesses that apply for loans, the types of loan products they request, the type of lenders to whom they applied, and which applications were approved and rejected. Collecting the necessary data, however, presents both legal and cost challenges. Summary:	null	96	47,860	47,862	47,862	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Small businesses are owned by and employ a wide variety of entrepreneursâskilled trade technicians, medical professionals, financial consultants, technology innovators, and restaurateurs, among many others. As do large corporations, small businesses rely on loans to purchase inventory, to cover cash flow shortages that may arise from unexpected expenses or periods of inadequate income, or to expand operations. The Federal Reserve has reported that lending to small businesses declined during the Great Recession of 2007-2009. During the recession, many firms scaled down operations in anticipation of fewer sales, and lenders also tightened lending standards. A decade after the recession, evidence on whether lending to small business has increased is arguably inconclusive. Some small firms may be able to access the credit they need; however, others may still face credit constraints, and still others may be discouraged from applying for credit. Furthermore, drawing direct conclusions about small business access to credit can be difficult because available data are limited and fragmented. Congress has demonstrated an ongoing interest in small business loans (SBLs), viewing small businesses as a medium for stimulating the economy and creating jobs. Congress's interest in small business credit access generally focuses on (1) whether small businesses can secure credit from private lenders and (2) whether small businesses can obtain such credit at fair and competitive lending rates. In other words, policymakers are interested in whether market failures exist that impede small business access to credit and, if so, what policy interventions might be warranted to address those failures. Market failures, in economics and specifically in the SBL market context, refer to barriers that impede credit allocation by private lenders. For example, some lenders may be reluctant to lend to businesses with collateral assets (e.g., inventories) that are difficult to liquidate, as may be typical of some small businesses (e.g., restaurants). Under certain financial or regulatory circumstances, small loans may not generate sufficient returns to justify their origination costs, which also may be considered a market failure. In addition, market failures may exist when borrowers pay noncompetitive lending rates in excess of their default risk. Start-ups and some small businesses that provide niche products frequently must rely on mortgage or consumer credit or private equity investors rather than more traditional SBLs because lenders find it challenging to price loans for these firms, which could be another indicator of SBL market failure. Obtaining conclusive evidence on SBL market performance in terms of quantities and pricing is difficult for several reasons. First, there is no consensus definition of a small business across government and industry. Moreover, as the Federal Reserve stated, "fully comprehensive data that directly measure the financing activities of small businesses do not exist." Drawing conclusions about the availability and costs of SBLs is not possible using existing data sources, which lack information such as the size and financial characteristics of the businesses that apply for credit, the types of loan products they seek, the types of lenders to whom they applied for credit, and which credit requests were rejected and which were approved. Second, the risks small business owners take are not standardized and vary extensively across industries and locations. For this reason, determining whether SBL prices (lending rates and fees) are competitive is difficult without standardized benchmark prices that can be used to compare the relative prices of other SBLs. To address SBL market failures, Congress passed legislation to facilitate lending to small businesses that are likely to face hurdles obtaining credit. For example, the Small Business Act of 1953 (P.L. 83-163) established the Small Business Administration (SBA), which administers several types of programs to support capital access for small businesses that can demonstrate the inability to obtain credit at reasonable terms and conditions from private-sector lenders. The Community Reinvestment Act (CRA; P.L. 95-128 ) encouraged banks to address persistent unmet small business credit demands in low- and moderate-income (LMI) communities. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act; P.L. 111-203 ) required the Bureau of Consumer Financial Protection (CFPB) to collect data from small business lenders to identify the financing needs of small businesses, especially those owned by women and minorities. (The CFPB has not yet implemented this requirement.) In addition, various bills addressing the SBL market have been introduced in the 116 th Congress. For example, H.Res. 370 would express "the sense of the House of Representatives that small business owners seeking financing have fundamental rights, including transparent pricing and terms, competitive products, responsible underwriting, fair treatment from financing providers, brokers, and lead generators, inclusive credit access, and fair collection practices." H.R. 3374 would amend the Equal Credit Opportunity Act to require the collection of small business loan data related to LGBTQ-owned businesses. H.R. 1937 and S. 212 , the Indian Community Economic Enhancement Act of 2019, among other things, would require the Government Accountability Office to assess and quantify the extent to which federal loan guarantees, such as those provided by the SBA, have been used to facilitate credit access in these communities. This report examines th e difficulty of assessing and quantifying market failures in the SBL market, which consists of small business borrowers (demanders) and lenders (suppliers). It begins by reviewing various ways to define a small business, illustrating that there is no consensus definition of the demand side of the SBL market across government or industry. The focus then shifts to describing the supply sideânamely the types of lenders that lend to small businesses, as well as their lending business models and practices. The report subsequently attempts to identify credit shortages in certain SBL market segments (e.g., the market for small loans, loans for businesses with risky or unsuitable collateral, and loans for businesses in underserved communities). It also examines whether market failures associated with SBL pricing can be identified. Finally, the report concludes by briefly discussing the Dodd-Frank Act requirement that the CFPB collect data to facilitate the understanding of SBL market activity. The Demand for SBLs: Multiple Definitions of a Small Business There is no universally accepted definition of a small business. The federal government and industry define small businesses differently in different circumstances. Although factors such as annual earnings, number of employees, type of business, and market share are typically considered, determining the universe of small businesses from which to collect data is difficult without a consensus definition. If a consensus definition existed, then identifying a small business for data-collection purposes would become more feasibleâfor example, a concise question on a loan application might identify whether the business applying for the loan met certain defined factors making it a small business. Below are examples of the ways regulators, researchers, Congress, and industry have defined small businesses: The SBA defines a small business primarily by using a size standards table it compiles and updates periodically. The table lists size thresholds for various industries by either average annual receipts or number of employees. The SBA also defines small businesses differently for different SBA programs. For example, the SBA's 7(a), Certified Development Company/504, and Small Business Investment Company (SBIC) programs have alternative size standards based on tangible net worth and average net income. Academic research frequently uses a firm that has 500 employees or fewer (but does not monopolize an industry) as a proxy measure for a small business. This definition has been adopted by various federal agencies, such as the U.S. Census Bureau, the Bureau of Labor Statistics, and the Federal Reserve. In addition, some research views microbusinesses as a subset of small businesses. A common academic definition of a microbusiness is a firm with only one owner, five employees or fewer, and annual sales and assets under $250,000. Small business definitions in statute also vary. For example, the Internal Revenue Service (IRS) sets different size standards for small businesses under various tax laws. The IRS provides certain tax forms for self-employed taxpayers and small businesses with assets under $10 million. The Patient Protection and Affordable Care Act of 2010 (ACA; P.L. 111-148 ), however, defined a small business in multiple ways (e.g., fewer than 50 full-time employees to avoid ACA's employer shared responsibility provision; fewer than 25 full-time equivalent employees for tax credits, etc.). According to a Federal Deposit Insurance Corporation (FDIC) survey, small and large banks have their own definitions of a small business. Small banks (defined as banks with $10 billion or less in assets) view a small business as one in which the owner "wears many hats," referring to an owner who performs multiple tasks, perhaps because the firm is a start-up or still in its early growth stage. Large banks define small businesses more formally, in terms of annual revenues and sales. The Supply of SBLs: Background on Lenders and Industry Underwriting and Funding Practices This section provides background on small business lenders and underwriting practices. Although small businesses rely on a variety of credit sources that include personal (consumer or mortgage) credit, family, friends, and crowd-funding, they also rely on various types of financial institutions (banks and nonbanks). Financial institutions vary in how they are regulated, the business models they adopt, the types of loans they offer, and the growth stages of the small businesses they serve. These differences are all factors involved when evaluating whether shortages exist in the SBL market. Some lenders are increasingly using business credit scores to assess creditworthiness, and they may deny SBLs due to either a lack of or poor business credit history. The SBA since 2014 has also relied upon credit scores to qualify applicants for its 7(a) loan program. In 2016, the Small Business American Dream Gap Report found that many businesses failed to understand their business scores or even know that they had one. The text box below summarizes the information used to compute credit scores specifically for businesses. Types of Small Business Lenders Because banks have historically been the principal sources for commercial business lending, credit availability is frequently evaluated in terms of banking trends; however, nonbank financial institutions also engage in commercial business and industrial (C&I) lending. The Federal Reserve has reported that smaller firms are more likely than large firms to apply to nonbank lenders for credit. Credit unions have become an important source of small business loans in recent years. Likewise, nonbank fintech lenders have become an important source of credit in market segments that banks may have exited (e.g., business loans of $100,000 or less). Bank Lending to Small Businesses Because the types of SBLs made by a bank may be related to its size, this section begins with bank size definitions. Small community banks , which may be defined as having total assets of $1 billion or less, are considered a subset of the larger category of community banks; c ommunity banks may be defined as having total assets up to $10 billion. Large banks have total assets that exceed $10 billion. Community banks hold approximately 50% of outstanding SBLs (defined as the share of loans with principal amounts less than $100,000); however, the number and market share of community banks have been declining for more than a decade. Overall, the number of FDIC-insured institutions fell from a peak of 18,083 in 1986 to 5,477 in 2018. The number of institutions with less than $1 billion in assets fell from 17,514 to 4,704 during that time period, and the share of industry assets held by those banks fell from 37% to 7%. Meanwhile, the number of banks with more than $10 billion in assets rose from 38 to 138, and the share of total banking industry assets held by those banks increased from 28% to 84%. 87 The decline in community banks is meaningful because they have historically been one of the largest sources of funding for small businesses. Furthermore, some academic research suggests that, as banks grow, their enthusiasm for lending to starts-ups and small businesses may diminish. In 2015, the Federal Reserve highlighted a decline in the share of community banks' business loan portfolios with initial principal amounts under $100,000, suggesting that these banks were making fewer loans to small businesses. Credit Union Lending to Small Business Members Although some credit unions make SBLs, their commercial lending activities are limited. The Credit Union Membership Access Act of 1998 (CUMAA; P.L. 105-219 ) codified the definition of a credit union member business loan (MBL) and established a commercial lending cap, among other provisions. An MBL is any loan, line of credit, or letter of credit used for an agricultural purpose or for a commercial, corporate, or other business investment property or venture. The CUMAA limited (for one member or group of associated members) the aggregate amount of outstanding business loans to a maximum of 15% of the credit union's net worth or $100,000, whichever is greater. The CUMAA also limited the aggregate amount of MBLs made by a single credit union to the lesser of 1.75 times the credit union's actual net worth or 1.75 times the minimum net worth required to be well-capitalized. Three exceptions to the credit union aggregate MBL limit were authorized for (1) credit unions that have low-income designations or participate in the Community Development Financial Institutions program; (2) credit unions chartered for making business loans; and (3) credit unions with a history of primarily making such loans. Generally speaking, the volume of credit union MBL lending is minor in comparison to the banking system. As of September 30, 2015, for example, credit unions reportedly accounted for approximately 1.4% of the commercial lending done by the banking system. A large credit unionâone with $10 million or more in assetsâmight adopt a business lending model comparable to a small community bank or perhaps a midsize regional bank in the commercial loan market. Similar to community banks, approximately 85% of MBLs were secured by real estate in 2013, with some credit unions heavily concentrated in agricultural loans. A larger credit union (e.g., $1 billion or more in assets) could originate larger loans relative to most community banks with assets less than $1 billion. Despite competition with some banks in certain localities, the credit union system is significantly smaller than the banking system in terms of overall asset holdings and, correspondingly, has a smaller footprint in the broader commercial lending market. Marketplace (Fintech) Lending The share of SBLs originated by nonbank fintech lenders has expanded. However, whether the increase in originations reflects an increase in small business lending is unclear because not all fintechs retain their loan originations in their asset portfolios. Fintechs may generate revenues by (1) originating loans and collecting underwriting fees; (2) selling the loans to third-party investors (via adoption of a private placement funding model, discussed in the below text box "Funding Options for Lenders"); and (3) collecting loan servicing fees (from either the borrowers or investors). The fintech lending model has attained a competitive edge by streamlining and expediting the more traditional labor- and paper-intensive manual underwriting process by, for example, adopting online application submission and proprietary artificial intelligence for underwriting. For this reason, marketplace lending has been both a substitute (providing credit in some loan markets not served by banks) and a complement (via numerous bank partnerships) to the banking system. If, for example, a fintech partners with a bank and subsequently transfers (sells) its loan originations to a bank's balance sheet, the loan would be reported as a banking asset; such scenarios make it difficult to isolate fintech firms' impact in the broader SBL market. Access to Funding in Different Growth Stages This section explains the relationship between the growth stage of a small business and its access to credit. Start-ups and more established firms are likely to have different experiences obtaining business loans. In addition, underwriting requirements and the degree of loan product customization, which vary among lenders, may also be more suitable for borrowers at different stages. The text box at the end of this section summarizes some funding options for lenders that may also influence their underwriting practices and the types of loans they offer. Funding for Start-ups A firm's growth stage matters for credit access. During the initial start-up stage, small businesses typically have little collateral; their financial statements often lack sufficient histories of earnings and tax returns to meet lender requirements; and they typically do not have a performance track record during an economic downturn. As a result, lenders often find it difficult, time-consuming, and costly to determine whether a start-up is creditworthy. For this reason, start-ups often obtain funds from friends and family and drawdowns of personal savings. In addition, start-ups rely on financing from the owner's personal consumer credit products (e.g., credit cards, home equity loans) rather than a traditional commercial loan made by a financial institution. According to the Federal Reserve Small Business Credit Survey, which defines a small business as having $1 million or less in annual revenue, 42% of the small business owners surveyed used their personal credit scores to secure a loan and 45% used both their business and personal credit scores. Furthermore, having a low business credit score was reported as the number one reason why small businesses were rejected for credit, followed by an insufficient credit history. Because many small businesses rely on personal credit history and consumer credit products (rather than business credit), declines in consumer credit availability during economic downturns are also likely to affect small businesses' access to credit. Home equity credit during the 2007-2009 recession declined along with real estate collateral prices, contributing to tighter lending standards. Likewise, any consumer credit cost increase is likely to affect certain small businesses. For example, given the rise in credit card rates over the recession, small businesses that carried large debt balances over several payment cycles might have paid higher borrowing costs relative to a more conventional business loan. Hence, changes in the availability and pricing of consumer credit are likely to have similar effects on consumers and some small businesses, especially start-ups. Funding for Later-Stage Small Firms Once a firm enters into a more advanced growth stage, it may have one or more of the following attributes: a positive cash flow, more than two years of experience, a high business credit score, or achieves $1 million or more in annual revenues. Lenders can subsequently provide more mature businesses with one or more loans secured by their assets, supported by their credit and earnings histories. Accordingly, firms in later growth stages tend to have greater access to SBLs. Nevertheless, small firms still are more likely to obtain credit via relationship lending . Two prevailing commercial lending underwriting models are relationship and transactional lending . Small and community banks typically engage in relationship lending (or relationship banking), meaning that they develop close familiarity with their customers (i.e., soft information) and provide financial services within a circumscribed geographical area. Relationship lending provides a comparative advantage for pricing lending risks that are unique, infrequent, and localized. A relationship lender may also prefer being in close geographical proximity to the collateral (e.g., local real estate) borrowers used to secure their loans. The nature of the risks requires the loan underwriting process to be more labor-intensive. By contrast, large institutions typically engage in transactional lending that frequently relies on automated, statistical underwriting methodologies and large volumes. Transactional lending provides a comparative advantage for loan pricing when the borrowers face more conventional business risks (i.e., hard information, such as sales fluctuations, costs of inputs, specific industry factors, and other relevant metrics) rather than idiosyncratic risks that are difficult for an automated underwriting model to quantify. By relying on conventional financial metrics and documentation, transactional lenders do not need to be located near their borrowers to monitor their financial health. Moreover, because underwriting is more automated for these institutions, credit requests are most frequently denied because of (1) weak business performance, (2) insufficient loan collateral, and (3) having too much existing debt outstanding. A lender's underwriting model influences the way it defines a small business. As previously mentioned, community banks tend to describe small businesses as those whose owners multitask, meaning that they perform multiple large-scale tasks rather than relying on designated, full-time employees. Small businesses who face these types of challenges are unlikely to provide (in a timely manner) the metrics necessary for automated underwriting and, therefore, tend to be underwritten manually when requesting credit. For manual underwriting, small firms' credit scores are often not essential to evaluate creditworthiness and determine loan terms. Instead, relationship lending allows for more tailoring of loans (e.g., customized lending terms or repayment schedules) to small firms' idiosyncratic needs. Hence, lenders with relationship lending models are likely more well-adapted to underwrite businesses with risks that are unusual and oftentimes difficult to quantify. By contrast, large banks use metrics such as the dollar amount of annual sales revenues to categorize a small business. Automated underwriting becomes more amenable for businesses with business credit scores and the ability to provide financial documentation in a timely manner. A bank may offer an unsecured credit card loan to a firm with reliable financial performance records, thus reducing the monitoring costs associated with collateralized lending. Furthermore, firms with standardized financials can obtain more standardized (noncustomized) and competitively priced loans, which can be delivered faster. In general, the average costs to originate (and fund) loans decrease as the volume of loans or loan amounts increase. Lenders with transactional lending models can benefit more (relative to manual underwriters) from such economies of scale because their customer bases include more borrowers with standardized and quantifiable risks. Although they tend to rely on different types of credit, both start-ups and well-established firms may be highly dependent on certain lenders that specialize in underwriting loans for certain industries (e.g., maritime, breweries and distilleries, or moving). In addition, some lenders primarily engaged in transactional underwriting may still rely on relationship lending under some limited circumstances. For example, a larger firm may be willing to relax supplementary financial requirements (known as covenants) designed to reduce credit risk for borrowers with whom the firm has an ongoing relationship. This type of action may be considered a form of manual underwriting. Attempting to Identify SBL Market Failures This section attempts to find evidence of market failures that may be addressed by policy interventions. The specific areas of potential concern are (1) whether the lending industry is providing enough small loans for small businesses; (2) whether certain small businesses lack the type of collateral that lenders require to secure the loans; (3) whether the amount of credit provided in low- and moderate-income (LMI) communities is insufficient; and (4) whether the price of credit is too expensive for small businesses. Shortage of Small Loans Reviewing the number of small-sized loans may help determine if a SBL market shortage exists, assuming that (1) lenders make small-sized loans to small businesses and (2) an ideal size definition exists. The FDIC provides multiple size definitions of SBLs: loans with origination amounts less than or equal to $100,000; loans with origination amounts less than or equal to $250,000; loans to firms with gross annual revenues less than or equal to $1 million; and loans with origination amounts greater than $250,000 to firms satisfying any amenable small business definition. The FDIC's 2018 Small Business Lending Survey of 1,200 banks uses a C&I loan size limit of $1 million as a proxy for small business lending. In 2015, the Federal Reserve specifically highlighted the decline of community banks' business loans with initial principal amounts under $100,000. The current interest-rate environment, which has been at a historic low since the recent recession, may influence this outcome. In a low-interest-rate environment, even relationship lenders may have a greater incentive to increase loan sizes to generate sufficient interest income to cover the costs of providing them. Assuming that the underwriting, servicing, and compliance costs do not vary with loan size, then incurring those fixed costs for larger-sized loans, which may be more likely to generate more interest revenue, may be more economical for lenders. The retreat from the $100,000 loan market might be temporary if interest rates rise in the future. Nonetheless, denials of SBL requests because of a shift in lenders' preferences toward originating larger loans may indicate a market failure. Attempting to find a proxy for market failure by examining the availability of SBLs of $100,000 or any size threshold is challenging for the following reasons: According to the Federal Reserve's Survey of Lending Terms , at the beginning of 2017, the average C&I loan size for all domestic commercial banks (excluding U.S. branches and agencies of foreign banks) was approximately $575,000; the average business loan size at small domestic banks was approximately $123,000; and the average loan size at large domestic banks was approximately $729,000. By contrast, at the beginning of 2007 (prior to the 2007-2009 recession), the average C&I loan size for all domestic commercial banks was approximately $379,000; the average business loan size at small domestic banks was approximately $117,000; and the average loan size at large domestic banks was approximately $578,000. Despite the 51.7% increase in average C&I loan size for all domestic commercial banks, the average C&I loan size for small commercial banksâwhich hold approximately 50% of outstanding SBLsâincreased by a relatively modest 5.13%. Thus, it is not apparent that the smaller-size SBL market segment has been displaced. If lenders increase the total amount of SBLs made at $250,000 or $1 million, for example, while simultaneously making fewer loans of $100,000, then whether that outcome represents an increase or decrease in overall small business lending is subject to debate. Similarly, the FDIC noted that even the $1 million loan size limit may underestimate the amount of loans made to small firms. Some small firms (with annual revenues under $1 million) may get loans that exceed $1 million. Some SBLs may be secured by residential real estate and counted as mortgages. Conversely, the data collected may overstate SBLs to small businesses. The financial data on bank C&I loans do not report on loans made to a well-defined group of small firms. Instead, the data only report on small loans to all businesses (regardless of size), thus overstating the amount of SBLs, given that large businesses also receive loans of these sizes. The demand for $100,000 SBLs (from community banks) may have decreased. For example, technology firms, which represent many start-ups since the 2007-2009 recession, frequently do not purchase large amounts of inventory. Such firms that are able to operate out of the owners' homes may finance operations with personal savings and credit cards. Conversely, the demand for large loans may have increased . For example, some firms may determine that obtaining larger-size loans during the current low-interest-rate environment is more economical than having to reborrow at some point in the future at higher lending rates. In addition to the abovementioned issues, drawing conclusions about SBL shortages based primarily on the lending practices of community banks is premature in the absence of a comprehensive dataset that includes loans made by nonbank lenders. Fintech lenders may be filling the gap in small business lending left by a decline in community banks. Because fintech lenders generally are not required to hold capital against their portfolio loans or can fund via private placement, they may be able to take advantage of opportunities to lend to small businesses that would not generate sufficient profit margins for community banks. Loans retained in fintech lenders' portfolios or funded via private placement, however, are currently not reported to the federal banking regulators. Furthermore, businesses may have multiple loans and often seek credit from multiple lenders. In some cases, small businesses may be able to obtain credit from some lenders and not others, particularly in cases when borrowers inadvertently seek credit from lenders using incompatible underwriting models. In short, the focus on a particular loan size or particular lender type is arguably too narrow for evaluating performance in the SBL market. Collateral Eligibility for Secured Lending A market failure may exist if lenders are unwilling to provide loans backed by illiquid collateral (i.e., collateral that cannot be easily liquidated if the borrower fails to repay the loan)âan issue that may disproportionately affect certain small businesses. Banks and credit unions provide business loans via asset-based lending (ABL) guidelines that require firms to pledge assets (e.g., cash, receivables from inventory sales, inventory) as collateral for loans. For ABL purposes, federal banking regulators define a SBL as any loan to a small business (as defined by Section 3(a) of the Small Business Act of 1953 [P.L. 83-163 as amended] and implemented by the SBA) or a loan that does not exceed $2 million for commercial, corporate, business, or agricultural purposes. A bank typically provides fully collateralized short-term loans (under five years) to firms based upon their performance records (e.g., sufficient credit and earnings histories and assets), and it monitors the risks to the collateral that would need to be liquidated (sold) if the small business experienced financial distress. Similarly, credit unions can provide MBLs that comply with NCUA's ABL guidelines. Some firms' inventory, however, may not be ideal for ABL guidelines. Collateral that would be difficult to liquidate without losing too much value may not be acceptable. For example, restaurants (a common type of small business) have leases, cooking equipment (likely to resell for less than its initial sale price), and inventories of food that would not generate the income necessary to recoup losses from a loan default. Restaurants also have difficulty demonstrating the ability to repay a loan over a period of years. For this reason, lenders may not accept a restaurant's collateral as security for a loan. In response to this market failure, the SBA administers various programs to facilitate small business credit access (typically loans for up to $5 million and for 5-25 years) for financially healthy firms with collateral or inventory less likely to satisfy ABL requirements. Some borrowers that can demonstrate the ability to repay (e.g., minimum business credit score, management experience, minimum levels of cash flow, some collateral, and personal guarantees by the business owners) still may not be able to obtain affordable credit elsewhere (i.e., from other lenders), which might seem paradoxical. This may be because the firm's inventory does not turn over at a steady pace (e.g., seasonal merchandise), and a lender would face difficulty quickly liquidating the collateral if the firm became financially distressed. For a fee, the SBA may retain the credit risk of a small business loan up to a certain percentage, and the lender assumes the remaining share of credit risk to ensure incentive alignment during underwriting. SBA-guaranteed loans frequently have higher lending rates relative to ABL loans, taking into account the guarantee (and loan servicing) fees charged to borrowers to compensate the federal agency for retaining a majority of the default risk and the additional risk correlated with illiquid collateral. Following the recent recession, the SBA has reported an increase in the dollar amount of guaranteed lending over 2013-2018, which might indicate the ability to mitigate more market failures. If, however, borrowers fail to repay their loans and it is not possible to recover sufficient fees and proceeds from asset liquidations to cover the losses, then the SBA may need additional appropriations from Congress to account for the shortfall. The utility of government intervention in the form of SBA-guaranteed lending, therefore, is debatable. When borrowers are unable to obtain private-sector credit but subsequently repay their SBA loans, that outcome may suggest that a government guarantee helped correct a failure and improve SBL market performance. Conversely, when borrowers are unable to obtain private-sector credit and subsequently default on their SBA loans, that outcome suggests no market failure initially existed in the private SBL market. Monitoring loan performance is useful in distinguishing between a legitimate credit market barrier and an excessive lending risk, but such monitoring can only occur after loans have been originated and guaranteed, which underscores the difficulty of correctly identifying and effectively mitigating market failures. SBLs and the Community Reinvestment Act A market failure may exist if lenders make fewer SBLs in low- and moderate-income (LMI) areas than in higher-income areas. The Community Reinvestment Act of 1977 (CRA; P.L. 95-128 ) was designed to encourage banking institutions to meet the credit needs of their entire communities. The federal banking regulatory agenciesâthe Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currencyâcurrently implement the CRA. The regulators issue CRA credits, or points, when banks engage in qualifying activitiesâsuch as mortgage, consumer, and business lending; community investments; and low-cost services that would benefit LMI areas and entitiesâthat occur within a designated assessment area. These credits are then used to issue each bank a performance rating. The CRA requires these ratings be considered when banks apply for charters, branches, mergers, and acquisitions, among other things. Under the CRA, the banking regulators award CRA credit to certain SBLs (including small farm loans), provided these loans meet both (1) a size test and (2) a purpose test. Small businesses that receive an SBL must either (1) meet the size eligibility standards for the SBA's Certified Development Company/504 or SBIC programs or (2) have gross annual revenues of $1 million or less to qualify for CRA credit. The loans must also promote community and economic development, as explained in the federal bank regulators' guidelines, to qualify for CRA credit. Figure 1 shows the distribution of SBLs for $1 million or less that were eligible for CRA credit over the 2009-2017 period across census tracts grouped into four relative income categories as measured against median family income (MFI). For comparison, the last column shows the median percentages of total SBLs over the entire period. The median figures are as follows: 5.2% in the low-income tracts (< 50% of MFI), 16.7% in the moderate-income tracts (50% â¥ MFI < 80%), 40% in the middle-income tracts (80% â¥ MFI <120%), and 37.9% in the upper-income tracts (120% â¥ of MFI). This figure does not capture all CRA business lending because SBLs exceeding $1 million may also receive CRA credit. (In addition, the data in this figure represent a subset of lending activity that occurs in LMI tracts because large C&I loans, as well as consumer loans, may qualify for CRA credit.) Furthermore, changes in the number of SBL or CRA loans could indicate a change in the percentage of CRA credit awarded to SBLs, a change in total SBL originations, or both. Despite data limitations, the trends suggest that the share of SBLs in LMI areas has remained steady at approximately 20% for almost a decade. Whether that share can increase furtherâwhich would suggest that credit may not be accessible for small businesses located in LMI areasâis difficult to determine. For example, the demand for small business credit in LMI areas may be lower relative to higher-income areas. The number of potential businesses and lending opportunities in LMI areas may be comparatively lower if a greater percentage of small businesses locate in areas where their prospective customers would have sufficient incomes to sustain demand for the products or services they offer. In short, the data on SBLs awarded CRA credit do not provide a way to measure the demand for SBLs. There is no information on the number of businesses located in LMI areas that applied for loans and were subsequently rejected, making it difficult to conclude that a failure exists in the SBL market in LMI areas. Accordingly, Congress has called for the collection of data from small business lenders, discussed in more detail in the section entitled " CFPB Collection of Small Business Data ." Small Business Loan Pricing The pricing of SBLsâspecifically interest rates and feesâis another consideration for evaluating the small business credit market's overall performance. A small business might not seek credit if it is too expensive. A small business might determine that it cannot afford an offer for credit if more of its financial resources (e.g., net income) must be devoted to paying interest than reinvesting in operations. When loan prices are set substantially higher than the risks posed by borrowers and the costs to acquire the funds used to make the loans, the pricing is not considered competitive. In economics, a competitive price is one that multiple suppliers would offer to buyers for the same good or service. A competitive price is often the best or lowest that a buyer can find for a good or service and, therefore, can be used as a benchmark price when comparison shopping to evaluate other offers. Determining whether SBLs are competitively priced is challenging. A common market failure is imperfect information, or information asymmetry âwhen one party in a transaction has more accurate or more detailed information than the other party. This imbalance can result in inefficient outcomes. In the case of the small business credit market, the risks taken by small business owners are not standardized and vary extensively across industries and geographical locations. It is difficult for lenders to determine competitive loan pricing without sufficient comparable businesses from which to obtain reasonable estimates of expected losses and predict cash flows. Similarly, it may be difficult for small businesses to determine whether a loan offer is competitive without sufficient comparable business loans. Relationship lending, as previously discussed, can alleviate an SBL market failure that arises from the inability to price credit risks. Relationship lending allows a lender to collect more information about a borrower's financial behaviors, which may result in less stringent collateral requirements and greater access to credit at a lower price over time. Disclosure laws are another way to potentially resolve this type of market failure. In consumer credit markets, the Truth-In-Lending Act of 1968 (TILA; P.L. 90-301) requires lenders to disclose the total cost of credit to consumers in the form of an annual percentage rate (APR). TILA is designed to ensure borrowers are aware of their loan costs. For some consumer products, regulators require lenders to provide greater disclosures about product features that could result in borrowers paying excessive rates and fees, especially in cases where they are unaware of assessed penalty fees and interest-rate increases. Effective disclosures arguably mitigate the incentive for lenders to charge substantial markups above funding costs and borrowers' risks, thus resulting in lower loan prices. Although TILA applies to mortgage and consumer loans, it does not apply to business loans. For this reason, legislative proposals have been introduced in Congress to extend TILA disclosures to small firms. For example, H.R. 5660 , the Small Business Credit Card Act of 2018, would extend TILA disclosures to firms with 50 or fewer employees. Whether TILA protections for business credit would result in more competitive business loan terms is unclear. First, evidence suggests that TILA protections do not necessarily encourage consumers to shop for lower borrowing rates despite having more standardized (e.g., collateral) lending risks relative to businesses, suggesting it is unlikely TILA protections for small business would encourage them to shop around for credit. Second, some small businesses may already rely on certain types of credit to which TILA does apply. For example, some businesses obtain credit via personal credit cards and home equity loans, to which TILA disclosure requirements already apply. In addition, many lenders already disclose APRs on their business credit cards. CFPB Collection of Small Business Data The Dodd-Frank Act requires financial institutions to compile, maintain, and report information concerning credit applications made by women-owned, minority-owned, and small businesses. This data collection is intended to "facilitate enforcement of fair lending laws" and to "enable communities, governmental entities, and creditors to identify business and community development needs and opportunities of women-owned, minority-owned, and small businesses." The Dodd-Frank Act authorizes the CFPB to collect various data from financial institutions about the credit applications they receive from small businesses, including the number of the application and date it was received; the type and purpose of loan or credit applied for; the amount of credit applied for and approved; the type of action taken with regard to each application and the date of such action; the census tract of the principal place of business; the business's gross annual revenue; and the race, sex, and ethnicity of the business's principal owners. On May 10, 2017, the CFPB announced that it was seeking public comment about the small business financing market, including relevant business lending data used and maintained by financial institutions and the costs associated with the collection and reporting of data. Specifically, the CFPB requested information on five categories: "(1) small business definition, (2) data points, (3) financial institutions engaged in business lending, (4) access to credit and financial products offered to businesses, and (5) privacy." With respect to definition, the CFPB sought comment on the best definition of a small business and the burden of collecting data under that definition. In addition, the CFPB requested information on what data financial institutions should be required to collect and report, and which institutions should be exempted. The CFPB also requested feedback on product types offered to small businesses because the variety of terms and loan covenants that can be used to tailor loans, in addition to the interest rate, are part of the overall cost (price) of credit. The comment period closed on September 14, 2017. The CFPB has not yet issued a proposed rule, but it recently announced that such a rule was part of its spring 2019 regulatory agenda. Evaluating the small business lending market's overall performance (in terms of market failures) would be easier with less fragmented, more complete data. Collecting data, however, poses challenges for the CFPB and industry lenders. First, the Equal Credit Opportunity Act prohibits the collection of race and gender information, thus increasing the difficulty for the CFPB to implement a rule that would require such reporting. In addition, the collection and reporting of SBL data would likely need to be converted to a digital format. The fixed costs to implement digital reporting systems could be relatively larger for small financial institutions than for large institutions. Large institutions have more customers (to justify the initial expense) and offer a more limited range of standardized products. Depending upon the collection requirements eventually implemented, some institutions might decide to offer more standardized, less tailored financial products to reduce reporting costs. It is possible that more financial institutions may require minimum loan amounts (e.g., exit the loan market delineated as $100,000 and below) to ensure that the loans generate enough revenue to cover the costs to fund and report data. Conclusion From an economics viewpoint, the ability to evaluate the performance of various SBL market segmentsâspecifically whether (1) a small business credit shortage exists or (2) pricing for loans to small businesses is significantly above the lending risks and funding costsâis extremely challenging. Policymakers have been interested in whether market failures that impede small business access to capital exist and, if so, what policy interventions might address those market failures. However, it is difficult to discern which policy interventions would be most well-suited to addressing potential small business credit market failures without better data about the market itself. Arriving at more definitive conclusions about the availability and costs of SBLs might be possible with information such as the size and financial characteristics of the businesses that apply for loans, the types of loan products they request, the type of lenders to whom they applied, and which applications were approved and rejected. Collecting the necessary data, however, presents both legal and cost challenges.	Summary:	gov_report	1,024	null	18
crs_R46111	crs_R46111_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Medicaid is a joint federal-state program that finances the delivery of primary and acute medical services, as well as long-term services and supports (LTSS), to a diverse low-income population. This population includes children, pregnant women, adults, individuals with disabilities, and those aged 65 and older. Medicaid is authorized under Title XIX of the Social Security Act (SSA) and financed by the federal government and the states. Federal Medicaid spending is an entitlement, with total expenditures dependent on state policy decisions and enrollees' use of services. Participation in Medicaid is voluntary, though all states, the District of Columbia, and the territories choose to participate. States design and administer their Medicaid programs based on broad federal guidelines. The federal government requires states to cover certain mandatory populations and services but allows states to cover other optional populations and services. In addition, several waiver and demonstration authorities in statute allow states to operate their Medicaid programs outside of certain federal rules. Due to this flexibility, factors such as eligibility, covered benefits, and provider payment rates vary substantially by state. At the federal level, the Centers for Medicare & Medicaid Services (CMS) within the Department of Health and Human Services (HHS) is responsible for administering Medicaid. This report focuses on Medicaid eligibility for adults aged 65 and olderâreferred to as older adultsâand adults under the age of 65 and children with disabilities. Specifically, this report examines the statutory provisions that provide Medicaid eligibility for individuals who are considered to be aged, blind, or disabled. These populations are of interest to lawmakers primarily for two reasons: (1) they are more likely to need LTSS, and (2) they account for a large share of Medicaid spending. Older adults and individuals with disabilities are more likely to need LTSS due to physical limitations, cognitive impairment, or chronic disabling health conditions. Those with LTSS needs are a diverse group that range in age from very young children to older adults. Disabilities can be wide ranging, including, for example, physical limitations, visual impairments (i.e., blindness), intellectual or developmental disabilities, cognitive and behavioral health conditions, traumatic brain injuries, and HIV/AIDS. Federal policymakers have an interest in understanding Medicaid eligibility as the program is an important source of coverage for those with long-term care needs. Medicaid provides LTSS coverage (e.g., extended nursing facility care, personal care, and other home and community-based services) that is generally not covered by Medicare or major health insurance plans offered in the private market. As the largest single payer of LTSS in the United States, Medicaid plays a key role in providing LTSS coverage. In 2016, total Medicaid LTSS spending (federal and state combined) was $154 billion, accounting for 42% of all LTSS expenditures nationally. Because many older adults and individuals with disabilities use LTSS, they tend to account for a disproportionate share of Medicaid spending, which has implications for both federal and state budgets. In FY2016, Medicaid provided health care services to about 71 million enrollees, with expenditures of approximately $538 billion (federal and state combined). Although older adults and individuals with disabilities made up only about one-quarter (23%) of all Medicaid enrollees that year, they accounted for more than half (54%) of all benefit spending. Among all Medicaid enrollees, 30% of Medicaid spending in FY2013 was on LTSS, compared with 62% among older adults (i.e., aged) and 36% among individuals with disabilities (i.e., disabled). The next section of this report provides an overview of Medicaid eligibility, followed by a summary of eligibility pathways for older adults and individuals with disabilities. The report then describes specific information about each eligibility pathway for older adults and individuals with disabilities. The Appendix includes summary tables with statutory references and general financial eligibility criteria for each of the eligibility pathways described in this report. Overview of Medicaid Eligibility Eligibility for Medicaid is determined by both federal and state law, whereby states set individual eligibility criteria within federal minimum standards. This arrangement results in substantial variability in Medicaid eligibility across states. Therefore, the ways that individuals can qualify for Medicaid reflect state policy decisions within broad federal requirements. In general, individuals qualify for Medicaid coverage by meeting the requirements of a specific eligibility pathway (sometimes referred to as an eligibility group) offered by the state. Some eligibility groups are mandatory, meaning all states with a Medicaid program must cover them. Other eligibility groups are optional, meaning states may elect to cover them. Within this framework, states may have some discretion to determine certain eligibility criteria for both mandatory and optional eligibility groups. In addition, states may apply to CMS for a waiver of federal law to expand health coverage beyond the mandatory and optional eligibility groups specified in federal statute. Eligibility Pathways An "eligibility pathway" is the federal statutory reference(s) under Title XIX of the SSA that extends Medicaid coverage to one or more groups of individuals. Each eligibility pathway specifies the group of individuals covered by the pathway (i.e., the categorical criteria), the financial requirements applicable to the group (i.e., the financial criteria), whether the pathway is mandatory or optional, and the extent of the state's discretion over the pathway's requirements. Individuals who have met the categorical and financial requirements of a given eligibility pathway and are in need of Medicaid-covered LTSS must also meet additional requirements. In general, they must demonstrate the need for such care by meeting state-based level-of-care criteria. They may also be subject to a separate set of Medicaid financial eligibility rules to receive LTSS coverage. All Medicaid applicants, regardless of their eligibility pathway, must meet federal and state requirements regarding residency, immigration status, and documentation of U.S. citizenship. Not all Medicaid enrollees have access to the same set of services. An applicant's eligibility pathway often dictates the Medicaid services that a program enrollee is entitled to (e.g., women eligible due to their pregnancy status are entitled to Medicaid pregnancy-related services). Most Medicaid beneficiaries receive services in the form of what is sometimes called "traditional" Medicaidâan array of required or optional medical assistance items and services listed in statute. However, states may furnish Medicaid in the form of alternative benefit plans (ABPs). In addition, states may also offer LTSS under traditional Medicaid or through a waiver program for individuals who meet state-based level-of-care criteria for services. Low-income older adults and individuals with disabilities may qualify for Medicaid through a number of eligibility pathways. In general, Medicaid data report the following broad categorical eligibility groups: children, adults, aged, and disabled. This report focuses on the eligibility of older adults and individuals with disabilities based on their age or disability status; that is, the pathways where the categorical criteria are being aged, blind, or disabled (sometimes referred to as "ABD" or "ABD eligibility"). Individuals who qualify for Medicaid on the basis of being blind or disabled include adults under the age of 65 as well as children. Most (but not all) ABD pathways recognize blindness as a distinct condition from other disabilities and, as such, provide separate categorical criteria for this condition. However, when reporting data on broad categorical eligibility groups, CMS includes statutorily blind individuals in the "disabled" category. Individuals with disabilities may also be eligible for Medicaid under pathways available more broadly to able-bodied children and adults for a number of reasons; for example, because they do not meet the definition of disability under an ABD eligibility pathway, have income or assets above certain limits, do not meet the state-based level-of-care criteria, or have one or more chronic condition(s) but have not developed a chronic-disabling condition. Adults under the age of 65 and children who qualify for Medicaid on the basis of a reason other than being blind or disabled are classified by CMS as "adults" and "children," respectively. Individuals applying for Medicaid may be eligible for the program through more than one pathway. In this situation, applicants may choose the pathway that would be most beneficial to themâboth in terms of how income and sometimes assets are used to determine Medicaid eligibility, and in terms of the available services associated with each eligibility pathway. This report classifies the ABD eligibility pathways for older adults and individuals with disabilities into two broad coverage groups: (1) Supplemental Security Income (SSI)-Related Pathways and (2) Other ABD Pathways (see Table 1 ). The SSI-Related Pathways consist of mandatory and optional eligibility groups that generally meet the requirements of the federal SSI program. These groups include older adults and individuals with disabilities who are SSI eligible, are deemed to be SSI eligible, or would be SSI eligible if not for a certain SSI program rule. The Other ABD Pathways consist of optional eligibility groups that have levels of income or resources above SSI program rules. These groups generally use SSI categorical criteria to define older adults and individuals with disabilities and may use certain SSI financial criteria to determine their financial eligibility for Medicaid. Each of the specific pathways under these broad coverage groups are described in more detail below. Table A-1 in the Appendix lists the statutory references and certain eligibility criteria for each Medicaid ABD eligibility pathway. Categorical Eligibility Criteria Medicaid categorical eligibility criteria are the characteristics that define the population qualifying for Medicaid coverage under a particular eligibility pathway; in other words, the nonfinancial requirements that an individual must meet to be considered eligible under an eligibility group. Medicaid covers several broad coverage groups, including children, pregnant women, adults, individuals with disabilities, and individuals aged 65 and older (i.e., aged). Each of these broad coverage groups includes a number of distinct Medicaid eligibility pathways. Historically, Medicaid eligibility was limited to poor families with dependent children who received cash assistance under the former Aid to Families with Dependent Children (AFDC) program, as well as poor aged, blind, or disabled individuals who received cash assistance under the SSI program. Medicaid eligibility rules reflected these historical program linkagesâboth in terms of the categories of individuals who were served, and because the financial eligibility rules were generally based on the most closely related social program for the group involved (e.g., AFDC program rules for low-income families with dependent children and pregnant women, and SSI program rules for aged, blind, or disabled individuals). Over time, Medicaid eligibility has expanded to allow states to extend coverage to individuals whose eligibility is not based on the receipt of cash assistance, including the most recent addition of the ACA Medicaid expansion population (i.e., individuals under the age of 65 with income up to 133% of the federal poverty level). Moreover, Medicaid's financial eligibility rules have been modified over time for certain groups. Financial Eligibility Criteria Medicaid is a means-tested program that is limited to those with financial need. However, the criteria used to determine financial eligibilityâincome and, sometimes, resource (i.e., asset) testsâvary by eligibility group. These income and resource tests are expressed separately as an income standard and a resource standard . The income standard is expressed as a dollar amount or as a share of the federal poverty level (FPL). The resource standard is expressed as a dollar amount. The ways in which income and resources are counted for the purposes of applying the respective standard are referred to as the income - counting methodology and resource - counting methodology (see text box "Medicaid Financial Criteria: Terminology"). Under the income-counting methodology, certain types of income may be disregarded before comparing a person's (or household's) income against the income standard, enabling individuals with higher amounts of gross income to meet the income standard and qualify for Medicaid. Similarly, certain rules determine how an applicant's resources (i.e., assets) are counted before they are compared to the specified resource standard. For most eligibility groupsânonelderly and nondisabled individuals, children under the age of 18, and adults and pregnant women under the age of 65âthe financial criteria used to determine Medicaid eligibility are based on Modified Adjusted Gross Income (MAGI) income-counting rules. No resource or asset test is used to determine Medicaid financial eligibility for MAGI-eligible individuals. Although MAGI applies to most Medicaid eligible populations, certain populations (e.g., older adults and individuals with disabilities) are statutorily exempt from MAGI income-counting rules. Instead, Medicaid financial eligibility for MAGI-exempted populations is based on the income-counting rules that match the most closely related social program for the group involved (e.g., SSI program rules for the aged, blind, or disabled eligibility groups). Thus, SSI program rules form the foundation of Medicaid eligibility for older adults and individuals with disabilities under mandatory and optional eligibility pathways and include both an income and a resource or asset test (see the next section for more information on SSI rules). However, under optional SSI-Related and Other ABD eligibility pathways, states may modify SSI program rules when determining income- and resource-counting methodologies. For example, some optional eligibility pathways allow states to choose their own income- or resource-counting methodology. Other eligibility pathways allow states to use Section 1902(r)(2) of the SSA, which lets them choose more liberal income- or resource-counting methodologies than those under the SSI program. Thus, for certain optional eligibility pathways, a state can choose to include or disregard certain sources of income or resources, in part or in whole, when determining whether an applicant meets the income or resource standards for that optional eligibility pathway. (See Table A-2 in the Appendix , which lists the financial eligibility criteriaâincome standard and counting methodologies and resource standard and counting methodologiesâfor each Medicaid eligibility pathway identified in this report.) In addition, state Medicaid programs are required to establish an Asset Verification System (AVS) that meets certain minimum requirements to determine and re-determine Medicaid eligibility for aged, blind, or disabled Medicaid applicants and enrollees. Further discussion of AVS is beyond the scope of this report. Medicaid Eligibility and SSI Program Rules SSI program rules form the foundation of Medicaid categorical and financial eligibility criteria for older adults and individuals with disabilities. Medicaid generally uses SSI categorical criteria to define the ABD populations. In addition, Medicaid often uses or adapts SSI's financial standards and counting methodologies to specify the financial eligibility requirements applicable to the SSI-Related Pathways and the Other ABD Pathways. Thus, understanding SSI program rules is important to understanding Medicaid eligibility rules for older adults and individuals with disabilities. SSI is a federal assistance program authorized under Title XVI of the SSA that provides monthly cash payments to aged, blind, or disabled individuals who have limited income and resources. SSI is intended to provide a guaranteed minimum income to adults who have difficulty covering their basic living expenses due to age or disability and who have little or no Social Security or other income. It is also designed to supplement the support and maintenance of needy children under the age of 18 who have severe disabilities. Unlike Medicaid, SSI eligibility requirements and benefit levels are based on nationally uniform standards. SSI is administered by the Social Security Administration but is not part of the Old Age, Survivors, and Disability Insurance program, commonly known as Social Security. The following sections provide a brief overview of SSI's categorical and financial eligibility criteria. For more information on these and other SSI criteria, see CRS Report R44948, Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI): Eligibility, Benefits, and Financing . SSI Categorical Eligibility Criteria To be categorically eligible for SSI, a person must be an "aged, blind, or disabled individual," as defined in Title XVI of the SSA ( Table 2 ). The term "aged" refers to individuals aged 65 and older. The term "blind" refers to individuals of any age who have central visual acuity of 20/200 or less in the better eye with the use of a correcting lens, or a limitation in the fields of vision so that the widest diameter of the visual field subtends an angle of 20 degrees or less (i.e., tunnel vision). Adults aged 18 and older are considered "disabled" if they are unable to engage in any substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months. The Social Security Administration uses a monthly earnings standard to determine whether an individual's work activity constitutes SGA. The agency adjusts this standard annually to reflect changes in national wage levels. In 2019, the SGA earnings standard is $1,220 per month. (The SGA earnings standard is a proxy measure for total disability; it is not used to determine financial eligibility for SSI.) Adults generally qualify as disabled if they have an impairment (or combination of impairments) of such severity that they are unable to perform any kind of substantial work that exists in the national economy in significant numbers, taking into consideration their age, education, and work experience. Children under the age of 18 are considered "disabled" if they have a medically determinable physical or mental impairment that (1) results in marked and severe functional limitations and (2) can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months. Children typically qualify as disabled if they have a severe impairment (or combination of impairments) that limits their ability to engage in age-appropriate childhood activities at home, in childcare, at school, or in the community. In addition, the child's earnings must not exceed the SGA standard. The Social Security Administration periodically reevaluates blind or disabled SSI recipients to determine if they continue to meet the applicable definition of blindness or disability. In general, the Social Security Administration schedules continuing disability reviews (CDRs) of blind or disabled SSI recipients at least once every three to seven years, depending on the likelihood of medical improvement. In addition, the agency reevaluates child SSI recipients under the adult definition of disability when they attain age 18. SSI Financial Eligibility Criteria To be financially eligible for SSI, a person must have income and resources within certain limits ( Table 2 ). The SSI income standard is equal to the SSI federal benefit rate (FBR), which is the maximum monthly SSI payment available under the program. In 2019, the SSI FBR is $771 per month for an individual and $1,157 per month for a married couple if both members are SSI eligible. Expressed as a share of the federal poverty level (FPL), the SSI FBR in 2019 is about 74% of FPL for an individual and 82% of FPL for a couple. The SSI FBR is adjusted annually for inflation by the same cost-of-living adjustment (COLA) applied to Social Security benefits. The SSI resource standard is $2,000 for an individual and $3,000 for a couple. These amounts are not adjusted for inflation and have remained at their current levels since 1989. Under the SSI program, a person's income and resources are counted against the income and resource standards unless they are excluded by federal law or by the Commissioner of Social Security pursuant to discretionary authority provided in statute. The SSI income-counting methodology excludes, among other things, the first $20 per month of any income, as well as the first $65 per month of earned income plus one-half of any earnings above $65. These amounts are not adjusted for inflation and have remained in place since SSI was enacted in 1972. The SSI resource-counting methodology excludes, among other things, a person's primary residence, household goods and personal effects, one automobile used for transportation, and property essential to self-support. For an eligible individual without an eligible spouse, the SSI income- and resource-counting methodologies are generally person-based, meaning the program counts the income and resources owned or used by the individual to determine eligibility for SSI and the amount of the payment. In certain situations, however, SSI may count a portion of the income or resources of certain ineligible family members toward the eligible individual's income or resource standard. This process, known as "deeming," applies primarily to eligible children under the age of 18 who live in the same household as their ineligible parent(s) and to eligible married adults who live in the same household as their ineligible spouse. SSI deeming rules are complex and beyond the scope of this report. The Social Security Administration calculates a person's countable income and resources (i.e., gross income and resources less applicable exclusions) and then subtracts those amounts from the income and resource standards to determine financial eligibility and the amount of the cash payment (if any). Individuals with countable income and resources at or below the applicable standards are eligible for SSI. The Social Security Administration periodically reevaluates an SSI recipient's financial circumstances (i.e., income, resources, and living arrangements) to determine if the person is still eligible for SSI and receiving the correct payment amount. Automatic redeterminations are scheduled annually or once every six years, depending on the likelihood of change in a recipient's circumstances. Additional Eligibility Requirements for LTSS Coverage Medicaid enrolleesâincluding the ABD populationsâmay have long-term care needs as well. In general, to receive Medicaid LTSS coverage, enrollees must also meet state-based level-of-care eligibility criteria. In other words, they must demonstrate the need for long-term care. In addition, such individuals may be subject to a separate set of Medicaid financial eligibility rules to receive LTSS coverage. Level-of-care eligibility criteria for most Medicaid-covered LTSS specify that individuals must require care provided in a nursing facility or other institutional setting. A state's institutional level-of-care criteria, in general, are also applied to Medicaid Home and Community-Based Services (HCBS) eligibility. That is, eligibility for Medicaid LTSS, both institutional care and most HCBS, is tied to needs-based criteria that require an individual to meet an institutional level-of-care need. There is no federal definition for Medicaid institutional level-of-care, and each state defines its level-of-care criteria. To define institutional level-of-care criteria, states may use "functional" criteria, such as an individual's ability to perform certain activities of daily living (ADLs). States may also use "clinical" level-of-care criteria, such as the diagnosis of an illness, injury, disability or other medical condition; treatment and medications; and cognitive status or behavioral issues, among other criteria. Most states use a combination of functional and clinical criteria in defining the need for LTSS. Certain optional ABD eligibility pathways (as described in the section entitled " Other ABD Pathways ") are available for older adults and individuals with disabilities âSpecial Income Level, Special Home and Community-Based Waiver Group, Home and Community-Based Services (HCBS) State Plan, and Katie Beckett. These optional eligibility pathways establish eligibility to Medicaid, in general, along with Medicaid-covered LTSS for individuals who receive institutional care, or for those who need the level of care provided in an institution and receive Medicaid-covered HCBS. Medicaid enrollees in other mandatory or optional eligibility pathways may also be eligible to receive LTSS if they meet the level of care criteria. Applicants seeking Medicaid-covered LTSS are subject to a separate set of Medicaid financial eligibility rules (e.g., limits on the value of home equity and asset transfer rules). These additional financial rules are in place to ensure that program applicants apply their assets toward the cost of their care and do not divest them to gain eligibility sooner. In addition, Medicaid specifies rules for equitably allocating income and assets to non-Medicaid-covered spouses to determine LTSS coverage eligibility for nursing facility services and some HCBS. Commonly referred to as spousal impoverishment rules , these rules are intended to prevent the impoverishment of the spouse who does not need LTSS. Medicaid has another set of rules for the treatment of income after an individual is determined eligible for certain Medicaid-covered LTSS, referred to as Post-Eligibility Treatment of Income (PETI) rules. In general, eligible beneficiaries whose income exceeds specified amounts are required to apply their income toward the cost of their care. Within federal guidelines, a participant may retain a certain amount of income for personal use based on the services he or she receives. This amount varies by care setting (i.e., institutional versus HCBS). These specific financial eligibility rules for Medicaid-covered LTSS are not described in this report; for more information, see CRS Report R43506, Medicaid Financial Eligibility for Long-Term Services and Supports . In addition, most states offer Medicaid-covered LTSS under waiver programs that operate outside requirements under the Medicaid State plan. Under SSA Section 1915(c), states can cover HCBS, which includes a wide variety of nonmedical, social, and supportive services that allow individuals who require an institutional level of care to live independently in the community. SSA Section 1915(c) authorizes the HHS Secretary to waive requirements regarding comparability of services and offering services statewide (i.e., referred to as statewideness). In addition, states may waive certain income and resource rules applicable to persons in the community, so that a spouse's or parent's income (and, to some extent, resources) are not considered available to the applicant for the purposes of determining Medicaid financial eligibility. States may use Section 1915(c) concurrently with other waiver authorities. For example, states may combine Section 1915(b) and 1915(c) authorities to offer mandatory managed care for HCBS. States may also limit or cap program enrollment in the waiver. For each Section 1915(c) waiver program, states must identify the Medicaid eligibility groups receiving waiver services from those groups already covered under the Medicaid State plan. In doing so, states may include both mandatory and optional groups. To expand LTSS coverage, states may use Section 1115 of the SSA to waive certain state plan requirements. States have used Section 1115 waivers to expand eligibility to groups beyond those the statute allows, to cap program enrollment, and to impose waiting periods prior to enrollment. States have also used Section 1115 waiver programs to modify the income- and resource-counting rules and methodologies for specified groupsâfor example, to encourage participation in managed LTSS, and to otherwise liberalize or limit income-counting rules for specified subpopulations. Moreover, states have used Section 1115 waiver authority to modify spend-down requirements, and to modify periods of retroactive eligibility and/or periods for eligibility redeterminations, among other eligibility-related purposes. Further discussion of Medicaid eligibility under these waiver programs is beyond the scope of this report. SSI-Related Pathways SSI-Related Pathways consist of mandatory and optional eligibility groups that meet the general requirements of the SSI program. These groups include aged, blind, or disabled individuals who are SSI eligible, deemed to be SSI eligible, or would be SSI eligible if not for a certain SSI program rule. This report organizes the SSI-Related Pathways into three subgroups, each of which contains multiple eligibility pathways: (1) SSI Recipients, (2) Special Groups of Former SSI Recipients, and (3) Other SSI-Related Groups. SSI Recipients The pathways for SSI Recipients extend Medicaid coverage to individuals who are enrolled in the SSI program and who either receive SSI, are deemed to receive SSI, or receive only state supplementary payments (SSPs, discussed below). States are generally required to provide Medicaid coverage for SSI recipients. However, states may use more restrictive eligibility criteria than those of the SSI program if they were using such criteria in 1972. Individuals in receipt of SSI for a given month are usually eligible for Medicaid for that month. SSI recipients typically become ineligible for Medicaid whenever their cash payments are suspended or terminated. In December 2018, 8.1 million individuals received SSI or federally administered SSP. SSI Recipients in "1634 States" or "SSI Criteria States" Unless states elect the option discussed in the next section, they must provide Medicaid coverage for all SSI recipients. Most states that provide Medicaid coverage for all SSI recipients do so automatically. Section 1634 of the SSA allows states to enter into an agreement with the Social Security Administration for the agency to conduct Medicaid eligibility determinations and redeterminations for SSI recipients on the state's behalf. In these states, an SSI application is also an application for Medicaid, and an SSI redetermination is also a redetermination of Medicaid eligibility. States that choose to contract with the Social Security Administration under Section 1634 of the SSA are known as "1634 states." In 2019, 34 states and the District of Columbia provide Medicaid coverage for SSI recipients using this option (see Table 3 ). Some states that provide Medicaid coverage for all SSI recipients choose to conduct their own Medicaid eligibility determinations and redeterminations. These states use the same standards and methodologies of the SSI program to determine Medicaid eligibility but require SSI recipients to file a separate Medicaid application with the state or local Medicaid office. States that elect this option are known as "SSI criteria states." In 2019, eight states provide Medicaid coverage for SSI recipients using this option (see Table 3 ). SSI Recipients and Other ABD Individuals in "209(b) States" Under Section 1902(f) of the SSA, states have the option of applying eligibility criteria that are more restrictive than those of the SSI program in determining Medicaid eligibility for SSI recipients. However, any more restrictive eligibility criteria that are applied to SSI recipients may not be more restrictive than those contained in the state's Medicaid plan that was in effect on January 1, 1972. States that provide Medicaid coverage for only those SSI recipients who meet more restrictive eligibility criteria than SSI criteria are known as "209(b) states," after the section of the Social Security Amendments of 1972 (P.L. 92-603) that established the option. In 2019, eight states provide Medicaid coverage for SSI recipients using this option (see Table 3 ). 209(b) states apply at least one eligibility criterion that is more restrictive than SSI criteria in determining Medicaid eligibility for SSI recipients, such as a stricter definition of blindness or disability, a lower income or resource standard, a less generous methodology for counting income or resources, or some combination of those factors. For example, New Hampshire imposes a longer duration-of-impairment requirement for individuals with a disability other than blindness (48 months instead of SSI's 12-month standard), and Virginia limits ownership of property contiguous to an individual's home (i.e., land other than the lot occupied by the home) to $5,000. 209(b) states may also use eligibility criteria that are more liberal than those of the SSI program under the authority provided in Section 1902(r)(2) of the SSA; however, they must retain at least one eligibility criterion that is more restrictive than SSI criteria to remain in 209(b) status. 209(b) states are required to deduct the value of SSI and any optional state supplementary payments (discussed below) from an SSI recipient's income in determining Medicaid eligibility. They must also allow SSI recipients to "spend down" or deduct incurred medical expenses from their income to the point where they meet the applicable income standard needed for Medicaid eligibility. Because SSI program rules form the foundation of Medicaid eligibility criteria for the ABD populations, 209(b) states may apply their more restrictive eligibility criteria to most other eligibility pathways for ABD individuals, subject to the same terms and conditions discussed above. Individuals Eligible for Only Optional SSPs Some states complement federal SSI payments with optional state supplementary payments (SSPs), which are made solely with state funds. SSPs are intended to help individuals whose basic needs are not fully met by the SSI federal benefit rate (FBR). States may provide SSPs to all SSI recipients, or they may limit payments to certain individuals, such as residents of domiciliary-care facilities or blind individuals. SSP amounts, standards, and methodologies are determined by the states, pursuant to certain federal requirements. States may self-administer their SSP program (i.e., state administered SSP), or they may contract with the Social Security Administration for the agency to administer the program on the state's behalf (i.e., federally administered SSP). In 2019, 44 states and the District of Columbia provide optional SSPs to some or all SSI recipients. States have the option to provide Medicaid coverage for individuals who receive only an optional SSP. Individuals receive an optional SSP, but no SSI payment, if their countable income is at least equal to the SSI income standard but less than the state-established income standard used to determine optional SSPs. The "SSP income standard" is effectively the combined amount of the SSI FBR and the maximum applicable SSP. For example, in 2019, the SSP income standard for a disabled individual living independently in California is $931.72 per month: the SSI FBR of $771 per month plus the maximum applicable SSP of $160.72 per month. In this case, the disabled individual would receive only an optional SSP if his or her countable income were at least $771 per month but less than $931.12 per month. In general, states must apply the same standards and methodologies to individuals under this pathway that they apply to individuals receiving SSI, including any standards or methodologies that are more restrictive than those of the SSI program in the case of 209(b) states. However, 209(b) states and SSI criteria states that self-administer their SSP program may apply a more restrictive income-counting methodology to individuals under this pathway than the one they apply to individuals receiving SSI. According to the Medicaid and CHIP Payment and Access Commission (MACPAC), 43 states and the District of Columbia provide Medicaid for individuals who receive only an optional SSP. Individuals Receiving Mandatory SSPs (This pathway is closed to new enrollment and applies to relatively few people.) Section 212 of P.L. 93-66 requires nearly all states to maintain the December 1973 income levels of individuals who were transferred from the former federal-state cash assistance programs for the aged, blind, and disabled (hereinafter "former adult assistance programs") to the SSI program in January 1974. To receive federal Medicaid funding, states must provide a special payment, known as a mandatory SSP, to individuals who were converted from the former adult assistance programs to the SSI program if the individual's SSI payment plus other income from the current month is less than his or her December 1973 state grant amount plus certain other income. The amount of the mandatory SSP is the difference between the current SSI payment and the individual's December 1973 payment under the former adult assistance program. Section 13(c) of P.L. 93-233 requires states to provide Medicaid coverage for individuals who receive mandatory SSPs. Individuals with Earnings Above Certain Limits (1619[a] and 1619[b]) All states (including 209[b] states) are required to provide Medicaid coverage for individuals who are enrolled in the SSI program but have earnings above certain SSI limits. Under Section 1619(a) and 1619(b) of the SSA, individuals who would continue to be eligible to receive SSI if not for their earnings may be deemed to be receiving SSI for Medicaid eligibility purposes if they continue to work and meet certain other requirements. To qualify under the 1619 provisions, individuals must have been eligible for and received SSI for at least one month before the month the 1619 determination is made. (Adults aged 65 and older may qualify for the 1619 provisions, provided they meet the SSI definition of blindness or disability.) Individuals who live in 209(b) states must also have been eligible for Medicaid in the month immediately prior to becoming eligible for 1619 status. Section 1619(a) of the SSA provides for the continuation of cash payments for disabled SSI recipients with earnings that would otherwise disqualify them from SSI. Under this provision, disabled individuals who have earnings at or above the substantial gainful activity (SGA) standard ($1,220 per month in 2019) but whose countable income is less than the SSI income standard are eligible to receive special SSI payments in lieu of regular SSI payments. (SSI does not require blind individuals to meet the SGA standard; thus, 1619[a] does not apply to blind SSI recipients.) These 1619(a) payments are calculated in the same manner as regular SSI payments and are payable for as long as an individual performs SGA and meets all other SSI eligibility criteria. In addition to providing special payments, Section 1619(a) requires all states to provide Medicaid coverage for 1619(a) recipients on the same basis as they provide Medicaid coverage for regular SSI recipients. Section 1619(b) of the SSA requires all states to provide Medicaid coverage for blind or disabled individuals who would continue to be eligible for regular SSI payments or 1619(a) payments if not for their earnings. Under this provision, blind or disabled individuals who lose SSI eligibility because their countable income exceeds the SSI income standard (or applicable SSP income standard) due to excess earnings are deemed to be receiving SSI for Medicaid eligibility purposes. To qualify under this pathway, individuals must (1) continue to be blind or disabled, (2) meet all SSI financial eligibility requirements except for earnings, (3) need Medicaid to continue working, and (4) have earnings that are considered insufficient to provide a reasonable equivalent of the benefits that would be provided if they did not have those earnings (i.e., SSI, SSP, Medicaid, and publically funded personal or attendant care). The Social Security Administration uses an annual earnings standard to determine when 1619(b) eligibility ends. The agency calculates this standard based on the sum of the amount of gross earnings that would reduce the SSI payment (or the combined amount of the SSI payment and the SSP) to zero for an individual living independently with no other income, and the state's average annual per capita Medicaid expenditures for blind or disabled SSI recipients. The standard varies from state to state, depending on the amount of the SSP (if any) and per capita Medicaid expenditures. In 2019, the annual earnings standard for disabled 1619(b) participants ranges from $27,826 in Alabama to $66,452 in Connecticut, with the median being $36,548. If an individual's annual earnings exceed the predetermined standard, then the Social Security Administration will determine his or her eligibility using an individualized standard that takes into account the person's actual Medicaid expenditures, as well as the value of any publicly funded personal or attendant care that the individual receives from a program other than Medicaid. Special Groups of Former SSI Recipients The pathways for Special Groups of Former SSI Recipients extend Medicaid coverage to special former SSI/SSP recipients who would continue to be eligible for SSI/SSP if not for receipt of certain Social Security benefits. Special former recipients are deemed to be receiving SSI/SSP for Medicaid eligibility purposes; however, unlike 1619 participants, they no longer have a current connection to the SSI program (i.e., they have been formally terminated from the rolls). In determining Medicaid eligibility, most states must disregard the applicable Social Security benefit or increases in that benefit from the special former recipient's countable income. In most instances, 209(b) states have the option to disregard all, some, or none of the applicable Social Security benefit or increases in that benefit from the special former recipient's countable income in determining Medicaid eligibility. However, 209(b) states must provide Medicaid coverage for special former recipients on the same basis as they provide Medicaid coverage for individuals who receive SSI/SSP. Recipients of Social Security COLAs After April 1977 ("Pickle Amendment") Section 503 of P.L. 94-566 generally requires states to provide Medicaid coverage for individuals who would continue to be eligible for SSI/SSP if not for increases in their Social Security benefits due to COLAs. Individuals qualify under this pathway it they are receiving Social Security benefits, lost SSI/SSP but would still be eligible for those benefits if Social Security COLAs received since losing SSI/SSP were deducted from their income, and were eligible for and receiving SSI/SSP concurrently with Social Security for at least one month after April 1, 1977. 209(b) states may exclude all, some, or none of the Social Security benefit increases that caused ineligibility for SSI/SSP. This pathway is often known as the "Pickle Amendment" after the late Representative J.J. Pickle. Disabled Widow(er)s Receiving Benefit Increases Under P.L. 98-21 ("ARF Widow[er]s") (This pathway is closed to new enrollment and applies to relatively few people.) Social Security provides widow(er)'s benefits starting at age 60, or at age 50 if the individual is disabled and meets certain other criteria. The amount of the aged or disabled widow(er)'s benefit is based on the deceased insured worker's past earnings from covered employment, subject to a permanent reduction for each month of entitlement before the widow(er)'s full retirement age (65-67, depending on year of birth). Under P.L. 98-21 , lawmakers eliminated the additional reduction factor (ARF) for disabled widow(er)s aged 50-59, meaning their reduction penalty for claiming benefits before their full retirement age was capped at the percentage applicable to aged widow(er)s who first claim at age 60. All states (including 209[b] states) are required to provide Medicaid coverage for individuals who would continue to be eligible for SSI/SSP if not for increases in their widow(er)'s benefits due to the elimination of the ARF (known as "ARF Widow[er]s"). Individuals qualify under this pathway if they were entitled to Social Security benefits in December 1983 and received disabled widow(er)'s benefits and SSI/SSP in January 1984, lost SSI/SSP eligibility because of the elimination of the ARF, have been continuously entitled to widow(er)'s benefits since January 1984, filed for Medicaid continuation before July 1, 1988 (or a slightly later date in some cases), and would continue to be eligible for SSI/SSP if the value of the increase in disabled widow(er)'s benefits under P.L. 98-21 and any subsequent COLAs were deducted from their countable income. Disabled Adult Children Disabled adult children of retired, disabled, or deceased insured workers typically qualify for Social Security disabled adult child's (DAC) benefits if they are at least age 18 and became disabled before they attained age 22. States are generally required to provide Medicaid coverage for individuals who lose eligibility for SSI/SSP due to entitlement to or an increase in DAC benefits. Individuals qualify under this pathway if they lose eligibility for SSI/SSP due to receipt of DAC benefits on or after July 1, 1987, and would continue to be eligible for SSI/SSP if not for their entitlement to or an increase in DAC benefits. 209(b) states may exclude all, some, or none of the DAC benefit or increases in that benefit that caused ineligibility for SSI/SSP. Widow(er)s Not Entitled to Medicare Part A ("Early Widow[er]s") States are generally required to provide Medicaid coverage for individuals aged 50 to 64 who lose eligibility for SSI/SSP due to entitlement to Social Security widow(er)'s benefits but who are not yet entitled to Medicare Part A (Hospital Insurance). Individuals qualify under this pathway if they are at least age 50 but have not yet attained age 65, received SSI/SSP in the month before their widow(er)'s benefits began, are not entitled to Medicare Part A, and would continue to be eligible for SSI/SSP if not for their entitlement widow(er)'s benefits. Eligibility for Medicaid under this pathway continues until the individual becomes entitled to Medicare Part A. 209(b) states may exclude all, some, or none of the widow(er)'s benefit that caused ineligibility for SSP/SSI. Recipients of a 1972 Social Security COLA (This pathway is closed to new enrollment and applies to relatively few people.) Section 249E of P.L. 92-603 requires states to provide Medicaid coverage for individuals who would be eligible for SSI/SSP in the absence of a Social Security COLA enacted in 1972 under P.L. 92-336. Individuals qualify under this provision if they were entitled to Social Security benefits in August 1972, were receiving cash assistance under the former adult assistance programs in August 1972 (or would have been eligible for such assistance in certain instances), and would be eligible for SSI/SSP had the COLA under P.L. 92-336 not been applied to their Social Security benefits. Other SSI-Related Groups The pathways for Other SSI-Related Groups extend Medicaid coverage to certain individuals who were eligible for Medicaid just prior to SSI's start in 1974, and to aged, blind, or disabled individuals who would be eligible for SSI/SSP today if not for a certain requirement in those programs. Although these groups may have received SSI/SSP in the past, their eligibility for Medicaid under these pathways is not conditional on their prior receipt of such payments. Grandfathered 1973 Medicaid Recipients (These pathways are closed to new enrollment and apply to relatively few people.) Sections 230 to 232 of P.L. 93-66 require states to provide Medicaid to three groups that were eligible for Medicaid in December 1973: (1) essential spouses, (2) institutionalized individuals, and (3) blind or disabled individuals. Essential spouses are the spouses of cash assistance recipients under the former adult assistance programs whose needs were included in determining the amount of the cash payment to the recipient. Institutionalized individuals are inpatients of medical institutions or residents of intermediate care facilities who received cash assistance under the former adult assistance programs (or who would have been eligible for such assistance if they were not institutionalized). Blind or disabled individuals are individuals who met the state-established criteria for blindness or disability under the state's Medicaid plan in December 1973. States must provide Medicaid for these groups if they continue to meet the respective eligibility criteria that were in effect in December 1973, in addition to meeting certain other requirements. Individuals Eligible For but Not Receiving SSI/SSP States have the option to provide Medicaid coverage for aged, blind, or disabled individuals who meet the income and resource requirements for SSI/SSP but who do not receive cash payments. Individuals may be eligible for but not receiving SSI/SSP because they have not applied for benefits. According to estimates from HHS' Office of the Assistant Secretary for Planning and Evaluation, about 60% of single adults aged 18 and older who were eligible for SSI in 2015 participated in the program that year. In 209(b) states, eligibility under this pathway is determined before the deduction of any incurred medical expenses recognized under a state plan (i.e., before spend-down). Individuals Who Would be Eligible for SSI/SSP if They Were Not Institutionalized Residents of public institutions are generally ineligible for SSI. However, residents of certain medical institutions are eligible for a reduced SSI payment if more than 50% of the cost of their care is paid for by Medicaid (or in the case of a child under the age of 18, by any combination of Medicaid and private health insurance). The reduced SSI payment, known as a personal needs allowance (PNA), is used to pay for small comfort items not provided by the facility. Capped at $30 per month, or $60 per month for couples in certain situations, the PNA is not indexed to inflation and has remained at its current level since July 1988. Some states supplement the PNA (i.e., provide an SSP) for institutionalized individuals who meet certain requirements. Any countable income reduces the PNA for institutionalized individuals; however, the SSI/SSP income standard is used in determining their eligibility for the SSI program. States have the option to provide Medicaid coverage for institutionalized individuals who are ineligible for SSI/SSP because of the lower income standards used to determine eligibility for the PNA but who would be eligible for SSI/SSP if they were not institutionalized. In other words, states may provide Medicaid to individuals who reside in certain Title XIX-reimbursable institutions who have countable income at or above the PNA standard ($30 for an individual) but within the SSI/SSP income standard ($771 for an individual in 2019). Individuals Who Would be Eligible for SSI/SSP if Not for Criteria Prohibited byÂ Medicaid States are generally required to provide Medicaid coverage for aged, blind, or disabled individuals who would be eligible for SSI/SSP if not for an eligibility requirement used in those programs that is prohibited by Medicaid. For example, Section 4735 of the Balanced Budget Act of 1997 ( P.L. 105-33 ) requires states to exclude from eligibility determinations certain settlement payments made to hemophilia patients who were infected with HIV. However, federal law does not exempt such payments from being counted as income or resources under the SSI program. CMS regulations require states to provide Medicaid coverage for individuals who lost SSI eligibility because they received settlement payments. Other ABD Pathways States may extend Medicaid coverage to older adults and individuals with disabilities who have higher levels of income or resources than those permitted by SSI program rules under optional aged, blind, or disabled (ABD) eligibility pathways. In addition, some optional ABD eligibility pathways allow states to choose their own methodology for counting income and resources; others permit states to use less restrictive income- or resource-counting methodologies compared with SSI rules. As previously mentioned, certain optional eligibility pathways for older adults and individuals with disabilities (e.g., Special Income Level, Special Home and Community-Based Waiver Group, Home and Community-Based Services [HCBS] State Plan, and Katie Beckett) establish eligibility to Medicaid, in general, along with Medicaid-covered LTSS. In addition, Medicaid gives states the option to extend eligibility to individuals who "spend down" or deplete their income on medical expenses, including LTSS, to specified levels. Therefore, some individuals with higher levels of income and resources compared with those permitted under SSI rules may be Medicaid-eligible. This section describes the following optional Medicaid eligibility pathways for ABD individuals: (1) Poverty-Related; (2) Special Income Level; (3) Special Home and Community-Based Services Waiver Group; (4) Home and Community-Based Services State Plan Option; (5) Katie Beckett; (6) Buy-In Groups; and (7) Medically Needy. Poverty-Related Enacted under the Omnibus Budget Reconciliation Act of 1986 (OBRA '86; P.L. 99-509 ), the optional Poverty-Related eligibility pathway allows states to cover aged and/or disabled individuals who have incomes that are higher than SSI standards, with family income up to 100% of the federal poverty level (FPL), provided that the state also covers certain eligible pregnant women and children. Aged individuals are defined as being 65 years old and older, and disabled individuals must meet the SSI program's applicable definition of disability. States may employ a reasonable definition of a "family" for purposes of the individual's countable income. In general, states must use SSI rules in determining what income is counted or not counted. An individual's resources cannot exceed the SSI resource standard with SSI rules used in determining countable resources. However, states may use Section 1902(r)(2) of the SSA to disregard additional countable income or resources. In 2018, 24 states and the District of Columbia (DC) offered the optional Poverty-Related eligibility pathway. Seventeen states and DC had an income standard that was set at 100% of the FPL under the Poverty-Related pathway; seven maintained a more restrictive income standard than 100% of the FPL. For example, Florida's standard was 88% of the FPL, and Idaho's was 77% of the FPL. Special Income Level The optional Special Income Level eligibility pathway allows states to establish a higher income standard for Medicaid coverage of nursing facility services and other institutional services, sometimes referred to as the special income rule , or the "the 300% rule." To be eligible for Medicaid through this pathway, individuals must require care provided by a nursing facility or other medical institution for no less than 30 consecutive days, and have an income standard that does not exceed a specified levelâno greater than 300% of the SSI FBR (i.e., the maximum SSI payment), which is approximately 222% of the FPL. Only the applicant's income (i.e., no income from spouses) is counted, and all income sources are counted in determining eligibility; there are no income disregards or deductions. For individuals seeking eligibility based on being aged 65 and older, or having blindness, or disability, the SSI resource standard and resource-counting methodology are used to determine eligibility. States may also use Section 1902(r)(2) of the SSA to disregard additional income or resources. Under the Special Income Level pathway, eligibility starts on the first of the 30 days that the individual resides in an institution. Thus, Medicaid can cover all of the care an individual receives in a nursing facility. In 2018, 42 states and the District of Columbia used the Special Income Level to enable persons to qualify for Medicaid coverage of institutional care. Special Home and Community-Based Services Waiver Group The Special Home and Community-Based Services (HCBS) Waiver Group eligibility pathway allows states to extend Medicaid eligibility to individuals receiving HCBS under a waiver program who require the level of care provided by a nursing facility or other medical institution. This eligibility pathway is sometimes referred to as the "217 Group" in reference to the specific regulatory section for this group, 42 C.F.R. Section 435.217. States use the highest income and resource standard of a separate eligibility group covered by the state plan under which an individual would otherwise qualify if institutionalized. For example, states that offer the Special Income Level pathway described above can extend eligibility to waiver program participants with income up to 300% of the SSI FBR. States must use the income- and resource-counting methodologies used to determine eligibility for this same eligibility group. States may also apply Section 1902(r)(2)'s more liberal income-counting rules to this group. Home and Community-Based Services State Plan Option States may establish an independent eligibility pathway into Medicaid through the Home and Community-Based Services (HCBS) State Plan option. This option is made available by extending the required and optional Medicaid state plan services, sometimes referred to as "traditional" Medicaid services, to individuals who are also receiving a targeted package of HCBS state plan services. In general, receipt of the Medicaid HCBS State Plan option is conditional on an individual having a need for long-term care (i.e., individuals must meet certain level-of-care criteria). Unlike Section 1915(c) HCBS waiver programs, which require that eligible individuals need the level of care provided in an institution (e.g., hospital or nursing facility), the HCBS state plan option delinks this requirement so that individuals with long-term care needs are not required to meet an institutional level of care need. The HCBS State Plan option was first enacted under the Deficit Reduction Act of 2005 (DRA; P.L. 109-171 ) and amended under the ACA. The income standard for the HCBS State Plan option applies to individuals who have income no higher than 150% of the FPL. For individuals who otherwise meet the requirements for an approved waiver program, the income standard can be no higher than 300% of the SSI FBR. States may choose to cover individuals under either or both income standards. Generally, states use SSI income-counting methodologies; however, states have some discretion to apply alternative methodologies, subject to the approval of the Secretary of HHS. There are no resource standards for this eligibility group, with the exception for those individuals who seek to establish eligibility based on an approved waiver program. For these individuals, states must use the same income and resource standards and counting methodologies as applied to those individuals eligible under the applicable waiver program. States may also use Section 1902(r)(2) of the SSA to disregard additional income or resources. In 2018, the most recent year for which data are available, 15 states and the District of Columbia offered at least one Section 1915(i) HCBS State Plan option; however, only two states (Indiana and Ohio) used this state plan authority as an independent eligibility pathway to Medicaid. As another option, states may choose to provide HCBS state plan services to those who are eligible for Medicaid under one of the state's existing Medicaid eligibility pathways. Katie Beckett Enacted under the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA; P.L. 97-248 ), the Katie Beckett optional pathway provides coverage to severely disabled children whose parents' income is otherwise too high for the child to qualify for Medicaid LTSS at home. Under the Katie Beckett pathway, states may extend Medicaid coverage to disabled children who meet the applicable SSI definition of disability and who are age 18 or younger and live at home. In addition, the state must determine that (1) the child requires the level of care provided in an institution, (2) it is appropriate to provide care outside the facility, and (3) the cost of care at home is no more than institutional care. States electing this option are required to cover all disabled children who meet these criteria. States must use SSI income and resources rules to determine eligibility; however, only the child's income and resources, if any, are counted. Parents' income and resources are not counted. A child's income cannot exceed the highest income standard used to determine eligibility for any separate group under which the individual would be eligible if institutionalized. In general, states set income standards up to 300% of the SSI FBR, which is about 222% of the FPL. States may not use Section 1902(r)(2) of the SSA to use more liberal income- or resource-counting methodologies. In 2018, the most recent year for which data are available, 24 states and the District of Columbia offered the Katie Beckett pathway under their Medicaid state plan. Buy-In Groups There are several optional Medicaid Buy-In eligibility pathways for working individuals with disabilities or working families who have a child with a disability. In general, individuals eligible under Buy-In pathways would be eligible for Medicaid except for the fact that their income is higher than the income standard allowed by the SSI program under Section 1619(b) of the SSA, which varies by state. Medicaid Buy-In pathways are designed to allow disabled individuals to work and still retain their Medicaid coverage, or to use their Medicaid coverage to access wraparound services that are not covered under an employer-sponsored plan. States can also impose premiums or other types of cost-sharing requirements on eligible individuals, which can be done on a sliding scale based on income. The extent to which states impose premiums and cost-sharing varies by state. Medicaid Buy-In pathways include the BBA 97 Eligibility Group, the Basic Eligibility Group, and the Medical Improvement Group. There is also a separate Buy-In pathway for disabled children, called the Family Opportunity Act. In 2018, the most recent year for which data are available, 44 states and the District of Columbia chose to offer coverage through at least one Buy-In pathway. BBA 97 Eligibility Group Enacted under Section 4733 of the Balanced Budget Act of 1997 (BBA 97; P.L. 105-33 ), this optional pathway is available to individuals with disabilities who work and have family income below 250% of the FPL, based on the size of the family. Individuals with disabilities must meet the SSI program's applicable definition of disability. Each state determines what constitutes a "family" for the purposes of this eligibility group. Family income is determined by applying the SSI income-counting methodology. In addition to the family income requirement, the applicant's unearned income must be less than the SSI income standard. All earned income is disregarded. An individual's countable resources must be less than or equal to the SSI resource standard using the SSI resource-counting methodology. However, states may use Section 1902(r)(2) of the SSA to disregard additional income or resources. Ticket to Work Basic Eligibility Group Enacted under Section 201 of the Ticket to Work and Work Incentives Improvement Act of 1999 (TWWIIA; P.L. 106-170 ), this optional pathway is similar to the BBA 97 Eligibility Group but is available to people with higher levels of income (i.e., above 250% of the FPL). There are no federal income or resource standards for the Basic Eligibility Group; rather, states can determine the income and resource standards, including no standards, rather than using the SSI program's requirements. However, if a state chooses to establish an income and/or resource standard, SSI income- and resource-counting methodologies apply. States may use Section 1902(r)(2) of the SSA to disregard additional earned income above the SSI-earned-income disregard, including disregarding all earned income. Individuals with disabilities eligible under this pathway must be aged 16 to 64 and meet the SSI program's applicable definition of disability. Ticket to Work Medical Improvement Group The Medical Improvement Group pathway was also enacted under Section 201 of TWWIIA. For states to cover this eligibility group, they must also cover the TWWIIA Basic Eligibility Group. Individuals eligible under the Medical Improvement Group were previously eligible under the Basic Eligibility Group but lost that eligibility because they were determined to have "medically improved," meaning they no longer meet the definition of disability under the SSI or Social Security Disability Insurance (SSDI) programs but continue to have a severe medically determinable impairment. Eligible individuals must be aged 16 to 64, earn at least the federal minimum wage, and work at least 40 hours per month or be engaged in a work effort that meets certain criteria for hours of work, wages, or other measures, as defined by the state and approved by the Secretary of HHS. As with the Basic Eligibility Group, states may determine the income and resource standards, including no standards, for this pathway. Similarly, states may use Section 1902(r)(2) of the SSA to disregard additional earned income above the SSI-earned-income disregard, including disregarding all earned income. Family Opportunity Act Established under Section 6061 of the DRA, the Family Opportunity Act (FOA) optional pathway allows families with income up to 300% of the FPL to buy Medicaid coverage for their disabled child aged 18 or younger (states can exceed 300% of the FPL without federal matching funds for such coverage). When determining a child's Medicaid eligibility, states choosing this pathway use the SSI program's applicable definition of disability, as well as SSI's income-counting methodology for a family, based on its size. There is no resource standard or applicable resource-counting methodology. States may use Section 1902(r)(2) of the SSA to disregard additional earned income above the SSI-earned-income disregard. States must require certain parents of eligible children under the FOA optional coverage group to enroll in, and pay premiums for, family coverage through employer-sponsored insurance as a condition of continuing Medicaid eligibility for the child. Medically Needy The Medically Needy option is targeted toward individuals with high medical expenses who would otherwise be eligible for Medicaid except that their income exceeds the income standards for other state-covered eligibility pathways. Individuals may qualify in one of two ways: either (1) their income or resources are at or below a state established standard, or (2) they spend down their income to the state-established standard by subtracting incurred medical expenses from their income. For example, if an individual has $1,000 in monthly income and the state's income threshold is $600, then the applicant would be required to incur $400 in out-of-pocket medical expenses during a state-determined budget period before being eligible for Medicaid. Examples of medical expenses that may be deducted from income include Medicare and other health insurance premiums, deductibles and coinsurance charges, and other medical expenses included in the state's Medicaid plan or recognized under state law. For individuals who spend down to Medicaid eligibility, states select a specific time period for determining whether or not the applicant meets the spend-down obligation, often referred to as a "budget period," which generally ranges from one to six months. States that choose to offer the Medically Needy option must cover pregnant women and children under the age of 18, and may choose to extend eligibility to the aged, blind, or disabled, among other groups. The Medically Needy option allows aged and disabled individuals who need expensive institutional LTSS to qualify for Medicaid nursing facility services. However, nursing facility services are optional services that states may elect to cover for Medically Needy individuals. Under the Medically Needy option, states establish the income eligibility standard; however, it may be no higher than 133â% of the state's AFDC level in 1996. Typically, the AFDC level is lower than the income standard for SSI benefits. For example, in 2015 the median Medically Needy income standard for an individual was $483 per month, or about 49% of the FPL. States use the SSI income-counting methodology for aged, blind, or disabled individuals. States also set the resource standards within certain federal requirements. For aged, blind, or disabled individuals, the resource standard is generally the same as in the SSI program. In general, states must use SSI's applicable definition of disability when determining eligibility for the disabled eligibility group. In 2018, 32 states and the District of Columbia offered coverage to the Medically Needy. Appendix. Medicaid Eligibility Pathways That Cover Older Adults and Individuals with Disabilities Table A-1 lists selected Medicaid eligibility pathways that cover older adults and individuals with disabilities. These eligibility pathways are organized into two broad coverage groups: (1) SSI-Related Pathways and (2) Other ABD Pathways. The table includes a brief description of each pathway, the age criterion for eligibility, whether the pathway is mandatory or optional, the Social Security Act citation, and any applicable regulatory citations. Table A-2 lists the income and resource standards, as well as the counting methodology, that applies to each standard for the selected Medicaid eligibility pathways that cover older adults and individuals with disabilities. In general, standards or limits on the amount of income and resources required for eligibility are expressed in relationship to the federal poverty level (FPL) or the SSI federal benefit rate (FBR). Where applicable, the income standard is presented as a monthly dollar amount for an individual in 2019. For state-specific information on Medicaid eligibility pathways for older adults and individuals with disabilities, see the following resources: M. Musumeci, P. Chidambaram, and M. O'Malley Watts, Medicaid Financial Eligibility for Seniors and People with Disabilities: Findings from a 50-State Survey , The Kaiser Family Foundation, June 2019, https://www.kff.org/medicaid/issue-brief/medicaid-financial-eligibility-for-seniors-and-people-with-disabilities-findings-from-a-50-state-survey/ . MACPAC, MACStats: Medicaid and CHIP Data Book , Exhibit 37, pp. 109-111, December 2018, https://www.macpac.gov/wp-content/uploads/2018/12/December-2018-MACStats-Data-Book.pdf . Summary:	null	96	72,437	72,439	72,439	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Medicaid is a joint federal-state program that finances the delivery of primary and acute medical services, as well as long-term services and supports (LTSS), to a diverse low-income population. This population includes children, pregnant women, adults, individuals with disabilities, and those aged 65 and older. Medicaid is authorized under Title XIX of the Social Security Act (SSA) and financed by the federal government and the states. Federal Medicaid spending is an entitlement, with total expenditures dependent on state policy decisions and enrollees' use of services. Participation in Medicaid is voluntary, though all states, the District of Columbia, and the territories choose to participate. States design and administer their Medicaid programs based on broad federal guidelines. The federal government requires states to cover certain mandatory populations and services but allows states to cover other optional populations and services. In addition, several waiver and demonstration authorities in statute allow states to operate their Medicaid programs outside of certain federal rules. Due to this flexibility, factors such as eligibility, covered benefits, and provider payment rates vary substantially by state. At the federal level, the Centers for Medicare & Medicaid Services (CMS) within the Department of Health and Human Services (HHS) is responsible for administering Medicaid. This report focuses on Medicaid eligibility for adults aged 65 and olderâreferred to as older adultsâand adults under the age of 65 and children with disabilities. Specifically, this report examines the statutory provisions that provide Medicaid eligibility for individuals who are considered to be aged, blind, or disabled. These populations are of interest to lawmakers primarily for two reasons: (1) they are more likely to need LTSS, and (2) they account for a large share of Medicaid spending. Older adults and individuals with disabilities are more likely to need LTSS due to physical limitations, cognitive impairment, or chronic disabling health conditions. Those with LTSS needs are a diverse group that range in age from very young children to older adults. Disabilities can be wide ranging, including, for example, physical limitations, visual impairments (i.e., blindness), intellectual or developmental disabilities, cognitive and behavioral health conditions, traumatic brain injuries, and HIV/AIDS. Federal policymakers have an interest in understanding Medicaid eligibility as the program is an important source of coverage for those with long-term care needs. Medicaid provides LTSS coverage (e.g., extended nursing facility care, personal care, and other home and community-based services) that is generally not covered by Medicare or major health insurance plans offered in the private market. As the largest single payer of LTSS in the United States, Medicaid plays a key role in providing LTSS coverage. In 2016, total Medicaid LTSS spending (federal and state combined) was $154 billion, accounting for 42% of all LTSS expenditures nationally. Because many older adults and individuals with disabilities use LTSS, they tend to account for a disproportionate share of Medicaid spending, which has implications for both federal and state budgets. In FY2016, Medicaid provided health care services to about 71 million enrollees, with expenditures of approximately $538 billion (federal and state combined). Although older adults and individuals with disabilities made up only about one-quarter (23%) of all Medicaid enrollees that year, they accounted for more than half (54%) of all benefit spending. Among all Medicaid enrollees, 30% of Medicaid spending in FY2013 was on LTSS, compared with 62% among older adults (i.e., aged) and 36% among individuals with disabilities (i.e., disabled). The next section of this report provides an overview of Medicaid eligibility, followed by a summary of eligibility pathways for older adults and individuals with disabilities. The report then describes specific information about each eligibility pathway for older adults and individuals with disabilities. The Appendix includes summary tables with statutory references and general financial eligibility criteria for each of the eligibility pathways described in this report. Overview of Medicaid Eligibility Eligibility for Medicaid is determined by both federal and state law, whereby states set individual eligibility criteria within federal minimum standards. This arrangement results in substantial variability in Medicaid eligibility across states. Therefore, the ways that individuals can qualify for Medicaid reflect state policy decisions within broad federal requirements. In general, individuals qualify for Medicaid coverage by meeting the requirements of a specific eligibility pathway (sometimes referred to as an eligibility group) offered by the state. Some eligibility groups are mandatory, meaning all states with a Medicaid program must cover them. Other eligibility groups are optional, meaning states may elect to cover them. Within this framework, states may have some discretion to determine certain eligibility criteria for both mandatory and optional eligibility groups. In addition, states may apply to CMS for a waiver of federal law to expand health coverage beyond the mandatory and optional eligibility groups specified in federal statute. Eligibility Pathways An "eligibility pathway" is the federal statutory reference(s) under Title XIX of the SSA that extends Medicaid coverage to one or more groups of individuals. Each eligibility pathway specifies the group of individuals covered by the pathway (i.e., the categorical criteria), the financial requirements applicable to the group (i.e., the financial criteria), whether the pathway is mandatory or optional, and the extent of the state's discretion over the pathway's requirements. Individuals who have met the categorical and financial requirements of a given eligibility pathway and are in need of Medicaid-covered LTSS must also meet additional requirements. In general, they must demonstrate the need for such care by meeting state-based level-of-care criteria. They may also be subject to a separate set of Medicaid financial eligibility rules to receive LTSS coverage. All Medicaid applicants, regardless of their eligibility pathway, must meet federal and state requirements regarding residency, immigration status, and documentation of U.S. citizenship. Not all Medicaid enrollees have access to the same set of services. An applicant's eligibility pathway often dictates the Medicaid services that a program enrollee is entitled to (e.g., women eligible due to their pregnancy status are entitled to Medicaid pregnancy-related services). Most Medicaid beneficiaries receive services in the form of what is sometimes called "traditional" Medicaidâan array of required or optional medical assistance items and services listed in statute. However, states may furnish Medicaid in the form of alternative benefit plans (ABPs). In addition, states may also offer LTSS under traditional Medicaid or through a waiver program for individuals who meet state-based level-of-care criteria for services. Low-income older adults and individuals with disabilities may qualify for Medicaid through a number of eligibility pathways. In general, Medicaid data report the following broad categorical eligibility groups: children, adults, aged, and disabled. This report focuses on the eligibility of older adults and individuals with disabilities based on their age or disability status; that is, the pathways where the categorical criteria are being aged, blind, or disabled (sometimes referred to as "ABD" or "ABD eligibility"). Individuals who qualify for Medicaid on the basis of being blind or disabled include adults under the age of 65 as well as children. Most (but not all) ABD pathways recognize blindness as a distinct condition from other disabilities and, as such, provide separate categorical criteria for this condition. However, when reporting data on broad categorical eligibility groups, CMS includes statutorily blind individuals in the "disabled" category. Individuals with disabilities may also be eligible for Medicaid under pathways available more broadly to able-bodied children and adults for a number of reasons; for example, because they do not meet the definition of disability under an ABD eligibility pathway, have income or assets above certain limits, do not meet the state-based level-of-care criteria, or have one or more chronic condition(s) but have not developed a chronic-disabling condition. Adults under the age of 65 and children who qualify for Medicaid on the basis of a reason other than being blind or disabled are classified by CMS as "adults" and "children," respectively. Individuals applying for Medicaid may be eligible for the program through more than one pathway. In this situation, applicants may choose the pathway that would be most beneficial to themâboth in terms of how income and sometimes assets are used to determine Medicaid eligibility, and in terms of the available services associated with each eligibility pathway. This report classifies the ABD eligibility pathways for older adults and individuals with disabilities into two broad coverage groups: (1) Supplemental Security Income (SSI)-Related Pathways and (2) Other ABD Pathways (see Table 1 ). The SSI-Related Pathways consist of mandatory and optional eligibility groups that generally meet the requirements of the federal SSI program. These groups include older adults and individuals with disabilities who are SSI eligible, are deemed to be SSI eligible, or would be SSI eligible if not for a certain SSI program rule. The Other ABD Pathways consist of optional eligibility groups that have levels of income or resources above SSI program rules. These groups generally use SSI categorical criteria to define older adults and individuals with disabilities and may use certain SSI financial criteria to determine their financial eligibility for Medicaid. Each of the specific pathways under these broad coverage groups are described in more detail below. Table A-1 in the Appendix lists the statutory references and certain eligibility criteria for each Medicaid ABD eligibility pathway. Categorical Eligibility Criteria Medicaid categorical eligibility criteria are the characteristics that define the population qualifying for Medicaid coverage under a particular eligibility pathway; in other words, the nonfinancial requirements that an individual must meet to be considered eligible under an eligibility group. Medicaid covers several broad coverage groups, including children, pregnant women, adults, individuals with disabilities, and individuals aged 65 and older (i.e., aged). Each of these broad coverage groups includes a number of distinct Medicaid eligibility pathways. Historically, Medicaid eligibility was limited to poor families with dependent children who received cash assistance under the former Aid to Families with Dependent Children (AFDC) program, as well as poor aged, blind, or disabled individuals who received cash assistance under the SSI program. Medicaid eligibility rules reflected these historical program linkagesâboth in terms of the categories of individuals who were served, and because the financial eligibility rules were generally based on the most closely related social program for the group involved (e.g., AFDC program rules for low-income families with dependent children and pregnant women, and SSI program rules for aged, blind, or disabled individuals). Over time, Medicaid eligibility has expanded to allow states to extend coverage to individuals whose eligibility is not based on the receipt of cash assistance, including the most recent addition of the ACA Medicaid expansion population (i.e., individuals under the age of 65 with income up to 133% of the federal poverty level). Moreover, Medicaid's financial eligibility rules have been modified over time for certain groups. Financial Eligibility Criteria Medicaid is a means-tested program that is limited to those with financial need. However, the criteria used to determine financial eligibilityâincome and, sometimes, resource (i.e., asset) testsâvary by eligibility group. These income and resource tests are expressed separately as an income standard and a resource standard . The income standard is expressed as a dollar amount or as a share of the federal poverty level (FPL). The resource standard is expressed as a dollar amount. The ways in which income and resources are counted for the purposes of applying the respective standard are referred to as the income - counting methodology and resource - counting methodology (see text box "Medicaid Financial Criteria: Terminology"). Under the income-counting methodology, certain types of income may be disregarded before comparing a person's (or household's) income against the income standard, enabling individuals with higher amounts of gross income to meet the income standard and qualify for Medicaid. Similarly, certain rules determine how an applicant's resources (i.e., assets) are counted before they are compared to the specified resource standard. For most eligibility groupsânonelderly and nondisabled individuals, children under the age of 18, and adults and pregnant women under the age of 65âthe financial criteria used to determine Medicaid eligibility are based on Modified Adjusted Gross Income (MAGI) income-counting rules. No resource or asset test is used to determine Medicaid financial eligibility for MAGI-eligible individuals. Although MAGI applies to most Medicaid eligible populations, certain populations (e.g., older adults and individuals with disabilities) are statutorily exempt from MAGI income-counting rules. Instead, Medicaid financial eligibility for MAGI-exempted populations is based on the income-counting rules that match the most closely related social program for the group involved (e.g., SSI program rules for the aged, blind, or disabled eligibility groups). Thus, SSI program rules form the foundation of Medicaid eligibility for older adults and individuals with disabilities under mandatory and optional eligibility pathways and include both an income and a resource or asset test (see the next section for more information on SSI rules). However, under optional SSI-Related and Other ABD eligibility pathways, states may modify SSI program rules when determining income- and resource-counting methodologies. For example, some optional eligibility pathways allow states to choose their own income- or resource-counting methodology. Other eligibility pathways allow states to use Section 1902(r)(2) of the SSA, which lets them choose more liberal income- or resource-counting methodologies than those under the SSI program. Thus, for certain optional eligibility pathways, a state can choose to include or disregard certain sources of income or resources, in part or in whole, when determining whether an applicant meets the income or resource standards for that optional eligibility pathway. (See Table A-2 in the Appendix , which lists the financial eligibility criteriaâincome standard and counting methodologies and resource standard and counting methodologiesâfor each Medicaid eligibility pathway identified in this report.) In addition, state Medicaid programs are required to establish an Asset Verification System (AVS) that meets certain minimum requirements to determine and re-determine Medicaid eligibility for aged, blind, or disabled Medicaid applicants and enrollees. Further discussion of AVS is beyond the scope of this report. Medicaid Eligibility and SSI Program Rules SSI program rules form the foundation of Medicaid categorical and financial eligibility criteria for older adults and individuals with disabilities. Medicaid generally uses SSI categorical criteria to define the ABD populations. In addition, Medicaid often uses or adapts SSI's financial standards and counting methodologies to specify the financial eligibility requirements applicable to the SSI-Related Pathways and the Other ABD Pathways. Thus, understanding SSI program rules is important to understanding Medicaid eligibility rules for older adults and individuals with disabilities. SSI is a federal assistance program authorized under Title XVI of the SSA that provides monthly cash payments to aged, blind, or disabled individuals who have limited income and resources. SSI is intended to provide a guaranteed minimum income to adults who have difficulty covering their basic living expenses due to age or disability and who have little or no Social Security or other income. It is also designed to supplement the support and maintenance of needy children under the age of 18 who have severe disabilities. Unlike Medicaid, SSI eligibility requirements and benefit levels are based on nationally uniform standards. SSI is administered by the Social Security Administration but is not part of the Old Age, Survivors, and Disability Insurance program, commonly known as Social Security. The following sections provide a brief overview of SSI's categorical and financial eligibility criteria. For more information on these and other SSI criteria, see CRS Report R44948, Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI): Eligibility, Benefits, and Financing . SSI Categorical Eligibility Criteria To be categorically eligible for SSI, a person must be an "aged, blind, or disabled individual," as defined in Title XVI of the SSA ( Table 2 ). The term "aged" refers to individuals aged 65 and older. The term "blind" refers to individuals of any age who have central visual acuity of 20/200 or less in the better eye with the use of a correcting lens, or a limitation in the fields of vision so that the widest diameter of the visual field subtends an angle of 20 degrees or less (i.e., tunnel vision). Adults aged 18 and older are considered "disabled" if they are unable to engage in any substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months. The Social Security Administration uses a monthly earnings standard to determine whether an individual's work activity constitutes SGA. The agency adjusts this standard annually to reflect changes in national wage levels. In 2019, the SGA earnings standard is $1,220 per month. (The SGA earnings standard is a proxy measure for total disability; it is not used to determine financial eligibility for SSI.) Adults generally qualify as disabled if they have an impairment (or combination of impairments) of such severity that they are unable to perform any kind of substantial work that exists in the national economy in significant numbers, taking into consideration their age, education, and work experience. Children under the age of 18 are considered "disabled" if they have a medically determinable physical or mental impairment that (1) results in marked and severe functional limitations and (2) can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months. Children typically qualify as disabled if they have a severe impairment (or combination of impairments) that limits their ability to engage in age-appropriate childhood activities at home, in childcare, at school, or in the community. In addition, the child's earnings must not exceed the SGA standard. The Social Security Administration periodically reevaluates blind or disabled SSI recipients to determine if they continue to meet the applicable definition of blindness or disability. In general, the Social Security Administration schedules continuing disability reviews (CDRs) of blind or disabled SSI recipients at least once every three to seven years, depending on the likelihood of medical improvement. In addition, the agency reevaluates child SSI recipients under the adult definition of disability when they attain age 18. SSI Financial Eligibility Criteria To be financially eligible for SSI, a person must have income and resources within certain limits ( Table 2 ). The SSI income standard is equal to the SSI federal benefit rate (FBR), which is the maximum monthly SSI payment available under the program. In 2019, the SSI FBR is $771 per month for an individual and $1,157 per month for a married couple if both members are SSI eligible. Expressed as a share of the federal poverty level (FPL), the SSI FBR in 2019 is about 74% of FPL for an individual and 82% of FPL for a couple. The SSI FBR is adjusted annually for inflation by the same cost-of-living adjustment (COLA) applied to Social Security benefits. The SSI resource standard is $2,000 for an individual and $3,000 for a couple. These amounts are not adjusted for inflation and have remained at their current levels since 1989. Under the SSI program, a person's income and resources are counted against the income and resource standards unless they are excluded by federal law or by the Commissioner of Social Security pursuant to discretionary authority provided in statute. The SSI income-counting methodology excludes, among other things, the first $20 per month of any income, as well as the first $65 per month of earned income plus one-half of any earnings above $65. These amounts are not adjusted for inflation and have remained in place since SSI was enacted in 1972. The SSI resource-counting methodology excludes, among other things, a person's primary residence, household goods and personal effects, one automobile used for transportation, and property essential to self-support. For an eligible individual without an eligible spouse, the SSI income- and resource-counting methodologies are generally person-based, meaning the program counts the income and resources owned or used by the individual to determine eligibility for SSI and the amount of the payment. In certain situations, however, SSI may count a portion of the income or resources of certain ineligible family members toward the eligible individual's income or resource standard. This process, known as "deeming," applies primarily to eligible children under the age of 18 who live in the same household as their ineligible parent(s) and to eligible married adults who live in the same household as their ineligible spouse. SSI deeming rules are complex and beyond the scope of this report. The Social Security Administration calculates a person's countable income and resources (i.e., gross income and resources less applicable exclusions) and then subtracts those amounts from the income and resource standards to determine financial eligibility and the amount of the cash payment (if any). Individuals with countable income and resources at or below the applicable standards are eligible for SSI. The Social Security Administration periodically reevaluates an SSI recipient's financial circumstances (i.e., income, resources, and living arrangements) to determine if the person is still eligible for SSI and receiving the correct payment amount. Automatic redeterminations are scheduled annually or once every six years, depending on the likelihood of change in a recipient's circumstances. Additional Eligibility Requirements for LTSS Coverage Medicaid enrolleesâincluding the ABD populationsâmay have long-term care needs as well. In general, to receive Medicaid LTSS coverage, enrollees must also meet state-based level-of-care eligibility criteria. In other words, they must demonstrate the need for long-term care. In addition, such individuals may be subject to a separate set of Medicaid financial eligibility rules to receive LTSS coverage. Level-of-care eligibility criteria for most Medicaid-covered LTSS specify that individuals must require care provided in a nursing facility or other institutional setting. A state's institutional level-of-care criteria, in general, are also applied to Medicaid Home and Community-Based Services (HCBS) eligibility. That is, eligibility for Medicaid LTSS, both institutional care and most HCBS, is tied to needs-based criteria that require an individual to meet an institutional level-of-care need. There is no federal definition for Medicaid institutional level-of-care, and each state defines its level-of-care criteria. To define institutional level-of-care criteria, states may use "functional" criteria, such as an individual's ability to perform certain activities of daily living (ADLs). States may also use "clinical" level-of-care criteria, such as the diagnosis of an illness, injury, disability or other medical condition; treatment and medications; and cognitive status or behavioral issues, among other criteria. Most states use a combination of functional and clinical criteria in defining the need for LTSS. Certain optional ABD eligibility pathways (as described in the section entitled " Other ABD Pathways ") are available for older adults and individuals with disabilities âSpecial Income Level, Special Home and Community-Based Waiver Group, Home and Community-Based Services (HCBS) State Plan, and Katie Beckett. These optional eligibility pathways establish eligibility to Medicaid, in general, along with Medicaid-covered LTSS for individuals who receive institutional care, or for those who need the level of care provided in an institution and receive Medicaid-covered HCBS. Medicaid enrollees in other mandatory or optional eligibility pathways may also be eligible to receive LTSS if they meet the level of care criteria. Applicants seeking Medicaid-covered LTSS are subject to a separate set of Medicaid financial eligibility rules (e.g., limits on the value of home equity and asset transfer rules). These additional financial rules are in place to ensure that program applicants apply their assets toward the cost of their care and do not divest them to gain eligibility sooner. In addition, Medicaid specifies rules for equitably allocating income and assets to non-Medicaid-covered spouses to determine LTSS coverage eligibility for nursing facility services and some HCBS. Commonly referred to as spousal impoverishment rules , these rules are intended to prevent the impoverishment of the spouse who does not need LTSS. Medicaid has another set of rules for the treatment of income after an individual is determined eligible for certain Medicaid-covered LTSS, referred to as Post-Eligibility Treatment of Income (PETI) rules. In general, eligible beneficiaries whose income exceeds specified amounts are required to apply their income toward the cost of their care. Within federal guidelines, a participant may retain a certain amount of income for personal use based on the services he or she receives. This amount varies by care setting (i.e., institutional versus HCBS). These specific financial eligibility rules for Medicaid-covered LTSS are not described in this report; for more information, see CRS Report R43506, Medicaid Financial Eligibility for Long-Term Services and Supports . In addition, most states offer Medicaid-covered LTSS under waiver programs that operate outside requirements under the Medicaid State plan. Under SSA Section 1915(c), states can cover HCBS, which includes a wide variety of nonmedical, social, and supportive services that allow individuals who require an institutional level of care to live independently in the community. SSA Section 1915(c) authorizes the HHS Secretary to waive requirements regarding comparability of services and offering services statewide (i.e., referred to as statewideness). In addition, states may waive certain income and resource rules applicable to persons in the community, so that a spouse's or parent's income (and, to some extent, resources) are not considered available to the applicant for the purposes of determining Medicaid financial eligibility. States may use Section 1915(c) concurrently with other waiver authorities. For example, states may combine Section 1915(b) and 1915(c) authorities to offer mandatory managed care for HCBS. States may also limit or cap program enrollment in the waiver. For each Section 1915(c) waiver program, states must identify the Medicaid eligibility groups receiving waiver services from those groups already covered under the Medicaid State plan. In doing so, states may include both mandatory and optional groups. To expand LTSS coverage, states may use Section 1115 of the SSA to waive certain state plan requirements. States have used Section 1115 waivers to expand eligibility to groups beyond those the statute allows, to cap program enrollment, and to impose waiting periods prior to enrollment. States have also used Section 1115 waiver programs to modify the income- and resource-counting rules and methodologies for specified groupsâfor example, to encourage participation in managed LTSS, and to otherwise liberalize or limit income-counting rules for specified subpopulations. Moreover, states have used Section 1115 waiver authority to modify spend-down requirements, and to modify periods of retroactive eligibility and/or periods for eligibility redeterminations, among other eligibility-related purposes. Further discussion of Medicaid eligibility under these waiver programs is beyond the scope of this report. SSI-Related Pathways SSI-Related Pathways consist of mandatory and optional eligibility groups that meet the general requirements of the SSI program. These groups include aged, blind, or disabled individuals who are SSI eligible, deemed to be SSI eligible, or would be SSI eligible if not for a certain SSI program rule. This report organizes the SSI-Related Pathways into three subgroups, each of which contains multiple eligibility pathways: (1) SSI Recipients, (2) Special Groups of Former SSI Recipients, and (3) Other SSI-Related Groups. SSI Recipients The pathways for SSI Recipients extend Medicaid coverage to individuals who are enrolled in the SSI program and who either receive SSI, are deemed to receive SSI, or receive only state supplementary payments (SSPs, discussed below). States are generally required to provide Medicaid coverage for SSI recipients. However, states may use more restrictive eligibility criteria than those of the SSI program if they were using such criteria in 1972. Individuals in receipt of SSI for a given month are usually eligible for Medicaid for that month. SSI recipients typically become ineligible for Medicaid whenever their cash payments are suspended or terminated. In December 2018, 8.1 million individuals received SSI or federally administered SSP. SSI Recipients in "1634 States" or "SSI Criteria States" Unless states elect the option discussed in the next section, they must provide Medicaid coverage for all SSI recipients. Most states that provide Medicaid coverage for all SSI recipients do so automatically. Section 1634 of the SSA allows states to enter into an agreement with the Social Security Administration for the agency to conduct Medicaid eligibility determinations and redeterminations for SSI recipients on the state's behalf. In these states, an SSI application is also an application for Medicaid, and an SSI redetermination is also a redetermination of Medicaid eligibility. States that choose to contract with the Social Security Administration under Section 1634 of the SSA are known as "1634 states." In 2019, 34 states and the District of Columbia provide Medicaid coverage for SSI recipients using this option (see Table 3 ). Some states that provide Medicaid coverage for all SSI recipients choose to conduct their own Medicaid eligibility determinations and redeterminations. These states use the same standards and methodologies of the SSI program to determine Medicaid eligibility but require SSI recipients to file a separate Medicaid application with the state or local Medicaid office. States that elect this option are known as "SSI criteria states." In 2019, eight states provide Medicaid coverage for SSI recipients using this option (see Table 3 ). SSI Recipients and Other ABD Individuals in "209(b) States" Under Section 1902(f) of the SSA, states have the option of applying eligibility criteria that are more restrictive than those of the SSI program in determining Medicaid eligibility for SSI recipients. However, any more restrictive eligibility criteria that are applied to SSI recipients may not be more restrictive than those contained in the state's Medicaid plan that was in effect on January 1, 1972. States that provide Medicaid coverage for only those SSI recipients who meet more restrictive eligibility criteria than SSI criteria are known as "209(b) states," after the section of the Social Security Amendments of 1972 (P.L. 92-603) that established the option. In 2019, eight states provide Medicaid coverage for SSI recipients using this option (see Table 3 ). 209(b) states apply at least one eligibility criterion that is more restrictive than SSI criteria in determining Medicaid eligibility for SSI recipients, such as a stricter definition of blindness or disability, a lower income or resource standard, a less generous methodology for counting income or resources, or some combination of those factors. For example, New Hampshire imposes a longer duration-of-impairment requirement for individuals with a disability other than blindness (48 months instead of SSI's 12-month standard), and Virginia limits ownership of property contiguous to an individual's home (i.e., land other than the lot occupied by the home) to $5,000. 209(b) states may also use eligibility criteria that are more liberal than those of the SSI program under the authority provided in Section 1902(r)(2) of the SSA; however, they must retain at least one eligibility criterion that is more restrictive than SSI criteria to remain in 209(b) status. 209(b) states are required to deduct the value of SSI and any optional state supplementary payments (discussed below) from an SSI recipient's income in determining Medicaid eligibility. They must also allow SSI recipients to "spend down" or deduct incurred medical expenses from their income to the point where they meet the applicable income standard needed for Medicaid eligibility. Because SSI program rules form the foundation of Medicaid eligibility criteria for the ABD populations, 209(b) states may apply their more restrictive eligibility criteria to most other eligibility pathways for ABD individuals, subject to the same terms and conditions discussed above. Individuals Eligible for Only Optional SSPs Some states complement federal SSI payments with optional state supplementary payments (SSPs), which are made solely with state funds. SSPs are intended to help individuals whose basic needs are not fully met by the SSI federal benefit rate (FBR). States may provide SSPs to all SSI recipients, or they may limit payments to certain individuals, such as residents of domiciliary-care facilities or blind individuals. SSP amounts, standards, and methodologies are determined by the states, pursuant to certain federal requirements. States may self-administer their SSP program (i.e., state administered SSP), or they may contract with the Social Security Administration for the agency to administer the program on the state's behalf (i.e., federally administered SSP). In 2019, 44 states and the District of Columbia provide optional SSPs to some or all SSI recipients. States have the option to provide Medicaid coverage for individuals who receive only an optional SSP. Individuals receive an optional SSP, but no SSI payment, if their countable income is at least equal to the SSI income standard but less than the state-established income standard used to determine optional SSPs. The "SSP income standard" is effectively the combined amount of the SSI FBR and the maximum applicable SSP. For example, in 2019, the SSP income standard for a disabled individual living independently in California is $931.72 per month: the SSI FBR of $771 per month plus the maximum applicable SSP of $160.72 per month. In this case, the disabled individual would receive only an optional SSP if his or her countable income were at least $771 per month but less than $931.12 per month. In general, states must apply the same standards and methodologies to individuals under this pathway that they apply to individuals receiving SSI, including any standards or methodologies that are more restrictive than those of the SSI program in the case of 209(b) states. However, 209(b) states and SSI criteria states that self-administer their SSP program may apply a more restrictive income-counting methodology to individuals under this pathway than the one they apply to individuals receiving SSI. According to the Medicaid and CHIP Payment and Access Commission (MACPAC), 43 states and the District of Columbia provide Medicaid for individuals who receive only an optional SSP. Individuals Receiving Mandatory SSPs (This pathway is closed to new enrollment and applies to relatively few people.) Section 212 of P.L. 93-66 requires nearly all states to maintain the December 1973 income levels of individuals who were transferred from the former federal-state cash assistance programs for the aged, blind, and disabled (hereinafter "former adult assistance programs") to the SSI program in January 1974. To receive federal Medicaid funding, states must provide a special payment, known as a mandatory SSP, to individuals who were converted from the former adult assistance programs to the SSI program if the individual's SSI payment plus other income from the current month is less than his or her December 1973 state grant amount plus certain other income. The amount of the mandatory SSP is the difference between the current SSI payment and the individual's December 1973 payment under the former adult assistance program. Section 13(c) of P.L. 93-233 requires states to provide Medicaid coverage for individuals who receive mandatory SSPs. Individuals with Earnings Above Certain Limits (1619[a] and 1619[b]) All states (including 209[b] states) are required to provide Medicaid coverage for individuals who are enrolled in the SSI program but have earnings above certain SSI limits. Under Section 1619(a) and 1619(b) of the SSA, individuals who would continue to be eligible to receive SSI if not for their earnings may be deemed to be receiving SSI for Medicaid eligibility purposes if they continue to work and meet certain other requirements. To qualify under the 1619 provisions, individuals must have been eligible for and received SSI for at least one month before the month the 1619 determination is made. (Adults aged 65 and older may qualify for the 1619 provisions, provided they meet the SSI definition of blindness or disability.) Individuals who live in 209(b) states must also have been eligible for Medicaid in the month immediately prior to becoming eligible for 1619 status. Section 1619(a) of the SSA provides for the continuation of cash payments for disabled SSI recipients with earnings that would otherwise disqualify them from SSI. Under this provision, disabled individuals who have earnings at or above the substantial gainful activity (SGA) standard ($1,220 per month in 2019) but whose countable income is less than the SSI income standard are eligible to receive special SSI payments in lieu of regular SSI payments. (SSI does not require blind individuals to meet the SGA standard; thus, 1619[a] does not apply to blind SSI recipients.) These 1619(a) payments are calculated in the same manner as regular SSI payments and are payable for as long as an individual performs SGA and meets all other SSI eligibility criteria. In addition to providing special payments, Section 1619(a) requires all states to provide Medicaid coverage for 1619(a) recipients on the same basis as they provide Medicaid coverage for regular SSI recipients. Section 1619(b) of the SSA requires all states to provide Medicaid coverage for blind or disabled individuals who would continue to be eligible for regular SSI payments or 1619(a) payments if not for their earnings. Under this provision, blind or disabled individuals who lose SSI eligibility because their countable income exceeds the SSI income standard (or applicable SSP income standard) due to excess earnings are deemed to be receiving SSI for Medicaid eligibility purposes. To qualify under this pathway, individuals must (1) continue to be blind or disabled, (2) meet all SSI financial eligibility requirements except for earnings, (3) need Medicaid to continue working, and (4) have earnings that are considered insufficient to provide a reasonable equivalent of the benefits that would be provided if they did not have those earnings (i.e., SSI, SSP, Medicaid, and publically funded personal or attendant care). The Social Security Administration uses an annual earnings standard to determine when 1619(b) eligibility ends. The agency calculates this standard based on the sum of the amount of gross earnings that would reduce the SSI payment (or the combined amount of the SSI payment and the SSP) to zero for an individual living independently with no other income, and the state's average annual per capita Medicaid expenditures for blind or disabled SSI recipients. The standard varies from state to state, depending on the amount of the SSP (if any) and per capita Medicaid expenditures. In 2019, the annual earnings standard for disabled 1619(b) participants ranges from $27,826 in Alabama to $66,452 in Connecticut, with the median being $36,548. If an individual's annual earnings exceed the predetermined standard, then the Social Security Administration will determine his or her eligibility using an individualized standard that takes into account the person's actual Medicaid expenditures, as well as the value of any publicly funded personal or attendant care that the individual receives from a program other than Medicaid. Special Groups of Former SSI Recipients The pathways for Special Groups of Former SSI Recipients extend Medicaid coverage to special former SSI/SSP recipients who would continue to be eligible for SSI/SSP if not for receipt of certain Social Security benefits. Special former recipients are deemed to be receiving SSI/SSP for Medicaid eligibility purposes; however, unlike 1619 participants, they no longer have a current connection to the SSI program (i.e., they have been formally terminated from the rolls). In determining Medicaid eligibility, most states must disregard the applicable Social Security benefit or increases in that benefit from the special former recipient's countable income. In most instances, 209(b) states have the option to disregard all, some, or none of the applicable Social Security benefit or increases in that benefit from the special former recipient's countable income in determining Medicaid eligibility. However, 209(b) states must provide Medicaid coverage for special former recipients on the same basis as they provide Medicaid coverage for individuals who receive SSI/SSP. Recipients of Social Security COLAs After April 1977 ("Pickle Amendment") Section 503 of P.L. 94-566 generally requires states to provide Medicaid coverage for individuals who would continue to be eligible for SSI/SSP if not for increases in their Social Security benefits due to COLAs. Individuals qualify under this pathway it they are receiving Social Security benefits, lost SSI/SSP but would still be eligible for those benefits if Social Security COLAs received since losing SSI/SSP were deducted from their income, and were eligible for and receiving SSI/SSP concurrently with Social Security for at least one month after April 1, 1977. 209(b) states may exclude all, some, or none of the Social Security benefit increases that caused ineligibility for SSI/SSP. This pathway is often known as the "Pickle Amendment" after the late Representative J.J. Pickle. Disabled Widow(er)s Receiving Benefit Increases Under P.L. 98-21 ("ARF Widow[er]s") (This pathway is closed to new enrollment and applies to relatively few people.) Social Security provides widow(er)'s benefits starting at age 60, or at age 50 if the individual is disabled and meets certain other criteria. The amount of the aged or disabled widow(er)'s benefit is based on the deceased insured worker's past earnings from covered employment, subject to a permanent reduction for each month of entitlement before the widow(er)'s full retirement age (65-67, depending on year of birth). Under P.L. 98-21 , lawmakers eliminated the additional reduction factor (ARF) for disabled widow(er)s aged 50-59, meaning their reduction penalty for claiming benefits before their full retirement age was capped at the percentage applicable to aged widow(er)s who first claim at age 60. All states (including 209[b] states) are required to provide Medicaid coverage for individuals who would continue to be eligible for SSI/SSP if not for increases in their widow(er)'s benefits due to the elimination of the ARF (known as "ARF Widow[er]s"). Individuals qualify under this pathway if they were entitled to Social Security benefits in December 1983 and received disabled widow(er)'s benefits and SSI/SSP in January 1984, lost SSI/SSP eligibility because of the elimination of the ARF, have been continuously entitled to widow(er)'s benefits since January 1984, filed for Medicaid continuation before July 1, 1988 (or a slightly later date in some cases), and would continue to be eligible for SSI/SSP if the value of the increase in disabled widow(er)'s benefits under P.L. 98-21 and any subsequent COLAs were deducted from their countable income. Disabled Adult Children Disabled adult children of retired, disabled, or deceased insured workers typically qualify for Social Security disabled adult child's (DAC) benefits if they are at least age 18 and became disabled before they attained age 22. States are generally required to provide Medicaid coverage for individuals who lose eligibility for SSI/SSP due to entitlement to or an increase in DAC benefits. Individuals qualify under this pathway if they lose eligibility for SSI/SSP due to receipt of DAC benefits on or after July 1, 1987, and would continue to be eligible for SSI/SSP if not for their entitlement to or an increase in DAC benefits. 209(b) states may exclude all, some, or none of the DAC benefit or increases in that benefit that caused ineligibility for SSI/SSP. Widow(er)s Not Entitled to Medicare Part A ("Early Widow[er]s") States are generally required to provide Medicaid coverage for individuals aged 50 to 64 who lose eligibility for SSI/SSP due to entitlement to Social Security widow(er)'s benefits but who are not yet entitled to Medicare Part A (Hospital Insurance). Individuals qualify under this pathway if they are at least age 50 but have not yet attained age 65, received SSI/SSP in the month before their widow(er)'s benefits began, are not entitled to Medicare Part A, and would continue to be eligible for SSI/SSP if not for their entitlement widow(er)'s benefits. Eligibility for Medicaid under this pathway continues until the individual becomes entitled to Medicare Part A. 209(b) states may exclude all, some, or none of the widow(er)'s benefit that caused ineligibility for SSP/SSI. Recipients of a 1972 Social Security COLA (This pathway is closed to new enrollment and applies to relatively few people.) Section 249E of P.L. 92-603 requires states to provide Medicaid coverage for individuals who would be eligible for SSI/SSP in the absence of a Social Security COLA enacted in 1972 under P.L. 92-336. Individuals qualify under this provision if they were entitled to Social Security benefits in August 1972, were receiving cash assistance under the former adult assistance programs in August 1972 (or would have been eligible for such assistance in certain instances), and would be eligible for SSI/SSP had the COLA under P.L. 92-336 not been applied to their Social Security benefits. Other SSI-Related Groups The pathways for Other SSI-Related Groups extend Medicaid coverage to certain individuals who were eligible for Medicaid just prior to SSI's start in 1974, and to aged, blind, or disabled individuals who would be eligible for SSI/SSP today if not for a certain requirement in those programs. Although these groups may have received SSI/SSP in the past, their eligibility for Medicaid under these pathways is not conditional on their prior receipt of such payments. Grandfathered 1973 Medicaid Recipients (These pathways are closed to new enrollment and apply to relatively few people.) Sections 230 to 232 of P.L. 93-66 require states to provide Medicaid to three groups that were eligible for Medicaid in December 1973: (1) essential spouses, (2) institutionalized individuals, and (3) blind or disabled individuals. Essential spouses are the spouses of cash assistance recipients under the former adult assistance programs whose needs were included in determining the amount of the cash payment to the recipient. Institutionalized individuals are inpatients of medical institutions or residents of intermediate care facilities who received cash assistance under the former adult assistance programs (or who would have been eligible for such assistance if they were not institutionalized). Blind or disabled individuals are individuals who met the state-established criteria for blindness or disability under the state's Medicaid plan in December 1973. States must provide Medicaid for these groups if they continue to meet the respective eligibility criteria that were in effect in December 1973, in addition to meeting certain other requirements. Individuals Eligible For but Not Receiving SSI/SSP States have the option to provide Medicaid coverage for aged, blind, or disabled individuals who meet the income and resource requirements for SSI/SSP but who do not receive cash payments. Individuals may be eligible for but not receiving SSI/SSP because they have not applied for benefits. According to estimates from HHS' Office of the Assistant Secretary for Planning and Evaluation, about 60% of single adults aged 18 and older who were eligible for SSI in 2015 participated in the program that year. In 209(b) states, eligibility under this pathway is determined before the deduction of any incurred medical expenses recognized under a state plan (i.e., before spend-down). Individuals Who Would be Eligible for SSI/SSP if They Were Not Institutionalized Residents of public institutions are generally ineligible for SSI. However, residents of certain medical institutions are eligible for a reduced SSI payment if more than 50% of the cost of their care is paid for by Medicaid (or in the case of a child under the age of 18, by any combination of Medicaid and private health insurance). The reduced SSI payment, known as a personal needs allowance (PNA), is used to pay for small comfort items not provided by the facility. Capped at $30 per month, or $60 per month for couples in certain situations, the PNA is not indexed to inflation and has remained at its current level since July 1988. Some states supplement the PNA (i.e., provide an SSP) for institutionalized individuals who meet certain requirements. Any countable income reduces the PNA for institutionalized individuals; however, the SSI/SSP income standard is used in determining their eligibility for the SSI program. States have the option to provide Medicaid coverage for institutionalized individuals who are ineligible for SSI/SSP because of the lower income standards used to determine eligibility for the PNA but who would be eligible for SSI/SSP if they were not institutionalized. In other words, states may provide Medicaid to individuals who reside in certain Title XIX-reimbursable institutions who have countable income at or above the PNA standard ($30 for an individual) but within the SSI/SSP income standard ($771 for an individual in 2019). Individuals Who Would be Eligible for SSI/SSP if Not for Criteria Prohibited byÂ Medicaid States are generally required to provide Medicaid coverage for aged, blind, or disabled individuals who would be eligible for SSI/SSP if not for an eligibility requirement used in those programs that is prohibited by Medicaid. For example, Section 4735 of the Balanced Budget Act of 1997 ( P.L. 105-33 ) requires states to exclude from eligibility determinations certain settlement payments made to hemophilia patients who were infected with HIV. However, federal law does not exempt such payments from being counted as income or resources under the SSI program. CMS regulations require states to provide Medicaid coverage for individuals who lost SSI eligibility because they received settlement payments. Other ABD Pathways States may extend Medicaid coverage to older adults and individuals with disabilities who have higher levels of income or resources than those permitted by SSI program rules under optional aged, blind, or disabled (ABD) eligibility pathways. In addition, some optional ABD eligibility pathways allow states to choose their own methodology for counting income and resources; others permit states to use less restrictive income- or resource-counting methodologies compared with SSI rules. As previously mentioned, certain optional eligibility pathways for older adults and individuals with disabilities (e.g., Special Income Level, Special Home and Community-Based Waiver Group, Home and Community-Based Services [HCBS] State Plan, and Katie Beckett) establish eligibility to Medicaid, in general, along with Medicaid-covered LTSS. In addition, Medicaid gives states the option to extend eligibility to individuals who "spend down" or deplete their income on medical expenses, including LTSS, to specified levels. Therefore, some individuals with higher levels of income and resources compared with those permitted under SSI rules may be Medicaid-eligible. This section describes the following optional Medicaid eligibility pathways for ABD individuals: (1) Poverty-Related; (2) Special Income Level; (3) Special Home and Community-Based Services Waiver Group; (4) Home and Community-Based Services State Plan Option; (5) Katie Beckett; (6) Buy-In Groups; and (7) Medically Needy. Poverty-Related Enacted under the Omnibus Budget Reconciliation Act of 1986 (OBRA '86; P.L. 99-509 ), the optional Poverty-Related eligibility pathway allows states to cover aged and/or disabled individuals who have incomes that are higher than SSI standards, with family income up to 100% of the federal poverty level (FPL), provided that the state also covers certain eligible pregnant women and children. Aged individuals are defined as being 65 years old and older, and disabled individuals must meet the SSI program's applicable definition of disability. States may employ a reasonable definition of a "family" for purposes of the individual's countable income. In general, states must use SSI rules in determining what income is counted or not counted. An individual's resources cannot exceed the SSI resource standard with SSI rules used in determining countable resources. However, states may use Section 1902(r)(2) of the SSA to disregard additional countable income or resources. In 2018, 24 states and the District of Columbia (DC) offered the optional Poverty-Related eligibility pathway. Seventeen states and DC had an income standard that was set at 100% of the FPL under the Poverty-Related pathway; seven maintained a more restrictive income standard than 100% of the FPL. For example, Florida's standard was 88% of the FPL, and Idaho's was 77% of the FPL. Special Income Level The optional Special Income Level eligibility pathway allows states to establish a higher income standard for Medicaid coverage of nursing facility services and other institutional services, sometimes referred to as the special income rule , or the "the 300% rule." To be eligible for Medicaid through this pathway, individuals must require care provided by a nursing facility or other medical institution for no less than 30 consecutive days, and have an income standard that does not exceed a specified levelâno greater than 300% of the SSI FBR (i.e., the maximum SSI payment), which is approximately 222% of the FPL. Only the applicant's income (i.e., no income from spouses) is counted, and all income sources are counted in determining eligibility; there are no income disregards or deductions. For individuals seeking eligibility based on being aged 65 and older, or having blindness, or disability, the SSI resource standard and resource-counting methodology are used to determine eligibility. States may also use Section 1902(r)(2) of the SSA to disregard additional income or resources. Under the Special Income Level pathway, eligibility starts on the first of the 30 days that the individual resides in an institution. Thus, Medicaid can cover all of the care an individual receives in a nursing facility. In 2018, 42 states and the District of Columbia used the Special Income Level to enable persons to qualify for Medicaid coverage of institutional care. Special Home and Community-Based Services Waiver Group The Special Home and Community-Based Services (HCBS) Waiver Group eligibility pathway allows states to extend Medicaid eligibility to individuals receiving HCBS under a waiver program who require the level of care provided by a nursing facility or other medical institution. This eligibility pathway is sometimes referred to as the "217 Group" in reference to the specific regulatory section for this group, 42 C.F.R. Section 435.217. States use the highest income and resource standard of a separate eligibility group covered by the state plan under which an individual would otherwise qualify if institutionalized. For example, states that offer the Special Income Level pathway described above can extend eligibility to waiver program participants with income up to 300% of the SSI FBR. States must use the income- and resource-counting methodologies used to determine eligibility for this same eligibility group. States may also apply Section 1902(r)(2)'s more liberal income-counting rules to this group. Home and Community-Based Services State Plan Option States may establish an independent eligibility pathway into Medicaid through the Home and Community-Based Services (HCBS) State Plan option. This option is made available by extending the required and optional Medicaid state plan services, sometimes referred to as "traditional" Medicaid services, to individuals who are also receiving a targeted package of HCBS state plan services. In general, receipt of the Medicaid HCBS State Plan option is conditional on an individual having a need for long-term care (i.e., individuals must meet certain level-of-care criteria). Unlike Section 1915(c) HCBS waiver programs, which require that eligible individuals need the level of care provided in an institution (e.g., hospital or nursing facility), the HCBS state plan option delinks this requirement so that individuals with long-term care needs are not required to meet an institutional level of care need. The HCBS State Plan option was first enacted under the Deficit Reduction Act of 2005 (DRA; P.L. 109-171 ) and amended under the ACA. The income standard for the HCBS State Plan option applies to individuals who have income no higher than 150% of the FPL. For individuals who otherwise meet the requirements for an approved waiver program, the income standard can be no higher than 300% of the SSI FBR. States may choose to cover individuals under either or both income standards. Generally, states use SSI income-counting methodologies; however, states have some discretion to apply alternative methodologies, subject to the approval of the Secretary of HHS. There are no resource standards for this eligibility group, with the exception for those individuals who seek to establish eligibility based on an approved waiver program. For these individuals, states must use the same income and resource standards and counting methodologies as applied to those individuals eligible under the applicable waiver program. States may also use Section 1902(r)(2) of the SSA to disregard additional income or resources. In 2018, the most recent year for which data are available, 15 states and the District of Columbia offered at least one Section 1915(i) HCBS State Plan option; however, only two states (Indiana and Ohio) used this state plan authority as an independent eligibility pathway to Medicaid. As another option, states may choose to provide HCBS state plan services to those who are eligible for Medicaid under one of the state's existing Medicaid eligibility pathways. Katie Beckett Enacted under the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA; P.L. 97-248 ), the Katie Beckett optional pathway provides coverage to severely disabled children whose parents' income is otherwise too high for the child to qualify for Medicaid LTSS at home. Under the Katie Beckett pathway, states may extend Medicaid coverage to disabled children who meet the applicable SSI definition of disability and who are age 18 or younger and live at home. In addition, the state must determine that (1) the child requires the level of care provided in an institution, (2) it is appropriate to provide care outside the facility, and (3) the cost of care at home is no more than institutional care. States electing this option are required to cover all disabled children who meet these criteria. States must use SSI income and resources rules to determine eligibility; however, only the child's income and resources, if any, are counted. Parents' income and resources are not counted. A child's income cannot exceed the highest income standard used to determine eligibility for any separate group under which the individual would be eligible if institutionalized. In general, states set income standards up to 300% of the SSI FBR, which is about 222% of the FPL. States may not use Section 1902(r)(2) of the SSA to use more liberal income- or resource-counting methodologies. In 2018, the most recent year for which data are available, 24 states and the District of Columbia offered the Katie Beckett pathway under their Medicaid state plan. Buy-In Groups There are several optional Medicaid Buy-In eligibility pathways for working individuals with disabilities or working families who have a child with a disability. In general, individuals eligible under Buy-In pathways would be eligible for Medicaid except for the fact that their income is higher than the income standard allowed by the SSI program under Section 1619(b) of the SSA, which varies by state. Medicaid Buy-In pathways are designed to allow disabled individuals to work and still retain their Medicaid coverage, or to use their Medicaid coverage to access wraparound services that are not covered under an employer-sponsored plan. States can also impose premiums or other types of cost-sharing requirements on eligible individuals, which can be done on a sliding scale based on income. The extent to which states impose premiums and cost-sharing varies by state. Medicaid Buy-In pathways include the BBA 97 Eligibility Group, the Basic Eligibility Group, and the Medical Improvement Group. There is also a separate Buy-In pathway for disabled children, called the Family Opportunity Act. In 2018, the most recent year for which data are available, 44 states and the District of Columbia chose to offer coverage through at least one Buy-In pathway. BBA 97 Eligibility Group Enacted under Section 4733 of the Balanced Budget Act of 1997 (BBA 97; P.L. 105-33 ), this optional pathway is available to individuals with disabilities who work and have family income below 250% of the FPL, based on the size of the family. Individuals with disabilities must meet the SSI program's applicable definition of disability. Each state determines what constitutes a "family" for the purposes of this eligibility group. Family income is determined by applying the SSI income-counting methodology. In addition to the family income requirement, the applicant's unearned income must be less than the SSI income standard. All earned income is disregarded. An individual's countable resources must be less than or equal to the SSI resource standard using the SSI resource-counting methodology. However, states may use Section 1902(r)(2) of the SSA to disregard additional income or resources. Ticket to Work Basic Eligibility Group Enacted under Section 201 of the Ticket to Work and Work Incentives Improvement Act of 1999 (TWWIIA; P.L. 106-170 ), this optional pathway is similar to the BBA 97 Eligibility Group but is available to people with higher levels of income (i.e., above 250% of the FPL). There are no federal income or resource standards for the Basic Eligibility Group; rather, states can determine the income and resource standards, including no standards, rather than using the SSI program's requirements. However, if a state chooses to establish an income and/or resource standard, SSI income- and resource-counting methodologies apply. States may use Section 1902(r)(2) of the SSA to disregard additional earned income above the SSI-earned-income disregard, including disregarding all earned income. Individuals with disabilities eligible under this pathway must be aged 16 to 64 and meet the SSI program's applicable definition of disability. Ticket to Work Medical Improvement Group The Medical Improvement Group pathway was also enacted under Section 201 of TWWIIA. For states to cover this eligibility group, they must also cover the TWWIIA Basic Eligibility Group. Individuals eligible under the Medical Improvement Group were previously eligible under the Basic Eligibility Group but lost that eligibility because they were determined to have "medically improved," meaning they no longer meet the definition of disability under the SSI or Social Security Disability Insurance (SSDI) programs but continue to have a severe medically determinable impairment. Eligible individuals must be aged 16 to 64, earn at least the federal minimum wage, and work at least 40 hours per month or be engaged in a work effort that meets certain criteria for hours of work, wages, or other measures, as defined by the state and approved by the Secretary of HHS. As with the Basic Eligibility Group, states may determine the income and resource standards, including no standards, for this pathway. Similarly, states may use Section 1902(r)(2) of the SSA to disregard additional earned income above the SSI-earned-income disregard, including disregarding all earned income. Family Opportunity Act Established under Section 6061 of the DRA, the Family Opportunity Act (FOA) optional pathway allows families with income up to 300% of the FPL to buy Medicaid coverage for their disabled child aged 18 or younger (states can exceed 300% of the FPL without federal matching funds for such coverage). When determining a child's Medicaid eligibility, states choosing this pathway use the SSI program's applicable definition of disability, as well as SSI's income-counting methodology for a family, based on its size. There is no resource standard or applicable resource-counting methodology. States may use Section 1902(r)(2) of the SSA to disregard additional earned income above the SSI-earned-income disregard. States must require certain parents of eligible children under the FOA optional coverage group to enroll in, and pay premiums for, family coverage through employer-sponsored insurance as a condition of continuing Medicaid eligibility for the child. Medically Needy The Medically Needy option is targeted toward individuals with high medical expenses who would otherwise be eligible for Medicaid except that their income exceeds the income standards for other state-covered eligibility pathways. Individuals may qualify in one of two ways: either (1) their income or resources are at or below a state established standard, or (2) they spend down their income to the state-established standard by subtracting incurred medical expenses from their income. For example, if an individual has $1,000 in monthly income and the state's income threshold is $600, then the applicant would be required to incur $400 in out-of-pocket medical expenses during a state-determined budget period before being eligible for Medicaid. Examples of medical expenses that may be deducted from income include Medicare and other health insurance premiums, deductibles and coinsurance charges, and other medical expenses included in the state's Medicaid plan or recognized under state law. For individuals who spend down to Medicaid eligibility, states select a specific time period for determining whether or not the applicant meets the spend-down obligation, often referred to as a "budget period," which generally ranges from one to six months. States that choose to offer the Medically Needy option must cover pregnant women and children under the age of 18, and may choose to extend eligibility to the aged, blind, or disabled, among other groups. The Medically Needy option allows aged and disabled individuals who need expensive institutional LTSS to qualify for Medicaid nursing facility services. However, nursing facility services are optional services that states may elect to cover for Medically Needy individuals. Under the Medically Needy option, states establish the income eligibility standard; however, it may be no higher than 133â% of the state's AFDC level in 1996. Typically, the AFDC level is lower than the income standard for SSI benefits. For example, in 2015 the median Medically Needy income standard for an individual was $483 per month, or about 49% of the FPL. States use the SSI income-counting methodology for aged, blind, or disabled individuals. States also set the resource standards within certain federal requirements. For aged, blind, or disabled individuals, the resource standard is generally the same as in the SSI program. In general, states must use SSI's applicable definition of disability when determining eligibility for the disabled eligibility group. In 2018, 32 states and the District of Columbia offered coverage to the Medically Needy. Appendix. Medicaid Eligibility Pathways That Cover Older Adults and Individuals with Disabilities Table A-1 lists selected Medicaid eligibility pathways that cover older adults and individuals with disabilities. These eligibility pathways are organized into two broad coverage groups: (1) SSI-Related Pathways and (2) Other ABD Pathways. The table includes a brief description of each pathway, the age criterion for eligibility, whether the pathway is mandatory or optional, the Social Security Act citation, and any applicable regulatory citations. Table A-2 lists the income and resource standards, as well as the counting methodology, that applies to each standard for the selected Medicaid eligibility pathways that cover older adults and individuals with disabilities. In general, standards or limits on the amount of income and resources required for eligibility are expressed in relationship to the federal poverty level (FPL) or the SSI federal benefit rate (FBR). Where applicable, the income standard is presented as a monthly dollar amount for an individual in 2019. For state-specific information on Medicaid eligibility pathways for older adults and individuals with disabilities, see the following resources: M. Musumeci, P. Chidambaram, and M. O'Malley Watts, Medicaid Financial Eligibility for Seniors and People with Disabilities: Findings from a 50-State Survey , The Kaiser Family Foundation, June 2019, https://www.kff.org/medicaid/issue-brief/medicaid-financial-eligibility-for-seniors-and-people-with-disabilities-findings-from-a-50-state-survey/ . MACPAC, MACStats: Medicaid and CHIP Data Book , Exhibit 37, pp. 109-111, December 2018, https://www.macpac.gov/wp-content/uploads/2018/12/December-2018-MACStats-Data-Book.pdf .	Summary:	gov_report	1,024	null	19
crs_RL34499	crs_RL34499_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Y oung people who have spent time in foster care as teenagers often face challenges during the transition to adulthood. Compared to their counterparts in the general population, these youth fare poorly in education, employment, and other outcomes. The federal government recognizes that foster youth may ultimately return to the care of the state as adults through the public welfare, criminal justice, or other systems. In response, federal policy has focused on supporting youth while they are in foster care and in early adulthood. This report provides background to Congress on teens and young adults in and exiting from foster care, and the federal support available to them. It begins with a discussion of the characteristics of youth who have had contact with the child welfare system, including those who entered care and those who exited care via "emancipation." This process means that youth reached the state legal age of adulthood without being reunified with their families or placed in new permanent families. The report then discusses child welfare programs authorized under Title IV-E of the Social Security Act—specifically the Foster Care Maintenance Payments Program ("foster care program") and the John H. Chafee Program for Successful Transition to Adulthood ("Chafee program")—that are intended to help prepare youth for adulthood. The foster care program provides reimbursement to states for providing foster care, including, at state option, to youth between the ages of 18 and 21. It also includes certain requirements that are intended to support older youth in care. The Chafee program is the primary federal program that funds supportive services for teens and young adults during the transition from foster care. The text box below summarizes recent developments in the Chafee program. Appendix A includes funding data for the Chafee program. Appendix B includes a summary of other federal programs, outside of child welfare law, that address older youth in foster care and those who have aged out. Who Are Older Youth in Foster Care and Youth Aging Out of Care? Children and adolescents can come to the attention of state child welfare systems due to abuse, neglect, or other reasons such as the death of a parent or child behavioral problems. Some children remain in their own homes and receive family support services, while others are placed in out-of-home settings. Such settings usually include a foster home, the home of a relative, or group care (i.e., non-family settings ranging from those that provide specialized treatment or other services to more general care settings or shelters). A significant number of youth spend at least some time in foster care during their teenage years. They may stay in care beyond age 18, typically up to age 21, if they are in a state that extends foster care. Older Youth in Foster Care The U.S. Department of Health and Human Services (HHS), which administers child welfare funding, collects data from states on the number and characteristics of children in foster care. On the last day of FY2017, approximately 122,000 youth ages 13 through 20 comprised 27% of the national foster care caseload. Youth ages 13 through 20 made up 28% of the exits from foster care in FY2017. Most of these youth were reunified with their parents or primary caretakers, adopted, or placed with relatives. However, 19,945 youth aged out that year, or were "emancipated" because they reached the legal age of adulthood in their states, usually at age 18. Former Foster Youth Youth who spend their teenage years in foster care and those who age out of care face challenges as they move to early adulthood. While in care, they may miss opportunities to develop strong support networks and independent living skills that their counterparts in the general population might more naturally acquire. Even older foster youth who return to their parents or guardians can still face obstacles, such as poor family dynamics or a lack of emotional and financial support, that hinder their ability to achieve their goals as young adults. These difficulties are evidenced by the fact that youth who have spent at least some years in care during adolescence exhibit relatively poor outcomes across a number of domains. Two studies—the Northwest Foster Care Alumni Study and the Midwest Evaluation of the Adult Functioning of Former Foster Youth—have tracked these outcomes. Northwest and Midwest Studies The Northwest Foster Care Alumni Study and the Midwest Evaluation of the Adult Functioning of Former Foster Youth have tracked outcomes for a sample of foster youth across several areas and compared them to those of youth in the general population. The studies indicate that youth who spent time in foster care during their teenage years tended to have difficulty as they entered adulthood and beyond. The Northwest Study was retrospective; it looked at the outcomes of young adults who had been in foster care and found that they were generally more likely to have mental health and financial challenges than their peers. They were just as likely to obtain a high school diploma but were much less likely to obtain a bachelor's degree. The Midwest Evaluation followed youth over time to examine the extent to which outcomes in early adulthood are influenced by the individual characteristics of youth or their out-of-home care histories. The study examined the outcomes of youth who were in foster care at age 17, and tracked them through age 26. Compared to their counterparts in the general population, youth in the Midwest study fared poorly in education, employment, and other outcomes. Despite these findings, many former foster youth have overcome obstacles, such as limited family support and financial resources, and have met their goals. For example, youth in the Northwest study obtained a high school diploma or passed the general education development (GED) test at close to the same rates as 25 to 34 year olds generally (84.5% versus 87.3%). Further, youth in the Midwest Evaluation were just as likely as youth in the general population at age 23 or 24 to report being hopeful about their future. National Youth in Transition Database (NYTD) States have reported to HHS since FY2010 on the characteristics and experiences of certain current and former foster youth through the National Youth in Transition Database (NYTD). Among other data, states must report on a cohort of foster youth beginning when they are age 17, and then later at ages 19 and 21. Information is collected on a new group of foster youth at age 17 every three years. While the first cohort of NYTD respondents had some positive outcomes by age 21, about 43% reported experiencing homelessness by that age and over one-quarter had been referred for substance abuse assessments or counseling at some point during their lifetimes. States must also report on the supports that eligible current and former foster youth—generally those ages 14 to 21, and sometimes older—receive to support their transition to adulthood. An analysis of NYTD data for FY2015 found that less than a quarter of youth who received a transition service received services for employment, education, or housing. Overview of Federal Support for Foster Youth The Children's Bureau at HHS' Administration for Children and Families (ACF) administers programs that are targeted to foster youth and authorized under Title IV-E of the Social Security Act, including the federal foster care program and the Chafee program (which includes the Education and Training Voucher (ETV) program). Under the federal foster care program, states may seek reimbursement for youth to remain in care up to age 18, or up to age 21 at state option. In addition, the program has protections in place to help meet the needs of older youth. Title IV-E entitlement (or mandatory) funding for foster care is authorized on a permanent basis (no year limit) and is provided in annual appropriations acts. Congress typically provides the amount of Title IV-E foster care funding (or "budget authority") that the Administration estimates will be necessary for it to provide state or other Title IV-E agencies with the promised level of federal reimbursement for all of their eligible Title IV-E foster care costs under current law. Separately, the Chafee program provides funding to states for services and supports to help youth who are or were in foster care make the transition to adulthood. It is available up to age 21 (or age 23 under certain circumstances). The ETV component includes a separate authorization for discretionary funding to support Chafee-eligible youth in attending an institution of higher education for up to five years (consecutive or nonconsecutive) until they reach age 26. Chafee program funding is mandatory and has no year limit. The ETV program is funded through discretionary appropriations, also with no year limit. Figure 1 summarizes the programs and the Title IV-E requirements on older youth in foster care and those leaving foster care. Any state, territory, or tribe seeking federal funding under Title IV-E must have a federally approved Title IV-E plan that meets all the requirements of the law. As discussed in Appendix B , other federal programs are intended to help current and former youth in foster care make the transition to adulthood. Federal law authorizes funding for states and local jurisdictions to provide workforce support and housing to this population. States must also provide Medicaid coverage to youth who age out of foster care until they reach age 26. Federal support is available to assist youth in pursuing higher education. Extended Foster Care Program Historically, states have been primarily responsible for providing child welfare services to families and children. When a child is in out-of-home foster care, the state child welfare agency, under the supervision of the court (and in consultation with the parents or primary caretakers in some cases), serves as the parent and makes decisions on the child's behalf to promote his/her safety, permanence, and well-being. In most cases, the state relies on public and private entities to provide these services. The federal government plays a role in shaping state child welfare systems by providing funds, which are linked to certain requirements under Title IV-E of the Social Security Act. Title IV-E requires states to follow certain case planning and management practices for all children in care ( Figure 1 shows these requirements related to youth in foster care). Though not discussed in this report, Title IV-B of the Social Security Act, which authorizes funding for child welfare services, includes provisions on the oversight of children in foster care and support for families more broadly. The federal foster care program reimburses states and some territories and tribes (hereinafter, "states") for a part of the cost of providing foster care to eligible children and youth who have been removed by the state child welfare agency due to abuse or neglect. The courts have given care and placement responsibility to the state. Under the program, a state may seek partial federal reimbursement to "cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, school supplies, a child's personal incidentals, liability insurance with respect to a child, and reasonable travel to the child's home for visitation and reasonable travel for the child to remain in the school in which the child is enrolled at the time of placement." Federal reimbursement to states under Title IV-E may be made only on behalf of a child who meets multiple federal eligibility criteria, including those related to the child's removal and the income and assets of the child's family. For the purposes of this report, the most significant eligibility criteria for the federal foster care program are the child's age and placement setting. States may also seek reimbursement on behalf of Title IV-E eligible children for costs related to administration, case planning, training, and data collection. Beginning with FY2020, states can seek federal support for up to 12 months of (1) in-home parent skills-based programs and (2) substance abuse and mental health treatment services for any child a state determines is at "imminent risk" of entering foster care, any pregnant or parenting youth in foster care, and the parents or kin caregivers of these children. Also as of FY2020, any state electing to provide these prevention services and programs under its Title IV-E program will be entitled to receive federal funding equal to at least 50% of its cost, as long as the services and programs meet certain evidence-based standards, and the spending is above the state's maintenance of effort (MOE) level. Eligibility Since FY2011, states have had the option to seek reimbursement for the cost of providing foster care to eligible youth until age 19, 20, or 21. These youth must be completing high school or a program leading to an equivalent credential, enrolled in an institution that provides post-secondary or vocational education, participating in a program or activity designed to promote or remove barriers to employment, employed at least 80 hours per month, or exempted by their state from these requirements due to a medical condition as documented and updated in their case plan. In program guidance, HHS advised that states can make remaining in care conditional upon whether youth are eligible under only specified eligibility criteria. For example, states could extend care only to those youth enrolled in post-secondary education. Still, the guidance advises that states should "consider how [they] can provide extended assistance to youth age 18 and older to the broadest population possible consistent with the law to ensure that there are ample supports for older youth." In other guidance, HHS has advised that youth can remain in foster care at this older age even if they are married or enlist in the military. As of May 2019, HHS had approved Title IV-E state plans for 28 states, the District of Columbia, and nine tribal nations to extend the maximum age of federally funded foster care (see Figure 2 ). In general, the jurisdictions make foster care available to youth until they reach age 21 (except for Indiana, which extends foster care until age 20) and allow them to remain in care under any of the eligibility conditions specified in law (except for Tennessee, West Virginia, Wisconsin, the Eastern Band of Cherokee, and the Penobscot Indian Nation). A recent survey conducted by Child Trends, a nonprofit research organization, found that youth who are eligible to remain in care typically decide to leave earlier than the maximum age for foster care in their state by one to three years. HHS has advised that young people can leave care and later return before they reach the maximum age of eligibility in the state (with certain requirements pertaining to how long youth can leave for and remain eligible for foster care maintenance payments). In addition, state and tribal child welfare agencies can choose to close the original child abuse and neglect case and reopen the case as a "voluntary placement agreement" when the young person turns 18 or if they re-enter foster care between the ages of 18 and 21. In these cases, the income eligibility for Title IV-E would be based on the young adult's income only. HHS has further advised that states can extend care to youth ages 18 to 21 even if they were not in foster care prior to 18, but are not required to do so. Eligible Placement Setting Federal reimbursement of part of the costs of maintaining children in foster care may be sought only for children placed in foster family homes or child care institutions. Title IV-E does not currently include a definition of "foster family"; however, as of FY2020 the following definition of "foster family home" will go into effect: the home of an individual who is licensed as a foster parent, and who is residing with and providing 24-hour substitute care for not more than six children (with some exceptions) placed in foster care in the individual's licensed home. A "child care institution" is defined in law as a private institution, or a public institution that accommodates no more than 25 children, that is approved or licensed by the state. However, if a child in foster care is at least 18 years old, he/she may be placed in a "setting in which the individual is living independently" that meets standards established by the HHS Secretary (it does not have to meet state licensing rules). A child care institution may never include "detention facilities, forestry camps, training schools, or any other facility operated primarily for the detention of children who are determined to be delinquent." In program instructions issued by HHS, the department stated that it did not have plans to issue regulations that describe the kinds of living arrangements considered to be independent living settings, how these settings should be supervised, or any other conditions for a young person to live independently. The instructions advised that states have the discretion to develop a range of supervised independent living settings that "can be reasonably interpreted as consistent with the law, including whether or not such settings need to be licensed and any safety protocols that may be needed." States appear to allow youth ages 18 and older to live in a variety of settings. For example, Florida defines an independent living setting as a licensed foster home, licensed group home, college dormitory, shared housing, apartment, or other housing arrangement if the arrangement is approved and is acceptable to the youth, with the first choice being a licensed foster home. Case Planning and Review Federal child welfare provisions under Title IV-B and Title IV-E of the Social Security Act require state child welfare agencies, as a condition of receiving funding under these titles, to provide certain case management services to all children in foster care. These include monthly case worker visits to each child in care; a written case plan for each child in care that documents the child's placement and steps taken to ensure his/her safety and well-being, including by addressing their health and educational needs; and procedures ensuring a case review is conducted at least once every six months by a judge or an administrative review panel, and at least once every 12 months by a judge or administrative body who must consider the child's permanency plan. As part of the annual hearing, the court or administrative body must ensure that the permanency plan addresses whether—and, as applicable, when—the child will be returned to his/her parents, placed for adoption (with a petition for termination of parental rights filed by the Title IV-E agency), referred for legal guardianship, or placed in another planned permanent living arrangement. A court or administrative body may determine that a child's permanency plan is "another planned permanent living arrangement" only if the Title IV-E agency documents for the court a compelling reason why every other permanency goal is not in the child's best interest. Further, the court or administrative body conducting the hearings is to consult, in an age-appropriate manner, with the child regarding the proposed permanency plan or transition plan. As shown in Figure 1 , certain other provisions in Title IV-E apply to youth ages 14 and older. For example, the written case plan must include a description of the programs and services that will help the child prepare for a successful transition to adulthood. John H. Chafee Foster Care Program for Successful Transition to Adulthood (Chafee Program) The John H. Chafee Foster Care Program for Successful Transition to Adulthood, authorized under Section 477 of Title IV-E of the Social Security Act, provides services to older youth in foster care and youth transitioning out of care. This section provides an overview of the program, as well as information about program eligibility, youth participation, program administration, funding, data collection, and training and technical assistance. Legislative History The Foster Care Independence Act of 1999 ( P.L. 106-169 ) replaced the prior-law Independent Living Program that was established in 1986 ( P.L. 99-272 ). The 1999 law created the John H. Chafee Foster Care Independence program and doubled the annual mandatory funds available to states for independent living services from $70 million to $140 million. It also established new purpose areas, activities to be funded, and related requirements. The program has been amended five times, to (1) add the Education and Training Voucher (ETV) program for funding higher education opportunities ( P.L. 107-133 ), (2) expand eligibility for the Chafee and ETV programs to youth who exit foster care at age 16 or older for adoption or kinship guardianship ( P.L. 110-351 ), (3) ensure that foster youth are informed about designating others to make health care treatment decisions on their behalf ( P.L. 111-148 ), (4) increase funding for the Chafee program and add a purpose area about supporting activities that are developmentally appropriate ( P.L. 113-183 ), and (5) change data collection requirements and multiple purpose areas that address program eligibility ( P.L. 115-123 ). Purpose Areas The purposes of the Chafee program are to support all youth who have experienced foster care at age 14 or older in their transition to adulthood through transitional services such as assistance in obtaining a high school diploma and post-secondary education, career exploration, vocational training, job placement and retention, training and opportunities to practice daily living skills (such as financial literacy training and driving instruction), substance abuse prevention, and preventive health activities (including smoking avoidance, nutrition education, and pregnancy prevention); help youth who have experienced foster care at age 14 or older achieve meaningful, permanent connections with a caring adult; help youth who have experienced foster care at age 14 or older engage in age- or developmentally appropriate activities, positive youth development, and experiential learning that reflects what their peers in intact families experience; provide financial, housing, counseling, employment, education, and other appropriate support and services to former foster care youth between the ages of 18 and 21 (or up to age 23 in states that have extended foster care to age 21 using federal, state, or other funds, as determined by the HHS Secretary) to complement their own efforts to achieve self-sufficiency and to ensure that program participants recognize and accept their personal responsibility for preparing for and then making the transition from adolescence to adulthood; make education and training vouchers, including postsecondary training and education, available to youth who have aged out of foster care; provide Chafee-funded services to youth who have left foster care for kinship guardianship or adoption after turning 16; and ensure that youth who are likely to remain in foster care until age 18 have regular, ongoing opportunities to engage in age- or developmentally appropriate activities. Supports States may use Chafee funding to provide supports that are described in the purpose areas and other parts of the law. They may dedicate as much as 30% of their program funding toward room and board for youth ages 18 to 21 (or up to age 23 in states that have extended foster care to age 21 using federal, state, or other funds, as determined by the HHS Secretary). Room and board are not defined in statute, but they typically include food and shelter, and may include rental deposits, rent payments, utilities, and the cost of household startup purchases. Chafee funds may not be used to acquire property to provide housing to current or former foster youth. As described in HHS guidance, states may use Chafee funding to establish trust funds for youth eligible under the program. Chafee Education and Training Vouchers The Chafee program authorizes discretionary funding for the ETV program at $60 million annually, with no end year specified. The program is intended to provide financial support for the cost of attendance to Chafee-eligible youth enrolled at an institution of higher education, as defined by the Higher Education Act of 1965 (HEA), either on a full-time or part-time basis. The law refers to this support as a "voucher," which must not exceed the lesser of $5,000 or the cost of attendance. Youth are eligible to receive ETVs for five years until age 26, regardless of whether they attend in consecutive years or not and are making satisfactory progress toward completion of their program. Funding received through the ETV program does not count toward the student's expected family contribution, which is used by the federal government to determine a student's need for federal financial aid. However, the total amount of education assistance provided under the ETV program and other federal programs may not exceed the total cost of attendance, and students cannot claim the same education expenses under multiple federal programs. The state child welfare agency is to take appropriate steps to prevent duplication of benefits under the Chafee ETV program and other federal programs, and to coordinate the program with other appropriate education and training programs. A current fiscal year's ETV funds may not be used to finance a youth's educational or vocational loans incurred prior to that year. State Plan To be eligible for Chafee and ETV funds, a state must submit a five-year plan (as part of what is known as the Child and Family Service Plan, or CFSP, and annual updates to that plan via the Annual Progress and Service Report, or APSR) to HHS that describes how it intends to carry out its Chafee-funded program. The plan must be submitted on or before June 30 of the calendar year in which it is to begin. States may make amendments to the plan and notify HHS within 30 days of modifying it. HHS is to make the plans available to the public. Eligibility The Chafee program addresses eligibility under the purpose areas and in provisions on the ETV program. The program, including the ETV program, is available to youth in foster care between the ages of 14 and 21; who aged out of foster care and are between the ages of 18 and 21 (or up to age 23 in states that extend foster care to age 21); who left foster care at age 16 or older for kinship guardianship or adoption until they reach age 21 (or up to age 23 in states that extend care to age 21); who had been in foster care between the ages of 14 and 21 and left foster care for some other reason besides aging out of foster care, kinship guardianship, or adoption; and who are likely to remain in foster care until age 18 years (see the purpose area about "regular, ongoing opportunities to engage in age- or developmentally appropriate activities"). The Chafee program requires states to ensure that Chafee-funded services serve children of "various ages" and in "various stages of achieving independence" and use objective criteria for determining eligibility for benefits and services under the program. Former foster youth continue to remain eligible until age 21 (or age 23, if applicable) for services if they move to another state. The state in which the former foster youth resides—whether or not the youth was in foster care in that state—is responsible for providing independent living services to him/her. The number of youth who receive independent living program assistance from Chafee funds and other sources (state, local, and private) is collected by HHS via states through the National Youth in Transition Database (NYTD, discussed further in " Data Collection "). In FY2017, approximately 111,700 youth received an independent living service. Separately, states reported to HHS that they provided ETV vouchers to 16,400 youth in FY2008; 16,650 youth in FY2009; 17,400 youth in program year (PY) 2010; 17,100 youth in PY2011; 16,554 youth in PY2012; 16,548 youth in PY2013; 15,514 youth in PY2014, and 14,619 youth in PY2015. American Indian Youth The Chafee program requires a state to certify that each federally recognized Indian tribe in it has been consulted about the state's Chafee-funded programs and that there have been efforts to coordinate the programs with these tribal entities. In addition, the Chafee program specifies that the "benefits and services under the programs are to be made available to Indian children in the state on the same basis as to other children in the state." "On the same basis" has been interpreted by HHS to mean that the state will provide program services equitably to children in both state custody and tribal custody. The Role of Youth Participants The Chafee program requires states to ensure that youth in Chafee-funded programs participate directly in "designing their own program activities that prepare them for independent living" and that they "accept personal responsibility for living up to their part of the program." This language builds on the positive youth development approach to serving young people. Youth advocates that support this approach view youth as assets and promote the idea that they should be engaged in decisions about their lives and communities. States have taken various approaches to involving young people in decisions about the services they receive. Most states have also established formal youth advisory boards to provide a forum for youth to become involved in issues facing those in care and aging out of care. Youth-serving organizations for current and former foster youth, such as Foster Club, provide an outlet for young people to become involved in the larger foster care community and advocate for other children in care. States are not required to utilize life skills assessments or personal responsibility contracts with youth to comply with the youth participation requirement, although some states use these tools to assist youth in making the transition to adulthood. Program Administration States administer their Chafee-funded programs in multiple ways. Some programs are overseen by the state program that addresses older and former foster youth, with an independent living coordinator and other program staff. For example, in Maine the state's independent living coordinator oversees specialized life skills education coordinators assigned to cover all of the state's Department of Health and Human Services district offices. In some states, like California, each county administers its own program with some oversight and support from a statewide program. Other states, including Florida, use contracted service providers to administer their programs. Many jurisdictions have partnered with private organizations to help fund and sometimes administer some aspect of their independent living programs. For example, the Jim Casey Youth Opportunities Initiative has provided funding and technical assistance to multiple cities to provide financial support and training to youth exiting care. ETV Program Administration The state with the placement and responsibility for a youth in foster care is to provide the voucher to that youth. The state must also continue to provide a voucher to any youth who is currently receiving one and moves to another state for the sole purpose of attending an institution of higher education. If a youth moves permanently to another state after leaving care and subsequently enrolls in a qualified institution of higher education, the state where he or she resides would provide the voucher. Generally, states administer their ETV program through their program that addresses older and former foster youth. However, some states administer the ETV program through their financial aid office (e.g., California Student Aid Commission) or at the local level (e.g., Florida, where all child welfare programs are administered through community-based agencies). Some states contract with a nonprofit service provider, such as Foster Care to Success. States and counties may use ETV dollars to fund the vouchers and the costs associated with program administration, including for salaries, expenses, and training of staff. States are not permitted to use Title IV-E foster care or adoption assistance program funds for administering the ETV program. However, they may spend additional funds from state sources or other sources to supplement the ETV program or use ETV funds to expand existing postsecondary funding programs. Several states have scholarship programs, tuition waivers, and grants for current and former foster youth that are funded through other sources. Funding Chafee and ETV funds are distributed to each state based on its proportion of the nation's children in foster care. States must provide a 20% match (in-kind or cash) to receive their full federal Chafee and ETV allotment. The Chafee program includes a "hold harmless" clause that precludes any state from receiving less than the amount of general independent living funds it received under the former independent living program in FY1998 or $500,000, whichever is greater. There is no hold harmless provision for ETV funds. States may use Chafee and ETV funds to supplement, and not supplant, any other funds that are available for the types of activities authorized under the Chafee program. Territories with an approved Title IV-E plan may also apply for Chafee funding. Currently, Puerto Rico and the U.S. Virgin Islands have approved plans. An Indian tribe, tribal organization, or tribal consortium may apply to HHS and receive a direct federal allotment of Chafee and/or ETV funds. To be eligible, a tribal entity must be receiving Title IV-E funds to operate a foster care program under a Title IV-E plan approved by HHS or via a cooperative agreement or contract with the state. Successful tribal applicants receive an allotment amount(s) out of the state's allotment for the program(s) based on the share of all children in foster care in the state under tribal custody. Tribal entities must satisfy the Chafee program requirements established for states, as HHS determines appropriate. Four tribes—the Prairie Band of Potawatomi (Kansas), Santee Sioux Nation (Nebraska), Confederated Tribe of Warm Springs (Oregon), and Port Gamble S'Klallam Tribe (Washington)—receive Chafee and ETV funds. A state must certify that it will negotiate in good faith with any tribal entity that does not receive a direct federal allotment of child welfare funds but would like to enter into an agreement or contract with the state to receive funds for administering, supervising, or overseeing Chafee and ETV programs for eligible Indian children under the tribal entity's authority. Appendix B provides the Chafee and ETV allotments for each state, four tribes, Puerto Rico, and the U.S. Virgin Islands in FY2018 and FY2019. Though not shown in the table, Chafee funds are often combined with state, local, and other funding sources. Unused Funds States and tribes have two fiscal years to spend their Chafee and ETV funds. If a jurisdiction does not apply for all of its allotment, the remaining funds may be redistributed among states that need these funds as determined by HHS. Table A-2 shows the percentage and share of funds returned for both programs from FY2005 through FY2014, as well as a list of jurisdictions that have returned these funds. FY2014 is the most recent year available. HHS was recently given authority to reallocate funds that are not spent within the two-year period to states and tribes that apply for the funding. If funds are reallocated, the statute specifies that the funds should be redistributed among the states and tribes that apply for any unused funds, provided HHS determines the state or tribe would use the funds according to the program purposes. Further, HHS is directed to allocate the funds based on the share of children in foster care among the states and tribes that successfully appl y for the unused funds. Any unspent funds can be made available to the applying states or tribes in the second fiscal year following the two-year period in which funds were originally awarded . Any redistributed funds are considered part of the state 's or tribe's allotment for the fiscal year in which the redistribution is made . Training and Technical Assistance Training and technical assistance grants for the Chafee and ETV programs had been awarded competitively every five years, most recently for FY2010 through FY2014. The National Child Welfare Resource Center for Youth Development (NCWRCYD), housed at the University of Oklahoma, provided assistance under the grant. Beginning with FY2015, HHS has operated the Child Welfare Capacity Building Collaborative via a contract with ICF International, a policy management organization, to provide training and technical assistance on a number of child welfare issues, including youth development. Data Collection The Chafee program required that HHS consult with state and local public officials responsible for administering independent living and other child welfare programs, child welfare advocates, Members of Congress, youth service providers, and researchers to "develop outcome measures (including measures of educational attainment, high school diploma, avoidance of dependency, homelessness, non-marital childbirth, incarceration, and high-risk behaviors) that can be used to assess the performance of states in operating independent living programs"; identify the data needed to track the number and characteristics of children receiving services, the type and quantity of services provided, and state performance on the measures; and develop and implement a plan to collect this information beginning with the second fiscal year after the Chafee law was enacted in 1999. In response to these requirements, HHS created the National Youth in Transition Database (NYTD). The final rule establishing NYTD became effective April 28, 2008, and it required states to report data on youth beginning in FY2011. HHS uses NYTD to engage in two data collection and reporting activities. First, states collect demographic data and information about receipt of services on eligible youth who currently receive independent living services. This includes youth regardless of whether they continue to remain in foster care, were in foster care in another state, or received child welfare services through an Indian tribe or privately operated foster care program. Second, states track information on outcomes of foster youth on or about their 17 th birthday, around their 19 th birthday, and around their 21 st birthday. Consistent with the authorizing statute for the Chafee program, HHS is to penalize any state not meeting the data collection procedures for the NYTD from 1% to 5% of its annual Chafee fund allotment, which includes any allotted or re-allotted funds for the general Chafee program only. The penalty amount is to be withheld from the current fiscal year award of the funds. HHS is to evaluate a state's data file against data compliance standards, provided by statute. However, states have the opportunity to submit corrected data. The text box indicates new information that HHS must report to Congress. Evaluation of Chafee-Funded Services The authorizing statute for the Chafee program requires HHS to conduct evaluations of state (or tribal) programs funded by the Chafee program deemed to be "innovative or of national significance." The law reserves 1.5% of total Chafee funding annually for these evaluations, as well as related technical assistance, performance measurement, and data collection. HHS conducted an evaluation of promising independent living programs from approximately 2007 to 2012, and is in the process of identifying new ways of conducting research in this area. Multi-Site Evaluation of Foster Youth Programs For the initial evaluation, HHS contracted with the Urban Institute and its partners to conduct what is known as the Multi-Site Evaluation of Foster Youth Programs. The goal of the evaluation was to determine the effects of programs funded by the Chafee authorizing law in achieving key outcomes related to the transition to adulthood. HHS and the evaluation team initially conducted an assessment to identify state and local programs that could be evaluated rigorously, through random assignment to treatment and control groups, as required under the law. Their work is the first to involve random assignment of programs for this population. The evaluation team examined four programs in California and Massachusetts—an employment services program in Kern County, CA; a one-on-one intensive, individualized life skills program in Massachusetts; and a classroom-based life skills training program and a tutoring/mentoring program, both in Los Angeles County, CA. The evaluation of the Los Angeles and Kern County programs found no statistically significant impacts as a result of the interventions; however, the life skills program in Massachusetts, known as Outreach, showed impacts for some of the education outcomes that were measured. The Outreach program assists youth who enroll voluntarily in preparing to live independently and in having permanent connections to caring adults upon exiting care. Outreach youth were more likely than their counterparts in the control group to report having ever enrolled in college and staying enrolled. Outreach youth were also more likely to experience outcomes that were not a focus of the evaluation: these youth were more likely to remain in foster care and to report receiving more help in some areas of educational assistance, employment assistance, money management, and financial assistance for housing. In short, the Outreach youth may have been less successful on the educational front if they had not stayed in care. Youth in the program reported similar outcomes as the control group for multiple other measures, including in employment, economic well-being, housing, delinquency, and pregnancy. Emerging Research HHS has contracted with the Urban Institute and Chapin Hall for additional research on the Chafee program. Citing the lack of experimental research in child welfare, the research team is examining various models in other policy areas that could be used to better understand promising approaches of working with older youth in care and those transitioning from care. Researchers have identified a conceptual framework that takes into account the many individual characteristics and experiences that influence a youth's ability to transition successfully into adulthood. The research team has also classified the various types of programs that foster youth could access to help in the transition, and the extent to which they are ready to be evaluated. In addition, researchers have published a series of briefs that discuss outcomes and programs for youth in foster care in the areas of education, employment, and financial literacy. The briefs discuss that few programs have impacts for foster youth in these areas. The briefs also address issues to consider when designing and evaluating programs for youth in care. Appendix A. Funding for the John H. Chafee Foster Care (Chafee) Program for Successful Transition to Adulthood and Education and Training Voucher (ETV) Program Appendix B. Other Federal Support for Older Current and Former Foster Youth In addition to the child welfare programs under Title IV-E of the Social Security Act, other federal programs provide assistance to older current and former foster youth. This appendix describes Medicaid pathways for foster youth who emancipated; educational, workforce, and housing supports; and a grant to fund training for child welfare practitioners working with older foster youth and youth emancipating from care. Medicaid The Centers for Medicare and Medicaid Services (CMS) at HHS administers Medicaid, a federal-state health program jointly financed by HHS and the states. Medicaid law provides for mandatory and optional pathways for youth who have aged out of foster care. Mandatory Pathway As of January 1, 2014, certain former foster youth are eligible for Medicaid under a mandatory pathway created for this population in the Affordable Care Act (ACA, P.L. 111-148 ). Former foster youth are eligible if they were "in foster care under the responsibility of the State" upon reaching age 18 (or up to age 21 if the state extends federal foster care to that age); were enrolled in Medicaid while in foster care; and are not eligible or enrolled in other mandatory Medicaid coverage groups. The ACA specifies that income and assets are not considered when determining eligibility for this group. Nonetheless, foster youth with annual incomes above a certain level may be required to share in the costs of their health care. In addition to the law, CMS has provided additional parameters on the new pathway via a final rule promulgated in November 2016 and policy guidance. The final rule specifies that former foster youth are eligible regardless of whether Title IV-E foster care payments were made on their behalf. States may not provide Medicaid to individuals who left foster care before reaching age 18 via this pathway. Further, states may not provide Medicaid coverage to former foster youth who move from another state; however, states could apply to HHS under a waiver to provide such coverage via the research and demonstration waiver authority for the Medicaid program. The Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act ( P.L. 115-271 ) amended the Medicaid statute on the former foster youth pathway. It will permit states, as of January 2023, to use state plan authority for providing coverage to former foster youth who move across state lines. The law directs HHS, within one year of the its enactment, to issue guidance to states on best practices for removing barriers and ensuring timely coverage under this pathway, and on conducting related outreach and raising awareness among eligible youth. Consistent with existing regulations, the final rule affirms that states may not terminate Medicaid eligibility for foster youth who reach age 18 without first determining whether they are eligible for other mandatory Medicaid eligibility pathways available to adults (e.g., the coverage pathway for pregnant women). Optional Pathway The pathway for former foster youth appears largely to supersede an optional pathway also provided for this population. The 1999 law ( P.L. 106-169 ) that established the Chafee program also created a new optional Medicaid eligibility pathway for "independent foster care adolescents"; this pathway is often called the "Chafee option." The law further defined these adolescents as individuals under the age of 21 who were in foster care under the responsibility of the state on their 18 th birthday. The law permits states to restrict eligibility based on the youth's income or resources, and whether or not the youth had received Title IV-E funding. As of late 2012, more than half (30) of all states had extended the Chafee option to eligible youth. Of these states, five reported requiring youth to have income less than a certain level of poverty (180% to 400%). Four states permitted youth who were in foster care at age 18 in another state to be eligible under the pathway. States also reported whether the youth is involved in the process for enrolling under the Chafee option. In 15 states, youth are not directly involved in the enrollment process. For example, some states automatically enroll youth. In the other 15 states, youth are involved in enrollment with assistance from their caseworker or they enroll on their own. Most states that have implemented the Chafee option require an annual review to verify that youth continue to be eligible for Medicaid. States generally have a hierarchy to determine under which pathway youth qualify. For example, in most states, youth who qualify for the Chafee option and receive Supplemental Security Income (SSI) would be eligible for Medicaid under the SSI Medicaid pathway. Educational Support Federal funding and other supports for current and former foster youth are in place to help these youth aspire to, pay for, and graduate from college. The Higher Education Act (HEA) authorizes financial aid and support programs that target this and other vulnerable populations. Federal Financial Aid For purposes of applying for federal financial aid, a student's expected family contribution (EFC) is the amount that can be expected to be contributed by a student and the student's family toward his or her cost of education. Certain groups of students are considered "independent," meaning that only the income and assets of the student are counted. Individuals under age 24 who are or were orphans, in foster care, or wards of the court at age 13 or older are eligible to apply for independent student status. The law does not specify the length of time that the youth must have been in foster care or the reason for exiting as factors for independent student status eligibility. However, the federal financial aid form, known as the Free Application for Federal Student Aid (FAFSA), instructs current and former foster youth that the financial aid administrator at their school may require the student to provide proof that they were in foster care. As required by the FY2014 appropriations law (2014, P.L. 113-76 ), the Department of Education (ED) modified the FAFSA form so that it includes a box for applicants to identify whether they are or were in foster care, and to require ED to provide these applicants with information about federal educational resources that may be available to them. Higher Education Support Programs The Higher Education Act provides that youth in foster care, including youth who have left foster care after reaching age 16, and homeless children and youth are eligible for what are collectively called the federal TRIO programs. The programs are known individually as Talent Search, Upward Bound, Student Support Services, Educational Opportunity Centers, and McNair Postbaccalaureate. The TRIO programs are designed to identify potential postsecondary students from disadvantaged backgrounds, prepare these students for higher education, provide certain support services to them while they are in college, and train individuals who provide these services. HEA directs the Department of Education (ED), which administers the programs, to (as appropriate) require applicants seeking TRIO funds to identify and make services available, including mentoring, tutoring, and other services, to these youth. TRIO funds are awarded by ED on a competitive basis. In addition, HEA authorizes services for current and former foster youth (and homeless youth) through TRIO Student Support Services—a program intended to improve the retention and graduation rates of disadvantaged college students—that include temporary housing during breaks in the academic year. In FY2019, Congress appropriated $1.1 billion to TRIO programs. Separately, HEA allows additional uses of funds through the Fund for the Improvement of Postsecondary Education (FIPSE) to establish demonstration projects that provide comprehensive support services for students who were in foster care (or homeless) at age 13 or older. FIPSE is a grant program that seeks to support the implementation of innovative educational reform ideas and evaluate how well they work. As specified in the law, the projects can provide housing to the youth when housing at an educational institution is closed or unavailable to other students. Congress appropriated $6 million in FY2018 and $5 million in FY2019 for FIPSE. Workforce Support Workforce Innovation and Opportunity Act Programs The Workforce Innovation and Opportunity Act (WIOA) authorizes job training programs to unemployed and underemployed individuals through the Department of Labor (DOL). Two of these programs—Youth Activities and Job Corps—provide job training and related services to targeted low-income vulnerable populations, including foster youth. The Youth Activities program focuses on preventive strategies to help in-school youth stay in school and receive occupational skills, as well as on providing training and supportive services, such as assistance with child care, for out-of-school youth. Job Corps is an educational and vocational training program that helps students learn a trade, complete their GED, and secure employment. To be eligible, foster youth must meet age and income criteria as defined under the act. Young people currently or formerly in foster care may participate in both programs if they are ages 14 to 24. In FY2018, Congress appropriated $903 million to Youth Activities and $1.7 billion to Job Corps. Housing Support Family Unification Vouchers Program Current and former foster youth may be eligible for housing subsidies provided through programs administered by the Department of Housing and Urban Development's (HUD's) Family Unification Vouchers program (FUP vouchers). The FUP vouchers were initially created in 1990 under P.L. 101-625 for families that qualify for Section 8 tenant-based assistance and for whom the lack of adequate housing is a primary factor in the separation, or threat of imminent separation, of children from their families or in preventing the reunification of the children with their families. Amendments to the program in 2000 under P.L. 106-377 made youth ages 18 to 21 eligible for the vouchers for up to 18 months if they are homeless or are at risk of becoming homeless at age 16 or older. The Housing Opportunity Through Modernization Act ( P.L. 114-201 ), enacted in July 2016, extended the upper age of eligibility for FUP vouchers, from 21 to 24, for youth who emancipated from foster care. It also extended assistance under the program for these youth from 18 to 36 months and allows the voucher assistance to begin 90 days prior to a youth leaving care because they are aging out. It also requires HUD, after consulting with other appropriate federal agencies, to issue guidance to improve coordination between public housing agencies, which administer the vouchers, and child welfare agencies. The guidance must address certain topics, including identifying eligible recipients for FUP vouchers and identifying child welfare resources and supportive families for families and youth (including the Chafee program). As of the date of this report, HUD has not issued such guidance. In correspondence with CRS, HUD explained that it has requested funding for this work, and until those funds can be secured, HUD and HHS staff are studying how youth and families are served by FUP. FUP vouchers were initially awarded from 1992 to 2001. Over that period, approximately 39,000 vouchers were distributed. Each award included five years of funding per voucher and the voucher's use was restricted to voucher-eligible families for those five years. At the end of those five years, public housing authorities (PHAs) were eligible to convert FUP vouchers to regular Section 8 housing vouchers for low-income families. While the five-year use restrictions have expired for all family unification vouchers, some PHAs may have continued to use their original family unification vouchers for FUP-eligible families and some may have chosen to use some regular-purpose vouchers for FUP families (but the extent to which this happened is unknown). Congress appropriated $20 million for new FUP vouchers in each of FY2008 and FY2009; $15 million in FY2010, $10 million in FY2017, and $20 million in FY2018 and FY2019. Congress has specified that amounts made available under Section 8 tenant-based rental assistance and used for the FUP vouchers are to remain available for the program. A 2014 report on the FUP program examined the use of FUP vouchers for foster youth. The study was based on a survey of PHAs, a survey of child welfare agencies that partnered with PHAs that served youth, and site visits to four areas that use FUP to serve youth. The survey of PHAs showed that slightly less than half of PHAs operating FUP had awarded vouchers to former foster youth in the 18 months prior to the survey. PHAs reported that youth were able to obtain a lease within the allotted time, and many kept their leases for the full 18-month period they were eligible for the vouchers. In addition, 14% of total FUP program participants qualified because of their foster care status. According to the study, this relatively small share was due to the fact that less than half of PHAs were serving youth, and these PHAs tended to allocate less than one-third of their vouchers to youth, among other findings. Other Support Older current and former foster youth may be eligible for housing services and related supports through the Runaway and Homeless Youth program, administered by HHS. The program is comprised of three subprograms: the Basic Center program (BCP), which provides short-term housing and counseling to youth up to the age of 18; the Transitional Living program (TLP), which provides longer-term housing and counseling to youth ages 16 through 22; and the Street Outreach program (SOP), which provides outreach and referrals to youth who live on the streets. Youth transitioning out of foster care may also be eligible for select transitional living programs administered by HUD, though the programs do not specifically target these youth. The program was funded at $127 million in FY2019. The Foreclosure Prevention Act of 2008 ( P.L. 110-289 ) was signed into law on July 30, 2008, and enables owners of properties financed in part with Low-Income Housing Tax Credits (LIHTCs) to claim as low-income units those occupied by low-income students who were in foster care. Owners of LIHTC properties are required to maintain a certain percentage of their units for occupancy by low-income households; students (with some exceptions) are not generally considered low-income households for this purpose. The law does not specify the length of time these students must have spent in foster care nor require that youth are eligible only if they emancipated. Summary:	null	96	58,773	58,775	58,775	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Y oung people who have spent time in foster care as teenagers often face challenges during the transition to adulthood. Compared to their counterparts in the general population, these youth fare poorly in education, employment, and other outcomes. The federal government recognizes that foster youth may ultimately return to the care of the state as adults through the public welfare, criminal justice, or other systems. In response, federal policy has focused on supporting youth while they are in foster care and in early adulthood. This report provides background to Congress on teens and young adults in and exiting from foster care, and the federal support available to them. It begins with a discussion of the characteristics of youth who have had contact with the child welfare system, including those who entered care and those who exited care via "emancipation." This process means that youth reached the state legal age of adulthood without being reunified with their families or placed in new permanent families. The report then discusses child welfare programs authorized under Title IV-E of the Social Security Act—specifically the Foster Care Maintenance Payments Program ("foster care program") and the John H. Chafee Program for Successful Transition to Adulthood ("Chafee program")—that are intended to help prepare youth for adulthood. The foster care program provides reimbursement to states for providing foster care, including, at state option, to youth between the ages of 18 and 21. It also includes certain requirements that are intended to support older youth in care. The Chafee program is the primary federal program that funds supportive services for teens and young adults during the transition from foster care. The text box below summarizes recent developments in the Chafee program. Appendix A includes funding data for the Chafee program. Appendix B includes a summary of other federal programs, outside of child welfare law, that address older youth in foster care and those who have aged out. Who Are Older Youth in Foster Care and Youth Aging Out of Care? Children and adolescents can come to the attention of state child welfare systems due to abuse, neglect, or other reasons such as the death of a parent or child behavioral problems. Some children remain in their own homes and receive family support services, while others are placed in out-of-home settings. Such settings usually include a foster home, the home of a relative, or group care (i.e., non-family settings ranging from those that provide specialized treatment or other services to more general care settings or shelters). A significant number of youth spend at least some time in foster care during their teenage years. They may stay in care beyond age 18, typically up to age 21, if they are in a state that extends foster care. Older Youth in Foster Care The U.S. Department of Health and Human Services (HHS), which administers child welfare funding, collects data from states on the number and characteristics of children in foster care. On the last day of FY2017, approximately 122,000 youth ages 13 through 20 comprised 27% of the national foster care caseload. Youth ages 13 through 20 made up 28% of the exits from foster care in FY2017. Most of these youth were reunified with their parents or primary caretakers, adopted, or placed with relatives. However, 19,945 youth aged out that year, or were "emancipated" because they reached the legal age of adulthood in their states, usually at age 18. Former Foster Youth Youth who spend their teenage years in foster care and those who age out of care face challenges as they move to early adulthood. While in care, they may miss opportunities to develop strong support networks and independent living skills that their counterparts in the general population might more naturally acquire. Even older foster youth who return to their parents or guardians can still face obstacles, such as poor family dynamics or a lack of emotional and financial support, that hinder their ability to achieve their goals as young adults. These difficulties are evidenced by the fact that youth who have spent at least some years in care during adolescence exhibit relatively poor outcomes across a number of domains. Two studies—the Northwest Foster Care Alumni Study and the Midwest Evaluation of the Adult Functioning of Former Foster Youth—have tracked these outcomes. Northwest and Midwest Studies The Northwest Foster Care Alumni Study and the Midwest Evaluation of the Adult Functioning of Former Foster Youth have tracked outcomes for a sample of foster youth across several areas and compared them to those of youth in the general population. The studies indicate that youth who spent time in foster care during their teenage years tended to have difficulty as they entered adulthood and beyond. The Northwest Study was retrospective; it looked at the outcomes of young adults who had been in foster care and found that they were generally more likely to have mental health and financial challenges than their peers. They were just as likely to obtain a high school diploma but were much less likely to obtain a bachelor's degree. The Midwest Evaluation followed youth over time to examine the extent to which outcomes in early adulthood are influenced by the individual characteristics of youth or their out-of-home care histories. The study examined the outcomes of youth who were in foster care at age 17, and tracked them through age 26. Compared to their counterparts in the general population, youth in the Midwest study fared poorly in education, employment, and other outcomes. Despite these findings, many former foster youth have overcome obstacles, such as limited family support and financial resources, and have met their goals. For example, youth in the Northwest study obtained a high school diploma or passed the general education development (GED) test at close to the same rates as 25 to 34 year olds generally (84.5% versus 87.3%). Further, youth in the Midwest Evaluation were just as likely as youth in the general population at age 23 or 24 to report being hopeful about their future. National Youth in Transition Database (NYTD) States have reported to HHS since FY2010 on the characteristics and experiences of certain current and former foster youth through the National Youth in Transition Database (NYTD). Among other data, states must report on a cohort of foster youth beginning when they are age 17, and then later at ages 19 and 21. Information is collected on a new group of foster youth at age 17 every three years. While the first cohort of NYTD respondents had some positive outcomes by age 21, about 43% reported experiencing homelessness by that age and over one-quarter had been referred for substance abuse assessments or counseling at some point during their lifetimes. States must also report on the supports that eligible current and former foster youth—generally those ages 14 to 21, and sometimes older—receive to support their transition to adulthood. An analysis of NYTD data for FY2015 found that less than a quarter of youth who received a transition service received services for employment, education, or housing. Overview of Federal Support for Foster Youth The Children's Bureau at HHS' Administration for Children and Families (ACF) administers programs that are targeted to foster youth and authorized under Title IV-E of the Social Security Act, including the federal foster care program and the Chafee program (which includes the Education and Training Voucher (ETV) program). Under the federal foster care program, states may seek reimbursement for youth to remain in care up to age 18, or up to age 21 at state option. In addition, the program has protections in place to help meet the needs of older youth. Title IV-E entitlement (or mandatory) funding for foster care is authorized on a permanent basis (no year limit) and is provided in annual appropriations acts. Congress typically provides the amount of Title IV-E foster care funding (or "budget authority") that the Administration estimates will be necessary for it to provide state or other Title IV-E agencies with the promised level of federal reimbursement for all of their eligible Title IV-E foster care costs under current law. Separately, the Chafee program provides funding to states for services and supports to help youth who are or were in foster care make the transition to adulthood. It is available up to age 21 (or age 23 under certain circumstances). The ETV component includes a separate authorization for discretionary funding to support Chafee-eligible youth in attending an institution of higher education for up to five years (consecutive or nonconsecutive) until they reach age 26. Chafee program funding is mandatory and has no year limit. The ETV program is funded through discretionary appropriations, also with no year limit. Figure 1 summarizes the programs and the Title IV-E requirements on older youth in foster care and those leaving foster care. Any state, territory, or tribe seeking federal funding under Title IV-E must have a federally approved Title IV-E plan that meets all the requirements of the law. As discussed in Appendix B , other federal programs are intended to help current and former youth in foster care make the transition to adulthood. Federal law authorizes funding for states and local jurisdictions to provide workforce support and housing to this population. States must also provide Medicaid coverage to youth who age out of foster care until they reach age 26. Federal support is available to assist youth in pursuing higher education. Extended Foster Care Program Historically, states have been primarily responsible for providing child welfare services to families and children. When a child is in out-of-home foster care, the state child welfare agency, under the supervision of the court (and in consultation with the parents or primary caretakers in some cases), serves as the parent and makes decisions on the child's behalf to promote his/her safety, permanence, and well-being. In most cases, the state relies on public and private entities to provide these services. The federal government plays a role in shaping state child welfare systems by providing funds, which are linked to certain requirements under Title IV-E of the Social Security Act. Title IV-E requires states to follow certain case planning and management practices for all children in care ( Figure 1 shows these requirements related to youth in foster care). Though not discussed in this report, Title IV-B of the Social Security Act, which authorizes funding for child welfare services, includes provisions on the oversight of children in foster care and support for families more broadly. The federal foster care program reimburses states and some territories and tribes (hereinafter, "states") for a part of the cost of providing foster care to eligible children and youth who have been removed by the state child welfare agency due to abuse or neglect. The courts have given care and placement responsibility to the state. Under the program, a state may seek partial federal reimbursement to "cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, school supplies, a child's personal incidentals, liability insurance with respect to a child, and reasonable travel to the child's home for visitation and reasonable travel for the child to remain in the school in which the child is enrolled at the time of placement." Federal reimbursement to states under Title IV-E may be made only on behalf of a child who meets multiple federal eligibility criteria, including those related to the child's removal and the income and assets of the child's family. For the purposes of this report, the most significant eligibility criteria for the federal foster care program are the child's age and placement setting. States may also seek reimbursement on behalf of Title IV-E eligible children for costs related to administration, case planning, training, and data collection. Beginning with FY2020, states can seek federal support for up to 12 months of (1) in-home parent skills-based programs and (2) substance abuse and mental health treatment services for any child a state determines is at "imminent risk" of entering foster care, any pregnant or parenting youth in foster care, and the parents or kin caregivers of these children. Also as of FY2020, any state electing to provide these prevention services and programs under its Title IV-E program will be entitled to receive federal funding equal to at least 50% of its cost, as long as the services and programs meet certain evidence-based standards, and the spending is above the state's maintenance of effort (MOE) level. Eligibility Since FY2011, states have had the option to seek reimbursement for the cost of providing foster care to eligible youth until age 19, 20, or 21. These youth must be completing high school or a program leading to an equivalent credential, enrolled in an institution that provides post-secondary or vocational education, participating in a program or activity designed to promote or remove barriers to employment, employed at least 80 hours per month, or exempted by their state from these requirements due to a medical condition as documented and updated in their case plan. In program guidance, HHS advised that states can make remaining in care conditional upon whether youth are eligible under only specified eligibility criteria. For example, states could extend care only to those youth enrolled in post-secondary education. Still, the guidance advises that states should "consider how [they] can provide extended assistance to youth age 18 and older to the broadest population possible consistent with the law to ensure that there are ample supports for older youth." In other guidance, HHS has advised that youth can remain in foster care at this older age even if they are married or enlist in the military. As of May 2019, HHS had approved Title IV-E state plans for 28 states, the District of Columbia, and nine tribal nations to extend the maximum age of federally funded foster care (see Figure 2 ). In general, the jurisdictions make foster care available to youth until they reach age 21 (except for Indiana, which extends foster care until age 20) and allow them to remain in care under any of the eligibility conditions specified in law (except for Tennessee, West Virginia, Wisconsin, the Eastern Band of Cherokee, and the Penobscot Indian Nation). A recent survey conducted by Child Trends, a nonprofit research organization, found that youth who are eligible to remain in care typically decide to leave earlier than the maximum age for foster care in their state by one to three years. HHS has advised that young people can leave care and later return before they reach the maximum age of eligibility in the state (with certain requirements pertaining to how long youth can leave for and remain eligible for foster care maintenance payments). In addition, state and tribal child welfare agencies can choose to close the original child abuse and neglect case and reopen the case as a "voluntary placement agreement" when the young person turns 18 or if they re-enter foster care between the ages of 18 and 21. In these cases, the income eligibility for Title IV-E would be based on the young adult's income only. HHS has further advised that states can extend care to youth ages 18 to 21 even if they were not in foster care prior to 18, but are not required to do so. Eligible Placement Setting Federal reimbursement of part of the costs of maintaining children in foster care may be sought only for children placed in foster family homes or child care institutions. Title IV-E does not currently include a definition of "foster family"; however, as of FY2020 the following definition of "foster family home" will go into effect: the home of an individual who is licensed as a foster parent, and who is residing with and providing 24-hour substitute care for not more than six children (with some exceptions) placed in foster care in the individual's licensed home. A "child care institution" is defined in law as a private institution, or a public institution that accommodates no more than 25 children, that is approved or licensed by the state. However, if a child in foster care is at least 18 years old, he/she may be placed in a "setting in which the individual is living independently" that meets standards established by the HHS Secretary (it does not have to meet state licensing rules). A child care institution may never include "detention facilities, forestry camps, training schools, or any other facility operated primarily for the detention of children who are determined to be delinquent." In program instructions issued by HHS, the department stated that it did not have plans to issue regulations that describe the kinds of living arrangements considered to be independent living settings, how these settings should be supervised, or any other conditions for a young person to live independently. The instructions advised that states have the discretion to develop a range of supervised independent living settings that "can be reasonably interpreted as consistent with the law, including whether or not such settings need to be licensed and any safety protocols that may be needed." States appear to allow youth ages 18 and older to live in a variety of settings. For example, Florida defines an independent living setting as a licensed foster home, licensed group home, college dormitory, shared housing, apartment, or other housing arrangement if the arrangement is approved and is acceptable to the youth, with the first choice being a licensed foster home. Case Planning and Review Federal child welfare provisions under Title IV-B and Title IV-E of the Social Security Act require state child welfare agencies, as a condition of receiving funding under these titles, to provide certain case management services to all children in foster care. These include monthly case worker visits to each child in care; a written case plan for each child in care that documents the child's placement and steps taken to ensure his/her safety and well-being, including by addressing their health and educational needs; and procedures ensuring a case review is conducted at least once every six months by a judge or an administrative review panel, and at least once every 12 months by a judge or administrative body who must consider the child's permanency plan. As part of the annual hearing, the court or administrative body must ensure that the permanency plan addresses whether—and, as applicable, when—the child will be returned to his/her parents, placed for adoption (with a petition for termination of parental rights filed by the Title IV-E agency), referred for legal guardianship, or placed in another planned permanent living arrangement. A court or administrative body may determine that a child's permanency plan is "another planned permanent living arrangement" only if the Title IV-E agency documents for the court a compelling reason why every other permanency goal is not in the child's best interest. Further, the court or administrative body conducting the hearings is to consult, in an age-appropriate manner, with the child regarding the proposed permanency plan or transition plan. As shown in Figure 1 , certain other provisions in Title IV-E apply to youth ages 14 and older. For example, the written case plan must include a description of the programs and services that will help the child prepare for a successful transition to adulthood. John H. Chafee Foster Care Program for Successful Transition to Adulthood (Chafee Program) The John H. Chafee Foster Care Program for Successful Transition to Adulthood, authorized under Section 477 of Title IV-E of the Social Security Act, provides services to older youth in foster care and youth transitioning out of care. This section provides an overview of the program, as well as information about program eligibility, youth participation, program administration, funding, data collection, and training and technical assistance. Legislative History The Foster Care Independence Act of 1999 ( P.L. 106-169 ) replaced the prior-law Independent Living Program that was established in 1986 ( P.L. 99-272 ). The 1999 law created the John H. Chafee Foster Care Independence program and doubled the annual mandatory funds available to states for independent living services from $70 million to $140 million. It also established new purpose areas, activities to be funded, and related requirements. The program has been amended five times, to (1) add the Education and Training Voucher (ETV) program for funding higher education opportunities ( P.L. 107-133 ), (2) expand eligibility for the Chafee and ETV programs to youth who exit foster care at age 16 or older for adoption or kinship guardianship ( P.L. 110-351 ), (3) ensure that foster youth are informed about designating others to make health care treatment decisions on their behalf ( P.L. 111-148 ), (4) increase funding for the Chafee program and add a purpose area about supporting activities that are developmentally appropriate ( P.L. 113-183 ), and (5) change data collection requirements and multiple purpose areas that address program eligibility ( P.L. 115-123 ). Purpose Areas The purposes of the Chafee program are to support all youth who have experienced foster care at age 14 or older in their transition to adulthood through transitional services such as assistance in obtaining a high school diploma and post-secondary education, career exploration, vocational training, job placement and retention, training and opportunities to practice daily living skills (such as financial literacy training and driving instruction), substance abuse prevention, and preventive health activities (including smoking avoidance, nutrition education, and pregnancy prevention); help youth who have experienced foster care at age 14 or older achieve meaningful, permanent connections with a caring adult; help youth who have experienced foster care at age 14 or older engage in age- or developmentally appropriate activities, positive youth development, and experiential learning that reflects what their peers in intact families experience; provide financial, housing, counseling, employment, education, and other appropriate support and services to former foster care youth between the ages of 18 and 21 (or up to age 23 in states that have extended foster care to age 21 using federal, state, or other funds, as determined by the HHS Secretary) to complement their own efforts to achieve self-sufficiency and to ensure that program participants recognize and accept their personal responsibility for preparing for and then making the transition from adolescence to adulthood; make education and training vouchers, including postsecondary training and education, available to youth who have aged out of foster care; provide Chafee-funded services to youth who have left foster care for kinship guardianship or adoption after turning 16; and ensure that youth who are likely to remain in foster care until age 18 have regular, ongoing opportunities to engage in age- or developmentally appropriate activities. Supports States may use Chafee funding to provide supports that are described in the purpose areas and other parts of the law. They may dedicate as much as 30% of their program funding toward room and board for youth ages 18 to 21 (or up to age 23 in states that have extended foster care to age 21 using federal, state, or other funds, as determined by the HHS Secretary). Room and board are not defined in statute, but they typically include food and shelter, and may include rental deposits, rent payments, utilities, and the cost of household startup purchases. Chafee funds may not be used to acquire property to provide housing to current or former foster youth. As described in HHS guidance, states may use Chafee funding to establish trust funds for youth eligible under the program. Chafee Education and Training Vouchers The Chafee program authorizes discretionary funding for the ETV program at $60 million annually, with no end year specified. The program is intended to provide financial support for the cost of attendance to Chafee-eligible youth enrolled at an institution of higher education, as defined by the Higher Education Act of 1965 (HEA), either on a full-time or part-time basis. The law refers to this support as a "voucher," which must not exceed the lesser of $5,000 or the cost of attendance. Youth are eligible to receive ETVs for five years until age 26, regardless of whether they attend in consecutive years or not and are making satisfactory progress toward completion of their program. Funding received through the ETV program does not count toward the student's expected family contribution, which is used by the federal government to determine a student's need for federal financial aid. However, the total amount of education assistance provided under the ETV program and other federal programs may not exceed the total cost of attendance, and students cannot claim the same education expenses under multiple federal programs. The state child welfare agency is to take appropriate steps to prevent duplication of benefits under the Chafee ETV program and other federal programs, and to coordinate the program with other appropriate education and training programs. A current fiscal year's ETV funds may not be used to finance a youth's educational or vocational loans incurred prior to that year. State Plan To be eligible for Chafee and ETV funds, a state must submit a five-year plan (as part of what is known as the Child and Family Service Plan, or CFSP, and annual updates to that plan via the Annual Progress and Service Report, or APSR) to HHS that describes how it intends to carry out its Chafee-funded program. The plan must be submitted on or before June 30 of the calendar year in which it is to begin. States may make amendments to the plan and notify HHS within 30 days of modifying it. HHS is to make the plans available to the public. Eligibility The Chafee program addresses eligibility under the purpose areas and in provisions on the ETV program. The program, including the ETV program, is available to youth in foster care between the ages of 14 and 21; who aged out of foster care and are between the ages of 18 and 21 (or up to age 23 in states that extend foster care to age 21); who left foster care at age 16 or older for kinship guardianship or adoption until they reach age 21 (or up to age 23 in states that extend care to age 21); who had been in foster care between the ages of 14 and 21 and left foster care for some other reason besides aging out of foster care, kinship guardianship, or adoption; and who are likely to remain in foster care until age 18 years (see the purpose area about "regular, ongoing opportunities to engage in age- or developmentally appropriate activities"). The Chafee program requires states to ensure that Chafee-funded services serve children of "various ages" and in "various stages of achieving independence" and use objective criteria for determining eligibility for benefits and services under the program. Former foster youth continue to remain eligible until age 21 (or age 23, if applicable) for services if they move to another state. The state in which the former foster youth resides—whether or not the youth was in foster care in that state—is responsible for providing independent living services to him/her. The number of youth who receive independent living program assistance from Chafee funds and other sources (state, local, and private) is collected by HHS via states through the National Youth in Transition Database (NYTD, discussed further in " Data Collection "). In FY2017, approximately 111,700 youth received an independent living service. Separately, states reported to HHS that they provided ETV vouchers to 16,400 youth in FY2008; 16,650 youth in FY2009; 17,400 youth in program year (PY) 2010; 17,100 youth in PY2011; 16,554 youth in PY2012; 16,548 youth in PY2013; 15,514 youth in PY2014, and 14,619 youth in PY2015. American Indian Youth The Chafee program requires a state to certify that each federally recognized Indian tribe in it has been consulted about the state's Chafee-funded programs and that there have been efforts to coordinate the programs with these tribal entities. In addition, the Chafee program specifies that the "benefits and services under the programs are to be made available to Indian children in the state on the same basis as to other children in the state." "On the same basis" has been interpreted by HHS to mean that the state will provide program services equitably to children in both state custody and tribal custody. The Role of Youth Participants The Chafee program requires states to ensure that youth in Chafee-funded programs participate directly in "designing their own program activities that prepare them for independent living" and that they "accept personal responsibility for living up to their part of the program." This language builds on the positive youth development approach to serving young people. Youth advocates that support this approach view youth as assets and promote the idea that they should be engaged in decisions about their lives and communities. States have taken various approaches to involving young people in decisions about the services they receive. Most states have also established formal youth advisory boards to provide a forum for youth to become involved in issues facing those in care and aging out of care. Youth-serving organizations for current and former foster youth, such as Foster Club, provide an outlet for young people to become involved in the larger foster care community and advocate for other children in care. States are not required to utilize life skills assessments or personal responsibility contracts with youth to comply with the youth participation requirement, although some states use these tools to assist youth in making the transition to adulthood. Program Administration States administer their Chafee-funded programs in multiple ways. Some programs are overseen by the state program that addresses older and former foster youth, with an independent living coordinator and other program staff. For example, in Maine the state's independent living coordinator oversees specialized life skills education coordinators assigned to cover all of the state's Department of Health and Human Services district offices. In some states, like California, each county administers its own program with some oversight and support from a statewide program. Other states, including Florida, use contracted service providers to administer their programs. Many jurisdictions have partnered with private organizations to help fund and sometimes administer some aspect of their independent living programs. For example, the Jim Casey Youth Opportunities Initiative has provided funding and technical assistance to multiple cities to provide financial support and training to youth exiting care. ETV Program Administration The state with the placement and responsibility for a youth in foster care is to provide the voucher to that youth. The state must also continue to provide a voucher to any youth who is currently receiving one and moves to another state for the sole purpose of attending an institution of higher education. If a youth moves permanently to another state after leaving care and subsequently enrolls in a qualified institution of higher education, the state where he or she resides would provide the voucher. Generally, states administer their ETV program through their program that addresses older and former foster youth. However, some states administer the ETV program through their financial aid office (e.g., California Student Aid Commission) or at the local level (e.g., Florida, where all child welfare programs are administered through community-based agencies). Some states contract with a nonprofit service provider, such as Foster Care to Success. States and counties may use ETV dollars to fund the vouchers and the costs associated with program administration, including for salaries, expenses, and training of staff. States are not permitted to use Title IV-E foster care or adoption assistance program funds for administering the ETV program. However, they may spend additional funds from state sources or other sources to supplement the ETV program or use ETV funds to expand existing postsecondary funding programs. Several states have scholarship programs, tuition waivers, and grants for current and former foster youth that are funded through other sources. Funding Chafee and ETV funds are distributed to each state based on its proportion of the nation's children in foster care. States must provide a 20% match (in-kind or cash) to receive their full federal Chafee and ETV allotment. The Chafee program includes a "hold harmless" clause that precludes any state from receiving less than the amount of general independent living funds it received under the former independent living program in FY1998 or $500,000, whichever is greater. There is no hold harmless provision for ETV funds. States may use Chafee and ETV funds to supplement, and not supplant, any other funds that are available for the types of activities authorized under the Chafee program. Territories with an approved Title IV-E plan may also apply for Chafee funding. Currently, Puerto Rico and the U.S. Virgin Islands have approved plans. An Indian tribe, tribal organization, or tribal consortium may apply to HHS and receive a direct federal allotment of Chafee and/or ETV funds. To be eligible, a tribal entity must be receiving Title IV-E funds to operate a foster care program under a Title IV-E plan approved by HHS or via a cooperative agreement or contract with the state. Successful tribal applicants receive an allotment amount(s) out of the state's allotment for the program(s) based on the share of all children in foster care in the state under tribal custody. Tribal entities must satisfy the Chafee program requirements established for states, as HHS determines appropriate. Four tribes—the Prairie Band of Potawatomi (Kansas), Santee Sioux Nation (Nebraska), Confederated Tribe of Warm Springs (Oregon), and Port Gamble S'Klallam Tribe (Washington)—receive Chafee and ETV funds. A state must certify that it will negotiate in good faith with any tribal entity that does not receive a direct federal allotment of child welfare funds but would like to enter into an agreement or contract with the state to receive funds for administering, supervising, or overseeing Chafee and ETV programs for eligible Indian children under the tribal entity's authority. Appendix B provides the Chafee and ETV allotments for each state, four tribes, Puerto Rico, and the U.S. Virgin Islands in FY2018 and FY2019. Though not shown in the table, Chafee funds are often combined with state, local, and other funding sources. Unused Funds States and tribes have two fiscal years to spend their Chafee and ETV funds. If a jurisdiction does not apply for all of its allotment, the remaining funds may be redistributed among states that need these funds as determined by HHS. Table A-2 shows the percentage and share of funds returned for both programs from FY2005 through FY2014, as well as a list of jurisdictions that have returned these funds. FY2014 is the most recent year available. HHS was recently given authority to reallocate funds that are not spent within the two-year period to states and tribes that apply for the funding. If funds are reallocated, the statute specifies that the funds should be redistributed among the states and tribes that apply for any unused funds, provided HHS determines the state or tribe would use the funds according to the program purposes. Further, HHS is directed to allocate the funds based on the share of children in foster care among the states and tribes that successfully appl y for the unused funds. Any unspent funds can be made available to the applying states or tribes in the second fiscal year following the two-year period in which funds were originally awarded . Any redistributed funds are considered part of the state 's or tribe's allotment for the fiscal year in which the redistribution is made . Training and Technical Assistance Training and technical assistance grants for the Chafee and ETV programs had been awarded competitively every five years, most recently for FY2010 through FY2014. The National Child Welfare Resource Center for Youth Development (NCWRCYD), housed at the University of Oklahoma, provided assistance under the grant. Beginning with FY2015, HHS has operated the Child Welfare Capacity Building Collaborative via a contract with ICF International, a policy management organization, to provide training and technical assistance on a number of child welfare issues, including youth development. Data Collection The Chafee program required that HHS consult with state and local public officials responsible for administering independent living and other child welfare programs, child welfare advocates, Members of Congress, youth service providers, and researchers to "develop outcome measures (including measures of educational attainment, high school diploma, avoidance of dependency, homelessness, non-marital childbirth, incarceration, and high-risk behaviors) that can be used to assess the performance of states in operating independent living programs"; identify the data needed to track the number and characteristics of children receiving services, the type and quantity of services provided, and state performance on the measures; and develop and implement a plan to collect this information beginning with the second fiscal year after the Chafee law was enacted in 1999. In response to these requirements, HHS created the National Youth in Transition Database (NYTD). The final rule establishing NYTD became effective April 28, 2008, and it required states to report data on youth beginning in FY2011. HHS uses NYTD to engage in two data collection and reporting activities. First, states collect demographic data and information about receipt of services on eligible youth who currently receive independent living services. This includes youth regardless of whether they continue to remain in foster care, were in foster care in another state, or received child welfare services through an Indian tribe or privately operated foster care program. Second, states track information on outcomes of foster youth on or about their 17 th birthday, around their 19 th birthday, and around their 21 st birthday. Consistent with the authorizing statute for the Chafee program, HHS is to penalize any state not meeting the data collection procedures for the NYTD from 1% to 5% of its annual Chafee fund allotment, which includes any allotted or re-allotted funds for the general Chafee program only. The penalty amount is to be withheld from the current fiscal year award of the funds. HHS is to evaluate a state's data file against data compliance standards, provided by statute. However, states have the opportunity to submit corrected data. The text box indicates new information that HHS must report to Congress. Evaluation of Chafee-Funded Services The authorizing statute for the Chafee program requires HHS to conduct evaluations of state (or tribal) programs funded by the Chafee program deemed to be "innovative or of national significance." The law reserves 1.5% of total Chafee funding annually for these evaluations, as well as related technical assistance, performance measurement, and data collection. HHS conducted an evaluation of promising independent living programs from approximately 2007 to 2012, and is in the process of identifying new ways of conducting research in this area. Multi-Site Evaluation of Foster Youth Programs For the initial evaluation, HHS contracted with the Urban Institute and its partners to conduct what is known as the Multi-Site Evaluation of Foster Youth Programs. The goal of the evaluation was to determine the effects of programs funded by the Chafee authorizing law in achieving key outcomes related to the transition to adulthood. HHS and the evaluation team initially conducted an assessment to identify state and local programs that could be evaluated rigorously, through random assignment to treatment and control groups, as required under the law. Their work is the first to involve random assignment of programs for this population. The evaluation team examined four programs in California and Massachusetts—an employment services program in Kern County, CA; a one-on-one intensive, individualized life skills program in Massachusetts; and a classroom-based life skills training program and a tutoring/mentoring program, both in Los Angeles County, CA. The evaluation of the Los Angeles and Kern County programs found no statistically significant impacts as a result of the interventions; however, the life skills program in Massachusetts, known as Outreach, showed impacts for some of the education outcomes that were measured. The Outreach program assists youth who enroll voluntarily in preparing to live independently and in having permanent connections to caring adults upon exiting care. Outreach youth were more likely than their counterparts in the control group to report having ever enrolled in college and staying enrolled. Outreach youth were also more likely to experience outcomes that were not a focus of the evaluation: these youth were more likely to remain in foster care and to report receiving more help in some areas of educational assistance, employment assistance, money management, and financial assistance for housing. In short, the Outreach youth may have been less successful on the educational front if they had not stayed in care. Youth in the program reported similar outcomes as the control group for multiple other measures, including in employment, economic well-being, housing, delinquency, and pregnancy. Emerging Research HHS has contracted with the Urban Institute and Chapin Hall for additional research on the Chafee program. Citing the lack of experimental research in child welfare, the research team is examining various models in other policy areas that could be used to better understand promising approaches of working with older youth in care and those transitioning from care. Researchers have identified a conceptual framework that takes into account the many individual characteristics and experiences that influence a youth's ability to transition successfully into adulthood. The research team has also classified the various types of programs that foster youth could access to help in the transition, and the extent to which they are ready to be evaluated. In addition, researchers have published a series of briefs that discuss outcomes and programs for youth in foster care in the areas of education, employment, and financial literacy. The briefs discuss that few programs have impacts for foster youth in these areas. The briefs also address issues to consider when designing and evaluating programs for youth in care. Appendix A. Funding for the John H. Chafee Foster Care (Chafee) Program for Successful Transition to Adulthood and Education and Training Voucher (ETV) Program Appendix B. Other Federal Support for Older Current and Former Foster Youth In addition to the child welfare programs under Title IV-E of the Social Security Act, other federal programs provide assistance to older current and former foster youth. This appendix describes Medicaid pathways for foster youth who emancipated; educational, workforce, and housing supports; and a grant to fund training for child welfare practitioners working with older foster youth and youth emancipating from care. Medicaid The Centers for Medicare and Medicaid Services (CMS) at HHS administers Medicaid, a federal-state health program jointly financed by HHS and the states. Medicaid law provides for mandatory and optional pathways for youth who have aged out of foster care. Mandatory Pathway As of January 1, 2014, certain former foster youth are eligible for Medicaid under a mandatory pathway created for this population in the Affordable Care Act (ACA, P.L. 111-148 ). Former foster youth are eligible if they were "in foster care under the responsibility of the State" upon reaching age 18 (or up to age 21 if the state extends federal foster care to that age); were enrolled in Medicaid while in foster care; and are not eligible or enrolled in other mandatory Medicaid coverage groups. The ACA specifies that income and assets are not considered when determining eligibility for this group. Nonetheless, foster youth with annual incomes above a certain level may be required to share in the costs of their health care. In addition to the law, CMS has provided additional parameters on the new pathway via a final rule promulgated in November 2016 and policy guidance. The final rule specifies that former foster youth are eligible regardless of whether Title IV-E foster care payments were made on their behalf. States may not provide Medicaid to individuals who left foster care before reaching age 18 via this pathway. Further, states may not provide Medicaid coverage to former foster youth who move from another state; however, states could apply to HHS under a waiver to provide such coverage via the research and demonstration waiver authority for the Medicaid program. The Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act ( P.L. 115-271 ) amended the Medicaid statute on the former foster youth pathway. It will permit states, as of January 2023, to use state plan authority for providing coverage to former foster youth who move across state lines. The law directs HHS, within one year of the its enactment, to issue guidance to states on best practices for removing barriers and ensuring timely coverage under this pathway, and on conducting related outreach and raising awareness among eligible youth. Consistent with existing regulations, the final rule affirms that states may not terminate Medicaid eligibility for foster youth who reach age 18 without first determining whether they are eligible for other mandatory Medicaid eligibility pathways available to adults (e.g., the coverage pathway for pregnant women). Optional Pathway The pathway for former foster youth appears largely to supersede an optional pathway also provided for this population. The 1999 law ( P.L. 106-169 ) that established the Chafee program also created a new optional Medicaid eligibility pathway for "independent foster care adolescents"; this pathway is often called the "Chafee option." The law further defined these adolescents as individuals under the age of 21 who were in foster care under the responsibility of the state on their 18 th birthday. The law permits states to restrict eligibility based on the youth's income or resources, and whether or not the youth had received Title IV-E funding. As of late 2012, more than half (30) of all states had extended the Chafee option to eligible youth. Of these states, five reported requiring youth to have income less than a certain level of poverty (180% to 400%). Four states permitted youth who were in foster care at age 18 in another state to be eligible under the pathway. States also reported whether the youth is involved in the process for enrolling under the Chafee option. In 15 states, youth are not directly involved in the enrollment process. For example, some states automatically enroll youth. In the other 15 states, youth are involved in enrollment with assistance from their caseworker or they enroll on their own. Most states that have implemented the Chafee option require an annual review to verify that youth continue to be eligible for Medicaid. States generally have a hierarchy to determine under which pathway youth qualify. For example, in most states, youth who qualify for the Chafee option and receive Supplemental Security Income (SSI) would be eligible for Medicaid under the SSI Medicaid pathway. Educational Support Federal funding and other supports for current and former foster youth are in place to help these youth aspire to, pay for, and graduate from college. The Higher Education Act (HEA) authorizes financial aid and support programs that target this and other vulnerable populations. Federal Financial Aid For purposes of applying for federal financial aid, a student's expected family contribution (EFC) is the amount that can be expected to be contributed by a student and the student's family toward his or her cost of education. Certain groups of students are considered "independent," meaning that only the income and assets of the student are counted. Individuals under age 24 who are or were orphans, in foster care, or wards of the court at age 13 or older are eligible to apply for independent student status. The law does not specify the length of time that the youth must have been in foster care or the reason for exiting as factors for independent student status eligibility. However, the federal financial aid form, known as the Free Application for Federal Student Aid (FAFSA), instructs current and former foster youth that the financial aid administrator at their school may require the student to provide proof that they were in foster care. As required by the FY2014 appropriations law (2014, P.L. 113-76 ), the Department of Education (ED) modified the FAFSA form so that it includes a box for applicants to identify whether they are or were in foster care, and to require ED to provide these applicants with information about federal educational resources that may be available to them. Higher Education Support Programs The Higher Education Act provides that youth in foster care, including youth who have left foster care after reaching age 16, and homeless children and youth are eligible for what are collectively called the federal TRIO programs. The programs are known individually as Talent Search, Upward Bound, Student Support Services, Educational Opportunity Centers, and McNair Postbaccalaureate. The TRIO programs are designed to identify potential postsecondary students from disadvantaged backgrounds, prepare these students for higher education, provide certain support services to them while they are in college, and train individuals who provide these services. HEA directs the Department of Education (ED), which administers the programs, to (as appropriate) require applicants seeking TRIO funds to identify and make services available, including mentoring, tutoring, and other services, to these youth. TRIO funds are awarded by ED on a competitive basis. In addition, HEA authorizes services for current and former foster youth (and homeless youth) through TRIO Student Support Services—a program intended to improve the retention and graduation rates of disadvantaged college students—that include temporary housing during breaks in the academic year. In FY2019, Congress appropriated $1.1 billion to TRIO programs. Separately, HEA allows additional uses of funds through the Fund for the Improvement of Postsecondary Education (FIPSE) to establish demonstration projects that provide comprehensive support services for students who were in foster care (or homeless) at age 13 or older. FIPSE is a grant program that seeks to support the implementation of innovative educational reform ideas and evaluate how well they work. As specified in the law, the projects can provide housing to the youth when housing at an educational institution is closed or unavailable to other students. Congress appropriated $6 million in FY2018 and $5 million in FY2019 for FIPSE. Workforce Support Workforce Innovation and Opportunity Act Programs The Workforce Innovation and Opportunity Act (WIOA) authorizes job training programs to unemployed and underemployed individuals through the Department of Labor (DOL). Two of these programs—Youth Activities and Job Corps—provide job training and related services to targeted low-income vulnerable populations, including foster youth. The Youth Activities program focuses on preventive strategies to help in-school youth stay in school and receive occupational skills, as well as on providing training and supportive services, such as assistance with child care, for out-of-school youth. Job Corps is an educational and vocational training program that helps students learn a trade, complete their GED, and secure employment. To be eligible, foster youth must meet age and income criteria as defined under the act. Young people currently or formerly in foster care may participate in both programs if they are ages 14 to 24. In FY2018, Congress appropriated $903 million to Youth Activities and $1.7 billion to Job Corps. Housing Support Family Unification Vouchers Program Current and former foster youth may be eligible for housing subsidies provided through programs administered by the Department of Housing and Urban Development's (HUD's) Family Unification Vouchers program (FUP vouchers). The FUP vouchers were initially created in 1990 under P.L. 101-625 for families that qualify for Section 8 tenant-based assistance and for whom the lack of adequate housing is a primary factor in the separation, or threat of imminent separation, of children from their families or in preventing the reunification of the children with their families. Amendments to the program in 2000 under P.L. 106-377 made youth ages 18 to 21 eligible for the vouchers for up to 18 months if they are homeless or are at risk of becoming homeless at age 16 or older. The Housing Opportunity Through Modernization Act ( P.L. 114-201 ), enacted in July 2016, extended the upper age of eligibility for FUP vouchers, from 21 to 24, for youth who emancipated from foster care. It also extended assistance under the program for these youth from 18 to 36 months and allows the voucher assistance to begin 90 days prior to a youth leaving care because they are aging out. It also requires HUD, after consulting with other appropriate federal agencies, to issue guidance to improve coordination between public housing agencies, which administer the vouchers, and child welfare agencies. The guidance must address certain topics, including identifying eligible recipients for FUP vouchers and identifying child welfare resources and supportive families for families and youth (including the Chafee program). As of the date of this report, HUD has not issued such guidance. In correspondence with CRS, HUD explained that it has requested funding for this work, and until those funds can be secured, HUD and HHS staff are studying how youth and families are served by FUP. FUP vouchers were initially awarded from 1992 to 2001. Over that period, approximately 39,000 vouchers were distributed. Each award included five years of funding per voucher and the voucher's use was restricted to voucher-eligible families for those five years. At the end of those five years, public housing authorities (PHAs) were eligible to convert FUP vouchers to regular Section 8 housing vouchers for low-income families. While the five-year use restrictions have expired for all family unification vouchers, some PHAs may have continued to use their original family unification vouchers for FUP-eligible families and some may have chosen to use some regular-purpose vouchers for FUP families (but the extent to which this happened is unknown). Congress appropriated $20 million for new FUP vouchers in each of FY2008 and FY2009; $15 million in FY2010, $10 million in FY2017, and $20 million in FY2018 and FY2019. Congress has specified that amounts made available under Section 8 tenant-based rental assistance and used for the FUP vouchers are to remain available for the program. A 2014 report on the FUP program examined the use of FUP vouchers for foster youth. The study was based on a survey of PHAs, a survey of child welfare agencies that partnered with PHAs that served youth, and site visits to four areas that use FUP to serve youth. The survey of PHAs showed that slightly less than half of PHAs operating FUP had awarded vouchers to former foster youth in the 18 months prior to the survey. PHAs reported that youth were able to obtain a lease within the allotted time, and many kept their leases for the full 18-month period they were eligible for the vouchers. In addition, 14% of total FUP program participants qualified because of their foster care status. According to the study, this relatively small share was due to the fact that less than half of PHAs were serving youth, and these PHAs tended to allocate less than one-third of their vouchers to youth, among other findings. Other Support Older current and former foster youth may be eligible for housing services and related supports through the Runaway and Homeless Youth program, administered by HHS. The program is comprised of three subprograms: the Basic Center program (BCP), which provides short-term housing and counseling to youth up to the age of 18; the Transitional Living program (TLP), which provides longer-term housing and counseling to youth ages 16 through 22; and the Street Outreach program (SOP), which provides outreach and referrals to youth who live on the streets. Youth transitioning out of foster care may also be eligible for select transitional living programs administered by HUD, though the programs do not specifically target these youth. The program was funded at $127 million in FY2019. The Foreclosure Prevention Act of 2008 ( P.L. 110-289 ) was signed into law on July 30, 2008, and enables owners of properties financed in part with Low-Income Housing Tax Credits (LIHTCs) to claim as low-income units those occupied by low-income students who were in foster care. Owners of LIHTC properties are required to maintain a certain percentage of their units for occupancy by low-income households; students (with some exceptions) are not generally considered low-income households for this purpose. The law does not specify the length of time these students must have spent in foster care nor require that youth are eligible only if they emancipated.	Summary:	gov_report	1,024	null	20
crs_R45903	crs_R45903_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Since early 2018, certain foreign nations have targeted U.S. food and agricultural products with retaliatory tariffs (for more on tariffs, see Box 1 ) in response to U.S. Section 232 tariffs on steel and aluminum imports and U.S. Section 301 tariffs levied on imports from China. The first U.S. trade action occurred on March 8, 2018, when President Trump imposed tariffs of 25% on steel and 10% on aluminum imports (with some flexibility on the application of tariffs by country) using presidential powers granted under Section 232 of the Trade Expansion Act of 1962. Section 232 authorizes the President to impose restrictions on certain imports based on an affirmative determination by the Department of Commerce that the targeted import products threaten national security. The targeted exporters, China, Canada, Mexico, the European Union (EU), and Turkey, responded by levying retaliatory tariffs on U.S. food and agricultural products, and other goods. India proposed retaliatory tariffs but did not implement them until June 2019. A second action occurred in July 2018 when the Trump Administration used a Section 301 investigation to impose tariffs of 25% on $34 billion of selected imports from China, citing concerns over China's policies on intellectual property, technology, and innovation. In August 2018, the Administration levied a second round of Section 301 tariffs, also of 25%, on an additional $16 billion of imports from China. In September 2018, additional tariffs of 10% were applied to $200 billion of imports from China and, in May 2019, these were raised to 25%. On August 13, 2019, the Office of U.S. Trade Representative (USTR) published two lists of additional Chinese imports that would face 10% tariffs, effective September 1, 2019, and December 15, 2019. The imposition of the Section 301 tariffs on Chinese goods resulted in retaliatory tariffs by China. Additionally, in August 2019, China asked its state-owned enterprises to halt purchases of U.S. agricultural goods. On August 23, 2019, China further retaliated by levying two additional sets of tariffs: 5% or 10% tariffs on U.S. imports, including 695 different U.S. agricultural tariff lines effective September 1, 2019; and another 5% or 10% tariffs on U.S. imports including 184 different U.S. agricultural tariff lines effective December 15, 2019. During 2018, China, Canada, Mexico, the EU, and Turkey jointly levied retaliatory tariffs on more than 1,000 U.S. food and agricultural tariff lines. India prepared a list of U.S. products targeted for retaliatory tariffs in 2018 but refrained from implementing them. Then in 2019, India implemented retaliatory tariffs on certain U.S. lentils, apples, and tree nuts after the United States removed India from the U.S. Generalized System of Preferences (GSP) program on May 31, 2019. GSP provides duty-free tariff treatment for certain products from designated developing countries. India's removal from GSP is expected to raise duties valued at about $5 billion to $6 billion on goods the United States imports from Indiaâor slightly more than 10% of India's total 2018 exports of $54 billion to the United States. In response to U.S. action, India implemented the retaliatory tariffs identified in 2018, with some changes, effective June 16, 2019. On May 17, 2019, the Trump Administration reached an agreement with Canada and Mexico to remove the Section 232 tariffs on steel and aluminum imports from those countries and to remove all retaliatory tariffs imposed on U.S. goods. The Administration reduced tariffs on Turkish steel imports, and Turkey responded on May 21, 2019, by halving its retaliatory tariffs on U.S. imports. Report Objectives This report recaps the chronology and the effect of U.S. Section 232 and Section 301 actions on U.S. food and agricultural imports and the retaliatory tariffs imposed on U.S. agricultural exports by its trading partners during 2018 and the spring of 2019. As China is subjected to the largest set of U.S. tariff increases and has levied the most expansive set of retaliatory tariffs on U.S. agricultural products, this report largely focuses on the effects of Chinese retaliatory tariffs on U.S. agricultural trade. Because almost all U.S. food and agricultural tariff lines are affected by Chinese retaliatory tariffs, the report provides illustrative examples using selected agricultural products. Thus, the report is not a comprehensive review of the effect of Chinese retaliatory tariffs on every U.S. agricultural product exported to China. Retaliatory tariffs have made U.S. products relatively more expensive in China, with the result that Chinese imports from other countries have increased in lieu of U.S. products. This report discusses the short- and long-run economic effects of the changes in trade flows, locally, nationally, and globally. The long-run effects may potentially be more problematic, as China and Russia have increased their agricultural productivity over the past two to three decades, and China has increased investments in other countries to develop potential future sources of imports. Additionally, China has improved market access for imports from other countries while it has increased tariffs on U.S. imports. Finally, the report presents the views of selected U.S. agricultural stakeholders on retaliatory tariffs, and it identifies issues that may be of interest for Congress. Retaliatory Tariffs on U.S. Agricultural Exports Except for China, which faces both Section 232 and Section 301 tariffs, other countries' retaliatory tariffs respond only to U.S. Section 232 tariffs on U.S. imports of certain steel and aluminum products. Higher retaliatory tariffs represent increases above the World Trade Organization (WTO) Most Favored Nation (MFN) tariff rates or beyond any existing preferential tariff rates. Retaliatory tariffs for Canada and Mexico are increases from the existing North American Free Trade Agreement (NAFTA) rates, most of which, at zero percent, are below the MFN rates. Table 1 summarizes the retaliatory tariff increases on U.S. agricultural products by comparing tariff increases of September 2018 with the retaliatory tariffs in effect in June 2019. A potential reason for observed changes in applied tariffs rates is that some tariffs are levied based on quantity (such as per ton or per kilograms) and, for purposes of analyses, tariffs are converted to percentage of total import value, ad valorem rates (see Box 2 ). When the price of a traded product changes, the ad valorem tariff rate imposed on a product can change. Additionally, it is not always possible to match the U.S. Harmonized Tariff Schedule (HTS) with the retaliatory country's 8- or 10-digit tariff code (see Box 1 ) . Thus, it may be difficult to link the U.S. Census Bureau trade data with the tariff codes of products affected by retaliatory tariffs. Therefore, this report makes use of both U.S. export data and partner country import data as appropriate to provide the most accurate measure of the magnitude of the affected U.S. trade. For U.S. retaliating trade partners, Table 1 provides the minimum, maximum, and simple (not trade-weighted) average retaliatory tariff hike rates. Chinese Retaliatory Tariffs18 China is subject to the largest set of U.S. tariff increasesâboth the U.S. Section 232 steel and aluminum tariffs and the Section U.S. 301 tariffs in response to unfair trade practices. As a result, China has countered with an expansive list of retaliatory tariffs. In particular, all U.S. products affected by Chinese retaliatory tariffs in response to the U.S. Section 232 action also faced additional retaliatory tariffs in response to U.S. Section 301 trade action. China first retaliated against U.S. Section 232 action in April 2018, by raising tariffs on certain U.S. imports including agricultural products. During the first round of Chinese retaliatory tariffs, these products included pork, fruit, and tree nuts. In July 2018, China retaliated against U.S. Section 301 tariffs by raising tariffs on an expanded number of products, including most U.S. agricultural products exported to China. Tariffs were also raised on products affected by the earlier April 2018 retaliatory tariffs in response to U.S. Section 301 action, with most subject to an additional tariff of 25%. China levied two more rounds of retaliatory tariff increases (against U.S. Section 301 action) in 2018âin August and Septemberâexpanding the coverage of the affected products. In September 2018, China imposed 5% and 10% tariff increases on certain products (including agricultural products) which had not been subject to any retaliatory tariffs in response to U.S. Section 301 action. In June 2019, China increased tariffs on some additional products that had not been previously targeted with retaliatory tariffs, as well as some products that had been hit with the 5% or 10% retaliatory tariff in September 2018. As a result, almost all U.S. agricultural products shipped to China face retaliatory tariffs, ranging from 5% to 50% above their MFN tariff rates through August 31, 2019, with a simple average tariff rate increase of 24% across all products as of July 2019. See Table A-1 for information on average Chinese retaliatory tariffs across different food and agricultural product categories. Retaliatory Tariffs by Canada and Mexico In June 2018, Mexico levied a 15% tariff on U.S. sausage imports; a 20% tariff on other pork products, certain cheeses, apples, potatoes, and cranberries; and a 25% tariff increase on whey, blue-veined cheese, and whiskies. Starting in July 2018, Canada imposed a retaliatory tariff of 10% on certain U.S. products including dairy, poultry, and beef products; coffee, chocolate, sugar, and confectionery; prepared food products; condiments; bottled water; and whiskies. To facilitate the ratification of the proposed U.S.-Mexico-Canada Agreement (USMCA) that the leaders of the three countries agreed to on September 30, 2018, the United States removed the Section 232 tariffs on steel and aluminum imports from Canada and Mexico on May 17, 2019, and, in turn, these countries removed their retaliatory tariffs on U.S. imports. Retaliatory Tariffs by the EU, Turkey, and India In June 2018, in response to U.S. Section 232 tariffs, the EU imposed a 25% tariff on imports of U.S. corn, rice, sweetcorn, kidney beans, certain breakfast cereals, peanut butter, orange juice, cranberry juice, whiskies, cigars, and other tobacco products, and a 10% tariff on certain essential oils. In June 2018, Turkey also responded to U.S. Section 232 tariffs on Turkish steel imports by levying retaliatory tariffs on selected U.S. imports. On August 10, 2018, the United States doubled its tariffs on steel imports from Turkey to 50%, stating that the 25% tariffs did not reduce Turkish steel imports as much as anticipated. Turkey responded by doubling tariffs on certain U.S. imports including a 20% retaliatory tariff on U.S. tree nuts and certain prepared food, 25% and 50% tariffs on U.S. rice (depending on whether milled or unmilled), 60% tariff on U.S. tobacco, and 140% tariff on U.S. alcoholic beverages including whiskies. When the United States reduced its tariffs on Turkish steel imports on May 21, 2019, Turkey halved its retaliatory tariffs on U.S. imports. India identified certain U.S. food products for retaliatory tariffs in 2018 but did not levy them until June 16, 2019. Indian tariff hikes above the MFN rate are 10% for imports of U.S. chickpeas, 29% for over-quota shelled almonds (ad valorem rate), and 20% for U.S. walnuts, apples, and lentils. U.S. Agricultural Trade Affected by Tariff Hikes Foreign nations may target U.S. food and agricultural products with retaliatory tariffs for several reasons. First, the United States is the largest exporter of food and agricultural products, so many countries are able to retaliate against those goods. Second, agricultural commodities are often more easily substituted from among potential suppliers, so curbing imports from one country would not necessarily limit an importing country's access to the commodity. Third, several food and agricultural products are produced primarily in certain regions of the United States, and thus may be targeted with a view to negatively and disproportionately affecting the constituents of specific U.S. lawmakers. The retaliatory tariffs imposed by U.S. trading partners affected many products exported by the United States, including meats, grains, dairy products, specialty and horticultural crops, and alcoholic beverages. As discussed in Box 3 , "Tariffs Increase Import Prices," a number of factors affect trade, including tariffs that tend to increase the price of imported goods. In 2018, total imports of affected U.S. food and agricultural products by all retaliating countries amounted to almost $22 billion, based on customs data from these countries. This represents a 27% decline from the $29.7 billion in 2017 ( Figure 1 ). Based on Chinese customs data, the total value of Chinese agricultural imports from the United States affected by retaliatory tariffs declined from $22.5 billion in 2017 to $14.7 billion in 2018. Canadian customs data show that imports of U.S. agricultural products declined to $2.3 billion in 2018 from $2.4 billion in 2017. Canadian retaliatory tariffs include certain tariff lines covering prepared product categories under beef, poultry, dairy, fruit, vegetables, drinks, coffee and spices, chocolate and confectionary, and whiskey. As noted earlier, Canada removed its retaliatory tariffs on U.S. imports in May 2019, in response to the U.S. removal of Section 232 tariffs on steel and aluminum imports from Canada. A review of Mexican customs data finds that imports of U.S. agricultural products by Mexico also declined from $2.6 billion in 2017 to $2.5 billion in 2018, largely accounted for by sausage and pork products. Mexico's imports of these products declined from $2.3 billion in 2017 to $1.6 billion in 2018. In addition to pork products, Mexico had imposed retaliatory tariffs on cheeses, apples, prepared fruit, vegetables and other food, and whiskey. Mexico also removed its retaliatory tariffs on U.S. imports in May 2019, in response to U.S. removal of Section 232 tariffs on steel and aluminum imports from Mexico. EU customs data show the import value of U.S. food and agricultural products affected by the EU retaliatory tariffs increased to $1.3 billion in 2018 from $1.1 billion in 2017. The EU imposed tariff hikes on certain prepared vegetables, pulses, breakfast cereals, fruit juices, peanut butter, tobacco products, whiskey, and essential oils. A temporary surge in sales in the months prior to the imposition of duties appears to have offset a slump in sales that coincided with the onset of retaliatory duties later in the year ( Figure 2 ). Based on the quarterly import data, by the first quarter of 2019, the total value of EU imports of U.S. products affected by retaliatory tariffs was lower than during the last quarter of 2017 or the first quarter of 2018. Since the second quarter of 2018, EU imports of affected food and agricultural products from the United States declined. As discussed above, beyond the tariff increases, a number of factors may have contributed to this reduction in imports. For instance, when countries first released their proposed lists of products that they targeted for retaliation, some EU importers may have imported larger quantities of the affected products prior to the imposition of the duties, thus boosting EU imports of U.S. agricultural goods in 2018. Similar to the EU, the total value of Turkish imports of U.S. food and agricultural products affected by retaliatory tariffs increased between 2017 ($299 million) and 2018 ($316 million), based on Turkish customs data. Turkey had imposed tariff hikes on certain tree nuts, prepared food, rice, tobacco, whiskey, and other alcoholic beverages. Imports in the months prior to the imposition of duties had increased ( Figure 2 ), which may have offset the decline in imports during the second half of 2018. In the third and fourth quarter of 2018, Turkish imports of affected U.S. food and agricultural products declined. Since May 2019, Turkey halved its retaliatory tariffs on imports from the United States. During 2018, India did not levy any retaliatory tariffs on imports of U.S. food and agricultural products. Starting in June 16, 2019, India implemented retaliatory tariffs on imports of U.S. almonds, walnuts, chickpeas, lentils, and apples. Based on the Indian customs data, the total value of Indian imports of these products was $824 million in 2017 and $859 million in 2018. U.S. Agricultural Exports to Retaliating Countries Table 2 presents U.S. agricultural exports to retaliating and nonretaliating countries, in nominal values, from 2014 to 2018. As discussed in Box 1 , U.S. exports to trading partners and the reported import values in destination countries can differ due to differences in HS classification of goods in different countries. Canada, the EU, Mexico, and Turkey levied retaliatory tariffs in 2018 on selected U.S. agricultural products, while China imposed retaliatory tariffs on almost all U.S. food and agricultural products. During 2018, India did not levy any retaliatory tariffs. Thus, the changes in 2018 U.S. food and agricultural exports, compared to prior years, varied across these countries ( Table 2 ). Despite the retaliatory tariffs, U.S. agricultural exports grew from $138 billion in 2017 to $140 billion in 2018. Greater U.S. exports of products to nonretaliating countries ($76 billion in 2018, up from $66 billion in 2017) offset the value of trade lost to China and Turkey. In addition, increased U.S. exports of products without retaliatory tariffs and products targeted for retaliatory tariffs during the months prior to their implementation (to Canada, Mexico, and the EU) also helped to offset the decline in exports of products with retaliatory tariffs to these countries. U.S. Exports Under Chinese Retaliatory Tariffs45 The Chinese market is important for several U.S. agricultural products. For example, in 2016 and 2017, the United States supplied over a third of China's total soybean imports, almost all of China's distillers' grain imports (primarily used as animal feed), and most of China's sorghum imports. In 2017, the Chinese market accounted for about 57% of global U.S. soybean exports, 17% of global U.S. cotton exports, 80% of global U.S. sorghum exports, 11% of global U.S. dairy product exports, 10% of global U.S. pork exports, 6% of global U.S. wheat exports, and 5% of global U.S. fruit exports. In response to U.S. Section 232 and Section 301 tariffs on U.S. imports of Chinese goods imposed in 2018, China levied retaliatory tariffs on imports of almost all U.S. agricultural products. In 2017, China was the second-leading export market by value for U.S. agricultural products. However, after the imposition of retaliatory tariffs on U.S. imports beginning in April 2018, U.S. agricultural exports to China experienced a 53% decline from $19.5 billion in 2017 to $9.2 billion in 2018 ( Figure 3 ). China thus moved down in rank to become the fourth-largest U.S. agricultural market, after Canada, Mexico, and Japan. Among other goods, China imposed a 25% retaliatory tariff on U.S. soybeans in July 2018. Since 2000, China had been the top export market for U.S. soybeans. In 2017, China imported about $12 billion worth of U.S. soybeans, accounting for 57% of the total value of all U.S. soybean exports that year. With higher tariffs in place, China has been purchasing more soybeans from Brazil and other countries to meet its demand. Consequently, U.S. soybean exports to China in 2018 declined to $3 billion ( Figure 3 ). U.S. Census Bureau trade data indicate China was still the top foreign destination for U.S. soybeans in 2018, followed by Mexico, which imported $1.8 billion of U.S. soybeans. Reduced Chinese import demand in 2018 contributed to declining farm prices for affected commodities and lower U.S. agricultural exports to China for several commodities, including sorghum, soybeans, cotton, and pork. Consequently, U.S. soybean prices reached 10-year lows during July-October 2018 ( Figure 4 ), weighing on prices of other agricultural commodities, such as corn, that compete with soybeans for acreage. Prices recovered some during the last quarter of 2018, coincident with reported commitments by China to purchase a "very substantial amount of U.S. agricultural" goods. However, Chinese purchases failed to materialize and U.S. commodity prices resumed their downward trend through the first quarter of 2019 before stabilizing. As U.S. soybean prices declined in 2018, Brazilian soybean prices started to rise, indicative of a greater demand for Brazilian soybeans from China ( Figure 4 ). Since 2007, Brazilian and U.S. soybean prices had tended to move together. Starting in April 2018, U.S. soybean prices started to fall and Brazilian soybean prices started to rise. China's imposition of a 25% tariff on U.S. soybeans in July 2018 initially precipitated a widening of the gap between the two prices. On October 23, 2018, U.S. soybean Free on Board (FOB) prices were $86 per metric ton lower than Brazilian (ParanaguÃ¡) FOB prices. The Brazilian soybean price started to fall in late October in anticipation of a record-high South American soybean harvest. U.S. soybean prices started to climb at the same time, partly due to farmers' willingness to hold stocks and in response to larger exports to non-Chinese destinations. Anticipation of Chinese purchases also contributed to rebounding of U.S. prices. As Chinese purchases did not materialize, Brazilian and U.S. soybean prices started to diverge again in May 2019. Although soybeans have been the agricultural commodity most affected by retaliatory tariffs (largely due to China's dominant role in the global soybean market), nearly all U.S. agricultural exports to China declined in 2018 relative to 2017 (see Table 3 ). Key Competitors for China's Agricultural Market56 With retaliatory tariffs making U.S. agricultural products more expensive for Chinese buyers, exports from other countries to China increased during 2018. Some studies suggest that Brazil could become China's primary soybean supplier. Another study concludes that U.S.-China tariff escalation would make suppliers in the rest of the world more competitive relative to U.S. and Chinese suppliers. Russia also contends that it may become a major U.S. competitor for China's agricultural import market, although market watchers expect Russia will need years to become a major agricultural supplier to China. To explore these assertions, CRS examined Chinese import data to identify foreign sources that may have partially replaced some of the 2018 U.S. agricultural exports to China. Note that various factors can result in data differences between U.S. exports from the U.S. Census Bureau and imports from Chinese customs data ( Box 4 ). China's Total Annual Agricultural Imports According to Chinese customs data, China's imports of agricultural products were $117 billion in 2014 as compared to $127 billion in 2018, in nominal terms ( Figure 5 ). In 2014, the United States was the largest source of Chinese agricultural imports, accounting for nearly a quarter, or $28 billion, of China's total imports. Since 2017, Brazil and several other countries increased their shares of China's total imports, with Brazil overtaking the United States as China's largest agricultural supplier in 2017. Since the imposition of the retaliatory tariffs on U.S. imports in 2018, U.S. agricultural shipments to China declined to $15 billion, compared to $23 billion in 2017, even as overall Chinese imports increased to $127 billion. It is noteworthy that in 2016, when China's total agricultural imports were at the lowest point between 2014 and 2018, at $105 billion, U.S. market share was 21%, compared with 2018, when China's total agricultural imports were at $127 billion but U.S. market share was 12%. During the same period, Brazil's market share grew from 18% in 2016 to 26% in 2018. Additionally, China's imports from other countries increased, as indicated in Figure 5 . Brazil appears to be the primary beneficiary of Chinese retaliatory tariffs on U.S. imports, with increased exports to China in 2018 of soybeans, cotton, tobacco, pork, and oilseeds. Australia also registered growth in import market shares for cotton, sorghum, pulses, fruit and nuts, dairy, and hides and skins. Canada increased its exports to China of feed and fodder products, hides and skins, and wheat. New Zealand's share of China's import market saw gains in dairy, and hides and skins. Thailand increased its export shipments of fruit, nuts and starches, and malt to China, while increased shipments from Indonesia were largely fats and oils. Additionally, Russia has stated that it is ready to step in to fill in the gaps created by reductions in U.S. food and agricultural exports to China, according to various news media reports, although market watchers expect Russia will need years to become a major agricultural supplier to China. In July 2018, Chinese Commerce Minister Zhong Shan agreed with his Russian counterparts to "deepen trade in soybeans and other agricultural products." China's imports of food and agricultural products from Russia increased 61%, from $679 million to nearly $1.1 billion, between 2017 and 2018, with strong import growth in oilseeds, wheat, fats and oils, cocoa and related products, beer, and animal products. Various other countries from Central Asia, South and Southeast Asia, and Africa increased their exports of food and agricultural products to China during 2018 compared with 2017. Notably, China's wheat imports from Kazakhstan grew 34% and corn imports from Ukraine rose 20%. U.S. agricultural interests have reported concerns that the U.S.-China trade war in the form of tariffs and tariff retaliation could escalate further, potentially resulting in widespread, long-term damage, particularly for firms with complex international supply chains. For American farmers, the escalating conflict with China has contributed to declining soybean and related agricultural commodity prices in the short run, but studies indicate that the long-term consequences could be complex and have long-lasting impacts. The following section examines how major U.S. agricultural product market shares fared in the Chinese import market during 2018. It also presents China's imports of selected agricultural commodities on a monthly basis starting in January 2018, through the first trimester of 2019 when the different retaliatory tariffs became effective. China's Imports of Soybeans According to Census data, China has been the top export market for U.S. soybeans since 2000. China imported $12 billion worth (32 million metric tons) of U.S. soybeans in 2017, accounting for 57% of the total value and volume of all U.S. soybean exports that year. With higher tariffs on U.S. soybeans, China has been purchasing more soybeans from Brazil and other countries to meet its demand. Consequently, U.S. soybean exports to China declined to $3 billion (8 million metric tons) in 2018. Based on Census trade data, China was still the top destination for U.S. soybeans in 2018, followed by Mexicoâwhich imported $1.8 billion worth of U.S. soybeans. According to China's monthly customs data, China's import of U.S. soybeans in January 2018 was $2.5 billion ( Figure 6 ). China's monthly imports of U.S. soybeans started to decline after China announced retaliatory tariffs in response to U.S. Section 232 tariffs in April 2018, which did not include U.S. soybeans. By the time China imposed retaliatory tariffs in response to U.S. Section 301 tariffs (which included U.S. soybeans) in July 2018, China's import of U.S. soybeans had decreased to about $140 million for that month (from $2.5 billion in January 2018). U.S. soybean shipments to China continued to decline until November 2018, when China did not import any U.S. soybeans. In December 2018, the White House announced that China had committed to purchase a "very substantial amount of agricultural" goods. Following this and other announcements, China purchased U.S. soybeans during the first trimester of 2019. The largest of these purchases, worth $700 million, occurred in April 2019. However, China's imports of U.S. soybeans declined in May 2019, coincident with the continued escalation of the U.S.-China trade dispute and the imposition of an increase in the third round of U.S. Section 301 tariffs on Chinese imports in May 2019. During this tariff dispute, China has turned increasingly to Brazil to meet its demand for soybeans. In January 2018âprior to the tariff disputeâChinese imports of Brazilian soybeans totaled less than $900 million, before increasing in May and June of 2018, when shipments of newly harvested soybeans from the Southern Hemisphere to China increased. By July 2018, Brazilian shipments were on the decline when China imposed 25% retaliatory tariffs on U.S. soybeans. Normally, newly harvested U.S. soybean shipments to China would have increased in the fall of 2018, whereas Chinese purchases of U.S. soybeans slowed to almost nil and were outpaced by Brazilian shipments to China. From February to May 2019, China expanded its purchases of U.S. soybeans, while also buying soybeans from Brazil, and increasing its soybean imports from Argentina, Russia, and Central Asian countries. China's Imports of Cotton According to Census trade data, U.S. cotton exports to China totaled over $1 billion in 2014. From 2017 to 2018, U.S. cotton exports to China declined 6%, from $978 million to $924 million. Monthly Chinese customs data indicate that China's imports of U.S. cotton have decreased since the imposition of retaliatory tariffs in July 2018 ( Figure 7 ). During January 2018, China's cotton imports from the United States totaled $140 million. Following the announcement of retaliatory tariffs on some U.S. imports (in response to U.S. Section 232 action) in April 2018, China's imports of U.S. cotton shrank to $27 million in October 2018. While Chinese imports from the United States declined, China's imports from other countries have increased. Cotton shipments from Brazil and Australia posted the largest increases, followed by imports from India and Uzbekistan. Additionally China's imports of cotton from other Central Asian and West African countries have risen since June 2018 ( Figure 7 ). On July 26, 2019, China reportedly approved some domestic textile mills to buy 50,000 metric tons of U.S. cotton without being subject to retaliatory tariffs. However, since President Trump's announcement to levy 10% Section 301 tariffs on the remaining Chinese imports that were not subject to Section 301 tariffs, China responded in August 2019 by asking its state-owned enterprises to halt purchases of U.S. agricultural goods. China's Imports of Wheat In 2016, the United States supplied 26% of China's wheat imports. This share increased to 40% in 2017, but declined to 14% in 2018. Canadian wheat exports have largely replaced U.S. wheat shipments to the Chinese market, with Canada's share of China's wheat imports rising from 27% in 2016 to 54% in 2018. Kazakhstan and Russia also have increased their wheat exports to China in the wake of 25% Chinese retaliatory tariffs on U.S. wheat imports, which have been in effect since July 2018. From January to June 2018, the United States shipped a total of $113 million of wheat to China ( Figure 8 ), compared with $256 million of U.S. wheat shipped during the same period in 2017. After China levied retaliatory tariffs on U.S. wheat in July 2018, U.S. wheat shipments to China were nil for the rest of the year. China imported $208 million of U.S. wheat in 2016 and $390 million of U.S. wheat in 2017. In March 2019, China imported $12 million of U.S. wheat. According to Chinese customs data, there have been no additional U.S. wheat shipments to China as of May 2019. China's Imports of Sorghum The United States accounted for nearly 90% of China's total sorghum imports in 2016 and 2017. The value of U.S. shipments of sorghum declined 24%, from close to $1 billion in 2017 to $726 million in 2018. China's monthly imports of U.S. sorghum have been negligible since China implemented retaliatory tariffs on them in July 2018 ( Figure 9 ). U.S. imports started to decline after May 2018, following China's imposition of retaliatory tariffs on some agricultural products in response to U.S. Section 232 tariffs in April 2018. Later, China imposed a 25% retaliatory tariff on U.S. sorghum in July 2018, leading to declines in U.S. sorghum shipments to China. China's imports of U.S. sorghum declined after retaliatory tariffs were imposed, but China continued to import limited quantities from Australia, Myanmar, and Argentina. However, in the absence of Chinese purchases of U.S. sorghum, China's total sorghum imports since October 2018 have been negligible ( Figure 9 ). Therefore, despite the retaliatory tariffs, U.S. market share in 2018 was about 85% of China's total sorghum imports for the year. On July 26, 2019, China reportedly allowed several domestic companies to buy U.S. sorghum without being subject to retaliatory tariffs. However, since President Trump's announcement to levy 10% Section 301 tariffs on remaining Chinese imports that do not yet have any Section 301 tariffs imposed on them, China responded in August 2019 by asking its state-owned enterprises to halt purchases of U.S. agricultural goods. China's Imports of Pork and Pork Products The United States supplied 13% of China's total pork imports in 2016 ($400 million) and 2017 ($286 million). In 2018, U.S. pork shipments to China declined to $130 million and accounted for 6% of China's total pork imports. U.S. pork shipments to China began to decline in April 2018 following China's imposition of 25% retaliatory tariffs on U.S. pork (HS 0203 lines) in response to U.S. Section 232 tariffs on U.S. imports of Chinese steel and aluminum products ( Figure 10 ). In July 2018, these HS lines were subject to an additional 25% retaliatory tariff. This coincided with a further decline in Chinese imports of U.S. pork products from July through December 2018. Unlike the case of sorghum, China has continued to import some U.S. pork products, and import volumes generally increased from January through May 2019. Since the summer of 2018, China has suffered from a serious outbreak of African Swine Fever (ASF). Between September 2018 and May 2019, China reported over 2 million culled hogs. In March 2019, USDA reported that despite the retaliatory tariffs, because of ASF, U.S. pork products are entering China and USDA expects China's imports of U.S. pork to climb in 2019 due to the liquidation of some of China's hogs in an effort to control ASF. However, USDA reported that U.S. pork products still face Chinese retaliatory tariffs, which makes U.S. products relatively more expensive compared with pork from other countries. On July 26, 2019, China reportedly approved requests from several domestic companies to buy U.S. pork products without being subject to retaliatory tariffs. However, since President Trump's August 2019 announcement to levy 10% Section 301 tariffs on remaining Chinese imports that do not yet have any Section 301 tariffs levied on them, China responded by asking its state-owned enterprises to halt purchases of U.S. agricultural goods. On August 23, 2019, China imposed additional 10% tariffs on certain U.S. pork products, effective September 1, 2019, in response to new U.S. Section 301 tariffs on U.S. imports from China. China's Imports of Dairy Products Since 2016, the United States has been the third-largest supplier of dairy products to China ($1.3 billion in 2018), among over 140 suppliers, behind New Zealand ($4.2 billion) and the Netherlands ($2 billion). China is a growing market for dairy products. Chinese imports of dairy products increased over 50% from $10 billion in 2016 to $15 billion in 2018. Given the diversity of dairy product tariff lines and the varying rates of Chinese retaliatory tariffs levied on them, the trade effects on the aggregate group are not as clear as they are for other individual commodities. Figure 11 presents China's monthly imports of U.S. dairy products, since the large number of suppliers and differences in market shares across the suppliers are difficult to present in a single chart. China imposed retaliatory tariffs on U.S. dairy products in July 2018. Given the diversity of dairy tariff lines, there is no clear trend in China's monthly imports of U.S. dairy products during the second half of 2018 and early 2019 ( Figure 11 ). Instead, annual U.S. dairy shipments to China increased 15% from $1.2 billion in 2017 to $1.3 billion in 2018. However, in China's growing market, imports from competitor countries grew faster from 2017 to 2018, with New Zealand's shipments increasing 15% from $3.7 billion to $4.2 billion; the Netherlands' shipments increasing 35% from $1.5 billion to $2 billion; and Australia's shipments increasing 32% from $1 billion to $1.3 billion. Although U.S. dairy shipments to China do not show any clear trend since January 2018, the retaliatory tariffs are likely contributing to faster market share growths for U.S. competitors in China than for the U.S. dairy sector, particularly since some dairy products are levied additional 5% retaliatory tariffs effective September 1, 2019. China's Imports of Hides and Skins The United States is the largest supplier of hides and skins to China, accounting for about 41% of China's total imports from 2016 to 2018. In 2017, shipments of U.S. hides and skins to China amounted to $918 million. After the imposition of retaliatory tariffs in July 2018, Chinese imports of U.S. hides and skins declined, with China's 2018 U.S. hides and skins imports totaling $664Â million. Major U.S. competitors in China's hides and skins import market are Australia, Canada and New Zealand ( Figure 12 ). These countries have not been able to fill the gap created by the decline in U.S. shipments of hides and skins to China. Consequently, China's total hides and skins imports fell 25% in 2018, to $1.6 billion from $2.2 billion in 2017. U.S. shipments of hides and skins to China declined 28% during the same period. Notwithstanding the tariffs on U.S.-origin hides and skins, the decline in U.S. shipments largely mirrored the overall decline in China's imports, with the result that the United States continued to supply about 41% of China's total hides and skins imports in 2018, the same share as in the previous two years. U.S. shipments of hides and skins to China may further drop with the additional 10% retaliatory tariff on U.S. imports that became effective September 1, 2019. Retaliatory Partner Imports of Other Agricultural Products Analysis conducted by economists from University of California, Davis (UC Davis) found that Chinese retaliatory tariffs decreased U.S. alfalfa exports to China in 2018 compared to the previous two years. From 2016 to 2018, the United States supplied the largest share of China's alfalfa imports, accounting for about 79% of China's total alfalfa import market share in 2016 ($417 million) and 72% ($534 million) in 2018. In January 2018, China purchased U.S. alfalfa valued at $40 million. Following the imposition of retaliatory tariffs, U.S. monthly shipments of alfalfa to China started to decline in the summer of 2018. In November 2018, China's monthly imports of U.S. alfalfa amounted to $16 million and totaled $17 million in December 2018. Another study from UC Davis indicates that U.S. pistachio exports also declined due to retaliatory tariffs from China and Turkey. A third study from UC Davis estimated a combined short-run export loss for 2018 of $2.64 billion for almonds, apples, pistachios, walnuts, pecans, sweet cherries, oranges, table grapes, raisins, and sour cherries in four major import markets (China including Hong Kong, India, Mexico, and Turkey). It stands to reason that Chinese retaliatory tariffs may have also affected U.S. exports of certain other field crops, livestock and animal products, other specialty crops, and processed food products that are not covered in this report. Economic Impact of Retaliatory Tariffs U.S. agriculture, as a whole, is subject to intense competition, in both domestic and international markets. As a result, most commodity sectors operate with thin profit margins, making international sales an important component of revenue. Tariffs, by design, raise the cost of imported products (see Box 3 ). In general, an increase in import prices due to higher tariffs leads to a decrease in quantities purchased of the affected products as importers switch to other foreign suppliers or to alternate products within the domestic market. Thus, the trade impact of such a price increase will depend in large part on the number of available alternate foreign suppliers and the availability of substitutes within the domestic market. Furthermore, a decrease in exports will have an economy-wide effect as the supporting infrastructureâincluding farms, marketing cooperatives, warehousing and processing facilities, and transportation networks, for exampleâall lose business and revenues. This loss ripples further through the general economy and can cause decreases in employment and local, state, and federal tax revenues. This section of the report examines the short-term market impacts and selected economic analyses of longer-term impacts of the retaliatory tariffs. Short-Run Impacts In the short run (see Box 5 ), retaliatory tariffs resulted in lower 2018 purchases of U.S. agricultural products by countries implementing these tariffs. The prospects for U.S. agricultural exports to China in 2019 appear to be along the same trajectory. As discussed earlier ( Figure 2 ), U.S. food and agricultural imports by the EU and Turkey during the first quarter of 2019 were below the level of imports during the same period in 2017 and 2018. Similarly, an examination of U.S. monthly exports to China from January to April 2019 demonstrates that the first quarter 2019 agricultural export levels have been below the export levels during the same period in 2017 and 2018 ( Figure 13 ). Generally, fall harvested crops are exported during late fall and early winter months, and export levels decline during the spring. Note that no retaliatory tariffs were in effect during 2017 or the first quarter of 2018. China levied the first round of retaliatory tariffs on U.S. imports in April 2018, in response to U.S. Section 232 tariffs. Other retaliating countries followed China's action with retaliatory tariffs in June 2018. Additionally, China expanded the range of affected U.S. imports and increased tariffs in additional rounds of retaliatory actions during the summer and fall of 2018, in response to U.S. Section 301 tariffs. With the continuation of existing retaliatory tariffs on almost all U.S. agricultural HS lines, China's proclamation that its state-owned enterprises will halt purchases of U.S. agricultural goods, and the 5% or 10% additional increase in retaliatory tariffs effective September and December 2019, U.S. exports of agricultural products affected by retaliatory tariffs could potentially continue to lose some market share in China. In addition to export losses, U.S. agriculture is facing other challenges in 2019. Abundant domestic and international supplies of grains and oilseeds in 2018 contributed to a fourth straight year of relatively weak agricultural commodity prices compared to previous years. U.S. soybean output and stocks were at record highs during 2018, putting downward pressure on soybean prices. Lower soybean prices contributed to lower corn prices during fall of 2018, as markets speculated that farmers would switch soybean acres to corn in 2019 ( Figure 14 ). On December 1, 2018, the White House released a statement saying that China had agreed to purchase "substantial amount of agricultural" goods, among other goods. This statement was followed by press reports at different times stating that China had announced it would buy additional U.S. soybeans. The reported Chinese commitments to purchase U.S. soybeans did not materialize, and soybean prices, which had been on a downward trajectory since early 2018, declined further in early 2019. Soybean farm prices reached a 12-year low point in May 2019 at $8.02 per bushel. This coincided with President Trump's threat to raise Section 301 tariffs, on U.S. imports from China, from 10% to 25% and to impose additional tariffs on all remaining imports from China not currently covered by Sections 301 measures. The tariff increases from 10% to 25% were effective May 10, 2019. The Trump Administration announced its intent to impose additional tariff increases of 10% on all other products currently not covered by Section 301 tariffs. China responded by asking its state-owned enterprises to halt purchases of U.S. agricultural goods, and by levying two additional sets of tariffs: 5% or 10% tariffs on U.S. imports, including 695 different U.S. agricultural tariff lines effective September 1, 2019; and another 5% or 10% tariffs on U.S. imports including 184 different U.S. agricultural tariff lines effective December 15, 2019. In 2018, the U.S. farm sector faced the challenge of declining exports and commodity prices for certain major field crops, in addition to rising operational costs. Various studies predicted that the imposition of U.S. Sector 232 tariffs on steel and aluminum, in tandem with the domestic content provisions of the USMCA, could increase the cost of production for U.S. farmers. A report released by the Association of Equipment Manufacturers states that the Trump Administration's Section 232 and Section 301 tariffs could hurt the U.S. economy by increasing consumer prices, including a 6% increase in the cost of manufacturing agricultural and construction equipment. U.S. agro-chemical manufacturers have also stated that cost increases, resulting from escalating tariffs, "of pesticide products for crop and turf protection products ultimately will be passed on to American growers and businesses." In a sector with relatively thin profit margins, small increases in costs associated with tariffs can sometimes lead to postponed equipment purchases, causing a ripple effect through the farm input sector. In 2019, several agricultural commodity prices remain under pressure from a record soybean and near-record corn harvest in 2018, diminished export prospects due to the ongoing trade dispute with China, and high levels of carryover stocks from the previous year. Potential Long-Run Implications A shift in trade patterns can become permanent if trade disruptions lead to new trade alliances or stimulate production in retaliating domestic markets or other competing foreign regions, thus increasing supplies from new sources. An example of such long-term impact of a disruption in trade on U.S. farm exports is the 1980 U.S. embargo on grain exports to the Soviet Union, which resulted in declines in U.S. commodity prices and export sales. A significant effect of the embargo was that the United States lost market share in sales to the Soviet Union. Additionally, during the early 1970s, the United States imposed a partial embargo on the exports of soybeans, cottonseed, and certain other products as an inflation fighting measure. The U.S. soybean export embargo and high prices during this period reportedly prompted greater Japanese investments in Brazil's soybean industry, which has since become the U.S. soybean industry's major export competitor. As discussed in the section " Key Competitors for China's Agricultural Market ," major agricultural exporters such as Brazil, Canada, Australia, and the EU have recently increased their farm exports to China. Additionally, countries such as Russia, Ukraine, some Central Asian countries, some Southeast Asian countries, and some African countries are seeking to establish and expand footholds in the Chinese market. For the latter group of countries, a prolonged U.S.-China trade war could facilitate their agricultural development and their share of global exports. Assuming the continuation of retaliatory tariffs on U.S. soybeans, a USDA 10-year projection predicts that China's soybean imports would resume growing, but the volume of future soybean trade would be less than previously projectedâ122.8 million metric tons of Chinese imports from all origins with retaliatory tariffs in 2027 compared with 143 million metric tons of imports without retaliatory tariffs. With U.S. soybeans taxed by retaliatory tariffs, USDA projects that Brazil would likely account for two-thirds of the growth in global soybean exports to China. In comparison, the United States accounted for 35% of China's total soybean imports in 2017 and 18.5% in 2018, while Brazil accounted for 53% of China's total soybean imports in 2017 and 76% in 2018. For U.S. exporters, lower U.S. prices may stimulate additional demand by a number of countries, but these markets are not likely to absorb the entire volume displaced from China. The USDA report concludes that alternative export markets for U.S. soybeans can only absorb a fraction of the soybeans exported to China before trade tensions began, with imports in these countries growing by less than half of the reduction projected for Chinese soybean imports in 2027. China is also investing in agricultural production in U.S. competitor markets and is improving access for products from these countries. Russia has pledged land to Chinese farmers and has made a commitment to increase its exports of agricultural products to China. While these commitments are still speculative, during the last two decades, Russian agriculture has moved toward greater product specialization and strategic investments have been made based on agro-ecological characteristics. As a result, Russian regional agricultural productivity growth has increased between 25% and 75%, with higher productivity growths in parts of southern Russia. According to Chinese import data, Russia made inroads into China's food and agricultural market in 2018, with market share increases compared to 2017 of 14% for soybean oil; 4% for wheat; 1% for corn; 0.3% for soybeans; 2% for oilseeds; and some increases in hay market shares, among others. China's imports of food and agricultural products from Russia increased 61% between 2017 and 2018 ( Figure 15 ). China's imports of Russian cereals increased almost 400% during the same period, while oilseed imports grew 78%, fats and oils 72%, cocoa and related products 181%, beer 109%, and animal products 48%. While Russia's agricultural exports to China increased in 2018, the value of its shipments represented less than 1% of China's total agricultural product imports of $127 billion that year. Market watchers expect Russia will need years to become a major agricultural supplier to China. Globally, a USDA study reports that over 1,300 Chinese enterprises had overseas investments in agriculture, forestry, and fisheries valued at $26 billion in 2016. The investments include crop and livestock farming, fishing, processing, farm machinery, inputs, seeds, and logistics in over 100 countries. Most of China's foreign agricultural projects involve relatively small companies investing in neighboring countries in Southeast Asia, Russia's Far East, and Africa that have unexploited land and are often receptive to Chinese investment. China's agricultural investment decisions are linked to its "One Belt, One Road" initiative. Additionally, Chinese companies seeking sources of dairy, beef, and lamb imports have focused their investments and partnerships with New Zealand and Australia. Since 2018, China has taken additional actions to reduce import-export taxes and duties to facilitate agricultural imports from non-U.S. sources, particularly for non-U.S. oilseeds and products ( Box 6 ). Effective April 2019, value added taxes (VAT) on agricultural products were reduced to 9% from the original 11% or 17%. Starting January 1, 2019, reductions in customs duties, including MFN tariffs and temporary duty rates, were implemented for certain imported goods in order to boost imports and meet domestic demand. The temporary duty rates, which are even lower than the MFN tariffs, are in effect on 706 imported commodities, including some agricultural products. With retaliatory tariffs in place, U.S. agricultural exporters are unable to take full advantage of these improved terms of market access. Estimated Economic Impacts The following section provides examples of estimated economic impacts associated with retaliatory tariffs imposed on U.S. agricultural products by U.S. trading partners. These impacts are estimated at different scales by different studies, or are derived from market data. The examples are illustrative; they are not meant to be comprehensive. Commodity Level Various studies have estimated potential economic impacts arising from retaliatory tariffs on specific U.S. commodities (see Box 5 for general assumptions regarding these studies). For example, one study of short-term effects predicted U.S. farm prices would decrease in response to China's retaliatory tariffs, the value of U.S. exports to China would decline and U.S. farmers would reduce acreage planted the following year to soybeans, cotton, sorghum, and would reduce pork production, ultimately resulting in revenue declines for U.S. producers. A similar short-term impact analysis conducted by the Center for North American studies at Texas A&M University examined the impact on U.S. dairy of a 25% retaliatory tariff levied by Mexico on U.S. cheese imports and a 25% retaliatory tariff imposed by China on imports of U.S. dairy products. The study estimated export losses and pointed out that U.S. dairy exports are supported by a large infrastructure, including dairy farms, marketing cooperatives, and warehousing and processing facilities. Thus, the study concluded that any significant change in exports is likely to ripple through the supporting infrastructure and affect the general economy. In the case of Mexican tariffs on U.S. cheese, which Mexico removed in May 2019, the study estimated that U.S. economy-wide economic losses would be $991 million per year with nearly 5,000 lost jobs. In the case of Chinese tariffs on U.S. dairy imports, the study suggested that the economy-wide losses could total $2.8 billion per year and lead to over 13,000 jobs lost. State Level In September 2018, the Center for Agricultural and Rural Development (CARD) at Iowa State University estimated the short-run effects of the 2018 trade disruptions on the Iowa economy. This study incorporated the potential offsetting effects from USDA's trade-aid package. The study focused on the impact of foreign retaliatory tariffs on U.S. corn, soybean, hog, and ethanol markets along with labor and government revenue impacts from changes in these markets. It used a number of different modeling approaches that resulted in the following estimates of annual impact. The study estimated that Iowa's soybean industry would lose $159 million to $891 million, with an average revenue loss across all models of $545 million (Iowa soybeans are a $5.2 billion industry). The study estimated that Iowa's corn industry would lose $90 million to $579 million, with an average revenue loss across all models of $333 million (Iowa corn is an $8.5 billion industry). The study estimated that Iowa's pork/hog industry would lose $558 million to $955 million, with an average revenue loss across all models of $776 million (the Iowa pork/hog industry is a $7.1 billion industry). The study estimated that ethanol prices would drop 2%, resulting in approximately $105 million in lost revenues to Iowa ethanol producers (investors in the ethanol industry). The study points out that by mid-August 2018, corn prices retreated nearly 9% and ethanol prices receded by roughly 4%. Over the same period, corn futures for the 2018 crop declined 9% and ethanol futures declined 8%. In the longer term (see Box 5 for definition), according to the Iowa State University study, revenue losses in these industries would translate into additional lost labor income across the state. The study estimates that labor income declines from the impacts to the corn, soybean, and hog industries would range from $366 million to $484 million without federal offsets from the trade-aid package, and $245 million to $364 million with federal offsets. Iowa tax revenue losses (personal income and sales taxes) would range from $111 million to $146 million annually. Federal offsets would reduce tax losses to $75 million to $110 million. The study estimates overall losses in Iowa's gross state product of $1 billion to $2 billion annually (out of a total of $190 billion). Similarly, a study commissioned by the Nebraska Farm Bureau on the short-run economic costs in 2018 for the state from the retaliatory tariffs concluded that Nebraska's general economy would incur costs between $164 million and $242 million in lost labor income, along with the loss of 4,100 to 6,000 jobs. In total, together with the direct agriculture-related costs, Nebraska's overall economic loss in 2018 was estimated at $859 million to $1.2 billion. Retaliatory tariffs in 2018 (on corn, soybeans, and hogs from all retaliating countries) were expected to reduce corn prices by $0.14 to $0.21 per bushel, soybean prices by $0.95 to $1.54 per bushel, and hog prices by $17.81 to $18.80 per head. These estimated price declines would translate into farm revenue losses for each commodity of corn ($257 million to $327 million); soybeans ($384 million to $531 million); and pork ($111 million). The Nebraska Farm Bureau updated its analysis in 2019 and concluded that the ongoing retaliatory tariffs imposed by countries on U.S. agricultural exports would cost Nebraska producers $943 million in lost revenues in 2019. The methodology used for the analysis borrowed USDA's estimates of gross damages that were used in calculating USDA's trade-aid payments. The estimated loss calculation did not take into consideration trade-aid payments that Nebraska farmers may receive in 2019. Economists from University of California, Davis, found the short-run effects of the retaliatory tariffs on the 2018 crop for 10 selected specialty crops in four export marketsâChina, Mexico, Turkey, and Indiaâto be $2.64 billion of lost export value and $3.34 billion of combined U.S. revenue losses. The crops considered are almonds, pecans, pistachios, walnuts, apples, oranges, raisins, sour cherries, sweet cherries, and table grapes. Mexico had retaliatory tariffs on apples and prepared fruit in 2018, but removed them in May 2019. India had identified apples, almonds, and walnuts for retaliatory tariffs in 2018 but did not implement these until June 2019. National-Level Effects of Retaliatory Tariffs Two studies conducted by researchers at Purdue University, using the Global Trade Analysis Project (GTAP) model (see Box 7 ), examined the potential long-run impacts of retaliatory tariffs on U.S. agriculture and the U.S. economy at the national level. As discussed in the box "Key Economic Terms," the long-run effects are estimated assuming that the shock to the market, such as tariff increases, remains in place for a few years and sufficient time has passed to provide producers the opportunity to make changes in response to this shock. The studies discussed below assume that the retaliatory tariffs remain in place for three to five years. The first study estimated the long-run effects (defined in Box 7 as 3-5 years) of a 25% tariff imposed by China on soybeans and other selected U.S. agricultural productsâwheat, corn, sorghum, rice, rapeseed, and beef. This study concluded that U.S. soybean market losses in China would, over the years, benefit Brazil. Given the U.S. soybean industry's large share of China's import market prior to the retaliatory tariffs, the study estimated large price declines and export losses for U.S. soybeans. Other commodities in the study appeared less dependent on the Chinese market, and the estimated losses are relatively smaller. The study predicted that overall economic welfare (see Box 8 ) for both the United States and China would decline, while economic welfare for Brazil would increase. The second study examined a scenario in which the USMCA would be implemented but the retaliatory tariffs related to Section 232 steel and aluminum tariffs would also exist. The study looked at two separate cases for retaliatory tariffs: (1) retaliatory tariffs were considered only for Mexico and Canada; and (2) retaliatory tariffs from all countries were considered. This study estimated, in 2014 dollars, a net increase in annual U.S. agricultural exports of $450 million under USMCA, which is equal to about 1% of U.S. agricultural exports under NAFTAâ$41 billion in 2014. It projected the export losses from the retaliatory tariffs imposed by Canada and Mexico to be $1.8 billion per year (in 2014 dollars), which would more than offset the projected export gain of $450 million from USMCA. When retaliatory tariffs from all countries were considered, export losses were estimated at around $8 billion. Note that both Canada and Mexico have removed their retaliatory tariffs since May 2019. A study conducted by economists at Iowa State University examines the national-level effects of retaliatory tariffs imposed on U.S. pork, soybeans, corn, and wheat by China and Mexico during 2018. Note that Mexico removed the retaliatory tariffs in May 2019. The study simulates multiyear projections over a period of nine years. The study indicates that if the retaliatory tariffs were to continue, U.S. annual exports would decline by 30% for pork and corn, 15% for soybeans, and 1.5% for wheat compared with a baseline scenario that considers the average of the past three-year period. The study estimated that in the short run (which the paper defines as first three years with retaliatory tariffs), trade losses would translate to 26,000 job reductions on average annually in the United States and a decline in labor income of $1.5 billion due to a $5.3 billion reduction in national annual output. In the long run (defined by the paper as year seven through year nine with retaliatory tariffs), the annual impacts were estimated to grow to nearly 60,000 fewer jobs, $3.1 billion less labor income, and a loss of almost $12 billion in national output. Global-Level Effects The United Nations Conference on Trade and Development (UNCTAD) performed a global analysis of the U.S. Section 232 and Section 301 tariffs and the resulting retaliatory tariffs, including retaliatory tariffs on U.S. agricultural products. The analysis mainly focused on U.S.-China tariff escalation. Regarding agriculture, the study points out that China accounts for more than half of the global imports of soybeans and that the United States is the world's largest soybean producer. The study states that the Chinese tariffs on U.S. soybeans have substantially disrupted world trade of this commodity and observes that increased Chinese demand has resulted in higher prices for Brazilian soybeans. It cautions that while higher price premiums could be beneficial in the short run to Brazilian producers, they may hamper Brazilian procurers' long-run competitiveness. In a situation where the size and amount of the tariffs and their duration are unclear, Brazilian producers may be reluctant to make investment decisions that may turn unprofitable if tariffs are removed. Moreover, Brazilian firms using soybeans as inputs (e.g., feed for livestock) may lose competitiveness because of higher input prices. A USDA study released in 2019 found that the United States and Brazil are among the lowest-cost producers of soybeans. While land rental costs and labor costs are higher in the United States, poor soils and tropical ecology require Brazil to use higher levels of agrochemicals. Moreover, the United States has a transportation advantage over Brazil in exporting agricultural products to China. Specifically, the study concluded that transporting soybeans by truck from northern Mato Grosso to Brazil's primary soybean export port of ParanaguÃ¡ cost $93 per metric ton (MT) in 2017. During the same period, transporting soybeans from Davenport, Iowa, to the Gulf of Mexico by truck, rail, and barge cost $65 per MT. Shipping soybeans by truck and rail from Sioux Falls, South Dakota, to the U.S. Pacific Northwest cost $68 per MT. The United States, therefore, has lower transportation costs and greater production efficiency (requiring less agrochemicals) compared with Brazil in producing and shipping agricultural products to Asian markets. According to the study, the current trade dispute and retaliatory tariffs may, in the long run, lead to inefficient allocation of resources and exploitation of less-productive lands than those in the United States. Some Possible Benefits to U.S. Agriculture Based on economic principles, if the price of an input such as soybeans or feed corn declines, the livestock sector would be expected to benefit. USDA's Economic Research Service's production expenses report states that the cost of livestock feed declined 1% between 2017 and 2018; however, it is expected to increase 4.5% in 2019. Additionally, the U.S. livestock sector is also facing retaliatory tariffs. Similarly, many processed food products that use raw agricultural products as inputs face Chinese retaliatory tariffs. Some sectors may nevertheless benefit from retaliatory tariffs. For example, the Coalition for a Prosperous America (CPA) released a study stating that a permanent across-the-board 25% tariff on all imports from China would stimulate GDP growth and jobs in the U.S. economy. The study uses data from Boston Consulting Group that are not publicly available, and the publicly available working paper does not describe the Regional Economic Models, Inc. (REMI model) or the assumptions underlying the model. Regarding agriculture, the study states that when the USDA trade-aid programs are incorporated "into the model, the additional government spending fully offsets the negative impact of the Chinese retaliation on US GDP." In addition to the CPA study, there have been anecdotal reports in the media that organic and small-holder farmers are benefiting from China's retaliatory tariffs. U.S. Stakeholder Views on Retaliatory Tariffs In May 2019, American Farm Bureau Federation President Zippy Duvall stated that, "Retaliatory tariffs are a drag on American farmers and ranchers at a time when they are suffering more economic difficulty than many can remember," and urged negotiators to continue their work toward reopening markets with the European Union, China, and Japan. The president of the National Farmers Union (NFU) echoed the same sentiment, stating that the retaliatory tariffs "could not come at a worse time for family farmers and ranchers, who are already coping with depressed commodity prices, environmental disasters, and chronic oversupply." The NFU president further stated that although temporary relief is appreciated, "temporary solutions are not sufficient to address the permanent damage the trade war has inflicted on agricultural export markets." Various U.S. agricultural commodity groups have voiced similar concerns. For example, the American Soybean Association expressed "extreme disappointment" over USTR's escalating tariffs on China that led to retaliatory tariffs on soybeans. The National Pork Producers Council (NPPC) stated that the retaliatory tariffs are "threatening the livelihoods of thousands of U.S. pig farmers." Due to African Swine Fever (ASF), China normally would have turned to the United States to meet its pork demand. With retaliatory tariffs in place, U.S. pork is more expensive than products from other sources in the Chinese market. NPPC Vice President Nick Giordano stated that from a U.S. farmer's perspective, China's increased demand for imported pork resulting from ASF in Chinese hogs would have been "the single greatest sales opportunity in our industry's history." According to a report in the South China Morning Post , Iowa State University economist Dermot Hayes estimates that the trade dispute with China has cost American pig farmers $8 per animal, or $1 billion in total losses. The U.S. Dairy Export Council, in turn, stated in 2018 that the retaliatory tariffs that China and Mexico imposed could result in billions of dollars of lost sales for U.S. dairy producers. A study released by the Association of Equipment Manufacturers states that tariffs on steel and aluminum have increased cost of agricultural production due to rising prices of farm equipment and their parts. In a comment filed with USTR, CropLife America and a specialty chemical trade group, Responsible Industry for a Sound Environment (RISE), state that cost increases, resulting from escalating tariffs, "of pesticide products for crop and turf protection products ultimately will be passed on to American growers and businesses." Dozens of stakeholder panels provided testimony to the USTR during hearings in June 2019 regarding a proposed notice to begin imposing additional tariffs of 25% to virtually all remaining imports from China. Hundreds of U.S. companies and industry groups, including some of the largest companies argued that, "both sides will lose" in a protracted trade war. "Tariffs are taxes paid directly by U.S. companies, including those listed belowânot China," stated a letter signed by more than 600 companies, including the Association of Equipment Manufacturers, American Bakers Association, Grocery Manufacturers Association, Juice Products Association, Distilled Spirits Council of the United States, and many other food retailers and associations related to the food industry. On June 21, 2019, hundreds of domestic producers and four manufacturing and labor groups sent a letter to President Trump urging him to maintain his hardline approach to China. The letter was signed by the Coalition for a Prosperous America, which includes mainly nonagricultural manufacturing companies and some food- and agriculture-related small companies like the Platt Cattle Company of Arizona and Johanna Foods of New Jersey. To help alleviate the losses from the retaliatory tariffs, USDA announced a second round of trade aid in 2019. Most industry groups welcomed this package but indicated their preference for trade rather than aid. American Farm Bureau Federation President Zippy Duvall stated, "It is critically important to restore agricultural markets and mutually beneficial relationships with our trading partners around the world." Similar sentiments were expressed by a number of other major agricultural trade associations, such as the National Council of Farmer Cooperatives, the American Soybean Association, the National Cotton Council, the National Milk Producers Federation, and the National Pork Producers Council. For its part, the National Association of Wheat Growers stated that the trade-aid package "is a Band-Aid when we really need a long-term fix." Issues for Congress In May 2019, President Trump proposed levying additional tariff increases on imports from China, but they were held in abeyance following a meeting between President Trump and Chinese President Xi Jinping at the G-20 summit in June 2019. However, President Trump stated on August 2019 that he would impose a tariff hike increase on all other Chinese products currently not covered by Section 301 tariffs. China responded by asking its state-owned enterprises to halt purchases of U.S. agricultural goods. On August 13, 2019, USTR released the remaining list of Chinese products that would be levied a 10% Section 301 tariff effective September 1, 2019, and another list of products that would be levied 10% Section 301 tariffs effective December 15, 2019. China in turn has retaliated by levying additional two sets of tariffs: 5% or 10% tariffs on U.S. imports, including 695 different U.S. agricultural tariff lines effective September 1, 2019; and another 5% or 10% tariffs on U.S. imports including 184 different U.S. agricultural tariff lines effective December 15, 2019. Given the length of the trade dispute over Section 232 and Section 301 actions and the expanding list of U.S. exports affected by the retaliatory tariffs, the list of affected sectors is also expanding. A June 2019 USTR hearing for Section 301 tariffs included a diversity of witnesses across 55 panels over a seven-day period. As such, an issue for congressional consideration may be whether compensation for the losses arising from the various trade disputes should extend beyond those producers of agricultural commodities identified in the Administration's trade-aid initiative. USDA, using its authority under the CCC, is administering this assistance. Retaliatory tariffs have arguably affected businesses beyond the farm gate, including agricultural exporters, input suppliers, agricultural shippers, and others, potentially raising the question of whether these industries merit government compensation for tariff-related losses. Separately, some agricultural stakeholders have questioned the equity of the distribution of the 2018 trade aid payments. Once the formula became public, several commodity groups questioned the rationale for determining payments based on "trade damage" rather than the broader "market loss" measure. Similar questions have emerged about the 2019 trade-aid package. These questions concern the methodology used to calculate the payment rates, commodity coverage of the direct payments, and the equity of payments across regions and commodity sectors. The provision of trade aid has also raised questions regarding U.S. commitments under the WTO and other international agreements. Several WTO members, including the EU, Canada, Australia, New Zealand, India, and Ukraine, have asked for more details regarding USDA's trade-aid package to ascertain whether it could be considered market-distorting under U.S. WTO commitments. Given the growth of investments directed to increase agricultural productivity in many countries including Russia, and the recent gains that Russia, Brazil, and other countries have made in China's import market for agricultural products, it may be of interest to Congress to consider whether current policies are sufficient for U.S. agriculture to continue to expand its overseas markets. As other countries expand their agricultural production to meet China's import demand, studies by environmental groups caution that this agricultural expansion may occur at the expense of tropical forest and fragile habitats that are essential to maintain global biodiversity. The United States is one of the most efficient and lowest-cost producers of food and agricultural products. Congress may want to consider whether the current trade dispute could have long-term environmental costs as less productive or more environmentally vulnerable areas are cultivated for agricultural production in lieu of more efficient and less environmentally sensitive U.S. production. Appendix. Summary:	null	96	75,965	75,967	75,967	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Since early 2018, certain foreign nations have targeted U.S. food and agricultural products with retaliatory tariffs (for more on tariffs, see Box 1 ) in response to U.S. Section 232 tariffs on steel and aluminum imports and U.S. Section 301 tariffs levied on imports from China. The first U.S. trade action occurred on March 8, 2018, when President Trump imposed tariffs of 25% on steel and 10% on aluminum imports (with some flexibility on the application of tariffs by country) using presidential powers granted under Section 232 of the Trade Expansion Act of 1962. Section 232 authorizes the President to impose restrictions on certain imports based on an affirmative determination by the Department of Commerce that the targeted import products threaten national security. The targeted exporters, China, Canada, Mexico, the European Union (EU), and Turkey, responded by levying retaliatory tariffs on U.S. food and agricultural products, and other goods. India proposed retaliatory tariffs but did not implement them until June 2019. A second action occurred in July 2018 when the Trump Administration used a Section 301 investigation to impose tariffs of 25% on $34 billion of selected imports from China, citing concerns over China's policies on intellectual property, technology, and innovation. In August 2018, the Administration levied a second round of Section 301 tariffs, also of 25%, on an additional $16 billion of imports from China. In September 2018, additional tariffs of 10% were applied to $200 billion of imports from China and, in May 2019, these were raised to 25%. On August 13, 2019, the Office of U.S. Trade Representative (USTR) published two lists of additional Chinese imports that would face 10% tariffs, effective September 1, 2019, and December 15, 2019. The imposition of the Section 301 tariffs on Chinese goods resulted in retaliatory tariffs by China. Additionally, in August 2019, China asked its state-owned enterprises to halt purchases of U.S. agricultural goods. On August 23, 2019, China further retaliated by levying two additional sets of tariffs: 5% or 10% tariffs on U.S. imports, including 695 different U.S. agricultural tariff lines effective September 1, 2019; and another 5% or 10% tariffs on U.S. imports including 184 different U.S. agricultural tariff lines effective December 15, 2019. During 2018, China, Canada, Mexico, the EU, and Turkey jointly levied retaliatory tariffs on more than 1,000 U.S. food and agricultural tariff lines. India prepared a list of U.S. products targeted for retaliatory tariffs in 2018 but refrained from implementing them. Then in 2019, India implemented retaliatory tariffs on certain U.S. lentils, apples, and tree nuts after the United States removed India from the U.S. Generalized System of Preferences (GSP) program on May 31, 2019. GSP provides duty-free tariff treatment for certain products from designated developing countries. India's removal from GSP is expected to raise duties valued at about $5 billion to $6 billion on goods the United States imports from Indiaâor slightly more than 10% of India's total 2018 exports of $54 billion to the United States. In response to U.S. action, India implemented the retaliatory tariffs identified in 2018, with some changes, effective June 16, 2019. On May 17, 2019, the Trump Administration reached an agreement with Canada and Mexico to remove the Section 232 tariffs on steel and aluminum imports from those countries and to remove all retaliatory tariffs imposed on U.S. goods. The Administration reduced tariffs on Turkish steel imports, and Turkey responded on May 21, 2019, by halving its retaliatory tariffs on U.S. imports. Report Objectives This report recaps the chronology and the effect of U.S. Section 232 and Section 301 actions on U.S. food and agricultural imports and the retaliatory tariffs imposed on U.S. agricultural exports by its trading partners during 2018 and the spring of 2019. As China is subjected to the largest set of U.S. tariff increases and has levied the most expansive set of retaliatory tariffs on U.S. agricultural products, this report largely focuses on the effects of Chinese retaliatory tariffs on U.S. agricultural trade. Because almost all U.S. food and agricultural tariff lines are affected by Chinese retaliatory tariffs, the report provides illustrative examples using selected agricultural products. Thus, the report is not a comprehensive review of the effect of Chinese retaliatory tariffs on every U.S. agricultural product exported to China. Retaliatory tariffs have made U.S. products relatively more expensive in China, with the result that Chinese imports from other countries have increased in lieu of U.S. products. This report discusses the short- and long-run economic effects of the changes in trade flows, locally, nationally, and globally. The long-run effects may potentially be more problematic, as China and Russia have increased their agricultural productivity over the past two to three decades, and China has increased investments in other countries to develop potential future sources of imports. Additionally, China has improved market access for imports from other countries while it has increased tariffs on U.S. imports. Finally, the report presents the views of selected U.S. agricultural stakeholders on retaliatory tariffs, and it identifies issues that may be of interest for Congress. Retaliatory Tariffs on U.S. Agricultural Exports Except for China, which faces both Section 232 and Section 301 tariffs, other countries' retaliatory tariffs respond only to U.S. Section 232 tariffs on U.S. imports of certain steel and aluminum products. Higher retaliatory tariffs represent increases above the World Trade Organization (WTO) Most Favored Nation (MFN) tariff rates or beyond any existing preferential tariff rates. Retaliatory tariffs for Canada and Mexico are increases from the existing North American Free Trade Agreement (NAFTA) rates, most of which, at zero percent, are below the MFN rates. Table 1 summarizes the retaliatory tariff increases on U.S. agricultural products by comparing tariff increases of September 2018 with the retaliatory tariffs in effect in June 2019. A potential reason for observed changes in applied tariffs rates is that some tariffs are levied based on quantity (such as per ton or per kilograms) and, for purposes of analyses, tariffs are converted to percentage of total import value, ad valorem rates (see Box 2 ). When the price of a traded product changes, the ad valorem tariff rate imposed on a product can change. Additionally, it is not always possible to match the U.S. Harmonized Tariff Schedule (HTS) with the retaliatory country's 8- or 10-digit tariff code (see Box 1 ) . Thus, it may be difficult to link the U.S. Census Bureau trade data with the tariff codes of products affected by retaliatory tariffs. Therefore, this report makes use of both U.S. export data and partner country import data as appropriate to provide the most accurate measure of the magnitude of the affected U.S. trade. For U.S. retaliating trade partners, Table 1 provides the minimum, maximum, and simple (not trade-weighted) average retaliatory tariff hike rates. Chinese Retaliatory Tariffs18 China is subject to the largest set of U.S. tariff increasesâboth the U.S. Section 232 steel and aluminum tariffs and the Section U.S. 301 tariffs in response to unfair trade practices. As a result, China has countered with an expansive list of retaliatory tariffs. In particular, all U.S. products affected by Chinese retaliatory tariffs in response to the U.S. Section 232 action also faced additional retaliatory tariffs in response to U.S. Section 301 trade action. China first retaliated against U.S. Section 232 action in April 2018, by raising tariffs on certain U.S. imports including agricultural products. During the first round of Chinese retaliatory tariffs, these products included pork, fruit, and tree nuts. In July 2018, China retaliated against U.S. Section 301 tariffs by raising tariffs on an expanded number of products, including most U.S. agricultural products exported to China. Tariffs were also raised on products affected by the earlier April 2018 retaliatory tariffs in response to U.S. Section 301 action, with most subject to an additional tariff of 25%. China levied two more rounds of retaliatory tariff increases (against U.S. Section 301 action) in 2018âin August and Septemberâexpanding the coverage of the affected products. In September 2018, China imposed 5% and 10% tariff increases on certain products (including agricultural products) which had not been subject to any retaliatory tariffs in response to U.S. Section 301 action. In June 2019, China increased tariffs on some additional products that had not been previously targeted with retaliatory tariffs, as well as some products that had been hit with the 5% or 10% retaliatory tariff in September 2018. As a result, almost all U.S. agricultural products shipped to China face retaliatory tariffs, ranging from 5% to 50% above their MFN tariff rates through August 31, 2019, with a simple average tariff rate increase of 24% across all products as of July 2019. See Table A-1 for information on average Chinese retaliatory tariffs across different food and agricultural product categories. Retaliatory Tariffs by Canada and Mexico In June 2018, Mexico levied a 15% tariff on U.S. sausage imports; a 20% tariff on other pork products, certain cheeses, apples, potatoes, and cranberries; and a 25% tariff increase on whey, blue-veined cheese, and whiskies. Starting in July 2018, Canada imposed a retaliatory tariff of 10% on certain U.S. products including dairy, poultry, and beef products; coffee, chocolate, sugar, and confectionery; prepared food products; condiments; bottled water; and whiskies. To facilitate the ratification of the proposed U.S.-Mexico-Canada Agreement (USMCA) that the leaders of the three countries agreed to on September 30, 2018, the United States removed the Section 232 tariffs on steel and aluminum imports from Canada and Mexico on May 17, 2019, and, in turn, these countries removed their retaliatory tariffs on U.S. imports. Retaliatory Tariffs by the EU, Turkey, and India In June 2018, in response to U.S. Section 232 tariffs, the EU imposed a 25% tariff on imports of U.S. corn, rice, sweetcorn, kidney beans, certain breakfast cereals, peanut butter, orange juice, cranberry juice, whiskies, cigars, and other tobacco products, and a 10% tariff on certain essential oils. In June 2018, Turkey also responded to U.S. Section 232 tariffs on Turkish steel imports by levying retaliatory tariffs on selected U.S. imports. On August 10, 2018, the United States doubled its tariffs on steel imports from Turkey to 50%, stating that the 25% tariffs did not reduce Turkish steel imports as much as anticipated. Turkey responded by doubling tariffs on certain U.S. imports including a 20% retaliatory tariff on U.S. tree nuts and certain prepared food, 25% and 50% tariffs on U.S. rice (depending on whether milled or unmilled), 60% tariff on U.S. tobacco, and 140% tariff on U.S. alcoholic beverages including whiskies. When the United States reduced its tariffs on Turkish steel imports on May 21, 2019, Turkey halved its retaliatory tariffs on U.S. imports. India identified certain U.S. food products for retaliatory tariffs in 2018 but did not levy them until June 16, 2019. Indian tariff hikes above the MFN rate are 10% for imports of U.S. chickpeas, 29% for over-quota shelled almonds (ad valorem rate), and 20% for U.S. walnuts, apples, and lentils. U.S. Agricultural Trade Affected by Tariff Hikes Foreign nations may target U.S. food and agricultural products with retaliatory tariffs for several reasons. First, the United States is the largest exporter of food and agricultural products, so many countries are able to retaliate against those goods. Second, agricultural commodities are often more easily substituted from among potential suppliers, so curbing imports from one country would not necessarily limit an importing country's access to the commodity. Third, several food and agricultural products are produced primarily in certain regions of the United States, and thus may be targeted with a view to negatively and disproportionately affecting the constituents of specific U.S. lawmakers. The retaliatory tariffs imposed by U.S. trading partners affected many products exported by the United States, including meats, grains, dairy products, specialty and horticultural crops, and alcoholic beverages. As discussed in Box 3 , "Tariffs Increase Import Prices," a number of factors affect trade, including tariffs that tend to increase the price of imported goods. In 2018, total imports of affected U.S. food and agricultural products by all retaliating countries amounted to almost $22 billion, based on customs data from these countries. This represents a 27% decline from the $29.7 billion in 2017 ( Figure 1 ). Based on Chinese customs data, the total value of Chinese agricultural imports from the United States affected by retaliatory tariffs declined from $22.5 billion in 2017 to $14.7 billion in 2018. Canadian customs data show that imports of U.S. agricultural products declined to $2.3 billion in 2018 from $2.4 billion in 2017. Canadian retaliatory tariffs include certain tariff lines covering prepared product categories under beef, poultry, dairy, fruit, vegetables, drinks, coffee and spices, chocolate and confectionary, and whiskey. As noted earlier, Canada removed its retaliatory tariffs on U.S. imports in May 2019, in response to the U.S. removal of Section 232 tariffs on steel and aluminum imports from Canada. A review of Mexican customs data finds that imports of U.S. agricultural products by Mexico also declined from $2.6 billion in 2017 to $2.5 billion in 2018, largely accounted for by sausage and pork products. Mexico's imports of these products declined from $2.3 billion in 2017 to $1.6 billion in 2018. In addition to pork products, Mexico had imposed retaliatory tariffs on cheeses, apples, prepared fruit, vegetables and other food, and whiskey. Mexico also removed its retaliatory tariffs on U.S. imports in May 2019, in response to U.S. removal of Section 232 tariffs on steel and aluminum imports from Mexico. EU customs data show the import value of U.S. food and agricultural products affected by the EU retaliatory tariffs increased to $1.3 billion in 2018 from $1.1 billion in 2017. The EU imposed tariff hikes on certain prepared vegetables, pulses, breakfast cereals, fruit juices, peanut butter, tobacco products, whiskey, and essential oils. A temporary surge in sales in the months prior to the imposition of duties appears to have offset a slump in sales that coincided with the onset of retaliatory duties later in the year ( Figure 2 ). Based on the quarterly import data, by the first quarter of 2019, the total value of EU imports of U.S. products affected by retaliatory tariffs was lower than during the last quarter of 2017 or the first quarter of 2018. Since the second quarter of 2018, EU imports of affected food and agricultural products from the United States declined. As discussed above, beyond the tariff increases, a number of factors may have contributed to this reduction in imports. For instance, when countries first released their proposed lists of products that they targeted for retaliation, some EU importers may have imported larger quantities of the affected products prior to the imposition of the duties, thus boosting EU imports of U.S. agricultural goods in 2018. Similar to the EU, the total value of Turkish imports of U.S. food and agricultural products affected by retaliatory tariffs increased between 2017 ($299 million) and 2018 ($316 million), based on Turkish customs data. Turkey had imposed tariff hikes on certain tree nuts, prepared food, rice, tobacco, whiskey, and other alcoholic beverages. Imports in the months prior to the imposition of duties had increased ( Figure 2 ), which may have offset the decline in imports during the second half of 2018. In the third and fourth quarter of 2018, Turkish imports of affected U.S. food and agricultural products declined. Since May 2019, Turkey halved its retaliatory tariffs on imports from the United States. During 2018, India did not levy any retaliatory tariffs on imports of U.S. food and agricultural products. Starting in June 16, 2019, India implemented retaliatory tariffs on imports of U.S. almonds, walnuts, chickpeas, lentils, and apples. Based on the Indian customs data, the total value of Indian imports of these products was $824 million in 2017 and $859 million in 2018. U.S. Agricultural Exports to Retaliating Countries Table 2 presents U.S. agricultural exports to retaliating and nonretaliating countries, in nominal values, from 2014 to 2018. As discussed in Box 1 , U.S. exports to trading partners and the reported import values in destination countries can differ due to differences in HS classification of goods in different countries. Canada, the EU, Mexico, and Turkey levied retaliatory tariffs in 2018 on selected U.S. agricultural products, while China imposed retaliatory tariffs on almost all U.S. food and agricultural products. During 2018, India did not levy any retaliatory tariffs. Thus, the changes in 2018 U.S. food and agricultural exports, compared to prior years, varied across these countries ( Table 2 ). Despite the retaliatory tariffs, U.S. agricultural exports grew from $138 billion in 2017 to $140 billion in 2018. Greater U.S. exports of products to nonretaliating countries ($76 billion in 2018, up from $66 billion in 2017) offset the value of trade lost to China and Turkey. In addition, increased U.S. exports of products without retaliatory tariffs and products targeted for retaliatory tariffs during the months prior to their implementation (to Canada, Mexico, and the EU) also helped to offset the decline in exports of products with retaliatory tariffs to these countries. U.S. Exports Under Chinese Retaliatory Tariffs45 The Chinese market is important for several U.S. agricultural products. For example, in 2016 and 2017, the United States supplied over a third of China's total soybean imports, almost all of China's distillers' grain imports (primarily used as animal feed), and most of China's sorghum imports. In 2017, the Chinese market accounted for about 57% of global U.S. soybean exports, 17% of global U.S. cotton exports, 80% of global U.S. sorghum exports, 11% of global U.S. dairy product exports, 10% of global U.S. pork exports, 6% of global U.S. wheat exports, and 5% of global U.S. fruit exports. In response to U.S. Section 232 and Section 301 tariffs on U.S. imports of Chinese goods imposed in 2018, China levied retaliatory tariffs on imports of almost all U.S. agricultural products. In 2017, China was the second-leading export market by value for U.S. agricultural products. However, after the imposition of retaliatory tariffs on U.S. imports beginning in April 2018, U.S. agricultural exports to China experienced a 53% decline from $19.5 billion in 2017 to $9.2 billion in 2018 ( Figure 3 ). China thus moved down in rank to become the fourth-largest U.S. agricultural market, after Canada, Mexico, and Japan. Among other goods, China imposed a 25% retaliatory tariff on U.S. soybeans in July 2018. Since 2000, China had been the top export market for U.S. soybeans. In 2017, China imported about $12 billion worth of U.S. soybeans, accounting for 57% of the total value of all U.S. soybean exports that year. With higher tariffs in place, China has been purchasing more soybeans from Brazil and other countries to meet its demand. Consequently, U.S. soybean exports to China in 2018 declined to $3 billion ( Figure 3 ). U.S. Census Bureau trade data indicate China was still the top foreign destination for U.S. soybeans in 2018, followed by Mexico, which imported $1.8 billion of U.S. soybeans. Reduced Chinese import demand in 2018 contributed to declining farm prices for affected commodities and lower U.S. agricultural exports to China for several commodities, including sorghum, soybeans, cotton, and pork. Consequently, U.S. soybean prices reached 10-year lows during July-October 2018 ( Figure 4 ), weighing on prices of other agricultural commodities, such as corn, that compete with soybeans for acreage. Prices recovered some during the last quarter of 2018, coincident with reported commitments by China to purchase a "very substantial amount of U.S. agricultural" goods. However, Chinese purchases failed to materialize and U.S. commodity prices resumed their downward trend through the first quarter of 2019 before stabilizing. As U.S. soybean prices declined in 2018, Brazilian soybean prices started to rise, indicative of a greater demand for Brazilian soybeans from China ( Figure 4 ). Since 2007, Brazilian and U.S. soybean prices had tended to move together. Starting in April 2018, U.S. soybean prices started to fall and Brazilian soybean prices started to rise. China's imposition of a 25% tariff on U.S. soybeans in July 2018 initially precipitated a widening of the gap between the two prices. On October 23, 2018, U.S. soybean Free on Board (FOB) prices were $86 per metric ton lower than Brazilian (ParanaguÃ¡) FOB prices. The Brazilian soybean price started to fall in late October in anticipation of a record-high South American soybean harvest. U.S. soybean prices started to climb at the same time, partly due to farmers' willingness to hold stocks and in response to larger exports to non-Chinese destinations. Anticipation of Chinese purchases also contributed to rebounding of U.S. prices. As Chinese purchases did not materialize, Brazilian and U.S. soybean prices started to diverge again in May 2019. Although soybeans have been the agricultural commodity most affected by retaliatory tariffs (largely due to China's dominant role in the global soybean market), nearly all U.S. agricultural exports to China declined in 2018 relative to 2017 (see Table 3 ). Key Competitors for China's Agricultural Market56 With retaliatory tariffs making U.S. agricultural products more expensive for Chinese buyers, exports from other countries to China increased during 2018. Some studies suggest that Brazil could become China's primary soybean supplier. Another study concludes that U.S.-China tariff escalation would make suppliers in the rest of the world more competitive relative to U.S. and Chinese suppliers. Russia also contends that it may become a major U.S. competitor for China's agricultural import market, although market watchers expect Russia will need years to become a major agricultural supplier to China. To explore these assertions, CRS examined Chinese import data to identify foreign sources that may have partially replaced some of the 2018 U.S. agricultural exports to China. Note that various factors can result in data differences between U.S. exports from the U.S. Census Bureau and imports from Chinese customs data ( Box 4 ). China's Total Annual Agricultural Imports According to Chinese customs data, China's imports of agricultural products were $117 billion in 2014 as compared to $127 billion in 2018, in nominal terms ( Figure 5 ). In 2014, the United States was the largest source of Chinese agricultural imports, accounting for nearly a quarter, or $28 billion, of China's total imports. Since 2017, Brazil and several other countries increased their shares of China's total imports, with Brazil overtaking the United States as China's largest agricultural supplier in 2017. Since the imposition of the retaliatory tariffs on U.S. imports in 2018, U.S. agricultural shipments to China declined to $15 billion, compared to $23 billion in 2017, even as overall Chinese imports increased to $127 billion. It is noteworthy that in 2016, when China's total agricultural imports were at the lowest point between 2014 and 2018, at $105 billion, U.S. market share was 21%, compared with 2018, when China's total agricultural imports were at $127 billion but U.S. market share was 12%. During the same period, Brazil's market share grew from 18% in 2016 to 26% in 2018. Additionally, China's imports from other countries increased, as indicated in Figure 5 . Brazil appears to be the primary beneficiary of Chinese retaliatory tariffs on U.S. imports, with increased exports to China in 2018 of soybeans, cotton, tobacco, pork, and oilseeds. Australia also registered growth in import market shares for cotton, sorghum, pulses, fruit and nuts, dairy, and hides and skins. Canada increased its exports to China of feed and fodder products, hides and skins, and wheat. New Zealand's share of China's import market saw gains in dairy, and hides and skins. Thailand increased its export shipments of fruit, nuts and starches, and malt to China, while increased shipments from Indonesia were largely fats and oils. Additionally, Russia has stated that it is ready to step in to fill in the gaps created by reductions in U.S. food and agricultural exports to China, according to various news media reports, although market watchers expect Russia will need years to become a major agricultural supplier to China. In July 2018, Chinese Commerce Minister Zhong Shan agreed with his Russian counterparts to "deepen trade in soybeans and other agricultural products." China's imports of food and agricultural products from Russia increased 61%, from $679 million to nearly $1.1 billion, between 2017 and 2018, with strong import growth in oilseeds, wheat, fats and oils, cocoa and related products, beer, and animal products. Various other countries from Central Asia, South and Southeast Asia, and Africa increased their exports of food and agricultural products to China during 2018 compared with 2017. Notably, China's wheat imports from Kazakhstan grew 34% and corn imports from Ukraine rose 20%. U.S. agricultural interests have reported concerns that the U.S.-China trade war in the form of tariffs and tariff retaliation could escalate further, potentially resulting in widespread, long-term damage, particularly for firms with complex international supply chains. For American farmers, the escalating conflict with China has contributed to declining soybean and related agricultural commodity prices in the short run, but studies indicate that the long-term consequences could be complex and have long-lasting impacts. The following section examines how major U.S. agricultural product market shares fared in the Chinese import market during 2018. It also presents China's imports of selected agricultural commodities on a monthly basis starting in January 2018, through the first trimester of 2019 when the different retaliatory tariffs became effective. China's Imports of Soybeans According to Census data, China has been the top export market for U.S. soybeans since 2000. China imported $12 billion worth (32 million metric tons) of U.S. soybeans in 2017, accounting for 57% of the total value and volume of all U.S. soybean exports that year. With higher tariffs on U.S. soybeans, China has been purchasing more soybeans from Brazil and other countries to meet its demand. Consequently, U.S. soybean exports to China declined to $3 billion (8 million metric tons) in 2018. Based on Census trade data, China was still the top destination for U.S. soybeans in 2018, followed by Mexicoâwhich imported $1.8 billion worth of U.S. soybeans. According to China's monthly customs data, China's import of U.S. soybeans in January 2018 was $2.5 billion ( Figure 6 ). China's monthly imports of U.S. soybeans started to decline after China announced retaliatory tariffs in response to U.S. Section 232 tariffs in April 2018, which did not include U.S. soybeans. By the time China imposed retaliatory tariffs in response to U.S. Section 301 tariffs (which included U.S. soybeans) in July 2018, China's import of U.S. soybeans had decreased to about $140 million for that month (from $2.5 billion in January 2018). U.S. soybean shipments to China continued to decline until November 2018, when China did not import any U.S. soybeans. In December 2018, the White House announced that China had committed to purchase a "very substantial amount of agricultural" goods. Following this and other announcements, China purchased U.S. soybeans during the first trimester of 2019. The largest of these purchases, worth $700 million, occurred in April 2019. However, China's imports of U.S. soybeans declined in May 2019, coincident with the continued escalation of the U.S.-China trade dispute and the imposition of an increase in the third round of U.S. Section 301 tariffs on Chinese imports in May 2019. During this tariff dispute, China has turned increasingly to Brazil to meet its demand for soybeans. In January 2018âprior to the tariff disputeâChinese imports of Brazilian soybeans totaled less than $900 million, before increasing in May and June of 2018, when shipments of newly harvested soybeans from the Southern Hemisphere to China increased. By July 2018, Brazilian shipments were on the decline when China imposed 25% retaliatory tariffs on U.S. soybeans. Normally, newly harvested U.S. soybean shipments to China would have increased in the fall of 2018, whereas Chinese purchases of U.S. soybeans slowed to almost nil and were outpaced by Brazilian shipments to China. From February to May 2019, China expanded its purchases of U.S. soybeans, while also buying soybeans from Brazil, and increasing its soybean imports from Argentina, Russia, and Central Asian countries. China's Imports of Cotton According to Census trade data, U.S. cotton exports to China totaled over $1 billion in 2014. From 2017 to 2018, U.S. cotton exports to China declined 6%, from $978 million to $924 million. Monthly Chinese customs data indicate that China's imports of U.S. cotton have decreased since the imposition of retaliatory tariffs in July 2018 ( Figure 7 ). During January 2018, China's cotton imports from the United States totaled $140 million. Following the announcement of retaliatory tariffs on some U.S. imports (in response to U.S. Section 232 action) in April 2018, China's imports of U.S. cotton shrank to $27 million in October 2018. While Chinese imports from the United States declined, China's imports from other countries have increased. Cotton shipments from Brazil and Australia posted the largest increases, followed by imports from India and Uzbekistan. Additionally China's imports of cotton from other Central Asian and West African countries have risen since June 2018 ( Figure 7 ). On July 26, 2019, China reportedly approved some domestic textile mills to buy 50,000 metric tons of U.S. cotton without being subject to retaliatory tariffs. However, since President Trump's announcement to levy 10% Section 301 tariffs on the remaining Chinese imports that were not subject to Section 301 tariffs, China responded in August 2019 by asking its state-owned enterprises to halt purchases of U.S. agricultural goods. China's Imports of Wheat In 2016, the United States supplied 26% of China's wheat imports. This share increased to 40% in 2017, but declined to 14% in 2018. Canadian wheat exports have largely replaced U.S. wheat shipments to the Chinese market, with Canada's share of China's wheat imports rising from 27% in 2016 to 54% in 2018. Kazakhstan and Russia also have increased their wheat exports to China in the wake of 25% Chinese retaliatory tariffs on U.S. wheat imports, which have been in effect since July 2018. From January to June 2018, the United States shipped a total of $113 million of wheat to China ( Figure 8 ), compared with $256 million of U.S. wheat shipped during the same period in 2017. After China levied retaliatory tariffs on U.S. wheat in July 2018, U.S. wheat shipments to China were nil for the rest of the year. China imported $208 million of U.S. wheat in 2016 and $390 million of U.S. wheat in 2017. In March 2019, China imported $12 million of U.S. wheat. According to Chinese customs data, there have been no additional U.S. wheat shipments to China as of May 2019. China's Imports of Sorghum The United States accounted for nearly 90% of China's total sorghum imports in 2016 and 2017. The value of U.S. shipments of sorghum declined 24%, from close to $1 billion in 2017 to $726 million in 2018. China's monthly imports of U.S. sorghum have been negligible since China implemented retaliatory tariffs on them in July 2018 ( Figure 9 ). U.S. imports started to decline after May 2018, following China's imposition of retaliatory tariffs on some agricultural products in response to U.S. Section 232 tariffs in April 2018. Later, China imposed a 25% retaliatory tariff on U.S. sorghum in July 2018, leading to declines in U.S. sorghum shipments to China. China's imports of U.S. sorghum declined after retaliatory tariffs were imposed, but China continued to import limited quantities from Australia, Myanmar, and Argentina. However, in the absence of Chinese purchases of U.S. sorghum, China's total sorghum imports since October 2018 have been negligible ( Figure 9 ). Therefore, despite the retaliatory tariffs, U.S. market share in 2018 was about 85% of China's total sorghum imports for the year. On July 26, 2019, China reportedly allowed several domestic companies to buy U.S. sorghum without being subject to retaliatory tariffs. However, since President Trump's announcement to levy 10% Section 301 tariffs on remaining Chinese imports that do not yet have any Section 301 tariffs imposed on them, China responded in August 2019 by asking its state-owned enterprises to halt purchases of U.S. agricultural goods. China's Imports of Pork and Pork Products The United States supplied 13% of China's total pork imports in 2016 ($400 million) and 2017 ($286 million). In 2018, U.S. pork shipments to China declined to $130 million and accounted for 6% of China's total pork imports. U.S. pork shipments to China began to decline in April 2018 following China's imposition of 25% retaliatory tariffs on U.S. pork (HS 0203 lines) in response to U.S. Section 232 tariffs on U.S. imports of Chinese steel and aluminum products ( Figure 10 ). In July 2018, these HS lines were subject to an additional 25% retaliatory tariff. This coincided with a further decline in Chinese imports of U.S. pork products from July through December 2018. Unlike the case of sorghum, China has continued to import some U.S. pork products, and import volumes generally increased from January through May 2019. Since the summer of 2018, China has suffered from a serious outbreak of African Swine Fever (ASF). Between September 2018 and May 2019, China reported over 2 million culled hogs. In March 2019, USDA reported that despite the retaliatory tariffs, because of ASF, U.S. pork products are entering China and USDA expects China's imports of U.S. pork to climb in 2019 due to the liquidation of some of China's hogs in an effort to control ASF. However, USDA reported that U.S. pork products still face Chinese retaliatory tariffs, which makes U.S. products relatively more expensive compared with pork from other countries. On July 26, 2019, China reportedly approved requests from several domestic companies to buy U.S. pork products without being subject to retaliatory tariffs. However, since President Trump's August 2019 announcement to levy 10% Section 301 tariffs on remaining Chinese imports that do not yet have any Section 301 tariffs levied on them, China responded by asking its state-owned enterprises to halt purchases of U.S. agricultural goods. On August 23, 2019, China imposed additional 10% tariffs on certain U.S. pork products, effective September 1, 2019, in response to new U.S. Section 301 tariffs on U.S. imports from China. China's Imports of Dairy Products Since 2016, the United States has been the third-largest supplier of dairy products to China ($1.3 billion in 2018), among over 140 suppliers, behind New Zealand ($4.2 billion) and the Netherlands ($2 billion). China is a growing market for dairy products. Chinese imports of dairy products increased over 50% from $10 billion in 2016 to $15 billion in 2018. Given the diversity of dairy product tariff lines and the varying rates of Chinese retaliatory tariffs levied on them, the trade effects on the aggregate group are not as clear as they are for other individual commodities. Figure 11 presents China's monthly imports of U.S. dairy products, since the large number of suppliers and differences in market shares across the suppliers are difficult to present in a single chart. China imposed retaliatory tariffs on U.S. dairy products in July 2018. Given the diversity of dairy tariff lines, there is no clear trend in China's monthly imports of U.S. dairy products during the second half of 2018 and early 2019 ( Figure 11 ). Instead, annual U.S. dairy shipments to China increased 15% from $1.2 billion in 2017 to $1.3 billion in 2018. However, in China's growing market, imports from competitor countries grew faster from 2017 to 2018, with New Zealand's shipments increasing 15% from $3.7 billion to $4.2 billion; the Netherlands' shipments increasing 35% from $1.5 billion to $2 billion; and Australia's shipments increasing 32% from $1 billion to $1.3 billion. Although U.S. dairy shipments to China do not show any clear trend since January 2018, the retaliatory tariffs are likely contributing to faster market share growths for U.S. competitors in China than for the U.S. dairy sector, particularly since some dairy products are levied additional 5% retaliatory tariffs effective September 1, 2019. China's Imports of Hides and Skins The United States is the largest supplier of hides and skins to China, accounting for about 41% of China's total imports from 2016 to 2018. In 2017, shipments of U.S. hides and skins to China amounted to $918 million. After the imposition of retaliatory tariffs in July 2018, Chinese imports of U.S. hides and skins declined, with China's 2018 U.S. hides and skins imports totaling $664Â million. Major U.S. competitors in China's hides and skins import market are Australia, Canada and New Zealand ( Figure 12 ). These countries have not been able to fill the gap created by the decline in U.S. shipments of hides and skins to China. Consequently, China's total hides and skins imports fell 25% in 2018, to $1.6 billion from $2.2 billion in 2017. U.S. shipments of hides and skins to China declined 28% during the same period. Notwithstanding the tariffs on U.S.-origin hides and skins, the decline in U.S. shipments largely mirrored the overall decline in China's imports, with the result that the United States continued to supply about 41% of China's total hides and skins imports in 2018, the same share as in the previous two years. U.S. shipments of hides and skins to China may further drop with the additional 10% retaliatory tariff on U.S. imports that became effective September 1, 2019. Retaliatory Partner Imports of Other Agricultural Products Analysis conducted by economists from University of California, Davis (UC Davis) found that Chinese retaliatory tariffs decreased U.S. alfalfa exports to China in 2018 compared to the previous two years. From 2016 to 2018, the United States supplied the largest share of China's alfalfa imports, accounting for about 79% of China's total alfalfa import market share in 2016 ($417 million) and 72% ($534 million) in 2018. In January 2018, China purchased U.S. alfalfa valued at $40 million. Following the imposition of retaliatory tariffs, U.S. monthly shipments of alfalfa to China started to decline in the summer of 2018. In November 2018, China's monthly imports of U.S. alfalfa amounted to $16 million and totaled $17 million in December 2018. Another study from UC Davis indicates that U.S. pistachio exports also declined due to retaliatory tariffs from China and Turkey. A third study from UC Davis estimated a combined short-run export loss for 2018 of $2.64 billion for almonds, apples, pistachios, walnuts, pecans, sweet cherries, oranges, table grapes, raisins, and sour cherries in four major import markets (China including Hong Kong, India, Mexico, and Turkey). It stands to reason that Chinese retaliatory tariffs may have also affected U.S. exports of certain other field crops, livestock and animal products, other specialty crops, and processed food products that are not covered in this report. Economic Impact of Retaliatory Tariffs U.S. agriculture, as a whole, is subject to intense competition, in both domestic and international markets. As a result, most commodity sectors operate with thin profit margins, making international sales an important component of revenue. Tariffs, by design, raise the cost of imported products (see Box 3 ). In general, an increase in import prices due to higher tariffs leads to a decrease in quantities purchased of the affected products as importers switch to other foreign suppliers or to alternate products within the domestic market. Thus, the trade impact of such a price increase will depend in large part on the number of available alternate foreign suppliers and the availability of substitutes within the domestic market. Furthermore, a decrease in exports will have an economy-wide effect as the supporting infrastructureâincluding farms, marketing cooperatives, warehousing and processing facilities, and transportation networks, for exampleâall lose business and revenues. This loss ripples further through the general economy and can cause decreases in employment and local, state, and federal tax revenues. This section of the report examines the short-term market impacts and selected economic analyses of longer-term impacts of the retaliatory tariffs. Short-Run Impacts In the short run (see Box 5 ), retaliatory tariffs resulted in lower 2018 purchases of U.S. agricultural products by countries implementing these tariffs. The prospects for U.S. agricultural exports to China in 2019 appear to be along the same trajectory. As discussed earlier ( Figure 2 ), U.S. food and agricultural imports by the EU and Turkey during the first quarter of 2019 were below the level of imports during the same period in 2017 and 2018. Similarly, an examination of U.S. monthly exports to China from January to April 2019 demonstrates that the first quarter 2019 agricultural export levels have been below the export levels during the same period in 2017 and 2018 ( Figure 13 ). Generally, fall harvested crops are exported during late fall and early winter months, and export levels decline during the spring. Note that no retaliatory tariffs were in effect during 2017 or the first quarter of 2018. China levied the first round of retaliatory tariffs on U.S. imports in April 2018, in response to U.S. Section 232 tariffs. Other retaliating countries followed China's action with retaliatory tariffs in June 2018. Additionally, China expanded the range of affected U.S. imports and increased tariffs in additional rounds of retaliatory actions during the summer and fall of 2018, in response to U.S. Section 301 tariffs. With the continuation of existing retaliatory tariffs on almost all U.S. agricultural HS lines, China's proclamation that its state-owned enterprises will halt purchases of U.S. agricultural goods, and the 5% or 10% additional increase in retaliatory tariffs effective September and December 2019, U.S. exports of agricultural products affected by retaliatory tariffs could potentially continue to lose some market share in China. In addition to export losses, U.S. agriculture is facing other challenges in 2019. Abundant domestic and international supplies of grains and oilseeds in 2018 contributed to a fourth straight year of relatively weak agricultural commodity prices compared to previous years. U.S. soybean output and stocks were at record highs during 2018, putting downward pressure on soybean prices. Lower soybean prices contributed to lower corn prices during fall of 2018, as markets speculated that farmers would switch soybean acres to corn in 2019 ( Figure 14 ). On December 1, 2018, the White House released a statement saying that China had agreed to purchase "substantial amount of agricultural" goods, among other goods. This statement was followed by press reports at different times stating that China had announced it would buy additional U.S. soybeans. The reported Chinese commitments to purchase U.S. soybeans did not materialize, and soybean prices, which had been on a downward trajectory since early 2018, declined further in early 2019. Soybean farm prices reached a 12-year low point in May 2019 at $8.02 per bushel. This coincided with President Trump's threat to raise Section 301 tariffs, on U.S. imports from China, from 10% to 25% and to impose additional tariffs on all remaining imports from China not currently covered by Sections 301 measures. The tariff increases from 10% to 25% were effective May 10, 2019. The Trump Administration announced its intent to impose additional tariff increases of 10% on all other products currently not covered by Section 301 tariffs. China responded by asking its state-owned enterprises to halt purchases of U.S. agricultural goods, and by levying two additional sets of tariffs: 5% or 10% tariffs on U.S. imports, including 695 different U.S. agricultural tariff lines effective September 1, 2019; and another 5% or 10% tariffs on U.S. imports including 184 different U.S. agricultural tariff lines effective December 15, 2019. In 2018, the U.S. farm sector faced the challenge of declining exports and commodity prices for certain major field crops, in addition to rising operational costs. Various studies predicted that the imposition of U.S. Sector 232 tariffs on steel and aluminum, in tandem with the domestic content provisions of the USMCA, could increase the cost of production for U.S. farmers. A report released by the Association of Equipment Manufacturers states that the Trump Administration's Section 232 and Section 301 tariffs could hurt the U.S. economy by increasing consumer prices, including a 6% increase in the cost of manufacturing agricultural and construction equipment. U.S. agro-chemical manufacturers have also stated that cost increases, resulting from escalating tariffs, "of pesticide products for crop and turf protection products ultimately will be passed on to American growers and businesses." In a sector with relatively thin profit margins, small increases in costs associated with tariffs can sometimes lead to postponed equipment purchases, causing a ripple effect through the farm input sector. In 2019, several agricultural commodity prices remain under pressure from a record soybean and near-record corn harvest in 2018, diminished export prospects due to the ongoing trade dispute with China, and high levels of carryover stocks from the previous year. Potential Long-Run Implications A shift in trade patterns can become permanent if trade disruptions lead to new trade alliances or stimulate production in retaliating domestic markets or other competing foreign regions, thus increasing supplies from new sources. An example of such long-term impact of a disruption in trade on U.S. farm exports is the 1980 U.S. embargo on grain exports to the Soviet Union, which resulted in declines in U.S. commodity prices and export sales. A significant effect of the embargo was that the United States lost market share in sales to the Soviet Union. Additionally, during the early 1970s, the United States imposed a partial embargo on the exports of soybeans, cottonseed, and certain other products as an inflation fighting measure. The U.S. soybean export embargo and high prices during this period reportedly prompted greater Japanese investments in Brazil's soybean industry, which has since become the U.S. soybean industry's major export competitor. As discussed in the section " Key Competitors for China's Agricultural Market ," major agricultural exporters such as Brazil, Canada, Australia, and the EU have recently increased their farm exports to China. Additionally, countries such as Russia, Ukraine, some Central Asian countries, some Southeast Asian countries, and some African countries are seeking to establish and expand footholds in the Chinese market. For the latter group of countries, a prolonged U.S.-China trade war could facilitate their agricultural development and their share of global exports. Assuming the continuation of retaliatory tariffs on U.S. soybeans, a USDA 10-year projection predicts that China's soybean imports would resume growing, but the volume of future soybean trade would be less than previously projectedâ122.8 million metric tons of Chinese imports from all origins with retaliatory tariffs in 2027 compared with 143 million metric tons of imports without retaliatory tariffs. With U.S. soybeans taxed by retaliatory tariffs, USDA projects that Brazil would likely account for two-thirds of the growth in global soybean exports to China. In comparison, the United States accounted for 35% of China's total soybean imports in 2017 and 18.5% in 2018, while Brazil accounted for 53% of China's total soybean imports in 2017 and 76% in 2018. For U.S. exporters, lower U.S. prices may stimulate additional demand by a number of countries, but these markets are not likely to absorb the entire volume displaced from China. The USDA report concludes that alternative export markets for U.S. soybeans can only absorb a fraction of the soybeans exported to China before trade tensions began, with imports in these countries growing by less than half of the reduction projected for Chinese soybean imports in 2027. China is also investing in agricultural production in U.S. competitor markets and is improving access for products from these countries. Russia has pledged land to Chinese farmers and has made a commitment to increase its exports of agricultural products to China. While these commitments are still speculative, during the last two decades, Russian agriculture has moved toward greater product specialization and strategic investments have been made based on agro-ecological characteristics. As a result, Russian regional agricultural productivity growth has increased between 25% and 75%, with higher productivity growths in parts of southern Russia. According to Chinese import data, Russia made inroads into China's food and agricultural market in 2018, with market share increases compared to 2017 of 14% for soybean oil; 4% for wheat; 1% for corn; 0.3% for soybeans; 2% for oilseeds; and some increases in hay market shares, among others. China's imports of food and agricultural products from Russia increased 61% between 2017 and 2018 ( Figure 15 ). China's imports of Russian cereals increased almost 400% during the same period, while oilseed imports grew 78%, fats and oils 72%, cocoa and related products 181%, beer 109%, and animal products 48%. While Russia's agricultural exports to China increased in 2018, the value of its shipments represented less than 1% of China's total agricultural product imports of $127 billion that year. Market watchers expect Russia will need years to become a major agricultural supplier to China. Globally, a USDA study reports that over 1,300 Chinese enterprises had overseas investments in agriculture, forestry, and fisheries valued at $26 billion in 2016. The investments include crop and livestock farming, fishing, processing, farm machinery, inputs, seeds, and logistics in over 100 countries. Most of China's foreign agricultural projects involve relatively small companies investing in neighboring countries in Southeast Asia, Russia's Far East, and Africa that have unexploited land and are often receptive to Chinese investment. China's agricultural investment decisions are linked to its "One Belt, One Road" initiative. Additionally, Chinese companies seeking sources of dairy, beef, and lamb imports have focused their investments and partnerships with New Zealand and Australia. Since 2018, China has taken additional actions to reduce import-export taxes and duties to facilitate agricultural imports from non-U.S. sources, particularly for non-U.S. oilseeds and products ( Box 6 ). Effective April 2019, value added taxes (VAT) on agricultural products were reduced to 9% from the original 11% or 17%. Starting January 1, 2019, reductions in customs duties, including MFN tariffs and temporary duty rates, were implemented for certain imported goods in order to boost imports and meet domestic demand. The temporary duty rates, which are even lower than the MFN tariffs, are in effect on 706 imported commodities, including some agricultural products. With retaliatory tariffs in place, U.S. agricultural exporters are unable to take full advantage of these improved terms of market access. Estimated Economic Impacts The following section provides examples of estimated economic impacts associated with retaliatory tariffs imposed on U.S. agricultural products by U.S. trading partners. These impacts are estimated at different scales by different studies, or are derived from market data. The examples are illustrative; they are not meant to be comprehensive. Commodity Level Various studies have estimated potential economic impacts arising from retaliatory tariffs on specific U.S. commodities (see Box 5 for general assumptions regarding these studies). For example, one study of short-term effects predicted U.S. farm prices would decrease in response to China's retaliatory tariffs, the value of U.S. exports to China would decline and U.S. farmers would reduce acreage planted the following year to soybeans, cotton, sorghum, and would reduce pork production, ultimately resulting in revenue declines for U.S. producers. A similar short-term impact analysis conducted by the Center for North American studies at Texas A&M University examined the impact on U.S. dairy of a 25% retaliatory tariff levied by Mexico on U.S. cheese imports and a 25% retaliatory tariff imposed by China on imports of U.S. dairy products. The study estimated export losses and pointed out that U.S. dairy exports are supported by a large infrastructure, including dairy farms, marketing cooperatives, and warehousing and processing facilities. Thus, the study concluded that any significant change in exports is likely to ripple through the supporting infrastructure and affect the general economy. In the case of Mexican tariffs on U.S. cheese, which Mexico removed in May 2019, the study estimated that U.S. economy-wide economic losses would be $991 million per year with nearly 5,000 lost jobs. In the case of Chinese tariffs on U.S. dairy imports, the study suggested that the economy-wide losses could total $2.8 billion per year and lead to over 13,000 jobs lost. State Level In September 2018, the Center for Agricultural and Rural Development (CARD) at Iowa State University estimated the short-run effects of the 2018 trade disruptions on the Iowa economy. This study incorporated the potential offsetting effects from USDA's trade-aid package. The study focused on the impact of foreign retaliatory tariffs on U.S. corn, soybean, hog, and ethanol markets along with labor and government revenue impacts from changes in these markets. It used a number of different modeling approaches that resulted in the following estimates of annual impact. The study estimated that Iowa's soybean industry would lose $159 million to $891 million, with an average revenue loss across all models of $545 million (Iowa soybeans are a $5.2 billion industry). The study estimated that Iowa's corn industry would lose $90 million to $579 million, with an average revenue loss across all models of $333 million (Iowa corn is an $8.5 billion industry). The study estimated that Iowa's pork/hog industry would lose $558 million to $955 million, with an average revenue loss across all models of $776 million (the Iowa pork/hog industry is a $7.1 billion industry). The study estimated that ethanol prices would drop 2%, resulting in approximately $105 million in lost revenues to Iowa ethanol producers (investors in the ethanol industry). The study points out that by mid-August 2018, corn prices retreated nearly 9% and ethanol prices receded by roughly 4%. Over the same period, corn futures for the 2018 crop declined 9% and ethanol futures declined 8%. In the longer term (see Box 5 for definition), according to the Iowa State University study, revenue losses in these industries would translate into additional lost labor income across the state. The study estimates that labor income declines from the impacts to the corn, soybean, and hog industries would range from $366 million to $484 million without federal offsets from the trade-aid package, and $245 million to $364 million with federal offsets. Iowa tax revenue losses (personal income and sales taxes) would range from $111 million to $146 million annually. Federal offsets would reduce tax losses to $75 million to $110 million. The study estimates overall losses in Iowa's gross state product of $1 billion to $2 billion annually (out of a total of $190 billion). Similarly, a study commissioned by the Nebraska Farm Bureau on the short-run economic costs in 2018 for the state from the retaliatory tariffs concluded that Nebraska's general economy would incur costs between $164 million and $242 million in lost labor income, along with the loss of 4,100 to 6,000 jobs. In total, together with the direct agriculture-related costs, Nebraska's overall economic loss in 2018 was estimated at $859 million to $1.2 billion. Retaliatory tariffs in 2018 (on corn, soybeans, and hogs from all retaliating countries) were expected to reduce corn prices by $0.14 to $0.21 per bushel, soybean prices by $0.95 to $1.54 per bushel, and hog prices by $17.81 to $18.80 per head. These estimated price declines would translate into farm revenue losses for each commodity of corn ($257 million to $327 million); soybeans ($384 million to $531 million); and pork ($111 million). The Nebraska Farm Bureau updated its analysis in 2019 and concluded that the ongoing retaliatory tariffs imposed by countries on U.S. agricultural exports would cost Nebraska producers $943 million in lost revenues in 2019. The methodology used for the analysis borrowed USDA's estimates of gross damages that were used in calculating USDA's trade-aid payments. The estimated loss calculation did not take into consideration trade-aid payments that Nebraska farmers may receive in 2019. Economists from University of California, Davis, found the short-run effects of the retaliatory tariffs on the 2018 crop for 10 selected specialty crops in four export marketsâChina, Mexico, Turkey, and Indiaâto be $2.64 billion of lost export value and $3.34 billion of combined U.S. revenue losses. The crops considered are almonds, pecans, pistachios, walnuts, apples, oranges, raisins, sour cherries, sweet cherries, and table grapes. Mexico had retaliatory tariffs on apples and prepared fruit in 2018, but removed them in May 2019. India had identified apples, almonds, and walnuts for retaliatory tariffs in 2018 but did not implement these until June 2019. National-Level Effects of Retaliatory Tariffs Two studies conducted by researchers at Purdue University, using the Global Trade Analysis Project (GTAP) model (see Box 7 ), examined the potential long-run impacts of retaliatory tariffs on U.S. agriculture and the U.S. economy at the national level. As discussed in the box "Key Economic Terms," the long-run effects are estimated assuming that the shock to the market, such as tariff increases, remains in place for a few years and sufficient time has passed to provide producers the opportunity to make changes in response to this shock. The studies discussed below assume that the retaliatory tariffs remain in place for three to five years. The first study estimated the long-run effects (defined in Box 7 as 3-5 years) of a 25% tariff imposed by China on soybeans and other selected U.S. agricultural productsâwheat, corn, sorghum, rice, rapeseed, and beef. This study concluded that U.S. soybean market losses in China would, over the years, benefit Brazil. Given the U.S. soybean industry's large share of China's import market prior to the retaliatory tariffs, the study estimated large price declines and export losses for U.S. soybeans. Other commodities in the study appeared less dependent on the Chinese market, and the estimated losses are relatively smaller. The study predicted that overall economic welfare (see Box 8 ) for both the United States and China would decline, while economic welfare for Brazil would increase. The second study examined a scenario in which the USMCA would be implemented but the retaliatory tariffs related to Section 232 steel and aluminum tariffs would also exist. The study looked at two separate cases for retaliatory tariffs: (1) retaliatory tariffs were considered only for Mexico and Canada; and (2) retaliatory tariffs from all countries were considered. This study estimated, in 2014 dollars, a net increase in annual U.S. agricultural exports of $450 million under USMCA, which is equal to about 1% of U.S. agricultural exports under NAFTAâ$41 billion in 2014. It projected the export losses from the retaliatory tariffs imposed by Canada and Mexico to be $1.8 billion per year (in 2014 dollars), which would more than offset the projected export gain of $450 million from USMCA. When retaliatory tariffs from all countries were considered, export losses were estimated at around $8 billion. Note that both Canada and Mexico have removed their retaliatory tariffs since May 2019. A study conducted by economists at Iowa State University examines the national-level effects of retaliatory tariffs imposed on U.S. pork, soybeans, corn, and wheat by China and Mexico during 2018. Note that Mexico removed the retaliatory tariffs in May 2019. The study simulates multiyear projections over a period of nine years. The study indicates that if the retaliatory tariffs were to continue, U.S. annual exports would decline by 30% for pork and corn, 15% for soybeans, and 1.5% for wheat compared with a baseline scenario that considers the average of the past three-year period. The study estimated that in the short run (which the paper defines as first three years with retaliatory tariffs), trade losses would translate to 26,000 job reductions on average annually in the United States and a decline in labor income of $1.5 billion due to a $5.3 billion reduction in national annual output. In the long run (defined by the paper as year seven through year nine with retaliatory tariffs), the annual impacts were estimated to grow to nearly 60,000 fewer jobs, $3.1 billion less labor income, and a loss of almost $12 billion in national output. Global-Level Effects The United Nations Conference on Trade and Development (UNCTAD) performed a global analysis of the U.S. Section 232 and Section 301 tariffs and the resulting retaliatory tariffs, including retaliatory tariffs on U.S. agricultural products. The analysis mainly focused on U.S.-China tariff escalation. Regarding agriculture, the study points out that China accounts for more than half of the global imports of soybeans and that the United States is the world's largest soybean producer. The study states that the Chinese tariffs on U.S. soybeans have substantially disrupted world trade of this commodity and observes that increased Chinese demand has resulted in higher prices for Brazilian soybeans. It cautions that while higher price premiums could be beneficial in the short run to Brazilian producers, they may hamper Brazilian procurers' long-run competitiveness. In a situation where the size and amount of the tariffs and their duration are unclear, Brazilian producers may be reluctant to make investment decisions that may turn unprofitable if tariffs are removed. Moreover, Brazilian firms using soybeans as inputs (e.g., feed for livestock) may lose competitiveness because of higher input prices. A USDA study released in 2019 found that the United States and Brazil are among the lowest-cost producers of soybeans. While land rental costs and labor costs are higher in the United States, poor soils and tropical ecology require Brazil to use higher levels of agrochemicals. Moreover, the United States has a transportation advantage over Brazil in exporting agricultural products to China. Specifically, the study concluded that transporting soybeans by truck from northern Mato Grosso to Brazil's primary soybean export port of ParanaguÃ¡ cost $93 per metric ton (MT) in 2017. During the same period, transporting soybeans from Davenport, Iowa, to the Gulf of Mexico by truck, rail, and barge cost $65 per MT. Shipping soybeans by truck and rail from Sioux Falls, South Dakota, to the U.S. Pacific Northwest cost $68 per MT. The United States, therefore, has lower transportation costs and greater production efficiency (requiring less agrochemicals) compared with Brazil in producing and shipping agricultural products to Asian markets. According to the study, the current trade dispute and retaliatory tariffs may, in the long run, lead to inefficient allocation of resources and exploitation of less-productive lands than those in the United States. Some Possible Benefits to U.S. Agriculture Based on economic principles, if the price of an input such as soybeans or feed corn declines, the livestock sector would be expected to benefit. USDA's Economic Research Service's production expenses report states that the cost of livestock feed declined 1% between 2017 and 2018; however, it is expected to increase 4.5% in 2019. Additionally, the U.S. livestock sector is also facing retaliatory tariffs. Similarly, many processed food products that use raw agricultural products as inputs face Chinese retaliatory tariffs. Some sectors may nevertheless benefit from retaliatory tariffs. For example, the Coalition for a Prosperous America (CPA) released a study stating that a permanent across-the-board 25% tariff on all imports from China would stimulate GDP growth and jobs in the U.S. economy. The study uses data from Boston Consulting Group that are not publicly available, and the publicly available working paper does not describe the Regional Economic Models, Inc. (REMI model) or the assumptions underlying the model. Regarding agriculture, the study states that when the USDA trade-aid programs are incorporated "into the model, the additional government spending fully offsets the negative impact of the Chinese retaliation on US GDP." In addition to the CPA study, there have been anecdotal reports in the media that organic and small-holder farmers are benefiting from China's retaliatory tariffs. U.S. Stakeholder Views on Retaliatory Tariffs In May 2019, American Farm Bureau Federation President Zippy Duvall stated that, "Retaliatory tariffs are a drag on American farmers and ranchers at a time when they are suffering more economic difficulty than many can remember," and urged negotiators to continue their work toward reopening markets with the European Union, China, and Japan. The president of the National Farmers Union (NFU) echoed the same sentiment, stating that the retaliatory tariffs "could not come at a worse time for family farmers and ranchers, who are already coping with depressed commodity prices, environmental disasters, and chronic oversupply." The NFU president further stated that although temporary relief is appreciated, "temporary solutions are not sufficient to address the permanent damage the trade war has inflicted on agricultural export markets." Various U.S. agricultural commodity groups have voiced similar concerns. For example, the American Soybean Association expressed "extreme disappointment" over USTR's escalating tariffs on China that led to retaliatory tariffs on soybeans. The National Pork Producers Council (NPPC) stated that the retaliatory tariffs are "threatening the livelihoods of thousands of U.S. pig farmers." Due to African Swine Fever (ASF), China normally would have turned to the United States to meet its pork demand. With retaliatory tariffs in place, U.S. pork is more expensive than products from other sources in the Chinese market. NPPC Vice President Nick Giordano stated that from a U.S. farmer's perspective, China's increased demand for imported pork resulting from ASF in Chinese hogs would have been "the single greatest sales opportunity in our industry's history." According to a report in the South China Morning Post , Iowa State University economist Dermot Hayes estimates that the trade dispute with China has cost American pig farmers $8 per animal, or $1 billion in total losses. The U.S. Dairy Export Council, in turn, stated in 2018 that the retaliatory tariffs that China and Mexico imposed could result in billions of dollars of lost sales for U.S. dairy producers. A study released by the Association of Equipment Manufacturers states that tariffs on steel and aluminum have increased cost of agricultural production due to rising prices of farm equipment and their parts. In a comment filed with USTR, CropLife America and a specialty chemical trade group, Responsible Industry for a Sound Environment (RISE), state that cost increases, resulting from escalating tariffs, "of pesticide products for crop and turf protection products ultimately will be passed on to American growers and businesses." Dozens of stakeholder panels provided testimony to the USTR during hearings in June 2019 regarding a proposed notice to begin imposing additional tariffs of 25% to virtually all remaining imports from China. Hundreds of U.S. companies and industry groups, including some of the largest companies argued that, "both sides will lose" in a protracted trade war. "Tariffs are taxes paid directly by U.S. companies, including those listed belowânot China," stated a letter signed by more than 600 companies, including the Association of Equipment Manufacturers, American Bakers Association, Grocery Manufacturers Association, Juice Products Association, Distilled Spirits Council of the United States, and many other food retailers and associations related to the food industry. On June 21, 2019, hundreds of domestic producers and four manufacturing and labor groups sent a letter to President Trump urging him to maintain his hardline approach to China. The letter was signed by the Coalition for a Prosperous America, which includes mainly nonagricultural manufacturing companies and some food- and agriculture-related small companies like the Platt Cattle Company of Arizona and Johanna Foods of New Jersey. To help alleviate the losses from the retaliatory tariffs, USDA announced a second round of trade aid in 2019. Most industry groups welcomed this package but indicated their preference for trade rather than aid. American Farm Bureau Federation President Zippy Duvall stated, "It is critically important to restore agricultural markets and mutually beneficial relationships with our trading partners around the world." Similar sentiments were expressed by a number of other major agricultural trade associations, such as the National Council of Farmer Cooperatives, the American Soybean Association, the National Cotton Council, the National Milk Producers Federation, and the National Pork Producers Council. For its part, the National Association of Wheat Growers stated that the trade-aid package "is a Band-Aid when we really need a long-term fix." Issues for Congress In May 2019, President Trump proposed levying additional tariff increases on imports from China, but they were held in abeyance following a meeting between President Trump and Chinese President Xi Jinping at the G-20 summit in June 2019. However, President Trump stated on August 2019 that he would impose a tariff hike increase on all other Chinese products currently not covered by Section 301 tariffs. China responded by asking its state-owned enterprises to halt purchases of U.S. agricultural goods. On August 13, 2019, USTR released the remaining list of Chinese products that would be levied a 10% Section 301 tariff effective September 1, 2019, and another list of products that would be levied 10% Section 301 tariffs effective December 15, 2019. China in turn has retaliated by levying additional two sets of tariffs: 5% or 10% tariffs on U.S. imports, including 695 different U.S. agricultural tariff lines effective September 1, 2019; and another 5% or 10% tariffs on U.S. imports including 184 different U.S. agricultural tariff lines effective December 15, 2019. Given the length of the trade dispute over Section 232 and Section 301 actions and the expanding list of U.S. exports affected by the retaliatory tariffs, the list of affected sectors is also expanding. A June 2019 USTR hearing for Section 301 tariffs included a diversity of witnesses across 55 panels over a seven-day period. As such, an issue for congressional consideration may be whether compensation for the losses arising from the various trade disputes should extend beyond those producers of agricultural commodities identified in the Administration's trade-aid initiative. USDA, using its authority under the CCC, is administering this assistance. Retaliatory tariffs have arguably affected businesses beyond the farm gate, including agricultural exporters, input suppliers, agricultural shippers, and others, potentially raising the question of whether these industries merit government compensation for tariff-related losses. Separately, some agricultural stakeholders have questioned the equity of the distribution of the 2018 trade aid payments. Once the formula became public, several commodity groups questioned the rationale for determining payments based on "trade damage" rather than the broader "market loss" measure. Similar questions have emerged about the 2019 trade-aid package. These questions concern the methodology used to calculate the payment rates, commodity coverage of the direct payments, and the equity of payments across regions and commodity sectors. The provision of trade aid has also raised questions regarding U.S. commitments under the WTO and other international agreements. Several WTO members, including the EU, Canada, Australia, New Zealand, India, and Ukraine, have asked for more details regarding USDA's trade-aid package to ascertain whether it could be considered market-distorting under U.S. WTO commitments. Given the growth of investments directed to increase agricultural productivity in many countries including Russia, and the recent gains that Russia, Brazil, and other countries have made in China's import market for agricultural products, it may be of interest to Congress to consider whether current policies are sufficient for U.S. agriculture to continue to expand its overseas markets. As other countries expand their agricultural production to meet China's import demand, studies by environmental groups caution that this agricultural expansion may occur at the expense of tropical forest and fragile habitats that are essential to maintain global biodiversity. The United States is one of the most efficient and lowest-cost producers of food and agricultural products. Congress may want to consider whether the current trade dispute could have long-term environmental costs as less productive or more environmentally vulnerable areas are cultivated for agricultural production in lieu of more efficient and less environmentally sensitive U.S. production. Appendix.	Summary:	gov_report	1,024	null	21
crs_R46204	crs_R46204_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Multiple decades of scientific studies find that human activities induce global climate change by emitting greenhouse gases (GHGs) from fuel combustion, certain industries, deforestation, and other activities. Scientists researched and assessed the science of GHG-induced climate change for more than 150 years before government policymakers around the world agreed to cooperate to consider how to address its risks to humans and ecosystems. Following several international scientific meetings in 1985-1987, governments decided to establish the Intergovernmental Panel on Climate Change (IPCC), under the auspices of the United Nations Environment Programme and the World Meteorological Organization, to provide them with assessments of climate change science, projected social and economic impacts, and potential response strategies. In 1989, the U.N. General Assembly provided a mandate to negotiate what became, in 1992, the U.N. Framework Convention on Climate Change (UNFCCC). The UNFCCC has been the primary multilateral vehicle since 1992 for international cooperation among national governments to address GHG-induced climate change. While the UNFCCC is a focal point for national governments, its periphery is one forum, among others, for information sharing, collaboration, and activism also for subnational governments, financial institutions, the private sector, and nongovernmental organizations. This report is not describing these other, increasingly important aspects of international cooperation on climate change. This report summaries the content of the UNFCCC and its two subsidiary international treaties: the 1997 Kyoto Protocol (KP) and the 2015 Paris Agreement (PA). It also describes the existing guidelines to implement the PA, known as the 2018 Katowice Climate Package. The report highlights information relevant to the 2019 climate change conference, known as COP25. This report is not comprehensive. A number of other CRS reports provide greater detail and nuance on these and other aspects of the international climate change negotiations and cooperation. Some are listed at the end of this report. The U.N. Framework Convention on Climate Change The UNFCCC has been the primary multilateral vehicle since 1992 for international cooperation to address GHG-induced climate change. As of January 1, 2020, there are 197 Parties to the UNFCCC that have ratified, accepted, or acceded to the international treaty, including the United States. There is broad agreement that participation of all countries would be necessary to achieve the objective of the UNFCCC, which is stated as follows: to stabilize greenhouse gas concentrations in the atmosphere at a level that will prevent dangerous human interference with the climate system, in a time frame which allows ecosystems to adapt naturally and enables sustainable development. Achieving the objective would require both abatement of GHG emissions and facilitation of adaptation to adverse impacts of climate change in order to enable sustainable development. Stabilizing GHG concentrations in the atmosphere requires that net GHG emissionsâthe balance of "gross" emissions of GHG to the atmosphere and removals of GHG from the atmosphereâreach "net zero" or "carbon neutrality." Removals and sequestration can occur by photosynthesis (vegetation, sea algae) or through advanced technologies. Some increased level of removals, or "sinks," could allow for some amount of human-related GHG emissions to continue. The United States and other Parties to the UNFCCC agreed to this objective when they ratified the treaty. As a framework convention, this international treaty provides the structure for collaboration and evolution of efforts over decades, as well as the first qualitative step in that collaboration. The UNFCCC does not, however, include quantitative and enforceable objectives and commitments for any Party. The UNFCCC was adopted in 1992 and entered into force in 1994. The UNFCCC's governing body, the Conference of the Parties (COP), met in its 25 th session (COP25) from December 2 to 13, 2019, in Madrid, Spain. Initially, Chilean President SebastiÃ¡n PiÃ±era stepped forward to host COP25 in place of Brazil following the election of President Jair Bolsonaro. PiÃ±era sought to underscore his efforts to address climate change but ultimately decided that the summit should take place elsewhere due to mass protests in Chile. All Parties to the UNFCCC, including the United States, have a set of common obligations under the treaty: to inventory, report, and mitigate their human-related GHG emissions, including emissions and removals from land uses; to cooperate in preparing to adapt to climate change; and to assess and review, through the COP, the effective implementation of the UNFCCC, including the commitments therein. Certain obligations are additional or more specific for the countries that had higher incomes in 1992, and those countries are listed in Annex I of the Agreement. They are commonly referred to as Annex I Parties. All others are non-Annex I Parties. These additional or more specific obligations included more frequent reporting and providing financing and technology transfers, among others. The bifurcation of Parties and commitments has been a major point of contention and, some would argue, delay in negotiation and implementation of the climate change agreements (see text box). The UNFCCC and its subsidiary agreements do not define the terms developing country or developed country . In the 1990s, the Annex I Parties anticipated that developing country Parties would "graduate" into specific commitments and become donor countries as their incomes and emissions grew. As discussed later, related disagreements directly contributed to U.S. nonparticipation in the KP, the collapse of negotiations in Copenhagen in 2009, and the withdrawal or decision of some Parties not to adopt GHG abatement targets in the second period of the KP from 2013 to 2020. The Copenhagen Accord In Copenhagen at COP15 in 2009, the COP was unable to adopt an agreement among all Parties as Bolivia, Cuba, Peru, and Venezuela opposed the text. The decision of the COP included a nonbinding political statement, the Copenhagen Accord, which began a turn toward more explicit commitments by non-Annex I Parties to GHG mitigation under the UNFCCC. The Copenhagen Accord specified that the Annex I Parties would implement quantified economy-wide GHG targets for 2020 in an agreed reporting format. Non-Annex I Parties to the UNFCCC would commit to implement mitigation actions to be submitted in an alternative agreed format. At least 43 Annex I Parties (15 Parties, including the United States, plus the EU-28 jointly submitting a pledge) and 47 non-Annex I Parties had submitted nonbinding pledges. While most countries participated, the pledges remained bifurcated by both the type of action and the reporting requirements. Among other differences, Annex I Parties were to submit quantified economy-wide GHG emissions targets for 2020 relative to a baseyear, while non-Annex I Parties were to submit "nationally appropriate mitigation actions" with no associated dates. The submissions would be compiled separately by the Secretariat of the UNFCCC. The Kyoto Protocol (KP) The first subsidiary agreement to the UNFCCC was the 1997 KP, which entered into force in 2005. The United States signed but did not ratify the KP and so is not a Party to it. The KP established legally binding targets for 37 high-income countries and the European Union (EU) to reduce their GHG emissions on average by 5% below 1990 levels during 2009-2012. It precluded GHG mitigation obligations for developing countries. All Parties with the Quantified Emissions Limitation and Reduction Obligations (QELROS) under the KP (i.e., GHG targets) were judged in compliance after the end of the first commitment period of 2009-2012. The domestic GHG emissions of some Parties were higher than their targets, but as envisioned under the KP, Parties could fulfil their obligations by acquiring emission reduction credits through the three market mechanisms of the treaty: the Clean Development Mechanism, Joint Implementation, and emissions trading. Most of the high-income Partiesâmostly the EU members and other European nationsâtook on further GHG reduction targets for 2013-2020. The Secretariat's assessment of the emissions of the KP Parties with QELROS, as of November 2018, found: Annex I Parties are progressing towards their 2020 targets but gaps remain. Individual Parties have made varying progress towards their 2020 targets: most Parties' emission levels are already below their 2020 targets; some Parties must make further efforts to meet their targets by strengthening implementation of their existing [policies and measures]; and using units from MBMs [market-based mechanisms], if needed, and the contribution from LULUCF [land use, land use change, and forestry], if applicable; other Parties' emissions remained above their base-year level, owing mainly to inadequacy of domestic [policies and measures], high marginal mitigation costs or energy system constraintsâthey indicated that the use of units from MBMs and, if applicable, the contribution from LULUCF are expected to make a sizable contribution towards achieving their targets. The United States did not join the KP, and Canada withdrew before the end of the first commitment period. At least in part, their reasons for disengaging from the KP included the non-Annex I Parties' objections to acceding to quantified GHG reduction commitments. While negotiating the second KP commitment period, Australia, Japan, and other Parties also decided to seek an agreement that included commitments on the same terms from all Parties. This led to a mandate, negotiated at the 2011 COP17 in Durban, South Africa, to develop a protocol, another legal instrument, or an agreed outcome with legal force under the UNFCCC applicable to all Parties no later than 2015. The Durban Mandate resulted in the 2015 PA, discussed below. The Paris Agreement (PA) The PA is the second major subsidiary agreement under the UNFCCC. The PA is to eventually replace the KP as the primary subsidiary vehicle for process and actions under the UNFCCC. Obama Administration officials stated that the PA is not a treaty requiring Senate advice and consent to ratification. The U.N. Climate Conference in Madrid included COP25 and the second session of the "Conference of the Parties serving as the meeting of the Parties to the Paris Agreement" (CMA2), along with meetings of other related bodies. Though the United States has given notice of withdrawal from the PA, its withdrawal is to take effect no earlier than November 4, 2020. Until then, the United States may participate as a Party. After withdrawal takes effect, the United States may participate in a more limited way as an Observer State. The PA was intended to be legally binding on its Parties, though not all provisions in it are mandatory. The PA requires that Parties submit nonbinding pledges, in NDCs, to mitigate their GHG emissions and enhance removals. NDCs may also articulate goals to adapt to climate change and cooperate toward these ends, including mobilization of financial and other support. Some provisions are binding, such as those regarding reporting and review, while others are recommendations or collective commitments to which it would be difficult to hold an individual Party accountable. Key aspects of the agreement include: Temperature goal. The PA defines a collective, long-term objective to hold the GHG-induced increase in temperature to well below 2 o Celsius (C) and to pursue efforts to limit the temperature increase to 1.5 o C above the pre-industrial level. As discussed below, a periodic "Global Stocktake" is to assess progress toward the goals. Single GHG mitigation framework. The PA establishes a process, with a ratchet mechanism in five-year increments, for all countries to set and achieve GHG emission mitigation pledges until the long-term goal is met. For the first time under the UNFCCC, all Parties participate in a common framework with common guidance, though some Parties are allowed flexibility in line with their capacities. Accountability framework. To promote compliance, the PA balances accountability to build and maintain trust (if not certainty) with the potential for public and international pressure ("name-and-shame"). Also, the PA establishes a compliance mechanism designed to use expert-based and facilitative review and response rather than punitive measures. Many Parties and observers are to closely monitor the effectiveness of this strategy. Adaptation. The PA also requires "as appropriate" that Parties prepare and communicate their plans to adapt to climate change. Parties agreed that adaptation communications would be recorded in a public registry. Collective financial obligation. The PA reiterates the collective obligation in the UNFCCC for developed country Parties to provide financial resourcesâpublic and privateâto assist developing country Parties with mitigation and adaptation efforts. It urges scaling up from past financing. The Parties agreed to set, prior to their 2025 meeting, a new collective quantified goal for mobilizing financial resources of not less than $100 billion annually to assist developing country Parties. The Katowice Package At COP24/CMA1 in Katowice, Poland, in 2018, the PA Parties agreed to many of the guidelines and processes so that Parties may implement the PA as intended. Despite these agreements, Parties did not resolve several issues of significance. Negotiations on these issues will likely continue at COP26/CMA3 in Glasgow, Scotland, in November 2020. The Katowice Package, as it is often called, clarified some ambiguities in the PA that were considered important to U.S. interests, including guidelines for Parties to report their NDCs, and the Enhanced Transparency Framework (ETF) with guidelines and formats to allow a Party's NDC to be clearly understood. The Katowice Package thereby supports the effectiveness of the consultative compliance mechanism of the PA (discussed below). Below are brief summaries of key aspects of the Katowice Package. NDC Guidelines The Parties to the PA agreed to new guidelines on how to report NDCs. NDCs are to be updated every five years and "will" represent a progress in ambition to abate GHG emissions beyond the previous NDC. While Parties agreed that they "should" use a prescribed format for communicating NDCs, the details are still to be worked out. There is not agreement yet on "common timeframes" for NDCsâwhether NDCs should look five or 10 years into the future. Those Parties that submitted NDCs with time frames up to 2025 (including the United States) must communicate "new" NDCs by 2020. Those Parties with NDCs with time frames up to 2030 must communicate or update their NDC in 2020. Were the United States to remain in the PA, it would be required to submit a new NDC in 2020. The content of NDCs continues to be nationally determined and nonbinding, but it should reflect what a Party intends to achieve. The guidelines apply to NDCs submitted in 2025, but Parties are invited to use an agreed format in updating their NDCs in 2020. The guidelines also address how to report adaptation measures for Parties that wish to include them in their NDCs. Voluntary Cooperation and Market Mechanisms The PA provides in Article 6 for Parties to choose voluntary cooperation with other Parties to implement their NDCs. The purpose is to allow "higher ambition in their mitigation and adaptation actions and to promote sustainable development and environmental integrity" (Article 6.1). This article, in other words, allows the use of market mechanisms to achieve GHG mitigation at the lowest possible cost and in concert with sustainable development. This, in theory, can induce Parties to take on stronger GHG mitigation commitments while ensuring that the GHG mitigation constitutes real emission reductions. The debate about the purpose for voluntary cooperation and market mechanismsâand the rules by which they are put into operationâwas a major area of work undecided in Katowice. Adaptation Reporting Parties agreed to provide information on adaptation priorities, needs, plans, and actions in new "adaptation communications," as well as through the NDCs. Parties agreed in Katowice that the Adaptation Fund, originally established under the 1997 Kyoto Protocol, will serve the PA. It will be one of the operating entities to the financial mechanism of the PA in addition to the Global Environment Facility and the Green Climate Fund, discussed below Global Stocktake As prescribed by the PA, a Global Stocktake is to be held every five years. Parties agreed that the Global Stocktake will consider progress toward the UNFCCC's objective and the PA's aims overall. It will use best available science and will cover mitigation, adaptation, financial flows, equity, and means of implementation and support. It will not examine the situations of individual Parties. Parties decided that the next Global Stocktake would be held in 2023. A number of decisions were reached regarding the Global Stocktake, including the information it is expected to receive from the ETF (discussed below) and other sources from PA processes. Input may also come from nonstate actors, including non-Parties, localities and subnational governments, the business community, and all parts of civil society. The Enhanced Technology Framework (ETF) Setting strong requirements for the transparency of each Party's efforts has been a priority of the United States since the negotiation of the UNFCCC. ETF guidelines specify the information that Parties must report with their NDCs. That information is expected to support a "facilitative multilateral consideration of progress," along with biennial transparency reports. Methods for GHG emission estimation and other technical issues will continue to rely on the IPCC's technical advice. According to the U.N. Climate Change Secretariat, all Parties must provide information on the following, as applicable to their NDCs: Quantifiable information on the reference point for GHG mitigation actions or targets; Time frame and/or periods (i.e., the start and end dates) for implementation; Scope and coverage of the NDC (i.e., the quantitative target, which sources and gases are covered); National planning processes for developing the NDC and, if available, implementation plans taking into account national circumstances; All assumptions and methodological approaches; How the Party determines that its NDC is fair and ambitious; and How the NDC contributes toward achieving the objective of the UNFCCC. The guidelines are to facilitate review and, under the committee (below), consultation intended to encourage compliance with commitments. Whether a Party supplies a timely NDC and reports its NDC according to the guidelines is subject to review by a technical group of experts. The adequacy and appropriateness of Parties' NDCs are not subject to review under the ETF. Flexibility in reporting under the PA is afforded only for those provisions in the modalities, procedures, and guidelines that are specified to allow flexibility. These provisions include (1) the frequency and level of details of reporting, (2) the modalities of the review, and (3) the modalities of the facilitative multilateral consideration of progress. A Party may determine whether to make use of flexibilities. That said, using the flexibilities is not without checks in the review processes. A developing country that claims inadequate capacity to meet the guidelines and elects to apply a flexibility must make clear in its Biennial Transparency Report that it has applied a flexibility. It must explain the capacity constraint, how it intends to address the constraint, and its intended time frame to make improvements to the constraint(s). The technical review teams may not review these flexibilities. Committee The Parties established a 12-member committee to "facilitate implementation" of the PA. The committee is intended to support Parties' efforts to meet their obligations under the PA as a soft, pro-compliance mechanism. The PA's compliance processes are consultative, not punitive. The committee may initiate a "consideration" should a Party not submit or update its NDC as required or provide mandatory communications. Financing In 2009 and 2010, developed countries pledged collectively to mobilize US$100 billion per year by 2020, from public and private sources, to support mitigation and adaptation activities in low-income countries. COP decision 1/CP.21 to adopt the PA (not the PA itself) stated that developed countries intend to continue their existing collective mobilization goal through 2025. Prior to 2025, the Parties shall set a new collective quantified goal for financial resources from a floor of US$100 billion per year. The goal should take into account the needs and priorities of developing countries. Parties may take into consideration the information from the Warsaw International Mechanism for Loss and Damage associated with Climate Change Impacts. The financial pledges are not an enforceable commitment by developed country Parties. Many stakeholders argue, nonetheless, that the resources are essential to help low-income countries contribute to GHG abatement and adaptation in the context of sustainable development. The financial flows are also important politicallyâin part to build confidence in the functionality of the UNFCCC and PA and to build trust between the lower and higher income economies. At COP24 and since then, some countries made pledges toward this goal. Some developing country Parties submitted NDCs with GHG mitigation targets they would achieve unconditionally and more ambitious targets that they would achieve with adequate financial and technical support. The Green Climate Fund (GCF) was proposed, during the 2009 COP in Copenhagen to be a new international financial institution connected to the UNFCCC. The fund and its design was agreed during the 2011 COP in Durban, South Africa. The GCF was made operational in 2014. The GCF aims to assist lower-income countries in their efforts to combat climate change through the provision of grants and other concessional financing for mitigation and adaptation projects, programs, policies, and activities. The GCF is capitalized by contributions from donor countries and other sources, potentially including innovative mechanisms and the private sector. The GCF officially opened for capitalization at the U.N. Climate Summit in September 2014. The GCF's initial resource mobilization lasted from 2015 to 2018. As of the most recent published reporting (April 30, 2019), the GCF had raised over $10.2 billion in signed pledges from 48 countries/regions/cities during the resource mobilization period. The GCF board recently approved 10 new projects, increasing the GCF portfolio to 111 projects and increasing the level of related GCF funding to over $5.2 billion in 99 developing countries. On October 25, 2019, during the Pledging Conference for GCF's First Replenishment in Paris, 27 countries made pledges totaling $9.8 billion to cover the next four years of the fund. Parties agreed in Katowice that the Adaptation Fund, which was established under the KP, will serve the PA, in addition to the Global Environmental Facility and the GCF. Thus far, the Adaptation Fund has been financed by a share of the proceeds of the emissions trading mechanisms under the KP, as well as by voluntary contributions. With a transition from the KP to the PA, arrangements for the flow of funds are not completely agreed upon. Parties agreed that a share of the proceeds from one of the new cooperative mechanisms will continue to provide a share of its proceeds to the Adaptation Fund. A number of Parties oppose proposalsâparticularly from Parties that are relatively small and perceived to be especially vulnerable to climate changeâto use the other two market mechanisms under Article 6 to finance the Adaptation Fund. Beginning in 2020, developed countries are to submit biennial communications on expected levels of climate finance. The communications are to contain both quantitative and qualitative information. The biennial communications and Secretariat synthesis of the information therein is to inform the Global Stocktakes. Starting in 2020, the Standing Committee on Finance is to report on the determination of support needs of developing countries to implement the UNFCCC and the PA. The committee is also to consider financial needs consistent with long-term low-emissions and sustainable development pathways. Technology The Technology Framework of the PA is to provide overall guidance to the Technology Mechanism that was established under the UNFCCC. The purpose of both is to foster sharing of information and cooperation to develop new, low-emission technologies and technologies to increase resilience to climate change. Supporters viewed the technology mechanisms as important in transforming the set of technologies available, and the economies that use them, as a means to meet the objective of the UNFCCC. The Technology Framework is to have five focus areas: (1) innovation, (2) implementation, (3) enabling environments and capacity-building, (4) collaboration and stakeholder engagement, and (5) support. The Parties intend that the framework should facilitate the active participation of all relevant stakeholders and take into account sustainable development, gender, the special circumstances of the least developed countries and small island developing states, and the enhancement of capacities of indigenous people and "endogenous technologies." The Executive Committee of the Technology Framework is expected to report on the progress and challenges of its work in joint annual reports with the Climate Technology Centre established under the UNFCCC. Related CRS Products CRS Report R44609, Climate Change: Frequently Asked Questions About the 2015 Paris Agreement , by Jane A. Leggett and Richard K. Lattanzio CRS In Focus IF10239, President Obama Pledges Greenhouse Gas Reduction Targets as Contribution to 2015 Global Climate Change Deal , by Jane A. Leggett CRS Report R44092, Greenhouse Gas Pledges by Parties to the United Nations Framework Convention on Climate Change , by Jane A. Leggett CRS In Focus IF10668, Potential Implications of U.S. Withdrawal from the Paris Agreement on Climate Change , by Jane A. Leggett CRS Report R44761, Withdrawal from International Agreements: Legal Framework, the Paris Agreement, and the Iran Nuclear Agreement , by Stephen P. Mulligan CRS Legal Sidebar WSLG1836, Constitutional Limits on States' Efforts to "Uphold" the Paris Agreement , by Stephen P. Mulligan CRS Report R41889, International Climate Change Financing: The Green Climate Fund (GCF) , by Richard K. Lattanzio CRS Report R41845, The Global Climate Change Initiative (GCCI): Budget Authority and Request, FY2010-FY2016 , by Richard K. Lattanzio CRS In Focus IF10248, China's "Intended Nationally Determined Contribution" to Addressing Climate Change in 2020 and Beyond , by Jane A. Leggett CRS In Focus IF10296, New Climate Change Joint Announcement by China and the United States , by Jane A. Leggett CRS Report R40001, A U.S.-Centric Chronology of the United Nations Framework Convention on Climate Change , by Jane A. Leggett CRS In Focus IF10904, Potential Hydrofluorocarbon Phase Down: Issues for Congress , by Jane A. Leggett Summary:	null	96	27,863	27,865	27,865	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Multiple decades of scientific studies find that human activities induce global climate change by emitting greenhouse gases (GHGs) from fuel combustion, certain industries, deforestation, and other activities. Scientists researched and assessed the science of GHG-induced climate change for more than 150 years before government policymakers around the world agreed to cooperate to consider how to address its risks to humans and ecosystems. Following several international scientific meetings in 1985-1987, governments decided to establish the Intergovernmental Panel on Climate Change (IPCC), under the auspices of the United Nations Environment Programme and the World Meteorological Organization, to provide them with assessments of climate change science, projected social and economic impacts, and potential response strategies. In 1989, the U.N. General Assembly provided a mandate to negotiate what became, in 1992, the U.N. Framework Convention on Climate Change (UNFCCC). The UNFCCC has been the primary multilateral vehicle since 1992 for international cooperation among national governments to address GHG-induced climate change. While the UNFCCC is a focal point for national governments, its periphery is one forum, among others, for information sharing, collaboration, and activism also for subnational governments, financial institutions, the private sector, and nongovernmental organizations. This report is not describing these other, increasingly important aspects of international cooperation on climate change. This report summaries the content of the UNFCCC and its two subsidiary international treaties: the 1997 Kyoto Protocol (KP) and the 2015 Paris Agreement (PA). It also describes the existing guidelines to implement the PA, known as the 2018 Katowice Climate Package. The report highlights information relevant to the 2019 climate change conference, known as COP25. This report is not comprehensive. A number of other CRS reports provide greater detail and nuance on these and other aspects of the international climate change negotiations and cooperation. Some are listed at the end of this report. The U.N. Framework Convention on Climate Change The UNFCCC has been the primary multilateral vehicle since 1992 for international cooperation to address GHG-induced climate change. As of January 1, 2020, there are 197 Parties to the UNFCCC that have ratified, accepted, or acceded to the international treaty, including the United States. There is broad agreement that participation of all countries would be necessary to achieve the objective of the UNFCCC, which is stated as follows: to stabilize greenhouse gas concentrations in the atmosphere at a level that will prevent dangerous human interference with the climate system, in a time frame which allows ecosystems to adapt naturally and enables sustainable development. Achieving the objective would require both abatement of GHG emissions and facilitation of adaptation to adverse impacts of climate change in order to enable sustainable development. Stabilizing GHG concentrations in the atmosphere requires that net GHG emissionsâthe balance of "gross" emissions of GHG to the atmosphere and removals of GHG from the atmosphereâreach "net zero" or "carbon neutrality." Removals and sequestration can occur by photosynthesis (vegetation, sea algae) or through advanced technologies. Some increased level of removals, or "sinks," could allow for some amount of human-related GHG emissions to continue. The United States and other Parties to the UNFCCC agreed to this objective when they ratified the treaty. As a framework convention, this international treaty provides the structure for collaboration and evolution of efforts over decades, as well as the first qualitative step in that collaboration. The UNFCCC does not, however, include quantitative and enforceable objectives and commitments for any Party. The UNFCCC was adopted in 1992 and entered into force in 1994. The UNFCCC's governing body, the Conference of the Parties (COP), met in its 25 th session (COP25) from December 2 to 13, 2019, in Madrid, Spain. Initially, Chilean President SebastiÃ¡n PiÃ±era stepped forward to host COP25 in place of Brazil following the election of President Jair Bolsonaro. PiÃ±era sought to underscore his efforts to address climate change but ultimately decided that the summit should take place elsewhere due to mass protests in Chile. All Parties to the UNFCCC, including the United States, have a set of common obligations under the treaty: to inventory, report, and mitigate their human-related GHG emissions, including emissions and removals from land uses; to cooperate in preparing to adapt to climate change; and to assess and review, through the COP, the effective implementation of the UNFCCC, including the commitments therein. Certain obligations are additional or more specific for the countries that had higher incomes in 1992, and those countries are listed in Annex I of the Agreement. They are commonly referred to as Annex I Parties. All others are non-Annex I Parties. These additional or more specific obligations included more frequent reporting and providing financing and technology transfers, among others. The bifurcation of Parties and commitments has been a major point of contention and, some would argue, delay in negotiation and implementation of the climate change agreements (see text box). The UNFCCC and its subsidiary agreements do not define the terms developing country or developed country . In the 1990s, the Annex I Parties anticipated that developing country Parties would "graduate" into specific commitments and become donor countries as their incomes and emissions grew. As discussed later, related disagreements directly contributed to U.S. nonparticipation in the KP, the collapse of negotiations in Copenhagen in 2009, and the withdrawal or decision of some Parties not to adopt GHG abatement targets in the second period of the KP from 2013 to 2020. The Copenhagen Accord In Copenhagen at COP15 in 2009, the COP was unable to adopt an agreement among all Parties as Bolivia, Cuba, Peru, and Venezuela opposed the text. The decision of the COP included a nonbinding political statement, the Copenhagen Accord, which began a turn toward more explicit commitments by non-Annex I Parties to GHG mitigation under the UNFCCC. The Copenhagen Accord specified that the Annex I Parties would implement quantified economy-wide GHG targets for 2020 in an agreed reporting format. Non-Annex I Parties to the UNFCCC would commit to implement mitigation actions to be submitted in an alternative agreed format. At least 43 Annex I Parties (15 Parties, including the United States, plus the EU-28 jointly submitting a pledge) and 47 non-Annex I Parties had submitted nonbinding pledges. While most countries participated, the pledges remained bifurcated by both the type of action and the reporting requirements. Among other differences, Annex I Parties were to submit quantified economy-wide GHG emissions targets for 2020 relative to a baseyear, while non-Annex I Parties were to submit "nationally appropriate mitigation actions" with no associated dates. The submissions would be compiled separately by the Secretariat of the UNFCCC. The Kyoto Protocol (KP) The first subsidiary agreement to the UNFCCC was the 1997 KP, which entered into force in 2005. The United States signed but did not ratify the KP and so is not a Party to it. The KP established legally binding targets for 37 high-income countries and the European Union (EU) to reduce their GHG emissions on average by 5% below 1990 levels during 2009-2012. It precluded GHG mitigation obligations for developing countries. All Parties with the Quantified Emissions Limitation and Reduction Obligations (QELROS) under the KP (i.e., GHG targets) were judged in compliance after the end of the first commitment period of 2009-2012. The domestic GHG emissions of some Parties were higher than their targets, but as envisioned under the KP, Parties could fulfil their obligations by acquiring emission reduction credits through the three market mechanisms of the treaty: the Clean Development Mechanism, Joint Implementation, and emissions trading. Most of the high-income Partiesâmostly the EU members and other European nationsâtook on further GHG reduction targets for 2013-2020. The Secretariat's assessment of the emissions of the KP Parties with QELROS, as of November 2018, found: Annex I Parties are progressing towards their 2020 targets but gaps remain. Individual Parties have made varying progress towards their 2020 targets: most Parties' emission levels are already below their 2020 targets; some Parties must make further efforts to meet their targets by strengthening implementation of their existing [policies and measures]; and using units from MBMs [market-based mechanisms], if needed, and the contribution from LULUCF [land use, land use change, and forestry], if applicable; other Parties' emissions remained above their base-year level, owing mainly to inadequacy of domestic [policies and measures], high marginal mitigation costs or energy system constraintsâthey indicated that the use of units from MBMs and, if applicable, the contribution from LULUCF are expected to make a sizable contribution towards achieving their targets. The United States did not join the KP, and Canada withdrew before the end of the first commitment period. At least in part, their reasons for disengaging from the KP included the non-Annex I Parties' objections to acceding to quantified GHG reduction commitments. While negotiating the second KP commitment period, Australia, Japan, and other Parties also decided to seek an agreement that included commitments on the same terms from all Parties. This led to a mandate, negotiated at the 2011 COP17 in Durban, South Africa, to develop a protocol, another legal instrument, or an agreed outcome with legal force under the UNFCCC applicable to all Parties no later than 2015. The Durban Mandate resulted in the 2015 PA, discussed below. The Paris Agreement (PA) The PA is the second major subsidiary agreement under the UNFCCC. The PA is to eventually replace the KP as the primary subsidiary vehicle for process and actions under the UNFCCC. Obama Administration officials stated that the PA is not a treaty requiring Senate advice and consent to ratification. The U.N. Climate Conference in Madrid included COP25 and the second session of the "Conference of the Parties serving as the meeting of the Parties to the Paris Agreement" (CMA2), along with meetings of other related bodies. Though the United States has given notice of withdrawal from the PA, its withdrawal is to take effect no earlier than November 4, 2020. Until then, the United States may participate as a Party. After withdrawal takes effect, the United States may participate in a more limited way as an Observer State. The PA was intended to be legally binding on its Parties, though not all provisions in it are mandatory. The PA requires that Parties submit nonbinding pledges, in NDCs, to mitigate their GHG emissions and enhance removals. NDCs may also articulate goals to adapt to climate change and cooperate toward these ends, including mobilization of financial and other support. Some provisions are binding, such as those regarding reporting and review, while others are recommendations or collective commitments to which it would be difficult to hold an individual Party accountable. Key aspects of the agreement include: Temperature goal. The PA defines a collective, long-term objective to hold the GHG-induced increase in temperature to well below 2 o Celsius (C) and to pursue efforts to limit the temperature increase to 1.5 o C above the pre-industrial level. As discussed below, a periodic "Global Stocktake" is to assess progress toward the goals. Single GHG mitigation framework. The PA establishes a process, with a ratchet mechanism in five-year increments, for all countries to set and achieve GHG emission mitigation pledges until the long-term goal is met. For the first time under the UNFCCC, all Parties participate in a common framework with common guidance, though some Parties are allowed flexibility in line with their capacities. Accountability framework. To promote compliance, the PA balances accountability to build and maintain trust (if not certainty) with the potential for public and international pressure ("name-and-shame"). Also, the PA establishes a compliance mechanism designed to use expert-based and facilitative review and response rather than punitive measures. Many Parties and observers are to closely monitor the effectiveness of this strategy. Adaptation. The PA also requires "as appropriate" that Parties prepare and communicate their plans to adapt to climate change. Parties agreed that adaptation communications would be recorded in a public registry. Collective financial obligation. The PA reiterates the collective obligation in the UNFCCC for developed country Parties to provide financial resourcesâpublic and privateâto assist developing country Parties with mitigation and adaptation efforts. It urges scaling up from past financing. The Parties agreed to set, prior to their 2025 meeting, a new collective quantified goal for mobilizing financial resources of not less than $100 billion annually to assist developing country Parties. The Katowice Package At COP24/CMA1 in Katowice, Poland, in 2018, the PA Parties agreed to many of the guidelines and processes so that Parties may implement the PA as intended. Despite these agreements, Parties did not resolve several issues of significance. Negotiations on these issues will likely continue at COP26/CMA3 in Glasgow, Scotland, in November 2020. The Katowice Package, as it is often called, clarified some ambiguities in the PA that were considered important to U.S. interests, including guidelines for Parties to report their NDCs, and the Enhanced Transparency Framework (ETF) with guidelines and formats to allow a Party's NDC to be clearly understood. The Katowice Package thereby supports the effectiveness of the consultative compliance mechanism of the PA (discussed below). Below are brief summaries of key aspects of the Katowice Package. NDC Guidelines The Parties to the PA agreed to new guidelines on how to report NDCs. NDCs are to be updated every five years and "will" represent a progress in ambition to abate GHG emissions beyond the previous NDC. While Parties agreed that they "should" use a prescribed format for communicating NDCs, the details are still to be worked out. There is not agreement yet on "common timeframes" for NDCsâwhether NDCs should look five or 10 years into the future. Those Parties that submitted NDCs with time frames up to 2025 (including the United States) must communicate "new" NDCs by 2020. Those Parties with NDCs with time frames up to 2030 must communicate or update their NDC in 2020. Were the United States to remain in the PA, it would be required to submit a new NDC in 2020. The content of NDCs continues to be nationally determined and nonbinding, but it should reflect what a Party intends to achieve. The guidelines apply to NDCs submitted in 2025, but Parties are invited to use an agreed format in updating their NDCs in 2020. The guidelines also address how to report adaptation measures for Parties that wish to include them in their NDCs. Voluntary Cooperation and Market Mechanisms The PA provides in Article 6 for Parties to choose voluntary cooperation with other Parties to implement their NDCs. The purpose is to allow "higher ambition in their mitigation and adaptation actions and to promote sustainable development and environmental integrity" (Article 6.1). This article, in other words, allows the use of market mechanisms to achieve GHG mitigation at the lowest possible cost and in concert with sustainable development. This, in theory, can induce Parties to take on stronger GHG mitigation commitments while ensuring that the GHG mitigation constitutes real emission reductions. The debate about the purpose for voluntary cooperation and market mechanismsâand the rules by which they are put into operationâwas a major area of work undecided in Katowice. Adaptation Reporting Parties agreed to provide information on adaptation priorities, needs, plans, and actions in new "adaptation communications," as well as through the NDCs. Parties agreed in Katowice that the Adaptation Fund, originally established under the 1997 Kyoto Protocol, will serve the PA. It will be one of the operating entities to the financial mechanism of the PA in addition to the Global Environment Facility and the Green Climate Fund, discussed below Global Stocktake As prescribed by the PA, a Global Stocktake is to be held every five years. Parties agreed that the Global Stocktake will consider progress toward the UNFCCC's objective and the PA's aims overall. It will use best available science and will cover mitigation, adaptation, financial flows, equity, and means of implementation and support. It will not examine the situations of individual Parties. Parties decided that the next Global Stocktake would be held in 2023. A number of decisions were reached regarding the Global Stocktake, including the information it is expected to receive from the ETF (discussed below) and other sources from PA processes. Input may also come from nonstate actors, including non-Parties, localities and subnational governments, the business community, and all parts of civil society. The Enhanced Technology Framework (ETF) Setting strong requirements for the transparency of each Party's efforts has been a priority of the United States since the negotiation of the UNFCCC. ETF guidelines specify the information that Parties must report with their NDCs. That information is expected to support a "facilitative multilateral consideration of progress," along with biennial transparency reports. Methods for GHG emission estimation and other technical issues will continue to rely on the IPCC's technical advice. According to the U.N. Climate Change Secretariat, all Parties must provide information on the following, as applicable to their NDCs: Quantifiable information on the reference point for GHG mitigation actions or targets; Time frame and/or periods (i.e., the start and end dates) for implementation; Scope and coverage of the NDC (i.e., the quantitative target, which sources and gases are covered); National planning processes for developing the NDC and, if available, implementation plans taking into account national circumstances; All assumptions and methodological approaches; How the Party determines that its NDC is fair and ambitious; and How the NDC contributes toward achieving the objective of the UNFCCC. The guidelines are to facilitate review and, under the committee (below), consultation intended to encourage compliance with commitments. Whether a Party supplies a timely NDC and reports its NDC according to the guidelines is subject to review by a technical group of experts. The adequacy and appropriateness of Parties' NDCs are not subject to review under the ETF. Flexibility in reporting under the PA is afforded only for those provisions in the modalities, procedures, and guidelines that are specified to allow flexibility. These provisions include (1) the frequency and level of details of reporting, (2) the modalities of the review, and (3) the modalities of the facilitative multilateral consideration of progress. A Party may determine whether to make use of flexibilities. That said, using the flexibilities is not without checks in the review processes. A developing country that claims inadequate capacity to meet the guidelines and elects to apply a flexibility must make clear in its Biennial Transparency Report that it has applied a flexibility. It must explain the capacity constraint, how it intends to address the constraint, and its intended time frame to make improvements to the constraint(s). The technical review teams may not review these flexibilities. Committee The Parties established a 12-member committee to "facilitate implementation" of the PA. The committee is intended to support Parties' efforts to meet their obligations under the PA as a soft, pro-compliance mechanism. The PA's compliance processes are consultative, not punitive. The committee may initiate a "consideration" should a Party not submit or update its NDC as required or provide mandatory communications. Financing In 2009 and 2010, developed countries pledged collectively to mobilize US$100 billion per year by 2020, from public and private sources, to support mitigation and adaptation activities in low-income countries. COP decision 1/CP.21 to adopt the PA (not the PA itself) stated that developed countries intend to continue their existing collective mobilization goal through 2025. Prior to 2025, the Parties shall set a new collective quantified goal for financial resources from a floor of US$100 billion per year. The goal should take into account the needs and priorities of developing countries. Parties may take into consideration the information from the Warsaw International Mechanism for Loss and Damage associated with Climate Change Impacts. The financial pledges are not an enforceable commitment by developed country Parties. Many stakeholders argue, nonetheless, that the resources are essential to help low-income countries contribute to GHG abatement and adaptation in the context of sustainable development. The financial flows are also important politicallyâin part to build confidence in the functionality of the UNFCCC and PA and to build trust between the lower and higher income economies. At COP24 and since then, some countries made pledges toward this goal. Some developing country Parties submitted NDCs with GHG mitigation targets they would achieve unconditionally and more ambitious targets that they would achieve with adequate financial and technical support. The Green Climate Fund (GCF) was proposed, during the 2009 COP in Copenhagen to be a new international financial institution connected to the UNFCCC. The fund and its design was agreed during the 2011 COP in Durban, South Africa. The GCF was made operational in 2014. The GCF aims to assist lower-income countries in their efforts to combat climate change through the provision of grants and other concessional financing for mitigation and adaptation projects, programs, policies, and activities. The GCF is capitalized by contributions from donor countries and other sources, potentially including innovative mechanisms and the private sector. The GCF officially opened for capitalization at the U.N. Climate Summit in September 2014. The GCF's initial resource mobilization lasted from 2015 to 2018. As of the most recent published reporting (April 30, 2019), the GCF had raised over $10.2 billion in signed pledges from 48 countries/regions/cities during the resource mobilization period. The GCF board recently approved 10 new projects, increasing the GCF portfolio to 111 projects and increasing the level of related GCF funding to over $5.2 billion in 99 developing countries. On October 25, 2019, during the Pledging Conference for GCF's First Replenishment in Paris, 27 countries made pledges totaling $9.8 billion to cover the next four years of the fund. Parties agreed in Katowice that the Adaptation Fund, which was established under the KP, will serve the PA, in addition to the Global Environmental Facility and the GCF. Thus far, the Adaptation Fund has been financed by a share of the proceeds of the emissions trading mechanisms under the KP, as well as by voluntary contributions. With a transition from the KP to the PA, arrangements for the flow of funds are not completely agreed upon. Parties agreed that a share of the proceeds from one of the new cooperative mechanisms will continue to provide a share of its proceeds to the Adaptation Fund. A number of Parties oppose proposalsâparticularly from Parties that are relatively small and perceived to be especially vulnerable to climate changeâto use the other two market mechanisms under Article 6 to finance the Adaptation Fund. Beginning in 2020, developed countries are to submit biennial communications on expected levels of climate finance. The communications are to contain both quantitative and qualitative information. The biennial communications and Secretariat synthesis of the information therein is to inform the Global Stocktakes. Starting in 2020, the Standing Committee on Finance is to report on the determination of support needs of developing countries to implement the UNFCCC and the PA. The committee is also to consider financial needs consistent with long-term low-emissions and sustainable development pathways. Technology The Technology Framework of the PA is to provide overall guidance to the Technology Mechanism that was established under the UNFCCC. The purpose of both is to foster sharing of information and cooperation to develop new, low-emission technologies and technologies to increase resilience to climate change. Supporters viewed the technology mechanisms as important in transforming the set of technologies available, and the economies that use them, as a means to meet the objective of the UNFCCC. The Technology Framework is to have five focus areas: (1) innovation, (2) implementation, (3) enabling environments and capacity-building, (4) collaboration and stakeholder engagement, and (5) support. The Parties intend that the framework should facilitate the active participation of all relevant stakeholders and take into account sustainable development, gender, the special circumstances of the least developed countries and small island developing states, and the enhancement of capacities of indigenous people and "endogenous technologies." The Executive Committee of the Technology Framework is expected to report on the progress and challenges of its work in joint annual reports with the Climate Technology Centre established under the UNFCCC. Related CRS Products CRS Report R44609, Climate Change: Frequently Asked Questions About the 2015 Paris Agreement , by Jane A. Leggett and Richard K. Lattanzio CRS In Focus IF10239, President Obama Pledges Greenhouse Gas Reduction Targets as Contribution to 2015 Global Climate Change Deal , by Jane A. Leggett CRS Report R44092, Greenhouse Gas Pledges by Parties to the United Nations Framework Convention on Climate Change , by Jane A. Leggett CRS In Focus IF10668, Potential Implications of U.S. Withdrawal from the Paris Agreement on Climate Change , by Jane A. Leggett CRS Report R44761, Withdrawal from International Agreements: Legal Framework, the Paris Agreement, and the Iran Nuclear Agreement , by Stephen P. Mulligan CRS Legal Sidebar WSLG1836, Constitutional Limits on States' Efforts to "Uphold" the Paris Agreement , by Stephen P. Mulligan CRS Report R41889, International Climate Change Financing: The Green Climate Fund (GCF) , by Richard K. Lattanzio CRS Report R41845, The Global Climate Change Initiative (GCCI): Budget Authority and Request, FY2010-FY2016 , by Richard K. Lattanzio CRS In Focus IF10248, China's "Intended Nationally Determined Contribution" to Addressing Climate Change in 2020 and Beyond , by Jane A. Leggett CRS In Focus IF10296, New Climate Change Joint Announcement by China and the United States , by Jane A. Leggett CRS Report R40001, A U.S.-Centric Chronology of the United Nations Framework Convention on Climate Change , by Jane A. Leggett CRS In Focus IF10904, Potential Hydrofluorocarbon Phase Down: Issues for Congress , by Jane A. Leggett	Summary:	gov_report	1,024	null	22
crs_R46176	crs_R46176_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction and Legislative Context The Higher Education Act of 1965 (HEA; P.L. 89-329, as amended) authorizes programs and activities to provide support to individuals who are pursuing postsecondary education and to institutions of higher education (IHEs). The HEA was last comprehensively reauthorized by the Higher Education Opportunity Act of 2008 (HEOA; P.L. 110-315 ). The HEOA extended the authorization of appropriation of funds for most HEA programs through FY2014, while the General Education Provisions Act (GEPA) provided an extension of that authority for an additional year (through FY2015). Many HEA programs have continued beyond FY2015 with funding provided under a variety of appropriations measures and continuing resolutions. During the 116 th Congress, the House Committee on Education and Labor marked up and ordered to be reported the College Affordability Act (CAA; H.R. 4674 ). The bill would provide for the comprehensive reauthorization of most HEA programs, create a number of new postsecondary education programs, and address certain issues related to higher education but separate from the HEA. In general, for programs with discretionary funding H.R. 4674 would authorize the appropriation of funds in specific, as opposed to indefinite, amounts for each year in which funding would be authorized to be provided. The Congressional Budget Office (CBO) estimates that the enactment of H.R. 4674 would increase mandatory spending outlays by approximately $161 billion in the 5-year period from FY2020 to FY2024 and by about $332 billion in the 10-year period from FY2020 to FY2029 period. In the 10-year estimate, about half the mandatory spending increase would result from changes to the federal student loans programs and about a quarter of the increase would result from changes to the Pell Grant program. CBO further estimates that the enactment of H.R. 4674 would increase discretionary spending outlays by about $149 billion in the 5-year period from FY2020 to FY2024. This largely reflects the extension of periods of authorized appropriations for existing programs. CBO did not make a 10-year estimate for discretionary spending. This report focuses on the key themes in H.R. 4674 and describes major changes proposed in the bill that are representative of those themes. It aims to provide a general understanding of the primary proposals of H.R. 4674 . The report does not aim to provide a comprehensive analysis of the bill nor of technical changes that would be made by it. Key Themes in H.R. 4674, as Ordered Reported with Amendments H.R. 4674 , as ordered to be reported on October 31, 2019, would provide for the comprehensive reauthorization of the HEA, amending numerous programs and activities that make up a large portion of the federal effort to support postsecondary education. Taken collectively, the changes that would be made by H.R. 4674 reflect several key themes: (1) expanding the availability of financial aid to postsecondary students; (2) implementing borrower-focused student loan reforms; (3) modifying institutional accountability requirements for receipt of federal funds; (4) revising public accountability, transparency, and consumer information requirements; (5) expanding student services for specific populations; (6) expanding federal assistance to provide support to IHEs; and (7) creating new grant programs for states and institutions to reduce students' postsecondary costs. Each of these themes is discussed in the text that follows. Expanding the Availability of Financial Aid to Postsecondary Students Title IV of the HEA authorizes a group of federal student aid programs that provide aid to eligible individual students through grant and loan programs and work-study assistance. H.R. 4674 would expand aid availability in a number of ways, with considerable emphasis placed on increasing funding made available through grant programs. Some provisions in H.R. 4674 would increase aid availability by expanding eligibility. Expansion of Pell Grants HEA Title IV, Part A authorizes Pell Grantsâfinancial need-based grants that are available to eligible undergraduate students. Student Pell Grant eligibility is determined on a sliding scale, based on a student's expected family contribution (EFC). The Pell Grant program is the largest grant program authorized in Title IV in terms of both the number of grants (about 7.1 million in award year [AY] 2017-2018) and the total awards (about $28.7 billion in AY2017-2018). The Pell Grant program is often referred to as aÂ quasi-entitlementÂ program, through which all eligible applicants receive grants. Generally, the maximum Pell Grant a full-time, full-academic-year student can receive is the difference between the total maximum Pell Grant ($6,345 in AY2020-2021) and the student's EFC. A full-time, full-academic-year student who has an EFC of zero would be eligible for the total maximum grant. For a student who enrolls on a less-than-full-time basis, his or her maximum scheduled award is ratably reduced. To receive a Pell Grant, a student must be enrolled in an eligible program at an eligible IHE. H.R. 4674 would increase the total maximum Pell Grant and would expand the population of eligible students and the types of eligible educational programs. The bill would also permanently authorize discretionary appropriations for the Pell Grant program. Increase of Total Maximum Pell Grant The total maximum Pell Grant is the sum of a mandatory add-on award amount and a discretionary award amount. The mandatory add-on award is an amount established by the HEA and funded by a permanent, indefinite mandatory appropriation. The discretionary award amount is specified in annual appropriations laws. Under current law, in the upcoming award year (AY2020-2021) the total maximum Pell Grant will be $6,345. H.R. 4674 would, on the whole, increase the mandatory add-on award levels in AY2021-2022 and in each award year thereafter. For AY2021-2022, the mandatory add-on award would be $1,685, an increase of $625 from $1,060 in AY2020-2021; thus, the total maximum grant amount would be $6,970 assuming the discretionary award level were the same as provided under current law in AY2020-2021. H.R. 4674 would further increase the total maximum grant by the rate of inflation in each year following AY2021-2022, assuming the discretionary award levels were not lower than the preceeding year. The increased award amounts would be funded by corresponding increases in mandatory appropriations. There are two primary effects of an increase to the total maximum Pell Grant: 1. Currently eligible students would be eligible for a larger Pell Grant. Most full-time, full-year recipients would be eligible for a Pell Grant that is up to $625 higher in AY2021-2022 compared to AY2020-2021. Students who are not full-time, full-year would qualify for smaller increases. 2. A portion of students whose EFCs would have been too high to qualify for a Pell Grant may become newly Pell-eligible. Pell Eligibility Expansions H.R. 4674 would expand the availability of Pell Grants in several other ways, including the following: Increase of period of eligibility (lifetime eligibility limit). Under current law, eligible students may receive Pell Grants for up to 12 full-time semesters (or the equivalent). H.R. 4674 would increase this limit to 14 full-time semesters (or the equivalent). Pell Grants to incarcerated students. H.R. 4674 would eliminate the provision in current law that prohibits persons incarcerated in federal and state facilities from receiving a Pell Grant, creating Pell eligibility for incarcerated and civilly committed persons. H.R. 4674 would restrict such persons from receiving Pell Grants while attending proprietary IHEs. Pell Grants to graduate students. Under current law, Pell Grants are limited to undergraduate students and students in some postbaccalaureate teacher education programs. H.R. 4674 would, in some cases, permit graduate students who received Pell Grants as undergraduates and have not exhausted their lifetime Pell Grant eligibility to receive Pell Grants at public and nonprofit IHEs. Job Training Pell Grants Under current law, Pell Grants are typically limited to programs of at least 600 clock hours, 16 semester or trimester hours, or 24 quarter hours offered over a minimum of at least 15 weeks. H.R. 4674 would create a new category of "Job Training Federal Pell Grants" that could be applied to shorter programs of between 150 and 600 hours and between 8 and 15 weeks. To qualify for the new grants, a training program would need to meet the following criteria: Demonstrate alignment with "high-skill, high-wage, or in-demand" sectors or occupations, and meet the hiring requirements of employers in those sectors or occupations. Prepare students to pursue related certificate or degree programs at an IHE by providing academic credit toward a certificate or degree program. Be provided by a public or private nonprofit IHE that is an eligible provider under the Workforce Innovation and Opportunity Act (WIOA) and that fulfills additional institutional eligibility requirements related to Secretarial approval, gainful employment, accreditation, and reporting. In many cases, the shorter term nature of the job training programs may result in a Pell Grant that is for a lesser amount than the total maximum award for a full-year, full-time student. For example, assuming a total maximum Pell Grant of $6,195 (maximum award for the current 2019-2020 award year), a student with a zero EFC pursuing a 150 clock hour program over 8 weeks would qualify for a Pell Grant of no more than $1,035, or approximately 17% of the total maximum Pell Grant award, depending on the cost of the program. Creation of Direct Perkins Loan Program HEA, Title IV, Part E establishes the operation of the Federal Perkins Loan program. Authorization to make new Perkins Loans to students expired on September 30, 2017. Borrowers of loans previously made through the Perkins Loan program remain responsible for making payments on those loans. H.R. 4674 would authorize a new Direct Perkins Loan program, which, although it would share a name and have some similarities with the curtailed Perkins Loan program (which was administered by IHEs as a campus-based program), would be significantly different. The newly created program would be a direct loan program , under which the federal government lends directly to students using federal capital and is responsible for loan servicing and collections work (which is performed primarily by contractors). Under the Direct Perkins Loan program, loans with many of the same terms and conditions as Direct Unsubsidized Loans would be made available to students, with award priority given to students demonstrating exceptional financial need. Undergraduate students would be eligible to borrow up to $5,500 annually and $27,500 in the aggregate; graduate and professional students would be eligible to borrow up to $8,000 annually and $60,000 in the aggregate through the Direct Perkins Loan Program. Annual and aggregate Direct Perkins Loan limits would be independent of annual and aggregate limits under the Direct Loan program, but aggregate limits would include loans previously made to students under the curtailed Perkins Loan program. Interest rates on Direct Perkins Loans would be fixed at 5% per year. In general, annual authority to make Direct Perkins Loans to students would be allocated to IHEs via a formula that would consider unmet student need and Pell Grant funds awarded at the IHE. However, H.R. 4674 would authorize a base guarantee for loan authority, equal to the average of an IHE's total principal amount of loans made in academic years 2012-2013 through 2016-2017 under the previously authorized Perkins Loan program. H.R. 4674 would provide mandatory appropriations for the program, not to exceed $2.4 billion in "annual loan authority" for AY2021-2022 and for each succeeding fiscal year. Modifications to Campus-Based Grant Programs The HEA authorizes two campus-based grant programs that provide federal funds to IHEs that administer the programs and provide institutional funds to match a portion of the federal funds they receive. The institutions then distribute these funds to students using some discretion but operating within statutorily specified parameters. H.R. 4674 would make substantial but similar changes to the formulas that are used to distribute federal funds under each of the two campus-based grant programs and would increase the authorized appropriations level for each program. Federal Supplemental Educational Opportunity Grant (FSEOG) Program HEA, Title IV, Part A authorizes the FSEOG program, which provides funds to IHEs for grants to undergraduate students who demonstrate exceptional financial need. Most IHEs are required to provide matching funds so that the federal share of FSEOG is no more than 75%. In FY2019, FSEOG appropriations totaled $840 million. Under current law, FSEOG funds are distributed to IHEs using a formula that first distributes funds on the basis of what the IHEs received in past years (their base guarantee ), with the strongest base protection provided for schools that have participated in the program since at least FY1999. The remaining funds are distributed on the basis of the IHEs' proportional shares of eligible undergraduate student need (their fair share ). Beginning in FY2021, H.R. 4674 would replace the existing formula with a modified version of the fair share formula that considers unmet student need and Pell Grant funds awarded at the IHE. In FY2021, IHEs would receive the higher of their grant under the new formula or 90% of their FY2020 grant. The percentage would decline in subsequent years, and in FY2026 FSEOG allotments for all IHEs would be based entirely on the new formula. H.R. 4674 would also establish new institutional eligibility criteria that would take into account the proportion of Pell Grant recipients enrolled at an IHE. H.R. 4674 would increase the authorization of discretionary appropriations to $1.15 billion in FY2021. The authorization level would then increase by $150 million per year until reaching $1.75 billion in FY2025. The authorization level would remain at the FY2025 level for each succeeding fiscal year. Emergency Grant Program H.R. 4674 would create an emergency grant program for FSEOG-participating IHEs. The program would be funded through a $12.5 million set-aside from the FSEOG appropriation for FY2021 through FY2026. Most participating IHEs would be required to provide a 50% match to participate in the program. Priority would be given to IHEs at which at least 30% of enrolled students are Pell Grant-eligible. To participate in the program, each IHE would be required, among other things, to provide assurance that emergency grant funds would be used to address "financial challenges that would directly impact the ability of an eligible student to continue and complete [his or her] course of study." Federal Work-Study (FWS) Programs HEA, Title IV, Part C of the HEA authorizes the FWS programs, which provide grants to IHEs to support part-time employment for qualified undergraduate, graduate, and professional students. FWS employment may consist of work at the IHE a student attends; a private nonprofit organization; a federal, state, or local public agency; or a private for-profit organization. In FY2019, FWS appropriations were $1.13 billion. Under current law, FWS funds are distributed to IHEs using a formula similar to the current-law FSEOG formula, allocating funds on the basis of the base guarantee and fair share factors. Under H.R. 4674 , the FWS formula would be the same as the FSEOG formula. Funds would be distributed based on a modified version of the fair share formula that considers unmet student need and Pell Grant funds awarded at the IHE. In FY2021, IHEs would receive the higher of their grant under the new formula or 90% of their FY2020 grant. The percentage would decline in subsequent years, and in FY2026 FWS allotments for all IHEs would be based entirely on the new formula. H.R. 4674 would also establish new institutional eligibility criteria that would take into account the proportion of an IHE's undergraduate student population that are Pell Grant recipients and the proportion of an IHE's graduate population who have a zero EFC. H.R. 4674 would increase the authorization of discretionary appropriations to $1.5 billion in FY2021. The authorization level would increase by $250 million per year until reaching $2.5 billion in FY2025. The appropriation level would remain at the FY2025 level for each succeeding fiscal year. Grants for Improved Institutions H.R. 4674 would reserve a portion of the FWS appropriation for a new grant program for "improved institutions" on the basis of the share and performance of Pell Grant recipients at the institutions. The amount reserved for this program would be the lesser of (1) 20% of the FWS appropriation in excess of $700 million or (2) $150 million. These provisions would take effect two years after enactment of H.R. 4674 . Modifications to Need Assessment and the Free Application for Federal Student Aid (FAFSA) Process Individual eligibility for many student aid programs is contingent on student need. A key factor in determining need is assessing and establishing the ability of a student's family to pay postsecondary education costs. HEA, Title IV, Part F establishes a series of formulas that calculate a student's expected family contribution (EFC). The EFC formulas consider financial and personal characteristics of a student's family that are reported on the FAFSA. Students with lower EFCs typically qualify for more need-based aid, and students with a zero EFC qualify for the maximum amount of need-based aid. H.R. 4674 would make changes to the HEA that could reduce EFC levels and correspondingly increase aid eligibility, particularly for lower-income students. Some provisions in the bill would reduce the amount of information that some students would have to provide when completing the FAFSA. Specific changes include the following: Expansion of automatic zero EFC. Under current law, some FAFSA applicants may qualify for an automatic zero EFC if they report an adjusted gross income (AGI) level below $26,000 and meet other criteria. H.R. 4674 would increase the AGI threshold to $37,000, newly extend automatic zero eligibility to independent students without dependents, and expand the automatic zero EFC to any applicant who received a qualified means-tested benefit in the 24 months prior to application. Creation of FAFSA pathways. H.R. 4674 would create a system of three pathways in which the amount of financial information a FAFSA filer would be required to provide would be based on the filer's income and the complexity of his or her tax return. Applicants who received a means-tested benefit in the previous 24 months would not be required to provide any additional financial information beyond benefit receipt. One-time FAFSA option. Under current law, students must file a FAFSA each year that they seek aid. H.R. 4674 would create an option for students who are Pell-eligible in their first year of postsecondary education to decline to file the FAFSA in succeeding years and have their first year's EFC apply. The one-time FAFSA option would apply to the period required for the completion of a student's first undergraduate baccalaureate course of study. Streamline d procedures for foster care and homeless youth. Under current law, foster care youth and homeless youth qualify as independent students and do not have to report parental income on the FAFSA. H.R. 4674 would expand and streamline the procedures by which qualified youth can establish and verify their status. Expansion of Federal Student Aid to Certain Noncitizen Students Under current law, federal student aid is limited to U.S. citizens, lawful permanent residents, and certain eligible noncitizens. Unauthorized immigrants are not eligible for federal student aid. H.R. 4674 would extend eligibility for HEA Title IV student aid to unauthorized individuals who entered the United States when they were younger than age 16 and either earned a high school diploma (or equivalent) or served in the uniformed services for at least four years. The bill would also extend eligibility to individuals who have temporary protected status and to certain unauthorized individuals who have a son or daughter who is a United States citizen or lawful permanent resident. Instituting Borrower-Focused Student Loan Reforms Title IV of the HEA specifies provisions for the operation of three federal student loan programs: the William D. Ford Federal Direct Loan (Direct Loan) program, the Federal Family Education Loan (FFEL) program, and the Federal Perkins Loan program. Currently, however, new loans are authorized to be made only through the Direct Loan program. The authority to make new loans through the FFEL program expired June 30, 2010, and the authority to make new loans through the Federal Perkins Loan program expired September 30, 2017. While H.R. 4674 would make a variety of student loan reforms that apply to both the FFEL and Direct Loan programs, the discussion herein will focus on the Direct Loan program, as it is the primary federal student loan program currently in operation, is the only program currently making new loans to students and their families, and would be the primary student loan program in operation under the HEA as amended by the CAA. The Direct Loan program is authorized under HEA, Title IV, Part D, and is the largest federal program that makes available financial assistance to support students' postsecondary educational pursuits. The Direct Loan program is a federal credit program for which permanent indefinite mandatory appropriations are provided for loan subsidy costs, and annual discretionary appropriations are provided for administrative costs. Direct Loans are made to students and their families using funds borrowed by the Department of Education (ED) from the U.S. Treasury. The IHE a student attends originates and disburses Direct Loans, while federal contractors hired by ED perform loan servicing and collection functions. Several types of loans are made available through the program: Direct Subsidized Loans to undergraduate students, Direct Unsubsidized Loans to undergraduate students and graduate students, Direct PLUS Loans to graduate and professional students and the parents of undergraduate dependent students, and Direct Consolidation Loans, which enable individuals who have previously borrowed federal student loans to combine them into a single new loan. Loan terms and conditions (e.g., interest rates, borrowing limits) are specified in statute and may vary depending on the type of loan borrowed. ED estimates that in FY2020, 15.9 million new loans totaling $100.2 billion will be made through the Direct Loan program. In addition, ED estimates that 755,000 Direct Consolidation Loans totaling $46.4 billion will be made to existing borrowers of federal student loans. As of the end of the third quarter of FY2019, $1.2 trillion in principal and interest on Direct Loan program loans, borrowed by or on behalf of 34.3 million individuals, remained outstanding. H.R. 4674 would make a variety of borrower-focused reforms to the Direct Loan program. In general, many of these reforms are aimed at easing a borrower's student loan burden by amending loan terms and conditions (including loan repayment and forgiveness options) to be more generous once an individual has entered repayment on his or her loan, modifying and streamlining student loan administrative procedures, and expanding the availability of student loan refinancing options. Provision of More Generous Loan Repayment Terms and Conditions Currently, upon entering repayment on a Direct Loan a number of terms and conditions are available to borrowers. Many of these are intended to help borrowers manage their student loan debt, but some could be detrimental in some circumstances. H.R. 4674 would make a variety of changes aimed at making student loan repayment easier and more affordable for borrowers. Elimination of Loan Origination Fees Currently, loan origination fees are charged to borrowers of Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans. These fees help offset federal loan subsidy costs by passing along some of the costs to borrowers. Loan origination fees are calculated as a proportion of the loan principal borrowed and are deducted proportionately from the proceeds of each loan disbursement to the borrower. Loan origination fees for Direct Subsidized Loans and Direct Unsubsidized Loans made on or after July 1, 2010, equal 1%. Loan origination fees for Direct PLUS Loans equal 4%. H.R. 4674 would eliminate loan origination fees. Streamlining Loan Repayment Plans Borrowers may currently choose from among numerous loan repayment plan options, which include five broad categories: standard repayment plans, extended repayment plans, graduated repayment plans, income-driven repayment (IDR) plans, and alternative repayment plans. Several repayment plan variations exist within each of these broad categories. Under the IDR plans, in general, borrowers make monthly payments equal to one-twelfth of 10% or 15% (depending on the specific plan) of their adjusted gross income (AGI) that exceeds 150% of the federal poverty guideline applicable to their family size. Basing monthly payments on only the portion of a borrower's AGI that is above 150% of the federal poverty guidelines essentially serves as an income protection for borrowers. Under some of the IDR plans, borrowers' monthly payments are capped at the monthly amount they would have paid according to a standard 10-year repayment period, regardless of whether the calculated monthly payment based on their income would have been greater. Borrowers who make payments according to these plans may have any remaining loan balance forgiven after 20 or 25 years (depending on the specific plan) of repayment. The particular repayment plans available to an individual borrower may depend on the type of loan borrowed, the date of becoming a new borrower, or the date of entering repayment status. In general, negative amortization is permitted in the IDR plans but not other plans. H.R. 4674 would establish two new loan repayment plansâa fixed repayment plan and an income-based repayment (IBR) plan. Borrowers of Direct Loans made on or after July 1, 2021, would be required to repay their loans according to only these plans, and certain borrowers of Direct Loans made on or before June 30, 2021, would be permitted to repay according to these plans. The fixed repayment plan proposed under H.R. 4674 would be similar to some of the standard plans currently offered in the Direct Loan program (e.g., providing for fixed monthly payments with loan repayment periods equaling 10 to 25 years, depending on the loan balance). Compared to existing IDR plans, the proposed IBR plan would take a more generous approach toward protecting income from consideration when establishing monthly loan payments for many, but not all, borrowers. Under the proposed IBR plan, a borrower's monthly payments would equal one-twelfth of 10% of the amount (if any) of their adjusted gross (AGI) that exceeds a statutorily specified income protection that is indexed to the federal poverty guidelines. For borrowers with AGIs of $80,000 or less (or $160,000 or less for married borrowers), the income protection would equal 250% of the federal poverty guidelines applicable to the borrower's family size. For borrowers with AGIs that exceed $80,000 (or $160,000 for married borrowers), the income protection would decrease as his or her AGI increases and would be phased out entirely when the borrower's AGI equals or exceeds $105,000 (or $210,000 for married borrowers). For example, a single borrower with an AGI of $79,000 would pay 10% of his or her AGI that exceeds 250% of the federal poverty guidelines, whereas a single borrower with an AGI of $81,000 would pay 10% of his or her AGI that exceeds 240% of the federal poverty guidelines. No monthly payment cap would be available under the proposed IBR plan. Under this IBR plan, negative amortization would be permitted and borrowers who make payments for 20 years would be eligible to have any balance that remains forgiven. Reducing Interest Accrual and Capitalization Under a limited set of circumstances, the federal government subsidizes (i.e., a borrower is relieved from paying) some or all of the interest that would otherwise accrue on loans made through the Direct Loan program. In general, interest subsidies are largely available for need-based Direct Subsidized Loans (and for the subsidized component of Direct Consolidation Loans), which are currently only being made to undergraduate students. Periods in which interest is subsidized on these loans include in-school periods while a borrower is enrolled in an eligible program on at least a half-time basis, during a six-month grace period following enrollment on at least a half-time basis, and during periods of authorized deferment. For borrowers who may be having trouble making monthly loan payments, periods of deferment and forbearance offer temporary relief from the obligation to make such payments. In general, any interest that accrues during a period of deferment or forbearance is later capitalized (i.e., becomes part of the outstanding principal balance of the loan), which increases the total amount a borrower is required to repay on his or her loan. H.R. 4674 would make Direct Subsidized Loans available to graduate and professional students enrolled at public and private, nonprofit IHEs for any period of instruction beginning on or after July 1, 2021. The interest rate on Direct Subsidized Loans to graduate students would be the same as the interest rate on Direct Unsubsidized Loans for graduate and professional students. The bill would also amend the HEA to provide that interest that accrues on any type of Direct Loan during most periods of deferment or forbearance shall not be capitalized. That is, the interest would accrue and borrowers would be required pay it, but the accrued unpaid interest would not be added to the principal balance of a loan. Expansion of Loan Discharge and Loan Forgiveness Benefits The HEA currently makes various loan discharge or forgiveness options available to borrowers under a variety of circumstances. In general, loan discharge is provided in cases of borrower hardship, while loan forgiveness is provided for public service or following IDR plan repayment for an extended time period. H.R. 4674 would expand borrower eligibility for various loan discharge and loan forgiveness options, two of which are described below. Borrower Defense to Repayment Among other discharge provisions, the HEA provides that ED shall specify in regulations the "acts or omissions" of an IHE a borrower may assert as a borrower defense to repayment (BDR). Regulations that are currently in effect specify the standards and procedures for determining whether a borrower is eligible for a BDR discharge, and newly promulgated regulations scheduled to become effective July 1, 2020, amend those standards and procedures for loans disbursed on or after July 1, 2020. Both those regulations currently in effect and those effective July 1, 2020, provide that a borrower may have his or her loan discharged in whole or in part, depending on the circumstances. The regulations that are effective July 1, 2020, are viewed by some as being less beneficial to borrowers than current regulations. H.R. 4674 would amend the HEA to more explicitly define the standards under which a borrower would be determined eligible for a BDR discharge; some, but not all, of the BDR standards applicable to loans made prior to July 1, 2020, would be applicable to Direct Loans. It would also specify that in general, BDR discharge-eligible borrowers would be entitled to have the full balance of their loan discharged, but that ED may provide partial discharge in certain circumstances. Finally, H.R. 4674 would require ED to establish procedures for the fair and timely resolution of BDR claims and would specify elements to be included in such processes, some of which are currently available to pre-July 1, 2020, borrowers, but not to post-July 1, 2020, borrowers. Public Service Loan Forgiveness Among other loan forgiveness provisions, the Public Service Loan Forgiveness (PSLF) program provides Direct Loan borrowers who, on or after October 1, 2007, are employed full-time in certain public service jobs for 10 years while making 120 qualifying monthly payments on their Direct Loans with the opportunity to have any remaining balance of the principal and interest on their loans forgiven. H.R. 4674 would expand PSLF eligibility to new types of employees; specify that otherwise qualifying payments made on loans prior to consolidation into a Direct Consolidation Loan and payments made on federal loans refinanced under a newly created Refinanced Direct Loan program (discussed later in this report) would count towards the required 120 qualifying payments; and require ED to develop tools aimed at enabling borrowers to more easily determine whether they qualify for PSLF. Modification to Student Loan Administrative Processes To administer the Direct Loan program, ED has developed a variety of processes and procedures that in many instances are carried out by ED-contracted loan servicers and collection agencies. These administrative functions often focus on ensuring that borrowers qualify for and receive Direct Loan terms, conditions, and benefits (e.g., repayment under an IDR plan, loan discharge following total and permanent disability). H.R. 4674 would make a variety of changes aimed at streamlining or enhancing administrative processes for borrowers. Currently, borrowers must actively enroll in or apply for certain loan benefits, such as an IDR plan, or must apply for and provide income documentation to qualify for total and permanent disability discharge. H.R. 4674 would authorize ED to automatically take steps to make such loan benefits available to borrowers, without action from the borrower. For example, the bill would authorize ED to place certain borrowers who are at least 120 days delinquent on their loans, or who are rehabilitating their loan out of default, into the newly created IBR plan and to obtain such income and family size information as is reasonably necessary to calculate such borrowers' monthly payments under the plan. H.R. 4674 would also require ED to establish procedures to automatically recertify and recalculate a borrower's monthly repayments under the IDR plan in which he or she is enrolled, and procedures to automatically monitor a borrower's income for purposes of qualifying for a permanent and total disability loan discharge. Finally, H.R. 4674 would require ED to develop a manual of standardized administrative procedures and policies to be used by ED-contracted loan servicers and collection agencies. Expansion of Loan Refinancing Currently, Direct Consolidation Loans allow individuals who have borrowed at least one loan through either the Direct Loan or FFEL program to refinance their eligible federal student loan debt by borrowing a new loan and using the proceeds to pay off their existing federal student loan obligations. Direct Consolidation Loans have fixed interest rates that are determined by calculating the weighted average of the interest rates on the loans that are consolidated, rounded up to the next higher one-eighth of a percentage point. Upon an individual obtaining a Direct Consolidation Loan, a new repayment period begins, which may be for a longer term than applied to the loans originally borrowed. Private education loans are not eligible to be refinanced into a Direct Consolidation Loan. H.R. 4674 would require ED to establish two new loan refinancing options. One option would permit qualified borrowers to refinance Direct Loan and FFEL program loans into a refinanced Direct Loan. In general, refinanced Direct Loans would have the same terms and conditions as the original loans that were refinanced; however, the refinanced Direct Loans would have a fixed interest rate pegged to specified Direct Loan program interest rates that are in effect for new loans made during the period from July 1, 2019, through June 30, 2020. Such an option could be viewed as more favorable for borrowers who have existing loans with higher interest rates. The interest rates that would be applicable to refinanced Direct Loans are as follows: where the loan being refinanced is a FFEL or Direct Loan program Subsidized Loan or Unsubsidized Loan issued to an undergraduate student, 4.53%; where the loan being refinanced is a FFEL or Direct Loan program Subsidized Loan or Unsubsidized Loan issued to a graduate or professional student, 6.08%; where the loan being refinanced is a FFEL or Direct Loan program PLUS Loan issued to a graduate/professional student or a parent of a dependent undergraduate student, 7.08%; and where the loan being refinanced is a FFEL or Direct Loan program Consolidation Loan, the weighted average of the lesser of (1) the interest rates described above, as would be applicable to the original loans ( component loans ) discharged due to consolidation or (2) the original interest rate of the component loan. Obtaining a refinanced Direct Loan would not result in the start of a new repayment period. The second option would permit qualified borrowers to refinance private education loans into a Federal Direct Refinanced Private Loan. In general, a Federal Direct Refinanced Private Loan would have the same terms and conditions as a Federal Direct Unsubsidized Loan; however, certain student loan forgiveness benefits available for Direct Loan borrowers (e.g., PSLF) would not be included. Federal Direct Refinanced Private Loans would have a fixed interest rate pegged to specified Direct Loan program interest rates that are in effect for new loans made during the period from July 1, 2019, through June 30, 2020. The interest rates that would be applicable to Federal Direct Refinanced Private Loans are as follows: where the loan being refinanced was borrowed for undergraduate study, 4.53%; where the loan being refinanced was borrowed for graduate or professional study, 6.08%; and where the loan being refinanced was for both undergraduate study and graduate or professional study, 7.08%. A Federal Direct Refinanced Private Loan would not count against a borrower's annual or aggregate Direct Loan limits. Modifying Institutional Accountability Requirements for Receipt of Federal Funds Currently, the HEA provides for institutional accountability measures through many of its provisions. Some measures address educational accountability, which relates to institutions providing a quality education (e.g., accreditation requirements). Other measures address fiscal accountability, which relates to institutional financial health and whether institutions are good stewards of federal student aid funds. In addition, some laws outside of the HEA seek to hold institutions accountable in other areas. These include, but are not limited to, Title IX of the Education Amendments of 1972 (Title IX), which conditions receipt of federal funds on an institution (or other entity) ensuring it does not discriminate on the basis of sex in educational programs or activities. H.R. 4674 would address educational and fiscal accountability requirements, as well as Title IX requirements. The changes discussed below, along with other provisions of H.R. 4674 , signal a congressional interest in strengthening accountability requirements across all types of IHEs and their educational programs, in general, while focusing on greater accountability in the Title IV programs, and for proprietary IHEs in particular. Educational Accountability Educational accountability relates to attempts to ensure IHEs are providing a quality educational program, and it may be assessed in a variety of ways. H.R. 4674 would address educational accountability in several ways, which largely relate to the Title IV student aid programs. Accreditation To participate in the Title IV student aid programs, IHEs must be accredited by an agency that is recognized by ED as a reliable authority regarding the quality of education offered at the IHE. The HEA currently specifies the recognition criteria to be used by ED. In accordance with statute, an accreditation agency's institutional quality evaluation standards must assess, among other items, "student achievement in relation to [an] institution's mission." Such evaluation standards mayâbut are not required toâinclude, as applicable, course completion, passage of state licensing exams, and job placement rates. While accrediting agencies' evaluation standards are guided, in part, by such federal requirements, specific standards are adopted by individual agencies and vary among them. Accreditation agencies may also have varying procedures as well. For instance, agencies may have varying definitions for actions taken against IHEs (e.g., warning, probation) and differing policies regarding the information they publicly disclose about the IHEs they accredit. H.R. 4674 would partially standardize practices among agencies and bring additional transparency to accrediting agency and ED practices in this realm. The bill would newly require accrediting agencies to evaluate specified student educational outcomes (i.e., completion, progress toward completion, and workforce participation), but would permit agencies to establish different measures of such outcomes for different institutions. For example, an agency would be required to evaluate an IHE's "workforce participation" outcomes, but could measure an IHE's performance under that outcome by measuring rates of licensure or job placement. H.R. 4674 would also require ED to establish standardized definitions for the various actions accrediting agencies may take and for public notice and disclosure requirements with respect to the actions taken. Finally, the bill would make some changes to the processes ED uses to recognize accrediting agencies, including adding a requirement to make accrediting agencies' applications for recognition publicly available, and requirements to submit to Congress information relating to ED's accrediting agency recognition decisions. Establishment and Revision of Accountability Metrics H.R. 4674 would establish new Title IV institutional participation accountability metrics. One would measure on-time repayment ratesâ the extent to which students who borrowed Title IV loans to attend an IHE are able to make payments on their loans in a timely manner (i.e., the percentage of borrowers who have paid at least 90% of their monthly payments during a three-year period). Another would measure instructional spendingâ an IHE's instructional expenditures relative to revenues derived from tuition and fees (i.e., determining if instructional expenditures equal at least one-third of the amount of revenue derived from tuition and fees for each of the three most recent institutional fiscal years). It appears that a presumption behind these measures would be that if an IHE is of sufficient quality, then individuals who borrow to attend it should be able to earn adequate wages to make timely payments on their loans and that the IHE would be spending a reasonable amount of tuition and fees revenues on instruction rather than other items, such as marketing. Under the bill, the current institutional cohort default rate (CDR) metric, which is applicable to IHEs participating in federal student loan programs and measures the number of an IHE's federal student loan recipients who enter repayment and subsequently default within a certain period of time, would be phased out. Under current law, an IHE is subject to loss of Direct Loan program eligibility if its CDR is 40% or greater for one year, and is subject to loss of Direct Loan program and Pell Grant program eligibility if its CDR is 30% or greater for three consecutive years. The CDR metric would be replaced with a new adjusted cohort default rate , which would be similar to the current CDR metric, but would also take into account the relative risk an IHE may pose to students and taxpayers by multiplying the CDR by the percentage of students enrolled at the IHE who borrowed Title IV loans. IHEs would be subject to loss of Title IV eligibility if they met one of three separate thresholds: (1) an adjusted CDR that is greater than 20% for each of the three most recent years, (2) an adjusted CDR that is greater than 15% for each of the six most recent fiscal years, or (3) an adjusted CDR that is greater than 10% for each of the eight most recent fiscal years. This structure would penalize IHEs with adjusted CDRs that remain consistently too high over long periods. Finally, H.R. 4674 would specify that borrowers in forbearance for three or more years would be considered in default for purposes of calculating the adjusted CDR. The bill would additionally require ED to establish metrics that would assess the extent to which certain types of sub-baccalaureate educational programs at public and nonprofit IHEs and most educational programs (including degree programs) at proprietary IHEs prepare students for gainful employment in a recognized occupation. In creating the metrics, ED would be required to establish a debt-to-earnings rate meeting specified general criteria to measure gainful employment program enrollees' educational debt relative to their earnings. Fiscal Accountability Fiscal accountability requirements relate to institutional financial health and whether IHEs are good stewards of federal student aid funds. H.R. 4674 would make several changes to current fiscal accountability requirements. IHEs are required to be financially responsible to participate in the Title IV programs. IHEs that fail to meet certain financial responsibility standards may continue to participate in the Title IV programs only if they meet additional requirements, including posting a letter of credit (a financial guarantee) to ED. H.R. 4674 would revise the conditions under which IHEs are considered financially responsible. It would expand on the instances in which an IHE may be required to post a letter of credit to ED for continued participation in the Title IV programs. The bill would specify that ED may not consider a private nonprofit or proprietary IHE financially responsible if it is required to submit a teach-out plan to its accreditor or is subject to a specified amount of pending or approved borrower defense to repayment claims. Additional circumstances under which ED would be prohibited from considering a proprietary IHE financially responsible would also be stipulated. H.R. 4674 would additionally specify the circumstances under which ED would be required to redetermine whether an IHE is financially responsible. Such circumstances would apply to both private nonprofit and proprietary IHEs. They would include instances in which an IHE is required to pay a material debt or liability arising from a judicial, administrative, or judicial proceeding and in which an IHE is involved in a lawsuit for financial relief related to the making of Direct Loans. H.R. 4674 would also specify circumstances under which ED would be permitted to redetermine whether an IHE is financially responsible, which would be applicable to all types of institutions, including public IHEs. Such circumstances would include a determination that ED will be likely to receive a significant number of borrower defense to repayment claims, a citation by a state authorizing agency for failure to meet state requirements, and high annual dropout rates. H.R. 4674 would amend the 90/10 Rule, under which proprietary IHEs currently must derive at least 10% of their revenues from non-Title IV sources or lose Title IV eligibility after failure to do so for two consecutive years. The bill would specify that proprietary IHEs must derive at least 15% of their revenues from sources other than federal education assistance funds, which would include, but not be limited to, Title IV funds and Post-9/11 GI Bill funds. It would further establish that failure to meet the requirement in a single year would result in an automatic loss of Title IV eligibility. In addition, the bill would limit marketing, recruitment, advertising, and lobbying expenditures for IHEs that are determined to have spent less than an amount equal to one-third of their tuition and fees revenues on instruction. IHEs that do not limit such spending for two consecutive fiscal years would lose Title IV eligibility. Title IX of the Education Amendments of 1972 Title IX prohibits discrimination on the basis of sex in education programs and activities receiving federal financial assistance. On November 29, 2018, ED proposed to amend the regulations that implement Title IX to clarify and modify requirements of elementary, secondary, and postsecondary schools regarding incident response, remedies, and other issues. H.R. 4674 would prohibit ED from implementing or enforcing the proposed Title IX regulations, or proposing or issuing regulations that are substantially similar to the November 2018 proposed regulations. Revising Public Accountability, Transparency, and Consumer Information Requirements The HEA establishes a set of measures related to public accountability, transparency, and consumer information. In general, these provisions are intended to provide information to consumers to enable them to make informed college-going and financial decisions. Currently, the HEA addresses issues related to college affordability and the collection and dissemination of consumer information to students and the public by requiring ED, among other things, to administer the College Navigator website, through which certain consumer information about IHEs is made publicly available, and by requiring IHEs to make Net Price Calculators, a primary consumer information tool authorized under the HEA, available on their websites. Net Price Calculators allow prospective students to obtain individual estimates of the net price of an IHE, taking into account the financial aid they might be likely to receive. The HEA currently prohibits the creation of a new postsecondary student unit record system (SURS), which could be used to track individual students' financing of their schooling, participation in and completion of academic programs, and post-program outcomes over time. The SURS ban was established in the interest of protecting student privacy and limits the granularity and quality of data available on the outcomes of IHEs' students. In addition, the HEA currently requires that certain Direct Loan borrowers undergo loan entrance counseling prior to loan disbursement, and that certain borrowers undergo exit counseling after dropping below half-time enrollment. Both of these requirements are intended to help ensure that borrowers are aware of their loan terms and conditions and of the potential consequences of borrowing a student loan. H.R. 4674 would amend the HEA to take a more expansive approach to public accountability, transparency, and consumer information requirements. Many of these changes represent congressional interest in providing consumers with additional and more-nuanced information, potentially helping them make more-informed college-going and student loan borrowing decisions. Perhaps most notably, H.R. 4674 would repeal the current prohibition on the creation of a new SURS and require ED to develop a postsecondary student-level data system to use in evaluating a variety of metrics such as student enrollment, progression, completion, and post-collegiate outcomes (e.g., earnings, employment rates, and loan repayment rates). Summary aggregate information from this system would be made publicly available. H.R. 4674 would also amend provisions relating to Net Price Calculators by requiring IHEs to provide more-detailed information regarding their costs of attendance and estimated aid that may be available to individual students. The bill would make changes to the information IHEs are required to provide to individuals before and after receipt of federal student aid. For instance, H.R. 4674 would require ED to develop a standardized financial aid offer letter to be used by IHEs, which would enable students to compare financial aid offers from multiple IHEs. It would also require all borrowers to receive counseling in each year that they receive a Title IV student loan to assist them in understanding the terms and conditions of the loan and the potential consequences of accepting such aid. Expanding Student Services for Specific Populations In addition to federal student aid, which provides direct financial assistance to individual students that can be applied toward their cost of attendance, the HEA provides additional academic and personal supports to certain student populations. These supports are typically administered through grants to IHEs or other qualified entities. H.R. 4674 would create a number of new programs to support students, and would extend a number of existing programs. Creation of New Programs H.R. 4674 would create the following programs: Student Success Fund . This would be a new program of grants to states or Indian tribes to carry out plans "to implement promising and evidence-based institutional reforms and innovative practices to improve student outcomes" including transfer and completion. States and some tribes would be required to match a portion of the federal grant, with the nonfederal amount increasing to 100% of the federal amount by the ninth year. H.R. 4674 would authorize $500 million in mandatory appropriations per year for FY2021 and each succeeding fiscal year. Pell Bonus Program . This would be a new grant program providing support to qualified public and nonprofit IHEs with qualified shares of Pell Grant recipients. IHEs could use the funds for "financial aid and student support services." Funds would be allotted to institutions based on their relative share of bachelor's degrees awarded to all Pell Grant recipients. H.R. 4674 would authorize mandatory appropriations of $500 million per year for FY2021 and each succeeding fiscal year. Remedial Education Grants . This would make funds available to IHEs or applicable partnerships to "improve remedial education in higher education." Grantees would employ models specified in the legislation and be evaluated on the basis of their programs' effectiveness in increasing course and degree completion. H.R. 4674 would authorize $162.5 million in discretionary appropriations per year for FY2021 through FY2026. Grants for Improving Access to and Success in Higher Education for Foster Youth and Homeless Youth . This would be a new formula grant program to states to (1) develop a statewide initiative to support foster and homeless youth transitioning into postsecondary education and (2) offer subgrants to public and private nonprofit IHEs to improve postsecondary persistence and completion by such students. H.R. 4674 would authorize discretionary appropriations of $150 million for FY2021 and authorize an inflation-adjusted amount for each year through FY2026. Jumpstart to College . This would be a new grant program providing funds to states and public and private nonprofit IHEs to establish and support early college or dual and concurrent enrollment programs. H.R. 4674 would authorize $250 million in discretionary appropriations per year for FY2021 through FY2026. Extensions of Existing Programs H.R. 4674 would extend the authorization of a number of existing student support programs. In most, but not all, cases the authorization of appropriations in H.R. 4674 would be above the current law levels. In terms of the authorized funding level, one of the most substantial extensions is to the TRIO programs, a group of programs that provide grants to IHEs and other organizations to furnish academic support services to disadvantaged students. H.R. 4674 would authorize discretionary appropriations of $1.12 billion for FY2021 and the authorization level would be adjusted for inflation in each of the five succeeding fiscal years. In FY2019, TRIO appropriations were $1.06 billion. In terms of increases to authorization levels relative to the most recent funding level, one of the largest increases would be to the Child Care Access Means Parents in School (CCAMPIS) program, which provides grants to IHEs to promote the participation of low-income parents in postsecondary education through the availability of child care services. H.R. 4674 would authorize $200 million per year for FY2021 and each of the five succeeding fiscal years. In FY2019, appropriations for this program were $50 million. Expanding Federal Assistance to Support to IHEs The HEA authorizes programs intended to provide grants and other financial support to IHEs that serve high concentrations of minority and/or needy students to help strengthen the IHEs' academic, administrative, and financial capabilities. Typically, these institutions are called minority serving institutions (MSIs). Among the MSI programs, the HEA authorizes separate grant programs for distinct types of MSIs, including the following: American Indian Tribally Controlled Colleges and Universities, Alaska Native and Native-Hawaiian-serving Institutions, Predominantly Black Institutions, Native American-serving, Nontribal Institutions, Predominantly Black Institutions, Asian American and Native American Pacific Islander-serving Institutions, Historically Black Colleges and Universities, and Hispanic Serving Institutions. Many of these MSI programs have been funded through annual discretionary and mandatory appropriations. As of when H.R. 4674 was ordered to be reported, mandatory appropriations, authorized under HEA Section 371, for several of these programs had expired at the end of FY2019. In FY2019, these mandatory appropriations totaled $239 million. H.R. 4674 would permanently authorize mandatory appropriations under HEA Section 371 at a total of $300 million annually. It would also extend and increase the authorization of discretionary appropriations for each of the MSI programs through FY2026. In addition, H.R. 4674 would reauthorize discretionary and mandatory appropriations for several MSI programs that have not received appropriations in several years, such as the Endowment Challenge Grant program, and would create several new grant programs to support MSIs, each supported with discretionary appropriations. H.R. 4674 would also amend and reauthorize through FY2026 a statute outside of the HEAâthe Tribally Controlled Colleges and Universities Assistance Act of 1978âwhich authorizes discretionary appropriations for grants to Tribally Controlled Colleges and Universities. Creating New Grants to States and Institutions to Reduce Students' Postsecondary Costs (America's College Promise) H.R. 4674 would create a new HEA, Title IV, Part J. The programs authorized in this part would provide grants to states, Indian tribes, and IHEs, with the primary focus of eliminating or reducing tuition and fees at community colleges and other postsecondary institutions. Grants to Support Tuition-Free Community College H.R. 4674 would authorize new grants to states to support community colleges in waiving tuition and fees for eligible students. Qualified Indian tribes would also be eligible. The program would define an eligible student as a student who attends a community college on a not less than half-time basis, either qualifies for in-state resident community college tuition or would qualify for in-state community college tuition but for his or her immigration status, and meets certain other criteria. A student would not need to meet financial criteria to qualify as an eligible student. Funding, Allotments, and Nonfederal Share H.R. 4674 would provide permanent mandatory appropriations beginning in FY2021. The funding level would incrementally increase from $1,569,700,000 in FY2021 to $16,296,080,000 in FY2030. Mandatory appropriations would be provided at the FY2030 level in succeeding years. Funds would be allocated to states via a formula. The bill would direct ED to develop a formula based on each participating state's share of eligible students and other factors. Each participating state would be eligible to receive, on a per eligible student basis, an amount equal to at least 75% of the national average resident community college tuition and fees. States would be required to provide, on a per eligible student basis, a nonfederal share equal to 25% of the national average resident community college tuition and fees. Requirements for Participating States As a condition of receiving a grant under this program, a state would be required to waive tuition and fees for eligible students attending community colleges within the state. An eligible student would be allowed to use other financial aid for which he or she qualifies, such as Pell Grants, for other components of the cost of attendance, such as housing and transportation. To prevent state and local disinvestment in community colleges, H.R. 4674 would require that funds under this grant supplement and not supplant other federal, state, and local funds. The program would include maintenance of effort requirements that would require participating states to provide financial support equal to or greater than the average amount provided in the three preceding years for public higher education; operational expenses for public, four-year colleges; and need-based financial aid. Grants for Historically Black Colleges and Universities, Tribally Controlled Colleges and Universities, and Minority-Serving Institutions to Reduce or Waive Tuition H.R. 4674 would create three new programs that would provide grants to each of (1) Historically Black Colleges and Universities (HBCUs), (2) Tribally Controlled Colleges and Universities (TCCUs), and (3) Minority-Serving Institutions (MSIs) to "waive or significantly reduce tuition and fees for eligible students â¦ for not more than the first 60 credits an eligible student enrolls at the participating institution." Grants would be available to four-year institutions of each type and would not require a nonfederal match. An institution's grant would equal the actual cost of tuition and fees at the institution (not to exceed the national average tuition and fees at a public four-year IHE), multiplied by the number of eligible students enrolled at the institution. Eligible institutions would be HBCUs, TCCUs, and MSIs that have a student body of at least 35% low-income students and meet other criteria related to student services and supports. Eligible students would include new enrollees or transfers from a community college. H.R. 4674 would provide permanent mandatory funding beginning in FY2021. The funding level would incrementally increase from $63,250,000 in FY2021 to $1,626,040,000 in FY2030. Mandatory appropriations would be provided at the FY2030 level in succeeding years. Additional Grants H.R. 4674 would authorize discretionary appropriations for such sums as necessary in FY2021 and each succeeding fiscal year to support additional new grant programs. First, the bill would create a new series of formula grants to states to provide grants to individual students with unmet financial need. These grants would initially be available to Pell Grant recipients at public IHEs. Once all eligible Pell Grant recipients received grants, the aid would be extended to other students at public IHEs. ED would also be authorized, under certain circumstances, to carry out a similar grant program for students at private nonprofit IHEs. The bill would authorize another grant program for states to award grants to participating four-year IHEs to waive resident tuition and fees in cases where all eligible students have received the above grants for unmet need. Both sets of programs would generally have a federal share of 75% and a nonfederal share of 25%. Summary:	null	96	64,852	64,854	64,854	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction and Legislative Context The Higher Education Act of 1965 (HEA; P.L. 89-329, as amended) authorizes programs and activities to provide support to individuals who are pursuing postsecondary education and to institutions of higher education (IHEs). The HEA was last comprehensively reauthorized by the Higher Education Opportunity Act of 2008 (HEOA; P.L. 110-315 ). The HEOA extended the authorization of appropriation of funds for most HEA programs through FY2014, while the General Education Provisions Act (GEPA) provided an extension of that authority for an additional year (through FY2015). Many HEA programs have continued beyond FY2015 with funding provided under a variety of appropriations measures and continuing resolutions. During the 116 th Congress, the House Committee on Education and Labor marked up and ordered to be reported the College Affordability Act (CAA; H.R. 4674 ). The bill would provide for the comprehensive reauthorization of most HEA programs, create a number of new postsecondary education programs, and address certain issues related to higher education but separate from the HEA. In general, for programs with discretionary funding H.R. 4674 would authorize the appropriation of funds in specific, as opposed to indefinite, amounts for each year in which funding would be authorized to be provided. The Congressional Budget Office (CBO) estimates that the enactment of H.R. 4674 would increase mandatory spending outlays by approximately $161 billion in the 5-year period from FY2020 to FY2024 and by about $332 billion in the 10-year period from FY2020 to FY2029 period. In the 10-year estimate, about half the mandatory spending increase would result from changes to the federal student loans programs and about a quarter of the increase would result from changes to the Pell Grant program. CBO further estimates that the enactment of H.R. 4674 would increase discretionary spending outlays by about $149 billion in the 5-year period from FY2020 to FY2024. This largely reflects the extension of periods of authorized appropriations for existing programs. CBO did not make a 10-year estimate for discretionary spending. This report focuses on the key themes in H.R. 4674 and describes major changes proposed in the bill that are representative of those themes. It aims to provide a general understanding of the primary proposals of H.R. 4674 . The report does not aim to provide a comprehensive analysis of the bill nor of technical changes that would be made by it. Key Themes in H.R. 4674, as Ordered Reported with Amendments H.R. 4674 , as ordered to be reported on October 31, 2019, would provide for the comprehensive reauthorization of the HEA, amending numerous programs and activities that make up a large portion of the federal effort to support postsecondary education. Taken collectively, the changes that would be made by H.R. 4674 reflect several key themes: (1) expanding the availability of financial aid to postsecondary students; (2) implementing borrower-focused student loan reforms; (3) modifying institutional accountability requirements for receipt of federal funds; (4) revising public accountability, transparency, and consumer information requirements; (5) expanding student services for specific populations; (6) expanding federal assistance to provide support to IHEs; and (7) creating new grant programs for states and institutions to reduce students' postsecondary costs. Each of these themes is discussed in the text that follows. Expanding the Availability of Financial Aid to Postsecondary Students Title IV of the HEA authorizes a group of federal student aid programs that provide aid to eligible individual students through grant and loan programs and work-study assistance. H.R. 4674 would expand aid availability in a number of ways, with considerable emphasis placed on increasing funding made available through grant programs. Some provisions in H.R. 4674 would increase aid availability by expanding eligibility. Expansion of Pell Grants HEA Title IV, Part A authorizes Pell Grantsâfinancial need-based grants that are available to eligible undergraduate students. Student Pell Grant eligibility is determined on a sliding scale, based on a student's expected family contribution (EFC). The Pell Grant program is the largest grant program authorized in Title IV in terms of both the number of grants (about 7.1 million in award year [AY] 2017-2018) and the total awards (about $28.7 billion in AY2017-2018). The Pell Grant program is often referred to as aÂ quasi-entitlementÂ program, through which all eligible applicants receive grants. Generally, the maximum Pell Grant a full-time, full-academic-year student can receive is the difference between the total maximum Pell Grant ($6,345 in AY2020-2021) and the student's EFC. A full-time, full-academic-year student who has an EFC of zero would be eligible for the total maximum grant. For a student who enrolls on a less-than-full-time basis, his or her maximum scheduled award is ratably reduced. To receive a Pell Grant, a student must be enrolled in an eligible program at an eligible IHE. H.R. 4674 would increase the total maximum Pell Grant and would expand the population of eligible students and the types of eligible educational programs. The bill would also permanently authorize discretionary appropriations for the Pell Grant program. Increase of Total Maximum Pell Grant The total maximum Pell Grant is the sum of a mandatory add-on award amount and a discretionary award amount. The mandatory add-on award is an amount established by the HEA and funded by a permanent, indefinite mandatory appropriation. The discretionary award amount is specified in annual appropriations laws. Under current law, in the upcoming award year (AY2020-2021) the total maximum Pell Grant will be $6,345. H.R. 4674 would, on the whole, increase the mandatory add-on award levels in AY2021-2022 and in each award year thereafter. For AY2021-2022, the mandatory add-on award would be $1,685, an increase of $625 from $1,060 in AY2020-2021; thus, the total maximum grant amount would be $6,970 assuming the discretionary award level were the same as provided under current law in AY2020-2021. H.R. 4674 would further increase the total maximum grant by the rate of inflation in each year following AY2021-2022, assuming the discretionary award levels were not lower than the preceeding year. The increased award amounts would be funded by corresponding increases in mandatory appropriations. There are two primary effects of an increase to the total maximum Pell Grant: 1. Currently eligible students would be eligible for a larger Pell Grant. Most full-time, full-year recipients would be eligible for a Pell Grant that is up to $625 higher in AY2021-2022 compared to AY2020-2021. Students who are not full-time, full-year would qualify for smaller increases. 2. A portion of students whose EFCs would have been too high to qualify for a Pell Grant may become newly Pell-eligible. Pell Eligibility Expansions H.R. 4674 would expand the availability of Pell Grants in several other ways, including the following: Increase of period of eligibility (lifetime eligibility limit). Under current law, eligible students may receive Pell Grants for up to 12 full-time semesters (or the equivalent). H.R. 4674 would increase this limit to 14 full-time semesters (or the equivalent). Pell Grants to incarcerated students. H.R. 4674 would eliminate the provision in current law that prohibits persons incarcerated in federal and state facilities from receiving a Pell Grant, creating Pell eligibility for incarcerated and civilly committed persons. H.R. 4674 would restrict such persons from receiving Pell Grants while attending proprietary IHEs. Pell Grants to graduate students. Under current law, Pell Grants are limited to undergraduate students and students in some postbaccalaureate teacher education programs. H.R. 4674 would, in some cases, permit graduate students who received Pell Grants as undergraduates and have not exhausted their lifetime Pell Grant eligibility to receive Pell Grants at public and nonprofit IHEs. Job Training Pell Grants Under current law, Pell Grants are typically limited to programs of at least 600 clock hours, 16 semester or trimester hours, or 24 quarter hours offered over a minimum of at least 15 weeks. H.R. 4674 would create a new category of "Job Training Federal Pell Grants" that could be applied to shorter programs of between 150 and 600 hours and between 8 and 15 weeks. To qualify for the new grants, a training program would need to meet the following criteria: Demonstrate alignment with "high-skill, high-wage, or in-demand" sectors or occupations, and meet the hiring requirements of employers in those sectors or occupations. Prepare students to pursue related certificate or degree programs at an IHE by providing academic credit toward a certificate or degree program. Be provided by a public or private nonprofit IHE that is an eligible provider under the Workforce Innovation and Opportunity Act (WIOA) and that fulfills additional institutional eligibility requirements related to Secretarial approval, gainful employment, accreditation, and reporting. In many cases, the shorter term nature of the job training programs may result in a Pell Grant that is for a lesser amount than the total maximum award for a full-year, full-time student. For example, assuming a total maximum Pell Grant of $6,195 (maximum award for the current 2019-2020 award year), a student with a zero EFC pursuing a 150 clock hour program over 8 weeks would qualify for a Pell Grant of no more than $1,035, or approximately 17% of the total maximum Pell Grant award, depending on the cost of the program. Creation of Direct Perkins Loan Program HEA, Title IV, Part E establishes the operation of the Federal Perkins Loan program. Authorization to make new Perkins Loans to students expired on September 30, 2017. Borrowers of loans previously made through the Perkins Loan program remain responsible for making payments on those loans. H.R. 4674 would authorize a new Direct Perkins Loan program, which, although it would share a name and have some similarities with the curtailed Perkins Loan program (which was administered by IHEs as a campus-based program), would be significantly different. The newly created program would be a direct loan program , under which the federal government lends directly to students using federal capital and is responsible for loan servicing and collections work (which is performed primarily by contractors). Under the Direct Perkins Loan program, loans with many of the same terms and conditions as Direct Unsubsidized Loans would be made available to students, with award priority given to students demonstrating exceptional financial need. Undergraduate students would be eligible to borrow up to $5,500 annually and $27,500 in the aggregate; graduate and professional students would be eligible to borrow up to $8,000 annually and $60,000 in the aggregate through the Direct Perkins Loan Program. Annual and aggregate Direct Perkins Loan limits would be independent of annual and aggregate limits under the Direct Loan program, but aggregate limits would include loans previously made to students under the curtailed Perkins Loan program. Interest rates on Direct Perkins Loans would be fixed at 5% per year. In general, annual authority to make Direct Perkins Loans to students would be allocated to IHEs via a formula that would consider unmet student need and Pell Grant funds awarded at the IHE. However, H.R. 4674 would authorize a base guarantee for loan authority, equal to the average of an IHE's total principal amount of loans made in academic years 2012-2013 through 2016-2017 under the previously authorized Perkins Loan program. H.R. 4674 would provide mandatory appropriations for the program, not to exceed $2.4 billion in "annual loan authority" for AY2021-2022 and for each succeeding fiscal year. Modifications to Campus-Based Grant Programs The HEA authorizes two campus-based grant programs that provide federal funds to IHEs that administer the programs and provide institutional funds to match a portion of the federal funds they receive. The institutions then distribute these funds to students using some discretion but operating within statutorily specified parameters. H.R. 4674 would make substantial but similar changes to the formulas that are used to distribute federal funds under each of the two campus-based grant programs and would increase the authorized appropriations level for each program. Federal Supplemental Educational Opportunity Grant (FSEOG) Program HEA, Title IV, Part A authorizes the FSEOG program, which provides funds to IHEs for grants to undergraduate students who demonstrate exceptional financial need. Most IHEs are required to provide matching funds so that the federal share of FSEOG is no more than 75%. In FY2019, FSEOG appropriations totaled $840 million. Under current law, FSEOG funds are distributed to IHEs using a formula that first distributes funds on the basis of what the IHEs received in past years (their base guarantee ), with the strongest base protection provided for schools that have participated in the program since at least FY1999. The remaining funds are distributed on the basis of the IHEs' proportional shares of eligible undergraduate student need (their fair share ). Beginning in FY2021, H.R. 4674 would replace the existing formula with a modified version of the fair share formula that considers unmet student need and Pell Grant funds awarded at the IHE. In FY2021, IHEs would receive the higher of their grant under the new formula or 90% of their FY2020 grant. The percentage would decline in subsequent years, and in FY2026 FSEOG allotments for all IHEs would be based entirely on the new formula. H.R. 4674 would also establish new institutional eligibility criteria that would take into account the proportion of Pell Grant recipients enrolled at an IHE. H.R. 4674 would increase the authorization of discretionary appropriations to $1.15 billion in FY2021. The authorization level would then increase by $150 million per year until reaching $1.75 billion in FY2025. The authorization level would remain at the FY2025 level for each succeeding fiscal year. Emergency Grant Program H.R. 4674 would create an emergency grant program for FSEOG-participating IHEs. The program would be funded through a $12.5 million set-aside from the FSEOG appropriation for FY2021 through FY2026. Most participating IHEs would be required to provide a 50% match to participate in the program. Priority would be given to IHEs at which at least 30% of enrolled students are Pell Grant-eligible. To participate in the program, each IHE would be required, among other things, to provide assurance that emergency grant funds would be used to address "financial challenges that would directly impact the ability of an eligible student to continue and complete [his or her] course of study." Federal Work-Study (FWS) Programs HEA, Title IV, Part C of the HEA authorizes the FWS programs, which provide grants to IHEs to support part-time employment for qualified undergraduate, graduate, and professional students. FWS employment may consist of work at the IHE a student attends; a private nonprofit organization; a federal, state, or local public agency; or a private for-profit organization. In FY2019, FWS appropriations were $1.13 billion. Under current law, FWS funds are distributed to IHEs using a formula similar to the current-law FSEOG formula, allocating funds on the basis of the base guarantee and fair share factors. Under H.R. 4674 , the FWS formula would be the same as the FSEOG formula. Funds would be distributed based on a modified version of the fair share formula that considers unmet student need and Pell Grant funds awarded at the IHE. In FY2021, IHEs would receive the higher of their grant under the new formula or 90% of their FY2020 grant. The percentage would decline in subsequent years, and in FY2026 FWS allotments for all IHEs would be based entirely on the new formula. H.R. 4674 would also establish new institutional eligibility criteria that would take into account the proportion of an IHE's undergraduate student population that are Pell Grant recipients and the proportion of an IHE's graduate population who have a zero EFC. H.R. 4674 would increase the authorization of discretionary appropriations to $1.5 billion in FY2021. The authorization level would increase by $250 million per year until reaching $2.5 billion in FY2025. The appropriation level would remain at the FY2025 level for each succeeding fiscal year. Grants for Improved Institutions H.R. 4674 would reserve a portion of the FWS appropriation for a new grant program for "improved institutions" on the basis of the share and performance of Pell Grant recipients at the institutions. The amount reserved for this program would be the lesser of (1) 20% of the FWS appropriation in excess of $700 million or (2) $150 million. These provisions would take effect two years after enactment of H.R. 4674 . Modifications to Need Assessment and the Free Application for Federal Student Aid (FAFSA) Process Individual eligibility for many student aid programs is contingent on student need. A key factor in determining need is assessing and establishing the ability of a student's family to pay postsecondary education costs. HEA, Title IV, Part F establishes a series of formulas that calculate a student's expected family contribution (EFC). The EFC formulas consider financial and personal characteristics of a student's family that are reported on the FAFSA. Students with lower EFCs typically qualify for more need-based aid, and students with a zero EFC qualify for the maximum amount of need-based aid. H.R. 4674 would make changes to the HEA that could reduce EFC levels and correspondingly increase aid eligibility, particularly for lower-income students. Some provisions in the bill would reduce the amount of information that some students would have to provide when completing the FAFSA. Specific changes include the following: Expansion of automatic zero EFC. Under current law, some FAFSA applicants may qualify for an automatic zero EFC if they report an adjusted gross income (AGI) level below $26,000 and meet other criteria. H.R. 4674 would increase the AGI threshold to $37,000, newly extend automatic zero eligibility to independent students without dependents, and expand the automatic zero EFC to any applicant who received a qualified means-tested benefit in the 24 months prior to application. Creation of FAFSA pathways. H.R. 4674 would create a system of three pathways in which the amount of financial information a FAFSA filer would be required to provide would be based on the filer's income and the complexity of his or her tax return. Applicants who received a means-tested benefit in the previous 24 months would not be required to provide any additional financial information beyond benefit receipt. One-time FAFSA option. Under current law, students must file a FAFSA each year that they seek aid. H.R. 4674 would create an option for students who are Pell-eligible in their first year of postsecondary education to decline to file the FAFSA in succeeding years and have their first year's EFC apply. The one-time FAFSA option would apply to the period required for the completion of a student's first undergraduate baccalaureate course of study. Streamline d procedures for foster care and homeless youth. Under current law, foster care youth and homeless youth qualify as independent students and do not have to report parental income on the FAFSA. H.R. 4674 would expand and streamline the procedures by which qualified youth can establish and verify their status. Expansion of Federal Student Aid to Certain Noncitizen Students Under current law, federal student aid is limited to U.S. citizens, lawful permanent residents, and certain eligible noncitizens. Unauthorized immigrants are not eligible for federal student aid. H.R. 4674 would extend eligibility for HEA Title IV student aid to unauthorized individuals who entered the United States when they were younger than age 16 and either earned a high school diploma (or equivalent) or served in the uniformed services for at least four years. The bill would also extend eligibility to individuals who have temporary protected status and to certain unauthorized individuals who have a son or daughter who is a United States citizen or lawful permanent resident. Instituting Borrower-Focused Student Loan Reforms Title IV of the HEA specifies provisions for the operation of three federal student loan programs: the William D. Ford Federal Direct Loan (Direct Loan) program, the Federal Family Education Loan (FFEL) program, and the Federal Perkins Loan program. Currently, however, new loans are authorized to be made only through the Direct Loan program. The authority to make new loans through the FFEL program expired June 30, 2010, and the authority to make new loans through the Federal Perkins Loan program expired September 30, 2017. While H.R. 4674 would make a variety of student loan reforms that apply to both the FFEL and Direct Loan programs, the discussion herein will focus on the Direct Loan program, as it is the primary federal student loan program currently in operation, is the only program currently making new loans to students and their families, and would be the primary student loan program in operation under the HEA as amended by the CAA. The Direct Loan program is authorized under HEA, Title IV, Part D, and is the largest federal program that makes available financial assistance to support students' postsecondary educational pursuits. The Direct Loan program is a federal credit program for which permanent indefinite mandatory appropriations are provided for loan subsidy costs, and annual discretionary appropriations are provided for administrative costs. Direct Loans are made to students and their families using funds borrowed by the Department of Education (ED) from the U.S. Treasury. The IHE a student attends originates and disburses Direct Loans, while federal contractors hired by ED perform loan servicing and collection functions. Several types of loans are made available through the program: Direct Subsidized Loans to undergraduate students, Direct Unsubsidized Loans to undergraduate students and graduate students, Direct PLUS Loans to graduate and professional students and the parents of undergraduate dependent students, and Direct Consolidation Loans, which enable individuals who have previously borrowed federal student loans to combine them into a single new loan. Loan terms and conditions (e.g., interest rates, borrowing limits) are specified in statute and may vary depending on the type of loan borrowed. ED estimates that in FY2020, 15.9 million new loans totaling $100.2 billion will be made through the Direct Loan program. In addition, ED estimates that 755,000 Direct Consolidation Loans totaling $46.4 billion will be made to existing borrowers of federal student loans. As of the end of the third quarter of FY2019, $1.2 trillion in principal and interest on Direct Loan program loans, borrowed by or on behalf of 34.3 million individuals, remained outstanding. H.R. 4674 would make a variety of borrower-focused reforms to the Direct Loan program. In general, many of these reforms are aimed at easing a borrower's student loan burden by amending loan terms and conditions (including loan repayment and forgiveness options) to be more generous once an individual has entered repayment on his or her loan, modifying and streamlining student loan administrative procedures, and expanding the availability of student loan refinancing options. Provision of More Generous Loan Repayment Terms and Conditions Currently, upon entering repayment on a Direct Loan a number of terms and conditions are available to borrowers. Many of these are intended to help borrowers manage their student loan debt, but some could be detrimental in some circumstances. H.R. 4674 would make a variety of changes aimed at making student loan repayment easier and more affordable for borrowers. Elimination of Loan Origination Fees Currently, loan origination fees are charged to borrowers of Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans. These fees help offset federal loan subsidy costs by passing along some of the costs to borrowers. Loan origination fees are calculated as a proportion of the loan principal borrowed and are deducted proportionately from the proceeds of each loan disbursement to the borrower. Loan origination fees for Direct Subsidized Loans and Direct Unsubsidized Loans made on or after July 1, 2010, equal 1%. Loan origination fees for Direct PLUS Loans equal 4%. H.R. 4674 would eliminate loan origination fees. Streamlining Loan Repayment Plans Borrowers may currently choose from among numerous loan repayment plan options, which include five broad categories: standard repayment plans, extended repayment plans, graduated repayment plans, income-driven repayment (IDR) plans, and alternative repayment plans. Several repayment plan variations exist within each of these broad categories. Under the IDR plans, in general, borrowers make monthly payments equal to one-twelfth of 10% or 15% (depending on the specific plan) of their adjusted gross income (AGI) that exceeds 150% of the federal poverty guideline applicable to their family size. Basing monthly payments on only the portion of a borrower's AGI that is above 150% of the federal poverty guidelines essentially serves as an income protection for borrowers. Under some of the IDR plans, borrowers' monthly payments are capped at the monthly amount they would have paid according to a standard 10-year repayment period, regardless of whether the calculated monthly payment based on their income would have been greater. Borrowers who make payments according to these plans may have any remaining loan balance forgiven after 20 or 25 years (depending on the specific plan) of repayment. The particular repayment plans available to an individual borrower may depend on the type of loan borrowed, the date of becoming a new borrower, or the date of entering repayment status. In general, negative amortization is permitted in the IDR plans but not other plans. H.R. 4674 would establish two new loan repayment plansâa fixed repayment plan and an income-based repayment (IBR) plan. Borrowers of Direct Loans made on or after July 1, 2021, would be required to repay their loans according to only these plans, and certain borrowers of Direct Loans made on or before June 30, 2021, would be permitted to repay according to these plans. The fixed repayment plan proposed under H.R. 4674 would be similar to some of the standard plans currently offered in the Direct Loan program (e.g., providing for fixed monthly payments with loan repayment periods equaling 10 to 25 years, depending on the loan balance). Compared to existing IDR plans, the proposed IBR plan would take a more generous approach toward protecting income from consideration when establishing monthly loan payments for many, but not all, borrowers. Under the proposed IBR plan, a borrower's monthly payments would equal one-twelfth of 10% of the amount (if any) of their adjusted gross (AGI) that exceeds a statutorily specified income protection that is indexed to the federal poverty guidelines. For borrowers with AGIs of $80,000 or less (or $160,000 or less for married borrowers), the income protection would equal 250% of the federal poverty guidelines applicable to the borrower's family size. For borrowers with AGIs that exceed $80,000 (or $160,000 for married borrowers), the income protection would decrease as his or her AGI increases and would be phased out entirely when the borrower's AGI equals or exceeds $105,000 (or $210,000 for married borrowers). For example, a single borrower with an AGI of $79,000 would pay 10% of his or her AGI that exceeds 250% of the federal poverty guidelines, whereas a single borrower with an AGI of $81,000 would pay 10% of his or her AGI that exceeds 240% of the federal poverty guidelines. No monthly payment cap would be available under the proposed IBR plan. Under this IBR plan, negative amortization would be permitted and borrowers who make payments for 20 years would be eligible to have any balance that remains forgiven. Reducing Interest Accrual and Capitalization Under a limited set of circumstances, the federal government subsidizes (i.e., a borrower is relieved from paying) some or all of the interest that would otherwise accrue on loans made through the Direct Loan program. In general, interest subsidies are largely available for need-based Direct Subsidized Loans (and for the subsidized component of Direct Consolidation Loans), which are currently only being made to undergraduate students. Periods in which interest is subsidized on these loans include in-school periods while a borrower is enrolled in an eligible program on at least a half-time basis, during a six-month grace period following enrollment on at least a half-time basis, and during periods of authorized deferment. For borrowers who may be having trouble making monthly loan payments, periods of deferment and forbearance offer temporary relief from the obligation to make such payments. In general, any interest that accrues during a period of deferment or forbearance is later capitalized (i.e., becomes part of the outstanding principal balance of the loan), which increases the total amount a borrower is required to repay on his or her loan. H.R. 4674 would make Direct Subsidized Loans available to graduate and professional students enrolled at public and private, nonprofit IHEs for any period of instruction beginning on or after July 1, 2021. The interest rate on Direct Subsidized Loans to graduate students would be the same as the interest rate on Direct Unsubsidized Loans for graduate and professional students. The bill would also amend the HEA to provide that interest that accrues on any type of Direct Loan during most periods of deferment or forbearance shall not be capitalized. That is, the interest would accrue and borrowers would be required pay it, but the accrued unpaid interest would not be added to the principal balance of a loan. Expansion of Loan Discharge and Loan Forgiveness Benefits The HEA currently makes various loan discharge or forgiveness options available to borrowers under a variety of circumstances. In general, loan discharge is provided in cases of borrower hardship, while loan forgiveness is provided for public service or following IDR plan repayment for an extended time period. H.R. 4674 would expand borrower eligibility for various loan discharge and loan forgiveness options, two of which are described below. Borrower Defense to Repayment Among other discharge provisions, the HEA provides that ED shall specify in regulations the "acts or omissions" of an IHE a borrower may assert as a borrower defense to repayment (BDR). Regulations that are currently in effect specify the standards and procedures for determining whether a borrower is eligible for a BDR discharge, and newly promulgated regulations scheduled to become effective July 1, 2020, amend those standards and procedures for loans disbursed on or after July 1, 2020. Both those regulations currently in effect and those effective July 1, 2020, provide that a borrower may have his or her loan discharged in whole or in part, depending on the circumstances. The regulations that are effective July 1, 2020, are viewed by some as being less beneficial to borrowers than current regulations. H.R. 4674 would amend the HEA to more explicitly define the standards under which a borrower would be determined eligible for a BDR discharge; some, but not all, of the BDR standards applicable to loans made prior to July 1, 2020, would be applicable to Direct Loans. It would also specify that in general, BDR discharge-eligible borrowers would be entitled to have the full balance of their loan discharged, but that ED may provide partial discharge in certain circumstances. Finally, H.R. 4674 would require ED to establish procedures for the fair and timely resolution of BDR claims and would specify elements to be included in such processes, some of which are currently available to pre-July 1, 2020, borrowers, but not to post-July 1, 2020, borrowers. Public Service Loan Forgiveness Among other loan forgiveness provisions, the Public Service Loan Forgiveness (PSLF) program provides Direct Loan borrowers who, on or after October 1, 2007, are employed full-time in certain public service jobs for 10 years while making 120 qualifying monthly payments on their Direct Loans with the opportunity to have any remaining balance of the principal and interest on their loans forgiven. H.R. 4674 would expand PSLF eligibility to new types of employees; specify that otherwise qualifying payments made on loans prior to consolidation into a Direct Consolidation Loan and payments made on federal loans refinanced under a newly created Refinanced Direct Loan program (discussed later in this report) would count towards the required 120 qualifying payments; and require ED to develop tools aimed at enabling borrowers to more easily determine whether they qualify for PSLF. Modification to Student Loan Administrative Processes To administer the Direct Loan program, ED has developed a variety of processes and procedures that in many instances are carried out by ED-contracted loan servicers and collection agencies. These administrative functions often focus on ensuring that borrowers qualify for and receive Direct Loan terms, conditions, and benefits (e.g., repayment under an IDR plan, loan discharge following total and permanent disability). H.R. 4674 would make a variety of changes aimed at streamlining or enhancing administrative processes for borrowers. Currently, borrowers must actively enroll in or apply for certain loan benefits, such as an IDR plan, or must apply for and provide income documentation to qualify for total and permanent disability discharge. H.R. 4674 would authorize ED to automatically take steps to make such loan benefits available to borrowers, without action from the borrower. For example, the bill would authorize ED to place certain borrowers who are at least 120 days delinquent on their loans, or who are rehabilitating their loan out of default, into the newly created IBR plan and to obtain such income and family size information as is reasonably necessary to calculate such borrowers' monthly payments under the plan. H.R. 4674 would also require ED to establish procedures to automatically recertify and recalculate a borrower's monthly repayments under the IDR plan in which he or she is enrolled, and procedures to automatically monitor a borrower's income for purposes of qualifying for a permanent and total disability loan discharge. Finally, H.R. 4674 would require ED to develop a manual of standardized administrative procedures and policies to be used by ED-contracted loan servicers and collection agencies. Expansion of Loan Refinancing Currently, Direct Consolidation Loans allow individuals who have borrowed at least one loan through either the Direct Loan or FFEL program to refinance their eligible federal student loan debt by borrowing a new loan and using the proceeds to pay off their existing federal student loan obligations. Direct Consolidation Loans have fixed interest rates that are determined by calculating the weighted average of the interest rates on the loans that are consolidated, rounded up to the next higher one-eighth of a percentage point. Upon an individual obtaining a Direct Consolidation Loan, a new repayment period begins, which may be for a longer term than applied to the loans originally borrowed. Private education loans are not eligible to be refinanced into a Direct Consolidation Loan. H.R. 4674 would require ED to establish two new loan refinancing options. One option would permit qualified borrowers to refinance Direct Loan and FFEL program loans into a refinanced Direct Loan. In general, refinanced Direct Loans would have the same terms and conditions as the original loans that were refinanced; however, the refinanced Direct Loans would have a fixed interest rate pegged to specified Direct Loan program interest rates that are in effect for new loans made during the period from July 1, 2019, through June 30, 2020. Such an option could be viewed as more favorable for borrowers who have existing loans with higher interest rates. The interest rates that would be applicable to refinanced Direct Loans are as follows: where the loan being refinanced is a FFEL or Direct Loan program Subsidized Loan or Unsubsidized Loan issued to an undergraduate student, 4.53%; where the loan being refinanced is a FFEL or Direct Loan program Subsidized Loan or Unsubsidized Loan issued to a graduate or professional student, 6.08%; where the loan being refinanced is a FFEL or Direct Loan program PLUS Loan issued to a graduate/professional student or a parent of a dependent undergraduate student, 7.08%; and where the loan being refinanced is a FFEL or Direct Loan program Consolidation Loan, the weighted average of the lesser of (1) the interest rates described above, as would be applicable to the original loans ( component loans ) discharged due to consolidation or (2) the original interest rate of the component loan. Obtaining a refinanced Direct Loan would not result in the start of a new repayment period. The second option would permit qualified borrowers to refinance private education loans into a Federal Direct Refinanced Private Loan. In general, a Federal Direct Refinanced Private Loan would have the same terms and conditions as a Federal Direct Unsubsidized Loan; however, certain student loan forgiveness benefits available for Direct Loan borrowers (e.g., PSLF) would not be included. Federal Direct Refinanced Private Loans would have a fixed interest rate pegged to specified Direct Loan program interest rates that are in effect for new loans made during the period from July 1, 2019, through June 30, 2020. The interest rates that would be applicable to Federal Direct Refinanced Private Loans are as follows: where the loan being refinanced was borrowed for undergraduate study, 4.53%; where the loan being refinanced was borrowed for graduate or professional study, 6.08%; and where the loan being refinanced was for both undergraduate study and graduate or professional study, 7.08%. A Federal Direct Refinanced Private Loan would not count against a borrower's annual or aggregate Direct Loan limits. Modifying Institutional Accountability Requirements for Receipt of Federal Funds Currently, the HEA provides for institutional accountability measures through many of its provisions. Some measures address educational accountability, which relates to institutions providing a quality education (e.g., accreditation requirements). Other measures address fiscal accountability, which relates to institutional financial health and whether institutions are good stewards of federal student aid funds. In addition, some laws outside of the HEA seek to hold institutions accountable in other areas. These include, but are not limited to, Title IX of the Education Amendments of 1972 (Title IX), which conditions receipt of federal funds on an institution (or other entity) ensuring it does not discriminate on the basis of sex in educational programs or activities. H.R. 4674 would address educational and fiscal accountability requirements, as well as Title IX requirements. The changes discussed below, along with other provisions of H.R. 4674 , signal a congressional interest in strengthening accountability requirements across all types of IHEs and their educational programs, in general, while focusing on greater accountability in the Title IV programs, and for proprietary IHEs in particular. Educational Accountability Educational accountability relates to attempts to ensure IHEs are providing a quality educational program, and it may be assessed in a variety of ways. H.R. 4674 would address educational accountability in several ways, which largely relate to the Title IV student aid programs. Accreditation To participate in the Title IV student aid programs, IHEs must be accredited by an agency that is recognized by ED as a reliable authority regarding the quality of education offered at the IHE. The HEA currently specifies the recognition criteria to be used by ED. In accordance with statute, an accreditation agency's institutional quality evaluation standards must assess, among other items, "student achievement in relation to [an] institution's mission." Such evaluation standards mayâbut are not required toâinclude, as applicable, course completion, passage of state licensing exams, and job placement rates. While accrediting agencies' evaluation standards are guided, in part, by such federal requirements, specific standards are adopted by individual agencies and vary among them. Accreditation agencies may also have varying procedures as well. For instance, agencies may have varying definitions for actions taken against IHEs (e.g., warning, probation) and differing policies regarding the information they publicly disclose about the IHEs they accredit. H.R. 4674 would partially standardize practices among agencies and bring additional transparency to accrediting agency and ED practices in this realm. The bill would newly require accrediting agencies to evaluate specified student educational outcomes (i.e., completion, progress toward completion, and workforce participation), but would permit agencies to establish different measures of such outcomes for different institutions. For example, an agency would be required to evaluate an IHE's "workforce participation" outcomes, but could measure an IHE's performance under that outcome by measuring rates of licensure or job placement. H.R. 4674 would also require ED to establish standardized definitions for the various actions accrediting agencies may take and for public notice and disclosure requirements with respect to the actions taken. Finally, the bill would make some changes to the processes ED uses to recognize accrediting agencies, including adding a requirement to make accrediting agencies' applications for recognition publicly available, and requirements to submit to Congress information relating to ED's accrediting agency recognition decisions. Establishment and Revision of Accountability Metrics H.R. 4674 would establish new Title IV institutional participation accountability metrics. One would measure on-time repayment ratesâ the extent to which students who borrowed Title IV loans to attend an IHE are able to make payments on their loans in a timely manner (i.e., the percentage of borrowers who have paid at least 90% of their monthly payments during a three-year period). Another would measure instructional spendingâ an IHE's instructional expenditures relative to revenues derived from tuition and fees (i.e., determining if instructional expenditures equal at least one-third of the amount of revenue derived from tuition and fees for each of the three most recent institutional fiscal years). It appears that a presumption behind these measures would be that if an IHE is of sufficient quality, then individuals who borrow to attend it should be able to earn adequate wages to make timely payments on their loans and that the IHE would be spending a reasonable amount of tuition and fees revenues on instruction rather than other items, such as marketing. Under the bill, the current institutional cohort default rate (CDR) metric, which is applicable to IHEs participating in federal student loan programs and measures the number of an IHE's federal student loan recipients who enter repayment and subsequently default within a certain period of time, would be phased out. Under current law, an IHE is subject to loss of Direct Loan program eligibility if its CDR is 40% or greater for one year, and is subject to loss of Direct Loan program and Pell Grant program eligibility if its CDR is 30% or greater for three consecutive years. The CDR metric would be replaced with a new adjusted cohort default rate , which would be similar to the current CDR metric, but would also take into account the relative risk an IHE may pose to students and taxpayers by multiplying the CDR by the percentage of students enrolled at the IHE who borrowed Title IV loans. IHEs would be subject to loss of Title IV eligibility if they met one of three separate thresholds: (1) an adjusted CDR that is greater than 20% for each of the three most recent years, (2) an adjusted CDR that is greater than 15% for each of the six most recent fiscal years, or (3) an adjusted CDR that is greater than 10% for each of the eight most recent fiscal years. This structure would penalize IHEs with adjusted CDRs that remain consistently too high over long periods. Finally, H.R. 4674 would specify that borrowers in forbearance for three or more years would be considered in default for purposes of calculating the adjusted CDR. The bill would additionally require ED to establish metrics that would assess the extent to which certain types of sub-baccalaureate educational programs at public and nonprofit IHEs and most educational programs (including degree programs) at proprietary IHEs prepare students for gainful employment in a recognized occupation. In creating the metrics, ED would be required to establish a debt-to-earnings rate meeting specified general criteria to measure gainful employment program enrollees' educational debt relative to their earnings. Fiscal Accountability Fiscal accountability requirements relate to institutional financial health and whether IHEs are good stewards of federal student aid funds. H.R. 4674 would make several changes to current fiscal accountability requirements. IHEs are required to be financially responsible to participate in the Title IV programs. IHEs that fail to meet certain financial responsibility standards may continue to participate in the Title IV programs only if they meet additional requirements, including posting a letter of credit (a financial guarantee) to ED. H.R. 4674 would revise the conditions under which IHEs are considered financially responsible. It would expand on the instances in which an IHE may be required to post a letter of credit to ED for continued participation in the Title IV programs. The bill would specify that ED may not consider a private nonprofit or proprietary IHE financially responsible if it is required to submit a teach-out plan to its accreditor or is subject to a specified amount of pending or approved borrower defense to repayment claims. Additional circumstances under which ED would be prohibited from considering a proprietary IHE financially responsible would also be stipulated. H.R. 4674 would additionally specify the circumstances under which ED would be required to redetermine whether an IHE is financially responsible. Such circumstances would apply to both private nonprofit and proprietary IHEs. They would include instances in which an IHE is required to pay a material debt or liability arising from a judicial, administrative, or judicial proceeding and in which an IHE is involved in a lawsuit for financial relief related to the making of Direct Loans. H.R. 4674 would also specify circumstances under which ED would be permitted to redetermine whether an IHE is financially responsible, which would be applicable to all types of institutions, including public IHEs. Such circumstances would include a determination that ED will be likely to receive a significant number of borrower defense to repayment claims, a citation by a state authorizing agency for failure to meet state requirements, and high annual dropout rates. H.R. 4674 would amend the 90/10 Rule, under which proprietary IHEs currently must derive at least 10% of their revenues from non-Title IV sources or lose Title IV eligibility after failure to do so for two consecutive years. The bill would specify that proprietary IHEs must derive at least 15% of their revenues from sources other than federal education assistance funds, which would include, but not be limited to, Title IV funds and Post-9/11 GI Bill funds. It would further establish that failure to meet the requirement in a single year would result in an automatic loss of Title IV eligibility. In addition, the bill would limit marketing, recruitment, advertising, and lobbying expenditures for IHEs that are determined to have spent less than an amount equal to one-third of their tuition and fees revenues on instruction. IHEs that do not limit such spending for two consecutive fiscal years would lose Title IV eligibility. Title IX of the Education Amendments of 1972 Title IX prohibits discrimination on the basis of sex in education programs and activities receiving federal financial assistance. On November 29, 2018, ED proposed to amend the regulations that implement Title IX to clarify and modify requirements of elementary, secondary, and postsecondary schools regarding incident response, remedies, and other issues. H.R. 4674 would prohibit ED from implementing or enforcing the proposed Title IX regulations, or proposing or issuing regulations that are substantially similar to the November 2018 proposed regulations. Revising Public Accountability, Transparency, and Consumer Information Requirements The HEA establishes a set of measures related to public accountability, transparency, and consumer information. In general, these provisions are intended to provide information to consumers to enable them to make informed college-going and financial decisions. Currently, the HEA addresses issues related to college affordability and the collection and dissemination of consumer information to students and the public by requiring ED, among other things, to administer the College Navigator website, through which certain consumer information about IHEs is made publicly available, and by requiring IHEs to make Net Price Calculators, a primary consumer information tool authorized under the HEA, available on their websites. Net Price Calculators allow prospective students to obtain individual estimates of the net price of an IHE, taking into account the financial aid they might be likely to receive. The HEA currently prohibits the creation of a new postsecondary student unit record system (SURS), which could be used to track individual students' financing of their schooling, participation in and completion of academic programs, and post-program outcomes over time. The SURS ban was established in the interest of protecting student privacy and limits the granularity and quality of data available on the outcomes of IHEs' students. In addition, the HEA currently requires that certain Direct Loan borrowers undergo loan entrance counseling prior to loan disbursement, and that certain borrowers undergo exit counseling after dropping below half-time enrollment. Both of these requirements are intended to help ensure that borrowers are aware of their loan terms and conditions and of the potential consequences of borrowing a student loan. H.R. 4674 would amend the HEA to take a more expansive approach to public accountability, transparency, and consumer information requirements. Many of these changes represent congressional interest in providing consumers with additional and more-nuanced information, potentially helping them make more-informed college-going and student loan borrowing decisions. Perhaps most notably, H.R. 4674 would repeal the current prohibition on the creation of a new SURS and require ED to develop a postsecondary student-level data system to use in evaluating a variety of metrics such as student enrollment, progression, completion, and post-collegiate outcomes (e.g., earnings, employment rates, and loan repayment rates). Summary aggregate information from this system would be made publicly available. H.R. 4674 would also amend provisions relating to Net Price Calculators by requiring IHEs to provide more-detailed information regarding their costs of attendance and estimated aid that may be available to individual students. The bill would make changes to the information IHEs are required to provide to individuals before and after receipt of federal student aid. For instance, H.R. 4674 would require ED to develop a standardized financial aid offer letter to be used by IHEs, which would enable students to compare financial aid offers from multiple IHEs. It would also require all borrowers to receive counseling in each year that they receive a Title IV student loan to assist them in understanding the terms and conditions of the loan and the potential consequences of accepting such aid. Expanding Student Services for Specific Populations In addition to federal student aid, which provides direct financial assistance to individual students that can be applied toward their cost of attendance, the HEA provides additional academic and personal supports to certain student populations. These supports are typically administered through grants to IHEs or other qualified entities. H.R. 4674 would create a number of new programs to support students, and would extend a number of existing programs. Creation of New Programs H.R. 4674 would create the following programs: Student Success Fund . This would be a new program of grants to states or Indian tribes to carry out plans "to implement promising and evidence-based institutional reforms and innovative practices to improve student outcomes" including transfer and completion. States and some tribes would be required to match a portion of the federal grant, with the nonfederal amount increasing to 100% of the federal amount by the ninth year. H.R. 4674 would authorize $500 million in mandatory appropriations per year for FY2021 and each succeeding fiscal year. Pell Bonus Program . This would be a new grant program providing support to qualified public and nonprofit IHEs with qualified shares of Pell Grant recipients. IHEs could use the funds for "financial aid and student support services." Funds would be allotted to institutions based on their relative share of bachelor's degrees awarded to all Pell Grant recipients. H.R. 4674 would authorize mandatory appropriations of $500 million per year for FY2021 and each succeeding fiscal year. Remedial Education Grants . This would make funds available to IHEs or applicable partnerships to "improve remedial education in higher education." Grantees would employ models specified in the legislation and be evaluated on the basis of their programs' effectiveness in increasing course and degree completion. H.R. 4674 would authorize $162.5 million in discretionary appropriations per year for FY2021 through FY2026. Grants for Improving Access to and Success in Higher Education for Foster Youth and Homeless Youth . This would be a new formula grant program to states to (1) develop a statewide initiative to support foster and homeless youth transitioning into postsecondary education and (2) offer subgrants to public and private nonprofit IHEs to improve postsecondary persistence and completion by such students. H.R. 4674 would authorize discretionary appropriations of $150 million for FY2021 and authorize an inflation-adjusted amount for each year through FY2026. Jumpstart to College . This would be a new grant program providing funds to states and public and private nonprofit IHEs to establish and support early college or dual and concurrent enrollment programs. H.R. 4674 would authorize $250 million in discretionary appropriations per year for FY2021 through FY2026. Extensions of Existing Programs H.R. 4674 would extend the authorization of a number of existing student support programs. In most, but not all, cases the authorization of appropriations in H.R. 4674 would be above the current law levels. In terms of the authorized funding level, one of the most substantial extensions is to the TRIO programs, a group of programs that provide grants to IHEs and other organizations to furnish academic support services to disadvantaged students. H.R. 4674 would authorize discretionary appropriations of $1.12 billion for FY2021 and the authorization level would be adjusted for inflation in each of the five succeeding fiscal years. In FY2019, TRIO appropriations were $1.06 billion. In terms of increases to authorization levels relative to the most recent funding level, one of the largest increases would be to the Child Care Access Means Parents in School (CCAMPIS) program, which provides grants to IHEs to promote the participation of low-income parents in postsecondary education through the availability of child care services. H.R. 4674 would authorize $200 million per year for FY2021 and each of the five succeeding fiscal years. In FY2019, appropriations for this program were $50 million. Expanding Federal Assistance to Support to IHEs The HEA authorizes programs intended to provide grants and other financial support to IHEs that serve high concentrations of minority and/or needy students to help strengthen the IHEs' academic, administrative, and financial capabilities. Typically, these institutions are called minority serving institutions (MSIs). Among the MSI programs, the HEA authorizes separate grant programs for distinct types of MSIs, including the following: American Indian Tribally Controlled Colleges and Universities, Alaska Native and Native-Hawaiian-serving Institutions, Predominantly Black Institutions, Native American-serving, Nontribal Institutions, Predominantly Black Institutions, Asian American and Native American Pacific Islander-serving Institutions, Historically Black Colleges and Universities, and Hispanic Serving Institutions. Many of these MSI programs have been funded through annual discretionary and mandatory appropriations. As of when H.R. 4674 was ordered to be reported, mandatory appropriations, authorized under HEA Section 371, for several of these programs had expired at the end of FY2019. In FY2019, these mandatory appropriations totaled $239 million. H.R. 4674 would permanently authorize mandatory appropriations under HEA Section 371 at a total of $300 million annually. It would also extend and increase the authorization of discretionary appropriations for each of the MSI programs through FY2026. In addition, H.R. 4674 would reauthorize discretionary and mandatory appropriations for several MSI programs that have not received appropriations in several years, such as the Endowment Challenge Grant program, and would create several new grant programs to support MSIs, each supported with discretionary appropriations. H.R. 4674 would also amend and reauthorize through FY2026 a statute outside of the HEAâthe Tribally Controlled Colleges and Universities Assistance Act of 1978âwhich authorizes discretionary appropriations for grants to Tribally Controlled Colleges and Universities. Creating New Grants to States and Institutions to Reduce Students' Postsecondary Costs (America's College Promise) H.R. 4674 would create a new HEA, Title IV, Part J. The programs authorized in this part would provide grants to states, Indian tribes, and IHEs, with the primary focus of eliminating or reducing tuition and fees at community colleges and other postsecondary institutions. Grants to Support Tuition-Free Community College H.R. 4674 would authorize new grants to states to support community colleges in waiving tuition and fees for eligible students. Qualified Indian tribes would also be eligible. The program would define an eligible student as a student who attends a community college on a not less than half-time basis, either qualifies for in-state resident community college tuition or would qualify for in-state community college tuition but for his or her immigration status, and meets certain other criteria. A student would not need to meet financial criteria to qualify as an eligible student. Funding, Allotments, and Nonfederal Share H.R. 4674 would provide permanent mandatory appropriations beginning in FY2021. The funding level would incrementally increase from $1,569,700,000 in FY2021 to $16,296,080,000 in FY2030. Mandatory appropriations would be provided at the FY2030 level in succeeding years. Funds would be allocated to states via a formula. The bill would direct ED to develop a formula based on each participating state's share of eligible students and other factors. Each participating state would be eligible to receive, on a per eligible student basis, an amount equal to at least 75% of the national average resident community college tuition and fees. States would be required to provide, on a per eligible student basis, a nonfederal share equal to 25% of the national average resident community college tuition and fees. Requirements for Participating States As a condition of receiving a grant under this program, a state would be required to waive tuition and fees for eligible students attending community colleges within the state. An eligible student would be allowed to use other financial aid for which he or she qualifies, such as Pell Grants, for other components of the cost of attendance, such as housing and transportation. To prevent state and local disinvestment in community colleges, H.R. 4674 would require that funds under this grant supplement and not supplant other federal, state, and local funds. The program would include maintenance of effort requirements that would require participating states to provide financial support equal to or greater than the average amount provided in the three preceding years for public higher education; operational expenses for public, four-year colleges; and need-based financial aid. Grants for Historically Black Colleges and Universities, Tribally Controlled Colleges and Universities, and Minority-Serving Institutions to Reduce or Waive Tuition H.R. 4674 would create three new programs that would provide grants to each of (1) Historically Black Colleges and Universities (HBCUs), (2) Tribally Controlled Colleges and Universities (TCCUs), and (3) Minority-Serving Institutions (MSIs) to "waive or significantly reduce tuition and fees for eligible students â¦ for not more than the first 60 credits an eligible student enrolls at the participating institution." Grants would be available to four-year institutions of each type and would not require a nonfederal match. An institution's grant would equal the actual cost of tuition and fees at the institution (not to exceed the national average tuition and fees at a public four-year IHE), multiplied by the number of eligible students enrolled at the institution. Eligible institutions would be HBCUs, TCCUs, and MSIs that have a student body of at least 35% low-income students and meet other criteria related to student services and supports. Eligible students would include new enrollees or transfers from a community college. H.R. 4674 would provide permanent mandatory funding beginning in FY2021. The funding level would incrementally increase from $63,250,000 in FY2021 to $1,626,040,000 in FY2030. Mandatory appropriations would be provided at the FY2030 level in succeeding years. Additional Grants H.R. 4674 would authorize discretionary appropriations for such sums as necessary in FY2021 and each succeeding fiscal year to support additional new grant programs. First, the bill would create a new series of formula grants to states to provide grants to individual students with unmet financial need. These grants would initially be available to Pell Grant recipients at public IHEs. Once all eligible Pell Grant recipients received grants, the aid would be extended to other students at public IHEs. ED would also be authorized, under certain circumstances, to carry out a similar grant program for students at private nonprofit IHEs. The bill would authorize another grant program for states to award grants to participating four-year IHEs to waive resident tuition and fees in cases where all eligible students have received the above grants for unmet need. Both sets of programs would generally have a federal share of 75% and a nonfederal share of 25%.	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crs_R46067	crs_R46067_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Overview The Chief Financial Officers Act of 1990 (CFO Act) requires annual financial audits of federal agencies' financial statements to "assure the issuance of reliable financial information ... deter fraud, waste and abuse of Government resources ... [and assist] the executive branch ... and Congress in the financing, management, and evaluation of Federal programs." Agency inspectors general (IGs) are responsible for the audits and may contract with one or more external auditors. The Department of Defense (DOD) completed its first agency-wide financial audit in FY2018 and recently completed its FY2019 audit. Comprehensive data for the FY2019 audit are not currently available. Therefore, this report focuses on DOD's FY2018 audit. Congressional interest in DOD's audits is particularly acute because DOD accounts for about half of federal discretionary expenditures and 15% of total federal expenditures. The Department of Defense Inspector General (DOD IG) contracted with nine Independent Public Accounting firms (IPAs) to conduct the FY2018 and FY2019 audit. The IPAs conducted 24 separate audits within DOD (see Table 1 for each of the component-level audit opinions). In both FY2018 and FY2019 audits, the DOD IG issued the overall agency-wide opinion of disclaimer of o pinion âmeaning auditors could not express an opinion on the financial statements because the financial information was not sufficiently reliable. DOD components that received a disclaimer of opinion represent approximately 56% of the reported DOD assets and 90% of the reported DOD budgetary resources. DOD expected to receive a disclaimer of opinion for FY2018 and FY2019. The department has stated it could take a decade to receive an u nmodified (clean) audit opinion. The federal government as a whole is unable to receive a clean opinion on its financial report because agencies with significant assets and budgetary costs, such as DOD, the Department of Housing and Urban Development, and the Railroad Retirement Board, have each received a disclaimer of opinion in recent years. The federal government as a whole potentially could receive a clean audit opinion without all government agencies receiving a clean audit opinion; however, the size of the DOD budgetâ$708 billion in FY2019âprevents an overall clean opinion without DOD receiving a clean audit opinion. DOD employs 2.9 million military and civilian employees at approximately 4,800 DOD sites in 160 countries. DOD IG personnel and auditors from IPAs visited over 600 sites, sent over 40,000 requests for documentation, and tested over 90,000 sample items. DOD spent $413 million to conduct the FY2018 audit: $192 million on audit fees for the IPAs and $221 million on government costs to support the audit. DOD spent an additional $406 million on audit remediation and $153 million on financial system fixes. What Is a Financial Audit? Financial statements are the primary way for an entity to communicate its financial performance to its stakeholders. How each line item on a financial statement (e.g., property) should be valued and reported is based on Generally Accepted Accounting Principles (GAAP), an agreement among practitioners (i.e., accountants, auditors, and regulators). In a financial audit, a private or public entity hires an independent auditor to provide reasonable assurance to all stakeholders that its financial statements are free of material misstatement, whether caused by error or fraud. Auditors form opinions by examining the types of risks an organization might face and the controls in place to mitigate those risks. Auditors give unbiased professional opinions on whether financial statements and related disclosures are fairly stated in all material respects for a given period of time in accordance with GAAP. As mentioned previously, the CFO Act requires federal agencies' financial statements to be audited annually. The CFO Act assigns responsibility for audits to agency inspectors general (IGs), but an IG may contract with one or more external auditors to perform an audit. The annual audit can inform Congress and the agency about its business processes and areas for improvement. An audit of DOD can provide benefits, such as (1) effective and efficient internal operations that can lead to reducing costs and improving operational readiness; (2) improved allocation of assets and financial resources that can enhance DOD's decisionmaking and ability to support the Armed Forces; and (3) improved compliance with statutes and financial regulations. For each line item on a financial statement and notes to the financial statement, an auditor will examine a sample of the underlying economic events to determine the reported information's accuracy. The Federal Accounting Standards Advisory Board (FASAB) promulgates financial reporting and accounting standards for federal government entities, and GAO establishes federal auditing standards, including for federal grant recipients in state and local governments. GAO issues the Generally Accepted Government Auditing Standards (GAGAS), also commonly known as the Yellow Book , to provide a framework for conducting federal government audits. The Yellow Book requires auditors to consider the visibility and sensitivity of government programs in determining the materiality threshold. Similar to requirements in the private sector, GAGAS requires federal financial reporting to disclose compliance with laws, regulations, contracts, and grant agreements that have a material effect on financial statements. Before auditors examine an entity's financial statement, they first evaluate its Enterprise Resource Planning (ERP) systems' (information technology systems') access control and reliability, as well as internal controls. ERP refers to an enterprise-wide information system used to manage and coordinate all of an entity's resources, information, and functions from shared data stores, including financial information. Auditing ERP systems is a critical aspect of evaluating an entity's internal controls. Internal Control in the Federal Government Internal control is a series of integrated actions that management uses to guide an entity's operations. Under GAO standards, effective internal controls should require management to use dynamic, integrated, and responsive judgment rather than rigidly adhering to past policies and procedures. The success or failure of an entity's internal controls depends on its personnel. Management is responsible for designing effective internal controls, but implementation depends on all personnel understanding, implementing, and operating an effective internal control system. Federal agencies have been required to report to Congress on internal controls since the Federal Managers' Financial Integrity Act of 1982. In addition, the Federal Financial Management Improvement Act of 1996 requires agencies to report to Congress on the effectiveness of internal control over financial management systems. GAO's Standards for Internal Control in the Federal Government (also known as the Green Book ) provides the overall framework for designing, implementing, and operating an effective internal control system. An audit of an entity's internal controls includes computer systems at the entity-wide, system, and application levels. GAGAS recommends using specific frameworks for internal control policies and procedures, including certain evaluation tools created specifically for federal government entities. Office of Management and Budget (OMB) Circular No. A123, Management's Responsibility for Enterprise Risk Management and Internal Control , provides additional guidance. The federal government's internal control framework is based on the framework created by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), which is widely used in the private sector. The COSO framework is dedicated to improving organizational performance and governance through effective internal control, enterprise risk management, and fraud deterrence. The COSO framework, depicted in Figure 1 , was created to help practitioners assess internal controls not as an isolated issue, but rather as an integrated framework for how internal controls work together across an organization to help achieve objectives as determined by management. It represents the integrated perspective recommended by COSO for practitioners who are creating and assessing internal controls. The cube may be best understood by examining each set of components separately: Categories of objectives. Operations, Reporting, and Compliance are represented by the columns. The objectives are designed to help an organization focus on different aspects of internal controls to help management achieve its objectives. Components of internal control. Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring Activities are represented by the rows. The components represent what is required to achieve the three objectives. Levels of organizational structure. Entity-Level, Division, Operating Unit, and Function are represented by the third dimension. For an organization to achieve its objectives, according to COSO, internal control must be effective and integrated across all organizational levels. Internal Control at DOD Internal controls can help DOD leadership achieve desired financial results through effective stewardship of public resources. Effective internal controls can increase the likelihood that DOD achieves its financial objectives, including getting a clean (i.e., unmodified) audit opinion. Properly designed internal controls can help reduce the amount of detail an auditor will examine, including the number of samples examined. Good internal controls could reduce the amount of time required to conduct an audit, thus reducing its cost. At DOD, auditors identified 20 agency-wide internal control material weaknesses and 129 DOD component-level material weaknesses that range from issues with financial management systems to inventory management. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting that results in a reasonable possibility that management will not prevent, or detect and correct, a material misstatement in the financial statements in a timely manner. Many of these material weaknesses are discussed later in this report under " Issues for Congress ." Properly designed internal controls can also serve as the first line of defense in safeguarding assets. Internal controls help private and public entities achieve objectives, such as enterprise risk management, fraud deterrence, and sustained and improved performance, by designing processes that control risk. The DOD IG identified multiple DOD components that do not have sufficient entity-level internal controls . The lack of entity-level internal controls directly contributed to an increased risk of material misstatements on the components' financial statements and the agency-wide financial statements. Until DOD resolves the many issues surrounding internal controls and establishes a better record-keeping system, it might be difficult for auditors to identify other material weaknesses that could prevent DOD from receiving a clean audit opinion. When the current set of internal control issues is resolved, and auditors are better able to analyze DOD records, they might discover additional issues, including new material weaknesses, that need to be resolvedâa cascading effectâbefore DOD receives a clean audit opinion. This cycle might repeat a few times. FY2018 Audit Results The DOD auditors issued 2,377 notices of findings and recommendations (NFRs) that resulted in 20 agency-wide material weaknesses and 129 DOD component-level material weaknesses. Appendix A provides an overview of the 20 agency-wide material weaknesses. An auditor creates an NFR to capture issues that require corrective action. DOD then creates a corrective action plan (CAP) to address one or more NFRs. The NFR is later retested, and if the CAP sufficiently addresses the NFR, the auditor is to validate that the issue has been resolved. As of June 2019, the majority of NFRs were related to three critical areas: approximately 48% were related to financial management systems and information technology; 30% were related to financial reporting and DOD's fund balance with Treasury; and 16% were related to property. Although the overall number of NFRs increased slightly between December 2018 and June 2019, the number has decreased significantly in certain categories (see Table 2 , Other column). The increase in NFRs in certain categories is an expected result of the audit process. As auditors learn more about DOD and how it functions, they may continue to identify new NFRs, while DOD continues to address some of the previously identified NFRs. The Office of the Under Secretary of Defense (Comptroller) has established an audit NFR database. DOD uses the database to consolidate and track the status of all auditor-issued NFRs and prioritize and link them to CAPs. The NFR and CAP component-based metrics are reported and reviewed monthly in the National Defense Strategy meeting with the Deputy Secretary of Defense and Military Service financial management leadership teams. The military service branchesâArmy, Navy, Marine Corps, and Air Forceâaccount for over 60% of NFRs identified in the FY2018 audit (see Table 3 ). For DOD to receive a clean audit opinion, civilian leadership and uniformed Armed Forces personnel may need to improve collaboration. According to DOD, it is prioritizing CAPs that align with the National Defense Strategy and provide the greatest potential value to DOD operations and the warfighter. DOD has established actionable financial statement audit priorities at many levels within the department, including at the command level. Those FY2019 priorities include the following: Real Property; Government Property in the Possession of Contractors; Inventory, and Operating Materials and supplies; and Access Controls for IT Systems. Given the complexity of DOD operations, auditors began their work for the FY2019 financial audit in late 2018. Comprehensive data for the FY2019 audit are not currently available. However, the auditors issued an overall agency-wide disclaimer of opinion for FY2019. Most financial statement audits stop as soon as the auditor determines the reporting entity is not auditable. DOD, however, has asked the auditors to continue such audits to identify as many problems as possible, with the goals of identifying systemic issues and making faster progress toward business reform. Issues for Congress Although the CFO Act required annual audits of federal agencies' financial statements, DOD did not complete an agency-wide audit until 2018â28 years later. One of DOD's strategic goals is to reform its business practices for greater performance and affordability. According to DOD, the annual audit process helps it reform its business practices consistent with the National Defense Strategy (NDS): The financial statement annual audit regimen is foundational to reforming the Department's business practices and consistent with the National Defense Strategy. Data from the audits is driving the Department's strategy, goals, and priorities and enabling leaders to focus on areas that yield the most value to the warfighter. The audits are already proving invaluable and have the potential to support long-term, sustainable reform that could lead to efficiencies, better buying power, and increased public confidence in DoD's stewardship of funds. Continued congressional oversight of DOD's plan to achieve a clean audit opinion could help DOD achieve a clean audit opinion. As more components receive a clean audit opinion, audit costs might eventually decrease. For FY2018, DOD incurred nearly $1 billion in total audit costs, which was less than 0.25% of DOD's FY2018 budget. Although the cost of an audit is a consideration, the more impactful benefits from an annual financial audit, arguably, are the changes in DOD business practices that directly impact the NDS while increasing transparency. The audits identified three critical areas of improvement that are consistent with the NDS: (1) financial management systems and information technology (IT), (2) financial reporting and fund balance with Treasury, and (3) property (real property, inventory, and supplies, and government property in the possession of contractors). Addressing the issues in these critical areas not only could help DOD improve its business practices, but it might also help resolve many of the NFRs, which could enable some audit components to receive clean audit opinions in the next few years instead of in another decade or more. Financial Management Systems and Information Technology According to DOD, its financial management systems and information technology provide a broad range of functionality to support agency financial management, supply chain management, logistics, and human resource management. Reliable systems are mission critical to DOD meeting its NDS and supporting the warfighter. Also, DOD is required to comply with laws and regulations, such as the Federal Managers' Financial Integrity Act of 1982, the Federal Financial Management Improvement Act of 1996, and OMB Circular A-123. These laws and regulations collectively require DOD to maintain a system of internal controls that can produce reliable operational and financial information. The challenges DOD faces in financial management systems and information technology are twofold and compromise nearly half of all NFRs (see Table 2 or Table 3 ). First, DOD's initiatives to address the issues related to access controls for IT systems are partially implemented. A fully implemented plan to address access control issues would potentially restrict access rights to appropriate personnel, monitor user activity, and safeguard sensitive data from unauthorized access and misuse. As part of its corrective action plan, DOD is requiring financial system owners and owners of business systems that contribute financial information to review and limit access only to those who need it and only to the specific areas within the systems that they need to access. DOD has developed security controls and standardized test plans that align with the Federal Information Systems Control Audit Manual methodology used to test systems during an audit. Further, DOD management has directed components without a proper software maintenance policy to establish a baseline policy for those software systems and maintain a record of all software system changes. In addition to requiring components to develop reports on privileged users and transactions, including privileged user activities, the department has directed components to periodically review user access rights and remove unauthorized users. Second, the number and variety of financial systems complicate DOD's financial statement audits. In 2016, DOD reported more than 400 separate information technology systems were used to process accounting information to support DOD's financial statements. Many of these legacy systems were designed and implemented to support a particular function, such as human resource management, property management, or logistics management, and were not designed for financial statement reporting. These systems include newer ERP systems and custom-built legacy systems, financial systems, and nonfinancial feeder systems. Also, aging systems and technology that predate modern data standards and laws, as well as nonaccounting feeder systems, affect data exchange with modern ERPs to facilitate auditable financial reports. DOD's IT modernization program is investing in ERPs and aims to migrate 51 legacy systems to core modern ERPs by the end of 2023. How the remediation plans evolve and how they are implemented as DOD migrates to the new ERPs could be a significant determiner of DOD's ability to address nearly half of the NFRs. Financial Reporting and Fund Balance with Treasury According to DOD's auditors, its policies and procedures for compiling and reporting financial statements are not sufficient to identify, detect, and correct inaccurate and incomplete balances in the general ledger. Without an adequate process to identify and correct potential misstatements in the general ledger, balances reported on financial statements, accompanying footnotes, and related disclosures may not be reliable or useful for decisionmaking for Congress, including appropriating the DOD budget. The lack of accurate numbers, arguably, also presents challenges for DOD leadership in making agency financial decisions. DOD's assets increased by nearly $200 billion in FY2018 over FY2017. Fund Balance with Treasury, one of the assets, increased by $78.6 billion. According to DOD, the increase in Fund Balance with Treasury resulted from additional appropriations received in FY2018. DOD is unable to effectively track and reconcile collection and disbursements activity from its financial systems, which resulted in DOD being unable to reconcile its general ledger and Treasury accounts. The fund balance with the Treasury Department is an asset account reported on DOD's general ledger, which shows a DOD component's available budget authority. Similar to a personal checking account, the fund's balance increases and decreases with collections and disbursements of new appropriations and other funding sources. Each DOD component should be able to perform a detailed monthly reconciliation that identifies all the differences between its records and Treasury's records. The reconciliations are essential to supporting the budget authority and outlays reported on the financial statements. The auditors identified several deficiencies in the design and operation of internal controls for fund balance with the Treasury that resulted in DOD-wide material weakness. DOD has undertaken business process improvements to streamline reporting, reduce differences to an insignificant amount, and support account reconciliations. Property and Inventory The auditors report that DOD faces challenges with properly recording, valuing, and identifying the physical location of real property, inventory, and government property that is in the possession of contractors. DOD's challenges with property and inventory complicate Congress's ability to perform effective oversight and budget appropriations. Without accurate real estate counts and values, DOD will continue to face challenges in meeting the National Strategy for Efficient Use of Real Property. DOD faces similar issues with inventory. It is unable to provide assurance that inventory recorded in the financial statements exists and is valued properly. Without accurate inventory counts, DOD might not be able to support its missions without incurring additional costs. Some appropriated funds could be used to purchase extraneous inventory that DOD might already have on hand, or DOD might rely on inventory that appears in an inaccurate count but does not actually exist. Real Property The auditors report that DOD is unable to accurately account for all of its buildings and structures. This includes houses, warehouses, vehicle maintenance shops, aircraft hangars, and medical treatment facilities, among others. As an example, during the FY2018 audit, the Air Force identified 478 buildings and structures at 12 installations that were not in the real property system. DOD faces issues with demonstrating the right of occupancy or ownership through supporting documentation and with incomplete or out-of-date systems of record. Accurate property records, valuation, and right of ownership could potentially help inform DOD leadership as it considers any future base realignment and closure. According to DOD, military departments are executing real property physical inventories to reconcile with the systems of record. The Army has the largest real property portfolio in the department. All branches of the Armed Forces are facing challenges with obtaining source documents, establishing value for properties, and assessing and reporting expected maintenance costs. The Air Force is focused on correcting its records for buildings, which account for more than 90% of its real property value, first addressing its building inventory at its most significant bases. The Navy has completed its physical inventory and corrected its records. Initial results showed a 99.7% accuracy rate. The Marine Corps has undertaken a process of accurately counting and recording its physical inventory. The Armed Forces will be unable to obtain a clean audit opinion without determining the value of their real property and other assets. Inventory, Materials, and Supplies DOD manages inventory and other property at over 100,000 facilities located in more than 5,000 different locations. The military services and DOD components report inventory ownership on their financial statements, but this inventory can be in the custody of or managed by the military service or another DOD component. For example, as of FY2017 year end, the military services reported that the Defense Logistics Agency held approximately 46% of the Army's inventory, 39% of the Navy's inventory, and 45% of the Air Force's inventory, ranging from clothes to spare parts to engines. Given the vast geographic dispersion of DOD resources and the complexity of how they are managed, the system of records and physical inventory must agree with each other for DOD leadership to have an accurate understanding of available resources. GAO highlighted a few examples in its latest high-risk series: The Army found 39 Blackhawk helicopters that were not recorded in the property system; 107 Blackhawk rotor blades could not be used but were still in the inventory records; 20 fuel injector assemblies for Blackhawk helicopters did not have documentation to indicate ownership by any specific military service; and 24 gyro electronics for military aircraft that should not be used were still in the inventory records. Accurate inventory, materials, and supplies help DOD avoid purchasing materials it does not need and help ensure that the right parts, supplies, and other inventory are available to support mission readiness. Ensuring that parts, supplies, and inventory are usable not only helps with mission readiness but also helps avoid unnecessary warehousing costs. Many of the parts, supplies, and inventory are unique to DOD and require long lead times to contract and manufacture. An accurate physical count and system of records could help shorten the time before items are available for the warfighter. Government Property in the Possession of Contractors At times, DOD might provide contractors with property for use on a contract, such as tooling, test equipment, items to be repaired, and spare parts held as inventory. The government-provided property and contractor-acquired property should be recorded in DOD's property system, and at the end of the contract, it might be disposed of, consumed, modified, or returned to DOD. The auditors report that the DOD property system should be able to accurately distinguish DOD property ownership and possession between DOD and the contractor. For DOD to receive a clean audit opinion, it should consider requiring its contractors to maintain and provide auditors with accurate records. Transferring property from DOD to contractors, and from contractors to DOD, requires an accurate real-time system of record keeping. Audit Costs Total DOD audit-related costs for FY2018, including the cost of remediating audit findings, supporting the audits and responding to auditor requests, and achieving an auditable systems environment, were $973 million (see Table 4 ). DOD predicts that audit-related costs will remain relatively consistent for a few more years until more components begin to achieve unmodified opinions. In addition to the issues previously discussed, there are three agency-level issues or approaches that contribute to DOD audit costs remaining relatively constant in the near term: more substantive testing, completion of audit procedures even for those components that are likely to receive a disclaimer of opinion, and expansion of DOD service provider examinations. While DOD's annual audit costs (i.e., excluding remediation costs) might remain close to FY2018 costs (nearly $413 million) or increase in the near term, the cost is expected to decrease after the first few years, as more components achieve a clean audit opinion. Eventually, DOD audit costs might increase as costs for travel and accounting increase with economic growth. Substantive Testing To reduce the risk of potential material misstatement without reliable internal controls, auditors seek other ways of validating financial information. Reliance on internal controls is not a pass-or-fail approach; rather, it is incremental. DOD received 20 agency-wide material weaknesses and 129 component-level material weaknesses in internal controls in the FY2018 audit; until those are resolved, DOD auditors must rely on substantive testing, which will keep audit costs relatively high. There are two categories of substantive testing: Analytical P rocedures . Substantive testing through analytical procedures might include comparing current-year information with the prior year, examining trend lines, or reviewing various financial ratios. Because FY2018 was the first full financial audit of DOD and many systems of records are not reliable, auditors may have difficulty performing analytical procedures and must rely more on tests of details. Tests of Details. An auditor selects individual items for testing and applies detail procedures, such as verifying that invoiced items from a vendor match payments made by DOD, physically locating an inventory item that is recorded in DOD's financial systems, and verifying mathematical accuracy by recalculating certain records. Completion of Audit Procedures To gain a detailed understanding of the underlying issues that prevent DOD components from receiving clean audit opinions, the department has requested comprehensive completion of audit procedures even after auditors have determined components will receive disclaimers of opinion. While this approach might initially incur higher audit costs, in the long run it might enable DOD to resolve the component-specific issues more quickly and to gain a holistic perspective of system-wide issues. These benefits might help DOD lower its financial audit costs in the long run. Service Provider Examinations Some DOD organizations provide common information technology services to other organizations within DOD, such as the Defense Information Systems Agency's (DISA's) Automated Time Attendance and Production System. For FY2018, auditors completed 20 DOD service provider examinations; 14 resulted in unmodified opinions and 6 resulted in qualified opinions. See Table B-1 for more information, including auditors' opinions and the number of FY2018 NFRs issued. Service provider examinations assess whether information technology control activities were designed, implemented, and operated effectively to provide management reasonable assurance that control objectives function as designed or intended in all material respects. The procedures performed by the auditors for examinations are not meant to provide the same level of assurance as a full audit. These examinations' results can be used to reduce redundant testing of control by component-level auditors, saving time and money; see Table 1 for the list of audited DOD components. For FY2019, DOD expects to complete 23 common service provider examinations, compared to 20 in FY2018. The expanded service provider examinations for FY2019 might incrementally increase DOD audit costs over FY2018. Financial Audit Limitations and Benefits Since passing the CFO Act of 1990, Congress has continued to express interest in DOD completing an annual financial audit. Financial audits can help DOD increase transparency and accountability, improve business processes, and improve the visibility of assets and financial resources, but by design, audits are meant to accomplish a specific purpose, and therefore there are some inherent limitations on the benefits they can provide. Financial audits' limitations and benefits are discussed below. Limitations of Financial Audits A financial audit is a tool to help improve business processes and readiness on an annual basis. It does not address program effectiveness or efficiency, but it does consider whether an entity's assets, including its budget authority, are used to accomplish its programmatic purpose. To communicate the annual audit's benefits to Congress and other stakeholders, DOD may attempt to measure cost savings or business process improvements, but it may struggle to fully quantify the benefits, as many of the daily operational improvements are likely to be organic and informal. Only the most significant issues will be identified in auditors' reports. DOD will likely benefit from auditors' NFRs, as well as ongoing informal dialogue between auditors and DOD personnel. When an auditor identifies an issue, DOD could seek to address the issue immediately rather than wait for a written report. It is inefficient for auditors or DOD to capture and write a report on all issues, large and small. In the private sector, generally, only critical audit matters that involve especially challenging or complex auditor judgments are included in audit reports. Many other issues are addressed in the normal course of business. Reporting or recording every instance of savings or process improvement based on auditors' informal feedback arguably detracts from the audit's purpose. Allowing a degree of flexibility to identify and report the cost savings and process improvements that DOD determines are the most significant may help the department focus effectively on responding to audit findings. Independent audit opinions do not fully guarantee that financial statements are presented fairly in all material respects, but provide reasonable assurance for the following reasons: Auditors use statistical methods for random sampling and look at only a fraction of economic events or documents during an audit. It is cost- and time-prohibitive to recreate all economic events. Some line items on financial statements involve subjective decisions or a degree of uncertainty as a result of using estimates. Audit procedures cannot eliminate potential fraud, though an auditor may identify fraud. Financial audits are not specifically designed to detect fraud, but an auditor assesses the potential for fraud, including evaluating internal controls designed by management to prevent and identify potential fraud, waste, and abuse. Auditors are required to consider whether financial statements could be misstated as a result of fraud. Effective internal controls could prevent or mitigate risks for fraudulent financial reporting, misappropriation of assets, bribery, and other illegal acts. Fraud risk factors do not necessarily indicate fraud exists, but risk factors often exist when fraud occurs. In a few years, if DOD has improved its current business practices, future improvements might be less significant and more incremental. Even so, annual audits could potentially be a valuable tool to help DOD continue to improve its business processes. Benefits of an Annual Financial Audit The annual audit gives Congress an independent opinion on DOD's financial systems and business processes. It provides a way for DOD to continue to improve its performance and highlights areas that need to be fixed. DOD has identified four categories of how the annual audit improves its operations, along with some examples: Increases Transparency and Accountability. Holds DOD accountable to Congress and the taxpayers that DOD takes spending taxpayer dollars seriously through efficient practices. Auditing DOD helps improve public confidence in DOD operations, similar to other Cabinet-level agencies that conduct an annual financial audit. Streamlines Business Processes. Audits help reduce component silos and help leadership better understand interdependencies within DOD. The department might be able to improve its buying power and reduce costs, as well as improve operational efficiencies. Improves Visibility of Assets and Financial Resources. More accurate data could enhance DOD readiness and decisionmaking. Getting the appropriate supplies to warfighters helps improve their fighting posture. If a service does not know whether it has enough spare parts to ensure that aircraft are able to fly, it may spend significant amounts of money to get spare parts quickly to meet operational requirements. Accurate cost information related to assets, such as inventory and property, can help DOD make more informed decisions on repair costs and future purchases. Strengthens Internal Controls. Strengthened internal controls help minimize fraud, waste, and abuse. In addition, they help improve DOD's cybersecurity and enhance national security. In addition to the previously described identification of Blackhawk helicopters and parts, DOD is starting to see gains by eliminating recurring annual costs. For example, strengthening internal controls to improve operations at the U.S. Pacific Fleet has freed up purchasing power to fund $4.4 million in additional ship repair costs. Also, the Army has implemented a materiality-based physical inventory best practice to count assets at Army depots. The Army estimates this process improvement could help avoid approximately $10 million in future costs. Conclusion Since passing the CFO Act of 1990, which required 24 agencies to conduct an agency-wide annual financial audit, Congress has continued to express interest in DOD completing an annual audit. DOD completed its first agency-wide audit in FY2018 and a subsequent audit in FY2019. Both audits resulted in a disclaimer of o pinion . The ongoing independent assessment of DOD's financial systems, arguably, provides Congress and DOD leadership with an independent third-party assessment of DOD's financial and business operations. Reliable systems that produce auditable financial information, including an accurate count and valuation of real estate and inventory, could help Congress provide better oversight and ultimately determine how funds appropriated for DOD should be spent in support of the NDS. Further, the annual financial audit of DOD by independent auditors might provide DOD with a competitive advantage when compared to other countries' defense agencies. In many other countries, financial informationâincluding a financial audit of defense agenciesâis nonexistent or opaque at best and not readily available to legislators or citizens. Many of DOD's financial management systems are also used for operational purposes. Testing of the financial management systems and other systems that interface with each other as part of the annual audit process can help identify and improve cybersecurity vulnerabilities and the conduct of military operations. DOD's efforts to fix its vulnerabilities and reduce wasteful practices, arguably, could enable it to respond to future threats more effectively. The implementation of new ERP systems and the complexity of auditing DOD might result in DOD not achieving a clean audit opinion within the next decade. Without each of the Armed Forces receiving a clean audit opinion, DOD will not be able to receive an agency-wide clean audit opinion even if all other DOD components receive a clean audit opinion. Appendix A. DOD Agency-Wide Material Weaknesses Weaknesses and inefficiencies in internal controls are classified based on severity. Auditors identified 20 material weaknesses at DOD (see Table A-1 ) related to internal controls that range from issues with financial management systems to inventory management. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting that results in a reasonable possibility that management will not prevent, or detect and correct, a material misstatement in the financial statements in a timely manner. In addition to material weaknesses, the auditors issue two types of deficienciesâa significant deficiency or a control deficiency â that are less severe than a material weakness, but a combination or multiple instances of either deficiency can result in material weaknesses. A significant deficiency is a deficiency or a combination of deficiencies that are less severe than a material weakness, but important enough to merit management's attention. A control deficiency is a noted weakness or deficiency that auditors typically bring to management's attention, but that does not have an impact on the financial statement unless a combination of them results in a material weakness. Improvements in either type of deficiency could improve the business process and help prevent waste, abuse, and fraud. Appendix B. Common Service Providers Some organizations within DOD provide common information technology services to other organizations at DOD. These organizations report to higher-level organizations. For FY2018, auditors completed 20 DOD service provider examinationsâ14 resulted in unmodified opinions and 6 resulted in qualified opinions. See Table B-1 for more information, including auditors' opinions and the number of FY2018 NFRs issued. Service provider examinations provide a positive assurance as to whether information technology control activities were designed, implemented, and operate effectively to provide management reasonable assurance that control objectives function as designed or intended in all material respects. Examination procedures are limited in scope as compared to a financial audit. Component-level auditors can use these examinations' results to reduce redundant testing, saving time and money; see Table 1 for the list of audited DOD components. For FY2019, DOD expects to complete 23 common service provider examinations. Summary:	null	96	42,496	42,498	42,498	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Overview The Chief Financial Officers Act of 1990 (CFO Act) requires annual financial audits of federal agencies' financial statements to "assure the issuance of reliable financial information ... deter fraud, waste and abuse of Government resources ... [and assist] the executive branch ... and Congress in the financing, management, and evaluation of Federal programs." Agency inspectors general (IGs) are responsible for the audits and may contract with one or more external auditors. The Department of Defense (DOD) completed its first agency-wide financial audit in FY2018 and recently completed its FY2019 audit. Comprehensive data for the FY2019 audit are not currently available. Therefore, this report focuses on DOD's FY2018 audit. Congressional interest in DOD's audits is particularly acute because DOD accounts for about half of federal discretionary expenditures and 15% of total federal expenditures. The Department of Defense Inspector General (DOD IG) contracted with nine Independent Public Accounting firms (IPAs) to conduct the FY2018 and FY2019 audit. The IPAs conducted 24 separate audits within DOD (see Table 1 for each of the component-level audit opinions). In both FY2018 and FY2019 audits, the DOD IG issued the overall agency-wide opinion of disclaimer of o pinion âmeaning auditors could not express an opinion on the financial statements because the financial information was not sufficiently reliable. DOD components that received a disclaimer of opinion represent approximately 56% of the reported DOD assets and 90% of the reported DOD budgetary resources. DOD expected to receive a disclaimer of opinion for FY2018 and FY2019. The department has stated it could take a decade to receive an u nmodified (clean) audit opinion. The federal government as a whole is unable to receive a clean opinion on its financial report because agencies with significant assets and budgetary costs, such as DOD, the Department of Housing and Urban Development, and the Railroad Retirement Board, have each received a disclaimer of opinion in recent years. The federal government as a whole potentially could receive a clean audit opinion without all government agencies receiving a clean audit opinion; however, the size of the DOD budgetâ$708 billion in FY2019âprevents an overall clean opinion without DOD receiving a clean audit opinion. DOD employs 2.9 million military and civilian employees at approximately 4,800 DOD sites in 160 countries. DOD IG personnel and auditors from IPAs visited over 600 sites, sent over 40,000 requests for documentation, and tested over 90,000 sample items. DOD spent $413 million to conduct the FY2018 audit: $192 million on audit fees for the IPAs and $221 million on government costs to support the audit. DOD spent an additional $406 million on audit remediation and $153 million on financial system fixes. What Is a Financial Audit? Financial statements are the primary way for an entity to communicate its financial performance to its stakeholders. How each line item on a financial statement (e.g., property) should be valued and reported is based on Generally Accepted Accounting Principles (GAAP), an agreement among practitioners (i.e., accountants, auditors, and regulators). In a financial audit, a private or public entity hires an independent auditor to provide reasonable assurance to all stakeholders that its financial statements are free of material misstatement, whether caused by error or fraud. Auditors form opinions by examining the types of risks an organization might face and the controls in place to mitigate those risks. Auditors give unbiased professional opinions on whether financial statements and related disclosures are fairly stated in all material respects for a given period of time in accordance with GAAP. As mentioned previously, the CFO Act requires federal agencies' financial statements to be audited annually. The CFO Act assigns responsibility for audits to agency inspectors general (IGs), but an IG may contract with one or more external auditors to perform an audit. The annual audit can inform Congress and the agency about its business processes and areas for improvement. An audit of DOD can provide benefits, such as (1) effective and efficient internal operations that can lead to reducing costs and improving operational readiness; (2) improved allocation of assets and financial resources that can enhance DOD's decisionmaking and ability to support the Armed Forces; and (3) improved compliance with statutes and financial regulations. For each line item on a financial statement and notes to the financial statement, an auditor will examine a sample of the underlying economic events to determine the reported information's accuracy. The Federal Accounting Standards Advisory Board (FASAB) promulgates financial reporting and accounting standards for federal government entities, and GAO establishes federal auditing standards, including for federal grant recipients in state and local governments. GAO issues the Generally Accepted Government Auditing Standards (GAGAS), also commonly known as the Yellow Book , to provide a framework for conducting federal government audits. The Yellow Book requires auditors to consider the visibility and sensitivity of government programs in determining the materiality threshold. Similar to requirements in the private sector, GAGAS requires federal financial reporting to disclose compliance with laws, regulations, contracts, and grant agreements that have a material effect on financial statements. Before auditors examine an entity's financial statement, they first evaluate its Enterprise Resource Planning (ERP) systems' (information technology systems') access control and reliability, as well as internal controls. ERP refers to an enterprise-wide information system used to manage and coordinate all of an entity's resources, information, and functions from shared data stores, including financial information. Auditing ERP systems is a critical aspect of evaluating an entity's internal controls. Internal Control in the Federal Government Internal control is a series of integrated actions that management uses to guide an entity's operations. Under GAO standards, effective internal controls should require management to use dynamic, integrated, and responsive judgment rather than rigidly adhering to past policies and procedures. The success or failure of an entity's internal controls depends on its personnel. Management is responsible for designing effective internal controls, but implementation depends on all personnel understanding, implementing, and operating an effective internal control system. Federal agencies have been required to report to Congress on internal controls since the Federal Managers' Financial Integrity Act of 1982. In addition, the Federal Financial Management Improvement Act of 1996 requires agencies to report to Congress on the effectiveness of internal control over financial management systems. GAO's Standards for Internal Control in the Federal Government (also known as the Green Book ) provides the overall framework for designing, implementing, and operating an effective internal control system. An audit of an entity's internal controls includes computer systems at the entity-wide, system, and application levels. GAGAS recommends using specific frameworks for internal control policies and procedures, including certain evaluation tools created specifically for federal government entities. Office of Management and Budget (OMB) Circular No. A123, Management's Responsibility for Enterprise Risk Management and Internal Control , provides additional guidance. The federal government's internal control framework is based on the framework created by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), which is widely used in the private sector. The COSO framework is dedicated to improving organizational performance and governance through effective internal control, enterprise risk management, and fraud deterrence. The COSO framework, depicted in Figure 1 , was created to help practitioners assess internal controls not as an isolated issue, but rather as an integrated framework for how internal controls work together across an organization to help achieve objectives as determined by management. It represents the integrated perspective recommended by COSO for practitioners who are creating and assessing internal controls. The cube may be best understood by examining each set of components separately: Categories of objectives. Operations, Reporting, and Compliance are represented by the columns. The objectives are designed to help an organization focus on different aspects of internal controls to help management achieve its objectives. Components of internal control. Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring Activities are represented by the rows. The components represent what is required to achieve the three objectives. Levels of organizational structure. Entity-Level, Division, Operating Unit, and Function are represented by the third dimension. For an organization to achieve its objectives, according to COSO, internal control must be effective and integrated across all organizational levels. Internal Control at DOD Internal controls can help DOD leadership achieve desired financial results through effective stewardship of public resources. Effective internal controls can increase the likelihood that DOD achieves its financial objectives, including getting a clean (i.e., unmodified) audit opinion. Properly designed internal controls can help reduce the amount of detail an auditor will examine, including the number of samples examined. Good internal controls could reduce the amount of time required to conduct an audit, thus reducing its cost. At DOD, auditors identified 20 agency-wide internal control material weaknesses and 129 DOD component-level material weaknesses that range from issues with financial management systems to inventory management. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting that results in a reasonable possibility that management will not prevent, or detect and correct, a material misstatement in the financial statements in a timely manner. Many of these material weaknesses are discussed later in this report under " Issues for Congress ." Properly designed internal controls can also serve as the first line of defense in safeguarding assets. Internal controls help private and public entities achieve objectives, such as enterprise risk management, fraud deterrence, and sustained and improved performance, by designing processes that control risk. The DOD IG identified multiple DOD components that do not have sufficient entity-level internal controls . The lack of entity-level internal controls directly contributed to an increased risk of material misstatements on the components' financial statements and the agency-wide financial statements. Until DOD resolves the many issues surrounding internal controls and establishes a better record-keeping system, it might be difficult for auditors to identify other material weaknesses that could prevent DOD from receiving a clean audit opinion. When the current set of internal control issues is resolved, and auditors are better able to analyze DOD records, they might discover additional issues, including new material weaknesses, that need to be resolvedâa cascading effectâbefore DOD receives a clean audit opinion. This cycle might repeat a few times. FY2018 Audit Results The DOD auditors issued 2,377 notices of findings and recommendations (NFRs) that resulted in 20 agency-wide material weaknesses and 129 DOD component-level material weaknesses. Appendix A provides an overview of the 20 agency-wide material weaknesses. An auditor creates an NFR to capture issues that require corrective action. DOD then creates a corrective action plan (CAP) to address one or more NFRs. The NFR is later retested, and if the CAP sufficiently addresses the NFR, the auditor is to validate that the issue has been resolved. As of June 2019, the majority of NFRs were related to three critical areas: approximately 48% were related to financial management systems and information technology; 30% were related to financial reporting and DOD's fund balance with Treasury; and 16% were related to property. Although the overall number of NFRs increased slightly between December 2018 and June 2019, the number has decreased significantly in certain categories (see Table 2 , Other column). The increase in NFRs in certain categories is an expected result of the audit process. As auditors learn more about DOD and how it functions, they may continue to identify new NFRs, while DOD continues to address some of the previously identified NFRs. The Office of the Under Secretary of Defense (Comptroller) has established an audit NFR database. DOD uses the database to consolidate and track the status of all auditor-issued NFRs and prioritize and link them to CAPs. The NFR and CAP component-based metrics are reported and reviewed monthly in the National Defense Strategy meeting with the Deputy Secretary of Defense and Military Service financial management leadership teams. The military service branchesâArmy, Navy, Marine Corps, and Air Forceâaccount for over 60% of NFRs identified in the FY2018 audit (see Table 3 ). For DOD to receive a clean audit opinion, civilian leadership and uniformed Armed Forces personnel may need to improve collaboration. According to DOD, it is prioritizing CAPs that align with the National Defense Strategy and provide the greatest potential value to DOD operations and the warfighter. DOD has established actionable financial statement audit priorities at many levels within the department, including at the command level. Those FY2019 priorities include the following: Real Property; Government Property in the Possession of Contractors; Inventory, and Operating Materials and supplies; and Access Controls for IT Systems. Given the complexity of DOD operations, auditors began their work for the FY2019 financial audit in late 2018. Comprehensive data for the FY2019 audit are not currently available. However, the auditors issued an overall agency-wide disclaimer of opinion for FY2019. Most financial statement audits stop as soon as the auditor determines the reporting entity is not auditable. DOD, however, has asked the auditors to continue such audits to identify as many problems as possible, with the goals of identifying systemic issues and making faster progress toward business reform. Issues for Congress Although the CFO Act required annual audits of federal agencies' financial statements, DOD did not complete an agency-wide audit until 2018â28 years later. One of DOD's strategic goals is to reform its business practices for greater performance and affordability. According to DOD, the annual audit process helps it reform its business practices consistent with the National Defense Strategy (NDS): The financial statement annual audit regimen is foundational to reforming the Department's business practices and consistent with the National Defense Strategy. Data from the audits is driving the Department's strategy, goals, and priorities and enabling leaders to focus on areas that yield the most value to the warfighter. The audits are already proving invaluable and have the potential to support long-term, sustainable reform that could lead to efficiencies, better buying power, and increased public confidence in DoD's stewardship of funds. Continued congressional oversight of DOD's plan to achieve a clean audit opinion could help DOD achieve a clean audit opinion. As more components receive a clean audit opinion, audit costs might eventually decrease. For FY2018, DOD incurred nearly $1 billion in total audit costs, which was less than 0.25% of DOD's FY2018 budget. Although the cost of an audit is a consideration, the more impactful benefits from an annual financial audit, arguably, are the changes in DOD business practices that directly impact the NDS while increasing transparency. The audits identified three critical areas of improvement that are consistent with the NDS: (1) financial management systems and information technology (IT), (2) financial reporting and fund balance with Treasury, and (3) property (real property, inventory, and supplies, and government property in the possession of contractors). Addressing the issues in these critical areas not only could help DOD improve its business practices, but it might also help resolve many of the NFRs, which could enable some audit components to receive clean audit opinions in the next few years instead of in another decade or more. Financial Management Systems and Information Technology According to DOD, its financial management systems and information technology provide a broad range of functionality to support agency financial management, supply chain management, logistics, and human resource management. Reliable systems are mission critical to DOD meeting its NDS and supporting the warfighter. Also, DOD is required to comply with laws and regulations, such as the Federal Managers' Financial Integrity Act of 1982, the Federal Financial Management Improvement Act of 1996, and OMB Circular A-123. These laws and regulations collectively require DOD to maintain a system of internal controls that can produce reliable operational and financial information. The challenges DOD faces in financial management systems and information technology are twofold and compromise nearly half of all NFRs (see Table 2 or Table 3 ). First, DOD's initiatives to address the issues related to access controls for IT systems are partially implemented. A fully implemented plan to address access control issues would potentially restrict access rights to appropriate personnel, monitor user activity, and safeguard sensitive data from unauthorized access and misuse. As part of its corrective action plan, DOD is requiring financial system owners and owners of business systems that contribute financial information to review and limit access only to those who need it and only to the specific areas within the systems that they need to access. DOD has developed security controls and standardized test plans that align with the Federal Information Systems Control Audit Manual methodology used to test systems during an audit. Further, DOD management has directed components without a proper software maintenance policy to establish a baseline policy for those software systems and maintain a record of all software system changes. In addition to requiring components to develop reports on privileged users and transactions, including privileged user activities, the department has directed components to periodically review user access rights and remove unauthorized users. Second, the number and variety of financial systems complicate DOD's financial statement audits. In 2016, DOD reported more than 400 separate information technology systems were used to process accounting information to support DOD's financial statements. Many of these legacy systems were designed and implemented to support a particular function, such as human resource management, property management, or logistics management, and were not designed for financial statement reporting. These systems include newer ERP systems and custom-built legacy systems, financial systems, and nonfinancial feeder systems. Also, aging systems and technology that predate modern data standards and laws, as well as nonaccounting feeder systems, affect data exchange with modern ERPs to facilitate auditable financial reports. DOD's IT modernization program is investing in ERPs and aims to migrate 51 legacy systems to core modern ERPs by the end of 2023. How the remediation plans evolve and how they are implemented as DOD migrates to the new ERPs could be a significant determiner of DOD's ability to address nearly half of the NFRs. Financial Reporting and Fund Balance with Treasury According to DOD's auditors, its policies and procedures for compiling and reporting financial statements are not sufficient to identify, detect, and correct inaccurate and incomplete balances in the general ledger. Without an adequate process to identify and correct potential misstatements in the general ledger, balances reported on financial statements, accompanying footnotes, and related disclosures may not be reliable or useful for decisionmaking for Congress, including appropriating the DOD budget. The lack of accurate numbers, arguably, also presents challenges for DOD leadership in making agency financial decisions. DOD's assets increased by nearly $200 billion in FY2018 over FY2017. Fund Balance with Treasury, one of the assets, increased by $78.6 billion. According to DOD, the increase in Fund Balance with Treasury resulted from additional appropriations received in FY2018. DOD is unable to effectively track and reconcile collection and disbursements activity from its financial systems, which resulted in DOD being unable to reconcile its general ledger and Treasury accounts. The fund balance with the Treasury Department is an asset account reported on DOD's general ledger, which shows a DOD component's available budget authority. Similar to a personal checking account, the fund's balance increases and decreases with collections and disbursements of new appropriations and other funding sources. Each DOD component should be able to perform a detailed monthly reconciliation that identifies all the differences between its records and Treasury's records. The reconciliations are essential to supporting the budget authority and outlays reported on the financial statements. The auditors identified several deficiencies in the design and operation of internal controls for fund balance with the Treasury that resulted in DOD-wide material weakness. DOD has undertaken business process improvements to streamline reporting, reduce differences to an insignificant amount, and support account reconciliations. Property and Inventory The auditors report that DOD faces challenges with properly recording, valuing, and identifying the physical location of real property, inventory, and government property that is in the possession of contractors. DOD's challenges with property and inventory complicate Congress's ability to perform effective oversight and budget appropriations. Without accurate real estate counts and values, DOD will continue to face challenges in meeting the National Strategy for Efficient Use of Real Property. DOD faces similar issues with inventory. It is unable to provide assurance that inventory recorded in the financial statements exists and is valued properly. Without accurate inventory counts, DOD might not be able to support its missions without incurring additional costs. Some appropriated funds could be used to purchase extraneous inventory that DOD might already have on hand, or DOD might rely on inventory that appears in an inaccurate count but does not actually exist. Real Property The auditors report that DOD is unable to accurately account for all of its buildings and structures. This includes houses, warehouses, vehicle maintenance shops, aircraft hangars, and medical treatment facilities, among others. As an example, during the FY2018 audit, the Air Force identified 478 buildings and structures at 12 installations that were not in the real property system. DOD faces issues with demonstrating the right of occupancy or ownership through supporting documentation and with incomplete or out-of-date systems of record. Accurate property records, valuation, and right of ownership could potentially help inform DOD leadership as it considers any future base realignment and closure. According to DOD, military departments are executing real property physical inventories to reconcile with the systems of record. The Army has the largest real property portfolio in the department. All branches of the Armed Forces are facing challenges with obtaining source documents, establishing value for properties, and assessing and reporting expected maintenance costs. The Air Force is focused on correcting its records for buildings, which account for more than 90% of its real property value, first addressing its building inventory at its most significant bases. The Navy has completed its physical inventory and corrected its records. Initial results showed a 99.7% accuracy rate. The Marine Corps has undertaken a process of accurately counting and recording its physical inventory. The Armed Forces will be unable to obtain a clean audit opinion without determining the value of their real property and other assets. Inventory, Materials, and Supplies DOD manages inventory and other property at over 100,000 facilities located in more than 5,000 different locations. The military services and DOD components report inventory ownership on their financial statements, but this inventory can be in the custody of or managed by the military service or another DOD component. For example, as of FY2017 year end, the military services reported that the Defense Logistics Agency held approximately 46% of the Army's inventory, 39% of the Navy's inventory, and 45% of the Air Force's inventory, ranging from clothes to spare parts to engines. Given the vast geographic dispersion of DOD resources and the complexity of how they are managed, the system of records and physical inventory must agree with each other for DOD leadership to have an accurate understanding of available resources. GAO highlighted a few examples in its latest high-risk series: The Army found 39 Blackhawk helicopters that were not recorded in the property system; 107 Blackhawk rotor blades could not be used but were still in the inventory records; 20 fuel injector assemblies for Blackhawk helicopters did not have documentation to indicate ownership by any specific military service; and 24 gyro electronics for military aircraft that should not be used were still in the inventory records. Accurate inventory, materials, and supplies help DOD avoid purchasing materials it does not need and help ensure that the right parts, supplies, and other inventory are available to support mission readiness. Ensuring that parts, supplies, and inventory are usable not only helps with mission readiness but also helps avoid unnecessary warehousing costs. Many of the parts, supplies, and inventory are unique to DOD and require long lead times to contract and manufacture. An accurate physical count and system of records could help shorten the time before items are available for the warfighter. Government Property in the Possession of Contractors At times, DOD might provide contractors with property for use on a contract, such as tooling, test equipment, items to be repaired, and spare parts held as inventory. The government-provided property and contractor-acquired property should be recorded in DOD's property system, and at the end of the contract, it might be disposed of, consumed, modified, or returned to DOD. The auditors report that the DOD property system should be able to accurately distinguish DOD property ownership and possession between DOD and the contractor. For DOD to receive a clean audit opinion, it should consider requiring its contractors to maintain and provide auditors with accurate records. Transferring property from DOD to contractors, and from contractors to DOD, requires an accurate real-time system of record keeping. Audit Costs Total DOD audit-related costs for FY2018, including the cost of remediating audit findings, supporting the audits and responding to auditor requests, and achieving an auditable systems environment, were $973 million (see Table 4 ). DOD predicts that audit-related costs will remain relatively consistent for a few more years until more components begin to achieve unmodified opinions. In addition to the issues previously discussed, there are three agency-level issues or approaches that contribute to DOD audit costs remaining relatively constant in the near term: more substantive testing, completion of audit procedures even for those components that are likely to receive a disclaimer of opinion, and expansion of DOD service provider examinations. While DOD's annual audit costs (i.e., excluding remediation costs) might remain close to FY2018 costs (nearly $413 million) or increase in the near term, the cost is expected to decrease after the first few years, as more components achieve a clean audit opinion. Eventually, DOD audit costs might increase as costs for travel and accounting increase with economic growth. Substantive Testing To reduce the risk of potential material misstatement without reliable internal controls, auditors seek other ways of validating financial information. Reliance on internal controls is not a pass-or-fail approach; rather, it is incremental. DOD received 20 agency-wide material weaknesses and 129 component-level material weaknesses in internal controls in the FY2018 audit; until those are resolved, DOD auditors must rely on substantive testing, which will keep audit costs relatively high. There are two categories of substantive testing: Analytical P rocedures . Substantive testing through analytical procedures might include comparing current-year information with the prior year, examining trend lines, or reviewing various financial ratios. Because FY2018 was the first full financial audit of DOD and many systems of records are not reliable, auditors may have difficulty performing analytical procedures and must rely more on tests of details. Tests of Details. An auditor selects individual items for testing and applies detail procedures, such as verifying that invoiced items from a vendor match payments made by DOD, physically locating an inventory item that is recorded in DOD's financial systems, and verifying mathematical accuracy by recalculating certain records. Completion of Audit Procedures To gain a detailed understanding of the underlying issues that prevent DOD components from receiving clean audit opinions, the department has requested comprehensive completion of audit procedures even after auditors have determined components will receive disclaimers of opinion. While this approach might initially incur higher audit costs, in the long run it might enable DOD to resolve the component-specific issues more quickly and to gain a holistic perspective of system-wide issues. These benefits might help DOD lower its financial audit costs in the long run. Service Provider Examinations Some DOD organizations provide common information technology services to other organizations within DOD, such as the Defense Information Systems Agency's (DISA's) Automated Time Attendance and Production System. For FY2018, auditors completed 20 DOD service provider examinations; 14 resulted in unmodified opinions and 6 resulted in qualified opinions. See Table B-1 for more information, including auditors' opinions and the number of FY2018 NFRs issued. Service provider examinations assess whether information technology control activities were designed, implemented, and operated effectively to provide management reasonable assurance that control objectives function as designed or intended in all material respects. The procedures performed by the auditors for examinations are not meant to provide the same level of assurance as a full audit. These examinations' results can be used to reduce redundant testing of control by component-level auditors, saving time and money; see Table 1 for the list of audited DOD components. For FY2019, DOD expects to complete 23 common service provider examinations, compared to 20 in FY2018. The expanded service provider examinations for FY2019 might incrementally increase DOD audit costs over FY2018. Financial Audit Limitations and Benefits Since passing the CFO Act of 1990, Congress has continued to express interest in DOD completing an annual financial audit. Financial audits can help DOD increase transparency and accountability, improve business processes, and improve the visibility of assets and financial resources, but by design, audits are meant to accomplish a specific purpose, and therefore there are some inherent limitations on the benefits they can provide. Financial audits' limitations and benefits are discussed below. Limitations of Financial Audits A financial audit is a tool to help improve business processes and readiness on an annual basis. It does not address program effectiveness or efficiency, but it does consider whether an entity's assets, including its budget authority, are used to accomplish its programmatic purpose. To communicate the annual audit's benefits to Congress and other stakeholders, DOD may attempt to measure cost savings or business process improvements, but it may struggle to fully quantify the benefits, as many of the daily operational improvements are likely to be organic and informal. Only the most significant issues will be identified in auditors' reports. DOD will likely benefit from auditors' NFRs, as well as ongoing informal dialogue between auditors and DOD personnel. When an auditor identifies an issue, DOD could seek to address the issue immediately rather than wait for a written report. It is inefficient for auditors or DOD to capture and write a report on all issues, large and small. In the private sector, generally, only critical audit matters that involve especially challenging or complex auditor judgments are included in audit reports. Many other issues are addressed in the normal course of business. Reporting or recording every instance of savings or process improvement based on auditors' informal feedback arguably detracts from the audit's purpose. Allowing a degree of flexibility to identify and report the cost savings and process improvements that DOD determines are the most significant may help the department focus effectively on responding to audit findings. Independent audit opinions do not fully guarantee that financial statements are presented fairly in all material respects, but provide reasonable assurance for the following reasons: Auditors use statistical methods for random sampling and look at only a fraction of economic events or documents during an audit. It is cost- and time-prohibitive to recreate all economic events. Some line items on financial statements involve subjective decisions or a degree of uncertainty as a result of using estimates. Audit procedures cannot eliminate potential fraud, though an auditor may identify fraud. Financial audits are not specifically designed to detect fraud, but an auditor assesses the potential for fraud, including evaluating internal controls designed by management to prevent and identify potential fraud, waste, and abuse. Auditors are required to consider whether financial statements could be misstated as a result of fraud. Effective internal controls could prevent or mitigate risks for fraudulent financial reporting, misappropriation of assets, bribery, and other illegal acts. Fraud risk factors do not necessarily indicate fraud exists, but risk factors often exist when fraud occurs. In a few years, if DOD has improved its current business practices, future improvements might be less significant and more incremental. Even so, annual audits could potentially be a valuable tool to help DOD continue to improve its business processes. Benefits of an Annual Financial Audit The annual audit gives Congress an independent opinion on DOD's financial systems and business processes. It provides a way for DOD to continue to improve its performance and highlights areas that need to be fixed. DOD has identified four categories of how the annual audit improves its operations, along with some examples: Increases Transparency and Accountability. Holds DOD accountable to Congress and the taxpayers that DOD takes spending taxpayer dollars seriously through efficient practices. Auditing DOD helps improve public confidence in DOD operations, similar to other Cabinet-level agencies that conduct an annual financial audit. Streamlines Business Processes. Audits help reduce component silos and help leadership better understand interdependencies within DOD. The department might be able to improve its buying power and reduce costs, as well as improve operational efficiencies. Improves Visibility of Assets and Financial Resources. More accurate data could enhance DOD readiness and decisionmaking. Getting the appropriate supplies to warfighters helps improve their fighting posture. If a service does not know whether it has enough spare parts to ensure that aircraft are able to fly, it may spend significant amounts of money to get spare parts quickly to meet operational requirements. Accurate cost information related to assets, such as inventory and property, can help DOD make more informed decisions on repair costs and future purchases. Strengthens Internal Controls. Strengthened internal controls help minimize fraud, waste, and abuse. In addition, they help improve DOD's cybersecurity and enhance national security. In addition to the previously described identification of Blackhawk helicopters and parts, DOD is starting to see gains by eliminating recurring annual costs. For example, strengthening internal controls to improve operations at the U.S. Pacific Fleet has freed up purchasing power to fund $4.4 million in additional ship repair costs. Also, the Army has implemented a materiality-based physical inventory best practice to count assets at Army depots. The Army estimates this process improvement could help avoid approximately $10 million in future costs. Conclusion Since passing the CFO Act of 1990, which required 24 agencies to conduct an agency-wide annual financial audit, Congress has continued to express interest in DOD completing an annual audit. DOD completed its first agency-wide audit in FY2018 and a subsequent audit in FY2019. Both audits resulted in a disclaimer of o pinion . The ongoing independent assessment of DOD's financial systems, arguably, provides Congress and DOD leadership with an independent third-party assessment of DOD's financial and business operations. Reliable systems that produce auditable financial information, including an accurate count and valuation of real estate and inventory, could help Congress provide better oversight and ultimately determine how funds appropriated for DOD should be spent in support of the NDS. Further, the annual financial audit of DOD by independent auditors might provide DOD with a competitive advantage when compared to other countries' defense agencies. In many other countries, financial informationâincluding a financial audit of defense agenciesâis nonexistent or opaque at best and not readily available to legislators or citizens. Many of DOD's financial management systems are also used for operational purposes. Testing of the financial management systems and other systems that interface with each other as part of the annual audit process can help identify and improve cybersecurity vulnerabilities and the conduct of military operations. DOD's efforts to fix its vulnerabilities and reduce wasteful practices, arguably, could enable it to respond to future threats more effectively. The implementation of new ERP systems and the complexity of auditing DOD might result in DOD not achieving a clean audit opinion within the next decade. Without each of the Armed Forces receiving a clean audit opinion, DOD will not be able to receive an agency-wide clean audit opinion even if all other DOD components receive a clean audit opinion. Appendix A. DOD Agency-Wide Material Weaknesses Weaknesses and inefficiencies in internal controls are classified based on severity. Auditors identified 20 material weaknesses at DOD (see Table A-1 ) related to internal controls that range from issues with financial management systems to inventory management. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting that results in a reasonable possibility that management will not prevent, or detect and correct, a material misstatement in the financial statements in a timely manner. In addition to material weaknesses, the auditors issue two types of deficienciesâa significant deficiency or a control deficiency â that are less severe than a material weakness, but a combination or multiple instances of either deficiency can result in material weaknesses. A significant deficiency is a deficiency or a combination of deficiencies that are less severe than a material weakness, but important enough to merit management's attention. A control deficiency is a noted weakness or deficiency that auditors typically bring to management's attention, but that does not have an impact on the financial statement unless a combination of them results in a material weakness. Improvements in either type of deficiency could improve the business process and help prevent waste, abuse, and fraud. Appendix B. Common Service Providers Some organizations within DOD provide common information technology services to other organizations at DOD. These organizations report to higher-level organizations. For FY2018, auditors completed 20 DOD service provider examinationsâ14 resulted in unmodified opinions and 6 resulted in qualified opinions. See Table B-1 for more information, including auditors' opinions and the number of FY2018 NFRs issued. Service provider examinations provide a positive assurance as to whether information technology control activities were designed, implemented, and operate effectively to provide management reasonable assurance that control objectives function as designed or intended in all material respects. Examination procedures are limited in scope as compared to a financial audit. Component-level auditors can use these examinations' results to reduce redundant testing, saving time and money; see Table 1 for the list of audited DOD components. For FY2019, DOD expects to complete 23 common service provider examinations.	Summary:	gov_report	1,024	null	24
crs_R45973	crs_R45973_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Background Family reunification and the admission of immigrants with needed skills are two of the major principles underlying U.S. immigration policy. As a result, current law weights the allocation of immigrant visas heavily toward individuals with close family in the United States and, to a lesser extent, toward individuals who meet particular employment needs. The diversity immigrant category was added to the Immigration and Nationality Act (INA) by the Immigration Act of 1990 ( P.L. 101-649 ) to stimulate "new seed" immigration (i.e., to foster new, more varied migration from other parts of the world). Diversity visas are allocated to natives of countries from which the combination of immediate relatives, family preference, and employment preference immigrant admissions were lower than a total of 50,000 over the preceding five years combined. Legislative Origins The Immigration Amendments of 1965 replaced the national origins quota system, which prioritized European source countries, with equally distributed per-country ceilings. In the 1980s, some Members of Congress began expressing concern that U.S. legal immigration admissions were skewed in favor of immigrants from Asia and Latin America because of the 1965 amendments. The first legislative response to this concern occurred in Section 314 of the Immigration Reform and Control Act of 1986 (IRCA), which allowed an extra 5,000 immigrant visas per year for FY1987 and FY1988 to be distributed to natives of 36 countries that had been adversely affected by the 1965 changes to the INA. Over 1 million people applied for what was then called the NP-5 program, and visas were made available according to the chronological order in which qualified applications were mailed to the State Department (DOS). Natives of Ireland received the largest proportion (31%) of the NP-5 visas, followed by natives of Canada (21%) and Great Britain (11%). In 1988, Congress extended the NP-5 program for two more years and made 15,000 additional immigrant visas available each year in FY1989 and FY1990. What is now known as the diversity immigrant category was added to the INA by P.L. 101-649 and went fully into effect in FY1995. Section 132 of P.L. 101-649 provided 40,000 visas per year for a transitional program during FY1992-FY1994 for certain natives of foreign states that were adversely affected by the 1965 changes to the INA. At least 40% of these visas were earmarked for natives of Ireland. The current diversity visa category had an annual allocation of 55,000 visas when it went into effect in FY1995. While the diversity visa category has not been directly amended since its enactment, P.L. 105-100 , the Nicaraguan Adjustment and Central American Relief Act of 1997 (NACARA), temporarily decreased the 55,000 annual ceiling to 50,000. Beginning in FY2000, the 55,000 ceiling has been reduced by 5,000 annually to offset immigrant visas made available to certain unsuccessful asylum seekers from El Salvador, Guatemala, and formerly communist countries in Europe who are being granted immigrant status under special rules established by NACARA. The 5,000 offset is temporary, but it is not clear how many years it will be in effect to handle these adjustments of status. Eligibility Criteria and Application Process To be eligible for a diversity visa, the INA requires that a foreign national must have at least a high school education or the equivalent, or two years of experience in an occupation that requires at least two years of training or experience. The applicant or the applicant's spouse must be a native of one of the countries listed as a foreign state qualified for the DV program. Minor children of the qualifying diversity immigrant, as well as the spouse, may accompany as lawful permanent residents (LPRs) and are counted toward the 50,000 annual limit. Because the demand for diversity visas is much higher than the supply, a lottery is used to randomly select who may apply for one of the 50,000 diversity visas available annually. (See Figure 1 for an illustration of the process). There is no fee to enter the diversity lottery. Registration for the FY2020 diversity lottery began on October 3, 2018, and closed on November 6, 2018. Beginning on May 7, 2019, and continuing through September 30, 2020, those who registered can use an online system to find out if they had been selected. The FY2018 lottery had 14.7 million entries, representing over 23 million people (including family members). From the millions of entries, approximately 100,000 selectees are randomly chosen. Being chosen as a selectee ("lottery winner") does not guarantee receipt of a diversity visa; rather, it identifies those who are eligible to apply for one. To receive a visa, selectees must successfully complete the application process (including security and medical screenings and in-person interviews) by the end of the fiscal year for which they registered for the lottery or they lose their eligibility. DV applicants, like all other foreign nationals applying to come to the United States, must pay applicable fees and undergo reviews and biometric background checks performed by DOS consular officers abroad and Department of Homeland Security (DHS) immigration officers upon entry to the United States. Individuals selected for a diversity visa who are residing in the United States as nonimmigrants must undergo reviews by U.S. Citizenship and Immigration Services (USCIS) prior to adjusting to LPR status. These reviews, which include an in-person interview, are intended to ensure that the applicants are not inadmissible under the grounds spelled out in Section 212(a) of the INA. Grounds for inadmissibility include health, criminal history, security and terrorist concerns, public charge, illegal entry, and previous removal. Trends in Source Regions and Countries The diversity immigrant visa program currently makes 50,000 visas available annually to natives of countries from which immigrant admissions were lower than a total of 50,000 over the preceding five years. USCIS implements a formula for allocating visas according to statutory specifications: visas are divided among six global geographic regions, and each region and country is identified as either high admission or low admission based on how many immigrant visas each received over the previous five-year period. Higher proportions of diversity visas are allocated to low-admission regions and low-admission countries. Each country is limited to 7%, or 3,500, of the total, and the INA provides that Northern Ireland be treated as a separate foreign state. The distribution of diversity visas by global region of origin has shifted over time (see Figure 2 ). From FY1995 through FY2001, foreign nationals from Europe garnered a plurality of diversity visas, ranging from 38% to 47% of the total. In the early 2000s, the share of DV recipients from Africa was on par with those from Europe. Europe's share dropped by nine percentage points from FY2005 to FY2006 as the shares from African and Asian countries continued to increase. Since FY2008, Europe has accounted for smaller shares than Africa or Asia. Latin America (which includes South America, Mexico, Central America, and the Caribbean), Oceania, and North America accounted for less than 8% each year. In total, from FY1995 through FY2017 immigrants from Africa accounted for 40% of diversity immigrants, while Europeans accounted for 31% and Asians for 25%. These trends are consistent with the statutory formula Congress outlined to allocate diversity visas. Figure 3 presents the countries from which at least 1,000 DV immigrants were admitted in the first five years that the program was in full effect (FY1995-FY1999) and the most recent five years for which data are available (FY2013-FY2017). Early in the program, most of the top countries were in Europe (particularly Eastern Europe) and Africa. In more recent years, there has been a shift toward Africa and Asia. Certain countriesâsuch as Ethiopia, Ukraine, and Egyptârank high across many years of the program, while othersâsuch as Ireland, Poland, and Venezuelaâare limited to particular periods of time. From FY1995-FY2017, natives of six countries received at least 40,000 diversity visas in total: Ethiopia (67,832), Nigeria (58,563), Egypt (56,862), Ukraine (52,654), Albania (47,136), and Bangladesh (40,847). Characteristics of Diversity Immigrants Regions of Birth As one would expect, diversity immigrants come from different parts of the world that differ from the leading immigrant-sending regions. Department of Homeland Security data ( Figure 4 ) reveal that Africa accounted for 43% of diversity immigrants admitted in FY2017, but 11% of all LPRs admitted that fiscal year. Europeans made up 7% of all LPRs admitted in FY2017, but 22% of diversity immigrants. In contrast, Latin America (Mexico, Central America, the Caribbean, and South America) was the sending region for 43% of all LPRs admitted in FY2017, but provided 4% of the diversity immigrants during that fiscal year. North America (excluding Mexico) and Oceania account for a small percentage of LPRs admitted by any means. The distribution of LPR admissions and DV admissions from Asia illustrates the impact of the two-step visa allocation formula, which considers both regional and national admissions levels. Asia includes many top-sending countriesâsuch as China, India, and the Philippinesâfor family- and employment-based LPRs, making it a high-admission region. Yet it also includes low-admission countriesâsuch as Nepal, Iran, and Uzbekistanâthat rank high for their number of diversity visas. As a result, as Figure 4 illustrates, in FY2017 foreign nationals from Asia represented a somewhat more equivalent share of the 1.1 million LPRs (38%) in relation to their share (30%) of diversity LPRs in contrast to the other world regions. Age and Sex Diversity immigrants are, on average, younger than other LPRs. Department of Homeland Security data (see Figure 5 ) reveal that DV immigrants are more likely to be working-age adults and their children, and less likely to be over the age of 40 than LPRs overall. Also, the foreign-born population of the United States is more likely to be in the prime working-age group (i.e., ages 25 to 64) than the native-born population, and diversity immigrants have a younger age distribution than the foreign-born population as a whole. In addition, 56% of diversity immigrants in FY2017 were male compared to 46% of all LPRs. Marital Status Diversity immigrants were less likely to be married than LPRs generally (47% versus 58%) in FY2017, perhaps a function of their relative youth. Over half (52%) of diversity immigrants were single, in contrast to 36% of LPRs overall. Few of either group were likely to be widowed, divorced, or separated. Educational Attainment and Labor Market Characteristics Recent critics of the diversity immigrant visa have argued against the program on the grounds that individuals do not need high levels of education or work experience to qualify for the DV program and that the U.S. admissions system should prioritize "high-skilled" immigrants. Neither DHS nor DOS publish data on the educational attainment of DV immigrants, but other sources provide some information. According to now-dated data from the New Immigrant Survey, a widely cited, nationally representative, longitudinal study of individuals who obtained LPR status in 2003, those who entered as principals via the diversity visa category had, on average, 14.5 years of schooling when they entered the United States, which was higher than those who were admitted on family-based visas as spouses or siblings of U.S. citizens (13.0 and 11.5 years, respectively), but lower than those who were admitted as principal employment-based immigrants (15.6 years). Similarly, DV immigrants were more likely to be fluent in English than most family-based immigrants (except for immigrant spouses of native-born U.S. citizens), but less likely than employment-based immigrants to be fluent in English. Using the same data source, the Migration Policy Institute found that 50% of DV immigrants who entered in 2003 had a college degree (32% with a bachelor's and 18% with a graduate degree). It is likely that the educational attainment of recent DV immigrants is higher than it was for those represented in the New Immigrant Survey, given that more recently arrived immigrants have higher levels of education overall than their predecessors. Government data on other labor market characteristics of DV immigrants are also limited. According to the New Immigrant Survey, DV immigrants who entered in 2003 had higher initial unemployment rates than employment-based immigrants and those who immigrated as spouses of U.S. citizens, but lower unemployment rates than those who immigrated as siblings of U.S. citizens. Four to six years after U.S. entry, however, DV immigrants' unemployment rates had dropped significantly and were similar to those of all other groups except employment-based principals (who had the lowest rates at both initial entry and four to six years later). DV immigrants' hourly earnings were similarly situated between that of employment-based immigrant category (which had the highest earnings) and that of the sibling category (which had the lowest). Among male immigrants earning wages, those who entered on diversity visas had the highest percentage growth in real hourly wages between initial entry and re-sampling four to six years later. Impact of the DV Program on Immigrant Diversity Given its name and the discourse about "new seed" immigrants that preceded the creation of the diversity visa, the question arises whether the DV program has led to an increase in the diversity of immigrant flows to the United States. Leading up to and since its enactment, some observers have noted that, regardless of its name, the DV program was intended to benefit Irish and Italian constituents who had been negatively affected by the Immigration Act of 1965 that resulted in an increase in immigration from Asia and Latin America. During the transition period after the program was created (FY1992-FY1994), at least 40% of diversity visas were earmarked for Irish immigrants, and 92% of diversity visas in FY1994 went to Europeans. Since its full implementation in FY1995, however, immigrants from a wider range of countries and regions have entered via the program (see " Regions of Birth " above). The DV program's small size relative to total annual immigrant admissions (DV admissions make up about 5% of annual LPR admissions) limits its impact on the make-up of the immigrant population. Former Representative Bruce Morrison, who helped create the program, stated in a 2005 hearing that it was not Congress's intent to diversify the immigrant flow as a whole ("It could not have possibly done so at the 50,000 number"), but rather to add a new pathway for those who would not be able to enter under the family- or employment-based systems. By that standard, the program arguably fulfills its objectives, having admitted more than 1 million immigrants from under-represented countries since FY1995 (see Figure 3 ). Another way to assess the program's impact is to analyze the diversity of annual LPR flows before and after the DV program was established. Using a measure of diversity called the entropy index, CRS found that in FY1990, before the DV program was in effect, the diversity of LPR admissions was 0.52. In every year from FY1995 (when the DV program went into full effect) through FY2017 (the most recent data available), the diversity of annual LPR admissions was higher than in 1990, ranging from 0.67 to 0.72. In each of those years, the diversity of LPR admissions not including the DV admissions was lower than it was with DV admissions included (see the Appendix ), indicating that the admission of DV immigrants does increase the diversity of annual LPR admissions. A full analysis of the impacts of the DV program on admission numbers would also take into account individuals whom DV immigrants subsequently sponsor through the family-based admissions system. Because administrative data on immigrant admissions do not specify these linkages, this type of direct analysis is not currently possible. However, admissions data suggest that, at least for Africans, the DV has led to an increase in immigration via the family-based system (particularly immediate relatives). From 1992 to 2007, admissions of Africans based on family sponsorship grew faster than other categories of admissions for Africans, including diversity, which remained fairly stable over the time period. The DV seems to have diversified the African flow itself by boosting emigration from non-English speaking African countries (whereas English-speaking African countries have longer histories of U.S. immigration and are therefore more likely to be the source of sponsoring immigrant family members). Selected Legislative Action Legislation related to the Diversity Immigrant Visa has focused largely on eliminating the program. Bills to eliminate the diversity visa category have been introduced in nearly every Congress since the program was created and have passed one chamber on more than one occasion. Most recently, S. 744 in the 113 th Congress, a comprehensive immigration reform bill that the Senate passed in 2013 by a vote of 68 to 32, would have eliminated the program. Other bills introduced in the past would have raised the annual limit of diversity visas or temporarily re-allocated diversity visas for other purposes. In the 116 th Congress, several bills to eliminate the DV program have been introduced, including H.R. 479 , H.R. 2278 , S. 1103 , and S. 1632 . In contrast, H.R. 3799 would raise the annual diversity visa allocation to 80,000. Selected Policy Questions As Congress weighs whether to eliminate or revise the diversity visa category, it may want to consider various policy questions pertinent to this discussion. Is it fair to have the diversity visa category when there are family members and prospective employees who have been waiting for years for visas to become available? Given the 3.7 million approved family-based and employment-based petitions waiting for a visa to become available at the close of FY2018, some argue that the 50,000 diversity visas should be used for backlog reduction in these visa categories. Others might observe that the family-based, employment-based, and diversity visa categories are statutorily designed as independent pathways to LPR status and that the problems of the family-based and employment-based backlogs should be addressed separately. Some also argue that the DV program increases fairness in the immigration system by making visas available to individuals who would not otherwise have a chance of obtaining one and by discouraging illegal immigration through expanding access to the legal immigration system. Should the United States base admissions decisions on nationality? Some argue that the diversity visa program reverts to discriminatory national origin quotas, which Congress eliminated through the 1965 amendments to the Immigration and Nationality Act. However, there are other examples of admissions policies that effectively discriminate based on nationality (e.g., H-2A, H-2B, E, and TN nonimmigrant visas, the Visa Waiver Program, and the per country caps on family- and employment-based LPR admissions, all of which limit admissions by nationality). Some also argue that admissions decisions should be based on higher levels of education, job experience, and language skills, or family ties to U.S. residents, rather than country of origin and being selected at random via a lottery. In contrast, others argue that the program bolsters equity of opportunityâa quintessential American valueâby providing a pathway for individualsâparticularly those from Africa, Eastern Europe, and the former Soviet Unionâwho do not have family or employer connections in the United States. Some also argue that the more than one million immigrants who have moved to the United States as a result of the program have enriched the United States culturally and economically, and strengthened the nation's global connections. Some also argue that efforts to end it are racially motivated or point out that for most of U.S. history, Africans in particular had little opportunity to come to the United States other than as slaves. Is a lottery the best way to choose applicants for diversity visas? Some equate the use of a lottery system in the DV program to awarding "green cards" at random and argue that luck should not come into play in U.S. admissions decisions. Others argue that, given the millions of interested applicants every year, a lottery is a fair method of reducing the applicant pool because it gives all entrants who meet the program's qualifications an equal chance to apply for a diversity visa. They also cite the use of a lottery in other over-subscribed visa categories such as the H-1B and H-2B temporary worker classifications to illustrate that U.S. immigration policy considers it a reasonable tool. Is the diversity visa lottery more vulnerable to fraud and misuse than other immigration pathways? Some observers concerned about immigration fraud surrounding the DV program reference a 2003 State Department Office of Inspector General report and a 2007 GAO report which found fraud vulnerabilities in the DV program. They may also cite the 2017 and 2018 complaints filed by the Department of Justice (DOJ) in two cases seeking the denaturalization of individuals who had gained admission (in 1997 and 2001) to the United States through the DV program. In the first case, DOJ filed a complaint to denaturalize four Somali-born diversity visa recipients who falsely claimed to be a family. In the second case, DOJ filed a complaint to denaturalize a diversity visa recipient who obtained naturalization without having disclosed two prior orders of removal. Those defending the fraud protections of the DV program counter that DOS has since revised the diversity lottery procedures to address fraud vulnerabilities, including a requirement to submit a recent photograph, the addition of biographic and facial recognition checks to reduce duplicate entries, a policy requiring the disqualification of entrants who fail to list their spouse and children on their entries, and technical improvements to limit manipulation of entries by automated bots. They also argue that the risk of fraud is not unique to the DV program and refer to the numerous fraud investigations and arrests of immigrants who entered the United States via other visa categories and the significant resources that DOS commits to fraud prevention for all immigrant and nonimmigrant visa applications through its Fraud Prevention Units at posts overseas. In addition, on June 5, 2019, DOS published an interim final rule to require diversity visa entrants to provide certain information from a valid, unexpired passport on the electronic entry form. This rule is intended to make it more difficult for third parties to submit unauthorized entries, because third parties are less likely to have individuals' passport numbers. Are there national security reasons to eliminate the diversity visa? Some assert that the difficulties of performing background checks in many of the countries whose natives currently qualify for the DV program, as well as broader concerns about terrorism, justify the elimination of the category. Some cite the 2004 warning of the DOS Deputy Inspector General that the diversity visa lottery "contains significant vulnerabilities to national security" from state sponsors of terrorism. They argue that DV immigrants, by definition, are not required to have employer or family ties in the United States and thus may be more likely to have nefarious intent. They cite the case of a New Jersey resident responsible for killing eight people with his rental truck in lower Manhattan in 2017, who had immigrated to the United States from Uzbekistan on a diversity visa. In response to that event, the Trump Administration called on Congress to immediately terminate the diversity visa lottery program. Others respond that immigrants coming to the United States in other immigrant visa categories are not restricted if they come from these same countries, and further argue that background checks for national security risks are performed on all prospective immigrants seeking to come to the United States. They also point to the 2005 DOS Inspector General's testimony that DOS's Bureau of Consular Affairs strengthened the DV program by complying with most of the recommendations in the OIG's 2003 report. They similarly note the testimony of one of the creators of the DV Program who contended that "it is absurd to think that a lottery would be the vehicle of choice for terrorists" and that attention should instead be focused on greater security risks. They also point out that since the creation of the Visa Security Program in 2003, DHS has aided consular officers in extensively vetting individuals applying for visas. They also reference a 2007 GAO report stating: "We found no documented evidence that DV immigrants from these, or other, countries posed a terrorist or other threat. However, experts familiar with immigration fraud believe that some individuals, including terrorists and criminals, could use fraudulent means to enter or remain in the United States." Are there foreign policy reasons to continue the diversity visa program? Citing the millions of diversity visa lottery entries every year from around the world, some argue that the DV program is an efficient means of boosting American goodwill and "soft power" abroad, and that a diversity of immigrant origins helps the United States better respond to the challenges of globalization. Some also cite the value of remittances sent by diversity immigrants to their countries of origin as international development assistance without U.S. government expense. Others argue that the DV program encourages "brain drain" from developing countries, a concern which acknowledges that many DV immigrantsâparticularly from Africaâpossess education and skills beyond the minimum requirements for program eligibility. Are the reasons that led to establishment of the diversity visa (e.g., to stimulate "new seed" immigration) still germane? Supporters of the DV program argue that it honors the United States' history as a destination for enterprising immigrantsâthe "self-selected strivers" âwho arrive without family ties but with a desire to work hard for a better life. Some point to the present-day preponderance of immigrants from a handful of countries and argue that the diversity visa fosters new and more varied migration to counterbalance an admissions system weighted disproportionately to family-based immigration, which tends to perpetuate the dominance of certain countries. They also point to wide support for legislation that would remove or raise the 7% per-country limits on family- and employment-based immigrant admissions, which would likely result in further concentration of immigrant flows from the top sending countries. Even with the per-country limits and DV program in place, the total foreign-born population has become more concentrated in the top ten source countries compared to 1990 (see " Impact of the DV Program on Immigrant Diversity "). Others argue that, after almost 30 years, the diversity visa category has run its course. They might cite the countriesâsuch as Pakistan, Brazil, Nigeria, and Bangladeshâthat formerly qualified for the DV program and no longer do due to their increase in admissions, or the growth in immigration from Africa, Eastern Europe, and parts of Asia as an indication that the need for "new seed" immigration has been met. Others counter that these trends indicate that the program is meeting its goals and should be continued. They further argue that in many countries around the world, the diversity visa remains the only accessible avenue for immigrating to the United States. Appendix. Entropy Index Methodology and Results The entropy index (also called the Shannon index) is a measure of the diversity of a population. Diversity can be defined as the "relative heterogeneity of a population." It is at its maximum when all subpopulations are present in equal proportions (for the purposes of this report, when each country of birth receives an equal number of LPR admissions). The formula for the entropy index is where H is the entropy index, k is the country-of-origin group, and P is the proportion of the total from each country-of-origin group. The index can be standardized by dividing by its maximum, log K. Doing so results in a range of 0 (for the case where all of the population is in one subpopulation) to 1.0 (for the case where all subpopulations are present in equal proportions). For this report, the standardized entropy index was calculated by year for country of birth of total LPR admissions, LPR admissions minus DV admissions, and DV admissions. This was calculated after creating a standardized list of countries across all years so that K was held constant. As shown in Figure A-1 , between FY1995 and FY2017, the entropy index varied, but in all years the index was higher when DV LPRs were included. Summary:	null	96	29,692	29,694	29,694	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Background Family reunification and the admission of immigrants with needed skills are two of the major principles underlying U.S. immigration policy. As a result, current law weights the allocation of immigrant visas heavily toward individuals with close family in the United States and, to a lesser extent, toward individuals who meet particular employment needs. The diversity immigrant category was added to the Immigration and Nationality Act (INA) by the Immigration Act of 1990 ( P.L. 101-649 ) to stimulate "new seed" immigration (i.e., to foster new, more varied migration from other parts of the world). Diversity visas are allocated to natives of countries from which the combination of immediate relatives, family preference, and employment preference immigrant admissions were lower than a total of 50,000 over the preceding five years combined. Legislative Origins The Immigration Amendments of 1965 replaced the national origins quota system, which prioritized European source countries, with equally distributed per-country ceilings. In the 1980s, some Members of Congress began expressing concern that U.S. legal immigration admissions were skewed in favor of immigrants from Asia and Latin America because of the 1965 amendments. The first legislative response to this concern occurred in Section 314 of the Immigration Reform and Control Act of 1986 (IRCA), which allowed an extra 5,000 immigrant visas per year for FY1987 and FY1988 to be distributed to natives of 36 countries that had been adversely affected by the 1965 changes to the INA. Over 1 million people applied for what was then called the NP-5 program, and visas were made available according to the chronological order in which qualified applications were mailed to the State Department (DOS). Natives of Ireland received the largest proportion (31%) of the NP-5 visas, followed by natives of Canada (21%) and Great Britain (11%). In 1988, Congress extended the NP-5 program for two more years and made 15,000 additional immigrant visas available each year in FY1989 and FY1990. What is now known as the diversity immigrant category was added to the INA by P.L. 101-649 and went fully into effect in FY1995. Section 132 of P.L. 101-649 provided 40,000 visas per year for a transitional program during FY1992-FY1994 for certain natives of foreign states that were adversely affected by the 1965 changes to the INA. At least 40% of these visas were earmarked for natives of Ireland. The current diversity visa category had an annual allocation of 55,000 visas when it went into effect in FY1995. While the diversity visa category has not been directly amended since its enactment, P.L. 105-100 , the Nicaraguan Adjustment and Central American Relief Act of 1997 (NACARA), temporarily decreased the 55,000 annual ceiling to 50,000. Beginning in FY2000, the 55,000 ceiling has been reduced by 5,000 annually to offset immigrant visas made available to certain unsuccessful asylum seekers from El Salvador, Guatemala, and formerly communist countries in Europe who are being granted immigrant status under special rules established by NACARA. The 5,000 offset is temporary, but it is not clear how many years it will be in effect to handle these adjustments of status. Eligibility Criteria and Application Process To be eligible for a diversity visa, the INA requires that a foreign national must have at least a high school education or the equivalent, or two years of experience in an occupation that requires at least two years of training or experience. The applicant or the applicant's spouse must be a native of one of the countries listed as a foreign state qualified for the DV program. Minor children of the qualifying diversity immigrant, as well as the spouse, may accompany as lawful permanent residents (LPRs) and are counted toward the 50,000 annual limit. Because the demand for diversity visas is much higher than the supply, a lottery is used to randomly select who may apply for one of the 50,000 diversity visas available annually. (See Figure 1 for an illustration of the process). There is no fee to enter the diversity lottery. Registration for the FY2020 diversity lottery began on October 3, 2018, and closed on November 6, 2018. Beginning on May 7, 2019, and continuing through September 30, 2020, those who registered can use an online system to find out if they had been selected. The FY2018 lottery had 14.7 million entries, representing over 23 million people (including family members). From the millions of entries, approximately 100,000 selectees are randomly chosen. Being chosen as a selectee ("lottery winner") does not guarantee receipt of a diversity visa; rather, it identifies those who are eligible to apply for one. To receive a visa, selectees must successfully complete the application process (including security and medical screenings and in-person interviews) by the end of the fiscal year for which they registered for the lottery or they lose their eligibility. DV applicants, like all other foreign nationals applying to come to the United States, must pay applicable fees and undergo reviews and biometric background checks performed by DOS consular officers abroad and Department of Homeland Security (DHS) immigration officers upon entry to the United States. Individuals selected for a diversity visa who are residing in the United States as nonimmigrants must undergo reviews by U.S. Citizenship and Immigration Services (USCIS) prior to adjusting to LPR status. These reviews, which include an in-person interview, are intended to ensure that the applicants are not inadmissible under the grounds spelled out in Section 212(a) of the INA. Grounds for inadmissibility include health, criminal history, security and terrorist concerns, public charge, illegal entry, and previous removal. Trends in Source Regions and Countries The diversity immigrant visa program currently makes 50,000 visas available annually to natives of countries from which immigrant admissions were lower than a total of 50,000 over the preceding five years. USCIS implements a formula for allocating visas according to statutory specifications: visas are divided among six global geographic regions, and each region and country is identified as either high admission or low admission based on how many immigrant visas each received over the previous five-year period. Higher proportions of diversity visas are allocated to low-admission regions and low-admission countries. Each country is limited to 7%, or 3,500, of the total, and the INA provides that Northern Ireland be treated as a separate foreign state. The distribution of diversity visas by global region of origin has shifted over time (see Figure 2 ). From FY1995 through FY2001, foreign nationals from Europe garnered a plurality of diversity visas, ranging from 38% to 47% of the total. In the early 2000s, the share of DV recipients from Africa was on par with those from Europe. Europe's share dropped by nine percentage points from FY2005 to FY2006 as the shares from African and Asian countries continued to increase. Since FY2008, Europe has accounted for smaller shares than Africa or Asia. Latin America (which includes South America, Mexico, Central America, and the Caribbean), Oceania, and North America accounted for less than 8% each year. In total, from FY1995 through FY2017 immigrants from Africa accounted for 40% of diversity immigrants, while Europeans accounted for 31% and Asians for 25%. These trends are consistent with the statutory formula Congress outlined to allocate diversity visas. Figure 3 presents the countries from which at least 1,000 DV immigrants were admitted in the first five years that the program was in full effect (FY1995-FY1999) and the most recent five years for which data are available (FY2013-FY2017). Early in the program, most of the top countries were in Europe (particularly Eastern Europe) and Africa. In more recent years, there has been a shift toward Africa and Asia. Certain countriesâsuch as Ethiopia, Ukraine, and Egyptârank high across many years of the program, while othersâsuch as Ireland, Poland, and Venezuelaâare limited to particular periods of time. From FY1995-FY2017, natives of six countries received at least 40,000 diversity visas in total: Ethiopia (67,832), Nigeria (58,563), Egypt (56,862), Ukraine (52,654), Albania (47,136), and Bangladesh (40,847). Characteristics of Diversity Immigrants Regions of Birth As one would expect, diversity immigrants come from different parts of the world that differ from the leading immigrant-sending regions. Department of Homeland Security data ( Figure 4 ) reveal that Africa accounted for 43% of diversity immigrants admitted in FY2017, but 11% of all LPRs admitted that fiscal year. Europeans made up 7% of all LPRs admitted in FY2017, but 22% of diversity immigrants. In contrast, Latin America (Mexico, Central America, the Caribbean, and South America) was the sending region for 43% of all LPRs admitted in FY2017, but provided 4% of the diversity immigrants during that fiscal year. North America (excluding Mexico) and Oceania account for a small percentage of LPRs admitted by any means. The distribution of LPR admissions and DV admissions from Asia illustrates the impact of the two-step visa allocation formula, which considers both regional and national admissions levels. Asia includes many top-sending countriesâsuch as China, India, and the Philippinesâfor family- and employment-based LPRs, making it a high-admission region. Yet it also includes low-admission countriesâsuch as Nepal, Iran, and Uzbekistanâthat rank high for their number of diversity visas. As a result, as Figure 4 illustrates, in FY2017 foreign nationals from Asia represented a somewhat more equivalent share of the 1.1 million LPRs (38%) in relation to their share (30%) of diversity LPRs in contrast to the other world regions. Age and Sex Diversity immigrants are, on average, younger than other LPRs. Department of Homeland Security data (see Figure 5 ) reveal that DV immigrants are more likely to be working-age adults and their children, and less likely to be over the age of 40 than LPRs overall. Also, the foreign-born population of the United States is more likely to be in the prime working-age group (i.e., ages 25 to 64) than the native-born population, and diversity immigrants have a younger age distribution than the foreign-born population as a whole. In addition, 56% of diversity immigrants in FY2017 were male compared to 46% of all LPRs. Marital Status Diversity immigrants were less likely to be married than LPRs generally (47% versus 58%) in FY2017, perhaps a function of their relative youth. Over half (52%) of diversity immigrants were single, in contrast to 36% of LPRs overall. Few of either group were likely to be widowed, divorced, or separated. Educational Attainment and Labor Market Characteristics Recent critics of the diversity immigrant visa have argued against the program on the grounds that individuals do not need high levels of education or work experience to qualify for the DV program and that the U.S. admissions system should prioritize "high-skilled" immigrants. Neither DHS nor DOS publish data on the educational attainment of DV immigrants, but other sources provide some information. According to now-dated data from the New Immigrant Survey, a widely cited, nationally representative, longitudinal study of individuals who obtained LPR status in 2003, those who entered as principals via the diversity visa category had, on average, 14.5 years of schooling when they entered the United States, which was higher than those who were admitted on family-based visas as spouses or siblings of U.S. citizens (13.0 and 11.5 years, respectively), but lower than those who were admitted as principal employment-based immigrants (15.6 years). Similarly, DV immigrants were more likely to be fluent in English than most family-based immigrants (except for immigrant spouses of native-born U.S. citizens), but less likely than employment-based immigrants to be fluent in English. Using the same data source, the Migration Policy Institute found that 50% of DV immigrants who entered in 2003 had a college degree (32% with a bachelor's and 18% with a graduate degree). It is likely that the educational attainment of recent DV immigrants is higher than it was for those represented in the New Immigrant Survey, given that more recently arrived immigrants have higher levels of education overall than their predecessors. Government data on other labor market characteristics of DV immigrants are also limited. According to the New Immigrant Survey, DV immigrants who entered in 2003 had higher initial unemployment rates than employment-based immigrants and those who immigrated as spouses of U.S. citizens, but lower unemployment rates than those who immigrated as siblings of U.S. citizens. Four to six years after U.S. entry, however, DV immigrants' unemployment rates had dropped significantly and were similar to those of all other groups except employment-based principals (who had the lowest rates at both initial entry and four to six years later). DV immigrants' hourly earnings were similarly situated between that of employment-based immigrant category (which had the highest earnings) and that of the sibling category (which had the lowest). Among male immigrants earning wages, those who entered on diversity visas had the highest percentage growth in real hourly wages between initial entry and re-sampling four to six years later. Impact of the DV Program on Immigrant Diversity Given its name and the discourse about "new seed" immigrants that preceded the creation of the diversity visa, the question arises whether the DV program has led to an increase in the diversity of immigrant flows to the United States. Leading up to and since its enactment, some observers have noted that, regardless of its name, the DV program was intended to benefit Irish and Italian constituents who had been negatively affected by the Immigration Act of 1965 that resulted in an increase in immigration from Asia and Latin America. During the transition period after the program was created (FY1992-FY1994), at least 40% of diversity visas were earmarked for Irish immigrants, and 92% of diversity visas in FY1994 went to Europeans. Since its full implementation in FY1995, however, immigrants from a wider range of countries and regions have entered via the program (see " Regions of Birth " above). The DV program's small size relative to total annual immigrant admissions (DV admissions make up about 5% of annual LPR admissions) limits its impact on the make-up of the immigrant population. Former Representative Bruce Morrison, who helped create the program, stated in a 2005 hearing that it was not Congress's intent to diversify the immigrant flow as a whole ("It could not have possibly done so at the 50,000 number"), but rather to add a new pathway for those who would not be able to enter under the family- or employment-based systems. By that standard, the program arguably fulfills its objectives, having admitted more than 1 million immigrants from under-represented countries since FY1995 (see Figure 3 ). Another way to assess the program's impact is to analyze the diversity of annual LPR flows before and after the DV program was established. Using a measure of diversity called the entropy index, CRS found that in FY1990, before the DV program was in effect, the diversity of LPR admissions was 0.52. In every year from FY1995 (when the DV program went into full effect) through FY2017 (the most recent data available), the diversity of annual LPR admissions was higher than in 1990, ranging from 0.67 to 0.72. In each of those years, the diversity of LPR admissions not including the DV admissions was lower than it was with DV admissions included (see the Appendix ), indicating that the admission of DV immigrants does increase the diversity of annual LPR admissions. A full analysis of the impacts of the DV program on admission numbers would also take into account individuals whom DV immigrants subsequently sponsor through the family-based admissions system. Because administrative data on immigrant admissions do not specify these linkages, this type of direct analysis is not currently possible. However, admissions data suggest that, at least for Africans, the DV has led to an increase in immigration via the family-based system (particularly immediate relatives). From 1992 to 2007, admissions of Africans based on family sponsorship grew faster than other categories of admissions for Africans, including diversity, which remained fairly stable over the time period. The DV seems to have diversified the African flow itself by boosting emigration from non-English speaking African countries (whereas English-speaking African countries have longer histories of U.S. immigration and are therefore more likely to be the source of sponsoring immigrant family members). Selected Legislative Action Legislation related to the Diversity Immigrant Visa has focused largely on eliminating the program. Bills to eliminate the diversity visa category have been introduced in nearly every Congress since the program was created and have passed one chamber on more than one occasion. Most recently, S. 744 in the 113 th Congress, a comprehensive immigration reform bill that the Senate passed in 2013 by a vote of 68 to 32, would have eliminated the program. Other bills introduced in the past would have raised the annual limit of diversity visas or temporarily re-allocated diversity visas for other purposes. In the 116 th Congress, several bills to eliminate the DV program have been introduced, including H.R. 479 , H.R. 2278 , S. 1103 , and S. 1632 . In contrast, H.R. 3799 would raise the annual diversity visa allocation to 80,000. Selected Policy Questions As Congress weighs whether to eliminate or revise the diversity visa category, it may want to consider various policy questions pertinent to this discussion. Is it fair to have the diversity visa category when there are family members and prospective employees who have been waiting for years for visas to become available? Given the 3.7 million approved family-based and employment-based petitions waiting for a visa to become available at the close of FY2018, some argue that the 50,000 diversity visas should be used for backlog reduction in these visa categories. Others might observe that the family-based, employment-based, and diversity visa categories are statutorily designed as independent pathways to LPR status and that the problems of the family-based and employment-based backlogs should be addressed separately. Some also argue that the DV program increases fairness in the immigration system by making visas available to individuals who would not otherwise have a chance of obtaining one and by discouraging illegal immigration through expanding access to the legal immigration system. Should the United States base admissions decisions on nationality? Some argue that the diversity visa program reverts to discriminatory national origin quotas, which Congress eliminated through the 1965 amendments to the Immigration and Nationality Act. However, there are other examples of admissions policies that effectively discriminate based on nationality (e.g., H-2A, H-2B, E, and TN nonimmigrant visas, the Visa Waiver Program, and the per country caps on family- and employment-based LPR admissions, all of which limit admissions by nationality). Some also argue that admissions decisions should be based on higher levels of education, job experience, and language skills, or family ties to U.S. residents, rather than country of origin and being selected at random via a lottery. In contrast, others argue that the program bolsters equity of opportunityâa quintessential American valueâby providing a pathway for individualsâparticularly those from Africa, Eastern Europe, and the former Soviet Unionâwho do not have family or employer connections in the United States. Some also argue that the more than one million immigrants who have moved to the United States as a result of the program have enriched the United States culturally and economically, and strengthened the nation's global connections. Some also argue that efforts to end it are racially motivated or point out that for most of U.S. history, Africans in particular had little opportunity to come to the United States other than as slaves. Is a lottery the best way to choose applicants for diversity visas? Some equate the use of a lottery system in the DV program to awarding "green cards" at random and argue that luck should not come into play in U.S. admissions decisions. Others argue that, given the millions of interested applicants every year, a lottery is a fair method of reducing the applicant pool because it gives all entrants who meet the program's qualifications an equal chance to apply for a diversity visa. They also cite the use of a lottery in other over-subscribed visa categories such as the H-1B and H-2B temporary worker classifications to illustrate that U.S. immigration policy considers it a reasonable tool. Is the diversity visa lottery more vulnerable to fraud and misuse than other immigration pathways? Some observers concerned about immigration fraud surrounding the DV program reference a 2003 State Department Office of Inspector General report and a 2007 GAO report which found fraud vulnerabilities in the DV program. They may also cite the 2017 and 2018 complaints filed by the Department of Justice (DOJ) in two cases seeking the denaturalization of individuals who had gained admission (in 1997 and 2001) to the United States through the DV program. In the first case, DOJ filed a complaint to denaturalize four Somali-born diversity visa recipients who falsely claimed to be a family. In the second case, DOJ filed a complaint to denaturalize a diversity visa recipient who obtained naturalization without having disclosed two prior orders of removal. Those defending the fraud protections of the DV program counter that DOS has since revised the diversity lottery procedures to address fraud vulnerabilities, including a requirement to submit a recent photograph, the addition of biographic and facial recognition checks to reduce duplicate entries, a policy requiring the disqualification of entrants who fail to list their spouse and children on their entries, and technical improvements to limit manipulation of entries by automated bots. They also argue that the risk of fraud is not unique to the DV program and refer to the numerous fraud investigations and arrests of immigrants who entered the United States via other visa categories and the significant resources that DOS commits to fraud prevention for all immigrant and nonimmigrant visa applications through its Fraud Prevention Units at posts overseas. In addition, on June 5, 2019, DOS published an interim final rule to require diversity visa entrants to provide certain information from a valid, unexpired passport on the electronic entry form. This rule is intended to make it more difficult for third parties to submit unauthorized entries, because third parties are less likely to have individuals' passport numbers. Are there national security reasons to eliminate the diversity visa? Some assert that the difficulties of performing background checks in many of the countries whose natives currently qualify for the DV program, as well as broader concerns about terrorism, justify the elimination of the category. Some cite the 2004 warning of the DOS Deputy Inspector General that the diversity visa lottery "contains significant vulnerabilities to national security" from state sponsors of terrorism. They argue that DV immigrants, by definition, are not required to have employer or family ties in the United States and thus may be more likely to have nefarious intent. They cite the case of a New Jersey resident responsible for killing eight people with his rental truck in lower Manhattan in 2017, who had immigrated to the United States from Uzbekistan on a diversity visa. In response to that event, the Trump Administration called on Congress to immediately terminate the diversity visa lottery program. Others respond that immigrants coming to the United States in other immigrant visa categories are not restricted if they come from these same countries, and further argue that background checks for national security risks are performed on all prospective immigrants seeking to come to the United States. They also point to the 2005 DOS Inspector General's testimony that DOS's Bureau of Consular Affairs strengthened the DV program by complying with most of the recommendations in the OIG's 2003 report. They similarly note the testimony of one of the creators of the DV Program who contended that "it is absurd to think that a lottery would be the vehicle of choice for terrorists" and that attention should instead be focused on greater security risks. They also point out that since the creation of the Visa Security Program in 2003, DHS has aided consular officers in extensively vetting individuals applying for visas. They also reference a 2007 GAO report stating: "We found no documented evidence that DV immigrants from these, or other, countries posed a terrorist or other threat. However, experts familiar with immigration fraud believe that some individuals, including terrorists and criminals, could use fraudulent means to enter or remain in the United States." Are there foreign policy reasons to continue the diversity visa program? Citing the millions of diversity visa lottery entries every year from around the world, some argue that the DV program is an efficient means of boosting American goodwill and "soft power" abroad, and that a diversity of immigrant origins helps the United States better respond to the challenges of globalization. Some also cite the value of remittances sent by diversity immigrants to their countries of origin as international development assistance without U.S. government expense. Others argue that the DV program encourages "brain drain" from developing countries, a concern which acknowledges that many DV immigrantsâparticularly from Africaâpossess education and skills beyond the minimum requirements for program eligibility. Are the reasons that led to establishment of the diversity visa (e.g., to stimulate "new seed" immigration) still germane? Supporters of the DV program argue that it honors the United States' history as a destination for enterprising immigrantsâthe "self-selected strivers" âwho arrive without family ties but with a desire to work hard for a better life. Some point to the present-day preponderance of immigrants from a handful of countries and argue that the diversity visa fosters new and more varied migration to counterbalance an admissions system weighted disproportionately to family-based immigration, which tends to perpetuate the dominance of certain countries. They also point to wide support for legislation that would remove or raise the 7% per-country limits on family- and employment-based immigrant admissions, which would likely result in further concentration of immigrant flows from the top sending countries. Even with the per-country limits and DV program in place, the total foreign-born population has become more concentrated in the top ten source countries compared to 1990 (see " Impact of the DV Program on Immigrant Diversity "). Others argue that, after almost 30 years, the diversity visa category has run its course. They might cite the countriesâsuch as Pakistan, Brazil, Nigeria, and Bangladeshâthat formerly qualified for the DV program and no longer do due to their increase in admissions, or the growth in immigration from Africa, Eastern Europe, and parts of Asia as an indication that the need for "new seed" immigration has been met. Others counter that these trends indicate that the program is meeting its goals and should be continued. They further argue that in many countries around the world, the diversity visa remains the only accessible avenue for immigrating to the United States. Appendix. Entropy Index Methodology and Results The entropy index (also called the Shannon index) is a measure of the diversity of a population. Diversity can be defined as the "relative heterogeneity of a population." It is at its maximum when all subpopulations are present in equal proportions (for the purposes of this report, when each country of birth receives an equal number of LPR admissions). The formula for the entropy index is where H is the entropy index, k is the country-of-origin group, and P is the proportion of the total from each country-of-origin group. The index can be standardized by dividing by its maximum, log K. Doing so results in a range of 0 (for the case where all of the population is in one subpopulation) to 1.0 (for the case where all subpopulations are present in equal proportions). For this report, the standardized entropy index was calculated by year for country of birth of total LPR admissions, LPR admissions minus DV admissions, and DV admissions. This was calculated after creating a standardized list of countries across all years so that K was held constant. As shown in Figure A-1 , between FY1995 and FY2017, the entropy index varied, but in all years the index was higher when DV LPRs were included.	Summary:	gov_report	1,024	null	25
crs_R46240	crs_R46240_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Evolution of the Framework for Budgetary Decisionmaking Under the U.S. Constitution, Congress exercises the "power of the purse." This power is expressed through the application of several provisions. The power to lay and collect taxes and the power to borrow are among the enumerated powers of Congress under Article I, Section 8. Furthermore, Section 9 of Article I states that funds may be drawn from the Treasury only pursuant to appropriations made by law. By requiring the power of the purse to be exercised through the lawmaking process, the Constitution allows Congress to direct any budgetary actions that may be taken by the President and executive departments. The Constitution, however, does not prescribe how these legislative powers are to be exercised, nor does it expressly provide a specific role for the President with regard to budgetary matters. Instead, various statutes, congressional rules, practices, and precedents have been established over time to create a complex system in which multiple decisions and actions occur with varying degrees of coordination. As a consequence, there is no single "budget process" through which all budgetary decisions are made, and in any year there may be many budgetary measures necessary to establish or implement different aspects of federal fiscal policy. Under Article I, Section 5, "Each House may determine the Rules of its Proceedings," so it is left to the House and Senate to adapt and develop procedures and practices as needed to facilitate the consideration and enactment of legislation. Congress, however, is a dynamic institution that can, and does, change its rules, practices, and organization in order to achieve changing goals or overcome new obstacles. Since the early years of the Republic, there have been a number of notable milestones in the evolution of procedures and practices concerning the consideration, enactment, and execution of budgetary legislation. These milestones were often the result of congressional efforts to solve problems or promote outcomes and thus help to provide insight into when, how, or why current practices developed. Although early Congresses referred legislation to ad hoc committees, within a few years the House began to organize a system of standing committees with fixed jurisdictions and responsibility for different legislative issues. In the House, responsibility for revenue, spending, and debt were assigned to a standing Committee of Ways and Means beginning in the Fourth Congress (1795-1797). In the Senate, a Committee on Finance with jurisdiction over these matters was established as part of a standing committee system during the second session of the 14 th Congress (1815-1817). By creating a system in which legislation was categorized by its content, Congress laid the groundwork for establishing rules and practices to provide for the separate consideration of various budgetary measures. The House later created a separate standing Committee on Appropriations in 1865, and the Senate took similar action in 1867. The distinction between appropriations and general policy legislation appears to have been understood and practiced long before it was formally recognized in House or Senate rules, probably derived from earlier British and colonial practices. As congressional practices developed in the early 19 th century, this distinction was reflected in the designation of general appropriations measures as "supply bills," whose purpose was simply to supply funds to carry out government operations already defined in law. This distinction was also reinforced by the way in which they were considered by the House. Supply bills would be initially taken up as a list of objects of expenditure, with blanks rather than dollar amounts for associated expenditures, and the amounts filled in by action on the floor. Such bills were generally considered as little more than a matter of form, without extensive debate except for the purpose of filling in the blanks. The inclusion of substantial new legislative language in supply bills was generally believed to be inappropriate, as it might delay the provision of necessary funds or lead to the enactment of matters that might not otherwise become law. According to Hinds' Precedents , the origin of a formal rule mandating the separate consideration of policy legislation and appropriations can be traced to 1835, when the House discussed the increasing problem of delays in enacting appropriations. A significant part of this delay was attributed to the inclusion in such bills of "debatable matters of another character, new laws which created long debates," and a proposal was made to strip appropriation bills of "everything but were legitimate matters of appropriation, and such as were not â¦ made the subject of a separate bill." Although the proposal was not adopted at the time, at the beginning of the following Congress (25 th Congress, 1837-1839), language was added to the standing rules of the House that stated: No appropriation shall be reported in such general appropriation bill, or be in order as an amendment thereto, for any expenditure not previously authorized by law. By formulating the rule as a requirement that appropriations only be to provide funding to carry out activities for which previously enacted legislation had provided the statutory authority for an agency to act, the rule formally limited the scope of purposes for which appropriations could be provided. The House soon after developed a practice of striking provisions containing general legislation from appropriations bills. It was not until 1876, however, that the House adopted language in its rules formally restricting the inclusion of legislative language in appropriations bills. As adopted in 1876, the rule stated: No appropriation shall be reported in such general appropriation bills, or be in order as an amendment thereto, for any expenditure not previously authorized by law unless in continuation of appropriations for such public works and objects as are already in progress; nor shall any provision in any such bill or amendment thereto, changing existing law, be in order except such as, being germane to the subject matter of the bill, shall retrench expenditures. There were also important principles established in the 19 th century concerning the extent to which the actions of agencies to execute the budget could be directed or limited by Congress. Although the First Congress enacted all appropriations in 1789 in a single act divided into lump sums for broad categories of expenditure, within a few years, Congress began to exercise control over how federal agencies spent money by enacting increasingly more specific appropriations. An additional general statutory restriction on agency actions to allocate how funds were spent was imposed in 1809 by the enactment of the "purpose statute" which required that sums appropriated by law for each branch of expenditure in the several departments shall be solely applied to the objects for which they are respectively appropriated, and to no other. Agencies sometimes took actions that undermined congressional fiscal controls, however. In some instances, they obligated funds in anticipation of appropriations, thereby creating liabilities that Congress would feel compelled to ratify. In others, they would obligate appropriated funds at a rate that was likely to produce a need for additional funds before the end of the fiscal year, giving rise to what were termed "coercive deficiencies." As a result, Congress enacted the first "antideficiency" provision in 1870 stating that it shall not be lawful for any department of the government to expend in any one fiscal year any sum in excess of appropriations made by Congress for that fiscal year, or to involve the government in any contract for the future payment of money in excess of such appropriations. In addition to prohibiting agencies from obligating payments in the absence of appropriations, antideficiency laws also established the requirement that agencies establish plans to apportion available funds over the course of the fiscal year in order to avoid deficiencies. Although some Presidents made attempts to coordinate or limit agency budget estimates before they were communicated to Congress, such attempts were intermittent and uneven. This changed with the enactment of the Budget and Accounting Act of 1921. It created a statutory role for the President by requiring agencies to submit their budget requests to him and, in turn, for him to submit a consolidated request to Congress. The President's budget request became the center of a new relationship between the President and federal agencies and, consequently, of the agencies and Congress. The act also established the Bureau of the Budget (now the Office of Management and Budget [OMB]) to assist the President and the General Accounting Office (now the Government Accountability Office [GAO]) to serve as an independent auditor of government budgetary activities. Another significant change in federal budgeting in the 20 th century was the advent of direct (or mandatory) spending laws. Although there were 19 th century antecedents in which legislation was enacted to entitle an eligible class of recipients (such as veterans) to certain payments, such spending was not common. Beginning with Social Security in the 1930s, Congress began to enact broad-based spending legislation for which the level of spending was not controlled through the appropriations process. Instead, payments were required to be made to all eligible persons as prescribed in the law. In effect, such programs were designed to establish an expectation of stable payments for a class of individual recipients (even when the class or payments might change over time), rather than have the aggregate level of spending for the program subject to control through annual appropriations decisions. Such programs have grown to comprise the majority of all federal outlays. Until the 1970s, congressional consideration of the multiple budgetary measures considered in a given year as a whole lacked any formal coordination. Instead, Congress considered these various budgetary measures separately, sometimes informally comparing them to proposals in the President's budget. That was changed by the Congressional Budget Act of 1974 (CBA). The CBA provides for the adoption of a concurrent resolution on the budget that allows Congress to make decisions about overall fiscal policy and priorities and coordinate and establish guidelines for the consideration of various budget-related measures. Because a concurrent resolution is not a lawâthe President cannot sign or veto itâthe budget resolution does not have statutory effect, so no money is raised or spent pursuant to it. Revenue and spending levels set in the budget resolution, however, do establish the basis for enforcement of congressional budget policies through points of order. The CBA also established the House and Senate Budget Committees as well as CBO to provide Congress with an independent source for budgetary information, particularly estimates concerning the cost of proposed legislation. Since 1985, budgetary decisionmaking has also been subject to various budget control statutes designed to restrict congressional budgetary actions or implement particular budgetary outcomes in order to reduce the budget deficit, limit spending, or prevent deficit increases. The mechanisms included in these acts sought to supplement and modify the existing budget process and also added statutory budget controls, in some cases seeking to require future deficit reduction legislation or limit future congressional budgetary actions and in some cases seeking to preserve deficit reduction achieved in accompanying legislation. Chief among the laws enacted were the Balanced Budget and Emergency Deficit Control Act of 1985 and the Budget Enforcement Act of 1990. The Balanced Budget and Emergency Deficit Control Act of 1985 did not include legislation that reduced the deficit but instead established a statutory requirement for the gradual reduction and elimination of budget deficits over a six-year period. The act specified annual deficit limits and set forth a specific process for the cancellation of spending by requiring the President to issue an order (termed a sequester order) to enforce the annual deficit limit in the event that compliance was not achieved through legislation. The deficit targets and timetable were modified and extended in the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987. With the Budget Enforcement Act of 1990, Congress changed the focus of budgetary control. While the 1985 Balanced Budget and Emergency Deficit Control Act had focused on enforcing deficit targets through unspecified future legislation, the Budget Enforcement Act was enacted as part of deficit reduction legislation and focused instead on inhibiting future legislation that would undo the savings. Budgetary enforcement under the Budget Enforcement Act was based on the implementation of pay-as-you-go (PAYGO) procedures to limit any increase in the deficit due to new direct spending or revenue legislation and limit discretionary spending through statutory spending caps. These budget control mechanisms sought to preserve the deficit reduction achieved in the accompanying legislation rather than force subsequent legislation. As originally enacted, these mechanisms were to be in force for a period of five years, but they were modified and extended twice. In 1993, they were extended through 1998 in the Omnibus Budget Reconciliation Act of 1993, and in 1997, they were extended through 2002 in the Budget Enforcement Act of 1997. In 2010, Congress reinstated PAYGO in the Statutory Pay-As-You-Go Act of 2010. In 2011, the Budget Control Act (BCA) reestablished statutory limits on discretionary spending, divided into separately enforceable defense and nondefense limits, for FY2012-FY2021. Several measures have subsequently been enacted that changed the spending limits or enforcement procedures included in the BCA. Basic Concepts of Federal Budgeting The federal budget is a compilation of numbers reflecting the receipts, spending, borrowing, and debt of the government. Receipts come largely from various taxes but are also derived from other sources as well (such as leases, licenses, and other fees). Spending involves such concepts as budget authority, obligations, outlays, and offsetting collections. Although the amounts are computed according to previously established rules and conventions, they do not always conform to the way receipts and spending might be accounted for in a different context. When Congress appropriates money, it provides budget authority , that is, statutory authority to enter into obligations for which payments will be made by the Treasury. Budget authority may also be provided in legislation that does not go through the annual appropriations process (such as direct spending legislation). The key congressional spending decisions relate to the obligations that agencies are authorized to incur during a fiscal year (amount, purpose, and timing), not to the outlays that result. Obligations occur when agencies enter into contracts, submit purchase orders, employ personnel, and so forth. Outlays occur when obligations are liquidated, primarily through the issuance of checks, electronic fund transfers, or the disbursement of cash. The provision of budget authority is the key point at which Congress exercises control over federal spending. Congress generally does not exercise direct control over outlays related to executive or judicial branch spending. The amount of outlays in a given year derive in part from new budget authority enacted in that year but also from "carryover" budget authority provided in prior years. The relation of budget authority to outlays varies from program to program and depends on the outlay or "spendout" rate, that is, the rate at which budget authority provided by Congress is obligated and payments are disbursed. Various factors can have an impact on the spendout rate for a particular program or activity. In a program with a high spendout rate, most new budget authority is expended during the fiscal year. If the spendout rate is low, however, most of the outlays occur in later years. Spendout rates are generally sensitive to program characteristics and vary over time for certain projects. The outlay levels associated with budget enforcement during the consideration of legislation reflect the projected amount that will be outlayed during the first year that budget authority is available. If actual payments turn out to be higher than the budget estimate, outlays can be above the projected level. The President and Congress can control outlays indirectly by deciding on the amount of budget authority provided by limiting the amount that can actually be obligated (termed an "obligation limit") or by limiting the period during which the funds may be obligated. The receipts of the federal government may be accounted for in the budget as revenues or as "offsets" against outlays. Revenues result from the exercise of the government's sovereign power to tax. In contrast, receipts from businesslike or market transactions, such as Medicare premiums or various fees collected by government agencies, are deducted from outlays. Similarly, income from the sale of certain assets is also treated as an offset to spending. These offsets may be classified as offsetting collections or offsetting receipts. In most cases, offsetting collections may be obligated without further legislative action, while offsetting receipts require an explicit appropriation to be available for obligation. Most such receipts are offsets against the outlays of the appropriation account for the agency that collects the money, but in the case of some activities (such as offshore oil leases), the receipts are offset against the total outlays of the government. Scope of the Budget The budget consists of two main groups of funds: federal funds and trust funds . Federal fundsâwhich comprise mainly the general fundâlargely derive from the general exercise of the taxing power and general borrowing. For the most part, these funds are not designated in law for any specific program or agency, although there are also special funds that are designated with respect to their source or purpose. Trust funds are established under the terms of statutes that specifically designate them as such and are available to fund only specific purposes. For example, the Social Security trust funds (the Old-Age and Survivors Insurance Fund and the Disability Insurance Fund), which are the largest of the trust funds, comprise revenues collected under a Social Security payroll tax and are used to pay for Social Security benefits and related purposes. The unified budget includes both the federal funds and the trust funds. In some circumstances, a trust fund may accumulate more funds in a given time period than are necessary to meet current obligations. Such balances are held in the form of federal debt, so that while a trust fund may be said to have a surplus, by holding it for future use in the form of federal debt, it is effectively borrowed by federal funds and counted as part of federal debt. Thus, a trust fund surplus can offset the overall budget deficit, but because it is included in the federal debt, the annual increase in the debt invariably exceeds the amount of the budget deficit. For the same reason, it is possible for the federal debt to rise even when the federal government has a budget surplus. Federal budgeting is mostly calculated based on cash flow so that capital and operating expenses are not segregated in the budget. Hence, expenditures for the operations of government agencies and expenditures for the acquisition of long-life assets (such as buildings, roads, and weapons systems) both appear in the budget in terms of their outlays. Proposals have been made from time to time to divide the budget into separate capital and operating accounts. While these proposals have not been adopted, the budget does provide information showing the investment and operating outlays of the government. One portion of the federal budget that is not based on cash flow is the budgeted levels for direct and guaranteed loans by the federal government. The Federal Credit Reform Act of 1990 made fundamental changes in the budgetary treatment of direct loans and guaranteed loans. The reform, which first became effective for FY1992, shifted the accounting basis for federally provided or guaranteed credit from the amount of cash flowing into or out of the Treasury to the estimated subsidy cost of the loans. Credit reform entails complex procedures for estimating these subsidy costs and new accounting mechanisms for recording various loan transactions. The changes have had only a modest impact on budget totals but a substantial impact on budgeting for particular loan programs. The budget totals do not include all the financial transactions of the federal government, however. The main exclusions fall into two categoriesâoff-budget entities and government-sponsored enterprises (GSEs). Off-budget entities are excluded by law from the budget totals. The receipts and disbursements of the Social Security trust funds, as well as spending for the Postal Service Fund, are presented separate from the budget totals. Thus, the budget reports two deficit (or surplus) amountsâone excluding the Social Security trust funds and the Postal Service Fund and the other (the unified budget) including these entities. In most cases, the latter is the main focus of discussion in both the President's budget and the congressional budget process. The transactions of government-owned corporations (excluding the Postal Service), as well as revolving funds, are included in the budget on a net basis. That is, the amount shown in the budget is the difference between their receipts and outlays, not the total activity of the enterprise or revolving fund. If, for example, a revolving fund has annual income of $150 million and disbursements of $200 million, the budget would report $50 million as net outlays. The Federal Reserve System has never been subjected to the appropriations process, and aside from the recording of transfers of Federal Reserve earnings as budget receipts, its financial operations have always been excluded from the federal budget. It is funded by fees and the income generated by securities it owns. Annual appropriations approval of Federal Reserve spending plans is not required, a result of a provision of the Federal Reserve Act, which stipulates that the Federal Reserve Board's assessment "shall not be construed to be Government funds or appropriated moneys." If the Federal Reserve's income exceeds its expenses, its net earnings are transferred to the Treasury and recorded as "miscellaneous receipts." GSEs have historically been excluded from the budget because they were deemed to be non-governmental entities. Although they were established by the federal law, the federal government did not own any equity in these enterprises, most of which received their financing from private sources, and their budgets were not reviewed by the President or Congress in the same manner as other programs. Most of these enterprises engaged in credit activities. They borrowed funds in capital markets and lent money to homeowners, farmers, and others. Financial statements of the GSEs were published in the President's budget. Although some GSEs continue to operate on this basis, the economic downturn and credit instability that occurred in 2008 fundamentally changed the status of two GSEs that play a significant role in the home mortgage market: Fannie Mae and Freddie Mac. In September 2008, the Federal Housing Finance Agency placed the two entities in conservatorship, thereby subjecting them to control by the federal government until the conservatorship is brought to an end. Debt Limit Legislation When the receipts collected by the federal government are not sufficient to cover outlays, it is necessary for the Treasury to finance the shortfall through the sale of various types of debt instruments to the public and federal agencies. Federal borrowing is subject to a statutory limit on public debt (referred to as the debt limit or debt ceiling). When the federal government operates with a budget deficit, or otherwise increases the level of debt necessary (such as to allow federal trust funds to hold surpluses), the response has been for the public debt limit to be increased to meet that need. The frequency of congressional action to raise the debt limit has ranged in the past from several times in one year to once in several years. In recent years, Congress has chosen to suspend the debt limit for a set amount of time instead of raising the debt limit by a fixed dollar amount. When a suspension period ends, the debt limit is reestablished at a dollar level that accommodates the level of federal debt issued during the suspension period. Legislation to raise the public debt limit falls under the jurisdiction of the House Ways and Means Committee and the Senate Finance Committee. In some cases, Congress has combined other legislative provisions with changes in the debt limit. For example, the Senate amended a House-passed bill raising the debt limit to add the Balanced Budget and Emergency Deficit Control Act of 1985. The House added debt limit provisions (as well as other matters) to an unrelated Senate-passed measure to create the Budget Control Act of 2011. In addition, debt limit provisions may be included in reconciliation legislation (described in a separate section of this report). In the 96 th Congress (1979-1980), the House amended its rules to provide for the automatic engrossment of a measure increasing the debt limit upon final adoption of a budget resolution. The rule (commonly referred to as the Gephardt Rule after Representative Richard Gephardt of Missouri) was intended to facilitate quick action on debt limit increases by deeming such a measure as passed by the House by the same vote as the final adoption of the budget resolution, thereby avoiding the need for a separate vote on the debt limit. The engrossed measure would then be transmitted to the Senate for further action. The rule was repealed in the 107 th Congress, reinstated in the 108 th Congress, repealed again in the 112 th Congress, and reinstated in modified form in the 116 th Congress. As currently provided in House Rule XXVIII, the rule provides for a measure to automatically be engrossed and deemed to have been passed by the House by the same vote as the adoption by the House of the concurrent resolution on the budget if the resolution sets forth a level of the public debt that is different from the existing statutory limit. Rather than a specific level of debt, however, this measure would suspend the debt limit through the end of the budget year for the concurrent resolution on the budget (but not through the period covered by any outyears beyond the budget year). As with the earlier version of the rule, the engrossed measure would then be transmitted to the Senate for further action. The Senate has no special procedures concerning consideration of debt limit legislation. Revenue Legislation Article I, Section 8, of the Constitution gives Congress the power to levy "taxes, duties, imposts, and excises." Section 7 of this article, known as the Origination Clause, requires that all revenue measures originate in the House of Representatives. Legislation concerning taxes and tariffs falls under the jurisdiction of the House Ways and Means Committee and the Senate Finance Committee. Furthermore, House Rule XXI, clause 5, specifically bars the consideration of a tax or tariff measure reported from another committee (or an amendment containing a tax or tariff provision, including a Senate amendment, from being offered to a House measure reported by another committee). Neither the Origination Clause nor House Rule XXI, clause 5, applies to the consideration of legislation concerning receipts or collections, such as user fees, that are levied on a class that benefits from a particular service, program, or activity. Most revenues derive from existing provisions of the tax code or Social Security law, which continue in effect from year to year unless changed by Congress and are generally expected to produce increasing amounts of revenue in future years if the economy expands and incomes rise or the workforce grows. Nevertheless, Congress typically makes some changes in the tax laws each year, either to raise or lower revenues or to redistribute the tax burden. In enacting revenue legislation, Congress often includes provisions that establish or alter tax expenditures. The term tax expenditures is defined in the 1974 CBA to include revenue forgone due to deductions, exemptions, credits, and other exceptions to the basic tax structure. Tax expenditures are a means by which the federal government uses the tax code to pursue public policy objectives and can be regarded as alternatives to spending policy actions such as grants or loans. The Joint Committee on Taxation estimates the revenue effects of legislation changing tax expenditures, and it also publishes five-year projections of these provisions as an annual committee print. Congress may choose to act on revenue legislation pursuant to proposals in the President's budget. An early step in congressional work on revenue legislation is publication by CBO of its own estimates (developed in consultation with the Joint Committee on Taxation) of the revenue impact of the President's budget proposals. Revenue totals agreed to in a budget resolution can be used to establish the framework for subsequent action on revenue measures. A budget resolution, however, contains only revenue totals and total recommended changes; it does not allocate these totals among revenue sources, nor does it specify which provisions of the tax code are to be changed. The House and Senate may consider revenue measures under their regular legislative procedures, such as the chambers did for the Tax Reform Act of 1986. However, changes in revenue policy may also be made in the context of the reconciliation process (described in a separate section of this report), such as the Economic Growth and Tax Relief Reconciliation Act of 2001, the Jobs and Growth Tax Relief Reconciliation Act of 2003, and the Tax Cuts and Jobs Act of 2015. Spending Legislation Congressional budgetary procedures distinguish between two types of spending: discretionary spending (which is controlled through the annual appropriations process) and direct spending (also referred to as mandatory spending, for which the level of funding is controlled outside of the annual appropriations process). Discretionary and direct spending are both included in the President's budget and the congressional budget resolution, and they both provide statutory authority for agencies to enter into obligations for payments from the Treasury. The two forms of spending, however, are distinct in most other respects in terms of both their formulation and consideration. There are some notable exceptions to these distinctions, however, so that some procedures associated with direct spending are applied to particular discretionary spending programs and vice versa. Formulation. The basic unit for appropriations legislation is the spending account. In modern practice, regular appropriations legislation is drafted as unnumbered paragraphs that provide a lump-sum amount for each appropriations account. This lump sum provides a definite amount of budget authority that is available to finance activities or programs covered by that account for a certain period of availability for certain purposes consistent with statutory requirements or limitations. In many cases, appropriations for an agency may be provided in relatively few broad accounts, such as for "salaries and expenses," "operations," or "research." Direct spending, on the other hand, characteristically provides budget authority in the form of a requirement to make payments to eligible individual recipients according to a formula that establishes eligibility criteria and a program of benefits. The resulting overall level of outlays would be an aggregation of obligations for these individual benefits. In some cases (termed "appropriated entitlements"), appropriations legislation may be used to provide the means of financing, but, in practice, the requirements for funding such programs are determined through their authorizing legislation so that the Appropriations Committees have little or no discretion as to the amounts they provide. Committee j urisdiction. The Appropriations Committees have jurisdiction over discretionary spending for federal agencies and programs. In contrast, legislative committees (such as the Senate Committee on Health, Education, Labor and Pensions or the House Agriculture Committee), have jurisdiction over direct spending programs (including those funded in annual appropriations acts) through their jurisdiction over legislation concerning the structure of direct spending programs and their formulas regarding eligibility criteria and program of benefit payments. Frequency of d ecision m aking. Discretionary spending is provided in regular appropriations bills that are characteristically considered on an annual schedule. With some exceptions, budget authority provided in these measures is available for obligation only during a single fiscal year. Direct spending programs are typically established in permanent law that continues in effect until such time as it is revised or terminated, although in some cases (such as the Child Health Insurance Program and Temporary Assistance for Needy Families) the program may need periodic reauthorization. The scheduling for consideration of legislation making such changes is determined by congressional leadership through their agenda-setting authority rather than keyed to the beginning of the fiscal year. Enforcing s pending l evels in the b udget r esolution. The procedures Congress uses to enforce the policies set forth in the annual budget resolution differ somewhat for discretionary and direct spending programs. For both types of spending, Congress relies on allocations made under Section 302 of the 1974 CBA to ensure that new spending legislation reported by House and Senate committees conforms to parameters established in the budget resolution. Although this procedure is effective in limiting consideration of new legislationâboth annual appropriations measures and new entitlement legislationâit is not an effective means for controlling direct spending that results from existing laws. Changes to the level of direct spending requires the enactment of new legislation that would change formulas regarding eligibility criteria and program of benefit payments, either through the regular legislative process or some expedited procedure such as reconciliation (described in a later section of this report). Statutory c ontrols. Discretionary spending for FY2012-FY2021 is subject to spending limits set in the Budget Control Act, as revised. These spending limits are divided into separately enforced amounts for defense and nondefense. Direct spending is not capped, but new direct spending (or revenue) legislation is subject to the Statutory Pay-as-You-Go Act of 2010. This act requires that the net effect of direct spending and revenue legislation enacted for a fiscal year not cause the deficit to rise or the surplus to decrease over specified periods of time. The Budget Cycle For any given fiscal year, federal budgeting is often viewed as a cyclical activity that begins with the formulation of the President's annual budget request and concludes with the audit and review of expenditures spreading over a multiyear period. The main stages are formulation and submission to Congress of the President's budget; congressional consideration of budgetary measures, including the budget resolution, appropriations legislation, and other measures as necessary to establish statutory spending and revenue requirements; budget execution; and finally audit and review. While the basic steps continue from year to year, particular procedures and timing can vary in accordance with the President or Congress, as well as various other economic and political considerations. The budget cycle can be discussed within the context of the calendar year, the congressional session, and the fiscal year. The calendar year and congressional sessions exist largely side by side. Since the Budget and Accounting Act of 1921, the President has been required to submit his budget request for the next fiscal year at the beginning of the calendar year. Furthermore, since the ratification of the Twentieth Amendment to the U.S. Constitution in 1933, congressional sessions have begun on January 3 (unless a law is enacted setting a different day). Together, these two factors mean that the consideration of budgetary matters by Congress for the upcoming fiscal year is generally expected to start near the beginning of the calendar year. Since FY1977, the federal fiscal year has been October 1 through September 30, as set by the CBA. Because appropriations legislation typically provides budget authority to be obligated over the course of a single fiscal year, the focus of congressional action in the budget cycle is the consideration and enactment of new annual appropriations legislation before the expiration of prior enacted appropriations (although this process often stretches beyond the beginning of the fiscal year). This focus on the upcoming fiscal year (referred to as the budget year) is reflected in the President's budget proposal and budget resolution as well. Direct spending or revenue legislation, however, may have effective dates that are different from the beginning of the fiscal year. In addition, Section 300 of the CBA establishes a timetable with respect to target dates for certain actions in the congressional budget process. The budget process, however, is not just about a single fiscal year. While the focus for Congress is legislation pertaining to the upcoming fiscal year, it may also need to address legislation, such as supplemental appropriations for disaster relief, affecting the fiscal year in progress or long-term budget planning. Federal agencies also typically deal with multiple fiscal years at the same time: auditing of completed fiscal years, implementing the budget for the current fiscal year, seeking funds from Congress for the upcoming fiscal year, and planning for fiscal years after that. Taken as a whole then, budgetary activities from planning to execution related to the funding for a fiscal year can actually stretch over an extended period of two-and-a-half calendar years (or longer). The Executive Budget Process: Formulation and Content of the President's Budget The Constitution does not assign a formal role to the President in the federal budget process. It was largely left for agencies to develop and submit their own budget estimates to Congress individually. Although some Presidents made attempts to coordinate or limit agency budget estimates before they were communicated to Congress, such attempts were intermittent and uneven. This was changed by the Budget and Accounting Act of 1921, which created a statutory role for the President in federal budgeting by establishing a framework for a consolidated federal budget proposal to be developed by the President and submitted to Congress prior to the start of each fiscal year. By barring agencies from submitting their budget requests directly to Congress, and making the President responsible for a consolidated budget request, the act altered the institutional responsibilities of the office. The President's budget submission reflects the President's policy priorities and offers a set of recommendations regarding federal programs, projects, and activities funded through appropriations acts as well as any proposed changes to revenue and mandatory spending laws. Under current law, the President is required to submit a budget to Congress no later than the first Monday in February prior to the start of the fiscal year, but preparation typically begins at least nine or 10 months prior to that, approximately 18 months before the start of the fiscal year. OMB coordinates the development of the President's budget by issuing various circulars, memoranda, and other guidance documents to the heads of executive agencies. In particular, OMB Circular No. A-11 is issued annually. It is an extensive document that provides agencies with an overview of applicable budgetary laws, policies for the preparation and submission of budgetary estimates, and information on financial management and budget data systems. Circular A-11 also provides agencies with directions for budget execution and guidance regarding agency interaction with Congress and the public. When agencies begin work on the budget for a forthcoming fiscal year, Congress has not yet made final determinations for the next year. Consequently, agencies must begin the process of developing their budget estimates with a great deal of uncertainty about future economic conditions, presidential policies, and congressional actions. Agency requests are typically submitted to OMB in late summer or early fall and are reviewed by OMB on behalf of the President. Under the Government Performance and Results Act, agencies are required to link the formulation of their budgets with government performance through strategic plans, annual performance plans, and annual performance reports. OMB notifies agencies of decisions regarding their budget and performance plans through what is known as the "passback" and are given an opportunity to make appeals to the OMB director and, in some cases, to the President. Once OMB and the President make final decisions, federal agencies and departments must revise their budget requests and performance plans to conform with these decisions. The content of the budget submission is partly determined by law, but Title 31 authorizes the President to set forth the budget "in such form and detail" as he may determine. Over the years, there has been an increase in the types of information and explanatory material presented in the budget documents. In most years, the budget is submitted as a multi-volume set consisting of a main document setting forth the President's message to Congress and an analysis and justification of his major proposals. Additional supplementary documents typically provide account and program level details (the "Budget Appendix"), historical information ("Historical Tables"), and special budgetary analyses ("Analytical Perspectives"). The latter volume includes multiyear budget estimates that project spending and revenues where current policies are continued (called the "current services baseline") as well as spending and revenues under the President's proposed policy changes, among other things. In support of the President's appropriations requests, agencies prepare additional materials, frequently referred to as congressional budget justifications. These materials provide more detail than is contained in the President's budget documents and are used in support of agency testimony during Appropriations subcommittee hearings on the President's budget. The President is also required to submit a supplemental summary of the budget, referred to as the Mid-Session Review, before July 16 of each year. The Mid-Session Review is required to include any substantial changes in estimates of expenditures or receipts, as well as any changes or additions to proposals made in the earlier budget submission. The President may also submit other supplemental requests or revisions to Congress at other times during the year. The Congressional Budget Process Until the 1970s, congressional consideration of the multiple budgetary measures considered every year lacked any formal coordination. Instead, Congress considered these various spending and revenue measures separately, sometimes informally comparing them to proposals in the President's budget. That was changed by the CBA of 1974. The CBA provides for the adoption of a concurrent resolution on the budget, allowing Congress to make decisions about overall fiscal policy and priorities as well as to coordinate and establish guidelines for the consideration of various budget-related measures. This budget resolution sets aggregate budget policies and functional priorities for the upcoming budget year and for at least four additional fiscal years. In recent practice, budget resolutions have often covered a 10-year period. Because a concurrent resolution is not a law, the President cannot sign or veto it, and it does not have statutory effect, so no money can be raised or spent pursuant to it. The main purpose of the budget resolution is to establish the framework within which Congress considers separate revenue, spending, and other budget-related legislation. Revenue and spending amounts set in the budget resolution establish the basis for the enforcement of congressional budget policies through points of order . The budget resolution may also be used to initiate the reconciliation process for conforming existing revenue and direct spending laws to congressional budget policies (described below). The Budget Resolution: Formulation, Content, and Consideration For each fiscal year covered in a budget resolution, Section 301(a) of the CBA requires that it include budget aggregates and spending levels for each functional category of the budget. The aggregates in the budget resolution include: total revenues (and the amount by which the total is to be changed by legislative action); total new budget authority and outlays; the surplus or deficit; and public debt. With regard to each of the functional categories, the budget resolution must indicate for each fiscal year the amounts of new budget authority and outlays, and they must add up to the corresponding spending aggregates. Because they are considered off-budget, the aggregate amounts in the budget resolution do not reflect the revenues or spending of the Social Security trust funds, although these amounts are set forth separately in the budget resolution for purposes of Senate enforcement procedures. Similarly, the off-budget status of the Postal Service means that only an appropriation to subsidize certain mail costs is included in the budget resolution. In addition, the CBA requires that the report accompanying the budget resolution in each chamber include the following information: a comparison of total new budget authority, total outlays, total revenues, and the surplus or deficit for each fiscal year set forth in the budget resolution with the amounts requested in the budget submitted by the President; the estimated levels of total new budget authority and total outlays, divided between discretionary and mandatory amounts, for each major functional category; the economic assumptions that underlie the matters set forth in the budget resolution and any alternative assumptions and objectives the Budget Committee considered; information, data, and comparisons indicating the manner in which, and the basis on which, the Budget Committee determined each of the matters set forth in the resolution; the estimated levels of tax expenditures by major items and functional categories for the President's budget and in the budget resolution; and the committee spending allocations (commonly referred to as Section 302(a) allocations after the applicable section of the CBA). The budget resolution does not allocate funds among specific programs or accounts, but allocations of total spending in the budget resolution are made to committees with spending jurisdiction under Section 302(a). Major program assumptions underlying the functional amounts are often discussed in the reports accompanying the resolution. While the allocation to a committee is enforceable, these assumptions are not binding. Finally, Section 301(b) identifies certain additional matters that may be included in the budget resolution. Perhaps the most significant optional feature of a budget resolution is reconciliation directives (discussed below). The House and Senate Budget Committees are responsible for marking up and reporting the budget resolution. In the course of developing the budget resolution, the Budget Committees hold hearings, receive "views and estimates" reports from other committees, and obtain information from CBO. These "views and estimates" reports of House and Senate committees provide the Budget Committees with information on the preferences and legislative plans of congressional committees regarding budgetary matters within their jurisdiction. The extent to which the Budget Committees (and the House and Senate) consider particular programs when they act on the budget resolution varies from year to year. Specific programmatic funding decisions remain the responsibility of the Appropriations Committees and the committees with direct spending jurisdiction, but there is a strong likelihood that major issues will be discussed in markup, in the Budget Committees' reports, and during floor consideration of the budget resolution. Although any programmatic assumptions generated in this process are not binding on the committees of jurisdiction, they often influence the final outcome. Floor consideration of the budget resolution is guided by the statutory provisions in the CBA and by House and Senate rules and practices. In the House, the Rules Committee usually reports a special rule, which, once approved, establishes the terms and conditions under which the budget resolution is considered. This special rule typically specifies which amendments may be considered and the sequence in which they are to be offered and voted on. It has been the practice of the House to allow consideration of a few amendments (as substitutes for the entire resolution) that present broad policy choices. In the Senate, the consideration is less structured, but there are some notable constraints that apply to consideration of budget resolutions that do not apply to the consideration of legislation generally. In particular, Section 305 of the CBA limits debate on the initial consideration of a budget resolution and all amendments, debatable motions, and appeals to not more than 50 hours with the time equally divided between, and controlled by, the majority and the minority. The effect of the limit on debate time is that a cloture process requiring three-fifths support is not necessary to reach a final vote on a budget resolution, so the question can be decided by a simple majority. In addition, all amendments offered must be germane. Although there is a limit on debate time, there is no limit on the number of amendments so that consideration of amendments (as well as other motions and appeals) may continue but without debate (sometimes referred to as a "vote-a-rama"). Although no further debate time is available, the Senate has sometimes agreed by unanimous consent to accelerated voting procedures, allowing a nominal amount of time to identify and explain an amendment before voting. The CBA imposes no procedural limit on the duration of a vote-a-rama. The CBA provides that a motion to proceed to consideration of a conference report on a budget resolution in the Senate may be made at any time and that all debate on the conference report (and any amendments, debatable motions, or appeals) is limited to 10 hours. As with the limit on debate time for initial consideration, this limit means that in the Senate a cloture process requiring three-fifths support is not necessary to reach a final vote, so the question can be decided by a simple majority. Although the CBA also provides for House consideration of a conference report on a budget resolution, the House routinely considers a conference report under a special rule, usually limiting debate to one hour. Achievement of the policies set forth in the annual budget resolution depends on the subsequent legislative actions taken by Congress (and their approval or disapproval by the President), the performance of the economy, and technical considerations. Many of the factors that determine whether budgetary goals will be met are beyond the direct control of Congress. If economic conditionsâgrowth, employment levels, inflation, and so forthâvary significantly from projected levels, so too will actual levels of revenue and spending. Similarly, actual levels of spending or receipts may also differ substantially if the technical factors upon which estimates were based prove faulty, such as the number of participants who become eligible or apply for benefits under a direct spending program. Deeming Resolutions and Other Alternatives to the Budget Resolution If the House and Senate do not reach final agreement on a budget resolution it can complicate the budget process. In the absence of a budget resolution, the House and Senate often lack the basis for using points of order to limit the budgetary impact of legislation, and it may also be more difficult to coordinate consideration of the various measures with budgetary impact, both within each chamber and between the chambers, or to assess a measure's relationship to overall budgetary policies and goals. For example, Section 303 of the CBA prohibits consideration of budgetary legislation prior to adoption of the budget resolution. The House is permitted to consider regular appropriations bills after May 15 even if a budget resolution has not been adopted, but without a budget resolution there would be no enforceable upper limit on the overall level of appropriations. In the absence of a budget resolution, however, Congress may use alternative means to establish enforceable budget levels. When Congress has been late in reaching final agreement on a budget resolution or has not reached agreement at all, the House and Senate, often acting separately, have used legislative procedures to deal with enforcement issues on an ad hoc basis. These alternatives are typically referred to as "deeming resolutions," because they are deemed to serve in place of an agreement between the two chambers on an annual budget resolution for the purposes of establishing enforceable budget levels for the upcoming fiscal year (or multiple fiscal years). Often, a chamber initiates action on a deeming resolution so that it can subsequently begin consideration of appropriations measures with enforceable limits. Deeming resolutions have varied in terms of the legislative vehicle used to establish them, the timing and duration of their effect, and their content. Congress initially used simple resolutions in each chamber as the legislative vehicle for deeming resolutions (which is why they are referred to as resolutions). In the House, deeming resolutions have often been included in the same resolution providing for consideration of the first appropriations measure for the upcoming fiscal year. Deeming resolutions have also been included as provisions in lawmaking vehicles, such as appropriations bills or statutory budget enforcement legislation. For example, the Budget Control Act of 2011 included provisions for the purpose of budget enforcement for FY2012 and FY2013 to apply in the Senate only if Congress did not agree on a budget resolution for either of those years. These provisions allowed the Senate Budget Committee chair to file in the Congressional Record enforceable levels consistent with the statutory spending caps (for discretionary spending) and with baseline projections made by the CBO (for direct spending and revenues). Subsequent measures enacted to modify the spending limits included similar provisions for the House or Senate or both. Adopting a deeming resolution does not preclude later action to approve a budget resolution. In some cases when Congress has been late in reaching final agreement on a budget resolution, either or both chambers have chosen to use a deeming resolution in order to allow the appropriations process to move forward in a more timely and coordinated fashion and later superseded it through final adoption of a budget resolution. Deeming resolutions have typically included at least two things: (1) language setting forth or referencing specific enforceable budgetary levels (such as an aggregate spending limit or committee spending allocations) and (2) language stipulating that such levels are to be enforceable as if they had been included in a budget resolution. Even so, significant variations exist in their content, with some incorporating (either in their text or by reference) language mirroring everything in a budget resolution adopted in that chamber but not adopted in final form by both. Budget Enforcement Regardless of whether Congress establishes budgetary parameters in a budget resolution or some other legislative vehicle, in order for enforcement procedures to work, Congress must be able to relate the budgetary effect of an individual measure to these overall budget parameters to determine whether it would be consistent with those parameters. In order to do so, Congress has sought access to complete and up-to-date budgetary information. A baseline is a projection of federal spending and receipts during the current or future fiscal year under existing law. It provides a benchmark for measuring the impact of proposed changes to existing policies. Projections of the impact of proposed or pending legislation, referred to as scoring or scorekeeping , allow Congress to be informed about the budgetary consequences of its actions. When a measure with spending or revenue impact is under consideration, scoring information helps Members determine whether a bill or amendment would violate budgetary rules. Scoring also allows Congress to determine how best to achieve the budgetary goals. Section 312(a) of the CBA designates the House and Senate Budget Committees as the principal scorekeepers for Congress. They provide each chamber's presiding officer with the estimates needed to make decisions about points of order enforcing budgetary parameters. The Budget Committees also make periodic summary scorekeeping reports that are placed in the Congressional Record . CBO assists Congress in these activities by preparing cost estimates of legislation, which are included in committee reports, and scoring reports for the Budget Committees. The Joint Committee on Taxation also supports Congress by preparing estimates of the budgetary impact of revenue legislation. Although a budget resolution does not become law, Congress has a variety of tools that it may use for enforcing the decisions made in it. The CBA includes several provisions designed to encourage congressional compliance with the budget resolution. The House and Senate have also adopted other limits, as part of their standing rules, as procedural provisions in budget resolutions, or as a part of some other measure to establish other budgetary rules, limits, and requirements. In particular, the overall spending ceiling, revenue floor, and committee allocations of spending determined in a budget resolution are all enforceable by points of order in both the House and the Senate. In addition, Appropriations Committees are required to make subdivisions of their committee allocation, and these too are enforceable by points of order. Legislation breaching other budgetary limits or causing increases in the deficit would also generally be subject to points of order. Points of order are effectively prohibitions against certain types of legislation or other congressional actions being taken in the legislative process. Points of order are not self-enforcing, however. A point of order must be raised by a Member on the floor of the chamber before the presiding officer can rule on its application and thus for its enforcement. In the Senate, most points of order related to budget enforcement may be waived by a vote of three-fifths of all Senators duly chosen and sworn (60 votes if there are no vacancies). Although the presiding officer may rule on whether the point of order is well taken, in practice Senators will typically make a motion to waive the application of the rule. If the waiver motion fails, the presiding officer will then rule the provision or amendment out of order. As with other provisions of Senate rules, budget enforcement points of order may also be waived by unanimous consent. In the House, points of order, including those for budget enforcement, may be waived by the adoption of special rules, although other means (such as unanimous consent or suspension of the rules) may also be used. A waiver may be used to protect a bill, specified provision(s) in a bill, or an amendment from a point of order that could be raised against it. Waivers may be granted for one or more amendments even if they are not granted for the underlying bill. The House may waive the application of one or more specific points of order, or it may include a "blanket waiver," that is, a waiver that would protect a bill, provision, or amendment from any point of order. The Reconciliation Process Because a budget resolution is in the form of a concurrent resolution and is not enacted into law, any statutory changes concerning spending or revenues that are necessary to implement changes in budget policies must be enacted in separate legislation. Reconciliation is an optional legislative process that affords Congress an opportunity to use an expedited procedure to accomplish this. As provided in Section 310 of the CBA, reconciliation consists of several stages, beginning with congressional adoption of the budget resolution, that allow Congress to make policy changes within the jurisdiction of specified committees. The reconciliation process allows a certain measure (or measures) to be privileged for consideration and then allows Congress to use an expedited procedure when considering it. These procedures include directing committees to draft legislative language to fit specific desired budgetary outcomes, packaging language from multiple committees into omnibus legislation, limiting amending opportunities, and limiting the duration of debate on the Senate floor. If Congress intends to use the reconciliation process, reconciliation instructions to committees must first be included in the budget resolution. This feature alone places perhaps the most significant limitation on the use of reconciliation. A budget resolution can be adopted with a simple majority, but because bicameral agreement on the budget resolution is a necessary first step, the House and Senate must collectively agree on the need for reconciliation. If such an agreement can be achieved, reconciliation instructions can then trigger the second stage of the process by directing specific committees to develop and report legislation that would change laws within their respective jurisdictions related to spending, revenues, or the debt limit. If a committee is instructed to submit legislation reducing spending (or the deficit) by a specific amount, that amount is considered a minimum, meaning that a committee may report greater net savings. If a committee is instructed to submit legislation increasing revenues by a specific amount, that amount would also be considered a minimum. If a committee is instructed to decrease revenue, however, that amount would be considered a maximum. Although there is no procedural mechanism to ensure that legislation developed by a committee in response to reconciliation instructions will be in compliance with the instructed levels, if a committee does not report legislation or such legislation is not fully in compliance with the instructions, procedures are available that would allow either chamber to move forward with reconciliation nevertheless. For example, legislative language that falls within the jurisdiction of the noncompliant committee can be added to a reconciliation bill during floor consideration that will bring the bill into compliance. These methods vary by chamber. In the development of legislation in response to reconciliation instructions, the policy choices remain the prerogative of the committee. In some instances, reconciliation instructions have included particular policy options or assumptions regarding how an instructed committee might be expected to achieve its reconciliation target, but such language has not been considered binding or enforceable. Reconciliation instructions may further direct the committee to report the legislation for consideration in its respective chamber or to submit the legislation to the Budget Committee to be included in an omnibus reconciliation measure. If it will be included in an omnibus measure, the CBA requires that the Budget Committee report such a measure "without any substantive revision." Although reconciliation instructions may include target dates for committees to submit their legislative language, there is no requirement that the Budget Committee, in either chamber, report a reconciliation bill by that date. As a consequence, the target date included in reconciliation instructions is not necessarily indicative of a timetable for consideration of reconciliation legislation. In the House, floor consideration of reconciliation legislation has historically been governed by special rules reported from the House Rules Committee. These special rules have established the duration of a period of general debate as well as provided for a limited number of amendments (if any) that may be considered before the House votes on final passage. In the Senate, reconciliation legislation is eligible to be considered under expedited procedures. The Senate has interpreted the CBA to allow it to take up a reconciliation bill by agreeing to a nondebatable motion to proceed to its consideration. Because it is nondebatable, a majority can vote immediately to take it up so that a cloture process requiring three-fifth support is not necessary to reach a vote on the question of whether to take up a reconciliation bill. For a reconciliation bill, as with a budget resolution, a distinguishing feature is that there are limits on the consideration of the bill as well as any amendments. Section 310 of the CBA limits total debate time on a reconciliation measure including all amendments, motions, or appeals to 20 hours, equally divided and controlled by the majority and minority. As with a budget resolution, because the limit is on debate time (rather than all consideration), after the debate time has expired, Senators may continue to offer amendments (and make other motions or appeals) in a vote-a-rama although no further debate is allowed. Despite this, the limit on debate time has meant that, in practice, it has been unnecessary for a supermajority of the Senate to invoke cloture in order to reach a final vote on a reconciliation bill so that it can be passed by a simple majority. Perhaps the best-known limit on the content of reconciliation bills or amendments is the so-called Byrd Rule (Section 313 of the CBA). This rule prohibits including extraneous provisions in the measure or offering them as amendments. In general, this means that it prohibits the inclusion of nonbudgetary provisions in reconciliation legislation or provisions that are otherwise contrary to achieving the purposes established in reconciliation instructions. If a Byrd Rule point of order is sustained on the floor against a provision in the bill as reported by committee, the provision is stricken, but further consideration of the bill may continue. If the point of order is sustained against an amendment, the amendment's further consideration would not be in order. The CBA also places other limits on the content of reconciliation bill amendments. For example, all amendments must be germane to the bill, meaning that amendments generally cannot be used to expand the scope of a reconciliation bill beyond that of the provisions reported from an instructed committee (although a motion to commit or recommit that would bring a committee into compliance with its instructions would not be limited by this rule). Limits on amendments' budgetary impact also exist. Amendments, for example, may not increase the level of spending (or reduce the level of revenues) provided in the bill unless such effects are offset. Together, these rules have the effect of protecting the policy changes proposed by an instructed committee in ways that are not generally available under the Senate's regular procedures. In most cases, points of order related to limiting the content of reconciliation bills may be waived by a vote of three-fifths of all Senators. As with all legislation, any differences in the reconciliation legislation passed by the two chambers must be resolved before the bill can be sent to the President for approval or veto. Conference reports on a reconciliation bill, as for other legislation, are privileged for consideration by the Senate so that a majority can quickly vote to take up a conference report without first invoking cloture. The CBA, however, does provide that all debate on the conference report for a reconciliation bill (and any amendments, debatable motions, or appeals) is limited to 10 hours. In the House, the routine practice has been to consider a conference report under a special rule, usually limiting debate to one hour. Reconciliation first became a powerful legislative tool because reconciliation directives in a budget resolution could be used as a means to require specific legislative committees to make policy choices that would implement overall budgetary goals. Although there are constraints on the use of reconciliation, especially the need for bicameral agreement to initiate the procedure and points of order that limit the content of reconciliation bills, it has continued to be important because it has evolved to provide Congress with a procedure that has been employed to achieve a variety of budgetary and policy purposes. In particular, the limit on time for floor debate in the Senate has meant that major legislation can be enacted by majority vote without the need for a supermajority to first invoke cloture. The Annual Appropriations Process Discretionary spending is provided through a characteristically annual process in which Congress enacts regular appropriations measures. As an exercise of their constitutional authority to determine their rules of proceeding, both chambers have adopted rules that facilitate their ability to define and provide for consideration of these measures. One fundamental aspect of this has been to limit appropriations to purposes authorized by law. This requirement allows Congress to distinguish between legislation that addresses only questions of policy and that which addresses questions of funding and to provide for their separate consideration. In common usage, the terms used to describe these types of measures are authorizations and appropriations , respectively. An authorization may generally be described as a statutory provision that defines the authority of the government to act. It can establish or continue a federal agency, program, policy, project, or activity. Further, it may establish policies and restrictions and deal with organizational and administrative matters. It may also, explicitly or implicitly, authorize subsequent congressional action to provide appropriations. By itself, however, an authorization of discretionary spending does not provide funding for government activities. An appropriation may generally be described as a statutory provision that provides budget authority, thus permitting a federal agency to incur obligations and make payments from the Treasury for specified purposes, usually during a specified period of time. The authorizing and appropriating tasks are largely carried out by a division of labor within the committee system and preserved under House and Senate rules. Legislative committeesâsuch as the House Committee on Armed Services and the Senate Committee on Commerce, Science, and Transportationâare responsible for authorizing legislation related to the agencies and programs under their jurisdiction. Most standing committees have authorizing responsibilities. The Appropriations Committees of the House and Senate have jurisdiction over appropriations measures, including annual appropriations bills, supplemental appropriations bills, and continuing resolutions. Authorizing Legislation The primary purpose of authorization statutes or provisions is to provide authority for an agency to administer a program or engage in an activity. These are sometimes referred to as "organic" or "enabling" authorizations. It is generally understood that such statutory authority to administer a program or engage in an activity also provides an implicit authorization for Congress to appropriate for such program or activity. Appropriations may also be authorized explicitly for definite or indefinite amounts (i.e., "such sums as may be necessary"), either through separate legislation or as part of an organic statute (that is, the legislation that establishes the agency mission or programmatic parameters). These are sometimes referred to as "authorizations of appropriations." If such an authorization of appropriations is present, it may have to be renewed annually or periodically, and it may expire even though the underlying authority in an organic statute to administer such a program or engage in such an activity does not. Most federal agencies operate under a patchwork of authorizing statutes that govern various requirements and duties. Furthermore, there is no requirement in either chamber that the structure of authorizations mirror the account structure in appropriations bills. As a consequence, the burden of proving the authorization for funding carried in an appropriations bill falls on the proponents and managers of the bill. The rules of the House and Senate establish a general expectation that agencies and programs be authorized in law before an appropriation is made to fund them. An appropriation in the absence of a current authorization, in excess of an authorization ceiling, or for purposes not previously authorized by law is commonly called an "unauthorized appropriation." Conversely, while authorizations can impose a procedural limit on appropriations, Congress is not required to provide appropriations for an authorized discretionary spending program. House and Senate rules also preserve the distinction between authorizations and appropriations by prohibiting the inclusion of general legislative language in appropriations measures. The division between an authorization and an appropriation, however, is a procedural construct of House and Senate rules created to apply to congressional consideration. Consequently, the term unauthorized appropriations does not convey a legal meaning with regard to subsequent funding. If unauthorized appropriations or legislation remain in an appropriations measure as enacted, either because no one raised a point of order or the House or Senate waived the rules, the provision will still have the force of law. Unauthorized appropriations, if enacted, are therefore generally available for obligation or expenditure. Similarly, any legislative provisions enacted in an annual appropriations act also generally have the force of law for the duration of that act unless otherwise specified. Regular Appropriations Legislation An appropriation is a law passed by Congress that provides federal agencies legal authority to incur obligations and the Treasury Department authority to make payments for designated purposes. The power of appropriation derives from the Constitution, which in Article I, Section 9, provides that "[n]o money shall be drawn from the Treasury but in consequence of appropriations made by law." The power to appropriate is exclusively a legislative power; it functions as a limitation on the executive branch. An agency may not spend more than the amount appropriated to it, and it may use available funds only for the purposes and according to the conditions provided by Congress. The Constitution does not require annual appropriations, but since the First Congress the practice has been to make appropriations for a single fiscal year. Appropriations must be used (obligated) in the fiscal year for which they are provided unless the law provides that they shall be available for a longer period of time. All provisions in an appropriations act, such as limitations on the use of funds, expire at the end of the fiscal year unless the language of the act extends their period of effectiveness. Congress passes three main types of appropriations measures. Regular appropriations acts provide budget authority to agencies for the next fiscal year. Supplemental appropriations acts provide additional budget authority during the current fiscal year when the regular appropriation is insufficient or to finance activities not provided for in the regular appropriation. Continuing appropriations acts provide interim (or full-year) funding for agencies that have not received a regular appropriation. In a typical session, Congress acts on 12 regular appropriations bills. In recent years, Congress has merged two or more of the regular appropriations acts (sometimes termed "minibus" or "omnibus" appropriations legislation) for a fiscal year at some point during their consideration. In current practice, there are both statutory and procedural limits on the level of discretionary spending. A statutory limit on discretionary spending was established under the BCA for each fiscal year from FY2012 through FY2021, divided into separate defense and nondefense categories. A procedural limit on total appropriations can be established under a budget resolution or some alternate measure (see sections on the budget resolution and deeming resolutions in this report). Once the amount is established, it is allocated to the Appropriations Committee in each chamber pursuant to Section 302(a) of the CBA. Section 302(b) further requires the Appropriations Committee in each chamber to subdivide the total allocation among its subcommittees. By long-standing custom, appropriations measures originate in the House of Representatives. In the House, appropriations measures are originated by the Appropriations Committee (when it marks up or reports the measure) rather than being introduced by a Member beforehand and referred to the committee. Before the full committee acts on the bill, it is drafted and considered in the relevant Appropriations subcommittee. The House and Senate Appropriations Committees currently have 12 parallel subcommittees. The House subcommittees typically hold extensive hearings on appropriations requests shortly after the President's budget is submitted. In marking up their appropriations bills, the various subcommittees are then guided by the discretionary spending limits and the subdivisions made to them by the full committee under Section 302(b) of the CBA. The Senate usually considers appropriations measures after they have been passed by the House. When House action on appropriations bills is delayed, however, the Senate may expedite its actions by considering a Senate-numbered bill up to the stage of final passage. In this scenario, upon receipt of the House-passed bill in the Senate, it is amended with the text that the Senate has already agreed to (as a single amendment) and then passed by the Senate. The basic unit of an appropriation bill is an account. A single unnumbered paragraph in an appropriations act comprises one account, and all provisions of that paragraph pertain to that account and to no other unless the text expressly gives them broader scope. Any provision limiting the use of funds enacted in that paragraph is a restriction on that account alone. Over the years, appropriations have been consolidated into a relatively small number of accounts. It is not uncommon for a federal agency to have a single account for all its expenses of operation and additional accounts for other purposes such as construction. Accordingly, most appropriation accounts encompass a number of activities or projects. The appropriation sometimes includes directives or provisos that allot specific amounts to particular activities within the account, but the more common practice is to provide detailed information on the amounts intended for each activity in other sources, principally the committee reports accompanying the measures. In addition to the substantive limitations (and other provisions) associated with each account, each appropriations act has "general provisions" that apply to all of the accounts in a title or in the whole act. These general provisions appear as numbered sections, usually at the end of the title or the act. If not otherwise specified, an appropriation is for a single fiscal year so that the funds have to be obligated during the fiscal year for which they are provided and that they lapse if not obligated by the end of that year. Congress can also specify that an appropriation remains available for obligation for another period or even that it remain available until expended (termed "no-year" funds). Continuing Resolutions The routine activities of most federal agencies are funded annually by one or more of the regular appropriations acts. When action on the regular appropriations acts is delayed, however, one or more continuing appropriations acts (also referred to as a continuing resolution, or CR) may be used to provide interim budget authority in order to prevent a funding gap or the need for a shutdown of government activities. This may occur if regular annual appropriations acts are not enacted by the beginning of the fiscal year (October 1), or upon the expiration of a prior CR, until action on the regular appropriations acts is completed. In providing temporary funding, CRs have typically addressed several issues: Coverage. CRs have provided funding for certain activities. In current practice, this is typically specified with reference to the prior fiscal year's appropriations acts. Duration. CRs have provided budget authority for a specified duration of time. In some cases this may be as short as a single day, although a CR can provide funding for the remainder of the fiscal year. CRs include language that provides that the CR may be superseded by a regular appropriations act if it is enacted prior to the expiration of the CR. Rate. Since CRs typically provide funds for a limited period, they generally provide those funds based on a rate rather than a set amount. This rate can be set at the rate of operations funded in the previous year, it can be the previous rate of operations adjusted by some percentage, or it can be based on some other amount. This is in contrast to regular and supplemental appropriations acts, which generally provide specific amounts for each account. Other factors may also have an impact on interpreting the rate of operations, such as historical spending patterns or provisions commonly included in CRs that would require funds be apportioned at the rate necessary to avoid furloughs or limit funds for programs with high initial rates of operation or complete distribution of appropriations at a set time during a fiscal year (that is, all or most of the funds would be used at a single set time during the fiscal year). For mandatory spending that is funded through appropriations acts, CRs normally provide for a rate of funding sufficient to maintain program levels under current law since the levels necessary to meet obligations are independent of prior year actions. Funds expended under a CR are considered a portion of the total amount subsequently provided for the entire fiscal year when a regular appropriation bill is later enacted into law. Limits on u sage. CRs typically include language carrying forward any terms and conditions on the obligation of such budget authority in the prior fiscal year. CRs have also included language specifying that funding provided in the CR should be implemented so that only the most limited action allowed by law be taken with respect to providing for continuation of projects and activities in order to preserve congressional prerogative to later determine the amount available. Another typical feature of CRs is language to prohibit "new starts" in order to limit agencies, particularly the Department of Defense, the authority to make long-term commitments while operating under temporary funding or to prevent agencies from initiating or resuming any project or activity for which appropriations were not available during the prior fiscal year. Specific a djustments. The duration and amount of funds in the CR and purposes for which they may be used may be adjusted for specified activities or programsâfor example, to provide that funds for a certain program be based on an amount different from the rate for the previous year. These adjustments are commonly termed "anomalies." The Executive Budget Process: Budget Execution After enactment of a particular appropriation into law, federal agencies must attempt to interpret and apply its terms in order to execute their budgetary responsibilities. Agencies may generally obligate and expend funds subject to any conditions addressed by appropriations statutes guided by three general principles: the purpose(s) for which particular funds are appropriated, which may be expressed in statute in more or less detail and, in some cases, with certain restrictions; the time period during which funds are available for obligation and expenditureâsometimes referred to as the period of availability or duration of appropriations; and the amount of appropriated funds that may be obligated and expended. Within the contours of these statutory conditions on the availability of funds, agencies may nevertheless exercise some discretion regarding how funds are allocated and the pace at which funds are obligated and spent. The Antideficiency Act and Apportionment The so-called Antideficiency Act consists of a series of provisions and revisions incorporated into appropriations laws over the years relating to matters such as prohibited activities, the apportionment system, and budgetary reserves. These provisions, now codified in two locations in Title 31 of the United States Code , continue to play a pivotal role in the execution phase of the federal budget process, when the agencies actually spend the funds provided in appropriations laws. The origins of the Antideficiency Act date back to 1870, which provided: that it shall not be lawful for any department of the government to expend in any one fiscal year any sum in excess of appropriations made by Congress for that fiscal year, or to involve the government in any contract for the future payment of money in excess of such appropriations. Later modifications, particularly the Antideficiency Acts of 1905 and 1906, sought to strengthen the prohibitions of the 1870 law by expanding its provisions, adding restrictions on voluntary services for the government, and imposing criminal penalties for violations. These laws also established a new administrative process for budget execution, termed "apportionment," which requires that budget authority provided to federal agencies in appropriations acts be allocated in installments, rather than all at once. By apportioning funds, agencies can prevent operating at a rate that would expend all budget authority before the end of the fiscal year or end the year with substantial amounts unobligated. Four main types of prohibitions are contained in the Antideficiency Act, as amended: (1) making expenditures in excess of the appropriation; (2) making expenditures in advance of the appropriation; (3) accepting voluntary service for the United States, except in cases of emergency; and (4) making obligations or expenditures in excess of an apportionment or reapportionment or in excess of the amount permitted by agency regulation. One significant impact of the Antideficiency Act has been concern with the potential for a government shutdown as a response to a funding gap. In 1980 and early 1981, then-Attorney General Benjamin Civiletti issued opinions in two letters to the President. The "Civiletti Letters" have continued to have effect through guidance provided to federal agencies under various OMB circulars clarifying the limits of federal government activities upon the occurrence of a funding gap. The Civiletti Letters state that, in general, the Antideficiency Act requires that if Congress has enacted no appropriation beyond a specified period, the agency may make no contracts and obligate no further funds for activities associated with the lapsed appropriation except as "authorized by law." In addition, because no statute generally permits federal agencies to incur obligations without appropriations for the pay of employees, the Antideficiency Act does not, in general, authorize agencies to employ the services of their employees upon a lapse in appropriations, though it does permit agencies to fulfill certain legal obligations connected with the orderly termination of agency operations. The second letter, from January 1981, discusses the more complex issue of interpretation presented with respect to obligational authorities that are "authorized by law" but not manifested in appropriations acts. In a few cases, Congress has expressly authorized agencies to incur obligations without regard to available appropriations. More often, it is necessary to inquire under what circumstances statutes that vest particular functions in government agencies imply authority to create obligations for the execution of those functions despite a lack of current appropriations. It is under this guidance that exceptions may be made for activities involving "the safety of human life or the protection of property." As a consequence of these guidelines, when a funding gap occurs, executive agencies begin a shutdown of the affected projects and activities, including the furlough of non-excepted personnel. Reprogramming and Transfers The language by which funds are provided to federal agencies may vary in the level of discretion agencies have to determine how to spend the funds that have been provided. One type of discretion that commonly occurs is with respect to the purposes for which funds are available when appropriations are provided as a lump sum with little or no specificity in the appropriations statute. Even when the purpose of appropriations has been specified in detail, agencies have some flexibility to determine how they will use their available budgetary resources during the fiscal year. For example, agencies may shift funds from one purpose or object to another through reprogramming and transfers. Reprogramming is the shifting of funds within an appropriation account from one object class to another or from one program activity to another. Generally, agencies may make such shifts without additional statutory authority, but often they must provide some form of notification to the appropriations committees, authorizing committees, or both. A transfer is the shifting of budget authority from one appropriation account to another. Agencies may transfer budget authority only as specifically authorized by law. In most cases, transfers involve movement of funds within an agency or department, but they may also involve movement of funds between two or more agencies or departments. Transfer authority may be provided either in authorizing statutes or in appropriations acts. In addition, statutory provisions that provide transfer authority will require the agency to notify Congress. In general, both transferred and reprogrammed funds are subject to any limitations or conditions that were imposed by the appropriations act that originally made it available. All original restrictions remain in effect on transferred funds regardless of whether the funds in the receiving appropriations account have different restrictions or characteristics than the funds being transferred. In other words, limitations and restrictions follow the funds. Additional restrictions may be imposed by statutes to limit transfer or reprogramming authority in certain circumstances or with respect to certain agencies. Such restrictions may be specified in terms of an amount or a percentage. One example of a statutory restriction would be language that places a cap on the amounts that may be transferred. Such caps may be imposed on either the account from which funds are being transferred or the account receiving the transferred funds. These restrictions are commonly referred to as "not-to-exceed" limits. Impoundment Although an appropriation limits the amounts that can be spent, it also establishes the expectation that the available funds will be used to carry out authorized activities. Therefore, when an agency declines to use all or part of an appropriation, it deviates from the intentions of Congress. Although Presidents have sometimes asserted that they are not obligated to spend appropriated funds, Supreme Court decisionsâespecially Train v. City of New York (420 U.S. 35 [1975]) and the Impoundment Control Act of 1974 (ICA) âlimit their authority to reduce or withhold agency funding, by action or inaction, that prevents the obligation and expenditure of budget authority. An impoundment is an action or inaction by the President or a federal agency that delays or withholds the obligation or expenditure of budget authority provided in law. The ICA divides impoundments into two categories and establishes distinct procedures for each: A deferral delays the use of funds; a rescission is a presidential request that Congress rescind (cancel) an appropriation or other form of budget authority. Deferral and rescission are exclusive and comprehensive categories. That is, an impoundment is either a rescission or a deferralâit cannot be both or something else. As originally enacted, the ICA also created a process through which the President could propose a deferral of budget authority (meaning to delay its availability), and either the House or Senate could prevent the deferral by adopting a resolution disapproving it. The process by which a single chamber could prevent the exercise of authority delegated to the executive branch (known as a "legislative veto") was later found unconstitutional, however. Specifically, after the Supreme Court invalidated an unrelated one-house legislative veto in INS v. Chadha , 462 U.S. 919 (1983), the Court of Appeals for the D.C. Circuit applied the reasoning of Chadha to invalidate the deferral provisions in the ICA. This decision in City of New Haven v. United States (809 F.2d 900 [D.C. Cir. 1987]), also struck down the statutory authority of the President to make deferrals for policy reasons as inseverable from the unconstitutional legislative veto. After the court decisions, as well as GAO administrative interpretations of the issue, Congress amended the ICA in 1987 to eliminate the one-house disapproval and specify that deferrals be "permissible only: (1) to provide for contingencies; (2) to achieve savings made possible by or through changes in requirements for greater efficiency of operations; or (3) as specifically provided by law." In addition, deferrals could not be proposed for any period extending beyond the end of the fiscal year for which the proposal was reported. Prior to the enactment of the ICA, when the President withheld appropriated funds from obligation, there was no explicit statutory limit on the length of time that funds could be withheld. Under the ICA, however, whenever the President seeks to withhold funds from obligation, he must submit a special rescission message to Congress. The funds can be withheld only for the 45-day period specified in the act after the receipt of the special presidential message. The special presidential message to Congress must specify the amount to be rescinded, the accounts and programs involved, the estimated fiscal and program effects, and the reasons for the rescission. Multiple rescissions can be grouped in a single message. After the message has been received, Congress can choose to consider and pass a rescission bill that includes all, part, or none of the amount proposed by the President. The funds reserved pursuant to a rescission request must be released after the 45-day period unless Congress has completed action on a bill to rescind the budget authority. GAO is granted responsibilities to oversee and enforce executive branch compliance with the act. The ICA also created legislative procedures for the House and Senate to facilitate congressional review of presidential rescission requests. These procedures can effectively place a time limit on committee consideration and restrict floor debate in both chambers. The procedures discourage a filibuster in the Senate and eliminate the need for three-fifths support in the Senate to reach a final vote on the bill. These expedited procedures are available only during the 45-day period during which funds are withheld. The President can also propose cancellations of budget authority in ways other than the method described in the ICA for requesting rescissions. Funds requested for cancellation, however, may not be withheld from obligation pending congressional action. Although the Trump Administration has submitted rescission requests to Congress, during the two prior presidential Administrations, the President chose not to send rescission proposals pursuant to the ICA. Both President Barack Obama and President George W. Bush proposed cancellations of budget authority, but they chose not to do so by submitting a special message under the terms prescribed by the ICA. Conversely, Congress can, and often does, initiate the rescission of funds on its own and may choose to consider legislation rescinding funds using the regular legislative process. Rescissions are regularly included in appropriations bills, for example. Sequestration Sequestration was the principal means used to enforce statutory budget enforcement policies in place from 1985 through 2002, and it is the principal means used to enforce the requirements of the Statutory PAYGO Act and the statutory limits on discretionary spending under the BCA. In addition, sequestration is used to achieve a portion of the spending reductions required when deficit reduction legislation tied to the Joint Committee on Deficit Reduction was not enacted as provided by the BCA. Sequestration involves the issuance of a presidential order that permanently cancels non-exempt budgetary resources (except for revolving funds, special funds, trust funds, and certain offsetting collections) for the purpose of achieving a required amount of outlay savings to reduce the deficit. Once sequestration is triggered, spending reductions are made automatically. A sequestration order by the President is triggered by a report from the OMB director determining that a breach has occurred. To enforce the statutory discretionary spending caps, OMB first provides a preview report at the beginning of the calendar year, including calculations of any necessary adjustments to the existing limits for the upcoming fiscal year. Once discretionary spending is enacted, OMB evaluates that spending relative to the spending limits and determines whether sequestration is required. OMB is required to issue the final report within 15 calendar days after the congressional session adjourns sine die. For discretionary spending that becomes law after the session ends (e.g., the enactment of a supplemental appropriations measure), the OMB evaluation and any sequester order to enforce the limits would occur 15 days after enactment. For enforcement of the Statutory PAYGO Act, OMB records the budgetary effects of revenue and direct spending provisions enacted into law, including both costs and savings, on two PAYGO scorecards covering rolling five-year and 10-year periods (i.e., in each new session, the periods covered by the scorecards roll forward one fiscal year). OMB must issue an annual PAYGO report not later than 14 days (excluding weekends and holidays) after Congress adjourns to end a session. Once OMB finalizes the two PAYGO scorecards, it determines whether a violation of the PAYGO requirement has occurred (i.e., if a debit has been recorded for the budget year on either scorecard). If a breach occurs, the President issues a sequestration order that implements largely across-the-board cuts in nonexempt direct spending programs sufficient to remedy the violation. Spending for many programs is exempt from sequestration, and reductions in certain programs are limited by statutory provisions. Appendix A. Glossary of Budget Process Terms 302. The section of the Congressional Budget Act of 1974 that pertains to the distribution to House and Senate committees of new budget authority, entitlement authority, and outlays agreed to in a budget resolution. The allocation is usually included in the joint explanatory statement that accompanies the conference report on a budget resolution. Section 302(a) requires the allocation of the total spending in the budget resolution among the committees having jurisdiction over either direct or discretionary spending. When a budget resolution has not been adopted, the House and Senate (separately or jointly) may use some other means to establish committee allocations. Section 302(b) further requires the Appropriations Committee in each chamber to subdivide this total allocation among their subcommittees. Section 302(f) establishes a point of order against the consideration of a bill, amendment thereto, or conference thereon that would breach the appropriate 302(a) (or 302(b)) amount for the committee (or subcommittee). Apportionment . The action by which federal agencies, working with the Office of Management and Budget, establish a plan for budget authority made available by spending laws to be obligated over the course of a fiscal year consistent with all legal requirements. Apportionment is required under the Antideficiency Act in order to prevent the premature exhaustion of funds, and for certain kinds of budget authority, to achieve the most effective and economical use of those funds. Appropriation. Legislation that provides budget authority to allow federal agencies to incur obligations and to make payments out of the Treasury for specified purposes, usually during a specified period of time. Discretionary appropriations measures are under the jurisdiction of the House and Senate Committees on Appropriations. Authorization . A statutory provision that establishes or continues a federal agency, activity, or program. It may also establish policies and restrictions and deal with organizational and administrative matters. Authorizations may implicitly or explicitly authorize congressional action to provide appropriations for an agency, activity, or program. An explicit authorization of appropriations may apply to a single fiscal year, several fiscal years, or an indefinite period of time, and it may be for a specific level of funding or an indefinite amount. An authorization of appropriations does not provide budget authority, however, which must be provided in subsequent appropriations legislation. Furthermore, under House and Senate rules, an authorization is construed as a ceiling on the amounts that may be appropriated but not a minimum. Baseline . A projection of the levels of federal spending, revenues, and the resulting budgetary surpluses or deficits for the upcoming and subsequent fiscal years, taking into account laws enacted to date but not assuming any new policies. It provides a benchmark for measuring the budgetary effects of proposed changes in federal revenues or spending, assuming certain economic conditions. Baseline projections are prepared by the Congressional Budget Office. Budget a uthority . Authority provided by federal law to enter into financial obligations that will result in immediate or future outlays involving federal government funds. The main forms of budget authority are appropriations, entitlement authority, borrowing authority, and contract authority. It also includes authority to obligate and expend the proceeds of offsetting receipts and collections. Congress may make budget authority available for one year, several years, or an indefinite period, and it may specify definite or indefinite amounts. Budget r esolution . A concurrent resolution, provided under the Congressional Budget Act, that allows Congress to make decisions about overall fiscal policy and priorities, as well as coordinate and establish guidelines for the consideration of various budget related measures. Because a concurrent resolution is not a law, it cannot be signed or vetoed by the President. It therefore does not have statutory effect, so no money can be raised or spent pursuant to it. Revenue and spending amounts set in the budget resolution, however, establish the basis for the enforcement of congressional budget policies through points of order. Continuing r esolution (CR) . When annual appropriations acts are not enacted by the beginning of the fiscal year (October 1), one or more continuing appropriations acts may be enacted to provide temporary continued funding for covered programs and activities until action on regular appropriations acts is completed. Such funding is provided for a specified period of time, which may be extended through the enactment of subsequent CRs. Rather than providing a specific amount of funding, CRs typically allow agencies to operate at a specified rate. A continuing appropriations act is commonly referred to as a continuing resolution or CR because historically it has been in the form of a joint resolution rather than a bill, but there is no procedural requirement as to its form. In some cases, CRs have provided appropriations for an entire fiscal year. Deeming r esolution . An informal term that refers to a resolution or bill passed by one or both houses of Congress that provides an alternate means to establish the basis for budgetary enforcement actions in the absence of a budget resolution. Direct s pending . Direct spending is defined in the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, as consisting of entitlement authority (including appropriated entitlements), the Supplemental Nutrition Assistance Program, and any other budget authority (and resulting outlays) provided in laws other than appropriations acts. The term direct spending is often used interchangeably with the terms mandatory or entitlement spending . Examples include Social Security, Medicare, Medicaid, unemployment insurance, and military and federal civilian pensions. Discretionary s pending . The Balanced Budget and Emergency Deficit Control Act of 1985, as amended, defines discretionary spending as budget authority provided in annual appropriation acts and the outlays derived from that authority. Discretionary spending encompasses appropriations not mandated by existing law and therefore made available in appropriation acts in such amounts as Congress chooses. Discretionary spending for FY2012-FY2021 is limited by statutory spending limits enacted in the Budget Control Act of 2011, as revised. Fiscal y ear . The fiscal year for the federal government begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends: For example, FY2020 began on October 1, 2019, and ends on September 30, 2020. Functional c ategory. The President's budget and the congressional budget resolution classify federal budgetary activities (including budget authority, outlays, tax expenditures, and credit authority) into functional categories that represent major purposes or national needs being addressed (such as national defense, health, or general science, space, and technology). A functional category may be divided into two or more subfunctions, depending upon its scope or complexity. As a whole, functional categories provide a broad statement of budget priorities and facilitate an understanding of trends in related programs regardless of the agency administering them or type of financial transaction involved. The amounts in particular functional categories in the budget resolution are used as informational guidelines and are not enforced by points of order in the congressional budget process. Obligation . A commitment that creates a legal liability of the government to pay for goods and services and results in outlays either immediately or in the future. An agency incurs an obligation, for example, when it places an order, signs a contract, or awards a grant. When a payment is made, it liquidates the obligation. Appropriation laws usually make funds available for obligation for one or more fiscal years, but outlays may actually occur at some later time so that an agency's outlays in a particular year can come from obligations entered into in previous years as well as from its current appropriation. Offsetting r eceipts/ c ollections . Funds collected from the public primarily as a result of business-like activities (such as user fees or royalties paid to the government) that are levied on a class directly availing itself of, or directly subject to, a governmental service, program, or activity rather than on the general public. Such receipts and collections are recorded as negative amounts of spending rather than as revenues. In most cases, offsetting receipts require an explicit appropriation, while offsetting collections may be obligated without further legislative action. Outlays . The actual amount of payments from the Treasury that result from obligations entered into by executing provisions in appropriations and direct spending legislation that provides budget authority. Outlays consist of payments, usually by check, by electronic fund transfer or cash to liquidate obligations incurred in prior fiscal years as well as in the current fiscal year. Pay-as-you-go ( PAYGO ) . A budgetary enforcement mechanism originally set forth in the Budget Enforcement Act of 1990. It generally requires that any projected increase in the deficit due to changes in direct spending or revenues resulting from legislation must be offset by an equivalent amount of direct spending cuts or revenue increases to eliminate the net increase over either a six-year period covering the current fiscal year plus the ensuing five fiscal years or over an 11-year period covering the current fiscal year plus the ensuing 10 fiscal years. The statutory PAYGO mechanism currently in place was established under the Statutory Pay-As-You-Go Act of 2010. In the event that the net impact of changes to direct spending and revenue laws over the course of a session of Congress is projected to increase the deficit in either of these time periods, the President is required to issue a sequester order to eliminate it. In addition, there are currently PAYGO procedures in the House and Senate enforced by points of order on the floor to prevent the consideration of legislation that does not meet the requirement. Reconciliation. An expedited procedure, provided under Section 310 of the Congressional Budget Act, for changing existing revenue or direct spending laws to implement budgetary policies established in a budget resolution. Reconciliation must begin with language in a budget resolution instructing specific committees to report legislation adjusting revenues or spending within their respective jurisdictions by specified amounts, usually by a specified deadline. The Budget Act provides for expedited consideration of reconciliation bills in the Senate by limiting debate to 20 hours and limiting the content of amendments. Reprogramming. Shifting funds within an appropriation account from one object class to another or from one program activity to another. Generally, agencies may make such shifts without additional statutory authority, but often they must provide some form of notification to the appropriations committees, authorizing committees, or both. Rescission. A provision of law that repeals previously enacted budget authority. Under the Impoundment Control Act of 1974, the President may send a message to Congress requesting one or more rescissions and the reasons for doing so. If the President makes such a request, he may withhold the funds from obligation, but if Congress does not pass legislation approving the rescission within 45 days of continuous session after receiving the message, the funds must be made available for obligation. Congress may rescind all, part, or none of an amount proposed by the President and may also initiate rescission of funds not requested in a presidential message. Revenues. Funds collected from the public primarily as a result of the federal government's exercise of its sovereign powers. They include individual and corporate income taxes, excise taxes, customs duties, estate and gift taxes, fees and fines, payroll taxes for social insurance programs, and miscellaneous receipts. Scorekeeping. The process of both estimating the budgetary effects of pending legislation and comparing those effects to a baseline. The Congressional Budget Office prepares estimates of the budgetary effects of legislation, including both spending and revenue effects. The Budget Committees in the House and Senate act as official scorekeepers by providing the presiding officers in their respective chambers with the estimates needed to make decisions about points of order enforcing budgetary parameters. The Budget Committees also make periodic summary scorekeeping reports that are placed in the Congressional Record . Sequestration . A procedure in which the President is required to issue an order canceling budgetary resourcesâthat is, money available for obligation or spendingâto enforce a statutory budget requirement. Sequestered funds are no longer available for obligation or expenditure. The statutory PAYGO requirement and the statutory limits on discretionary spending are enforced by sequestration. In addition, the automatic spending reductions required by the Budget Control Act of 2011 are partially achieved through sequestration. Transfer. Shifting budget authority between two appropriation accounts. Agencies may transfer budget authority only as specifically authorized by law. Appendix B. Congressional Budget Process Actions Summary:	null	96	115,395	115,397	115,397	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Evolution of the Framework for Budgetary Decisionmaking Under the U.S. Constitution, Congress exercises the "power of the purse." This power is expressed through the application of several provisions. The power to lay and collect taxes and the power to borrow are among the enumerated powers of Congress under Article I, Section 8. Furthermore, Section 9 of Article I states that funds may be drawn from the Treasury only pursuant to appropriations made by law. By requiring the power of the purse to be exercised through the lawmaking process, the Constitution allows Congress to direct any budgetary actions that may be taken by the President and executive departments. The Constitution, however, does not prescribe how these legislative powers are to be exercised, nor does it expressly provide a specific role for the President with regard to budgetary matters. Instead, various statutes, congressional rules, practices, and precedents have been established over time to create a complex system in which multiple decisions and actions occur with varying degrees of coordination. As a consequence, there is no single "budget process" through which all budgetary decisions are made, and in any year there may be many budgetary measures necessary to establish or implement different aspects of federal fiscal policy. Under Article I, Section 5, "Each House may determine the Rules of its Proceedings," so it is left to the House and Senate to adapt and develop procedures and practices as needed to facilitate the consideration and enactment of legislation. Congress, however, is a dynamic institution that can, and does, change its rules, practices, and organization in order to achieve changing goals or overcome new obstacles. Since the early years of the Republic, there have been a number of notable milestones in the evolution of procedures and practices concerning the consideration, enactment, and execution of budgetary legislation. These milestones were often the result of congressional efforts to solve problems or promote outcomes and thus help to provide insight into when, how, or why current practices developed. Although early Congresses referred legislation to ad hoc committees, within a few years the House began to organize a system of standing committees with fixed jurisdictions and responsibility for different legislative issues. In the House, responsibility for revenue, spending, and debt were assigned to a standing Committee of Ways and Means beginning in the Fourth Congress (1795-1797). In the Senate, a Committee on Finance with jurisdiction over these matters was established as part of a standing committee system during the second session of the 14 th Congress (1815-1817). By creating a system in which legislation was categorized by its content, Congress laid the groundwork for establishing rules and practices to provide for the separate consideration of various budgetary measures. The House later created a separate standing Committee on Appropriations in 1865, and the Senate took similar action in 1867. The distinction between appropriations and general policy legislation appears to have been understood and practiced long before it was formally recognized in House or Senate rules, probably derived from earlier British and colonial practices. As congressional practices developed in the early 19 th century, this distinction was reflected in the designation of general appropriations measures as "supply bills," whose purpose was simply to supply funds to carry out government operations already defined in law. This distinction was also reinforced by the way in which they were considered by the House. Supply bills would be initially taken up as a list of objects of expenditure, with blanks rather than dollar amounts for associated expenditures, and the amounts filled in by action on the floor. Such bills were generally considered as little more than a matter of form, without extensive debate except for the purpose of filling in the blanks. The inclusion of substantial new legislative language in supply bills was generally believed to be inappropriate, as it might delay the provision of necessary funds or lead to the enactment of matters that might not otherwise become law. According to Hinds' Precedents , the origin of a formal rule mandating the separate consideration of policy legislation and appropriations can be traced to 1835, when the House discussed the increasing problem of delays in enacting appropriations. A significant part of this delay was attributed to the inclusion in such bills of "debatable matters of another character, new laws which created long debates," and a proposal was made to strip appropriation bills of "everything but were legitimate matters of appropriation, and such as were not â¦ made the subject of a separate bill." Although the proposal was not adopted at the time, at the beginning of the following Congress (25 th Congress, 1837-1839), language was added to the standing rules of the House that stated: No appropriation shall be reported in such general appropriation bill, or be in order as an amendment thereto, for any expenditure not previously authorized by law. By formulating the rule as a requirement that appropriations only be to provide funding to carry out activities for which previously enacted legislation had provided the statutory authority for an agency to act, the rule formally limited the scope of purposes for which appropriations could be provided. The House soon after developed a practice of striking provisions containing general legislation from appropriations bills. It was not until 1876, however, that the House adopted language in its rules formally restricting the inclusion of legislative language in appropriations bills. As adopted in 1876, the rule stated: No appropriation shall be reported in such general appropriation bills, or be in order as an amendment thereto, for any expenditure not previously authorized by law unless in continuation of appropriations for such public works and objects as are already in progress; nor shall any provision in any such bill or amendment thereto, changing existing law, be in order except such as, being germane to the subject matter of the bill, shall retrench expenditures. There were also important principles established in the 19 th century concerning the extent to which the actions of agencies to execute the budget could be directed or limited by Congress. Although the First Congress enacted all appropriations in 1789 in a single act divided into lump sums for broad categories of expenditure, within a few years, Congress began to exercise control over how federal agencies spent money by enacting increasingly more specific appropriations. An additional general statutory restriction on agency actions to allocate how funds were spent was imposed in 1809 by the enactment of the "purpose statute" which required that sums appropriated by law for each branch of expenditure in the several departments shall be solely applied to the objects for which they are respectively appropriated, and to no other. Agencies sometimes took actions that undermined congressional fiscal controls, however. In some instances, they obligated funds in anticipation of appropriations, thereby creating liabilities that Congress would feel compelled to ratify. In others, they would obligate appropriated funds at a rate that was likely to produce a need for additional funds before the end of the fiscal year, giving rise to what were termed "coercive deficiencies." As a result, Congress enacted the first "antideficiency" provision in 1870 stating that it shall not be lawful for any department of the government to expend in any one fiscal year any sum in excess of appropriations made by Congress for that fiscal year, or to involve the government in any contract for the future payment of money in excess of such appropriations. In addition to prohibiting agencies from obligating payments in the absence of appropriations, antideficiency laws also established the requirement that agencies establish plans to apportion available funds over the course of the fiscal year in order to avoid deficiencies. Although some Presidents made attempts to coordinate or limit agency budget estimates before they were communicated to Congress, such attempts were intermittent and uneven. This changed with the enactment of the Budget and Accounting Act of 1921. It created a statutory role for the President by requiring agencies to submit their budget requests to him and, in turn, for him to submit a consolidated request to Congress. The President's budget request became the center of a new relationship between the President and federal agencies and, consequently, of the agencies and Congress. The act also established the Bureau of the Budget (now the Office of Management and Budget [OMB]) to assist the President and the General Accounting Office (now the Government Accountability Office [GAO]) to serve as an independent auditor of government budgetary activities. Another significant change in federal budgeting in the 20 th century was the advent of direct (or mandatory) spending laws. Although there were 19 th century antecedents in which legislation was enacted to entitle an eligible class of recipients (such as veterans) to certain payments, such spending was not common. Beginning with Social Security in the 1930s, Congress began to enact broad-based spending legislation for which the level of spending was not controlled through the appropriations process. Instead, payments were required to be made to all eligible persons as prescribed in the law. In effect, such programs were designed to establish an expectation of stable payments for a class of individual recipients (even when the class or payments might change over time), rather than have the aggregate level of spending for the program subject to control through annual appropriations decisions. Such programs have grown to comprise the majority of all federal outlays. Until the 1970s, congressional consideration of the multiple budgetary measures considered in a given year as a whole lacked any formal coordination. Instead, Congress considered these various budgetary measures separately, sometimes informally comparing them to proposals in the President's budget. That was changed by the Congressional Budget Act of 1974 (CBA). The CBA provides for the adoption of a concurrent resolution on the budget that allows Congress to make decisions about overall fiscal policy and priorities and coordinate and establish guidelines for the consideration of various budget-related measures. Because a concurrent resolution is not a lawâthe President cannot sign or veto itâthe budget resolution does not have statutory effect, so no money is raised or spent pursuant to it. Revenue and spending levels set in the budget resolution, however, do establish the basis for enforcement of congressional budget policies through points of order. The CBA also established the House and Senate Budget Committees as well as CBO to provide Congress with an independent source for budgetary information, particularly estimates concerning the cost of proposed legislation. Since 1985, budgetary decisionmaking has also been subject to various budget control statutes designed to restrict congressional budgetary actions or implement particular budgetary outcomes in order to reduce the budget deficit, limit spending, or prevent deficit increases. The mechanisms included in these acts sought to supplement and modify the existing budget process and also added statutory budget controls, in some cases seeking to require future deficit reduction legislation or limit future congressional budgetary actions and in some cases seeking to preserve deficit reduction achieved in accompanying legislation. Chief among the laws enacted were the Balanced Budget and Emergency Deficit Control Act of 1985 and the Budget Enforcement Act of 1990. The Balanced Budget and Emergency Deficit Control Act of 1985 did not include legislation that reduced the deficit but instead established a statutory requirement for the gradual reduction and elimination of budget deficits over a six-year period. The act specified annual deficit limits and set forth a specific process for the cancellation of spending by requiring the President to issue an order (termed a sequester order) to enforce the annual deficit limit in the event that compliance was not achieved through legislation. The deficit targets and timetable were modified and extended in the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987. With the Budget Enforcement Act of 1990, Congress changed the focus of budgetary control. While the 1985 Balanced Budget and Emergency Deficit Control Act had focused on enforcing deficit targets through unspecified future legislation, the Budget Enforcement Act was enacted as part of deficit reduction legislation and focused instead on inhibiting future legislation that would undo the savings. Budgetary enforcement under the Budget Enforcement Act was based on the implementation of pay-as-you-go (PAYGO) procedures to limit any increase in the deficit due to new direct spending or revenue legislation and limit discretionary spending through statutory spending caps. These budget control mechanisms sought to preserve the deficit reduction achieved in the accompanying legislation rather than force subsequent legislation. As originally enacted, these mechanisms were to be in force for a period of five years, but they were modified and extended twice. In 1993, they were extended through 1998 in the Omnibus Budget Reconciliation Act of 1993, and in 1997, they were extended through 2002 in the Budget Enforcement Act of 1997. In 2010, Congress reinstated PAYGO in the Statutory Pay-As-You-Go Act of 2010. In 2011, the Budget Control Act (BCA) reestablished statutory limits on discretionary spending, divided into separately enforceable defense and nondefense limits, for FY2012-FY2021. Several measures have subsequently been enacted that changed the spending limits or enforcement procedures included in the BCA. Basic Concepts of Federal Budgeting The federal budget is a compilation of numbers reflecting the receipts, spending, borrowing, and debt of the government. Receipts come largely from various taxes but are also derived from other sources as well (such as leases, licenses, and other fees). Spending involves such concepts as budget authority, obligations, outlays, and offsetting collections. Although the amounts are computed according to previously established rules and conventions, they do not always conform to the way receipts and spending might be accounted for in a different context. When Congress appropriates money, it provides budget authority , that is, statutory authority to enter into obligations for which payments will be made by the Treasury. Budget authority may also be provided in legislation that does not go through the annual appropriations process (such as direct spending legislation). The key congressional spending decisions relate to the obligations that agencies are authorized to incur during a fiscal year (amount, purpose, and timing), not to the outlays that result. Obligations occur when agencies enter into contracts, submit purchase orders, employ personnel, and so forth. Outlays occur when obligations are liquidated, primarily through the issuance of checks, electronic fund transfers, or the disbursement of cash. The provision of budget authority is the key point at which Congress exercises control over federal spending. Congress generally does not exercise direct control over outlays related to executive or judicial branch spending. The amount of outlays in a given year derive in part from new budget authority enacted in that year but also from "carryover" budget authority provided in prior years. The relation of budget authority to outlays varies from program to program and depends on the outlay or "spendout" rate, that is, the rate at which budget authority provided by Congress is obligated and payments are disbursed. Various factors can have an impact on the spendout rate for a particular program or activity. In a program with a high spendout rate, most new budget authority is expended during the fiscal year. If the spendout rate is low, however, most of the outlays occur in later years. Spendout rates are generally sensitive to program characteristics and vary over time for certain projects. The outlay levels associated with budget enforcement during the consideration of legislation reflect the projected amount that will be outlayed during the first year that budget authority is available. If actual payments turn out to be higher than the budget estimate, outlays can be above the projected level. The President and Congress can control outlays indirectly by deciding on the amount of budget authority provided by limiting the amount that can actually be obligated (termed an "obligation limit") or by limiting the period during which the funds may be obligated. The receipts of the federal government may be accounted for in the budget as revenues or as "offsets" against outlays. Revenues result from the exercise of the government's sovereign power to tax. In contrast, receipts from businesslike or market transactions, such as Medicare premiums or various fees collected by government agencies, are deducted from outlays. Similarly, income from the sale of certain assets is also treated as an offset to spending. These offsets may be classified as offsetting collections or offsetting receipts. In most cases, offsetting collections may be obligated without further legislative action, while offsetting receipts require an explicit appropriation to be available for obligation. Most such receipts are offsets against the outlays of the appropriation account for the agency that collects the money, but in the case of some activities (such as offshore oil leases), the receipts are offset against the total outlays of the government. Scope of the Budget The budget consists of two main groups of funds: federal funds and trust funds . Federal fundsâwhich comprise mainly the general fundâlargely derive from the general exercise of the taxing power and general borrowing. For the most part, these funds are not designated in law for any specific program or agency, although there are also special funds that are designated with respect to their source or purpose. Trust funds are established under the terms of statutes that specifically designate them as such and are available to fund only specific purposes. For example, the Social Security trust funds (the Old-Age and Survivors Insurance Fund and the Disability Insurance Fund), which are the largest of the trust funds, comprise revenues collected under a Social Security payroll tax and are used to pay for Social Security benefits and related purposes. The unified budget includes both the federal funds and the trust funds. In some circumstances, a trust fund may accumulate more funds in a given time period than are necessary to meet current obligations. Such balances are held in the form of federal debt, so that while a trust fund may be said to have a surplus, by holding it for future use in the form of federal debt, it is effectively borrowed by federal funds and counted as part of federal debt. Thus, a trust fund surplus can offset the overall budget deficit, but because it is included in the federal debt, the annual increase in the debt invariably exceeds the amount of the budget deficit. For the same reason, it is possible for the federal debt to rise even when the federal government has a budget surplus. Federal budgeting is mostly calculated based on cash flow so that capital and operating expenses are not segregated in the budget. Hence, expenditures for the operations of government agencies and expenditures for the acquisition of long-life assets (such as buildings, roads, and weapons systems) both appear in the budget in terms of their outlays. Proposals have been made from time to time to divide the budget into separate capital and operating accounts. While these proposals have not been adopted, the budget does provide information showing the investment and operating outlays of the government. One portion of the federal budget that is not based on cash flow is the budgeted levels for direct and guaranteed loans by the federal government. The Federal Credit Reform Act of 1990 made fundamental changes in the budgetary treatment of direct loans and guaranteed loans. The reform, which first became effective for FY1992, shifted the accounting basis for federally provided or guaranteed credit from the amount of cash flowing into or out of the Treasury to the estimated subsidy cost of the loans. Credit reform entails complex procedures for estimating these subsidy costs and new accounting mechanisms for recording various loan transactions. The changes have had only a modest impact on budget totals but a substantial impact on budgeting for particular loan programs. The budget totals do not include all the financial transactions of the federal government, however. The main exclusions fall into two categoriesâoff-budget entities and government-sponsored enterprises (GSEs). Off-budget entities are excluded by law from the budget totals. The receipts and disbursements of the Social Security trust funds, as well as spending for the Postal Service Fund, are presented separate from the budget totals. Thus, the budget reports two deficit (or surplus) amountsâone excluding the Social Security trust funds and the Postal Service Fund and the other (the unified budget) including these entities. In most cases, the latter is the main focus of discussion in both the President's budget and the congressional budget process. The transactions of government-owned corporations (excluding the Postal Service), as well as revolving funds, are included in the budget on a net basis. That is, the amount shown in the budget is the difference between their receipts and outlays, not the total activity of the enterprise or revolving fund. If, for example, a revolving fund has annual income of $150 million and disbursements of $200 million, the budget would report $50 million as net outlays. The Federal Reserve System has never been subjected to the appropriations process, and aside from the recording of transfers of Federal Reserve earnings as budget receipts, its financial operations have always been excluded from the federal budget. It is funded by fees and the income generated by securities it owns. Annual appropriations approval of Federal Reserve spending plans is not required, a result of a provision of the Federal Reserve Act, which stipulates that the Federal Reserve Board's assessment "shall not be construed to be Government funds or appropriated moneys." If the Federal Reserve's income exceeds its expenses, its net earnings are transferred to the Treasury and recorded as "miscellaneous receipts." GSEs have historically been excluded from the budget because they were deemed to be non-governmental entities. Although they were established by the federal law, the federal government did not own any equity in these enterprises, most of which received their financing from private sources, and their budgets were not reviewed by the President or Congress in the same manner as other programs. Most of these enterprises engaged in credit activities. They borrowed funds in capital markets and lent money to homeowners, farmers, and others. Financial statements of the GSEs were published in the President's budget. Although some GSEs continue to operate on this basis, the economic downturn and credit instability that occurred in 2008 fundamentally changed the status of two GSEs that play a significant role in the home mortgage market: Fannie Mae and Freddie Mac. In September 2008, the Federal Housing Finance Agency placed the two entities in conservatorship, thereby subjecting them to control by the federal government until the conservatorship is brought to an end. Debt Limit Legislation When the receipts collected by the federal government are not sufficient to cover outlays, it is necessary for the Treasury to finance the shortfall through the sale of various types of debt instruments to the public and federal agencies. Federal borrowing is subject to a statutory limit on public debt (referred to as the debt limit or debt ceiling). When the federal government operates with a budget deficit, or otherwise increases the level of debt necessary (such as to allow federal trust funds to hold surpluses), the response has been for the public debt limit to be increased to meet that need. The frequency of congressional action to raise the debt limit has ranged in the past from several times in one year to once in several years. In recent years, Congress has chosen to suspend the debt limit for a set amount of time instead of raising the debt limit by a fixed dollar amount. When a suspension period ends, the debt limit is reestablished at a dollar level that accommodates the level of federal debt issued during the suspension period. Legislation to raise the public debt limit falls under the jurisdiction of the House Ways and Means Committee and the Senate Finance Committee. In some cases, Congress has combined other legislative provisions with changes in the debt limit. For example, the Senate amended a House-passed bill raising the debt limit to add the Balanced Budget and Emergency Deficit Control Act of 1985. The House added debt limit provisions (as well as other matters) to an unrelated Senate-passed measure to create the Budget Control Act of 2011. In addition, debt limit provisions may be included in reconciliation legislation (described in a separate section of this report). In the 96 th Congress (1979-1980), the House amended its rules to provide for the automatic engrossment of a measure increasing the debt limit upon final adoption of a budget resolution. The rule (commonly referred to as the Gephardt Rule after Representative Richard Gephardt of Missouri) was intended to facilitate quick action on debt limit increases by deeming such a measure as passed by the House by the same vote as the final adoption of the budget resolution, thereby avoiding the need for a separate vote on the debt limit. The engrossed measure would then be transmitted to the Senate for further action. The rule was repealed in the 107 th Congress, reinstated in the 108 th Congress, repealed again in the 112 th Congress, and reinstated in modified form in the 116 th Congress. As currently provided in House Rule XXVIII, the rule provides for a measure to automatically be engrossed and deemed to have been passed by the House by the same vote as the adoption by the House of the concurrent resolution on the budget if the resolution sets forth a level of the public debt that is different from the existing statutory limit. Rather than a specific level of debt, however, this measure would suspend the debt limit through the end of the budget year for the concurrent resolution on the budget (but not through the period covered by any outyears beyond the budget year). As with the earlier version of the rule, the engrossed measure would then be transmitted to the Senate for further action. The Senate has no special procedures concerning consideration of debt limit legislation. Revenue Legislation Article I, Section 8, of the Constitution gives Congress the power to levy "taxes, duties, imposts, and excises." Section 7 of this article, known as the Origination Clause, requires that all revenue measures originate in the House of Representatives. Legislation concerning taxes and tariffs falls under the jurisdiction of the House Ways and Means Committee and the Senate Finance Committee. Furthermore, House Rule XXI, clause 5, specifically bars the consideration of a tax or tariff measure reported from another committee (or an amendment containing a tax or tariff provision, including a Senate amendment, from being offered to a House measure reported by another committee). Neither the Origination Clause nor House Rule XXI, clause 5, applies to the consideration of legislation concerning receipts or collections, such as user fees, that are levied on a class that benefits from a particular service, program, or activity. Most revenues derive from existing provisions of the tax code or Social Security law, which continue in effect from year to year unless changed by Congress and are generally expected to produce increasing amounts of revenue in future years if the economy expands and incomes rise or the workforce grows. Nevertheless, Congress typically makes some changes in the tax laws each year, either to raise or lower revenues or to redistribute the tax burden. In enacting revenue legislation, Congress often includes provisions that establish or alter tax expenditures. The term tax expenditures is defined in the 1974 CBA to include revenue forgone due to deductions, exemptions, credits, and other exceptions to the basic tax structure. Tax expenditures are a means by which the federal government uses the tax code to pursue public policy objectives and can be regarded as alternatives to spending policy actions such as grants or loans. The Joint Committee on Taxation estimates the revenue effects of legislation changing tax expenditures, and it also publishes five-year projections of these provisions as an annual committee print. Congress may choose to act on revenue legislation pursuant to proposals in the President's budget. An early step in congressional work on revenue legislation is publication by CBO of its own estimates (developed in consultation with the Joint Committee on Taxation) of the revenue impact of the President's budget proposals. Revenue totals agreed to in a budget resolution can be used to establish the framework for subsequent action on revenue measures. A budget resolution, however, contains only revenue totals and total recommended changes; it does not allocate these totals among revenue sources, nor does it specify which provisions of the tax code are to be changed. The House and Senate may consider revenue measures under their regular legislative procedures, such as the chambers did for the Tax Reform Act of 1986. However, changes in revenue policy may also be made in the context of the reconciliation process (described in a separate section of this report), such as the Economic Growth and Tax Relief Reconciliation Act of 2001, the Jobs and Growth Tax Relief Reconciliation Act of 2003, and the Tax Cuts and Jobs Act of 2015. Spending Legislation Congressional budgetary procedures distinguish between two types of spending: discretionary spending (which is controlled through the annual appropriations process) and direct spending (also referred to as mandatory spending, for which the level of funding is controlled outside of the annual appropriations process). Discretionary and direct spending are both included in the President's budget and the congressional budget resolution, and they both provide statutory authority for agencies to enter into obligations for payments from the Treasury. The two forms of spending, however, are distinct in most other respects in terms of both their formulation and consideration. There are some notable exceptions to these distinctions, however, so that some procedures associated with direct spending are applied to particular discretionary spending programs and vice versa. Formulation. The basic unit for appropriations legislation is the spending account. In modern practice, regular appropriations legislation is drafted as unnumbered paragraphs that provide a lump-sum amount for each appropriations account. This lump sum provides a definite amount of budget authority that is available to finance activities or programs covered by that account for a certain period of availability for certain purposes consistent with statutory requirements or limitations. In many cases, appropriations for an agency may be provided in relatively few broad accounts, such as for "salaries and expenses," "operations," or "research." Direct spending, on the other hand, characteristically provides budget authority in the form of a requirement to make payments to eligible individual recipients according to a formula that establishes eligibility criteria and a program of benefits. The resulting overall level of outlays would be an aggregation of obligations for these individual benefits. In some cases (termed "appropriated entitlements"), appropriations legislation may be used to provide the means of financing, but, in practice, the requirements for funding such programs are determined through their authorizing legislation so that the Appropriations Committees have little or no discretion as to the amounts they provide. Committee j urisdiction. The Appropriations Committees have jurisdiction over discretionary spending for federal agencies and programs. In contrast, legislative committees (such as the Senate Committee on Health, Education, Labor and Pensions or the House Agriculture Committee), have jurisdiction over direct spending programs (including those funded in annual appropriations acts) through their jurisdiction over legislation concerning the structure of direct spending programs and their formulas regarding eligibility criteria and program of benefit payments. Frequency of d ecision m aking. Discretionary spending is provided in regular appropriations bills that are characteristically considered on an annual schedule. With some exceptions, budget authority provided in these measures is available for obligation only during a single fiscal year. Direct spending programs are typically established in permanent law that continues in effect until such time as it is revised or terminated, although in some cases (such as the Child Health Insurance Program and Temporary Assistance for Needy Families) the program may need periodic reauthorization. The scheduling for consideration of legislation making such changes is determined by congressional leadership through their agenda-setting authority rather than keyed to the beginning of the fiscal year. Enforcing s pending l evels in the b udget r esolution. The procedures Congress uses to enforce the policies set forth in the annual budget resolution differ somewhat for discretionary and direct spending programs. For both types of spending, Congress relies on allocations made under Section 302 of the 1974 CBA to ensure that new spending legislation reported by House and Senate committees conforms to parameters established in the budget resolution. Although this procedure is effective in limiting consideration of new legislationâboth annual appropriations measures and new entitlement legislationâit is not an effective means for controlling direct spending that results from existing laws. Changes to the level of direct spending requires the enactment of new legislation that would change formulas regarding eligibility criteria and program of benefit payments, either through the regular legislative process or some expedited procedure such as reconciliation (described in a later section of this report). Statutory c ontrols. Discretionary spending for FY2012-FY2021 is subject to spending limits set in the Budget Control Act, as revised. These spending limits are divided into separately enforced amounts for defense and nondefense. Direct spending is not capped, but new direct spending (or revenue) legislation is subject to the Statutory Pay-as-You-Go Act of 2010. This act requires that the net effect of direct spending and revenue legislation enacted for a fiscal year not cause the deficit to rise or the surplus to decrease over specified periods of time. The Budget Cycle For any given fiscal year, federal budgeting is often viewed as a cyclical activity that begins with the formulation of the President's annual budget request and concludes with the audit and review of expenditures spreading over a multiyear period. The main stages are formulation and submission to Congress of the President's budget; congressional consideration of budgetary measures, including the budget resolution, appropriations legislation, and other measures as necessary to establish statutory spending and revenue requirements; budget execution; and finally audit and review. While the basic steps continue from year to year, particular procedures and timing can vary in accordance with the President or Congress, as well as various other economic and political considerations. The budget cycle can be discussed within the context of the calendar year, the congressional session, and the fiscal year. The calendar year and congressional sessions exist largely side by side. Since the Budget and Accounting Act of 1921, the President has been required to submit his budget request for the next fiscal year at the beginning of the calendar year. Furthermore, since the ratification of the Twentieth Amendment to the U.S. Constitution in 1933, congressional sessions have begun on January 3 (unless a law is enacted setting a different day). Together, these two factors mean that the consideration of budgetary matters by Congress for the upcoming fiscal year is generally expected to start near the beginning of the calendar year. Since FY1977, the federal fiscal year has been October 1 through September 30, as set by the CBA. Because appropriations legislation typically provides budget authority to be obligated over the course of a single fiscal year, the focus of congressional action in the budget cycle is the consideration and enactment of new annual appropriations legislation before the expiration of prior enacted appropriations (although this process often stretches beyond the beginning of the fiscal year). This focus on the upcoming fiscal year (referred to as the budget year) is reflected in the President's budget proposal and budget resolution as well. Direct spending or revenue legislation, however, may have effective dates that are different from the beginning of the fiscal year. In addition, Section 300 of the CBA establishes a timetable with respect to target dates for certain actions in the congressional budget process. The budget process, however, is not just about a single fiscal year. While the focus for Congress is legislation pertaining to the upcoming fiscal year, it may also need to address legislation, such as supplemental appropriations for disaster relief, affecting the fiscal year in progress or long-term budget planning. Federal agencies also typically deal with multiple fiscal years at the same time: auditing of completed fiscal years, implementing the budget for the current fiscal year, seeking funds from Congress for the upcoming fiscal year, and planning for fiscal years after that. Taken as a whole then, budgetary activities from planning to execution related to the funding for a fiscal year can actually stretch over an extended period of two-and-a-half calendar years (or longer). The Executive Budget Process: Formulation and Content of the President's Budget The Constitution does not assign a formal role to the President in the federal budget process. It was largely left for agencies to develop and submit their own budget estimates to Congress individually. Although some Presidents made attempts to coordinate or limit agency budget estimates before they were communicated to Congress, such attempts were intermittent and uneven. This was changed by the Budget and Accounting Act of 1921, which created a statutory role for the President in federal budgeting by establishing a framework for a consolidated federal budget proposal to be developed by the President and submitted to Congress prior to the start of each fiscal year. By barring agencies from submitting their budget requests directly to Congress, and making the President responsible for a consolidated budget request, the act altered the institutional responsibilities of the office. The President's budget submission reflects the President's policy priorities and offers a set of recommendations regarding federal programs, projects, and activities funded through appropriations acts as well as any proposed changes to revenue and mandatory spending laws. Under current law, the President is required to submit a budget to Congress no later than the first Monday in February prior to the start of the fiscal year, but preparation typically begins at least nine or 10 months prior to that, approximately 18 months before the start of the fiscal year. OMB coordinates the development of the President's budget by issuing various circulars, memoranda, and other guidance documents to the heads of executive agencies. In particular, OMB Circular No. A-11 is issued annually. It is an extensive document that provides agencies with an overview of applicable budgetary laws, policies for the preparation and submission of budgetary estimates, and information on financial management and budget data systems. Circular A-11 also provides agencies with directions for budget execution and guidance regarding agency interaction with Congress and the public. When agencies begin work on the budget for a forthcoming fiscal year, Congress has not yet made final determinations for the next year. Consequently, agencies must begin the process of developing their budget estimates with a great deal of uncertainty about future economic conditions, presidential policies, and congressional actions. Agency requests are typically submitted to OMB in late summer or early fall and are reviewed by OMB on behalf of the President. Under the Government Performance and Results Act, agencies are required to link the formulation of their budgets with government performance through strategic plans, annual performance plans, and annual performance reports. OMB notifies agencies of decisions regarding their budget and performance plans through what is known as the "passback" and are given an opportunity to make appeals to the OMB director and, in some cases, to the President. Once OMB and the President make final decisions, federal agencies and departments must revise their budget requests and performance plans to conform with these decisions. The content of the budget submission is partly determined by law, but Title 31 authorizes the President to set forth the budget "in such form and detail" as he may determine. Over the years, there has been an increase in the types of information and explanatory material presented in the budget documents. In most years, the budget is submitted as a multi-volume set consisting of a main document setting forth the President's message to Congress and an analysis and justification of his major proposals. Additional supplementary documents typically provide account and program level details (the "Budget Appendix"), historical information ("Historical Tables"), and special budgetary analyses ("Analytical Perspectives"). The latter volume includes multiyear budget estimates that project spending and revenues where current policies are continued (called the "current services baseline") as well as spending and revenues under the President's proposed policy changes, among other things. In support of the President's appropriations requests, agencies prepare additional materials, frequently referred to as congressional budget justifications. These materials provide more detail than is contained in the President's budget documents and are used in support of agency testimony during Appropriations subcommittee hearings on the President's budget. The President is also required to submit a supplemental summary of the budget, referred to as the Mid-Session Review, before July 16 of each year. The Mid-Session Review is required to include any substantial changes in estimates of expenditures or receipts, as well as any changes or additions to proposals made in the earlier budget submission. The President may also submit other supplemental requests or revisions to Congress at other times during the year. The Congressional Budget Process Until the 1970s, congressional consideration of the multiple budgetary measures considered every year lacked any formal coordination. Instead, Congress considered these various spending and revenue measures separately, sometimes informally comparing them to proposals in the President's budget. That was changed by the CBA of 1974. The CBA provides for the adoption of a concurrent resolution on the budget, allowing Congress to make decisions about overall fiscal policy and priorities as well as to coordinate and establish guidelines for the consideration of various budget-related measures. This budget resolution sets aggregate budget policies and functional priorities for the upcoming budget year and for at least four additional fiscal years. In recent practice, budget resolutions have often covered a 10-year period. Because a concurrent resolution is not a law, the President cannot sign or veto it, and it does not have statutory effect, so no money can be raised or spent pursuant to it. The main purpose of the budget resolution is to establish the framework within which Congress considers separate revenue, spending, and other budget-related legislation. Revenue and spending amounts set in the budget resolution establish the basis for the enforcement of congressional budget policies through points of order . The budget resolution may also be used to initiate the reconciliation process for conforming existing revenue and direct spending laws to congressional budget policies (described below). The Budget Resolution: Formulation, Content, and Consideration For each fiscal year covered in a budget resolution, Section 301(a) of the CBA requires that it include budget aggregates and spending levels for each functional category of the budget. The aggregates in the budget resolution include: total revenues (and the amount by which the total is to be changed by legislative action); total new budget authority and outlays; the surplus or deficit; and public debt. With regard to each of the functional categories, the budget resolution must indicate for each fiscal year the amounts of new budget authority and outlays, and they must add up to the corresponding spending aggregates. Because they are considered off-budget, the aggregate amounts in the budget resolution do not reflect the revenues or spending of the Social Security trust funds, although these amounts are set forth separately in the budget resolution for purposes of Senate enforcement procedures. Similarly, the off-budget status of the Postal Service means that only an appropriation to subsidize certain mail costs is included in the budget resolution. In addition, the CBA requires that the report accompanying the budget resolution in each chamber include the following information: a comparison of total new budget authority, total outlays, total revenues, and the surplus or deficit for each fiscal year set forth in the budget resolution with the amounts requested in the budget submitted by the President; the estimated levels of total new budget authority and total outlays, divided between discretionary and mandatory amounts, for each major functional category; the economic assumptions that underlie the matters set forth in the budget resolution and any alternative assumptions and objectives the Budget Committee considered; information, data, and comparisons indicating the manner in which, and the basis on which, the Budget Committee determined each of the matters set forth in the resolution; the estimated levels of tax expenditures by major items and functional categories for the President's budget and in the budget resolution; and the committee spending allocations (commonly referred to as Section 302(a) allocations after the applicable section of the CBA). The budget resolution does not allocate funds among specific programs or accounts, but allocations of total spending in the budget resolution are made to committees with spending jurisdiction under Section 302(a). Major program assumptions underlying the functional amounts are often discussed in the reports accompanying the resolution. While the allocation to a committee is enforceable, these assumptions are not binding. Finally, Section 301(b) identifies certain additional matters that may be included in the budget resolution. Perhaps the most significant optional feature of a budget resolution is reconciliation directives (discussed below). The House and Senate Budget Committees are responsible for marking up and reporting the budget resolution. In the course of developing the budget resolution, the Budget Committees hold hearings, receive "views and estimates" reports from other committees, and obtain information from CBO. These "views and estimates" reports of House and Senate committees provide the Budget Committees with information on the preferences and legislative plans of congressional committees regarding budgetary matters within their jurisdiction. The extent to which the Budget Committees (and the House and Senate) consider particular programs when they act on the budget resolution varies from year to year. Specific programmatic funding decisions remain the responsibility of the Appropriations Committees and the committees with direct spending jurisdiction, but there is a strong likelihood that major issues will be discussed in markup, in the Budget Committees' reports, and during floor consideration of the budget resolution. Although any programmatic assumptions generated in this process are not binding on the committees of jurisdiction, they often influence the final outcome. Floor consideration of the budget resolution is guided by the statutory provisions in the CBA and by House and Senate rules and practices. In the House, the Rules Committee usually reports a special rule, which, once approved, establishes the terms and conditions under which the budget resolution is considered. This special rule typically specifies which amendments may be considered and the sequence in which they are to be offered and voted on. It has been the practice of the House to allow consideration of a few amendments (as substitutes for the entire resolution) that present broad policy choices. In the Senate, the consideration is less structured, but there are some notable constraints that apply to consideration of budget resolutions that do not apply to the consideration of legislation generally. In particular, Section 305 of the CBA limits debate on the initial consideration of a budget resolution and all amendments, debatable motions, and appeals to not more than 50 hours with the time equally divided between, and controlled by, the majority and the minority. The effect of the limit on debate time is that a cloture process requiring three-fifths support is not necessary to reach a final vote on a budget resolution, so the question can be decided by a simple majority. In addition, all amendments offered must be germane. Although there is a limit on debate time, there is no limit on the number of amendments so that consideration of amendments (as well as other motions and appeals) may continue but without debate (sometimes referred to as a "vote-a-rama"). Although no further debate time is available, the Senate has sometimes agreed by unanimous consent to accelerated voting procedures, allowing a nominal amount of time to identify and explain an amendment before voting. The CBA imposes no procedural limit on the duration of a vote-a-rama. The CBA provides that a motion to proceed to consideration of a conference report on a budget resolution in the Senate may be made at any time and that all debate on the conference report (and any amendments, debatable motions, or appeals) is limited to 10 hours. As with the limit on debate time for initial consideration, this limit means that in the Senate a cloture process requiring three-fifths support is not necessary to reach a final vote, so the question can be decided by a simple majority. Although the CBA also provides for House consideration of a conference report on a budget resolution, the House routinely considers a conference report under a special rule, usually limiting debate to one hour. Achievement of the policies set forth in the annual budget resolution depends on the subsequent legislative actions taken by Congress (and their approval or disapproval by the President), the performance of the economy, and technical considerations. Many of the factors that determine whether budgetary goals will be met are beyond the direct control of Congress. If economic conditionsâgrowth, employment levels, inflation, and so forthâvary significantly from projected levels, so too will actual levels of revenue and spending. Similarly, actual levels of spending or receipts may also differ substantially if the technical factors upon which estimates were based prove faulty, such as the number of participants who become eligible or apply for benefits under a direct spending program. Deeming Resolutions and Other Alternatives to the Budget Resolution If the House and Senate do not reach final agreement on a budget resolution it can complicate the budget process. In the absence of a budget resolution, the House and Senate often lack the basis for using points of order to limit the budgetary impact of legislation, and it may also be more difficult to coordinate consideration of the various measures with budgetary impact, both within each chamber and between the chambers, or to assess a measure's relationship to overall budgetary policies and goals. For example, Section 303 of the CBA prohibits consideration of budgetary legislation prior to adoption of the budget resolution. The House is permitted to consider regular appropriations bills after May 15 even if a budget resolution has not been adopted, but without a budget resolution there would be no enforceable upper limit on the overall level of appropriations. In the absence of a budget resolution, however, Congress may use alternative means to establish enforceable budget levels. When Congress has been late in reaching final agreement on a budget resolution or has not reached agreement at all, the House and Senate, often acting separately, have used legislative procedures to deal with enforcement issues on an ad hoc basis. These alternatives are typically referred to as "deeming resolutions," because they are deemed to serve in place of an agreement between the two chambers on an annual budget resolution for the purposes of establishing enforceable budget levels for the upcoming fiscal year (or multiple fiscal years). Often, a chamber initiates action on a deeming resolution so that it can subsequently begin consideration of appropriations measures with enforceable limits. Deeming resolutions have varied in terms of the legislative vehicle used to establish them, the timing and duration of their effect, and their content. Congress initially used simple resolutions in each chamber as the legislative vehicle for deeming resolutions (which is why they are referred to as resolutions). In the House, deeming resolutions have often been included in the same resolution providing for consideration of the first appropriations measure for the upcoming fiscal year. Deeming resolutions have also been included as provisions in lawmaking vehicles, such as appropriations bills or statutory budget enforcement legislation. For example, the Budget Control Act of 2011 included provisions for the purpose of budget enforcement for FY2012 and FY2013 to apply in the Senate only if Congress did not agree on a budget resolution for either of those years. These provisions allowed the Senate Budget Committee chair to file in the Congressional Record enforceable levels consistent with the statutory spending caps (for discretionary spending) and with baseline projections made by the CBO (for direct spending and revenues). Subsequent measures enacted to modify the spending limits included similar provisions for the House or Senate or both. Adopting a deeming resolution does not preclude later action to approve a budget resolution. In some cases when Congress has been late in reaching final agreement on a budget resolution, either or both chambers have chosen to use a deeming resolution in order to allow the appropriations process to move forward in a more timely and coordinated fashion and later superseded it through final adoption of a budget resolution. Deeming resolutions have typically included at least two things: (1) language setting forth or referencing specific enforceable budgetary levels (such as an aggregate spending limit or committee spending allocations) and (2) language stipulating that such levels are to be enforceable as if they had been included in a budget resolution. Even so, significant variations exist in their content, with some incorporating (either in their text or by reference) language mirroring everything in a budget resolution adopted in that chamber but not adopted in final form by both. Budget Enforcement Regardless of whether Congress establishes budgetary parameters in a budget resolution or some other legislative vehicle, in order for enforcement procedures to work, Congress must be able to relate the budgetary effect of an individual measure to these overall budget parameters to determine whether it would be consistent with those parameters. In order to do so, Congress has sought access to complete and up-to-date budgetary information. A baseline is a projection of federal spending and receipts during the current or future fiscal year under existing law. It provides a benchmark for measuring the impact of proposed changes to existing policies. Projections of the impact of proposed or pending legislation, referred to as scoring or scorekeeping , allow Congress to be informed about the budgetary consequences of its actions. When a measure with spending or revenue impact is under consideration, scoring information helps Members determine whether a bill or amendment would violate budgetary rules. Scoring also allows Congress to determine how best to achieve the budgetary goals. Section 312(a) of the CBA designates the House and Senate Budget Committees as the principal scorekeepers for Congress. They provide each chamber's presiding officer with the estimates needed to make decisions about points of order enforcing budgetary parameters. The Budget Committees also make periodic summary scorekeeping reports that are placed in the Congressional Record . CBO assists Congress in these activities by preparing cost estimates of legislation, which are included in committee reports, and scoring reports for the Budget Committees. The Joint Committee on Taxation also supports Congress by preparing estimates of the budgetary impact of revenue legislation. Although a budget resolution does not become law, Congress has a variety of tools that it may use for enforcing the decisions made in it. The CBA includes several provisions designed to encourage congressional compliance with the budget resolution. The House and Senate have also adopted other limits, as part of their standing rules, as procedural provisions in budget resolutions, or as a part of some other measure to establish other budgetary rules, limits, and requirements. In particular, the overall spending ceiling, revenue floor, and committee allocations of spending determined in a budget resolution are all enforceable by points of order in both the House and the Senate. In addition, Appropriations Committees are required to make subdivisions of their committee allocation, and these too are enforceable by points of order. Legislation breaching other budgetary limits or causing increases in the deficit would also generally be subject to points of order. Points of order are effectively prohibitions against certain types of legislation or other congressional actions being taken in the legislative process. Points of order are not self-enforcing, however. A point of order must be raised by a Member on the floor of the chamber before the presiding officer can rule on its application and thus for its enforcement. In the Senate, most points of order related to budget enforcement may be waived by a vote of three-fifths of all Senators duly chosen and sworn (60 votes if there are no vacancies). Although the presiding officer may rule on whether the point of order is well taken, in practice Senators will typically make a motion to waive the application of the rule. If the waiver motion fails, the presiding officer will then rule the provision or amendment out of order. As with other provisions of Senate rules, budget enforcement points of order may also be waived by unanimous consent. In the House, points of order, including those for budget enforcement, may be waived by the adoption of special rules, although other means (such as unanimous consent or suspension of the rules) may also be used. A waiver may be used to protect a bill, specified provision(s) in a bill, or an amendment from a point of order that could be raised against it. Waivers may be granted for one or more amendments even if they are not granted for the underlying bill. The House may waive the application of one or more specific points of order, or it may include a "blanket waiver," that is, a waiver that would protect a bill, provision, or amendment from any point of order. The Reconciliation Process Because a budget resolution is in the form of a concurrent resolution and is not enacted into law, any statutory changes concerning spending or revenues that are necessary to implement changes in budget policies must be enacted in separate legislation. Reconciliation is an optional legislative process that affords Congress an opportunity to use an expedited procedure to accomplish this. As provided in Section 310 of the CBA, reconciliation consists of several stages, beginning with congressional adoption of the budget resolution, that allow Congress to make policy changes within the jurisdiction of specified committees. The reconciliation process allows a certain measure (or measures) to be privileged for consideration and then allows Congress to use an expedited procedure when considering it. These procedures include directing committees to draft legislative language to fit specific desired budgetary outcomes, packaging language from multiple committees into omnibus legislation, limiting amending opportunities, and limiting the duration of debate on the Senate floor. If Congress intends to use the reconciliation process, reconciliation instructions to committees must first be included in the budget resolution. This feature alone places perhaps the most significant limitation on the use of reconciliation. A budget resolution can be adopted with a simple majority, but because bicameral agreement on the budget resolution is a necessary first step, the House and Senate must collectively agree on the need for reconciliation. If such an agreement can be achieved, reconciliation instructions can then trigger the second stage of the process by directing specific committees to develop and report legislation that would change laws within their respective jurisdictions related to spending, revenues, or the debt limit. If a committee is instructed to submit legislation reducing spending (or the deficit) by a specific amount, that amount is considered a minimum, meaning that a committee may report greater net savings. If a committee is instructed to submit legislation increasing revenues by a specific amount, that amount would also be considered a minimum. If a committee is instructed to decrease revenue, however, that amount would be considered a maximum. Although there is no procedural mechanism to ensure that legislation developed by a committee in response to reconciliation instructions will be in compliance with the instructed levels, if a committee does not report legislation or such legislation is not fully in compliance with the instructions, procedures are available that would allow either chamber to move forward with reconciliation nevertheless. For example, legislative language that falls within the jurisdiction of the noncompliant committee can be added to a reconciliation bill during floor consideration that will bring the bill into compliance. These methods vary by chamber. In the development of legislation in response to reconciliation instructions, the policy choices remain the prerogative of the committee. In some instances, reconciliation instructions have included particular policy options or assumptions regarding how an instructed committee might be expected to achieve its reconciliation target, but such language has not been considered binding or enforceable. Reconciliation instructions may further direct the committee to report the legislation for consideration in its respective chamber or to submit the legislation to the Budget Committee to be included in an omnibus reconciliation measure. If it will be included in an omnibus measure, the CBA requires that the Budget Committee report such a measure "without any substantive revision." Although reconciliation instructions may include target dates for committees to submit their legislative language, there is no requirement that the Budget Committee, in either chamber, report a reconciliation bill by that date. As a consequence, the target date included in reconciliation instructions is not necessarily indicative of a timetable for consideration of reconciliation legislation. In the House, floor consideration of reconciliation legislation has historically been governed by special rules reported from the House Rules Committee. These special rules have established the duration of a period of general debate as well as provided for a limited number of amendments (if any) that may be considered before the House votes on final passage. In the Senate, reconciliation legislation is eligible to be considered under expedited procedures. The Senate has interpreted the CBA to allow it to take up a reconciliation bill by agreeing to a nondebatable motion to proceed to its consideration. Because it is nondebatable, a majority can vote immediately to take it up so that a cloture process requiring three-fifth support is not necessary to reach a vote on the question of whether to take up a reconciliation bill. For a reconciliation bill, as with a budget resolution, a distinguishing feature is that there are limits on the consideration of the bill as well as any amendments. Section 310 of the CBA limits total debate time on a reconciliation measure including all amendments, motions, or appeals to 20 hours, equally divided and controlled by the majority and minority. As with a budget resolution, because the limit is on debate time (rather than all consideration), after the debate time has expired, Senators may continue to offer amendments (and make other motions or appeals) in a vote-a-rama although no further debate is allowed. Despite this, the limit on debate time has meant that, in practice, it has been unnecessary for a supermajority of the Senate to invoke cloture in order to reach a final vote on a reconciliation bill so that it can be passed by a simple majority. Perhaps the best-known limit on the content of reconciliation bills or amendments is the so-called Byrd Rule (Section 313 of the CBA). This rule prohibits including extraneous provisions in the measure or offering them as amendments. In general, this means that it prohibits the inclusion of nonbudgetary provisions in reconciliation legislation or provisions that are otherwise contrary to achieving the purposes established in reconciliation instructions. If a Byrd Rule point of order is sustained on the floor against a provision in the bill as reported by committee, the provision is stricken, but further consideration of the bill may continue. If the point of order is sustained against an amendment, the amendment's further consideration would not be in order. The CBA also places other limits on the content of reconciliation bill amendments. For example, all amendments must be germane to the bill, meaning that amendments generally cannot be used to expand the scope of a reconciliation bill beyond that of the provisions reported from an instructed committee (although a motion to commit or recommit that would bring a committee into compliance with its instructions would not be limited by this rule). Limits on amendments' budgetary impact also exist. Amendments, for example, may not increase the level of spending (or reduce the level of revenues) provided in the bill unless such effects are offset. Together, these rules have the effect of protecting the policy changes proposed by an instructed committee in ways that are not generally available under the Senate's regular procedures. In most cases, points of order related to limiting the content of reconciliation bills may be waived by a vote of three-fifths of all Senators. As with all legislation, any differences in the reconciliation legislation passed by the two chambers must be resolved before the bill can be sent to the President for approval or veto. Conference reports on a reconciliation bill, as for other legislation, are privileged for consideration by the Senate so that a majority can quickly vote to take up a conference report without first invoking cloture. The CBA, however, does provide that all debate on the conference report for a reconciliation bill (and any amendments, debatable motions, or appeals) is limited to 10 hours. In the House, the routine practice has been to consider a conference report under a special rule, usually limiting debate to one hour. Reconciliation first became a powerful legislative tool because reconciliation directives in a budget resolution could be used as a means to require specific legislative committees to make policy choices that would implement overall budgetary goals. Although there are constraints on the use of reconciliation, especially the need for bicameral agreement to initiate the procedure and points of order that limit the content of reconciliation bills, it has continued to be important because it has evolved to provide Congress with a procedure that has been employed to achieve a variety of budgetary and policy purposes. In particular, the limit on time for floor debate in the Senate has meant that major legislation can be enacted by majority vote without the need for a supermajority to first invoke cloture. The Annual Appropriations Process Discretionary spending is provided through a characteristically annual process in which Congress enacts regular appropriations measures. As an exercise of their constitutional authority to determine their rules of proceeding, both chambers have adopted rules that facilitate their ability to define and provide for consideration of these measures. One fundamental aspect of this has been to limit appropriations to purposes authorized by law. This requirement allows Congress to distinguish between legislation that addresses only questions of policy and that which addresses questions of funding and to provide for their separate consideration. In common usage, the terms used to describe these types of measures are authorizations and appropriations , respectively. An authorization may generally be described as a statutory provision that defines the authority of the government to act. It can establish or continue a federal agency, program, policy, project, or activity. Further, it may establish policies and restrictions and deal with organizational and administrative matters. It may also, explicitly or implicitly, authorize subsequent congressional action to provide appropriations. By itself, however, an authorization of discretionary spending does not provide funding for government activities. An appropriation may generally be described as a statutory provision that provides budget authority, thus permitting a federal agency to incur obligations and make payments from the Treasury for specified purposes, usually during a specified period of time. The authorizing and appropriating tasks are largely carried out by a division of labor within the committee system and preserved under House and Senate rules. Legislative committeesâsuch as the House Committee on Armed Services and the Senate Committee on Commerce, Science, and Transportationâare responsible for authorizing legislation related to the agencies and programs under their jurisdiction. Most standing committees have authorizing responsibilities. The Appropriations Committees of the House and Senate have jurisdiction over appropriations measures, including annual appropriations bills, supplemental appropriations bills, and continuing resolutions. Authorizing Legislation The primary purpose of authorization statutes or provisions is to provide authority for an agency to administer a program or engage in an activity. These are sometimes referred to as "organic" or "enabling" authorizations. It is generally understood that such statutory authority to administer a program or engage in an activity also provides an implicit authorization for Congress to appropriate for such program or activity. Appropriations may also be authorized explicitly for definite or indefinite amounts (i.e., "such sums as may be necessary"), either through separate legislation or as part of an organic statute (that is, the legislation that establishes the agency mission or programmatic parameters). These are sometimes referred to as "authorizations of appropriations." If such an authorization of appropriations is present, it may have to be renewed annually or periodically, and it may expire even though the underlying authority in an organic statute to administer such a program or engage in such an activity does not. Most federal agencies operate under a patchwork of authorizing statutes that govern various requirements and duties. Furthermore, there is no requirement in either chamber that the structure of authorizations mirror the account structure in appropriations bills. As a consequence, the burden of proving the authorization for funding carried in an appropriations bill falls on the proponents and managers of the bill. The rules of the House and Senate establish a general expectation that agencies and programs be authorized in law before an appropriation is made to fund them. An appropriation in the absence of a current authorization, in excess of an authorization ceiling, or for purposes not previously authorized by law is commonly called an "unauthorized appropriation." Conversely, while authorizations can impose a procedural limit on appropriations, Congress is not required to provide appropriations for an authorized discretionary spending program. House and Senate rules also preserve the distinction between authorizations and appropriations by prohibiting the inclusion of general legislative language in appropriations measures. The division between an authorization and an appropriation, however, is a procedural construct of House and Senate rules created to apply to congressional consideration. Consequently, the term unauthorized appropriations does not convey a legal meaning with regard to subsequent funding. If unauthorized appropriations or legislation remain in an appropriations measure as enacted, either because no one raised a point of order or the House or Senate waived the rules, the provision will still have the force of law. Unauthorized appropriations, if enacted, are therefore generally available for obligation or expenditure. Similarly, any legislative provisions enacted in an annual appropriations act also generally have the force of law for the duration of that act unless otherwise specified. Regular Appropriations Legislation An appropriation is a law passed by Congress that provides federal agencies legal authority to incur obligations and the Treasury Department authority to make payments for designated purposes. The power of appropriation derives from the Constitution, which in Article I, Section 9, provides that "[n]o money shall be drawn from the Treasury but in consequence of appropriations made by law." The power to appropriate is exclusively a legislative power; it functions as a limitation on the executive branch. An agency may not spend more than the amount appropriated to it, and it may use available funds only for the purposes and according to the conditions provided by Congress. The Constitution does not require annual appropriations, but since the First Congress the practice has been to make appropriations for a single fiscal year. Appropriations must be used (obligated) in the fiscal year for which they are provided unless the law provides that they shall be available for a longer period of time. All provisions in an appropriations act, such as limitations on the use of funds, expire at the end of the fiscal year unless the language of the act extends their period of effectiveness. Congress passes three main types of appropriations measures. Regular appropriations acts provide budget authority to agencies for the next fiscal year. Supplemental appropriations acts provide additional budget authority during the current fiscal year when the regular appropriation is insufficient or to finance activities not provided for in the regular appropriation. Continuing appropriations acts provide interim (or full-year) funding for agencies that have not received a regular appropriation. In a typical session, Congress acts on 12 regular appropriations bills. In recent years, Congress has merged two or more of the regular appropriations acts (sometimes termed "minibus" or "omnibus" appropriations legislation) for a fiscal year at some point during their consideration. In current practice, there are both statutory and procedural limits on the level of discretionary spending. A statutory limit on discretionary spending was established under the BCA for each fiscal year from FY2012 through FY2021, divided into separate defense and nondefense categories. A procedural limit on total appropriations can be established under a budget resolution or some alternate measure (see sections on the budget resolution and deeming resolutions in this report). Once the amount is established, it is allocated to the Appropriations Committee in each chamber pursuant to Section 302(a) of the CBA. Section 302(b) further requires the Appropriations Committee in each chamber to subdivide the total allocation among its subcommittees. By long-standing custom, appropriations measures originate in the House of Representatives. In the House, appropriations measures are originated by the Appropriations Committee (when it marks up or reports the measure) rather than being introduced by a Member beforehand and referred to the committee. Before the full committee acts on the bill, it is drafted and considered in the relevant Appropriations subcommittee. The House and Senate Appropriations Committees currently have 12 parallel subcommittees. The House subcommittees typically hold extensive hearings on appropriations requests shortly after the President's budget is submitted. In marking up their appropriations bills, the various subcommittees are then guided by the discretionary spending limits and the subdivisions made to them by the full committee under Section 302(b) of the CBA. The Senate usually considers appropriations measures after they have been passed by the House. When House action on appropriations bills is delayed, however, the Senate may expedite its actions by considering a Senate-numbered bill up to the stage of final passage. In this scenario, upon receipt of the House-passed bill in the Senate, it is amended with the text that the Senate has already agreed to (as a single amendment) and then passed by the Senate. The basic unit of an appropriation bill is an account. A single unnumbered paragraph in an appropriations act comprises one account, and all provisions of that paragraph pertain to that account and to no other unless the text expressly gives them broader scope. Any provision limiting the use of funds enacted in that paragraph is a restriction on that account alone. Over the years, appropriations have been consolidated into a relatively small number of accounts. It is not uncommon for a federal agency to have a single account for all its expenses of operation and additional accounts for other purposes such as construction. Accordingly, most appropriation accounts encompass a number of activities or projects. The appropriation sometimes includes directives or provisos that allot specific amounts to particular activities within the account, but the more common practice is to provide detailed information on the amounts intended for each activity in other sources, principally the committee reports accompanying the measures. In addition to the substantive limitations (and other provisions) associated with each account, each appropriations act has "general provisions" that apply to all of the accounts in a title or in the whole act. These general provisions appear as numbered sections, usually at the end of the title or the act. If not otherwise specified, an appropriation is for a single fiscal year so that the funds have to be obligated during the fiscal year for which they are provided and that they lapse if not obligated by the end of that year. Congress can also specify that an appropriation remains available for obligation for another period or even that it remain available until expended (termed "no-year" funds). Continuing Resolutions The routine activities of most federal agencies are funded annually by one or more of the regular appropriations acts. When action on the regular appropriations acts is delayed, however, one or more continuing appropriations acts (also referred to as a continuing resolution, or CR) may be used to provide interim budget authority in order to prevent a funding gap or the need for a shutdown of government activities. This may occur if regular annual appropriations acts are not enacted by the beginning of the fiscal year (October 1), or upon the expiration of a prior CR, until action on the regular appropriations acts is completed. In providing temporary funding, CRs have typically addressed several issues: Coverage. CRs have provided funding for certain activities. In current practice, this is typically specified with reference to the prior fiscal year's appropriations acts. Duration. CRs have provided budget authority for a specified duration of time. In some cases this may be as short as a single day, although a CR can provide funding for the remainder of the fiscal year. CRs include language that provides that the CR may be superseded by a regular appropriations act if it is enacted prior to the expiration of the CR. Rate. Since CRs typically provide funds for a limited period, they generally provide those funds based on a rate rather than a set amount. This rate can be set at the rate of operations funded in the previous year, it can be the previous rate of operations adjusted by some percentage, or it can be based on some other amount. This is in contrast to regular and supplemental appropriations acts, which generally provide specific amounts for each account. Other factors may also have an impact on interpreting the rate of operations, such as historical spending patterns or provisions commonly included in CRs that would require funds be apportioned at the rate necessary to avoid furloughs or limit funds for programs with high initial rates of operation or complete distribution of appropriations at a set time during a fiscal year (that is, all or most of the funds would be used at a single set time during the fiscal year). For mandatory spending that is funded through appropriations acts, CRs normally provide for a rate of funding sufficient to maintain program levels under current law since the levels necessary to meet obligations are independent of prior year actions. Funds expended under a CR are considered a portion of the total amount subsequently provided for the entire fiscal year when a regular appropriation bill is later enacted into law. Limits on u sage. CRs typically include language carrying forward any terms and conditions on the obligation of such budget authority in the prior fiscal year. CRs have also included language specifying that funding provided in the CR should be implemented so that only the most limited action allowed by law be taken with respect to providing for continuation of projects and activities in order to preserve congressional prerogative to later determine the amount available. Another typical feature of CRs is language to prohibit "new starts" in order to limit agencies, particularly the Department of Defense, the authority to make long-term commitments while operating under temporary funding or to prevent agencies from initiating or resuming any project or activity for which appropriations were not available during the prior fiscal year. Specific a djustments. The duration and amount of funds in the CR and purposes for which they may be used may be adjusted for specified activities or programsâfor example, to provide that funds for a certain program be based on an amount different from the rate for the previous year. These adjustments are commonly termed "anomalies." The Executive Budget Process: Budget Execution After enactment of a particular appropriation into law, federal agencies must attempt to interpret and apply its terms in order to execute their budgetary responsibilities. Agencies may generally obligate and expend funds subject to any conditions addressed by appropriations statutes guided by three general principles: the purpose(s) for which particular funds are appropriated, which may be expressed in statute in more or less detail and, in some cases, with certain restrictions; the time period during which funds are available for obligation and expenditureâsometimes referred to as the period of availability or duration of appropriations; and the amount of appropriated funds that may be obligated and expended. Within the contours of these statutory conditions on the availability of funds, agencies may nevertheless exercise some discretion regarding how funds are allocated and the pace at which funds are obligated and spent. The Antideficiency Act and Apportionment The so-called Antideficiency Act consists of a series of provisions and revisions incorporated into appropriations laws over the years relating to matters such as prohibited activities, the apportionment system, and budgetary reserves. These provisions, now codified in two locations in Title 31 of the United States Code , continue to play a pivotal role in the execution phase of the federal budget process, when the agencies actually spend the funds provided in appropriations laws. The origins of the Antideficiency Act date back to 1870, which provided: that it shall not be lawful for any department of the government to expend in any one fiscal year any sum in excess of appropriations made by Congress for that fiscal year, or to involve the government in any contract for the future payment of money in excess of such appropriations. Later modifications, particularly the Antideficiency Acts of 1905 and 1906, sought to strengthen the prohibitions of the 1870 law by expanding its provisions, adding restrictions on voluntary services for the government, and imposing criminal penalties for violations. These laws also established a new administrative process for budget execution, termed "apportionment," which requires that budget authority provided to federal agencies in appropriations acts be allocated in installments, rather than all at once. By apportioning funds, agencies can prevent operating at a rate that would expend all budget authority before the end of the fiscal year or end the year with substantial amounts unobligated. Four main types of prohibitions are contained in the Antideficiency Act, as amended: (1) making expenditures in excess of the appropriation; (2) making expenditures in advance of the appropriation; (3) accepting voluntary service for the United States, except in cases of emergency; and (4) making obligations or expenditures in excess of an apportionment or reapportionment or in excess of the amount permitted by agency regulation. One significant impact of the Antideficiency Act has been concern with the potential for a government shutdown as a response to a funding gap. In 1980 and early 1981, then-Attorney General Benjamin Civiletti issued opinions in two letters to the President. The "Civiletti Letters" have continued to have effect through guidance provided to federal agencies under various OMB circulars clarifying the limits of federal government activities upon the occurrence of a funding gap. The Civiletti Letters state that, in general, the Antideficiency Act requires that if Congress has enacted no appropriation beyond a specified period, the agency may make no contracts and obligate no further funds for activities associated with the lapsed appropriation except as "authorized by law." In addition, because no statute generally permits federal agencies to incur obligations without appropriations for the pay of employees, the Antideficiency Act does not, in general, authorize agencies to employ the services of their employees upon a lapse in appropriations, though it does permit agencies to fulfill certain legal obligations connected with the orderly termination of agency operations. The second letter, from January 1981, discusses the more complex issue of interpretation presented with respect to obligational authorities that are "authorized by law" but not manifested in appropriations acts. In a few cases, Congress has expressly authorized agencies to incur obligations without regard to available appropriations. More often, it is necessary to inquire under what circumstances statutes that vest particular functions in government agencies imply authority to create obligations for the execution of those functions despite a lack of current appropriations. It is under this guidance that exceptions may be made for activities involving "the safety of human life or the protection of property." As a consequence of these guidelines, when a funding gap occurs, executive agencies begin a shutdown of the affected projects and activities, including the furlough of non-excepted personnel. Reprogramming and Transfers The language by which funds are provided to federal agencies may vary in the level of discretion agencies have to determine how to spend the funds that have been provided. One type of discretion that commonly occurs is with respect to the purposes for which funds are available when appropriations are provided as a lump sum with little or no specificity in the appropriations statute. Even when the purpose of appropriations has been specified in detail, agencies have some flexibility to determine how they will use their available budgetary resources during the fiscal year. For example, agencies may shift funds from one purpose or object to another through reprogramming and transfers. Reprogramming is the shifting of funds within an appropriation account from one object class to another or from one program activity to another. Generally, agencies may make such shifts without additional statutory authority, but often they must provide some form of notification to the appropriations committees, authorizing committees, or both. A transfer is the shifting of budget authority from one appropriation account to another. Agencies may transfer budget authority only as specifically authorized by law. In most cases, transfers involve movement of funds within an agency or department, but they may also involve movement of funds between two or more agencies or departments. Transfer authority may be provided either in authorizing statutes or in appropriations acts. In addition, statutory provisions that provide transfer authority will require the agency to notify Congress. In general, both transferred and reprogrammed funds are subject to any limitations or conditions that were imposed by the appropriations act that originally made it available. All original restrictions remain in effect on transferred funds regardless of whether the funds in the receiving appropriations account have different restrictions or characteristics than the funds being transferred. In other words, limitations and restrictions follow the funds. Additional restrictions may be imposed by statutes to limit transfer or reprogramming authority in certain circumstances or with respect to certain agencies. Such restrictions may be specified in terms of an amount or a percentage. One example of a statutory restriction would be language that places a cap on the amounts that may be transferred. Such caps may be imposed on either the account from which funds are being transferred or the account receiving the transferred funds. These restrictions are commonly referred to as "not-to-exceed" limits. Impoundment Although an appropriation limits the amounts that can be spent, it also establishes the expectation that the available funds will be used to carry out authorized activities. Therefore, when an agency declines to use all or part of an appropriation, it deviates from the intentions of Congress. Although Presidents have sometimes asserted that they are not obligated to spend appropriated funds, Supreme Court decisionsâespecially Train v. City of New York (420 U.S. 35 [1975]) and the Impoundment Control Act of 1974 (ICA) âlimit their authority to reduce or withhold agency funding, by action or inaction, that prevents the obligation and expenditure of budget authority. An impoundment is an action or inaction by the President or a federal agency that delays or withholds the obligation or expenditure of budget authority provided in law. The ICA divides impoundments into two categories and establishes distinct procedures for each: A deferral delays the use of funds; a rescission is a presidential request that Congress rescind (cancel) an appropriation or other form of budget authority. Deferral and rescission are exclusive and comprehensive categories. That is, an impoundment is either a rescission or a deferralâit cannot be both or something else. As originally enacted, the ICA also created a process through which the President could propose a deferral of budget authority (meaning to delay its availability), and either the House or Senate could prevent the deferral by adopting a resolution disapproving it. The process by which a single chamber could prevent the exercise of authority delegated to the executive branch (known as a "legislative veto") was later found unconstitutional, however. Specifically, after the Supreme Court invalidated an unrelated one-house legislative veto in INS v. Chadha , 462 U.S. 919 (1983), the Court of Appeals for the D.C. Circuit applied the reasoning of Chadha to invalidate the deferral provisions in the ICA. This decision in City of New Haven v. United States (809 F.2d 900 [D.C. Cir. 1987]), also struck down the statutory authority of the President to make deferrals for policy reasons as inseverable from the unconstitutional legislative veto. After the court decisions, as well as GAO administrative interpretations of the issue, Congress amended the ICA in 1987 to eliminate the one-house disapproval and specify that deferrals be "permissible only: (1) to provide for contingencies; (2) to achieve savings made possible by or through changes in requirements for greater efficiency of operations; or (3) as specifically provided by law." In addition, deferrals could not be proposed for any period extending beyond the end of the fiscal year for which the proposal was reported. Prior to the enactment of the ICA, when the President withheld appropriated funds from obligation, there was no explicit statutory limit on the length of time that funds could be withheld. Under the ICA, however, whenever the President seeks to withhold funds from obligation, he must submit a special rescission message to Congress. The funds can be withheld only for the 45-day period specified in the act after the receipt of the special presidential message. The special presidential message to Congress must specify the amount to be rescinded, the accounts and programs involved, the estimated fiscal and program effects, and the reasons for the rescission. Multiple rescissions can be grouped in a single message. After the message has been received, Congress can choose to consider and pass a rescission bill that includes all, part, or none of the amount proposed by the President. The funds reserved pursuant to a rescission request must be released after the 45-day period unless Congress has completed action on a bill to rescind the budget authority. GAO is granted responsibilities to oversee and enforce executive branch compliance with the act. The ICA also created legislative procedures for the House and Senate to facilitate congressional review of presidential rescission requests. These procedures can effectively place a time limit on committee consideration and restrict floor debate in both chambers. The procedures discourage a filibuster in the Senate and eliminate the need for three-fifths support in the Senate to reach a final vote on the bill. These expedited procedures are available only during the 45-day period during which funds are withheld. The President can also propose cancellations of budget authority in ways other than the method described in the ICA for requesting rescissions. Funds requested for cancellation, however, may not be withheld from obligation pending congressional action. Although the Trump Administration has submitted rescission requests to Congress, during the two prior presidential Administrations, the President chose not to send rescission proposals pursuant to the ICA. Both President Barack Obama and President George W. Bush proposed cancellations of budget authority, but they chose not to do so by submitting a special message under the terms prescribed by the ICA. Conversely, Congress can, and often does, initiate the rescission of funds on its own and may choose to consider legislation rescinding funds using the regular legislative process. Rescissions are regularly included in appropriations bills, for example. Sequestration Sequestration was the principal means used to enforce statutory budget enforcement policies in place from 1985 through 2002, and it is the principal means used to enforce the requirements of the Statutory PAYGO Act and the statutory limits on discretionary spending under the BCA. In addition, sequestration is used to achieve a portion of the spending reductions required when deficit reduction legislation tied to the Joint Committee on Deficit Reduction was not enacted as provided by the BCA. Sequestration involves the issuance of a presidential order that permanently cancels non-exempt budgetary resources (except for revolving funds, special funds, trust funds, and certain offsetting collections) for the purpose of achieving a required amount of outlay savings to reduce the deficit. Once sequestration is triggered, spending reductions are made automatically. A sequestration order by the President is triggered by a report from the OMB director determining that a breach has occurred. To enforce the statutory discretionary spending caps, OMB first provides a preview report at the beginning of the calendar year, including calculations of any necessary adjustments to the existing limits for the upcoming fiscal year. Once discretionary spending is enacted, OMB evaluates that spending relative to the spending limits and determines whether sequestration is required. OMB is required to issue the final report within 15 calendar days after the congressional session adjourns sine die. For discretionary spending that becomes law after the session ends (e.g., the enactment of a supplemental appropriations measure), the OMB evaluation and any sequester order to enforce the limits would occur 15 days after enactment. For enforcement of the Statutory PAYGO Act, OMB records the budgetary effects of revenue and direct spending provisions enacted into law, including both costs and savings, on two PAYGO scorecards covering rolling five-year and 10-year periods (i.e., in each new session, the periods covered by the scorecards roll forward one fiscal year). OMB must issue an annual PAYGO report not later than 14 days (excluding weekends and holidays) after Congress adjourns to end a session. Once OMB finalizes the two PAYGO scorecards, it determines whether a violation of the PAYGO requirement has occurred (i.e., if a debit has been recorded for the budget year on either scorecard). If a breach occurs, the President issues a sequestration order that implements largely across-the-board cuts in nonexempt direct spending programs sufficient to remedy the violation. Spending for many programs is exempt from sequestration, and reductions in certain programs are limited by statutory provisions. Appendix A. Glossary of Budget Process Terms 302. The section of the Congressional Budget Act of 1974 that pertains to the distribution to House and Senate committees of new budget authority, entitlement authority, and outlays agreed to in a budget resolution. The allocation is usually included in the joint explanatory statement that accompanies the conference report on a budget resolution. Section 302(a) requires the allocation of the total spending in the budget resolution among the committees having jurisdiction over either direct or discretionary spending. When a budget resolution has not been adopted, the House and Senate (separately or jointly) may use some other means to establish committee allocations. Section 302(b) further requires the Appropriations Committee in each chamber to subdivide this total allocation among their subcommittees. Section 302(f) establishes a point of order against the consideration of a bill, amendment thereto, or conference thereon that would breach the appropriate 302(a) (or 302(b)) amount for the committee (or subcommittee). Apportionment . The action by which federal agencies, working with the Office of Management and Budget, establish a plan for budget authority made available by spending laws to be obligated over the course of a fiscal year consistent with all legal requirements. Apportionment is required under the Antideficiency Act in order to prevent the premature exhaustion of funds, and for certain kinds of budget authority, to achieve the most effective and economical use of those funds. Appropriation. Legislation that provides budget authority to allow federal agencies to incur obligations and to make payments out of the Treasury for specified purposes, usually during a specified period of time. Discretionary appropriations measures are under the jurisdiction of the House and Senate Committees on Appropriations. Authorization . A statutory provision that establishes or continues a federal agency, activity, or program. It may also establish policies and restrictions and deal with organizational and administrative matters. Authorizations may implicitly or explicitly authorize congressional action to provide appropriations for an agency, activity, or program. An explicit authorization of appropriations may apply to a single fiscal year, several fiscal years, or an indefinite period of time, and it may be for a specific level of funding or an indefinite amount. An authorization of appropriations does not provide budget authority, however, which must be provided in subsequent appropriations legislation. Furthermore, under House and Senate rules, an authorization is construed as a ceiling on the amounts that may be appropriated but not a minimum. Baseline . A projection of the levels of federal spending, revenues, and the resulting budgetary surpluses or deficits for the upcoming and subsequent fiscal years, taking into account laws enacted to date but not assuming any new policies. It provides a benchmark for measuring the budgetary effects of proposed changes in federal revenues or spending, assuming certain economic conditions. Baseline projections are prepared by the Congressional Budget Office. Budget a uthority . Authority provided by federal law to enter into financial obligations that will result in immediate or future outlays involving federal government funds. The main forms of budget authority are appropriations, entitlement authority, borrowing authority, and contract authority. It also includes authority to obligate and expend the proceeds of offsetting receipts and collections. Congress may make budget authority available for one year, several years, or an indefinite period, and it may specify definite or indefinite amounts. Budget r esolution . A concurrent resolution, provided under the Congressional Budget Act, that allows Congress to make decisions about overall fiscal policy and priorities, as well as coordinate and establish guidelines for the consideration of various budget related measures. Because a concurrent resolution is not a law, it cannot be signed or vetoed by the President. It therefore does not have statutory effect, so no money can be raised or spent pursuant to it. Revenue and spending amounts set in the budget resolution, however, establish the basis for the enforcement of congressional budget policies through points of order. Continuing r esolution (CR) . When annual appropriations acts are not enacted by the beginning of the fiscal year (October 1), one or more continuing appropriations acts may be enacted to provide temporary continued funding for covered programs and activities until action on regular appropriations acts is completed. Such funding is provided for a specified period of time, which may be extended through the enactment of subsequent CRs. Rather than providing a specific amount of funding, CRs typically allow agencies to operate at a specified rate. A continuing appropriations act is commonly referred to as a continuing resolution or CR because historically it has been in the form of a joint resolution rather than a bill, but there is no procedural requirement as to its form. In some cases, CRs have provided appropriations for an entire fiscal year. Deeming r esolution . An informal term that refers to a resolution or bill passed by one or both houses of Congress that provides an alternate means to establish the basis for budgetary enforcement actions in the absence of a budget resolution. Direct s pending . Direct spending is defined in the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, as consisting of entitlement authority (including appropriated entitlements), the Supplemental Nutrition Assistance Program, and any other budget authority (and resulting outlays) provided in laws other than appropriations acts. The term direct spending is often used interchangeably with the terms mandatory or entitlement spending . Examples include Social Security, Medicare, Medicaid, unemployment insurance, and military and federal civilian pensions. Discretionary s pending . The Balanced Budget and Emergency Deficit Control Act of 1985, as amended, defines discretionary spending as budget authority provided in annual appropriation acts and the outlays derived from that authority. Discretionary spending encompasses appropriations not mandated by existing law and therefore made available in appropriation acts in such amounts as Congress chooses. Discretionary spending for FY2012-FY2021 is limited by statutory spending limits enacted in the Budget Control Act of 2011, as revised. Fiscal y ear . The fiscal year for the federal government begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends: For example, FY2020 began on October 1, 2019, and ends on September 30, 2020. Functional c ategory. The President's budget and the congressional budget resolution classify federal budgetary activities (including budget authority, outlays, tax expenditures, and credit authority) into functional categories that represent major purposes or national needs being addressed (such as national defense, health, or general science, space, and technology). A functional category may be divided into two or more subfunctions, depending upon its scope or complexity. As a whole, functional categories provide a broad statement of budget priorities and facilitate an understanding of trends in related programs regardless of the agency administering them or type of financial transaction involved. The amounts in particular functional categories in the budget resolution are used as informational guidelines and are not enforced by points of order in the congressional budget process. Obligation . A commitment that creates a legal liability of the government to pay for goods and services and results in outlays either immediately or in the future. An agency incurs an obligation, for example, when it places an order, signs a contract, or awards a grant. When a payment is made, it liquidates the obligation. Appropriation laws usually make funds available for obligation for one or more fiscal years, but outlays may actually occur at some later time so that an agency's outlays in a particular year can come from obligations entered into in previous years as well as from its current appropriation. Offsetting r eceipts/ c ollections . Funds collected from the public primarily as a result of business-like activities (such as user fees or royalties paid to the government) that are levied on a class directly availing itself of, or directly subject to, a governmental service, program, or activity rather than on the general public. Such receipts and collections are recorded as negative amounts of spending rather than as revenues. In most cases, offsetting receipts require an explicit appropriation, while offsetting collections may be obligated without further legislative action. Outlays . The actual amount of payments from the Treasury that result from obligations entered into by executing provisions in appropriations and direct spending legislation that provides budget authority. Outlays consist of payments, usually by check, by electronic fund transfer or cash to liquidate obligations incurred in prior fiscal years as well as in the current fiscal year. Pay-as-you-go ( PAYGO ) . A budgetary enforcement mechanism originally set forth in the Budget Enforcement Act of 1990. It generally requires that any projected increase in the deficit due to changes in direct spending or revenues resulting from legislation must be offset by an equivalent amount of direct spending cuts or revenue increases to eliminate the net increase over either a six-year period covering the current fiscal year plus the ensuing five fiscal years or over an 11-year period covering the current fiscal year plus the ensuing 10 fiscal years. The statutory PAYGO mechanism currently in place was established under the Statutory Pay-As-You-Go Act of 2010. In the event that the net impact of changes to direct spending and revenue laws over the course of a session of Congress is projected to increase the deficit in either of these time periods, the President is required to issue a sequester order to eliminate it. In addition, there are currently PAYGO procedures in the House and Senate enforced by points of order on the floor to prevent the consideration of legislation that does not meet the requirement. Reconciliation. An expedited procedure, provided under Section 310 of the Congressional Budget Act, for changing existing revenue or direct spending laws to implement budgetary policies established in a budget resolution. Reconciliation must begin with language in a budget resolution instructing specific committees to report legislation adjusting revenues or spending within their respective jurisdictions by specified amounts, usually by a specified deadline. The Budget Act provides for expedited consideration of reconciliation bills in the Senate by limiting debate to 20 hours and limiting the content of amendments. Reprogramming. Shifting funds within an appropriation account from one object class to another or from one program activity to another. Generally, agencies may make such shifts without additional statutory authority, but often they must provide some form of notification to the appropriations committees, authorizing committees, or both. Rescission. A provision of law that repeals previously enacted budget authority. Under the Impoundment Control Act of 1974, the President may send a message to Congress requesting one or more rescissions and the reasons for doing so. If the President makes such a request, he may withhold the funds from obligation, but if Congress does not pass legislation approving the rescission within 45 days of continuous session after receiving the message, the funds must be made available for obligation. Congress may rescind all, part, or none of an amount proposed by the President and may also initiate rescission of funds not requested in a presidential message. Revenues. Funds collected from the public primarily as a result of the federal government's exercise of its sovereign powers. They include individual and corporate income taxes, excise taxes, customs duties, estate and gift taxes, fees and fines, payroll taxes for social insurance programs, and miscellaneous receipts. Scorekeeping. The process of both estimating the budgetary effects of pending legislation and comparing those effects to a baseline. The Congressional Budget Office prepares estimates of the budgetary effects of legislation, including both spending and revenue effects. The Budget Committees in the House and Senate act as official scorekeepers by providing the presiding officers in their respective chambers with the estimates needed to make decisions about points of order enforcing budgetary parameters. The Budget Committees also make periodic summary scorekeeping reports that are placed in the Congressional Record . Sequestration . A procedure in which the President is required to issue an order canceling budgetary resourcesâthat is, money available for obligation or spendingâto enforce a statutory budget requirement. Sequestered funds are no longer available for obligation or expenditure. The statutory PAYGO requirement and the statutory limits on discretionary spending are enforced by sequestration. In addition, the automatic spending reductions required by the Budget Control Act of 2011 are partially achieved through sequestration. Transfer. Shifting budget authority between two appropriation accounts. Agencies may transfer budget authority only as specifically authorized by law. Appendix B. Congressional Budget Process Actions	Summary:	gov_report	1,024	null	26
crs_R46360	crs_R46360_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Credit unions are nonprofit depository financial institutions that are owned and operated entirely by their members. In other words, na tural person credit unions, also known as retail credit unions, are financial cooperatives that return profits to their memberships. For this reason, member deposits are referred to as shares , which may be used to provide loans to members, other credit unions, and credit union organizations; and the interest earned by members is referred to as share d ividends , which are comparable to shareholder profit distributions. Credit unions (and banks) engage in financial intermediation , or facilitating transfers of funds back and forth between savers (via accepting deposits) and borrowers (via loans). The National Credit Union Administration (NCUA), an independent federal agency, is the primary federal regulator and share deposit insurer for credit unions. There are three federal bank prudential regulators: the Office of the Comptroller of the Currency (OCC) charters and supervises national depository (commercial) banks; the Federal Deposit Insurance Corporation (FDIC) provides deposit insurance by collecting insurance premiums from member banks and places the proceeds in its Deposit Insurance Fund (DIF), which are subsequently used to reimburse depositors when acting as the receiver of a failed bank; and the Federal Reserve provides lender-of-last-resort liquidity to solvent banks via its discount window. The NCUA, by comparison, serves all three functions for federally regulated credit unions. The NCUA also manages the National Credit Union Share Insurance Fund (NCUSIF), which is the federal deposit insurance fund for credit unions. Although scholars are unable to pinpoint the precise origin of the credit union movement, the organization of membership-owned cooperatives to raise funds for members lacking sufficient collateral or wealth necessary to qualify for bank loans dates back to colonial times. During their infancy stages, credit cooperatives basically emerged as a form of microlending in financially underserved localities to provide unsecured small-dollar loans. Small group cooperatives initially relied on pooled funds, donations, and subsidies to make loans (allocated via lotteries or auctions) until evolving into self-sufficient systems more reliant on deposits. The advantage of small memberships for group credit cooperatives allow members to know each other, which facilitates peer monitoring of the lending decisions and borrowers' repayment behavior. The original concept of a credit union stemmed from cooperatives formed to promote thrift among its members and to provide them with a low-cost source of credit. Following numerous bank failures and runs during the Great Depression that resulted in an extensive contraction of credit, Congress sought to enhance cooperative organizations' ability to meet their members' credit needs. Congress passed the Federal Credit Union Act of 1934 (FCU Act; 48 Stat. 1216) to create a class of federally chartered financial institutions for "promoting thrift among its members and creating a source of credit for provident or productive purposes." Over time, Congress expanded credit unions' permissible activities because the original concept of a credit union arguably needed to evolve with the marketplace. According to the NCUA, When Congress amended the FCU Act in 1977 to add an extensive array of savings, lending and investment powers, it intended to "allow credit unions to continue to attract and retain the savings of their members by providing essential and contemporary services," and acknowledged that credit unions are entitled to "updated and more flexible authority granting them the opportunity to better serve their members in a highly-competitive and ever-changing financial environment." H.R. Rep. 95â23 at 7 (1977), reprinted in 1977 U.S.C.C.A.N. 105, 110. Congress acknowledged the difficulty in "regulating contemporary financial institutions within the framework of an Act that has on a continuing basis required major updating by means of regulation." Although small memberships may be more advantageous for informal microlending systems, advanced intermediation systemsâsuch as banking and the modern credit union industryâbenefit from economies of scale . In other words, more assets (loans), greater access to deposits, and increased transactions volumes provide greater risk diversification and lower average cost per transaction, thus reducing vulnerability to financial disruptions that would be confined to a particular small group. On April 19, 1977, P.L. 95-22 (the Mini Bill of 1977) substantially amended the FCU Act. It authorized the credit union industry to provide many financial products (e.g., loans, checking and savings deposit services) similar to those offered by the commercial banking system. Today, modern credit unions primarily engage in consumer and residential lending, and some originate commercial business loans for members. The lending and investment powers of the credit union industry, however, are still more restrictive than those of commercial banks. Credit unions can make loans only to their members, other credit unions, and credit union organizations, thus limiting who they can serve. A statutory interest rate cap for credit union loans exists (with exceptions that allow for sufficient earnings necessary to maintain credit availability). Loans made by federally insured credit unions are generally limited to 15 years (except for residential mortgages). Federal credit unions' investment authority is limited by statute to loans, government securities, deposits in other financial institutions, and certain other limited investments given their origins to promote thrift rather than be long-term investors. Business lending restrictions include an aggregate limit on an individual credit union's member business loan balances and on the amount that can be loaned to one member. If some or all of these restrictions are relaxed to allow the credit union system's lending powers to expand and become more comparable to the banking system, the prudential regulatory regimes arguably may require greater harmonization to protect against comparable financial risk exposures. This report focuses on policy developments pertaining to the credit union system. It begins with an overview of recent efforts to further expand system lending capacities. Next, it describes how the system's exposure to mortgage credit (default) risk grew after credit unions were given greater intermediation authorities in the mortgage lending space. It then discusses the system's financial distress and recovery resulting from the 2008 financial crisis, and updates the progress made to improve the system's resiliency to credit and insolvency risks. This discussion will use the balance sheet terminology defined in the box below. Expanding Permissible Lending Activities Congress has passed legislation, and the NCUA has implemented and proposed rules, supporting the expansion of lending activities that would increase financial transactions volumes (economies of scale). The expansion of lending activities, as discussed in this section, is likely to generate greater cash flows and revenues for the credit union system. Field of Membership and Common Bonds A credit union's "field of membership" is the legal definition of who is eligible to join. Federal or state governments grant credit union charters on the basis of a "common bond." There are three types of charters: a (1) single common bond (occupation or association based); (2) multiple common bond (more than one group each having a common bond of occupation or association); and (3) community-based (geographically defined) common bond. Individual credit unions are owned by their memberships. Credit union members elect a board of directors from their institution's membership (one member, one vote). Credit unions can make loans only to their members, other credit unions, and credit union organizations. Field of membership restrictions may limit an intermediary's ability to collect deposits, which are used to fund loans. Common bond requirements on credit unions can be considered analogous to U.S. restrictions on interstate and branch banking, which are no longer in place. By limiting access to supplementary sources of funds, a credit union (or bank) becomes more vulnerable to cash flow disruptions (e.g., increases in loan defaults, substantial deposit withdrawals) following adverse eventsâparticularly those that would directly affect its field of membership. Despite field of membership restrictions, some of the larger credit unions may still be able to achieve a sufficiently large and diversified depositor base, allowing them to enjoy greater economies of scale. Nevertheless, all intermediaries of all sizes are still vulnerable to a sudden need for liquid funds following some unexpected or adverse interest rate movements or a national recession, discussed in the section entitled "Increased Exposure to Mortgage Credit Risk and Recent NCUSIF Management Initiatives." For this reason, access to more sources of depositors arguably enhances liquidity management for credit unions and banks, which typically have assets (portfolio loans) that are less liquid than their liabilities (deposits). On December 7, 2016, the NCUA published a final rule comprehensively amending its chartering and field of membership rules to maximize access to federal credit union services to the extent permitted by law. Although NCUA cannot change the three initial statutory field of membership categories, it revised certain terms such as local community , rural district , underserved area , and multiple common-bond credit union , among other things to broaden access to federal credit unions. Competitors of credit unions, however, legally challenged the revisions, arguing that an associational charter may limit the ability of a credit union to add underserved areas (e.g., local urban or rural underserved areas as determined by the NCUA) to its field of membership unless it also has a multiple common-bond charter. On August 20, 2019, the D.C. Circuit Court of Appeals upheld the rule but remanded two provisions of the NCUA's revised field of membership rule. One provision, to satisfy a community-based common bond charter, would have allowed a combined statistical area with fewer than 2.5 million people to qualify as a local community; arguably, this provision could have had a discriminatory impact on poor and minority urban residents. The second remanded provision would have raised the population limit for rural districts from the greater of 250,000 or 3% of the relevant state's population to 1 million people; some geographical areas arguably could have been defined to extend beyond the state borders of a credit union's headquarters. The NCUA proposed to clarify its authority to reject fields of membership applications that would want to exclude low- or moderate-income individuals. On November, 7, 2019, the NCUA proposed to re-adopt the provision pertaining to the combined statistical area to clarify existing requirements and add an explicit provision to the rule to address potential discriminatory concerns. Member Business and Commercial Lending Lending caps on member business (commercial) loans offered by credit unions did not exist until 1998. Congress included provisions in the Credit Union Membership Access Act of 1998 (CUMAA; P.L. 105-219 ) that established a commercial lending cap that limits most credit unions to lending no more than 12.25% of their assets to small businesses, among other provisions. The following passages from the Senate's CUMAA report explain the rationale for establishing the member business loan (MBL) cap. "The purpose of H.R. 1151, the CUMAA, as reported from the Committee, is to amend existing law with regard to the field of membership of federal credit unions, to preserve the integrity and purpose of federal credit unions and to enhance supervisory oversight of federally insured credit unions.... The bill significantly strengthens the prudential safeguards applicable to federally insured credit unions and makes the credit union system safer, sounder and more resilient." " Section 203. Limitation on member business loans . In new section 107A(a), the Committee has imposed substantial new restrictions on commercial business lending by insured credit unions. Those restrictions are intended to ensure that credit unions continue to fulfill their specified mission of meeting the credit and savings needs of consumers, especially persons of modest means, through an emphasis on consumer rather than business loans. The Committee action will prevent significant amounts of credit union resources from being allocated in the future to large commercial loans that may present additional safety and soundness concerns for credit unions, and that could potentially increase the risk of taxpayer losses through the National Credit Union Share Insurance Fund ('Fund')." The CUMAA contained the following provisions: The MBL definition was codified and defined as "any loan, line of credit, or letter of credit, the proceeds of which will be used for a commercial, corporate or other business investment property or venture, or agricultural purpose," but it does not include an extension of credit that is fully secured by a lien on a one-to-four-family dwelling that is a member's primary residence. The aggregate amount of MBLs that can be made by an individual credit union was limited to the lesser of 1.75 times the credit union's actual net worth or 1.75 times the minimum net worth amount required to be well-capitalized under the prompt corrective action supervisory framework, typically calculated to be 12.25%. Three exceptions to the aggregate MBL limit were authorized for credit unions (1) that have low-income designations or participate in the Community Development Financial Institutions program; (2) chartered for the purpose of making business loans (as determined by the NCUA); and (3) with a history of primarily making such loans (as determined by the NCUA). In addition to the statute, a NCUA regulation limits the aggregate amount of a business loan that can be made to one member or group of associated members at 15% of the credit union's net worth or $100,000, whichever is greater. MBL Definition and Requirement Updates On March 14, 2016, the NCUA implemented final MBL rules to replace the prescriptive requirements (and limitations) with a broad principles-based regulatory approach, which became effective on January 1, 2017. The prescriptive approach, for example, required credit unions to request MBL origination waivers for NCUA approval, among other requirements. According to the NCUA, the prescriptive approach took significant time and resources from both credit unions and NCUA, resulting in delays in processing MBL applications. The principles approach, by contrast, streamlines the MBL underwriting process by granting credit unions more flexibility and individual autonomy to best fit their members' needs. Credit unions are still expected to comply with prudential underwriting practices and commensurate net worth requirements. To facilitate the streamlined underwriting approach, the NCUA updated various MBL exemptions, resulting in several new definitions. For example, a commercial loan is a business loan (1) that is fully guaranteed by a federal or state agency or provides an advance commitment to purchase in full or (2) made to a nonmember or part of a joint lending arrangement with an entity that is not a member of the credit union system. Commercial loans do not count toward the MBL cap. On May 24, 2018, Section 105 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA; P.L. 115-174 ) amended the statutory MBL definition (i.e., it removed the words ''that is the primary residence of a member'') to address a disparity in the treatment of certain residential real estate loans made by credit unions and banks. The NCUA has since revised the MBL definition to exclude all extensions of credit that are fully secured by a lien on a one-to-four-family dwelling regardless of the borrower's occupancy status. For this reason, non-owner occupied real estate (e.g., rental property) loans are no longer considered MBLs and do not count toward the aggregate MBL cap. In addition to amending the MBL definition, EGRRCPA Section 103 amended the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA; P.L. 101-73 ) to exempt from appraisal requirements certain federally related, rural real estate transactions valued at or below $400,000 if no state-certified or state-licensed appraiser is available. The NCUA implemented this provision in a July 2019 final rule. Depository institution lending typically requires appraised collateral as backing for the loans. The rise in home prices (since the $250,000 appraisal threshold was set in 1994) along with the innovation of less expensive automated appraisal valuations arguably has reduced the need for manual appraisals on less expensive homes, thereby lowering borrowers' closing costs. The NCUA also increased the appraisal threshold to $1 million for commercial real estate and qualified MBLs. The $1 million commercial appraisal threshold is higher than the current $500,000 for banks. The NCUA board, however, did not unanimously agree on the $1 million commercial appraisal threshold because, despite the system's low exposure to commercial real estate risks, the banking system still has more expertise evaluating and managing commercial lending risks than does the credit union system. Policy Options Related to an MBL Cap Increase The credit union industry has generally supported efforts to increase or eliminate the MBL cap. At the end of 2018, the NCUA reported that the credit union system originated 4.7% in MBLs relative to its assets. If MBL capacity were increased, some larger credit unions could become more competitive with small community banks as well as with some midsize and regional banks. Credit unions that currently enjoy a presence in the commercial lending market, have a sufficiently large asset base, or already operating close to the existing statutory limit would be more likely to increase their presence in the commercial market if the cap were raised. In addition, the credit union system as a whole can support increased member business lending by increasing its use of participation loans . Financial institutions use loan participations to provide credit jointly. The loan originator, that often structures the loan participation arrangement, typically retains the largest share of the loan and sells smaller portions to other institutions. This practice allows the originator to maintain control of the customer relationship (including the loan servicing) and overcome funding limitations. In addition, all of the institutions involved in the participation loan use their individual portions of the loan to diversify their asset (loan) portfolios, which can be a cost-effective financial risk management tool. The credit union system could, therefore, become a more prominent competitor in the commercial lending market with the banking system, which also uses participation lending arrangements to diversify risks. Nevertheless, because all lending entails exposure to financial risks, having multiple credit unions involved in participations would still pose risk to the NCUSIF. From an economics perspective, a lending cap imposes an arbitrary limit that may be too high for some credit unions and too low for others, thus resulting in MBL shortages in the latter situations. For those credit unions that provide very few or no MBLs, a cap is irrelevant. Credit unions facing an active MBL market must abruptly cease this type of lending when activity volume reaches the cap, which some may argue is set "too low," given that they can no longer satisfy their memberships' financial needs. Hence, a lending cap is arguably a blunt instrument to the extent that it imposes the same requirement on all institutions without taking into account differences in asset size and market purview. Alternatively, a policy tool with a greater focus on the costs to originate MBLsâspecifically subjecting the net income derived from MBL activities to a type of taxâwould impose financial costs on credit unions without directly capping their lending ability. For example, the unrelated business income tax (UBIT) for tax-exempt organizations could be applied to MBLs. At the entity level, credit unions are exempt from federal income tax because they are not-for-profit financial cooperatives. If, for example, a credit union were to provide financial services (e.g., check-cashing) to nonmembers, any revenue generated from those activities would be subject to UBIT. Likewise, implementing the UBIT for MBLs would allow costs to grow in proportion to the amount of MBL activity while minimizing an abrupt discontinuation of the activity for those credit unions nearing an established policy cap. Another policy option, also with similarities to a tax, would be to adopt capitalization requirements comparable to those implemented for the banking system. The CUMAA established the MBL cap and a capital-based supervisory framework as tools to enhance prudential safety and soundness, ultimately providing more protection for the share deposit insurance fund. Enhanced capitalization (net worth) requirements arguably could substitute for an MBL cap. In short, policy tools operating via cost disincentives rather than quantity restrictions may still allow the credit union system to restrain MBL activity but with more flexibility for certain circumstances. Greater Flexibility in Lending Terms As previously discussed, the credit union system has evolved to a formal intermediation system that provides a range of financial services; however, it still has not acquired all of the lending powers comparable to those of banks. In addition, some of the system's current lending authorities are temporary and must be regularly renewed. This section reviews some of the temporary or limited lending authorities that the credit union industry and some policymakers argue could be enhanced. Interest Rate Ceilings and Temporary Exemptions The FCU Act sets an annual 12% interest rate ceiling (or cap) for loans made by federally chartered credit unions and federally insured state-chartered credit unions. The statutory loan interest rate ceiling was raised to 15% per annum after the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA; P.L. 96-221 ) was passed. The DIDMCA also authorized the NCUA to set a ceiling above the 15% cap for up to an 18-month period after consulting with Congress, the U.S. Department of the Treasury, and other federal financial agencies. The credit union interest rate ceiling is currently set at 18%. According to NCUA notices, its interest rate ceiling is an annual percentage rate (APR) rather than a pure interest rate. The APR represents the total annual borrowing costs of a loan expressed as a percentage, meaning that it is calculated using both interest rates and origination fees. The text-box below explains more about how to calculate and interpret the APR. In December 1980, the NCUA board raised the ceiling to 21%. In May 1987, the board reduced the rate ceiling and has since maintained it at 18%. When setting the interest rate above 15%, the NCUA must (1) review money market interest rate trends and (2) assess how prevailing interest rate movements (volatility) might threaten credit unions' safety and soundness in terms of the ability to sustain their lending activities, the effect on their net-interest income (earnings), and the effect on their liquidity. In July 2018, for example, the board expressed concern that a ceiling below 18% could result in lower net interest income, considered to be the key driver of credit union earnings, thus reducing credit union profitability and limiting borrowers' access to credit. On January 23, 2020, the board retained the current 18% rate ceiling for federally insured credit union loans, from March 11, 2020, through September 10, 2021, after (1) observing rising money market rates over the preceding six-month period; (2) observing adverse liquidity, capital, earnings, and growth trends; and (3) consulting with the relevant federal agencies. The Military Lending Act of 2006 (MLA; P.L. 109-364 ) was passed to protect active duty military personnel and their eligible family members from predatory lending. The MLA limits the Military Annual Percentage Rate (MAPR) to 36% for small-dollar loans and credit products, such as credit cards, deposit advances, overdraft lines of credits, and certain types of installment loans. Â The MLA, however, does not apply to mortgages, automobile loans, and secured loans. A credit union borrower typically receives an APR below the MAPR ceiling for covered transactions. Hence, the credit union interest rate ceiling is currently below the federal MLA cap on consumer loans offered to military personnel. The NCUA, however, permits the credit union system to make payday alternative loans (PALs) to its membership with certain restrictions. Under the existing permissible framework, PAL amounts may range from $200 to $1,000; they must have fully amortizing payments; the term length must range from 46 days to 180 days; and the application fee must be $20 or less. If the borrower cannot repay the initial PAL, a credit union may allow for a rollover into a new PAL of the same initial maturity as long as no additional fees are charged or no additional credit is extended. No more than three PALs can be made to a single borrower in a rolling six-month period. This specific loan product, referred to as a PALs I, requires a one-month membership before it can be offered. The PALs program has a 28% ceiling, meaning that it is exempt from the 18% interest rate ceiling that covers other loan originations made by federally insured credit unions and from the 36% MAPR ceiling. The MAPR ceiling includes the origination fees, but the NCUA PALs ceiling excludes the $20 origination fee. The PAL loan APR when including the $20 origination fee, in many cases, exceeds the 36% MAPR ceiling. To avoid lending reductions by credit unions to military service customers, the NCUA requested and was granted a PAL exemption from the MAPR so that the PAL application fee is not included in the APR computation. The higher PAL ceiling also does not include an initial origination fee of up to $20 in the APR calculation. On October 1, 2019, the NCUA broadened the PALs framework to allow credit unions to offer additional short-term, small-dollar products. A new PALs II product may have an amount up to $2000 and have fully amortizing payments over a 1-to-12-month term. Furthermore, there is no minimum membership length requirement to be eligible for a PALs II, which may allow borrowers to quickly consolidate multiple non-credit union payday loans into one PALs loan. Credit unions may not charge any overdraft or insufficient funds fees for any PALs II drawn against a member's account, which may reduce the likelihood of creating a negative balance in the account while still allowing credit unions to make sufficient (as opposed to maximum) profit in this line of business. Loan Maturity Length and Exemption Caps When the FCU Act was initially passed, credit unions were allowed to make loans not to exceed two years. Congress has since increased system-originated loan maturity lengths. On September 22, 1959, Section 8 of P.L. 86-354 amended the FCU Act to increase credit union loan maturities for up to 5 years. On July 5, 1968, Section 1 of P.L. 90-375 amended the FCU Act to allow credit unions to make unsecured loans with maturities not to exceed 5 years and secured loans with maturities not to exceed 10 years. The Mini Bill of 1977 allowed loan maturities not to exceed 12 years. It also allowed credit unions to make residential real estate loans with maturities up to 30 years; home improvement loans and mobile home loans (for principal residence) were allowed for up to 15 years. The Garn-St. Germain Depository Institutions Act of 1982 (Garn-St. Germain Act; P.L. 97-320 , 96 Stat. 1469) permitted mortgage loan refinancing, and extended the maturity limit to 15 years for all second mortgages. The Competitive Equality Banking Act of 1987 (CEBA; P.L. 100-86 ) amended the FCU Act to authorize the NCUA to allow second-mortgage, home-improvement, and mobile home loans beyond 15 years. On October 1989, the NCUA finalized the rule to extend the maturity limit to 20 years. On October 13, 2006, Section 502 of P.L. 109-351 amended the FCU Act to set a 15-year maximum maturity on credit union loans, with some exceptions. For example, residential one-to-four family mortgages may exceed the 15-year maturity term as long as the property is the borrower's primary residence. In the 116 th Congress, H.R. 1661 was introduced on March 8, 2019, and referred to the House Committee on Financial Services. H.R. 1661 , if enacted, would amend Section 107(5) of the FCU Act to allow NCUA the flexibility to extend maturities for all loans, including MBLs and student loans. Developments in the Credit Union System's Prudential Risk Management Congress created the NCUSIF in 1970 to be the insurance fund for all federally regulated credit unions. The NCUA manages the NCUSIF, which is completely funded by insured credit unions. The NCUSIF's primary income source is the premiums collected from credit unions, which pay the fund's operating expenses, cover losses, and build reserves. Premiums were originally set at one-twelfth of 1% of the total amount of member share accounts, but P.L. 98-369 required each federally insured credit union to maintain a fund deposit equal to 1% of its insured share accounts. Examination fees and any penalties NCUA collects from insured institutions are also deposited into the NCUSIF. Fund portions not applied to current operations can be invested in government securities, and the earnings also generate fund income. The NCUSIF's reserves consist of the 1% deposit, plus the fund's accumulated insurance premiums, fees, and interest earnings. Prudential safety and soundness regulation, which includes holding sufficient capital reserves, may reduce the financial institutions' insolvency (failure) risk and promote public confidence in the financial system. Although higher capital requirements may not prevent adverse financial risk events from occurring, more capital enhances the financial firms' ability to absorb greater losses associated with potential loan defaults. The enhanced absorption capacity may strengthen public confidence in the soundness of these financial institutions and increase their ability to function during periods of financial stress. For this reason, the NCUA has proposed enhanced net worth (capitalization) requirements for credit unions, which is intended to increase the credit union system's resilience to insolvency risk and to minimize possible losses to the NCUSIF and ultimately to taxpayers. These prudential issues are discussed in this section. Increased Exposure to Mortgage Credit Risk and Recent NCUSIF Management Initiatives Credit unions were granted the authority to increase their participation in the mortgage market during the late 1970s and 1980s. In light of the savings and loan (S&L) crisis, discussed in the text box below, the credit union system was also granted more powers to mitigate interest rate risk stemming from exposure to mortgage market risk. The following list highlights some of these authorities: After the Mini Bill of 1977 was passed, the NCUA adopted regulations on August 7, 1978, permitting credit unions to sell mortgage loans in the secondary marketâspecifically to Fannie Mae, Freddie Mac, and Ginnie Mae (government-sponsored enterprises, or GSEs) as well as to federal, state, and local housing authorities. On August 16, 1978, federal credit unions were also granted the authority to sell their members' federally guaranteed student loans. The Garn-St. Germain Act, as mentioned, eliminated limits on the size and maturity of first lien mortgages, permitted refinancing of mortgage loans, and extended the maturity limit to 15 years for all second mortgages. The CEBA amended the FCU Act to authorize the NCUA to allow second-mortgage, home-improvement, and mobile home loans beyond 15 years. The Garn-St. Germain Act also amended the FCU Act to allow credit unions to issue and sell securities, which are guaranteed pursuant to Section 306(g) of the National Housing Act. In other words, federal credit unions were given the authority to participate in activities that would allow them to securitize assets. In 1988, the NCUA allowed credit unions to invest in mortgage-backed securities (MBS). Rather than hold, for example, 30-year mortgages, the ability to hold MBS of shorter (e.g., 10 year) maturities reduces asset duration risk (discussed in the text box below). In 1989, credit unions were allowed to use financial derivatives to purchase insurance against declines in GSE-issued MBS values that would occur after a rise in interest rates, thus protecting the overall value of their asset (loan) portfolios. (NCUA noted that the credit union system had experienced a 48% increase in real estate lending in 1987.) Consequently, as credit unions and other financial intermediaries increased their participation in the mortgage market, they also grew more susceptible to the financial risks linked to this market. Rising interest rates was a major risk factor in the S&L crisis during the 1980s, whereas rising mortgage defaults or credit risk was a major factor in the financial crisis that occurred in 2008. Because of the greater exposure to mortgage credit risk, the credit union system along with numerous financial entities in 2008 experienced distress after a sharp rise in the percentage of seriously delinquent mortgage loans in the United States. According to the NCUA chairman, corporate credit unions faced increasing liquidity pressures during 2008 after a significant portion of their MBSsâfollowing a deterioration of the underlying real estate collateralâlost value and were subsequently downgraded below investment grade. Corporate credit unions operate as wholesale credit unions, meaning that they provide financing, investment, and clearing services for the retail credit unions that interface directly with customers. The corporates accept deposits from, as well as provide liquidity and correspondent lending services to, retail credit unions. This reduces the costs that smaller institutions would bear individually to perform various financial transactions for members. Given that retail credit unions are cooperative owners of corporate credit unions, they are also federally insured by the NCUSIF. The NCUA placed two corporate credit unions into conservatorship in March 2009 and three additional corporates in September 2010. The five corporates under conservatorship at the time had represented approximately 70% of the entire corporate system's assets and 98.6% of the investment losses within the system. The share equity ratioâthe ratio of total funds in the NCUSIF relative to the estimated amount of share deposits held by credit unionsâis an indicator that represents the adequacy of reserves available to protect share depositors and maintain public confidence. The NCUA annually determines the normal operating level for the share equity ratio, which statutorily must fall between 1.2% and 1.5%. The 2006 equity ratio was 1.30% and fell below the statutory minimum to 1.18% by August 2010. The NCUA board may assess a premium when the ratio falls between 1.2% and the declared operating level; however, it is required to assess a premium if the equity ratio falls below 1.2%. Similarly, the NCUA board may declare a dividend if, at the end of the calendar year, the equity level exceeds the normal operating level; it is required to do so if the equity ratio exceeds 1.5%. Rather than deplete the NCUSIF, Congress in May 2009 established a Temporary Corporate Credit Union Stabilization Fund (TCCUSF) to accrue and recover losses from the corporates. The TCCUSF borrowed from Treasury to help cover conservatorship costs, and the NCUA also raised assessments on all federally insured credit unions, including those that did not avail themselves of corporate credit union services. The premium assessment reflected a plan to restore the NCUSIF equity ratio to 1.3%, which happened by December 2011. After achieving a positive net position of $1.9 billion as of May 2017, the NCUA, in July 2017, proposed closing the TCCUSF and providing credit unions with a Share Insurance Fund distribution in 2018, estimated to be between $600 million and $800 million. The TCCUSF officially closed on October 1, 2017; its assets and obligations were transferred to the NCUSIF. The NCUA reduced the share equity ratio from 1.39, which had previously been set in September 2017, to 1.38, administering an equity distribution (rebate) of $160.1 million to member institutions. The Risk-Based Capital Rule On January 23, 2014, the NCUA announced increases in capital requirements for a subset of natural person credit unions designated as complex . NCUA initially defined a complex credit union to have at least $50 million in assets. On January 27, 2015, the NCUA revised the initial proposed rule, amending the definition as having at least $100 million in assets. On October 29, 2015, the NCUA finalized the risk-based capital rule. Some of the rule's specific requirements included the following: A new asset risk-weighting system was introduced that would apply to complex credit unions, which would be more consistent with the methodology used for U.S. federally insured banking institutions. A new risk-based capital ratio (defined using the narrower risk-based capital measure in the numerator and total risk-weighted assets, which are computed using the new risk-weighting system, in the denominator) of 10% would be required for complex credit unions to be well-capitalized under the prompt corrective action supervisory framework. The risk-based capital ratio was designed to be more consistent with the capital adequacy requirements commonly applied to depository (banking) institutions worldwide. Compliance of complex credit unions with the risk-based capital ratio requirements as well as the existing statutory 7% net-worth asset ratio would have been effective by January 1, 2019, to avoid NCUA supervisory enforcement actions. Non-complex credit unions with assets below $100 million would not have been required to comply with the new risk-weighting system, and they would no longer be required to risk-weight their assets. Instead, non-complex credit unions must comply with the existing statutory 7% net-worth asset ratio. Credit unions with a concentration in commercial lending in excess of 50% of their total assets would be required to hold higher amounts of net worth to abate the higher levels of concentration risk. On December 17, 2019, the NCUA issued a final rule to move the effective date to January 1, 2022. The NCUA also amended the complex credit union's definition by increasing the asset threshold level from $100 million to $500 million. The NCUA also wanted more time to consider the feasibility of adopting a capital framework for the credit union system that would be similar to the community bank leverage ratio framework. Under this framework, banks with less than $10 billion in average total consolidated assets may elect to maintain a leverage ratio of greater than 9% to satisfy both the risk-based and leverage capital requirements to be well-capitalized. Nevertheless, the delays have prompted some Members of Congress to monitor the implementation progress of the risk-based capital rule for credit unions. Supplemental Capital Because credit unions do not issue common stock equity, they do not have access to capital sources beyond retained earnings. If alternative sources of capital, referred to as supplemental capital, were to be used in addition to net worth, then credit unions would be able to increase their lending while remaining in compliance with their safety and soundness net worth requirements. The proposal discussed below to adopt supplemental capital requirements would enhance the credit union system's lending capacity and introduce a new prudential risk management tool. An NCUA working group has developed three general sources of supplemental capital, all of which would be repaid after reimbursement of the NCUSIF following liquidation of an insolvent credit union. Credit unions could raise voluntary patronage capital (VPC) if (noninstitutional) members were to purchase "equity shares" in the organization. VPC equity shares would pay dividends; however, a VPC investor would not obtain any additional voting rights, and no investment would be allowed to exceed 5% of a credit union's net worth. mandatory membership capital (MMC) if a member pays what may be conceptually analogous to a membership fee. MMC capital would still be considered equity for the credit union but, unlike VPC, it would not accrue any dividends. subordinate debt (SD) from external and institutional investors. SD investors would have no voting rights or involvement in a credit union's managerial affairs. SD would function as a hybrid debt-equity instrument, meaning the investor would simply be a creditor with no equity share in the credit union while it is solvent and would not be repaid principal or interest should the credit union become insolvent. SD investors must make a minimum five-year investment with no option for early redemption. A credit union 's net worth is defined in statute; therefore, congressional legislative action would be required to permit other forms of supplemental capital to count toward their net worth prudential requirements. Conclusion Credit union industry advocates argue that lifting lending restrictions to make the system more comparable with the banking system would increase borrowers' available pools of credit. Community banks, which often compete with credit unions, argue that policies such as raising the business lending cap, for example, would allow credit unions to expand beyond their congressionally mandated mission and could pose a threat to financial stability. By amending the FCU Act several times to expand permissible lending activities, Congress arguably had recognized that the credit union system has evolved into a more sophisticated financial intermediation system. Congress has also emphasized prudential safety and soundness concerns. Following the 2008 financial crisis, the federal bank prudential regulators implemented prudential requirements to enhance the U.S. banking system's resiliency to systemic risk events. The NCUA initially proposed in 2014 to increase capital requirements particularly for large credit unions (those with $500 million or more in assets); however, the proposal has been revised, delayed, and is currently scheduled to become effective in January 2022. In the meantime, the NCUA has implemented and proposed rules to support expanding lending activities that would increase financial transactions volumes (economies of scale), thus possibly generating greater cash flows and profitability for the credit union system. The adoption of enhanced prudential net worth requirements for the credit union system, however, arguably may facilitate mitigating the financial risks that typically accompany increases in lending. Summary:	null	96	44,096	44,098	44,098	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Credit unions are nonprofit depository financial institutions that are owned and operated entirely by their members. In other words, na tural person credit unions, also known as retail credit unions, are financial cooperatives that return profits to their memberships. For this reason, member deposits are referred to as shares , which may be used to provide loans to members, other credit unions, and credit union organizations; and the interest earned by members is referred to as share d ividends , which are comparable to shareholder profit distributions. Credit unions (and banks) engage in financial intermediation , or facilitating transfers of funds back and forth between savers (via accepting deposits) and borrowers (via loans). The National Credit Union Administration (NCUA), an independent federal agency, is the primary federal regulator and share deposit insurer for credit unions. There are three federal bank prudential regulators: the Office of the Comptroller of the Currency (OCC) charters and supervises national depository (commercial) banks; the Federal Deposit Insurance Corporation (FDIC) provides deposit insurance by collecting insurance premiums from member banks and places the proceeds in its Deposit Insurance Fund (DIF), which are subsequently used to reimburse depositors when acting as the receiver of a failed bank; and the Federal Reserve provides lender-of-last-resort liquidity to solvent banks via its discount window. The NCUA, by comparison, serves all three functions for federally regulated credit unions. The NCUA also manages the National Credit Union Share Insurance Fund (NCUSIF), which is the federal deposit insurance fund for credit unions. Although scholars are unable to pinpoint the precise origin of the credit union movement, the organization of membership-owned cooperatives to raise funds for members lacking sufficient collateral or wealth necessary to qualify for bank loans dates back to colonial times. During their infancy stages, credit cooperatives basically emerged as a form of microlending in financially underserved localities to provide unsecured small-dollar loans. Small group cooperatives initially relied on pooled funds, donations, and subsidies to make loans (allocated via lotteries or auctions) until evolving into self-sufficient systems more reliant on deposits. The advantage of small memberships for group credit cooperatives allow members to know each other, which facilitates peer monitoring of the lending decisions and borrowers' repayment behavior. The original concept of a credit union stemmed from cooperatives formed to promote thrift among its members and to provide them with a low-cost source of credit. Following numerous bank failures and runs during the Great Depression that resulted in an extensive contraction of credit, Congress sought to enhance cooperative organizations' ability to meet their members' credit needs. Congress passed the Federal Credit Union Act of 1934 (FCU Act; 48 Stat. 1216) to create a class of federally chartered financial institutions for "promoting thrift among its members and creating a source of credit for provident or productive purposes." Over time, Congress expanded credit unions' permissible activities because the original concept of a credit union arguably needed to evolve with the marketplace. According to the NCUA, When Congress amended the FCU Act in 1977 to add an extensive array of savings, lending and investment powers, it intended to "allow credit unions to continue to attract and retain the savings of their members by providing essential and contemporary services," and acknowledged that credit unions are entitled to "updated and more flexible authority granting them the opportunity to better serve their members in a highly-competitive and ever-changing financial environment." H.R. Rep. 95â23 at 7 (1977), reprinted in 1977 U.S.C.C.A.N. 105, 110. Congress acknowledged the difficulty in "regulating contemporary financial institutions within the framework of an Act that has on a continuing basis required major updating by means of regulation." Although small memberships may be more advantageous for informal microlending systems, advanced intermediation systemsâsuch as banking and the modern credit union industryâbenefit from economies of scale . In other words, more assets (loans), greater access to deposits, and increased transactions volumes provide greater risk diversification and lower average cost per transaction, thus reducing vulnerability to financial disruptions that would be confined to a particular small group. On April 19, 1977, P.L. 95-22 (the Mini Bill of 1977) substantially amended the FCU Act. It authorized the credit union industry to provide many financial products (e.g., loans, checking and savings deposit services) similar to those offered by the commercial banking system. Today, modern credit unions primarily engage in consumer and residential lending, and some originate commercial business loans for members. The lending and investment powers of the credit union industry, however, are still more restrictive than those of commercial banks. Credit unions can make loans only to their members, other credit unions, and credit union organizations, thus limiting who they can serve. A statutory interest rate cap for credit union loans exists (with exceptions that allow for sufficient earnings necessary to maintain credit availability). Loans made by federally insured credit unions are generally limited to 15 years (except for residential mortgages). Federal credit unions' investment authority is limited by statute to loans, government securities, deposits in other financial institutions, and certain other limited investments given their origins to promote thrift rather than be long-term investors. Business lending restrictions include an aggregate limit on an individual credit union's member business loan balances and on the amount that can be loaned to one member. If some or all of these restrictions are relaxed to allow the credit union system's lending powers to expand and become more comparable to the banking system, the prudential regulatory regimes arguably may require greater harmonization to protect against comparable financial risk exposures. This report focuses on policy developments pertaining to the credit union system. It begins with an overview of recent efforts to further expand system lending capacities. Next, it describes how the system's exposure to mortgage credit (default) risk grew after credit unions were given greater intermediation authorities in the mortgage lending space. It then discusses the system's financial distress and recovery resulting from the 2008 financial crisis, and updates the progress made to improve the system's resiliency to credit and insolvency risks. This discussion will use the balance sheet terminology defined in the box below. Expanding Permissible Lending Activities Congress has passed legislation, and the NCUA has implemented and proposed rules, supporting the expansion of lending activities that would increase financial transactions volumes (economies of scale). The expansion of lending activities, as discussed in this section, is likely to generate greater cash flows and revenues for the credit union system. Field of Membership and Common Bonds A credit union's "field of membership" is the legal definition of who is eligible to join. Federal or state governments grant credit union charters on the basis of a "common bond." There are three types of charters: a (1) single common bond (occupation or association based); (2) multiple common bond (more than one group each having a common bond of occupation or association); and (3) community-based (geographically defined) common bond. Individual credit unions are owned by their memberships. Credit union members elect a board of directors from their institution's membership (one member, one vote). Credit unions can make loans only to their members, other credit unions, and credit union organizations. Field of membership restrictions may limit an intermediary's ability to collect deposits, which are used to fund loans. Common bond requirements on credit unions can be considered analogous to U.S. restrictions on interstate and branch banking, which are no longer in place. By limiting access to supplementary sources of funds, a credit union (or bank) becomes more vulnerable to cash flow disruptions (e.g., increases in loan defaults, substantial deposit withdrawals) following adverse eventsâparticularly those that would directly affect its field of membership. Despite field of membership restrictions, some of the larger credit unions may still be able to achieve a sufficiently large and diversified depositor base, allowing them to enjoy greater economies of scale. Nevertheless, all intermediaries of all sizes are still vulnerable to a sudden need for liquid funds following some unexpected or adverse interest rate movements or a national recession, discussed in the section entitled "Increased Exposure to Mortgage Credit Risk and Recent NCUSIF Management Initiatives." For this reason, access to more sources of depositors arguably enhances liquidity management for credit unions and banks, which typically have assets (portfolio loans) that are less liquid than their liabilities (deposits). On December 7, 2016, the NCUA published a final rule comprehensively amending its chartering and field of membership rules to maximize access to federal credit union services to the extent permitted by law. Although NCUA cannot change the three initial statutory field of membership categories, it revised certain terms such as local community , rural district , underserved area , and multiple common-bond credit union , among other things to broaden access to federal credit unions. Competitors of credit unions, however, legally challenged the revisions, arguing that an associational charter may limit the ability of a credit union to add underserved areas (e.g., local urban or rural underserved areas as determined by the NCUA) to its field of membership unless it also has a multiple common-bond charter. On August 20, 2019, the D.C. Circuit Court of Appeals upheld the rule but remanded two provisions of the NCUA's revised field of membership rule. One provision, to satisfy a community-based common bond charter, would have allowed a combined statistical area with fewer than 2.5 million people to qualify as a local community; arguably, this provision could have had a discriminatory impact on poor and minority urban residents. The second remanded provision would have raised the population limit for rural districts from the greater of 250,000 or 3% of the relevant state's population to 1 million people; some geographical areas arguably could have been defined to extend beyond the state borders of a credit union's headquarters. The NCUA proposed to clarify its authority to reject fields of membership applications that would want to exclude low- or moderate-income individuals. On November, 7, 2019, the NCUA proposed to re-adopt the provision pertaining to the combined statistical area to clarify existing requirements and add an explicit provision to the rule to address potential discriminatory concerns. Member Business and Commercial Lending Lending caps on member business (commercial) loans offered by credit unions did not exist until 1998. Congress included provisions in the Credit Union Membership Access Act of 1998 (CUMAA; P.L. 105-219 ) that established a commercial lending cap that limits most credit unions to lending no more than 12.25% of their assets to small businesses, among other provisions. The following passages from the Senate's CUMAA report explain the rationale for establishing the member business loan (MBL) cap. "The purpose of H.R. 1151, the CUMAA, as reported from the Committee, is to amend existing law with regard to the field of membership of federal credit unions, to preserve the integrity and purpose of federal credit unions and to enhance supervisory oversight of federally insured credit unions.... The bill significantly strengthens the prudential safeguards applicable to federally insured credit unions and makes the credit union system safer, sounder and more resilient." " Section 203. Limitation on member business loans . In new section 107A(a), the Committee has imposed substantial new restrictions on commercial business lending by insured credit unions. Those restrictions are intended to ensure that credit unions continue to fulfill their specified mission of meeting the credit and savings needs of consumers, especially persons of modest means, through an emphasis on consumer rather than business loans. The Committee action will prevent significant amounts of credit union resources from being allocated in the future to large commercial loans that may present additional safety and soundness concerns for credit unions, and that could potentially increase the risk of taxpayer losses through the National Credit Union Share Insurance Fund ('Fund')." The CUMAA contained the following provisions: The MBL definition was codified and defined as "any loan, line of credit, or letter of credit, the proceeds of which will be used for a commercial, corporate or other business investment property or venture, or agricultural purpose," but it does not include an extension of credit that is fully secured by a lien on a one-to-four-family dwelling that is a member's primary residence. The aggregate amount of MBLs that can be made by an individual credit union was limited to the lesser of 1.75 times the credit union's actual net worth or 1.75 times the minimum net worth amount required to be well-capitalized under the prompt corrective action supervisory framework, typically calculated to be 12.25%. Three exceptions to the aggregate MBL limit were authorized for credit unions (1) that have low-income designations or participate in the Community Development Financial Institutions program; (2) chartered for the purpose of making business loans (as determined by the NCUA); and (3) with a history of primarily making such loans (as determined by the NCUA). In addition to the statute, a NCUA regulation limits the aggregate amount of a business loan that can be made to one member or group of associated members at 15% of the credit union's net worth or $100,000, whichever is greater. MBL Definition and Requirement Updates On March 14, 2016, the NCUA implemented final MBL rules to replace the prescriptive requirements (and limitations) with a broad principles-based regulatory approach, which became effective on January 1, 2017. The prescriptive approach, for example, required credit unions to request MBL origination waivers for NCUA approval, among other requirements. According to the NCUA, the prescriptive approach took significant time and resources from both credit unions and NCUA, resulting in delays in processing MBL applications. The principles approach, by contrast, streamlines the MBL underwriting process by granting credit unions more flexibility and individual autonomy to best fit their members' needs. Credit unions are still expected to comply with prudential underwriting practices and commensurate net worth requirements. To facilitate the streamlined underwriting approach, the NCUA updated various MBL exemptions, resulting in several new definitions. For example, a commercial loan is a business loan (1) that is fully guaranteed by a federal or state agency or provides an advance commitment to purchase in full or (2) made to a nonmember or part of a joint lending arrangement with an entity that is not a member of the credit union system. Commercial loans do not count toward the MBL cap. On May 24, 2018, Section 105 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA; P.L. 115-174 ) amended the statutory MBL definition (i.e., it removed the words ''that is the primary residence of a member'') to address a disparity in the treatment of certain residential real estate loans made by credit unions and banks. The NCUA has since revised the MBL definition to exclude all extensions of credit that are fully secured by a lien on a one-to-four-family dwelling regardless of the borrower's occupancy status. For this reason, non-owner occupied real estate (e.g., rental property) loans are no longer considered MBLs and do not count toward the aggregate MBL cap. In addition to amending the MBL definition, EGRRCPA Section 103 amended the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA; P.L. 101-73 ) to exempt from appraisal requirements certain federally related, rural real estate transactions valued at or below $400,000 if no state-certified or state-licensed appraiser is available. The NCUA implemented this provision in a July 2019 final rule. Depository institution lending typically requires appraised collateral as backing for the loans. The rise in home prices (since the $250,000 appraisal threshold was set in 1994) along with the innovation of less expensive automated appraisal valuations arguably has reduced the need for manual appraisals on less expensive homes, thereby lowering borrowers' closing costs. The NCUA also increased the appraisal threshold to $1 million for commercial real estate and qualified MBLs. The $1 million commercial appraisal threshold is higher than the current $500,000 for banks. The NCUA board, however, did not unanimously agree on the $1 million commercial appraisal threshold because, despite the system's low exposure to commercial real estate risks, the banking system still has more expertise evaluating and managing commercial lending risks than does the credit union system. Policy Options Related to an MBL Cap Increase The credit union industry has generally supported efforts to increase or eliminate the MBL cap. At the end of 2018, the NCUA reported that the credit union system originated 4.7% in MBLs relative to its assets. If MBL capacity were increased, some larger credit unions could become more competitive with small community banks as well as with some midsize and regional banks. Credit unions that currently enjoy a presence in the commercial lending market, have a sufficiently large asset base, or already operating close to the existing statutory limit would be more likely to increase their presence in the commercial market if the cap were raised. In addition, the credit union system as a whole can support increased member business lending by increasing its use of participation loans . Financial institutions use loan participations to provide credit jointly. The loan originator, that often structures the loan participation arrangement, typically retains the largest share of the loan and sells smaller portions to other institutions. This practice allows the originator to maintain control of the customer relationship (including the loan servicing) and overcome funding limitations. In addition, all of the institutions involved in the participation loan use their individual portions of the loan to diversify their asset (loan) portfolios, which can be a cost-effective financial risk management tool. The credit union system could, therefore, become a more prominent competitor in the commercial lending market with the banking system, which also uses participation lending arrangements to diversify risks. Nevertheless, because all lending entails exposure to financial risks, having multiple credit unions involved in participations would still pose risk to the NCUSIF. From an economics perspective, a lending cap imposes an arbitrary limit that may be too high for some credit unions and too low for others, thus resulting in MBL shortages in the latter situations. For those credit unions that provide very few or no MBLs, a cap is irrelevant. Credit unions facing an active MBL market must abruptly cease this type of lending when activity volume reaches the cap, which some may argue is set "too low," given that they can no longer satisfy their memberships' financial needs. Hence, a lending cap is arguably a blunt instrument to the extent that it imposes the same requirement on all institutions without taking into account differences in asset size and market purview. Alternatively, a policy tool with a greater focus on the costs to originate MBLsâspecifically subjecting the net income derived from MBL activities to a type of taxâwould impose financial costs on credit unions without directly capping their lending ability. For example, the unrelated business income tax (UBIT) for tax-exempt organizations could be applied to MBLs. At the entity level, credit unions are exempt from federal income tax because they are not-for-profit financial cooperatives. If, for example, a credit union were to provide financial services (e.g., check-cashing) to nonmembers, any revenue generated from those activities would be subject to UBIT. Likewise, implementing the UBIT for MBLs would allow costs to grow in proportion to the amount of MBL activity while minimizing an abrupt discontinuation of the activity for those credit unions nearing an established policy cap. Another policy option, also with similarities to a tax, would be to adopt capitalization requirements comparable to those implemented for the banking system. The CUMAA established the MBL cap and a capital-based supervisory framework as tools to enhance prudential safety and soundness, ultimately providing more protection for the share deposit insurance fund. Enhanced capitalization (net worth) requirements arguably could substitute for an MBL cap. In short, policy tools operating via cost disincentives rather than quantity restrictions may still allow the credit union system to restrain MBL activity but with more flexibility for certain circumstances. Greater Flexibility in Lending Terms As previously discussed, the credit union system has evolved to a formal intermediation system that provides a range of financial services; however, it still has not acquired all of the lending powers comparable to those of banks. In addition, some of the system's current lending authorities are temporary and must be regularly renewed. This section reviews some of the temporary or limited lending authorities that the credit union industry and some policymakers argue could be enhanced. Interest Rate Ceilings and Temporary Exemptions The FCU Act sets an annual 12% interest rate ceiling (or cap) for loans made by federally chartered credit unions and federally insured state-chartered credit unions. The statutory loan interest rate ceiling was raised to 15% per annum after the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA; P.L. 96-221 ) was passed. The DIDMCA also authorized the NCUA to set a ceiling above the 15% cap for up to an 18-month period after consulting with Congress, the U.S. Department of the Treasury, and other federal financial agencies. The credit union interest rate ceiling is currently set at 18%. According to NCUA notices, its interest rate ceiling is an annual percentage rate (APR) rather than a pure interest rate. The APR represents the total annual borrowing costs of a loan expressed as a percentage, meaning that it is calculated using both interest rates and origination fees. The text-box below explains more about how to calculate and interpret the APR. In December 1980, the NCUA board raised the ceiling to 21%. In May 1987, the board reduced the rate ceiling and has since maintained it at 18%. When setting the interest rate above 15%, the NCUA must (1) review money market interest rate trends and (2) assess how prevailing interest rate movements (volatility) might threaten credit unions' safety and soundness in terms of the ability to sustain their lending activities, the effect on their net-interest income (earnings), and the effect on their liquidity. In July 2018, for example, the board expressed concern that a ceiling below 18% could result in lower net interest income, considered to be the key driver of credit union earnings, thus reducing credit union profitability and limiting borrowers' access to credit. On January 23, 2020, the board retained the current 18% rate ceiling for federally insured credit union loans, from March 11, 2020, through September 10, 2021, after (1) observing rising money market rates over the preceding six-month period; (2) observing adverse liquidity, capital, earnings, and growth trends; and (3) consulting with the relevant federal agencies. The Military Lending Act of 2006 (MLA; P.L. 109-364 ) was passed to protect active duty military personnel and their eligible family members from predatory lending. The MLA limits the Military Annual Percentage Rate (MAPR) to 36% for small-dollar loans and credit products, such as credit cards, deposit advances, overdraft lines of credits, and certain types of installment loans. Â The MLA, however, does not apply to mortgages, automobile loans, and secured loans. A credit union borrower typically receives an APR below the MAPR ceiling for covered transactions. Hence, the credit union interest rate ceiling is currently below the federal MLA cap on consumer loans offered to military personnel. The NCUA, however, permits the credit union system to make payday alternative loans (PALs) to its membership with certain restrictions. Under the existing permissible framework, PAL amounts may range from $200 to $1,000; they must have fully amortizing payments; the term length must range from 46 days to 180 days; and the application fee must be $20 or less. If the borrower cannot repay the initial PAL, a credit union may allow for a rollover into a new PAL of the same initial maturity as long as no additional fees are charged or no additional credit is extended. No more than three PALs can be made to a single borrower in a rolling six-month period. This specific loan product, referred to as a PALs I, requires a one-month membership before it can be offered. The PALs program has a 28% ceiling, meaning that it is exempt from the 18% interest rate ceiling that covers other loan originations made by federally insured credit unions and from the 36% MAPR ceiling. The MAPR ceiling includes the origination fees, but the NCUA PALs ceiling excludes the $20 origination fee. The PAL loan APR when including the $20 origination fee, in many cases, exceeds the 36% MAPR ceiling. To avoid lending reductions by credit unions to military service customers, the NCUA requested and was granted a PAL exemption from the MAPR so that the PAL application fee is not included in the APR computation. The higher PAL ceiling also does not include an initial origination fee of up to $20 in the APR calculation. On October 1, 2019, the NCUA broadened the PALs framework to allow credit unions to offer additional short-term, small-dollar products. A new PALs II product may have an amount up to $2000 and have fully amortizing payments over a 1-to-12-month term. Furthermore, there is no minimum membership length requirement to be eligible for a PALs II, which may allow borrowers to quickly consolidate multiple non-credit union payday loans into one PALs loan. Credit unions may not charge any overdraft or insufficient funds fees for any PALs II drawn against a member's account, which may reduce the likelihood of creating a negative balance in the account while still allowing credit unions to make sufficient (as opposed to maximum) profit in this line of business. Loan Maturity Length and Exemption Caps When the FCU Act was initially passed, credit unions were allowed to make loans not to exceed two years. Congress has since increased system-originated loan maturity lengths. On September 22, 1959, Section 8 of P.L. 86-354 amended the FCU Act to increase credit union loan maturities for up to 5 years. On July 5, 1968, Section 1 of P.L. 90-375 amended the FCU Act to allow credit unions to make unsecured loans with maturities not to exceed 5 years and secured loans with maturities not to exceed 10 years. The Mini Bill of 1977 allowed loan maturities not to exceed 12 years. It also allowed credit unions to make residential real estate loans with maturities up to 30 years; home improvement loans and mobile home loans (for principal residence) were allowed for up to 15 years. The Garn-St. Germain Depository Institutions Act of 1982 (Garn-St. Germain Act; P.L. 97-320 , 96 Stat. 1469) permitted mortgage loan refinancing, and extended the maturity limit to 15 years for all second mortgages. The Competitive Equality Banking Act of 1987 (CEBA; P.L. 100-86 ) amended the FCU Act to authorize the NCUA to allow second-mortgage, home-improvement, and mobile home loans beyond 15 years. On October 1989, the NCUA finalized the rule to extend the maturity limit to 20 years. On October 13, 2006, Section 502 of P.L. 109-351 amended the FCU Act to set a 15-year maximum maturity on credit union loans, with some exceptions. For example, residential one-to-four family mortgages may exceed the 15-year maturity term as long as the property is the borrower's primary residence. In the 116 th Congress, H.R. 1661 was introduced on March 8, 2019, and referred to the House Committee on Financial Services. H.R. 1661 , if enacted, would amend Section 107(5) of the FCU Act to allow NCUA the flexibility to extend maturities for all loans, including MBLs and student loans. Developments in the Credit Union System's Prudential Risk Management Congress created the NCUSIF in 1970 to be the insurance fund for all federally regulated credit unions. The NCUA manages the NCUSIF, which is completely funded by insured credit unions. The NCUSIF's primary income source is the premiums collected from credit unions, which pay the fund's operating expenses, cover losses, and build reserves. Premiums were originally set at one-twelfth of 1% of the total amount of member share accounts, but P.L. 98-369 required each federally insured credit union to maintain a fund deposit equal to 1% of its insured share accounts. Examination fees and any penalties NCUA collects from insured institutions are also deposited into the NCUSIF. Fund portions not applied to current operations can be invested in government securities, and the earnings also generate fund income. The NCUSIF's reserves consist of the 1% deposit, plus the fund's accumulated insurance premiums, fees, and interest earnings. Prudential safety and soundness regulation, which includes holding sufficient capital reserves, may reduce the financial institutions' insolvency (failure) risk and promote public confidence in the financial system. Although higher capital requirements may not prevent adverse financial risk events from occurring, more capital enhances the financial firms' ability to absorb greater losses associated with potential loan defaults. The enhanced absorption capacity may strengthen public confidence in the soundness of these financial institutions and increase their ability to function during periods of financial stress. For this reason, the NCUA has proposed enhanced net worth (capitalization) requirements for credit unions, which is intended to increase the credit union system's resilience to insolvency risk and to minimize possible losses to the NCUSIF and ultimately to taxpayers. These prudential issues are discussed in this section. Increased Exposure to Mortgage Credit Risk and Recent NCUSIF Management Initiatives Credit unions were granted the authority to increase their participation in the mortgage market during the late 1970s and 1980s. In light of the savings and loan (S&L) crisis, discussed in the text box below, the credit union system was also granted more powers to mitigate interest rate risk stemming from exposure to mortgage market risk. The following list highlights some of these authorities: After the Mini Bill of 1977 was passed, the NCUA adopted regulations on August 7, 1978, permitting credit unions to sell mortgage loans in the secondary marketâspecifically to Fannie Mae, Freddie Mac, and Ginnie Mae (government-sponsored enterprises, or GSEs) as well as to federal, state, and local housing authorities. On August 16, 1978, federal credit unions were also granted the authority to sell their members' federally guaranteed student loans. The Garn-St. Germain Act, as mentioned, eliminated limits on the size and maturity of first lien mortgages, permitted refinancing of mortgage loans, and extended the maturity limit to 15 years for all second mortgages. The CEBA amended the FCU Act to authorize the NCUA to allow second-mortgage, home-improvement, and mobile home loans beyond 15 years. The Garn-St. Germain Act also amended the FCU Act to allow credit unions to issue and sell securities, which are guaranteed pursuant to Section 306(g) of the National Housing Act. In other words, federal credit unions were given the authority to participate in activities that would allow them to securitize assets. In 1988, the NCUA allowed credit unions to invest in mortgage-backed securities (MBS). Rather than hold, for example, 30-year mortgages, the ability to hold MBS of shorter (e.g., 10 year) maturities reduces asset duration risk (discussed in the text box below). In 1989, credit unions were allowed to use financial derivatives to purchase insurance against declines in GSE-issued MBS values that would occur after a rise in interest rates, thus protecting the overall value of their asset (loan) portfolios. (NCUA noted that the credit union system had experienced a 48% increase in real estate lending in 1987.) Consequently, as credit unions and other financial intermediaries increased their participation in the mortgage market, they also grew more susceptible to the financial risks linked to this market. Rising interest rates was a major risk factor in the S&L crisis during the 1980s, whereas rising mortgage defaults or credit risk was a major factor in the financial crisis that occurred in 2008. Because of the greater exposure to mortgage credit risk, the credit union system along with numerous financial entities in 2008 experienced distress after a sharp rise in the percentage of seriously delinquent mortgage loans in the United States. According to the NCUA chairman, corporate credit unions faced increasing liquidity pressures during 2008 after a significant portion of their MBSsâfollowing a deterioration of the underlying real estate collateralâlost value and were subsequently downgraded below investment grade. Corporate credit unions operate as wholesale credit unions, meaning that they provide financing, investment, and clearing services for the retail credit unions that interface directly with customers. The corporates accept deposits from, as well as provide liquidity and correspondent lending services to, retail credit unions. This reduces the costs that smaller institutions would bear individually to perform various financial transactions for members. Given that retail credit unions are cooperative owners of corporate credit unions, they are also federally insured by the NCUSIF. The NCUA placed two corporate credit unions into conservatorship in March 2009 and three additional corporates in September 2010. The five corporates under conservatorship at the time had represented approximately 70% of the entire corporate system's assets and 98.6% of the investment losses within the system. The share equity ratioâthe ratio of total funds in the NCUSIF relative to the estimated amount of share deposits held by credit unionsâis an indicator that represents the adequacy of reserves available to protect share depositors and maintain public confidence. The NCUA annually determines the normal operating level for the share equity ratio, which statutorily must fall between 1.2% and 1.5%. The 2006 equity ratio was 1.30% and fell below the statutory minimum to 1.18% by August 2010. The NCUA board may assess a premium when the ratio falls between 1.2% and the declared operating level; however, it is required to assess a premium if the equity ratio falls below 1.2%. Similarly, the NCUA board may declare a dividend if, at the end of the calendar year, the equity level exceeds the normal operating level; it is required to do so if the equity ratio exceeds 1.5%. Rather than deplete the NCUSIF, Congress in May 2009 established a Temporary Corporate Credit Union Stabilization Fund (TCCUSF) to accrue and recover losses from the corporates. The TCCUSF borrowed from Treasury to help cover conservatorship costs, and the NCUA also raised assessments on all federally insured credit unions, including those that did not avail themselves of corporate credit union services. The premium assessment reflected a plan to restore the NCUSIF equity ratio to 1.3%, which happened by December 2011. After achieving a positive net position of $1.9 billion as of May 2017, the NCUA, in July 2017, proposed closing the TCCUSF and providing credit unions with a Share Insurance Fund distribution in 2018, estimated to be between $600 million and $800 million. The TCCUSF officially closed on October 1, 2017; its assets and obligations were transferred to the NCUSIF. The NCUA reduced the share equity ratio from 1.39, which had previously been set in September 2017, to 1.38, administering an equity distribution (rebate) of $160.1 million to member institutions. The Risk-Based Capital Rule On January 23, 2014, the NCUA announced increases in capital requirements for a subset of natural person credit unions designated as complex . NCUA initially defined a complex credit union to have at least $50 million in assets. On January 27, 2015, the NCUA revised the initial proposed rule, amending the definition as having at least $100 million in assets. On October 29, 2015, the NCUA finalized the risk-based capital rule. Some of the rule's specific requirements included the following: A new asset risk-weighting system was introduced that would apply to complex credit unions, which would be more consistent with the methodology used for U.S. federally insured banking institutions. A new risk-based capital ratio (defined using the narrower risk-based capital measure in the numerator and total risk-weighted assets, which are computed using the new risk-weighting system, in the denominator) of 10% would be required for complex credit unions to be well-capitalized under the prompt corrective action supervisory framework. The risk-based capital ratio was designed to be more consistent with the capital adequacy requirements commonly applied to depository (banking) institutions worldwide. Compliance of complex credit unions with the risk-based capital ratio requirements as well as the existing statutory 7% net-worth asset ratio would have been effective by January 1, 2019, to avoid NCUA supervisory enforcement actions. Non-complex credit unions with assets below $100 million would not have been required to comply with the new risk-weighting system, and they would no longer be required to risk-weight their assets. Instead, non-complex credit unions must comply with the existing statutory 7% net-worth asset ratio. Credit unions with a concentration in commercial lending in excess of 50% of their total assets would be required to hold higher amounts of net worth to abate the higher levels of concentration risk. On December 17, 2019, the NCUA issued a final rule to move the effective date to January 1, 2022. The NCUA also amended the complex credit union's definition by increasing the asset threshold level from $100 million to $500 million. The NCUA also wanted more time to consider the feasibility of adopting a capital framework for the credit union system that would be similar to the community bank leverage ratio framework. Under this framework, banks with less than $10 billion in average total consolidated assets may elect to maintain a leverage ratio of greater than 9% to satisfy both the risk-based and leverage capital requirements to be well-capitalized. Nevertheless, the delays have prompted some Members of Congress to monitor the implementation progress of the risk-based capital rule for credit unions. Supplemental Capital Because credit unions do not issue common stock equity, they do not have access to capital sources beyond retained earnings. If alternative sources of capital, referred to as supplemental capital, were to be used in addition to net worth, then credit unions would be able to increase their lending while remaining in compliance with their safety and soundness net worth requirements. The proposal discussed below to adopt supplemental capital requirements would enhance the credit union system's lending capacity and introduce a new prudential risk management tool. An NCUA working group has developed three general sources of supplemental capital, all of which would be repaid after reimbursement of the NCUSIF following liquidation of an insolvent credit union. Credit unions could raise voluntary patronage capital (VPC) if (noninstitutional) members were to purchase "equity shares" in the organization. VPC equity shares would pay dividends; however, a VPC investor would not obtain any additional voting rights, and no investment would be allowed to exceed 5% of a credit union's net worth. mandatory membership capital (MMC) if a member pays what may be conceptually analogous to a membership fee. MMC capital would still be considered equity for the credit union but, unlike VPC, it would not accrue any dividends. subordinate debt (SD) from external and institutional investors. SD investors would have no voting rights or involvement in a credit union's managerial affairs. SD would function as a hybrid debt-equity instrument, meaning the investor would simply be a creditor with no equity share in the credit union while it is solvent and would not be repaid principal or interest should the credit union become insolvent. SD investors must make a minimum five-year investment with no option for early redemption. A credit union 's net worth is defined in statute; therefore, congressional legislative action would be required to permit other forms of supplemental capital to count toward their net worth prudential requirements. Conclusion Credit union industry advocates argue that lifting lending restrictions to make the system more comparable with the banking system would increase borrowers' available pools of credit. Community banks, which often compete with credit unions, argue that policies such as raising the business lending cap, for example, would allow credit unions to expand beyond their congressionally mandated mission and could pose a threat to financial stability. By amending the FCU Act several times to expand permissible lending activities, Congress arguably had recognized that the credit union system has evolved into a more sophisticated financial intermediation system. Congress has also emphasized prudential safety and soundness concerns. Following the 2008 financial crisis, the federal bank prudential regulators implemented prudential requirements to enhance the U.S. banking system's resiliency to systemic risk events. The NCUA initially proposed in 2014 to increase capital requirements particularly for large credit unions (those with $500 million or more in assets); however, the proposal has been revised, delayed, and is currently scheduled to become effective in January 2022. In the meantime, the NCUA has implemented and proposed rules to support expanding lending activities that would increase financial transactions volumes (economies of scale), thus possibly generating greater cash flows and profitability for the credit union system. The adoption of enhanced prudential net worth requirements for the credit union system, however, arguably may facilitate mitigating the financial risks that typically accompany increases in lending.	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crs_R45877	crs_R45877_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Overview The final status of the former princedom of Kashmir has remained unsettled since 1947. On August 5, 2019, the Indian government announced that it was formally ending the "special status" of its Muslim-majority Jammu and Kashmir (J&K) state, the two-thirds of Kashmir under New Delhi's control, specifically by abrogating certain provisions of the Indian Constitution that granted the state autonomy with regard to most internal administrative issues. The legal changes went into effect on November 1, 2019, when New Delhi also bifurcated the state into two "union territories," each with lesser indigenous administrative powers than Indian states. Indian officials explain the moves as matters of internal domestic politics, taken for the purpose of properly integrating J&K and facilitating its economic development. The process by which India's government has undertaken the effort has come under strident criticism for its alleged reliance on repressive force in J&K and for questionable legal and constitutional arguments that are likely to come before India's Supreme Court. Internationally, the move sparked controversy as a "unilateral" Indian effort to alter the status of a territory that is considered disputed by neighboring Pakistan and China, as well as by the United Nations. New Delhi's heavy-handed security crackdown in the remote state also raised ongoing human rights concerns. To date, but for a brief January visit by the U.S. Ambassador to India, U.S. government officials and foreign journalists have not been permitted to visit the Kashmir Valley. The long-standing U.S. position on Kashmir is that the territory's status should be settled through negotiations between India and Pakistan while taking into consideration the wishes of the Kashmiri people. Since 1972, India's government has generally shunned third-party involvement on Kashmir, while Pakistan's government has continued efforts to internationalize it, especially through U.N. Security Council (UNSC) actions. China, a close ally of Pakistan, is also a minor party to the dispute. There are international concerns about potential for increased civil unrest and violence in the Kashmir Valley, and the cascade effect this could have on regional stability.Â To date, the Trump Administration has limited its public statements to calls for maintaining peace and stability, and respecting human rights. The UNSC likewise calls for restraint by all parties; an "informal" August 16 UNSC meeting resulted in no ensuing official U.N. statement. Numerous Members of the U.S. Congress have expressed concern about reported human rights abuses in Kashmir and about the potential for further international conflict between India and Pakistan. New Delhi's August moves enraged Pakistan's leaders, who openly warned of further escalation between South Asia's two nuclear-armed powers, which nearly came to war after a February 2019 suicide bombing in the Kashmir Valley and retaliatory Indian airstrikes. The actions may also have implications for democracy and human rights in India; many analysts argue these have been undermined both in recent years and through Article 370's repeal. Moreover, Indian Prime Minister Narendra Modi and his Hindu nationalist Bharatiya Janata Party (BJP)âempowered by a strong electoral mandate in May and increasingly pursuing Hindu majoritarian policiesâmay be undermining the country's secular, pluralist traditions. The United States seeks to balance pursuit of broader U.S.-India partnership while upholding human rights protections and maintaining cooperative relations with Pakistan. Recent Developments Status and Impact of India's Crackdown As of early January 2020, five months after the crackdown in J&K began, most internet service and roughly half of mobile phone users in the densely-populated Kashmir Valley remain blocked; and hundreds of Kashmiris remain in detention, including key political figures. According to India's Home Ministry, as of December 3, more than 5,100 people had been taken into "preventive custody" in J&K after August 4, of whom 609 remained in "preventive detention," including 218 alleged "stone-pelters" who assaulted police in street protests. New Delhi justifies ongoing restrictions as necessary in a fraught security environment. The U.S. government has long acknowledged a general threat; as stated by the lead U.S. diplomat for the region, Principal Deputy Assistant Secretary of State for South and Central Asia Alice Wells, in October, "There are terrorist groups who operate in Kashmir and who try to take advantage of political and social disaffection." In early December, the Indian Home Ministry informed Parliament that incidents of "terrorist violence" in J&K during the 115 days following August 5 were down 17% from the 115 days preceding that date, from 106 to 88. However, the Ministry stated that attempts by militants to infiltrate into the Valley across the Line of Control from Pakistan have increased, from 53 attempts in the 88 days preceding August 5 to 84 in the 88 days following (in contrast, in October 2019, Wells stated before a House panel that, "I think we've observed a decline in infiltrations across the Line of Control"). Senior Indian officials say their key goal is to avoid violence and bloodshed, arguing that "lots of the reports about shortages are fictitious" and that, "Some of our detractors are spreading false rumors, including through the U.S. media and it is malicious in nature." Indian authorities continue to insist that, with regard to street protests, "There has been no incident of major violence. Not even a single live bullet has been fired. There has been no loss of life in police action" (however, at least one teenaged protester's death reportedly was caused by shotgun pellets and a tear gas canister ). They add, however, that "terrorists and their proxies are trying to create an atmosphere of fear and intimidation in Kashmir." Because of this, "Some remaining restrictions on the communications and preventive detentions remain with a view to maintain public law and order." A September New York Times report described a "punishing blockade" ongoing in the Kashmir Valley, with sporadic protests breaking out, and dozens of demonstrators suffering serious injuries from shotgun pellets and tear gas canisters, leaving Kashmiris "feeling unsettled, demoralized, and furious." An October Press Trust of India report found some signs of normalcy returning, but said government efforts to reopen schools had failed, with parents and students choosing to stay away, main markets remaining shuttered, and mobile phone service remaining suspended in most of the Valley, where there continued to be extremely limited internet service. Since mid-October, the New Delhi and J&K governments have claimed that availability of "essential supplies," including medicines and cooking gas, is being ensured; that all hospitals, medical facilities, schools, banks, and ATMs are functioning normally; that there are no restrictions on movement by auto, rail, or air; and that there are no restrictions on the Indian media or journalists (foreign officials and foreign journalists continue to be denied access). On October 9, curtailment of tourism in the region was withdrawn. On October 14, the government lifted restrictions on post-paid mobile telephone service, while pre-paid service, aka via "burner phones," along with internet and messaging services, remains widely blocked. Public schools have reopened, but parents generally have not wanted their children out in a still-unstable setting. According to Indian authorities, "terrorists are also preventing the normal functioning of schools." On November 1, citizens of the former J&K state awoke to a new status as residents of either the Jammu and Kashmir Union Territory (UT) or the Union Territory of Ladakh (the latter populated by less than 300,000 residents; see Figure 1 ). While the J&K UT will be able to elect its own legislature, all administrative districts are now controlled by India's federal government, and J&K no longer has its own constitution or flag. The chief executives of each new UT are lieutenant governors who report directly to India's Home Ministry. More than 100 federal laws are now applicable to J&K, including the Indian Penal Code, and more than 150 laws made by the former state legislature are being repealed, including long-standing prohibitions on leasing land to non-residents. The new J&K assembly will be unable to make any laws on policing or public order, thus ceding all security issues to New Delhi's purview. The U.S.-India "2+2" Summit and Other Recent Developments On December 18, India's external affairs and defense ministers were in Washington, DC, for the second "2+2" summit meeting with their American counterparts, where "The two sides reaffirmed the growing strategic partnership between the United States and India, which is grounded in democratic values, shared strategic objectives, strong people-to-people ties, and a common commitment to the prosperity of their citizens." In the midst of the session, an unnamed senior State Department official met the press and was asked about the situation in J&K. She responded that the key U.S. government concern is "a return to economic and political normalcy there," saying, "[W]hat has concerned us about the actions in Kashmir are the prolonged detentions of political leaders as well as other residents of the valley, in addition to the restrictions that continue to exist on cell phone coverage and internet." While visiting Capitol Hill at the time of the summit, Indian External Affairs Minister Subrahmanyam Jaishankar "abruptly" withdrew from a scheduled meeting with senior House Members, reportedly because the House delegation was to include Representative Pramila Jayapal, the original sponsor of H.Res. 745 , which urges the Indian government to "end the restrictions on communications and mass detentions in Jammu and Kashmir as swiftly as possible and preserve religious freedom for all residents" (see "The U.S. Congress, Hearings, and Relevant Legislation" section below). Some observers saw in Jaishankar's action a shortsighted expression of India's considerable sensitivity about the Kashmir issue and a missed opportunity to engage concerned U.S. officials. Two months earlier, in October, two notable developments took place in India. Local Block Development Council elections were held in J&K that month. With all major regional parties and the national opposition Congress Party boycotting the polls, Independents overwhelmed the BJP, winning 71% of the total 317 blocks to the BJP's 26%, including 85% in the Kashmir division. The results suggested widespread disenchantment with New Delhi's ruling party in J&K. Also in October, India allowed a delegation of European parliamentarians to visit the Kashmir Valley, the first such travel by foreign officials since July. The composition of the delegation and questions surrounding its funding and official or private status added to international critiques of India's recent Kashmir policies. On January 9, New Delhi allowed a U.S. official to visit J&K for the first time since August, when 15 ambassadors, including U.S. Ambassador Ken Juster, were given a two-day "guided tour" of the Srinagar area. EU envoys declined to participate, apparently because the visit did not include meetings with detained Kashmiri political leaders. An External Affairs Ministry spokesman said the objective of the visit was for the envoys to view government efforts to "normalize the situation" firsthand, but the orchestrated visit attracted criticism from opposition parties and it is unclear if international opprobrium will be reduced as a result. On January 10, India's Supreme Court issued a ruling that an open-ended internet shutdown (as exists in parts of J&K) was a violation of free speech and expression granted by the country's constitution, calling indefinite restrictions "impermissible." The court gave J&K authorities a one-week deadline to provide a detailed review all orders related to internet restrictions. Background Setting India's former J&K state was about the size of Utah and encompassed three culturally distinct regions: Kashmir, Jammu, and Ladakh (see Figure 1 ). More than half of the mostly mountainous area's nearly 13 million residents live in the fertile Kashmir Valley, a region slightly larger than Connecticut (7% of the former state's land area was home to 55% of its population). Srinagar, in the Valley, was the state's (and current UT's) summer capital and by far its largest city with some 1.3 million residents. Jammu city, the winter capital, has roughly half that population, and the Jammu district is home to more than 40% of the former state's residents. About a quarter-million people live in remote Ladakh, abutting China. Just under 1% of India's total population lives in the former state of J&K. Roughly 80% of Indians are Hindu and about 14% are Muslim. At the time of India's 2011 national census, J&K's population was about 68% Muslim, 28% Hindu, 2% Sikh, and 1% Buddhist. At least 97% of the Kashmir Valley's residents are Muslim; the vast majority of the district's Hindus fled the region after 1989 (see " Human Rights and India's International Reputation " below). The Jammu district is about two-thirds Hindu, with the remainder mostly Muslim. Ladakh's population is about evenly split between Buddhists and Muslims. Upon the 1947 partition of British India based on religion, the princely state of J&K's population had unique status: a Muslim majority ruled by a Hindu king. Many historians find pluralist values in pre-1947 Kashmir, with a general tolerance of multiple religions. The state's economy had been agriculture-based; horticulture and floriculture account for the bulk of income. Historically, the region's natural beauty made tourism a major aspect of commerceâthis sector was devastated by decades of conflict, but had seemed to be making a comeback in recent years. Kashmir's remoteness has been a major impediment to transportation and communication networks, and thus to overall development. In mid-2019, India's Ambassador to the United States claimed that India's central government has provided about $40 billion to the former J&K state since 2004. J&K's Status, Article 370, and India-Pakistan Conflict Accession to India Since Britain's 1947 withdrawal and the partition and independence of India and Pakistan, the final status of the princely state of J&K has remained unsettled, especially because Pakistan rejected the process through which J&K's then-ruler had acceded to India. A dyadic war over Kashmiri sovereignty ended in 1949 with a U.N.-brokered cease-fire that left the two countries separated by a 460-mile-long military "Line of Control" (LOC). The Indian-administered side became the state of Jammu and Kashmir. The Pakistani-administered side became Azad ["Free"] Jammu and Kashmir (AJK) and the "Northern Areas," later called Gilgit-Baltistan. Article 370 and Article 35A of the Indian Constitution, and J&K Integration In 1949, J&K's interim government and India's Constituent Assembly negotiated "special status" for the new state, leading to Article 370 of the Indian Constitution in 1950, the same year the document went into effect. The Article formalized the terms of Jammu and Kashmir's accession to the Indian Union, generally requiring the concurrence of the state government before the central government could make administrative changes beyond the areas of defense, foreign affairs, and communications. A 1954 Presidential Order empowered the state government to regulate the rights of permanent residents, and these became defined in Article 35A of the Constitution's Appendix, which prohibited nonresidents from working, attending college, or owning property in the state, among other provisions. Within a decade of India's independence, however, most national constitutional provisions were extended to the J&K state via Presidential Order with the concurrence of the J&K assembly (and with the Indian Supreme Court's assent). The state assembly arguably had over decades become pliant to New Delhi's influence, and critical observers contend that J&K's special status has long been hollowed out: while Article 370 provided special status constitutionally , the state suffered from inferior status politically through what amounted to "constitutional abuse." Repeal of Article 370 became among the leading policy goals of the BJP and its Hindu nationalist antecedents on the principle of national unity. Further India-Pakistan Wars The J&K state's legal integration into India progressed and prospects for a U.N.-recommended plebiscite on its final status correspondingly faded in the 1950s and 1960s. Three more India-Pakistan warsâin 1965, 1971, and 1999; two of which were fought over Kashmir itselfâleft territorial control largely unchanged, although a brief 1962 India-China war ended with the high-altitude and sparsely populated desert region of Ladakh's Aksai Chin under Chinese control, making China a third, if lesser, party to the Kashmir dispute. In 1965, Pakistan infiltrated troops into Indian-held Kashmir in an apparent effort to incite a local separatist uprising; India responded with a full-scale military operation against Pakistan. A furious, 17-day war caused more than 6,000 battle deaths and ended with Pakistan failing to alter the regional status quo. The 1971 war saw Pakistan lose more than half of its population and much territory when East Pakistan became independent Bangladesh, the mere existence of which undermined Pakistan's professed status as a homeland for the Muslims of Asia's Subcontinent. In summer 1999, one year after India and Pakistan tested nuclear weapons, Pakistani troops again infiltrated J&K state, this time to seize strategic high ground near Kargil. Indian ground and air forces ejected the Pakistanis after three months of combat and 1,000 or more battle deaths. Third-Party Involvement In 1947, Pakistan had immediately and formally disputed the accession process by which J&K had joined India at the United Nations. New Delhi also initially welcomed U.N. mediation. Over ensuing decades, the U.N. Security Council issued a total of 18 Resolutions (UNSCRs) relevant to the Kashmir dispute. The third and central one, UNSCR 47 of April 1948, recommended a three-step process for restoring peace and order, and "to create proper conditions for a free and impartial plebiscite" in the state, but the conditions were never met and no referendum was held. Sporadic attempts by the United States to intercede in Kashmir have been unsuccessful. A short-lived mediation effort by the United States and Britain included six rounds of talks in 1961 and 1962, but ended when India indicated that it would not relinquish control of the Kashmir Valley. Although President Bill Clinton's personal diplomatic engagement was credited with averting a wider war and potential nuclear exchange in 1999, Kashmir's disputed status went unchanged. After 2001, some analysts argued that resolution of the Kashmir issue would improve the prospects for U.S. success in Afghanistanâa perspective championed by the Pakistani governmentâyet U.S. Presidents ultimately were dissuaded from making this argument an overt aspect of U.S. policy. In more recent decades, India generally has demurred from mediation in Kashmir out of (1) a combination of suspicion about the motives of foreign powers and the international organizations they influence; (2) India's self-image as a regional leader in no need of assistance; and (3) an underlying assumption that mediation tends to empower the weaker and revisionist party (in this case, Pakistan). According to New Delhi, prospects for third-party mediation were fully precluded by the 1972 Shimla Agreement, in which India and Pakistan "resolved to settle their differences by peaceful means through bilateral negotiations or by any other peaceful means mutually agreed upon between them." The 1999 Lahore Declaration reaffirmed the bilateral nature of the issue. Separatist Conflict and President's Rule From 2018 Three Decades of Separatist Conflict A widespread perception that J&K's 1987 state elections were illicitly manipulated to favor the central government led to pervasive disaffection among residents of the Kashmir Valley and the outbreak of an Islamist-based separatist insurgency in 1989. The decades-long conflict has pitted the Indian government against Kashmiri militants who seek independence or Kashmir's merger with neighboring Pakistan, a country widely believed to have provided arms, training, and safe haven to militants over the decades. Violence peaked in the 1990s and early 2000s, mainly affecting the Valley and the LOC (see Figure 2 ). Lethal exchanges of small arms and mortar fire at the LOC remain common, killing soldiers and civilians alike, despite a formal cease-fire agreement in place since 2003. The Indian government says the conflict has killed at least 42,000 civilians, militants, and security personnel since 1989; independent analyses count 70,000 or more related deaths. India maintains a security presence of at least 500,000 army and paramilitary soldiers in the former J&K state. A bilateral India-Pakistan peace plan for Kashmir was nearly finalized in 2007, when Indian and Pakistani negotiators had agreed to make the LOC a "soft border" with free movement and trade across it; prospects faded due largely to unrelated Pakistani domestic issues. India has blamed conventionally weaker Pakistan for perpetuating the conflict as part of an effort to "bleed India with a thousand cuts." Pakistan denies materially supporting Kashmiri militants and has sought to highlight Indian human rights abuses in the Kashmir Valley. Separatist militants have commonly targeted civilians, leading India and most Indians (as well as independent analysts) to label them as terrorists and thus decry Pakistan as a "terrorist-supporting state." The U.S. government issues ongoing criticisms of Islamabad for taking insufficient action to neutralize anti-India terrorists groups operating on and from Pakistani soil. Still, many analysts argue that blanket characterizations of the Kashmir conflict as an externally-fomented terrorist effort obscure the legitimate grievances of the indigenous Muslim-majority populace, while (often implicitly) endorsing a "harsh counterinsurgency strategy" that, they contend, has only further alienated successive generations in the Valley. For these observers, Kashmir's turmoil is, at its roots, a clash between the Indian government and the Kashmiri people, leading some to decry New Delhi's claims that Pakistan perpetuates the conflict. Today, pro-independence political parties on both sides of the LOC are given little room to operate, and many Kashmiris have become deeply alienated. Critics of the Modi government's Hindu nationalist agenda argue that its policies entail bringing the patriotism of Indian Muslims into question and portraying Pakistan as a relentless threat that manipulates willing Kashmiri separatists, and so is responsible for violence in Kashmir. Arguments locating the conflict's cause in the interplay between Kashmir and New Delhi are firmly rejected by Indian officials and many Indian analysts who contend that there is no "freedom struggle" in Kashmir, rather a war "foisted" on India by a neighbor (Pakistan) that will maintain perpetual animosity toward India. In this view, talking to Pakistan cannot resolve the situation, nor can negotiations with Kashmiri separatist groups and parties, which are seen to represent Pakistan's interests rather than those of the Kashmiri people. Even before 2019 indications were mounting that Kashmiri militancy was on the rise for the first time in nearly two decades. Figure 3 shows that, in the first five years after Modi took office, the number of "terrorist incidents" and conflict-related deaths was on the rise. Mass street protests in the valley were sparked by the 2016 killing of a young militant commander in a shootout with security forces. Existing data on rates of separatist violence indicate that levels in 2019 decreased over the previous year, perhaps in large part due to the post-July security crackdown. 2018 J&K Assembly Dissolution and President's Rule J&K's lack of a state assembly in early 2019 appears to have facilitated New Delhi's constitutional changes. In June 2018, the J&K state government formed in 2015âa coalition of the BJP and the Kashmir-based Peoples Democratic Partyâcollapsed after the BJP withdrew its support, triggering direct federal control through the center-appointed governor. BJP officials called the coalition untenable due to differences over the use of force to address a deteriorating security situation (the BJP sought greater use of force). In December 2018, J&K came under "President's Rule" for the first time since 1996, with the state legislature's power under Parliament's authority. Developments in 2019 The February Pulwama Crisis On February 14, 2019, an explosives-laden SUV rammed into a convoy carrying paramilitary police in the Kashmir Valley city of Pulwama. At least 40 personnel were killed in the explosion. The suicide attacker was said to be a member of Jaish-e-Mohammad (JeM), a Pakistan-based, U.S.-designated terrorist group that claimed responsibility for the bombing. On February 26, Indian jets reportedly bombed a JeM facility in Balakot, Pakistan, the first such Indian attack on Pakistan proper since 1971 (see Figure 4 ). Pakistan launched its own air strike in response, and aerial combat led to the downing of an Indian jet. When Pakistan repatriated the captured Indian pilot on March 1, 2019, the crisis subsided, but tensions have remained high. The episode fueled new fears of war between South Asia's two nuclear-armed powers and put a damper on prospects for renewed dialogue between New Delhi and Islamabad, or between New Delhi and J&K. A White House statement on the day of the Pulwama bombing called on Pakistan to "end immediately the support and safe haven provided to all terrorist groups operating on its soil" and indicated that the incident "only strengthens our resolve" to bolster U.S.-India counterterrorism cooperation. Numerous Members of Congress expressed condemnation and condolences on social media. However, during the crisis, the Trump Administration was seen by some as unhelpfully absent diplomatically, described by one former senior U.S. official as "mostly a bystander" to the most serious South Asia crisis in decades, demonstrating "a lack of focus" and diminished capacity due to vacancies in key State Department positions. President Trump's July "Mediation" Offer In July 2019, while taking questions from the press alongside visiting Pakistani Prime Minister Imran Khan, President Trump claimed that Indian Prime Minister Modi had earlier in the month asked the United States to play a mediator role in the Kashmir dispute. As noted above, such a request would represent a dramatic policy reversal for India. The U.S. President's statement provoked an uproar in India's Parliament, with opposition members staging a walkout and demanding explanation. Quickly following Trump's claim, Indian External Affairs Minister Jaishankar assured parliamentarians that no such request had been made, and he reiterated India's position that "all outstanding issues with Pakistan are discussed only bilaterally" and that future engagement with Islamabad "would require an end to cross border terrorism." In an apparent effort to reduce confusion, a same-day social media post from the State Department clarified the U.S. position that "Kashmir is a bilateral issue for both parties to discuss" and the Trump Administration "stands ready to assist." A release from the Chairman of the House Foreign Affairs Committee, Representative Engel, reiterated support for "the long-standing U.S. position" on Kashmir, affirmed that the pace and scope of India-Pakistan dialogue is a bilateral determination, and called on Pakistan to facilitate such dialogue by taking "concrete and irreversible steps to dismantle the terrorist infrastructure on Pakistan's soil." An August 2 meeting of Secretary of State Mike Pompeo and Jaishankar in Thailand saw the Indian official directly convey to his American counterpart that any discussion on Kashmir, "if at all warranted," would be strictly between India and Pakistan. President Trump's seemingly warm reception of Pakistan's leader, his desire that Pakistan help the United States "extricate itself" from Afghanistan, and recent U.S. support for an International Monetary Fund bailout of Pakistan elicited disquiet among many Indian analysts. They said Washington was again conceptually linking India and Pakistan, "wooing" the latter in ways that harm the former's interests. Trump's Kashmir mediation claims were especially jarring for many Indian observers, some of whom began questioning the wisdom of Modi's confidence in the United States as a partner. The episode may have contributed to India's August moves. August Abrogation of Article 370 and J&K Reorganization In late July and during the first days of August, India moved an additional 45,000 troops into the Kashmir region in apparent preparation for announcing Article 370's repeal. On August 2, the J&K government of New Delhi-appointed governor Satya Pal Malik issued an unprecedented order cancelling a major annual religious pilgrimage in the state and requiring tourists to leave the region, purportedly due to intelligence inputs of terror threats. The developments reportedly elicited panic among those Kashmiris fearful that their state's constitutional protections would be removed. Two days later, the state's senior political leadersâincluding former chief ministers Omar Abdullah (2009-2015) and Mehbooba Mufti (2016-2018)âwere placed under house arrest, schools were closed, and all telecommunications, including internet and landline telephone service, were curtailed. Internet shutdowns are common in Kashmirâone press report said there had been 52 earlier in 2019 aloneâbut this appears to have been the first-ever shutdown of landline phones there. Pakistan's government denounced these actions as "destabilizing." On August 5, with J&K state in "lockdown," Indian Home Minister Amit Shah introduced in Parliament legislation to abrogate Article 370 and reorganize the J&K state by bifurcating it into two Union Territories, Jammu & Kashmir and Ladakh, with only the former having a legislative assembly. In a floor speech, Shah called Article 370 "discriminatory on the basis of gender, class, caste, and place or origin," and contended that its repeal would spark investment and job creation in J&K. On August 6, after the key legislation had passed both of Parliament's chambers by large majorities and with limited debate, Prime Minister Modi lauded the legislation, declaring, "J&K is now free from their shackles," and predicting that the changes "will ensure integration and empowerment." All of his party's National Democratic Alliance coalition partners supported the legislation, as did many opposition parties (the main opposition Congress Party was opposed). The move also appears to have been popular among the Indian public, possibly in part due to a post-Pulwama, post-election wave of nationalism that has been amplified by the country's mainstream media. Proponents view the move as a long-overdue, "master stroke" righting of a historic wrong that left J&K underdeveloped and contributed to conflict there. Notwithstanding Indian authorities' claims that J&K's special status hobbled its economic and social development, numerous indicators show that the former state was far from the poorest rankings in this regard. For example, in FY2014-FY2015, J&K's per capita income was about Rs63,000 (roughly $882 in current U.S. dollars), higher than seven other states, and more than double that of Bihar and 50% above Uttar Pradesh. While the state's economy typically grew at the slowest annual rates among all Indian states in the current decade, its FY2017-FY2018 expansion of 6.8% was greater than that of eight states and only moderately lagged the national expansion of 7.2% that year. According to 2011 census data, J&K's literacy rate of nearly 69% ranked it higher than five Indian states, including Andhra Pradesh and Rajasthan. At 73.5 years, J&K ranked 3 rd of 22 states in life expectancy, nearly five years longer than the national average of 68.7. The state also ranked 8 th in poverty rate and 10 th in infant mortality. The year 2019 saw negative economic news for India and increasing criticism of the government on these grounds, leading some analysts to suspect that Modi and his lieutenants were eager to play to the BJP's Hindu nationalist base and shift the national conversation. In addition, some analysts allege that President Trump's relevant July comments may have convinced Indian officials that a window of opportunity in Kashmir might soon close, and that they could deprive Pakistan of the "negotiating ploy" of seeking U.S. pressure on India as a price for Pakistan's cooperation with Afghanistan. Responses and Concerns International Reaction The Trump Administration Indian press reports claimed that External Affairs Minister Jaishankar had "sensitized" Secretary of State Pompeo to the coming Kashmir moves at an in-person meeting on August 2 so that Washington would not be taken by surprise. However, a social media post from the State Department's relevant bureau asserted that New Delhi "did not consult or inform the U.S. government" before moving to revoke J&K's special status. On August 5, a State Department spokeswoman said about developments in Kashmir, "We are concerned about reports of detentions and urge respect for individual rights and discussion with those in affected communities. We call on all parties to maintain peace and stability along the Line of Control." Three days later, she addressed the issue more substantively, saying, We want to maintain peace and stability, and we, of course, support direct dialogue between India and Pakistan on Kashmir and other issues of concern.... [W]henever it comes to any region in the world where there are tensions, we ask for people to observe the rule of law, respect for human rights, respect for international norms. We ask people to maintain peace and security and direct dialogue. The spokeswoman also flatly denied any change in U.S. policy. The Chairman of the House Foreign Affairs Committee and Ranking Member of the Senate Foreign Relations Committee also responded in a joint August 7 statement expressing hope that New Delhi would abide by democratic and human rights principles and calling on Islamabad to refrain from retaliating while taking action against terrorism. The government's heavy-handed security measures in J&K elicited newly intense criticisms of India on human rights grounds. In late September, Ambassador Wells said, The United States is concerned by widespread detentions, including those of politicians and business leaders, and the restrictions on the residents of Jammu and Kashmir.Â We look forward to the Indian Government's resumption of political engagement with local leaders and the scheduling of the promised elections at the earliest opportunity. During an October 22 House Foreign Affairs subcommittee hearing on human rights in South Asia, Ambassador Wells testified that, "the Department [of State] has closely monitored the situation" in Kashmir and, "We deeply appreciate the concerns expressed by many Members about the situation" there. She reviewed ongoing concerns about a lack of normalcy in the Valley, especially, citing continued detentions and "security restrictions," including those on communication, and calling on Indian authorities to restore everyday services "as swiftly as possible." Wells also welcomed Pakistani Prime Minister Imran Khan's recent statements abjuring external support for Kashmiri militancy: We believe the foundation for any successful dialogue between India and Pakistan is based on Pakistan taking sustained and irreversible steps against militants and terrorists on its territory.â¦ We believe that direct dialogue between India and Pakistan, as outlined in the 1972 Shimla Agreement, holds the most potential for reducing tensions. Some Indian observers saw the hearing as a public relations loss for India, with one opining that "India got a drubbing and Pakistan got away scot-free." However, for some analysts, the Trump Administration's broad embrace of Modi and its relatively mild criticisms on Kashmir embolden illiberal forces in India. The U.S. Congress, Hearings, and Relevant Legislation In August and September, numerous of Members of Congress went on record in support of Kashmiri human rights. During October travel to India, Senator Chris Van Hollen was denied permission to visit J&K. Days later, Senator Mark Warner, a cochair of the Senate India Caucus, tweeted, "While I understand India has legitimate security concerns, I am disturbed by its restrictions on communications and movement in Jammu and Kashmir." In October, the House Foreign Affairs Subcommittee on Asia, the Pacific, and Nonproliferation held a hearing on human rights in South Asia, where discussion was dominated by the Kashmir issue. In attendance was full committee Chairman Representative Engel, who opined that, "The Trump administration is giving a free pass when countries violate human rights or democratic norms. We saw this sentiment reflected in the State Department's public statements in response to India's revocation of Article 370 of its constitution." Then-Subcommittee Chairman Representative Brad Sherman said, "I regard [Kashmir] as the most dangerous geopolitical flash-point in the world. It is, after all, the only geopolitical flash-point that has involved wars between two nuclear powers." Also during the hearing, one Administration witness, Assistant Secretary of State for Democracy, Human Rights, and Labor Robert Destro, affirmed that the situation in Kashmir was "a humanitarian crisis." Congress's Tom Lantos Human Rights Commission held a mid-November hearing entitled "Jammu and Kashmir in Context," during which numerous House Members reiterated concerns about reports of ongoing human rights violations in the Kashmir Valley. Among the seven witnesses was U.S. Commission on International Religious Freedom (USCIRF) Commissioner Anurima Bhargava, who discussed restrictions of religious freedom in India, and noted that USCIRF researchers have been barred from visiting India since 2004. In S.Rept. 116-126 of September 26, 2019, accompanying the then-pending State and Foreign Operations Appropriations bill for FY2020 ( S. 2583 ), the Senate Appropriations Committee noted with concern the current humanitarian crisis in Kashmir and called on the government of India to (1) fully restore telecommunications and Internet services; (2) lift its lockdown and curfew; and (3) release individuals detained pursuant to the Indian government's revocation of Article 370 of the Indian constitution. H.Res. 724 , introduced on November 21, 2019, would condemn "the human rights violations taking place in Jammu and Kashmir" and support "Kashmiri self-determination." H.Res. 745 , introduced on December 6, 2019, and currently with 40 cosponsors, would recognize the security challenges faced by Indian authorities in Jammu and Kashmir, including from cross-border terrorism; reject arbitrary detention, use of excessive force against civilians, and suppression of peaceful expression of dissent as proportional responses to security challenges; urge the Indian government to ensure that any actions taken in pursuit of legitimate security priorities respect the human rights of all people and adhere to international human rights law; and urge that government to lift remaining restrictions on telecommunications and internet, release all persons "arbitrarily detained," and allow international human rights observers and journalists to access Jammu and Kashmir, among other provisions. Pakistan Islamabad issued a "strong demarche" in response to New Delhi's moves, deeming them "illegal actions ... in breach of international law and several UN Security Council resolutions." Pakistan downgraded diplomatic ties, halted trade with India, and suspended cross-border transport services. Pakistan's prime minister warned that, "With an approach of this nature, incidents like Pulwama are bound to happen again" and he later penned an op-ed in which he warned, "If the world does nothing to stop the Indian assault on Kashmir and its people, there will be consequences for the whole world as two nuclear-armed states get ever closer to a direct military confrontation." Pakistan appeared diplomatically isolated in August, with Turkey being the only country to offer solid and explicit support for Islamabad's position. Pakistan called for a UNSC session and, with China's support, the Council met on August 16 to discuss Kashmir for the first time in more than five decades, albeit in a closed-door session that produced no formal statement. Pakistani officials also suggested that Afghanistan's peace process could be negatively affected. Many analysts view Islamabad as having little credibility on Kashmir, given its long history of covertly supporting militant groups there. Pakistan's leadership has limited options to respond to India's actions, and renewed Pakistani support for Kashmiri militancy likely would be costly internationally. Pakistan's ability to alter the status quo through military action has been reduced in recent years, meaning that Islamabad likely must rely primarily on diplomacy. Given also that Pakistan and its primary ally, China, enjoy limited international credibility on human rights issues, Islamabad may stand by and hope that self-inflicted damage caused by New Delhi's own policies in Kashmir and, more recently, on citizenship laws, will harm India's reputation and perhaps undercut its recent diplomatic gains with Arab states such as Saudi Arabia and the UAE. In late 2019, Pakistan accused India of taking escalatory steps in the LOC region, including by deploying medium-range Brahmos cruise missiles there. China Pakistan and China have enjoyed an "all-weather" friendship for decades. On August 6, China's foreign ministry expressed "serious concern" about India's actions in Kashmir, focusing especially on the "unacceptable" changed status for Ladakh, parts of which Beijing claims as Chinese territory (Aksai Chin). A Foreign Ministry spokesman called on India to "stop unilaterally changing the status quo" and urged India and Pakistan to exercise restraint. China's foreign minister reportedly vowed to "uphold justice for Pakistan on the international arena," and Beijing has supported Pakistan's efforts to bring the Kashmir issue before the U.N. Security Council. One editorial published in China's state-run media warned that India "will incur risks" for its "reckless and arrogant" actions. The United Nations On August 8, the U.N. Secretary-General called for "maximum restraint" and expressed concern that restrictions in place on the Indian side of Kashmir "could exacerbate the human rights situation in the region." He reaffirmed that, "The position of the United Nations on this region is governed by the Charter ... and applicable Security Council resolutions." Beijing's support of Pakistan's request for U.N. involvement led to "informal and closed-door consultations" among UNSC members on August 16, a session that included the Russian government. No ensuing statement was issued, but Pakistan's U.N. Ambassador declared that the fact of the meeting itself demonstrated Kashmir's disputed status, while India's Ambassador held to New Delhi's view that Article 370's abrogation was a strictly internal matter. No UNSC member other than China spoke publicly about the August meeting, leading some to conclude the issue was not gaining traction. In mid-December, Beijing reportedly echoed Islamabad's request that the U.N. Security Council hold another closed-door meeting on Kashmir, but no such meeting has taken place. In a September speech to the U.N. Human Rights Council, High Commissioner for Human Rights Michelle Bachelet expressed being "deeply concerned" about the human rights situation in Kashmir. In October, a spokesman for the Council said, "We are extremely concerned that the population of Indian-administered Kashmir continues to be deprived of a wide range of human rights and we urge the Indian authorities to unlock the situation and fully restore the rights that are currently being denied." Other Responses Numerous Members of the European Parliament have expressed human rights concerns and called on New Delhi to "restore the basic freedoms" of Kashmiris. During her early November visit to New Delhi, German Chancellor Angela Merkel opined, "The situation for the people there is currently not sustainable and must improve." Later that month, Sweden's foreign minister said, "We emphasize the importance of human rights" in Kashmir. The Saudi government agreed in late December to host an Organization of Islamic Cooperation "special foreign ministers meeting" on Kashmir sometime in early 2020. Human Rights and India's International Reputation Democracy and Other Human Rights Concerns100 New Delhi's August 5 actions appear to have been broadly popular with the Indian public and, as noted above, were supported by most major Indian political parties. Yet the government's process came under criticism from many quarters for a lack of prior consultation and/or debate, and many legal scholars opined that the government had overstepped its constitutional authority, predicting that the Indian Supreme Court would become involved. New Delhi's perceived circumvention of the J&K state administration (by taking action with only the assent of the centrally appointed governor) is at the heart of questions about the constitutionality of the government's moves, which, in the words of one former government interlocutor to the state, represent "the total undermining of our democracy" that was "done by stealth." The Modi government's argument appears to be that, since the J&K assembly was dissolved and the state had been under central rule since 2018, the national parliament could exercise the prerogative of the assembly, a position rejected as specious by observers who see the government's actions as a "constitutional coup." Many Indian (and international) critics of the government's moves see them not only as undemocratic in process, but also as direct attacks on India's secular identity. From this perspective, the BJP's motive is about advancing the party's "deeply rooted ideals of Hindu majoritarianism" and Modi's assumed project "to reinvent India as an India that is Hindu." One month before the government's August 5 bill submission, a senior BJP official said his party is committed to bringing back the estimated 200,000-300,000 Hindus who fled the Kashmir Valley after 1989 (known as Pandits ). This reportedly could include reviving a plan for construction of "segregated enclaves" with their own schools, shopping malls, and hospitals, an approach with little or no support from local figures or groups representing the Pandits. Beyond the Pandit-return issue, New Delhi's revocation of the state's restrictions on residency and rhetorical emphasis on bringing investment and economic development to the Kashmir Valley lead some analysts to see "colonialist" parallels with Israel's activities in the West Bank. Perceived human rights abuses on both sides of the Kashmir LOC, some of them serious, have long been of concern to international governments and organizations. A major and unprecedented 2018 R eport on the Situation on Human Rights in Kashmir from the U.N. Human Rights Commission harshly criticized the New Delhi government for alleged excessive use of force and other human rights abuses in the J&K state. With New Delhi's sweeping security crackdown in Kashmir continuing to date, the Modi government faces renewed criticisms for widely alleged abuses. Indian officials have also come under fire for the use of torture in Kashmir and for acting under broad and vaguely worded laws that facilitate abuses. The Indian government reportedly is in contravention of several of its U.N. commitments, including a 2011 agreement to allow all special rapporteurs to visit India. In spring 2019, after a U.N. Human Right Council's letter to New Delhi asking about steps taken to address abuses alleged in the 2018 report, Indian officials announced they would no longer engage U.N. "mandate holders." India appears to be the world leader in internet shutdowns by far, having blocked the network 134 times in 2018, compared to 12 shutdowns by Pakistan, the number two country in this category. Internet blockages are common in Kashmir, but rarely last more than a few days; at more than five months to date, the outage in the Valley is the longest ever. A group of U.N. Special Rapporteurs called the blackout "a form of collective punishment" that is "inconsistent with the fundamental norms of necessity and proportionality." Human Rights Watch and Amnesty International both contend that the communications blackout violates international law. As noted above, in early January 2020, India's Supreme Court seemed to agree, ruling that an indefinite suspension is "impermissible." Kashmiris have begun automatically losing their accounts on the popular WhatsApp platform due to 120 days of inactivity and, by mid-December, the internet shutdown had become the longest ever imposed in a democracy, according to Access Now, an advocacy group. Businesses have been especially hard hit: the Kashmir Chamber of Commerce estimated more than Rs178 billion (about $2.5 billion) in losses over four months. Potential Damage to India's International Image Late 2019 saw a spate of commentary in both the Indian and American press about the likelihood that New Delhi's moves on Kashmir, when combined with the national government's broader pursuit of sometimes controversial Hindu nationalist policies, would contribute to a tarnishing of India's reputation as a secular, pluralist democratic society. In December, Parliament passed a Citizenship Amendment Act (CAA) that adds a religious criterion to the country's naturalization process and triggered widespread and sometimes violent public protests. The Modi/BJP expenditure of political capital on social issues is seen by many analysts as likely to both intensify domestic instability and decrease the space in which to reform the economy, a combination that could be harmful to India's international reputation. Former Indian National Security Adviser and Foreign Secretary Shivshankar Menon told a public forum in New Delhi that the BJP's 2019 actions in Kashmir and changes to citizenship laws have caused self-inflicted damage to the country's international image. In the words of one scholar who agrees, "India's moral standing has taken a hit," and, "Even India's partners are questioning its credentials as a multicultural, pluralist society." One op-ed published in a major Indian daily warned that "the sense of creeping Hindu majoritarianism has begun to generate concern among a range of groups from the liberal international media, the U.S. Congress, to the Islamic world." The article contended that "India will need some course-correction in the new year to prevent the crystallization of serious external challenges." Another long-time observer argued that New Delhi's claims that "domestic" issues should be of no concern to an external audience are not credible: "It's hard to deny that 2019 was the year when Modi's domestic adventures robbed the bank of goodwill accumulated over time.â¦ India's image took a beating this year." Support for India's rise as a major regional player and U.S. partner has been among the few subjects of bipartisan consensus in Washington, DC, in the 21 st century, and some analysts contend that the New Delhi government may be putting that consensus to the test by "sliding into majoritarianism and repression." These analysts express concern that an existing consensus in favor of robust and largely uncritical support for India may be eroding, with signs that some Democratic lawmakers, in particular, have been angered by India's domestic policies. According to one Indian pundit, "[E]ven the mere introduction by House Democrats of two House resolutions on Kashmir bears the ominous signs of India increasingly becoming a partisan issue in the American foreign policy consensus." U.S. Policy and Issues for Congress A key goal of U.S. policy in South Asia has been to prevent India-Pakistan conflict from escalating to interstate war. This means the United States has sought to avoid actions that overtly favored either party. Over the past decade, however, Washington appears to have grown closer to India while relations with Pakistan appear to continue to be viewed as clouded by mistrust. The Trump Administration "suspended" security assistance to Pakistan in 2018 and has significantly reduced nonmilitary aid while simultaneously deepening ties with New Delhi. The Administration views India as a key "anchor" of its "free and open Indo-Pacific" strategy, which some argue is aimed at China. Yet any U.S. impulse to "tilt" toward India is to some extent offset by Islamabad's current, and by most accounts vital, role in facilitating Afghan reconciliation negotiations. President Trump's apparent bonhomie with Pakistan's prime minister and offer to mediate on Kashmir in July was taken by some as a new and potentially unwise strategic shift. The U.S. government has maintained a focus on the potential for conflict over Kashmir to destabilize South Asia. At present, the United States has no congressionally-confirmed Assistant Secretary of State leading the Bureau of South and Central Asia and no Ambassador in Pakistan, leading some experts to worry that the Trump Administration's preparedness for India-Pakistan crises remains thin. Developments in August 2019 and after also renewed concerns among some analysts that the Trump Administration's "hands-off" posture toward this and other international crises erodes American power and increases the risk of regional turbulence. Some commentary, however, was more approving of U.S. posturing. Developments in Kashmir in 2019 raise possible questions for Congress: Have India's actions changing the status of its J&K state negatively affect regional stability? If so, what leverage does the United States have and what U.S. policies might best address potential instability? Is there any diplomatic or other role for the U.S. government to play in managing India-Pakistan conflict or facilitating a renewal of their bilateral dialogue? To what extent does increased instability in Kashmir influence dynamics in Afghanistan? Will Islamabad's cooperation with Washington on Afghan reconciliation be reduced? To what extent, if any, are India's democratic/constitutional norms and pluralist traditions at risk in the country's current political climate? Are human rights abuses and threats to religious freedom increasing there? If so, should the U.S. government take any further actions to address such concerns? Summary:	null	96	55,867	55,869	55,869	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Overview The final status of the former princedom of Kashmir has remained unsettled since 1947. On August 5, 2019, the Indian government announced that it was formally ending the "special status" of its Muslim-majority Jammu and Kashmir (J&K) state, the two-thirds of Kashmir under New Delhi's control, specifically by abrogating certain provisions of the Indian Constitution that granted the state autonomy with regard to most internal administrative issues. The legal changes went into effect on November 1, 2019, when New Delhi also bifurcated the state into two "union territories," each with lesser indigenous administrative powers than Indian states. Indian officials explain the moves as matters of internal domestic politics, taken for the purpose of properly integrating J&K and facilitating its economic development. The process by which India's government has undertaken the effort has come under strident criticism for its alleged reliance on repressive force in J&K and for questionable legal and constitutional arguments that are likely to come before India's Supreme Court. Internationally, the move sparked controversy as a "unilateral" Indian effort to alter the status of a territory that is considered disputed by neighboring Pakistan and China, as well as by the United Nations. New Delhi's heavy-handed security crackdown in the remote state also raised ongoing human rights concerns. To date, but for a brief January visit by the U.S. Ambassador to India, U.S. government officials and foreign journalists have not been permitted to visit the Kashmir Valley. The long-standing U.S. position on Kashmir is that the territory's status should be settled through negotiations between India and Pakistan while taking into consideration the wishes of the Kashmiri people. Since 1972, India's government has generally shunned third-party involvement on Kashmir, while Pakistan's government has continued efforts to internationalize it, especially through U.N. Security Council (UNSC) actions. China, a close ally of Pakistan, is also a minor party to the dispute. There are international concerns about potential for increased civil unrest and violence in the Kashmir Valley, and the cascade effect this could have on regional stability.Â To date, the Trump Administration has limited its public statements to calls for maintaining peace and stability, and respecting human rights. The UNSC likewise calls for restraint by all parties; an "informal" August 16 UNSC meeting resulted in no ensuing official U.N. statement. Numerous Members of the U.S. Congress have expressed concern about reported human rights abuses in Kashmir and about the potential for further international conflict between India and Pakistan. New Delhi's August moves enraged Pakistan's leaders, who openly warned of further escalation between South Asia's two nuclear-armed powers, which nearly came to war after a February 2019 suicide bombing in the Kashmir Valley and retaliatory Indian airstrikes. The actions may also have implications for democracy and human rights in India; many analysts argue these have been undermined both in recent years and through Article 370's repeal. Moreover, Indian Prime Minister Narendra Modi and his Hindu nationalist Bharatiya Janata Party (BJP)âempowered by a strong electoral mandate in May and increasingly pursuing Hindu majoritarian policiesâmay be undermining the country's secular, pluralist traditions. The United States seeks to balance pursuit of broader U.S.-India partnership while upholding human rights protections and maintaining cooperative relations with Pakistan. Recent Developments Status and Impact of India's Crackdown As of early January 2020, five months after the crackdown in J&K began, most internet service and roughly half of mobile phone users in the densely-populated Kashmir Valley remain blocked; and hundreds of Kashmiris remain in detention, including key political figures. According to India's Home Ministry, as of December 3, more than 5,100 people had been taken into "preventive custody" in J&K after August 4, of whom 609 remained in "preventive detention," including 218 alleged "stone-pelters" who assaulted police in street protests. New Delhi justifies ongoing restrictions as necessary in a fraught security environment. The U.S. government has long acknowledged a general threat; as stated by the lead U.S. diplomat for the region, Principal Deputy Assistant Secretary of State for South and Central Asia Alice Wells, in October, "There are terrorist groups who operate in Kashmir and who try to take advantage of political and social disaffection." In early December, the Indian Home Ministry informed Parliament that incidents of "terrorist violence" in J&K during the 115 days following August 5 were down 17% from the 115 days preceding that date, from 106 to 88. However, the Ministry stated that attempts by militants to infiltrate into the Valley across the Line of Control from Pakistan have increased, from 53 attempts in the 88 days preceding August 5 to 84 in the 88 days following (in contrast, in October 2019, Wells stated before a House panel that, "I think we've observed a decline in infiltrations across the Line of Control"). Senior Indian officials say their key goal is to avoid violence and bloodshed, arguing that "lots of the reports about shortages are fictitious" and that, "Some of our detractors are spreading false rumors, including through the U.S. media and it is malicious in nature." Indian authorities continue to insist that, with regard to street protests, "There has been no incident of major violence. Not even a single live bullet has been fired. There has been no loss of life in police action" (however, at least one teenaged protester's death reportedly was caused by shotgun pellets and a tear gas canister ). They add, however, that "terrorists and their proxies are trying to create an atmosphere of fear and intimidation in Kashmir." Because of this, "Some remaining restrictions on the communications and preventive detentions remain with a view to maintain public law and order." A September New York Times report described a "punishing blockade" ongoing in the Kashmir Valley, with sporadic protests breaking out, and dozens of demonstrators suffering serious injuries from shotgun pellets and tear gas canisters, leaving Kashmiris "feeling unsettled, demoralized, and furious." An October Press Trust of India report found some signs of normalcy returning, but said government efforts to reopen schools had failed, with parents and students choosing to stay away, main markets remaining shuttered, and mobile phone service remaining suspended in most of the Valley, where there continued to be extremely limited internet service. Since mid-October, the New Delhi and J&K governments have claimed that availability of "essential supplies," including medicines and cooking gas, is being ensured; that all hospitals, medical facilities, schools, banks, and ATMs are functioning normally; that there are no restrictions on movement by auto, rail, or air; and that there are no restrictions on the Indian media or journalists (foreign officials and foreign journalists continue to be denied access). On October 9, curtailment of tourism in the region was withdrawn. On October 14, the government lifted restrictions on post-paid mobile telephone service, while pre-paid service, aka via "burner phones," along with internet and messaging services, remains widely blocked. Public schools have reopened, but parents generally have not wanted their children out in a still-unstable setting. According to Indian authorities, "terrorists are also preventing the normal functioning of schools." On November 1, citizens of the former J&K state awoke to a new status as residents of either the Jammu and Kashmir Union Territory (UT) or the Union Territory of Ladakh (the latter populated by less than 300,000 residents; see Figure 1 ). While the J&K UT will be able to elect its own legislature, all administrative districts are now controlled by India's federal government, and J&K no longer has its own constitution or flag. The chief executives of each new UT are lieutenant governors who report directly to India's Home Ministry. More than 100 federal laws are now applicable to J&K, including the Indian Penal Code, and more than 150 laws made by the former state legislature are being repealed, including long-standing prohibitions on leasing land to non-residents. The new J&K assembly will be unable to make any laws on policing or public order, thus ceding all security issues to New Delhi's purview. The U.S.-India "2+2" Summit and Other Recent Developments On December 18, India's external affairs and defense ministers were in Washington, DC, for the second "2+2" summit meeting with their American counterparts, where "The two sides reaffirmed the growing strategic partnership between the United States and India, which is grounded in democratic values, shared strategic objectives, strong people-to-people ties, and a common commitment to the prosperity of their citizens." In the midst of the session, an unnamed senior State Department official met the press and was asked about the situation in J&K. She responded that the key U.S. government concern is "a return to economic and political normalcy there," saying, "[W]hat has concerned us about the actions in Kashmir are the prolonged detentions of political leaders as well as other residents of the valley, in addition to the restrictions that continue to exist on cell phone coverage and internet." While visiting Capitol Hill at the time of the summit, Indian External Affairs Minister Subrahmanyam Jaishankar "abruptly" withdrew from a scheduled meeting with senior House Members, reportedly because the House delegation was to include Representative Pramila Jayapal, the original sponsor of H.Res. 745 , which urges the Indian government to "end the restrictions on communications and mass detentions in Jammu and Kashmir as swiftly as possible and preserve religious freedom for all residents" (see "The U.S. Congress, Hearings, and Relevant Legislation" section below). Some observers saw in Jaishankar's action a shortsighted expression of India's considerable sensitivity about the Kashmir issue and a missed opportunity to engage concerned U.S. officials. Two months earlier, in October, two notable developments took place in India. Local Block Development Council elections were held in J&K that month. With all major regional parties and the national opposition Congress Party boycotting the polls, Independents overwhelmed the BJP, winning 71% of the total 317 blocks to the BJP's 26%, including 85% in the Kashmir division. The results suggested widespread disenchantment with New Delhi's ruling party in J&K. Also in October, India allowed a delegation of European parliamentarians to visit the Kashmir Valley, the first such travel by foreign officials since July. The composition of the delegation and questions surrounding its funding and official or private status added to international critiques of India's recent Kashmir policies. On January 9, New Delhi allowed a U.S. official to visit J&K for the first time since August, when 15 ambassadors, including U.S. Ambassador Ken Juster, were given a two-day "guided tour" of the Srinagar area. EU envoys declined to participate, apparently because the visit did not include meetings with detained Kashmiri political leaders. An External Affairs Ministry spokesman said the objective of the visit was for the envoys to view government efforts to "normalize the situation" firsthand, but the orchestrated visit attracted criticism from opposition parties and it is unclear if international opprobrium will be reduced as a result. On January 10, India's Supreme Court issued a ruling that an open-ended internet shutdown (as exists in parts of J&K) was a violation of free speech and expression granted by the country's constitution, calling indefinite restrictions "impermissible." The court gave J&K authorities a one-week deadline to provide a detailed review all orders related to internet restrictions. Background Setting India's former J&K state was about the size of Utah and encompassed three culturally distinct regions: Kashmir, Jammu, and Ladakh (see Figure 1 ). More than half of the mostly mountainous area's nearly 13 million residents live in the fertile Kashmir Valley, a region slightly larger than Connecticut (7% of the former state's land area was home to 55% of its population). Srinagar, in the Valley, was the state's (and current UT's) summer capital and by far its largest city with some 1.3 million residents. Jammu city, the winter capital, has roughly half that population, and the Jammu district is home to more than 40% of the former state's residents. About a quarter-million people live in remote Ladakh, abutting China. Just under 1% of India's total population lives in the former state of J&K. Roughly 80% of Indians are Hindu and about 14% are Muslim. At the time of India's 2011 national census, J&K's population was about 68% Muslim, 28% Hindu, 2% Sikh, and 1% Buddhist. At least 97% of the Kashmir Valley's residents are Muslim; the vast majority of the district's Hindus fled the region after 1989 (see " Human Rights and India's International Reputation " below). The Jammu district is about two-thirds Hindu, with the remainder mostly Muslim. Ladakh's population is about evenly split between Buddhists and Muslims. Upon the 1947 partition of British India based on religion, the princely state of J&K's population had unique status: a Muslim majority ruled by a Hindu king. Many historians find pluralist values in pre-1947 Kashmir, with a general tolerance of multiple religions. The state's economy had been agriculture-based; horticulture and floriculture account for the bulk of income. Historically, the region's natural beauty made tourism a major aspect of commerceâthis sector was devastated by decades of conflict, but had seemed to be making a comeback in recent years. Kashmir's remoteness has been a major impediment to transportation and communication networks, and thus to overall development. In mid-2019, India's Ambassador to the United States claimed that India's central government has provided about $40 billion to the former J&K state since 2004. J&K's Status, Article 370, and India-Pakistan Conflict Accession to India Since Britain's 1947 withdrawal and the partition and independence of India and Pakistan, the final status of the princely state of J&K has remained unsettled, especially because Pakistan rejected the process through which J&K's then-ruler had acceded to India. A dyadic war over Kashmiri sovereignty ended in 1949 with a U.N.-brokered cease-fire that left the two countries separated by a 460-mile-long military "Line of Control" (LOC). The Indian-administered side became the state of Jammu and Kashmir. The Pakistani-administered side became Azad ["Free"] Jammu and Kashmir (AJK) and the "Northern Areas," later called Gilgit-Baltistan. Article 370 and Article 35A of the Indian Constitution, and J&K Integration In 1949, J&K's interim government and India's Constituent Assembly negotiated "special status" for the new state, leading to Article 370 of the Indian Constitution in 1950, the same year the document went into effect. The Article formalized the terms of Jammu and Kashmir's accession to the Indian Union, generally requiring the concurrence of the state government before the central government could make administrative changes beyond the areas of defense, foreign affairs, and communications. A 1954 Presidential Order empowered the state government to regulate the rights of permanent residents, and these became defined in Article 35A of the Constitution's Appendix, which prohibited nonresidents from working, attending college, or owning property in the state, among other provisions. Within a decade of India's independence, however, most national constitutional provisions were extended to the J&K state via Presidential Order with the concurrence of the J&K assembly (and with the Indian Supreme Court's assent). The state assembly arguably had over decades become pliant to New Delhi's influence, and critical observers contend that J&K's special status has long been hollowed out: while Article 370 provided special status constitutionally , the state suffered from inferior status politically through what amounted to "constitutional abuse." Repeal of Article 370 became among the leading policy goals of the BJP and its Hindu nationalist antecedents on the principle of national unity. Further India-Pakistan Wars The J&K state's legal integration into India progressed and prospects for a U.N.-recommended plebiscite on its final status correspondingly faded in the 1950s and 1960s. Three more India-Pakistan warsâin 1965, 1971, and 1999; two of which were fought over Kashmir itselfâleft territorial control largely unchanged, although a brief 1962 India-China war ended with the high-altitude and sparsely populated desert region of Ladakh's Aksai Chin under Chinese control, making China a third, if lesser, party to the Kashmir dispute. In 1965, Pakistan infiltrated troops into Indian-held Kashmir in an apparent effort to incite a local separatist uprising; India responded with a full-scale military operation against Pakistan. A furious, 17-day war caused more than 6,000 battle deaths and ended with Pakistan failing to alter the regional status quo. The 1971 war saw Pakistan lose more than half of its population and much territory when East Pakistan became independent Bangladesh, the mere existence of which undermined Pakistan's professed status as a homeland for the Muslims of Asia's Subcontinent. In summer 1999, one year after India and Pakistan tested nuclear weapons, Pakistani troops again infiltrated J&K state, this time to seize strategic high ground near Kargil. Indian ground and air forces ejected the Pakistanis after three months of combat and 1,000 or more battle deaths. Third-Party Involvement In 1947, Pakistan had immediately and formally disputed the accession process by which J&K had joined India at the United Nations. New Delhi also initially welcomed U.N. mediation. Over ensuing decades, the U.N. Security Council issued a total of 18 Resolutions (UNSCRs) relevant to the Kashmir dispute. The third and central one, UNSCR 47 of April 1948, recommended a three-step process for restoring peace and order, and "to create proper conditions for a free and impartial plebiscite" in the state, but the conditions were never met and no referendum was held. Sporadic attempts by the United States to intercede in Kashmir have been unsuccessful. A short-lived mediation effort by the United States and Britain included six rounds of talks in 1961 and 1962, but ended when India indicated that it would not relinquish control of the Kashmir Valley. Although President Bill Clinton's personal diplomatic engagement was credited with averting a wider war and potential nuclear exchange in 1999, Kashmir's disputed status went unchanged. After 2001, some analysts argued that resolution of the Kashmir issue would improve the prospects for U.S. success in Afghanistanâa perspective championed by the Pakistani governmentâyet U.S. Presidents ultimately were dissuaded from making this argument an overt aspect of U.S. policy. In more recent decades, India generally has demurred from mediation in Kashmir out of (1) a combination of suspicion about the motives of foreign powers and the international organizations they influence; (2) India's self-image as a regional leader in no need of assistance; and (3) an underlying assumption that mediation tends to empower the weaker and revisionist party (in this case, Pakistan). According to New Delhi, prospects for third-party mediation were fully precluded by the 1972 Shimla Agreement, in which India and Pakistan "resolved to settle their differences by peaceful means through bilateral negotiations or by any other peaceful means mutually agreed upon between them." The 1999 Lahore Declaration reaffirmed the bilateral nature of the issue. Separatist Conflict and President's Rule From 2018 Three Decades of Separatist Conflict A widespread perception that J&K's 1987 state elections were illicitly manipulated to favor the central government led to pervasive disaffection among residents of the Kashmir Valley and the outbreak of an Islamist-based separatist insurgency in 1989. The decades-long conflict has pitted the Indian government against Kashmiri militants who seek independence or Kashmir's merger with neighboring Pakistan, a country widely believed to have provided arms, training, and safe haven to militants over the decades. Violence peaked in the 1990s and early 2000s, mainly affecting the Valley and the LOC (see Figure 2 ). Lethal exchanges of small arms and mortar fire at the LOC remain common, killing soldiers and civilians alike, despite a formal cease-fire agreement in place since 2003. The Indian government says the conflict has killed at least 42,000 civilians, militants, and security personnel since 1989; independent analyses count 70,000 or more related deaths. India maintains a security presence of at least 500,000 army and paramilitary soldiers in the former J&K state. A bilateral India-Pakistan peace plan for Kashmir was nearly finalized in 2007, when Indian and Pakistani negotiators had agreed to make the LOC a "soft border" with free movement and trade across it; prospects faded due largely to unrelated Pakistani domestic issues. India has blamed conventionally weaker Pakistan for perpetuating the conflict as part of an effort to "bleed India with a thousand cuts." Pakistan denies materially supporting Kashmiri militants and has sought to highlight Indian human rights abuses in the Kashmir Valley. Separatist militants have commonly targeted civilians, leading India and most Indians (as well as independent analysts) to label them as terrorists and thus decry Pakistan as a "terrorist-supporting state." The U.S. government issues ongoing criticisms of Islamabad for taking insufficient action to neutralize anti-India terrorists groups operating on and from Pakistani soil. Still, many analysts argue that blanket characterizations of the Kashmir conflict as an externally-fomented terrorist effort obscure the legitimate grievances of the indigenous Muslim-majority populace, while (often implicitly) endorsing a "harsh counterinsurgency strategy" that, they contend, has only further alienated successive generations in the Valley. For these observers, Kashmir's turmoil is, at its roots, a clash between the Indian government and the Kashmiri people, leading some to decry New Delhi's claims that Pakistan perpetuates the conflict. Today, pro-independence political parties on both sides of the LOC are given little room to operate, and many Kashmiris have become deeply alienated. Critics of the Modi government's Hindu nationalist agenda argue that its policies entail bringing the patriotism of Indian Muslims into question and portraying Pakistan as a relentless threat that manipulates willing Kashmiri separatists, and so is responsible for violence in Kashmir. Arguments locating the conflict's cause in the interplay between Kashmir and New Delhi are firmly rejected by Indian officials and many Indian analysts who contend that there is no "freedom struggle" in Kashmir, rather a war "foisted" on India by a neighbor (Pakistan) that will maintain perpetual animosity toward India. In this view, talking to Pakistan cannot resolve the situation, nor can negotiations with Kashmiri separatist groups and parties, which are seen to represent Pakistan's interests rather than those of the Kashmiri people. Even before 2019 indications were mounting that Kashmiri militancy was on the rise for the first time in nearly two decades. Figure 3 shows that, in the first five years after Modi took office, the number of "terrorist incidents" and conflict-related deaths was on the rise. Mass street protests in the valley were sparked by the 2016 killing of a young militant commander in a shootout with security forces. Existing data on rates of separatist violence indicate that levels in 2019 decreased over the previous year, perhaps in large part due to the post-July security crackdown. 2018 J&K Assembly Dissolution and President's Rule J&K's lack of a state assembly in early 2019 appears to have facilitated New Delhi's constitutional changes. In June 2018, the J&K state government formed in 2015âa coalition of the BJP and the Kashmir-based Peoples Democratic Partyâcollapsed after the BJP withdrew its support, triggering direct federal control through the center-appointed governor. BJP officials called the coalition untenable due to differences over the use of force to address a deteriorating security situation (the BJP sought greater use of force). In December 2018, J&K came under "President's Rule" for the first time since 1996, with the state legislature's power under Parliament's authority. Developments in 2019 The February Pulwama Crisis On February 14, 2019, an explosives-laden SUV rammed into a convoy carrying paramilitary police in the Kashmir Valley city of Pulwama. At least 40 personnel were killed in the explosion. The suicide attacker was said to be a member of Jaish-e-Mohammad (JeM), a Pakistan-based, U.S.-designated terrorist group that claimed responsibility for the bombing. On February 26, Indian jets reportedly bombed a JeM facility in Balakot, Pakistan, the first such Indian attack on Pakistan proper since 1971 (see Figure 4 ). Pakistan launched its own air strike in response, and aerial combat led to the downing of an Indian jet. When Pakistan repatriated the captured Indian pilot on March 1, 2019, the crisis subsided, but tensions have remained high. The episode fueled new fears of war between South Asia's two nuclear-armed powers and put a damper on prospects for renewed dialogue between New Delhi and Islamabad, or between New Delhi and J&K. A White House statement on the day of the Pulwama bombing called on Pakistan to "end immediately the support and safe haven provided to all terrorist groups operating on its soil" and indicated that the incident "only strengthens our resolve" to bolster U.S.-India counterterrorism cooperation. Numerous Members of Congress expressed condemnation and condolences on social media. However, during the crisis, the Trump Administration was seen by some as unhelpfully absent diplomatically, described by one former senior U.S. official as "mostly a bystander" to the most serious South Asia crisis in decades, demonstrating "a lack of focus" and diminished capacity due to vacancies in key State Department positions. President Trump's July "Mediation" Offer In July 2019, while taking questions from the press alongside visiting Pakistani Prime Minister Imran Khan, President Trump claimed that Indian Prime Minister Modi had earlier in the month asked the United States to play a mediator role in the Kashmir dispute. As noted above, such a request would represent a dramatic policy reversal for India. The U.S. President's statement provoked an uproar in India's Parliament, with opposition members staging a walkout and demanding explanation. Quickly following Trump's claim, Indian External Affairs Minister Jaishankar assured parliamentarians that no such request had been made, and he reiterated India's position that "all outstanding issues with Pakistan are discussed only bilaterally" and that future engagement with Islamabad "would require an end to cross border terrorism." In an apparent effort to reduce confusion, a same-day social media post from the State Department clarified the U.S. position that "Kashmir is a bilateral issue for both parties to discuss" and the Trump Administration "stands ready to assist." A release from the Chairman of the House Foreign Affairs Committee, Representative Engel, reiterated support for "the long-standing U.S. position" on Kashmir, affirmed that the pace and scope of India-Pakistan dialogue is a bilateral determination, and called on Pakistan to facilitate such dialogue by taking "concrete and irreversible steps to dismantle the terrorist infrastructure on Pakistan's soil." An August 2 meeting of Secretary of State Mike Pompeo and Jaishankar in Thailand saw the Indian official directly convey to his American counterpart that any discussion on Kashmir, "if at all warranted," would be strictly between India and Pakistan. President Trump's seemingly warm reception of Pakistan's leader, his desire that Pakistan help the United States "extricate itself" from Afghanistan, and recent U.S. support for an International Monetary Fund bailout of Pakistan elicited disquiet among many Indian analysts. They said Washington was again conceptually linking India and Pakistan, "wooing" the latter in ways that harm the former's interests. Trump's Kashmir mediation claims were especially jarring for many Indian observers, some of whom began questioning the wisdom of Modi's confidence in the United States as a partner. The episode may have contributed to India's August moves. August Abrogation of Article 370 and J&K Reorganization In late July and during the first days of August, India moved an additional 45,000 troops into the Kashmir region in apparent preparation for announcing Article 370's repeal. On August 2, the J&K government of New Delhi-appointed governor Satya Pal Malik issued an unprecedented order cancelling a major annual religious pilgrimage in the state and requiring tourists to leave the region, purportedly due to intelligence inputs of terror threats. The developments reportedly elicited panic among those Kashmiris fearful that their state's constitutional protections would be removed. Two days later, the state's senior political leadersâincluding former chief ministers Omar Abdullah (2009-2015) and Mehbooba Mufti (2016-2018)âwere placed under house arrest, schools were closed, and all telecommunications, including internet and landline telephone service, were curtailed. Internet shutdowns are common in Kashmirâone press report said there had been 52 earlier in 2019 aloneâbut this appears to have been the first-ever shutdown of landline phones there. Pakistan's government denounced these actions as "destabilizing." On August 5, with J&K state in "lockdown," Indian Home Minister Amit Shah introduced in Parliament legislation to abrogate Article 370 and reorganize the J&K state by bifurcating it into two Union Territories, Jammu & Kashmir and Ladakh, with only the former having a legislative assembly. In a floor speech, Shah called Article 370 "discriminatory on the basis of gender, class, caste, and place or origin," and contended that its repeal would spark investment and job creation in J&K. On August 6, after the key legislation had passed both of Parliament's chambers by large majorities and with limited debate, Prime Minister Modi lauded the legislation, declaring, "J&K is now free from their shackles," and predicting that the changes "will ensure integration and empowerment." All of his party's National Democratic Alliance coalition partners supported the legislation, as did many opposition parties (the main opposition Congress Party was opposed). The move also appears to have been popular among the Indian public, possibly in part due to a post-Pulwama, post-election wave of nationalism that has been amplified by the country's mainstream media. Proponents view the move as a long-overdue, "master stroke" righting of a historic wrong that left J&K underdeveloped and contributed to conflict there. Notwithstanding Indian authorities' claims that J&K's special status hobbled its economic and social development, numerous indicators show that the former state was far from the poorest rankings in this regard. For example, in FY2014-FY2015, J&K's per capita income was about Rs63,000 (roughly $882 in current U.S. dollars), higher than seven other states, and more than double that of Bihar and 50% above Uttar Pradesh. While the state's economy typically grew at the slowest annual rates among all Indian states in the current decade, its FY2017-FY2018 expansion of 6.8% was greater than that of eight states and only moderately lagged the national expansion of 7.2% that year. According to 2011 census data, J&K's literacy rate of nearly 69% ranked it higher than five Indian states, including Andhra Pradesh and Rajasthan. At 73.5 years, J&K ranked 3 rd of 22 states in life expectancy, nearly five years longer than the national average of 68.7. The state also ranked 8 th in poverty rate and 10 th in infant mortality. The year 2019 saw negative economic news for India and increasing criticism of the government on these grounds, leading some analysts to suspect that Modi and his lieutenants were eager to play to the BJP's Hindu nationalist base and shift the national conversation. In addition, some analysts allege that President Trump's relevant July comments may have convinced Indian officials that a window of opportunity in Kashmir might soon close, and that they could deprive Pakistan of the "negotiating ploy" of seeking U.S. pressure on India as a price for Pakistan's cooperation with Afghanistan. Responses and Concerns International Reaction The Trump Administration Indian press reports claimed that External Affairs Minister Jaishankar had "sensitized" Secretary of State Pompeo to the coming Kashmir moves at an in-person meeting on August 2 so that Washington would not be taken by surprise. However, a social media post from the State Department's relevant bureau asserted that New Delhi "did not consult or inform the U.S. government" before moving to revoke J&K's special status. On August 5, a State Department spokeswoman said about developments in Kashmir, "We are concerned about reports of detentions and urge respect for individual rights and discussion with those in affected communities. We call on all parties to maintain peace and stability along the Line of Control." Three days later, she addressed the issue more substantively, saying, We want to maintain peace and stability, and we, of course, support direct dialogue between India and Pakistan on Kashmir and other issues of concern.... [W]henever it comes to any region in the world where there are tensions, we ask for people to observe the rule of law, respect for human rights, respect for international norms. We ask people to maintain peace and security and direct dialogue. The spokeswoman also flatly denied any change in U.S. policy. The Chairman of the House Foreign Affairs Committee and Ranking Member of the Senate Foreign Relations Committee also responded in a joint August 7 statement expressing hope that New Delhi would abide by democratic and human rights principles and calling on Islamabad to refrain from retaliating while taking action against terrorism. The government's heavy-handed security measures in J&K elicited newly intense criticisms of India on human rights grounds. In late September, Ambassador Wells said, The United States is concerned by widespread detentions, including those of politicians and business leaders, and the restrictions on the residents of Jammu and Kashmir.Â We look forward to the Indian Government's resumption of political engagement with local leaders and the scheduling of the promised elections at the earliest opportunity. During an October 22 House Foreign Affairs subcommittee hearing on human rights in South Asia, Ambassador Wells testified that, "the Department [of State] has closely monitored the situation" in Kashmir and, "We deeply appreciate the concerns expressed by many Members about the situation" there. She reviewed ongoing concerns about a lack of normalcy in the Valley, especially, citing continued detentions and "security restrictions," including those on communication, and calling on Indian authorities to restore everyday services "as swiftly as possible." Wells also welcomed Pakistani Prime Minister Imran Khan's recent statements abjuring external support for Kashmiri militancy: We believe the foundation for any successful dialogue between India and Pakistan is based on Pakistan taking sustained and irreversible steps against militants and terrorists on its territory.â¦ We believe that direct dialogue between India and Pakistan, as outlined in the 1972 Shimla Agreement, holds the most potential for reducing tensions. Some Indian observers saw the hearing as a public relations loss for India, with one opining that "India got a drubbing and Pakistan got away scot-free." However, for some analysts, the Trump Administration's broad embrace of Modi and its relatively mild criticisms on Kashmir embolden illiberal forces in India. The U.S. Congress, Hearings, and Relevant Legislation In August and September, numerous of Members of Congress went on record in support of Kashmiri human rights. During October travel to India, Senator Chris Van Hollen was denied permission to visit J&K. Days later, Senator Mark Warner, a cochair of the Senate India Caucus, tweeted, "While I understand India has legitimate security concerns, I am disturbed by its restrictions on communications and movement in Jammu and Kashmir." In October, the House Foreign Affairs Subcommittee on Asia, the Pacific, and Nonproliferation held a hearing on human rights in South Asia, where discussion was dominated by the Kashmir issue. In attendance was full committee Chairman Representative Engel, who opined that, "The Trump administration is giving a free pass when countries violate human rights or democratic norms. We saw this sentiment reflected in the State Department's public statements in response to India's revocation of Article 370 of its constitution." Then-Subcommittee Chairman Representative Brad Sherman said, "I regard [Kashmir] as the most dangerous geopolitical flash-point in the world. It is, after all, the only geopolitical flash-point that has involved wars between two nuclear powers." Also during the hearing, one Administration witness, Assistant Secretary of State for Democracy, Human Rights, and Labor Robert Destro, affirmed that the situation in Kashmir was "a humanitarian crisis." Congress's Tom Lantos Human Rights Commission held a mid-November hearing entitled "Jammu and Kashmir in Context," during which numerous House Members reiterated concerns about reports of ongoing human rights violations in the Kashmir Valley. Among the seven witnesses was U.S. Commission on International Religious Freedom (USCIRF) Commissioner Anurima Bhargava, who discussed restrictions of religious freedom in India, and noted that USCIRF researchers have been barred from visiting India since 2004. In S.Rept. 116-126 of September 26, 2019, accompanying the then-pending State and Foreign Operations Appropriations bill for FY2020 ( S. 2583 ), the Senate Appropriations Committee noted with concern the current humanitarian crisis in Kashmir and called on the government of India to (1) fully restore telecommunications and Internet services; (2) lift its lockdown and curfew; and (3) release individuals detained pursuant to the Indian government's revocation of Article 370 of the Indian constitution. H.Res. 724 , introduced on November 21, 2019, would condemn "the human rights violations taking place in Jammu and Kashmir" and support "Kashmiri self-determination." H.Res. 745 , introduced on December 6, 2019, and currently with 40 cosponsors, would recognize the security challenges faced by Indian authorities in Jammu and Kashmir, including from cross-border terrorism; reject arbitrary detention, use of excessive force against civilians, and suppression of peaceful expression of dissent as proportional responses to security challenges; urge the Indian government to ensure that any actions taken in pursuit of legitimate security priorities respect the human rights of all people and adhere to international human rights law; and urge that government to lift remaining restrictions on telecommunications and internet, release all persons "arbitrarily detained," and allow international human rights observers and journalists to access Jammu and Kashmir, among other provisions. Pakistan Islamabad issued a "strong demarche" in response to New Delhi's moves, deeming them "illegal actions ... in breach of international law and several UN Security Council resolutions." Pakistan downgraded diplomatic ties, halted trade with India, and suspended cross-border transport services. Pakistan's prime minister warned that, "With an approach of this nature, incidents like Pulwama are bound to happen again" and he later penned an op-ed in which he warned, "If the world does nothing to stop the Indian assault on Kashmir and its people, there will be consequences for the whole world as two nuclear-armed states get ever closer to a direct military confrontation." Pakistan appeared diplomatically isolated in August, with Turkey being the only country to offer solid and explicit support for Islamabad's position. Pakistan called for a UNSC session and, with China's support, the Council met on August 16 to discuss Kashmir for the first time in more than five decades, albeit in a closed-door session that produced no formal statement. Pakistani officials also suggested that Afghanistan's peace process could be negatively affected. Many analysts view Islamabad as having little credibility on Kashmir, given its long history of covertly supporting militant groups there. Pakistan's leadership has limited options to respond to India's actions, and renewed Pakistani support for Kashmiri militancy likely would be costly internationally. Pakistan's ability to alter the status quo through military action has been reduced in recent years, meaning that Islamabad likely must rely primarily on diplomacy. Given also that Pakistan and its primary ally, China, enjoy limited international credibility on human rights issues, Islamabad may stand by and hope that self-inflicted damage caused by New Delhi's own policies in Kashmir and, more recently, on citizenship laws, will harm India's reputation and perhaps undercut its recent diplomatic gains with Arab states such as Saudi Arabia and the UAE. In late 2019, Pakistan accused India of taking escalatory steps in the LOC region, including by deploying medium-range Brahmos cruise missiles there. China Pakistan and China have enjoyed an "all-weather" friendship for decades. On August 6, China's foreign ministry expressed "serious concern" about India's actions in Kashmir, focusing especially on the "unacceptable" changed status for Ladakh, parts of which Beijing claims as Chinese territory (Aksai Chin). A Foreign Ministry spokesman called on India to "stop unilaterally changing the status quo" and urged India and Pakistan to exercise restraint. China's foreign minister reportedly vowed to "uphold justice for Pakistan on the international arena," and Beijing has supported Pakistan's efforts to bring the Kashmir issue before the U.N. Security Council. One editorial published in China's state-run media warned that India "will incur risks" for its "reckless and arrogant" actions. The United Nations On August 8, the U.N. Secretary-General called for "maximum restraint" and expressed concern that restrictions in place on the Indian side of Kashmir "could exacerbate the human rights situation in the region." He reaffirmed that, "The position of the United Nations on this region is governed by the Charter ... and applicable Security Council resolutions." Beijing's support of Pakistan's request for U.N. involvement led to "informal and closed-door consultations" among UNSC members on August 16, a session that included the Russian government. No ensuing statement was issued, but Pakistan's U.N. Ambassador declared that the fact of the meeting itself demonstrated Kashmir's disputed status, while India's Ambassador held to New Delhi's view that Article 370's abrogation was a strictly internal matter. No UNSC member other than China spoke publicly about the August meeting, leading some to conclude the issue was not gaining traction. In mid-December, Beijing reportedly echoed Islamabad's request that the U.N. Security Council hold another closed-door meeting on Kashmir, but no such meeting has taken place. In a September speech to the U.N. Human Rights Council, High Commissioner for Human Rights Michelle Bachelet expressed being "deeply concerned" about the human rights situation in Kashmir. In October, a spokesman for the Council said, "We are extremely concerned that the population of Indian-administered Kashmir continues to be deprived of a wide range of human rights and we urge the Indian authorities to unlock the situation and fully restore the rights that are currently being denied." Other Responses Numerous Members of the European Parliament have expressed human rights concerns and called on New Delhi to "restore the basic freedoms" of Kashmiris. During her early November visit to New Delhi, German Chancellor Angela Merkel opined, "The situation for the people there is currently not sustainable and must improve." Later that month, Sweden's foreign minister said, "We emphasize the importance of human rights" in Kashmir. The Saudi government agreed in late December to host an Organization of Islamic Cooperation "special foreign ministers meeting" on Kashmir sometime in early 2020. Human Rights and India's International Reputation Democracy and Other Human Rights Concerns100 New Delhi's August 5 actions appear to have been broadly popular with the Indian public and, as noted above, were supported by most major Indian political parties. Yet the government's process came under criticism from many quarters for a lack of prior consultation and/or debate, and many legal scholars opined that the government had overstepped its constitutional authority, predicting that the Indian Supreme Court would become involved. New Delhi's perceived circumvention of the J&K state administration (by taking action with only the assent of the centrally appointed governor) is at the heart of questions about the constitutionality of the government's moves, which, in the words of one former government interlocutor to the state, represent "the total undermining of our democracy" that was "done by stealth." The Modi government's argument appears to be that, since the J&K assembly was dissolved and the state had been under central rule since 2018, the national parliament could exercise the prerogative of the assembly, a position rejected as specious by observers who see the government's actions as a "constitutional coup." Many Indian (and international) critics of the government's moves see them not only as undemocratic in process, but also as direct attacks on India's secular identity. From this perspective, the BJP's motive is about advancing the party's "deeply rooted ideals of Hindu majoritarianism" and Modi's assumed project "to reinvent India as an India that is Hindu." One month before the government's August 5 bill submission, a senior BJP official said his party is committed to bringing back the estimated 200,000-300,000 Hindus who fled the Kashmir Valley after 1989 (known as Pandits ). This reportedly could include reviving a plan for construction of "segregated enclaves" with their own schools, shopping malls, and hospitals, an approach with little or no support from local figures or groups representing the Pandits. Beyond the Pandit-return issue, New Delhi's revocation of the state's restrictions on residency and rhetorical emphasis on bringing investment and economic development to the Kashmir Valley lead some analysts to see "colonialist" parallels with Israel's activities in the West Bank. Perceived human rights abuses on both sides of the Kashmir LOC, some of them serious, have long been of concern to international governments and organizations. A major and unprecedented 2018 R eport on the Situation on Human Rights in Kashmir from the U.N. Human Rights Commission harshly criticized the New Delhi government for alleged excessive use of force and other human rights abuses in the J&K state. With New Delhi's sweeping security crackdown in Kashmir continuing to date, the Modi government faces renewed criticisms for widely alleged abuses. Indian officials have also come under fire for the use of torture in Kashmir and for acting under broad and vaguely worded laws that facilitate abuses. The Indian government reportedly is in contravention of several of its U.N. commitments, including a 2011 agreement to allow all special rapporteurs to visit India. In spring 2019, after a U.N. Human Right Council's letter to New Delhi asking about steps taken to address abuses alleged in the 2018 report, Indian officials announced they would no longer engage U.N. "mandate holders." India appears to be the world leader in internet shutdowns by far, having blocked the network 134 times in 2018, compared to 12 shutdowns by Pakistan, the number two country in this category. Internet blockages are common in Kashmir, but rarely last more than a few days; at more than five months to date, the outage in the Valley is the longest ever. A group of U.N. Special Rapporteurs called the blackout "a form of collective punishment" that is "inconsistent with the fundamental norms of necessity and proportionality." Human Rights Watch and Amnesty International both contend that the communications blackout violates international law. As noted above, in early January 2020, India's Supreme Court seemed to agree, ruling that an indefinite suspension is "impermissible." Kashmiris have begun automatically losing their accounts on the popular WhatsApp platform due to 120 days of inactivity and, by mid-December, the internet shutdown had become the longest ever imposed in a democracy, according to Access Now, an advocacy group. Businesses have been especially hard hit: the Kashmir Chamber of Commerce estimated more than Rs178 billion (about $2.5 billion) in losses over four months. Potential Damage to India's International Image Late 2019 saw a spate of commentary in both the Indian and American press about the likelihood that New Delhi's moves on Kashmir, when combined with the national government's broader pursuit of sometimes controversial Hindu nationalist policies, would contribute to a tarnishing of India's reputation as a secular, pluralist democratic society. In December, Parliament passed a Citizenship Amendment Act (CAA) that adds a religious criterion to the country's naturalization process and triggered widespread and sometimes violent public protests. The Modi/BJP expenditure of political capital on social issues is seen by many analysts as likely to both intensify domestic instability and decrease the space in which to reform the economy, a combination that could be harmful to India's international reputation. Former Indian National Security Adviser and Foreign Secretary Shivshankar Menon told a public forum in New Delhi that the BJP's 2019 actions in Kashmir and changes to citizenship laws have caused self-inflicted damage to the country's international image. In the words of one scholar who agrees, "India's moral standing has taken a hit," and, "Even India's partners are questioning its credentials as a multicultural, pluralist society." One op-ed published in a major Indian daily warned that "the sense of creeping Hindu majoritarianism has begun to generate concern among a range of groups from the liberal international media, the U.S. Congress, to the Islamic world." The article contended that "India will need some course-correction in the new year to prevent the crystallization of serious external challenges." Another long-time observer argued that New Delhi's claims that "domestic" issues should be of no concern to an external audience are not credible: "It's hard to deny that 2019 was the year when Modi's domestic adventures robbed the bank of goodwill accumulated over time.â¦ India's image took a beating this year." Support for India's rise as a major regional player and U.S. partner has been among the few subjects of bipartisan consensus in Washington, DC, in the 21 st century, and some analysts contend that the New Delhi government may be putting that consensus to the test by "sliding into majoritarianism and repression." These analysts express concern that an existing consensus in favor of robust and largely uncritical support for India may be eroding, with signs that some Democratic lawmakers, in particular, have been angered by India's domestic policies. According to one Indian pundit, "[E]ven the mere introduction by House Democrats of two House resolutions on Kashmir bears the ominous signs of India increasingly becoming a partisan issue in the American foreign policy consensus." U.S. Policy and Issues for Congress A key goal of U.S. policy in South Asia has been to prevent India-Pakistan conflict from escalating to interstate war. This means the United States has sought to avoid actions that overtly favored either party. Over the past decade, however, Washington appears to have grown closer to India while relations with Pakistan appear to continue to be viewed as clouded by mistrust. The Trump Administration "suspended" security assistance to Pakistan in 2018 and has significantly reduced nonmilitary aid while simultaneously deepening ties with New Delhi. The Administration views India as a key "anchor" of its "free and open Indo-Pacific" strategy, which some argue is aimed at China. Yet any U.S. impulse to "tilt" toward India is to some extent offset by Islamabad's current, and by most accounts vital, role in facilitating Afghan reconciliation negotiations. President Trump's apparent bonhomie with Pakistan's prime minister and offer to mediate on Kashmir in July was taken by some as a new and potentially unwise strategic shift. The U.S. government has maintained a focus on the potential for conflict over Kashmir to destabilize South Asia. At present, the United States has no congressionally-confirmed Assistant Secretary of State leading the Bureau of South and Central Asia and no Ambassador in Pakistan, leading some experts to worry that the Trump Administration's preparedness for India-Pakistan crises remains thin. Developments in August 2019 and after also renewed concerns among some analysts that the Trump Administration's "hands-off" posture toward this and other international crises erodes American power and increases the risk of regional turbulence. Some commentary, however, was more approving of U.S. posturing. Developments in Kashmir in 2019 raise possible questions for Congress: Have India's actions changing the status of its J&K state negatively affect regional stability? If so, what leverage does the United States have and what U.S. policies might best address potential instability? Is there any diplomatic or other role for the U.S. government to play in managing India-Pakistan conflict or facilitating a renewal of their bilateral dialogue? To what extent does increased instability in Kashmir influence dynamics in Afghanistan? Will Islamabad's cooperation with Washington on Afghan reconciliation be reduced? To what extent, if any, are India's democratic/constitutional norms and pluralist traditions at risk in the country's current political climate? Are human rights abuses and threats to religious freedom increasing there? If so, should the U.S. government take any further actions to address such concerns?	Summary:	gov_report	1,024	null	28
crs_R45852	crs_R45852_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Three-dimensional (3D) printing is a manufacturing process used to create real-world parts from digital 3D design files. This process is of particular relevance to Congress because of its use in federal programs; economic potential; continued applications in scientific research and development; roles in national security; and potential areas of concern, including weapons development and intellectual property law. This report describes the basic parts common to 3D printers and explains the operation of the technology. It also provides a snapshot of current materials and capabilities, traces the historical development of the technology since 1980, provides information on the federal role in 3D printing, communicates the primary properties of 3D printing with reference to manufacturing, explains secondary manufacturing impacts that stem from these properties, and highlights particular issues relevant to Congress. 3D printing is sometimes known as additive manufacturing . The term additive refers to the construction of a final part through the addition of consecutive layers of material on a build plate. In contrast, subtractive manufacturing processes carve out a final part from an initial block by removing unwanted material. Computer-controlled additive and subtractive manufacturing originated in the 1980s and 1970s, respectively. Yet, the basic techniques underlying these manufacturing methodsâthat is, addition or removal of material to create a productâhave existed for millennia. 3D printing is used in a wide variety of applications, including aerospace, medicine, defense, custom manufacturing, prototyping, art, hobbies, and education (see Table 1 ). The prices, capabilities, and dimensions of 3D printers also vary widely. For more information, see " Current Materials and Capabilities " section below. Technical Overview In general, 3D printers have five common parts: input material, print head, build plate, axes, and 3D design file (see Figure 1 ). Input material â3D-printed parts begin as input material. This material can be in the form of solid filament, pellets, liquid, or powder. Print head âThe input material is deposited at the tip of the print head. This process can occur through a variety of methods, including pushing filament or pellets through a metal extruder, using a laser to melt powder, or using a light to solidify liquid. Build plate âThe build plate is the base (flat surface) upon which the part is constructed. At the beginning of the 3D printing process, the print head is nearly touching the build plate. As more layers are added to the part, the distance between the print head and the build plate increases. Axes âThe axes move the print head relative to the build plate. This enables the 3D printer to create a particular pattern for each new layer of material. The final part is made up of the patterns in each layer, stacked on top of each other. 3D design file âThe 3D printing process is governed by a digital 3D design file. This file provides instructions to the 3D printer that describe how to move the axes, which in turn move the position of the print head relative to the build plate. The file controls exactly what patterns are produced in each layer; this determines which kind of part is produced by the 3D printer (see Figure 2 ). Current Materials and Capabilities The prices and capabilities of 3D printers span a wide range of options. Prices vary from several hundred dollars to millions of dollars. More specifically, 3D printers at the price range of $5,000 and below (known as consumer printers ) often are designed to print plastic parts. Several different plastics are available, each with different capabilities and costs. These materials include tough nylon plastics; flexible, rubber-like plastics; plastics reinforced with carbon fiber; dissolvable plastics; clear plastics; and decorative plastics with the appearance of wood or metal. Some 3D printers in this price range can also print using materials such as ceramic or chocolate. Structural metal-infused plastic, as opposed to decorative metal-infused plastic, also can be used in 3D printers at this price range. However, structural metal-infused 3D-printed parts require additional high-temperature post-processing to burn off the plastic. This process leaves an entirely metal product behind. The necessary high temperatures for post-processing can be attained using pottery kilns, sintering machines, or other specialized devices. Commercial services are available that offer high-temperature post-processing of metal-infused 3D-printed parts. 3D printers at the price range of $5,000 and up (known as industrial printers) are able to use a wider variety of materials in an even greater variety of applications. These 3D printers can create structures that are larger, more detailed, or more reliable than structures created by consumer printers, or they can print in materials that are unavailable at lower price ranges. For example, medical biofabrication printers can print structures made of living cells. Metal 3D printers can create parts out of titanium, steel, and other metals, which may cost less than traditional subtractive machining processes. Large-format plastic 3D printers can create parts that are more than 6 feet tall. Some concrete 3D printers can manufacture the walls of an entire building. History The development and growth of 3D printing can be described in three major periods. The period spanning 1980 to 2010 marks the creation of the technology, its industrial use, and the beginning of the consumer 3D printing movement. Between 2010 and 2015, the 3D printing market continued to expand, despite signs of weakening in 2014. Since 2015, prices for consumer 3D printers have fallen, while sales of consumer and industrial 3D printers have continued to rise as the technology has matured. Early 3D Printing (1980-2010) The first major patents for 3D printing methods were filed in the 1980s, creating a nascent 3D printing market for industrial clients. In the 1990s, 3D printers using plastic, metal, paper, ceramic, and wax became available at prices from thousands of dollars to hundreds of thousands of dollars. In the early 2000s, the 3D printer market expanded into specialized industries, including medicine, dentistry, and jewelry. At the same time, new plastic printing materials were developed. The first decade of the 21 st century marked the expiration of several key 1980s 3D printing patents. In the same period, consumers gained access to improved web connectivity and user-friendly computer-aided design (CAD) tools. These factors contributed to the birth of the consumer 3D printing movement. Key developments in this movement included the formation of the open-source 3D printer community; the 2007 release of the first website for print-on-demand custom 3D prints (Shapeways); and the 2008 creation of the popular 3D printing file-sharing website Thingiverse. In 2009, MakerBot, one of the first consumer 3D printing companies, released a $750 3D printer that incorporated some of the off-patent technologies from the 1980s. Expansion of 3D Printing (2010-2015) The consumer market for 3D printers expanded in the 2010s, fueled in part by the continued expiration of 20 th -century patents. Offerings included branded 3D printers, unbranded kits sold on eBay, and 3D printers funded on crowdfunding sites. Prices of bare-bones consumer 3D printers fell to $500-$600. Higher-end consumer printers gained advanced features that made them easier to use and maintain. Innovations in 3D design software and improvements in printer reliability contributed to the spread of consumer and industrial 3D printers in shared makerspaces, commercial establishments, libraries, and universities. 3D file sharing also became widespread, both for paid and free models. One 3D file website, Thingiverse, had more than 2 million active users in 2015. Transmission of 3D design files occurred not only through mainstream file-sharing sites such as Thingiverse, 3DShook, and Cults but also through anonymous channels, including internet torrents (a distributed, hard-to-trace online file-sharing method). At the same time, materials for consumer and industrial 3D printers grew more diverse and were sold by more companies, helping to reduce 3D printing costs. Print-on-demand services also expanded in this period, offering a wide variety of materials, including plastics, precious metals, and ceramics. These services allowed consumers to purchase a 3D-printed part made from their own 3D design file but fabricated by a third party. Some of the early print-on-demand services offered the ability to purchase printing services from a peer-to-peer network of individually owned desktop 3D printers. The 3D printing industry began to show signs of weakening in 2014 after a period of growth and consolidation. In June 2015, Time magazine reported that the stocks of four leading 3D printing companies had "lost between 71% and 80% of their market value in the past 17 months." Between January and October 2015, the 3D printing company Stratasys laid off 36% of staff in its MakerBot division. At the same time, annual grants of 3D printing-related patents more than doubled between 2010 and 2015, from 247 to 545. In 2015, industrial unit sales of 3D printers declined by 2.3% while consumer unit sales increased by 49.4%. Unit sales of both industrial and consumer 3D printers generally have shown sustained upward trends (see Figure 3 and Figure 4 ). Total 3D printing industry revenues increased year-over-year since 1993, with the exception of 2001, 2002, and 2009. On average, 3D printing industry revenues have grown annually over the past 30 years by 26.9%. Recent 3D Printing History (2015-Present) The period from 2015 to 2019 has seen renewed 3D printing investment, in terms of both research and development and investment in growing companies. Corporations (such as General Electric, Google Ventures, Alcoa, and Norsk Titanium AS) and federal departments and agenciesâsuch as the Department of Defense (DOD) and the National Institutes of Health (NIH)âhave invested a combined total of hundreds of millions of dollars in 3D printing initiatives over this period. At the same time, the price of consumer 3D printers has continued to fall. As of July 2019, a basic 3D plastic printer can be purchased online for less than $150. 3D printers in the low hundred-dollar range generally can be used after simple assembly or directly out of the box. The input material for these basic 3D printers is usually a spool of plastic filament, which can be purchased for less than $9 per pound. Sales of both industrial and consumer 3D printers have continued to rise. According to one market analysis, 19,285 industrial 3D printers and 591,079 consumer 3D printers were sold in 2018 (see Figure 3 and Figure 4 ). Further, that analysis estimates that a total of more than 140,000 industrial 3D printers and 2 million consumer 3D printers have been sold worldwide. This may be an underestimation of consumer 3D printers, because it does not include those assembled from parts or those purchased as kits. 3D-print-on-demand services now serve the consumer and industrial markets. These services provide access to industrial-grade 3D printers, allowing users to create high-precision parts out of plastic or other materials. In general, individuals do not have to create their own files for 3D printing; many online databases of 3D design files are available. Users also may join online 3D printing communities, some of which have hundreds of thousands to millions of users. The Wohlers Report estimates that annual 3D printing industry revenues reached $9.975 billion globally in 2018. However, 3D printing makes up less than 1% of manufacturing revenues worldwide. Further, analysts predict that most future products will be created through traditional manufacturing methods, even when 3D printing is technologically mature. Some estimates predict that 3D printing will eventually account for 5%-10% of total global manufacturing revenues. Several issues may limit the overall effectiveness and utility of current 3D printing technologies, including quality control, cybersecurity, and relative production speed as compared to traditional manufacturing. New evaluation methods, certification programs, cybersecurity advances, and research and development programs may help to address these limiting issues. Federal Role in 3D Printing Private industry has long been the primary innovator in 3D printing technology, accounting for an estimated 90% of additive manufacturing patents through 2015. DOD's Institute for Defense Analysis (IDA) found that the federal government played a relatively small but instrumental role in the creation of 3D printing technology, providing "direct funding for developing early phases of the technology and later refinements in two of the four processes." According to IDA, [Federal] support of early research ... created the knowledge, technologies, and tools later adopted in the [additive manufacturing] field and applied by inventors to develop foundational AM patents and technologies. The knowledge generated from federally sponsored [research and development] from the early 1970s influenced the patents filed in the 1980s and 1990s and later innovations. Observations from the backwards citations analysis of the foundational patents show that some of the earliest investors in AM were the Department of Defense Office of Naval Research (ONR) and the Defense Advanced Research Projects Agency (DARPA), which provided steady, continual streams of funding for both academic and industry-based researchers. NSF support was also instrumental in the development of early relevant AM research in the 1970s. The IDA report further credited federal "support of knowledge diffusion from the foundational patents to improve the technologies and develop new applications." The report also noted that the National Science Foundation (NSF) participated in the development of four of six foundational 3D printing processes developed in the 1980s and 1990s. According to the 2015 report, NSF "provided almost 600 grants for [additive manufacturing] research and other activities over the past 25 years, amounting to more than $200 million (in 2005 dollars) in funding." In 2012, President Obama announced the establishment of the National Additive Manufacturing Innovation Institute (NAMII) in Youngstown, OH, as a pilot institute under the National Network of Manufacturing Innovation (NNMI, now referred to as Manufacturing USA). Under NAMII, the Departments of Defense, Energy, and Commerce; the National Science Foundation; the National Aeronautics and Space Administration (NASA); 40 companies; 9 research universities; 5 community colleges; and 11 nonprofit organizations collaborated to share resources, move basic research toward product development, and provide workforce education and training. The National Center for Defense Manufacturing and Machining was selected to manage the NAMII pilot institute through a competitive selection process. In 2013, NAMII was rebranded as America Makes. The Manufacturing USA program's four stated goals are to increase the competitiveness of U.S. manufacturing; facilitate the transition of innovative technologies into scalable, cost-effective, and high-performing domestic manufacturing capabilities; accelerate the development of an advanced manufacturing workforce; and support business models that help the Manufacturing USA institutes to become stable and sustainable after the initial federal startup funding period. The Government Accountability Office (GAO) estimates that America Makes was to receive $56 million in federal funding and $85 million in nonfederal funding from August 2012 to August 2019. As of December 2018, America Makes had 225 members. Many national laboratories use 3D printing, including Oak Ridge National Laboratory, Lawrence Livermore National Laboratory, Sandia National Laboratories, Los Alamos National Laboratory, and Fermi National Accelerator Laboratory. The U.S. government also purchases 3D-printed products in several capacities; a 2016 report by the General Services Administration (GSA) notes that the Department of Defense purchases an especially wide variety of 3D-printed parts for defensive and medical purposes. The GSA offers a specific procurement subcategory for federal purchases of 3D printing technology. The federal government is involved in the creation of 3D printing standards, as well. Among other initiatives, the U.S. Air Force granted a private U.S. company $6 million in 2016 to develop standards for 3D-printed rocket engines. This grant was intended to reduce U.S. reliance on foreign-made launch vehicle components. Similarly, the Federal Aviation Administration (FAA) is working with industry organizations to develop certification methods for 3D-printed parts. The FAA published a road map in September 2018 that "includes training and education, development of regulatory documents, Research and Development (R&D) plan and interagency communication." Further, the National Institute of Standards and Technology and the Food and Drug Administration operate several projects in pursuit of improved process qualification for 3D printing. At the same time, standards have been developed privately by Committee F42, a technical group formed in 2009 by ASTM International and the Society of Manufacturing Engineers. Manufacturing Impacts In some cases, 3D printing offers advantages when compared to traditional methods of manufacturing, such as injection molding, drilling, or welding. These benefits stem from the particular design of the technology (see " Technical Overview ") and have changed the national security, manufacturing, and economic landscapes. The following list of properties provides an overview of ways in which 3D printing deviates from previously established manufacturing technologies. Properties of 3D Printing Reduced waste â In general, the additive manufacturing process uses only the approximate amount of material needed to produce a product; subtractive manufacturing processes remove materials to produce a product, which inherently generates waste. Accordingly, less input material may be wasted in additive manufacturing. To the extent that some input material is wasted in 3D printing, that material can sometimes be recycled into new stock for use in making other 3D-printed parts. Capacity to create parts with high internal complexity â 3D-printed parts are constructed layer by layer, which means complex internal geometries (such as hidden cavities or small channels) can be constructed easily. Cost-effectiveness of small production runs â 3D printers do not require significant retooling when a new or modified part is manufactured. In contrast, manufacturing technologies such as injection molding or die casting incur significant retooling costs when a part design is modified. Ease of design modification â Digital 3D design files can be easily modified and transmitted. Associated Manufacturing Impacts Potential reduction in discrete parts per product â The high internal complexity of 3D-printed parts means that several distinct manufacturing processes (e.g., machining and welding) can often be integrated into a single 3D printing operation. This has supported manufacturing of parts that previously would have been impossible or prohibitively expensive. Single-piece construction can also result in parts that have fewer weak spots. Potential reduction in manufacturing costs â 3D printing provides an alternative for companies considering investments in machine tools. In some cases, 3D printing may be more cost-effective than traditional options; this is particularly true for short-run, custom, or complex parts. 3D printing may be less cost-effective for parts that would require fewer post-processing steps if manufactured using traditional methods. The smaller size of a 3D printer compared to traditional manufacturing equipment may also reduce required physical plant size and related costs. Improved prototyping abilities â Easy modification of design files, combined with the cost-effectiveness of short runs of parts, supports the ability to rapidly prototype parts using 3D printing. This rapid prototyping ability allows designs to be optimized and adjusted quickly. Potential reduction in part weight or improvement in part strengthâ The capacity to create complex internal structures using 3D printing has improved manufacturers' ability to create parts that are lighter or stronger. This has shown particular promise in the aerospace and automotive industries. Potential reduction in inventory â Large production runs usually are pursued in traditional manufacturing to minimize fixed costs per part. Often, many of the goods produced must be held in storage as inventory. The ability to create 3D-printed parts on demand may allow manufacturers to reduce their inventory of parts. Low set-up costs associated with additive manufacturing allow for smaller production runs, reducing the amount of capital tied up in inventory as well as overhead costs such as storage and insurance. Mass customization â 3D-printed parts may be individually customized on a large scale. Additive manufacturing allows for the production of unique parts, sometimes modified from a basic design, to suit the needs of individual consumers. Potential environmental efficiency â Reduced waste and the lack of a need for retooling 3D printers supports environmental efficiency in manufacturing. Energy costs also can be reduced by "re-manufacturing" parts using 3D printingâthat is, creating salable products by reconstructing worn-out areas of old parts, instead of manufacturing parts from entirely new input materials. Decentralized manufacturing â 3D printers can be used to develop parts in a decentralized capacity. This may reduce the time required to provide parts to consumers, as well as the cost, energy, and environmental impacts of shipping. Low barriers to entry â The comparatively low cost of 3D printing equipment may lower the barrier to entry to manufacturing. This may cause positive or negative impacts; although productivity in legal industry may increase, 3D printing also may be used to support manufacturing of contraband items, including light weapons or parts of nuclear weapons. Low barriers to entry also may create potential negative impacts for established businesses facing new competitors. Issues for Congress 3D printing is a relatively new approach to manufacturing, and the number of 3D printers in use has expanded greatly over the past 15 years. Some industry leaders and policymakers have expressed optimism about the potential of this technology to address certain manufacturing needs. 3D printing is seen as a tool for enabling cost-effective, customized, local production of parts, and in some cases, it allows for the production of parts that cannot be made using traditional manufacturing processes. 3D printing is also seen as enabling innovation and entrepreneurship by lowering the cost of entry into manufacturing. The federal government has played an important R&D role in the development and improvement of 3D printers. In addition, some agenciesâsuch as DOD, NASA, and NIHâare using 3D printing capabilities to accomplish their missions, such as by making or acquiring parts that are no longer available, custom parts, or prototypes for testing and evaluation. As 3D printing technology matures, Congress may face a variety of related issues. Among these issues are how much funding to provide for R&D on 3D printing technology and materials; how much funding to provide for education and training activities focused on preparing scientists, engineers, technicians, and others for careers related to 3D printing; whether federal acquisition strategies need to be modified to reflect the availability of 3D-printed parts; how to ensure that U.S. regulatory agencies can appropriately address 3D printing processes and products; and whether and how the federal government can facilitate the development of industry standards and systems for testing and certification of 3D printing. One of the federal government's flagship efforts focused on 3D printing is the America Makes manufacturing institute, the first institute established as part of the Manufacturing USA program. America Makes is a public-private partnership that seeks to "[accelerate] the adoption of additive manufacturing technologies in the United States to increase domestic manufacturing competitiveness." Some have raised concerns over the long-term sustainability of the Manufacturing USA institutes after their period of initial federal financial assistance, which extends for five to seven years. According to the GAO, the agency sponsors of the institutesâDepartment of Commerce, Department of Energy, and DODâ"have taken steps to support their institutes' sustainability planning but have not developed criteria to evaluate whether institutes are on track to sustain their operations beyond the initial period of federal financial assistance." Institute representatives have expressed concern that the institutes may seek or accept support from foreign corporations, potentially undermining the competitiveness goals of the institutes. Congress may monitor the progress of the America Makes institute toward sustainability and consider whether the federal government should provide continuing financial support. Current bills in the 116 th Congress related to this issue include H.R. 2397 . Some have expressed concern about the potential use of 3D printing in the manufacture of firearms or other contraband material by individual criminals, criminal organizations, terrorists, or others precluded from the possession of such devices. Congress may wish to consider approaches to limiting or preventing such uses of 3D printing. Current bills in the 116 th Congress related to this issue include S. 1831 and H.R. 3265 . 3D printing may raise intellectual property (IP) issues. For example, the U.S. Army has stated that IP difficulties may impede the fabrication of 3D-printed parts in the field. A 2014 industry survey also indicated that manufacturers consider the "threat to intellectual property" to be a major concern created by the proliferation of 3D printing. Congress may explore how IP issues could impede the legitimate use of 3D printing, particularly its use by the federal government, and what options may be available for addressing such barriers. Current bills in the 116 th Congress related to this issue include H.R. 3313 . Conclusion 3D printing is an alternative manufacturing process with particular strengths and weaknesses. Although the technology is not suitable for all types of manufacturing, it is used in a wide variety of industries, including aerospace, medicine, and custom manufacturing. 3D printing has remained in wide use by the federal government, as well. The technology is likely to grow in usage as new materials become available, material and machine costs continue to fall, and quality issues are addressed. The influences that 3D printing has on the U.S. manufacturing landscape stem from an improved capacity for relatively inexperienced users to create extremely complex parts. This may create regulatory, IP, or safety challenges. At the same time, the manufacturing abilities provided by 3D printers also promote economic development and new avenues of scientific and medical exploration. For these reasons, 3D printing is likely to offer both challenges and opportunities over the coming years. Summary:	null	96	27,939	27,941	27,941	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Three-dimensional (3D) printing is a manufacturing process used to create real-world parts from digital 3D design files. This process is of particular relevance to Congress because of its use in federal programs; economic potential; continued applications in scientific research and development; roles in national security; and potential areas of concern, including weapons development and intellectual property law. This report describes the basic parts common to 3D printers and explains the operation of the technology. It also provides a snapshot of current materials and capabilities, traces the historical development of the technology since 1980, provides information on the federal role in 3D printing, communicates the primary properties of 3D printing with reference to manufacturing, explains secondary manufacturing impacts that stem from these properties, and highlights particular issues relevant to Congress. 3D printing is sometimes known as additive manufacturing . The term additive refers to the construction of a final part through the addition of consecutive layers of material on a build plate. In contrast, subtractive manufacturing processes carve out a final part from an initial block by removing unwanted material. Computer-controlled additive and subtractive manufacturing originated in the 1980s and 1970s, respectively. Yet, the basic techniques underlying these manufacturing methodsâthat is, addition or removal of material to create a productâhave existed for millennia. 3D printing is used in a wide variety of applications, including aerospace, medicine, defense, custom manufacturing, prototyping, art, hobbies, and education (see Table 1 ). The prices, capabilities, and dimensions of 3D printers also vary widely. For more information, see " Current Materials and Capabilities " section below. Technical Overview In general, 3D printers have five common parts: input material, print head, build plate, axes, and 3D design file (see Figure 1 ). Input material â3D-printed parts begin as input material. This material can be in the form of solid filament, pellets, liquid, or powder. Print head âThe input material is deposited at the tip of the print head. This process can occur through a variety of methods, including pushing filament or pellets through a metal extruder, using a laser to melt powder, or using a light to solidify liquid. Build plate âThe build plate is the base (flat surface) upon which the part is constructed. At the beginning of the 3D printing process, the print head is nearly touching the build plate. As more layers are added to the part, the distance between the print head and the build plate increases. Axes âThe axes move the print head relative to the build plate. This enables the 3D printer to create a particular pattern for each new layer of material. The final part is made up of the patterns in each layer, stacked on top of each other. 3D design file âThe 3D printing process is governed by a digital 3D design file. This file provides instructions to the 3D printer that describe how to move the axes, which in turn move the position of the print head relative to the build plate. The file controls exactly what patterns are produced in each layer; this determines which kind of part is produced by the 3D printer (see Figure 2 ). Current Materials and Capabilities The prices and capabilities of 3D printers span a wide range of options. Prices vary from several hundred dollars to millions of dollars. More specifically, 3D printers at the price range of $5,000 and below (known as consumer printers ) often are designed to print plastic parts. Several different plastics are available, each with different capabilities and costs. These materials include tough nylon plastics; flexible, rubber-like plastics; plastics reinforced with carbon fiber; dissolvable plastics; clear plastics; and decorative plastics with the appearance of wood or metal. Some 3D printers in this price range can also print using materials such as ceramic or chocolate. Structural metal-infused plastic, as opposed to decorative metal-infused plastic, also can be used in 3D printers at this price range. However, structural metal-infused 3D-printed parts require additional high-temperature post-processing to burn off the plastic. This process leaves an entirely metal product behind. The necessary high temperatures for post-processing can be attained using pottery kilns, sintering machines, or other specialized devices. Commercial services are available that offer high-temperature post-processing of metal-infused 3D-printed parts. 3D printers at the price range of $5,000 and up (known as industrial printers) are able to use a wider variety of materials in an even greater variety of applications. These 3D printers can create structures that are larger, more detailed, or more reliable than structures created by consumer printers, or they can print in materials that are unavailable at lower price ranges. For example, medical biofabrication printers can print structures made of living cells. Metal 3D printers can create parts out of titanium, steel, and other metals, which may cost less than traditional subtractive machining processes. Large-format plastic 3D printers can create parts that are more than 6 feet tall. Some concrete 3D printers can manufacture the walls of an entire building. History The development and growth of 3D printing can be described in three major periods. The period spanning 1980 to 2010 marks the creation of the technology, its industrial use, and the beginning of the consumer 3D printing movement. Between 2010 and 2015, the 3D printing market continued to expand, despite signs of weakening in 2014. Since 2015, prices for consumer 3D printers have fallen, while sales of consumer and industrial 3D printers have continued to rise as the technology has matured. Early 3D Printing (1980-2010) The first major patents for 3D printing methods were filed in the 1980s, creating a nascent 3D printing market for industrial clients. In the 1990s, 3D printers using plastic, metal, paper, ceramic, and wax became available at prices from thousands of dollars to hundreds of thousands of dollars. In the early 2000s, the 3D printer market expanded into specialized industries, including medicine, dentistry, and jewelry. At the same time, new plastic printing materials were developed. The first decade of the 21 st century marked the expiration of several key 1980s 3D printing patents. In the same period, consumers gained access to improved web connectivity and user-friendly computer-aided design (CAD) tools. These factors contributed to the birth of the consumer 3D printing movement. Key developments in this movement included the formation of the open-source 3D printer community; the 2007 release of the first website for print-on-demand custom 3D prints (Shapeways); and the 2008 creation of the popular 3D printing file-sharing website Thingiverse. In 2009, MakerBot, one of the first consumer 3D printing companies, released a $750 3D printer that incorporated some of the off-patent technologies from the 1980s. Expansion of 3D Printing (2010-2015) The consumer market for 3D printers expanded in the 2010s, fueled in part by the continued expiration of 20 th -century patents. Offerings included branded 3D printers, unbranded kits sold on eBay, and 3D printers funded on crowdfunding sites. Prices of bare-bones consumer 3D printers fell to $500-$600. Higher-end consumer printers gained advanced features that made them easier to use and maintain. Innovations in 3D design software and improvements in printer reliability contributed to the spread of consumer and industrial 3D printers in shared makerspaces, commercial establishments, libraries, and universities. 3D file sharing also became widespread, both for paid and free models. One 3D file website, Thingiverse, had more than 2 million active users in 2015. Transmission of 3D design files occurred not only through mainstream file-sharing sites such as Thingiverse, 3DShook, and Cults but also through anonymous channels, including internet torrents (a distributed, hard-to-trace online file-sharing method). At the same time, materials for consumer and industrial 3D printers grew more diverse and were sold by more companies, helping to reduce 3D printing costs. Print-on-demand services also expanded in this period, offering a wide variety of materials, including plastics, precious metals, and ceramics. These services allowed consumers to purchase a 3D-printed part made from their own 3D design file but fabricated by a third party. Some of the early print-on-demand services offered the ability to purchase printing services from a peer-to-peer network of individually owned desktop 3D printers. The 3D printing industry began to show signs of weakening in 2014 after a period of growth and consolidation. In June 2015, Time magazine reported that the stocks of four leading 3D printing companies had "lost between 71% and 80% of their market value in the past 17 months." Between January and October 2015, the 3D printing company Stratasys laid off 36% of staff in its MakerBot division. At the same time, annual grants of 3D printing-related patents more than doubled between 2010 and 2015, from 247 to 545. In 2015, industrial unit sales of 3D printers declined by 2.3% while consumer unit sales increased by 49.4%. Unit sales of both industrial and consumer 3D printers generally have shown sustained upward trends (see Figure 3 and Figure 4 ). Total 3D printing industry revenues increased year-over-year since 1993, with the exception of 2001, 2002, and 2009. On average, 3D printing industry revenues have grown annually over the past 30 years by 26.9%. Recent 3D Printing History (2015-Present) The period from 2015 to 2019 has seen renewed 3D printing investment, in terms of both research and development and investment in growing companies. Corporations (such as General Electric, Google Ventures, Alcoa, and Norsk Titanium AS) and federal departments and agenciesâsuch as the Department of Defense (DOD) and the National Institutes of Health (NIH)âhave invested a combined total of hundreds of millions of dollars in 3D printing initiatives over this period. At the same time, the price of consumer 3D printers has continued to fall. As of July 2019, a basic 3D plastic printer can be purchased online for less than $150. 3D printers in the low hundred-dollar range generally can be used after simple assembly or directly out of the box. The input material for these basic 3D printers is usually a spool of plastic filament, which can be purchased for less than $9 per pound. Sales of both industrial and consumer 3D printers have continued to rise. According to one market analysis, 19,285 industrial 3D printers and 591,079 consumer 3D printers were sold in 2018 (see Figure 3 and Figure 4 ). Further, that analysis estimates that a total of more than 140,000 industrial 3D printers and 2 million consumer 3D printers have been sold worldwide. This may be an underestimation of consumer 3D printers, because it does not include those assembled from parts or those purchased as kits. 3D-print-on-demand services now serve the consumer and industrial markets. These services provide access to industrial-grade 3D printers, allowing users to create high-precision parts out of plastic or other materials. In general, individuals do not have to create their own files for 3D printing; many online databases of 3D design files are available. Users also may join online 3D printing communities, some of which have hundreds of thousands to millions of users. The Wohlers Report estimates that annual 3D printing industry revenues reached $9.975 billion globally in 2018. However, 3D printing makes up less than 1% of manufacturing revenues worldwide. Further, analysts predict that most future products will be created through traditional manufacturing methods, even when 3D printing is technologically mature. Some estimates predict that 3D printing will eventually account for 5%-10% of total global manufacturing revenues. Several issues may limit the overall effectiveness and utility of current 3D printing technologies, including quality control, cybersecurity, and relative production speed as compared to traditional manufacturing. New evaluation methods, certification programs, cybersecurity advances, and research and development programs may help to address these limiting issues. Federal Role in 3D Printing Private industry has long been the primary innovator in 3D printing technology, accounting for an estimated 90% of additive manufacturing patents through 2015. DOD's Institute for Defense Analysis (IDA) found that the federal government played a relatively small but instrumental role in the creation of 3D printing technology, providing "direct funding for developing early phases of the technology and later refinements in two of the four processes." According to IDA, [Federal] support of early research ... created the knowledge, technologies, and tools later adopted in the [additive manufacturing] field and applied by inventors to develop foundational AM patents and technologies. The knowledge generated from federally sponsored [research and development] from the early 1970s influenced the patents filed in the 1980s and 1990s and later innovations. Observations from the backwards citations analysis of the foundational patents show that some of the earliest investors in AM were the Department of Defense Office of Naval Research (ONR) and the Defense Advanced Research Projects Agency (DARPA), which provided steady, continual streams of funding for both academic and industry-based researchers. NSF support was also instrumental in the development of early relevant AM research in the 1970s. The IDA report further credited federal "support of knowledge diffusion from the foundational patents to improve the technologies and develop new applications." The report also noted that the National Science Foundation (NSF) participated in the development of four of six foundational 3D printing processes developed in the 1980s and 1990s. According to the 2015 report, NSF "provided almost 600 grants for [additive manufacturing] research and other activities over the past 25 years, amounting to more than $200 million (in 2005 dollars) in funding." In 2012, President Obama announced the establishment of the National Additive Manufacturing Innovation Institute (NAMII) in Youngstown, OH, as a pilot institute under the National Network of Manufacturing Innovation (NNMI, now referred to as Manufacturing USA). Under NAMII, the Departments of Defense, Energy, and Commerce; the National Science Foundation; the National Aeronautics and Space Administration (NASA); 40 companies; 9 research universities; 5 community colleges; and 11 nonprofit organizations collaborated to share resources, move basic research toward product development, and provide workforce education and training. The National Center for Defense Manufacturing and Machining was selected to manage the NAMII pilot institute through a competitive selection process. In 2013, NAMII was rebranded as America Makes. The Manufacturing USA program's four stated goals are to increase the competitiveness of U.S. manufacturing; facilitate the transition of innovative technologies into scalable, cost-effective, and high-performing domestic manufacturing capabilities; accelerate the development of an advanced manufacturing workforce; and support business models that help the Manufacturing USA institutes to become stable and sustainable after the initial federal startup funding period. The Government Accountability Office (GAO) estimates that America Makes was to receive $56 million in federal funding and $85 million in nonfederal funding from August 2012 to August 2019. As of December 2018, America Makes had 225 members. Many national laboratories use 3D printing, including Oak Ridge National Laboratory, Lawrence Livermore National Laboratory, Sandia National Laboratories, Los Alamos National Laboratory, and Fermi National Accelerator Laboratory. The U.S. government also purchases 3D-printed products in several capacities; a 2016 report by the General Services Administration (GSA) notes that the Department of Defense purchases an especially wide variety of 3D-printed parts for defensive and medical purposes. The GSA offers a specific procurement subcategory for federal purchases of 3D printing technology. The federal government is involved in the creation of 3D printing standards, as well. Among other initiatives, the U.S. Air Force granted a private U.S. company $6 million in 2016 to develop standards for 3D-printed rocket engines. This grant was intended to reduce U.S. reliance on foreign-made launch vehicle components. Similarly, the Federal Aviation Administration (FAA) is working with industry organizations to develop certification methods for 3D-printed parts. The FAA published a road map in September 2018 that "includes training and education, development of regulatory documents, Research and Development (R&D) plan and interagency communication." Further, the National Institute of Standards and Technology and the Food and Drug Administration operate several projects in pursuit of improved process qualification for 3D printing. At the same time, standards have been developed privately by Committee F42, a technical group formed in 2009 by ASTM International and the Society of Manufacturing Engineers. Manufacturing Impacts In some cases, 3D printing offers advantages when compared to traditional methods of manufacturing, such as injection molding, drilling, or welding. These benefits stem from the particular design of the technology (see " Technical Overview ") and have changed the national security, manufacturing, and economic landscapes. The following list of properties provides an overview of ways in which 3D printing deviates from previously established manufacturing technologies. Properties of 3D Printing Reduced waste â In general, the additive manufacturing process uses only the approximate amount of material needed to produce a product; subtractive manufacturing processes remove materials to produce a product, which inherently generates waste. Accordingly, less input material may be wasted in additive manufacturing. To the extent that some input material is wasted in 3D printing, that material can sometimes be recycled into new stock for use in making other 3D-printed parts. Capacity to create parts with high internal complexity â 3D-printed parts are constructed layer by layer, which means complex internal geometries (such as hidden cavities or small channels) can be constructed easily. Cost-effectiveness of small production runs â 3D printers do not require significant retooling when a new or modified part is manufactured. In contrast, manufacturing technologies such as injection molding or die casting incur significant retooling costs when a part design is modified. Ease of design modification â Digital 3D design files can be easily modified and transmitted. Associated Manufacturing Impacts Potential reduction in discrete parts per product â The high internal complexity of 3D-printed parts means that several distinct manufacturing processes (e.g., machining and welding) can often be integrated into a single 3D printing operation. This has supported manufacturing of parts that previously would have been impossible or prohibitively expensive. Single-piece construction can also result in parts that have fewer weak spots. Potential reduction in manufacturing costs â 3D printing provides an alternative for companies considering investments in machine tools. In some cases, 3D printing may be more cost-effective than traditional options; this is particularly true for short-run, custom, or complex parts. 3D printing may be less cost-effective for parts that would require fewer post-processing steps if manufactured using traditional methods. The smaller size of a 3D printer compared to traditional manufacturing equipment may also reduce required physical plant size and related costs. Improved prototyping abilities â Easy modification of design files, combined with the cost-effectiveness of short runs of parts, supports the ability to rapidly prototype parts using 3D printing. This rapid prototyping ability allows designs to be optimized and adjusted quickly. Potential reduction in part weight or improvement in part strengthâ The capacity to create complex internal structures using 3D printing has improved manufacturers' ability to create parts that are lighter or stronger. This has shown particular promise in the aerospace and automotive industries. Potential reduction in inventory â Large production runs usually are pursued in traditional manufacturing to minimize fixed costs per part. Often, many of the goods produced must be held in storage as inventory. The ability to create 3D-printed parts on demand may allow manufacturers to reduce their inventory of parts. Low set-up costs associated with additive manufacturing allow for smaller production runs, reducing the amount of capital tied up in inventory as well as overhead costs such as storage and insurance. Mass customization â 3D-printed parts may be individually customized on a large scale. Additive manufacturing allows for the production of unique parts, sometimes modified from a basic design, to suit the needs of individual consumers. Potential environmental efficiency â Reduced waste and the lack of a need for retooling 3D printers supports environmental efficiency in manufacturing. Energy costs also can be reduced by "re-manufacturing" parts using 3D printingâthat is, creating salable products by reconstructing worn-out areas of old parts, instead of manufacturing parts from entirely new input materials. Decentralized manufacturing â 3D printers can be used to develop parts in a decentralized capacity. This may reduce the time required to provide parts to consumers, as well as the cost, energy, and environmental impacts of shipping. Low barriers to entry â The comparatively low cost of 3D printing equipment may lower the barrier to entry to manufacturing. This may cause positive or negative impacts; although productivity in legal industry may increase, 3D printing also may be used to support manufacturing of contraband items, including light weapons or parts of nuclear weapons. Low barriers to entry also may create potential negative impacts for established businesses facing new competitors. Issues for Congress 3D printing is a relatively new approach to manufacturing, and the number of 3D printers in use has expanded greatly over the past 15 years. Some industry leaders and policymakers have expressed optimism about the potential of this technology to address certain manufacturing needs. 3D printing is seen as a tool for enabling cost-effective, customized, local production of parts, and in some cases, it allows for the production of parts that cannot be made using traditional manufacturing processes. 3D printing is also seen as enabling innovation and entrepreneurship by lowering the cost of entry into manufacturing. The federal government has played an important R&D role in the development and improvement of 3D printers. In addition, some agenciesâsuch as DOD, NASA, and NIHâare using 3D printing capabilities to accomplish their missions, such as by making or acquiring parts that are no longer available, custom parts, or prototypes for testing and evaluation. As 3D printing technology matures, Congress may face a variety of related issues. Among these issues are how much funding to provide for R&D on 3D printing technology and materials; how much funding to provide for education and training activities focused on preparing scientists, engineers, technicians, and others for careers related to 3D printing; whether federal acquisition strategies need to be modified to reflect the availability of 3D-printed parts; how to ensure that U.S. regulatory agencies can appropriately address 3D printing processes and products; and whether and how the federal government can facilitate the development of industry standards and systems for testing and certification of 3D printing. One of the federal government's flagship efforts focused on 3D printing is the America Makes manufacturing institute, the first institute established as part of the Manufacturing USA program. America Makes is a public-private partnership that seeks to "[accelerate] the adoption of additive manufacturing technologies in the United States to increase domestic manufacturing competitiveness." Some have raised concerns over the long-term sustainability of the Manufacturing USA institutes after their period of initial federal financial assistance, which extends for five to seven years. According to the GAO, the agency sponsors of the institutesâDepartment of Commerce, Department of Energy, and DODâ"have taken steps to support their institutes' sustainability planning but have not developed criteria to evaluate whether institutes are on track to sustain their operations beyond the initial period of federal financial assistance." Institute representatives have expressed concern that the institutes may seek or accept support from foreign corporations, potentially undermining the competitiveness goals of the institutes. Congress may monitor the progress of the America Makes institute toward sustainability and consider whether the federal government should provide continuing financial support. Current bills in the 116 th Congress related to this issue include H.R. 2397 . Some have expressed concern about the potential use of 3D printing in the manufacture of firearms or other contraband material by individual criminals, criminal organizations, terrorists, or others precluded from the possession of such devices. Congress may wish to consider approaches to limiting or preventing such uses of 3D printing. Current bills in the 116 th Congress related to this issue include S. 1831 and H.R. 3265 . 3D printing may raise intellectual property (IP) issues. For example, the U.S. Army has stated that IP difficulties may impede the fabrication of 3D-printed parts in the field. A 2014 industry survey also indicated that manufacturers consider the "threat to intellectual property" to be a major concern created by the proliferation of 3D printing. Congress may explore how IP issues could impede the legitimate use of 3D printing, particularly its use by the federal government, and what options may be available for addressing such barriers. Current bills in the 116 th Congress related to this issue include H.R. 3313 . Conclusion 3D printing is an alternative manufacturing process with particular strengths and weaknesses. Although the technology is not suitable for all types of manufacturing, it is used in a wide variety of industries, including aerospace, medicine, and custom manufacturing. 3D printing has remained in wide use by the federal government, as well. The technology is likely to grow in usage as new materials become available, material and machine costs continue to fall, and quality issues are addressed. The influences that 3D printing has on the U.S. manufacturing landscape stem from an improved capacity for relatively inexperienced users to create extremely complex parts. This may create regulatory, IP, or safety challenges. At the same time, the manufacturing abilities provided by 3D printers also promote economic development and new avenues of scientific and medical exploration. For these reasons, 3D printing is likely to offer both challenges and opportunities over the coming years.	Summary:	gov_report	1,024	null	29
crs_R46260	crs_R46260_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction to the Payments in Lieu of Taxes (PILT) Program The Payments in Lieu of Taxes (PILT) program provides compensation for certain entitlement lands that are exempt from state and local taxes. These lands include selected federal lands administered by the Bureau of Land Management, the National Park Service, and the U.S. Fish and Wildlife Service, all in the Department of the Interior (DOI); lands administered by the U.S. Forest Service in the Department of Agriculture; federal water projects; dredge disposal areas; and some military installations. Enacted in 1976, PILT is the broadestâin terms of federal land types coveredâof several federal programs enacted to provide compensation to state or local governments for the presence of tax-exempt federal lands within their jurisdictions. PILT was enacted in response to a shift in federal policy from one that prioritized disposal of federal landsâone in which federal ownership was considered to be temporaryâto one that prioritized retention of federal lands, in perpetuity, for public benefit. This shift began in the late 19 th century and continued into the 20 th century. Along with this shift came the understanding that, because these lands were exempt from state and local taxation and were no longer likely to return to the tax base in the foreseeable future, some compensation should be provided to the impacted local governments. Following several decades of commissions, studies, and proposed legislation, Congress passed PILT to at least partially ameliorate this hardship. PILT payments generally can be used for "any governmental purpose," which could include assisting local governments with paying for local services, such as "firefighting and police protection, construction of public schools and roads, and search-and-rescue operations." The Office of the Secretary in DOI is responsible for the calculation and disbursement of payments under PILT. Payments under PILT are made annually to units of general local governmentâtypically counties, though other types of governmental units also may be used (hereinafter, counties refers to units of general local government)âcontaining entitlement lands . PILT comprises three separate payment mechanisms: Section 6902, Section 6904, and Section 6905 payments, all named for the sections of law in which they are authorized. Section 6902 payments account for nearly all payments made through PILT. The Section 6902 authorized payment amount for each county is calculated according to a statutory formula that is subject to a maximum payment based on the county's population (see " PILT Payments Under Section 6902 "). The remaining payments are provided through Section 6904 and Section 6905 under selected circumstances and typically are limited in duration. Through FY2019, PILT payments have totaled approximately $9.2 billion (in current dollars). Members of Congress routinely consider amending PILT within both appropriations and authorizing legislation. For example, legislation in the 116 th Congress would amend how PILT appropriations are provided and would change how payments are calculated under Section 6902. In addition, Members of Congress may address issues related to which federal lands should be eligible for payments under PILT. This report provides an overview of the PILT payment program and includes sections on PILT's authorization and appropriations, which discusses the history of how Congress has provided funding for PILT; Section 6902 payments, which includes a breakdown of how Section 6902 payments are calculated; Section 6904 and Section 6905 payments, which outlines what situations result in payments under these mechanisms; and issues for Congress, which discusses several topics that have been or may be of interest to Members of Congress when considering the future of PILT. PILT Authorizations and Appropriations Congress has funded PILT through both discretionary and mandatory appropriations at various times since the program was first authorized. Some stakeholders and policymakers have routinely expressed concern about changes in the appropriations source, both the process of switching between mandatory and discretionary appropriations and the uncertainty that may accompany such changes. From 1982 to 2008, Section 6906 provided an "Authorization of Appropriations" for PILT, which stated, "Necessary amounts may be appropriated to the Secretary of the Interior to carry out [PILT]." Further, it clarified that "amounts are available only as provided in appropriation laws." Congress amended this language in 2008 and changed the section title from "Authorization of Appropriations" to "Funding." Further, Congress changed the text to read For each of fiscal years 2008 through 2012- (1) each county or other eligible unit of local government shall be entitled to payment under this chapter; and (2) sums shall be made available to the Secretary of the Interior for obligation or expenditure in accordance with this chapter. This amendment effectively changed PILT funding from being discretionary to being mandatory for the years specified (see Table 1 for PILT funding since FY2005). Since 2008, Congress has amended Section 6906 several times by changing the fiscal year in the first line through both annual discretionary appropriations laws and other legislative vehicles ( Table 1 ). PILT was funded through discretionary appropriations from its enactment through FY2007. Since FY2008, Congress has provided funding for PILT through both discretionary and mandatory appropriations ( Table 1 ). From FY2008 through FY2014, Congress authorized mandatory funding for PILT through several laws . Since FY2015, funding has been provided, at least partially, through the annual appropriations process. In FY2015, PILT received both discretionary and mandatory appropriations. For FY2016 through FY2020, Congress funded PILT through the annual appropriations process. In FY2016 and FY2017, the appropriations laws provided specific funding levels for PILT, which was treated as discretionary spending. In FY2018, FY2019, and FY2020, the appropriations laws provided funding for PILT by amending the authority provided in 31 U.S.C. Â§6906, which was treated as mandatory spending. In each of these three years, funding was provided for PILT at the full statutory calculation levels. Since FY2008, Congress has provided funding for PILT through both one-year and multiyear appropriations. Congress's actions have resulted in full funding and partial funding in different years ( Table 1 and Figure 1 ). These types of changes from year to year may have implications for counties that rely on PILT funding as part of their annual budgets. In addition to appropriating funding for the program, Congress routinely provides other guidance on PILT within the annual appropriations process, such as minimum payment thresholds, set-asides for program administration, and provisions for prorating payments. When appropriated funding is insufficient to cover the full amount for authorized payments under Sections 6902, 6904, and 6905, counties typically receive a proportional payment known as a prorated payment ( Figure 1 shows the disparity between the authorized amount and the appropriated amount in recent years). Even in years in which appropriations are set equal to 100% of the full statutory calculation, payments to counties may be prorated if funding is set aside for purposes other than payments, such as administration. PILT Payments Under Section 6902 Section 6902 payments are provided to units of local government jurisdictions (referred to as counties in this report) across the United States to compensate for the presence of entitlement lands within their boundaries. Section 6902 payments also are provided to the District of Columbia, Guam, Puerto Rico, and the Virgin Islands. Section 6902 payments account for nearly all of the payments made under PILT. In FY2019, 99.85% of all PILT payments were made through Section 6902. Further, more counties are eligible for Section 6902 payments than either Section 6904 or Section 6905 payments. In FY2019, of the 1,931 counties that received PILT payments, 1,927 received payments under Section 6902, and 134 received payments under Section 6904 and/or Section 6905 (130 counties received payments under both Section 6902 and Section 6904 and/or Section 6905). Entitlement Lands There are nine categories of federal lands identified as entitlement lands in the PILT statute. 1. Lands in the National Park System 2. Lands in the National Forest System 3. Lands administered by the Bureau of Land Management (BLM) 4. Lands in the National Wildlife Refuge System (NWRS) that are withdrawn from the public domain 5. Lands dedicated to the use of federal water resources development projects 6. Dredge disposal areas under the jurisdiction of the U.S. Army Corps of Engineers 7. Lands located in the vicinity of Purgatory River Canyon and PiÃ±on Canyon, CO, that were acquired after December 31, 1981, to expand the Fort Carson military reservation 8. Lands on which are located semi-active or inactive Army installations used for mobilization and for reserve component training 9. Certain lands acquired by DOI or the Department of Agriculture under the Southern Nevada Public Land Management Act ( P.L. 105-263 ) Of these categories, the first three (National Park System, National Forest System, and lands administered by BLM) largely account for all of the lands managed by the relevant agencies. The remaining categories are either lands tied to specific laws or actions (categories 7 and 9, above) or lands that represent a subset of the lands administered by a particular agency. For example, entitlement lands that are included within the NWRS (category 4) only account for lands within the system that have been withdrawn from the public domain, which excludes lands that have been purchased as additions to the NWRS. Further, lands administered by the U.S. Fish and Wildlife Service that are not included in the NWRS are not included within the definition of entitlement lands. Similarly, lands in the other categories (5, 6, and 8, above) may not include all, or even the majority of, lands administered by particular agencies or departments. Calculating Section 6902 Payments Section 6902 payments are determined based on a multipart formula (see Figure 2 ). The DOI Office of the Secretary calculates PILT payments according to several factors, including the number of entitlement acres; a per-acre calculation determined by one of two alternatives (Alternative A, also called the standard rate , or Alternative B, also called the minimum provision ); a population-based maximum payment (ceiling); certain prior-year payments pursuant to other compensation programs; and the amount available to cover PILT payments. To calculate a particular county's PILT payment, the DOI Office of the Secretary first must collect data from several federal agencies and the county's state to answer the following questions: How many acres of eligible lands are in the county? What is the population of the county? What was the increase in the Consumer Price Index for the 12 months ending the preceding June 30? What were the prior year's payments, if any, for the county under the other payment programs of federal agencies? Does the state have any laws requiring the payments from other federal land payment laws to be passed through to other local government entities, such as school districts, rather than stay with the county government? The first step in calculating a county's Section 6902 payment is to determine the number of entitlement acres within the county ( Figure 2 , Box A). The next step is to calculate the population-based ceiling by multiplying the county's population by the population payment rate ( Figure 2 , Box B). County population data are provided by the U.S. Census Bureau. For this calculation, counties with different populations are treated differently ( Figure 3 ): For counties with populations smaller than 5,000, a county's actual population is used in the calculation . For counties with populations larger than 5,000, a county's population is rounded to the nearest 1,000, and this rounded population is used in the calculation. All counties with populations greater than 50,000, regardless of their actual populations, are considered to have a population equal to 50,000 for the purposes of calculating the ceiling. The population payment rate generally declines as population increases in 1,000 person increments (per statute), although the population-based ceiling generally increases ( Figure 4 ). However, this is not always the case. For example, in FY2019, payment rates for several populations are the same despite increasing populations, such as the rates for populations of 26,000; 27,000; and 28,000, which are all $94.98. Further, some payment ceilings do not increase with increasing populations. For example, counties with populations of 50,000 have a lower ceiling than those with populations of 49,000 (49,000 Ã $76.33 = $3,740,170; and 50,000 Ã $74.63 = $3,731,500, or $8,670 less for the more populous county). The population payment rate is adjusted annually for inflation based on the change in the Consumer Price Index for the 12 months ending on the preceding June 30. For FY2019, the population payment rates ranged from $186.56 per person for counties with populations of 5,000 or fewer to $74.63 per person for counties with populations of 50,000 or greater. The next step is to calculate the payment level under alternatives A and B ( Figure 2 , Box C). Alternative A has a higher per-acre payment rate than Alternative B, but Alternative A is subject to a deduction for prior-year payments. Prior-year payments are those payments from the federal payment programs listed in statute: the Act of June 20, 1910 (ch. 310, 36 Stat. 557); Section 33 of the Bankhead-Jones Farm Tenant Act (7 U.S.C. Â§1012); the Act of May 23, 1908 (16 U.S.C. Â§500), or the Secure Rural Schools and Community Self-Determination Act of 2000 (16 U.S.C. Â§Â§7101 et seq.); Section 5 of the Act of June 22, 1948 (16 U.S.C. Â§Â§577g-577gâ1); Section 401(c)(2) of the Act of June 15, 1935 (16 U.S.C. Â§715s(c)(2)); Section 17 of the Federal Power Act (16 U.S.C. Â§810); Section 35 of the Act of February 25, 1920 (30 U.S.C. Â§191); Section 6 of the Mineral Leasing Act for Acquired Lands (30 U.S.C. Â§355); Section 3 of the Act of July 31, 1947 (30 U.S.C. Â§603); and Section 10 of the Act of June 28, 1934 (known as the Taylor Grazing Act) (43 U.S.C. Â§315i). However, if a state has a pass - through law that requires some or all of these prior-year payments to be paid directly to a sub-county recipient (e.g., a school district), these payments are not deducted from subsequent PILT payments in the following year. Alternative B is calculated using a lower per-acre payment rate, but prior-year payments are not deducted. For FY2019, the per-acre payment rates were $2.77 per acre of entitlement land for Alternative A and $0.39 per acre of entitlement land for Alternative B. If the per-acre payment (number of acres multiplied by the per-acre payment rate) calculated under either alternative is greater than the population-based ceiling, then the population-based ceiling replaces the calculated amount. Once each alternative is calculated, the greater of the two is the Section 6902 authorized payment for the county ( Figure 2 , Box D). The Section 6902 authorized payments are calculated for every county, and this amount is added to the Section 6904 and Section 6905 authorized payments (for more information on Sections 6904 and 6905, see " PILT Payments Under Sections 6904 and 6905 "). This summed amount is the full statutory calculation for a given fiscal year ( Figure 2 , Box E). DOI compares the full statutory calculation with the amount appropriated and available for PILT payments to determine whether Congress has provided adequate funding to cover the full statutory calculation ( Figure 2 , Box F). If sufficient funding is available, each county receives its authorized amount; if funding is insufficient, each county receives a prorated payment that is proportional to its authorized payment ( Figure 2 , Box G). The full statutory calculation and the amount available for PILT payments determine proration. Although there are additional adjustments made in the PILT proration calculation resulting from small idiosyncrasies related to the requirements for PILT paymentsânamely, the requirement of a minimum threshold of $100 for PILT payments âthe proration is fundamentally the ratio of the appropriated funding available for PILT payments to the full statutory calculation: As a result, counties may receive less than their authorized PILT payment in years when appropriated funding is insufficient to cover the full statutory calculation. This scenario can occur even when total PILT appropriations match the full statutory calculation; this has been the case in years with mandatory appropriations, when part of the appropriated amount is set aside for a use other than county payments. For example, laws providing appropriations for PILT routinely have allowed DOI to retain a small portion of PILT appropriations for administrative expenses. PILT Payments Under Sections 6904 and 6905 Section 6904 and Section 6905 payments account for a small fraction of total PILT payments. In FY2019, these payments were made to 134 counties and accounted for 0.15% of PILT payments ($750,605 of $514.7 million in total payments made). Once a county receives Section 6904 and Section 6905 payments, it is to disburse payments to governmental units and school districts within the county in proportion to the amount of property taxes lost because of the federal ownership of the entitled lands, as enumerated under these sections. County units and school districts may use these payments for any governmental purpose. Section 6904 Payments Section 6904 authorizes the Secretary of the Interior to make payments to counties that contain certain lands, or interests in lands, that are part of the National Park System and National Forest Wilderness Areas. However, Section 6904 specifies that these lands, or interests, are eligible only if (1) they have been acquired by the U.S. government for addition to these systems and (2) they were subject to local property taxes in the five-year period prior to this acquisition. Payment under Section 6904 is calculated as 1% of the fair market value of the land at the time it was acquired, not to exceed the amount of property taxes levied on the property during the fiscal year prior to its acquisition. Further, Section 6904 payments are made annually only for the five fiscal years after the land, or interest, is acquired by the U.S. government, unless otherwise mandated by law. Section 6905 Payments Section 6905 authorizes the Secretary of the Interior to make payments to counties that contain lands, or interests, that are part of the Redwood National Park and are owned by the U.S. government or that are acquired by the U.S. government in the Lake Tahoe Basin under the Act of December 23, 1980. Section 6905 payments are paid at a rate of (1) 1% of the fair market value of the acquired land or interests or (2) the amount of taxes levied on the land in the year prior to acquisition, whichever is lesser. Payments on these lands continue for five years or until payments have totaled 5% of the fair market value of the land. Issues for Congress PILT is of perennial interest to many in Congress and to stakeholders throughout the country. County governments are particularly interested in the certainty of PILT payments, as well as in how payments are calculated, because many consider PILT payments to be an integral part of their annual budgets. Congressional and stakeholder interests include questions of how PILT should be funded, what lands should be included as entitlement lands, and how authorized payment levels are calculated under PILT, among others. Congress annually addresses questions of how funding should be provided to PILT. Congress has funded PILT through both mandatory and discretionary appropriations (see " PILT Authorizations and Appropriations "). More often than not, PILT funding has been provided through the discretionary appropriations process for one fiscal year at a time. Although PILT has consistently received funding since its enactment, the appropriations process has created uncertainty among some stakeholders about the level of annual funding. Stakeholders also have asserted that greater certainty, in terms of both the guarantee of funding and the amount of funding (i.e., full statutory calculation) would be better. Members of Congress typically contemplate the implications and tradeoffs of discretionary versus mandatory spending and may have different views than the counties that receive PILT payments. Congress, for example, may weigh its discretion to review and fund PILT on an annual basis through the appropriations process against the certainty of funding for specific activities that accompany mandatory appropriations. Several bills have been introduced to amend how PILT is funded. For example, legislation has been introduced in the 116 th Congress that would require mandatory funding for PILT for either a set period of time (e.g., 10 additional years) or indefinitely. The question of which lands should be eligible for PILT payments is also of interest to many Members and stakeholders. In law, entitlement lands are restricted to the listed federal land types (see " Entitlement Lands "). However, this definition does not fully encompass the types of lands that are held by the federal government, nor does it account for the full suite of lands that are exempt from state and local taxes. Although some of these other lands may receive compensation through other federal programs, not all do, which may cause financial hardships for counties that otherwise might receive revenue through taxation. To address this concern, some Members of Congress have contemplated amending the definition of entitlement lands under PILT. For example, past Congresses have introduced legislation that would have amended PILT by expanding the definition of entitlement land to include land "that is held in trust by the United States for the benefit of a federally recognized Indian tribe or an individual Indian"; lands under the jurisdiction of the Department of the Defense, other than those already included in PILT; lands acquired by the federal government for addition to the National Wildlife Refuge System; and lands administered by the Department of Homeland Security, among others. Amending the definition of entitlement lands could have several implications. Adding additional acres of entitlement lands could increase the authorized amount of payments under PILT, which likely would benefit those states with the added lands but not states that lack additional lands. This, in turn, could influence how Congress elects to fund PILT. Additional entitled lands may be eligible for other compensation programs, which could further affect PILT payments. The authorized payment level under Section 6902, which accounts for nearly all payments under PILT, is calculated pursuant to the statutory requirements. This section has remained largely unchanged since it was amended in 1994 to add the requirement to adjust for inflation, among other changes. The inflation adjustment clause has resulted in increasing payment and ceiling rates since that time. Congress routinely considers whether the current formula is the best means of calculating payments under PILT or whether the formula should be amended. For example, in the 116 th Congress, bills have been introduced that would adjust the payment structure for counties with a population of less than 5,000. This adjustment would have implications for how population or area would be incorporated into calculating PILT payments and whether PILT payments were provided in an equitable manner. PILT is of interest to a large number of counties and other state and local entities across the country, and it may remain of interest to many Members of Congress. In addition to the above issues, Congress may consider other issues related to PILT and how the program fits into the landscape of federal programs that compensate for the presence of tax-exempt federal lands. Summary:	null	96	24,687	24,689	24,689	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction to the Payments in Lieu of Taxes (PILT) Program The Payments in Lieu of Taxes (PILT) program provides compensation for certain entitlement lands that are exempt from state and local taxes. These lands include selected federal lands administered by the Bureau of Land Management, the National Park Service, and the U.S. Fish and Wildlife Service, all in the Department of the Interior (DOI); lands administered by the U.S. Forest Service in the Department of Agriculture; federal water projects; dredge disposal areas; and some military installations. Enacted in 1976, PILT is the broadestâin terms of federal land types coveredâof several federal programs enacted to provide compensation to state or local governments for the presence of tax-exempt federal lands within their jurisdictions. PILT was enacted in response to a shift in federal policy from one that prioritized disposal of federal landsâone in which federal ownership was considered to be temporaryâto one that prioritized retention of federal lands, in perpetuity, for public benefit. This shift began in the late 19 th century and continued into the 20 th century. Along with this shift came the understanding that, because these lands were exempt from state and local taxation and were no longer likely to return to the tax base in the foreseeable future, some compensation should be provided to the impacted local governments. Following several decades of commissions, studies, and proposed legislation, Congress passed PILT to at least partially ameliorate this hardship. PILT payments generally can be used for "any governmental purpose," which could include assisting local governments with paying for local services, such as "firefighting and police protection, construction of public schools and roads, and search-and-rescue operations." The Office of the Secretary in DOI is responsible for the calculation and disbursement of payments under PILT. Payments under PILT are made annually to units of general local governmentâtypically counties, though other types of governmental units also may be used (hereinafter, counties refers to units of general local government)âcontaining entitlement lands . PILT comprises three separate payment mechanisms: Section 6902, Section 6904, and Section 6905 payments, all named for the sections of law in which they are authorized. Section 6902 payments account for nearly all payments made through PILT. The Section 6902 authorized payment amount for each county is calculated according to a statutory formula that is subject to a maximum payment based on the county's population (see " PILT Payments Under Section 6902 "). The remaining payments are provided through Section 6904 and Section 6905 under selected circumstances and typically are limited in duration. Through FY2019, PILT payments have totaled approximately $9.2 billion (in current dollars). Members of Congress routinely consider amending PILT within both appropriations and authorizing legislation. For example, legislation in the 116 th Congress would amend how PILT appropriations are provided and would change how payments are calculated under Section 6902. In addition, Members of Congress may address issues related to which federal lands should be eligible for payments under PILT. This report provides an overview of the PILT payment program and includes sections on PILT's authorization and appropriations, which discusses the history of how Congress has provided funding for PILT; Section 6902 payments, which includes a breakdown of how Section 6902 payments are calculated; Section 6904 and Section 6905 payments, which outlines what situations result in payments under these mechanisms; and issues for Congress, which discusses several topics that have been or may be of interest to Members of Congress when considering the future of PILT. PILT Authorizations and Appropriations Congress has funded PILT through both discretionary and mandatory appropriations at various times since the program was first authorized. Some stakeholders and policymakers have routinely expressed concern about changes in the appropriations source, both the process of switching between mandatory and discretionary appropriations and the uncertainty that may accompany such changes. From 1982 to 2008, Section 6906 provided an "Authorization of Appropriations" for PILT, which stated, "Necessary amounts may be appropriated to the Secretary of the Interior to carry out [PILT]." Further, it clarified that "amounts are available only as provided in appropriation laws." Congress amended this language in 2008 and changed the section title from "Authorization of Appropriations" to "Funding." Further, Congress changed the text to read For each of fiscal years 2008 through 2012- (1) each county or other eligible unit of local government shall be entitled to payment under this chapter; and (2) sums shall be made available to the Secretary of the Interior for obligation or expenditure in accordance with this chapter. This amendment effectively changed PILT funding from being discretionary to being mandatory for the years specified (see Table 1 for PILT funding since FY2005). Since 2008, Congress has amended Section 6906 several times by changing the fiscal year in the first line through both annual discretionary appropriations laws and other legislative vehicles ( Table 1 ). PILT was funded through discretionary appropriations from its enactment through FY2007. Since FY2008, Congress has provided funding for PILT through both discretionary and mandatory appropriations ( Table 1 ). From FY2008 through FY2014, Congress authorized mandatory funding for PILT through several laws . Since FY2015, funding has been provided, at least partially, through the annual appropriations process. In FY2015, PILT received both discretionary and mandatory appropriations. For FY2016 through FY2020, Congress funded PILT through the annual appropriations process. In FY2016 and FY2017, the appropriations laws provided specific funding levels for PILT, which was treated as discretionary spending. In FY2018, FY2019, and FY2020, the appropriations laws provided funding for PILT by amending the authority provided in 31 U.S.C. Â§6906, which was treated as mandatory spending. In each of these three years, funding was provided for PILT at the full statutory calculation levels. Since FY2008, Congress has provided funding for PILT through both one-year and multiyear appropriations. Congress's actions have resulted in full funding and partial funding in different years ( Table 1 and Figure 1 ). These types of changes from year to year may have implications for counties that rely on PILT funding as part of their annual budgets. In addition to appropriating funding for the program, Congress routinely provides other guidance on PILT within the annual appropriations process, such as minimum payment thresholds, set-asides for program administration, and provisions for prorating payments. When appropriated funding is insufficient to cover the full amount for authorized payments under Sections 6902, 6904, and 6905, counties typically receive a proportional payment known as a prorated payment ( Figure 1 shows the disparity between the authorized amount and the appropriated amount in recent years). Even in years in which appropriations are set equal to 100% of the full statutory calculation, payments to counties may be prorated if funding is set aside for purposes other than payments, such as administration. PILT Payments Under Section 6902 Section 6902 payments are provided to units of local government jurisdictions (referred to as counties in this report) across the United States to compensate for the presence of entitlement lands within their boundaries. Section 6902 payments also are provided to the District of Columbia, Guam, Puerto Rico, and the Virgin Islands. Section 6902 payments account for nearly all of the payments made under PILT. In FY2019, 99.85% of all PILT payments were made through Section 6902. Further, more counties are eligible for Section 6902 payments than either Section 6904 or Section 6905 payments. In FY2019, of the 1,931 counties that received PILT payments, 1,927 received payments under Section 6902, and 134 received payments under Section 6904 and/or Section 6905 (130 counties received payments under both Section 6902 and Section 6904 and/or Section 6905). Entitlement Lands There are nine categories of federal lands identified as entitlement lands in the PILT statute. 1. Lands in the National Park System 2. Lands in the National Forest System 3. Lands administered by the Bureau of Land Management (BLM) 4. Lands in the National Wildlife Refuge System (NWRS) that are withdrawn from the public domain 5. Lands dedicated to the use of federal water resources development projects 6. Dredge disposal areas under the jurisdiction of the U.S. Army Corps of Engineers 7. Lands located in the vicinity of Purgatory River Canyon and PiÃ±on Canyon, CO, that were acquired after December 31, 1981, to expand the Fort Carson military reservation 8. Lands on which are located semi-active or inactive Army installations used for mobilization and for reserve component training 9. Certain lands acquired by DOI or the Department of Agriculture under the Southern Nevada Public Land Management Act ( P.L. 105-263 ) Of these categories, the first three (National Park System, National Forest System, and lands administered by BLM) largely account for all of the lands managed by the relevant agencies. The remaining categories are either lands tied to specific laws or actions (categories 7 and 9, above) or lands that represent a subset of the lands administered by a particular agency. For example, entitlement lands that are included within the NWRS (category 4) only account for lands within the system that have been withdrawn from the public domain, which excludes lands that have been purchased as additions to the NWRS. Further, lands administered by the U.S. Fish and Wildlife Service that are not included in the NWRS are not included within the definition of entitlement lands. Similarly, lands in the other categories (5, 6, and 8, above) may not include all, or even the majority of, lands administered by particular agencies or departments. Calculating Section 6902 Payments Section 6902 payments are determined based on a multipart formula (see Figure 2 ). The DOI Office of the Secretary calculates PILT payments according to several factors, including the number of entitlement acres; a per-acre calculation determined by one of two alternatives (Alternative A, also called the standard rate , or Alternative B, also called the minimum provision ); a population-based maximum payment (ceiling); certain prior-year payments pursuant to other compensation programs; and the amount available to cover PILT payments. To calculate a particular county's PILT payment, the DOI Office of the Secretary first must collect data from several federal agencies and the county's state to answer the following questions: How many acres of eligible lands are in the county? What is the population of the county? What was the increase in the Consumer Price Index for the 12 months ending the preceding June 30? What were the prior year's payments, if any, for the county under the other payment programs of federal agencies? Does the state have any laws requiring the payments from other federal land payment laws to be passed through to other local government entities, such as school districts, rather than stay with the county government? The first step in calculating a county's Section 6902 payment is to determine the number of entitlement acres within the county ( Figure 2 , Box A). The next step is to calculate the population-based ceiling by multiplying the county's population by the population payment rate ( Figure 2 , Box B). County population data are provided by the U.S. Census Bureau. For this calculation, counties with different populations are treated differently ( Figure 3 ): For counties with populations smaller than 5,000, a county's actual population is used in the calculation . For counties with populations larger than 5,000, a county's population is rounded to the nearest 1,000, and this rounded population is used in the calculation. All counties with populations greater than 50,000, regardless of their actual populations, are considered to have a population equal to 50,000 for the purposes of calculating the ceiling. The population payment rate generally declines as population increases in 1,000 person increments (per statute), although the population-based ceiling generally increases ( Figure 4 ). However, this is not always the case. For example, in FY2019, payment rates for several populations are the same despite increasing populations, such as the rates for populations of 26,000; 27,000; and 28,000, which are all $94.98. Further, some payment ceilings do not increase with increasing populations. For example, counties with populations of 50,000 have a lower ceiling than those with populations of 49,000 (49,000 Ã $76.33 = $3,740,170; and 50,000 Ã $74.63 = $3,731,500, or $8,670 less for the more populous county). The population payment rate is adjusted annually for inflation based on the change in the Consumer Price Index for the 12 months ending on the preceding June 30. For FY2019, the population payment rates ranged from $186.56 per person for counties with populations of 5,000 or fewer to $74.63 per person for counties with populations of 50,000 or greater. The next step is to calculate the payment level under alternatives A and B ( Figure 2 , Box C). Alternative A has a higher per-acre payment rate than Alternative B, but Alternative A is subject to a deduction for prior-year payments. Prior-year payments are those payments from the federal payment programs listed in statute: the Act of June 20, 1910 (ch. 310, 36 Stat. 557); Section 33 of the Bankhead-Jones Farm Tenant Act (7 U.S.C. Â§1012); the Act of May 23, 1908 (16 U.S.C. Â§500), or the Secure Rural Schools and Community Self-Determination Act of 2000 (16 U.S.C. Â§Â§7101 et seq.); Section 5 of the Act of June 22, 1948 (16 U.S.C. Â§Â§577g-577gâ1); Section 401(c)(2) of the Act of June 15, 1935 (16 U.S.C. Â§715s(c)(2)); Section 17 of the Federal Power Act (16 U.S.C. Â§810); Section 35 of the Act of February 25, 1920 (30 U.S.C. Â§191); Section 6 of the Mineral Leasing Act for Acquired Lands (30 U.S.C. Â§355); Section 3 of the Act of July 31, 1947 (30 U.S.C. Â§603); and Section 10 of the Act of June 28, 1934 (known as the Taylor Grazing Act) (43 U.S.C. Â§315i). However, if a state has a pass - through law that requires some or all of these prior-year payments to be paid directly to a sub-county recipient (e.g., a school district), these payments are not deducted from subsequent PILT payments in the following year. Alternative B is calculated using a lower per-acre payment rate, but prior-year payments are not deducted. For FY2019, the per-acre payment rates were $2.77 per acre of entitlement land for Alternative A and $0.39 per acre of entitlement land for Alternative B. If the per-acre payment (number of acres multiplied by the per-acre payment rate) calculated under either alternative is greater than the population-based ceiling, then the population-based ceiling replaces the calculated amount. Once each alternative is calculated, the greater of the two is the Section 6902 authorized payment for the county ( Figure 2 , Box D). The Section 6902 authorized payments are calculated for every county, and this amount is added to the Section 6904 and Section 6905 authorized payments (for more information on Sections 6904 and 6905, see " PILT Payments Under Sections 6904 and 6905 "). This summed amount is the full statutory calculation for a given fiscal year ( Figure 2 , Box E). DOI compares the full statutory calculation with the amount appropriated and available for PILT payments to determine whether Congress has provided adequate funding to cover the full statutory calculation ( Figure 2 , Box F). If sufficient funding is available, each county receives its authorized amount; if funding is insufficient, each county receives a prorated payment that is proportional to its authorized payment ( Figure 2 , Box G). The full statutory calculation and the amount available for PILT payments determine proration. Although there are additional adjustments made in the PILT proration calculation resulting from small idiosyncrasies related to the requirements for PILT paymentsânamely, the requirement of a minimum threshold of $100 for PILT payments âthe proration is fundamentally the ratio of the appropriated funding available for PILT payments to the full statutory calculation: As a result, counties may receive less than their authorized PILT payment in years when appropriated funding is insufficient to cover the full statutory calculation. This scenario can occur even when total PILT appropriations match the full statutory calculation; this has been the case in years with mandatory appropriations, when part of the appropriated amount is set aside for a use other than county payments. For example, laws providing appropriations for PILT routinely have allowed DOI to retain a small portion of PILT appropriations for administrative expenses. PILT Payments Under Sections 6904 and 6905 Section 6904 and Section 6905 payments account for a small fraction of total PILT payments. In FY2019, these payments were made to 134 counties and accounted for 0.15% of PILT payments ($750,605 of $514.7 million in total payments made). Once a county receives Section 6904 and Section 6905 payments, it is to disburse payments to governmental units and school districts within the county in proportion to the amount of property taxes lost because of the federal ownership of the entitled lands, as enumerated under these sections. County units and school districts may use these payments for any governmental purpose. Section 6904 Payments Section 6904 authorizes the Secretary of the Interior to make payments to counties that contain certain lands, or interests in lands, that are part of the National Park System and National Forest Wilderness Areas. However, Section 6904 specifies that these lands, or interests, are eligible only if (1) they have been acquired by the U.S. government for addition to these systems and (2) they were subject to local property taxes in the five-year period prior to this acquisition. Payment under Section 6904 is calculated as 1% of the fair market value of the land at the time it was acquired, not to exceed the amount of property taxes levied on the property during the fiscal year prior to its acquisition. Further, Section 6904 payments are made annually only for the five fiscal years after the land, or interest, is acquired by the U.S. government, unless otherwise mandated by law. Section 6905 Payments Section 6905 authorizes the Secretary of the Interior to make payments to counties that contain lands, or interests, that are part of the Redwood National Park and are owned by the U.S. government or that are acquired by the U.S. government in the Lake Tahoe Basin under the Act of December 23, 1980. Section 6905 payments are paid at a rate of (1) 1% of the fair market value of the acquired land or interests or (2) the amount of taxes levied on the land in the year prior to acquisition, whichever is lesser. Payments on these lands continue for five years or until payments have totaled 5% of the fair market value of the land. Issues for Congress PILT is of perennial interest to many in Congress and to stakeholders throughout the country. County governments are particularly interested in the certainty of PILT payments, as well as in how payments are calculated, because many consider PILT payments to be an integral part of their annual budgets. Congressional and stakeholder interests include questions of how PILT should be funded, what lands should be included as entitlement lands, and how authorized payment levels are calculated under PILT, among others. Congress annually addresses questions of how funding should be provided to PILT. Congress has funded PILT through both mandatory and discretionary appropriations (see " PILT Authorizations and Appropriations "). More often than not, PILT funding has been provided through the discretionary appropriations process for one fiscal year at a time. Although PILT has consistently received funding since its enactment, the appropriations process has created uncertainty among some stakeholders about the level of annual funding. Stakeholders also have asserted that greater certainty, in terms of both the guarantee of funding and the amount of funding (i.e., full statutory calculation) would be better. Members of Congress typically contemplate the implications and tradeoffs of discretionary versus mandatory spending and may have different views than the counties that receive PILT payments. Congress, for example, may weigh its discretion to review and fund PILT on an annual basis through the appropriations process against the certainty of funding for specific activities that accompany mandatory appropriations. Several bills have been introduced to amend how PILT is funded. For example, legislation has been introduced in the 116 th Congress that would require mandatory funding for PILT for either a set period of time (e.g., 10 additional years) or indefinitely. The question of which lands should be eligible for PILT payments is also of interest to many Members and stakeholders. In law, entitlement lands are restricted to the listed federal land types (see " Entitlement Lands "). However, this definition does not fully encompass the types of lands that are held by the federal government, nor does it account for the full suite of lands that are exempt from state and local taxes. Although some of these other lands may receive compensation through other federal programs, not all do, which may cause financial hardships for counties that otherwise might receive revenue through taxation. To address this concern, some Members of Congress have contemplated amending the definition of entitlement lands under PILT. For example, past Congresses have introduced legislation that would have amended PILT by expanding the definition of entitlement land to include land "that is held in trust by the United States for the benefit of a federally recognized Indian tribe or an individual Indian"; lands under the jurisdiction of the Department of the Defense, other than those already included in PILT; lands acquired by the federal government for addition to the National Wildlife Refuge System; and lands administered by the Department of Homeland Security, among others. Amending the definition of entitlement lands could have several implications. Adding additional acres of entitlement lands could increase the authorized amount of payments under PILT, which likely would benefit those states with the added lands but not states that lack additional lands. This, in turn, could influence how Congress elects to fund PILT. Additional entitled lands may be eligible for other compensation programs, which could further affect PILT payments. The authorized payment level under Section 6902, which accounts for nearly all payments under PILT, is calculated pursuant to the statutory requirements. This section has remained largely unchanged since it was amended in 1994 to add the requirement to adjust for inflation, among other changes. The inflation adjustment clause has resulted in increasing payment and ceiling rates since that time. Congress routinely considers whether the current formula is the best means of calculating payments under PILT or whether the formula should be amended. For example, in the 116 th Congress, bills have been introduced that would adjust the payment structure for counties with a population of less than 5,000. This adjustment would have implications for how population or area would be incorporated into calculating PILT payments and whether PILT payments were provided in an equitable manner. PILT is of interest to a large number of counties and other state and local entities across the country, and it may remain of interest to many Members of Congress. In addition to the above issues, Congress may consider other issues related to PILT and how the program fits into the landscape of federal programs that compensate for the presence of tax-exempt federal lands.	Summary:	gov_report	1,024	null	30
crs_R46226	crs_R46226_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The United States and Liberia have maintained diplomatic relations for more than 150 years. Close ties endured in the 20th centuryâunderpinned by U.S. investment in the rubber sector and robust political, development, and defense cooperation during the Cold Warâbut they came under strain during Liberia's two civil wars (1989-1997 and 1999-2003). The United States provided substantial humanitarian assistance in response to those conflicts and helped mediate an end to each war, and the U.S. military briefly deployed a task force to assist peacekeepers and support aid delivery after the conflict. U.S.-Liberia ties improved considerably during the tenure of former President Ellen Johnson Sirleaf (in office 2006-2018) and have remained close under current President George Weah (inaugurated in 2018). Congress has shown enduring interest in Liberia and has held periodic hearings on the country. Since the end of the second civil war, Congress has appropriated over $2.4 billion in State Department- and USAID-administered assistance to support Liberia's stabilization, recovery, and development. Such aid has centered on promoting good governance, strengthening the rule of law, reforming the security sector, improving service delivery, and spurring inclusive economic development. Congress provided roughly $600 million in additional State Department- and USAID-administered assistance to help combat the 2014-2016 Ebola outbreak in Liberia, where the U.S. governmentâin collaboration with Liberian authorities and U.N. agenciesâplayed a lead role in the response. In recent years, several Members of Congress have sought to adjust the immigration status of over 80,000 Liberian nationals resident in the United States, some of whom originally came to the United States as refugees. Members regularly travel to Liberia, including under a House Democracy Partnership legislative engagement program initiated in 2006. Historical Background The United States and Liberia established diplomatic relations in 1864, nearly two decades after Liberia declared independence from the American Colonization Society, a U.S. organization that resettled freed slaves and freeborn African-Americans in Liberia. A small elite dominated by "Americo-Liberians," descendants of this settler population, held a monopoly on state power until a 1980 military coup d'Ã©tat. Under President Samuel Doe, economic mismanagement, corruption, and repression along ethnic lines characterized much of the ensuing decade. In 1989, Charles Taylor, a Liberian former civil servant who had fled to the United States after falling out with Doe, launched a rebellion from neighboring CÃ´te d'Ivoire. Factional violence soon engulfed the country. Hundreds of thousands died and "virtually all" Liberians fled their homes at some point during Liberia's first civil war. After a series of abortive ceasefires, the war ended in a peace accord and general elections in 1997, which Taylor won by a wide margin. In 1999, an incursion by Liberian rebels based in neighboring Guinea grew into a second nationwide conflict that pitted Taylor's army against two insurgent factions. After years of fighting, a rebel assault on the capital, Monrovia, and mounting international pressureâincluding U.N. sanctions and a public demand from President George W. Bush that Taylor resignâultimately forced Taylor to step down in 2003. Days later, a peace agreement officially ended the conflict and laid the foundations for a transitional government. The U.N. Security Council established a peacekeeping mission, the U.N. Mission in Liberia (UNMIL), in September 2003 to help stabilize the country. Liberia's wars impeded social service provision, devastated the economy, and destabilized the broader region. Notably, Taylor provided material support to rebels in neighboring Sierra Leone during that country's civil war (1991-2002). In 2006, Taylor was arrested in Nigeria (where he had been granted asylum upon stepping down in 2003) on a warrant issued by the Special Court for Sierra Leone (SCSL), a U.N.-mandated judicial body created to prosecute crimes perpetrated during the Sierra Leonean civil war. In 2012, the SCSL convicted Taylor of war crimes in relation to his support for Sierra Leonean rebels; he is now serving a 50-year sentence in a prison in the United Kingdom. To date, a similar tribunal to prosecute atrocities committed during Liberia's wars has not been established, spurring perceptions of impunity and mounting calls by civil society and some legislators for the creation of a war crimes court for Liberia (see " Postwar Transitional Justice Efforts "). Taylor's ex-wife and several former associates remain active in Liberian politics, as do figures formerly associated with various armed factions. The Sirleaf Administration (2006-2018) President Ellen Johnson Sirleaf, a Harvard-educated former Finance Minister and U.N. official, won election in 2006, putting an end to a three-year transitional government led by Taylor's vice president. During her two terms in office, Sirleaf won praise for overseeing a postwar transition marked by political stability and, until the Ebola outbreak in 2014, rapid economic growth. Africa's first elected female head of state, Sirleaf bolstered confidence among donors, drawing large inflows of U.S., Chinese, and multilateral assistance. Such aid financed the rehabilitation of infrastructure and a range of other development and stabilization efforts. Sirleaf also secured almost $5 billion in external debt relief and oversaw an expansion in state revenues. The United Statesâlong the largest bilateral donor to Liberiaâprovided significant assistance to Sirleaf's administration, funding programs to spur economic growth and development, reform the security sector, promote good governance, and build state capacity (see " U.S. Relations and Assistance "). The Sirleaf administration took steps to rehabilitate Liberia's global standing. The U.N. Security Council had imposed various sanctions in response to Liberia's civil wars, including embargoes on imports of arms into the country and on exports of rough diamonds and timber of Liberian origin. As Liberia stabilized and the Sirleaf government enacted sectoral reforms, these sanctions were gradually lifted. The Security Council lifted the last arms embargo, on non-state actors, in 2016, ending the U.N. sanctions regime. (The Obama Administration lifted U.S. targeted sanctions on Taylor and key associates in late 2015.) Also in 2016, UNMIL officially transferred national security duties to Liberian authorities in anticipation of full withdrawal in 2018. Sirleaf's international standing arguably surpassed her popularity among Liberians. Despite rapid economic growth, her administration struggled to meet high expectations for Liberia's postwar trajectory. Extreme poverty remained widespread throughout her tenure, and her government failed to implement key recommendations of Liberia's postwar Truth and Reconciliation Commission (TRC), such as the creation of a war crimes court. Several corruption scandals arose during her tenure, and she drew criticism for appointing her sons to state posts. Her administration's response to the 2014-2016 Ebola outbreak reportedly featured financial irregularities and a heavy-handed approach by security forces. Some of these shortcomings reasonably could be attributed to structural challenges, such as corruption, low institutional capacity, deficiencies in education and health service provision, and infrastructure gaps. The October 2017 presidential and legislative polls were Liberia's third set of postwar general elections. Constitutional term limits barred Sirleaf from seeking reelection. Approaching the polls, the opposition Congress for Democratic Change party, led by professional soccer star-turned-politician George Weah, allied with the National Patriotic Party of Jewel Howard-Taylor (an ex-wife of Charles Taylor) to form the Coalition for Democratic Change (CDC). Weah won the presidency with 62% of votes in a runoff against incumbent Vice President Joseph Boakai of Sirleaf's Unity Party (UP). Despite some violence and a short-lived legal challenge over alleged fraud in the first round of polls, election observers from the U.S. National Democratic Institute (NDI) lauded the election as a "historic achievement for the country." Concurrent House of Representatives elections resulted in a slim plurality for Weah's party, which took 21 out of 73 seats, ahead of the UP, which took 20. Ten parties and thirteen independents claimed the rest. The United States, the European Union (EU), and other donors provided substantial support for the 2017 elections. U.S. support included the $17 million, USAID-funded Liberia Elections and Political Transition (LEPT) project, under which the U.S. International Foundation for Electoral Systems (IFES) and NDI provided technical assistance to the National Elections Commission (NEC), supported voter education initiatives targeting women and people with disabilities, and enhanced civil society oversight of voting and other electoral processes. The Weah Administration (2018-Present) President Weah, who took office in January 2018, gained prominence as a European league soccer star prior to his foray into politics. His lack of formal education was a point of criticism during an unsuccessful bid for the presidency in 2005; he went on to earn a high school diploma and, later, an undergraduate business degree in the United States. In 2014, he won a Senate seat representing Montserrado County, which surrounds Monrovia. His choice of then-Senator Jewel Howard-Taylor as his running mate in the 2017 election hinted at the enduring influence of Charles Taylor and his associates in Liberia's politics. As a legislator, Howard-Taylor sparked controversy by attempting to make homosexuality a felony punishable by death and to amend the constitution to declare Liberia a Christian state, despite its sizable Muslim minority. Goodwill surrounding Weah's inaugurationâwhich marked Liberia's first electoral transfer of power since 1944 and paved the way for UNMIL's withdrawalâhas dissipated as several high-profile corruption scandals have undermined his political standing. Weah initially drew criticism for failing to disclose his assets prior to taking office, as required of all senior public officials. He ultimately declared his assets in 2018, though the disclosure has remained confidential. Since Weah's inauguration, a number of his associates reportedly have been awarded public contracts, including for large infrastructure projects. Meanwhile, Weah's attempt to nominate a political ally, former Speaker of the House Alex Tyler, to the board of ArcelorMittal, Liberia's largest iron ore producer, prompted significant pushback in local media, given an open inquiry into bribery allegations against Tyler. Weah ultimately withdrew the nomination. (Tyler was later acquitted.) Among the highest-profile scandals that have arisen under Weah was the reported disappearance, in late 2018, of a shipping container holding 15.5 billion Liberian dollars ($104 million). Officials issued contradictory statements about the "missing millions," which the Sirleaf government had procured but whose delivery to Liberia extended into the Weah administration. A U.S. Embassy-contracted inquiry by Kroll Associates, a corporate investigations firm, found no evidence that banknotes had disappeared but documented "discrepancies at every stage" of the procurement and delivery processes. The review also raised concerns regarding the "potential misappropriation of banknotes" and "opportunities for money laundering" in the course of the Weah government's mid-2018 infusion of $25 million U.S. dollars into the monetary system to replace Liberian dollars in an effort to control inflation. (Liberia has two official currencies, the Liberian dollar and the U.S. dollar.) Several former central bank officials, including former President Sirleaf's son, have been charged in the scandal. A USAID technical assistance program, to be implemented by Kroll Associates, aims to enhance the Central Bank's currency management processes. Concerns also have centered on the Weah administration's management of donor assistance, a key source of financing for development efforts. In mid-2019, the U.S. ambassador to Liberia and several foreign counterparts sent a joint letter to the government signaling discontent with the Weah administration's use of aid funds for unintended purposes. The Weah administration publicly acknowledged that it had used aid funds to pay state salaries, but claimed that it had later restored donor accounts. Separately, press reports emerged that the U.N. Resident Coordinator in Liberia had sent a letter to the government over concerns about delayed and inaccurate financial reporting on U.N.-funded activities. In late 2019, the World Bank reportedly demanded that the government refund certain ineligible expenses identified during a project review. According to the State Department's congressionally mandated fiscal transparency report, "foreign assistance receipts, largely project-based, were neither adequately captured in the budget nor subject to the same audit and domestic oversight as other budget items" in 2018, the latest reporting year. In June 2019, simmering discontent over alleged corruption and mismanagement by the Weah administration gave way to large-scale anti-government protests in Monrovia. Headed by the Council of Patriots (COP), a coalition of opposition politicians and activists, the demonstrators called for an audit of all state ministries and petitioned Weah to publicly disclose his assets. The government drew criticism for its response to the protests, during which it blocked social media access. In January 2020, thousands of protesters joined COP-led demonstrations in Monrovia, which police dispersed with tear gas. The Independent National Commission on Human Rights, a state body, has called for an inquiry into allegations of excessive force by security forces. In a joint statement, the ambassadors of the United States, EU, and Economic Community of West African States (ECOWAS) lauded the security forces' management of the demonstrations but noted "with regret" the government's decision to disperse peaceful protesters without warning. Human rights groups and press freedom advocates have condemned what they have described as a crackdown on COP leader Henry Costa, a radio host who currently lives in the United States. The Economy and Development Issues Annual GDP growth averaged 7.4% over the decade following the end of Liberia's second conflict, as substantial donor assistance helped power a fragile postwar recovery and modest development gains. Foreign direct investment (FDI) significantly increased under President Sirleaf, mostly concentrated in the mining, palm oil, rubber, and timber industries. The 2014 Ebola outbreak and a simultaneous slump in global commodity prices cut short this expansion: Liberia's economy contracted by 1.6% in 2016 before rebounding to 2.5% growth the following year owing to expanded gold, rubber, and palm oil exports. The International Monetary Fund (IMF) projects a contraction of 1.4% in 2019 due to slowing aggregate demand, followed by a recovery to 1.4% growth in 2020 due to an expected rise in consumption. Since 2017, a weakening of the Liberian dollar (which depreciated by 26% in 2018) and rising inflation (which stands at around 30%) have undermined local purchasing power and living standards. The World Bank projects a rise in the household poverty rate from 42% in 2018 to 44% by 2021; the rural poverty rate, estimated at 72%, is more than double that of urban areasâa longstanding pattern. The IMF predicts average annual growth of 3.0% between 2020 and 2023, a rate likely insufficient to raise living standards adequately for a population growing at 2.6% per year. Infrastructure gaps, low electricity access (estimated at 17% nationally and 3% in rural areas), poor service delivery, corruption, and an uncompetitive business climate all threaten growth prospects. Liberia ranked fifth lowest globally in the World Bank's 2018 Human Capital Index (HCI), a survey of health and education indicators. The government has struggled to marshal donor assistance for its ambitious Pro-Poor Agenda for Prosperity and Development (PAPD, 2018-2023), which centers on infrastructure investments and social service improvements. The government relies heavily on exports of rubber, gold, iron ore, diamonds, and palm oil for state revenues and foreign exchange, but these sectors have created minimal local employment. The multinational firms ArcelorMittal and Firestone, which are engaged in the extraction of iron and rubber, respectively, are among Liberia's largest private sector actors, though low global commodity prices have prompted both companies to downsize operations in recent years. Most working-age Liberians remain engaged in subsistence agriculture. According to the World Bank, infrastructure gaps, high transport costs, limited market information, and inadequate public sector support have discouraged a shift toward more productive agricultural activity. At the same time, few households produce enough food for family consumption, and Liberia depends on imports of key staple foods, such as rice and cassava, despite ample rainfall and fertile land. Rural poverty drives high rates of food insecurity and malnutrition. Liberia ranked 112 out of 117 countries surveyed on the International Food Policy Research Institute's 2019 Global Hunger Index, a composite ranking of undernourishment and related indicators. A 2018 analysis by the Liberian government and international partners found that 18% of Liberians faced moderate to severe food insecurity, meaning they regularly lack food and consistently do not consume a diet of adequate quality. Roughly 36% of children under five years old are "stunted," or too short for their ageâa risk indicator of impaired cognitive and physical development. Low global oil prices and a poor business climate have dimmed interest in Liberia's nascent oil and gas sector. Several U.S. oil firms, including Chevron, ExxonMobil, and Anadarko Petroleum, have relinquished licenses to offshore blocks, in some cases following unsuccessful exploration activities. According to the State Department, foreign investors have cited corruption as a key obstacle to engagement in Liberia, with graft perceived to be "most pervasive in government procurement, contract and concession awards, customs and taxation systems, regulatory systems, performance requirements, and government payments systems." Human Rights According to State Department monitors, key human rights challenges in 2018 included extrajudicial killings by police, arbitrary and prolonged detention, and harsh and overcrowded prison conditions. Additional challenges included discrimination and violence against women and marginalized communities. While Weah earned plaudits for supporting a new press freedom act, which repealed various criminal statutes that had been used to harass and arrest journalists, his government also has targeted opposition media figures and shuttered critical news outlets. Reporters have faced harassment and violence from government officials, including members of the national legislature, and press outlets self-censor to evade persecution. Sexual and gender-based violence is widespread; the State Department reports that rape remains "a serious and pervasive problem" despite efforts to address the issue by successive governments as well as nongovernmental organizations operating in Liberia. Access to justice is constrained by an under-resourced, uneven, and often ineffective justice system in which judicial corruption is common, and by social practices and attitudes that discourage reporting and prosecution. In August 2019, President Weah signed into law the Domestic Violence Act, which criminalizes various forms of intimate partner violence, including spousal rapeâlong excluded from legal definitions of sexual assault. That legislation ultimately did not include a provision that would have criminalized female genital mutilation/cutting (FGM/C), which Liberia's legislature has not prohibited despite considerable pressure from the Sirleaf and Weah administrations, donors, and domestic and international civil society groups. The practice remains widespread and is politically sensitive. Same-sex relations are illegal under Liberian law, and lesbian, gay, bisexual, transgender, and intersex individuals face violence, discrimination, harassment, and hate speech. Interethnic grievances over access to land and other resources have been a source of social and political tension and conflict. Surrounding the 2017 polls, NDI election observers documented derogatory statements and other forms of discriminatory behavior targeting Liberia's Muslim community (roughly 12% of the population) and the largely Muslim Mandingo ethnic group (3%), some of whom were barred from registering or voting. Mandingo mobilization formed the backbone of the 1997-2003 insurgency against Taylor. Since 2017, Liberia has ranked as a Tier 2 Watch List country on the State Department's annual Trafficking in Persons (TIP) report, submitted pursuant to the Trafficking Victims Protection Act of 2000 (TVPA, Division A of P.L. 106-386 ). Per the TVPA, failure to improve from Tier 2 Watch List ranking for three consecutive years results in a downgrade to Tier 3 (worst) status, which may carry restrictions on access to certain types of U.S. assistance. The Administration granted Liberia a waiver from such a downgrade in 2019 because the State Department found that Liberia's "government has devoted sufficient resources to a written plan that, if implemented, would constitute significant efforts to meet the minimum standards" for TIP elimination. Postwar Transitional Justice Efforts Accountability for wartime human rights violations in Liberia remains a highly sensitive topic. A postwar Truth and Reconciliation Commission (TRC), which operated between 2005 and 2010, recommended the establishment of a war crimes tribunal, but no such court has been established. This is partly attributable to opposition from former combatants and others likely to be targeted by such a tribunal, some of whom are current or former elected officials. The TRC recommended the prosecution of at least three members of the current legislature. Such individuals wield influence not only within the legislature but also as vote mobilizers at the national level; for instance, Senator Prince Johnson, one of two former armed faction leaders currently serving in Liberia's legislature, arguably was critical to President Weah's winning 2017 political coalition. Opponents of a possible war crimes court also include former President Sirleaf, whom the TRC identified as having provided financial support to Charles Taylor in the early years of Liberia's first civil war. Some Liberians may oppose potential transitional justice measures out of a reluctance to revisit wartime atrocities or fear of rekindling social tensions. In September 2019, President Weah appeared to endorse the establishment of a war crimes court and requested that the legislature advise him on the issue. After Weah's announcement, a resolution calling for a war crimes tribunal quickly garnered the two-thirds support required for passage in Liberia's House of Representatives. Weah subsequently walked back his support for the court, however, and it remains to be seen whether Weah's announcement paves the way for the creation of a court and/or the implementation of other transitional justice measures. U.S. Judicial Responses Some perpetrators of wartime atrocities have faced justice abroad, including in the United States. In 2009, Charles Taylor's U.S.-born son, Roy M. Belfast Jr. (AKA Charles "Chuckie" Taylor), was sentenced to 97 years in prison by a U.S. District Court for wartime acts of torture. Belfast remains the only individual prosecuted in the U.S. judicial system specifically for atrocities committed during Liberia's conflicts. Others have faced immigration-related charges, however, often in relation to fraud or perjury linked to nondisclosure of involvement in wartime abuses in applications for U.S. asylum, residency, or citizenship. Several Liberian nationals have been convicted on such offenses, which can carry lengthy prison sentences and/or result in deportation and loss of citizenship or residency permission. Former armed faction leader George Boley was deported from the United States in 2012 in connection with his involvement in the use of child soldiers. This marked the first deportation under the Child Soldiers Accountability Act ( P.L. 110-340 ), which made use of child soldiers a ground for deportation from the United States. U.S. Relations and Assistance As noted above, the United States played a key role in Liberia's founding, and bilateral ties generally have been close, characterized by substantial U.S. assistance. U.S. engagement in Liberia expanded significantly during the administration of President Sirleaf, under successive U.S. Administrations and with bipartisan support from Congress. Sirleaf addressed a joint session of Congress in 2006, and between FY2006 and FY2018, Congress appropriated over $2.1 billion in State Department- and USAID-administered aid to Liberia to support stabilization, development, security sector reform, and health programs. This total does not include assistance provided via other U.S. agencies and substantial Millennium Challenge Corporation (MCC) aid funding (see below). It also excludes U.S. funding for UNMIL provided through assessed contributions to the U.N. peacekeeping budget, as well as U.S. support for Liberia's Ebola response or programs funded through regionally or centrally managed programs. The Trump Administration has expressed support for strong U.S.-Liberia ties. In late 2019, Assistant Secretary of State for African Affairs Tibor Nagy hosted the fourth U.S.-Liberia Partnership Dialogue, a high-level diplomatic engagement that most recently focused on "youth engagement, trafficking in persons, economic growth, and strengthening health and education systems." Congress has continued to appropriate sizable bilateral foreign assistance for the country (see below), and has held hearings on its development and governance prospects. Congress also has fostered relations through a House Democracy Partnership (HDP) program with the Liberian legislature, which is one of 21 HDP partner legislatures worldwide. Launched in 2006, the Liberia HDP program has focused on the development of Liberian parliamentary capacity, including through peer-to-peer visits. In October 2019, five Members of Congress visited Liberia, where they met with various legislators and President Weah. Immigration Issues. Liberian immigration to the United States has played a significant role in bilateral relations. According to the U.S. Census Bureau, there were roughly 85,000 foreign-born individuals from Liberia living in the United States in 2018 (latest available). Liberians in the United States first received Temporary Protected Status (TPS) in 1991 during the first civil war. In the years since, qualifying Liberians have been granted TPS and/or Deferred Enforced Departure (DED)âtemporary blanket relief from removal provided by the Presidentâin the context of Liberia's conflicts and, later, the Ebola outbreak. Efforts to extend the immigration status of Liberians eligible for such protections have drawn bipartisan congressional support. In March 2019, three days before DED was to expire for certain Liberians resident in the United States since 2002, President Trump reaffirmed the termination but extended the wind-down period through March 30, 2020. In his memorandum, President Trump stated that "Extending the wind-down period will preserve the status quo while the Congress considers remedial legislation" to provide Liberian DED beneficiaries with relief from removal. Congress ultimately granted such relief in the National Defense Authorization Act for 2020 ( P.L. 116-92 ), which directs the Secretary of Homeland Security to adjust the status of eligible Liberian applicantsâthose continuously present in the United States since November 20, 2014, or the immediate family of such individuals, among other criteriaâto lawful permanent resident (LPR) status. Current U.S. Assistance Appropriated State Department and USAID-administered assistance for Liberia totaled $112.3 million in FY2018 and $96.5 million in FY2019. Recent U.S. aid largely has focused on health system strengthening and support for public service delivery, civil society capacity building, agriculture sector development, and justice sector improvements. Most U.S. development assistance is implemented by nongovernmental organizations, but the United States has a direct government-to-government financing agreement with Liberia's Ministry of Health that supports health service delivery. The State Department has funded programs to train, equip, advise, and professionalize the Armed Forces of Liberia (AFL), which was established with U.S. support after Liberia's second civil war, and to build the capacity of civilian law enforcement. DOD has conducted periodic trainings for AFL personnel and provided support to Liberia's defense ministry. Liberia also benefits from a State Partnership Program with the Michigan National Guard. The country hosts 94 Peace Corps Volunteers (PCVs) working on projects related to education and health. In December 2019, the U.S. Embassy withdrew PCVs from several regions due to liquidity challenges associated with withdrawing money from local banks. FY2020 aid allocations for Liberia pursuant to P.L. 116-94 have yet to be made public. The Administration requested $32.6 million in State Department- and USAID-administered aid for Liberia in FY2021, which would represent a 66% decrease from FY2019 appropriations. In successive years, Congress has appropriated aid for Liberia far in excess of the levels proposed in the Trump Administration's budget requests. Millennium Challenge Corporation (MCC) Engagement Liberia is currently implementing a five-year, $256.7 million MCC C ompact that entered into force in 2016. The Compact targets two constraints to economic growth: (1) a lack of access to reliable and affordable electricity, and (2) inadequate road infrastructure. The energy project seeks to provide a new hydropower turbine to the Mt. Coffee Hydropower Plant, train electricity sector personnel, and support the creation of an independent energy sector regulator. The roads project aims to build the capacity of Liberian authorities to plan road maintenance. Liberia previously benefitted from a $15 million MCC Threshold Program (2010-2013) focused on expanding girls' access to education, enhancing land rights and access, and promoting trade. In FY2019 and FY2020, Liberia did not secure a passing grade on half of its MCC Scorecardâa prerequisite for a potential second compact. According to its FY2020 scorecard, Liberia failed to meet standards in fiscal and trade policy, regulatory quality, inflation control, land rights and access, government effectiveness, rule of law, and a range of human development measures. Outlook Pressures on Weah's administration are likely to mount. State finances are under increasing strain due to weak economic growth, poor tax administration, declining donor aid, and the departure of UNMIL, which came to play a key role in Liberia's economy. At a time when the government faces popular expectations for dividends from Liberia's postwar transitionâincluding for better infrastructure, improved public services, job creation, and poverty reductionâsurging inflation and a depreciation of the Liberian dollar have contributed to falling purchasing power, rising poverty, and a mounting food security crisis. The IMF has welcomed austerity measures on the part of the government, including cuts to the public sector wage bill, and in late 2019 approved a four-year, $213.6 million program to support macroeconomic adjustments and other reforms. Austerity policies are likely to be domestically unpopular, however, and it remains to be seen whether the Weah administration continues to pursue reforms that may be politically challenging. Efforts to address corruption and other governance demands are likely to encounter pushback from key segments of Liberia's political landscape. Corruption has been a longstanding concern in Liberia and remains prevalent throughout the government, according to the State Department, which has documented a "culture of impunity" in the civil service. Any attempts to enact meaningful anti-corruption measures may thus founder on a lack of political will from legislators and other officials who profit from the current system. Meanwhile, Weah's stated commitment to address mounting calls from civil society and some legislators for postwar transitional justice measures has met with opposition from some legislators who are central to his political coalition. Recent protests and instances of inflammatory rhetoric have raised concerns over political tensions in the country. In May 2019, the U.S. Embassy condemned ethnically divisive statements by politicians, reproaching those who "incite unlawful acts through ill-considered rhetoric that could jeopardize Liberia's hard-won peace and security." The U.S. Embassy also has warned Liberia's opposition against using charged rhetoric, as it has called on the Weah administration to respect political freedoms. Mounting socioeconomic pressures and calls for governance reform and postwar accountability are key challenges facing Liberia's fledgling democracy; how the country's political class responds to such forces will have implications for Liberia's trajectory. U.S.-Liberia ties remain close, and the United States appears poised to continue supporting the country's development, albeit with potentially lower aid allocations than in past years. The United States continues to exert significant influence in the country, and Liberian authorities appear receptive to U.S. engagement, as suggested by President Weah's recent suspension of an official whom the U.S. ambassador had accused of promoting societal divisions. At the same time, the Weah administration's mismanagement of donor assistance may be of concern to some Members of Congress, as may enduring corruption, rising political tensions, persistent institutional weaknesses, and continued inaction on transitional justice measures. Members of Congress may continue to debate the relative effectiveness of various tools for advancing U.S. interests in Liberia, including diplomacy, foreign assistance, and possible punitive measures. Summary:	null	96	35,214	35,216	35,216	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The United States and Liberia have maintained diplomatic relations for more than 150 years. Close ties endured in the 20th centuryâunderpinned by U.S. investment in the rubber sector and robust political, development, and defense cooperation during the Cold Warâbut they came under strain during Liberia's two civil wars (1989-1997 and 1999-2003). The United States provided substantial humanitarian assistance in response to those conflicts and helped mediate an end to each war, and the U.S. military briefly deployed a task force to assist peacekeepers and support aid delivery after the conflict. U.S.-Liberia ties improved considerably during the tenure of former President Ellen Johnson Sirleaf (in office 2006-2018) and have remained close under current President George Weah (inaugurated in 2018). Congress has shown enduring interest in Liberia and has held periodic hearings on the country. Since the end of the second civil war, Congress has appropriated over $2.4 billion in State Department- and USAID-administered assistance to support Liberia's stabilization, recovery, and development. Such aid has centered on promoting good governance, strengthening the rule of law, reforming the security sector, improving service delivery, and spurring inclusive economic development. Congress provided roughly $600 million in additional State Department- and USAID-administered assistance to help combat the 2014-2016 Ebola outbreak in Liberia, where the U.S. governmentâin collaboration with Liberian authorities and U.N. agenciesâplayed a lead role in the response. In recent years, several Members of Congress have sought to adjust the immigration status of over 80,000 Liberian nationals resident in the United States, some of whom originally came to the United States as refugees. Members regularly travel to Liberia, including under a House Democracy Partnership legislative engagement program initiated in 2006. Historical Background The United States and Liberia established diplomatic relations in 1864, nearly two decades after Liberia declared independence from the American Colonization Society, a U.S. organization that resettled freed slaves and freeborn African-Americans in Liberia. A small elite dominated by "Americo-Liberians," descendants of this settler population, held a monopoly on state power until a 1980 military coup d'Ã©tat. Under President Samuel Doe, economic mismanagement, corruption, and repression along ethnic lines characterized much of the ensuing decade. In 1989, Charles Taylor, a Liberian former civil servant who had fled to the United States after falling out with Doe, launched a rebellion from neighboring CÃ´te d'Ivoire. Factional violence soon engulfed the country. Hundreds of thousands died and "virtually all" Liberians fled their homes at some point during Liberia's first civil war. After a series of abortive ceasefires, the war ended in a peace accord and general elections in 1997, which Taylor won by a wide margin. In 1999, an incursion by Liberian rebels based in neighboring Guinea grew into a second nationwide conflict that pitted Taylor's army against two insurgent factions. After years of fighting, a rebel assault on the capital, Monrovia, and mounting international pressureâincluding U.N. sanctions and a public demand from President George W. Bush that Taylor resignâultimately forced Taylor to step down in 2003. Days later, a peace agreement officially ended the conflict and laid the foundations for a transitional government. The U.N. Security Council established a peacekeeping mission, the U.N. Mission in Liberia (UNMIL), in September 2003 to help stabilize the country. Liberia's wars impeded social service provision, devastated the economy, and destabilized the broader region. Notably, Taylor provided material support to rebels in neighboring Sierra Leone during that country's civil war (1991-2002). In 2006, Taylor was arrested in Nigeria (where he had been granted asylum upon stepping down in 2003) on a warrant issued by the Special Court for Sierra Leone (SCSL), a U.N.-mandated judicial body created to prosecute crimes perpetrated during the Sierra Leonean civil war. In 2012, the SCSL convicted Taylor of war crimes in relation to his support for Sierra Leonean rebels; he is now serving a 50-year sentence in a prison in the United Kingdom. To date, a similar tribunal to prosecute atrocities committed during Liberia's wars has not been established, spurring perceptions of impunity and mounting calls by civil society and some legislators for the creation of a war crimes court for Liberia (see " Postwar Transitional Justice Efforts "). Taylor's ex-wife and several former associates remain active in Liberian politics, as do figures formerly associated with various armed factions. The Sirleaf Administration (2006-2018) President Ellen Johnson Sirleaf, a Harvard-educated former Finance Minister and U.N. official, won election in 2006, putting an end to a three-year transitional government led by Taylor's vice president. During her two terms in office, Sirleaf won praise for overseeing a postwar transition marked by political stability and, until the Ebola outbreak in 2014, rapid economic growth. Africa's first elected female head of state, Sirleaf bolstered confidence among donors, drawing large inflows of U.S., Chinese, and multilateral assistance. Such aid financed the rehabilitation of infrastructure and a range of other development and stabilization efforts. Sirleaf also secured almost $5 billion in external debt relief and oversaw an expansion in state revenues. The United Statesâlong the largest bilateral donor to Liberiaâprovided significant assistance to Sirleaf's administration, funding programs to spur economic growth and development, reform the security sector, promote good governance, and build state capacity (see " U.S. Relations and Assistance "). The Sirleaf administration took steps to rehabilitate Liberia's global standing. The U.N. Security Council had imposed various sanctions in response to Liberia's civil wars, including embargoes on imports of arms into the country and on exports of rough diamonds and timber of Liberian origin. As Liberia stabilized and the Sirleaf government enacted sectoral reforms, these sanctions were gradually lifted. The Security Council lifted the last arms embargo, on non-state actors, in 2016, ending the U.N. sanctions regime. (The Obama Administration lifted U.S. targeted sanctions on Taylor and key associates in late 2015.) Also in 2016, UNMIL officially transferred national security duties to Liberian authorities in anticipation of full withdrawal in 2018. Sirleaf's international standing arguably surpassed her popularity among Liberians. Despite rapid economic growth, her administration struggled to meet high expectations for Liberia's postwar trajectory. Extreme poverty remained widespread throughout her tenure, and her government failed to implement key recommendations of Liberia's postwar Truth and Reconciliation Commission (TRC), such as the creation of a war crimes court. Several corruption scandals arose during her tenure, and she drew criticism for appointing her sons to state posts. Her administration's response to the 2014-2016 Ebola outbreak reportedly featured financial irregularities and a heavy-handed approach by security forces. Some of these shortcomings reasonably could be attributed to structural challenges, such as corruption, low institutional capacity, deficiencies in education and health service provision, and infrastructure gaps. The October 2017 presidential and legislative polls were Liberia's third set of postwar general elections. Constitutional term limits barred Sirleaf from seeking reelection. Approaching the polls, the opposition Congress for Democratic Change party, led by professional soccer star-turned-politician George Weah, allied with the National Patriotic Party of Jewel Howard-Taylor (an ex-wife of Charles Taylor) to form the Coalition for Democratic Change (CDC). Weah won the presidency with 62% of votes in a runoff against incumbent Vice President Joseph Boakai of Sirleaf's Unity Party (UP). Despite some violence and a short-lived legal challenge over alleged fraud in the first round of polls, election observers from the U.S. National Democratic Institute (NDI) lauded the election as a "historic achievement for the country." Concurrent House of Representatives elections resulted in a slim plurality for Weah's party, which took 21 out of 73 seats, ahead of the UP, which took 20. Ten parties and thirteen independents claimed the rest. The United States, the European Union (EU), and other donors provided substantial support for the 2017 elections. U.S. support included the $17 million, USAID-funded Liberia Elections and Political Transition (LEPT) project, under which the U.S. International Foundation for Electoral Systems (IFES) and NDI provided technical assistance to the National Elections Commission (NEC), supported voter education initiatives targeting women and people with disabilities, and enhanced civil society oversight of voting and other electoral processes. The Weah Administration (2018-Present) President Weah, who took office in January 2018, gained prominence as a European league soccer star prior to his foray into politics. His lack of formal education was a point of criticism during an unsuccessful bid for the presidency in 2005; he went on to earn a high school diploma and, later, an undergraduate business degree in the United States. In 2014, he won a Senate seat representing Montserrado County, which surrounds Monrovia. His choice of then-Senator Jewel Howard-Taylor as his running mate in the 2017 election hinted at the enduring influence of Charles Taylor and his associates in Liberia's politics. As a legislator, Howard-Taylor sparked controversy by attempting to make homosexuality a felony punishable by death and to amend the constitution to declare Liberia a Christian state, despite its sizable Muslim minority. Goodwill surrounding Weah's inaugurationâwhich marked Liberia's first electoral transfer of power since 1944 and paved the way for UNMIL's withdrawalâhas dissipated as several high-profile corruption scandals have undermined his political standing. Weah initially drew criticism for failing to disclose his assets prior to taking office, as required of all senior public officials. He ultimately declared his assets in 2018, though the disclosure has remained confidential. Since Weah's inauguration, a number of his associates reportedly have been awarded public contracts, including for large infrastructure projects. Meanwhile, Weah's attempt to nominate a political ally, former Speaker of the House Alex Tyler, to the board of ArcelorMittal, Liberia's largest iron ore producer, prompted significant pushback in local media, given an open inquiry into bribery allegations against Tyler. Weah ultimately withdrew the nomination. (Tyler was later acquitted.) Among the highest-profile scandals that have arisen under Weah was the reported disappearance, in late 2018, of a shipping container holding 15.5 billion Liberian dollars ($104 million). Officials issued contradictory statements about the "missing millions," which the Sirleaf government had procured but whose delivery to Liberia extended into the Weah administration. A U.S. Embassy-contracted inquiry by Kroll Associates, a corporate investigations firm, found no evidence that banknotes had disappeared but documented "discrepancies at every stage" of the procurement and delivery processes. The review also raised concerns regarding the "potential misappropriation of banknotes" and "opportunities for money laundering" in the course of the Weah government's mid-2018 infusion of $25 million U.S. dollars into the monetary system to replace Liberian dollars in an effort to control inflation. (Liberia has two official currencies, the Liberian dollar and the U.S. dollar.) Several former central bank officials, including former President Sirleaf's son, have been charged in the scandal. A USAID technical assistance program, to be implemented by Kroll Associates, aims to enhance the Central Bank's currency management processes. Concerns also have centered on the Weah administration's management of donor assistance, a key source of financing for development efforts. In mid-2019, the U.S. ambassador to Liberia and several foreign counterparts sent a joint letter to the government signaling discontent with the Weah administration's use of aid funds for unintended purposes. The Weah administration publicly acknowledged that it had used aid funds to pay state salaries, but claimed that it had later restored donor accounts. Separately, press reports emerged that the U.N. Resident Coordinator in Liberia had sent a letter to the government over concerns about delayed and inaccurate financial reporting on U.N.-funded activities. In late 2019, the World Bank reportedly demanded that the government refund certain ineligible expenses identified during a project review. According to the State Department's congressionally mandated fiscal transparency report, "foreign assistance receipts, largely project-based, were neither adequately captured in the budget nor subject to the same audit and domestic oversight as other budget items" in 2018, the latest reporting year. In June 2019, simmering discontent over alleged corruption and mismanagement by the Weah administration gave way to large-scale anti-government protests in Monrovia. Headed by the Council of Patriots (COP), a coalition of opposition politicians and activists, the demonstrators called for an audit of all state ministries and petitioned Weah to publicly disclose his assets. The government drew criticism for its response to the protests, during which it blocked social media access. In January 2020, thousands of protesters joined COP-led demonstrations in Monrovia, which police dispersed with tear gas. The Independent National Commission on Human Rights, a state body, has called for an inquiry into allegations of excessive force by security forces. In a joint statement, the ambassadors of the United States, EU, and Economic Community of West African States (ECOWAS) lauded the security forces' management of the demonstrations but noted "with regret" the government's decision to disperse peaceful protesters without warning. Human rights groups and press freedom advocates have condemned what they have described as a crackdown on COP leader Henry Costa, a radio host who currently lives in the United States. The Economy and Development Issues Annual GDP growth averaged 7.4% over the decade following the end of Liberia's second conflict, as substantial donor assistance helped power a fragile postwar recovery and modest development gains. Foreign direct investment (FDI) significantly increased under President Sirleaf, mostly concentrated in the mining, palm oil, rubber, and timber industries. The 2014 Ebola outbreak and a simultaneous slump in global commodity prices cut short this expansion: Liberia's economy contracted by 1.6% in 2016 before rebounding to 2.5% growth the following year owing to expanded gold, rubber, and palm oil exports. The International Monetary Fund (IMF) projects a contraction of 1.4% in 2019 due to slowing aggregate demand, followed by a recovery to 1.4% growth in 2020 due to an expected rise in consumption. Since 2017, a weakening of the Liberian dollar (which depreciated by 26% in 2018) and rising inflation (which stands at around 30%) have undermined local purchasing power and living standards. The World Bank projects a rise in the household poverty rate from 42% in 2018 to 44% by 2021; the rural poverty rate, estimated at 72%, is more than double that of urban areasâa longstanding pattern. The IMF predicts average annual growth of 3.0% between 2020 and 2023, a rate likely insufficient to raise living standards adequately for a population growing at 2.6% per year. Infrastructure gaps, low electricity access (estimated at 17% nationally and 3% in rural areas), poor service delivery, corruption, and an uncompetitive business climate all threaten growth prospects. Liberia ranked fifth lowest globally in the World Bank's 2018 Human Capital Index (HCI), a survey of health and education indicators. The government has struggled to marshal donor assistance for its ambitious Pro-Poor Agenda for Prosperity and Development (PAPD, 2018-2023), which centers on infrastructure investments and social service improvements. The government relies heavily on exports of rubber, gold, iron ore, diamonds, and palm oil for state revenues and foreign exchange, but these sectors have created minimal local employment. The multinational firms ArcelorMittal and Firestone, which are engaged in the extraction of iron and rubber, respectively, are among Liberia's largest private sector actors, though low global commodity prices have prompted both companies to downsize operations in recent years. Most working-age Liberians remain engaged in subsistence agriculture. According to the World Bank, infrastructure gaps, high transport costs, limited market information, and inadequate public sector support have discouraged a shift toward more productive agricultural activity. At the same time, few households produce enough food for family consumption, and Liberia depends on imports of key staple foods, such as rice and cassava, despite ample rainfall and fertile land. Rural poverty drives high rates of food insecurity and malnutrition. Liberia ranked 112 out of 117 countries surveyed on the International Food Policy Research Institute's 2019 Global Hunger Index, a composite ranking of undernourishment and related indicators. A 2018 analysis by the Liberian government and international partners found that 18% of Liberians faced moderate to severe food insecurity, meaning they regularly lack food and consistently do not consume a diet of adequate quality. Roughly 36% of children under five years old are "stunted," or too short for their ageâa risk indicator of impaired cognitive and physical development. Low global oil prices and a poor business climate have dimmed interest in Liberia's nascent oil and gas sector. Several U.S. oil firms, including Chevron, ExxonMobil, and Anadarko Petroleum, have relinquished licenses to offshore blocks, in some cases following unsuccessful exploration activities. According to the State Department, foreign investors have cited corruption as a key obstacle to engagement in Liberia, with graft perceived to be "most pervasive in government procurement, contract and concession awards, customs and taxation systems, regulatory systems, performance requirements, and government payments systems." Human Rights According to State Department monitors, key human rights challenges in 2018 included extrajudicial killings by police, arbitrary and prolonged detention, and harsh and overcrowded prison conditions. Additional challenges included discrimination and violence against women and marginalized communities. While Weah earned plaudits for supporting a new press freedom act, which repealed various criminal statutes that had been used to harass and arrest journalists, his government also has targeted opposition media figures and shuttered critical news outlets. Reporters have faced harassment and violence from government officials, including members of the national legislature, and press outlets self-censor to evade persecution. Sexual and gender-based violence is widespread; the State Department reports that rape remains "a serious and pervasive problem" despite efforts to address the issue by successive governments as well as nongovernmental organizations operating in Liberia. Access to justice is constrained by an under-resourced, uneven, and often ineffective justice system in which judicial corruption is common, and by social practices and attitudes that discourage reporting and prosecution. In August 2019, President Weah signed into law the Domestic Violence Act, which criminalizes various forms of intimate partner violence, including spousal rapeâlong excluded from legal definitions of sexual assault. That legislation ultimately did not include a provision that would have criminalized female genital mutilation/cutting (FGM/C), which Liberia's legislature has not prohibited despite considerable pressure from the Sirleaf and Weah administrations, donors, and domestic and international civil society groups. The practice remains widespread and is politically sensitive. Same-sex relations are illegal under Liberian law, and lesbian, gay, bisexual, transgender, and intersex individuals face violence, discrimination, harassment, and hate speech. Interethnic grievances over access to land and other resources have been a source of social and political tension and conflict. Surrounding the 2017 polls, NDI election observers documented derogatory statements and other forms of discriminatory behavior targeting Liberia's Muslim community (roughly 12% of the population) and the largely Muslim Mandingo ethnic group (3%), some of whom were barred from registering or voting. Mandingo mobilization formed the backbone of the 1997-2003 insurgency against Taylor. Since 2017, Liberia has ranked as a Tier 2 Watch List country on the State Department's annual Trafficking in Persons (TIP) report, submitted pursuant to the Trafficking Victims Protection Act of 2000 (TVPA, Division A of P.L. 106-386 ). Per the TVPA, failure to improve from Tier 2 Watch List ranking for three consecutive years results in a downgrade to Tier 3 (worst) status, which may carry restrictions on access to certain types of U.S. assistance. The Administration granted Liberia a waiver from such a downgrade in 2019 because the State Department found that Liberia's "government has devoted sufficient resources to a written plan that, if implemented, would constitute significant efforts to meet the minimum standards" for TIP elimination. Postwar Transitional Justice Efforts Accountability for wartime human rights violations in Liberia remains a highly sensitive topic. A postwar Truth and Reconciliation Commission (TRC), which operated between 2005 and 2010, recommended the establishment of a war crimes tribunal, but no such court has been established. This is partly attributable to opposition from former combatants and others likely to be targeted by such a tribunal, some of whom are current or former elected officials. The TRC recommended the prosecution of at least three members of the current legislature. Such individuals wield influence not only within the legislature but also as vote mobilizers at the national level; for instance, Senator Prince Johnson, one of two former armed faction leaders currently serving in Liberia's legislature, arguably was critical to President Weah's winning 2017 political coalition. Opponents of a possible war crimes court also include former President Sirleaf, whom the TRC identified as having provided financial support to Charles Taylor in the early years of Liberia's first civil war. Some Liberians may oppose potential transitional justice measures out of a reluctance to revisit wartime atrocities or fear of rekindling social tensions. In September 2019, President Weah appeared to endorse the establishment of a war crimes court and requested that the legislature advise him on the issue. After Weah's announcement, a resolution calling for a war crimes tribunal quickly garnered the two-thirds support required for passage in Liberia's House of Representatives. Weah subsequently walked back his support for the court, however, and it remains to be seen whether Weah's announcement paves the way for the creation of a court and/or the implementation of other transitional justice measures. U.S. Judicial Responses Some perpetrators of wartime atrocities have faced justice abroad, including in the United States. In 2009, Charles Taylor's U.S.-born son, Roy M. Belfast Jr. (AKA Charles "Chuckie" Taylor), was sentenced to 97 years in prison by a U.S. District Court for wartime acts of torture. Belfast remains the only individual prosecuted in the U.S. judicial system specifically for atrocities committed during Liberia's conflicts. Others have faced immigration-related charges, however, often in relation to fraud or perjury linked to nondisclosure of involvement in wartime abuses in applications for U.S. asylum, residency, or citizenship. Several Liberian nationals have been convicted on such offenses, which can carry lengthy prison sentences and/or result in deportation and loss of citizenship or residency permission. Former armed faction leader George Boley was deported from the United States in 2012 in connection with his involvement in the use of child soldiers. This marked the first deportation under the Child Soldiers Accountability Act ( P.L. 110-340 ), which made use of child soldiers a ground for deportation from the United States. U.S. Relations and Assistance As noted above, the United States played a key role in Liberia's founding, and bilateral ties generally have been close, characterized by substantial U.S. assistance. U.S. engagement in Liberia expanded significantly during the administration of President Sirleaf, under successive U.S. Administrations and with bipartisan support from Congress. Sirleaf addressed a joint session of Congress in 2006, and between FY2006 and FY2018, Congress appropriated over $2.1 billion in State Department- and USAID-administered aid to Liberia to support stabilization, development, security sector reform, and health programs. This total does not include assistance provided via other U.S. agencies and substantial Millennium Challenge Corporation (MCC) aid funding (see below). It also excludes U.S. funding for UNMIL provided through assessed contributions to the U.N. peacekeeping budget, as well as U.S. support for Liberia's Ebola response or programs funded through regionally or centrally managed programs. The Trump Administration has expressed support for strong U.S.-Liberia ties. In late 2019, Assistant Secretary of State for African Affairs Tibor Nagy hosted the fourth U.S.-Liberia Partnership Dialogue, a high-level diplomatic engagement that most recently focused on "youth engagement, trafficking in persons, economic growth, and strengthening health and education systems." Congress has continued to appropriate sizable bilateral foreign assistance for the country (see below), and has held hearings on its development and governance prospects. Congress also has fostered relations through a House Democracy Partnership (HDP) program with the Liberian legislature, which is one of 21 HDP partner legislatures worldwide. Launched in 2006, the Liberia HDP program has focused on the development of Liberian parliamentary capacity, including through peer-to-peer visits. In October 2019, five Members of Congress visited Liberia, where they met with various legislators and President Weah. Immigration Issues. Liberian immigration to the United States has played a significant role in bilateral relations. According to the U.S. Census Bureau, there were roughly 85,000 foreign-born individuals from Liberia living in the United States in 2018 (latest available). Liberians in the United States first received Temporary Protected Status (TPS) in 1991 during the first civil war. In the years since, qualifying Liberians have been granted TPS and/or Deferred Enforced Departure (DED)âtemporary blanket relief from removal provided by the Presidentâin the context of Liberia's conflicts and, later, the Ebola outbreak. Efforts to extend the immigration status of Liberians eligible for such protections have drawn bipartisan congressional support. In March 2019, three days before DED was to expire for certain Liberians resident in the United States since 2002, President Trump reaffirmed the termination but extended the wind-down period through March 30, 2020. In his memorandum, President Trump stated that "Extending the wind-down period will preserve the status quo while the Congress considers remedial legislation" to provide Liberian DED beneficiaries with relief from removal. Congress ultimately granted such relief in the National Defense Authorization Act for 2020 ( P.L. 116-92 ), which directs the Secretary of Homeland Security to adjust the status of eligible Liberian applicantsâthose continuously present in the United States since November 20, 2014, or the immediate family of such individuals, among other criteriaâto lawful permanent resident (LPR) status. Current U.S. Assistance Appropriated State Department and USAID-administered assistance for Liberia totaled $112.3 million in FY2018 and $96.5 million in FY2019. Recent U.S. aid largely has focused on health system strengthening and support for public service delivery, civil society capacity building, agriculture sector development, and justice sector improvements. Most U.S. development assistance is implemented by nongovernmental organizations, but the United States has a direct government-to-government financing agreement with Liberia's Ministry of Health that supports health service delivery. The State Department has funded programs to train, equip, advise, and professionalize the Armed Forces of Liberia (AFL), which was established with U.S. support after Liberia's second civil war, and to build the capacity of civilian law enforcement. DOD has conducted periodic trainings for AFL personnel and provided support to Liberia's defense ministry. Liberia also benefits from a State Partnership Program with the Michigan National Guard. The country hosts 94 Peace Corps Volunteers (PCVs) working on projects related to education and health. In December 2019, the U.S. Embassy withdrew PCVs from several regions due to liquidity challenges associated with withdrawing money from local banks. FY2020 aid allocations for Liberia pursuant to P.L. 116-94 have yet to be made public. The Administration requested $32.6 million in State Department- and USAID-administered aid for Liberia in FY2021, which would represent a 66% decrease from FY2019 appropriations. In successive years, Congress has appropriated aid for Liberia far in excess of the levels proposed in the Trump Administration's budget requests. Millennium Challenge Corporation (MCC) Engagement Liberia is currently implementing a five-year, $256.7 million MCC C ompact that entered into force in 2016. The Compact targets two constraints to economic growth: (1) a lack of access to reliable and affordable electricity, and (2) inadequate road infrastructure. The energy project seeks to provide a new hydropower turbine to the Mt. Coffee Hydropower Plant, train electricity sector personnel, and support the creation of an independent energy sector regulator. The roads project aims to build the capacity of Liberian authorities to plan road maintenance. Liberia previously benefitted from a $15 million MCC Threshold Program (2010-2013) focused on expanding girls' access to education, enhancing land rights and access, and promoting trade. In FY2019 and FY2020, Liberia did not secure a passing grade on half of its MCC Scorecardâa prerequisite for a potential second compact. According to its FY2020 scorecard, Liberia failed to meet standards in fiscal and trade policy, regulatory quality, inflation control, land rights and access, government effectiveness, rule of law, and a range of human development measures. Outlook Pressures on Weah's administration are likely to mount. State finances are under increasing strain due to weak economic growth, poor tax administration, declining donor aid, and the departure of UNMIL, which came to play a key role in Liberia's economy. At a time when the government faces popular expectations for dividends from Liberia's postwar transitionâincluding for better infrastructure, improved public services, job creation, and poverty reductionâsurging inflation and a depreciation of the Liberian dollar have contributed to falling purchasing power, rising poverty, and a mounting food security crisis. The IMF has welcomed austerity measures on the part of the government, including cuts to the public sector wage bill, and in late 2019 approved a four-year, $213.6 million program to support macroeconomic adjustments and other reforms. Austerity policies are likely to be domestically unpopular, however, and it remains to be seen whether the Weah administration continues to pursue reforms that may be politically challenging. Efforts to address corruption and other governance demands are likely to encounter pushback from key segments of Liberia's political landscape. Corruption has been a longstanding concern in Liberia and remains prevalent throughout the government, according to the State Department, which has documented a "culture of impunity" in the civil service. Any attempts to enact meaningful anti-corruption measures may thus founder on a lack of political will from legislators and other officials who profit from the current system. Meanwhile, Weah's stated commitment to address mounting calls from civil society and some legislators for postwar transitional justice measures has met with opposition from some legislators who are central to his political coalition. Recent protests and instances of inflammatory rhetoric have raised concerns over political tensions in the country. In May 2019, the U.S. Embassy condemned ethnically divisive statements by politicians, reproaching those who "incite unlawful acts through ill-considered rhetoric that could jeopardize Liberia's hard-won peace and security." The U.S. Embassy also has warned Liberia's opposition against using charged rhetoric, as it has called on the Weah administration to respect political freedoms. Mounting socioeconomic pressures and calls for governance reform and postwar accountability are key challenges facing Liberia's fledgling democracy; how the country's political class responds to such forces will have implications for Liberia's trajectory. U.S.-Liberia ties remain close, and the United States appears poised to continue supporting the country's development, albeit with potentially lower aid allocations than in past years. The United States continues to exert significant influence in the country, and Liberian authorities appear receptive to U.S. engagement, as suggested by President Weah's recent suspension of an official whom the U.S. ambassador had accused of promoting societal divisions. At the same time, the Weah administration's mismanagement of donor assistance may be of concern to some Members of Congress, as may enduring corruption, rising political tensions, persistent institutional weaknesses, and continued inaction on transitional justice measures. Members of Congress may continue to debate the relative effectiveness of various tools for advancing U.S. interests in Liberia, including diplomacy, foreign assistance, and possible punitive measures.	Summary:	gov_report	1,024	null	31
crs_R46147	crs_R46147_0	You are given a report by a government agency. Write a one-page summary of the report. Report: C ompanies that provide cable television service (cable operators) are subject to regulation at the federal, state, and local levels. Under the Communications Act of 1934 (Communications Act), as amended, the Federal Communications Commission (FCC or Commission) exercises regulatory authority over various operational aspects of cable serviceâsuch as technical standards governing signal quality, ownership restrictions, and requirements for carrying local broadcast stations. At the same time, a cable operator must obtain a "franchise" from the relevant state or local franchising authorities for the region in which it seeks to provide cable services. Franchising authorities often require cable operators to meet certain requirements, provide certain services, and pay fees as a condition of their franchise. As a result, the franchising process is an important component of cable regulation. In the early history of cable regulation, the FCC did not interfere with franchising authority operations, opting instead for a system of "deliberately structured dualism." The Cable Communications Policy Act of 1984 (Cable Act) codified this dualist structure by adding Title VI to the Communications Act. Title VI requires cable operators to obtain franchises from state or local franchising authorities and permits these authorities to continue to condition the award of franchises on an operator's agreement to satisfy various requirements. However, Title VI also subjects franchising authorities to a number of important statutory limitations. For instance, franchising authorities may not charge franchise fees greater than 5% of a cable operator's gross annual revenue and may not "unreasonably refuse" to award a franchise. As explained below, the FCC issued a series of orders restricting the requirements and costs that franchising authorities may impose on cable operators. The FCC issued its first such order in 2007 (First Order) after gathering evidence suggesting that some franchising authorities were imposing burdensome requirements on new entrants to the cable market. The First Order clarified when practices by franchising authorities, such as failing to make a final decision on franchise applications within time frames specified in the order, amount to an "unreasonabl[e] refus[al]" to award a franchise in violation of the Cable Act. The First Order also provided guidance on which costs count toward the 5% franchise fee cap, and it maintained that franchising authorities could not refuse to grant a franchise based on issues related to non-cable services or facilities. The U.S. Court of Appeals for the Sixth Circuit (Sixth Circuit) upheld the First Order in its 2008 decision in Alliance for Community Media v. FCC . Shortly after issuing the First Order, the FCC adopted another order (Second Order), extending the First Order's rulings to incumbent cable operators as well as new entrants. In a later order responding to petitions for reconsideration (Reconsideration Order), the FCC affirmed the Second Order's findings and further clarified that "in-kind" (i.e., noncash) payments exacted by franchising authorities, even if related to the provision of cable service, generally count toward the maximum 5% franchise fee. In 2017, the Sixth Circuit reviewed aspects of the Second Order and Reconsideration Order in its decision in Montgomery County v. FCC , upholding some rules and vacating others. In response, the FCC adopted a new order on August 1, 2019 (Third Order). The Third Order seeks to address the defects identified by the Sixth Circuit by clarifying the Commission's reasoning for counting cable-related, in-kind payments toward the 5% franchise fee cap and for applying the First Order's rulings to incumbent cable operators. The Third Order also explicitly asserts the Cable Act's preemption of state and local laws to the extent they impose fees or other requirements on cable operators who provide non-cable service, such as broadband internet, over public rights-of-way. Some municipalities have criticized this order for, among other things, hampering their ability to control public rights-of-way and reducing their ability to ensure the availability of public, educational, and government (PEG) programming in their communities. Several cities have filed legal challenges to the order that are currently before the Sixth Circuit. As an aid to understanding the complex and evolving nature of the law in this area, this report provides a basic overview of the federal legal framework governing the cable franchising process. The report begins with a historical overview of the law's evolution, from the Communications Act through the Cable Act and its later amendments, to the FCC's various orders interpreting the act. Next, the report details several key issues that have arisen from the FCC's orders, specifically (1) the circumstances under which a franchising authority might be found to have unreasonably refused to award a franchise; (2) the types of expenditures that count toward the 5% cap on franchise fees; and (3) the extent to which Title VI allows franchising authorities to regulate "mixed-use" networks, that is, networks through which a cable operator provides cable service and another service such as telephone or broadband internet. The report concludes with a discussion of other legal issues that may arise from pending challenges to the FCC's Third Order and offers some considerations for Congress. A summary of federal restrictions on local authority to regulate cable operators and a glossary of some terms used frequently in this report are found in the Appendix . Historical Evolution of the Federal Legal Framework for Cable Regulation Regulation of Cable Services Prior to 1984 The FCC's earliest attempts to regulate cable television relied on authority granted by the Communications Act, a legal framework that predated cable television's existence. The Communications Act brought all wire and radio communications under a unified federal regulatory scheme. The act also created the FCC to oversee the regulatory programs prescribed by the Communications Act. Title II of the act gave the FCC authority over "common carriers," which principally were telephone service providers. Title III governed the activities of radio transmission providers. The FCC's Title III jurisdiction encompasses broadcast television transmitted via radio signals. For the first half of the 20 th Century, when virtually all commercial television broadcast in this manner, Title III thus gave the FCC regulatory authority over this industry. In the late 1940s and early 1950s, however, municipalities with poor broadcast reception began experimenting with precursors to modern cable systems. These areas erected large "community antennas" to pick up broadcast television signals, and the antenna operators routed the signals to residential customers by wire, or "cable." Through the 1950s, the FCC declined to regulate these systems, initially known as "Community Antenna Television" systems and later simply as "cable television." The FCC reasoned that cable television was neither a common carrier service subject to Title II regulation nor a broadcasting service subject to Title III regulation. The FCC changed course in a 1966 order in which it first asserted jurisdiction over cable television. The Commission acknowledged that it lacked express statutory authority to regulate cable systems. Even so, the agency concluded that it had jurisdiction because of cable television's "uniquely close relationship" to the FCC's then-existing regulatory scheme. The Supreme Court affirmed the FCC's authority to regulate cable television in a 1968 decision, relying on the FCC's argument that regulatory authority over cable television was necessary for the FCC's performance of its statutory responsibility to "provid[e] a widely dispersed radio and television service, with a fair, efficient and equitable distribution of service among the several States and communities." Following this reasoning, the Court construed the Communications Act as enabling the FCC to regulate what was "reasonably ancillary" to its responsibilities for regulating broadcast television under Title III. The FCC thereafter maintained regulatory authority over operational aspects of cable television, such as technical standards and signal carriage requirements. However, state and local "franchising authorities" continued to regulate cable operators through the negotiation and grant of franchises. The Commission recognized that cable television regulation ha d an inherent ly local character, insofar as local regulators were better situated to manage rights-of- way and to determine how to divide large urban areas into smaller service areas . As part of the ir franchising process, f ranchising authorities often imposed fees and other conditions on cable operators in exchange for allowing them to use public rights-of- way to construct their cable systems. Federal courts at the time tolerated this local regulation, noting that because cable systems significantly affect public rights-of-way, "government must have some authority . . . to see to it that optimum use is made of the cable medium in the public interest." The Cable Act and Its Amendments The Cable Communications Policy Act of 1984 (Cable Act) was the first federal statutory scheme to regulate expressly cable television. The act's purposes, as defined by Congress, included "assur[ing] that cable systems are responsive to the needs and interests of the local community," providing the "widest possible diversity of information sources," promoting competition, and minimizing unnecessary regulation in the cable industry. The House Energy and Commerce Committee report accompanying the legislation explained that the act was intended to preserve the "critical role" of municipal governments in the franchising process, while still making that power subject to some "uniform federal standards." To these ends, the Cable Act added Title VI to the Communications Act to govern cable systems. Specifically, Section 621of Title VI preserved the franchising authorities' power to award franchises and required cable operators to secure franchises as a precondition to providing services. Title VI also permits franchising authorities to require that cable operators designate "channel capacity" for PEG use or provide "institutional networks" ("I-Nets"). But the power of franchising authorities is limited to regulating "the services, facilities, and equipment provided by a cable operator," such as by prohibiting franchising authorities from regulating "video programming or other information services." Section 622 of Title VI allows franchising authorities to charge fees to cable operators as a condition of granting the franchise, but it caps those fees at 5% of the operator's gross annual revenue from providing cable services. Section 622 defines "franchise fee" to include "any tax, fee, or assessment of any kind imposed by a franchising authority . . . on a cable operator or a cable subscriber, or both, solely because of their status as such[.]" Franchise fees do not include taxes or fees of "general applicability," capital costs incurred by the cable operator for PEG access facilities (PEG capital costs exemption), and any "requirements or charges incidental to the awarding or enforcing of the franchise" (incidental costs exemption). Congress amended Title VI in the Cable Television Consumer Protection and Competition Act of 1992, with a stated goal of increasing competition in the cable market. Specifically, Congress amended Section 621 to prohibit the grant of exclusive franchises and to prevent franchising authorities from "unreasonably refus[ing] to award an additional competitive franchise." Congress also granted potential cable operators the right to sue a franchising authority for refusing to award a franchise. Congress amended the Cable Act again in 1996 to further promote competition in the cable television marketplace by enabling telecommunications providers regulated under Title II of the Communications Act (i.e., telephone companies) to offer video programming services. Congress repealed a provision banning telecommunications providers from offering video programming to customers in their service area and added a provision governing the operation of "open video systems," a proposed competitor to cable systems. These amendments also added provisions barring franchising authorities from conditioning the grant of a franchise on a cable operator's provision of telecommunications services or otherwise requiring cable operators to obtain a franchise to operate a telecommunications service. FCC Orders In the decades following the passage of the Cable Act and its amendments, many phone companies upgraded their networks to enter the cable market. To streamline the process for these new entrants, the FCC issued orders interpreting the franchising provisions of Title VI. The four orders discussed in this sectionâthe First, Second, Reconsideration, and Third Ordersâeach address a range of topics and in some cases retread topics covered by an earlier order. Table 1 summarizes the orders. In 2007, after gathering evidence suggesting that some local and municipal governments were imposing burdensome demands on new entrants, the FCC adopted the First Order. The Commission observed that the franchising process had prevented or delayed the entry of telephone companies into the cable market. The First Order thus sought to reduce entry barriers by clarifying when Title VI prohibits franchising authorities from imposing certain franchise conditions on new entrants. The FCC gave examples of practices by franchising authorities that constitute an "unreasonable refusal" to award a franchise, such as 1. a delay in making a final decision on franchise applications beyond the time frames set forth in the order; 2. requiring cable operators to "build out" their cable systems to provide service to certain areas or customers as a condition of granting the franchise; 3. imposing PEG and I-Net Requirements beyond those imposed on incumbents; and 4. requiring that new cable operators agree to franchise terms that are substantially similar to those agreed to by incumbent cable operators (called "level-playing-field requirements"). The First Order further clarified when certain costs counted toward the 5% franchise fee cap and maintained that franchising authorities could not refuse to grant a franchise based on issues related to non-cable services or facilities. Several franchising authorities and their representative organizations challenged the legality of the Order in the Sixth Circuit. But the Sixth Circuit denied those challenges in Alliance for Community Media v. FCC , upholding both the FCC's authority to issue rules construing Title VI and the specific rules in the First Order itself. Although the First Order applied only to new entrants to the cable market, the FCC shortly thereafter adopted the Second Order, extending many of the First Order's rulings to incumbent cable television service providers. Following the release of the Second Order, the Commission received three petitions for reconsideration, to which it responded in the Reconsideration Order in 2015. In the Reconsideration Order, the FCC affirmed its conclusions from the Second Order applying its earlier rulings to incumbent cable operators. The Reconsideration Order also clarified that "in-kind" (i.e., noncash) payments exacted by franchising authorities, even if unrelated to the provision of cable service, may count toward the maximum 5% franchise fee allowable under Section 622. In 2017, in Montgomery County v. FCC , the Sixth Circuit vacated the FCC's determinations in the Second Order and Reconsideration Order on both issues. Following the ruling in Montgomery County, the Commission started a new round of rulemaking and, on August 1, 2019, adopted another order, the Third Order, addressing the issues raised by the Sixth Circuit. In the Third Order, the FCC clarified its basis for counting in-kind payments toward the 5% franchise fee cap, provided additional reasoning for applying the First Order's rulings to incumbent cable operators, and preempted state and local regulation inconsistent with Title VI. While prior orders applied only to local franchising authorities, the Third Order extended the Commission's rules in all three orders to state-level franchising authorities, concluding that there was "no statutory basis for distinguishing between state- and local-level franchising actions." This report addresses issues raised in these various orders in greater detail below. Key Legal Issues in Cable Franchising As the foregoing discussion reflects, the FCC's post-2007 orders have focused on several key issues within Title VI's framework. Most notably, the Commission has addressed (1) when certain franchise requirements amount to an "unreasonable refusal" to award the franchise under Section 621; (2) the types of costs that are subject to the 5% franchise fee cap under Section 622; and (3) the extent to which franchising authorities may regulate "mixed-use" networks operated by cable operators. This section first reviews the relevant statutory provisions from which each of these three issues arise and then discusses the FCC's interpretations of those provisions. Unreasonable Refusal to Award a Franchise Title VI prohibits franchising authorities from "unreasonably refus[ing]" to grant a franchise to a cable operator. In the First Order, the FCC identified specific types of franchising conditions or practices that violate the unreasonable refusal standard, such as failing to process an application within certain time periods. The Sixth Circuit reviewed and upheld the First Order's interpretation of this standard, which remains in effect. Statutory Provisions Governing the "Unreasonable Refusal" Standard Title VI allows franchising authorities to condition a franchise on the cable operator performing or meeting certain requirements. Sections 621(a)(4)(B) and 621(b)(3)(D) explicitly allow franchising authorities to require cable operators to provide PEG channel "capacity, facilities, or financial support" and to provide I-Net "services or facilities." Section 621(a)(1), however, imposes a significant limitation on franchising authorities' ability to impose such conditions. Under that provision, franchising authorities may not "grant an exclusive franchise" or "unreasonably refuse to award an additional competitive franchise." FCC Interpretations of the "Unreasonable Refusal" Standard In the First Order, the FCC clarified when certain practices or requirements amount to an unreasonable refusal of a new franchise under Section 621(a)(1) of Title VI. The FCC gave four specific examples of unreasonable refusals: (1) delaying a final decision on franchise applications; (2) requiring cable operators to "build out" their cable systems to provide service to certain areas or customers as a condition of granting the franchise; (3) imposing PEG and I-Net requirements that are duplicative of, or are more burdensome than, those imposed on incumbents; and (4) requiring that new cable operators agree to franchise terms that are substantially similar to those agreed to by incumbent cable operators (the "level-playing-field requirements"). As for delays in acting on a franchise application, the FCC stated that a franchising authority unreasonably refuses a franchise when it subjects applicants to protracted negotiations, mandatory waiting periods, or simply a slow-moving franchising process. To prevent such delays, the FCC set decision deadlines of 90 days for applications by entities with existing access to rights-of-way and six months for applications by entities without such access. Once these time periods expire, franchise applications are deemed granted until the franchising authority takes final action on the application. As for build-out requirements, the FCC stated that requiring new franchise applicants to build out their cable systems to cover certain areas may constitute an unreasonable refusal of a franchise. The Commission explained that what constitutes an "unreasonable" build-out requirement may vary depending on the applicant's existing facilities or market penetration, but it clarified that certain build-out requirements are per se unreasonable refusals under Section 621. The FCC also determined that certain PEG and I-Net terms and conditions constitute an unreasonable refusal. Specifically, the Commission determined that PEG and I-Net requirements that are "completely duplicative" (i.e., a requirement for capacity or facilities that would not provide "additional capability or functionality, beyond that provided by existing I-Net facilities") are unreasonable unless redundancy serves a public safety purpose. The FCC also viewed PEG requirements as unreasonable when such requirements exceeded those placed on incumbent cable operators. Lastly, the FCC determined that level-playing-field requirements in local laws or franchise agreements amount to an unreasonable refusal of a franchise. The Commission explained that such requirements are unreasonable because new cable entrants are in a "fundamentally different situation" from incumbent operators. The FCC therefore concluded that these mandates "unreasonably impede competitive entry" into the cable market and are unreasonable refusals. As discussed above, several franchising authorities and their representative organizations unsuccessfully challenged the FCC's interpretation of the unreasonable refusal standard in Alliance for Community Media v. FCC , in which the Sixth Circuit upheld the First Order in its entirety. Applying the framework set forth in Chevron USA , Inc. v. Natural Resources Defense Council, Inc. âwhich guides courts when reviewing agency regulations that interpret the agency's governing statuteâthe court reasoned that the phrase "unreasonably refuse" is inherently ambiguous because the word "unreasonably" is subject to multiple interpretations. The court then held that the First Order's interpretation of this phrase was entitled to deference because it was reasonable and not unambiguously foreclosed by Title VI. As a result, the First Order's rules on what constitutes an unreasonable refusal remain binding on franchising authorities. Accordingly, if a franchising authority denies a cable operator's franchise request for a reason the FCC's has deemed unreasonableâsuch as the cable operator's refusal to accept build-out or level-playing-field requirementsâthe cable operator may sue the franchising authority for "appropriate relief" as determined by the court. Alternatively, if the franchising authority fails to make a final decision within the allotted time, the franchise will be deemed granted until the franchising authority makes a final decision. Franchise Fees Title VI limits franchising authorities to charging cable operators "franchise fees" of up to 5% of the cable operator's revenue, subject to specific exceptions. However, the types of obligations limited by the 5% cap have been a point of contention. The FCC, in its various orders, has clarified the scope of the exceptions to the 5% cap (in particular, the PEG capital costs and incidental costs exemptions); it has further explained that, unless they fall under one of the express exceptions, non-monetary (or "in-kind") contributions are subject to the 5% cap even if they are related to the provision of cable service. Litigation over the Commission's current interpretations of what constitutes a "franchise fee" is ongoing. Statutory Provisions Governing Franchise Fees Section 622 allows franchising authorities to charge franchise fees to cable providers, but it subjects such fees to a cap. For any "twelve-month period," franchise fees may not exceed 5% of the cable operator's gross annual revenues derived "from the operation of the cable system to provide cable service." Section 622 broadly defines "franchise fees" to include "any tax, fee, or assessment of any kind imposed by a franchising authority or other governmental entity on a cable operator or cable subscriber, or both, solely because of their status as such." However, Section 622 exempts certain costs from this definition, including 1. "any tax, fee, or assessment of general applicability"; 2. "capital costs which are required by the franchise to be incurred by the cable operator for public, educational, or governmental access facilities" (PEG capital costs exemption) ; and 3. "requirements or charges incidental to the awarding or enforcing of the franchise, including payments for bonds, security funds, letters of credit, insurance, indemnification, penalties, or liquidated damages" (incidental costs exemption). FCC Interpretations of the Statutory Franchise Fee Provisions The FCC has provided guidance on the types of expenses subject to the 5% cap. In particular, it has clarified (1) when non-monetary (or "in-kind") contributions must be included in the calculation of franchise fees subject to the 5% cap; (2) the scope of the PEG capital costs exemption; and (3) the scope of the incidental costs exemption. In-Kind Contributions The FCC has elaborated on the types of in-kind contributions that are subject to the 5% cap. In the First Order, the Commission maintained that in-kind fees unrelated to provision of cable serviceâsuch as requests that the cable operator provide traffic light control systemsâare subject to the 5% cap because they are not specifically exempt from the "franchise fee" definition. In the Reconsideration Order, the agency further clarified that the First Order's conclusions were not limited to in-kind exactions unrelated to cable service and that cable-related in-kind contributions (such as providing free or discounted cable services to the franchising authority) could also count toward the 5% cap. The Sixth Circuit vacated this conclusion, however, in Montgomery County v. FCC . The Sixth Circuit recognized that Section 622's definition of "franchise fee" is broad enough to encompass "noncash exactions." But the court explained that just because the term "can include noncash exactions, of course, does not mean that it necessarily does include every one of them." The court faulted the FCC for giving "scarcely any explanation at all" for its decision to expand its interpretation of "franchise fee" to include cable-related exactions, and held that this defect rendered the Commission's interpretation "arbitrary and capricious" in violation of the Administrative Procedure Act (APA). Following the Sixth Circuit's decision in Montgomery County , the Commission issued the Third Order, in which it detailed its reasons for including cable-related in-kind contributions in the 5% cap. The FCC first explained that, as recognized by the court in Montgomery County , the definition of "franchise fee" is broad enough to encompass in-kind contributions as well as monetary fees. The Commission also acknowledged the Sixth Circuit's observation that just because the definition is broad enough to include in-kind fees "does not mean that it necessarily does include everyone one of them." Nevertheless, the FCC maintained that cable-related in-kind contributions should be included in the fee calculation because there is nothing in the definition that "limits in-kind contributions included in the franchise fee." The Commission further reasoned that Section 622's specific exceptions do not categorically exclude such expenses, as there is no "general exemption for cable-related, in-kind contributions." Along with its construction of Section 622, the FCC rejected arguments that "other Title VI provisions should be read to exclude costs that are clearly included by the franchise fee definition," such as the provision that allows franchising authorities to require that cable operators designate channel capacity for PEG use. According to the Commission, "the fact that the Act authorizes [franchising authorities] to impose such obligations does not mean that the value of these obligations should be excluded from the five percent cap on franchise fees." While the Third Order concluded that cable-related, in-kind contributions are not categorically exempt from the 5% cap, it recognized that certain types of cable-related in-kind contributions might be excluded. For instance, the FCC concluded that franchise terms requiring a cable operator to build out its system to cover certain localities or to meet certain customer service obligations are not franchise fees. The Commission reasoned that these requirements are "simply part of the provision of cable service" and are not, consequently, a "tax, fee, or assessment." Furthermore, the FCC noted that the PEG capital costs exemption, which exempts costs associated with the construction of public, educational, or governmental access facilities, covers certain cable-related, in-kind expenses, and, as discussed below, the PEG capital costs exemption provides guidance on the types of costs to which it applies. On the other hand, the agency also identified specific cable-related, in-kind expenses that are subject to the 5% cap, such as franchise terms requiring cable operators to provide free or discounted cable service to public buildings or requiring operators to construct or maintain I-Nets. Lastly, the Third Order concluded that, for purposes of the 5% cap, cable-related in-kind services should be measured by their "fair market value" rather than the cost of providing the services. The FCC reasoned that fair market value is "easy to ascertain" and "reflects the fact that, if a franchising authority did not require an in-kind assessment as part of its franchise, it would have no choice but to pay the market rate for services it needs from the cable operator or another provider." In sum, despite the setback for the Commission in Montgomery County , the FCC has maintained its position that in-kind contributionsâeven if related to cable serviceâare not categorically exempt from the 5% cap. The issue is not settled, however. As discussed later, the Third Order is being challenged in court, and it remains to be seen whether the FCC's position will ultimately be upheld. PEG Capital Costs Exemption The FCC's interpretation of the PEG capital costs exemption has evolved. In the First Order, the Commission interpreted this exemption as applying to the costs "incurred in or associated with" constructing the facilities used to provide PEG access. However, the FCC broadened its interpretation in the Third Order. In the Third Order, the Commission conceded that its earlier statements were "overly narrow" because the plain meaning of the term "capital costs" can include equipment costs as well as construction costs. Consistent with this analysis, the FCC concluded that the term "capital costs" is not limited to construction-related costs, but can also include equipment purchased for the use of PEG access facilities, "such as a van or a camera." The Third Order noted that capital costs "are distinct from operating costs"âthat is, the "costs incurred in using" PEG access facilitiesâand that operating costs are not exempt from inclusion in the franchise fee calculation. While the Third Order provided additional clarification on the PEG capital costs exemption, it left at least one issue unresolved. Specifically, the FCC determined there was an insufficient record before it to conclude whether "the costs associated with the provision of PEG channel capacity" fall within the exclusion. Consequently, it deferred consideration of this issue and stated that, in the meantime, channel capacity cost "should not be offset against the franchise fee cap." Ultimately, the scope of the PEG capital costs exemption remains in flux. The FCC's Third Order is being challenged in court, and it is possible the agency's interpretation of the PEG capital costs exemption could be vacated. Even if the Third Order is upheld, it left unresolved whether the costs of providing PEG channel capacity fall under the capital costs exclusion; thus, while franchise authorities are not required to offset such costs against the 5% cap in the interim, it is unclear whether these costs will count toward the franchise fee cap in the long run. Incidental Costs Exemption While the FCC has articulated its position on in-kind contributions and the PEG capital costs exemption over the course of several orders, the Commission largely addressed its interpretation of the "incidental costs" exemption in the First Order. There, the FCC read the exemption narrowly to include only those expenses specifically listed in Section 622(g)(2)(D)ânamely, "bonds, security funds, letters of credit, insurance, indemnification, penalties, or liquidated damages." The Commission explained that it did not interpret unlisted costsâincluding, among other things, attorney fees, consultant fees, and in-kind paymentsâto be "incidental" costs, based on the text of the exemption and the legislative history of Section 622. The FCC noted, however, that certain "minor expenses" beyond those listed in the statute may be included as "incidental costs," such as application or processing fees that are not unreasonably high relative to the cost of processing the application. In Alliance for Community Media v. FCC , the Sixth Circuit denied petitions challenging the First Order's interpretation of the "incidental costs" exemption. Petitioners argued that the plain meaning of the phrase "incidental to" meant that the fee had to be "related to the awarding or enforcing of the franchise." According to petitioners, the FCC's per se listing of non-incidental feesâsuch as attorney and consultants' feesâcontradicted this plain meaning. The court, however, upheld the FCC's interpretation. The court reasoned that the phrase "incidental to" lent itself to multiple interpretations, including both the FCC's and the petitioners' readings. Consequently, it concluded under Chevron that the "FCC's rules regarding fees" qualified as "reasonable constructions" of Sections 622(b) and 622(g)(2)(D) that are entitled to deference. In sum, unlike in-kind contributions and the PEG capital costs exemption, the FCC's interpretation of the incidental costs exemption is not subject to any ongoing legal challenge. Consequently, with the exception of the "minor expenses" mentioned in the First Order, only those expenses listed in Section 622(g)(2)(D) (bonds, security funds, etc.) are exempt from the 5% cap under the incidental costs exemption. Franchising Authority over Mixed-Use Networks A continuing area of disagreement between the FCC and franchising authorities has been the extent to which franchising authorities can regulate non- cable services that a cable operator provides over the same network used for its cable service (e.g., a "mixed-use network"). From the First Order onward, the Commission has maintained that, based on its interpretation of various Title VI provisions, franchising authorities may not regulate the non-cable services aspects of mixed-use networks. While the First Order applied this rule only to new entrants to the cable market, the Second Order extended it to incumbent cable operators. The Sixth Circuit upheld this rule as applied to new entrants into the cable market, but vacated the FCC's application of it to incumbent cable operators. The Commission sought to cure this defect in the Third Order, and it further clarified that any efforts by state and local governments to regulate non-cable services provided by cable operators, even if done outside the cable franchising process and relying on the state's inherent police powers, are preempted by Title VI. However, given the ongoing legal challenge to the Third Order, this issue, too, remains unsettled. Statutory Provisions Governing Mixed-Use Networks Several Title VI provisions arguably prohibit franchising authorities from regulating non-cable services (such as telephone or broadband internet access service) provided over mixed-use networks, or networks over which an operator provides both cable and non-cable services. Section 602's definition of "cable system" explicitly excludes the "facility of a common carrier" except "to the extent such facility is used in the transmission of video programming directly to subscribers." Further, with respect to broadband internet access service, Section 624(b)(1) states that franchising authorities "may not . . . establish requirements for video programming or other information services." Lastly, Section 624(a) states that "[a] franchising authority may not regulate the services, facilities, and equipment provided by a cable operator except to the extent consistent with [Title VI]." FCC Interpretations of Statutory Provisions Governing Mixed-Use Networks Beginning with the First Order, the FCC has relied on these statutory provisions to clarify the bounds of franchising authority jurisdiction over mixed-use networks. The Commission asserted that a franchising authority's "jurisdiction applies only to the provision of cable services over cable systems." To support its view, the FCC cited Section 602's definition of "cable system," which explicitly excludes common carrier facilities except to the extent they are "used in the transmission of video programming directly to subscribers." The Commission did not address whether video services provided over the internet might are "cable services." The First Order applied only to new entrants to the cable market. However, in the Second Order, the FCC determined that the First Order's conclusions regarding mixed-use networks should apply to incumbent providers because those conclusions "depended upon [the Commission's] statutory interpretation of Section 602, which does not distinguish between incumbent providers and new entrants." The FCC reaffirmed this position in the Reconsideration Order, stating that franchising authorities "cannot . . . regulate non-cable services provided by an incumbent." In Montgomery County v. FCC , however, the Sixth Circuit vacated the FCC's extension of its mixed-use network rule to incumbent cable providers on the ground that this interpretation was arbitrary and capricious. The court explained that the Commission could not simply rely on the reasoning in its First Order because Section 602 did not support an extension of the mixed-use rule to incumbent cable providers. The court observed that the FCC correctly applied its mixed-use rule to new entrantsâwho were generally common carriersâbecause Section 602's definition of "cable system" expressly excludes common carrier facilities. But most incumbents, by contrast, are not common carriers. Consequently, because the Commission did not identify any other "valid basisâstatutory or otherwiseâ" for its extension of its mixed-use rule to non-common carrier cable providers, the court vacated that decision as arbitrary and capricious. Responding to Montgomery County , the FCC's Third Order provides additional support for extending the mixed-use rule to incumbent cable operators. The Order first reiterates that Section 602's definition of "cable system" provides the basis for barring franchising authorities from regulating incumbent cable operators when acting as common carriers, because the definition explicitly excludes common carrier facilities except to the extent they are "used in the transmission of video programming directly to subscribers." Similarly, the Commission concluded that franchising authorities cannot regulate non -common carriers to the extent they provide other services along with cable, in particular, broadband internet access. The Third Order supports that conclusion by reference to Section 624(b)(1)'s command that franchising authorities may not "establish requirements for video programming or other information services ." While "information services" is not defined in Title VI, the FCC concluded that, based on Title VI's legislative history, the term should have the same meaning it has in Title I of the Communications Act. The Commission has interpreted "information service" under Title I of the Communications Act to include broadband internet access service, and the D.C. Circuit has upheld that interpretation. The Third Order also notes that "it would conflict with Congress's goals in the Act" to treat cable operators that are not common carriers differently from those that are common carriers, as allowing franchising authorities to regulate non-common carrier operators more strictly "could place them at a competitive disadvantage." Beyond clarifying that franchising authorities cannot use their Title VI authority to regulate the non-cable aspects of a mixed-use cable system, the Third Order also explicitly preempts state and local laws that "impose[] fees or restrictions" on cable operators for the "provision of non-cable services in connection with access to [public] rights-of-way, except as expressly authorized in [Title VI]." Prior to the Third Order's issuance, for example, the Oregon Supreme Court in City of Eugene v. Comcast upheld the City of Eugene's imposition of a 7% fee on the revenue a cable operator generated from its provision of broadband internet services. Rather than impose the fee as part of the cable franchising process, the city cited as its authority an ordinance imposing a "license-fee" requirement on the delivery of "telecommunications services" over the city's public rights-of-way. The court held that Title VI did not prohibit the city from imposing the fee, as it was not a "franchise fee" subject to the 5% cap because the ordinance applied to both cable operators and non-cable operators. Thus, the court reasoned, the city did not require Comcast to pay the fee "solely because of" its status as a cable operator and the franchise fee definition was not met. In the aftermath of the Oregon Supreme Court's decision, other state and local governments relied on sources of authority outside of Title VI, such as their police power under state law, to regulate the non-cable aspects of mixed-use networks. The Third Order rejects City of Eugene 's reading of Title VI. The FCC reasoned that Title VI establishes the "basic terms of a bargain" by which a cable operator may "access and operate facilities in the local rights-of-way, and in exchange, a franchising authority may impose fees and other requirements as set forth and circumscribed in the Act." Although Congress was "well aware" that cable systems would carry non-cable services as well as cable, it nevertheless "sharply circumscribed" the authority of state and local governments to "regulate the terms of this exchange." Consequently, the Commission concluded, the Third Order "expressly preempt[s] any state or local requirement, whether or not imposed by a franchising authority, that would impose obligations on franchised cable operators beyond what Title VI allows." The Third Order also concluded that the FCC has authority to preempt such laws because, among other things, Section 636(c) of Title VI expressly preempts any state or local law" that is "inconsistent with this chapter." Thus, in the FCC's view, wherever such express preemption provisions are present, the "Commission has [been] delegated authority to identify the scope of the subject matter expressly preempted." In sum, while franchising authorities may not use the cable franchising process to regulate non-cable services provided over mixed-use networks by new entrants to the cable market, the FCC's extension of this rule to incumbents has not yet been upheld in court. Furthermore, the Third Order's broad preemption of any state and local law regulating cable operators' use of public rights-of-way beyond what Title VI allows raises even more uncertainty. As discussed further below, the Third Order's preemption raises difficult questions about the extent to which the Commission may rely on Title VI to preempt not only state and local cable franchising requirements but also generally applicable state regulations and ordinances that regulate non-cable services provided by cable operators. Legal Challenges Several cities, franchising authorities, and advocacy organizations have filed petitions for review of the Third Order in various courts of appeals, and these petitions have been consolidated and transferred to the Sixth Circuit. In their petitions, the petitioners generally allege that the Third Order violates the Communications Act and the U.S. Constitution and is arbitrary and capricious under the APA. The same parties filed a motion with the FCC to stay the Third Order, which the Commission recently denied. While the petitions challenging the order state their legal theories in general terms, this case will likely raise complex issues of statutory interpretation, as well as administrative and constitutional law. For instance, petitioners could argue, as commenters did during the rulemaking process for the Third Order, that the text and structure of Title VI contradicts the FCC's broad interpretation that a franchise fee should include most cable-related, in-kind expenses. Pointing to provisions such as Section 611(b), which authorizes franchising authorities to impose PEG and I-Net requirements without any reference to the franchise fee provision, some commenters argued that Title VI treats the cost of complying with franchise requirements as distinct from the franchise fee. A reviewing court would likely apply the Chevron framework to resolve such statutory arguments. While it is difficult to predict how a reviewing court would decide any given issue, the Sixth Circuit's decision in Montgomery County indicates that the court might uphold the Third Order's legal interpretation of the franchise fee provision under the Chevron doctrine. Specifically, as discussed above, the Sixth Circuit held that Section 622's definition of franchise fee is broad enough to include "noncash exactions." Given this decision, the Sixth Circuit could potentially hold that the franchise fee definition is broad enough to accommodate the FCC's interpretation and that the FCC's interpretation is reasonable and entitled to deference. Even were the Sixth Circuit to reach that conclusion, however, that is not the end of the analysis. As the Sixth Circuit's decision in Montgomery County also demonstrates, the FCC's rulings may be vacated regardless of whether the Commission's statutory interpretation enjoys Chevron deference if the court concludes that the FCC's interpretation is arbitrary and capricious under the APA. A federal agency's determination is arbitrary and capricious if the agency "has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise." In Montgomery County , the Sixth Circuit held that the FCC had acted arbitrarily and capriciously by failing to give "scarcely any explanation at all" for expanding its franchise fee interpretation to cable-related in-kind expenses and for failing to identify a statutory basis for extending its mixed-use rule to incumbents. While the Commission took pains to address these concerns in the Third Order, it remains to be seen whether a court would find those efforts sufficient or accept other arguments as to why the FCCs interpretations should be held arbitrary and capricious. For instance, those challenging the Third Order might argue that the Commission failed to address evidence that "runs counter" to its rules or failed to consider important counterarguments. One such area of focus for petitioners in their motion to stay the Third Order was the FCC's alleged failure to address potential public safety effects of the Third Order's treatment of cable-related in-kind contributions. In addition, the Third Order's assertion of preemption may come under scrutiny from state or local challengers who seek to regulate mixed-use networks. A recent D.C. Circuit decision struck down the FCC's attempt to preempt "any state or local requirements that are inconsistent with [the FCC's] deregulatory approach" to broadband internet regulation. Additionally, in a recent opinion concurring in the U.S. Supreme Court's denial of a petition for certiorari in a case involving a state's effort to regulate Voice over Internet Protocol service, Justice Thomas, joined by Justice Gorsuch, voiced concerns about allowing the FCC's deregulatory policy to preempt state regulatory efforts. Both the D.C. Circuit and Justices Thomas and Gorsuch expressed skepticism that the FCC has statutory authority to preempt state and local regulation in areas where the FCC itself has no statutory authority to regulate. Cities and local franchising authorities may seize on the reasoning in these opinions to argue that Title VI's preemption provision cannot extend to non-cable services that fall outside Title VI's purview. Lastly, along with statutory interpretation and administrative law issues, challengers to the Third Order may assert constitutional arguments. As mentioned, the Third Order prevents state and local governments from relying on state law to regulate non-cable services provided by cable operators. However, some commenters have argued that the Third Order violates the anti-commandeering doctrine, a constitutional rule that prohibits the federal government from compelling states to administer federal regulations. The Supreme Court recently clarified the anti-commandeering doctrine in Murphy v. NCAA . In Murphy , the Court struck down the Professional and Amateur Sports Protection Act of 1992, which prohibited states from legalizing sports gambling. Justice Alito, writing for the Court, reasoned that the anti-commandeering doctrine prohibits Congress from "issu[ing] direct orders to state legislatures," compelling them to either enact certain legislation or to restrict them from enacting certain legislation. The Court explained that the anti-commandeering doctrine promotes accountability, because, when states regulate at Congress's command, "responsibility is blurred." Justice Alito further explained that the doctrine "prevents Congress from shifting the costs of regulation to the States." The Court contrasted unlawful commandeering with permissible "cooperative federalism" regimes. Under such regimes, Congress allows, but does not require, states to implement a regulatory program according to federal standards, and a federal body implements the program when a state refrains from doing so. According to some commenters, the FCC's Third Order violates the anti-commandeering doctrine because it "effectively command[s] local government[s] to grant right-of-way access on the terms the Commission, not local government or the states set." Further, some commenters, including the National Association of Telecommunications Officers and Advisors and National League of Cities, argue that the Third Order would violate the accountability and cost-shifting principles animating the anti-commandeering doctrine, as explained in Murphy . According to these commenters, the FCC's "mixed-use rule unquestionably blurs responsibility" because residents unhappy with cable operators' use of the right-of-way for non-cable purposes would "blame their local elected officials," and the mixed-use rule would shift cost to local governments by "usurp[ing]" the "compensation local governments may be entitled to for use of the [rights-of-way] for non-cable services." Ultimately, this issue may turn on whether Title VI, as interpreted by the FCC's rules, is a permissible "cooperative federalism" program under Murphy . In its Third Order, the Commission argued Title VI was such a program because it "simply establishes limitations on the scope of [states' authorities to "award franchises" to cable operators] when and if exercised." The FCC further maintained that, rather than "requir[ing] that state or local governments take or decline any particular action," its rules were "simply requiring that, should state and local governments decide to open their rights-of-way to providers of interstate communication services within the Commission's jurisdiction, they do so in accordance with federal standards." It remains to be seen, however, how broadly lower courts will apply Murphy 's cooperative federalism distinction. Considerations for Congress Beyond the various legal arguments discussed above, there are notable disagreements over the practical impact of the FCC's rules. On the one hand, localities and their representative organizations have claimed that the Commission's Third Order will "gut[] local budgets" and that, by subjecting in-kind franchise requirements such as PEG and I-Net requirements to the 5% cap, it will force franchising authorities to "choose between local PEG access and I-Nets, and the important other public services supported by franchise fees." Similarly, the two FCC commissioners who dissented from the Third OrderâJessica Rosenworcel and Geoffrey Starksâmaintained in their dissents that the Third Order was part of a broader trend at the Commission of "cutting local authorities out of the picture" and that it would, among other things, diminish the "value of local public rights-of-way." In response, the FCC's chairman, Ajit Pai, and other Commissioners in the majority contended that the rule would benefit consumers because the costs imposed by franchising authorities through in-kind contributions and fees get "passed on to consumers" and discourage the deployment of new services like "faster home broadband or better Wi-Fi or Internet of Things networks." Given the competing arguments relating to the FCC's interpretation of Title VI's scope, Congress may be interested in addressing the issues raised by the Third Order. For instance, Congress might address the extent to which Section 622's definition of "franchise fee" includes cable-related, in-kind expenses such as PEG and I-Net services. It might also address whether Title VI preempts state and local governments from relying on their police powers or other authorities under state law to regulate non-cable services provided by cable operators. However, Congress also might consider federalism issues implicated by any attempt to prohibit state and local authorities from regulating such services. As discussed in the previous section, the anti-commandeering principle prohibits direct orders to states that command or prohibit them from enacting certain laws, but permits lawful "cooperative federalism" regimes where Congress gives states a choice of either refraining from regulating a particular area or regulating according to federal standards. Thus, Congress may avoid anti-commandeering issues by setting federal standards for regulation of ancillary non-cable services rather than prohibiting states from regulating these services. Appendix. Supplemental Information Federal Standards and Restrictions on Franchising Authority Power The following table summarizes functions and areas traditionally regulated by franchising authorities that are subject to federal standards or federal restrictions. This table is not a summary of all federal requirements and regulations cable operators face under the act, only those that implicate the powers of franchising authorities. Glossary Build-Out Requirement: A requirement placed on a cable operator to provide cable service to particular areas or residential customers. Cable Operator: From the Cable Act, 47 U.S.C. Â§ 522, "[a]ny person or group of persons (A) who provides cable service over a cable system and directly or through one or more affiliates owns a significant interest in such cable system, or (B) who otherwise controls or is responsible for, through any arrangement, the management and operation of such a cable system." Cable Service: One-way transmission of video programming to customers, and any customer interaction required for the selection or use of such video programming. Cable System: A facility designed to provide video programming to multiple subscribers within a community, with limited exceptions. See note 39 , supra , for the precise exceptions. Common Carrier: A person or entity who provides interstate telecommunications service. Franchise: A right to operate a cable system in a given area. Franchise Fee: From the Cable Act, 47 U.S.C. Â§ 542, "any tax, fee, or assessment of any kind imposed by a franchising authority or other governmental entity on a cable operator or cable subscriber, or both, solely because of their status as such," with several exceptions. See the " Franchise Fees " section, supra , for a discussion of some of these exceptions. Franchising Authority: A state or local governmental body responsible for awarding franchises. I-Net: Abbreviation for "institutional network"; a communication network constructed or operated by a cable operator for use exclusively by institutional (non-residential) customers. In-Kind : Non-monetary. Mixed-Use Network: A communication network over which a person or entity provides both cable service and other service(s), such as telecommunications service. PEG: Abbreviation for "Public, Educational, or Governmental." See note 41 , supra , for more discussion of this term. Telecommunications : From the Communications Act, 47 U.S.C. Â§ 153, "the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received." Telecommunications Service: The offering of telecommunications directly to the public for a fee. Title VI: The collected provisions of the Cable Act, as amended. Summary:	null	96	58,345	58,347	58,347	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: C ompanies that provide cable television service (cable operators) are subject to regulation at the federal, state, and local levels. Under the Communications Act of 1934 (Communications Act), as amended, the Federal Communications Commission (FCC or Commission) exercises regulatory authority over various operational aspects of cable serviceâsuch as technical standards governing signal quality, ownership restrictions, and requirements for carrying local broadcast stations. At the same time, a cable operator must obtain a "franchise" from the relevant state or local franchising authorities for the region in which it seeks to provide cable services. Franchising authorities often require cable operators to meet certain requirements, provide certain services, and pay fees as a condition of their franchise. As a result, the franchising process is an important component of cable regulation. In the early history of cable regulation, the FCC did not interfere with franchising authority operations, opting instead for a system of "deliberately structured dualism." The Cable Communications Policy Act of 1984 (Cable Act) codified this dualist structure by adding Title VI to the Communications Act. Title VI requires cable operators to obtain franchises from state or local franchising authorities and permits these authorities to continue to condition the award of franchises on an operator's agreement to satisfy various requirements. However, Title VI also subjects franchising authorities to a number of important statutory limitations. For instance, franchising authorities may not charge franchise fees greater than 5% of a cable operator's gross annual revenue and may not "unreasonably refuse" to award a franchise. As explained below, the FCC issued a series of orders restricting the requirements and costs that franchising authorities may impose on cable operators. The FCC issued its first such order in 2007 (First Order) after gathering evidence suggesting that some franchising authorities were imposing burdensome requirements on new entrants to the cable market. The First Order clarified when practices by franchising authorities, such as failing to make a final decision on franchise applications within time frames specified in the order, amount to an "unreasonabl[e] refus[al]" to award a franchise in violation of the Cable Act. The First Order also provided guidance on which costs count toward the 5% franchise fee cap, and it maintained that franchising authorities could not refuse to grant a franchise based on issues related to non-cable services or facilities. The U.S. Court of Appeals for the Sixth Circuit (Sixth Circuit) upheld the First Order in its 2008 decision in Alliance for Community Media v. FCC . Shortly after issuing the First Order, the FCC adopted another order (Second Order), extending the First Order's rulings to incumbent cable operators as well as new entrants. In a later order responding to petitions for reconsideration (Reconsideration Order), the FCC affirmed the Second Order's findings and further clarified that "in-kind" (i.e., noncash) payments exacted by franchising authorities, even if related to the provision of cable service, generally count toward the maximum 5% franchise fee. In 2017, the Sixth Circuit reviewed aspects of the Second Order and Reconsideration Order in its decision in Montgomery County v. FCC , upholding some rules and vacating others. In response, the FCC adopted a new order on August 1, 2019 (Third Order). The Third Order seeks to address the defects identified by the Sixth Circuit by clarifying the Commission's reasoning for counting cable-related, in-kind payments toward the 5% franchise fee cap and for applying the First Order's rulings to incumbent cable operators. The Third Order also explicitly asserts the Cable Act's preemption of state and local laws to the extent they impose fees or other requirements on cable operators who provide non-cable service, such as broadband internet, over public rights-of-way. Some municipalities have criticized this order for, among other things, hampering their ability to control public rights-of-way and reducing their ability to ensure the availability of public, educational, and government (PEG) programming in their communities. Several cities have filed legal challenges to the order that are currently before the Sixth Circuit. As an aid to understanding the complex and evolving nature of the law in this area, this report provides a basic overview of the federal legal framework governing the cable franchising process. The report begins with a historical overview of the law's evolution, from the Communications Act through the Cable Act and its later amendments, to the FCC's various orders interpreting the act. Next, the report details several key issues that have arisen from the FCC's orders, specifically (1) the circumstances under which a franchising authority might be found to have unreasonably refused to award a franchise; (2) the types of expenditures that count toward the 5% cap on franchise fees; and (3) the extent to which Title VI allows franchising authorities to regulate "mixed-use" networks, that is, networks through which a cable operator provides cable service and another service such as telephone or broadband internet. The report concludes with a discussion of other legal issues that may arise from pending challenges to the FCC's Third Order and offers some considerations for Congress. A summary of federal restrictions on local authority to regulate cable operators and a glossary of some terms used frequently in this report are found in the Appendix . Historical Evolution of the Federal Legal Framework for Cable Regulation Regulation of Cable Services Prior to 1984 The FCC's earliest attempts to regulate cable television relied on authority granted by the Communications Act, a legal framework that predated cable television's existence. The Communications Act brought all wire and radio communications under a unified federal regulatory scheme. The act also created the FCC to oversee the regulatory programs prescribed by the Communications Act. Title II of the act gave the FCC authority over "common carriers," which principally were telephone service providers. Title III governed the activities of radio transmission providers. The FCC's Title III jurisdiction encompasses broadcast television transmitted via radio signals. For the first half of the 20 th Century, when virtually all commercial television broadcast in this manner, Title III thus gave the FCC regulatory authority over this industry. In the late 1940s and early 1950s, however, municipalities with poor broadcast reception began experimenting with precursors to modern cable systems. These areas erected large "community antennas" to pick up broadcast television signals, and the antenna operators routed the signals to residential customers by wire, or "cable." Through the 1950s, the FCC declined to regulate these systems, initially known as "Community Antenna Television" systems and later simply as "cable television." The FCC reasoned that cable television was neither a common carrier service subject to Title II regulation nor a broadcasting service subject to Title III regulation. The FCC changed course in a 1966 order in which it first asserted jurisdiction over cable television. The Commission acknowledged that it lacked express statutory authority to regulate cable systems. Even so, the agency concluded that it had jurisdiction because of cable television's "uniquely close relationship" to the FCC's then-existing regulatory scheme. The Supreme Court affirmed the FCC's authority to regulate cable television in a 1968 decision, relying on the FCC's argument that regulatory authority over cable television was necessary for the FCC's performance of its statutory responsibility to "provid[e] a widely dispersed radio and television service, with a fair, efficient and equitable distribution of service among the several States and communities." Following this reasoning, the Court construed the Communications Act as enabling the FCC to regulate what was "reasonably ancillary" to its responsibilities for regulating broadcast television under Title III. The FCC thereafter maintained regulatory authority over operational aspects of cable television, such as technical standards and signal carriage requirements. However, state and local "franchising authorities" continued to regulate cable operators through the negotiation and grant of franchises. The Commission recognized that cable television regulation ha d an inherent ly local character, insofar as local regulators were better situated to manage rights-of- way and to determine how to divide large urban areas into smaller service areas . As part of the ir franchising process, f ranchising authorities often imposed fees and other conditions on cable operators in exchange for allowing them to use public rights-of- way to construct their cable systems. Federal courts at the time tolerated this local regulation, noting that because cable systems significantly affect public rights-of-way, "government must have some authority . . . to see to it that optimum use is made of the cable medium in the public interest." The Cable Act and Its Amendments The Cable Communications Policy Act of 1984 (Cable Act) was the first federal statutory scheme to regulate expressly cable television. The act's purposes, as defined by Congress, included "assur[ing] that cable systems are responsive to the needs and interests of the local community," providing the "widest possible diversity of information sources," promoting competition, and minimizing unnecessary regulation in the cable industry. The House Energy and Commerce Committee report accompanying the legislation explained that the act was intended to preserve the "critical role" of municipal governments in the franchising process, while still making that power subject to some "uniform federal standards." To these ends, the Cable Act added Title VI to the Communications Act to govern cable systems. Specifically, Section 621of Title VI preserved the franchising authorities' power to award franchises and required cable operators to secure franchises as a precondition to providing services. Title VI also permits franchising authorities to require that cable operators designate "channel capacity" for PEG use or provide "institutional networks" ("I-Nets"). But the power of franchising authorities is limited to regulating "the services, facilities, and equipment provided by a cable operator," such as by prohibiting franchising authorities from regulating "video programming or other information services." Section 622 of Title VI allows franchising authorities to charge fees to cable operators as a condition of granting the franchise, but it caps those fees at 5% of the operator's gross annual revenue from providing cable services. Section 622 defines "franchise fee" to include "any tax, fee, or assessment of any kind imposed by a franchising authority . . . on a cable operator or a cable subscriber, or both, solely because of their status as such[.]" Franchise fees do not include taxes or fees of "general applicability," capital costs incurred by the cable operator for PEG access facilities (PEG capital costs exemption), and any "requirements or charges incidental to the awarding or enforcing of the franchise" (incidental costs exemption). Congress amended Title VI in the Cable Television Consumer Protection and Competition Act of 1992, with a stated goal of increasing competition in the cable market. Specifically, Congress amended Section 621 to prohibit the grant of exclusive franchises and to prevent franchising authorities from "unreasonably refus[ing] to award an additional competitive franchise." Congress also granted potential cable operators the right to sue a franchising authority for refusing to award a franchise. Congress amended the Cable Act again in 1996 to further promote competition in the cable television marketplace by enabling telecommunications providers regulated under Title II of the Communications Act (i.e., telephone companies) to offer video programming services. Congress repealed a provision banning telecommunications providers from offering video programming to customers in their service area and added a provision governing the operation of "open video systems," a proposed competitor to cable systems. These amendments also added provisions barring franchising authorities from conditioning the grant of a franchise on a cable operator's provision of telecommunications services or otherwise requiring cable operators to obtain a franchise to operate a telecommunications service. FCC Orders In the decades following the passage of the Cable Act and its amendments, many phone companies upgraded their networks to enter the cable market. To streamline the process for these new entrants, the FCC issued orders interpreting the franchising provisions of Title VI. The four orders discussed in this sectionâthe First, Second, Reconsideration, and Third Ordersâeach address a range of topics and in some cases retread topics covered by an earlier order. Table 1 summarizes the orders. In 2007, after gathering evidence suggesting that some local and municipal governments were imposing burdensome demands on new entrants, the FCC adopted the First Order. The Commission observed that the franchising process had prevented or delayed the entry of telephone companies into the cable market. The First Order thus sought to reduce entry barriers by clarifying when Title VI prohibits franchising authorities from imposing certain franchise conditions on new entrants. The FCC gave examples of practices by franchising authorities that constitute an "unreasonable refusal" to award a franchise, such as 1. a delay in making a final decision on franchise applications beyond the time frames set forth in the order; 2. requiring cable operators to "build out" their cable systems to provide service to certain areas or customers as a condition of granting the franchise; 3. imposing PEG and I-Net Requirements beyond those imposed on incumbents; and 4. requiring that new cable operators agree to franchise terms that are substantially similar to those agreed to by incumbent cable operators (called "level-playing-field requirements"). The First Order further clarified when certain costs counted toward the 5% franchise fee cap and maintained that franchising authorities could not refuse to grant a franchise based on issues related to non-cable services or facilities. Several franchising authorities and their representative organizations challenged the legality of the Order in the Sixth Circuit. But the Sixth Circuit denied those challenges in Alliance for Community Media v. FCC , upholding both the FCC's authority to issue rules construing Title VI and the specific rules in the First Order itself. Although the First Order applied only to new entrants to the cable market, the FCC shortly thereafter adopted the Second Order, extending many of the First Order's rulings to incumbent cable television service providers. Following the release of the Second Order, the Commission received three petitions for reconsideration, to which it responded in the Reconsideration Order in 2015. In the Reconsideration Order, the FCC affirmed its conclusions from the Second Order applying its earlier rulings to incumbent cable operators. The Reconsideration Order also clarified that "in-kind" (i.e., noncash) payments exacted by franchising authorities, even if unrelated to the provision of cable service, may count toward the maximum 5% franchise fee allowable under Section 622. In 2017, in Montgomery County v. FCC , the Sixth Circuit vacated the FCC's determinations in the Second Order and Reconsideration Order on both issues. Following the ruling in Montgomery County, the Commission started a new round of rulemaking and, on August 1, 2019, adopted another order, the Third Order, addressing the issues raised by the Sixth Circuit. In the Third Order, the FCC clarified its basis for counting in-kind payments toward the 5% franchise fee cap, provided additional reasoning for applying the First Order's rulings to incumbent cable operators, and preempted state and local regulation inconsistent with Title VI. While prior orders applied only to local franchising authorities, the Third Order extended the Commission's rules in all three orders to state-level franchising authorities, concluding that there was "no statutory basis for distinguishing between state- and local-level franchising actions." This report addresses issues raised in these various orders in greater detail below. Key Legal Issues in Cable Franchising As the foregoing discussion reflects, the FCC's post-2007 orders have focused on several key issues within Title VI's framework. Most notably, the Commission has addressed (1) when certain franchise requirements amount to an "unreasonable refusal" to award the franchise under Section 621; (2) the types of costs that are subject to the 5% franchise fee cap under Section 622; and (3) the extent to which franchising authorities may regulate "mixed-use" networks operated by cable operators. This section first reviews the relevant statutory provisions from which each of these three issues arise and then discusses the FCC's interpretations of those provisions. Unreasonable Refusal to Award a Franchise Title VI prohibits franchising authorities from "unreasonably refus[ing]" to grant a franchise to a cable operator. In the First Order, the FCC identified specific types of franchising conditions or practices that violate the unreasonable refusal standard, such as failing to process an application within certain time periods. The Sixth Circuit reviewed and upheld the First Order's interpretation of this standard, which remains in effect. Statutory Provisions Governing the "Unreasonable Refusal" Standard Title VI allows franchising authorities to condition a franchise on the cable operator performing or meeting certain requirements. Sections 621(a)(4)(B) and 621(b)(3)(D) explicitly allow franchising authorities to require cable operators to provide PEG channel "capacity, facilities, or financial support" and to provide I-Net "services or facilities." Section 621(a)(1), however, imposes a significant limitation on franchising authorities' ability to impose such conditions. Under that provision, franchising authorities may not "grant an exclusive franchise" or "unreasonably refuse to award an additional competitive franchise." FCC Interpretations of the "Unreasonable Refusal" Standard In the First Order, the FCC clarified when certain practices or requirements amount to an unreasonable refusal of a new franchise under Section 621(a)(1) of Title VI. The FCC gave four specific examples of unreasonable refusals: (1) delaying a final decision on franchise applications; (2) requiring cable operators to "build out" their cable systems to provide service to certain areas or customers as a condition of granting the franchise; (3) imposing PEG and I-Net requirements that are duplicative of, or are more burdensome than, those imposed on incumbents; and (4) requiring that new cable operators agree to franchise terms that are substantially similar to those agreed to by incumbent cable operators (the "level-playing-field requirements"). As for delays in acting on a franchise application, the FCC stated that a franchising authority unreasonably refuses a franchise when it subjects applicants to protracted negotiations, mandatory waiting periods, or simply a slow-moving franchising process. To prevent such delays, the FCC set decision deadlines of 90 days for applications by entities with existing access to rights-of-way and six months for applications by entities without such access. Once these time periods expire, franchise applications are deemed granted until the franchising authority takes final action on the application. As for build-out requirements, the FCC stated that requiring new franchise applicants to build out their cable systems to cover certain areas may constitute an unreasonable refusal of a franchise. The Commission explained that what constitutes an "unreasonable" build-out requirement may vary depending on the applicant's existing facilities or market penetration, but it clarified that certain build-out requirements are per se unreasonable refusals under Section 621. The FCC also determined that certain PEG and I-Net terms and conditions constitute an unreasonable refusal. Specifically, the Commission determined that PEG and I-Net requirements that are "completely duplicative" (i.e., a requirement for capacity or facilities that would not provide "additional capability or functionality, beyond that provided by existing I-Net facilities") are unreasonable unless redundancy serves a public safety purpose. The FCC also viewed PEG requirements as unreasonable when such requirements exceeded those placed on incumbent cable operators. Lastly, the FCC determined that level-playing-field requirements in local laws or franchise agreements amount to an unreasonable refusal of a franchise. The Commission explained that such requirements are unreasonable because new cable entrants are in a "fundamentally different situation" from incumbent operators. The FCC therefore concluded that these mandates "unreasonably impede competitive entry" into the cable market and are unreasonable refusals. As discussed above, several franchising authorities and their representative organizations unsuccessfully challenged the FCC's interpretation of the unreasonable refusal standard in Alliance for Community Media v. FCC , in which the Sixth Circuit upheld the First Order in its entirety. Applying the framework set forth in Chevron USA , Inc. v. Natural Resources Defense Council, Inc. âwhich guides courts when reviewing agency regulations that interpret the agency's governing statuteâthe court reasoned that the phrase "unreasonably refuse" is inherently ambiguous because the word "unreasonably" is subject to multiple interpretations. The court then held that the First Order's interpretation of this phrase was entitled to deference because it was reasonable and not unambiguously foreclosed by Title VI. As a result, the First Order's rules on what constitutes an unreasonable refusal remain binding on franchising authorities. Accordingly, if a franchising authority denies a cable operator's franchise request for a reason the FCC's has deemed unreasonableâsuch as the cable operator's refusal to accept build-out or level-playing-field requirementsâthe cable operator may sue the franchising authority for "appropriate relief" as determined by the court. Alternatively, if the franchising authority fails to make a final decision within the allotted time, the franchise will be deemed granted until the franchising authority makes a final decision. Franchise Fees Title VI limits franchising authorities to charging cable operators "franchise fees" of up to 5% of the cable operator's revenue, subject to specific exceptions. However, the types of obligations limited by the 5% cap have been a point of contention. The FCC, in its various orders, has clarified the scope of the exceptions to the 5% cap (in particular, the PEG capital costs and incidental costs exemptions); it has further explained that, unless they fall under one of the express exceptions, non-monetary (or "in-kind") contributions are subject to the 5% cap even if they are related to the provision of cable service. Litigation over the Commission's current interpretations of what constitutes a "franchise fee" is ongoing. Statutory Provisions Governing Franchise Fees Section 622 allows franchising authorities to charge franchise fees to cable providers, but it subjects such fees to a cap. For any "twelve-month period," franchise fees may not exceed 5% of the cable operator's gross annual revenues derived "from the operation of the cable system to provide cable service." Section 622 broadly defines "franchise fees" to include "any tax, fee, or assessment of any kind imposed by a franchising authority or other governmental entity on a cable operator or cable subscriber, or both, solely because of their status as such." However, Section 622 exempts certain costs from this definition, including 1. "any tax, fee, or assessment of general applicability"; 2. "capital costs which are required by the franchise to be incurred by the cable operator for public, educational, or governmental access facilities" (PEG capital costs exemption) ; and 3. "requirements or charges incidental to the awarding or enforcing of the franchise, including payments for bonds, security funds, letters of credit, insurance, indemnification, penalties, or liquidated damages" (incidental costs exemption). FCC Interpretations of the Statutory Franchise Fee Provisions The FCC has provided guidance on the types of expenses subject to the 5% cap. In particular, it has clarified (1) when non-monetary (or "in-kind") contributions must be included in the calculation of franchise fees subject to the 5% cap; (2) the scope of the PEG capital costs exemption; and (3) the scope of the incidental costs exemption. In-Kind Contributions The FCC has elaborated on the types of in-kind contributions that are subject to the 5% cap. In the First Order, the Commission maintained that in-kind fees unrelated to provision of cable serviceâsuch as requests that the cable operator provide traffic light control systemsâare subject to the 5% cap because they are not specifically exempt from the "franchise fee" definition. In the Reconsideration Order, the agency further clarified that the First Order's conclusions were not limited to in-kind exactions unrelated to cable service and that cable-related in-kind contributions (such as providing free or discounted cable services to the franchising authority) could also count toward the 5% cap. The Sixth Circuit vacated this conclusion, however, in Montgomery County v. FCC . The Sixth Circuit recognized that Section 622's definition of "franchise fee" is broad enough to encompass "noncash exactions." But the court explained that just because the term "can include noncash exactions, of course, does not mean that it necessarily does include every one of them." The court faulted the FCC for giving "scarcely any explanation at all" for its decision to expand its interpretation of "franchise fee" to include cable-related exactions, and held that this defect rendered the Commission's interpretation "arbitrary and capricious" in violation of the Administrative Procedure Act (APA). Following the Sixth Circuit's decision in Montgomery County , the Commission issued the Third Order, in which it detailed its reasons for including cable-related in-kind contributions in the 5% cap. The FCC first explained that, as recognized by the court in Montgomery County , the definition of "franchise fee" is broad enough to encompass in-kind contributions as well as monetary fees. The Commission also acknowledged the Sixth Circuit's observation that just because the definition is broad enough to include in-kind fees "does not mean that it necessarily does include everyone one of them." Nevertheless, the FCC maintained that cable-related in-kind contributions should be included in the fee calculation because there is nothing in the definition that "limits in-kind contributions included in the franchise fee." The Commission further reasoned that Section 622's specific exceptions do not categorically exclude such expenses, as there is no "general exemption for cable-related, in-kind contributions." Along with its construction of Section 622, the FCC rejected arguments that "other Title VI provisions should be read to exclude costs that are clearly included by the franchise fee definition," such as the provision that allows franchising authorities to require that cable operators designate channel capacity for PEG use. According to the Commission, "the fact that the Act authorizes [franchising authorities] to impose such obligations does not mean that the value of these obligations should be excluded from the five percent cap on franchise fees." While the Third Order concluded that cable-related, in-kind contributions are not categorically exempt from the 5% cap, it recognized that certain types of cable-related in-kind contributions might be excluded. For instance, the FCC concluded that franchise terms requiring a cable operator to build out its system to cover certain localities or to meet certain customer service obligations are not franchise fees. The Commission reasoned that these requirements are "simply part of the provision of cable service" and are not, consequently, a "tax, fee, or assessment." Furthermore, the FCC noted that the PEG capital costs exemption, which exempts costs associated with the construction of public, educational, or governmental access facilities, covers certain cable-related, in-kind expenses, and, as discussed below, the PEG capital costs exemption provides guidance on the types of costs to which it applies. On the other hand, the agency also identified specific cable-related, in-kind expenses that are subject to the 5% cap, such as franchise terms requiring cable operators to provide free or discounted cable service to public buildings or requiring operators to construct or maintain I-Nets. Lastly, the Third Order concluded that, for purposes of the 5% cap, cable-related in-kind services should be measured by their "fair market value" rather than the cost of providing the services. The FCC reasoned that fair market value is "easy to ascertain" and "reflects the fact that, if a franchising authority did not require an in-kind assessment as part of its franchise, it would have no choice but to pay the market rate for services it needs from the cable operator or another provider." In sum, despite the setback for the Commission in Montgomery County , the FCC has maintained its position that in-kind contributionsâeven if related to cable serviceâare not categorically exempt from the 5% cap. The issue is not settled, however. As discussed later, the Third Order is being challenged in court, and it remains to be seen whether the FCC's position will ultimately be upheld. PEG Capital Costs Exemption The FCC's interpretation of the PEG capital costs exemption has evolved. In the First Order, the Commission interpreted this exemption as applying to the costs "incurred in or associated with" constructing the facilities used to provide PEG access. However, the FCC broadened its interpretation in the Third Order. In the Third Order, the Commission conceded that its earlier statements were "overly narrow" because the plain meaning of the term "capital costs" can include equipment costs as well as construction costs. Consistent with this analysis, the FCC concluded that the term "capital costs" is not limited to construction-related costs, but can also include equipment purchased for the use of PEG access facilities, "such as a van or a camera." The Third Order noted that capital costs "are distinct from operating costs"âthat is, the "costs incurred in using" PEG access facilitiesâand that operating costs are not exempt from inclusion in the franchise fee calculation. While the Third Order provided additional clarification on the PEG capital costs exemption, it left at least one issue unresolved. Specifically, the FCC determined there was an insufficient record before it to conclude whether "the costs associated with the provision of PEG channel capacity" fall within the exclusion. Consequently, it deferred consideration of this issue and stated that, in the meantime, channel capacity cost "should not be offset against the franchise fee cap." Ultimately, the scope of the PEG capital costs exemption remains in flux. The FCC's Third Order is being challenged in court, and it is possible the agency's interpretation of the PEG capital costs exemption could be vacated. Even if the Third Order is upheld, it left unresolved whether the costs of providing PEG channel capacity fall under the capital costs exclusion; thus, while franchise authorities are not required to offset such costs against the 5% cap in the interim, it is unclear whether these costs will count toward the franchise fee cap in the long run. Incidental Costs Exemption While the FCC has articulated its position on in-kind contributions and the PEG capital costs exemption over the course of several orders, the Commission largely addressed its interpretation of the "incidental costs" exemption in the First Order. There, the FCC read the exemption narrowly to include only those expenses specifically listed in Section 622(g)(2)(D)ânamely, "bonds, security funds, letters of credit, insurance, indemnification, penalties, or liquidated damages." The Commission explained that it did not interpret unlisted costsâincluding, among other things, attorney fees, consultant fees, and in-kind paymentsâto be "incidental" costs, based on the text of the exemption and the legislative history of Section 622. The FCC noted, however, that certain "minor expenses" beyond those listed in the statute may be included as "incidental costs," such as application or processing fees that are not unreasonably high relative to the cost of processing the application. In Alliance for Community Media v. FCC , the Sixth Circuit denied petitions challenging the First Order's interpretation of the "incidental costs" exemption. Petitioners argued that the plain meaning of the phrase "incidental to" meant that the fee had to be "related to the awarding or enforcing of the franchise." According to petitioners, the FCC's per se listing of non-incidental feesâsuch as attorney and consultants' feesâcontradicted this plain meaning. The court, however, upheld the FCC's interpretation. The court reasoned that the phrase "incidental to" lent itself to multiple interpretations, including both the FCC's and the petitioners' readings. Consequently, it concluded under Chevron that the "FCC's rules regarding fees" qualified as "reasonable constructions" of Sections 622(b) and 622(g)(2)(D) that are entitled to deference. In sum, unlike in-kind contributions and the PEG capital costs exemption, the FCC's interpretation of the incidental costs exemption is not subject to any ongoing legal challenge. Consequently, with the exception of the "minor expenses" mentioned in the First Order, only those expenses listed in Section 622(g)(2)(D) (bonds, security funds, etc.) are exempt from the 5% cap under the incidental costs exemption. Franchising Authority over Mixed-Use Networks A continuing area of disagreement between the FCC and franchising authorities has been the extent to which franchising authorities can regulate non- cable services that a cable operator provides over the same network used for its cable service (e.g., a "mixed-use network"). From the First Order onward, the Commission has maintained that, based on its interpretation of various Title VI provisions, franchising authorities may not regulate the non-cable services aspects of mixed-use networks. While the First Order applied this rule only to new entrants to the cable market, the Second Order extended it to incumbent cable operators. The Sixth Circuit upheld this rule as applied to new entrants into the cable market, but vacated the FCC's application of it to incumbent cable operators. The Commission sought to cure this defect in the Third Order, and it further clarified that any efforts by state and local governments to regulate non-cable services provided by cable operators, even if done outside the cable franchising process and relying on the state's inherent police powers, are preempted by Title VI. However, given the ongoing legal challenge to the Third Order, this issue, too, remains unsettled. Statutory Provisions Governing Mixed-Use Networks Several Title VI provisions arguably prohibit franchising authorities from regulating non-cable services (such as telephone or broadband internet access service) provided over mixed-use networks, or networks over which an operator provides both cable and non-cable services. Section 602's definition of "cable system" explicitly excludes the "facility of a common carrier" except "to the extent such facility is used in the transmission of video programming directly to subscribers." Further, with respect to broadband internet access service, Section 624(b)(1) states that franchising authorities "may not . . . establish requirements for video programming or other information services." Lastly, Section 624(a) states that "[a] franchising authority may not regulate the services, facilities, and equipment provided by a cable operator except to the extent consistent with [Title VI]." FCC Interpretations of Statutory Provisions Governing Mixed-Use Networks Beginning with the First Order, the FCC has relied on these statutory provisions to clarify the bounds of franchising authority jurisdiction over mixed-use networks. The Commission asserted that a franchising authority's "jurisdiction applies only to the provision of cable services over cable systems." To support its view, the FCC cited Section 602's definition of "cable system," which explicitly excludes common carrier facilities except to the extent they are "used in the transmission of video programming directly to subscribers." The Commission did not address whether video services provided over the internet might are "cable services." The First Order applied only to new entrants to the cable market. However, in the Second Order, the FCC determined that the First Order's conclusions regarding mixed-use networks should apply to incumbent providers because those conclusions "depended upon [the Commission's] statutory interpretation of Section 602, which does not distinguish between incumbent providers and new entrants." The FCC reaffirmed this position in the Reconsideration Order, stating that franchising authorities "cannot . . . regulate non-cable services provided by an incumbent." In Montgomery County v. FCC , however, the Sixth Circuit vacated the FCC's extension of its mixed-use network rule to incumbent cable providers on the ground that this interpretation was arbitrary and capricious. The court explained that the Commission could not simply rely on the reasoning in its First Order because Section 602 did not support an extension of the mixed-use rule to incumbent cable providers. The court observed that the FCC correctly applied its mixed-use rule to new entrantsâwho were generally common carriersâbecause Section 602's definition of "cable system" expressly excludes common carrier facilities. But most incumbents, by contrast, are not common carriers. Consequently, because the Commission did not identify any other "valid basisâstatutory or otherwiseâ" for its extension of its mixed-use rule to non-common carrier cable providers, the court vacated that decision as arbitrary and capricious. Responding to Montgomery County , the FCC's Third Order provides additional support for extending the mixed-use rule to incumbent cable operators. The Order first reiterates that Section 602's definition of "cable system" provides the basis for barring franchising authorities from regulating incumbent cable operators when acting as common carriers, because the definition explicitly excludes common carrier facilities except to the extent they are "used in the transmission of video programming directly to subscribers." Similarly, the Commission concluded that franchising authorities cannot regulate non -common carriers to the extent they provide other services along with cable, in particular, broadband internet access. The Third Order supports that conclusion by reference to Section 624(b)(1)'s command that franchising authorities may not "establish requirements for video programming or other information services ." While "information services" is not defined in Title VI, the FCC concluded that, based on Title VI's legislative history, the term should have the same meaning it has in Title I of the Communications Act. The Commission has interpreted "information service" under Title I of the Communications Act to include broadband internet access service, and the D.C. Circuit has upheld that interpretation. The Third Order also notes that "it would conflict with Congress's goals in the Act" to treat cable operators that are not common carriers differently from those that are common carriers, as allowing franchising authorities to regulate non-common carrier operators more strictly "could place them at a competitive disadvantage." Beyond clarifying that franchising authorities cannot use their Title VI authority to regulate the non-cable aspects of a mixed-use cable system, the Third Order also explicitly preempts state and local laws that "impose[] fees or restrictions" on cable operators for the "provision of non-cable services in connection with access to [public] rights-of-way, except as expressly authorized in [Title VI]." Prior to the Third Order's issuance, for example, the Oregon Supreme Court in City of Eugene v. Comcast upheld the City of Eugene's imposition of a 7% fee on the revenue a cable operator generated from its provision of broadband internet services. Rather than impose the fee as part of the cable franchising process, the city cited as its authority an ordinance imposing a "license-fee" requirement on the delivery of "telecommunications services" over the city's public rights-of-way. The court held that Title VI did not prohibit the city from imposing the fee, as it was not a "franchise fee" subject to the 5% cap because the ordinance applied to both cable operators and non-cable operators. Thus, the court reasoned, the city did not require Comcast to pay the fee "solely because of" its status as a cable operator and the franchise fee definition was not met. In the aftermath of the Oregon Supreme Court's decision, other state and local governments relied on sources of authority outside of Title VI, such as their police power under state law, to regulate the non-cable aspects of mixed-use networks. The Third Order rejects City of Eugene 's reading of Title VI. The FCC reasoned that Title VI establishes the "basic terms of a bargain" by which a cable operator may "access and operate facilities in the local rights-of-way, and in exchange, a franchising authority may impose fees and other requirements as set forth and circumscribed in the Act." Although Congress was "well aware" that cable systems would carry non-cable services as well as cable, it nevertheless "sharply circumscribed" the authority of state and local governments to "regulate the terms of this exchange." Consequently, the Commission concluded, the Third Order "expressly preempt[s] any state or local requirement, whether or not imposed by a franchising authority, that would impose obligations on franchised cable operators beyond what Title VI allows." The Third Order also concluded that the FCC has authority to preempt such laws because, among other things, Section 636(c) of Title VI expressly preempts any state or local law" that is "inconsistent with this chapter." Thus, in the FCC's view, wherever such express preemption provisions are present, the "Commission has [been] delegated authority to identify the scope of the subject matter expressly preempted." In sum, while franchising authorities may not use the cable franchising process to regulate non-cable services provided over mixed-use networks by new entrants to the cable market, the FCC's extension of this rule to incumbents has not yet been upheld in court. Furthermore, the Third Order's broad preemption of any state and local law regulating cable operators' use of public rights-of-way beyond what Title VI allows raises even more uncertainty. As discussed further below, the Third Order's preemption raises difficult questions about the extent to which the Commission may rely on Title VI to preempt not only state and local cable franchising requirements but also generally applicable state regulations and ordinances that regulate non-cable services provided by cable operators. Legal Challenges Several cities, franchising authorities, and advocacy organizations have filed petitions for review of the Third Order in various courts of appeals, and these petitions have been consolidated and transferred to the Sixth Circuit. In their petitions, the petitioners generally allege that the Third Order violates the Communications Act and the U.S. Constitution and is arbitrary and capricious under the APA. The same parties filed a motion with the FCC to stay the Third Order, which the Commission recently denied. While the petitions challenging the order state their legal theories in general terms, this case will likely raise complex issues of statutory interpretation, as well as administrative and constitutional law. For instance, petitioners could argue, as commenters did during the rulemaking process for the Third Order, that the text and structure of Title VI contradicts the FCC's broad interpretation that a franchise fee should include most cable-related, in-kind expenses. Pointing to provisions such as Section 611(b), which authorizes franchising authorities to impose PEG and I-Net requirements without any reference to the franchise fee provision, some commenters argued that Title VI treats the cost of complying with franchise requirements as distinct from the franchise fee. A reviewing court would likely apply the Chevron framework to resolve such statutory arguments. While it is difficult to predict how a reviewing court would decide any given issue, the Sixth Circuit's decision in Montgomery County indicates that the court might uphold the Third Order's legal interpretation of the franchise fee provision under the Chevron doctrine. Specifically, as discussed above, the Sixth Circuit held that Section 622's definition of franchise fee is broad enough to include "noncash exactions." Given this decision, the Sixth Circuit could potentially hold that the franchise fee definition is broad enough to accommodate the FCC's interpretation and that the FCC's interpretation is reasonable and entitled to deference. Even were the Sixth Circuit to reach that conclusion, however, that is not the end of the analysis. As the Sixth Circuit's decision in Montgomery County also demonstrates, the FCC's rulings may be vacated regardless of whether the Commission's statutory interpretation enjoys Chevron deference if the court concludes that the FCC's interpretation is arbitrary and capricious under the APA. A federal agency's determination is arbitrary and capricious if the agency "has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise." In Montgomery County , the Sixth Circuit held that the FCC had acted arbitrarily and capriciously by failing to give "scarcely any explanation at all" for expanding its franchise fee interpretation to cable-related in-kind expenses and for failing to identify a statutory basis for extending its mixed-use rule to incumbents. While the Commission took pains to address these concerns in the Third Order, it remains to be seen whether a court would find those efforts sufficient or accept other arguments as to why the FCCs interpretations should be held arbitrary and capricious. For instance, those challenging the Third Order might argue that the Commission failed to address evidence that "runs counter" to its rules or failed to consider important counterarguments. One such area of focus for petitioners in their motion to stay the Third Order was the FCC's alleged failure to address potential public safety effects of the Third Order's treatment of cable-related in-kind contributions. In addition, the Third Order's assertion of preemption may come under scrutiny from state or local challengers who seek to regulate mixed-use networks. A recent D.C. Circuit decision struck down the FCC's attempt to preempt "any state or local requirements that are inconsistent with [the FCC's] deregulatory approach" to broadband internet regulation. Additionally, in a recent opinion concurring in the U.S. Supreme Court's denial of a petition for certiorari in a case involving a state's effort to regulate Voice over Internet Protocol service, Justice Thomas, joined by Justice Gorsuch, voiced concerns about allowing the FCC's deregulatory policy to preempt state regulatory efforts. Both the D.C. Circuit and Justices Thomas and Gorsuch expressed skepticism that the FCC has statutory authority to preempt state and local regulation in areas where the FCC itself has no statutory authority to regulate. Cities and local franchising authorities may seize on the reasoning in these opinions to argue that Title VI's preemption provision cannot extend to non-cable services that fall outside Title VI's purview. Lastly, along with statutory interpretation and administrative law issues, challengers to the Third Order may assert constitutional arguments. As mentioned, the Third Order prevents state and local governments from relying on state law to regulate non-cable services provided by cable operators. However, some commenters have argued that the Third Order violates the anti-commandeering doctrine, a constitutional rule that prohibits the federal government from compelling states to administer federal regulations. The Supreme Court recently clarified the anti-commandeering doctrine in Murphy v. NCAA . In Murphy , the Court struck down the Professional and Amateur Sports Protection Act of 1992, which prohibited states from legalizing sports gambling. Justice Alito, writing for the Court, reasoned that the anti-commandeering doctrine prohibits Congress from "issu[ing] direct orders to state legislatures," compelling them to either enact certain legislation or to restrict them from enacting certain legislation. The Court explained that the anti-commandeering doctrine promotes accountability, because, when states regulate at Congress's command, "responsibility is blurred." Justice Alito further explained that the doctrine "prevents Congress from shifting the costs of regulation to the States." The Court contrasted unlawful commandeering with permissible "cooperative federalism" regimes. Under such regimes, Congress allows, but does not require, states to implement a regulatory program according to federal standards, and a federal body implements the program when a state refrains from doing so. According to some commenters, the FCC's Third Order violates the anti-commandeering doctrine because it "effectively command[s] local government[s] to grant right-of-way access on the terms the Commission, not local government or the states set." Further, some commenters, including the National Association of Telecommunications Officers and Advisors and National League of Cities, argue that the Third Order would violate the accountability and cost-shifting principles animating the anti-commandeering doctrine, as explained in Murphy . According to these commenters, the FCC's "mixed-use rule unquestionably blurs responsibility" because residents unhappy with cable operators' use of the right-of-way for non-cable purposes would "blame their local elected officials," and the mixed-use rule would shift cost to local governments by "usurp[ing]" the "compensation local governments may be entitled to for use of the [rights-of-way] for non-cable services." Ultimately, this issue may turn on whether Title VI, as interpreted by the FCC's rules, is a permissible "cooperative federalism" program under Murphy . In its Third Order, the Commission argued Title VI was such a program because it "simply establishes limitations on the scope of [states' authorities to "award franchises" to cable operators] when and if exercised." The FCC further maintained that, rather than "requir[ing] that state or local governments take or decline any particular action," its rules were "simply requiring that, should state and local governments decide to open their rights-of-way to providers of interstate communication services within the Commission's jurisdiction, they do so in accordance with federal standards." It remains to be seen, however, how broadly lower courts will apply Murphy 's cooperative federalism distinction. Considerations for Congress Beyond the various legal arguments discussed above, there are notable disagreements over the practical impact of the FCC's rules. On the one hand, localities and their representative organizations have claimed that the Commission's Third Order will "gut[] local budgets" and that, by subjecting in-kind franchise requirements such as PEG and I-Net requirements to the 5% cap, it will force franchising authorities to "choose between local PEG access and I-Nets, and the important other public services supported by franchise fees." Similarly, the two FCC commissioners who dissented from the Third OrderâJessica Rosenworcel and Geoffrey Starksâmaintained in their dissents that the Third Order was part of a broader trend at the Commission of "cutting local authorities out of the picture" and that it would, among other things, diminish the "value of local public rights-of-way." In response, the FCC's chairman, Ajit Pai, and other Commissioners in the majority contended that the rule would benefit consumers because the costs imposed by franchising authorities through in-kind contributions and fees get "passed on to consumers" and discourage the deployment of new services like "faster home broadband or better Wi-Fi or Internet of Things networks." Given the competing arguments relating to the FCC's interpretation of Title VI's scope, Congress may be interested in addressing the issues raised by the Third Order. For instance, Congress might address the extent to which Section 622's definition of "franchise fee" includes cable-related, in-kind expenses such as PEG and I-Net services. It might also address whether Title VI preempts state and local governments from relying on their police powers or other authorities under state law to regulate non-cable services provided by cable operators. However, Congress also might consider federalism issues implicated by any attempt to prohibit state and local authorities from regulating such services. As discussed in the previous section, the anti-commandeering principle prohibits direct orders to states that command or prohibit them from enacting certain laws, but permits lawful "cooperative federalism" regimes where Congress gives states a choice of either refraining from regulating a particular area or regulating according to federal standards. Thus, Congress may avoid anti-commandeering issues by setting federal standards for regulation of ancillary non-cable services rather than prohibiting states from regulating these services. Appendix. Supplemental Information Federal Standards and Restrictions on Franchising Authority Power The following table summarizes functions and areas traditionally regulated by franchising authorities that are subject to federal standards or federal restrictions. This table is not a summary of all federal requirements and regulations cable operators face under the act, only those that implicate the powers of franchising authorities. Glossary Build-Out Requirement: A requirement placed on a cable operator to provide cable service to particular areas or residential customers. Cable Operator: From the Cable Act, 47 U.S.C. Â§ 522, "[a]ny person or group of persons (A) who provides cable service over a cable system and directly or through one or more affiliates owns a significant interest in such cable system, or (B) who otherwise controls or is responsible for, through any arrangement, the management and operation of such a cable system." Cable Service: One-way transmission of video programming to customers, and any customer interaction required for the selection or use of such video programming. Cable System: A facility designed to provide video programming to multiple subscribers within a community, with limited exceptions. See note 39 , supra , for the precise exceptions. Common Carrier: A person or entity who provides interstate telecommunications service. Franchise: A right to operate a cable system in a given area. Franchise Fee: From the Cable Act, 47 U.S.C. Â§ 542, "any tax, fee, or assessment of any kind imposed by a franchising authority or other governmental entity on a cable operator or cable subscriber, or both, solely because of their status as such," with several exceptions. See the " Franchise Fees " section, supra , for a discussion of some of these exceptions. Franchising Authority: A state or local governmental body responsible for awarding franchises. I-Net: Abbreviation for "institutional network"; a communication network constructed or operated by a cable operator for use exclusively by institutional (non-residential) customers. In-Kind : Non-monetary. Mixed-Use Network: A communication network over which a person or entity provides both cable service and other service(s), such as telecommunications service. PEG: Abbreviation for "Public, Educational, or Governmental." See note 41 , supra , for more discussion of this term. Telecommunications : From the Communications Act, 47 U.S.C. Â§ 153, "the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received." Telecommunications Service: The offering of telecommunications directly to the public for a fee. Title VI: The collected provisions of the Cable Act, as amended.	Summary:	gov_report	1,024	null	32
crs_R46311	crs_R46311_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Robocalls are the top complaint received by the Federal Communications Commission (FCC) and a consistent congressional concern. A robocall, also known as "voice broadcasting," is any telephone call that delivers a pre-recorded message using an automatic (computerized) telephone dialing system, more commonly referred to as an automatic dialer or "autodialer." The Telephone Consumer Protection Act of 1991 (TCPA) regulates robocalls. Legal robocalls are used by legitimate call originators for political, public service, and emergency messages, which are legal. Other legitimate uses can be, for example, to announce school closures or to remind consumers of medical appointments. Illegal robocalls are usually associated with fraudulent telemarketing campaigns, but an illegal robocall under the TCPA does not necessarily mean that the robocall is fraudulent. Illegal, fraudulent calls usually include misleading or inaccurate Caller ID information to disguise the identity of the calling party and trick called parties, which is called "spoofing." Scammers sometimes use " neighbor spoofing " so it will appear that an incoming call is coming from a local number . They may also spoof a number from a legitimate company or a government agency that consumers know and trust . Like robocalls more generally, spoofing can also be used for legitimate purposes, such as to hide the number of a domestic violence shelter or an individual employee extension at a business or government agency. This report addresses robocalls that are both illegal under the TCPA as well as intended to defraud, not robocalls that are defined only as illegal. The number of robocalls continues to grow in the United States, and the figures tend to fluctuate based on the introduction of new government and industry attempts to stop them and robocallers' changing tactics to thwart those attempts (see Figure 1 ). In 2019, U.S. consumers received 58.5 billion robocalls, an increase of 22% from the 47.8 billion received in 2018, according to the YouMail Robocall Index. In 2016, the full first year the Robocall Index was tabulated, that figure was 29.1 billion callsâhalf the number of calls in 2019. Further, the FCC states that robocalls make up its biggest consumer complaint category, with over 200,000 complaints each yearâaround 60% of all the complaints it receives. Over the past three years, the FCC has pursued a multi-part strategy for combatting spoofed robocalls. The agency has issued hundreds of millions of dollars in fines for violations of its Truth in Caller ID rules; expanded its rules to reach foreign calls and text messages; enabled voice service providers to block certain clearly unlawful calls before they reach consumers' phones; clarified that voice service providers may offer call-blocking services by default; and called on the industry to "trace back" illegal spoofed calls and text messages to their original sources. The FCC estimates that eliminating illegal scam robocalls would provide a public benefit of $3 billion annually. A survey by Truecaller, a company that tracks and blocks robocalls, puts that figure as high as $10.5 billion. The Telephone Robocall Abuse Criminal Enforcement and Deterrence Act The Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (TRACED Act) empowered the FCC to take specific actions to fight illegal robocalls; it was signed into law on December 30, 2019 ( P.L. 116-105 ). The law requires the FCC to administer a forfeiture penalty for violations (with or without intent) of the prohibition on certain robocalls; promulgate rules establishing when a provider may block a voice call based on information provided by the call authentication framework, called Secure Telephony Identity Revisited (STIR) and Signature-based Handling of Asserted information using toKENs (SHAKEN) (together known as "STIR/SHAKEN"), and establish a process to permit a calling party adversely affected by the framework to verify the authenticity of its calls; initiate a rulemaking to help protect subscribers from receiving unwanted calls or texts from a caller using an unauthenticated number; assemble, in conjunction with the Department of Justice, an interagency working group to study and report to Congress on the enforcement of the prohibition of certain robocalls; and initiate a proceeding to determine whether its policies regarding access to number resources could be modified to help reduce access to numbers by potential robocall violators. STIR/SHAKEN is seen by many, including the FCC, as a particularly important part of achieving the projected cost savings associated with eliminating illegal robocalls. STIR/SHAKEN must be implemented by June 30, 2021. Ongoing Efforts to Combat Robocalls Both the telecommunications industry and the FCC are taking steps to counter illegal robocalls. The telecommunications industry has developed new technologies and other tools to detect and block illegal robocalls. The FCC has taken steps to create a policy environment in which those tools can be implemented. The FCC has also expanded the scope of some existing rules and continues to target and fine illegal robocallers. Call Blocking Initiatives In November 2017, the FCC authorized telecommunications providers to block calls originating from numbers that should not originate calls, or that are invalid, unallocated, or unused, without violating call completion rules. In December 2018, the FCC adopted a declaratory ruling clarifying that wireless providers are authorized to take measures to stop unwanted text messaging as well as unwanted calls. The FCC has also encouraged companies that block calls to establish an appeals process for erroneously blocked callers. Do Not Originate Registry and Other Call Blocking The telecommunications industry has now widely implemented the blocking of numbers that should not originate calls, called the "Do Not Originate" (DNO) Registry. In November 2017, the FCC promulgated rules on the creation and use of the DNO Registry. The rules explicitly allow service providers to block calls from two categories of number: (1) numbers that the subscriber has asked to be blocked, such as "in-bound only" numbers (numbers that should not ever originate a call); and (2) unassigned numbers, as the use of such a number indicates that the calling party is intending to defraud a consumer. USTelecom, a trade association representing telecommunications-related businesses in the United States, maintains this registry and works with industry to implement DNO call blocking for in-bound numbers associated with government agencies. 2020 FCC Report on Call Blocking On December 20, 2019, the FCC released a public notice seeking comments for its first of two staff reports on call blocking issues mandated by the TRACED Act. The agency asked for comments on the availability and effectiveness of call blocking tools offered to consumers; the impact of the FCC's actions on illegal calls; the impact of call blocking on 911 services and public safety; and any other issues parties would like to see addressed. Comments were due January 29, 2020, and reply comments were due February 28, 2020. Caller ID Authentication Illegitimate robocallers nearly always spoof their originating number. That is, they deliberately falsify the Caller ID information they are transmitting to disguise their identity. One way to help consumers recognize spoofing and identify scams is to verify who is calling through Caller ID authentication. Over the past few years, the telecommunications industry developed a set of protocols, the STIR/SHAKEN framework that enables phone companies to verify that the Caller ID information transmitted with a call matches the caller's phone number. Once fully implemented, STIR/SHAKEN is expected to reduce the effectiveness of illegal spoofing and enable the identification of illegal robocallers. The FCC mandated the adoption of STIR/SHAKEN on March 31, 2020. These steps are discussed in detail in the section of this report, " FCC Order and Further Notice of Proposed Rulemaking, March 2020 ." Call Traceback More than 30 voice service providers participate in the USTelecom Industry Traceback Group (ITG), which was formally established in May 2016. The ITG is a collaborative effort of companies across the wireline, wireless, voice over internet protocol, and cable industries that actively trace and identify the source of illegal robocalls. The ITG coordinates with federal and state law enforcement agencies to identify non-cooperative providers so those agencies can take enforcement action, as appropriate. During 2019, ITG members conducted more than 1,000 tracebacks, associated with more than 10 million illegal robocalls. This activity has resulted in more than 20 subpoenas and/or civil investigative demands from federal and state enforcement agencies. The ITG published its first status report in January 2020. Reassigned Numbers Database When a consumer cancels service with a voice provider, the provider may reassign the number to a new consumer. If callers are unaware of the reassignment, they can make unwanted calls to the new consumer, unintentionally violating the Telephone Consumer Protection Act. In March 2018, the FCC proposed that one or more databases be created to provide callers with the comprehensive and timely information they need to discover potential number reassignments before making a call. In December 2018, the commission authorized the creation of a reassigned numbers database to enable callers to verify whether a telephone number has been permanently disconnected and is therefore eligible for reassignmentâbefore calling that numberâthereby helping to protect consumers with reassigned numbers from receiving unwanted calls. On January 24, 2020, the FCC requested public comment on the technical requirements developed for the database by the North American Numbering Council (NANC). Comments were due February 24, 2020, and reply comments were due March 9, 2020. FCC Declaratory Ruling and Third Further Notice of Proposed Rulemaking, June 2019 On June 6, 2019, the FCC adopted a declaratory ruling and third further notice of proposed rulemaking (FNPRM), "Advanced Methods to Target and Eliminate Unlawful Robocalls and Call Authentication Trust Anchor." Declaratory Ruling The declaratory ruling empowers phone companies to block suspected illegal robocalls by default (customers may opt out) and asserts the FCC's view that carriers can allow consumers to opt in to more aggressive call-blocking tools, known as white-listing. Both blocking by default and opt-in white-listing tools seek to stop unwanted calls on the voice provider's network before calls reach the consumer's phone. Call-Blocking Programs (Opt Out) Call-blocking programs have become more popular and effective in the past few years. There are numerous blocking tools for different platforms, and the number of available tools is growing. Many service providers only offer these programs on an opt-in basis, limiting their potential impact. Providing a call-blocking program as the default option can significantly increase consumer participation while maintaining consumer choice. White-List Programs (Opt In) White-list programs require consumers to specify the telephone numbers from which they wish to receive callsâall other calls are blocked. Smartphones have provided a new way to implement white-list programs, because they store the consumer's contact list. When the consumer's contacts change, the white list can be updated. The declaratory ruling asserts the FCC's view that nothing in the Communications Act of 1934 or the FCC's rules prohibits a service provider from offering opt-in white-list programs. Third Further Notice of Proposed Rulemaking The FNPRM requested feedback on several proposals: a safe harbor for providers that implement blocking of calls that fail caller authentication under STIR/SHAKEN, protections for critical calls, mandating Caller ID authentication, and measuring the effectiveness of robocall solutions. Comments were due on July 24, 2019, and reply comments were due on August 23, 2019. Safe Harbor for Call-Blocking Programs Based on Potentially Spoofed Calls The FCC proposed a narrow safe harbor for voice service providers that offer call-blocking programs that take into account (1) whether a call has been properly authenticated under the SHAKEN/STIR framework and (2) may potentially be spoofed. The safe harbor limits liability for voice service providers if they block a legal robocall. Among other elements, the FCC proposed a safe harbor for voice service providers that choose to block calls that fail SHAKEN/STIR authentication and asked whether there might be other instances where authentication would fail. The FCC also asked how it could ensure that wanted calls are not blocked and sought comment as to how to identify and remedy the blocking of wanted calls. Protections for Critical Calls The FCC requested comments on whether it should require voice providers offering call-blocking to maintain a "critical calls list" of emergency numbers that must not be blocked. Such lists would include, for example, the outbound numbers of 911 call centers and other government emergency services. The blocking prohibition would apply only to STIR/SHAKEN-authenticated calls. Mandating Caller ID Authentication The FCC requested comments on its proposal to mandate implementation of the STIR/SHAKEN authentication framework, if major voice providers fail to meet the end-of-2019 deadline for voluntary implementation. This is the topic of the FCC order issued on March 31, 2020, and is discussed in detail in the next section of this report, " FCC Order and Further Notice of Proposed Rulemaking, March 2020 ." Measuring the Effectiveness of Robocall Solutions The FCC requested feedback on whether it should create a mechanism to provide information to consumers about the effectiveness of voice providers' robocall solutions and, if so, how it should define and evaluate that effectiveness. The FCC also asked how it could obtain the information needed for such an evaluation. FCC Order and Further Notice of Proposed Rulemaking, March 2020 The FCC published its latest guidance and proposals on March 31, 2020, in a new order and FNPRM. Order The new rules require implementation of Caller ID authentication using STIR/SHAKEN. Specifically, the rules require "all originating and terminating voice service providers to implement STIR/SHAKEN in the Internet Protocol (IP) portions of their networks by June 30, 2021, a deadline that is consistent with Congress's direction in the recently-enacted TRACED Act," described earlier in, " The Telephone Robocall Abuse Criminal Enforcement and Deterrence Act ." Most experts say that widespread deployment of STIR/SHAKEN will reduce the effectiveness of illegal spoofing, allow law enforcement to identify bad actors more easily, and help phone companies to identify calls with illegally spoofed Caller ID information before those calls reach their subscribers. Further Notice of Proposed Rulemaking The FNPRM requests public comments on expanding the STIR/SHAKEN implementation mandate to cover intermediate voice service providers; extending the implementation deadline by one year for small voice service providers pursuant to the TRACED Act; adopting requirements to promote caller ID authentication on voice networks that do not rely on IP technology; and implementing other aspects of the TRACED Act. Comments to the FNPRM are due on May 15, 2020, and reply comments are due on May 29, 2020. Other FCC Actions Related to Robocalls Other FCC actions to fight illegal robocallers include ongoing enforcement actions, an extension of a robocall ban to international callers, and the establishment of a hospital robocall protection group. Ongoing Enforcement Actions Since January 2017, the FCC has imposed or proposed about $240 million in forfeitures against robocallers. One case involved an individual who made more than 96 million illegal robocalls over the course of three months. Another involved an individual who conducted a large-scale robocalling campaign that marketed health insurance to vulnerable populations. In both cases, the illegal calls disrupted an emergency medical paging service. Extension of Robocall Ban to International Callers In 2018, Congress amended the Communications Act of 1934 to prohibit spoofing activities directed at U.S. consumers from callers outside the United States and Caller ID spoofing using alternative voice and text messaging services. To implement these amendments, the FCC issued rules in July 2019 that expanded the act's prohibition on the use of misleading and inaccurate Caller ID information. Hospital Robocall Protection Group The TRACED Act of 2019 required the FCC to establish a Hospital Robocall Protection Group. For most consumers, robocalls are a potentially fraudulent nuisance. For hospitals, though, the robocalls can present challenges that are increasingly threatening doctors and patients: At Tufts Medical Center, administrators registered more than 4,500 calls between about 9:30 and 11:30 a.m. on April 30, 2018, said Taylor Lehmann, the center's chief information security officer. Many of the messages seemed to be the same: Speaking in Mandarin, an unknown voice threatened deportation unless the person who picked up the phone provided their personal information. The FCC began soliciting nominations for the group in March 2020. Once established, the group is to be charged to develop and issue best practices regarding (1) how voice service providers can better combat unlawful robocalls made to hospitals; (2) how hospitals can better protect themselves from such calls; and (3) how the federal government and state governments can help combat such calls. Outlook The FCC has taken wide-ranging steps to stop illegal robocalls, including imposing fines on law breakers; mandating the implementation of call authentication technologies by the telecommunications industry; creating databases of numbers that should not be called; and providing regulatory permission to implement call blocking. Although these steps appear to be having some impact, scammers remain determined to continue their attempts to defraud consumers using robocalls. Historically, decreases in the number of robocalls are sometimes followed shortly thereafter by spikes in those numbers, illustrating how robocallers continue to overcome measures to stop them (e.g., by changing their originating numbers). Most of the tools being used against robocalls have been developed recently, while some are still under development. Therefore, it may take telecommunications providers some time to fully implement them, and it may be some time before a long-term and ongoing decrease in robocall numbers will be realized. The positive impacts of FCC initiatives on fraudulent robocalls, as well as potential negative impacts on the telemarketing industry due to blocking legitimate calls, may be the subject of continued oversight by Congress. Summary:	null	96	19,378	19,380	19,380	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Robocalls are the top complaint received by the Federal Communications Commission (FCC) and a consistent congressional concern. A robocall, also known as "voice broadcasting," is any telephone call that delivers a pre-recorded message using an automatic (computerized) telephone dialing system, more commonly referred to as an automatic dialer or "autodialer." The Telephone Consumer Protection Act of 1991 (TCPA) regulates robocalls. Legal robocalls are used by legitimate call originators for political, public service, and emergency messages, which are legal. Other legitimate uses can be, for example, to announce school closures or to remind consumers of medical appointments. Illegal robocalls are usually associated with fraudulent telemarketing campaigns, but an illegal robocall under the TCPA does not necessarily mean that the robocall is fraudulent. Illegal, fraudulent calls usually include misleading or inaccurate Caller ID information to disguise the identity of the calling party and trick called parties, which is called "spoofing." Scammers sometimes use " neighbor spoofing " so it will appear that an incoming call is coming from a local number . They may also spoof a number from a legitimate company or a government agency that consumers know and trust . Like robocalls more generally, spoofing can also be used for legitimate purposes, such as to hide the number of a domestic violence shelter or an individual employee extension at a business or government agency. This report addresses robocalls that are both illegal under the TCPA as well as intended to defraud, not robocalls that are defined only as illegal. The number of robocalls continues to grow in the United States, and the figures tend to fluctuate based on the introduction of new government and industry attempts to stop them and robocallers' changing tactics to thwart those attempts (see Figure 1 ). In 2019, U.S. consumers received 58.5 billion robocalls, an increase of 22% from the 47.8 billion received in 2018, according to the YouMail Robocall Index. In 2016, the full first year the Robocall Index was tabulated, that figure was 29.1 billion callsâhalf the number of calls in 2019. Further, the FCC states that robocalls make up its biggest consumer complaint category, with over 200,000 complaints each yearâaround 60% of all the complaints it receives. Over the past three years, the FCC has pursued a multi-part strategy for combatting spoofed robocalls. The agency has issued hundreds of millions of dollars in fines for violations of its Truth in Caller ID rules; expanded its rules to reach foreign calls and text messages; enabled voice service providers to block certain clearly unlawful calls before they reach consumers' phones; clarified that voice service providers may offer call-blocking services by default; and called on the industry to "trace back" illegal spoofed calls and text messages to their original sources. The FCC estimates that eliminating illegal scam robocalls would provide a public benefit of $3 billion annually. A survey by Truecaller, a company that tracks and blocks robocalls, puts that figure as high as $10.5 billion. The Telephone Robocall Abuse Criminal Enforcement and Deterrence Act The Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (TRACED Act) empowered the FCC to take specific actions to fight illegal robocalls; it was signed into law on December 30, 2019 ( P.L. 116-105 ). The law requires the FCC to administer a forfeiture penalty for violations (with or without intent) of the prohibition on certain robocalls; promulgate rules establishing when a provider may block a voice call based on information provided by the call authentication framework, called Secure Telephony Identity Revisited (STIR) and Signature-based Handling of Asserted information using toKENs (SHAKEN) (together known as "STIR/SHAKEN"), and establish a process to permit a calling party adversely affected by the framework to verify the authenticity of its calls; initiate a rulemaking to help protect subscribers from receiving unwanted calls or texts from a caller using an unauthenticated number; assemble, in conjunction with the Department of Justice, an interagency working group to study and report to Congress on the enforcement of the prohibition of certain robocalls; and initiate a proceeding to determine whether its policies regarding access to number resources could be modified to help reduce access to numbers by potential robocall violators. STIR/SHAKEN is seen by many, including the FCC, as a particularly important part of achieving the projected cost savings associated with eliminating illegal robocalls. STIR/SHAKEN must be implemented by June 30, 2021. Ongoing Efforts to Combat Robocalls Both the telecommunications industry and the FCC are taking steps to counter illegal robocalls. The telecommunications industry has developed new technologies and other tools to detect and block illegal robocalls. The FCC has taken steps to create a policy environment in which those tools can be implemented. The FCC has also expanded the scope of some existing rules and continues to target and fine illegal robocallers. Call Blocking Initiatives In November 2017, the FCC authorized telecommunications providers to block calls originating from numbers that should not originate calls, or that are invalid, unallocated, or unused, without violating call completion rules. In December 2018, the FCC adopted a declaratory ruling clarifying that wireless providers are authorized to take measures to stop unwanted text messaging as well as unwanted calls. The FCC has also encouraged companies that block calls to establish an appeals process for erroneously blocked callers. Do Not Originate Registry and Other Call Blocking The telecommunications industry has now widely implemented the blocking of numbers that should not originate calls, called the "Do Not Originate" (DNO) Registry. In November 2017, the FCC promulgated rules on the creation and use of the DNO Registry. The rules explicitly allow service providers to block calls from two categories of number: (1) numbers that the subscriber has asked to be blocked, such as "in-bound only" numbers (numbers that should not ever originate a call); and (2) unassigned numbers, as the use of such a number indicates that the calling party is intending to defraud a consumer. USTelecom, a trade association representing telecommunications-related businesses in the United States, maintains this registry and works with industry to implement DNO call blocking for in-bound numbers associated with government agencies. 2020 FCC Report on Call Blocking On December 20, 2019, the FCC released a public notice seeking comments for its first of two staff reports on call blocking issues mandated by the TRACED Act. The agency asked for comments on the availability and effectiveness of call blocking tools offered to consumers; the impact of the FCC's actions on illegal calls; the impact of call blocking on 911 services and public safety; and any other issues parties would like to see addressed. Comments were due January 29, 2020, and reply comments were due February 28, 2020. Caller ID Authentication Illegitimate robocallers nearly always spoof their originating number. That is, they deliberately falsify the Caller ID information they are transmitting to disguise their identity. One way to help consumers recognize spoofing and identify scams is to verify who is calling through Caller ID authentication. Over the past few years, the telecommunications industry developed a set of protocols, the STIR/SHAKEN framework that enables phone companies to verify that the Caller ID information transmitted with a call matches the caller's phone number. Once fully implemented, STIR/SHAKEN is expected to reduce the effectiveness of illegal spoofing and enable the identification of illegal robocallers. The FCC mandated the adoption of STIR/SHAKEN on March 31, 2020. These steps are discussed in detail in the section of this report, " FCC Order and Further Notice of Proposed Rulemaking, March 2020 ." Call Traceback More than 30 voice service providers participate in the USTelecom Industry Traceback Group (ITG), which was formally established in May 2016. The ITG is a collaborative effort of companies across the wireline, wireless, voice over internet protocol, and cable industries that actively trace and identify the source of illegal robocalls. The ITG coordinates with federal and state law enforcement agencies to identify non-cooperative providers so those agencies can take enforcement action, as appropriate. During 2019, ITG members conducted more than 1,000 tracebacks, associated with more than 10 million illegal robocalls. This activity has resulted in more than 20 subpoenas and/or civil investigative demands from federal and state enforcement agencies. The ITG published its first status report in January 2020. Reassigned Numbers Database When a consumer cancels service with a voice provider, the provider may reassign the number to a new consumer. If callers are unaware of the reassignment, they can make unwanted calls to the new consumer, unintentionally violating the Telephone Consumer Protection Act. In March 2018, the FCC proposed that one or more databases be created to provide callers with the comprehensive and timely information they need to discover potential number reassignments before making a call. In December 2018, the commission authorized the creation of a reassigned numbers database to enable callers to verify whether a telephone number has been permanently disconnected and is therefore eligible for reassignmentâbefore calling that numberâthereby helping to protect consumers with reassigned numbers from receiving unwanted calls. On January 24, 2020, the FCC requested public comment on the technical requirements developed for the database by the North American Numbering Council (NANC). Comments were due February 24, 2020, and reply comments were due March 9, 2020. FCC Declaratory Ruling and Third Further Notice of Proposed Rulemaking, June 2019 On June 6, 2019, the FCC adopted a declaratory ruling and third further notice of proposed rulemaking (FNPRM), "Advanced Methods to Target and Eliminate Unlawful Robocalls and Call Authentication Trust Anchor." Declaratory Ruling The declaratory ruling empowers phone companies to block suspected illegal robocalls by default (customers may opt out) and asserts the FCC's view that carriers can allow consumers to opt in to more aggressive call-blocking tools, known as white-listing. Both blocking by default and opt-in white-listing tools seek to stop unwanted calls on the voice provider's network before calls reach the consumer's phone. Call-Blocking Programs (Opt Out) Call-blocking programs have become more popular and effective in the past few years. There are numerous blocking tools for different platforms, and the number of available tools is growing. Many service providers only offer these programs on an opt-in basis, limiting their potential impact. Providing a call-blocking program as the default option can significantly increase consumer participation while maintaining consumer choice. White-List Programs (Opt In) White-list programs require consumers to specify the telephone numbers from which they wish to receive callsâall other calls are blocked. Smartphones have provided a new way to implement white-list programs, because they store the consumer's contact list. When the consumer's contacts change, the white list can be updated. The declaratory ruling asserts the FCC's view that nothing in the Communications Act of 1934 or the FCC's rules prohibits a service provider from offering opt-in white-list programs. Third Further Notice of Proposed Rulemaking The FNPRM requested feedback on several proposals: a safe harbor for providers that implement blocking of calls that fail caller authentication under STIR/SHAKEN, protections for critical calls, mandating Caller ID authentication, and measuring the effectiveness of robocall solutions. Comments were due on July 24, 2019, and reply comments were due on August 23, 2019. Safe Harbor for Call-Blocking Programs Based on Potentially Spoofed Calls The FCC proposed a narrow safe harbor for voice service providers that offer call-blocking programs that take into account (1) whether a call has been properly authenticated under the SHAKEN/STIR framework and (2) may potentially be spoofed. The safe harbor limits liability for voice service providers if they block a legal robocall. Among other elements, the FCC proposed a safe harbor for voice service providers that choose to block calls that fail SHAKEN/STIR authentication and asked whether there might be other instances where authentication would fail. The FCC also asked how it could ensure that wanted calls are not blocked and sought comment as to how to identify and remedy the blocking of wanted calls. Protections for Critical Calls The FCC requested comments on whether it should require voice providers offering call-blocking to maintain a "critical calls list" of emergency numbers that must not be blocked. Such lists would include, for example, the outbound numbers of 911 call centers and other government emergency services. The blocking prohibition would apply only to STIR/SHAKEN-authenticated calls. Mandating Caller ID Authentication The FCC requested comments on its proposal to mandate implementation of the STIR/SHAKEN authentication framework, if major voice providers fail to meet the end-of-2019 deadline for voluntary implementation. This is the topic of the FCC order issued on March 31, 2020, and is discussed in detail in the next section of this report, " FCC Order and Further Notice of Proposed Rulemaking, March 2020 ." Measuring the Effectiveness of Robocall Solutions The FCC requested feedback on whether it should create a mechanism to provide information to consumers about the effectiveness of voice providers' robocall solutions and, if so, how it should define and evaluate that effectiveness. The FCC also asked how it could obtain the information needed for such an evaluation. FCC Order and Further Notice of Proposed Rulemaking, March 2020 The FCC published its latest guidance and proposals on March 31, 2020, in a new order and FNPRM. Order The new rules require implementation of Caller ID authentication using STIR/SHAKEN. Specifically, the rules require "all originating and terminating voice service providers to implement STIR/SHAKEN in the Internet Protocol (IP) portions of their networks by June 30, 2021, a deadline that is consistent with Congress's direction in the recently-enacted TRACED Act," described earlier in, " The Telephone Robocall Abuse Criminal Enforcement and Deterrence Act ." Most experts say that widespread deployment of STIR/SHAKEN will reduce the effectiveness of illegal spoofing, allow law enforcement to identify bad actors more easily, and help phone companies to identify calls with illegally spoofed Caller ID information before those calls reach their subscribers. Further Notice of Proposed Rulemaking The FNPRM requests public comments on expanding the STIR/SHAKEN implementation mandate to cover intermediate voice service providers; extending the implementation deadline by one year for small voice service providers pursuant to the TRACED Act; adopting requirements to promote caller ID authentication on voice networks that do not rely on IP technology; and implementing other aspects of the TRACED Act. Comments to the FNPRM are due on May 15, 2020, and reply comments are due on May 29, 2020. Other FCC Actions Related to Robocalls Other FCC actions to fight illegal robocallers include ongoing enforcement actions, an extension of a robocall ban to international callers, and the establishment of a hospital robocall protection group. Ongoing Enforcement Actions Since January 2017, the FCC has imposed or proposed about $240 million in forfeitures against robocallers. One case involved an individual who made more than 96 million illegal robocalls over the course of three months. Another involved an individual who conducted a large-scale robocalling campaign that marketed health insurance to vulnerable populations. In both cases, the illegal calls disrupted an emergency medical paging service. Extension of Robocall Ban to International Callers In 2018, Congress amended the Communications Act of 1934 to prohibit spoofing activities directed at U.S. consumers from callers outside the United States and Caller ID spoofing using alternative voice and text messaging services. To implement these amendments, the FCC issued rules in July 2019 that expanded the act's prohibition on the use of misleading and inaccurate Caller ID information. Hospital Robocall Protection Group The TRACED Act of 2019 required the FCC to establish a Hospital Robocall Protection Group. For most consumers, robocalls are a potentially fraudulent nuisance. For hospitals, though, the robocalls can present challenges that are increasingly threatening doctors and patients: At Tufts Medical Center, administrators registered more than 4,500 calls between about 9:30 and 11:30 a.m. on April 30, 2018, said Taylor Lehmann, the center's chief information security officer. Many of the messages seemed to be the same: Speaking in Mandarin, an unknown voice threatened deportation unless the person who picked up the phone provided their personal information. The FCC began soliciting nominations for the group in March 2020. Once established, the group is to be charged to develop and issue best practices regarding (1) how voice service providers can better combat unlawful robocalls made to hospitals; (2) how hospitals can better protect themselves from such calls; and (3) how the federal government and state governments can help combat such calls. Outlook The FCC has taken wide-ranging steps to stop illegal robocalls, including imposing fines on law breakers; mandating the implementation of call authentication technologies by the telecommunications industry; creating databases of numbers that should not be called; and providing regulatory permission to implement call blocking. Although these steps appear to be having some impact, scammers remain determined to continue their attempts to defraud consumers using robocalls. Historically, decreases in the number of robocalls are sometimes followed shortly thereafter by spikes in those numbers, illustrating how robocallers continue to overcome measures to stop them (e.g., by changing their originating numbers). Most of the tools being used against robocalls have been developed recently, while some are still under development. Therefore, it may take telecommunications providers some time to fully implement them, and it may be some time before a long-term and ongoing decrease in robocall numbers will be realized. The positive impacts of FCC initiatives on fraudulent robocalls, as well as potential negative impacts on the telemarketing industry due to blocking legitimate calls, may be the subject of continued oversight by Congress.	Summary:	gov_report	1,024	null	33
crs_R46366	crs_R46366_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction A pension is a voluntary benefit offered by employers to assist employees in preparing for retirement. Pension plans may be classified according to whether they are (1) defined benefit (DB) or defined contribution (DC) plans and (2) sponsored by one or more than one employer. In DB plans, participants typically receive regular monthly benefit payments in retirement (which some refer to as a "traditional" pension). In DC plans, of which the 401(k) plan is the most common, participants have individual accounts that can provide a source of income in retirement. This report focuses on DB plans. Pension plans are also classified by whether they are sponsored by one employer (single-employer plans) or by more than one employer (multiemployer and multiple-employer plans). Multiemployer pension plans are sponsored by more than one employer (often, though not required to be, in the same industry) and maintained as part of a collective bargaining agreement. Multiple-employer plans are sponsored by more than one employer but are not maintained as part of collective bargaining agreements. Multiple-employer plans follow the same funding rules as single-employer plans and are generally not reported separately. This report focuses on single-employer plans. Except where noted, references to single-employer plans in this report include multiple-employer plans. To protect the interests of pension plan participants and beneficiaries, Congress enacted the Employee Retirement Income Security Act of 1974 (ERISA; P.L. 93-406 ). The law is codified in the Internal Revenue Code (26 U.S.C.) and Labor Code (29 U.S.C.). ERISA sets standards that private-sector pension plans must follow with regard to plan participation (who must be covered); minimum vesting requirements (how long a person must work for an employer to be covered); fiduciary duties (how individuals who oversee the plan must behave); and plan funding (how much employers must set aside to pay for future benefits). In addition, ERISA established the Pension Benefit Guaranty Corporation (PBGC), which is a government corporation that insures DB pension plans covered by ERISA in the case of plan termination. ERISA covers only private-sector pension plans and plans established by nonprofit organizations. It exempts pension plans established by the federal, state, and local governments and by churches. The funding relief provisions discussed in this report generally apply only to plans covered by ERISA. Basics of Single-Employer Defined Benefit Pension Plan Funding Pension funding consists of several elements. These include the value of plan benefits that participants will receive in the current and in future years; the amount a plan has set aside to pay for these benefits; and the employer contributions required each year to ensure the plan has sufficient funds to pay benefits when participants retire. The amount of a participant's benefit in a single-employer DB plan is based on a formula that typically uses a combination of length of service, accrual rate, and average of final years' salary. For example, a plan might specify that retirees receive an amount equal to 1.5% of their pay for each year of service, where the pay is the average of a worker's salary during his or her highest-paid five years. In general, ERISA requires DB plans to have enough assets set aside to pay the benefits owed to participants. For various reasons, plans may have less or more than this amount. Employers that sponsor DB plans are required to make annual contributions to their plans to ensure they ultimately reach that 100% funding goal. Typical Defined Benefit Plan Balance Sheet Figure 1 depicts a typical DB pension plan's balance sheet. It consists of (1) plan assets, which are the value of the investments made with accrued employer (and employee, if any) contributions to the plan, and (2) plan liabilities, which are the value of participants' benefits earned under the terms of the plan. Plan assets are invested in equities (such as publicly-traded stock), debt (such as the U.S. Treasury and corporate bonds), private equity, hedge funds, and real estate. Plan Assets Pension plans are required to report the value of plan assets using two methods: (1) market values (the value at which assets can be sold on a particular date) and (2) smoothed, or actuarial , values (the average of the past, and sometimes expected future, market values of each asset). Actuarial values are used to determine the 100% funding goal and any additional employer contributions necessary to achieve that goal. The smoothing of asset values prevents large swings in asset values and creates a more predictable funding environment for plan sponsors. Some advocates of reporting market values note that smoothed values are often higher than market values (particularly during periods of market declines), which could overstate the financial health of some pension plans. Some advocates of smoothing argue that market values are useful only if a plan needs to know its liquidated value (e.g., if the plan had to pay all of its benefit obligations at one point in time), which is unlikely to be the case as most employers sponsoring pension plans are unlikely to enter bankruptcy. Plan Liabilities A pension plan's benefits are a plan liability spread out over many years in the future. These future benefits are calculated and reported as present values (also called current values). Using a formula, benefits that are expected to be paid in a particular year in the future are calculated so they can be expressed as a present value. This process is called discounting , and it is the reverse of the process of compounding , which projects how much a current dollar amount will be worth at a point in the future. The formula by which future values are calculated as present values is shown in Figure 2 . Figure 3 shows a simplified example of a DB pension benefit calculation. In this example, it is assumed that at the beginning of year 1, the worker has already earned a benefit of $100 per year in retirement, which is expected to begin in year 5. Retirement is expected to last four years. Each of the payments is made at the beginning of the year and is discounted using the present value formula in Figure 2 and assuming an interest rate of 10%. In this example, the first benefit is received at the beginning of year 5, so that benefit payment is discounted over four years. The benefits for the following three years are also discounted to beginning of year 1 dollar amounts and are then summed, resulting in a benefit value of $238.16 at the beginning of year 1. The calculated present value of the benefit payments depends on the year in which the benefit is calculated. For example, as a worker moves closer to the expected date of retirement and recalculates the present value of the benefit, the calculated value of the obligation increases. For example, when calculated at the beginning of year 2, the simplified pension benefit has a present value of $261.97 in year 2 dollars . When calculated at the beginning of year 3, the benefit has a present value of $288.17 in year 3 dollars . Defined Benefit Plan Funding Ratio The DB plan funding ratio compares the value of a plan's assets with the present value of a plan's liabilities and is often used as an indicator of the financial health of a plan. The DB plan funding ratio is calculated as A funding ratio of 100% indicates that the DB plan has set aside enough funds to pay the present value of the plan's future benefit obligations. Funding ratios that are less than 100% indicate that the DB plan has not set aside enough to meet the calculated value of its future benefit obligations. Because benefit obligations are typically paid out over a period of 20 to 30 years, participants in even an underfunded plan will likely receive their promised benefits in the near term. However, if the underfunding persists without additional contributions or higher investment returns, plan participants in an underfunded plan might not receive 100% of their promised benefits in the future. Returning to the example above, setting aside $238.16 at the beginning of year 1 would fund the year 1 value of the benefit. At the beginning of year 2, the benefit has a recalculated value of $261.97 in year 2 dollars. Because $238.16 was set aside at the beginning of year 1â and assuming no investment gains or losses and no additional pension benefits âan additional contribution of $23.81 ($261.97 - $238.16) is needed to fund the value of the benefit as calculated at the beginning of year 2. Likewise, at the beginning of year 3, the benefit has a recalculated value of $288.17 in year 3 dollars. Because $238.16 was set aside at the beginning of year 1, and $23.81 more was contributed at the beginning of year 2â and assuming no investment gains or losses and no additional pension benefits âan additional contribution of $26.20 ($288.17 - $261.97) is needed to fund the value of the benefit as calculated at the beginning of year 3. This discussion of the example in Figure 3 has reviewed the funding ratio and required payments for only the first three years displayed. In practice, the DB plan funding ratio would continue to be recalculated and payments necessary to satisfy any DB plan funding ratio shortfalls would continue to be required each year to ensure the DB plan funding obligation is fully satisfied. The present value of a dollar amount is inversely related to the assumed interest rate. As the interest rate increases, present value decreases; as the interest rate decreases, present value increases. In the above example, if the interest rate is 15%, then the pension benefit has a value of $187.72 calculated at the beginning of year 1, $215.88 calculated at the beginning of year 2, and $248.26 calculated at the beginning of year 3. In this modification of the simplified example, with the only difference being a 15% interest rate, the pension benefit would be fundedâ and assuming no investment gains or losses and no additional pension benefits âwith contributions of $187.72 at the beginning of year 1; $215.88 - $187.72 = $28.16 at the beginning of year 2; and $248.26 - $215.88 = $32.38 at the beginning of year 3. This example shows payments for the first three years; in practice, contributions would continue until the obligation is fully satisfied. Note that the amounts of the yearly payments differ depending on the interest rate used. Compared with the payments in the 10% interest rate example, the initial payment in the 15% example is lower ($187.72 versus $238.16) but subsequent payments are higher (e.g., year 2 payments are $28.16 using the 15% interest rate and $23.81 using the 10% interest rate). Over time, the required payments in both casesâ assuming no investment gains or losses and no additional pension benefits âsum to the total benefits received in retirement. The interest rate used by single-employer DB plans is discussed later in this report. Annual Employer Contributions to Defined Benefit Plans ERISA sets out requirements for the minimum required contribution , which is amount of money that must be contributed each year to a DB pension plan. In general, the minimum required contribution is the sum of (1) the value of benefits earned by participants in the plan year (the target normal cost ), (2) installment payments resulting from plan underfunding in previous years (the shortfall amortization charge ), and (3) installment payments resulting from Internal Revenue Service- (IRS-) approved waived required contributions in previous years (the waiver amortization charge ). Target Normal Cost The target normal cost represents the value of pension benefits that are earned or accrued by employees in a plan year and the cost to administer these benefits (minus any mandatory employee contributions). Amortization Charges A DB plan's funding can change in a given year as a result of changes to participants' benefits, employer contributions, and circumstances or events outside the plan's control. Plan underfunding could increase from events such as a decrease in plan assets due to declines in the stock market or an increase in plan liabilities due to decreases in interest rates. In order for a plan to remain fully funded, employers must increase their plan contributions to make up for losses that are outside the plan's control. Employers are not required to make up for the losses all at once. Rather, they may make installment payments to make up for plan losses over a number of years. Plan underfunding is paid off in installment payments via amortization . The amortization period is the length of time over which a plan can spread the installment payments. Shortfall Amortization Charge A plan's funding target is the present value of all benefits earned by participants as of the beginning of the year. A plan's funding shortfall is the amount by which the funding target is greater than the value of plan assets. Various factors can cause funding shortfalls, such as investment losses and decrease in interest rates. In general, PPA required plan underfunding resulting from funding shortfalls to be amortized over a period of seven years. Waiver Amortization Charge Employers that face a temporary substantial business hardship can apply to the IRS for a funding waiver. Missed minimum required contributions as a result of receiving an IRS funding waiver must be amortized over five years. The waiver amortization charge is the amount of a plan's installment payment that amortizes the missed contributions. Single-Employer Defined Benefit Pension Plan Data Table 1 provides data on single-employer DB pension plans. In 2018, there were over 23,000 of such plans with 26.2 million participants. According to PBGC, 81.4% of plans (containing 95.2% of plan participants) were underfunded in 2016. The total amount of underfunding in these plans was $625.4 billion. In addition, 18.6% of plans (containing 4.8% of participants) were overfunded in 2016. The total amount of overfunding in these plans was $15.3 billion. Figure 4 shows the funding percentage of the 100 largest corporate DB pension plans from 2015 to 2020. The most recent data show that in February 2020, these plans had $1.6 trillion in assets and $1.9 trillion in projected benefit obligations. The funding percentage (assets as a percentage of benefit obligations) was 82.2%, and total underfunding was $0.3 trillion. The Pension Protection Act of 2006 The Pension Protection Act of 2006 (PPA; P.L. 109-280 ) was the most recent major legislation to affect pension plan funding. Among other provisions, PPA established new funding rules for single- and multiple-employer plans and required that plans become 100% funded over a certain time period. PPA specified interest rates and other actuarial assumptions that plans must use to calculate their funding targets and target normal costs. PPA gave plans three years to transition to the new funding requirements. PPA also created special rules for certain types of plans, including those sponsored by certain government contractors, commercial airlines, and rural cooperatives. Pension Protection Act Interest Rates PPA specified that pension plans discount their future benefit obligations using three different interest rates. The rates, called segment rates, used in the calculation depend on the date on which benefit obligations are expected to be paid and the corresponding rates on the corporate bond yield curve. The segment rates are calculated as the average of the corporate bond yields within the segment for the preceding 24 months. The IRS publishes the segment rates on a monthly basis. The first segment is for benefits payable within five years. The first segment rate is calculated as the average of short-term bond yields (with a maturity less than five years) for the preceding 24 months. Likewise, the second and third segments are for benefits payable after 5 years to 20 years and after 20 years, respectively. The second and third segment rates are calculated similarly to the first segment rates, using bonds of appropriate maturities. Pension Protection Act Amortization Periods PPA required that shortfall amortization charges (funding shortfalls as a result of, for example, investment losses) be amortized over seven years and waiver amortization charges (from missed required minimum contributions) be amortized over five years. Amortization payments include interest. Pension Protection Act Special Rules for Certain Plans PPA outlined special rules for certain pension plans. Some of the rules have expired; others have been extended or expanded by subsequent legislation. Special Rules for Certain Commercial Airline Industry Plans PPA provided special funding rules for certain eligible plans maintained by (1) a commercial passenger airline or (2) an employer whose principal business is providing catering services to a commercial passenger airline. Eligible plans that met certain benefit accrual and benefit increase restrictions could (1) use a 17-year amortization period, instead of the seven years required by PPA, beginning in 2006 or 2007 and (2) use an 8.85% interest rate, instead of the required segment rates, for the purposes of valuing benefit obligations. Eligible plans that did not meet certain benefit accrual and benefit increase restrictions could choose to use a 10-year amortization period for the first taxable year, beginning in 2008. Special Rules for Certain Government Contractor Plans PPA delayed the date for certain government contractor plans to adopt the new funding rules to the 2011 plan year. Eligible plans were defense industry contractors whose primary source of revenue was derived from business performed under government contracts that exceeded $5 billion in the prior fiscal year. Special Rules for Certain Pension Benefit Guaranty Corporation Settlement Plans PPA delayed the date for certain PBGC settlement plans to adopt the new funding rules to the 2014 plan year. Eligible plans were those in existence as of July 26, 2005, and (1) sponsored by an employer in bankruptcy proceedings giving rise to a claim of $150 million or less, and the sponsorship of which was assumed by another employer, or (2) that, by agreement with PBGC, were spun off from plans that were subsequently terminated by PBGC in involuntary terminations. Funding Relief and Other Modifications for Single-Employer Plans Since PPA's enactment in 2006, Congress has modified funding rules for pension plans several times. Funding relief provisions have delayed the implementation dates of some PPA provisions, extended amortization periods, or changed interest rates. Some funding relief has been directed toward all single-employer DB plans; other modifications of funding rules have been targeted to specific types of pension plans, such as plans for certain cooperative and charitable organizations and for community newspapers. An extension of amortization periods allows plans a greater amount of time to pay off unfunded liabilities, meaning that plans can contribute less money per year over a greater number of years. Changes in interest rates modify the timing of required employer contributions. As previously mentioned, a higher interest rate decreases the present value of plan liabilities, which means employers can contribute less today to fund a future benefit. The dollar amount of the benefit that a participant will receive in the future remains unchanged. Relative to a lower interest rate, a higher interest rate allows plans to contribute relatively smaller amounts in the near term but will have to be made up with higher contributions in the longer term. A lower interest rate does the oppositeâit increases the present value of plan liabilities, requiring more employer contributions in the near term (and fewer in the long term). Funding Relief and Other Modifications Since the Pension Protection Act The following sections describe funding relief provisions and other funding rule modifications in chronological order, where feasible, since PPA. Special Rules for Certain Plans in the Commercial Airline Industry The U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 ( P.L. 110-28 ) provided funding relief for plans operated by certain commercial airlines and airline catering companies. As described above, PPA had extended the amortization period to either 10 or 17 years for these plans. P.L. 110-28 specified that eligible plans that had chosen the 10-year amortization period could use an interest rate of 8.25% for purposes of calculating the funding target for each of those 10 years. Delay of Certain Pension Protection Act Rules The Worker, Retiree, and Employer Recovery Act of 2008 (WRERA; P.L. 110-458 ) delayed the implementation of the PPA transition rules, giving plans additional time to become fully funded (given the decline in asset values due to the 2007-2009 economic downturn). Extended Amortization Periods The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 ( P.L. 111-192 ) allowed plans to amortize underfunding resulting from the 2007-2009 market downturn using one of two alternative amortization schedules. Pension plan sponsors could amortize their funding shortfalls over either (1) 9 years, with the first 2 years of payments consisting of interest only on the amortization charge and the next 7 years consisting of interest and principal, or (2) 15 years. Plan sponsors that chose one of these amortization schedules were required to make additional contributions to the plan if the plan sponsors paid excess compensation or declared extraordinary dividends, as defined in P.L. 111-192 . Interest Rate Corridors The Moving Ahead for Progress in the 21 st Century Act (MAP-21; P.L. 112-141 ) established a funding corridor to provide minimum and maximum interest rates used in calculating plan liabilities. The minimum and maximum rates were initially calculated as 90% and 110%, respectively, of the average of corporate bond yields for the segment over the prior 25-year period. If the 24-month segment interest rate as calculated under PPA is below the minimum percentage of the funding corridor, the interest rate is adjusted upward to the minimum. If the 24-month segment interest rate is higher than the maximum, it is adjusted downward to the maximum. MAP-21 adjusted the minimum and maximum percentages surrounding the baseline rate over time to become 70% and 130%, respectively, by 2016 (essentially widening the corridor). When interest rates increase (which occurs when the 24-month rate is adjusted upward to the minimum rate), the present value of future benefit obligations decreases, and required plan contributions decrease. When companies contribute less to their pension plan, lower plan contributions increase companies' taxable income, which results in increased Treasury revenue. Since MAP-21, provisions in enacted legislation twice delayed the beginning of the widening of the funding corridor. First, the Highway and Transportation Funding Act of 2014 (HTF; P.L. 113-159 ) delayed the beginning of widening of the funding corridor until 2018. Later, the Bipartisan Budget Act of 2015 (BBA; P.L. 114-74 ) delayed it until 2021. Table 2 shows the applicable minimum and maximum percentages under MAP-21, HTF, and BBA. Figure 5 shows a hypothetical example of how segment rates are determined using the funding corridors. The red line shows the average of a segment's interest rates for the prior 25 years. The yellow and gold lines indicate the minimum and maximum rates around the 25-year average under the MAP-21 provisions. The light green and dark green lines indicate the widening of the corridors around the 25-year average under the HTF provisions (starting in 2018). The light blue and dark blue lines are the minimum and maximum rates around the 25-year averages in current law, as passed in the BBA (starting in 2021). Because of the HTF and BBA extensions, the minimum and maximum corridors have remained at 90% and 110%, respectively, since 2012. The following example demonstrates how segment rates are adjusted. If Treasury determines that the segment rate is above the maximum segment rateâpoint (1) in Figure 5 âthen Treasury adjusts the segment rate downward until it equals the proposed maximum segment rate. If Treasury determines that the segment rate is at or below the maximum segment rate and at or above the minimum segment rateâpoint (2) in Figure 5 âTreasury does not adjust the segment rates. If Treasury determines that the segment rate is below the minimum segment rateâpoint (3) in Figure 5 âthen Treasury adjusts the interest rate upward until it equals the proposed minimum segment rate. For example, in April 2020, the first segment rate before adjustment was 2.68%. Adjusted for the 25-year average bond yields, the first segment rate was 3.64%. Special Rules for Certain Cooperative and Charity Pension Plans Congress has authorized special funding rules for plans sponsored by specific types of employers, such as rural cooperatives and certain charities. PPA delayed the implementation of funding rules for certain cooperatives. Subsequent legislation expanded this delayed effective date to certain charities. Later legislation modified funding rules for these plans, referred to as Cooperative and Small Employer Charity (CSEC) pension plans. With two exceptions, CSEC plans are multiple-employer pension plans established by eligible cooperatives and certain charitable organizations to provide retirement benefits for their employees. Delay of PPA Funding Rules PPA provided a delayed effective date of January 1, 2017, for certain multiple-employer cooperative plansâsuch as pension plans for agriculture, electric, and telephone cooperativesâto adopt the new funding rules. The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 ( P.L. 111-192 ) extended PPA's delayed effective date to apply to certain charitable organizations' pension plansâmultiple-employer plans whose employers are charitable organizations described in 26 USC Â§501(c)(3). Establishment of CSEC Funding Rules The Cooperative and Small Employer Charity Pension Flexibility Act of 2013 ( P.L. 113-97 ) established funding rules for and provided a definition of CSEC pension plans. Among other provisions, this act permanently exempted these plans from PPA's funding rules and outlined minimum funding standards for CSEC plans. Plans must indicate if they use the CSEC-specific funding rules in their required annual reporting to the Department of Labor (DOL). Table A-1 provides a list of CSEC plans and funded status in the 2017 plan year. Expanded Definition of CSEC Plans in 2015 Section 3 of Division P of the Consolidated and Further Continuing Appropriations Act, 2015 ( P.L. 113-235 ) expanded the definition of CSEC plans to include plans maintained by an employer that meet several criteria. It appears that the Boy Scouts of America Master Pension Trust is the only plan that meets these expanded criteria. Expanded Definition of CSEC Plans in 2020 Section 3609 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136 ) applies CSEC funding rules to plans sponsored by certain charitable employers "whose primary exempt purpose is providing services with respect to mothers and children," among other criteria. It appears that the pension plan sponsored by March of Dimes is the only plan that meets these expanded criteria. Special Rules for Community Newspaper Plans Section 115 of the Setting Every Community up for Retirement Enhancement Act of 2019 (SECURE Act, enacted as Division O of the Further Consolidated Appropriations Act of 2020; P.L. 116-94 ) provided special funding rules for pension plans operated by certain community newspapers that had no benefit increases for participants after December 31, 2017. Community newspaper plans are those maintained by certain private community newspaper organizations that are family-controlled and have been in existence for 30 or more years. For these plans, the SECURE Act increased the interest rate to 8%, and extended the amortization period from 7 to 30 years. Delayed Due Date for 2020 Plan Contributions Section 3608 of the CARES Act ( P.L. 116-136 ) allows contributions that are due in calendar year 2020 to be made, with interest, on January 1, 2021. Section 3608 also allows plans to use the funding percentage for the 2019 plan year, rather than the 2020 plan year (which would likely be lower), in determining whether plans must impose benefit restrictions. Policy Considerations Policymakers and stakeholders might consider some of the policy implications of single-employer DB pension plan funding relief. The considerations include the rationale for providing relief, the effects of lower levels of plan assets on participant benefits and PBGC, and the effect on the federal budget. Funding relief results in lower employer contributions to DB plans in the near term. Among the rationales for funding relief is that it allows employers the flexibility to use funds for other priorities (such as retaining or hiring employees). For example, 74 trade associations said in a 2009 letter to policymakers that, "[P]roviding defined benefit funding relief is directly related to improving the economy and employment." On the other hand, some policymakers oppose funding relief to specific industries or companies because they provide "a special-interest bailout" and set both "bad policy and bad precedent." Some stakeholders have expressed concern that employers adopting funding relief measures might use the funds saved via reduced contributions for non-core business activities. For example, the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 ( P.L. 111-192 ) limited the ability of employers that adopted funding relief measures to provide excess employee compensation or extraordinary dividends. Although employer contributions and plan assets are lower following funding relief, participants' benefits are not necessarily at riskâalthough they may be under certain circumstances. Participants in DB plans that receive funding relief remain entitled to their benefits; funding relief does not reduce these benefits. For employers that do not become bankrupt, modifying the timing of contributions generally would not be problematicâover time, the employer would need to make all required contributions for participants to receive their full benefits. However, in the case of employer bankruptcy, the timing of contributions may negatively affect both participants' benefits and PBGC. Participants with benefits greater than the PBGC maximum guarantee or with non-guaranteed benefits might see reduced benefits when PBGC becomes trustee of their plan. Following funding relief, there are fewer plan assets available from which to pay non-guaranteed benefits because funding relief lowers employer contributions to DB plans in the short term. In addition, PBGC receives fewer assets from the plans that it trustees, which harms its financial position. ERISA requires PBGC to be self-supporting and receives no appropriations from general revenue. ERISA states that the "United States is not liable for any obligation or liability incurred by the corporation." Increasingly large amounts of unfunded liabilities in terminated plans may burden PBGC's single-employer insurance program. Although PBGC ended FY2019 with a surplus of $8.6 billion, the effects of (1) the Coronavirus Disease 2019 (COVID-19) pandemic on the financial health of employers and (2) the market downturn in early 2020 on the value of DB plan assets will likely worsen the funding position of single-employer pension plans and PBGC's financial position. Funding relief can result in short-term revenue for Treasury and PBGC. Because employer contributions to pension plans are generally tax deductible, decreasing a plan's required contributions for a year (either through increasing the interest rate or extending the amortization period) increases the plan's taxable income. Some stakeholders point out that because funding relief provides revenue to Treasury, it has been used for budgetary offsets without regard to the policy justifications. Funding relief can positively affect PBGC finances because greater DB plan underfunding results in higher variable-rate premiums (premiums based on the amount of plan underfunding) paid by employers to PBGC. Appendix. Data on CSEC Plans in 2017 Table A-1 provides data on Cooperative and Small Employer Charity (CSEC) plans in the 2017 plan year (the most recent year for which complete data are available). In total, CSEC plans had about 239,000 participants, $19.6 billion in assets, and a total funding target of $20.7 billion in 2017. The largest plan by number of participants in 2017 was the Retirement Security Plan, which had assets of $8.6 billion and a total funding target of $9.2 billion in that year. To determine which plans use CSEC funding rules, the Congressional Research Service (CRS) analyzed public-use Form 5500 data from the Department of Labor (DOL) for the 2014 to 2017 plan years. 2014 is the first year that Form 5500 includes an option to indicate the use of CSEC funding rules (following P.L. 113-97 ), and 2017 is the most recent year for which complete data are available. Most private-sector pension plans are required to submit annual forms to the Internal Revenue Service (IRS), DOL, and the Pension Benefit Guaranty Corporation (PBGC). These forms generally include information about the plan, such as the number of participants, financial information, and the companies that provide services to the plan. In addition to Form 5500, pension plans are generally required to file information in specific schedules. For example, most single-employer and multiple-employer plans are required to file Schedule SB, which contains information specific to these plans. Each pension plan's Form 5500 and required schedules are available by search on DOL's website. Because data are self-reported, Table A-1 may not capture all plans that used CSEC funding rules or may include non-CSEC plans that erroneously identified as CSEC plans. Table A-1 provides data on private-sector defined benefit (DB) pension plans that indicated using CSEC funding rules on their 2014, 2015, 2016, or 2017 Schedule SB filings. Twenty-eight plans indicated using CSEC funding rules in multiple years. One plan, the Johns Hopkins Health System Corporation Plan, appeared to start using CSEC funding rules in 2017. Table A-1 provides the total number of participants, actuarial value of assets, total funding target, and funding target attainment percentage for the 29 plans (including the Johns Hopkins plan). In addition to the Johns Hopkins plan, 10 plans indicated using CSEC funding rules in a single year but not in other years. An examination of individual plan filings from the Employee Benefits Security Administration (EBSA) showed that these plans did not use CSEC funding rules in the year they indicated having done so and are not included in this analysis. The Employee Benefit Plan of Jewish Community of Louisville, Inc., indicated using CSEC funding rules in 2014, 2015, and 2016, but a Form 5500 for the 2017 plan year is not available and is not included in Table A-1 . In 2016, this plan had 110 participants. Summary:	null	96	35,956	35,958	35,958	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction A pension is a voluntary benefit offered by employers to assist employees in preparing for retirement. Pension plans may be classified according to whether they are (1) defined benefit (DB) or defined contribution (DC) plans and (2) sponsored by one or more than one employer. In DB plans, participants typically receive regular monthly benefit payments in retirement (which some refer to as a "traditional" pension). In DC plans, of which the 401(k) plan is the most common, participants have individual accounts that can provide a source of income in retirement. This report focuses on DB plans. Pension plans are also classified by whether they are sponsored by one employer (single-employer plans) or by more than one employer (multiemployer and multiple-employer plans). Multiemployer pension plans are sponsored by more than one employer (often, though not required to be, in the same industry) and maintained as part of a collective bargaining agreement. Multiple-employer plans are sponsored by more than one employer but are not maintained as part of collective bargaining agreements. Multiple-employer plans follow the same funding rules as single-employer plans and are generally not reported separately. This report focuses on single-employer plans. Except where noted, references to single-employer plans in this report include multiple-employer plans. To protect the interests of pension plan participants and beneficiaries, Congress enacted the Employee Retirement Income Security Act of 1974 (ERISA; P.L. 93-406 ). The law is codified in the Internal Revenue Code (26 U.S.C.) and Labor Code (29 U.S.C.). ERISA sets standards that private-sector pension plans must follow with regard to plan participation (who must be covered); minimum vesting requirements (how long a person must work for an employer to be covered); fiduciary duties (how individuals who oversee the plan must behave); and plan funding (how much employers must set aside to pay for future benefits). In addition, ERISA established the Pension Benefit Guaranty Corporation (PBGC), which is a government corporation that insures DB pension plans covered by ERISA in the case of plan termination. ERISA covers only private-sector pension plans and plans established by nonprofit organizations. It exempts pension plans established by the federal, state, and local governments and by churches. The funding relief provisions discussed in this report generally apply only to plans covered by ERISA. Basics of Single-Employer Defined Benefit Pension Plan Funding Pension funding consists of several elements. These include the value of plan benefits that participants will receive in the current and in future years; the amount a plan has set aside to pay for these benefits; and the employer contributions required each year to ensure the plan has sufficient funds to pay benefits when participants retire. The amount of a participant's benefit in a single-employer DB plan is based on a formula that typically uses a combination of length of service, accrual rate, and average of final years' salary. For example, a plan might specify that retirees receive an amount equal to 1.5% of their pay for each year of service, where the pay is the average of a worker's salary during his or her highest-paid five years. In general, ERISA requires DB plans to have enough assets set aside to pay the benefits owed to participants. For various reasons, plans may have less or more than this amount. Employers that sponsor DB plans are required to make annual contributions to their plans to ensure they ultimately reach that 100% funding goal. Typical Defined Benefit Plan Balance Sheet Figure 1 depicts a typical DB pension plan's balance sheet. It consists of (1) plan assets, which are the value of the investments made with accrued employer (and employee, if any) contributions to the plan, and (2) plan liabilities, which are the value of participants' benefits earned under the terms of the plan. Plan assets are invested in equities (such as publicly-traded stock), debt (such as the U.S. Treasury and corporate bonds), private equity, hedge funds, and real estate. Plan Assets Pension plans are required to report the value of plan assets using two methods: (1) market values (the value at which assets can be sold on a particular date) and (2) smoothed, or actuarial , values (the average of the past, and sometimes expected future, market values of each asset). Actuarial values are used to determine the 100% funding goal and any additional employer contributions necessary to achieve that goal. The smoothing of asset values prevents large swings in asset values and creates a more predictable funding environment for plan sponsors. Some advocates of reporting market values note that smoothed values are often higher than market values (particularly during periods of market declines), which could overstate the financial health of some pension plans. Some advocates of smoothing argue that market values are useful only if a plan needs to know its liquidated value (e.g., if the plan had to pay all of its benefit obligations at one point in time), which is unlikely to be the case as most employers sponsoring pension plans are unlikely to enter bankruptcy. Plan Liabilities A pension plan's benefits are a plan liability spread out over many years in the future. These future benefits are calculated and reported as present values (also called current values). Using a formula, benefits that are expected to be paid in a particular year in the future are calculated so they can be expressed as a present value. This process is called discounting , and it is the reverse of the process of compounding , which projects how much a current dollar amount will be worth at a point in the future. The formula by which future values are calculated as present values is shown in Figure 2 . Figure 3 shows a simplified example of a DB pension benefit calculation. In this example, it is assumed that at the beginning of year 1, the worker has already earned a benefit of $100 per year in retirement, which is expected to begin in year 5. Retirement is expected to last four years. Each of the payments is made at the beginning of the year and is discounted using the present value formula in Figure 2 and assuming an interest rate of 10%. In this example, the first benefit is received at the beginning of year 5, so that benefit payment is discounted over four years. The benefits for the following three years are also discounted to beginning of year 1 dollar amounts and are then summed, resulting in a benefit value of $238.16 at the beginning of year 1. The calculated present value of the benefit payments depends on the year in which the benefit is calculated. For example, as a worker moves closer to the expected date of retirement and recalculates the present value of the benefit, the calculated value of the obligation increases. For example, when calculated at the beginning of year 2, the simplified pension benefit has a present value of $261.97 in year 2 dollars . When calculated at the beginning of year 3, the benefit has a present value of $288.17 in year 3 dollars . Defined Benefit Plan Funding Ratio The DB plan funding ratio compares the value of a plan's assets with the present value of a plan's liabilities and is often used as an indicator of the financial health of a plan. The DB plan funding ratio is calculated as A funding ratio of 100% indicates that the DB plan has set aside enough funds to pay the present value of the plan's future benefit obligations. Funding ratios that are less than 100% indicate that the DB plan has not set aside enough to meet the calculated value of its future benefit obligations. Because benefit obligations are typically paid out over a period of 20 to 30 years, participants in even an underfunded plan will likely receive their promised benefits in the near term. However, if the underfunding persists without additional contributions or higher investment returns, plan participants in an underfunded plan might not receive 100% of their promised benefits in the future. Returning to the example above, setting aside $238.16 at the beginning of year 1 would fund the year 1 value of the benefit. At the beginning of year 2, the benefit has a recalculated value of $261.97 in year 2 dollars. Because $238.16 was set aside at the beginning of year 1â and assuming no investment gains or losses and no additional pension benefits âan additional contribution of $23.81 ($261.97 - $238.16) is needed to fund the value of the benefit as calculated at the beginning of year 2. Likewise, at the beginning of year 3, the benefit has a recalculated value of $288.17 in year 3 dollars. Because $238.16 was set aside at the beginning of year 1, and $23.81 more was contributed at the beginning of year 2â and assuming no investment gains or losses and no additional pension benefits âan additional contribution of $26.20 ($288.17 - $261.97) is needed to fund the value of the benefit as calculated at the beginning of year 3. This discussion of the example in Figure 3 has reviewed the funding ratio and required payments for only the first three years displayed. In practice, the DB plan funding ratio would continue to be recalculated and payments necessary to satisfy any DB plan funding ratio shortfalls would continue to be required each year to ensure the DB plan funding obligation is fully satisfied. The present value of a dollar amount is inversely related to the assumed interest rate. As the interest rate increases, present value decreases; as the interest rate decreases, present value increases. In the above example, if the interest rate is 15%, then the pension benefit has a value of $187.72 calculated at the beginning of year 1, $215.88 calculated at the beginning of year 2, and $248.26 calculated at the beginning of year 3. In this modification of the simplified example, with the only difference being a 15% interest rate, the pension benefit would be fundedâ and assuming no investment gains or losses and no additional pension benefits âwith contributions of $187.72 at the beginning of year 1; $215.88 - $187.72 = $28.16 at the beginning of year 2; and $248.26 - $215.88 = $32.38 at the beginning of year 3. This example shows payments for the first three years; in practice, contributions would continue until the obligation is fully satisfied. Note that the amounts of the yearly payments differ depending on the interest rate used. Compared with the payments in the 10% interest rate example, the initial payment in the 15% example is lower ($187.72 versus $238.16) but subsequent payments are higher (e.g., year 2 payments are $28.16 using the 15% interest rate and $23.81 using the 10% interest rate). Over time, the required payments in both casesâ assuming no investment gains or losses and no additional pension benefits âsum to the total benefits received in retirement. The interest rate used by single-employer DB plans is discussed later in this report. Annual Employer Contributions to Defined Benefit Plans ERISA sets out requirements for the minimum required contribution , which is amount of money that must be contributed each year to a DB pension plan. In general, the minimum required contribution is the sum of (1) the value of benefits earned by participants in the plan year (the target normal cost ), (2) installment payments resulting from plan underfunding in previous years (the shortfall amortization charge ), and (3) installment payments resulting from Internal Revenue Service- (IRS-) approved waived required contributions in previous years (the waiver amortization charge ). Target Normal Cost The target normal cost represents the value of pension benefits that are earned or accrued by employees in a plan year and the cost to administer these benefits (minus any mandatory employee contributions). Amortization Charges A DB plan's funding can change in a given year as a result of changes to participants' benefits, employer contributions, and circumstances or events outside the plan's control. Plan underfunding could increase from events such as a decrease in plan assets due to declines in the stock market or an increase in plan liabilities due to decreases in interest rates. In order for a plan to remain fully funded, employers must increase their plan contributions to make up for losses that are outside the plan's control. Employers are not required to make up for the losses all at once. Rather, they may make installment payments to make up for plan losses over a number of years. Plan underfunding is paid off in installment payments via amortization . The amortization period is the length of time over which a plan can spread the installment payments. Shortfall Amortization Charge A plan's funding target is the present value of all benefits earned by participants as of the beginning of the year. A plan's funding shortfall is the amount by which the funding target is greater than the value of plan assets. Various factors can cause funding shortfalls, such as investment losses and decrease in interest rates. In general, PPA required plan underfunding resulting from funding shortfalls to be amortized over a period of seven years. Waiver Amortization Charge Employers that face a temporary substantial business hardship can apply to the IRS for a funding waiver. Missed minimum required contributions as a result of receiving an IRS funding waiver must be amortized over five years. The waiver amortization charge is the amount of a plan's installment payment that amortizes the missed contributions. Single-Employer Defined Benefit Pension Plan Data Table 1 provides data on single-employer DB pension plans. In 2018, there were over 23,000 of such plans with 26.2 million participants. According to PBGC, 81.4% of plans (containing 95.2% of plan participants) were underfunded in 2016. The total amount of underfunding in these plans was $625.4 billion. In addition, 18.6% of plans (containing 4.8% of participants) were overfunded in 2016. The total amount of overfunding in these plans was $15.3 billion. Figure 4 shows the funding percentage of the 100 largest corporate DB pension plans from 2015 to 2020. The most recent data show that in February 2020, these plans had $1.6 trillion in assets and $1.9 trillion in projected benefit obligations. The funding percentage (assets as a percentage of benefit obligations) was 82.2%, and total underfunding was $0.3 trillion. The Pension Protection Act of 2006 The Pension Protection Act of 2006 (PPA; P.L. 109-280 ) was the most recent major legislation to affect pension plan funding. Among other provisions, PPA established new funding rules for single- and multiple-employer plans and required that plans become 100% funded over a certain time period. PPA specified interest rates and other actuarial assumptions that plans must use to calculate their funding targets and target normal costs. PPA gave plans three years to transition to the new funding requirements. PPA also created special rules for certain types of plans, including those sponsored by certain government contractors, commercial airlines, and rural cooperatives. Pension Protection Act Interest Rates PPA specified that pension plans discount their future benefit obligations using three different interest rates. The rates, called segment rates, used in the calculation depend on the date on which benefit obligations are expected to be paid and the corresponding rates on the corporate bond yield curve. The segment rates are calculated as the average of the corporate bond yields within the segment for the preceding 24 months. The IRS publishes the segment rates on a monthly basis. The first segment is for benefits payable within five years. The first segment rate is calculated as the average of short-term bond yields (with a maturity less than five years) for the preceding 24 months. Likewise, the second and third segments are for benefits payable after 5 years to 20 years and after 20 years, respectively. The second and third segment rates are calculated similarly to the first segment rates, using bonds of appropriate maturities. Pension Protection Act Amortization Periods PPA required that shortfall amortization charges (funding shortfalls as a result of, for example, investment losses) be amortized over seven years and waiver amortization charges (from missed required minimum contributions) be amortized over five years. Amortization payments include interest. Pension Protection Act Special Rules for Certain Plans PPA outlined special rules for certain pension plans. Some of the rules have expired; others have been extended or expanded by subsequent legislation. Special Rules for Certain Commercial Airline Industry Plans PPA provided special funding rules for certain eligible plans maintained by (1) a commercial passenger airline or (2) an employer whose principal business is providing catering services to a commercial passenger airline. Eligible plans that met certain benefit accrual and benefit increase restrictions could (1) use a 17-year amortization period, instead of the seven years required by PPA, beginning in 2006 or 2007 and (2) use an 8.85% interest rate, instead of the required segment rates, for the purposes of valuing benefit obligations. Eligible plans that did not meet certain benefit accrual and benefit increase restrictions could choose to use a 10-year amortization period for the first taxable year, beginning in 2008. Special Rules for Certain Government Contractor Plans PPA delayed the date for certain government contractor plans to adopt the new funding rules to the 2011 plan year. Eligible plans were defense industry contractors whose primary source of revenue was derived from business performed under government contracts that exceeded $5 billion in the prior fiscal year. Special Rules for Certain Pension Benefit Guaranty Corporation Settlement Plans PPA delayed the date for certain PBGC settlement plans to adopt the new funding rules to the 2014 plan year. Eligible plans were those in existence as of July 26, 2005, and (1) sponsored by an employer in bankruptcy proceedings giving rise to a claim of $150 million or less, and the sponsorship of which was assumed by another employer, or (2) that, by agreement with PBGC, were spun off from plans that were subsequently terminated by PBGC in involuntary terminations. Funding Relief and Other Modifications for Single-Employer Plans Since PPA's enactment in 2006, Congress has modified funding rules for pension plans several times. Funding relief provisions have delayed the implementation dates of some PPA provisions, extended amortization periods, or changed interest rates. Some funding relief has been directed toward all single-employer DB plans; other modifications of funding rules have been targeted to specific types of pension plans, such as plans for certain cooperative and charitable organizations and for community newspapers. An extension of amortization periods allows plans a greater amount of time to pay off unfunded liabilities, meaning that plans can contribute less money per year over a greater number of years. Changes in interest rates modify the timing of required employer contributions. As previously mentioned, a higher interest rate decreases the present value of plan liabilities, which means employers can contribute less today to fund a future benefit. The dollar amount of the benefit that a participant will receive in the future remains unchanged. Relative to a lower interest rate, a higher interest rate allows plans to contribute relatively smaller amounts in the near term but will have to be made up with higher contributions in the longer term. A lower interest rate does the oppositeâit increases the present value of plan liabilities, requiring more employer contributions in the near term (and fewer in the long term). Funding Relief and Other Modifications Since the Pension Protection Act The following sections describe funding relief provisions and other funding rule modifications in chronological order, where feasible, since PPA. Special Rules for Certain Plans in the Commercial Airline Industry The U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 ( P.L. 110-28 ) provided funding relief for plans operated by certain commercial airlines and airline catering companies. As described above, PPA had extended the amortization period to either 10 or 17 years for these plans. P.L. 110-28 specified that eligible plans that had chosen the 10-year amortization period could use an interest rate of 8.25% for purposes of calculating the funding target for each of those 10 years. Delay of Certain Pension Protection Act Rules The Worker, Retiree, and Employer Recovery Act of 2008 (WRERA; P.L. 110-458 ) delayed the implementation of the PPA transition rules, giving plans additional time to become fully funded (given the decline in asset values due to the 2007-2009 economic downturn). Extended Amortization Periods The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 ( P.L. 111-192 ) allowed plans to amortize underfunding resulting from the 2007-2009 market downturn using one of two alternative amortization schedules. Pension plan sponsors could amortize their funding shortfalls over either (1) 9 years, with the first 2 years of payments consisting of interest only on the amortization charge and the next 7 years consisting of interest and principal, or (2) 15 years. Plan sponsors that chose one of these amortization schedules were required to make additional contributions to the plan if the plan sponsors paid excess compensation or declared extraordinary dividends, as defined in P.L. 111-192 . Interest Rate Corridors The Moving Ahead for Progress in the 21 st Century Act (MAP-21; P.L. 112-141 ) established a funding corridor to provide minimum and maximum interest rates used in calculating plan liabilities. The minimum and maximum rates were initially calculated as 90% and 110%, respectively, of the average of corporate bond yields for the segment over the prior 25-year period. If the 24-month segment interest rate as calculated under PPA is below the minimum percentage of the funding corridor, the interest rate is adjusted upward to the minimum. If the 24-month segment interest rate is higher than the maximum, it is adjusted downward to the maximum. MAP-21 adjusted the minimum and maximum percentages surrounding the baseline rate over time to become 70% and 130%, respectively, by 2016 (essentially widening the corridor). When interest rates increase (which occurs when the 24-month rate is adjusted upward to the minimum rate), the present value of future benefit obligations decreases, and required plan contributions decrease. When companies contribute less to their pension plan, lower plan contributions increase companies' taxable income, which results in increased Treasury revenue. Since MAP-21, provisions in enacted legislation twice delayed the beginning of the widening of the funding corridor. First, the Highway and Transportation Funding Act of 2014 (HTF; P.L. 113-159 ) delayed the beginning of widening of the funding corridor until 2018. Later, the Bipartisan Budget Act of 2015 (BBA; P.L. 114-74 ) delayed it until 2021. Table 2 shows the applicable minimum and maximum percentages under MAP-21, HTF, and BBA. Figure 5 shows a hypothetical example of how segment rates are determined using the funding corridors. The red line shows the average of a segment's interest rates for the prior 25 years. The yellow and gold lines indicate the minimum and maximum rates around the 25-year average under the MAP-21 provisions. The light green and dark green lines indicate the widening of the corridors around the 25-year average under the HTF provisions (starting in 2018). The light blue and dark blue lines are the minimum and maximum rates around the 25-year averages in current law, as passed in the BBA (starting in 2021). Because of the HTF and BBA extensions, the minimum and maximum corridors have remained at 90% and 110%, respectively, since 2012. The following example demonstrates how segment rates are adjusted. If Treasury determines that the segment rate is above the maximum segment rateâpoint (1) in Figure 5 âthen Treasury adjusts the segment rate downward until it equals the proposed maximum segment rate. If Treasury determines that the segment rate is at or below the maximum segment rate and at or above the minimum segment rateâpoint (2) in Figure 5 âTreasury does not adjust the segment rates. If Treasury determines that the segment rate is below the minimum segment rateâpoint (3) in Figure 5 âthen Treasury adjusts the interest rate upward until it equals the proposed minimum segment rate. For example, in April 2020, the first segment rate before adjustment was 2.68%. Adjusted for the 25-year average bond yields, the first segment rate was 3.64%. Special Rules for Certain Cooperative and Charity Pension Plans Congress has authorized special funding rules for plans sponsored by specific types of employers, such as rural cooperatives and certain charities. PPA delayed the implementation of funding rules for certain cooperatives. Subsequent legislation expanded this delayed effective date to certain charities. Later legislation modified funding rules for these plans, referred to as Cooperative and Small Employer Charity (CSEC) pension plans. With two exceptions, CSEC plans are multiple-employer pension plans established by eligible cooperatives and certain charitable organizations to provide retirement benefits for their employees. Delay of PPA Funding Rules PPA provided a delayed effective date of January 1, 2017, for certain multiple-employer cooperative plansâsuch as pension plans for agriculture, electric, and telephone cooperativesâto adopt the new funding rules. The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 ( P.L. 111-192 ) extended PPA's delayed effective date to apply to certain charitable organizations' pension plansâmultiple-employer plans whose employers are charitable organizations described in 26 USC Â§501(c)(3). Establishment of CSEC Funding Rules The Cooperative and Small Employer Charity Pension Flexibility Act of 2013 ( P.L. 113-97 ) established funding rules for and provided a definition of CSEC pension plans. Among other provisions, this act permanently exempted these plans from PPA's funding rules and outlined minimum funding standards for CSEC plans. Plans must indicate if they use the CSEC-specific funding rules in their required annual reporting to the Department of Labor (DOL). Table A-1 provides a list of CSEC plans and funded status in the 2017 plan year. Expanded Definition of CSEC Plans in 2015 Section 3 of Division P of the Consolidated and Further Continuing Appropriations Act, 2015 ( P.L. 113-235 ) expanded the definition of CSEC plans to include plans maintained by an employer that meet several criteria. It appears that the Boy Scouts of America Master Pension Trust is the only plan that meets these expanded criteria. Expanded Definition of CSEC Plans in 2020 Section 3609 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136 ) applies CSEC funding rules to plans sponsored by certain charitable employers "whose primary exempt purpose is providing services with respect to mothers and children," among other criteria. It appears that the pension plan sponsored by March of Dimes is the only plan that meets these expanded criteria. Special Rules for Community Newspaper Plans Section 115 of the Setting Every Community up for Retirement Enhancement Act of 2019 (SECURE Act, enacted as Division O of the Further Consolidated Appropriations Act of 2020; P.L. 116-94 ) provided special funding rules for pension plans operated by certain community newspapers that had no benefit increases for participants after December 31, 2017. Community newspaper plans are those maintained by certain private community newspaper organizations that are family-controlled and have been in existence for 30 or more years. For these plans, the SECURE Act increased the interest rate to 8%, and extended the amortization period from 7 to 30 years. Delayed Due Date for 2020 Plan Contributions Section 3608 of the CARES Act ( P.L. 116-136 ) allows contributions that are due in calendar year 2020 to be made, with interest, on January 1, 2021. Section 3608 also allows plans to use the funding percentage for the 2019 plan year, rather than the 2020 plan year (which would likely be lower), in determining whether plans must impose benefit restrictions. Policy Considerations Policymakers and stakeholders might consider some of the policy implications of single-employer DB pension plan funding relief. The considerations include the rationale for providing relief, the effects of lower levels of plan assets on participant benefits and PBGC, and the effect on the federal budget. Funding relief results in lower employer contributions to DB plans in the near term. Among the rationales for funding relief is that it allows employers the flexibility to use funds for other priorities (such as retaining or hiring employees). For example, 74 trade associations said in a 2009 letter to policymakers that, "[P]roviding defined benefit funding relief is directly related to improving the economy and employment." On the other hand, some policymakers oppose funding relief to specific industries or companies because they provide "a special-interest bailout" and set both "bad policy and bad precedent." Some stakeholders have expressed concern that employers adopting funding relief measures might use the funds saved via reduced contributions for non-core business activities. For example, the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 ( P.L. 111-192 ) limited the ability of employers that adopted funding relief measures to provide excess employee compensation or extraordinary dividends. Although employer contributions and plan assets are lower following funding relief, participants' benefits are not necessarily at riskâalthough they may be under certain circumstances. Participants in DB plans that receive funding relief remain entitled to their benefits; funding relief does not reduce these benefits. For employers that do not become bankrupt, modifying the timing of contributions generally would not be problematicâover time, the employer would need to make all required contributions for participants to receive their full benefits. However, in the case of employer bankruptcy, the timing of contributions may negatively affect both participants' benefits and PBGC. Participants with benefits greater than the PBGC maximum guarantee or with non-guaranteed benefits might see reduced benefits when PBGC becomes trustee of their plan. Following funding relief, there are fewer plan assets available from which to pay non-guaranteed benefits because funding relief lowers employer contributions to DB plans in the short term. In addition, PBGC receives fewer assets from the plans that it trustees, which harms its financial position. ERISA requires PBGC to be self-supporting and receives no appropriations from general revenue. ERISA states that the "United States is not liable for any obligation or liability incurred by the corporation." Increasingly large amounts of unfunded liabilities in terminated plans may burden PBGC's single-employer insurance program. Although PBGC ended FY2019 with a surplus of $8.6 billion, the effects of (1) the Coronavirus Disease 2019 (COVID-19) pandemic on the financial health of employers and (2) the market downturn in early 2020 on the value of DB plan assets will likely worsen the funding position of single-employer pension plans and PBGC's financial position. Funding relief can result in short-term revenue for Treasury and PBGC. Because employer contributions to pension plans are generally tax deductible, decreasing a plan's required contributions for a year (either through increasing the interest rate or extending the amortization period) increases the plan's taxable income. Some stakeholders point out that because funding relief provides revenue to Treasury, it has been used for budgetary offsets without regard to the policy justifications. Funding relief can positively affect PBGC finances because greater DB plan underfunding results in higher variable-rate premiums (premiums based on the amount of plan underfunding) paid by employers to PBGC. Appendix. Data on CSEC Plans in 2017 Table A-1 provides data on Cooperative and Small Employer Charity (CSEC) plans in the 2017 plan year (the most recent year for which complete data are available). In total, CSEC plans had about 239,000 participants, $19.6 billion in assets, and a total funding target of $20.7 billion in 2017. The largest plan by number of participants in 2017 was the Retirement Security Plan, which had assets of $8.6 billion and a total funding target of $9.2 billion in that year. To determine which plans use CSEC funding rules, the Congressional Research Service (CRS) analyzed public-use Form 5500 data from the Department of Labor (DOL) for the 2014 to 2017 plan years. 2014 is the first year that Form 5500 includes an option to indicate the use of CSEC funding rules (following P.L. 113-97 ), and 2017 is the most recent year for which complete data are available. Most private-sector pension plans are required to submit annual forms to the Internal Revenue Service (IRS), DOL, and the Pension Benefit Guaranty Corporation (PBGC). These forms generally include information about the plan, such as the number of participants, financial information, and the companies that provide services to the plan. In addition to Form 5500, pension plans are generally required to file information in specific schedules. For example, most single-employer and multiple-employer plans are required to file Schedule SB, which contains information specific to these plans. Each pension plan's Form 5500 and required schedules are available by search on DOL's website. Because data are self-reported, Table A-1 may not capture all plans that used CSEC funding rules or may include non-CSEC plans that erroneously identified as CSEC plans. Table A-1 provides data on private-sector defined benefit (DB) pension plans that indicated using CSEC funding rules on their 2014, 2015, 2016, or 2017 Schedule SB filings. Twenty-eight plans indicated using CSEC funding rules in multiple years. One plan, the Johns Hopkins Health System Corporation Plan, appeared to start using CSEC funding rules in 2017. Table A-1 provides the total number of participants, actuarial value of assets, total funding target, and funding target attainment percentage for the 29 plans (including the Johns Hopkins plan). In addition to the Johns Hopkins plan, 10 plans indicated using CSEC funding rules in a single year but not in other years. An examination of individual plan filings from the Employee Benefits Security Administration (EBSA) showed that these plans did not use CSEC funding rules in the year they indicated having done so and are not included in this analysis. The Employee Benefit Plan of Jewish Community of Louisville, Inc., indicated using CSEC funding rules in 2014, 2015, and 2016, but a Form 5500 for the 2017 plan year is not available and is not included in Table A-1 . In 2016, this plan had 110 participants.	Summary:	gov_report	1,024	null	34
crs_R45985	crs_R45985_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Fully autonomous vehicles, which would carry out many or all of their functions without the intervention of a driver, may someday bring sweeping social and economic changes and "lead to breakthrough gains in transportation safety." Motor vehicle crashes caused an estimated 36,560 fatalities in 2018; a study by the National Highway Traffic Safety Administration (NHTSA) has shown that 94% of crashes are due to human errors. Legislation that would encourage development and testing of autonomous vehicles has faced controversy in Congress. In the 115 th Congress, the House of Representatives passed an autonomous vehicle bill, H.R. 3388 , by voice vote in September 2017. The Senate Committee on Commerce, Science, and Transportation reported a different bill, S. 1885 , in November 2017, but after some Senators raised concerns about the preemption of state laws and the possibility of large numbers of vehicles being exempted from some Federal Motor Vehicle Safety Standards, the Senate bill did not reach the floor. No further action was taken on either bill before the 115 th Congress adjourned. Although some Members of Congress remain interested in autonomous vehicles, no legislative proposals have become law. Several fatal accidents involving autonomous vehicles raised new questions about how federal and state governments should regulate vehicle testing and the introduction of new technologies into vehicles offered for sale. A pedestrian was killed in Arizona by an autonomous vehicle operated by Uber on March 18, 2018, and three Tesla drivers died when they failed to respond to hazards not recognized by the vehicles. These accidents suggest that the challenge of producing fully autonomous vehicles that can operate safely on public roads may be greater than developers had envisioned, a new outlook voiced by several executives, including the Ford Motor Co. CEO. However, with the authorization of federal highway and public transportation programs set to expire at the end of FY2020, a surface transportation reauthorization bill could become a focus of efforts to also enact autonomous vehicle legislation. Advances in Vehicle Technology While fully autonomous vehicles may lie well in the future, a range of new technologies is already improving vehicle performance and safety while bringing automation to vehicular functions once performed only by the driver. The technologies involved are very different from the predominantly mechanical, driver-controlled technology of the 1960s, when the first federal vehicle safety laws were enacted. These new features automate lighting and braking, connect the car and driver to the Global Positioning System (GPS) and smartphones, and keep the vehicle in the correct lane. Three forces are driving these innovations: technological advances enabled by new materials and more powerful, compact electronics; consumer demand for telecommunications connectivity and new types of vehicle ownership and ridesharing; and regulatory mandates pertaining to emissions, fuel efficiency, and safety. Manufacturers are combining these innovations to produce vehicles with higher levels of automation. Vehicles do not fall neatly into the categories of "automated" or "nonautomated," because all new motor vehicles have some element of automation. The Society of Automotive Engineers International (SAE), an international standards-setting organization, has developed six categories of vehicle automationâranging from a human driver doing everything to fully autonomous systems performing all the tasks once performed by a driver. This classification system ( Table 1 ) has been adopted by the U.S. Department of Transportation (DOT) to foster standardized nomenclature to aid clarity and consistency in discussions about vehicle automation and safety. Vehicles sold today are in levels 1 and 2 of SAE's automation rating system. Although some experts forecast market-ready autonomous vehicles at level 3 will be available in a few years, deployment of fully autonomous vehicles in all parts of the country at level 5 appears to be more distant, except perhaps within closed systems that allow fully autonomous vehicles to operate without encountering other types of vehicles. Testing and development of autonomous vehicles continue in many states and cities. Technologies that could guide an autonomous vehicle ( Figure 1 ) include a wide variety of electronic sensors that would determine the distance between the vehicle and obstacles; park the vehicle; use GPS, inertial navigation, and a system of built-in maps to guide the vehicle's direction and location; and employ cameras that provide 360-degree views around the vehicle. To successfully navigate roadways, an autonomous vehicle's computers, sensors and cameras will need to accomplish four tasks that a human driver undertakes automatically: detect objects in the vehicle's path; classify those objects as to their likely makeup (e.g., plastic bag in the wind, a pedestrian or a moving bicycle); predict the likely path of the object; and plan an appropriate response. Most autonomous vehicles use dedicated short-range communication (DSRC) to monitor road conditions, congestion, crashes, and possible rerouting. As 5G wireless communications infrastructure is installed more widely, DSRC may evolve and become integrated with it, enabling vehicles to offer greater interoperability, bandwidth, and cybersecurity. Some versions of these autonomous vehicle technologies, such as GPS and rear-facing cameras, are being offered on vehicles currently on the market, while manufacturers are studying how to add others to safely transport passengers without drivers. Manufacturers of conventional vehicles, such as General Motors and Honda, are competing in this space with autonomous vehicle "developers" such as Alphabet's Waymo. In addition, automakers are aligning themselves with new partners that have experience with ride-sharing and artificial intelligence: Ford and Volkswagen have announced that they expect to use autonomous vehicle technology in a new ride-sharing service in Pittsburgh, PA, as early as 2021; GM acquired Cruise Automation, a company that is developing self-driving technology for Level 4 and 5 vehicles. GM has also invested $500 million in the Lyft ride-sharing service; Honda, after breaking off talks about partnering with Waymo, purchased a stake in GM's Cruise Automation; Volvo and Daimler have announced partnerships with ride-sharing service Uber; and BMW partnered with the Mobileye division of Intel, a semiconductor manufacturer, to design autonomous vehicle software. Cybersecurity and Data Privacy As vehicle technologies advance, the security of data collected by vehicle computers and the protection of on-board systems against intrusion are becoming more prominent concerns. Many of the sensors and automated components providing functions now handled by the driver will generate large amounts of data about the vehicle, its location at precise moments in time, driver behavior, and vehicle performance. The systems that allow vehicles to communicate with each other, with roadside infrastructure, and with manufacturers seeking to update software will also offer portals for possible unauthorized access to vehicle systems and the data generated by them. Protecting autonomous vehicles from hackers is of paramount concern to federal and state governments, manufacturers, and service providers. A well-publicized hacking of a conventional vehicle by professionals demonstrated to the public that such disruptions can occur. Hackers could use more than a dozen portals to enter even a conventional vehicle's electronic systems ( Figure 2 ), including seemingly innocuous entry points such as the airbag, the lighting system, and the tire pressure monitoring system (TPMS). Requirements that increasingly automated vehicles accept remote software updates, so that owners do not need to take action each time software is revised, are in part a response to concerns that security weaknesses be rectified as quickly as possible. To address these concerns, motor vehicle manufacturers established the Automotive Information Sharing and Analysis Center (Auto-ISAC), which released a set of cybersecurity principles in 2016. DOT's autonomous vehicle policies designate Auto-ISAC as a central clearinghouse for manufacturers to share reports of cybersecurity incidents, threats, and violations with others in the vehicle industry. Aside from hackers, many legitimate entities would like to access vehicle data, including vehicle and component manufacturers, the suppliers providing the technology and sensors, the vehicle owner and occupants, urban planners, insurance companies, law enforcement, and first responders (in case of an accident). Issues pertaining to vehicle data collection include vehicle testing crash data (how is it stored and who gets to access it); data ownership (who owns most of the data collected by vehicle software and computers); and consumer privacy (transparency for consumers and owner access to data). At present, no laws preclude manufacturers and software providers from reselling data about individual vehicles and drivers to third parties. Pathways to Autonomous Vehicle Deployment Abroad Autonomous vehicles are being developed and tested in many countries, including those that produce most of the world's motor vehicles. Several analyses have evaluated the factors that are contributing to the advancement of autonomous vehicles in various countries: Innovation . Benchmarks in this area include the number and engagement of domestic automakers and technology developers working on automation, the partnerships they forge with academic and related businesses, the prevalence of ride-sharing services, and autonomous vehicle patents issued. V ehicle infrastructure . Autonomous vehicles will need new types of infrastructure support and maintenance, including advanced telecommunications links and near-perfect pavement and signage markings. Planning and implementing these highway improvements may enable autonomous vehicles to be fully functional sooner. In addition, many test vehicles are currently powered by electricity, so the availability of refueling stations could be a factor in their acceptance. Wo rkforce training. The increased reliance on autonomous vehicle technologies may require different workforce skills. Many traditional mechanical parts may disappear, especially if autonomous vehicles operate entirely on battery power, while the arrangement and function of dashboards and seating may be reinvented. Components suppliers that are already addressing this new product demand and reorienting their workforces will assist in the transition to autonomous vehicles. G overnment laws and regulations that encourage development and testing . Fully autonomous vehicles may not have standard features of today's cars, such as steering wheels and brake pedals, as there will not be a driver. By law or regulation, motor vehicles built today are required to have many of these features. Some governments are taking a lead by modifying vehicle requirements for purposes of pilot programs and tests. Permanent changes in standards will most likely be necessary if autonomous vehicle technologies are to be commercialized. L evel of consumer acceptance . Markets are more likely to embrace autonomous vehicles if many residents in cities see autonomous vehicles on the road, a high level of technology is in use (including internet access and mobile broadband), and ride-hailing services are more widely used. Several surveys have been conducted analyzing many of these factors. For example, a 2018 Harvard University report highlights plans in China, South Korea, Japan, and the United States to "seize the benefits" of autonomous vehicles. In a report on innovation policies in four Asian countries (China, Japan, South Korea, and Singapore), the United Nations Economic and Social Commission for Asia and the Pacific ranked Singapore first in autonomous vehicle readiness because of its policies and new laws governing their deployment and its high consumer acceptance. The report also notes that South Korea's K-City facility is "intended to be the world's largest testbed for self-driving cars." A more detailed comparison of factors affecting autonomous vehicle development and deployment has been conducted by KPMG International, which has developed an index to measure how 25 countries are guiding autonomous vehicles ( Table 2 ). The Netherlands ranked first overall in the KPMG report, where it was cited as "an example of how to ready a country for AVs by performing strongly in many areas , " as well as first in infrastructure. Singapore came in first on policy and legislation because it has a single government entity overseeing autonomous vehicle regulations, it is funding autonomous vehicle pilots, and it has enacted a national standard to promote safe deployment. Contributing to its rank was a World Economic Forum (WEF) report that ranked it first among 139 countries in having an effective national legislature and efficient resolution of legal disputes. Singapore also scored first place on the consumer acceptance metric, primarily because its extensive autonomous testing is being conducted throughout the island nation, thereby familiarizing residents with autonomous passenger vehicles and buses. Two other major auto-producing countriesâGermany and Japanâfall just below the United States on technology and innovation, according to KPMG, while Japan ranks higher on autonomous vehicle infrastructure ( Table 3 ). Issues in Federal Safety Regulation Vehicles operating on public roads are subject to dual regulation by the federal government and the states in which they are registered and driven. Traditionally, NHTSA, within DOT, has regulated auto safety, while states have licensed automobile drivers, established traffic regulations, and regulated automobile insurance. Proponents of autonomous vehicles note that lengthy revisions to current vehicle safety regulations could impede innovation, as the rules could be obsolete by the time they take effect. In 2016, the Obama Administration issued the first report on federal regulations affecting autonomous vehicles. Since then, DOT has issued two follow-up reports and has said it anticipates issuing annual updates to its regulatory guidance. In addition, the Federal Communications Commission (FCC) is reconsidering the allocation of electromagnetic spectrum currently reserved for motor vehicle communications, and its decisions may affect how autonomous vehicles evolve. Obama Administration Policy Direction DOT's 2016 report proposed federal and state regulatory policies in these areas: A set of guidelines outlining best practices for autonomous vehicle design, testing, and deployment. DOT identified 15 practices and procedures that it expected manufacturers, suppliers, and service providers (such as ridesharing companies) to follow in testing autonomous vehicles, including data recording, privacy, crashworthiness, and object and event detection and response. These reports, called Safety Assessment Letters, would be voluntary, but the report noted that "they may be made mandatory through a future rulemaking." A m odel s tate p olicy that identifies where new autonomous vehicle-related issues fit in the current federal and state regulatory structures. The model state policy, developed by NHTSA in concert with the American Association of Motor Vehicle Administrators and private-sector organizations, suggests state roles and procedures, including administrative issues (designating a lead state agency for autonomous vehicle testing), an application process for manufacturers that want to test vehicles on state roads, coordination with local law enforcement agencies, changes to vehicle registration and titling, and regulation of motor vehicle liability and insurance. A streamlined review process to issue DOT regulatory interpretations on autonomous vehicle questions within 60 days and on regulatory exemptions within six months. Identification of new tools and regulatory structures for NHTSA that could build its expertise in new vehicle technologies, expand its ability to regulate autonomous vehicle safety, and increase speed of its rulemakings. Two new tools could be expansion of existing exemption authority and premarket testing to assure that autonomous vehicles will be safe. Some of the new regulatory options cited would require new statutory authority, while others could be instituted administratively. The report noted that "DOT does not intend to advocate or oppose any of the tools.â¦ [I]t intends â¦ to solicit input and analysis regarding those potential options from interested parties." Trump Administration Policy Guidelines and Proposed SafetyÂ Rules The two follow-up reports issued by the Trump Administration describe a more limited federal regulatory role in overseeing autonomous passenger vehicle deployment, while also broadening the scope of DOT oversight by addressing the impact of autonomous technology on commercial trucks, public transit, rail, and ports and ships. The policies described in these reports replace those recommended by the Obama Administration in several ways, including the following: Encouraging integration of automation across all transportation modes , instead of just passenger vehicles. The October 2018 report Automated Vehicles 3.0 outlines how each of DOT's agencies will address autonomous vehicle safety within its purview. Establishing six automation principles that will be applied to DOT's role in overseeing passenger cars, trucks, commercial buses, and other types of vehicles. These include giving priority to safety; remaining technology-neutral; modernizing regulations; encouraging a consistent federal and state regulatory environment; providing guidance, research, and best practices to government and industry partners; and protecting consumers' ability to choose conventional as well as autonomous vehicles. Reiterating the traditional roles of federal and state governments in regulating motor vehicles and motorists, respectively. The reports cite best practices that states should consider implementing, such as minimum requirements for autonomous vehicle test drivers, and discuss how DOT can provide states with technical assistance. Recommending voluntary action in lieu of regulation. This could include suggesting that manufacturers and developers of autonomous driving systems issue and make public voluntary safety self-assessments to demonstrate transparency and increase understanding of the new technologies and industry development of "voluntary technical standards" to "advance the integration of automation technologies into the transportation system." The NHTSA Voluntary Safety Self-Assessment web page lists 17 companies that have filed self-assessment reports, including three major automakers. To provide a perspective, 64 companies have been issued autonomous vehicle testing permits by the State of California alone. Accelerating NHTSA decisions on requests for exemptions from federal safety standards for autonomous vehicle testing. Promoting development of voluntary technical standards by other organizations, such as the Society of Automotive Engineers, the government's National Institute of Standards and Technology, and the International Organization for Standardization. DOT has indicated that it wants to revise regulations pertinent to autonomous vehicles, such as redefining the terms "driver" and "operator" to indicate that a human being does not always have to be in control of a motor vehicle. It also said it plans to require changes in standards for the inspection, repair, and maintenance of federally regulated commercial trucks and buses. Along these lines, NHTSA issued a Notice of Proposed Rulemaking in May 2019, requesting comments on testing and verifying how autonomous vehicle technologies may comply with existing federal safety standards. National Transportation Safety Board Investigation and Recommendations On November 19, 2019, the National Transportation Safety Board (NTSB) issued its report on the probable cause of a 2018 fatality involving an autonomous vehicle in Tempe, AZ. In that accident, a pedestrian was fatally injured by a test vehicle operated by Uber Technologies with an operator in the driver's seat. The NTSB investigation determined that the probable cause of the crash "was the failure of the vehicle operator to monitor the driving environment and the operation of the ADS [automated driving system] because she was visually distracted throughout the trip by her personal cell phone." Though the vehicle detected the pedestrian 5.6 seconds before the crash, the NTSB reported that "it never accurately classified her as a pedestrian or predicted her path." Beyond the immediate cause of this accident, NTSB reported that an "inadequate safety culture" at Uber and deficiencies in state and federal regulation contributed to the circumstances that led to the fatal crash. Among the findings were the following: Uber's internal safety risk-assessment procedures and oversight of the operator were inadequate, and its disabling of the vehicle's forward collision warning and automatic emergency braking systems increased risks. The Arizona Department of Transportation provided insufficient oversight of autonomous vehicle testing in the state. NHTSA provides insufficient guidance to developers and manufacturers on how they should achieve safety goals, has not established a process for evaluating developers' safety self-assessment reports, and does not require such reports to be submitted, leaving their filing as voluntary. NTSB recommended that Uber, the Arizona Department of Transportation, and NHTSA take specific steps to address the issues it identified. It also recommended that the American Association of Motor Vehicle Administrators inform all states about the circumstances of the Tempe crash, encouraging them to require and evaluate applications by developers before granting testing permits. Connected Vehicles and Spectrum Allocation Federal regulation of the spectrum used in vehicle communications may affect how automation proceeds. Autonomous vehicles, whose artificial intelligence and technology are generally self-contained in each vehicle, are part of a larger category of connected vehicles and infrastructure. Federal, state, and industry research and testing of vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communications has been under way since the 1990s. Together, these two sets of technologies, known as V2X, are expected to reduce the number of accidents by improving detection of oncoming vehicles, providing warnings to drivers, and establishing communications infrastructure along roadways that would prevent many vehicles from leaving the road and striking pedestrians. These technologies fall within the broad category of intelligent transportation systems, which have received strong support from Congress due to their potential to improve traffic flow and safety. For vehicles to communicate wirelessly, they use radio frequencies, or spectrum, which are regulated by the Federal Communications Commission (FCC). In 1999, the FCC allocated the 5.9 gigahertz (GHz) band solely for motor vehicle safety purposes for vehicles using DSRC. Over the past two decades, industry and government agencies have collaborated to develop, test, and deploy DSRC technologies. States have invested in DSRC-based improvements, and this technology is operating in dozens of states and cities. As industry has continued to explore vehicle automation, an alternative, cellular-based technology has recently emerged, known as C-V2X. In December 2019, the FCC proposed rules that would reallocate the lower 45 MHz of the 5.9 GHz band for unlicensed use (e.g., Wi-Fi), and allocate the remaining 30 MHz for transportation and vehicle-related use. Of the 30 MHz, the FCC proposed to grant C-V2X exclusive use of 20 MHz of the segment. It is seeking comment on whether the remaining 10 MHz should remain dedicated to DSRC or be dedicated to C-V2X. The FCC commissioners noted that DSRC has evolved slowly and has not been widely deployed, and the rules are intended to ensure the spectrum supports its highest and best use. This decision has competitive implications for the automotive, electronics, and telecommunications industries, and may affect the availability of safety technologies and the path toward vehicle automation. DOT has called for retaining the entire 5.9 GHz band for exclusive transportation use. Figure 3 shows that these two technologies facilitate somewhat different types of vehicle and infrastructure communications. In light of their different characteristics, the European Commission has approved DSRC use for direct V2V and V2I communications, while endorsing cellular-based technology for vehicle access to the cloud and remote infrastructure. Industry groups in the United States took varying positions in the FCC proceedings. DSRC advocates argued that this technology has been proven by years of testing and is already deployed in many areas. They generally supported retaining the 5.9 GHz band for exclusive use for DSRC. C-V2X supporters contended that its cellular-based solution is aligned with international telecommunications standards for 5G technologies and should be allowed to use the 5.9 GHz band alongside DSRC. A group of technology companies, including device makers, argued that additional spectrum is needed to accommodate the increasing number of interconnected devices, and that the 5.9GHz band can safely be shared among transportation and non-transportation uses. Congressional Action During the 115 th Congress, committees in the House of Representatives and the Senate held numerous hearings in 2017 on the technology of autonomous vehicles and possible federal issues that could result from their deployment. Initially, bipartisan consensus existed on major issues: H.R. 3388 , the SELF DRIVE Act, was reported unanimously by the House Committee on Energy and Commerce, and on September 6, 2017, the House of Representatives passed it without amendment by voice vote. A similar bipartisan initiative began in the Senate. Prior to markup in the Committee on Commerce, Science, and Transportation, the then-chairman and ranking member issued a set of principles they viewed as central to new legislation: prioritize safety , acknowledging that federal standards will eventually be as important for self-driving vehicles as they are for conventional vehicles; promote innovation and address the incompatibility of old regulations written before the advent of self-driving vehicles; remain technology - neutral , not favoring one business model over another; reinforce separate but complementary federal and state regulatory roles ; strengthen cybersecurity so that manufacturers address potential vulnerabilities before occupant safety is compromised; and educate the public through government and industry efforts so that the differences between conventional and self-driving vehicles are understood. Legislation slightly different from the House-passed bill emerged: S. 1885 , the AV START Act, was reported by the Committee on Commerce, Science, and Transportation on November 28, 2017. It was not scheduled for a floor vote prior to adjournment in December 2018 because of unresolved concerns raised by several Senators. To address some of those concerns, a committee staff draft bill that would have revised S. 1885 was circulated in December 2018 that could form the basis of future legislation. The House and Senate bills addressed concerns about state action replacing some federal regulation, while also empowering NHTSA to take unique regulatory actions to ensure safety and encouraging innovation in autonomous vehicles. The bills retained the current arrangement of states controlling most driver-related functions and the federal government being responsible for vehicle safety. The House and Senate bills included the following major provisions. Where the December 2018 Commerce Committee staff draft proposed significant changes, they are noted in this analysis. P reemption of state laws . H.R. 3388 would have barred states from regulating the design, construction, or performance of highly autonomous vehicles, automated driving systems, or their components unless those laws are identical to federal law. The House-passed bill reiterated that vehicle registration, driver licensing, driving education, insurance, law enforcement, and crash investigations should remain under state jurisdiction as long as state laws and regulations do not restrict autonomous-vehicle development. H.R. 3388 provided that nothing in the preemption section should prohibit states from enforcing their laws and regulations on the sale and repair of motor vehicles. S. 1885 would also have preempted states from adopting laws, regulations, and standards that would regulate many aspects of autonomous vehicles, but would have omitted some of the specific powers reserved to the states under the House-passed bill. States would not have been required to issue drivers licenses for autonomous-vehicle operations, but states that chose to issue such licenses would not have been allowed to discriminate based on a disability. The bill provided that preemption would end when NHTSA establishes standards covering these vehicles. The Senate staff draft sought to clarify that state and local governments would not lose their traditional authority over traffic laws. It also would have added provisions that state common law and statutory liability would be unaffected by preemption, and would have limited use of arbitration in death or bodily injury cases until new federal safety standards are in effect. Exemption authority . Both the House and Senate bills would have expanded DOT's ability to issue exemptions from existing safety standards to encourage autonomous-vehicle testing on public roads. To qualify for an autonomous-vehicle exemption, a manufacturer would have had to show that the safety level of the vehicle equaled or exceeded the safety level of each standard for which an exemption was sought. Current law limits exemptions to 2,500 vehicles per manufacturer per year. The House-passed bill would have phased in increases over four years of up to 100,000 vehicles per manufacturer per year; the Senate bill would have permitted up to 80,000 in a similar phase-in. H.R. 3388 provided constraints on the issuance of exemptions from crashworthiness and occupant protection standards; S. 1885 did not address those two issues. DOT would have been directed to establish a publicly available and searchable database of motor vehicles that have been granted an exemption. Crashes of exempted vehicles would have had to be reported to DOT. The Senate bill would not have required the establishment of a database of exempted vehicles, and reporting of exempt vehicle crashes would not have been required. The Senate staff draft added a provision to ensure that vehicles exempted from federal standards would have been required to nonetheless maintain the same level of overall safety, occupant protection, and crash avoidance as a traditional vehicle. A DOT review of vehicle exemptions would have been required annually. The draft capped exemptions at no more than five years. New NHTSA safety rules. The House bill would have required NHTSA to issue a new regulation requiring developers and manufacturers to submit a "safety assessment certification" explaining how safety is being addressed in their autonomous vehicles. The Senate bill included a similar provision requiring a "safety evaluation report," and would have delineated nine areas for inclusion in the reports, including system safety, data recording, cybersecurity risks, and methods of informing the operator about whether the vehicle technology is functioning properly. While manufacturers and developers would be required to submit reports, the legislation did not mandate that NHTSA establish an assessment protocol to ensure that minimum risk conditions are met. The Senate staff draft would have clarified the process by which federal motor vehicle safety standards would be updated to accommodate new vehicle technologies, providing additional time for new rulemaking. Within six months of enactment, DOT would have been required to develop and publicize a plan for its rulemaking priorities for the safe deployment of autonomous vehicles. To address concerns that autonomous vehicles might not recognize certain potential hazardsâincluding the presence of bicyclists, pedestrians, and animalsâand hence possibly introduce new vulnerabilities to motor vehicle travel, the Senate staff draft would have clarified that manufacturers must describe how they are addressing the ability of their autonomous vehicles to detect, classify, and respond to these and other road users. Manufacturers and developers would include this analysis in their safety evaluation reports. Cybersecurity. The House-passed bill provided that no highly autonomous vehicle or vehicle with "partial driving automation" could be sold domestically unless a cybersecurity plan had been developed by the automaker. Such plans would have to have been developed within six months of enactment and would include a written policy on mitigation of cyberattacks, unauthorized intrusions, and malicious vehicle control commands; a point of contact at the automaker with cybersecurity responsibilities; a process for limiting access to autonomous driving systems; and the manufacturer's plans for employee training and for maintenance of the policies. The Senate bill would have required written cybersecurity plans to be issued, including a process for identifying and protecting vehicle control systems, detection, and response to cybersecurity incidents, and methods for exchanging cybersecurity information. A cybersecurity point of contact at the manufacturer or vehicle developer would have had to be named. Unlike the House-passed bill, S. 1885 would have directed DOT to create incentives so that vehicle developers would share information about vulnerabilities, and would have specified that all federal research on cybersecurity risks should be coordinated with DOT. In addition, S. 1885 would have established a Highly Automated Vehicle Data Access Advisory Committee to provide Congress with recommendations on cybersecurity issues. Federal agencies would have been prohibited from issuing regulations pertaining to the access or ownership of data stored in autonomous vehicles until the advisory committee's report was submitted. The staff draft would have added several cybersecurity provisions, including an additional study by the National Institute of Standards and Technology that would recommend ways vehicles can be protected from cybersecurity incidents. Privacy. Before selling autonomous vehicles, manufacturers would have been required by the House-passed bill to develop written privacy plans concerning the collection and storage of data generated by the vehicles, as well as a method of conveying that information to vehicle owners and occupants. However, a manufacturer would have been allowed to exclude processes from its privacy policy that encrypt or make anonymous the sources of data. The Federal Trade Commission would have been tasked with developing a report for Congress on a number of vehicle privacy issues. Although S. 1885 would not have explicitly required privacy plans by developers and manufacturers, it would have required NHTSA to establish an online, searchable motor vehicle privacy database that would include a description of the types of information, including personally identifiable information (PII), that are collected about individuals during operation of a motor vehicle. This database would have covered all types of vehiclesânot just autonomous vehiclesâand would have included the privacy policies of manufacturers. The database would also have included an explanation about how PII would be collected, retained, and destroyed when no longer relevant. The Senate staff draft would have added new passenger motor vehicle privacy protections. Research and advisory panels. Both bills would have established several new advisory bodies to conduct further research on autonomous vehicles and advise DOT on possible new vehicle standards. H.R. 3388 would have established a NHTSA advisory group with a broad cross-section of members to advise on mobility access for senior citizens and the disabled; cybersecurity; labor, employment, environmental, and privacy issues; and testing and information sharing among manufacturers. S. 1885 would have established other panels, including a Highly Automated Vehicles Technical Committee to advise DOT on rulemaking policy and vehicle safety; a working group comprising industry and consumer groups to identify marketing strategies and educational outreach to consumers; and a committee of transportation and environmental experts to evaluate the impact of autonomous vehicles on transportation infrastructure, mobility, the environment, and fuel consumption. Separately, DOT would have been required to study ways in which autonomous vehicles and parts could be produced domestically, with recommendations on how to incentivize U.S. manufacturing. The Senate staff draft would have consolidated some of the advisory committees in S. 1885 into a Highly Automated Vehicle Advisory Council with diverse stakeholder representation, and mandated to report on mobility for the disabled, senior citizens and populations underserved by public transportation; cybersecurity; employment and environmental issues; and privacy and data sharing. No similar comprehensive autonomous vehicle legislation has been introduced in the 116 th Congress, although discussions on a bicameral bill have been ongoing. In addition, the Senate Committee on Environment and Public Works has reported America's Transportation Infrastructure Act of 2019, S. 2302 , which includes several provisions in Subtitle D addressing the possible impact of autonomous vehicles on highway infrastructure. It would establish a grant program to modernize the U.S. charging and fueling infrastructure so that it would be responsive to technology advancements, including autonomous vehicles. The legislation would also require research on ways in which roadway infrastructure should be improved for autonomous vehicles. State Concerns State and local rules and regulations may affect how autonomous vehicles are tested and deployed. The National Governors Association (NGA) has noted that state governments have a role with respect to vehicle and pedestrian safety, privacy, cybersecurity, and linkage with advanced communications networks. While supporting technology innovations in transportation, a recent NGA report notes that "the existing regulatory structure and related incentives have not kept pace with the new technology" and that "recent accidents have raised concerns about the safety of drivers, pedestrians and other road users in the period during which autonomous and non-autonomous vehicles share the road." NGA has joined with other state and local government organizations to call for modifications in forthcoming autonomous vehicle legislation, including clarity that states and local governments not only can enforce existing laws governing operation of motor vehicles on public roads, but also originate new statutes and regulations; requiring submission of more detailed automaker and developer reports to DOT on the safety of their technologies, so that states and cities can be assured that autonomous vehicle testing is being conducted in a safe manner; differentiation between limited vehicle testing and the commercial deployment of large numbers of autonomous vehicles through an expanded exemptions process; and expansion of plans for consumer education about "safe use and interaction" with respect to autonomous vehicles. According to the National Conference of State Legislatures (NCSL), at least 41 states and the District of Columbia considered legislation related to autonomous vehicles between 2013 and October 2019; in that time, 29 states and the District of Columbia enacted legislation, governors in 11 states issued executive orders, and 5 states issued both an executive order and enacted legislation. ( Figure 4 ). Of the states that have enacted laws in 2017, 2018, and 2019 pertaining to autonomous vehicles, NCSL reports that the largest number of states have passed laws that clarify certain types of commercial activity, such as how closely autonomous vehicles can follow each other when they are coordinated, as in truck platooning. According to NCSL, no recent state laws have been enacted dealing with cybersecurity or vehicle inspection reports. NCSL has organized and categorized the types of state legislation ( Table 4 ). For a more thorough description of the legislation passed in 2017, 2018, and 2019, the NCSL Table of Enacted State Legislation provides more detail. Implications for Highway Infrastructure Deployment of fully autonomous vehicles will require not only a suite of new technologies, but also changes to the highway infrastructure on which those vehicles will operate. Autonomous vehicles being tested today rely on clear pavement markings and legible signage to stay in their lanes and navigate through traffic. Major highways as well as side roads in urban and rural settings will need to accommodate autonomous vehicles in addition to a large fleet of conventional vehicles with human drivers. In this transition period to more autonomous vehiclesâwhich many anticipate will last several decades âthe Federal Highway Administration (FHWA) is expected to play a significant role through its administration of the Manual on Uniform Traffic Control Devices (MUTCD), which sets standards for all traffic control devices, including signs, intersection signals, and road markings. For example, overhead signage on Interstate Highways contains white lettering on a green background in all 50 statesâeasily recognizable to any U.S. driverâdue to MUTCD standards. FHWA is in the process of updating the 2009 MUTCD to address issues specific to autonomous vehicle technologies. However, state compliance with MUTCD is voluntary, and not all states uniformly apply all standards. Audi reportedly announced in 2018 that it would not make its new Level 3 autonomous vehicle technology, called Traffic Jam Pilot, available in the United States because of "laws that change from one state to the next, insurance requirements, and things like lane lines and road signs that look different in different regions." Other automakers have made similar complaints about U.S. roads. In the near term, improvement and better maintenance of pavement markings, signage and intersection design may be the most helpful steps that federal and state transportation officials can take. Despite national standards based on MUTCD, not all states maintain their highway markings at a level that would be useful to guide autonomous vehicles. Inadequate road maintenance may affect the pace of autonomous vehicle deployment. Some 21% of major U.S. roads are in poor condition, and a road with many potholes or temporary pavement repairs may also lack continuous lane markings. Many minor roads, which are generally the responsibility of county or municipal governments, may lack road edge lines as well as center lines, potentially making it difficult for autonomous vehicles to position themselves correctly. Dirt and gravel roads may pose particular challenges for autonomous vehicles, as they generally have no pavement markings and cameras may be unable to detect potholes or edges in low-visibility conditions. Closely tied to the need for clearer road markings and signage will be ways in which federal and state transportation agencies develop a standardized method to communicate information to vehicles and motorists about construction, road accidents, detours, and other changes to road environments. Many of the perceived benefits of autonomous vehiclesâreduced vehicle fatalities, congestion mitigation, and pollution reductionâmay depend on the ability of vehicles to exchange information with surrounding infrastructure. The Transportation Research Board (TRB) has been evaluating how states should begin now to plan and develop the types of connected vehicle infrastructure that will be necessary for full autonomous vehicle deployment. TRB's research is also focused on how cash-strapped transportation agencies can identify the large investments that will in turn be necessary to implement connectivity on top of regular maintenance of highways, bridges, and other traditional infrastructure. Other options to facilitate autonomous vehicle travel may include designation of special highway corridors that would include all V2X systems necessary for safe autonomous vehicle operation; three European countries have agreed to build such a corridor. Over a longer time line, the importance of highway markings may fade as automakers and developers find new ways for autonomous vehicles to navigate, including greater use of guardrails and roadside barriers, sensors, and three-dimensional maps. If highly detailed mapping is deemed to be one replacement for visual cues such as lane markings, then transportation agencies and automakers may need to develop an open standard so that all vehicles will understand the mapping technology. V2X communications through DSRC and cellular may evolve to provide a mechanism for new types of vehicle guidance. Appendix. Image of Nuro Robot, R2X Summary:	null	96	46,060	46,062	46,062	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Fully autonomous vehicles, which would carry out many or all of their functions without the intervention of a driver, may someday bring sweeping social and economic changes and "lead to breakthrough gains in transportation safety." Motor vehicle crashes caused an estimated 36,560 fatalities in 2018; a study by the National Highway Traffic Safety Administration (NHTSA) has shown that 94% of crashes are due to human errors. Legislation that would encourage development and testing of autonomous vehicles has faced controversy in Congress. In the 115 th Congress, the House of Representatives passed an autonomous vehicle bill, H.R. 3388 , by voice vote in September 2017. The Senate Committee on Commerce, Science, and Transportation reported a different bill, S. 1885 , in November 2017, but after some Senators raised concerns about the preemption of state laws and the possibility of large numbers of vehicles being exempted from some Federal Motor Vehicle Safety Standards, the Senate bill did not reach the floor. No further action was taken on either bill before the 115 th Congress adjourned. Although some Members of Congress remain interested in autonomous vehicles, no legislative proposals have become law. Several fatal accidents involving autonomous vehicles raised new questions about how federal and state governments should regulate vehicle testing and the introduction of new technologies into vehicles offered for sale. A pedestrian was killed in Arizona by an autonomous vehicle operated by Uber on March 18, 2018, and three Tesla drivers died when they failed to respond to hazards not recognized by the vehicles. These accidents suggest that the challenge of producing fully autonomous vehicles that can operate safely on public roads may be greater than developers had envisioned, a new outlook voiced by several executives, including the Ford Motor Co. CEO. However, with the authorization of federal highway and public transportation programs set to expire at the end of FY2020, a surface transportation reauthorization bill could become a focus of efforts to also enact autonomous vehicle legislation. Advances in Vehicle Technology While fully autonomous vehicles may lie well in the future, a range of new technologies is already improving vehicle performance and safety while bringing automation to vehicular functions once performed only by the driver. The technologies involved are very different from the predominantly mechanical, driver-controlled technology of the 1960s, when the first federal vehicle safety laws were enacted. These new features automate lighting and braking, connect the car and driver to the Global Positioning System (GPS) and smartphones, and keep the vehicle in the correct lane. Three forces are driving these innovations: technological advances enabled by new materials and more powerful, compact electronics; consumer demand for telecommunications connectivity and new types of vehicle ownership and ridesharing; and regulatory mandates pertaining to emissions, fuel efficiency, and safety. Manufacturers are combining these innovations to produce vehicles with higher levels of automation. Vehicles do not fall neatly into the categories of "automated" or "nonautomated," because all new motor vehicles have some element of automation. The Society of Automotive Engineers International (SAE), an international standards-setting organization, has developed six categories of vehicle automationâranging from a human driver doing everything to fully autonomous systems performing all the tasks once performed by a driver. This classification system ( Table 1 ) has been adopted by the U.S. Department of Transportation (DOT) to foster standardized nomenclature to aid clarity and consistency in discussions about vehicle automation and safety. Vehicles sold today are in levels 1 and 2 of SAE's automation rating system. Although some experts forecast market-ready autonomous vehicles at level 3 will be available in a few years, deployment of fully autonomous vehicles in all parts of the country at level 5 appears to be more distant, except perhaps within closed systems that allow fully autonomous vehicles to operate without encountering other types of vehicles. Testing and development of autonomous vehicles continue in many states and cities. Technologies that could guide an autonomous vehicle ( Figure 1 ) include a wide variety of electronic sensors that would determine the distance between the vehicle and obstacles; park the vehicle; use GPS, inertial navigation, and a system of built-in maps to guide the vehicle's direction and location; and employ cameras that provide 360-degree views around the vehicle. To successfully navigate roadways, an autonomous vehicle's computers, sensors and cameras will need to accomplish four tasks that a human driver undertakes automatically: detect objects in the vehicle's path; classify those objects as to their likely makeup (e.g., plastic bag in the wind, a pedestrian or a moving bicycle); predict the likely path of the object; and plan an appropriate response. Most autonomous vehicles use dedicated short-range communication (DSRC) to monitor road conditions, congestion, crashes, and possible rerouting. As 5G wireless communications infrastructure is installed more widely, DSRC may evolve and become integrated with it, enabling vehicles to offer greater interoperability, bandwidth, and cybersecurity. Some versions of these autonomous vehicle technologies, such as GPS and rear-facing cameras, are being offered on vehicles currently on the market, while manufacturers are studying how to add others to safely transport passengers without drivers. Manufacturers of conventional vehicles, such as General Motors and Honda, are competing in this space with autonomous vehicle "developers" such as Alphabet's Waymo. In addition, automakers are aligning themselves with new partners that have experience with ride-sharing and artificial intelligence: Ford and Volkswagen have announced that they expect to use autonomous vehicle technology in a new ride-sharing service in Pittsburgh, PA, as early as 2021; GM acquired Cruise Automation, a company that is developing self-driving technology for Level 4 and 5 vehicles. GM has also invested $500 million in the Lyft ride-sharing service; Honda, after breaking off talks about partnering with Waymo, purchased a stake in GM's Cruise Automation; Volvo and Daimler have announced partnerships with ride-sharing service Uber; and BMW partnered with the Mobileye division of Intel, a semiconductor manufacturer, to design autonomous vehicle software. Cybersecurity and Data Privacy As vehicle technologies advance, the security of data collected by vehicle computers and the protection of on-board systems against intrusion are becoming more prominent concerns. Many of the sensors and automated components providing functions now handled by the driver will generate large amounts of data about the vehicle, its location at precise moments in time, driver behavior, and vehicle performance. The systems that allow vehicles to communicate with each other, with roadside infrastructure, and with manufacturers seeking to update software will also offer portals for possible unauthorized access to vehicle systems and the data generated by them. Protecting autonomous vehicles from hackers is of paramount concern to federal and state governments, manufacturers, and service providers. A well-publicized hacking of a conventional vehicle by professionals demonstrated to the public that such disruptions can occur. Hackers could use more than a dozen portals to enter even a conventional vehicle's electronic systems ( Figure 2 ), including seemingly innocuous entry points such as the airbag, the lighting system, and the tire pressure monitoring system (TPMS). Requirements that increasingly automated vehicles accept remote software updates, so that owners do not need to take action each time software is revised, are in part a response to concerns that security weaknesses be rectified as quickly as possible. To address these concerns, motor vehicle manufacturers established the Automotive Information Sharing and Analysis Center (Auto-ISAC), which released a set of cybersecurity principles in 2016. DOT's autonomous vehicle policies designate Auto-ISAC as a central clearinghouse for manufacturers to share reports of cybersecurity incidents, threats, and violations with others in the vehicle industry. Aside from hackers, many legitimate entities would like to access vehicle data, including vehicle and component manufacturers, the suppliers providing the technology and sensors, the vehicle owner and occupants, urban planners, insurance companies, law enforcement, and first responders (in case of an accident). Issues pertaining to vehicle data collection include vehicle testing crash data (how is it stored and who gets to access it); data ownership (who owns most of the data collected by vehicle software and computers); and consumer privacy (transparency for consumers and owner access to data). At present, no laws preclude manufacturers and software providers from reselling data about individual vehicles and drivers to third parties. Pathways to Autonomous Vehicle Deployment Abroad Autonomous vehicles are being developed and tested in many countries, including those that produce most of the world's motor vehicles. Several analyses have evaluated the factors that are contributing to the advancement of autonomous vehicles in various countries: Innovation . Benchmarks in this area include the number and engagement of domestic automakers and technology developers working on automation, the partnerships they forge with academic and related businesses, the prevalence of ride-sharing services, and autonomous vehicle patents issued. V ehicle infrastructure . Autonomous vehicles will need new types of infrastructure support and maintenance, including advanced telecommunications links and near-perfect pavement and signage markings. Planning and implementing these highway improvements may enable autonomous vehicles to be fully functional sooner. In addition, many test vehicles are currently powered by electricity, so the availability of refueling stations could be a factor in their acceptance. Wo rkforce training. The increased reliance on autonomous vehicle technologies may require different workforce skills. Many traditional mechanical parts may disappear, especially if autonomous vehicles operate entirely on battery power, while the arrangement and function of dashboards and seating may be reinvented. Components suppliers that are already addressing this new product demand and reorienting their workforces will assist in the transition to autonomous vehicles. G overnment laws and regulations that encourage development and testing . Fully autonomous vehicles may not have standard features of today's cars, such as steering wheels and brake pedals, as there will not be a driver. By law or regulation, motor vehicles built today are required to have many of these features. Some governments are taking a lead by modifying vehicle requirements for purposes of pilot programs and tests. Permanent changes in standards will most likely be necessary if autonomous vehicle technologies are to be commercialized. L evel of consumer acceptance . Markets are more likely to embrace autonomous vehicles if many residents in cities see autonomous vehicles on the road, a high level of technology is in use (including internet access and mobile broadband), and ride-hailing services are more widely used. Several surveys have been conducted analyzing many of these factors. For example, a 2018 Harvard University report highlights plans in China, South Korea, Japan, and the United States to "seize the benefits" of autonomous vehicles. In a report on innovation policies in four Asian countries (China, Japan, South Korea, and Singapore), the United Nations Economic and Social Commission for Asia and the Pacific ranked Singapore first in autonomous vehicle readiness because of its policies and new laws governing their deployment and its high consumer acceptance. The report also notes that South Korea's K-City facility is "intended to be the world's largest testbed for self-driving cars." A more detailed comparison of factors affecting autonomous vehicle development and deployment has been conducted by KPMG International, which has developed an index to measure how 25 countries are guiding autonomous vehicles ( Table 2 ). The Netherlands ranked first overall in the KPMG report, where it was cited as "an example of how to ready a country for AVs by performing strongly in many areas , " as well as first in infrastructure. Singapore came in first on policy and legislation because it has a single government entity overseeing autonomous vehicle regulations, it is funding autonomous vehicle pilots, and it has enacted a national standard to promote safe deployment. Contributing to its rank was a World Economic Forum (WEF) report that ranked it first among 139 countries in having an effective national legislature and efficient resolution of legal disputes. Singapore also scored first place on the consumer acceptance metric, primarily because its extensive autonomous testing is being conducted throughout the island nation, thereby familiarizing residents with autonomous passenger vehicles and buses. Two other major auto-producing countriesâGermany and Japanâfall just below the United States on technology and innovation, according to KPMG, while Japan ranks higher on autonomous vehicle infrastructure ( Table 3 ). Issues in Federal Safety Regulation Vehicles operating on public roads are subject to dual regulation by the federal government and the states in which they are registered and driven. Traditionally, NHTSA, within DOT, has regulated auto safety, while states have licensed automobile drivers, established traffic regulations, and regulated automobile insurance. Proponents of autonomous vehicles note that lengthy revisions to current vehicle safety regulations could impede innovation, as the rules could be obsolete by the time they take effect. In 2016, the Obama Administration issued the first report on federal regulations affecting autonomous vehicles. Since then, DOT has issued two follow-up reports and has said it anticipates issuing annual updates to its regulatory guidance. In addition, the Federal Communications Commission (FCC) is reconsidering the allocation of electromagnetic spectrum currently reserved for motor vehicle communications, and its decisions may affect how autonomous vehicles evolve. Obama Administration Policy Direction DOT's 2016 report proposed federal and state regulatory policies in these areas: A set of guidelines outlining best practices for autonomous vehicle design, testing, and deployment. DOT identified 15 practices and procedures that it expected manufacturers, suppliers, and service providers (such as ridesharing companies) to follow in testing autonomous vehicles, including data recording, privacy, crashworthiness, and object and event detection and response. These reports, called Safety Assessment Letters, would be voluntary, but the report noted that "they may be made mandatory through a future rulemaking." A m odel s tate p olicy that identifies where new autonomous vehicle-related issues fit in the current federal and state regulatory structures. The model state policy, developed by NHTSA in concert with the American Association of Motor Vehicle Administrators and private-sector organizations, suggests state roles and procedures, including administrative issues (designating a lead state agency for autonomous vehicle testing), an application process for manufacturers that want to test vehicles on state roads, coordination with local law enforcement agencies, changes to vehicle registration and titling, and regulation of motor vehicle liability and insurance. A streamlined review process to issue DOT regulatory interpretations on autonomous vehicle questions within 60 days and on regulatory exemptions within six months. Identification of new tools and regulatory structures for NHTSA that could build its expertise in new vehicle technologies, expand its ability to regulate autonomous vehicle safety, and increase speed of its rulemakings. Two new tools could be expansion of existing exemption authority and premarket testing to assure that autonomous vehicles will be safe. Some of the new regulatory options cited would require new statutory authority, while others could be instituted administratively. The report noted that "DOT does not intend to advocate or oppose any of the tools.â¦ [I]t intends â¦ to solicit input and analysis regarding those potential options from interested parties." Trump Administration Policy Guidelines and Proposed SafetyÂ Rules The two follow-up reports issued by the Trump Administration describe a more limited federal regulatory role in overseeing autonomous passenger vehicle deployment, while also broadening the scope of DOT oversight by addressing the impact of autonomous technology on commercial trucks, public transit, rail, and ports and ships. The policies described in these reports replace those recommended by the Obama Administration in several ways, including the following: Encouraging integration of automation across all transportation modes , instead of just passenger vehicles. The October 2018 report Automated Vehicles 3.0 outlines how each of DOT's agencies will address autonomous vehicle safety within its purview. Establishing six automation principles that will be applied to DOT's role in overseeing passenger cars, trucks, commercial buses, and other types of vehicles. These include giving priority to safety; remaining technology-neutral; modernizing regulations; encouraging a consistent federal and state regulatory environment; providing guidance, research, and best practices to government and industry partners; and protecting consumers' ability to choose conventional as well as autonomous vehicles. Reiterating the traditional roles of federal and state governments in regulating motor vehicles and motorists, respectively. The reports cite best practices that states should consider implementing, such as minimum requirements for autonomous vehicle test drivers, and discuss how DOT can provide states with technical assistance. Recommending voluntary action in lieu of regulation. This could include suggesting that manufacturers and developers of autonomous driving systems issue and make public voluntary safety self-assessments to demonstrate transparency and increase understanding of the new technologies and industry development of "voluntary technical standards" to "advance the integration of automation technologies into the transportation system." The NHTSA Voluntary Safety Self-Assessment web page lists 17 companies that have filed self-assessment reports, including three major automakers. To provide a perspective, 64 companies have been issued autonomous vehicle testing permits by the State of California alone. Accelerating NHTSA decisions on requests for exemptions from federal safety standards for autonomous vehicle testing. Promoting development of voluntary technical standards by other organizations, such as the Society of Automotive Engineers, the government's National Institute of Standards and Technology, and the International Organization for Standardization. DOT has indicated that it wants to revise regulations pertinent to autonomous vehicles, such as redefining the terms "driver" and "operator" to indicate that a human being does not always have to be in control of a motor vehicle. It also said it plans to require changes in standards for the inspection, repair, and maintenance of federally regulated commercial trucks and buses. Along these lines, NHTSA issued a Notice of Proposed Rulemaking in May 2019, requesting comments on testing and verifying how autonomous vehicle technologies may comply with existing federal safety standards. National Transportation Safety Board Investigation and Recommendations On November 19, 2019, the National Transportation Safety Board (NTSB) issued its report on the probable cause of a 2018 fatality involving an autonomous vehicle in Tempe, AZ. In that accident, a pedestrian was fatally injured by a test vehicle operated by Uber Technologies with an operator in the driver's seat. The NTSB investigation determined that the probable cause of the crash "was the failure of the vehicle operator to monitor the driving environment and the operation of the ADS [automated driving system] because she was visually distracted throughout the trip by her personal cell phone." Though the vehicle detected the pedestrian 5.6 seconds before the crash, the NTSB reported that "it never accurately classified her as a pedestrian or predicted her path." Beyond the immediate cause of this accident, NTSB reported that an "inadequate safety culture" at Uber and deficiencies in state and federal regulation contributed to the circumstances that led to the fatal crash. Among the findings were the following: Uber's internal safety risk-assessment procedures and oversight of the operator were inadequate, and its disabling of the vehicle's forward collision warning and automatic emergency braking systems increased risks. The Arizona Department of Transportation provided insufficient oversight of autonomous vehicle testing in the state. NHTSA provides insufficient guidance to developers and manufacturers on how they should achieve safety goals, has not established a process for evaluating developers' safety self-assessment reports, and does not require such reports to be submitted, leaving their filing as voluntary. NTSB recommended that Uber, the Arizona Department of Transportation, and NHTSA take specific steps to address the issues it identified. It also recommended that the American Association of Motor Vehicle Administrators inform all states about the circumstances of the Tempe crash, encouraging them to require and evaluate applications by developers before granting testing permits. Connected Vehicles and Spectrum Allocation Federal regulation of the spectrum used in vehicle communications may affect how automation proceeds. Autonomous vehicles, whose artificial intelligence and technology are generally self-contained in each vehicle, are part of a larger category of connected vehicles and infrastructure. Federal, state, and industry research and testing of vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communications has been under way since the 1990s. Together, these two sets of technologies, known as V2X, are expected to reduce the number of accidents by improving detection of oncoming vehicles, providing warnings to drivers, and establishing communications infrastructure along roadways that would prevent many vehicles from leaving the road and striking pedestrians. These technologies fall within the broad category of intelligent transportation systems, which have received strong support from Congress due to their potential to improve traffic flow and safety. For vehicles to communicate wirelessly, they use radio frequencies, or spectrum, which are regulated by the Federal Communications Commission (FCC). In 1999, the FCC allocated the 5.9 gigahertz (GHz) band solely for motor vehicle safety purposes for vehicles using DSRC. Over the past two decades, industry and government agencies have collaborated to develop, test, and deploy DSRC technologies. States have invested in DSRC-based improvements, and this technology is operating in dozens of states and cities. As industry has continued to explore vehicle automation, an alternative, cellular-based technology has recently emerged, known as C-V2X. In December 2019, the FCC proposed rules that would reallocate the lower 45 MHz of the 5.9 GHz band for unlicensed use (e.g., Wi-Fi), and allocate the remaining 30 MHz for transportation and vehicle-related use. Of the 30 MHz, the FCC proposed to grant C-V2X exclusive use of 20 MHz of the segment. It is seeking comment on whether the remaining 10 MHz should remain dedicated to DSRC or be dedicated to C-V2X. The FCC commissioners noted that DSRC has evolved slowly and has not been widely deployed, and the rules are intended to ensure the spectrum supports its highest and best use. This decision has competitive implications for the automotive, electronics, and telecommunications industries, and may affect the availability of safety technologies and the path toward vehicle automation. DOT has called for retaining the entire 5.9 GHz band for exclusive transportation use. Figure 3 shows that these two technologies facilitate somewhat different types of vehicle and infrastructure communications. In light of their different characteristics, the European Commission has approved DSRC use for direct V2V and V2I communications, while endorsing cellular-based technology for vehicle access to the cloud and remote infrastructure. Industry groups in the United States took varying positions in the FCC proceedings. DSRC advocates argued that this technology has been proven by years of testing and is already deployed in many areas. They generally supported retaining the 5.9 GHz band for exclusive use for DSRC. C-V2X supporters contended that its cellular-based solution is aligned with international telecommunications standards for 5G technologies and should be allowed to use the 5.9 GHz band alongside DSRC. A group of technology companies, including device makers, argued that additional spectrum is needed to accommodate the increasing number of interconnected devices, and that the 5.9GHz band can safely be shared among transportation and non-transportation uses. Congressional Action During the 115 th Congress, committees in the House of Representatives and the Senate held numerous hearings in 2017 on the technology of autonomous vehicles and possible federal issues that could result from their deployment. Initially, bipartisan consensus existed on major issues: H.R. 3388 , the SELF DRIVE Act, was reported unanimously by the House Committee on Energy and Commerce, and on September 6, 2017, the House of Representatives passed it without amendment by voice vote. A similar bipartisan initiative began in the Senate. Prior to markup in the Committee on Commerce, Science, and Transportation, the then-chairman and ranking member issued a set of principles they viewed as central to new legislation: prioritize safety , acknowledging that federal standards will eventually be as important for self-driving vehicles as they are for conventional vehicles; promote innovation and address the incompatibility of old regulations written before the advent of self-driving vehicles; remain technology - neutral , not favoring one business model over another; reinforce separate but complementary federal and state regulatory roles ; strengthen cybersecurity so that manufacturers address potential vulnerabilities before occupant safety is compromised; and educate the public through government and industry efforts so that the differences between conventional and self-driving vehicles are understood. Legislation slightly different from the House-passed bill emerged: S. 1885 , the AV START Act, was reported by the Committee on Commerce, Science, and Transportation on November 28, 2017. It was not scheduled for a floor vote prior to adjournment in December 2018 because of unresolved concerns raised by several Senators. To address some of those concerns, a committee staff draft bill that would have revised S. 1885 was circulated in December 2018 that could form the basis of future legislation. The House and Senate bills addressed concerns about state action replacing some federal regulation, while also empowering NHTSA to take unique regulatory actions to ensure safety and encouraging innovation in autonomous vehicles. The bills retained the current arrangement of states controlling most driver-related functions and the federal government being responsible for vehicle safety. The House and Senate bills included the following major provisions. Where the December 2018 Commerce Committee staff draft proposed significant changes, they are noted in this analysis. P reemption of state laws . H.R. 3388 would have barred states from regulating the design, construction, or performance of highly autonomous vehicles, automated driving systems, or their components unless those laws are identical to federal law. The House-passed bill reiterated that vehicle registration, driver licensing, driving education, insurance, law enforcement, and crash investigations should remain under state jurisdiction as long as state laws and regulations do not restrict autonomous-vehicle development. H.R. 3388 provided that nothing in the preemption section should prohibit states from enforcing their laws and regulations on the sale and repair of motor vehicles. S. 1885 would also have preempted states from adopting laws, regulations, and standards that would regulate many aspects of autonomous vehicles, but would have omitted some of the specific powers reserved to the states under the House-passed bill. States would not have been required to issue drivers licenses for autonomous-vehicle operations, but states that chose to issue such licenses would not have been allowed to discriminate based on a disability. The bill provided that preemption would end when NHTSA establishes standards covering these vehicles. The Senate staff draft sought to clarify that state and local governments would not lose their traditional authority over traffic laws. It also would have added provisions that state common law and statutory liability would be unaffected by preemption, and would have limited use of arbitration in death or bodily injury cases until new federal safety standards are in effect. Exemption authority . Both the House and Senate bills would have expanded DOT's ability to issue exemptions from existing safety standards to encourage autonomous-vehicle testing on public roads. To qualify for an autonomous-vehicle exemption, a manufacturer would have had to show that the safety level of the vehicle equaled or exceeded the safety level of each standard for which an exemption was sought. Current law limits exemptions to 2,500 vehicles per manufacturer per year. The House-passed bill would have phased in increases over four years of up to 100,000 vehicles per manufacturer per year; the Senate bill would have permitted up to 80,000 in a similar phase-in. H.R. 3388 provided constraints on the issuance of exemptions from crashworthiness and occupant protection standards; S. 1885 did not address those two issues. DOT would have been directed to establish a publicly available and searchable database of motor vehicles that have been granted an exemption. Crashes of exempted vehicles would have had to be reported to DOT. The Senate bill would not have required the establishment of a database of exempted vehicles, and reporting of exempt vehicle crashes would not have been required. The Senate staff draft added a provision to ensure that vehicles exempted from federal standards would have been required to nonetheless maintain the same level of overall safety, occupant protection, and crash avoidance as a traditional vehicle. A DOT review of vehicle exemptions would have been required annually. The draft capped exemptions at no more than five years. New NHTSA safety rules. The House bill would have required NHTSA to issue a new regulation requiring developers and manufacturers to submit a "safety assessment certification" explaining how safety is being addressed in their autonomous vehicles. The Senate bill included a similar provision requiring a "safety evaluation report," and would have delineated nine areas for inclusion in the reports, including system safety, data recording, cybersecurity risks, and methods of informing the operator about whether the vehicle technology is functioning properly. While manufacturers and developers would be required to submit reports, the legislation did not mandate that NHTSA establish an assessment protocol to ensure that minimum risk conditions are met. The Senate staff draft would have clarified the process by which federal motor vehicle safety standards would be updated to accommodate new vehicle technologies, providing additional time for new rulemaking. Within six months of enactment, DOT would have been required to develop and publicize a plan for its rulemaking priorities for the safe deployment of autonomous vehicles. To address concerns that autonomous vehicles might not recognize certain potential hazardsâincluding the presence of bicyclists, pedestrians, and animalsâand hence possibly introduce new vulnerabilities to motor vehicle travel, the Senate staff draft would have clarified that manufacturers must describe how they are addressing the ability of their autonomous vehicles to detect, classify, and respond to these and other road users. Manufacturers and developers would include this analysis in their safety evaluation reports. Cybersecurity. The House-passed bill provided that no highly autonomous vehicle or vehicle with "partial driving automation" could be sold domestically unless a cybersecurity plan had been developed by the automaker. Such plans would have to have been developed within six months of enactment and would include a written policy on mitigation of cyberattacks, unauthorized intrusions, and malicious vehicle control commands; a point of contact at the automaker with cybersecurity responsibilities; a process for limiting access to autonomous driving systems; and the manufacturer's plans for employee training and for maintenance of the policies. The Senate bill would have required written cybersecurity plans to be issued, including a process for identifying and protecting vehicle control systems, detection, and response to cybersecurity incidents, and methods for exchanging cybersecurity information. A cybersecurity point of contact at the manufacturer or vehicle developer would have had to be named. Unlike the House-passed bill, S. 1885 would have directed DOT to create incentives so that vehicle developers would share information about vulnerabilities, and would have specified that all federal research on cybersecurity risks should be coordinated with DOT. In addition, S. 1885 would have established a Highly Automated Vehicle Data Access Advisory Committee to provide Congress with recommendations on cybersecurity issues. Federal agencies would have been prohibited from issuing regulations pertaining to the access or ownership of data stored in autonomous vehicles until the advisory committee's report was submitted. The staff draft would have added several cybersecurity provisions, including an additional study by the National Institute of Standards and Technology that would recommend ways vehicles can be protected from cybersecurity incidents. Privacy. Before selling autonomous vehicles, manufacturers would have been required by the House-passed bill to develop written privacy plans concerning the collection and storage of data generated by the vehicles, as well as a method of conveying that information to vehicle owners and occupants. However, a manufacturer would have been allowed to exclude processes from its privacy policy that encrypt or make anonymous the sources of data. The Federal Trade Commission would have been tasked with developing a report for Congress on a number of vehicle privacy issues. Although S. 1885 would not have explicitly required privacy plans by developers and manufacturers, it would have required NHTSA to establish an online, searchable motor vehicle privacy database that would include a description of the types of information, including personally identifiable information (PII), that are collected about individuals during operation of a motor vehicle. This database would have covered all types of vehiclesânot just autonomous vehiclesâand would have included the privacy policies of manufacturers. The database would also have included an explanation about how PII would be collected, retained, and destroyed when no longer relevant. The Senate staff draft would have added new passenger motor vehicle privacy protections. Research and advisory panels. Both bills would have established several new advisory bodies to conduct further research on autonomous vehicles and advise DOT on possible new vehicle standards. H.R. 3388 would have established a NHTSA advisory group with a broad cross-section of members to advise on mobility access for senior citizens and the disabled; cybersecurity; labor, employment, environmental, and privacy issues; and testing and information sharing among manufacturers. S. 1885 would have established other panels, including a Highly Automated Vehicles Technical Committee to advise DOT on rulemaking policy and vehicle safety; a working group comprising industry and consumer groups to identify marketing strategies and educational outreach to consumers; and a committee of transportation and environmental experts to evaluate the impact of autonomous vehicles on transportation infrastructure, mobility, the environment, and fuel consumption. Separately, DOT would have been required to study ways in which autonomous vehicles and parts could be produced domestically, with recommendations on how to incentivize U.S. manufacturing. The Senate staff draft would have consolidated some of the advisory committees in S. 1885 into a Highly Automated Vehicle Advisory Council with diverse stakeholder representation, and mandated to report on mobility for the disabled, senior citizens and populations underserved by public transportation; cybersecurity; employment and environmental issues; and privacy and data sharing. No similar comprehensive autonomous vehicle legislation has been introduced in the 116 th Congress, although discussions on a bicameral bill have been ongoing. In addition, the Senate Committee on Environment and Public Works has reported America's Transportation Infrastructure Act of 2019, S. 2302 , which includes several provisions in Subtitle D addressing the possible impact of autonomous vehicles on highway infrastructure. It would establish a grant program to modernize the U.S. charging and fueling infrastructure so that it would be responsive to technology advancements, including autonomous vehicles. The legislation would also require research on ways in which roadway infrastructure should be improved for autonomous vehicles. State Concerns State and local rules and regulations may affect how autonomous vehicles are tested and deployed. The National Governors Association (NGA) has noted that state governments have a role with respect to vehicle and pedestrian safety, privacy, cybersecurity, and linkage with advanced communications networks. While supporting technology innovations in transportation, a recent NGA report notes that "the existing regulatory structure and related incentives have not kept pace with the new technology" and that "recent accidents have raised concerns about the safety of drivers, pedestrians and other road users in the period during which autonomous and non-autonomous vehicles share the road." NGA has joined with other state and local government organizations to call for modifications in forthcoming autonomous vehicle legislation, including clarity that states and local governments not only can enforce existing laws governing operation of motor vehicles on public roads, but also originate new statutes and regulations; requiring submission of more detailed automaker and developer reports to DOT on the safety of their technologies, so that states and cities can be assured that autonomous vehicle testing is being conducted in a safe manner; differentiation between limited vehicle testing and the commercial deployment of large numbers of autonomous vehicles through an expanded exemptions process; and expansion of plans for consumer education about "safe use and interaction" with respect to autonomous vehicles. According to the National Conference of State Legislatures (NCSL), at least 41 states and the District of Columbia considered legislation related to autonomous vehicles between 2013 and October 2019; in that time, 29 states and the District of Columbia enacted legislation, governors in 11 states issued executive orders, and 5 states issued both an executive order and enacted legislation. ( Figure 4 ). Of the states that have enacted laws in 2017, 2018, and 2019 pertaining to autonomous vehicles, NCSL reports that the largest number of states have passed laws that clarify certain types of commercial activity, such as how closely autonomous vehicles can follow each other when they are coordinated, as in truck platooning. According to NCSL, no recent state laws have been enacted dealing with cybersecurity or vehicle inspection reports. NCSL has organized and categorized the types of state legislation ( Table 4 ). For a more thorough description of the legislation passed in 2017, 2018, and 2019, the NCSL Table of Enacted State Legislation provides more detail. Implications for Highway Infrastructure Deployment of fully autonomous vehicles will require not only a suite of new technologies, but also changes to the highway infrastructure on which those vehicles will operate. Autonomous vehicles being tested today rely on clear pavement markings and legible signage to stay in their lanes and navigate through traffic. Major highways as well as side roads in urban and rural settings will need to accommodate autonomous vehicles in addition to a large fleet of conventional vehicles with human drivers. In this transition period to more autonomous vehiclesâwhich many anticipate will last several decades âthe Federal Highway Administration (FHWA) is expected to play a significant role through its administration of the Manual on Uniform Traffic Control Devices (MUTCD), which sets standards for all traffic control devices, including signs, intersection signals, and road markings. For example, overhead signage on Interstate Highways contains white lettering on a green background in all 50 statesâeasily recognizable to any U.S. driverâdue to MUTCD standards. FHWA is in the process of updating the 2009 MUTCD to address issues specific to autonomous vehicle technologies. However, state compliance with MUTCD is voluntary, and not all states uniformly apply all standards. Audi reportedly announced in 2018 that it would not make its new Level 3 autonomous vehicle technology, called Traffic Jam Pilot, available in the United States because of "laws that change from one state to the next, insurance requirements, and things like lane lines and road signs that look different in different regions." Other automakers have made similar complaints about U.S. roads. In the near term, improvement and better maintenance of pavement markings, signage and intersection design may be the most helpful steps that federal and state transportation officials can take. Despite national standards based on MUTCD, not all states maintain their highway markings at a level that would be useful to guide autonomous vehicles. Inadequate road maintenance may affect the pace of autonomous vehicle deployment. Some 21% of major U.S. roads are in poor condition, and a road with many potholes or temporary pavement repairs may also lack continuous lane markings. Many minor roads, which are generally the responsibility of county or municipal governments, may lack road edge lines as well as center lines, potentially making it difficult for autonomous vehicles to position themselves correctly. Dirt and gravel roads may pose particular challenges for autonomous vehicles, as they generally have no pavement markings and cameras may be unable to detect potholes or edges in low-visibility conditions. Closely tied to the need for clearer road markings and signage will be ways in which federal and state transportation agencies develop a standardized method to communicate information to vehicles and motorists about construction, road accidents, detours, and other changes to road environments. Many of the perceived benefits of autonomous vehiclesâreduced vehicle fatalities, congestion mitigation, and pollution reductionâmay depend on the ability of vehicles to exchange information with surrounding infrastructure. The Transportation Research Board (TRB) has been evaluating how states should begin now to plan and develop the types of connected vehicle infrastructure that will be necessary for full autonomous vehicle deployment. TRB's research is also focused on how cash-strapped transportation agencies can identify the large investments that will in turn be necessary to implement connectivity on top of regular maintenance of highways, bridges, and other traditional infrastructure. Other options to facilitate autonomous vehicle travel may include designation of special highway corridors that would include all V2X systems necessary for safe autonomous vehicle operation; three European countries have agreed to build such a corridor. Over a longer time line, the importance of highway markings may fade as automakers and developers find new ways for autonomous vehicles to navigate, including greater use of guardrails and roadside barriers, sensors, and three-dimensional maps. If highly detailed mapping is deemed to be one replacement for visual cues such as lane markings, then transportation agencies and automakers may need to develop an open standard so that all vehicles will understand the mapping technology. V2X communications through DSRC and cellular may evolve to provide a mechanism for new types of vehicle guidance. Appendix. Image of Nuro Robot, R2X	Summary:	gov_report	1,024	null	35
crs_RL31675	crs_RL31675_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Congressional Notification Requirements This report reviews the process and procedures that currently apply to congressional consideration of foreign arms sales proposed by the President. This includes consideration of proposals to sell major defense equipment, defense articles and services, or the retransfer to other states of such military items. In general, the executive branch, after complying with the terms of applicable U.S. law, principally contained in the Arms Export Control Act (AECA) (P.L. 90-629, 82 Stat. 1320), is free to proceed with an arms sales proposal unless Congress passes legislation prohibiting or modifying the proposed sale. The President has the obligation under the law to submit the arms sale proposal to Congress, but only after he has determined that he is prepared to proceed with any such notifiable arms sales transaction. The Department of State (on behalf of the President) submits a preliminary or informal notification of a prospective major arms sale 20 calendar days before the executive branch takes further formal action. This informal notification is provided to the committees of primary jurisdiction for arms sales issues. In the Senate, this is the Senate Foreign Relations Committee; in the House, it is the Foreign Affairs Committee. It has been the practice for such informal notifications to be made for arms sales cases that would have to be formally notified to Congress under the provisions of Section 36(b) of the AECA. The informal notification practice stemmed from a February 18, 1976, letter from the Department of Defense making a nonstatutory commitment to give Congress these preliminary classified notifications. Beginning in 2012, the State Department implemented a new informal notification process, which the department calls a "tiered review," in which the relevant committees are notified between 20 and 40 calendar days before receiving formal notification, depending on the system and destination in question. During June 2017 testimony, Acting Assistant Secretary of State Tina Kaidanow described this process as Congressional review period during which the Committees can ask questions or raise concerns prior to the Department of State initiating formal notification. The purpose is to provide Congress the opportunity to raise concerns, and have these concerns addressed, in a confidential process with the Administration, so that our bilateral relationship with the country in question is protected during this process. If a committee "raises significant concerns about a sale or [export] license," the State Department "will typically extend the review period until we can resolve those concerns," Kaidanow explained. Under Section 36(b) of the AECA, Congress must be formally notified 30 calendar days before the Administration can take the final steps to conclude a government-to-government foreign military sale of major defense equipment valued at $14 million or more, defense articles or services valued at $50 million or more, or design and construction services valued at $200 million or more. In the case of such sales to NATO member states, NATO, Japan, Australia, South Korea, Israel, or New Zealand, Congress must be formally notified 15 calendar days before the Administration can proceed with the sale. However, the prior notice threshold values are higher for NATO members, Japan, Australia, South Korea, Israel, or New Zealand. These higher thresholds are $25 million for the sale, enhancement, or upgrading of major defense equipment; $100 million for the sale, enhancement, or upgrading of defense articles and defense services; and $300 million for the sale, enhancement, or upgrading of design and construction services, so long as such sales to these countries do not include or involve sales to a country outside of this group of states. Section 36(i) requires the President to notify both the Senate Foreign Relations Committee and House Foreign Affairs Committee at least 30 days in advance of a pending shipment of defense articles subject to the 36(b) requirements if the chairman and ranking member of either committee request such notification. Certain articles or services listed on the Missile Technology Control Regime are subject to a variety of additional reporting requirements. Commercially licensed arms sales also must be formally notified to Congress 30 calendar days before the export license is issued if they involve the sale of major defense equipment valued at $14 million or more, or defense articles or services valued at $50 million or more (Section 36(c) AECA). In the case of such sales to NATO member states, NATO, Japan, Australia, South Korea, Israel, or New Zealand, Congress must be formally notified 15 calendar days before the Administration can proceed with such a sale. However, the prior notice threshold values are higher for sales to NATO members, Japan, Australia, South Korea, Israel, or New Zealand, specifically: $25 million for the sale, enhancement, or upgrading of major defense equipment; $100 million for the sale, enhancement, or upgrading of defense articles and defense services; and $300 million for the sale, enhancement, or upgrading of design and construction services, so long as such sales to these countries do not include or involve sales to a country outside of this group of states. Furthermore, commercially licensed arms sales of firearms (which are on category I of the United States Munitions List) valued at $1 million or more must also be formally notified to Congress for review 30 days prior to the license for export being approved (15 days prior notice is required for proposed licenses for sales to NATO members, Japan, Australia, South Korea, Israel, or New Zealand). Section 36(b)(5)(A) contains a reporting requirement for defense articles or equipment items whose technology or capability has, prior to delivery, been "enhanced or upgraded from the level of sensitivity or capability described" in the original congressional notification. For such exports, the President must submit a report to the relevant committees at least 45 days before the exports' delivery that describes the enhancement or upgrade and provides "a detailed justification for such enhancement or upgrade." This requirement applies for 10 years after the Administration has notified Congress of the export. According to Section 36(b)(5)(C), the Administration must, in the case of upgrades or enhancements meeting certain value thresholds, submit a new notification to Congress and the export will be considered "as if it were a separate letter of offer ... subject to all of the requirements, restrictions, and conditions set forth in this subsection." The threshold values are higher for sales to NATO members, Japan, Australia, South Korea, Israel, or New Zealand. A congressional recess or adjournment does not stop the 30 calendar-day statutory review period. It should be emphasized that after Congress receives a statutory notification required under Sections 36(b) or 36(c) of the AECA, for example, and 30 calendar days elapse without Congress having blocked the sale, the executive branch is free to proceed with the sales process. This fact does not mean necessarily that the executive branch and the prospective arms purchaser will sign a sales contract and that the items will be transferred on the 31 st day after the statutory notification of the proposal has been made. It would, however, be legal to do so at that time. Congressional Disapproval by Joint Resolution Although Congress has more than one legislative option it can use to block or modify an arms sale, one option explicitly set out in law for blocking a proposed arms sale is the use of a joint resolution of disapproval as provided for in Section 36(b) of the AECA. Under that law, the formal notification is legally required to be submitted to the chairman of the Senate Foreign Relations Committee and the Speaker of the House. The Speaker has routinely referred these notifications to the House Foreign Affairs Committee as the committee of jurisdiction. As a courtesy, the Defense Department has submitted a copy of the statutory notification to the House Foreign Affairs Committee when that notification is submitted to the Speaker of the House. Under this option, after receiving a statutory Section 36(b) notification from the executive branch, opponents of the arms sale would introduce joint resolutions in the House and Senate drafted so as to forbid by law the sale of the items specified in the formal sale notification(s) submitted to Congress. If no Member introduces such a measure, the AECA's provisions expediting congressional action, discussed below, do not take effect. The next step would be committee hearings in both houses on the arms sale proposal. If a majority of either the House or the Senate committee supported the joint resolution of disapproval, they would report it to their respective chamber in accordance with its rules. Following this, efforts would be made to seek floor consideration of the resolution. Senate Procedures At this point, it is important to take note of procedures crafted to expedite the consideration of arms sales resolutions of disapproval. Since 1976, Section 36(b)(2) of the AECA has stipulated that consideration of any resolution of disapproval in the Senate under Section 36(b)(1) of the AECA shall be "in accordance with the provisions of Section 601(b) of the International Security Assistance and Arms Export Control Act of 1976" ( P.L. 94-329 , 90 Stat. 729). Since 1980, this stipulation has also applied to resolutions of disapproval in the Senate relating to commercially licensed arms sales under Section 36(c)(1) of the AECA. The purpose of Section 601(b) was to establish rules to facilitate timely consideration of any resolution of disapproval in the Senate. The rules set forth in Section 601(b) supersede the standing rules of the Senate and include the following: Give the committee with jurisdiction [the Senate Foreign Relations Committee] 10 calendar days from the date a resolution of disapproval is referred to it to report back to the Senate its recommendation on any such resolution (certain adjournment periods are excluded from computation of the 10 days); Make it in order for a Senator favoring a disapproval resolution to move to discharge the committee from further consideration of the matter if the committee fails to report back to the Senate by the end of the 10 calendar days it is entitled to review the resolution (the AECA expressly permits a discharge motion after 5 calendar days for sales to NATO, NATO countries, Japan, Australia, South Korea, Israel, and New Zealand); Make the discharge motion privileged, limit floor debate on the motion to one hour, and preclude efforts to amend or to reconsider the vote on such a motion; Make the motion to proceed to consider a resolution of disapproval privileged and preclude efforts to amend or to reconsider the vote on such motion; Limit the overall time for debate on the resolution of disapproval to 10 hours and preclude efforts to amend or recommit the resolution of disapproval; Limit the time (one hour) to be used in connection with any debatable motion or appeal; provide that a motion to further limit debate on a resolution of disapproval, debatable motion, or appeal is not debatable. The Senate is constitutionally empowered to amend its rules or to effect a rule change at any time. The fact that an existing rule is in Section 601 of the International Security Assistance and Arms Export Control Act of 1976 is not an obstacle to changing it by Senate action alone should the Senate seek to do so. House Floor Procedures12 The House of Representatives is directed by Sections 36(b)(3) and 36(c)(3)(B) of the AECA to consider a motion to proceed to the consideration of a joint resolution disapproving an arms sale reported to it by the appropriate House committee as "highly privileged." Generally, this means that the resolution will be given precedence over most other legislative business of the House, and may be called up on the floor without a special rule reported by the Rules Committee. Unlike for the Senate, however, the AECA contains no provision for discharge of the House committee if it does not report on the joint resolution. If reported and called up, the measure will be considered in the Committee of the Whole, meaning that amendments can be offered under the "five-minute rule." Nevertheless, amendments to joint resolutions disapproving arms sales have apparently never been offered in the House. The Rules Committee usually sets the framework for floor consideration of major legislation in the House of Representatives, however, and could do so for a joint resolution of disapproval. Upon receiving a request for a rule to govern consideration of such a resolution, the House Rules Committee could set a time limit for debate, exclude any amendments to, and waive any points of order against the resolution. If the House adopted the rule reported by the committee, it would govern the manner in which the legislation would be considered, superseding the statutory provision. Final Congressional Action After a joint resolution is passed by both the House and the Senate, the measure would next be sent to the President. Once this legislation reaches the President, presumably he would veto it in a timely manner. Congress would then face the task of obtaining a two-thirds majority in both houses to override the veto and impose its position on the President. Congressional Use of Other Legislation Congress can also block or modify a proposed sale of major defense equipment, or defense articles and services, if it uses the regular legislative process to pass legislation prohibiting or modifying the sale or prohibiting delivery of the equipment to the recipient country. While it is generally presumed that Congress will await formal notification under Section 36(b) or 36(c) of the AECA before acting in opposition to a prospective arms sale, it is clear that a properly drafted law could block or modify an arms sale transaction at any timeâincluding before a formal AECA notification was submitted or after the 30-day AECA statutory notification period had expiredâso long as the items have not been delivered to the recipient country. Congressional use of its lawmaking power regarding arms sales is not constrained by the AECA reporting requirements. In order to prevail, however, Congress must be capable of overriding a presidential veto of this legislation, for the President would presumably veto a bill that blocked his wish to make the arms sale in question. This means, in practical terms, that to impose its view on the President, Congress must be capable of securing a two-thirds majority of those present and voting in both houses. There are potentially important practical advantages, however, to prohibiting or modifying a sale, if Congress seeks to do so, prior to the date when the formal contract with the foreign government is signedâwhich could occur at any time after the statutory 30-day period. These likely advantages include (1) limiting political damage to bilateral relations that could result from signing a sales contract and later nullifying it with a new law; and (2) avoiding financial liabilities which the U.S. Government might face for breaking a valid sales contract. The legislative vehicle designed to prohibit or modify a specific arms sale can take a variety of forms, ranging from a rider to any appropriation or authorization bill to a freestanding bill or joint resolution. The only essential features that the vehicle must have are (1) that it is legislation passed by both houses of Congress and presented to the President for his signature or veto and, (2) that it contains an express restriction on the sale and/or the delivery of military equipment (whether it applies to specific items or general categories) to a specific country or countries. Presidential Waiver of Congressional Review It is important to note that the President also has the legal authority to waive the AECA statutory review periods. For example, if the President states in the formal notification to Congress under AECA Sections 36(b)(1), 36(c)(2), 36(d)(2) that "an emergency exists" which requires the sale (or export license approval) to be made immediately "in the national security interests of the United States," the President is free to proceed with the sale without further delay. The President must provide Congress at the time of this notification a "detailed justification for his determination, including a description of the emergency circumstances" which necessitated his action and a "discussion of the national security interests involved." AECA Section 3(d) (2)(A) provides similar emergency authority with respect to retransfers of U.S.-origin major defense equipment, defense articles, or defense services. Section 614(a) of the Foreign Assistance Act of 1961 (FAA), as amended, also allows the President, among other things, to waive provisions of the AECA, the FAA, and any act authorizing or appropriating funds for use under either the AECA or FAA in order to make available, during each fiscal year, up to $750 million in cash arms sales and up to $250 million in funds. Not more than $50 million of the $250 million limitation on funds use may be made available to any single country in any fiscal year through this waiver authority unless the country is a "victim of active aggression." Not more than $500 million of cash sales (or cash sales and funds made available combined) may be provided under this waiver authority to any one country in any fiscal year. To waive the provisions of these acts related to arms sales, the President must determine and notify Congress in writing that it is "vital" to the "national security interests" of the United States to do so. Before exercising the authority granted in Section 614(a), the President must "consult with" and "provide a written policy justification to" the House Foreign Affairs and the Senate Foreign Relations Committees and House and Senate Appropriations Committees. In summary, in the absence of a strong majority in both houses of Congress supporting legislation to block or modify a prospective arms sale, the practical and procedural obstacles to passing such a lawâwhether a freestanding measure or one within the AECA frameworkâare great. Even if Congress can pass the requisite legislation to work its will on an arms sale, the President need only veto it and secure the support of one-third plus one of the Members of either the Senate or the House to have the veto sustained and permit the sale. It should be noted that Congress has never successfully blocked a proposed arms sale by use of a joint resolution of disapproval, although it has come close to doing so (see section below for selected examples). Nevertheless, Congress hasâby expressing strong opposition to prospective arms sales, during consultations with the executive branchâaffected the timing and the composition of some arms sales, and may have dissuaded the President from formally proposing certain arms sales. 2019 Sales to Jordan, Saudi Arabia, and the United Arab Emirates On May 24, 2019, Secretary of State Michael Pompeo stated that he had directed the State Department "to complete immediately the formal notification of 22 pending arms transfers" to Jordan, Saudi Arabia, and the United Arab Emirates. In a determination to Congress, Pompeo invoked the AECA Section 36 emergency provisions described above. The transfers included a variety of defense articles and services, as well as an agreement to coproduce and manufacture components of Paveway precision-guided munitions in Saudi Arabia. On June 20, 2019, the Senate passed S.J.Res. 36 , which prohibited both the Paveway coproduction agreement described above and the transfer of additional such munitions, and S.J.Res. 38 , which prohibited transfers of "defense articles, defense services, and technical data to support the manufacture of the Aurora Fuzing System for the Paveway IV Precision Guided Bomb Program." The same day, the Senate passed en bloc another 20 resolutions of disapproval prohibiting the remaining notified transfers. The House passed S.J.Res. 36 and S.J.Res. 38 on July 17, 2019. The same day, the House also passed S.J.Res. 37 , which prohibited the transfer to the UAE of "defense articles, defense services, and technical data to support the integration, operation, training, testing, repair, and operational level maintenance" of the Maverick AGM-65 air-to-surface guided missile and several Paveway systems for use on a number of Emirati-operated aircraft. The resolution also prohibited the transfer of a number of Paveway munitions to the UAE. President Donald Trump vetoed the three bills on July 24. A July 29 Senate vote failed to override these vetoes. Examples of AECA Resolutions of Disapproval On October 14, 1981, the House adopted a resolution ( H.Con.Res. 194 ) objecting to President Reagan's proposed sale to Saudi Arabia of E-3A airborne warning and control system (AWACS) aircraft, Sidewinder missiles, Boeing 707 refueling aircraft, and defense articles and services related to F-15 aircraft. An October 28, 1981, Senate vote on identical legislation failed, however, after President Reagan made a series of written commitments to Congress regarding the proposed sale. Congress later enacted legislation requiring the President to certify that the commitments made in 1981 regarding the proposed sale had been met prior to the delivery of the AWACS planes (Section 127 of the International Security and Development Cooperation Act of 1985; P.L. 99-83 ). On April 8, 1986, President Ronald Reagan formally proposed the sale to Saudi Arabia of 1,700 Sidewinder missiles, 100 Harpoon missiles, 200 Stinger missile launchers, and 600 Stinger missile reloads. On May 6, 1986, the Senate passed legislation to block these sales ( S.J.Res. 316 ) by a vote of 73-22. The House concurred with the Senate action on May 7, 1986, by passing H.J.Res. 589 by a vote of 356-62. The House then passed S.J.Res. 316 by a voice vote and (in lieu of H.J.Res. 589 ) sent it to the President. On May 21, 1986, President Reagan vetoed S.J.Res. 316 . But, in a letter that day to then-Senate Majority Leader Robert Dole, President Reagan said he would not include the controversial Stinger missiles and launchers in the sales proposal. On June 5, 1986, the Senate, by a 66-34 vote, sustained the President's veto of S.J.Res. 316 , and the sale of the Sidewinder and Harpoon missiles to Saudi Arabia proceeded. More recently, on March 10, 2016, the Senate Foreign Relations Committee rejected a motion to discharge a joint resolution ( S.J.Res. 31 ) prohibiting the sale of several defense articles, particularly eight F-16 Block 52 aircraft. H.J.Res. 82 was the House companion bill. On May 5, 2016, a State Department spokesperson, noting congressional objections to using Foreign Military Financing funds for the aircraft, told reporters that the United States had "told the Pakistanis that they should put forward national funds for the purchase." In late May, the U.S. offer expired after Islamabad failed to submit a letter of acceptance by the required deadline. On June 13, 2017, the Senate voted to reject a motion to discharge from the Senate Foreign Relations Committee a joint resolution ( S.J.Res. 42 ) prohibiting certain proposed defense exports to Saudi Arabia, such as "technical data, hardware, and defense services" to support the Royal Saudi Air Force's deployment of the Joint Direct Attack Munition and integration of the FMU-152A/B JPB Fuze System into several warhead types. The bill also would have prohibited the transfer of "defense articles, defense services, and technical data to support the assembly, modification, testing, training, operation, maintenance, and integration" of certain precision guided munitions for the certain Royal Saudi Air Force planes. H.J.Res 102 was the House companion bill. Summary:	null	96	24,273	24,275	24,275	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Congressional Notification Requirements This report reviews the process and procedures that currently apply to congressional consideration of foreign arms sales proposed by the President. This includes consideration of proposals to sell major defense equipment, defense articles and services, or the retransfer to other states of such military items. In general, the executive branch, after complying with the terms of applicable U.S. law, principally contained in the Arms Export Control Act (AECA) (P.L. 90-629, 82 Stat. 1320), is free to proceed with an arms sales proposal unless Congress passes legislation prohibiting or modifying the proposed sale. The President has the obligation under the law to submit the arms sale proposal to Congress, but only after he has determined that he is prepared to proceed with any such notifiable arms sales transaction. The Department of State (on behalf of the President) submits a preliminary or informal notification of a prospective major arms sale 20 calendar days before the executive branch takes further formal action. This informal notification is provided to the committees of primary jurisdiction for arms sales issues. In the Senate, this is the Senate Foreign Relations Committee; in the House, it is the Foreign Affairs Committee. It has been the practice for such informal notifications to be made for arms sales cases that would have to be formally notified to Congress under the provisions of Section 36(b) of the AECA. The informal notification practice stemmed from a February 18, 1976, letter from the Department of Defense making a nonstatutory commitment to give Congress these preliminary classified notifications. Beginning in 2012, the State Department implemented a new informal notification process, which the department calls a "tiered review," in which the relevant committees are notified between 20 and 40 calendar days before receiving formal notification, depending on the system and destination in question. During June 2017 testimony, Acting Assistant Secretary of State Tina Kaidanow described this process as Congressional review period during which the Committees can ask questions or raise concerns prior to the Department of State initiating formal notification. The purpose is to provide Congress the opportunity to raise concerns, and have these concerns addressed, in a confidential process with the Administration, so that our bilateral relationship with the country in question is protected during this process. If a committee "raises significant concerns about a sale or [export] license," the State Department "will typically extend the review period until we can resolve those concerns," Kaidanow explained. Under Section 36(b) of the AECA, Congress must be formally notified 30 calendar days before the Administration can take the final steps to conclude a government-to-government foreign military sale of major defense equipment valued at $14 million or more, defense articles or services valued at $50 million or more, or design and construction services valued at $200 million or more. In the case of such sales to NATO member states, NATO, Japan, Australia, South Korea, Israel, or New Zealand, Congress must be formally notified 15 calendar days before the Administration can proceed with the sale. However, the prior notice threshold values are higher for NATO members, Japan, Australia, South Korea, Israel, or New Zealand. These higher thresholds are $25 million for the sale, enhancement, or upgrading of major defense equipment; $100 million for the sale, enhancement, or upgrading of defense articles and defense services; and $300 million for the sale, enhancement, or upgrading of design and construction services, so long as such sales to these countries do not include or involve sales to a country outside of this group of states. Section 36(i) requires the President to notify both the Senate Foreign Relations Committee and House Foreign Affairs Committee at least 30 days in advance of a pending shipment of defense articles subject to the 36(b) requirements if the chairman and ranking member of either committee request such notification. Certain articles or services listed on the Missile Technology Control Regime are subject to a variety of additional reporting requirements. Commercially licensed arms sales also must be formally notified to Congress 30 calendar days before the export license is issued if they involve the sale of major defense equipment valued at $14 million or more, or defense articles or services valued at $50 million or more (Section 36(c) AECA). In the case of such sales to NATO member states, NATO, Japan, Australia, South Korea, Israel, or New Zealand, Congress must be formally notified 15 calendar days before the Administration can proceed with such a sale. However, the prior notice threshold values are higher for sales to NATO members, Japan, Australia, South Korea, Israel, or New Zealand, specifically: $25 million for the sale, enhancement, or upgrading of major defense equipment; $100 million for the sale, enhancement, or upgrading of defense articles and defense services; and $300 million for the sale, enhancement, or upgrading of design and construction services, so long as such sales to these countries do not include or involve sales to a country outside of this group of states. Furthermore, commercially licensed arms sales of firearms (which are on category I of the United States Munitions List) valued at $1 million or more must also be formally notified to Congress for review 30 days prior to the license for export being approved (15 days prior notice is required for proposed licenses for sales to NATO members, Japan, Australia, South Korea, Israel, or New Zealand). Section 36(b)(5)(A) contains a reporting requirement for defense articles or equipment items whose technology or capability has, prior to delivery, been "enhanced or upgraded from the level of sensitivity or capability described" in the original congressional notification. For such exports, the President must submit a report to the relevant committees at least 45 days before the exports' delivery that describes the enhancement or upgrade and provides "a detailed justification for such enhancement or upgrade." This requirement applies for 10 years after the Administration has notified Congress of the export. According to Section 36(b)(5)(C), the Administration must, in the case of upgrades or enhancements meeting certain value thresholds, submit a new notification to Congress and the export will be considered "as if it were a separate letter of offer ... subject to all of the requirements, restrictions, and conditions set forth in this subsection." The threshold values are higher for sales to NATO members, Japan, Australia, South Korea, Israel, or New Zealand. A congressional recess or adjournment does not stop the 30 calendar-day statutory review period. It should be emphasized that after Congress receives a statutory notification required under Sections 36(b) or 36(c) of the AECA, for example, and 30 calendar days elapse without Congress having blocked the sale, the executive branch is free to proceed with the sales process. This fact does not mean necessarily that the executive branch and the prospective arms purchaser will sign a sales contract and that the items will be transferred on the 31 st day after the statutory notification of the proposal has been made. It would, however, be legal to do so at that time. Congressional Disapproval by Joint Resolution Although Congress has more than one legislative option it can use to block or modify an arms sale, one option explicitly set out in law for blocking a proposed arms sale is the use of a joint resolution of disapproval as provided for in Section 36(b) of the AECA. Under that law, the formal notification is legally required to be submitted to the chairman of the Senate Foreign Relations Committee and the Speaker of the House. The Speaker has routinely referred these notifications to the House Foreign Affairs Committee as the committee of jurisdiction. As a courtesy, the Defense Department has submitted a copy of the statutory notification to the House Foreign Affairs Committee when that notification is submitted to the Speaker of the House. Under this option, after receiving a statutory Section 36(b) notification from the executive branch, opponents of the arms sale would introduce joint resolutions in the House and Senate drafted so as to forbid by law the sale of the items specified in the formal sale notification(s) submitted to Congress. If no Member introduces such a measure, the AECA's provisions expediting congressional action, discussed below, do not take effect. The next step would be committee hearings in both houses on the arms sale proposal. If a majority of either the House or the Senate committee supported the joint resolution of disapproval, they would report it to their respective chamber in accordance with its rules. Following this, efforts would be made to seek floor consideration of the resolution. Senate Procedures At this point, it is important to take note of procedures crafted to expedite the consideration of arms sales resolutions of disapproval. Since 1976, Section 36(b)(2) of the AECA has stipulated that consideration of any resolution of disapproval in the Senate under Section 36(b)(1) of the AECA shall be "in accordance with the provisions of Section 601(b) of the International Security Assistance and Arms Export Control Act of 1976" ( P.L. 94-329 , 90 Stat. 729). Since 1980, this stipulation has also applied to resolutions of disapproval in the Senate relating to commercially licensed arms sales under Section 36(c)(1) of the AECA. The purpose of Section 601(b) was to establish rules to facilitate timely consideration of any resolution of disapproval in the Senate. The rules set forth in Section 601(b) supersede the standing rules of the Senate and include the following: Give the committee with jurisdiction [the Senate Foreign Relations Committee] 10 calendar days from the date a resolution of disapproval is referred to it to report back to the Senate its recommendation on any such resolution (certain adjournment periods are excluded from computation of the 10 days); Make it in order for a Senator favoring a disapproval resolution to move to discharge the committee from further consideration of the matter if the committee fails to report back to the Senate by the end of the 10 calendar days it is entitled to review the resolution (the AECA expressly permits a discharge motion after 5 calendar days for sales to NATO, NATO countries, Japan, Australia, South Korea, Israel, and New Zealand); Make the discharge motion privileged, limit floor debate on the motion to one hour, and preclude efforts to amend or to reconsider the vote on such a motion; Make the motion to proceed to consider a resolution of disapproval privileged and preclude efforts to amend or to reconsider the vote on such motion; Limit the overall time for debate on the resolution of disapproval to 10 hours and preclude efforts to amend or recommit the resolution of disapproval; Limit the time (one hour) to be used in connection with any debatable motion or appeal; provide that a motion to further limit debate on a resolution of disapproval, debatable motion, or appeal is not debatable. The Senate is constitutionally empowered to amend its rules or to effect a rule change at any time. The fact that an existing rule is in Section 601 of the International Security Assistance and Arms Export Control Act of 1976 is not an obstacle to changing it by Senate action alone should the Senate seek to do so. House Floor Procedures12 The House of Representatives is directed by Sections 36(b)(3) and 36(c)(3)(B) of the AECA to consider a motion to proceed to the consideration of a joint resolution disapproving an arms sale reported to it by the appropriate House committee as "highly privileged." Generally, this means that the resolution will be given precedence over most other legislative business of the House, and may be called up on the floor without a special rule reported by the Rules Committee. Unlike for the Senate, however, the AECA contains no provision for discharge of the House committee if it does not report on the joint resolution. If reported and called up, the measure will be considered in the Committee of the Whole, meaning that amendments can be offered under the "five-minute rule." Nevertheless, amendments to joint resolutions disapproving arms sales have apparently never been offered in the House. The Rules Committee usually sets the framework for floor consideration of major legislation in the House of Representatives, however, and could do so for a joint resolution of disapproval. Upon receiving a request for a rule to govern consideration of such a resolution, the House Rules Committee could set a time limit for debate, exclude any amendments to, and waive any points of order against the resolution. If the House adopted the rule reported by the committee, it would govern the manner in which the legislation would be considered, superseding the statutory provision. Final Congressional Action After a joint resolution is passed by both the House and the Senate, the measure would next be sent to the President. Once this legislation reaches the President, presumably he would veto it in a timely manner. Congress would then face the task of obtaining a two-thirds majority in both houses to override the veto and impose its position on the President. Congressional Use of Other Legislation Congress can also block or modify a proposed sale of major defense equipment, or defense articles and services, if it uses the regular legislative process to pass legislation prohibiting or modifying the sale or prohibiting delivery of the equipment to the recipient country. While it is generally presumed that Congress will await formal notification under Section 36(b) or 36(c) of the AECA before acting in opposition to a prospective arms sale, it is clear that a properly drafted law could block or modify an arms sale transaction at any timeâincluding before a formal AECA notification was submitted or after the 30-day AECA statutory notification period had expiredâso long as the items have not been delivered to the recipient country. Congressional use of its lawmaking power regarding arms sales is not constrained by the AECA reporting requirements. In order to prevail, however, Congress must be capable of overriding a presidential veto of this legislation, for the President would presumably veto a bill that blocked his wish to make the arms sale in question. This means, in practical terms, that to impose its view on the President, Congress must be capable of securing a two-thirds majority of those present and voting in both houses. There are potentially important practical advantages, however, to prohibiting or modifying a sale, if Congress seeks to do so, prior to the date when the formal contract with the foreign government is signedâwhich could occur at any time after the statutory 30-day period. These likely advantages include (1) limiting political damage to bilateral relations that could result from signing a sales contract and later nullifying it with a new law; and (2) avoiding financial liabilities which the U.S. Government might face for breaking a valid sales contract. The legislative vehicle designed to prohibit or modify a specific arms sale can take a variety of forms, ranging from a rider to any appropriation or authorization bill to a freestanding bill or joint resolution. The only essential features that the vehicle must have are (1) that it is legislation passed by both houses of Congress and presented to the President for his signature or veto and, (2) that it contains an express restriction on the sale and/or the delivery of military equipment (whether it applies to specific items or general categories) to a specific country or countries. Presidential Waiver of Congressional Review It is important to note that the President also has the legal authority to waive the AECA statutory review periods. For example, if the President states in the formal notification to Congress under AECA Sections 36(b)(1), 36(c)(2), 36(d)(2) that "an emergency exists" which requires the sale (or export license approval) to be made immediately "in the national security interests of the United States," the President is free to proceed with the sale without further delay. The President must provide Congress at the time of this notification a "detailed justification for his determination, including a description of the emergency circumstances" which necessitated his action and a "discussion of the national security interests involved." AECA Section 3(d) (2)(A) provides similar emergency authority with respect to retransfers of U.S.-origin major defense equipment, defense articles, or defense services. Section 614(a) of the Foreign Assistance Act of 1961 (FAA), as amended, also allows the President, among other things, to waive provisions of the AECA, the FAA, and any act authorizing or appropriating funds for use under either the AECA or FAA in order to make available, during each fiscal year, up to $750 million in cash arms sales and up to $250 million in funds. Not more than $50 million of the $250 million limitation on funds use may be made available to any single country in any fiscal year through this waiver authority unless the country is a "victim of active aggression." Not more than $500 million of cash sales (or cash sales and funds made available combined) may be provided under this waiver authority to any one country in any fiscal year. To waive the provisions of these acts related to arms sales, the President must determine and notify Congress in writing that it is "vital" to the "national security interests" of the United States to do so. Before exercising the authority granted in Section 614(a), the President must "consult with" and "provide a written policy justification to" the House Foreign Affairs and the Senate Foreign Relations Committees and House and Senate Appropriations Committees. In summary, in the absence of a strong majority in both houses of Congress supporting legislation to block or modify a prospective arms sale, the practical and procedural obstacles to passing such a lawâwhether a freestanding measure or one within the AECA frameworkâare great. Even if Congress can pass the requisite legislation to work its will on an arms sale, the President need only veto it and secure the support of one-third plus one of the Members of either the Senate or the House to have the veto sustained and permit the sale. It should be noted that Congress has never successfully blocked a proposed arms sale by use of a joint resolution of disapproval, although it has come close to doing so (see section below for selected examples). Nevertheless, Congress hasâby expressing strong opposition to prospective arms sales, during consultations with the executive branchâaffected the timing and the composition of some arms sales, and may have dissuaded the President from formally proposing certain arms sales. 2019 Sales to Jordan, Saudi Arabia, and the United Arab Emirates On May 24, 2019, Secretary of State Michael Pompeo stated that he had directed the State Department "to complete immediately the formal notification of 22 pending arms transfers" to Jordan, Saudi Arabia, and the United Arab Emirates. In a determination to Congress, Pompeo invoked the AECA Section 36 emergency provisions described above. The transfers included a variety of defense articles and services, as well as an agreement to coproduce and manufacture components of Paveway precision-guided munitions in Saudi Arabia. On June 20, 2019, the Senate passed S.J.Res. 36 , which prohibited both the Paveway coproduction agreement described above and the transfer of additional such munitions, and S.J.Res. 38 , which prohibited transfers of "defense articles, defense services, and technical data to support the manufacture of the Aurora Fuzing System for the Paveway IV Precision Guided Bomb Program." The same day, the Senate passed en bloc another 20 resolutions of disapproval prohibiting the remaining notified transfers. The House passed S.J.Res. 36 and S.J.Res. 38 on July 17, 2019. The same day, the House also passed S.J.Res. 37 , which prohibited the transfer to the UAE of "defense articles, defense services, and technical data to support the integration, operation, training, testing, repair, and operational level maintenance" of the Maverick AGM-65 air-to-surface guided missile and several Paveway systems for use on a number of Emirati-operated aircraft. The resolution also prohibited the transfer of a number of Paveway munitions to the UAE. President Donald Trump vetoed the three bills on July 24. A July 29 Senate vote failed to override these vetoes. Examples of AECA Resolutions of Disapproval On October 14, 1981, the House adopted a resolution ( H.Con.Res. 194 ) objecting to President Reagan's proposed sale to Saudi Arabia of E-3A airborne warning and control system (AWACS) aircraft, Sidewinder missiles, Boeing 707 refueling aircraft, and defense articles and services related to F-15 aircraft. An October 28, 1981, Senate vote on identical legislation failed, however, after President Reagan made a series of written commitments to Congress regarding the proposed sale. Congress later enacted legislation requiring the President to certify that the commitments made in 1981 regarding the proposed sale had been met prior to the delivery of the AWACS planes (Section 127 of the International Security and Development Cooperation Act of 1985; P.L. 99-83 ). On April 8, 1986, President Ronald Reagan formally proposed the sale to Saudi Arabia of 1,700 Sidewinder missiles, 100 Harpoon missiles, 200 Stinger missile launchers, and 600 Stinger missile reloads. On May 6, 1986, the Senate passed legislation to block these sales ( S.J.Res. 316 ) by a vote of 73-22. The House concurred with the Senate action on May 7, 1986, by passing H.J.Res. 589 by a vote of 356-62. The House then passed S.J.Res. 316 by a voice vote and (in lieu of H.J.Res. 589 ) sent it to the President. On May 21, 1986, President Reagan vetoed S.J.Res. 316 . But, in a letter that day to then-Senate Majority Leader Robert Dole, President Reagan said he would not include the controversial Stinger missiles and launchers in the sales proposal. On June 5, 1986, the Senate, by a 66-34 vote, sustained the President's veto of S.J.Res. 316 , and the sale of the Sidewinder and Harpoon missiles to Saudi Arabia proceeded. More recently, on March 10, 2016, the Senate Foreign Relations Committee rejected a motion to discharge a joint resolution ( S.J.Res. 31 ) prohibiting the sale of several defense articles, particularly eight F-16 Block 52 aircraft. H.J.Res. 82 was the House companion bill. On May 5, 2016, a State Department spokesperson, noting congressional objections to using Foreign Military Financing funds for the aircraft, told reporters that the United States had "told the Pakistanis that they should put forward national funds for the purchase." In late May, the U.S. offer expired after Islamabad failed to submit a letter of acceptance by the required deadline. On June 13, 2017, the Senate voted to reject a motion to discharge from the Senate Foreign Relations Committee a joint resolution ( S.J.Res. 42 ) prohibiting certain proposed defense exports to Saudi Arabia, such as "technical data, hardware, and defense services" to support the Royal Saudi Air Force's deployment of the Joint Direct Attack Munition and integration of the FMU-152A/B JPB Fuze System into several warhead types. The bill also would have prohibited the transfer of "defense articles, defense services, and technical data to support the assembly, modification, testing, training, operation, maintenance, and integration" of certain precision guided munitions for the certain Royal Saudi Air Force planes. H.J.Res 102 was the House companion bill.	Summary:	gov_report	1,024	null	36
crs_R45864	crs_R45864_0	You are given a report by a government agency. Write a one-page summary of the report. Report: T ax policy is one of several policy tools that can be used for disaster relief. At various points in time, Congress has passed legislation to provide tax relief and to support recovery following disaster incidents. Permanent tax relief provisions may take effect following qualifying disaster events. Targeted, temporary tax relief provisions can be designed to respond to specific disaster events. The Internal Revenue Code (IRC) contains a number of permanent disaster-related tax provisions. These include provisions providing that qualified disaster relief payments and certain insurance payments are excluded from income, and thus not subject to tax. Taxpayers are also able to deduct casualty losses and defer gain on involuntary conversions (an involuntary conversion occurs when property or money is received in payment for destroyed property). The Internal Revenue Service (IRS) can also provide administrative relief to taxpayers affected by disasters by delaying filing and payment deadlines, waiving underpayment of tax penalties, and waiving the 60-day requirement for retirement plan rollovers. For disasters declared after December 20, 2019, the IRS is required to postpone federal tax deadlines for 60 days. The availability of certain tax benefits is triggered by a federal disaster declaration. Before 2017, casualty losses were generally deductible. However, changes made in the 2017 tax revision (commonly referred to as the "Tax Cuts and Jobs Act" [TCJA]; P.L. 115-97 ) restrict casualty loss deductions to federally declared disasters. Temporary tax-related disaster relief measures were enacted following a number of major disasters that occurred between 2001 and 2019. The following measures addressed specific disasters: The Job Creation and Worker Assistance Act of 2002 (Job Creation Act; P.L. 107-147 ) responded to the terrorist attacks of September 11, 2001. The Katrina Emergency Tax Relief Act of 2005 (KETRA; P.L. 109-73 ) responded to Hurricane Katrina. The Gulf Opportunity Zone Act of 2005 (GO Zone Act; P.L. 109-135 ) responded to Hurricanes Katrina, Rita, and Wilma. The Food, Conservation, and Energy Act of 2008 (2008 Farm Bill; P.L. 110-246 ) responded to severe storms and tornadoes in Kansas in 2007. The Heartland Disaster Tax Relief Act of 2008, enacted as Title VII of Division C of P.L. 110-343 (the Heartland Act), and other provisions in P.L. 110-343 responded to severe Midwest storms in summer 2008 and Hurricane Ike and provided general disaster relief for events occurring before January 1, 2010. The Disaster Tax Relief and Airport and Airway Extension Act of 2017 (Disaster Tax Relief Act of 2017; P.L. 115-63 ) responded to Hurricanes Harvey, Irma, and Maria. The 2017 tax act ( P.L. 115-97 ; commonly referred to using the title of the bill as passed in the House, the "Tax Cuts and Jobs Act") responded to disasters occurring in 2016. The Bipartisan Budget Act of 2018 (BBA18; P.L. 115-123 ) responded to the 2017 California wildfires. The Taxpayer Certainty and Disaster Tax Relief Act of 2019 (Division Q of the Further Consolidated Appropriations Act, 2020; P.L. 116-94 ) provided relief for major disasters that generally occurred in 2018 or 2019. This report provides an overview of permanent and temporary disaster tax provisions that have been enacted in response to specific disaster events. The report also summarizes which types of temporary provisions have been used to support different disaster events. Policy considerations related to business, individual, and charitable disaster relief are also addressed. Permanent Disaster Tax Relief Provisions There are several permanent disaster tax relief provisions. In some cases, these provisions apply to any property that is destroyed or damaged due to casualty or theft. In other cases, relief is limited to property lost as a result of federally declared disasters or for disasters for which the IRS undertakes administrative actions. Additionally, as discussed further below, there are instances where these permanent relief provisions have been temporarily enhanced in response to specific disaster events. Disaster Casualty Losses Taxpayers may be able to deduct casualty losses resulting from damage to or destruction of personal property (property not connected to a trade or business). For tax years 2018 through 2025, the casualty loss deduction is limited to losses attributable to federally declared disasters. After 2025, under current law, the deduction is to be available to losses arising from any fire, storm, shipwreck, or other casualty or theft. Casualty losses are an itemized deduction. Each casualty is subject to a $100 floor, meaning that only losses in excess of $100 are deductible for each casualty. Additionally, casualty losses are deductible only to the extent that aggregate losses exceed 10% of the taxpayer's adjusted gross income (AGI). Only casualty losses not compensated for by insurance or otherwise can be deducted. Involuntary Conversions An involuntary conversion occurs when property is destroyed, stolen, condemned, or disposed of under threat of condemnation, and the owner of the property receives money or payment for the property, such as an insurance payment. An involuntary conversion can also be viewed as a forced sale of property. The IRC allows taxpayers to defer recognizing a gain on property that is involuntarily converted. The replacement periodâthe time within which a taxpayer must replace converted property to receive complete deferralâis two years (three years for condemned business property). For a taxpayer's principal residence and its contents, the replacement period for an involuntary conversion stemming from a federally declared disaster is four years. Taxpayers whose principal residence or any of its contents are involuntarily converted as a result of a federally declared disaster qualify for additional special rules. First, gain realized from the receipt of insurance proceeds for unscheduled personal property (property in the home that is not listed as being covered under the insurance policy) is not recognized. Second, any other insurance proceeds received for the residence or its contents are treated as a common fund. If the fund is used to purchase property that is similar or related in service or use to the converted residence or its contents, then the owner may elect to recognize gain only to the extent that the common fund exceeds the cost of the replacement property. If a taxpayer's business property is involuntarily converted as a result of a federally declared disaster, then the taxpayer is not required to replace it with property that is similar or related in service to the original property in order to avoid having to recognize gain on the conversion, as long as the replacement property is still held for a type of business purpose. Disaster Relief for Low-Income Housing Credit The low-income housing tax credit allows owners of qualified residential rental property to claim a credit over a 10-year period that is based on the costs of constructing, rehabilitating, or acquiring the building attributable to low-income units. Owners may claim a credit based on 130% of the project's costs if the housing is in a low-income or difficult development area. Owners must be allocated this credit by a state. Each state is limited in the amount of credits it may allocate to the greater of $2,000,000 or $1.75 multiplied by the state's population (both figures are adjusted for inflation and are $3,166,875 and $2.75625, respectively, for 2019), with adjustments. Owners of low-income housing tax credit (LIHTC) properties are eligible for relief from certain requirements of the program if the property is located in a major disaster area. Specifically, property owners are provided relief from credit recapture, carryover allocation rules, and income certifications for displaced households temporarily housed in an LIHTC unit. Property owners may also qualify for additional credits for rehabilitation expenditures, and, for severely damaged buildings in the first year of the credit period, the allocation of credits may either be treated as having been returned, or the first year of the credit period can be extended. State LIHTC allocating agencies are eligible for relief from compliance monitoring under the same IRS guidance. Additionally, households are eligible to occupy an LIHTC unit without being subject to the program's income limits if their principal residence was located in a major disaster area. Exclusion for Disaster Assistance Payments to Individuals Taxpayers can exclude from income qualified disaster relief and disaster mitigation payments. Excludable relief payments include payments for expenses that are not compensated for by insurance (or otherwise compensated). Excludable relief payments can include personal, family, living, or funeral expenses incurred as a result of the disaster; payments for home repairs or to replace damaged and destroyed contents; payments by a transportation provider for injuries or deaths resulting from a disaster; and payments from governments (or similar entities) for general welfare when disaster relief is warranted. Qualified disaster mitigation payments include amounts paid under the Robert T. Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act (as in effect on April 15, 2005) for hazard mitigation. Exclusion for Insurance Living Expense Payments Taxpayers whose principal residence is damaged in a disaster (including a fire, storm, or other casualty) can exclude insurance reimbursements for living expenses while temporarily occupying another residence from income. This exclusion also applies to taxpayers who are denied access to their home by government authorities due to the threat of casualty or disaster. IRS Administrative Relief The IRS is authorized to postpone any federal tax deadline, including deadlines for filing returns, paying taxes, or claiming refunds, for up to one year for taxpayers affected by federally declared disasters. The IRS may also postpone certain Individual Retirement Account (IRA) deadlines. Specifically, the IRS can extend the 60-day period for plan participants to deposit rollover retirement plan distributions to another qualified plan or IRA. Additionally, the IRS may extend the time for a qualified plan to make a required minimum distribution. The IRS is required to postpone federal tax deadlines for 60 days for disasters declared after December 20, 2019. Taxpayers for whom deadlines are automatically postponed include (1) those whose principal residence is in a disaster area; (2) those whose principal place of business is in a disaster area; (3) individuals who are relief workers assisting in a disaster area; (4) individuals whose tax records are maintained in a disaster area; (5) any individual visiting a disaster area who was killed or injured as a result of the disaster; or (6) spouses filing a joint return with any person described in (1) to (5). The IRS is also authorized to waive underpayment penalties when a casualty, disaster, or other unusual circumstances have made it such that the imposition of a penalty would be against equity and good conscience. Past Temporary Disaster-Relief Provisions At times, Congress has chosen to use tax policy to provide temporary relief and support following disaster incidents. Temporary and event-specific disaster tax policy has been enacted following many major disaster events in recent years. However, temporary or targeted tax relief has not been enacted following all major disaster events. For example, no temporary or targeted disaster tax relief was enacted in response to Hurricane Irene in 2011 or Hurricane Sandy in 2012. The specific tax relief provisions enacted to respond to past disaster events are summarized in Table 3 and Table 4 . The following discussion provides additional information on these provisions. Tax provisions that have been used to respond to disasters most recently are discussed first . Temporary Provisions Enacted to Respond to Recent Disasters The disaster tax relief packages enacted in 2017 to respond to Hurricanes Harvey, Irma, and Maria; in 2018 to respond to the 2017 California wildfires; and in 2019 to respond to disasters that occurred in 2018 and 2019 contained the same five provisions: (1) an enhanced casualty loss deduction; (2) expanded access to retirement plan funds; (3) increased limits on charitable deductions; (4) employee retention tax credits; and (5) EITC/CTC credit computation look-back rules. Enhanced casualty loss deductions were allowed for losses associated with any federally declared disaster occurring in 2016 and 2017, and access to retirement plan funds was enhanced for 2016 disasters. Certain areas of California that were affected by natural disasters in 2017 and 2018 will receive additional LIHTC allocations in 2020. Additionally, disaster tax relief for 2018 and 2019 disasters will also be available in U.S. possessions. Enhanced Casualty Loss Deduction An enhanced casualty loss deduction has been made available for losses attributable to certain disasters or for losses occurring during certain periods of time. Most recently, an enhanced casualty loss deduction was provided for 2018 and 2019 disasters in the Taxpayer Certainty and Disaster Tax Relief Act of 2019 (Division Q of P.L. 116-94 ). Before that, an enhanced casualty loss deduction was provided for California wildfires in the Bipartisan Budget Act of 2018 (BBA18; P.L. 115-123 ); any disaster-related casualty loss in calendar years 2016 or 2017 in the 2017 tax act, commonly called the "Tax Cuts and Jobs Act" (TCJA; P.L. 115-97 ); and Hurricanes Harvey, Irma, and Maria in the Disaster Tax Relief and Airport and Airway Extension Act of 2017 ( P.L. 115-63 ). The enhancements (1) waive the 10% of AGI floor; (2) increase the $100 floor for each casualty to $500; and (3) allow taxpayers not itemizing deductions to add the deduction to their standard deduction. Generally, casualty loss deductions are claimed in the year of the loss. However, a loss in a federally declared disaster area may be deducted on the prior year's tax return. A similar provision was enacted in response to several previous disasters. Retirement Plan Distributions The Disaster Tax Relief Act of 2019, BBA18, TCJA, and the Disaster Tax Relief Act of 2017 all provided tax relief relating to retirement plan distributions. First, each act waived the 10% penalty that would otherwise apply on early withdrawals made from a qualifying retirement plan if the individual's principal place of abode was in the disaster area and the individual sustained an economic loss due to the disaster. The distributions were required to occur within a specified time frame, and the maximum amount that could be withdrawn without penalty was $100,000 or 100% of the present value of the plan participant's benefits (but not less than $10,000). Funds could be recontributed to a qualified plan over a three-year period and receive tax-free rollover treatment. Additionally, with respect to any taxable portion of the distribution, the individual could include one-third of such amount in gross income each year over the course of three tax years rather than including the entire amount on the tax return for the year of distribution. The acts increased the amount disaster victims could borrow from their retirement plans without immediate tax consequences. Under current law, the maximum amount that may be borrowed without being treated as a taxable distribution is the lesser of (1) $50,000, reduced by certain outstanding loans, or (2) the greater of $10,000 or 50% of the present value of the employee's vested benefits. For loans made during the applicable period, the acts increased this to the lesser of (1) $100,000, reduced by certain outstanding loans, or (2) the greater of $10,000 or 100% of the present value of the employee's vested benefits, as well as extending certain loan repayment dates by one year. A similar provision was enacted in response to several previous disasters. Increased Limits on Charitable Deductions Taxpayers are generally permitted to deduct contributions made to 501(c)(3) charitable organizations, subject to various limitations. Individuals may not claim a charitable deduction that exceeds 50% (temporarily increased to 60% beginning in 2018 through 2025) of their "contribution base" (adjusted gross income with certain adjustments), and corporations may not claim a deduction that exceeds 10% of their taxable income with certain adjustments. Any excess contributions may generally be carried forward for five years. The Disaster Tax Relief Act of 2019, BBA18, and the Disaster Tax Relief Act of 2017 temporarily suspended the 50% and 10% limitations for qualified contributions made for disaster relief efforts. An additional deduction is allowed for amounts by which the taxpayer's charitable contribution base exceeds the amount of all other allowable charitable contributions in the tax year. For individuals, the deduction could not exceed the amount by which the charitable contribution base exceeded other charitable contributions. For individuals, the earlier acts also suspended the overall limitation on itemized deductions for qualified contributions that was in effect through 2017. A similar provision was enacted in response to several previous disasters. Employee Retention Credit The Disaster Tax Relief Act of 2019, BBA18, and the Disaster Tax Relief Act of 2017 provided a temporary retention credit for disaster-damaged businesses that continued to pay wages to their employees who were unable to work after the disaster rendered the business inoperable. Eligible employees were those whose principal place of employment was in the applicable disaster area. The credit equaled 40% of the employee's first $6,000 in wages paid between the date the business became inoperable and the date it resumed significant operations at that location (or the end of the first calendar year, whichever came first). Wages can be those paid even if the employee provides no services for the employer, or for wages paid for services performed at a different location or before significant operations resume. This employee retention may not be for an employee during any period that the employer claims a work opportunity credit for the employee. A similar provision was enacted in response to several previous disasters. EITC/CTC Credit Computation Look-Back The Disaster Tax Relief Act of 2019 and BBA18 permitted individuals affected by 2018 and 2019 disasters or California wildfires in 2017 to elect to use their earned income from the previous year for computing the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC), instead of their disaster-year income, if previous-year income was greater than disaster-year income. The Disaster Tax Relief Act of 2017 also included this provision for those affected by Hurricanes Harvey, Irma, and Maria. This may have benefited taxpayers whose income was reduced in the year of the disaster. Taxpayers generally qualified only if they lived in the disaster zone or lived in the disaster area and the disaster caused them to be displaced from their principal place of abode. A similar provision was enacted in response to several previous disasters. Low-Income Housing Tax Credit The Disaster Tax Relief Act of 2019 increased credits available to California in 2020. Specifically, for certain areas of California that were affected by natural disasters in 2017 and 2018, the act increased California's 2020 LIHTC allocation by the lesser of the state's 2020 LIHTC allocations to buildings located in qualified 2017 and 2018 California disaster areas, or 50% of the state's combined 2017 and 2018 total LIHTC allocations. In the past, disaster relief legislation has provided additional LIHTC allocations to disaster-affected areas. The GO Zone Act temporarily increased the credits available to Alabama, Louisiana, and Mississippi for use in the GO Zone by up to $18.00 multiplied by the state's population that was located in the GO Zone prior to the date of Hurricane Katrina. It also temporarily treated the disaster zones as difficult development areas and used an alternate test for determining whether certain GO Zone projects qualified as low-income housing. The Heartland Act permitted affected states to allocate additional amounts for use in the disaster area of up to $8.00 multiplied by the state's disaster area population. Treatment of Certain U.S. Possessions Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa, and the Commonwealth of the Northern Mariana Islands are U.S. territories. Each has a local tax system with features that help determine the territory's local public finances. Guam, the U.S. Virgin Islands, and the Northern Mariana Islands are mirror code possessions, meaning these territories use the Internal Revenue Code as their territorial tax law. Puerto Rico and American Samoa are non-mirror code possessions. These two possessions have their own tax laws. The Disaster Tax Relief Act of 2019 requires payments from the U.S. Treasury to possessions for the temporary tax relief provided in the bill. Mirror code possessions will receive an amount equal to the loss in revenue by reason of the temporary disaster-related tax relief provided in the legislation. Non-mirror code possessions may receive a similar payment (a payment equal to the amount of temporary disaster tax relief that would have been provided if a mirror code had been in effect) if the possession has an approved plan for prompt distribution of payments . Temporary Tax Provisions Used to Respond to Disasters Before 2010 Provisions used to respond to 2016, 2017, 2018, and 2019 disasters were also used to respond to some disasters before 2010. Additionally, a number of other temporary tax provisions were used to respond to these pre-2010 disasters. The first time a temporary disaster tax relief package was enacted was in response to the September 11 terrorist attacks. The following sections summarize the various provisions included in temporary disaster tax relief legislation before 2010. Expensing In general, capital expenditures must be added to a property's basis rather than being expensed (i.e., deducted in the current year). IRC Section 179 provides an exception so that a business may expense the costs of certain property in the year it is placed in service. After 2018, the maximum expensing allowance is $1 million, with an investment limitation of $2.5 million (both amounts are adjusted for inflation). In the past, these thresholds have been lower. For example, in 2007, the maximum expensing allowance under Section 179 was $125,000, and the deduction decreased dollar-for-dollar as the total cost of all property the business placed in service during the year exceeded $500,000. The Heartland Act increased the Section 179 limitations by up to $100,000 and $600,000 for qualified disaster area property for federally declared disasters occurring prior to January 1, 2010. Increased expensing allowances were enacted in response to several disasters before 2007 as well. The Heartland Act also added IRC Section 198A, which permitted full expensing (subject to depreciation recapture) of qualified expenditures for the abatement or control of hazardous substances released on account of a federally declared disaster, the removal of debris or the demolition of structures on business-related real property damaged by such a disaster, and the repair of business-related property damaged by such a disaster. This provision applied only to federally declared disasters occurring prior to January 1, 2010. Net Operating Loss Carryback Under current law, a business's net operating loss (NOL) can be carried forward indefinitely. Additionally, NOLs are limited to 80% of taxable income. There is no carryback of NOLs. This treatment was enacted in the 2017 tax act ( P.L. 115-97 ). Before 2018, in general, a taxpayer's net operating loss (NOL) could be carried back and deducted in the two tax years before the NOL year, and then carried forward for up to 20 years after the NOL year. Additionally, before 2018, the carryback was extended to three years for individuals who had a loss of property arising from a casualty or theft. A three-year period also applied for small businesses and farmers for NOLs attributable to federally declared disasters. The Heartland Act provided for a five-year carryback period for qualified losses from any federally declared disaster occurring prior to January 1, 2010. For such disasters, it also suspended the alternative minimum tax (AMT) provision that generally limits NOL deductions to 90% of alternative minimum taxable income. The corporate AMT was repealed in the 2017 tax act. Bonus Depreciation For eligible property acquired and placed in service after September 27, 2017, and before January 1, 2023, businesses may claim a 100% expensing (or bonus depreciation) allowance under Section 168(k). Like expensing limitations, the bonus depreciation allowance has changed over time. The Heartland Act provided a 50% bonus depreciation provision for qualified disaster assistance property from a federally declared disaster occurring prior to January 1, 2010. However, since other legislation provided 50% bonus depreciation during this time period, the provision was probably not meaningful. With 100% bonus depreciation in effect through 2022, providing additional bonus depreciation is not currently a policy option. Mortgage Revenue Bonds Mortgage revenue bonds are tax-exempt bonds used to finance below-market-rate mortgages for low- and moderate-income homebuyers. In general, the homebuyers must not have owned a residence for the past three years, and the houses' costs may not exceed 90% of the average purchase price for the area. However, for areas that are low income or in chronic economic distress, the three-year restriction does not apply, and the purchase price limitation is increased to 110%. For individuals whose homes were declared unsafe or ordered to be demolished or relocated due to a federally declared disaster occurring prior to January 1, 2010, the Heartland Act waived the three-year restriction and increased the purchase price limitation from 90% to 110%. It also permitted individuals whose homes were damaged by the disaster to treat the amount of owner financing provided for home repair and construction as a qualified rehabilitation loan, limited to $150,000 (the amount is generally limited to $15,000), which had the effect of waiving the three-year requirement for such financing. The GO Zone Act and KETRA contained similar provisions. In the Heartland Act, the maximum amount of bonds each state could issue was $1,000 multiplied by that state's population in the disaster area, and need-based prioritization for state allocations was established. The GO Zone Act also expanded qualified private activity bond issuances for mortgage revenue bonds in disaster areas. The Go Zone Act added $2,500 per person in the federally declared Katrina disaster areas in which the residents qualify for individual and public assistance. The increased capacity added approximately $2.2 billion for Alabama, $7.8 billion for Louisiana, and $4.8 billion for Mississippi in aggregate bonds over the subsequent five years through 2010. Expensing of Environmental Remediation Costs ("Brownfields") Capital expenditures must generally be added to the property's basis rather than being expensed (i.e., deducted in the current year). IRC Section 198 provided an exception by allowing taxpayers to expense any qualifying environmental remediation costs paid or incurred prior to January 1, 2012, for the abatement or control of hazardous substances at a qualified contaminated site. Unlike the other provisions discussed in this report, Section 198 is not limited to federally declared disasters or specific disasters. The provision was enacted as a temporary one in the Taxpayer Relief Act of 1997 ( P.L. 105-34 ) and was extended a number of times before expiring at the end of 2011. The Heartland Act was among those laws that temporarily extended Section 198. The GO Zone Act had also extended the provision, but only for those costs for contaminated sites in the GO Zone, and treated petroleum products as a hazardous substance for the purposes of environmental remediation. Charitable Contributions of Inventory Before 2005, donors of food inventory that were not C corporations could only claim a charitable deduction equal to their basis in the inventory (typically, its cost). C corporations were allowed an enhanced deduction, which was the lesser of (1) the basis plus 50% of the property's appreciated value, or (2) two times basis. KETRA provided special rules that allowed all donors of wholesome food inventory to benefit from the enhanced deduction and allowed C corporations to claim an enhanced deduction for donations of book inventory to public schools. Neither provision was limited to donations related to the hurricane, but both were originally set to expire on December 31, 2005. The provisions have been extended several times since then, including by the Heartland Act (as part of its tax extenders package, rather than its disaster relief provisions). The enhanced deduction for charitable contributions of food inventory was made permanent in the Protecting Americans from Tax Hikes Act of 2015, enacted as Division Q in the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ). The enhanced deduction for book inventory expired as scheduled at the end of 2011. Involuntary Conversions In addition to the general treatment of involuntary conversions (discussed above), the Job Creation Act, KETRA, the 2008 Farm Bill, and the Heartland Act increased the two-year time period to purchase the replacement property to five years for property in the applicable disaster area so long as substantially all of the use of the replacement property occurred in such area. Discharge of Indebtedness When all or part of a debt is forgiven, the amount of the cancellation is ordinarily included in the income of the taxpayer receiving the benefit of the discharge. However, there are several exceptions to this general rule. For example, no amount of the discharge is included in income if the cancellation is intended to be a gift or is from the discharge of student loans for the performance of qualifying services. The Mortgage Forgiveness Debt Relief Act of 2007 ( P.L. 110-142 ) temporarily excluded qualified canceled mortgage debt income that is associated with a primary residence from taxation (this provision was extended multiple times, and expired at the end of 2017). There are also certain situations in which the taxpayer may defer taxation, with the possibility of permanent exclusion, on income from the discharge of indebtedness, such as if discharge occurs when the debtor is in Title 11 bankruptcy proceedings or legally insolvent. Both KETRA and the Heartland Act included provisions that allowed victims to exclude nonbusiness debt forgiveness from income in certain conditions. Victims of Hurricane Katrina were allowed to exclude nonbusiness debt that was forgiven by a governmental agency or certain financial institutions if the discharge occurred after August 24, 2005, and before January 1, 2007. Individuals were eligible for this benefit if (1) their principal place of abode was in the core disaster area, or (2) it was in the Hurricane Katrina disaster area and they suffered an economic loss due to the hurricane. Individuals with certain tax attributes (such as basis) were required to reduce them by the amount excluded from income, which has the effect of deferring (rather than permanently eliminating) the tax on the cancelled debt. For victims with a principal place of abode in a Midwestern disaster area, the Heartland Act provided similar relief. However, if that home was in an area determined by the President to warrant only public assistance, the individual also had to have suffered an economic loss due to the severe weather. Employer-Provided Housing Both the GO Zone Act and the Heartland Act excluded the value of certain employer-provided housing, limited to $600 per month, from the employee's income and allowed the employer to claim a credit equal to 30% of that amount. Among other requirements, the employee must have had a principal residence in the applicable disaster area and have performed substantially all employment services for that employer in that area. The employer must have had a trade or business located within the applicable disaster area. Tax-Exempt Bonds Both the GO Zone Act and the Heartland Act temporarily allowed affected states to issue tax-exempt bonds to finance (1) qualified activities involving residential rental projects, nonresidential real property, and public utility property located in the disaster area; and (2) below-market rate mortgages for low- and moderate-income homebuyers. Under the GO Zone Act, the maximum amount of bonds that each state could issue was $2,500 multiplied by that state's population located in the GO Zone as determined prior to the date of Hurricane Katrina. Under the Heartland Act, the maximum amount of bonds each state could issue was capped at $1,000 multiplied by that state's population in the disaster area, and the act expressly stated that the bonds would have to be designated by the appropriate state authority on the basis of providing assistance to where it was most needed. The Job Creation Act, meanwhile, allowed New York to issue up to $8 billion (divided equally between the state and New York City) in tax-exempt bonds to finance qualified activities involving residential rental projects, nonresidential real property, and public utility property located in the disaster zone. The Job Creation Act and the GO Zone Act also allowed one additional advance refunding of qualifying bonds that were issued by those states. The GO Zone Act, the 2008 Farm Bill, and the Heartland Act allowed operators of low-income residential rental projects financed by IRC Section 142(d) bonds to rely on the representations of displaced individuals regarding their income qualifications so long as the tenancy began within six months of the displacement. Tax Credit Bonds Both the GO Zone Act and the Heartland Act permitted affected states to issue tax credit bonds to pay the principal, interest, or premiums on qualified governmental bonds or to make loans to political subdivisions to make such payments. Bondholders may claim a credit based on the product of a credit rate and the bonds' outstanding face amount. The bonds were required to be issued within a certain time period and could not have a maturity date beyond two years, among other requirements. Further, each state was capped in the amount of bonds it could issueâfor example, under the Heartland Act, the maximum amount of bonds that could be issued by states with disaster area populations of at least 2 million was $100 million; the cap was $50 million for states with disaster area populations between 1 million and 2 million; and the other states could not issue any bonds. Bonds could not be used for certain activities. Housing Exemption Both KETRA and the Heartland Act provided tax relief to those who provided free housing to those displaced by the storms. Individuals could claim additional personal exemptions of $500 each for up to four displaced people whom they housed for at least 60 consecutive days. These exemptions could be claimed in both the year of the disaster and the next year; however, no person could qualify the taxpayer for the exemption in both years. Among other requirements, the displaced person must have had a principal place of abode in the disaster area; if the home was not in the core disaster area, then the person must have been displaced due to either storm damage to the home or evacuation caused by the storm. Mileage Rate and Reimbursement Generally, individuals who use their personal vehicles for charitable purposes may claim a deduction based on the number of miles driven. The amount is set by statute at 14 cents per mile. KETRA and the Heartland Act each temporarily increased the charitable mileage rate to 70% of the standard business mileage rate if the vehicle was used for hurricane or Midwest disaster relief. The standard business mileage rate is periodically set by the IRS. In 2019, the standard mileage rate is 56 cents per mile. Additionally, both acts provided a temporary exclusion from a charitable volunteer's gross income for any qualifying mileage reimbursements received from the charity for the operating expenses of a volunteer's passenger automobile, when used for disaster relief. Treasury Authority to Make Adjustments Relating to Status KETRA, the GO Zone Act, and the Heartland Act all contained similar provisions that authorized the Treasury Secretary to make adjustments in the application of the tax laws for the tax years of the disaster and the immediate subsequent year so that temporary relocations due to the disaster did not cause taxpayers to lose any deduction or credit or to experience a change of filing status. Education Credits Individuals with eligible tuition and related expenses may claim certain higher education tax credits. Under the law existing when KETRA, the GO Zone Act, and the Heartland Act were enacted, the Hope credit was 100% of the first $1,000 of eligible expenses plus 50% of the next $1,000 of eligible expenses, both adjusted for inflation. The maximum Lifetime Learning credit is and was 20% of up to $10,000 of eligible expenses. Beginning in 2009, the partially refundable American Opportunity Tax Credit (AOTC) temporarily increased the Hope credit, allowing 100% of eligible expenses up to $2,000 plus 25% of the next $2,000 of eligible expenses. The Protecting Americans from Tax Hikes (PATH) Act (Division Q of P.L. 114-113 ) made the AOTC permanent, effectively eliminating the Hope credit. For individuals attending school in the GO Zone for 2005 and 2006, the GO Zone Act allowed certain nontuition expenses (e.g., books, equipment, and room and board) to qualify for the Hope and Lifetime Learning credits; doubled the $1,000 limitations in the Hope credit to $2,000; and increased the 20% limitation in the Lifetime Learning credit to 40%. The Heartland Act provided similar rules for students attending school in a Midwestern disaster area during 2008 or 2009. However, to take advantage of this provision for 2009, taxpayers were required to waive application of the AOTC provisions. Rehabilitation Credit Taxpayers may claim a credit equal to 10% of the qualifying expenditures to rehabilitate a qualified building or 20% of such expenditures for a certified historic structure. Both the GO Zone Act and the Heartland Act temporarily increased these percentages to 13% and 26%, respectively, for rehabilitating qualifying buildings and structures damaged by the applicable disasters. Public Utility Losses Under IRC Section 172, certain net operating losses, called specified liability losses, may be carried back for 10 years. Under IRC Section 165(i), certain disaster losses may be deducted in the year prior to the disaster. The GO Zone Act treated public utility casualty losses as a Section 172 loss. The GO Zone Act and the 2008 Farm Bill allowed public utility disaster losses to be deducted in the fifth taxable year preceding the disaster. Gulf Coast Recovery Bonds The GO Zone included provisions to encourage the Treasury Secretary to designate at least one series of bonds as Gulf Coast Recovery Bonds. The Treasury designated Series I inflation-indexed savings bonds purchased through financial institutions as "Gulf Coast Recovery Bonds." New Markets Tax Credit Under the new markets tax credit, taxpayers are allocated a credit for investments made in qualified community development entities. The credit is claimed over a period of seven years and equals the amount of the investment multiplied by a percentage: 5% for the first three years and 6% for the next four years. The credit was capped at $2 billion for 2005 and $3.5 billion for 2006 and 2007. The GO Zone Act increased the cap by $300 million for 2005 and 2006 and by $400 million for 2007, and it allocated these amounts to entities making low-income community investments in the GO Zone. Small Timber Producers Under IRC Section 194, taxpayers may expense up to $10,000 of qualifying reforestation expenditures. Under IRC Section 172, the general rule is that taxpayers may carry net operating losses back for two years. The GO Zone Act created two special rules for timber producers with less than 501 acres of timber property: it (1) increased the Section 194 limit by up to $10,000 for expenditures made for qualified timber property in the applicable disaster zones; and (2) increased the Section 172 carry back period to five years for certain losses attributable to timber property in those zones. Work Opportunity Tax Credit Generally, businesses that hire individuals from groups with high unemployment rates or special employment needs, such as high-risk youths and veterans, may claim the work opportunity tax credit. The credit may be claimed for the wages of up to $6,000 that were paid during the employee's first year. For an employee who worked at least 400 hours, the credit equals 40% of his or her wagesâthus, the maximum credit is $2,400. KETRA allowed businesses to claim the work opportunity credit on wages paid to certain employees hired after Hurricane Katrina. Eligible employees were those who had a principal place of abode in the core disaster area and either (1) were hired during the two-year period beginning August 28, 2005, for a position in the area, or (2) were displaced by the hurricane and hired after August 27, 2005, and before January 1, 2006. Congress later extended the WOTC's expiration from August 28, 2007, to August 28, 2009, for firms who hire "Hurricane Katrina employees" to work in the core disaster area (see the Tax Extenders and Alternative Minimum Tax Relief Act of 2008 in P.L. 110-343 ). The Job Creation Act provided similar treatment for New York Liberty Zone business employees and certain employees outside the zone. Leasehold Improvements For purposes of depreciation, the Job Creation Act generally shortened the recovery period for leasehold improvement property to five years for qualifying property located in the New York disaster zone. Economic and Policy Considerations57 Tax policy for disaster relief might be motivated by multiple objectives. One objective could be distributional or relief-oriented. Tax policy could be designed to provide additional resources to businesses or individuals who experienced an uncompensated disaster loss. This relief could be targeted toward the low-income, although there are limitations when using tax policy to address low-income individuals and businesses. Tax policy can also be used to encourage investment in disaster-affected areas. Absent government intervention, some level of private rebuilding will occur. A policy question, however, is whether this private building is sufficient, or if there are other barriers to investment in the disaster-affected region that call for government intervention. When investment subsidies are provided, there is the question of how much new investment is supported relative to how much investment is subsidized that would have occurred absent the subsidy. There are also challenges associated with identifying the disaster area for the purposes of providing tax relief. In some cases, relief has been provided to a certain geographic area. In other cases, relief has been tied to a federal disaster declaration or provided only when individual assistance or individual and public assistance is provided. Narrowly defined geographic areas can limit tax benefits to those most likely to be harmed by the disaster, but can exclude some disaster victims. The following sections discuss considerations by examining instances in which disaster relief was provided through the tax code for businesses and individuals, as well as through tax policy designed to support disaster-related charitable giving. Providing Disaster Tax Relief to Businesses For businesses, hurricanes like Katrina, Maria, Irma, and Harvey caused unprecedented property and earnings losses. Employee displacement can create labor market challenges that persist over time. Further, longer-term supply chain disruptions can make it difficult for businesses to resume operations after initial clean-up efforts are complete. In the past, tax policy has been used to reduce the cost of business investment in cleanup and repairs. Bonus depreciation and enhanced expensing were used to provide disaster tax relief to businesses following several disasters before 2010. However, at present, with bonus depreciation at 100% (100% bonus depreciation is expensing), this policy tool is not readily available. Expensing allowances are higher than they have been historically, but could, if deemed necessary and under certain circumstances, be expanded further to provide additional expensing allowances in disaster areas. For instance, this could be a policy option should bonus depreciation be set at a rate of less than 100%, or eliminated altogether. An expansion to expensing for disaster-relief purposes could be accomplished through raising the expensing limit; expensing is currently allowed for investments up to $1,040,000. Expansions to net operating loss (NOL) carrybacks and lengthening of replacement periods for involuntary conversions have also been used to provide tax relief following past disasters. Under current law, there is no carryback of NOLs. Allowing an NOL carryback for disaster-related losses could provide relief for taxpayers experiencing losses who had positive tax liability in a recent tax year. Expanding the replacement period for involuntary conversions could provide more flexibility to taxpayers looking to rebuild or reestablish businesses in the disaster area. Tax policy can also be used to encourage businesses to provide employment and housing following disaster events. Employee retention credits encourage employers to continue paying employees in circumstances where the disaster affects business operations. Targeted hiring credits, such as the WOTC, can be used to provide an incentive to hire workers who were displaced by a disaster. With respect to housing, tax policy has been used to encourage employers to provide housing to their employees, as well as to support more low-income housing development in disaster-affected areas. Disaster recovery and rebuilding has also been supported following certain disasters by providing targeted tax benefits to disaster-impacted geographic zones. The New York Liberty Zone was established following the September 11 terrorist attacks. The Gulf Opportunity Zone was established following the 2005 Gulf Coast hurricanes. These zones can receive additional allocations of allocated tax credits, such as the NMTC or the LIHTC. Past disaster tax relief has also provided additional allocations of tax-exempt or tax-credit bonds in disaster-affected zones. Some have questioned the effectiveness of tax-exempt private activity bonds as a tool for disaster relief, noting that in the case of the GO Zone, areas with the most damage were less likely to have access to bonds to help finance recovery and rebuilding. Should special bond allocations be deployed in response to future disasters, there may be ways to improve the bond allocation process to better target small businesses or heavily impacted areas. Other provisions might be designed to support specific industries or sectors affected by the disaster. For example, tax provisions for small timber producers and public utilities have been included in past disaster tax legislation. Narrowly targeted tax benefits, however, might leave out disaster-affected taxpayers that suffered losses yet have business activities that differ from the sector targeted for relief. One consideration related to tax relief provisions for business is timing. The tax code is not well-suited to provide capital for cleanup, rebuilding, or recovery in the short term. Reduced tax liabilities provide a future financial benefit, but past disaster tax relief has not been designed to provide immediate access to capital that may be needed following a disaster. Another consideration related to business disaster tax relief is the potential scope of the benefit. For many business-related provisions, the benefit is limited to businesses with positive taxable income. Accelerated cost recovery, special deductions, and nonrefundable tax credits provide limited benefits to businesses with little profit or no tax liability. Businesses with limited current income or tax liability may, however, benefit from expanded NOL carrybacks. One policy question is whether certain disaster-related tax benefits are necessary or effective in achieving intended policy goals, given that much of the tax relief accrues to taxpayers who would have rebuilt without incentives. This critique raises the question of whether disaster-related tax benefits are intended to encourage certain behavior (rebuilding, for example), or primarily provide financial relief for businesses affected by the disaster. Providing Disaster Tax Relief to Individuals Tax provisions might be used to provide financial relief to individuals who have lost property, income, or both following a disaster. To provide relief for taxpayers experiencing a loss of property, Congress has enacted legislation following certain past disasters to expand the deduction for casualty losses (beyond what is available under the permanent provision). Relief has been provided to taxpayers experiencing a loss of income by providing enhanced access to retirement plan funds or by using look-back rules for computing refundable tax credits. Several past disaster relief packages have also included provisions to support providing housing to affected individuals. There are limits to using tax policy to provide disaster relief to low- and moderate-income taxpayers. Many low- and moderate-income individuals have zero individual income tax liability. For these individuals, additional exclusions from income or deductions will provide little or no relief, as there is no tax burden to eliminate. Further, low- and moderate-income individuals may have limited wealth. Tax provisions designed to enhance access to certain forms of savings (e.g., retirement accounts) also provide limited relief to the least well-off. Allowing refundable tax creditsâthe EITC and CTCâto be computed using the previous year's income is one form of individual disaster tax relief that is targeted at low- and moderate-income taxpayers. Tax policy is generally better suited for providing relief to taxpayers higher in the income distribution. These taxpayers tend to have a positive tax liability that can be offset with various forms of tax reductions. Additionally, taxpayers in higher tax brackets receive a larger tax benefit from additional deductions (a deduction of $100 is worth $35 to someone in the 35% tax bracket, but worth $12 to someone in the 12% tax bracket, for example). Empirical evidence suggests access to savings via retirement account withdrawals helped some taxpayers replace lost income or destroyed assets following Hurricane Katrina. Thus, policies that reduce penalties associated with early withdrawals from retirement accounts or otherwise enhance access to this form of savings is one option for providing relief to taxpayers that have such resources to draw on. There are also timing concerns in using the tax code to provide individuals relief following a disaster. As was noted for businesses, the tax code does not lend itself to providing immediate relief. Another question regarding individual disaster tax relief is whether relief should be contingent on an individual having suffered losses due to a federally declared disaster, as opposed to some other disaster event. Through 2025, the casualty loss deduction is limited to federally declared disasters. However, after 2025, individuals may be able to claim a deduction for casualty losses arising from a fire, storm, shipwreck, or other casualty, regardless of whether the casualty was caused by an event with a federal disaster declaration. Is there something about having one's personal property destroyed in a federally declared disaster that merits special relief, different from what is provided when property is destroyed from a disaster without a federal disaster declaration? As it stands, disaster tax policy is inconsistently applied across different types of disaster events (e.g., federally declared versus non-federally declared disasters; disaster areas receiving or not receiving individual or individual and public assistance). Disaster tax policy can also be designed to prevent taxpayers from facing a tax burden triggered by receipt of disaster relief. The permanent exclusions from income for disaster relief payments and insurance living expense payments clarify that these items are excluded from income for income tax purposes, and thus do not result in additional tax liability. In response to past disasters, temporary provisions have provided that certain forgiven debt would not be treated as income for income tax purposes. Charitable Giving to Support Disaster Relief The charitable sector supports a wide range of activities associated with disaster relief and longer-term recovery. At times, Congress has acted following a disaster to provide additional tax incentives to support charitable disaster-related activities. To encourage charitable giving in the wake of a disaster, Congress has, in the past, relaxed certain income limitations associated with the deduction for charitable giving. The amount individuals can deduct for charitable use of a vehicle (the charitable mileage rate) was also temporarily increased in response to certain past disasters. Qualifying mileage reimbursements have also been allowed to be excluded from income. Other tax incentives enacted in response to disasters have encouraged particular types of charitable giving. Provisions designed to encourage charitable contributions of food inventory and books were enacted following Hurricane Katrina. The enhanced deduction for contributions of food inventory was later made permanent, while the enhanced deduction for book inventory expired in 2011. In some instances, Congress has relaxed charitable giving deadlines to allow contributions for disaster relief made early in the year to be deducted on the previous year's tax return. A key question regarding enhanced deductions for charitable giving is how much additional giving results from the policy change. Is it the tax benefits that drive giving, or individuals' desire to aid those affected by the storm? Another question to consider is whether individuals shift their giving to disaster-related causes at the expense of other charitable activities (i.e., does disaster-related giving "crowd out" other forms of charitable giving?). When evaluating enhanced charitable giving incentives following a disaster, another question is how much giving is for disaster-related charitable activities, as opposed to other activities or uses. Charitable giving incentives are often applied broadly, and it can be difficult to target them to a particular event or geographic region. Another consideration is who benefits from an enhanced charitable giving deduction. On the individual side, the value of the tax benefit of the charitable deduction is highly concentrated among high-income taxpayers. Concluding Remarks Since 2001, a variety of temporary tax policies have been used to respond to various disaster events. Following some disaster events, tax relief packages providing numerous types of tax relief were passed by Congress and became law. Following other disaster events, no temporary disaster relief was enacted. Certain permanent tax provisions provide tax relief to all affected by qualifying disasters, even in cases where specific or targeted disaster tax relief is not enacted. Disasters are inevitable. Each disaster is also unique, with damages affecting individuals, businesses, industries, and other economic sectors differently. This poses a challenge for policymakers in determining what type of disaster relief can provide efficient and effective one-size-fits-all relief. Some disasters may require a targeted and tailored policy response. Some disasters are especially catastrophic events that fundamentally change the economy of the affected region. If disasters cause economic hardships across the region, disaster relief might include broader economic development measures, ones that go beyond compensating individuals or businesses for lost income or property. Disaster tax relief as presently applied combines a base set of permanent disaster tax provisions, with additional provisions or relief provided for certain disaster events, targeted disaster zones, or time periods. Conceptually, this provides policymakers with flexibility regarding relief provided after certain disaster events. A question to consider is whether the current balance of permanent and temporary disaster tax relief provides the desired policy response efficiently and effectively. If temporary tax relief cannot be relied upon to deliver relief that is efficient and effective, one option could be to expand the set of permanent disaster-triggered tax relief provisions. Tax relief that is provided broadly, however, may not be particularly efficient, as it is not designed to provide the specific type of relief needed in the wake of a certain disaster event. Summary:	null	96	58,398	58,400	58,400	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: T ax policy is one of several policy tools that can be used for disaster relief. At various points in time, Congress has passed legislation to provide tax relief and to support recovery following disaster incidents. Permanent tax relief provisions may take effect following qualifying disaster events. Targeted, temporary tax relief provisions can be designed to respond to specific disaster events. The Internal Revenue Code (IRC) contains a number of permanent disaster-related tax provisions. These include provisions providing that qualified disaster relief payments and certain insurance payments are excluded from income, and thus not subject to tax. Taxpayers are also able to deduct casualty losses and defer gain on involuntary conversions (an involuntary conversion occurs when property or money is received in payment for destroyed property). The Internal Revenue Service (IRS) can also provide administrative relief to taxpayers affected by disasters by delaying filing and payment deadlines, waiving underpayment of tax penalties, and waiving the 60-day requirement for retirement plan rollovers. For disasters declared after December 20, 2019, the IRS is required to postpone federal tax deadlines for 60 days. The availability of certain tax benefits is triggered by a federal disaster declaration. Before 2017, casualty losses were generally deductible. However, changes made in the 2017 tax revision (commonly referred to as the "Tax Cuts and Jobs Act" [TCJA]; P.L. 115-97 ) restrict casualty loss deductions to federally declared disasters. Temporary tax-related disaster relief measures were enacted following a number of major disasters that occurred between 2001 and 2019. The following measures addressed specific disasters: The Job Creation and Worker Assistance Act of 2002 (Job Creation Act; P.L. 107-147 ) responded to the terrorist attacks of September 11, 2001. The Katrina Emergency Tax Relief Act of 2005 (KETRA; P.L. 109-73 ) responded to Hurricane Katrina. The Gulf Opportunity Zone Act of 2005 (GO Zone Act; P.L. 109-135 ) responded to Hurricanes Katrina, Rita, and Wilma. The Food, Conservation, and Energy Act of 2008 (2008 Farm Bill; P.L. 110-246 ) responded to severe storms and tornadoes in Kansas in 2007. The Heartland Disaster Tax Relief Act of 2008, enacted as Title VII of Division C of P.L. 110-343 (the Heartland Act), and other provisions in P.L. 110-343 responded to severe Midwest storms in summer 2008 and Hurricane Ike and provided general disaster relief for events occurring before January 1, 2010. The Disaster Tax Relief and Airport and Airway Extension Act of 2017 (Disaster Tax Relief Act of 2017; P.L. 115-63 ) responded to Hurricanes Harvey, Irma, and Maria. The 2017 tax act ( P.L. 115-97 ; commonly referred to using the title of the bill as passed in the House, the "Tax Cuts and Jobs Act") responded to disasters occurring in 2016. The Bipartisan Budget Act of 2018 (BBA18; P.L. 115-123 ) responded to the 2017 California wildfires. The Taxpayer Certainty and Disaster Tax Relief Act of 2019 (Division Q of the Further Consolidated Appropriations Act, 2020; P.L. 116-94 ) provided relief for major disasters that generally occurred in 2018 or 2019. This report provides an overview of permanent and temporary disaster tax provisions that have been enacted in response to specific disaster events. The report also summarizes which types of temporary provisions have been used to support different disaster events. Policy considerations related to business, individual, and charitable disaster relief are also addressed. Permanent Disaster Tax Relief Provisions There are several permanent disaster tax relief provisions. In some cases, these provisions apply to any property that is destroyed or damaged due to casualty or theft. In other cases, relief is limited to property lost as a result of federally declared disasters or for disasters for which the IRS undertakes administrative actions. Additionally, as discussed further below, there are instances where these permanent relief provisions have been temporarily enhanced in response to specific disaster events. Disaster Casualty Losses Taxpayers may be able to deduct casualty losses resulting from damage to or destruction of personal property (property not connected to a trade or business). For tax years 2018 through 2025, the casualty loss deduction is limited to losses attributable to federally declared disasters. After 2025, under current law, the deduction is to be available to losses arising from any fire, storm, shipwreck, or other casualty or theft. Casualty losses are an itemized deduction. Each casualty is subject to a $100 floor, meaning that only losses in excess of $100 are deductible for each casualty. Additionally, casualty losses are deductible only to the extent that aggregate losses exceed 10% of the taxpayer's adjusted gross income (AGI). Only casualty losses not compensated for by insurance or otherwise can be deducted. Involuntary Conversions An involuntary conversion occurs when property is destroyed, stolen, condemned, or disposed of under threat of condemnation, and the owner of the property receives money or payment for the property, such as an insurance payment. An involuntary conversion can also be viewed as a forced sale of property. The IRC allows taxpayers to defer recognizing a gain on property that is involuntarily converted. The replacement periodâthe time within which a taxpayer must replace converted property to receive complete deferralâis two years (three years for condemned business property). For a taxpayer's principal residence and its contents, the replacement period for an involuntary conversion stemming from a federally declared disaster is four years. Taxpayers whose principal residence or any of its contents are involuntarily converted as a result of a federally declared disaster qualify for additional special rules. First, gain realized from the receipt of insurance proceeds for unscheduled personal property (property in the home that is not listed as being covered under the insurance policy) is not recognized. Second, any other insurance proceeds received for the residence or its contents are treated as a common fund. If the fund is used to purchase property that is similar or related in service or use to the converted residence or its contents, then the owner may elect to recognize gain only to the extent that the common fund exceeds the cost of the replacement property. If a taxpayer's business property is involuntarily converted as a result of a federally declared disaster, then the taxpayer is not required to replace it with property that is similar or related in service to the original property in order to avoid having to recognize gain on the conversion, as long as the replacement property is still held for a type of business purpose. Disaster Relief for Low-Income Housing Credit The low-income housing tax credit allows owners of qualified residential rental property to claim a credit over a 10-year period that is based on the costs of constructing, rehabilitating, or acquiring the building attributable to low-income units. Owners may claim a credit based on 130% of the project's costs if the housing is in a low-income or difficult development area. Owners must be allocated this credit by a state. Each state is limited in the amount of credits it may allocate to the greater of $2,000,000 or $1.75 multiplied by the state's population (both figures are adjusted for inflation and are $3,166,875 and $2.75625, respectively, for 2019), with adjustments. Owners of low-income housing tax credit (LIHTC) properties are eligible for relief from certain requirements of the program if the property is located in a major disaster area. Specifically, property owners are provided relief from credit recapture, carryover allocation rules, and income certifications for displaced households temporarily housed in an LIHTC unit. Property owners may also qualify for additional credits for rehabilitation expenditures, and, for severely damaged buildings in the first year of the credit period, the allocation of credits may either be treated as having been returned, or the first year of the credit period can be extended. State LIHTC allocating agencies are eligible for relief from compliance monitoring under the same IRS guidance. Additionally, households are eligible to occupy an LIHTC unit without being subject to the program's income limits if their principal residence was located in a major disaster area. Exclusion for Disaster Assistance Payments to Individuals Taxpayers can exclude from income qualified disaster relief and disaster mitigation payments. Excludable relief payments include payments for expenses that are not compensated for by insurance (or otherwise compensated). Excludable relief payments can include personal, family, living, or funeral expenses incurred as a result of the disaster; payments for home repairs or to replace damaged and destroyed contents; payments by a transportation provider for injuries or deaths resulting from a disaster; and payments from governments (or similar entities) for general welfare when disaster relief is warranted. Qualified disaster mitigation payments include amounts paid under the Robert T. Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act (as in effect on April 15, 2005) for hazard mitigation. Exclusion for Insurance Living Expense Payments Taxpayers whose principal residence is damaged in a disaster (including a fire, storm, or other casualty) can exclude insurance reimbursements for living expenses while temporarily occupying another residence from income. This exclusion also applies to taxpayers who are denied access to their home by government authorities due to the threat of casualty or disaster. IRS Administrative Relief The IRS is authorized to postpone any federal tax deadline, including deadlines for filing returns, paying taxes, or claiming refunds, for up to one year for taxpayers affected by federally declared disasters. The IRS may also postpone certain Individual Retirement Account (IRA) deadlines. Specifically, the IRS can extend the 60-day period for plan participants to deposit rollover retirement plan distributions to another qualified plan or IRA. Additionally, the IRS may extend the time for a qualified plan to make a required minimum distribution. The IRS is required to postpone federal tax deadlines for 60 days for disasters declared after December 20, 2019. Taxpayers for whom deadlines are automatically postponed include (1) those whose principal residence is in a disaster area; (2) those whose principal place of business is in a disaster area; (3) individuals who are relief workers assisting in a disaster area; (4) individuals whose tax records are maintained in a disaster area; (5) any individual visiting a disaster area who was killed or injured as a result of the disaster; or (6) spouses filing a joint return with any person described in (1) to (5). The IRS is also authorized to waive underpayment penalties when a casualty, disaster, or other unusual circumstances have made it such that the imposition of a penalty would be against equity and good conscience. Past Temporary Disaster-Relief Provisions At times, Congress has chosen to use tax policy to provide temporary relief and support following disaster incidents. Temporary and event-specific disaster tax policy has been enacted following many major disaster events in recent years. However, temporary or targeted tax relief has not been enacted following all major disaster events. For example, no temporary or targeted disaster tax relief was enacted in response to Hurricane Irene in 2011 or Hurricane Sandy in 2012. The specific tax relief provisions enacted to respond to past disaster events are summarized in Table 3 and Table 4 . The following discussion provides additional information on these provisions. Tax provisions that have been used to respond to disasters most recently are discussed first . Temporary Provisions Enacted to Respond to Recent Disasters The disaster tax relief packages enacted in 2017 to respond to Hurricanes Harvey, Irma, and Maria; in 2018 to respond to the 2017 California wildfires; and in 2019 to respond to disasters that occurred in 2018 and 2019 contained the same five provisions: (1) an enhanced casualty loss deduction; (2) expanded access to retirement plan funds; (3) increased limits on charitable deductions; (4) employee retention tax credits; and (5) EITC/CTC credit computation look-back rules. Enhanced casualty loss deductions were allowed for losses associated with any federally declared disaster occurring in 2016 and 2017, and access to retirement plan funds was enhanced for 2016 disasters. Certain areas of California that were affected by natural disasters in 2017 and 2018 will receive additional LIHTC allocations in 2020. Additionally, disaster tax relief for 2018 and 2019 disasters will also be available in U.S. possessions. Enhanced Casualty Loss Deduction An enhanced casualty loss deduction has been made available for losses attributable to certain disasters or for losses occurring during certain periods of time. Most recently, an enhanced casualty loss deduction was provided for 2018 and 2019 disasters in the Taxpayer Certainty and Disaster Tax Relief Act of 2019 (Division Q of P.L. 116-94 ). Before that, an enhanced casualty loss deduction was provided for California wildfires in the Bipartisan Budget Act of 2018 (BBA18; P.L. 115-123 ); any disaster-related casualty loss in calendar years 2016 or 2017 in the 2017 tax act, commonly called the "Tax Cuts and Jobs Act" (TCJA; P.L. 115-97 ); and Hurricanes Harvey, Irma, and Maria in the Disaster Tax Relief and Airport and Airway Extension Act of 2017 ( P.L. 115-63 ). The enhancements (1) waive the 10% of AGI floor; (2) increase the $100 floor for each casualty to $500; and (3) allow taxpayers not itemizing deductions to add the deduction to their standard deduction. Generally, casualty loss deductions are claimed in the year of the loss. However, a loss in a federally declared disaster area may be deducted on the prior year's tax return. A similar provision was enacted in response to several previous disasters. Retirement Plan Distributions The Disaster Tax Relief Act of 2019, BBA18, TCJA, and the Disaster Tax Relief Act of 2017 all provided tax relief relating to retirement plan distributions. First, each act waived the 10% penalty that would otherwise apply on early withdrawals made from a qualifying retirement plan if the individual's principal place of abode was in the disaster area and the individual sustained an economic loss due to the disaster. The distributions were required to occur within a specified time frame, and the maximum amount that could be withdrawn without penalty was $100,000 or 100% of the present value of the plan participant's benefits (but not less than $10,000). Funds could be recontributed to a qualified plan over a three-year period and receive tax-free rollover treatment. Additionally, with respect to any taxable portion of the distribution, the individual could include one-third of such amount in gross income each year over the course of three tax years rather than including the entire amount on the tax return for the year of distribution. The acts increased the amount disaster victims could borrow from their retirement plans without immediate tax consequences. Under current law, the maximum amount that may be borrowed without being treated as a taxable distribution is the lesser of (1) $50,000, reduced by certain outstanding loans, or (2) the greater of $10,000 or 50% of the present value of the employee's vested benefits. For loans made during the applicable period, the acts increased this to the lesser of (1) $100,000, reduced by certain outstanding loans, or (2) the greater of $10,000 or 100% of the present value of the employee's vested benefits, as well as extending certain loan repayment dates by one year. A similar provision was enacted in response to several previous disasters. Increased Limits on Charitable Deductions Taxpayers are generally permitted to deduct contributions made to 501(c)(3) charitable organizations, subject to various limitations. Individuals may not claim a charitable deduction that exceeds 50% (temporarily increased to 60% beginning in 2018 through 2025) of their "contribution base" (adjusted gross income with certain adjustments), and corporations may not claim a deduction that exceeds 10% of their taxable income with certain adjustments. Any excess contributions may generally be carried forward for five years. The Disaster Tax Relief Act of 2019, BBA18, and the Disaster Tax Relief Act of 2017 temporarily suspended the 50% and 10% limitations for qualified contributions made for disaster relief efforts. An additional deduction is allowed for amounts by which the taxpayer's charitable contribution base exceeds the amount of all other allowable charitable contributions in the tax year. For individuals, the deduction could not exceed the amount by which the charitable contribution base exceeded other charitable contributions. For individuals, the earlier acts also suspended the overall limitation on itemized deductions for qualified contributions that was in effect through 2017. A similar provision was enacted in response to several previous disasters. Employee Retention Credit The Disaster Tax Relief Act of 2019, BBA18, and the Disaster Tax Relief Act of 2017 provided a temporary retention credit for disaster-damaged businesses that continued to pay wages to their employees who were unable to work after the disaster rendered the business inoperable. Eligible employees were those whose principal place of employment was in the applicable disaster area. The credit equaled 40% of the employee's first $6,000 in wages paid between the date the business became inoperable and the date it resumed significant operations at that location (or the end of the first calendar year, whichever came first). Wages can be those paid even if the employee provides no services for the employer, or for wages paid for services performed at a different location or before significant operations resume. This employee retention may not be for an employee during any period that the employer claims a work opportunity credit for the employee. A similar provision was enacted in response to several previous disasters. EITC/CTC Credit Computation Look-Back The Disaster Tax Relief Act of 2019 and BBA18 permitted individuals affected by 2018 and 2019 disasters or California wildfires in 2017 to elect to use their earned income from the previous year for computing the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC), instead of their disaster-year income, if previous-year income was greater than disaster-year income. The Disaster Tax Relief Act of 2017 also included this provision for those affected by Hurricanes Harvey, Irma, and Maria. This may have benefited taxpayers whose income was reduced in the year of the disaster. Taxpayers generally qualified only if they lived in the disaster zone or lived in the disaster area and the disaster caused them to be displaced from their principal place of abode. A similar provision was enacted in response to several previous disasters. Low-Income Housing Tax Credit The Disaster Tax Relief Act of 2019 increased credits available to California in 2020. Specifically, for certain areas of California that were affected by natural disasters in 2017 and 2018, the act increased California's 2020 LIHTC allocation by the lesser of the state's 2020 LIHTC allocations to buildings located in qualified 2017 and 2018 California disaster areas, or 50% of the state's combined 2017 and 2018 total LIHTC allocations. In the past, disaster relief legislation has provided additional LIHTC allocations to disaster-affected areas. The GO Zone Act temporarily increased the credits available to Alabama, Louisiana, and Mississippi for use in the GO Zone by up to $18.00 multiplied by the state's population that was located in the GO Zone prior to the date of Hurricane Katrina. It also temporarily treated the disaster zones as difficult development areas and used an alternate test for determining whether certain GO Zone projects qualified as low-income housing. The Heartland Act permitted affected states to allocate additional amounts for use in the disaster area of up to $8.00 multiplied by the state's disaster area population. Treatment of Certain U.S. Possessions Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa, and the Commonwealth of the Northern Mariana Islands are U.S. territories. Each has a local tax system with features that help determine the territory's local public finances. Guam, the U.S. Virgin Islands, and the Northern Mariana Islands are mirror code possessions, meaning these territories use the Internal Revenue Code as their territorial tax law. Puerto Rico and American Samoa are non-mirror code possessions. These two possessions have their own tax laws. The Disaster Tax Relief Act of 2019 requires payments from the U.S. Treasury to possessions for the temporary tax relief provided in the bill. Mirror code possessions will receive an amount equal to the loss in revenue by reason of the temporary disaster-related tax relief provided in the legislation. Non-mirror code possessions may receive a similar payment (a payment equal to the amount of temporary disaster tax relief that would have been provided if a mirror code had been in effect) if the possession has an approved plan for prompt distribution of payments . Temporary Tax Provisions Used to Respond to Disasters Before 2010 Provisions used to respond to 2016, 2017, 2018, and 2019 disasters were also used to respond to some disasters before 2010. Additionally, a number of other temporary tax provisions were used to respond to these pre-2010 disasters. The first time a temporary disaster tax relief package was enacted was in response to the September 11 terrorist attacks. The following sections summarize the various provisions included in temporary disaster tax relief legislation before 2010. Expensing In general, capital expenditures must be added to a property's basis rather than being expensed (i.e., deducted in the current year). IRC Section 179 provides an exception so that a business may expense the costs of certain property in the year it is placed in service. After 2018, the maximum expensing allowance is $1 million, with an investment limitation of $2.5 million (both amounts are adjusted for inflation). In the past, these thresholds have been lower. For example, in 2007, the maximum expensing allowance under Section 179 was $125,000, and the deduction decreased dollar-for-dollar as the total cost of all property the business placed in service during the year exceeded $500,000. The Heartland Act increased the Section 179 limitations by up to $100,000 and $600,000 for qualified disaster area property for federally declared disasters occurring prior to January 1, 2010. Increased expensing allowances were enacted in response to several disasters before 2007 as well. The Heartland Act also added IRC Section 198A, which permitted full expensing (subject to depreciation recapture) of qualified expenditures for the abatement or control of hazardous substances released on account of a federally declared disaster, the removal of debris or the demolition of structures on business-related real property damaged by such a disaster, and the repair of business-related property damaged by such a disaster. This provision applied only to federally declared disasters occurring prior to January 1, 2010. Net Operating Loss Carryback Under current law, a business's net operating loss (NOL) can be carried forward indefinitely. Additionally, NOLs are limited to 80% of taxable income. There is no carryback of NOLs. This treatment was enacted in the 2017 tax act ( P.L. 115-97 ). Before 2018, in general, a taxpayer's net operating loss (NOL) could be carried back and deducted in the two tax years before the NOL year, and then carried forward for up to 20 years after the NOL year. Additionally, before 2018, the carryback was extended to three years for individuals who had a loss of property arising from a casualty or theft. A three-year period also applied for small businesses and farmers for NOLs attributable to federally declared disasters. The Heartland Act provided for a five-year carryback period for qualified losses from any federally declared disaster occurring prior to January 1, 2010. For such disasters, it also suspended the alternative minimum tax (AMT) provision that generally limits NOL deductions to 90% of alternative minimum taxable income. The corporate AMT was repealed in the 2017 tax act. Bonus Depreciation For eligible property acquired and placed in service after September 27, 2017, and before January 1, 2023, businesses may claim a 100% expensing (or bonus depreciation) allowance under Section 168(k). Like expensing limitations, the bonus depreciation allowance has changed over time. The Heartland Act provided a 50% bonus depreciation provision for qualified disaster assistance property from a federally declared disaster occurring prior to January 1, 2010. However, since other legislation provided 50% bonus depreciation during this time period, the provision was probably not meaningful. With 100% bonus depreciation in effect through 2022, providing additional bonus depreciation is not currently a policy option. Mortgage Revenue Bonds Mortgage revenue bonds are tax-exempt bonds used to finance below-market-rate mortgages for low- and moderate-income homebuyers. In general, the homebuyers must not have owned a residence for the past three years, and the houses' costs may not exceed 90% of the average purchase price for the area. However, for areas that are low income or in chronic economic distress, the three-year restriction does not apply, and the purchase price limitation is increased to 110%. For individuals whose homes were declared unsafe or ordered to be demolished or relocated due to a federally declared disaster occurring prior to January 1, 2010, the Heartland Act waived the three-year restriction and increased the purchase price limitation from 90% to 110%. It also permitted individuals whose homes were damaged by the disaster to treat the amount of owner financing provided for home repair and construction as a qualified rehabilitation loan, limited to $150,000 (the amount is generally limited to $15,000), which had the effect of waiving the three-year requirement for such financing. The GO Zone Act and KETRA contained similar provisions. In the Heartland Act, the maximum amount of bonds each state could issue was $1,000 multiplied by that state's population in the disaster area, and need-based prioritization for state allocations was established. The GO Zone Act also expanded qualified private activity bond issuances for mortgage revenue bonds in disaster areas. The Go Zone Act added $2,500 per person in the federally declared Katrina disaster areas in which the residents qualify for individual and public assistance. The increased capacity added approximately $2.2 billion for Alabama, $7.8 billion for Louisiana, and $4.8 billion for Mississippi in aggregate bonds over the subsequent five years through 2010. Expensing of Environmental Remediation Costs ("Brownfields") Capital expenditures must generally be added to the property's basis rather than being expensed (i.e., deducted in the current year). IRC Section 198 provided an exception by allowing taxpayers to expense any qualifying environmental remediation costs paid or incurred prior to January 1, 2012, for the abatement or control of hazardous substances at a qualified contaminated site. Unlike the other provisions discussed in this report, Section 198 is not limited to federally declared disasters or specific disasters. The provision was enacted as a temporary one in the Taxpayer Relief Act of 1997 ( P.L. 105-34 ) and was extended a number of times before expiring at the end of 2011. The Heartland Act was among those laws that temporarily extended Section 198. The GO Zone Act had also extended the provision, but only for those costs for contaminated sites in the GO Zone, and treated petroleum products as a hazardous substance for the purposes of environmental remediation. Charitable Contributions of Inventory Before 2005, donors of food inventory that were not C corporations could only claim a charitable deduction equal to their basis in the inventory (typically, its cost). C corporations were allowed an enhanced deduction, which was the lesser of (1) the basis plus 50% of the property's appreciated value, or (2) two times basis. KETRA provided special rules that allowed all donors of wholesome food inventory to benefit from the enhanced deduction and allowed C corporations to claim an enhanced deduction for donations of book inventory to public schools. Neither provision was limited to donations related to the hurricane, but both were originally set to expire on December 31, 2005. The provisions have been extended several times since then, including by the Heartland Act (as part of its tax extenders package, rather than its disaster relief provisions). The enhanced deduction for charitable contributions of food inventory was made permanent in the Protecting Americans from Tax Hikes Act of 2015, enacted as Division Q in the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ). The enhanced deduction for book inventory expired as scheduled at the end of 2011. Involuntary Conversions In addition to the general treatment of involuntary conversions (discussed above), the Job Creation Act, KETRA, the 2008 Farm Bill, and the Heartland Act increased the two-year time period to purchase the replacement property to five years for property in the applicable disaster area so long as substantially all of the use of the replacement property occurred in such area. Discharge of Indebtedness When all or part of a debt is forgiven, the amount of the cancellation is ordinarily included in the income of the taxpayer receiving the benefit of the discharge. However, there are several exceptions to this general rule. For example, no amount of the discharge is included in income if the cancellation is intended to be a gift or is from the discharge of student loans for the performance of qualifying services. The Mortgage Forgiveness Debt Relief Act of 2007 ( P.L. 110-142 ) temporarily excluded qualified canceled mortgage debt income that is associated with a primary residence from taxation (this provision was extended multiple times, and expired at the end of 2017). There are also certain situations in which the taxpayer may defer taxation, with the possibility of permanent exclusion, on income from the discharge of indebtedness, such as if discharge occurs when the debtor is in Title 11 bankruptcy proceedings or legally insolvent. Both KETRA and the Heartland Act included provisions that allowed victims to exclude nonbusiness debt forgiveness from income in certain conditions. Victims of Hurricane Katrina were allowed to exclude nonbusiness debt that was forgiven by a governmental agency or certain financial institutions if the discharge occurred after August 24, 2005, and before January 1, 2007. Individuals were eligible for this benefit if (1) their principal place of abode was in the core disaster area, or (2) it was in the Hurricane Katrina disaster area and they suffered an economic loss due to the hurricane. Individuals with certain tax attributes (such as basis) were required to reduce them by the amount excluded from income, which has the effect of deferring (rather than permanently eliminating) the tax on the cancelled debt. For victims with a principal place of abode in a Midwestern disaster area, the Heartland Act provided similar relief. However, if that home was in an area determined by the President to warrant only public assistance, the individual also had to have suffered an economic loss due to the severe weather. Employer-Provided Housing Both the GO Zone Act and the Heartland Act excluded the value of certain employer-provided housing, limited to $600 per month, from the employee's income and allowed the employer to claim a credit equal to 30% of that amount. Among other requirements, the employee must have had a principal residence in the applicable disaster area and have performed substantially all employment services for that employer in that area. The employer must have had a trade or business located within the applicable disaster area. Tax-Exempt Bonds Both the GO Zone Act and the Heartland Act temporarily allowed affected states to issue tax-exempt bonds to finance (1) qualified activities involving residential rental projects, nonresidential real property, and public utility property located in the disaster area; and (2) below-market rate mortgages for low- and moderate-income homebuyers. Under the GO Zone Act, the maximum amount of bonds that each state could issue was $2,500 multiplied by that state's population located in the GO Zone as determined prior to the date of Hurricane Katrina. Under the Heartland Act, the maximum amount of bonds each state could issue was capped at $1,000 multiplied by that state's population in the disaster area, and the act expressly stated that the bonds would have to be designated by the appropriate state authority on the basis of providing assistance to where it was most needed. The Job Creation Act, meanwhile, allowed New York to issue up to $8 billion (divided equally between the state and New York City) in tax-exempt bonds to finance qualified activities involving residential rental projects, nonresidential real property, and public utility property located in the disaster zone. The Job Creation Act and the GO Zone Act also allowed one additional advance refunding of qualifying bonds that were issued by those states. The GO Zone Act, the 2008 Farm Bill, and the Heartland Act allowed operators of low-income residential rental projects financed by IRC Section 142(d) bonds to rely on the representations of displaced individuals regarding their income qualifications so long as the tenancy began within six months of the displacement. Tax Credit Bonds Both the GO Zone Act and the Heartland Act permitted affected states to issue tax credit bonds to pay the principal, interest, or premiums on qualified governmental bonds or to make loans to political subdivisions to make such payments. Bondholders may claim a credit based on the product of a credit rate and the bonds' outstanding face amount. The bonds were required to be issued within a certain time period and could not have a maturity date beyond two years, among other requirements. Further, each state was capped in the amount of bonds it could issueâfor example, under the Heartland Act, the maximum amount of bonds that could be issued by states with disaster area populations of at least 2 million was $100 million; the cap was $50 million for states with disaster area populations between 1 million and 2 million; and the other states could not issue any bonds. Bonds could not be used for certain activities. Housing Exemption Both KETRA and the Heartland Act provided tax relief to those who provided free housing to those displaced by the storms. Individuals could claim additional personal exemptions of $500 each for up to four displaced people whom they housed for at least 60 consecutive days. These exemptions could be claimed in both the year of the disaster and the next year; however, no person could qualify the taxpayer for the exemption in both years. Among other requirements, the displaced person must have had a principal place of abode in the disaster area; if the home was not in the core disaster area, then the person must have been displaced due to either storm damage to the home or evacuation caused by the storm. Mileage Rate and Reimbursement Generally, individuals who use their personal vehicles for charitable purposes may claim a deduction based on the number of miles driven. The amount is set by statute at 14 cents per mile. KETRA and the Heartland Act each temporarily increased the charitable mileage rate to 70% of the standard business mileage rate if the vehicle was used for hurricane or Midwest disaster relief. The standard business mileage rate is periodically set by the IRS. In 2019, the standard mileage rate is 56 cents per mile. Additionally, both acts provided a temporary exclusion from a charitable volunteer's gross income for any qualifying mileage reimbursements received from the charity for the operating expenses of a volunteer's passenger automobile, when used for disaster relief. Treasury Authority to Make Adjustments Relating to Status KETRA, the GO Zone Act, and the Heartland Act all contained similar provisions that authorized the Treasury Secretary to make adjustments in the application of the tax laws for the tax years of the disaster and the immediate subsequent year so that temporary relocations due to the disaster did not cause taxpayers to lose any deduction or credit or to experience a change of filing status. Education Credits Individuals with eligible tuition and related expenses may claim certain higher education tax credits. Under the law existing when KETRA, the GO Zone Act, and the Heartland Act were enacted, the Hope credit was 100% of the first $1,000 of eligible expenses plus 50% of the next $1,000 of eligible expenses, both adjusted for inflation. The maximum Lifetime Learning credit is and was 20% of up to $10,000 of eligible expenses. Beginning in 2009, the partially refundable American Opportunity Tax Credit (AOTC) temporarily increased the Hope credit, allowing 100% of eligible expenses up to $2,000 plus 25% of the next $2,000 of eligible expenses. The Protecting Americans from Tax Hikes (PATH) Act (Division Q of P.L. 114-113 ) made the AOTC permanent, effectively eliminating the Hope credit. For individuals attending school in the GO Zone for 2005 and 2006, the GO Zone Act allowed certain nontuition expenses (e.g., books, equipment, and room and board) to qualify for the Hope and Lifetime Learning credits; doubled the $1,000 limitations in the Hope credit to $2,000; and increased the 20% limitation in the Lifetime Learning credit to 40%. The Heartland Act provided similar rules for students attending school in a Midwestern disaster area during 2008 or 2009. However, to take advantage of this provision for 2009, taxpayers were required to waive application of the AOTC provisions. Rehabilitation Credit Taxpayers may claim a credit equal to 10% of the qualifying expenditures to rehabilitate a qualified building or 20% of such expenditures for a certified historic structure. Both the GO Zone Act and the Heartland Act temporarily increased these percentages to 13% and 26%, respectively, for rehabilitating qualifying buildings and structures damaged by the applicable disasters. Public Utility Losses Under IRC Section 172, certain net operating losses, called specified liability losses, may be carried back for 10 years. Under IRC Section 165(i), certain disaster losses may be deducted in the year prior to the disaster. The GO Zone Act treated public utility casualty losses as a Section 172 loss. The GO Zone Act and the 2008 Farm Bill allowed public utility disaster losses to be deducted in the fifth taxable year preceding the disaster. Gulf Coast Recovery Bonds The GO Zone included provisions to encourage the Treasury Secretary to designate at least one series of bonds as Gulf Coast Recovery Bonds. The Treasury designated Series I inflation-indexed savings bonds purchased through financial institutions as "Gulf Coast Recovery Bonds." New Markets Tax Credit Under the new markets tax credit, taxpayers are allocated a credit for investments made in qualified community development entities. The credit is claimed over a period of seven years and equals the amount of the investment multiplied by a percentage: 5% for the first three years and 6% for the next four years. The credit was capped at $2 billion for 2005 and $3.5 billion for 2006 and 2007. The GO Zone Act increased the cap by $300 million for 2005 and 2006 and by $400 million for 2007, and it allocated these amounts to entities making low-income community investments in the GO Zone. Small Timber Producers Under IRC Section 194, taxpayers may expense up to $10,000 of qualifying reforestation expenditures. Under IRC Section 172, the general rule is that taxpayers may carry net operating losses back for two years. The GO Zone Act created two special rules for timber producers with less than 501 acres of timber property: it (1) increased the Section 194 limit by up to $10,000 for expenditures made for qualified timber property in the applicable disaster zones; and (2) increased the Section 172 carry back period to five years for certain losses attributable to timber property in those zones. Work Opportunity Tax Credit Generally, businesses that hire individuals from groups with high unemployment rates or special employment needs, such as high-risk youths and veterans, may claim the work opportunity tax credit. The credit may be claimed for the wages of up to $6,000 that were paid during the employee's first year. For an employee who worked at least 400 hours, the credit equals 40% of his or her wagesâthus, the maximum credit is $2,400. KETRA allowed businesses to claim the work opportunity credit on wages paid to certain employees hired after Hurricane Katrina. Eligible employees were those who had a principal place of abode in the core disaster area and either (1) were hired during the two-year period beginning August 28, 2005, for a position in the area, or (2) were displaced by the hurricane and hired after August 27, 2005, and before January 1, 2006. Congress later extended the WOTC's expiration from August 28, 2007, to August 28, 2009, for firms who hire "Hurricane Katrina employees" to work in the core disaster area (see the Tax Extenders and Alternative Minimum Tax Relief Act of 2008 in P.L. 110-343 ). The Job Creation Act provided similar treatment for New York Liberty Zone business employees and certain employees outside the zone. Leasehold Improvements For purposes of depreciation, the Job Creation Act generally shortened the recovery period for leasehold improvement property to five years for qualifying property located in the New York disaster zone. Economic and Policy Considerations57 Tax policy for disaster relief might be motivated by multiple objectives. One objective could be distributional or relief-oriented. Tax policy could be designed to provide additional resources to businesses or individuals who experienced an uncompensated disaster loss. This relief could be targeted toward the low-income, although there are limitations when using tax policy to address low-income individuals and businesses. Tax policy can also be used to encourage investment in disaster-affected areas. Absent government intervention, some level of private rebuilding will occur. A policy question, however, is whether this private building is sufficient, or if there are other barriers to investment in the disaster-affected region that call for government intervention. When investment subsidies are provided, there is the question of how much new investment is supported relative to how much investment is subsidized that would have occurred absent the subsidy. There are also challenges associated with identifying the disaster area for the purposes of providing tax relief. In some cases, relief has been provided to a certain geographic area. In other cases, relief has been tied to a federal disaster declaration or provided only when individual assistance or individual and public assistance is provided. Narrowly defined geographic areas can limit tax benefits to those most likely to be harmed by the disaster, but can exclude some disaster victims. The following sections discuss considerations by examining instances in which disaster relief was provided through the tax code for businesses and individuals, as well as through tax policy designed to support disaster-related charitable giving. Providing Disaster Tax Relief to Businesses For businesses, hurricanes like Katrina, Maria, Irma, and Harvey caused unprecedented property and earnings losses. Employee displacement can create labor market challenges that persist over time. Further, longer-term supply chain disruptions can make it difficult for businesses to resume operations after initial clean-up efforts are complete. In the past, tax policy has been used to reduce the cost of business investment in cleanup and repairs. Bonus depreciation and enhanced expensing were used to provide disaster tax relief to businesses following several disasters before 2010. However, at present, with bonus depreciation at 100% (100% bonus depreciation is expensing), this policy tool is not readily available. Expensing allowances are higher than they have been historically, but could, if deemed necessary and under certain circumstances, be expanded further to provide additional expensing allowances in disaster areas. For instance, this could be a policy option should bonus depreciation be set at a rate of less than 100%, or eliminated altogether. An expansion to expensing for disaster-relief purposes could be accomplished through raising the expensing limit; expensing is currently allowed for investments up to $1,040,000. Expansions to net operating loss (NOL) carrybacks and lengthening of replacement periods for involuntary conversions have also been used to provide tax relief following past disasters. Under current law, there is no carryback of NOLs. Allowing an NOL carryback for disaster-related losses could provide relief for taxpayers experiencing losses who had positive tax liability in a recent tax year. Expanding the replacement period for involuntary conversions could provide more flexibility to taxpayers looking to rebuild or reestablish businesses in the disaster area. Tax policy can also be used to encourage businesses to provide employment and housing following disaster events. Employee retention credits encourage employers to continue paying employees in circumstances where the disaster affects business operations. Targeted hiring credits, such as the WOTC, can be used to provide an incentive to hire workers who were displaced by a disaster. With respect to housing, tax policy has been used to encourage employers to provide housing to their employees, as well as to support more low-income housing development in disaster-affected areas. Disaster recovery and rebuilding has also been supported following certain disasters by providing targeted tax benefits to disaster-impacted geographic zones. The New York Liberty Zone was established following the September 11 terrorist attacks. The Gulf Opportunity Zone was established following the 2005 Gulf Coast hurricanes. These zones can receive additional allocations of allocated tax credits, such as the NMTC or the LIHTC. Past disaster tax relief has also provided additional allocations of tax-exempt or tax-credit bonds in disaster-affected zones. Some have questioned the effectiveness of tax-exempt private activity bonds as a tool for disaster relief, noting that in the case of the GO Zone, areas with the most damage were less likely to have access to bonds to help finance recovery and rebuilding. Should special bond allocations be deployed in response to future disasters, there may be ways to improve the bond allocation process to better target small businesses or heavily impacted areas. Other provisions might be designed to support specific industries or sectors affected by the disaster. For example, tax provisions for small timber producers and public utilities have been included in past disaster tax legislation. Narrowly targeted tax benefits, however, might leave out disaster-affected taxpayers that suffered losses yet have business activities that differ from the sector targeted for relief. One consideration related to tax relief provisions for business is timing. The tax code is not well-suited to provide capital for cleanup, rebuilding, or recovery in the short term. Reduced tax liabilities provide a future financial benefit, but past disaster tax relief has not been designed to provide immediate access to capital that may be needed following a disaster. Another consideration related to business disaster tax relief is the potential scope of the benefit. For many business-related provisions, the benefit is limited to businesses with positive taxable income. Accelerated cost recovery, special deductions, and nonrefundable tax credits provide limited benefits to businesses with little profit or no tax liability. Businesses with limited current income or tax liability may, however, benefit from expanded NOL carrybacks. One policy question is whether certain disaster-related tax benefits are necessary or effective in achieving intended policy goals, given that much of the tax relief accrues to taxpayers who would have rebuilt without incentives. This critique raises the question of whether disaster-related tax benefits are intended to encourage certain behavior (rebuilding, for example), or primarily provide financial relief for businesses affected by the disaster. Providing Disaster Tax Relief to Individuals Tax provisions might be used to provide financial relief to individuals who have lost property, income, or both following a disaster. To provide relief for taxpayers experiencing a loss of property, Congress has enacted legislation following certain past disasters to expand the deduction for casualty losses (beyond what is available under the permanent provision). Relief has been provided to taxpayers experiencing a loss of income by providing enhanced access to retirement plan funds or by using look-back rules for computing refundable tax credits. Several past disaster relief packages have also included provisions to support providing housing to affected individuals. There are limits to using tax policy to provide disaster relief to low- and moderate-income taxpayers. Many low- and moderate-income individuals have zero individual income tax liability. For these individuals, additional exclusions from income or deductions will provide little or no relief, as there is no tax burden to eliminate. Further, low- and moderate-income individuals may have limited wealth. Tax provisions designed to enhance access to certain forms of savings (e.g., retirement accounts) also provide limited relief to the least well-off. Allowing refundable tax creditsâthe EITC and CTCâto be computed using the previous year's income is one form of individual disaster tax relief that is targeted at low- and moderate-income taxpayers. Tax policy is generally better suited for providing relief to taxpayers higher in the income distribution. These taxpayers tend to have a positive tax liability that can be offset with various forms of tax reductions. Additionally, taxpayers in higher tax brackets receive a larger tax benefit from additional deductions (a deduction of $100 is worth $35 to someone in the 35% tax bracket, but worth $12 to someone in the 12% tax bracket, for example). Empirical evidence suggests access to savings via retirement account withdrawals helped some taxpayers replace lost income or destroyed assets following Hurricane Katrina. Thus, policies that reduce penalties associated with early withdrawals from retirement accounts or otherwise enhance access to this form of savings is one option for providing relief to taxpayers that have such resources to draw on. There are also timing concerns in using the tax code to provide individuals relief following a disaster. As was noted for businesses, the tax code does not lend itself to providing immediate relief. Another question regarding individual disaster tax relief is whether relief should be contingent on an individual having suffered losses due to a federally declared disaster, as opposed to some other disaster event. Through 2025, the casualty loss deduction is limited to federally declared disasters. However, after 2025, individuals may be able to claim a deduction for casualty losses arising from a fire, storm, shipwreck, or other casualty, regardless of whether the casualty was caused by an event with a federal disaster declaration. Is there something about having one's personal property destroyed in a federally declared disaster that merits special relief, different from what is provided when property is destroyed from a disaster without a federal disaster declaration? As it stands, disaster tax policy is inconsistently applied across different types of disaster events (e.g., federally declared versus non-federally declared disasters; disaster areas receiving or not receiving individual or individual and public assistance). Disaster tax policy can also be designed to prevent taxpayers from facing a tax burden triggered by receipt of disaster relief. The permanent exclusions from income for disaster relief payments and insurance living expense payments clarify that these items are excluded from income for income tax purposes, and thus do not result in additional tax liability. In response to past disasters, temporary provisions have provided that certain forgiven debt would not be treated as income for income tax purposes. Charitable Giving to Support Disaster Relief The charitable sector supports a wide range of activities associated with disaster relief and longer-term recovery. At times, Congress has acted following a disaster to provide additional tax incentives to support charitable disaster-related activities. To encourage charitable giving in the wake of a disaster, Congress has, in the past, relaxed certain income limitations associated with the deduction for charitable giving. The amount individuals can deduct for charitable use of a vehicle (the charitable mileage rate) was also temporarily increased in response to certain past disasters. Qualifying mileage reimbursements have also been allowed to be excluded from income. Other tax incentives enacted in response to disasters have encouraged particular types of charitable giving. Provisions designed to encourage charitable contributions of food inventory and books were enacted following Hurricane Katrina. The enhanced deduction for contributions of food inventory was later made permanent, while the enhanced deduction for book inventory expired in 2011. In some instances, Congress has relaxed charitable giving deadlines to allow contributions for disaster relief made early in the year to be deducted on the previous year's tax return. A key question regarding enhanced deductions for charitable giving is how much additional giving results from the policy change. Is it the tax benefits that drive giving, or individuals' desire to aid those affected by the storm? Another question to consider is whether individuals shift their giving to disaster-related causes at the expense of other charitable activities (i.e., does disaster-related giving "crowd out" other forms of charitable giving?). When evaluating enhanced charitable giving incentives following a disaster, another question is how much giving is for disaster-related charitable activities, as opposed to other activities or uses. Charitable giving incentives are often applied broadly, and it can be difficult to target them to a particular event or geographic region. Another consideration is who benefits from an enhanced charitable giving deduction. On the individual side, the value of the tax benefit of the charitable deduction is highly concentrated among high-income taxpayers. Concluding Remarks Since 2001, a variety of temporary tax policies have been used to respond to various disaster events. Following some disaster events, tax relief packages providing numerous types of tax relief were passed by Congress and became law. Following other disaster events, no temporary disaster relief was enacted. Certain permanent tax provisions provide tax relief to all affected by qualifying disasters, even in cases where specific or targeted disaster tax relief is not enacted. Disasters are inevitable. Each disaster is also unique, with damages affecting individuals, businesses, industries, and other economic sectors differently. This poses a challenge for policymakers in determining what type of disaster relief can provide efficient and effective one-size-fits-all relief. Some disasters may require a targeted and tailored policy response. Some disasters are especially catastrophic events that fundamentally change the economy of the affected region. If disasters cause economic hardships across the region, disaster relief might include broader economic development measures, ones that go beyond compensating individuals or businesses for lost income or property. Disaster tax relief as presently applied combines a base set of permanent disaster tax provisions, with additional provisions or relief provided for certain disaster events, targeted disaster zones, or time periods. Conceptually, this provides policymakers with flexibility regarding relief provided after certain disaster events. A question to consider is whether the current balance of permanent and temporary disaster tax relief provides the desired policy response efficiently and effectively. If temporary tax relief cannot be relied upon to deliver relief that is efficient and effective, one option could be to expand the set of permanent disaster-triggered tax relief provisions. Tax relief that is provided broadly, however, may not be particularly efficient, as it is not designed to provide the specific type of relief needed in the wake of a certain disaster event.	Summary:	gov_report	1,024	null	37
crs_R46316	crs_R46316_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The global pandemic of Coronavirus Disease 2019 (COVID-19) is affecting communities around the world and throughout the United States, with case counts growing daily. Containment and mitigation efforts by federal, state, and local governments have been undertaken to "flatten the curve"âthat is, to slow widespread transmission that could overwhelm the nation's health care system. The Families First Coronavirus Response Act (FFCRA, P.L. 116-127 ) is the second of three comprehensive laws enacted specifically to support the response to the pandemic. The first law, the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 ( P.L. 116-123 ), enacted on March 6, 2020, provides roughly $7.8 billion in discretionary supplemental appropriations to the Department of Health and Human Services (HHS), the Department of State, and the Small Business Administration. The law also authorizes the HHS Secretary to temporarily waive certain telehealth restrictions to make telehealth services more available during the emergency. The third law, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136 ), was enacted on March 27, 2020. In addition to a number of economic stimulus and other provisions, the CARES Act provides payment for or requires coverage of a COVID-19 vaccine, when available, for federal health care payment and services programs and most private health insurance plans; it also provides appropriations to continue support for federal, state, and local public health efforts, and for federal purchase of COVID-19 vaccines. The act also appropriates a $100 billion "Provider Relief Fund" to assist health care facilities and providers facing revenue losses and uncompensated care as a result of the pandemic. This CRS report describes the health provisions included in FFCRA as of the date of enactment, including relevant background information. Other divisions in the law contain provisions regarding HHS social services programs, federal nutrition programs, and other matters that are not within the scope of this CRS report. Other CRS reports summarize the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, and the CARES Act, and will link to this report as they become available. Some provisions described in this report have been amended by the CARES Act, and in such cases, footnotes reference the relevant CRS expert who can answer questions about the amendments. This report will not otherwise be updated or changed to reflect subsequent congressional or administrative action related to the FFCRA health provisions. The Appendix contains a list of CRS experts for follow-up on further developments. FFCRA Overview Legislative History6 On March 14, 2020, the House amended and passed H.R. 6201 , the Families First Coronavirus Response Act, by a vote of 363-40. The House considered the measure under the suspension of the rules procedure, a process that allows for expedited consideration of measures that enjoy overwhelming support. The measure had been introduced on March 11, 2020, and referred to the Committee on Appropriations as the primary committee, as well as to the Committee on the Budget and the Committee on Ways and Means. The committees took no formal action on the legislation; the suspension of the rules procedure allows the House to take up a measure (even one in committee), amend it, and pass it, all with a single vote. To suspend the rules and pass the bill requires the support of two-thirds of those voting. On March 16, 2020, the House (by unanimous consent) considered and agreed to a resolution (H.Res. 904) that directed the Clerk to make changes to the legislation when preparing the final, official version of the House-passed bill. The process of preparing this version is called "engrossment." The engrossed version was sent to the Senate. The Senate considered the bill under the terms of a unanimous consent agreement that allowed for the consideration of three amendments and required the support of 60 Senators to approve any amendment and for final passage of the bill. The Senate did not agree to any of the amendments but passed the bill, 90-8, on March 18, 2020. The President signed the bill into law the same day. It became P.L. 116-127 . Provisions in Brief The Families First Coronavirus Response Act, among other things, increases appropriations to the Department of Defense, Indian Health Service (IHS), HHS, and Veterans Health Administration for testing and ancillary services associated with the SARS-CoV-2 virus, or COVID-19. Through several provisions in FFCRA Divisions A and F, the act provides payment for or requires coverage of testing for the COVID-19 virus, along with items and services associated with such testing, such as supplies and office visits, without any cost sharing, for individuals who are covered under Medicare, including Medicare Advantage, traditional Medicaid, the State Children's Health Insurance Program (CHIP), TRICARE, Veterans health care, the Federal Employees Health Benefits (FEHB) Program, most types of private health insurance plans, the IHS, and for individuals who are uninsured (as defined under FFCRA). These coverage provisions are effective beginning on the date of enactment through any portion of the COVID-19 public health emergency (declared pursuant to Section 319 of the Public Health Service Act). The FFCRA prohibits private health insurance plans and Medicare Advantage plans from employing utilization management tools, such as prior authorization, for the COVID-19 test, or the visit to furnish it. FFCRA provides for an increase to all states, the District of Columbia, and territories in the share of Medicaid expenditures financed by the federal government, subject to specific requirements. It provides additional Medicaid funding to territories. FFCRA modifies requirements related to waiving certain Medicare telehealth restrictions during the emergency. Finally, it waives liability, with a narrow exception, for manufacturers, distributors, or providers of specified respiratory protective devices used for COVID-19 response. The Congressional Budget Office and the Joint Committee on Taxation provided a preliminary estimate of the budget effects of the Families First Coronavirus Response Act. Overall, the act is estimated to increase discretionary spending by $2.4 billion from emergency supplemental appropriations, to increase mandatory outlays by $95 billion, and to decrease revenues by $94 billion. These estimates are based on assumptions about the severity and duration of the pandemic, and they may vary substantially from final estimates to be provided later this year. Discretionary spending totals and CBO's estimates of mandatory outlays for health care programs in Division F are provided in the " Summaries of Provisions " section. Key Definitions Several key terms are referred to repeatedly throughout this report: emergency period, COVID-19 testing and testing-related items and services, and uninsured individuals. This section provides the technical definitions for those terms. Duration of Emergency Period Several provisions in Division F define the effective period of the authorized activity as "the emergency period defined in paragraph (1)(B) of section 1135(g)," or comparable construction, referring to a paragraph in Section 1135 of the Social Security Act (SSA). Section 1135 allows the Secretary of Health and Human Services (HHS Secretary) to waive specified requirements and regulations to ensure that health care items and services are available to enrollees in the Medicare, Medicaid, and CHIP programs during emergencies. Paragraph (1)(B) of SSA Section 1135(g) refers to "the public health emergency declared with respect to the COVID-19 outbreak by the Secretary on January 31, 2020, pursuant to section 319 of the Public Health Service Act [PHSA]." Hence, the referenced emergency period in provisions in Division F is the period during which this particular Section 319 public health emergency declaration âwhether initial or renewedâis in effect. However, while most Division F provisions are effective during any portion of the emergency period described above, those provisions bec a me effective as of the date of enactment of FFCRA , March 18, 2020, even though the emergency period began earlier. Division F provisions with different effective dates are so noted in the descriptions of the sections below. Definitions of COVID-19 Testing and Related Services Through several provisions in FFCRA Divisions A and F, the act provides payment for or requires coverage of testing for the COVID-19 virus, and items and services associated with such testing, such as supplies and office visits, without cost sharing. These coverage requirements apply to individuals who are covered under Medicare, traditional Medicaid, CHIP, TRICARE, Veterans health care, FEHB, the IHS, most types of private health insurance plans, and individuals who are uninsured (as defined below). COVID-19 Testing Provisions in Division F refer to COVID-19 testing in several ways: "In vitro diagnostic products (as defined in section 809.3(a) of title 21, Code of Federal Regulations) for the detection of SARS-CoV-2 or the diagnosis of the virus that causes COVID-19 that are approved, cleared, or authorized under section 510(k), 513, 515 or 564 of the Federal Food, Drug, and Cosmetic Act [FFDCA]"; "COVID-19 related items and services"; "in vitro diagnostic products"; "clinical diagnostic lab tests"; and "any COVID-19 related items and services." COVID- 19 stands for Coronavirus Disease 2019, the name of the pandemic disease. SARS-CoV- 2 is the scientific name of the virus that causes COVID-19. Diagnostic testing identifies the presence of the virus, which, in conjunction with clinical signs and symptoms, informs the diagnosis of COVID-19. In Vitro Diagnostics (IVDs) are medical devices used in the laboratory analysis of human samples, including commercial test products and instruments used in testing. IVDs may be used in a variety of settings, including a clinical laboratory, a physician's office, or in the home. IVDs are defined in FDA regulation as a specific subset of devices that include "reagents, instruments, and systems intended for use in the diagnosis of disease or other conditions ... in order to cure, mitigate, treat, or prevent disease ... [s]uch products are intended for use in the collection, preparation, and examination of specimens taken from the human body." As indicated by this definition, an IVD may be either a complete test or a component of a test, and in either case, the IVD comes under FDA's regulatory purview. FDA premarket review of IVDs may include Premarket Approval (PMA); notification and clearance (510(k)); authorization pursuant to de novo classification; or authorization for use in an emergency pursuant to an Emergency Use Authorization (EUA) based on circumstances (e.g., a public health emergency determination) and the risk the device poses. Although the terms and definitions used to refer to COVID-19 testing vary throughout FFCRA, they do not necessarily reflect actual differences in the types of tests and ancillary services that are or must be covered. Some of these definitions and terms were amended in the CARES Act. In summarizing FFCRA provisions in this CRS Report, mention of any of these definitions of a COVID-19 test, as described above, is referred to as " COVID-19 testing ." Testing-Related Items and Services Sections in FFCRA Divisions A and F that refer to COVID-19 testing generally also refer to health care items and services furnished in relation to testing, such as supplies and office visits, although definitions vary. FFCRA Section 6001(a)(2) defines these ancillary services, in the context of private health insurance coverage, as [i]tems and services furnished to an individual during health care provider office visits (which term in this paragraph includes in-person visits and telehealth visits), urgent care center visits, and emergency room visits that result in an order for or administration of an in vitro diagnostic product described in paragraph (1), but only to the extent such items and services relate to the furnishing or administration of such product or to the evaluation of such individual for purposes of determining the need of such individual for such product. This definition could encompass additional diagnostic testing associated with the visit, which may include additional laboratory tests and imaging studies. However, it would not encompass treatment for COVID-19 illnesses . See the " Section 6001. Coverage of Testing for COVID-19 " section below regarding enforcement and implementation of this section's provisions. Applicable References Provisions in Division F that use language discussed above, comparable construction, or cross-reference, are as follows: Section 6001(a)(1)-(2), regarding specified types of private health insurance coverage. Section 6004(a)(1)(C), which amends SSA Section 1905(a)(3) regarding Medicaid medical assistance, and Section 6004(a)(2), which amends SSA Sections 1916 and 1916A regarding Medicaid cost-sharing. Both provisions refer to SSA Section 1905(a)(3), as amended. Section 6004(b)(1), which amends SSA Section 2103(c), regarding CHIP child coverage, and Section 6004(b)(2), which amends SSA Section 2112(b)(4), regarding CHIP pregnant women coverage. Both provisions reference SSA Section 1905(a)(3), as amended. Section 6006, regarding TRICARE, veterans health care, and federal civilian employee health coverage (FEHB), each referencing FFCRA Section 6001(a)(1)-(2). Section 6007, regarding IHS referencing FFCRA Section 6001(a)(1)-(2). In addition, appropriations provided in FFCRA Division A to the Defense Health Program, Veterans Health Administration, IHS, and the HHS Public Health and Social Services Emergency Fund are to be used, in whole or in part, to pay for COVID-19 testing and related services, with reference to Section 6001(a) of the act. However, Division F sections pertaining to Medicare, Medicare Advantage, and the Medicaid and CHIP programs do not reference FFCRA Section 6001(a)(1)-(2) with respect to the definition of COVID-19 tests, administration of the tests, or related items and services, but rather amend the Social Security Act directly to require coverage of these things. Definition of the Uninsured Two provisions in FFCRA facilitate access to COVID-19 testing for "uninsured individuals": Division A, Title V, and Division F, Section 6004. Title V provides funding to the National Medical Disaster System (NDMS) that can be used to reimburse health care providers for costs related to COVID-19 testing for uninsured individuals, as defined in that section (and as explained below). Section 6004 provides states an option to use Medicaid as a vehicle to provide COVID-19 testing without cost to uninsured individuals, as defined in that section. The respective definitions of uninsured individuals are similar but not identical. In Title V, "uninsured individual" means an individual who is not enrolled in coverage in any of the following three categories: A federal health care program, as defined: This includes but is not limited to Medicare, Medicaid, CHIP, TRICARE, and the VA health care system. Most types of private health insurance plans: This includes individual health insurance coverage and group plans, whether fully insured or self-insured. The explanation of these coverage types and the applicability of Section 6001 to them also apply to this provision. The Federal Employees Health Benefits ( FEHB ) Program: See the " Section 6006. Application with Respect to TRICARE, Coverage for Veterans, and Coverage for Federal Civilians " section below for background on FEHB. In other words, individuals enrolled in coverage in one of these three categories are considered insured and are not eligible for the testing assistance described in Title V. Note that individuals with certain types of private coverage may be considered uninsured, due to the coverage definitions cited. The definition of individual health insurance coverage does not include a type of coverage called short-term, limited duration insurance (STLDI) (see " Section 6001. Coverage of Testing for COVID-19 "). Thus, individuals with STLDI appear to be considered uninsured for the purpose of eligibility for assistance under Title V. Section 6004 includes additional groups in the definition of "uninsured individual" that applies under such sections. Specifically, for the purposes of Section 6004, uninsured individuals are defined as those who are not enrolled in (1) a federal health care program, as defined; (2) a specified type of private health insurance plan; or (3) FEHB. Such individuals are also not Medicaid-eligible under one of Medicaid's mandatory eligibility pathways (e.g., the poverty-related pregnant women and child pathways, or the Medicaid expansion pathway under the Patient Protection and Affordable Care Act [ACA; P.L. 111-148 , as amended]). The first three categories are defined and referenced the same way in Section 6004 as they are in Title V, although wording and punctuation differ slightly. See the discussion of Section 6004 in this report for more information about the additional criteria related to COVID-19 testing without cost-sharing under Medicaid. Summaries of Provisions Division AâSecond Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 This section describes the health care-related supplemental appropriations in FFCRA Division A for the Defense Health Program, the Veterans Health Administration, and HHS accounts, and applicable general provisions. All such appropriations are designated as an emergency requirement and, as a result, are not constrained by the statutory discretionary spending limits (often referred to as budget caps). Title II: Department of Defense, Defense Health Program The Defense Health Program (DHP) is an account in the Department of Defense budget that funds various functions of the Military Health System. These functions include the provision of health care services, certain medical readiness activities, expeditionary medical capabilities, education and training programs, medical research, management and headquarters activities, facilities sustainment, procurement, and civilian personnel. For FY2020, Congress appropriated $34.4 billion to the DHP. FFCRA appropriates an additional $82 million to the DHP for COVID-19 testing, administration of the test, and related items and services outlined in FFCRA Section 6006(a). (For a summary of this section, see " Definitions of COVID-19 Testing and Related Services " and " Section 6006. Application with Respect to TRICARE, Coverage for Veterans, and Coverage for Federal Civilians .") The additional funds are designated as emergency spending and are to remain available until September 30, 2022. Title IV: Department of Health and Human Services, Indian Health Service The IHS within HHS is the lead federal agency charged with improving the health of American Indians and Alaska Natives. In FY2019, IHS provided health care to approximately 2.6 million eligible American Indians/Alaska Natives. IHS's FY2020 appropriation was $6.1 billion, with $4.3 billion appropriated to the Indian Health Services account, which supports the provision of clinical services and public health activities. The services provided at IHS facilities vary, with some facilities providing inpatient services, laboratory testing services, and emergency care, while others focus on outpatient primary care services. IHS does not offer a standard benefit package, nor is it required to cover certain services within its facilities or when it authorizes payment for services to its beneficiaries outside of the IHS system (see " Section 6007. Coverage of Testing for COVID-19 at No Cost Sharing for Indians Receiving Purchased/Referred Care "). FFCRA appropriates an additional $64 million for COVID-19 testing, administration of the test, and related items and services as specified in FFCRA Section 6007. (See " Definitions of COVID-19 Testing and Related Services " and " Section 6007. Coverage of Testing for COVID-19 at No Cost Sharing for Indians Receiving Purchased/Referred Care .") The section also specifies that the additional funds are to be allocated at the discretion of the IHS director. The additional funds are designated as emergency spending and are to remain available until September 30, 2022. Title V. Department of Health and Human Services, Public Health and Social Services Emergency Fund There is no federal assistance program designed purposefully to pay the uncompensated costs of health care for the uninsured and underinsured necessitated by a public health emergency or disaster. In general, there has been no consensus that doing so should be a federal responsibility. Nonetheless, Congress has provided appropriations for several limited mechanisms to address uncompensated health care costs in response to previous incidents. The health care needs of uninsured and underinsured individuals and the financial pressures many individuals and their health care providers are facing during the COVID-19 outbreak have spurred congressional interest in these approaches. Among other forms of assistance, the CARES Act ( P.L. 116-136 ) appropriates a $100 billion "Provider Relief Fund" to assist health care facilities and providers facing revenue losses and uncompensated care as a result of the pandemic. FFCRA uses the National Disaster Medical System (NDMS) Definitive Care Reimbursement Program as the mechanism for federal payment for COVID-19 testing and related services for uninsured individuals. Historically, NDMS has paid for health care items and services at between 100% and 110% of the applicable Medicare rate, and the Centers for Medicare & Medicaid Services (CMS) has processed payments. To fund this approach, FFCRA provides $1 billion to the Public Health and Social Services Emergency Fund (PHSSEF), an account used in appropriations acts to provide the HHS Secretary with one-time or emergency funding, as well as annual funding for the office of the HHS Assistance Secretary for Preparedness and Response (ASPR). Covered COVID-19 testing, administration of the test, and related services are as defined in Subsection 6001(a) of the act. (See " Definitions of COVID-19 Testing and Related Services .") An uninsured individual is defined, for purposes of this section, as someone who is not enrolled in (1) a federal health care program, as defined; (2) a specified type of private health insurance plan; or (3) FEHB. (See " Definition of the Uninsured " for more information.) The additional funds are designated as emergency spending and are to remain available until expended. Title VI. Department of Veterans Affairs, Veterans Health Administration The Veterans Health Administration (VHA) of the Department of Veterans' Affairs (VA) provides health care to eligible veterans and their dependents who meet certain criteria as authorized by law. The VHA is funded through five appropriations accounts: (1) medical services, (2) medical community care, (3) medical support and compliance, (4) medical facilities, and (5) medical and prosthetic research. The first four accounts provide funding for medical care for veterans. FFCRA provides $60 million in supplemental appropriations for FY2020 to the VHAâ$30 million for medical services and $30 million for medical community careâfor COVID-19 testing, administration of the test, and related items and services for visits for veterans. (See " Definitions of COVID-19 Testing and Related Services " and " Veterans .") The additional funds are designated as emergency spending and are to remain available until September 30, 2022. Title VII. General Provisions, Division A This title provides a reporting requirement (Section 1701) which states that each amount appropriated or made available by Division A is in addition to amounts otherwise appropriated for the fiscal year involved (Section 1703), and that unless otherwise provided, appropriations in Division A are not available for obligation beyond FY2020 (Section 1704). Title VII also includes Section 1702. This section was repealed in its entirety by Section 18115 of the CARES Act ( P.L. 116-136 ), which replaced it with a requirement for all laboratories carrying out COVID-19 testing to report testing data to HHS, as specified. An explanation of the repealed provision is provided here, for completeness. Section 1702: Repealed Generally, laboratories report testing results for specified diseases and conditions (called notifiable conditions ) directly to state or territorial (jurisdictional) health departments, pursuant to requirements in jurisdictional law. Through its National Notifiable Diseases Surveillance System (NNDSS), the HHS Centers for Disease Control and Prevention (CDC) works with jurisdictions and the Council of State and Territorial Epidemiologists (CSTE) to track national notifiable conditions, mostly infectious diseases and some noninfectious conditions (e.g., lead poisoning). Usually, such data are provided to CDC voluntarily. COVID-19 is a reportable disease in all reporting jurisdictions, and CDC receives data on COVID-19 cases and laboratory test results through NNDSS from all jurisdictions, as well as directly from some commercial laboratories. In addition, the FDA often includes, as a condition of an Emergency Use Authorization (EUA), the requirement that laboratories carrying out the EUA test comply with all relevant state and local reporting requirements. FFCRA Section 1702 would have required all states and local governments receiving funding under Division A to report real-time and aggregated data on both testing (tests performed) and test results to the respective State Emergency Operations Center. These data would then have been transmitted to the CDC. Division FâHealth Provisions This section describes all of the provisions included in FFCRA Division F. Some provisions described below have been amended by the CARES Act ; in such cases, foot n otes reference the relevant CRS expert who can answer questions about the amendment s . In some cases, the amendments made by the CARES Act are substantial, in which case, the footnote may also provide a brief description of the amendment . Section 6001. Coverage of Testing for COVID-19 Private health insurance is the predominant source of health insurance coverage in the United States. In general, consumers may obtain individual health insurance coverage directly from an insurer, or they may enroll in a group health plan through their employer or another sponsor . Group health plan sponsors may finance coverage themselves (self-insure) or purchase (fully insured) coverage from an insurer. Covered benefits and consumer costs may vary by plan, subject to applicable federal and state requirements. The federal government may regulate all the coverage types noted above, and states may regulate all but self-insured group plans. Federal and state requirements may vary by coverage type. Some federal requirements apply to all coverage types noted above, while other federal requirements only apply to certain coverage types. Prior to the enactment of FFCRA, there were no federal requirements specifically mandating private health insurance coverage of items or services related to COVID-19 testing. In recent weeks, some states have announced relevant coverage requirements, and some insurers have clarified or expanded their policies to include relevant coverage. FFCRA newly requires most private health insurance plans to cover COVID-19 testing, administration of the test, and related items and services (see " Definitions of COVID-19 Testing and Related Services "). The coverage must be provided without consumer cost-sharing, including deductibles, copayments, or coinsurance. Prior authorization or other utilization management requirements are prohibited. These requirements apply to individual health insurance coverage and to group plans, whether fully insured or self-insured. This includes plans sold on and off the individual and small group exchanges. Per the definition of individual health insurance coverage cited in the act, the requirements do not apply to short-term, limited-duration plans. The requirements do apply to grandfathered plans , which are individual or group plans in which at least one individual was enrolled as of enactment of the ACA (March 23, 2010), and that continue to meet certain criteria. Plans that maintain their grandfathered status are exempt from some federal requirements, but FFCRA specifies that Section 6001 applies to them. The coverage requirements in this act apply only to the specified items and services that are furnished during the emergency period described in the act (see " Duration of Emergency Period "), as of the date of enactment (March 18, 2020). Subsection (b) states that the Secretaries of HHS, Labor, and the Treasury are required to enforce this section's provisions as if the provisions were incorporated into the PHSA, Employee Retirement Income Security Act (ERISA), and Internal Revenue Code (IRC), respectively. Subsection (c) states that those Secretaries also have authority to implement the provisions of this section "through sub-regulatory guidance, program instruction, or otherwise." CBO preliminarily estimates that Section 6001 will decrease federal revenues by $4 million and increase federal outlays by $7 million over the FY2020âFY2022 period. Section 6002. Waiving Cost Sharing Under the Medicare Program for Certain Visits Relating to Testing for COVID-19 Medicare Part B covers physicians' services, outpatient hospital services, durable medical equipment, and other medical services. Most physicians, providers, and practitioners are subject to limits on amounts they can bill beneficiaries for covered services, and they can bill the beneficiary for only the 20% coinsurance of the Medicare payment rate plus any unmet deductible. Part B also covers outpatient clinical laboratory tests provided by Medicare-participating laboratories, such as certain blood tests, urinalysis, and some screening tests, including the test for the coronavirus that causes COVID-19. These services may be furnished by labs located in hospitals and physician offices, as well as by independent labs. Beneficiaries have no coinsurance, co-payments, or deductibles for covered clinical lab services. FFCRA eliminates the Medicare Part B beneficiary cost-sharing for provider visits during which a coronavirus diagnostic test is administered or ordered during the emergency period (see " Duration of Emergency Period "). Beneficiaries are not responsible for any coinsurance payments or deductibles for any specified COVID-19 testing-related service, defined as a medical visit that falls within the evaluation and management service codes for the following categories: office and other outpatient services; hospital observation services; emergency department services; nursing facility services; domiciliary, rest home, or custodial care services; home services; or online digital evaluation and management services. The elimination of beneficiary cost-sharing for COVID-19 testing-related services applies to Medicare payment under the hospital outpatient prospective payment system, the physician fee schedule, the prospective payment system for federally qualified health centers, the outpatient hospital system payment system, and the rural health clinic services payment system. The HHS Secretary is to provide appropriate claims coding modifiers to identify the services for which beneficiary cost-sharing is waived. The HHS Secretary is allowed to implement this section by program instruction or otherwise. CBO preliminarily estimates that enacting Sections 6002 and 6003 will increase direct spending by $6.7 billion over the FY2020-FY2022 period. Section 6003. Coverage of Testing for COVID-10 at No Cost Sharing Under the Medicare Advantage Program Medicare Advantage (MA) is an alternative way for Medicare beneficiaries to receive covered benefits. Under MA, private health plans are paid a per-person monthly amount to provide all Medicare-covered benefits (except hospice) to beneficiaries who enroll in their plan. In general, cost sharing (copayments and coinsurance) under an MA plan must be actuarially equivalent to cost sharing under original Medicare, but cost sharing for a specific item or service may vary from amounts required under original Medicare. Private plans may use different techniques to influence the medical care used by enrollees, such as requiring enrollees to receive a referral to see specialists, or requiring prior approval or authorization from the plan before a service will be paid for. FFCRA requires MA plans to cover COVID-19 testing, the administration of the test, and related items and services during the emergency period (see the sections " Definitions of COVID-19 Testing and Related Services " and " Duration of Emergency Period "). Plans are prohibited from charging cost sharing for those items and services, and are prohibited from using prior authorization or other utilization management techniques, with respect to the coverage of the test or ancillary services. The HHS Secretary is allowed to implement this section by program instruction or otherwise. CBO preliminarily estimates that enacting Sections 6002 and 6003 will increase direct federal spending by $6.7 billion over the FY2020-FY2022 period. Section 6004. Coverage at No Cost Sharing Under Medicaid and CHIP Medicaid Background Medicaid is a federal-state program that finances the delivery of primary and acute medical services, as well as long-term services and supports, to a diverse low-income population. Medicaid is financed jointly by the federal government and the states. States must follow broad federal rules to receive federal matching funds, but they have flexibility to design their own versions of Medicaid within the federal statute's basic framework. This flexibility results in variability across state Medicaid programs. Medicaid coverage includes a variety of primary and acute-care services, as well as long-term services and supports (LTSS). Not all Medicaid enrollees have access to the same set of services. An enrollee's eligibility pathway determines the available services within a benefit package. Most Medicaid beneficiaries receive services in the form of what is called traditional Medicaid. In general, under traditional Medicaid coverage, state Medicaid programs must cover specific required services listed in statute (e.g., inpatient and outpatient hospital services, physician's services, or laboratory and x-ray services) and may elect to cover certain optional services (e.g., prescription drugs, case management, or physical therapy services). Under alternative benefit plans (ABPs), by contrast, states must provide comprehensive benefit coverage that is based on a coverage benchmark rather than a list of discrete items and services, as under traditional Medicaid. Coverage under an ABP must include at least the essential health benefits (EHBs) that most plans in the private health insurance market are required to furnish. States that choose to implement the ACA Medicaid expansion are required to provide ABP coverage to the individuals eligible for Medicaid through the expansion (with exceptions for selected special-needs subgroups), and are permitted to extend such coverage to other groups. Beneficiary cost sharing (e.g., premiums and co-payments) is limited under the Medicaid program. States can require certain beneficiaries to share in the cost of Medicaid services, but there are limits on (1) the amounts that states can impose, (2) the beneficiary groups that can be required to pay, and (3) the services for which cost sharing can be charged. CHIP Background The State Children's Health Insurance Program (CHIP) is a federal-state program that provides health coverage to uninsured children and certain pregnant women with annual family income too high to qualify for Medicaid. CHIP is jointly financed by the federal government and states, and is administered by the states. Like Medicaid, the federal government sets basic requirements for CHIP, but states have the flexibility to design their own version of CHIP within the federal government's framework. As a result, CHIP programs vary significantly from state to state. States may design their CHIP programs as (1) a CHIP Medicaid expansion, (2) a separate CHIP program, or (3) a combination approach, where the state operates a CHIP Medicaid expansion and one or more separate CHIP programs concurrently. CHIP benefit coverage and cost-sharing rules depend on program design. CHIP Medicaid expansions must follow the federal Medicaid rules for benefits and cost sharing. For separate CHIP programs, the benefits are permitted to look more like private health insurance, and states may impose cost sharing, such as premiums or enrollment fees, with a maximum allowable amount that is tied to annual family income. Regardless of the choice of program design, all states must cover emergency services, well-baby and well-child care including age-appropriate immunizations, and dental services. FFCRA Provision FFCRA adds COVID-19 testing and related services the list of Medicaid mandatory services under traditional Medicaid benefits for the period beginning March 18, 2020, through the duration of the public health emergency as declared by the HHS Secretary pursuant to Section 319 of the PHSA (see the sections " Definitions of COVID-19 Testing and Related Services " and " Duration of Emergency Period "). States and territories are prohibited from charging beneficiary cost sharing for such testing, or for testing-related state plan services furnished during this period. FFCRA also permits states to extend COVID-19 testing, testing-related state plan services, testing-related visit and the administration of the testing without cost sharing (as referenced earlier in this provision) to uninsured individuals during the specified public health emergency period. For the purposes of this provision, uninsured individuals are defined as those who are not Medicaid-eligible under one of Medicaid's mandatory eligibility pathways (e.g., the poverty-related pregnant women and child pathways, or the ACA Medicaid expansion pathway), and who are not enrolled in (1) a federal health care program (e.g., Medicare, Medicaid, CHIP, or TRICARE); (2) a specified type of private health insurance plan (e.g., individual health insurance coverage and group plans, whether fully insured or self-insured); or (3) FEHB (see " Definition of the Uninsured "). The law provides 100% federal medical assistance percentage (FMAP or federal matching rate) for medical assistance and administrative costs associated with uninsured individuals who are eligible for Medicaid under this provision. The law also requires CHIP programs (regardless of program design) to cover COVID-19 testing for CHIP enrollees for the period beginning March 18, 2020, through the duration of the public health emergency period as specified (see the sections " Definitions of COVID-19 Testing and Related Services " and " Duration of Emergency Period "). States are prohibited from charging beneficiary cost sharing for such testing, or for testing-related visits furnished to CHIP enrollees during this period. CBO preliminarily estimates that Section 6004 will increase direct federal spending by a total of $1.9 billion in FY2020 and FY2021. Section 6005. Treatment of Personal Respiratory Protective Devices as Covered Countermeasures In 2005 Congress passed the Public Readiness and Emergency Preparedness Act (PREP Act), which authorizes the federal government to waive liability (except for willful misconduct) for manufacturers, distributors, and providers of medical countermeasures, such as drugs and medical supplies, that are needed to respond to a public health emergency. The act also authorizes the federal government to establish a program to compensate eligible individuals who suffer injuries from administration or use of products covered by the PREP Act's immunity provisions. FFCRA explicitly adds to the list of PREP Act-covered countermeasures any personal respiratory protective device that is (1) approved by the National Institute for Occupational Safety and Health (NIOSH); (2) subject to an emergency use authorization (EUA); and (3) used for the COVID-19 response, retroactive from January 27, 2020, and through October 1, 2024. The CARES Act, Section 3103, amends this provision to define a covered personal respiratory protective device as one that "is approved by [NIOSH], and that the Secretary determines to be a priority for use during a public health emergency declared under section 319." This amendment removes the requirement for an FDA authorization and extends PREP Act authority to these devices during both the COVID-19 emergency period and any future public health emergencies declared pursuant to PHSA Section 319. CBO did not provide an estimate of this provision. Section 6006. Application with Respect to TRICARE, Coverage for Veterans, and Coverage for Federal Civilians TRICARE Under Chapter 55 of Title 10, U.S. Code , the Department of Defense administers a statutory health entitlement to approximately 9.5 million beneficiaries (i.e., servicemembers, military retirees, and family members). These entitlements are delivered through the Military Health System (MHS), which offers health care services in military hospitals and clinicsâknown as military treatment facilitiesâand through civilian health care providers participating in TRICARE. With the exception of active duty servicemembers, MHS beneficiaries may have a choice of TRICARE plan options depending on their status and geographic location. Each plan option has different beneficiary cost-sharing features, including annual enrollment fees, deductibles, copayments, and an annual catastrophic cap. FFCRA requires the Secretary of Defense to waive any TRICARE cost-sharing requirements related to COVID-19 testing, administration of the test, and related items and services provided during an associated health care office, urgent care, or emergency department visits during the emergency period (see the sections " Definitions of COVID-19 Testing and Related Services " and " Duration of Emergency Period "). Veterans All veterans enrolled in the VA health care system are eligible for a standard medical package that includes laboratory services. Currently, some veterans are required to pay copayments for medical services and outpatient medications related to the treatment of a nonservice-connected condition. Any health service or medication provided in connection to the treatment of a service-connected condition or disability is always furnished without cost sharing. In addition, the VA does not charge copayments for preventive screenings, such as those for infectious diseases; cancers; heart and vascular diseases; mental health conditions and substance abuse; metabolic, obstetric, and gynecological conditions; and vision disorders, as well as regular recommended immunizations. Generally, laboratory services are also expressly exempt from copayment requirements. FFCRA requires the VA Secretary to waive any copayment or other cost-sharing requirements related to COVID-19 testing, administration of the test, and related items and services for visits during the emergency period (see the sections " Definitions of COVID-19 Testing and Related Services " and " Duration of Emergency Period "). Federal Civilians The FEHB Program provides health insurance to federal employees, retirees, and their dependents. Cost-sharing requirements (e.g., deductibles, co-payments, and coinsurance amounts) vary by plans participating in the FEHB Program. For some services, such as the preventive care services outlined in the ACA, plans are not allowed to impose cost sharing. FFCRA requires that no federal civil servants enrolled in a health benefits plan or FEHB enrollees may be required to pay a copayment or other cost sharing related to COVID-19 testing, administration of the test, related items and services for visits during the emergency period (see the sections " Definitions of COVID-19 Testing and Related Services " and " Duration of Emergency Period "). Section 6007. Coverage of Testing for COVID-19 at No Cost Sharing for Indians Receiving Purchased/Referred Care IHS provides health care to eligible American Indians/Alaska Natives either directly or through facilities and programs operated by Indian tribes or tribal organizations through self-determination contracts and self-governance compacts authorized in the Indian Self-Determination and Education Assistance Act (ISDEAA). IHS also provides services to urban Indians through grants or contracts to Urban Indian Organizations (UIOs). The services provided vary by facility, and IHS does not offer a standard benefit package, nor is it required to cover certain services that its beneficiaries may receive at facilities outside of IHS. When services are not available at an IHS facility, the IHS facilities may authorize payment through the Purchased Referred Care Program (PRC). Generally, PRC requires prior approval except in cases of emergency. PRC funds are limited, and as such, not all PRC claims are authorized and PRC is not available to UIOs. To be authorized, claims must meet medical priority levels, individuals must not be eligible for another source of coverage (e.g., Medicaid or private health insurance), and individuals must live in certain geographic areas. FFCRA requires IHS to pay for the cost of COVID-19 testing and related items and services, as described in Section 6001(a), without any cost-sharing requirements, from the date of enactment (i.e., March 18, 2020) throughout the emergency period (see the sections " Definitions of COVID-19 Testing and Related Services " and " Duration of Emergency Period "). This requirement applies to any Indian receiving services through the IHS including through UIOs. It also specifies that the requirement to waive cost-sharing requirements applies regardless of whether the testing and related services were authorized through PRC. Section 6008. Temporary Increase of Medicaid FMAP Medicaid is jointly financed by the federal government and the states. The federal government's share of a state's expenditures for most Medicaid services is called the federal medical assistance percentage (FMAP) rate, which varies by state and is designed so that the federal government pays a larger portion of Medicaid costs in states with lower per capita incomes relative to the national average (and vice versa for states with higher per capita incomes). Exceptions to the regular FMAP rate have been made for certain states, situations, populations, providers, and services. In the past, there were two temporary FMAP exceptions to provide states with fiscal relief due to recessions. They were provided through the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JRTRRA, P.L. 108-27 ) and the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 ). To be eligible for both of these temporary FMAP increases, states had to abide by some requirements. These requirements varied in the two FMAP increases, but for both increases, states were required to maintain Medicaid "eligibility standards, methodologies, and procedures" and ensure that local governments did not pay a larger percentage of the state's nonfederal Medicaid expenditures than otherwise would have been required. FFCRA provides an increase to the FMAP rate for all states, the District of Columbia, and the territories of 6.2 percentage points for each calendar quarter occurring during the period beginning on the first day of the emergency period (i.e., January 1, 2020) and ending on the last day of the calendar quarter in which the last day of the public health emergency period ends (see " Duration of Emergency Period "). States, the District of Columbia, and the territories will not receive this FMAP rate increase if (1) the state's Medicaid "eligibility standards, methodologies, or procedures" are more restrictive than what was in effect on January 1, 2020; (2) the amount of premiums imposed by the state exceeds the amount as of January 1, 2020; (3) the state does not maintain eligibility for individuals enrolled in Medicaid on the date of enactment (i.e., March 18, 2020) or for individuals who enroll during the emergency period through the end of the month in which the emergency period ends (unless the individual requests a voluntary termination of eligibility or the individual ceases to be a resident of the state); or (4) the state does not provide coverage (without the imposition of cost sharing) for any testing services and treatments for COVID-19 (including vaccines, specialized equipment, and therapies). FFCRA adds another condition for the FMAP rate increase. Specifically, states, the District of Columbia, and the territories cannot require local governments to fund a larger percentage of the state's nonfederal Medicaid expenditures for the Medicaid state plan or Medicaid disproportionate share hospital (DSH) payments than what was required on March 11, 2020. CBO preliminarily estimates that Section 6008 will increase direct spending by about $50.0 billion over the FY2020-FY2022 period. Section 6009. Increase in Medicaid Allotments for Territories Medicaid financing for the territories (i.e., America Samoa, Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin Islands) is different than the financing for the 50 states and the District of Columbia. Federal Medicaid funding to the states and the District of Columbia is open-ended, but the Medicaid programs in the territories are subject to annual federal capped funding. Federal Medicaid funding for the territories comes from different sources. The permanent source of federal Medicaid funding for the territories is the annual capped funding. Currently, the Medicaid annual capped funding for the territories is supplemented by additional funding for FY2020 and FY2021 that was provided through the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ). FFCRA increases the additional funding available for each territory for FY2020 and FY2021. The aggregate additional funding for the territories increases from $3.0 billion to $3.1 billion for FY2020 and $3.1 billion to $3.2 billion for FY2021. CBO preliminarily estimates that Section 6009 increases the allotment amount, and thus direct spending, by $204 million over the FY2020-FY2021 period. Section 6010. Clarification Relating to Secretarial Authority Regarding Medicare Telehealth Services Furnished During COVID-19 Emergency Periods Medicare coverage under Part B (fee-for-service) for telehealth services is defined under SSA Sec. 1834(m), which places certain conditions on such care including who can furnish and be paid for the service, where the patient is located (the originating site), where the physician is located (the distant site), and the types of services that are covered. Recent legislation has modified some of the conditions under which telehealth services may be furnished under Medicare. The Coronavirus Preparedness and Response Supplemental Appropriations Act ( P.L. 116-123 ), Division B, Sec. 102, added certain Medicare telehealth restrictions to the list of applicable conditions for which the Secretary could temporarily waive or modify program requirements or regulations during the COVID-19 emergency period. (See " Duration of Emergency Period ".) The provision also defined a qualified telehealth provider, requiring a prior relationship within the past three years between the patient and the provider under Medicare. FFCRA expands the definition of a qualified provider to include those who had provider-patient relationships within the past three years outside of Medicare. Appendix. CRS Experts and Contact Information Below is a list of the health care provisions in FFCRA with the name and contact information for the CRS expert on that provision. In some cases, more than one expert contributed to a section, in which case their topics of expertise are also included. Summary:	null	96	52,908	52,910	52,910	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The global pandemic of Coronavirus Disease 2019 (COVID-19) is affecting communities around the world and throughout the United States, with case counts growing daily. Containment and mitigation efforts by federal, state, and local governments have been undertaken to "flatten the curve"âthat is, to slow widespread transmission that could overwhelm the nation's health care system. The Families First Coronavirus Response Act (FFCRA, P.L. 116-127 ) is the second of three comprehensive laws enacted specifically to support the response to the pandemic. The first law, the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 ( P.L. 116-123 ), enacted on March 6, 2020, provides roughly $7.8 billion in discretionary supplemental appropriations to the Department of Health and Human Services (HHS), the Department of State, and the Small Business Administration. The law also authorizes the HHS Secretary to temporarily waive certain telehealth restrictions to make telehealth services more available during the emergency. The third law, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136 ), was enacted on March 27, 2020. In addition to a number of economic stimulus and other provisions, the CARES Act provides payment for or requires coverage of a COVID-19 vaccine, when available, for federal health care payment and services programs and most private health insurance plans; it also provides appropriations to continue support for federal, state, and local public health efforts, and for federal purchase of COVID-19 vaccines. The act also appropriates a $100 billion "Provider Relief Fund" to assist health care facilities and providers facing revenue losses and uncompensated care as a result of the pandemic. This CRS report describes the health provisions included in FFCRA as of the date of enactment, including relevant background information. Other divisions in the law contain provisions regarding HHS social services programs, federal nutrition programs, and other matters that are not within the scope of this CRS report. Other CRS reports summarize the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, and the CARES Act, and will link to this report as they become available. Some provisions described in this report have been amended by the CARES Act, and in such cases, footnotes reference the relevant CRS expert who can answer questions about the amendments. This report will not otherwise be updated or changed to reflect subsequent congressional or administrative action related to the FFCRA health provisions. The Appendix contains a list of CRS experts for follow-up on further developments. FFCRA Overview Legislative History6 On March 14, 2020, the House amended and passed H.R. 6201 , the Families First Coronavirus Response Act, by a vote of 363-40. The House considered the measure under the suspension of the rules procedure, a process that allows for expedited consideration of measures that enjoy overwhelming support. The measure had been introduced on March 11, 2020, and referred to the Committee on Appropriations as the primary committee, as well as to the Committee on the Budget and the Committee on Ways and Means. The committees took no formal action on the legislation; the suspension of the rules procedure allows the House to take up a measure (even one in committee), amend it, and pass it, all with a single vote. To suspend the rules and pass the bill requires the support of two-thirds of those voting. On March 16, 2020, the House (by unanimous consent) considered and agreed to a resolution (H.Res. 904) that directed the Clerk to make changes to the legislation when preparing the final, official version of the House-passed bill. The process of preparing this version is called "engrossment." The engrossed version was sent to the Senate. The Senate considered the bill under the terms of a unanimous consent agreement that allowed for the consideration of three amendments and required the support of 60 Senators to approve any amendment and for final passage of the bill. The Senate did not agree to any of the amendments but passed the bill, 90-8, on March 18, 2020. The President signed the bill into law the same day. It became P.L. 116-127 . Provisions in Brief The Families First Coronavirus Response Act, among other things, increases appropriations to the Department of Defense, Indian Health Service (IHS), HHS, and Veterans Health Administration for testing and ancillary services associated with the SARS-CoV-2 virus, or COVID-19. Through several provisions in FFCRA Divisions A and F, the act provides payment for or requires coverage of testing for the COVID-19 virus, along with items and services associated with such testing, such as supplies and office visits, without any cost sharing, for individuals who are covered under Medicare, including Medicare Advantage, traditional Medicaid, the State Children's Health Insurance Program (CHIP), TRICARE, Veterans health care, the Federal Employees Health Benefits (FEHB) Program, most types of private health insurance plans, the IHS, and for individuals who are uninsured (as defined under FFCRA). These coverage provisions are effective beginning on the date of enactment through any portion of the COVID-19 public health emergency (declared pursuant to Section 319 of the Public Health Service Act). The FFCRA prohibits private health insurance plans and Medicare Advantage plans from employing utilization management tools, such as prior authorization, for the COVID-19 test, or the visit to furnish it. FFCRA provides for an increase to all states, the District of Columbia, and territories in the share of Medicaid expenditures financed by the federal government, subject to specific requirements. It provides additional Medicaid funding to territories. FFCRA modifies requirements related to waiving certain Medicare telehealth restrictions during the emergency. Finally, it waives liability, with a narrow exception, for manufacturers, distributors, or providers of specified respiratory protective devices used for COVID-19 response. The Congressional Budget Office and the Joint Committee on Taxation provided a preliminary estimate of the budget effects of the Families First Coronavirus Response Act. Overall, the act is estimated to increase discretionary spending by $2.4 billion from emergency supplemental appropriations, to increase mandatory outlays by $95 billion, and to decrease revenues by $94 billion. These estimates are based on assumptions about the severity and duration of the pandemic, and they may vary substantially from final estimates to be provided later this year. Discretionary spending totals and CBO's estimates of mandatory outlays for health care programs in Division F are provided in the " Summaries of Provisions " section. Key Definitions Several key terms are referred to repeatedly throughout this report: emergency period, COVID-19 testing and testing-related items and services, and uninsured individuals. This section provides the technical definitions for those terms. Duration of Emergency Period Several provisions in Division F define the effective period of the authorized activity as "the emergency period defined in paragraph (1)(B) of section 1135(g)," or comparable construction, referring to a paragraph in Section 1135 of the Social Security Act (SSA). Section 1135 allows the Secretary of Health and Human Services (HHS Secretary) to waive specified requirements and regulations to ensure that health care items and services are available to enrollees in the Medicare, Medicaid, and CHIP programs during emergencies. Paragraph (1)(B) of SSA Section 1135(g) refers to "the public health emergency declared with respect to the COVID-19 outbreak by the Secretary on January 31, 2020, pursuant to section 319 of the Public Health Service Act [PHSA]." Hence, the referenced emergency period in provisions in Division F is the period during which this particular Section 319 public health emergency declaration âwhether initial or renewedâis in effect. However, while most Division F provisions are effective during any portion of the emergency period described above, those provisions bec a me effective as of the date of enactment of FFCRA , March 18, 2020, even though the emergency period began earlier. Division F provisions with different effective dates are so noted in the descriptions of the sections below. Definitions of COVID-19 Testing and Related Services Through several provisions in FFCRA Divisions A and F, the act provides payment for or requires coverage of testing for the COVID-19 virus, and items and services associated with such testing, such as supplies and office visits, without cost sharing. These coverage requirements apply to individuals who are covered under Medicare, traditional Medicaid, CHIP, TRICARE, Veterans health care, FEHB, the IHS, most types of private health insurance plans, and individuals who are uninsured (as defined below). COVID-19 Testing Provisions in Division F refer to COVID-19 testing in several ways: "In vitro diagnostic products (as defined in section 809.3(a) of title 21, Code of Federal Regulations) for the detection of SARS-CoV-2 or the diagnosis of the virus that causes COVID-19 that are approved, cleared, or authorized under section 510(k), 513, 515 or 564 of the Federal Food, Drug, and Cosmetic Act [FFDCA]"; "COVID-19 related items and services"; "in vitro diagnostic products"; "clinical diagnostic lab tests"; and "any COVID-19 related items and services." COVID- 19 stands for Coronavirus Disease 2019, the name of the pandemic disease. SARS-CoV- 2 is the scientific name of the virus that causes COVID-19. Diagnostic testing identifies the presence of the virus, which, in conjunction with clinical signs and symptoms, informs the diagnosis of COVID-19. In Vitro Diagnostics (IVDs) are medical devices used in the laboratory analysis of human samples, including commercial test products and instruments used in testing. IVDs may be used in a variety of settings, including a clinical laboratory, a physician's office, or in the home. IVDs are defined in FDA regulation as a specific subset of devices that include "reagents, instruments, and systems intended for use in the diagnosis of disease or other conditions ... in order to cure, mitigate, treat, or prevent disease ... [s]uch products are intended for use in the collection, preparation, and examination of specimens taken from the human body." As indicated by this definition, an IVD may be either a complete test or a component of a test, and in either case, the IVD comes under FDA's regulatory purview. FDA premarket review of IVDs may include Premarket Approval (PMA); notification and clearance (510(k)); authorization pursuant to de novo classification; or authorization for use in an emergency pursuant to an Emergency Use Authorization (EUA) based on circumstances (e.g., a public health emergency determination) and the risk the device poses. Although the terms and definitions used to refer to COVID-19 testing vary throughout FFCRA, they do not necessarily reflect actual differences in the types of tests and ancillary services that are or must be covered. Some of these definitions and terms were amended in the CARES Act. In summarizing FFCRA provisions in this CRS Report, mention of any of these definitions of a COVID-19 test, as described above, is referred to as " COVID-19 testing ." Testing-Related Items and Services Sections in FFCRA Divisions A and F that refer to COVID-19 testing generally also refer to health care items and services furnished in relation to testing, such as supplies and office visits, although definitions vary. FFCRA Section 6001(a)(2) defines these ancillary services, in the context of private health insurance coverage, as [i]tems and services furnished to an individual during health care provider office visits (which term in this paragraph includes in-person visits and telehealth visits), urgent care center visits, and emergency room visits that result in an order for or administration of an in vitro diagnostic product described in paragraph (1), but only to the extent such items and services relate to the furnishing or administration of such product or to the evaluation of such individual for purposes of determining the need of such individual for such product. This definition could encompass additional diagnostic testing associated with the visit, which may include additional laboratory tests and imaging studies. However, it would not encompass treatment for COVID-19 illnesses . See the " Section 6001. Coverage of Testing for COVID-19 " section below regarding enforcement and implementation of this section's provisions. Applicable References Provisions in Division F that use language discussed above, comparable construction, or cross-reference, are as follows: Section 6001(a)(1)-(2), regarding specified types of private health insurance coverage. Section 6004(a)(1)(C), which amends SSA Section 1905(a)(3) regarding Medicaid medical assistance, and Section 6004(a)(2), which amends SSA Sections 1916 and 1916A regarding Medicaid cost-sharing. Both provisions refer to SSA Section 1905(a)(3), as amended. Section 6004(b)(1), which amends SSA Section 2103(c), regarding CHIP child coverage, and Section 6004(b)(2), which amends SSA Section 2112(b)(4), regarding CHIP pregnant women coverage. Both provisions reference SSA Section 1905(a)(3), as amended. Section 6006, regarding TRICARE, veterans health care, and federal civilian employee health coverage (FEHB), each referencing FFCRA Section 6001(a)(1)-(2). Section 6007, regarding IHS referencing FFCRA Section 6001(a)(1)-(2). In addition, appropriations provided in FFCRA Division A to the Defense Health Program, Veterans Health Administration, IHS, and the HHS Public Health and Social Services Emergency Fund are to be used, in whole or in part, to pay for COVID-19 testing and related services, with reference to Section 6001(a) of the act. However, Division F sections pertaining to Medicare, Medicare Advantage, and the Medicaid and CHIP programs do not reference FFCRA Section 6001(a)(1)-(2) with respect to the definition of COVID-19 tests, administration of the tests, or related items and services, but rather amend the Social Security Act directly to require coverage of these things. Definition of the Uninsured Two provisions in FFCRA facilitate access to COVID-19 testing for "uninsured individuals": Division A, Title V, and Division F, Section 6004. Title V provides funding to the National Medical Disaster System (NDMS) that can be used to reimburse health care providers for costs related to COVID-19 testing for uninsured individuals, as defined in that section (and as explained below). Section 6004 provides states an option to use Medicaid as a vehicle to provide COVID-19 testing without cost to uninsured individuals, as defined in that section. The respective definitions of uninsured individuals are similar but not identical. In Title V, "uninsured individual" means an individual who is not enrolled in coverage in any of the following three categories: A federal health care program, as defined: This includes but is not limited to Medicare, Medicaid, CHIP, TRICARE, and the VA health care system. Most types of private health insurance plans: This includes individual health insurance coverage and group plans, whether fully insured or self-insured. The explanation of these coverage types and the applicability of Section 6001 to them also apply to this provision. The Federal Employees Health Benefits ( FEHB ) Program: See the " Section 6006. Application with Respect to TRICARE, Coverage for Veterans, and Coverage for Federal Civilians " section below for background on FEHB. In other words, individuals enrolled in coverage in one of these three categories are considered insured and are not eligible for the testing assistance described in Title V. Note that individuals with certain types of private coverage may be considered uninsured, due to the coverage definitions cited. The definition of individual health insurance coverage does not include a type of coverage called short-term, limited duration insurance (STLDI) (see " Section 6001. Coverage of Testing for COVID-19 "). Thus, individuals with STLDI appear to be considered uninsured for the purpose of eligibility for assistance under Title V. Section 6004 includes additional groups in the definition of "uninsured individual" that applies under such sections. Specifically, for the purposes of Section 6004, uninsured individuals are defined as those who are not enrolled in (1) a federal health care program, as defined; (2) a specified type of private health insurance plan; or (3) FEHB. Such individuals are also not Medicaid-eligible under one of Medicaid's mandatory eligibility pathways (e.g., the poverty-related pregnant women and child pathways, or the Medicaid expansion pathway under the Patient Protection and Affordable Care Act [ACA; P.L. 111-148 , as amended]). The first three categories are defined and referenced the same way in Section 6004 as they are in Title V, although wording and punctuation differ slightly. See the discussion of Section 6004 in this report for more information about the additional criteria related to COVID-19 testing without cost-sharing under Medicaid. Summaries of Provisions Division AâSecond Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 This section describes the health care-related supplemental appropriations in FFCRA Division A for the Defense Health Program, the Veterans Health Administration, and HHS accounts, and applicable general provisions. All such appropriations are designated as an emergency requirement and, as a result, are not constrained by the statutory discretionary spending limits (often referred to as budget caps). Title II: Department of Defense, Defense Health Program The Defense Health Program (DHP) is an account in the Department of Defense budget that funds various functions of the Military Health System. These functions include the provision of health care services, certain medical readiness activities, expeditionary medical capabilities, education and training programs, medical research, management and headquarters activities, facilities sustainment, procurement, and civilian personnel. For FY2020, Congress appropriated $34.4 billion to the DHP. FFCRA appropriates an additional $82 million to the DHP for COVID-19 testing, administration of the test, and related items and services outlined in FFCRA Section 6006(a). (For a summary of this section, see " Definitions of COVID-19 Testing and Related Services " and " Section 6006. Application with Respect to TRICARE, Coverage for Veterans, and Coverage for Federal Civilians .") The additional funds are designated as emergency spending and are to remain available until September 30, 2022. Title IV: Department of Health and Human Services, Indian Health Service The IHS within HHS is the lead federal agency charged with improving the health of American Indians and Alaska Natives. In FY2019, IHS provided health care to approximately 2.6 million eligible American Indians/Alaska Natives. IHS's FY2020 appropriation was $6.1 billion, with $4.3 billion appropriated to the Indian Health Services account, which supports the provision of clinical services and public health activities. The services provided at IHS facilities vary, with some facilities providing inpatient services, laboratory testing services, and emergency care, while others focus on outpatient primary care services. IHS does not offer a standard benefit package, nor is it required to cover certain services within its facilities or when it authorizes payment for services to its beneficiaries outside of the IHS system (see " Section 6007. Coverage of Testing for COVID-19 at No Cost Sharing for Indians Receiving Purchased/Referred Care "). FFCRA appropriates an additional $64 million for COVID-19 testing, administration of the test, and related items and services as specified in FFCRA Section 6007. (See " Definitions of COVID-19 Testing and Related Services " and " Section 6007. Coverage of Testing for COVID-19 at No Cost Sharing for Indians Receiving Purchased/Referred Care .") The section also specifies that the additional funds are to be allocated at the discretion of the IHS director. The additional funds are designated as emergency spending and are to remain available until September 30, 2022. Title V. Department of Health and Human Services, Public Health and Social Services Emergency Fund There is no federal assistance program designed purposefully to pay the uncompensated costs of health care for the uninsured and underinsured necessitated by a public health emergency or disaster. In general, there has been no consensus that doing so should be a federal responsibility. Nonetheless, Congress has provided appropriations for several limited mechanisms to address uncompensated health care costs in response to previous incidents. The health care needs of uninsured and underinsured individuals and the financial pressures many individuals and their health care providers are facing during the COVID-19 outbreak have spurred congressional interest in these approaches. Among other forms of assistance, the CARES Act ( P.L. 116-136 ) appropriates a $100 billion "Provider Relief Fund" to assist health care facilities and providers facing revenue losses and uncompensated care as a result of the pandemic. FFCRA uses the National Disaster Medical System (NDMS) Definitive Care Reimbursement Program as the mechanism for federal payment for COVID-19 testing and related services for uninsured individuals. Historically, NDMS has paid for health care items and services at between 100% and 110% of the applicable Medicare rate, and the Centers for Medicare & Medicaid Services (CMS) has processed payments. To fund this approach, FFCRA provides $1 billion to the Public Health and Social Services Emergency Fund (PHSSEF), an account used in appropriations acts to provide the HHS Secretary with one-time or emergency funding, as well as annual funding for the office of the HHS Assistance Secretary for Preparedness and Response (ASPR). Covered COVID-19 testing, administration of the test, and related services are as defined in Subsection 6001(a) of the act. (See " Definitions of COVID-19 Testing and Related Services .") An uninsured individual is defined, for purposes of this section, as someone who is not enrolled in (1) a federal health care program, as defined; (2) a specified type of private health insurance plan; or (3) FEHB. (See " Definition of the Uninsured " for more information.) The additional funds are designated as emergency spending and are to remain available until expended. Title VI. Department of Veterans Affairs, Veterans Health Administration The Veterans Health Administration (VHA) of the Department of Veterans' Affairs (VA) provides health care to eligible veterans and their dependents who meet certain criteria as authorized by law. The VHA is funded through five appropriations accounts: (1) medical services, (2) medical community care, (3) medical support and compliance, (4) medical facilities, and (5) medical and prosthetic research. The first four accounts provide funding for medical care for veterans. FFCRA provides $60 million in supplemental appropriations for FY2020 to the VHAâ$30 million for medical services and $30 million for medical community careâfor COVID-19 testing, administration of the test, and related items and services for visits for veterans. (See " Definitions of COVID-19 Testing and Related Services " and " Veterans .") The additional funds are designated as emergency spending and are to remain available until September 30, 2022. Title VII. General Provisions, Division A This title provides a reporting requirement (Section 1701) which states that each amount appropriated or made available by Division A is in addition to amounts otherwise appropriated for the fiscal year involved (Section 1703), and that unless otherwise provided, appropriations in Division A are not available for obligation beyond FY2020 (Section 1704). Title VII also includes Section 1702. This section was repealed in its entirety by Section 18115 of the CARES Act ( P.L. 116-136 ), which replaced it with a requirement for all laboratories carrying out COVID-19 testing to report testing data to HHS, as specified. An explanation of the repealed provision is provided here, for completeness. Section 1702: Repealed Generally, laboratories report testing results for specified diseases and conditions (called notifiable conditions ) directly to state or territorial (jurisdictional) health departments, pursuant to requirements in jurisdictional law. Through its National Notifiable Diseases Surveillance System (NNDSS), the HHS Centers for Disease Control and Prevention (CDC) works with jurisdictions and the Council of State and Territorial Epidemiologists (CSTE) to track national notifiable conditions, mostly infectious diseases and some noninfectious conditions (e.g., lead poisoning). Usually, such data are provided to CDC voluntarily. COVID-19 is a reportable disease in all reporting jurisdictions, and CDC receives data on COVID-19 cases and laboratory test results through NNDSS from all jurisdictions, as well as directly from some commercial laboratories. In addition, the FDA often includes, as a condition of an Emergency Use Authorization (EUA), the requirement that laboratories carrying out the EUA test comply with all relevant state and local reporting requirements. FFCRA Section 1702 would have required all states and local governments receiving funding under Division A to report real-time and aggregated data on both testing (tests performed) and test results to the respective State Emergency Operations Center. These data would then have been transmitted to the CDC. Division FâHealth Provisions This section describes all of the provisions included in FFCRA Division F. Some provisions described below have been amended by the CARES Act ; in such cases, foot n otes reference the relevant CRS expert who can answer questions about the amendment s . In some cases, the amendments made by the CARES Act are substantial, in which case, the footnote may also provide a brief description of the amendment . Section 6001. Coverage of Testing for COVID-19 Private health insurance is the predominant source of health insurance coverage in the United States. In general, consumers may obtain individual health insurance coverage directly from an insurer, or they may enroll in a group health plan through their employer or another sponsor . Group health plan sponsors may finance coverage themselves (self-insure) or purchase (fully insured) coverage from an insurer. Covered benefits and consumer costs may vary by plan, subject to applicable federal and state requirements. The federal government may regulate all the coverage types noted above, and states may regulate all but self-insured group plans. Federal and state requirements may vary by coverage type. Some federal requirements apply to all coverage types noted above, while other federal requirements only apply to certain coverage types. Prior to the enactment of FFCRA, there were no federal requirements specifically mandating private health insurance coverage of items or services related to COVID-19 testing. In recent weeks, some states have announced relevant coverage requirements, and some insurers have clarified or expanded their policies to include relevant coverage. FFCRA newly requires most private health insurance plans to cover COVID-19 testing, administration of the test, and related items and services (see " Definitions of COVID-19 Testing and Related Services "). The coverage must be provided without consumer cost-sharing, including deductibles, copayments, or coinsurance. Prior authorization or other utilization management requirements are prohibited. These requirements apply to individual health insurance coverage and to group plans, whether fully insured or self-insured. This includes plans sold on and off the individual and small group exchanges. Per the definition of individual health insurance coverage cited in the act, the requirements do not apply to short-term, limited-duration plans. The requirements do apply to grandfathered plans , which are individual or group plans in which at least one individual was enrolled as of enactment of the ACA (March 23, 2010), and that continue to meet certain criteria. Plans that maintain their grandfathered status are exempt from some federal requirements, but FFCRA specifies that Section 6001 applies to them. The coverage requirements in this act apply only to the specified items and services that are furnished during the emergency period described in the act (see " Duration of Emergency Period "), as of the date of enactment (March 18, 2020). Subsection (b) states that the Secretaries of HHS, Labor, and the Treasury are required to enforce this section's provisions as if the provisions were incorporated into the PHSA, Employee Retirement Income Security Act (ERISA), and Internal Revenue Code (IRC), respectively. Subsection (c) states that those Secretaries also have authority to implement the provisions of this section "through sub-regulatory guidance, program instruction, or otherwise." CBO preliminarily estimates that Section 6001 will decrease federal revenues by $4 million and increase federal outlays by $7 million over the FY2020âFY2022 period. Section 6002. Waiving Cost Sharing Under the Medicare Program for Certain Visits Relating to Testing for COVID-19 Medicare Part B covers physicians' services, outpatient hospital services, durable medical equipment, and other medical services. Most physicians, providers, and practitioners are subject to limits on amounts they can bill beneficiaries for covered services, and they can bill the beneficiary for only the 20% coinsurance of the Medicare payment rate plus any unmet deductible. Part B also covers outpatient clinical laboratory tests provided by Medicare-participating laboratories, such as certain blood tests, urinalysis, and some screening tests, including the test for the coronavirus that causes COVID-19. These services may be furnished by labs located in hospitals and physician offices, as well as by independent labs. Beneficiaries have no coinsurance, co-payments, or deductibles for covered clinical lab services. FFCRA eliminates the Medicare Part B beneficiary cost-sharing for provider visits during which a coronavirus diagnostic test is administered or ordered during the emergency period (see " Duration of Emergency Period "). Beneficiaries are not responsible for any coinsurance payments or deductibles for any specified COVID-19 testing-related service, defined as a medical visit that falls within the evaluation and management service codes for the following categories: office and other outpatient services; hospital observation services; emergency department services; nursing facility services; domiciliary, rest home, or custodial care services; home services; or online digital evaluation and management services. The elimination of beneficiary cost-sharing for COVID-19 testing-related services applies to Medicare payment under the hospital outpatient prospective payment system, the physician fee schedule, the prospective payment system for federally qualified health centers, the outpatient hospital system payment system, and the rural health clinic services payment system. The HHS Secretary is to provide appropriate claims coding modifiers to identify the services for which beneficiary cost-sharing is waived. The HHS Secretary is allowed to implement this section by program instruction or otherwise. CBO preliminarily estimates that enacting Sections 6002 and 6003 will increase direct spending by $6.7 billion over the FY2020-FY2022 period. Section 6003. Coverage of Testing for COVID-10 at No Cost Sharing Under the Medicare Advantage Program Medicare Advantage (MA) is an alternative way for Medicare beneficiaries to receive covered benefits. Under MA, private health plans are paid a per-person monthly amount to provide all Medicare-covered benefits (except hospice) to beneficiaries who enroll in their plan. In general, cost sharing (copayments and coinsurance) under an MA plan must be actuarially equivalent to cost sharing under original Medicare, but cost sharing for a specific item or service may vary from amounts required under original Medicare. Private plans may use different techniques to influence the medical care used by enrollees, such as requiring enrollees to receive a referral to see specialists, or requiring prior approval or authorization from the plan before a service will be paid for. FFCRA requires MA plans to cover COVID-19 testing, the administration of the test, and related items and services during the emergency period (see the sections " Definitions of COVID-19 Testing and Related Services " and " Duration of Emergency Period "). Plans are prohibited from charging cost sharing for those items and services, and are prohibited from using prior authorization or other utilization management techniques, with respect to the coverage of the test or ancillary services. The HHS Secretary is allowed to implement this section by program instruction or otherwise. CBO preliminarily estimates that enacting Sections 6002 and 6003 will increase direct federal spending by $6.7 billion over the FY2020-FY2022 period. Section 6004. Coverage at No Cost Sharing Under Medicaid and CHIP Medicaid Background Medicaid is a federal-state program that finances the delivery of primary and acute medical services, as well as long-term services and supports, to a diverse low-income population. Medicaid is financed jointly by the federal government and the states. States must follow broad federal rules to receive federal matching funds, but they have flexibility to design their own versions of Medicaid within the federal statute's basic framework. This flexibility results in variability across state Medicaid programs. Medicaid coverage includes a variety of primary and acute-care services, as well as long-term services and supports (LTSS). Not all Medicaid enrollees have access to the same set of services. An enrollee's eligibility pathway determines the available services within a benefit package. Most Medicaid beneficiaries receive services in the form of what is called traditional Medicaid. In general, under traditional Medicaid coverage, state Medicaid programs must cover specific required services listed in statute (e.g., inpatient and outpatient hospital services, physician's services, or laboratory and x-ray services) and may elect to cover certain optional services (e.g., prescription drugs, case management, or physical therapy services). Under alternative benefit plans (ABPs), by contrast, states must provide comprehensive benefit coverage that is based on a coverage benchmark rather than a list of discrete items and services, as under traditional Medicaid. Coverage under an ABP must include at least the essential health benefits (EHBs) that most plans in the private health insurance market are required to furnish. States that choose to implement the ACA Medicaid expansion are required to provide ABP coverage to the individuals eligible for Medicaid through the expansion (with exceptions for selected special-needs subgroups), and are permitted to extend such coverage to other groups. Beneficiary cost sharing (e.g., premiums and co-payments) is limited under the Medicaid program. States can require certain beneficiaries to share in the cost of Medicaid services, but there are limits on (1) the amounts that states can impose, (2) the beneficiary groups that can be required to pay, and (3) the services for which cost sharing can be charged. CHIP Background The State Children's Health Insurance Program (CHIP) is a federal-state program that provides health coverage to uninsured children and certain pregnant women with annual family income too high to qualify for Medicaid. CHIP is jointly financed by the federal government and states, and is administered by the states. Like Medicaid, the federal government sets basic requirements for CHIP, but states have the flexibility to design their own version of CHIP within the federal government's framework. As a result, CHIP programs vary significantly from state to state. States may design their CHIP programs as (1) a CHIP Medicaid expansion, (2) a separate CHIP program, or (3) a combination approach, where the state operates a CHIP Medicaid expansion and one or more separate CHIP programs concurrently. CHIP benefit coverage and cost-sharing rules depend on program design. CHIP Medicaid expansions must follow the federal Medicaid rules for benefits and cost sharing. For separate CHIP programs, the benefits are permitted to look more like private health insurance, and states may impose cost sharing, such as premiums or enrollment fees, with a maximum allowable amount that is tied to annual family income. Regardless of the choice of program design, all states must cover emergency services, well-baby and well-child care including age-appropriate immunizations, and dental services. FFCRA Provision FFCRA adds COVID-19 testing and related services the list of Medicaid mandatory services under traditional Medicaid benefits for the period beginning March 18, 2020, through the duration of the public health emergency as declared by the HHS Secretary pursuant to Section 319 of the PHSA (see the sections " Definitions of COVID-19 Testing and Related Services " and " Duration of Emergency Period "). States and territories are prohibited from charging beneficiary cost sharing for such testing, or for testing-related state plan services furnished during this period. FFCRA also permits states to extend COVID-19 testing, testing-related state plan services, testing-related visit and the administration of the testing without cost sharing (as referenced earlier in this provision) to uninsured individuals during the specified public health emergency period. For the purposes of this provision, uninsured individuals are defined as those who are not Medicaid-eligible under one of Medicaid's mandatory eligibility pathways (e.g., the poverty-related pregnant women and child pathways, or the ACA Medicaid expansion pathway), and who are not enrolled in (1) a federal health care program (e.g., Medicare, Medicaid, CHIP, or TRICARE); (2) a specified type of private health insurance plan (e.g., individual health insurance coverage and group plans, whether fully insured or self-insured); or (3) FEHB (see " Definition of the Uninsured "). The law provides 100% federal medical assistance percentage (FMAP or federal matching rate) for medical assistance and administrative costs associated with uninsured individuals who are eligible for Medicaid under this provision. The law also requires CHIP programs (regardless of program design) to cover COVID-19 testing for CHIP enrollees for the period beginning March 18, 2020, through the duration of the public health emergency period as specified (see the sections " Definitions of COVID-19 Testing and Related Services " and " Duration of Emergency Period "). States are prohibited from charging beneficiary cost sharing for such testing, or for testing-related visits furnished to CHIP enrollees during this period. CBO preliminarily estimates that Section 6004 will increase direct federal spending by a total of $1.9 billion in FY2020 and FY2021. Section 6005. Treatment of Personal Respiratory Protective Devices as Covered Countermeasures In 2005 Congress passed the Public Readiness and Emergency Preparedness Act (PREP Act), which authorizes the federal government to waive liability (except for willful misconduct) for manufacturers, distributors, and providers of medical countermeasures, such as drugs and medical supplies, that are needed to respond to a public health emergency. The act also authorizes the federal government to establish a program to compensate eligible individuals who suffer injuries from administration or use of products covered by the PREP Act's immunity provisions. FFCRA explicitly adds to the list of PREP Act-covered countermeasures any personal respiratory protective device that is (1) approved by the National Institute for Occupational Safety and Health (NIOSH); (2) subject to an emergency use authorization (EUA); and (3) used for the COVID-19 response, retroactive from January 27, 2020, and through October 1, 2024. The CARES Act, Section 3103, amends this provision to define a covered personal respiratory protective device as one that "is approved by [NIOSH], and that the Secretary determines to be a priority for use during a public health emergency declared under section 319." This amendment removes the requirement for an FDA authorization and extends PREP Act authority to these devices during both the COVID-19 emergency period and any future public health emergencies declared pursuant to PHSA Section 319. CBO did not provide an estimate of this provision. Section 6006. Application with Respect to TRICARE, Coverage for Veterans, and Coverage for Federal Civilians TRICARE Under Chapter 55 of Title 10, U.S. Code , the Department of Defense administers a statutory health entitlement to approximately 9.5 million beneficiaries (i.e., servicemembers, military retirees, and family members). These entitlements are delivered through the Military Health System (MHS), which offers health care services in military hospitals and clinicsâknown as military treatment facilitiesâand through civilian health care providers participating in TRICARE. With the exception of active duty servicemembers, MHS beneficiaries may have a choice of TRICARE plan options depending on their status and geographic location. Each plan option has different beneficiary cost-sharing features, including annual enrollment fees, deductibles, copayments, and an annual catastrophic cap. FFCRA requires the Secretary of Defense to waive any TRICARE cost-sharing requirements related to COVID-19 testing, administration of the test, and related items and services provided during an associated health care office, urgent care, or emergency department visits during the emergency period (see the sections " Definitions of COVID-19 Testing and Related Services " and " Duration of Emergency Period "). Veterans All veterans enrolled in the VA health care system are eligible for a standard medical package that includes laboratory services. Currently, some veterans are required to pay copayments for medical services and outpatient medications related to the treatment of a nonservice-connected condition. Any health service or medication provided in connection to the treatment of a service-connected condition or disability is always furnished without cost sharing. In addition, the VA does not charge copayments for preventive screenings, such as those for infectious diseases; cancers; heart and vascular diseases; mental health conditions and substance abuse; metabolic, obstetric, and gynecological conditions; and vision disorders, as well as regular recommended immunizations. Generally, laboratory services are also expressly exempt from copayment requirements. FFCRA requires the VA Secretary to waive any copayment or other cost-sharing requirements related to COVID-19 testing, administration of the test, and related items and services for visits during the emergency period (see the sections " Definitions of COVID-19 Testing and Related Services " and " Duration of Emergency Period "). Federal Civilians The FEHB Program provides health insurance to federal employees, retirees, and their dependents. Cost-sharing requirements (e.g., deductibles, co-payments, and coinsurance amounts) vary by plans participating in the FEHB Program. For some services, such as the preventive care services outlined in the ACA, plans are not allowed to impose cost sharing. FFCRA requires that no federal civil servants enrolled in a health benefits plan or FEHB enrollees may be required to pay a copayment or other cost sharing related to COVID-19 testing, administration of the test, related items and services for visits during the emergency period (see the sections " Definitions of COVID-19 Testing and Related Services " and " Duration of Emergency Period "). Section 6007. Coverage of Testing for COVID-19 at No Cost Sharing for Indians Receiving Purchased/Referred Care IHS provides health care to eligible American Indians/Alaska Natives either directly or through facilities and programs operated by Indian tribes or tribal organizations through self-determination contracts and self-governance compacts authorized in the Indian Self-Determination and Education Assistance Act (ISDEAA). IHS also provides services to urban Indians through grants or contracts to Urban Indian Organizations (UIOs). The services provided vary by facility, and IHS does not offer a standard benefit package, nor is it required to cover certain services that its beneficiaries may receive at facilities outside of IHS. When services are not available at an IHS facility, the IHS facilities may authorize payment through the Purchased Referred Care Program (PRC). Generally, PRC requires prior approval except in cases of emergency. PRC funds are limited, and as such, not all PRC claims are authorized and PRC is not available to UIOs. To be authorized, claims must meet medical priority levels, individuals must not be eligible for another source of coverage (e.g., Medicaid or private health insurance), and individuals must live in certain geographic areas. FFCRA requires IHS to pay for the cost of COVID-19 testing and related items and services, as described in Section 6001(a), without any cost-sharing requirements, from the date of enactment (i.e., March 18, 2020) throughout the emergency period (see the sections " Definitions of COVID-19 Testing and Related Services " and " Duration of Emergency Period "). This requirement applies to any Indian receiving services through the IHS including through UIOs. It also specifies that the requirement to waive cost-sharing requirements applies regardless of whether the testing and related services were authorized through PRC. Section 6008. Temporary Increase of Medicaid FMAP Medicaid is jointly financed by the federal government and the states. The federal government's share of a state's expenditures for most Medicaid services is called the federal medical assistance percentage (FMAP) rate, which varies by state and is designed so that the federal government pays a larger portion of Medicaid costs in states with lower per capita incomes relative to the national average (and vice versa for states with higher per capita incomes). Exceptions to the regular FMAP rate have been made for certain states, situations, populations, providers, and services. In the past, there were two temporary FMAP exceptions to provide states with fiscal relief due to recessions. They were provided through the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JRTRRA, P.L. 108-27 ) and the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 ). To be eligible for both of these temporary FMAP increases, states had to abide by some requirements. These requirements varied in the two FMAP increases, but for both increases, states were required to maintain Medicaid "eligibility standards, methodologies, and procedures" and ensure that local governments did not pay a larger percentage of the state's nonfederal Medicaid expenditures than otherwise would have been required. FFCRA provides an increase to the FMAP rate for all states, the District of Columbia, and the territories of 6.2 percentage points for each calendar quarter occurring during the period beginning on the first day of the emergency period (i.e., January 1, 2020) and ending on the last day of the calendar quarter in which the last day of the public health emergency period ends (see " Duration of Emergency Period "). States, the District of Columbia, and the territories will not receive this FMAP rate increase if (1) the state's Medicaid "eligibility standards, methodologies, or procedures" are more restrictive than what was in effect on January 1, 2020; (2) the amount of premiums imposed by the state exceeds the amount as of January 1, 2020; (3) the state does not maintain eligibility for individuals enrolled in Medicaid on the date of enactment (i.e., March 18, 2020) or for individuals who enroll during the emergency period through the end of the month in which the emergency period ends (unless the individual requests a voluntary termination of eligibility or the individual ceases to be a resident of the state); or (4) the state does not provide coverage (without the imposition of cost sharing) for any testing services and treatments for COVID-19 (including vaccines, specialized equipment, and therapies). FFCRA adds another condition for the FMAP rate increase. Specifically, states, the District of Columbia, and the territories cannot require local governments to fund a larger percentage of the state's nonfederal Medicaid expenditures for the Medicaid state plan or Medicaid disproportionate share hospital (DSH) payments than what was required on March 11, 2020. CBO preliminarily estimates that Section 6008 will increase direct spending by about $50.0 billion over the FY2020-FY2022 period. Section 6009. Increase in Medicaid Allotments for Territories Medicaid financing for the territories (i.e., America Samoa, Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin Islands) is different than the financing for the 50 states and the District of Columbia. Federal Medicaid funding to the states and the District of Columbia is open-ended, but the Medicaid programs in the territories are subject to annual federal capped funding. Federal Medicaid funding for the territories comes from different sources. The permanent source of federal Medicaid funding for the territories is the annual capped funding. Currently, the Medicaid annual capped funding for the territories is supplemented by additional funding for FY2020 and FY2021 that was provided through the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ). FFCRA increases the additional funding available for each territory for FY2020 and FY2021. The aggregate additional funding for the territories increases from $3.0 billion to $3.1 billion for FY2020 and $3.1 billion to $3.2 billion for FY2021. CBO preliminarily estimates that Section 6009 increases the allotment amount, and thus direct spending, by $204 million over the FY2020-FY2021 period. Section 6010. Clarification Relating to Secretarial Authority Regarding Medicare Telehealth Services Furnished During COVID-19 Emergency Periods Medicare coverage under Part B (fee-for-service) for telehealth services is defined under SSA Sec. 1834(m), which places certain conditions on such care including who can furnish and be paid for the service, where the patient is located (the originating site), where the physician is located (the distant site), and the types of services that are covered. Recent legislation has modified some of the conditions under which telehealth services may be furnished under Medicare. The Coronavirus Preparedness and Response Supplemental Appropriations Act ( P.L. 116-123 ), Division B, Sec. 102, added certain Medicare telehealth restrictions to the list of applicable conditions for which the Secretary could temporarily waive or modify program requirements or regulations during the COVID-19 emergency period. (See " Duration of Emergency Period ".) The provision also defined a qualified telehealth provider, requiring a prior relationship within the past three years between the patient and the provider under Medicare. FFCRA expands the definition of a qualified provider to include those who had provider-patient relationships within the past three years outside of Medicare. Appendix. CRS Experts and Contact Information Below is a list of the health care provisions in FFCRA with the name and contact information for the CRS expert on that provision. In some cases, more than one expert contributed to a section, in which case their topics of expertise are also included.	Summary:	gov_report	1,024	null	38
crs_R45791	crs_R45791_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The poverty rate among Americans aged 65 and older has declined by almost 70% in the past five decades. In 2017, 4.7 million people aged 65 and older had income below the federal poverty thresholds. The poverty rate (i.e., the percentage who were in poverty) among the aged fell from 28.5% in 1966 to 9.2% in 2017. Several government programs have contributed to older Americans' increased incomes, including Old Age, Survivor and Disability Insurance (OASDI, commonly known as Social Security) and Supplemental Security Income (SSI). However, certain groups of older Americans, such as widows, divorced women, and never married men and women, are still vulnerable to poverty. Congress may be interested in the effect of existing programs that reduce poverty, as well as potential proposals aimed at improving income among vulnerable groups of older Americans. This report presents the time trends and current status of poverty rates among Americans aged 65 and older, as well as poverty rates among different demographic groups of the aged. This report also summarizes federal programs that may provide income to the aged poor. Over the past several decades, criticisms of the official poverty measure have led to the development of an alternative research measure called the Supplemental Poverty Measure (SPM), which the Census Bureau also computes and releases. This report compares the official aged poverty measure with the SPM and provides statistics measuring the impact of federal cash benefits (mainly Social Security and SSI), taxes, and in-kind benefits (such as housing, energy, and food assistance) on aged poverty. How the Official Poverty Measure Is Computed Poverty status is determined by comparing a measure of a family's resources against a measure of its needs. Families whose resources are less than a dollar amount representing an austere level of "needs" are considered to be in poverty. However, defining resources and needs is not straightforward. The official poverty measure is based on 48 dollar amounts called poverty thresholds that vary by family size and composition, but not by geographic area. These official thresholds were developed in the 1960s, were based on food consumption in 1955 and food costs in 1961, and are updated annually for inflation. As such, they reflect a level of deprivation based on a restrictive food budget, but are not based on a full measurement of families' and individuals' needs and their associated costs. Family resources are measured in dollars and are based on cash income before taxes. All poverty data presented in this report are estimates based on a survey, and like all survey estimates, they are subject to sampling and nonsampling error. The poverty research community has discussed the official poverty measure's limitations for decades. Its use of pretax income renders it unhelpful in gauging tax credits' effects on the low-income population. It does not consider in-kind (noncash) benefits, such as housing subsidies as income, and as a result cannot (on its own) illustrate such benefits' effects on the poor population. Although the measure of need represented by the thresholds is updated every year for overall inflation, it may not accurately reflect the current costs of basic needs, because prices for goods and services related to basic needs may not rise at the same rate as prices for luxury items. Since the official measure's initial development, new data sources have offered more detail on the goods and services families consume, but developing an approach that defines basic needs and determines available resources for families to spend on those needs has taken decades of research and discussion. The SPM resulted from that research, and is described briefly in the section, " The Supplemental Poverty Measure ." Notwithstanding the official measure's limitations, for more than 50 years, it has provided a consistent measure of poverty in the United States, with few methodological changes over that time, and it is based on empirical measures of need (food budgets and food consumption, albeit in 1961 and 1955, respectively) . For these reasons, trends for the aged population based on the official measure are discussed below. Poverty Status of the Aged The proportion of Americans aged 65 and older who lived in poverty has declined significantly in the past 50 years. In 1966, 28.5% of Americans aged 65 and older had family incomes below the poverty thresholds. By 2017, the poverty rate among older Americans had dropped to 9.2% (see Figure 1 ). However, whereas the proportion of persons aged 65 and older who live in poverty has fallen over the past five decades, the number of aged poor has increased since the mid-1970s as the total number of elderly people has grown. In 1974, 3.1 million people aged 65 and older had income below the federal poverty thresholds, whereas in 2017, 4.7 million people aged 65 and older had income below the thresholds. The poverty rate for Americans aged 65 and older historically was higher than the rates for adults aged 18 to 64 and children under the age of 18, but today it is the lowest among those three age groups. In 1966, the poverty rate among persons aged 65 and older was 28.5%, compared with 10.5% among adults aged 18 to 64 and 17.6% among children under the age of 18. In 1974, the aged poverty rate fell below the rate among children under the age of 18, and by the early 1990s, the aged poverty rate had fallen below the rate among adults aged 18 to 64. The elderly poverty rate has remained lower than the nonelderly adult poverty rate since that time. The poverty rate among Americans aged 65 and older was 9.2% in 2017, which was lower than the 11.2% poverty rate among adults aged 18 to 64 and the 17.5% poverty rate among children under 18 years old (see Figure 2 ). Poverty Among the Aged by Demographic Characteristics Poverty status among Americans aged 65 and older generally varies across different demographic groups. This section describes the aged population's poverty status for selected demographic characteristics based on age groups, gender, marital status, and race and Hispanic origin. Age People aged 80 and older have a higher poverty rate than older Americans under the age of 80. Figure 3 displays the percentage of Americans aged 65 and older who were in poverty by age groups from 1975 to 2017. In 1975, the poverty rate among individuals who were in the oldest age group (80 and older) was 21.5%, compared with 16.4% among Americans aged 75-79, 14.4% among those aged 70-74, and 12.5% among those aged 65-69. Poverty rates declined over the past 40 years, and in 2017, approximately 11.6% of people aged 80 and older lived in poverty (a 10 percentage-point reduction from 1975), but the share was still higher than the 9.3% poverty rate among individuals aged 75-79, 8.6% among those aged 70-74, and 7.9% among those aged 65-69. Individuals aged 80 and older might be more vulnerable to income risks because they are more likely to have lower or no earnings (as they phase out of the labor force), exhaust existing retirement resources, have reduced purchasing power in certain defined benefit pensions, and incur higher medical expenses. Women aged 80 and older had the highest poverty rate among elderly women and men in all age groups (see Figure 4 ). In 1975, the poverty rate among women aged 80 and older was 25.1%, compared with 15.2% among men in the same age group and 14.9% among women aged 65-69. In 2017, the poverty rate of women aged 80 and older declined to 13.5%, compared with 8.7% among men in the same age group and 8.6% among women aged 65-69. Poverty status among individuals aged 80 and older varies depending on whether the person is living with other family members. Poverty rates for those living with other family members in 2017 were less than half the rates for those living alone. In 2017, the poverty rate for men aged 80 and older was 6.3% if they lived with other family members, and 15.5% if they lived alone (see Figure 5 ). In the same year, the poverty rate for women aged 80 and older was about 8.2% if they lived with other family members and 18.6% if they lived alone. Marital Status Americans aged 65 and older who were married and living together at the time of the survey generally had a lower poverty rate than those who were not married (see Figure 6 ). In 1975, about 53.0% of individuals aged 65 and older were married and living together, and this percentage was slightly higher at 56.8% in 2017. Approximately 8.2% of married Americans aged 65 and older and living together had family incomes below the federal poverty threshold in 1975, and this rate declined to 4.4% in 2017. During the same period, the poverty rate among aged nonmarried Americans decreased from 23.4% to 15.5%. Figure 7 shows the poverty rate in 2017 by gender and marital status at the survey time. Married couples generally have significantly lower poverty rates than nonmarried individuals, and widowed and divorced women aged 65 or older are more likely to be in poverty than their male counterparts. Among women aged 65 and older, about 4.3% of married women had total incomes below the official poverty threshold in 2017, compared with 13.9% of widows, 15.8% of divorced women, and 21.5% of never-married women. In contrast with the widowed and divorced men in this age group, who are less likely to be poor than widowed and divorced women, poverty rates are also high among never-married men, at a rate of 22.5% in 2017. In 2017, roughly 10% of individuals aged 65 and older lived in families with children under 18 years old. Poverty rates among aged men and women varied by the presence of children in the family (see Figure 8 ), although not always in the same direction. Among married men and women, a relatively higher share of those with children lived in poverty (8.0% for men and 7.5% for women) than those without any child (4.2% for men and 4.1% for women). Similarly, among never-married individuals, those with children also had higher poverty rates (25.4% for men and 22.7% for women) than those without children (22.4% for men and 21.4% for women). However, while widows and divorced women with children had higher poverty rates (14.8% and 17.9%, respectively) than those without children (13.8% and 15.6%, respectively), among men the pattern was reversed: 8.1% of widowers with children and 7.9% of divorced men with children were in poverty, lower than their childless counterparts (10.1% and 13.2%, respectively). Race and Hispanic Origin18 Poverty rates vary by race and Hispanic origin, as shown in Figure 9 . In surveys, Hispanic origin is asked separately from race; accordingly, persons identifying as Hispanic may be of any race. The poverty rate for Americans aged 65 and older has decreased among persons identifying as black or African American alone, non-Hispanic white alone, and Hispanic from 1975 to 2017. Among aged African Americans, the poverty rate decreased from 36.3% in 1975 to 19.3% in 2017; among the aged non-Hispanic white population, from 13.0% to 7.0%; and among the aged Hispanic population, from 27.7% to 17.0%. During the period for which data are available, the poverty rate for the aged Asian population ranged between 10.0% and 16.0% with no consistent directional trend. As shown in Figure 10 , among the racial and Hispanic origin groups, in 2017, the poverty rate was lowest among the aged non-Hispanic white population (5.8% for men and 8.0% for women) and highest among the aged black population (16.1% for men and 21.5% for women). Federal Programs for the Aged Poor Social Security and Supplemental Security Income (SSI) are the two main federal programs that provide cash benefits to the aged poor. In 2017, Social Security accounted for 78.3% of total money income among aged individuals whose family incomes were below 100% of the poverty threshold and 81.3% among those with family incomes below 125% of the poverty threshold (see Table 1 ). In the same year, SSI and other cash public assistance accounted for 11.0% of the total money income for aged individuals whose family incomes were below 100% of the poverty threshold and 7.6% for those with family incomes below 125% of the poverty threshold. Social Security is a federal social insurance program that provides benefits to insured workers and their eligible family members, provided the workers worked in jobs covered by Social Security for a sufficient number of years and meet certain other criteria. Social Security is not designed solely for the poor, but benefits are weighted to replace a greater share of career-average earnings for low-paid workers than for high-paid workers. One study suggests that increased Social Security benefits explained most of the decline in poverty among the aged that occurred during 1967 to 2000 (see Figure 1 ). Social Security benefits alone, however, would not be sufficient to eliminate poverty for a large number of older Americans. The poverty rate among Social Security beneficiaries aged 65 and older was 6.5% in 2017. Although the Social Security program contains a special minimum benefit provision that increases benefits to workers who have many years of low earnings and meet certain other criteria, this provision has virtually no effect on the benefits paid to today's new retirees. According to the Census Bureau's analysis, 30.0% of Americans aged 65 and older would live in poverty without Social Security benefits, holding other resources and expenses constant. SSI is a federal assistance program that provides monthly cash benefits to aged, blind, and disabled individuals who have limited income and assets. The program is intended to provide a minimum level of income to adults who have difficulty meeting their basic living expenses due to age or disability and who have little or no Social Security or other income. Some studies show that the SSI program does not provide effective income protection for the oldest Americans. For example, the maximum SSI benefit in 2017 was 75% of the poverty threshold for an elderly single person and 89% of the poverty threshold for an elderly married couple. Thus, aged SSI recipients may still be impoverished. Furthermore, the maximum SSI benefit is more generous for married couples, who are less likely to need assistance than elderly single individuals. Some researchers also suggest that restructuring the Social Security special minimum benefit provision could be more effective in alleviating poverty than making certain reforms to the SSI program, although a combination of reforms to both programs could be useful if regular Social Security benefits are greatly reduced in the future. The federal government also provides certain noncash benefits to help the elderly poor, such as housing subsidies and Supplemental Nutrition Assistance Program (SNAP) benefits. Congress funds housing subsidy programs, ranging from public housing to government subsidies to renters, to help poor and vulnerable populations meet their housing needs. SNAP is designed primarily to increase the food purchasing power of eligible low-income households to help them buy a nutritionally adequate low-cost diet. Individuals aged 65 and older may also receive a small portion of income from some other federal programs, including refundable tax credits, school meals, Temporary Assistance for Needy Families (TANF), the Low Income Home Energy Assistance Program (LIHEAP), unemployment insurance, workers' compensation, and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC). The official poverty measure is of limited value for analyzing various federal programs' effects on poverty status among the aged population, but the Supplemental Poverty Measure (SPM), discussed in the following section, addresses some of those impacts. The Supplemental Poverty Measure The official poverty measure was developed in the 1960s and was established by the Bureau of the Budget (later the Office of Management and Budget, OMB) for measuring the official poverty rate in the United States. Under the official poverty measure, an individual is counted as poor if his or her family's pretax money income falls below the poverty threshold. One of the main criticisms of the official poverty measure is that pretax money income excludes the value of government noncash benefits (such as health insurance, SNAP, or housing assistance) provided either privately or publicly. It also does not consider taxes paid to federal, state, or local governments, or tax benefits (such as the Earned Income Tax Credit) that families might receive. The Census Bureau's SPM was designed to address the official poverty measure's limitations and has been published since 2011. The SPM poverty thresholds measure a standard of living based on expenditures for food, clothing, shelter, and utilities (FCSU) and "a little more" for other expenses. Its thresholdsâdollar amounts related to the level of need for a familyâvary by whether the family rents, owns a home with a mortgage, or owns a home without a mortgage (the latter of which is more common among the aged population than it is among younger populations). It computes the amount of resources available after taxes, includes the values of noncash benefits, and subtracts some expenses (such as work-related expenses and medical out-of-pocket expenses, the latter of which tend to be higher among the aged than among younger populations). In 2017, the most recent data available, the SPM poverty rate for persons aged 65 and older was 14.1% in 2017, compared with 9.2% using the official poverty measure. This higher poverty rate results largely from higher medical out-of-pocket costs among the aged, in spite of lower housing expenses among the aged, who are more likely to have paid off their mortgages. Income Sources' Impact on Poverty of the Aged Per the SPM The data presented in Figure 11 illustrate how changing the definition of the SPM to exclude a particular resource or expenditure can affect the SPM poverty rate among Americans aged 65 and older. The data do not consider the behavioral effects that may occur if the resource or cost were to be eliminated in reality. Social Security has the greatest effect, by far, on the poverty status of the aged population. Removing Social Security as a resource while holding the other resources and expenditures constant would increase the SPM aged poverty rate by more than 34.6%. Among the other resources, SSI, housing subsidies, and SNAP had the next-largest impacts on the SPM poverty rate, but were a full order of magnitude smaller (around a single percentage point instead of tens of percentage points). The remaining resources affected the SPM poverty rate by much less than one percentage point. Three of the resources shown are related to child rearing (child support, school lunch, and WIC), and tax credits are often targeted to families with children. Households headed by people aged 65 and older are less likely than nonelderly households to have children present in the family. Among the expenses considered in the SPM but not considered in the official measure, medical out-of-pocket costs had the largest effect: deducting those costs from family income raised the SPM poverty rate by 5.4%. Given that the aged population tends to have greater medical need and higher out-of-pocket health care costs than younger populations, it is perhaps not surprising that medical costs had a larger effect than the other costs shown in the figure. The remaining costs were largely related to work, and, congruent with the aged population's lower likelihood to be working compared with younger populations, these costs affected the aged population's SPM poverty rate by less than one percentage point. Additional Considerations Poverty Not Measured for Certain Populations Approximately 1.2 million persons in nursing homes are aged 65 or older. Poverty status is not measured for the institutionalized population, which includes persons in nursing homes, prisons, or military personnel living on base. This exclusion is not trivial considering that the population in nursing homes is about one-fourth as large as the 4.7 million persons aged 65 or older who were in poverty in 2017. Health Status Not Directly Included in Poverty Measures Poverty is used as a measure of well-being, but it measures only economic well-being and does not directly include a person's health status. Health status may influence the amount and types of income a person receives (by affecting, for example, ability to work or receive disability benefits) and is thus considered indirectly. However, the noneconomic aspect of well-being that comes from good health is not considered in the poverty measures discussed in this report. Furthermore, in the SPM, medical out-of-pocket expenses are considered, but the overall value of health insurance programs to the individual, which may well exceed out-of-pocket costs for medical care or insurance premiums, is not. Considering that Medicaid is an important vehicle for long-term care, the benefits Medicaid provides to the aged population could be characterized as fulfilling needs that are not solely medical in nature, but have economic value as well. Summary:	null	96	21,484	21,486	21,486	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The poverty rate among Americans aged 65 and older has declined by almost 70% in the past five decades. In 2017, 4.7 million people aged 65 and older had income below the federal poverty thresholds. The poverty rate (i.e., the percentage who were in poverty) among the aged fell from 28.5% in 1966 to 9.2% in 2017. Several government programs have contributed to older Americans' increased incomes, including Old Age, Survivor and Disability Insurance (OASDI, commonly known as Social Security) and Supplemental Security Income (SSI). However, certain groups of older Americans, such as widows, divorced women, and never married men and women, are still vulnerable to poverty. Congress may be interested in the effect of existing programs that reduce poverty, as well as potential proposals aimed at improving income among vulnerable groups of older Americans. This report presents the time trends and current status of poverty rates among Americans aged 65 and older, as well as poverty rates among different demographic groups of the aged. This report also summarizes federal programs that may provide income to the aged poor. Over the past several decades, criticisms of the official poverty measure have led to the development of an alternative research measure called the Supplemental Poverty Measure (SPM), which the Census Bureau also computes and releases. This report compares the official aged poverty measure with the SPM and provides statistics measuring the impact of federal cash benefits (mainly Social Security and SSI), taxes, and in-kind benefits (such as housing, energy, and food assistance) on aged poverty. How the Official Poverty Measure Is Computed Poverty status is determined by comparing a measure of a family's resources against a measure of its needs. Families whose resources are less than a dollar amount representing an austere level of "needs" are considered to be in poverty. However, defining resources and needs is not straightforward. The official poverty measure is based on 48 dollar amounts called poverty thresholds that vary by family size and composition, but not by geographic area. These official thresholds were developed in the 1960s, were based on food consumption in 1955 and food costs in 1961, and are updated annually for inflation. As such, they reflect a level of deprivation based on a restrictive food budget, but are not based on a full measurement of families' and individuals' needs and their associated costs. Family resources are measured in dollars and are based on cash income before taxes. All poverty data presented in this report are estimates based on a survey, and like all survey estimates, they are subject to sampling and nonsampling error. The poverty research community has discussed the official poverty measure's limitations for decades. Its use of pretax income renders it unhelpful in gauging tax credits' effects on the low-income population. It does not consider in-kind (noncash) benefits, such as housing subsidies as income, and as a result cannot (on its own) illustrate such benefits' effects on the poor population. Although the measure of need represented by the thresholds is updated every year for overall inflation, it may not accurately reflect the current costs of basic needs, because prices for goods and services related to basic needs may not rise at the same rate as prices for luxury items. Since the official measure's initial development, new data sources have offered more detail on the goods and services families consume, but developing an approach that defines basic needs and determines available resources for families to spend on those needs has taken decades of research and discussion. The SPM resulted from that research, and is described briefly in the section, " The Supplemental Poverty Measure ." Notwithstanding the official measure's limitations, for more than 50 years, it has provided a consistent measure of poverty in the United States, with few methodological changes over that time, and it is based on empirical measures of need (food budgets and food consumption, albeit in 1961 and 1955, respectively) . For these reasons, trends for the aged population based on the official measure are discussed below. Poverty Status of the Aged The proportion of Americans aged 65 and older who lived in poverty has declined significantly in the past 50 years. In 1966, 28.5% of Americans aged 65 and older had family incomes below the poverty thresholds. By 2017, the poverty rate among older Americans had dropped to 9.2% (see Figure 1 ). However, whereas the proportion of persons aged 65 and older who live in poverty has fallen over the past five decades, the number of aged poor has increased since the mid-1970s as the total number of elderly people has grown. In 1974, 3.1 million people aged 65 and older had income below the federal poverty thresholds, whereas in 2017, 4.7 million people aged 65 and older had income below the thresholds. The poverty rate for Americans aged 65 and older historically was higher than the rates for adults aged 18 to 64 and children under the age of 18, but today it is the lowest among those three age groups. In 1966, the poverty rate among persons aged 65 and older was 28.5%, compared with 10.5% among adults aged 18 to 64 and 17.6% among children under the age of 18. In 1974, the aged poverty rate fell below the rate among children under the age of 18, and by the early 1990s, the aged poverty rate had fallen below the rate among adults aged 18 to 64. The elderly poverty rate has remained lower than the nonelderly adult poverty rate since that time. The poverty rate among Americans aged 65 and older was 9.2% in 2017, which was lower than the 11.2% poverty rate among adults aged 18 to 64 and the 17.5% poverty rate among children under 18 years old (see Figure 2 ). Poverty Among the Aged by Demographic Characteristics Poverty status among Americans aged 65 and older generally varies across different demographic groups. This section describes the aged population's poverty status for selected demographic characteristics based on age groups, gender, marital status, and race and Hispanic origin. Age People aged 80 and older have a higher poverty rate than older Americans under the age of 80. Figure 3 displays the percentage of Americans aged 65 and older who were in poverty by age groups from 1975 to 2017. In 1975, the poverty rate among individuals who were in the oldest age group (80 and older) was 21.5%, compared with 16.4% among Americans aged 75-79, 14.4% among those aged 70-74, and 12.5% among those aged 65-69. Poverty rates declined over the past 40 years, and in 2017, approximately 11.6% of people aged 80 and older lived in poverty (a 10 percentage-point reduction from 1975), but the share was still higher than the 9.3% poverty rate among individuals aged 75-79, 8.6% among those aged 70-74, and 7.9% among those aged 65-69. Individuals aged 80 and older might be more vulnerable to income risks because they are more likely to have lower or no earnings (as they phase out of the labor force), exhaust existing retirement resources, have reduced purchasing power in certain defined benefit pensions, and incur higher medical expenses. Women aged 80 and older had the highest poverty rate among elderly women and men in all age groups (see Figure 4 ). In 1975, the poverty rate among women aged 80 and older was 25.1%, compared with 15.2% among men in the same age group and 14.9% among women aged 65-69. In 2017, the poverty rate of women aged 80 and older declined to 13.5%, compared with 8.7% among men in the same age group and 8.6% among women aged 65-69. Poverty status among individuals aged 80 and older varies depending on whether the person is living with other family members. Poverty rates for those living with other family members in 2017 were less than half the rates for those living alone. In 2017, the poverty rate for men aged 80 and older was 6.3% if they lived with other family members, and 15.5% if they lived alone (see Figure 5 ). In the same year, the poverty rate for women aged 80 and older was about 8.2% if they lived with other family members and 18.6% if they lived alone. Marital Status Americans aged 65 and older who were married and living together at the time of the survey generally had a lower poverty rate than those who were not married (see Figure 6 ). In 1975, about 53.0% of individuals aged 65 and older were married and living together, and this percentage was slightly higher at 56.8% in 2017. Approximately 8.2% of married Americans aged 65 and older and living together had family incomes below the federal poverty threshold in 1975, and this rate declined to 4.4% in 2017. During the same period, the poverty rate among aged nonmarried Americans decreased from 23.4% to 15.5%. Figure 7 shows the poverty rate in 2017 by gender and marital status at the survey time. Married couples generally have significantly lower poverty rates than nonmarried individuals, and widowed and divorced women aged 65 or older are more likely to be in poverty than their male counterparts. Among women aged 65 and older, about 4.3% of married women had total incomes below the official poverty threshold in 2017, compared with 13.9% of widows, 15.8% of divorced women, and 21.5% of never-married women. In contrast with the widowed and divorced men in this age group, who are less likely to be poor than widowed and divorced women, poverty rates are also high among never-married men, at a rate of 22.5% in 2017. In 2017, roughly 10% of individuals aged 65 and older lived in families with children under 18 years old. Poverty rates among aged men and women varied by the presence of children in the family (see Figure 8 ), although not always in the same direction. Among married men and women, a relatively higher share of those with children lived in poverty (8.0% for men and 7.5% for women) than those without any child (4.2% for men and 4.1% for women). Similarly, among never-married individuals, those with children also had higher poverty rates (25.4% for men and 22.7% for women) than those without children (22.4% for men and 21.4% for women). However, while widows and divorced women with children had higher poverty rates (14.8% and 17.9%, respectively) than those without children (13.8% and 15.6%, respectively), among men the pattern was reversed: 8.1% of widowers with children and 7.9% of divorced men with children were in poverty, lower than their childless counterparts (10.1% and 13.2%, respectively). Race and Hispanic Origin18 Poverty rates vary by race and Hispanic origin, as shown in Figure 9 . In surveys, Hispanic origin is asked separately from race; accordingly, persons identifying as Hispanic may be of any race. The poverty rate for Americans aged 65 and older has decreased among persons identifying as black or African American alone, non-Hispanic white alone, and Hispanic from 1975 to 2017. Among aged African Americans, the poverty rate decreased from 36.3% in 1975 to 19.3% in 2017; among the aged non-Hispanic white population, from 13.0% to 7.0%; and among the aged Hispanic population, from 27.7% to 17.0%. During the period for which data are available, the poverty rate for the aged Asian population ranged between 10.0% and 16.0% with no consistent directional trend. As shown in Figure 10 , among the racial and Hispanic origin groups, in 2017, the poverty rate was lowest among the aged non-Hispanic white population (5.8% for men and 8.0% for women) and highest among the aged black population (16.1% for men and 21.5% for women). Federal Programs for the Aged Poor Social Security and Supplemental Security Income (SSI) are the two main federal programs that provide cash benefits to the aged poor. In 2017, Social Security accounted for 78.3% of total money income among aged individuals whose family incomes were below 100% of the poverty threshold and 81.3% among those with family incomes below 125% of the poverty threshold (see Table 1 ). In the same year, SSI and other cash public assistance accounted for 11.0% of the total money income for aged individuals whose family incomes were below 100% of the poverty threshold and 7.6% for those with family incomes below 125% of the poverty threshold. Social Security is a federal social insurance program that provides benefits to insured workers and their eligible family members, provided the workers worked in jobs covered by Social Security for a sufficient number of years and meet certain other criteria. Social Security is not designed solely for the poor, but benefits are weighted to replace a greater share of career-average earnings for low-paid workers than for high-paid workers. One study suggests that increased Social Security benefits explained most of the decline in poverty among the aged that occurred during 1967 to 2000 (see Figure 1 ). Social Security benefits alone, however, would not be sufficient to eliminate poverty for a large number of older Americans. The poverty rate among Social Security beneficiaries aged 65 and older was 6.5% in 2017. Although the Social Security program contains a special minimum benefit provision that increases benefits to workers who have many years of low earnings and meet certain other criteria, this provision has virtually no effect on the benefits paid to today's new retirees. According to the Census Bureau's analysis, 30.0% of Americans aged 65 and older would live in poverty without Social Security benefits, holding other resources and expenses constant. SSI is a federal assistance program that provides monthly cash benefits to aged, blind, and disabled individuals who have limited income and assets. The program is intended to provide a minimum level of income to adults who have difficulty meeting their basic living expenses due to age or disability and who have little or no Social Security or other income. Some studies show that the SSI program does not provide effective income protection for the oldest Americans. For example, the maximum SSI benefit in 2017 was 75% of the poverty threshold for an elderly single person and 89% of the poverty threshold for an elderly married couple. Thus, aged SSI recipients may still be impoverished. Furthermore, the maximum SSI benefit is more generous for married couples, who are less likely to need assistance than elderly single individuals. Some researchers also suggest that restructuring the Social Security special minimum benefit provision could be more effective in alleviating poverty than making certain reforms to the SSI program, although a combination of reforms to both programs could be useful if regular Social Security benefits are greatly reduced in the future. The federal government also provides certain noncash benefits to help the elderly poor, such as housing subsidies and Supplemental Nutrition Assistance Program (SNAP) benefits. Congress funds housing subsidy programs, ranging from public housing to government subsidies to renters, to help poor and vulnerable populations meet their housing needs. SNAP is designed primarily to increase the food purchasing power of eligible low-income households to help them buy a nutritionally adequate low-cost diet. Individuals aged 65 and older may also receive a small portion of income from some other federal programs, including refundable tax credits, school meals, Temporary Assistance for Needy Families (TANF), the Low Income Home Energy Assistance Program (LIHEAP), unemployment insurance, workers' compensation, and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC). The official poverty measure is of limited value for analyzing various federal programs' effects on poverty status among the aged population, but the Supplemental Poverty Measure (SPM), discussed in the following section, addresses some of those impacts. The Supplemental Poverty Measure The official poverty measure was developed in the 1960s and was established by the Bureau of the Budget (later the Office of Management and Budget, OMB) for measuring the official poverty rate in the United States. Under the official poverty measure, an individual is counted as poor if his or her family's pretax money income falls below the poverty threshold. One of the main criticisms of the official poverty measure is that pretax money income excludes the value of government noncash benefits (such as health insurance, SNAP, or housing assistance) provided either privately or publicly. It also does not consider taxes paid to federal, state, or local governments, or tax benefits (such as the Earned Income Tax Credit) that families might receive. The Census Bureau's SPM was designed to address the official poverty measure's limitations and has been published since 2011. The SPM poverty thresholds measure a standard of living based on expenditures for food, clothing, shelter, and utilities (FCSU) and "a little more" for other expenses. Its thresholdsâdollar amounts related to the level of need for a familyâvary by whether the family rents, owns a home with a mortgage, or owns a home without a mortgage (the latter of which is more common among the aged population than it is among younger populations). It computes the amount of resources available after taxes, includes the values of noncash benefits, and subtracts some expenses (such as work-related expenses and medical out-of-pocket expenses, the latter of which tend to be higher among the aged than among younger populations). In 2017, the most recent data available, the SPM poverty rate for persons aged 65 and older was 14.1% in 2017, compared with 9.2% using the official poverty measure. This higher poverty rate results largely from higher medical out-of-pocket costs among the aged, in spite of lower housing expenses among the aged, who are more likely to have paid off their mortgages. Income Sources' Impact on Poverty of the Aged Per the SPM The data presented in Figure 11 illustrate how changing the definition of the SPM to exclude a particular resource or expenditure can affect the SPM poverty rate among Americans aged 65 and older. The data do not consider the behavioral effects that may occur if the resource or cost were to be eliminated in reality. Social Security has the greatest effect, by far, on the poverty status of the aged population. Removing Social Security as a resource while holding the other resources and expenditures constant would increase the SPM aged poverty rate by more than 34.6%. Among the other resources, SSI, housing subsidies, and SNAP had the next-largest impacts on the SPM poverty rate, but were a full order of magnitude smaller (around a single percentage point instead of tens of percentage points). The remaining resources affected the SPM poverty rate by much less than one percentage point. Three of the resources shown are related to child rearing (child support, school lunch, and WIC), and tax credits are often targeted to families with children. Households headed by people aged 65 and older are less likely than nonelderly households to have children present in the family. Among the expenses considered in the SPM but not considered in the official measure, medical out-of-pocket costs had the largest effect: deducting those costs from family income raised the SPM poverty rate by 5.4%. Given that the aged population tends to have greater medical need and higher out-of-pocket health care costs than younger populations, it is perhaps not surprising that medical costs had a larger effect than the other costs shown in the figure. The remaining costs were largely related to work, and, congruent with the aged population's lower likelihood to be working compared with younger populations, these costs affected the aged population's SPM poverty rate by less than one percentage point. Additional Considerations Poverty Not Measured for Certain Populations Approximately 1.2 million persons in nursing homes are aged 65 or older. Poverty status is not measured for the institutionalized population, which includes persons in nursing homes, prisons, or military personnel living on base. This exclusion is not trivial considering that the population in nursing homes is about one-fourth as large as the 4.7 million persons aged 65 or older who were in poverty in 2017. Health Status Not Directly Included in Poverty Measures Poverty is used as a measure of well-being, but it measures only economic well-being and does not directly include a person's health status. Health status may influence the amount and types of income a person receives (by affecting, for example, ability to work or receive disability benefits) and is thus considered indirectly. However, the noneconomic aspect of well-being that comes from good health is not considered in the poverty measures discussed in this report. Furthermore, in the SPM, medical out-of-pocket expenses are considered, but the overall value of health insurance programs to the individual, which may well exceed out-of-pocket costs for medical care or insurance premiums, is not. Considering that Medicaid is an important vehicle for long-term care, the benefits Medicaid provides to the aged population could be characterized as fulfilling needs that are not solely medical in nature, but have economic value as well.	Summary:	gov_report	1,024	null	39
crs_R46277	crs_R46277_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Serious disruptions for certain industries caused by the COVID-19 (coronavirus) pandemic have led to calls for federal government assistance to affected industries. Although out of the ordinary, this would not be the first occasion on which the federal government has provided aid to troubled or financially distressed industries. To help inform congressional debate, this report examines selected past instances in which the government has aided troubled industries, providing information about the way in which such assistance was structured, the role of Congress, and the eventual cost. Assistance for distressed industries or businessesâsometimes popularly referred to as "government bailouts"âhistorically has taken different forms and has occurred under varying circumstances. Assistance has not been limited to outlays by the Treasury, or to actions explicitly authorized by Congress, or to measures which imposed a net cost on taxpayers on an unadjusted cash-flow basis. Sometimes, the industry distress was being driven by external shocks, such as the 9/11 terrorist attacks or the 2007-2009 financial crisis, and other times it was driven by long-term secular trends, such as changes in the economic outlook for the railroad industry. Past assistance has involved such instruments as loan guarantees, asset purchases, capital injections, direct loans, and regulatory changes, with the specific mix of policies varying significantly from case to case. These differences make it somewhat subjective what should be defined as a "bailout." In order to provide greater detail, the examples discussed in this report all involve cases in which federal assistance was (1) widely available to firms within an industry rather than being targeted to a particular firm; (2) extraordinary in nature rather than a type of assistance that is routinely provided; and (3) motivated primarily by a desire to prevent industry-wide business failures. For each case, the report provides data on the costs and income to government, to the extent that they are available. In some of the cases reviewed in this report, the government was able to recoup much or all of its assistance through fees, interest, warrants, and loan or principal repayments. In others, there were no arrangements made for recoupment or repayment. But the fact that a beneficiary of government assistance repaid a loan or gave the government shares that ultimately increased in value does not necessarily mean that the government "broke even" or "made a profit." The government had to borrow, incurring interest payments, to finance these programs, and adjusting federal outlays and receipts for inflation may not account fully for this. In most cases, although not all, government assistance was provided under the assumption that it would be repaid, exposing the government to risk of credit loss that is not accounted for simply by adding up expenditures and receipts. An economist would typically determine whether the government received full compensation for credit assistance by comparing the government's terms to what a private investor would have required for the loan or loan guarantee. Making such adjustments would increase the reported value of federal assistance and in some instances would indicate that taxpayers were not fully compensatedâalthough it is fair to question what terms would have been required, for example, by a hypothetical commercial lender in the depths of the 2007-2009 financial crisis, when private credit markets were not functioning normally. In any case, if such a standard were used, it would be a more demanding one than the government typically uses to measure the costs of federal credit and guarantee programs. The Congressional Budget Office (CBO) has provided assessments of the Troubled Asset Relief Program (TARP) adjusting for borrowing costs and market risk, but CBO has not offered such estimates of other government assistance. The final disposition of assets and liabilities arising from assistance often can take years. But not all sources continued to consistently report data long after the initial intervention. Thus, while the cost estimates presented here are based on official sources, they sometimes involve a degree of uncertainty. In some cases, precise information on the timing of outlays and recoupments is unclear and assumptions are necessary in order to compute the inflation adjustments. Where there is uncertainty about the timing of payments, we present a range of possible inflation-adjusted outcomes. There are broader policy concerns raised by government assistance that are difficult to quantify and do not get captured in tallies of the government's income and expenses. Potential benefits of assistance can include avoiding potentially long-lasting disruptions to consumers, workers, local communities, and the overall economy; averting losses to federally guaranteed retirement funds; and maintaining federal tax revenues. Potential drawbacks to assistance include the possibility that it may reduce competition by rewarding incumbents over new entrants and distort the affected product market by causing (or prolonging) overproduction; that it may cause "moral hazard" if firms respond to government assistance by acting with less financial prudence in the future; and that it can delay an industry's adjustment to structural problems such as high production cost and excess capacity. In every case, federal assistance to certain industries may raise questions about the fairness of providing assistance to some businesses but not to others. Sources Information on the various assistance programs comes primarily from reports from the Government Accountability Office (GAO), Congressional Research Service (CRS), and executive branch agencies involved in the assistance. Specific sources are cited in the individual sections. Reporting on the programs has varied significantly over the years as different agencies have undertaken the assistance under different statutory authority. In some cases, Congress has included specific reporting requirements when assistance is authorized or other specific oversight mechanisms. Historical vote totals are included from http://www.congress.gov and from Congressional Quarterly, CQ Almanac (various years). Various iterations of some bills received multiple votes; for brevity, we only include the final vote taken. Stock prices and market information are from the Wall Street Journal print and online versions. Inflation adjustments are based on gross domestic product (GDP) price index data from the Bureau of Economic Analysis. Railroad Restructuring (1957-1987)7 What Happened to the Company/Industry Throughout the 1950s, the rail industry was in decline as federal spending on highways and the growth of the airline industry ate into railroads' ability to compete with those other modes of transportation. One large railroad, the New York, Ontario and Western, which had been in financial distress since the 1930s, was liquidated in 1957. Rail industry leaders advocated for one or more of the following in order to counter this trend: permission to shut down unprofitable routes, especially passenger routes; direct subsidies to continue operations; and/or encouragement of large-scale mergers to create economies of scale. Congress' initial legislative response, the Transportation Act of 1958 ( P.L. 85-625 ), created a loan guarantee program for railroads and gave the Interstate Commerce Commission (ICC) sole authority over proposals to curtail service, circumventing the previous role of state agencies. Still, the industry underwent a wave of mergers, consolidating from 110 Class I railroads in 1957 to 71 in 1970. The process culminated in the 1968 merger of arch-rivals Pennsylvania Railroad and New York Central Railroad into the Penn Central, the largest railroad in the world at the time. By this time, a wave of bankruptcies was well underway. The New York, New Haven and Hartford Railroad had gone into bankruptcy in 1961 and was merged into the Penn Central in 1969, its inclusion having been a condition of the Penn Central-New York Central merger's approval by the ICC. The Central Railroad of New Jersey failed in 1967. Then, in declining financial condition due to falling revenues, badly rundown infrastructure, high property taxes, incompatible systems, and high labor costs, the Penn Central itself declared bankruptcy in June 1970, less than three years after its creation. Other railroads operating in the Northeast and Midwest also went bankrupt and could not be reorganized, some having suffered severe damage caused by Hurricane Agnes in 1972. The other troubled carriers included the Ann Arbor Railroad, the Reading Railroad, the Lehigh Valley Railroad, the Boston and Maine Railroad, and the Erie Lackawanna Railroad, itself the result of a merger of former competitors completed in 1960. In addition to disrupting passenger and freight transportation, the railroad industry's distress exposed a number of major banks and financial institutions to large potential losses. The commercial paper market, in which firms issue short-term securities to meet near-term financial needs, experienced disruptions following the Penn Central bankruptcy, leading to concerns that the Penn Central's problems could endanger companies in other industries. Executive or Regulatory Agency Action and Assistance Several federal agencies, including the Department of Transportation, the Department of Defense, and the Federal Reserve, were unwilling or unable to assist troubled railroads with loan guarantees. The ICC sought to assist railroads by expediting approval of applications for mergers or abandonment of unprofitable lines, but this was not enough to forestall bankruptcies. Congressional Action and Assistance Congress enacted several measures throughout the 1970s to avert the collapse of the rail industry. These actions combined federal financial assistance, deregulation, and the creation of new quasi-governmental private companies. The Rail Passenger Service and Emergency Rail Services Acts of 1970 The Rail Passenger Service Act of 1970 (P.L. 91-518), which was passed by voice vote in both houses of Congress, relieved all railroad companies of the obligation to provide intercity passenger service, creating a quasi-governmental private company called the National Railroad Passenger CorporationâAmtrakâto operate passenger trains over freight railroads' tracks with federal support. The act called for a "basic system" of key routes that the railroads would continue to operate until Amtrak began operations on May 1, 1971, and provided for railroad companies to transfer unneeded passenger rail equipment to Amtrak. The Emergency Rail Services Act of 1970 (P.L. 91-663) provided up to $125 million in loan guarantees to railroads to preserve essential service until a more permanent restructuring plan could be put in place. The law was passed in the Senate on a vote of 47-29 and in the House on a vote of 165-121. The Regional Rail Reorganization Act of 1973 In March 1973, the bankruptcy court handling the Penn Central's case found that its finances were so precarious that it would likely need to cease all operations before October of that year. In December 1973, the Regional Rail Reorganization Act ( P.L. 93-236 ), also called the 3R Act, created the United States Railway Association (USRA) to provide additional emergency funding and prepare the restructuring and rehabilitation of Penn Central and other bankrupt railroads. The law passed the Senate on a vote of 45-16 and the House on a vote of 284-59. It provided for the creation of Conrailâofficially the Consolidated Rail Corporationâas a quasi-private for-profit corporation that would take over operations of various bankrupt railroads in the Northeast and Midwest. USRA was charged with creating a "Final System Plan" that identified the lines that would be transferred to Conrail. The Railroad Revitalization and Regulatory Reform Act of 1976 The Railroad Revitalization and Regulatory Reform (4R) Act of 1976 ( P.L. 94-210 ), which approved the USRA's "Final System Plan," was enacted on February 5, 1976. It passed the House on a vote of 353-62 and the Senate on a vote of 58-26. Conrail was incorporated five days later, beginning operations on April 1, 1976, at which point its predecessorsâincluding the Penn Centralâceased to exist as railroad companies. In addition to taking responsibility for those railroads' physical infrastructure and freight operations, Conrail operated commuter services in several states. The 4R Act provided funding for Conrail, permitted and approved additional property designations under 3R, and facilitated the transfer of ownership of the Penn Central's Northeast Corridor line to Amtrak. Direct federal subsidies to Conrail took several forms including remuneration of direct operating losses, approximately $2.1 billion; capital rehabilitation, approximately $1.2 billion; and "lifetime protection" payments to employees of Conrail and its predecessors, approximately $650 million. Much of this flowed through USRA purchases of Conrail equity instruments. In addition, approximately $3 billion was paid to the estates of bankrupt railroads for property taken to create Conrail. Total assistance for Conrail was estimated at approximately $7 billion. The 4R Act also contained reforms aimed at easing ICC regulation of the railroad industry more broadly. Railroads were given greater flexibility to set shipping rates and were allowed for the first time to sign contracts with large shippers specifying rates and terms of service. The act gave the ICC the power to exempt certain types of freight traffic from rate regulation altogether. The act also created the Railroad Rehabilitation and Improvement Financing (RRIF) loan program, currently codified at 45 U.S.C. Â§Â§821-838, to offer long-term, low-cost loans to railroad operators. The RRIF program was intended to assist "short line" railroads, which took over many small lines that were being abandoned by larger railroads, to finance improvements to infrastructure and investments in equipment. Restructuring the Milwaukee and Rock Island Railroads The restructuring of the eastern railroads did not put an end to the industry's difficulties. In the Midwest, the Chicago, Rock Island and Pacific Railroad filed for bankruptcy in 1975, and the Chicago, Milwaukee, St. Paul and Pacific Railroad in 1977. They were not incorporated into Conrail, but were the subject of separate federal legislation. Congress passed the Milwaukee Railroad Restructuring Act ( P.L. 96-101 ) in both the House and the Senate by voice vote in 1979 and the Rock Island Railroad Transition and Employee Assistance Act ( P.L. 96-254 ) in both the House and Senate by voice vote in 1980. Each law contained worker protection provisions and empowered bankruptcy courts to accelerate the sale or abandonment of parts of their networks as part of restructuring. The Chicago, Milwaukee, St. Paul and Pacific Railroad abandoned or sold roughly two-thirds of its network, with the rest ultimately acquired in 1985 by the Canadian Pacific Railroad through an American subsidiary. The case of the Chicago, Rock Island and Pacific Railroad was direr; by March 1980, before Congress had a chance to pass its transition assistance law, the railroad had been deemed incapable of continuing rail operations by the ICC, declared the property of a neutral party (pursuant to 3R), and ceased operations. Its former property was acquired by multiple buyers. The Staggers Rail Act of 1980 With Conrail's profitability still not much improved, Congress passed the Staggers Rail Act of 1980 ( P.L. 96-448 ), by a 61-8 vote in the Senate and a voice vote in the House. The law expanded upon the deregulation begun in the 3R and 4R Acts. Among other provisions, the Staggers Act prevented the ICC from setting maximum shipping rates, permitted railroads to keep their rate agreements with customers secret, broadened the ICC's power to declare exemptions, and required the submissions of proposals for the future of Conrail. While many of its provisions were unpopular with some shippers, particularly those who could not readily move their freight by truck or barge if they found rail rates excessive, the law helped restore the freight rail sector to profitability and eventually led to increased capital investment in the industry. The Northeast Rail Services Act of 1981 While the duty to provide intercity passenger rail had been transferred to Amtrak by the Rail Passenger Service Act of 1970, Conrail was still bound to operate the local commuter routes previously run by its predecessor railroads. The Northeast Rail Services Act of 1981 (NERSA; P.L. 97-35 ) was enacted as Subtitle E of the Omnibus Budget Reconciliation Act of 1981, approved by the Senate on a vote of 80-15 and by the House on a vote of 232-195. NERSA relieved Conrail of all obligations to provide commuter rail service beginning January 1, 1983, in order to improve its profitability. To ensure continuity of operations, however, NERSA required state- or locally-chartered commuter authorities to continue to operate all commuter rail lines previously operated by Conrail, and created a new subsidiary of Amtrak to take over such lines if any state declined to do so (none did). NERSA also stipulated that Conrail's status as a quasi-governmental corporation should be temporary and that the government's stake in the company should eventually be sold to one or more private buyers. Repayment or Recoupment of Assistance Following the reforms in the 3R and 4R Acts, the Staggers Act, and NERSA, Conrail reported a profit in 1981 and in subsequent years. The government's 85% stake in the company was sold through an initial public offering in 1987 after the government rebuffed attempts by other railroads to acquire it in ways that could have reduced rail competition in the Northeast. (The other 15% was owned by Conrail employees.) The government recouped a total of approximately $2 billion, including a $300 million dividend from Conrail and $1.65 billion from the public offering. This was approximately $5 billion less than total government outlays, when measured in nominal dollars, or $20 billion to $24 billion less than the government's outlays when adjusted for inflation ( Table 1 ). Final Outcomes Railroad profitability increased following implementation of the Staggers Act, and railroad companies, devoting themselves entirely to freight traffic, continued to consolidate and shed unprofitable lines. Some 70,000 miles of railroad have been abandoned since 1980, and the number of large railroadsâknown as Class I railroadsâoperating in the United States now stands at seven. Following its privatization, Conrail continued as an independent company until 1997, when it was acquired by Norfolk Southern Corporation and CSX Corporation in a joint stock purchase valued at approximately $10.3 billion. Norfolk Southern and CSX split most of the Conrail assets after the purchase. Amtrak has never generated an operating profit, and has received federal operating support every year since its creation. Farm Credit System Crisis (1980s)15 What Happened to the Industry The federal government has a long history of assisting farmers with real estate and operating loans. This intervention has been justified by the presence of asymmetric information between lenders and farmers, lack of competition and resources in rural areas, and policies to target assistance to disadvantaged groups. The two agricultural lenders with the greatest federal connection are the Farm Service Agency (FSA) and the Farm Credit System (FCS), a private cooperative. The first, FSA, is part of the U.S. Department of Agriculture (USDA) and receives federal appropriations to make direct loans and guarantees to farmers who do not qualify for commercial credit. The second, FCS, is privately funded without federal appropriation as a cooperatively owned entity with a statutory mandate to serve only agriculture-related borrowers. The FCS is regulated by the Farm Credit Administration, an independent agency funded by assessments on system institutions. A severe downturn in the agricultural economy beginning in the early 1980s contributed to a financial crisis among many agricultural lenders and their farmer borrowers (the result of low farm income, high interest rates, and declining land prices). Since the FCS had exposure to only a single industry, it held a loan portfolio that developed large delinquencies, much of which was eventually written off as uncollectible. The farm financial crisis caused the FCS to experience operating losses of $2.7 billion in 1985 and $1.9 billion in 1986, for example, which jeopardized its financial stability, including its ability to repay bondholders in private capital markets. While FCS debt is not a government obligation nor guaranteed, many investors perceive its government-sponsored enterprise (GSE) status to imply that the Treasury would not allow FCS default. Moreover, FCS was an important lender to agriculture and held one-third of farm debt at the time. Congressional Action and Assistance The Agricultural Credit Act of 1987 The Agricultural Credit Act of 1987 ( P.L. 100-233 ) was enacted on January 6, 1988, after being approved by the Senate by a vote of 85-2 and the House on a vote of 365-18. The law authorized a $4 billion financial assistance package. It created a new FCS entity, the FCS Financial Assistance Corporation, which utilized $1.26 billion in loans from the U.S. Treasury. The assistance stabilized the FCS by allowing it to repay its bonds and meet its debt obligations. The act required the FCS to work out a schedule for repaying the Treasury, mandated FCS organizational changes, protected FCS borrowers' stock investments in FCS institutions, and specified requirements for restructuring FCS problem farm loans. Among the notable organizational changes, FCS banks became jointly and severally liable for each other's debts (that is, the FCS banks together would be responsible for the cumulative debts of the individual FCS banks if any become insolvent). The act also created an FCS Insurance Corporation, similar to the Federal Deposit Insurance Corporation, to further ensure the ability of the FCS to repay its bonds. Although the primary purpose of the 1987 Act was to rescue and restructure the FCS, the act also led to the creation of a system of borrower rights for the FCS and the FSA. These borrower rights are somewhat unique to agriculture, compared to what was available to homeowners during the 2008 housing crisis. Before the FCS and FSA can initiate foreclosure proceedings, it must offer options to restructure delinquent farm loans when it would be less costly than taking foreclosure action, and it must offer rights of first refusal for an individual or extended family to repay a delinquent loan to avoid foreclosure and preserve a farm homestead. Repayment or Recoupment of Government Assistance The FCS Financial Assistance Corporation borrowed $1.26 billion from the U.S. Treasury during the farm financial crisis of the 1980s. The FCS made provisions in the early 1990s to systematically repay all of its financial assistance by collecting assessments on system banks and associations. The arrangement for the 15-year debt by the FCS Financial Assistance Corporation to the Treasury was that the government paid the interest for the first five years, FCS and the Treasury split the interest during the second five years, and FCS bore all of the interest during the final five years. In June 2005, the last of the bonds and interest was repaid on schedule to the U.S. Treasury. The FCS Financial Assistance Corporation was dissolved in December 2006. Final Outcome Farm Credit System financial performance steadily improved throughout the 1990s and into the present day. The Farm Credit System Insurance Corporation is fully funded to its capitalization goals. The borrowers' rights provisions continue to provide protection to farmers facing new financial difficulties, such as through the financial crisis in 2007-2009 and during the current period of lower farm income. Savings and Loan Crisis (1980s-1990s)20 What Happened to the Industry21 Savings and loan institutions (S&Ls) were state- or federally chartered deposit-taking institutions whose loans mainly took the form of residential mortgages. Some were mutual institutions owned by their depositors, while others had publicly traded shares. Federally chartered S&Ls were authorized in the 1930s to promote mortgage lending and were regulated by a separate regulator, the Federal Home Loan Bank Board (FHLBB), rather than by the agencies responsible for regulating commercial banks. The industry suffered a solvency crisis in the 1980s. When interest rates rose, S&Ls' floating-rate liabilities (e.g., deposits) had a higher interest cost than the industry was earning on fixed-rate assets that had been issued before rates rose (e.g., mortgages). In the presence of government deposit insurance, depositors had little incentive to withdraw their deposits from unprofitable S&Ls, since their deposits were safe even if their S&L failed. This allowed insolvent S&Ls to continue to access the funds needed to keep operating. According to a study by the Federal Deposit Insurance Corporation, "Net S&L income, which totaled $781 million in 1980, fell to negative $4.6 billion and $4.1 billion in 1981 and 1982â¦. In fact, tangible net worth for the entire S&L industry was virtually zero, having fallen from 5.3 percent of assets in 1980 to only 0.5 percent of assets in 1982." Regulatory Agency Action and Assistance Policymakers were slow to address the crisis because of concerns that resolving large numbers of S&Ls would have a negative effect on homeownership by disrupting mortgage lending. Government policy is generally viewed as exacerbating the crisis in two ways. First, the S&L regulator, the FHLBB, practiced "regulatory forbearance," allowing insolvent firms to keep operating in the hopes that they would eventually become profitable again. Forbearance made the problem larger because it arguably encouraged such "zombie S&Ls" to take on more risks, undermining more conservatively run competitors. Regulatory forbearance was motivated in part by the fact that the Federal Savings and Loan Insurance Corporation (FSLIC), the agency responsible for insuring S&L customers' deposits, lacked the funds to honor deposit insurance claims if all the undercapitalized S&Ls were rescued or closed down. Almost 1,000 thrifts still in operation, holding half of total industry assets, were insolvent or nearly insolvent by 1986. By 1987, the FSLIC itself was insolvent. In the meantime, zombie S&Ls incurred additional losses, which increased the ultimate cost to the government. Second, deregulation in the early 1980s gave the industry new opportunities to take risks that increased ultimate losses, which arguably occurred because deregulation took place in the context of an already undercapitalized industry with inadequate prudential regulation. Congressional Action and Assistance Deposit insurance is self-financing only if insurance premiums match expected losses. Because the FSLIC deposit insurance scheme was inadequate, a government "bailout" could only have been avoided if the government had reneged on its promise to guarantee deposits. The congressional response to the S&L crisis can be divided into two phases. From 1980 to 1982, legislation was enacted to attempt to restore industry solvency (or buy time to restore industry solvency) through forbearance and the removal of legal restrictions on industry activities. From 1987 on, legislation was enacted to attempt to resolve insolvent S&Ls by granting financial resources and to prevent future losses through new regulatory powers. Many of these bills contained wide-ranging provisions, and only the provisions relevant to the S&L crisis are highlighted here. Competitive Equality Banking Act of 1987 (CEBA) The Competitive Equality Banking Act of 1987 ( P.L. 100-86 ) was passed in the Senate on a vote of 96-2 and in House on a vote of 382-12. The law created the Financing Corporation (FICO) to provide funding to FSLIC by issuing $10.8 billion in long-term bonds to be repaid by assessments on savings and loans and the Federal Home Loan Banks. It also eased regulatory requirements for savings and loans in economically depressed areas. According to the FDIC study, "Although the Competitive Equality Banking Act of 1987 provided the FSLIC with resources to resolve insolvent institutions, the amount was clearly inadequate. Nevertheless, under the new FHLBB chairman, Danny Wall, the FSLIC resolved 222 S&Ls, with assets of $116 billion, in 1988.... But despite these resolutions, at year-end 1988 there were still 250 S&Ls, with $80.8 billion in assets that were insolvent based on regulatory accounting principles." Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ( P.L. 101-73 ) was passed by the House on a vote of 201-175 and by the Senate by division vote (individual votes not recorded). The law abolished FSLIC and transferred its assets, liabilities, and operations to the FSLIC Resolution Fund (FRF). The act abolished FHLBB and transferred its authority to the newly created Office of Thrift Supervision with new regulatory powers, created the Savings Association Insurance Fund, administered by FDIC, created the Resolution Trust Corporation (RTC) to resolve troubled thrifts, and created the Resolution Funding Corporation (REFCORP) to issue debt to finance RTC to be repaid by industry assessments and the federal government. Resolution Trust Corporation Funding Act of 1991 The Resolution Trust Corporation Funding Act of 1991 ( P.L. 102-18 ) , passed by the House on a vote of 225-188 and passed by the Senate by voice vote, provided $30 billion to the RTC to cover losses of failed thrifts in FY1991. Resolution Trust Corporation Refinancing, Restructuring, and Improvement Act of 1991 The Resolution Trust Corporation Refinancing, Restructuring, and Improvement Act of 1991 ( P.L. 102-233 ), passed by the Senate on a vote of 44-33 and passed in the House by division vote 112-63, provided the RTC up to $25 billion until April 1, 1992, to resolve failed savings and loan institutions. The law also restructured the RTC and terminated FICO. Resolution Trust Corporation Completion Act of 1993 The Resolution Trust Corporation Completion Act of 1993 ( P.L. 103-204 ) passed the House on vote of 235-191 (with 1 Member voting present), and passed the Senate on a vote of 54-45. The law provided $18.3 billion to finish the savings and loan cleanup. It terminated the RTC on December 31, 1995, and authorized $8.5 billion for the Saving Association Insurance Fund (SAIF), to be spent only if the savings and loan industry could not pay for future failures itself through higher insurance premiums. Repayment or Recoupment of Government Assistance The cost of the S&L cleanup was spread among the federal government (through appropriations), government-sponsored enterprises (the Federal Home Loan Bank system), and the industry (through deposit insurance premiums). Two quasi-governmental entities (FICO and REFCORP) were created to provide financing. Measuring the cost of the S&L crisis poses unique challenges compared to the other episodes discussed in this report. The resolution of failing thrifts was not a one-time event. Thrifts may fail at any time, even when economic conditions are generally good, and the insurance fund may be called upon to repay depositors. What was unique during the crisis was the magnitude of the failures, which caused premiums to be inadequate for addressing the problem. Thus, a somewhat arbitrary date must be chosen for the beginning and the end of the cleanup. Different sources vary slightly on the overall net cost. In January 1995, CBO estimated the cost at $150 billion in 1990 dollars. In 1996, GAO estimated the cost at $160.1 billion. Table 2 presents an estimate from the FDIC Banking Review , as this source provides the most detailed information. It estimated expenses paid by the FRF and RTC to be $152.7 billion, with an additional $7.3 billion in indirect costs from 1986 to 1995. Of the $152.7 billion, direct appropriations covered $99.4 billion and FICO and REFCORP bond proceeds covered $38.3 billion. The government recouped $30.1 billion through industry assessments, interest on bonds paid by the industry, and the value of remaining assets seized from failed S&Ls as of the end of 1999, putting the net direct costs at $122.6 billion and the net total costs at $129.9 billion. (CRS classified the FHLBs as industry for purposes of this table, so their contributions are considered a recoupment rather than a government expense.) It should be noted that this source does not include interest costs on the federal debt used to finance appropriations or the FICO and REFCORP bonds issued to finance the cleanup. Final Outcome Cumulatively, 1,043 insolvent firms holding $519 billion in assets were resolved between 1986 and 1995. The industry's finances stabilized by the mid-1990s, by which time the number of S&Ls had fallen by half compared to 1986. The RTC ceased operations at the end of 1995. Some special bonds issued to finance the cleanup remain outstanding until 2030. S&Ls were renamed savings associations or thrifts and their regulation was reformed by FIRREA. Further problems with the regulation of the thrift industry in the 2007-2009 financial crisis led to the elimination of the Office of Thrift Supervision and the shifting of its powers to the federal banking regulators by the Dodd-Frank Wall Street Reform and Consumer Protection Act ( P.L. 111-203 ). Airline Industry (2001-2014)34 What Happened to the Company/Industry The use of commercial airplanes as assault vehicles to wreak havoc on the United States has no precedent in aviation history. At the time of the September 11, 2001, terrorist attacks on the World Trade Center in New York and the Pentagon in Washington, the airline industry was already experiencing a difficult financial situation due to the recession. In the wake of the attacks, the federal government temporarily grounded all civil air traffic in the United States, including all commercial flights. The attacks contributed to a significant decline in both domestic and international passenger traffic in 2001 that resulted in major financial losses. Congressional Action and Assistance The Air Transportation Safety and System Stabilization Act In the aftermath of the 9/11 attacks, Congress moved to provide the airline industry with federal financial support. The Air Transportation Safety and System Stabilization Act (Stabilization Act; P.L. 107-42 ) passed in the House by a vote of 356-54, with two Members voting present, and in the Senate by a unanimous vote. It was signed into law on September 22, 2001, providing the airlines access to up to $15 billion in short-term assistance. This included $5 billion in emergency assistance to compensate the air carriers for losses incurred as a result of the attacks, and $10 billion in the form of guaranteed loans designed to provide longer-term stability to the industry and make it more creditworthy in private markets. The Stabilization Act also supported the airline industry by providing premium war risk insurance for 180 days. This insurance was extended multiple times until it expired in 2014. Executive or Regulatory Agency Action and Assistance The Secretary of Transportation and the Comptroller General were in charge of the $5 billion direct compensation to air carriers, while the distribution of the loan guarantees was controlled by an "air transportation stabilization board" (ATSB) consisting of three voting membersâthe Chairman of the Federal Reserve Board, the Secretary of the Treasury, and the Secretary of Transportation, or their designeesâand a non-voting member, the Comptroller General. According to the April 2011 report of the President to the U.S. Congress, as required by the Stabilization Act, 407 air carriers were compensated for direct operating losses as the result of federal ground stop orders as well as any incremental losses incurred between September 11, 2001, and December 31, 2001. Payments totaled nearly $4.6 billion of the $5 billion initially made available. Portions of the remaining balance in the account were rescinded by Congress at various points, with all unobligated balances permanently rescinded by the Omnibus Appropriations Act, 2009 ( P.L. 111-8 , Title I). The ATSB was established to review and decide on airlines' applications for loan guarantee assistance. The ATSB received 16 loan guarantee applications from a range of air carriers, including large airlines, small airlines, low-fare airlines, and charter and cargo carriers. It approved and closed on six loan guarantee applications: American West, ATA Airlines (formerly American Trans Air), Aloha Airlines, Frontier Airlines, US Airways, and World Airways. The total amount of loan guarantees was $1,558,600,000. Repayment or Recoupment of Assistance Five of the six guaranteed loans were fully repaid by the carriers, while the ATA Airlines loan guarantee had to be exercised when ATA Airlines filed for bankruptcy under Chapter 11. In 2005, the ATSB paid approximately $125 million, the outstanding balance on the ATA loan which the ATSB had guaranteed, but eventually recouped $97.2 million of that amount. The ATSB also established that the government was to be compensated for the risks associated with the guarantees through fees and stock warrants. The six airlines paid more than $240 million in fees and interest; while proceeds of warrant sales totaled $142.6 million. Overall, after deducting ATSB expenses, the 2011 report of the President to the U.S. Congress concluded that the government recovered a net of $338.8 million from the carriers as a result of the ATSB loan guarantee activities (see Table 3 ). According to the Federal Aviation Administration's estimate, between September 2001 and December 2014, $1.8 billion in premiums were collected and the total amount of claims paid for three war risk occurrences was $10,107,874. The remaining balance in the Aviation Insurance Revolving Fund is used to back more than $20 billion of the non-premium aviation insurance program that provides critical support to national security and defense by making insurance available to air carriers contracted by the Department of Defense to support military operations. Final Outcome The uncommitted balance of the ATSB loan guarantee authority was $8,441,400,000 on June 28, 2002, the deadline for submitting applications. The Consolidated Appropriations Act of 2008 ( P.L. 110-161 , Division D, Title I) rescinded the unobligated balance of program funds. The War Risk Insurance program expansion expired in 2014. If direct assistance is excluded, the government recouped more than was paid out on both the loan guarantees and the war risk insurance program. Nevertheless, it was exposed to significant financial risks from both programs. Troubled Asset Relief Program (TARP) BankÂ Support (2008-Present)38 What Happened to the Industry The financial crisis of 2007-2009 grew out of an unprecedented housing boom that turned into a housing bust. Much of the lending for housing during the boom was based on asset-backed securities that used the repayment of housing loans as the basis of these securities. As housing prices fell and mortgage defaults increased, these securities became illiquid and fell sharply in value. This caused capital losses for firms holding them, which threated many firms with insolvency. There was widespread lack of trust in financial markets as participants were unsure which firms might be holding so-called toxic assets that might now be worth much less than previously estimated, thus making these firms unreliable counterparties in financial transactions. This uncertainty prevented firms from accessing credit markets to meet their liquidity needs. The banking industry was at the center of the crisis, both as holders of mortgage backed securities and as lenders making mortgage loans. Executive or Regulatory Agency Action and Assistance The Federal Reserve was created in 1913 largely to act as a lender of last resort in liquidity crises, and its authority was augmented during the Great Depression. As the crisis developed in 2007 and 2008, the Federal Reserve took a variety of steps under its statutory authority to inject liquidity into the financial system. To the degree that the crisis caused solvency problems in financial firms, however, the Federal Reserve was unable to assist, as its authority is limited to lending funds, which offered little assistance to firms that were already highly leveraged and suffering from capital shortfalls. Congressional Action and Assistance Emergency Economic Stabilization Act of 2008 The Emergency Economic Stabilization Act of 2008 (EESA), was brought to the floor of the House as a substitute amendment to H.R. 3997 on September 29, 2008 ; this amendment failed in the House by a vote of 205-228. Another version of EESA, which included the original EESA plus several other provisions not in the first bill, was offered on October 1 in the Senate as an amendment ( S.Amdt. 5685 ) to an unrelated bill, H.R. 1424 , which had previously passed the House. The amendment to H.R. 1424 was approved by a Senate vote of 74-25; it was then taken up by the House and passed by a vote of 263-171, on October 3, 2008. The President signed the amended version of H.R. 1424 , now P.L. 110-343 , the same day as House passage. EESA gave the Department of the Treasury broad authority under the newly created Troubled Asset Relief Program to use up to $700 billion to address the crises. The congressional debate was focused on purchasing the "toxic" assets from firms, thus replacing them with safer assets, but the statute also allowed the Treasury to guarantee assets or to directly augment firms' capital. Among the programs under the EESA authority, the Treasury created the Capital Purchase Program (CPP) to purchase up to $250 billion in preferred shares from banks, thus adding this amount to capital levels. More than 700 banks participated in the CPP and approximately $205 billion was actually disbursed. In addition, there was a relatively small ($570 million) Community Development Financial Institution program that also purchased preferred shares, but on less stringent terms than the CPP. The CPP was augmented with an additional Targeted Investment Program (TIP) preferred share purchases and asset guarantees for two of the most troubled banks, Bank of America and Citigroup. The share purchases were $20 billion to each bank. The asset guarantees were more complicated. Any losses were to be shared between the Treasury, FDIC, and Federal Reserve. The guarantee for Bank of America on $118 billion in assets was offered, but never officially closed. The Citibank guarantee was on $301 billion in assets, but funds were never paid out on any losses. EESA was amended in early 2009, specifically allowing earlier repayment of assistance than originally foreseen and adding additional executive compensation requirements on firms with outstanding assistance. P.L. 111-5 passed the House on a vote of 246-183 and the Senate on a vote of 60-38. Repayment or Recoupment of Assistance In most cases, the Treasury recouped money from sales of preferred shares, primarily back to the issuing banks, as dividends and from warrants that were issued along with the preferred shares and fees paid for the asset guarantees. The Citigroup preferred shares were converted into common equity and sold on the open market. Recoupment from the general TARP bank assistance was completed relatively quickly. For example, by the end of 2011, approximately $255.4 billion had been recouped in total with $17.35 billion of $245.5 billion still outstanding. By 2020, $271.4 billion had been recouped, with $0.04 billion of preferred shares still outstanding. The special assistance for Bank of America was completed by the end of 2009, with a $425 million termination fee paid for the uncompleted asset guarantee and repurchase of the $20 billion in TIP shares resulting in $22.7 billion in recoupment. Citigroup's special assistance finished in December 2009 with $21.8 billion in recoupment from the TIP shares and $3.9 billion in premiums paid for the asset guarantees. Despite the default risk that TARP was exposed to, the government recouped $30.5 billion more than it disbursed on the bank programs (see Table 4 ). Final Outcome The financial crisis passed relatively quickly for the banking industry once the panic conditions of fall 2008 passed. One marker of this is that originally banks were to be required to hold the CPP capital on their books for a minimum of three years, whereas banks began repurchasing CPP preferred shares by March 2009 when the program was still disbursing funds. The overall profitability levels in the banking system returned relatively quickly. Auto Industry (2008-2014)40 What Happened to the Industry In 2008 and 2009, the financial crisis, rising gasoline prices, and a contracting global economy combined to create the worst market in decades for production and sale of motor vehicles in the United States and other industrial countries. While Ford Motor Company had negotiated an $18 billion line of credit in 2007, General Motors (GM) and Chrysler did not have similar long-term financing available when the financial crisis hit, which temporarily made it difficult for most firms to access borrowing markets. In 2009, GM's production dropped by 47% (compared to 2008), and Chrysler's by 57%; total U.S. production among all automakers fell by 34%. The prospect of GM and Chrysler bankruptcies raised other concerns: the failure of their parts suppliersâalso used by most other automakersâcould cascade financial difficulties throughout the sector; and those supplier failures could overwhelm the federal Pension Benefit Guaranty Corporation with abandoned pension plans. In addition, large affiliated financial companies (which provided auto loans to consumers and dealers) could fail if the automakers entered bankruptcy. Congressional Action and Assistance Congress never passed specific legislation to address auto industry issues. The George W. Bush Administration and congressional leaders differed on the type of assistance that should be offered the automakers: initially, the Administration recommended reprogramming a Department of Energy motor vehicle loan program to provide bridge loans. In December 2008, the House of Representatives passed H.R. 7321 , which would have authorized funds from the DOE Advanced Technology Vehicles Manufacturing program (ATVM) as bridge loans to GM and Chrysler. Although that bill passed the House 237-170, the Senate did not vote on it. When this legislation stalled, the George W. Bush Administration announced that it would use the Troubled Asset Relief Program to support the automakers, arguing that failure to provide assistance could make the recession worse and impose other federal costs, such as unemployment insurance for many displaced auto and auto parts employees. Executive or Regulatory Agency Action and Assistance The Bush Administration made initial TARP loans of $24.8 billion to GM, Chrysler, and two auto financing companies (GMAC and Chrysler Financial) in December 2008 and January 2009. When the Obama Administration took office in January 2009, it continued this loan program, bringing total loans to the auto industry to $79.7 billion. In addition, the Obama Administration established an Auto Task Force chaired by the Secretary of the Treasury to work with GM and Chrysler on restructuring plans with creditors, unions, dealers, and other stakeholders. The goal of the spring 2009 restructurings was to avoid bankruptcy filings, but all stakeholders did not agree to the major changes in the companies. Chrysler and GM filed for bankruptcy in April and June 2009, respectively. After about a month, both companies emerged from bankruptcy court, with new owners: the U.S. Treasury owned about 10% of Chrysler and nearly 61% of GM in return for forfeiting repayment of the previous loans. Other owners included the Canadian government, bondholders, and the United Auto Workers. The federal ownership was sold off over the following years. Repayment or Recoupment of Assistance The assistance was repaid or recouped beginning in 2009 in a variety of ways, including initial public offerings, gradual public offerings of other federal shares, and private sales of stock. Table 5 summarizes the amounts of government assistance and the amount of recoupment for auto industry assistance. Final Outcome The U.S. Treasury sold its last holdings of Chrysler in June 2011 and GM in December 2013. The proceeds from the sales were not enough to cover the original loans to Chrysler and GM. Chrysler Financial fully repaid its loan, and the federal government's recoupment from GMAC was greater than the amount of its assistance. After restructuring and bankruptcy, GM and Chrysler recovered their positions as major U.S. automakers; GM is independent and Chrysler is part of Fiat Chrysler Automobiles (FCA), a corporation based in Great Britain. Table 6 shows comparisons before and after restructuring and bankruptcy. Money Market Mutual Fund Guarantee (2008-2009)44 What Happened to the Industry Money market mutual funds are a type of mutual fund that generally invest in high-quality, short-term assets. Often the value of a share is held at $1 per share and fund gains are paid out as dividends mimicking interest payment. Thus, they are seen as largely analogous to bank deposits, but are not guaranteed by the Federal Deposit Insurance Corporation (FDIC). As part of the market turmoil resulting from the bursting of a nationwide housing bubble, on September 16, 2008, a money market mutual fund called the Reserve Fund "broke the buck," meaning that the value of its shares had fallen below $1. This occurred because of losses it had taken on short-term debt issued by the investment bank Lehman Brothers, which filed for bankruptcy on September 15, 2008. Money market investors had perceived "breaking the buck" to be highly unlikely, and its occurrence set off a generalized run on money market mutual funds, as investors simultaneously attempted to withdraw an estimated $250 billion of their investmentsâeven from funds without exposure to Lehman Brothers. Executive or Regulatory Agency Action and Assistance To stop the run, the Treasury announced an optional program to guarantee deposits in participating money market funds. The Treasury would finance any losses from this guarantee with assets in the Exchange Stabilization Fund (ESF), funds intended to protect the value of the dollar. The Treasury announced this program without seeking specific congressional authorization, justifying the program on the grounds that guaranteeing money market funds would protect the value of the dollar. The program expired after one year in September 2009. Congressional Action and Assistance The Emergency Economic Stabilization Act of 2008 included language (Section 131) that directed the Treasury Secretary to reimburse the Exchange Stabilization Fund for any funds used for the money market guarantee program and prohibited usage of the ESF in the future for such a program. Repayment or Recoupment of Assistance Funds utilizing the guarantee program paid fees for the guarantee of between 0.015% and 0.022% of the amount guaranteed by the program. Final Outcome Over the life of the program, the Treasury reported that no money market mutual fund guarantees were invoked and $1.2 billion in fees had been collected (see Table 7 ). More than $3 trillion of deposits were guaranteed and, according to the Bank for International Settlements, 98% of U.S. money market mutual funds were covered by the guarantee, with most exceptions being funds that invested only in Treasury securities. Agricultural Trade Aid (2018-2019)49 What Happened to the Sector In early 2018, the Trump Administrationâciting concerns over national security and unfair trade practicesâimposed increased tariffs on steel and aluminum from a number of countries and on a broad range of U.S. imports from China. Several of the affected foreign trading partnersâincluding China, Canada, Mexico, the European Union, and Turkeyâresponded to the U.S. tariffs with their own retaliatory tariffs targeting various U.S. products, especially agricultural commodities. As a result of these retaliatory tariffs, both market prices and exports of affected U.S. agricultural products dropped sharply in the immediate aftermath of retaliation before gradually recovering as trade shifted to alternate markets. The most notable result of this trade dispute was a decline in trade between the United States and China. From 2010 through 2016, China was the top destination for U.S. agricultural exports based on value. In 2018, U.S. agricultural exports to China declined 53% in value to $9 billion from $19 billion in calendar year 2017. The retaliatory tariffs affected producers of several major U.S. commodities, including field crops like soybeans and sorghum, livestock products like milk and pork, and many fruits, nuts, and other specialty crops. Following the imposition of retaliatory tariffs in 2018, the United States began negotiations with several of the retaliating trade partners to resolve the disputes. However, several of the negotiations were protractedâparticularly the U.S.-China trade talksâand trade failed to return to normal patterns during 2018 and 2019. Executive or Regulatory Agency Action and Assistance The Secretary of Agriculture used his authority under Section 5 of the Commodity Credit Corporation (CCC) Charter Act of 1948 (P.L. 80-806; 15 U.S.C. 714 et seq.), as amended, to initiate two ad hoc trade assistance programs in 2018 and 2019. Referred to as "trade-aid packages," these two initiatives represented the Administration's effort to provide short-term assistance to farmers in response to the foreign trade retaliation targeting U.S. agricultural products. The first trade-aid package was announced on July 24, 2018. It targeted production for nine agricultural commodities in 2018 and was valued at up to $12 billion. The second trade-aid package was announced on May 23, 2019. It targeted production for an expanded list of 41 commodities and was valued at up to an additional $16 billion. According to the U.S. Department of Agriculture (USDA), the two trade-aid packages are structured in a similar manner and include three principal components ( Table 8 ): The Market Facilitation Program (MFP) provides direct payments to producers of USDA-specified "trade damaged" commodities. USDA used different payment rate formulas to determine the MFP payment distribution for each of the 2018 and 2019 programs (described below). MFP payments are administered by USDA's Farm Service Agency (FSA). The Food Purchase and Distribution Program (FPDP) is for purchases of unexpected surpluses of affected commodities such as fruits, nuts, rice, legumes, beef, pork, milk, and other specified products for redistribution by USDA's Food and Nutrition Service through federal nutrition assistance programs including food banks, schools, and other outlets serving low-income individuals. It is administered by USDA's Agricultural Marketing Service. The Agricultural Trade Promotion (ATP) program provides cost-share assistance to eligible U.S. organizations for activitiesâsuch as consumer advertising, public relations, point-of-sale demonstrations, participation in trade fairs and exhibits, market research, and technical assistanceâto boost exports for U.S. agriculture, including food, fish, and forestry products. It is administered by USDA's Foreign Agriculture Service in conjunction with the private sector. The two years of trade assistance, as announced by the Secretary of Agriculture, were valued at a potential combined $28 billion, the largest component being the MFP direct payments to producers valued at a combined $24.5 billion ( Table 8 ). The broad discretionary authority granted to the Secretary under the CCC Charter Act to implement the trade-aid package also allowed the Secretary to determine how the aid was calculated and distributed. Some important differences between the 2018 and 2019 trade aid packages include the following: Although the 2018 and 2019 MFP programs focused payments on the same three commodity groupsânon-specialty crops (grains and oilseeds), specialty crops (nuts and fruit), and animal products (hogs and dairy)âthe 2019 MFP included an expanded list of eligible commodities (41 eligible commodities in 2019 compared with nine in 2018). The 2018 MFP payments for eligible specialty and non-specialty crops were based on physical production in 2018, and calculated as per-unit payment rates. The 2019 MFP program based its payment rates for specialty crops on harvested acres, and non-specialty crops on planted acres. This change was done to avoid having MFP payments reduced by the lower yields that were expected to occur across major growing regions due to the widespread wet spring and delayed plantings. Then a weighted-average MFP payment-rate-per-acre was calculated at the county level. This was done to minimize influencing producer crop choices and avoid large payment-rate discrepancies across commodities grown within the same county. The end result was a single 2019 MFP payment rate for each county with eligible commodities. Under both 2018 and 2019 MFP programs, payments to dairy producers were based on historical production, while those to hog producers used mid-year inventory data. Payments were made in three tranches under both the 2018 and 2019 MFP programs; cumulative program receipts were subject to annual payment limits and adjusted gross income (AGI) eligibility requirements. The 2018 MFP payments were capped on a per-person or per-legal-entity basis at a combined $125,000 for eligible non-specialty crops, a combined $125,000 for animal products, and, separately, a combined $125,000 for specialty crops. In contrast, the 2019 package used expanded payment limits per individual per commodity group ($250,000) and an expanded maximum combined payment limit across commodity groups ($500,000 versus $375,000 in 2018). Both 2018 and 2019 MFP payment recipients were subject to an AGI eligibility threshold of $900,000, but with an exemption from the AGI criteria if at least 75% of a farm's AGI was from farming operations. There is a general consensus among farm policy analysts that the MFP payments provided a substantial income boost to the U.S. agricultural sector in the aggregate during what otherwise would have been a period of low commodity prices and low net farm income. However, an examination of MFP payments data reveals that they were unevenly distributed across both commodities and regions. Congressional Action and Assistance No congressional action was involved in the establishment, funding, or implementation of the 2018 and 2019 MFP programs. The ranking member of the Senate Committee on Agriculture, Nutrition, and Forestry, Debbie Stabenow of Michigan, has raised concerns about the methodology used to determine payment rates and the resultant distribution of payments across both commodities and regions. In January 2020, Senator Stabenow requested a comprehensive investigation by GAO into the integrity of USDA's trade aid to farmers affected by the Trump Administration's trade policies. Repayment or Recoupment of Assistance There is no provision for repayment or recoupment of any of the funds disbursed under the 2018 and 2019 trade-aid packages. President Trump has claimed that the tariffs imposed on products imported into the United States increased U.S. government revenue, and that these amounts, mainly paid by Chinese exporters, were used to offset the cost of the trade-aid packages. However, economic studies have generally found that the cost of tariffs on imported goods is borne largely by U.S. firms and consumers, not by foreign trading partners. Final Outcome USDA's use of CCC authority to initiate and fund agricultural support programs without congressional involvement is not without precedent, but the scope and scale of its use for the two trade-aid packagesâat a potential cost of up to $28 billionâhave increased congressional and public interest. On February 11, 2020, USDA Inspector General Phyllis Fong told the House Agriculture Appropriations Subcommittee that her office would be undertaking an investigation of the Administration's trade assistance programs, starting with whether USDA had the proper legal authority to make direct payments to farmers. It is also possible that other countries may challenge MFP payments as a violation of U.S. trade commitments to the World Trade Organization. Summary:	null	96	61,842	61,844	61,844	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Serious disruptions for certain industries caused by the COVID-19 (coronavirus) pandemic have led to calls for federal government assistance to affected industries. Although out of the ordinary, this would not be the first occasion on which the federal government has provided aid to troubled or financially distressed industries. To help inform congressional debate, this report examines selected past instances in which the government has aided troubled industries, providing information about the way in which such assistance was structured, the role of Congress, and the eventual cost. Assistance for distressed industries or businessesâsometimes popularly referred to as "government bailouts"âhistorically has taken different forms and has occurred under varying circumstances. Assistance has not been limited to outlays by the Treasury, or to actions explicitly authorized by Congress, or to measures which imposed a net cost on taxpayers on an unadjusted cash-flow basis. Sometimes, the industry distress was being driven by external shocks, such as the 9/11 terrorist attacks or the 2007-2009 financial crisis, and other times it was driven by long-term secular trends, such as changes in the economic outlook for the railroad industry. Past assistance has involved such instruments as loan guarantees, asset purchases, capital injections, direct loans, and regulatory changes, with the specific mix of policies varying significantly from case to case. These differences make it somewhat subjective what should be defined as a "bailout." In order to provide greater detail, the examples discussed in this report all involve cases in which federal assistance was (1) widely available to firms within an industry rather than being targeted to a particular firm; (2) extraordinary in nature rather than a type of assistance that is routinely provided; and (3) motivated primarily by a desire to prevent industry-wide business failures. For each case, the report provides data on the costs and income to government, to the extent that they are available. In some of the cases reviewed in this report, the government was able to recoup much or all of its assistance through fees, interest, warrants, and loan or principal repayments. In others, there were no arrangements made for recoupment or repayment. But the fact that a beneficiary of government assistance repaid a loan or gave the government shares that ultimately increased in value does not necessarily mean that the government "broke even" or "made a profit." The government had to borrow, incurring interest payments, to finance these programs, and adjusting federal outlays and receipts for inflation may not account fully for this. In most cases, although not all, government assistance was provided under the assumption that it would be repaid, exposing the government to risk of credit loss that is not accounted for simply by adding up expenditures and receipts. An economist would typically determine whether the government received full compensation for credit assistance by comparing the government's terms to what a private investor would have required for the loan or loan guarantee. Making such adjustments would increase the reported value of federal assistance and in some instances would indicate that taxpayers were not fully compensatedâalthough it is fair to question what terms would have been required, for example, by a hypothetical commercial lender in the depths of the 2007-2009 financial crisis, when private credit markets were not functioning normally. In any case, if such a standard were used, it would be a more demanding one than the government typically uses to measure the costs of federal credit and guarantee programs. The Congressional Budget Office (CBO) has provided assessments of the Troubled Asset Relief Program (TARP) adjusting for borrowing costs and market risk, but CBO has not offered such estimates of other government assistance. The final disposition of assets and liabilities arising from assistance often can take years. But not all sources continued to consistently report data long after the initial intervention. Thus, while the cost estimates presented here are based on official sources, they sometimes involve a degree of uncertainty. In some cases, precise information on the timing of outlays and recoupments is unclear and assumptions are necessary in order to compute the inflation adjustments. Where there is uncertainty about the timing of payments, we present a range of possible inflation-adjusted outcomes. There are broader policy concerns raised by government assistance that are difficult to quantify and do not get captured in tallies of the government's income and expenses. Potential benefits of assistance can include avoiding potentially long-lasting disruptions to consumers, workers, local communities, and the overall economy; averting losses to federally guaranteed retirement funds; and maintaining federal tax revenues. Potential drawbacks to assistance include the possibility that it may reduce competition by rewarding incumbents over new entrants and distort the affected product market by causing (or prolonging) overproduction; that it may cause "moral hazard" if firms respond to government assistance by acting with less financial prudence in the future; and that it can delay an industry's adjustment to structural problems such as high production cost and excess capacity. In every case, federal assistance to certain industries may raise questions about the fairness of providing assistance to some businesses but not to others. Sources Information on the various assistance programs comes primarily from reports from the Government Accountability Office (GAO), Congressional Research Service (CRS), and executive branch agencies involved in the assistance. Specific sources are cited in the individual sections. Reporting on the programs has varied significantly over the years as different agencies have undertaken the assistance under different statutory authority. In some cases, Congress has included specific reporting requirements when assistance is authorized or other specific oversight mechanisms. Historical vote totals are included from http://www.congress.gov and from Congressional Quarterly, CQ Almanac (various years). Various iterations of some bills received multiple votes; for brevity, we only include the final vote taken. Stock prices and market information are from the Wall Street Journal print and online versions. Inflation adjustments are based on gross domestic product (GDP) price index data from the Bureau of Economic Analysis. Railroad Restructuring (1957-1987)7 What Happened to the Company/Industry Throughout the 1950s, the rail industry was in decline as federal spending on highways and the growth of the airline industry ate into railroads' ability to compete with those other modes of transportation. One large railroad, the New York, Ontario and Western, which had been in financial distress since the 1930s, was liquidated in 1957. Rail industry leaders advocated for one or more of the following in order to counter this trend: permission to shut down unprofitable routes, especially passenger routes; direct subsidies to continue operations; and/or encouragement of large-scale mergers to create economies of scale. Congress' initial legislative response, the Transportation Act of 1958 ( P.L. 85-625 ), created a loan guarantee program for railroads and gave the Interstate Commerce Commission (ICC) sole authority over proposals to curtail service, circumventing the previous role of state agencies. Still, the industry underwent a wave of mergers, consolidating from 110 Class I railroads in 1957 to 71 in 1970. The process culminated in the 1968 merger of arch-rivals Pennsylvania Railroad and New York Central Railroad into the Penn Central, the largest railroad in the world at the time. By this time, a wave of bankruptcies was well underway. The New York, New Haven and Hartford Railroad had gone into bankruptcy in 1961 and was merged into the Penn Central in 1969, its inclusion having been a condition of the Penn Central-New York Central merger's approval by the ICC. The Central Railroad of New Jersey failed in 1967. Then, in declining financial condition due to falling revenues, badly rundown infrastructure, high property taxes, incompatible systems, and high labor costs, the Penn Central itself declared bankruptcy in June 1970, less than three years after its creation. Other railroads operating in the Northeast and Midwest also went bankrupt and could not be reorganized, some having suffered severe damage caused by Hurricane Agnes in 1972. The other troubled carriers included the Ann Arbor Railroad, the Reading Railroad, the Lehigh Valley Railroad, the Boston and Maine Railroad, and the Erie Lackawanna Railroad, itself the result of a merger of former competitors completed in 1960. In addition to disrupting passenger and freight transportation, the railroad industry's distress exposed a number of major banks and financial institutions to large potential losses. The commercial paper market, in which firms issue short-term securities to meet near-term financial needs, experienced disruptions following the Penn Central bankruptcy, leading to concerns that the Penn Central's problems could endanger companies in other industries. Executive or Regulatory Agency Action and Assistance Several federal agencies, including the Department of Transportation, the Department of Defense, and the Federal Reserve, were unwilling or unable to assist troubled railroads with loan guarantees. The ICC sought to assist railroads by expediting approval of applications for mergers or abandonment of unprofitable lines, but this was not enough to forestall bankruptcies. Congressional Action and Assistance Congress enacted several measures throughout the 1970s to avert the collapse of the rail industry. These actions combined federal financial assistance, deregulation, and the creation of new quasi-governmental private companies. The Rail Passenger Service and Emergency Rail Services Acts of 1970 The Rail Passenger Service Act of 1970 (P.L. 91-518), which was passed by voice vote in both houses of Congress, relieved all railroad companies of the obligation to provide intercity passenger service, creating a quasi-governmental private company called the National Railroad Passenger CorporationâAmtrakâto operate passenger trains over freight railroads' tracks with federal support. The act called for a "basic system" of key routes that the railroads would continue to operate until Amtrak began operations on May 1, 1971, and provided for railroad companies to transfer unneeded passenger rail equipment to Amtrak. The Emergency Rail Services Act of 1970 (P.L. 91-663) provided up to $125 million in loan guarantees to railroads to preserve essential service until a more permanent restructuring plan could be put in place. The law was passed in the Senate on a vote of 47-29 and in the House on a vote of 165-121. The Regional Rail Reorganization Act of 1973 In March 1973, the bankruptcy court handling the Penn Central's case found that its finances were so precarious that it would likely need to cease all operations before October of that year. In December 1973, the Regional Rail Reorganization Act ( P.L. 93-236 ), also called the 3R Act, created the United States Railway Association (USRA) to provide additional emergency funding and prepare the restructuring and rehabilitation of Penn Central and other bankrupt railroads. The law passed the Senate on a vote of 45-16 and the House on a vote of 284-59. It provided for the creation of Conrailâofficially the Consolidated Rail Corporationâas a quasi-private for-profit corporation that would take over operations of various bankrupt railroads in the Northeast and Midwest. USRA was charged with creating a "Final System Plan" that identified the lines that would be transferred to Conrail. The Railroad Revitalization and Regulatory Reform Act of 1976 The Railroad Revitalization and Regulatory Reform (4R) Act of 1976 ( P.L. 94-210 ), which approved the USRA's "Final System Plan," was enacted on February 5, 1976. It passed the House on a vote of 353-62 and the Senate on a vote of 58-26. Conrail was incorporated five days later, beginning operations on April 1, 1976, at which point its predecessorsâincluding the Penn Centralâceased to exist as railroad companies. In addition to taking responsibility for those railroads' physical infrastructure and freight operations, Conrail operated commuter services in several states. The 4R Act provided funding for Conrail, permitted and approved additional property designations under 3R, and facilitated the transfer of ownership of the Penn Central's Northeast Corridor line to Amtrak. Direct federal subsidies to Conrail took several forms including remuneration of direct operating losses, approximately $2.1 billion; capital rehabilitation, approximately $1.2 billion; and "lifetime protection" payments to employees of Conrail and its predecessors, approximately $650 million. Much of this flowed through USRA purchases of Conrail equity instruments. In addition, approximately $3 billion was paid to the estates of bankrupt railroads for property taken to create Conrail. Total assistance for Conrail was estimated at approximately $7 billion. The 4R Act also contained reforms aimed at easing ICC regulation of the railroad industry more broadly. Railroads were given greater flexibility to set shipping rates and were allowed for the first time to sign contracts with large shippers specifying rates and terms of service. The act gave the ICC the power to exempt certain types of freight traffic from rate regulation altogether. The act also created the Railroad Rehabilitation and Improvement Financing (RRIF) loan program, currently codified at 45 U.S.C. Â§Â§821-838, to offer long-term, low-cost loans to railroad operators. The RRIF program was intended to assist "short line" railroads, which took over many small lines that were being abandoned by larger railroads, to finance improvements to infrastructure and investments in equipment. Restructuring the Milwaukee and Rock Island Railroads The restructuring of the eastern railroads did not put an end to the industry's difficulties. In the Midwest, the Chicago, Rock Island and Pacific Railroad filed for bankruptcy in 1975, and the Chicago, Milwaukee, St. Paul and Pacific Railroad in 1977. They were not incorporated into Conrail, but were the subject of separate federal legislation. Congress passed the Milwaukee Railroad Restructuring Act ( P.L. 96-101 ) in both the House and the Senate by voice vote in 1979 and the Rock Island Railroad Transition and Employee Assistance Act ( P.L. 96-254 ) in both the House and Senate by voice vote in 1980. Each law contained worker protection provisions and empowered bankruptcy courts to accelerate the sale or abandonment of parts of their networks as part of restructuring. The Chicago, Milwaukee, St. Paul and Pacific Railroad abandoned or sold roughly two-thirds of its network, with the rest ultimately acquired in 1985 by the Canadian Pacific Railroad through an American subsidiary. The case of the Chicago, Rock Island and Pacific Railroad was direr; by March 1980, before Congress had a chance to pass its transition assistance law, the railroad had been deemed incapable of continuing rail operations by the ICC, declared the property of a neutral party (pursuant to 3R), and ceased operations. Its former property was acquired by multiple buyers. The Staggers Rail Act of 1980 With Conrail's profitability still not much improved, Congress passed the Staggers Rail Act of 1980 ( P.L. 96-448 ), by a 61-8 vote in the Senate and a voice vote in the House. The law expanded upon the deregulation begun in the 3R and 4R Acts. Among other provisions, the Staggers Act prevented the ICC from setting maximum shipping rates, permitted railroads to keep their rate agreements with customers secret, broadened the ICC's power to declare exemptions, and required the submissions of proposals for the future of Conrail. While many of its provisions were unpopular with some shippers, particularly those who could not readily move their freight by truck or barge if they found rail rates excessive, the law helped restore the freight rail sector to profitability and eventually led to increased capital investment in the industry. The Northeast Rail Services Act of 1981 While the duty to provide intercity passenger rail had been transferred to Amtrak by the Rail Passenger Service Act of 1970, Conrail was still bound to operate the local commuter routes previously run by its predecessor railroads. The Northeast Rail Services Act of 1981 (NERSA; P.L. 97-35 ) was enacted as Subtitle E of the Omnibus Budget Reconciliation Act of 1981, approved by the Senate on a vote of 80-15 and by the House on a vote of 232-195. NERSA relieved Conrail of all obligations to provide commuter rail service beginning January 1, 1983, in order to improve its profitability. To ensure continuity of operations, however, NERSA required state- or locally-chartered commuter authorities to continue to operate all commuter rail lines previously operated by Conrail, and created a new subsidiary of Amtrak to take over such lines if any state declined to do so (none did). NERSA also stipulated that Conrail's status as a quasi-governmental corporation should be temporary and that the government's stake in the company should eventually be sold to one or more private buyers. Repayment or Recoupment of Assistance Following the reforms in the 3R and 4R Acts, the Staggers Act, and NERSA, Conrail reported a profit in 1981 and in subsequent years. The government's 85% stake in the company was sold through an initial public offering in 1987 after the government rebuffed attempts by other railroads to acquire it in ways that could have reduced rail competition in the Northeast. (The other 15% was owned by Conrail employees.) The government recouped a total of approximately $2 billion, including a $300 million dividend from Conrail and $1.65 billion from the public offering. This was approximately $5 billion less than total government outlays, when measured in nominal dollars, or $20 billion to $24 billion less than the government's outlays when adjusted for inflation ( Table 1 ). Final Outcomes Railroad profitability increased following implementation of the Staggers Act, and railroad companies, devoting themselves entirely to freight traffic, continued to consolidate and shed unprofitable lines. Some 70,000 miles of railroad have been abandoned since 1980, and the number of large railroadsâknown as Class I railroadsâoperating in the United States now stands at seven. Following its privatization, Conrail continued as an independent company until 1997, when it was acquired by Norfolk Southern Corporation and CSX Corporation in a joint stock purchase valued at approximately $10.3 billion. Norfolk Southern and CSX split most of the Conrail assets after the purchase. Amtrak has never generated an operating profit, and has received federal operating support every year since its creation. Farm Credit System Crisis (1980s)15 What Happened to the Industry The federal government has a long history of assisting farmers with real estate and operating loans. This intervention has been justified by the presence of asymmetric information between lenders and farmers, lack of competition and resources in rural areas, and policies to target assistance to disadvantaged groups. The two agricultural lenders with the greatest federal connection are the Farm Service Agency (FSA) and the Farm Credit System (FCS), a private cooperative. The first, FSA, is part of the U.S. Department of Agriculture (USDA) and receives federal appropriations to make direct loans and guarantees to farmers who do not qualify for commercial credit. The second, FCS, is privately funded without federal appropriation as a cooperatively owned entity with a statutory mandate to serve only agriculture-related borrowers. The FCS is regulated by the Farm Credit Administration, an independent agency funded by assessments on system institutions. A severe downturn in the agricultural economy beginning in the early 1980s contributed to a financial crisis among many agricultural lenders and their farmer borrowers (the result of low farm income, high interest rates, and declining land prices). Since the FCS had exposure to only a single industry, it held a loan portfolio that developed large delinquencies, much of which was eventually written off as uncollectible. The farm financial crisis caused the FCS to experience operating losses of $2.7 billion in 1985 and $1.9 billion in 1986, for example, which jeopardized its financial stability, including its ability to repay bondholders in private capital markets. While FCS debt is not a government obligation nor guaranteed, many investors perceive its government-sponsored enterprise (GSE) status to imply that the Treasury would not allow FCS default. Moreover, FCS was an important lender to agriculture and held one-third of farm debt at the time. Congressional Action and Assistance The Agricultural Credit Act of 1987 The Agricultural Credit Act of 1987 ( P.L. 100-233 ) was enacted on January 6, 1988, after being approved by the Senate by a vote of 85-2 and the House on a vote of 365-18. The law authorized a $4 billion financial assistance package. It created a new FCS entity, the FCS Financial Assistance Corporation, which utilized $1.26 billion in loans from the U.S. Treasury. The assistance stabilized the FCS by allowing it to repay its bonds and meet its debt obligations. The act required the FCS to work out a schedule for repaying the Treasury, mandated FCS organizational changes, protected FCS borrowers' stock investments in FCS institutions, and specified requirements for restructuring FCS problem farm loans. Among the notable organizational changes, FCS banks became jointly and severally liable for each other's debts (that is, the FCS banks together would be responsible for the cumulative debts of the individual FCS banks if any become insolvent). The act also created an FCS Insurance Corporation, similar to the Federal Deposit Insurance Corporation, to further ensure the ability of the FCS to repay its bonds. Although the primary purpose of the 1987 Act was to rescue and restructure the FCS, the act also led to the creation of a system of borrower rights for the FCS and the FSA. These borrower rights are somewhat unique to agriculture, compared to what was available to homeowners during the 2008 housing crisis. Before the FCS and FSA can initiate foreclosure proceedings, it must offer options to restructure delinquent farm loans when it would be less costly than taking foreclosure action, and it must offer rights of first refusal for an individual or extended family to repay a delinquent loan to avoid foreclosure and preserve a farm homestead. Repayment or Recoupment of Government Assistance The FCS Financial Assistance Corporation borrowed $1.26 billion from the U.S. Treasury during the farm financial crisis of the 1980s. The FCS made provisions in the early 1990s to systematically repay all of its financial assistance by collecting assessments on system banks and associations. The arrangement for the 15-year debt by the FCS Financial Assistance Corporation to the Treasury was that the government paid the interest for the first five years, FCS and the Treasury split the interest during the second five years, and FCS bore all of the interest during the final five years. In June 2005, the last of the bonds and interest was repaid on schedule to the U.S. Treasury. The FCS Financial Assistance Corporation was dissolved in December 2006. Final Outcome Farm Credit System financial performance steadily improved throughout the 1990s and into the present day. The Farm Credit System Insurance Corporation is fully funded to its capitalization goals. The borrowers' rights provisions continue to provide protection to farmers facing new financial difficulties, such as through the financial crisis in 2007-2009 and during the current period of lower farm income. Savings and Loan Crisis (1980s-1990s)20 What Happened to the Industry21 Savings and loan institutions (S&Ls) were state- or federally chartered deposit-taking institutions whose loans mainly took the form of residential mortgages. Some were mutual institutions owned by their depositors, while others had publicly traded shares. Federally chartered S&Ls were authorized in the 1930s to promote mortgage lending and were regulated by a separate regulator, the Federal Home Loan Bank Board (FHLBB), rather than by the agencies responsible for regulating commercial banks. The industry suffered a solvency crisis in the 1980s. When interest rates rose, S&Ls' floating-rate liabilities (e.g., deposits) had a higher interest cost than the industry was earning on fixed-rate assets that had been issued before rates rose (e.g., mortgages). In the presence of government deposit insurance, depositors had little incentive to withdraw their deposits from unprofitable S&Ls, since their deposits were safe even if their S&L failed. This allowed insolvent S&Ls to continue to access the funds needed to keep operating. According to a study by the Federal Deposit Insurance Corporation, "Net S&L income, which totaled $781 million in 1980, fell to negative $4.6 billion and $4.1 billion in 1981 and 1982â¦. In fact, tangible net worth for the entire S&L industry was virtually zero, having fallen from 5.3 percent of assets in 1980 to only 0.5 percent of assets in 1982." Regulatory Agency Action and Assistance Policymakers were slow to address the crisis because of concerns that resolving large numbers of S&Ls would have a negative effect on homeownership by disrupting mortgage lending. Government policy is generally viewed as exacerbating the crisis in two ways. First, the S&L regulator, the FHLBB, practiced "regulatory forbearance," allowing insolvent firms to keep operating in the hopes that they would eventually become profitable again. Forbearance made the problem larger because it arguably encouraged such "zombie S&Ls" to take on more risks, undermining more conservatively run competitors. Regulatory forbearance was motivated in part by the fact that the Federal Savings and Loan Insurance Corporation (FSLIC), the agency responsible for insuring S&L customers' deposits, lacked the funds to honor deposit insurance claims if all the undercapitalized S&Ls were rescued or closed down. Almost 1,000 thrifts still in operation, holding half of total industry assets, were insolvent or nearly insolvent by 1986. By 1987, the FSLIC itself was insolvent. In the meantime, zombie S&Ls incurred additional losses, which increased the ultimate cost to the government. Second, deregulation in the early 1980s gave the industry new opportunities to take risks that increased ultimate losses, which arguably occurred because deregulation took place in the context of an already undercapitalized industry with inadequate prudential regulation. Congressional Action and Assistance Deposit insurance is self-financing only if insurance premiums match expected losses. Because the FSLIC deposit insurance scheme was inadequate, a government "bailout" could only have been avoided if the government had reneged on its promise to guarantee deposits. The congressional response to the S&L crisis can be divided into two phases. From 1980 to 1982, legislation was enacted to attempt to restore industry solvency (or buy time to restore industry solvency) through forbearance and the removal of legal restrictions on industry activities. From 1987 on, legislation was enacted to attempt to resolve insolvent S&Ls by granting financial resources and to prevent future losses through new regulatory powers. Many of these bills contained wide-ranging provisions, and only the provisions relevant to the S&L crisis are highlighted here. Competitive Equality Banking Act of 1987 (CEBA) The Competitive Equality Banking Act of 1987 ( P.L. 100-86 ) was passed in the Senate on a vote of 96-2 and in House on a vote of 382-12. The law created the Financing Corporation (FICO) to provide funding to FSLIC by issuing $10.8 billion in long-term bonds to be repaid by assessments on savings and loans and the Federal Home Loan Banks. It also eased regulatory requirements for savings and loans in economically depressed areas. According to the FDIC study, "Although the Competitive Equality Banking Act of 1987 provided the FSLIC with resources to resolve insolvent institutions, the amount was clearly inadequate. Nevertheless, under the new FHLBB chairman, Danny Wall, the FSLIC resolved 222 S&Ls, with assets of $116 billion, in 1988.... But despite these resolutions, at year-end 1988 there were still 250 S&Ls, with $80.8 billion in assets that were insolvent based on regulatory accounting principles." Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ( P.L. 101-73 ) was passed by the House on a vote of 201-175 and by the Senate by division vote (individual votes not recorded). The law abolished FSLIC and transferred its assets, liabilities, and operations to the FSLIC Resolution Fund (FRF). The act abolished FHLBB and transferred its authority to the newly created Office of Thrift Supervision with new regulatory powers, created the Savings Association Insurance Fund, administered by FDIC, created the Resolution Trust Corporation (RTC) to resolve troubled thrifts, and created the Resolution Funding Corporation (REFCORP) to issue debt to finance RTC to be repaid by industry assessments and the federal government. Resolution Trust Corporation Funding Act of 1991 The Resolution Trust Corporation Funding Act of 1991 ( P.L. 102-18 ) , passed by the House on a vote of 225-188 and passed by the Senate by voice vote, provided $30 billion to the RTC to cover losses of failed thrifts in FY1991. Resolution Trust Corporation Refinancing, Restructuring, and Improvement Act of 1991 The Resolution Trust Corporation Refinancing, Restructuring, and Improvement Act of 1991 ( P.L. 102-233 ), passed by the Senate on a vote of 44-33 and passed in the House by division vote 112-63, provided the RTC up to $25 billion until April 1, 1992, to resolve failed savings and loan institutions. The law also restructured the RTC and terminated FICO. Resolution Trust Corporation Completion Act of 1993 The Resolution Trust Corporation Completion Act of 1993 ( P.L. 103-204 ) passed the House on vote of 235-191 (with 1 Member voting present), and passed the Senate on a vote of 54-45. The law provided $18.3 billion to finish the savings and loan cleanup. It terminated the RTC on December 31, 1995, and authorized $8.5 billion for the Saving Association Insurance Fund (SAIF), to be spent only if the savings and loan industry could not pay for future failures itself through higher insurance premiums. Repayment or Recoupment of Government Assistance The cost of the S&L cleanup was spread among the federal government (through appropriations), government-sponsored enterprises (the Federal Home Loan Bank system), and the industry (through deposit insurance premiums). Two quasi-governmental entities (FICO and REFCORP) were created to provide financing. Measuring the cost of the S&L crisis poses unique challenges compared to the other episodes discussed in this report. The resolution of failing thrifts was not a one-time event. Thrifts may fail at any time, even when economic conditions are generally good, and the insurance fund may be called upon to repay depositors. What was unique during the crisis was the magnitude of the failures, which caused premiums to be inadequate for addressing the problem. Thus, a somewhat arbitrary date must be chosen for the beginning and the end of the cleanup. Different sources vary slightly on the overall net cost. In January 1995, CBO estimated the cost at $150 billion in 1990 dollars. In 1996, GAO estimated the cost at $160.1 billion. Table 2 presents an estimate from the FDIC Banking Review , as this source provides the most detailed information. It estimated expenses paid by the FRF and RTC to be $152.7 billion, with an additional $7.3 billion in indirect costs from 1986 to 1995. Of the $152.7 billion, direct appropriations covered $99.4 billion and FICO and REFCORP bond proceeds covered $38.3 billion. The government recouped $30.1 billion through industry assessments, interest on bonds paid by the industry, and the value of remaining assets seized from failed S&Ls as of the end of 1999, putting the net direct costs at $122.6 billion and the net total costs at $129.9 billion. (CRS classified the FHLBs as industry for purposes of this table, so their contributions are considered a recoupment rather than a government expense.) It should be noted that this source does not include interest costs on the federal debt used to finance appropriations or the FICO and REFCORP bonds issued to finance the cleanup. Final Outcome Cumulatively, 1,043 insolvent firms holding $519 billion in assets were resolved between 1986 and 1995. The industry's finances stabilized by the mid-1990s, by which time the number of S&Ls had fallen by half compared to 1986. The RTC ceased operations at the end of 1995. Some special bonds issued to finance the cleanup remain outstanding until 2030. S&Ls were renamed savings associations or thrifts and their regulation was reformed by FIRREA. Further problems with the regulation of the thrift industry in the 2007-2009 financial crisis led to the elimination of the Office of Thrift Supervision and the shifting of its powers to the federal banking regulators by the Dodd-Frank Wall Street Reform and Consumer Protection Act ( P.L. 111-203 ). Airline Industry (2001-2014)34 What Happened to the Company/Industry The use of commercial airplanes as assault vehicles to wreak havoc on the United States has no precedent in aviation history. At the time of the September 11, 2001, terrorist attacks on the World Trade Center in New York and the Pentagon in Washington, the airline industry was already experiencing a difficult financial situation due to the recession. In the wake of the attacks, the federal government temporarily grounded all civil air traffic in the United States, including all commercial flights. The attacks contributed to a significant decline in both domestic and international passenger traffic in 2001 that resulted in major financial losses. Congressional Action and Assistance The Air Transportation Safety and System Stabilization Act In the aftermath of the 9/11 attacks, Congress moved to provide the airline industry with federal financial support. The Air Transportation Safety and System Stabilization Act (Stabilization Act; P.L. 107-42 ) passed in the House by a vote of 356-54, with two Members voting present, and in the Senate by a unanimous vote. It was signed into law on September 22, 2001, providing the airlines access to up to $15 billion in short-term assistance. This included $5 billion in emergency assistance to compensate the air carriers for losses incurred as a result of the attacks, and $10 billion in the form of guaranteed loans designed to provide longer-term stability to the industry and make it more creditworthy in private markets. The Stabilization Act also supported the airline industry by providing premium war risk insurance for 180 days. This insurance was extended multiple times until it expired in 2014. Executive or Regulatory Agency Action and Assistance The Secretary of Transportation and the Comptroller General were in charge of the $5 billion direct compensation to air carriers, while the distribution of the loan guarantees was controlled by an "air transportation stabilization board" (ATSB) consisting of three voting membersâthe Chairman of the Federal Reserve Board, the Secretary of the Treasury, and the Secretary of Transportation, or their designeesâand a non-voting member, the Comptroller General. According to the April 2011 report of the President to the U.S. Congress, as required by the Stabilization Act, 407 air carriers were compensated for direct operating losses as the result of federal ground stop orders as well as any incremental losses incurred between September 11, 2001, and December 31, 2001. Payments totaled nearly $4.6 billion of the $5 billion initially made available. Portions of the remaining balance in the account were rescinded by Congress at various points, with all unobligated balances permanently rescinded by the Omnibus Appropriations Act, 2009 ( P.L. 111-8 , Title I). The ATSB was established to review and decide on airlines' applications for loan guarantee assistance. The ATSB received 16 loan guarantee applications from a range of air carriers, including large airlines, small airlines, low-fare airlines, and charter and cargo carriers. It approved and closed on six loan guarantee applications: American West, ATA Airlines (formerly American Trans Air), Aloha Airlines, Frontier Airlines, US Airways, and World Airways. The total amount of loan guarantees was $1,558,600,000. Repayment or Recoupment of Assistance Five of the six guaranteed loans were fully repaid by the carriers, while the ATA Airlines loan guarantee had to be exercised when ATA Airlines filed for bankruptcy under Chapter 11. In 2005, the ATSB paid approximately $125 million, the outstanding balance on the ATA loan which the ATSB had guaranteed, but eventually recouped $97.2 million of that amount. The ATSB also established that the government was to be compensated for the risks associated with the guarantees through fees and stock warrants. The six airlines paid more than $240 million in fees and interest; while proceeds of warrant sales totaled $142.6 million. Overall, after deducting ATSB expenses, the 2011 report of the President to the U.S. Congress concluded that the government recovered a net of $338.8 million from the carriers as a result of the ATSB loan guarantee activities (see Table 3 ). According to the Federal Aviation Administration's estimate, between September 2001 and December 2014, $1.8 billion in premiums were collected and the total amount of claims paid for three war risk occurrences was $10,107,874. The remaining balance in the Aviation Insurance Revolving Fund is used to back more than $20 billion of the non-premium aviation insurance program that provides critical support to national security and defense by making insurance available to air carriers contracted by the Department of Defense to support military operations. Final Outcome The uncommitted balance of the ATSB loan guarantee authority was $8,441,400,000 on June 28, 2002, the deadline for submitting applications. The Consolidated Appropriations Act of 2008 ( P.L. 110-161 , Division D, Title I) rescinded the unobligated balance of program funds. The War Risk Insurance program expansion expired in 2014. If direct assistance is excluded, the government recouped more than was paid out on both the loan guarantees and the war risk insurance program. Nevertheless, it was exposed to significant financial risks from both programs. Troubled Asset Relief Program (TARP) BankÂ Support (2008-Present)38 What Happened to the Industry The financial crisis of 2007-2009 grew out of an unprecedented housing boom that turned into a housing bust. Much of the lending for housing during the boom was based on asset-backed securities that used the repayment of housing loans as the basis of these securities. As housing prices fell and mortgage defaults increased, these securities became illiquid and fell sharply in value. This caused capital losses for firms holding them, which threated many firms with insolvency. There was widespread lack of trust in financial markets as participants were unsure which firms might be holding so-called toxic assets that might now be worth much less than previously estimated, thus making these firms unreliable counterparties in financial transactions. This uncertainty prevented firms from accessing credit markets to meet their liquidity needs. The banking industry was at the center of the crisis, both as holders of mortgage backed securities and as lenders making mortgage loans. Executive or Regulatory Agency Action and Assistance The Federal Reserve was created in 1913 largely to act as a lender of last resort in liquidity crises, and its authority was augmented during the Great Depression. As the crisis developed in 2007 and 2008, the Federal Reserve took a variety of steps under its statutory authority to inject liquidity into the financial system. To the degree that the crisis caused solvency problems in financial firms, however, the Federal Reserve was unable to assist, as its authority is limited to lending funds, which offered little assistance to firms that were already highly leveraged and suffering from capital shortfalls. Congressional Action and Assistance Emergency Economic Stabilization Act of 2008 The Emergency Economic Stabilization Act of 2008 (EESA), was brought to the floor of the House as a substitute amendment to H.R. 3997 on September 29, 2008 ; this amendment failed in the House by a vote of 205-228. Another version of EESA, which included the original EESA plus several other provisions not in the first bill, was offered on October 1 in the Senate as an amendment ( S.Amdt. 5685 ) to an unrelated bill, H.R. 1424 , which had previously passed the House. The amendment to H.R. 1424 was approved by a Senate vote of 74-25; it was then taken up by the House and passed by a vote of 263-171, on October 3, 2008. The President signed the amended version of H.R. 1424 , now P.L. 110-343 , the same day as House passage. EESA gave the Department of the Treasury broad authority under the newly created Troubled Asset Relief Program to use up to $700 billion to address the crises. The congressional debate was focused on purchasing the "toxic" assets from firms, thus replacing them with safer assets, but the statute also allowed the Treasury to guarantee assets or to directly augment firms' capital. Among the programs under the EESA authority, the Treasury created the Capital Purchase Program (CPP) to purchase up to $250 billion in preferred shares from banks, thus adding this amount to capital levels. More than 700 banks participated in the CPP and approximately $205 billion was actually disbursed. In addition, there was a relatively small ($570 million) Community Development Financial Institution program that also purchased preferred shares, but on less stringent terms than the CPP. The CPP was augmented with an additional Targeted Investment Program (TIP) preferred share purchases and asset guarantees for two of the most troubled banks, Bank of America and Citigroup. The share purchases were $20 billion to each bank. The asset guarantees were more complicated. Any losses were to be shared between the Treasury, FDIC, and Federal Reserve. The guarantee for Bank of America on $118 billion in assets was offered, but never officially closed. The Citibank guarantee was on $301 billion in assets, but funds were never paid out on any losses. EESA was amended in early 2009, specifically allowing earlier repayment of assistance than originally foreseen and adding additional executive compensation requirements on firms with outstanding assistance. P.L. 111-5 passed the House on a vote of 246-183 and the Senate on a vote of 60-38. Repayment or Recoupment of Assistance In most cases, the Treasury recouped money from sales of preferred shares, primarily back to the issuing banks, as dividends and from warrants that were issued along with the preferred shares and fees paid for the asset guarantees. The Citigroup preferred shares were converted into common equity and sold on the open market. Recoupment from the general TARP bank assistance was completed relatively quickly. For example, by the end of 2011, approximately $255.4 billion had been recouped in total with $17.35 billion of $245.5 billion still outstanding. By 2020, $271.4 billion had been recouped, with $0.04 billion of preferred shares still outstanding. The special assistance for Bank of America was completed by the end of 2009, with a $425 million termination fee paid for the uncompleted asset guarantee and repurchase of the $20 billion in TIP shares resulting in $22.7 billion in recoupment. Citigroup's special assistance finished in December 2009 with $21.8 billion in recoupment from the TIP shares and $3.9 billion in premiums paid for the asset guarantees. Despite the default risk that TARP was exposed to, the government recouped $30.5 billion more than it disbursed on the bank programs (see Table 4 ). Final Outcome The financial crisis passed relatively quickly for the banking industry once the panic conditions of fall 2008 passed. One marker of this is that originally banks were to be required to hold the CPP capital on their books for a minimum of three years, whereas banks began repurchasing CPP preferred shares by March 2009 when the program was still disbursing funds. The overall profitability levels in the banking system returned relatively quickly. Auto Industry (2008-2014)40 What Happened to the Industry In 2008 and 2009, the financial crisis, rising gasoline prices, and a contracting global economy combined to create the worst market in decades for production and sale of motor vehicles in the United States and other industrial countries. While Ford Motor Company had negotiated an $18 billion line of credit in 2007, General Motors (GM) and Chrysler did not have similar long-term financing available when the financial crisis hit, which temporarily made it difficult for most firms to access borrowing markets. In 2009, GM's production dropped by 47% (compared to 2008), and Chrysler's by 57%; total U.S. production among all automakers fell by 34%. The prospect of GM and Chrysler bankruptcies raised other concerns: the failure of their parts suppliersâalso used by most other automakersâcould cascade financial difficulties throughout the sector; and those supplier failures could overwhelm the federal Pension Benefit Guaranty Corporation with abandoned pension plans. In addition, large affiliated financial companies (which provided auto loans to consumers and dealers) could fail if the automakers entered bankruptcy. Congressional Action and Assistance Congress never passed specific legislation to address auto industry issues. The George W. Bush Administration and congressional leaders differed on the type of assistance that should be offered the automakers: initially, the Administration recommended reprogramming a Department of Energy motor vehicle loan program to provide bridge loans. In December 2008, the House of Representatives passed H.R. 7321 , which would have authorized funds from the DOE Advanced Technology Vehicles Manufacturing program (ATVM) as bridge loans to GM and Chrysler. Although that bill passed the House 237-170, the Senate did not vote on it. When this legislation stalled, the George W. Bush Administration announced that it would use the Troubled Asset Relief Program to support the automakers, arguing that failure to provide assistance could make the recession worse and impose other federal costs, such as unemployment insurance for many displaced auto and auto parts employees. Executive or Regulatory Agency Action and Assistance The Bush Administration made initial TARP loans of $24.8 billion to GM, Chrysler, and two auto financing companies (GMAC and Chrysler Financial) in December 2008 and January 2009. When the Obama Administration took office in January 2009, it continued this loan program, bringing total loans to the auto industry to $79.7 billion. In addition, the Obama Administration established an Auto Task Force chaired by the Secretary of the Treasury to work with GM and Chrysler on restructuring plans with creditors, unions, dealers, and other stakeholders. The goal of the spring 2009 restructurings was to avoid bankruptcy filings, but all stakeholders did not agree to the major changes in the companies. Chrysler and GM filed for bankruptcy in April and June 2009, respectively. After about a month, both companies emerged from bankruptcy court, with new owners: the U.S. Treasury owned about 10% of Chrysler and nearly 61% of GM in return for forfeiting repayment of the previous loans. Other owners included the Canadian government, bondholders, and the United Auto Workers. The federal ownership was sold off over the following years. Repayment or Recoupment of Assistance The assistance was repaid or recouped beginning in 2009 in a variety of ways, including initial public offerings, gradual public offerings of other federal shares, and private sales of stock. Table 5 summarizes the amounts of government assistance and the amount of recoupment for auto industry assistance. Final Outcome The U.S. Treasury sold its last holdings of Chrysler in June 2011 and GM in December 2013. The proceeds from the sales were not enough to cover the original loans to Chrysler and GM. Chrysler Financial fully repaid its loan, and the federal government's recoupment from GMAC was greater than the amount of its assistance. After restructuring and bankruptcy, GM and Chrysler recovered their positions as major U.S. automakers; GM is independent and Chrysler is part of Fiat Chrysler Automobiles (FCA), a corporation based in Great Britain. Table 6 shows comparisons before and after restructuring and bankruptcy. Money Market Mutual Fund Guarantee (2008-2009)44 What Happened to the Industry Money market mutual funds are a type of mutual fund that generally invest in high-quality, short-term assets. Often the value of a share is held at $1 per share and fund gains are paid out as dividends mimicking interest payment. Thus, they are seen as largely analogous to bank deposits, but are not guaranteed by the Federal Deposit Insurance Corporation (FDIC). As part of the market turmoil resulting from the bursting of a nationwide housing bubble, on September 16, 2008, a money market mutual fund called the Reserve Fund "broke the buck," meaning that the value of its shares had fallen below $1. This occurred because of losses it had taken on short-term debt issued by the investment bank Lehman Brothers, which filed for bankruptcy on September 15, 2008. Money market investors had perceived "breaking the buck" to be highly unlikely, and its occurrence set off a generalized run on money market mutual funds, as investors simultaneously attempted to withdraw an estimated $250 billion of their investmentsâeven from funds without exposure to Lehman Brothers. Executive or Regulatory Agency Action and Assistance To stop the run, the Treasury announced an optional program to guarantee deposits in participating money market funds. The Treasury would finance any losses from this guarantee with assets in the Exchange Stabilization Fund (ESF), funds intended to protect the value of the dollar. The Treasury announced this program without seeking specific congressional authorization, justifying the program on the grounds that guaranteeing money market funds would protect the value of the dollar. The program expired after one year in September 2009. Congressional Action and Assistance The Emergency Economic Stabilization Act of 2008 included language (Section 131) that directed the Treasury Secretary to reimburse the Exchange Stabilization Fund for any funds used for the money market guarantee program and prohibited usage of the ESF in the future for such a program. Repayment or Recoupment of Assistance Funds utilizing the guarantee program paid fees for the guarantee of between 0.015% and 0.022% of the amount guaranteed by the program. Final Outcome Over the life of the program, the Treasury reported that no money market mutual fund guarantees were invoked and $1.2 billion in fees had been collected (see Table 7 ). More than $3 trillion of deposits were guaranteed and, according to the Bank for International Settlements, 98% of U.S. money market mutual funds were covered by the guarantee, with most exceptions being funds that invested only in Treasury securities. Agricultural Trade Aid (2018-2019)49 What Happened to the Sector In early 2018, the Trump Administrationâciting concerns over national security and unfair trade practicesâimposed increased tariffs on steel and aluminum from a number of countries and on a broad range of U.S. imports from China. Several of the affected foreign trading partnersâincluding China, Canada, Mexico, the European Union, and Turkeyâresponded to the U.S. tariffs with their own retaliatory tariffs targeting various U.S. products, especially agricultural commodities. As a result of these retaliatory tariffs, both market prices and exports of affected U.S. agricultural products dropped sharply in the immediate aftermath of retaliation before gradually recovering as trade shifted to alternate markets. The most notable result of this trade dispute was a decline in trade between the United States and China. From 2010 through 2016, China was the top destination for U.S. agricultural exports based on value. In 2018, U.S. agricultural exports to China declined 53% in value to $9 billion from $19 billion in calendar year 2017. The retaliatory tariffs affected producers of several major U.S. commodities, including field crops like soybeans and sorghum, livestock products like milk and pork, and many fruits, nuts, and other specialty crops. Following the imposition of retaliatory tariffs in 2018, the United States began negotiations with several of the retaliating trade partners to resolve the disputes. However, several of the negotiations were protractedâparticularly the U.S.-China trade talksâand trade failed to return to normal patterns during 2018 and 2019. Executive or Regulatory Agency Action and Assistance The Secretary of Agriculture used his authority under Section 5 of the Commodity Credit Corporation (CCC) Charter Act of 1948 (P.L. 80-806; 15 U.S.C. 714 et seq.), as amended, to initiate two ad hoc trade assistance programs in 2018 and 2019. Referred to as "trade-aid packages," these two initiatives represented the Administration's effort to provide short-term assistance to farmers in response to the foreign trade retaliation targeting U.S. agricultural products. The first trade-aid package was announced on July 24, 2018. It targeted production for nine agricultural commodities in 2018 and was valued at up to $12 billion. The second trade-aid package was announced on May 23, 2019. It targeted production for an expanded list of 41 commodities and was valued at up to an additional $16 billion. According to the U.S. Department of Agriculture (USDA), the two trade-aid packages are structured in a similar manner and include three principal components ( Table 8 ): The Market Facilitation Program (MFP) provides direct payments to producers of USDA-specified "trade damaged" commodities. USDA used different payment rate formulas to determine the MFP payment distribution for each of the 2018 and 2019 programs (described below). MFP payments are administered by USDA's Farm Service Agency (FSA). The Food Purchase and Distribution Program (FPDP) is for purchases of unexpected surpluses of affected commodities such as fruits, nuts, rice, legumes, beef, pork, milk, and other specified products for redistribution by USDA's Food and Nutrition Service through federal nutrition assistance programs including food banks, schools, and other outlets serving low-income individuals. It is administered by USDA's Agricultural Marketing Service. The Agricultural Trade Promotion (ATP) program provides cost-share assistance to eligible U.S. organizations for activitiesâsuch as consumer advertising, public relations, point-of-sale demonstrations, participation in trade fairs and exhibits, market research, and technical assistanceâto boost exports for U.S. agriculture, including food, fish, and forestry products. It is administered by USDA's Foreign Agriculture Service in conjunction with the private sector. The two years of trade assistance, as announced by the Secretary of Agriculture, were valued at a potential combined $28 billion, the largest component being the MFP direct payments to producers valued at a combined $24.5 billion ( Table 8 ). The broad discretionary authority granted to the Secretary under the CCC Charter Act to implement the trade-aid package also allowed the Secretary to determine how the aid was calculated and distributed. Some important differences between the 2018 and 2019 trade aid packages include the following: Although the 2018 and 2019 MFP programs focused payments on the same three commodity groupsânon-specialty crops (grains and oilseeds), specialty crops (nuts and fruit), and animal products (hogs and dairy)âthe 2019 MFP included an expanded list of eligible commodities (41 eligible commodities in 2019 compared with nine in 2018). The 2018 MFP payments for eligible specialty and non-specialty crops were based on physical production in 2018, and calculated as per-unit payment rates. The 2019 MFP program based its payment rates for specialty crops on harvested acres, and non-specialty crops on planted acres. This change was done to avoid having MFP payments reduced by the lower yields that were expected to occur across major growing regions due to the widespread wet spring and delayed plantings. Then a weighted-average MFP payment-rate-per-acre was calculated at the county level. This was done to minimize influencing producer crop choices and avoid large payment-rate discrepancies across commodities grown within the same county. The end result was a single 2019 MFP payment rate for each county with eligible commodities. Under both 2018 and 2019 MFP programs, payments to dairy producers were based on historical production, while those to hog producers used mid-year inventory data. Payments were made in three tranches under both the 2018 and 2019 MFP programs; cumulative program receipts were subject to annual payment limits and adjusted gross income (AGI) eligibility requirements. The 2018 MFP payments were capped on a per-person or per-legal-entity basis at a combined $125,000 for eligible non-specialty crops, a combined $125,000 for animal products, and, separately, a combined $125,000 for specialty crops. In contrast, the 2019 package used expanded payment limits per individual per commodity group ($250,000) and an expanded maximum combined payment limit across commodity groups ($500,000 versus $375,000 in 2018). Both 2018 and 2019 MFP payment recipients were subject to an AGI eligibility threshold of $900,000, but with an exemption from the AGI criteria if at least 75% of a farm's AGI was from farming operations. There is a general consensus among farm policy analysts that the MFP payments provided a substantial income boost to the U.S. agricultural sector in the aggregate during what otherwise would have been a period of low commodity prices and low net farm income. However, an examination of MFP payments data reveals that they were unevenly distributed across both commodities and regions. Congressional Action and Assistance No congressional action was involved in the establishment, funding, or implementation of the 2018 and 2019 MFP programs. The ranking member of the Senate Committee on Agriculture, Nutrition, and Forestry, Debbie Stabenow of Michigan, has raised concerns about the methodology used to determine payment rates and the resultant distribution of payments across both commodities and regions. In January 2020, Senator Stabenow requested a comprehensive investigation by GAO into the integrity of USDA's trade aid to farmers affected by the Trump Administration's trade policies. Repayment or Recoupment of Assistance There is no provision for repayment or recoupment of any of the funds disbursed under the 2018 and 2019 trade-aid packages. President Trump has claimed that the tariffs imposed on products imported into the United States increased U.S. government revenue, and that these amounts, mainly paid by Chinese exporters, were used to offset the cost of the trade-aid packages. However, economic studies have generally found that the cost of tariffs on imported goods is borne largely by U.S. firms and consumers, not by foreign trading partners. Final Outcome USDA's use of CCC authority to initiate and fund agricultural support programs without congressional involvement is not without precedent, but the scope and scale of its use for the two trade-aid packagesâat a potential cost of up to $28 billionâhave increased congressional and public interest. On February 11, 2020, USDA Inspector General Phyllis Fong told the House Agriculture Appropriations Subcommittee that her office would be undertaking an investigation of the Administration's trade assistance programs, starting with whether USDA had the proper legal authority to make direct payments to farmers. It is also possible that other countries may challenge MFP payments as a violation of U.S. trade commitments to the World Trade Organization.	Summary:	gov_report	1,024	null	40
crs_R41510	crs_R41510_0	You are given a report by a government agency. Write a one-page summary of the report. Report: T he House pay-as-you-go (PAYGO) rule is generally intended to discourage or prevent Congress from taking certain legislative action that would increase the deficit. It prohibits the consideration of direct spending and revenue legislation that is projected to increase the deficit over either a 6-year or an 11-year period. In effect, the rule requires legislation that includes provisions projected to increase direct spending or reduce revenues to also include offsetting provisions over the two specified periods. The House PAYGO rule was first established at the beginning of the 110 th Congress and modified in the 111 th Congress. It was replaced by the cut-as-you-go (CUTGO) rule, which applied only to direct spending legislation, at the beginning of the 112 th Congress. The PAYGO rule was reinstated, with modifications, replacing the CUTGO rule, at the beginning of the 116 th Congress. This report explains the House PAYGO rule's features, describes its legislative history, and discusses how it compares to statutory PAYGO requirements. It updates the previous version (dated November 30, 2010), largely with information about the CUTGO rule and the PAYGO rule, as adopted in the 116 th Congress. The full text of the House PAYGO rule is provided in the Appendix . Features of the House PAYGO Rule The House PAYGO rule adopted for the 116 th Congress prohibits the consideration of legislation affecting direct spending and revenues that is projected to increase the deficit, or reduce the surplus, over either of two time periods: (1) the 6-year period consisting of the current fiscal year, the budget year, and the 4 ensuing fiscal years; or (2) the 11-year period consisting of the current year, the budget year, and the ensuing 9 fiscal years. The House PAYGO rule applies to legislation affecting direct spending and revenues . Direct spending, also referred to as mandatory spending, has two distinguishing features: (1) it is provided or controlled in authorizing legislation; and (2) it generally continues without any annual legislative action. Examples of programs funded through direct spending include Medicare, unemployment compensation, and federal retirement. Direct spending is within the jurisdiction of the respective authorizing committees. Revenues are the funds collected from the public primarily as a result of the federal government's exercise of its sovereign taxing power. They consist of receipts from individual income taxes, payroll taxes, corporate income taxes, excise taxes, duties, gifts, and miscellaneous receipts. Revenues are within the jurisdiction of the Committee on Ways and Means in the House. The House PAYGO rule does not apply to discretionary spending , which is provided and controlled through the annual appropriations process. Discretionary spending is not counted for purposes of determining whether legislation increases the deficit under the House PAYGO rule. The rule generally requires that each measure affecting direct spending and revenues not increase the deficit over either of the two time periods specified. That is, to comply with the rule, each measure that includes provisions projected to increase direct spending or reduce revenues must also include offsetting provisions projected to reduce direct spending, increase revenues, or both, by equivalent amounts. A projected deficit reduction resulting from a measure previously passed by the House, or one to be considered subsequently by the House, cannot be used to offset a deficit increase due to provisions in a measure currently under consideration. The rule provides one exception to this measure-by-measure application. Under clause 10(b) of House Rule XXI, savings from a previously passed measure may be included in determining a separate measure's PAYGO compliance if a special rule provides that the two measures are to be combined upon engrossment. The rule specifies that a determination of the effect of direct spending and revenue legislation on the deficit or surplus is to be based on estimates made by the Committee on the Budget relative to the Congressional Budget Office (CBO) baseline estimates. In producing its baseline estimates, CBO projects revenues, spending, and deficit or surplus levels under existing law (i.e., assuming no legislative changes). Under the rule, such baseline estimates are to be consistent with Section 257 of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended. The House PAYGO rule does not apply to direct spending increases or revenue reductions that occur under existing law. That is, if direct spending increases because more individuals qualify for benefits under existing law, for example, any increase in the deficit is not counted for PAYGO purposes and is beyond the rule's control. The House PAYGO rule exempts provisions designated as an emergency from being counted in determining compliance with the rule. Under clause 10(c) of House Rule XXI, a determination as to whether legislation increases the deficit, or reduces the surplus, shall exclude any provision "expressly designated as an emergency for the purposes of pay-as-you-go principles." If legislation contains such a designation, the chair must put the question of consideration to the full House prior to its consideration. That is, the House must vote on whether or not to consider the legislation, even though all or certain budgetary effects would be exempt from the House PAYGO rule. If the question is decided in the affirmative (by simple majority), the legislation may then be considered. Alternatively, if the question is decided in the negative, the legislation may not be considered. The House PAYGO rule is enforced by a point of order to prevent the consideration of legislation that does not meet the requirement. If legislation brought up on the House floor violates the rule (i.e., increases the deficit, or reduces the surplus, in either of the two fiscal-year periods), a Member may raise a point of order against it. If the point of order is sustained, the legislation may not be considered (in the case of an amendment, the amendment falls). The House rule, however, is not self-enforcing: a Member must raise the point of order to enforce it. In addition, the House rule may be waived by a special rule reported by the House Rules Committee and agreed to by the House by majority vote, by considering the legislation under the suspension of the rules procedures, or by unanimous consent. Finally, the House PAYGO rule, as part of the standing rules of the House, is effective for the current Congress for which it is adopted. Legislative History of the House PAYGO Rule The House PAYGO rule was first established at the beginning of the 110 th Congress. It was modified at the beginning of the 111 th Congress, as part of the opening-day rules package, and again in the second session of the 111 th Congress, as part of a special rule providing for the consideration of an unrelated measure. In addition, its application to certain legislation was modified during the first session of the 111 th Congress, as part of the FY2010 budget resolution ( S.Con.Res. 13 ). At the beginning of the 112 th Congress, it was replaced with the CUTGO rule, which focused exclusively on the mandatory spending effects of legislation, eliminating any revenue effects from the budgetary evaluation under the rule. Most recently, at the beginning of the 116 th Congress, the PAYGO rule was reinstituted, covering both mandatory spending and revenues, with certain modifications. Actions in the 110th Congress Even before the 110 th Congress began, the new Democratic leadership in both chambers indicated an intention to "restore" PAYGO rules. Accordingly, the House adopted its own PAYGO rule as part of its opening-day rules package. The original House PAYGO rule generally prohibited the consideration of legislation affecting direct spending and revenues that was projected to increase the deficit or reduce the surplus over a 6-year and an 11-year period. In this original form, as it does in its current form, the rule counted on-budget and off-budget entities (such as Social Security) in determining the effect on the deficit (referred to as the unified budget deficit ). The rule also directed the Budget Committee to use the following particular baseline estimates when determining the effect of legislation on the deficit: after the beginning of a new calendar year but before the consideration of a budget resolution, the Budget Committee was to use the most recent baseline estimates supplied by CBO; and after the consideration of the budget resolution, the Budget Committee was to use the most recent baseline estimates supplied by CBO used in considering the budget resolution. Lastly, the original rule provided no explicit exemptions, such as adopted in the 116 th Congress. Actions in the 111th Congress At the beginning of the 111 th Congress, following the customary practice, the House adopted its rules by adopting the preceding Congress's rules, including the House PAYGO rule, with certain amendments. Three changes were made to the PAYGO rule. First, the rule was modified to require the Budget Committee to use baseline estimates supplied by CBO, replacing the particular baseline estimates specified in the original rule. Second, a provision was added to the rule to allow for an exception to its measure-by-measure application. Under this exception, which is still in the rule in the 116 th Congress, the budgetary effects of a House-passed bill may be used to determine compliance with the PAYGO requirement of a separate measure if a special rule provides that the two measures are to be combined upon engrossment. Lastly, the rule was amended to exempt provisions designated as an emergency and to provide for a question of consideration for legislation containing such a designation. Later in the 111 th Congress, during the second session, the House further amended clause 10 of Rule XXI generally to align the House PAYGO rule with the Statutory Pay-As-You-Go Act of 2010, which was enacted earlier in the year. The changes were included in Section 5 of H.Res. 1500 , a special rule providing for the consideration of an unrelated measure. The changes largely related to scoring issuesâwhat budgetary effects would count and not count for purposes of determining if legislation increased the deficit (or reduced the surplus). First, the rule was amended to focus on the "on-budget deficit," excluding any "off-budget" effects, such as those affecting the Social Security trust funds. Second, the rule was amended to require that determinations of the budgetary effects of legislation were consistent with the Statutory PAYGO Act. Specifically, the following scoring requirements were incorporated into the House PAYGO rule. Included in estimates: budgetary effects resulting from "outyear modifications" of direct spending laws contained in appropriations acts. Excluded from estimates: budgetary effects due to "timing shifts" from inside to outside the 11-year period covered by the PAYGO rule; and budgetary effects resulting from legislation extending current policy (referred to as "adjustments for current policies"), which were scheduled by statute to expire at the time, in four areas: (1) Medicare payments to physicians; (2) the estate and gift tax; (3) the alternative minimum tax (AMT); and (4) middle-class tax cuts. Actions in the 112th Congress At the beginning of the 112 th Congress, in adopting the rules of the House, the new Republican majority replaced the PAYGO rule with a new Cut-As-You-Go (CUTGO) rule. In general, the CUTGO rule focused on the net effect of new legislation on mandatory spending only, excluding any effects on revenues. Specifically, the rule prohibited the consideration of any legislation that would have the net effect of increasing mandatory spending over the same 6-year and 11-year periods as the previous PAYGO rule. Excluding the projected revenue effects had at least two implications: (1) the House could consider legislation reducing revenues, regardless of whether it would increase the projected deficit, without being vulnerable to a point of order under the rule; and (2) legislation projected to increase mandatory spending could not be offset by an increase in revenues, in order to comply with the rule. The CUTGO rule also did not continue the "adjustments for current policies," as provided in the Statutory PAYGO Act. It is worth noting that these statutory adjustments were set to expire at the end of 2011 and were not extended beyond 2011. Other than these changes, the CUTGO rule generally retained the procedures related to the operation of the previous PAYGO rule. For example, the budgetary effects designated as emergency requirements under the Statutory PAYGO Act were excluded and also required a vote on the question of consideration, as provided in the new PAYGO rule, as described above. The CUTGO rule was renewed, without change, in each subsequent Congress, through the 115 th Congress (i.e., through 2018). Actions in the 116th Congress At the beginning of the 116 th Congress, in adopting the rules of the House, the new Democratic majority reinstituted the PAYGO rule, replacing the previous CUTGO rule. Most significantly, the PAYGO rule reincorporates the projected revenue effects of legislation into the evaluation of determining a violation. The new rule, however, is not exactly the same PAYGO rule that existed at the end of the 111 th Congress. In particular, unlike the previous PAYGO rule, it includes off-budget effects, such as those that affect the receipts and outlays of the Social Security trust funds. In general, other than these changes, the new House PAYGO rule retains the procedures related to the operation of the former CUTGO and PAYGO rules. For example, the new PAYGO rule continues to provide for combining the budgetary effects of two measures, under particular circumstances, and for excluding budgetary effects designated as an emergency, as described in the " Features of the House PAYGO Rule ," section above. Comparison to Statutory PAYGO Requirements The House PAYGO rule exists alongside similar PAYGO requirements in statute. Like the House rule, the Statutory Pay-As-You-Go Act of 2010 (Title I of P.L. 111-139 , 124 Stat. 8-29), enacted on February 12, 2010, is intended to discourage or prevent Congress from taking certain legislative action that would increase the on-budget deficit. It generally requires that legislation affecting direct spending or revenues not increase the deficit over the 6-year and 11-year time periods, as in the House rule. Notably, the Statutory PAYGO Act relates only to the on-budget effects of legislation, excluding any off-budget effects, such as those affecting the Social Security trust funds. While the House PAYGO rule and the statutory requirements are similar, they are different in significant ways relating to when and how they are enforced. The House rule applies during the consideration of legislation on the House floor. That is, the House rule prohibits the consideration of the legislation on the House floor if it does not comply with the requirement. In addition, under the House PAYGO rule, each measure affecting direct spending and revenues must comply with the requirement, with the one exception of two measures combined upon engrossment, as explained above. The Statutory PAYGO Act, in contrast, applies the requirement to legislation after it has been enacted. Moreover, instead of requiring that each enacted bill not increase the deficit, the statutory rule requires that the net effect of all bills affecting direct spending and revenues (referred to as PAYGO legislation or PAYGO acts) enacted during a session of Congress not increase the deficit. That is, under the statutory rule, the net effect of all PAYGO acts enacted during a session of Congress must not increase the deficit over either a 5-year or a 10-year period. In other words, Congress can enact legislation increasing the deficit and still comply with the statutory rule as long as separate legislation offsetting such increases in the deficit is enacted during the same year. Reflecting the difference in when the PAYGO requirement is applied, the congressional and statutory rules also differ in how they are enforced. As noted above, the House PAYGO rule is enforced by a point of order to prevent the consideration of legislation that does not meet the requirement. In contrast, the statutory PAYGO rule is enforced by sequestrationâthe cancellation of budgetary resources provided by laws affecting direct spendingâto eliminate an increase in the deficit resulting from the enactment of legislation. The former is an internal procedure of the House, whereas the latter involves actions taken by the President and the Office of Management and Budget. The statutory PAYGO rule provides that if the net effect of direct spending and revenue legislation enacted during a year increases the deficit (i.e., violates the PAYGO requirement), budgetary resources in certain direct spending programs are cut in order to eliminate the increase in the deficit. Specifically, the average budgetary effects (i.e., any increase or decrease in the deficit) over 5-year and 10-year periods of each PAYGO act are placed on 5-year and 10-year scorecards, respectively. The PAYGO requirement effectively is applied to the balances on each of these scorecards 14 days after Congress adjourns at the end of a session. If either scorecard shows a positive balance (referred to as a debit ) for the budget year, the President is required to issue a sequestration order cancelling budgetary resources in non-exempt direct spending programs sufficient to eliminate the balance (the larger balance if both scorecards show a positive balance). Finally, although the House PAYGO rule must be adopted anew at the beginning of each new Congress, the Statutory PAYGO Act does not include any expiration date. Appendix. Text of the House Pay-As-You-Go (PAYGO) Rule: Clause 10 of House Rule XXI (116th Congress) 10. (a)(1) Except as provided in paragraphs (b) and (c), it shall not be in order to consider any bill, joint resolution, amendment, or conference report if the provisions of such measure affecting direct spending and revenues have the net effect of increasing the deficit or reducing the surplus for either the period comprisingâ (A) the current fiscal year, the budget year, and the four fiscal years following that budget year; or (B) the current fiscal year, the budget year, and the nine fiscal years following that budget year. (2) The effect of such measure on the deficit or surplus shall be determined on the basis of estimates made by the Committee on the Budget relative to baseline estimates supplied by the Congressional Budget Office consistent with section 257 of the Balanced Budget and Emergency Deficit Control Act of 1985. (b) If a bill, joint resolution, or amendment is considered pursuant to a special order of the House directing the Clerk to add as new matter at the end of such measure the provisions of a separate measure as passed by the House, the provisions of such separate measure as passed by the House shall be included in the evaluation under paragraph (a) of the bill, joint resolution, or amendment. (c)(1) Except as provided in subparagraph (2), the evaluation under paragraph (a) shall exclude a provision expressly designated as an emergency for purposes of pay-as-you-go principles in the case of a point of order under this clause against consideration ofâ (A) a bill or joint resolution; (B) an amendment made in order as original text by a special order of business; (C) a conference report; or (D) an amendment between the Houses. (2) In the case of an amendment (other than one specified in subparagraph (1)) to a bill or joint resolution, the evaluation under paragraph (a) shall give no cognizance to any designation of emergency. (3) If a bill, joint resolution, an amendment made in order as original text by a special order of business, a conference report, or an amendment between the Houses includes a provision expressly designated as an emergency for purposes of pay-as-you-go principles, the Chair shall put the question of consideration with respect thereto. (d) For the purpose of this clause, the terms "budget year" and "current year" have the meanings specified in section 250 of the Balanced Budget and Emergency Deficit Control Act of 1985, and the term "direct spending" has the meaning specified in such section 250 except that such term shall also include provisions in appropriations Acts that make outyear modifications to substantive law as described in section 3(4)(C) of the Statutory Pay-As-You-Go Act of 2010. Summary:	null	96	20,964	20,966	20,966	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: T he House pay-as-you-go (PAYGO) rule is generally intended to discourage or prevent Congress from taking certain legislative action that would increase the deficit. It prohibits the consideration of direct spending and revenue legislation that is projected to increase the deficit over either a 6-year or an 11-year period. In effect, the rule requires legislation that includes provisions projected to increase direct spending or reduce revenues to also include offsetting provisions over the two specified periods. The House PAYGO rule was first established at the beginning of the 110 th Congress and modified in the 111 th Congress. It was replaced by the cut-as-you-go (CUTGO) rule, which applied only to direct spending legislation, at the beginning of the 112 th Congress. The PAYGO rule was reinstated, with modifications, replacing the CUTGO rule, at the beginning of the 116 th Congress. This report explains the House PAYGO rule's features, describes its legislative history, and discusses how it compares to statutory PAYGO requirements. It updates the previous version (dated November 30, 2010), largely with information about the CUTGO rule and the PAYGO rule, as adopted in the 116 th Congress. The full text of the House PAYGO rule is provided in the Appendix . Features of the House PAYGO Rule The House PAYGO rule adopted for the 116 th Congress prohibits the consideration of legislation affecting direct spending and revenues that is projected to increase the deficit, or reduce the surplus, over either of two time periods: (1) the 6-year period consisting of the current fiscal year, the budget year, and the 4 ensuing fiscal years; or (2) the 11-year period consisting of the current year, the budget year, and the ensuing 9 fiscal years. The House PAYGO rule applies to legislation affecting direct spending and revenues . Direct spending, also referred to as mandatory spending, has two distinguishing features: (1) it is provided or controlled in authorizing legislation; and (2) it generally continues without any annual legislative action. Examples of programs funded through direct spending include Medicare, unemployment compensation, and federal retirement. Direct spending is within the jurisdiction of the respective authorizing committees. Revenues are the funds collected from the public primarily as a result of the federal government's exercise of its sovereign taxing power. They consist of receipts from individual income taxes, payroll taxes, corporate income taxes, excise taxes, duties, gifts, and miscellaneous receipts. Revenues are within the jurisdiction of the Committee on Ways and Means in the House. The House PAYGO rule does not apply to discretionary spending , which is provided and controlled through the annual appropriations process. Discretionary spending is not counted for purposes of determining whether legislation increases the deficit under the House PAYGO rule. The rule generally requires that each measure affecting direct spending and revenues not increase the deficit over either of the two time periods specified. That is, to comply with the rule, each measure that includes provisions projected to increase direct spending or reduce revenues must also include offsetting provisions projected to reduce direct spending, increase revenues, or both, by equivalent amounts. A projected deficit reduction resulting from a measure previously passed by the House, or one to be considered subsequently by the House, cannot be used to offset a deficit increase due to provisions in a measure currently under consideration. The rule provides one exception to this measure-by-measure application. Under clause 10(b) of House Rule XXI, savings from a previously passed measure may be included in determining a separate measure's PAYGO compliance if a special rule provides that the two measures are to be combined upon engrossment. The rule specifies that a determination of the effect of direct spending and revenue legislation on the deficit or surplus is to be based on estimates made by the Committee on the Budget relative to the Congressional Budget Office (CBO) baseline estimates. In producing its baseline estimates, CBO projects revenues, spending, and deficit or surplus levels under existing law (i.e., assuming no legislative changes). Under the rule, such baseline estimates are to be consistent with Section 257 of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended. The House PAYGO rule does not apply to direct spending increases or revenue reductions that occur under existing law. That is, if direct spending increases because more individuals qualify for benefits under existing law, for example, any increase in the deficit is not counted for PAYGO purposes and is beyond the rule's control. The House PAYGO rule exempts provisions designated as an emergency from being counted in determining compliance with the rule. Under clause 10(c) of House Rule XXI, a determination as to whether legislation increases the deficit, or reduces the surplus, shall exclude any provision "expressly designated as an emergency for the purposes of pay-as-you-go principles." If legislation contains such a designation, the chair must put the question of consideration to the full House prior to its consideration. That is, the House must vote on whether or not to consider the legislation, even though all or certain budgetary effects would be exempt from the House PAYGO rule. If the question is decided in the affirmative (by simple majority), the legislation may then be considered. Alternatively, if the question is decided in the negative, the legislation may not be considered. The House PAYGO rule is enforced by a point of order to prevent the consideration of legislation that does not meet the requirement. If legislation brought up on the House floor violates the rule (i.e., increases the deficit, or reduces the surplus, in either of the two fiscal-year periods), a Member may raise a point of order against it. If the point of order is sustained, the legislation may not be considered (in the case of an amendment, the amendment falls). The House rule, however, is not self-enforcing: a Member must raise the point of order to enforce it. In addition, the House rule may be waived by a special rule reported by the House Rules Committee and agreed to by the House by majority vote, by considering the legislation under the suspension of the rules procedures, or by unanimous consent. Finally, the House PAYGO rule, as part of the standing rules of the House, is effective for the current Congress for which it is adopted. Legislative History of the House PAYGO Rule The House PAYGO rule was first established at the beginning of the 110 th Congress. It was modified at the beginning of the 111 th Congress, as part of the opening-day rules package, and again in the second session of the 111 th Congress, as part of a special rule providing for the consideration of an unrelated measure. In addition, its application to certain legislation was modified during the first session of the 111 th Congress, as part of the FY2010 budget resolution ( S.Con.Res. 13 ). At the beginning of the 112 th Congress, it was replaced with the CUTGO rule, which focused exclusively on the mandatory spending effects of legislation, eliminating any revenue effects from the budgetary evaluation under the rule. Most recently, at the beginning of the 116 th Congress, the PAYGO rule was reinstituted, covering both mandatory spending and revenues, with certain modifications. Actions in the 110th Congress Even before the 110 th Congress began, the new Democratic leadership in both chambers indicated an intention to "restore" PAYGO rules. Accordingly, the House adopted its own PAYGO rule as part of its opening-day rules package. The original House PAYGO rule generally prohibited the consideration of legislation affecting direct spending and revenues that was projected to increase the deficit or reduce the surplus over a 6-year and an 11-year period. In this original form, as it does in its current form, the rule counted on-budget and off-budget entities (such as Social Security) in determining the effect on the deficit (referred to as the unified budget deficit ). The rule also directed the Budget Committee to use the following particular baseline estimates when determining the effect of legislation on the deficit: after the beginning of a new calendar year but before the consideration of a budget resolution, the Budget Committee was to use the most recent baseline estimates supplied by CBO; and after the consideration of the budget resolution, the Budget Committee was to use the most recent baseline estimates supplied by CBO used in considering the budget resolution. Lastly, the original rule provided no explicit exemptions, such as adopted in the 116 th Congress. Actions in the 111th Congress At the beginning of the 111 th Congress, following the customary practice, the House adopted its rules by adopting the preceding Congress's rules, including the House PAYGO rule, with certain amendments. Three changes were made to the PAYGO rule. First, the rule was modified to require the Budget Committee to use baseline estimates supplied by CBO, replacing the particular baseline estimates specified in the original rule. Second, a provision was added to the rule to allow for an exception to its measure-by-measure application. Under this exception, which is still in the rule in the 116 th Congress, the budgetary effects of a House-passed bill may be used to determine compliance with the PAYGO requirement of a separate measure if a special rule provides that the two measures are to be combined upon engrossment. Lastly, the rule was amended to exempt provisions designated as an emergency and to provide for a question of consideration for legislation containing such a designation. Later in the 111 th Congress, during the second session, the House further amended clause 10 of Rule XXI generally to align the House PAYGO rule with the Statutory Pay-As-You-Go Act of 2010, which was enacted earlier in the year. The changes were included in Section 5 of H.Res. 1500 , a special rule providing for the consideration of an unrelated measure. The changes largely related to scoring issuesâwhat budgetary effects would count and not count for purposes of determining if legislation increased the deficit (or reduced the surplus). First, the rule was amended to focus on the "on-budget deficit," excluding any "off-budget" effects, such as those affecting the Social Security trust funds. Second, the rule was amended to require that determinations of the budgetary effects of legislation were consistent with the Statutory PAYGO Act. Specifically, the following scoring requirements were incorporated into the House PAYGO rule. Included in estimates: budgetary effects resulting from "outyear modifications" of direct spending laws contained in appropriations acts. Excluded from estimates: budgetary effects due to "timing shifts" from inside to outside the 11-year period covered by the PAYGO rule; and budgetary effects resulting from legislation extending current policy (referred to as "adjustments for current policies"), which were scheduled by statute to expire at the time, in four areas: (1) Medicare payments to physicians; (2) the estate and gift tax; (3) the alternative minimum tax (AMT); and (4) middle-class tax cuts. Actions in the 112th Congress At the beginning of the 112 th Congress, in adopting the rules of the House, the new Republican majority replaced the PAYGO rule with a new Cut-As-You-Go (CUTGO) rule. In general, the CUTGO rule focused on the net effect of new legislation on mandatory spending only, excluding any effects on revenues. Specifically, the rule prohibited the consideration of any legislation that would have the net effect of increasing mandatory spending over the same 6-year and 11-year periods as the previous PAYGO rule. Excluding the projected revenue effects had at least two implications: (1) the House could consider legislation reducing revenues, regardless of whether it would increase the projected deficit, without being vulnerable to a point of order under the rule; and (2) legislation projected to increase mandatory spending could not be offset by an increase in revenues, in order to comply with the rule. The CUTGO rule also did not continue the "adjustments for current policies," as provided in the Statutory PAYGO Act. It is worth noting that these statutory adjustments were set to expire at the end of 2011 and were not extended beyond 2011. Other than these changes, the CUTGO rule generally retained the procedures related to the operation of the previous PAYGO rule. For example, the budgetary effects designated as emergency requirements under the Statutory PAYGO Act were excluded and also required a vote on the question of consideration, as provided in the new PAYGO rule, as described above. The CUTGO rule was renewed, without change, in each subsequent Congress, through the 115 th Congress (i.e., through 2018). Actions in the 116th Congress At the beginning of the 116 th Congress, in adopting the rules of the House, the new Democratic majority reinstituted the PAYGO rule, replacing the previous CUTGO rule. Most significantly, the PAYGO rule reincorporates the projected revenue effects of legislation into the evaluation of determining a violation. The new rule, however, is not exactly the same PAYGO rule that existed at the end of the 111 th Congress. In particular, unlike the previous PAYGO rule, it includes off-budget effects, such as those that affect the receipts and outlays of the Social Security trust funds. In general, other than these changes, the new House PAYGO rule retains the procedures related to the operation of the former CUTGO and PAYGO rules. For example, the new PAYGO rule continues to provide for combining the budgetary effects of two measures, under particular circumstances, and for excluding budgetary effects designated as an emergency, as described in the " Features of the House PAYGO Rule ," section above. Comparison to Statutory PAYGO Requirements The House PAYGO rule exists alongside similar PAYGO requirements in statute. Like the House rule, the Statutory Pay-As-You-Go Act of 2010 (Title I of P.L. 111-139 , 124 Stat. 8-29), enacted on February 12, 2010, is intended to discourage or prevent Congress from taking certain legislative action that would increase the on-budget deficit. It generally requires that legislation affecting direct spending or revenues not increase the deficit over the 6-year and 11-year time periods, as in the House rule. Notably, the Statutory PAYGO Act relates only to the on-budget effects of legislation, excluding any off-budget effects, such as those affecting the Social Security trust funds. While the House PAYGO rule and the statutory requirements are similar, they are different in significant ways relating to when and how they are enforced. The House rule applies during the consideration of legislation on the House floor. That is, the House rule prohibits the consideration of the legislation on the House floor if it does not comply with the requirement. In addition, under the House PAYGO rule, each measure affecting direct spending and revenues must comply with the requirement, with the one exception of two measures combined upon engrossment, as explained above. The Statutory PAYGO Act, in contrast, applies the requirement to legislation after it has been enacted. Moreover, instead of requiring that each enacted bill not increase the deficit, the statutory rule requires that the net effect of all bills affecting direct spending and revenues (referred to as PAYGO legislation or PAYGO acts) enacted during a session of Congress not increase the deficit. That is, under the statutory rule, the net effect of all PAYGO acts enacted during a session of Congress must not increase the deficit over either a 5-year or a 10-year period. In other words, Congress can enact legislation increasing the deficit and still comply with the statutory rule as long as separate legislation offsetting such increases in the deficit is enacted during the same year. Reflecting the difference in when the PAYGO requirement is applied, the congressional and statutory rules also differ in how they are enforced. As noted above, the House PAYGO rule is enforced by a point of order to prevent the consideration of legislation that does not meet the requirement. In contrast, the statutory PAYGO rule is enforced by sequestrationâthe cancellation of budgetary resources provided by laws affecting direct spendingâto eliminate an increase in the deficit resulting from the enactment of legislation. The former is an internal procedure of the House, whereas the latter involves actions taken by the President and the Office of Management and Budget. The statutory PAYGO rule provides that if the net effect of direct spending and revenue legislation enacted during a year increases the deficit (i.e., violates the PAYGO requirement), budgetary resources in certain direct spending programs are cut in order to eliminate the increase in the deficit. Specifically, the average budgetary effects (i.e., any increase or decrease in the deficit) over 5-year and 10-year periods of each PAYGO act are placed on 5-year and 10-year scorecards, respectively. The PAYGO requirement effectively is applied to the balances on each of these scorecards 14 days after Congress adjourns at the end of a session. If either scorecard shows a positive balance (referred to as a debit ) for the budget year, the President is required to issue a sequestration order cancelling budgetary resources in non-exempt direct spending programs sufficient to eliminate the balance (the larger balance if both scorecards show a positive balance). Finally, although the House PAYGO rule must be adopted anew at the beginning of each new Congress, the Statutory PAYGO Act does not include any expiration date. Appendix. Text of the House Pay-As-You-Go (PAYGO) Rule: Clause 10 of House Rule XXI (116th Congress) 10. (a)(1) Except as provided in paragraphs (b) and (c), it shall not be in order to consider any bill, joint resolution, amendment, or conference report if the provisions of such measure affecting direct spending and revenues have the net effect of increasing the deficit or reducing the surplus for either the period comprisingâ (A) the current fiscal year, the budget year, and the four fiscal years following that budget year; or (B) the current fiscal year, the budget year, and the nine fiscal years following that budget year. (2) The effect of such measure on the deficit or surplus shall be determined on the basis of estimates made by the Committee on the Budget relative to baseline estimates supplied by the Congressional Budget Office consistent with section 257 of the Balanced Budget and Emergency Deficit Control Act of 1985. (b) If a bill, joint resolution, or amendment is considered pursuant to a special order of the House directing the Clerk to add as new matter at the end of such measure the provisions of a separate measure as passed by the House, the provisions of such separate measure as passed by the House shall be included in the evaluation under paragraph (a) of the bill, joint resolution, or amendment. (c)(1) Except as provided in subparagraph (2), the evaluation under paragraph (a) shall exclude a provision expressly designated as an emergency for purposes of pay-as-you-go principles in the case of a point of order under this clause against consideration ofâ (A) a bill or joint resolution; (B) an amendment made in order as original text by a special order of business; (C) a conference report; or (D) an amendment between the Houses. (2) In the case of an amendment (other than one specified in subparagraph (1)) to a bill or joint resolution, the evaluation under paragraph (a) shall give no cognizance to any designation of emergency. (3) If a bill, joint resolution, an amendment made in order as original text by a special order of business, a conference report, or an amendment between the Houses includes a provision expressly designated as an emergency for purposes of pay-as-you-go principles, the Chair shall put the question of consideration with respect thereto. (d) For the purpose of this clause, the terms "budget year" and "current year" have the meanings specified in section 250 of the Balanced Budget and Emergency Deficit Control Act of 1985, and the term "direct spending" has the meaning specified in such section 250 except that such term shall also include provisions in appropriations Acts that make outyear modifications to substantive law as described in section 3(4)(C) of the Statutory Pay-As-You-Go Act of 2010.	Summary:	gov_report	1,024	null	41
crs_R45992	crs_R45992_0	You are given a report by a government agency. Write a one-page summary of the report. Report: T he Constitution contains three provisions that mention the term "emolument": 1. The Foreign Emoluments Clause . Article I, Section 9, Clause 8 provides that "no Person holding any Office of Profit or Trust under [the United States], shall, without the Consent of Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State"; 2. The Domestic Emoluments Clause . Article II, Section 1, Clause 7 provides that "[t]he President shall, at stated Times, receive for his Services, a Compensation, which shall neither be encreased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them"; and 3. The Ineligibility Clause. Article I, Section 6, Clause 2 provides (among other things) that no Member of Congress shall "be appointed" during his or her term "to any civil Office under the Authority of the United States, which shall have been created, or the Emoluments whereof shall have been encreased during such time[.]" The first two of these Clauses are the focus of this report. For most of their history, the Foreign and Domestic Emoluments Clauses (collectively, the Emoluments Clauses or the Clauses) were little discussed and largely unexamined by the courts. Recent litigation involving the President, however, has led to multiple federal court decisions more fully addressing the Clauses' scope and application. This report accordingly provides an overview of the Emoluments Clauses as they relate to the President, focusing on the legal issues that have been central to the recent litigation. More specifically, this report discusses (1) the history and purpose of the Clauses; (2) whether the President is a person holding an "Office of Profit or Trust under [the United States]" for purposes of the Foreign Emoluments Clause; (3) the scope of the Emoluments Clauses, focusing specifically on disputes over the breadth of the term "emolument"; and (4) how the Clauses may be enforced. History and Purpose of the Emoluments Clauses Founding Era Foreign Emoluments Clause The Foreign Emoluments Clause's basic purpose is to prevent corruption and limit foreign influence on federal officers. At the Constitutional Convention, Charles Pinckney of South Carolina introduced the language that became the Foreign Emoluments Clause based on "the necessity of preserving foreign Ministers & other officers of the U.S. independent of external influence." The Convention approved the Clause unanimously without noted debate. During the ratification debates, Edmund Randolph of Virginiaâa key figure at the Conventionâexplained that the Foreign Emoluments Clause was intended to "prevent corruption" by "prohibit[ing] any one in office from receiving or holding any emoluments from foreign states." The Clause reflected the Framers' experience with the then-customary European practice of giving gifts to foreign diplomats. Following the example of the Dutch Republic, which prohibited its ministers from receiving foreign gifts in 1651, the Articles of Confederation provided that "any person holding any office of profit or trust under the United States, or any of them" shall not "accept of any present, emolument, office, or title of any kind whatever, from any king, prince, or foreign state." The Foreign Emoluments Clause largely tracks this language from the Articles, although there are some differences. During the Articles period, American diplomats struggled with how to balance their legal obligations and desire to avoid the appearance of corruption, against prevailing European norms and the diplomats' wish to not offend their host country. A well-known example from this period, which appears to have influenced the Framers of the Emoluments Clause, involved the King of France's gift of an opulent snuff box to Benjamin Franklin. Concerned that receipt of this gift would be perceived as corrupting and violate the Articles of Confederation, Franklin sought (and received) congressional approval to keep the gift . Following this precedent, the Foreign Emoluments Clause prohibits federal officers from accepting foreign presents, offices, titles, or emoluments, unless Congress consents. Domestic Emoluments Clause The Domestic Emoluments Clause's purpose is to preserve the President's independence from Congress and state governments. To accomplish this end, the Clause contains two key provisions. First, it provides that the President shall receive a compensation for his services, which cannot be increased or decreased during his term, thus preventing Congress from using its control over the President's salary to exert influence over him. To preserve presidential independence further, the Clause provides that, apart from this fixed salary, the President shall not receive "any other Emolument" from the United States or any state government. In light of its purpose, the Domestic Emoluments Clauseâunlike the Foreign Emoluments Clauseâdoes not permit Congress to assent to the receipt of otherwise prohibited emoluments from the state or federal governments. The Domestic Emoluments Clause, which drew upon similar provisions in state constitutions, received little noted debate at the Constitutional Convention. Its meaning, however, was elucidated by Alexander Hamilton in The Federalist No. 73 . Hamilton wrote that the Domestic Emoluments Clause was designed to isolate the President from potentially corrupting congressional influence: because the President's salary is fixed "once for all" each term, the legislature "can neither weaken his fortitude by operating on his necessities, nor corrupt his integrity by appealing to his avarice." Similarly, Hamilton explained that because "[n]either the Union, nor any of its members, will be at liberty to give . . . any other emolument," the President will "have no pecuniary inducement to renounce or desert the independence intended for him by the Constitution." Other Framers echoed this sentiment during the ratification debates. Nineteenth and Twentieth Century Practice The Foreign Emoluments Clause provides a role for Congress in determining the propriety of foreign emoluments, in that receipt of an emolument otherwise prohibited by the Clause is permitted with the consent of Congress. Under this authority, Congress has in the past provided consent to the receipt of particular presents, emoluments, and decorations through public or private bills, or by enacting general rules governing the receipt of gifts by federal officers from foreign governments. For example, in 1966, Congress enacted the Foreign Gifts and Decorations Act, which provided general congressional consent for foreign gifts of minimal value, as well as conditional authorization for acceptance of gifts on behalf of the United States in some cases. Several Presidents in the 19th centuryâsuch as Andrew Jackson, Martin Van Buren, John Tyler, and Benjamin Harrison ânotified Congress of foreign presents that they had received, and either placed the gifts at its disposal or obtained consent to their receipt. Other 19th century Presidents treated presents that they received as "gifts to the United States, rather than as personal gifts." Thus, in one instance, President Lincoln accepted a foreign gift on behalf of the United States and then deposited it with the Department of State. In the 20th century, some Presidents have sought the advice of the Department of Justice's Office of Legal Counsel (OLC) on whether acceptance of particular honors or benefits would violate the Emoluments Clauses. Three such OLC opinions addressed whether (1) President Kennedy's acceptance of honorary Irish citizenship would violate the Foreign Emoluments Clause; (2)Â President Reagan's receipt of retirement benefits from the State of California would violate the Domestic Emoluments Clause; and (3)Â President Obama's acceptance of the Nobel Peace Prize would violate the Foreign Emoluments Clause. Persons Subject to the Emoluments Clauses An important threshold issue in examining the Emoluments Clauses is determining who is subject to their terms. The scope of the Domestic Emoluments Clause is clear: it applies to "[t]he President." The Clause prohibits the President from receiving emoluments from state or federal governments, aside from his fixed federal salary. The Foreign Emoluments Clause applies to any person holding an "Office of Profit or Trust under [the United States]." OLC, which has developed a body of opinions on the Emoluments Clauses, has opined that the President "surely" holds an "Office of Profit or Trust" under the Constitution. OLC opinions are generally considered binding within the executive branch. There has been significant academic debate about whether OLC's conclusion comports with the original public meaning of the Foreign Emoluments Clause. Some legal scholars have argued that the Foreign Emoluments Clause does not apply to elected officials such as the President, but only to certain appointed federal officers. Other scholars support OLC's view that the President holds an office of profit and trust under the United States under the original meaning of the Foreign Emoluments Clause. In addition to textual and structural arguments, these scholars debate the significance of Founding-era historical evidence. To support the view that the Foreign Emoluments Clause does not apply to the President, academics have observed that, among other things, (1) a 1792 list produced by Alexander Hamilton of "every person holding any civil office or employment under the United States" did not include elected officials such as the President and Vice President; (2)Â George Washington accepted gifts from the Marquis de Lafayette and the French Ambassador while President without seeking congressional approval; and (3)Â Thomas Jefferson similarly received and accepted diplomatic gifts from Indian tribes and foreign nations, such as a bust of Czar Alexander I from the Russian government, without seeking congressional approval. On the other side of the debate, scholars have observed that, among other things, (1) during Virginia's ratification debates, Edmund Randolph directly stated that the Foreign Emoluments Clause applies to the President; (2) George Mason, another Framer, articulated a similar view in those same debates; and (3) Alexander Hamilton, discussing the dangers of foreign influence on republics in The Federalist No. 22 , stated that this concern extends to a republic's elected officials. Beyond examining contemporaneous historical evidence of the Foreign Emoluments Clause's original public meaning, other evidence (such as text, precedent, and settled practice) is often usedâat least by some juristsâto inform constitutional meaning and interpretation. As a textual matter, both the Constitution itself and contemporaneous sources refer to the Presidency as an "Office." The President receives compensation for his service in office (that is, "Profit") and is tasked with many important constitutional duties (that is, "Trust"). Furthermore, as discussed earlier, historical practice from the 19th and 20th centuries could support the view that the President is subject to the Foreign Emoluments Clause. Unlike Washington's and Jefferson's actions, several 19th century Presidents notified Congress or sought congressional approval upon receipt of gifts by foreign governments. Finally, the common practice among recent Presidents of placing their financial interests in a blind trust or its equivalent could reflect a concern that presidential financial holdings may implicate the Foreign Emoluments Clause. The parties in recent litigation involving the Emoluments Clauses have not disputed that the Foreign Emoluments Clause applies to the President. A single district court decision has reached the merits of this issue. Weighing the evidence discussed above, that court held that "the text, history, and purpose of the Foreign Emoluments Clause, as well as executive branch precedent interpreting it, overwhelmingly support the conclusion" that the Foreign Emoluments Clause applies to the President. This case is currently on appeal before the full Fourth Circuit. The Meaning of "Emolument" A key disputed issue regarding the scope of the Emoluments Clauses is what constitutes an "emolument." This question has divided legal scholars and has only recently been addressed by any federal courts. Scholars, courts, and executive branch agencies have offered several potential definitions of "emolument": 1. Office-related definitions . Black's Law Dictionary defines an "emolument" as an "advantage, profit, or gain received as a result of one's employment or one's holding of office." Some scholars argue that this employment- or office-centric definition of the term is the definition encompassed by the Emoluments Clauses, meaning that the Clauses prohibit covered officials from receiving compensation "for the personal performance of services" as an officer or employee but do not bar "ordinary business transactions" between a covered official and government. 2. Any "profit, gain, advantage, or benefit . " Others argue that the term "emolument" is broader in scope, applying to any profit, gain, advantage, or benefit. Under this broader conception, even "ordinary, fair market value transactions" between a covered official and foreign or domestic governments would be prohibited. Two recent district court decisions adopted this broader definition of "emolument." 3. Functional or purpose-based d ef initions. Both the Department of Justice's OLC and the Comptroller General of the United States, on behalf of the Government Accountability Office (GAO), have issued opinions on whether the acceptance of particular payments, benefits, or positions would implicate the Emoluments Clauses. These opinions have at times appeared to adopt a fact-specific, functional view of the Clauses, focusing on the purpose and potential effect of the specific payments or benefits at issue as they relate to the Clauses' goals of limiting influence on the President and federal officers. The relevant assessment in some of these opinions has appeared to be whether the payments or benefits are intended to or could "influence . . . the recipient as an officer of the United States" under the totality of the circumstances. At least one commentator has asserted that the OLC and GAO opinions support a middle view that Presidents or other federal officers may receive "certain fixed benefits" without those benefits being considered emoluments so long as they are not "subject to foreign or domestic government manipulation or adjustment in connection with" the office. Debates over the scope of the Clauses have largely centered on their text, their history and purpose, and historical practice. With respect to text, for instance, proponents of a broad definition emphasize the use of the word "any" in both Clauses and the phrase "any kind whatever" in the Foreign Emoluments Clause. They also contrast those provisions with the limiting term "whereof" that links emoluments to "civil Office" in the Ineligibility Clause (the provision that limits the ability of Members of Congress to hold dual positions). But proponents of a narrower, office- or employment-limited definition note that the word "any" in the Clauses may simply be read as extending coverage to multiple forms of emoluments (beyond just monetary remuneration). They further assert that the use of "emolument" in the Ineligibility Clause is clearly tied to an office-based definition and supports applying the same definition to the other provisions. As for the Clauses' history and purpose, both sides point to dictionary definitions and other uses of the word (including by Framers) contemporaneous with the Constitution's drafting to support their preferred definition. Proponents of a broad definition also argue that statements about the general anti-corruptive purpose of the Clauses support reading it expansively, while proponents of an office- or employment-limited definition assert that the Clauses were the product of a "balancing of values" that included attracting candidates for federal service who may have had conflicting commercial interests. As for the corpus of OLC and GAO opinions interpreting the Clauses, proponents of the broader and narrower definitions both cite opinions that they argue support their favored definitions. In 2018 and 2019, two federal district courts substantively addressed the Emoluments Clauses' scope for the first time. Both courts concluded that the term "emolument" as used in the Clauses "is broadly defined as any profit, gain, or advantage." As to the Clauses' text, the courts found significant the use of "expansive modifiers" like "any other" and "any kind whatever," and rejected the proposition that the term's office-related use in the Ineligibility Clause should control its use in the other Clauses. With respect to the Clauses' history and purpose, the courts, while acknowledging that broader and narrower definitions of "emolument" both existed at the time of ratification, found the weight of the historical evidence and the Clauses' "broad anti-corruption" purpose supported the more expansive definition. Finally, the courts viewed executive branch precedent and practice as "overwhelmingly consistent with .Â .Â . [an] expansive view of the meaning of the term 'emolument,'" observing that "OLC pronouncements repeatedly cite the broad purpose of the Clauses and the expansive reach of the term 'emolument.'" The recent court decisions construing the Emoluments Clauses are not final, however. In fact, as discussed below, one of the decisions was reversed by a panel of the Fourth Circuit on a separate issue regarding the standing of the plaintiffs to sue, and the full Fourth Circuit has agreed to consider the district court's rulings. The other decision has been certified for an immediate appeal to the District of Columbia Circuit. Thus, the import of these decisions is uncertain. Enforcement of the Clauses Separate from issues regarding the scope of the Emoluments Clauses is how the provisions' mandates are enforced, including whether and to what extent the federal courts and Congress have a role in addressing violations of the Clauses. A principal hurdle in recent litigation involving the President has been the doctrine of standing. Standing is a threshold limitation concerning whether the person or entity suing in federal court has a "right to make a legal claim or seek judicial enforcement of a duty or right." The limitation includes a constitutional component stemming from Article III of the U.S. Constitution, which limits the exercise of federal judicial power to "Cases" or "Controversies." The Supreme Court has interpreted this "case-or-controversy limitation" to require, among other things, that a litigant have "a personal stake in the outcome of the controversy" before the court. At a minimum, a plaintiff must establish that he or she has suffered a personal injury (often called an "injury-in-fact") that is actual or imminent and concrete and particularized. In other words, the injury cannot be "abstract," must affect the plaintiff in a "personal and individual way," and must actually exist or at least be "certainly impending" rather than merely possible in the future. The plaintiff must also show "a sufficient causal connection between the injury and the conduct complained of" (causation) and "a likelihood that the injury will be redressed by a favorable decision" (redressability). Recent lawsuits over the Emoluments Clauses have been filed in three federal courts by (1)Â private parties who argue they compete for business with properties related to the alleged violations of the Clauses, as well as a public interest organization (the "SDNY litigation"); (2)Â the State of Maryland and the District of Columbia (the "Maryland litigation"); and (3) over 200 Members of Congress (the "Congressional litigation"). Each set of plaintiffs implicate distinct legal issues and precedents related to standing. Private-party competitor plaintiffs rely on the notion of "competitor standing," which holds that an economic actor may have standing to challenge unlawful action that benefits a direct competitor in a way that increases competition in the relevant market. State plaintiffs also rely on a competitor standing theory and additionally assert harms to certain sovereign and "quasi-sovereign" interests of the state related to tax revenue, diminution of their sovereign authority, and the economic well-being of state residents in general. Finally, Members of Congress assert standing stemming from the alleged deprivation of their constitutionally prescribed opportunity to vote on the permissibility of particular emoluments under the Foreign Emoluments Clause, which implicates a unique set of standing principles that apply specifically to legislative plaintiffs. More broadly, regardless of the status or classification of the plaintiffs, the fact that a lawsuit involving the Emoluments Clauses seeks a court ruling on the constitutionality of the conduct of an official within another branch of the federal government means that courts must conduct an "especially rigorous" standing inquiry given underlying separation-of-powers concerns. Attempts by these various plaintiffs to sue for alleged violations of the Emoluments Clauses have thus far met with mixed results. With respect to private-party competitor plaintiffs, the district court in the SDNY litigation concluded that several such plaintiffs lacked standing because it was "wholly speculative" that any loss of business or increase in competition could be traced to alleged violations of the Emoluments Clauses rather than "government officials' independent desire to patronize [the] businesses" allegedly involved in those violations based on factors such as service and location. But the Second Circuit recently reversed the district court's ruling regarding the competitor plaintiffs, concluding that "a plaintiff-competitor who alleges a competitive injury caused by a defendant's unlawful conduct that skewed the market in another competitor's favor [has standing] notwithstanding other possible, or even likely, causes for the benefit going to the plaintiff's competition." As for state plaintiffs, a different district court concluded in the Maryland litigation that the State of Maryland and the District of Columbia (D.C.) had standing to sue as competitors based on their interests, along with the interests of their citizens, in hotels and event spaces that competed with a hotel in D.C. related to the alleged unconstitutional conduct. The court reasoned that, based on specific factual allegations regarding diversion of business to that hotel, the plaintiffs were "placed at a competitive disadvantage" because of violations of the Clauses that "unfairly skew[ed] the hospitality market" against them. Yet a panel of the Fourth Circuit reversed this decision, concluding that the theory of standing hinged on the proposition that government customers were patronizing the relevant hotel "because the [h]otel distributes profits or dividends" in violation of the Clauses "rather than due to any of the [h]otel's other characteristics." In the panel's view, such a proposition required "speculation into the subjective motives of independent actors . . . not before the court, undermining a finding of causation." The Fourth Circuit panel's decision has itself now been vacated, however, with the full Fourth Circuit agreeing to hear the case. Finally, as to Members of Congress, the district court in the Congressional litigation determined in 2018 that over 200 Members had standing to sue under the Foreign Emoluments Clause based on the deprivation of their "opportunity to exercise their constitutional right to vote on whether to consent prior to . . . acceptance of prohibited emoluments." Faced with Supreme Court precedent indicating that individual legislators generally lack standing to sue for institutional injuries that amount to "abstract dilution of institutional legislative power," but may have standing when their votes on specific items "have been completely nullified," the district court concluded that the Members alleging violations of the Foreign Emoluments Clause fell into the latter category. Central to the district court's decision in the Congressional litigation was its view that the Member-plaintiffs lacked an adequate legislative remedy for the alleged violations without court intervention. According to the court, although Congress as a whole could pass "legislation on the emoluments issue" to consent to or reject perceived emoluments, the political process would do nothing to address the deprivation of the Members' opportunity to give advance approval or disapproval of particular emoluments in the first instance. As with the court rulings on the definition of the term "emolument," the judicial decisions on standing to enforce the Emoluments Clauses are all subject to further review by the respective circuit courts. It is thus possible that the outcomes in some or all the opinions just described could change. If the effective split between the Second and Fourth Circuits on the viability of competitor standing theories as they relate to alleged violations of the Emoluments Clauses endures, Supreme Court review is also possible. Beyond standing, other doctrines may present potential roadblocks to judicial enforcement of the Clauses. For instance, though its continued vitality is questionable, the Supreme Court has traditionally applied a "zone of interests" test as a prudential aspect of the standing inquiry, which "denies a right of review if the plaintiff's interests are marginally related to or inconsistent with the purposes implicit in the constitutional provision" at issue. Applying this test in the context of the Emoluments Clauses, the district court in the SDNY litigation involving private competitors concluded that such competitors fell outside the zone of interests of the Clauses, because the Emoluments Clauses stemmed from "concern with protecting the . . . government from corruption and undue influence" and were not "intended . . . to protect anyone from competition." Another potential barrier is the political question doctrine, a separation-of-powers-based limitation on the ability of courts to hear disputes where there is, among other things, a "textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack of judicially discoverable and manageable standards for resolving it." In the SDNY litigation, the district court concluded that Congress's authority to "consent to violations" of the Foreign Emoluments Clause meant that Congress, rather than the judiciary, would be "the appropriate body to determine whether" the alleged conduct "infringes on that power." Reversing both these rulings, however, the Second Circuit recently concluded that (1) "a plaintiff who sues to enforce a law that limits the activity of a competitor satisfies the zone of interests test even though the limiting law was not motivated by an intention to protect entities such as plaintiffs from competition," and (2) the judiciary's responsibility to adjudicate alleged violations of the Constitution was not lessened by the "mere possibility that Congress might grant consent" to particular emoluments. The district courts in the Maryland litigation and the Congressional litigation likewise agreed that the zone of interests test and political question doctrine did not bar those suits. But like the other issues raised in recent litigation involving the Emoluments Clauses, further review of the application of these doctrines is possible. Ultimate resolution of the issues is thus uncertain and will likely depend on the nature of the plaintiff involved. If the courts lack jurisdiction to enforce the Emoluments Clauses, the political process would be the remaining avenue for enforcement. In this vein, Congress could seek to enforce the Emoluments Clauses through legislation, political pressure, or potentially impeachment and removal. For instance, given that the Foreign Emoluments Clause explicitly provides a role for Congress in evaluating the propriety of the receipt of foreign emoluments by federal officers, Congress may be empowered to create civil or criminal remedies for violations or establish prophylactic reporting requirements through legislation. Indeed, one bill from the 115th Congress would have required certain reports and divestiture of personal financial interests of the President posing a potential conflict of interest, among other things. Resolutions have also been introduced in the 115th and 116th Congresses objecting to perceived violations of the Foreign Emoluments Clause, as well as calling on the President to take certain actions based on alleged potential violations. That said, it is unclear whether legislative actions would provide an effective means to enforce the Emoluments Clauses against the President, given the possibility of veto and potential separation-of-powers objections. As noted above, the adequacy of these legislative options has been a central issue in the Congressional litigation as it relates to Members' standing, and the issue is subject to further review at the appellate level. Summary:	null	96	29,689	29,691	29,691	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: T he Constitution contains three provisions that mention the term "emolument": 1. The Foreign Emoluments Clause . Article I, Section 9, Clause 8 provides that "no Person holding any Office of Profit or Trust under [the United States], shall, without the Consent of Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State"; 2. The Domestic Emoluments Clause . Article II, Section 1, Clause 7 provides that "[t]he President shall, at stated Times, receive for his Services, a Compensation, which shall neither be encreased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them"; and 3. The Ineligibility Clause. Article I, Section 6, Clause 2 provides (among other things) that no Member of Congress shall "be appointed" during his or her term "to any civil Office under the Authority of the United States, which shall have been created, or the Emoluments whereof shall have been encreased during such time[.]" The first two of these Clauses are the focus of this report. For most of their history, the Foreign and Domestic Emoluments Clauses (collectively, the Emoluments Clauses or the Clauses) were little discussed and largely unexamined by the courts. Recent litigation involving the President, however, has led to multiple federal court decisions more fully addressing the Clauses' scope and application. This report accordingly provides an overview of the Emoluments Clauses as they relate to the President, focusing on the legal issues that have been central to the recent litigation. More specifically, this report discusses (1) the history and purpose of the Clauses; (2) whether the President is a person holding an "Office of Profit or Trust under [the United States]" for purposes of the Foreign Emoluments Clause; (3) the scope of the Emoluments Clauses, focusing specifically on disputes over the breadth of the term "emolument"; and (4) how the Clauses may be enforced. History and Purpose of the Emoluments Clauses Founding Era Foreign Emoluments Clause The Foreign Emoluments Clause's basic purpose is to prevent corruption and limit foreign influence on federal officers. At the Constitutional Convention, Charles Pinckney of South Carolina introduced the language that became the Foreign Emoluments Clause based on "the necessity of preserving foreign Ministers & other officers of the U.S. independent of external influence." The Convention approved the Clause unanimously without noted debate. During the ratification debates, Edmund Randolph of Virginiaâa key figure at the Conventionâexplained that the Foreign Emoluments Clause was intended to "prevent corruption" by "prohibit[ing] any one in office from receiving or holding any emoluments from foreign states." The Clause reflected the Framers' experience with the then-customary European practice of giving gifts to foreign diplomats. Following the example of the Dutch Republic, which prohibited its ministers from receiving foreign gifts in 1651, the Articles of Confederation provided that "any person holding any office of profit or trust under the United States, or any of them" shall not "accept of any present, emolument, office, or title of any kind whatever, from any king, prince, or foreign state." The Foreign Emoluments Clause largely tracks this language from the Articles, although there are some differences. During the Articles period, American diplomats struggled with how to balance their legal obligations and desire to avoid the appearance of corruption, against prevailing European norms and the diplomats' wish to not offend their host country. A well-known example from this period, which appears to have influenced the Framers of the Emoluments Clause, involved the King of France's gift of an opulent snuff box to Benjamin Franklin. Concerned that receipt of this gift would be perceived as corrupting and violate the Articles of Confederation, Franklin sought (and received) congressional approval to keep the gift . Following this precedent, the Foreign Emoluments Clause prohibits federal officers from accepting foreign presents, offices, titles, or emoluments, unless Congress consents. Domestic Emoluments Clause The Domestic Emoluments Clause's purpose is to preserve the President's independence from Congress and state governments. To accomplish this end, the Clause contains two key provisions. First, it provides that the President shall receive a compensation for his services, which cannot be increased or decreased during his term, thus preventing Congress from using its control over the President's salary to exert influence over him. To preserve presidential independence further, the Clause provides that, apart from this fixed salary, the President shall not receive "any other Emolument" from the United States or any state government. In light of its purpose, the Domestic Emoluments Clauseâunlike the Foreign Emoluments Clauseâdoes not permit Congress to assent to the receipt of otherwise prohibited emoluments from the state or federal governments. The Domestic Emoluments Clause, which drew upon similar provisions in state constitutions, received little noted debate at the Constitutional Convention. Its meaning, however, was elucidated by Alexander Hamilton in The Federalist No. 73 . Hamilton wrote that the Domestic Emoluments Clause was designed to isolate the President from potentially corrupting congressional influence: because the President's salary is fixed "once for all" each term, the legislature "can neither weaken his fortitude by operating on his necessities, nor corrupt his integrity by appealing to his avarice." Similarly, Hamilton explained that because "[n]either the Union, nor any of its members, will be at liberty to give . . . any other emolument," the President will "have no pecuniary inducement to renounce or desert the independence intended for him by the Constitution." Other Framers echoed this sentiment during the ratification debates. Nineteenth and Twentieth Century Practice The Foreign Emoluments Clause provides a role for Congress in determining the propriety of foreign emoluments, in that receipt of an emolument otherwise prohibited by the Clause is permitted with the consent of Congress. Under this authority, Congress has in the past provided consent to the receipt of particular presents, emoluments, and decorations through public or private bills, or by enacting general rules governing the receipt of gifts by federal officers from foreign governments. For example, in 1966, Congress enacted the Foreign Gifts and Decorations Act, which provided general congressional consent for foreign gifts of minimal value, as well as conditional authorization for acceptance of gifts on behalf of the United States in some cases. Several Presidents in the 19th centuryâsuch as Andrew Jackson, Martin Van Buren, John Tyler, and Benjamin Harrison ânotified Congress of foreign presents that they had received, and either placed the gifts at its disposal or obtained consent to their receipt. Other 19th century Presidents treated presents that they received as "gifts to the United States, rather than as personal gifts." Thus, in one instance, President Lincoln accepted a foreign gift on behalf of the United States and then deposited it with the Department of State. In the 20th century, some Presidents have sought the advice of the Department of Justice's Office of Legal Counsel (OLC) on whether acceptance of particular honors or benefits would violate the Emoluments Clauses. Three such OLC opinions addressed whether (1) President Kennedy's acceptance of honorary Irish citizenship would violate the Foreign Emoluments Clause; (2)Â President Reagan's receipt of retirement benefits from the State of California would violate the Domestic Emoluments Clause; and (3)Â President Obama's acceptance of the Nobel Peace Prize would violate the Foreign Emoluments Clause. Persons Subject to the Emoluments Clauses An important threshold issue in examining the Emoluments Clauses is determining who is subject to their terms. The scope of the Domestic Emoluments Clause is clear: it applies to "[t]he President." The Clause prohibits the President from receiving emoluments from state or federal governments, aside from his fixed federal salary. The Foreign Emoluments Clause applies to any person holding an "Office of Profit or Trust under [the United States]." OLC, which has developed a body of opinions on the Emoluments Clauses, has opined that the President "surely" holds an "Office of Profit or Trust" under the Constitution. OLC opinions are generally considered binding within the executive branch. There has been significant academic debate about whether OLC's conclusion comports with the original public meaning of the Foreign Emoluments Clause. Some legal scholars have argued that the Foreign Emoluments Clause does not apply to elected officials such as the President, but only to certain appointed federal officers. Other scholars support OLC's view that the President holds an office of profit and trust under the United States under the original meaning of the Foreign Emoluments Clause. In addition to textual and structural arguments, these scholars debate the significance of Founding-era historical evidence. To support the view that the Foreign Emoluments Clause does not apply to the President, academics have observed that, among other things, (1) a 1792 list produced by Alexander Hamilton of "every person holding any civil office or employment under the United States" did not include elected officials such as the President and Vice President; (2)Â George Washington accepted gifts from the Marquis de Lafayette and the French Ambassador while President without seeking congressional approval; and (3)Â Thomas Jefferson similarly received and accepted diplomatic gifts from Indian tribes and foreign nations, such as a bust of Czar Alexander I from the Russian government, without seeking congressional approval. On the other side of the debate, scholars have observed that, among other things, (1) during Virginia's ratification debates, Edmund Randolph directly stated that the Foreign Emoluments Clause applies to the President; (2) George Mason, another Framer, articulated a similar view in those same debates; and (3) Alexander Hamilton, discussing the dangers of foreign influence on republics in The Federalist No. 22 , stated that this concern extends to a republic's elected officials. Beyond examining contemporaneous historical evidence of the Foreign Emoluments Clause's original public meaning, other evidence (such as text, precedent, and settled practice) is often usedâat least by some juristsâto inform constitutional meaning and interpretation. As a textual matter, both the Constitution itself and contemporaneous sources refer to the Presidency as an "Office." The President receives compensation for his service in office (that is, "Profit") and is tasked with many important constitutional duties (that is, "Trust"). Furthermore, as discussed earlier, historical practice from the 19th and 20th centuries could support the view that the President is subject to the Foreign Emoluments Clause. Unlike Washington's and Jefferson's actions, several 19th century Presidents notified Congress or sought congressional approval upon receipt of gifts by foreign governments. Finally, the common practice among recent Presidents of placing their financial interests in a blind trust or its equivalent could reflect a concern that presidential financial holdings may implicate the Foreign Emoluments Clause. The parties in recent litigation involving the Emoluments Clauses have not disputed that the Foreign Emoluments Clause applies to the President. A single district court decision has reached the merits of this issue. Weighing the evidence discussed above, that court held that "the text, history, and purpose of the Foreign Emoluments Clause, as well as executive branch precedent interpreting it, overwhelmingly support the conclusion" that the Foreign Emoluments Clause applies to the President. This case is currently on appeal before the full Fourth Circuit. The Meaning of "Emolument" A key disputed issue regarding the scope of the Emoluments Clauses is what constitutes an "emolument." This question has divided legal scholars and has only recently been addressed by any federal courts. Scholars, courts, and executive branch agencies have offered several potential definitions of "emolument": 1. Office-related definitions . Black's Law Dictionary defines an "emolument" as an "advantage, profit, or gain received as a result of one's employment or one's holding of office." Some scholars argue that this employment- or office-centric definition of the term is the definition encompassed by the Emoluments Clauses, meaning that the Clauses prohibit covered officials from receiving compensation "for the personal performance of services" as an officer or employee but do not bar "ordinary business transactions" between a covered official and government. 2. Any "profit, gain, advantage, or benefit . " Others argue that the term "emolument" is broader in scope, applying to any profit, gain, advantage, or benefit. Under this broader conception, even "ordinary, fair market value transactions" between a covered official and foreign or domestic governments would be prohibited. Two recent district court decisions adopted this broader definition of "emolument." 3. Functional or purpose-based d ef initions. Both the Department of Justice's OLC and the Comptroller General of the United States, on behalf of the Government Accountability Office (GAO), have issued opinions on whether the acceptance of particular payments, benefits, or positions would implicate the Emoluments Clauses. These opinions have at times appeared to adopt a fact-specific, functional view of the Clauses, focusing on the purpose and potential effect of the specific payments or benefits at issue as they relate to the Clauses' goals of limiting influence on the President and federal officers. The relevant assessment in some of these opinions has appeared to be whether the payments or benefits are intended to or could "influence . . . the recipient as an officer of the United States" under the totality of the circumstances. At least one commentator has asserted that the OLC and GAO opinions support a middle view that Presidents or other federal officers may receive "certain fixed benefits" without those benefits being considered emoluments so long as they are not "subject to foreign or domestic government manipulation or adjustment in connection with" the office. Debates over the scope of the Clauses have largely centered on their text, their history and purpose, and historical practice. With respect to text, for instance, proponents of a broad definition emphasize the use of the word "any" in both Clauses and the phrase "any kind whatever" in the Foreign Emoluments Clause. They also contrast those provisions with the limiting term "whereof" that links emoluments to "civil Office" in the Ineligibility Clause (the provision that limits the ability of Members of Congress to hold dual positions). But proponents of a narrower, office- or employment-limited definition note that the word "any" in the Clauses may simply be read as extending coverage to multiple forms of emoluments (beyond just monetary remuneration). They further assert that the use of "emolument" in the Ineligibility Clause is clearly tied to an office-based definition and supports applying the same definition to the other provisions. As for the Clauses' history and purpose, both sides point to dictionary definitions and other uses of the word (including by Framers) contemporaneous with the Constitution's drafting to support their preferred definition. Proponents of a broad definition also argue that statements about the general anti-corruptive purpose of the Clauses support reading it expansively, while proponents of an office- or employment-limited definition assert that the Clauses were the product of a "balancing of values" that included attracting candidates for federal service who may have had conflicting commercial interests. As for the corpus of OLC and GAO opinions interpreting the Clauses, proponents of the broader and narrower definitions both cite opinions that they argue support their favored definitions. In 2018 and 2019, two federal district courts substantively addressed the Emoluments Clauses' scope for the first time. Both courts concluded that the term "emolument" as used in the Clauses "is broadly defined as any profit, gain, or advantage." As to the Clauses' text, the courts found significant the use of "expansive modifiers" like "any other" and "any kind whatever," and rejected the proposition that the term's office-related use in the Ineligibility Clause should control its use in the other Clauses. With respect to the Clauses' history and purpose, the courts, while acknowledging that broader and narrower definitions of "emolument" both existed at the time of ratification, found the weight of the historical evidence and the Clauses' "broad anti-corruption" purpose supported the more expansive definition. Finally, the courts viewed executive branch precedent and practice as "overwhelmingly consistent with .Â .Â . [an] expansive view of the meaning of the term 'emolument,'" observing that "OLC pronouncements repeatedly cite the broad purpose of the Clauses and the expansive reach of the term 'emolument.'" The recent court decisions construing the Emoluments Clauses are not final, however. In fact, as discussed below, one of the decisions was reversed by a panel of the Fourth Circuit on a separate issue regarding the standing of the plaintiffs to sue, and the full Fourth Circuit has agreed to consider the district court's rulings. The other decision has been certified for an immediate appeal to the District of Columbia Circuit. Thus, the import of these decisions is uncertain. Enforcement of the Clauses Separate from issues regarding the scope of the Emoluments Clauses is how the provisions' mandates are enforced, including whether and to what extent the federal courts and Congress have a role in addressing violations of the Clauses. A principal hurdle in recent litigation involving the President has been the doctrine of standing. Standing is a threshold limitation concerning whether the person or entity suing in federal court has a "right to make a legal claim or seek judicial enforcement of a duty or right." The limitation includes a constitutional component stemming from Article III of the U.S. Constitution, which limits the exercise of federal judicial power to "Cases" or "Controversies." The Supreme Court has interpreted this "case-or-controversy limitation" to require, among other things, that a litigant have "a personal stake in the outcome of the controversy" before the court. At a minimum, a plaintiff must establish that he or she has suffered a personal injury (often called an "injury-in-fact") that is actual or imminent and concrete and particularized. In other words, the injury cannot be "abstract," must affect the plaintiff in a "personal and individual way," and must actually exist or at least be "certainly impending" rather than merely possible in the future. The plaintiff must also show "a sufficient causal connection between the injury and the conduct complained of" (causation) and "a likelihood that the injury will be redressed by a favorable decision" (redressability). Recent lawsuits over the Emoluments Clauses have been filed in three federal courts by (1)Â private parties who argue they compete for business with properties related to the alleged violations of the Clauses, as well as a public interest organization (the "SDNY litigation"); (2)Â the State of Maryland and the District of Columbia (the "Maryland litigation"); and (3) over 200 Members of Congress (the "Congressional litigation"). Each set of plaintiffs implicate distinct legal issues and precedents related to standing. Private-party competitor plaintiffs rely on the notion of "competitor standing," which holds that an economic actor may have standing to challenge unlawful action that benefits a direct competitor in a way that increases competition in the relevant market. State plaintiffs also rely on a competitor standing theory and additionally assert harms to certain sovereign and "quasi-sovereign" interests of the state related to tax revenue, diminution of their sovereign authority, and the economic well-being of state residents in general. Finally, Members of Congress assert standing stemming from the alleged deprivation of their constitutionally prescribed opportunity to vote on the permissibility of particular emoluments under the Foreign Emoluments Clause, which implicates a unique set of standing principles that apply specifically to legislative plaintiffs. More broadly, regardless of the status or classification of the plaintiffs, the fact that a lawsuit involving the Emoluments Clauses seeks a court ruling on the constitutionality of the conduct of an official within another branch of the federal government means that courts must conduct an "especially rigorous" standing inquiry given underlying separation-of-powers concerns. Attempts by these various plaintiffs to sue for alleged violations of the Emoluments Clauses have thus far met with mixed results. With respect to private-party competitor plaintiffs, the district court in the SDNY litigation concluded that several such plaintiffs lacked standing because it was "wholly speculative" that any loss of business or increase in competition could be traced to alleged violations of the Emoluments Clauses rather than "government officials' independent desire to patronize [the] businesses" allegedly involved in those violations based on factors such as service and location. But the Second Circuit recently reversed the district court's ruling regarding the competitor plaintiffs, concluding that "a plaintiff-competitor who alleges a competitive injury caused by a defendant's unlawful conduct that skewed the market in another competitor's favor [has standing] notwithstanding other possible, or even likely, causes for the benefit going to the plaintiff's competition." As for state plaintiffs, a different district court concluded in the Maryland litigation that the State of Maryland and the District of Columbia (D.C.) had standing to sue as competitors based on their interests, along with the interests of their citizens, in hotels and event spaces that competed with a hotel in D.C. related to the alleged unconstitutional conduct. The court reasoned that, based on specific factual allegations regarding diversion of business to that hotel, the plaintiffs were "placed at a competitive disadvantage" because of violations of the Clauses that "unfairly skew[ed] the hospitality market" against them. Yet a panel of the Fourth Circuit reversed this decision, concluding that the theory of standing hinged on the proposition that government customers were patronizing the relevant hotel "because the [h]otel distributes profits or dividends" in violation of the Clauses "rather than due to any of the [h]otel's other characteristics." In the panel's view, such a proposition required "speculation into the subjective motives of independent actors . . . not before the court, undermining a finding of causation." The Fourth Circuit panel's decision has itself now been vacated, however, with the full Fourth Circuit agreeing to hear the case. Finally, as to Members of Congress, the district court in the Congressional litigation determined in 2018 that over 200 Members had standing to sue under the Foreign Emoluments Clause based on the deprivation of their "opportunity to exercise their constitutional right to vote on whether to consent prior to . . . acceptance of prohibited emoluments." Faced with Supreme Court precedent indicating that individual legislators generally lack standing to sue for institutional injuries that amount to "abstract dilution of institutional legislative power," but may have standing when their votes on specific items "have been completely nullified," the district court concluded that the Members alleging violations of the Foreign Emoluments Clause fell into the latter category. Central to the district court's decision in the Congressional litigation was its view that the Member-plaintiffs lacked an adequate legislative remedy for the alleged violations without court intervention. According to the court, although Congress as a whole could pass "legislation on the emoluments issue" to consent to or reject perceived emoluments, the political process would do nothing to address the deprivation of the Members' opportunity to give advance approval or disapproval of particular emoluments in the first instance. As with the court rulings on the definition of the term "emolument," the judicial decisions on standing to enforce the Emoluments Clauses are all subject to further review by the respective circuit courts. It is thus possible that the outcomes in some or all the opinions just described could change. If the effective split between the Second and Fourth Circuits on the viability of competitor standing theories as they relate to alleged violations of the Emoluments Clauses endures, Supreme Court review is also possible. Beyond standing, other doctrines may present potential roadblocks to judicial enforcement of the Clauses. For instance, though its continued vitality is questionable, the Supreme Court has traditionally applied a "zone of interests" test as a prudential aspect of the standing inquiry, which "denies a right of review if the plaintiff's interests are marginally related to or inconsistent with the purposes implicit in the constitutional provision" at issue. Applying this test in the context of the Emoluments Clauses, the district court in the SDNY litigation involving private competitors concluded that such competitors fell outside the zone of interests of the Clauses, because the Emoluments Clauses stemmed from "concern with protecting the . . . government from corruption and undue influence" and were not "intended . . . to protect anyone from competition." Another potential barrier is the political question doctrine, a separation-of-powers-based limitation on the ability of courts to hear disputes where there is, among other things, a "textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack of judicially discoverable and manageable standards for resolving it." In the SDNY litigation, the district court concluded that Congress's authority to "consent to violations" of the Foreign Emoluments Clause meant that Congress, rather than the judiciary, would be "the appropriate body to determine whether" the alleged conduct "infringes on that power." Reversing both these rulings, however, the Second Circuit recently concluded that (1) "a plaintiff who sues to enforce a law that limits the activity of a competitor satisfies the zone of interests test even though the limiting law was not motivated by an intention to protect entities such as plaintiffs from competition," and (2) the judiciary's responsibility to adjudicate alleged violations of the Constitution was not lessened by the "mere possibility that Congress might grant consent" to particular emoluments. The district courts in the Maryland litigation and the Congressional litigation likewise agreed that the zone of interests test and political question doctrine did not bar those suits. But like the other issues raised in recent litigation involving the Emoluments Clauses, further review of the application of these doctrines is possible. Ultimate resolution of the issues is thus uncertain and will likely depend on the nature of the plaintiff involved. If the courts lack jurisdiction to enforce the Emoluments Clauses, the political process would be the remaining avenue for enforcement. In this vein, Congress could seek to enforce the Emoluments Clauses through legislation, political pressure, or potentially impeachment and removal. For instance, given that the Foreign Emoluments Clause explicitly provides a role for Congress in evaluating the propriety of the receipt of foreign emoluments by federal officers, Congress may be empowered to create civil or criminal remedies for violations or establish prophylactic reporting requirements through legislation. Indeed, one bill from the 115th Congress would have required certain reports and divestiture of personal financial interests of the President posing a potential conflict of interest, among other things. Resolutions have also been introduced in the 115th and 116th Congresses objecting to perceived violations of the Foreign Emoluments Clause, as well as calling on the President to take certain actions based on alleged potential violations. That said, it is unclear whether legislative actions would provide an effective means to enforce the Emoluments Clauses against the President, given the possibility of veto and potential separation-of-powers objections. As noted above, the adequacy of these legislative options has been a central issue in the Congressional litigation as it relates to Members' standing, and the issue is subject to further review at the appellate level.	Summary:	gov_report	1,024	null	42
crs_R45749	crs_R45749_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Overview The remnants of the Vietnam War (1963-1975) and other regional conflicts have left mainland Southeast Asia as a region heavily contaminated with unexploded ordnance, or UXO. More than 45 years after the United States ceased its extensive bombing of Cambodia, Laos, and Vietnam, hundreds of civilians are still injured or killed each year by UXO from those bombing missions or by landmines laid in conflicts be tween Cambodia and Vietnam (1975-1978), China and Vietnam (1979-1990) and during the Cambodian civil war (1978-1991). While comprehensive surveys are incomplete, it is estimated that more than 20% of the land in Cambodia, Laos, and Vietnam are contaminated by UXO. Over more than 25 years, Congress has appropriated more than $400 million to assist Cambodia, Laos, and Vietnam in clearing their land of UXO. More than 77% of the assistance has been provided via programs funded by the Department of State. In addition, the United States has provided treatment to those individuals maimed by UXO through U.S. Agency for International Development (USAID) programs and the Leahy War Victims Fund. Despite ongoing efforts by the three countries, the United States, and other international donors, it reportedly could take 100 years or more, at the current pace, to clear Cambodia, Laos, and Vietnam of UXO. During that time period, more people will likely be killed or injured by UXO. In addition, extensive areas of the three nations will continue to be unavailable for agriculture, industry, or habitation, hindering the economic development of those three nations. In 2016, President Obama pledged $90 million over a three-year period for UXO decontamination programs in Laosâan amount nearly equal to the total of U.S. UXO assistance to that nation over the previous 20 years. The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provides $196.5 million globally for "conventional weapons destruction," including $159.0 million for "humanitarian demining," under the Department of State's International Security Assistance programs. Of the humanitarian demining funds, $3.85 million is appropriated for Cambodia, $30.0 million for Laos, and $15.0 million for Vietnam. The act also provides $13.5 million for global health and rehabilitation programs under the Leahy War Victims Fund. Moving forward, the 116 th Congress will have an opportunity to consider what additional efforts, if any, the U.S. government should undertake to address the war legacy issue of UXO in mainland Southeast Asia in terms of the decontamination of the region and the provision of medical support or assistance to UXO victims. Beyond the immediate assistance such UXO-related programs would provide to Cambodia, Laos, and Vietnam, U.S. aid on this war legacy issue may also foster better bilateral ties to those nations. For example, some observers view U.S. assistance to Vietnam for the war legacy issue of Agent Orange/dioxin contamination as playing an important role in improving bilateral relations. Background on Unexploded Ordnance What Is Unexploded Ordnance (UXO)? Unexploded ordnance (UXO) is defined as military ammunition or explosive ordnance which has failed to function as intended. UXO is also sometimes referred to as Explosive Remnants of War (ERW) or "duds" because of their failure to explode or function properly. UXO includes mines, artillery shells, mortar rounds, hand or rocket-propelled grenades, and rocket or missile warheads employed by ground forces (see Figure 1 ). Aerial delivered bombs, rockets, missiles, and scatterable mines that fail to function as intended are also classified as UXO. While many of these weapons employ unitary warheads, some weaponsâprimarily certain artillery shells, rocket and missile warheads and aerial bombsâemploy cluster munitions, which disperse a number of smaller munitions as part of their explosive effect. Often times, these submunitions fail to function as intended. In addition, abandoned or lost munitions that have not detonated are also classified as UXO. The probability of UXO detonating is highly unpredictable; it depends on whether or not the munition has been fired, the level of corrosion or degradation, and the specific arming and fusing mechanisms of the device. "Similar items may respond very differently to the same actionâone may be moved without effect, while another may detonate. Some items may be moved repeatedly before detonating and others may not detonate at all." In all cases, UXO poses a danger to both combatants and unaware and unprotected civilians. Military Use Military munitions are used in a variety of ways. Some are used in direct force-on-force combat against troops, combat vehicles, and structures. Others, such as emplaced anti-personnel and anti-vehicle mines or scatterable mines, can be used to attack targets, deny enemy use of key terrain, or establish barriers to impede or influence enemy movement. Cluster munitions can either explode on contact once dispensed or can remain dormant on the ground until triggered by human or vehicular contact. The military utility of cluster weapons is that they can create large areas of destruction, meaning fewer weapons systems and munitions are needed to attack targets. Mines and Cluster Munitions Two particular classes of ordnanceâmines and cluster munitionsâhave received a great deal of attention. Emplaced mines by their very nature pose a particular threat because they are often either buried or hidden and, unless their locations are recorded or some type of warning signs are posted, they can become easily forgotten or abandoned as the battlefield shifts over time. Cluster munitions are dispersed over an area and are generally smaller than unitary warheads, which can make them difficult to readily identify (see Figure 2 ). Since the conclusion of the Vietnam War, many of the newer mines and cluster munitions have a self-destruct or disarming capability. However, as long as their explosive charge remains viable, they pose a hazard to people. Both mines and cluster munitions have been subject to international protocols to limit or ban their development, transfer, and use. The 1999 Ottawa Convention "prohibits the use, stockpiling, production, and transfer of anti-personnel landmines (APLs). It requires states to destroy their stockpiled APLs within four years and eliminate all APL holdings, including mines currently planted in the soil, within 10 years." The 2010 Convention on Cluster Munitions prohibits all use, stockpiling, production and transfer of cluster munitions. The United States has refused to sign either convention, citing the military necessity of these munitions. The United States has, however, been a States Party to the Convention on the Use of Certain Conventional Weapons (CCW) since 1995, which "aims to protect military troops from inhumane injuries and prevent noncombatants from accidentally being wounded or killed by certain types of arms." In 2009, the United States ratified Protocol V of the CCW, Explosive Remnants of War. Protocol V "covers munitions, such as artillery shells, grenades, and gravity bombs, that fail to explode as intended, and any unused explosives left behind and uncontrolled by armed forces." Under Protocol V "the government controlling an area with explosive remnants of war is responsible for clearing such munitions. However, that government may ask for technical or financial assistance from others, including any party responsible for putting the munitions in place originally, to complete the task. No state-party is obligated to render assistance." The United States has undertaken a variety of initiativesâincluding mandating changes to munitions design and adopting federal safeguards and policy regulating their usageâto help limit the potential hazards posed to noncombatants by these UXO. U.S. Policy on Cluster Munitions On June 19, 2008, then-Secretary of Defense Robert Gates issued a new policy on the use of cluster munitions. The policy stated that "[c]luster munitions are legitimate weapons with clear military utility," but it also recognized "the need to minimize the unintended harm to civilians and civilian infrastructure associated with unexploded ordnance from cluster munitions." To that end, the policy mandated that after 2018, "the Military Departments and Combatant Commands will only employ cluster munitions containing submunitions that, after arming, do not result in more than 1% unexploded ordnance (UXO) across the range of intended operational environments." On November 30, 2017, then-Deputy Secretary of Defense Patrick Shanahan issued a revised policy on cluster munitions. The revised policy reverses the 2008 policy that established an unwaiverable requirement that cluster munitions used after 2018 must leave less than 1% of unexploded submunitions on the battlefield. Under the new policy, combatant commanders can use cluster munitions that do not meet the 1% or less unexploded submunitions standard in extreme situations to meet immediate warfighting demands. Furthermore, the new policy does not establish a deadline to replace cluster munitions exceeding the 1% rate, and these munitions are to be removed only after new munitions that meet the 1% or less unexploded submunitions standard are fielded in sufficient quantities to meet combatant commander requirements. However, the new DOD policy stipulates that the Department "will only procure cluster munitions containing submunitions or submunition warheads" meeting the 2008 UXO requirement or possessing "advanced features to minimize the risks posed by unexploded submunitions." UXO in Southeast Asia Overview Although UXO in Southeast Asia can date back to World War II, the majority of the hazard is attributed to the Vietnam War. While an undetermined amount of UXO associated with the Vietnam War was from ground combat and emplaced mines, an appreciable portion of UXO is attributed to the air war waged by the United States from 1962 to 1973, considered by some to be one of the most intense in the history of warfare. One study notes the United States dropped a million tons of bombs on North Vietnam. Three million more tons fell on Laos and Cambodiaâsupposedly "neutral" countries in the conflict. Four million tons fell on South VietnamâAmerica's ally in the war against communist aggression. When the last raid by B-52s over Cambodia on August 15, 1973, culminated American bombing in Southeast Asia, the United States had dropped more than 8 million tons of bombs in 9 years. Less than 2 years later, Cambodia, Laos, and South Vietnam were communist countries. The U.S. State Department in 2014 characterized the problem by country. Cambodia: Nearly three decades of armed conflict left Cambodia severely contaminated with landmines and unexploded ordnance (UXO). The Khmer Rouge, the Royal Cambodian Armed Forces (RCAF), the Vietnamese military, and, to a lesser extent, the Thai army, laid extensive minefields during the Indochina wars. These minefields are concentrated in western Cambodia, especially in the dense "K-5 mine belt" along the border with Thailand, laid by Vietnamese forces during the 1980s. UXOâmostly from U.S. air and artillery strikes during the Vietnam War and land battles fought along the border with Vietnamâcontaminates areas in eastern and northeastern Cambodia. While the full extent of contamination is unknown, the Landmine and Cluster Munition Monitor reports that a baseline survey completed in 2012 of Cambodia's 124 mine-affected districts found a total of 1,915 square kilometers (739 square miles) of contaminated land. Laos: Laos is the most heavily bombed country per capita in the world as a result of the Indochina wars of the 1960s and 1970s. While landmines were laid in Laos during this period, UXO, including cluster munitions remnants (called "bombies" in Laos), represents a far greater threat to the population and account for the bulk of contamination. UXO, mostly of U.S. origin, remains in the majority of the country's 18 provinces. Vietnam: UXO contaminates virtually all of Vietnam as a result of 30 years of conflict extending from World War II through the Vietnam War. The most heavily contaminated provinces are in the central region and along the former demilitarized zone (DMZ) that divided North Vietnam and South Vietnam. Parts of southern Vietnam and areas around the border with China also remain contaminated with UXO. The Situation in Cambodia The Kingdom of Cambodia is among the world's most UXO-afflicted countries, contaminated with cluster munitions, landmines, and other undetonated weapons. U.S. bombing of northeastern Cambodia during the Vietnam War, the Vietnamese invasion in 1979, and civil wars during 1970s and 1980s all contributed to the problem of unexploded ordnance. In 1969, the United States launched a four-year carpet-bombing campaign on Cambodia, dropping 2.7 million tons of ordnance, including 80,000 cluster bombs containing 26 million submunitions or bomblets. Up to one-quarter of the cluster bomblets failed to explode, according to some estimates. In addition, the Vietnamese army mined the Cambodia-Thai border as it invaded the country and took control from the Khmer Rouge in 1979. The Vietnamese military, Vietnam-backed Cambodian forces, the Khmer Rouge, and Royalist forces reportedly all deployed landmines during the 1979-1989 civil war period. Cambodian Prime Minister Hun Sen occasionally has referred to the U.S. bombing of Cambodia, which occurred between 1969 and 1973, when criticizing the United States; however, the historical event has not been a major issue in recent U.S.-Cambodian relations. Contamination and Casualties There have been over 64,700 UXO casualties in Cambodia since 1979, including over 19,700 deaths. The Cambodia Mine/ERW Victim Information System (CMVIS) has recorded an overall trend of significant decreases in the number of annual casualties: 58 in 2017 compared to 111 in 2015, 186 in 2012 and 286 in 2010. Despite progress, the migration of poor Cambodians to the northwestern provinces bordering Thailand, one of the most heavily mined areas in the world, has contributed to continued casualties. Cambodia, with 25,000 UXO-related amputees, has the highest number of amputees per capita in the world. The economic costs of UXO include obstacles to infrastructure development, land unsuitable for agricultural purposes, and disruptions to irrigation and drinking water supplies. Open Development Cambodia, a website devoted to development-related data, reports that since the early 1990s, about 580 square miles (1,500 square kilometers) of land has been cleared of UXO. Â Estimates of the amount of land still containing UXO vary. According to some reports, about 50% of contaminated land has been cleared, and an estimated 630 square miles (1,640 square kilometers) of land still contain UXO. Many of the remaining areas are the most densely contaminated, including 21 northwestern districts along the border with Thailand that contain anti-personnel mines laid by the Vietnamese military and that account for the majority of mine casualties. Cleanup Efforts Between 1993 and 2017, the U.S. government contributed over $133.6 million for UXO removal and disposal, related educational efforts, and survivor assistance programs in Cambodia. These activities are carried out largely by U.S. and international nongovernmental organizations (NGOs), in collaboration with the Cambodian Mine Action Center, a Cambodian NGO, and the Cambodian government. USAID's Leahy War Victims Fund has supported programs to help provide medical and rehabilitation services and prosthetics to Cambodian victims of UXO. Nonproliferation, Anti-terrorism, Demining and Related Programs (NADR) funding for demining activities was $5.5 million in both 2015 and 2016, $4.2 in 2017, and $2.9 million in 2018. Global donors contributed over $132 million between 2013 and 2017, mostly for clearance efforts. In 2017, the largest contributors of demining and related assistance were the United States, United Kingdom, Australia, Japan, and Germany, providing approximately $10.6 million in total. In 2018, the Cambodian government and Cambodian Mine Action and Victim Assistance Authority (CMAA), a government agency, launched the National Mine Action Strategy (NMAS) for 2018-2025. The goal of removing UXO from all contaminated areas by 2025 would require the clearance of 110 square kilometers per year at a cost of about $400 million. The NMAS estimated that at the current rate of progress, however, Cambodia would need a little over 10 years to complete clearance of all known mined areas. Some experts are concerned that declining international assistance could jeopardize clearance goals. In 2017, total international demining support to Cambodia decreased by 61%, largely due to lower contributions from Australia and Japan. The Situation in Laos From 1964 through 1973, the United States military reportedly flew 580,000 bombing runs and dropped over 2 million tons of cluster munitions, including over 270 million cluster bombs, on the small land-locked country. The total was more than the amount dropped on Germany and Japan combined in World War II. An estimated one-third of these munitions failed to explode. The Lao government claims that up to 75-80 million submunitions or bomblets released from the cluster bombs remain in over one-third of the country's area. Military conflicts during the French colonial period and the Laotian Civil War during the 1960s and 1970s have also contributed to the problem of UXO/ERW. The U.S. bombing campaign in Laos was designed to interdict North Vietnamese supply lines that ran through Laos. The bombing campaign also supported Lao government forces fighting against communist rebels (Pathet Lao) and their North Vietnamese allies. Cluster munitions were considered the "weapon of choice" in Laos because they could penetrate the jungle canopy, cover large areas, and successfully attack convoys and troop concentrations hidden by the trees. The most heavily bombed areas in Laos were the northeastern and southern provinces, although UXO can be found in 14 of the country's 17 provinces. The bombings in the northeast were intended to deny territory, particularly the Plain of Jars, to Pathet Lao and North Vietnamese forces and, in the south, to sever the Ho Chi Minh Trail, which crossed the border into eastern Laos. The northeastern part of Laos was also used as a "free drop zone" where planes that had taken off from bases in Thailand and had been unable to deliver their bombs, could dispose of them before returning to Thailand. Contamination and Casualties According to the Geneva-based Landmine and Cluster Munition Monitor , since 1964, there have been over 50,000 mine and ERW casualties in Laos, including over 29,000 people killed. An estimated 40% of victims are children. In 2012, the Lao government's Safe Path Forward Strategic Plan II set a target to reduce UXO-related casualties to 75 per year by 2020, from levels between 100-200 victims annually during the 2000s. The country has already met these goals: in 2017, the number of reported casualties was 41, including four killed. Cluster munitions have hampered economic development in the agricultural country. UXO contamination affects one-quarter of all Lao villages, and 22% of detonations occur through farming activities. Unexploded ordnance adversely affects not only agricultural production, but also mining, forestry, the development of hydropower projects, and the building of roads, schools, and clinics. Expenditures on demining efforts and medical treatment divert investment and resources from other areas and uses. Many injured UXO survivors lose the ability to be fully productive. According to the Lao government, there appears to be a significant correlation between the presence of UXO and the prevalence of poverty. Cleanup Efforts Lao PDR officials state that the country needs $50 million annually for ongoing UXO/ERW clearance, assistance to victims, and education, of which the Lao government contributes $15 million. International assistance comes from numerous sources, including Japan, the United States, and the United Nations Development Program (UNDP). The United States has contributed a total of $169 million for UXO clearance and related activities since 1995, with funding directed to international NGOs and contractors. That makes Laos the third largest recipient of conventional weapons destruction funding over that period, after Afghanistan and Iraq. In 2016, the United States announced a three-year, $90 million increase in assistance covering FY2016-FY2018. Half the amount, or $45 million, is aimed at conducting the first nationwide cluster munitions remnant survey, while the other half is aimed at clearance activities. Since the early 1990s, the U.S. Department of Defense (DOD) has been involved in training Lao personnel in demining techniques. U.S. UXO clearance and related humanitarian aid efforts, administered by the State Department (DOS), began in 1996. U.S. support also helped to establish the Lao National Demining Office, the UXO Lao National Training Center, and the Lao National Regulatory Authority. The United States finances the bulk of its mine clearance operations through the NADR foreign aid account. NADR demining programs constitute the largest U.S. assistance activity in Laos, which receives little U.S. development aid compared to other countries in the region. It has been channeled primarily to international nongovernmental organizations (NGOs), the UNDP's trust fund for UXO clearance, and the Lao National Unexploded Ordnance Program (UXO Lao). Laos also has received humanitarian assistance through the USAID Leahy War Victims Fund for prosthetics, orthotics, and rehabilitation ($1.4 million in 2011-2013). For many years in the 1990s and 2000s, UXO-related clearance programs were one of the primary areas of substantive cooperation between the United States and Laos. Some argue that such activity has helped foster bilateral ties with a country whose authoritarian government is deeply inward looking. When President Obama became the first U.S. President to visit Laos in 2016, announcing the $90 million UXO aid package, he said: "Given our history here, I believe that the United States has a moral obligation to help Laos heal. And even as we continue to deal with the past, our new partnership is focused on the future." The Situation in Vietnam War Legacy issuesâAgent Orange/dioxin contamination, MIAs, and UXOâplayed an important role in the reestablishment of diplomatic relations between the United States and Vietnam, and it led to the development of a comprehensive partnership between the two nations. Vietnam's voluntary effort to locate and return the remains of U.S. MIAs was a significant factor in the restoration of diplomatic relations. U.S. assistance to decontaminate Da Nang airport of Agent Orange/dioxin likely contributed to the two nations' move to a comprehensive partnership. While not as prominent, U.S. UXO assistance to Vietnam most likely has been a factor in establishing trust between the two governments. The UXO in Vietnam are remnants from conflicts spanning more than a century, potentially as far back as the Sino-French War (or Tonkin War) of 1884-1885 and as recent as the Cambodian-Vietnamese War (1975-1978) and the border conflicts between China and Vietnam from 1979 to 1991. According to one account, during Vietnam's conflicts with France and the United States (1945-1975), more than 15 million tons of explosives were deployedâfour times the amount used in World War II. It is generally presumed, however, that the majority of the UXO in Vietnam are from the Vietnam War, also known in Vietnam as "the Resistance War Against America" (1955-1975). Contamination and Casualties Estimates of the amount of UXO in Vietnam vary. According to one source, "at least 350,000 tons of live bombs and mines remain in Vietnam." Another source claims "around 800,000 tons of unexploded ordnance remains scattered across the country." Viewed in terms of land area, the Vietnamese government estimates that between 6.1 and 6.6 million hectares (23,500-25,500 square miles) of land in Vietnamâor 19% to 21% of the nationâis contaminated by UXO. An official Vietnamese survey started in 2004 and completed in 2014 estimated that 61,308 square kilometers (23,671 square miles) was contaminated with UXO. According to the survey, UXO is scattered across virtually all of the nation, but the province of Quang Tri, along the previous "demilitarized zone" (DMZ) between North and South Vietnam, is the most heavily contaminated (see Figure 3 ). Figures on the number of UXO casualties in Vietnam also vary. One source says, "No one really knows how many people have been injured or killed by UXO since the war ended, but the best estimates are at least 105,000, including 40,000 deaths." In its report on UXO casualties in Vietnam, however, the Landmine and Cluster Munition Monitor listed the casualty figures for 1975-2017 as 38,978 killed and 66,093 injured. For 2017 only, the Landmine and Cluster Munition Monitor reported eight deaths and six injured. A survey of UXO casualties determined that the three main circumstances under which people were killed or injured by UXO were (in order): scrap metal collection (31.2%); playing/tampering (27.6%); and cultivating or herding (20.3%). In some of Vietnam's poorer provinces, people proactively seek out and collect UXO in order to obtain scrap metal to sell to augment their income, despite the inherent danger. Cleanup Efforts On March 8, 2018, Vietnam's Ministry of National Defence (MND) established the Office of the Standing Agency of the National Steering Committee of the Settlement of Post-war Unexploded Ordnance and Toxic Chemical Consequences, or Office 701, to address the nation's UXO issue. Office 701 is responsible for working with individuals and organizations to decontaminate Vietnam of UXO to ensure public safety, clean the environment, and promote socio-economic development. Under a 2013 directive by the Prime Minister, the Vietnam National Mine Action Center (VNMAC) was established within the MND with responsibility for proposing policy, developing plans, and coordinating international cooperation for UXO clearance. The MND's Center for Bomb and Mine Disposal Technology (BOMICEN) is the central coordinating body for Vietnam's UXO clearance operations. In addition, Vietnam created a Mine Action Partnership Group (MAPG) to improve coordination of domestic and international UXO clearance operations. BOMICEN typically sets up project management teams (PMTs) that work with provincial or local officials to identify, survey, and decontaminate UXO. The PMTs usually interview local informants about possible UXO sites and then conduct field evaluations to determine if UXO is present and suitable for removal by Vietnam's Army Engineering Corps. The PMTs also collect information about the decontamination site and report back to BOMICON about the location and type of UXO removed. Besides the clearance operations directly conducted by Vietnam, several nations and international organizations conduct UXO removal projects in Vietnam, including the Danish Demining Group (DDG), the Mines Advisory Group (MAG), Norwegian People's Aid (NPA), and PeaceTrees Vietnam. In 2016, the Korea International Cooperation Agency (KOICA), in cooperation with VNMAC and the United Nations Development Programme (UNDP), initiated a $32 million, multi-year UXO project in the provinces of Binh Dinh and Quang Binh. The joint project began operations in March 2018 and is scheduled to end in December 2020. NGOs working in Vietnam report some issues in their collaboration with the MND, which has declared portions of contaminated provinces off limits for UXO surveying and decontamination. Many of these areas contain villages and towns inhabited by civilians. In addition, the MND has not been providing information about any UXO clearance efforts being conducted in these areas. The lack of information sharing has hindered efforts to establish a nationwide UXO database that is being used to refine UXO location and clearance techniques. U.S. UXO Assistance in Southeast Asia Since 1993, the United States has provided UXO and related assistance to Southeast Asia via several different channels, including the Center for Disease Control (CDC), the Department of Defense (DOD), the Department of State (DOS), and the U.S. Agency for International Development (USAID)(see Table 1 ). For all three countries covered by this report, most of the assistance has been provided by DOS through its Nonproliferation, Anti-terrorism, Demining and Related Programs/Conventional Weapons Destruction (NADR-CWD) account. USAID assistance to Cambodia, Laos, and Vietnam has consisted primarily of Leahy War Victims Fund programs for prostheses, physical rehabilitation, training, and employment. Laos, Cambodia, and Vietnam have been the largest recipients of U.S. conventional weapons destruction (CWD) funding in East Asia. In December 2013, the United States and Vietnam signed a Memorandum of Understanding on cooperation to overcome the effects of "wartime bomb, mine, and unexploded ordnance" in Vietnam. In their November 2017 joint statement, President Trump and President Tran Dai Quang "committed to cooperation in the removal of remnants of explosives from the war." U.S. Department of State and USAID Activities Department of State and USAID demining and related assistance support the work of international NGOs in Cambodia, Laos, and Vietnam. International NGOs work primarily with local NGOs in Cambodia and, to a greater extent, collaborate with government entities in Laos and Vietnam. The main areas of assistance are clearance, surveys, and medical assistance. In Cambodia, the Department of State and USAID support programs that collaborate with and train Cambodian organizations in clearance activities, conduct geographical surveys, help process explosive material retrieved from ERW, and provide mine risk education. In Laos, U.S. assistance includes clearance and survey efforts, medical and rehabilitation services, education and training assistance to victims and families, and mine risk education. In Vietnam, the United States provides mine clearance and survey support, capacity building programs, and medical assistance and vocational training for victims. U.S. Department of Defense (DOD) and UXO Remediation Activities DOD's role in remediating UXO in Southeast Asia falls under the category of "Support to Humanitarian Mine Action (HMA)." Chairman of the Joint Chiefs of Staff (CJCS) Instruction "Department of Defense Support to Humanitarian Mine Action, CJCSI 3207.0IC" dated September 28, 2018, covers DOD's responsibilities in this regard. DOD's stated policy is to relieve human suffering and the adverse effects of land mines and other explosive remnants of war (ERW) on noncombatants while advancing the Combatant Commanders' (CCDRs') theater campaign plan and U.S. national security objectives. The DOD HMA program assists nations plagued by land mines and ERW by executing "train-the-trainer" programs of instruction designed to develop indigenous capabilities for a wide range of HMA activities. It is important to note that U.S. Code restricts the extent to which U.S. military personnel and DOD civilian employees can actively participate in UXO activities as described in the following section: Exposure of USG Personnel to Explosive Hazards. By law, DOD personnel are restricted in the extent to which they may actively participate in ERW clearance and physical security and stockpile management (PSSM) operations during humanitarian and civic assistance. Under 10 U.S.C. 401(a)(1), Military Departments may carry out certain "humanitarian and civic assistance activities" in conjunction with authorized military operations of the armed forces in a foreign nation. 10 U.S.C. 407(e)(1) defines the term "humanitarian demining assistance" (as part of humanitarian and civic assistance activities) as "detection and clearance of land mines and other ERW, and includes the activities related to the furnishing of education, training, and technical assistance with respect to explosive safety, the detection and clearance of land mines and other ERW, and the disposal, demilitarization, physical security, and stockpile management of potentially dangerous stockpiles of explosive ordnance." However, under 10 U.S.C. 407(a)(3), members of the U.S. Armed Forces while providing humanitarian demining assistance shall not "engage in the physical detection, lifting, or destroying of land mines or other explosive remnants of war, or stockpiled conventional munitions (unless the member does so for the concurrent purpose of supporting a United States military operation)." Additionally, members of the U.S. Armed Forces shall not provide such humanitarian demining and civic assistance "as part of a military operation that does not involve the armed forces." Under DOD policy, the restrictions in 10 U.S.C. 407 also apply to DOD civilian personnel. In general terms, U.S. law restricts DOD to "train-the-trainer" type UXO remediation activities unless it is required as part of a U.S. military operation involving U.S. armed forces. U.S. Indo Pacific Command and UXO Remediation in Vietnam, Cambodia, and Laos72 U.S. Indo Pacific Command (USINDOPACOM) is responsible for U.S. military activities in Vietnam, Cambodia, and Laos. As part of USINDOPACOM's Theater Campaign Plan, selected UXO remediation activities for Vietnam, Cambodia, and Laos are briefly described in the following sections: Vietnam: USINDOPACOM has tasked U.S. Army Pacific (USARPAC) as the primary component responsible for land-based UXO operations and the Pacific Fleet (PACFLT) as the primary component responsible for underwater UXO operations in Vietnam. FY2018 accomplishments and FY2019 and FY2020 plans are said to include: FY2018 : Trained individuals on International Mine Action Standards (IMAS) Level I and II; Trained individuals on Explosive Ordnance Disposal (EOD) instructor development; Familiarized individuals on EOD equipment; Conducted medical first responder training; Trained individuals on medical instructor development; Trained individuals on underwater remote vehicle operations; and Trained individuals on ordnance identification. FY2019 : Continue training on International Mine Action Standards Level I; Train individuals on how to develop training lanes for demining; Exercise IMAS Level I concepts; Increase Vietnamese medical first responder force structure; and Continue EOD instructor development. FY2020 : Plan to train on IMAS Level II with qualified IMAS Level I students; Plan to enhance advanced medical-related technique training; Plan to train in demolition procedures; Plan to train in maritime UXO techniques; Plan to conduct mission planning and to conduct a full training exercise; and Plan to conduct instructor development. Cambodia: USINDOPACOM has tasked Marine Forces Pacific (MARFORPAC) to be responsible for land-based UXO operations in Cambodia. Plans for FY2019 through FY2021 include: FY2019 : Train in IMAS EOD Level I; Train on EOD instructor development; Familiarize students on EOD Level I equipment; Review medical first responder training; Train on medical instructor development; Train in ordnance identification; and Train in IMAS Demining Non-Technical Survey/Technical Survey (NTS/TS) techniques. FY2020 : Plan to continue to develop capacity with IMAS EOD Level I and II training; Plan to continue to build capacity with IMAS Demining Non-Technical Survey/Technical Survey techniques; If EOD Level I and II training successful, plan to initiate EOD Level III training in late FY2020; Plan to increase student knowledge of lane training development; Plan to exercise IMAS Level II concepts; Plan to increase Cambodian medical first responder force structure; and Plan to continue EOD instructor development. FY2021 : Plan to train on IMAS EOD Level II and EOD Level III with the qualified Level I and Level II students to increase their numbers; Plan to train on IMAS Demining NTS/TS with the qualified students to increase their numbers; Plan to enhance advanced medical-related techniques; Plan to train in demolition procedures; Plan to conduct mission planning and a full training exercise; and Plan to conduct instructor development events. Laos: USINDOPACOM has tasked Marine Forces Pacific (MARFORPAC) to be responsible for land-based UXO operations in Laos. Plans for FY2019 through FY2021 include: FY2019: Conduct training on IMAS EOD Level I; Conduct training on EOD instructor development; Conduct familiarization on EOD Level I equipment; Conduct a review of medical first responder training; Conduct medical instructor development training; and Conduct training on ordnance identification. FY2020 : Plan to continue to build capacity with training in IMAS EOD Level I and II; Plan to increase knowledge on lane training development; Plan to exercise IMAS Level II concepts; Plan to increase medical first responder force structure and knowledge; and Plan to continue EOD instructor development. FY2021 : Plan to train on IMAS EOD Level II with the qualified Level I and Level II students to increase their numbers; Plan to enhance advance medical-related techniques; Plan to train in demolition procedures; Plan to conduct mission planning and conduct a full training exercise; and Continue to conduct instructor development. Implications for Congress The U.S. government has been providing UXO-related assistance to Southeast Asia for over 25 years, with contributions amounting to over $400 million. Despite this sustained level of support, as well as the efforts of the governments of Cambodia, Laos, and Vietnam, it may take decades to clear these three nations of the known UXO contamination. These estimates, however, are based on incomplete information, as systematic nationwide UXO surveys have not been completed in either Cambodia or Laos. The Legacies of War Recognition and Unexploded Ordnance Removal Act ( H.R. 2097 ) would authorize $50 million each year for fiscal years 2020 to 2024 for address the UXO issue in Cambodia, Laos, and Vietnam. The legislation also would authorize the President to provide humanitarian assistance for developing national UXO surveys, UXO clearance, and support for capacity building, risk education and UXO victims assistance in each nation. It would require the President to provide an annual briefing on related activities to the House Committee on Appropriations, the House Committee on Foreign Affairs, the Senate Committee on Appropriations, and the Senate Committee on Foreign Relations. Southeast Asia's ongoing UXO challenge may present a number of issues for Congress to consider and evaluate. Among those issues are F undin g levels âIt is uncertain how much money it would take to decontaminate all three nations or provide adequate assistance to their UXO victims. Given this uncertainty, is the level of U.S. assistance being provided to Cambodia, Laos, and Vietnam to conduct humanitarian demining projects adequate to significantly reduce the UXO casualty risk in a reasonable time period? In addition, is the recent distribution of funding across the three nations equitable given their relative degrees of UXO contamination and their internal ability to finance demining projects? Coordination across agencies âIs there appropriate coordination across the U.S. agenciesâthe Department of Defense, the Department of State, and USAIDâin providing demining assistance in Southeast Asia? Are these agencies utilizing the appropriated funds efficiently and effectively? Focus on clearance âMost of the appropriated funds have been for humanitarian demining projects and technical support, with less funding for assistance to UXO victims. The focus on clearance, rather than assistance on UXO victims, may in part be due to a concern about possible post-conflict liability issues. In light of past practices, should the U.S. government increase its support for UXO victims in Cambodia, Laos, and Vietnam beyond those being currently provided via the Leahy War Victims Fund? Implications for bilateral relations âHas the amount and types of U.S. UXO assistance to Cambodia, Laos, and Vietnam been a significant factor in bilateral relations with each of those nations? In Vietnam, work on war legacy issues formed an early part of building normalized relations in the post-War periodâties that have broadened into closer strategic and economic linkages. In Cambodia and Laos, UXO-related assistance has been one of the broadest areas for substantive cooperation between the United States and two countries with which the United States has had relatively cool relations. Would a change in the amount or type of assistance provided be beneficial to U.S. relations with Cambodia, Laos, or Vietnam? Should the U.S. government use UXO assistance to pressure other entities, such as Vietnam's MND, to be more cooperative in the UXO decontamination effort? UXO p revention âThe Department of Defense has implemented a policy that is to eventually replace all cluster munitions with ones whose failure rate is below 1%. Should the U.S. government undertake additional efforts to reduce the amount of post-conflict UXO from U.S. munitions, including prohibiting the use of U.S. funding for certain types of submunitions that may leave UXO? Given DOD's current views and policies on cluster munitions and landmines, does this preclude the United States from joining the 2010 Convention on Cluster Munitions or 1999 Ottawa Convention on Landmines? Precedents and lessons for other parts of the world âAre there lessons that can be drawn from U.S. assistance for UXO clearance and victim relief in Southeast Asia that may be applicable to programs elsewhere in the world, including Afghanistan and Iraq? Have the levels of assistance the United States has offered in Southeast Asia signaled a precedent for other parts of the world? During the 115 th Congress, legislation was introduced that would have addressed some of these general issues associated with UXO, though none directly addressed the current situation in Southeast Asia. The Unexploded Ordnance Removal Act ( H.R. 5883 ) would have required the Secretary of Defense, in concurrence with the Secretary of State, to develop and implement a strategy for removing UXO from Iraq and Syria. The Cluster Munitions Civilian Protection Act of 2017 ( H.R. 1975 and S. 897 ) would have prohibited the obligation or expenditure of U.S. funds for cluster munitions if, after arming, the unexploded ordnance rate for the submunitions was more than 1%. Summary:	null	96	43,169	43,171	43,171	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Overview The remnants of the Vietnam War (1963-1975) and other regional conflicts have left mainland Southeast Asia as a region heavily contaminated with unexploded ordnance, or UXO. More than 45 years after the United States ceased its extensive bombing of Cambodia, Laos, and Vietnam, hundreds of civilians are still injured or killed each year by UXO from those bombing missions or by landmines laid in conflicts be tween Cambodia and Vietnam (1975-1978), China and Vietnam (1979-1990) and during the Cambodian civil war (1978-1991). While comprehensive surveys are incomplete, it is estimated that more than 20% of the land in Cambodia, Laos, and Vietnam are contaminated by UXO. Over more than 25 years, Congress has appropriated more than $400 million to assist Cambodia, Laos, and Vietnam in clearing their land of UXO. More than 77% of the assistance has been provided via programs funded by the Department of State. In addition, the United States has provided treatment to those individuals maimed by UXO through U.S. Agency for International Development (USAID) programs and the Leahy War Victims Fund. Despite ongoing efforts by the three countries, the United States, and other international donors, it reportedly could take 100 years or more, at the current pace, to clear Cambodia, Laos, and Vietnam of UXO. During that time period, more people will likely be killed or injured by UXO. In addition, extensive areas of the three nations will continue to be unavailable for agriculture, industry, or habitation, hindering the economic development of those three nations. In 2016, President Obama pledged $90 million over a three-year period for UXO decontamination programs in Laosâan amount nearly equal to the total of U.S. UXO assistance to that nation over the previous 20 years. The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provides $196.5 million globally for "conventional weapons destruction," including $159.0 million for "humanitarian demining," under the Department of State's International Security Assistance programs. Of the humanitarian demining funds, $3.85 million is appropriated for Cambodia, $30.0 million for Laos, and $15.0 million for Vietnam. The act also provides $13.5 million for global health and rehabilitation programs under the Leahy War Victims Fund. Moving forward, the 116 th Congress will have an opportunity to consider what additional efforts, if any, the U.S. government should undertake to address the war legacy issue of UXO in mainland Southeast Asia in terms of the decontamination of the region and the provision of medical support or assistance to UXO victims. Beyond the immediate assistance such UXO-related programs would provide to Cambodia, Laos, and Vietnam, U.S. aid on this war legacy issue may also foster better bilateral ties to those nations. For example, some observers view U.S. assistance to Vietnam for the war legacy issue of Agent Orange/dioxin contamination as playing an important role in improving bilateral relations. Background on Unexploded Ordnance What Is Unexploded Ordnance (UXO)? Unexploded ordnance (UXO) is defined as military ammunition or explosive ordnance which has failed to function as intended. UXO is also sometimes referred to as Explosive Remnants of War (ERW) or "duds" because of their failure to explode or function properly. UXO includes mines, artillery shells, mortar rounds, hand or rocket-propelled grenades, and rocket or missile warheads employed by ground forces (see Figure 1 ). Aerial delivered bombs, rockets, missiles, and scatterable mines that fail to function as intended are also classified as UXO. While many of these weapons employ unitary warheads, some weaponsâprimarily certain artillery shells, rocket and missile warheads and aerial bombsâemploy cluster munitions, which disperse a number of smaller munitions as part of their explosive effect. Often times, these submunitions fail to function as intended. In addition, abandoned or lost munitions that have not detonated are also classified as UXO. The probability of UXO detonating is highly unpredictable; it depends on whether or not the munition has been fired, the level of corrosion or degradation, and the specific arming and fusing mechanisms of the device. "Similar items may respond very differently to the same actionâone may be moved without effect, while another may detonate. Some items may be moved repeatedly before detonating and others may not detonate at all." In all cases, UXO poses a danger to both combatants and unaware and unprotected civilians. Military Use Military munitions are used in a variety of ways. Some are used in direct force-on-force combat against troops, combat vehicles, and structures. Others, such as emplaced anti-personnel and anti-vehicle mines or scatterable mines, can be used to attack targets, deny enemy use of key terrain, or establish barriers to impede or influence enemy movement. Cluster munitions can either explode on contact once dispensed or can remain dormant on the ground until triggered by human or vehicular contact. The military utility of cluster weapons is that they can create large areas of destruction, meaning fewer weapons systems and munitions are needed to attack targets. Mines and Cluster Munitions Two particular classes of ordnanceâmines and cluster munitionsâhave received a great deal of attention. Emplaced mines by their very nature pose a particular threat because they are often either buried or hidden and, unless their locations are recorded or some type of warning signs are posted, they can become easily forgotten or abandoned as the battlefield shifts over time. Cluster munitions are dispersed over an area and are generally smaller than unitary warheads, which can make them difficult to readily identify (see Figure 2 ). Since the conclusion of the Vietnam War, many of the newer mines and cluster munitions have a self-destruct or disarming capability. However, as long as their explosive charge remains viable, they pose a hazard to people. Both mines and cluster munitions have been subject to international protocols to limit or ban their development, transfer, and use. The 1999 Ottawa Convention "prohibits the use, stockpiling, production, and transfer of anti-personnel landmines (APLs). It requires states to destroy their stockpiled APLs within four years and eliminate all APL holdings, including mines currently planted in the soil, within 10 years." The 2010 Convention on Cluster Munitions prohibits all use, stockpiling, production and transfer of cluster munitions. The United States has refused to sign either convention, citing the military necessity of these munitions. The United States has, however, been a States Party to the Convention on the Use of Certain Conventional Weapons (CCW) since 1995, which "aims to protect military troops from inhumane injuries and prevent noncombatants from accidentally being wounded or killed by certain types of arms." In 2009, the United States ratified Protocol V of the CCW, Explosive Remnants of War. Protocol V "covers munitions, such as artillery shells, grenades, and gravity bombs, that fail to explode as intended, and any unused explosives left behind and uncontrolled by armed forces." Under Protocol V "the government controlling an area with explosive remnants of war is responsible for clearing such munitions. However, that government may ask for technical or financial assistance from others, including any party responsible for putting the munitions in place originally, to complete the task. No state-party is obligated to render assistance." The United States has undertaken a variety of initiativesâincluding mandating changes to munitions design and adopting federal safeguards and policy regulating their usageâto help limit the potential hazards posed to noncombatants by these UXO. U.S. Policy on Cluster Munitions On June 19, 2008, then-Secretary of Defense Robert Gates issued a new policy on the use of cluster munitions. The policy stated that "[c]luster munitions are legitimate weapons with clear military utility," but it also recognized "the need to minimize the unintended harm to civilians and civilian infrastructure associated with unexploded ordnance from cluster munitions." To that end, the policy mandated that after 2018, "the Military Departments and Combatant Commands will only employ cluster munitions containing submunitions that, after arming, do not result in more than 1% unexploded ordnance (UXO) across the range of intended operational environments." On November 30, 2017, then-Deputy Secretary of Defense Patrick Shanahan issued a revised policy on cluster munitions. The revised policy reverses the 2008 policy that established an unwaiverable requirement that cluster munitions used after 2018 must leave less than 1% of unexploded submunitions on the battlefield. Under the new policy, combatant commanders can use cluster munitions that do not meet the 1% or less unexploded submunitions standard in extreme situations to meet immediate warfighting demands. Furthermore, the new policy does not establish a deadline to replace cluster munitions exceeding the 1% rate, and these munitions are to be removed only after new munitions that meet the 1% or less unexploded submunitions standard are fielded in sufficient quantities to meet combatant commander requirements. However, the new DOD policy stipulates that the Department "will only procure cluster munitions containing submunitions or submunition warheads" meeting the 2008 UXO requirement or possessing "advanced features to minimize the risks posed by unexploded submunitions." UXO in Southeast Asia Overview Although UXO in Southeast Asia can date back to World War II, the majority of the hazard is attributed to the Vietnam War. While an undetermined amount of UXO associated with the Vietnam War was from ground combat and emplaced mines, an appreciable portion of UXO is attributed to the air war waged by the United States from 1962 to 1973, considered by some to be one of the most intense in the history of warfare. One study notes the United States dropped a million tons of bombs on North Vietnam. Three million more tons fell on Laos and Cambodiaâsupposedly "neutral" countries in the conflict. Four million tons fell on South VietnamâAmerica's ally in the war against communist aggression. When the last raid by B-52s over Cambodia on August 15, 1973, culminated American bombing in Southeast Asia, the United States had dropped more than 8 million tons of bombs in 9 years. Less than 2 years later, Cambodia, Laos, and South Vietnam were communist countries. The U.S. State Department in 2014 characterized the problem by country. Cambodia: Nearly three decades of armed conflict left Cambodia severely contaminated with landmines and unexploded ordnance (UXO). The Khmer Rouge, the Royal Cambodian Armed Forces (RCAF), the Vietnamese military, and, to a lesser extent, the Thai army, laid extensive minefields during the Indochina wars. These minefields are concentrated in western Cambodia, especially in the dense "K-5 mine belt" along the border with Thailand, laid by Vietnamese forces during the 1980s. UXOâmostly from U.S. air and artillery strikes during the Vietnam War and land battles fought along the border with Vietnamâcontaminates areas in eastern and northeastern Cambodia. While the full extent of contamination is unknown, the Landmine and Cluster Munition Monitor reports that a baseline survey completed in 2012 of Cambodia's 124 mine-affected districts found a total of 1,915 square kilometers (739 square miles) of contaminated land. Laos: Laos is the most heavily bombed country per capita in the world as a result of the Indochina wars of the 1960s and 1970s. While landmines were laid in Laos during this period, UXO, including cluster munitions remnants (called "bombies" in Laos), represents a far greater threat to the population and account for the bulk of contamination. UXO, mostly of U.S. origin, remains in the majority of the country's 18 provinces. Vietnam: UXO contaminates virtually all of Vietnam as a result of 30 years of conflict extending from World War II through the Vietnam War. The most heavily contaminated provinces are in the central region and along the former demilitarized zone (DMZ) that divided North Vietnam and South Vietnam. Parts of southern Vietnam and areas around the border with China also remain contaminated with UXO. The Situation in Cambodia The Kingdom of Cambodia is among the world's most UXO-afflicted countries, contaminated with cluster munitions, landmines, and other undetonated weapons. U.S. bombing of northeastern Cambodia during the Vietnam War, the Vietnamese invasion in 1979, and civil wars during 1970s and 1980s all contributed to the problem of unexploded ordnance. In 1969, the United States launched a four-year carpet-bombing campaign on Cambodia, dropping 2.7 million tons of ordnance, including 80,000 cluster bombs containing 26 million submunitions or bomblets. Up to one-quarter of the cluster bomblets failed to explode, according to some estimates. In addition, the Vietnamese army mined the Cambodia-Thai border as it invaded the country and took control from the Khmer Rouge in 1979. The Vietnamese military, Vietnam-backed Cambodian forces, the Khmer Rouge, and Royalist forces reportedly all deployed landmines during the 1979-1989 civil war period. Cambodian Prime Minister Hun Sen occasionally has referred to the U.S. bombing of Cambodia, which occurred between 1969 and 1973, when criticizing the United States; however, the historical event has not been a major issue in recent U.S.-Cambodian relations. Contamination and Casualties There have been over 64,700 UXO casualties in Cambodia since 1979, including over 19,700 deaths. The Cambodia Mine/ERW Victim Information System (CMVIS) has recorded an overall trend of significant decreases in the number of annual casualties: 58 in 2017 compared to 111 in 2015, 186 in 2012 and 286 in 2010. Despite progress, the migration of poor Cambodians to the northwestern provinces bordering Thailand, one of the most heavily mined areas in the world, has contributed to continued casualties. Cambodia, with 25,000 UXO-related amputees, has the highest number of amputees per capita in the world. The economic costs of UXO include obstacles to infrastructure development, land unsuitable for agricultural purposes, and disruptions to irrigation and drinking water supplies. Open Development Cambodia, a website devoted to development-related data, reports that since the early 1990s, about 580 square miles (1,500 square kilometers) of land has been cleared of UXO. Â Estimates of the amount of land still containing UXO vary. According to some reports, about 50% of contaminated land has been cleared, and an estimated 630 square miles (1,640 square kilometers) of land still contain UXO. Many of the remaining areas are the most densely contaminated, including 21 northwestern districts along the border with Thailand that contain anti-personnel mines laid by the Vietnamese military and that account for the majority of mine casualties. Cleanup Efforts Between 1993 and 2017, the U.S. government contributed over $133.6 million for UXO removal and disposal, related educational efforts, and survivor assistance programs in Cambodia. These activities are carried out largely by U.S. and international nongovernmental organizations (NGOs), in collaboration with the Cambodian Mine Action Center, a Cambodian NGO, and the Cambodian government. USAID's Leahy War Victims Fund has supported programs to help provide medical and rehabilitation services and prosthetics to Cambodian victims of UXO. Nonproliferation, Anti-terrorism, Demining and Related Programs (NADR) funding for demining activities was $5.5 million in both 2015 and 2016, $4.2 in 2017, and $2.9 million in 2018. Global donors contributed over $132 million between 2013 and 2017, mostly for clearance efforts. In 2017, the largest contributors of demining and related assistance were the United States, United Kingdom, Australia, Japan, and Germany, providing approximately $10.6 million in total. In 2018, the Cambodian government and Cambodian Mine Action and Victim Assistance Authority (CMAA), a government agency, launched the National Mine Action Strategy (NMAS) for 2018-2025. The goal of removing UXO from all contaminated areas by 2025 would require the clearance of 110 square kilometers per year at a cost of about $400 million. The NMAS estimated that at the current rate of progress, however, Cambodia would need a little over 10 years to complete clearance of all known mined areas. Some experts are concerned that declining international assistance could jeopardize clearance goals. In 2017, total international demining support to Cambodia decreased by 61%, largely due to lower contributions from Australia and Japan. The Situation in Laos From 1964 through 1973, the United States military reportedly flew 580,000 bombing runs and dropped over 2 million tons of cluster munitions, including over 270 million cluster bombs, on the small land-locked country. The total was more than the amount dropped on Germany and Japan combined in World War II. An estimated one-third of these munitions failed to explode. The Lao government claims that up to 75-80 million submunitions or bomblets released from the cluster bombs remain in over one-third of the country's area. Military conflicts during the French colonial period and the Laotian Civil War during the 1960s and 1970s have also contributed to the problem of UXO/ERW. The U.S. bombing campaign in Laos was designed to interdict North Vietnamese supply lines that ran through Laos. The bombing campaign also supported Lao government forces fighting against communist rebels (Pathet Lao) and their North Vietnamese allies. Cluster munitions were considered the "weapon of choice" in Laos because they could penetrate the jungle canopy, cover large areas, and successfully attack convoys and troop concentrations hidden by the trees. The most heavily bombed areas in Laos were the northeastern and southern provinces, although UXO can be found in 14 of the country's 17 provinces. The bombings in the northeast were intended to deny territory, particularly the Plain of Jars, to Pathet Lao and North Vietnamese forces and, in the south, to sever the Ho Chi Minh Trail, which crossed the border into eastern Laos. The northeastern part of Laos was also used as a "free drop zone" where planes that had taken off from bases in Thailand and had been unable to deliver their bombs, could dispose of them before returning to Thailand. Contamination and Casualties According to the Geneva-based Landmine and Cluster Munition Monitor , since 1964, there have been over 50,000 mine and ERW casualties in Laos, including over 29,000 people killed. An estimated 40% of victims are children. In 2012, the Lao government's Safe Path Forward Strategic Plan II set a target to reduce UXO-related casualties to 75 per year by 2020, from levels between 100-200 victims annually during the 2000s. The country has already met these goals: in 2017, the number of reported casualties was 41, including four killed. Cluster munitions have hampered economic development in the agricultural country. UXO contamination affects one-quarter of all Lao villages, and 22% of detonations occur through farming activities. Unexploded ordnance adversely affects not only agricultural production, but also mining, forestry, the development of hydropower projects, and the building of roads, schools, and clinics. Expenditures on demining efforts and medical treatment divert investment and resources from other areas and uses. Many injured UXO survivors lose the ability to be fully productive. According to the Lao government, there appears to be a significant correlation between the presence of UXO and the prevalence of poverty. Cleanup Efforts Lao PDR officials state that the country needs $50 million annually for ongoing UXO/ERW clearance, assistance to victims, and education, of which the Lao government contributes $15 million. International assistance comes from numerous sources, including Japan, the United States, and the United Nations Development Program (UNDP). The United States has contributed a total of $169 million for UXO clearance and related activities since 1995, with funding directed to international NGOs and contractors. That makes Laos the third largest recipient of conventional weapons destruction funding over that period, after Afghanistan and Iraq. In 2016, the United States announced a three-year, $90 million increase in assistance covering FY2016-FY2018. Half the amount, or $45 million, is aimed at conducting the first nationwide cluster munitions remnant survey, while the other half is aimed at clearance activities. Since the early 1990s, the U.S. Department of Defense (DOD) has been involved in training Lao personnel in demining techniques. U.S. UXO clearance and related humanitarian aid efforts, administered by the State Department (DOS), began in 1996. U.S. support also helped to establish the Lao National Demining Office, the UXO Lao National Training Center, and the Lao National Regulatory Authority. The United States finances the bulk of its mine clearance operations through the NADR foreign aid account. NADR demining programs constitute the largest U.S. assistance activity in Laos, which receives little U.S. development aid compared to other countries in the region. It has been channeled primarily to international nongovernmental organizations (NGOs), the UNDP's trust fund for UXO clearance, and the Lao National Unexploded Ordnance Program (UXO Lao). Laos also has received humanitarian assistance through the USAID Leahy War Victims Fund for prosthetics, orthotics, and rehabilitation ($1.4 million in 2011-2013). For many years in the 1990s and 2000s, UXO-related clearance programs were one of the primary areas of substantive cooperation between the United States and Laos. Some argue that such activity has helped foster bilateral ties with a country whose authoritarian government is deeply inward looking. When President Obama became the first U.S. President to visit Laos in 2016, announcing the $90 million UXO aid package, he said: "Given our history here, I believe that the United States has a moral obligation to help Laos heal. And even as we continue to deal with the past, our new partnership is focused on the future." The Situation in Vietnam War Legacy issuesâAgent Orange/dioxin contamination, MIAs, and UXOâplayed an important role in the reestablishment of diplomatic relations between the United States and Vietnam, and it led to the development of a comprehensive partnership between the two nations. Vietnam's voluntary effort to locate and return the remains of U.S. MIAs was a significant factor in the restoration of diplomatic relations. U.S. assistance to decontaminate Da Nang airport of Agent Orange/dioxin likely contributed to the two nations' move to a comprehensive partnership. While not as prominent, U.S. UXO assistance to Vietnam most likely has been a factor in establishing trust between the two governments. The UXO in Vietnam are remnants from conflicts spanning more than a century, potentially as far back as the Sino-French War (or Tonkin War) of 1884-1885 and as recent as the Cambodian-Vietnamese War (1975-1978) and the border conflicts between China and Vietnam from 1979 to 1991. According to one account, during Vietnam's conflicts with France and the United States (1945-1975), more than 15 million tons of explosives were deployedâfour times the amount used in World War II. It is generally presumed, however, that the majority of the UXO in Vietnam are from the Vietnam War, also known in Vietnam as "the Resistance War Against America" (1955-1975). Contamination and Casualties Estimates of the amount of UXO in Vietnam vary. According to one source, "at least 350,000 tons of live bombs and mines remain in Vietnam." Another source claims "around 800,000 tons of unexploded ordnance remains scattered across the country." Viewed in terms of land area, the Vietnamese government estimates that between 6.1 and 6.6 million hectares (23,500-25,500 square miles) of land in Vietnamâor 19% to 21% of the nationâis contaminated by UXO. An official Vietnamese survey started in 2004 and completed in 2014 estimated that 61,308 square kilometers (23,671 square miles) was contaminated with UXO. According to the survey, UXO is scattered across virtually all of the nation, but the province of Quang Tri, along the previous "demilitarized zone" (DMZ) between North and South Vietnam, is the most heavily contaminated (see Figure 3 ). Figures on the number of UXO casualties in Vietnam also vary. One source says, "No one really knows how many people have been injured or killed by UXO since the war ended, but the best estimates are at least 105,000, including 40,000 deaths." In its report on UXO casualties in Vietnam, however, the Landmine and Cluster Munition Monitor listed the casualty figures for 1975-2017 as 38,978 killed and 66,093 injured. For 2017 only, the Landmine and Cluster Munition Monitor reported eight deaths and six injured. A survey of UXO casualties determined that the three main circumstances under which people were killed or injured by UXO were (in order): scrap metal collection (31.2%); playing/tampering (27.6%); and cultivating or herding (20.3%). In some of Vietnam's poorer provinces, people proactively seek out and collect UXO in order to obtain scrap metal to sell to augment their income, despite the inherent danger. Cleanup Efforts On March 8, 2018, Vietnam's Ministry of National Defence (MND) established the Office of the Standing Agency of the National Steering Committee of the Settlement of Post-war Unexploded Ordnance and Toxic Chemical Consequences, or Office 701, to address the nation's UXO issue. Office 701 is responsible for working with individuals and organizations to decontaminate Vietnam of UXO to ensure public safety, clean the environment, and promote socio-economic development. Under a 2013 directive by the Prime Minister, the Vietnam National Mine Action Center (VNMAC) was established within the MND with responsibility for proposing policy, developing plans, and coordinating international cooperation for UXO clearance. The MND's Center for Bomb and Mine Disposal Technology (BOMICEN) is the central coordinating body for Vietnam's UXO clearance operations. In addition, Vietnam created a Mine Action Partnership Group (MAPG) to improve coordination of domestic and international UXO clearance operations. BOMICEN typically sets up project management teams (PMTs) that work with provincial or local officials to identify, survey, and decontaminate UXO. The PMTs usually interview local informants about possible UXO sites and then conduct field evaluations to determine if UXO is present and suitable for removal by Vietnam's Army Engineering Corps. The PMTs also collect information about the decontamination site and report back to BOMICON about the location and type of UXO removed. Besides the clearance operations directly conducted by Vietnam, several nations and international organizations conduct UXO removal projects in Vietnam, including the Danish Demining Group (DDG), the Mines Advisory Group (MAG), Norwegian People's Aid (NPA), and PeaceTrees Vietnam. In 2016, the Korea International Cooperation Agency (KOICA), in cooperation with VNMAC and the United Nations Development Programme (UNDP), initiated a $32 million, multi-year UXO project in the provinces of Binh Dinh and Quang Binh. The joint project began operations in March 2018 and is scheduled to end in December 2020. NGOs working in Vietnam report some issues in their collaboration with the MND, which has declared portions of contaminated provinces off limits for UXO surveying and decontamination. Many of these areas contain villages and towns inhabited by civilians. In addition, the MND has not been providing information about any UXO clearance efforts being conducted in these areas. The lack of information sharing has hindered efforts to establish a nationwide UXO database that is being used to refine UXO location and clearance techniques. U.S. UXO Assistance in Southeast Asia Since 1993, the United States has provided UXO and related assistance to Southeast Asia via several different channels, including the Center for Disease Control (CDC), the Department of Defense (DOD), the Department of State (DOS), and the U.S. Agency for International Development (USAID)(see Table 1 ). For all three countries covered by this report, most of the assistance has been provided by DOS through its Nonproliferation, Anti-terrorism, Demining and Related Programs/Conventional Weapons Destruction (NADR-CWD) account. USAID assistance to Cambodia, Laos, and Vietnam has consisted primarily of Leahy War Victims Fund programs for prostheses, physical rehabilitation, training, and employment. Laos, Cambodia, and Vietnam have been the largest recipients of U.S. conventional weapons destruction (CWD) funding in East Asia. In December 2013, the United States and Vietnam signed a Memorandum of Understanding on cooperation to overcome the effects of "wartime bomb, mine, and unexploded ordnance" in Vietnam. In their November 2017 joint statement, President Trump and President Tran Dai Quang "committed to cooperation in the removal of remnants of explosives from the war." U.S. Department of State and USAID Activities Department of State and USAID demining and related assistance support the work of international NGOs in Cambodia, Laos, and Vietnam. International NGOs work primarily with local NGOs in Cambodia and, to a greater extent, collaborate with government entities in Laos and Vietnam. The main areas of assistance are clearance, surveys, and medical assistance. In Cambodia, the Department of State and USAID support programs that collaborate with and train Cambodian organizations in clearance activities, conduct geographical surveys, help process explosive material retrieved from ERW, and provide mine risk education. In Laos, U.S. assistance includes clearance and survey efforts, medical and rehabilitation services, education and training assistance to victims and families, and mine risk education. In Vietnam, the United States provides mine clearance and survey support, capacity building programs, and medical assistance and vocational training for victims. U.S. Department of Defense (DOD) and UXO Remediation Activities DOD's role in remediating UXO in Southeast Asia falls under the category of "Support to Humanitarian Mine Action (HMA)." Chairman of the Joint Chiefs of Staff (CJCS) Instruction "Department of Defense Support to Humanitarian Mine Action, CJCSI 3207.0IC" dated September 28, 2018, covers DOD's responsibilities in this regard. DOD's stated policy is to relieve human suffering and the adverse effects of land mines and other explosive remnants of war (ERW) on noncombatants while advancing the Combatant Commanders' (CCDRs') theater campaign plan and U.S. national security objectives. The DOD HMA program assists nations plagued by land mines and ERW by executing "train-the-trainer" programs of instruction designed to develop indigenous capabilities for a wide range of HMA activities. It is important to note that U.S. Code restricts the extent to which U.S. military personnel and DOD civilian employees can actively participate in UXO activities as described in the following section: Exposure of USG Personnel to Explosive Hazards. By law, DOD personnel are restricted in the extent to which they may actively participate in ERW clearance and physical security and stockpile management (PSSM) operations during humanitarian and civic assistance. Under 10 U.S.C. 401(a)(1), Military Departments may carry out certain "humanitarian and civic assistance activities" in conjunction with authorized military operations of the armed forces in a foreign nation. 10 U.S.C. 407(e)(1) defines the term "humanitarian demining assistance" (as part of humanitarian and civic assistance activities) as "detection and clearance of land mines and other ERW, and includes the activities related to the furnishing of education, training, and technical assistance with respect to explosive safety, the detection and clearance of land mines and other ERW, and the disposal, demilitarization, physical security, and stockpile management of potentially dangerous stockpiles of explosive ordnance." However, under 10 U.S.C. 407(a)(3), members of the U.S. Armed Forces while providing humanitarian demining assistance shall not "engage in the physical detection, lifting, or destroying of land mines or other explosive remnants of war, or stockpiled conventional munitions (unless the member does so for the concurrent purpose of supporting a United States military operation)." Additionally, members of the U.S. Armed Forces shall not provide such humanitarian demining and civic assistance "as part of a military operation that does not involve the armed forces." Under DOD policy, the restrictions in 10 U.S.C. 407 also apply to DOD civilian personnel. In general terms, U.S. law restricts DOD to "train-the-trainer" type UXO remediation activities unless it is required as part of a U.S. military operation involving U.S. armed forces. U.S. Indo Pacific Command and UXO Remediation in Vietnam, Cambodia, and Laos72 U.S. Indo Pacific Command (USINDOPACOM) is responsible for U.S. military activities in Vietnam, Cambodia, and Laos. As part of USINDOPACOM's Theater Campaign Plan, selected UXO remediation activities for Vietnam, Cambodia, and Laos are briefly described in the following sections: Vietnam: USINDOPACOM has tasked U.S. Army Pacific (USARPAC) as the primary component responsible for land-based UXO operations and the Pacific Fleet (PACFLT) as the primary component responsible for underwater UXO operations in Vietnam. FY2018 accomplishments and FY2019 and FY2020 plans are said to include: FY2018 : Trained individuals on International Mine Action Standards (IMAS) Level I and II; Trained individuals on Explosive Ordnance Disposal (EOD) instructor development; Familiarized individuals on EOD equipment; Conducted medical first responder training; Trained individuals on medical instructor development; Trained individuals on underwater remote vehicle operations; and Trained individuals on ordnance identification. FY2019 : Continue training on International Mine Action Standards Level I; Train individuals on how to develop training lanes for demining; Exercise IMAS Level I concepts; Increase Vietnamese medical first responder force structure; and Continue EOD instructor development. FY2020 : Plan to train on IMAS Level II with qualified IMAS Level I students; Plan to enhance advanced medical-related technique training; Plan to train in demolition procedures; Plan to train in maritime UXO techniques; Plan to conduct mission planning and to conduct a full training exercise; and Plan to conduct instructor development. Cambodia: USINDOPACOM has tasked Marine Forces Pacific (MARFORPAC) to be responsible for land-based UXO operations in Cambodia. Plans for FY2019 through FY2021 include: FY2019 : Train in IMAS EOD Level I; Train on EOD instructor development; Familiarize students on EOD Level I equipment; Review medical first responder training; Train on medical instructor development; Train in ordnance identification; and Train in IMAS Demining Non-Technical Survey/Technical Survey (NTS/TS) techniques. FY2020 : Plan to continue to develop capacity with IMAS EOD Level I and II training; Plan to continue to build capacity with IMAS Demining Non-Technical Survey/Technical Survey techniques; If EOD Level I and II training successful, plan to initiate EOD Level III training in late FY2020; Plan to increase student knowledge of lane training development; Plan to exercise IMAS Level II concepts; Plan to increase Cambodian medical first responder force structure; and Plan to continue EOD instructor development. FY2021 : Plan to train on IMAS EOD Level II and EOD Level III with the qualified Level I and Level II students to increase their numbers; Plan to train on IMAS Demining NTS/TS with the qualified students to increase their numbers; Plan to enhance advanced medical-related techniques; Plan to train in demolition procedures; Plan to conduct mission planning and a full training exercise; and Plan to conduct instructor development events. Laos: USINDOPACOM has tasked Marine Forces Pacific (MARFORPAC) to be responsible for land-based UXO operations in Laos. Plans for FY2019 through FY2021 include: FY2019: Conduct training on IMAS EOD Level I; Conduct training on EOD instructor development; Conduct familiarization on EOD Level I equipment; Conduct a review of medical first responder training; Conduct medical instructor development training; and Conduct training on ordnance identification. FY2020 : Plan to continue to build capacity with training in IMAS EOD Level I and II; Plan to increase knowledge on lane training development; Plan to exercise IMAS Level II concepts; Plan to increase medical first responder force structure and knowledge; and Plan to continue EOD instructor development. FY2021 : Plan to train on IMAS EOD Level II with the qualified Level I and Level II students to increase their numbers; Plan to enhance advance medical-related techniques; Plan to train in demolition procedures; Plan to conduct mission planning and conduct a full training exercise; and Continue to conduct instructor development. Implications for Congress The U.S. government has been providing UXO-related assistance to Southeast Asia for over 25 years, with contributions amounting to over $400 million. Despite this sustained level of support, as well as the efforts of the governments of Cambodia, Laos, and Vietnam, it may take decades to clear these three nations of the known UXO contamination. These estimates, however, are based on incomplete information, as systematic nationwide UXO surveys have not been completed in either Cambodia or Laos. The Legacies of War Recognition and Unexploded Ordnance Removal Act ( H.R. 2097 ) would authorize $50 million each year for fiscal years 2020 to 2024 for address the UXO issue in Cambodia, Laos, and Vietnam. The legislation also would authorize the President to provide humanitarian assistance for developing national UXO surveys, UXO clearance, and support for capacity building, risk education and UXO victims assistance in each nation. It would require the President to provide an annual briefing on related activities to the House Committee on Appropriations, the House Committee on Foreign Affairs, the Senate Committee on Appropriations, and the Senate Committee on Foreign Relations. Southeast Asia's ongoing UXO challenge may present a number of issues for Congress to consider and evaluate. Among those issues are F undin g levels âIt is uncertain how much money it would take to decontaminate all three nations or provide adequate assistance to their UXO victims. Given this uncertainty, is the level of U.S. assistance being provided to Cambodia, Laos, and Vietnam to conduct humanitarian demining projects adequate to significantly reduce the UXO casualty risk in a reasonable time period? In addition, is the recent distribution of funding across the three nations equitable given their relative degrees of UXO contamination and their internal ability to finance demining projects? Coordination across agencies âIs there appropriate coordination across the U.S. agenciesâthe Department of Defense, the Department of State, and USAIDâin providing demining assistance in Southeast Asia? Are these agencies utilizing the appropriated funds efficiently and effectively? Focus on clearance âMost of the appropriated funds have been for humanitarian demining projects and technical support, with less funding for assistance to UXO victims. The focus on clearance, rather than assistance on UXO victims, may in part be due to a concern about possible post-conflict liability issues. In light of past practices, should the U.S. government increase its support for UXO victims in Cambodia, Laos, and Vietnam beyond those being currently provided via the Leahy War Victims Fund? Implications for bilateral relations âHas the amount and types of U.S. UXO assistance to Cambodia, Laos, and Vietnam been a significant factor in bilateral relations with each of those nations? In Vietnam, work on war legacy issues formed an early part of building normalized relations in the post-War periodâties that have broadened into closer strategic and economic linkages. In Cambodia and Laos, UXO-related assistance has been one of the broadest areas for substantive cooperation between the United States and two countries with which the United States has had relatively cool relations. Would a change in the amount or type of assistance provided be beneficial to U.S. relations with Cambodia, Laos, or Vietnam? Should the U.S. government use UXO assistance to pressure other entities, such as Vietnam's MND, to be more cooperative in the UXO decontamination effort? UXO p revention âThe Department of Defense has implemented a policy that is to eventually replace all cluster munitions with ones whose failure rate is below 1%. Should the U.S. government undertake additional efforts to reduce the amount of post-conflict UXO from U.S. munitions, including prohibiting the use of U.S. funding for certain types of submunitions that may leave UXO? Given DOD's current views and policies on cluster munitions and landmines, does this preclude the United States from joining the 2010 Convention on Cluster Munitions or 1999 Ottawa Convention on Landmines? Precedents and lessons for other parts of the world âAre there lessons that can be drawn from U.S. assistance for UXO clearance and victim relief in Southeast Asia that may be applicable to programs elsewhere in the world, including Afghanistan and Iraq? Have the levels of assistance the United States has offered in Southeast Asia signaled a precedent for other parts of the world? During the 115 th Congress, legislation was introduced that would have addressed some of these general issues associated with UXO, though none directly addressed the current situation in Southeast Asia. The Unexploded Ordnance Removal Act ( H.R. 5883 ) would have required the Secretary of Defense, in concurrence with the Secretary of State, to develop and implement a strategy for removing UXO from Iraq and Syria. The Cluster Munitions Civilian Protection Act of 2017 ( H.R. 1975 and S. 897 ) would have prohibited the obligation or expenditure of U.S. funds for cluster munitions if, after arming, the unexploded ordnance rate for the submunitions was more than 1%.	Summary:	gov_report	1,024	null	43
crs_R45998	crs_R45998_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Over the past couple of decades, national attention to "emerging contaminants" or "contaminants of emerging concern" (CECs) in surface water and groundwater has been increasing. Although there is no federal statutor y or regulatory definition of CECs, generally, the term refers to unregulated substances detected in the environment that may present a risk to human health, aquatic life, or the environment. CECs can include many different types of manmade chemicals and substancesâsuch as those in personal care products, pharmaceuticals, industrial chemicals, lawn care and agricultural products, and microplasticsâas well as naturally occurring substances such as algal toxins or manganese. CECs often enter the environment, including ground and surface waters, via municipal and industrial wastewater discharges and urban and agricultural storm runoff. Although municipal and industrial wastewater are both treated prior to discharge into waterways, treatment facilities are often not designed to remove CECs. The availability of data on CECsâsuch as concentration and pervasiveness in the environment or exposure or toxicity data that would help determine their risk to humans and aquatic lifeâmay be limited. In some cases, detections of CECs in the environment have triggered a call for action from federal, state, and local government, as well as Congress. Increased monitoring and detections of one particular group of chemicals, per- and polyfluoroalkyl substances (PFAS), has recently heightened public and congressional interest in these CECs and has also prompted a broader discussion about how CECs are identified, detected, and regulated and whether additional actions should be taken to protect human health and the environment. Several statutesâincluding the Safe Drinking Water Act; the Toxic Substances Control Act (TSCA); the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA); and the Clean Water Act (CWA) âprovide authorities to the U.S. Environmental Protection Agency (EPA) and states to address particular CECs. In the 116 th Congress, Members have introduced more than 40 bills to address PFAS through various means. Multiple bills, including House- and Senate-passed National Defense Authorization Act (NDAA) bills for FY2020 ( H.R. 2500 and S. 1790 , respectively), would direct EPA to take regulatory and other actions to address PFAS under several environmental statutes. Two of these bills ( H.R. 2500 and H.R. 3616 ) would direct EPA to address PFAS using authorities provided to the agency under the CWA, which Congress established to restore and protect the quality of the nation's surface waters. Global concern about another group of CECsâmicroplasticsâand their potential impacts has also been mounting. Recent studies have found that treated effluents from wastewater treatment plants can be key sources of microplastics, as can runoff from agricultural sites where sewage sludge from the wastewater treatment process has been applied as fertilizer. As with many other CECs, wastewater treatment facilities are generally not designed to screen for microplastic debris, such as microbeads, plastic fragments, or plastic fibers from clothing. Congress has shown interest in addressing the impacts of plastic pollution. In 2015, Congress passed legislation to ban plastic microbeads from rinse-off personal care products ("Microbead-Free Waters Act of 2015," P.L. 114-114 ). More recently, some Members in the 116 th Congress announced plans to introduce comprehensive legislation to address plastic waste in fall 2019. Some stakeholders have asserted that EPA could be more effective in using its existing CWA authorities to address CECs, while others have suggested a need to identify and address potential gaps in CWA authorities through amendments to the statute. This report examines authorities available to address CECs under the CWA. Addressing CECs through the Clean Water Act EPA has several CWA authorities it may use to address CECs, although it faces some challenges in doing so. The CWA's stated objective is "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." To help achieve this objective, the CWA prohibits the discharge of pollutants from any point source (i.e., a discrete conveyance, such as a pipe, ditch, etc.) to waters of the United States without a permit. Under the CWA, one of the primary mechanisms to protect or improve surface water quality is to limit or prohibit discharges of contaminants, including CECs, in National Pollutant Discharge Elimination System (NPDES) permits. The CWA authorizes EPA and delegated states to set limits or prohibit discharges of pollutants in permits through technology-based effluent (i.e., discharge) limitations and standards and through water-quality-based effluent limitations, which are established through water quality standards and criteria. Technology-based effluent limitations are specific numerical limits (i.e., maximum allowable levels of specific pollutants) that represent the minimum level of control that must be established in a permit. In cases where technology-based effluent limitations are not adequate to meet applicable water quality standards, the permits also incorporate water-quality-based effluent limitations. Water-quality-based effluent limitations are specific limits established in a permit that, if not exceeded in the discharge, allow for attainment of water quality standards in the receiving water. Water quality standardsâestablished by states, territories, tribes, and EPAâdefine the desired condition or level of protection of a water body and what is needed to achieve or protect that condition. In addition, the CWA authorizes EPA to designate contaminants as toxic pollutants (CWA Â§307) or as hazardous substances (CWA Â§311), which may trigger other actions under the CWA and CERCLA. This section first identifies the authorities available under the CWA, their applicability to CECs, and potential challenges with EPA use of these authorities. Technology-Based Requirements The CWA requires EPA to establish technology-based effluent limitations for various categories of point sources/dischargers . Technology-based requirements consider the performance of specific technologies as well as economic achievability. These limits do not specify what technologies must be employed; rather , they establish the levels of specific pollutants that are allowable in the discharge based on the performance of technologies identified as representing specified levels of control (e.g., best available technology economically achievable, best conventional pollutant control technology). CWA Section 301 prescribes the levels of control required. EPA broadly classifies NPDES permittees as either (1) publicly owned treatment works (POTWs) or (2) non-POTWs, which include all other point sources and are also often called n on municipal facilities or industrial facilities . The CWA requires POTWs to meet secondary treatment standards as determined by EPA. Secondary standards are based on performance data for POTWs that use physical and biological treatment to remove or control conventional pollutants. As shown in Figure 1 , the CWA requires non-POTW dischargers to achieve specified levels of control based on (1) whether a discharger directly or indirectly discharges into a water of the United States (an indirect discharger discharges to a POTW for treatment prior to discharge into a water of the United States), (2) whether the discharger is a new or existing source, and (3) the category of pollutant (conventional, toxic, or nonconventional ). Effluent Limitation Guidelines and Standards (ELGs) The CWA requires EPA to publish national regulations for non-POTW dischargersâcalled Effluent Limitation Guidelines and Standards (ELGs)âwhich set minimum standards for specific pollutants in industrial wastewater discharges based on the specified levels of control. Since 1972, EPA has developed ELGs for 59 industrial categories. For direct dischargers, states or EPA incorporate the limits established in ELGs into the NPDES permits they issue. For indirect dischargers, pretreatment standards established in ELGs to prevent pass through and interference at the POTW apply. The CWA requires EPA to annually review all existing ELGs to determine whether revisions are appropriate. In addition, CWA Section 304(m) requires EPA to publish a plan every two years that includes a schedule for review and revision of promulgated ELGs, identifies categories of sources discharging toxic or nonconventional pollutants that do not have ELGs, and establishes a schedule for promulgating ELGs for any newly identified categories. In its 2002 draft Strategy for National Clean Water Industrial Regulations , EPA described a process for identifying existing ELGs that the agency should consider revising as well as industrial categories that may warrant development of new ELGs. As outlined in the strategy, EPA considers four main factors when prioritizing existing ELGs for possible revision: (1) the amount and type of pollutants in an industrial category's discharge and the relative hazard to human health or the environment, (2) the availability of an applicable and demonstrated wastewater treatment technology, process change, or pollution prevention measure that can reduce pollutants in the discharge and the associated risk to human health or the environment; (3) the cost, performance, and affordability or economic achievability of the wastewater treatment technology, process change, or pollution prevention measure; and (4) the opportunity to eliminate inefficiencies or impediments to pollution prevention or technological innovation or promote innovative approaches. EPA considers nearly identical factors in deciding whether to develop new ELGs. EPA uses a variety of screening-level analyses to address these factors. These analyses evaluate discharge monitoring reports and EPA's Toxic Release Inventory to rank industrial categories according to the total toxicity of their wastewater. In 2012, the Government Accountability Office recommended that the annual review include additional industrial hazard data sources to augment its screening-level reviews. In response, EPA has begun to use additional data sources that provide information about CECs or new pollutant discharges, industrial process changes, and new and more sensitive analytical methods, among other things. For example, EPA has reviewed data from the agency's Office of Pollution Prevention and Toxics to identify potential CECs. If EPA identifies an industrial discharge category warranting further review, it conducts a more detailed review, which may lead to a new or revised guideline. EPA published its most recent effluent guidelines program planâthe Final 2016 Effluent Guidelines Program Plan âin April 2018. It identified one new rulemaking to revise the Steam Electric Power Generating Point Source Category ELG but concluded that no other industries warrant new ELGs at this time. In its plan, EPA also announced that it is initiating three new studies: a holistic look at the management of oil and gas extraction wastewater from onshore facilities, an industry-wide study of nutrients, and an industry-wide study of PFAS. Options to Address CECs through Technology-Based Requirements Both EPA and states have authority under the CWA to address CECs through technology-based effluent limitations using ELGs or by setting technology-based effluent limits in NPDES permits on a case-by-case basis. In addition, the CWA authorizes EPA to add contaminants to the Toxic Pollutant List. ELGs When EPA develops an ELG for a new industrial category or revises an existing ELG, it is for the industrial categoryânot a specific pollutant. However, as evidenced in the agency's most recent effluent guidelines program plan, EPA may initiate a cross-industry review of particular pollutants (such as the agency is doing with PFAS and nutrients). EPA uses such reviews to prioritize further study of the industrial categories that may be candidates for ELG development or revision to control the discharges of those particular pollutants. If EPA were to determine that new or revised ELGs are warranted to control discharges of those pollutants, and the agency had the necessary data to support the development or revision, the agency could initiate a rulemaking process to do so. Establishing Technology-Based Effluent Limits in NPDES Permits on a Case-by-Case Basis The CWA also authorizes EPA and states to impose technology-based effluent limits in NPDES permits on a case-by-case basis when "EPA-promulgated effluent limitations are inapplicable." This includes when EPA has not developed ELGs for the industry or type of facility being permitted or pollutants or processes are present that were not considered when the ELG was developed. This provides a means for the permitting authority to restrict pollutants in a facility's discharge even when an ELG is not available. CWA regulations require best professional judgment to set case-by-case technology-based effluent limits, applying criteria that are similar to the analysis EPA uses to develop ELGs but are performed by the permit writer for a single facility. Toxic Pollutant List The CWA also authorizes EPA to designate contaminants as toxic pollutants, which can trigger other actions under the CWA and CERCLA. (For a discussion of the effect of designating a contaminant as a toxic pollutant on the treatment of that contaminant under CERCLA, see " Designating CECs as Toxic Pollutants or Hazardous Substances .") CWA Section 307 authorizes EPA to designate toxic pollutants and promulgate ELGs that establish requirements for those toxic pollutants. Section 307(a)(1) directed EPA to publish a specified list of individual toxic pollutants or combination of pollutants and, from time to time, add or remove any pollutant that possesses certain properties. EPA adopted the initial list of 65 toxic pollutants in 1978, as directed by Congress. Since that time, the list of 65 toxic pollutants has generally not changed. Section 307(a)(1) directs EPA to "take into account the toxicity of the pollutant, its persistence, degradability, the usual or potential presence of the affected organisms in any waters, the importance of the affected organisms, and the nature and extent of the effect of the toxic pollutant on such organisms" when revising the Toxic Pollutant List. Section 307(a)(2) authorizes EPA to develop effluent limitations for any pollutant on the Toxic Pollutant List based on best available technology. Notably, however, EPA has the authority to develop effluent limitations for any pollutant regardless of whether it is on the Toxic Pollutant List. Adding a pollutant to the Toxic Pollutant List would trigger an additional requirement for states. Section 303(c)(2)(B) of the CWA requires states, whenever reviewing, revising, or adopting water quality standards, to adopt numeric criteria for all toxic pollutants listed pursuant to Section 307, for which EPA has published water quality criteria under Section 304(a). EPA and states use both the ELGs for industrial categories and state water quality standards in establishing pollutant limits in permits under Section 402. (See Figure 1 .) Challenges to Addressing CECs through Technology-Based Requirements EPA and states face a number of challenges in addressing CECs through technology-based effluent limitations. In particular, EPA officials stated that in developing a new ELG or updating an existing ELG, the agency needs to gather extensive supporting information. This effort includes identifying the pollutants of concern; evaluating the levels, prevalence, and sources of those pollutants of concern; determining whether the pollutants are in treatable quantities and whether effective treatment technologies are available; and developing economic data to project the cost of treatment, among other things. Also, EPA and state officials have asserted that it is difficult for the agency and its CWA programs to keep pace with the growth of new chemicals in commerce. Accordingly, the agency is generally reactive rather than proactive in addressing CECs. EPA officials stated that identifying demonstrated treatment technologies and documenting their efficiency is especially challenging. The officials further stated that the most difficult task is showing that any technology selected as the basis for an ELG is economically achievable for the industry. In addition, EPA and states often lack analytical methods to measure an emerging contaminant. Even where analytical methods are available, there is still often a lack of data on the levels of the contaminant in dischargers' effluent and/or in the receiving surface waters. The two sources of data most readily available to EPAâdischarge monitoring report data and toxic release inventory dataâare limited to specific contaminants on which industry is required to report. EPA stated that the agency's capacity to collect dataâincluding obtaining clearance to request and collect the data and undertaking the extensive effort to do soâis limited in light of their staffing levels and resources. Should EPA have enough data to determine that a new or revised ELG is warranted and announce its intent to do so in an effluent guidelines program plan, the time it takes to issue the regulation varies, according to EPA officials. CWA Section 304(m) establishes a three-year time limit for new ELGs. For revised ELGs, the EPA officials stated that the time can vary depending upon the availability of data and the level of complexityâsome may be very technical and involve many wastestreams. Two of the more recently issued ELGsârevisions of the oil and gas extraction and steam electric power generating categoriesâtook five and six years, respectively. Water-Quality-Based Requirements Under the CWA, water quality standards translate the goals of the act (e.g., fishable and swimmable waters, no toxic pollutants in toxic amounts) into measurable objectives to protect or improve water quality. States, territories, and authorized tribes (hereinafter referred to collectively as states) are required to adopt water quality standards for waters of the United States, subject to EPA approval. They may also adopt standards for additional surface waters if their own state laws allow them to do so. Water quality standards consist of three key required components: 1. Designated uses for each water bodyâfor example, recreation (swimming or boating), aquatic life support, fish consumption, public water supply, agriculture; 2. Criteria , which describe the conditions in a water body necessary to support the designated usesâexpressed as concentrations of pollutants or other quantitative measures or narrative statements; and 3. An antidegradation policy for maintaining existing water quality. States have the primary authority to adopt, review, and revise their water quality standards and implementation procedures. The CWA requires states to review their water quality standards at least once every three years. EPA is required to review the states' water quality standards. Water Quality Criteria Water quality criteria prescribe limits on specific contaminants or conditions in a water body that protect particular designated uses of the water body. Both the EPA and states have roles in establishing water quality criteria under CWA Section 304(a) and 303(c)(2), respectively. EPA Role CWA Section 304(a) requires EPA to develop and publish and "from time to time thereafter revise" criteria for water quality that accurately reflect the latest scientific knowledge. These criteria are recommendations to states for use in developing their own water quality standards. EPA has developed several different types of criteria, including human health criteria, aquatic life criteria, and recreational criteria. EPA has also published guidelines for deriving water quality criteria, which the agency uses to develop new criteria under Section 304(a). These guidelines also serve as guidance to states as they adjust water quality criteria developed under Section 304(a) to reflect local conditions or develop their own scientifically defensible water quality criteria. EPA most recently updated its human health criteria in 2015, revising 94 of the 122 existing human health criteria. EPA last updated its methodology for deriving human health criteria in 2000, incorporating "significant scientific advances in key areas such as cancer and non-cancer risk assessments, exposure assessments, and bioaccumulation in fish." EPA's national recommended aquatic life criteria table currently includes 58 criteria. Many of these criteria were published prior to 1990. In the past 10 years, EPA has published two new criteria. EPA has not updated its guidelines for deriving aquatic life criteria since 1985. According to EPA, however, the guidelines allow for best professional judgment, which they have used in more recent criteria development and updates. The agency recognizes that since 1985, there has been substantial scientific advancement that warrants updating these guidelines. EPA formally initiated the guidelines revision process in 2015. However, according to EPA officials, the agency has shifted its focus from updating the guidelines to determining whether available data and research support development of human health criteria for PFAS. In doing so, EPA officials indicated they plan to use information gathered for the guidelines revision and also noted that they are not tied to the 1985 guidelines due to the best professional judgment clause included therein. EPA's recreational water quality criteria are national recommendations for all inland and coastal waters that have a primary contact recreation (i.e., swimming) designated use. EPA establishes recreational water quality criteria to help protect against illness caused by organismsâsuch as viruses, bacteria, and their associated toxinsâin water bodies. In 2012, EPA updated its recreational water quality criteria, which it had last issued in 1986. Additionally, in June 2019, EPA published final recreational water quality criteria for two algal toxins, which are commonly present in harmful algal blooms, to supplement the 2012 recreational water quality criteria. In addition, EPA is currently developing recreational water quality criteria for coliphage, a viral indicator of fecal contamination. State Role States use EPA's criteria as guidance in developing their own water quality standards. CWA Section 303(c)(2) requires states to adopt criteria to protect the designated uses of their water bodies and to also adopt criteria for all toxic pollutants listed pursuant to Section 307(a)(1), for which EPA has published criteria under Section 304(a). States' water quality criteria must be based on sound scientific rationale, contain sufficient parameters or constituents to protect the designated uses, and support the most sensitive use for water bodies with multiple designated uses. EPA regulations further require that states should establish numeric criteria based on CWA Section 304(a) guidance, CWA Section 304(a) guidance modified to reflect site-specific conditions, or other scientifically defensible methods. Where numeric criteria cannot be established, states are required to establish narrative criteria or criteria based on biomonitoring methods. States may adopt more stringent criteria than what EPA recommends, including for pollutants or parameters for which EPA has not promulgated 304(a) criteria. Options to Address CECs through Water-Quality-Based Requirements EPA and states may establish water quality criteria for CECs. If EPA were to establish criteria under CWA Section 304(a) for a CEC, that action alone would not necessarily require states to adopt criteria for that contaminant. As explained above, the CWA requires that states adopt criteria to protect their designated uses into their water quality standards. EPA's regulations provide that if a state does not adopt new or revised criteria for parameters for which EPA has published new or updated recommendations, then the state shall provide an explanation. States are explicitly required, as explained above, to adopt criteria for a contaminant if EPA designates it as a toxic pollutant under CWA Section 307 and publishes criteria for that contaminant under Section 304(a). Once a state has adopted water quality criteria for a contaminant as part of its state water quality standards and those standards have been approved, several CWA tools are available for achieving those standards. The primary tool is to limit or prohibit discharges of the contaminant in NPDES permits. In some cases, the technology-based effluent limits may already enable attainment of state water quality standards. In instances where they do not, the permit writer is required to establish water-quality-based effluent limitations. If a water body is not attaining its designated use (i.e., is "impaired" for that use), the Total Maximum Daily Load (TMDL) may also be used. A TMDL, essentially a "pollution diet" for a water body, is the maximum amount of a pollutant that a water body can receive and still meet water quality standards and an allocation of that amount to the pollutant's sources (including a margin of safety). TMDLs consider point sources, which can be addressed through permits, as well as nonpoint (diffuse) sources, which are more often addressed through best management practices and related efforts under CWA Section 319 nonpoint source management programs. Challenges to Addressing CECs through Water-Quality-Based Requirements A key challenge is often a lack of data about the occurrence, concentration, and persistence of CECs in the environment, as well as the effects on human health and aquatic life. Detection of a contaminant does not necessarily trigger regulatory measures. Information on the potential for the contaminant to adversely affect human health and aquatic life, potential exposure pathways, and other data would also be needed to inform such decisions. Developing new water quality criteria or updating existing criteria can often be time intensive, particularly in cases where data are limited. The general process for developing criteria involves a number of steps, including problem formulation and developing an analysis plan; gathering data and analyzing relevant studies; drafting the criteria document; a rigorous review process (e.g., branch level, office level, interagency, and independent external peer review); public notice and comment, and revising and publishing the criteria. According to EPA officials, the time it takes to develop or update criteria is often a function of the data that are available. EPA officials noted that developing criteria can take several years or longer. For example, the 2016 update for the aquatic life water quality criteria for seleniumâan effort characterized by EPA as complicated, in part because of the contaminant's bioaccumulative propertiesâtook 10 years to complete. In other cases, such as when a contaminant has an existing EPA Integrated Risk Information System value, developing or updating the human health water quality criteria for that contaminant may take less time, according to EPA officials. In May 2019, a report from the Contaminants of Emerging Concern Workgroup, convened by the Association of State Drinking Water Administrators and the Association of Clean Water Administrators, provided recommendations from state regulators regarding the ways state and federal agencies could improve the management of CECs. The report stated the following: The use of existing authorities and processes under the CWA and [Safe Drinking Water Act] to establish new criteria or standards is onerous, can take decades to implement, and does not meet public expectations for timely identification and prioritization of CECsâ¦. However slow these federal processes are, many state agencies do not have the infrastructure (i.e., sufficient funds and/or staffing levels), regulatory authority, or technical expertise to derive their own criteria or set their own standards for drinking water, surface water, groundwater, and fish tissue. Among numerous other recommendations provided in the report, the CEC workgroup recommended that EPA work with states to generate a list of priority CECs. To that end, EPA officials stated that they are developing a more formalized prioritization process for determining which contaminants warrant criteria development that will incorporate input from multiple stakeholders (including states), leverage information collected under the Safe Drinking Water Act, and incorporate monitoring and other data (e.g., ambient water concentrations). Designating CECs as Toxic Pollutants or Hazardous Substances Two sections of the CWAâSections 307 and 311âauthorize EPA to designate contaminants as toxic pollutants and hazardous substances, respectively. Designating a contaminant under Section 307 or Section 311 of the CWA has implications for how the contaminant is treated under CERCLA. CERCLA defines the term hazardous substance to include toxic pollutants designated under CWA Section 307 and hazardous substances designated under CWA Section 311 (as well as substances designated under certain other statutes and other chemicals that EPA may designate as hazardous substances). Toxic PollutantsâCWA Section 307 EPA's authority to designate contaminants under CWA Section 307 as toxic pollutants and the CWA-related implications of that designation are discussed above under " Toxic Pollutant List ." Hazardous SubstancesâCWA Section 311 CWA Section 311(b)(2)(A) authorizes EPA to promulgate a rule designating as a "hazardous substance" any element or compound that, when discharged as specified under the section, would present an imminent and substantial danger to public health or welfare, including but not limited to fish, shellfish, wildlife, shorelines, and beaches. EPA is authorized to revise the list of hazardous substances subject to these criteria as may be appropriate. EPA finalized the initial list of hazardous substances in 1978 and thereafter revised the list in 1979, 1989, and 2011. Pursuant to Section 311(b)(4), EPA established "harmful" quantities for these substances that are subject to the reporting of discharges prohibited under Section 311(b)(3). Section 311(b)(5) requires a person in charge of a vessel or facility to notify the National Response Center, administered by the U.S. Coast Guard, as soon as that person has knowledge of a discharge. Discharges permitted under other provisions of the CWA or otherwise allowable under certain other federal, state, and local regulations are excluded from reporting under CWA Section 311. CWA Section 311(c) authorizes federal actions to remove a prohibited discharge of a hazardous substance (or oil). CWA Section 311(f) establishes liability for the recovery of removal costs, including restoration of damaged natural resources. Section 311(e) authorizes enforcement orders to require a responsible party to abate an imminent and substantial threat to public health or welfare from a prohibited discharge, or threat of a harmful discharge, of a hazardous substance (or oil). Implications of CWA Designations on CERCLA If EPA were to designate a CEC, or any contaminant, as a toxic pollutant or hazardous substance under the CWA, that contaminant would, by statutory definition, be defined as a hazardous substance under CERCLA. CERCLA authorizes federal actions to respond to a release, or substantial threat of a release, of a hazardous substance into the environment in coordination with the states. CERCLA similarly authorizes response actions for releases of other pollutants or contaminants that may present an imminent and substantial danger to public health or welfare. CERCLA also establishes liability for response costs and natural resource damages but only for hazardous substances and not for other pollutants or contaminants. CERCLA response authority is available for releases of pollutants or contaminants but without liability to require a potentially responsible party to perform or pay for response actions. Designating a CEC as a toxic pollutant or hazardous substance under the CWA would have the effect of establishing liability for their release as a hazardous substance under CERCLA. However, releases in compliance with a CWA permit would be exempt from liability under CERCLA as a "federally permitted release" based on the premise that the permit requirements would mitigate potential risks. CWA Section 311 also establishes liability for releases of hazardous substances, but CERCLA liability and enforcement mechanisms are broader than the CWA. In practice, CERCLA has been the principal federal authority used to respond to discharges of hazardous substances into surface waters and to enforce liability, although the enforcement authorities of CWA Section 311 remain available to EPA. For a broader discussion of CERCLA, see CRS Report R41039, Comprehensive Environmental Response, Compensation, and Liability Act: A Summary of Superfund Cleanup Authorities and Related Provisions of the Act , by David M. Bearden. Legislation in the 116th Congress Recent congressional interest in CECs has largely focused on addressing one particular group of CECsâPFASâand addressing them through several statutes, such as the Safe Drinking Water Act. However, legislation in the 116 th Congress proposes to address PFAS using CWA authorities. H.R. 3616 âthe Clean Water Standards for PFAS Act of 2019âand Section 330A of H.R. 2500 , the House-passed version of the NDAA for FY2020, would direct EPA to add PFAS to the CWA Toxic Pollutant List and publish ELGs and pretreatment standards for PFAS within specified time frames. In addition, Section 330G of the House-passed version of the NDAA bill, Sections 6731-6736 of S. 1790 (the Senate NDAA bill), H.R. 1976 , and S. 950 would direct the U.S. Geological Survey (USGS) to carry out nationwide samplingâin consultation with states and EPAâto determine the concentration of perfluorinated compounds in surface water, groundwater, and soil. These bills would also require USGS to prepare a report for Congress and provide the sampling data to the EPA as well as other federal and state regulatory agencies that request it. Additionally, the bills would require the data to be used to "inform and enhance assessments of exposure, likely health and environmental impacts, and remediation priorities." Some Members have also introduced legislation to require comprehensive PFAS toxicity testing ( H.R. 2608 ). In addition to focusing on PFAS, several bills proposed in the 116 th Congress look more broadly at how to address CECs. For example, some aim to improve federal coordination and research and support states in addressing emerging contaminants. S. 1507 , S. 1251 , and Sections 6741-6742 of S. 1790 would direct the White House Office of Science and Technology Policy to establish a National Emerging Contaminant Research Initiative. The bills would also direct EPA to develop a program to provide technical assistance and support to states for testing and analysis of emerging contaminants and establish a database of resources available through the program to assist states with testing for emerging contaminants. While these efforts are more focused on CECs in drinking water, the bill directs the EPA to ensure that the database is available to groups that have interest in emerging contaminants, including wastewater utilities. Conclusion While Congress is currently debating how to best address the concerns related to widespread detections of PFAS, attention to other emerging contaminants (e.g., microplastics and algal toxins) has also increased with the availability of new detection methods and increased monitoring. Observers note that in the coming years, other CECs will likely emerge and prompt similar calls for immediate action to protect public health and the environment. Many observers argue that federal actions to address CECs currently tend to be reactive rather than proactive. Many of these observers assert that more focus and attention is needed on assessing the toxicity of chemical substances before they are introduced into commerce. Congress is currently considering legislation to improve federal coordination and responses to CECs. Specific to the CWA, some observers advocate for oversight to identify and address potential gaps or barriers in CWA authorities and processes that make it difficult for EPA and states to quickly respond when CECs are detected. Other observers assert that EPA could better use its existing authorities to address CECs. For example, EPA has not updated its ELGs for certain industrial categories in decades. Accordingly, some observers assert that various ELGs do not reflect advancements in science or technology that could lead to new effluent limitations for CECs. Similarly, some stakeholders assert that EPA could better prioritize which CECs warrant water quality criteria development. EPA's ability to address these and other recommendations depends on the availability of resources, treatment technologies, and scientific and economic data. Moving forward, Congress may be interested in evaluating EPA appropriations for the CWA programs that support EPA's efforts to address discharges of CECs. Congress may also be interested in overseeing the Administration's implementation of these programs. Summary:	null	96	38,012	38,014	38,014	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Over the past couple of decades, national attention to "emerging contaminants" or "contaminants of emerging concern" (CECs) in surface water and groundwater has been increasing. Although there is no federal statutor y or regulatory definition of CECs, generally, the term refers to unregulated substances detected in the environment that may present a risk to human health, aquatic life, or the environment. CECs can include many different types of manmade chemicals and substancesâsuch as those in personal care products, pharmaceuticals, industrial chemicals, lawn care and agricultural products, and microplasticsâas well as naturally occurring substances such as algal toxins or manganese. CECs often enter the environment, including ground and surface waters, via municipal and industrial wastewater discharges and urban and agricultural storm runoff. Although municipal and industrial wastewater are both treated prior to discharge into waterways, treatment facilities are often not designed to remove CECs. The availability of data on CECsâsuch as concentration and pervasiveness in the environment or exposure or toxicity data that would help determine their risk to humans and aquatic lifeâmay be limited. In some cases, detections of CECs in the environment have triggered a call for action from federal, state, and local government, as well as Congress. Increased monitoring and detections of one particular group of chemicals, per- and polyfluoroalkyl substances (PFAS), has recently heightened public and congressional interest in these CECs and has also prompted a broader discussion about how CECs are identified, detected, and regulated and whether additional actions should be taken to protect human health and the environment. Several statutesâincluding the Safe Drinking Water Act; the Toxic Substances Control Act (TSCA); the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA); and the Clean Water Act (CWA) âprovide authorities to the U.S. Environmental Protection Agency (EPA) and states to address particular CECs. In the 116 th Congress, Members have introduced more than 40 bills to address PFAS through various means. Multiple bills, including House- and Senate-passed National Defense Authorization Act (NDAA) bills for FY2020 ( H.R. 2500 and S. 1790 , respectively), would direct EPA to take regulatory and other actions to address PFAS under several environmental statutes. Two of these bills ( H.R. 2500 and H.R. 3616 ) would direct EPA to address PFAS using authorities provided to the agency under the CWA, which Congress established to restore and protect the quality of the nation's surface waters. Global concern about another group of CECsâmicroplasticsâand their potential impacts has also been mounting. Recent studies have found that treated effluents from wastewater treatment plants can be key sources of microplastics, as can runoff from agricultural sites where sewage sludge from the wastewater treatment process has been applied as fertilizer. As with many other CECs, wastewater treatment facilities are generally not designed to screen for microplastic debris, such as microbeads, plastic fragments, or plastic fibers from clothing. Congress has shown interest in addressing the impacts of plastic pollution. In 2015, Congress passed legislation to ban plastic microbeads from rinse-off personal care products ("Microbead-Free Waters Act of 2015," P.L. 114-114 ). More recently, some Members in the 116 th Congress announced plans to introduce comprehensive legislation to address plastic waste in fall 2019. Some stakeholders have asserted that EPA could be more effective in using its existing CWA authorities to address CECs, while others have suggested a need to identify and address potential gaps in CWA authorities through amendments to the statute. This report examines authorities available to address CECs under the CWA. Addressing CECs through the Clean Water Act EPA has several CWA authorities it may use to address CECs, although it faces some challenges in doing so. The CWA's stated objective is "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." To help achieve this objective, the CWA prohibits the discharge of pollutants from any point source (i.e., a discrete conveyance, such as a pipe, ditch, etc.) to waters of the United States without a permit. Under the CWA, one of the primary mechanisms to protect or improve surface water quality is to limit or prohibit discharges of contaminants, including CECs, in National Pollutant Discharge Elimination System (NPDES) permits. The CWA authorizes EPA and delegated states to set limits or prohibit discharges of pollutants in permits through technology-based effluent (i.e., discharge) limitations and standards and through water-quality-based effluent limitations, which are established through water quality standards and criteria. Technology-based effluent limitations are specific numerical limits (i.e., maximum allowable levels of specific pollutants) that represent the minimum level of control that must be established in a permit. In cases where technology-based effluent limitations are not adequate to meet applicable water quality standards, the permits also incorporate water-quality-based effluent limitations. Water-quality-based effluent limitations are specific limits established in a permit that, if not exceeded in the discharge, allow for attainment of water quality standards in the receiving water. Water quality standardsâestablished by states, territories, tribes, and EPAâdefine the desired condition or level of protection of a water body and what is needed to achieve or protect that condition. In addition, the CWA authorizes EPA to designate contaminants as toxic pollutants (CWA Â§307) or as hazardous substances (CWA Â§311), which may trigger other actions under the CWA and CERCLA. This section first identifies the authorities available under the CWA, their applicability to CECs, and potential challenges with EPA use of these authorities. Technology-Based Requirements The CWA requires EPA to establish technology-based effluent limitations for various categories of point sources/dischargers . Technology-based requirements consider the performance of specific technologies as well as economic achievability. These limits do not specify what technologies must be employed; rather , they establish the levels of specific pollutants that are allowable in the discharge based on the performance of technologies identified as representing specified levels of control (e.g., best available technology economically achievable, best conventional pollutant control technology). CWA Section 301 prescribes the levels of control required. EPA broadly classifies NPDES permittees as either (1) publicly owned treatment works (POTWs) or (2) non-POTWs, which include all other point sources and are also often called n on municipal facilities or industrial facilities . The CWA requires POTWs to meet secondary treatment standards as determined by EPA. Secondary standards are based on performance data for POTWs that use physical and biological treatment to remove or control conventional pollutants. As shown in Figure 1 , the CWA requires non-POTW dischargers to achieve specified levels of control based on (1) whether a discharger directly or indirectly discharges into a water of the United States (an indirect discharger discharges to a POTW for treatment prior to discharge into a water of the United States), (2) whether the discharger is a new or existing source, and (3) the category of pollutant (conventional, toxic, or nonconventional ). Effluent Limitation Guidelines and Standards (ELGs) The CWA requires EPA to publish national regulations for non-POTW dischargersâcalled Effluent Limitation Guidelines and Standards (ELGs)âwhich set minimum standards for specific pollutants in industrial wastewater discharges based on the specified levels of control. Since 1972, EPA has developed ELGs for 59 industrial categories. For direct dischargers, states or EPA incorporate the limits established in ELGs into the NPDES permits they issue. For indirect dischargers, pretreatment standards established in ELGs to prevent pass through and interference at the POTW apply. The CWA requires EPA to annually review all existing ELGs to determine whether revisions are appropriate. In addition, CWA Section 304(m) requires EPA to publish a plan every two years that includes a schedule for review and revision of promulgated ELGs, identifies categories of sources discharging toxic or nonconventional pollutants that do not have ELGs, and establishes a schedule for promulgating ELGs for any newly identified categories. In its 2002 draft Strategy for National Clean Water Industrial Regulations , EPA described a process for identifying existing ELGs that the agency should consider revising as well as industrial categories that may warrant development of new ELGs. As outlined in the strategy, EPA considers four main factors when prioritizing existing ELGs for possible revision: (1) the amount and type of pollutants in an industrial category's discharge and the relative hazard to human health or the environment, (2) the availability of an applicable and demonstrated wastewater treatment technology, process change, or pollution prevention measure that can reduce pollutants in the discharge and the associated risk to human health or the environment; (3) the cost, performance, and affordability or economic achievability of the wastewater treatment technology, process change, or pollution prevention measure; and (4) the opportunity to eliminate inefficiencies or impediments to pollution prevention or technological innovation or promote innovative approaches. EPA considers nearly identical factors in deciding whether to develop new ELGs. EPA uses a variety of screening-level analyses to address these factors. These analyses evaluate discharge monitoring reports and EPA's Toxic Release Inventory to rank industrial categories according to the total toxicity of their wastewater. In 2012, the Government Accountability Office recommended that the annual review include additional industrial hazard data sources to augment its screening-level reviews. In response, EPA has begun to use additional data sources that provide information about CECs or new pollutant discharges, industrial process changes, and new and more sensitive analytical methods, among other things. For example, EPA has reviewed data from the agency's Office of Pollution Prevention and Toxics to identify potential CECs. If EPA identifies an industrial discharge category warranting further review, it conducts a more detailed review, which may lead to a new or revised guideline. EPA published its most recent effluent guidelines program planâthe Final 2016 Effluent Guidelines Program Plan âin April 2018. It identified one new rulemaking to revise the Steam Electric Power Generating Point Source Category ELG but concluded that no other industries warrant new ELGs at this time. In its plan, EPA also announced that it is initiating three new studies: a holistic look at the management of oil and gas extraction wastewater from onshore facilities, an industry-wide study of nutrients, and an industry-wide study of PFAS. Options to Address CECs through Technology-Based Requirements Both EPA and states have authority under the CWA to address CECs through technology-based effluent limitations using ELGs or by setting technology-based effluent limits in NPDES permits on a case-by-case basis. In addition, the CWA authorizes EPA to add contaminants to the Toxic Pollutant List. ELGs When EPA develops an ELG for a new industrial category or revises an existing ELG, it is for the industrial categoryânot a specific pollutant. However, as evidenced in the agency's most recent effluent guidelines program plan, EPA may initiate a cross-industry review of particular pollutants (such as the agency is doing with PFAS and nutrients). EPA uses such reviews to prioritize further study of the industrial categories that may be candidates for ELG development or revision to control the discharges of those particular pollutants. If EPA were to determine that new or revised ELGs are warranted to control discharges of those pollutants, and the agency had the necessary data to support the development or revision, the agency could initiate a rulemaking process to do so. Establishing Technology-Based Effluent Limits in NPDES Permits on a Case-by-Case Basis The CWA also authorizes EPA and states to impose technology-based effluent limits in NPDES permits on a case-by-case basis when "EPA-promulgated effluent limitations are inapplicable." This includes when EPA has not developed ELGs for the industry or type of facility being permitted or pollutants or processes are present that were not considered when the ELG was developed. This provides a means for the permitting authority to restrict pollutants in a facility's discharge even when an ELG is not available. CWA regulations require best professional judgment to set case-by-case technology-based effluent limits, applying criteria that are similar to the analysis EPA uses to develop ELGs but are performed by the permit writer for a single facility. Toxic Pollutant List The CWA also authorizes EPA to designate contaminants as toxic pollutants, which can trigger other actions under the CWA and CERCLA. (For a discussion of the effect of designating a contaminant as a toxic pollutant on the treatment of that contaminant under CERCLA, see " Designating CECs as Toxic Pollutants or Hazardous Substances .") CWA Section 307 authorizes EPA to designate toxic pollutants and promulgate ELGs that establish requirements for those toxic pollutants. Section 307(a)(1) directed EPA to publish a specified list of individual toxic pollutants or combination of pollutants and, from time to time, add or remove any pollutant that possesses certain properties. EPA adopted the initial list of 65 toxic pollutants in 1978, as directed by Congress. Since that time, the list of 65 toxic pollutants has generally not changed. Section 307(a)(1) directs EPA to "take into account the toxicity of the pollutant, its persistence, degradability, the usual or potential presence of the affected organisms in any waters, the importance of the affected organisms, and the nature and extent of the effect of the toxic pollutant on such organisms" when revising the Toxic Pollutant List. Section 307(a)(2) authorizes EPA to develop effluent limitations for any pollutant on the Toxic Pollutant List based on best available technology. Notably, however, EPA has the authority to develop effluent limitations for any pollutant regardless of whether it is on the Toxic Pollutant List. Adding a pollutant to the Toxic Pollutant List would trigger an additional requirement for states. Section 303(c)(2)(B) of the CWA requires states, whenever reviewing, revising, or adopting water quality standards, to adopt numeric criteria for all toxic pollutants listed pursuant to Section 307, for which EPA has published water quality criteria under Section 304(a). EPA and states use both the ELGs for industrial categories and state water quality standards in establishing pollutant limits in permits under Section 402. (See Figure 1 .) Challenges to Addressing CECs through Technology-Based Requirements EPA and states face a number of challenges in addressing CECs through technology-based effluent limitations. In particular, EPA officials stated that in developing a new ELG or updating an existing ELG, the agency needs to gather extensive supporting information. This effort includes identifying the pollutants of concern; evaluating the levels, prevalence, and sources of those pollutants of concern; determining whether the pollutants are in treatable quantities and whether effective treatment technologies are available; and developing economic data to project the cost of treatment, among other things. Also, EPA and state officials have asserted that it is difficult for the agency and its CWA programs to keep pace with the growth of new chemicals in commerce. Accordingly, the agency is generally reactive rather than proactive in addressing CECs. EPA officials stated that identifying demonstrated treatment technologies and documenting their efficiency is especially challenging. The officials further stated that the most difficult task is showing that any technology selected as the basis for an ELG is economically achievable for the industry. In addition, EPA and states often lack analytical methods to measure an emerging contaminant. Even where analytical methods are available, there is still often a lack of data on the levels of the contaminant in dischargers' effluent and/or in the receiving surface waters. The two sources of data most readily available to EPAâdischarge monitoring report data and toxic release inventory dataâare limited to specific contaminants on which industry is required to report. EPA stated that the agency's capacity to collect dataâincluding obtaining clearance to request and collect the data and undertaking the extensive effort to do soâis limited in light of their staffing levels and resources. Should EPA have enough data to determine that a new or revised ELG is warranted and announce its intent to do so in an effluent guidelines program plan, the time it takes to issue the regulation varies, according to EPA officials. CWA Section 304(m) establishes a three-year time limit for new ELGs. For revised ELGs, the EPA officials stated that the time can vary depending upon the availability of data and the level of complexityâsome may be very technical and involve many wastestreams. Two of the more recently issued ELGsârevisions of the oil and gas extraction and steam electric power generating categoriesâtook five and six years, respectively. Water-Quality-Based Requirements Under the CWA, water quality standards translate the goals of the act (e.g., fishable and swimmable waters, no toxic pollutants in toxic amounts) into measurable objectives to protect or improve water quality. States, territories, and authorized tribes (hereinafter referred to collectively as states) are required to adopt water quality standards for waters of the United States, subject to EPA approval. They may also adopt standards for additional surface waters if their own state laws allow them to do so. Water quality standards consist of three key required components: 1. Designated uses for each water bodyâfor example, recreation (swimming or boating), aquatic life support, fish consumption, public water supply, agriculture; 2. Criteria , which describe the conditions in a water body necessary to support the designated usesâexpressed as concentrations of pollutants or other quantitative measures or narrative statements; and 3. An antidegradation policy for maintaining existing water quality. States have the primary authority to adopt, review, and revise their water quality standards and implementation procedures. The CWA requires states to review their water quality standards at least once every three years. EPA is required to review the states' water quality standards. Water Quality Criteria Water quality criteria prescribe limits on specific contaminants or conditions in a water body that protect particular designated uses of the water body. Both the EPA and states have roles in establishing water quality criteria under CWA Section 304(a) and 303(c)(2), respectively. EPA Role CWA Section 304(a) requires EPA to develop and publish and "from time to time thereafter revise" criteria for water quality that accurately reflect the latest scientific knowledge. These criteria are recommendations to states for use in developing their own water quality standards. EPA has developed several different types of criteria, including human health criteria, aquatic life criteria, and recreational criteria. EPA has also published guidelines for deriving water quality criteria, which the agency uses to develop new criteria under Section 304(a). These guidelines also serve as guidance to states as they adjust water quality criteria developed under Section 304(a) to reflect local conditions or develop their own scientifically defensible water quality criteria. EPA most recently updated its human health criteria in 2015, revising 94 of the 122 existing human health criteria. EPA last updated its methodology for deriving human health criteria in 2000, incorporating "significant scientific advances in key areas such as cancer and non-cancer risk assessments, exposure assessments, and bioaccumulation in fish." EPA's national recommended aquatic life criteria table currently includes 58 criteria. Many of these criteria were published prior to 1990. In the past 10 years, EPA has published two new criteria. EPA has not updated its guidelines for deriving aquatic life criteria since 1985. According to EPA, however, the guidelines allow for best professional judgment, which they have used in more recent criteria development and updates. The agency recognizes that since 1985, there has been substantial scientific advancement that warrants updating these guidelines. EPA formally initiated the guidelines revision process in 2015. However, according to EPA officials, the agency has shifted its focus from updating the guidelines to determining whether available data and research support development of human health criteria for PFAS. In doing so, EPA officials indicated they plan to use information gathered for the guidelines revision and also noted that they are not tied to the 1985 guidelines due to the best professional judgment clause included therein. EPA's recreational water quality criteria are national recommendations for all inland and coastal waters that have a primary contact recreation (i.e., swimming) designated use. EPA establishes recreational water quality criteria to help protect against illness caused by organismsâsuch as viruses, bacteria, and their associated toxinsâin water bodies. In 2012, EPA updated its recreational water quality criteria, which it had last issued in 1986. Additionally, in June 2019, EPA published final recreational water quality criteria for two algal toxins, which are commonly present in harmful algal blooms, to supplement the 2012 recreational water quality criteria. In addition, EPA is currently developing recreational water quality criteria for coliphage, a viral indicator of fecal contamination. State Role States use EPA's criteria as guidance in developing their own water quality standards. CWA Section 303(c)(2) requires states to adopt criteria to protect the designated uses of their water bodies and to also adopt criteria for all toxic pollutants listed pursuant to Section 307(a)(1), for which EPA has published criteria under Section 304(a). States' water quality criteria must be based on sound scientific rationale, contain sufficient parameters or constituents to protect the designated uses, and support the most sensitive use for water bodies with multiple designated uses. EPA regulations further require that states should establish numeric criteria based on CWA Section 304(a) guidance, CWA Section 304(a) guidance modified to reflect site-specific conditions, or other scientifically defensible methods. Where numeric criteria cannot be established, states are required to establish narrative criteria or criteria based on biomonitoring methods. States may adopt more stringent criteria than what EPA recommends, including for pollutants or parameters for which EPA has not promulgated 304(a) criteria. Options to Address CECs through Water-Quality-Based Requirements EPA and states may establish water quality criteria for CECs. If EPA were to establish criteria under CWA Section 304(a) for a CEC, that action alone would not necessarily require states to adopt criteria for that contaminant. As explained above, the CWA requires that states adopt criteria to protect their designated uses into their water quality standards. EPA's regulations provide that if a state does not adopt new or revised criteria for parameters for which EPA has published new or updated recommendations, then the state shall provide an explanation. States are explicitly required, as explained above, to adopt criteria for a contaminant if EPA designates it as a toxic pollutant under CWA Section 307 and publishes criteria for that contaminant under Section 304(a). Once a state has adopted water quality criteria for a contaminant as part of its state water quality standards and those standards have been approved, several CWA tools are available for achieving those standards. The primary tool is to limit or prohibit discharges of the contaminant in NPDES permits. In some cases, the technology-based effluent limits may already enable attainment of state water quality standards. In instances where they do not, the permit writer is required to establish water-quality-based effluent limitations. If a water body is not attaining its designated use (i.e., is "impaired" for that use), the Total Maximum Daily Load (TMDL) may also be used. A TMDL, essentially a "pollution diet" for a water body, is the maximum amount of a pollutant that a water body can receive and still meet water quality standards and an allocation of that amount to the pollutant's sources (including a margin of safety). TMDLs consider point sources, which can be addressed through permits, as well as nonpoint (diffuse) sources, which are more often addressed through best management practices and related efforts under CWA Section 319 nonpoint source management programs. Challenges to Addressing CECs through Water-Quality-Based Requirements A key challenge is often a lack of data about the occurrence, concentration, and persistence of CECs in the environment, as well as the effects on human health and aquatic life. Detection of a contaminant does not necessarily trigger regulatory measures. Information on the potential for the contaminant to adversely affect human health and aquatic life, potential exposure pathways, and other data would also be needed to inform such decisions. Developing new water quality criteria or updating existing criteria can often be time intensive, particularly in cases where data are limited. The general process for developing criteria involves a number of steps, including problem formulation and developing an analysis plan; gathering data and analyzing relevant studies; drafting the criteria document; a rigorous review process (e.g., branch level, office level, interagency, and independent external peer review); public notice and comment, and revising and publishing the criteria. According to EPA officials, the time it takes to develop or update criteria is often a function of the data that are available. EPA officials noted that developing criteria can take several years or longer. For example, the 2016 update for the aquatic life water quality criteria for seleniumâan effort characterized by EPA as complicated, in part because of the contaminant's bioaccumulative propertiesâtook 10 years to complete. In other cases, such as when a contaminant has an existing EPA Integrated Risk Information System value, developing or updating the human health water quality criteria for that contaminant may take less time, according to EPA officials. In May 2019, a report from the Contaminants of Emerging Concern Workgroup, convened by the Association of State Drinking Water Administrators and the Association of Clean Water Administrators, provided recommendations from state regulators regarding the ways state and federal agencies could improve the management of CECs. The report stated the following: The use of existing authorities and processes under the CWA and [Safe Drinking Water Act] to establish new criteria or standards is onerous, can take decades to implement, and does not meet public expectations for timely identification and prioritization of CECsâ¦. However slow these federal processes are, many state agencies do not have the infrastructure (i.e., sufficient funds and/or staffing levels), regulatory authority, or technical expertise to derive their own criteria or set their own standards for drinking water, surface water, groundwater, and fish tissue. Among numerous other recommendations provided in the report, the CEC workgroup recommended that EPA work with states to generate a list of priority CECs. To that end, EPA officials stated that they are developing a more formalized prioritization process for determining which contaminants warrant criteria development that will incorporate input from multiple stakeholders (including states), leverage information collected under the Safe Drinking Water Act, and incorporate monitoring and other data (e.g., ambient water concentrations). Designating CECs as Toxic Pollutants or Hazardous Substances Two sections of the CWAâSections 307 and 311âauthorize EPA to designate contaminants as toxic pollutants and hazardous substances, respectively. Designating a contaminant under Section 307 or Section 311 of the CWA has implications for how the contaminant is treated under CERCLA. CERCLA defines the term hazardous substance to include toxic pollutants designated under CWA Section 307 and hazardous substances designated under CWA Section 311 (as well as substances designated under certain other statutes and other chemicals that EPA may designate as hazardous substances). Toxic PollutantsâCWA Section 307 EPA's authority to designate contaminants under CWA Section 307 as toxic pollutants and the CWA-related implications of that designation are discussed above under " Toxic Pollutant List ." Hazardous SubstancesâCWA Section 311 CWA Section 311(b)(2)(A) authorizes EPA to promulgate a rule designating as a "hazardous substance" any element or compound that, when discharged as specified under the section, would present an imminent and substantial danger to public health or welfare, including but not limited to fish, shellfish, wildlife, shorelines, and beaches. EPA is authorized to revise the list of hazardous substances subject to these criteria as may be appropriate. EPA finalized the initial list of hazardous substances in 1978 and thereafter revised the list in 1979, 1989, and 2011. Pursuant to Section 311(b)(4), EPA established "harmful" quantities for these substances that are subject to the reporting of discharges prohibited under Section 311(b)(3). Section 311(b)(5) requires a person in charge of a vessel or facility to notify the National Response Center, administered by the U.S. Coast Guard, as soon as that person has knowledge of a discharge. Discharges permitted under other provisions of the CWA or otherwise allowable under certain other federal, state, and local regulations are excluded from reporting under CWA Section 311. CWA Section 311(c) authorizes federal actions to remove a prohibited discharge of a hazardous substance (or oil). CWA Section 311(f) establishes liability for the recovery of removal costs, including restoration of damaged natural resources. Section 311(e) authorizes enforcement orders to require a responsible party to abate an imminent and substantial threat to public health or welfare from a prohibited discharge, or threat of a harmful discharge, of a hazardous substance (or oil). Implications of CWA Designations on CERCLA If EPA were to designate a CEC, or any contaminant, as a toxic pollutant or hazardous substance under the CWA, that contaminant would, by statutory definition, be defined as a hazardous substance under CERCLA. CERCLA authorizes federal actions to respond to a release, or substantial threat of a release, of a hazardous substance into the environment in coordination with the states. CERCLA similarly authorizes response actions for releases of other pollutants or contaminants that may present an imminent and substantial danger to public health or welfare. CERCLA also establishes liability for response costs and natural resource damages but only for hazardous substances and not for other pollutants or contaminants. CERCLA response authority is available for releases of pollutants or contaminants but without liability to require a potentially responsible party to perform or pay for response actions. Designating a CEC as a toxic pollutant or hazardous substance under the CWA would have the effect of establishing liability for their release as a hazardous substance under CERCLA. However, releases in compliance with a CWA permit would be exempt from liability under CERCLA as a "federally permitted release" based on the premise that the permit requirements would mitigate potential risks. CWA Section 311 also establishes liability for releases of hazardous substances, but CERCLA liability and enforcement mechanisms are broader than the CWA. In practice, CERCLA has been the principal federal authority used to respond to discharges of hazardous substances into surface waters and to enforce liability, although the enforcement authorities of CWA Section 311 remain available to EPA. For a broader discussion of CERCLA, see CRS Report R41039, Comprehensive Environmental Response, Compensation, and Liability Act: A Summary of Superfund Cleanup Authorities and Related Provisions of the Act , by David M. Bearden. Legislation in the 116th Congress Recent congressional interest in CECs has largely focused on addressing one particular group of CECsâPFASâand addressing them through several statutes, such as the Safe Drinking Water Act. However, legislation in the 116 th Congress proposes to address PFAS using CWA authorities. H.R. 3616 âthe Clean Water Standards for PFAS Act of 2019âand Section 330A of H.R. 2500 , the House-passed version of the NDAA for FY2020, would direct EPA to add PFAS to the CWA Toxic Pollutant List and publish ELGs and pretreatment standards for PFAS within specified time frames. In addition, Section 330G of the House-passed version of the NDAA bill, Sections 6731-6736 of S. 1790 (the Senate NDAA bill), H.R. 1976 , and S. 950 would direct the U.S. Geological Survey (USGS) to carry out nationwide samplingâin consultation with states and EPAâto determine the concentration of perfluorinated compounds in surface water, groundwater, and soil. These bills would also require USGS to prepare a report for Congress and provide the sampling data to the EPA as well as other federal and state regulatory agencies that request it. Additionally, the bills would require the data to be used to "inform and enhance assessments of exposure, likely health and environmental impacts, and remediation priorities." Some Members have also introduced legislation to require comprehensive PFAS toxicity testing ( H.R. 2608 ). In addition to focusing on PFAS, several bills proposed in the 116 th Congress look more broadly at how to address CECs. For example, some aim to improve federal coordination and research and support states in addressing emerging contaminants. S. 1507 , S. 1251 , and Sections 6741-6742 of S. 1790 would direct the White House Office of Science and Technology Policy to establish a National Emerging Contaminant Research Initiative. The bills would also direct EPA to develop a program to provide technical assistance and support to states for testing and analysis of emerging contaminants and establish a database of resources available through the program to assist states with testing for emerging contaminants. While these efforts are more focused on CECs in drinking water, the bill directs the EPA to ensure that the database is available to groups that have interest in emerging contaminants, including wastewater utilities. Conclusion While Congress is currently debating how to best address the concerns related to widespread detections of PFAS, attention to other emerging contaminants (e.g., microplastics and algal toxins) has also increased with the availability of new detection methods and increased monitoring. Observers note that in the coming years, other CECs will likely emerge and prompt similar calls for immediate action to protect public health and the environment. Many observers argue that federal actions to address CECs currently tend to be reactive rather than proactive. Many of these observers assert that more focus and attention is needed on assessing the toxicity of chemical substances before they are introduced into commerce. Congress is currently considering legislation to improve federal coordination and responses to CECs. Specific to the CWA, some observers advocate for oversight to identify and address potential gaps or barriers in CWA authorities and processes that make it difficult for EPA and states to quickly respond when CECs are detected. Other observers assert that EPA could better use its existing authorities to address CECs. For example, EPA has not updated its ELGs for certain industrial categories in decades. Accordingly, some observers assert that various ELGs do not reflect advancements in science or technology that could lead to new effluent limitations for CECs. Similarly, some stakeholders assert that EPA could better prioritize which CECs warrant water quality criteria development. EPA's ability to address these and other recommendations depends on the availability of resources, treatment technologies, and scientific and economic data. Moving forward, Congress may be interested in evaluating EPA appropriations for the CWA programs that support EPA's efforts to address discharges of CECs. Congress may also be interested in overseeing the Administration's implementation of these programs.	Summary:	gov_report	1,024	null	44
crs_R46195	crs_R46195_0	You are given a report by a government agency. Write a one-page summary of the report. Report: T he Gulf of Mexico Energy Security Act of 2006 (GOMESA) altered federal offshore oil and gas leasing policy in the U.S. Gulf of Mexico. The law imposed an oil and gas leasing moratorium through June 30, 2022, throughout most of the Eastern Gulf of Mexico (off the Florida coast) and a small part of the Central Gulf. In other parts of the Gulf of Mexico, the law established a framework for sharing revenues from certain qualified oil and gas leases with the "Gulf producing states" of Alabama, Louisiana, Mississippi, and Texas, as well as with a nationwide outdoor recreation programâthe Land and Water Conservation Fund's (LWCF's) state assistance program. Several aspects of GOMESA have generated interest in the 116 th Congress. As the 2022 expiration date for the leasing moratorium in the Eastern Gulf approaches, the Department of the Interior's (DOI's) Bureau of Ocean Energy Management (BOEM) has begun to plan for offshore leasing in this area following the moratorium's expiration. BOEM's draft proposed five-year oil and gas leasing program for 2019-2024 would schedule new lease sales in the expired moratorium area starting in 2023. Some Members of Congress seek to forestall new lease sales by extending the moratorium beyond 2022; others support allowing it to expire on the currently scheduled date. On September 11, 2019, the House passed H.R. 205 , which would make the GOMESA moratorium permanent. Congress is weighing the potential for development of hydrocarbon resources in the Eastern Gulf against competing uses of the area for military testing and training, commercial fishing, and recreation. The debate encompasses questions of regional economic livelihoods and national energy and military security, as well as environmental concerns centered on the threat of oil spills and the potential contributions to climate change of oil and gas development. GOMESA's revenue-sharing provisions also have generated debate and interest in the 116 th Congress. The law entered a second revenue-sharing phase in FY2017âoften referred to as GOMESA's "Phase II"âin which qualified leasing revenues from an expanded geographic area are shared with the states and with the LWCF. Phase II has resulted in higher revenue shares than in the law's first decade (FY2007-FY2016). Revenue sharing from the added Phase II areas is capped for most years at $500 million annually for the Gulf producing states and the LWCF combined, and some Members of Congress seek to raise or eliminate this cap. In the 115 th Congress, P.L. 115-97 increased the cap to $650 million for FY2020 and FY2021. In addition to changing the cap, some Members have advocated to increase the percentage of revenues shared with the Gulf Coast states and to increase the set of qualified leases from which revenues can be shared, as well as to add an additional state (Florida) to the revenue-sharing arrangement. Other bills have proposed new uses of Gulf oil and gas revenues for various federal programs and purposes outside of revenue sharing, and some stakeholders have proposed to end GOMESA state revenue sharing altogether. Debate has centered on the extent to which these revenues should be shared with coastal states versus used for broader federal purposes, such as deficit reduction or nationwide federal conservation programs. Some Members of Congress and other stakeholders have made the case that the coastal states should receive a higher revenue share, given costs incurred by these states and localities to support extraction activities. These stakeholders have compared GOMESA revenue sharing with the onshore federal revenue-sharing program, where states receive a higher share of the federal leasing revenues than is provided under the GOMESA framework. Other Members of Congress, as well as the Obama and Trump Administrations at times, have contended that revenues generated in federal waters belong to all Americans, and revenue distribution should reflect broader national needs. This report provides brief background on Gulf of Mexico oil and gas development, discusses key provisions of GOMESA, and explores issues related to the Eastern Gulf moratorium and Gulf state revenue sharing. The report discusses various legislative options and proposals for amending GOMESA, as well as scenarios for future leasing if the law continues unchanged. Background The Gulf of Mexico has the most mature oil and gas development infrastructure on the U.S. outer continental shelf (OCS), and almost all U.S. offshore oil and gas production (approximately 98%) takes place in this region. Additionally, the Gulf contains the highest levels of undiscovered, technically recoverable oil and gas resources of any U.S. OCS region, according to BOEM. The Office of Natural Resources Revenue (ONRR) estimated federal revenues from offshore oil and gas leases in the Gulf at $5.51 billion for FY2019, out of a total of $5.57 billion for all OCS areas ( Table 1 ). From FY2009 to FY2018, annual revenues from federal leases in the Gulf ranged from a high of $8.74 billion in FY2013 (out of $9.07 billion total OCS oil and gas revenues for that year) to a low of $2.76 billion in FY2016 (out of $2.79 billion total OCS oil and gas revenues for that year). Changing prices for oil and gas are the most significant factors in these revenue swings. BOEM divides the Gulf into three planning areas: Eastern, Central, and Western. Most of the oil and gas development has taken place in the Central and Western Gulf planning areas. This is due to stronger oil and gas resources in those areas (as compared with the Eastern Gulf) and to leasing restrictions in the Eastern Gulf imposed by statutes and executive orders before GOMESA's enactment. Eastern Gulf Leasing Prohibitions Prior to GOMESA Congressional leasing restrictions in some parts of the Eastern Gulf date from the 1980s. Prompted by concerns of some coastal states, fishing groups, and environmentalists, Congress mandated a series of leasing moratoria in certain parts of the OCS, which grew to include the Eastern Gulf of Mexico. The FY1984 Interior Appropriations Act prohibited leasing in any Eastern Gulf areas within 30 nautical miles of the baseline of the territorial sea and in other specified Eastern Gulf blocks. From FY1989 through FY2008, the annual Interior appropriations laws consistently included moratoria in the portion of the Eastern Gulf south of 26Â° N latitude and east of 86Â° W longitude. Separately, President George H. W. Bush issued a presidential directive in 1990 ordering DOI not to conduct offshore leasing or preleasing activity in multiple parts of the OCSâincluding portions of the Eastern Gulfâuntil after 2000. In 1998, President Bill Clinton used his authority under Section 12(a) of the Outer Continental Shelf Lands Act (OCSLA) to extend the presidential offshore leasing prohibitions until 2012. President Clinton's order expanded the portion of the Eastern Gulf withdrawn from leasing consideration. The withdrawals designated during the Clinton Administration lasted until President George W. Bush modified them in 2008 to open multiple withdrawn areas to leasing. By that time, GOMESA had been enacted, so President Bush's action did not open the Eastern Gulf moratorium area to leasing. Distribution of Gulf Revenues Prior to GOMESA Before GOMESA's enactment, federal revenues from oil and gas leasing in most parts of the Gulf were not shared with coastal states. The exception was revenue from leases in certain nearshore federal waters: under Section 8(g) of the OCSLA (as amended), states receive 27% of all OCS receipts from leases lying wholly or partly within three nautical miles of state waters. Gulf Coast states argued for a greater share of the OCS revenues based on the significant effects of oil and gas development on their coastal infrastructures and environments. The states compared the offshore revenue framework to that for onshore public domain leases. Under the Mineral Leasing Act of 1920, which governs onshore oil and gas development, states generally receive 50% of all rents, bonuses, and royalties collected throughout the state, less administrative costs. GOMESA's Provisions GOMESA was signed into law on December 20, 2006. Sections 101 and 102 of the law contain a short title and definitions. Section 103 directs that two areas in the Central and Eastern Gulf be offered for oil and gas leasing shortly after enactment. These mandated lease sales took place in 2007-2009, and this provision of GOMESA has not been a focus of current congressional interest. Current interest has focused on Section 104 of the law, which imposes a moratorium on oil and gas leasing in certain parts of the Gulf, and Section 105, which contains provisions for revenue sharing from qualified leases with four states and their coastal political subdivisions, as well as with the LWCF's state assistance program. Section 104: Eastern Gulf Moratorium Section 104 of GOMESA states that, from the date of the law's enactment through June 30, 2022, the Secretary of the Interior is prohibited from offering certain areas, primarily in the Eastern Gulf, for "leasing, preleasing, or any related activity." The moratorium encompasses (1)Â areas east of a designated Milit ary Mission Line , defined in the law as the north-south line at 86Â°41Ê¹Â W longitude; (2) all parts of the Eastern Gulf planning area that lie within 125 miles of the Florida coast; and (3) certain portions of the Central Gulf planning area, including any parts within 100 miles of the Florida coast, as well as other specified areas. The resulting total moratorium formed by these overlapping areas is shown in gray in Figure 1 . Section 104 also allows for holders of existing oil and gas leases in some parts of the moratorium area to exchange the leases for a bonus or royalty credit to be used in the Gulf of Mexico. Section 104 prohibits not only lease sales in the moratorium area but also "preleasing" and other related activities. BOEM has clarified that such preleasing and related activities are not interpreted to include geological and geophysical (G&G) activitiesâsuch as seismic surveysâundertaken to locate resources with the potential to produce commercial quantities of oil and gas. BOEM interprets GOMESA to allow these G&G surveys in the moratorium area. The moratorium imposed by Section 104 expires on June 30, 2022. The 116 th Congress is debating whether to allow the moratorium to expire as scheduled or to amend GOMESA (or enact other legislation) to potentially further restrict federal oil and gas activity in this area. The following sections discuss scenarios for future leasing in the area under current provisions, legislative proposals to provide for other outcomes, and selected issues for Congress related to the moratorium provisions. Scenario Under Current Statutory Framework Absent further action by Congress, after June 30, 2022, the executive branch could potentially offer new oil and gas leases in the expired moratorium area. Under the OCSLA, the Secretary of the Interior could decide to include or exclude the area in future five-year offshore oil and gas leasing programs, based on specified criteria. The OCSLA also gives the President discretion to withdraw the area, temporarily or indefinitely, from leasing consideration, which would render it unavailable for inclusion in a DOI leasing program. The Trump Administration has indicated interest in pursuing oil and gas leasing in the GOMESA moratorium area after the moratorium's expiration. BOEM's initial draft of a five-year oil and gas leasing program for 2019-2024 (referred to as the "draft proposed program" or DPP) includes two lease sales in the moratorium area, one in 2023 and one in 2024. The DPP proposes to offer all available tracts in the former moratorium area after the expiration. BOEM also indicated that it would analyze two secondary options that would exclude some portions of the moratorium area from the lease sales ( Figure 2 ). First, BOEM is analyzing a potential "coastal buffer" off Floridaâat distances of 50, 75, 100, or 125 milesâto accommodate military activities and nearshore use. Second, BOEM is separately analyzing a potential 15-mile leasing buffer offshore of Baldwin County, AL, to minimize visual and other impacts to onshore coastal areas. The next draft of the 2019-2024 program is expected to reflect the results of BOEM's analysis. Under the planning process for the program, which is governed by requirements of both the OCSLA and the National Environmental Policy Act, sales listed in the DPP could be retained, modified, or removed in subsequent drafts of the program. In deciding whether to include the sales (either in their current form or with modifications) in the final leasing program, the Secretary of the Interior must weigh economic, social, and environmental criteria. Among the factors the Secretary must consider under the OCSLA are coastal state governors' views on leasing off their coasts. Recent governors of Florida, the state most closely adjacent to the moratorium area, generally have expressed opposition to leasing in this area. Governors of other Gulf Coast statesâAlabama, Louisiana, Mississippi, and Texasâgenerally have expressed support for oil and gas leasing in the Eastern Gulf. The Secretary also must consider the views of other affected federal agencies. One key agencyâDODâhistorically has opposed new leasing in the area, due to DOD's use of this part of the Gulf as a military testing and training ground (see " Military Readiness "). Both DOD and the Gulf producing states, along with some Members of Congress and many other stakeholders, submitted public comments on the 2019-2024 DPP. These comments are to be taken into account in the second draft of the program. Another round of public comment is expected to be solicited before the program could be finalized. The oil and gas industry has indicated interest in leasing in the moratorium area. Some industry representatives have stated that the Eastern Gulf represents a more attractive leasing prospect than other OCS areas currently unavailable for leasing (e.g., the Pacific and Atlantic regions) because data on the Eastern Gulf are better developed than for these other areas, and nearby infrastructure is already in place to facilitate exploration and development. Industry representatives have expressed particular interest in the deepwater Norphlet play, which spans parts of the Eastern and Central Gulf. Legislative Proposals A number of legislative proposals in the 116 th Congress have sought to extend GOMESA's moratorium or permanently prohibit leasing in the moratorium area. By contrast, other legislation would mandate lease sales in the area directly following the moratorium's current expiration date. Table 2 summarizes provisions of relevant 116 th Congress bills. Two of these bills, H.R. 4294 and S. 13 , include provisions affecting GOMESA revenue sharing, discussed further in Table 5 . One proposal related to the moratorium has passed the House of Representatives in the 116 th Congress: H.R. 205 , the Protecting and Securing Florida's Coastline Act of 2019. The bill would amend GOMESAâto extend the Eastern Gulf moratorium indefinitely, thus precluding future oil and gas leasing in the area. In its report on the bill, the House Natural Resources Committee stated that a continued moratorium is necessary because leasing in the Eastern Gulf would compromise military readiness and "pose existential threats to Florida's tourism, fishing, and recreation economy, which rely on clean water and healthy beaches." In dissenting views, some committee members contended that oil and gas leasing in the area could successfully coexist with fishing, tourism, and military operations, and pointed to the role of Gulf oil and gas revenues in funding environmental restoration activities and land protection. Bills in earlier Congresses sought other types of outcomes related to the GOMESA moratorium. For example, some legislation would have enabled leasing in portions of the moratorium area before the 2022 expiration date, effectively shrinking the moratorium area. Other legislation would have prohibited some activities in the moratorium area that are not currently restricted by GOMESA, such as seismic surveys or research on potential areas for offshore drilling. These proposals have not been included to date in 116 th Congress legislation. Selected Issues Economic and Budgetary Considerations An extension of GOMESA's leasing prohibitions could result in a loss to the government of future federal revenues (to the extent that leasing and commercial production would otherwise take place when the moratorium expires). Also, some oil and gas industry advocates have contended that future development in the Eastern Gulf could contribute billions of dollars annually to the nation's gross domestic product, mainly through contributions to Gulf state economies, which they contend would be lost were the moratorium to continue. By contrast, some in the commercial fishing, tourism, and recreation sectors have focused on potential economic costs to these sectors if oil and gas development takes place off the coast of Florida, with particular emphasis on potential financial losses if a major oil spill were to occur. They point to estimates showing significant costs to these industries from the 2010 Deepwater Horizon oil spill. Other stakeholders express concern that any oil and gas activities in these areas would contribute to greenhouse gas emissions and human-induced climate change, with accompanying direct and indirect costs. The Congressional Budget Office (CBO) has estimated certain budgetary effects of a moratorium extension in relation to budget projections under existing law. CBO has estimated that bills to extend the moratorium would reduce offsetting receipts and thus increase direct federal spending. As a result, such bills may be subject to certain budget points of order unless offset or waived. For example, for the version of H.R. 205 reported by the House Committee on Natural Resources, CBO estimated that the bill's extension of GOMESA's moratorium would increase direct spending by $400 million over 10 years. Military Readiness The extent to which the GOMESA moratorium is needed for U.S. military readiness also has been at issue. The area east of the Military Mission Line in the Eastern Gulf provides about 101,000 square miles of surface area and overlying air space, which is the largest overwater DOD test and training area in the continental United States. DOD historically has expressed a need for an oil and gas leasing moratorium in this area. For instance, in 2006, DOD stated that its testing and training activities in the Eastern Gulf were "intensifying" and requiredâ"large, cleared safety footprints free of any structures on or near the water surface." In 2017, DOD wrote that the agency "cannot overstate the vital importance of maintaining this moratorium.... Emerging technologies such as hypersonics, autonomous systems, and advanced sub-surface systems will require enlarged testing and training footprints, and increased DoD reliance on the Gulf of Mexico Energy Security Act's moratorium beyond 2022." More recently, in a 2018 report to Congress on preserving military readiness in the Eastern Gulf, DOD wrote: No other area in the world provides the U.S. military with ready access to a highly instrumented, network-connected, surrogate environment for military operations in the Northern Arabian Gulf and Indo-Pacific Theater. If oil and gas development were to extend east over the [Military Mission Line], without sufficient surface limiting stipulations and/or oil and gas activity restrictions mutually agreed by the DoD and Department of Interior (DoI), military flexibility in the region would be lost and test activities severely affected. Some Members of Congress and other stakeholders have interpreted the wording of the 2018 reportâparticularly its phrase "without sufficient surface limiting stipulations and/or oil and gas activity restrictions"âas signaling a greater DOD openness to oil and gas activities in the moratorium area than had been expressed in some earlier DOD communications. The phrasing might be read to suggest that military readiness and oil and gas development could be mutually accommodated, given appropriate stipulations and restrictions. Oil and gas leases awarded in the Central and Western Gulf often contain stipulations related to military activities, such as those requiring the lessee to assume risks of damage from military activities, to control electromagnetic emissions in defense warning areas, to consult with military commanders before entering some areas, and/or to evacuate areas as needed for military purposes. BOEM also typically reserves the right to temporarily suspend a lease in the interest of national security. The 2018 report does not clarify what types of lease stipulations and restrictions might be necessary to accommodate the more intensive testing and training activities in the Eastern Gulf. The report states that some military activities in this area may be incompatible with the presence of fixed or mobile oil platforms. The report expresses concerns that increased vessel traffic and underwater noise could jeopardize some military activities. It also discusses concerns about potential foreign observation of DOD activities, if foreign entities are allowed to control offshore assets or otherwise conduct business near military ranges in the Eastern Gulf. If these military concerns were to lead to more stringent restrictions on oil and gas operations than are mandated in other parts of the Gulf, a question would be how such restrictions might affect industry interest in bidding on leases in the Eastern Gulf. In its cost estimate for H.R. 205 , CBO identified defense-related constraints (and the potential incompatibility of some development with Florida's Coastal Management Program) as factors that could reduce the value of Eastern Gulf leases to industry bidders. However, some industry representatives have expressed consistent interest in leasing in the area and have contended that economic returns on leases in this area would be substantial, despite potential restrictions related to military activities. Section 105: Revenue Sharing Section 105 of GOMESA provides for federal revenues from certain qualified leases in the Gulf of Mexico to be shared under specified terms with four Gulf producing statesâAlabama, Louisiana, Mississippi, and Texasâand their "coastal political subdivisions" or CPSs (e.g., coastal counties or parishes), as well as with the LWCF state assistance program. Specifically, each year the Secretary of the Treasury is to deposit 50% of qualified revenues in a special account (the remaining 50% are deposited in the General Fund of the U.S. Treasury as miscellaneous receipts). From this special account, the Secretary disburses 75% of funds to the Gulf producing states and their CPSs, and 25% to the LWCF state assistance program. Accordingly, of the total qualified revenues in a given year, the states and CPSs receive 37.5% (i.e., 75% of the 50% in the special account), and the LWCF receives 12.5% (25% of the 50%). The law's definition of "qualified" OCS revenues differs for the first decade after GOMESA's enactment (FY2007-FY2016) versus for subsequent years. For FY2007-FY2016 (often referred to as GOMESA's Phase I), the law defines qualified OCS revenues to include all bonus bids, rents, royalties, and other sums due and payable to the United States from leases in the Eastern Gulf and the Central Gulf's 181 South Area entered into on or after the date of GOMESA's 2006 enactment. These are the relatively small areas shown as areas A and B in Figure 1 . For FY2017 and beyond (Phase II), the geographic area of qualified revenues expands. In addition to revenues from post-2006 leases in the Phase I areas, the qualified revenues in Phase II include those from post-2006 leases in the Central Gulf's portion of the 181 Area, shown as areaÂ C in Figure 1 . The Phase II qualified revenues also include the "2002-2007 planning area"âthe large area shown in yellow in Figure 1 , encompassing most of the Western and Central Gulf, where the bulk of production takes place. Accordingly, revenues qualified for sharing in Phase II are likely to be notably higher than in Phase I ( Table 3 ). For the added Phase II areas, Section 105 stipulates that the total amount of qualified revenues made available each year to the states and their CPSs and the LWCF (collectively) shall not exceed $500 million for each of FY2016-FY2055. A later law, P.L. 115-97 , raised the cap to $650 million for two of these years, FY2020 and FY2021. Given the percentage distributions specified in the law for each recipient, the amounts that can be shared with states and their CPSs from the added Phase II areas are capped at $375.0 million in most years (and $487.5 million in FY2020 and FY2021). The amounts that can be shared with the LWCF are capped at $125.0 million in most years (and $162.5 million in FY2020 and FY2021). Phase II began with FY2017 revenues, but GOMESA specifies that revenues shall be shared with recipients in the fiscal year immediately following the fiscal year in which they are received. Thus, in terms of payments, the first fiscal year reflecting Phase II revenue sharing was FY2018. The shared revenues rose notably in that year compared with previous years. Table 3 shows GOMESA revenue distributions since the law's enactment, with the transition from Phase I distributions to Phase II distributions occurring between FY2017 and FY2018. GOMESA directs the Secretary of the Interior to establish a formula to allocate each year's qualified state revenues among the four Gulf producing states and their CPSs. The allocations to each state primarily depend on its distance from leased tracts, with states closer to the leased tracts receiving a higher share. The law additionally provides that each state must receive an annual minimum of at least 10% of the total amount available to all the Gulf producing states for that year. Further, GOMESA directs that the Secretary shall pay 20% of the allocable share of each Gulf producing state to the state's CPSs. See the box below for additional details on the state allocations. GOMESA authorizes the states and CPSs to use revenues for the following purposes: Projects and activities for the purposes of coastal protection, including conservation, coastal restoration, hurricane protection, and infrastructure directly affected by coastal wetland losses. Mitigation of damage to fish, wildlife, or natural resources. Implementation of a federally approved marine, coastal, or comprehensive conservation management plan. Mitigation of the impact of OCS activities through the funding of onshore infrastructure projects. Planning assistance and the administrative costs of complying with GOMESA. (No more than 3% of a state or CPS's revenues may be used for this purpose.) The following sections discuss the scenario for GOMESA revenue sharing under the law's current provisions, summarize legislative proposals for changes, and explore selected issues. Scenario Under Current Statutory Framework Under GOMESA, revenue sharing with the states and LWCF continues indefinitely, and the annual cap on shared revenues from the Phase II areas continues through FY2055. After that year, all qualified Gulf revenues would be shared under the current formulaâ37.5% to states and their CPSs and 12.5% to the LWCFâregardless of whether the shared amount from the Phase II areas exceeds $500 million. DOI, in its annual budget justifications, develops five-year projections of qualified GOMESA revenues. Table 4 shows DOI projections for FY2020-FY2024 shared revenues (which are half of all qualified revenues), by revenue collection year. The revenues collected in a given year would be shared with the states and LWCF in the following fiscal year. In general, the DOI projections for a given year have not always been consistent over time. Changing oil prices have been a major factor in revised projections. Under the current scenario, the majority of the moratorium areaâthe portion shown in gray in Figure 1 âdoes not qualify for revenue sharing, even after the moratorium ends in June 2022. Instead, any revenues from oil and gas leasing and development in this area after the moratorium expires would go entirely to the Treasury. Also, GOMESA does not provide for revenue sharing with Florida, although some of the qualified revenue-sharing areasâsuch as portions of the 181 Areaâare closer to Florida than to the other Gulf producing states. Legislative Proposals In the 116 th Congress, several bills would amend GOMESA to increase the portion of qualified revenues shared with the Gulf producing states by raising the states' percentage share, eliminating the revenue-sharing cap, or both. Some legislation also would expand the purposes for which states may use the GOMESA revenues, modify the uses of the LWCF share, or add Florida to the revenue-sharing arrangement. Table 5 describes selected relevant bills and their provisions. None of the bills has been reported from committee in the 116 th Congress. In contrast with bills that would increase the state revenue share, some legislative proposals in earlier Congresses would have ended state revenue sharing under GOMESA. For example, in the 114 th Congress, would have amended GOMESA to provide that 87.5% of qualified revenues under the law would be deposited in the Treasury's General Fund, while 12.5% would continue to be provided for LWCF financial assistance to states. This proposal is similar to some legislative proposals in DOI budget requests under the Obama and Trump Administrations (see " Determining the Appropriate State Share "). Selected Issues Determining the Appropriate State Share Members of Congress differ in their views on the extent to which Gulf Coast states should share in revenues derived from oil and gas leasing in federal areas of the Gulf. State officials from the Gulf producing states and some Members of Congress have expressed that the Gulf producing states should receive a higher share than is currently provided under GOMESA, given the costs they incur to support offshore extraction activities. These stakeholders have argued that the revenues are needed to mitigate environmental impacts and to maintain the necessary support structure for the offshore oil and gas industry. For example, at a 2018 hearing of the House Committee on Natural Resources, former Senator Mary Landrieu stated: "It is important to note that revenue sharing was established â¦ to recognize the contributions that states and localities make to facilitate the extraction and production of these resources, including the provision of infrastructure to enable the federal activity: transportation, hospitals, schools and other necessary governmental services." Advocates have emphasized that Gulf Coast areas, especially coastal wetlands, face significant environmental challenges, owing in part to hydrocarbon development (among other activities). These advocates have contended that additional federal revenues are critical to address environmental challenges and economic impacts of wetland loss. Advocates point to a disparity between the 37.5% state share provided under GOMESA and the 50% share of revenues that most states receive from onshore public domain leases under the Mineral Leasing Act. They contend that a comparable state revenue share under GOMESA would significantly contribute to coastal wetland restoration, given GOMESA's requirement that the Gulf producing states use the funding to address coastal protection, damage mitigation, and restoration (and given comparable requirements under some state laws). By contrast, some other Members of Congress, as well as the Obama and Trump Administrations at times, have contended that GOMESA revenue sharing with the states should be reduced or eliminated to facilitate use of these revenues for broader national purposes. They have argued that, since the OCS is a federal resource, the benefits from offshore revenues should accrue to the nation as a whole, rather than to specific coastal states. Under the Obama Administration, DOI budget requests for FY2016 and FY2017 recommended that Congress repeal GOMESA state revenue-sharing payments and direct a portion of the savings to programs that provide "broad â¦ benefits to the Nation," such as a proposed new Coastal Climate Resilience Program "to provide resources for at-risk coastal States, local governments, and their communities to prepare for and adapt to climate change." Legislation in the 114 th Congress ( S. 2089 ; see " Legislative Proposals ") would have amended GOMESA to eliminate the state revenue sharing and provide for the state share to go to the Treasury's General Fund. For FY2018, the Trump Administration proposed that Congress repeal GOMESA's state revenue-sharing provisions, in order to "ensure [that] the sale of public resources from Federal waters owned by all Americans, benefit all Americans." The Trump Administration has not included similar proposals in subsequent budget requests, and no legislation to reduce or eliminate GOMESA state revenue sharing has been introduced to date in the 116 th Congress. Set of Leases Qualified for Revenue Sharing Although Phase II of GOMESA considerably expanded the set of leases contributing to revenue sharing, some Gulf leases still do not qualify, because the law applies only to leases that were entered into on or after the date of GOMESA's enactment (December 20, 2006). It appears from 2019 leasing data maintained by BOEM that approximately 61% of the more than 2,500 active leases in the Gulf of Mexico were entered into on or after the enactment date, and thus would qualify for revenue sharing under GOMESA's current terms. However, the majority of these newer leases are not producing oil and gas; and leases awarded before GOMESA's enactmentâwhich do not qualifyâcontinue to contribute a substantial portion of production royalties. For this reason, the percentage of Gulf revenues subject to GOMESA sharing is much smaller than the percentage of Gulf leases subject to GOMESA sharing. For example, of federal offshore revenues disbursed in FY2019 (the high majority of which come from the Gulf), GOMESA-qualified revenuesâincluding those distributed to states and their CPSs, the LWCF state grant program, and the Treasury combinedâconstituted 18% of the total. The percentage of total revenues that qualify for sharing under GOMESA might be expected to increase over time, to the extent that older leases gradually terminate and current and future leases begin producing. Some Members of Congress have proposed that GOMESA's terms be altered to include an expanded set of leases in the qualified sharing group. For instance, in the 116 th Congress, S. 2418 would amend GOMESA to define the qualified leases as those entered into on or after October 1, 2000, rather than after GOMESA's 2006 enactment. According to BOEM data as of November 2019, this would more than double the number of producing leases eligible for GOMESA revenue sharing (although the addition in total leases would be relatively small). The result could be a higher revenue share with the states and their CPSs and the LWCF state grant program. Some other Members do not favor this type of change because it could reduce the portion of offshore revenues going to the Treasury for other federal purposes. Revenue Amounts and Adequacy for Legislative Purposes Offshore oil and gas revenues support a variety of federal and state activities, through amounts deposited annually in the LWCF and the Historic Preservation Fund (HPF) and through revenues shared with states under revenue-sharing laws. Revenue totals have fluctuated from year to year ( Table 1 ), raising questions about whether future revenues will be adequate to support these various activities and whether new legislation for offshore revenue distribution would strain available amounts. For example, some Members of Congress have considered whether raising GOMESA's state revenue share would result in insufficient funds to meet statutory requirements for deposits to the LWCF and HPF. Alternatively, some Members have questioned whether proposals to use offshore revenues for new conservation programs would reduce state sharing under GOMESA and jeopardize programs supported by the state-shared funds. Thus far, in each year since GOMESA's enactment, OCS revenues have been sufficient to provide for all distributions under current law. If bills in Table 5 were enacted to raise the GOMESA state revenue share to 50% and eliminate the revenue-sharing cap for states, it appears that, based on DOI projections for FY2020-FY2024, OCS revenues remaining after state sharing would still be more than sufficient to meet statutory requirements for deposits to the LWCF and HPF in these years. Various economic factors or policy decisions could affect these DOI projections, and under some theoretical scenarios, enactment of bills to increase the state share could affect the sufficiency of revenues to cover other legislative requirements. Similarly, under some scenarios, legislative proposals to fund new conservation programs with offshore revenues could affect amounts shared with the states under GOMESA. Whether this would occur would depend partly on the terms of the legislative proposals. For example, S. 500 and H.R. 1225 in the 116 th Congress would establish a new deferred maintenance fund for specified federal lands supported partly by offshore energy revenues. These proposals address the issue of revenue availability by specifying that the new deferred maintenance fund would draw only from miscellaneous receipts deposited to the Treasury after other dispositions are made under federal law. That is, if revenues were insufficient to provide for the funding amounts specified under these bills along with the other distributions required in law, it appears that the requirements of current laws (including GOMESA) would be prioritized. Also relevant are proposals by some Members of Congress and other stakeholders to significantly curtail or end OCS oil and gas leasing, in response to climate change concerns. Depending on the extent to which offshore production decreased, such policy changes could result in an insufficiency of revenues to meet all statutory requirements, especially over the long term as production from existing leases diminished. Some supporters of reducing or eliminating federal offshore oil and gas leasing have suggested that other revenue sources, such as from an expansion of renewable energy leasing on federal lands, should be found for desired federal programs. Some opponents of curtailing offshore oil and gas leasing have pointed to the revenue implications as an argument against such actions. Budgetary Considerations Bills that would increase the state share of GOMESA revenuesâby giving the states a higher revenue percentage, eliminating revenue-sharing caps, or bothâhave been identified by CBO as increasing direct spending. For example, in cost estimates for 115 th Congress legislationâwhich would have made similar state-sharing changes to those proposed in H.R. 3814 , H.R. 4294 , and S. 2418 ( Table 5 )âCBO estimated that these changes would increase direct spending of OCS receipts by $2.1 billion over a 10-year period. As a result, such legislation may be subject to certain budget points of order unless offset or waived. As of January 2020, CBO has not released cost estimates for the 116 th Congress bills discussed in Table 5 (none of which has been reported from committee), and it is unclear how CBO would estimate costs associated with those bills or whether some provisions in those bills might be estimated to offset costs of other provisions. For example, H.R. 4294 contains provisions to repeal presidential withdrawals of offshore areas from leasing consideration and to facilitate offshore wind leasing in U.S. territories, among others. CBO scored similar provisions in 115 th Congress bills as increasing offsetting receipts (and thus partly offsetting bill costs). Florida and Revenue Sharing Under GOMESA's current provisions, Florida is not among the Gulf producing states eligible for revenue sharing. Some proposals, including S. 13 in the 116 th Congress, would add Florida to the group of states receiving a revenue share. Because the high majority of Gulf leasing takes place in the Western and Central Gulf planning areas, which do not abut Florida, Florida's share of GOMESA revenues if S. 13 were enacted would likely be lower than those of the other Gulf Coast states, especially Louisiana and Texas. Nonetheless, since GOMESA provides that every Gulf producing state must receive at least 10% of the annual state revenue share, adding Florida to the Gulf producing states would provide at least that portion of GOMESA revenues for Florida and would correspondingly reduce the total available to the other Gulf producing states. Some Florida stakeholders have opposed legislation to add Florida to GOMESA revenue sharing on the basis that doing so could incentivize eventual oil and gas development off Florida. Others support a continued moratorium off Florida and support giving Florida a revenue share from leasing elsewhere in the Gulf. These stakeholders contend that Florida bears risks from oil and gas leasing elsewhere in the Gulf (particularly related to potential oil spills) and so should also see benefits. This position is captured in S. 13 , which would extend the GOMESA moratorium through 2027 and add Florida as a revenue-sharing state. Still others support adding Florida as a revenue-sharing state as part of a broader change to allow leasing and revenue sharing in areas offshore of Florida. Supporters of this approach, including some from the current Gulf producing states, may contend that an increase in the number of states that share GOMESA revenues should be accompanied by a growth in the area qualified for revenue sharing to reduce the likelihood of a smaller share for the original four states. Conclusion The current period is one of transition for the oil and gas leasing framework established by GOMESA for the Gulf of Mexico. First, the Eastern Gulf leasing moratorium is set to expire in 2022, and BOEM is proposing offshore lease sales for the moratorium area starting in 2023. Second, the Gulf leases subject to revenue sharing expanded substantially starting in FY2017, and DOI projects revenues from these areas will approach or reach GOMESA's revenue-sharing cap in FY2024. Congress is considering whether GOMESA's current provisions will best meet federal priorities going forward, or whether changes are needed to achieve various (and sometimes conflicting) national goals. Regarding the moratorium provisions, a key question is whether decisions about leasing in the Eastern Gulf should be legislatively mandated or left to the executive branch to control. Absent any legislative intervention, after June 2022, the President and the Secretary of the Interior are to decide whether, where, and under what terms to lease tracts in the former moratorium area, following the statutory provisions of the OCSLA. Some Members of Congress seek to amend GOMESAâeither to extend the moratorium or to mandate lease sales in the areaârather than deferring to the OCSLA's authorities for executive branch decisionmaking. At stake are questions of regional and national economic priorities, environmental priorities, energy security, and military security. With respect to Gulf oil and gas revenues, GOMESA's current revenue-sharing provisions take into account multiple priorities: mitigating the impacts of human activities and natural processes on the Gulf Coast (through state revenue shares directed to this purpose); supporting conservation and outdoor recreation nationwide (through the LWCF state assistance program); and contributing to the Treasury. For the most part, legislative proposals to change the terms of GOMESA revenue distribution have supported some or all of these priorities but have sought to change the balance of revenues devoted to each purpose. Also at issue are proposals to use the revenues for new (typically conservation-related) purposes outside the GOMESA framework, as well as proposals to substantially reduce or eliminate Gulf oil and gas productionâwith corresponding revenue implicationsâin the context of addressing climate change. The 116 th Congress is debating such questions as it considers multiple measures to amend GOMESA. Summary:	null	96	45,188	45,190	45,190	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: T he Gulf of Mexico Energy Security Act of 2006 (GOMESA) altered federal offshore oil and gas leasing policy in the U.S. Gulf of Mexico. The law imposed an oil and gas leasing moratorium through June 30, 2022, throughout most of the Eastern Gulf of Mexico (off the Florida coast) and a small part of the Central Gulf. In other parts of the Gulf of Mexico, the law established a framework for sharing revenues from certain qualified oil and gas leases with the "Gulf producing states" of Alabama, Louisiana, Mississippi, and Texas, as well as with a nationwide outdoor recreation programâthe Land and Water Conservation Fund's (LWCF's) state assistance program. Several aspects of GOMESA have generated interest in the 116 th Congress. As the 2022 expiration date for the leasing moratorium in the Eastern Gulf approaches, the Department of the Interior's (DOI's) Bureau of Ocean Energy Management (BOEM) has begun to plan for offshore leasing in this area following the moratorium's expiration. BOEM's draft proposed five-year oil and gas leasing program for 2019-2024 would schedule new lease sales in the expired moratorium area starting in 2023. Some Members of Congress seek to forestall new lease sales by extending the moratorium beyond 2022; others support allowing it to expire on the currently scheduled date. On September 11, 2019, the House passed H.R. 205 , which would make the GOMESA moratorium permanent. Congress is weighing the potential for development of hydrocarbon resources in the Eastern Gulf against competing uses of the area for military testing and training, commercial fishing, and recreation. The debate encompasses questions of regional economic livelihoods and national energy and military security, as well as environmental concerns centered on the threat of oil spills and the potential contributions to climate change of oil and gas development. GOMESA's revenue-sharing provisions also have generated debate and interest in the 116 th Congress. The law entered a second revenue-sharing phase in FY2017âoften referred to as GOMESA's "Phase II"âin which qualified leasing revenues from an expanded geographic area are shared with the states and with the LWCF. Phase II has resulted in higher revenue shares than in the law's first decade (FY2007-FY2016). Revenue sharing from the added Phase II areas is capped for most years at $500 million annually for the Gulf producing states and the LWCF combined, and some Members of Congress seek to raise or eliminate this cap. In the 115 th Congress, P.L. 115-97 increased the cap to $650 million for FY2020 and FY2021. In addition to changing the cap, some Members have advocated to increase the percentage of revenues shared with the Gulf Coast states and to increase the set of qualified leases from which revenues can be shared, as well as to add an additional state (Florida) to the revenue-sharing arrangement. Other bills have proposed new uses of Gulf oil and gas revenues for various federal programs and purposes outside of revenue sharing, and some stakeholders have proposed to end GOMESA state revenue sharing altogether. Debate has centered on the extent to which these revenues should be shared with coastal states versus used for broader federal purposes, such as deficit reduction or nationwide federal conservation programs. Some Members of Congress and other stakeholders have made the case that the coastal states should receive a higher revenue share, given costs incurred by these states and localities to support extraction activities. These stakeholders have compared GOMESA revenue sharing with the onshore federal revenue-sharing program, where states receive a higher share of the federal leasing revenues than is provided under the GOMESA framework. Other Members of Congress, as well as the Obama and Trump Administrations at times, have contended that revenues generated in federal waters belong to all Americans, and revenue distribution should reflect broader national needs. This report provides brief background on Gulf of Mexico oil and gas development, discusses key provisions of GOMESA, and explores issues related to the Eastern Gulf moratorium and Gulf state revenue sharing. The report discusses various legislative options and proposals for amending GOMESA, as well as scenarios for future leasing if the law continues unchanged. Background The Gulf of Mexico has the most mature oil and gas development infrastructure on the U.S. outer continental shelf (OCS), and almost all U.S. offshore oil and gas production (approximately 98%) takes place in this region. Additionally, the Gulf contains the highest levels of undiscovered, technically recoverable oil and gas resources of any U.S. OCS region, according to BOEM. The Office of Natural Resources Revenue (ONRR) estimated federal revenues from offshore oil and gas leases in the Gulf at $5.51 billion for FY2019, out of a total of $5.57 billion for all OCS areas ( Table 1 ). From FY2009 to FY2018, annual revenues from federal leases in the Gulf ranged from a high of $8.74 billion in FY2013 (out of $9.07 billion total OCS oil and gas revenues for that year) to a low of $2.76 billion in FY2016 (out of $2.79 billion total OCS oil and gas revenues for that year). Changing prices for oil and gas are the most significant factors in these revenue swings. BOEM divides the Gulf into three planning areas: Eastern, Central, and Western. Most of the oil and gas development has taken place in the Central and Western Gulf planning areas. This is due to stronger oil and gas resources in those areas (as compared with the Eastern Gulf) and to leasing restrictions in the Eastern Gulf imposed by statutes and executive orders before GOMESA's enactment. Eastern Gulf Leasing Prohibitions Prior to GOMESA Congressional leasing restrictions in some parts of the Eastern Gulf date from the 1980s. Prompted by concerns of some coastal states, fishing groups, and environmentalists, Congress mandated a series of leasing moratoria in certain parts of the OCS, which grew to include the Eastern Gulf of Mexico. The FY1984 Interior Appropriations Act prohibited leasing in any Eastern Gulf areas within 30 nautical miles of the baseline of the territorial sea and in other specified Eastern Gulf blocks. From FY1989 through FY2008, the annual Interior appropriations laws consistently included moratoria in the portion of the Eastern Gulf south of 26Â° N latitude and east of 86Â° W longitude. Separately, President George H. W. Bush issued a presidential directive in 1990 ordering DOI not to conduct offshore leasing or preleasing activity in multiple parts of the OCSâincluding portions of the Eastern Gulfâuntil after 2000. In 1998, President Bill Clinton used his authority under Section 12(a) of the Outer Continental Shelf Lands Act (OCSLA) to extend the presidential offshore leasing prohibitions until 2012. President Clinton's order expanded the portion of the Eastern Gulf withdrawn from leasing consideration. The withdrawals designated during the Clinton Administration lasted until President George W. Bush modified them in 2008 to open multiple withdrawn areas to leasing. By that time, GOMESA had been enacted, so President Bush's action did not open the Eastern Gulf moratorium area to leasing. Distribution of Gulf Revenues Prior to GOMESA Before GOMESA's enactment, federal revenues from oil and gas leasing in most parts of the Gulf were not shared with coastal states. The exception was revenue from leases in certain nearshore federal waters: under Section 8(g) of the OCSLA (as amended), states receive 27% of all OCS receipts from leases lying wholly or partly within three nautical miles of state waters. Gulf Coast states argued for a greater share of the OCS revenues based on the significant effects of oil and gas development on their coastal infrastructures and environments. The states compared the offshore revenue framework to that for onshore public domain leases. Under the Mineral Leasing Act of 1920, which governs onshore oil and gas development, states generally receive 50% of all rents, bonuses, and royalties collected throughout the state, less administrative costs. GOMESA's Provisions GOMESA was signed into law on December 20, 2006. Sections 101 and 102 of the law contain a short title and definitions. Section 103 directs that two areas in the Central and Eastern Gulf be offered for oil and gas leasing shortly after enactment. These mandated lease sales took place in 2007-2009, and this provision of GOMESA has not been a focus of current congressional interest. Current interest has focused on Section 104 of the law, which imposes a moratorium on oil and gas leasing in certain parts of the Gulf, and Section 105, which contains provisions for revenue sharing from qualified leases with four states and their coastal political subdivisions, as well as with the LWCF's state assistance program. Section 104: Eastern Gulf Moratorium Section 104 of GOMESA states that, from the date of the law's enactment through June 30, 2022, the Secretary of the Interior is prohibited from offering certain areas, primarily in the Eastern Gulf, for "leasing, preleasing, or any related activity." The moratorium encompasses (1)Â areas east of a designated Milit ary Mission Line , defined in the law as the north-south line at 86Â°41Ê¹Â W longitude; (2) all parts of the Eastern Gulf planning area that lie within 125 miles of the Florida coast; and (3) certain portions of the Central Gulf planning area, including any parts within 100 miles of the Florida coast, as well as other specified areas. The resulting total moratorium formed by these overlapping areas is shown in gray in Figure 1 . Section 104 also allows for holders of existing oil and gas leases in some parts of the moratorium area to exchange the leases for a bonus or royalty credit to be used in the Gulf of Mexico. Section 104 prohibits not only lease sales in the moratorium area but also "preleasing" and other related activities. BOEM has clarified that such preleasing and related activities are not interpreted to include geological and geophysical (G&G) activitiesâsuch as seismic surveysâundertaken to locate resources with the potential to produce commercial quantities of oil and gas. BOEM interprets GOMESA to allow these G&G surveys in the moratorium area. The moratorium imposed by Section 104 expires on June 30, 2022. The 116 th Congress is debating whether to allow the moratorium to expire as scheduled or to amend GOMESA (or enact other legislation) to potentially further restrict federal oil and gas activity in this area. The following sections discuss scenarios for future leasing in the area under current provisions, legislative proposals to provide for other outcomes, and selected issues for Congress related to the moratorium provisions. Scenario Under Current Statutory Framework Absent further action by Congress, after June 30, 2022, the executive branch could potentially offer new oil and gas leases in the expired moratorium area. Under the OCSLA, the Secretary of the Interior could decide to include or exclude the area in future five-year offshore oil and gas leasing programs, based on specified criteria. The OCSLA also gives the President discretion to withdraw the area, temporarily or indefinitely, from leasing consideration, which would render it unavailable for inclusion in a DOI leasing program. The Trump Administration has indicated interest in pursuing oil and gas leasing in the GOMESA moratorium area after the moratorium's expiration. BOEM's initial draft of a five-year oil and gas leasing program for 2019-2024 (referred to as the "draft proposed program" or DPP) includes two lease sales in the moratorium area, one in 2023 and one in 2024. The DPP proposes to offer all available tracts in the former moratorium area after the expiration. BOEM also indicated that it would analyze two secondary options that would exclude some portions of the moratorium area from the lease sales ( Figure 2 ). First, BOEM is analyzing a potential "coastal buffer" off Floridaâat distances of 50, 75, 100, or 125 milesâto accommodate military activities and nearshore use. Second, BOEM is separately analyzing a potential 15-mile leasing buffer offshore of Baldwin County, AL, to minimize visual and other impacts to onshore coastal areas. The next draft of the 2019-2024 program is expected to reflect the results of BOEM's analysis. Under the planning process for the program, which is governed by requirements of both the OCSLA and the National Environmental Policy Act, sales listed in the DPP could be retained, modified, or removed in subsequent drafts of the program. In deciding whether to include the sales (either in their current form or with modifications) in the final leasing program, the Secretary of the Interior must weigh economic, social, and environmental criteria. Among the factors the Secretary must consider under the OCSLA are coastal state governors' views on leasing off their coasts. Recent governors of Florida, the state most closely adjacent to the moratorium area, generally have expressed opposition to leasing in this area. Governors of other Gulf Coast statesâAlabama, Louisiana, Mississippi, and Texasâgenerally have expressed support for oil and gas leasing in the Eastern Gulf. The Secretary also must consider the views of other affected federal agencies. One key agencyâDODâhistorically has opposed new leasing in the area, due to DOD's use of this part of the Gulf as a military testing and training ground (see " Military Readiness "). Both DOD and the Gulf producing states, along with some Members of Congress and many other stakeholders, submitted public comments on the 2019-2024 DPP. These comments are to be taken into account in the second draft of the program. Another round of public comment is expected to be solicited before the program could be finalized. The oil and gas industry has indicated interest in leasing in the moratorium area. Some industry representatives have stated that the Eastern Gulf represents a more attractive leasing prospect than other OCS areas currently unavailable for leasing (e.g., the Pacific and Atlantic regions) because data on the Eastern Gulf are better developed than for these other areas, and nearby infrastructure is already in place to facilitate exploration and development. Industry representatives have expressed particular interest in the deepwater Norphlet play, which spans parts of the Eastern and Central Gulf. Legislative Proposals A number of legislative proposals in the 116 th Congress have sought to extend GOMESA's moratorium or permanently prohibit leasing in the moratorium area. By contrast, other legislation would mandate lease sales in the area directly following the moratorium's current expiration date. Table 2 summarizes provisions of relevant 116 th Congress bills. Two of these bills, H.R. 4294 and S. 13 , include provisions affecting GOMESA revenue sharing, discussed further in Table 5 . One proposal related to the moratorium has passed the House of Representatives in the 116 th Congress: H.R. 205 , the Protecting and Securing Florida's Coastline Act of 2019. The bill would amend GOMESAâto extend the Eastern Gulf moratorium indefinitely, thus precluding future oil and gas leasing in the area. In its report on the bill, the House Natural Resources Committee stated that a continued moratorium is necessary because leasing in the Eastern Gulf would compromise military readiness and "pose existential threats to Florida's tourism, fishing, and recreation economy, which rely on clean water and healthy beaches." In dissenting views, some committee members contended that oil and gas leasing in the area could successfully coexist with fishing, tourism, and military operations, and pointed to the role of Gulf oil and gas revenues in funding environmental restoration activities and land protection. Bills in earlier Congresses sought other types of outcomes related to the GOMESA moratorium. For example, some legislation would have enabled leasing in portions of the moratorium area before the 2022 expiration date, effectively shrinking the moratorium area. Other legislation would have prohibited some activities in the moratorium area that are not currently restricted by GOMESA, such as seismic surveys or research on potential areas for offshore drilling. These proposals have not been included to date in 116 th Congress legislation. Selected Issues Economic and Budgetary Considerations An extension of GOMESA's leasing prohibitions could result in a loss to the government of future federal revenues (to the extent that leasing and commercial production would otherwise take place when the moratorium expires). Also, some oil and gas industry advocates have contended that future development in the Eastern Gulf could contribute billions of dollars annually to the nation's gross domestic product, mainly through contributions to Gulf state economies, which they contend would be lost were the moratorium to continue. By contrast, some in the commercial fishing, tourism, and recreation sectors have focused on potential economic costs to these sectors if oil and gas development takes place off the coast of Florida, with particular emphasis on potential financial losses if a major oil spill were to occur. They point to estimates showing significant costs to these industries from the 2010 Deepwater Horizon oil spill. Other stakeholders express concern that any oil and gas activities in these areas would contribute to greenhouse gas emissions and human-induced climate change, with accompanying direct and indirect costs. The Congressional Budget Office (CBO) has estimated certain budgetary effects of a moratorium extension in relation to budget projections under existing law. CBO has estimated that bills to extend the moratorium would reduce offsetting receipts and thus increase direct federal spending. As a result, such bills may be subject to certain budget points of order unless offset or waived. For example, for the version of H.R. 205 reported by the House Committee on Natural Resources, CBO estimated that the bill's extension of GOMESA's moratorium would increase direct spending by $400 million over 10 years. Military Readiness The extent to which the GOMESA moratorium is needed for U.S. military readiness also has been at issue. The area east of the Military Mission Line in the Eastern Gulf provides about 101,000 square miles of surface area and overlying air space, which is the largest overwater DOD test and training area in the continental United States. DOD historically has expressed a need for an oil and gas leasing moratorium in this area. For instance, in 2006, DOD stated that its testing and training activities in the Eastern Gulf were "intensifying" and requiredâ"large, cleared safety footprints free of any structures on or near the water surface." In 2017, DOD wrote that the agency "cannot overstate the vital importance of maintaining this moratorium.... Emerging technologies such as hypersonics, autonomous systems, and advanced sub-surface systems will require enlarged testing and training footprints, and increased DoD reliance on the Gulf of Mexico Energy Security Act's moratorium beyond 2022." More recently, in a 2018 report to Congress on preserving military readiness in the Eastern Gulf, DOD wrote: No other area in the world provides the U.S. military with ready access to a highly instrumented, network-connected, surrogate environment for military operations in the Northern Arabian Gulf and Indo-Pacific Theater. If oil and gas development were to extend east over the [Military Mission Line], without sufficient surface limiting stipulations and/or oil and gas activity restrictions mutually agreed by the DoD and Department of Interior (DoI), military flexibility in the region would be lost and test activities severely affected. Some Members of Congress and other stakeholders have interpreted the wording of the 2018 reportâparticularly its phrase "without sufficient surface limiting stipulations and/or oil and gas activity restrictions"âas signaling a greater DOD openness to oil and gas activities in the moratorium area than had been expressed in some earlier DOD communications. The phrasing might be read to suggest that military readiness and oil and gas development could be mutually accommodated, given appropriate stipulations and restrictions. Oil and gas leases awarded in the Central and Western Gulf often contain stipulations related to military activities, such as those requiring the lessee to assume risks of damage from military activities, to control electromagnetic emissions in defense warning areas, to consult with military commanders before entering some areas, and/or to evacuate areas as needed for military purposes. BOEM also typically reserves the right to temporarily suspend a lease in the interest of national security. The 2018 report does not clarify what types of lease stipulations and restrictions might be necessary to accommodate the more intensive testing and training activities in the Eastern Gulf. The report states that some military activities in this area may be incompatible with the presence of fixed or mobile oil platforms. The report expresses concerns that increased vessel traffic and underwater noise could jeopardize some military activities. It also discusses concerns about potential foreign observation of DOD activities, if foreign entities are allowed to control offshore assets or otherwise conduct business near military ranges in the Eastern Gulf. If these military concerns were to lead to more stringent restrictions on oil and gas operations than are mandated in other parts of the Gulf, a question would be how such restrictions might affect industry interest in bidding on leases in the Eastern Gulf. In its cost estimate for H.R. 205 , CBO identified defense-related constraints (and the potential incompatibility of some development with Florida's Coastal Management Program) as factors that could reduce the value of Eastern Gulf leases to industry bidders. However, some industry representatives have expressed consistent interest in leasing in the area and have contended that economic returns on leases in this area would be substantial, despite potential restrictions related to military activities. Section 105: Revenue Sharing Section 105 of GOMESA provides for federal revenues from certain qualified leases in the Gulf of Mexico to be shared under specified terms with four Gulf producing statesâAlabama, Louisiana, Mississippi, and Texasâand their "coastal political subdivisions" or CPSs (e.g., coastal counties or parishes), as well as with the LWCF state assistance program. Specifically, each year the Secretary of the Treasury is to deposit 50% of qualified revenues in a special account (the remaining 50% are deposited in the General Fund of the U.S. Treasury as miscellaneous receipts). From this special account, the Secretary disburses 75% of funds to the Gulf producing states and their CPSs, and 25% to the LWCF state assistance program. Accordingly, of the total qualified revenues in a given year, the states and CPSs receive 37.5% (i.e., 75% of the 50% in the special account), and the LWCF receives 12.5% (25% of the 50%). The law's definition of "qualified" OCS revenues differs for the first decade after GOMESA's enactment (FY2007-FY2016) versus for subsequent years. For FY2007-FY2016 (often referred to as GOMESA's Phase I), the law defines qualified OCS revenues to include all bonus bids, rents, royalties, and other sums due and payable to the United States from leases in the Eastern Gulf and the Central Gulf's 181 South Area entered into on or after the date of GOMESA's 2006 enactment. These are the relatively small areas shown as areas A and B in Figure 1 . For FY2017 and beyond (Phase II), the geographic area of qualified revenues expands. In addition to revenues from post-2006 leases in the Phase I areas, the qualified revenues in Phase II include those from post-2006 leases in the Central Gulf's portion of the 181 Area, shown as areaÂ C in Figure 1 . The Phase II qualified revenues also include the "2002-2007 planning area"âthe large area shown in yellow in Figure 1 , encompassing most of the Western and Central Gulf, where the bulk of production takes place. Accordingly, revenues qualified for sharing in Phase II are likely to be notably higher than in Phase I ( Table 3 ). For the added Phase II areas, Section 105 stipulates that the total amount of qualified revenues made available each year to the states and their CPSs and the LWCF (collectively) shall not exceed $500 million for each of FY2016-FY2055. A later law, P.L. 115-97 , raised the cap to $650 million for two of these years, FY2020 and FY2021. Given the percentage distributions specified in the law for each recipient, the amounts that can be shared with states and their CPSs from the added Phase II areas are capped at $375.0 million in most years (and $487.5 million in FY2020 and FY2021). The amounts that can be shared with the LWCF are capped at $125.0 million in most years (and $162.5 million in FY2020 and FY2021). Phase II began with FY2017 revenues, but GOMESA specifies that revenues shall be shared with recipients in the fiscal year immediately following the fiscal year in which they are received. Thus, in terms of payments, the first fiscal year reflecting Phase II revenue sharing was FY2018. The shared revenues rose notably in that year compared with previous years. Table 3 shows GOMESA revenue distributions since the law's enactment, with the transition from Phase I distributions to Phase II distributions occurring between FY2017 and FY2018. GOMESA directs the Secretary of the Interior to establish a formula to allocate each year's qualified state revenues among the four Gulf producing states and their CPSs. The allocations to each state primarily depend on its distance from leased tracts, with states closer to the leased tracts receiving a higher share. The law additionally provides that each state must receive an annual minimum of at least 10% of the total amount available to all the Gulf producing states for that year. Further, GOMESA directs that the Secretary shall pay 20% of the allocable share of each Gulf producing state to the state's CPSs. See the box below for additional details on the state allocations. GOMESA authorizes the states and CPSs to use revenues for the following purposes: Projects and activities for the purposes of coastal protection, including conservation, coastal restoration, hurricane protection, and infrastructure directly affected by coastal wetland losses. Mitigation of damage to fish, wildlife, or natural resources. Implementation of a federally approved marine, coastal, or comprehensive conservation management plan. Mitigation of the impact of OCS activities through the funding of onshore infrastructure projects. Planning assistance and the administrative costs of complying with GOMESA. (No more than 3% of a state or CPS's revenues may be used for this purpose.) The following sections discuss the scenario for GOMESA revenue sharing under the law's current provisions, summarize legislative proposals for changes, and explore selected issues. Scenario Under Current Statutory Framework Under GOMESA, revenue sharing with the states and LWCF continues indefinitely, and the annual cap on shared revenues from the Phase II areas continues through FY2055. After that year, all qualified Gulf revenues would be shared under the current formulaâ37.5% to states and their CPSs and 12.5% to the LWCFâregardless of whether the shared amount from the Phase II areas exceeds $500 million. DOI, in its annual budget justifications, develops five-year projections of qualified GOMESA revenues. Table 4 shows DOI projections for FY2020-FY2024 shared revenues (which are half of all qualified revenues), by revenue collection year. The revenues collected in a given year would be shared with the states and LWCF in the following fiscal year. In general, the DOI projections for a given year have not always been consistent over time. Changing oil prices have been a major factor in revised projections. Under the current scenario, the majority of the moratorium areaâthe portion shown in gray in Figure 1 âdoes not qualify for revenue sharing, even after the moratorium ends in June 2022. Instead, any revenues from oil and gas leasing and development in this area after the moratorium expires would go entirely to the Treasury. Also, GOMESA does not provide for revenue sharing with Florida, although some of the qualified revenue-sharing areasâsuch as portions of the 181 Areaâare closer to Florida than to the other Gulf producing states. Legislative Proposals In the 116 th Congress, several bills would amend GOMESA to increase the portion of qualified revenues shared with the Gulf producing states by raising the states' percentage share, eliminating the revenue-sharing cap, or both. Some legislation also would expand the purposes for which states may use the GOMESA revenues, modify the uses of the LWCF share, or add Florida to the revenue-sharing arrangement. Table 5 describes selected relevant bills and their provisions. None of the bills has been reported from committee in the 116 th Congress. In contrast with bills that would increase the state revenue share, some legislative proposals in earlier Congresses would have ended state revenue sharing under GOMESA. For example, in the 114 th Congress, would have amended GOMESA to provide that 87.5% of qualified revenues under the law would be deposited in the Treasury's General Fund, while 12.5% would continue to be provided for LWCF financial assistance to states. This proposal is similar to some legislative proposals in DOI budget requests under the Obama and Trump Administrations (see " Determining the Appropriate State Share "). Selected Issues Determining the Appropriate State Share Members of Congress differ in their views on the extent to which Gulf Coast states should share in revenues derived from oil and gas leasing in federal areas of the Gulf. State officials from the Gulf producing states and some Members of Congress have expressed that the Gulf producing states should receive a higher share than is currently provided under GOMESA, given the costs they incur to support offshore extraction activities. These stakeholders have argued that the revenues are needed to mitigate environmental impacts and to maintain the necessary support structure for the offshore oil and gas industry. For example, at a 2018 hearing of the House Committee on Natural Resources, former Senator Mary Landrieu stated: "It is important to note that revenue sharing was established â¦ to recognize the contributions that states and localities make to facilitate the extraction and production of these resources, including the provision of infrastructure to enable the federal activity: transportation, hospitals, schools and other necessary governmental services." Advocates have emphasized that Gulf Coast areas, especially coastal wetlands, face significant environmental challenges, owing in part to hydrocarbon development (among other activities). These advocates have contended that additional federal revenues are critical to address environmental challenges and economic impacts of wetland loss. Advocates point to a disparity between the 37.5% state share provided under GOMESA and the 50% share of revenues that most states receive from onshore public domain leases under the Mineral Leasing Act. They contend that a comparable state revenue share under GOMESA would significantly contribute to coastal wetland restoration, given GOMESA's requirement that the Gulf producing states use the funding to address coastal protection, damage mitigation, and restoration (and given comparable requirements under some state laws). By contrast, some other Members of Congress, as well as the Obama and Trump Administrations at times, have contended that GOMESA revenue sharing with the states should be reduced or eliminated to facilitate use of these revenues for broader national purposes. They have argued that, since the OCS is a federal resource, the benefits from offshore revenues should accrue to the nation as a whole, rather than to specific coastal states. Under the Obama Administration, DOI budget requests for FY2016 and FY2017 recommended that Congress repeal GOMESA state revenue-sharing payments and direct a portion of the savings to programs that provide "broad â¦ benefits to the Nation," such as a proposed new Coastal Climate Resilience Program "to provide resources for at-risk coastal States, local governments, and their communities to prepare for and adapt to climate change." Legislation in the 114 th Congress ( S. 2089 ; see " Legislative Proposals ") would have amended GOMESA to eliminate the state revenue sharing and provide for the state share to go to the Treasury's General Fund. For FY2018, the Trump Administration proposed that Congress repeal GOMESA's state revenue-sharing provisions, in order to "ensure [that] the sale of public resources from Federal waters owned by all Americans, benefit all Americans." The Trump Administration has not included similar proposals in subsequent budget requests, and no legislation to reduce or eliminate GOMESA state revenue sharing has been introduced to date in the 116 th Congress. Set of Leases Qualified for Revenue Sharing Although Phase II of GOMESA considerably expanded the set of leases contributing to revenue sharing, some Gulf leases still do not qualify, because the law applies only to leases that were entered into on or after the date of GOMESA's enactment (December 20, 2006). It appears from 2019 leasing data maintained by BOEM that approximately 61% of the more than 2,500 active leases in the Gulf of Mexico were entered into on or after the enactment date, and thus would qualify for revenue sharing under GOMESA's current terms. However, the majority of these newer leases are not producing oil and gas; and leases awarded before GOMESA's enactmentâwhich do not qualifyâcontinue to contribute a substantial portion of production royalties. For this reason, the percentage of Gulf revenues subject to GOMESA sharing is much smaller than the percentage of Gulf leases subject to GOMESA sharing. For example, of federal offshore revenues disbursed in FY2019 (the high majority of which come from the Gulf), GOMESA-qualified revenuesâincluding those distributed to states and their CPSs, the LWCF state grant program, and the Treasury combinedâconstituted 18% of the total. The percentage of total revenues that qualify for sharing under GOMESA might be expected to increase over time, to the extent that older leases gradually terminate and current and future leases begin producing. Some Members of Congress have proposed that GOMESA's terms be altered to include an expanded set of leases in the qualified sharing group. For instance, in the 116 th Congress, S. 2418 would amend GOMESA to define the qualified leases as those entered into on or after October 1, 2000, rather than after GOMESA's 2006 enactment. According to BOEM data as of November 2019, this would more than double the number of producing leases eligible for GOMESA revenue sharing (although the addition in total leases would be relatively small). The result could be a higher revenue share with the states and their CPSs and the LWCF state grant program. Some other Members do not favor this type of change because it could reduce the portion of offshore revenues going to the Treasury for other federal purposes. Revenue Amounts and Adequacy for Legislative Purposes Offshore oil and gas revenues support a variety of federal and state activities, through amounts deposited annually in the LWCF and the Historic Preservation Fund (HPF) and through revenues shared with states under revenue-sharing laws. Revenue totals have fluctuated from year to year ( Table 1 ), raising questions about whether future revenues will be adequate to support these various activities and whether new legislation for offshore revenue distribution would strain available amounts. For example, some Members of Congress have considered whether raising GOMESA's state revenue share would result in insufficient funds to meet statutory requirements for deposits to the LWCF and HPF. Alternatively, some Members have questioned whether proposals to use offshore revenues for new conservation programs would reduce state sharing under GOMESA and jeopardize programs supported by the state-shared funds. Thus far, in each year since GOMESA's enactment, OCS revenues have been sufficient to provide for all distributions under current law. If bills in Table 5 were enacted to raise the GOMESA state revenue share to 50% and eliminate the revenue-sharing cap for states, it appears that, based on DOI projections for FY2020-FY2024, OCS revenues remaining after state sharing would still be more than sufficient to meet statutory requirements for deposits to the LWCF and HPF in these years. Various economic factors or policy decisions could affect these DOI projections, and under some theoretical scenarios, enactment of bills to increase the state share could affect the sufficiency of revenues to cover other legislative requirements. Similarly, under some scenarios, legislative proposals to fund new conservation programs with offshore revenues could affect amounts shared with the states under GOMESA. Whether this would occur would depend partly on the terms of the legislative proposals. For example, S. 500 and H.R. 1225 in the 116 th Congress would establish a new deferred maintenance fund for specified federal lands supported partly by offshore energy revenues. These proposals address the issue of revenue availability by specifying that the new deferred maintenance fund would draw only from miscellaneous receipts deposited to the Treasury after other dispositions are made under federal law. That is, if revenues were insufficient to provide for the funding amounts specified under these bills along with the other distributions required in law, it appears that the requirements of current laws (including GOMESA) would be prioritized. Also relevant are proposals by some Members of Congress and other stakeholders to significantly curtail or end OCS oil and gas leasing, in response to climate change concerns. Depending on the extent to which offshore production decreased, such policy changes could result in an insufficiency of revenues to meet all statutory requirements, especially over the long term as production from existing leases diminished. Some supporters of reducing or eliminating federal offshore oil and gas leasing have suggested that other revenue sources, such as from an expansion of renewable energy leasing on federal lands, should be found for desired federal programs. Some opponents of curtailing offshore oil and gas leasing have pointed to the revenue implications as an argument against such actions. Budgetary Considerations Bills that would increase the state share of GOMESA revenuesâby giving the states a higher revenue percentage, eliminating revenue-sharing caps, or bothâhave been identified by CBO as increasing direct spending. For example, in cost estimates for 115 th Congress legislationâwhich would have made similar state-sharing changes to those proposed in H.R. 3814 , H.R. 4294 , and S. 2418 ( Table 5 )âCBO estimated that these changes would increase direct spending of OCS receipts by $2.1 billion over a 10-year period. As a result, such legislation may be subject to certain budget points of order unless offset or waived. As of January 2020, CBO has not released cost estimates for the 116 th Congress bills discussed in Table 5 (none of which has been reported from committee), and it is unclear how CBO would estimate costs associated with those bills or whether some provisions in those bills might be estimated to offset costs of other provisions. For example, H.R. 4294 contains provisions to repeal presidential withdrawals of offshore areas from leasing consideration and to facilitate offshore wind leasing in U.S. territories, among others. CBO scored similar provisions in 115 th Congress bills as increasing offsetting receipts (and thus partly offsetting bill costs). Florida and Revenue Sharing Under GOMESA's current provisions, Florida is not among the Gulf producing states eligible for revenue sharing. Some proposals, including S. 13 in the 116 th Congress, would add Florida to the group of states receiving a revenue share. Because the high majority of Gulf leasing takes place in the Western and Central Gulf planning areas, which do not abut Florida, Florida's share of GOMESA revenues if S. 13 were enacted would likely be lower than those of the other Gulf Coast states, especially Louisiana and Texas. Nonetheless, since GOMESA provides that every Gulf producing state must receive at least 10% of the annual state revenue share, adding Florida to the Gulf producing states would provide at least that portion of GOMESA revenues for Florida and would correspondingly reduce the total available to the other Gulf producing states. Some Florida stakeholders have opposed legislation to add Florida to GOMESA revenue sharing on the basis that doing so could incentivize eventual oil and gas development off Florida. Others support a continued moratorium off Florida and support giving Florida a revenue share from leasing elsewhere in the Gulf. These stakeholders contend that Florida bears risks from oil and gas leasing elsewhere in the Gulf (particularly related to potential oil spills) and so should also see benefits. This position is captured in S. 13 , which would extend the GOMESA moratorium through 2027 and add Florida as a revenue-sharing state. Still others support adding Florida as a revenue-sharing state as part of a broader change to allow leasing and revenue sharing in areas offshore of Florida. Supporters of this approach, including some from the current Gulf producing states, may contend that an increase in the number of states that share GOMESA revenues should be accompanied by a growth in the area qualified for revenue sharing to reduce the likelihood of a smaller share for the original four states. Conclusion The current period is one of transition for the oil and gas leasing framework established by GOMESA for the Gulf of Mexico. First, the Eastern Gulf leasing moratorium is set to expire in 2022, and BOEM is proposing offshore lease sales for the moratorium area starting in 2023. Second, the Gulf leases subject to revenue sharing expanded substantially starting in FY2017, and DOI projects revenues from these areas will approach or reach GOMESA's revenue-sharing cap in FY2024. Congress is considering whether GOMESA's current provisions will best meet federal priorities going forward, or whether changes are needed to achieve various (and sometimes conflicting) national goals. Regarding the moratorium provisions, a key question is whether decisions about leasing in the Eastern Gulf should be legislatively mandated or left to the executive branch to control. Absent any legislative intervention, after June 2022, the President and the Secretary of the Interior are to decide whether, where, and under what terms to lease tracts in the former moratorium area, following the statutory provisions of the OCSLA. Some Members of Congress seek to amend GOMESAâeither to extend the moratorium or to mandate lease sales in the areaârather than deferring to the OCSLA's authorities for executive branch decisionmaking. At stake are questions of regional and national economic priorities, environmental priorities, energy security, and military security. With respect to Gulf oil and gas revenues, GOMESA's current revenue-sharing provisions take into account multiple priorities: mitigating the impacts of human activities and natural processes on the Gulf Coast (through state revenue shares directed to this purpose); supporting conservation and outdoor recreation nationwide (through the LWCF state assistance program); and contributing to the Treasury. For the most part, legislative proposals to change the terms of GOMESA revenue distribution have supported some or all of these priorities but have sought to change the balance of revenues devoted to each purpose. Also at issue are proposals to use the revenues for new (typically conservation-related) purposes outside the GOMESA framework, as well as proposals to substantially reduce or eliminate Gulf oil and gas productionâwith corresponding revenue implicationsâin the context of addressing climate change. The 116 th Congress is debating such questions as it considers multiple measures to amend GOMESA.	Summary:	gov_report	1,024	null	45
crs_R46338	crs_R46338_0	You are given a report by a government agency. Write a one-page summary of the report. Report: T he constitutional system of checks and balances and the separation of powers among the legislative, executive, and judicial branches is a cornerstone of the American system of government. By separating and checking powers in this way, the Framers hoped to prevent any person or group from seizing control over the nation's government. For example, the Framers checked congressional legislative power by providing the President the power to veto legislation and, in turn, checked the President's veto power by providing Congress a means to override that veto. Over time, it has become clear that the presidential veto power, even when not formally exercised, provides the President with an important tool to engage in the legislative process. Most Presidents have exercised their veto power in an effort to block legislation. Of 45 Presidents, 37 have exercised their veto power. As of the end of 2019, Presidents have issued 2,580 vetoes, and Congress has overridden 111. President George W. Bush vetoed 12 bills during his presidency. Congress attempted to override six of them and succeeded four times. President Barack Obama also vetoed 12 bills during his presidency. Congress attempted to override six of them and succeeded once. Presidents have also attempted to influence the shape of legislation through the use of veto threats. Since the 1980s, formal, written Statements of Administration Policy (SAPs, pronounced "saps") have frequently been used to express the President's support for or opposition to particular pieces of legislation. SAPs sometimes threaten to use the veto power if the legislation reviewed reaches the President's desk in its current form. Among the George W. Bush Administration (2001-2009) and the Obama Administration (2009-2017) SAPs examined later in this report, for example, 24% and 48%, respectively, contained a veto threat. This report begins with a brief discussion of the veto power and Congress's role in the veto process. It then examines the ways Presidents communicate their intention to veto, oppose, or support a bill. The report then provides and discusses summary data on veto threats and vetoes during the Bush and Obama Administrations. The President's Veto Power As specified by the U.S. Constitution (Article I, Section 7), the President has 10 days, Sundays excepted, to act once he has been presented with legislation that has passed both houses of Congress and either reject or accept the bill into law. Within those 10 days, Administration officials consider various points of view from affected agencies (as is the case throughout the legislative process) and recommend a course of action to the President regarding whether or not to veto the presented bill. The President has three general courses of action during the 10-day presentment period: The President may sign the legislation into law, take no action and allow the bill to become law without signature after the 10 days, or reject the legislation by exercising the office's veto authority. The President may reject legislation in two ways. The President may veto the bill and "return it, with his Objections to that House in which it shall have originated." This action is called a "regular" or "return" veto (hereinafter return veto). Congress typically receives the objections to the bill in a written veto message. If Congress has adjourned during the 10-day period, the President might also reject the legislation through a "pocket veto." This occurs when the President retains, but does not sign, presented legislation during the 10-day period, with the understanding that the President cannot return the bill to a Congress that has adjourned. Under these circumstances, the bill will not become law. A pocket veto is typically marked by a type of written veto message known as a "Memorandum of Disapproval." As discussed in greater detail below, this practice has sometimes been controversial, because arguably it prevents Congress from attempting to override the President's veto. Congress's Response A President's return veto may be overridden, or invalidated, by a process provided for in Article 1, Section 7, of the U.S. Constitution. To override a return veto, Congress may choose to "proceed to reconsider" the bill. Passage by two-thirds of Members in each chamber is required to override a veto before the end of the Congress in which the veto is received. Neither chamber is under any constitutional, legal, or procedural obligation to conduct an override vote. It is not unusual for either chamber of Congress to make no effort to override the veto if congressional leaders do not believe they have sufficient votes to do so. If a two-thirds vote is successful in both chambers, the President's return veto is overridden, and the bill becomes law. If a two-thirds vote is unsuccessful in one or both chambers, the veto is sustained, and the bill does not become law. In contrast, Congress cannot override the President's pocket veto. By definition, a pocket veto may occur only when a congressional adjournment prevents the return of the vetoed bill. If a bill is pocket vetoed while Congress is adjourned, the only way for Congress to pass a version of the policy contained in the vetoed bill is to reintroduce the legislation as a new bill, pass it through both chambers, and present it to the President again for signature. Recent Presidents and Congresses have disagreed about what constitutes an adjournment that prevents the return of a bill such that a pocket veto may be used. For purposes of the sections below concerning the use of veto threats, the unit of analysis is a veto. The analysis does not distinguish between regular and pocket vetoes. Veto Threats in the Legislative Process Because Congress faces a two-thirds majority threshold to override a President's veto, veto threats may deter Congress from passing legislation that the President opposes. The veto override threshold may also prompt Congress to change a bill in response to a veto threat. The Framers of the U.S. Constitution viewed the veto power as a way of reminding Congress that the President also plays an important legislative role and that threatening to use the veto power can influence legislators into creating more amenable bills. Political scientist Richard A. Watson writes that "the veto is available to a President as a general weapon in his conflicts with Congress: Franklin Roosevelt sometimes asked his aides for 'something I can veto' as a lesson and reminder to congressmen that they had to deal with a President." Veto threats are, therefore, an important component in understanding the use of the President's veto power. In recent presidencies, these threats have generally been expressed either through SAPs or verbally. President Trump has also used social media to communicate his intention to veto, oppose, or support a bill. Signaling Policy Intentions Before a Veto Presidents may signal their intention to support, oppose, or veto a bill early in the legislative process using both verbal and written means. For example, Presidents can mention in a speech that they intend to veto legislation, or they can authorize others (such as a press secretary) to verbally indicate the Administration's position on specific legislation. Presidents can also issue, through the Office of Management and Budget (OMB), formal, written SAPs to communicate their intention to veto, oppose, or support a bill. Verbal Veto Threats Verbal veto threats may include commentary related to the President's strategy for working with Congress along with a threat to veto legislation if the President's policy agenda is not heeded. For example, at a press conference President George W. Bush explained, "I want the Members of Congress to hear that once we set a budget we're going to stick by it. And if not, I'm going to use the veto pen of the President of the United States to keep fiscal sanity in Washington, D.C." In another instance, President Obama said that the House "is trying to pass the most extreme and unworkable versions of a bill that they already know is going nowhere, that can't pass the Senate and that if it were to pass the Senate I would veto. They know it." In these remarks, both President Bush and President Obama used their words to attempt to deter Congress from passing bills that did not match the President's policy agenda and unambiguously remind the public of their veto power. Written Veto Threats Formal, written SAPs are frequently used to express the President's support for or opposition to particular pieces of legislation. The decision to issue a SAP is a means for the President to insert the Administration's views into the legislative debate. While SAPs provide Presidents an opportunity to assert varying levels of support for or against a bill, perhaps the most notable statement in a SAP is whether the Administration intends to veto the bill. Members of Congress may pay particular attention to a SAP when a veto threat is being made. At least one congressional leader has characterized SAPs as forerunner indicators of a veto. SAPs are often the first public document outlining the Administration's views on pending legislation and allow for the Administration to assert varying levels of support for or opposition to a bill. Because written threats are typically required to be scrutinized by the Administration through the central legislative clearance process in advance of their release, written SAP veto threats are often considered more formal than verbal veto threats. When a SAP indicates that the Administration may veto a bill, it appears in one of two ways: 1. A statement indicating that the President intends to veto the bill (hereinafter a presidential veto threat) or 2. A statement that agencies or senior advisors would recommend that the President veto the bill (hereinafter a senior advisors veto threat). These two types of SAPs indicate degrees of veto threat certainty. Generally speaking, a presidential veto threat signals the President's strong opposition to the bill. A senior advisors veto threat, on the other hand, may signal that the President may be more likely to enter into negotiations in order to reach a compromise with Congress on the bill. By publicly issuing a veto threat, the President may leverage public pressure upon Congress to support the President's agenda. Furthermore, many SAPs propose a compromise to Congress wherein the President would not exercise a veto. In addition, a President or an Administration's senior advisors may not always issue a veto threat prior to a decision to veto passed legislation. As discussed below, both Presidents Bush and Obama vetoed legislation for which they never issued a written veto threat. Veto Threats Within Different SAP Types During both the Obama and Bush Administrations, roughly three-quarters of SAPs issued were on non-appropriations bills, and roughly one-quarter concerned appropriations bills. Each SAP signaled the Administration's intent to veto, oppose, or support a bill. There are fundamental differences between non-appropriations bill SAPs and appropriations bill SAPs. Non-appropriations bill SAPs typically involve specific policy objections, such as how a program operates or what constituency the program is designed to serve. Appropriations bill SAPs, in contrast, often involve more general budgetary policy objections, such as the perceived need to balance the budget or to reallocate resources for other purposes. Therefore, the President may generally support a particular provision in an appropriations bill on programmatic policy grounds but oppose it for budgetary reasons. Or the President may oppose a particular provision in an appropriations bill for both programmatic and budgetary reasons. This report focuses on the impact of the President's veto threat in non-appropriations bill SAPs given their more targeted nature. Veto Threats During the George W. Bush and Obama Administrations Data in this report were compiled from SAPs located on the archived White House websites of the Bush and Obama Administrations. Using the classification of SAPs on each website, analysis was conducted with only non-appropriations SAPs for reasons described above. The analysis examined each SAP and individually assessed whether the SAP contained a veto threat, the type of threat (presidential or senior advisor), and whether the veto threat concerned a part of the bill or the whole bill. The analysis considers each SAP to be an individual veto threat. In instances where one bill received veto threats in multiple SAPs, veto threats were counted individually and not combined. To assess the final outcome of bills, the analysis used information on bill statuses located at Congress.gov and does not track whether bills that received a SAP were later combined into other legislative vehicles. The inherent limitations in this methodology make it difficult to determine direct effects of any veto threat on the final outcome of a bill. However, in the aggregate, general trends may be observed. The proportion of non-appropriation bill SAPs with veto threats steadily increased over the course of each of the two presidencies reviewed. SAPs containing veto threats as a proportion of all SAPs was at its highest at the conclusion of both President Bush's and President Obama's second terms. Figure 1 illustrates this trend by showing SAP veto threats as a percentage of issued SAPs. George W. Bush Administration Veto Threats While the Bush Administration remained relatively consistent in the number of veto threats issued in SAPs during its first six years, the number of threats increased during the final two years of the Administration. The Bush Administration issued a total of 491 SAPs on non-appropriations bills. Just under one-quarter (24%) of the non-appropriations bill SAPs contained a veto threat: 24 presidential veto threats and 94 senior advisors veto threats. Of bills that received a presidential veto threat, one was signed by the President, seven were vetoed, and the remaining 16 did not make it to the President's desk. Of bills that received a senior advisors veto threat, 16 were signed, one was vetoed, and the remaining 77 were not passed by both chambers. Seven of the 12 Bush Administration vetoes were preceded by a SAP containing a veto threat. While the number of veto threats in SAPs slowly increased during the first three Congresses of the Bush Administration (two in the 107 th Congress, three in the 108 th Congress, and seven in the 109 th Congress), the number of veto threats grew sharply in the 110 th Congressâto 107 veto threatsâcoinciding with Democrats gaining control of both chambers of Congress during the Republican President's final two years in office. This might suggest (and is supported by Obama Administration data) that the partisan constitution of Congress, as well as whether the Administration is in its first or second term, may impact the number of veto threats issued. Below, Figure 2 illustrates this change in the number of veto threats over time across the four Congresses associated with President Bush's two terms in office. Nevertheless, presidential veto threats in the Bush Administration remained a fraction of overall veto threats and often resulted in an actual veto. The rarity with which the Bush Administration issued presidential veto threats suggests that the Administration viewed them as a message to be used sparingly. Although the relationship between Congress and a President may change every two years with each new Congress, the relationship between an Administration and its President may also change by presidential term. Compared to a President's first term, in a second term Administration, executive branch officials may become more adept in coordinating the veto power. Additionally, a second-term President cannot be re-elected, which may allow the Administration to take a stronger position on unfavorable legislation. Alternatively, it could be that the President lacks the political influence necessary to advance his legislative agenda and instead relies on veto power to block legislative vehicles more often as his presidency concludes. Figure 3 presents veto threat percentages by presidential term for the Bush Administration, showing an increase in the President's second term. During President Bush's first term (2001-2005), 98% of SAPs did not contain a veto threat, 1% contained a senior advisors veto threat, and 1% contained a presidential veto threat. During President Bush's second term (2005-2009), 60% did not contain a veto threat, 32% contained a senior advisors veto threat, and 8% contained a presidential veto threat. Obama Administration Veto Threats In comparison to the Bush Administration, the Obama Administration steadily increased its use of veto threats issued in SAPs in every subsequent Congress. The Obama Administration issued 472 SAPs on non-appropriations bills. Just under half (48%) of these contained a veto threat: 43 presidential veto threats and 186 senior advisors veto threats. Of bills that received a presidential veto threat, four were ultimately signed by the President, five were vetoed, and 34 did not make it to the President's desk. Of bills that received a senior advisors veto threat, 17 were signed, two were vetoed, and 167 were not passed by the two chambers. Six of the 12 Obama Administration vetoes were preceded by a SAP containing a veto threat. President Obama (a Democrat) issued more veto threats in his SAPs with each passing Congress. (Democrats controlled both chambers during the 111 th Congress and the Senate during the 112 th Congress, and Republicans controlled the House during the 113 th Congress and both chambers during the 114 th Congress. ) Below, Figure 4 illustrates this change in the number of veto threats over time by Congress. Although the number of veto threats increased over the course of the Obama presidency (eight in the 111 th Congress, 54 in the 112 th Congress, 63 in the 113 th Congress, and 104 in the 114 th Congress), the number of presidential veto threats remained small when compared to the total number of veto threats, varying from a low of 14.3% in the 111 th Congress to a high of 28.3% in the 114 th Congress. The increase over time in total number of veto threats may indicate that President Obama was presented with more legislation he was likely to oppose. However, the increase is mostly composed of senior advisors veto threats. This suggests that the Administration nonetheless treated presidential veto threats, compared to senior advisors veto threats, as a tool to be used more rarely. As with the Bush Administration, President Obama's use of veto threats in the first and second terms differ. Figure 5 presents veto threat percentages by presidential term as opposed to by Congress. During President Obama's first term (2009-2013), 69% of SAPs did not contain a veto threat, 27% contained a senior advisors veto threat, and 4% contained a presidential veto threat. During President Obama's second term (2013-2017), 39% of SAPs did not contain a veto threat, 49% contained a senior advisors veto threat, and 13% contained a presidential veto threat. Congressional Responses to Veto Threats CRS analyzed all veto threats contained in SAPs on non-appropriations legislation across these two Administrations and determined whether the veto threat was isolated to a provision of the bill (a partial bill veto threat) or if the veto threat was not particularized (a whole bill veto threat). President Bush issued partial bill veto threats and whole bill veto threats an equal amount of the time. However, the type of threat he used in each category varied. Of partial bill veto threats, 7% were presidential veto threats and the remaining 93% were senior advisors veto threats. Of whole bill veto threats, 34% were presidential veto threats and the remaining 66% were senior advisors veto threats. In contrast, President Obama issued partial bill veto threats more sparingly (8% versus 92% for whole bill veto threats). Similar to President Bush, however, of partial bill veto threats, 6% were presidential veto threats and the remaining 94% were senior advisors veto threats. Of whole bill veto threats, 20% were presidential veto threats and the remaining 80% were senior advisors veto threats. The difference in frequency of partial and whole bill veto threats across the Administrations may suggest that the two Presidents viewed the use of veto threats differently: One President may have used partial threats to negotiate more with Congress, whereas another President preferred to threaten a veto only when he viewed an entire bill as unfavorable. Likewise, the increased frequency of partial bill senior advisors veto threats suggests that both Presidents preferred to use presidential veto threats in rejecting an entire bill and leaving senior advisors veto threats for negotiations where only part of a bill is unfavorable. Legislative Action Following a Veto Threat A presidential veto threat in a SAP may be more likely than a senior advisors veto threat to deter passage of a bill because of the President's direct association with the threat. However, an analysis of these two Administrations does not necessarily support this argument. Figure 6 shows that bills appeared less likely to pass when the bill received a senior advisors veto threat versus a presidential veto threat. This may be due to a number of factors, including that senior advisors threats are more frequently issued than presidential veto threats (279 senior advisors threats and 67 presidential veto threats were issued across these two presidencies) or that Congress may perceive it to be beneficial to pass presidentially threatened legislation anyway based on certain political calculations and circumstances. Veto Threats and Veto Patterns During the Bush and Obama Administrations, enrolled bills that passed both chambers and were met with a presidential veto threat SAP were vetoed more often than were those that were met with a senior advisors threat. Figure 7 shows the outcomes of bills receiving veto threats that were passed by Congress and sent to the President. Across both the Bush and Obama Administrations, a bill that received a presidential veto threat and was passed was followed by a veto 70.6% of the time, whereas a bill that received a senior advisors veto threat was later vetoed 8.3% of the time. When a President vetoes a bill, it marks the end of the President's ability to procedurally affect whether or not a bill becomes law. Whether or not that specific bill becomes law is no longer in the President's hands. Congress may or may not elect to attempt an override. George W. Bush Administration Vetoes and Ensuing Congressional Action President Bush exercised the veto power 12 times. Four of these vetoes were overridden. Six vetoed bills were forewarned with a written veto threat. (Four received a presidential threat, and two received senior advisors threats.) Three additional bills received statements noting the Administration's opposition to the bill but did not include a veto threat. None of the bills that Congress later overrode were preceded by a presidential veto threat. Three-quarters of President Bush's vetoes (9 of 12) were preceded by a written statement of opposition to the bill. President Bush also issued multiple written veto threats on four bills that would later receive a veto: Three bills received two threats each, and one bill received two statements of opposition. Obama Administration Vetoes and Ensuing Congressional Action President Obama vetoed 12 bills, and Congress overrode his veto once. As was true for President Bush, six of President Obama's vetoes were preceded by a written veto threat (four presidential and two senior advisors threats). Unlike the patterns observed for the Bush presidency, however, all of President Obama's veto threats were whole bill veto threats. Whereas President Bush also communicated in SAPs his opposition to three bills short of threatening a veto, President Obama either did not issue a SAP at all or issued one that contained a veto threat. One of President Obama's vetoed bills received two veto threats. President Obama's approach of issuing either no statement at all on a bill or a statement containing a veto threat marks a different approach from the one used by President Bush. Summary:	null	96	24,645	24,647	24,647	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: T he constitutional system of checks and balances and the separation of powers among the legislative, executive, and judicial branches is a cornerstone of the American system of government. By separating and checking powers in this way, the Framers hoped to prevent any person or group from seizing control over the nation's government. For example, the Framers checked congressional legislative power by providing the President the power to veto legislation and, in turn, checked the President's veto power by providing Congress a means to override that veto. Over time, it has become clear that the presidential veto power, even when not formally exercised, provides the President with an important tool to engage in the legislative process. Most Presidents have exercised their veto power in an effort to block legislation. Of 45 Presidents, 37 have exercised their veto power. As of the end of 2019, Presidents have issued 2,580 vetoes, and Congress has overridden 111. President George W. Bush vetoed 12 bills during his presidency. Congress attempted to override six of them and succeeded four times. President Barack Obama also vetoed 12 bills during his presidency. Congress attempted to override six of them and succeeded once. Presidents have also attempted to influence the shape of legislation through the use of veto threats. Since the 1980s, formal, written Statements of Administration Policy (SAPs, pronounced "saps") have frequently been used to express the President's support for or opposition to particular pieces of legislation. SAPs sometimes threaten to use the veto power if the legislation reviewed reaches the President's desk in its current form. Among the George W. Bush Administration (2001-2009) and the Obama Administration (2009-2017) SAPs examined later in this report, for example, 24% and 48%, respectively, contained a veto threat. This report begins with a brief discussion of the veto power and Congress's role in the veto process. It then examines the ways Presidents communicate their intention to veto, oppose, or support a bill. The report then provides and discusses summary data on veto threats and vetoes during the Bush and Obama Administrations. The President's Veto Power As specified by the U.S. Constitution (Article I, Section 7), the President has 10 days, Sundays excepted, to act once he has been presented with legislation that has passed both houses of Congress and either reject or accept the bill into law. Within those 10 days, Administration officials consider various points of view from affected agencies (as is the case throughout the legislative process) and recommend a course of action to the President regarding whether or not to veto the presented bill. The President has three general courses of action during the 10-day presentment period: The President may sign the legislation into law, take no action and allow the bill to become law without signature after the 10 days, or reject the legislation by exercising the office's veto authority. The President may reject legislation in two ways. The President may veto the bill and "return it, with his Objections to that House in which it shall have originated." This action is called a "regular" or "return" veto (hereinafter return veto). Congress typically receives the objections to the bill in a written veto message. If Congress has adjourned during the 10-day period, the President might also reject the legislation through a "pocket veto." This occurs when the President retains, but does not sign, presented legislation during the 10-day period, with the understanding that the President cannot return the bill to a Congress that has adjourned. Under these circumstances, the bill will not become law. A pocket veto is typically marked by a type of written veto message known as a "Memorandum of Disapproval." As discussed in greater detail below, this practice has sometimes been controversial, because arguably it prevents Congress from attempting to override the President's veto. Congress's Response A President's return veto may be overridden, or invalidated, by a process provided for in Article 1, Section 7, of the U.S. Constitution. To override a return veto, Congress may choose to "proceed to reconsider" the bill. Passage by two-thirds of Members in each chamber is required to override a veto before the end of the Congress in which the veto is received. Neither chamber is under any constitutional, legal, or procedural obligation to conduct an override vote. It is not unusual for either chamber of Congress to make no effort to override the veto if congressional leaders do not believe they have sufficient votes to do so. If a two-thirds vote is successful in both chambers, the President's return veto is overridden, and the bill becomes law. If a two-thirds vote is unsuccessful in one or both chambers, the veto is sustained, and the bill does not become law. In contrast, Congress cannot override the President's pocket veto. By definition, a pocket veto may occur only when a congressional adjournment prevents the return of the vetoed bill. If a bill is pocket vetoed while Congress is adjourned, the only way for Congress to pass a version of the policy contained in the vetoed bill is to reintroduce the legislation as a new bill, pass it through both chambers, and present it to the President again for signature. Recent Presidents and Congresses have disagreed about what constitutes an adjournment that prevents the return of a bill such that a pocket veto may be used. For purposes of the sections below concerning the use of veto threats, the unit of analysis is a veto. The analysis does not distinguish between regular and pocket vetoes. Veto Threats in the Legislative Process Because Congress faces a two-thirds majority threshold to override a President's veto, veto threats may deter Congress from passing legislation that the President opposes. The veto override threshold may also prompt Congress to change a bill in response to a veto threat. The Framers of the U.S. Constitution viewed the veto power as a way of reminding Congress that the President also plays an important legislative role and that threatening to use the veto power can influence legislators into creating more amenable bills. Political scientist Richard A. Watson writes that "the veto is available to a President as a general weapon in his conflicts with Congress: Franklin Roosevelt sometimes asked his aides for 'something I can veto' as a lesson and reminder to congressmen that they had to deal with a President." Veto threats are, therefore, an important component in understanding the use of the President's veto power. In recent presidencies, these threats have generally been expressed either through SAPs or verbally. President Trump has also used social media to communicate his intention to veto, oppose, or support a bill. Signaling Policy Intentions Before a Veto Presidents may signal their intention to support, oppose, or veto a bill early in the legislative process using both verbal and written means. For example, Presidents can mention in a speech that they intend to veto legislation, or they can authorize others (such as a press secretary) to verbally indicate the Administration's position on specific legislation. Presidents can also issue, through the Office of Management and Budget (OMB), formal, written SAPs to communicate their intention to veto, oppose, or support a bill. Verbal Veto Threats Verbal veto threats may include commentary related to the President's strategy for working with Congress along with a threat to veto legislation if the President's policy agenda is not heeded. For example, at a press conference President George W. Bush explained, "I want the Members of Congress to hear that once we set a budget we're going to stick by it. And if not, I'm going to use the veto pen of the President of the United States to keep fiscal sanity in Washington, D.C." In another instance, President Obama said that the House "is trying to pass the most extreme and unworkable versions of a bill that they already know is going nowhere, that can't pass the Senate and that if it were to pass the Senate I would veto. They know it." In these remarks, both President Bush and President Obama used their words to attempt to deter Congress from passing bills that did not match the President's policy agenda and unambiguously remind the public of their veto power. Written Veto Threats Formal, written SAPs are frequently used to express the President's support for or opposition to particular pieces of legislation. The decision to issue a SAP is a means for the President to insert the Administration's views into the legislative debate. While SAPs provide Presidents an opportunity to assert varying levels of support for or against a bill, perhaps the most notable statement in a SAP is whether the Administration intends to veto the bill. Members of Congress may pay particular attention to a SAP when a veto threat is being made. At least one congressional leader has characterized SAPs as forerunner indicators of a veto. SAPs are often the first public document outlining the Administration's views on pending legislation and allow for the Administration to assert varying levels of support for or opposition to a bill. Because written threats are typically required to be scrutinized by the Administration through the central legislative clearance process in advance of their release, written SAP veto threats are often considered more formal than verbal veto threats. When a SAP indicates that the Administration may veto a bill, it appears in one of two ways: 1. A statement indicating that the President intends to veto the bill (hereinafter a presidential veto threat) or 2. A statement that agencies or senior advisors would recommend that the President veto the bill (hereinafter a senior advisors veto threat). These two types of SAPs indicate degrees of veto threat certainty. Generally speaking, a presidential veto threat signals the President's strong opposition to the bill. A senior advisors veto threat, on the other hand, may signal that the President may be more likely to enter into negotiations in order to reach a compromise with Congress on the bill. By publicly issuing a veto threat, the President may leverage public pressure upon Congress to support the President's agenda. Furthermore, many SAPs propose a compromise to Congress wherein the President would not exercise a veto. In addition, a President or an Administration's senior advisors may not always issue a veto threat prior to a decision to veto passed legislation. As discussed below, both Presidents Bush and Obama vetoed legislation for which they never issued a written veto threat. Veto Threats Within Different SAP Types During both the Obama and Bush Administrations, roughly three-quarters of SAPs issued were on non-appropriations bills, and roughly one-quarter concerned appropriations bills. Each SAP signaled the Administration's intent to veto, oppose, or support a bill. There are fundamental differences between non-appropriations bill SAPs and appropriations bill SAPs. Non-appropriations bill SAPs typically involve specific policy objections, such as how a program operates or what constituency the program is designed to serve. Appropriations bill SAPs, in contrast, often involve more general budgetary policy objections, such as the perceived need to balance the budget or to reallocate resources for other purposes. Therefore, the President may generally support a particular provision in an appropriations bill on programmatic policy grounds but oppose it for budgetary reasons. Or the President may oppose a particular provision in an appropriations bill for both programmatic and budgetary reasons. This report focuses on the impact of the President's veto threat in non-appropriations bill SAPs given their more targeted nature. Veto Threats During the George W. Bush and Obama Administrations Data in this report were compiled from SAPs located on the archived White House websites of the Bush and Obama Administrations. Using the classification of SAPs on each website, analysis was conducted with only non-appropriations SAPs for reasons described above. The analysis examined each SAP and individually assessed whether the SAP contained a veto threat, the type of threat (presidential or senior advisor), and whether the veto threat concerned a part of the bill or the whole bill. The analysis considers each SAP to be an individual veto threat. In instances where one bill received veto threats in multiple SAPs, veto threats were counted individually and not combined. To assess the final outcome of bills, the analysis used information on bill statuses located at Congress.gov and does not track whether bills that received a SAP were later combined into other legislative vehicles. The inherent limitations in this methodology make it difficult to determine direct effects of any veto threat on the final outcome of a bill. However, in the aggregate, general trends may be observed. The proportion of non-appropriation bill SAPs with veto threats steadily increased over the course of each of the two presidencies reviewed. SAPs containing veto threats as a proportion of all SAPs was at its highest at the conclusion of both President Bush's and President Obama's second terms. Figure 1 illustrates this trend by showing SAP veto threats as a percentage of issued SAPs. George W. Bush Administration Veto Threats While the Bush Administration remained relatively consistent in the number of veto threats issued in SAPs during its first six years, the number of threats increased during the final two years of the Administration. The Bush Administration issued a total of 491 SAPs on non-appropriations bills. Just under one-quarter (24%) of the non-appropriations bill SAPs contained a veto threat: 24 presidential veto threats and 94 senior advisors veto threats. Of bills that received a presidential veto threat, one was signed by the President, seven were vetoed, and the remaining 16 did not make it to the President's desk. Of bills that received a senior advisors veto threat, 16 were signed, one was vetoed, and the remaining 77 were not passed by both chambers. Seven of the 12 Bush Administration vetoes were preceded by a SAP containing a veto threat. While the number of veto threats in SAPs slowly increased during the first three Congresses of the Bush Administration (two in the 107 th Congress, three in the 108 th Congress, and seven in the 109 th Congress), the number of veto threats grew sharply in the 110 th Congressâto 107 veto threatsâcoinciding with Democrats gaining control of both chambers of Congress during the Republican President's final two years in office. This might suggest (and is supported by Obama Administration data) that the partisan constitution of Congress, as well as whether the Administration is in its first or second term, may impact the number of veto threats issued. Below, Figure 2 illustrates this change in the number of veto threats over time across the four Congresses associated with President Bush's two terms in office. Nevertheless, presidential veto threats in the Bush Administration remained a fraction of overall veto threats and often resulted in an actual veto. The rarity with which the Bush Administration issued presidential veto threats suggests that the Administration viewed them as a message to be used sparingly. Although the relationship between Congress and a President may change every two years with each new Congress, the relationship between an Administration and its President may also change by presidential term. Compared to a President's first term, in a second term Administration, executive branch officials may become more adept in coordinating the veto power. Additionally, a second-term President cannot be re-elected, which may allow the Administration to take a stronger position on unfavorable legislation. Alternatively, it could be that the President lacks the political influence necessary to advance his legislative agenda and instead relies on veto power to block legislative vehicles more often as his presidency concludes. Figure 3 presents veto threat percentages by presidential term for the Bush Administration, showing an increase in the President's second term. During President Bush's first term (2001-2005), 98% of SAPs did not contain a veto threat, 1% contained a senior advisors veto threat, and 1% contained a presidential veto threat. During President Bush's second term (2005-2009), 60% did not contain a veto threat, 32% contained a senior advisors veto threat, and 8% contained a presidential veto threat. Obama Administration Veto Threats In comparison to the Bush Administration, the Obama Administration steadily increased its use of veto threats issued in SAPs in every subsequent Congress. The Obama Administration issued 472 SAPs on non-appropriations bills. Just under half (48%) of these contained a veto threat: 43 presidential veto threats and 186 senior advisors veto threats. Of bills that received a presidential veto threat, four were ultimately signed by the President, five were vetoed, and 34 did not make it to the President's desk. Of bills that received a senior advisors veto threat, 17 were signed, two were vetoed, and 167 were not passed by the two chambers. Six of the 12 Obama Administration vetoes were preceded by a SAP containing a veto threat. President Obama (a Democrat) issued more veto threats in his SAPs with each passing Congress. (Democrats controlled both chambers during the 111 th Congress and the Senate during the 112 th Congress, and Republicans controlled the House during the 113 th Congress and both chambers during the 114 th Congress. ) Below, Figure 4 illustrates this change in the number of veto threats over time by Congress. Although the number of veto threats increased over the course of the Obama presidency (eight in the 111 th Congress, 54 in the 112 th Congress, 63 in the 113 th Congress, and 104 in the 114 th Congress), the number of presidential veto threats remained small when compared to the total number of veto threats, varying from a low of 14.3% in the 111 th Congress to a high of 28.3% in the 114 th Congress. The increase over time in total number of veto threats may indicate that President Obama was presented with more legislation he was likely to oppose. However, the increase is mostly composed of senior advisors veto threats. This suggests that the Administration nonetheless treated presidential veto threats, compared to senior advisors veto threats, as a tool to be used more rarely. As with the Bush Administration, President Obama's use of veto threats in the first and second terms differ. Figure 5 presents veto threat percentages by presidential term as opposed to by Congress. During President Obama's first term (2009-2013), 69% of SAPs did not contain a veto threat, 27% contained a senior advisors veto threat, and 4% contained a presidential veto threat. During President Obama's second term (2013-2017), 39% of SAPs did not contain a veto threat, 49% contained a senior advisors veto threat, and 13% contained a presidential veto threat. Congressional Responses to Veto Threats CRS analyzed all veto threats contained in SAPs on non-appropriations legislation across these two Administrations and determined whether the veto threat was isolated to a provision of the bill (a partial bill veto threat) or if the veto threat was not particularized (a whole bill veto threat). President Bush issued partial bill veto threats and whole bill veto threats an equal amount of the time. However, the type of threat he used in each category varied. Of partial bill veto threats, 7% were presidential veto threats and the remaining 93% were senior advisors veto threats. Of whole bill veto threats, 34% were presidential veto threats and the remaining 66% were senior advisors veto threats. In contrast, President Obama issued partial bill veto threats more sparingly (8% versus 92% for whole bill veto threats). Similar to President Bush, however, of partial bill veto threats, 6% were presidential veto threats and the remaining 94% were senior advisors veto threats. Of whole bill veto threats, 20% were presidential veto threats and the remaining 80% were senior advisors veto threats. The difference in frequency of partial and whole bill veto threats across the Administrations may suggest that the two Presidents viewed the use of veto threats differently: One President may have used partial threats to negotiate more with Congress, whereas another President preferred to threaten a veto only when he viewed an entire bill as unfavorable. Likewise, the increased frequency of partial bill senior advisors veto threats suggests that both Presidents preferred to use presidential veto threats in rejecting an entire bill and leaving senior advisors veto threats for negotiations where only part of a bill is unfavorable. Legislative Action Following a Veto Threat A presidential veto threat in a SAP may be more likely than a senior advisors veto threat to deter passage of a bill because of the President's direct association with the threat. However, an analysis of these two Administrations does not necessarily support this argument. Figure 6 shows that bills appeared less likely to pass when the bill received a senior advisors veto threat versus a presidential veto threat. This may be due to a number of factors, including that senior advisors threats are more frequently issued than presidential veto threats (279 senior advisors threats and 67 presidential veto threats were issued across these two presidencies) or that Congress may perceive it to be beneficial to pass presidentially threatened legislation anyway based on certain political calculations and circumstances. Veto Threats and Veto Patterns During the Bush and Obama Administrations, enrolled bills that passed both chambers and were met with a presidential veto threat SAP were vetoed more often than were those that were met with a senior advisors threat. Figure 7 shows the outcomes of bills receiving veto threats that were passed by Congress and sent to the President. Across both the Bush and Obama Administrations, a bill that received a presidential veto threat and was passed was followed by a veto 70.6% of the time, whereas a bill that received a senior advisors veto threat was later vetoed 8.3% of the time. When a President vetoes a bill, it marks the end of the President's ability to procedurally affect whether or not a bill becomes law. Whether or not that specific bill becomes law is no longer in the President's hands. Congress may or may not elect to attempt an override. George W. Bush Administration Vetoes and Ensuing Congressional Action President Bush exercised the veto power 12 times. Four of these vetoes were overridden. Six vetoed bills were forewarned with a written veto threat. (Four received a presidential threat, and two received senior advisors threats.) Three additional bills received statements noting the Administration's opposition to the bill but did not include a veto threat. None of the bills that Congress later overrode were preceded by a presidential veto threat. Three-quarters of President Bush's vetoes (9 of 12) were preceded by a written statement of opposition to the bill. President Bush also issued multiple written veto threats on four bills that would later receive a veto: Three bills received two threats each, and one bill received two statements of opposition. Obama Administration Vetoes and Ensuing Congressional Action President Obama vetoed 12 bills, and Congress overrode his veto once. As was true for President Bush, six of President Obama's vetoes were preceded by a written veto threat (four presidential and two senior advisors threats). Unlike the patterns observed for the Bush presidency, however, all of President Obama's veto threats were whole bill veto threats. Whereas President Bush also communicated in SAPs his opposition to three bills short of threatening a veto, President Obama either did not issue a SAP at all or issued one that contained a veto threat. One of President Obama's vetoed bills received two veto threats. President Obama's approach of issuing either no statement at all on a bill or a statement containing a veto threat marks a different approach from the one used by President Bush.	Summary:	gov_report	1,024	null	46
crs_R46258	crs_R46258_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Regional Political and Economic Environment With 33 countriesâranging from the Caribbean nation of St. Kitts and Nevis, one of the world's smallest states, to the South American giant of Brazil, the world's fifth-largest countryâthe Latin American and Caribbean region has made significant advances over the past four decades in terms of both political and economic development. (See Figure 1 and Table 2 for a map and basic facts on the region's countries.) Significant challenges remain, however, and some countries have experienced setbacks, most prominently Venezuela (which has descended into dictatorship). In the early 1980s, authoritarian regimes governed 16 Latin American and Caribbean countries, both on the left and the right. Today, three countries in the regionâCuba, Nicaragua, and Venezuelaâare ruled by authoritarian governments. Most governments in the region today are elected democracies. Although free and fair elections have become the norm, recent elections in several countries have been controversial and contested. In 2019, Argentina, Dominica, El Salvador, Panama, and Uruguay held successful free and fair elections. Guatemala held two presidential election rounds in June and August 2019 that international observers judged to be successful, but the elections suffered because several popular candidates were disqualified from the race on dubious grounds. In Bolivia, severe irregularities in the conduct of the country's October 2019 presidential elections ignited protests and violence that led to the resignation of incumbent President Evo Morales, who was seeking a fourth term; new elections under an interim president are now scheduled for May 2020. Most recently, Guyana held elections on March 2, 2020, which were marred by allegations of fraud; final results are on hold pending court action regarding the final verification of some votes. Six other Caribbean countries are scheduled to hold elections in 2020 (see text box " 2020 Elections "). Despite significant improvements in political rights and civil liberties since the 1980s, many countries in the region still face considerable challenges. In a number of countries, weaknesses remain in the state's ability to deliver public services, ensure accountability and transparency, advance the rule of law, and ensure citizen safety and security. There are numerous examples of elected presidents who have left office early amid severe social turmoil and economic crises, the presidents' own autocratic actions contributing to their ouster, or high-profile corruption. In addition to Morales's resignation in 2019, corruption scandals either caused or contributed to several presidents' resignations or removals of several presidentâGuatemala in 2015, Brazil in 2016, and Peru in 2018. Although the threat of direct military rule has dissipated, civilian governments in several countries have turned to their militaries or retired officers for support or during crises, raising concerns among some observers. Most recently, in El Salvador on February 9, 2020, President Nayib Bukele used the military in an effort to intimidate the country's legislature into approving an anti-crime bill; the action elicited strong criticism in El Salvador and abroad, with concerns centered on the politicization of the military and the separation of powers. The quality of democracy has eroded in several countries over the past several years. The Economist Intelligence Unit's (EIU's) 2019 democracy index shows a steady regional decline in democratic practices in Latin America since 2017. Several years ago only Cuba was viewed as an authoritarian regime, but Venezuela joined its ranks in 2017 as President NicolÃ¡s Maduro's government violently repressed the political opposition. Nicaragua turned to authoritarian practices in 2018 under long-time President Daniel Ortega, as the government violently repressed protests. The continued regional downward trend in 2019 stemmed from Bolivia's post-election crisis and to a lesser extent by setbacks in the following other countries: Guatemala, where the government ousted the anti-corruption body known as the International Commission against Impunity in Guatemala; Haiti, which experienced widespread anti-government protests against corruption and deteriorating economic conditions; and Guyana, with the delay of elections following a no-confidence vote by the legislature. Public satisfaction with how democracy is operating has declined along with the quality of democracy in the region. According to the 2018/2019 AmericasBarometer public opinion survey, the percentage of individuals satisfied with how democracy was working in their countries averaged 39.6% among 18 countries in the region, the lowest level of satisfaction since the poll began in 2004. Given these trends, the eruption of social protests in many countries around the region in 2019 is unsurprising, but in each country a unique set of circumstances has sparked the protests. In addition to the protests in Bolivia and Haiti cited above, protests broke out in Ecuador over fuel price increases, in Chile over pent-up frustration over social inequities, and in Colombia over opposition to a range of government policies and proposals, from tax reform to education to peace accord implementation. Although each country is unique, several broad political and economic factors appear to be driving the decline in satisfaction with democracy in the region. Political factors include an increase in authoritarian practices, weak democratic institutions and politicized judicial systems, corruption, high levels of crime and violence, and organized crime that can infiltrate or influence state institutions. Economic factors include declining or stagnant regional economic growth rates over the past several years, high levels of income inequality in many Latin American countries, increased poverty, and the inadequacy of social safety net programs or advancement opportunities, along with increased pressure on the region's previously expanding middle class. Beginning around 2015, the global decline in commodity prices significantly affected the region, as did China's economic slowdown and its reduced appetite for imports from the region in 2015 and 2016 (see Table 1 ). According to the International Monetary Fund (IMF), the region experienced an economic contraction of 0.6% in 2016, dragged down by recessions in Argentina and Brazil, as well as by Venezuela's severe economic deterioration as oil prices fell. Since then, the region has registered only marginal growth rates, including an estimated growth rate of 0.2% in 2019. Regional growth in 2019 was suppressed by the collapse of much of the Venezuelan economy, which contracted 35%, and by continued recession in Argentina, which suffered an economic contraction of 3.1%. The current IMF 2020 outlook is for regional growth to reach 1.6%, led by recovery in Brazil and spurred by growth forecasts of 3% or higher for Chile, Colombia, and Peru. The economic fallout from the current coronavirus disease (COVID-19) outbreak, which already is having repercussions around the world, could jeopardize this forecast. Even before the onset of the coronavirus, recession was forecasted to continue in several countries, including Argentina and Venezuela, with contractions of 1.3% and 10% respectively. The risk of social unrest similar to that experienced in 2019 could also constrain growth in some countries. Despite some easing of income inequality in the region from 2002 to 2014, reductions in income inequality have slowed since 2015; Latin America remains the most unequal region in the world in terms of income inequality, according to the United Nations (U.N.) Economic Commission for Latin America and the Caribbean. The level of poverty in the region also has increased over the past five years. In 2014, 27.8% of the region's population lived in poverty; that figure increased to 30.8% by 2019. U.S. Policy Toward Latin America and the Caribbean U.S. interests in Latin America and the Caribbean are diverse and include economic, political, security, and humanitarian concerns. Geographic proximity has ensured strong economic linkages between the United States and the region, with the United States being a major trading partner and source of foreign investment for many Latin American and Caribbean countries. Free-trade agreements (FTAs) have augmented U.S. economic relations with 11 countries in the region. The Western Hemisphere is a large source of U.S. immigration, both legal and illegal; geographic proximity and economic and security conditions are major factors driving migration trends. Curbing the flow of illicit drugs from Latin America and the Caribbean has been a key component of U.S. relations with the region and a major interest of Congress for more than four decades. The flow of illicit drugs, including heroin, methamphetamine, and fentanyl from Mexico and cocaine from Colombia, poses risks to U.S. public health and safety; and the trafficking of such drugs has contributed to violent crime and gang activities in the United States. Since 2000, Colombia has received U.S. counternarcotics support through Plan Colombia and its successor programs. In addition, for over a decade, the United States sought to forge close partnerships with other countries to combat drug trafficking and related violence and advance citizen security. These efforts include the MÃ©rida Initiative begun in 2007 to support Mexico, the Central America Regional Security Initiative (CARSI) begun in 2008, and the Caribbean Basin Security Initiative (CBSI) begun in 2009. Another long-standing component of U.S. policy has been support for strengthened democratic governance and the rule of law. As described in the previous section, although many countries in the region have made enormous strides in terms of democratic political development, several face considerable challenges. U.S. policy efforts have long supported democracy promotion efforts, including support for strengthening civil society and promoting the rule of law and human rights. Trump Administration Policy In its policy toward Latin America and the Caribbean, the Trump Administration has retained many of the same priorities and programs of past Administrations, but it has also diverged considerably. The Administration has generally adopted a more confrontational approach, especially regarding efforts to curb irregular immigration from the region. In 2018, the State Department set forth a framework for U.S. policy toward the region focused on three pillars for engagement: (1) economic growth and prosperity, (2) security, and (3) democratic governance. The framework reflects continuity with long-standing U.S. policy priorities for the region but at times appears to be at odds with the Administration's actions, which sometimes have been accompanied by antagonistic statements on immigration, trade, and foreign aid. Meanwhile, according to Gallup and Pew Research Center polls, negative views of U.S. leadership in the region have increased markedly during the Trump Administration (see text box " Latin America and the Caribbean: Views of U.S. Leadership "). Foreign Aid. The Administration's proposed foreign aid budgets for FY2018 and FY2019 would have cut assistance to the region by more than a third, and the FY2020 budget request would have cut funding to the region by about 30% compared to that appropriated in FY2019. Congress did not implement those budget requests and instead provided significantly more for assistance to the region in appropriations measures. In 2019, however, the Trump Administration withheld some assistance to Central America to compel its governments to curb the flow of migrants to the United States. (See " U.S. Foreign Aid " section.) Trade. In 2017, President Trump ordered U.S. withdrawal from the proposed Trans-Pacific Partnership (TPP) FTA that had been negotiated by 12 Asia-Pacific countries in 2015. The TPP would have increased U.S. economic linkages with Latin American countries that were parties to the agreementâChile, Mexico, and Peru. President Trump strongly criticized the North American Free Trade Agreement (NAFTA) with Mexico and Canada, repeatedly warned that the United States might withdraw from the agreement, and initiated renegotiations in 2017. The three countries agreed in September 2018 to a new United States-Mexico-Canada Agreement (USMCA), which retained many NAFTA provisions but also included some modernizing updates and changes, such as provisions on digital trade and the dairy and auto industries. (See " Trade Policy " section.) Mexico , Central America, and Migration Issues . Relations with Mexico have been tested by inflammatory anti-immigrant rhetoric, immigration actions, and changes in U.S. border and asylum polices that have shifted the burden of interdicting migrants and offering asylum to Mexico. In September 2017, the Administration announced that it would end the Deferred Action for Childhood Arrivals (DACA) program; begun in 2012 by the Obama Administration, the program provides relief from deportation for several hundred thousand immigrants who arrived in the United States as children. The future of the initiative remains uncertain given challenges in federal court. In December 2018, Mexico's president agreed to allow the United States to return certain non-Mexican migrants to Mexico (pursuant to Migrant Protection Protocols or MPP) while awaiting U.S. immigration court decisions. In May 2019, President Trump threatened to impose new tariffs on motor vehicles from Mexico if the government did not increase actions to deter U.S.-bound migrants from Central America; Mexico ultimately agreed in June 2019 to increase its enforcement actions and to allow more U.S.-bound asylum seekers to await their U.S. immigration proceedings in Mexico. Despite tensions, U.S.-Mexico bilateral relations remain friendly, with continued strong energy and economic ties, including the USMCA, and close security cooperation related to drug interdiction. (See " Mexico " section.) Other Administration actions on immigration have caused concern in the region. In 2017 and 2018, the Administration announced plans to terminate Temporary Protected Status (TPS) designations for Nicaragua, Haiti, El Salvador, and Honduras, but federal court challenges have put the terminations on hold. (See " Migration Issues " section.) Unauthorized migration from Central America's Northern Triangle countriesâEl Salvador, Guatemala, and Hondurasâhas increased in recent years, fueled by difficult socioeconomic and security conditions and poor governance. To deter such migration, the Trump Administration implemented a "zero tolerance" policy toward illegal border crossings in 2018 and applied restrictions on access to asylum at the U.S. border. The Administration also has used aid cuts of previously appropriated assistance for FY2017 and FY2018 and threats of increased U.S. tariffs and taxes on remittances to compel Central American countries and Mexico to curb unauthorized migration to the United States. In 2019, the Administration negotiated "safe third country" agreements with each of the Northern Triangle countries to permit the United States to transfer asylum applicants from third countries to the Northern Triangle countries. (See " Central America's Northern Triangle " section.) Venezuela , Cuba , and Nicaragua . In November 2018, then-National Security Adviser John Bolton made a speech in Miami, FL, on the Administration's policies in Latin America that warned about "the destructive forces of oppression, socialism, and totalitarianism" in the region. Reminiscent of Cold War political rhetoric, Bolton referred to Cuba, Nicaragua, and Venezuela as the "troika of tyranny" in the hemisphere that has "finally met its match." He referred to the three countries as "the cause of immense human suffering, the impetus of enormous regional instability, and the genesis of a sordid cradle of communism in the Western Hemisphere." As the situation in Venezuela has deteriorated under the Maduro government, the Trump Administration has imposed targeted and broader financial sanctions, including sanctions against the state oil company, the country's main source of income. In January 2019, the Administration recognized the head of Venezuela's National Assembly, Juan GuaidÃ³, as interim president. In September 2019, the United States joined 11 other Western Hemisphere countries to invoke the Rio Treaty to facilitate a regional response to the Venezuelan crisis. The Administration also is providing humanitarian and development assistance for Venezuelans who have fled to other countries, especially Colombia, as well as for Venezuelans inside Venezuela. (See " Venezuela " section.) With regard to Cuba, the Trump Administration has not continued the policy of engagement advanced during the Obama Administration and has imposed a series of economic sanctions on Cuba for its poor human rights record and support for the Maduro government. Economic sanctions have included restrictions on travel and remittances, efforts to disrupt oil flows from Venezuela, and authorization (pursuant to Title III of the LIBERTAD Act, P.L. 104-114 ) of the right to file lawsuits against those trafficking in confiscated property in Cuba. In 2017, the State Department cut the staff of the U.S. Embassy in Havana by about two-thirds in response to unexplained injuries of U.S. diplomatic staff. (See " Cuba " section.) Since political unrest began to grow in Nicaragua in 2018, the Trump Administration has employed targeted sanctions against several individuals close to President Ortega due to their alleged ties to human rights abuses or significant corruption. (See " Nicaragua " section.) Congress and Policy Toward the Region Congress traditionally has played an active role in policy toward Latin America and the Caribbean in terms of both legislation and oversight. Given the region's geographic proximity to the United States, U.S. foreign policy toward the region and domestic policy often overlap, particularly in areas of immigration and trade. The 116 th Congress completed action on FY2019 foreign aid appropriations in February 2019 when it enacted the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ). Amounts appropriated for key U.S. initiatives and countries in Latin America and the Caribbean exceeded the Administration's request by almost $600 million. Congress completed action on FY2020 foreign aid appropriations in December 2019 when it enacted the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ), with amounts for key countries and regional programs once again significantly exceeding the Administration's request. Congress recently has begun consideration of the Administration's FY2021 foreign aid request. In January 2020, Congress completed action on implementing legislation for the USMCA ( P.L. 116-113 ). The agreement retains many of NAFTA's provisions and includes new provisions on the auto and dairy industries and some modernizing features. Before U.S. implementing legislation received final congressional approval in January 2020, the trade agreement was amended to address concerns of Congress regarding provisions related to labor (including enforcement), the environment, dispute settlement procedures, and intellectual property rights (IPR). On Venezuela, Congress has supported the Administration's efforts to sanction the Maduro government for its antidemocratic actions and to provide humanitarian assistance to Venezuelan migrants throughout the region. In December 2019, Congress enacted the Venezuela Emergency Relief, Democracy Assistance, and Development Act of 2019, or the VERDAD Act of 2019, in Division J of P.L. 116-94 . The measure incorporates provisions from S. 1025 , as reported by the Senate Foreign Relations Committee in June 2019, and some language or provisions from three bills on Venezuela passed by the House in March 2019: H.R. 854 , to authorize humanitarian assistance to the Venezuelan people; H.R. 920 , to restrict the export of defense articles and crime control materials; and H.R. 1477 , to require a threat assessment and strategy to counter Russian influence in Venezuela. In other legislative action, the House approved H.R. 549 in July 2019, which would provide TPS to Venezuelans in the United States. Congress included several provisions related to Latin America in the National Defense Authorization Act for Fiscal Year 2020 (FY2020 NDAA; P.L. 116-92 ), signed into law in December 2019. Among the provisions are the following: Venezuela. Section 890 prohibits the Department of Defense (DOD) from entering into a contract for the procurement of goods or services with any person that has business operations with the Maduro regime in Venezuela. Western Hemisphere Resources. Section 1265 provides that the Secretary of Defense shall seek to enter into a contract with an independent nongovernmental institute that has recognized credentials and expertise in national security and military affairs to conduct an accounting and an assessment of the sufficiency of resources available to the U.S. Southern Command, the U.S. Northern Command, the Department of State, and the U.S. Agency for International Development (USAID) to carry out their respective missions in the Western Hemisphere. Among other matters, the assessment is required to include "a list of investments, programs, or partnerships in the Western Hemisphere by China, Iran, Russia, or other adversarial groups or countries that threaten the national security of the United States." A report on the assessment is due to Congress within one year, in unclassified form, but may include a classified annex. Brazil. Section 1266 requires the Secretary of Defense, in coordination with the Secretary of State, to submit a report to Congress regarding the human rights climate in Brazil and U.S.-Brazilian security cooperation. Guatemala. Section 1267 requires the Secretary of Defense to certify, prior to the transfer of any vehicles to the Guatemalan government, that the government has made a credible commitment to use such equipment only as intended. Honduras. Section 1268 requires the Secretary of Defense to enter into an agreement with an independent institution to conduct an analysis of the human rights situation in Honduras. Central America and Mexico. Section 5522 requires the Director of National Intelligence, in collaboration with other agencies, to submit within 90 days a comprehensive assessment of drug trafficking, human trafficking, and human smuggling activities in Central America and Mexico; the report may be in classified form, but if so, it shall contain an unclassified summary. Other bills and resolutions have passed either or both houses: Mexico. In January 2019, the House approved H.R. 133 , which would promote U.S.-Mexican economic partnership and cooperation, including a strategy to prioritize and expand educational and professional exchange programs with Mexico. The Senate approved the bill, amended, in January 2020, which included a new provision that would promote positive cross-border relations as a priority for advancing U.S. foreign policy and programs. Central America. The House approved H.R. 2615 , the United States-Northern Triangle Engagement Act, in July 2019, which would authorize foreign assistance to El Salvador, Guatemala, and Honduras to address the root causes of migration. The bill would also require the State Department to devise strategies to foster economic development, combat corruption, strengthen democracy and the rule of law, and improve security conditions in the region. Bolivia. The Senate approved S.Res. 35 in April 2019, expressing support for democratic principles in Bolivia and throughout Latin America. In January 2020, the Senate approved S.Res. 447 , expressing concerns about election irregularities and violence in Bolivia and supporting the convening of new elections. Argentina. Both houses approved resolutions, H.Res. 441 in July 2019 and S.Res. 277 in October 2019, commemorating the 25 th anniversary of the 1994 bombing of the Argentine-Israeli Mutual Association in Buenos Aires. Congressional committees have held almost 20 oversight hearings on the region, including on Venezuela, Central America (including the impact of U.S. aid cuts), relations with Colombia, human rights in Cuba, China's engagement in Latin America, environmental concerns in the Brazilian Amazon, repression in Nicaragua, and security cooperation with Mexico (see Appendix ). Regional U.S. Policy Issues U.S. Foreign Aid The United States provides foreign assistance to Latin American and Caribbean nations to support development and other U.S. objectives. U.S. policymakers have emphasized different strategic interests in the region at different times, from combating Soviet influence during the Cold War to promoting democracy and open markets, as well as countering illicit narcotics, since the 1990s. Over the past three years, the Trump Administration has sought to refocus U.S. assistance efforts in the region to address U.S. domestic concerns, such as irregular migration and transnational crime. The Trump Administration has also sought to cut U.S. assistance to Latin America and the Caribbean. In 2019, for example, the Administration withheld an estimated $405 million that Congress had appropriated for Central America in FY2018 and reprogrammed the funds to address other foreign policy priorities inside and outside the Western Hemisphere. (See " Central America's Northern Triangle ," below.) The Administration has proposed additional foreign assistance cuts in each of its annual budget proposals. For FY2020, the Administration requested approximately $1.2 billion to be provided to the region through foreign assistance accounts managed by the State Department and USAID, which is about $503 million (30%) less than the region received in FY2019 (see Table 3 ). The request would have cut funding for nearly every type of assistance provided to the region and would have reduced aid for most Latin American and Caribbean countries. The Administration's FY2020 budget proposal also would have eliminated the Inter-American Foundation, an independent U.S. foreign assistance agency that promotes grassroots development in the region. For FY2021, the Administration requested $1.4 billion for the region, which is about 18% less than Congress appropriated for FY2019, and again proposed eliminating the Inter-American Foundation. Congressional Action: After a partial government shutdown and a short-term continuing resolution ( P.L. 116-5 ), the 116 th Congress completed action on FY2019 foreign aid appropriations in February 2019. The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) included an estimated $1.69 billion of foreign assistance for Latin America and the Caribbean. That amount was slightly more than the $1.67 billion appropriated for the region in FY2018 and nearly $600 million more than the Trump Administration requested for the region. Although the House passed an FY2020 foreign aid appropriations bill in June 2019 ( H.R. 2740 , H.Rept. 116-78 ), and the Senate Appropriations Committee reported its bill in September 2019 ( S. 2583 , S.Rept. 116-126 ), neither measure was enacted before the start of FY2020. Instead, Congress passed two continuing resolutions ( P.L. 116-59 and P.L. 116-69 ), which funded foreign aid programs in Latin America and the Caribbean at the FY2019 level between October 1, 2019, and December 20, 2019, when President Trump signed into law the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ). The act and the accompanying explanatory statement do not specify appropriations levels for every Latin American and Caribbean nation. Nevertheless, the amounts designated for key U.S. initiatives in Central America, Colombia, and Mexico significantly exceed the Administration's request. The act provides "not less than" $519.9 million to continue implementation of the U.S. Strategy for Engagement in Central America, which is about $75 million more than the Administration requested but $8 million less than Congress appropriated for the initiative in FY2019. "not less than" $448.3 million to support the peace process and security and development efforts in Colombia, which is about $104 million more than the Administration requested and $27 million more than Congress appropriated for Colombia in FY2019. $157.9 million to support security and rule-of-law efforts in Mexico, which is $79 million more than the Administration requested but about $5 million less than Congress appropriated for Mexico in FY2019. The act also provides $37.5 million for the Inter-American Foundation to continue its grassroots development programs throughout the region. Resolutions have been introduced in both houses (H.Res. 649 and S.Res. 297 ) to commend the Inter-American Foundation on its 50 th anniversary, recognize its contributions to development and to advancing U.S. national interests, and pledge continued support for the agency's work. For additional information, see CRS Report R45547, U.S. Foreign Assistance to Latin America and the Caribbean: FY2019 Appropriations , by Peter J. Meyer and Edward Y. Gracia. Drug Trafficking and Criminal Gangs Latin America and the Caribbean feature prominently in U.S. counternarcotics policy due to the region's role as a source and transit zone for several illicit drugs destined for U.S. marketsâcocaine, marijuana, methamphetamine, and opiates (plant-based and synthetic). Heroin abuse and synthetic opioid-related deaths in the United States have reached epidemic levels, raising questions about how to address foreign sources of opioidsâparticularly Mexico, which has experienced an uptick in opium poppy cultivation and the production of heroin and fentanyl (a synthetic opioid). According to the State Department, over 90% of heroin seized and sampled in the United States comes from Mexico and increasingly has included fentanyl. Policymakers also are concerned that methamphetamine and cocaine overdoses in the United States are on an upward trajectory. Rising cocaine usage occurred as coca cultivation and cocaine production in Colombia, which supplies roughly 89% of cocaine in the United States, reached record levels in 2017 before leveling off in 2018. Whereas Mexico, Colombia, Peru, and most other source and transit countries in the region work closely with the United States to combat drug production and interdict illicit flows, the Venezuelan government does not. Public corruption in Venezuela also has made it easier for drug trafficking organizations to smuggle illicit drugs. Contemporary drug trafficking and transnational crime syndicates have contributed to degradations in citizen security and economic development in some countries, often resulting in high levels of violence and homicide. Despite efforts to combat the drug trade, many Latin American governments, particularly in Mexico and Central Americaâa region through which roughly 93% of cocaine from South America transited in 2018âcontinue to suffer from weak criminal justice systems and overwhelmed law enforcement agencies. Government corruption, including high-level cooperation with criminal organizations, further frustrates efforts to interdict drugs, investigate and prosecute traffickers, and recover illicit proceeds. At the same time, a widespread perceptionâparticularly among Latin American observersâis that U.S. demand for illicit drugs is largely to blame for the region's ongoing crime and violence problems. Criminal gangs with origins in southern California, principally the Mara Salvatrucha (MS-13) and the "18 th Street" gang, continue to undermine citizen security and subvert government authority in Central America. Gang-related violence has been particularly acute in El Salvador, Honduras, and urban areas in Guatemala, contributing to some of the highest homicide rates in the world. Although some gangs engage in local drug distribution, gangs generally do not have a role in transnational drug trafficking. Gangs have been involved in a range of other criminal activities, including extortion, money laundering, and weapons smuggling, and gang-related violence has fueled unauthorized migration to the United States. U.S. Policy. For more than 40 years, U.S. policy toward the region has focused on countering drug trafficking and reducing drug production in Latin America and the Caribbean. The largest support program, Plan Colombia, provided more than $10 billion to help Colombia combat both drug trafficking and rebel groups financed by the drug trade from FY2000 to FY2016. After Colombia signed a historic peace accord with the country's largest leftist guerrilla group, the Revolutionary Armed Forces of Colombia (FARC), the United States provided assistance to help implement the agreement. U.S. officials concerned about rising cocaine production have praised Colombian President Ivan Duque's willingness to restart aerial fumigation of coca crops and significantly scale up manual eradication. U.S. support to combat drug trafficking and reduce crime also has included a series of partnerships with other countries in the region: the MÃ©rida Initiative, which has led to improved bilateral security cooperation with Mexico; the Central America Regional Security Initiative (CARSI); and the Caribbean Basin Security Initiative (CBSI). During the Obama Administration, those initiatives combined U.S. antidrug and rule-of-law assistance with economic development and violence prevention programs intended to improve citizen security in the region. The Trump Administration's approach to Latin America and the Caribbean has focused heavily on U.S. security objectives. All of the aforementioned assistance programs have continued, but they place greater emphasis on combating drug trafficking, gangs, and other criminal groups than during the Obama Administration. The Trump Administration also has sought to reduce funding for each of the U.S. security assistance programs and has reprogrammed, withheld, or not yet obligated significant portions of assistance to Central America due to concerns that those governments have not adequately curbed unauthorized migration. President Trump has welcomed Mexico's assistance on migration enforcement, but the Administration noted in an FY2020 presidential determination issued in August 2019 that "without further progress over [this year], he could determine that Mexico has 'failed demonstrably' to meet its international drug control commitments." Such a determination could trigger U.S. foreign assistance cuts to Mexico. President Trump also has prioritized combating gangs, namely the MS-13, which the Department of Justice (DOJ) has named a top priority for U.S. law enforcement agencies. U.S. agencies, in cooperation with vetted units in Central America funded through CARSI, have brought criminal charges against thousands of MS-13 members in the United States. U.S. assistance that supports vetted units working with the U.S. Department of Homeland Security (DHS) and DOJ have been exempt from recent aid reductions for Central America. Congressional Action: The 116 th Congress has held hearings on opioids, which included consideration of heroin and fentanyl production in Mexico; corruption in the Americas; the importance of U.S. assistance to Central America (including CARSI); and relations with Colombia, Mexico, and Central America, including antidrug cooperation. Compared to FY2018, the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provided increased FY2019 resources for Colombia and Mexico, slightly less funding for CARSI, and stable funding for the CBSI. P.L. 116-6 provided $1.5 million to support the creation of a Western Hemisphere Drug Policy Commission to assess U.S. policy and make recommendations on how it might be improved. The Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ) provides more security and rule of law funding for Colombia and Mexico than the estimated FY2019 appropriations level, less funding for CARSI, and slightly more funding for the CBSI. The FY2020 NDAA ( P.L. 116-92 ) requires the Director of National Intelligence, in collaboration with other agencies, to submit within 90 days of enactment an assessment of drug trafficking, human trafficking, and human smuggling activities and how those activities influence migration in Mexico and the Northern Triangle. The FY2020 NDAA also establishes a Commission on Combating Synthetic Opioid Trafficking to report on, among other things, the scale of opioids coming from Mexico. For additional information, see CRS In Focus IF10578, Mexico: Evolution of the MÃ©rida Initiative, 2007-2020 , by Clare Ribando Seelke; CRS In Focus IF10578, Mexico: Evolution of the MÃ©rida Initiative, 2007-2020 , by Clare Ribando Seelke; CRS In Focus IF10400, Transnational Crime Issues: Heroin Production, Fentanyl Trafficking, and U.S.-Mexico Security Cooperation , by Clare Ribando Seelke and Liana W. Rosen; CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress , by Peter J. Meyer; CRS Report R43813, Colombia: Background and U.S. Relations , by June S. Beittel; and CRS In Focus IF10789, Caribbean Basin Security Initiative , by Mark P. Sullivan. Trade Policy The Latin American and Caribbean region is one of the fastest-growing regional trading partners for the United States. Economic relations between the United States and most of its trading partners in the region remain strong, despite challenges, such as President Trump's past threats to withdraw from NAFTA, tariff policy, diplomatic tensions, and high levels of violence in some countries in the region. The United States accounts for roughly 33% of the Latin American and Caribbean region's merchandise imports and 44% of its merchandise exports. Most of this trade is with Mexico, which accounted for 77% of U.S. imports from the region and 61% of U.S. exports to the region in 2019. In 2019, total U.S. merchandise exports to Latin America and the Caribbean were valued at $418.9 billion, down from $429.7 billion in 2018. U.S. merchandise imports were valued at $467.0 billion in 2019 (see Table 4 ). The United States strengthened economic ties with Latin America and the Caribbean over the past 24 years through the negotiation and implementation of FTAs. Starting with NAFTA in 1994, which will be replaced by the USMCA when it enters into force, the United States currently has six FTAs in force involving 11 Latin American countries: Mexico, Chile, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Panama, and Peru. NAFTA was significant because it was the first U.S. FTA with a country in the Latin American and Caribbean region, and it established new rules and disciplines that influenced future trade agreements on issues important to the United States, such as IPR protection, services trade, agriculture, dispute settlement, investment, labor, and the environment. In addition to FTAs, the United States has extended unilateral trade preferences to some countries in the region through several trade preference programs. The Caribbean Basin Economic Recovery Act (no expiration), for example, provides limited duty-free entry of select Caribbean products as a core element of the U.S. foreign economic policy response to uncertain economic and political conditions in the region. Several preference programs for Haiti, which expire in 2025, provide generous and flexible unilateral preferences to the country's apparel sector. Two other preference programs include the Caribbean Basin Trade Partnership Act (CBTPA), which expires in September 2020, and the Generalized System of Preferences (GSP), which expires in December 2020. The CBTPA extends preferences on apparel products to eligible Caribbean countries similar to those given to Mexico under NAFTA. The GSP provides duty-free tariff treatment to certain products imported from 120 designated developing countries throughout the world, including Argentina, Brazil, Ecuador, and other Latin American and Caribbean countries. In the 15 to 20 years after NAFTA, some of the largest economies in South America, such as Argentina, Brazil, and Venezuela, resisted the idea of forming comprehensive FTAs with the United States. That opposition may be changing. In September 2019, President Trump noted preliminary talks with Brazil for a trade agreement, and Brazilian officials recently stated that the country was ready for a trade deal similar to USMCA. Numerous other bilateral and plurilateral trade agreements throughout the Western Hemisphere do not include the United States. For example, the Pacific Alliance, a trade arrangement composed of Mexico, Peru, Colombia, and Chile, is reportedly moving forward on a possible trade arrangement with Mercosur, composed of Brazil, Argentina, Uruguay, and Paraguay. On June 28, 2019, the European Union (EU) and Mercosur reached a political agreement to negotiate an ambitious and comprehensive trade agreement. President Trump has made NAFTA renegotiation and modernization a priority of his Administration's trade policy. Early in his Administration, he viewed FTAs as detrimental to U.S. workers and industries, stating that NAFTA was "the worst trade deal" and repeatedly warning that the United States may withdraw from the agreement. The United States, Canada, and Mexico subsequently renegotiated NAFTA and concluded negotiations for USMCA on September 30, 2018. Mexico was the first country to ratify the agreement in June 2019 and the first country to approve the amended USMCA on December 12, 2019. The original text of USMCA was amended to address congressional concerns on labor, environment, IPR, and dispute settlement provisions. On January 16, 2020, Congress approved the agreement, and many expect Canada's parliament to ratify it in early 2020. The USMCA retains NAFTA's market opening provisions and most other provisions. The agreement makes notable changes to labor and environment provisions, market access provisions for autos and agriculture products, and rules, such as investment, government procurement, IPR, and dispute settlement; it adds new provisions on digital trade, state-owned enterprises, and currency misalignment. All parties must ratify the agreement and have laws and regulations in place to meet their USMCA commitments before the agreement can enter into force. In 2018, President Trump issued two proclamations imposing tariffs on U.S. imports of certain steel and aluminum products using presidential powers granted under Section 232 of the Trade Expansion Act of 1962. In doing so, the Administration added new challenges to U.S. trade relations with the region. The proclamations outlined the President's decisions to impose tariffs of 25% on steel and 10% on aluminum imports, with some flexibility on the application of tariffs by country. In May 2018, President Trump proclaimed Argentina and Brazil permanently exempt from the steel tariffs in exchange for quota agreements, but he threatened to impose tariffs again in December 2019. The United States imposed tariffs on steel and aluminum imports from Mexico on May 31, 2018, and Mexico subsequently imposed retaliatory tariffs on 71 U.S. products, covering an estimated $3.7 billion worth of trade. By May 2019, President Trump had exempted Mexico from steel and aluminum tariffs, and Mexico agreed to terminate its retaliatory tariffs. President Trump's January 2017 withdrawal from the proposed TPP, an FTA that included Mexico, Peru, and Chile as signatories, signified another change to U.S. trade policy. In March 2018, all TPP parties signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP-11), which essentially brought a modified TPP into effect. The TPP-11 has entered into force among seven countriesâCanada, Australia, Japan, Mexico, New Zealand, Singapore, and Vietnam. Chile and Peru expect to ratify the agreement eventually. Colombia has expressed plans to request entry into the agreement after it enters into force among all partners. Some observers contend that U.S. withdrawal from the proposed TPP could damage U.S. competitiveness and economic leadership in the region, whereas others see the withdrawal as a way to prevent lower-cost imports and potential job losses. Congressional Action: The 116 th Congress, in both its legislative and oversight capacities, has faced numerous trade policy issues related to NAFTA's renegotiation and the USMCA. The U.S. House of Representatives approved USMCA implementing legislation, H.R. 5430 , on December 19, 2019, by a vote of 385-41, and the Senate approved it on January 16, 2020, by a vote of 89-10; it was signed into law ( P.L. 116-113 ) on January 29, 2020. Lawmakers took an interest as to whether the Administration followed U.S. trade negotiating objectives and procedures as required by Trade Promotion Authority (Bipartisan Congressional Trade Priorities and Accountability Act of 2015, or TPA; P.L. 114-26 ). Some Members also considered issues surrounding the labor and environment provisions' enforceability, access to medicine, and economic effects. Other Members showed interest in how the USMCA may affect U.S. industries, especially the auto industry, as well as the overall effects on the U.S. and Mexican economies, North American supply chains, and trade relations with the Latin American and Caribbean region. Among other trade issues, legislation was introduced ( H.R. 991 and S. 2473 ) that would extend CBTPA benefits through September 2030. Regarding the Section 232 investigations on aluminum and steel imports, the impact of tariffs and retaliatory tariffs from Mexico on U.S. producers, domestic U.S. industries, and consumers raised numerous issues for Congress. Energy reform in Mexico, and the implications for U.S. trade and investment in energy, may continue to be of interest to Congress. Policymakers also may consider how U.S. trade policy is perceived by the region and whether it may affect multilateral trade issues and cooperation on matters regarding security and migration. Another issue relates to U.S. market share. If Mexico, Chile, Colombia, Peru, and Mercosur countries continue trade and investment liberalization efforts with other countries without the United States, doing so may open the door to more intra-trade and investment among certain Latin American and Caribbean countries, or possibly China and other Asian countries, which may affect U.S. exports. For additional information, see CRS In Focus IF10997, U.S.-Mexico-Canada (USMCA) Trade Agreement , by M. Angeles Villarreal and Ian F. Fergusson; CRS Report R44981, NAFTA and the United States-Mexico-Canada Agreement (USMCA) , by M. Angeles Villarreal and Ian F. Fergusson; CRS In Focus IF10038, Trade Promotion Authority (TPA) , by Ian F. Fergusson; CRS Report RL32934, U.S.-Mexico Economic Relations: Trends, Issues, and Implications , by M. Angeles Villarreal; and CRS Report R45249, Section 232 Investigations: Overview and Issues for Congress , coordinated by Rachel F. Fefer and Vivian C. Jones. Migration Issues Latin America's status as a leading source of both legal and unauthorized migration to the United States means that U.S. immigration policies significantly affect countries in the region and U.S. relations with their governments. Latin Americans comprise the vast majority of unauthorized migrants who have received relief from removal (deportation) through the TPS program and the DACA initiative; they also comprise a large percentage of recent asylum seekers. As a result, several U.S. immigration policy changes have concerned countries in the region. These include the following Trump Administration actions: ending TPS designations for Haiti, El Salvador, Nicaragua, and Honduras; rescinding DACA; and restricting access to asylum in the United States. In January 2019, the Administration launched the Migrant Protection Protocols (MPP), a program to require many migrants and asylum seekers processed at the Mexico-U.S. border to be returned to Mexico to await their immigration proceedings; the program is currently facing legal challenges but remains in place. Under a practice known as "metering," migrants may now be required to wait in Mexico until there is capacity to process them at a port of entry. The Administration also signed what it termed "asylum cooperative agreements"âalso referred to as "safe third country" agreementsâwith Guatemala, El Salvador, and Honduras to allow the United States to transfer certain migrants who arrive to a U.S. border seeking asylum protection to apply for asylum in one of those countries. The factors that have driven legal and unauthorized U.S.-bound migration from Latin America are multifaceted, and some have changed over time. They include poverty and unemployment, political and economic instability, crime and violence, natural disasters, as well as relatively close proximity to the United States, familial ties in the United States, and relatively attractive U.S. economic conditions. As an example, Venezuela, a historically stable country with limited emigration to the United States, recently has become the top country of origin among those who seek U.S. asylum due to Venezuela's ongoing crisis. Migrant apprehensions at the southwest border had been steadily declining, reaching a 50-year low in 2017, but they began to rise in mid-2017. By FY2019, DHS apprehended 977,509 migrants, roughly 456,400 more than in FY2018. Unaccompanied children and families from the Northern Triangle, many of whom were seeking asylum, made up a majority of those apprehensions. (See " Central America's Northern Triangle " below.) During the first three months of FY2020, total apprehensions declined compared to FY2019, but apprehensions of Mexican adults surged. The Trump Administration's rhetoric and policies have tested U.S. relations with Mexico and the Northern Triangle countries. Mexico's President AndrÃ©s Manuel LÃ³pez Obrador agreed to shelter migrants affected by the MPP program and then, to avoid U.S. tariffs, allow the MPP to be expanded in Mexico and increase Mexico's immigration enforcement efforts, particularly on its southern border with Guatemala. DHS is now reportedly considering sending Mexican asylum seekers to Guatemala, despite Mexico's opposition to the policy. Amidst U.S. foreign aid cuts and tariff threats (in the case of Guatemala), the Northern Triangle countries signed "safe third country" agreements despite serious concerns about conditions in the three countries; DHS began implementing the agreement with Guatemala in November 2019, but the agreements with Honduras and El Salvador have not yet been implemented. Mexico and the Northern Triangle countries, which received some 91% of the 267,258 individuals removed from the United States in FY2019, have expressed concerns that removals could overwhelm their capacity to receive and reintegrate migrants. Central American countries also are concerned about the potential for increased removals of those with criminal records to exacerbate their security problems. Congressional Action: The 116 th Congress has provided foreign assistance to help address some of the factors fueling migration from Central America and support Mexico's migration management efforts in FY2019 ( P.L. 116-6 ) and FY2020 ( P.L. 116-94 ). In July 2019, the House passed H.R. 2615 , the United States-Northern Triangle Enhanced Engagement Act, which would require a report on the main drivers of migration from Central America. The 116 th Congress has also acted on bills that could affect significant numbers of individuals from Latin America and the Caribbean living in the United States. For example in June 2019, the House passed H.R. 6 , the American Dream and Promise Act of 2019, which would establish a process for certain unauthorized immigrants who entered the United States as children, such as DACA recipients, and for certain TPS recipients to obtain lawful permanent resident (LPR) status. In July 2019, the House passed H.R. 549 , the Venezuela TPS Act of 2019, which would provide TPS designation for Venezuela. In December 2019, the House passed H.R. 5038 , the Farm Workforce Modernization Act of 2019, which would create a new temporary immigration status (certified agricultural worker (CAW) status) for certain unauthorized and other agricultural workers and would establish a process for CAWs to become LPRs. For more information, see CRS Legal Sidebar LSB10402, Safe Third Country Agreements with Northern Triangle Countries: Background and Legal Issues , by Ben Harrington; CRS In Focus IF11151, Central American Migration: Root Causes and U.S. Policy , by Peter J. Meyer and Maureen Taft-Morales; CRS In Focus IF10215, Mexico's Immigration Control Efforts , by Clare Ribando Seelke; CRS Report R45266, The Trump Administration's "Zero Tolerance" Immigration Enforcement Policy , by William A. Kandel; CRS Report R45995, Unauthorized Childhood Arrivals, DACA, and Related Legislation , by Andorra Bruno; CRS Report RS20844, Temporary Protected Status: Overview and Current Issues , by Jill H. Wilson; CRS In Focus IF11363, Processing Aliens at the U.S.-Mexico Border: Recent Policy Changes , by Hillel R. Smith, Ben Harrington, and Audrey Singer; and CRS Report R46012, Immigration: Recent Apprehension Trends at the U.S. Southwest Border , by Audrey Singer and William A. Kandel. Selected Country and Subregional Issues The Caribbean Caribbean Regional Issues The Caribbean is a diverse region of 16 independent countries and 18 overseas territories, including some of the hemisphere's richest and poorest nations. Among the region's independent countries are 13 island nations stretching from the Bahamas in the north to Trinidad and Tobago in the south; Belize, which is geographically located in Central America; and Guyana and Suriname, located on the north-central coast of South America (see Figure 2 ). Pursuant to the United States-Caribbean Strategic Enhancement Act of 2016 ( P.L. 114-291 ), the State Department submitted a multiyear strategy for the Caribbean in 2017. The strategy established a framework to strengthen U.S.-Caribbean relations in six priority areas or pillars: (1) security, with the objectives of countering transnational crime and terrorist organizations and advancing citizen security; (2) diplomacy, with the goal of increasing institutionalized engagement to forge greater cooperation at the Organization of American States (OAS) and the U.N.; (3) prosperity, including the promotion of sustainable economic growth and private sector-led investment and development; (4) energy, with the goals of increasing U.S. exports of natural gas and the use of U.S. renewable energy technologies; (5) education, focusing on increased exchanges for students, teachers, and other professionals; and (6) health, including a focus on long-standing efforts to fight infectious diseases such as HIV/AIDS. In July 2019, the State Department issued a report to Congress on the implementation of its multiyear strategy. The report maintained that limited budgets and human resources have constrained opportunities for deepening relations, but funding for the strategy's security pillar has supported meaningful engagement and produced tangible results for regional and U.S. security interests. Because of their geographic location, many Caribbean nations are vulnerable to use as transit countries for illicit drugs from South America destined for the U.S. and European markets. Many Caribbean countries also have suffered high rates of violent crime, including murder, often associated with drug trafficking activities. In response, the United States launched the Caribbean Basin Security Initiative (CBSI) in 2009, a regional U.S. foreign assistance program seeking to reduce drug trafficking in the region and advance public safety and security. The program dovetails with the first pillar of the State Department's Caribbean multiyear strategy for U.S. engagement. From FY2010 through FY2020, Congress appropriated almost $677 million for the CBSI. These funds benefitted 13 Caribbean countries. The program has targeted assistance in five areas: (1) maritime and aerial security cooperation, (2) law enforcement capacity building, (3) border/port security and firearms interdiction, (4) justice sector reform, and (5) crime prevention and at-risk youth. Many Caribbean nations depend on energy imports and, over the past decade, have participated in Venezuela's PetroCaribe program, which supplies Venezuelan oil under preferential financing terms. The United States launched the Caribbean Energy Security Initiative (CESI) in 2014, with the goals of promoting a cleaner and more sustainable energy future in the Caribbean. The CESI includes a variety of initiatives to boost energy security and sustainable economic growth by attracting investment in a range of energy technologies through a focus on improved governance, increased access to finance, and enhanced coordination among energy donors, governments, and stakeholders. Many Caribbean countries are susceptible to extreme weather events such as tropical storms and hurricanes, which can significantly affect their economies and infrastructure. Recent scientific studies suggest that climate change may be increasing the intensity of such events. In September 2019, Hurricane Dorian caused widespread damage to the northwestern Bahamian islands of Grand Bahama and Abaco, with 70 confirmed deaths and many missing. The United States responded with nearly $34 million in humanitarian assistance, including almost $25 million provided through USAID. Prior to the hurricane, the State Department had launched a U.S.-Caribbean Resilience Partnership in April 2019, with the goal of increasing regional disaster response capacity and promoting resilience to natural disasters. In December 2019, USAID announced it was providing $10 million to improve local resilience to disasters in the Caribbean. Congressional Action: The 116 th Congress has continued to appropriate funds for Caribbean regional programs. Over the past two fiscal years, Congress has funded the CBSI at levels significantly higher than requested by the Trump Administration. For FY2019, Congress appropriated $58 million for the CBSI ($36.2 million was requested), in the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ). For FY2020, the Trump Administration requested $40.2 million for the CBSI, about a 30% drop from FY2019 appropriations. Ultimately, Congress appropriated not less than $60 million for the CBSI for FY2020 in the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ). For FY2021, the Administration is requesting $32 million for the CBSI, a cut of almost 47% from that appropriated for FY2020. Congress has also continued to provide funding for the CESI, appropriating $2 million in FY2019 ( P.L. 116-6 ) and $3 million in FY2020 ( P.L. 116-94 ). Regarding U.S. support for natural disasters, the report to the Department of State, Foreign Operations, and Related Programs appropriations bill, 2020â H.Rept. 116-78 to H.R. 2839 âdirected that bilateral economic assistance be made available to strengthen resilience to emergencies and disasters in the Caribbean. For additional information, see CRS In Focus IF10789, Caribbean Basin Security Initiative , by Mark P. Sullivan; CRS In Focus IF10666, The Bahamas: An Overview , by Mark P. Sullivan; CRS Insight IN11171, Bahamas: Response to Hurricane Dorian , by Rhoda Margesson and Mark P. Sullivan; CRS In Focus IF10407, Dominican Republic , by Clare Ribando Seelke; CRS In Focus IF11381, Guyana: An Overview , by Mark P. Sullivan; CRS In Focus IF10912, Jamaica , by Mark P. Sullivan; and CRS In Focus IF10914, Trinidad and Tobago , by Mark P. Sullivan. Cuba Political and economic developments in Cuba, a one-party authoritarian state with a poor human rights record, have been the subject of intense congressional concern since the Cuban revolution in 1959. Current Cuban President Miguel DÃaz-Canel succeeded RaÃºl Castro in April 2018, but Castro is expected to head Cuba's Communist Party until 2021. In February 2019, almost 87% of Cubans approved a new constitution in a national referendum. The changes include the addition of an appointed prime minister to oversee government operations, limits on the president's tenure (two five-year terms) and age (60, beginning first term), and market-oriented economic reforms, including the right to private property and the promotion of foreign investment. The new constitution, however, ensures the state sector's dominance over the economy and the Communist Party's predominant role. The Cuban economy has registered minimal growth in recent years; the EIU estimates that the economy grew 0.5% in 2019 but will contract 0.7% in 2020. For more than a decade, Cuba has implemented gradual market-oriented economic policy changes but has not taken enough action to foster sustainable economic growth. The economy also has been hard-hit by the reimposition of, and increase in, U.S. economic sanctions in 2019 that impede international financial transactions with Cuba, as well as by Venezuela's economic crisis that has limited Venezuela's support to Cuba. Cuban officials reported that 4.3 million tourists visited Cuba in 2019, down from 4.7 million in 2018; the decline in tourism has hurt Cuba's nascent private sector. Since the early 1960s, the centerpiece of U.S. policy toward Cuba has consisted of economic sanctions aimed at isolating the Cuban government. Congress has played an active role in shaping policy toward Cuba, including the enactment of legislation strengthening, and at times easing, U.S. sanctions. In 2014, the Obama Administration initiated a policy shift moving away from sanctions toward a policy of engagement. This shift included restoring diplomatic relations (July 2015), rescinding Cuba's designation as a state sponsor of international terrorism (May 2015), and increasing travel, commerce, and the flow of information to Cuba implemented through regulatory changes (2015-2016). President Trump unveiled a new policy toward Cuba in 2017, introducing new sanctions and rolling back some of the Obama Administration's efforts to normalize relations. By 2019, the Trump Administration had largely abandoned the previous Administration's policy of engagement by significantly increasing economic sanctions to pressure the Cuban government on its human rights record and its military and intelligence support of the NicolÃ¡s Maduro regime in Venezuela. The Administration has taken actions to allow lawsuits against those trafficking in property confiscated by the Cuban government, provided for in the 1996 LIBERTAD Act ( P.L. 104-114 ), and tighten restrictions on travel to Cuba, including terminating cruise ship travel from the United States and U.S. flights to and from Cuban cities other than Havana. Congressional Action: The 116 th Congress has continued to fund democracy assistance for Cuban human rights and democracy activists and U.S.-government sponsored broadcasting to Cuba. For FY2019, Congress appropriated $20 million for democracy programs and $29.1 million for Cuba broadcasting ( P.L. 116-6 , H.Rept. 116-9 ). For FY2020, Congress appropriated $20 million for democracy programs and $20.973 million for Cuba broadcasting ( P.L. 116-94 , H.R. 1865 , Division G). The measure also includes several reporting requirements on Cuba set forth in H.Rept. 116-78 and S.Rept. 116-126 . Congress is now considering the Administration's FY2021 request of $10 million for Cuba democracy programs (a 50% decline from that appropriated in FY2020) and $12.973 for Cuba broadcasting (a 38% decline from that appropriated in FY2020). Much of the debate over Cuba in Congress throughout the past 20 years has focused on U.S. sanctions. Several bills introduced in the 116 th Congress would ease or lift U.S. sanctions: H.R. 213 (baseball); S. 428 (trade); H.R. 1898 / S. 1447 (financing for U.S. agricultural exports); H.R. 2404 (overall embargo); and H.R. 3960 / S. 2303 (travel). H.R. 4884 would direct the Administration to reinstate the Cuban Family Reunification Parole Program, which has been in limbo since 2017. Several resolutions would express concerns regarding Cuba's foreign medical missions ( S.Res. 14 / H.Res. 136 ); U.S. fugitives from justice in Cuba (H.Res. 92/ S.Res. 232 ); religious and political freedom in Cuba ( S.Res. 215 ); and the release of human rights activist JosÃ© Daniel Ferrer and other members of the pro-democracy Patriotic Union of Cuba ( S.Res. 454 and H.Res. 774 ). In September 2019, the House Subcommittee on the Western Hemisphere, Civilian Security, and Trade (House Western Hemisphere Subcommittee) held a hearing on the human rights situation in Cuba (see Appendix ). For additional information, see CRS In Focus IF10045, Cuba: U.S. Policy Overview , by Mark P. Sullivan; and CRS Report R45657, Cuba: U.S. Policy in the 116th Congress , by Mark P. Sullivan. Haiti During the administration of President Jovenel MoÃ¯se, who began a five-year term in February 2017, Haiti has been experiencing growing political and social unrest, high inflation, and resurgent gang violence. The Haitian judiciary is conducting investigations into MoÃ¯se's possible involvement in money laundering, irregular loan arrangements, and embezzlement; the president denies these allegations. In mid-2018, MoÃ¯se decided to end oil subsidies, which, coupled with deteriorating economic conditions, sparked massive protests. Government instability has heightened since May 2019, when the Superior Court of Auditors delivered a report to the Haitian Senate alleging MoÃ¯se had embezzled millions of dollars. Mass demonstrations have continued, calling for an end to corruption, the provision of government services, and MoÃ¯se's resignation. MoÃ¯se has said it would be irresponsible of him to resign, and that he will not do so. He has called repeatedly for dialogue with the opposition. Haiti's elected officials have exacerbated the ongoing instability by not forming a government. The president, who is elected directly by popular elections, is head of state and appoints the prime minister, chosen from the majority party in the National Assembly. The prime minister serves as head of government. The first two prime ministers under MoÃ¯se resigned. The Haitian legislature did not confirm the president's subsequent two nominees for prime minister. Some legislators actively prevented a vote by absenting themselves to prevent a quorum being met or by other, sometimes violent, tactics. Nevertheless, a legislative motion to impeach the president did not pass. Because the legislature also did not pass an elections law, parliamentary elections scheduled for October 2019 have been postponed indefinitely. MoÃ¯se is now ruling by decree. As of January 13, 2020, the terms of the entire lower Chamber of Deputies and two-thirds of the Senate expired, as did the terms of all local government posts, without newly elected officials to take their place. Currently, there is no functioning legislature. When the legislature's terms expired in January 2015 because the government had not held elections, then-President Michel Martelly ruled by decree for over a year, outside of constitutional norms. On March 2, 2020, President MoÃ¯se appointed a new prime minister, Joseph Jouthe, by decree. Since January 2020, the U.N., the OAS, and the Vatican have been facilitating a dialogue among the government, opposition, civil society, and private sector to establish a functioning government, develop a plan for reform, create a constitutional revision process, and set an electoral calendar. The Trump Administration supports the efforts to break the political impasse, but states that "while constitutional reforms are necessary and welcome, they must not become a pretext to delay elections." Haiti has received high levels of U.S. assistance for many years given its proximity to the United States and its status as the poorest country in the hemisphere. In recent years, it was the second-largest recipient of U.S. aid in the region, after Colombia. Since a peak in 2010, the year a massive earthquake hit the country, aid to Haiti has been declining steadily. Since 2014, a prolonged drought and a hurricane have severely affected Haiti's food supply. Haiti continues to struggle against a cholera epidemic inadvertently introduced by U.N. peacekeepers in 2010. The U.N. has had a continuous presence in Haiti since 2004, recently shifting from peacekeeping missions to a political office, and authorized its Integrated Office in Haiti for an initial one-year period beginning in October 2019. The office's mandate is to protect and promote human rights and to advise the government of Haiti on strengthening political stability and good governance through support for an inclusive inter-Haitian national dialogue. With the support of U.N. forces and U.S. and other international assistance, the Haitian National Police (HNP) force has become increasingly professional and has taken on responsibility for domestic security. New police commissariats have given more Haitians access to security services, but with 14,000-15,000 officers, the HNP remains below international standards for the size of the country's population. It is also underfunded. According to the U.N., the HNP has committed human rights abuses, including extrajudicial killings. Congressional Action : The Trump Administration's FY2020 request for aid for Haiti totaled $145.5 million, a 25% reduction from the estimated $193.8 million provided to Haiti in FY2019. The Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ) contains several provisions related to Haiti, including that aid may be provided to Haiti only through the regular notification procedures. Under the act, Economic Support Fund assistance for Haiti may not be made available for assistance to the Haitian central government unless the Secretary of State certifies and reports to the Committees on Appropriations that the government is taking effective steps to strengthen the rule of law, combat corruption, increase government revenues, and resolve commercial disputes. The act provides budget authority for $51 million in Development Assistance, including $8.5 million for reforestation; it also provides $10 million in International Narcotics Control and Law Enforcement funds for prison assistance, prioritizing improvements to meet basic sanitation, medical, nutritional, and safety needs at Haiti's National Penitentiary. The measure also prohibits the provision of appropriated funds for assistance to Haiti's armed forces. The House Western Hemisphere Subcommittee held a hearing on U.S. policy toward Haiti in December 2019 (see Appendix ). Congress has begun consideration of the Administration's FY2021 foreign aid request for Haiti. The Administration requested $128.2 million, almost a 34% cut from the amount appropriated by Congress in FY2019. For background, see CRS Report R45034, Haiti's Political and Economic Conditions , by Maureen Taft-Morales. Mexico and Central America Mexico Mexico and the United States share a nearly 2,000-mile border and strong cultural, familial, and historical ties. Economically, the United States and Mexico have grown interdependent since NAFTA entered into force in 1994. The countries have also forged close security ties, as security conditions in Mexico affect U.S. national security and U.S. citizens living in or traveling to Mexico, particularly along the U.S.-Mexican border. On December 1, 2018, AndrÃ©s Manuel LÃ³pez Obrador, the populist leader of the National Regeneration Movement (MORENA) party, which he created in 2014, took office for a six-year term. LÃ³pez Obrador won 53% of the July 2018 vote, marking a shift away from Mexico's traditional parties, the Institutional Revolutionary Party (PRI) and the National Action Party (PAN). Elected on an anti-corruption platform, LÃ³pez Obrador is the first Mexican president in over two decades to enjoy majorities in both chambers of Congress. In addition to combating corruption, he pledged to build infrastructure in southern Mexico, revive the poor-performing state oil company, address citizen security through social programs, and adopt a foreign policy based on the principle of nonintervention. Given fiscal constraints, observers question whether his goals are attainable. Thirteen months into his term, President LÃ³pez Obrador enjoys high approval ratings (60% in January 2020), even though Mexico experienced record homicides and 0% economic growth in 2019. Mexicans have praised LÃ³pez Obrador's backing of new social programs, minimum wage increases, and willingness to tackle problems, such as oil theft by criminal groups. His decision to cut his own salary and public sector salaries generally has prompted resignations among experienced bureaucrats but has been popular with his constituency. Critics also have expressed concerns that LÃ³pez Obrador has centralized power and weakened institutions, relied too much on his own counsel, and dismissed journalists, regulatory agencies, and others critical of his policies. Despite some predictions to the contrary, U.S.-Mexico relations under the LÃ³pez Obrador government have thus far remained friendly. Tensions have emerged over several key issues, including trade disputes and tariffs, immigration and border security issues, U.S. citizens killed in Mexico (including the November 2019 massacre of an extended family of U.S.-Mexican citizens), and Mexico's decision to remain neutral regarding the crisis in Venezuela. The Mexican government has condemned anti-immigrant rhetoric and actions in the United States, including the August 2019 mass shooting in El Paso, TX, that resulted in the deaths of at least seven Mexican citizens. Security cooperation under the MÃ©rida Initiative has continued, including efforts to address the production and trafficking of opioids and methamphetamine, but the Trump Administration has pushed Mexico to improve its antidrug efforts and security policies. During LÃ³pez Obrador's administration, the Mexican government has accommodated most of the Trump Administration's border and asylum policy changes that have shifted the burden of interdicting migrants and offering asylum to Mexico. After enacting labor reforms and raising wages, the LÃ³pez Obrador administration achieved a significant foreign policy goal: U.S. congressional approval of implementing legislation for the proposed USMCA to replace NAFTA. (See " Trade Policy ," above.) Congressional Action: The 116 th Congress closely followed the Trump Administration's efforts to renegotiate NAFTA and recommended modifications to the proposed USMCA (on labor, the environment, and dispute settlement, among other topics) that led to the three countries signing an amendment to the agreement on December 10, 2019. The House approved the implementing legislation for the proposed USMCA in December 2019, and the Senate followed suit in January 16, 2020 ( P.L. 116-113 ). Both houses have taken action on H.R. 133 , the United States-Mexico Economic Partnership Act ( H.R. 133 ), which directs the Secretary of State to enhance economic cooperation and educational and professional exchanges with Mexico; the House approved the measure in January 2019, and the Senate approved an amended version in January 2020. The FY2020 NDAA ( P.L. 116-92 ) requires a classified assessment of drug trafficking, human trafficking, and alien smuggling in Mexico. Regarding foreign aid, in FY2019, Congress provided some $162 million for Mexico in P.L. 116-6 , with much of that designated for the MÃ©rida Initiative. Those increased resources aimed to help address the flow of U.S.-bound opioids. For FY2020âtotal aid amounts are not yet availableâCongress provided $150 million for accounts that fund the MÃ©rida Initiative in P.L. 116-94 (roughly $73 million above the Administration's budget request). For FY2021, the Administration has requested $63.8 million for Mexico, a decline of almost 61% compared to that provided in FY2019. In the wake of recent high profile massacres in Mexico, congressional concerns about the efficacy of U.S.-Mexican security cooperation and calls for oversight have increased as Congress begins consideration of the FY2021 foreign aid request. For additional information, see CRS Report R42917, Mexico: Background and U.S. Relations , by Clare Ribando Seelke; CRS Report RL32934, U.S.-Mexico Economic Relations: Trends, Issues, and Implications , by M. Angeles Villarreal; CRS In Focus IF10997, U.S.-Mexico-Canada (USMCA) Trade Agreement , by M. Angeles Villarreal and Ian F. Fergusson; CRS In Focus IF10578, Mexico: Evolution of the MÃ©rida Initiative, 2007-2020 , by Clare Ribando Seelke; CRS Report R41576, Mexico: Organized Crime and Drug Trafficking Organizations , by June S. Beittel; CRS In Focus IF10215, Mexico's Immigration Control Efforts , by Clare Ribando Seelke; and CRS In Focus IF10400, Transnational Crime Issues: Heroin Production, Fentanyl Trafficking, and U.S.-Mexico Security Cooperation , by Clare Ribando Seelke and Liana W. Rosen. Central America's Northern Triangle The Northern Triangle region of Central America (see Figure 3 ) has received renewed attention from U.S. policymakers in recent years, as it has become a major transit corridor for illicit drugs and has surpassed Mexico as the largest source of irregular migration to the United States. In FY2019, U.S. authorities apprehended nearly 608,000 unauthorized migrants from El Salvador, Guatemala, and Honduras at the southwest border; 81% of those apprehended were families or unaccompanied minors, many of whom were seeking asylum. These narcotics and migrant flows are the latest symptoms of deep-rooted challenges in the region, including widespread insecurity, fragile political and judicial systems, and high levels of poverty and unemployment. The Obama Administration determined it was in the national security interests of the United States to work with Central American nations to improve security, strengthen governance, and promote prosperity in the region. Accordingly, the Obama Administration launched a new, whole-of-government U.S. Strategy for Engagement in Central America and requested a significant increase in foreign assistance for the region to support the strategy's implementation. Congress appropriated more than $2 billion of aid for Central America between FY2016 and FY2018, allocating most of the funds to El Salvador, Guatemala, and Honduras. Congress required a portion of the aid to be withheld, however, until the Northern Triangle governments took steps to improve border security, combat corruption, protect human rights, and address other congressional concerns. The Trump Administration initially maintained the U.S. Strategy for Engagement in Central America, but suspended most aid for the Northern Triangle in March 2019 due to the continued northward flow of migrants and asylum seekers from the region. The aid suspension forced U.S. agencies to begin closing down projects and canceling planned activities. Although Administration officials acknowledged that U.S. foreign aid programs had been "producing the results [they] were intended to produce" with regard to security, governance, and economic development, they argued that, "the only metric that matters is the question of what the migration situation looks like on the southern border." Over the course of 2019, the Trump Administration reprogrammed approximately $405 million of aid appropriated for the Northern Triangle to other foreign policy priorities while negotiating a series of "safe third country" agreements (also known as asylum cooperative agreements) with El Salvador, Guatemala, and Honduras. Under the agreement with Guatemala, the United States has begun sending some individuals to Guatemala to apply for protection there rather than in the United States; similar agreements with El Salvador and Honduras are awaiting implementation. The Trump Administration has released some previously suspended assistance, primarily for programs to counter transnational crime and improve border security, as the new agreements have gone into effect. For FY2021, the Administration maintains that it is requesting almost $377 million for Central America if countries in the region continue to take action to stem unauthorized migration. The Administration's Congressional Budget Justification, however, does not specify request amounts for the three Northern Triangle countries or the foreign affairs accounts from which the assistance would come. Congressional Action: The 116 th Congress has demonstrated continued support for the U.S. Strategy for Engagement in Central America but has reduced annual funding for the initiative. The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provided an estimated $527.6 million for the Central America strategy, which is about $92 million more than the Trump Administration requested. The Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ) provides $519.9 million for the initiative, which is about $75 million more than the Trump Administration requested. Both appropriations measures maintained conditions on U.S. assistance to the central governments of the Northern Triangle. Congress has also sought to improve the effectiveness of the Central America strategy. The Senate Foreign Relations Committee, House Foreign Affairs Committee, and House Western Hemisphere Subcommittee each held oversight hearings to assess U.S. policy and foreign assistance in Central America (see Appendix ). The United States-Northern Triangle Enhanced Engagement Act ( H.R. 2615 ), passed by the House in July 2019, would require the State Department, in coordination with other agencies, to develop five-year strategies to support inclusive economic growth, combat corruption, strengthen democratic institutions, and improve security conditions in the Northern Triangle. The measure would also authorize $577 million for the Central America strategy in FY2020, including "not less than" $490 million for the Northern Triangle. Other measures introduced in the 116 th Congress that would authorize certain types of assistance and guide U.S. policy in the region include the Central America Reform and Enforcement Act ( S. 1445 ), the Northern Triangle and Border Stabilization Act ( H.R. 3524 ), and the Central American Women and Children Protection Act of 2019 ( H.R. 2836 / S. 1781 ). Congress has continued to express concerns about corruption and human rights abuses in the region. P.L. 116-94 provides $45 million for offices of attorneys general and other entities and activities to combat corruption and impunity in Central America. Congress allocated $3.5 million of those funds to the OAS-backed Mission to Support the Fight against Corruption and Impunity in Honduras (MACCIH); Honduran President Juan Orlando HernÃ¡ndez allowed the MACCIH's mandate to expire in January 2020, ignoring repeated calls for the mission's renewal from Members of Congress and the Trump Administration. P.L. 116-94 also includes $20 million for combating sexual and gender-based violence in the region, as well as a total of $3 million for the offices of the U.N. High Commissioner for Human Rights in Guatemala and Honduras and El Salvador's National Commission for the Search of Persons Disappeared in the Context of the Armed Conflict. Several other legislative measures also include provisions intended to address corruption and human rights abuses in the Northern Triangle. The FY2020 NDAA ( P.L. 116-92 ) requires DOD to certify, prior to the transfer of any vehicles to the Guatemalan government, that the government has made a credible commitment to use such equipment only as intended. The act also requires DOD to enter into an agreement with an independent institution to conduct an analysis of the human rights situation in Honduras. Other measures introduced in the 116 th Congress addressing corruption and human rights include the Guatemala Rule of Law Accountability Act ( H.R. 1630 / S. 716 ) and the Berta Caceres Human Rights in Honduras Act ( H.R. 1945 ). For additional information, see CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress , by Peter J. Meyer; CRS In Focus IF10371, U.S. Strategy for Engagement in Central America: An Overview , by Peter J. Meyer; CRS In Focus IF11151, Central American Migration: Root Causes and U.S. Policy , by Peter J. Meyer and Maureen Taft-Morales; CRS Report R43616, El Salvador: Background and U.S. Relations , by Clare Ribando Seelke; CRS Report R42580, Guatemala: Political and Socioeconomic Conditions and U.S. Relations , by Maureen Taft-Morales; CRS Report RL34027, Honduras: Background and U.S. Relations , by Peter J. Meyer; and CRS Insight IN11211, Corruption in Honduras: End of the Mission to Support the Fight Against Corruption and Impunity in Honduras (MACCIH) , by Peter J. Meyer. Nicaragua President Daniel Ortega, aged 74 in early 2020, has been suppressing popular unrest in Nicaragua in a manner reminiscent of Anastasio Somoza, the dictator he helped overthrow in 1979 as a leader of the leftist Sandinista National Liberation Front (FSLN). Ortega served as president from 1985 to 1990, during which time the United States backed right-wing insurgents known as contras in an attempt to overthrow the Sandinista government. In the early 1990s, Nicaragua began to establish democratic governance. Democratic space has narrowed as the FSLN and Ortega have consolidated control over the country's institutions, including while Ortega served as an opposition leader in the legislature from 1990 until 2006. Ortega reclaimed the presidency in 2007 and has served as president for the past 13 years. Until recently, for many Nicaraguans, Ortega's populist social welfare programs that improved their standard of living outweighed his authoritarian tendencies and self-enrichment. Similarly, for many in the international community, the relative stability in Nicaragua outweighed Ortega's antidemocratic actions. Ortega's long-term strategy to retain control of the government began to unravel in 2018 when his proposal to reduce social security benefits triggered protests led by a wide range of Nicaraguans. The government's repressive response led to an estimated 325-600 extrajudicial killings, torture, political imprisonment, suppression of the press, and thousands of citizens going into exile. The government says it was defending itself from coup attempts. The crisis also undermined economic growth in the hemisphere's second poorest country. The Nicaraguan economy contracted by 5.1% in 2019, and some economists estimate the economy will contract a further 1.5% in 2020. The international community has sought to hold the Ortega government accountable for human rights abuses and facilitate the reestablishment of democracy in Nicaragua. In July 2018, an Inter-American Commission on Human Rights team concluded that the Nicaraguan security forces' actions could be considered crimes against humanity. The OAS High Level Commission on Nicaragua concluded in November 2019 that the government's actions "make the democratic functioning of the country impossible," in violation of Nicaragua's obligations under Article 1 of the Inter-American Democratic Charter. The Nicaragua Human Rights and Anticorruption Act of 2018 ( P.L. 115-335 ), effectively blocks access to new multilateral lending to Nicaragua. The Trump Administration has imposed sanctions against 16 high-level officials, including Vice President Rosario Murillo. On March 5, 2020, the Trump Administration imposed sanctions against the Nicaraguan National Police for its role in serious human rights abuses. Dialogue between the government and the opposition collapsed in 2019 and has not resumed. Congressional Action: The 116 th Congress remains concerned about the erosion of democracy and human rights abuses in Nicaragua. The Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ) appropriates $10 million for foreign assistance programs to promote democracy and the rule of law in Nicaragua. For FY2021, the Administration has requested $10 million for democracy and civil society programs in Nicaragua. In December 2019, the House Foreign Affairs Committee ordered H.Res. 754 to be reported favorably by unanimous consent to the full House, and the full House approved the measure on March 9, 2020. The resolution expresses the sense of the House of Representatives that the United States should continue to support the people of Nicaragua in their peaceful efforts to promote democracy and human rights and to use the tools under U.S. law to increase political and financial pressure on the Ortega government. In June 2019, the House Western Hemisphere Subcommittee held a hearing on the Nicaraguan government's repression of dissent (see Appendix ). South America Argentina Current President Alberto FernÃ¡ndez of the center-left Peronist Frente de Todos (FdT, Front for All) ticket won the October 2019 presidential election and was inaugurated to a four-year term in December 2019. He defeated incumbent President Mauricio Macri of the center-right Juntos por el Cambio (JC, Together for Change) coalition by a solid margin of 48.1% to 40.4% but by significantly less than the 15 to 20 percentage points predicted by polls. The election also returned to government former leftist Peronist President Cristina FernÃ¡ndez de Kirchner (2007-2015), who ran on the FdT ticket as vice president. Argentina's economic decline in 2018 and 2019, with high inflation and increasing poverty, was the major factor in Macri's electoral defeat. Macri had ushered in economic policy changes in 2016-2017 that lifted currency controls, reduced or eliminated agricultural export taxes, and reduced electricity, water, and heating subsidies. In 2018, as the economy faced pressure from a severe drought and large budget deficits, the IMF supported the government with a $57 billion program. Macri's economic reforms and IMF support were not enough to stem Argentina's economic decline, and the government reimposed currency controls and took other measures to stabilize the economy. President FernÃ¡ndez faces an economy in crisis, with a recession that is expected to extend into 2020, high poverty, and a high level of unsustainable public debt requiring restructuring. He has pledged to restructure Argentina's debt by the end of March 2020, and he has opened talks with bondholders and other creditors, including the IMF. FernÃ¡ndez also has rolled out several measures, including a food program and price controls on basic goods, aimed at helping low-income Argentines cope with inflation and increased poverty. U.S. relations with Argentina were strong under the Macri government, marked by increasing engagement on a range of bilateral, regional, and global issues. After Argentina's 2019 presidential race, Secretary of State Mike Pompeo said that the United States looked forward to working with the FernÃ¡ndez administration to promote regional security, prosperity, and the rule of law. One point of contention in relations could be Argentina's stance on Venezuela. Under Macri, Argentina was strongly critical of the antidemocratic actions of the Maduro regime. The country joined with other regional countries in 2017 to form the Lima Group seeking a democratic resolution, and in 2019, recognized the head of Venezuela's National Assembly, Juan GuaidÃ³, as the country's interim president. In contrast, the FernÃ¡ndez government does not recognize GuaidÃ³ as Venezuela's interim president, although it criticized Maduro's January 2020 actions preventing GuaidÃ³ from being elected to a second term as head of the legislature. Congressional Action: Argentina has not traditionally received much U.S. foreign aid because of its relatively high per capita income level, but for each of FY2018-FY2020, Congress has appropriated $2.5 million in International Narcotics Control and Law Enforcement assistance to support Argentina's counterterrorism, counternarcotics, and law enforcement capabilities. Congress has expressed concern over the years about progress in bringing to justice those responsible for the July 1994 bombing of the Argentine-Israeli Mutual Association (AMIA) in Buenos Aires that killed 85 people. Both Iran and Hezbollah (the radical Lebanon-based Islamic group) allegedly are linked to the attack, as well as to the 1992 bombing of the Israeli Embassy in Buenos Aires that killed 29 people. As the 25 th anniversary of the AMIA bombing approached in July 2019, the House approved H.Res. 441, reiterating condemnation of the attack and expressing strong support for accountability; the Senate followed suit in October 2019 when it approved S.Res. 277 . For additional information, see CRS In Focus IF10932, Argentina: An Overview , by Mark P. Sullivan; CRS In Focus IF10991, Argentina's Economic Crisis , by Rebecca M. Nelson; and CRS Insight IN11184, Argentina's 2019 Elections , by Mark P. Sullivan and Angel Carrasquillo Benoit. Bolivia Bolivia experienced relative stability and prosperity from 2006 to 2019, but as governance standards weakened, relations with the United States deteriorated under populist President Evo Morales. Morales was the country's first indigenous president and leader of the Movement Toward Socialism (MAS) party. On November 10, 2019, President Morales resigned and sought protection abroad (first in Mexico and then in Argentina) after weeks of protests alleging fraud in the October 20, 2019, election in which he had sought a fourth term. After three individuals in line to succeed Morales also resigned, opposition Senator Jeanine AÃ±ez, formerly second vice president of the senate, declared herself senate president and then interim president on November 12. Bolivia's constitutional court recognized her succession. In late November, the MAS-led Congress unanimously approved an electoral law to annul the October elections and select a new electoral tribunal. On January 3, 2020, the reconstituted tribunal scheduled new presidential and legislative elections for May 3, 2020. A second-round presidential contest would likely occur, if needed, on June 14. The situation in Bolivia remains volatile. On January 24, 2020, Interim President AÃ±ez announced her intention to run in the May presidential election, abandoning her earlier pledge to preside over a caretaker government focused on convening credible elections. Even before she announced her candidacy, observers had criticized AÃ±ez for exceeding her mandate by reversing several MAS foreign policy positions and bringing charges of sedition against Morales and other former MAS officials. The Trump Administration has sought to bolster ties with the AÃ±ez government while expressing support for "free, fair, transparent, and inclusive elections." U.S. officials have praised the AÃ±ez government for expelling Cuban officials and recognizing Venezuela's GuaidÃ³ government. In January 2020, President Trump waived restrictions on U.S. assistance to Bolivia, and a multiagency team traveled to the country to assess what type of election support U.S. agencies might offer the interim government. Congressional Action: Members of the 116 th Congress have expressed concerns about the situation in Bolivia. S.Res. 35 , approved in April 2019, expressed concern over Morales's efforts to circumvent term limits in Bolivia and called on his government to allow electoral bodies to administer the October 2019 elections in accordance with international norms. Although some Members condemned the ouster of Morales as a "coup," most have focused on ensuring a democratic transition. In January 2020, the Senate agreed by unanimous consent to S.Res. 447 , expressing concerns about election irregularities and violence in Bolivia, urging the Bolivian government to protect human rights and promptly convene new elections, and encouraging the U.S. State Department and the OAS to help ensure the integrity of the electoral process. For more information, see CRS Insight IN11198, Bolivia Postpones May Elections Amidst COVID-19 Outbreak , by Clare Ribando Seelke; and CRS In Focus IF11325, Bolivia: An Overview , by Clare Ribando Seelke. Brazil Occupying almost half of South America, Brazil is the fifth-largest and the fifth-most populous country in the world. Given its size and tremendous natural resources, Brazil has long had the potential to become a world power. Its rise to prominence has been hindered, however, by uneven economic performance and political instability. After experiencing a period of strong economic growth and increased international influence during the first decade of the 21 st century, Brazil has struggled with a series of domestic crises in recent years. The economy fell into its worst recession on record in 2014; the recovery since 2017 has been slow, with annual economic growth averaging 1% and the unemployment rate stuck above 11%. The political environment has also deteriorated as a sprawling corruption investigation underway since 2014 has implicated politicians from across the political spectrum. Those combined crises contributed to the controversial impeachment and removal from office of President Dilma Rousseff (2011-2016) and discredited much of the country's political class, paving the way for right-wing populist Jair Bolsonaro to win the presidency in October 2018. Since taking office in January 2019, President Bolsonaro has maintained his political base's support by taking socially conservative stands on cultural issues and proposing hardline security policies to reduce crime and violence. He has also begun enacting economic and regulatory reforms favored by international investors and Brazilian businesses. His confrontational approach to governance has alienated many potential allies, however, hindering the enactment of his policy agenda. Many Brazilians and international observers are concerned that Bolsonaro's environmental policies are contributing to increased deforestation in the Brazilian Amazon, and that his frequent verbal attacks against the press, nongovernmental organizations (NGOs), and other government branches are weakening democracy. The Bolsonaro administration's foreign policy has focused on forging closer ties to the United States. Brazil has partially abandoned its traditional commitment to autonomy in foreign affairs as Bolsonaro has supported the Trump Administration on a variety of issues, including the crisis in Venezuela, the U.S. trade embargo against Cuba, and the U.S. killing of Iranian military commander Qasem Soleimani. On other issues, such as commercial ties with China, Bolsonaro has adopted a more pragmatic approach intended to ensure continued access to major export markets. In 2019, President Trump designated Brazil as a major non-NATO ally for the purposes of the Arms Export Control Act (22 U.S.C. 2751 et seq.), offering Brazil privileged access to the U.S. defense industry and increased joint military exchanges, exercises, and training. President Trump also signed several agreements with President Bolsonaro intended to strengthen bilateral commercial ties. Some Brazilian analysts have questioned the benefits of partnership with the United States due to the Trump Administration's decision to maintain import restrictions on Brazilian beef until February 2020, and the Administration's threats to impose tariffs on other key Brazilian products, such as steel. Congressional Action: The 116 th Congress has continued long-standing U.S. support for environmental conservation efforts in Brazil. In September 2019, the House Western Hemisphere Subcommittee held an oversight hearing on preserving the Amazon rainforest that focused on the surge of fires and deforestation in the region (see Appendix ). Some Members of Congress also have introduced legislative proposals to address the situation. A Senate resolution ( S.Res. 337 ) would express concern about fires and illegal deforestation in the Amazon, call on the Brazilian government to strengthen environmental enforcement, and support continued U.S. assistance to the Brazilian government and NGOs. The Act for the Amazon Act ( H.R. 4263 ) would take a more punitive approach. The act would ban the importation of certain fossil fuels and agricultural products from Brazil, prohibit certain types of military-to-military engagement and security assistance to Brazil, and forbid U.S. agencies from entering into free trade negotiations with Brazil. Congress ultimately appropriated $15 million for foreign assistance programs in the Brazilian Amazon, including $5 million to address fires in the region, in the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ). That amount is $4 million more than Congress appropriated for environmental programs in the Brazilian Amazon in the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ). Congress has also expressed concerns about the state of democracy and human rights in Brazil. A provision of the FY2020 NDAA ( P.L. 116-92 ) directs the Secretary of Defense, in coordination with the Secretary of State, to submit a report to Congress regarding the human rights climate in Brazil and U.S.-Brazilian security cooperation. Some Members have also called for changes to U.S. policy. A resolution introduced in September 2019 expressing profound concerns about threats to human rights, the rule of law, democracy, and the environment in Brazil (H.Res. 594) would call for the United States to rescind Brazil's designation as a major non-NATO ally and suspend assistance to Brazilian security forces, among other actions. For additional information, see CRS Report R46236, Brazil: Background and U.S. Relations , by Peter J. Meyer; and CRS In Focus IF11306, Fire and Deforestation in the Brazilian Amazon , by Pervaze A. Sheikh et al. Colombia Colombia is a key U.S. ally in Latin America. Because of the country's prominence in illegal drug production, the United States and Colombia have forged a close relationship over the past two decades to respond to mutual challenges. Focused initially on counternarcotics, and later on counterterrorism, a program called Plan Colombia laid the foundation for a security partnership between the two countries. Plan Colombia and its successor strategies ultimately became the basis for a 17-year U.S.-Colombian bilateral effort. President Juan Manuel Santos (2010-2018) made concluding a peace accord with the FARCâthe country's largest leftist guerrilla organizationâhis government's primary focus. Following four years of formal peace negotiations, Colombia's Congress ratified the FARC-government peace accord in November 2016. During a U.N.-monitored demobilization effort in 2017, approximately 13,200 FARC (armed combatants and militia members) disarmed, demobilized, and began the process of reintegration. IvÃ¡n Duque, a former senator from the conservative Democratic Center party, who won the 2018 presidential election, was inaugurated to a four-year presidential term in August 2018. Duque campaigned as a critic of the peace accord. His approval ratings slipped early in his presidency, and his government faced weeks of protests and strikes in late 2019 focused on several administration policies, including what many Colombians view as a halting approach to peace accord implementation. Colombia continues to face major challenges, including a sharp increase of coca cultivation and cocaine production, vulnerability to a mass migration of Venezuelans fleeing the authoritarian government of Maduro, a spike in attacks on human rights defenders and social activists, and financial and other challenges enacting the ambitious peace accord commitments while controlling crime and violence by armed groups seeking to replace the FARC. President Duque has not succeeded in building a legislative coalition with other parties to implement major legislative reforms. In August 2019, a FARC splinter faction, which included the former lead FARC negotiator of the peace accord, announced its return to arms. In response, neighboring Venezuela appears to be sheltering and perhaps collaborating with FARC dissidents and guerrilla fighters of the National Liberation Army (ELN)âformerly Colombia's second largest insurgency, now its largest. The ELN is also a U.S.-designated foreign terrorist organization. Some 3,000 former FARC fighters are estimated to have returned to armed struggle, and some have indicated they will cooperate with the ELN. The majority of demobilized FARC members remain committed to the peace process, despite numerous risks; the U.N. Verification Mission in Colombia reported in December 2019 that 77 demobilized FARC members were killed in 2019, with 173 in total killed since 2016. In 2017, Colombia cultivated a record 209,000 hectares of coca, amounting to a potential 921 metric tons of pure cocaine. In 2018, drug yields declined marginally, according to U.S. estimates, although the U.N. estimates for cocaine production were considerably higher. In meetings between President Duque and Secretary of State Pompeo in 2019, the governments reaffirmed a March 2018 commitment to work together to lower coca crop expansion and cocaine production by 50% by 2023. The U.S. government depends on the Colombian government to interdict much of the cocaine leaving the country, as it is mainly destined for the United States. President Duque campaigned on returning to forced aerial eradication (or spraying of coca crops) with the herbicide glyphosate. This strategy has been a centralâalbeit controversialâfeature of U.S.-Colombian counterdrug cooperation for more than two decades. In late December 2019, President Duque announced that spraying was likely to restart in early 2020. Several analysts maintain that forced manual and aerial eradication of coca have not been successful strategies in Colombia, and they consider voluntary eradication and alternative development programs made viable by a gradually more present central government in rural communities as critical to consolidating peace. The United States remains Colombia's top trading partner. Colombia's economy, which grew 2.6% in 2018, is estimated to have grown by 3.1% in 2019, with foreign direct investment on the rise. Projections are that Colombia's growth rate will remain at 3% and above over the next few years, which makes it one of the strongest major economies in the region. Congressional Action: At the close of 2019, 1.6 million Venezuelans were residing in Colombia. This number could grow in 2020 to more than 3 million migrants depending how the political crisis in neighboring Venezuela unfolds. Since FY2017, the State Department has allocated more than $400 million to support countries receiving Venezuelan migrants, with over halfâalmost $215 million in U.S. humanitarian and development assistanceâfor Colombia, as the most severely affected country. (See " Venezuela ," below.) Congress appropriated more than $10 billion for Plan Colombia and its follow-on programs between FY2000 and FY2016, about 20% of which was funded through DOD. Subsequently, Congress provided $1.2 billion annually in additional assistance for Colombia from FY2017 through FY2019, including assistance funded through DOD. For FY2020, Congress provided $448 million in the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ) for State Department and USAID-funded programs in Colombia. For FY2021, the Administration has requested $412.9 million for Colombia, about a 2% decline from that appropriated in FY2019. For additional information, see CRS Report R43813, Colombia: Background and U.S. Relations , by June S. Beittel; CRS Report R44779, Colombia's Changing Approach to Drug Policy , by June S. Beittel and Liana W. Rosen; CRS Report RL34470, The U.S.-Colombia Free Trade Agreement: Background and Issues , by M. Angeles Villarreal and Edward Y. Gracia; and CRS Report R42982, Colombia's Peace Process Through 2016 , by June S. Beittel. Venezuela Venezuela remains in a deep crisis under the authoritarian rule of NicolÃ¡s Maduro of the United Socialist Party of Venezuela. Maduro, narrowly elected in 2013 after the death of Hugo ChÃ¡vez (president, 1999-2013), began a second term on January 10, 2019, that most Venezuelans and much of the international community consider illegitimate. Since January 2019, Juan GuaidÃ³, president of Venezuela's democratically elected, opposition-controlled National Assembly, has sought to form a transition government to serve until internationally observed elections can be held. The United States and 57 other countries recognize GuaidÃ³ as interim president, but he has been unable to wrest Maduro from power, and he has faced increased danger since returning home from a January-February 2020 international tour, which included a meeting with President Trump. Some observers believe that National Assembly elections due this year might start an electoral path out of the current stalemate. Maduro has used repression to quash dissent; rewarded allies with income earned from illegal gold mining, drug trafficking, and other illicit activities; relied on support from Russia to avoid U.S. sanctions; and had his supporters use violence to prevent the National Assembly from convening. Venezuela's economy has collapsed. The country is plagued by hyperinflation, severe shortages of food and medicine, and electricity blackouts that have worsened an already dire humanitarian crisis. In April 2019, U.N. officials estimated that some 90% of Venezuelans are living in poverty. Many observers cite economic mismanagement and corruption as the key factors responsible for the economic crisis, but also acknowledge that economic sanctions have contributed to Venezuela's economic decline. U.N. agencies estimate that 4.8 million Venezuelans had fled the country as of December 2019, primarily to Latin American and Caribbean countries. U.S. Policy. As the situation in Venezuela has deteriorated under Maduro, the Trump Administration has imposed targeted sanctions on Venezuelan officials responsible for antidemocratic actions, human rights violations, and corruption, as well as increasingly strong financial sanctions against the Maduro government and the state oil company, its main source of income. Since recognizing GuaidÃ³ as interim president in January 2019, the Administration has increased sanctions on the Maduro government and encouraged other countries to do so. The EU, Canada, and 11 Western Hemisphere countries who are states parties to the Inter-American Treaty of Reciprocal Assistance (Rio Treaty) have imposed targeted sanctions and travel bans on Maduro officials, but not broad economic sanctions as the United States has done. Those countries similarly oppose military intervention in Venezuela, a policy option that the Trump Administration reportedly considered early in 2019 but has not raised since. In January 2020, the Administration issued a statement backing a political solution that leads to the convening of free and fair presidential and parliamentary elections this year. International efforts to broker a political solution have not produced results. Although the U.S. statement encourages a focus on convening elections (as did the 2019 Norway-led talks between the GuaidÃ³ and Maduro teams), it also says that those elections should be overseen by a "negotiated transitional government," a requirement that Maduro may not accept. Some observers maintain that any negotiations between Maduro and GuaidÃ³ would need the backing of the United States and Russia in order to succeed. Since FY2017, the Administration has provided $472 million in humanitarian and development assistance, including $56 million for humanitarian relief activities in Venezuela, and the remainder to support regional countries sheltering most of the 4.8 million Venezuelans who have fled the crisis. The U.S. military has twice deployed a naval ship hospital to the region. In October 2019, the Administration signed an agreement with the GuaidÃ³ government to provide $100 million in development assistance, including direct support for the interim government. Congressional Action: Congress has supported the Administration's efforts to restore democracy in Venezuela and provide humanitarian assistance to Venezuelans, although some Members have expressed concerns about the humanitarian effects of sanctions and about potential unauthorized use of the U.S. military in Venezuela. In February 2019, Congress enacted the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), which provided $17.5 million for democracy programs in Venezuela. In December 2019, Congress enacted the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ), which provided $30 million for democracy and human rights programs in Venezuela. The measure also incorporates provisions from S. 1025 , the VERDAD Act, authorizing $400 million in FY2020 humanitarian aid to Venezuela, codifying several types of sanctions on the Maduro government, and authorizing $17.5 million to support elections and a democratic transition in Venezuela. P.L. 116-94 also incorporates languages from several House-approved bills including H.R. 920 , restricting the export of defense articles to Venezuela; and H.R. 1477 , requiring a strategy to counter Russian influence in Venezuela. Congress has begun consideration of the Administration's $205 million FY2021 foreign aid request for Venezuela, an 811% increase over that appropriated in FY2019. According to the Administration, the assistance would provide support to democratic institutions following a potential political transition and would address the urgent health needs of the Venezuelan people. In July 2019, the House passed H.R. 549 , which would designate Venezuela for TPS. In December 2019, Congress enacted the FY2020 NDAA ( P.L. 116-92 ), which prohibits federal contracting with persons who do business with the Maduro government. House and Senate committees have held hearings on the situation in Venezuela and U.S. policy (see Appendix ). For additional information, see CRS In Focus IF10230, Venezuela: Political Crisis and U.S. Policy , by Clare Ribando Seelke; CRS In Focus IF10715, Venezuela: Overview of U.S. Sanctions , by Mark P. Sullivan; CRS Report R44841, Venezuela: Background and U.S. Relations , coordinated by Clare Ribando Seelke; CRS In Focus IF11216, Venezuela: International Efforts to Resolve the Political Crisis , by Clare Ribando Seelke; and CRS In Focus IF11029, The Venezuela Regional Migration Crisis , by Rhoda Margesson and Clare Ribando Seelke. Outlook Congress has begun to consider the Trump Administration's FY2021 $1.4 billion foreign aid budget request for the region. The 18% cut in overall funding compared to FY2019 foreign aid levels masks large cuts, ranging from 30-60%, for some countries and programs. In particular, the Trump Administration's linkage of aid to Central America to reductions in unauthorized migration from the region could be an area of contention with Congress as could the Administration's large increase in assistance to support a democratic transition in Venezuela that has yet to happen. On trade issues, the 116 th Congress may consider whether to extend a tariff preference program for certain Caribbean countries, the CBTPAâwhich expires in September 2020âand the broader GSP for developing countries worldwide, which expires in December 2020. Looking ahead through 2020, the Latin America and Caribbean region faces significant challengesâmost prominently, Venezuela's ongoing political impasse and economic and humanitarian crisis, which has resulted in some 4 million Venezuelan refugees and migrants in the region. Upcoming elections in Bolivia in May 2020 are expected to be an important test of the country's political system in the aftermath of President Morales's resignation following protests ignited by widespread electoral fraud in October 2019. Social protests racked many Latin American countries in late 2019, and such unrest could continue in 2020 given that many of the underlying conditions still exist. These challenges and the appropriate U.S. policy responses may remain oversight issues for Congress. Other areas of congressional oversight and interest may include the ongoing difficult political situations in Haiti and Nicaragua, efforts to stem drug trafficking from South America, appropriate strategies to curb the flow of migrants from Central America, and U.S. policy toward Cuba. Appendix. Hearings in the 116th Congress Summary:	null	96	117,481	117,483	117,483	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Regional Political and Economic Environment With 33 countriesâranging from the Caribbean nation of St. Kitts and Nevis, one of the world's smallest states, to the South American giant of Brazil, the world's fifth-largest countryâthe Latin American and Caribbean region has made significant advances over the past four decades in terms of both political and economic development. (See Figure 1 and Table 2 for a map and basic facts on the region's countries.) Significant challenges remain, however, and some countries have experienced setbacks, most prominently Venezuela (which has descended into dictatorship). In the early 1980s, authoritarian regimes governed 16 Latin American and Caribbean countries, both on the left and the right. Today, three countries in the regionâCuba, Nicaragua, and Venezuelaâare ruled by authoritarian governments. Most governments in the region today are elected democracies. Although free and fair elections have become the norm, recent elections in several countries have been controversial and contested. In 2019, Argentina, Dominica, El Salvador, Panama, and Uruguay held successful free and fair elections. Guatemala held two presidential election rounds in June and August 2019 that international observers judged to be successful, but the elections suffered because several popular candidates were disqualified from the race on dubious grounds. In Bolivia, severe irregularities in the conduct of the country's October 2019 presidential elections ignited protests and violence that led to the resignation of incumbent President Evo Morales, who was seeking a fourth term; new elections under an interim president are now scheduled for May 2020. Most recently, Guyana held elections on March 2, 2020, which were marred by allegations of fraud; final results are on hold pending court action regarding the final verification of some votes. Six other Caribbean countries are scheduled to hold elections in 2020 (see text box " 2020 Elections "). Despite significant improvements in political rights and civil liberties since the 1980s, many countries in the region still face considerable challenges. In a number of countries, weaknesses remain in the state's ability to deliver public services, ensure accountability and transparency, advance the rule of law, and ensure citizen safety and security. There are numerous examples of elected presidents who have left office early amid severe social turmoil and economic crises, the presidents' own autocratic actions contributing to their ouster, or high-profile corruption. In addition to Morales's resignation in 2019, corruption scandals either caused or contributed to several presidents' resignations or removals of several presidentâGuatemala in 2015, Brazil in 2016, and Peru in 2018. Although the threat of direct military rule has dissipated, civilian governments in several countries have turned to their militaries or retired officers for support or during crises, raising concerns among some observers. Most recently, in El Salvador on February 9, 2020, President Nayib Bukele used the military in an effort to intimidate the country's legislature into approving an anti-crime bill; the action elicited strong criticism in El Salvador and abroad, with concerns centered on the politicization of the military and the separation of powers. The quality of democracy has eroded in several countries over the past several years. The Economist Intelligence Unit's (EIU's) 2019 democracy index shows a steady regional decline in democratic practices in Latin America since 2017. Several years ago only Cuba was viewed as an authoritarian regime, but Venezuela joined its ranks in 2017 as President NicolÃ¡s Maduro's government violently repressed the political opposition. Nicaragua turned to authoritarian practices in 2018 under long-time President Daniel Ortega, as the government violently repressed protests. The continued regional downward trend in 2019 stemmed from Bolivia's post-election crisis and to a lesser extent by setbacks in the following other countries: Guatemala, where the government ousted the anti-corruption body known as the International Commission against Impunity in Guatemala; Haiti, which experienced widespread anti-government protests against corruption and deteriorating economic conditions; and Guyana, with the delay of elections following a no-confidence vote by the legislature. Public satisfaction with how democracy is operating has declined along with the quality of democracy in the region. According to the 2018/2019 AmericasBarometer public opinion survey, the percentage of individuals satisfied with how democracy was working in their countries averaged 39.6% among 18 countries in the region, the lowest level of satisfaction since the poll began in 2004. Given these trends, the eruption of social protests in many countries around the region in 2019 is unsurprising, but in each country a unique set of circumstances has sparked the protests. In addition to the protests in Bolivia and Haiti cited above, protests broke out in Ecuador over fuel price increases, in Chile over pent-up frustration over social inequities, and in Colombia over opposition to a range of government policies and proposals, from tax reform to education to peace accord implementation. Although each country is unique, several broad political and economic factors appear to be driving the decline in satisfaction with democracy in the region. Political factors include an increase in authoritarian practices, weak democratic institutions and politicized judicial systems, corruption, high levels of crime and violence, and organized crime that can infiltrate or influence state institutions. Economic factors include declining or stagnant regional economic growth rates over the past several years, high levels of income inequality in many Latin American countries, increased poverty, and the inadequacy of social safety net programs or advancement opportunities, along with increased pressure on the region's previously expanding middle class. Beginning around 2015, the global decline in commodity prices significantly affected the region, as did China's economic slowdown and its reduced appetite for imports from the region in 2015 and 2016 (see Table 1 ). According to the International Monetary Fund (IMF), the region experienced an economic contraction of 0.6% in 2016, dragged down by recessions in Argentina and Brazil, as well as by Venezuela's severe economic deterioration as oil prices fell. Since then, the region has registered only marginal growth rates, including an estimated growth rate of 0.2% in 2019. Regional growth in 2019 was suppressed by the collapse of much of the Venezuelan economy, which contracted 35%, and by continued recession in Argentina, which suffered an economic contraction of 3.1%. The current IMF 2020 outlook is for regional growth to reach 1.6%, led by recovery in Brazil and spurred by growth forecasts of 3% or higher for Chile, Colombia, and Peru. The economic fallout from the current coronavirus disease (COVID-19) outbreak, which already is having repercussions around the world, could jeopardize this forecast. Even before the onset of the coronavirus, recession was forecasted to continue in several countries, including Argentina and Venezuela, with contractions of 1.3% and 10% respectively. The risk of social unrest similar to that experienced in 2019 could also constrain growth in some countries. Despite some easing of income inequality in the region from 2002 to 2014, reductions in income inequality have slowed since 2015; Latin America remains the most unequal region in the world in terms of income inequality, according to the United Nations (U.N.) Economic Commission for Latin America and the Caribbean. The level of poverty in the region also has increased over the past five years. In 2014, 27.8% of the region's population lived in poverty; that figure increased to 30.8% by 2019. U.S. Policy Toward Latin America and the Caribbean U.S. interests in Latin America and the Caribbean are diverse and include economic, political, security, and humanitarian concerns. Geographic proximity has ensured strong economic linkages between the United States and the region, with the United States being a major trading partner and source of foreign investment for many Latin American and Caribbean countries. Free-trade agreements (FTAs) have augmented U.S. economic relations with 11 countries in the region. The Western Hemisphere is a large source of U.S. immigration, both legal and illegal; geographic proximity and economic and security conditions are major factors driving migration trends. Curbing the flow of illicit drugs from Latin America and the Caribbean has been a key component of U.S. relations with the region and a major interest of Congress for more than four decades. The flow of illicit drugs, including heroin, methamphetamine, and fentanyl from Mexico and cocaine from Colombia, poses risks to U.S. public health and safety; and the trafficking of such drugs has contributed to violent crime and gang activities in the United States. Since 2000, Colombia has received U.S. counternarcotics support through Plan Colombia and its successor programs. In addition, for over a decade, the United States sought to forge close partnerships with other countries to combat drug trafficking and related violence and advance citizen security. These efforts include the MÃ©rida Initiative begun in 2007 to support Mexico, the Central America Regional Security Initiative (CARSI) begun in 2008, and the Caribbean Basin Security Initiative (CBSI) begun in 2009. Another long-standing component of U.S. policy has been support for strengthened democratic governance and the rule of law. As described in the previous section, although many countries in the region have made enormous strides in terms of democratic political development, several face considerable challenges. U.S. policy efforts have long supported democracy promotion efforts, including support for strengthening civil society and promoting the rule of law and human rights. Trump Administration Policy In its policy toward Latin America and the Caribbean, the Trump Administration has retained many of the same priorities and programs of past Administrations, but it has also diverged considerably. The Administration has generally adopted a more confrontational approach, especially regarding efforts to curb irregular immigration from the region. In 2018, the State Department set forth a framework for U.S. policy toward the region focused on three pillars for engagement: (1) economic growth and prosperity, (2) security, and (3) democratic governance. The framework reflects continuity with long-standing U.S. policy priorities for the region but at times appears to be at odds with the Administration's actions, which sometimes have been accompanied by antagonistic statements on immigration, trade, and foreign aid. Meanwhile, according to Gallup and Pew Research Center polls, negative views of U.S. leadership in the region have increased markedly during the Trump Administration (see text box " Latin America and the Caribbean: Views of U.S. Leadership "). Foreign Aid. The Administration's proposed foreign aid budgets for FY2018 and FY2019 would have cut assistance to the region by more than a third, and the FY2020 budget request would have cut funding to the region by about 30% compared to that appropriated in FY2019. Congress did not implement those budget requests and instead provided significantly more for assistance to the region in appropriations measures. In 2019, however, the Trump Administration withheld some assistance to Central America to compel its governments to curb the flow of migrants to the United States. (See " U.S. Foreign Aid " section.) Trade. In 2017, President Trump ordered U.S. withdrawal from the proposed Trans-Pacific Partnership (TPP) FTA that had been negotiated by 12 Asia-Pacific countries in 2015. The TPP would have increased U.S. economic linkages with Latin American countries that were parties to the agreementâChile, Mexico, and Peru. President Trump strongly criticized the North American Free Trade Agreement (NAFTA) with Mexico and Canada, repeatedly warned that the United States might withdraw from the agreement, and initiated renegotiations in 2017. The three countries agreed in September 2018 to a new United States-Mexico-Canada Agreement (USMCA), which retained many NAFTA provisions but also included some modernizing updates and changes, such as provisions on digital trade and the dairy and auto industries. (See " Trade Policy " section.) Mexico , Central America, and Migration Issues . Relations with Mexico have been tested by inflammatory anti-immigrant rhetoric, immigration actions, and changes in U.S. border and asylum polices that have shifted the burden of interdicting migrants and offering asylum to Mexico. In September 2017, the Administration announced that it would end the Deferred Action for Childhood Arrivals (DACA) program; begun in 2012 by the Obama Administration, the program provides relief from deportation for several hundred thousand immigrants who arrived in the United States as children. The future of the initiative remains uncertain given challenges in federal court. In December 2018, Mexico's president agreed to allow the United States to return certain non-Mexican migrants to Mexico (pursuant to Migrant Protection Protocols or MPP) while awaiting U.S. immigration court decisions. In May 2019, President Trump threatened to impose new tariffs on motor vehicles from Mexico if the government did not increase actions to deter U.S.-bound migrants from Central America; Mexico ultimately agreed in June 2019 to increase its enforcement actions and to allow more U.S.-bound asylum seekers to await their U.S. immigration proceedings in Mexico. Despite tensions, U.S.-Mexico bilateral relations remain friendly, with continued strong energy and economic ties, including the USMCA, and close security cooperation related to drug interdiction. (See " Mexico " section.) Other Administration actions on immigration have caused concern in the region. In 2017 and 2018, the Administration announced plans to terminate Temporary Protected Status (TPS) designations for Nicaragua, Haiti, El Salvador, and Honduras, but federal court challenges have put the terminations on hold. (See " Migration Issues " section.) Unauthorized migration from Central America's Northern Triangle countriesâEl Salvador, Guatemala, and Hondurasâhas increased in recent years, fueled by difficult socioeconomic and security conditions and poor governance. To deter such migration, the Trump Administration implemented a "zero tolerance" policy toward illegal border crossings in 2018 and applied restrictions on access to asylum at the U.S. border. The Administration also has used aid cuts of previously appropriated assistance for FY2017 and FY2018 and threats of increased U.S. tariffs and taxes on remittances to compel Central American countries and Mexico to curb unauthorized migration to the United States. In 2019, the Administration negotiated "safe third country" agreements with each of the Northern Triangle countries to permit the United States to transfer asylum applicants from third countries to the Northern Triangle countries. (See " Central America's Northern Triangle " section.) Venezuela , Cuba , and Nicaragua . In November 2018, then-National Security Adviser John Bolton made a speech in Miami, FL, on the Administration's policies in Latin America that warned about "the destructive forces of oppression, socialism, and totalitarianism" in the region. Reminiscent of Cold War political rhetoric, Bolton referred to Cuba, Nicaragua, and Venezuela as the "troika of tyranny" in the hemisphere that has "finally met its match." He referred to the three countries as "the cause of immense human suffering, the impetus of enormous regional instability, and the genesis of a sordid cradle of communism in the Western Hemisphere." As the situation in Venezuela has deteriorated under the Maduro government, the Trump Administration has imposed targeted and broader financial sanctions, including sanctions against the state oil company, the country's main source of income. In January 2019, the Administration recognized the head of Venezuela's National Assembly, Juan GuaidÃ³, as interim president. In September 2019, the United States joined 11 other Western Hemisphere countries to invoke the Rio Treaty to facilitate a regional response to the Venezuelan crisis. The Administration also is providing humanitarian and development assistance for Venezuelans who have fled to other countries, especially Colombia, as well as for Venezuelans inside Venezuela. (See " Venezuela " section.) With regard to Cuba, the Trump Administration has not continued the policy of engagement advanced during the Obama Administration and has imposed a series of economic sanctions on Cuba for its poor human rights record and support for the Maduro government. Economic sanctions have included restrictions on travel and remittances, efforts to disrupt oil flows from Venezuela, and authorization (pursuant to Title III of the LIBERTAD Act, P.L. 104-114 ) of the right to file lawsuits against those trafficking in confiscated property in Cuba. In 2017, the State Department cut the staff of the U.S. Embassy in Havana by about two-thirds in response to unexplained injuries of U.S. diplomatic staff. (See " Cuba " section.) Since political unrest began to grow in Nicaragua in 2018, the Trump Administration has employed targeted sanctions against several individuals close to President Ortega due to their alleged ties to human rights abuses or significant corruption. (See " Nicaragua " section.) Congress and Policy Toward the Region Congress traditionally has played an active role in policy toward Latin America and the Caribbean in terms of both legislation and oversight. Given the region's geographic proximity to the United States, U.S. foreign policy toward the region and domestic policy often overlap, particularly in areas of immigration and trade. The 116 th Congress completed action on FY2019 foreign aid appropriations in February 2019 when it enacted the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ). Amounts appropriated for key U.S. initiatives and countries in Latin America and the Caribbean exceeded the Administration's request by almost $600 million. Congress completed action on FY2020 foreign aid appropriations in December 2019 when it enacted the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ), with amounts for key countries and regional programs once again significantly exceeding the Administration's request. Congress recently has begun consideration of the Administration's FY2021 foreign aid request. In January 2020, Congress completed action on implementing legislation for the USMCA ( P.L. 116-113 ). The agreement retains many of NAFTA's provisions and includes new provisions on the auto and dairy industries and some modernizing features. Before U.S. implementing legislation received final congressional approval in January 2020, the trade agreement was amended to address concerns of Congress regarding provisions related to labor (including enforcement), the environment, dispute settlement procedures, and intellectual property rights (IPR). On Venezuela, Congress has supported the Administration's efforts to sanction the Maduro government for its antidemocratic actions and to provide humanitarian assistance to Venezuelan migrants throughout the region. In December 2019, Congress enacted the Venezuela Emergency Relief, Democracy Assistance, and Development Act of 2019, or the VERDAD Act of 2019, in Division J of P.L. 116-94 . The measure incorporates provisions from S. 1025 , as reported by the Senate Foreign Relations Committee in June 2019, and some language or provisions from three bills on Venezuela passed by the House in March 2019: H.R. 854 , to authorize humanitarian assistance to the Venezuelan people; H.R. 920 , to restrict the export of defense articles and crime control materials; and H.R. 1477 , to require a threat assessment and strategy to counter Russian influence in Venezuela. In other legislative action, the House approved H.R. 549 in July 2019, which would provide TPS to Venezuelans in the United States. Congress included several provisions related to Latin America in the National Defense Authorization Act for Fiscal Year 2020 (FY2020 NDAA; P.L. 116-92 ), signed into law in December 2019. Among the provisions are the following: Venezuela. Section 890 prohibits the Department of Defense (DOD) from entering into a contract for the procurement of goods or services with any person that has business operations with the Maduro regime in Venezuela. Western Hemisphere Resources. Section 1265 provides that the Secretary of Defense shall seek to enter into a contract with an independent nongovernmental institute that has recognized credentials and expertise in national security and military affairs to conduct an accounting and an assessment of the sufficiency of resources available to the U.S. Southern Command, the U.S. Northern Command, the Department of State, and the U.S. Agency for International Development (USAID) to carry out their respective missions in the Western Hemisphere. Among other matters, the assessment is required to include "a list of investments, programs, or partnerships in the Western Hemisphere by China, Iran, Russia, or other adversarial groups or countries that threaten the national security of the United States." A report on the assessment is due to Congress within one year, in unclassified form, but may include a classified annex. Brazil. Section 1266 requires the Secretary of Defense, in coordination with the Secretary of State, to submit a report to Congress regarding the human rights climate in Brazil and U.S.-Brazilian security cooperation. Guatemala. Section 1267 requires the Secretary of Defense to certify, prior to the transfer of any vehicles to the Guatemalan government, that the government has made a credible commitment to use such equipment only as intended. Honduras. Section 1268 requires the Secretary of Defense to enter into an agreement with an independent institution to conduct an analysis of the human rights situation in Honduras. Central America and Mexico. Section 5522 requires the Director of National Intelligence, in collaboration with other agencies, to submit within 90 days a comprehensive assessment of drug trafficking, human trafficking, and human smuggling activities in Central America and Mexico; the report may be in classified form, but if so, it shall contain an unclassified summary. Other bills and resolutions have passed either or both houses: Mexico. In January 2019, the House approved H.R. 133 , which would promote U.S.-Mexican economic partnership and cooperation, including a strategy to prioritize and expand educational and professional exchange programs with Mexico. The Senate approved the bill, amended, in January 2020, which included a new provision that would promote positive cross-border relations as a priority for advancing U.S. foreign policy and programs. Central America. The House approved H.R. 2615 , the United States-Northern Triangle Engagement Act, in July 2019, which would authorize foreign assistance to El Salvador, Guatemala, and Honduras to address the root causes of migration. The bill would also require the State Department to devise strategies to foster economic development, combat corruption, strengthen democracy and the rule of law, and improve security conditions in the region. Bolivia. The Senate approved S.Res. 35 in April 2019, expressing support for democratic principles in Bolivia and throughout Latin America. In January 2020, the Senate approved S.Res. 447 , expressing concerns about election irregularities and violence in Bolivia and supporting the convening of new elections. Argentina. Both houses approved resolutions, H.Res. 441 in July 2019 and S.Res. 277 in October 2019, commemorating the 25 th anniversary of the 1994 bombing of the Argentine-Israeli Mutual Association in Buenos Aires. Congressional committees have held almost 20 oversight hearings on the region, including on Venezuela, Central America (including the impact of U.S. aid cuts), relations with Colombia, human rights in Cuba, China's engagement in Latin America, environmental concerns in the Brazilian Amazon, repression in Nicaragua, and security cooperation with Mexico (see Appendix ). Regional U.S. Policy Issues U.S. Foreign Aid The United States provides foreign assistance to Latin American and Caribbean nations to support development and other U.S. objectives. U.S. policymakers have emphasized different strategic interests in the region at different times, from combating Soviet influence during the Cold War to promoting democracy and open markets, as well as countering illicit narcotics, since the 1990s. Over the past three years, the Trump Administration has sought to refocus U.S. assistance efforts in the region to address U.S. domestic concerns, such as irregular migration and transnational crime. The Trump Administration has also sought to cut U.S. assistance to Latin America and the Caribbean. In 2019, for example, the Administration withheld an estimated $405 million that Congress had appropriated for Central America in FY2018 and reprogrammed the funds to address other foreign policy priorities inside and outside the Western Hemisphere. (See " Central America's Northern Triangle ," below.) The Administration has proposed additional foreign assistance cuts in each of its annual budget proposals. For FY2020, the Administration requested approximately $1.2 billion to be provided to the region through foreign assistance accounts managed by the State Department and USAID, which is about $503 million (30%) less than the region received in FY2019 (see Table 3 ). The request would have cut funding for nearly every type of assistance provided to the region and would have reduced aid for most Latin American and Caribbean countries. The Administration's FY2020 budget proposal also would have eliminated the Inter-American Foundation, an independent U.S. foreign assistance agency that promotes grassroots development in the region. For FY2021, the Administration requested $1.4 billion for the region, which is about 18% less than Congress appropriated for FY2019, and again proposed eliminating the Inter-American Foundation. Congressional Action: After a partial government shutdown and a short-term continuing resolution ( P.L. 116-5 ), the 116 th Congress completed action on FY2019 foreign aid appropriations in February 2019. The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) included an estimated $1.69 billion of foreign assistance for Latin America and the Caribbean. That amount was slightly more than the $1.67 billion appropriated for the region in FY2018 and nearly $600 million more than the Trump Administration requested for the region. Although the House passed an FY2020 foreign aid appropriations bill in June 2019 ( H.R. 2740 , H.Rept. 116-78 ), and the Senate Appropriations Committee reported its bill in September 2019 ( S. 2583 , S.Rept. 116-126 ), neither measure was enacted before the start of FY2020. Instead, Congress passed two continuing resolutions ( P.L. 116-59 and P.L. 116-69 ), which funded foreign aid programs in Latin America and the Caribbean at the FY2019 level between October 1, 2019, and December 20, 2019, when President Trump signed into law the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ). The act and the accompanying explanatory statement do not specify appropriations levels for every Latin American and Caribbean nation. Nevertheless, the amounts designated for key U.S. initiatives in Central America, Colombia, and Mexico significantly exceed the Administration's request. The act provides "not less than" $519.9 million to continue implementation of the U.S. Strategy for Engagement in Central America, which is about $75 million more than the Administration requested but $8 million less than Congress appropriated for the initiative in FY2019. "not less than" $448.3 million to support the peace process and security and development efforts in Colombia, which is about $104 million more than the Administration requested and $27 million more than Congress appropriated for Colombia in FY2019. $157.9 million to support security and rule-of-law efforts in Mexico, which is $79 million more than the Administration requested but about $5 million less than Congress appropriated for Mexico in FY2019. The act also provides $37.5 million for the Inter-American Foundation to continue its grassroots development programs throughout the region. Resolutions have been introduced in both houses (H.Res. 649 and S.Res. 297 ) to commend the Inter-American Foundation on its 50 th anniversary, recognize its contributions to development and to advancing U.S. national interests, and pledge continued support for the agency's work. For additional information, see CRS Report R45547, U.S. Foreign Assistance to Latin America and the Caribbean: FY2019 Appropriations , by Peter J. Meyer and Edward Y. Gracia. Drug Trafficking and Criminal Gangs Latin America and the Caribbean feature prominently in U.S. counternarcotics policy due to the region's role as a source and transit zone for several illicit drugs destined for U.S. marketsâcocaine, marijuana, methamphetamine, and opiates (plant-based and synthetic). Heroin abuse and synthetic opioid-related deaths in the United States have reached epidemic levels, raising questions about how to address foreign sources of opioidsâparticularly Mexico, which has experienced an uptick in opium poppy cultivation and the production of heroin and fentanyl (a synthetic opioid). According to the State Department, over 90% of heroin seized and sampled in the United States comes from Mexico and increasingly has included fentanyl. Policymakers also are concerned that methamphetamine and cocaine overdoses in the United States are on an upward trajectory. Rising cocaine usage occurred as coca cultivation and cocaine production in Colombia, which supplies roughly 89% of cocaine in the United States, reached record levels in 2017 before leveling off in 2018. Whereas Mexico, Colombia, Peru, and most other source and transit countries in the region work closely with the United States to combat drug production and interdict illicit flows, the Venezuelan government does not. Public corruption in Venezuela also has made it easier for drug trafficking organizations to smuggle illicit drugs. Contemporary drug trafficking and transnational crime syndicates have contributed to degradations in citizen security and economic development in some countries, often resulting in high levels of violence and homicide. Despite efforts to combat the drug trade, many Latin American governments, particularly in Mexico and Central Americaâa region through which roughly 93% of cocaine from South America transited in 2018âcontinue to suffer from weak criminal justice systems and overwhelmed law enforcement agencies. Government corruption, including high-level cooperation with criminal organizations, further frustrates efforts to interdict drugs, investigate and prosecute traffickers, and recover illicit proceeds. At the same time, a widespread perceptionâparticularly among Latin American observersâis that U.S. demand for illicit drugs is largely to blame for the region's ongoing crime and violence problems. Criminal gangs with origins in southern California, principally the Mara Salvatrucha (MS-13) and the "18 th Street" gang, continue to undermine citizen security and subvert government authority in Central America. Gang-related violence has been particularly acute in El Salvador, Honduras, and urban areas in Guatemala, contributing to some of the highest homicide rates in the world. Although some gangs engage in local drug distribution, gangs generally do not have a role in transnational drug trafficking. Gangs have been involved in a range of other criminal activities, including extortion, money laundering, and weapons smuggling, and gang-related violence has fueled unauthorized migration to the United States. U.S. Policy. For more than 40 years, U.S. policy toward the region has focused on countering drug trafficking and reducing drug production in Latin America and the Caribbean. The largest support program, Plan Colombia, provided more than $10 billion to help Colombia combat both drug trafficking and rebel groups financed by the drug trade from FY2000 to FY2016. After Colombia signed a historic peace accord with the country's largest leftist guerrilla group, the Revolutionary Armed Forces of Colombia (FARC), the United States provided assistance to help implement the agreement. U.S. officials concerned about rising cocaine production have praised Colombian President Ivan Duque's willingness to restart aerial fumigation of coca crops and significantly scale up manual eradication. U.S. support to combat drug trafficking and reduce crime also has included a series of partnerships with other countries in the region: the MÃ©rida Initiative, which has led to improved bilateral security cooperation with Mexico; the Central America Regional Security Initiative (CARSI); and the Caribbean Basin Security Initiative (CBSI). During the Obama Administration, those initiatives combined U.S. antidrug and rule-of-law assistance with economic development and violence prevention programs intended to improve citizen security in the region. The Trump Administration's approach to Latin America and the Caribbean has focused heavily on U.S. security objectives. All of the aforementioned assistance programs have continued, but they place greater emphasis on combating drug trafficking, gangs, and other criminal groups than during the Obama Administration. The Trump Administration also has sought to reduce funding for each of the U.S. security assistance programs and has reprogrammed, withheld, or not yet obligated significant portions of assistance to Central America due to concerns that those governments have not adequately curbed unauthorized migration. President Trump has welcomed Mexico's assistance on migration enforcement, but the Administration noted in an FY2020 presidential determination issued in August 2019 that "without further progress over [this year], he could determine that Mexico has 'failed demonstrably' to meet its international drug control commitments." Such a determination could trigger U.S. foreign assistance cuts to Mexico. President Trump also has prioritized combating gangs, namely the MS-13, which the Department of Justice (DOJ) has named a top priority for U.S. law enforcement agencies. U.S. agencies, in cooperation with vetted units in Central America funded through CARSI, have brought criminal charges against thousands of MS-13 members in the United States. U.S. assistance that supports vetted units working with the U.S. Department of Homeland Security (DHS) and DOJ have been exempt from recent aid reductions for Central America. Congressional Action: The 116 th Congress has held hearings on opioids, which included consideration of heroin and fentanyl production in Mexico; corruption in the Americas; the importance of U.S. assistance to Central America (including CARSI); and relations with Colombia, Mexico, and Central America, including antidrug cooperation. Compared to FY2018, the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provided increased FY2019 resources for Colombia and Mexico, slightly less funding for CARSI, and stable funding for the CBSI. P.L. 116-6 provided $1.5 million to support the creation of a Western Hemisphere Drug Policy Commission to assess U.S. policy and make recommendations on how it might be improved. The Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ) provides more security and rule of law funding for Colombia and Mexico than the estimated FY2019 appropriations level, less funding for CARSI, and slightly more funding for the CBSI. The FY2020 NDAA ( P.L. 116-92 ) requires the Director of National Intelligence, in collaboration with other agencies, to submit within 90 days of enactment an assessment of drug trafficking, human trafficking, and human smuggling activities and how those activities influence migration in Mexico and the Northern Triangle. The FY2020 NDAA also establishes a Commission on Combating Synthetic Opioid Trafficking to report on, among other things, the scale of opioids coming from Mexico. For additional information, see CRS In Focus IF10578, Mexico: Evolution of the MÃ©rida Initiative, 2007-2020 , by Clare Ribando Seelke; CRS In Focus IF10578, Mexico: Evolution of the MÃ©rida Initiative, 2007-2020 , by Clare Ribando Seelke; CRS In Focus IF10400, Transnational Crime Issues: Heroin Production, Fentanyl Trafficking, and U.S.-Mexico Security Cooperation , by Clare Ribando Seelke and Liana W. Rosen; CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress , by Peter J. Meyer; CRS Report R43813, Colombia: Background and U.S. Relations , by June S. Beittel; and CRS In Focus IF10789, Caribbean Basin Security Initiative , by Mark P. Sullivan. Trade Policy The Latin American and Caribbean region is one of the fastest-growing regional trading partners for the United States. Economic relations between the United States and most of its trading partners in the region remain strong, despite challenges, such as President Trump's past threats to withdraw from NAFTA, tariff policy, diplomatic tensions, and high levels of violence in some countries in the region. The United States accounts for roughly 33% of the Latin American and Caribbean region's merchandise imports and 44% of its merchandise exports. Most of this trade is with Mexico, which accounted for 77% of U.S. imports from the region and 61% of U.S. exports to the region in 2019. In 2019, total U.S. merchandise exports to Latin America and the Caribbean were valued at $418.9 billion, down from $429.7 billion in 2018. U.S. merchandise imports were valued at $467.0 billion in 2019 (see Table 4 ). The United States strengthened economic ties with Latin America and the Caribbean over the past 24 years through the negotiation and implementation of FTAs. Starting with NAFTA in 1994, which will be replaced by the USMCA when it enters into force, the United States currently has six FTAs in force involving 11 Latin American countries: Mexico, Chile, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Panama, and Peru. NAFTA was significant because it was the first U.S. FTA with a country in the Latin American and Caribbean region, and it established new rules and disciplines that influenced future trade agreements on issues important to the United States, such as IPR protection, services trade, agriculture, dispute settlement, investment, labor, and the environment. In addition to FTAs, the United States has extended unilateral trade preferences to some countries in the region through several trade preference programs. The Caribbean Basin Economic Recovery Act (no expiration), for example, provides limited duty-free entry of select Caribbean products as a core element of the U.S. foreign economic policy response to uncertain economic and political conditions in the region. Several preference programs for Haiti, which expire in 2025, provide generous and flexible unilateral preferences to the country's apparel sector. Two other preference programs include the Caribbean Basin Trade Partnership Act (CBTPA), which expires in September 2020, and the Generalized System of Preferences (GSP), which expires in December 2020. The CBTPA extends preferences on apparel products to eligible Caribbean countries similar to those given to Mexico under NAFTA. The GSP provides duty-free tariff treatment to certain products imported from 120 designated developing countries throughout the world, including Argentina, Brazil, Ecuador, and other Latin American and Caribbean countries. In the 15 to 20 years after NAFTA, some of the largest economies in South America, such as Argentina, Brazil, and Venezuela, resisted the idea of forming comprehensive FTAs with the United States. That opposition may be changing. In September 2019, President Trump noted preliminary talks with Brazil for a trade agreement, and Brazilian officials recently stated that the country was ready for a trade deal similar to USMCA. Numerous other bilateral and plurilateral trade agreements throughout the Western Hemisphere do not include the United States. For example, the Pacific Alliance, a trade arrangement composed of Mexico, Peru, Colombia, and Chile, is reportedly moving forward on a possible trade arrangement with Mercosur, composed of Brazil, Argentina, Uruguay, and Paraguay. On June 28, 2019, the European Union (EU) and Mercosur reached a political agreement to negotiate an ambitious and comprehensive trade agreement. President Trump has made NAFTA renegotiation and modernization a priority of his Administration's trade policy. Early in his Administration, he viewed FTAs as detrimental to U.S. workers and industries, stating that NAFTA was "the worst trade deal" and repeatedly warning that the United States may withdraw from the agreement. The United States, Canada, and Mexico subsequently renegotiated NAFTA and concluded negotiations for USMCA on September 30, 2018. Mexico was the first country to ratify the agreement in June 2019 and the first country to approve the amended USMCA on December 12, 2019. The original text of USMCA was amended to address congressional concerns on labor, environment, IPR, and dispute settlement provisions. On January 16, 2020, Congress approved the agreement, and many expect Canada's parliament to ratify it in early 2020. The USMCA retains NAFTA's market opening provisions and most other provisions. The agreement makes notable changes to labor and environment provisions, market access provisions for autos and agriculture products, and rules, such as investment, government procurement, IPR, and dispute settlement; it adds new provisions on digital trade, state-owned enterprises, and currency misalignment. All parties must ratify the agreement and have laws and regulations in place to meet their USMCA commitments before the agreement can enter into force. In 2018, President Trump issued two proclamations imposing tariffs on U.S. imports of certain steel and aluminum products using presidential powers granted under Section 232 of the Trade Expansion Act of 1962. In doing so, the Administration added new challenges to U.S. trade relations with the region. The proclamations outlined the President's decisions to impose tariffs of 25% on steel and 10% on aluminum imports, with some flexibility on the application of tariffs by country. In May 2018, President Trump proclaimed Argentina and Brazil permanently exempt from the steel tariffs in exchange for quota agreements, but he threatened to impose tariffs again in December 2019. The United States imposed tariffs on steel and aluminum imports from Mexico on May 31, 2018, and Mexico subsequently imposed retaliatory tariffs on 71 U.S. products, covering an estimated $3.7 billion worth of trade. By May 2019, President Trump had exempted Mexico from steel and aluminum tariffs, and Mexico agreed to terminate its retaliatory tariffs. President Trump's January 2017 withdrawal from the proposed TPP, an FTA that included Mexico, Peru, and Chile as signatories, signified another change to U.S. trade policy. In March 2018, all TPP parties signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP-11), which essentially brought a modified TPP into effect. The TPP-11 has entered into force among seven countriesâCanada, Australia, Japan, Mexico, New Zealand, Singapore, and Vietnam. Chile and Peru expect to ratify the agreement eventually. Colombia has expressed plans to request entry into the agreement after it enters into force among all partners. Some observers contend that U.S. withdrawal from the proposed TPP could damage U.S. competitiveness and economic leadership in the region, whereas others see the withdrawal as a way to prevent lower-cost imports and potential job losses. Congressional Action: The 116 th Congress, in both its legislative and oversight capacities, has faced numerous trade policy issues related to NAFTA's renegotiation and the USMCA. The U.S. House of Representatives approved USMCA implementing legislation, H.R. 5430 , on December 19, 2019, by a vote of 385-41, and the Senate approved it on January 16, 2020, by a vote of 89-10; it was signed into law ( P.L. 116-113 ) on January 29, 2020. Lawmakers took an interest as to whether the Administration followed U.S. trade negotiating objectives and procedures as required by Trade Promotion Authority (Bipartisan Congressional Trade Priorities and Accountability Act of 2015, or TPA; P.L. 114-26 ). Some Members also considered issues surrounding the labor and environment provisions' enforceability, access to medicine, and economic effects. Other Members showed interest in how the USMCA may affect U.S. industries, especially the auto industry, as well as the overall effects on the U.S. and Mexican economies, North American supply chains, and trade relations with the Latin American and Caribbean region. Among other trade issues, legislation was introduced ( H.R. 991 and S. 2473 ) that would extend CBTPA benefits through September 2030. Regarding the Section 232 investigations on aluminum and steel imports, the impact of tariffs and retaliatory tariffs from Mexico on U.S. producers, domestic U.S. industries, and consumers raised numerous issues for Congress. Energy reform in Mexico, and the implications for U.S. trade and investment in energy, may continue to be of interest to Congress. Policymakers also may consider how U.S. trade policy is perceived by the region and whether it may affect multilateral trade issues and cooperation on matters regarding security and migration. Another issue relates to U.S. market share. If Mexico, Chile, Colombia, Peru, and Mercosur countries continue trade and investment liberalization efforts with other countries without the United States, doing so may open the door to more intra-trade and investment among certain Latin American and Caribbean countries, or possibly China and other Asian countries, which may affect U.S. exports. For additional information, see CRS In Focus IF10997, U.S.-Mexico-Canada (USMCA) Trade Agreement , by M. Angeles Villarreal and Ian F. Fergusson; CRS Report R44981, NAFTA and the United States-Mexico-Canada Agreement (USMCA) , by M. Angeles Villarreal and Ian F. Fergusson; CRS In Focus IF10038, Trade Promotion Authority (TPA) , by Ian F. Fergusson; CRS Report RL32934, U.S.-Mexico Economic Relations: Trends, Issues, and Implications , by M. Angeles Villarreal; and CRS Report R45249, Section 232 Investigations: Overview and Issues for Congress , coordinated by Rachel F. Fefer and Vivian C. Jones. Migration Issues Latin America's status as a leading source of both legal and unauthorized migration to the United States means that U.S. immigration policies significantly affect countries in the region and U.S. relations with their governments. Latin Americans comprise the vast majority of unauthorized migrants who have received relief from removal (deportation) through the TPS program and the DACA initiative; they also comprise a large percentage of recent asylum seekers. As a result, several U.S. immigration policy changes have concerned countries in the region. These include the following Trump Administration actions: ending TPS designations for Haiti, El Salvador, Nicaragua, and Honduras; rescinding DACA; and restricting access to asylum in the United States. In January 2019, the Administration launched the Migrant Protection Protocols (MPP), a program to require many migrants and asylum seekers processed at the Mexico-U.S. border to be returned to Mexico to await their immigration proceedings; the program is currently facing legal challenges but remains in place. Under a practice known as "metering," migrants may now be required to wait in Mexico until there is capacity to process them at a port of entry. The Administration also signed what it termed "asylum cooperative agreements"âalso referred to as "safe third country" agreementsâwith Guatemala, El Salvador, and Honduras to allow the United States to transfer certain migrants who arrive to a U.S. border seeking asylum protection to apply for asylum in one of those countries. The factors that have driven legal and unauthorized U.S.-bound migration from Latin America are multifaceted, and some have changed over time. They include poverty and unemployment, political and economic instability, crime and violence, natural disasters, as well as relatively close proximity to the United States, familial ties in the United States, and relatively attractive U.S. economic conditions. As an example, Venezuela, a historically stable country with limited emigration to the United States, recently has become the top country of origin among those who seek U.S. asylum due to Venezuela's ongoing crisis. Migrant apprehensions at the southwest border had been steadily declining, reaching a 50-year low in 2017, but they began to rise in mid-2017. By FY2019, DHS apprehended 977,509 migrants, roughly 456,400 more than in FY2018. Unaccompanied children and families from the Northern Triangle, many of whom were seeking asylum, made up a majority of those apprehensions. (See " Central America's Northern Triangle " below.) During the first three months of FY2020, total apprehensions declined compared to FY2019, but apprehensions of Mexican adults surged. The Trump Administration's rhetoric and policies have tested U.S. relations with Mexico and the Northern Triangle countries. Mexico's President AndrÃ©s Manuel LÃ³pez Obrador agreed to shelter migrants affected by the MPP program and then, to avoid U.S. tariffs, allow the MPP to be expanded in Mexico and increase Mexico's immigration enforcement efforts, particularly on its southern border with Guatemala. DHS is now reportedly considering sending Mexican asylum seekers to Guatemala, despite Mexico's opposition to the policy. Amidst U.S. foreign aid cuts and tariff threats (in the case of Guatemala), the Northern Triangle countries signed "safe third country" agreements despite serious concerns about conditions in the three countries; DHS began implementing the agreement with Guatemala in November 2019, but the agreements with Honduras and El Salvador have not yet been implemented. Mexico and the Northern Triangle countries, which received some 91% of the 267,258 individuals removed from the United States in FY2019, have expressed concerns that removals could overwhelm their capacity to receive and reintegrate migrants. Central American countries also are concerned about the potential for increased removals of those with criminal records to exacerbate their security problems. Congressional Action: The 116 th Congress has provided foreign assistance to help address some of the factors fueling migration from Central America and support Mexico's migration management efforts in FY2019 ( P.L. 116-6 ) and FY2020 ( P.L. 116-94 ). In July 2019, the House passed H.R. 2615 , the United States-Northern Triangle Enhanced Engagement Act, which would require a report on the main drivers of migration from Central America. The 116 th Congress has also acted on bills that could affect significant numbers of individuals from Latin America and the Caribbean living in the United States. For example in June 2019, the House passed H.R. 6 , the American Dream and Promise Act of 2019, which would establish a process for certain unauthorized immigrants who entered the United States as children, such as DACA recipients, and for certain TPS recipients to obtain lawful permanent resident (LPR) status. In July 2019, the House passed H.R. 549 , the Venezuela TPS Act of 2019, which would provide TPS designation for Venezuela. In December 2019, the House passed H.R. 5038 , the Farm Workforce Modernization Act of 2019, which would create a new temporary immigration status (certified agricultural worker (CAW) status) for certain unauthorized and other agricultural workers and would establish a process for CAWs to become LPRs. For more information, see CRS Legal Sidebar LSB10402, Safe Third Country Agreements with Northern Triangle Countries: Background and Legal Issues , by Ben Harrington; CRS In Focus IF11151, Central American Migration: Root Causes and U.S. Policy , by Peter J. Meyer and Maureen Taft-Morales; CRS In Focus IF10215, Mexico's Immigration Control Efforts , by Clare Ribando Seelke; CRS Report R45266, The Trump Administration's "Zero Tolerance" Immigration Enforcement Policy , by William A. Kandel; CRS Report R45995, Unauthorized Childhood Arrivals, DACA, and Related Legislation , by Andorra Bruno; CRS Report RS20844, Temporary Protected Status: Overview and Current Issues , by Jill H. Wilson; CRS In Focus IF11363, Processing Aliens at the U.S.-Mexico Border: Recent Policy Changes , by Hillel R. Smith, Ben Harrington, and Audrey Singer; and CRS Report R46012, Immigration: Recent Apprehension Trends at the U.S. Southwest Border , by Audrey Singer and William A. Kandel. Selected Country and Subregional Issues The Caribbean Caribbean Regional Issues The Caribbean is a diverse region of 16 independent countries and 18 overseas territories, including some of the hemisphere's richest and poorest nations. Among the region's independent countries are 13 island nations stretching from the Bahamas in the north to Trinidad and Tobago in the south; Belize, which is geographically located in Central America; and Guyana and Suriname, located on the north-central coast of South America (see Figure 2 ). Pursuant to the United States-Caribbean Strategic Enhancement Act of 2016 ( P.L. 114-291 ), the State Department submitted a multiyear strategy for the Caribbean in 2017. The strategy established a framework to strengthen U.S.-Caribbean relations in six priority areas or pillars: (1) security, with the objectives of countering transnational crime and terrorist organizations and advancing citizen security; (2) diplomacy, with the goal of increasing institutionalized engagement to forge greater cooperation at the Organization of American States (OAS) and the U.N.; (3) prosperity, including the promotion of sustainable economic growth and private sector-led investment and development; (4) energy, with the goals of increasing U.S. exports of natural gas and the use of U.S. renewable energy technologies; (5) education, focusing on increased exchanges for students, teachers, and other professionals; and (6) health, including a focus on long-standing efforts to fight infectious diseases such as HIV/AIDS. In July 2019, the State Department issued a report to Congress on the implementation of its multiyear strategy. The report maintained that limited budgets and human resources have constrained opportunities for deepening relations, but funding for the strategy's security pillar has supported meaningful engagement and produced tangible results for regional and U.S. security interests. Because of their geographic location, many Caribbean nations are vulnerable to use as transit countries for illicit drugs from South America destined for the U.S. and European markets. Many Caribbean countries also have suffered high rates of violent crime, including murder, often associated with drug trafficking activities. In response, the United States launched the Caribbean Basin Security Initiative (CBSI) in 2009, a regional U.S. foreign assistance program seeking to reduce drug trafficking in the region and advance public safety and security. The program dovetails with the first pillar of the State Department's Caribbean multiyear strategy for U.S. engagement. From FY2010 through FY2020, Congress appropriated almost $677 million for the CBSI. These funds benefitted 13 Caribbean countries. The program has targeted assistance in five areas: (1) maritime and aerial security cooperation, (2) law enforcement capacity building, (3) border/port security and firearms interdiction, (4) justice sector reform, and (5) crime prevention and at-risk youth. Many Caribbean nations depend on energy imports and, over the past decade, have participated in Venezuela's PetroCaribe program, which supplies Venezuelan oil under preferential financing terms. The United States launched the Caribbean Energy Security Initiative (CESI) in 2014, with the goals of promoting a cleaner and more sustainable energy future in the Caribbean. The CESI includes a variety of initiatives to boost energy security and sustainable economic growth by attracting investment in a range of energy technologies through a focus on improved governance, increased access to finance, and enhanced coordination among energy donors, governments, and stakeholders. Many Caribbean countries are susceptible to extreme weather events such as tropical storms and hurricanes, which can significantly affect their economies and infrastructure. Recent scientific studies suggest that climate change may be increasing the intensity of such events. In September 2019, Hurricane Dorian caused widespread damage to the northwestern Bahamian islands of Grand Bahama and Abaco, with 70 confirmed deaths and many missing. The United States responded with nearly $34 million in humanitarian assistance, including almost $25 million provided through USAID. Prior to the hurricane, the State Department had launched a U.S.-Caribbean Resilience Partnership in April 2019, with the goal of increasing regional disaster response capacity and promoting resilience to natural disasters. In December 2019, USAID announced it was providing $10 million to improve local resilience to disasters in the Caribbean. Congressional Action: The 116 th Congress has continued to appropriate funds for Caribbean regional programs. Over the past two fiscal years, Congress has funded the CBSI at levels significantly higher than requested by the Trump Administration. For FY2019, Congress appropriated $58 million for the CBSI ($36.2 million was requested), in the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ). For FY2020, the Trump Administration requested $40.2 million for the CBSI, about a 30% drop from FY2019 appropriations. Ultimately, Congress appropriated not less than $60 million for the CBSI for FY2020 in the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ). For FY2021, the Administration is requesting $32 million for the CBSI, a cut of almost 47% from that appropriated for FY2020. Congress has also continued to provide funding for the CESI, appropriating $2 million in FY2019 ( P.L. 116-6 ) and $3 million in FY2020 ( P.L. 116-94 ). Regarding U.S. support for natural disasters, the report to the Department of State, Foreign Operations, and Related Programs appropriations bill, 2020â H.Rept. 116-78 to H.R. 2839 âdirected that bilateral economic assistance be made available to strengthen resilience to emergencies and disasters in the Caribbean. For additional information, see CRS In Focus IF10789, Caribbean Basin Security Initiative , by Mark P. Sullivan; CRS In Focus IF10666, The Bahamas: An Overview , by Mark P. Sullivan; CRS Insight IN11171, Bahamas: Response to Hurricane Dorian , by Rhoda Margesson and Mark P. Sullivan; CRS In Focus IF10407, Dominican Republic , by Clare Ribando Seelke; CRS In Focus IF11381, Guyana: An Overview , by Mark P. Sullivan; CRS In Focus IF10912, Jamaica , by Mark P. Sullivan; and CRS In Focus IF10914, Trinidad and Tobago , by Mark P. Sullivan. Cuba Political and economic developments in Cuba, a one-party authoritarian state with a poor human rights record, have been the subject of intense congressional concern since the Cuban revolution in 1959. Current Cuban President Miguel DÃaz-Canel succeeded RaÃºl Castro in April 2018, but Castro is expected to head Cuba's Communist Party until 2021. In February 2019, almost 87% of Cubans approved a new constitution in a national referendum. The changes include the addition of an appointed prime minister to oversee government operations, limits on the president's tenure (two five-year terms) and age (60, beginning first term), and market-oriented economic reforms, including the right to private property and the promotion of foreign investment. The new constitution, however, ensures the state sector's dominance over the economy and the Communist Party's predominant role. The Cuban economy has registered minimal growth in recent years; the EIU estimates that the economy grew 0.5% in 2019 but will contract 0.7% in 2020. For more than a decade, Cuba has implemented gradual market-oriented economic policy changes but has not taken enough action to foster sustainable economic growth. The economy also has been hard-hit by the reimposition of, and increase in, U.S. economic sanctions in 2019 that impede international financial transactions with Cuba, as well as by Venezuela's economic crisis that has limited Venezuela's support to Cuba. Cuban officials reported that 4.3 million tourists visited Cuba in 2019, down from 4.7 million in 2018; the decline in tourism has hurt Cuba's nascent private sector. Since the early 1960s, the centerpiece of U.S. policy toward Cuba has consisted of economic sanctions aimed at isolating the Cuban government. Congress has played an active role in shaping policy toward Cuba, including the enactment of legislation strengthening, and at times easing, U.S. sanctions. In 2014, the Obama Administration initiated a policy shift moving away from sanctions toward a policy of engagement. This shift included restoring diplomatic relations (July 2015), rescinding Cuba's designation as a state sponsor of international terrorism (May 2015), and increasing travel, commerce, and the flow of information to Cuba implemented through regulatory changes (2015-2016). President Trump unveiled a new policy toward Cuba in 2017, introducing new sanctions and rolling back some of the Obama Administration's efforts to normalize relations. By 2019, the Trump Administration had largely abandoned the previous Administration's policy of engagement by significantly increasing economic sanctions to pressure the Cuban government on its human rights record and its military and intelligence support of the NicolÃ¡s Maduro regime in Venezuela. The Administration has taken actions to allow lawsuits against those trafficking in property confiscated by the Cuban government, provided for in the 1996 LIBERTAD Act ( P.L. 104-114 ), and tighten restrictions on travel to Cuba, including terminating cruise ship travel from the United States and U.S. flights to and from Cuban cities other than Havana. Congressional Action: The 116 th Congress has continued to fund democracy assistance for Cuban human rights and democracy activists and U.S.-government sponsored broadcasting to Cuba. For FY2019, Congress appropriated $20 million for democracy programs and $29.1 million for Cuba broadcasting ( P.L. 116-6 , H.Rept. 116-9 ). For FY2020, Congress appropriated $20 million for democracy programs and $20.973 million for Cuba broadcasting ( P.L. 116-94 , H.R. 1865 , Division G). The measure also includes several reporting requirements on Cuba set forth in H.Rept. 116-78 and S.Rept. 116-126 . Congress is now considering the Administration's FY2021 request of $10 million for Cuba democracy programs (a 50% decline from that appropriated in FY2020) and $12.973 for Cuba broadcasting (a 38% decline from that appropriated in FY2020). Much of the debate over Cuba in Congress throughout the past 20 years has focused on U.S. sanctions. Several bills introduced in the 116 th Congress would ease or lift U.S. sanctions: H.R. 213 (baseball); S. 428 (trade); H.R. 1898 / S. 1447 (financing for U.S. agricultural exports); H.R. 2404 (overall embargo); and H.R. 3960 / S. 2303 (travel). H.R. 4884 would direct the Administration to reinstate the Cuban Family Reunification Parole Program, which has been in limbo since 2017. Several resolutions would express concerns regarding Cuba's foreign medical missions ( S.Res. 14 / H.Res. 136 ); U.S. fugitives from justice in Cuba (H.Res. 92/ S.Res. 232 ); religious and political freedom in Cuba ( S.Res. 215 ); and the release of human rights activist JosÃ© Daniel Ferrer and other members of the pro-democracy Patriotic Union of Cuba ( S.Res. 454 and H.Res. 774 ). In September 2019, the House Subcommittee on the Western Hemisphere, Civilian Security, and Trade (House Western Hemisphere Subcommittee) held a hearing on the human rights situation in Cuba (see Appendix ). For additional information, see CRS In Focus IF10045, Cuba: U.S. Policy Overview , by Mark P. Sullivan; and CRS Report R45657, Cuba: U.S. Policy in the 116th Congress , by Mark P. Sullivan. Haiti During the administration of President Jovenel MoÃ¯se, who began a five-year term in February 2017, Haiti has been experiencing growing political and social unrest, high inflation, and resurgent gang violence. The Haitian judiciary is conducting investigations into MoÃ¯se's possible involvement in money laundering, irregular loan arrangements, and embezzlement; the president denies these allegations. In mid-2018, MoÃ¯se decided to end oil subsidies, which, coupled with deteriorating economic conditions, sparked massive protests. Government instability has heightened since May 2019, when the Superior Court of Auditors delivered a report to the Haitian Senate alleging MoÃ¯se had embezzled millions of dollars. Mass demonstrations have continued, calling for an end to corruption, the provision of government services, and MoÃ¯se's resignation. MoÃ¯se has said it would be irresponsible of him to resign, and that he will not do so. He has called repeatedly for dialogue with the opposition. Haiti's elected officials have exacerbated the ongoing instability by not forming a government. The president, who is elected directly by popular elections, is head of state and appoints the prime minister, chosen from the majority party in the National Assembly. The prime minister serves as head of government. The first two prime ministers under MoÃ¯se resigned. The Haitian legislature did not confirm the president's subsequent two nominees for prime minister. Some legislators actively prevented a vote by absenting themselves to prevent a quorum being met or by other, sometimes violent, tactics. Nevertheless, a legislative motion to impeach the president did not pass. Because the legislature also did not pass an elections law, parliamentary elections scheduled for October 2019 have been postponed indefinitely. MoÃ¯se is now ruling by decree. As of January 13, 2020, the terms of the entire lower Chamber of Deputies and two-thirds of the Senate expired, as did the terms of all local government posts, without newly elected officials to take their place. Currently, there is no functioning legislature. When the legislature's terms expired in January 2015 because the government had not held elections, then-President Michel Martelly ruled by decree for over a year, outside of constitutional norms. On March 2, 2020, President MoÃ¯se appointed a new prime minister, Joseph Jouthe, by decree. Since January 2020, the U.N., the OAS, and the Vatican have been facilitating a dialogue among the government, opposition, civil society, and private sector to establish a functioning government, develop a plan for reform, create a constitutional revision process, and set an electoral calendar. The Trump Administration supports the efforts to break the political impasse, but states that "while constitutional reforms are necessary and welcome, they must not become a pretext to delay elections." Haiti has received high levels of U.S. assistance for many years given its proximity to the United States and its status as the poorest country in the hemisphere. In recent years, it was the second-largest recipient of U.S. aid in the region, after Colombia. Since a peak in 2010, the year a massive earthquake hit the country, aid to Haiti has been declining steadily. Since 2014, a prolonged drought and a hurricane have severely affected Haiti's food supply. Haiti continues to struggle against a cholera epidemic inadvertently introduced by U.N. peacekeepers in 2010. The U.N. has had a continuous presence in Haiti since 2004, recently shifting from peacekeeping missions to a political office, and authorized its Integrated Office in Haiti for an initial one-year period beginning in October 2019. The office's mandate is to protect and promote human rights and to advise the government of Haiti on strengthening political stability and good governance through support for an inclusive inter-Haitian national dialogue. With the support of U.N. forces and U.S. and other international assistance, the Haitian National Police (HNP) force has become increasingly professional and has taken on responsibility for domestic security. New police commissariats have given more Haitians access to security services, but with 14,000-15,000 officers, the HNP remains below international standards for the size of the country's population. It is also underfunded. According to the U.N., the HNP has committed human rights abuses, including extrajudicial killings. Congressional Action : The Trump Administration's FY2020 request for aid for Haiti totaled $145.5 million, a 25% reduction from the estimated $193.8 million provided to Haiti in FY2019. The Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ) contains several provisions related to Haiti, including that aid may be provided to Haiti only through the regular notification procedures. Under the act, Economic Support Fund assistance for Haiti may not be made available for assistance to the Haitian central government unless the Secretary of State certifies and reports to the Committees on Appropriations that the government is taking effective steps to strengthen the rule of law, combat corruption, increase government revenues, and resolve commercial disputes. The act provides budget authority for $51 million in Development Assistance, including $8.5 million for reforestation; it also provides $10 million in International Narcotics Control and Law Enforcement funds for prison assistance, prioritizing improvements to meet basic sanitation, medical, nutritional, and safety needs at Haiti's National Penitentiary. The measure also prohibits the provision of appropriated funds for assistance to Haiti's armed forces. The House Western Hemisphere Subcommittee held a hearing on U.S. policy toward Haiti in December 2019 (see Appendix ). Congress has begun consideration of the Administration's FY2021 foreign aid request for Haiti. The Administration requested $128.2 million, almost a 34% cut from the amount appropriated by Congress in FY2019. For background, see CRS Report R45034, Haiti's Political and Economic Conditions , by Maureen Taft-Morales. Mexico and Central America Mexico Mexico and the United States share a nearly 2,000-mile border and strong cultural, familial, and historical ties. Economically, the United States and Mexico have grown interdependent since NAFTA entered into force in 1994. The countries have also forged close security ties, as security conditions in Mexico affect U.S. national security and U.S. citizens living in or traveling to Mexico, particularly along the U.S.-Mexican border. On December 1, 2018, AndrÃ©s Manuel LÃ³pez Obrador, the populist leader of the National Regeneration Movement (MORENA) party, which he created in 2014, took office for a six-year term. LÃ³pez Obrador won 53% of the July 2018 vote, marking a shift away from Mexico's traditional parties, the Institutional Revolutionary Party (PRI) and the National Action Party (PAN). Elected on an anti-corruption platform, LÃ³pez Obrador is the first Mexican president in over two decades to enjoy majorities in both chambers of Congress. In addition to combating corruption, he pledged to build infrastructure in southern Mexico, revive the poor-performing state oil company, address citizen security through social programs, and adopt a foreign policy based on the principle of nonintervention. Given fiscal constraints, observers question whether his goals are attainable. Thirteen months into his term, President LÃ³pez Obrador enjoys high approval ratings (60% in January 2020), even though Mexico experienced record homicides and 0% economic growth in 2019. Mexicans have praised LÃ³pez Obrador's backing of new social programs, minimum wage increases, and willingness to tackle problems, such as oil theft by criminal groups. His decision to cut his own salary and public sector salaries generally has prompted resignations among experienced bureaucrats but has been popular with his constituency. Critics also have expressed concerns that LÃ³pez Obrador has centralized power and weakened institutions, relied too much on his own counsel, and dismissed journalists, regulatory agencies, and others critical of his policies. Despite some predictions to the contrary, U.S.-Mexico relations under the LÃ³pez Obrador government have thus far remained friendly. Tensions have emerged over several key issues, including trade disputes and tariffs, immigration and border security issues, U.S. citizens killed in Mexico (including the November 2019 massacre of an extended family of U.S.-Mexican citizens), and Mexico's decision to remain neutral regarding the crisis in Venezuela. The Mexican government has condemned anti-immigrant rhetoric and actions in the United States, including the August 2019 mass shooting in El Paso, TX, that resulted in the deaths of at least seven Mexican citizens. Security cooperation under the MÃ©rida Initiative has continued, including efforts to address the production and trafficking of opioids and methamphetamine, but the Trump Administration has pushed Mexico to improve its antidrug efforts and security policies. During LÃ³pez Obrador's administration, the Mexican government has accommodated most of the Trump Administration's border and asylum policy changes that have shifted the burden of interdicting migrants and offering asylum to Mexico. After enacting labor reforms and raising wages, the LÃ³pez Obrador administration achieved a significant foreign policy goal: U.S. congressional approval of implementing legislation for the proposed USMCA to replace NAFTA. (See " Trade Policy ," above.) Congressional Action: The 116 th Congress closely followed the Trump Administration's efforts to renegotiate NAFTA and recommended modifications to the proposed USMCA (on labor, the environment, and dispute settlement, among other topics) that led to the three countries signing an amendment to the agreement on December 10, 2019. The House approved the implementing legislation for the proposed USMCA in December 2019, and the Senate followed suit in January 16, 2020 ( P.L. 116-113 ). Both houses have taken action on H.R. 133 , the United States-Mexico Economic Partnership Act ( H.R. 133 ), which directs the Secretary of State to enhance economic cooperation and educational and professional exchanges with Mexico; the House approved the measure in January 2019, and the Senate approved an amended version in January 2020. The FY2020 NDAA ( P.L. 116-92 ) requires a classified assessment of drug trafficking, human trafficking, and alien smuggling in Mexico. Regarding foreign aid, in FY2019, Congress provided some $162 million for Mexico in P.L. 116-6 , with much of that designated for the MÃ©rida Initiative. Those increased resources aimed to help address the flow of U.S.-bound opioids. For FY2020âtotal aid amounts are not yet availableâCongress provided $150 million for accounts that fund the MÃ©rida Initiative in P.L. 116-94 (roughly $73 million above the Administration's budget request). For FY2021, the Administration has requested $63.8 million for Mexico, a decline of almost 61% compared to that provided in FY2019. In the wake of recent high profile massacres in Mexico, congressional concerns about the efficacy of U.S.-Mexican security cooperation and calls for oversight have increased as Congress begins consideration of the FY2021 foreign aid request. For additional information, see CRS Report R42917, Mexico: Background and U.S. Relations , by Clare Ribando Seelke; CRS Report RL32934, U.S.-Mexico Economic Relations: Trends, Issues, and Implications , by M. Angeles Villarreal; CRS In Focus IF10997, U.S.-Mexico-Canada (USMCA) Trade Agreement , by M. Angeles Villarreal and Ian F. Fergusson; CRS In Focus IF10578, Mexico: Evolution of the MÃ©rida Initiative, 2007-2020 , by Clare Ribando Seelke; CRS Report R41576, Mexico: Organized Crime and Drug Trafficking Organizations , by June S. Beittel; CRS In Focus IF10215, Mexico's Immigration Control Efforts , by Clare Ribando Seelke; and CRS In Focus IF10400, Transnational Crime Issues: Heroin Production, Fentanyl Trafficking, and U.S.-Mexico Security Cooperation , by Clare Ribando Seelke and Liana W. Rosen. Central America's Northern Triangle The Northern Triangle region of Central America (see Figure 3 ) has received renewed attention from U.S. policymakers in recent years, as it has become a major transit corridor for illicit drugs and has surpassed Mexico as the largest source of irregular migration to the United States. In FY2019, U.S. authorities apprehended nearly 608,000 unauthorized migrants from El Salvador, Guatemala, and Honduras at the southwest border; 81% of those apprehended were families or unaccompanied minors, many of whom were seeking asylum. These narcotics and migrant flows are the latest symptoms of deep-rooted challenges in the region, including widespread insecurity, fragile political and judicial systems, and high levels of poverty and unemployment. The Obama Administration determined it was in the national security interests of the United States to work with Central American nations to improve security, strengthen governance, and promote prosperity in the region. Accordingly, the Obama Administration launched a new, whole-of-government U.S. Strategy for Engagement in Central America and requested a significant increase in foreign assistance for the region to support the strategy's implementation. Congress appropriated more than $2 billion of aid for Central America between FY2016 and FY2018, allocating most of the funds to El Salvador, Guatemala, and Honduras. Congress required a portion of the aid to be withheld, however, until the Northern Triangle governments took steps to improve border security, combat corruption, protect human rights, and address other congressional concerns. The Trump Administration initially maintained the U.S. Strategy for Engagement in Central America, but suspended most aid for the Northern Triangle in March 2019 due to the continued northward flow of migrants and asylum seekers from the region. The aid suspension forced U.S. agencies to begin closing down projects and canceling planned activities. Although Administration officials acknowledged that U.S. foreign aid programs had been "producing the results [they] were intended to produce" with regard to security, governance, and economic development, they argued that, "the only metric that matters is the question of what the migration situation looks like on the southern border." Over the course of 2019, the Trump Administration reprogrammed approximately $405 million of aid appropriated for the Northern Triangle to other foreign policy priorities while negotiating a series of "safe third country" agreements (also known as asylum cooperative agreements) with El Salvador, Guatemala, and Honduras. Under the agreement with Guatemala, the United States has begun sending some individuals to Guatemala to apply for protection there rather than in the United States; similar agreements with El Salvador and Honduras are awaiting implementation. The Trump Administration has released some previously suspended assistance, primarily for programs to counter transnational crime and improve border security, as the new agreements have gone into effect. For FY2021, the Administration maintains that it is requesting almost $377 million for Central America if countries in the region continue to take action to stem unauthorized migration. The Administration's Congressional Budget Justification, however, does not specify request amounts for the three Northern Triangle countries or the foreign affairs accounts from which the assistance would come. Congressional Action: The 116 th Congress has demonstrated continued support for the U.S. Strategy for Engagement in Central America but has reduced annual funding for the initiative. The Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provided an estimated $527.6 million for the Central America strategy, which is about $92 million more than the Trump Administration requested. The Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ) provides $519.9 million for the initiative, which is about $75 million more than the Trump Administration requested. Both appropriations measures maintained conditions on U.S. assistance to the central governments of the Northern Triangle. Congress has also sought to improve the effectiveness of the Central America strategy. The Senate Foreign Relations Committee, House Foreign Affairs Committee, and House Western Hemisphere Subcommittee each held oversight hearings to assess U.S. policy and foreign assistance in Central America (see Appendix ). The United States-Northern Triangle Enhanced Engagement Act ( H.R. 2615 ), passed by the House in July 2019, would require the State Department, in coordination with other agencies, to develop five-year strategies to support inclusive economic growth, combat corruption, strengthen democratic institutions, and improve security conditions in the Northern Triangle. The measure would also authorize $577 million for the Central America strategy in FY2020, including "not less than" $490 million for the Northern Triangle. Other measures introduced in the 116 th Congress that would authorize certain types of assistance and guide U.S. policy in the region include the Central America Reform and Enforcement Act ( S. 1445 ), the Northern Triangle and Border Stabilization Act ( H.R. 3524 ), and the Central American Women and Children Protection Act of 2019 ( H.R. 2836 / S. 1781 ). Congress has continued to express concerns about corruption and human rights abuses in the region. P.L. 116-94 provides $45 million for offices of attorneys general and other entities and activities to combat corruption and impunity in Central America. Congress allocated $3.5 million of those funds to the OAS-backed Mission to Support the Fight against Corruption and Impunity in Honduras (MACCIH); Honduran President Juan Orlando HernÃ¡ndez allowed the MACCIH's mandate to expire in January 2020, ignoring repeated calls for the mission's renewal from Members of Congress and the Trump Administration. P.L. 116-94 also includes $20 million for combating sexual and gender-based violence in the region, as well as a total of $3 million for the offices of the U.N. High Commissioner for Human Rights in Guatemala and Honduras and El Salvador's National Commission for the Search of Persons Disappeared in the Context of the Armed Conflict. Several other legislative measures also include provisions intended to address corruption and human rights abuses in the Northern Triangle. The FY2020 NDAA ( P.L. 116-92 ) requires DOD to certify, prior to the transfer of any vehicles to the Guatemalan government, that the government has made a credible commitment to use such equipment only as intended. The act also requires DOD to enter into an agreement with an independent institution to conduct an analysis of the human rights situation in Honduras. Other measures introduced in the 116 th Congress addressing corruption and human rights include the Guatemala Rule of Law Accountability Act ( H.R. 1630 / S. 716 ) and the Berta Caceres Human Rights in Honduras Act ( H.R. 1945 ). For additional information, see CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for Congress , by Peter J. Meyer; CRS In Focus IF10371, U.S. Strategy for Engagement in Central America: An Overview , by Peter J. Meyer; CRS In Focus IF11151, Central American Migration: Root Causes and U.S. Policy , by Peter J. Meyer and Maureen Taft-Morales; CRS Report R43616, El Salvador: Background and U.S. Relations , by Clare Ribando Seelke; CRS Report R42580, Guatemala: Political and Socioeconomic Conditions and U.S. Relations , by Maureen Taft-Morales; CRS Report RL34027, Honduras: Background and U.S. Relations , by Peter J. Meyer; and CRS Insight IN11211, Corruption in Honduras: End of the Mission to Support the Fight Against Corruption and Impunity in Honduras (MACCIH) , by Peter J. Meyer. Nicaragua President Daniel Ortega, aged 74 in early 2020, has been suppressing popular unrest in Nicaragua in a manner reminiscent of Anastasio Somoza, the dictator he helped overthrow in 1979 as a leader of the leftist Sandinista National Liberation Front (FSLN). Ortega served as president from 1985 to 1990, during which time the United States backed right-wing insurgents known as contras in an attempt to overthrow the Sandinista government. In the early 1990s, Nicaragua began to establish democratic governance. Democratic space has narrowed as the FSLN and Ortega have consolidated control over the country's institutions, including while Ortega served as an opposition leader in the legislature from 1990 until 2006. Ortega reclaimed the presidency in 2007 and has served as president for the past 13 years. Until recently, for many Nicaraguans, Ortega's populist social welfare programs that improved their standard of living outweighed his authoritarian tendencies and self-enrichment. Similarly, for many in the international community, the relative stability in Nicaragua outweighed Ortega's antidemocratic actions. Ortega's long-term strategy to retain control of the government began to unravel in 2018 when his proposal to reduce social security benefits triggered protests led by a wide range of Nicaraguans. The government's repressive response led to an estimated 325-600 extrajudicial killings, torture, political imprisonment, suppression of the press, and thousands of citizens going into exile. The government says it was defending itself from coup attempts. The crisis also undermined economic growth in the hemisphere's second poorest country. The Nicaraguan economy contracted by 5.1% in 2019, and some economists estimate the economy will contract a further 1.5% in 2020. The international community has sought to hold the Ortega government accountable for human rights abuses and facilitate the reestablishment of democracy in Nicaragua. In July 2018, an Inter-American Commission on Human Rights team concluded that the Nicaraguan security forces' actions could be considered crimes against humanity. The OAS High Level Commission on Nicaragua concluded in November 2019 that the government's actions "make the democratic functioning of the country impossible," in violation of Nicaragua's obligations under Article 1 of the Inter-American Democratic Charter. The Nicaragua Human Rights and Anticorruption Act of 2018 ( P.L. 115-335 ), effectively blocks access to new multilateral lending to Nicaragua. The Trump Administration has imposed sanctions against 16 high-level officials, including Vice President Rosario Murillo. On March 5, 2020, the Trump Administration imposed sanctions against the Nicaraguan National Police for its role in serious human rights abuses. Dialogue between the government and the opposition collapsed in 2019 and has not resumed. Congressional Action: The 116 th Congress remains concerned about the erosion of democracy and human rights abuses in Nicaragua. The Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ) appropriates $10 million for foreign assistance programs to promote democracy and the rule of law in Nicaragua. For FY2021, the Administration has requested $10 million for democracy and civil society programs in Nicaragua. In December 2019, the House Foreign Affairs Committee ordered H.Res. 754 to be reported favorably by unanimous consent to the full House, and the full House approved the measure on March 9, 2020. The resolution expresses the sense of the House of Representatives that the United States should continue to support the people of Nicaragua in their peaceful efforts to promote democracy and human rights and to use the tools under U.S. law to increase political and financial pressure on the Ortega government. In June 2019, the House Western Hemisphere Subcommittee held a hearing on the Nicaraguan government's repression of dissent (see Appendix ). South America Argentina Current President Alberto FernÃ¡ndez of the center-left Peronist Frente de Todos (FdT, Front for All) ticket won the October 2019 presidential election and was inaugurated to a four-year term in December 2019. He defeated incumbent President Mauricio Macri of the center-right Juntos por el Cambio (JC, Together for Change) coalition by a solid margin of 48.1% to 40.4% but by significantly less than the 15 to 20 percentage points predicted by polls. The election also returned to government former leftist Peronist President Cristina FernÃ¡ndez de Kirchner (2007-2015), who ran on the FdT ticket as vice president. Argentina's economic decline in 2018 and 2019, with high inflation and increasing poverty, was the major factor in Macri's electoral defeat. Macri had ushered in economic policy changes in 2016-2017 that lifted currency controls, reduced or eliminated agricultural export taxes, and reduced electricity, water, and heating subsidies. In 2018, as the economy faced pressure from a severe drought and large budget deficits, the IMF supported the government with a $57 billion program. Macri's economic reforms and IMF support were not enough to stem Argentina's economic decline, and the government reimposed currency controls and took other measures to stabilize the economy. President FernÃ¡ndez faces an economy in crisis, with a recession that is expected to extend into 2020, high poverty, and a high level of unsustainable public debt requiring restructuring. He has pledged to restructure Argentina's debt by the end of March 2020, and he has opened talks with bondholders and other creditors, including the IMF. FernÃ¡ndez also has rolled out several measures, including a food program and price controls on basic goods, aimed at helping low-income Argentines cope with inflation and increased poverty. U.S. relations with Argentina were strong under the Macri government, marked by increasing engagement on a range of bilateral, regional, and global issues. After Argentina's 2019 presidential race, Secretary of State Mike Pompeo said that the United States looked forward to working with the FernÃ¡ndez administration to promote regional security, prosperity, and the rule of law. One point of contention in relations could be Argentina's stance on Venezuela. Under Macri, Argentina was strongly critical of the antidemocratic actions of the Maduro regime. The country joined with other regional countries in 2017 to form the Lima Group seeking a democratic resolution, and in 2019, recognized the head of Venezuela's National Assembly, Juan GuaidÃ³, as the country's interim president. In contrast, the FernÃ¡ndez government does not recognize GuaidÃ³ as Venezuela's interim president, although it criticized Maduro's January 2020 actions preventing GuaidÃ³ from being elected to a second term as head of the legislature. Congressional Action: Argentina has not traditionally received much U.S. foreign aid because of its relatively high per capita income level, but for each of FY2018-FY2020, Congress has appropriated $2.5 million in International Narcotics Control and Law Enforcement assistance to support Argentina's counterterrorism, counternarcotics, and law enforcement capabilities. Congress has expressed concern over the years about progress in bringing to justice those responsible for the July 1994 bombing of the Argentine-Israeli Mutual Association (AMIA) in Buenos Aires that killed 85 people. Both Iran and Hezbollah (the radical Lebanon-based Islamic group) allegedly are linked to the attack, as well as to the 1992 bombing of the Israeli Embassy in Buenos Aires that killed 29 people. As the 25 th anniversary of the AMIA bombing approached in July 2019, the House approved H.Res. 441, reiterating condemnation of the attack and expressing strong support for accountability; the Senate followed suit in October 2019 when it approved S.Res. 277 . For additional information, see CRS In Focus IF10932, Argentina: An Overview , by Mark P. Sullivan; CRS In Focus IF10991, Argentina's Economic Crisis , by Rebecca M. Nelson; and CRS Insight IN11184, Argentina's 2019 Elections , by Mark P. Sullivan and Angel Carrasquillo Benoit. Bolivia Bolivia experienced relative stability and prosperity from 2006 to 2019, but as governance standards weakened, relations with the United States deteriorated under populist President Evo Morales. Morales was the country's first indigenous president and leader of the Movement Toward Socialism (MAS) party. On November 10, 2019, President Morales resigned and sought protection abroad (first in Mexico and then in Argentina) after weeks of protests alleging fraud in the October 20, 2019, election in which he had sought a fourth term. After three individuals in line to succeed Morales also resigned, opposition Senator Jeanine AÃ±ez, formerly second vice president of the senate, declared herself senate president and then interim president on November 12. Bolivia's constitutional court recognized her succession. In late November, the MAS-led Congress unanimously approved an electoral law to annul the October elections and select a new electoral tribunal. On January 3, 2020, the reconstituted tribunal scheduled new presidential and legislative elections for May 3, 2020. A second-round presidential contest would likely occur, if needed, on June 14. The situation in Bolivia remains volatile. On January 24, 2020, Interim President AÃ±ez announced her intention to run in the May presidential election, abandoning her earlier pledge to preside over a caretaker government focused on convening credible elections. Even before she announced her candidacy, observers had criticized AÃ±ez for exceeding her mandate by reversing several MAS foreign policy positions and bringing charges of sedition against Morales and other former MAS officials. The Trump Administration has sought to bolster ties with the AÃ±ez government while expressing support for "free, fair, transparent, and inclusive elections." U.S. officials have praised the AÃ±ez government for expelling Cuban officials and recognizing Venezuela's GuaidÃ³ government. In January 2020, President Trump waived restrictions on U.S. assistance to Bolivia, and a multiagency team traveled to the country to assess what type of election support U.S. agencies might offer the interim government. Congressional Action: Members of the 116 th Congress have expressed concerns about the situation in Bolivia. S.Res. 35 , approved in April 2019, expressed concern over Morales's efforts to circumvent term limits in Bolivia and called on his government to allow electoral bodies to administer the October 2019 elections in accordance with international norms. Although some Members condemned the ouster of Morales as a "coup," most have focused on ensuring a democratic transition. In January 2020, the Senate agreed by unanimous consent to S.Res. 447 , expressing concerns about election irregularities and violence in Bolivia, urging the Bolivian government to protect human rights and promptly convene new elections, and encouraging the U.S. State Department and the OAS to help ensure the integrity of the electoral process. For more information, see CRS Insight IN11198, Bolivia Postpones May Elections Amidst COVID-19 Outbreak , by Clare Ribando Seelke; and CRS In Focus IF11325, Bolivia: An Overview , by Clare Ribando Seelke. Brazil Occupying almost half of South America, Brazil is the fifth-largest and the fifth-most populous country in the world. Given its size and tremendous natural resources, Brazil has long had the potential to become a world power. Its rise to prominence has been hindered, however, by uneven economic performance and political instability. After experiencing a period of strong economic growth and increased international influence during the first decade of the 21 st century, Brazil has struggled with a series of domestic crises in recent years. The economy fell into its worst recession on record in 2014; the recovery since 2017 has been slow, with annual economic growth averaging 1% and the unemployment rate stuck above 11%. The political environment has also deteriorated as a sprawling corruption investigation underway since 2014 has implicated politicians from across the political spectrum. Those combined crises contributed to the controversial impeachment and removal from office of President Dilma Rousseff (2011-2016) and discredited much of the country's political class, paving the way for right-wing populist Jair Bolsonaro to win the presidency in October 2018. Since taking office in January 2019, President Bolsonaro has maintained his political base's support by taking socially conservative stands on cultural issues and proposing hardline security policies to reduce crime and violence. He has also begun enacting economic and regulatory reforms favored by international investors and Brazilian businesses. His confrontational approach to governance has alienated many potential allies, however, hindering the enactment of his policy agenda. Many Brazilians and international observers are concerned that Bolsonaro's environmental policies are contributing to increased deforestation in the Brazilian Amazon, and that his frequent verbal attacks against the press, nongovernmental organizations (NGOs), and other government branches are weakening democracy. The Bolsonaro administration's foreign policy has focused on forging closer ties to the United States. Brazil has partially abandoned its traditional commitment to autonomy in foreign affairs as Bolsonaro has supported the Trump Administration on a variety of issues, including the crisis in Venezuela, the U.S. trade embargo against Cuba, and the U.S. killing of Iranian military commander Qasem Soleimani. On other issues, such as commercial ties with China, Bolsonaro has adopted a more pragmatic approach intended to ensure continued access to major export markets. In 2019, President Trump designated Brazil as a major non-NATO ally for the purposes of the Arms Export Control Act (22 U.S.C. 2751 et seq.), offering Brazil privileged access to the U.S. defense industry and increased joint military exchanges, exercises, and training. President Trump also signed several agreements with President Bolsonaro intended to strengthen bilateral commercial ties. Some Brazilian analysts have questioned the benefits of partnership with the United States due to the Trump Administration's decision to maintain import restrictions on Brazilian beef until February 2020, and the Administration's threats to impose tariffs on other key Brazilian products, such as steel. Congressional Action: The 116 th Congress has continued long-standing U.S. support for environmental conservation efforts in Brazil. In September 2019, the House Western Hemisphere Subcommittee held an oversight hearing on preserving the Amazon rainforest that focused on the surge of fires and deforestation in the region (see Appendix ). Some Members of Congress also have introduced legislative proposals to address the situation. A Senate resolution ( S.Res. 337 ) would express concern about fires and illegal deforestation in the Amazon, call on the Brazilian government to strengthen environmental enforcement, and support continued U.S. assistance to the Brazilian government and NGOs. The Act for the Amazon Act ( H.R. 4263 ) would take a more punitive approach. The act would ban the importation of certain fossil fuels and agricultural products from Brazil, prohibit certain types of military-to-military engagement and security assistance to Brazil, and forbid U.S. agencies from entering into free trade negotiations with Brazil. Congress ultimately appropriated $15 million for foreign assistance programs in the Brazilian Amazon, including $5 million to address fires in the region, in the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ). That amount is $4 million more than Congress appropriated for environmental programs in the Brazilian Amazon in the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ). Congress has also expressed concerns about the state of democracy and human rights in Brazil. A provision of the FY2020 NDAA ( P.L. 116-92 ) directs the Secretary of Defense, in coordination with the Secretary of State, to submit a report to Congress regarding the human rights climate in Brazil and U.S.-Brazilian security cooperation. Some Members have also called for changes to U.S. policy. A resolution introduced in September 2019 expressing profound concerns about threats to human rights, the rule of law, democracy, and the environment in Brazil (H.Res. 594) would call for the United States to rescind Brazil's designation as a major non-NATO ally and suspend assistance to Brazilian security forces, among other actions. For additional information, see CRS Report R46236, Brazil: Background and U.S. Relations , by Peter J. Meyer; and CRS In Focus IF11306, Fire and Deforestation in the Brazilian Amazon , by Pervaze A. Sheikh et al. Colombia Colombia is a key U.S. ally in Latin America. Because of the country's prominence in illegal drug production, the United States and Colombia have forged a close relationship over the past two decades to respond to mutual challenges. Focused initially on counternarcotics, and later on counterterrorism, a program called Plan Colombia laid the foundation for a security partnership between the two countries. Plan Colombia and its successor strategies ultimately became the basis for a 17-year U.S.-Colombian bilateral effort. President Juan Manuel Santos (2010-2018) made concluding a peace accord with the FARCâthe country's largest leftist guerrilla organizationâhis government's primary focus. Following four years of formal peace negotiations, Colombia's Congress ratified the FARC-government peace accord in November 2016. During a U.N.-monitored demobilization effort in 2017, approximately 13,200 FARC (armed combatants and militia members) disarmed, demobilized, and began the process of reintegration. IvÃ¡n Duque, a former senator from the conservative Democratic Center party, who won the 2018 presidential election, was inaugurated to a four-year presidential term in August 2018. Duque campaigned as a critic of the peace accord. His approval ratings slipped early in his presidency, and his government faced weeks of protests and strikes in late 2019 focused on several administration policies, including what many Colombians view as a halting approach to peace accord implementation. Colombia continues to face major challenges, including a sharp increase of coca cultivation and cocaine production, vulnerability to a mass migration of Venezuelans fleeing the authoritarian government of Maduro, a spike in attacks on human rights defenders and social activists, and financial and other challenges enacting the ambitious peace accord commitments while controlling crime and violence by armed groups seeking to replace the FARC. President Duque has not succeeded in building a legislative coalition with other parties to implement major legislative reforms. In August 2019, a FARC splinter faction, which included the former lead FARC negotiator of the peace accord, announced its return to arms. In response, neighboring Venezuela appears to be sheltering and perhaps collaborating with FARC dissidents and guerrilla fighters of the National Liberation Army (ELN)âformerly Colombia's second largest insurgency, now its largest. The ELN is also a U.S.-designated foreign terrorist organization. Some 3,000 former FARC fighters are estimated to have returned to armed struggle, and some have indicated they will cooperate with the ELN. The majority of demobilized FARC members remain committed to the peace process, despite numerous risks; the U.N. Verification Mission in Colombia reported in December 2019 that 77 demobilized FARC members were killed in 2019, with 173 in total killed since 2016. In 2017, Colombia cultivated a record 209,000 hectares of coca, amounting to a potential 921 metric tons of pure cocaine. In 2018, drug yields declined marginally, according to U.S. estimates, although the U.N. estimates for cocaine production were considerably higher. In meetings between President Duque and Secretary of State Pompeo in 2019, the governments reaffirmed a March 2018 commitment to work together to lower coca crop expansion and cocaine production by 50% by 2023. The U.S. government depends on the Colombian government to interdict much of the cocaine leaving the country, as it is mainly destined for the United States. President Duque campaigned on returning to forced aerial eradication (or spraying of coca crops) with the herbicide glyphosate. This strategy has been a centralâalbeit controversialâfeature of U.S.-Colombian counterdrug cooperation for more than two decades. In late December 2019, President Duque announced that spraying was likely to restart in early 2020. Several analysts maintain that forced manual and aerial eradication of coca have not been successful strategies in Colombia, and they consider voluntary eradication and alternative development programs made viable by a gradually more present central government in rural communities as critical to consolidating peace. The United States remains Colombia's top trading partner. Colombia's economy, which grew 2.6% in 2018, is estimated to have grown by 3.1% in 2019, with foreign direct investment on the rise. Projections are that Colombia's growth rate will remain at 3% and above over the next few years, which makes it one of the strongest major economies in the region. Congressional Action: At the close of 2019, 1.6 million Venezuelans were residing in Colombia. This number could grow in 2020 to more than 3 million migrants depending how the political crisis in neighboring Venezuela unfolds. Since FY2017, the State Department has allocated more than $400 million to support countries receiving Venezuelan migrants, with over halfâalmost $215 million in U.S. humanitarian and development assistanceâfor Colombia, as the most severely affected country. (See " Venezuela ," below.) Congress appropriated more than $10 billion for Plan Colombia and its follow-on programs between FY2000 and FY2016, about 20% of which was funded through DOD. Subsequently, Congress provided $1.2 billion annually in additional assistance for Colombia from FY2017 through FY2019, including assistance funded through DOD. For FY2020, Congress provided $448 million in the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ) for State Department and USAID-funded programs in Colombia. For FY2021, the Administration has requested $412.9 million for Colombia, about a 2% decline from that appropriated in FY2019. For additional information, see CRS Report R43813, Colombia: Background and U.S. Relations , by June S. Beittel; CRS Report R44779, Colombia's Changing Approach to Drug Policy , by June S. Beittel and Liana W. Rosen; CRS Report RL34470, The U.S.-Colombia Free Trade Agreement: Background and Issues , by M. Angeles Villarreal and Edward Y. Gracia; and CRS Report R42982, Colombia's Peace Process Through 2016 , by June S. Beittel. Venezuela Venezuela remains in a deep crisis under the authoritarian rule of NicolÃ¡s Maduro of the United Socialist Party of Venezuela. Maduro, narrowly elected in 2013 after the death of Hugo ChÃ¡vez (president, 1999-2013), began a second term on January 10, 2019, that most Venezuelans and much of the international community consider illegitimate. Since January 2019, Juan GuaidÃ³, president of Venezuela's democratically elected, opposition-controlled National Assembly, has sought to form a transition government to serve until internationally observed elections can be held. The United States and 57 other countries recognize GuaidÃ³ as interim president, but he has been unable to wrest Maduro from power, and he has faced increased danger since returning home from a January-February 2020 international tour, which included a meeting with President Trump. Some observers believe that National Assembly elections due this year might start an electoral path out of the current stalemate. Maduro has used repression to quash dissent; rewarded allies with income earned from illegal gold mining, drug trafficking, and other illicit activities; relied on support from Russia to avoid U.S. sanctions; and had his supporters use violence to prevent the National Assembly from convening. Venezuela's economy has collapsed. The country is plagued by hyperinflation, severe shortages of food and medicine, and electricity blackouts that have worsened an already dire humanitarian crisis. In April 2019, U.N. officials estimated that some 90% of Venezuelans are living in poverty. Many observers cite economic mismanagement and corruption as the key factors responsible for the economic crisis, but also acknowledge that economic sanctions have contributed to Venezuela's economic decline. U.N. agencies estimate that 4.8 million Venezuelans had fled the country as of December 2019, primarily to Latin American and Caribbean countries. U.S. Policy. As the situation in Venezuela has deteriorated under Maduro, the Trump Administration has imposed targeted sanctions on Venezuelan officials responsible for antidemocratic actions, human rights violations, and corruption, as well as increasingly strong financial sanctions against the Maduro government and the state oil company, its main source of income. Since recognizing GuaidÃ³ as interim president in January 2019, the Administration has increased sanctions on the Maduro government and encouraged other countries to do so. The EU, Canada, and 11 Western Hemisphere countries who are states parties to the Inter-American Treaty of Reciprocal Assistance (Rio Treaty) have imposed targeted sanctions and travel bans on Maduro officials, but not broad economic sanctions as the United States has done. Those countries similarly oppose military intervention in Venezuela, a policy option that the Trump Administration reportedly considered early in 2019 but has not raised since. In January 2020, the Administration issued a statement backing a political solution that leads to the convening of free and fair presidential and parliamentary elections this year. International efforts to broker a political solution have not produced results. Although the U.S. statement encourages a focus on convening elections (as did the 2019 Norway-led talks between the GuaidÃ³ and Maduro teams), it also says that those elections should be overseen by a "negotiated transitional government," a requirement that Maduro may not accept. Some observers maintain that any negotiations between Maduro and GuaidÃ³ would need the backing of the United States and Russia in order to succeed. Since FY2017, the Administration has provided $472 million in humanitarian and development assistance, including $56 million for humanitarian relief activities in Venezuela, and the remainder to support regional countries sheltering most of the 4.8 million Venezuelans who have fled the crisis. The U.S. military has twice deployed a naval ship hospital to the region. In October 2019, the Administration signed an agreement with the GuaidÃ³ government to provide $100 million in development assistance, including direct support for the interim government. Congressional Action: Congress has supported the Administration's efforts to restore democracy in Venezuela and provide humanitarian assistance to Venezuelans, although some Members have expressed concerns about the humanitarian effects of sanctions and about potential unauthorized use of the U.S. military in Venezuela. In February 2019, Congress enacted the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ), which provided $17.5 million for democracy programs in Venezuela. In December 2019, Congress enacted the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ), which provided $30 million for democracy and human rights programs in Venezuela. The measure also incorporates provisions from S. 1025 , the VERDAD Act, authorizing $400 million in FY2020 humanitarian aid to Venezuela, codifying several types of sanctions on the Maduro government, and authorizing $17.5 million to support elections and a democratic transition in Venezuela. P.L. 116-94 also incorporates languages from several House-approved bills including H.R. 920 , restricting the export of defense articles to Venezuela; and H.R. 1477 , requiring a strategy to counter Russian influence in Venezuela. Congress has begun consideration of the Administration's $205 million FY2021 foreign aid request for Venezuela, an 811% increase over that appropriated in FY2019. According to the Administration, the assistance would provide support to democratic institutions following a potential political transition and would address the urgent health needs of the Venezuelan people. In July 2019, the House passed H.R. 549 , which would designate Venezuela for TPS. In December 2019, Congress enacted the FY2020 NDAA ( P.L. 116-92 ), which prohibits federal contracting with persons who do business with the Maduro government. House and Senate committees have held hearings on the situation in Venezuela and U.S. policy (see Appendix ). For additional information, see CRS In Focus IF10230, Venezuela: Political Crisis and U.S. Policy , by Clare Ribando Seelke; CRS In Focus IF10715, Venezuela: Overview of U.S. Sanctions , by Mark P. Sullivan; CRS Report R44841, Venezuela: Background and U.S. Relations , coordinated by Clare Ribando Seelke; CRS In Focus IF11216, Venezuela: International Efforts to Resolve the Political Crisis , by Clare Ribando Seelke; and CRS In Focus IF11029, The Venezuela Regional Migration Crisis , by Rhoda Margesson and Clare Ribando Seelke. Outlook Congress has begun to consider the Trump Administration's FY2021 $1.4 billion foreign aid budget request for the region. The 18% cut in overall funding compared to FY2019 foreign aid levels masks large cuts, ranging from 30-60%, for some countries and programs. In particular, the Trump Administration's linkage of aid to Central America to reductions in unauthorized migration from the region could be an area of contention with Congress as could the Administration's large increase in assistance to support a democratic transition in Venezuela that has yet to happen. On trade issues, the 116 th Congress may consider whether to extend a tariff preference program for certain Caribbean countries, the CBTPAâwhich expires in September 2020âand the broader GSP for developing countries worldwide, which expires in December 2020. Looking ahead through 2020, the Latin America and Caribbean region faces significant challengesâmost prominently, Venezuela's ongoing political impasse and economic and humanitarian crisis, which has resulted in some 4 million Venezuelan refugees and migrants in the region. Upcoming elections in Bolivia in May 2020 are expected to be an important test of the country's political system in the aftermath of President Morales's resignation following protests ignited by widespread electoral fraud in October 2019. Social protests racked many Latin American countries in late 2019, and such unrest could continue in 2020 given that many of the underlying conditions still exist. These challenges and the appropriate U.S. policy responses may remain oversight issues for Congress. Other areas of congressional oversight and interest may include the ongoing difficult political situations in Haiti and Nicaragua, efforts to stem drug trafficking from South America, appropriate strategies to curb the flow of migrants from Central America, and U.S. policy toward Cuba. Appendix. Hearings in the 116th Congress	Summary:	gov_report	1,024	null	47
crs_R45884	crs_R45884_0	You are given a report by a government agency. Write a one-page summary of the report. Report: T he Supreme Court term that began on October 1, 2018, was a term of transition, with the Court issuing a number of rulings that, at times, signaled but did not fully adopt broader transformations in its jurisprudence. The term followed the retirement of Justice Kennedy, who was a critical vote on the Court for much of his 30-year tenure and who had been widely viewed as the Court's median or "swing" Justice. In nine out of the last 12 terms of the Roberts Court, he voted for the winning side in a case more often than any of his colleagues. Justice Brett Kavanaugh replaced Justice Kennedy one week into the October 2018 Term. The Court's newest member had served on the U.S. Court of Appeals for the District of Columbia (D.C. Circuit) for over a decade before his elevation to the Supreme Court. Empirical evidence suggests the Court can change with the retirement and replacement of one its members. As a result, the question looming over the October 2018 Term was how Justice Kennedy's departure and Justice Kavanaugh's arrival would alter the Court's jurisprudence going forward. Indeed, one member of the Court, Justice Ruth Bader Ginsburg, predicted Justice Kennedy's retirement to be "the event of greatest consequence for the current Term, and perhaps for many Terms ahead." Notwithstanding the alteration in the Court's makeup, observers have generally agreed that the October 2018 Term largely did not produce broad changes to the Court's jurisprudence. Although a number of cases presented the Court with the opportunity to rethink various areas of law, the Court largely declined those invitations. For instance, the Court in Gamble v. United States opted not to overrule a 170-year old doctrine concerning the reach of the Double Jeopardy Clause of the Fifth Amendment. In other cases, a majority of the Justices did not resolve potentially far-reaching questions, resulting in the Court either issuing more narrow rulings or simply not issuing an opinion in a given case. Nonetheless, much of the low-key nature of the October 2018 Term was a product of the Court's decisions to not hear certain matters. For instance, save for a three-page, per curiam opinion upholding an Indiana law regulating the disposal of fetal remains, the Court refrained from hearing cases touching on the subject of abortion during the October 2018 Term. The Court also declined to review cases addressing a number of other high-profile matters, including a challenge to the federal ban on bumpstocks, a dispute over whether business owners can decline on religious grounds to provide services for same-sex weddings, a case concerning President Trump's authority to impose tariffs on imported steel, and a challenge to the continued detainment of enemy combatants at Guantanamo Bay. And for a number of closely watched cases it did agree to hear, the Court opted to schedule arguments for the October 2019 Term, including several cases concerning whether federal law prohibits employers from discriminating on the basis of sexual orientation or gender identity and the lawfulness of the Department of Homeland Security's decision to wind down the Deferred Action for Childhood Arrivals (DACA) policy. While the Supreme Court's latest term generally did not result in wholesale changes to the law, its rulings were nonetheless important, in large part, because they may provide insight into how the Court will function following Justice Kennedy's retirement. For the fourth straight year at the Court, the number of opinions decided by a bare majority increased, with 29% of the Court's decisions being issued by a five-Justice majority. Some of these decisions saw the Court divided along what are perceived to be the typical ideological lines, with Justices appointed by Republican presidents on one side and those appointed by Democrats on the other. These 5-4 splits occurred in several appeals concerning the death penalty and in three cases where the Court expressly or implicitly overturned several of the Court's previous precedents regarding sovereign immunity, property rights, and redistricting. Nonetheless, such divisions proved to be the exception rather than the rule in closely divided cases during the last term. Of the 21 cases decided by a single vote, seven cases saw 5-4 splits between what have been viewed to be the conservative and liberal voting blocs on the Court. Instead, the October 2018 Term witnessed a number of heterodox lineups at the Court. For instance, Justice Kavanaugh joined the perceived liberal wing of the Court in a major antitrust dispute, and Justice Gorsuch voted with that same voting bloc in several cases involving Indian and criminal law. Justice Breyer joined the more conservative wing of the Court in the term's biggest Fourth Amendment case. And, as discussed in more detail below, in cases concerning the inclusion of a citizenship question on the 2020 Census questionnaire and judicial deference afforded to interpretations of agency regulations, the Chief Justice voted with the perceived liberal voting bloc. Underscoring the new dynamics of the Roberts Court, three Justices with fairly distinct judicial approaches voted most frequently with the majority of the Court last term: Justice Kavanaugh (voting with the majority 88% of the time), Chief Justice Roberts (85%), and Justice Kagan (83%). Collectively, the voting patterns of the October 2018 Term have led some legal commentators to suggest that the Court has transformed from an institution that was largely defined by the vote of Justice Kennedy to one in which multiple Justices are now the Court's swing votes. Beyond the general dynamics of October 2018 Term, the Court issued a number of opinions of particular importance for Congress. While a full discussion of every ruling from the last Supreme Court term is beyond the scope of this report, Table 1 and Table 2 provide brief summaries of the Court's written opinions issued during the October 2018 Term. The bulk of this report highlights five notable opinions from the October Term 2018 that could affect the work of Congress: (1) Kisor v. Wilkie , which considered the continued viability of the Auer-Seminole Rock doctrine governing judicial deference to an agency's interpretation of its own ambiguous regulation; (2) Department of Commerce v. New York , a challenge to the addition of a citizenship question to the 2020 census questionnaire; (3) Rucho v. Common Cause , which considered whether federal courts have jurisdiction to adjudicate claims of excessive partisanship in drawing electoral districts; (4) American Legion v. American Humanist Association , a challenge to the constitutionality of a state's display of a Latin cross as a World War I memorial; and (5) Gundy v. United States , which considered the scope of the long-dormant nondelegation doctrine. Administrative Law Deference and Agency Regulations: Kisor v. Wilkie37 In Kisor v. Wilkie , the Supreme Court considered whether to overrule the Auer doctrine (also known as the Seminole Rock doctrine), which generally instructs courts to defer to agencies' reasonable constructions of ambiguous regulatory language. In a 5-4 decision, the Supreme Court upheld the deference doctrine on stare decisis grounds. However, while the Court in Kisor declined to overrule Auer , it emphasized that the doctrine applies only in limited circumstances. These limitations on the doctrine's scope could bear consequences for future courts' review of agency action and affect the manner in which agencies approach their decisionmaking. Background: The Supreme Court has established several doctrines that guide judicial review of agency action. Perhaps the most well known is the Chevron doctrine, which generally instructs courts to defer to an agency's reasonable interpretation of an ambiguous statute that it administers. Auer deference, which takes its name from the Supreme Court's 1997 decision in Auer v. Robbins , has roots in the Court's 1945 decision in Bowles v. Seminole Rock & Sand Co. Auer generally instructs courts to defer to an agency's interpretation of ambiguous regulatory language " unless ," as the Court framed the test in Seminole Rock , that interpretation "is plainly erroneous or inconsistent with the regulation." While Chevron deference applies to agency interpretations of statutes that are contained in agency statements that have the force of law (e.g., regulations promulgated following notice-and-comment rulemaking procedures), Auer deference has been applied to a range of nonbinding agency memoranda and other materials that construe ambiguous regulatory language. While the doctrine has long-standing roots, in the wake of Auer , several Members of the Court began to criticize the doctrine on policy, statutory, and constitutional grounds. The Kisor case arose after the Department of Veterans Affairs (VA) denied James L. Kisor's request for retroactive disability compensation benefits. The agency determined that records he supplied were not " relevant " within the meaning of the governing regulation . On appeal, the Federal Circuit held that the term "relevant" as used in that regulation was ambiguous and, applying Auer deference to the VA's interpretation, affirmed the agency's decision. The Supreme Court granted the petitioner's request for review to consider whether to overturn Auer . Supreme Court's Decision: While the Supreme Court unanimously agreed to vacate the Federal Circuit's decision, the Justices fractured on whether to overrule Auer , with a bare majority voting to uphold it. Writing on behalf of five Members of the Court, Justice Kaganâjoined by Chief Justice Roberts and Justices Breyer, Ginsburg, and Sotomayorâgrounded the decision to uphold Auer on stare decisis principles. The doctrine of stare decisis typically leads the Court to follow rules set forth in prior decisions unless there is a " special justification " or " strong grounds " for overruling that precedent. Justice Kagan concluded that the petitioner's arguments did not justify abandoning Auer deference in light of the extensive body of precedent, going back at least to Seminole Rock , which supported the continued use of a doctrine that "pervades the whole corpus of administrative law." The Kisor majority also expressed concern that abandonment of Auer deference could result in litigants revisiting any of the myriad cases that applied the doctrine. And, the Court continued, " particularly ' special justification [ s], ' " which had not been offered by the petitioner, were necessary to overturn Auer , given that Congress has left the doctrine undisturbed for so long, despite the Court's repeated assertions that the doctrine rests on a presumption "that Congress intended for courts to defer to agencies when they interpret their own ambiguous rules." Although the Court did not overrule Auer , it took "the opportunity to restate, and somewhat expand on , " the doctrine's limitations. In so doing, the Court formulated a multistep process for determining whether Auer deference should be afforded to an agency's interpretation of a regulation. First, a reviewing court may defer under Auer only after determining that the regulation is "genuinely ambiguous," a conclusion the court may reach only after " exhaust [ing] all the ' traditional tools ' of construction ." Second, even if ambiguity exists, Auer will not apply unless the court determines that the agency's interpretation is " reasonable "âthat is, the interpretation "must come within the zone of ambiguity" that the court uncovered in its interpretation of the regulation. And third, even if a court determines that the agency has reasonably interpreted a genuinely ambiguous regulation, it must still independently assess " whether the character and context of the agency interpretation entitles it to controlling weight ." Though the Court cautioned that this examination is unable to be reduced "to any exhaustive test," the Court indicated that Auer deference shall not extend to interpretations that (1) are not the official or authoritative position of the agency; (2) do not somehow "implicate [ the agency ' s ] substantive expertise "; or (3) do not represent the agency ' s " fair and considered judgment ." The Court remanded the case to the Federal Circuit after concluding that the court of appeals did not adequately assess whether the regulation at issue was ambiguous, nor "whether the [VA's] interpretation is of the sort that Congress would want to receive deference." Two portions of Justice Kagan's opinion defended Auer on grounds other than stare decisis principles but did not gain the support of a majority of the Court. Joined by Justices Breyer, Ginsburg, and Sotomayor, Justice Kagan argued that Auer deference follows from "a presumption that Congress would generally want [agencies] to play the primary role in resolving regulatory ambiguities." Justice Kagan wrote that this presumption was justified on several grounds, including agencies' significant substantive expertise, the relative political accountability of agencies subordinate to the President, and the view that the agency responsible for issuing a regulation is often best situated to determine the meaning of that regulation. The four Justices also disagreed with the petitioner's s tatutory, policy, and constitutional arguments for overrulin g Auer . Concurring Opinions: Justice Gorsuch authored an opinion in which he disagreed with the majority's refusal to overrule Auer . Justice Gorsuch agreed with the petitioner that Auer violates the Constitution, arguing that the doctrine runs afoul of the separation of powers by demanding that courts accede to the legal judgments of the executive branch and placing "the powers of making, enforcing, and interpreting laws . . . in the same hands." He also agreed with the petitioner that Auer violates the judicial review and rulemaking provisions of the Administrative Procedure Act (APA). Instead of affording deference under Auer , Justice Gorsuch argued that judges should employ the so-called " Skidmore doctrine " when attempting to discern the meaning of an agency regulation. Under that doctrineânamed after the Court's 1944 decision in Skidmore v. Swift & Co. âcourts independently interpret the text of a regulation, but may accord nonbinding weight to an administrative interpretation, consistent with "the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade." The Chief Justice, who provided the crucial fifth vote to uphold Auer , authored a partial concurrence contending that the "distance" between the controlling portion of Justice Kagan's opinion and the position put forth by Justice Gorsuch "is not as great as it may initially appear." He noted that the limitations on Auer deference announced by the Kisor majorityâthat an interpretation must, among other things, be based on the agency's "authoritative, expertise-based, and fair and considered judgment"âwere not so different from those factors that Justice Gorsuch believed may persuade a court to follow an interpretation under Skidmore . And, perhaps anticipating a future legal challenge to the continuing viability of the Chevron doctrine, the Chief Justice also wrote that the Auer and Chevron doctrines are analytically distinct, maintaining that the Court's refusal to overrule Auer had no bearing on the distinct issues associated with Chevron . Implications for Congress: While the Court did not overrule the Auer doctrine in Kisor , the framework it elucidated for assessing whether deference is appropriate may provide further guidance and, perhaps, constrain lower courts deciding whether to defer to an agency's regulatory interpretation. Legal commentators have drawn various conclusions about Kisor 's potential impact, but it ultimately remains to be seen whether courts will be more hesitant to conclude that deference is warranted after Kisor , and whether the Kisor Court's elaborations on the limits on Auer deference will inform agency decisionmaking. In any event, the Court in Kisor made clear that Auer deference is not constitutionally required , and Congress may opt to memorialize, abrogate, or modify application of the doctrine by statute. For example, Congress could amend the judicial review provision of the APA to explicitly provide that judicial review of agency interpretations of regulations shall be accorded no deference (i.e., shall be reviewed "de novo") or instead be subject to some other standard . More narrowly, Congress could also provide in particular statutes governing specific agency actions whether Auer deference or some other standard of judicial review should be applied to regulatory interpretations. Election Law Census: Department of Commerce v. New York89 On the last day that the Supreme Court sat for the October 2018 Term, the Court issued its decision in Department of Commerce v. New York âa case involving the legal challenges to the decision by the Secretary of the Department of Commerce, Wilbur Ross, to add a citizenship question to the 2020 census questionnaire. The Court's opinion resolved important questions of constitutional, statutory, and administrative law. The Court concluded that adding a citizenship question to the 2020 census questionnaire did not violate the Enumeration Clause of the U.S. Constitution or the Census Act. But the Court alsoâat least temporarilyâprohibited the Department of Commerce from adding the citizenship question to the 2020 census questionnaire because it determined that Secretary Ross had violated the APA by failing to disclose his actual reason for doing so. Background : Article I, Â§Â 2 of the U.S. Constitution, as amended by the Fourteenth Amendment, requires Congress to take an "actual Enumeration" of "the whole Number ofÂ . . . persons" in each State "everyÂ . . . Term of ten Years, in such Manner as [Congress] shall by Law direct." Through the Census Act, Congress delegated this responsibility to the Secretary of Commerce. That law requires the Secretary of Commerce to "take a decennial census of population" and grants the Secretary discretion to do so "in such form and content as he may determine" and to "obtain such other census information as necessary." The Census Act places limits on how the Secretary of Commerce may conduct the census. Though the Secretary is authorized to "determine the inquires" and to "prepare questionnaires" for obtaining demographic or other information, Section 6(c) of the Census Act instructs the Secretary to first attempt to obtain such information from federal, state, or local government administrative sources "[t]o the maximum extent possible" and "consistent with the kind, timeliness, quality and scope" of the information needed. Moreover, to facilitate congressional oversight, Section 141(f) of the act directs the Secretary to "submit [reports] to the [appropriate] committees of Congress" (1) identifying the "subjects proposed to be included" and "types of information to be compiled"; (2) describing "the questions proposed to be included in [the] census"; and (3) if "new circumstances exist," modifying the prior two reports. On March 26, 2018, Secretary Ross issued a memorandum stating that the Census Bureau would add a citizenship question to the 2020 decennial census questionnaire. Secretary Ross stated that he made this decision because the Department of Justice (DOJ) had asked that the citizenship question be added to the 2020 census to obtain citizenship data that would be used for enforcement of Section 2 of the Voting Rights Act (VRA). In the memorandum, Secretary Ross explained that he had considered four options in deciding how to respond to DOJ's request: (A) not adding the citizenship question; (B) adding the citizenship question; (C) relying solely on administrative records to obtain citizenship data; and (D) relying on both administrative records and a citizenship question to obtain citizenship data. While the Census Bureau concluded that Option C would produce the most accurate citizenship information because noncitizens and Hispanics would be less likely to respond to a census questionnaire including a citizenship question, Secretary Ross chose option D. He stated that reliance on administrative records alone was "a potentially appealing solution," but noted that it would provide "an incomplete picture" because the Census Bureau did not have a complete set of administrative records for the entire population. In response to concerns that "reinstatement of the citizenship question . . . would depress response rate[s]" among Hispanics and noncitizens, Secretary Ross stated the Department of Commerce had "not [been] able to determine definitively how inclusion of a citizenship questionÂ . . . will impact responsiveness" and determined that, in any event, "the value of more complete and accurate dataÂ derived from surveying the entire population outweighs such concerns." Secretary Ross's decision was challenged in federal district courts in California, Maryland, and New York. Two of these courts concluded that the addition of a citizenship question violated the Enumeration Clause of the U.S. Constitution because "its inclusion would materially harm the accuracy of the census without advancing any legitimate governmental interest." Two courts also determined that Secretary Ross violated Sections 6(c) and 141(f) of the Census Act. As to Section 6, those courts found that administrative records alone would produce more accurate citizenship data than when used in combination with a citizenship question, and therefore the addition of a citizenship question would violate Section 6(c)'s directive to rely on administrative records "[t]o the maximum extent possible." The same two courts also determined that Secretary Ross violated Section 141(f) because he had not included citizenship as a "subject" in the first report that he submitted to Congress. Finally, all three district courts held that Secretary Ross had violated the APAâthe law requiring that agency action be based on "'reasoned decisionmaking.'" In particular, these courts concluded that Secretary Ross's decision wasâamong other thingsâcontrary to the evidence before him. They also determined that the Secretary's decision was unlawful because his sole stated reason for adding the citizenship questionâproviding DOJ with citizenship data for VRA enforcementâwas pretextual. Supreme Court ' s Decision : Chief Justice Roberts wrote the opinion for the Court in Department of Commerce v. New York . Though this opinion garnered a majority for each issue addressed, the Justices comprising the majority for each issue varied. On the merits, Chief Justice Robertsâjoined by Justices Thomas, Alito, Gorsuch, and Kavanaughâconcluded that adding a citizenship question to the census did not violate the Enumeration Clause. Noting that the Court's "interpretation of the Constitution is guided by Government practice that 'has been open, widespread, and unchallenged since the early days of the Republic,'" the Court observed that "demographic questions have been asked in every census since 1790" and that "questions about citizenship in particular have been asked for nearly as long." Relying on this "early understanding" and "long practice," the Court determined that the Enumeration Clause does not prohibit inquiring about citizenship on the census questionnaire. These same Justices also determined that Secretary Ross's decision was supported by the evidence before him and therefore did not violate the APA on that ground. The Court ruled that the Secretary's decision to rely on both administrative records and a citizenship question to obtain citizenship data for DOJ was a reasonable exercise of his discretion in light of the available evidence. While the Census Bureau had found that administrative records alone would produce the most accurate citizenship data, it acknowledged that each option "entailed tradeoffs between accuracy and completeness," and that it "was not able to 'quantify the relative magnitude of the errors" in each of Options C and D. The Court concluded that where the "choice [is] between reasonable policy alternatives in the face of uncertainty," the Secretary has discretion to choose. The Court also determined that the Secretary reasonably weighed the costs and benefits of reinstating the citizenship question, particularly "the risk that inquiring about citizenship would depress census response ratesÂ . . . among noncitizen households." The Court observed that the Secretary had explained why the "risk[s] w[ere] difficult to assess," concluding that he had reasonably "[w]eigh[ed] that uncertainty against the value of obtaining more complete and accurate citizenship data" through a citizenship question. In the end, and "in light of the long history of the citizenship question on the census," the Court was unwilling to second-guess the Secretary's conclusion as "the evidence before [him] hardly led ineluctably to just one reasonable course of action." The same Justices also ruled that the Secretary's decision did not violate the Census Act. The Court first determined, "for essentially the same reasons" underlying its ruling that Secretary Ross's decision was supported by the evidence, that Secretary Ross reasonably concluded that relying solely on administrative records to obtain citizenship data "would not . . . provide the more complete and accurate data that DOJ sought." Thus, because administrative records alone would not supply the "kind," "quality," and "scope" of "'statistics required,'" the Court held that Secretary Ross had complied with Section 6(c)'s requirement to rely "[t]o the maximum extent possible" on administrative records. The Court also determined that the Secretary complied with Section 141(f) of the Census Act. Though Secretary Ross had not included "citizenship" as a "subject" in his initial report to Congress, the Court determined that by listing "citizenship" as a "question" in the second report, the Secretary had adequately "informed Congress that he proposed to modify the original list of subjects" from his initial report. Finally, the Chief Justiceâjoined by Justices Ginsburg, Breyer, Sotomayor, and Kaganâheld that the Secretary's decision violated the APA because his sole stated reason for adding the citizenship question to the census questionnaire was not the real reason for his decision. The Court began by reaffirming the "settled proposition[]" that "in order to permit meaningful judicial review, an agency must 'disclose the basis' of its action." Moreover, while acknowledging that courts normally accept an agency's stated reason for its action, the Court recognized that courts may review evidence outside the agency record to probe the justifications of an agency's decision when there is a strong showing of bad faith or improper behavior. After concluding that it could review the extra-record evidence on which the district court had relied, the Court conducted its own review of the evidence regarding Secretary Ross's reason for adding the citizenship question to the census. It began by noting that while the Secretary had "tak[en] steps to reinstate a citizenship question about a week into his tenure," there was "no hint that he was considering VRA enforcement" at that time. In addition, the Court observed that the Department of Commerce had itself gone "to great lengths to elicit the request from DOJ (or any other willing agency)" to add the citizenship question. In the end, "viewing the evidence as a whole," the Court concluded that "the decision to reinstate a citizenship question [could not] be adequately explained in terms of DOJ's request for improved citizenship data to better enforce the VRA." Given this "disconnect between the decision made and the explanation given," the Court held that the Secretary's decision violated the APA. However, the Court was clear that it was "not hold[ing] that the [Secretary's] decision . . . was substantively invalid," but was only requiring the Secretary to disclose the reason for that decision. And to give Secretary Ross that opportunity, the Court directed the district court to remand the case back to the Department of Commerce. Concurring and Dissenting Opinions : Every Justice (other than Chief Justice Roberts) dissented from some portion of the Court's opinion. Among the most notable dissents were those of Justice Thomas and Justice Breyer. Justice Thomasâjoined by Justices Gorsuch and Kavanaughâdissented from the Court's holding that Secretary Ross's decision was based on a pretextual rationale. Justice Thomas began by criticizing the majority for relying on evidence outside the administrative record. Under the APA, Justice Thomas explained, judicial review of an agency decision is generally based on "'the agency's contemporaneous explanation'" for its decision, and courts normally may not invalidate the agency's action even if it "ha[d] other, unstated reasons for the decision." Justice Thomas acknowledged that review of extra-record materials may be permissible upon a showing of bad faith, but he disagreed with the Court's assessment that this case met that standard. Even if review of extra-record materials were appropriate, Justice Thomas concluded that none of the evidence established that Secretary Ross's stated basis for his decision "did not factor at all into [his] decision." In his view, the evidence showed "at most, that leadership at both the Department of Commerce and DOJ believed it importantâfor a variety of reasonsâto include a citizenship question on the census." Finally, Justice Thomas criticized the Court's decision as being the "the first time the Court has ever invalidated an agency action as 'pretextual,'" contending that the Court had "depart[ed] from traditional principles of administrative law." Justice Breyerâjoined by Justices Ginsburg, Sotomayor, and Kaganâdissented from the Court's conclusion that Secretary Ross's decision was supported by the evidence before the agency. Justice Breyer contended that Secretary Ross inaccurately stated that he was "'not able to determine definitively how inclusion of a citizenship question on the decennial census will impact responsiveness.'" Specifically, the dissent observed that the experts within the Census Bureau itself had found that "adding the question would produce a less accurate count because noncitizens and Hispanics would be less likely to respond to the questionnaire," finding there was "nothing significant" in the record "to the contrary." Moreover, Justice Breyer criticized Secretary Ross's conclusion that the addition of the citizenship question would produce more complete and accurate data. According to Justice Breyer, the administrative record showed that inclusion of the citizenship question would, for a large segment of the population, "be no improvement over using administrative records alone," and for 35 million people, it "would be no better, and in some respects would be worse, than using [only] statistical modeling." On these grounds, four Justices concluded that Secretary Ross's decision was arbitrary and capricious. Implications for Congress : The Supreme Court's decision in Department of Commerce is significant, both for its immediate impact on the 2020 census and for how it may affect administrative law more broadly. The Court's decision barred the Trump Administration from adding the citizenship question to the 2020 census without disclosing the Secretary's actual reason for doing so. Though the Trump Administration initially sought to cure the legal error identified by Court's opinion, it ultimately abandoned these efforts and confirmed that a citizenship question will not be on the 2020 census questionnaire. Nonetheless, because the Court did not deem the addition of a citizenship question "substantively" unlawful, it is possible that the Department of Commerce could add a citizenship question to a future census questionnaire, as long as the Secretary of Commerce discloses the actual reasons for doing so. Notably, the Trump Administration recently issued an executive order related to the collection of citizenship data, which, among other things, instructs the Secretary of Commerce to "consider initiating any administrative process necessary to include a citizenship question on the 2030 decennial census." Separately, the Supreme Court's decision could lay the groundwork for pretext-based challenges to agency decisions. The Court's opinion recognized that while "a court is ordinarily limited to evaluating the agency's contemporaneous explanation in light of the existing administrative record," it may inquire further into the motive underlying an agency's action where there is "a 'strong showing of bad faith or improper behavior.'" Though this rule preexisted the Court's decision in Department of Commerce , some plaintiffs could view that decision as signaling a greater receptiveness by the Court to such challenges. This was the view taken by Justice Thomas, who asserted in his dissenting opinion that the Court's decision "opened a Pandora's box of pretext-based challenges" to agency action because "[v]irtually every significant agency action is vulnerable to the kinds of allegations the Court credit[ed]" in its opinion. Some commentators have echoed Justice Thomas's prediction. Perhaps responding to Justice Thomas's concerns, the Court's opinion emphasized that judicial inquiry into an agency's stated reason for its decision should be "rare," explaining that this case involved "unusual circumstances" and was not "a typical case." This limiting language could discourage potential litigants from raising pretext-based challenges to agency action. Redistricting: Rucho v. Common Cause and Lamone v. Benisek172 Partisan gerrymandering, "the drawing of legislative district lines to subordinate adherents of one political party and entrench a rival party in power," is an issue that has vexed the federal courts for more than three decades. On June 27, 2019, by a 5-to-4 vote, the Supreme Court ruled that claims of unconstitutional partisan gerrymandering are not subject to federal court review because they present nonjusticiable political questions, thereby removing the issue from federal courts' purview. In Rucho v. Common Cause and Lamone v. Benisek (hereinafter Rucho ), the Court viewed the Elections Clause of the Constitution as solely assigning disputes about partisan gerrymandering to the state legislatures, subject to a check by the U.S. Congress. Moreover, in contrast to one-person, one-vote and racial gerrymandering claims, the Court determined that no test exists for adjudicating partisan gerrymandering claims that is both judicially discernible and manageable. However, the Court suggested that Congress, as well as state legislatures, could play a role in regulating partisan gerrymandering going forward. Background: Prior to the 1960s, the Supreme Court had determined that challenges to redistricting plans presented nonjusticiable political questions that were most appropriately addressed by the political branches of government, not the judiciary. In 1962, however, in the landmark ruling of Baker v. Carr , the Court held that a constitutional challenge to a redistricting plan is justiciable, identifying factors for determining when a case presents a nonjusticiable political question, including "a lack of [a] judicially discoverable and manageable standard[] for resolving it." Since then, while invalidating redistricting maps on equal protection grounds for other reasonsâbased on inequality of population among districts or one-person, one-vote and as racial gerrymandersâthe Court has not nullified a map because of partisan gerrymandering. In part, the Court has been reluctant to invalidate redistricting maps as impermissibly partisan because redistricting has traditionally been viewed as an inherently political process. Moreover, critics of federal court adjudication of partisan gerrymandering claims have argued that such lawsuits would open the floodgates of litigation and that it would be judicially difficult to police because it is unclear how much partisanship in redistricting is too much. On the other hand, critics of this view have argued that extreme partisan gerrymandering is "incompatible with democratic principles" by entrenching an unaccountable political class in power with the aid of modern redistricting softwareâusing "pinpoint precision" to maximize partisanshipâthereby necessitating some role by the unelected judiciary. In earlier cases presenting a claim of unconstitutional partisan gerrymandering, the Court left open the possibility that such claims could be judicially reviewable, but did not ascertain a discernible and manageable standard for adjudicating such claims. In those rulings, Justice Kennedy cast the deciding vote, leaving open the possibility that claims could be held justiciable in some future case, under a yet-to-be-determined standard. Last year, the Supreme Court considered claims of partisan gerrymandering raising nearly identical questions to those in Rucho , but ultimately issued narrow rulings on procedural grounds specific to those cases. Rucho marked the first opinion on partisan gerrymandering since Justice Kennedy left the Court. Prior to the Supreme Court's consideration, three-judge federal district courts in North Carolina and Maryland invalidated congressional districts as unconstitutional partisan gerrymanders under standards they viewed to be judicially discernible and manageable. In the North Carolina case, the court determined that a redistricting map violates the Equal Protection Clause as an unconstitutional partisan gerrymander when (1) the map drawer's predominant intent was to entrench a specific political party's power; (2) the resulting dilution of voting power by the disfavored party was likely to persist in later elections; and (3) the discriminatory effects were not attributable to other legitimate interests. Further, the court determined that a partisan gerrymandered map may violate provisions in Article I requiring "the People" to select their representatives and limiting the states to determining only "neutral provisions" regarding the "Times, Places, and Manner of holding Elections." Both courts concluded that a redistricting map violates the First Amendment if the challengers demonstrate that (1) the map drawers specifically intended to disadvantage voters based on their party affiliation and voting history; (2)Â the map burdened voters' representational and associational rights; and (3) the map drawers' intent to burden certain voters caused the "adverse impact." Under a provision of federal law providing for direct appeals to the Supreme Court in cases challenging the constitutionality of redistricting maps, North Carolina legislators and Maryland officials appealed to the Supreme Court. Supreme Court's Decision: In Rucho , the Supreme Court held that, based on the political question doctrine, federal courts lack jurisdiction to resolve claims of unconstitutional partisan gerrymandering, vacating and remanding the North Carolina and Maryland lower court rulings with instructions to dismiss for lack of jurisdiction. In an opinion written by Chief Justice Roberts, the Court began by addressing the Framers' views on gerrymandering. According to the majority opinion, at the time of the Constitution's drafting and ratification, the Framers were well familiar with the controversies surrounding the practice of partisan gerrymandering. "At no point" during the Framers' debates, the Court observed, "was there a suggestion that the federal courts had a role to play." Instead, the Chief Justice viewed the Elections Clause as a purposeful assignment of disputes over partisan gerrymandering to the state legislatures, subject to a check by the U.S. Congress. In this vein, the Court noted that Congress has in fact exercised its power under the Elections Clause to address partisan gerrymandering on several occasions, such as by enacting laws to require single-member and compact districts. Nonetheless, the Court acknowledged that there are two areas relating to redistricting where the Court has a unique role in policing the statesâclaims relating to (1) inequality of population among districts or "one-person, one-vote" and (2) racial gerrymandering. However, the Court distinguished those claims from claims of unconstitutional partisan gerrymandering, reasoning that while judicially discernible and manageable standards exist for adjudicating claims relating to one-person, one-vote and racial gerrymandering, partisan gerrymandering cases "have proved far more difficult to adjudicate." This difficulty stems from the fact, the Court explained, that while it is illegal for a redistricting map to violate the one-person, one-vote principle or to engage in racial discrimination, at least some degree of partisan influence in the redistricting process is inevitable and, as the Court has recognized, permissible. Hence, according to the Court, the challenge has been to identify a standard for determining how much partisan gerrymandering is "too much." The Chief Justice's opinion focused on three concerns regarding what he viewed as the central argument for federal adjudication of partisan gerrymandering claims: "an instinct" that if a political party garners a certain share of a statewide vote, as a matter of fairness, courts need to ensure that the party also holds a proportional number of seats in the legislature. First, the Court stated that this expectation "is based on a norm that does not exist in our electoral system." For example, noting her extensive experience in state and local politics, the Court quoted Justice O'Connor's 1986 concurrence that maintained that "[t]he opportunity to control the drawing of electoral boundaries through the legislative process of apportionment is a critical and traditional part of politics in the United States." Furthermore, the Rucho Court observed that the nation's long history of states electing their congressional representatives through "general ticket" or at-large elections typically resulted in single-party congressional delegations. As a result, the Chief Justice explained, for an extended period of American history, a party could achieve nearly half of the statewide vote, but not hold a single seat in the House of Representatives, suggesting that proportional representation was not a value protected by the Constitution. Second, even if proportional representation were a constitutional right, determining how much representation political parties "deserve," based on each party's share of the vote, would require courts to allocate political power, a power to which courts are, in the view of the majority, not "equipped" to exercise. For the Court, resolving questions of fairness presents "basic questions that are political, not legal." Third, even if a court could establish a standard of fairness, the Court determined that there is no discernible and manageable standard for identifying when the amount of political gerrymandering in a redistricting map meets the threshold of unconstitutionality. In so concluding, the Supreme Court rejected the tests that the district courts adopted in ascertaining unconstitutional partisan gerrymandering in North Carolina and Maryland. As to the North Carolina case, the Court criticized the "predominant intent" prong of the test adopted by the district court in holding the map in violation of the Equal Protection Clause. As the Chief Justice explained, although this inquiry is proper in the context of racial gerrymandering claims because drawing district lines based predominantly on race is inherently suspect, it does not apply in the context of partisan gerrymandering where some degree of political influence is permissible. Moreover, responding to the aspect of the test requiring challengers to demonstrate that partisan vote dilution "is likely to persist," the Court concluded that it would require courts to "forecast with unspecified certainty whether a prospective winner will have a margin of victory sufficient to permit him to ignore the supporters of his defeated opponent." That is, according to the Court, judges under this test would "not only have to pick the winnerâthey have to beat the point spread." The Court also disapproved of the test the district courts adopted in both the North Carolina and Maryland cases in holding that the maps violated the First Amendment's guarantee of freedom to associate. As a threshold matter, the Court determined that the subject redistricting plans do not facially restrict speech, association, or any other First Amendment guarantees, as voters in diluted districts remain free to associate and speak on political matters. More directly, the Court concluded that under the premise that partisan gerrymandering constitutes retaliation because of an individual's political views, "any level of partisanship in districting would constitute an infringement of their First Amendment rights." As a consequence, the Court viewed the First Amendment standard as failing to provide a manageable approach for determining when partisan activity has gone too far. In addition, the Court rejected North Carolina's reliance on Article I of the Constitution as the basis to invalidate a redistricting map, concluding that the text of the Constitution provided no enforceable limit for considering partisan gerrymandering claims. Nonetheless, Chief Justice Roberts acknowledged that excessive partisan gerrymandering "reasonably seem[s] unjust," stressing that the ruling "does not condone" the practice. However, he maintained that the Court cannot address the problem simply "because it must," viewing any solutions to extreme partisan gerrymandering to lie with Congress and the states, not the courts. Characterizing the dissent and the challengers' request that the Court ascertain a standard for adjudication as seeking "an unprecedented expansion of judicial power," the Chief Justice cautioned that such an "intervention would be unlimited in scope and duration .Â .Â . recur[ring] over and over again around the country with each new round of redistricting." Instead, he observed that many states have constitutional provisions and laws providing standards for state courts to address excessive partisan gerrymandering, which have been invoked with successful results. Furthermore, citing examples of past and pending federal legislation, the Court reiterated that "the Framers gave Congress the power to do something about partisan gerrymandering in the Elections Clause." Dissenting Opinion: Justice Kagan wrote a dissent on behalf of four Justices arguing that the Court has the power to establish a standard for adjudicating unconstitutionally excessive partisan gerrymandering and that its "abdication" in Rucho "may irreparably damage our system of government." According to the dissent, the standards proposed by the challengers and the lower courts are not "unsupported and out-of-date musings about the unpredictability of the American voter," but instead are "evidence-based, data-based, statistics-based." Moreover, responding to the Court's suggestion that Congress and the states have the power to ameliorate excessive partisan gerrymandering, the dissent maintained that the prospects for legislative reform are poor because the legislators who currently hold power as a result of partisan gerrymandering are unlikely to promote change. Instead, for the dissent, the solution to what they viewed as a crisis of the political process is a means to challenge extreme partisan gerrymandering outside of that process, through the unelected federal judiciary. Implications for Congress: As a result of Rucho , federal courts lack subject-matter jurisdiction to resolve claims of unconstitutional partisan gerrymandering. However, Rucho suggests that Congress and the states may have the power to address extreme partisan gerrymandering should they so choose. For example, as observed by the Court, several bills that take various approaches to address partisan gerrymandering have been introduced in the 116th Congress. For example, H.R. 1 , the For the People Act of 2019, which passed the House of Representatives on March 8, 2019, would eliminate legislatures from the redistricting process and require each state to establish a nonpartisan, independent congressional redistricting commission, in accordance with certain criteria. H.R. 44 , the Coretta Scott King Mid-Decade Redistricting Prohibition Act of 2019, would prohibit states from carrying out more than one congressional redistricting following a decennial census and apportionment, unless a state is ordered by a court to do so in order to comply with the Constitution or to enforce the Voting Rights Act of 1965. (At least one scholar has argued that limiting redistricting to once per decade renders it "less likely that redistricting will occur under conditions favoring partisan gerrymandering.") H.R. 131 , the Redistricting Transparency Act of 2019, would, based on the view that public oversight of redistricting may lessen partisan influence in the process, require state congressional redistricting entities to establish and maintain a public internet site and conduct redistricting under procedures that provide opportunities for public participation. Notably, the Court in Rucho specifically stated that it expressed "no view" on any pending proposals, but observed "that the avenue for reform established by the Framers, and used by Congress in the past, remains open." With regard to the states, Rucho does not preclude state courts from considering such claims under applicable state constitutional provisions. For example, in 2015, the Florida Supreme Court invalidated a Florida congressional redistricting map as violating a state constitutional provision addressing partisan gerrymandering. Similarly, in 2018, the Pennsylvania Supreme Court struck down the state's congressional redistricting map under a Pennsylvania constitutional provision. Looking ahead, as a result of Rucho , such state remedies, coupled with any congressional action, will likely be the primary means for regulating excessive partisan influence in the redistricting process. First Amendment Religious Displays: American Legion v. American Humanist Association242 In American Legion v. American Humanist Association , the Supreme Court held that the Bladensburg Peace Cross, a public World War I memorial in the form of a Latin cross, did not violate the First Amendment's Establishment Clause. A divided Court also limited the applicability of Lemon v. Kurtzman , a long-standingâbut often-questioned âprecedent that had previously supplied the primary standard for evaluating Establishment Clause claims. However, the separate opinions from the Court gave rise to a number of significant questions. In particular, there was no single majority opinion agreeing on what test should apply in future Establishment Clause claims. Further, the Court left open the possibility that the Lemon test, and the specific considerations it suggests courts should take into account, may continue to govern certain types of Establishment Clause challenges. Background: The First Amendment's Establishment Clause provides that the government "shall make no law respecting an establishment of religion." The Court has long interpreted this requirement to require the government to be "neutral" toward religionâbut over the years, the Supreme Court has employed a variety of different inquiries to determine whether challenged government practices are sufficiently neutral. In Lemon , decided in 1971, the Court synthesized its prior Establishment Clause decisions into a three-part test, saying that to be considered constitutional, government action (1) "must have a secular legislative purpose"; (2) must have a "principal or primary effect . . . that neither advances nor inhibits religion"; and (3) "must not foster an excessive government entanglement with religion." However, the Court has not always applied the Lemon test to analyze Establishment Clause challenges. For instance, in cases evaluating the constitutionality of government-sponsored prayer before legislative sessions, the Court has asked whether the disputed prayer practice "is supported by this country's history and tradition." The Court has also adopted variations on Lemon , most notably using an "endorsement" test that asks "whether the challenged governmental practice either has the purpose or effect of 'endorsing' religion." Thus, in 2018, Justice Thomas said that the Court's "Establishment Clause jurisprudence is in disarray." Justice Thomas and other Justices have argued that the Court should abandon Lemon and instead adopt a single approach to interpreting the Clauseâone that can be applied consistently. The Court's divergent approaches to evaluating Establishment Clause claims were apparent in two cases, issued on the same day in 2005, that involved government-sponsored displays containing religious symbols. In the first case, McCreary County v. ACLU , the Court applied the Lemon test and held that Ten Commandments displays in two Kentucky courthouses likely violated the Establishment Clause. In the second, Van Orden v. Perry , a plurality of the Court argued that like legislative prayers, religious displays should be evaluated primarily by reference to "our Nation's history." Justice Breyer concurred in the Court's judgment in Van Orden , providing the fifth vote to uphold a Ten Commandments display on the grounds of the Texas State Capitol. Justice Breyer stated that that while he believed the particular monument did " satisfy [the] Court ' s more formal Establishment Clause tests, " including Lemon , his view of the case was also driven by a number of other factors, including the monument ' s history and physical setting. In particular, he emphasized that the monument had gone legally unchallenged for 40 years . Under the circumstances, Justice Breyer argued that removing or altering the monument would likely be "divisive" in a way that the monument itself was not, exhibiting "a hostility toward religion that has no place in our Establishment Clause traditions." The plaintiffs in American Legion argued that Maryland violated the Establishment Clause by maintaining a war memorial known as the Bladensburg Peace Cross. The monument is a 32-foot Latin cross that sits on a large base containing a plaque with the names of 49 Prince George's County soldiers who died in World War I. The Fourth Circuit had agreed with the challengers and held that after looking to the Lemon test and giving "due consideration" to the "factors" set forth in Justice Breyer's Van Orden concurrence, the memorial violated the First Amendment. Supreme Court's Decision: The Supreme Court reversed the Fourth Circuit's decision. But while seven Justices ultimately approved of the Peace Cross, they did so in six different opinions, reflecting disagreement about how, exactly, to resolve the case. Justice Alito wrote the opinion for the American Legion Court, although certain portions of that opinion represented only a plurality. Writing for five members of the Court, Justice Alito's majority opinion relied on some of the factors highlighted by Justice Breyer's concurring opinion in Van Orden ânamely, the fact that this particular monument had "stood undisturbed for nearly a century" and had "acquired historical importance" to the community. The Court acknowledged that the cross is a Christian symbol, but viewed the symbol as taking on "an added secular meaning when used in World War I memorials." Under these circumstances, the Court concluded that requiring the state to "destroy[] or defac[e]" the Peace Cross "would not be neutral" with respect to religion "and would not further the ideals of respect and tolerance embodied in the First Amendment." Concurring and Dissenting Opinions: A different majority of Justices voted to limit the applicability of the Lemon testâalthough no five Justices agreed just how far to limit Lemon . Justice Alito, writing for a four-Justice plurality, suggested that "longstanding monuments, symbols, and practices" should not be evaluated under Lemon , but should instead be considered constitutional so long as they "follow in" a historical "tradition" of religious accommodation. Justices Thomas and Gorsuch wrote separate concurrences disapproving of Lemon more generally. Justice Thomas argued that the Court should "overrule the Lemon test in all contexts" and instead analyze Establishment Clause claims by reference to historical forms of "coercion." Justice Gorsuch viewed Lemon as a "misadventure," expressing concerns about that test and suggesting instead that the Court should look to historical practice and traditions in Establishment Clause challenges. Therefore, it appears that Lemon will no longer be used to assess the constitutionality of "longstanding monuments, symbols, and practices." Justice Ginsburg dissented, joined by Justice Sotomayor. She stressed the cross's religious nature, observing that it has become a marker for Christian soldiers' graves "precisely because" the cross symbolizes "sectarian beliefs." Her analysis did not expressly invoke the three-part Lemon test, but applied the "endorsement" test developed from Lemon , asking whether the display conveyed "a message that religion or a particular religious belief is favored or preferred." Looking to the memorial's nature and history, Justice Ginsburg believed that the Peace Cross did convey a message of endorsement. Ultimately, she concluded that by maintaining the monument, the state impermissibly "elevate[d] Christianity over other faiths, and religion over nonreligion." Implications for Congress: While American Legion was ostensibly concerned with the constitutionality of a single monument, the Court's decision raises a number of questions regarding future interpretations of the Establishment Clause. First, while the plurality opinion said that "monuments, symbols, and practices with a longstanding history" should now be evaluated by reference to historical practices rather than the Lemon test, it is not clear what qualifies as a long-standing symbol or practice. Further, it is unclear whether the historical practice test will apply outside of the context of challenges to monuments or legislative prayer . Indeed, two of the Justices who joined the plurality opinionâJustices Breyer and Kavanaughâwrote separate opinions suggesting that other factors in addition to historical practice may be relevant to evaluating Establishment Clause challenges. More broadly, however, regardless of the particular test employed, the opinions in American Legion suggest that the Roberts Court may be adopting a view of the Establishment Clause that is more accommodating of government sponsorship of religious displays and practicesâeven where those practices are aligned with a particular religion. Given that a majority of Justices agreed in American Legion that at least with respect to government use of religious symbols, "[t]he passage of time gives rise to a strong presumption of constitutionality," it seems likely that courts will view Establishment Clause challenges to long-standing monuments with significant skepticism moving forward. Separation of Powers Nondelegation Doctrine: Gundy v. United States289 In affirming the petitioner's conviction for violating the Sex Offender Registration and Notification Act (SORNA), a divided Supreme Court in Gundy v. United States upheld the constitutionality of Congress's delegated authority to the U.S. Attorney General to apply registration requirements to offenders convicted prior to SORNA's enactment. In a plurality opinion written on behalf of four Justices, Justice Kagan concluded that SORNA's delegation "easily passes constitutional muster" and was "distinctively small-bore" when compared to the other broad delegations the Court has upheld since 1935. Justice Gorsuch's dissent, joined by Chief Justice Roberts and Justice Thomas, highlighted an emerging split on the Court's approach in reviewing authority Congress delegates to another branch of government. Providing the fifth vote to affirm Gundy's conviction, Justice Alito concurred in the judgment only, declining to join Justice Kagan's opinion and indicating his willingness to rethink the Court's approach to the nondelegation doctrine, which seeks to bar Congress from delegating its legislative powers to other branches of government. After Gundy , whether the Court revives the long-dormant nondelegation doctrine likely depends on Justice Kavanaugh's views on the doctrine. (Justice Kavanaugh, who was not confirmed to the Court at the time of oral arguments, took no part in the Gundy decision. ) Background: Article I, Section 1 of the Constitution provides that "[a]ll legislative Powers herein granted" will be vested in the United States Congress. The Supreme Court has held that the "text in [Article I's Vesting Clause] permits no delegation of those powers." The nondelegation doctrine, as crafted by the courts, exists mainly to prevent Congress from ceding its legislative power to other entities and, in so doing, maintain the separation of powers among the three branches of government. At the same time, the Court has recognized that the nondelegation doctrine does not require complete separation of the three branches of government, permitting Congress to delegate certain powers to implement and enforce the law. To determine whether a delegation of authority is constitutional, the Court has required that Congress lay out an "intelligible principle" to guide the delegee's discretion and constrain its authority. Under the lenient "intelligible principle" standard that has its origins in the 1928 decision J.W. Hampton, Jr., & Co. v. United States , the Court has relied on the nondelegation doctrine twice, in 1935, to invalidate two provisions in the National Industrial Recovery Act delegating authority to the President, rejecting every nondelegation challenge thereafter. Gundy , the latest nondelegation challenge at the Supreme Court, centered on the application of registration requirements under SORNA to pre-act offenders. Enacted as Title I of the Adam Walsh Child Protection and Safety Act of 2006, SORNA's stated purpose is "to protect the public from sex offenders and offenders against children" by establishing a comprehensive national registration system of offenders. To this end, SORNA requires convicted sex offenders to register in each state where the offender resides, is employed, or is a student. Section 20913(d) of SORNA authorizes the Attorney General to "specify the applicability" of the registration requirements "to sex offenders convicted before the enactment" of the act and to "prescribe rules for the registration of any such sex offenders" and for other offenders unable to comply with the initial registration requirements. As decided by the Court in Reynolds v. United States , the law's registration requirements did not apply to pre-SORNA offenders until the Attorney General so specified. Accordingly, in a series of interim and final rules and guidance documents issued between 2007 and 2011, the Attorney General specified that SORNA's requirements apply to all sex offenders, including sex offenders convicted before the statute's enactment. Before the enactment of SORNA, petitioner Herman Gundy was convicted of a sex offense in Maryland. After serving his sentence, Gundy traveled from Maryland to New York. Subsequently, he was arrested and convicted for failing to register as a sex offender in New York under SORNA. In his petition to the Supreme Court, Gundy argued, among other things, that SORNA's grant of "undirected discretion" to the Attorney General to decide whether to apply the statute to pre-SORNA offenders is an unconstitutional delegation of legislative power to the executive branch. Supreme Court's Decision: In Gundy, Justice Kagan announced the judgment of the Court, affirming the lower court, and authored a plurality opinion joined by Justices Ginsburg, Breyer, and Sotomayor that followed the modern approach toward the nondelegation doctrine, rejecting Gundy's argument that Congress unconstitutionally delegated "quintessentially legislative powers" to the Attorney General to decide whether to apply the statute to pre-SORNA offenders. Relying on Reynolds , Justice Kagan read SORNA as requiring the Attorney General to "apply SORNA's registration requirements as soon as feasible to offenders convicted before the statute's enactment." Based on this interpretation, the plurality decided that Congress did not violate the nondelegation doctrine based on the Court's "long established law" in upholding broad delegations. The plurality explained that under the intelligible principle standard, so long as Congress has made clear the "general policy" and boundaries of the delegation, such broad delegations are permissible. Compared to very broad delegations upheld in the past (e.g., delegations to agencies to regulate in the "public's interest"), the plurality concluded that the Attorney General's "temporary authority" to delay the application of SORNA's registration requirements to pre-act offenders due to feasibility concerns "falls well within constitutional bounds." Dissenting and Concurring Opinions: In contrast, in his dissent, Justice Gorsuch, joined by Chief Justice Roberts and Justice Thomas, viewed the plain text of the delegation as providing the Attorney General limitless and "vast" discretion and "free rein" to impose (or not) selected registration requirements on pre-act offenders. In concluding the delegation to be unconstitutional, Justice Gorsuch distinguished his analysis from the plurality and the Court's precedents by focusing on the separation-of-powers principles that underpin the nondelegation doctrine. In the dissent's view, the nondelegation doctrine used to serve a vital role in maintaining the separation of powers among the branches of government by assuring that elected Members of Congress fulfill their constitutional lawmaking duties. Justice Gorsuch warned that delegating Congress's constitutional legislative duties to the executive branch bypasses the bicameral legislative process, resulting in laws that fail to protect minority interests or provide political accountability or fair notice. Consequently, the dissent faulted the "evolving intelligible principle" standard and increasingly broad delegations as pushing the nondelegation doctrine further from its separation-of-powers roots. Arguing for a more robust review of congressional delegations, Justice Gorsuch outlined several "guiding principles." According to the dissent, Congress could permissibly delegate (1) authority to another branch of government to "fill up the details" of Congress's policies regulating private conduct; (2)Â fact-finding to the executive branch as a condition to applying legislative policy; or (3) nonlegislative responsibilities that are within the scope of another branch of government's vested powers (e.g., assign foreign affairs powers that are constitutionally vested in the President). Applying these "traditional" separation-of-powers tests in lieu of the plurality's "intelligible principle" approach, Justice Gorsuch concluded that SORNA's delegation was an unconstitutional breach of the separation between the legislative and executive branches. He argued that SORNA lacked a "single policy decision concerning pre-Act offenders" and delegated more than the power to fill the details to the Attorney General. The dissent disputed the plurality's comparison of SORNA's delegation to other broad delegations that the Court has upheld, reasoning that "there isn't . . . a single other case where we have upheld executive authority over matters like these on the ground they constitute mere 'details.'" Further, he asserted that the delegation is neither conditional legislation subject to executive fact-finding nor a delegation of powers vested in the executive branch because determining the rights and duties of citizens is "quintessentially legislative power." In "a future case with a full panel," Justice Gorsuch hoped that the Court would recognize that "while Congress can enlist considerable assistance from the executive branch in filling up details and finding facts, it may never hand off to the nation's chief prosecutor the power to write his own criminal code. That 'is delegation running riot.'" Although Justice Alito voiced "support [for the] effort" of the dissent in rethinking the Court's approach to the nondelegation doctrine, he opted to not join that effort without the support of the majority of the Court. As a result, Justice Alito concurred in the judgment of the Court in affirming the petitioner's conviction. In his brief, five-sentence concurring opinion, Justice Alito viewed a "discernable standard [in SORNA's delegation] that is adequate under the approach this Court has taken for many years." Implications for Congress: The divided opinions in Gundy signal a potential shift in the Court's approach in nondelegation challenges and potential resurrection of the nondelegation doctrine. With three Justices and the Chief Justice in Gundy willing to reconsider or redefine the Court's "intelligible principle" standard, Justice Kavanaugh, who did not participate in Gundy , appears likely to be the critical vote to break the tie in a future case considering a revitalization of the nondelegation principle. If the Court were to replace the modern intelligible principle approach, new challenges may arise in determining when Congress crosses the nondelegation line. A more restrictive nondelegation standard could invite constitutional challenges to many other statutory provisions that delegate broad authority and discretion to the executive branch to issue and enforce regulations. The significance of these challenges was the subject of a debate between the Gundy plurality and dissent. Justice Kagan cautioned that striking down SORNA's delegation as unconstitutional would make most of Congress's delegations to the executive branch unconstitutional because Congress relies on broad delegations to executive agencies to implement its policies. However, Justice Gorsuch countered that "respecting the separation of powers" does not prohibit Congress from authorizing the executive branch to fill in details, find facts that trigger applicable statutory requirements, or exercise nonlegislative powers. A future case may provide the Court with the opportunity to provide guidance to the courts and Congress on how precise Congress must be in its delegation and how best to draw the line between permissible and impermissible delegations. For now, however, the current intelligible principle standard in use since 1935 survives while the nondelegation doctrine continues to remain "moribund." Summary:	null	96	71,590	71,592	71,592	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: T he Supreme Court term that began on October 1, 2018, was a term of transition, with the Court issuing a number of rulings that, at times, signaled but did not fully adopt broader transformations in its jurisprudence. The term followed the retirement of Justice Kennedy, who was a critical vote on the Court for much of his 30-year tenure and who had been widely viewed as the Court's median or "swing" Justice. In nine out of the last 12 terms of the Roberts Court, he voted for the winning side in a case more often than any of his colleagues. Justice Brett Kavanaugh replaced Justice Kennedy one week into the October 2018 Term. The Court's newest member had served on the U.S. Court of Appeals for the District of Columbia (D.C. Circuit) for over a decade before his elevation to the Supreme Court. Empirical evidence suggests the Court can change with the retirement and replacement of one its members. As a result, the question looming over the October 2018 Term was how Justice Kennedy's departure and Justice Kavanaugh's arrival would alter the Court's jurisprudence going forward. Indeed, one member of the Court, Justice Ruth Bader Ginsburg, predicted Justice Kennedy's retirement to be "the event of greatest consequence for the current Term, and perhaps for many Terms ahead." Notwithstanding the alteration in the Court's makeup, observers have generally agreed that the October 2018 Term largely did not produce broad changes to the Court's jurisprudence. Although a number of cases presented the Court with the opportunity to rethink various areas of law, the Court largely declined those invitations. For instance, the Court in Gamble v. United States opted not to overrule a 170-year old doctrine concerning the reach of the Double Jeopardy Clause of the Fifth Amendment. In other cases, a majority of the Justices did not resolve potentially far-reaching questions, resulting in the Court either issuing more narrow rulings or simply not issuing an opinion in a given case. Nonetheless, much of the low-key nature of the October 2018 Term was a product of the Court's decisions to not hear certain matters. For instance, save for a three-page, per curiam opinion upholding an Indiana law regulating the disposal of fetal remains, the Court refrained from hearing cases touching on the subject of abortion during the October 2018 Term. The Court also declined to review cases addressing a number of other high-profile matters, including a challenge to the federal ban on bumpstocks, a dispute over whether business owners can decline on religious grounds to provide services for same-sex weddings, a case concerning President Trump's authority to impose tariffs on imported steel, and a challenge to the continued detainment of enemy combatants at Guantanamo Bay. And for a number of closely watched cases it did agree to hear, the Court opted to schedule arguments for the October 2019 Term, including several cases concerning whether federal law prohibits employers from discriminating on the basis of sexual orientation or gender identity and the lawfulness of the Department of Homeland Security's decision to wind down the Deferred Action for Childhood Arrivals (DACA) policy. While the Supreme Court's latest term generally did not result in wholesale changes to the law, its rulings were nonetheless important, in large part, because they may provide insight into how the Court will function following Justice Kennedy's retirement. For the fourth straight year at the Court, the number of opinions decided by a bare majority increased, with 29% of the Court's decisions being issued by a five-Justice majority. Some of these decisions saw the Court divided along what are perceived to be the typical ideological lines, with Justices appointed by Republican presidents on one side and those appointed by Democrats on the other. These 5-4 splits occurred in several appeals concerning the death penalty and in three cases where the Court expressly or implicitly overturned several of the Court's previous precedents regarding sovereign immunity, property rights, and redistricting. Nonetheless, such divisions proved to be the exception rather than the rule in closely divided cases during the last term. Of the 21 cases decided by a single vote, seven cases saw 5-4 splits between what have been viewed to be the conservative and liberal voting blocs on the Court. Instead, the October 2018 Term witnessed a number of heterodox lineups at the Court. For instance, Justice Kavanaugh joined the perceived liberal wing of the Court in a major antitrust dispute, and Justice Gorsuch voted with that same voting bloc in several cases involving Indian and criminal law. Justice Breyer joined the more conservative wing of the Court in the term's biggest Fourth Amendment case. And, as discussed in more detail below, in cases concerning the inclusion of a citizenship question on the 2020 Census questionnaire and judicial deference afforded to interpretations of agency regulations, the Chief Justice voted with the perceived liberal voting bloc. Underscoring the new dynamics of the Roberts Court, three Justices with fairly distinct judicial approaches voted most frequently with the majority of the Court last term: Justice Kavanaugh (voting with the majority 88% of the time), Chief Justice Roberts (85%), and Justice Kagan (83%). Collectively, the voting patterns of the October 2018 Term have led some legal commentators to suggest that the Court has transformed from an institution that was largely defined by the vote of Justice Kennedy to one in which multiple Justices are now the Court's swing votes. Beyond the general dynamics of October 2018 Term, the Court issued a number of opinions of particular importance for Congress. While a full discussion of every ruling from the last Supreme Court term is beyond the scope of this report, Table 1 and Table 2 provide brief summaries of the Court's written opinions issued during the October 2018 Term. The bulk of this report highlights five notable opinions from the October Term 2018 that could affect the work of Congress: (1) Kisor v. Wilkie , which considered the continued viability of the Auer-Seminole Rock doctrine governing judicial deference to an agency's interpretation of its own ambiguous regulation; (2) Department of Commerce v. New York , a challenge to the addition of a citizenship question to the 2020 census questionnaire; (3) Rucho v. Common Cause , which considered whether federal courts have jurisdiction to adjudicate claims of excessive partisanship in drawing electoral districts; (4) American Legion v. American Humanist Association , a challenge to the constitutionality of a state's display of a Latin cross as a World War I memorial; and (5) Gundy v. United States , which considered the scope of the long-dormant nondelegation doctrine. Administrative Law Deference and Agency Regulations: Kisor v. Wilkie37 In Kisor v. Wilkie , the Supreme Court considered whether to overrule the Auer doctrine (also known as the Seminole Rock doctrine), which generally instructs courts to defer to agencies' reasonable constructions of ambiguous regulatory language. In a 5-4 decision, the Supreme Court upheld the deference doctrine on stare decisis grounds. However, while the Court in Kisor declined to overrule Auer , it emphasized that the doctrine applies only in limited circumstances. These limitations on the doctrine's scope could bear consequences for future courts' review of agency action and affect the manner in which agencies approach their decisionmaking. Background: The Supreme Court has established several doctrines that guide judicial review of agency action. Perhaps the most well known is the Chevron doctrine, which generally instructs courts to defer to an agency's reasonable interpretation of an ambiguous statute that it administers. Auer deference, which takes its name from the Supreme Court's 1997 decision in Auer v. Robbins , has roots in the Court's 1945 decision in Bowles v. Seminole Rock & Sand Co. Auer generally instructs courts to defer to an agency's interpretation of ambiguous regulatory language " unless ," as the Court framed the test in Seminole Rock , that interpretation "is plainly erroneous or inconsistent with the regulation." While Chevron deference applies to agency interpretations of statutes that are contained in agency statements that have the force of law (e.g., regulations promulgated following notice-and-comment rulemaking procedures), Auer deference has been applied to a range of nonbinding agency memoranda and other materials that construe ambiguous regulatory language. While the doctrine has long-standing roots, in the wake of Auer , several Members of the Court began to criticize the doctrine on policy, statutory, and constitutional grounds. The Kisor case arose after the Department of Veterans Affairs (VA) denied James L. Kisor's request for retroactive disability compensation benefits. The agency determined that records he supplied were not " relevant " within the meaning of the governing regulation . On appeal, the Federal Circuit held that the term "relevant" as used in that regulation was ambiguous and, applying Auer deference to the VA's interpretation, affirmed the agency's decision. The Supreme Court granted the petitioner's request for review to consider whether to overturn Auer . Supreme Court's Decision: While the Supreme Court unanimously agreed to vacate the Federal Circuit's decision, the Justices fractured on whether to overrule Auer , with a bare majority voting to uphold it. Writing on behalf of five Members of the Court, Justice Kaganâjoined by Chief Justice Roberts and Justices Breyer, Ginsburg, and Sotomayorâgrounded the decision to uphold Auer on stare decisis principles. The doctrine of stare decisis typically leads the Court to follow rules set forth in prior decisions unless there is a " special justification " or " strong grounds " for overruling that precedent. Justice Kagan concluded that the petitioner's arguments did not justify abandoning Auer deference in light of the extensive body of precedent, going back at least to Seminole Rock , which supported the continued use of a doctrine that "pervades the whole corpus of administrative law." The Kisor majority also expressed concern that abandonment of Auer deference could result in litigants revisiting any of the myriad cases that applied the doctrine. And, the Court continued, " particularly ' special justification [ s], ' " which had not been offered by the petitioner, were necessary to overturn Auer , given that Congress has left the doctrine undisturbed for so long, despite the Court's repeated assertions that the doctrine rests on a presumption "that Congress intended for courts to defer to agencies when they interpret their own ambiguous rules." Although the Court did not overrule Auer , it took "the opportunity to restate, and somewhat expand on , " the doctrine's limitations. In so doing, the Court formulated a multistep process for determining whether Auer deference should be afforded to an agency's interpretation of a regulation. First, a reviewing court may defer under Auer only after determining that the regulation is "genuinely ambiguous," a conclusion the court may reach only after " exhaust [ing] all the ' traditional tools ' of construction ." Second, even if ambiguity exists, Auer will not apply unless the court determines that the agency's interpretation is " reasonable "âthat is, the interpretation "must come within the zone of ambiguity" that the court uncovered in its interpretation of the regulation. And third, even if a court determines that the agency has reasonably interpreted a genuinely ambiguous regulation, it must still independently assess " whether the character and context of the agency interpretation entitles it to controlling weight ." Though the Court cautioned that this examination is unable to be reduced "to any exhaustive test," the Court indicated that Auer deference shall not extend to interpretations that (1) are not the official or authoritative position of the agency; (2) do not somehow "implicate [ the agency ' s ] substantive expertise "; or (3) do not represent the agency ' s " fair and considered judgment ." The Court remanded the case to the Federal Circuit after concluding that the court of appeals did not adequately assess whether the regulation at issue was ambiguous, nor "whether the [VA's] interpretation is of the sort that Congress would want to receive deference." Two portions of Justice Kagan's opinion defended Auer on grounds other than stare decisis principles but did not gain the support of a majority of the Court. Joined by Justices Breyer, Ginsburg, and Sotomayor, Justice Kagan argued that Auer deference follows from "a presumption that Congress would generally want [agencies] to play the primary role in resolving regulatory ambiguities." Justice Kagan wrote that this presumption was justified on several grounds, including agencies' significant substantive expertise, the relative political accountability of agencies subordinate to the President, and the view that the agency responsible for issuing a regulation is often best situated to determine the meaning of that regulation. The four Justices also disagreed with the petitioner's s tatutory, policy, and constitutional arguments for overrulin g Auer . Concurring Opinions: Justice Gorsuch authored an opinion in which he disagreed with the majority's refusal to overrule Auer . Justice Gorsuch agreed with the petitioner that Auer violates the Constitution, arguing that the doctrine runs afoul of the separation of powers by demanding that courts accede to the legal judgments of the executive branch and placing "the powers of making, enforcing, and interpreting laws . . . in the same hands." He also agreed with the petitioner that Auer violates the judicial review and rulemaking provisions of the Administrative Procedure Act (APA). Instead of affording deference under Auer , Justice Gorsuch argued that judges should employ the so-called " Skidmore doctrine " when attempting to discern the meaning of an agency regulation. Under that doctrineânamed after the Court's 1944 decision in Skidmore v. Swift & Co. âcourts independently interpret the text of a regulation, but may accord nonbinding weight to an administrative interpretation, consistent with "the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade." The Chief Justice, who provided the crucial fifth vote to uphold Auer , authored a partial concurrence contending that the "distance" between the controlling portion of Justice Kagan's opinion and the position put forth by Justice Gorsuch "is not as great as it may initially appear." He noted that the limitations on Auer deference announced by the Kisor majorityâthat an interpretation must, among other things, be based on the agency's "authoritative, expertise-based, and fair and considered judgment"âwere not so different from those factors that Justice Gorsuch believed may persuade a court to follow an interpretation under Skidmore . And, perhaps anticipating a future legal challenge to the continuing viability of the Chevron doctrine, the Chief Justice also wrote that the Auer and Chevron doctrines are analytically distinct, maintaining that the Court's refusal to overrule Auer had no bearing on the distinct issues associated with Chevron . Implications for Congress: While the Court did not overrule the Auer doctrine in Kisor , the framework it elucidated for assessing whether deference is appropriate may provide further guidance and, perhaps, constrain lower courts deciding whether to defer to an agency's regulatory interpretation. Legal commentators have drawn various conclusions about Kisor 's potential impact, but it ultimately remains to be seen whether courts will be more hesitant to conclude that deference is warranted after Kisor , and whether the Kisor Court's elaborations on the limits on Auer deference will inform agency decisionmaking. In any event, the Court in Kisor made clear that Auer deference is not constitutionally required , and Congress may opt to memorialize, abrogate, or modify application of the doctrine by statute. For example, Congress could amend the judicial review provision of the APA to explicitly provide that judicial review of agency interpretations of regulations shall be accorded no deference (i.e., shall be reviewed "de novo") or instead be subject to some other standard . More narrowly, Congress could also provide in particular statutes governing specific agency actions whether Auer deference or some other standard of judicial review should be applied to regulatory interpretations. Election Law Census: Department of Commerce v. New York89 On the last day that the Supreme Court sat for the October 2018 Term, the Court issued its decision in Department of Commerce v. New York âa case involving the legal challenges to the decision by the Secretary of the Department of Commerce, Wilbur Ross, to add a citizenship question to the 2020 census questionnaire. The Court's opinion resolved important questions of constitutional, statutory, and administrative law. The Court concluded that adding a citizenship question to the 2020 census questionnaire did not violate the Enumeration Clause of the U.S. Constitution or the Census Act. But the Court alsoâat least temporarilyâprohibited the Department of Commerce from adding the citizenship question to the 2020 census questionnaire because it determined that Secretary Ross had violated the APA by failing to disclose his actual reason for doing so. Background : Article I, Â§Â 2 of the U.S. Constitution, as amended by the Fourteenth Amendment, requires Congress to take an "actual Enumeration" of "the whole Number ofÂ . . . persons" in each State "everyÂ . . . Term of ten Years, in such Manner as [Congress] shall by Law direct." Through the Census Act, Congress delegated this responsibility to the Secretary of Commerce. That law requires the Secretary of Commerce to "take a decennial census of population" and grants the Secretary discretion to do so "in such form and content as he may determine" and to "obtain such other census information as necessary." The Census Act places limits on how the Secretary of Commerce may conduct the census. Though the Secretary is authorized to "determine the inquires" and to "prepare questionnaires" for obtaining demographic or other information, Section 6(c) of the Census Act instructs the Secretary to first attempt to obtain such information from federal, state, or local government administrative sources "[t]o the maximum extent possible" and "consistent with the kind, timeliness, quality and scope" of the information needed. Moreover, to facilitate congressional oversight, Section 141(f) of the act directs the Secretary to "submit [reports] to the [appropriate] committees of Congress" (1) identifying the "subjects proposed to be included" and "types of information to be compiled"; (2) describing "the questions proposed to be included in [the] census"; and (3) if "new circumstances exist," modifying the prior two reports. On March 26, 2018, Secretary Ross issued a memorandum stating that the Census Bureau would add a citizenship question to the 2020 decennial census questionnaire. Secretary Ross stated that he made this decision because the Department of Justice (DOJ) had asked that the citizenship question be added to the 2020 census to obtain citizenship data that would be used for enforcement of Section 2 of the Voting Rights Act (VRA). In the memorandum, Secretary Ross explained that he had considered four options in deciding how to respond to DOJ's request: (A) not adding the citizenship question; (B) adding the citizenship question; (C) relying solely on administrative records to obtain citizenship data; and (D) relying on both administrative records and a citizenship question to obtain citizenship data. While the Census Bureau concluded that Option C would produce the most accurate citizenship information because noncitizens and Hispanics would be less likely to respond to a census questionnaire including a citizenship question, Secretary Ross chose option D. He stated that reliance on administrative records alone was "a potentially appealing solution," but noted that it would provide "an incomplete picture" because the Census Bureau did not have a complete set of administrative records for the entire population. In response to concerns that "reinstatement of the citizenship question . . . would depress response rate[s]" among Hispanics and noncitizens, Secretary Ross stated the Department of Commerce had "not [been] able to determine definitively how inclusion of a citizenship questionÂ . . . will impact responsiveness" and determined that, in any event, "the value of more complete and accurate dataÂ derived from surveying the entire population outweighs such concerns." Secretary Ross's decision was challenged in federal district courts in California, Maryland, and New York. Two of these courts concluded that the addition of a citizenship question violated the Enumeration Clause of the U.S. Constitution because "its inclusion would materially harm the accuracy of the census without advancing any legitimate governmental interest." Two courts also determined that Secretary Ross violated Sections 6(c) and 141(f) of the Census Act. As to Section 6, those courts found that administrative records alone would produce more accurate citizenship data than when used in combination with a citizenship question, and therefore the addition of a citizenship question would violate Section 6(c)'s directive to rely on administrative records "[t]o the maximum extent possible." The same two courts also determined that Secretary Ross violated Section 141(f) because he had not included citizenship as a "subject" in the first report that he submitted to Congress. Finally, all three district courts held that Secretary Ross had violated the APAâthe law requiring that agency action be based on "'reasoned decisionmaking.'" In particular, these courts concluded that Secretary Ross's decision wasâamong other thingsâcontrary to the evidence before him. They also determined that the Secretary's decision was unlawful because his sole stated reason for adding the citizenship questionâproviding DOJ with citizenship data for VRA enforcementâwas pretextual. Supreme Court ' s Decision : Chief Justice Roberts wrote the opinion for the Court in Department of Commerce v. New York . Though this opinion garnered a majority for each issue addressed, the Justices comprising the majority for each issue varied. On the merits, Chief Justice Robertsâjoined by Justices Thomas, Alito, Gorsuch, and Kavanaughâconcluded that adding a citizenship question to the census did not violate the Enumeration Clause. Noting that the Court's "interpretation of the Constitution is guided by Government practice that 'has been open, widespread, and unchallenged since the early days of the Republic,'" the Court observed that "demographic questions have been asked in every census since 1790" and that "questions about citizenship in particular have been asked for nearly as long." Relying on this "early understanding" and "long practice," the Court determined that the Enumeration Clause does not prohibit inquiring about citizenship on the census questionnaire. These same Justices also determined that Secretary Ross's decision was supported by the evidence before him and therefore did not violate the APA on that ground. The Court ruled that the Secretary's decision to rely on both administrative records and a citizenship question to obtain citizenship data for DOJ was a reasonable exercise of his discretion in light of the available evidence. While the Census Bureau had found that administrative records alone would produce the most accurate citizenship data, it acknowledged that each option "entailed tradeoffs between accuracy and completeness," and that it "was not able to 'quantify the relative magnitude of the errors" in each of Options C and D. The Court concluded that where the "choice [is] between reasonable policy alternatives in the face of uncertainty," the Secretary has discretion to choose. The Court also determined that the Secretary reasonably weighed the costs and benefits of reinstating the citizenship question, particularly "the risk that inquiring about citizenship would depress census response ratesÂ . . . among noncitizen households." The Court observed that the Secretary had explained why the "risk[s] w[ere] difficult to assess," concluding that he had reasonably "[w]eigh[ed] that uncertainty against the value of obtaining more complete and accurate citizenship data" through a citizenship question. In the end, and "in light of the long history of the citizenship question on the census," the Court was unwilling to second-guess the Secretary's conclusion as "the evidence before [him] hardly led ineluctably to just one reasonable course of action." The same Justices also ruled that the Secretary's decision did not violate the Census Act. The Court first determined, "for essentially the same reasons" underlying its ruling that Secretary Ross's decision was supported by the evidence, that Secretary Ross reasonably concluded that relying solely on administrative records to obtain citizenship data "would not . . . provide the more complete and accurate data that DOJ sought." Thus, because administrative records alone would not supply the "kind," "quality," and "scope" of "'statistics required,'" the Court held that Secretary Ross had complied with Section 6(c)'s requirement to rely "[t]o the maximum extent possible" on administrative records. The Court also determined that the Secretary complied with Section 141(f) of the Census Act. Though Secretary Ross had not included "citizenship" as a "subject" in his initial report to Congress, the Court determined that by listing "citizenship" as a "question" in the second report, the Secretary had adequately "informed Congress that he proposed to modify the original list of subjects" from his initial report. Finally, the Chief Justiceâjoined by Justices Ginsburg, Breyer, Sotomayor, and Kaganâheld that the Secretary's decision violated the APA because his sole stated reason for adding the citizenship question to the census questionnaire was not the real reason for his decision. The Court began by reaffirming the "settled proposition[]" that "in order to permit meaningful judicial review, an agency must 'disclose the basis' of its action." Moreover, while acknowledging that courts normally accept an agency's stated reason for its action, the Court recognized that courts may review evidence outside the agency record to probe the justifications of an agency's decision when there is a strong showing of bad faith or improper behavior. After concluding that it could review the extra-record evidence on which the district court had relied, the Court conducted its own review of the evidence regarding Secretary Ross's reason for adding the citizenship question to the census. It began by noting that while the Secretary had "tak[en] steps to reinstate a citizenship question about a week into his tenure," there was "no hint that he was considering VRA enforcement" at that time. In addition, the Court observed that the Department of Commerce had itself gone "to great lengths to elicit the request from DOJ (or any other willing agency)" to add the citizenship question. In the end, "viewing the evidence as a whole," the Court concluded that "the decision to reinstate a citizenship question [could not] be adequately explained in terms of DOJ's request for improved citizenship data to better enforce the VRA." Given this "disconnect between the decision made and the explanation given," the Court held that the Secretary's decision violated the APA. However, the Court was clear that it was "not hold[ing] that the [Secretary's] decision . . . was substantively invalid," but was only requiring the Secretary to disclose the reason for that decision. And to give Secretary Ross that opportunity, the Court directed the district court to remand the case back to the Department of Commerce. Concurring and Dissenting Opinions : Every Justice (other than Chief Justice Roberts) dissented from some portion of the Court's opinion. Among the most notable dissents were those of Justice Thomas and Justice Breyer. Justice Thomasâjoined by Justices Gorsuch and Kavanaughâdissented from the Court's holding that Secretary Ross's decision was based on a pretextual rationale. Justice Thomas began by criticizing the majority for relying on evidence outside the administrative record. Under the APA, Justice Thomas explained, judicial review of an agency decision is generally based on "'the agency's contemporaneous explanation'" for its decision, and courts normally may not invalidate the agency's action even if it "ha[d] other, unstated reasons for the decision." Justice Thomas acknowledged that review of extra-record materials may be permissible upon a showing of bad faith, but he disagreed with the Court's assessment that this case met that standard. Even if review of extra-record materials were appropriate, Justice Thomas concluded that none of the evidence established that Secretary Ross's stated basis for his decision "did not factor at all into [his] decision." In his view, the evidence showed "at most, that leadership at both the Department of Commerce and DOJ believed it importantâfor a variety of reasonsâto include a citizenship question on the census." Finally, Justice Thomas criticized the Court's decision as being the "the first time the Court has ever invalidated an agency action as 'pretextual,'" contending that the Court had "depart[ed] from traditional principles of administrative law." Justice Breyerâjoined by Justices Ginsburg, Sotomayor, and Kaganâdissented from the Court's conclusion that Secretary Ross's decision was supported by the evidence before the agency. Justice Breyer contended that Secretary Ross inaccurately stated that he was "'not able to determine definitively how inclusion of a citizenship question on the decennial census will impact responsiveness.'" Specifically, the dissent observed that the experts within the Census Bureau itself had found that "adding the question would produce a less accurate count because noncitizens and Hispanics would be less likely to respond to the questionnaire," finding there was "nothing significant" in the record "to the contrary." Moreover, Justice Breyer criticized Secretary Ross's conclusion that the addition of the citizenship question would produce more complete and accurate data. According to Justice Breyer, the administrative record showed that inclusion of the citizenship question would, for a large segment of the population, "be no improvement over using administrative records alone," and for 35 million people, it "would be no better, and in some respects would be worse, than using [only] statistical modeling." On these grounds, four Justices concluded that Secretary Ross's decision was arbitrary and capricious. Implications for Congress : The Supreme Court's decision in Department of Commerce is significant, both for its immediate impact on the 2020 census and for how it may affect administrative law more broadly. The Court's decision barred the Trump Administration from adding the citizenship question to the 2020 census without disclosing the Secretary's actual reason for doing so. Though the Trump Administration initially sought to cure the legal error identified by Court's opinion, it ultimately abandoned these efforts and confirmed that a citizenship question will not be on the 2020 census questionnaire. Nonetheless, because the Court did not deem the addition of a citizenship question "substantively" unlawful, it is possible that the Department of Commerce could add a citizenship question to a future census questionnaire, as long as the Secretary of Commerce discloses the actual reasons for doing so. Notably, the Trump Administration recently issued an executive order related to the collection of citizenship data, which, among other things, instructs the Secretary of Commerce to "consider initiating any administrative process necessary to include a citizenship question on the 2030 decennial census." Separately, the Supreme Court's decision could lay the groundwork for pretext-based challenges to agency decisions. The Court's opinion recognized that while "a court is ordinarily limited to evaluating the agency's contemporaneous explanation in light of the existing administrative record," it may inquire further into the motive underlying an agency's action where there is "a 'strong showing of bad faith or improper behavior.'" Though this rule preexisted the Court's decision in Department of Commerce , some plaintiffs could view that decision as signaling a greater receptiveness by the Court to such challenges. This was the view taken by Justice Thomas, who asserted in his dissenting opinion that the Court's decision "opened a Pandora's box of pretext-based challenges" to agency action because "[v]irtually every significant agency action is vulnerable to the kinds of allegations the Court credit[ed]" in its opinion. Some commentators have echoed Justice Thomas's prediction. Perhaps responding to Justice Thomas's concerns, the Court's opinion emphasized that judicial inquiry into an agency's stated reason for its decision should be "rare," explaining that this case involved "unusual circumstances" and was not "a typical case." This limiting language could discourage potential litigants from raising pretext-based challenges to agency action. Redistricting: Rucho v. Common Cause and Lamone v. Benisek172 Partisan gerrymandering, "the drawing of legislative district lines to subordinate adherents of one political party and entrench a rival party in power," is an issue that has vexed the federal courts for more than three decades. On June 27, 2019, by a 5-to-4 vote, the Supreme Court ruled that claims of unconstitutional partisan gerrymandering are not subject to federal court review because they present nonjusticiable political questions, thereby removing the issue from federal courts' purview. In Rucho v. Common Cause and Lamone v. Benisek (hereinafter Rucho ), the Court viewed the Elections Clause of the Constitution as solely assigning disputes about partisan gerrymandering to the state legislatures, subject to a check by the U.S. Congress. Moreover, in contrast to one-person, one-vote and racial gerrymandering claims, the Court determined that no test exists for adjudicating partisan gerrymandering claims that is both judicially discernible and manageable. However, the Court suggested that Congress, as well as state legislatures, could play a role in regulating partisan gerrymandering going forward. Background: Prior to the 1960s, the Supreme Court had determined that challenges to redistricting plans presented nonjusticiable political questions that were most appropriately addressed by the political branches of government, not the judiciary. In 1962, however, in the landmark ruling of Baker v. Carr , the Court held that a constitutional challenge to a redistricting plan is justiciable, identifying factors for determining when a case presents a nonjusticiable political question, including "a lack of [a] judicially discoverable and manageable standard[] for resolving it." Since then, while invalidating redistricting maps on equal protection grounds for other reasonsâbased on inequality of population among districts or one-person, one-vote and as racial gerrymandersâthe Court has not nullified a map because of partisan gerrymandering. In part, the Court has been reluctant to invalidate redistricting maps as impermissibly partisan because redistricting has traditionally been viewed as an inherently political process. Moreover, critics of federal court adjudication of partisan gerrymandering claims have argued that such lawsuits would open the floodgates of litigation and that it would be judicially difficult to police because it is unclear how much partisanship in redistricting is too much. On the other hand, critics of this view have argued that extreme partisan gerrymandering is "incompatible with democratic principles" by entrenching an unaccountable political class in power with the aid of modern redistricting softwareâusing "pinpoint precision" to maximize partisanshipâthereby necessitating some role by the unelected judiciary. In earlier cases presenting a claim of unconstitutional partisan gerrymandering, the Court left open the possibility that such claims could be judicially reviewable, but did not ascertain a discernible and manageable standard for adjudicating such claims. In those rulings, Justice Kennedy cast the deciding vote, leaving open the possibility that claims could be held justiciable in some future case, under a yet-to-be-determined standard. Last year, the Supreme Court considered claims of partisan gerrymandering raising nearly identical questions to those in Rucho , but ultimately issued narrow rulings on procedural grounds specific to those cases. Rucho marked the first opinion on partisan gerrymandering since Justice Kennedy left the Court. Prior to the Supreme Court's consideration, three-judge federal district courts in North Carolina and Maryland invalidated congressional districts as unconstitutional partisan gerrymanders under standards they viewed to be judicially discernible and manageable. In the North Carolina case, the court determined that a redistricting map violates the Equal Protection Clause as an unconstitutional partisan gerrymander when (1) the map drawer's predominant intent was to entrench a specific political party's power; (2) the resulting dilution of voting power by the disfavored party was likely to persist in later elections; and (3) the discriminatory effects were not attributable to other legitimate interests. Further, the court determined that a partisan gerrymandered map may violate provisions in Article I requiring "the People" to select their representatives and limiting the states to determining only "neutral provisions" regarding the "Times, Places, and Manner of holding Elections." Both courts concluded that a redistricting map violates the First Amendment if the challengers demonstrate that (1) the map drawers specifically intended to disadvantage voters based on their party affiliation and voting history; (2)Â the map burdened voters' representational and associational rights; and (3) the map drawers' intent to burden certain voters caused the "adverse impact." Under a provision of federal law providing for direct appeals to the Supreme Court in cases challenging the constitutionality of redistricting maps, North Carolina legislators and Maryland officials appealed to the Supreme Court. Supreme Court's Decision: In Rucho , the Supreme Court held that, based on the political question doctrine, federal courts lack jurisdiction to resolve claims of unconstitutional partisan gerrymandering, vacating and remanding the North Carolina and Maryland lower court rulings with instructions to dismiss for lack of jurisdiction. In an opinion written by Chief Justice Roberts, the Court began by addressing the Framers' views on gerrymandering. According to the majority opinion, at the time of the Constitution's drafting and ratification, the Framers were well familiar with the controversies surrounding the practice of partisan gerrymandering. "At no point" during the Framers' debates, the Court observed, "was there a suggestion that the federal courts had a role to play." Instead, the Chief Justice viewed the Elections Clause as a purposeful assignment of disputes over partisan gerrymandering to the state legislatures, subject to a check by the U.S. Congress. In this vein, the Court noted that Congress has in fact exercised its power under the Elections Clause to address partisan gerrymandering on several occasions, such as by enacting laws to require single-member and compact districts. Nonetheless, the Court acknowledged that there are two areas relating to redistricting where the Court has a unique role in policing the statesâclaims relating to (1) inequality of population among districts or "one-person, one-vote" and (2) racial gerrymandering. However, the Court distinguished those claims from claims of unconstitutional partisan gerrymandering, reasoning that while judicially discernible and manageable standards exist for adjudicating claims relating to one-person, one-vote and racial gerrymandering, partisan gerrymandering cases "have proved far more difficult to adjudicate." This difficulty stems from the fact, the Court explained, that while it is illegal for a redistricting map to violate the one-person, one-vote principle or to engage in racial discrimination, at least some degree of partisan influence in the redistricting process is inevitable and, as the Court has recognized, permissible. Hence, according to the Court, the challenge has been to identify a standard for determining how much partisan gerrymandering is "too much." The Chief Justice's opinion focused on three concerns regarding what he viewed as the central argument for federal adjudication of partisan gerrymandering claims: "an instinct" that if a political party garners a certain share of a statewide vote, as a matter of fairness, courts need to ensure that the party also holds a proportional number of seats in the legislature. First, the Court stated that this expectation "is based on a norm that does not exist in our electoral system." For example, noting her extensive experience in state and local politics, the Court quoted Justice O'Connor's 1986 concurrence that maintained that "[t]he opportunity to control the drawing of electoral boundaries through the legislative process of apportionment is a critical and traditional part of politics in the United States." Furthermore, the Rucho Court observed that the nation's long history of states electing their congressional representatives through "general ticket" or at-large elections typically resulted in single-party congressional delegations. As a result, the Chief Justice explained, for an extended period of American history, a party could achieve nearly half of the statewide vote, but not hold a single seat in the House of Representatives, suggesting that proportional representation was not a value protected by the Constitution. Second, even if proportional representation were a constitutional right, determining how much representation political parties "deserve," based on each party's share of the vote, would require courts to allocate political power, a power to which courts are, in the view of the majority, not "equipped" to exercise. For the Court, resolving questions of fairness presents "basic questions that are political, not legal." Third, even if a court could establish a standard of fairness, the Court determined that there is no discernible and manageable standard for identifying when the amount of political gerrymandering in a redistricting map meets the threshold of unconstitutionality. In so concluding, the Supreme Court rejected the tests that the district courts adopted in ascertaining unconstitutional partisan gerrymandering in North Carolina and Maryland. As to the North Carolina case, the Court criticized the "predominant intent" prong of the test adopted by the district court in holding the map in violation of the Equal Protection Clause. As the Chief Justice explained, although this inquiry is proper in the context of racial gerrymandering claims because drawing district lines based predominantly on race is inherently suspect, it does not apply in the context of partisan gerrymandering where some degree of political influence is permissible. Moreover, responding to the aspect of the test requiring challengers to demonstrate that partisan vote dilution "is likely to persist," the Court concluded that it would require courts to "forecast with unspecified certainty whether a prospective winner will have a margin of victory sufficient to permit him to ignore the supporters of his defeated opponent." That is, according to the Court, judges under this test would "not only have to pick the winnerâthey have to beat the point spread." The Court also disapproved of the test the district courts adopted in both the North Carolina and Maryland cases in holding that the maps violated the First Amendment's guarantee of freedom to associate. As a threshold matter, the Court determined that the subject redistricting plans do not facially restrict speech, association, or any other First Amendment guarantees, as voters in diluted districts remain free to associate and speak on political matters. More directly, the Court concluded that under the premise that partisan gerrymandering constitutes retaliation because of an individual's political views, "any level of partisanship in districting would constitute an infringement of their First Amendment rights." As a consequence, the Court viewed the First Amendment standard as failing to provide a manageable approach for determining when partisan activity has gone too far. In addition, the Court rejected North Carolina's reliance on Article I of the Constitution as the basis to invalidate a redistricting map, concluding that the text of the Constitution provided no enforceable limit for considering partisan gerrymandering claims. Nonetheless, Chief Justice Roberts acknowledged that excessive partisan gerrymandering "reasonably seem[s] unjust," stressing that the ruling "does not condone" the practice. However, he maintained that the Court cannot address the problem simply "because it must," viewing any solutions to extreme partisan gerrymandering to lie with Congress and the states, not the courts. Characterizing the dissent and the challengers' request that the Court ascertain a standard for adjudication as seeking "an unprecedented expansion of judicial power," the Chief Justice cautioned that such an "intervention would be unlimited in scope and duration .Â .Â . recur[ring] over and over again around the country with each new round of redistricting." Instead, he observed that many states have constitutional provisions and laws providing standards for state courts to address excessive partisan gerrymandering, which have been invoked with successful results. Furthermore, citing examples of past and pending federal legislation, the Court reiterated that "the Framers gave Congress the power to do something about partisan gerrymandering in the Elections Clause." Dissenting Opinion: Justice Kagan wrote a dissent on behalf of four Justices arguing that the Court has the power to establish a standard for adjudicating unconstitutionally excessive partisan gerrymandering and that its "abdication" in Rucho "may irreparably damage our system of government." According to the dissent, the standards proposed by the challengers and the lower courts are not "unsupported and out-of-date musings about the unpredictability of the American voter," but instead are "evidence-based, data-based, statistics-based." Moreover, responding to the Court's suggestion that Congress and the states have the power to ameliorate excessive partisan gerrymandering, the dissent maintained that the prospects for legislative reform are poor because the legislators who currently hold power as a result of partisan gerrymandering are unlikely to promote change. Instead, for the dissent, the solution to what they viewed as a crisis of the political process is a means to challenge extreme partisan gerrymandering outside of that process, through the unelected federal judiciary. Implications for Congress: As a result of Rucho , federal courts lack subject-matter jurisdiction to resolve claims of unconstitutional partisan gerrymandering. However, Rucho suggests that Congress and the states may have the power to address extreme partisan gerrymandering should they so choose. For example, as observed by the Court, several bills that take various approaches to address partisan gerrymandering have been introduced in the 116th Congress. For example, H.R. 1 , the For the People Act of 2019, which passed the House of Representatives on March 8, 2019, would eliminate legislatures from the redistricting process and require each state to establish a nonpartisan, independent congressional redistricting commission, in accordance with certain criteria. H.R. 44 , the Coretta Scott King Mid-Decade Redistricting Prohibition Act of 2019, would prohibit states from carrying out more than one congressional redistricting following a decennial census and apportionment, unless a state is ordered by a court to do so in order to comply with the Constitution or to enforce the Voting Rights Act of 1965. (At least one scholar has argued that limiting redistricting to once per decade renders it "less likely that redistricting will occur under conditions favoring partisan gerrymandering.") H.R. 131 , the Redistricting Transparency Act of 2019, would, based on the view that public oversight of redistricting may lessen partisan influence in the process, require state congressional redistricting entities to establish and maintain a public internet site and conduct redistricting under procedures that provide opportunities for public participation. Notably, the Court in Rucho specifically stated that it expressed "no view" on any pending proposals, but observed "that the avenue for reform established by the Framers, and used by Congress in the past, remains open." With regard to the states, Rucho does not preclude state courts from considering such claims under applicable state constitutional provisions. For example, in 2015, the Florida Supreme Court invalidated a Florida congressional redistricting map as violating a state constitutional provision addressing partisan gerrymandering. Similarly, in 2018, the Pennsylvania Supreme Court struck down the state's congressional redistricting map under a Pennsylvania constitutional provision. Looking ahead, as a result of Rucho , such state remedies, coupled with any congressional action, will likely be the primary means for regulating excessive partisan influence in the redistricting process. First Amendment Religious Displays: American Legion v. American Humanist Association242 In American Legion v. American Humanist Association , the Supreme Court held that the Bladensburg Peace Cross, a public World War I memorial in the form of a Latin cross, did not violate the First Amendment's Establishment Clause. A divided Court also limited the applicability of Lemon v. Kurtzman , a long-standingâbut often-questioned âprecedent that had previously supplied the primary standard for evaluating Establishment Clause claims. However, the separate opinions from the Court gave rise to a number of significant questions. In particular, there was no single majority opinion agreeing on what test should apply in future Establishment Clause claims. Further, the Court left open the possibility that the Lemon test, and the specific considerations it suggests courts should take into account, may continue to govern certain types of Establishment Clause challenges. Background: The First Amendment's Establishment Clause provides that the government "shall make no law respecting an establishment of religion." The Court has long interpreted this requirement to require the government to be "neutral" toward religionâbut over the years, the Supreme Court has employed a variety of different inquiries to determine whether challenged government practices are sufficiently neutral. In Lemon , decided in 1971, the Court synthesized its prior Establishment Clause decisions into a three-part test, saying that to be considered constitutional, government action (1) "must have a secular legislative purpose"; (2) must have a "principal or primary effect . . . that neither advances nor inhibits religion"; and (3) "must not foster an excessive government entanglement with religion." However, the Court has not always applied the Lemon test to analyze Establishment Clause challenges. For instance, in cases evaluating the constitutionality of government-sponsored prayer before legislative sessions, the Court has asked whether the disputed prayer practice "is supported by this country's history and tradition." The Court has also adopted variations on Lemon , most notably using an "endorsement" test that asks "whether the challenged governmental practice either has the purpose or effect of 'endorsing' religion." Thus, in 2018, Justice Thomas said that the Court's "Establishment Clause jurisprudence is in disarray." Justice Thomas and other Justices have argued that the Court should abandon Lemon and instead adopt a single approach to interpreting the Clauseâone that can be applied consistently. The Court's divergent approaches to evaluating Establishment Clause claims were apparent in two cases, issued on the same day in 2005, that involved government-sponsored displays containing religious symbols. In the first case, McCreary County v. ACLU , the Court applied the Lemon test and held that Ten Commandments displays in two Kentucky courthouses likely violated the Establishment Clause. In the second, Van Orden v. Perry , a plurality of the Court argued that like legislative prayers, religious displays should be evaluated primarily by reference to "our Nation's history." Justice Breyer concurred in the Court's judgment in Van Orden , providing the fifth vote to uphold a Ten Commandments display on the grounds of the Texas State Capitol. Justice Breyer stated that that while he believed the particular monument did " satisfy [the] Court ' s more formal Establishment Clause tests, " including Lemon , his view of the case was also driven by a number of other factors, including the monument ' s history and physical setting. In particular, he emphasized that the monument had gone legally unchallenged for 40 years . Under the circumstances, Justice Breyer argued that removing or altering the monument would likely be "divisive" in a way that the monument itself was not, exhibiting "a hostility toward religion that has no place in our Establishment Clause traditions." The plaintiffs in American Legion argued that Maryland violated the Establishment Clause by maintaining a war memorial known as the Bladensburg Peace Cross. The monument is a 32-foot Latin cross that sits on a large base containing a plaque with the names of 49 Prince George's County soldiers who died in World War I. The Fourth Circuit had agreed with the challengers and held that after looking to the Lemon test and giving "due consideration" to the "factors" set forth in Justice Breyer's Van Orden concurrence, the memorial violated the First Amendment. Supreme Court's Decision: The Supreme Court reversed the Fourth Circuit's decision. But while seven Justices ultimately approved of the Peace Cross, they did so in six different opinions, reflecting disagreement about how, exactly, to resolve the case. Justice Alito wrote the opinion for the American Legion Court, although certain portions of that opinion represented only a plurality. Writing for five members of the Court, Justice Alito's majority opinion relied on some of the factors highlighted by Justice Breyer's concurring opinion in Van Orden ânamely, the fact that this particular monument had "stood undisturbed for nearly a century" and had "acquired historical importance" to the community. The Court acknowledged that the cross is a Christian symbol, but viewed the symbol as taking on "an added secular meaning when used in World War I memorials." Under these circumstances, the Court concluded that requiring the state to "destroy[] or defac[e]" the Peace Cross "would not be neutral" with respect to religion "and would not further the ideals of respect and tolerance embodied in the First Amendment." Concurring and Dissenting Opinions: A different majority of Justices voted to limit the applicability of the Lemon testâalthough no five Justices agreed just how far to limit Lemon . Justice Alito, writing for a four-Justice plurality, suggested that "longstanding monuments, symbols, and practices" should not be evaluated under Lemon , but should instead be considered constitutional so long as they "follow in" a historical "tradition" of religious accommodation. Justices Thomas and Gorsuch wrote separate concurrences disapproving of Lemon more generally. Justice Thomas argued that the Court should "overrule the Lemon test in all contexts" and instead analyze Establishment Clause claims by reference to historical forms of "coercion." Justice Gorsuch viewed Lemon as a "misadventure," expressing concerns about that test and suggesting instead that the Court should look to historical practice and traditions in Establishment Clause challenges. Therefore, it appears that Lemon will no longer be used to assess the constitutionality of "longstanding monuments, symbols, and practices." Justice Ginsburg dissented, joined by Justice Sotomayor. She stressed the cross's religious nature, observing that it has become a marker for Christian soldiers' graves "precisely because" the cross symbolizes "sectarian beliefs." Her analysis did not expressly invoke the three-part Lemon test, but applied the "endorsement" test developed from Lemon , asking whether the display conveyed "a message that religion or a particular religious belief is favored or preferred." Looking to the memorial's nature and history, Justice Ginsburg believed that the Peace Cross did convey a message of endorsement. Ultimately, she concluded that by maintaining the monument, the state impermissibly "elevate[d] Christianity over other faiths, and religion over nonreligion." Implications for Congress: While American Legion was ostensibly concerned with the constitutionality of a single monument, the Court's decision raises a number of questions regarding future interpretations of the Establishment Clause. First, while the plurality opinion said that "monuments, symbols, and practices with a longstanding history" should now be evaluated by reference to historical practices rather than the Lemon test, it is not clear what qualifies as a long-standing symbol or practice. Further, it is unclear whether the historical practice test will apply outside of the context of challenges to monuments or legislative prayer . Indeed, two of the Justices who joined the plurality opinionâJustices Breyer and Kavanaughâwrote separate opinions suggesting that other factors in addition to historical practice may be relevant to evaluating Establishment Clause challenges. More broadly, however, regardless of the particular test employed, the opinions in American Legion suggest that the Roberts Court may be adopting a view of the Establishment Clause that is more accommodating of government sponsorship of religious displays and practicesâeven where those practices are aligned with a particular religion. Given that a majority of Justices agreed in American Legion that at least with respect to government use of religious symbols, "[t]he passage of time gives rise to a strong presumption of constitutionality," it seems likely that courts will view Establishment Clause challenges to long-standing monuments with significant skepticism moving forward. Separation of Powers Nondelegation Doctrine: Gundy v. United States289 In affirming the petitioner's conviction for violating the Sex Offender Registration and Notification Act (SORNA), a divided Supreme Court in Gundy v. United States upheld the constitutionality of Congress's delegated authority to the U.S. Attorney General to apply registration requirements to offenders convicted prior to SORNA's enactment. In a plurality opinion written on behalf of four Justices, Justice Kagan concluded that SORNA's delegation "easily passes constitutional muster" and was "distinctively small-bore" when compared to the other broad delegations the Court has upheld since 1935. Justice Gorsuch's dissent, joined by Chief Justice Roberts and Justice Thomas, highlighted an emerging split on the Court's approach in reviewing authority Congress delegates to another branch of government. Providing the fifth vote to affirm Gundy's conviction, Justice Alito concurred in the judgment only, declining to join Justice Kagan's opinion and indicating his willingness to rethink the Court's approach to the nondelegation doctrine, which seeks to bar Congress from delegating its legislative powers to other branches of government. After Gundy , whether the Court revives the long-dormant nondelegation doctrine likely depends on Justice Kavanaugh's views on the doctrine. (Justice Kavanaugh, who was not confirmed to the Court at the time of oral arguments, took no part in the Gundy decision. ) Background: Article I, Section 1 of the Constitution provides that "[a]ll legislative Powers herein granted" will be vested in the United States Congress. The Supreme Court has held that the "text in [Article I's Vesting Clause] permits no delegation of those powers." The nondelegation doctrine, as crafted by the courts, exists mainly to prevent Congress from ceding its legislative power to other entities and, in so doing, maintain the separation of powers among the three branches of government. At the same time, the Court has recognized that the nondelegation doctrine does not require complete separation of the three branches of government, permitting Congress to delegate certain powers to implement and enforce the law. To determine whether a delegation of authority is constitutional, the Court has required that Congress lay out an "intelligible principle" to guide the delegee's discretion and constrain its authority. Under the lenient "intelligible principle" standard that has its origins in the 1928 decision J.W. Hampton, Jr., & Co. v. United States , the Court has relied on the nondelegation doctrine twice, in 1935, to invalidate two provisions in the National Industrial Recovery Act delegating authority to the President, rejecting every nondelegation challenge thereafter. Gundy , the latest nondelegation challenge at the Supreme Court, centered on the application of registration requirements under SORNA to pre-act offenders. Enacted as Title I of the Adam Walsh Child Protection and Safety Act of 2006, SORNA's stated purpose is "to protect the public from sex offenders and offenders against children" by establishing a comprehensive national registration system of offenders. To this end, SORNA requires convicted sex offenders to register in each state where the offender resides, is employed, or is a student. Section 20913(d) of SORNA authorizes the Attorney General to "specify the applicability" of the registration requirements "to sex offenders convicted before the enactment" of the act and to "prescribe rules for the registration of any such sex offenders" and for other offenders unable to comply with the initial registration requirements. As decided by the Court in Reynolds v. United States , the law's registration requirements did not apply to pre-SORNA offenders until the Attorney General so specified. Accordingly, in a series of interim and final rules and guidance documents issued between 2007 and 2011, the Attorney General specified that SORNA's requirements apply to all sex offenders, including sex offenders convicted before the statute's enactment. Before the enactment of SORNA, petitioner Herman Gundy was convicted of a sex offense in Maryland. After serving his sentence, Gundy traveled from Maryland to New York. Subsequently, he was arrested and convicted for failing to register as a sex offender in New York under SORNA. In his petition to the Supreme Court, Gundy argued, among other things, that SORNA's grant of "undirected discretion" to the Attorney General to decide whether to apply the statute to pre-SORNA offenders is an unconstitutional delegation of legislative power to the executive branch. Supreme Court's Decision: In Gundy, Justice Kagan announced the judgment of the Court, affirming the lower court, and authored a plurality opinion joined by Justices Ginsburg, Breyer, and Sotomayor that followed the modern approach toward the nondelegation doctrine, rejecting Gundy's argument that Congress unconstitutionally delegated "quintessentially legislative powers" to the Attorney General to decide whether to apply the statute to pre-SORNA offenders. Relying on Reynolds , Justice Kagan read SORNA as requiring the Attorney General to "apply SORNA's registration requirements as soon as feasible to offenders convicted before the statute's enactment." Based on this interpretation, the plurality decided that Congress did not violate the nondelegation doctrine based on the Court's "long established law" in upholding broad delegations. The plurality explained that under the intelligible principle standard, so long as Congress has made clear the "general policy" and boundaries of the delegation, such broad delegations are permissible. Compared to very broad delegations upheld in the past (e.g., delegations to agencies to regulate in the "public's interest"), the plurality concluded that the Attorney General's "temporary authority" to delay the application of SORNA's registration requirements to pre-act offenders due to feasibility concerns "falls well within constitutional bounds." Dissenting and Concurring Opinions: In contrast, in his dissent, Justice Gorsuch, joined by Chief Justice Roberts and Justice Thomas, viewed the plain text of the delegation as providing the Attorney General limitless and "vast" discretion and "free rein" to impose (or not) selected registration requirements on pre-act offenders. In concluding the delegation to be unconstitutional, Justice Gorsuch distinguished his analysis from the plurality and the Court's precedents by focusing on the separation-of-powers principles that underpin the nondelegation doctrine. In the dissent's view, the nondelegation doctrine used to serve a vital role in maintaining the separation of powers among the branches of government by assuring that elected Members of Congress fulfill their constitutional lawmaking duties. Justice Gorsuch warned that delegating Congress's constitutional legislative duties to the executive branch bypasses the bicameral legislative process, resulting in laws that fail to protect minority interests or provide political accountability or fair notice. Consequently, the dissent faulted the "evolving intelligible principle" standard and increasingly broad delegations as pushing the nondelegation doctrine further from its separation-of-powers roots. Arguing for a more robust review of congressional delegations, Justice Gorsuch outlined several "guiding principles." According to the dissent, Congress could permissibly delegate (1) authority to another branch of government to "fill up the details" of Congress's policies regulating private conduct; (2)Â fact-finding to the executive branch as a condition to applying legislative policy; or (3) nonlegislative responsibilities that are within the scope of another branch of government's vested powers (e.g., assign foreign affairs powers that are constitutionally vested in the President). Applying these "traditional" separation-of-powers tests in lieu of the plurality's "intelligible principle" approach, Justice Gorsuch concluded that SORNA's delegation was an unconstitutional breach of the separation between the legislative and executive branches. He argued that SORNA lacked a "single policy decision concerning pre-Act offenders" and delegated more than the power to fill the details to the Attorney General. The dissent disputed the plurality's comparison of SORNA's delegation to other broad delegations that the Court has upheld, reasoning that "there isn't . . . a single other case where we have upheld executive authority over matters like these on the ground they constitute mere 'details.'" Further, he asserted that the delegation is neither conditional legislation subject to executive fact-finding nor a delegation of powers vested in the executive branch because determining the rights and duties of citizens is "quintessentially legislative power." In "a future case with a full panel," Justice Gorsuch hoped that the Court would recognize that "while Congress can enlist considerable assistance from the executive branch in filling up details and finding facts, it may never hand off to the nation's chief prosecutor the power to write his own criminal code. That 'is delegation running riot.'" Although Justice Alito voiced "support [for the] effort" of the dissent in rethinking the Court's approach to the nondelegation doctrine, he opted to not join that effort without the support of the majority of the Court. As a result, Justice Alito concurred in the judgment of the Court in affirming the petitioner's conviction. In his brief, five-sentence concurring opinion, Justice Alito viewed a "discernable standard [in SORNA's delegation] that is adequate under the approach this Court has taken for many years." Implications for Congress: The divided opinions in Gundy signal a potential shift in the Court's approach in nondelegation challenges and potential resurrection of the nondelegation doctrine. With three Justices and the Chief Justice in Gundy willing to reconsider or redefine the Court's "intelligible principle" standard, Justice Kavanaugh, who did not participate in Gundy , appears likely to be the critical vote to break the tie in a future case considering a revitalization of the nondelegation principle. If the Court were to replace the modern intelligible principle approach, new challenges may arise in determining when Congress crosses the nondelegation line. A more restrictive nondelegation standard could invite constitutional challenges to many other statutory provisions that delegate broad authority and discretion to the executive branch to issue and enforce regulations. The significance of these challenges was the subject of a debate between the Gundy plurality and dissent. Justice Kagan cautioned that striking down SORNA's delegation as unconstitutional would make most of Congress's delegations to the executive branch unconstitutional because Congress relies on broad delegations to executive agencies to implement its policies. However, Justice Gorsuch countered that "respecting the separation of powers" does not prohibit Congress from authorizing the executive branch to fill in details, find facts that trigger applicable statutory requirements, or exercise nonlegislative powers. A future case may provide the Court with the opportunity to provide guidance to the courts and Congress on how precise Congress must be in its delegation and how best to draw the line between permissible and impermissible delegations. For now, however, the current intelligible principle standard in use since 1935 survives while the nondelegation doctrine continues to remain "moribund."	Summary:	gov_report	1,024	null	48
crs_R46361	crs_R46361_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction This report provides an overview of the FY2020 Defense Appropriations Act ( P.L. 116-93 ) and serves as an access portal to other CRS products providing additional context, detail, and analysis relevant to particular aspects of that legislation. The following Overview tracks the legislative history of the FY2020 defense appropriations act and summarizes the budgetary and strategic context within which it was being debated. Subsequent sections of the report summarize the act's treatment of major components of the Trump Administration's budget request, including selected weapons acquisition programs and other provisions. Overview For FY2020, the Trump Administration requested a total of $750.0 billion in discretionary budget authority for national defense-related activities. This included $718.3 billion (95.8% of the total) for the military activities of the Department of Defense (DOD). The balance of the national defense budget request is for defense-related activities of the Energy Department and other agencies. Of the amount requested for DOD, $689.5 billion fell within the scope of the annual defense appropriations bill, as did $1.1 billion for certain expenses of the intelligence community. This bill does not include funding for military construction and family housing, which is provided by the appropriations bill that funds those activities, the Department of Veterans Affairs, and certain other agencies. Also not included in the FY2020 defense bill is $7.8 billion in accrual payments to fund the TRICARE for Life program of medical insurance for military retirees, funding for which is appropriated automatically each year, as a matter of permanent law (10 U.S.C. 1111-1117). (See Figure 1 .) The FY2020 Defense Appropriations Act, enacted as Division A of H.R. 1158 , the Consolidated Appropriations Act for FY2020, provides a total of $687.8 billion for DOD, which is $2.86 billion less than President Trump requested for FY 2020. (See Table 1 .) Base Budget, OCO, and Emergency Spending Since the terrorist attacks of September 11, 2001, DOD has organized its budget requests in various ways to designate funding for activities that either are related to the aftermath of those attacks or otherwise are distinct from regularly recurring costs to man, train, and equip U.S. armed forces for the long haul. The latter are funds that have come to be referred to as DOD's "base budget." Since 2009, the non-base budget funds have been designated as funding for Overseas Contingency Operations (OCO). Since enactment of the Budget Control Act (BCA) of 2011 ( P.L. 112-25 ), which set binding annual caps on defense and non-defense discretionary spending, the OCO designation has taken on additional significance. Spending designated by the President and Congress as OCO or for emergency requirements (such as the storm damage remediation funds in the enacted FY2020 defense bill) is effectively exempt from the spending caps. Under the law in effect when the FY2020 budget was submitted to Congress, the defense spending cap for FY2020 was $576.2 billion. The Administration's FY2020 budget request for defense-related programs included that amount for the base budget plus an additional $97.9 billion that also was intended to fund base budget activities but which was designated as OCO funding, in order to avoid exceeding the statutory defense spending cap. The Armed Services and Appropriations Committees of both the Senate and the House treated the "OCO for base" funds as part of the base budget request. The issue became moot with the enactment on August 2, 2019 of the Bipartisan Budget Act of 2019 ( P.L. 116-37 ) which raised the defense spending cap for FY2020 to $666.5 billion. Legislative History Separate versions of the FY2020 defense appropriations bill were reported by the Appropriations Committees of the House and Senate. After the House committee reported its version ( H.R. 2968 ), the text of that bill was incorporated into H.R. 2740 , which the House passed on June 19, 2019, by a vote of 226-203. The Senate committee reported its version of the bill ( S. 2474 ) on September 12, 2019, but the Senate took no action on that measure. A compromise version of the defense bill was agreed by House and Senate negotiators and then was incorporated by amendment into another bill ( H.R. 1158 ), which was passed by both chambers. (See Table 2 .) In the absence of a formal conference report on the bill, House Appropriations Committee Chairman Nita Lowey inserted in the Congressional Record an Explanatory Statement to accompany the enacted version of H.R. 1158 . Strategic Context The President's FY2020 budget request for DOD reflects a shift in strategic emphasis based on the 2018 National Defense Strategy (NDS), which called for "increased and sustained investment" to counter evolving threats from China and Russia. This marks a change from the focus of U.S. national security policy for nearly the past three decades and a renewed emphasis on competition between nuclear-armed powers, which had been the cornerstone of U.S. strategy for more than four decades after the end of World War II. During the Cold War, U.S. national security policy and the design of the U.S. military establishment were focused on the strategic competition with the Union of Soviet Socialist Republics and on containing the spread of communism globally. In the years following the collapse of the Soviet Union, U.S. policies were designed â and U.S. forces were trained and equipped â largely with an eye on dealing with potential regional aggressors such as Iraq, Iran, and North Korea and recalibrating relations with China and Russia. After the terrorist attacks of September 11, 2001, U.S. national security policy and DOD planning focused largely on countering terrorism and insurgencies in the Middle East while containing, if not reversing, North Korean and Iranian nuclear weapons programs. However, as a legacy of the Cold War, U.S. and allied military forces had overwhelming military superiority over these adversaries and, accordingly, counter-terrorism and counterinsurgency operations were conducted in relatively permissive environments. The 2014 Russian invasion of the Crimean peninsula and subsequent proxy war in eastern Ukraine fostered a renewed concern in the United States and in Europe about an aggressive and revanchist regime in Moscow. Meanwhile, China began building and militarizing islands in the South China Sea in order to lay claim to key shipping lanes and to reinforce its claims to sovereignty over the South China Sea, itself. Together, these events highlighted anew the salience in the U.S. national security agenda of competing with other great powers , that is, states able and willing to use military force unilaterally to accomplish their objectives. At the same time, the challenges that had surfaced at the end of the Cold War (e.g., fragile states, genocide, terrorism, and nuclear proliferation) remained serious threats to U.S. interests. In some cases, adversaries appear to be collaborating to achieve shared or compatible objectives and to take advantage of social and economic tools to advance their agendas. Some states are also collaborating with non-state proxies (including, but not limited to, militias, criminal networks, corporations, and hackers) and deliberately blurring the lines between conventional and irregular conflict and between civilian and military activities. In this complex security environment, conceptualizing, prioritizing, and managing these numerous problems, arguably, is more difficult than it was in eras past. The Trump Administration's December 2017 National Security Strategy (NSS) and the 11-page unclassified summary of the January 2018 National Defense Strategy (NDS) explicitly reorient U.S. national security strategy (including defense strategy) toward a primary focus on great power competition with China and Russia and on countering their military capabilities. In addition to explicitly making great power competition the primary U.S. national security concern, the NDS also argues for a focus on bolstering the competitive advantage of U.S. forces, which, the document contends, has eroded in recent decades vis-Ã -vis the Chinese and Russian threats. The NDS also maintains that, contrary to what was the case for most of the years since the end of the Cold War, U.S. forces now must assume that their ability to approach military objectives will be vigorously contested. The Trump Administration's strategic orientation, as laid out in the NSS and NDS is consistent with the strategy outlined in comparable documents issued by prior Administrations, in identifying five significant external threats to U.S. interests: China, Russia, North Korea, Iran, and terrorist groups with global reach. In a break from previous Administrations, however, the NDS views retaining the U.S. strategic competitive edge relative to China and Russia as a higher priority than countering violent extremist organizations. Accordingly, the new orientation for U.S. strategy is sometimes referred to a "2+3" strategy, meaning a strategy for countering two primary challenges (China and Russia) and three additional challenges (North Korea, Iran, and terrorist groups). Budgetary Context In the more than four decades since the end of U.S. military involvement in Vietnam, annual outlays by the federal government have increased by a factor of nine. The fastest growing segment of federal spending during that period has been mandatory spending for entitlement programs such as Social Security, Medicare, and Medicaid. (See Figure 2 .) Over the past decade, a central consideration in congressional budgeting was the Budget Control Act of 2011 (BCA; P.L. 112-25 ) as amended, which was intended to control federal spending by enforcement through sequestration of government operating budgets in case discretionary spending budgets failed to meet separate caps on defense and nondefense discretionary budget authority. The act established binding annual limits (or caps) to reduce discretionary federal spending through FY2021 by $1.0 trillion. Sequestration provides for the automatic cancellation of previous appropriations, to reduce discretionary spending to the BCA cap for the year in question. The caps on defense-related spending apply to discretionary funding for DOD and for defense-related activities by other agencies, comprising the national defense budget function which is designated budget function 050 . The caps do not apply to funding designated by Congress and the president as emergency spending or spending on OCO. Congress repeatedly has enacted legislation to raise the annual spending caps. However, at the time the Administration submitted its budget request for FY2020, the national defense spending cap for that year remained $576 billion â a level enacted in 2013 that was $71 billion lower than the revised cap for FY2019. To avert a nearly 11% reduction in defense spending, the Administration's FY2020 base budget request conformed to the then-binding defense cap. But the Administration's FY2020 request also included $165 billion designated as OCO funding (and thus exempt from the cap) of which $98 billion was intended for base budget purposes. The Armed Services and Appropriations Committees of the House and Senate disregarded this tactic, and considered all funding for base budget purposes as part of the base budget request. Selected Elements of the Act Military Personnel Issues Military End-strength P.L. 116-93 funds the Administration's proposal for a relatively modest net increase in the number of active-duty military personnel in all four armed forces, but includes a reduction of 7,500 in the end-strength of the Army. According to Army budget documents, the reduction was based on the fact that the service had not met higher end-strength goals in FY2018. The act also funds the proposed reduction in the end-strength of the Selected Reserve â those members of the military reserve components and the National Guard who are organized into operational units that routinely drill, usually on a monthly basis. (See Table 3 ) Military Pay Raise As was authorized by the FY2020 National Defense Authorization Act ( P.L. 116-92 ), P.L. 116-93 funds a 3.1% increase in military basic pay that took effect on January 1, 2020. Sexual Assault Prevention and Treatment The act appropriates $61.7 million for DOD's Sexual Assault Prevention and Response Office (SAPRO), adding to the amount requested $35.0 million for the Special Victims' Counsel (SVC) program . The SVC organization provides independent legal counsel in the military justice system to alleged victims of sexual assault. The act also provides $3.0 million (not requested) to fund a pilot program for treatment of military personnel for Post-Traumatic Stress Disorder related to sexual trauma. The program was authorized by Section 702 of the FY2019 National Defense Authorization Act ( P.L. 115-232 ). Child Care P.L. 116-93 added a total of $110 million to the $1.1 billion requested for DOD's childcare program. This is the largest employer-sponsored childcare program in the United States, with roughly 23,000 employees attending to nearly 200,000 children of uniformed service members and DOD civilians. The act and its accompanying explanatory statement let stand a requirement in the Senate Appropriations Committee report on S. 2474 for the Secretary of Defense to give Congress a detailed report on DOD's childcare system including plans to increase its capacity and a prioritized list of the top 50 childcare center construction requirements. Strategic, Nuclear-armed Systems P.L. 116-93 generally supports the Administration's FY2020 budget request to continue the across-the-board modernization of nuclear and other long-range strike weapons started by the Obama Administration. The Trump Administration's FY2020 budget documentation described as DOD's "number one priority" this modernization of the so-called nuclear triad: ballistic missile-launching submarines, long-range bombers, and land-based intercontinental ballistic missiles (ICBMs). Hypersonic Weapons P.L. 116-93 generally supported the Administration's effort to develop an array of long-range missiles that could travel at hypersonic speed â that is, upwards of five times the speed of sound (3,800 mph) â and that would be sufficiently accurate to strike distant targets with conventional (non-nuclear) warheads. Although ballistic missiles travel as fast, the types of weapons being developed under the "hypersonic" label differ in that they can maneuver throughout most of their flight trajectory. DOD has funded development of hypersonic weapons since the early 2000s. However, partly because of reports that China and Russia are developing such weapons, DOD identified hypersonic weapons as an R&D priority in its FY2019 budget request and is seeking â and securing from Congress â funding to accelerate the U.S. hypersonic program. The FY2020 DOD budget request continued this trend, and Congress supported it in the enacted FY2020 defense appropriations bill. P.L. 116-93 also provided more than three times the amount requested to develop defenses against hypersonic missiles. Such weapons are difficult to detect and track because of the low altitude at which they fly and are difficult to intercept because of their combination of speed and maneuverability. The act also added $100 million, not requested, to create a Joint Hypersonics Transition Office to coordinate hypersonic R&D programs across DOD. In the Explanatory Statement accompanying the enacted FY2020 defense bill, House and Senate negotiators expressed a concern that the rapid growth in funding for hypersonic weapons development might result in duplication of effort among the services and increased costs. Ballistic Missile Defense Systems In general, P.L. 116-93 supported the Administration's proposals to strengthen defenses against ballistic missile attacks, whether by ICBMs aimed at U.S. territory, or missiles of shorter range aimed at U.S. forces stationed abroad, or at the territory of allied countries. The missile defense budget request reflected recommendations of the Administration's Missile Defense Review , published in January 2019. (See Table 6 ) U.S. Homeland Missile Defense Programs Compared with the Administration's budget request, P.L. 116-93 shifted several hundred million dollars among various components of the system intended to defend U.S. territory against ICBMs. In the explanatory statement accompanying the bill, House and Senate negotiators indicated that the impetus for these changes was DOD's August 2019 cancellation of an effort to develop an improved warhead -- designated the Replacement Kill Vehicle (RKV) -- to be carried by the system's Ground-Based Interceptors (GBIs). Partly by reallocating funds that had been requested for the RKV programs, the act provides a total of $515.0 million to develop an improved interceptor missile that would replace the GBI and its currently deployed kill vehicle. It also provides: $285 million for additional GBI missiles and support equipment; and $180 million for R&D intended to improve the reliability GBIs. Defense Space Programs P.L. 116-93 was generally supportive of the Administration's funding requests for acquisition of military space satellites and satellite launches. (See Table 7 .) Space Force O&M Funding Congress approved $40.0 million of the $72.4 million requested for operation of the newly created Space Force, authorized by P.L. 116-92 , the FY2020 National Defense Authorization Act. The Explanatory Statement accompanying the bill asserted that DOD had provided insufficient justification for the Space Force budget request. Therefore, DOD received nearly 44% less in Space Force operating funds than it requested. The Explanatory Statement also directed the Secretary of the Air Force to give the congressional defense committees a month-by-month spending plan for FY2020 Space Force O&M funding. Ground Combat Systems The act supported major elements of the Army's plan to upgrade its currently deployed fleet of ground-combat vehicles. One departure from that plan was the act's provision of 30% more than was requested to increase the firepower of the Stryker wheeled troop-carrier. The program would replace that vehicle's .50 caliber machine gun â effective against personnel â with a 30 mm cannon that could be effective against lightly armored vehicles. (See Table 8 .) Army Modernization Plan The act sends a mixed message regarding congressional support for the Army's strategy for developing a new suite of combat capabilities. The service plans to pay for the new programs â in part -- with funds it anticipated in future budgets that were slated to pay for continuation of upgrade programs for existing systems. Under the Army's new plan, those older programs would be truncated to free up the anticipated funds. In effect, this means that planned upgrades to legacy systems would not occur so investments in development of new systems could be made sooner. The Army has proposed that programs to upgrade Bradley fighting vehicles and CH-47 Chinook helicopters be among those utilized as these "bill-payers". The enacted bill provides one-third less than was requested for Bradley upgrades, with the $223.0 million that was cut being labelled by the Explanatory Statement as "excess to need." However, the enacted version of the appropriations bill â like the versions of that bill passed by the House and Senate â provides nearly triple the amount requested for the Chinook upgrade, appropriating $46.2 million rather than the $18.2 million requested. The amount appropriated is the amount that had been planned for the Chinook upgrade in FY2020, prior to the publication of the Army's new modernization plan. In the reports accompanying their respective versions of the bill, the House and Senate Appropriations Committees each had challenged the Army's plan to forego upgrades to the existing CH-47 fleet. Optionally Manned Fighting Vehicle (OMFV) P.L. 116-93 reined in the Army's third effort in 20 years to develop a replacement for the 1980s-vintage Bradley infantry fighting vehicle, providing $205.6 million of the $378.4 million requested for the Optionally-Manned Fighting Vehicle (OMFV) program. The program had come under fire on grounds that it was too technologically ambitious to be managed under a streamlined acquisition process (Section 804 authority), as the Army proposed. The issue became moot after P.L. 116-93 was enacted, when the Army announced on January 16, 2020, that it was cancelling the OMFV contracting plan and restarting it with new design parameters. Military Aviation Systems P.L. 116-93 generally supports the budget request for the major aviation programs of all four armed forces. (See Table 9 ) Chinook Helicopter Upgrades An indicator of potential future disagreements between Congress and the Army was the act's insistence that a planned upgrade of the service's CH-47 Chinook helicopter continue as had been planned prior to submission of the FY2020 budget request. As discussed above, this is one of several programs to improve currently deployed equipment that the Army wants to curtail in order to free up funds in future budgets for the wide-ranging modernization strategy it announced in late 2019. Prior to tagging the program as a "bill-payer" for new programs, the Army had projected a FY2020 request of $46.4 million associated with procurement of improved "Block II" CH-47s. The amended FY2020 request for the program was $18.2 million, reflecting the Army's decision to truncate the planned procurement. The enacted version of the FY2020 defense bill â like the versions passed by the House and approved by the Senate Appropriations Committee â provided $46.2 million for the program. F-15 Fighter The act provides $985.5 million of the $1.05 billion requested for eight F-15s to partly fill the gap in Air Force fighter strength resulting from later-than-planned fielding of the F-35A Joint Strike Fighter. The act shifted funds for two of the eight aircraft and some design efforts (a total of $364.4 million) to the Air Force's Research and Development account on grounds that those F-15s would be used for testing. The Explanatory Statement accompanying the act directs the Secretary of the Air Force to provide the House and Senate Armed Services and Appropriations Committees with a review of options for reducing the Air Force's shortfall in its planned complement of fighters. Shipbuilding Programs P.L. 116-93 supports major elements of the Navy's shipbuilding budget request. The request in turn reflects a 2016 plan to increase the size of the fleet to 355 ships, a target some 15% higher than the force goal set by the previous Navy plan. The request included â and the act generally supports â funds to begin construction of a number of relatively large, unmanned surface and subsurface ships that carry weapons and sensors and would further enlarge the force. The act departed from the budget request on two issues that involved more than $1 billion apiece: It denied a total of $3.2 billion budgeted for one of the three Virginia -class submarines included in the Administration's request, adding $1.4 billion of those funds instead to the funds requested (and approved by the act) for the other two subs. The increase is intended to pay for incorporating into the two funded ships the so-called Virginia Payload Module -- an 84-foot-long, mid-body section equipped with four large-diameter, vertical launch tubes for storing and launching additional Tomahawk missiles or other payloads. It provided a total of $1.2 billion, not requested, for specialized ships and a landing craft to support amphibious landings by Marine Corps units. (See Table 10 .) Notes: The Appendix lists the full citation of each CRS product cited in this table by its ID number. Appendix. CRS Reports, In Focus, and Insights Following, in numerical order, are the full citations of CRS products cited in this report. CRS Reports CRS Report RS20643, Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress , by Ronald O'Rourke. CRS Report RL30563, F-35 Joint Strike Fighter (JSF) Program , by Jeremiah Gertler. CRS Report RL30624, Navy F/A-18E/F and EA-18G Aircraft Program , by Jeremiah Gertler. CRS Report RL31384, V-22 Osprey Tilt-Rotor Aircraft Program , by Jeremiah Gertler. CRS Report RL32109, Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress , by Ronald O'Rourke. CRS Report RL32418, Navy Virginia (SSN-774) Class Attack Submarine Procurement: Background and Issues for Congress , by Ronald O'Rourke. CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress , by Ronald O'Rourke. CRS Report RL33640, U.S. Strategic Nuclear Forces: Background, Developments, and Issues , by Amy F. Woolf. CRS Report R41129, Navy Columbia (SSBN-826) Class Ballistic Missile Submarine Program: Background and Issues for Congress , by Ronald O'Rourke. CRS Report R42972, Sequestration as a Budget Enforcement Process: Frequently Asked Questions , by Megan S. Lynch. CRS Report R43049, U.S. Air Force Bomber Sustainment and Modernization: Background and Issues for Congress , by Jeremiah Gertler. CRS Report R43240, The Army's Armored Multi-Purpose Vehicle (AMPV): Background and Issues for Congress , by Andrew Feickert. CRS Report R43838, Renewed Great Power Competition: Implications for DefenseâIssues for Congress , by Ronald O'Rourke. CRS Report R43543, Navy LPD-17 Flight II and LHA Amphibious Ship Programs: Background and Issues for Congress , by Ronald O'Rourke. CRS Report R43546, Navy John Lewis (TAO-205) Class Oiler Shipbuilding Program: Background and Issues for Congress , by Ronald O'Rourke. CRS Report R44039, The Defense Budget and the Budget Control Act: Frequently Asked Questions , by Brendan W. McGarry. CRS Report R44229, The Army's M-1 Abrams, M-2/M-3 Bradley, and M-1126 Stryker: Background and Issues for Congress , by Andrew Feickert. CRS Report R44463, Air Force B-21 Raider Long-Range Strike Bomber , by Jeremiah Gertler. CRS Report R44519, Overseas Contingency Operations Funding: Background and Status , by Brendan W. McGarry and Emily M. Morgenstern. CRS Report R44874, The Budget Control Act: Frequently Asked Questions , by Grant A. Driessen and Megan S. Lynch. CRS Report R44891, U.S. Role in the World: Background and Issues for Congress , by Ronald O'Rourke and Michael Moodie. CRS Report R44968, Infantry Brigade Combat Team (IBCT) Mobility, Reconnaissance, and Firepower Programs , by Andrew Feickert. CRS Report R44972, Navy Frigate (FFG[X]) Program: Background and Issues for Congress , by Ronald O'Rourke. CRS Report R45288, Military Child Development Program: Background and Issues , by Kristy N. Kamarck. CRS Report R45349, The 2018 National Defense Strategy: Fact Sheet , by Kathleen J. McInnis. CRS Report R45519, The Army's Optionally Manned Fighting Vehicle (OMFV) Program: Background and Issues for Congress , by Andrew Feickert. CRS Report R45811, Hypersonic Weapons: Background and Issues for Congress , by Kelley M. Sayler. CRS Report R46002, Military Funding for Border Barriers: Catalogue of Interagency Decisionmaking , by Christopher T. Mann and Sofia Plagakis. CRS Report R46107, FY2020 National Defense Authorization Act: Selected Military Personnel Issues , coordinated by Bryce H. P. Mendez. CRS Report R46211, National Security Space Launch , by Stephen M. McCall. CRS Report R46216, The Army's Modernization Strategy: Congressional Oversight Considerations , by Andrew Feickert and Brendan W. McGarry. Congressional In Focus CRS In Focus IF10541, Defense Primer: Ballistic Missile Defense , by Stephen M. McCall. CRS In Focus IF10657, Budgetary Effects of the BCA as Amended: The "Parity Principle" , by Grant A. Driessen. CRS In Focus IF11244, FY2020 National Security Space Budget Request: An Overview , by Stephen M. McCall and Brendan W. McGarry. CRS In Focus IF11326, Military Space Reform: FY2020 NDAA Legislative Proposals , by Stephen M. McCall. Congressional Insights CRS Insight IN11052, The Defense Department and 10 U.S.C. 284: Legislative Origins and Funding Questions , by Liana W. Rosen. CRS Insight IN11083, FY2020 Defense Budget Request: An Overview , by Brendan W. McGarry and Christopher T. Mann. CRS Insight IN11148, The Bipartisan Budget Act of 2019: Changes to the BCA and Debt Limit , by Grant A. Driessen and Megan S. Lynch. CRS Insight IN11210, Possible Use of FY2020 Defense Funds for Border Barrier Construction: Context and Questions , by Christopher T. Mann. Summary:	null	96	29,043	29,045	29,045	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction This report provides an overview of the FY2020 Defense Appropriations Act ( P.L. 116-93 ) and serves as an access portal to other CRS products providing additional context, detail, and analysis relevant to particular aspects of that legislation. The following Overview tracks the legislative history of the FY2020 defense appropriations act and summarizes the budgetary and strategic context within which it was being debated. Subsequent sections of the report summarize the act's treatment of major components of the Trump Administration's budget request, including selected weapons acquisition programs and other provisions. Overview For FY2020, the Trump Administration requested a total of $750.0 billion in discretionary budget authority for national defense-related activities. This included $718.3 billion (95.8% of the total) for the military activities of the Department of Defense (DOD). The balance of the national defense budget request is for defense-related activities of the Energy Department and other agencies. Of the amount requested for DOD, $689.5 billion fell within the scope of the annual defense appropriations bill, as did $1.1 billion for certain expenses of the intelligence community. This bill does not include funding for military construction and family housing, which is provided by the appropriations bill that funds those activities, the Department of Veterans Affairs, and certain other agencies. Also not included in the FY2020 defense bill is $7.8 billion in accrual payments to fund the TRICARE for Life program of medical insurance for military retirees, funding for which is appropriated automatically each year, as a matter of permanent law (10 U.S.C. 1111-1117). (See Figure 1 .) The FY2020 Defense Appropriations Act, enacted as Division A of H.R. 1158 , the Consolidated Appropriations Act for FY2020, provides a total of $687.8 billion for DOD, which is $2.86 billion less than President Trump requested for FY 2020. (See Table 1 .) Base Budget, OCO, and Emergency Spending Since the terrorist attacks of September 11, 2001, DOD has organized its budget requests in various ways to designate funding for activities that either are related to the aftermath of those attacks or otherwise are distinct from regularly recurring costs to man, train, and equip U.S. armed forces for the long haul. The latter are funds that have come to be referred to as DOD's "base budget." Since 2009, the non-base budget funds have been designated as funding for Overseas Contingency Operations (OCO). Since enactment of the Budget Control Act (BCA) of 2011 ( P.L. 112-25 ), which set binding annual caps on defense and non-defense discretionary spending, the OCO designation has taken on additional significance. Spending designated by the President and Congress as OCO or for emergency requirements (such as the storm damage remediation funds in the enacted FY2020 defense bill) is effectively exempt from the spending caps. Under the law in effect when the FY2020 budget was submitted to Congress, the defense spending cap for FY2020 was $576.2 billion. The Administration's FY2020 budget request for defense-related programs included that amount for the base budget plus an additional $97.9 billion that also was intended to fund base budget activities but which was designated as OCO funding, in order to avoid exceeding the statutory defense spending cap. The Armed Services and Appropriations Committees of both the Senate and the House treated the "OCO for base" funds as part of the base budget request. The issue became moot with the enactment on August 2, 2019 of the Bipartisan Budget Act of 2019 ( P.L. 116-37 ) which raised the defense spending cap for FY2020 to $666.5 billion. Legislative History Separate versions of the FY2020 defense appropriations bill were reported by the Appropriations Committees of the House and Senate. After the House committee reported its version ( H.R. 2968 ), the text of that bill was incorporated into H.R. 2740 , which the House passed on June 19, 2019, by a vote of 226-203. The Senate committee reported its version of the bill ( S. 2474 ) on September 12, 2019, but the Senate took no action on that measure. A compromise version of the defense bill was agreed by House and Senate negotiators and then was incorporated by amendment into another bill ( H.R. 1158 ), which was passed by both chambers. (See Table 2 .) In the absence of a formal conference report on the bill, House Appropriations Committee Chairman Nita Lowey inserted in the Congressional Record an Explanatory Statement to accompany the enacted version of H.R. 1158 . Strategic Context The President's FY2020 budget request for DOD reflects a shift in strategic emphasis based on the 2018 National Defense Strategy (NDS), which called for "increased and sustained investment" to counter evolving threats from China and Russia. This marks a change from the focus of U.S. national security policy for nearly the past three decades and a renewed emphasis on competition between nuclear-armed powers, which had been the cornerstone of U.S. strategy for more than four decades after the end of World War II. During the Cold War, U.S. national security policy and the design of the U.S. military establishment were focused on the strategic competition with the Union of Soviet Socialist Republics and on containing the spread of communism globally. In the years following the collapse of the Soviet Union, U.S. policies were designed â and U.S. forces were trained and equipped â largely with an eye on dealing with potential regional aggressors such as Iraq, Iran, and North Korea and recalibrating relations with China and Russia. After the terrorist attacks of September 11, 2001, U.S. national security policy and DOD planning focused largely on countering terrorism and insurgencies in the Middle East while containing, if not reversing, North Korean and Iranian nuclear weapons programs. However, as a legacy of the Cold War, U.S. and allied military forces had overwhelming military superiority over these adversaries and, accordingly, counter-terrorism and counterinsurgency operations were conducted in relatively permissive environments. The 2014 Russian invasion of the Crimean peninsula and subsequent proxy war in eastern Ukraine fostered a renewed concern in the United States and in Europe about an aggressive and revanchist regime in Moscow. Meanwhile, China began building and militarizing islands in the South China Sea in order to lay claim to key shipping lanes and to reinforce its claims to sovereignty over the South China Sea, itself. Together, these events highlighted anew the salience in the U.S. national security agenda of competing with other great powers , that is, states able and willing to use military force unilaterally to accomplish their objectives. At the same time, the challenges that had surfaced at the end of the Cold War (e.g., fragile states, genocide, terrorism, and nuclear proliferation) remained serious threats to U.S. interests. In some cases, adversaries appear to be collaborating to achieve shared or compatible objectives and to take advantage of social and economic tools to advance their agendas. Some states are also collaborating with non-state proxies (including, but not limited to, militias, criminal networks, corporations, and hackers) and deliberately blurring the lines between conventional and irregular conflict and between civilian and military activities. In this complex security environment, conceptualizing, prioritizing, and managing these numerous problems, arguably, is more difficult than it was in eras past. The Trump Administration's December 2017 National Security Strategy (NSS) and the 11-page unclassified summary of the January 2018 National Defense Strategy (NDS) explicitly reorient U.S. national security strategy (including defense strategy) toward a primary focus on great power competition with China and Russia and on countering their military capabilities. In addition to explicitly making great power competition the primary U.S. national security concern, the NDS also argues for a focus on bolstering the competitive advantage of U.S. forces, which, the document contends, has eroded in recent decades vis-Ã -vis the Chinese and Russian threats. The NDS also maintains that, contrary to what was the case for most of the years since the end of the Cold War, U.S. forces now must assume that their ability to approach military objectives will be vigorously contested. The Trump Administration's strategic orientation, as laid out in the NSS and NDS is consistent with the strategy outlined in comparable documents issued by prior Administrations, in identifying five significant external threats to U.S. interests: China, Russia, North Korea, Iran, and terrorist groups with global reach. In a break from previous Administrations, however, the NDS views retaining the U.S. strategic competitive edge relative to China and Russia as a higher priority than countering violent extremist organizations. Accordingly, the new orientation for U.S. strategy is sometimes referred to a "2+3" strategy, meaning a strategy for countering two primary challenges (China and Russia) and three additional challenges (North Korea, Iran, and terrorist groups). Budgetary Context In the more than four decades since the end of U.S. military involvement in Vietnam, annual outlays by the federal government have increased by a factor of nine. The fastest growing segment of federal spending during that period has been mandatory spending for entitlement programs such as Social Security, Medicare, and Medicaid. (See Figure 2 .) Over the past decade, a central consideration in congressional budgeting was the Budget Control Act of 2011 (BCA; P.L. 112-25 ) as amended, which was intended to control federal spending by enforcement through sequestration of government operating budgets in case discretionary spending budgets failed to meet separate caps on defense and nondefense discretionary budget authority. The act established binding annual limits (or caps) to reduce discretionary federal spending through FY2021 by $1.0 trillion. Sequestration provides for the automatic cancellation of previous appropriations, to reduce discretionary spending to the BCA cap for the year in question. The caps on defense-related spending apply to discretionary funding for DOD and for defense-related activities by other agencies, comprising the national defense budget function which is designated budget function 050 . The caps do not apply to funding designated by Congress and the president as emergency spending or spending on OCO. Congress repeatedly has enacted legislation to raise the annual spending caps. However, at the time the Administration submitted its budget request for FY2020, the national defense spending cap for that year remained $576 billion â a level enacted in 2013 that was $71 billion lower than the revised cap for FY2019. To avert a nearly 11% reduction in defense spending, the Administration's FY2020 base budget request conformed to the then-binding defense cap. But the Administration's FY2020 request also included $165 billion designated as OCO funding (and thus exempt from the cap) of which $98 billion was intended for base budget purposes. The Armed Services and Appropriations Committees of the House and Senate disregarded this tactic, and considered all funding for base budget purposes as part of the base budget request. Selected Elements of the Act Military Personnel Issues Military End-strength P.L. 116-93 funds the Administration's proposal for a relatively modest net increase in the number of active-duty military personnel in all four armed forces, but includes a reduction of 7,500 in the end-strength of the Army. According to Army budget documents, the reduction was based on the fact that the service had not met higher end-strength goals in FY2018. The act also funds the proposed reduction in the end-strength of the Selected Reserve â those members of the military reserve components and the National Guard who are organized into operational units that routinely drill, usually on a monthly basis. (See Table 3 ) Military Pay Raise As was authorized by the FY2020 National Defense Authorization Act ( P.L. 116-92 ), P.L. 116-93 funds a 3.1% increase in military basic pay that took effect on January 1, 2020. Sexual Assault Prevention and Treatment The act appropriates $61.7 million for DOD's Sexual Assault Prevention and Response Office (SAPRO), adding to the amount requested $35.0 million for the Special Victims' Counsel (SVC) program . The SVC organization provides independent legal counsel in the military justice system to alleged victims of sexual assault. The act also provides $3.0 million (not requested) to fund a pilot program for treatment of military personnel for Post-Traumatic Stress Disorder related to sexual trauma. The program was authorized by Section 702 of the FY2019 National Defense Authorization Act ( P.L. 115-232 ). Child Care P.L. 116-93 added a total of $110 million to the $1.1 billion requested for DOD's childcare program. This is the largest employer-sponsored childcare program in the United States, with roughly 23,000 employees attending to nearly 200,000 children of uniformed service members and DOD civilians. The act and its accompanying explanatory statement let stand a requirement in the Senate Appropriations Committee report on S. 2474 for the Secretary of Defense to give Congress a detailed report on DOD's childcare system including plans to increase its capacity and a prioritized list of the top 50 childcare center construction requirements. Strategic, Nuclear-armed Systems P.L. 116-93 generally supports the Administration's FY2020 budget request to continue the across-the-board modernization of nuclear and other long-range strike weapons started by the Obama Administration. The Trump Administration's FY2020 budget documentation described as DOD's "number one priority" this modernization of the so-called nuclear triad: ballistic missile-launching submarines, long-range bombers, and land-based intercontinental ballistic missiles (ICBMs). Hypersonic Weapons P.L. 116-93 generally supported the Administration's effort to develop an array of long-range missiles that could travel at hypersonic speed â that is, upwards of five times the speed of sound (3,800 mph) â and that would be sufficiently accurate to strike distant targets with conventional (non-nuclear) warheads. Although ballistic missiles travel as fast, the types of weapons being developed under the "hypersonic" label differ in that they can maneuver throughout most of their flight trajectory. DOD has funded development of hypersonic weapons since the early 2000s. However, partly because of reports that China and Russia are developing such weapons, DOD identified hypersonic weapons as an R&D priority in its FY2019 budget request and is seeking â and securing from Congress â funding to accelerate the U.S. hypersonic program. The FY2020 DOD budget request continued this trend, and Congress supported it in the enacted FY2020 defense appropriations bill. P.L. 116-93 also provided more than three times the amount requested to develop defenses against hypersonic missiles. Such weapons are difficult to detect and track because of the low altitude at which they fly and are difficult to intercept because of their combination of speed and maneuverability. The act also added $100 million, not requested, to create a Joint Hypersonics Transition Office to coordinate hypersonic R&D programs across DOD. In the Explanatory Statement accompanying the enacted FY2020 defense bill, House and Senate negotiators expressed a concern that the rapid growth in funding for hypersonic weapons development might result in duplication of effort among the services and increased costs. Ballistic Missile Defense Systems In general, P.L. 116-93 supported the Administration's proposals to strengthen defenses against ballistic missile attacks, whether by ICBMs aimed at U.S. territory, or missiles of shorter range aimed at U.S. forces stationed abroad, or at the territory of allied countries. The missile defense budget request reflected recommendations of the Administration's Missile Defense Review , published in January 2019. (See Table 6 ) U.S. Homeland Missile Defense Programs Compared with the Administration's budget request, P.L. 116-93 shifted several hundred million dollars among various components of the system intended to defend U.S. territory against ICBMs. In the explanatory statement accompanying the bill, House and Senate negotiators indicated that the impetus for these changes was DOD's August 2019 cancellation of an effort to develop an improved warhead -- designated the Replacement Kill Vehicle (RKV) -- to be carried by the system's Ground-Based Interceptors (GBIs). Partly by reallocating funds that had been requested for the RKV programs, the act provides a total of $515.0 million to develop an improved interceptor missile that would replace the GBI and its currently deployed kill vehicle. It also provides: $285 million for additional GBI missiles and support equipment; and $180 million for R&D intended to improve the reliability GBIs. Defense Space Programs P.L. 116-93 was generally supportive of the Administration's funding requests for acquisition of military space satellites and satellite launches. (See Table 7 .) Space Force O&M Funding Congress approved $40.0 million of the $72.4 million requested for operation of the newly created Space Force, authorized by P.L. 116-92 , the FY2020 National Defense Authorization Act. The Explanatory Statement accompanying the bill asserted that DOD had provided insufficient justification for the Space Force budget request. Therefore, DOD received nearly 44% less in Space Force operating funds than it requested. The Explanatory Statement also directed the Secretary of the Air Force to give the congressional defense committees a month-by-month spending plan for FY2020 Space Force O&M funding. Ground Combat Systems The act supported major elements of the Army's plan to upgrade its currently deployed fleet of ground-combat vehicles. One departure from that plan was the act's provision of 30% more than was requested to increase the firepower of the Stryker wheeled troop-carrier. The program would replace that vehicle's .50 caliber machine gun â effective against personnel â with a 30 mm cannon that could be effective against lightly armored vehicles. (See Table 8 .) Army Modernization Plan The act sends a mixed message regarding congressional support for the Army's strategy for developing a new suite of combat capabilities. The service plans to pay for the new programs â in part -- with funds it anticipated in future budgets that were slated to pay for continuation of upgrade programs for existing systems. Under the Army's new plan, those older programs would be truncated to free up the anticipated funds. In effect, this means that planned upgrades to legacy systems would not occur so investments in development of new systems could be made sooner. The Army has proposed that programs to upgrade Bradley fighting vehicles and CH-47 Chinook helicopters be among those utilized as these "bill-payers". The enacted bill provides one-third less than was requested for Bradley upgrades, with the $223.0 million that was cut being labelled by the Explanatory Statement as "excess to need." However, the enacted version of the appropriations bill â like the versions of that bill passed by the House and Senate â provides nearly triple the amount requested for the Chinook upgrade, appropriating $46.2 million rather than the $18.2 million requested. The amount appropriated is the amount that had been planned for the Chinook upgrade in FY2020, prior to the publication of the Army's new modernization plan. In the reports accompanying their respective versions of the bill, the House and Senate Appropriations Committees each had challenged the Army's plan to forego upgrades to the existing CH-47 fleet. Optionally Manned Fighting Vehicle (OMFV) P.L. 116-93 reined in the Army's third effort in 20 years to develop a replacement for the 1980s-vintage Bradley infantry fighting vehicle, providing $205.6 million of the $378.4 million requested for the Optionally-Manned Fighting Vehicle (OMFV) program. The program had come under fire on grounds that it was too technologically ambitious to be managed under a streamlined acquisition process (Section 804 authority), as the Army proposed. The issue became moot after P.L. 116-93 was enacted, when the Army announced on January 16, 2020, that it was cancelling the OMFV contracting plan and restarting it with new design parameters. Military Aviation Systems P.L. 116-93 generally supports the budget request for the major aviation programs of all four armed forces. (See Table 9 ) Chinook Helicopter Upgrades An indicator of potential future disagreements between Congress and the Army was the act's insistence that a planned upgrade of the service's CH-47 Chinook helicopter continue as had been planned prior to submission of the FY2020 budget request. As discussed above, this is one of several programs to improve currently deployed equipment that the Army wants to curtail in order to free up funds in future budgets for the wide-ranging modernization strategy it announced in late 2019. Prior to tagging the program as a "bill-payer" for new programs, the Army had projected a FY2020 request of $46.4 million associated with procurement of improved "Block II" CH-47s. The amended FY2020 request for the program was $18.2 million, reflecting the Army's decision to truncate the planned procurement. The enacted version of the FY2020 defense bill â like the versions passed by the House and approved by the Senate Appropriations Committee â provided $46.2 million for the program. F-15 Fighter The act provides $985.5 million of the $1.05 billion requested for eight F-15s to partly fill the gap in Air Force fighter strength resulting from later-than-planned fielding of the F-35A Joint Strike Fighter. The act shifted funds for two of the eight aircraft and some design efforts (a total of $364.4 million) to the Air Force's Research and Development account on grounds that those F-15s would be used for testing. The Explanatory Statement accompanying the act directs the Secretary of the Air Force to provide the House and Senate Armed Services and Appropriations Committees with a review of options for reducing the Air Force's shortfall in its planned complement of fighters. Shipbuilding Programs P.L. 116-93 supports major elements of the Navy's shipbuilding budget request. The request in turn reflects a 2016 plan to increase the size of the fleet to 355 ships, a target some 15% higher than the force goal set by the previous Navy plan. The request included â and the act generally supports â funds to begin construction of a number of relatively large, unmanned surface and subsurface ships that carry weapons and sensors and would further enlarge the force. The act departed from the budget request on two issues that involved more than $1 billion apiece: It denied a total of $3.2 billion budgeted for one of the three Virginia -class submarines included in the Administration's request, adding $1.4 billion of those funds instead to the funds requested (and approved by the act) for the other two subs. The increase is intended to pay for incorporating into the two funded ships the so-called Virginia Payload Module -- an 84-foot-long, mid-body section equipped with four large-diameter, vertical launch tubes for storing and launching additional Tomahawk missiles or other payloads. It provided a total of $1.2 billion, not requested, for specialized ships and a landing craft to support amphibious landings by Marine Corps units. (See Table 10 .) Notes: The Appendix lists the full citation of each CRS product cited in this table by its ID number. Appendix. CRS Reports, In Focus, and Insights Following, in numerical order, are the full citations of CRS products cited in this report. CRS Reports CRS Report RS20643, Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress , by Ronald O'Rourke. CRS Report RL30563, F-35 Joint Strike Fighter (JSF) Program , by Jeremiah Gertler. CRS Report RL30624, Navy F/A-18E/F and EA-18G Aircraft Program , by Jeremiah Gertler. CRS Report RL31384, V-22 Osprey Tilt-Rotor Aircraft Program , by Jeremiah Gertler. CRS Report RL32109, Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress , by Ronald O'Rourke. CRS Report RL32418, Navy Virginia (SSN-774) Class Attack Submarine Procurement: Background and Issues for Congress , by Ronald O'Rourke. CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress , by Ronald O'Rourke. CRS Report RL33640, U.S. Strategic Nuclear Forces: Background, Developments, and Issues , by Amy F. Woolf. CRS Report R41129, Navy Columbia (SSBN-826) Class Ballistic Missile Submarine Program: Background and Issues for Congress , by Ronald O'Rourke. CRS Report R42972, Sequestration as a Budget Enforcement Process: Frequently Asked Questions , by Megan S. Lynch. CRS Report R43049, U.S. Air Force Bomber Sustainment and Modernization: Background and Issues for Congress , by Jeremiah Gertler. CRS Report R43240, The Army's Armored Multi-Purpose Vehicle (AMPV): Background and Issues for Congress , by Andrew Feickert. CRS Report R43838, Renewed Great Power Competition: Implications for DefenseâIssues for Congress , by Ronald O'Rourke. CRS Report R43543, Navy LPD-17 Flight II and LHA Amphibious Ship Programs: Background and Issues for Congress , by Ronald O'Rourke. CRS Report R43546, Navy John Lewis (TAO-205) Class Oiler Shipbuilding Program: Background and Issues for Congress , by Ronald O'Rourke. CRS Report R44039, The Defense Budget and the Budget Control Act: Frequently Asked Questions , by Brendan W. McGarry. CRS Report R44229, The Army's M-1 Abrams, M-2/M-3 Bradley, and M-1126 Stryker: Background and Issues for Congress , by Andrew Feickert. CRS Report R44463, Air Force B-21 Raider Long-Range Strike Bomber , by Jeremiah Gertler. CRS Report R44519, Overseas Contingency Operations Funding: Background and Status , by Brendan W. McGarry and Emily M. Morgenstern. CRS Report R44874, The Budget Control Act: Frequently Asked Questions , by Grant A. Driessen and Megan S. Lynch. CRS Report R44891, U.S. Role in the World: Background and Issues for Congress , by Ronald O'Rourke and Michael Moodie. CRS Report R44968, Infantry Brigade Combat Team (IBCT) Mobility, Reconnaissance, and Firepower Programs , by Andrew Feickert. CRS Report R44972, Navy Frigate (FFG[X]) Program: Background and Issues for Congress , by Ronald O'Rourke. CRS Report R45288, Military Child Development Program: Background and Issues , by Kristy N. Kamarck. CRS Report R45349, The 2018 National Defense Strategy: Fact Sheet , by Kathleen J. McInnis. CRS Report R45519, The Army's Optionally Manned Fighting Vehicle (OMFV) Program: Background and Issues for Congress , by Andrew Feickert. CRS Report R45811, Hypersonic Weapons: Background and Issues for Congress , by Kelley M. Sayler. CRS Report R46002, Military Funding for Border Barriers: Catalogue of Interagency Decisionmaking , by Christopher T. Mann and Sofia Plagakis. CRS Report R46107, FY2020 National Defense Authorization Act: Selected Military Personnel Issues , coordinated by Bryce H. P. Mendez. CRS Report R46211, National Security Space Launch , by Stephen M. McCall. CRS Report R46216, The Army's Modernization Strategy: Congressional Oversight Considerations , by Andrew Feickert and Brendan W. McGarry. Congressional In Focus CRS In Focus IF10541, Defense Primer: Ballistic Missile Defense , by Stephen M. McCall. CRS In Focus IF10657, Budgetary Effects of the BCA as Amended: The "Parity Principle" , by Grant A. Driessen. CRS In Focus IF11244, FY2020 National Security Space Budget Request: An Overview , by Stephen M. McCall and Brendan W. McGarry. CRS In Focus IF11326, Military Space Reform: FY2020 NDAA Legislative Proposals , by Stephen M. McCall. Congressional Insights CRS Insight IN11052, The Defense Department and 10 U.S.C. 284: Legislative Origins and Funding Questions , by Liana W. Rosen. CRS Insight IN11083, FY2020 Defense Budget Request: An Overview , by Brendan W. McGarry and Christopher T. Mann. CRS Insight IN11148, The Bipartisan Budget Act of 2019: Changes to the BCA and Debt Limit , by Grant A. Driessen and Megan S. Lynch. CRS Insight IN11210, Possible Use of FY2020 Defense Funds for Border Barrier Construction: Context and Questions , by Christopher T. Mann.	Summary:	gov_report	1,024	null	49
crs_R46016	crs_R46016_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The current trajectory of democracy around the world is an issue of interest for Congress, which has contributed to U.S. democracy promotion objectives overseas. For decades, U.S. policy has broadly reflected the view that the spread of democracy around the world is favorable to U.S. interests. This report provides a regional snapshot of the political climate in Latin America and the Caribbean, based on the U.S. Department of State's description of each country's political system and selected nongovernmental (NGO) indices that measure democracy trends worldwide. For additional information on democracy in the global context, see CRS Report R45344, Global Trends in Democracy: Background, U.S. Policy, and Issues for Congress , by Michael A. Weber. For related information about democracy in Latin American and the Caribbean, see the following products: CRS In Focus IF10460, Latin America and the Caribbean: U.S. Policy Overview , by Mark P. Sullivan; CRS Report R45547, U.S. Foreign Assistance to Latin America and the Caribbean: FY2019 Appropriations , by Peter J. Meyer and Edward Y. Gracia; CRS Report 98-684, Latin America and the Caribbean: Fact Sheet on Leaders and Elections , by Carla Y. Davis-Castro; and CRS Report R45733, Combating Corruption in Latin America: Congressional Considerations , coordinated by June S. Beittel. CRS also publishes reports on specific Latin American and Caribbean countries. Source Notes This report compiles information from the U.S. State Department and data from four nongovernmental (NGO) indices. For a discussion about definitions of democracy and critiques of democracy indices, see CRS Report R45344, Global Trends in Democracy: Background, U.S. Policy, and Issues for Congress , by Michael A. Weber. CRS does not endorse the methodology or accuracy of any particular democracy index. In parentheses following the country name in the tables below is the nature of the country's political system, as described in the U.S. State Department's 2018 Country Reports on Human Rights Practices . While the publication focuses broadly on human rights conditions in each country, the first sentence of each country report provides a characterization of the country's political system. This U.S. government information is included here for comparison with findings from the democracy indicators published by NGOs. Bertelsmann Stiftung, a private foundation based in Germany, has published the Bertelsmann Transformation Index (BTI) biannually since 2006. Key regional findings and country reports are available in English (BTI publishes the full regional report in German). BTI 2018 evaluates the quality of democracy, a market economy, and political management in 129 developing and transition countries. For political transformation specifically, BTI ranks countries using 18 indicators grouped into five criteria: (1) stateness, (2) political participation, (3) rule of law, (4) stability of democratic institutions, and (5) political and social integration. Based on the criteria, BTI assigns a category: democracy in consolidation, defective democracy, highly defective democracy, moderate autocracy , and hardline autocracy . In its regional report, BTI notes that since 2008, it "has recorded a decline in the quality of democracy in Latin Americaânot dramatic, but continual." BTI evaluates all Central and South American nations. With the exception of Cuba, the Dominican Republic, Haiti, and Jamaica, BTI does not evaluate Caribbean nations. The Economist Intelligence Unit (EIU), based in London and New York, has offices and analysts in various countries. Since 2006, EIU has produced a democracy index that provides an annual snapshot of the state of democracy for 165 independent states and two territories. The EIU classifies countries as full democracies , flawed democracies , hybrid regimes , or authoritarian regimes based on an aggregate score of 60 indicators in five categories: (1) electoral process and pluralism, (2) civil liberties, (3) the functioning of government, (4) political participation, and (5) political culture. According to the EIU's Democracy Index 2018 , the Latin America and Caribbean region's overall score went down from 6.26 in 2017 to 6.24 in 2018 (on a 0 to 10 scale). The two countries in the region classified in 2018 as full democracies are Uruguay and, new to the group, Costa Rica. EIU's Democracy Index 2018 identified three countries in the region as authoritarian regimes: Nicaragua moved to join Venezuela and Cuba. EIU evaluates all Central and South American nations. With the exceptions of Cuba, the Dominican Republic, Guyana, Haiti, Jamaica, Suriname, and Trinidad and Tobago, EIU does not evaluate Caribbean nations. Freedom House is a U.S.-based NGO that conducts research on democracy, political freedom, and human rights worldwide. It has published Freedom in the World since 1978, and the current report covers 195 countries and 14 territories. Freedom House assigns each country 0 to 4 points on 25 indicators (10 political rights indicators and 15 civil liberties indicators) for a total of up to 100 points. The scores determine numerical ratings for political rights and civil liberties freedoms on a scale of 1 (most free) to 7 (least free). The political rights and civil liberties ratings are averaged to produce an overall status of free, partly free , or not free. Freedom House's report covering 2018 found that Nicaragua was the country with the greatest decline in the world regarding conditions for political rights and civil liberties as compared to 2017. Venezuela had the third-greatest decline; Brazil, El Salvador, and Guatemala also made the top 20 for steepest declines. The report's analysis is based on data that are detailed in full on the Freedom House web page on "Countries," which ranks the state of democracy for 197 countries and 15 territories. This web page lists the top three aggregate scores in Latin America and the Caribbean: Uruguay, Barbados, and Chile; the region's lowest aggregate scores are those for Nicaragua, Venezuela, and Cuba. Freedom House evaluates democracy in all Central and South American and Caribbean nations. The Varieties of Democracy Institute (V-DEM), headquartered at the University of Gothenburg in Sweden, collects democracy data through its research team in collaboration with country experts. In 2017, V-Dem published its first global report measuring the status of democracy with an index. Democracy Report 2019 includes the Liberal Democracy Index, which examines 71 indicators included in the Liberal Component Index and the Electoral Democracy Index. V-Dem groups 179 countries into four categories: liberal democracy , electoral democracy , electoral autocracy , and closed autocracy . The current report notes "the regional average for Latin America is down to 0.51 in 2018, bringing the region back to about 1996-levels." V-DEM evaluates all Central and South American nations. With the exceptions of Barbados, Cuba, the Dominican Republic, Guyana, Haiti, Jamaica, Suriname, and Trinidad and Tobago, V-DEM does not evaluate Caribbean nations. Table 1 looks at Caribbean countries' global democracy rankings according to EIU's Democracy Index 2018 , Freedom House's Freedom in the World 2019 , V-Dem's Democracy Report 2019 , and Bertelsmann Stiftung's 2018 Transformation Index. Table 2 compares the same reports for Mexico and Central America, as does Table 3 for South America. Each report evaluates a different number of countries, so there are missing rankings for some countries. Countries are listed alphabetically in each table. Figure 1 shows the global rank and classification of all Central and South American and Caribbean countries according to the Political Transformation Rank, a component of the 2018 Bertelsmann Stiftung Transformation Index (BTI). Figure 2 shows the global rank and classification of Central and South American and Caribbean countries according to the EIU's Democracy Index 2018 . Figure 3 shows the aggregate scores of all Central and South American and Caribbean countries according to the Freedom House country web page for Freedom in the World 2019 . Countries receive 0 to 4 points on 25 indicators (10 political rights indicators and 15 civil liberties indicators) for a total of up to 100 points. Figure 4 shows the political rights and civil liberties scores of all Central and South American and Caribbean countries according to Freedom House's Freedom in the World 2019 . The scale used is 1-7, with 1 indicating the most free conditions and 7 the least free. Figure 5 shows the liberal democracy index rank and classification of all Central and South American and Caribbean countries according to the Varieties of Democracy Institute's Democracy Report 2019 . Table 4 provides resources for further information about democracy indicators in Central and South America and the Caribbean, although many cover other geographic areas as well. The sources are organized alphabetically by title. This is not an exhaustive list. Summary:	null	96	9,176	9,178	9,178	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The current trajectory of democracy around the world is an issue of interest for Congress, which has contributed to U.S. democracy promotion objectives overseas. For decades, U.S. policy has broadly reflected the view that the spread of democracy around the world is favorable to U.S. interests. This report provides a regional snapshot of the political climate in Latin America and the Caribbean, based on the U.S. Department of State's description of each country's political system and selected nongovernmental (NGO) indices that measure democracy trends worldwide. For additional information on democracy in the global context, see CRS Report R45344, Global Trends in Democracy: Background, U.S. Policy, and Issues for Congress , by Michael A. Weber. For related information about democracy in Latin American and the Caribbean, see the following products: CRS In Focus IF10460, Latin America and the Caribbean: U.S. Policy Overview , by Mark P. Sullivan; CRS Report R45547, U.S. Foreign Assistance to Latin America and the Caribbean: FY2019 Appropriations , by Peter J. Meyer and Edward Y. Gracia; CRS Report 98-684, Latin America and the Caribbean: Fact Sheet on Leaders and Elections , by Carla Y. Davis-Castro; and CRS Report R45733, Combating Corruption in Latin America: Congressional Considerations , coordinated by June S. Beittel. CRS also publishes reports on specific Latin American and Caribbean countries. Source Notes This report compiles information from the U.S. State Department and data from four nongovernmental (NGO) indices. For a discussion about definitions of democracy and critiques of democracy indices, see CRS Report R45344, Global Trends in Democracy: Background, U.S. Policy, and Issues for Congress , by Michael A. Weber. CRS does not endorse the methodology or accuracy of any particular democracy index. In parentheses following the country name in the tables below is the nature of the country's political system, as described in the U.S. State Department's 2018 Country Reports on Human Rights Practices . While the publication focuses broadly on human rights conditions in each country, the first sentence of each country report provides a characterization of the country's political system. This U.S. government information is included here for comparison with findings from the democracy indicators published by NGOs. Bertelsmann Stiftung, a private foundation based in Germany, has published the Bertelsmann Transformation Index (BTI) biannually since 2006. Key regional findings and country reports are available in English (BTI publishes the full regional report in German). BTI 2018 evaluates the quality of democracy, a market economy, and political management in 129 developing and transition countries. For political transformation specifically, BTI ranks countries using 18 indicators grouped into five criteria: (1) stateness, (2) political participation, (3) rule of law, (4) stability of democratic institutions, and (5) political and social integration. Based on the criteria, BTI assigns a category: democracy in consolidation, defective democracy, highly defective democracy, moderate autocracy , and hardline autocracy . In its regional report, BTI notes that since 2008, it "has recorded a decline in the quality of democracy in Latin Americaânot dramatic, but continual." BTI evaluates all Central and South American nations. With the exception of Cuba, the Dominican Republic, Haiti, and Jamaica, BTI does not evaluate Caribbean nations. The Economist Intelligence Unit (EIU), based in London and New York, has offices and analysts in various countries. Since 2006, EIU has produced a democracy index that provides an annual snapshot of the state of democracy for 165 independent states and two territories. The EIU classifies countries as full democracies , flawed democracies , hybrid regimes , or authoritarian regimes based on an aggregate score of 60 indicators in five categories: (1) electoral process and pluralism, (2) civil liberties, (3) the functioning of government, (4) political participation, and (5) political culture. According to the EIU's Democracy Index 2018 , the Latin America and Caribbean region's overall score went down from 6.26 in 2017 to 6.24 in 2018 (on a 0 to 10 scale). The two countries in the region classified in 2018 as full democracies are Uruguay and, new to the group, Costa Rica. EIU's Democracy Index 2018 identified three countries in the region as authoritarian regimes: Nicaragua moved to join Venezuela and Cuba. EIU evaluates all Central and South American nations. With the exceptions of Cuba, the Dominican Republic, Guyana, Haiti, Jamaica, Suriname, and Trinidad and Tobago, EIU does not evaluate Caribbean nations. Freedom House is a U.S.-based NGO that conducts research on democracy, political freedom, and human rights worldwide. It has published Freedom in the World since 1978, and the current report covers 195 countries and 14 territories. Freedom House assigns each country 0 to 4 points on 25 indicators (10 political rights indicators and 15 civil liberties indicators) for a total of up to 100 points. The scores determine numerical ratings for political rights and civil liberties freedoms on a scale of 1 (most free) to 7 (least free). The political rights and civil liberties ratings are averaged to produce an overall status of free, partly free , or not free. Freedom House's report covering 2018 found that Nicaragua was the country with the greatest decline in the world regarding conditions for political rights and civil liberties as compared to 2017. Venezuela had the third-greatest decline; Brazil, El Salvador, and Guatemala also made the top 20 for steepest declines. The report's analysis is based on data that are detailed in full on the Freedom House web page on "Countries," which ranks the state of democracy for 197 countries and 15 territories. This web page lists the top three aggregate scores in Latin America and the Caribbean: Uruguay, Barbados, and Chile; the region's lowest aggregate scores are those for Nicaragua, Venezuela, and Cuba. Freedom House evaluates democracy in all Central and South American and Caribbean nations. The Varieties of Democracy Institute (V-DEM), headquartered at the University of Gothenburg in Sweden, collects democracy data through its research team in collaboration with country experts. In 2017, V-Dem published its first global report measuring the status of democracy with an index. Democracy Report 2019 includes the Liberal Democracy Index, which examines 71 indicators included in the Liberal Component Index and the Electoral Democracy Index. V-Dem groups 179 countries into four categories: liberal democracy , electoral democracy , electoral autocracy , and closed autocracy . The current report notes "the regional average for Latin America is down to 0.51 in 2018, bringing the region back to about 1996-levels." V-DEM evaluates all Central and South American nations. With the exceptions of Barbados, Cuba, the Dominican Republic, Guyana, Haiti, Jamaica, Suriname, and Trinidad and Tobago, V-DEM does not evaluate Caribbean nations. Table 1 looks at Caribbean countries' global democracy rankings according to EIU's Democracy Index 2018 , Freedom House's Freedom in the World 2019 , V-Dem's Democracy Report 2019 , and Bertelsmann Stiftung's 2018 Transformation Index. Table 2 compares the same reports for Mexico and Central America, as does Table 3 for South America. Each report evaluates a different number of countries, so there are missing rankings for some countries. Countries are listed alphabetically in each table. Figure 1 shows the global rank and classification of all Central and South American and Caribbean countries according to the Political Transformation Rank, a component of the 2018 Bertelsmann Stiftung Transformation Index (BTI). Figure 2 shows the global rank and classification of Central and South American and Caribbean countries according to the EIU's Democracy Index 2018 . Figure 3 shows the aggregate scores of all Central and South American and Caribbean countries according to the Freedom House country web page for Freedom in the World 2019 . Countries receive 0 to 4 points on 25 indicators (10 political rights indicators and 15 civil liberties indicators) for a total of up to 100 points. Figure 4 shows the political rights and civil liberties scores of all Central and South American and Caribbean countries according to Freedom House's Freedom in the World 2019 . The scale used is 1-7, with 1 indicating the most free conditions and 7 the least free. Figure 5 shows the liberal democracy index rank and classification of all Central and South American and Caribbean countries according to the Varieties of Democracy Institute's Democracy Report 2019 . Table 4 provides resources for further information about democracy indicators in Central and South America and the Caribbean, although many cover other geographic areas as well. The sources are organized alphabetically by title. This is not an exhaustive list.	Summary:	gov_report	1,024	null	50
crs_R45906	crs_R45906_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Congress annually considers 12 regular appropriations bills for the fiscal year that begins on October 1. These billsâtogether with other legislative measures providing appropriations known as supplemental and continuing appropriations (also referred to as continuing resolutions or CRs)âprovide annual appropriations for the agencies, projects, and activities funded therein. The annual appropriations cycle is often initiated after the President's budget submission. The House and Senate Appropriations Committees then hold hearings at which agencies provide further information and details about the President's budget. These hearings may be followed by congressional consideration of a budget resolution establishing a ceiling on overall spending within appropriations bills for the upcoming fiscal year. Committee and floor consideration of the annual appropriations bills occurs during the spring and summer months and may continue through the fall and winter until annual appropriations actions are completed. This report discusses FY2019 congressional appropriations actions and the impacts of the statutory budget enforcement framework established in the Budget Con trol Act of 2011 (BCA; P.L. 112-25 ) and the Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123 ). It includes a chronological discussion and timeline ( Figure 1 ) of these actions. FY2019 Appropriations and the Bipartisan Budget Act of 2018 FY2019 appropriations actions were impacted by the BCA, which placed statutory limits on spending for FY2012-FY2021, divided between defense and nondefense. In addition, the law created procedures that would automatically lower those caps if specified deficit-reducing legislation were not enacted. Congress has adjusted these statutory caps, including through the Bipartisan Budget Acts (BBAs) of 2013 (for FY2014 and FY2015), 2015 (for FY2016 and FY2017), 2018 (for FY2018 and FY2019), and 2019 (for FY2020 and FY2021), which provided for spending cap increases in both defense and nondefense categories. BBA 2018 capped FY2019 discretionary spending for defense at $647 billion and for nondefense at $597 billion. It also provided that in the absence of agreement on a budget resolution for FY2019, the Budget Committees in the House and Senate could make committee allocations that could function as enforceable limits under Section 302 of the Congressional Budget Act. In May 2018, the House and Senate submitted these filings. With a "top-line" for FY2019 funding established, the Appropriations Committees could proceed with consideration of the 12 appropriations bills and provide enforceable 302(b) suballocations for each regular appropriations bill. The House and Senate Appropriations Committees completed their drafting and consideration of all 12 regular appropriations bills by the end of July 2018. Consideration and Enactment of Regular Appropriations Measures In the 115 th Congress and prior to the start of FY2019 on October 1, 2018, the House passed half of the regular bills (6 out of 12), and the Senate passed 9 bills (see Table 2 and Table 3 ). In both chambers, separate regular appropriations bills were combined for floor consideration into consolidated appropriations bills, commonly referred to as "minibuses" (in contrast to an omnibus bill comprising most or all regular appropriations bills). These appropriations bill groupings were also used for resolving differences between the House and Senate through conference committees. Three appropriations bills were combined for initial consideration in the House: Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs ( H.R. 5895 ). The House passed this combined measure on June 8, 2018. The Senate subsequently agreed to the combined measure with amendment on June 25. A final measure was negotiated in a conference committee. The Senate passed the final measure on September 12. The House passed it on September 13. It was enacted into law on September 21, 2018 ( P.L. 115-244 ). The House passed the Defense appropriations bill ( H.R. 6157 ) on June 28, 2018. The Senate added the text of the Labor, HHS, and Education appropriations bill and passed the combined measure on August 23, 2018. The combined measure was then sent to conference. The Senate passed the final measure on September 18. The House passed it on September 26. It was enacted into law on September 28, 2018 ( P.L. 115-245 ). In addition, the House passed a measure combining the Interior and Environment appropriations bill with the Financial Services appropriations bill ( H.R. 6147 ) on July 19, 2018. The Senate added the text of the Agriculture appropriations bill and the Transportation and HUD appropriations bill and passed the combined measure on August 1, 2018. Although a conference committee was appointed to negotiate on this measure, it did not report an agreement back to the House and Senate. FY2019 thus began on October 1, 2018, with five of the regular appropriations bills enacted. Funding for agencies, projects, and activities covered by the remaining seven regular appropriations bills was provided through December 7, 2018, in a CR (Division C of P.L. 115-245 , the same measure that provided funding for Defense and Labor, HHS, and Education). A second CR was enacted on December 7, extending funding for the remaining seven appropriations bills through December 21, 2018 ( P.L. 115-298 ). Expiration of Second CR and the Shutdown In the Senate, a third CR for FY2019 ( H.R. 695 ) was passed by voice vote on December 19, 2018. This CR would have extended funding through February 8, 2019. The House subsequently considered and amended it the following day, adding $5.7 billion to the U.S. Customs and Border Protection's "Procurement, Construction, and Improvements" account to remain available until FY2024, as well as $7.8 billion for disaster relief. The amended CR passed the House by a vote of 217-185 and was sent back to the Senate for further consideration. On December 21, the Senate agreed to a motion to proceed to the House amendment by a vote of 48-47, with Vice President Pence casting the tie-breaking vote. Following the vote, Senate Majority Leader Mitch McConnell stated the following: However, obviously, since any eventual solution requires 60 votes here in the Senate, it has been clear from the beginning that two things are necessary: support from enough Senate Democrats to pass the proposal at 60 and a Presidential signature. As a result, the Senate has voted to proceed to legislation before us in order to preserve maximum flexibility for a productive conversation to continue between the White House and our Democratic colleagues. I hope Senate Democrats will work with the White House on an agreement that can pass both Houses of Congress and receive the President's signature. Colleagues, when an agreement is reached, it will receive a vote here on the Senate floor. Without such an agreement, the Senate did not complete action on the House's proposal. The House and Senate adjourned later that day. When the second CRâwhich provided funding for the agencies, programs, and activities covered by the remaining seven FY2019 appropriations billsâexpired at midnight on December 21, funding lapsed and a partial government shutdown ensued. While the Senate continued consideration of the House amendment on December 22, December 27, and January 2, no further votes on appropriations occurred during the 115 th Congress. The 115 th Congress adjourned sine die on January 3, 2019, and the 116 th Congress took office the same day. Actions in the 116th Congress Majority control of the House in the 116 th Congress changed from the Republican Party to the Democratic Party. In addition, any appropriations measures introduced and only reported or considered in the 115 th Congress were no longer pending. New measures needed to be introduced for the 116 th Congress to complete action on FY2019 appropriations. During January 2019, the House introduced and considered a number of measures concerning FY2019 appropriations. These measures are listed below, along with information on their content and corresponding floor votes. January 3, 2019, H.J.Res. 1 , a CR to provide FY2019 appropriations for Homeland Security, lasting through February 8, 2019. The resolution passed the House by a vote of 239-192. No further action was taken in the Senate. January 3, 2019, H.R. 21 , a measure to provide full-year FY2019 funding for six regular appropriations bills (Agriculture; CJS; Financial Services; Interior and Environment; State and Foreign Operations; and Transportation and HUD). The bill passed the House by a vote of 241-190. No further action was taken in the Senate. January 9, 2019, H.R. 264 , a measure to provide full-year FY2019 regular appropriations for Financial Services. The bill passed the House by a vote of 240-188. No further action was taken in the Senate. January 10, 2019, H.R. 267 , a measure to provide full-year FY2019 regular appropriations for Transportation and HUD. The bill passed the House by a vote of 244-180. No further action was taken in the Senate. January 10, 2019, H.R. 265 , a measure to provide full-year regular appropriations for Agriculture. The bill passed the House by a vote of 243-183. No further action was taken in the Senate. January 11, 2019, H.R. 266 , a measure to provide full-year regular appropriations for Interior and Environment. The bill passed the House by a vote of 240-179. No further action was taken in the Senate. January 15, 2019, H.J.Res. 27 , a CR to provide funding through February 1 for the seven remaining regular FY2019 appropriations bills. The resolution was brought up under suspension of the rules requiring a two-thirds majority for passage. The motion failed to achieve the necessary two-thirds on a vote of 237-187 . January 16, 2019, H.R. 268 , supplemental appropriations for disaster relief. The legislation included a CR providing FY2019 continuing appropriations through February 8. The bill passed the House by a vote of 237-187. On January 24, 2019, the Senate considered two separate amendments to the House-passed bill: a Republican amendment ( S.Amdt. 5 ) and a Democratic amendment ( S.Amdt. 6 ). The Senate failed to invoke cloture (requiring a vote of three-fifths of all Senators, or 60 votes) to end consideration of either amendment. No further action occurred. January 17, 2019, H.J.Res. 28 , a CR to provide FY2019 appropriations for the seven remaining regular appropriations measures through February 28. The resolution passed the House on a voice vote, but the House later, by unanimous consent, vacated the proceedings by which the CR had passed and allowed further proceedings to be postponed through the legislative day of January 23, 2019. The resolution subsequently passed the House by a vote of 229-184 on January 23. The measure was passed by the Senate on January 25 by voice vote, with an amendment providing for continuing appropriations through February 15. The House then passed the measure as amended, clearing it for the President. It was signed into law on the same day ( P.L. 116-5 ), ending the partial shutdown. January 23, 2019, H.R. 648 , a bill to provide full-year FY2019 funding for six of the remaining regular appropriations measures (Agriculture; CJS; Financial Services; Interior and Environment; State and Foreign Operations; and Transportation and HUD). The bill passed the House by a vote of 234-180. No further action was taken in the Senate. January 24, 2019, H.J.Res. 31 , a CR to provide FY2019 appropriations for Homeland Security through February 28. The resolution passed the House by a vote of 231-180. The measure was amended in the Senate to provide full-year funding for the seven remaining regular appropriations bills and agreed to by voice vote on January 25. The two chambers then agreed to convene a conference committee to negotiate a final version of these bills. A conference report to accompany H.J.Res . 31 was filed on February 13 and agreed to in the Senate, 83-16, on February 14 and in the House, 300-128, the same day. It was signed into law on February 15 ( P.L. 116-6 ). This ended action on regular appropriations bills for FY2019. For information about particular funding provisions in each of the 12 bills, congressional clients may access CRS's appropriations issue page at https://www.crs.gov/iap/appropriations . Summary:	null	96	12,576	12,578	12,578	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Congress annually considers 12 regular appropriations bills for the fiscal year that begins on October 1. These billsâtogether with other legislative measures providing appropriations known as supplemental and continuing appropriations (also referred to as continuing resolutions or CRs)âprovide annual appropriations for the agencies, projects, and activities funded therein. The annual appropriations cycle is often initiated after the President's budget submission. The House and Senate Appropriations Committees then hold hearings at which agencies provide further information and details about the President's budget. These hearings may be followed by congressional consideration of a budget resolution establishing a ceiling on overall spending within appropriations bills for the upcoming fiscal year. Committee and floor consideration of the annual appropriations bills occurs during the spring and summer months and may continue through the fall and winter until annual appropriations actions are completed. This report discusses FY2019 congressional appropriations actions and the impacts of the statutory budget enforcement framework established in the Budget Con trol Act of 2011 (BCA; P.L. 112-25 ) and the Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123 ). It includes a chronological discussion and timeline ( Figure 1 ) of these actions. FY2019 Appropriations and the Bipartisan Budget Act of 2018 FY2019 appropriations actions were impacted by the BCA, which placed statutory limits on spending for FY2012-FY2021, divided between defense and nondefense. In addition, the law created procedures that would automatically lower those caps if specified deficit-reducing legislation were not enacted. Congress has adjusted these statutory caps, including through the Bipartisan Budget Acts (BBAs) of 2013 (for FY2014 and FY2015), 2015 (for FY2016 and FY2017), 2018 (for FY2018 and FY2019), and 2019 (for FY2020 and FY2021), which provided for spending cap increases in both defense and nondefense categories. BBA 2018 capped FY2019 discretionary spending for defense at $647 billion and for nondefense at $597 billion. It also provided that in the absence of agreement on a budget resolution for FY2019, the Budget Committees in the House and Senate could make committee allocations that could function as enforceable limits under Section 302 of the Congressional Budget Act. In May 2018, the House and Senate submitted these filings. With a "top-line" for FY2019 funding established, the Appropriations Committees could proceed with consideration of the 12 appropriations bills and provide enforceable 302(b) suballocations for each regular appropriations bill. The House and Senate Appropriations Committees completed their drafting and consideration of all 12 regular appropriations bills by the end of July 2018. Consideration and Enactment of Regular Appropriations Measures In the 115 th Congress and prior to the start of FY2019 on October 1, 2018, the House passed half of the regular bills (6 out of 12), and the Senate passed 9 bills (see Table 2 and Table 3 ). In both chambers, separate regular appropriations bills were combined for floor consideration into consolidated appropriations bills, commonly referred to as "minibuses" (in contrast to an omnibus bill comprising most or all regular appropriations bills). These appropriations bill groupings were also used for resolving differences between the House and Senate through conference committees. Three appropriations bills were combined for initial consideration in the House: Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs ( H.R. 5895 ). The House passed this combined measure on June 8, 2018. The Senate subsequently agreed to the combined measure with amendment on June 25. A final measure was negotiated in a conference committee. The Senate passed the final measure on September 12. The House passed it on September 13. It was enacted into law on September 21, 2018 ( P.L. 115-244 ). The House passed the Defense appropriations bill ( H.R. 6157 ) on June 28, 2018. The Senate added the text of the Labor, HHS, and Education appropriations bill and passed the combined measure on August 23, 2018. The combined measure was then sent to conference. The Senate passed the final measure on September 18. The House passed it on September 26. It was enacted into law on September 28, 2018 ( P.L. 115-245 ). In addition, the House passed a measure combining the Interior and Environment appropriations bill with the Financial Services appropriations bill ( H.R. 6147 ) on July 19, 2018. The Senate added the text of the Agriculture appropriations bill and the Transportation and HUD appropriations bill and passed the combined measure on August 1, 2018. Although a conference committee was appointed to negotiate on this measure, it did not report an agreement back to the House and Senate. FY2019 thus began on October 1, 2018, with five of the regular appropriations bills enacted. Funding for agencies, projects, and activities covered by the remaining seven regular appropriations bills was provided through December 7, 2018, in a CR (Division C of P.L. 115-245 , the same measure that provided funding for Defense and Labor, HHS, and Education). A second CR was enacted on December 7, extending funding for the remaining seven appropriations bills through December 21, 2018 ( P.L. 115-298 ). Expiration of Second CR and the Shutdown In the Senate, a third CR for FY2019 ( H.R. 695 ) was passed by voice vote on December 19, 2018. This CR would have extended funding through February 8, 2019. The House subsequently considered and amended it the following day, adding $5.7 billion to the U.S. Customs and Border Protection's "Procurement, Construction, and Improvements" account to remain available until FY2024, as well as $7.8 billion for disaster relief. The amended CR passed the House by a vote of 217-185 and was sent back to the Senate for further consideration. On December 21, the Senate agreed to a motion to proceed to the House amendment by a vote of 48-47, with Vice President Pence casting the tie-breaking vote. Following the vote, Senate Majority Leader Mitch McConnell stated the following: However, obviously, since any eventual solution requires 60 votes here in the Senate, it has been clear from the beginning that two things are necessary: support from enough Senate Democrats to pass the proposal at 60 and a Presidential signature. As a result, the Senate has voted to proceed to legislation before us in order to preserve maximum flexibility for a productive conversation to continue between the White House and our Democratic colleagues. I hope Senate Democrats will work with the White House on an agreement that can pass both Houses of Congress and receive the President's signature. Colleagues, when an agreement is reached, it will receive a vote here on the Senate floor. Without such an agreement, the Senate did not complete action on the House's proposal. The House and Senate adjourned later that day. When the second CRâwhich provided funding for the agencies, programs, and activities covered by the remaining seven FY2019 appropriations billsâexpired at midnight on December 21, funding lapsed and a partial government shutdown ensued. While the Senate continued consideration of the House amendment on December 22, December 27, and January 2, no further votes on appropriations occurred during the 115 th Congress. The 115 th Congress adjourned sine die on January 3, 2019, and the 116 th Congress took office the same day. Actions in the 116th Congress Majority control of the House in the 116 th Congress changed from the Republican Party to the Democratic Party. In addition, any appropriations measures introduced and only reported or considered in the 115 th Congress were no longer pending. New measures needed to be introduced for the 116 th Congress to complete action on FY2019 appropriations. During January 2019, the House introduced and considered a number of measures concerning FY2019 appropriations. These measures are listed below, along with information on their content and corresponding floor votes. January 3, 2019, H.J.Res. 1 , a CR to provide FY2019 appropriations for Homeland Security, lasting through February 8, 2019. The resolution passed the House by a vote of 239-192. No further action was taken in the Senate. January 3, 2019, H.R. 21 , a measure to provide full-year FY2019 funding for six regular appropriations bills (Agriculture; CJS; Financial Services; Interior and Environment; State and Foreign Operations; and Transportation and HUD). The bill passed the House by a vote of 241-190. No further action was taken in the Senate. January 9, 2019, H.R. 264 , a measure to provide full-year FY2019 regular appropriations for Financial Services. The bill passed the House by a vote of 240-188. No further action was taken in the Senate. January 10, 2019, H.R. 267 , a measure to provide full-year FY2019 regular appropriations for Transportation and HUD. The bill passed the House by a vote of 244-180. No further action was taken in the Senate. January 10, 2019, H.R. 265 , a measure to provide full-year regular appropriations for Agriculture. The bill passed the House by a vote of 243-183. No further action was taken in the Senate. January 11, 2019, H.R. 266 , a measure to provide full-year regular appropriations for Interior and Environment. The bill passed the House by a vote of 240-179. No further action was taken in the Senate. January 15, 2019, H.J.Res. 27 , a CR to provide funding through February 1 for the seven remaining regular FY2019 appropriations bills. The resolution was brought up under suspension of the rules requiring a two-thirds majority for passage. The motion failed to achieve the necessary two-thirds on a vote of 237-187 . January 16, 2019, H.R. 268 , supplemental appropriations for disaster relief. The legislation included a CR providing FY2019 continuing appropriations through February 8. The bill passed the House by a vote of 237-187. On January 24, 2019, the Senate considered two separate amendments to the House-passed bill: a Republican amendment ( S.Amdt. 5 ) and a Democratic amendment ( S.Amdt. 6 ). The Senate failed to invoke cloture (requiring a vote of three-fifths of all Senators, or 60 votes) to end consideration of either amendment. No further action occurred. January 17, 2019, H.J.Res. 28 , a CR to provide FY2019 appropriations for the seven remaining regular appropriations measures through February 28. The resolution passed the House on a voice vote, but the House later, by unanimous consent, vacated the proceedings by which the CR had passed and allowed further proceedings to be postponed through the legislative day of January 23, 2019. The resolution subsequently passed the House by a vote of 229-184 on January 23. The measure was passed by the Senate on January 25 by voice vote, with an amendment providing for continuing appropriations through February 15. The House then passed the measure as amended, clearing it for the President. It was signed into law on the same day ( P.L. 116-5 ), ending the partial shutdown. January 23, 2019, H.R. 648 , a bill to provide full-year FY2019 funding for six of the remaining regular appropriations measures (Agriculture; CJS; Financial Services; Interior and Environment; State and Foreign Operations; and Transportation and HUD). The bill passed the House by a vote of 234-180. No further action was taken in the Senate. January 24, 2019, H.J.Res. 31 , a CR to provide FY2019 appropriations for Homeland Security through February 28. The resolution passed the House by a vote of 231-180. The measure was amended in the Senate to provide full-year funding for the seven remaining regular appropriations bills and agreed to by voice vote on January 25. The two chambers then agreed to convene a conference committee to negotiate a final version of these bills. A conference report to accompany H.J.Res . 31 was filed on February 13 and agreed to in the Senate, 83-16, on February 14 and in the House, 300-128, the same day. It was signed into law on February 15 ( P.L. 116-6 ). This ended action on regular appropriations bills for FY2019. For information about particular funding provisions in each of the 12 bills, congressional clients may access CRS's appropriations issue page at https://www.crs.gov/iap/appropriations .	Summary:	gov_report	1,024	null	51
crs_R45862	crs_R45862_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The Every Student Succeeds Act (ESSA; P.L. 114-95 ) amended the Elementary and Secondary Education Act (ESEA) to add a new Part E to Title I entitled "Flexibility for Equitable Per-Pupil Spending." Under Title I-E, the Secretary of Education (the Secretary) has the authority to provide local educational agencies (LEAs) with flexibility to consolidate eligible federal funds with state and local funding to create a "single school funding system based on weighted per-pupil allocations for low-income and otherwise disadvantaged students." The ESEA Title I-E authority is applicable to LEAs that are using or agree to implement "weighted student funding" systems to establish budgets for, and allocate funds to, individual public schools. These funding systems base school funding on the number of pupils in each school in specified categories. Under these funding systems, weights are assigned to a variety of pupil characteristics that are deemed to be related to the costs of educating such pupilsâsuch as being from a low-income family, being an English Learner (EL), or having a disability. Weights are also assigned on the basis of students' educational program (grade level, career-technical education, gifted and talented, or others). School budgets are based on these weighted pupil counts, in contrast to treating all pupils in the same manner. Under weighted student funding policies, school allocations are based on weighted counts of students enrolled in them; therefore, if students transfer from one public school to another within the same LEA, their weighted budget level transfers with them, although possibly with a time lag. The Secretary is permitted to waive a wide range of requirements under various ESEA programs, including provisions related to the allocation of Title I-A funds to schools, for LEAs entering into an agreement under Title I-E if an existing ESEA requirement would prevent the LEA from implementing its weighted student funding system under the agreement. LEAs must, however, meet Title I-E requirements for allocations to schools with students from low-income families and ELs. LEAs must also continue to meet a number of Title I-A and other requirements, though in somewhat modified fashion in some instances. The Title I-E authority is limited to 50 LEAs in school years preceding 2019-2020, but it could be offered to any LEA from that year onward, as long as a "substantial majority" of the LEAs participating in previous years have met program requirements. In February 2018, the Secretary announced that she would begin accepting applications from LEAs to enter into local flexibility demonstration agreements under the Student-Centered Funding Pilot, which is how the U.S. Department of Education (ED) refers to the Title I-E authority. To date, six LEAs have applied for the Title I-E authority, and only Puerto Rico has been approved to enter into an agreement. Puerto Rico will begin implementing a weighted student funding system using the Title I-E flexibility authority during the 2019-2020 school year. Thus, no LEAs will have implemented weighted student funding systems under Title I-E prior to the 2019-2020 school year. To provide context for the Title I-E authority, this report begins with a brief discussion of how public elementary and secondary education is financed at the state and local levels. It focuses on the primary types of state school finance programs and school finance "equalization," including an overview of weighted student funding systems. For a more detailed discussion of state and local financing of public schools, see CRS Report R45827, State and Local Financing of Public Schools . Building on this background, the remainder of the report focuses on the Title I-E authority. First, there is an examination of the Title I-E statutory authority and related non-regulatory guidance provided by ED. This is followed by a discussion of current Title I-E implementation issues. The next section considers possible interactions between the Title I-E authority and other ESEA programs, particularly Title I-A. The report concludes with discussion of some issues that may arise related to the Title I-E authority. Overview of Financing for Public Elementary and Secondary Schools in the UnitedÂ States This section provides a brief overview of funding sources for public elementary and secondary education. It also discusses school finance "equalization," including an examination of the use of weighted student funding at the state and LEA levels. Sources of Funding for Public Elementary and Secondary Education The funding of public elementary and secondary schools in the United States involves a combination of local, state, and federal government revenues, in proportions that vary substantially both across and within states. Overall, a total of $678.4 billion in revenues was devoted to public elementary and secondary education in the 2015-16 school year (the latest year for which detailed data on revenues by source are available). State governments provided $318.6 billion (47.0%) of these revenues, local governments provided $303.8 billion (44.8%), and the federal government provided $56.0 billion (8.3%). Over the last several decades, the share of public elementary and secondary education revenues provided by state governments has increased, the share provided by local governments has decreased, and the federal share has varied within a range of 6.0% to 12.7%. The primary source of local revenues for public elementary and secondary education is the property tax, while state revenues are raised from a variety of sources, primarily personal and corporate income and retail sales taxes, a variety of "excise" taxes such as those on tobacco products and alcoholic beverages, plus lotteries in several states. All states (but not the District of Columbia) provide a share of the total revenues available for public elementary and secondary education. This state share varies widely, from approximately 25% in Illinois to almost 90% in Hawaii and Vermont. The programs through which state funds are provided to LEAs for public elementary and secondary education have traditionally been categorized into five types of programs: (1) Foundation Programs, (2) Full State Funding Programs, (3) Flat Grants, (4) District Power Equalizing, and (5) Categorical Grants. , Of these, Foundation Programs are the most common, although many states use a combination of program types. School Finance "Equalization" A goal of all of the various types of state school finance programs is to provide at least some limited degree of "equalization" of spending and resources, and/or local ability to raise funds, for public elementary and secondary education across all of the LEAs in the state. Such programs often establish target levels of funding "per pupil." The "pupil" counts involved in these programs may simply be based on total student enrollment as of some point in time, or they may be a "weighted" count of students, taking into account variations in a number of categoriesâspecial pupil needs (e.g., disabilities, low family income, limited proficiency in English), grade levels, specific educational programs (e.g., career and technical education), or geographic considerations (e.g., student population sparsity or local variation in costs of providing education). State Use of Weighted Student Funding A review of the individual state entries in a recent survey is an instructive indication of the extent to which weighted student counts are used to determine funding levels under current state programs. It shows that at least 32 states used some degree of weighting of the pupil counts used to calculate state aid to LEAs. Most of these states have policies that assign numeric weights to different categories of pupils, while in other states the school finance program specifies different target dollar amounts for specific categories of pupils, which is mathematically equivalent to assigning weights. Many states also adjust pupil weights for those in selected grade levels, geographic areas, or programs. Weights are often higher for pupils in the earliest grades or in grades 9-12, though policies vary widely, and a few states prioritize other grade levels such as 7-9. The population sparsity weights recognize the diseconomies of scale in areas with especially small LEAs or schools. The career and technical education weights recognize the extra costs of these types of programs. Application of Weighted Student Funding in LEA Programs to Finance Individual Schools As seen above, the concept of pupil weighting is often applied in determining funding levels for LEAs under state school finance programs. After state funds reach LEAs, they are combined with locally raised funds to provide educational resources to students in individual schools. It is this stage in the distribution of educational resources that is relevant to the weighted student funding authority in ESEA Title I, Part E (see subsequent discussion of Title I-E). Below is an overview of both conventional intra-LEA budgeting policies and the use of weighted student funding at the LEA level. Conventional Intra-LEA Budgeting Policies Under the traditional, and still most common, method of allocating resources within LEAs, there are no specific budgets for individual schools. Available state and local funds are managed centrally, by LEA staff, and various resourcesâfacilities, teachers, support staff, school administrators, instructional equipment, etc.âare assigned to individual schools. In this process, LEA staff typically apply LEA-wide standards such as pupil-teacher ratios or numbers of various categories of administrative and support staff to schools of specific enrollment sizes and grade levels. While levels of expenditures per pupil may be determined for individual schools under these budgetary systems, they are calculated "after the fact," based on whatever staff and other resources have been assigned to the school. And while standard ratios of pupils per teacher or other resource measures may be applied LEA-wide in these situations, substantial variations in the amounts actually spent on teachers and other resources in each school can result from systematic variations in teacher seniority and other factors. These variations might be masked by local policies to apply average salaries, rather than specific actual salaries, in school accounting systems. Further, under traditional school budgeting policies there is little or no immediate or direct adjustment of resources or spending when students transfer from one school to another. Weighted Student Funding Concept Applied to Intra-LEA Budgeting forÂ Schools In contrast to traditional, fully centralized budgeting and accounting policies for public schools within LEAs, a number of LEAs have in recent years applied the weighted student funding concept to developing and implementing individual school budgets. These policies are not currently applied to any federal program funds and are applied only to a portion of the state and local revenues received by these LEAs, as they continue to centrally administer and budget for various activities such as school facility construction, operations and maintenance, employee benefits, transportation, food services, and many administrative functions . The LEAs develop school budgets for teachers, support staff, and at least some other resources on the basis of weighted counts of the students currently enrolled in each school, and adjust these budgets when students transfer from one school to another. CRS is not aware of any comprehensive listing of all of the LEAs that are currently implementing weighted student funding policies for intra-LEA allocations to schools. The use of weighted student funding within LEAs is a relatively new practice in most cases, and comprehensive research on its effects is not yet available. However, Dr. Marguerite Roza and her team at the Edunomics Lab at Georgetown University were awarded a three-year grant by the Institute of Education Sciences at ED to study whether spending patterns change with weighted student funding systems and what the effects of these systems are on equity and achievement, particularly for poor and at-risk students. An interview with Dr. Roza based on their preliminary findings revealed that nearly all 19 LEAs in the study that use weighted student funding systems cite equity (89%) and flexibility for school principals (79%) as a main reason for implementing such systems. Dr. Roza also noted that there is not a "standard" weighted student funding model used by LEAs and that LEAs differ with respect to the share of their total budgets allocated through weighted student funding systems, how base amounts are defined, and the weights assigned to various categories of students. She also noted that almost all of the LEAs in their study continue to use average salaries in their budgeting rather than actual personnel expenditures. ESEA Title I-E The remainder of this report focuses on the new authority for flexible per-pupil spending made available under ESEA Title I-E. The discussion begins with an examination of the Title I-E statutory requirements and implementation of that authority. This is followed by an analysis of how these requirements may interact with ESEA programmatic requirements for several programs, with a focus on interactions with the Title I-A program. The report concludes with discussion of possible issues related to the Title I-E authority. Title I-E Authority This section discusses the requirements related to the Title I-E authority. All of the statutory provisions are included in ESEA, Section 1501. Overview The purpose of the Title I-E authority is to provide LEAs with flexibility to consolidate eligible federal funds with state and local funding to create a "single school funding system based on weighted per-pupil allocations for low-income and otherwise disadvantaged students." Once consolidated in a participating LEA's weighted student funding system, the eligible federal funds are treated the same way as the state and local funds. There are no required uses associated with the eligible federal funds provided that the expenditures are "reasonable and necessary" and the purposes of the eligible federal programs for which funds have been consolidated are met. Federal Funds Eligible for Consolidation Eligible federal funds that may be consolidated under the Title I-E authority include ESEA funds received by LEAs under the programs listed below. Programs that provide formula grant funding to LEAs directly or via the state educational agency (SEA) are denoted by an asterisk. Title I-A* Migrant Education (Title I-C) Neglected and Delinquent (Title I-D-2)* Supporting Effective Instruction (Title II-A)* Teacher and School Leader Incentive Program (Title II-B-1) Comprehensive Literacy State Development Grants (Title II-B-2) Innovative Approaches to Literacy (Title II-B-2) School Leader Recruitment and Support (Title II, Section 2243) English Language Acquisition (Title III)* Student Support and Academic Enrichment (Title IV-A)* Small, Rural School Achievement Program (Title V-B-1)* Rural and Low-Income School Program (Title V-B-2)* In general, a participating LEA may use the consolidated federal funds without having to meet the specific requirements of each of the programs whose funds were consolidated provided the LEA is able to demonstrate the funds allocated through its weighted student funding systems address the purposes of each of the federal programs. For example, under the Student Support and Academic Enrichment (SSAE) grant program, LEAs must use funds for well-rounded education, safe and healthy students, and technology purposes. If SSAE funds were consolidated with state and local funds under a weighted student funding system, then the participating LEA would have to demonstrate that the activities being implemented in its schools meet these purposes. However, the LEA would not have to meet SSAE grant requirements about how much funding was used for each purpose. If a participating LEA consolidates funds from an eligible federal program that provides competitive grants to LEAs into its weighted student funding system, it is still required to carry out the scope and objectives, at a minimum, as described in the LEA's approved application. The majority of federal funds available for LEAs to use under the Title I-E authority are provided through formula grants. LEAs applying for funding flexibility under Title I-E are not required to include funds from every eligible federal program in their weighted student funding systems. If a participating LEA opts not to include some of the eligible federal funds in its system, all current statutory and regulatory requirements will continue to apply to those funds. It should be noted that no non-ESEA funds, such as those available under the Individuals with Disabilities Education Act (IDEA) or Perkins Career and Technical Education (CTE) Act, are considered eligible federal funds for the purposes of the Title I-E authority. Secretarial Authority Under the authority granted under Title I-E, the Secretary may enter into a local flexibility demonstration agreement for up to three years with an LEA that is selected to participate and meets the required terms of the agreement (hereinafter referred to as a participating LEA). A participating LEA may consolidate and use funds as stated in the agreement to develop and implement a school funding system based on weighted student funding allocations for low-income and otherwise disadvantaged students. Except as discussed below, the Secretary is authorized in entering into these agreements to waive any ESEA provision that would prevent a participating LEA from using eligible federal funds in its weighted student funding system, including Title I-A requirements regarding the allocation of Title I-A funds to public schools (Section 1113(c)). Thus, the waiver authority granted to the Secretary for the purposes of Title I-E is broader than the general waiver authority available under Section 8401. Under the latter, the Secretary is prohibited from waiving provisions such as the allocation or distribution of funds to grantees. However, there are several statutory requirements that participating LEAs must agree to continue to meet. For example, each participating LEA must agree to meet the three Title I-A fiscal accountability requirements in Section 1118, which include maintenance of effort (Section 1118(a)), supplement, not supplant (Section 1118(b)), and comparability (Section 1118(c)). The maintenance of effort provision requires LEA expenditures of state and local funds to be at least 90% of what they were for the second preceding fiscal year for public elementary and secondary education. The use of either a weighted student funding system or a traditional funding system should not directly affect the amount of state and local funds spent on public education, so the use of a weighted student funding system does not present any problems with meeting this requirement. The supplement, not supplant provision requires that Title I-A funds be used so as to supplement and not supplant state and local funds that would otherwise be provided to Title I-A schools. According to ED, an LEA may presume that this requirement has been met if the LEA "implements its system so that the State and local funds that are included in the system include the funds that Title I, Part A schools would have received if they were not Title I, Part A schools." Comparability requires that a comparable level of services be provided with state and local funds in Title I-A schools compared with non-Title I-A schools prior to the receipt of Title I-A funds. Many LEAs currently meet this provision using a pupil-teacher ratio to compare Title I-A and non-Title I-A schools. It is possible that they may not be able to continue to use this method under a weighted student funding system. According to ED, if an LEA demonstrates comparability based on the state and local funds received by each Title I-A school compared to non-Title I-A schools through an equitable funding system, the LEA's weighted student funding system would "constitute per se comparability." Therefore, according to ED, an LEA might find it "advantageous to demonstrate comparability based on funds rather than a staff-student ratio." The identification of public schools for purposes of the supplement, not supplant and comparability fiscal accountability provisions requires the identification of public schools as Title I-A schools and their Title I-A funding levels under the current structure of the program. Thus, Title I-A provisions that require LEAs to determine which public schools would receive Title I-A funds and the amount that each school would receive cannot be waived by the Secretary, even though funds would not be distributed based on these determinations if an LEA chose to include Title I-A funds in its weighted student funding system. However, as previously mentioned, an LEA does not have to distribute Title I-A funds based on the current distribution requirements if the LEA includes Title I-A funds in its weighted student funding system. In addition to meeting Title I-A fiscal accountability requirements and provisions related to the identification of Title I-A schools and their Title I-A funding levels, participating LEAs must continue to meet Title I-A program requirements related to the participation of eligible children enrolled in private schools as well as the Section 8501 requirements related to the participation of children enrolled in private schools in other ESEA programs. Prior to allocating funds through its weighted student funding system, each participating LEA must determine the amount of funds from each eligible federal program whose funds have been consolidated that must be reserved to provide equitable services under that program. For example, under Title I-A a participating LEA must still determine the amount of funding that would have been provided to a public school attendance area if the LEA was allocating Title I-A funds in accordance with Section 1113(c). Based on this funding level, the LEA must determine how much Title I-A funding needs to be reserved for serving eligible private school students. The participating LEA must then follow current procedures with respect to consulting with private school officials and providing needed services under each program to eligible private school students. Remaining Title I-A funds not reserved at the LEA level would be distributed through the LEA's weighted student funding formula. Participating LEAs are also required to meet all applicable federal civil rights laws (e.g., Title VI of the Civil Rights Act) and all IDEA requirements. These requirements may not be waived by the Secretary. In addition to the requirements in statutory language, there are several other requirements that the Secretary has determined cannot be waived. For example, participating LEAs must continue to meet state-level requirements, such as implementing state academic standards, administering annual state assessments, meeting educational accountability requirements, and issuing an annual local report card, including reporting per-pupil expenditures by school. In addition, state-level requirements delegated by a state to an LEA as part of a subgrant agreement cannot be waived. For example, if a participating LEA is delegated state responsibilities for identifying migratory children and transferring student records, these responsibilities must be met. The Secretary has also determined that a participating LEA that has schools identified for comprehensive or targeted support and improvement under Section 1111 must ensure that such schools develop and implement improvement plans. If a participating LEA chooses to offer public school choice as an intervention in schools identified for comprehensive support and improvement, however, the LEA would no longer be subject to the limitation on funding for transportation. A participating LEA is also required to continue addressing the disparities that result in low-income and minority students in Title I-A schools being taught at higher rates than other students by inexperienced, ineffective, or out-of-field teachers. The Secretary has also noted that a participating LEA may have to meet additional ESEA requirements to ensure that it is meeting the purpose of each eligible federal program included in its weighted student funding system. Selection of LEAs The Secretary is permitted to enter into local flexibility demonstration agreements with up to 50 LEAs having approved applications through the 2018-2019 school year. Each interested LEA must do three things to be selected: 1. submit a proposed local flexibility demonstration agreement in accordance with the requirements of Section 1501, 2. demonstrate that the submitted agreement meets all statutory requirements, and 3. agree to meet the continued demonstration requirements included in Section 1501. Beginning with the 2019-2020 school year, the Secretary is permitted to extend the funding flexibility to any LEA that submits and has approved an application that meets the required terms that apply to local flexibility demonstration agreements provided that a "substantial majority" of LEAs that entered into agreements meet two sets of requirements as of the end of the 2018-2019 school year. First, they must meet the requirements for the weighted student funding system included in Section 1501 (discussed below). Second, they must demonstrate annually to the Secretary that compared to the previous fiscal year, no high-poverty school served by the LEA received less per-pupil funding for low-income students or less per-pupil funding for English learners. A high-poverty school is defined as a school in the highest two quartiles of schools served by the LEA based on the enrollment of students from low-income families. As will be discussed in subsequent sections, six LEAs applied for Title I-E authority, and one LEA, Puerto Rico, was approved to implement a local flexibility demonstration agreement for the 2018-2019 school year, but it will not implement the funding flexibility until the 2019-2020 school year. Thus, no LEAs will have implemented weighted student funding systems under Title I-E prior to the 2019-2020 school year. Local Flexibility Demonstration Agreement Application LEAs interested in entering into a local flexibility demonstration agreement to consolidate eligible federal funds with state and local funds in a weighted student funding system must submit an application to the Secretary. To assist in the review of applications, the Secretary may establish a peer review process. The application must include a description of the LEA's weighted student funding system, including the weights that will be used to allocate funds. It must also include information about the LEA's legal authority to use state and local funds in the system. The application must address the specific system requirements included in Section 1501 (discussed below) and discuss how the system will support the academic achievement of students, including low-income students, the lowest-achieving students, ELs, and students with disabilities. The application must detail the funding sources, including eligible federal funds and state and local funds, that will be included in the weighted student funding system. The LEA must provide a description of the amount and percentage of total LEA funding (eligible federal funds, state funds, and local funds) that will be allocated through the system. The application must also state the per-pupil expenditures of state and local education funds for each school served by the LEA for the previous fiscal year. In making this determination, the LEA is required to base the per-pupil expenditures calculation on actual personnel expenditures, including staff salary differentials for years of employment, and actual nonpersonnel expenditures. The LEA must also provide the per-pupil amount of eligible federal funds that each school served by the agency received in the preceding fiscal year, disaggregated by the programs supported by the eligible federal funds. The application must include a description of how the system will ensure that for any eligible federal funds allocated through it, the purposes of the federal programs will be met, including serving students from low-income families, ELs, migratory children, and children who are neglected, delinquent, or at risk, as applicable. An LEA is required to provide several assurances in its application. First, it must provide an assurance that it has developed and will implement the local flexibility demonstration agreement in consultation with various stakeholders including teachers, principals, other school leaders, administrators of federal programs affected by the agreement, and community leaders. Second, it must provide an assurance that it will use fiscal controls and sound accounting procedures to ensure that the eligible federal funds included in the weighted student funding system are properly disbursed and accounted for. Third, as previously discussed, it must agree to continue to meet the requirements of ESEA Sections 1117, 1118, and 8501. Finally, it must provide an assurance that it will meet the requirements of all applicable federal civil rights laws (e.g., Title VI of the Civil Rights Act) when implementing its agreement and consolidating and using funds under that agreement. Requirements for the Weighted Student Funding System In order to enter into a local flexibility demonstration agreement, each LEA must have a weighted student funding system that meets specific requirements. The system must allocate a "significant portion of funds," including eligible federal funds and state and local funds, to the school level based on the number of students in a school and an LEA-developed formula that determines per-pupil weighted amounts. The system must also allocate to schools a "significant percentage" of all of the LEA's eligible federal funds and state and local funds. The percentage must be agreed upon during the application process, and must be sufficient to carry out the purpose of the agreement and meet its terms. In addition, the LEA must demonstrate that the percentage of eligible federal funds and state and local funds that are not allocated through the LEA's system does not undermine or conflict with the requirements of the agreement. The LEA's weighted student funding system must use weights or allocation amounts that provide "substantially more funding" than is allocated to other students to ELs, students from low-income families, and students with any other characteristic related to educational disadvantage that is selected by the LEA. The system must also ensure that each high-poverty school receives in the first year of the agreement more per-pupil funding from federal, state, and local sources for low-income students than was received for low-income students from in the year prior to entering into an agreement and at least as much per-pupil funding from federal, state, and local sources for ELs as was received for ELs in the year prior to entering into an agreement. The system must include all school-level actual personnel expenditures for instructional staff, including staff salary differentials for years of employment, and actual nonpersonnel expenditures in the LEA's calculation of eligible federal funds and state and local funds to be allocated to the school level. After funds are allocated to schools through the weighted student funding formula, the LEA is required to determine or "charge" each school for the per-pupil expenditures of eligible federal funds and state and local funds. This determination must include actual personnel expenditures, including staff salary differentials for years of employment, for instructional staff and actual nonpersonnel expenditures. By charging schools based on actual costs, an LEA can ensure that schools do not receive less funding than the weighted student funding system would indicate the school should receive, even if it has lower actual expenditures in some categories compared to the LEA average. , Finally, as discussed by ED, LEAs entering into a local flexibility demonstration agreement must agree to cooperate with ED in monitoring and technical assistance activities. They must also collect and report information that the "Secretary may reasonably require" in order to conduct the program evaluation discussed below. Continued Demonstration Requirements Each participating LEA must demonstrate to the Secretary on an annual basis that, as compared to the previous year, no high-poverty school served by the LEA received (1) less per-pupil funding for low-income students or (2) less per-pupil funding for ELs from eligible federal funds and state and local funds. On an annual basis, each participating LEA is also required to make public and report to the Secretary for the preceding fiscal year the per-pupil expenditures of eligible federal funds and state and local funds for each school served by the LEA, disaggregated by each quartile of students attending the school based on student level of poverty and by each major racial/ethnic group. Per-pupil expenditure data must include actual personnel expenditures, including staff salary differentials for years of employment, and actual nonpersonnel expenditures. Each year, the participating LEA must also make public the total number of students enrolled in each school served by the agency and the number of students enrolled in each school disaggregated by economically disadvantaged students, students from major racial/ethnic groups, children with disabilities, and ELs. Any information reported or made public by the participating LEA to comply with these requirements shall only be reported or made public if it does not reveal personally identifiable information. Renewal of Local Flexibility Demonstration Agreement The Secretary is authorized to renew local flexibility demonstration agreements for additional three-year terms if the participating LEA (1) has met the requirements for weighted student funding systems and the continued demonstration requirements and (2) has a "high likelihood" of continuing to meet these requirements. The Secretary must also determine that renewing the agreement is in the interest of students served by programs authorized under Title I and Title III of the ESEA. Noncompliance After providing notice and opportunity for a hearing, the Secretary may terminate a local flexibility demonstration agreement if there is evidence that the LEA has failed to comply with the terms of the agreement, the requirements of the system, and continued demonstration requirements. If the LEA believes the Secretary has erred in making this determination for statistical or other substantive reasons, it may provide additional evidence that the Secretary shall consider before making a final determination. Program Evaluation From the amount reserved for evaluation under Section 8601, the Secretary, acting through the Director of the Institute of Education Sciences, shall consult with the relevant program office at ED to evaluate the implementation of local flexibility demonstration agreements and their effect on improving the equitable distribution of state and local funding and increasing student achievement. The statutory language does not require an evaluation of the distribution of eligible federal funds. Administrative Expenditures Each participating LEA may use for administrative purposes an amount of eligible federal funds that is not more than the percentage of funds allowed for such purposes under each eligible federal program. Program Implementation On February 2, 2018, the Secretary announced that she was using the authority made available under Title I-E to launch a Student-Centered Funding Pilot. LEAs interested in using the flexibility for the 2018-2019 school year were required to submit an application by March 12, 2018. LEAs interested in using the flexibility for the 2019-2020 school year had to apply by July 15, 2018. First Application Round Five LEAs submitted applications for the local flexibility demonstration agreement by March 12, 2018: Wilsona School District (CA), Indianapolis Public Schools (IN), Salem-Keizer School District 24J (OR), Upper Adams School District (PA), and the Puerto Rico Department of Education. Puerto Rico's application was approved on June 28, 2018. While Puerto Rico initially intended to implement a weighted student funding system that consolidated eligible federal funds with state and local funds during the 2018-2019 school year, its implementation has been delayed until the 2019-2020 school year. As of July 2019, none of the other applicants have had their applications approved. Second Application Round Only the Roosevelt School District in Arizona applied by the July deadline to use the flexibility for the 2019-2020 school year. As of July 2019, its application had not yet been approved. Recent Budget Requests This section provides an overview of ED's budget requests for FY2018 through FY2020 as they relate to the Title I-E authority. FY2018 Budget Request In its FY2018 budget request, ED requested that it be permitted to use up to $1 billion of Title I-A funding to support weighted student funding systems and public school choice. The funds would have been used to make Furthering Options for Children to Unlock Success (FOCUS) grants. One use of the FOCUS grant funds would have been to support LEAs in establishing or expanding weighted student funding systems if they agreed to combine their funding flexibility with an open enrollment policy for public school choice. ED proposed that it would establish the requirements for such open enrollment systems with a focus on "maximizing opportunities for all students, particularly those from low-income families, to select, attend, and succeed in a high-quality public school." The proposal suggested that the requirements could include, for example, making school information available to parents in a timely way, supporting school integration efforts, arranging or paying for transportation to schools of choice, and giving priority to low-income students or students in schools identified for improvement under Title I-A. ED also proposed allowing participating LEAs to use the funds to provide temporary payments to individual schools affected by the transition to a weighted funding system. In addition, the proposal included an option for ED to establish "tiers based on LEA student enrollments" and give special consideration to LEAs proposing to serve at least one rural school or to consortia of LEAs that agreed to provide interdistrict choice for all students. Implementing this proposal would have required congressional authorization, and Congress did not act on ED's request. FY2019 Budget Request In its FY2019 budget request, ED requested funding to make Open Enrollment Grants (OEGs) to LEAs approved to operate Flexibility for Equitable Per-Pupil Funding pilots authorized under Title I-E that agreed to combine their funding flexibility with an open enrollment policy for public school choice. Similar to its FY2018 budget request, ED proposed that it would establish the requirements for such open enrollment systems with a focus on "maximizing opportunities for all students, particularly those from low-income families, to select, attend, and succeed in a high-quality public school." The proposal again suggested that the requirements could include, for example, making school information available to parents in a timely way, supporting school integration efforts, arranging or paying for transportation to schools of choice, and giving priority to low-income students or students in schools identified for improvement under Title I-A. ED also proposed allowing participating LEAs to use the funds to provide temporary payments to individual schools affected by the transition to a weighted funding system, providing information on public school options to parents, and supporting needed administrative systems. ED did not request a specific amount of funding for only the OEGs. Rather, it requested $500 million for Scholarships for Private Schools and OEGs to be divided between the programs based on the demand for grants. Implementing either program would have required congressional authorization, and Congress did not act on ED's proposal. FY2020 Budget Request In its FY2020 budget request, ED requested $50 million to create Student-Centered Funding Incentive Grants to help increase LEA participation in the agreements authorized under ESEA Section 1501. These grants are not authorized in the ESEA and congressional action would be required to implement the proposal. In its proposal, ED argues that the new grants "would help demonstrate the viability" of moving to weighted student funding systems and the potential for these new systems to improve student outcomes while reducing "LEA red tape." ED believes that the proposed grants could help increase participation by providing resources to LEAs to develop procedures to charge schools based on actual (as opposed to average) personnel expenditures and could reduce the potential negative effects on some individual schools of transitioning to a weighted student funding system under Title I-E. The grants would only be available to LEAs that have already been approved for an agreement. ED estimates that up to 10 LEAs could be supported through the grants and suggests that it could give "special consideration" to LEAs with the highest concentration of poverty. The funds could be used by participating LEAs for activities related to implementing weighted student funding systems. According to ED, this could include using funds to make temporary payments to individual schools to offset reductions in funding resulting from the transition to the system, allowing a "smooth transition to these new systems." Grant funds could also be used by ED to provide technical assistance to LEAs in developing and preparing for the implementation of weighted student funding systems that meet the requirements of Section 1501. In its proposal, ED also mentions that it may consider using existing authority to extend the initial local flexibility demonstration agreement period from three years to six years to help increase LEA participation. Regardless of whether Congress acts on ED's proposal to provide Student-Centered Funding Incentive Grants, LEAs that enter into an agreement are currently permitted to use administrative funds consolidated under Section 8203 to support the implementation of their weighted student funding system. Possible Interactions Between Title I-E Authority and Other ESEAÂ Programs This section discusses some of the ways in which the Title I-E authority might interact with other ESEA programs. As Title I-A is the only ESEA program that includes specific requirements for the allocation of funds to schools within LEAs, it is the primary focus of the discussion. ESEA Programs to Which Title I-E Provisions Apply Under Title I-E, participating LEAs may consolidate and allocate eligible federal funds to public schools through their weighted student funding formulas. Table 1 details the amount of funding appropriated under each eligible federal program for FY2019. The majority of the funding available for consolidation and allocation under the Title I-E authority is provided through formula grants. These grants are either provided directly to LEAs or, in most cases, to LEAs via the state. Most of the attention regarding the possible impact of the weighted student funding authority has been focused on the ESEA Title I-A program. In addition to constituting about 76% of the total FY2019 appropriations for all programs potentially affected by the Title I-E authority ( Table 1 ), it is the only one of the potentially affected federal programs under which most funds are allocated to individual schools under statutory school allocation policies, and therefore the only program where current policies for the allocation of funds to schools can be compared to how funds might be allocated to schools under the weighted student funding authority. The other potentially affected federal programs are either much less focused on individual schools (as opposed to being centrally managed by LEAs), are much less widespread in their distribution of funds among LEAs, and/or are focused largely on SEAs rather than LEAs or schools. Thus, in most cases, ESEA Title I-A funds are likely to be the primary federal program funds directly affected by the ESEA Title I-E authority in most participating LEAs. It is possible, however, depending on which eligible federal funds and the percentage of such funds an LEA decides to include in its weighting student funding system, that the distribution of funds under other ESEA programs that have funds eligible for consolidation could change substantially. Current Policies for Allocating Title I-A Funds to Schools Within LEAs As is explained below, the allocation of Title I-A funds within LEAs is focused on providing grants to schools with comparatively high concentrations of students from low-income families, not individual students. Thus, the authority under ESEA Title I-E to combine Title I-A funds with state and local funds under weighted student funding formulas and to have the Title I-A funds follow students to any public school in the LEA, not just those with concentrations of students from low-income families, is a significant shift from the way the program is generally implemented. Under almost all federal education assistance programs, grants are made to states or to LEAs (or subgranted to LEAs by SEAs) with services or resources provided in a manner that is managed by the SEA or LEA. In sharp contrast to this general pattern, most ESEA Title I-A funds are allocated to individual schools, under statutory allocation provisions, although LEAs retain substantial discretion to control the use of a share of Title I-A grants at a central district level. While there are several rules related to school selection, LEAs must generally rank public schools by their percentage of pupils from low-income families, and serve them in rank order. LEAs may choose to consider only schools serving selected grade levels (e.g., only elementary schools or only middle schools) in determining eligibility for grants, so long as all public schools where more than 75% of the pupils from low-income families receive grants (if sufficient funds are available to serve all such schools). LEAs also have the option of serving all high schools where more than 50% of the pupils are from low-income families before choosing to serve schools at selected grade levels. All participating schools must generally have a percentage of children from low-income families that is higher than the LEA's average, or 35%, whichever of these two figures is lower. The percentage of students from low-income families for each public school is usually measured directly, although LEAs may choose to measure it indirectly for middle or high schools based on the measured percentages for the elementary or middle schools that students attended previously (sometimes called "feeder schools"). LEAs have the option of setting school eligibility thresholds higher than the minimum in order to concentrate available funds on a smaller number of schools, and this is especially the practice in some large urban LEAs. For example, according to data available from ED, in the 2015-16 school year all public schools reported as participating in Title I-A in Chicago had a free and reduced-price lunch child percentage of 55% or higher, whereas the minimum eligibility threshold would generally be 35%. In almost all cases, the data used to determine which pupils are from low-income families for the distribution of Title I-A funds to schools are not the same as those used to estimate the number of school-age children in low-income families for purposes of calculating Title I-A allocations to states and LEAs. This is because Census or other data are generally not available on the number of school-age children enrolled in a school, or living in a residential school attendance zone, with income below the standard federal poverty threshold. Thus, LEAs must use available proxies for low-income status. The Title I-A statute allows LEAs to use the following low-income measures for school selection and allocations: (1) eligibility for free and reduced-price school lunches under the federal child nutrition programs, (2) eligibility for Temporary Assistance for Needy Families (TANF), (3) eligibility for Medicaid, or (4) Census poverty estimates (in the rare instances where such estimates may be available for individual schools or school attendance areas). According to the most recent relevant data, approximately 90% of LEAs receiving Title I-A funds use free/reduced-price school lunch (FRPL) dataâsometimes alone, sometimes in combination with other authorized criteriaâto select Title I-A schools and allocate funds among them. The income eligibility thresholds for free and reduced-price lunchesâ130% of the poverty income threshold for free lunches, and 185% of poverty for reduced-price lunchesâare higher than the poverty levels used in the Title I-A allocation formulas to states and LEAs. For example, for a family of four people during the 2018-2019 school year, the income threshold for eligibility was $32,630 for free lunches and $46,435 for reduced price lunches. By contrast, the poverty threshold for a family of four people in 2018 was $25,100. While Title I-A funds are to be focused on the schools within a recipient LEA with percentages of students from low-income families that are relatively high in the context of their locality, many Title I-A schools do not have high percentages of low-income students when considered from a national perspective. Largely because of the relatively low poverty rate thresholds for LEA eligibility to receive Title I-A grants, many low-poverty LEAs receive Title I-A funds, and often the highest-poverty schools in those LEAs do not have high percentages of students from low-income families compared to the nation as a whole. For example, according to ED, 23% of the nation's public schools that are in the lowest quartile nationwide in terms of their percentage of students from low-income families (35% or below) receive Title I-A grants. Title I-A funds are allocated among participating schools in proportion to their number of pupils from low-income families, although grants to eligible schools per pupil from a low-income family need not be equal for all schools. LEAs may choose to provide higher grants per child from a low-income family to schools with higher percentages of such pupils. A Title I-A school at which 40% or more of the students are from low-income families may provide Title I-A services via a schoolwide program, under which all of the students at the school may be served. This is in contrast to the other mode of providing Title I-A servicesâvia targeted assistance schoolsâwherein Title I-A may be used only for services directed to the lowest-achieving students at the schools. The share of funds to be used by each Title I-A LEA to serve educationally disadvantaged pupils attending private schools is determined on the basis of the number of private school students from low-income families living in the residential areas served by public schools selected to receive Title I-A grants. In making this determination, LEAs may use either the same source of data used to select and allocate funds among public schools (i.e., usually FRPL data) or one of a specified range of alternatives. As noted earlier, the allocation of Title I-A funds within LEAs is focused on providing grants to schools with comparatively high concentrations of students from low-income families, not individual students. One rationale for the strategy of concentrating Title I-A funds on relatively high poverty schools is that the level of funding for each participating student is relatively low and can finance a substantial level of services only if combined with Title I-A funding for numerous eligible students in a school. Title I-A funding per student is usually discussed in terms of grant amounts per student served under the program. Especially with the growth of schoolwide programs in recent years, the amount of funding per student deemed to be participating in the program (which includes all students in schoolwide program sites) would be estimated at $645. Even this amount, which is based on dividing the total FY2019 Title I-A appropriation ($15,859,802,000) by the latest published estimate of the number of students participating in Title I-A programs (24.6 million), would be an overestimate, as it does not take into account the share of Title I-A funds that do not reach individual schools because they are used at the state or LEA level for activities such as administration, school improvement, and districtwide programs (e.g., professional development for Title I-A teachers). However, under weighted student funding the more relevant figure would be the level of funding per student from a low-income family. If the standard of low-income most often applied in the current Title I-A school allocation process were used, the number of public school students from low-income families would be slightly higher (25.8 million) and the national average Title I-A grant per pupil from a low-income family would be $614. For the reasons just discussed (i.e., not accounting for funds retained at the state or LEA level), this would also be an overestimate of the amount of funding per student. Other ESEA Programs Potentially Affected by the Title I-E Authority Beyond the primary focus on the ESEA Title I-A program, it is possible that LEAs participating in the weighted student funding authority would include funds from at least some of the other potentially affected programs. For example, the one currently approved applicant for the ESEA Title I-E authority, Puerto Rico, plans to allocate 53% of its Title I-A funds plus 55% of its Title II-A and 92% of its Title III-A funds to schools through its weighted student funding formula. Thus, in participating LEAs, at least some federal programs that are currently centrally managed by LEAs may be decentralized and managed, at least in part, by individual schools. The extent to which this occurs may depend on the percentage of funds of an eligible federal program that are allocated through the LEA's weighted student funding formula as opposed to being retained at the state or LEA level. Possible Issues Regarding the Weighted Student Funding Authority Available Under Title I-E The last section of the report examines issues related to the Title I-E flexibility authority. The first set of issues examines possible reasons why participation by LEAs in the Title I-E authority has been low and some potential issues related to it. It then considers why LEAs might want to participate in the Title I-E authority based on reasons stated by ED. This is followed by an examination of possible issues that may arise if participation in the Title I-E authority increases. This includes consideration of how the allocation of eligible federal funds, particularly Title I-A funds, could be different if the Title I-E flexibility was adopted more broadly, as well as LEA access to other fund consolidation authority, whether the use of the Title I-E authority could increase the extent to which federal programs are focused on individual schools, whether the Title I-E authority could represent a model for a major change in the distribution of ESEA funds, and whether adequate safeguards exist to ensure that the purposes of federal education programs whose funds are consolidated are met. Why have relatively few LEAs applied for the Title I-E flexibility authority thus far? As of July 2019, six LEAs have applied for the weighted student funding authority under Title I-E, and one has been approved. The single approved LEA, Puerto Rico, intends to implement the authority beginning in the 2019-2020 school year. One reason for the low rate of participation could be the relatively slow implementation by ED. The authority was provided under the ESSA's amendments to the ESEA, enacted on December 10, 2015. However, ED's initial announcement that the flexibility authority was available was made more than two years later, on February 2, 2018. LEA interest, to the extent that it existed, may have waned over this time period. Another possible constraint on LEA interest in applying for the Title I-E authority is that the authority is applicable for only a three-year period. While potentially renewable, and while such a time limitation may be typical and appropriate for a pilot authority, LEAs may be hesitant to make major changes to, or new investments in, their school finance system or administration of Title I-A and other federal programs for such a limited time period. While it is not a requirement that an LEA already be implementing a weighted student funding system in order to participate in Title I-E, the number of LEAs that have already adopted weighted student funding for their state and local funds, and would therefore be interested in expanding those systems to include a number of federal programs, may be limited. There is no definitive, comprehensive listing of LEAs currently using weighted student funding formulas. While a number of relatively large urban LEAs are doing so, the total number of such LEAs may still be rather small, limiting the number of likely and eligible applicants for the federal weighted student funding authority. Potential applicants may be deterred by the limitations to the federal weighted student funding authority. While state- and LEA-level weighted student funding formulas often include state and local funding for students with disabilities and career and technical education programs, the Title I-E authority does not apply to funds under IDEA or the Perkins CTE Act. While it might seem most appropriate for an ESEA flexibility provision to apply only to ESEA programs, and while the IDEA and the Perkins CTE Act involve somewhat different constituencies and interest groups than the ESEA, the Title I-E flexibility authority might be more consistent with many state and local weighted student funding policies, and offer enhanced flexibility to participating LEAs, if it included at least some of the IDEA and Perkins CTE Act funding streams. In addition, as discussed below, schools operating schoolwide programs under Title I-A are already permitted to consolidate federal funds provided through non-ESEA programs (e.g., IDEA and Perkins CTE Act funds) with their state and local funds. It is also possible that LEAs have been deterred by the Title I-E requirement that weighted student funding systems must use actual personnel expenditures, including staff salary differentials for years of employment, in their systems. Based on the preliminary results of an ongoing study on the use of weighted student funding systems in LEAs, most of the LEAs in the study have continued to use average staff salaries, rather than actual personnel expenditures, in their weighted student funding systems. In addition, while many requirements under ESEA Title I-A and other ESEA programs are waived in LEAs receiving the weighted student funding flexibility authority, a number of others (e.g., those involving fiscal and academic outcome accountability) remain in effect. This may cause potential-applicant LEAs to determine that the possible reduction in administrative burdens (e.g., from having to track the use of some federal funds, or to allocate them among schools as they have in the past) is not sufficient for them to be motivated to apply. Could there be changes in individual public school funding levels within LEAs as a result of an LEA entering into a local flexibility demonstration agreement? If an LEA enters into a local flexibility demonstration agreement, the resulting distribution of state, local, and eligible federal funds under a weighted student funding system that meets the Title I-E requirements could lead to funds shifting among public schools in the LEA. While this may result in public schools serving low-income students, ELs, and other disadvantaged students receiving an increase in funding, it is possible that other public schools may lose funds, possibly a substantial amount or percentage of their current funding. Decreases in funding levels in the course of one school year could potentially be difficult for an individual school to absorb. Without state, local, or federal funds to help ease the transition to a weighted funding system, it is possible that some LEAs may be hesitant to apply to enter into an agreement. Under current law, the Title I-E authority for the Secretary does not include any federal funds to implement local flexibility demonstration agreements or offset the loss of funds in public schools as LEAs implement weighted student funding systems under an agreement. In its budget requests, ED has proposed providing grants to LEAs implementing a local flexibility demonstration agreement for these purposes (see previous discussion of FY2018, FY2019, and FY2020 budget requests), but no such funds have yet been appropriated. What might happen with respect to expansion of the local flexibility demonstration agreements beyond the original limit of 50 LEAs? The delay in implementation of the Title I-E authority by the Secretary complicates the schedule envisioned in the Title I-E legislation regarding expansion of eligibility for weighted student funding flexibility to potentially all LEAs. Eligibility for the weighted student funding authority was limited to no more than 50 LEAs for school years preceding 2019-2020. But the statute provides that eligibility may be expanded to any LEA beginning with the 2019-2020 school year, as long as a "substantial majority" of the LEAs participating in previous years have met program requirements. However, no LEA will actually begin implementing the Title I-E flexibility authority until the 2019-2020 school year. Thus, a key requirement for program expansion cannot be met. It is unclear how this would be resolved moving forward should additional LEAs express interest in applying for the Title I-E authority. What goals or purposes might be served by the use of the weighted student funding authority in participating LEAs? Given the relatively low level of LEA interest in the flexibility offered by Title I-E, there are questions about why an LEA would want to enter into a local flexibility demonstration agreement. In a document titled "Why should your school district apply for the Student-centered Funding pilot?," ED outlined several opportunities that, in its opinion, would be advanced for LEAs that implement the ESEA Title I-E authority. ED states that participating LEAs would have greater flexibility in the use of the affected federal education program funds, because those federal funds could be used in the same manner as state and local funds, with no specifically required or prohibited uses. LEAs would be able to set their own priorities for these funds. ED further states that participating LEAs would experience reduced administrative burdens, because federal funds under the affected programs would not have to be tracked separately. By combining state, local, and federal funds, participating LEAs could prioritize funding for groups of students with particular needs by developing or expanding a weighted student funding system. ED also notes that participating in the Title I-E authority would enhance transparency in the allocation of resources within LEAs and facilitate the involvement of school-level leaders in resource allocation. In addition, advocates of weighted student funding policies in general often argue that they enhance options for student mobility and choice among public schools in an LEA, support school-based management practices, and may increase the targeting of total (local, state and federal) funds on schools attended by disadvantaged students. The ED document specifically compares the weighted student funding authority to the schoolwide program authority provided under ESEA Title I-A. The document states that the weighted student funding authority is more expansive than the schoolwide program authority, as it would be available to all public schools within the LEA. (For more information about differences between the Title I-E authority and schoolwide program authority to consolidate federal funds, see the next "issue" discussion.) These views of ED and of advocates of weighted student funding may be countered by other views of, or concerns about, the weighted student funding authority, as discussed elsewhere in the "Issues" section of this report. How does the authority granted under Title I-E differ from authority for Title I-A schools operating schoolwide programs to consolidate federal funds with state and local funds? Title I-A schools that are operating schoolwide programs already have the authority to consolidate their federal, state, and local funds without having to create a weighted student funding system. However, there are several differences between the funding consolidation authority available to Title I-A schools operating schoolwide programs under Section 1114 and the funding consolidation authority available under Title I-E. The authority to consolidate funds under schoolwide programs is only available to Title I-A schools operating those programs (as opposed to operating targeted assistance programs). Schools operating schoolwide programs have the choice of whether to consolidate their federal, state, and local funds or not. Under the Title I-E authority, all public schools in an LEA that has entered into a local flexibility demonstration agreement would be required to consolidate state, local, and eligible federal funds. An individual public school would not have a choice about participating in the weighted student funding system. Schools operating schoolwide programs must conduct a comprehensive needs assessment, develop a comprehensive schoolwide plan, annually review the schoolwide plan, and revise the plan as necessary based on student needs. Schools located in an LEA participating in Title I-E are not required to conduct a comprehensive needs assessment or develop and maintain a comprehensive plan. For any funds consolidated by a school or an LEA, respectively, under either a schoolwide program or a local flexibility demonstration agreement, the school or LEA must ensure that it meets the intent and purposes of each federal program whose funds were consolidated. While federal programs eligible for consolidation under the Title I-E authority are limited to selected ESEA programs, schools operating schoolwide programs have the flexibility to consolidate funds from ESEA programs as well as non-ESEA programs, such as the IDEA and Perkins Act, provided certain requirements are met. Federal funds consolidated under either a schoolwide program or the Title I-E authority are subject to supplement, not supplant requirements. Could implementation of the weighted student funding authority result in less targeting of Title I-A funds on high-poverty schools? Title I-A is the only one of the potentially affected federal programs that currently has school-level allocation requirements. It currently is primarily a "school-based" program, with funds targeted on the specific schools in each LEA with relatively high concentrations of students from low-income families. In sharp contrast, under the Title I-E flexibility authority Title I-A funds in a participating LEA would be provided to any public school in the LEA that enrolls even one student from a low-income family. While it is not possible precisely to compare the current allocation of Title I-A funds to schools to how they might be allocated under the weighted student funding authority, there would be a distinct contrast in general strategy between the two sets of allocation policies. The Title I-A program structure is based implicitly on the assumption, and the findings of past studies, that the relationship between poverty and low achievement is not especially strong for individual pupils, but the correlation between concentrations of poverty and concentrations of low-achieving pupils is quite high. According to proponents of the current structure of Title I-A, this implies that limited Title I-A funds should be concentrated on the highest-poverty schools if they are to address the greatest pupil needs. In addition, the level of Title I-A funding per pupil (a maximum of an estimated $645 per pupil served or $614 per pupil from a low-income family, as discussed above) might be sufficient to pay the costs of substantial supplementary educational services only if combined for relatively large numbers of students in a school. Under the Title I-E flexibility authority, while funds would be allocated among these schools in proportion to their number of students from low-income families, the overall distribution of Title I-A funds would almost undoubtedly be more dispersed among more public schools than under current policies. Concerns regarding economies of scale would argue against the dispersal of Title I-A grants among potentially all schools in a locality. As noted, it is possible that the current level of aid per student can provide a significant amount of resources or services only if combined for a substantial number of pupils in a school. While this would not be a concern at public schools that numerous pupils from low-income families choose to attend, it would be an issue at schools that only a few such children choose to attend. However, this concern might be countered by the fact that under a weighted student funding process, not only Title I-A funds but also state and local funds and potentially other eligible federal program funds would be combined and allocated under a formula giving additional weight to students from low-income families. It is also specifically required that the high-poverty schools in a participating LEA receive in the first year of implementation more total funding per pupil from a low-income family (and at least as much per EL) as in the year preceding initial implementation of the flexibility authority, and at least as much in succeeding years. Thus, while Title I-A funds alone would likely be substantially more widely dispersed among schools than they currently are, it is possible that total federal, state, and local funding to relatively high-poverty schools would increase, especially in LEAs that had not previously adopted weighted student funding policies with respect to their state and local funds. Would the Title I-E flexibility authority increase the extent to which federal programs other than Title I-A are focused on individual schools? It is possible that as a result of the Title I-E flexibility, some eligible federal programs may become more focused on the use of funds at the school level as opposed to the state or LEA level. There is currently limited data on how funds under eligible federal programs are distributed to the school level, if at all. It may be helpful from a data analysis perspective to have comprehensive data on the specific federal education funds provided to each public school to examine whether switching to a weighted student funding system that meets the requirements of Title I-E alters this distribution of funds. Under the ESEA as amended by the ESSA, Title I-A requires participating states to include in school report cards data on expenditures at each public school. The state report card must provide data on LEA- and school-level per-pupil expenditures of federal, state, and local funds, including actual personnel expenditures and actual nonpersonnel expenditures, disaggregated by the source of funds. The data must be reported for every LEA and public school in the state. These data have not been reported for LEAs and public schools in the past. Based on draft guidance issued by ED, SEAs and LEAs may delay reporting per-pupil expenditures until they issue report cards for the 2018-2019 school year. However, if an LEA decides to delay the reporting of per-pupil expenditures, the SEA and its LEAs are required to provide information on their report cards for the 2017-2018 school year about the steps they are taking to provide such information on the 2018-2019 school year report card. While this new reporting requirement does not require schools to disaggregate the receipt of funds under Title I-E eligible federal programs, it will, for the first time, detail the per-pupil expenditure of aggregate federal funds that are allocated or used at the school level. If LEAs participating in the Title I-E authority include Title I-A funds in their agreement, it may be possible to get a sense of whether the allocation of federal funds at individual schools is changing under weighted student funding systems that meet the requirements of Title I-E. Might the weighted student funding authority represent a model for a major change in strategy for Title I-A and other potentially affected ESEA programs? In participating LEAs that include Title I-A funds in their weighted student funding systems, Title I-A would be transformed from a "school-based" program to an "individualized grant." The Title I-E flexibility authority arguably represents a substantial change in the basic strategy of Title I-A, and to a lesser extent other potentially affected federal education programs. As discussed earlier, from its beginning in 1965 Title I-A has been primarily a school-based program. Funds are to be allocated only to the relatively high-poverty schools in each participating LEA. Within those recipient schools, Title I-A funds are to be used only to serve the lowest-achieving students unless the school meets the 40% low-income threshold, in which case they can be used to serve all students. The level of Title I-A funding per student served is relatively modest, and it is implicitly assumed that such amounts are sufficient to provide substantial services only if combined for relatively large numbers of students from low-income families in a school. Further, there are a number of requirements regarding the authorized uses of Title I-A funds to meet the special educational needs of educationally disadvantaged students in participating schools. The weighted student funding pilot represents a very different approach. First, while academic outcome accountability and civil rights requirements will continue to apply to all public schools in states receiving Title I-A funds, and fiscal accountability requirements will continue to apply to certain "high-poverty" schools within LEAs, other requirements for targeting schools or uses of funds will be waived. Administrative burdens would be reduced, but so would a number of potentially important requirements for targeting services on students with the greatest educational needs. Title I-A and other federal program funds would be combined with state and local funds into weighted grant amounts that would be dispersed among all public schools in the LEA, and that would follow students if they transfer among schools in the LEA (though possibly with a time lag). This is a very different approach from traditional Title I-A programs. The "individualized grant" approach embodied in the Title I-E authority might serve as a model that could, in the future, be expanded if desired through congressional action to include students attending public schools in other LEAs of the same state, or possibly even eligible students enrolled in private schools. Do the provisions of Title I-E provide adequate assurance that the purposes of the eligible ESEA programs will be met by participating LEAs? The Title I-E flexibility authority provides for the waiver of a wide range of requirements regarding the allocation of Title I-A funds to schools, and regarding the authorized uses of funds under all of the eligible federal programs. However, participating LEAs must ensure that the purposes of the eligible federal programs included in their weighted student funding systems are met. This may be challenging for participating LEAs, at least initially, as more federal funding from non-Title I-A programs is provided to the school level as opposed to being retained and controlled at the LEA level and as Title I-A funds are potentially used for the first time in schools that had not previously received the funds. Appendix. Glossary of Acronyms CTE: Career and Technical Education ED: U.S. Department of Education EFIG: Education Finance Incentive Grant EL: English Learner ESEA: Elementary and Secondary Education Act ESSA: Every Student Succeeds Act ( P.L. 114-95 ) IDEA: Individuals with Disabilities Education Act LEA: Local educational agency OEG: Open Enrollment Grant SEA: State educational agency SSAE: Student Support and Academic Enrichment grants TANF: Temporary Assistance for Needy Families Summary:	null	96	78,022	78,024	78,024	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The Every Student Succeeds Act (ESSA; P.L. 114-95 ) amended the Elementary and Secondary Education Act (ESEA) to add a new Part E to Title I entitled "Flexibility for Equitable Per-Pupil Spending." Under Title I-E, the Secretary of Education (the Secretary) has the authority to provide local educational agencies (LEAs) with flexibility to consolidate eligible federal funds with state and local funding to create a "single school funding system based on weighted per-pupil allocations for low-income and otherwise disadvantaged students." The ESEA Title I-E authority is applicable to LEAs that are using or agree to implement "weighted student funding" systems to establish budgets for, and allocate funds to, individual public schools. These funding systems base school funding on the number of pupils in each school in specified categories. Under these funding systems, weights are assigned to a variety of pupil characteristics that are deemed to be related to the costs of educating such pupilsâsuch as being from a low-income family, being an English Learner (EL), or having a disability. Weights are also assigned on the basis of students' educational program (grade level, career-technical education, gifted and talented, or others). School budgets are based on these weighted pupil counts, in contrast to treating all pupils in the same manner. Under weighted student funding policies, school allocations are based on weighted counts of students enrolled in them; therefore, if students transfer from one public school to another within the same LEA, their weighted budget level transfers with them, although possibly with a time lag. The Secretary is permitted to waive a wide range of requirements under various ESEA programs, including provisions related to the allocation of Title I-A funds to schools, for LEAs entering into an agreement under Title I-E if an existing ESEA requirement would prevent the LEA from implementing its weighted student funding system under the agreement. LEAs must, however, meet Title I-E requirements for allocations to schools with students from low-income families and ELs. LEAs must also continue to meet a number of Title I-A and other requirements, though in somewhat modified fashion in some instances. The Title I-E authority is limited to 50 LEAs in school years preceding 2019-2020, but it could be offered to any LEA from that year onward, as long as a "substantial majority" of the LEAs participating in previous years have met program requirements. In February 2018, the Secretary announced that she would begin accepting applications from LEAs to enter into local flexibility demonstration agreements under the Student-Centered Funding Pilot, which is how the U.S. Department of Education (ED) refers to the Title I-E authority. To date, six LEAs have applied for the Title I-E authority, and only Puerto Rico has been approved to enter into an agreement. Puerto Rico will begin implementing a weighted student funding system using the Title I-E flexibility authority during the 2019-2020 school year. Thus, no LEAs will have implemented weighted student funding systems under Title I-E prior to the 2019-2020 school year. To provide context for the Title I-E authority, this report begins with a brief discussion of how public elementary and secondary education is financed at the state and local levels. It focuses on the primary types of state school finance programs and school finance "equalization," including an overview of weighted student funding systems. For a more detailed discussion of state and local financing of public schools, see CRS Report R45827, State and Local Financing of Public Schools . Building on this background, the remainder of the report focuses on the Title I-E authority. First, there is an examination of the Title I-E statutory authority and related non-regulatory guidance provided by ED. This is followed by a discussion of current Title I-E implementation issues. The next section considers possible interactions between the Title I-E authority and other ESEA programs, particularly Title I-A. The report concludes with discussion of some issues that may arise related to the Title I-E authority. Overview of Financing for Public Elementary and Secondary Schools in the UnitedÂ States This section provides a brief overview of funding sources for public elementary and secondary education. It also discusses school finance "equalization," including an examination of the use of weighted student funding at the state and LEA levels. Sources of Funding for Public Elementary and Secondary Education The funding of public elementary and secondary schools in the United States involves a combination of local, state, and federal government revenues, in proportions that vary substantially both across and within states. Overall, a total of $678.4 billion in revenues was devoted to public elementary and secondary education in the 2015-16 school year (the latest year for which detailed data on revenues by source are available). State governments provided $318.6 billion (47.0%) of these revenues, local governments provided $303.8 billion (44.8%), and the federal government provided $56.0 billion (8.3%). Over the last several decades, the share of public elementary and secondary education revenues provided by state governments has increased, the share provided by local governments has decreased, and the federal share has varied within a range of 6.0% to 12.7%. The primary source of local revenues for public elementary and secondary education is the property tax, while state revenues are raised from a variety of sources, primarily personal and corporate income and retail sales taxes, a variety of "excise" taxes such as those on tobacco products and alcoholic beverages, plus lotteries in several states. All states (but not the District of Columbia) provide a share of the total revenues available for public elementary and secondary education. This state share varies widely, from approximately 25% in Illinois to almost 90% in Hawaii and Vermont. The programs through which state funds are provided to LEAs for public elementary and secondary education have traditionally been categorized into five types of programs: (1) Foundation Programs, (2) Full State Funding Programs, (3) Flat Grants, (4) District Power Equalizing, and (5) Categorical Grants. , Of these, Foundation Programs are the most common, although many states use a combination of program types. School Finance "Equalization" A goal of all of the various types of state school finance programs is to provide at least some limited degree of "equalization" of spending and resources, and/or local ability to raise funds, for public elementary and secondary education across all of the LEAs in the state. Such programs often establish target levels of funding "per pupil." The "pupil" counts involved in these programs may simply be based on total student enrollment as of some point in time, or they may be a "weighted" count of students, taking into account variations in a number of categoriesâspecial pupil needs (e.g., disabilities, low family income, limited proficiency in English), grade levels, specific educational programs (e.g., career and technical education), or geographic considerations (e.g., student population sparsity or local variation in costs of providing education). State Use of Weighted Student Funding A review of the individual state entries in a recent survey is an instructive indication of the extent to which weighted student counts are used to determine funding levels under current state programs. It shows that at least 32 states used some degree of weighting of the pupil counts used to calculate state aid to LEAs. Most of these states have policies that assign numeric weights to different categories of pupils, while in other states the school finance program specifies different target dollar amounts for specific categories of pupils, which is mathematically equivalent to assigning weights. Many states also adjust pupil weights for those in selected grade levels, geographic areas, or programs. Weights are often higher for pupils in the earliest grades or in grades 9-12, though policies vary widely, and a few states prioritize other grade levels such as 7-9. The population sparsity weights recognize the diseconomies of scale in areas with especially small LEAs or schools. The career and technical education weights recognize the extra costs of these types of programs. Application of Weighted Student Funding in LEA Programs to Finance Individual Schools As seen above, the concept of pupil weighting is often applied in determining funding levels for LEAs under state school finance programs. After state funds reach LEAs, they are combined with locally raised funds to provide educational resources to students in individual schools. It is this stage in the distribution of educational resources that is relevant to the weighted student funding authority in ESEA Title I, Part E (see subsequent discussion of Title I-E). Below is an overview of both conventional intra-LEA budgeting policies and the use of weighted student funding at the LEA level. Conventional Intra-LEA Budgeting Policies Under the traditional, and still most common, method of allocating resources within LEAs, there are no specific budgets for individual schools. Available state and local funds are managed centrally, by LEA staff, and various resourcesâfacilities, teachers, support staff, school administrators, instructional equipment, etc.âare assigned to individual schools. In this process, LEA staff typically apply LEA-wide standards such as pupil-teacher ratios or numbers of various categories of administrative and support staff to schools of specific enrollment sizes and grade levels. While levels of expenditures per pupil may be determined for individual schools under these budgetary systems, they are calculated "after the fact," based on whatever staff and other resources have been assigned to the school. And while standard ratios of pupils per teacher or other resource measures may be applied LEA-wide in these situations, substantial variations in the amounts actually spent on teachers and other resources in each school can result from systematic variations in teacher seniority and other factors. These variations might be masked by local policies to apply average salaries, rather than specific actual salaries, in school accounting systems. Further, under traditional school budgeting policies there is little or no immediate or direct adjustment of resources or spending when students transfer from one school to another. Weighted Student Funding Concept Applied to Intra-LEA Budgeting forÂ Schools In contrast to traditional, fully centralized budgeting and accounting policies for public schools within LEAs, a number of LEAs have in recent years applied the weighted student funding concept to developing and implementing individual school budgets. These policies are not currently applied to any federal program funds and are applied only to a portion of the state and local revenues received by these LEAs, as they continue to centrally administer and budget for various activities such as school facility construction, operations and maintenance, employee benefits, transportation, food services, and many administrative functions . The LEAs develop school budgets for teachers, support staff, and at least some other resources on the basis of weighted counts of the students currently enrolled in each school, and adjust these budgets when students transfer from one school to another. CRS is not aware of any comprehensive listing of all of the LEAs that are currently implementing weighted student funding policies for intra-LEA allocations to schools. The use of weighted student funding within LEAs is a relatively new practice in most cases, and comprehensive research on its effects is not yet available. However, Dr. Marguerite Roza and her team at the Edunomics Lab at Georgetown University were awarded a three-year grant by the Institute of Education Sciences at ED to study whether spending patterns change with weighted student funding systems and what the effects of these systems are on equity and achievement, particularly for poor and at-risk students. An interview with Dr. Roza based on their preliminary findings revealed that nearly all 19 LEAs in the study that use weighted student funding systems cite equity (89%) and flexibility for school principals (79%) as a main reason for implementing such systems. Dr. Roza also noted that there is not a "standard" weighted student funding model used by LEAs and that LEAs differ with respect to the share of their total budgets allocated through weighted student funding systems, how base amounts are defined, and the weights assigned to various categories of students. She also noted that almost all of the LEAs in their study continue to use average salaries in their budgeting rather than actual personnel expenditures. ESEA Title I-E The remainder of this report focuses on the new authority for flexible per-pupil spending made available under ESEA Title I-E. The discussion begins with an examination of the Title I-E statutory requirements and implementation of that authority. This is followed by an analysis of how these requirements may interact with ESEA programmatic requirements for several programs, with a focus on interactions with the Title I-A program. The report concludes with discussion of possible issues related to the Title I-E authority. Title I-E Authority This section discusses the requirements related to the Title I-E authority. All of the statutory provisions are included in ESEA, Section 1501. Overview The purpose of the Title I-E authority is to provide LEAs with flexibility to consolidate eligible federal funds with state and local funding to create a "single school funding system based on weighted per-pupil allocations for low-income and otherwise disadvantaged students." Once consolidated in a participating LEA's weighted student funding system, the eligible federal funds are treated the same way as the state and local funds. There are no required uses associated with the eligible federal funds provided that the expenditures are "reasonable and necessary" and the purposes of the eligible federal programs for which funds have been consolidated are met. Federal Funds Eligible for Consolidation Eligible federal funds that may be consolidated under the Title I-E authority include ESEA funds received by LEAs under the programs listed below. Programs that provide formula grant funding to LEAs directly or via the state educational agency (SEA) are denoted by an asterisk. Title I-A* Migrant Education (Title I-C) Neglected and Delinquent (Title I-D-2)* Supporting Effective Instruction (Title II-A)* Teacher and School Leader Incentive Program (Title II-B-1) Comprehensive Literacy State Development Grants (Title II-B-2) Innovative Approaches to Literacy (Title II-B-2) School Leader Recruitment and Support (Title II, Section 2243) English Language Acquisition (Title III)* Student Support and Academic Enrichment (Title IV-A)* Small, Rural School Achievement Program (Title V-B-1)* Rural and Low-Income School Program (Title V-B-2)* In general, a participating LEA may use the consolidated federal funds without having to meet the specific requirements of each of the programs whose funds were consolidated provided the LEA is able to demonstrate the funds allocated through its weighted student funding systems address the purposes of each of the federal programs. For example, under the Student Support and Academic Enrichment (SSAE) grant program, LEAs must use funds for well-rounded education, safe and healthy students, and technology purposes. If SSAE funds were consolidated with state and local funds under a weighted student funding system, then the participating LEA would have to demonstrate that the activities being implemented in its schools meet these purposes. However, the LEA would not have to meet SSAE grant requirements about how much funding was used for each purpose. If a participating LEA consolidates funds from an eligible federal program that provides competitive grants to LEAs into its weighted student funding system, it is still required to carry out the scope and objectives, at a minimum, as described in the LEA's approved application. The majority of federal funds available for LEAs to use under the Title I-E authority are provided through formula grants. LEAs applying for funding flexibility under Title I-E are not required to include funds from every eligible federal program in their weighted student funding systems. If a participating LEA opts not to include some of the eligible federal funds in its system, all current statutory and regulatory requirements will continue to apply to those funds. It should be noted that no non-ESEA funds, such as those available under the Individuals with Disabilities Education Act (IDEA) or Perkins Career and Technical Education (CTE) Act, are considered eligible federal funds for the purposes of the Title I-E authority. Secretarial Authority Under the authority granted under Title I-E, the Secretary may enter into a local flexibility demonstration agreement for up to three years with an LEA that is selected to participate and meets the required terms of the agreement (hereinafter referred to as a participating LEA). A participating LEA may consolidate and use funds as stated in the agreement to develop and implement a school funding system based on weighted student funding allocations for low-income and otherwise disadvantaged students. Except as discussed below, the Secretary is authorized in entering into these agreements to waive any ESEA provision that would prevent a participating LEA from using eligible federal funds in its weighted student funding system, including Title I-A requirements regarding the allocation of Title I-A funds to public schools (Section 1113(c)). Thus, the waiver authority granted to the Secretary for the purposes of Title I-E is broader than the general waiver authority available under Section 8401. Under the latter, the Secretary is prohibited from waiving provisions such as the allocation or distribution of funds to grantees. However, there are several statutory requirements that participating LEAs must agree to continue to meet. For example, each participating LEA must agree to meet the three Title I-A fiscal accountability requirements in Section 1118, which include maintenance of effort (Section 1118(a)), supplement, not supplant (Section 1118(b)), and comparability (Section 1118(c)). The maintenance of effort provision requires LEA expenditures of state and local funds to be at least 90% of what they were for the second preceding fiscal year for public elementary and secondary education. The use of either a weighted student funding system or a traditional funding system should not directly affect the amount of state and local funds spent on public education, so the use of a weighted student funding system does not present any problems with meeting this requirement. The supplement, not supplant provision requires that Title I-A funds be used so as to supplement and not supplant state and local funds that would otherwise be provided to Title I-A schools. According to ED, an LEA may presume that this requirement has been met if the LEA "implements its system so that the State and local funds that are included in the system include the funds that Title I, Part A schools would have received if they were not Title I, Part A schools." Comparability requires that a comparable level of services be provided with state and local funds in Title I-A schools compared with non-Title I-A schools prior to the receipt of Title I-A funds. Many LEAs currently meet this provision using a pupil-teacher ratio to compare Title I-A and non-Title I-A schools. It is possible that they may not be able to continue to use this method under a weighted student funding system. According to ED, if an LEA demonstrates comparability based on the state and local funds received by each Title I-A school compared to non-Title I-A schools through an equitable funding system, the LEA's weighted student funding system would "constitute per se comparability." Therefore, according to ED, an LEA might find it "advantageous to demonstrate comparability based on funds rather than a staff-student ratio." The identification of public schools for purposes of the supplement, not supplant and comparability fiscal accountability provisions requires the identification of public schools as Title I-A schools and their Title I-A funding levels under the current structure of the program. Thus, Title I-A provisions that require LEAs to determine which public schools would receive Title I-A funds and the amount that each school would receive cannot be waived by the Secretary, even though funds would not be distributed based on these determinations if an LEA chose to include Title I-A funds in its weighted student funding system. However, as previously mentioned, an LEA does not have to distribute Title I-A funds based on the current distribution requirements if the LEA includes Title I-A funds in its weighted student funding system. In addition to meeting Title I-A fiscal accountability requirements and provisions related to the identification of Title I-A schools and their Title I-A funding levels, participating LEAs must continue to meet Title I-A program requirements related to the participation of eligible children enrolled in private schools as well as the Section 8501 requirements related to the participation of children enrolled in private schools in other ESEA programs. Prior to allocating funds through its weighted student funding system, each participating LEA must determine the amount of funds from each eligible federal program whose funds have been consolidated that must be reserved to provide equitable services under that program. For example, under Title I-A a participating LEA must still determine the amount of funding that would have been provided to a public school attendance area if the LEA was allocating Title I-A funds in accordance with Section 1113(c). Based on this funding level, the LEA must determine how much Title I-A funding needs to be reserved for serving eligible private school students. The participating LEA must then follow current procedures with respect to consulting with private school officials and providing needed services under each program to eligible private school students. Remaining Title I-A funds not reserved at the LEA level would be distributed through the LEA's weighted student funding formula. Participating LEAs are also required to meet all applicable federal civil rights laws (e.g., Title VI of the Civil Rights Act) and all IDEA requirements. These requirements may not be waived by the Secretary. In addition to the requirements in statutory language, there are several other requirements that the Secretary has determined cannot be waived. For example, participating LEAs must continue to meet state-level requirements, such as implementing state academic standards, administering annual state assessments, meeting educational accountability requirements, and issuing an annual local report card, including reporting per-pupil expenditures by school. In addition, state-level requirements delegated by a state to an LEA as part of a subgrant agreement cannot be waived. For example, if a participating LEA is delegated state responsibilities for identifying migratory children and transferring student records, these responsibilities must be met. The Secretary has also determined that a participating LEA that has schools identified for comprehensive or targeted support and improvement under Section 1111 must ensure that such schools develop and implement improvement plans. If a participating LEA chooses to offer public school choice as an intervention in schools identified for comprehensive support and improvement, however, the LEA would no longer be subject to the limitation on funding for transportation. A participating LEA is also required to continue addressing the disparities that result in low-income and minority students in Title I-A schools being taught at higher rates than other students by inexperienced, ineffective, or out-of-field teachers. The Secretary has also noted that a participating LEA may have to meet additional ESEA requirements to ensure that it is meeting the purpose of each eligible federal program included in its weighted student funding system. Selection of LEAs The Secretary is permitted to enter into local flexibility demonstration agreements with up to 50 LEAs having approved applications through the 2018-2019 school year. Each interested LEA must do three things to be selected: 1. submit a proposed local flexibility demonstration agreement in accordance with the requirements of Section 1501, 2. demonstrate that the submitted agreement meets all statutory requirements, and 3. agree to meet the continued demonstration requirements included in Section 1501. Beginning with the 2019-2020 school year, the Secretary is permitted to extend the funding flexibility to any LEA that submits and has approved an application that meets the required terms that apply to local flexibility demonstration agreements provided that a "substantial majority" of LEAs that entered into agreements meet two sets of requirements as of the end of the 2018-2019 school year. First, they must meet the requirements for the weighted student funding system included in Section 1501 (discussed below). Second, they must demonstrate annually to the Secretary that compared to the previous fiscal year, no high-poverty school served by the LEA received less per-pupil funding for low-income students or less per-pupil funding for English learners. A high-poverty school is defined as a school in the highest two quartiles of schools served by the LEA based on the enrollment of students from low-income families. As will be discussed in subsequent sections, six LEAs applied for Title I-E authority, and one LEA, Puerto Rico, was approved to implement a local flexibility demonstration agreement for the 2018-2019 school year, but it will not implement the funding flexibility until the 2019-2020 school year. Thus, no LEAs will have implemented weighted student funding systems under Title I-E prior to the 2019-2020 school year. Local Flexibility Demonstration Agreement Application LEAs interested in entering into a local flexibility demonstration agreement to consolidate eligible federal funds with state and local funds in a weighted student funding system must submit an application to the Secretary. To assist in the review of applications, the Secretary may establish a peer review process. The application must include a description of the LEA's weighted student funding system, including the weights that will be used to allocate funds. It must also include information about the LEA's legal authority to use state and local funds in the system. The application must address the specific system requirements included in Section 1501 (discussed below) and discuss how the system will support the academic achievement of students, including low-income students, the lowest-achieving students, ELs, and students with disabilities. The application must detail the funding sources, including eligible federal funds and state and local funds, that will be included in the weighted student funding system. The LEA must provide a description of the amount and percentage of total LEA funding (eligible federal funds, state funds, and local funds) that will be allocated through the system. The application must also state the per-pupil expenditures of state and local education funds for each school served by the LEA for the previous fiscal year. In making this determination, the LEA is required to base the per-pupil expenditures calculation on actual personnel expenditures, including staff salary differentials for years of employment, and actual nonpersonnel expenditures. The LEA must also provide the per-pupil amount of eligible federal funds that each school served by the agency received in the preceding fiscal year, disaggregated by the programs supported by the eligible federal funds. The application must include a description of how the system will ensure that for any eligible federal funds allocated through it, the purposes of the federal programs will be met, including serving students from low-income families, ELs, migratory children, and children who are neglected, delinquent, or at risk, as applicable. An LEA is required to provide several assurances in its application. First, it must provide an assurance that it has developed and will implement the local flexibility demonstration agreement in consultation with various stakeholders including teachers, principals, other school leaders, administrators of federal programs affected by the agreement, and community leaders. Second, it must provide an assurance that it will use fiscal controls and sound accounting procedures to ensure that the eligible federal funds included in the weighted student funding system are properly disbursed and accounted for. Third, as previously discussed, it must agree to continue to meet the requirements of ESEA Sections 1117, 1118, and 8501. Finally, it must provide an assurance that it will meet the requirements of all applicable federal civil rights laws (e.g., Title VI of the Civil Rights Act) when implementing its agreement and consolidating and using funds under that agreement. Requirements for the Weighted Student Funding System In order to enter into a local flexibility demonstration agreement, each LEA must have a weighted student funding system that meets specific requirements. The system must allocate a "significant portion of funds," including eligible federal funds and state and local funds, to the school level based on the number of students in a school and an LEA-developed formula that determines per-pupil weighted amounts. The system must also allocate to schools a "significant percentage" of all of the LEA's eligible federal funds and state and local funds. The percentage must be agreed upon during the application process, and must be sufficient to carry out the purpose of the agreement and meet its terms. In addition, the LEA must demonstrate that the percentage of eligible federal funds and state and local funds that are not allocated through the LEA's system does not undermine or conflict with the requirements of the agreement. The LEA's weighted student funding system must use weights or allocation amounts that provide "substantially more funding" than is allocated to other students to ELs, students from low-income families, and students with any other characteristic related to educational disadvantage that is selected by the LEA. The system must also ensure that each high-poverty school receives in the first year of the agreement more per-pupil funding from federal, state, and local sources for low-income students than was received for low-income students from in the year prior to entering into an agreement and at least as much per-pupil funding from federal, state, and local sources for ELs as was received for ELs in the year prior to entering into an agreement. The system must include all school-level actual personnel expenditures for instructional staff, including staff salary differentials for years of employment, and actual nonpersonnel expenditures in the LEA's calculation of eligible federal funds and state and local funds to be allocated to the school level. After funds are allocated to schools through the weighted student funding formula, the LEA is required to determine or "charge" each school for the per-pupil expenditures of eligible federal funds and state and local funds. This determination must include actual personnel expenditures, including staff salary differentials for years of employment, for instructional staff and actual nonpersonnel expenditures. By charging schools based on actual costs, an LEA can ensure that schools do not receive less funding than the weighted student funding system would indicate the school should receive, even if it has lower actual expenditures in some categories compared to the LEA average. , Finally, as discussed by ED, LEAs entering into a local flexibility demonstration agreement must agree to cooperate with ED in monitoring and technical assistance activities. They must also collect and report information that the "Secretary may reasonably require" in order to conduct the program evaluation discussed below. Continued Demonstration Requirements Each participating LEA must demonstrate to the Secretary on an annual basis that, as compared to the previous year, no high-poverty school served by the LEA received (1) less per-pupil funding for low-income students or (2) less per-pupil funding for ELs from eligible federal funds and state and local funds. On an annual basis, each participating LEA is also required to make public and report to the Secretary for the preceding fiscal year the per-pupil expenditures of eligible federal funds and state and local funds for each school served by the LEA, disaggregated by each quartile of students attending the school based on student level of poverty and by each major racial/ethnic group. Per-pupil expenditure data must include actual personnel expenditures, including staff salary differentials for years of employment, and actual nonpersonnel expenditures. Each year, the participating LEA must also make public the total number of students enrolled in each school served by the agency and the number of students enrolled in each school disaggregated by economically disadvantaged students, students from major racial/ethnic groups, children with disabilities, and ELs. Any information reported or made public by the participating LEA to comply with these requirements shall only be reported or made public if it does not reveal personally identifiable information. Renewal of Local Flexibility Demonstration Agreement The Secretary is authorized to renew local flexibility demonstration agreements for additional three-year terms if the participating LEA (1) has met the requirements for weighted student funding systems and the continued demonstration requirements and (2) has a "high likelihood" of continuing to meet these requirements. The Secretary must also determine that renewing the agreement is in the interest of students served by programs authorized under Title I and Title III of the ESEA. Noncompliance After providing notice and opportunity for a hearing, the Secretary may terminate a local flexibility demonstration agreement if there is evidence that the LEA has failed to comply with the terms of the agreement, the requirements of the system, and continued demonstration requirements. If the LEA believes the Secretary has erred in making this determination for statistical or other substantive reasons, it may provide additional evidence that the Secretary shall consider before making a final determination. Program Evaluation From the amount reserved for evaluation under Section 8601, the Secretary, acting through the Director of the Institute of Education Sciences, shall consult with the relevant program office at ED to evaluate the implementation of local flexibility demonstration agreements and their effect on improving the equitable distribution of state and local funding and increasing student achievement. The statutory language does not require an evaluation of the distribution of eligible federal funds. Administrative Expenditures Each participating LEA may use for administrative purposes an amount of eligible federal funds that is not more than the percentage of funds allowed for such purposes under each eligible federal program. Program Implementation On February 2, 2018, the Secretary announced that she was using the authority made available under Title I-E to launch a Student-Centered Funding Pilot. LEAs interested in using the flexibility for the 2018-2019 school year were required to submit an application by March 12, 2018. LEAs interested in using the flexibility for the 2019-2020 school year had to apply by July 15, 2018. First Application Round Five LEAs submitted applications for the local flexibility demonstration agreement by March 12, 2018: Wilsona School District (CA), Indianapolis Public Schools (IN), Salem-Keizer School District 24J (OR), Upper Adams School District (PA), and the Puerto Rico Department of Education. Puerto Rico's application was approved on June 28, 2018. While Puerto Rico initially intended to implement a weighted student funding system that consolidated eligible federal funds with state and local funds during the 2018-2019 school year, its implementation has been delayed until the 2019-2020 school year. As of July 2019, none of the other applicants have had their applications approved. Second Application Round Only the Roosevelt School District in Arizona applied by the July deadline to use the flexibility for the 2019-2020 school year. As of July 2019, its application had not yet been approved. Recent Budget Requests This section provides an overview of ED's budget requests for FY2018 through FY2020 as they relate to the Title I-E authority. FY2018 Budget Request In its FY2018 budget request, ED requested that it be permitted to use up to $1 billion of Title I-A funding to support weighted student funding systems and public school choice. The funds would have been used to make Furthering Options for Children to Unlock Success (FOCUS) grants. One use of the FOCUS grant funds would have been to support LEAs in establishing or expanding weighted student funding systems if they agreed to combine their funding flexibility with an open enrollment policy for public school choice. ED proposed that it would establish the requirements for such open enrollment systems with a focus on "maximizing opportunities for all students, particularly those from low-income families, to select, attend, and succeed in a high-quality public school." The proposal suggested that the requirements could include, for example, making school information available to parents in a timely way, supporting school integration efforts, arranging or paying for transportation to schools of choice, and giving priority to low-income students or students in schools identified for improvement under Title I-A. ED also proposed allowing participating LEAs to use the funds to provide temporary payments to individual schools affected by the transition to a weighted funding system. In addition, the proposal included an option for ED to establish "tiers based on LEA student enrollments" and give special consideration to LEAs proposing to serve at least one rural school or to consortia of LEAs that agreed to provide interdistrict choice for all students. Implementing this proposal would have required congressional authorization, and Congress did not act on ED's request. FY2019 Budget Request In its FY2019 budget request, ED requested funding to make Open Enrollment Grants (OEGs) to LEAs approved to operate Flexibility for Equitable Per-Pupil Funding pilots authorized under Title I-E that agreed to combine their funding flexibility with an open enrollment policy for public school choice. Similar to its FY2018 budget request, ED proposed that it would establish the requirements for such open enrollment systems with a focus on "maximizing opportunities for all students, particularly those from low-income families, to select, attend, and succeed in a high-quality public school." The proposal again suggested that the requirements could include, for example, making school information available to parents in a timely way, supporting school integration efforts, arranging or paying for transportation to schools of choice, and giving priority to low-income students or students in schools identified for improvement under Title I-A. ED also proposed allowing participating LEAs to use the funds to provide temporary payments to individual schools affected by the transition to a weighted funding system, providing information on public school options to parents, and supporting needed administrative systems. ED did not request a specific amount of funding for only the OEGs. Rather, it requested $500 million for Scholarships for Private Schools and OEGs to be divided between the programs based on the demand for grants. Implementing either program would have required congressional authorization, and Congress did not act on ED's proposal. FY2020 Budget Request In its FY2020 budget request, ED requested $50 million to create Student-Centered Funding Incentive Grants to help increase LEA participation in the agreements authorized under ESEA Section 1501. These grants are not authorized in the ESEA and congressional action would be required to implement the proposal. In its proposal, ED argues that the new grants "would help demonstrate the viability" of moving to weighted student funding systems and the potential for these new systems to improve student outcomes while reducing "LEA red tape." ED believes that the proposed grants could help increase participation by providing resources to LEAs to develop procedures to charge schools based on actual (as opposed to average) personnel expenditures and could reduce the potential negative effects on some individual schools of transitioning to a weighted student funding system under Title I-E. The grants would only be available to LEAs that have already been approved for an agreement. ED estimates that up to 10 LEAs could be supported through the grants and suggests that it could give "special consideration" to LEAs with the highest concentration of poverty. The funds could be used by participating LEAs for activities related to implementing weighted student funding systems. According to ED, this could include using funds to make temporary payments to individual schools to offset reductions in funding resulting from the transition to the system, allowing a "smooth transition to these new systems." Grant funds could also be used by ED to provide technical assistance to LEAs in developing and preparing for the implementation of weighted student funding systems that meet the requirements of Section 1501. In its proposal, ED also mentions that it may consider using existing authority to extend the initial local flexibility demonstration agreement period from three years to six years to help increase LEA participation. Regardless of whether Congress acts on ED's proposal to provide Student-Centered Funding Incentive Grants, LEAs that enter into an agreement are currently permitted to use administrative funds consolidated under Section 8203 to support the implementation of their weighted student funding system. Possible Interactions Between Title I-E Authority and Other ESEAÂ Programs This section discusses some of the ways in which the Title I-E authority might interact with other ESEA programs. As Title I-A is the only ESEA program that includes specific requirements for the allocation of funds to schools within LEAs, it is the primary focus of the discussion. ESEA Programs to Which Title I-E Provisions Apply Under Title I-E, participating LEAs may consolidate and allocate eligible federal funds to public schools through their weighted student funding formulas. Table 1 details the amount of funding appropriated under each eligible federal program for FY2019. The majority of the funding available for consolidation and allocation under the Title I-E authority is provided through formula grants. These grants are either provided directly to LEAs or, in most cases, to LEAs via the state. Most of the attention regarding the possible impact of the weighted student funding authority has been focused on the ESEA Title I-A program. In addition to constituting about 76% of the total FY2019 appropriations for all programs potentially affected by the Title I-E authority ( Table 1 ), it is the only one of the potentially affected federal programs under which most funds are allocated to individual schools under statutory school allocation policies, and therefore the only program where current policies for the allocation of funds to schools can be compared to how funds might be allocated to schools under the weighted student funding authority. The other potentially affected federal programs are either much less focused on individual schools (as opposed to being centrally managed by LEAs), are much less widespread in their distribution of funds among LEAs, and/or are focused largely on SEAs rather than LEAs or schools. Thus, in most cases, ESEA Title I-A funds are likely to be the primary federal program funds directly affected by the ESEA Title I-E authority in most participating LEAs. It is possible, however, depending on which eligible federal funds and the percentage of such funds an LEA decides to include in its weighting student funding system, that the distribution of funds under other ESEA programs that have funds eligible for consolidation could change substantially. Current Policies for Allocating Title I-A Funds to Schools Within LEAs As is explained below, the allocation of Title I-A funds within LEAs is focused on providing grants to schools with comparatively high concentrations of students from low-income families, not individual students. Thus, the authority under ESEA Title I-E to combine Title I-A funds with state and local funds under weighted student funding formulas and to have the Title I-A funds follow students to any public school in the LEA, not just those with concentrations of students from low-income families, is a significant shift from the way the program is generally implemented. Under almost all federal education assistance programs, grants are made to states or to LEAs (or subgranted to LEAs by SEAs) with services or resources provided in a manner that is managed by the SEA or LEA. In sharp contrast to this general pattern, most ESEA Title I-A funds are allocated to individual schools, under statutory allocation provisions, although LEAs retain substantial discretion to control the use of a share of Title I-A grants at a central district level. While there are several rules related to school selection, LEAs must generally rank public schools by their percentage of pupils from low-income families, and serve them in rank order. LEAs may choose to consider only schools serving selected grade levels (e.g., only elementary schools or only middle schools) in determining eligibility for grants, so long as all public schools where more than 75% of the pupils from low-income families receive grants (if sufficient funds are available to serve all such schools). LEAs also have the option of serving all high schools where more than 50% of the pupils are from low-income families before choosing to serve schools at selected grade levels. All participating schools must generally have a percentage of children from low-income families that is higher than the LEA's average, or 35%, whichever of these two figures is lower. The percentage of students from low-income families for each public school is usually measured directly, although LEAs may choose to measure it indirectly for middle or high schools based on the measured percentages for the elementary or middle schools that students attended previously (sometimes called "feeder schools"). LEAs have the option of setting school eligibility thresholds higher than the minimum in order to concentrate available funds on a smaller number of schools, and this is especially the practice in some large urban LEAs. For example, according to data available from ED, in the 2015-16 school year all public schools reported as participating in Title I-A in Chicago had a free and reduced-price lunch child percentage of 55% or higher, whereas the minimum eligibility threshold would generally be 35%. In almost all cases, the data used to determine which pupils are from low-income families for the distribution of Title I-A funds to schools are not the same as those used to estimate the number of school-age children in low-income families for purposes of calculating Title I-A allocations to states and LEAs. This is because Census or other data are generally not available on the number of school-age children enrolled in a school, or living in a residential school attendance zone, with income below the standard federal poverty threshold. Thus, LEAs must use available proxies for low-income status. The Title I-A statute allows LEAs to use the following low-income measures for school selection and allocations: (1) eligibility for free and reduced-price school lunches under the federal child nutrition programs, (2) eligibility for Temporary Assistance for Needy Families (TANF), (3) eligibility for Medicaid, or (4) Census poverty estimates (in the rare instances where such estimates may be available for individual schools or school attendance areas). According to the most recent relevant data, approximately 90% of LEAs receiving Title I-A funds use free/reduced-price school lunch (FRPL) dataâsometimes alone, sometimes in combination with other authorized criteriaâto select Title I-A schools and allocate funds among them. The income eligibility thresholds for free and reduced-price lunchesâ130% of the poverty income threshold for free lunches, and 185% of poverty for reduced-price lunchesâare higher than the poverty levels used in the Title I-A allocation formulas to states and LEAs. For example, for a family of four people during the 2018-2019 school year, the income threshold for eligibility was $32,630 for free lunches and $46,435 for reduced price lunches. By contrast, the poverty threshold for a family of four people in 2018 was $25,100. While Title I-A funds are to be focused on the schools within a recipient LEA with percentages of students from low-income families that are relatively high in the context of their locality, many Title I-A schools do not have high percentages of low-income students when considered from a national perspective. Largely because of the relatively low poverty rate thresholds for LEA eligibility to receive Title I-A grants, many low-poverty LEAs receive Title I-A funds, and often the highest-poverty schools in those LEAs do not have high percentages of students from low-income families compared to the nation as a whole. For example, according to ED, 23% of the nation's public schools that are in the lowest quartile nationwide in terms of their percentage of students from low-income families (35% or below) receive Title I-A grants. Title I-A funds are allocated among participating schools in proportion to their number of pupils from low-income families, although grants to eligible schools per pupil from a low-income family need not be equal for all schools. LEAs may choose to provide higher grants per child from a low-income family to schools with higher percentages of such pupils. A Title I-A school at which 40% or more of the students are from low-income families may provide Title I-A services via a schoolwide program, under which all of the students at the school may be served. This is in contrast to the other mode of providing Title I-A servicesâvia targeted assistance schoolsâwherein Title I-A may be used only for services directed to the lowest-achieving students at the schools. The share of funds to be used by each Title I-A LEA to serve educationally disadvantaged pupils attending private schools is determined on the basis of the number of private school students from low-income families living in the residential areas served by public schools selected to receive Title I-A grants. In making this determination, LEAs may use either the same source of data used to select and allocate funds among public schools (i.e., usually FRPL data) or one of a specified range of alternatives. As noted earlier, the allocation of Title I-A funds within LEAs is focused on providing grants to schools with comparatively high concentrations of students from low-income families, not individual students. One rationale for the strategy of concentrating Title I-A funds on relatively high poverty schools is that the level of funding for each participating student is relatively low and can finance a substantial level of services only if combined with Title I-A funding for numerous eligible students in a school. Title I-A funding per student is usually discussed in terms of grant amounts per student served under the program. Especially with the growth of schoolwide programs in recent years, the amount of funding per student deemed to be participating in the program (which includes all students in schoolwide program sites) would be estimated at $645. Even this amount, which is based on dividing the total FY2019 Title I-A appropriation ($15,859,802,000) by the latest published estimate of the number of students participating in Title I-A programs (24.6 million), would be an overestimate, as it does not take into account the share of Title I-A funds that do not reach individual schools because they are used at the state or LEA level for activities such as administration, school improvement, and districtwide programs (e.g., professional development for Title I-A teachers). However, under weighted student funding the more relevant figure would be the level of funding per student from a low-income family. If the standard of low-income most often applied in the current Title I-A school allocation process were used, the number of public school students from low-income families would be slightly higher (25.8 million) and the national average Title I-A grant per pupil from a low-income family would be $614. For the reasons just discussed (i.e., not accounting for funds retained at the state or LEA level), this would also be an overestimate of the amount of funding per student. Other ESEA Programs Potentially Affected by the Title I-E Authority Beyond the primary focus on the ESEA Title I-A program, it is possible that LEAs participating in the weighted student funding authority would include funds from at least some of the other potentially affected programs. For example, the one currently approved applicant for the ESEA Title I-E authority, Puerto Rico, plans to allocate 53% of its Title I-A funds plus 55% of its Title II-A and 92% of its Title III-A funds to schools through its weighted student funding formula. Thus, in participating LEAs, at least some federal programs that are currently centrally managed by LEAs may be decentralized and managed, at least in part, by individual schools. The extent to which this occurs may depend on the percentage of funds of an eligible federal program that are allocated through the LEA's weighted student funding formula as opposed to being retained at the state or LEA level. Possible Issues Regarding the Weighted Student Funding Authority Available Under Title I-E The last section of the report examines issues related to the Title I-E flexibility authority. The first set of issues examines possible reasons why participation by LEAs in the Title I-E authority has been low and some potential issues related to it. It then considers why LEAs might want to participate in the Title I-E authority based on reasons stated by ED. This is followed by an examination of possible issues that may arise if participation in the Title I-E authority increases. This includes consideration of how the allocation of eligible federal funds, particularly Title I-A funds, could be different if the Title I-E flexibility was adopted more broadly, as well as LEA access to other fund consolidation authority, whether the use of the Title I-E authority could increase the extent to which federal programs are focused on individual schools, whether the Title I-E authority could represent a model for a major change in the distribution of ESEA funds, and whether adequate safeguards exist to ensure that the purposes of federal education programs whose funds are consolidated are met. Why have relatively few LEAs applied for the Title I-E flexibility authority thus far? As of July 2019, six LEAs have applied for the weighted student funding authority under Title I-E, and one has been approved. The single approved LEA, Puerto Rico, intends to implement the authority beginning in the 2019-2020 school year. One reason for the low rate of participation could be the relatively slow implementation by ED. The authority was provided under the ESSA's amendments to the ESEA, enacted on December 10, 2015. However, ED's initial announcement that the flexibility authority was available was made more than two years later, on February 2, 2018. LEA interest, to the extent that it existed, may have waned over this time period. Another possible constraint on LEA interest in applying for the Title I-E authority is that the authority is applicable for only a three-year period. While potentially renewable, and while such a time limitation may be typical and appropriate for a pilot authority, LEAs may be hesitant to make major changes to, or new investments in, their school finance system or administration of Title I-A and other federal programs for such a limited time period. While it is not a requirement that an LEA already be implementing a weighted student funding system in order to participate in Title I-E, the number of LEAs that have already adopted weighted student funding for their state and local funds, and would therefore be interested in expanding those systems to include a number of federal programs, may be limited. There is no definitive, comprehensive listing of LEAs currently using weighted student funding formulas. While a number of relatively large urban LEAs are doing so, the total number of such LEAs may still be rather small, limiting the number of likely and eligible applicants for the federal weighted student funding authority. Potential applicants may be deterred by the limitations to the federal weighted student funding authority. While state- and LEA-level weighted student funding formulas often include state and local funding for students with disabilities and career and technical education programs, the Title I-E authority does not apply to funds under IDEA or the Perkins CTE Act. While it might seem most appropriate for an ESEA flexibility provision to apply only to ESEA programs, and while the IDEA and the Perkins CTE Act involve somewhat different constituencies and interest groups than the ESEA, the Title I-E flexibility authority might be more consistent with many state and local weighted student funding policies, and offer enhanced flexibility to participating LEAs, if it included at least some of the IDEA and Perkins CTE Act funding streams. In addition, as discussed below, schools operating schoolwide programs under Title I-A are already permitted to consolidate federal funds provided through non-ESEA programs (e.g., IDEA and Perkins CTE Act funds) with their state and local funds. It is also possible that LEAs have been deterred by the Title I-E requirement that weighted student funding systems must use actual personnel expenditures, including staff salary differentials for years of employment, in their systems. Based on the preliminary results of an ongoing study on the use of weighted student funding systems in LEAs, most of the LEAs in the study have continued to use average staff salaries, rather than actual personnel expenditures, in their weighted student funding systems. In addition, while many requirements under ESEA Title I-A and other ESEA programs are waived in LEAs receiving the weighted student funding flexibility authority, a number of others (e.g., those involving fiscal and academic outcome accountability) remain in effect. This may cause potential-applicant LEAs to determine that the possible reduction in administrative burdens (e.g., from having to track the use of some federal funds, or to allocate them among schools as they have in the past) is not sufficient for them to be motivated to apply. Could there be changes in individual public school funding levels within LEAs as a result of an LEA entering into a local flexibility demonstration agreement? If an LEA enters into a local flexibility demonstration agreement, the resulting distribution of state, local, and eligible federal funds under a weighted student funding system that meets the Title I-E requirements could lead to funds shifting among public schools in the LEA. While this may result in public schools serving low-income students, ELs, and other disadvantaged students receiving an increase in funding, it is possible that other public schools may lose funds, possibly a substantial amount or percentage of their current funding. Decreases in funding levels in the course of one school year could potentially be difficult for an individual school to absorb. Without state, local, or federal funds to help ease the transition to a weighted funding system, it is possible that some LEAs may be hesitant to apply to enter into an agreement. Under current law, the Title I-E authority for the Secretary does not include any federal funds to implement local flexibility demonstration agreements or offset the loss of funds in public schools as LEAs implement weighted student funding systems under an agreement. In its budget requests, ED has proposed providing grants to LEAs implementing a local flexibility demonstration agreement for these purposes (see previous discussion of FY2018, FY2019, and FY2020 budget requests), but no such funds have yet been appropriated. What might happen with respect to expansion of the local flexibility demonstration agreements beyond the original limit of 50 LEAs? The delay in implementation of the Title I-E authority by the Secretary complicates the schedule envisioned in the Title I-E legislation regarding expansion of eligibility for weighted student funding flexibility to potentially all LEAs. Eligibility for the weighted student funding authority was limited to no more than 50 LEAs for school years preceding 2019-2020. But the statute provides that eligibility may be expanded to any LEA beginning with the 2019-2020 school year, as long as a "substantial majority" of the LEAs participating in previous years have met program requirements. However, no LEA will actually begin implementing the Title I-E flexibility authority until the 2019-2020 school year. Thus, a key requirement for program expansion cannot be met. It is unclear how this would be resolved moving forward should additional LEAs express interest in applying for the Title I-E authority. What goals or purposes might be served by the use of the weighted student funding authority in participating LEAs? Given the relatively low level of LEA interest in the flexibility offered by Title I-E, there are questions about why an LEA would want to enter into a local flexibility demonstration agreement. In a document titled "Why should your school district apply for the Student-centered Funding pilot?," ED outlined several opportunities that, in its opinion, would be advanced for LEAs that implement the ESEA Title I-E authority. ED states that participating LEAs would have greater flexibility in the use of the affected federal education program funds, because those federal funds could be used in the same manner as state and local funds, with no specifically required or prohibited uses. LEAs would be able to set their own priorities for these funds. ED further states that participating LEAs would experience reduced administrative burdens, because federal funds under the affected programs would not have to be tracked separately. By combining state, local, and federal funds, participating LEAs could prioritize funding for groups of students with particular needs by developing or expanding a weighted student funding system. ED also notes that participating in the Title I-E authority would enhance transparency in the allocation of resources within LEAs and facilitate the involvement of school-level leaders in resource allocation. In addition, advocates of weighted student funding policies in general often argue that they enhance options for student mobility and choice among public schools in an LEA, support school-based management practices, and may increase the targeting of total (local, state and federal) funds on schools attended by disadvantaged students. The ED document specifically compares the weighted student funding authority to the schoolwide program authority provided under ESEA Title I-A. The document states that the weighted student funding authority is more expansive than the schoolwide program authority, as it would be available to all public schools within the LEA. (For more information about differences between the Title I-E authority and schoolwide program authority to consolidate federal funds, see the next "issue" discussion.) These views of ED and of advocates of weighted student funding may be countered by other views of, or concerns about, the weighted student funding authority, as discussed elsewhere in the "Issues" section of this report. How does the authority granted under Title I-E differ from authority for Title I-A schools operating schoolwide programs to consolidate federal funds with state and local funds? Title I-A schools that are operating schoolwide programs already have the authority to consolidate their federal, state, and local funds without having to create a weighted student funding system. However, there are several differences between the funding consolidation authority available to Title I-A schools operating schoolwide programs under Section 1114 and the funding consolidation authority available under Title I-E. The authority to consolidate funds under schoolwide programs is only available to Title I-A schools operating those programs (as opposed to operating targeted assistance programs). Schools operating schoolwide programs have the choice of whether to consolidate their federal, state, and local funds or not. Under the Title I-E authority, all public schools in an LEA that has entered into a local flexibility demonstration agreement would be required to consolidate state, local, and eligible federal funds. An individual public school would not have a choice about participating in the weighted student funding system. Schools operating schoolwide programs must conduct a comprehensive needs assessment, develop a comprehensive schoolwide plan, annually review the schoolwide plan, and revise the plan as necessary based on student needs. Schools located in an LEA participating in Title I-E are not required to conduct a comprehensive needs assessment or develop and maintain a comprehensive plan. For any funds consolidated by a school or an LEA, respectively, under either a schoolwide program or a local flexibility demonstration agreement, the school or LEA must ensure that it meets the intent and purposes of each federal program whose funds were consolidated. While federal programs eligible for consolidation under the Title I-E authority are limited to selected ESEA programs, schools operating schoolwide programs have the flexibility to consolidate funds from ESEA programs as well as non-ESEA programs, such as the IDEA and Perkins Act, provided certain requirements are met. Federal funds consolidated under either a schoolwide program or the Title I-E authority are subject to supplement, not supplant requirements. Could implementation of the weighted student funding authority result in less targeting of Title I-A funds on high-poverty schools? Title I-A is the only one of the potentially affected federal programs that currently has school-level allocation requirements. It currently is primarily a "school-based" program, with funds targeted on the specific schools in each LEA with relatively high concentrations of students from low-income families. In sharp contrast, under the Title I-E flexibility authority Title I-A funds in a participating LEA would be provided to any public school in the LEA that enrolls even one student from a low-income family. While it is not possible precisely to compare the current allocation of Title I-A funds to schools to how they might be allocated under the weighted student funding authority, there would be a distinct contrast in general strategy between the two sets of allocation policies. The Title I-A program structure is based implicitly on the assumption, and the findings of past studies, that the relationship between poverty and low achievement is not especially strong for individual pupils, but the correlation between concentrations of poverty and concentrations of low-achieving pupils is quite high. According to proponents of the current structure of Title I-A, this implies that limited Title I-A funds should be concentrated on the highest-poverty schools if they are to address the greatest pupil needs. In addition, the level of Title I-A funding per pupil (a maximum of an estimated $645 per pupil served or $614 per pupil from a low-income family, as discussed above) might be sufficient to pay the costs of substantial supplementary educational services only if combined for relatively large numbers of students in a school. Under the Title I-E flexibility authority, while funds would be allocated among these schools in proportion to their number of students from low-income families, the overall distribution of Title I-A funds would almost undoubtedly be more dispersed among more public schools than under current policies. Concerns regarding economies of scale would argue against the dispersal of Title I-A grants among potentially all schools in a locality. As noted, it is possible that the current level of aid per student can provide a significant amount of resources or services only if combined for a substantial number of pupils in a school. While this would not be a concern at public schools that numerous pupils from low-income families choose to attend, it would be an issue at schools that only a few such children choose to attend. However, this concern might be countered by the fact that under a weighted student funding process, not only Title I-A funds but also state and local funds and potentially other eligible federal program funds would be combined and allocated under a formula giving additional weight to students from low-income families. It is also specifically required that the high-poverty schools in a participating LEA receive in the first year of implementation more total funding per pupil from a low-income family (and at least as much per EL) as in the year preceding initial implementation of the flexibility authority, and at least as much in succeeding years. Thus, while Title I-A funds alone would likely be substantially more widely dispersed among schools than they currently are, it is possible that total federal, state, and local funding to relatively high-poverty schools would increase, especially in LEAs that had not previously adopted weighted student funding policies with respect to their state and local funds. Would the Title I-E flexibility authority increase the extent to which federal programs other than Title I-A are focused on individual schools? It is possible that as a result of the Title I-E flexibility, some eligible federal programs may become more focused on the use of funds at the school level as opposed to the state or LEA level. There is currently limited data on how funds under eligible federal programs are distributed to the school level, if at all. It may be helpful from a data analysis perspective to have comprehensive data on the specific federal education funds provided to each public school to examine whether switching to a weighted student funding system that meets the requirements of Title I-E alters this distribution of funds. Under the ESEA as amended by the ESSA, Title I-A requires participating states to include in school report cards data on expenditures at each public school. The state report card must provide data on LEA- and school-level per-pupil expenditures of federal, state, and local funds, including actual personnel expenditures and actual nonpersonnel expenditures, disaggregated by the source of funds. The data must be reported for every LEA and public school in the state. These data have not been reported for LEAs and public schools in the past. Based on draft guidance issued by ED, SEAs and LEAs may delay reporting per-pupil expenditures until they issue report cards for the 2018-2019 school year. However, if an LEA decides to delay the reporting of per-pupil expenditures, the SEA and its LEAs are required to provide information on their report cards for the 2017-2018 school year about the steps they are taking to provide such information on the 2018-2019 school year report card. While this new reporting requirement does not require schools to disaggregate the receipt of funds under Title I-E eligible federal programs, it will, for the first time, detail the per-pupil expenditure of aggregate federal funds that are allocated or used at the school level. If LEAs participating in the Title I-E authority include Title I-A funds in their agreement, it may be possible to get a sense of whether the allocation of federal funds at individual schools is changing under weighted student funding systems that meet the requirements of Title I-E. Might the weighted student funding authority represent a model for a major change in strategy for Title I-A and other potentially affected ESEA programs? In participating LEAs that include Title I-A funds in their weighted student funding systems, Title I-A would be transformed from a "school-based" program to an "individualized grant." The Title I-E flexibility authority arguably represents a substantial change in the basic strategy of Title I-A, and to a lesser extent other potentially affected federal education programs. As discussed earlier, from its beginning in 1965 Title I-A has been primarily a school-based program. Funds are to be allocated only to the relatively high-poverty schools in each participating LEA. Within those recipient schools, Title I-A funds are to be used only to serve the lowest-achieving students unless the school meets the 40% low-income threshold, in which case they can be used to serve all students. The level of Title I-A funding per student served is relatively modest, and it is implicitly assumed that such amounts are sufficient to provide substantial services only if combined for relatively large numbers of students from low-income families in a school. Further, there are a number of requirements regarding the authorized uses of Title I-A funds to meet the special educational needs of educationally disadvantaged students in participating schools. The weighted student funding pilot represents a very different approach. First, while academic outcome accountability and civil rights requirements will continue to apply to all public schools in states receiving Title I-A funds, and fiscal accountability requirements will continue to apply to certain "high-poverty" schools within LEAs, other requirements for targeting schools or uses of funds will be waived. Administrative burdens would be reduced, but so would a number of potentially important requirements for targeting services on students with the greatest educational needs. Title I-A and other federal program funds would be combined with state and local funds into weighted grant amounts that would be dispersed among all public schools in the LEA, and that would follow students if they transfer among schools in the LEA (though possibly with a time lag). This is a very different approach from traditional Title I-A programs. The "individualized grant" approach embodied in the Title I-E authority might serve as a model that could, in the future, be expanded if desired through congressional action to include students attending public schools in other LEAs of the same state, or possibly even eligible students enrolled in private schools. Do the provisions of Title I-E provide adequate assurance that the purposes of the eligible ESEA programs will be met by participating LEAs? The Title I-E flexibility authority provides for the waiver of a wide range of requirements regarding the allocation of Title I-A funds to schools, and regarding the authorized uses of funds under all of the eligible federal programs. However, participating LEAs must ensure that the purposes of the eligible federal programs included in their weighted student funding systems are met. This may be challenging for participating LEAs, at least initially, as more federal funding from non-Title I-A programs is provided to the school level as opposed to being retained and controlled at the LEA level and as Title I-A funds are potentially used for the first time in schools that had not previously received the funds. Appendix. Glossary of Acronyms CTE: Career and Technical Education ED: U.S. Department of Education EFIG: Education Finance Incentive Grant EL: English Learner ESEA: Elementary and Secondary Education Act ESSA: Every Student Succeeds Act ( P.L. 114-95 ) IDEA: Individuals with Disabilities Education Act LEA: Local educational agency OEG: Open Enrollment Grant SEA: State educational agency SSAE: Student Support and Academic Enrichment grants TANF: Temporary Assistance for Needy Families	Summary:	gov_report	1,024	null	52
crs_R45820	crs_R45820_0	You are given a report by a government agency. Write a one-page summary of the report. Report: About the U.S. Department of Health and Human Services (HHS) The mission of HHS is to "enhance the health and well-being of Americans by providing for effective health and human services and by fostering sound, sustained advances in the sciences underlying medicine, public health, and social services." HHS is currently organized into 11 main agencies, called "operating divisions" (listed below), which are responsible for administering a wide variety of health and human services programs, and conducting related research. In addition, HHS has a number of "staff divisions" within the Office of the Secretary (OS). These staff divisions fulfill a broad array of management, research, oversight, and emergency preparedness functions in support of the entire department. HHS Operating Divisions Eight of the HHS operating divisions are part of the U.S. Public Health Service (PHS). PHS agencies have diverse missions in support of public health, including the provision of health care services and supports (e.g., IHS, HRSA, SAMHSA); the advancement of health care quality and medical research (e.g., AHRQ, NIH); the prevention and control of disease, injury, and environmental health hazards (e.g., CDC, ATSDR); and the regulation of food and drugs (e.g., FDA). The three remaining HHS operating divisionsâACF, ACL, and CMSâare not PHS agencies. ACF and ACL largely administer human services programs focused on the well-being of vulnerable children, families, older Americans, and individuals with disabilities. CMSâwhich accounts for the largest share of the HHS budget by farâis responsible for administering Medicare, Medicaid, and the State Children's Health Insurance Program (CHIP), in addition to some aspects of the private health insuranceÂ market. (For a summary of each operating division's mission and links to agency resources related to the FY2020 budget request, see the Appendix .) Context for the FY2020 President's Budget Request The initial President's budget request for FY2020 was submitted to Congress on March 11, 2019, about five weeks after the statutory deadline. (Additional components of the FY2020 request were released in subsequent weeks.) The delay in the budget submission was attributable, in part, to protracted negotiations over seven of the FY2019 annual appropriations acts, which resulted in a five-week partial government shutdown. (Five of the 12 annual appropriations acts had already received full-year appropriations for FY2019 when the shutdown commenced.) At HHS, the FY2019 shutdown primarily affected FDA, IHS, and ATSDR. The remaining HHS operating and staff divisions generally had already received full-year FY2019 funding prior to the start of the fiscal year (Division B of P.L. 115-245 ). Full-year appropriations for FDA, IHS, and ATSDR were ultimately enacted on February 15, 2019, almost five months after the start of the fiscal year ( P.L. 116-6 ). In light of this delay, the source of the FY2019 numbers contained in the FY2020 President's budget materials varies by HHS agency. In the case of FDA, IHS, and ATSDR, amounts shown for FY2019 were estimated based on annualized funding levels under the FY2019 continuing resolution (Division C of P.L. 115-245 , as amended), not final full-year enacted levels. By contrast, amounts shown for the remaining HHS agencies generally reflect enacted full-year appropriations provided in Division B of P.L. 115-245 . Overview of the FY2020 HHS Budget Request Under the President's budget request, HHS would spend an estimated $1.286 trillion in outlays in FY2020 (see Table 1 ). This is $56 billion (+5%) more than estimated HHS spending in FY2019 and about $166 billion (+15%) more than actual HHS spending in FY2018. Historical estimates by the Office of Management and Budget (OMB) indicate that HHS has accounted for at least 20% of all federal outlays in each year since FY1995. Most recently, OMB estimated that HHS accounted for 27% of all federal outlays in FY2018. Figure 1 displays proposed FY2020 HHS outlays by major program or spending category in the President's request. As this figure shows, mandatory spending typically accounts for the vast majority of the HHS budget. In fact, two programsâMedicare and Medicaidâare expected to account for 86% of all estimated HHS spending in FY2020. Medicare and Medicaid are "entitlement" programs, meaning the federal government is required to make mandatory payments to individuals, states, or other entities based on criteria established in authorizing law. This figure also shows that discretionary spending accounts for about 8% of estimated FY2020 HHS outlays in the President's request. Although discretionary spending represents a relatively small share of total HHS spending, the department nevertheless receives more discretionary money than most federal departments. According to OMB data, HHS accounted for 7% of all discretionary budget authority across the government in FY2018, the same as the Department of Homeland Security. The Department of Defense was the only federal agency to account for a larger share of all discretionary budget authority in that year (47%). Budgetary Resources Versus Appropriations Readers should be aware that the HHS budget includes a broader set of budgetary resources than the amounts provided to HHS through the annual appropriations process. As a result, certain amounts shown in FY2020 HHS budget materials (including amounts for prior years) will not match amounts provided to HHS by annual appropriations acts and displayed in accompanying congressional documents. There are several reasons for this: M andatory spending makes up a large portion of the HHS budget, and much of that spending is provided directly by authorizing laws, not through appropriations acts. All discretionary spending is controlled and provided through the annual appropriations process. By contrast, all mandatory spending is controlled by the program's authorizing statute. In most cases, that authorizing statute also provides the funding for the program. However, the budget authority for some mandatory programs (including Medicaid), while controlled by criteria in the authorizing statute, must still be provided through the annual appropriations process; such programs are commonly referred to as "appropriated entitlements" or "appropriated mandatories." The HHS budget request takes into account the department as a whole, while the appropriations process divides HHS funding across three different appropriations bills. Most of the discretionary funding for the department is provided through the Departments of Labor, Health and Human Services, and Education, and Related Agencies (LHHS) Appropriations Act. However, funding for certain HHS agencies and activities is appropriated in two other billsâthe Departments of the Interior, Environment, and Related Agencies Appropriations Act (INT) and the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act (AG). Table 2 lists HHS agencies by appropriations bill. The Administration may choose to follow different conventions than those of congressional scorekeepers for its estimates of HHS programs. For example, certain transfers of funding between HHS agencies (or from HHS to other federal agencies) that occurred in prior fiscal years, or are expected to occur in the current fiscal year, may be accounted for in the Administration's estimates but not necessarily in the congressional documents. HHS budget materials include two different estimates for mandatory spending programs in FY2019 when appropriate: proposed law and current law . Proposed law estimates take into account changes in mandatory spending proposed in the FY2020 HHS budget request. Such proposals would need to be enacted into law to affect the budgetary resources ultimately available to the mandatory spending program. HHS materials may also show a current law or current services estimate for mandatory spending programs. These estimates assume that no changes will be made to existing policies, and instead estimate mandatory spending for programs based on criteria established in current authorizing law. The HHS budget estimates in this report reflect the proposed law estimates for mandatory spending programs, but readers should be aware that other HHS, OMB, or congressional estimates might reflect current law instead. In some cases, agencies within HHS have the authority to expend user fees and other types of collections that effectively supplement their appropriations. In addition, agencies may receive transfers of budgetary resources from other sources, such as from the Public Health Service Evaluation Set-Aside (also referred to as the PHS Tap) or one of the mandatory funds established by the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended). Budgetary totals that account for these sorts of resources in the Administration estimates are referred to as being at the "program level." HHS agencies that have historically had notable differences between the amounts in the appropriations bills and their program level include FDA (due to user fees) and AHRQ (due to transfers). The program level for each agency is listed in the table entitled "Composition of the HHS Budget Discretionary Programs" in the HHS FY2020 Budget in Brief. HHS Budget by Operating Division Figure 2 provides a breakdown of the FY2020 HHS budget request by operating division. When taking into account both mandatory and discretionary budget authority (i.e., total budget authority shown in Figure 2 ), CMS accounts for the largest share of the request (nearly $1.17 trillion). The majority of the CMS budget request would go toward mandatory spending programs, such as Medicare and Medicaid. When looking exclusively at discretionary budget authority, funding for CMS is comparatively smaller, accounting for just $3.6 billion of the HHS discretionary request. The largest share of the discretionary request would go to the PHS agencies (roughly $59.4 billion in combined funding for FDA, HRSA, IHS, CDC, ATSDR, NIH, and SAMHSA; no funds would go to AHRQ under the request ). NIH would receive the largest amount ($33.5 billion) of discretionary budget authority of any HHS operating division, and ACF would receive the second-largest amount ($18.3 billion). Table 3 puts the FY2020 request for each HHS operating division and the Office of the Secretary into context, displaying it along with estimates of funding provided over the three prior fiscal years (FY2017-FY2019). These totals are inclusive of both mandatory and discretionary funding. The amounts in this table are shown in terms of budget authority (BA) and outlays. BA is the authority provided by federal law to enter into contracts or other financial obligations that will result in immediate or future expenditures involving federal government funds. Outlays occur when funds are actually expended from the Treasury; they could be the result of either new budget authority enacted in the current fiscal year or unexpended budget authority that was enacted in previous fiscal years. As a consequence, the BA and outlays in this table represent two different ways of accounting for the funding that is provided to each HHS agency through the federal budget process. For example, Table 3 shows $0 in FY2020 BA for AHRQ because the President's budget proposes to eliminate this agency; however, the table shows an estimated $299 million in FY2020 AHRQ outlays, reflecting the expected expenditure of funds previously provided to the agency. Appendix. HHS Operating Divisions: Missions and FY2020 Budget Resources This appendix provides for each operating division a brief summary of its mission, the applicable appropriations bill, the FY2020 budget request level, and links to additional resources related to that request. Food and Drug Administration (FDA) The FDA mission is focused on regulating the safety, efficacy, and security of human foods, dietary supplements, cosmetics, and animal foods; and the safety and effectiveness of human drugs, biological products (e.g., vaccines), medical devices, radiation-emitting products, and animal drugs. It also regulates the manufacture, marketing, and sale of tobacco products. Relevant Appropriations Bill: AG FY2020 Request: BA: $3.329 billion Outlays: $2.837 billion Additional Resources Related to the FY2020 Request: Congressional Justification (all-purpose table on p. 15), https://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Reports/BudgetReports/UCM633738.pdf . BIB chapter (p. 21), https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=25 . Health Resources and Services Administration (HRSA) The HRSA mission is focused on "improving health care to people who are geographically isolated, economically or medically vulnerable." Among its many programs and activities, HRSA supports health care workforce training; the National Health Service Corps; and the federal health centers program, which provides grants to nonprofit entities that provide primary care services to people who experience financial, geographic, cultural, or other barriers to health care. Relevant Appropriations Bill: LHHS FY2020 Request: BA: $11.004 billion Outlays: $11.864 billion Additional Resources Related to the FY2020 Request: Congressional Justification (all-purpose table on p. 16), https://www.hrsa.gov/sites/default/files/hrsa/about/budget/budget-justification-fy2020.pdf . BIB chapter (p. 29), https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=33 . Indian Health Service (IHS) The IHS mission is to provide "a comprehensive health service delivery system for American Indians and Alaska Natives" and "raise the physical, mental, social, and spiritual health of American Indians and Alaska Natives to the highest level." IHS provides health care for approximately 2.2 million eligible American Indians and Alaska Natives through a system of programs and facilities located on or near Indian reservations, and through contractors in certain urban areas. Relevant Appropriations Bill: INT FY2020 Request: BA: $6.104 billion Outlays: $5.970 billion Additional Resources Related to the FY2020 Request: Congressional Justification (all-purpose table on p. 7), https://www.ihs.gov/sites/budgetformulation/themes/responsive2017/display_objects/documents/FY2020CongressionalJustification.pdf BIB chapter (p. 36), https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=40 . Centers for Disease Control and Prevention (CDC) and Agency for Toxic Substances and Disease Registry (ATSDR) The CDC mission is focused on "disease prevention and control, environmental health, and health promotion and health education." CDC is organized into a number of centers, institutes, and offices, some focused on specific public health challenges (e.g., injury prevention) and others focused on general public health capabilities (e.g., surveillance and laboratory services). In addition, the Agency for Toxic Substances and Disease Registry (ATSDR) is headed by the CDC director. For that reason, the ATSDR budget is often shown within CDC. Following the conventions of the FY2020 HHS BIB, ATSDR's budget request is included in the CDC totals shown in this report. ATSDR's work is focused on preventing or mitigating adverse effects resulting from exposure to hazardous substances in the environment. Relevant Appropriations Bills: LHHS (CDC) INT (ATSDR) FY2020 Request (CDC and ATSDR combined): BA: $6.767 billion Outlays: $7.877 billion Additional Resources Related to the FY2020 Request: CDC Congressional Justification (all-purpose table on p. 23), https://www.cdc.gov/budget/documents/fy2020/fy-2020-cdc-congressional-justification.pdf . ATSDR Congressional Justification, https://www.cdc.gov/budget/documents/fy2020/fy-2020-atsdr.pdf . BIB chapter (p. 43), https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=47 . National Institutes of Health (NIH) The NIH mission is focused on conducting and supporting research "in causes, diagnosis, prevention, and cure of human diseases" and "in directing programs for the collection, dissemination, and exchange of information in medicine and health." NIH is organized into 27 research institutes and centers, headed by the NIH Director. (The FY2020 President's budget assumes that AHRQ's functions will be consolidated within NIH, in the new National Institute for Research on Safety and Quality (NIRSQ). This assumption is reflected in the figures below. ) Relevant Appropriations Bill: LHHS FY2020 Request: BA: $33.669 billion Outlays: $36.652 billion Additional Resources Related to the FY2020 Request: Congressional Justification (all-purpose table on p. 18), available at https://officeofbudget.od.nih.gov/pdfs/FY20/br/Overview-Volume-FY-2020-CJ.pdf . BIB chapter (p. 52), available at https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=56 . Substance Abuse and Mental Health Services Administration (SAMHSA) The SAMHSA mission is focused on reducing the "impact of substance abuse and mental illness on America's communities." SAMHSA coordinates behavioral health surveillance to improve understanding of the impact of substance abuse and mental illness on children, individuals, and families, and the costs associated with treatment. Relevant Appropriations Bill: LHHS FY2020 Request: BA: $5.535 billion Outlays: $5.684 billion Additional Resources Related to the FY2020 Request: Congressional Justification (all-purpose table on p. 8), https://www.samhsa.gov/sites/default/files/samhsa-fy-2020-congressional-justification.pdf . BIB chapter (p. 60), https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=64 . Agency for Healthcare Research and Quality (AHRQ) The AHRQ mission is focused on research to make health care "safer, higher quality, more accessible, equitable, and affordable." Specific AHRQ research efforts are aimed at reducing the costs of care, promoting patient safety, measuring the quality of health care, and improving health care services, organization, and financing. The FY2020 President's budget proposes eliminating AHRQ and consolidating certain key AHRQ functions within NIH, in the new National Institute for Research on Safety and Quality (NIRSQ). Relevant Appropriations Bill: LHHS FY2020 Request: BA: $0 Outlays: $0.299 billion Additional Resources Related to the FY2020 Request: Congressional Justification for the proposed National Institute for Research on Safety and Quality, https://www.ahrq.gov/sites/default/files/wysiwyg/cpi/about/mission/budget/2020/FY_2020_CJ_-NIRSQ.pdf . There is no FY2020 BIB chapter for AHRQ. Centers for Medicare & Medicaid Services (CMS) The CMS mission is focused on supporting "innovative approaches to improve quality, accessibility, and affordability" of Medicare, Medicaid, the State Children's Health Insurance Program (CHIP), and private insurance, and on supporting private insurance market reform programs. The President's budget estimates that in FY2020, "over 145 million Americans will rely on the programs CMS administers including Medicare, Medicaid, the Children's Health Insurance Program (CHIP), and the [Health Insurance] Exchanges." Relevant Appropriations Bill: LHHS FY2020 Request: BA: $1,169.091 billion Outlays: $1,156.333 billion Additional Resources Related to the FY2020 Request: Congressional Justification (all-purpose table on p. 9), https://www.cms.gov/About-CMS/Agency-Information/PerformanceBudget/FY2020-CJ-Final.pdf . BIB chapter (p. 65), https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=69 . Administration for Children and Families (ACF) The ACF mission is focused on promoting the "economic and social well-being of children, youth, families, and communities." ACF administers a wide array of human services programs, including Temporary Assistance for Needy Families (TANF), Head Start, child care, the Social Services Block Grant (SSBG), and various child welfare programs. Relevant Appropriations Bill: LHHS FY2020 Request: BA: $52.121 billion Outlays: $53.208 billion Additional Resources Related to the FY2020 Request: Congressional Justification (all-purpose table on p. 6), https://www.acf.hhs.gov/sites/default/files/olab/acf_congressional_budget_justification_2020.pdf . BIB chapter (p. 122), https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=126 . Administration for Community Living (ACL) The ACL mission is focused on maximizing the "independence, well-being, and health of older adults, people with disabilities across the lifespan, and their families and caregivers." ACL administers a number of programs targeted at older Americans and the disabled, including Home and Community-Based Supportive Services and State Councils on Developmental Disabilities. Relevant Appropriations Bill: LHHS FY2020 Request: BA: $1.997 billion Outlays: $2.238 billion Additional Resources Related to the FY2020 Request: Congressional Justification (all-purpose table on p. 13), https://acl.gov/sites/default/files/about-acl/2019-04/FY2020%20ACL%20CJ%20508.pdf . BIB chapter (p. 136), https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=140 . Summary:	null	96	21,461	21,463	21,463	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: About the U.S. Department of Health and Human Services (HHS) The mission of HHS is to "enhance the health and well-being of Americans by providing for effective health and human services and by fostering sound, sustained advances in the sciences underlying medicine, public health, and social services." HHS is currently organized into 11 main agencies, called "operating divisions" (listed below), which are responsible for administering a wide variety of health and human services programs, and conducting related research. In addition, HHS has a number of "staff divisions" within the Office of the Secretary (OS). These staff divisions fulfill a broad array of management, research, oversight, and emergency preparedness functions in support of the entire department. HHS Operating Divisions Eight of the HHS operating divisions are part of the U.S. Public Health Service (PHS). PHS agencies have diverse missions in support of public health, including the provision of health care services and supports (e.g., IHS, HRSA, SAMHSA); the advancement of health care quality and medical research (e.g., AHRQ, NIH); the prevention and control of disease, injury, and environmental health hazards (e.g., CDC, ATSDR); and the regulation of food and drugs (e.g., FDA). The three remaining HHS operating divisionsâACF, ACL, and CMSâare not PHS agencies. ACF and ACL largely administer human services programs focused on the well-being of vulnerable children, families, older Americans, and individuals with disabilities. CMSâwhich accounts for the largest share of the HHS budget by farâis responsible for administering Medicare, Medicaid, and the State Children's Health Insurance Program (CHIP), in addition to some aspects of the private health insuranceÂ market. (For a summary of each operating division's mission and links to agency resources related to the FY2020 budget request, see the Appendix .) Context for the FY2020 President's Budget Request The initial President's budget request for FY2020 was submitted to Congress on March 11, 2019, about five weeks after the statutory deadline. (Additional components of the FY2020 request were released in subsequent weeks.) The delay in the budget submission was attributable, in part, to protracted negotiations over seven of the FY2019 annual appropriations acts, which resulted in a five-week partial government shutdown. (Five of the 12 annual appropriations acts had already received full-year appropriations for FY2019 when the shutdown commenced.) At HHS, the FY2019 shutdown primarily affected FDA, IHS, and ATSDR. The remaining HHS operating and staff divisions generally had already received full-year FY2019 funding prior to the start of the fiscal year (Division B of P.L. 115-245 ). Full-year appropriations for FDA, IHS, and ATSDR were ultimately enacted on February 15, 2019, almost five months after the start of the fiscal year ( P.L. 116-6 ). In light of this delay, the source of the FY2019 numbers contained in the FY2020 President's budget materials varies by HHS agency. In the case of FDA, IHS, and ATSDR, amounts shown for FY2019 were estimated based on annualized funding levels under the FY2019 continuing resolution (Division C of P.L. 115-245 , as amended), not final full-year enacted levels. By contrast, amounts shown for the remaining HHS agencies generally reflect enacted full-year appropriations provided in Division B of P.L. 115-245 . Overview of the FY2020 HHS Budget Request Under the President's budget request, HHS would spend an estimated $1.286 trillion in outlays in FY2020 (see Table 1 ). This is $56 billion (+5%) more than estimated HHS spending in FY2019 and about $166 billion (+15%) more than actual HHS spending in FY2018. Historical estimates by the Office of Management and Budget (OMB) indicate that HHS has accounted for at least 20% of all federal outlays in each year since FY1995. Most recently, OMB estimated that HHS accounted for 27% of all federal outlays in FY2018. Figure 1 displays proposed FY2020 HHS outlays by major program or spending category in the President's request. As this figure shows, mandatory spending typically accounts for the vast majority of the HHS budget. In fact, two programsâMedicare and Medicaidâare expected to account for 86% of all estimated HHS spending in FY2020. Medicare and Medicaid are "entitlement" programs, meaning the federal government is required to make mandatory payments to individuals, states, or other entities based on criteria established in authorizing law. This figure also shows that discretionary spending accounts for about 8% of estimated FY2020 HHS outlays in the President's request. Although discretionary spending represents a relatively small share of total HHS spending, the department nevertheless receives more discretionary money than most federal departments. According to OMB data, HHS accounted for 7% of all discretionary budget authority across the government in FY2018, the same as the Department of Homeland Security. The Department of Defense was the only federal agency to account for a larger share of all discretionary budget authority in that year (47%). Budgetary Resources Versus Appropriations Readers should be aware that the HHS budget includes a broader set of budgetary resources than the amounts provided to HHS through the annual appropriations process. As a result, certain amounts shown in FY2020 HHS budget materials (including amounts for prior years) will not match amounts provided to HHS by annual appropriations acts and displayed in accompanying congressional documents. There are several reasons for this: M andatory spending makes up a large portion of the HHS budget, and much of that spending is provided directly by authorizing laws, not through appropriations acts. All discretionary spending is controlled and provided through the annual appropriations process. By contrast, all mandatory spending is controlled by the program's authorizing statute. In most cases, that authorizing statute also provides the funding for the program. However, the budget authority for some mandatory programs (including Medicaid), while controlled by criteria in the authorizing statute, must still be provided through the annual appropriations process; such programs are commonly referred to as "appropriated entitlements" or "appropriated mandatories." The HHS budget request takes into account the department as a whole, while the appropriations process divides HHS funding across three different appropriations bills. Most of the discretionary funding for the department is provided through the Departments of Labor, Health and Human Services, and Education, and Related Agencies (LHHS) Appropriations Act. However, funding for certain HHS agencies and activities is appropriated in two other billsâthe Departments of the Interior, Environment, and Related Agencies Appropriations Act (INT) and the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act (AG). Table 2 lists HHS agencies by appropriations bill. The Administration may choose to follow different conventions than those of congressional scorekeepers for its estimates of HHS programs. For example, certain transfers of funding between HHS agencies (or from HHS to other federal agencies) that occurred in prior fiscal years, or are expected to occur in the current fiscal year, may be accounted for in the Administration's estimates but not necessarily in the congressional documents. HHS budget materials include two different estimates for mandatory spending programs in FY2019 when appropriate: proposed law and current law . Proposed law estimates take into account changes in mandatory spending proposed in the FY2020 HHS budget request. Such proposals would need to be enacted into law to affect the budgetary resources ultimately available to the mandatory spending program. HHS materials may also show a current law or current services estimate for mandatory spending programs. These estimates assume that no changes will be made to existing policies, and instead estimate mandatory spending for programs based on criteria established in current authorizing law. The HHS budget estimates in this report reflect the proposed law estimates for mandatory spending programs, but readers should be aware that other HHS, OMB, or congressional estimates might reflect current law instead. In some cases, agencies within HHS have the authority to expend user fees and other types of collections that effectively supplement their appropriations. In addition, agencies may receive transfers of budgetary resources from other sources, such as from the Public Health Service Evaluation Set-Aside (also referred to as the PHS Tap) or one of the mandatory funds established by the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended). Budgetary totals that account for these sorts of resources in the Administration estimates are referred to as being at the "program level." HHS agencies that have historically had notable differences between the amounts in the appropriations bills and their program level include FDA (due to user fees) and AHRQ (due to transfers). The program level for each agency is listed in the table entitled "Composition of the HHS Budget Discretionary Programs" in the HHS FY2020 Budget in Brief. HHS Budget by Operating Division Figure 2 provides a breakdown of the FY2020 HHS budget request by operating division. When taking into account both mandatory and discretionary budget authority (i.e., total budget authority shown in Figure 2 ), CMS accounts for the largest share of the request (nearly $1.17 trillion). The majority of the CMS budget request would go toward mandatory spending programs, such as Medicare and Medicaid. When looking exclusively at discretionary budget authority, funding for CMS is comparatively smaller, accounting for just $3.6 billion of the HHS discretionary request. The largest share of the discretionary request would go to the PHS agencies (roughly $59.4 billion in combined funding for FDA, HRSA, IHS, CDC, ATSDR, NIH, and SAMHSA; no funds would go to AHRQ under the request ). NIH would receive the largest amount ($33.5 billion) of discretionary budget authority of any HHS operating division, and ACF would receive the second-largest amount ($18.3 billion). Table 3 puts the FY2020 request for each HHS operating division and the Office of the Secretary into context, displaying it along with estimates of funding provided over the three prior fiscal years (FY2017-FY2019). These totals are inclusive of both mandatory and discretionary funding. The amounts in this table are shown in terms of budget authority (BA) and outlays. BA is the authority provided by federal law to enter into contracts or other financial obligations that will result in immediate or future expenditures involving federal government funds. Outlays occur when funds are actually expended from the Treasury; they could be the result of either new budget authority enacted in the current fiscal year or unexpended budget authority that was enacted in previous fiscal years. As a consequence, the BA and outlays in this table represent two different ways of accounting for the funding that is provided to each HHS agency through the federal budget process. For example, Table 3 shows $0 in FY2020 BA for AHRQ because the President's budget proposes to eliminate this agency; however, the table shows an estimated $299 million in FY2020 AHRQ outlays, reflecting the expected expenditure of funds previously provided to the agency. Appendix. HHS Operating Divisions: Missions and FY2020 Budget Resources This appendix provides for each operating division a brief summary of its mission, the applicable appropriations bill, the FY2020 budget request level, and links to additional resources related to that request. Food and Drug Administration (FDA) The FDA mission is focused on regulating the safety, efficacy, and security of human foods, dietary supplements, cosmetics, and animal foods; and the safety and effectiveness of human drugs, biological products (e.g., vaccines), medical devices, radiation-emitting products, and animal drugs. It also regulates the manufacture, marketing, and sale of tobacco products. Relevant Appropriations Bill: AG FY2020 Request: BA: $3.329 billion Outlays: $2.837 billion Additional Resources Related to the FY2020 Request: Congressional Justification (all-purpose table on p. 15), https://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Reports/BudgetReports/UCM633738.pdf . BIB chapter (p. 21), https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=25 . Health Resources and Services Administration (HRSA) The HRSA mission is focused on "improving health care to people who are geographically isolated, economically or medically vulnerable." Among its many programs and activities, HRSA supports health care workforce training; the National Health Service Corps; and the federal health centers program, which provides grants to nonprofit entities that provide primary care services to people who experience financial, geographic, cultural, or other barriers to health care. Relevant Appropriations Bill: LHHS FY2020 Request: BA: $11.004 billion Outlays: $11.864 billion Additional Resources Related to the FY2020 Request: Congressional Justification (all-purpose table on p. 16), https://www.hrsa.gov/sites/default/files/hrsa/about/budget/budget-justification-fy2020.pdf . BIB chapter (p. 29), https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=33 . Indian Health Service (IHS) The IHS mission is to provide "a comprehensive health service delivery system for American Indians and Alaska Natives" and "raise the physical, mental, social, and spiritual health of American Indians and Alaska Natives to the highest level." IHS provides health care for approximately 2.2 million eligible American Indians and Alaska Natives through a system of programs and facilities located on or near Indian reservations, and through contractors in certain urban areas. Relevant Appropriations Bill: INT FY2020 Request: BA: $6.104 billion Outlays: $5.970 billion Additional Resources Related to the FY2020 Request: Congressional Justification (all-purpose table on p. 7), https://www.ihs.gov/sites/budgetformulation/themes/responsive2017/display_objects/documents/FY2020CongressionalJustification.pdf BIB chapter (p. 36), https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=40 . Centers for Disease Control and Prevention (CDC) and Agency for Toxic Substances and Disease Registry (ATSDR) The CDC mission is focused on "disease prevention and control, environmental health, and health promotion and health education." CDC is organized into a number of centers, institutes, and offices, some focused on specific public health challenges (e.g., injury prevention) and others focused on general public health capabilities (e.g., surveillance and laboratory services). In addition, the Agency for Toxic Substances and Disease Registry (ATSDR) is headed by the CDC director. For that reason, the ATSDR budget is often shown within CDC. Following the conventions of the FY2020 HHS BIB, ATSDR's budget request is included in the CDC totals shown in this report. ATSDR's work is focused on preventing or mitigating adverse effects resulting from exposure to hazardous substances in the environment. Relevant Appropriations Bills: LHHS (CDC) INT (ATSDR) FY2020 Request (CDC and ATSDR combined): BA: $6.767 billion Outlays: $7.877 billion Additional Resources Related to the FY2020 Request: CDC Congressional Justification (all-purpose table on p. 23), https://www.cdc.gov/budget/documents/fy2020/fy-2020-cdc-congressional-justification.pdf . ATSDR Congressional Justification, https://www.cdc.gov/budget/documents/fy2020/fy-2020-atsdr.pdf . BIB chapter (p. 43), https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=47 . National Institutes of Health (NIH) The NIH mission is focused on conducting and supporting research "in causes, diagnosis, prevention, and cure of human diseases" and "in directing programs for the collection, dissemination, and exchange of information in medicine and health." NIH is organized into 27 research institutes and centers, headed by the NIH Director. (The FY2020 President's budget assumes that AHRQ's functions will be consolidated within NIH, in the new National Institute for Research on Safety and Quality (NIRSQ). This assumption is reflected in the figures below. ) Relevant Appropriations Bill: LHHS FY2020 Request: BA: $33.669 billion Outlays: $36.652 billion Additional Resources Related to the FY2020 Request: Congressional Justification (all-purpose table on p. 18), available at https://officeofbudget.od.nih.gov/pdfs/FY20/br/Overview-Volume-FY-2020-CJ.pdf . BIB chapter (p. 52), available at https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=56 . Substance Abuse and Mental Health Services Administration (SAMHSA) The SAMHSA mission is focused on reducing the "impact of substance abuse and mental illness on America's communities." SAMHSA coordinates behavioral health surveillance to improve understanding of the impact of substance abuse and mental illness on children, individuals, and families, and the costs associated with treatment. Relevant Appropriations Bill: LHHS FY2020 Request: BA: $5.535 billion Outlays: $5.684 billion Additional Resources Related to the FY2020 Request: Congressional Justification (all-purpose table on p. 8), https://www.samhsa.gov/sites/default/files/samhsa-fy-2020-congressional-justification.pdf . BIB chapter (p. 60), https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=64 . Agency for Healthcare Research and Quality (AHRQ) The AHRQ mission is focused on research to make health care "safer, higher quality, more accessible, equitable, and affordable." Specific AHRQ research efforts are aimed at reducing the costs of care, promoting patient safety, measuring the quality of health care, and improving health care services, organization, and financing. The FY2020 President's budget proposes eliminating AHRQ and consolidating certain key AHRQ functions within NIH, in the new National Institute for Research on Safety and Quality (NIRSQ). Relevant Appropriations Bill: LHHS FY2020 Request: BA: $0 Outlays: $0.299 billion Additional Resources Related to the FY2020 Request: Congressional Justification for the proposed National Institute for Research on Safety and Quality, https://www.ahrq.gov/sites/default/files/wysiwyg/cpi/about/mission/budget/2020/FY_2020_CJ_-NIRSQ.pdf . There is no FY2020 BIB chapter for AHRQ. Centers for Medicare & Medicaid Services (CMS) The CMS mission is focused on supporting "innovative approaches to improve quality, accessibility, and affordability" of Medicare, Medicaid, the State Children's Health Insurance Program (CHIP), and private insurance, and on supporting private insurance market reform programs. The President's budget estimates that in FY2020, "over 145 million Americans will rely on the programs CMS administers including Medicare, Medicaid, the Children's Health Insurance Program (CHIP), and the [Health Insurance] Exchanges." Relevant Appropriations Bill: LHHS FY2020 Request: BA: $1,169.091 billion Outlays: $1,156.333 billion Additional Resources Related to the FY2020 Request: Congressional Justification (all-purpose table on p. 9), https://www.cms.gov/About-CMS/Agency-Information/PerformanceBudget/FY2020-CJ-Final.pdf . BIB chapter (p. 65), https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=69 . Administration for Children and Families (ACF) The ACF mission is focused on promoting the "economic and social well-being of children, youth, families, and communities." ACF administers a wide array of human services programs, including Temporary Assistance for Needy Families (TANF), Head Start, child care, the Social Services Block Grant (SSBG), and various child welfare programs. Relevant Appropriations Bill: LHHS FY2020 Request: BA: $52.121 billion Outlays: $53.208 billion Additional Resources Related to the FY2020 Request: Congressional Justification (all-purpose table on p. 6), https://www.acf.hhs.gov/sites/default/files/olab/acf_congressional_budget_justification_2020.pdf . BIB chapter (p. 122), https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=126 . Administration for Community Living (ACL) The ACL mission is focused on maximizing the "independence, well-being, and health of older adults, people with disabilities across the lifespan, and their families and caregivers." ACL administers a number of programs targeted at older Americans and the disabled, including Home and Community-Based Supportive Services and State Councils on Developmental Disabilities. Relevant Appropriations Bill: LHHS FY2020 Request: BA: $1.997 billion Outlays: $2.238 billion Additional Resources Related to the FY2020 Request: Congressional Justification (all-purpose table on p. 13), https://acl.gov/sites/default/files/about-acl/2019-04/FY2020%20ACL%20CJ%20508.pdf . BIB chapter (p. 136), https://www.hhs.gov/sites/default/files/fy-2020-budget-in-brief.pdf#page=140 .	Summary:	gov_report	1,024	null	53
crs_R45977	crs_R45977_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The primary source of federal aid to elementary and secondary education is the Elementary and Secondary Education Act (ESEA)âparticularly its Title I-A program, which authorizes federal aid for the education of disadvantaged students. The ESEA was initially enacted in 1965 (P.L. 89-10) "to strengthen and improve educational quality and educational opportunities in the Nation's elementary and secondary schools." It was most recently comprehensively amended and reauthorized by the Every Student Succeeds Act (ESSA; P.L. 114-95 ), which was enacted "to ensure that every child achieves." The ESSA authorized appropriations for ESEA programs through FY2020. FY2019 appropriation for ESEA programs are $25.2 billion. Under Title I-A, the ESEA as amended by the ESSA continues to require states and public schools systems to focus on educational accountability as a condition for the receipt of grant funds. Public school systems and individual public schools are held accountable for monitoring and improving achievement outcomes for students and closing achievement gaps, sustaining a focus that was initiated by amendments to the ESEA made by the No Child Left Behind Act of 2001 (NCLB; P.L. 107-110 ) but modified under the ESSA. While states were given more latitude to develop their educational accountability systems under the ESSA provisions, as a condition for receiving Title I-A funds each state must continue to have content and academic achievement standards and aligned assessments in reading/language arts (RLA), mathematics, and science for specific grade levels. States must now have an accountability system that incorporates (1) long-term and interim performance goals for specified measures; (2) weighted indicators based, in part, on these goals; and (3) an annual system for meaningful differentiation that is used to identify schools that need additional support to improve student achievement. Beyond Title I-A, other authorized ESEA programs provide, for example, grants to support: the education of migratory students; recruitment and professional development of teachers; language instruction for English learners (ELs); well-rounded education, safe and healthy students, and technology initiatives; after-school instruction and care programs; expansion of charter schools and other forms of public school choice; education services for Native American, Native Hawaiian, and Alaska Native students; Impact Aid to compensate local educational agencies (LEAs) for taxes forgone due to certain federal activities; and innovative educational approaches or instruction to meet particular student needs. In order to receive funds under Title I-A and several other formula grant programs authorized by the ESEA, each state educational agency (SEA) must submit a state plan to the U.S. Department of Education (ED). These plans can be submitted for individual formula grant programs or, if permitted by the Secretary of Education (hereinafter referred to as the Secretary), the SEA may submit a consolidated state plan based on requirements established by the Secretary. Following the enactment of the ESSA, all SEAs submitted consolidated state plans. The Secretary has approved these plans for all 50 states, the District of Columbia, and Puerto Rico. This report provides a brief overview of major provisions of the ESEA. It is organized by title and part of the act. Annual appropriations for ESEA programs are provided through the Departments of Labor, Health and Human Services, and Education, and Related Agencies (L-HHS-ED) Appropriations Act, and are shown in this report based on the most recent data available from the U.S. Department of Education, Budget Service for FY2017 through FY2019. Table 2 provides ESEA appropriations for FY2016 and FY2017 to depict the transition from the ESEA as amended by the NCLB to the ESEA as amended by the ESSA. Table 3 provides authorizations of appropriations included in the ESEA as amended by the ESSA. The Appendix provides a list of selected acronyms used in the report. Title I: Improving the Academic Achievement of theÂ Disadvantaged The introductory text for ESEA Title I includes the purpose of Title I and authorizations of appropriations for FY2017 through FY2020 for each part of the title. The purpose of Title I is "to provide all children significant opportunity to receive a fair, equitable, and high-quality education, and to close educational achievement gaps." The introductory text prior to Title I-A also requires states to reserve funds provided under Title I-A for school improvement activities and allows them to reserve Title I-A funds for direct students services. As such, while these reservations of funds appear before Title I-A in the ESEA, they are examined following the Title I-A discussion to provide greater context. The introductory text prior to Title I-A also provides authority for states to reserve funds for state administration for Title I-A, Title I-C, and Title I-D. Administration (Section 1004) Section 1004 permits states to reserve funds under Title I-A, Title I-C, and Title I-D for administration. Under this provision, a state may reserve 1% of the amount received under parts A, C, and D, or $400,000 (whichever is greater) for state administration. Part A: Grants to Local EducationalÂ Agencies6 Title I-A authorizes federal aid to LEAs for the education of disadvantaged children. Title I-A grants provide supplementary educational and related services to low-achieving and other students attending elementary and secondary schools with relatively high concentrations of students from low-income families, as well as eligible students who live in the areas served by these public schools but attend private schools. Title I-A is also a vehicle to which a number of requirements affecting broad aspects of public elementary and secondary education for all students have been attached as conditions for receiving these grants. Calculation of Title I-A Grants Title I-A grants are calculated by ED at the LEA level. The funds are then provided to SEAs, which are required to reserve funds for school improvement activities and may reserve funds for administration and direct student services. SEAs also adjust grant amounts for LEAs for which ED is unable to determine grant amounts, such as newly created LEAs or charter schools that are their own LEAs. In calculating Title I-A grant amounts, ED determines grant amounts under four different formulasâBasic, Concentration, Targeted, and Education Finance Incentive Grants (EFIG)âalthough funds allocated under all of these formulas are combined and used for the same purposes by recipient LEAs. While the allocation formulas have several distinctive elements, the primary factor used in all four is the estimated number of children aged 5-17 in families in poverty. Other factors included in one or more formulas include a state expenditure factor based on average per pupil expenditures for public elementary and secondary education, weighting schemes designed to increase aid to LEAs with the highest concentrations of poverty, and a factor to increase grants to states with high levels of expenditure equity among their LEAs. Each formula also has an LEA hold harmless provision and a state minimum grant provision. While there are several rules related to school selection, LEAs must generally rank their public schools by their percentages of students from low-income families, and serve them in rank order. This must be done without regard to grade span for any eligible school attendance area in which the concentration of children from low-income families exceeds 75%. An LEA also has the option of serving all high schools in rank order in which the concentration of children from low-income families is 50% or greater. Below these benchmarks, an LEA can choose to serve schools in rank order at specific grade levels (e.g., only serve elementary schools in order of their percentages of children from low-income families) or continue to serve schools at all grade levels in rank order. Once schools are selected, Title I-A funds are allocated among them on the basis of their number of students from low-income families. LEAs are not required to allocate the same amount of Title I-A funds per low-income child to each school. They may provide higher grants per low-income child at schools with high rates of these children than are allocated per low-income child to schools with lower rates of these children. Types of Title I-A Programs There are two basic types of Title I-A programs. Schoolwide programs are authorized if the percentage of low-income students served by a school is 40% or higher. In schoolwide programs, Title I-A funds may be used to improve the performance of all students in a school. For example, funds might be used to provide professional development services to all of a school's teachers, upgrade instructional technology, or implement new curricula. The other basic type of Title I-A school service model is the targeted assistance program (TAP). Under TAPs, Title I-A-funded services are generally limited to the lowest-achieving students in the school. For example, students may receive additional instruction in an after-school program, or funds may be used to hire a teacher's aide who provides additional assistance to low-achieving students in their regular classroom. In general, schools have substantial latitude in how they use Title I-A funds, provided the funds are used to improve student academic achievement. Standards, Assessments, and Accountability Requirements (Section 1111) As previously mentioned, each SEA must submit a state plan to ED to receive funds under Title I-A and several other state formula grant programs authorized under the ESEA. For Title I-A purposes, the plan requires the SEA to provide information or assurances related to its standards, assessments, and accountability system. Requirements related to each of these areas are discussed below. Standards In its state plan, each SEA receiving Title I-A funds is required to provide an assurance that it has adopted challenging academic content standards and aligned academic achievement standards (hereinafter collectively referred to as academic standards) in RLA, mathematics, and science (and any other subject selected by the state). The academic standards must include at least three levels of achievement (e.g., basic, proficient, and advanced). In addition, states are required to demonstrate that these academic standards are aligned with entrance requirements for credit-bearing coursework in the state's system of public higher education and relevant state career and technical education standards. A state is permitted to adopt alternate academic achievement standards for students with the most significant cognitive disabilities provided, among other requirements, that the standards are aligned with the state's challenging academic content standards. The state is also required to demonstrate that it has adopted English language proficiency standards that are derived from the domains of speaking, listening, reading, and writing; address the different proficiency levels of English learners; and align the English language proficiency standards with the challenging state academic standards. The ESEA explicitly maintains that a state is not required to submit any of the aforementioned standards to the Secretary of Education (the Secretary) for review or approval. Also, the Secretary does not have the authority "to mandate, direct, control, coerce, or exercise any direction or supervision over any of the challenging State academic standards adopted or implemented by a State." Assessments Each state plan must demonstrate that the SEA, in consultation with LEAs, has implemented assessments in RLA, mathematics, and science. The mathematics and RLA assessments must be administered in each of grades 3-8 and once during high school. The science assessment must be administered once in grades 3-5, grades 6-9, and grades 10-12. Thus, each state must administer 17 assessments each school year, but no individual student will take more than 3 of these assessments in a given school year. The assessments must be aligned with the state academic standards. A state may implement alternate assessments aligned with state academic standards and alternate academic achievement standards for students with the most significant cognitive disabilities. However, for each subject tested no more than 1% of all students tested may take the alternate assessment. Each state plan must also demonstrate that the LEAs in the state will administer an annual assessment of English proficiency for all English learners that is aligned with the state's English language proficiency standards. In addition to state assessments, each state receiving Title I-A funds must also agree to participate in the National Assessment of Educational Progress (NAEP) assessments of 4 th and 8 th grade students in reading and math every two years. Accountability System In its state plan, each SEA is required to describe its academic accountability system. The system must include state established long-term goals (and measures of interim progress) for all students and separately for each focal subgroup of students for academic achievement as measured by proficiency on the state RLA and mathematics assessments and high school graduation rates. In addition, the goals for subgroups of students who are behind on any of these measures must take into account the improvement needed to close statewide achievement gaps. Also, the system must include long-term goals (and measures of interim progress) for increases in the percentage of English learners making progress in achieving English proficiency, as defined by the state. The state must then use a set of indicators that are based, in part, on the long-term goals it established to measure annually the performance of all students and each subgroup of students to evaluate public schools. These indicators must include the following: 1. public school student performance on the RLA and mathematics assessments as measured by student proficiency, and for high schools this may also include a measure of student growth on such assessments; 2. for public elementary and secondary schools that are not high schools, a measure of student growth or another indicator that allows for "meaningful differentiation" in school performance; 3. for public high schools, graduation rates; 4. for all public schools in the state, progress in achieving English language proficiency ; and 5. for all public schools in the state, at least one indicator of school quality or student success (e.g., a measure of student engagement, postsecondary readiness, or school climate). Based on these indicators, the SEA must establish a system for annually "meaningfully differentiating" all public schools that gives substantial weight to each indicator but in the aggregate provides greater weight to the first four than to the school quality and student success indicators. The system must also identify any school in which any subgroup of students is "consistently underperforming," as determined by the state. Based on the state's system for annual meaningful differentiation, each SEA must establish a state-determined methodology to identify for comprehensive support and improvement (CSI): (1) at least the lowest-performing 5% of all schools receiving Title I-A funds, (2) all public high schools failing to graduate 67% or more of their students, (3) schools required to implement additional targeted support (see below) that have not improved in a state-determined number of years, and (4) additional statewide categories of schools, at the state's discretion. The LEAs in which schools are identified for CSI are required to work with stakeholders to develop a school improvement plan that, among other requirements, must include evidence-based interventions, be based on a school-level needs assessment, and identify resource inequities. An LEA may also offer students enrolled in a school identified for CSI the option to transfer to another public school in the LEA. If a school does not improve within a state-determined number of years (no more than four years), the school must be subject to more rigorous state-determined actions. States are required to identify for targeted support and improvement (TSI) any school in which one or more subgroups of students are consistently underperforming as determined by the state. Each of these schools is required to develop and implement a plan to improve student outcomes that includes evidence-based interventions. If a school fails to improve within a number of years determined by the LEA, additional actions must be taken. For a school in which one or more subgroups are performing at a level that if reflective of an entire school's performance would result in its identification for CSI, the school must be identified for additional targeted support and improvement (ATSI) activities, which must include an identification of resource inequities. If a school identified as meeting the criteria for ATSI does not improve within a state-determined number of years, the state is required to identify the school for CSI. In its state plan, the SEA must also provide an explanation of how the state will factor into its accountability system the requirement that 95% of all students and each subgroup of students participate in the required assessments. Teacher Requirements Any teacher or paraprofessional working in a program supported with Title I-A funds must meet applicable state certification and licensure requirements. In addition, states participating in Title I-A must describe in their state plans how low-income and minority children enrolled in Title I-A schools are not served at disproportionate rates by "ineffective, out-of-field, or inexperienced teachers." The state must also describe the measures that will be used to assess and evaluate the state's success in this area. School Improvement (Section 1003) To serve schools that are identified for comprehensive support and improvement or targeted support and improvement under Title I-A, SEAs are required to reserve the greater of (1) 7% of the total amount the state receives under Title I-A or (2) the sum of the amount that the state reserved for school improvement in FY2016 and received under the School Improvement Grant (SIG) program for FY2016. Beginning in FY2018, an SEA is only permitted to reserve the full amount of funds for school improvement if no LEA receives a smaller Title I-A grant than it did during the prior fiscal year due to the implementation of this provision. Of the funds reserved for school improvement, states are required under ESSA provisions to provide at least 95% to LEAs through formula or competitive grants to serve schools that are implementing comprehensive support and improvement activities or targeted support and improvement activities. Direct Student Services (Section 1003A) In addition to the required reservation of Title I-A funds for school improvement, SEAs have the option of reserving up to 3% of the Title I-A funds they receive for direct student services. This optional reservation of funds was not included in the law prior to the ESSA. Of the funds reserved, states must distribute 99% to geographically diverse LEAs using a competitive grant process that prioritizes grants to LEAs that serve the highest percentages of schools identified for comprehensive support and improvement or that are implementing targeted support and improvement plans. Funds for direct student services may be reserved without regard to how the reservation of funds may affect LEA grant amounts. Funds may be used by LEAs for a variety of purposes, including to pay the costs associated with the enrollment and participation of students in academic courses not otherwise available at the students' school; credit recovery and academic acceleration courses that lead to a regular high school diploma; activities that lead to the successful completion of postsecondary level instruction and examinations that are accepted for credit at institutions of higher education (IHEs), including reimbursing low-income students for the costs of these examinations; and public school choice if an LEA does not reserve funds for this purpose under Section 1111. Part B: Grants for State Assessment and Enhanced Assessment Instruments Title I-B authorizes the State Assessment Grant program to support the development of the state standards and assessments required under Title I-A; the administration of those assessments; and related activities, such as improving assessments for English learners. Two funding mechanisms are authorized: (1) formula grants to states for the development and administration of the state standards and assessments required under Title I-A, and (2) competitive grants to states to carry out related activities beyond the minimum assessment requirements. The allocation of funds depends on a statutorily established "trigger amount" of $369.1 million. For annual appropriations at or below the trigger amount, the entire appropriation is used to award formula grants to states. Under the formula grant program, the Secretary then provides each state with a minimum grant of $3 million. Any remaining funds are subsequently allocated to states in proportion to their number of students ages 5 to 17. For an annual appropriation above the trigger amount, the difference between the appropriation and trigger amount is used to award competitive grants to states. Assessment System Audit (Section 1202) The ESEA as amended by the ESSA permits the Secretary to reserve up to 20% of the funds appropriated for the State Assessment Grant program to make grants to states to conduct assessment system audits. From the funds reserved for this purpose, the Secretary is required to make an annual grant to the state of not less than $1.5 million to conduct a statewide assessment system audit and provide subgrants to LEAs to conduct assessment audits at the LEA level. Innovative Assessment and Accountability Demonstration Authority (Section 1204) The ESEA as amended by the ESSA includes a new demonstration authority for the development and use of an "innovative assessment system." A state, or a consortium of states, may apply for the demonstration authority to develop an innovative assessment system that "may include competency-based assessments, instructionally embedded assessments, interim assessments, cumulative year-end assessments, or performance based assessments that combine into an annual summative determination for each student" and "assessments that validate when students are ready to demonstrate mastery or proficiency and allow for differentiated student support based on individual learning needs." During the first three years in which the Secretary grants demonstration authority, not more than seven SEAs may have their applications for the authority approved. Separate funding is not provided under the demonstration authority; however, states may use a portion of the formula and competitive grant funding provided through the State Assessment Grant program discussed above to carry out this demonstration authority. Part C: Education of Migratory Children Title I-C authorizes grants to SEAs for the education of migratory children and youth. A migratory child or youth is one who made a qualifying move in the preceding 36 months as a migratory agricultural worker or migratory fisher or moved with or to join a parent or spouse who is a migratory agricultural worker or migratory fisher. Among other purposes, the program assists states in supporting high-quality, comprehensive educational programs and services during the school year, summer, and intersession periods that address the unique needs of migratory children. Funds are allocated by formula on the basis of each state's number of migratory children and youth aged 3-21 and Title I-A state expenditure factor (discussed above). ED may also make grants for the coordination of services and transfer of educational records for migratory students. Part D: Prevention and Intervention Programs for Children and Youth Who Are Neglected, Delinquent, or At Risk Title I-D authorizes a pair of programs intended to improve education for students who are neglected, delinquent, or at risk of dropping out of school. Subpart 1 authorizes grants for the education of children and youth in state institutions for the neglected or delinquent, including community day programs and adult correctional institutions. Funds are allocated to SEAs on the basis of the number of such children and youth and the Title I-A state expenditure factor. A portion of each SEA's grant is to be used to provide transition services to children and youth transferring to regular public schools. Under Subpart 2, Title I-A funds are provided to each SEA based on the number of children and youth residing in local correctional facilities or attending community day programs for delinquent children and youth. These Title I-A funds are used to make grants to LEAs with high numbers or percentages of children and youth in locally operated correctional facilities for children and youth. These children and youth are then served in accordance with Title I-D provisions. Funds are used, for example, to provide transition programs, dropout prevention programs, special programs to meet the unique academic needs of participating children and youth, and mentoring and peer mediation. Part E: Flexibility for Equitable Per-Pupil Funding ESEA Title I-E provides the Secretary with the authority to enter into demonstration agreements that provide flexibility to LEAs to deliver equitable per-pupil funding. The weighted per-pupil funding system must allocate substantially more funding to students from low-income families, English learners, and students with other characteristics associated with educational disadvantage selected by the LEA than is allocated to other students. Prior to the 2019-2020 school year, up to 50 LEAs were permitted to apply for the flexibility to consolidate eligible federal funds and state and local funds to create a single school funding system based on weighted per-pupil allocations (using weights or allocations to provide funding to schools). Beginning with the 2019-2020 school year, the number of LEAs permitted to participate under Title I-E is not capped provided a "substantial majority" of the LEAs participating in previous years have met program requirements. Part F: General Provisions Title I-F provides for the development of federal regulations for Title I programs and state administration of these programs. Part F also prohibits federal control of the "specific instructional content, academic achievement standards and assessments, curriculum or program of instruction" of states, LEAs, or schools, and clarifies that nothing in Title I is to be "construed to mandate equalized spending per pupil for a State, local educational agency, or school." Title II: Preparing, Training, and Recruiting High-Quality Teachers, Principals, and Other School Leaders Title II includes programs centered on teachers, school leaders (e.g., principals), literacy, and American history and civics education. Programs focused on teachers and school leaders support activities and initiatives such as professional development, staff recruitment and retention, performance-based compensation systems, and the establishment of a statewide science, technology, engineering, and mathematics (STEM) master teacher corps. Other Title II programs focus on literacy education, providing grants to support literacy efforts from birth through grade 12 and supporting school library programs, early literacy services, and the provision of high-quality books to children and adolescents. Title II also includes American history and civic education programs that provide academies for teachers and students to learn more about these topics and authorizes national activities related to American history and civics education. Title II's introductory text includes the purpose of the title, several definitions, and authorizations of appropriations for FY2017 through FY2020 for the programs authorized in Title II. Part A: Supporting Effective Instruction Part A authorizes a program of state grants that may be used for a variety of purposes related to preparation, training, recruitment, retention, and professional development of elementary and secondary education teachers and school leaders. The formula grants are allocated to SEAs based on student population and poverty counts, as well as a base guarantee determined by the amount each state received in FY2001 under antecedent programs. The base guarantee is being phased out through FY2022. SEAs may reserve a share of funds for administration and statewide services, such as teacher or principal support programs; preparation academies; licensing or certification reform; improving equitable access to effective teachers; reforming or improving teacher and principal preparation programs; training teachers in the use of student data; and technical assistance to LEAs. SEAs are required to suballocate at least 95% of grants to LEAs. Grants to LEAs are made based on student population and poverty counts. However, states are authorized to reserve up to 3% of the amount otherwise reserved for subgrants for LEAs for state-level activities focused on school leaders. Funds received by LEAs may be used for a variety of purposes including recruiting, hiring, and retaining effective teachers; teacher and school leader evaluation and support systems; professional development activities for teachers and principals; and class-size reduction. Part B: National Activities Subpart 1 authorizes the Teacher and School Leader Incentive Fund. This program provides competitive grants to LEAs, SEAs or other state agencies, the Bureau of Indian Education, or a partnership of one of these entities with one or more nonprofit or for-profit entities to develop, implement, improve, or expand performance-based teacher and principal compensation systems or human capital management systems for teachers, principals, and other school leaders in high-needs schools. Subpart 2 authorizes Literacy Education for All, Results for the Nation to improve student academic achievement in reading and writing from early education through grade 12. Under Subpart 2, competitive Comprehensive Literacy State Development Grants (Section 2222) are provided to SEAs. SEAs subsequently provide competitive subgrants to one or more eligible LEAs for the development and implementation of a comprehensive literacy instruction plan, professional development, and other activities. SEAs may also award competitive subgrants for early literacy services to one or more eligible early childhood education programs. In addition, SEAs may use funds to develop or enhance comprehensive literacy instruction plans. SEAs must ensure that at least 15% of funds are used to serve children from birth through age 5, 40% to serve children in kindergarten to grade 5, and 40% to serve children in grades 6 through 12. Funds reserved under Section 2222 for evaluation purposes must be used to conduct a national evaluation of the grant and subgrant programs authorized under Subpart 2 (Section 2225). Under the Innovative Approaches to Literacy program (Section 2226), the Secretary may award grants, contracts, or cooperative agreements to eligible entities to promote literacy programs that support the development of literacy skills in low-income communities through school library programs, early literacy services, and programs to provide high-quality books regularly to children from low-income communities. Subpart 3 authorizes American History and Civics Education programs. Section 2232 authorizes the Presidential and Congressional Academies for American History and Civics. Presidential Academies offer professional development opportunities for teachers of American history and civics. Congressional Academies provide a seminar or institute for outstanding students of American history and civics. Section 2233 authorizes national activities that provide competitive grants to promote new and existing evidence-based strategies to encourage innovative American history, civics and government, and geography instruction and learning strategies, and professional development for teachers and school leaders. Subpart 4 authorizes several programs related to educators, school leaders, technical assistance, and evaluation. Section 2242 authorizes the Supporting Effective Educator Development (SEED) program, which provides competitive grants to support nontraditional teacher certification or preparation routes, evidence-based professional development, professional development to support dual or concurrent enrollment, and professional enhancement activities that may lead to an advanced credential. Section 2243 authorizes the School Leader Recruitment and Support program, which provides competitive grants to improve the recruitment, placement, support, and retention of principals and other school leaders in high-need schools. Section 2244 authorizes a comprehensive center focused on students at risk of not attaining full literacy skills due to a disability. Funds may also be used to provide technical assistance or evaluate state and LEA activities under Title II-B. Section 2245 authorizes the STEM Master Teacher Corps program, which provides competitive grants to support the development of a statewide STEM master teacher corps or to support the implementation, replication, or expansion of effective STEM professional development programs. Part C: General Provisions Part C includes a supplement, not supplant provision that applies to funds provided under Title II. It also states that nothing in Title II authorizes the Secretary or any federal employee to mandate, direct, or control specific aspects of a state's, LEA's, or school's educational program, including, for example, instructional content, curricula, academic standards, academic assessments, staff evaluation systems, specific definitions of staff effectiveness, professional standards, licensing, or certification. Title II also states that none of the provisions in the title shall be construed to affect collective bargaining or other such agreements between school or district employees and their employers. Title III: Language Instruction for English Learners and Immigrant Students Title III authorizes programs that are focused on improving the academic attainment of ELs, including immigrant students. Under the Title III-A state grants program, funds are used at the state level to support activities such as consultation to develop statewide standardized entrance and exit procedures. Funds are used by LEAs for activities such as effective language instructional programs, professional development, and supplemental activities. Title III also authorizes two national programs, a professional development project and a clearinghouse related to the education of ELs. The introductory text to Title III authorizes appropriations for FY2017 through FY2020. Part A: English Language Acquisition, Language Enhancement, and Academic Achievement Act The English Language Acquisition program was designed to help ensure that ELs, including immigrant students, attain English proficiency, develop high levels of academic attainment in English, and meet the same challenging state academic standards that all students are expected to meet. The program was also designed to assist educators, SEAs, and LEAs in developing and implementing effective language instruction educational programs to assist in teaching ELs and developing and enhancing their capacity to provide effective instructional programs to prepare ELs to enter all-English settings. Title III-A also promotes parental, family, and community participation in language instruction educational programs for the parents, families, and communities of ELs. Formula grant allocations are made to SEAs based on the proportion of EL students and immigrant students in each state relative to all states. These amounts are weighted by 80% and 20%, respectively. SEAs may reserve not more than 5% of the funds received for working with LEAs to establish standardized statewide entrance and exit procedures, providing effective teacher and principal preparation and professional development activities, and planning evaluation, administration, and interagency coordination. SEAs are required to make subgrants to eligible entities based on the relative number of EL students in schools served by those entities. SEAs are also required to reserve not more than 15% of the state allocation to make grants to eligible entities that have experienced a significant increase in the percentage or number of immigrant students enrolled in schools in the geographic area served by the entity. Eligible entities receiving subgrants are required to use funds for three activities. First, funds must be used to increase the English language proficiency of ELs by providing effective language instructional programs that demonstrate the program is successfully increasing English language proficiency and student academic achievement. Second, funds must be used to provide effective professional development to school staff or community-based personnel. Third, funds must be used to provide and implement other "effective activities or strategies that enhance or supplement language instruction educational programs for ELs," including parent, family, and community engagement activities. Eligible entities receiving grants from the funds reserved specifically for immigrant students are required to use these funds to support activities that "provide enhanced instructional opportunities" for immigrant students. While Title III-A focuses on the education of ELs, Title I-A also contains provisions that specifically apply to this student population, as noted previously. For example, Title I-A requires that states establish English language proficiency standards that are derived from the domains of speaking, listening, reading, and writing and are aligned with challenging state academic standards. Under Title I-A, LEAs are required to assess English language proficiency annually using assessments aligned with the state English language proficiency standards. National Programs (Sections 3131 and 3202) A portion of Title III-A funds are reserved to support two specific national programs: (1) the National Professional Development Project (Section 3131), and (2) the National Clearinghouse for English Language Acquisition and Language Instruction Educational Programs (Section 3202). Under the National Professional Development Project, grants are awarded on a competitive basis for a period of up to five years to IHEs or public or private entities with relevant experience and capacity working in consortia with SEAs or LEAs to provide for professional development activities that will improve classroom instruction for ELs and help personnel working with these students to meet professional standards. The National Clearinghouse is responsible for collecting, analyzing, synthesizing, and disseminating information about language instruction educational programs for ELs and related programs. Part B: General Provisions Part B includes definitions relevant to Title III, statutory provisions authorizing the National Clearinghouse (discussed above), and the development of regulations for Title III. Title IV: 21st Century Schools Title IV authorizes a range of programs and activities including a block grant program, a program to support learning opportunities during non-school hours, programs to support charter schools and magnet schools, a family engagement program, an innovation and research program, programs to provide community support for student success, national activities for school safety, and programs focused on arts education, video programming for preschool and elementary school children, and gifted and talented education. Part A: Student Support and Academic Enrichment (SSAE) Grants Title IV-A authorizes SSAE grants to improve students' academic achievement by increasing the capacity of states, LEAs, schools, and local communities to (1) provide all students with access to a well-rounded education, (2) improve school conditions for student learning, and (3) improve the use of technology in order to increase the academic achievement and digital learning of all students. Formula grants are made to states based on their Title I-A funding from the prior year. States then make formula subgrants to LEAs. LEAs must use SSAE funds for three broad categories of activities: (1) supporting well-rounded educational opportunities, (2) supporting safe and healthy students, and (3) supporting the effective use of technology. If an LEA receives a grant of $30,000 or more, it must provide assurances that it will use at least 20% for activities to support a well-rounded education, at least 20% for activities to support safe and healthy students, and at least some of its funds to support the effective use of technology. If an LEA receives a grant of less than $30,000, it is only required to provide an assurance regarding the use of funds for at least one of the three categories. Part B: 21st Century Community Learning Centers Title IV-B supports activities provided during non-school hours that offer learning opportunities for school-aged children. Formula grants are made to SEAs based on their Title I-A funding from the prior year. States subsequently award grants to local entities (e.g., LEAs, community-based organizations) on a competitive basis for a period of three to five years. In awarding subgrants, SEAs are required to give priority to applicants proposing to target services to students who attend schools implementing CSI or TSI activities or other schools identified by the LEA in need of intervention support to improve student academic achievement and other outcomes; enroll students who may be at risk for academic failure, dropping out, or involvement with criminal or delinquent activities, or who lack "strong positive role models"; or target the families of such students. Local entities may use funds for activities that improve student academic achievement and support student success, such as academic enrichment learning programs, mentoring, tutoring, well-rounded education activities, programs to support a healthy and active lifestyle, technology education, expanded library service hours, parenting skills programs, drug and violence prevention programs, counseling programs, STEM programs, and programs that build career competencies and career readiness. Part C: Enhancing Opportunity Through Quality Charter Schools The Charter Schools Program (CSP) supports the startup of new charter schools and the replication and expansion of high-quality charter schools (Section 4303). It also assists charter schools in accessing credit to acquire and renovate facilities and includes a competitive grant program that provides per-pupil facilities aid (Section 4304). The CSP also provides funding for national activities to support the startup, replication, and expansion of charter schools; the dissemination of best practices; program evaluation; and stronger charter authorizing practices (Section 4305). Of the funds appropriated for Title I-C, 65% is provided for the startup, replication, and expansion of charter schools; 22.5% for national activities; and 12.5% for facilities financing. Part D: Magnet Schools Assistance Program Title IV-D provides grants to LEAs to plan and operate magnet schoolsâpublic schools of choice designed to encourage voluntary enrollment by students of different racial backgrounds. LEAs that are operating under a court-ordered desegregation plan or have voluntarily adopted a federally approved desegregation plan are eligible to receive grants to establish and operate magnet schools. In awarding grants, the Secretary is required to give priority to LEAs that demonstrate the greatest need for assistance, based on the expense or difficulty of effectively carrying out approved desegregation plans and the magnet school program; propose to implement a new or revise an existing magnet school program based on evidence-based methods and practices or replicate an existing magnet school with a demonstrated track record of success; plan to admit students by methods other than academic examinations, such as a lottery; and propose to increase racial integration by taking into account socioeconomic diversity in the design and implementation of the magnet school program. Part E: Family Engagement in Education Programs Title IV-E provides competitive grants to statewide organizations to establish family engagement centers. These centers promote parent education and family engagement in education programs and provide comprehensive training and technical assistance to SEAs, LEAs, and schools identified by SEAs and LEAs; organizations that support family-school partnerships; and other organizations that carry out such programs. Part F: National Activities Title IV-F authorizes a range of programs. Each is discussed briefly below. Subpart F-1 authorizes the Education Innovation and Research (EIR) program, which provides competitive grants to eligible entities to create, develop, implement, replicate, or take-to-scale entrepreneurial, evidence-based, field-initiated innovations to improve achievement and attainment for high-need students. Three types of grants (early phase, mid-phase, and expansion grants) are awarded primarily based on the past demonstrated success of the grantee in meeting these goals. Subpart F-2 authorizes the Promise Neighborhoods program (Section 4624) and the Full-Service Community Schools (FSCS) program (Section 4625). They were authorized by the ESEA prior to the enactment of the ESSA using authority previously available in Title V-D-1 to create programs of national significance. Both programs are designed to provide pipeline services, which deliver a "continuum of coordinated supports, services, and opportunities," to children in distressed communities. More specifically, the Promise Neighborhoods program provides a comprehensive, effective continuum of coordinated services in neighborhoods with high concentrations of low-income individuals, multiple signs of distress (e.g., high rates of poverty, academic failure, and juvenile delinquency), and schools implementing comprehensive or targeted support and improvement activities under Title I-A. The FSCS program provides grants to public elementary and secondary schools to participate in a community-based effort to coordinate and integrate educational, developmental, family, health, and other comprehensive services through community-based organizations and public and private partnerships. Access to such services is provided in schools to students, families, and the community. Subpart F-3 authorizes National Activities for School Safety. A portion of funds appropriated for these activities must be used for the Project School Emergency Response to Violence (Project SERV). Project SERV provides grants to LEAs, IHEs, and the Bureau of Indian Education (BIE) for BIE schools where the learning environment has been disrupted due to a violent or traumatic crisis. Funds for National Activities for School Safety that are not used for Project SERV may be used for other activities to improve student well-being during or after the school day. Subpart F-4 authorizes three programs focused on academic enrichment. Section 4642 authorizes competitive grants for arts education under the Assistance for Arts Education Program. Section 4643 authorizes grants to support educational and instructional video programming, accompanying support materials, and digital content to promote school readiness for preschool and elementary school children and their families through the Ready to Learn Programming program. Section 4644 authorizes the Javits Gifted and Talented Students Education Program, which provides grants to enhance the ability of elementary and secondary schools to identify gifted and talented students, including low-income and at-risk students, and meet their special educational needs. The section also supports the National Research Center for the Education of Gifted and Talented Children and Youth. Title V: Flexibility and Accountability Title V includes both funding transferability authority and programs to support rural education. Funding transferability authority allows states and LEAs to transfer federal funds from certain ESEA programs to other ESEA programs to enable them to address their particular needs. The Rural Education Assistance Program (REAP) provides additional resources to rural LEAs that might lack the resources to compete effectively for federal grants or might receive formula grant allocations that are too small to meet their intended purposes. The two rural education programs included in Title V provide LEAs with substantial flexibility in how they use their grant funds. Part A: Funding Transferability for State and Local Educational Agencies Funding transferability for states and LEAs is included under Title V-A to provide states and LEAs with the "flexibility to target Federal funds to the programs and activities that most effectively address" their "unique needs." In general, states are able to transfer funds from three formula grants programs that focus on teachers and school leaders, provide block grants, and provide after-school programming to formula grant programs focused on special populations (i.e., disadvantaged students, migratory students, neglected and delinquent students, and ELs). More specifically, states are permitted to transfer up to 100% of the funds allotted to them for state-level activities under Title II-A, Title IV-A, or Title IV-B to Title I-A, Title I-C, Title I-D, Title III-A, and one other ESEA program. Similarly, LEAs are also permitted to transfer funds from formula grant programs that focus on teachers and school leaders or provide block grants to formula grant programs focused on special populations. More specifically, LEAs are permitted to transfer 100% of the funds received under Title II-A or Title IV-A to Title I-A, Title I-C, Title I-D, Title III-A, and one other ESEA program. SEAs and LEAs are prohibited from transferring funds from Title I-A, Title I-C, Title I-D, Title III-A, and one other ESEA program to any other program. Part B: Rural Education Initiative Title V-B authorizes the Rural Education Achievement Program (REAP), which is designed to assist rural LEAs that may lack the resources to compete effectively for competitive grants and that may receive grants under other ESEA programs that are too small to be effective in meeting their specified purposes. Subpart 1 authorizes the Small, Rural School Achievement (SRSA) program, which (1) provides eligible rural LEAs with the flexibility to use funds received under Title II-A and Title IV-A to carry out local activities authorized under certain ESEA programs, and (2) authorizes a formula grant program for rural LEAs under which funds received may be used under several other ESEA programs. Eligibility for both the flexibility authority and the grant program is based on criteria such as average daily attendance or population density and locale codes. Subpart 2 authorizes the Rural and Low-Income School (RLIS) program, which provides formula grants to states. SEAs then make subgrants to eligible LEAs by formula or competition as determined by the SEA. LEA eligibility criteria include a school-age child poverty rate of 20% or more and meeting certain locale requirements. Similar to the SRSA grants, RLIS grants may be used under several other ESEA programs or for parent involvement activities. LEAs cannot receive both an SRSA grant and a RLIS grant. An LEA that is eligible for grants under both the SRSA and RLIS programs must select the grant program under which it will receive funds. Part C: General Provisions Part C contains several prohibitions against federal control of educational curricula, academic standards and assessments, or programs of instruction as a condition of receipt of funds under Title V. It also states that nothing in Title V shall be construed to mandate equalized spending per pupil for a state, LEA, or school. Title VI: Indian, Native Hawaiian, and Alaska Native Education Title VI provides funds specifically for the education of Indian, Native Hawaiian, and Alaska Native children. With respect to Indian education, the ESEA authorizes formula grants to LEAs, Indian tribes and organizations, BIE schools, and other entities to support elementary and secondary school programs that meet the unique cultural, language, and educational needs of Indian children. Funds are also provided for competitive grants to examine the effectiveness of services for Indian children and to provide support and training for Indian individuals to work in various capacities in the education system. Title VI also authorizes competitive grants to organizations with experience in operating Native Hawaiian programs to provide services to improve Native Hawaiian education. A Native Hawaiian Education Council is also authorized under Title VI. In addition, Title VI authorizes competitive grants for activities and services intended to improve education for Alaska Natives, such as the development of curricular materials and professional development. Part A: Indian Education Subpart 1 authorizes formula grants to eligible LEAs, Indian tribes and organizations, BIE schools, and other entities to support the development of elementary and secondary school programs for Indian students that are designed to meet the unique cultural, language, and educational needs of such students and ensure that all students meet their state's challenging academic standards. Grant allocations are determined based on the number of eligible Indian children served by the eligible entity and state average per pupil expenditures. Subpart 2, Special Programs and Projects to Improve Educational Opportunities for Indian Children, authorizes two competitive grant programs: (1) Improvement of Educational Opportunities for Indian Children and Youth (Section 6121) and (2) Professional Development for Teachers and Education Professionals (Section 6122). The former supports projects to develop, examine, and demonstrate the effectiveness of services and programs to improve educational opportunities and achievement of Indian children and youth. The latter focuses on efforts such as providing support and training to qualified Indian individuals to become effective teachers, school leaders, and administrators. Subpart 3, National Activities, authorizes funds for a variety of purposes including research, evaluation, and data collection and analysis. It also authorizes Grants to Tribes for Education Administrative Planning, Development, and Coordination (Section 6132), as well as for Native American and Alaska Native Language Immersion Schools and Programs (Section 6133). Subpart 4 establishes the National Advisory Council on Indian Education (NACIE; Section 6141) and authorizes a preference for Indian entities under programs authorized by Subparts 2 and 3. Part B: Native Hawaiian Education Part B authorizes competitive grants to Native Hawaiian educational or community-based organizations, charter schools, or other public or private nonprofit organizations with experience in operating Native Hawaiian programs, or consortia of these entities, to provide a wide variety of services intended to improve education for Native Hawaiians. In the awarding of grants, priority is to be given to activities that are intended to improve reading skills for Native Hawaiian students in grades K-3, meet the needs of at-risk children and youth, increase participation by Native Hawaiians in fields or disciplines in which they are underemployed, or increase the use of the Hawaiian language in instruction. Specifically authorized activities include early childhood education and care, services for Native Hawaiian students with disabilities, and professional development for educators. Title VI-B also establishes a Native Hawaiian Education Council, which provides coordination activities, technical assistance, and community consultations related to the educational needs of Native Hawaiians. Part C: Alaska Native Education Part C authorizes competitive grants for a variety of activities and services intended to improve education for Alaska Natives. Eligible grantees include Alaska Native organizations with relevant experience, Alaska Native organizations that lack relevant experience and partner with an SEA, LEA, or Alaska Native organization operating relevant programs; or an entity located in Alaska that is predominantly governed by Alaska Natives and meets other specified criteria. Authorized uses of funds include, for example, the development of curriculum materials that address the special needs of Alaska Native students, training and professional development, early childhood and parenting activities, and career preparation activities. Title VII: Impact Aid Title VII compensates LEAs for the "substantial and continuing financial burden" resulting from federal activities. These activities include federal ownership of certain lands, as well as the enrollments in LEAs of children of parents who work and/or live on federal land (e.g., children of parents in the military and children living on Indian lands). The federal government provides compensation via Impact Aid for lost tax revenue because these activities deprive LEAs of the ability to collect property or other taxes from these individuals (e.g., members of the Armed Forces living on military bases) even though the LEAs are obligated to provide free public education to their children. Title VII authorizes several types of Impact Aid payments. These include payments under Section 7002, Section 7003, Section 7007, and Section 7008, which are discussed briefly below. Payments Relating to Federal Acquisition of Real Property ( Section 7 002 ) . Section 7002 compensates LEAs for the federal ownership of certain property. To qualify for compensation, the federal government must have acquired the property, in general, after 1938 and the assessed value of the land at the time it was acquired must have represented at least 10% of the assessed value of all real property within an LEA's area of service. Payments for Eligible Federally Connected Children (Basic Support Payments, Section 7 003 ) . Section 7003 compensates LEAs for enrolling "federally connected" children. These are children who reside with a parent who is a member of the uniformed services living on or off federal property, reside with a parent who is an accredited foreign military officer living on or off federal property, reside on Indian lands, reside in low-rent public housing, or reside with a parent who is a civilian working and/or living on federal land. Two payments are made under Section 7003. Section 7003(b) authorizes "basic support payments" for federally connected children. Basic support payments are allocated directly to LEAs by ED based on a formula that uses weights assigned to different categories of federally connected children and cost factors to determine maximum payment amounts. Section 7003(d) authorizes additional payments to LEAs based on the number of certain children with disabilities who are eligible to receive services under the Individuals with Disabilities Education Act (IDEA). Payments are limited to IDEA-eligible children whose parents are members of the uniformed services (residing on or off federal property) and those residing on Indian lands. Construction ( Section 7 007 ) . Section 7007 provides funds for construction and facilities upgrading to certain LEAs with high percentages of children living on Indian lands or children of military parents. These funds are used to make formula and competitive grants. Facilities Maintenance ( Section 7 008 ) . Section 7008 provides funds for emergency repairs and comprehensive capital improvements at schools that ED currently owns but LEAs use to serve federally connected military dependent children. Title VIII: General Provisions Part A: Definitions Part A (Section 8101) provides definitions of a variety of terms used frequently throughout the ESEA, such as "local educational agency," "state educational agency," "evidence-based," "four-year adjusted cohort graduation rate," "professional development," "state," and "well-rounded education." Part B: Flexibility in the Use of Administrative and Other Funds Part B authorizes SEAs and LEAs to consolidate and jointly use funds available for administration under multiple ESEA programs. In order to qualify for this flexibility, SEAs must demonstrate that a majority of their resources are provided from nonfederal sources. LEAs need SEA approval to consolidate their funds. Part B also authorizes the consolidation of funds set aside for the Department of the Interior under various ESEA programs and the McKinney-Vento Homeless Education program. Part C: Coordination of Programs, Consolidated State and Local Plans and Applications Part C authorizes SEAs and LEAs to prepare single, consolidated plans and reports for all "covered" ESEA programs. In general, the covered programs are the ESEA formula grant programs administered via SEAs. Part D: Waivers Under this provision, the Secretary is authorized to waive most statutory and regulatory requirements associated with any program authorized by the ESEA, if specifically requested by an SEA or Indian tribe. LEAs may submit waiver requests through their SEA. The SEA may then submit the request to the Secretary if it approves the waiver. Schools must submit their waiver requests to their LEAs, which in turn submit those requests to the SEA. Part E: Approval and Disapproval of State Plans and Local Applications Part E includes provisions related to secretarial approval of state ESEA plans and SEA approval of LEA plans. In both cases, the Secretary and the SEA, respectively, have 120 days from the day the plan was submitted to make a written determination that the submitted plan does not comply with relevant requirements. If such a determination is made, among other actions, the state or LEA must be notified immediately of the determination, provided with a detailed description of the specific plan provisions that failed to meet the requirements, offered an opportunity to revise and resubmit the plan within 45 days of the determination being made, provided technical assistance upon request (from the Secretary or SEA, respectively), and provided with a hearing within 30 days of the plans resubmission. Part F: Uniform Provisions Subpart 1 contains provisions for the participation of private school students and staff in those ESEA programs where such participation is authorized. Under the relevant ESEA programs, services provided to private school students or staff are to be equitable in relation to the number of such students or staff eligible for each program; secular, neutral, and non-ideological, with no funds to be used for religious worship or instruction; and developed through consultation between public and private school officials. Provision is made for bypassing SEAs and LEAs that cannot or have not provided equitable services to private school students or staff, and serving private school students and staff in these areas through neutral, third-party organizations. Provision is also made for the submission of complaints regarding implementation of these requirements. Subpart 1 also prohibits federal control of private or homeschools, or the application of any ESEA requirement to any private school that does not receive funds or services under any ESEA program. It also states that no ESEA provisions apply to homeschools. Subpart 2 contains a wide range of provisions, including the following: a general definition of "maintenance of effort," as applied in several ESEA programs (Section 8521); a requirement that ED publish guidance on prayer in public schools, and a requirement that LEAs receiving ESEA funds certify to their SEAs that they do not limit the exercise of "constitutionally protected prayer" in public schools (Section 8524); a requirement that recipient SEAs, LEAs, and public schools have a "designated open forum" to provide equal access to the Boy Scouts (Section 8525); a prohibition on the use of ESEA funds to "promote or encourage sexual activity (Section 8526)"; a prohibition on federal control of educational curricula, content or achievement standards, building standards, or allocation of resources (Section 8526A and Section 8527); a requirement that LEAs receiving funds under any ED program provide to the armed services access to directory information on secondary school students, unless students or their parents request that such information not be released (Section 8528); a prohibition on federally sponsored testing of students or teachers, with some exceptions (Section 8529); an "Unsafe School Choice Option" under which students in states receiving ESEA funds who attend a "persistently dangerous" public school, or who are victims of violent crime at school, are to be offered the opportunity to transfer to a "safe" public school (Section 8532); a requirement related to the transfer of school disciplinary records (Section 8537); a requirement related to consultation between LEAs and Indian tribes and tribal organizations (Section 8538); a requirement that ED provide outreach and technical assistance to rural LEAs (Section 8539); and a prohibition related to the aiding and abetting of sex abuse (Section 8546). Subpart 3 includes teacher liability protection. This subpart provides limitations on liability for teachers in school for harm caused by an act or omission of the teacher on behalf of the school if certain conditions (e.g., the teacher was acting within the scope of his or her employment) are met. Subpart 4 contains gun-free requirements. Each state receiving funds under the ESEA must have a state law that requires LEAs to expel for at least one year any student who is determined to have brought a firearm to a school or possessed a firearm at a school under the jurisdiction of an LEA in the state. The chief administering officer of the LEA may modify this requirement on a case-by-case basis. In addition, no LEA may receive funds unless it has a policy requiring that any student who brings a firearm or weapon to a school served by the LEA is referred to the criminal justice or juvenile delinquency system. Subpart 5 prohibits smoking within indoor facilities providing kindergarten, elementary, or secondary education or library services to children, if the services are funded directly or indirectly by the federal government, or the facility is constructed, operated, or maintained using federal funds. Part G: Evaluations Part G authorizes ED to reserve 0.5% of the funds appropriated for ESEA programs, other than Titles I, for program evaluations if funds for this purpose are not separately authorized. Appropriations and Authorizations of Appropriations for Programs Authorized by theÂ ESEA Appropriations included in Table 1 are based on the most recent data available from ED's Budget Service Office. The amounts shown reflect any reprogramming or transfers of funds done by ED as of the time this table was prepared to provide the actual level of funding allocated to each program/activity. This list of "programs/activities" does not take into account the number of programs, projects, or activities that may be funded under a single line-item appropriation, so the actual number of ESEA programs, projects, or activities being supported through appropriations is not shown. It should be noted that ED considers all of the funds provided in an appropriations act for a given fiscal year, including advance appropriations provided for the following fiscal year, to be appropriations for the given fiscal year. For example, for the purposes of appropriations, ED considers all of the funds provided in the FY2019 appropriations act, including advance appropriations provided in FY2020, to be FY2019 appropriations. Table 2 provides ESEA appropriations for FY2016 and FY2017 to depict the transition from the ESEA as amended by the NCLB to the ESEA as amended by the ESSA. Programs authorized under the ESEA as amended by either the NCLB or the ESSA are included. Programs and activities are referred to by their names in the ESEA as amended by the ESSA if a program was in both the ESEA as amended by the ESSA and by the NCLB. If the program had a different name in the ESEA as amended by the NCLB, the name is included in parentheses. Programs are listed in the order in which they appear in the ESEA as amended by the ESSA if they also appeared in the ESEA as amended by the NCLB. For programs that appear in only the ESEA as amended by either the ESSA or the NCLB, programs are listed in the order they appear or appeared in law. For some programs that were funded in FY2016 but not in FY2017, it is possible that another program authorized in FY2017 provided funding for similar purposes. For example, the Elementary and Secondary School Counseling program was funded in FY2016 but not in FY2017. School counseling activities are an allowable use of funds under the SSAE program created under the ESSA. The same methodology as discussed above was used in determining appropriations amounts for each program. Table 3 provides the authorized level of appropriations for each program included in the ESEA that has a specified authorization of appropriations. The ESEA includes authorizations of appropriations for FY2017 through FY2020. Appendix. Glossary of Acronyms Summary:	null	96	70,595	70,597	70,597	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The primary source of federal aid to elementary and secondary education is the Elementary and Secondary Education Act (ESEA)âparticularly its Title I-A program, which authorizes federal aid for the education of disadvantaged students. The ESEA was initially enacted in 1965 (P.L. 89-10) "to strengthen and improve educational quality and educational opportunities in the Nation's elementary and secondary schools." It was most recently comprehensively amended and reauthorized by the Every Student Succeeds Act (ESSA; P.L. 114-95 ), which was enacted "to ensure that every child achieves." The ESSA authorized appropriations for ESEA programs through FY2020. FY2019 appropriation for ESEA programs are $25.2 billion. Under Title I-A, the ESEA as amended by the ESSA continues to require states and public schools systems to focus on educational accountability as a condition for the receipt of grant funds. Public school systems and individual public schools are held accountable for monitoring and improving achievement outcomes for students and closing achievement gaps, sustaining a focus that was initiated by amendments to the ESEA made by the No Child Left Behind Act of 2001 (NCLB; P.L. 107-110 ) but modified under the ESSA. While states were given more latitude to develop their educational accountability systems under the ESSA provisions, as a condition for receiving Title I-A funds each state must continue to have content and academic achievement standards and aligned assessments in reading/language arts (RLA), mathematics, and science for specific grade levels. States must now have an accountability system that incorporates (1) long-term and interim performance goals for specified measures; (2) weighted indicators based, in part, on these goals; and (3) an annual system for meaningful differentiation that is used to identify schools that need additional support to improve student achievement. Beyond Title I-A, other authorized ESEA programs provide, for example, grants to support: the education of migratory students; recruitment and professional development of teachers; language instruction for English learners (ELs); well-rounded education, safe and healthy students, and technology initiatives; after-school instruction and care programs; expansion of charter schools and other forms of public school choice; education services for Native American, Native Hawaiian, and Alaska Native students; Impact Aid to compensate local educational agencies (LEAs) for taxes forgone due to certain federal activities; and innovative educational approaches or instruction to meet particular student needs. In order to receive funds under Title I-A and several other formula grant programs authorized by the ESEA, each state educational agency (SEA) must submit a state plan to the U.S. Department of Education (ED). These plans can be submitted for individual formula grant programs or, if permitted by the Secretary of Education (hereinafter referred to as the Secretary), the SEA may submit a consolidated state plan based on requirements established by the Secretary. Following the enactment of the ESSA, all SEAs submitted consolidated state plans. The Secretary has approved these plans for all 50 states, the District of Columbia, and Puerto Rico. This report provides a brief overview of major provisions of the ESEA. It is organized by title and part of the act. Annual appropriations for ESEA programs are provided through the Departments of Labor, Health and Human Services, and Education, and Related Agencies (L-HHS-ED) Appropriations Act, and are shown in this report based on the most recent data available from the U.S. Department of Education, Budget Service for FY2017 through FY2019. Table 2 provides ESEA appropriations for FY2016 and FY2017 to depict the transition from the ESEA as amended by the NCLB to the ESEA as amended by the ESSA. Table 3 provides authorizations of appropriations included in the ESEA as amended by the ESSA. The Appendix provides a list of selected acronyms used in the report. Title I: Improving the Academic Achievement of theÂ Disadvantaged The introductory text for ESEA Title I includes the purpose of Title I and authorizations of appropriations for FY2017 through FY2020 for each part of the title. The purpose of Title I is "to provide all children significant opportunity to receive a fair, equitable, and high-quality education, and to close educational achievement gaps." The introductory text prior to Title I-A also requires states to reserve funds provided under Title I-A for school improvement activities and allows them to reserve Title I-A funds for direct students services. As such, while these reservations of funds appear before Title I-A in the ESEA, they are examined following the Title I-A discussion to provide greater context. The introductory text prior to Title I-A also provides authority for states to reserve funds for state administration for Title I-A, Title I-C, and Title I-D. Administration (Section 1004) Section 1004 permits states to reserve funds under Title I-A, Title I-C, and Title I-D for administration. Under this provision, a state may reserve 1% of the amount received under parts A, C, and D, or $400,000 (whichever is greater) for state administration. Part A: Grants to Local EducationalÂ Agencies6 Title I-A authorizes federal aid to LEAs for the education of disadvantaged children. Title I-A grants provide supplementary educational and related services to low-achieving and other students attending elementary and secondary schools with relatively high concentrations of students from low-income families, as well as eligible students who live in the areas served by these public schools but attend private schools. Title I-A is also a vehicle to which a number of requirements affecting broad aspects of public elementary and secondary education for all students have been attached as conditions for receiving these grants. Calculation of Title I-A Grants Title I-A grants are calculated by ED at the LEA level. The funds are then provided to SEAs, which are required to reserve funds for school improvement activities and may reserve funds for administration and direct student services. SEAs also adjust grant amounts for LEAs for which ED is unable to determine grant amounts, such as newly created LEAs or charter schools that are their own LEAs. In calculating Title I-A grant amounts, ED determines grant amounts under four different formulasâBasic, Concentration, Targeted, and Education Finance Incentive Grants (EFIG)âalthough funds allocated under all of these formulas are combined and used for the same purposes by recipient LEAs. While the allocation formulas have several distinctive elements, the primary factor used in all four is the estimated number of children aged 5-17 in families in poverty. Other factors included in one or more formulas include a state expenditure factor based on average per pupil expenditures for public elementary and secondary education, weighting schemes designed to increase aid to LEAs with the highest concentrations of poverty, and a factor to increase grants to states with high levels of expenditure equity among their LEAs. Each formula also has an LEA hold harmless provision and a state minimum grant provision. While there are several rules related to school selection, LEAs must generally rank their public schools by their percentages of students from low-income families, and serve them in rank order. This must be done without regard to grade span for any eligible school attendance area in which the concentration of children from low-income families exceeds 75%. An LEA also has the option of serving all high schools in rank order in which the concentration of children from low-income families is 50% or greater. Below these benchmarks, an LEA can choose to serve schools in rank order at specific grade levels (e.g., only serve elementary schools in order of their percentages of children from low-income families) or continue to serve schools at all grade levels in rank order. Once schools are selected, Title I-A funds are allocated among them on the basis of their number of students from low-income families. LEAs are not required to allocate the same amount of Title I-A funds per low-income child to each school. They may provide higher grants per low-income child at schools with high rates of these children than are allocated per low-income child to schools with lower rates of these children. Types of Title I-A Programs There are two basic types of Title I-A programs. Schoolwide programs are authorized if the percentage of low-income students served by a school is 40% or higher. In schoolwide programs, Title I-A funds may be used to improve the performance of all students in a school. For example, funds might be used to provide professional development services to all of a school's teachers, upgrade instructional technology, or implement new curricula. The other basic type of Title I-A school service model is the targeted assistance program (TAP). Under TAPs, Title I-A-funded services are generally limited to the lowest-achieving students in the school. For example, students may receive additional instruction in an after-school program, or funds may be used to hire a teacher's aide who provides additional assistance to low-achieving students in their regular classroom. In general, schools have substantial latitude in how they use Title I-A funds, provided the funds are used to improve student academic achievement. Standards, Assessments, and Accountability Requirements (Section 1111) As previously mentioned, each SEA must submit a state plan to ED to receive funds under Title I-A and several other state formula grant programs authorized under the ESEA. For Title I-A purposes, the plan requires the SEA to provide information or assurances related to its standards, assessments, and accountability system. Requirements related to each of these areas are discussed below. Standards In its state plan, each SEA receiving Title I-A funds is required to provide an assurance that it has adopted challenging academic content standards and aligned academic achievement standards (hereinafter collectively referred to as academic standards) in RLA, mathematics, and science (and any other subject selected by the state). The academic standards must include at least three levels of achievement (e.g., basic, proficient, and advanced). In addition, states are required to demonstrate that these academic standards are aligned with entrance requirements for credit-bearing coursework in the state's system of public higher education and relevant state career and technical education standards. A state is permitted to adopt alternate academic achievement standards for students with the most significant cognitive disabilities provided, among other requirements, that the standards are aligned with the state's challenging academic content standards. The state is also required to demonstrate that it has adopted English language proficiency standards that are derived from the domains of speaking, listening, reading, and writing; address the different proficiency levels of English learners; and align the English language proficiency standards with the challenging state academic standards. The ESEA explicitly maintains that a state is not required to submit any of the aforementioned standards to the Secretary of Education (the Secretary) for review or approval. Also, the Secretary does not have the authority "to mandate, direct, control, coerce, or exercise any direction or supervision over any of the challenging State academic standards adopted or implemented by a State." Assessments Each state plan must demonstrate that the SEA, in consultation with LEAs, has implemented assessments in RLA, mathematics, and science. The mathematics and RLA assessments must be administered in each of grades 3-8 and once during high school. The science assessment must be administered once in grades 3-5, grades 6-9, and grades 10-12. Thus, each state must administer 17 assessments each school year, but no individual student will take more than 3 of these assessments in a given school year. The assessments must be aligned with the state academic standards. A state may implement alternate assessments aligned with state academic standards and alternate academic achievement standards for students with the most significant cognitive disabilities. However, for each subject tested no more than 1% of all students tested may take the alternate assessment. Each state plan must also demonstrate that the LEAs in the state will administer an annual assessment of English proficiency for all English learners that is aligned with the state's English language proficiency standards. In addition to state assessments, each state receiving Title I-A funds must also agree to participate in the National Assessment of Educational Progress (NAEP) assessments of 4 th and 8 th grade students in reading and math every two years. Accountability System In its state plan, each SEA is required to describe its academic accountability system. The system must include state established long-term goals (and measures of interim progress) for all students and separately for each focal subgroup of students for academic achievement as measured by proficiency on the state RLA and mathematics assessments and high school graduation rates. In addition, the goals for subgroups of students who are behind on any of these measures must take into account the improvement needed to close statewide achievement gaps. Also, the system must include long-term goals (and measures of interim progress) for increases in the percentage of English learners making progress in achieving English proficiency, as defined by the state. The state must then use a set of indicators that are based, in part, on the long-term goals it established to measure annually the performance of all students and each subgroup of students to evaluate public schools. These indicators must include the following: 1. public school student performance on the RLA and mathematics assessments as measured by student proficiency, and for high schools this may also include a measure of student growth on such assessments; 2. for public elementary and secondary schools that are not high schools, a measure of student growth or another indicator that allows for "meaningful differentiation" in school performance; 3. for public high schools, graduation rates; 4. for all public schools in the state, progress in achieving English language proficiency ; and 5. for all public schools in the state, at least one indicator of school quality or student success (e.g., a measure of student engagement, postsecondary readiness, or school climate). Based on these indicators, the SEA must establish a system for annually "meaningfully differentiating" all public schools that gives substantial weight to each indicator but in the aggregate provides greater weight to the first four than to the school quality and student success indicators. The system must also identify any school in which any subgroup of students is "consistently underperforming," as determined by the state. Based on the state's system for annual meaningful differentiation, each SEA must establish a state-determined methodology to identify for comprehensive support and improvement (CSI): (1) at least the lowest-performing 5% of all schools receiving Title I-A funds, (2) all public high schools failing to graduate 67% or more of their students, (3) schools required to implement additional targeted support (see below) that have not improved in a state-determined number of years, and (4) additional statewide categories of schools, at the state's discretion. The LEAs in which schools are identified for CSI are required to work with stakeholders to develop a school improvement plan that, among other requirements, must include evidence-based interventions, be based on a school-level needs assessment, and identify resource inequities. An LEA may also offer students enrolled in a school identified for CSI the option to transfer to another public school in the LEA. If a school does not improve within a state-determined number of years (no more than four years), the school must be subject to more rigorous state-determined actions. States are required to identify for targeted support and improvement (TSI) any school in which one or more subgroups of students are consistently underperforming as determined by the state. Each of these schools is required to develop and implement a plan to improve student outcomes that includes evidence-based interventions. If a school fails to improve within a number of years determined by the LEA, additional actions must be taken. For a school in which one or more subgroups are performing at a level that if reflective of an entire school's performance would result in its identification for CSI, the school must be identified for additional targeted support and improvement (ATSI) activities, which must include an identification of resource inequities. If a school identified as meeting the criteria for ATSI does not improve within a state-determined number of years, the state is required to identify the school for CSI. In its state plan, the SEA must also provide an explanation of how the state will factor into its accountability system the requirement that 95% of all students and each subgroup of students participate in the required assessments. Teacher Requirements Any teacher or paraprofessional working in a program supported with Title I-A funds must meet applicable state certification and licensure requirements. In addition, states participating in Title I-A must describe in their state plans how low-income and minority children enrolled in Title I-A schools are not served at disproportionate rates by "ineffective, out-of-field, or inexperienced teachers." The state must also describe the measures that will be used to assess and evaluate the state's success in this area. School Improvement (Section 1003) To serve schools that are identified for comprehensive support and improvement or targeted support and improvement under Title I-A, SEAs are required to reserve the greater of (1) 7% of the total amount the state receives under Title I-A or (2) the sum of the amount that the state reserved for school improvement in FY2016 and received under the School Improvement Grant (SIG) program for FY2016. Beginning in FY2018, an SEA is only permitted to reserve the full amount of funds for school improvement if no LEA receives a smaller Title I-A grant than it did during the prior fiscal year due to the implementation of this provision. Of the funds reserved for school improvement, states are required under ESSA provisions to provide at least 95% to LEAs through formula or competitive grants to serve schools that are implementing comprehensive support and improvement activities or targeted support and improvement activities. Direct Student Services (Section 1003A) In addition to the required reservation of Title I-A funds for school improvement, SEAs have the option of reserving up to 3% of the Title I-A funds they receive for direct student services. This optional reservation of funds was not included in the law prior to the ESSA. Of the funds reserved, states must distribute 99% to geographically diverse LEAs using a competitive grant process that prioritizes grants to LEAs that serve the highest percentages of schools identified for comprehensive support and improvement or that are implementing targeted support and improvement plans. Funds for direct student services may be reserved without regard to how the reservation of funds may affect LEA grant amounts. Funds may be used by LEAs for a variety of purposes, including to pay the costs associated with the enrollment and participation of students in academic courses not otherwise available at the students' school; credit recovery and academic acceleration courses that lead to a regular high school diploma; activities that lead to the successful completion of postsecondary level instruction and examinations that are accepted for credit at institutions of higher education (IHEs), including reimbursing low-income students for the costs of these examinations; and public school choice if an LEA does not reserve funds for this purpose under Section 1111. Part B: Grants for State Assessment and Enhanced Assessment Instruments Title I-B authorizes the State Assessment Grant program to support the development of the state standards and assessments required under Title I-A; the administration of those assessments; and related activities, such as improving assessments for English learners. Two funding mechanisms are authorized: (1) formula grants to states for the development and administration of the state standards and assessments required under Title I-A, and (2) competitive grants to states to carry out related activities beyond the minimum assessment requirements. The allocation of funds depends on a statutorily established "trigger amount" of $369.1 million. For annual appropriations at or below the trigger amount, the entire appropriation is used to award formula grants to states. Under the formula grant program, the Secretary then provides each state with a minimum grant of $3 million. Any remaining funds are subsequently allocated to states in proportion to their number of students ages 5 to 17. For an annual appropriation above the trigger amount, the difference between the appropriation and trigger amount is used to award competitive grants to states. Assessment System Audit (Section 1202) The ESEA as amended by the ESSA permits the Secretary to reserve up to 20% of the funds appropriated for the State Assessment Grant program to make grants to states to conduct assessment system audits. From the funds reserved for this purpose, the Secretary is required to make an annual grant to the state of not less than $1.5 million to conduct a statewide assessment system audit and provide subgrants to LEAs to conduct assessment audits at the LEA level. Innovative Assessment and Accountability Demonstration Authority (Section 1204) The ESEA as amended by the ESSA includes a new demonstration authority for the development and use of an "innovative assessment system." A state, or a consortium of states, may apply for the demonstration authority to develop an innovative assessment system that "may include competency-based assessments, instructionally embedded assessments, interim assessments, cumulative year-end assessments, or performance based assessments that combine into an annual summative determination for each student" and "assessments that validate when students are ready to demonstrate mastery or proficiency and allow for differentiated student support based on individual learning needs." During the first three years in which the Secretary grants demonstration authority, not more than seven SEAs may have their applications for the authority approved. Separate funding is not provided under the demonstration authority; however, states may use a portion of the formula and competitive grant funding provided through the State Assessment Grant program discussed above to carry out this demonstration authority. Part C: Education of Migratory Children Title I-C authorizes grants to SEAs for the education of migratory children and youth. A migratory child or youth is one who made a qualifying move in the preceding 36 months as a migratory agricultural worker or migratory fisher or moved with or to join a parent or spouse who is a migratory agricultural worker or migratory fisher. Among other purposes, the program assists states in supporting high-quality, comprehensive educational programs and services during the school year, summer, and intersession periods that address the unique needs of migratory children. Funds are allocated by formula on the basis of each state's number of migratory children and youth aged 3-21 and Title I-A state expenditure factor (discussed above). ED may also make grants for the coordination of services and transfer of educational records for migratory students. Part D: Prevention and Intervention Programs for Children and Youth Who Are Neglected, Delinquent, or At Risk Title I-D authorizes a pair of programs intended to improve education for students who are neglected, delinquent, or at risk of dropping out of school. Subpart 1 authorizes grants for the education of children and youth in state institutions for the neglected or delinquent, including community day programs and adult correctional institutions. Funds are allocated to SEAs on the basis of the number of such children and youth and the Title I-A state expenditure factor. A portion of each SEA's grant is to be used to provide transition services to children and youth transferring to regular public schools. Under Subpart 2, Title I-A funds are provided to each SEA based on the number of children and youth residing in local correctional facilities or attending community day programs for delinquent children and youth. These Title I-A funds are used to make grants to LEAs with high numbers or percentages of children and youth in locally operated correctional facilities for children and youth. These children and youth are then served in accordance with Title I-D provisions. Funds are used, for example, to provide transition programs, dropout prevention programs, special programs to meet the unique academic needs of participating children and youth, and mentoring and peer mediation. Part E: Flexibility for Equitable Per-Pupil Funding ESEA Title I-E provides the Secretary with the authority to enter into demonstration agreements that provide flexibility to LEAs to deliver equitable per-pupil funding. The weighted per-pupil funding system must allocate substantially more funding to students from low-income families, English learners, and students with other characteristics associated with educational disadvantage selected by the LEA than is allocated to other students. Prior to the 2019-2020 school year, up to 50 LEAs were permitted to apply for the flexibility to consolidate eligible federal funds and state and local funds to create a single school funding system based on weighted per-pupil allocations (using weights or allocations to provide funding to schools). Beginning with the 2019-2020 school year, the number of LEAs permitted to participate under Title I-E is not capped provided a "substantial majority" of the LEAs participating in previous years have met program requirements. Part F: General Provisions Title I-F provides for the development of federal regulations for Title I programs and state administration of these programs. Part F also prohibits federal control of the "specific instructional content, academic achievement standards and assessments, curriculum or program of instruction" of states, LEAs, or schools, and clarifies that nothing in Title I is to be "construed to mandate equalized spending per pupil for a State, local educational agency, or school." Title II: Preparing, Training, and Recruiting High-Quality Teachers, Principals, and Other School Leaders Title II includes programs centered on teachers, school leaders (e.g., principals), literacy, and American history and civics education. Programs focused on teachers and school leaders support activities and initiatives such as professional development, staff recruitment and retention, performance-based compensation systems, and the establishment of a statewide science, technology, engineering, and mathematics (STEM) master teacher corps. Other Title II programs focus on literacy education, providing grants to support literacy efforts from birth through grade 12 and supporting school library programs, early literacy services, and the provision of high-quality books to children and adolescents. Title II also includes American history and civic education programs that provide academies for teachers and students to learn more about these topics and authorizes national activities related to American history and civics education. Title II's introductory text includes the purpose of the title, several definitions, and authorizations of appropriations for FY2017 through FY2020 for the programs authorized in Title II. Part A: Supporting Effective Instruction Part A authorizes a program of state grants that may be used for a variety of purposes related to preparation, training, recruitment, retention, and professional development of elementary and secondary education teachers and school leaders. The formula grants are allocated to SEAs based on student population and poverty counts, as well as a base guarantee determined by the amount each state received in FY2001 under antecedent programs. The base guarantee is being phased out through FY2022. SEAs may reserve a share of funds for administration and statewide services, such as teacher or principal support programs; preparation academies; licensing or certification reform; improving equitable access to effective teachers; reforming or improving teacher and principal preparation programs; training teachers in the use of student data; and technical assistance to LEAs. SEAs are required to suballocate at least 95% of grants to LEAs. Grants to LEAs are made based on student population and poverty counts. However, states are authorized to reserve up to 3% of the amount otherwise reserved for subgrants for LEAs for state-level activities focused on school leaders. Funds received by LEAs may be used for a variety of purposes including recruiting, hiring, and retaining effective teachers; teacher and school leader evaluation and support systems; professional development activities for teachers and principals; and class-size reduction. Part B: National Activities Subpart 1 authorizes the Teacher and School Leader Incentive Fund. This program provides competitive grants to LEAs, SEAs or other state agencies, the Bureau of Indian Education, or a partnership of one of these entities with one or more nonprofit or for-profit entities to develop, implement, improve, or expand performance-based teacher and principal compensation systems or human capital management systems for teachers, principals, and other school leaders in high-needs schools. Subpart 2 authorizes Literacy Education for All, Results for the Nation to improve student academic achievement in reading and writing from early education through grade 12. Under Subpart 2, competitive Comprehensive Literacy State Development Grants (Section 2222) are provided to SEAs. SEAs subsequently provide competitive subgrants to one or more eligible LEAs for the development and implementation of a comprehensive literacy instruction plan, professional development, and other activities. SEAs may also award competitive subgrants for early literacy services to one or more eligible early childhood education programs. In addition, SEAs may use funds to develop or enhance comprehensive literacy instruction plans. SEAs must ensure that at least 15% of funds are used to serve children from birth through age 5, 40% to serve children in kindergarten to grade 5, and 40% to serve children in grades 6 through 12. Funds reserved under Section 2222 for evaluation purposes must be used to conduct a national evaluation of the grant and subgrant programs authorized under Subpart 2 (Section 2225). Under the Innovative Approaches to Literacy program (Section 2226), the Secretary may award grants, contracts, or cooperative agreements to eligible entities to promote literacy programs that support the development of literacy skills in low-income communities through school library programs, early literacy services, and programs to provide high-quality books regularly to children from low-income communities. Subpart 3 authorizes American History and Civics Education programs. Section 2232 authorizes the Presidential and Congressional Academies for American History and Civics. Presidential Academies offer professional development opportunities for teachers of American history and civics. Congressional Academies provide a seminar or institute for outstanding students of American history and civics. Section 2233 authorizes national activities that provide competitive grants to promote new and existing evidence-based strategies to encourage innovative American history, civics and government, and geography instruction and learning strategies, and professional development for teachers and school leaders. Subpart 4 authorizes several programs related to educators, school leaders, technical assistance, and evaluation. Section 2242 authorizes the Supporting Effective Educator Development (SEED) program, which provides competitive grants to support nontraditional teacher certification or preparation routes, evidence-based professional development, professional development to support dual or concurrent enrollment, and professional enhancement activities that may lead to an advanced credential. Section 2243 authorizes the School Leader Recruitment and Support program, which provides competitive grants to improve the recruitment, placement, support, and retention of principals and other school leaders in high-need schools. Section 2244 authorizes a comprehensive center focused on students at risk of not attaining full literacy skills due to a disability. Funds may also be used to provide technical assistance or evaluate state and LEA activities under Title II-B. Section 2245 authorizes the STEM Master Teacher Corps program, which provides competitive grants to support the development of a statewide STEM master teacher corps or to support the implementation, replication, or expansion of effective STEM professional development programs. Part C: General Provisions Part C includes a supplement, not supplant provision that applies to funds provided under Title II. It also states that nothing in Title II authorizes the Secretary or any federal employee to mandate, direct, or control specific aspects of a state's, LEA's, or school's educational program, including, for example, instructional content, curricula, academic standards, academic assessments, staff evaluation systems, specific definitions of staff effectiveness, professional standards, licensing, or certification. Title II also states that none of the provisions in the title shall be construed to affect collective bargaining or other such agreements between school or district employees and their employers. Title III: Language Instruction for English Learners and Immigrant Students Title III authorizes programs that are focused on improving the academic attainment of ELs, including immigrant students. Under the Title III-A state grants program, funds are used at the state level to support activities such as consultation to develop statewide standardized entrance and exit procedures. Funds are used by LEAs for activities such as effective language instructional programs, professional development, and supplemental activities. Title III also authorizes two national programs, a professional development project and a clearinghouse related to the education of ELs. The introductory text to Title III authorizes appropriations for FY2017 through FY2020. Part A: English Language Acquisition, Language Enhancement, and Academic Achievement Act The English Language Acquisition program was designed to help ensure that ELs, including immigrant students, attain English proficiency, develop high levels of academic attainment in English, and meet the same challenging state academic standards that all students are expected to meet. The program was also designed to assist educators, SEAs, and LEAs in developing and implementing effective language instruction educational programs to assist in teaching ELs and developing and enhancing their capacity to provide effective instructional programs to prepare ELs to enter all-English settings. Title III-A also promotes parental, family, and community participation in language instruction educational programs for the parents, families, and communities of ELs. Formula grant allocations are made to SEAs based on the proportion of EL students and immigrant students in each state relative to all states. These amounts are weighted by 80% and 20%, respectively. SEAs may reserve not more than 5% of the funds received for working with LEAs to establish standardized statewide entrance and exit procedures, providing effective teacher and principal preparation and professional development activities, and planning evaluation, administration, and interagency coordination. SEAs are required to make subgrants to eligible entities based on the relative number of EL students in schools served by those entities. SEAs are also required to reserve not more than 15% of the state allocation to make grants to eligible entities that have experienced a significant increase in the percentage or number of immigrant students enrolled in schools in the geographic area served by the entity. Eligible entities receiving subgrants are required to use funds for three activities. First, funds must be used to increase the English language proficiency of ELs by providing effective language instructional programs that demonstrate the program is successfully increasing English language proficiency and student academic achievement. Second, funds must be used to provide effective professional development to school staff or community-based personnel. Third, funds must be used to provide and implement other "effective activities or strategies that enhance or supplement language instruction educational programs for ELs," including parent, family, and community engagement activities. Eligible entities receiving grants from the funds reserved specifically for immigrant students are required to use these funds to support activities that "provide enhanced instructional opportunities" for immigrant students. While Title III-A focuses on the education of ELs, Title I-A also contains provisions that specifically apply to this student population, as noted previously. For example, Title I-A requires that states establish English language proficiency standards that are derived from the domains of speaking, listening, reading, and writing and are aligned with challenging state academic standards. Under Title I-A, LEAs are required to assess English language proficiency annually using assessments aligned with the state English language proficiency standards. National Programs (Sections 3131 and 3202) A portion of Title III-A funds are reserved to support two specific national programs: (1) the National Professional Development Project (Section 3131), and (2) the National Clearinghouse for English Language Acquisition and Language Instruction Educational Programs (Section 3202). Under the National Professional Development Project, grants are awarded on a competitive basis for a period of up to five years to IHEs or public or private entities with relevant experience and capacity working in consortia with SEAs or LEAs to provide for professional development activities that will improve classroom instruction for ELs and help personnel working with these students to meet professional standards. The National Clearinghouse is responsible for collecting, analyzing, synthesizing, and disseminating information about language instruction educational programs for ELs and related programs. Part B: General Provisions Part B includes definitions relevant to Title III, statutory provisions authorizing the National Clearinghouse (discussed above), and the development of regulations for Title III. Title IV: 21st Century Schools Title IV authorizes a range of programs and activities including a block grant program, a program to support learning opportunities during non-school hours, programs to support charter schools and magnet schools, a family engagement program, an innovation and research program, programs to provide community support for student success, national activities for school safety, and programs focused on arts education, video programming for preschool and elementary school children, and gifted and talented education. Part A: Student Support and Academic Enrichment (SSAE) Grants Title IV-A authorizes SSAE grants to improve students' academic achievement by increasing the capacity of states, LEAs, schools, and local communities to (1) provide all students with access to a well-rounded education, (2) improve school conditions for student learning, and (3) improve the use of technology in order to increase the academic achievement and digital learning of all students. Formula grants are made to states based on their Title I-A funding from the prior year. States then make formula subgrants to LEAs. LEAs must use SSAE funds for three broad categories of activities: (1) supporting well-rounded educational opportunities, (2) supporting safe and healthy students, and (3) supporting the effective use of technology. If an LEA receives a grant of $30,000 or more, it must provide assurances that it will use at least 20% for activities to support a well-rounded education, at least 20% for activities to support safe and healthy students, and at least some of its funds to support the effective use of technology. If an LEA receives a grant of less than $30,000, it is only required to provide an assurance regarding the use of funds for at least one of the three categories. Part B: 21st Century Community Learning Centers Title IV-B supports activities provided during non-school hours that offer learning opportunities for school-aged children. Formula grants are made to SEAs based on their Title I-A funding from the prior year. States subsequently award grants to local entities (e.g., LEAs, community-based organizations) on a competitive basis for a period of three to five years. In awarding subgrants, SEAs are required to give priority to applicants proposing to target services to students who attend schools implementing CSI or TSI activities or other schools identified by the LEA in need of intervention support to improve student academic achievement and other outcomes; enroll students who may be at risk for academic failure, dropping out, or involvement with criminal or delinquent activities, or who lack "strong positive role models"; or target the families of such students. Local entities may use funds for activities that improve student academic achievement and support student success, such as academic enrichment learning programs, mentoring, tutoring, well-rounded education activities, programs to support a healthy and active lifestyle, technology education, expanded library service hours, parenting skills programs, drug and violence prevention programs, counseling programs, STEM programs, and programs that build career competencies and career readiness. Part C: Enhancing Opportunity Through Quality Charter Schools The Charter Schools Program (CSP) supports the startup of new charter schools and the replication and expansion of high-quality charter schools (Section 4303). It also assists charter schools in accessing credit to acquire and renovate facilities and includes a competitive grant program that provides per-pupil facilities aid (Section 4304). The CSP also provides funding for national activities to support the startup, replication, and expansion of charter schools; the dissemination of best practices; program evaluation; and stronger charter authorizing practices (Section 4305). Of the funds appropriated for Title I-C, 65% is provided for the startup, replication, and expansion of charter schools; 22.5% for national activities; and 12.5% for facilities financing. Part D: Magnet Schools Assistance Program Title IV-D provides grants to LEAs to plan and operate magnet schoolsâpublic schools of choice designed to encourage voluntary enrollment by students of different racial backgrounds. LEAs that are operating under a court-ordered desegregation plan or have voluntarily adopted a federally approved desegregation plan are eligible to receive grants to establish and operate magnet schools. In awarding grants, the Secretary is required to give priority to LEAs that demonstrate the greatest need for assistance, based on the expense or difficulty of effectively carrying out approved desegregation plans and the magnet school program; propose to implement a new or revise an existing magnet school program based on evidence-based methods and practices or replicate an existing magnet school with a demonstrated track record of success; plan to admit students by methods other than academic examinations, such as a lottery; and propose to increase racial integration by taking into account socioeconomic diversity in the design and implementation of the magnet school program. Part E: Family Engagement in Education Programs Title IV-E provides competitive grants to statewide organizations to establish family engagement centers. These centers promote parent education and family engagement in education programs and provide comprehensive training and technical assistance to SEAs, LEAs, and schools identified by SEAs and LEAs; organizations that support family-school partnerships; and other organizations that carry out such programs. Part F: National Activities Title IV-F authorizes a range of programs. Each is discussed briefly below. Subpart F-1 authorizes the Education Innovation and Research (EIR) program, which provides competitive grants to eligible entities to create, develop, implement, replicate, or take-to-scale entrepreneurial, evidence-based, field-initiated innovations to improve achievement and attainment for high-need students. Three types of grants (early phase, mid-phase, and expansion grants) are awarded primarily based on the past demonstrated success of the grantee in meeting these goals. Subpart F-2 authorizes the Promise Neighborhoods program (Section 4624) and the Full-Service Community Schools (FSCS) program (Section 4625). They were authorized by the ESEA prior to the enactment of the ESSA using authority previously available in Title V-D-1 to create programs of national significance. Both programs are designed to provide pipeline services, which deliver a "continuum of coordinated supports, services, and opportunities," to children in distressed communities. More specifically, the Promise Neighborhoods program provides a comprehensive, effective continuum of coordinated services in neighborhoods with high concentrations of low-income individuals, multiple signs of distress (e.g., high rates of poverty, academic failure, and juvenile delinquency), and schools implementing comprehensive or targeted support and improvement activities under Title I-A. The FSCS program provides grants to public elementary and secondary schools to participate in a community-based effort to coordinate and integrate educational, developmental, family, health, and other comprehensive services through community-based organizations and public and private partnerships. Access to such services is provided in schools to students, families, and the community. Subpart F-3 authorizes National Activities for School Safety. A portion of funds appropriated for these activities must be used for the Project School Emergency Response to Violence (Project SERV). Project SERV provides grants to LEAs, IHEs, and the Bureau of Indian Education (BIE) for BIE schools where the learning environment has been disrupted due to a violent or traumatic crisis. Funds for National Activities for School Safety that are not used for Project SERV may be used for other activities to improve student well-being during or after the school day. Subpart F-4 authorizes three programs focused on academic enrichment. Section 4642 authorizes competitive grants for arts education under the Assistance for Arts Education Program. Section 4643 authorizes grants to support educational and instructional video programming, accompanying support materials, and digital content to promote school readiness for preschool and elementary school children and their families through the Ready to Learn Programming program. Section 4644 authorizes the Javits Gifted and Talented Students Education Program, which provides grants to enhance the ability of elementary and secondary schools to identify gifted and talented students, including low-income and at-risk students, and meet their special educational needs. The section also supports the National Research Center for the Education of Gifted and Talented Children and Youth. Title V: Flexibility and Accountability Title V includes both funding transferability authority and programs to support rural education. Funding transferability authority allows states and LEAs to transfer federal funds from certain ESEA programs to other ESEA programs to enable them to address their particular needs. The Rural Education Assistance Program (REAP) provides additional resources to rural LEAs that might lack the resources to compete effectively for federal grants or might receive formula grant allocations that are too small to meet their intended purposes. The two rural education programs included in Title V provide LEAs with substantial flexibility in how they use their grant funds. Part A: Funding Transferability for State and Local Educational Agencies Funding transferability for states and LEAs is included under Title V-A to provide states and LEAs with the "flexibility to target Federal funds to the programs and activities that most effectively address" their "unique needs." In general, states are able to transfer funds from three formula grants programs that focus on teachers and school leaders, provide block grants, and provide after-school programming to formula grant programs focused on special populations (i.e., disadvantaged students, migratory students, neglected and delinquent students, and ELs). More specifically, states are permitted to transfer up to 100% of the funds allotted to them for state-level activities under Title II-A, Title IV-A, or Title IV-B to Title I-A, Title I-C, Title I-D, Title III-A, and one other ESEA program. Similarly, LEAs are also permitted to transfer funds from formula grant programs that focus on teachers and school leaders or provide block grants to formula grant programs focused on special populations. More specifically, LEAs are permitted to transfer 100% of the funds received under Title II-A or Title IV-A to Title I-A, Title I-C, Title I-D, Title III-A, and one other ESEA program. SEAs and LEAs are prohibited from transferring funds from Title I-A, Title I-C, Title I-D, Title III-A, and one other ESEA program to any other program. Part B: Rural Education Initiative Title V-B authorizes the Rural Education Achievement Program (REAP), which is designed to assist rural LEAs that may lack the resources to compete effectively for competitive grants and that may receive grants under other ESEA programs that are too small to be effective in meeting their specified purposes. Subpart 1 authorizes the Small, Rural School Achievement (SRSA) program, which (1) provides eligible rural LEAs with the flexibility to use funds received under Title II-A and Title IV-A to carry out local activities authorized under certain ESEA programs, and (2) authorizes a formula grant program for rural LEAs under which funds received may be used under several other ESEA programs. Eligibility for both the flexibility authority and the grant program is based on criteria such as average daily attendance or population density and locale codes. Subpart 2 authorizes the Rural and Low-Income School (RLIS) program, which provides formula grants to states. SEAs then make subgrants to eligible LEAs by formula or competition as determined by the SEA. LEA eligibility criteria include a school-age child poverty rate of 20% or more and meeting certain locale requirements. Similar to the SRSA grants, RLIS grants may be used under several other ESEA programs or for parent involvement activities. LEAs cannot receive both an SRSA grant and a RLIS grant. An LEA that is eligible for grants under both the SRSA and RLIS programs must select the grant program under which it will receive funds. Part C: General Provisions Part C contains several prohibitions against federal control of educational curricula, academic standards and assessments, or programs of instruction as a condition of receipt of funds under Title V. It also states that nothing in Title V shall be construed to mandate equalized spending per pupil for a state, LEA, or school. Title VI: Indian, Native Hawaiian, and Alaska Native Education Title VI provides funds specifically for the education of Indian, Native Hawaiian, and Alaska Native children. With respect to Indian education, the ESEA authorizes formula grants to LEAs, Indian tribes and organizations, BIE schools, and other entities to support elementary and secondary school programs that meet the unique cultural, language, and educational needs of Indian children. Funds are also provided for competitive grants to examine the effectiveness of services for Indian children and to provide support and training for Indian individuals to work in various capacities in the education system. Title VI also authorizes competitive grants to organizations with experience in operating Native Hawaiian programs to provide services to improve Native Hawaiian education. A Native Hawaiian Education Council is also authorized under Title VI. In addition, Title VI authorizes competitive grants for activities and services intended to improve education for Alaska Natives, such as the development of curricular materials and professional development. Part A: Indian Education Subpart 1 authorizes formula grants to eligible LEAs, Indian tribes and organizations, BIE schools, and other entities to support the development of elementary and secondary school programs for Indian students that are designed to meet the unique cultural, language, and educational needs of such students and ensure that all students meet their state's challenging academic standards. Grant allocations are determined based on the number of eligible Indian children served by the eligible entity and state average per pupil expenditures. Subpart 2, Special Programs and Projects to Improve Educational Opportunities for Indian Children, authorizes two competitive grant programs: (1) Improvement of Educational Opportunities for Indian Children and Youth (Section 6121) and (2) Professional Development for Teachers and Education Professionals (Section 6122). The former supports projects to develop, examine, and demonstrate the effectiveness of services and programs to improve educational opportunities and achievement of Indian children and youth. The latter focuses on efforts such as providing support and training to qualified Indian individuals to become effective teachers, school leaders, and administrators. Subpart 3, National Activities, authorizes funds for a variety of purposes including research, evaluation, and data collection and analysis. It also authorizes Grants to Tribes for Education Administrative Planning, Development, and Coordination (Section 6132), as well as for Native American and Alaska Native Language Immersion Schools and Programs (Section 6133). Subpart 4 establishes the National Advisory Council on Indian Education (NACIE; Section 6141) and authorizes a preference for Indian entities under programs authorized by Subparts 2 and 3. Part B: Native Hawaiian Education Part B authorizes competitive grants to Native Hawaiian educational or community-based organizations, charter schools, or other public or private nonprofit organizations with experience in operating Native Hawaiian programs, or consortia of these entities, to provide a wide variety of services intended to improve education for Native Hawaiians. In the awarding of grants, priority is to be given to activities that are intended to improve reading skills for Native Hawaiian students in grades K-3, meet the needs of at-risk children and youth, increase participation by Native Hawaiians in fields or disciplines in which they are underemployed, or increase the use of the Hawaiian language in instruction. Specifically authorized activities include early childhood education and care, services for Native Hawaiian students with disabilities, and professional development for educators. Title VI-B also establishes a Native Hawaiian Education Council, which provides coordination activities, technical assistance, and community consultations related to the educational needs of Native Hawaiians. Part C: Alaska Native Education Part C authorizes competitive grants for a variety of activities and services intended to improve education for Alaska Natives. Eligible grantees include Alaska Native organizations with relevant experience, Alaska Native organizations that lack relevant experience and partner with an SEA, LEA, or Alaska Native organization operating relevant programs; or an entity located in Alaska that is predominantly governed by Alaska Natives and meets other specified criteria. Authorized uses of funds include, for example, the development of curriculum materials that address the special needs of Alaska Native students, training and professional development, early childhood and parenting activities, and career preparation activities. Title VII: Impact Aid Title VII compensates LEAs for the "substantial and continuing financial burden" resulting from federal activities. These activities include federal ownership of certain lands, as well as the enrollments in LEAs of children of parents who work and/or live on federal land (e.g., children of parents in the military and children living on Indian lands). The federal government provides compensation via Impact Aid for lost tax revenue because these activities deprive LEAs of the ability to collect property or other taxes from these individuals (e.g., members of the Armed Forces living on military bases) even though the LEAs are obligated to provide free public education to their children. Title VII authorizes several types of Impact Aid payments. These include payments under Section 7002, Section 7003, Section 7007, and Section 7008, which are discussed briefly below. Payments Relating to Federal Acquisition of Real Property ( Section 7 002 ) . Section 7002 compensates LEAs for the federal ownership of certain property. To qualify for compensation, the federal government must have acquired the property, in general, after 1938 and the assessed value of the land at the time it was acquired must have represented at least 10% of the assessed value of all real property within an LEA's area of service. Payments for Eligible Federally Connected Children (Basic Support Payments, Section 7 003 ) . Section 7003 compensates LEAs for enrolling "federally connected" children. These are children who reside with a parent who is a member of the uniformed services living on or off federal property, reside with a parent who is an accredited foreign military officer living on or off federal property, reside on Indian lands, reside in low-rent public housing, or reside with a parent who is a civilian working and/or living on federal land. Two payments are made under Section 7003. Section 7003(b) authorizes "basic support payments" for federally connected children. Basic support payments are allocated directly to LEAs by ED based on a formula that uses weights assigned to different categories of federally connected children and cost factors to determine maximum payment amounts. Section 7003(d) authorizes additional payments to LEAs based on the number of certain children with disabilities who are eligible to receive services under the Individuals with Disabilities Education Act (IDEA). Payments are limited to IDEA-eligible children whose parents are members of the uniformed services (residing on or off federal property) and those residing on Indian lands. Construction ( Section 7 007 ) . Section 7007 provides funds for construction and facilities upgrading to certain LEAs with high percentages of children living on Indian lands or children of military parents. These funds are used to make formula and competitive grants. Facilities Maintenance ( Section 7 008 ) . Section 7008 provides funds for emergency repairs and comprehensive capital improvements at schools that ED currently owns but LEAs use to serve federally connected military dependent children. Title VIII: General Provisions Part A: Definitions Part A (Section 8101) provides definitions of a variety of terms used frequently throughout the ESEA, such as "local educational agency," "state educational agency," "evidence-based," "four-year adjusted cohort graduation rate," "professional development," "state," and "well-rounded education." Part B: Flexibility in the Use of Administrative and Other Funds Part B authorizes SEAs and LEAs to consolidate and jointly use funds available for administration under multiple ESEA programs. In order to qualify for this flexibility, SEAs must demonstrate that a majority of their resources are provided from nonfederal sources. LEAs need SEA approval to consolidate their funds. Part B also authorizes the consolidation of funds set aside for the Department of the Interior under various ESEA programs and the McKinney-Vento Homeless Education program. Part C: Coordination of Programs, Consolidated State and Local Plans and Applications Part C authorizes SEAs and LEAs to prepare single, consolidated plans and reports for all "covered" ESEA programs. In general, the covered programs are the ESEA formula grant programs administered via SEAs. Part D: Waivers Under this provision, the Secretary is authorized to waive most statutory and regulatory requirements associated with any program authorized by the ESEA, if specifically requested by an SEA or Indian tribe. LEAs may submit waiver requests through their SEA. The SEA may then submit the request to the Secretary if it approves the waiver. Schools must submit their waiver requests to their LEAs, which in turn submit those requests to the SEA. Part E: Approval and Disapproval of State Plans and Local Applications Part E includes provisions related to secretarial approval of state ESEA plans and SEA approval of LEA plans. In both cases, the Secretary and the SEA, respectively, have 120 days from the day the plan was submitted to make a written determination that the submitted plan does not comply with relevant requirements. If such a determination is made, among other actions, the state or LEA must be notified immediately of the determination, provided with a detailed description of the specific plan provisions that failed to meet the requirements, offered an opportunity to revise and resubmit the plan within 45 days of the determination being made, provided technical assistance upon request (from the Secretary or SEA, respectively), and provided with a hearing within 30 days of the plans resubmission. Part F: Uniform Provisions Subpart 1 contains provisions for the participation of private school students and staff in those ESEA programs where such participation is authorized. Under the relevant ESEA programs, services provided to private school students or staff are to be equitable in relation to the number of such students or staff eligible for each program; secular, neutral, and non-ideological, with no funds to be used for religious worship or instruction; and developed through consultation between public and private school officials. Provision is made for bypassing SEAs and LEAs that cannot or have not provided equitable services to private school students or staff, and serving private school students and staff in these areas through neutral, third-party organizations. Provision is also made for the submission of complaints regarding implementation of these requirements. Subpart 1 also prohibits federal control of private or homeschools, or the application of any ESEA requirement to any private school that does not receive funds or services under any ESEA program. It also states that no ESEA provisions apply to homeschools. Subpart 2 contains a wide range of provisions, including the following: a general definition of "maintenance of effort," as applied in several ESEA programs (Section 8521); a requirement that ED publish guidance on prayer in public schools, and a requirement that LEAs receiving ESEA funds certify to their SEAs that they do not limit the exercise of "constitutionally protected prayer" in public schools (Section 8524); a requirement that recipient SEAs, LEAs, and public schools have a "designated open forum" to provide equal access to the Boy Scouts (Section 8525); a prohibition on the use of ESEA funds to "promote or encourage sexual activity (Section 8526)"; a prohibition on federal control of educational curricula, content or achievement standards, building standards, or allocation of resources (Section 8526A and Section 8527); a requirement that LEAs receiving funds under any ED program provide to the armed services access to directory information on secondary school students, unless students or their parents request that such information not be released (Section 8528); a prohibition on federally sponsored testing of students or teachers, with some exceptions (Section 8529); an "Unsafe School Choice Option" under which students in states receiving ESEA funds who attend a "persistently dangerous" public school, or who are victims of violent crime at school, are to be offered the opportunity to transfer to a "safe" public school (Section 8532); a requirement related to the transfer of school disciplinary records (Section 8537); a requirement related to consultation between LEAs and Indian tribes and tribal organizations (Section 8538); a requirement that ED provide outreach and technical assistance to rural LEAs (Section 8539); and a prohibition related to the aiding and abetting of sex abuse (Section 8546). Subpart 3 includes teacher liability protection. This subpart provides limitations on liability for teachers in school for harm caused by an act or omission of the teacher on behalf of the school if certain conditions (e.g., the teacher was acting within the scope of his or her employment) are met. Subpart 4 contains gun-free requirements. Each state receiving funds under the ESEA must have a state law that requires LEAs to expel for at least one year any student who is determined to have brought a firearm to a school or possessed a firearm at a school under the jurisdiction of an LEA in the state. The chief administering officer of the LEA may modify this requirement on a case-by-case basis. In addition, no LEA may receive funds unless it has a policy requiring that any student who brings a firearm or weapon to a school served by the LEA is referred to the criminal justice or juvenile delinquency system. Subpart 5 prohibits smoking within indoor facilities providing kindergarten, elementary, or secondary education or library services to children, if the services are funded directly or indirectly by the federal government, or the facility is constructed, operated, or maintained using federal funds. Part G: Evaluations Part G authorizes ED to reserve 0.5% of the funds appropriated for ESEA programs, other than Titles I, for program evaluations if funds for this purpose are not separately authorized. Appropriations and Authorizations of Appropriations for Programs Authorized by theÂ ESEA Appropriations included in Table 1 are based on the most recent data available from ED's Budget Service Office. The amounts shown reflect any reprogramming or transfers of funds done by ED as of the time this table was prepared to provide the actual level of funding allocated to each program/activity. This list of "programs/activities" does not take into account the number of programs, projects, or activities that may be funded under a single line-item appropriation, so the actual number of ESEA programs, projects, or activities being supported through appropriations is not shown. It should be noted that ED considers all of the funds provided in an appropriations act for a given fiscal year, including advance appropriations provided for the following fiscal year, to be appropriations for the given fiscal year. For example, for the purposes of appropriations, ED considers all of the funds provided in the FY2019 appropriations act, including advance appropriations provided in FY2020, to be FY2019 appropriations. Table 2 provides ESEA appropriations for FY2016 and FY2017 to depict the transition from the ESEA as amended by the NCLB to the ESEA as amended by the ESSA. Programs authorized under the ESEA as amended by either the NCLB or the ESSA are included. Programs and activities are referred to by their names in the ESEA as amended by the ESSA if a program was in both the ESEA as amended by the ESSA and by the NCLB. If the program had a different name in the ESEA as amended by the NCLB, the name is included in parentheses. Programs are listed in the order in which they appear in the ESEA as amended by the ESSA if they also appeared in the ESEA as amended by the NCLB. For programs that appear in only the ESEA as amended by either the ESSA or the NCLB, programs are listed in the order they appear or appeared in law. For some programs that were funded in FY2016 but not in FY2017, it is possible that another program authorized in FY2017 provided funding for similar purposes. For example, the Elementary and Secondary School Counseling program was funded in FY2016 but not in FY2017. School counseling activities are an allowable use of funds under the SSAE program created under the ESSA. The same methodology as discussed above was used in determining appropriations amounts for each program. Table 3 provides the authorized level of appropriations for each program included in the ESEA that has a specified authorization of appropriations. The ESEA includes authorizations of appropriations for FY2017 through FY2020. Appendix. Glossary of Acronyms	Summary:	gov_report	1,024	null	54
crs_R45987	crs_R45987_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction This report provides background on Department of Defense's legacy Electronic Health Record (EHR) systems, reviews previous EHR modernization efforts, and describes DOD's process to acquire and implement a new EHR system known as MHS Genesis . DOD's new EHR system presents several potential issu es for Congress, including how to conduct oversight on a program that spans three federal departments, how to ensure an adequate governance structure for the program, and how to monitor the program's cost and effectiveness. Although this report mentions EHR modernization efforts by the Department of Veterans Affairs (VA) and U.S. Coast Guard (USCG), as well as DOD's Joint Operational Medical Information System (JOMIS); it does not provide an in-depth discussion of these programs. Appendix A provides a list of acronyms used throughout this report. Background For decades, the Department of Defense (DOD) has developed, procured, and sustained a variety of electronic systems to document the health care services delivered to servicemembers, military retirees, and their family members. DOD currently operates a number of legacy EHR systems and is, at the direction of Congress, in the process of implementing a new EHR called MHS Genesis. DOD's new EHR system is to be integrated with other EHR systems utilized by the VA, USCG, and civilian health care providers. DOD operates a Military Health System (MHS) that delivers to military personnel, retirees, and their families certain health entitlements under chapter 55 of Title 10, U.S. Code. The MHS administers the TRICARE program, which offers health care services worldwide to over 9.5 million beneficiaries in DOD hospitals and clinics â also known as military treatment facilities (MTFs) â or through participating civilian health care providers (i.e., TRICARE providers). There are currently 723 MTFs located in the United States and overseas that provide a range of clinical services depending on size, mission, and level of capabilities. Health care services delivered in MTFs or by TRICARE providers are documented in at least one of the following components of the DOD health record: service treatment record (STR) â documentation of all medical and dental care received by a servicemember through their military career; nonservice treatment record (NSTR) â documentation of all medical and dental care received by a nonservicemember beneficiary (i.e., military retiree, family member); and occupational health civilian employee treatment record (OHTR) â documentation of all occupational-related care provided by DOD (typically to DOD civilian or contractor employees). DOD maintains numerous legacy EHR systems that allow health care providers to input, share, and archive all documentation required to be in a beneficiary's health record. MTF or TRICARE providers can document medical and dental care directly in a DOD legacy EHR system, or can scan and upload paper records. Servicemembers and their families frequently change duty stations; the DOD health record can be accessed at most MTFs. However, sometimes beneficiaries are relocated to an area that lacks access to DOD's legacy EHR systems. In such cases, beneficiaries are required to maintain a paper copy of the health record. Brief History of DOD's Electronic Health Record (EHR) Since 1968, DOD has used various electronic medical information systems that automate and share patient data across its MTFs. Between 1976 and 1984, DOD invested $222 million to "acquire, implement, and operate various stand-alone and integrated health-care computer systems." Over the next three decades, DOD continued to invest and to implement numerous electronic medical information systems to allow health care providers to input and review patient data across all MTFs, regardless of military service or geographic location. In 1998, DOD began to incorporate a series of efforts to increase interoperability with the VA's EHR systems (see Figure 1 ). DOD Legacy EHR Systems DOD operates numerous legacy EHR systems as described below. Together, health care data documented and archived in the legacy EHR systems contribute to a beneficiary's overall medical and dental record, also known as the DOD health record. MHS Genesis is intended to replace these legacy systems and produce one comprehensive EHR. Composite Health Care System (CHCS) CHCS is a medical information system that has been in operation since 1993. CHCS primarily functions as the outpatient component of the EHR, with additional capabilities to order, record, and archive data for laboratory, radiology, and pharmacy services. Administrative functions such as patient appointment and scheduling, medical records tracking, and quality assurance checks, were also incorporated into CHCS. In March 1988, DOD awarded Science Applications International Corporation (SAIC) a contract to "design, develop, deploy, and maintain CHCS." SAIC continues to provide ongoing sustainment and technical support for CHCS. The estimated life-cycle cost of CHCS is $2.8 billion. Armed Forces Health Longitudinal Technology Application (AHLTA) After deploying CHCS, DOD identified a need for integrated health care data that could be portable and accessible at any MTF. CHCS was developed as a facility-specific system that archived its data using regional network servers. However, accessing data across each server became a "time- and resource-intensive activity." In 1997, DOD began planning for a new "comprehensive, lifelong, computer-based health care record for every servicemember and their beneficiaries." The program would be known as CHCS II, later renamed the Armed Forces Health Longitudinal Technology Application (AHLTA). DOD intended to replace CHCS with AHLTA and initially planned to deploy the new system in 1999. However, the program sustained several delays resulting from "failure to meet initial performance requirements" and changes to technical and functional requirements. The implementation plan was later revised to reflect AHTLA deployment from July 2003 to September 2007. In 2010, the Government Accountability Office (GAO) reported that DOD's AHLTA life-cycle cost estimate through 2017 would be $3.8 billion. Essentris Essentris is the inpatient component of the current EHR that has been used in certain military hospitals since 1987. As a commercial-off-the-shelf (COTS) product developed by CliniComp International, Inc. (CliniComp), Essentris allows health care providers to document clinical care, procedures, and patient assessments occurring in the inpatient setting, as well as in emergency departments. In 2009, DOD selected CliniComp to deploy Essentris at all military hospitals. This deployment was completed in June 2011. DOD maintains an ongoing contract with CliniComp and LOUi Consulting Group, Inc. to provide sustainment, technical and customer support, training, and ongoing updates for Essentris. Corporate Dental System (CDS) CDS, formerly named the Corporate Dental Application, is a web-based application that serves as DOD's current electronic dental record system. CDS allows DOD dental providers to document, review, and archive clinical information. The system also serves several administrative functions, such as tracking dental readiness of servicemembers, patient appointments and scheduling, and data reporting. CDS was initially developed as the Army's alternative dental solution to the AHLTA dental module. In 2000, all Army dental clinics implemented CDS. By 2016, Navy and Air Force dental clinics also transitioned to CDS as their electronic dental record system. In the same year, DOD awarded a four-year, $30 million contract to the Harris Corporation to sustain CDS. Paper Medical Records Paper medical records are another component of the DOD health record. While certain health care data are recorded and archived electronically, some administrative processes and clinical documentation exist only on paper forms. For example, clinical documentation from TRICARE providers, accession medical records, or medical evacuation records are usually in paper form. In such cases, DOD policy requires the scanning and archiving of paper medical records in an electronic repository called the Health Artifact and Image Management Solution (HAIMS). After being digitized, certain paper medical records are submitted to the National Archives and Records Administration while other documents are disposed of locally. Other DOD legacy systems document and archive various administrative and clinical data, such as: Referral Management System (RMS). An administrative information system that allows MTF staff to create and track referrals between health care providers. HAIMS. An electronic repository that stores DOD health care data, including digitally transmitted or scanned medical documentation. Data housed in HAIMS is also incorporated into a servicemember's official service treatment record , which is accessible to the VA. Medical Readiness Tracking Systems. Each military department utilizes an electronic information system that documents and tracks certain medical and dental readiness requirements, such as periodic health assessments, immunizations, dental exams, and laboratory tests. Theater Medical Information ProgramâJoint (TMIP-J). A suite of electronic systems, including modules for health care documentation and review, patient movement, and medical intelligence used in deployed or austere environments. Joint Legacy Viewer (JLV). A web-based, read-only application that allows DOD and VA health care providers to review certain real-time medical data housed in each department's EHR systems. Armed Forces Billing and Collection Utilization Solution (ABACUS). A web-based electronic system that allows MTFs to bill and track debt collection for health care services provided to certain beneficiaries. Developing an EHR Modernization Solution After Operation Desert Storm concluded in 1991, concern about deficient interoperability between DOD and VA health record systems began to grow. A number of committees and commissions issued reports highlighting the need for DOD and VA to standardize record-keeping; to improve health data sharing; and to develop a comprehensive, life-long medical record for servicemembers. Table 1 summarizes their recommendations. Between 1998 and 2009, DOD and VA established various methods to exchange limited patient health information across both departments, including: Federal Health Information Exchange (FHIE). Completed in 2004, the FHIE enables monthly data transmissions from DOD to VA comprised of patient demographics, laboratory/radiology results, outpatient pharmacy, allergies, and hospital admission data. Bidirectional Health Information Exchange (BHIE). Completed in 2004, the BHIE enables real-time, two-way data transmissions (DOD-to-VA and VA-to-DOD) comprised of FHIE information, additional patient history and assessments, theater clinical data, and additional inpatient data. Clinical Data Repository/Health Data Repository (CHDR). Completed in 2006, CHDR enables real-time, two-way data transmissions comprised of pharmacy and drug allergy information and a capability to add information to the patient's permanent medical record in the other department's repository. Virtual Lifetime Electronic Record (VLER). Initiated in 2009, the VLER enables real-time, health information exchange between DOD and VA, as well as certain civilian health care providers. While these information exchange systems enable DOD and VA health care providers to view or modify limited health care data, both departments continue to operate separate, disparate health record systems. Congress Mandates Interoperability In 2008, Congress began legislating mandates for DOD and VA to establish fully interoperable EHR systems that would allow for health care data sharing across departments. Section 1635 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2008 ( P.L. 110-181 ) directed DOD and VA to jointly: (1) "develop and implement electronic health record systems or capabilities that allow for full interoperability of personal health care information," and (2) "accelerate the exchange of health care information" between both departments. Additionally, Congress directed the establishment of an interagency program office (IPO) that would serve as a "single point of accountability" for rapid development and implementation of EHR systems or capabilities to exchange health care information. The FY2008 NDAA also directed the IPO to implement the following, no later than September 30, 2009: "â¦electronic health record systems or capabilities that allow for full interoperability of personal health care information between the Department of Defense and Department of Veterans Affairs, which health records shall comply with applicable interoperability standards, implementation specifications, and certification criteria (including for the reporting quality measures) of the Federal Government." In the conference report accompanying the Department of Defense Appropriations Act, 2008 ( H.Rept. 110-434 , P.L. 110-116 ), Congress also directed DOD and VA to "issue a joint report" by March 3, 2008, that describes the "actions being taken by each department to achieve an interoperable electronic medical record (EMR)." On April 17, 2008, the IPO was established with temporary staff from DOD and VA. On December 30, 2008, the Deputy Secretary of Defense delegated oversight authority for the IPO to the Under Secretary of Defense for Personnel and Readiness (USD[P&R]). The FY2008 NDAA also directed the Secretary of Defense (SECDEF) to appoint the IPO Director, with concurrence of the Secretary of Veterans Affairs (SECVA); and the SECVA to appoint the IPO Deputy Director, with concurrence of the SECDEF. Establishing Interoperability Goals To meet Congress's mandate on interoperability, the IPO established a mutual definition of interoperability. They posited it as the "ability of users to equally interpret (understand) unstructured or structured information which is shared (exchanged) between them in electronic form." Shortly after, both departments identified and adopted six areas of interoperability capabilities intended to meet the requirements and deadline established by Congress: Expand Essentris implementation across DOD. Demonstrate the operation of the Partnership Gateways in support of joint DOD and VA health information sharing. Enhance sharing of DOD-captured social history with VA. Demonstrate an initial capability for DOD to scan medical documents into the DOD EHR and forward those documents electronically to VA. Provide all servicemembers' health assessment data stored in the DOD EHR to the VA in such a fashion that questions are associated with the responses. Provide initial capability to share with the VA electronic access to separation physical exam information captured in the DOD EHR. As a result of each department's work on interoperable capabilities, DOD and VA reported to Congress in 2010 that all requirements for "full" interoperability were met. The Integrated EHR Initiative DOD and VA continued to work on integrating their respective EHR systems through individual initiatives, while considering a larger EHR modernization strategy. Three strategy options were considered: 1. develop a new, joint EHR; 2. upgrade and adopt an existing legacy system across both departments (i.e., AHLTA or VistA); or 3. pursue separate solutions that would have "common infrastructure with data interoperability." In March 2011, the SECDEF and SECVA agreed to work cooperatively to develop an integrated electronic health record (called the iEHR ) that would eventually replace each department's legacy systems. The IPO was assigned the oversight role for the iEHR initiative, which was then set to begin implementation no later than 2017. In February 2013, SECDEF and SECVA announced that they would no longer pursue the iEHR initiative. In making this decision, DOD and VA determined that the initial cost estimates for implementing the iEHR would be "significant," given the "constrained Federal Budget environment." After reevaluating their approach and considering alternatives, both departments decided to pursue other ongoing efforts to "improve data interoperability" and to preserve and develop separate EHR systems with a core set of capabilities that would allow for integrated sharing of health care data between DOD, VA, and private sector providers. Congressional Mandate for an EHR After DOD and VA announced their change to the iEHR strategy in 2013, Congress expressed its sense that both departments had "failed to implement a solution that allows for seamless electronic sharing of medical health care data." Given some Members' apparent frustration, Congress established a new deadline for both departments to deploy a new EHR solution. Section 713(b) of the NDAA for FY2014 ( P.L. 113-66 ) directed DOD and VA to implement an interoperable EHR with an "integrated display of data, or a single electronic health record" by December 31, 2016 (see text box below). The law also required DOD and VA to "jointly establish an executive committee" to support development of systems requirements, integration standards, and programmatic assessments to ensure compliance with Congress's direction outlined in Section 713(b). MHS Genesis Given Congress's new mandate for both departments to implement an interoperable EHR, DOD conducted a 30-day review of the iEHR program in order to "determine the best approach" to meeting the law. While conducting its review, DOD identified two EHR modernization options that would support healthcare data interoperability with the VA: (1) adopt VistA and (2) acquire a commercial EHR system. DOD Acquisition Strategy On May 21, 2013, the Secretary of Defense issued a memorandum directing the department's pursuit of "a full and open competition for a core set of capabilities for EHR modernization." The directive also delegated certain EHR responsibilities to various DOD leaders. Under Secretary of Defense for Acquisition, Technology, and Logistics (USD[AT&L]), whose office was later reorganized as the Under Secretary of Defense for Acquisition and Sustainment (USD[A&S]). Responsible for exercising milestone decision authority (MDA) and also holds technical and acquisition responsibilities for health records interoperability and related modernization programs; Under Secretary of Defense for Personnel and Readiness (USD[P&R]). Lead coordinator on DOD health care interactions with the VA. Assistant Secretary of Defense for Health Affairs (ASD[HA]). Responsible for functional capabilities of the EHR. Given the significant investments required to modernize DOD's EHR, MHS Genesis is a designated Defense B usiness S ystem (DBS). Because it is a DBS, certain decision reviews and milestones are required as part of the overall acquisition process. DBS programs are subject to significant departmental and congressional oversight activities. Requirements Development and Solicitation From June 2013 to June 2014, USD(AT&L) directed the Defense Healthcare Management Systems Modernization Program Management Office (DHMSM PMO) to oversee the EHR requirements development process, draft an acquisition strategy and request for proposal (RFP), and conduct activities required by DOD policy for DBS acquisitions. The ASD(HA) directed the Defense Health Agency (DHA) to establish various working groups to identify and develop the clinical and nonclinical functional requirements for the new EHR. The DHA led each working group, which included representatives from each military service medical department. Keeping in alignment with DOD's guiding principles for EHR modernization (see Figure 2 ), the working groups identified approximately 60 overarching capabilities to be required of a new EHR. An initial draft RFP incorporated functional capability requirements with certain technical requirements for interoperability, information security, and suitability with DOD infrastructure. The DHMSM PMO published three draft RFPs between January and June 2014 for interested contractors to review, provide comments, and submit questions for clarification on functional requirements. Additionally, the DHMSM PMO hosted four industry days that allowed interested contractors to "enhance their understanding of the DHMSM requirement," gain insight on DOD's requirements development process, and provide feedback on particular aspects of the draft RFP. These activities also allowed the DHMSM PMO to conduct market research that would inform further revision of MHS Genesis functional requirements or its overall acquisition strategy. Between June 2014 and August 2014, DOD leaders certified that certain acquisition milestones had been achieved, allowing DOD to proceed with the solicitation process, including finalizing and approving all user-validated function requirements, approving the overall acquisition strategy, and issuing an authority to proceed . On August 25, 2014, DOD issued its official solicitation for proposals. The solicitation period concluded on October 9, 2014. Source Selection Process The source selection process took place from October 2014 to July 2015. DOD reportedly had received five proposals during the solicitation period. Most of the proposals were from partnered vendors consisting of health information management, electronic medical records, information technology, and program management organizations. These partnerships included: Allscripts, Computer Sciences Corporation, and Hewlett-Packard; IBM and Epic Systems; Cerner, Leidos, and Accenture Federal; PricewaterhouseCoopers, General Dynamics, DSS, Inc., MedSphere; and InterSystems. Consistent with DOD source selection procedures, DOD experts were assigned to review and apply the evaluation criteria published in the RFP, to each proposal. Figure 3 illustrates a general overview of the evaluation and source selection process. Contract Award On July 29, 2015, DOD awarded the MHS Genesis contract to Leidos Partnership for Defense Health (LPDH) to replace its legacy EHR systems with a commercial-off-the-shelf (COTS) EHR system. The contract has a potential 10-year ordering period that includes a two-year base period, two three-year optional ordering periods, and an award term period of up to two years. The initial total award ceiling for MHS Genesis was $4.3 billion. On June 15, 2018, DOD approved a contract modification to increase the award ceiling by $1.2 billion. According to the Justification and Approval for Other than Full and Open Competition documentation, the purpose of this increase was to "support the incorporation of the United States Coast Guard (USCG) into the [DOD] MHS Genesis Electronic Health Record (EHR) implementation" and "establish a common standardized EHR baseline with the USCG and the [VA]." The current award ceiling for MHS Genesis is more than $5.5 billion. Leidos Partnership for Defense Health (LPDH) Leidos leads LPDH with its core partners: Accenture Federal Services, Cerner, and Henry Schein One. The full partnership, through sub-contracts of the core partners, is comprised of over 34 businesses (see Figure 4 ). Capabilities According to a redacted version of DOD's contract award documents, LPDH is required to meet the following overarching contract requirements: "unify and increase accessibility of integrated, evidence-based healthcare delivery and decision making"; "support the availability of longitudinal medical records for 9.6 million DoD beneficiaries and approximately 153,000+ MHS personnel globally"; "enable the application of standardized workflows, integrated healthcare delivery, and data standards for improved and secure electronic exchange of medical and patient data between the DoD and its external partners, including the [VA] and other Federal and private sector healthcare providers"; and "leverage data exchange capabilities in alignment with the [IPO] for standards-based health data interoperability and secure information sharing with external partners to include the VA." Additionally, there are over 95 specific capability requirements across four concepts of operations (i.e., health service delivery, health system support, health readiness, and force health protection) that MHS Genesis must support (see Appendix B ). Governance Ultimately, the Secretary of Defense is accountable for MHS Genesis. Various DOD entities, described below, have assigned responsibilities for MHS Genesis oversight, implementation, and sustainment (see Figure 5 ). While each entity has a separate chain of command, DOD chartered numerous governance groups to synchronize efforts across the department, delegate certain decisionmaking authorities, and provide direction on implementation and use of MHS Genesis. Program Executive Office, Defense Healthcare Management Systems (PEO DHMS) PEO DHMS was established in 2013. Its mission is to "transform the delivery of healthcare and advance data sharing through a modernized electronic health record for service members, veterans, and their families." It responsible for implementing MHS Genesis as the assigned acquisition authority and currently reports to the Under Secretary of Defense for Acquisition and Sustainment (USD[A&S]). Under the PEO DHMS, three program management offices (PMOs) are tasked with modernizing DOD's EHR system and ensuring health data interoperability with the VA. DOD Healthcare Management System Moderniza tion (DHMSM) PMO. "Oversees the deployment of MHS Genesis and the operations and sustain of the Joint Legacy Viewer." DOD/VA Interagency Program Office (IPO). "Oversees the efforts of the DOD and VA to implement national health data standards for interoperability." Joint Operational Medicine Information Systems (JOMIS) PMO. "Develops, deploys, and sustains MHS Genesis and other integrated operational medicine information systems to deployed forces." Defense Health Agency (DHA) In 2013, the Secretary of Defense established the DHA to manage the TRICARE program; execute appropriations for the Defense Health Program; coordinate management of certain multi-service health care markets and MTFs in the National Capital Region; exercise management responsibility for shared services, functions, and activities within the Military Health System; and support DOD's medical mission. DHA is a designated Combat Support Agency that is scheduled to soon administer and manage all MTFs. DHA serves as the lead entity for MHS Genesis requirements development, in coordination with the military service medical departments, and currently reports to the ASD(HA). Military Service Medical Departments The military service medical departments are established under each respective military department to organize, train, and equip military medical personnel, maintain medical readiness of the Armed Forces, and administer, manage and provide health care in MTFs. The medical departments are led by a Surgeon General, who also functions as the principal advisor to their respective military service secretary and service chief for all health and medical matters. The three service medical departments are the Army Medical Command (MEDCOM), the Navy Bureau of Medicine and Surgery (BUMED), and the Air Force Medical Service (AFMS). Each service medical department provides subject-matter expertise, functional support, and consultation to the DHMSM PMO. Senior Stakeholders Group (SSG) and the Configuration Steering Board (CSB) The SSG and the CSB are DOD-chartered working groups established to provide oversight, recommendations, and "direction on health-related acquisition programs," including those within PEO DHMS. The SSG is chaired by the USD(A&S) and is responsible for receiving updates on DHMS acquisition programs, ensuring adherence to DOD's EHR guiding principles, and providing recommendations and feedback on key EHR and interoperability decisions. The CSB is co-chaired by the USD(A&S) and the USD(P&R) and is specifically responsible for oversight on DHMSM and JOMIS programs. Figure 6 outlines the membership of each group. Executive Steering Board (ESB) The ESB, previously named the Functional Champion Leadership Group (FLCG), is a governance body led by the DHA's Chief Health Informatics Officer with representation from each service medical department. The ESB's role is to: consider changes to standardized clinical, business, or technical processes; serve as a forum to validate, prioritize, and recommend modifications or new functional requirements for MHS Genesis; and oversee numerous working groups of subject matter experts and end-users. Office of the Chief Health Informatics Officer (OCHIO) The OCHIO represents the "voice of the customer" to PEO DHMS. The office solicits input and recommendations from the ESB and coordinates with PEO DHMS to revise or modify MHS Genesis contract requirements. OCHIO is also responsible for "change management, early adoption activities, standardization of functional workflows, functional collaboration with the [VA], management of configuration changes to MHS Genesis, adjudication of functional trouble tickets, sustainment training, current state workflow assessments, and coordination of DHA policy to support the use of MHS Genesis." Deployment DOD is using a phased implementation strategy to deploy MHS Genesis. Deployment began with its initial operational capability (IOC) sites in 2017. After the IOC sites, MHS Genesis is to be deployed at over 600 medical and dental facilities, grouped geographically into 23 waves (see Appendix F ). DOD anticipates "full operational capability" and implementation of MHS Genesis at all MTFs by the end of 2024. Pre-Deployment Activities During the approximately 17 months between the July 2015 contract award date and Congress's December 2016 deadline to implement a new EHR system, DOD conducted certain pre-deployment activities (e.g., systems engineering, systems integration, and testing prior to deploying MHS Genesis). DOD acquisition policies and certain contract requirements mandate these activities. Some of the initial requirements include: contractor site visits to "analyze operations, infrastructure, and detailed information for EHR System design and testing"; gap analyses between existing site infrastructure, system requirements, and the contractor's system architecture; development of solutions to fill identified infrastructure gaps; testing interoperability with legacy systems; delivering various contractor plans to the government (e.g., integrated master plan, risk management plan, data management plan, disaster recovery plan, and cybersecurity vulnerability management plan); EHR system testing in government approved labs, including those conducted by the contractor, government independent testing and evaluation teams, and operational test agencies; and receiving authorization to proceed (ATP) with limited fielding at the IOC sites and to conduct an Initial Operational Test and Evaluation (IOT&E). Concurrently, the DOD Inspector General (DODIG) conducted a performance audit on the DHMSM PMO. The purpose of the audit was to determine if DOD had approved system requirements and if the MHS Genesis acquisition strategy was "properly approved and documented." The audit was conducted from June 2015 through January 2016, with a final report issued on May 31, 2016. Overall, the DODIG found that the MHS Genesis requirements and acquisition strategy were properly approved and documented. However, the report raised concerns about the program's execution schedule (i.e., implementation timeline) not being "realistic" to meet Congress's deadline. The DODIG recommended that the PEO DHMS conduct a "schedule analysis" to determine if IOC would be achievable by December 2016, and to continue monitoring program risks and report progress to Congress quarterly. In response to the DODIG's recommendation, the PEO DHMS asserted, "we remain confident we will achieve [IOC] later this year in accordance with the NDAA." Initial Deployment As part of the implementation strategy, DOD selected MTFs in the Pacific Northwest as its IOC sites (see Table 2 ). On February 9, 2017, MTFs at Fairchild Air Force Base, Washington, were the first sites to transition to MHS Genesis. The purpose of fielding MHS Genesis at the IOC sites before full deployment was to observe, evaluate, and document lessons-learned on whether the new EHR was usable, interoperable, secure, and stable. DOD used several evaluation methods to measure MHS Genesis success at the IOC sites, including the Health Information Management Systems Society's (HIMSS) Electronic Medical Record Adoption Models (EMRAM) and the DOD IOT&E. The results of these assessments would later inform PEO DHMS in its decision to proceed with further deployments. EMRAM Findings The EMRAM includes two commercially developed assessment tools that health systems and facilities can use to measure adoption of an electronic medical record (EMR) system. The general EMRAM is for inpatient facilities and O-EMRAM is for outpatient facilities. Both tools consist of a self-administered survey, which is then analyzed by HIMSS to produce an EMRAM score. The score, ranging from Stage 0 to Stage 7, describes the level of adoption and utilization of an EMR within a health care organization (see Appendix C ). Generally, Stage 0 indicates minimal or no EMR adoption in a health care facility or clinic, whereas Stage 7 indicates complete EMR adoption, including demonstrated data sharing capabilities and eliminated use of paper charts. Prior to the go-live dates at the IOC sites and while using its legacy systems, DOD's average score was 1.59 for the EMRAM and 2.38 for the O-EMRAM. After all IOC sites transitioned to MHS Genesis, DOD reassessed each IOC site and observed increased EMRAM scores (see Figure 7 and Figure 8 ). MTFs at Fairchild Air Force Base received a score of 6.13 on the O-EMRAM, whereas all other IOC sites scored 5.04. In comparison to U.S. civilian hospitals, the IOC sites scored higher than the national average for the EMRAM (2.00) and O-EMRAM (3.00). However, media reports on EMRAM scoring trends at the end of 2017 note that 66.7% of U.S. hospitals participating in the EMRAM reached "either Stage 5 or Stage 6." For the O-EMRAM, most participating outpatient facilities remained at Stage 1. IOT&E Findings DOD policy requires DBS programs to undergo an IOT&E to determine program or systems effectiveness and suitability. IOT&E findings provide the USD(A&S) and relevant acquisition or functional leadership with recommendations on whether a program, generally those with total contract values exceeding certain thresholds, should proceed with further implementation. Between September 2017 and December 2017, the Joint Interoperability Test Command (JITC) conducted an IOT&E at each IOC site, with the exception of Madigan Army Medical Center (MAMC). PEO DHMS postponed the MAMC IOT&E to 2018 in order to resolve issues identified at the other IOC sites. While at each site, the JITC conducted initial cybersecurity testing, evaluated interoperability data, observed MTF staff performing day-to-day tasks using MHS Genesis, and administered user surveys on performance and suitability. The Director of Operational Test and Evaluation (DOT&E) reviewed JITC's IOT&E findings and applied them to the following criteria: Does MHS Genesis provide the capabilities to manage and document health-related services? Do MHS Genesis interfaces support or enable accomplishment of mission activities and tasks? Does MHS Genesis usability, training, support, and sustainment ensure continuous operations? On April 30, 2018, DOT&E issued a partial IOT&E report asserting that MHS Genesis was "neither operationally effective nor operationally suitable." DOT&E found that: MHS Genesis is not operationally effective because it does not demonstrate enough workable functionality to manage and document patient care. Users successfully performed only 56 percent of the 197 tasks used as Measures of Performance. MHS Genesis is not operationally suitable because of poor system usability, insufficient training, and inadequate help desk support. Survivability is undetermined because cybersecurity testing is ongoing. See Appendix D for IOT&E summary results by measure of effectiveness and measure of performance evaluation. Based on these preliminary findings, DOT&E recommended to the USD(A&S) a delay in further deployment of MHS Genesis until a full IOT&E was completed and the DHMSM PMO corrected "outstanding deficiencies." Additional recommendations for the DHMSM PMO included: "Fix all Priority 1 and 2 [incident reports] with particular attention given to those that users identified as potential patient safety concerns, and verify fixes through operational testing. Improve training and system documentation for both users and Adoption Coaches. Increase the number of Adoption Coaches and leave them on site until users are more comfortable with the new processes. Complete cybersecurity operational testing and continue to fix known deficiencies. Work with users to document, reduce, and standardize operational workarounds. Improve interoperability, focusing on interfaces identified as problematic during IOT&E. Monitor reliability and availability throughout the system lifecycle. Work with the Defense Health Agency and DISA to isolate network communications problems and reduce latency. Conduct operational testing at MAMC to evaluate untested functionality and corrective actions taken by the [DHMSM] PMO. Conduct follow-on operational testing at the next fielding site to evaluate revised training and Go-Live process improvements." On November 30, 2018, DOT&E issued a final IOT&E report, incorporating results from delayed testing at MAMC. DOD has not made the final report publicly available. DOT&E acknowledges ongoing improvements, but maintains that MHS Genesis is "not yet effective or operationally suitable." A summary of the IOT&E released by the department describes several ongoing issue themes previously identified and described in the partial IOT&E report (e.g., continued incident reports, staff training, change management, and workflow adoption). With regard to cybersecurity, DOT&E described MHS Genesis as "not survivable in a cyber-contested environment." In conjunction with the IOT&E, DOD "successfully executed" three cyberspace test attacks against MHS Genesis, highlighting potential security gaps and vulnerabilities with the new EHR system. Notwithstanding DOT&E's findings and recommendations, the DOD Chief Information Officer issued a conditional Authorization to Operate , valid for 12 months. Additionally, PEO DHMS concurred with DOT&E's recommendation for a follow-on operational test and evaluation "at the next fielding to evaluate corrective actions and revised training, to inform future fielding decisions." Selected Initial Deployment Issues Since February 2017, DOD has documented numerous issues requiring mitigation strategies prior to deploying the first wave. Selected issues reported by various DOD entities, LPDH, MHS Genesis users, and media outlets are summarized below. Trouble Ticket Backlog During the initial deployment, DHMSM PMO established a single process for all IOC sites to identify, document, and report MHS Genesis issues. Users encountering system inconsistencies, technical errors, or clinical inaccuracies must submit a "trouble ticket" to a global service center (GSC). Users can also submit recommendations for changes to current workflows or system configurations to the GSC, as well as through their chain of command. The GSC is a contracted service that reviews, sorts, and assigns technical trouble tickets to LDPH or its sub-contractors for resolution. The GSC also assigns trouble tickets relating to functional capabilities, requirements, or workflows to DHMSM PMO or DHA for further review and adjudication. In April 2018, PEO DHMS reported that 1,000 of approximately 7,000 total trouble tickets generated by users throughout all IOC sites from January 2018 to that point had been resolved. Of the remaining trouble tickets, DHMSM PMO approved 2,000 for "work by the Leidos Partnership," while 2,500 were in review for further adjudication. CRS is unable to ascertain the status of the remaining 1,500 trouble tickets and the timeline in which they may have been resolved. In December 2018, PEO DHMS estimated that 3,607 open trouble tickets remained for resolution. As of October 14, 2019, PEO DHMS estimated 3,238 open trouble tickets from the IOC sites and 787 open trouble tickets from the first wave sites remained for resolution. Lengthy Issue Resolution Process MHS Genesis users at IOC sites described the issue resolution process as lengthy and lacking transparency. User concerns included: (1) tickets submitted to the GSC were resolved in a period of time that was "not acceptable for all issues"; (2) the length of time for decisionmakers to determine a solution; and (3) discovering that a solution had been implemented during a periodic system update, rather than being notified by DHMSM PMO, DHA, or LPDH. Unlike DOD's legacy systems, MHS Genesis is to be a standardized EHR platform across all military treatment facilities and is not customizable for each site. Technical or functional changes to MHS Genesis require DHA-led working groups and DHMSM PMO to review and approve such changes before directing LPDH to implement a solution. Changes exceeding the scope of the MHS Genesis contract require additional review, resourcing, and approval by the acquisition authority. Inadequate Staff Training Users reported that initial training provided four months prior to go-live was inadequate and did not allow super users to "absorb/fully grasp one role before being introduced to the next role." Staff members were required to complete computer-based training, followed by instructor-led courses. Course curricula varied by user roles (e.g., clinician, clinical support, administrative staff). Users reported that the LPDH training focused primarily on navigating the various modules and features of MHS Genesis and did not include training on clinical or administrative workflows. For example, primary care clinic nurses were trained on the applicable MHS Genesis modules that would likely be found in the primary care setting. They said they were not trained on accessing other modules that would typically be used outside of the primary care setting, as part of a patient assessment or development of a treatment plan. Capability Gaps and Limitations Users reported having little or no ability to track military medical and dental readiness requirements in MHS Genesis. Pre-built reports to monitor certain health care quality and access metrics were available to MTF staff. Users defaulted to developing local, "home-grown" work-around tools in Microsoft Office products in order to meet specific DOD and military service requirements for tracking medical and dental readiness. For example, certain dental data documented in MHS Genesis were not available for data-mining or viewing in legacy dental readiness reporting systems. To compensate for this, dental clinic staff at each IOC site transcribed or manually maintained dental readiness reports by reviewing dental data in both Dentrix (MHS Genesis' dental module) and CDS (the legacy dental system). Future Deployments In reviewing the experience and challenges documented during MHS Genesis deployment at the IOC sites, DOD noted that they "captured lessons learned, collaborated with our stakeholders, and optimized the system to enhance user adoption. Specific areas of improvement include network optimization, change management, and training enhancements." As such, DOD commenced the first wave of MHS Genesis deployments in September 2019. The deployment began with four MTFs in California and Idaho. Each wave is to last 18 months and is to include three major phases: pre-deployment planning with each MTF (3 months), deployment activities (12 months), and post go-live activities (3 months). As outlined in DOD's deployment schedule (see Appendix F ), a new wave is to begin every three months at designated MTFs through late 2022, with wave 23 scheduled to conclude in 2024. Issues for Congress Congressional Oversight Since mid-1980s, Congress has kept abreast of DOD's efforts to implement, sustain, or modernize its EHR systems. Previous congressional oversight activities have primarily focused on (1) understanding DOD's EHR modernization strategy and how the strategy would integrate interoperability and improve coordination with the VA, or (2) describing certain barriers that delayed previous modernization initiatives. Currently, 12 congressional committees may exercise oversight authority of the broader EHR modernization efforts taking place in DOD, VA and USCG. The committees include: House Appropriations Committee. House Armed Services Committee. House Committee on Oversight and Reform. House Committee on Transportation and Infrastructure. House Veterans Affairs Committee. Senate Appropriations Committee. Senate Armed Services Committee. Senate Committee on Commerce, Science, and Transportation. Senate Committee on Homeland Security and Governmental Affairs. Given the complexity, size, and timeline of DOD's EHR modernization effort, as well as parallel efforts by the USCG and VA, a coordinated oversight strategy may be necessary. Such a strategy could allow Congress to conduct a wide range of oversight activities without creating redundancies for committee staff and executive branch officials and could facilitate information-sharing among congressional stakeholders. Since the initial deployment of MHS Genesis, there have been no congressional oversight hearings held solely on DOD's EHR modernization effort. On June 20, 2018, the House Committee on Veterans' Affairs established the Subcommittee on Technology Modernization. The role of the new subcommittee is to "focus on conducting oversight of the EHR Modernization program and other major technology projects at the Department of Veterans Affairs." Both DOD and VA officials testified before the subcommittee at its June 2019 oversight hearing. Interagency Governance In September 2018, then-SECDEF James Mattis and current SECVA Robert Wilkie signed a joint statement (see Appendix G ) that outlined each department's commitment to "implementing a single, seamlessly integrated [EHR] that will accurately and efficiently share health data â¦ and ensure health record interoperability with our networks of supporting community healthcare providers." On April 3, 2019, DOD announced plans to re-charter the IPO into the "Federal Electronic Health Record Modernization (FEHRM)" program office. The new office would serve as an interagency governance group that provides oversight on DOD and VA's EHR modernization efforts and would have the "authority to direct each Department to execute joint decisions for technical, programmatic, and functional functions." DOD stated that the FEHRM Director and Deputy Director will be appointed positions and will report to both the Deputy SECDEF and Deputy SECVA. While Congress directed the creation of the IPO in 2008, neither DOD nor VA has indicated if additional authorities, funding, or changes to current law are required to sustain the FEHRM program office. Congress may also examine the relationships between existing interagency governance groups (e.g., Joint Executive Committee), PEO DHMS, VA EHR Modernization Office, and the newly established FEHRM program office. Limited Competition in Future Procurement Because MHS Genesis is being deployed across all MTFs and all USCG sites, as well as VA sites transitioning to a Cerner-based EHR system, observers have noted that this is the "largest EHR undertaking in the country." Implementing a single EHR platform across three federal departments can produce certain economies of scale and standardization. However, the scale of these efforts can also result in future acquisition challenges particularly with conducting a full and open competition to procuring new requirements, or with follow-on contracts to sustain each EHR system. Congress may seek to understand how DOD and VA exercised their statutory authorities, provided through the Competition in Contracting Act of 1984 ( P.L. 98-369 ), to procure their EHR systems, as well as the possible impact of limited competition in future procurement activities needed to sustain both MHS Genesis and the VA's new EHR system. Generally, all federal departments procuring property, goods, or services are required to employ an acquisition process that allows for full and open competition. This process permits all potential vendors to "submit sealed bids or competitive proposals on the procurement." For MHS Genesis, DOD's initial acquisition process included full and open competition. However, the process was not employed for subsequent requirements that were discovered after the initial award to LPDH. These additional requirements included upgrading DOD network infrastructure; incorporating USCG-specific requirements and clinic sites; and establishing common standards among DOD, VA, and USCG. The estimated value of the additional requirements was over $1.2 billion. DOD exercised its statutory authority to award a sole source contract modification to LPDH, citing that contracting with any other vendor would potentially "create significant redundancies, inefficiencies, and other issues." DOD's acquisition strategy anticipates "one or more competitive follow-on contracts to sustain the EHR solution, for which the Government owns a perpetual license, at the conclusion of the performance of the basic contract." However, Cerner declined DOD's request to enter into negotiations regarding the rights of its intellectual property. If DOD does not retain certain intellectual property rights on MHS Genesis, the Department may be limited in what EHR vendors it can consider when it becomes necessary to solicit for an MHS Genesis sustainment contract. Appendix A. Acronyms Appendix B. MHS Genesis Functional Capability Requirements Appendix C. Stages of Electronic Medical Record Adoption and Utilization Appendix D. IOT&E Summary Results Appendix E. Methodology for CRS Focus Groups on MHS Genesis Background On July 8-13, 2018, analysts from the Congressional Research Service (CRS) participated in a congressional staff delegation visit to various DOD facilities in the Puget Sound area of Washington State. DOD facilities visited were Madigan Army Medical Center, Naval Hospital Bremerton, and the Puyallup Community Medical Home. The purpose of the visit was to: review milestones, achievements, and challenges associated with the implementation of MHS Genesis; and understand implementation and continuous improvement processes utilized at initial operational capability sites. Methodology At each site, CRS conducted numerous focus groups comprised of various MTF staff members. Each focus group was comprised of 5â15 staff members selected by the MTF commander or his/her designee. Madigan Army Medical Center Focus Group #1: Patient Administration Division, Managed Care and Scheduling, and Patient Satisfaction Department representatives Focus Group #2: Health care providers (e.g., physicians, dentists, psychologists, physicians assistants) Focus Group #3: Nurses Naval Hospital Bremerton Focus Group #1: Nurses Focus Group #2: Health care providers (e.g., physicians, dentists, psychologists, physicians assistants) Focus Group #3: Enlisted personnel Focus Group #4: Patient Administration, Referral Management, and Patient Relations representatives Puyallup Community Medical Home Focus Group #1: Health care providers, nurses, health care administrators, enlisted personnel Prior to each site visit, CRS provided each MTF with questions for discussion during each focus group. CRS documented the themes and responses to each of the following questions: What challenges have you experienced with implementing MHS Genesis? How have you locally mitigated these issues? Are the mitigation processes in place working? Have these challenges impacted force readiness, access to care, quality of care, cost of care, or patient experience? Appendix F. MHS Genesis Deployment Schedule Appendix G. DOD and VA EHR Joint Commitment Statement Background On July 8-13, 2018, analysts from the Congressional Research Service (CRS) participated in a congressional staff delegation visit to various DOD facilities in the Puget Sound area of Washington State. DOD facilities visited were Madigan Army Medical Center, Naval Hospital Bremerton, and the Puyallup Community Medical Home. The purpose of the visit was to: review milestones, achievements, and challenges associated with the implementation of MHS Genesis; and understand implementation and continuous improvement processes utilized at initial operational capability sites. Methodology At each site, CRS conducted numerous focus groups comprised of various MTF staff members. Each focus group was comprised of 5â15 staff members selected by the MTF commander or his/her designee. Madigan Army Medical Center Focus Group #1: Patient Administration Division, Managed Care and Scheduling, and Patient Satisfaction Department representatives Focus Group #2: Health care providers (e.g., physicians, dentists, psychologists, physicians assistants) Focus Group #3: Nurses Naval Hospital Bremerton Focus Group #1: Nurses Focus Group #2: Health care providers (e.g., physicians, dentists, psychologists, physicians assistants) Focus Group #3: Enlisted personnel Focus Group #4: Patient Administration, Referral Management, and Patient Relations representatives Puyallup Community Medical Home Focus Group #1: Health care providers, nurses, health care administrators, enlisted personnel Prior to each site visit, CRS provided each MTF with questions for discussion during each focus group. CRS documented the themes and responses to each of the following questions: What challenges have you experienced with implementing MHS Genesis? How have you locally mitigated these issues? Are the mitigation processes in place working? Have these challenges impacted force readiness, access to care, quality of care, cost of care, or patient experience? Summary:	null	96	54,836	54,838	54,838	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction This report provides background on Department of Defense's legacy Electronic Health Record (EHR) systems, reviews previous EHR modernization efforts, and describes DOD's process to acquire and implement a new EHR system known as MHS Genesis . DOD's new EHR system presents several potential issu es for Congress, including how to conduct oversight on a program that spans three federal departments, how to ensure an adequate governance structure for the program, and how to monitor the program's cost and effectiveness. Although this report mentions EHR modernization efforts by the Department of Veterans Affairs (VA) and U.S. Coast Guard (USCG), as well as DOD's Joint Operational Medical Information System (JOMIS); it does not provide an in-depth discussion of these programs. Appendix A provides a list of acronyms used throughout this report. Background For decades, the Department of Defense (DOD) has developed, procured, and sustained a variety of electronic systems to document the health care services delivered to servicemembers, military retirees, and their family members. DOD currently operates a number of legacy EHR systems and is, at the direction of Congress, in the process of implementing a new EHR called MHS Genesis. DOD's new EHR system is to be integrated with other EHR systems utilized by the VA, USCG, and civilian health care providers. DOD operates a Military Health System (MHS) that delivers to military personnel, retirees, and their families certain health entitlements under chapter 55 of Title 10, U.S. Code. The MHS administers the TRICARE program, which offers health care services worldwide to over 9.5 million beneficiaries in DOD hospitals and clinics â also known as military treatment facilities (MTFs) â or through participating civilian health care providers (i.e., TRICARE providers). There are currently 723 MTFs located in the United States and overseas that provide a range of clinical services depending on size, mission, and level of capabilities. Health care services delivered in MTFs or by TRICARE providers are documented in at least one of the following components of the DOD health record: service treatment record (STR) â documentation of all medical and dental care received by a servicemember through their military career; nonservice treatment record (NSTR) â documentation of all medical and dental care received by a nonservicemember beneficiary (i.e., military retiree, family member); and occupational health civilian employee treatment record (OHTR) â documentation of all occupational-related care provided by DOD (typically to DOD civilian or contractor employees). DOD maintains numerous legacy EHR systems that allow health care providers to input, share, and archive all documentation required to be in a beneficiary's health record. MTF or TRICARE providers can document medical and dental care directly in a DOD legacy EHR system, or can scan and upload paper records. Servicemembers and their families frequently change duty stations; the DOD health record can be accessed at most MTFs. However, sometimes beneficiaries are relocated to an area that lacks access to DOD's legacy EHR systems. In such cases, beneficiaries are required to maintain a paper copy of the health record. Brief History of DOD's Electronic Health Record (EHR) Since 1968, DOD has used various electronic medical information systems that automate and share patient data across its MTFs. Between 1976 and 1984, DOD invested $222 million to "acquire, implement, and operate various stand-alone and integrated health-care computer systems." Over the next three decades, DOD continued to invest and to implement numerous electronic medical information systems to allow health care providers to input and review patient data across all MTFs, regardless of military service or geographic location. In 1998, DOD began to incorporate a series of efforts to increase interoperability with the VA's EHR systems (see Figure 1 ). DOD Legacy EHR Systems DOD operates numerous legacy EHR systems as described below. Together, health care data documented and archived in the legacy EHR systems contribute to a beneficiary's overall medical and dental record, also known as the DOD health record. MHS Genesis is intended to replace these legacy systems and produce one comprehensive EHR. Composite Health Care System (CHCS) CHCS is a medical information system that has been in operation since 1993. CHCS primarily functions as the outpatient component of the EHR, with additional capabilities to order, record, and archive data for laboratory, radiology, and pharmacy services. Administrative functions such as patient appointment and scheduling, medical records tracking, and quality assurance checks, were also incorporated into CHCS. In March 1988, DOD awarded Science Applications International Corporation (SAIC) a contract to "design, develop, deploy, and maintain CHCS." SAIC continues to provide ongoing sustainment and technical support for CHCS. The estimated life-cycle cost of CHCS is $2.8 billion. Armed Forces Health Longitudinal Technology Application (AHLTA) After deploying CHCS, DOD identified a need for integrated health care data that could be portable and accessible at any MTF. CHCS was developed as a facility-specific system that archived its data using regional network servers. However, accessing data across each server became a "time- and resource-intensive activity." In 1997, DOD began planning for a new "comprehensive, lifelong, computer-based health care record for every servicemember and their beneficiaries." The program would be known as CHCS II, later renamed the Armed Forces Health Longitudinal Technology Application (AHLTA). DOD intended to replace CHCS with AHLTA and initially planned to deploy the new system in 1999. However, the program sustained several delays resulting from "failure to meet initial performance requirements" and changes to technical and functional requirements. The implementation plan was later revised to reflect AHTLA deployment from July 2003 to September 2007. In 2010, the Government Accountability Office (GAO) reported that DOD's AHLTA life-cycle cost estimate through 2017 would be $3.8 billion. Essentris Essentris is the inpatient component of the current EHR that has been used in certain military hospitals since 1987. As a commercial-off-the-shelf (COTS) product developed by CliniComp International, Inc. (CliniComp), Essentris allows health care providers to document clinical care, procedures, and patient assessments occurring in the inpatient setting, as well as in emergency departments. In 2009, DOD selected CliniComp to deploy Essentris at all military hospitals. This deployment was completed in June 2011. DOD maintains an ongoing contract with CliniComp and LOUi Consulting Group, Inc. to provide sustainment, technical and customer support, training, and ongoing updates for Essentris. Corporate Dental System (CDS) CDS, formerly named the Corporate Dental Application, is a web-based application that serves as DOD's current electronic dental record system. CDS allows DOD dental providers to document, review, and archive clinical information. The system also serves several administrative functions, such as tracking dental readiness of servicemembers, patient appointments and scheduling, and data reporting. CDS was initially developed as the Army's alternative dental solution to the AHLTA dental module. In 2000, all Army dental clinics implemented CDS. By 2016, Navy and Air Force dental clinics also transitioned to CDS as their electronic dental record system. In the same year, DOD awarded a four-year, $30 million contract to the Harris Corporation to sustain CDS. Paper Medical Records Paper medical records are another component of the DOD health record. While certain health care data are recorded and archived electronically, some administrative processes and clinical documentation exist only on paper forms. For example, clinical documentation from TRICARE providers, accession medical records, or medical evacuation records are usually in paper form. In such cases, DOD policy requires the scanning and archiving of paper medical records in an electronic repository called the Health Artifact and Image Management Solution (HAIMS). After being digitized, certain paper medical records are submitted to the National Archives and Records Administration while other documents are disposed of locally. Other DOD legacy systems document and archive various administrative and clinical data, such as: Referral Management System (RMS). An administrative information system that allows MTF staff to create and track referrals between health care providers. HAIMS. An electronic repository that stores DOD health care data, including digitally transmitted or scanned medical documentation. Data housed in HAIMS is also incorporated into a servicemember's official service treatment record , which is accessible to the VA. Medical Readiness Tracking Systems. Each military department utilizes an electronic information system that documents and tracks certain medical and dental readiness requirements, such as periodic health assessments, immunizations, dental exams, and laboratory tests. Theater Medical Information ProgramâJoint (TMIP-J). A suite of electronic systems, including modules for health care documentation and review, patient movement, and medical intelligence used in deployed or austere environments. Joint Legacy Viewer (JLV). A web-based, read-only application that allows DOD and VA health care providers to review certain real-time medical data housed in each department's EHR systems. Armed Forces Billing and Collection Utilization Solution (ABACUS). A web-based electronic system that allows MTFs to bill and track debt collection for health care services provided to certain beneficiaries. Developing an EHR Modernization Solution After Operation Desert Storm concluded in 1991, concern about deficient interoperability between DOD and VA health record systems began to grow. A number of committees and commissions issued reports highlighting the need for DOD and VA to standardize record-keeping; to improve health data sharing; and to develop a comprehensive, life-long medical record for servicemembers. Table 1 summarizes their recommendations. Between 1998 and 2009, DOD and VA established various methods to exchange limited patient health information across both departments, including: Federal Health Information Exchange (FHIE). Completed in 2004, the FHIE enables monthly data transmissions from DOD to VA comprised of patient demographics, laboratory/radiology results, outpatient pharmacy, allergies, and hospital admission data. Bidirectional Health Information Exchange (BHIE). Completed in 2004, the BHIE enables real-time, two-way data transmissions (DOD-to-VA and VA-to-DOD) comprised of FHIE information, additional patient history and assessments, theater clinical data, and additional inpatient data. Clinical Data Repository/Health Data Repository (CHDR). Completed in 2006, CHDR enables real-time, two-way data transmissions comprised of pharmacy and drug allergy information and a capability to add information to the patient's permanent medical record in the other department's repository. Virtual Lifetime Electronic Record (VLER). Initiated in 2009, the VLER enables real-time, health information exchange between DOD and VA, as well as certain civilian health care providers. While these information exchange systems enable DOD and VA health care providers to view or modify limited health care data, both departments continue to operate separate, disparate health record systems. Congress Mandates Interoperability In 2008, Congress began legislating mandates for DOD and VA to establish fully interoperable EHR systems that would allow for health care data sharing across departments. Section 1635 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2008 ( P.L. 110-181 ) directed DOD and VA to jointly: (1) "develop and implement electronic health record systems or capabilities that allow for full interoperability of personal health care information," and (2) "accelerate the exchange of health care information" between both departments. Additionally, Congress directed the establishment of an interagency program office (IPO) that would serve as a "single point of accountability" for rapid development and implementation of EHR systems or capabilities to exchange health care information. The FY2008 NDAA also directed the IPO to implement the following, no later than September 30, 2009: "â¦electronic health record systems or capabilities that allow for full interoperability of personal health care information between the Department of Defense and Department of Veterans Affairs, which health records shall comply with applicable interoperability standards, implementation specifications, and certification criteria (including for the reporting quality measures) of the Federal Government." In the conference report accompanying the Department of Defense Appropriations Act, 2008 ( H.Rept. 110-434 , P.L. 110-116 ), Congress also directed DOD and VA to "issue a joint report" by March 3, 2008, that describes the "actions being taken by each department to achieve an interoperable electronic medical record (EMR)." On April 17, 2008, the IPO was established with temporary staff from DOD and VA. On December 30, 2008, the Deputy Secretary of Defense delegated oversight authority for the IPO to the Under Secretary of Defense for Personnel and Readiness (USD[P&R]). The FY2008 NDAA also directed the Secretary of Defense (SECDEF) to appoint the IPO Director, with concurrence of the Secretary of Veterans Affairs (SECVA); and the SECVA to appoint the IPO Deputy Director, with concurrence of the SECDEF. Establishing Interoperability Goals To meet Congress's mandate on interoperability, the IPO established a mutual definition of interoperability. They posited it as the "ability of users to equally interpret (understand) unstructured or structured information which is shared (exchanged) between them in electronic form." Shortly after, both departments identified and adopted six areas of interoperability capabilities intended to meet the requirements and deadline established by Congress: Expand Essentris implementation across DOD. Demonstrate the operation of the Partnership Gateways in support of joint DOD and VA health information sharing. Enhance sharing of DOD-captured social history with VA. Demonstrate an initial capability for DOD to scan medical documents into the DOD EHR and forward those documents electronically to VA. Provide all servicemembers' health assessment data stored in the DOD EHR to the VA in such a fashion that questions are associated with the responses. Provide initial capability to share with the VA electronic access to separation physical exam information captured in the DOD EHR. As a result of each department's work on interoperable capabilities, DOD and VA reported to Congress in 2010 that all requirements for "full" interoperability were met. The Integrated EHR Initiative DOD and VA continued to work on integrating their respective EHR systems through individual initiatives, while considering a larger EHR modernization strategy. Three strategy options were considered: 1. develop a new, joint EHR; 2. upgrade and adopt an existing legacy system across both departments (i.e., AHLTA or VistA); or 3. pursue separate solutions that would have "common infrastructure with data interoperability." In March 2011, the SECDEF and SECVA agreed to work cooperatively to develop an integrated electronic health record (called the iEHR ) that would eventually replace each department's legacy systems. The IPO was assigned the oversight role for the iEHR initiative, which was then set to begin implementation no later than 2017. In February 2013, SECDEF and SECVA announced that they would no longer pursue the iEHR initiative. In making this decision, DOD and VA determined that the initial cost estimates for implementing the iEHR would be "significant," given the "constrained Federal Budget environment." After reevaluating their approach and considering alternatives, both departments decided to pursue other ongoing efforts to "improve data interoperability" and to preserve and develop separate EHR systems with a core set of capabilities that would allow for integrated sharing of health care data between DOD, VA, and private sector providers. Congressional Mandate for an EHR After DOD and VA announced their change to the iEHR strategy in 2013, Congress expressed its sense that both departments had "failed to implement a solution that allows for seamless electronic sharing of medical health care data." Given some Members' apparent frustration, Congress established a new deadline for both departments to deploy a new EHR solution. Section 713(b) of the NDAA for FY2014 ( P.L. 113-66 ) directed DOD and VA to implement an interoperable EHR with an "integrated display of data, or a single electronic health record" by December 31, 2016 (see text box below). The law also required DOD and VA to "jointly establish an executive committee" to support development of systems requirements, integration standards, and programmatic assessments to ensure compliance with Congress's direction outlined in Section 713(b). MHS Genesis Given Congress's new mandate for both departments to implement an interoperable EHR, DOD conducted a 30-day review of the iEHR program in order to "determine the best approach" to meeting the law. While conducting its review, DOD identified two EHR modernization options that would support healthcare data interoperability with the VA: (1) adopt VistA and (2) acquire a commercial EHR system. DOD Acquisition Strategy On May 21, 2013, the Secretary of Defense issued a memorandum directing the department's pursuit of "a full and open competition for a core set of capabilities for EHR modernization." The directive also delegated certain EHR responsibilities to various DOD leaders. Under Secretary of Defense for Acquisition, Technology, and Logistics (USD[AT&L]), whose office was later reorganized as the Under Secretary of Defense for Acquisition and Sustainment (USD[A&S]). Responsible for exercising milestone decision authority (MDA) and also holds technical and acquisition responsibilities for health records interoperability and related modernization programs; Under Secretary of Defense for Personnel and Readiness (USD[P&R]). Lead coordinator on DOD health care interactions with the VA. Assistant Secretary of Defense for Health Affairs (ASD[HA]). Responsible for functional capabilities of the EHR. Given the significant investments required to modernize DOD's EHR, MHS Genesis is a designated Defense B usiness S ystem (DBS). Because it is a DBS, certain decision reviews and milestones are required as part of the overall acquisition process. DBS programs are subject to significant departmental and congressional oversight activities. Requirements Development and Solicitation From June 2013 to June 2014, USD(AT&L) directed the Defense Healthcare Management Systems Modernization Program Management Office (DHMSM PMO) to oversee the EHR requirements development process, draft an acquisition strategy and request for proposal (RFP), and conduct activities required by DOD policy for DBS acquisitions. The ASD(HA) directed the Defense Health Agency (DHA) to establish various working groups to identify and develop the clinical and nonclinical functional requirements for the new EHR. The DHA led each working group, which included representatives from each military service medical department. Keeping in alignment with DOD's guiding principles for EHR modernization (see Figure 2 ), the working groups identified approximately 60 overarching capabilities to be required of a new EHR. An initial draft RFP incorporated functional capability requirements with certain technical requirements for interoperability, information security, and suitability with DOD infrastructure. The DHMSM PMO published three draft RFPs between January and June 2014 for interested contractors to review, provide comments, and submit questions for clarification on functional requirements. Additionally, the DHMSM PMO hosted four industry days that allowed interested contractors to "enhance their understanding of the DHMSM requirement," gain insight on DOD's requirements development process, and provide feedback on particular aspects of the draft RFP. These activities also allowed the DHMSM PMO to conduct market research that would inform further revision of MHS Genesis functional requirements or its overall acquisition strategy. Between June 2014 and August 2014, DOD leaders certified that certain acquisition milestones had been achieved, allowing DOD to proceed with the solicitation process, including finalizing and approving all user-validated function requirements, approving the overall acquisition strategy, and issuing an authority to proceed . On August 25, 2014, DOD issued its official solicitation for proposals. The solicitation period concluded on October 9, 2014. Source Selection Process The source selection process took place from October 2014 to July 2015. DOD reportedly had received five proposals during the solicitation period. Most of the proposals were from partnered vendors consisting of health information management, electronic medical records, information technology, and program management organizations. These partnerships included: Allscripts, Computer Sciences Corporation, and Hewlett-Packard; IBM and Epic Systems; Cerner, Leidos, and Accenture Federal; PricewaterhouseCoopers, General Dynamics, DSS, Inc., MedSphere; and InterSystems. Consistent with DOD source selection procedures, DOD experts were assigned to review and apply the evaluation criteria published in the RFP, to each proposal. Figure 3 illustrates a general overview of the evaluation and source selection process. Contract Award On July 29, 2015, DOD awarded the MHS Genesis contract to Leidos Partnership for Defense Health (LPDH) to replace its legacy EHR systems with a commercial-off-the-shelf (COTS) EHR system. The contract has a potential 10-year ordering period that includes a two-year base period, two three-year optional ordering periods, and an award term period of up to two years. The initial total award ceiling for MHS Genesis was $4.3 billion. On June 15, 2018, DOD approved a contract modification to increase the award ceiling by $1.2 billion. According to the Justification and Approval for Other than Full and Open Competition documentation, the purpose of this increase was to "support the incorporation of the United States Coast Guard (USCG) into the [DOD] MHS Genesis Electronic Health Record (EHR) implementation" and "establish a common standardized EHR baseline with the USCG and the [VA]." The current award ceiling for MHS Genesis is more than $5.5 billion. Leidos Partnership for Defense Health (LPDH) Leidos leads LPDH with its core partners: Accenture Federal Services, Cerner, and Henry Schein One. The full partnership, through sub-contracts of the core partners, is comprised of over 34 businesses (see Figure 4 ). Capabilities According to a redacted version of DOD's contract award documents, LPDH is required to meet the following overarching contract requirements: "unify and increase accessibility of integrated, evidence-based healthcare delivery and decision making"; "support the availability of longitudinal medical records for 9.6 million DoD beneficiaries and approximately 153,000+ MHS personnel globally"; "enable the application of standardized workflows, integrated healthcare delivery, and data standards for improved and secure electronic exchange of medical and patient data between the DoD and its external partners, including the [VA] and other Federal and private sector healthcare providers"; and "leverage data exchange capabilities in alignment with the [IPO] for standards-based health data interoperability and secure information sharing with external partners to include the VA." Additionally, there are over 95 specific capability requirements across four concepts of operations (i.e., health service delivery, health system support, health readiness, and force health protection) that MHS Genesis must support (see Appendix B ). Governance Ultimately, the Secretary of Defense is accountable for MHS Genesis. Various DOD entities, described below, have assigned responsibilities for MHS Genesis oversight, implementation, and sustainment (see Figure 5 ). While each entity has a separate chain of command, DOD chartered numerous governance groups to synchronize efforts across the department, delegate certain decisionmaking authorities, and provide direction on implementation and use of MHS Genesis. Program Executive Office, Defense Healthcare Management Systems (PEO DHMS) PEO DHMS was established in 2013. Its mission is to "transform the delivery of healthcare and advance data sharing through a modernized electronic health record for service members, veterans, and their families." It responsible for implementing MHS Genesis as the assigned acquisition authority and currently reports to the Under Secretary of Defense for Acquisition and Sustainment (USD[A&S]). Under the PEO DHMS, three program management offices (PMOs) are tasked with modernizing DOD's EHR system and ensuring health data interoperability with the VA. DOD Healthcare Management System Moderniza tion (DHMSM) PMO. "Oversees the deployment of MHS Genesis and the operations and sustain of the Joint Legacy Viewer." DOD/VA Interagency Program Office (IPO). "Oversees the efforts of the DOD and VA to implement national health data standards for interoperability." Joint Operational Medicine Information Systems (JOMIS) PMO. "Develops, deploys, and sustains MHS Genesis and other integrated operational medicine information systems to deployed forces." Defense Health Agency (DHA) In 2013, the Secretary of Defense established the DHA to manage the TRICARE program; execute appropriations for the Defense Health Program; coordinate management of certain multi-service health care markets and MTFs in the National Capital Region; exercise management responsibility for shared services, functions, and activities within the Military Health System; and support DOD's medical mission. DHA is a designated Combat Support Agency that is scheduled to soon administer and manage all MTFs. DHA serves as the lead entity for MHS Genesis requirements development, in coordination with the military service medical departments, and currently reports to the ASD(HA). Military Service Medical Departments The military service medical departments are established under each respective military department to organize, train, and equip military medical personnel, maintain medical readiness of the Armed Forces, and administer, manage and provide health care in MTFs. The medical departments are led by a Surgeon General, who also functions as the principal advisor to their respective military service secretary and service chief for all health and medical matters. The three service medical departments are the Army Medical Command (MEDCOM), the Navy Bureau of Medicine and Surgery (BUMED), and the Air Force Medical Service (AFMS). Each service medical department provides subject-matter expertise, functional support, and consultation to the DHMSM PMO. Senior Stakeholders Group (SSG) and the Configuration Steering Board (CSB) The SSG and the CSB are DOD-chartered working groups established to provide oversight, recommendations, and "direction on health-related acquisition programs," including those within PEO DHMS. The SSG is chaired by the USD(A&S) and is responsible for receiving updates on DHMS acquisition programs, ensuring adherence to DOD's EHR guiding principles, and providing recommendations and feedback on key EHR and interoperability decisions. The CSB is co-chaired by the USD(A&S) and the USD(P&R) and is specifically responsible for oversight on DHMSM and JOMIS programs. Figure 6 outlines the membership of each group. Executive Steering Board (ESB) The ESB, previously named the Functional Champion Leadership Group (FLCG), is a governance body led by the DHA's Chief Health Informatics Officer with representation from each service medical department. The ESB's role is to: consider changes to standardized clinical, business, or technical processes; serve as a forum to validate, prioritize, and recommend modifications or new functional requirements for MHS Genesis; and oversee numerous working groups of subject matter experts and end-users. Office of the Chief Health Informatics Officer (OCHIO) The OCHIO represents the "voice of the customer" to PEO DHMS. The office solicits input and recommendations from the ESB and coordinates with PEO DHMS to revise or modify MHS Genesis contract requirements. OCHIO is also responsible for "change management, early adoption activities, standardization of functional workflows, functional collaboration with the [VA], management of configuration changes to MHS Genesis, adjudication of functional trouble tickets, sustainment training, current state workflow assessments, and coordination of DHA policy to support the use of MHS Genesis." Deployment DOD is using a phased implementation strategy to deploy MHS Genesis. Deployment began with its initial operational capability (IOC) sites in 2017. After the IOC sites, MHS Genesis is to be deployed at over 600 medical and dental facilities, grouped geographically into 23 waves (see Appendix F ). DOD anticipates "full operational capability" and implementation of MHS Genesis at all MTFs by the end of 2024. Pre-Deployment Activities During the approximately 17 months between the July 2015 contract award date and Congress's December 2016 deadline to implement a new EHR system, DOD conducted certain pre-deployment activities (e.g., systems engineering, systems integration, and testing prior to deploying MHS Genesis). DOD acquisition policies and certain contract requirements mandate these activities. Some of the initial requirements include: contractor site visits to "analyze operations, infrastructure, and detailed information for EHR System design and testing"; gap analyses between existing site infrastructure, system requirements, and the contractor's system architecture; development of solutions to fill identified infrastructure gaps; testing interoperability with legacy systems; delivering various contractor plans to the government (e.g., integrated master plan, risk management plan, data management plan, disaster recovery plan, and cybersecurity vulnerability management plan); EHR system testing in government approved labs, including those conducted by the contractor, government independent testing and evaluation teams, and operational test agencies; and receiving authorization to proceed (ATP) with limited fielding at the IOC sites and to conduct an Initial Operational Test and Evaluation (IOT&E). Concurrently, the DOD Inspector General (DODIG) conducted a performance audit on the DHMSM PMO. The purpose of the audit was to determine if DOD had approved system requirements and if the MHS Genesis acquisition strategy was "properly approved and documented." The audit was conducted from June 2015 through January 2016, with a final report issued on May 31, 2016. Overall, the DODIG found that the MHS Genesis requirements and acquisition strategy were properly approved and documented. However, the report raised concerns about the program's execution schedule (i.e., implementation timeline) not being "realistic" to meet Congress's deadline. The DODIG recommended that the PEO DHMS conduct a "schedule analysis" to determine if IOC would be achievable by December 2016, and to continue monitoring program risks and report progress to Congress quarterly. In response to the DODIG's recommendation, the PEO DHMS asserted, "we remain confident we will achieve [IOC] later this year in accordance with the NDAA." Initial Deployment As part of the implementation strategy, DOD selected MTFs in the Pacific Northwest as its IOC sites (see Table 2 ). On February 9, 2017, MTFs at Fairchild Air Force Base, Washington, were the first sites to transition to MHS Genesis. The purpose of fielding MHS Genesis at the IOC sites before full deployment was to observe, evaluate, and document lessons-learned on whether the new EHR was usable, interoperable, secure, and stable. DOD used several evaluation methods to measure MHS Genesis success at the IOC sites, including the Health Information Management Systems Society's (HIMSS) Electronic Medical Record Adoption Models (EMRAM) and the DOD IOT&E. The results of these assessments would later inform PEO DHMS in its decision to proceed with further deployments. EMRAM Findings The EMRAM includes two commercially developed assessment tools that health systems and facilities can use to measure adoption of an electronic medical record (EMR) system. The general EMRAM is for inpatient facilities and O-EMRAM is for outpatient facilities. Both tools consist of a self-administered survey, which is then analyzed by HIMSS to produce an EMRAM score. The score, ranging from Stage 0 to Stage 7, describes the level of adoption and utilization of an EMR within a health care organization (see Appendix C ). Generally, Stage 0 indicates minimal or no EMR adoption in a health care facility or clinic, whereas Stage 7 indicates complete EMR adoption, including demonstrated data sharing capabilities and eliminated use of paper charts. Prior to the go-live dates at the IOC sites and while using its legacy systems, DOD's average score was 1.59 for the EMRAM and 2.38 for the O-EMRAM. After all IOC sites transitioned to MHS Genesis, DOD reassessed each IOC site and observed increased EMRAM scores (see Figure 7 and Figure 8 ). MTFs at Fairchild Air Force Base received a score of 6.13 on the O-EMRAM, whereas all other IOC sites scored 5.04. In comparison to U.S. civilian hospitals, the IOC sites scored higher than the national average for the EMRAM (2.00) and O-EMRAM (3.00). However, media reports on EMRAM scoring trends at the end of 2017 note that 66.7% of U.S. hospitals participating in the EMRAM reached "either Stage 5 or Stage 6." For the O-EMRAM, most participating outpatient facilities remained at Stage 1. IOT&E Findings DOD policy requires DBS programs to undergo an IOT&E to determine program or systems effectiveness and suitability. IOT&E findings provide the USD(A&S) and relevant acquisition or functional leadership with recommendations on whether a program, generally those with total contract values exceeding certain thresholds, should proceed with further implementation. Between September 2017 and December 2017, the Joint Interoperability Test Command (JITC) conducted an IOT&E at each IOC site, with the exception of Madigan Army Medical Center (MAMC). PEO DHMS postponed the MAMC IOT&E to 2018 in order to resolve issues identified at the other IOC sites. While at each site, the JITC conducted initial cybersecurity testing, evaluated interoperability data, observed MTF staff performing day-to-day tasks using MHS Genesis, and administered user surveys on performance and suitability. The Director of Operational Test and Evaluation (DOT&E) reviewed JITC's IOT&E findings and applied them to the following criteria: Does MHS Genesis provide the capabilities to manage and document health-related services? Do MHS Genesis interfaces support or enable accomplishment of mission activities and tasks? Does MHS Genesis usability, training, support, and sustainment ensure continuous operations? On April 30, 2018, DOT&E issued a partial IOT&E report asserting that MHS Genesis was "neither operationally effective nor operationally suitable." DOT&E found that: MHS Genesis is not operationally effective because it does not demonstrate enough workable functionality to manage and document patient care. Users successfully performed only 56 percent of the 197 tasks used as Measures of Performance. MHS Genesis is not operationally suitable because of poor system usability, insufficient training, and inadequate help desk support. Survivability is undetermined because cybersecurity testing is ongoing. See Appendix D for IOT&E summary results by measure of effectiveness and measure of performance evaluation. Based on these preliminary findings, DOT&E recommended to the USD(A&S) a delay in further deployment of MHS Genesis until a full IOT&E was completed and the DHMSM PMO corrected "outstanding deficiencies." Additional recommendations for the DHMSM PMO included: "Fix all Priority 1 and 2 [incident reports] with particular attention given to those that users identified as potential patient safety concerns, and verify fixes through operational testing. Improve training and system documentation for both users and Adoption Coaches. Increase the number of Adoption Coaches and leave them on site until users are more comfortable with the new processes. Complete cybersecurity operational testing and continue to fix known deficiencies. Work with users to document, reduce, and standardize operational workarounds. Improve interoperability, focusing on interfaces identified as problematic during IOT&E. Monitor reliability and availability throughout the system lifecycle. Work with the Defense Health Agency and DISA to isolate network communications problems and reduce latency. Conduct operational testing at MAMC to evaluate untested functionality and corrective actions taken by the [DHMSM] PMO. Conduct follow-on operational testing at the next fielding site to evaluate revised training and Go-Live process improvements." On November 30, 2018, DOT&E issued a final IOT&E report, incorporating results from delayed testing at MAMC. DOD has not made the final report publicly available. DOT&E acknowledges ongoing improvements, but maintains that MHS Genesis is "not yet effective or operationally suitable." A summary of the IOT&E released by the department describes several ongoing issue themes previously identified and described in the partial IOT&E report (e.g., continued incident reports, staff training, change management, and workflow adoption). With regard to cybersecurity, DOT&E described MHS Genesis as "not survivable in a cyber-contested environment." In conjunction with the IOT&E, DOD "successfully executed" three cyberspace test attacks against MHS Genesis, highlighting potential security gaps and vulnerabilities with the new EHR system. Notwithstanding DOT&E's findings and recommendations, the DOD Chief Information Officer issued a conditional Authorization to Operate , valid for 12 months. Additionally, PEO DHMS concurred with DOT&E's recommendation for a follow-on operational test and evaluation "at the next fielding to evaluate corrective actions and revised training, to inform future fielding decisions." Selected Initial Deployment Issues Since February 2017, DOD has documented numerous issues requiring mitigation strategies prior to deploying the first wave. Selected issues reported by various DOD entities, LPDH, MHS Genesis users, and media outlets are summarized below. Trouble Ticket Backlog During the initial deployment, DHMSM PMO established a single process for all IOC sites to identify, document, and report MHS Genesis issues. Users encountering system inconsistencies, technical errors, or clinical inaccuracies must submit a "trouble ticket" to a global service center (GSC). Users can also submit recommendations for changes to current workflows or system configurations to the GSC, as well as through their chain of command. The GSC is a contracted service that reviews, sorts, and assigns technical trouble tickets to LDPH or its sub-contractors for resolution. The GSC also assigns trouble tickets relating to functional capabilities, requirements, or workflows to DHMSM PMO or DHA for further review and adjudication. In April 2018, PEO DHMS reported that 1,000 of approximately 7,000 total trouble tickets generated by users throughout all IOC sites from January 2018 to that point had been resolved. Of the remaining trouble tickets, DHMSM PMO approved 2,000 for "work by the Leidos Partnership," while 2,500 were in review for further adjudication. CRS is unable to ascertain the status of the remaining 1,500 trouble tickets and the timeline in which they may have been resolved. In December 2018, PEO DHMS estimated that 3,607 open trouble tickets remained for resolution. As of October 14, 2019, PEO DHMS estimated 3,238 open trouble tickets from the IOC sites and 787 open trouble tickets from the first wave sites remained for resolution. Lengthy Issue Resolution Process MHS Genesis users at IOC sites described the issue resolution process as lengthy and lacking transparency. User concerns included: (1) tickets submitted to the GSC were resolved in a period of time that was "not acceptable for all issues"; (2) the length of time for decisionmakers to determine a solution; and (3) discovering that a solution had been implemented during a periodic system update, rather than being notified by DHMSM PMO, DHA, or LPDH. Unlike DOD's legacy systems, MHS Genesis is to be a standardized EHR platform across all military treatment facilities and is not customizable for each site. Technical or functional changes to MHS Genesis require DHA-led working groups and DHMSM PMO to review and approve such changes before directing LPDH to implement a solution. Changes exceeding the scope of the MHS Genesis contract require additional review, resourcing, and approval by the acquisition authority. Inadequate Staff Training Users reported that initial training provided four months prior to go-live was inadequate and did not allow super users to "absorb/fully grasp one role before being introduced to the next role." Staff members were required to complete computer-based training, followed by instructor-led courses. Course curricula varied by user roles (e.g., clinician, clinical support, administrative staff). Users reported that the LPDH training focused primarily on navigating the various modules and features of MHS Genesis and did not include training on clinical or administrative workflows. For example, primary care clinic nurses were trained on the applicable MHS Genesis modules that would likely be found in the primary care setting. They said they were not trained on accessing other modules that would typically be used outside of the primary care setting, as part of a patient assessment or development of a treatment plan. Capability Gaps and Limitations Users reported having little or no ability to track military medical and dental readiness requirements in MHS Genesis. Pre-built reports to monitor certain health care quality and access metrics were available to MTF staff. Users defaulted to developing local, "home-grown" work-around tools in Microsoft Office products in order to meet specific DOD and military service requirements for tracking medical and dental readiness. For example, certain dental data documented in MHS Genesis were not available for data-mining or viewing in legacy dental readiness reporting systems. To compensate for this, dental clinic staff at each IOC site transcribed or manually maintained dental readiness reports by reviewing dental data in both Dentrix (MHS Genesis' dental module) and CDS (the legacy dental system). Future Deployments In reviewing the experience and challenges documented during MHS Genesis deployment at the IOC sites, DOD noted that they "captured lessons learned, collaborated with our stakeholders, and optimized the system to enhance user adoption. Specific areas of improvement include network optimization, change management, and training enhancements." As such, DOD commenced the first wave of MHS Genesis deployments in September 2019. The deployment began with four MTFs in California and Idaho. Each wave is to last 18 months and is to include three major phases: pre-deployment planning with each MTF (3 months), deployment activities (12 months), and post go-live activities (3 months). As outlined in DOD's deployment schedule (see Appendix F ), a new wave is to begin every three months at designated MTFs through late 2022, with wave 23 scheduled to conclude in 2024. Issues for Congress Congressional Oversight Since mid-1980s, Congress has kept abreast of DOD's efforts to implement, sustain, or modernize its EHR systems. Previous congressional oversight activities have primarily focused on (1) understanding DOD's EHR modernization strategy and how the strategy would integrate interoperability and improve coordination with the VA, or (2) describing certain barriers that delayed previous modernization initiatives. Currently, 12 congressional committees may exercise oversight authority of the broader EHR modernization efforts taking place in DOD, VA and USCG. The committees include: House Appropriations Committee. House Armed Services Committee. House Committee on Oversight and Reform. House Committee on Transportation and Infrastructure. House Veterans Affairs Committee. Senate Appropriations Committee. Senate Armed Services Committee. Senate Committee on Commerce, Science, and Transportation. Senate Committee on Homeland Security and Governmental Affairs. Given the complexity, size, and timeline of DOD's EHR modernization effort, as well as parallel efforts by the USCG and VA, a coordinated oversight strategy may be necessary. Such a strategy could allow Congress to conduct a wide range of oversight activities without creating redundancies for committee staff and executive branch officials and could facilitate information-sharing among congressional stakeholders. Since the initial deployment of MHS Genesis, there have been no congressional oversight hearings held solely on DOD's EHR modernization effort. On June 20, 2018, the House Committee on Veterans' Affairs established the Subcommittee on Technology Modernization. The role of the new subcommittee is to "focus on conducting oversight of the EHR Modernization program and other major technology projects at the Department of Veterans Affairs." Both DOD and VA officials testified before the subcommittee at its June 2019 oversight hearing. Interagency Governance In September 2018, then-SECDEF James Mattis and current SECVA Robert Wilkie signed a joint statement (see Appendix G ) that outlined each department's commitment to "implementing a single, seamlessly integrated [EHR] that will accurately and efficiently share health data â¦ and ensure health record interoperability with our networks of supporting community healthcare providers." On April 3, 2019, DOD announced plans to re-charter the IPO into the "Federal Electronic Health Record Modernization (FEHRM)" program office. The new office would serve as an interagency governance group that provides oversight on DOD and VA's EHR modernization efforts and would have the "authority to direct each Department to execute joint decisions for technical, programmatic, and functional functions." DOD stated that the FEHRM Director and Deputy Director will be appointed positions and will report to both the Deputy SECDEF and Deputy SECVA. While Congress directed the creation of the IPO in 2008, neither DOD nor VA has indicated if additional authorities, funding, or changes to current law are required to sustain the FEHRM program office. Congress may also examine the relationships between existing interagency governance groups (e.g., Joint Executive Committee), PEO DHMS, VA EHR Modernization Office, and the newly established FEHRM program office. Limited Competition in Future Procurement Because MHS Genesis is being deployed across all MTFs and all USCG sites, as well as VA sites transitioning to a Cerner-based EHR system, observers have noted that this is the "largest EHR undertaking in the country." Implementing a single EHR platform across three federal departments can produce certain economies of scale and standardization. However, the scale of these efforts can also result in future acquisition challenges particularly with conducting a full and open competition to procuring new requirements, or with follow-on contracts to sustain each EHR system. Congress may seek to understand how DOD and VA exercised their statutory authorities, provided through the Competition in Contracting Act of 1984 ( P.L. 98-369 ), to procure their EHR systems, as well as the possible impact of limited competition in future procurement activities needed to sustain both MHS Genesis and the VA's new EHR system. Generally, all federal departments procuring property, goods, or services are required to employ an acquisition process that allows for full and open competition. This process permits all potential vendors to "submit sealed bids or competitive proposals on the procurement." For MHS Genesis, DOD's initial acquisition process included full and open competition. However, the process was not employed for subsequent requirements that were discovered after the initial award to LPDH. These additional requirements included upgrading DOD network infrastructure; incorporating USCG-specific requirements and clinic sites; and establishing common standards among DOD, VA, and USCG. The estimated value of the additional requirements was over $1.2 billion. DOD exercised its statutory authority to award a sole source contract modification to LPDH, citing that contracting with any other vendor would potentially "create significant redundancies, inefficiencies, and other issues." DOD's acquisition strategy anticipates "one or more competitive follow-on contracts to sustain the EHR solution, for which the Government owns a perpetual license, at the conclusion of the performance of the basic contract." However, Cerner declined DOD's request to enter into negotiations regarding the rights of its intellectual property. If DOD does not retain certain intellectual property rights on MHS Genesis, the Department may be limited in what EHR vendors it can consider when it becomes necessary to solicit for an MHS Genesis sustainment contract. Appendix A. Acronyms Appendix B. MHS Genesis Functional Capability Requirements Appendix C. Stages of Electronic Medical Record Adoption and Utilization Appendix D. IOT&E Summary Results Appendix E. Methodology for CRS Focus Groups on MHS Genesis Background On July 8-13, 2018, analysts from the Congressional Research Service (CRS) participated in a congressional staff delegation visit to various DOD facilities in the Puget Sound area of Washington State. DOD facilities visited were Madigan Army Medical Center, Naval Hospital Bremerton, and the Puyallup Community Medical Home. The purpose of the visit was to: review milestones, achievements, and challenges associated with the implementation of MHS Genesis; and understand implementation and continuous improvement processes utilized at initial operational capability sites. Methodology At each site, CRS conducted numerous focus groups comprised of various MTF staff members. Each focus group was comprised of 5â15 staff members selected by the MTF commander or his/her designee. Madigan Army Medical Center Focus Group #1: Patient Administration Division, Managed Care and Scheduling, and Patient Satisfaction Department representatives Focus Group #2: Health care providers (e.g., physicians, dentists, psychologists, physicians assistants) Focus Group #3: Nurses Naval Hospital Bremerton Focus Group #1: Nurses Focus Group #2: Health care providers (e.g., physicians, dentists, psychologists, physicians assistants) Focus Group #3: Enlisted personnel Focus Group #4: Patient Administration, Referral Management, and Patient Relations representatives Puyallup Community Medical Home Focus Group #1: Health care providers, nurses, health care administrators, enlisted personnel Prior to each site visit, CRS provided each MTF with questions for discussion during each focus group. CRS documented the themes and responses to each of the following questions: What challenges have you experienced with implementing MHS Genesis? How have you locally mitigated these issues? Are the mitigation processes in place working? Have these challenges impacted force readiness, access to care, quality of care, cost of care, or patient experience? Appendix F. MHS Genesis Deployment Schedule Appendix G. DOD and VA EHR Joint Commitment Statement Background On July 8-13, 2018, analysts from the Congressional Research Service (CRS) participated in a congressional staff delegation visit to various DOD facilities in the Puget Sound area of Washington State. DOD facilities visited were Madigan Army Medical Center, Naval Hospital Bremerton, and the Puyallup Community Medical Home. The purpose of the visit was to: review milestones, achievements, and challenges associated with the implementation of MHS Genesis; and understand implementation and continuous improvement processes utilized at initial operational capability sites. Methodology At each site, CRS conducted numerous focus groups comprised of various MTF staff members. Each focus group was comprised of 5â15 staff members selected by the MTF commander or his/her designee. Madigan Army Medical Center Focus Group #1: Patient Administration Division, Managed Care and Scheduling, and Patient Satisfaction Department representatives Focus Group #2: Health care providers (e.g., physicians, dentists, psychologists, physicians assistants) Focus Group #3: Nurses Naval Hospital Bremerton Focus Group #1: Nurses Focus Group #2: Health care providers (e.g., physicians, dentists, psychologists, physicians assistants) Focus Group #3: Enlisted personnel Focus Group #4: Patient Administration, Referral Management, and Patient Relations representatives Puyallup Community Medical Home Focus Group #1: Health care providers, nurses, health care administrators, enlisted personnel Prior to each site visit, CRS provided each MTF with questions for discussion during each focus group. CRS documented the themes and responses to each of the following questions: What challenges have you experienced with implementing MHS Genesis? How have you locally mitigated these issues? Are the mitigation processes in place working? Have these challenges impacted force readiness, access to care, quality of care, cost of care, or patient experience?	Summary:	gov_report	1,024	null	55
crs_R46315	crs_R46315_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The Coronavirus Aid, Relief, and Economic Security (CARES) Act ( P.L. 116-136 ) was passed by Congress and signed into law by President Donald Trump on March 27, 2020. The CARES Act provides over $2 trillion in relief to individuals; businesses; state, local, and federal agencies; and industry sectors impacted by the COVID-19 pandemic and the government-led effort to limit its public health impact. Given the scope of the relief provided, the variety of new and existing programs that are to provide this aid, and the number of individuals and entities receiving aid, the administration of the CARES Act is likely to be a complicated and significant undertaking by executive branch agencies and non-federal partners. These complexities may be made even greater by both pressure to provide relief as swiftly as possible and unique logistical challenges posed by the ongoing public health emergency. All of those factors make Congress's oversight role during the COVID-19 pandemic especially important and may make it more difficult for Congress to conduct timely oversight. Congress included a variety of oversight mechanisms in the CARES Act. In addition to requiring executive branch officers to submit reports on a variety of topics, provide notice before taking specified actions, and testify before certain committees, the CARES Act provides additional resources to the Government Accountability Office (GAO) and to Offices of Inspectors General (OIGs) that may have additional audit and investigative activity due to the CARES Act. In addition, the CARES Act creates three new oversight entities: a Congressional Oversight Commission, a Special Inspector General for Pandemic Recovery (SIGPR), and the Pandemic Recovery Accountability Committee (PRAC, a group of inspectors general). Each of those entities is empowered to provide oversight of significant aspects of the CARES Act. This report is a reference guide for congressional clients interested in understanding the congressional oversight tools built into the CARES Act. Oversight provisions are broadly organized into sections related to the nature of the oversight mechanism. Within each of these sections, agencies and entities are listed in alphabetical order. To the extent practicable, sections include citations to the CARES Act and to any other relevant laws and regulations. Scope of the Report This report identifies selected provisions in the CARES Act that may facilitate Congress's ability to provide oversight of its implementation. Congress's authority to oversee the executive branch extends beyond these explicit requirements and includes many additional tools and requirements. The fact that many provisions of the CARES Act do not have explicit reporting requirements or other more formal oversight mechanisms does not prevent Congress from engaging in oversight activities related to those programs by seeking information from the executive branch, engaging with stakeholders, holding hearings, and using legislation to direct activities with specificity. Requirements on agencies and entities are usually described in this report generally, with minimal discussion of detailed content requirements. The same is true for descriptions of new and altered programs. To the extent practicable, the text and footnotes of the report provide citations to the appropriate provisions of both the CARES Act and existing law to facilitate a more detailed review. The report captures those oversight tools that pertain to inspectors general (who already have obligations to report to Congress in the Inspector General Act of 1978 ) and provisions that explicitly provide for congressional involvement. For instance, the CARES Act requires certain agencies to make information publicly available but does not explicitly direct that this information be submitted to Congress or its committees. Such provisions are not identified in this report but may nevertheless be referred to in practice as congressional reporting requirements. Provisions included in the CARES Act may trigger reporting of information under other statutes. Interactions between the CARES Act and current law are not covered in this report. Oversight Provisions The CARES Act contains a number of oversight provisions. These include: the creation of a congressionally appointed oversight commission established in the legislative branch; provisions related to inspectors general, including the establishment of SIGPR, the PRAC within the Council of the Inspectors General on Integrity and Efficiency (CIGIE), and supplemental appropriations and additional duties provided for inspectors general across multiple agencies; additional funding and responsibilities provided to GAO; and requirements for agencies and entities and their leadership to provide reports to, consult with, provide notice to, and testify before Congress and its committees regarding a range of subjects. Each aforementioned category is discussed in greater detail below. Congressional Oversight Commission Section 4020 establishes a legislative branch entity called the Congressional Oversight Commission to conduct oversight of the Department of the Treasury and Federal Reserve Board's economic relief activities under Title IV, Subtitle A (Coronavirus Economic Stabilization Act of 2020) of the CARES Act. The commission is similar in structure to the Congressional Oversight Panel created to participate in the oversight of the Troubled Asset Relief Program in 2008. The commission is composed of five members selected by the majority and minority leadership of the House and the Senate. The commission is empowered to request staff to be detailed from agencies and departments, hire experts and consultants, conduct hearings, and obtain information from agencies to support its oversight activities. The commission is required to report to Congress on the relevant activities of Treasury and the Federal Reserve Board, the impact of the programs on the financial well-being of the nation, whether required disclosures in the CARES Act provides market transparency, and the effectiveness of the Coronavirus Economic Stabilization Act of 2020 in minimizing costs and maximizing benefits for taxpayers. The first report of the commission is due within 30 days of Treasury and the Federal Reserve Board's first exercise of authority under the act. Additional reports are then due every 30 days thereafter. The commission terminates on September 30, 2025. Provisions Pertaining to Inspectors General20 Special Inspector General for Pandemic Recovery Section 4018 establishes a Special Inspector General for Pandemic Recovery within the Treasury. The SIGPR is nominated by the President with the advice and consent of the Senate and may be removed from office according to Section 3(b) of the Inspector General Act of 1978. The SIGPR is tasked with conducting audits and investigations of the activities of the Treasury pursuant to the CARES Act, including the collection of detailed information regarding loans provided by Treasury. The SIGPR is empowered to hire staff and enter into contracts and has broadly the same authority and status as inspectors general under the Inspector General Act of 1978. The SIGPR is required to report to the "appropriate committees of Congress" within 60 days of Senate confirmation, and quarterly thereafter, on the activities of the office over the preceding three months, including detailed information on Treasury loan programs. The SIGPR terminates five years after the enactment of the CARES Act (i.e., March 27, 2025). Section 4027 appropriates a total of $500 billion to Treasury. Of that amount, Section 4018 directs that $25 million shall be made available to the SIGPR as no-year funds (i.e., funds that are available until expended). Pandemic Response Accountability Committee Section 15010 establishes the PRAC within the CIGIE. The PRAC is directed to "promote transparency and conduct and support oversight" of the government's coronavirus response in order to "prevent and detect fraud, waste, abuse, and mismanagement" and "mitigate major risks that cut across program and agency boundaries." In addition, the PRAC is tasked with conducting oversight and audits of the coronavirus response as well as coordinating and supporting related oversight by inspectors general across the federal government. The PRAC is composed of the inspectors general of identified agencies as well as any other inspectors general for agencies involved at the coronavirus response as designated by the chairperson of the council. The CIGIE chairperson designates the PRAC chairperson. In addition, the PRAC is required to appoint an executive director selected in consultation with the majority and minority leadership of the House and the Senate. The PRAC has the same authority to conduct audits and investigations as inspectors general under the Inspector General Act of 1978. The PRAC is required to provide management alerts to the President and Congress on "management, risk, and funding" issues that may require immediate attention. The PRAC is also required to report to the President and Congress biannually with a summary of PRAC activity and, to the extent practicable, a quantification of the impact of tax expenditures in the CARES Act. Finally the PRAC is required to provide other reports and periodic updates to Congress as it considers appropriate. In addition, the PRAC is directed to establish and maintain a "user-friendly, public-facing website to foster greater accountability and transparency in the use of covered funds." The PRAC is required to post specified information, including agencies' use of funds provided in the act. The PRAC terminates on September 30, 2025. Section 15003 appropriates $80 million in no-year funds to support the activities of the PRAC. The PRAC's organization and duties have similarities to those of the Recovery Accountability and Transparency Board that was established as part of the American Recovery and Reinvestment Act to conduct oversight of the use of funds in that act. Supplemental Appropriations and Additional Duties for Inspector General Offices The CARES Act appropriates $148 million for established inspector general offices in addition to the $25 million for the SIGPR and $80 million for the PRAC discussed above. In total, therefore, the CARES Act provides $253 million to the inspector general community to oversee the federal government's coronavirus response. Department of Agriculture Title I of Division B, under the heading "Office of the Inspector General," provides $750,000 to the Department of Agriculture OIG. The appropriation expires September 30, 2021, and may be used only to oversee funds appropriated to the department under the CARES Act. Department of Commerce Title II of Division B, under the heading "Department of CommerceâEconomic Development Administration," provides that of the $1.5 billion appropriated to the Department of Commerce, $3 million is to be transferred to the department's OIG to oversee the use of funds appropriated to the department under the CARES Act. The appropriation expires September 30, 2022. Department of Defense Title III of Division B, under the heading "Office of the Inspector General," provides $20 million for the Department of Defense OIG. This appropriation may be used only to oversee the use of funds appropriated to the department under the CARES Act. Department of Education Title VII of Division B, under the heading "Office of the Inspector General," provides $7 million to Department of Education OIG. These funds expire on September 30, 2022. This appropriation may be used only to respond to COVID-19 generally and to oversee the use of funds appropriated to the department under the CARES Act. Department of Health and Human Services Title VII of Division B, under the heading "Office of the Secretary," requires the Department of Health and Human Services (HHS) OIG to provide a final audit report to the House and Senate Appropriations Committees on payments from $100 billion appropriated to the Public Health and Social Services Emergency Fund to support eligible health care providers with their expenses related to the COVID-19 pandemic. The audit report is due three years after the final payment is made under the program. Section 18113 provides that, of the $27 billion appropriated to the Public Health and Social Services Emergency Fund, up to $4 million shall be transferred to the HHS OIG. Appropriated funds are available until expended and may be used only to oversee the use of funds appropriated to HHS under the CARES Act. In addition, the HHS inspector general is required to consult with the House and Senate Appropriations Committees prior to obligating these funds. Department of Homeland Security Title VI of Division B, under the heading "Disaster Relief Fund," provides a total of $45 billion in no-year funds for the Disaster Relief Fund with the Federal Emergency Management Agency (FEMA). Of the total appropriation, $3 million is to be transferred to the Department of Homeland Security (DHS) OIG to oversee the funds appropriated for the Disaster Relief Fund in the CARES Act. Department of Housing and Urban Development Title XII of Division B, under the heading "Office of the Inspector General," provides $5 million in no-year funds to the Department of Housing and Urban Development OIG. This appropriation may be used only to oversee the use of funds appropriated to the department under the CARES Act. Department of the Interior Title VII of Division B, under the heading "Departmental Offices," provides $158.4 million for the Office of the Secretary, Department of the Interior. This appropriation expires September 30, 2021. Of that appropriation, $1 million is to be transferred to the department's OIG to oversee the use of funds appropriated to the department under the CARES Act. Department of Justice Title II of Division B, under the heading "Office of the Inspector General," provides $2 million in no-year funds for the Department of Justice OIG. The appropriation is to be used to oversee funds provided to the department in the CARES Act and the general impact of COVID-19 on the department's activities. Department of Labor Section 2115 provides $25 million for the Department of Labor (DOL) OIG. The appropriation does not expire and may be used only to conduct oversight activity related to provisions in the CARES Act. Title XIII of Division B, under the heading "Departmental Management," appropriates $15 million to respond to COVID-19 generally and to support enforcement of the Families First Coronavirus Response Act ( P.L. 116-127 ). Of that appropriation, $1 million in no-year funds are to be transferred to the DOL OIG. Department of Transportation Title XII of Division B, under the heading "Office of Inspector General," provides $5 million in no-year funds to the Department of Transportation OIG. This appropriation may be used only to oversee the use of funds appropriated to the department under the CARES Act. Department of the Treasury Section 5001 provides $35 million in no-year funds for the Treasury OIG. The appropriation may be used only to conduct oversight and recoupment activities related to the Coronavirus Relief Fund established by Title V of the CARES Act. Section 5001 also requires the Treasury OIG to oversee the Coronavirus Relief Fund established by the section, which provides funding to state, local, and tribal governments. If the Treasury OIG determines that a state, tribal government, or unit of local government fails to comply with the requirements for the program, the section provides for the recoupment of the funds. Section 4113(d) requires the Treasury OIG to conduct audits of certifications related to employee compensation provided by air carriers in order to receive financial assistance under Section 4113(a). Department of Veterans Affairs Title X of Division B, under the heading "Office of Inspector General," provides $12.5 million for the Department of Veterans Affairs (VA) OIG. These funds expire on September 30, 2022. This appropriation may be used only to oversee the use of funds appropriated to the VA under the CARES Act. Small Business Administration Section 1107(a)(3) provides $25 million for the Small Business Administration (SBA) OIG. These funds expire September 30, 2024. Provisions Pertaining to the Government Accountability Office Title IX of Division B of the CARES Act, under the heading "Government Accountability Office," appropriates $20 million to GAO to conduct additional oversight and provide Congress with several reports. GAO is required to report to House and Senate Appropriations Committees within 90 days of enactment of the CARES Act with a spending plan for the funds and a timeline for audits and investigations. GAO Reporting Requirements and Additional Responsibilities Healthy Start Program : Section 3225 reauthorizes the Healthy Start Program. The section includes a requirement that GAO "review, access, and provide recommendations" on the program within four years of enactment of the CARES Act (i.e., March 27, 2024) and report its findings to the appropriate committees. Nurse Loan Repayment Programs : Section 3404 requires the comptroller general to study "nurse loan repayment programs" administered by the Health Resources and Services Administration and report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions, within 18 months of enactment of the CARES Act (i.e., September 27, 2021). Community and Mental Health Services Demonstration Program : Section 3814 extends the end date for the Community Mental Health Services Demonstration Program P.L. 93-288 and directs GAO to provide a report on the program to the House Committee on Energy and Commerce and Senate Committee on Finance. This report is due 18 months after enactment of the CARES Act (i.e., September 27, 2021). Regulation of Over the Counter Drugs : Section 3851 requires GAO to conduct a study on the effectiveness and impact of exclusivity under Sections 505G and 586C of the Federal Food, Drug, and Cosmetic Act. The study is to be submitted to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions within four years of enactment of the CARES Act (i.e., March 27, 2024). Coronavirus Economic Stabilization Act of 2020 : Section 4026(f) directs the comptroller general to conduct a study on "loans, loan guarantees, and other investments" made under Section 4003 of the CARES Act and report to the House Committee on Financial Services; the House Committee on Transportation and Infrastructure; the House Committee on Appropriations; the House Committee on the Budget; the Senate Committee on Banking, Housing, and Urban Affairs; the Senate Committee on Commerce, Science, and Transportation; the Senate Committee on Appropriations; and the Senate Committee on the Budget. The initial report under this provision is due nine months after enactment of the CARES Act (i.e., December 27, 2020), and additional reports are required annually thereafter through the "year succeeding the last year for which loans, loan guarantees, and other investments made under Section 4003 are outstanding." Monitoring and Audits by Comptroller General : Section 19010 requires the comptroller general to conduct monitoring and oversight of federal spending in response to the COVID-19 pandemic. The section empowers the comptroller general to access relevant records, make copies of those records, and conduct pertinent interviews. The comptroller general is to offer briefings at least once per month to the House Committee on Appropriations; the House Committee on Homeland Security; the House Committee on Oversight and Reform; the House Committee on Energy and Commerce; the Senate Committee on Appropriations; the Senate Committee on Homeland Security and Governmental Affairs; and the Senate Committee on Health, Education, Labor, and Pensions. The comptroller general is also required to report on GAO's relevant activities to the same committees within 90 days of enactment of the CARES Act (i.e., June 25, 2020), then monthly until one year after enactment (i.e., March 27, 2021), and periodically thereafter. Agency Reporting, Notice, and Consultation Requirements for Federal Entities and Sub-Entities Architect of the Capitol Title IX of Division B, under the heading "Architect of the Capitol," appropriates $25 million to the Architect of the Capitol for expenses related to the COVID-19 pandemic. The Architect of the Capitol is required to provide an expenditure report within 30 days of enactment of the CARES Act (i.e., April 26, 2020) and every 30 days thereafter to the House and Senate Appropriations Committees, the House Committee on House Administration, and the Senate Committee on Rules and Administration. Armed Forces Retirement Home Trust Fund Title X of Division B, under the heading "Armed Forces Retirement Home Trust Fund," appropriates $2.8 million from the available funds of the trust fund for expenses related to the COVID-19 pandemic. The chief executive officer of the Armed Forces Retirement Home is required to submit monthly spending reports to the House and Senate Appropriations Committees. Board of Governors of the Federal Reserve System Section 4026(b)(2)(A) requires the Board of Governors of the Federal Reserve System to report to the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs whenever it exercises its purchase and loan-making authority under Section 4003(b)(4). Reports are to be submitted within seven days and are required to contain the same information as reports required under Title 12, Section 343(3)(C)(i), of the United States Code . In addition, reports are to be submitted every 30 days regarding outstanding loans and financial assistance under Section 4003(b)(4) in accordance with Title 12, Section 343(3)(C)(ii), of the U.S. Code . Centers for Disease Control and Prevention Title VII of Division B, under the heading "Centers for Disease Control and Prevention," appropriates a total of $4.3 billion to the Centers for Disease Control and Prevention (CDC). Of that total, $500 million is directed to "public health data surveillance and analytics infrastructure modernization." Within 30 days of enactment of the CARES Act (i.e., April 26, 2020), CDC is required to report to the House and Senate Appropriations Committees on the development of a "public health surveillance and data collection system for coronavirus." Department of Commerce Section 1108(d) requires the Minority Small Business Development Agency of the Department of Commerce to submit reports to the House Committee on Small Business; the House Committee on Energy and Commerce; the Senate Committee on Commerce, Science, and Technology; and the Senate Committee on Small Business and Entrepreneurship regarding the programs developed pursuant to Section 1108(b). Reports are due six months after enactment of the CARES Act (i.e., September 27, 2020) and annually thereafter. Department of Defense Section 13006(a) authorizes the delegation of select procurement authorities within the Department of Defense for transactions related to the COVID-19 pandemic. In the event that a transaction of this type does occur, either the Under Secretary of Defense for Research and Engineering or the Under Secretary of Defense for Acquisition and Sustainment, as applicable, is required to notify the House and Senate Appropriations and Armed Services Committees "as soon as is practicable." Department of Education Section 3510(a) allows foreign institutions to use distance education during the declared COVID-19 emergency under certain circumstances. Section 3510(c) requires that the Secretary of Education submit a report to the House Committee on Education and Labor and the Senate Committee on Health, Education, Labor, and Pensions identifying foreign institutions that use distance education under Section 3510(a). The report is due not later than 180 days after enactment of the CARES Act (i.e., September 23, 2020). Additional reports are due every 180 days for the duration of the declared emergency. Section 3510(d) allows foreign institutions to enter written agreements with certain institutions of higher education in the United States to allow students to take courses at the American institutions. Section 3510(d)(4) requires that the Secretary of Education submit a report identifying the foreign institutions using such arrangements to the House Committee on Education and Labor and the Senate Committee on Health, Education, Labor, and Pensions. The report is due not later than 180 days after enactment of the CARES Act (i.e., September 23, 2020). Additional reports are due every 180 days for the duration of the declared emergency. Section 3511(b) authorizes the Secretary of Education to waive certain statutory requirements identified in the section upon the request of a state or Indian tribe. Section 3511(d)(2) requires the Secretary of Education to notify the House Committee on Education and Labor; the Senate Committee on Health, Education, Labor, and Pensions; and the House and Senate Appropriations Committee within seven days of granting any waiver. In addition, Section 3511(d)(4) requires the Secretary of Education to submit a report to the same committees within 30 days of enactment of the CARES Act (i.e., April 26, 2020) with recommendations for additional necessary waivers of statutory requirements. Section 3512(a) authorizes the Secretary of Education to defer payments on loans made to historically black colleges and universities under Title 20, Section 1066, of the U.S. Code . Section 3512(c) requires the Secretary of Education to report to the House Committee on Education and Labor and the Senate Committee on Health, Education, Labor, and Pensions within 180 days of enactment of the CARES Act (i.e., September 23, 2020) and every 180 days thereafter on any institutions receiving this relief. Section 3517(c) requires the Secretary of Education to submit a report to the House Committee on Education and Labor and the Senate Committee on Health, Education, Labor, and Pensions identifying all institutions of higher education receiving waivers of statutory requirements identified in Section 3517(a). Reports are due within 180 days of enactment of the CARES Act (i.e., September 23, 2020) and every 180 days thereafter until the end of the fiscal year following the end of the declared emergency. Section 3518(c) requires the Secretary of Education to submit a report to the House Committee on Education and Labor and the Senate Committee on Health, Education, Labor, and Pensions identifying all institutions of higher education and other recipients who receive grant modifications as authorized in Section 3518(a). Reports are due within 180 days of enactment of the CARES Act (i.e., September 23, 2020) and every 180 days thereafter until the end of the fiscal year following the end of the declared emergency. Department of Health and Human Services Section 3212 amends the Public Health Service Act to require that the Secretary of HHS submit a report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions within four years of enactment of the CARES Act (i.e., March 27, 2024) and every five years thereafter on the "activities and outcomes" of the Telehealth Network Grant Program and the Telehealth Resource Centers Grant Program. Section 3213 amends the Public Health Service Act to require the Secretary of HHS to submit a report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions within four years of enactment of the CARES Act (i.e., March 27, 2024), and every five years thereafter, on the "activities and outcomes" of the Rural Health Care Services Outreach Grant Program, the Rural Health Network Development Grant Program, and the Small Health Care Provider Quality Improvement Grant Program. Section 3226(d) requires the Secretary of HHS to submit a report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions within two years of enactment of the CARES Act (i.e., March 27, 2022) on HHS's efforts to support the blood donation system. Section 3301 amends the Public Health Service Act to, during a public health emergency, eliminate a cap on the value of certain transactions related to the Biomedical Advanced Research and Development Authority that may be entered into by the Secretary of HHS. After the termination of the public health emergency, the Secretary of HHS is required to submit a report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions that details the use of funds, including a discussion of outcome measures for such transactions. Section 3401 amends the Public Health Service Act and renews a previously enacted requirement that the Secretary of HHS submit reports to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions concerning the need for underrepresented minorities on medical peer review councils. The first report is due September 30, 2025, and subsequent reports are due every five years thereafter. Section 3401 further amends the Public Health Service Act to require the Advisory Council on Graduate Medical Education to submit a report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions (as well as the Secretary of HHS) no later than September 30, 2023, and every five years thereafter. In these reports, the Advisory Council is directed to discuss its recommendations on the issues outlined in Title 42, Section 294o(a)(1), of the U.S. Code . Section 3402(a) requires the Secretary of HHS to develop a comprehensive and coordinated plan for the health care workforce development programs within one year of enactment of the CARES Act (i.e., March 27, 2021). Section 3402(c) requires the Secretary of HHS to submit a report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions describing the plan and how it is being implemented within two years of passage of the CARES Act (i.e., March 27, 2022). Section 3403(c) amends the Public Health Service Act to require the Secretary of HHS to submit a report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions on outcomes associated with the Geriatrics Workforce Enhancement Program. The report is due within four years of the enactment of the Title VII Health Care Workforce Reauthorization Act of 2019 and then every five years thereafter. Section 3404(a)(4)(D) amends the Public Health Service Act to require the Secretary of HHS to submit reports to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions assessing HHS programs to enhance the nursing workforce. Reports are due by September 30, 2020, and biennially thereafter. Further, Section 3404(a)(6)(F) incorporates additional requirements for these reports that are codified in Title 42, Section 296p, of the U.S. Code . Section 3854(c)(2) requires the Secretary of HHS to submit a report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions when a revised sunscreen order under the Section 3854(c)(1) does not include certain efficacy information. Section 3855(a) requires the Secretary of HHS to submit a letter to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions describing the Food and Drug Administration's (FDA's) evaluations and revisions to the cough and cold monograph for children under the age of six. The letter is due one year after enactment of the CARES Act (i.e., March 27, 2021) and annually thereafter. Section 3862 adds a new part to the Federal Food, Drug, and Cosmetic Act to alter the FDA's management of monographs for over-the-counter drugs. This new part includes two additional reporting requirements on the implementation and impact of the new provisions. The Secretary of HHS is required to report on each of those issues to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions within 120 calendar days after the end of FY2021 and within 120 days after the end of each fiscal year thereafter. In addition, the Secretary of HHS is required, by January 15, 2025, to transmit to Congress recommendations to revise the goals of the program. While developing those recommendations, the Secretary of HHS is required to consult with the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions, among others. Title VIII of Division B, under the heading "Centers for Disease Control and Prevention," requires the Secretary of HHS, in consultation with the director of the CDC, to report to the House and Senate Appropriations Committees every 14 days for one year if the HHS Secretary declares an infectious disease emergency and seeks to use the Infections Diseases Rapid Response Fund (as authorized by the third proviso of Section 231 of Division B of P.L. 115-245 ) "as long as such report[s] would detail obligations in excess of $5,000,000" or upon request. Title VIII of Division B, under the heading "Office of the Secretary," appropriates $27 billion to the Public Health and Social Services Emergency Fund. Among other things, the provision allows for funds to be used to reimburse the VA for expenses related to the COVID-19 pandemic and for care for certain patients. To provide this reimbursement, the Secretary of HHS must certify to the House and Senate Appropriations Committees that funds available under the Stafford Act are insufficient to cover expenses incurred by the VA. In addition, the Secretary of HHS must notify the House and Senate Appropriations Committees three days prior to making such a certification. Title VIII of Division B, also under the heading "Office of the Secretary," appropriates $100 billion to the Public Health and Social Services Emergency Fund to support eligible health care providers with their expenses related to the COVID-19 pandemic. The Secretary of HHS is required to submit a report to the House and Senate Appropriations Committees within 60 days of enactment of the CARES Act (i.e., May 26, 2020), and every 60 days thereafter, on the obligation of these funds, including state-level data. Section 18111 provides that funds appropriated under the heading "Department of Health and Human Services" in Title VII of Division B may be transferred or merged with appropriations to other specified HHS budget accounts so long as the House and Senate Appropriations Committees are notified 10 days in advance of any transfer. Section 18112 requires the Secretary of HHS to provide a spend plan for funds appropriated to HHS to the House and Senate Appropriations Committees within 60 days of enactment of the CARES Act (i.e., May 26, 2020) and then every 60 days until September 30, 2024. Department of Homeland Security Title VI of Division B, under the heading "Department of Homeland Security," appropriates $178 million for DHS's response to the COVID-19 pandemic. The provision grants additional authority to transfer these funds between DHS accounts for the purchase of personal protective equipment and sanitization materials. Within five days after making such a transfer, DHS is required to notify the House and Senate Appropriations Committees. Department of the Interior Title VII of Division B, under the heading "Departmental Offices," provides $158 million to support for the Department of the Interior's COVID-19 pandemic response. Beginning 90 days after enactment of the CARES Act (i.e., June 25, 2020), and monthly thereafter, the Secretary of the Interior is required to provide a report detailing the use of these funds to the House and Senate Appropriations Committees. Department of Labor Title VIII of Division B, under the heading "Departmental Management," appropriates $15 million for DOL's response to the COVID-19 pandemic and provides that the Secretary of Labor may transfer these funds to other specified DOL budget accounts for this purpose. Fifteen days prior to transferring any funds, the Secretary of Labor is required to submit an operating plan to the House and Senate Appropriations Committees describing how funds will be used. Department of State Section 21007 authorizes the Secretary of State and the administrator of the U.S. Agency for International Development (USAID) to provide additional paid leave to employees for the period from January 29, 2020, to September 30, 2022, in order to address hardships created by the COVID-19 pandemic. Prior to using this authority, the Secretary of State and the administrator must consult with House and Senate Appropriations Committees, the House Committee on Foreign Affairs, and the Senate Committee on Foreign Relations. Section 21009 authorizes the Secretary of State to use passport and immigrant visa surcharges to pay costs for consular services during FY2020.The Secretary of State is required to report to the House and Senate Appropriations Committees, the House Committee on Foreign Affairs, and the Senate Committee on Foreign Relations within 90 days of the expiration of this authority (i.e., December 29, 2020) on specific expenditures made pursuant to this authority. Section 21010 authorizes the Department of State and USAID to enter into personal services contracts to support their response to the COVID-19 pandemic subject to prior consultation with and notification of the House and Senate Appropriations Committees, the House Committee on Foreign Affairs, and the Senate Committee on Foreign Relations. Within 15 days of using this authority, the Secretary of State is required to report to the same committees on the staffing needs of the Office of Medical Services. Section 21011 authorizes the Secretary of State and the administrator of USAID to administer any legally required oath of office remotely through September 30, 2021. Prior to using this authority, the Secretary of State and the administrator must each submit a report to the House and Senate Appropriations Committees, the House Committee on Foreign Affairs, and the Senate Committee on Foreign Relations describing the process they will use to administer an oath of office in this manner. Department of Transportation Section 22002 requires the Secretary of Transportation to notify the House and Senate Appropriations Committees; the House Committee on Transportation and Infrastructure; and the Senate Committee on Commerce, Science, and Transportation within seven days of enactment of the CARES Act (i.e., April 3, 2020), and every seven days thereafter, of the furlough of any National Railroad Passenger Corporation employee due to the COVID-19 pandemic. Section 22005 allows the Secretary of Transportation to waive specified requirements for highway safety grants if the COVID-19 pandemic will substantially impact the ability of the states and the Department of Transportation to meet those grant requirements. The Secretary is required to "periodically" report to the relevant committees on any waivers made under this provision. Department of the Treasury Section 2201(f)(2) establishes reporting requirements associated with the 2020 Recovery Rebates provided in Section 2201. The Secretary of the Treasury is required to submit a report to the House and Senate Appropriations Committees within 15 days of enactment of the CARES Act (i.e., April 11, 2020) providing a spending plan for the funds provided for this program. In addition, 90 days after enactment (i.e., June 25, 2020), and quarterly thereafter, the Secretary is required to provide reports to the House and Senate Appropriations Committees on actual and projected expenditures under this program. Section 4026(b)(1)(A) requires the Secretary of the Treasury, within seven days after making a loan or loan guarantee under Sections 4003(b)(1), 4003(b)(2), or 4003(b)(3), to report to the chairmen and ranking members of the House Committee on Financial Services; the House Committee on Ways and Means; the Senate Committee on Banking, Housing, and Urban Affairs; and the Senate Committee on Finance. These reports are to include an overview of the actions and financial information about those transactions. Section 4118(a) requires the Secretary of the Treasury to submit a report no later than November 1, 2020, to the House Committee on Transportation and Infrastructure; the House Committee on Financial Services; the Senate Committee on Commerce, Science, and Transportation; and the Senate Committee on Banking, Housing, and Urban Affairs on the financial assistance provided to air carriers and contractors under Subtitle B of Title IV of the CARES Act. Section 4118(b) requires that the Secretary of the Treasury provide an updated report to the same committees no later than November 1, 2021. Section 21012 amends the Bretton Woods Agreements Act to authorize additional lending by the Department of the Treasury pursuant to a decision of the executive directors of the International Monetary Fund. Prior to taking such action, the Secretary of the Treasury is required to report to Congress on the need for such loans to support the international monetary system and the availability of alternative actions. Department of Veterans Affairs Title X of Division B, under the heading "Information Technology Systems," appropriates $2.15 billion for information technology expenses related to the COVID-19 pandemic. The VA Secretary is required to submit a spending plan for these funds to the House and Senate Appropriations Committees and must also notify the same committees before any of these funds are reprogrammed among VA's budget subaccounts for information technology. Section 20001 provides additional transfer authority for the Secretary to transfer funds between identified accounts. For transfers that account for less than 2% of the amount appropriated to a particular account, the Secretary is required to notify the House and Senate Appropriations Committees. For all other transfers, the VA Secretary may transfer funds only after requesting and receiving approval from the House and Senate Appropriations Committees. Section 20002 requires the Secretary to submit monthly expenditure reports to the House and Senate Appropriations Committees for all funds appropriated by Title X of Division B. Section 20008 authorizes the Secretary to waive any limitations on pay for VA employees during the COVID-19 public health emergency for work done in support of the response to the emergency. The Secretary is required to submit a report to the House and Senate Veterans' Affairs Committees in each month that such a waiver is in place. Election Assistance Commission Title V of Division B, under the heading "Election Assistance Commission," provides a total of $400 million for election security grants to be distributed to the states by the Election Assistance Commission. This provision requires states to submit reports on how these funds were used within 20 days of each election in the 2020 federal election cycle. Within three days of receipt, the commission is required to transmit these reports to the House Committee on House Administration, the Senate Committee on Rules and Administration, and the House and Senate Appropriations Committees. Federal Emergency Management Agency Title VI of Division B, under the heading "Federal Emergency Management Agency," appropriates $45 billion to FEMA's Disaster Relief Fund. The FEMA administrator is required to report to the House and Senate Appropriations Committees every 30 days on the actual and projected use of these funds. General Services Administration Title V of Division B, under the heading "General Services Administration," appropriates $275 million to the Federal Buildings Fund of the General Services Administration (GSA) for expenses related to the COVID-19 pandemic. The provision requires the administrator of GSA to notify the House and Senate Appropriations Committees quarterly on obligations and expenditures of these funds. Section 15003 requires the GSA administrator to notify Congress in writing if the administrator determines that it is in the public interest to use non-competitive procurement procedures as authorized by the Federal Procurement Policy during a declared public health emergency. House of Representatives Title IX of Division B, under the heading "House of Representatives," appropriates a total of $25 million for expenses related to the COVID-19 pandemic. The chief administrative officer of the House of Representatives is required to submit a spending plan to the House Committee on Appropriations. Internal Revenue Service Section 15001 appropriates $250 million to the Internal Revenue Service (IRS). The provision requires that the IRS commissioner submit a spending plan to the House and Senate Appropriations Committees no later than 30 days of enactment of the CARES Act (i.e., April 26, 2020). The provision also provides that, with advance notice to the House and Senate Appropriations Committees, these funds may be transferred between IRS budget accounts as necessary to respond to the COVID-19 pandemic. Kennedy Center Title VII of Division B, under the heading "John F. Kennedy Center for the Performing Arts," provides $25 million to support the Kennedy Center's response to the COVID-19 pandemic. The provision requires the Board of Trustees of the Kennedy Center to report to the House and Senate Appropriations Committees by October 21, 2020, with a detailed explanation of the use of the funds. Register of Copyrights Section 19011 amends Chapter 7 of Title 17 of the U.S. Code to provide that, through December 31, 2021, if an emergency declared by the President under the National Emergencies Act disrupts the ordinary functioning of the copyright system, the Register of Copyrights may waive or modify specified timing requirements. If the Register of Copyrights takes such action he or she must notify Congress within 20 days. Small Business Administration Section 1103(d) requires SBA to report to the House Committee on Small Business and the Senate Committee on Small Business and Entrepreneurship on its activities related to education, training and advising grants under Section 1103(b) of the CARES Act. The initial report under this section is due six months after enactment of the CARES Act (i.e., September 27, 2020), with additional reports annually thereafter. Section 1107(c) requires SBA to provide a spending plan for funds appropriated in Section 1107(a) to the House and Senate Appropriations Committees within 180 days of enactment of the CARES Act (i.e., September 23, 2020). U.S. Patent and Trademark Office Section 12004(a) provides the director of the U.S. Patent and Trademark Office with authority to toll, waive, adjust, or modify specified deadlines in Title 35 of the U.S. Code during the COVID-19 emergency if certain conditions are met. To use this authority, the director is required, under Section 12004(c), to submit a statement to Congress within 20 days explaining his or her action and the rationale underlying it. General Provisions for Title VII of Division B In addition to the requirements listed above for specific federal entities and sub-entities, Section 18109 authorizes that funds provided under Title VII of Division B may be used for personal services contracts with prior notification to the House and Senate Appropriations Committees. Title VII of Division B makes appropriations to the Department of the Interior, the Environmental Protection Agency, the Forest Service (Department of Agriculture), the Indian Health Service (HHS), the Agency for Toxic Substances and Disease Registry (HHS), the Institute of American Indian and Alaska Native Culture and Arts Development, the Smithsonian Institution, the Kennedy Center, and the National Foundation on the Arts and Humanities. Requirements for Testimony Chairman of the Board of Governors of the Federal Reserve System Section 4026 requires the chairman of Federal Reserve to testify, on a quarterly basis, before the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs regarding the Federal Reserve's activities under the CARES Act. Secretary of the Treasury Section 4003(c)(3)(A)(iii) allows the Secretary of the Treasury to waive compensation limits established by Section 4004 as well as restrictions on "stock buybacks," the payment of dividends, and other capital distributions established by Section 4003(c)(3)(A)(ii) for businesses receiving a loan, loan guarantee, or other investment under the CARES Act. In order to waive those requirements, the Secretary must determine that such action is necessary to "protect the interests of the Federal Government" and must also "make himself available to testify before the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives regarding the reasons for the waiver." Section 4026 requires the Secretary of the Treasury to testify, on a quarterly basis, before the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs regarding the Treasury's activities under the CARES Act. Summary:	null	96	50,252	50,254	50,254	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The Coronavirus Aid, Relief, and Economic Security (CARES) Act ( P.L. 116-136 ) was passed by Congress and signed into law by President Donald Trump on March 27, 2020. The CARES Act provides over $2 trillion in relief to individuals; businesses; state, local, and federal agencies; and industry sectors impacted by the COVID-19 pandemic and the government-led effort to limit its public health impact. Given the scope of the relief provided, the variety of new and existing programs that are to provide this aid, and the number of individuals and entities receiving aid, the administration of the CARES Act is likely to be a complicated and significant undertaking by executive branch agencies and non-federal partners. These complexities may be made even greater by both pressure to provide relief as swiftly as possible and unique logistical challenges posed by the ongoing public health emergency. All of those factors make Congress's oversight role during the COVID-19 pandemic especially important and may make it more difficult for Congress to conduct timely oversight. Congress included a variety of oversight mechanisms in the CARES Act. In addition to requiring executive branch officers to submit reports on a variety of topics, provide notice before taking specified actions, and testify before certain committees, the CARES Act provides additional resources to the Government Accountability Office (GAO) and to Offices of Inspectors General (OIGs) that may have additional audit and investigative activity due to the CARES Act. In addition, the CARES Act creates three new oversight entities: a Congressional Oversight Commission, a Special Inspector General for Pandemic Recovery (SIGPR), and the Pandemic Recovery Accountability Committee (PRAC, a group of inspectors general). Each of those entities is empowered to provide oversight of significant aspects of the CARES Act. This report is a reference guide for congressional clients interested in understanding the congressional oversight tools built into the CARES Act. Oversight provisions are broadly organized into sections related to the nature of the oversight mechanism. Within each of these sections, agencies and entities are listed in alphabetical order. To the extent practicable, sections include citations to the CARES Act and to any other relevant laws and regulations. Scope of the Report This report identifies selected provisions in the CARES Act that may facilitate Congress's ability to provide oversight of its implementation. Congress's authority to oversee the executive branch extends beyond these explicit requirements and includes many additional tools and requirements. The fact that many provisions of the CARES Act do not have explicit reporting requirements or other more formal oversight mechanisms does not prevent Congress from engaging in oversight activities related to those programs by seeking information from the executive branch, engaging with stakeholders, holding hearings, and using legislation to direct activities with specificity. Requirements on agencies and entities are usually described in this report generally, with minimal discussion of detailed content requirements. The same is true for descriptions of new and altered programs. To the extent practicable, the text and footnotes of the report provide citations to the appropriate provisions of both the CARES Act and existing law to facilitate a more detailed review. The report captures those oversight tools that pertain to inspectors general (who already have obligations to report to Congress in the Inspector General Act of 1978 ) and provisions that explicitly provide for congressional involvement. For instance, the CARES Act requires certain agencies to make information publicly available but does not explicitly direct that this information be submitted to Congress or its committees. Such provisions are not identified in this report but may nevertheless be referred to in practice as congressional reporting requirements. Provisions included in the CARES Act may trigger reporting of information under other statutes. Interactions between the CARES Act and current law are not covered in this report. Oversight Provisions The CARES Act contains a number of oversight provisions. These include: the creation of a congressionally appointed oversight commission established in the legislative branch; provisions related to inspectors general, including the establishment of SIGPR, the PRAC within the Council of the Inspectors General on Integrity and Efficiency (CIGIE), and supplemental appropriations and additional duties provided for inspectors general across multiple agencies; additional funding and responsibilities provided to GAO; and requirements for agencies and entities and their leadership to provide reports to, consult with, provide notice to, and testify before Congress and its committees regarding a range of subjects. Each aforementioned category is discussed in greater detail below. Congressional Oversight Commission Section 4020 establishes a legislative branch entity called the Congressional Oversight Commission to conduct oversight of the Department of the Treasury and Federal Reserve Board's economic relief activities under Title IV, Subtitle A (Coronavirus Economic Stabilization Act of 2020) of the CARES Act. The commission is similar in structure to the Congressional Oversight Panel created to participate in the oversight of the Troubled Asset Relief Program in 2008. The commission is composed of five members selected by the majority and minority leadership of the House and the Senate. The commission is empowered to request staff to be detailed from agencies and departments, hire experts and consultants, conduct hearings, and obtain information from agencies to support its oversight activities. The commission is required to report to Congress on the relevant activities of Treasury and the Federal Reserve Board, the impact of the programs on the financial well-being of the nation, whether required disclosures in the CARES Act provides market transparency, and the effectiveness of the Coronavirus Economic Stabilization Act of 2020 in minimizing costs and maximizing benefits for taxpayers. The first report of the commission is due within 30 days of Treasury and the Federal Reserve Board's first exercise of authority under the act. Additional reports are then due every 30 days thereafter. The commission terminates on September 30, 2025. Provisions Pertaining to Inspectors General20 Special Inspector General for Pandemic Recovery Section 4018 establishes a Special Inspector General for Pandemic Recovery within the Treasury. The SIGPR is nominated by the President with the advice and consent of the Senate and may be removed from office according to Section 3(b) of the Inspector General Act of 1978. The SIGPR is tasked with conducting audits and investigations of the activities of the Treasury pursuant to the CARES Act, including the collection of detailed information regarding loans provided by Treasury. The SIGPR is empowered to hire staff and enter into contracts and has broadly the same authority and status as inspectors general under the Inspector General Act of 1978. The SIGPR is required to report to the "appropriate committees of Congress" within 60 days of Senate confirmation, and quarterly thereafter, on the activities of the office over the preceding three months, including detailed information on Treasury loan programs. The SIGPR terminates five years after the enactment of the CARES Act (i.e., March 27, 2025). Section 4027 appropriates a total of $500 billion to Treasury. Of that amount, Section 4018 directs that $25 million shall be made available to the SIGPR as no-year funds (i.e., funds that are available until expended). Pandemic Response Accountability Committee Section 15010 establishes the PRAC within the CIGIE. The PRAC is directed to "promote transparency and conduct and support oversight" of the government's coronavirus response in order to "prevent and detect fraud, waste, abuse, and mismanagement" and "mitigate major risks that cut across program and agency boundaries." In addition, the PRAC is tasked with conducting oversight and audits of the coronavirus response as well as coordinating and supporting related oversight by inspectors general across the federal government. The PRAC is composed of the inspectors general of identified agencies as well as any other inspectors general for agencies involved at the coronavirus response as designated by the chairperson of the council. The CIGIE chairperson designates the PRAC chairperson. In addition, the PRAC is required to appoint an executive director selected in consultation with the majority and minority leadership of the House and the Senate. The PRAC has the same authority to conduct audits and investigations as inspectors general under the Inspector General Act of 1978. The PRAC is required to provide management alerts to the President and Congress on "management, risk, and funding" issues that may require immediate attention. The PRAC is also required to report to the President and Congress biannually with a summary of PRAC activity and, to the extent practicable, a quantification of the impact of tax expenditures in the CARES Act. Finally the PRAC is required to provide other reports and periodic updates to Congress as it considers appropriate. In addition, the PRAC is directed to establish and maintain a "user-friendly, public-facing website to foster greater accountability and transparency in the use of covered funds." The PRAC is required to post specified information, including agencies' use of funds provided in the act. The PRAC terminates on September 30, 2025. Section 15003 appropriates $80 million in no-year funds to support the activities of the PRAC. The PRAC's organization and duties have similarities to those of the Recovery Accountability and Transparency Board that was established as part of the American Recovery and Reinvestment Act to conduct oversight of the use of funds in that act. Supplemental Appropriations and Additional Duties for Inspector General Offices The CARES Act appropriates $148 million for established inspector general offices in addition to the $25 million for the SIGPR and $80 million for the PRAC discussed above. In total, therefore, the CARES Act provides $253 million to the inspector general community to oversee the federal government's coronavirus response. Department of Agriculture Title I of Division B, under the heading "Office of the Inspector General," provides $750,000 to the Department of Agriculture OIG. The appropriation expires September 30, 2021, and may be used only to oversee funds appropriated to the department under the CARES Act. Department of Commerce Title II of Division B, under the heading "Department of CommerceâEconomic Development Administration," provides that of the $1.5 billion appropriated to the Department of Commerce, $3 million is to be transferred to the department's OIG to oversee the use of funds appropriated to the department under the CARES Act. The appropriation expires September 30, 2022. Department of Defense Title III of Division B, under the heading "Office of the Inspector General," provides $20 million for the Department of Defense OIG. This appropriation may be used only to oversee the use of funds appropriated to the department under the CARES Act. Department of Education Title VII of Division B, under the heading "Office of the Inspector General," provides $7 million to Department of Education OIG. These funds expire on September 30, 2022. This appropriation may be used only to respond to COVID-19 generally and to oversee the use of funds appropriated to the department under the CARES Act. Department of Health and Human Services Title VII of Division B, under the heading "Office of the Secretary," requires the Department of Health and Human Services (HHS) OIG to provide a final audit report to the House and Senate Appropriations Committees on payments from $100 billion appropriated to the Public Health and Social Services Emergency Fund to support eligible health care providers with their expenses related to the COVID-19 pandemic. The audit report is due three years after the final payment is made under the program. Section 18113 provides that, of the $27 billion appropriated to the Public Health and Social Services Emergency Fund, up to $4 million shall be transferred to the HHS OIG. Appropriated funds are available until expended and may be used only to oversee the use of funds appropriated to HHS under the CARES Act. In addition, the HHS inspector general is required to consult with the House and Senate Appropriations Committees prior to obligating these funds. Department of Homeland Security Title VI of Division B, under the heading "Disaster Relief Fund," provides a total of $45 billion in no-year funds for the Disaster Relief Fund with the Federal Emergency Management Agency (FEMA). Of the total appropriation, $3 million is to be transferred to the Department of Homeland Security (DHS) OIG to oversee the funds appropriated for the Disaster Relief Fund in the CARES Act. Department of Housing and Urban Development Title XII of Division B, under the heading "Office of the Inspector General," provides $5 million in no-year funds to the Department of Housing and Urban Development OIG. This appropriation may be used only to oversee the use of funds appropriated to the department under the CARES Act. Department of the Interior Title VII of Division B, under the heading "Departmental Offices," provides $158.4 million for the Office of the Secretary, Department of the Interior. This appropriation expires September 30, 2021. Of that appropriation, $1 million is to be transferred to the department's OIG to oversee the use of funds appropriated to the department under the CARES Act. Department of Justice Title II of Division B, under the heading "Office of the Inspector General," provides $2 million in no-year funds for the Department of Justice OIG. The appropriation is to be used to oversee funds provided to the department in the CARES Act and the general impact of COVID-19 on the department's activities. Department of Labor Section 2115 provides $25 million for the Department of Labor (DOL) OIG. The appropriation does not expire and may be used only to conduct oversight activity related to provisions in the CARES Act. Title XIII of Division B, under the heading "Departmental Management," appropriates $15 million to respond to COVID-19 generally and to support enforcement of the Families First Coronavirus Response Act ( P.L. 116-127 ). Of that appropriation, $1 million in no-year funds are to be transferred to the DOL OIG. Department of Transportation Title XII of Division B, under the heading "Office of Inspector General," provides $5 million in no-year funds to the Department of Transportation OIG. This appropriation may be used only to oversee the use of funds appropriated to the department under the CARES Act. Department of the Treasury Section 5001 provides $35 million in no-year funds for the Treasury OIG. The appropriation may be used only to conduct oversight and recoupment activities related to the Coronavirus Relief Fund established by Title V of the CARES Act. Section 5001 also requires the Treasury OIG to oversee the Coronavirus Relief Fund established by the section, which provides funding to state, local, and tribal governments. If the Treasury OIG determines that a state, tribal government, or unit of local government fails to comply with the requirements for the program, the section provides for the recoupment of the funds. Section 4113(d) requires the Treasury OIG to conduct audits of certifications related to employee compensation provided by air carriers in order to receive financial assistance under Section 4113(a). Department of Veterans Affairs Title X of Division B, under the heading "Office of Inspector General," provides $12.5 million for the Department of Veterans Affairs (VA) OIG. These funds expire on September 30, 2022. This appropriation may be used only to oversee the use of funds appropriated to the VA under the CARES Act. Small Business Administration Section 1107(a)(3) provides $25 million for the Small Business Administration (SBA) OIG. These funds expire September 30, 2024. Provisions Pertaining to the Government Accountability Office Title IX of Division B of the CARES Act, under the heading "Government Accountability Office," appropriates $20 million to GAO to conduct additional oversight and provide Congress with several reports. GAO is required to report to House and Senate Appropriations Committees within 90 days of enactment of the CARES Act with a spending plan for the funds and a timeline for audits and investigations. GAO Reporting Requirements and Additional Responsibilities Healthy Start Program : Section 3225 reauthorizes the Healthy Start Program. The section includes a requirement that GAO "review, access, and provide recommendations" on the program within four years of enactment of the CARES Act (i.e., March 27, 2024) and report its findings to the appropriate committees. Nurse Loan Repayment Programs : Section 3404 requires the comptroller general to study "nurse loan repayment programs" administered by the Health Resources and Services Administration and report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions, within 18 months of enactment of the CARES Act (i.e., September 27, 2021). Community and Mental Health Services Demonstration Program : Section 3814 extends the end date for the Community Mental Health Services Demonstration Program P.L. 93-288 and directs GAO to provide a report on the program to the House Committee on Energy and Commerce and Senate Committee on Finance. This report is due 18 months after enactment of the CARES Act (i.e., September 27, 2021). Regulation of Over the Counter Drugs : Section 3851 requires GAO to conduct a study on the effectiveness and impact of exclusivity under Sections 505G and 586C of the Federal Food, Drug, and Cosmetic Act. The study is to be submitted to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions within four years of enactment of the CARES Act (i.e., March 27, 2024). Coronavirus Economic Stabilization Act of 2020 : Section 4026(f) directs the comptroller general to conduct a study on "loans, loan guarantees, and other investments" made under Section 4003 of the CARES Act and report to the House Committee on Financial Services; the House Committee on Transportation and Infrastructure; the House Committee on Appropriations; the House Committee on the Budget; the Senate Committee on Banking, Housing, and Urban Affairs; the Senate Committee on Commerce, Science, and Transportation; the Senate Committee on Appropriations; and the Senate Committee on the Budget. The initial report under this provision is due nine months after enactment of the CARES Act (i.e., December 27, 2020), and additional reports are required annually thereafter through the "year succeeding the last year for which loans, loan guarantees, and other investments made under Section 4003 are outstanding." Monitoring and Audits by Comptroller General : Section 19010 requires the comptroller general to conduct monitoring and oversight of federal spending in response to the COVID-19 pandemic. The section empowers the comptroller general to access relevant records, make copies of those records, and conduct pertinent interviews. The comptroller general is to offer briefings at least once per month to the House Committee on Appropriations; the House Committee on Homeland Security; the House Committee on Oversight and Reform; the House Committee on Energy and Commerce; the Senate Committee on Appropriations; the Senate Committee on Homeland Security and Governmental Affairs; and the Senate Committee on Health, Education, Labor, and Pensions. The comptroller general is also required to report on GAO's relevant activities to the same committees within 90 days of enactment of the CARES Act (i.e., June 25, 2020), then monthly until one year after enactment (i.e., March 27, 2021), and periodically thereafter. Agency Reporting, Notice, and Consultation Requirements for Federal Entities and Sub-Entities Architect of the Capitol Title IX of Division B, under the heading "Architect of the Capitol," appropriates $25 million to the Architect of the Capitol for expenses related to the COVID-19 pandemic. The Architect of the Capitol is required to provide an expenditure report within 30 days of enactment of the CARES Act (i.e., April 26, 2020) and every 30 days thereafter to the House and Senate Appropriations Committees, the House Committee on House Administration, and the Senate Committee on Rules and Administration. Armed Forces Retirement Home Trust Fund Title X of Division B, under the heading "Armed Forces Retirement Home Trust Fund," appropriates $2.8 million from the available funds of the trust fund for expenses related to the COVID-19 pandemic. The chief executive officer of the Armed Forces Retirement Home is required to submit monthly spending reports to the House and Senate Appropriations Committees. Board of Governors of the Federal Reserve System Section 4026(b)(2)(A) requires the Board of Governors of the Federal Reserve System to report to the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs whenever it exercises its purchase and loan-making authority under Section 4003(b)(4). Reports are to be submitted within seven days and are required to contain the same information as reports required under Title 12, Section 343(3)(C)(i), of the United States Code . In addition, reports are to be submitted every 30 days regarding outstanding loans and financial assistance under Section 4003(b)(4) in accordance with Title 12, Section 343(3)(C)(ii), of the U.S. Code . Centers for Disease Control and Prevention Title VII of Division B, under the heading "Centers for Disease Control and Prevention," appropriates a total of $4.3 billion to the Centers for Disease Control and Prevention (CDC). Of that total, $500 million is directed to "public health data surveillance and analytics infrastructure modernization." Within 30 days of enactment of the CARES Act (i.e., April 26, 2020), CDC is required to report to the House and Senate Appropriations Committees on the development of a "public health surveillance and data collection system for coronavirus." Department of Commerce Section 1108(d) requires the Minority Small Business Development Agency of the Department of Commerce to submit reports to the House Committee on Small Business; the House Committee on Energy and Commerce; the Senate Committee on Commerce, Science, and Technology; and the Senate Committee on Small Business and Entrepreneurship regarding the programs developed pursuant to Section 1108(b). Reports are due six months after enactment of the CARES Act (i.e., September 27, 2020) and annually thereafter. Department of Defense Section 13006(a) authorizes the delegation of select procurement authorities within the Department of Defense for transactions related to the COVID-19 pandemic. In the event that a transaction of this type does occur, either the Under Secretary of Defense for Research and Engineering or the Under Secretary of Defense for Acquisition and Sustainment, as applicable, is required to notify the House and Senate Appropriations and Armed Services Committees "as soon as is practicable." Department of Education Section 3510(a) allows foreign institutions to use distance education during the declared COVID-19 emergency under certain circumstances. Section 3510(c) requires that the Secretary of Education submit a report to the House Committee on Education and Labor and the Senate Committee on Health, Education, Labor, and Pensions identifying foreign institutions that use distance education under Section 3510(a). The report is due not later than 180 days after enactment of the CARES Act (i.e., September 23, 2020). Additional reports are due every 180 days for the duration of the declared emergency. Section 3510(d) allows foreign institutions to enter written agreements with certain institutions of higher education in the United States to allow students to take courses at the American institutions. Section 3510(d)(4) requires that the Secretary of Education submit a report identifying the foreign institutions using such arrangements to the House Committee on Education and Labor and the Senate Committee on Health, Education, Labor, and Pensions. The report is due not later than 180 days after enactment of the CARES Act (i.e., September 23, 2020). Additional reports are due every 180 days for the duration of the declared emergency. Section 3511(b) authorizes the Secretary of Education to waive certain statutory requirements identified in the section upon the request of a state or Indian tribe. Section 3511(d)(2) requires the Secretary of Education to notify the House Committee on Education and Labor; the Senate Committee on Health, Education, Labor, and Pensions; and the House and Senate Appropriations Committee within seven days of granting any waiver. In addition, Section 3511(d)(4) requires the Secretary of Education to submit a report to the same committees within 30 days of enactment of the CARES Act (i.e., April 26, 2020) with recommendations for additional necessary waivers of statutory requirements. Section 3512(a) authorizes the Secretary of Education to defer payments on loans made to historically black colleges and universities under Title 20, Section 1066, of the U.S. Code . Section 3512(c) requires the Secretary of Education to report to the House Committee on Education and Labor and the Senate Committee on Health, Education, Labor, and Pensions within 180 days of enactment of the CARES Act (i.e., September 23, 2020) and every 180 days thereafter on any institutions receiving this relief. Section 3517(c) requires the Secretary of Education to submit a report to the House Committee on Education and Labor and the Senate Committee on Health, Education, Labor, and Pensions identifying all institutions of higher education receiving waivers of statutory requirements identified in Section 3517(a). Reports are due within 180 days of enactment of the CARES Act (i.e., September 23, 2020) and every 180 days thereafter until the end of the fiscal year following the end of the declared emergency. Section 3518(c) requires the Secretary of Education to submit a report to the House Committee on Education and Labor and the Senate Committee on Health, Education, Labor, and Pensions identifying all institutions of higher education and other recipients who receive grant modifications as authorized in Section 3518(a). Reports are due within 180 days of enactment of the CARES Act (i.e., September 23, 2020) and every 180 days thereafter until the end of the fiscal year following the end of the declared emergency. Department of Health and Human Services Section 3212 amends the Public Health Service Act to require that the Secretary of HHS submit a report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions within four years of enactment of the CARES Act (i.e., March 27, 2024) and every five years thereafter on the "activities and outcomes" of the Telehealth Network Grant Program and the Telehealth Resource Centers Grant Program. Section 3213 amends the Public Health Service Act to require the Secretary of HHS to submit a report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions within four years of enactment of the CARES Act (i.e., March 27, 2024), and every five years thereafter, on the "activities and outcomes" of the Rural Health Care Services Outreach Grant Program, the Rural Health Network Development Grant Program, and the Small Health Care Provider Quality Improvement Grant Program. Section 3226(d) requires the Secretary of HHS to submit a report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions within two years of enactment of the CARES Act (i.e., March 27, 2022) on HHS's efforts to support the blood donation system. Section 3301 amends the Public Health Service Act to, during a public health emergency, eliminate a cap on the value of certain transactions related to the Biomedical Advanced Research and Development Authority that may be entered into by the Secretary of HHS. After the termination of the public health emergency, the Secretary of HHS is required to submit a report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions that details the use of funds, including a discussion of outcome measures for such transactions. Section 3401 amends the Public Health Service Act and renews a previously enacted requirement that the Secretary of HHS submit reports to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions concerning the need for underrepresented minorities on medical peer review councils. The first report is due September 30, 2025, and subsequent reports are due every five years thereafter. Section 3401 further amends the Public Health Service Act to require the Advisory Council on Graduate Medical Education to submit a report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions (as well as the Secretary of HHS) no later than September 30, 2023, and every five years thereafter. In these reports, the Advisory Council is directed to discuss its recommendations on the issues outlined in Title 42, Section 294o(a)(1), of the U.S. Code . Section 3402(a) requires the Secretary of HHS to develop a comprehensive and coordinated plan for the health care workforce development programs within one year of enactment of the CARES Act (i.e., March 27, 2021). Section 3402(c) requires the Secretary of HHS to submit a report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions describing the plan and how it is being implemented within two years of passage of the CARES Act (i.e., March 27, 2022). Section 3403(c) amends the Public Health Service Act to require the Secretary of HHS to submit a report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions on outcomes associated with the Geriatrics Workforce Enhancement Program. The report is due within four years of the enactment of the Title VII Health Care Workforce Reauthorization Act of 2019 and then every five years thereafter. Section 3404(a)(4)(D) amends the Public Health Service Act to require the Secretary of HHS to submit reports to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions assessing HHS programs to enhance the nursing workforce. Reports are due by September 30, 2020, and biennially thereafter. Further, Section 3404(a)(6)(F) incorporates additional requirements for these reports that are codified in Title 42, Section 296p, of the U.S. Code . Section 3854(c)(2) requires the Secretary of HHS to submit a report to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions when a revised sunscreen order under the Section 3854(c)(1) does not include certain efficacy information. Section 3855(a) requires the Secretary of HHS to submit a letter to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions describing the Food and Drug Administration's (FDA's) evaluations and revisions to the cough and cold monograph for children under the age of six. The letter is due one year after enactment of the CARES Act (i.e., March 27, 2021) and annually thereafter. Section 3862 adds a new part to the Federal Food, Drug, and Cosmetic Act to alter the FDA's management of monographs for over-the-counter drugs. This new part includes two additional reporting requirements on the implementation and impact of the new provisions. The Secretary of HHS is required to report on each of those issues to the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions within 120 calendar days after the end of FY2021 and within 120 days after the end of each fiscal year thereafter. In addition, the Secretary of HHS is required, by January 15, 2025, to transmit to Congress recommendations to revise the goals of the program. While developing those recommendations, the Secretary of HHS is required to consult with the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions, among others. Title VIII of Division B, under the heading "Centers for Disease Control and Prevention," requires the Secretary of HHS, in consultation with the director of the CDC, to report to the House and Senate Appropriations Committees every 14 days for one year if the HHS Secretary declares an infectious disease emergency and seeks to use the Infections Diseases Rapid Response Fund (as authorized by the third proviso of Section 231 of Division B of P.L. 115-245 ) "as long as such report[s] would detail obligations in excess of $5,000,000" or upon request. Title VIII of Division B, under the heading "Office of the Secretary," appropriates $27 billion to the Public Health and Social Services Emergency Fund. Among other things, the provision allows for funds to be used to reimburse the VA for expenses related to the COVID-19 pandemic and for care for certain patients. To provide this reimbursement, the Secretary of HHS must certify to the House and Senate Appropriations Committees that funds available under the Stafford Act are insufficient to cover expenses incurred by the VA. In addition, the Secretary of HHS must notify the House and Senate Appropriations Committees three days prior to making such a certification. Title VIII of Division B, also under the heading "Office of the Secretary," appropriates $100 billion to the Public Health and Social Services Emergency Fund to support eligible health care providers with their expenses related to the COVID-19 pandemic. The Secretary of HHS is required to submit a report to the House and Senate Appropriations Committees within 60 days of enactment of the CARES Act (i.e., May 26, 2020), and every 60 days thereafter, on the obligation of these funds, including state-level data. Section 18111 provides that funds appropriated under the heading "Department of Health and Human Services" in Title VII of Division B may be transferred or merged with appropriations to other specified HHS budget accounts so long as the House and Senate Appropriations Committees are notified 10 days in advance of any transfer. Section 18112 requires the Secretary of HHS to provide a spend plan for funds appropriated to HHS to the House and Senate Appropriations Committees within 60 days of enactment of the CARES Act (i.e., May 26, 2020) and then every 60 days until September 30, 2024. Department of Homeland Security Title VI of Division B, under the heading "Department of Homeland Security," appropriates $178 million for DHS's response to the COVID-19 pandemic. The provision grants additional authority to transfer these funds between DHS accounts for the purchase of personal protective equipment and sanitization materials. Within five days after making such a transfer, DHS is required to notify the House and Senate Appropriations Committees. Department of the Interior Title VII of Division B, under the heading "Departmental Offices," provides $158 million to support for the Department of the Interior's COVID-19 pandemic response. Beginning 90 days after enactment of the CARES Act (i.e., June 25, 2020), and monthly thereafter, the Secretary of the Interior is required to provide a report detailing the use of these funds to the House and Senate Appropriations Committees. Department of Labor Title VIII of Division B, under the heading "Departmental Management," appropriates $15 million for DOL's response to the COVID-19 pandemic and provides that the Secretary of Labor may transfer these funds to other specified DOL budget accounts for this purpose. Fifteen days prior to transferring any funds, the Secretary of Labor is required to submit an operating plan to the House and Senate Appropriations Committees describing how funds will be used. Department of State Section 21007 authorizes the Secretary of State and the administrator of the U.S. Agency for International Development (USAID) to provide additional paid leave to employees for the period from January 29, 2020, to September 30, 2022, in order to address hardships created by the COVID-19 pandemic. Prior to using this authority, the Secretary of State and the administrator must consult with House and Senate Appropriations Committees, the House Committee on Foreign Affairs, and the Senate Committee on Foreign Relations. Section 21009 authorizes the Secretary of State to use passport and immigrant visa surcharges to pay costs for consular services during FY2020.The Secretary of State is required to report to the House and Senate Appropriations Committees, the House Committee on Foreign Affairs, and the Senate Committee on Foreign Relations within 90 days of the expiration of this authority (i.e., December 29, 2020) on specific expenditures made pursuant to this authority. Section 21010 authorizes the Department of State and USAID to enter into personal services contracts to support their response to the COVID-19 pandemic subject to prior consultation with and notification of the House and Senate Appropriations Committees, the House Committee on Foreign Affairs, and the Senate Committee on Foreign Relations. Within 15 days of using this authority, the Secretary of State is required to report to the same committees on the staffing needs of the Office of Medical Services. Section 21011 authorizes the Secretary of State and the administrator of USAID to administer any legally required oath of office remotely through September 30, 2021. Prior to using this authority, the Secretary of State and the administrator must each submit a report to the House and Senate Appropriations Committees, the House Committee on Foreign Affairs, and the Senate Committee on Foreign Relations describing the process they will use to administer an oath of office in this manner. Department of Transportation Section 22002 requires the Secretary of Transportation to notify the House and Senate Appropriations Committees; the House Committee on Transportation and Infrastructure; and the Senate Committee on Commerce, Science, and Transportation within seven days of enactment of the CARES Act (i.e., April 3, 2020), and every seven days thereafter, of the furlough of any National Railroad Passenger Corporation employee due to the COVID-19 pandemic. Section 22005 allows the Secretary of Transportation to waive specified requirements for highway safety grants if the COVID-19 pandemic will substantially impact the ability of the states and the Department of Transportation to meet those grant requirements. The Secretary is required to "periodically" report to the relevant committees on any waivers made under this provision. Department of the Treasury Section 2201(f)(2) establishes reporting requirements associated with the 2020 Recovery Rebates provided in Section 2201. The Secretary of the Treasury is required to submit a report to the House and Senate Appropriations Committees within 15 days of enactment of the CARES Act (i.e., April 11, 2020) providing a spending plan for the funds provided for this program. In addition, 90 days after enactment (i.e., June 25, 2020), and quarterly thereafter, the Secretary is required to provide reports to the House and Senate Appropriations Committees on actual and projected expenditures under this program. Section 4026(b)(1)(A) requires the Secretary of the Treasury, within seven days after making a loan or loan guarantee under Sections 4003(b)(1), 4003(b)(2), or 4003(b)(3), to report to the chairmen and ranking members of the House Committee on Financial Services; the House Committee on Ways and Means; the Senate Committee on Banking, Housing, and Urban Affairs; and the Senate Committee on Finance. These reports are to include an overview of the actions and financial information about those transactions. Section 4118(a) requires the Secretary of the Treasury to submit a report no later than November 1, 2020, to the House Committee on Transportation and Infrastructure; the House Committee on Financial Services; the Senate Committee on Commerce, Science, and Transportation; and the Senate Committee on Banking, Housing, and Urban Affairs on the financial assistance provided to air carriers and contractors under Subtitle B of Title IV of the CARES Act. Section 4118(b) requires that the Secretary of the Treasury provide an updated report to the same committees no later than November 1, 2021. Section 21012 amends the Bretton Woods Agreements Act to authorize additional lending by the Department of the Treasury pursuant to a decision of the executive directors of the International Monetary Fund. Prior to taking such action, the Secretary of the Treasury is required to report to Congress on the need for such loans to support the international monetary system and the availability of alternative actions. Department of Veterans Affairs Title X of Division B, under the heading "Information Technology Systems," appropriates $2.15 billion for information technology expenses related to the COVID-19 pandemic. The VA Secretary is required to submit a spending plan for these funds to the House and Senate Appropriations Committees and must also notify the same committees before any of these funds are reprogrammed among VA's budget subaccounts for information technology. Section 20001 provides additional transfer authority for the Secretary to transfer funds between identified accounts. For transfers that account for less than 2% of the amount appropriated to a particular account, the Secretary is required to notify the House and Senate Appropriations Committees. For all other transfers, the VA Secretary may transfer funds only after requesting and receiving approval from the House and Senate Appropriations Committees. Section 20002 requires the Secretary to submit monthly expenditure reports to the House and Senate Appropriations Committees for all funds appropriated by Title X of Division B. Section 20008 authorizes the Secretary to waive any limitations on pay for VA employees during the COVID-19 public health emergency for work done in support of the response to the emergency. The Secretary is required to submit a report to the House and Senate Veterans' Affairs Committees in each month that such a waiver is in place. Election Assistance Commission Title V of Division B, under the heading "Election Assistance Commission," provides a total of $400 million for election security grants to be distributed to the states by the Election Assistance Commission. This provision requires states to submit reports on how these funds were used within 20 days of each election in the 2020 federal election cycle. Within three days of receipt, the commission is required to transmit these reports to the House Committee on House Administration, the Senate Committee on Rules and Administration, and the House and Senate Appropriations Committees. Federal Emergency Management Agency Title VI of Division B, under the heading "Federal Emergency Management Agency," appropriates $45 billion to FEMA's Disaster Relief Fund. The FEMA administrator is required to report to the House and Senate Appropriations Committees every 30 days on the actual and projected use of these funds. General Services Administration Title V of Division B, under the heading "General Services Administration," appropriates $275 million to the Federal Buildings Fund of the General Services Administration (GSA) for expenses related to the COVID-19 pandemic. The provision requires the administrator of GSA to notify the House and Senate Appropriations Committees quarterly on obligations and expenditures of these funds. Section 15003 requires the GSA administrator to notify Congress in writing if the administrator determines that it is in the public interest to use non-competitive procurement procedures as authorized by the Federal Procurement Policy during a declared public health emergency. House of Representatives Title IX of Division B, under the heading "House of Representatives," appropriates a total of $25 million for expenses related to the COVID-19 pandemic. The chief administrative officer of the House of Representatives is required to submit a spending plan to the House Committee on Appropriations. Internal Revenue Service Section 15001 appropriates $250 million to the Internal Revenue Service (IRS). The provision requires that the IRS commissioner submit a spending plan to the House and Senate Appropriations Committees no later than 30 days of enactment of the CARES Act (i.e., April 26, 2020). The provision also provides that, with advance notice to the House and Senate Appropriations Committees, these funds may be transferred between IRS budget accounts as necessary to respond to the COVID-19 pandemic. Kennedy Center Title VII of Division B, under the heading "John F. Kennedy Center for the Performing Arts," provides $25 million to support the Kennedy Center's response to the COVID-19 pandemic. The provision requires the Board of Trustees of the Kennedy Center to report to the House and Senate Appropriations Committees by October 21, 2020, with a detailed explanation of the use of the funds. Register of Copyrights Section 19011 amends Chapter 7 of Title 17 of the U.S. Code to provide that, through December 31, 2021, if an emergency declared by the President under the National Emergencies Act disrupts the ordinary functioning of the copyright system, the Register of Copyrights may waive or modify specified timing requirements. If the Register of Copyrights takes such action he or she must notify Congress within 20 days. Small Business Administration Section 1103(d) requires SBA to report to the House Committee on Small Business and the Senate Committee on Small Business and Entrepreneurship on its activities related to education, training and advising grants under Section 1103(b) of the CARES Act. The initial report under this section is due six months after enactment of the CARES Act (i.e., September 27, 2020), with additional reports annually thereafter. Section 1107(c) requires SBA to provide a spending plan for funds appropriated in Section 1107(a) to the House and Senate Appropriations Committees within 180 days of enactment of the CARES Act (i.e., September 23, 2020). U.S. Patent and Trademark Office Section 12004(a) provides the director of the U.S. Patent and Trademark Office with authority to toll, waive, adjust, or modify specified deadlines in Title 35 of the U.S. Code during the COVID-19 emergency if certain conditions are met. To use this authority, the director is required, under Section 12004(c), to submit a statement to Congress within 20 days explaining his or her action and the rationale underlying it. General Provisions for Title VII of Division B In addition to the requirements listed above for specific federal entities and sub-entities, Section 18109 authorizes that funds provided under Title VII of Division B may be used for personal services contracts with prior notification to the House and Senate Appropriations Committees. Title VII of Division B makes appropriations to the Department of the Interior, the Environmental Protection Agency, the Forest Service (Department of Agriculture), the Indian Health Service (HHS), the Agency for Toxic Substances and Disease Registry (HHS), the Institute of American Indian and Alaska Native Culture and Arts Development, the Smithsonian Institution, the Kennedy Center, and the National Foundation on the Arts and Humanities. Requirements for Testimony Chairman of the Board of Governors of the Federal Reserve System Section 4026 requires the chairman of Federal Reserve to testify, on a quarterly basis, before the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs regarding the Federal Reserve's activities under the CARES Act. Secretary of the Treasury Section 4003(c)(3)(A)(iii) allows the Secretary of the Treasury to waive compensation limits established by Section 4004 as well as restrictions on "stock buybacks," the payment of dividends, and other capital distributions established by Section 4003(c)(3)(A)(ii) for businesses receiving a loan, loan guarantee, or other investment under the CARES Act. In order to waive those requirements, the Secretary must determine that such action is necessary to "protect the interests of the Federal Government" and must also "make himself available to testify before the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives regarding the reasons for the waiver." Section 4026 requires the Secretary of the Treasury to testify, on a quarterly basis, before the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs regarding the Treasury's activities under the CARES Act.	Summary:	gov_report	1,024	null	56
crs_R43744	crs_R43744_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Since November 1986, the Commemorative Works Act (CWA) has provided the legal framework for the placement of commemorative works in the District of Columbia. The CWA was enacted to establish a statutory process for ensuring "that future commemorative works in areas administered by the National Park Service (NPS) and the General Services Administration (GSA) in the District of Columbia and its environs (1) are appropriately designed, constructed, and located and (2) reflect a consensus of the lasting significance of the subjects involved." Areas administered by other agencies are not subject to the CWA. Responsibility for overseeing the design, construction, and maintenance of such works was delegated to the Secretary of the Interior or the Administrator of the GSA, the National Capital Planning Commission (NCPC), and the U.S. Commission of Fine Arts (CFA). Additionally, the CWA restricts placement of commemorative works to certain areas of the District of Columbia based on the subject's historic importance. Pursuant to the CWA, locating a commemorative work on federally owned and administered land in the District of Columbia requires the federal government to maintain the memorial unless otherwise stipulated in the enabling legislation. In some cases, however, authorized memorials are ultimately sited on land that falls outside of CWA jurisdiction and outside the boundaries of the District of Columbia and its environs. For example, the Air Force Memorial was authorized by Congress for placement on land owned and administered by either NPS or GSA in the District of Columbia. Memorial organizers, however, chose a site near the Pentagon in Arlington, VA, that is owned and administered by the Department of Defense. Consequently, the Department of Defense, not the NPS or GSA, is responsible for maintenance. This report highlights in-progress works and memorials with lapsed authorizations since the passage of the CWA in 1986. The report provides information—located within text boxes for easy reference—on the statute(s) authorizing the work; the sponsor organization; statutory legislative extensions, if any; and the memorial's location or proposed location, if known. A picture or rendering of each work is also included, when available. Commemorative Works Areas of the District of Columbia The CWA divides areas administered by the NPS and the GSA in the District of Columbia and its environs into three sections for the placement of memorials: the Reserve, Area I, and Area II. For each area, the standards for memorial placement are specified in law, and congressional approval of monument location is required. Reserve The Reserve was created in November 2003, by P.L. 108-126 , to prohibit the addition of future memorials in an area defined as "the great cross-axis of the Mall, which generally extends from the United States Capitol to the Lincoln Memorial, and from the White House to the Jefferson Memorial ." Under the act, this area is considered "a substantially completed work of civic art. " Within this area, "to preserve the integrity of the Mall … the siting of new commemorative works is prohibited. " Area I Created as part of the original CWA in 1986, Area I is reserved for commemorative works of "preeminent historical and lasting significance to the United States. " Area I is roughly bounded by the West Front of the Capitol; Pennsylvania Avenue NW (between 1 st and 15 th Streets NW); Lafayette Square; 17 th Street NW (between H Street and Constitution Avenue); Constitution Avenue NW (between 17 th and 23 rd Streets); the John F. Kennedy Center for the Performing Arts waterfront area; Theodore Roosevelt Island; National Park Service land in Virginia surrounding the George Washington Memorial Parkway; the 14 th Street Bridge area; and Maryland Avenue SW, from Maine Avenue SW, to Independence Avenue SW, at the U.S. Botanic Garden. Area II Also created as part of the original CWA statute, Area II is reserved for "subjects of lasting historical significance to the American people. " Area II encompasses all sections of the District of Columbia and its environs not part of the Reserve or Area I. Factors Potentially Influencing Commemorative Works' Completion Of the 37 commemorative works authorized for placement in the District of Columbia since 1986, 19 (51%) have been completed and dedicated, 12 (32%) are in progress, and 6 (16%) have lapsed authorizations. Several factors may affect a memorial foundation's ability to complete a memorial. These include settling on a desired site location, getting design approval, and raising the funds necessary to design and build a commemorative work. Site Location Choosing a memorial site location is one of the biggest tasks for all authorized sponsor groups. Many groups want locations on or near the National Mall. The creation of the Reserve in 2003, however, makes placement of a future memorial on the National Mall difficult. Subsequently, many sponsor groups attempt to locate sites as close to the National Mall as possible in order to ensure that visitors have easy access to the memorial. For example, the Dwight D. Eisenhower Memorial is to be located on land directly south of the Smithsonian National Air and Space Museum, thus providing a prominent—just off the Mall—location. Likewise, the foundation previously authorized to construct a memorial to honor John Adams and his family's legacy evaluated site locations as close to the National Mall as possible. Design Approval In 1986, as part of the CWA, Congress authorized the NCPC and the CFA to approve memorial designs. The NCPC and the CFA were tasked with carrying out the goals of the CWA, which are (1) to preserve the integrity of the comprehensive design of the L'Enfant and McMillan plans for the Nation's Capital; (2) to ensure the continued public use and enjoyment of open space in the District of Columbia and its environs, and to encourage the location of commemorative works within the urban fabric of the District of Columbia; (3) to preserve, protect, and maintain the limited amount of open space available to residents of, and visitors to, the Nation's Capital; and (4) to ensure that future commemorative works in areas administered by the National Park Service and the Administrator of General Services in the District of Columbia and its environs are … appropriately designed, constructed, and located; and … reflect a consensus of lasting national significance of the subjects involved. In some instances, sponsor groups have difficulty creating a memorial vision that meets the specifications of the NCPC, CFA, and the National Capital Memorial Advisory Commission (NCMAC). In these cases, groups will often have to present multiple designs to these bodies before getting final design approval. For example, the Eisenhower Memorial Commission has presented variations on the design for the Eisenhower Memorial to the NCPC multiple times. In all instances, the NCPC gave feedback to the memorial design team and asked them to continue work to comply with NCPC guidelines for memorial construction. Fundraising Perhaps the most challenging step in the commemorative works process for many sponsor groups is raising the necessary funds to design and build a commemorative work. Although most sponsor groups do not anticipate fundraising difficulties, some groups have experienced challenges. Failure to raise the necessary funds can be used as a reason not to extend a memorial's authorization beyond the initial seven-year period. In some cases, even though the CWA generally prohibits the use of federal funds for memorial design and construction, Congress has authorized appropriations to aid sponsor groups in their fundraising efforts. For example, in 2005, Congress appropriated $10 million to the Secretary of the Interior "for necessary expenses for the Memorial to Martin Luther King, Jr." The appropriation was designated as matching funds, making them available only after being matched by nonfederal contributions. Since the enactment of the Commemorative Works Act in 1986, 37 memorials and monuments have been authorized by statute. On a yearly basis, however, legislation is pending before Congress to consider a wide range of additional commemorative works. Pursuant to the CWA, future commemorative works will continue to be considered according to congressional guidelines. If new commemorative works are authorized or currently authorized commemorative works are completed, this report will be updated accordingly. Authorized Commemorative Works Since the passage of the Commemorative Works Act (CWA) in 1986, Congress has authorized 37 commemorative works to be placed in the District of Columbia or its environs; 32 of these have been sited on land governed by the CWA. Of these works, 12 are in progress and 6 have lapsed authorizations. Table 1 lists commemorative works authorized by Congress since 1986 that are in progress or whose authorization has lapsed. In-Progress Commemorative Works Currently, 12 commemorative works are in various stages of development. These include the following: In-Progress Memorials Dwight D. Eisenhower Memorial; Memorials Being Designed Slaves and Free Black Persons Who Served in the Revolutionary War Memorial; Memorials Being Planned with a Site Location World War II Prayer plaque, World War I Memorial, Korean War Memorial Wall of Remembrance, Second Division Memorial modifications, Desert Storm and Desert Shield Memorial, and Peace Corps Memorial; Memorials Being Planned and Evaluating Site Locations Gold Star Mothers Memorial, John Adams and his Family's Legacy Memorial, Global War on Terrorism Memorial, and Emergency Medical Services Memorial. Memorials Under Construction Currently, one memorial authorized pursuant to the CWA is under construction—the Dwight D. Eisenhower Memorial, which broke ground on November 2, 2017. The most recently dedicated memorial was the Victims of the Ukrainian Manmade Famine of 1932-1933 Memorial. Dwight D. Eisenhower In October 1999, Congress created a federal commission to "consider and formulate plans for ... a permanent memorial to Dwight D. Eisenhower, including its nature, design, construction, and location." In January 2002, Congress amended the initial statute to formally authorize the commission to create a memorial. In remarks during debate on additional amendments to the commission's statute in 2007, Representative Dennis Moore summarized Eisenhower's life and contributions to the United States: I am particularly proud to claim one of the greatest 20 th -century Americans as a fellow Kansan. He ranks as one of the preeminent figures in the global history of the 20 th century. Dwight Eisenhower spent his entire life in public service. His most well-known contributions include serving as Supreme Commander of the Allied Expeditionary Forces in World War II and as 34 th President of the United States, but Eisenhower also served as the first commander of NATO and as President of Columbia University. Dramatic changes occurred in America during his lifetime, many of which he participated in and influenced through his extraordinary leadership as President. Although Ike grew up before automobiles existed, he created the Interstate Highway System and took America into space. He created NASA, the Department of Health, Education, and Welfare, and the Federal Aviation Administration. He added Hawaii and Alaska to the United States and ended the Korean War. President Eisenhower desegregated the District of Columbia and sent federal troops into Little Rock, Arkansas, to enforce school integration. He defused international crises and inaugurated the national security policies that guided the nation for the next three decades, leading to the peaceful end of the Cold War. A career soldier, Eisenhower championed peace, freedom, justice and security, and as President he stressed the interdependence of those goals. He spent a lifetime fulfilling his duty to his country, always remembering to ask what's best for America. The memorial is to be located at Maryland Avenue and Independence Avenue, SW, between the National Air and Space Museum and the Lyndon B. Johnson Department of Education building. It is designed by architect Frank Gehry. On September 20, 2017, the CFA reviewed and approved the final design for the Eisenhower Memorial. On October 5, 2017, NCPC also approved the final memorial design. On November 2, 2017, a groundbreaking ceremony was held for the memorial. Figure 1 shows the final design for the Dwight D. Eisenhower Memorial as approved by NCPC and CFA. The Eisenhower Memorial is currently under construction. Memorials Being Designed World War II D-Day Prayer In June 2014, Congress authorized the placement of a plaque containing President Franklin D. Roosevelt's D-Day prayer at the "area of the World War II Memorial in the District of Columbia.... " During debate on the bill in the 112 th Congress ( H.R. 2070 ), Representative Bill Johnson summarized why he believed the prayer should be added to the World War II Memorial. This legislation directs the Secretary of the Interior to install at the World War II Memorial a suitable plaque or an inscription with the words that President Franklin Roosevelt prayed with the Nation on the morning of the D-day invasion. This prayer, which has been entitled "Let Our Hearts Be Stout,'' gave solace, comfort and strength to our Nation and our brave warriors as we fought against tyranny and oppression. The memorial was built to honor the 16 million who served in the Armed Forces of the United States during World War II and the more than 400,000 who died during the war ... I have no doubt that the prayer should be included among the tributes to the Greatest Generation memorialized on the National Mall, and I strongly urge all of my colleagues to support this legislation. The prayer plaque is to be located at the "Circle of Remembrance" on the northwest side of the World War II Memorial. The NCPC and the CFA both favor an "asymmetrical" design for the prayer plaque. Figure 2 shows the proposed location of the plaque at the Circle of Remembrance. Slaves and Free Black Persons Who Served in the Revolutionary War In December 2012, as part of the National Defense Authorization Act for Fiscal Year 2013, Congress authorized the National Mall Liberty Fund DC to establish a commemorative work "to honor the more than 5,000 courageous slaves and free Black persons who served as soldiers and sailors or provided civilian assistance during the American Revolution." Additionally, P.L. 112-239 repealed a 1986 authorization to the Black Revolutionary War Patriots Foundation to establish a commemorative work for black Revolutionary War veterans. In remarks introducing the 1986 legislation, Representative Mary Rose Oakar summarized the need, from her perspective, for a memorial to black Revolutionary War veterans: Mr. Speaker, as early as 1652 blacks were fighting as members of the Militia in Colonial America, thus beginning their history of achievement and heroism for our country. Yet, history books in American schools have for the most part omitted the contributions of black soldiers since the Revolutionary War, to our most recent conflict in Vietnam. This memorial to these black Americans is a small tribute to their bravery and valor, an important part of the founding of our country. Following its initial authorization in 1986, Congress approved the memorial's location in Area I on land that became part of the Reserve in 2003. Following the site designation, the memorial was reauthorized three times. Pursuant to P.L. 106-442 , the Black Revolutionary War Patriots Foundation's authorization for the memorial expired in 2005. In the Senate report accompanying the 2012 authorization ( S. 883 , 112 th Congress), the Senate Committee on Energy and Natural Resources summarized the importance of reauthorizing the memorial with a new sponsor. In 1986, Congress authorized the Black Revolutionary War Patriots Memorial Foundation to establish the Black Revolutionary War Patriots Memorial to honor the 5,000 courageous slaves and free Black persons who served as soldiers or provided civilian assistance during the American Revolution ( P.L. 99-558 ). In 1987 Congress enacted a second law, P.L. 100-265 , authorizing placement of that memorial within the monumental core area as it was then defined by the Commemorative Works Act. In 1988, the National Park Service, the Commission of Fine Arts, and the National Capital Planning Commission approved a site in Constitution Gardens for the Black Revolutionary War Patriots Memorial and, in 1996, approved the final design. Despite four extensions of the memorial's legislative authorization over 21 years, the Foundation was unable to raise sufficient funds for construction, the authority (and associated site and design approvals) finally lapsed in October 2005, and the Foundation disbanded with numerous outstanding debts and unpaid creditors. S. 883 would authorize another nonprofit organization, the National Mall Liberty Fund D.C., to construct a commemorative work honoring the same individuals as proposed by the Black Revolutionary War Patriots Memorial Foundation, subject to the requirements of the Commemorative Works Act. On September 26, 2014, President Obama signed H.J.Res. 120 to provide the memorial with a location in Area I. The sponsor group publicly expressed interest in three sites: the National Mall at 14 th Street and Independence Avenue, NW; Freedom Plaza; and Virginia Avenue and 19 th Streets, NW, with a strong preference for the National Mall site, which is currently under the jurisdiction of the U.S. Department of Agriculture. In the 114 th Congress (2015-2016), legislation was introduced to designate the Secretary of Agriculture as the officer "responsible for the consideration of the site and design proposals and the submission of such proposals on behalf of the sponsor to the Commission of Fine Arts and the National Capital Planning Commission" in order to apply the CWA to the memorial. No further action was taken on the measure. Figure 3 shows a memorial concept design. World War I Memorial In December 2014, as part of the FY2015 National Defense Authorization Act, Congress re-designated Pershing Park in the District of Columbia as "a World War I Memorial," and authorized the World War I Centennial Commission to "enhance the General Pershing Commemorative Work by constructing ... appropriate sculptural and other commemorative elements, including landscaping, to further honor the service of members of the United States Armed Forces in World War I." Pershing Park is located between E Street and Pennsylvania Avenue and 14 th and 15 th Streets, NW. Currently, the park contains a statue of General John J. Pershing. On January 26, 2016, the World War I Centennial Commission announced the winner of its design competition. Titled "The Weight of Sacrifice," the winning design envisions an "allegorical idea that public space and public freedom are hard won through the great sacrifices of countless individuals in the pursuit of liberty." On February 7, 2019, the commission presented the latest version of its design to the NCPC, and on May 16, 2019, to the CFA. Previously, a ceremonial groundbreaking for the memorial was held on November 9, 2017. Figure 4 shows a revised concept design for the World War I Memorial. Korean War Memorial Wall of Remembrance In October 2016, Congress authorized a wall of remembrance, which "shall include a list of names of members of the Armed Forces of the United States who died in the Korean War" to be added to the Korean War Memorial in the District of Columbia. The wall of remembrance is to be located "at the site of the Korean War Veterans Memorial." During debate on the bill ( H.R. 1475 , 114 th Congress) in the House, Representative Sam Johnson summarized why he believed it was important to add a wall of remembrance to the Korean War Veterans Memorial. My fellow Korean war veterans and I believe that the magnitude of this enormous sacrifice is not yet fully conveyed by the memorial in Washington, DC.... Similar to the Vietnam Veterans Memorial Wall, the Korean War Veterans Memorial Wall of Remembrance would eternally honor the brave Americans who gave their lives in defense of freedom during the Korean War. It would list their names as a visual record of their sacrifice. Figure 5 shows the concept design for the Korean War Memorial Wall of Remembrance. Second Division Memorial Bench Additions On March 23, 2018, as part of the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), modifications to the Second Division Memorial were authorized. The Second Division Memorial was initially dedicated on July 18, 1936, to commemorate the division's World War I casualties, and "two wings were dedicated on June 20, 1962, with significant battles of World War II inscribed on the west and of the Korean War on the east." P.L. 115-141 authorizes the placement of "additional commemorative elements or engravings on the raised platform or stone work of the existing Second Division Memorial ... to further honor the members of the Second Infantry Division who have given their lives in service to the United States." Figure 6 shows the current design of the Second Division Memorial. Desert Storm and Desert Shield In December 2014, as part of the FY2015 National Defense Authorization Act, Congress authorized the National Desert Storm Memorial Association to establish a National Desert Storm and Desert Shield Memorial in the District of Columbia to "commemorate and honor those who, as a member of the Armed forces, served on active duty in support of Operation Desert Storm or Operation Desert Shield." During debate on the House version of the bill ( H.R. 503 ), Representative Doc Hastings, chair of the House Natural Resources Committee, summarized the need for a memorial: Over 600,000 American servicemen deployed for Operations Desert Storm and Desert Shield and successfully led a coalition of over 30 countries to evict an invading army to secure the independence of Kuwait. This memorial will recognize their success, but it will also serve as a commemoration of those nearly 300 Americans who made the ultimate sacrifice on our behalf. On March 31, 2017, President Trump signed S.J.Res. 1 to provide the memorial with a location in Area I. The memorial will be located at the southwest corner of Constitution Avenue, NW, and 23 rd Street, NW. Figure 7 shows a rendering for the National Desert Storm Veteran's War Memorial. Peace Corps In January 2014, Congress authorized the Peace Corps Memorial Foundation to establish a commemorative work in the District of Columbia to "commemorate the mission of the Peace Corps and the ideals on which the Peace Corps was founded." During House debate on the bill ( S. 230 ), Representative Raúl Grijalva, ranking member of the House Natural Resources Committee, Subcommittee on Public Lands and Environmental Regulations, summarized his understanding of the aims of the Peace Corps Memorial: Last November, we marked the 50 th anniversary of President Kennedy's tragic assassination. Losing President Kennedy left a lasting scar on the American psyche, but his legacy lives on through his words and ideas, including the establishment of the Peace Corps, an institution that has sent over 200,000 Americans to 139 countries in its 52-year history. S. 230 authorizes construction of a memorial to commemorate the mission of the Peace Corps and the values on which it was founded. I cannot think of a better way to celebrate President Kennedy's legacy and the tremendous accomplishments of the Peace Corps. With the passage of S. 230 , we will be sending a worthwhile bill to the President's desk. I am glad we have been able to put our differences aside and pass such a meaningful bill in the first few weeks of the new year. To be located between 1 st Street, NW, Louisiana Avenue, NW, and C Street, NW, in the District of Columbia, the Peace Corps Memorial Foundation presented its design concept to the CFA and NCPC in early 2019. In March 2019, the CFA approved the memorial's concept design with comments to be addressed as the design moves forward toward a final design. In May 2019, the NCPC stated "that the proposed concept design does not adequately embrace the site's strengths or adequately respond to these challenges, particularly as they relate to visual resources, visitor use and experience, or natural resources." Figure 8 shows the concept design for the Peace Corps Memorial as presented to CFA and NCPC. Site Locations to Be Determined John Adams and His Family's Legacy In November 2001, Congress authorized the Adams Memorial Foundation to "establish a commemorative work on Federal land in the District of Columbia and its environs to honor former President John Adams, along with his wife Abigail Adams and former President John Quincy Adams, and the family's legacy of public service." In remarks during debate on the bill ( H.R. 1668 , 107 th Congress), Representative Joel Hefley summarized the importance of the Adams family to American history: Perhaps no American family has contributed as profoundly to public service as the family that gave the Nation its second President, John Adams; his wife, Abigail Adams; and their son, our sixth President, John Quincy Adams, who was also, by the way, a member of this body. The family's legacy was far reaching, continuing with John Quincy Adams's son, Charles Francis Adams, who was also a member of this body and an ambassador to England during the Civil War; and his son, Henry Adams, an eminent writer and scholar, and it goes on and on. In March 2019, as part of the enactment of the John D. Dingell, Jr. Conservation, Management, and Recreation Act, Congress created the Adams Memorial Commission. The Adams Memorial Commission replaces the Adams Memorial Foundation as the memorial's sponsor. Moving forward, the commission will be responsible for all aspects of the memorial's siting, design, and construction. Previously, in December 2013, the Adams Memorial Foundation's authorization expired. Prior to its lapse of authorization, the Adams Memorial Foundation was working with the NCMAC on the potential recommendation of Area I. While the commission had not endorsed any particular site location, it had recommended that the foundation continue its examination of numerous sites in the District of Columbia in order to find a suitable location. Gold Star Mothers In December 2012, as part of the National Defense Authorization Act for Fiscal Year 2013, Congress authorized the Gold Star Mothers National Monument Foundation to establish a commemorative work to "commemorate the sacrifices made by mothers, and made by their sons and daughters who as members of the Armed Forces make the ultimate sacrifice, in defense of the United States." In testimony before the House Committee on Natural Resources Subcommittee on National Parks, Forests, and Public Lands, the legislation's ( H.R. 1980 ) sponsor, Representative Jon Runyan, explained why he thought a memorial to Gold Star Mothers was needed: During World War I, mothers of sons and daughters who served in the Armed Forces displayed flags bearing a blue star to represent pride in their sons or daughters and their hope that they would return home safely. For more than 650,000 of these brave mothers, that hope was shattered, and their children never returned home. Afterwards many of them began displaying flags bearing gold stars to represent the sacrifice that their sons and daughters made in heroic service to our country. Over the years the gold star has come to represent a child who was killed while serving in the Armed Forces, during either war or peacetime. In December 2013, the Gold Star Mothers National Monument Foundation presented its site analysis to the National Capital Memorial Advisory Commission. In that informational presentation, they expressed a preference for a site location adjacent to Arlington National Cemetery. In January 2015, the NCPC expressed support for a site next to the Arlington National Cemetery Visitor's Center on Memorial Drive, and the CFA approved that site location. Figure 9 shows the Gold Star Mothers National Monument Foundation's concept design. Global War on Terrorism Memorial In August 2017, Congress authorized the Global War on Terrorism Memorial Foundation to establish a commemorative work in the District of Columbia to "commemorative and honor the members of the Armed Forces that served on active duty in support of the Global War on Terrorism." During debate on the bill ( H.R. 873 ) in the House, Representative Tom McClintock, chair of the Federal Lands Subcommittee of the House Committee on Natural Resources, stated why a memorial to the Global War on Terrorism is important, despite a statutory prohibition against war memorials for ongoing conflicts. The Commemorative Works Act requires that a war be ended for at least 10 years before planning can commence on a national memorial. There is good reason for this requirement: it gives history the insight to place the war in an historic context and to begin to fully appreciate its full significance to our country and future generations. But the war on terrorism has been fought in a decidedly different way than our past wars. We are now approaching the 16 th anniversary of the attack on New York and Washington. The veterans who sacrificed so much to keep that war away from our shores deserve some tangible and lasting tribute to their patriotism and altruism while they, their families, and their fellow countrymen can know it. The Gold Star families of our fallen heroes for whom the war will never end deserve some assurance that their sons and daughters will never be forgotten by a grateful Nation. We should remember that many of our Nation's heroes from World War II never lived to see the completion of the World War II Memorial, which was completed 59 years after the end of that conflict. For these reasons, this measure suspends the 10-year period in current law. It doesn't repeal it. It merely sets it aside for the unique circumstances of the current war on terrorism. Emergency Medical Services Memorial In October 2018, Congress authorized the National Emergency Medical Services Memorial Foundation to establish a commemorative work in the District of Columbia to "commemorate the commitment and service represented by emergency medical services." During House debate on the bill ( H.R. 1037 ), Representative Tom McClintock, chair of the Federal Lands Subcommittee of the House Committee on Natural Resources, stated why he considered a memorial to the emergency medical services providers to be important: Mr. Speaker, each year 850,000 EMS providers answer more than 30 million calls to serve 22 million patients in need at a moment's notice and without reservation. For these heroes who serve on the front lines of medicine, sacrifice is a part of their calling. EMTs and paramedics have a rate of injury that is about three times the national average for all occupations, and some pay the ultimate price in the service of helping others. The men and women of the emergency medical services profession face danger every day to save lives and help their neighbors in crisis. They respond to incidents ranging from a single person's medical emergency to natural and manmade disasters, including terrorist attacks. But while their first responder peers in law enforcement and firefighting have been honored with national memorials, EMS providers have not. Commemorative Works with Lapsed Authorizations Since 1986, six commemorative works authorized by Congress were not completed in the time allowed by the Commemorative Works Act and were not granted subsequent extensions by Congress. These memorials were to be constructed to honor Thomas Paine, Benjamin Banneker, Frederick Douglass, Brigadier General Francis Marion, to create a National Peace Garden, and to build a Vietnam Veterans Visitor Center. The following section describes the initial authorization for each of these memorials and congressional extensions of memorial authorization, if appropriate. National Peace Garden In June 1987, Congress authorized the Director of the National Park Service to enter into an agreement with the Peace Garden Project to "construct a garden to be known as the 'Peace Garden' on a site on Federal land in the District of Columbia to honor the commitment of the people of the United States to world peace." In remarks during debate on the bill ( H.R. 191 , 100 th Congress), Representative Steny Hoyer summarized the need for a memorial to peace: No one or nation can ever doubt the commitment of the American people to protecting our freedoms when threatened by foreign aggressors. Our Nation's Capital rightfully honors our heroic defenders of freedom—Americans who served their country courageously, gallantly, and at great risk to their lives. Our citizens have also exhibited an equal commitment for world peace and international law and justice. The creation of a Peace Garden is an appropriate symbol of our efforts to continuing to seek peaceful resolution of world conflict and the institution of the rule of law. Certainly, this century has been one of bloodiest and most violent in man's history. We have seen countless battles, wars, rebellions, massacres, and civil and international strife of all kinds—continuing examples of man's inhumanity toward his fellow man. At the same time, against this terrible backdrop, there have been encouraging strides toward world peace. As we honor those who have made sacrifices in war, through monuments, so, too, should we honor them by striving to ensure that the world they have left us will be a peaceful one. A garden would be a living monument to our efforts. In 1988, a site was approved for the Peace Garden at Hains Point in Southwest Washington, DC. Since its initial authorization in 1987, the National Peace Garden was reauthorized twice. The authorization expired on June 30, 2002. Thomas Paine In October 1992, Congress authorized the Thomas Paine National Historical Association to establish a memorial to honor Revolutionary War patriot Thomas Paine. In remarks summarizing the need for a memorial to Thomas Paine, Representative William Lacy Clay stated: Thomas Paine's writings were a catalyst of the American Revolution. His insistence upon the right to resist arbitrary rule has inspired oppressed peoples worldwide, just as it continues to inspire us. It is time that a grateful nation gives him a permanent place of honor in the capital of the country he helped build. Since its initial authorization in 1992, the authorization for the Thomas Paine memorial was extended once. Authorization for the memorial expired on December 31, 2003. Benjamin Banneker In November 1998, Congress authorized the Washington Interdependence Council of the District of Columbia to establish a memorial to "honor and commemorate the accomplishments of Mr. Benjamin Banneker." Adopted as part of a larger bill to create a national heritage area in Michigan, the authorization for the Benjamin Banneker Memorial passed the House and Senate without debate and by voice vote in October. In 2001, the National Park Service reported that the memorial was to be sited on the L'Enfant Promenade in Southwest Washington and be under the jurisdiction of the District of Columbia. Since its initial authorization, the Washington Interdependence Council has not been granted an extension to its original authorization, which expired in 2005. A bill ( S. 3886 ) was introduced in the 111 th Congress (2009-2010) to reauthorize a Benjamin Banneker Memorial. S. 3886 was referred to the Senate Committee on Energy and Natural Resources, but no further action was taken. Frederick Douglass In November 2000, Congress authorized the Frederick Douglass Gardens, Inc., "to establish a memorial and gardens on lands under the administrative jurisdiction of the Secretary of the Interior in the District of Columbia or its environs in honor and commemoration of Frederick Douglass." During debate, Representative James Hansen provided a summary of why a memorial to Frederick Douglass was important: Mr. Speaker, Frederick Douglass was one of the most prominent leaders of the 19 th century abolitionist movement. Born into slavery in eastern Maryland in 1818, Douglass escaped to the North as a young man where he became a world-renowned defender of human rights and eloquent orator, and later a Federal ambassador and advisor to several Presidents. Frederick Douglass was a powerful voice for human rights during the important period of American history, and is still revered today for his contributions against racial injustice. Early in 2001, the Frederick Douglass Memorial Gardens, Inc., expressed its preference for a site location near the Douglass Memorial Bridge in Southeast Washington, but no further action was taken by Congress to approve the site location. The Frederick Douglass Memorial's authorization expired in 2008. One attempt was made to reauthorize a Frederick Douglass Memorial during the 110 th Congress (2007-2008), but the bill was not reported by the House Committee on Natural Resources. Brigadier General Francis Marion In May 2008, Congress authorized the Marion Park Project to establish a commemorative work to honor Brigadier General Francis Marion. In testimony before the Senate Committee on Energy and Natural Resources, Subcommittee on National Parks, Daniel N. Wenk, deputy director for operations, National Park Service, supported the enactment of legislation authorizing a Brigadier General Francis Marion Memorial and explained why such a memorial meets criteria for commemoration in the District of Columbia. Brigadier General Francis Marion commanded the Williamsburg Militia Revolutionary force in South Carolina and was instrumental in delaying the advance of British forces by leading his troops in disrupting supply lines. He is credited for inventing and applying innovative battle tactics in this effort, keys to an ultimate victory for the American Colonies in the Revolutionary War. Additionally Brigadier General Marion's troops are believed to have been the first racially integrated force fighting for the United States. The Marion Park Project identified its preferred site location for the memorial at Marion Park in southeast Washington, DC. In December 2014, the National Capital Planning Commission expressed its support for the Marion Park site. Since its initial authorization, the Marion Memorial was reauthorized once. Authorization for the memorial expired on May 8, 2018. Vietnam Veterans Memorial Visitors Center In November 2003, Congress authorized the Vietnam Veterans Memorial Fund to create a visitor center at the Vietnam Veterans Memorial to "better inform and educate the public about the Vietnam Veterans Memorial and the Vietnam War." In the House report accompanying the legislation ( H.R. 1442 , 108 th Congress), the Committee on Resources summarized the need for a visitor center at the Vietnam Veterans Memorial: Since its dedication in 1982, the Vietnam Veterans Memorial, known to many as simply "The Wall," has done much to heal the nation's wounds after the bitterly divisive experience of the Vietnam War. For those who served, that year marked a sea change in the country's view of the Vietnam veteran. Americans began to understand and respect the Vietnam veterans' service and sacrifice. Today, over 4.4 million people visit The Wall every year—making it the most visited Memorial in the Nation's Capital. Today, most visitors to The Wall were not alive during the "Vietnam Era." Many veterans' organizations and many others believe today's visitor is shortchanged in his/her experience. Many leave The Wall not fully understanding its message. To that end, a visitor center would provide an educational experience for visitors by facilitating self-guided tours, collecting and displaying remembrances of those whose names are inscribed on the Memorial, and displaying exhibits discussing the history of the Memorial and the Vietnam War. The visitor's center would eventually replace a 168-foot National Park Service kiosk currently at the site. The visitor center was to be constructed underground and located across the street from the Vietnam Veterans Memorial and the Lincoln Memorial. In 2015, the NCPC and CFA approved the visitor center's design. On September 21, 2018, the Vietnam Veterans Memorial Fund announced their intenti on not to seek an extension to its authorization to build the visitor center, which expired on November 17, 2018. At that time, legislation had been introduced, but not considered, to extend the fund's authorization into 2022. Previously, the fund had received two statutory extensions. Summary:	null	96	41,254	41,256	41,256	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Since November 1986, the Commemorative Works Act (CWA) has provided the legal framework for the placement of commemorative works in the District of Columbia. The CWA was enacted to establish a statutory process for ensuring "that future commemorative works in areas administered by the National Park Service (NPS) and the General Services Administration (GSA) in the District of Columbia and its environs (1) are appropriately designed, constructed, and located and (2) reflect a consensus of the lasting significance of the subjects involved." Areas administered by other agencies are not subject to the CWA. Responsibility for overseeing the design, construction, and maintenance of such works was delegated to the Secretary of the Interior or the Administrator of the GSA, the National Capital Planning Commission (NCPC), and the U.S. Commission of Fine Arts (CFA). Additionally, the CWA restricts placement of commemorative works to certain areas of the District of Columbia based on the subject's historic importance. Pursuant to the CWA, locating a commemorative work on federally owned and administered land in the District of Columbia requires the federal government to maintain the memorial unless otherwise stipulated in the enabling legislation. In some cases, however, authorized memorials are ultimately sited on land that falls outside of CWA jurisdiction and outside the boundaries of the District of Columbia and its environs. For example, the Air Force Memorial was authorized by Congress for placement on land owned and administered by either NPS or GSA in the District of Columbia. Memorial organizers, however, chose a site near the Pentagon in Arlington, VA, that is owned and administered by the Department of Defense. Consequently, the Department of Defense, not the NPS or GSA, is responsible for maintenance. This report highlights in-progress works and memorials with lapsed authorizations since the passage of the CWA in 1986. The report provides information—located within text boxes for easy reference—on the statute(s) authorizing the work; the sponsor organization; statutory legislative extensions, if any; and the memorial's location or proposed location, if known. A picture or rendering of each work is also included, when available. Commemorative Works Areas of the District of Columbia The CWA divides areas administered by the NPS and the GSA in the District of Columbia and its environs into three sections for the placement of memorials: the Reserve, Area I, and Area II. For each area, the standards for memorial placement are specified in law, and congressional approval of monument location is required. Reserve The Reserve was created in November 2003, by P.L. 108-126 , to prohibit the addition of future memorials in an area defined as "the great cross-axis of the Mall, which generally extends from the United States Capitol to the Lincoln Memorial, and from the White House to the Jefferson Memorial ." Under the act, this area is considered "a substantially completed work of civic art. " Within this area, "to preserve the integrity of the Mall … the siting of new commemorative works is prohibited. " Area I Created as part of the original CWA in 1986, Area I is reserved for commemorative works of "preeminent historical and lasting significance to the United States. " Area I is roughly bounded by the West Front of the Capitol; Pennsylvania Avenue NW (between 1 st and 15 th Streets NW); Lafayette Square; 17 th Street NW (between H Street and Constitution Avenue); Constitution Avenue NW (between 17 th and 23 rd Streets); the John F. Kennedy Center for the Performing Arts waterfront area; Theodore Roosevelt Island; National Park Service land in Virginia surrounding the George Washington Memorial Parkway; the 14 th Street Bridge area; and Maryland Avenue SW, from Maine Avenue SW, to Independence Avenue SW, at the U.S. Botanic Garden. Area II Also created as part of the original CWA statute, Area II is reserved for "subjects of lasting historical significance to the American people. " Area II encompasses all sections of the District of Columbia and its environs not part of the Reserve or Area I. Factors Potentially Influencing Commemorative Works' Completion Of the 37 commemorative works authorized for placement in the District of Columbia since 1986, 19 (51%) have been completed and dedicated, 12 (32%) are in progress, and 6 (16%) have lapsed authorizations. Several factors may affect a memorial foundation's ability to complete a memorial. These include settling on a desired site location, getting design approval, and raising the funds necessary to design and build a commemorative work. Site Location Choosing a memorial site location is one of the biggest tasks for all authorized sponsor groups. Many groups want locations on or near the National Mall. The creation of the Reserve in 2003, however, makes placement of a future memorial on the National Mall difficult. Subsequently, many sponsor groups attempt to locate sites as close to the National Mall as possible in order to ensure that visitors have easy access to the memorial. For example, the Dwight D. Eisenhower Memorial is to be located on land directly south of the Smithsonian National Air and Space Museum, thus providing a prominent—just off the Mall—location. Likewise, the foundation previously authorized to construct a memorial to honor John Adams and his family's legacy evaluated site locations as close to the National Mall as possible. Design Approval In 1986, as part of the CWA, Congress authorized the NCPC and the CFA to approve memorial designs. The NCPC and the CFA were tasked with carrying out the goals of the CWA, which are (1) to preserve the integrity of the comprehensive design of the L'Enfant and McMillan plans for the Nation's Capital; (2) to ensure the continued public use and enjoyment of open space in the District of Columbia and its environs, and to encourage the location of commemorative works within the urban fabric of the District of Columbia; (3) to preserve, protect, and maintain the limited amount of open space available to residents of, and visitors to, the Nation's Capital; and (4) to ensure that future commemorative works in areas administered by the National Park Service and the Administrator of General Services in the District of Columbia and its environs are … appropriately designed, constructed, and located; and … reflect a consensus of lasting national significance of the subjects involved. In some instances, sponsor groups have difficulty creating a memorial vision that meets the specifications of the NCPC, CFA, and the National Capital Memorial Advisory Commission (NCMAC). In these cases, groups will often have to present multiple designs to these bodies before getting final design approval. For example, the Eisenhower Memorial Commission has presented variations on the design for the Eisenhower Memorial to the NCPC multiple times. In all instances, the NCPC gave feedback to the memorial design team and asked them to continue work to comply with NCPC guidelines for memorial construction. Fundraising Perhaps the most challenging step in the commemorative works process for many sponsor groups is raising the necessary funds to design and build a commemorative work. Although most sponsor groups do not anticipate fundraising difficulties, some groups have experienced challenges. Failure to raise the necessary funds can be used as a reason not to extend a memorial's authorization beyond the initial seven-year period. In some cases, even though the CWA generally prohibits the use of federal funds for memorial design and construction, Congress has authorized appropriations to aid sponsor groups in their fundraising efforts. For example, in 2005, Congress appropriated $10 million to the Secretary of the Interior "for necessary expenses for the Memorial to Martin Luther King, Jr." The appropriation was designated as matching funds, making them available only after being matched by nonfederal contributions. Since the enactment of the Commemorative Works Act in 1986, 37 memorials and monuments have been authorized by statute. On a yearly basis, however, legislation is pending before Congress to consider a wide range of additional commemorative works. Pursuant to the CWA, future commemorative works will continue to be considered according to congressional guidelines. If new commemorative works are authorized or currently authorized commemorative works are completed, this report will be updated accordingly. Authorized Commemorative Works Since the passage of the Commemorative Works Act (CWA) in 1986, Congress has authorized 37 commemorative works to be placed in the District of Columbia or its environs; 32 of these have been sited on land governed by the CWA. Of these works, 12 are in progress and 6 have lapsed authorizations. Table 1 lists commemorative works authorized by Congress since 1986 that are in progress or whose authorization has lapsed. In-Progress Commemorative Works Currently, 12 commemorative works are in various stages of development. These include the following: In-Progress Memorials Dwight D. Eisenhower Memorial; Memorials Being Designed Slaves and Free Black Persons Who Served in the Revolutionary War Memorial; Memorials Being Planned with a Site Location World War II Prayer plaque, World War I Memorial, Korean War Memorial Wall of Remembrance, Second Division Memorial modifications, Desert Storm and Desert Shield Memorial, and Peace Corps Memorial; Memorials Being Planned and Evaluating Site Locations Gold Star Mothers Memorial, John Adams and his Family's Legacy Memorial, Global War on Terrorism Memorial, and Emergency Medical Services Memorial. Memorials Under Construction Currently, one memorial authorized pursuant to the CWA is under construction—the Dwight D. Eisenhower Memorial, which broke ground on November 2, 2017. The most recently dedicated memorial was the Victims of the Ukrainian Manmade Famine of 1932-1933 Memorial. Dwight D. Eisenhower In October 1999, Congress created a federal commission to "consider and formulate plans for ... a permanent memorial to Dwight D. Eisenhower, including its nature, design, construction, and location." In January 2002, Congress amended the initial statute to formally authorize the commission to create a memorial. In remarks during debate on additional amendments to the commission's statute in 2007, Representative Dennis Moore summarized Eisenhower's life and contributions to the United States: I am particularly proud to claim one of the greatest 20 th -century Americans as a fellow Kansan. He ranks as one of the preeminent figures in the global history of the 20 th century. Dwight Eisenhower spent his entire life in public service. His most well-known contributions include serving as Supreme Commander of the Allied Expeditionary Forces in World War II and as 34 th President of the United States, but Eisenhower also served as the first commander of NATO and as President of Columbia University. Dramatic changes occurred in America during his lifetime, many of which he participated in and influenced through his extraordinary leadership as President. Although Ike grew up before automobiles existed, he created the Interstate Highway System and took America into space. He created NASA, the Department of Health, Education, and Welfare, and the Federal Aviation Administration. He added Hawaii and Alaska to the United States and ended the Korean War. President Eisenhower desegregated the District of Columbia and sent federal troops into Little Rock, Arkansas, to enforce school integration. He defused international crises and inaugurated the national security policies that guided the nation for the next three decades, leading to the peaceful end of the Cold War. A career soldier, Eisenhower championed peace, freedom, justice and security, and as President he stressed the interdependence of those goals. He spent a lifetime fulfilling his duty to his country, always remembering to ask what's best for America. The memorial is to be located at Maryland Avenue and Independence Avenue, SW, between the National Air and Space Museum and the Lyndon B. Johnson Department of Education building. It is designed by architect Frank Gehry. On September 20, 2017, the CFA reviewed and approved the final design for the Eisenhower Memorial. On October 5, 2017, NCPC also approved the final memorial design. On November 2, 2017, a groundbreaking ceremony was held for the memorial. Figure 1 shows the final design for the Dwight D. Eisenhower Memorial as approved by NCPC and CFA. The Eisenhower Memorial is currently under construction. Memorials Being Designed World War II D-Day Prayer In June 2014, Congress authorized the placement of a plaque containing President Franklin D. Roosevelt's D-Day prayer at the "area of the World War II Memorial in the District of Columbia.... " During debate on the bill in the 112 th Congress ( H.R. 2070 ), Representative Bill Johnson summarized why he believed the prayer should be added to the World War II Memorial. This legislation directs the Secretary of the Interior to install at the World War II Memorial a suitable plaque or an inscription with the words that President Franklin Roosevelt prayed with the Nation on the morning of the D-day invasion. This prayer, which has been entitled "Let Our Hearts Be Stout,'' gave solace, comfort and strength to our Nation and our brave warriors as we fought against tyranny and oppression. The memorial was built to honor the 16 million who served in the Armed Forces of the United States during World War II and the more than 400,000 who died during the war ... I have no doubt that the prayer should be included among the tributes to the Greatest Generation memorialized on the National Mall, and I strongly urge all of my colleagues to support this legislation. The prayer plaque is to be located at the "Circle of Remembrance" on the northwest side of the World War II Memorial. The NCPC and the CFA both favor an "asymmetrical" design for the prayer plaque. Figure 2 shows the proposed location of the plaque at the Circle of Remembrance. Slaves and Free Black Persons Who Served in the Revolutionary War In December 2012, as part of the National Defense Authorization Act for Fiscal Year 2013, Congress authorized the National Mall Liberty Fund DC to establish a commemorative work "to honor the more than 5,000 courageous slaves and free Black persons who served as soldiers and sailors or provided civilian assistance during the American Revolution." Additionally, P.L. 112-239 repealed a 1986 authorization to the Black Revolutionary War Patriots Foundation to establish a commemorative work for black Revolutionary War veterans. In remarks introducing the 1986 legislation, Representative Mary Rose Oakar summarized the need, from her perspective, for a memorial to black Revolutionary War veterans: Mr. Speaker, as early as 1652 blacks were fighting as members of the Militia in Colonial America, thus beginning their history of achievement and heroism for our country. Yet, history books in American schools have for the most part omitted the contributions of black soldiers since the Revolutionary War, to our most recent conflict in Vietnam. This memorial to these black Americans is a small tribute to their bravery and valor, an important part of the founding of our country. Following its initial authorization in 1986, Congress approved the memorial's location in Area I on land that became part of the Reserve in 2003. Following the site designation, the memorial was reauthorized three times. Pursuant to P.L. 106-442 , the Black Revolutionary War Patriots Foundation's authorization for the memorial expired in 2005. In the Senate report accompanying the 2012 authorization ( S. 883 , 112 th Congress), the Senate Committee on Energy and Natural Resources summarized the importance of reauthorizing the memorial with a new sponsor. In 1986, Congress authorized the Black Revolutionary War Patriots Memorial Foundation to establish the Black Revolutionary War Patriots Memorial to honor the 5,000 courageous slaves and free Black persons who served as soldiers or provided civilian assistance during the American Revolution ( P.L. 99-558 ). In 1987 Congress enacted a second law, P.L. 100-265 , authorizing placement of that memorial within the monumental core area as it was then defined by the Commemorative Works Act. In 1988, the National Park Service, the Commission of Fine Arts, and the National Capital Planning Commission approved a site in Constitution Gardens for the Black Revolutionary War Patriots Memorial and, in 1996, approved the final design. Despite four extensions of the memorial's legislative authorization over 21 years, the Foundation was unable to raise sufficient funds for construction, the authority (and associated site and design approvals) finally lapsed in October 2005, and the Foundation disbanded with numerous outstanding debts and unpaid creditors. S. 883 would authorize another nonprofit organization, the National Mall Liberty Fund D.C., to construct a commemorative work honoring the same individuals as proposed by the Black Revolutionary War Patriots Memorial Foundation, subject to the requirements of the Commemorative Works Act. On September 26, 2014, President Obama signed H.J.Res. 120 to provide the memorial with a location in Area I. The sponsor group publicly expressed interest in three sites: the National Mall at 14 th Street and Independence Avenue, NW; Freedom Plaza; and Virginia Avenue and 19 th Streets, NW, with a strong preference for the National Mall site, which is currently under the jurisdiction of the U.S. Department of Agriculture. In the 114 th Congress (2015-2016), legislation was introduced to designate the Secretary of Agriculture as the officer "responsible for the consideration of the site and design proposals and the submission of such proposals on behalf of the sponsor to the Commission of Fine Arts and the National Capital Planning Commission" in order to apply the CWA to the memorial. No further action was taken on the measure. Figure 3 shows a memorial concept design. World War I Memorial In December 2014, as part of the FY2015 National Defense Authorization Act, Congress re-designated Pershing Park in the District of Columbia as "a World War I Memorial," and authorized the World War I Centennial Commission to "enhance the General Pershing Commemorative Work by constructing ... appropriate sculptural and other commemorative elements, including landscaping, to further honor the service of members of the United States Armed Forces in World War I." Pershing Park is located between E Street and Pennsylvania Avenue and 14 th and 15 th Streets, NW. Currently, the park contains a statue of General John J. Pershing. On January 26, 2016, the World War I Centennial Commission announced the winner of its design competition. Titled "The Weight of Sacrifice," the winning design envisions an "allegorical idea that public space and public freedom are hard won through the great sacrifices of countless individuals in the pursuit of liberty." On February 7, 2019, the commission presented the latest version of its design to the NCPC, and on May 16, 2019, to the CFA. Previously, a ceremonial groundbreaking for the memorial was held on November 9, 2017. Figure 4 shows a revised concept design for the World War I Memorial. Korean War Memorial Wall of Remembrance In October 2016, Congress authorized a wall of remembrance, which "shall include a list of names of members of the Armed Forces of the United States who died in the Korean War" to be added to the Korean War Memorial in the District of Columbia. The wall of remembrance is to be located "at the site of the Korean War Veterans Memorial." During debate on the bill ( H.R. 1475 , 114 th Congress) in the House, Representative Sam Johnson summarized why he believed it was important to add a wall of remembrance to the Korean War Veterans Memorial. My fellow Korean war veterans and I believe that the magnitude of this enormous sacrifice is not yet fully conveyed by the memorial in Washington, DC.... Similar to the Vietnam Veterans Memorial Wall, the Korean War Veterans Memorial Wall of Remembrance would eternally honor the brave Americans who gave their lives in defense of freedom during the Korean War. It would list their names as a visual record of their sacrifice. Figure 5 shows the concept design for the Korean War Memorial Wall of Remembrance. Second Division Memorial Bench Additions On March 23, 2018, as part of the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), modifications to the Second Division Memorial were authorized. The Second Division Memorial was initially dedicated on July 18, 1936, to commemorate the division's World War I casualties, and "two wings were dedicated on June 20, 1962, with significant battles of World War II inscribed on the west and of the Korean War on the east." P.L. 115-141 authorizes the placement of "additional commemorative elements or engravings on the raised platform or stone work of the existing Second Division Memorial ... to further honor the members of the Second Infantry Division who have given their lives in service to the United States." Figure 6 shows the current design of the Second Division Memorial. Desert Storm and Desert Shield In December 2014, as part of the FY2015 National Defense Authorization Act, Congress authorized the National Desert Storm Memorial Association to establish a National Desert Storm and Desert Shield Memorial in the District of Columbia to "commemorate and honor those who, as a member of the Armed forces, served on active duty in support of Operation Desert Storm or Operation Desert Shield." During debate on the House version of the bill ( H.R. 503 ), Representative Doc Hastings, chair of the House Natural Resources Committee, summarized the need for a memorial: Over 600,000 American servicemen deployed for Operations Desert Storm and Desert Shield and successfully led a coalition of over 30 countries to evict an invading army to secure the independence of Kuwait. This memorial will recognize their success, but it will also serve as a commemoration of those nearly 300 Americans who made the ultimate sacrifice on our behalf. On March 31, 2017, President Trump signed S.J.Res. 1 to provide the memorial with a location in Area I. The memorial will be located at the southwest corner of Constitution Avenue, NW, and 23 rd Street, NW. Figure 7 shows a rendering for the National Desert Storm Veteran's War Memorial. Peace Corps In January 2014, Congress authorized the Peace Corps Memorial Foundation to establish a commemorative work in the District of Columbia to "commemorate the mission of the Peace Corps and the ideals on which the Peace Corps was founded." During House debate on the bill ( S. 230 ), Representative Raúl Grijalva, ranking member of the House Natural Resources Committee, Subcommittee on Public Lands and Environmental Regulations, summarized his understanding of the aims of the Peace Corps Memorial: Last November, we marked the 50 th anniversary of President Kennedy's tragic assassination. Losing President Kennedy left a lasting scar on the American psyche, but his legacy lives on through his words and ideas, including the establishment of the Peace Corps, an institution that has sent over 200,000 Americans to 139 countries in its 52-year history. S. 230 authorizes construction of a memorial to commemorate the mission of the Peace Corps and the values on which it was founded. I cannot think of a better way to celebrate President Kennedy's legacy and the tremendous accomplishments of the Peace Corps. With the passage of S. 230 , we will be sending a worthwhile bill to the President's desk. I am glad we have been able to put our differences aside and pass such a meaningful bill in the first few weeks of the new year. To be located between 1 st Street, NW, Louisiana Avenue, NW, and C Street, NW, in the District of Columbia, the Peace Corps Memorial Foundation presented its design concept to the CFA and NCPC in early 2019. In March 2019, the CFA approved the memorial's concept design with comments to be addressed as the design moves forward toward a final design. In May 2019, the NCPC stated "that the proposed concept design does not adequately embrace the site's strengths or adequately respond to these challenges, particularly as they relate to visual resources, visitor use and experience, or natural resources." Figure 8 shows the concept design for the Peace Corps Memorial as presented to CFA and NCPC. Site Locations to Be Determined John Adams and His Family's Legacy In November 2001, Congress authorized the Adams Memorial Foundation to "establish a commemorative work on Federal land in the District of Columbia and its environs to honor former President John Adams, along with his wife Abigail Adams and former President John Quincy Adams, and the family's legacy of public service." In remarks during debate on the bill ( H.R. 1668 , 107 th Congress), Representative Joel Hefley summarized the importance of the Adams family to American history: Perhaps no American family has contributed as profoundly to public service as the family that gave the Nation its second President, John Adams; his wife, Abigail Adams; and their son, our sixth President, John Quincy Adams, who was also, by the way, a member of this body. The family's legacy was far reaching, continuing with John Quincy Adams's son, Charles Francis Adams, who was also a member of this body and an ambassador to England during the Civil War; and his son, Henry Adams, an eminent writer and scholar, and it goes on and on. In March 2019, as part of the enactment of the John D. Dingell, Jr. Conservation, Management, and Recreation Act, Congress created the Adams Memorial Commission. The Adams Memorial Commission replaces the Adams Memorial Foundation as the memorial's sponsor. Moving forward, the commission will be responsible for all aspects of the memorial's siting, design, and construction. Previously, in December 2013, the Adams Memorial Foundation's authorization expired. Prior to its lapse of authorization, the Adams Memorial Foundation was working with the NCMAC on the potential recommendation of Area I. While the commission had not endorsed any particular site location, it had recommended that the foundation continue its examination of numerous sites in the District of Columbia in order to find a suitable location. Gold Star Mothers In December 2012, as part of the National Defense Authorization Act for Fiscal Year 2013, Congress authorized the Gold Star Mothers National Monument Foundation to establish a commemorative work to "commemorate the sacrifices made by mothers, and made by their sons and daughters who as members of the Armed Forces make the ultimate sacrifice, in defense of the United States." In testimony before the House Committee on Natural Resources Subcommittee on National Parks, Forests, and Public Lands, the legislation's ( H.R. 1980 ) sponsor, Representative Jon Runyan, explained why he thought a memorial to Gold Star Mothers was needed: During World War I, mothers of sons and daughters who served in the Armed Forces displayed flags bearing a blue star to represent pride in their sons or daughters and their hope that they would return home safely. For more than 650,000 of these brave mothers, that hope was shattered, and their children never returned home. Afterwards many of them began displaying flags bearing gold stars to represent the sacrifice that their sons and daughters made in heroic service to our country. Over the years the gold star has come to represent a child who was killed while serving in the Armed Forces, during either war or peacetime. In December 2013, the Gold Star Mothers National Monument Foundation presented its site analysis to the National Capital Memorial Advisory Commission. In that informational presentation, they expressed a preference for a site location adjacent to Arlington National Cemetery. In January 2015, the NCPC expressed support for a site next to the Arlington National Cemetery Visitor's Center on Memorial Drive, and the CFA approved that site location. Figure 9 shows the Gold Star Mothers National Monument Foundation's concept design. Global War on Terrorism Memorial In August 2017, Congress authorized the Global War on Terrorism Memorial Foundation to establish a commemorative work in the District of Columbia to "commemorative and honor the members of the Armed Forces that served on active duty in support of the Global War on Terrorism." During debate on the bill ( H.R. 873 ) in the House, Representative Tom McClintock, chair of the Federal Lands Subcommittee of the House Committee on Natural Resources, stated why a memorial to the Global War on Terrorism is important, despite a statutory prohibition against war memorials for ongoing conflicts. The Commemorative Works Act requires that a war be ended for at least 10 years before planning can commence on a national memorial. There is good reason for this requirement: it gives history the insight to place the war in an historic context and to begin to fully appreciate its full significance to our country and future generations. But the war on terrorism has been fought in a decidedly different way than our past wars. We are now approaching the 16 th anniversary of the attack on New York and Washington. The veterans who sacrificed so much to keep that war away from our shores deserve some tangible and lasting tribute to their patriotism and altruism while they, their families, and their fellow countrymen can know it. The Gold Star families of our fallen heroes for whom the war will never end deserve some assurance that their sons and daughters will never be forgotten by a grateful Nation. We should remember that many of our Nation's heroes from World War II never lived to see the completion of the World War II Memorial, which was completed 59 years after the end of that conflict. For these reasons, this measure suspends the 10-year period in current law. It doesn't repeal it. It merely sets it aside for the unique circumstances of the current war on terrorism. Emergency Medical Services Memorial In October 2018, Congress authorized the National Emergency Medical Services Memorial Foundation to establish a commemorative work in the District of Columbia to "commemorate the commitment and service represented by emergency medical services." During House debate on the bill ( H.R. 1037 ), Representative Tom McClintock, chair of the Federal Lands Subcommittee of the House Committee on Natural Resources, stated why he considered a memorial to the emergency medical services providers to be important: Mr. Speaker, each year 850,000 EMS providers answer more than 30 million calls to serve 22 million patients in need at a moment's notice and without reservation. For these heroes who serve on the front lines of medicine, sacrifice is a part of their calling. EMTs and paramedics have a rate of injury that is about three times the national average for all occupations, and some pay the ultimate price in the service of helping others. The men and women of the emergency medical services profession face danger every day to save lives and help their neighbors in crisis. They respond to incidents ranging from a single person's medical emergency to natural and manmade disasters, including terrorist attacks. But while their first responder peers in law enforcement and firefighting have been honored with national memorials, EMS providers have not. Commemorative Works with Lapsed Authorizations Since 1986, six commemorative works authorized by Congress were not completed in the time allowed by the Commemorative Works Act and were not granted subsequent extensions by Congress. These memorials were to be constructed to honor Thomas Paine, Benjamin Banneker, Frederick Douglass, Brigadier General Francis Marion, to create a National Peace Garden, and to build a Vietnam Veterans Visitor Center. The following section describes the initial authorization for each of these memorials and congressional extensions of memorial authorization, if appropriate. National Peace Garden In June 1987, Congress authorized the Director of the National Park Service to enter into an agreement with the Peace Garden Project to "construct a garden to be known as the 'Peace Garden' on a site on Federal land in the District of Columbia to honor the commitment of the people of the United States to world peace." In remarks during debate on the bill ( H.R. 191 , 100 th Congress), Representative Steny Hoyer summarized the need for a memorial to peace: No one or nation can ever doubt the commitment of the American people to protecting our freedoms when threatened by foreign aggressors. Our Nation's Capital rightfully honors our heroic defenders of freedom—Americans who served their country courageously, gallantly, and at great risk to their lives. Our citizens have also exhibited an equal commitment for world peace and international law and justice. The creation of a Peace Garden is an appropriate symbol of our efforts to continuing to seek peaceful resolution of world conflict and the institution of the rule of law. Certainly, this century has been one of bloodiest and most violent in man's history. We have seen countless battles, wars, rebellions, massacres, and civil and international strife of all kinds—continuing examples of man's inhumanity toward his fellow man. At the same time, against this terrible backdrop, there have been encouraging strides toward world peace. As we honor those who have made sacrifices in war, through monuments, so, too, should we honor them by striving to ensure that the world they have left us will be a peaceful one. A garden would be a living monument to our efforts. In 1988, a site was approved for the Peace Garden at Hains Point in Southwest Washington, DC. Since its initial authorization in 1987, the National Peace Garden was reauthorized twice. The authorization expired on June 30, 2002. Thomas Paine In October 1992, Congress authorized the Thomas Paine National Historical Association to establish a memorial to honor Revolutionary War patriot Thomas Paine. In remarks summarizing the need for a memorial to Thomas Paine, Representative William Lacy Clay stated: Thomas Paine's writings were a catalyst of the American Revolution. His insistence upon the right to resist arbitrary rule has inspired oppressed peoples worldwide, just as it continues to inspire us. It is time that a grateful nation gives him a permanent place of honor in the capital of the country he helped build. Since its initial authorization in 1992, the authorization for the Thomas Paine memorial was extended once. Authorization for the memorial expired on December 31, 2003. Benjamin Banneker In November 1998, Congress authorized the Washington Interdependence Council of the District of Columbia to establish a memorial to "honor and commemorate the accomplishments of Mr. Benjamin Banneker." Adopted as part of a larger bill to create a national heritage area in Michigan, the authorization for the Benjamin Banneker Memorial passed the House and Senate without debate and by voice vote in October. In 2001, the National Park Service reported that the memorial was to be sited on the L'Enfant Promenade in Southwest Washington and be under the jurisdiction of the District of Columbia. Since its initial authorization, the Washington Interdependence Council has not been granted an extension to its original authorization, which expired in 2005. A bill ( S. 3886 ) was introduced in the 111 th Congress (2009-2010) to reauthorize a Benjamin Banneker Memorial. S. 3886 was referred to the Senate Committee on Energy and Natural Resources, but no further action was taken. Frederick Douglass In November 2000, Congress authorized the Frederick Douglass Gardens, Inc., "to establish a memorial and gardens on lands under the administrative jurisdiction of the Secretary of the Interior in the District of Columbia or its environs in honor and commemoration of Frederick Douglass." During debate, Representative James Hansen provided a summary of why a memorial to Frederick Douglass was important: Mr. Speaker, Frederick Douglass was one of the most prominent leaders of the 19 th century abolitionist movement. Born into slavery in eastern Maryland in 1818, Douglass escaped to the North as a young man where he became a world-renowned defender of human rights and eloquent orator, and later a Federal ambassador and advisor to several Presidents. Frederick Douglass was a powerful voice for human rights during the important period of American history, and is still revered today for his contributions against racial injustice. Early in 2001, the Frederick Douglass Memorial Gardens, Inc., expressed its preference for a site location near the Douglass Memorial Bridge in Southeast Washington, but no further action was taken by Congress to approve the site location. The Frederick Douglass Memorial's authorization expired in 2008. One attempt was made to reauthorize a Frederick Douglass Memorial during the 110 th Congress (2007-2008), but the bill was not reported by the House Committee on Natural Resources. Brigadier General Francis Marion In May 2008, Congress authorized the Marion Park Project to establish a commemorative work to honor Brigadier General Francis Marion. In testimony before the Senate Committee on Energy and Natural Resources, Subcommittee on National Parks, Daniel N. Wenk, deputy director for operations, National Park Service, supported the enactment of legislation authorizing a Brigadier General Francis Marion Memorial and explained why such a memorial meets criteria for commemoration in the District of Columbia. Brigadier General Francis Marion commanded the Williamsburg Militia Revolutionary force in South Carolina and was instrumental in delaying the advance of British forces by leading his troops in disrupting supply lines. He is credited for inventing and applying innovative battle tactics in this effort, keys to an ultimate victory for the American Colonies in the Revolutionary War. Additionally Brigadier General Marion's troops are believed to have been the first racially integrated force fighting for the United States. The Marion Park Project identified its preferred site location for the memorial at Marion Park in southeast Washington, DC. In December 2014, the National Capital Planning Commission expressed its support for the Marion Park site. Since its initial authorization, the Marion Memorial was reauthorized once. Authorization for the memorial expired on May 8, 2018. Vietnam Veterans Memorial Visitors Center In November 2003, Congress authorized the Vietnam Veterans Memorial Fund to create a visitor center at the Vietnam Veterans Memorial to "better inform and educate the public about the Vietnam Veterans Memorial and the Vietnam War." In the House report accompanying the legislation ( H.R. 1442 , 108 th Congress), the Committee on Resources summarized the need for a visitor center at the Vietnam Veterans Memorial: Since its dedication in 1982, the Vietnam Veterans Memorial, known to many as simply "The Wall," has done much to heal the nation's wounds after the bitterly divisive experience of the Vietnam War. For those who served, that year marked a sea change in the country's view of the Vietnam veteran. Americans began to understand and respect the Vietnam veterans' service and sacrifice. Today, over 4.4 million people visit The Wall every year—making it the most visited Memorial in the Nation's Capital. Today, most visitors to The Wall were not alive during the "Vietnam Era." Many veterans' organizations and many others believe today's visitor is shortchanged in his/her experience. Many leave The Wall not fully understanding its message. To that end, a visitor center would provide an educational experience for visitors by facilitating self-guided tours, collecting and displaying remembrances of those whose names are inscribed on the Memorial, and displaying exhibits discussing the history of the Memorial and the Vietnam War. The visitor's center would eventually replace a 168-foot National Park Service kiosk currently at the site. The visitor center was to be constructed underground and located across the street from the Vietnam Veterans Memorial and the Lincoln Memorial. In 2015, the NCPC and CFA approved the visitor center's design. On September 21, 2018, the Vietnam Veterans Memorial Fund announced their intenti on not to seek an extension to its authorization to build the visitor center, which expired on November 17, 2018. At that time, legislation had been introduced, but not considered, to extend the fund's authorization into 2022. Previously, the fund had received two statutory extensions.	Summary:	gov_report	1,024	null	57
crs_R46359	crs_R46359_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The Coronavirus Disease 2019 (COVID-19) pandemic is affecting communities around the world and throughout the United States, with case counts growing daily. As private health insurance is the predominant source of health coverage in the United States, there is considerable congressional interest in understanding private health insurance coverage of health benefits related to COVID-19 diagnosis, treatment, and prevention. This report addresses frequently asked questions about covered benefits and consumer cost sharing related to COVID-19 testing, treatment, and a potential vaccine. It discusses recent legislation, references relevant existing federal requirements and recent administrative interpretations of them in relation to COVID-19, and notes state and private-sector actions. It begins with background information on types and regulation of private health insurance plans. The Families First Coronavirus Response Act (FFCRA; P.L. 116-127 ) requires specified types of private health insurance plans to cover COVID-19 testing, administration of the test, and related items and services, without consumer cost sharing. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136 ) further addresses private health insurance coverage of COVID-19 testing, and requires coverage of a potential vaccine and other preventive services without cost sharing, if they are recommended by specified federal entities. There are no federal requirements that specifically require coverage of COVID-19 treatment services. However, one or more existing federal requirements are potentially relevant, as discussed in this report. Some states have also announced requirements related to covered benefits and consumer costs, and some insurers have reported that they will voluntarily cover certain relevant benefits. This report discusses most U.S. private health insurance plans' coverage of health care items and services related to COVID-19, but it generally does not discuss the delivery of those services, insurers' payments to health care providers, or private health insurance coverage of other benefits. The Appendix lists Congressional Research Service (CRS) analysts who can discuss with congressional clients other topics of interest related to private health insurance and COVID-19, including types of plans and coverage of benefits not addressed in this report. Also beyond the scope of this report are public health coverage programs (e.g., Medicare); the domestic and international public health responses to COVID-19; and economic, human services, and other nonhealth issues. For further information on these topics, congressional clients can access the CRS Coronavirus Disease 2019 resources page at https://www.crs.gov/resources/coronavirus-disease-2019 . The information in this report is current as of its publication date and may be superseded by subsequent congressional or administrative action. Congressional clients may contact the report author and/or the experts listed in the Appendix for questions about further developments. In addition, Centers for Medicare & Medicaid Services (CMS) guidance related to private health insurance and COVID-19 is compiled on its website. Background on Private Health Insurance The private health insurance market includes both the group market (largely made up of employer-sponsored insurance) and the individual market (which includes plans directly purchased from an insurer). The group market is divided into small- and large-group market segments; a small group is typically defined as a group of up to 50 individuals (e.g., employees), and a large group is typically defined as one with 51 or more individuals. Employers and other group health plan sponsors may purchase coverage from an insurer in the small- and large-group markets (i.e., they may fully insure ). Sponsors may instead finance coverage themselves (i.e., they may self-insure ). The individual and small-group markets include plans sold on and off the individual and small-group health insurance exchanges, respectively. Covered benefits, consumer costs, and other plan features may vary by plan, subject to applicable federal and state requirements. The federal government may regulate all the coverage types noted above (i.e., individual coverage, fully insured small- and large-group coverage, and self-insured group plans), and states may regulate all but self-insured group plans. Federal and state requirements may vary by coverage type. This report focuses on private-sector plans explained above. There are some variations of these coverage types, and there are other types of private health coverage arrangements, which may or may not be subject to the requirements discussed in this report, or for which there may be other policy questions related to COVID-19. These other coverage types are out of the scope of this report, but a number of them are identified in the Appendix , along with resources for further information. One coverage variation, grandfathered plans , is included in this report because it is explicitly referenced in legislation relevant to COVID-19 and private health insurance coverage. Grandfathered plans are individual or group plans in which at least one individual was enrolled as of enactment of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended), and which continue to meet certain criteria. Plans that maintain their grandfathered status are exempt from some, but not all, federal requirements. Another type of coverage, short-term, limited duration insurance (STLDI or STLD plans), is also included in this report, because it is explicitly excluded from a coverage definition cited by relevant legislation. STLDI is coverage, generally sold in the individual market, which meets certain definitional criteria. The statutory definition of "individual health insurance coverage" excludes STLDI; thus, STLDI is exempt from complying with all federal health insurance requirements applicable to individual health insurance plans. FAQ: COVID-19 Covered Benefits and Cost Sharing The remainder of this report addresses private health insurance coverage of COVID-19 testing, treatment, and vaccination, when a vaccine becomes available. Where there are federal requirements related to such coverage, it is useful to understand the following: Is the service or item required to be covered? If so, is cost sharing allowed? In general, private health insurance cost sharing includes deductibles, coinsurance, and copayments. Are plans allowed to impose prior authorization or other medical management requirements? For example, some insurers require that they (the insurer) provide prior authorization for routine hospital inpatient care, and/or require that primary care physicians provide approval or referrals for specialty care, as a condition for covering the care. Does the coverage requirement depend on how or where the service or item is furnished (e.g., by an in-network versus out-of-network provider)? Under private insurance, benefit coverage and consumer cost sharing is often contingent upon whether the service or item is furnished by a provider that the insurer has contracted with (i.e., whether that provider is in network for a given plan). In instances where a contract between an insurer and provider does not exist, the provider is considered out of network . When does the coverage requirement go into effect? What types of plans are subject to the coverage requirement? To the extent that information is available, these issues are addressed with regard to private health insurance coverage of COVID-19 testing, treatment, and vaccination. Table 1 summarizes key information. Are Plans Required to Cover COVID-19 Testing? FFCRA and CARES Act Prior to the enactment of the FFCRA ( P.L. 116-127 ), there were no federal requirements specifically mandating private health insurance coverage of items or services related to COVID-19 testing. Section 6001 of the FFCRA requires most private health insurance plans to cover COVID-19 testing, administration of the test, and related items and services, as defined in the act. Per FFCRA, the coverage must be provided without consumer cost sharing, including deductibles, copayments, or coinsurance. Prior authorization or other medical management requirements are prohibited. The definition of testing that must be covered was expanded by Section 3201 of the CARES Act ( P.L. 116-136 ). In addition, the Department of Labor (DOL), Department of Health and Human Services (HHS), and the Treasury issued an FAQ document on April 11, 2020 (hereinafter, "Tri-Agency April 11 FAQ"), on the private health insurance coverage requirements in FFCRA and the CARES Act. Together, the acts and guidance require coverage of certain tests and services, as summarized below. Specified COVID-19 diagnostic tests, including both molecular (e.g., polymerase chain reaction, or PCR, tests) and serological tests (i.e., antibody tests), and the administration of such tests are covered. "Items and services furnished to an individual during [visits, as specified below] that result in an order for or administration of [an applicable COVID-19 test], but only to the extent such items and services relate to the furnishing or administration of such product or to the evaluation of such individual for purposes of determining the need of such individual for such product." This definition could encompass additional diagnostic testing associated with the visit. However, it would not encompass treatment for COVID-19-associated illnesses. The coverage requirements apply to the specified items and services when furnished at visits including to health care provider offices, urgent care centers, emergency rooms, and "nontraditional" settings, including drive-through testing sites. The requirements apply to both in-person and telehealth visits. FFCRA does not specify whether its coverage requirements apply when the test is furnished by an out-of-network provider. However Section 3202 of the CARES Act addresses insurer payments to in-network and out-of-network providers. In addition, the Tri-Agency April 11 FAQ clarifies that the FFCRA coverage requirements apply both in network and out of network. The coverage requirements in FFCRA apply only to the specified items and services that are furnished during the COVID-19 public health emergency period described in that act, as of the date the FFCRA was enacted (March 18, 2020). These requirements apply to individual health insurance coverage and to small- and large-group plans, whether fully insured or self-insured. This includes grandfathered individual or group plans, which are exempt from certain other federal private health insurance requirements. Per the definition of individual health insurance coverage cited in the act, the requirements do not apply to STLDI. State and Private-Sector Actions In recent weeks, some states have announced coverage requirements, and some insurers have clarified or expanded their policies, regarding coverage of COVID-19 testing, among other services. However, states cannot regulate self-insured plans, and insurer announcements do not necessarily apply to those plans either. FFCRA does apply to self-insured group plans in addition to the other plan types discussed above. To the extent that state requirements about or plans' voluntary coverage of COVID-19 testing did not extend as far as FFCRA and CARES Act requirements, the federal laws supersede them. However, state requirements and plans' voluntary coverage may exceed applicable federal requirements, as long as they do not prevent the implementation of any federal requirements. Even though federal law now requires most plans to cover specified COVID-19 testing services without cost sharing, it may be useful for consumers to contact their insurers or plan sponsors to understand their coverage. Subject to applicable federal and state requirements, coverage of the COVID-19 test and related services and items may vary by plan. Are Plans Required to Cover COVID-19 Treatment? Essential Health Benefits Guidance on COVID-19 Coverage Although FFCRA requires certain plans to cover specified COVID-19 testing services without cost sharing, neither FFCRA nor the CARES Act mandates coverage of COVID-19 treatment services. There is no federal requirement specifically mandating private health insurance coverage of items or services related to COVID-19 treatment. However, one or more existing federal requirements are potentially relevant, subject to state implementation and plan variation. There is a federal statutory requirement that certain plans cover a core set of 10 categories of essential health benefits (EHB). However, states, rather than the federal government, generally specify the benefit coverage requirements within those categories. Current regulation allows each state to select an EHB-benchmark plan. The benchmark plan serves as a reference plan on which plans subject to EHB requirements must substantially base their benefits packages. Because states select their own EHB-benchmark plans, there is considerable variation in EHB coverage from state to state. On March 5, 2020, and March 12, 2020, CMS issued guidance addressing the potential relevance of EHB requirements to coverage of COVID-19 treatment, among other benefits, subject to variation in states' EHB-benchmark plan designations. According to the March 12 document, "all 51 EHB-benchmark plans currently provide coverage for the diagnosis and treatment of COVID-19" (emphasis added), but coverage of specific benefits within the 10 categories of EHB (e.g., hospitalization, laboratory services) may vary by state and by plan. The March 12 document suggests that coverage of medically necessary hospitalizations would include coverage of medically necessary isolation and quarantine during the hospital admission, subject to state and plan variation. Quarantine in other settings, such as at home, is not a medical benefit. The document notes, "however, other medical benefits that occur in the home that are required by and under the supervision of a medical provider, such as home health care or telemedicine, may be covered as EHB," subject to state and plan variation. The March 12 document confirms that "exact coverage details and cost-sharing amounts for individual services may vary by plan, and some plans may require prior authorization before these services are covered." In other words, even where certain treatment items and services are required to be covered as EHB in a state, cost-sharing and medical management requirements could apply, subject to applicable federal and state requirements. In addition, cost sharing and other coverage details may vary for services furnished by out-of-network providers. Individual and fully insured small-group plans are subject to EHB requirements. Large-group plans, self-insured plans, grandfathered plans, and STLDI are not. Whether or not certain treatment services are defined as EHB in a state, other state benefit coverage requirements may be relevant to COVID-19 treatment. Plans may also voluntarily cover benefits. See " State and Private-Sector Actions " below. Certain Federal Requirements Related to Cost Sharing Other existing federal requirements are also relevant to consumer cost sharing on COVID-19 treatment services, to the extent that such treatments are covered by the consumer's plan, and largely to the extent that they are defined by a state as EHB. For example, plans must comply with annual l imits on consumers' out-of-pocket spending (i.e., cost sharing, including deductibles, coinsurance, and copayments) on in-network coverage of the EHB. If certain treatment services are defined as EHB in a state, and are furnished by an in-network provider, consumers' out-of-pocket costs for the plan year would be limited as discussed below. If certain treatment services are not defined as EHB in a state, and/or are furnished by out-of-network providers, this out-of-pocket maximum would not necessarily apply. In 2020, the out-of-pocket limits cannot exceed $8,150 for self-only coverage and $16,300 for coverage other than self-only. This means that once a consumer has spent up to that amount in cost sharing on applicable in-network benefits, the plan would cover 100% of remaining applicable costs for the plan year. The out-of-pocket maximum applies to individual health insurance coverage and to small- and large-group plans, whether fully insured or self-insured. The requirement does not apply to grandfathered plans or STLDI. State and Private-Sector Actions As stated above, in recent weeks, some states have announced coverage requirements related to COVID-19 testing services and items, and some insurers have clarified or expanded their policies to include relevant coverage. Some of these state and insurer statements also address coverage of treatment services. However, as discussed above, states cannot regulate self-insured plans, and insurer announcements do not necessarily apply to those plans either. Coverage, cost sharing, and the application of medical management techniques (e.g., prior authorization) can vary by plan, subject to applicable federal and state requirements. It may be useful for consumers to contact their insurers or plan sponsors to understand their coverage of services and items related to COVID-19 treatment. Will Plans Be Required to Cover a COVID-19 Vaccine? CARES Act and Existing Preventive Services Coverage Requirements As of the date of this report, there is no vaccine against COVID-19 approved by the Food and Drug Administration (FDA) for use in the United States, although several candidates are in development. Prior to the enactment of the CARES Act, there were no federal requirements specifically mandating private health insurance coverage of items or services related to a COVID-19 vaccine. However, per an existing federal requirement (Â§2713 of the Public Health Service Act [PHSA]) and its accompanying regulations, most plans must cover specified preventive health services without cost sharing. This includes any preventive service recommended with an A or B rating by the United States Preventive Services Task Force (USPSTF); or any immunization with a recommendation by the Advisory Committee on Immunization Practices (ACIP), adopted by the Centers for Disease Control and Prevention (CDC), for routine use for a given individual. These coverage requirements apply no sooner than one year after a new or revised recommendation is published. Requirements of PHSA Section 2713 apply to individual health insurance coverage and to small- and large-group plans, whether fully insured or self-insured. The requirements do not apply to grandfathered plans or to STLDI. By regulation, plans are generally not required to cover preventive services furnished out of network. They are allowed to use "reasonable medical management" techniques, within provided guidelines. Cost sharing for office visits associated with a furnished preventive service may or may not be allowed, as specified in regulation. Section 3203 of the CARES Act requires specified plansâthe same types as those subject to PHSA Section 2713âto cover a COVID-19 vaccine, when available, and potentially other COVID-19 preventive services, if they are recommended by ACIP or USPSTF, respectively. This coverage must be provided without cost sharing. Section 3203 also applies an expedited effective date for the required coverage: 15 business days after an applicable ACIP or USPSTF recommendation is published. Otherwise, requirements of Section 3203 mirror the existing requirements under PHSA Section 2713. The requirement to cover COVID-19 vaccination and other preventive services is not time limited, whereas the FFCRA requirement to cover COVID-19 testing is limited to the duration of a declared COVID-19 public health emergency. See " Are Plans Required to Cover COVID-19 Testing? " State and Private-Sector Actions Some of the state and insurer announcements about coverage of COVID-19 benefits, discussed earlier in this report, reference coverage of a potential vaccine. However, pending development and approval of the vaccine, and pending the implementation of the CARES Act requirements related to COVID-19 vaccine coverage, it is premature to discuss potential variations in coverage of the vaccine at the state or plan level. It may still be useful for consumers to contact their insurers or plan sponsors to understand their coverage of services and items related to a potential COVID-19 vaccine. Appendix. Resources for Questions about Private Health Insurance and COVID-19 This report has focused on coverage of COVID-19 testing, treatment, and vaccination by most types of private health insurance plans. CRS analysts are also available to congressional clients to discuss other topics of interest related to private health insurance and COVID-19, including coverage of COVID-19 benefits by types of private plans not specifically addressed in this report; other issues related to private coverage of COVID-19 benefits; private coverage of certain other benefits of concern during this pandemic, or of services furnished via telehealth; and issues related to private health insurance enrollment and premium payments. The following table lists examples of such topics of interest, any relevant legislative or administrative resources, any relevant CRS resources, and names of appropriate CRS experts for the benefit of congressional clients. Besides the CRS reports listed below that provide background on relevant topics, also see CRS reports on health provisions in recent COVID-19 legislation: CRS Report R46316, Health Care Provisions in the Families First Coronavirus Response Act, P.L. 116-127 , and CRS Report R46334, Selected Health Provisions in Title III of the CARES Act (P.L. 116-136) . The information in this report is current as of its publication date and may be superseded by subsequent congressional or administrative action. Congressional clients may contact the report author and/or experts listed below for questions about further developments. In addition, CMS guidance related to private health insurance and COVID-19 is compiled on its website. Summary:	null	96	22,508	22,510	22,510	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The Coronavirus Disease 2019 (COVID-19) pandemic is affecting communities around the world and throughout the United States, with case counts growing daily. As private health insurance is the predominant source of health coverage in the United States, there is considerable congressional interest in understanding private health insurance coverage of health benefits related to COVID-19 diagnosis, treatment, and prevention. This report addresses frequently asked questions about covered benefits and consumer cost sharing related to COVID-19 testing, treatment, and a potential vaccine. It discusses recent legislation, references relevant existing federal requirements and recent administrative interpretations of them in relation to COVID-19, and notes state and private-sector actions. It begins with background information on types and regulation of private health insurance plans. The Families First Coronavirus Response Act (FFCRA; P.L. 116-127 ) requires specified types of private health insurance plans to cover COVID-19 testing, administration of the test, and related items and services, without consumer cost sharing. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136 ) further addresses private health insurance coverage of COVID-19 testing, and requires coverage of a potential vaccine and other preventive services without cost sharing, if they are recommended by specified federal entities. There are no federal requirements that specifically require coverage of COVID-19 treatment services. However, one or more existing federal requirements are potentially relevant, as discussed in this report. Some states have also announced requirements related to covered benefits and consumer costs, and some insurers have reported that they will voluntarily cover certain relevant benefits. This report discusses most U.S. private health insurance plans' coverage of health care items and services related to COVID-19, but it generally does not discuss the delivery of those services, insurers' payments to health care providers, or private health insurance coverage of other benefits. The Appendix lists Congressional Research Service (CRS) analysts who can discuss with congressional clients other topics of interest related to private health insurance and COVID-19, including types of plans and coverage of benefits not addressed in this report. Also beyond the scope of this report are public health coverage programs (e.g., Medicare); the domestic and international public health responses to COVID-19; and economic, human services, and other nonhealth issues. For further information on these topics, congressional clients can access the CRS Coronavirus Disease 2019 resources page at https://www.crs.gov/resources/coronavirus-disease-2019 . The information in this report is current as of its publication date and may be superseded by subsequent congressional or administrative action. Congressional clients may contact the report author and/or the experts listed in the Appendix for questions about further developments. In addition, Centers for Medicare & Medicaid Services (CMS) guidance related to private health insurance and COVID-19 is compiled on its website. Background on Private Health Insurance The private health insurance market includes both the group market (largely made up of employer-sponsored insurance) and the individual market (which includes plans directly purchased from an insurer). The group market is divided into small- and large-group market segments; a small group is typically defined as a group of up to 50 individuals (e.g., employees), and a large group is typically defined as one with 51 or more individuals. Employers and other group health plan sponsors may purchase coverage from an insurer in the small- and large-group markets (i.e., they may fully insure ). Sponsors may instead finance coverage themselves (i.e., they may self-insure ). The individual and small-group markets include plans sold on and off the individual and small-group health insurance exchanges, respectively. Covered benefits, consumer costs, and other plan features may vary by plan, subject to applicable federal and state requirements. The federal government may regulate all the coverage types noted above (i.e., individual coverage, fully insured small- and large-group coverage, and self-insured group plans), and states may regulate all but self-insured group plans. Federal and state requirements may vary by coverage type. This report focuses on private-sector plans explained above. There are some variations of these coverage types, and there are other types of private health coverage arrangements, which may or may not be subject to the requirements discussed in this report, or for which there may be other policy questions related to COVID-19. These other coverage types are out of the scope of this report, but a number of them are identified in the Appendix , along with resources for further information. One coverage variation, grandfathered plans , is included in this report because it is explicitly referenced in legislation relevant to COVID-19 and private health insurance coverage. Grandfathered plans are individual or group plans in which at least one individual was enrolled as of enactment of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended), and which continue to meet certain criteria. Plans that maintain their grandfathered status are exempt from some, but not all, federal requirements. Another type of coverage, short-term, limited duration insurance (STLDI or STLD plans), is also included in this report, because it is explicitly excluded from a coverage definition cited by relevant legislation. STLDI is coverage, generally sold in the individual market, which meets certain definitional criteria. The statutory definition of "individual health insurance coverage" excludes STLDI; thus, STLDI is exempt from complying with all federal health insurance requirements applicable to individual health insurance plans. FAQ: COVID-19 Covered Benefits and Cost Sharing The remainder of this report addresses private health insurance coverage of COVID-19 testing, treatment, and vaccination, when a vaccine becomes available. Where there are federal requirements related to such coverage, it is useful to understand the following: Is the service or item required to be covered? If so, is cost sharing allowed? In general, private health insurance cost sharing includes deductibles, coinsurance, and copayments. Are plans allowed to impose prior authorization or other medical management requirements? For example, some insurers require that they (the insurer) provide prior authorization for routine hospital inpatient care, and/or require that primary care physicians provide approval or referrals for specialty care, as a condition for covering the care. Does the coverage requirement depend on how or where the service or item is furnished (e.g., by an in-network versus out-of-network provider)? Under private insurance, benefit coverage and consumer cost sharing is often contingent upon whether the service or item is furnished by a provider that the insurer has contracted with (i.e., whether that provider is in network for a given plan). In instances where a contract between an insurer and provider does not exist, the provider is considered out of network . When does the coverage requirement go into effect? What types of plans are subject to the coverage requirement? To the extent that information is available, these issues are addressed with regard to private health insurance coverage of COVID-19 testing, treatment, and vaccination. Table 1 summarizes key information. Are Plans Required to Cover COVID-19 Testing? FFCRA and CARES Act Prior to the enactment of the FFCRA ( P.L. 116-127 ), there were no federal requirements specifically mandating private health insurance coverage of items or services related to COVID-19 testing. Section 6001 of the FFCRA requires most private health insurance plans to cover COVID-19 testing, administration of the test, and related items and services, as defined in the act. Per FFCRA, the coverage must be provided without consumer cost sharing, including deductibles, copayments, or coinsurance. Prior authorization or other medical management requirements are prohibited. The definition of testing that must be covered was expanded by Section 3201 of the CARES Act ( P.L. 116-136 ). In addition, the Department of Labor (DOL), Department of Health and Human Services (HHS), and the Treasury issued an FAQ document on April 11, 2020 (hereinafter, "Tri-Agency April 11 FAQ"), on the private health insurance coverage requirements in FFCRA and the CARES Act. Together, the acts and guidance require coverage of certain tests and services, as summarized below. Specified COVID-19 diagnostic tests, including both molecular (e.g., polymerase chain reaction, or PCR, tests) and serological tests (i.e., antibody tests), and the administration of such tests are covered. "Items and services furnished to an individual during [visits, as specified below] that result in an order for or administration of [an applicable COVID-19 test], but only to the extent such items and services relate to the furnishing or administration of such product or to the evaluation of such individual for purposes of determining the need of such individual for such product." This definition could encompass additional diagnostic testing associated with the visit. However, it would not encompass treatment for COVID-19-associated illnesses. The coverage requirements apply to the specified items and services when furnished at visits including to health care provider offices, urgent care centers, emergency rooms, and "nontraditional" settings, including drive-through testing sites. The requirements apply to both in-person and telehealth visits. FFCRA does not specify whether its coverage requirements apply when the test is furnished by an out-of-network provider. However Section 3202 of the CARES Act addresses insurer payments to in-network and out-of-network providers. In addition, the Tri-Agency April 11 FAQ clarifies that the FFCRA coverage requirements apply both in network and out of network. The coverage requirements in FFCRA apply only to the specified items and services that are furnished during the COVID-19 public health emergency period described in that act, as of the date the FFCRA was enacted (March 18, 2020). These requirements apply to individual health insurance coverage and to small- and large-group plans, whether fully insured or self-insured. This includes grandfathered individual or group plans, which are exempt from certain other federal private health insurance requirements. Per the definition of individual health insurance coverage cited in the act, the requirements do not apply to STLDI. State and Private-Sector Actions In recent weeks, some states have announced coverage requirements, and some insurers have clarified or expanded their policies, regarding coverage of COVID-19 testing, among other services. However, states cannot regulate self-insured plans, and insurer announcements do not necessarily apply to those plans either. FFCRA does apply to self-insured group plans in addition to the other plan types discussed above. To the extent that state requirements about or plans' voluntary coverage of COVID-19 testing did not extend as far as FFCRA and CARES Act requirements, the federal laws supersede them. However, state requirements and plans' voluntary coverage may exceed applicable federal requirements, as long as they do not prevent the implementation of any federal requirements. Even though federal law now requires most plans to cover specified COVID-19 testing services without cost sharing, it may be useful for consumers to contact their insurers or plan sponsors to understand their coverage. Subject to applicable federal and state requirements, coverage of the COVID-19 test and related services and items may vary by plan. Are Plans Required to Cover COVID-19 Treatment? Essential Health Benefits Guidance on COVID-19 Coverage Although FFCRA requires certain plans to cover specified COVID-19 testing services without cost sharing, neither FFCRA nor the CARES Act mandates coverage of COVID-19 treatment services. There is no federal requirement specifically mandating private health insurance coverage of items or services related to COVID-19 treatment. However, one or more existing federal requirements are potentially relevant, subject to state implementation and plan variation. There is a federal statutory requirement that certain plans cover a core set of 10 categories of essential health benefits (EHB). However, states, rather than the federal government, generally specify the benefit coverage requirements within those categories. Current regulation allows each state to select an EHB-benchmark plan. The benchmark plan serves as a reference plan on which plans subject to EHB requirements must substantially base their benefits packages. Because states select their own EHB-benchmark plans, there is considerable variation in EHB coverage from state to state. On March 5, 2020, and March 12, 2020, CMS issued guidance addressing the potential relevance of EHB requirements to coverage of COVID-19 treatment, among other benefits, subject to variation in states' EHB-benchmark plan designations. According to the March 12 document, "all 51 EHB-benchmark plans currently provide coverage for the diagnosis and treatment of COVID-19" (emphasis added), but coverage of specific benefits within the 10 categories of EHB (e.g., hospitalization, laboratory services) may vary by state and by plan. The March 12 document suggests that coverage of medically necessary hospitalizations would include coverage of medically necessary isolation and quarantine during the hospital admission, subject to state and plan variation. Quarantine in other settings, such as at home, is not a medical benefit. The document notes, "however, other medical benefits that occur in the home that are required by and under the supervision of a medical provider, such as home health care or telemedicine, may be covered as EHB," subject to state and plan variation. The March 12 document confirms that "exact coverage details and cost-sharing amounts for individual services may vary by plan, and some plans may require prior authorization before these services are covered." In other words, even where certain treatment items and services are required to be covered as EHB in a state, cost-sharing and medical management requirements could apply, subject to applicable federal and state requirements. In addition, cost sharing and other coverage details may vary for services furnished by out-of-network providers. Individual and fully insured small-group plans are subject to EHB requirements. Large-group plans, self-insured plans, grandfathered plans, and STLDI are not. Whether or not certain treatment services are defined as EHB in a state, other state benefit coverage requirements may be relevant to COVID-19 treatment. Plans may also voluntarily cover benefits. See " State and Private-Sector Actions " below. Certain Federal Requirements Related to Cost Sharing Other existing federal requirements are also relevant to consumer cost sharing on COVID-19 treatment services, to the extent that such treatments are covered by the consumer's plan, and largely to the extent that they are defined by a state as EHB. For example, plans must comply with annual l imits on consumers' out-of-pocket spending (i.e., cost sharing, including deductibles, coinsurance, and copayments) on in-network coverage of the EHB. If certain treatment services are defined as EHB in a state, and are furnished by an in-network provider, consumers' out-of-pocket costs for the plan year would be limited as discussed below. If certain treatment services are not defined as EHB in a state, and/or are furnished by out-of-network providers, this out-of-pocket maximum would not necessarily apply. In 2020, the out-of-pocket limits cannot exceed $8,150 for self-only coverage and $16,300 for coverage other than self-only. This means that once a consumer has spent up to that amount in cost sharing on applicable in-network benefits, the plan would cover 100% of remaining applicable costs for the plan year. The out-of-pocket maximum applies to individual health insurance coverage and to small- and large-group plans, whether fully insured or self-insured. The requirement does not apply to grandfathered plans or STLDI. State and Private-Sector Actions As stated above, in recent weeks, some states have announced coverage requirements related to COVID-19 testing services and items, and some insurers have clarified or expanded their policies to include relevant coverage. Some of these state and insurer statements also address coverage of treatment services. However, as discussed above, states cannot regulate self-insured plans, and insurer announcements do not necessarily apply to those plans either. Coverage, cost sharing, and the application of medical management techniques (e.g., prior authorization) can vary by plan, subject to applicable federal and state requirements. It may be useful for consumers to contact their insurers or plan sponsors to understand their coverage of services and items related to COVID-19 treatment. Will Plans Be Required to Cover a COVID-19 Vaccine? CARES Act and Existing Preventive Services Coverage Requirements As of the date of this report, there is no vaccine against COVID-19 approved by the Food and Drug Administration (FDA) for use in the United States, although several candidates are in development. Prior to the enactment of the CARES Act, there were no federal requirements specifically mandating private health insurance coverage of items or services related to a COVID-19 vaccine. However, per an existing federal requirement (Â§2713 of the Public Health Service Act [PHSA]) and its accompanying regulations, most plans must cover specified preventive health services without cost sharing. This includes any preventive service recommended with an A or B rating by the United States Preventive Services Task Force (USPSTF); or any immunization with a recommendation by the Advisory Committee on Immunization Practices (ACIP), adopted by the Centers for Disease Control and Prevention (CDC), for routine use for a given individual. These coverage requirements apply no sooner than one year after a new or revised recommendation is published. Requirements of PHSA Section 2713 apply to individual health insurance coverage and to small- and large-group plans, whether fully insured or self-insured. The requirements do not apply to grandfathered plans or to STLDI. By regulation, plans are generally not required to cover preventive services furnished out of network. They are allowed to use "reasonable medical management" techniques, within provided guidelines. Cost sharing for office visits associated with a furnished preventive service may or may not be allowed, as specified in regulation. Section 3203 of the CARES Act requires specified plansâthe same types as those subject to PHSA Section 2713âto cover a COVID-19 vaccine, when available, and potentially other COVID-19 preventive services, if they are recommended by ACIP or USPSTF, respectively. This coverage must be provided without cost sharing. Section 3203 also applies an expedited effective date for the required coverage: 15 business days after an applicable ACIP or USPSTF recommendation is published. Otherwise, requirements of Section 3203 mirror the existing requirements under PHSA Section 2713. The requirement to cover COVID-19 vaccination and other preventive services is not time limited, whereas the FFCRA requirement to cover COVID-19 testing is limited to the duration of a declared COVID-19 public health emergency. See " Are Plans Required to Cover COVID-19 Testing? " State and Private-Sector Actions Some of the state and insurer announcements about coverage of COVID-19 benefits, discussed earlier in this report, reference coverage of a potential vaccine. However, pending development and approval of the vaccine, and pending the implementation of the CARES Act requirements related to COVID-19 vaccine coverage, it is premature to discuss potential variations in coverage of the vaccine at the state or plan level. It may still be useful for consumers to contact their insurers or plan sponsors to understand their coverage of services and items related to a potential COVID-19 vaccine. Appendix. Resources for Questions about Private Health Insurance and COVID-19 This report has focused on coverage of COVID-19 testing, treatment, and vaccination by most types of private health insurance plans. CRS analysts are also available to congressional clients to discuss other topics of interest related to private health insurance and COVID-19, including coverage of COVID-19 benefits by types of private plans not specifically addressed in this report; other issues related to private coverage of COVID-19 benefits; private coverage of certain other benefits of concern during this pandemic, or of services furnished via telehealth; and issues related to private health insurance enrollment and premium payments. The following table lists examples of such topics of interest, any relevant legislative or administrative resources, any relevant CRS resources, and names of appropriate CRS experts for the benefit of congressional clients. Besides the CRS reports listed below that provide background on relevant topics, also see CRS reports on health provisions in recent COVID-19 legislation: CRS Report R46316, Health Care Provisions in the Families First Coronavirus Response Act, P.L. 116-127 , and CRS Report R46334, Selected Health Provisions in Title III of the CARES Act (P.L. 116-136) . The information in this report is current as of its publication date and may be superseded by subsequent congressional or administrative action. Congressional clients may contact the report author and/or experts listed below for questions about further developments. In addition, CMS guidance related to private health insurance and COVID-19 is compiled on its website.	Summary:	gov_report	1,024	null	58
crs_R46343	crs_R46343_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Congress is considering federal funding for infrastructure to revive an economy damaged by Coronavirus Disease 2019 (COVID-19). This is not the first occasion on which Congress has considered funding infrastructure for purposes of economic stimulus. This report discusses the economic impact of the trans portation infrastructure funding that was provided in the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5 ). Enacted on February 17, 2009, ARRA was a response to the recession that officially ran from December 2007 through June 2009. This "Great Recession" proved to be the most severe economic downturn since the Great Depression of the 1930s. The recession was relatively deep and the recovery relatively slow. The unemployment rate, for example, rose from 4.4% in May 2007 to 10% in October 2009, and did not fall below 6% again until September 2014. ARRA was the largest fiscal stimulus measure passed by Congress in reaction to the Great Recession. When enacted, the Congressional Budget Office (CBO) estimated the law would cost the federal government $787 billion from FY2009 through FY2019. Of this amount, infrastructure accounted for approximately $100 billion to $150 billion (13% to 19%), depending on how the term is defined (see text box, 'What is Infrastructure?'). Of the original $787 billion cost estimate, programs administered by the U.S. Department of Transportation (DOT) received a total of $48.1 billion, about 6% of the total. Other public works infrastructure funding in ARRA included $4.6 billion for Army Corps of Engineers projects, some of which were related to waterborne transportation; $4 billion for state clean water revolving funds; $2 billion for state drinking water revolving funds; and $2.5 billion for four major federal land management agencies. Authority for state and local governments to issue tax credit bonds for capital spending represented an additional federal subsidy of about $36 billion. These figures do not include ARRA funding for federal government buildings and facilities, communications technologies, and energy systems. As is the case with most federal infrastructure investment, the infrastructure support authorized in ARRA was provided in four different ways: direct spending on infrastructure the federal government owns and operates, including roads and bridges on federal lands and the air traffic control system; grants to nonfederal entities, especially state and local agencies such as state departments of transportation and local public transportation authorities; tax preferences to provide incentives for nonfederal investment in infrastructure, such as the authority granted state and local governments to issue bonds to finance capital spending on infrastructure; and credit assistance to nonfederal entities, such as loans and loan guarantees to public and private project sponsors. Transportation Infrastructure Funding in ARRA ARRA funding represented a 72% supplement to DOT's regular FY2009 funding of $67.2 billion. More than half of the DOT spending authorized in ARRA was for highways. The highway funding was predominantly distributed by formula, and, like most of the other funding, had to be obligated by the end of FY2010â19 months after the date of enactmentâand expended by the end of FY2015. Most of the funding for public transportation was also distributed by formula; the major exception was $750 million for the Federal Transit Administration's existing Capital Investment Grant program. The $8 billion for high-speed and intercity rail projects was an entirely new discretionary program. ARRA also created an entirely new discretionary program whose explicit purpose was economic stimulus, Transportation Investment Generating Economic Recovery (TIGER) grants, which could be used for a wide range of transportation projects ( Table 1 ). For most of these programs, the ARRA grants did not require any local match. States were required to certify that they would use these grants to supplement their planned transportation spending, rather than substituting the additional funding for their planned spending. This was known as maintenance-of-effort certification. Observations on the ARRA Experience Infrastructure Spending Is Slower Than Other Types of Stimulus The timing of expenditures of ARRA transportation funding demonstrated that infrastructure funding is generally expended more slowly than other types of assistance, such as unemployment compensation, Medicaid payments, and Social Security payments. Of the funding allocated to DOT, about 9% was spent within the first six months or so of availability, compared with 44% of unemployment compensation ( Table 2 ). The majority of DOT's ARRA funding was spent in FY2010 (37%) and FY2011 (24%). Another 11% was spent in FY2012. As with regular federal funding provided though DOT programs, ARRA funding was provided on a reimbursable basis. State and local governments had to complete an eligible project, or a defined part of a project, before receiving federal payment, so at least some of the intended economic effects, such as wage payments and orders for construction materials, had occurred prior to each transfer of federal grant funds to a recipient. There was a good deal of criticism of infrastructure spending as an economic stimulus, asserting that the expenditures were too slow. The Obama Administration emphasized that the money could be used for "shovel-ready" projects, but critics complained that there is "no such thing as shovel ready." CBO data show that almost half of DOT's ARRA funding was spent within about 18 months of enactment. The Obama Administration argued that the relatively slow expenditure of infrastructure funding could offer advantages in a deep and long economic downturn, such as the Great Recession, by noting that different types of stimulus affect the economy with different speeds. For instance, aid to individuals directly affected by the recession tends to be spent relatively quickly, while new investment projects require more time. Because of the need to provide broad support to the economy over an extended period, the Administration supported a stimulus plan that included a broad range of fiscal actions. Characteristics of Infrastructure Funding Can Affect Expenditure Timing Although the ARRA infrastructure funding was expended more slowly than most other types of support provided in the law, there were major differences in the rate of expenditures among infrastructure programs. Much of the highway and transit funding was distributed by DOT agencies to their usual grantees via existing formula programs, and was therefore available for use relatively quickly. Similarly, the Federal Aviation Administration distributed airport funds through the existing Airport Improvement Program, and the Maritime Administration awarded grants through its existing Assistance to Small Shipyards Program. More than 50% of funding for these programs was expended by grantees by January 2011, less than two years after the enactment of ARRA ( Table 3 ). Discretionary funds for programs established in the law, such as for the high-speed rail program and TIGER grants, took much longer to distribute and to use because DOT had to design the programs, issue rules, advertise the availability of funds, and wait for applications. Congress recognized that setting up new programs would take some time by including longer obligation deadlines in the law. High-speed rail funding was expended particularly slowly. DOT data showed that three years after ARRA enactment, 8% of high-speed rail funding had been expended. High-speed rail had been studied for decades, but there were almost no plans or projects that were ready for implementation. In addition, unlike other parts of DOT, the Federal Railroad Administration was inexperienced at administering large amounts of grant funds. A major exception to the general distinction between the timing of formula and discretionary program expenditures was the ARRA funding for the Federal Transit Administration's Capital Investment Grant (CIG) Program. The CIG Program, also known as New Starts, funds the construction of new fixed-guideway public transportation systems and the expansion of existing systems. Eligible projects include transit rail, such as subway/elevated rail (heavy rail), light rail, and commuter rail, as well as bus rapid transit and ferries. The agency has discretion in selecting projects to receive funds and in determining the federal contribution to each approved project. ARRA provided $750 million for the CIG Program. The Federal Transit Administration distributed these funds to 11 projects already under construction that "demonstrated some contract capacity to absorb additional revenues." The money was given to local transit authorities as various construction activities were completed. According to DOT, 63% of these funds were spent within one year of the ARRA's enactment and 100% were spent within two years. In general, it was easier for state and local agencies to quickly spend funds on the types of small-scale projects that are typically made possible by formula funds. The Government Accountability Office (GAO) found that more than two-thirds of highway funds were committed for pavement improvement projects, such as resurfacing, reconstruction, and rehabilitation of existing roadways, and three-quarters of transit funds were committed to upgrading existing facilities and purchasing or rehabilitating buses. Funding for airports was used to rehabilitate and reconstruct runways and taxiways, as well as to upgrade or purchase air navigation infrastructure such as air traffic control towers and engine generators. The Level of Infrastructure Investment Can Depend on Nonfederal Entities Public spending on transportation, measured in inflation-adjusted 2017 dollars, has been on a downward trend since peaking in 2003 ( Figure 1 ). Infrastructure funding provided by ARRA interrupted that trend, buoying total spending in 2010 and 2011. Except for 2009, however, state and local expenditures, which make up around 75% of total infrastructure expenditures, continued to fall. State and local spending on transportation infrastructure, adjusted for inflation, was 8% lower in 2013 than in 2007, reflecting the long-term damage the Great Recession did to state and local budgets. As the stimulus from ARRA faded, 2013 saw the lowest spending on these major infrastructure systems since the late 1990s. In some infrastructure sectors, such as highways, the growth in federal spending due to ARRA did not outweigh the decline in state and local government spending. Consequently, highway infrastructure spending fell over the period 2009 through 2013 ( Figure 2 ). Of course, there is no way to know exactly how highway spending would have changed in the absence of ARRA. Federal spending would have been lower, but it is possible that state and local government spending would have been higher if federal funding had not been available. Maintenance-of-Effort Requirements Were Difficult to Enforce Because of the Great Recession, state and local governments experienced a dramatic reduction in tax revenue even as demand for government services increased. For this reason, many jurisdictions found it difficult to maintain pre-recession levels of spending for at least some types of transportation infrastructure, leaving the possibility that additional federal dollars would simply replace state and local dollars. The federal share of transportation projects using ARRA funds was generally 100%, but states were required to certify that they would spend amounts already planned. This maintenance-of-effort requirement was in force from ARRA's enactment in February 2009, by which time the recession had been under way for over a year, through September 30, 2010. In its analysis of ARRA, GAO found that the maintenance-of-effort requirements in transportation were challenging to comply with and to administer. For example, governors had to certify maintenance of effort in several transportation programs, some administered by the state and some administered by local governments and independent authorities. Within each state, these various programs typically had different and complex revenue sources. In many cases, states did not have a way to identify planned expenditures. Because of ambiguities in the law and practicalities that come to light with experience, DOT issued maintenance-of-effort guidance to the states seven times in the first year after ARRA enactment. Some research on the effects of highway funding in ARRA on state highway spending found that, despite the maintenance-of-effort requirement, there was substantial substitution of federal dollars for state dollars. One analysis found that for every dollar of federal aid in ARRA for highways, on average, overall spending increased by 19 cents, meaning states decreased their own spending by 81 cents. Employment Effects Were Modest In many infrastructure sectors, the employment effects of ARRA funding were relatively modest. In highway construction, for example, employment dropped sharply from the end of 2007 through 2009. There was a slight increase through 2010, presumably related to the ARRA funding, but a sustained increase in employment did not begin again until 2015. The number of highway construction workers reached pre-recession levels in 2018 ( Figure 3 ). Although employment in highway construction was much higher before the recession began in late 2007, employment might have fallen further in the absence of ARRA funding. The transportation funding in ARRA, therefore, may have allowed state and local governments to maintain a certain level of employment in the transportation construction sector. Additionally, it likely permitted state and local governments to maintain employment in other, nontransportation, sectors by shifting state expenditures from transportation to other purposes. The slow recovery of highway construction jobs suggests the sector could have productively absorbed more funding after the ARRA funding had largely been expended, particularly during the 2013, 2014, and 2015 construction seasons. Financing Infrastructure May Leverage State Resources The financial crisis and the accompanying recession affected state and local credit markets. Among other things, declines in employment and business activity made it difficult for state and local governments to raise funds through the sale of tax-exempt municipal bonds whose repayment depended on tax revenue. Limited access to financing or to financing at much higher costs may have contributed to a decline in state and local government infrastructure investment. In more normal economic times, municipal bonds account for about 10% of the capital invested in highways and public transportation. In response to the problems in the municipal credit markets, ARRA included the Build America Bond (BAB) program, which permitted state and local governments to issue tax credit bonds from April 2009 through the end of 2010 to raise funds that could be used for any type of capital investment. Unlike traditional municipal bonds, which provide a subsidy to bondholders by exempting interest payments from federal income taxation and thereby allow issuers to sell bonds at low interest rates, BABs offered a higher taxable yield to investors; the federal government subsidized 35% of the issuer's interest costs. This subsidy rate was generally seen as generous, thereby reducing borrowing costs for state and local governments. Because the interest on BABs was taxable, the bonds were attractive to investors without federal tax liability, such as pension funds, enlarging the pool of possible investors. The taxable bond market is about 10 times the size of the traditional tax-exempt bond market. This larger market may have contributed to the reduction in borrowing costs. BABs were also considered more efficient than traditional municipal bonds because all of the federal subsidy went to the state or local government issuer. With traditional tax-exempt municipal bonds, some of the subsidy goes to investors. There were 2,275 BAB issuances over the 21 months of eligibility, for a total of $181 billion. About 30% of BAB funding went to educational facilities, followed by water and sewer projects (13.8%), highways (13.7%), and transit (8.7%). Without the BAB program, some of this capital would have been raised using traditional tax-exempt bonds, although likely at a higher cost to state and local government issuers. The Department of the Treasury stated that BAB issuance surged in the last quarter of 2010, suggesting that issuers were accelerating the timing of capital financings and, thus, capital investment. Although BABs had a generous subsidy rate relative to other municipal bonds, their structure ensured that issuers paid 65% of the interest costs, effectively requiring state and local governments to pay a larger share of infrastructure costs than under ARRA grant programs. Because the federal subsidy is paid to the issuer as the interest is due to the investor, the cost to the federal government of BABs was spread over the subsequent years ( Table 2 ). Stimulus-Funded Projects Can Provide Transportation Benefits Because the purpose of ARRA was to stimulate the economy, the law included time limits on the obligation and expenditure of transportation funds. As noted earlier, about half of the transportation funds appropriated by ARRA were expended by the end of FY2010, within 20 months of the law's enactment. Much of this funding went to routine projects such as highway paving and bus purchases that were quick to implement. Larger projects that required more detailed environmental reviews and complex design work were not "shovel-ready," leading to assertions that ARRA did not "fund investments that would provide long-term economic returns." In its examination of ARRA transportation expenditures, GAO found that the focus on quick implementation did change the mix of highway projects chosen. Some state officials stated that the deadlines "prohibited other, potentially higher-priority projects from being selected for funding." However, others noted that ARRA funding allowed them to complete so-called "state-of-good-repair" projects, presumably leaving greater financial capacity to undertake larger projects in the future. Furthermore, economic research shows that smaller state-of-good-repair projects often have higher benefit-cost ratios than new, large "game changing" projects whose benefits are often more speculative. In its biennial examination of the highway and public transportation systems, DOT typically finds that, for the United States as a whole, too little is spent on state-of good-repair projects versus building new capacity. In its latest report, DOT examined actual spending in 2014 and various investment scenarios for the period 2015 through 2034. DOT found that state-of-good-repair spending was 76% of total highway spending in 2014, whereas to maximize economic benefits about 79% should go to such projects. For public transportation, DOT found that 64% to 74% of total infrastructure spending should be devoted to state-of-good repair projects, whereas 60% was used for that purpose in 2014. Summary:	null	96	19,502	19,504	19,504	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Congress is considering federal funding for infrastructure to revive an economy damaged by Coronavirus Disease 2019 (COVID-19). This is not the first occasion on which Congress has considered funding infrastructure for purposes of economic stimulus. This report discusses the economic impact of the trans portation infrastructure funding that was provided in the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5 ). Enacted on February 17, 2009, ARRA was a response to the recession that officially ran from December 2007 through June 2009. This "Great Recession" proved to be the most severe economic downturn since the Great Depression of the 1930s. The recession was relatively deep and the recovery relatively slow. The unemployment rate, for example, rose from 4.4% in May 2007 to 10% in October 2009, and did not fall below 6% again until September 2014. ARRA was the largest fiscal stimulus measure passed by Congress in reaction to the Great Recession. When enacted, the Congressional Budget Office (CBO) estimated the law would cost the federal government $787 billion from FY2009 through FY2019. Of this amount, infrastructure accounted for approximately $100 billion to $150 billion (13% to 19%), depending on how the term is defined (see text box, 'What is Infrastructure?'). Of the original $787 billion cost estimate, programs administered by the U.S. Department of Transportation (DOT) received a total of $48.1 billion, about 6% of the total. Other public works infrastructure funding in ARRA included $4.6 billion for Army Corps of Engineers projects, some of which were related to waterborne transportation; $4 billion for state clean water revolving funds; $2 billion for state drinking water revolving funds; and $2.5 billion for four major federal land management agencies. Authority for state and local governments to issue tax credit bonds for capital spending represented an additional federal subsidy of about $36 billion. These figures do not include ARRA funding for federal government buildings and facilities, communications technologies, and energy systems. As is the case with most federal infrastructure investment, the infrastructure support authorized in ARRA was provided in four different ways: direct spending on infrastructure the federal government owns and operates, including roads and bridges on federal lands and the air traffic control system; grants to nonfederal entities, especially state and local agencies such as state departments of transportation and local public transportation authorities; tax preferences to provide incentives for nonfederal investment in infrastructure, such as the authority granted state and local governments to issue bonds to finance capital spending on infrastructure; and credit assistance to nonfederal entities, such as loans and loan guarantees to public and private project sponsors. Transportation Infrastructure Funding in ARRA ARRA funding represented a 72% supplement to DOT's regular FY2009 funding of $67.2 billion. More than half of the DOT spending authorized in ARRA was for highways. The highway funding was predominantly distributed by formula, and, like most of the other funding, had to be obligated by the end of FY2010â19 months after the date of enactmentâand expended by the end of FY2015. Most of the funding for public transportation was also distributed by formula; the major exception was $750 million for the Federal Transit Administration's existing Capital Investment Grant program. The $8 billion for high-speed and intercity rail projects was an entirely new discretionary program. ARRA also created an entirely new discretionary program whose explicit purpose was economic stimulus, Transportation Investment Generating Economic Recovery (TIGER) grants, which could be used for a wide range of transportation projects ( Table 1 ). For most of these programs, the ARRA grants did not require any local match. States were required to certify that they would use these grants to supplement their planned transportation spending, rather than substituting the additional funding for their planned spending. This was known as maintenance-of-effort certification. Observations on the ARRA Experience Infrastructure Spending Is Slower Than Other Types of Stimulus The timing of expenditures of ARRA transportation funding demonstrated that infrastructure funding is generally expended more slowly than other types of assistance, such as unemployment compensation, Medicaid payments, and Social Security payments. Of the funding allocated to DOT, about 9% was spent within the first six months or so of availability, compared with 44% of unemployment compensation ( Table 2 ). The majority of DOT's ARRA funding was spent in FY2010 (37%) and FY2011 (24%). Another 11% was spent in FY2012. As with regular federal funding provided though DOT programs, ARRA funding was provided on a reimbursable basis. State and local governments had to complete an eligible project, or a defined part of a project, before receiving federal payment, so at least some of the intended economic effects, such as wage payments and orders for construction materials, had occurred prior to each transfer of federal grant funds to a recipient. There was a good deal of criticism of infrastructure spending as an economic stimulus, asserting that the expenditures were too slow. The Obama Administration emphasized that the money could be used for "shovel-ready" projects, but critics complained that there is "no such thing as shovel ready." CBO data show that almost half of DOT's ARRA funding was spent within about 18 months of enactment. The Obama Administration argued that the relatively slow expenditure of infrastructure funding could offer advantages in a deep and long economic downturn, such as the Great Recession, by noting that different types of stimulus affect the economy with different speeds. For instance, aid to individuals directly affected by the recession tends to be spent relatively quickly, while new investment projects require more time. Because of the need to provide broad support to the economy over an extended period, the Administration supported a stimulus plan that included a broad range of fiscal actions. Characteristics of Infrastructure Funding Can Affect Expenditure Timing Although the ARRA infrastructure funding was expended more slowly than most other types of support provided in the law, there were major differences in the rate of expenditures among infrastructure programs. Much of the highway and transit funding was distributed by DOT agencies to their usual grantees via existing formula programs, and was therefore available for use relatively quickly. Similarly, the Federal Aviation Administration distributed airport funds through the existing Airport Improvement Program, and the Maritime Administration awarded grants through its existing Assistance to Small Shipyards Program. More than 50% of funding for these programs was expended by grantees by January 2011, less than two years after the enactment of ARRA ( Table 3 ). Discretionary funds for programs established in the law, such as for the high-speed rail program and TIGER grants, took much longer to distribute and to use because DOT had to design the programs, issue rules, advertise the availability of funds, and wait for applications. Congress recognized that setting up new programs would take some time by including longer obligation deadlines in the law. High-speed rail funding was expended particularly slowly. DOT data showed that three years after ARRA enactment, 8% of high-speed rail funding had been expended. High-speed rail had been studied for decades, but there were almost no plans or projects that were ready for implementation. In addition, unlike other parts of DOT, the Federal Railroad Administration was inexperienced at administering large amounts of grant funds. A major exception to the general distinction between the timing of formula and discretionary program expenditures was the ARRA funding for the Federal Transit Administration's Capital Investment Grant (CIG) Program. The CIG Program, also known as New Starts, funds the construction of new fixed-guideway public transportation systems and the expansion of existing systems. Eligible projects include transit rail, such as subway/elevated rail (heavy rail), light rail, and commuter rail, as well as bus rapid transit and ferries. The agency has discretion in selecting projects to receive funds and in determining the federal contribution to each approved project. ARRA provided $750 million for the CIG Program. The Federal Transit Administration distributed these funds to 11 projects already under construction that "demonstrated some contract capacity to absorb additional revenues." The money was given to local transit authorities as various construction activities were completed. According to DOT, 63% of these funds were spent within one year of the ARRA's enactment and 100% were spent within two years. In general, it was easier for state and local agencies to quickly spend funds on the types of small-scale projects that are typically made possible by formula funds. The Government Accountability Office (GAO) found that more than two-thirds of highway funds were committed for pavement improvement projects, such as resurfacing, reconstruction, and rehabilitation of existing roadways, and three-quarters of transit funds were committed to upgrading existing facilities and purchasing or rehabilitating buses. Funding for airports was used to rehabilitate and reconstruct runways and taxiways, as well as to upgrade or purchase air navigation infrastructure such as air traffic control towers and engine generators. The Level of Infrastructure Investment Can Depend on Nonfederal Entities Public spending on transportation, measured in inflation-adjusted 2017 dollars, has been on a downward trend since peaking in 2003 ( Figure 1 ). Infrastructure funding provided by ARRA interrupted that trend, buoying total spending in 2010 and 2011. Except for 2009, however, state and local expenditures, which make up around 75% of total infrastructure expenditures, continued to fall. State and local spending on transportation infrastructure, adjusted for inflation, was 8% lower in 2013 than in 2007, reflecting the long-term damage the Great Recession did to state and local budgets. As the stimulus from ARRA faded, 2013 saw the lowest spending on these major infrastructure systems since the late 1990s. In some infrastructure sectors, such as highways, the growth in federal spending due to ARRA did not outweigh the decline in state and local government spending. Consequently, highway infrastructure spending fell over the period 2009 through 2013 ( Figure 2 ). Of course, there is no way to know exactly how highway spending would have changed in the absence of ARRA. Federal spending would have been lower, but it is possible that state and local government spending would have been higher if federal funding had not been available. Maintenance-of-Effort Requirements Were Difficult to Enforce Because of the Great Recession, state and local governments experienced a dramatic reduction in tax revenue even as demand for government services increased. For this reason, many jurisdictions found it difficult to maintain pre-recession levels of spending for at least some types of transportation infrastructure, leaving the possibility that additional federal dollars would simply replace state and local dollars. The federal share of transportation projects using ARRA funds was generally 100%, but states were required to certify that they would spend amounts already planned. This maintenance-of-effort requirement was in force from ARRA's enactment in February 2009, by which time the recession had been under way for over a year, through September 30, 2010. In its analysis of ARRA, GAO found that the maintenance-of-effort requirements in transportation were challenging to comply with and to administer. For example, governors had to certify maintenance of effort in several transportation programs, some administered by the state and some administered by local governments and independent authorities. Within each state, these various programs typically had different and complex revenue sources. In many cases, states did not have a way to identify planned expenditures. Because of ambiguities in the law and practicalities that come to light with experience, DOT issued maintenance-of-effort guidance to the states seven times in the first year after ARRA enactment. Some research on the effects of highway funding in ARRA on state highway spending found that, despite the maintenance-of-effort requirement, there was substantial substitution of federal dollars for state dollars. One analysis found that for every dollar of federal aid in ARRA for highways, on average, overall spending increased by 19 cents, meaning states decreased their own spending by 81 cents. Employment Effects Were Modest In many infrastructure sectors, the employment effects of ARRA funding were relatively modest. In highway construction, for example, employment dropped sharply from the end of 2007 through 2009. There was a slight increase through 2010, presumably related to the ARRA funding, but a sustained increase in employment did not begin again until 2015. The number of highway construction workers reached pre-recession levels in 2018 ( Figure 3 ). Although employment in highway construction was much higher before the recession began in late 2007, employment might have fallen further in the absence of ARRA funding. The transportation funding in ARRA, therefore, may have allowed state and local governments to maintain a certain level of employment in the transportation construction sector. Additionally, it likely permitted state and local governments to maintain employment in other, nontransportation, sectors by shifting state expenditures from transportation to other purposes. The slow recovery of highway construction jobs suggests the sector could have productively absorbed more funding after the ARRA funding had largely been expended, particularly during the 2013, 2014, and 2015 construction seasons. Financing Infrastructure May Leverage State Resources The financial crisis and the accompanying recession affected state and local credit markets. Among other things, declines in employment and business activity made it difficult for state and local governments to raise funds through the sale of tax-exempt municipal bonds whose repayment depended on tax revenue. Limited access to financing or to financing at much higher costs may have contributed to a decline in state and local government infrastructure investment. In more normal economic times, municipal bonds account for about 10% of the capital invested in highways and public transportation. In response to the problems in the municipal credit markets, ARRA included the Build America Bond (BAB) program, which permitted state and local governments to issue tax credit bonds from April 2009 through the end of 2010 to raise funds that could be used for any type of capital investment. Unlike traditional municipal bonds, which provide a subsidy to bondholders by exempting interest payments from federal income taxation and thereby allow issuers to sell bonds at low interest rates, BABs offered a higher taxable yield to investors; the federal government subsidized 35% of the issuer's interest costs. This subsidy rate was generally seen as generous, thereby reducing borrowing costs for state and local governments. Because the interest on BABs was taxable, the bonds were attractive to investors without federal tax liability, such as pension funds, enlarging the pool of possible investors. The taxable bond market is about 10 times the size of the traditional tax-exempt bond market. This larger market may have contributed to the reduction in borrowing costs. BABs were also considered more efficient than traditional municipal bonds because all of the federal subsidy went to the state or local government issuer. With traditional tax-exempt municipal bonds, some of the subsidy goes to investors. There were 2,275 BAB issuances over the 21 months of eligibility, for a total of $181 billion. About 30% of BAB funding went to educational facilities, followed by water and sewer projects (13.8%), highways (13.7%), and transit (8.7%). Without the BAB program, some of this capital would have been raised using traditional tax-exempt bonds, although likely at a higher cost to state and local government issuers. The Department of the Treasury stated that BAB issuance surged in the last quarter of 2010, suggesting that issuers were accelerating the timing of capital financings and, thus, capital investment. Although BABs had a generous subsidy rate relative to other municipal bonds, their structure ensured that issuers paid 65% of the interest costs, effectively requiring state and local governments to pay a larger share of infrastructure costs than under ARRA grant programs. Because the federal subsidy is paid to the issuer as the interest is due to the investor, the cost to the federal government of BABs was spread over the subsequent years ( Table 2 ). Stimulus-Funded Projects Can Provide Transportation Benefits Because the purpose of ARRA was to stimulate the economy, the law included time limits on the obligation and expenditure of transportation funds. As noted earlier, about half of the transportation funds appropriated by ARRA were expended by the end of FY2010, within 20 months of the law's enactment. Much of this funding went to routine projects such as highway paving and bus purchases that were quick to implement. Larger projects that required more detailed environmental reviews and complex design work were not "shovel-ready," leading to assertions that ARRA did not "fund investments that would provide long-term economic returns." In its examination of ARRA transportation expenditures, GAO found that the focus on quick implementation did change the mix of highway projects chosen. Some state officials stated that the deadlines "prohibited other, potentially higher-priority projects from being selected for funding." However, others noted that ARRA funding allowed them to complete so-called "state-of-good-repair" projects, presumably leaving greater financial capacity to undertake larger projects in the future. Furthermore, economic research shows that smaller state-of-good-repair projects often have higher benefit-cost ratios than new, large "game changing" projects whose benefits are often more speculative. In its biennial examination of the highway and public transportation systems, DOT typically finds that, for the United States as a whole, too little is spent on state-of good-repair projects versus building new capacity. In its latest report, DOT examined actual spending in 2014 and various investment scenarios for the period 2015 through 2034. DOT found that state-of-good-repair spending was 76% of total highway spending in 2014, whereas to maximize economic benefits about 79% should go to such projects. For public transportation, DOT found that 64% to 74% of total infrastructure spending should be devoted to state-of-good repair projects, whereas 60% was used for that purpose in 2014.	Summary:	gov_report	1,024	null	59
crs_R45819	crs_R45819_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Numerous natural disastersâincluding the 2017 hurricane season and devastating wildfires in Californiaâserved as catalysts for significant recent changes in federal emergency management policy. Most of these policy changes were included in the Disaster Recovery Reform Act of 2018 (DRRA), which was included as Division D of the FAA Reauthorization Act of 2018 ( P.L. 115-254 ). DRRA is the most comprehensive reform of the Federal Emergency Management Agency's (FEMA's) disaster assistance programs since the passage of the Sandy Recovery Improvement Act of 2013 (SRIA, Division B of P.L. 113-2 ) and the Post-Katrina Emergency Management Reform Act of 2006 (PKEMRA, P.L. 109-295 ). As with past disaster legislation, lessons learned following recent disasters revealed areas that could be improved through legislative and programmatic changes, including the need for increased preparedness and pre-disaster mitigation. The legislative intent of DRRA includes improving disaster preparedness, response, recovery, and mitigation, including pre-disaster mitigation; clarifying assistance program eligibility, processes, and limitations, including on the recoupment of funding; and increasing FEMA's transparency and accountability. Thus, DRRA amends many sections of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act, P.L. 93-288 , as amended; 42 U.S.C. Â§Â§5121 et seq.), which provides the authority for the President to issue declarations of emergency and major disasters, and provides a range of federal assistance to local, state, territorial, and Indian tribal governments, as well as certain private nonprofit organizations, and individuals and families. In addition to numerous amendments to the Stafford Act, DRRA includes new standalone authorities, and requires reports to Congress, rulemaking, and other actions. This report is structured to first provide a tabular overview of the major changes that DDRA made to the Stafford Act (see Table 1 ). The report then provides detailed explanations of the programmatic and procedural modifications to various disaster assistance programs under DRRA. These DRRA modifications are grouped in the following sections: preparedness; mitigation; public assistance; individual assistance; flood plain management and flood insurance; and other provisions. In addition to a description of DRRA's changes to programs, each section includes potential policy considerations for Congress. Appendix A includes the following tables of deadlines associated with DRRA's reporting, rulemaking/regulatory, and other implementation actions and requirements: Table A-1 , DRRA Reporting Requirements (i.e., reports to Congress); Table A-2 , DRRA Rulemaking and Regulations Requirements; and Table A-3 , DRRA Guidance and Other Required Actions. A table of common acronyms used throughout this report is also included in Table B-1 of Appendix B . Finally, a brief legislative history of DRRA is included in Appendix C . Preparedness5 Section 1208: Prioritization of Facilities DRRA Section 1208 requires the FEMA Administrator to provide guidance and annual training to state, local, and Indian tribal governments; first responders; and utility companies on the need to prioritize assistance to hospitals, nursing homes, and other long-term health facilities to ensure they remain functioning, or return to functioning as soon as possible, during power outages related to natural hazards and severe weather; how these medical facilities should prepare for power outages related to natural hazards and severe weather; and how local, state, territorial, and Indian tribal governments; first responders; utility companies; and these medical facilities should develop a strategy to coordinate and implement emergency response plans. Recent hurricanes have caused power outages affecting millions of individuals, including those in medical care facilities. For example, following Hurricane Harvey, 200,000 people lost power in south-east Texas. Additionally, in Florida, after Hurricane Irma made landfall, 4 million people lost power and failed air conditioning at a nursing home led to 11 deaths. DRRA Section 1208 may result in medical care facilities being better prepared for power outages and help mitigate the damage (and potential deaths) associated with power outages. Section 1209: Guidance on Evacuation Routes DRRA Section 1209 requires the FEMA Administrator, in coordination with the Administrator of the Federal Highway Administration (FHWA), to develop and issue guidance for state, local, and Indian tribal governments in identifying evacuation routes. Specifically, the FEMA Administrator is to revise existing guidance, or issue new guidance, on these evacuation routes. The FEMA Administrator, in developing this guidance, is to consider whether these evacuation routes have resisted disaster impacts and recovered quickly from disasters; the need to evacuate special needs populations; information sharing and public communications with evacuees; sheltering evacuees, including the care, protection, and sheltering of their animals; the return of evacuees to their homes; other issues or items the Administrator considers appropriate; methods that assist evacuation route planning and implementation; the ability of the evacuation routes to manage contraflow operations; the input of federal land management agencies where evacuation routes may cross or go through public land; and such other issues or items the FHWA Administrator considers appropriate. Section 1209 also states that the FEMA Administrator may, in coordination with the FHWA Administrator and local, state, territorial, and Indian tribal governments, conduct a study of the adequacy of available evacuation routes, and submit recommendations on how to assist with anticipated evacuation flow. Currently, FHWA uses various tools and technology for hurricane modeling, information sharing, and transportation (evacuation) modeling and analysis. DRRA Section 1209 codifies practices that FEMA and FHWA currently employ to address evacuation route planning and implementation of evacuations. Section 1236: Guidance and Training by FEMA on Coordination of Emergency Response Plans DRRA Section 1236 requires the FEMA Administrator, in coordination with other relevant agencies, to provide annual guidance and training on coordination of emergency response plans to local, state, territorial, and Indian tribal governments; first responders; and hazardous material storage facilities. Specifically, the annual guidance and training shall include: a list of required equipment for a release of hazardous substances and material; an outline of health risks associated with exposure to hazardous substances and materials; and published best practices for mitigating damage, and danger, to communities from hazardous materials. This required annual guidance and training is to be implemented not later than 180 days after DRRA's enactment (i.e., by April 3, 2019). Prior to DRRA and presently, the U.S. Department of Homeland Security (DHS) provides hazardous materials information from myriad sources, such as universities and other local and federal agencies. The available information includes procedures and resources for responding to different types of hazardous material releases, independent study training courses, and several resources related to medical management for chemical exposures, but the information is broadly distributed and may not be quickly accessible when responding to a hazardous materials incident. DRRA Section 1236 adds not only the plan coordination training requirement, but also requires the development of resources that may streamline information that can be incorporated into emergency response plans, such as the list of required equipment and health risks. Mitigation Section 1234: National Public Infrastructure Pre-Disaster Hazard Mitigation14 DRRA Section 1234 authorizes the National Public Infrastructure Pre-Disaster Mitigation Fund (NPIPDM), which allows the President to set aside 6% from the Disaster Relief F und (DRF) with respect to each major disaster, establishes limitations on the receipt of pre-disaster hazard mitigation funding, and expands the criteria considered in awarding mitigation funds. Pre-Disaster Mitigation (PDM) funding is authorized by Stafford Act Section 203âPre-Disaster Hazard Mitigation, with the goal of reducing overall risk to the population and structures from future hazard events, while also reducing reliance on federal funding from future disasters. For FY2019, the PDM program is funded through the DRF . Pre-DRRA, the amount available for PDM was appropriated separately on an annual basis, and financial assistance was limited by the amount available in the National Pre-Disaster Mitigation Fund. FEMA awarded PDM grants competitively, and 56 states and jurisdictions, as well as federally-recognized Indian tribal governments, were eligible to apply. Local governments, including Indian tribes or authorized tribal organizations, were required to apply to their state/territory as subapplicants. In FY2018, each state, jurisdiction, and tribe was eligible for a baseline level of financial assistance in the amount of the lesser of 1% of appropriated funding, or $575,000, although additional funding could be awarded competitively. No applicant was eligible to receive more than 15% of the appropriated funding. In FY2018, FEMA set aside 10% of the appropriation for federally recognized tribes. FEMA sets priorities annually for the competitive PDM funding, with priority given to applicants that have little or no disaster funding available through the Hazard Mitigation Grant Program (HMGP). In FY2018, FEMA awarded $235.2 million in PDM funding . DRRA authorizes the NPIPDM, for which the President may set aside from the DRF, with respect to each major disaster, an amount equal to 6% of the estimated aggregate amount of the grants to be made pursuant to the following sections of the Stafford Act: Section 403âEssential Assistance; Section 406âRepair, Restoration, and Replacement of Damaged Facilities; Section 407âDebris Removal; Section 408âFederal Assistance to Individuals and Households; Section 410âUnemployment Assistance; Section 416âCrisis Counseling Assistance and Training; and Section 428âPublic Assistance Program Alternative Procedures. The amount set aside for PDM shall not reduce the amounts otherwise available under the sections above. Funding from the NPIPDM may be used to provide technical and financial mitigation assistance pursuant to each major disaster. An additional clause in DRRA provides that NPIPDM funds may be used "to establish and carry out enforcement activities and implement the latest published editions of relevant consensus-based codes, specifications, and standards that incorporate the latest hazard-resistant designs and establish minimum acceptable criteria for the design, construction, and maintenance of residential structures and facilities that may be eligible for assistance under this Act.... " The changes to PDM funding in DRRA may increase the focus on funding public infrastructure projects that improve community resilience before a disaster occurs, though FEMA has the discretion to shape the program in many ways. There is potential for significantly increased funding post-DRRA through the new transfer from the DRF, but it is not yet clear how FEMA will implement this new program. In the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) , Congress made $250 million available for PDM for FY2019, which may be merged with funds for the NPIPDM once it is fully implemented. The FY2019 PDM program will be the last PDM cycle before the rollout of the new DRRA Building Resilient Infrastructure and Communities (BRIC) Program. FEMA has authority to operate the legacy PDM program for FY2019, after which BRIC will replace the current PDM program. Funding not used in FY2019 will remain for the first year of BRIC, which will likely begin in FY2020. PDM projects already in progress will continue through closeout under the current PDM guidance. Any unobligated PDM funds may be rolled into a "carryover PDM" funding account which could be used for obligations of PDM projects underway when BRIC is implemented. Once BRIC is fully implemented, legacy PDM funds may be merged with BRIC funds, which may then be used for both PDM and BRIC work. FEMA is in the process of determining how funds under the 6% set-aside will be allocated to local, state, territorial, and Indian tribal governments. FEMA expects that BRIC will be funded entirely by the 6% set-aside; however, nothing prohibits Congress from appropriating additional funds for the program. FEMA anticipates setting aside the full 6% estimate from each major disaster declaration within 180 days after declaration. Based on the recent funding trends of the DRF, FEMA assumes that it would be a rare circumstance in which there is no set-aside. Other provisions in DRRA Section 1234 establish that mitigation funds under Stafford Act Section 203 would only be provided to states which had received a major disaster declaration in the past seven years, or any Indian tribal governments located partially or entirely within the boundaries of such states. Other provisions would expand the criteria to be considered in awarding mitigation funds, including the extent to which the applicants have adopted hazard-resistant building codes and design standards, and the extent to which the funding would increase resiliency. Section 1235(a): Additional Mitigation Activities32 DRRA Section 1235(a) amends Stafford Act Section 404(a)âHazard Mitigation to include a provision authorizing the President to contribute up to 75% of the cost of hazard mitigation measures which the President has determined are cost effective and which increase resilience to future damage, hardship, loss, or suffering in any area affected by a major disaster. The pre-DRRA language only authorized funding for hazard mitigation measures which substantially reduce risk. DRRA does not include definitions of reducing risk or increasing resilience. However, DRRA Section 1235(d) requires FEMA to issue a rulemaking defining the terms resilient and resiliency , and although these definitions relate to Stafford Act Section 406âRepair, Restoration, and Replacement of Damaged Facilities, FEMA may consider using these definitions for mitigation activities as well. Section 1205: Additional Activities33 DRRA Section 1205 amends Stafford Act Section 404âHazard Mitigation by adding a section to allow recipients of hazard mitigation assistance provided under this section and Section 203âPre-Disaster Hazard Mitigation to use the funding to conduct activities to help reduce the risk of future damage, hardship, loss, or suffering in any area affected by a wildfire or windstorm. The section includes a nonexclusive list of wildfire and windstorm mitigation activities that are eligible for funding. These activities were eligible for funding pre-DRRA, but this section is intended to clarify eligible uses of funding under FEMA's hazard mitigation grant programs. Section 1217: Additional Disaster Assistance37 DRRA Section 1217 amends Section 209(c)(2) of the Public Works and Economic Development Act of 1965 such that, when assistance is given to communities whose economy has been injured by a major disaster or emergency and which have received a major disaster or emergency declaration under the Stafford Act, the Secretary of Commerce may encourage hazard mitigation if appropriate. The Public Works and Economic Development Act of 1965 did not have any previous mention of mitigation; however, this provision does not give the Secretary any additional tools by which to encourage hazard mitigation. Section 1204: Wildfire Mitigation39 Section 1204 of DRRA amends Stafford Act Sections 420âFire Management Assistance and 404(a)âHazard Mitigation to include HMGP for Fire Management Assistance Grant (FMAG) declarations. The Stafford Act authorizes three types of declarations that provide federal assistance to states and localities: (1) FMAG declarations, (2) emergency declarations, and (3) major disaster declarations. FMAGs provide federal assistance for fire suppression activities. Emergency declarations trigger aid that protects property, public health, and safety and lessens or averts the threat of an incident becoming a catastrophic event. A major disaster declaration constitutes the broadest authority for federal agencies to provide supplemental assistance to help state and local governments, families and individuals, and certain nonprofit organizations recover from the incident. Major disaster declarations also authorize statewide hazard mitigation grants to states and tribes through FEMA's HMGP. Authorized under Stafford Act Section 404âHazard Mitigation, HMGP can be used to fund mitigation projects to protect either private or public property, provided that the project fits within local, state, territorial, and Indian tribal government mitigation strategies to address risk and complies with HMGP guidelines. HMGP grant amounts are provided on a sliding scale based on the percentage of funds spent for Public and Individual Assistance for each presidentially-declared major disaster declaration. For states and federally-recognized tribes with a FEMA-approved Standard State or Tribal Mitigation Plan, the formula provides for up to 15% of the first $2 billion of estimated aggregate amounts of disaster assistance, up to 10% for amounts between $2 billion and $10 billion, and 7.5% for amounts between $10 billion and $35.333 billion. DRRA Section 1204 also requires the FEMA Administrator to submit a report one year after enactment and annually thereafter containing a summary of any mitigation projects carried out, and any funding provided to those projects, to the Senate Committee on Homeland Security and Governmental Affairs (HSGAC), the House Committee on Transportation and Infrastructure, and the House and Senate Committees on Appropriations. One potential issue of congressional concern is the cost implications of providing mitigation funding for FMAG declarations. All things being equal, making HMGP available for FMAGs will increase federal expenditures for HMGP because it expands the number of incidents eligible for HMGP. The additional costs, however, may not be significant compared to HMGP funding for major disaster declarations. As previously discussed, HMGP grants are based on the percentage of funds spent for Public and Individual Assistance. Though it is unclear how the HMGP formula will be applied to FMAG declarations, HMGP grant amounts would likely be less than what is typically provided for major disasters because funding for major disasters is significantly more than what is provided for FMAGs. For example, from FY2017 to FY2018, $12.3 million has been obligated for FMAG declarations. In contrast, $1.7 billion has been obligated for Hurricane Matthew. Furthermore, HMGP funding for FMAGs could be considered an investment because the projects they fund can help save recovery costs for future disasters. Section 1233: Additional Hazard Mitigation Activities46 DRRA Section 1233 authorizes recipients of hazard mitigation assistance to use the assistance to reduce the risk of earthquake damage, hardship, loss, or suffering for areas in the United States affected by earthquake hazards. DRRA Section 1233 addresses three areas of earthquake mitigation, all related to improving the capability for an earthquake early-warning system: improvements to regional seismic networks; improvements to geodetic networks; and improvements to seismometers, global positioning system (GPS) receivers, and associated infrastructure. The earthquake hazards and mitigation community long ago shifted away from an early focus on predicting earthquakes to mitigating earthquake hazards and reducing risk, and more recently to a focus on activities that would enhance the effectiveness of an earthquake early-warning system. An earthquake early-warning system would send a warning after an earthquake occurred but before the damaging seismic waves reach a community that would be affected by the earthquake-induced shaking. In contrast, an earthquake prediction would provide a date, time, and location of a future earthquake. The National Earthquake Hazards Reduction Program Reauthorization Act of 2018 ( P.L. 115-307 ) removed statutory language referencing the goal of earthquake prediction, substituting instead the goal of issuing earthquake early warnings and alerts. Since 2006, the U.S. Geological Survey (USGS), together with several cooperating institutions, has been working to develop a U.S. earthquake early-warning system. According to the USGS, the goal is to create and operate such a system for the nation's highest-risk regions, beginning with California, Oregon, and Washington. Other seismically active western states, such as Alaska, also may eventually be incorporated into an early-warning system, and possibly a region in the Midwest known as the New Madrid Seismic Zone. The authority provided in DRRA Section 1233 could help improve the U.S. early-warning capability because it addresses many of the components for earthquake detection (e.g., seismometers, the instruments that detect shaking), location (e.g., GPS receivers and infrastructure for more precise mapping of where shaking will occur), and improvements to the connected regional networks of seismometers and geodetic instruments. Part of the challenge in implementing an effective earthquake early-warning system is communicating the timing and location of dangerous shaking once the earthquake occurs. The section does not appear to address that challenge directly; however, improvements to the components specified in the section would likely improve overall early-warning system performance. Section 1231: Guidance on Hazard Mitigation Assistance52 DRRA Section 1231 requires FEMA, not later than 180 days after enactment (April 3, 2019), to issue guidance regarding the acquisition of property for open space as a mitigation measure under Stafford Act Section 404âHazard Mitigation. This guidance shall include a process by which the State Hazard Mitigation Officer (SHMO) appointed for the acquisition shall provide written notification to the local government, not later than 60 days after the applicant for assistance enters into an agreement with FEMA regarding the acquisition, that includes (1) the location of the acquisition; (2) the state-local assistance agreement for the Hazard Mitigation Grant Program; (3) a description of the acquisition; and (4) a copy of the deed restrictions. The guidance shall also include recommendations for entering into and implementing a memorandum of understanding between units of local government and the grantee or subgrantee, the state, and the regional FEMA Administrator that includes provisions to (1) use and maintain the open space consistent with Section 404 and all associated regulations, standards and guidance, and consistent with all adjoining property, so long as the cost of the maintenance is borne by the local government; and (2) maintain the open space pursuant to standards exceeding any local government standards defined in the agreement with FEMA. Section 1215: Management CostsâHazard Mitigation54 DRRA Section 1215 amends Stafford Act Section 324(b)(2)(A)âManagement Costs by setting out specific management cost caps for hazard mitigation. A grantee under Stafford Act Section 404âHazard Mitigation may be reimbursed not more than 15% of the total award, of which not more than 10% may be used by the grantee and 5% by a subgrantee. Public Assistance58 Section 1207(c) and (d): Program Improvements DRRA Section 1207(c) amends Stafford Act Section 428(d)âPublic Assistance Program Alternative Procedures to prohibit the conditioning of federal assistance under the Stafford Act on the election of an eligible entity to participate in the alternative procedures set forth in Section 428 of the Stafford Act. Prior to enactment of this provision of DRRA, FEMA had the discretion to impose conditions on the use of Section 428 procedures. DRRA Section 1207(d) amends Section 428(e)(1) to add a provision that requires cost estimates submitted under Section 428 procedures that are certified by a professionally licensed engineer and accepted by the FEMA Administrator to be presumed to be reasonable and eligible costs unless there is evidence of fraud. Prior to enactment of this provision, FEMA had the discretion to make case-by-case determinations regarding whether costs were reasonable and eligible, and FEMA had the discretion to change the determinations even after an original cost estimate had been approved. Section 1206(b): Eligibility for Code Implementation and Enforcement DRRA Section 1206(b) amends Stafford Act Section 406âRepair, Restoration, and Replacement of Damaged Facilities to add base and overtime wages for extra hires to facilitate implementation and enforcement of adopted building codes as an allowable expense. Allowable base and overtime wages are authorized for not more than 180 days after a major disaster declaration is issued. Section 1235(b), (c), and (d): Additional Mitigation Activities DRRA Section 1235(b) amends Stafford Act Section 406âRepair, Restoration, and Replacement of Damaged Facilities to specify that eligible costs for assistance provided under Section 406 be based on estimates of repairing, restoring, reconstructing, or replacing a public facility or private nonprofit facility in conformity with "the latest published editions of relevant consensus-based codes, specifications, and standards that incorporate the latest hazard-resistant designs and establish minimum acceptable criteria for the design, construction, and maintenance of residential structures and facilities." DRRA Section 1235 also requires that such eligible costs include estimates of replacing eligible projects under Stafford Act Section 406 "in a manner that allows the facility to meet the definition of resilient" developed pursuant to Section 406(e)(1)(A). Prior to DRRA's enactment, FEMA required that such project cost estimates be based on more general language of "codes, specifications, and standards" in place at the time the disaster occurred. DRRA Section 1235(c) amends Stafford Act Section 406 to authorize the contributions for eligible costs to be provided on an actual cost basis or based on cost-estimation procedures and DRRA Section 1235(d) directs the FEMA Administrator, in consultation with the heads of relevant federal agencies, to establish new rules regarding defining "resilient" and "resiliency" for the purposes of eligible costs under Section 406 of the Stafford Act. DRRA directs the President, acting through the FEMA Administrator, to issue a final rulemaking notice on the new rules not later than 18 months after DRRA's enactment (i.e., by April 5, 2020), and requires a final report summarizing the regulations and guidance issued defining "resilient" and "resiliency" to be submitted to Congress no later than two years after DRRA's enactment (i.e., by October 5, 2020). Section 1228: Inundated and Submerged Roads DRRA Section 1228 requires the FEMA Administrator, in coordination with the FHWA Administrator, to develop and issue guidance for local, state, territorial, and Indian tribal governments regarding repair, restoration, and replacement of inundated and submerged roads damaged or destroyed by a major disaster. The guidance must address associated expenses incurred by the government for roads eligible for assistance under Stafford Act Section 406âRepair, Restoration, and Replacement of Damaged Facilities. Prior to DRRA's enactment, FEMA did not issue guidance specifically addressing inundated and submerged roads and alternatives in the use of federal disaster assistance for the repair, restoration, and replacement of roads damaged by a major disaster. Section 1215: Management CostsâPublic Assistance DRRA Section 1215 amends Stafford Act Section 324(b)(2)(B)âManagement Costs to place a cap on any direct administrative costs, and any other administrative associated expenses, of not more than 12% of the total award amount provided under Stafford Act Sections 403âEssential Assistance, 406âRepair, Restoration, and Replacement of Damaged Facilities, 407âDebris Removal, and 502âFederal Emergency Assistance. The 12% cap is to be divided between the primary grantee and subgrantees with the primary grantee receiving not more than 7%, and subgrantees receiving not more than 5% of the total award amount. Individual Assistance69 Section 1213: Multifamily Lease and Repair Assistance DRRA Section 1213 amends Stafford Act Section 408(c)(1)(B)(ii)âFederal Assistance to Individuals and Households, Temporary Housing, Direct Assistance, Lease and Repair of Rental Units for Temporary Housing to expand the eligible areas for multifamily lease and repair properties, and remove the requirement that the value of the improvements or repairs not exceed the value of the lease agreement. FEMA's Multifamily Lease and Repair program is a form of direct temporary housing assistance under Stafford Act Section 408. When eligible individuals and households are unable to use Rental Assistance due to a lack of available housing resources and when it is determined to be a cost-effective alternative to other temporary housing options, FEMA may enter into lease agreements with the owners of multifamily rental property units and may make improvements or repairs, in order to provide temporary housing. Expanding the Areas Eligible for Multifamily Lease and Repair FEMA guidance includes limitations on the conditions of eligibility required to authorize properties for multifamily lease and repair. Prior to DRRA's enactment, multifamily lease and repair properties had to be located in areas covered by an emergency or major disaster declaration. Following DRRA's enactment, however, eligible properties also include those "impacted by a major disaster." According to the House Transportation and Infrastructure Committee's Disaster Recovery Reform Act Report ( DRRA Report ), in amending this section of the Stafford Act, Congress intended to "allow greater flexibility and options for housing disaster victims." Thus, DRRA Section 1213 expands program eligibility for properties, which may increase the number of FEMA-leased multifamily rental properties. This may: increase available housing stock for eligible individuals and households; and reduce FEMA's reliance on other, less cost-effective forms of direct assistance (e.g., Transportable Temporary Housing Units (TTHUs)). Although it was released following DRRA's enactment, FEMA's most recent guidanceâthe Individual Assistance Program and Policy Guide ( IAPPG ) âstates that in order to be eligible for multifamily lease and repair, "[t]he property must be located in an area designated for IA [Individual Assistance] included in a major disaster declaration," which is inconsistent with Stafford Act Section 408(c)(1)(B)(ii)(I)(aa), as amended by DRRA. The IAPPG does, however, add the ability for FEMA to add counties/jurisdictions to the major disaster declaration designed for IA "specifically for the purpose of implementing MLR [Multifamily Lease and Repair]." Thus, while FEMA's most recent guidance expands the agency's ability to implement MLR, it still states that properties must be in designated areas. In order to reflect the changes to the Multifamily Lease and Repair program post-DRRA, FEMA would need to update its guidance to be consistent with Stafford Act Section 408(c)(1)(B)(ii)(I)(aa), as amended, and may consider defining what it means for a property to be "impacted by a major disaster," and any additional, related eligibility criteria. Determining the Cost-Effectiveness of Potential Multifamily Lease and Repair Properties Prior to DRRA's enactment, the value of the improvements or repairs were not permitted to exceed the value of the lease agreement, which, per FEMA policy, could not be greater than the Fair Market Rent (FMR). Post-DRRA, the restriction that improvements or repairs not exceed the value of the lease agreement has been removed from Stafford Act Section 408(c)(1)(B)(ii)(II)âFederal Assistance to Individuals and Households, Temporary Housing, Direct Assistance, Lease and Repair of Rental Units for Temporary Housing, as amended. Additionally, and as was the case prior to DRRA, the cost-effectiveness of the potential multifamily lease and repair property must still be considered when FEMA determines whether or not to enter into a lease agreement with a property owner for the purpose of providing Multifamily Lease and Repair assistance. As stated above, when eligible individuals and households are unable to use Rental Assistance and when it is determined to be a cost-effective alternative to other temporary housing options, FEMA may use multifamily lease and repair to provide temporary housing. According to FEMA's guidance, the process by which the agency determines the cost-effectiveness of a potential multifamily lease and repair property is that "FEMA will determine the value of the lease agreement by multiplying the approved monthly Rental Assistance rate by the number of units, and then multiplying the number of months remaining between the date the repairs are completed and the end of the 18-month period of assistance." FEMA guidance, however, currently states that there are three steps that FEMA must take to determine the cost-effectiveness of a potential multifamily lease and repair property. FEMA would need to update the IAPPG to clarify the process by which FEMA determines cost-effectiveness and to reflect the fact that the cost-effectiveness determination is not based on a three-step test. Additionally, it is unclear whether the removal of the restriction that improvements or repairs not exceed the value of the lease agreement will have a significant impact on program administration. There are several reasons the impact of this legislative change may not be significant including: the property must be found to be cost-effective even if a potential property requiring improvements or repairs in excess of the value of the lease agreement may be otherwise eligible; and prior to DRRA's enactment, it was possible for FEMA to enter into lease agreements when the value of the improvements or repairs exceeded the value of the lease agreement, provided the necessary written justification was submitted and approved. Finally, within two years (i.e., due by October 5, 2020), the Inspector General (IG) of DHS must assess the use of FEMA's direct assistance authority, including the adequacy of the benefit-cost analysis conducted, to justify this alternative to other temporary housing options, and submit a report to Congress. Section 1211: State Administration of Assistance for Direct Temporary Housing and Permanent Housing Construction The State or Tribal Government's Role in Providing Direct Temporary Housing Assistance and Permanent Housing Construction DRRA Section 1211(a) amends Stafford Act Section 408(f)âFederal Assistance to Individuals and Households, State Role to expand the types of FEMA Individuals and Households Program (IHP) assistance that a state, territorial, or Indian tribal government may request to administer under Stafford Act Section 408(f)(1)(A) to include Direct Temporary Housing Assistance under Section 408(c)(1)(B) and Permanent Housing Construction under Section 408(c)(4), in addition to Other Needs Assistance (ONA) under Section 408(e). Prior to DRRA's enactment, Stafford Act Section 408(f)(1) only allowed state, territorial, and Indian tribal governments to request financial assistance to manage ONA. According to Senate HSGAC's Disaster Recovery Reform Act of 2018 Report ( DRRA Report ), this section of DRRA "emphasizes the need for and provides tools to execute an effective local response to disasters ... [in part by] empowering states to administer housing assistance efforts." FEMA has also stated that: [s]tate and tribal officials have the best understanding of the temporary housing needs for survivors in their communities. This provision incentivizes innovation, cost containment and prudent management by providing general eligibility requirements while allowing them the flexibility to design their own programs. These statements highlight a key aspect of this amendment to the Stafford Actâthat, because the federal share of eligible housing costs is 100%, in effect, FEMA may now provide state, territorial, and Indian tribal governments with a block grant for disaster housing assistance, provided certain requirements are met (see below). Allowing state, territorial, or Indian tribal governments to administer these housing programs, in addition to ONA, using a flexible, block-grant program that "leverag[es] state autonomy" "to tailor a solution that specifically addresses the needs of disaster victims" may expedite and enhance disaster recovery. Despite these benefits, the ability for state, territorial, or Indian tribal governments to design and administer customized versions of these programs has the potential to result in challenges. For example: individuals and households may face challenges to participating in these programs if application processes and program requirements are not clearly defined, or if their past participation in these programs differs from future program implementation; client advocates and case managers may have trouble supporting individuals and households seeking to and/or participating in these programs if application processes and program administration differ from jurisdiction to jurisdiction, or if a state/territorial/Indian tribal government implements the programs differently for different disasters; state, territorial, and Indian tribal governments seeking to administer these programs may also struggle to administer active programs with different application processes and program administration requirements, and may find it difficult to manage programs when future program implementation differs from past program implementation; and federal partners supporting state, territorial, and Indian tribal governments may find it difficult to keep track of application processes and program administration that differs from jurisdiction to jurisdiction, or when future program implementation differs from past program implementation. In addition to the programmatic flexibility accorded by this amendment to the Stafford Act, state, territorial, or Indian tribal governments that elect to administer housing assistance and/or ONA under Section 408(f) are eligible to expend up to 5% of the amount of the grant for administrative costs. This may increase their capacity to quickly and effectively administer these programs. With the addition of the ability of state, territorial, or Indian tribal governments to administer Direct Temporary Housing Assistance and Permanent Housing Construction, it is possible that the state, territorial, or Indian tribal government may be required to select an option for administration of assistance, as in the case with ONA. Within two years of DRRA's enactment (i.e., by October 5, 2020), FEMA is required to issue final regulations to establish how a state, territorial, or Indian tribal government is to administer Direct Temporary Housing Assistance and Permanent Housing Construction. In the intervening period, FEMA has the ability to administer this as a pilot program until the final regulations are promulgated (an example of such a regulation can be found in 44 C.F.R. Â§206.120âState Administration of Other Needs Assistance, which sets out the regulations for state administration of ONA). New Requirements In addition to expanding the types of assistance state, territorial, and Indian tribal governments may administer, DRRA adds requirements for the receipt of approval to administer such assistance. Prior to DRRA's enactment, in order to administer ONA, a governor had to request a grant to provide financial assistance. Post-DRRA, if a state, territorial, or Indian tribal government would like to administer Direct Temporary Housing Assistance, Permanent Housing Construction, and/or ONA, then it must "submit to the President an application for a grant to provide financial assistance under the program [emphasis added]." DRRA also includes criteria for the approval of applications, as follows: (i) a requirement that the State or Indian tribal government submit a housing strategy under subparagraph (C) [Requirement of Housing Strategy]; (ii) the demonstrated ability of the State or Indian tribal government to manage the program under this section; (iii) there being in effect a plan approved by the President as to how the State or Indian tribal government will comply with applicable Federal laws and regulations and how the State or Indian tribal government will provide assistance under its plan; (iv) a requirement that the State or Indian tribal government comply with rules and regulations established pursuant to subsection (j); and (v) a requirement that the President, or the designee of the President, comply with subsection (i) [Verification Measures]. Three requirements intended to ensure the state, territorial, or Indian tribal government that seeks to administer these programs has the capacity to do so, include: the state, territorial, or Indian tribal government must have an approved housing strategy, which may encourage the development of disaster housing strategies to better enable effective local response to disasters; the state, territorial, or Indian tribal government must have the demonstrated ability to manage the programâalthough it is unclear what evidence may be used to demonstrate the capacity to manage the housing-related programs (note that FEMA is developing guidance for the administration of Direct Temporary Housing and Permanent Housing Construction). An approved State Administrative Plan is a requirement to administer ONA, and FEMA considers this sufficient to demonstrate the state, territorial, or Indian tribal government's capability to manage ONA; and the President or designee shall implement policies, procedures, and internal controls to prevent "waste, fraud, abuse, and program mismanagement"; it is possible for the President to withdraw the approval for the state, territorial, or Indian tribal government to administer Direct Temporary Housing Assistance, Permanent Housing Construction, or ONA. FEMA may need to clarify the application and approval requirements because it is unclear (1) how concepts such as "waste" and "abuse" are defined in this context; (2) how the determination that "the State or Indian tribal government is not administering the program ... in a manner satisfactory to the President" will be madeâalthough DRRA includes a requirement that the DHS IG periodically audit the programs administered by the state, territorial, or Indian tribal governments, and these audits may be used to assess program administration; and (3) how program administration will be managed following a withdrawal of approval and/or whether there will be an opportunity for the state, territorial, or Indian tribal government to remedy any issues identified with regard to program administration or appeal a decision withdrawing approval. Within two years of DRRA's enactment (i.e., by October 5, 2020), FEMA is required to issue final regulations on the administration of this program, in which FEMA may consider addressing the administration of the application and approval processes and requirements, including the requirements for demonstrating the capacity to manage the program, and the process for the withdrawal of approval and any remedies the state, territorial, or Indian tribal government may have. State and Local Reimbursement for Implementing a Housing Solution DRRA Section 1211(b) provides a mechanism for state and local units of government to be reimbursed in the event they do not request a grant to administer housing assistance, if the solution they implement satisfies several conditions. Specifically, DRRA Section 1211(b) notes that FEMA shall reimburse state and local "units of government" for locally-implemented housing solutions that meet three requirements, provided the request for reimbursement is received within a three-year period after a major disaster declaration under Stafford Act Section 401âProcedure for Declaration. The three requirements are that the solution: (1) costs 50 percent of comparable FEMA solution or whatever the locally implemented solution costs, whichever is lower; (2) complies with local housing regulations and ordinances; and (3) the housing solution was implemented within 90 days of the disaster. It is unclear how and when a reimbursement will be provided when a housing solution meets the proper eligibility conditions set forth above. FEMA may issue a new rulemaking and/or policy guidance to establish how the cost of the locally-implemented solution will be assessed and compared with the FEMA solution, as well as how reimbursement requests will be processed. Section 1212: Assistance to Individuals and Households DRRA Section 1212 amends Stafford Act Section 408(h)âFederal Assistance to Individuals and Households, Maximum Amount of Assistanceâto create separate caps for the maximum amount of financial assistance eligible individuals and households may receive for housing assistance and for ONA, and allow for accessibility-related costs. Under FEMA's IHP, financial assistance (e.g., assistance to rent alternate housing accommodations, conduct home repairs, and ONA) and/or direct assistance (e.g., Multifamily Lease and Repair and TTHUs) may be available to eligible individuals and households who, as a result of a disaster, have uninsured or under-insured necessary expenses and serious needs that cannot be met through other means or forms of assistance. Prior to DRRA, an individual or household could receive up to $33,300 (FY2017; adjusted annually) in financial assistance, which included both housing assistance and ONA. Post-DRRA, financial assistance for housing-related needs may not exceed $34,900 (FY2019; adjusted annually), and, separate from that , financial assistance for ONA may not exceed $34,900 (FY2019; adjusted annually). Thus, separate caps of equal amounts have been established for financial housing assistance and ONA. In addition, financial assistance to rent alternate housing accommodations is not subject to the cap . As of the date of this report's publication, FEMA's IAPPG has not been updated to reflect DRRA's changes to the maximum amount of financial assistance. It still notes that Rental Assistance is subject to the cap, which has the potential to create confusion for local, state, territorial, Indian tribal, and federal governments, nonprofit partners, and other entities that assist disaster survivors seeking to rely on the IAPPG as a resource for FEMA's IA policies and procedures. However, FEMA has posted a memorandum on the policy changes to its website, and has stated that the changes will be "incorporated into a subsequent publication of the IAPPG." DRRA Section 1212 also amends Stafford Act Section 408(h) to create exclusions to the maximum amount of assistance for individuals with disabilities for expenses to repair or replace: accessibility-related property improvements under FEMA's Repair Assistance, Replacement Assistance, and Permanent Housing Construction; and accessibility-related personal property under Financial Assistance to Address Other NeedsâPersonal Property, Transportation, and Other Expenses Assistance. Thus, the addition of Stafford Act Section 408(h)(4) may expand the eligibility of individuals with disabilities for financial assistance. In response to the IHP changes post-DRRA, FEMA began processing retroactive payments to applicants who either reached or exceeded the financial cap for disasters declared on or after August 1, 2017, and stated that, in April 2019, it would begin evaluating applications to assess whether some survivors may be eligible for additional rental assistance, which may enable eligible applicants to receive additional funds. Administrative challenges may arise if eligible applicants who received the previous maximum amount of financial assistance now request additional financial assistance for programs to which they did not previously apply. For example, an eligible applicant may not have requested ONA if their request for Repair Assistance already equaled or exceeded the cap. In the past, the combinedâhousing assistance and ONAâcap on the maximum amount of financial assistance that an individual or household was eligible to receive may have resulted in applicants with significant home damage and/or other needs having insufficient funding to meet their disaster-caused needs, including little to no remaining funding available to pay for rental assistance. Thus, changes to Stafford Act Section 408(h) post-DRRA have the potential to result in increased assistance to eligible disaster survivors, and increased federal spending on temporary disaster housing assistance and ONA. This may help to better meet the recovery-related needs of individuals and households who experience significant damage to their primary residence and personal property as a result of a major disaster. However, there is also the potential that this change may disincentivize sufficient insurance coverage because of the new ability for eligible individuals and households to receive separate and increased housing assistance and ONA awards that more comprehensively cover disaster-related real and personal property losses. Section 1216: Flexibility Discretionary Ability to Waive Debts DRRA Section 1216(a) allows FEMA to waive debts owed to the United States related to assistance provided under Stafford Act Section 408âFederal Assistance to Individuals and Households. Federal laws require federal agencies, including FEMA, to identify and recover improper payments . Specifically, the Improper Payments Information Act of 2002 (IPIA, P.L. 107-300 ) and the Improper Payments Elimination and Recovery Act of 2010 (IPERA, P.L. 111-204 ) direct the head of each federal agency to review and identify all programs and activities administered by the agency that may be "susceptible to significant improper payments." IPERA also includes the requirement that the agency take action to collect overpayments. Several federal programs account for a significant portion of improper payments, including FEMA's IHP. The dualâand sometimes conflictingâgoals of (1) expediting FEMA assistance to disaster survivors and (2) maintaining administrative controls to ensure program eligibility may contribute to improper payments. Nonetheless, FEMA reviews disaster assistance payments following every disaster and works to collect overpayments. FEMA does have some discretion not to pursue recoupment. Additionally, the need for FEMA to have discretion with regard to recoupment was previously identifiedâalbeit for a limited period of time. Congressional "concerns about the fairness of FEMA collecting improper payments caused by FEMA error especially when a significant amount of time had elapsed before FEMA provided actual notice to the debtors" led to the passage of the Disaster Assistance Recoupment Fairness Act of 2011 (DARFA, Division D, Section 565 of the Consolidated Appropriations Act, 2012, P.L. 112-74 ). DARFA provided FEMA with the discretionary authority to waive debts arising from improper payments for disasters declared between August 28, 2005, and December 31, 2010âwhich included Hurricanes Katrina and Rita, as well as other disasters. DRRA Section 1216(a) mirrors the factors included in DARFA. Following DRRA's enactment, FEMA may waive a debt related to covered assistance if: distributed in error by FEMA; there was no fault on behalf of the debtor; and collection would be "against equity and good conscience." This section is retroactive, and applies to major disasters or emergencies declared on or after October 28, 2012. Thus, DRRA Section 1216(a) expands FEMA's discretionary ability with regard to debt collection by authorizing FEMA to waive the collection of a debt as long as the above-listed factors are also satisfiedâthe exception is if the debt involves fraud, a false claim, or misrepresentation by the debtor or party having an interest in the claim. However, if FEMA's distributions of covered assistance based on federal agency error exceed 4% of the total amount of covered assistance distributed in any 12-month period, then the DHS IG, charged with monitoring the distribution of covered assistance, shall remove FEMA's waiver authority based on an excessive error rate. That said, according to the House Transportation and Infrastructure Committee's DRRA Report , "FEMA has implemented controls to avoid improper payments ... [and] FEMA's current error rate for improper payments to individuals is less than two percent." It is unclear how FEMA will review and process waivers of improper payments, although FEMA may use the DHS IG's recommendationsâput forth post-DARFAâfor reviewing and processing future debt recoupment cases as outlined in its FEMA's Efforts to Recoup Improper Payments in Accordance with the Disaster Assistance Recoupment Fairness Act of 2011 report. FEMA may also consider issuing a rulemaking and/or policy guidance to require that FEMA's comprehensive quality assurance review procedures apply to the review of recoupment cases, per the DHS IG's recommendation; establish an audit trail for FEMA waiver of recoupment decisions, per the DHS IG's recommendation; and clarify the considerations for approving a waiver (e.g., defining the circumstances under which collection of the debt would be "against equity and good conscience"), which may be especially important given that disaster survivors may face financial hardship if required to repay assistance that they have already spent on recovering from a disaster. Prohibition on Collecting Certain Assistance DRRA Section 1216(b) restricts FEMA's ability to recoup assistance provided under Stafford Act Section 408âFederal Assistance to Individuals and Households. Specifically, Section 1216(b) states: unless there is evidence of civil or criminal fraud, [FEMA] may not take any action to recoup covered assistance ... if the receipt of such assistance occurred on a date that is more than 3 years before the date on which the Agency first provides to the recipient written notification of an intent to recoup [emphasis added]. This section is retroactive, and applies to major disasters or emergencies declared on or after January 1, 2012. According to the House Transportation and Infrastructure Committee's DRRA Report , this provision "will help ensure that FEMA initiates any collection actions as quickly as possible, reduce administrative costs, and provide more certainty to individuals recovering from disasters." FEMA stated that the agency's understanding of this provision is that it establishes a three-year statute of limitations on the agency's ability to recoup debts provided under IHP. Despite apparent congressional and agency intent, FEMA's guidance states that: [w]hile there is no statute of limitations on initiating recoupment of IHP debt owed to the U.S. Government through administrative means, FEMA's goal is to notify applicants of any potential debt owed within three years after the date of the final IHP Assistance payment. FEMA's failure to meet this goal will not preclude it from initiating recoupment of potential debt when otherwise appropriate.... FEMA may notify applicants of any potential debt beyond three years after the date of the final IHP Assistance payment in cases where it considers recovery of funds to be in the best interest of the Federal government.... Congress may require FEMA to update its guidance to reflect DRRA Section 1216(b). Additionally, the legislative language in DRRA Section 1216(b) may result in confusion when interpreting whether the section is discretionary or mandatory. This is because the legislation states that FEMA " may not take any action to recoup covered assistance ... "âas opposed to FEMA " shall not take any action to recoup covered assistance.... " Thus, confusion may exist despite the apparent congressional intent that FEMA should not be able to take any action to recoup covered assistance three years after its receipt and the fact that FEMA has stated it interprets the provision as being mandatory. One action available to Congress is to clarify, through legislation, that this section is mandatory (if that is the intent of Congress) in order to avoid potential ambiguity when interpreting the law. An additional consideration with regard to this provision is that the three-year window to recoup IHP payments will be different for each award to an individual/household, and this will likely pose an administrative challenge for FEMA given the volume of awards provided under the IHP program. Statute of LimitationsâPublic Assistance DRRA Section 1216(c) amends Stafford Act Section 705âDisaster Grant Closeout Procedures to change how the statute of limitations for Public Assistance (PA) is defined. Prior to DRRA's enactment, the statute of limitations on FEMA's ability to recover payments made to a state or local government was three years after the date of transmission of the final expenditure report for the disaster or emergency . DRRA amends the statute of limitations such that no administrative action to recover payments can be initiated " after the date that is 3 years after the date of transmission of the final expenditure report for project completion as certified by the grantee [emphasis added] ." Additionally, this provision applies retroactively to disaster or emergency assistance provided on or after January 1, 2004, and any pending administrative actions were terminated as of the date of DRRA's enactment, if prohibited under Stafford Act Section 705(a)(1), as amended by DRRA. It may take years to close all of the projects associated with a disaster, and, prior to DRRA, FEMA could recoup funding from projects that may have been completed and closed years prior to FEMA's pursuit of funding because the disaster was still open. This post-DRRA project-by-project statute of limitations is a significant change that has the potential to ease the administrative and financial burden that the management of disaster recovery programs places on state, territorial, and Indian tribal governments because it creates certainty as to the projects that may be subject to recoupment. It may also incentivize the timely closeout of PA projects by state and local governments, which may also ease FEMA's administrative and financial burdens. Floodplain Management and Flood Insurance165 Section 1206(a): Eligibility for Code Implementation and Enforcement DRRA Section 1206(a) amends Stafford Act Section 402âGeneral Federal Assistance to allow state and local governments to use general federal assistance funds for the administration and enforcement of building codes and floodplain management ordinances, including inspections for substantial damage compliance. If a building in a Special Flood Hazard Area (SFHA) is determined to be substantially damaged, it must be brought into compliance with local floodplain management standards. Local communities can require the building to be rebuilt to current floodplain management requirements even if the property previously did not need to do so. For instance, the new compliance standard may require the demolition and elevation of the rebuilt building to above the Base Flood Elevation. FEMA does not make a determination of substantial damage; this is the responsibility of the local government, generally by a building department official or floodplain manager. Similarly, the enforcement of building codes and floodplain management ordinances are the responsibility of local government. Particularly following a major flood, communities may be required to assess a large number of properties at the same time, and, as a result, additional resources may be needed. This provision affords an additional source of funding to support communities in carrying out such activities. Section 1207(b): Program Improvements DRRA Section 1207(b) amends Stafford Act Section 406(d)(1)âRepair, Restoration, and Replacement of Damaged Facilities to provide relief from a reduction in disaster assistance for certain public facilities and private nonprofit facilities with multi-structure campuses which were damaged by disasters in 2016 to 2018. Applicants for Public Assistance (PA) for repair, restoration, reconstruction, and replacement are required to obtain flood insurance on damaged insurable facilities (buildings, equipment, contents, and vehicles) as a condition of receiving PA grant funding. Insurance coverage must be subtracted from all applicable PA grants in order to avoid duplication of financial assistance. In addition, the applicant must maintain flood insurance on these facilities in order to be eligible for PA funding in future disasters, whether or not a facility is in the SFHA. If an eligible insurable facility damaged by flooding is located in a SFHA that has been identified for more than one year and the facility is not covered by flood insurance or is underinsured, FEMA will reduce the amount of eligible PA funding for flood losses in the SFHA by the maximum amount of insurance proceeds that would have been received had the buildings and contents been fully covered by a standard National Flood Insurance Program (NFIP) policy. For nonresidential buildings, this is currently a maximum of $500,000 for contents and $500,000 for the building. The Stafford Act previously required that this reduction in disaster assistance should be applied to each individual building in the case of multi-unit campuses, which could result in a significant reduction in PA funding for entities with uninsured multi-structure campuses. The new provision in DRRA provides that the reduction in assistance shall not apply to more than one building of a multi-structure educational, law enforcement, correctional, fire, or medical campus. This amendment applies to disasters declared between January 1, 2016, and December 31, 2018. This means that organizations without flood insurance that had Public Assistance funding reduced under the pre-DRRA Stafford Act provisions will have funding restored for floods such as the 2016 Louisiana floods, and Hurricanes Matthew, Harvey, Irma, Maria, and Florence. Section 1240: Report on Insurance Shortfalls DRRA Section 1240 requires FEMA to submit a report to Congress not later than two years after enactment, and each year after until 2023, on Public Assistance self-insurance shortfalls. As described in " Section 1207(b): Program Improvements ," applicants for PA for repair, restoration, reconstruction, and replacement in an SFHA are required to obtain flood insurance on damaged insurable facilities as a condition of receiving PA grant funding, and maintain insurance on these facilities in order to be eligible for PA funding in future disasters. However, an applicant may apply in writing to FEMA to use a self-insurance plan to comply with the insurance requirement. The details required for the self-insurance plan are set out in FEMA guidance. The DHS IG has issued four reports on applicants' compliance with PA insurance requirements that have identified concerns with applicant compliance with these requirements and FEMA's tracking of applicants' compliance. However, these reports have not focused specifically on self-insurance. The new reports under DRRA Section 1240 will include information on the number of instances and the estimated amounts involved, by state, in which self-insurance amounts have been insufficient to address flood damages. Other Provisions Section 1224: Agency Accountability174 DRRA Section 1224 amends Title IV of the Stafford Act to establish a new section, Section 430âAgency Accountability, addressing public assistance, mission assignments, disaster relief monthly reports, contracts, and the collection of public assistance recipient and subrecipient contracts. Subsection (a) of the new Stafford Act Section 430, established by DRRA Section 1224, requires the FEMA Administrator to publish on the FEMA website award information for grants awarded under Stafford Act Section 406âRepair, Restoration, and Replacement of Damaged Facilities in excess of $1,000,000. For each such grant, FEMA shall provide the following information: FEMA region; declaration number; whether the grantee is a private nonprofit organization; damage category code; amount of the federal share obligated; and the date of the award. Prior to DRRA's enactment, FEMA did not publish contract information on the FEMA website. Stafford Act Section 430(d) requires the FEMA Administrator to publish information about each contract executed by FEMA in excess of $1,000,000 on the FEMA website within the first 10 days of each month. For each such contract, FEMA shall provide the following information: contractor name; date of contract award; amount and scope of the contract; whether the contract was competitively bid; whether and why there was a no competitive bid; the authority used to bypass competitive bidding if applicable; declaration number; and the damage category code. Section 430(d) also requires the FEMA Administrator to provide a report to the appropriate congressional committees on the number of contracts awarded without competition, reasons why there was no competitive bidding process, total amount of the no-competition contracts, and the applicable damage category codes for such contracts. Section 430(e) requires the FEMA Administrator to initiate efforts to maintain and store information on contracts entered into by a Public Assistance recipient or subrecipient of funding through Stafford Act Sections 324âManagement Costs, 403âEssential Assistance, 404âHazard Mitigation, 406âRepair, Restoration, and Replacement of Damaged Facilities, 407âDebris Removal, 428âPublic Assistance Program Alternative Procedures, and 502âFederal Emergency Assistance for contracts with an estimated value of more than $1,000,000. Collected contract information shall include the following: disaster number; project worksheet number; category of work; name of contractor; date of the contract award; amount of the contract; scope of the contract; period of performance for the contract; and whether the contract was awarded through a competitive bid process. The FEMA Administrator is required to make such collected information available to the DHS IG, the Government Accountability Office (GAO), and appropriate congressional committees upon request. The FEMA Administrator is also required to submit a report to relevant committees within 365 days of DRRA's enactment on the efforts of FEMA to collect the required contract information (i.e., by October 5, 2019). Prior to DRRA's enactment, FEMA did not appear to have comprehensive contract information to make available upon request and did not submit annual reports to Congress regarding collection of such information. Section 1221: Closeout Incentives178 DRRA Section 1221 amends Stafford Act Section 705âDisaster Grant Closeout Procedures to authorize the FEMA Administrator to develop incentives and penalties relating to grant closeout activities to encourage grantees to close out disaster-related expenditures on a timely basis. DRRA Section 1221 also requires the FEMA Administrator to improve closeout practices and reduce the time between awarding a grant under Stafford Act provisions and closing out expenditures for the award. The FEMA Administrator is also directed to issue regulations relating to facilitating grant closeout. Prior to DRRA's enactment, FEMA had discretion to engage in activities that would incentivize or penalize grantees for delayed closeouts. This provision made such activities a requirement rather than at FEMA's discretion. Congress designed Section 1221 to improve the timeliness of closeout procedures by limiting or preventing delays in the process. Section 1225: Audit of Contracts180 DRRA Section 1225 prohibits the FEMA Administrator from reimbursing grantees for any activities made pursuant to a contract entered into after August 1, 2017, that prohibits the FEMA Administrator or the Comptroller General of the United States from auditing or reviewing all aspects relating to the contract. Section 1237: Certain Recoupment Prohibited182 DRRA Section 1237 directs FEMA to "deem any covered disaster assistance to have been properly procured, provided, and utilized, and shall restore any funding of covered disaster assistance previously provided but subsequently withdrawn or deobligated." "Covered disaster assistance" is defined as assistance provided to a local government under Stafford Act Sections 403âEssential Assistance, 406âRepair, Restoration, and Replacement of Damaged Facilities, or 407âDebris Removal in which the DHS IG has made a determination, through an audit, that the following conditions were present: (A) the Agency deployed to the local government a Technical Assistance Contractor to review field operations, provide eligibility advice, and assist with day-to-day decisions; (B) the Technical Assistance Contractor provided inaccurate information to the local government; and (C) the local government relied on the inaccurate information to determine that relevant contracts were eligible, reasonable, and reimbursable. Section 1210: Duplication of Benefits185 DRRA Section 1210 amends Stafford Act Section 312(b) by providing the President the authority to waive the prohibition on duplication of benefits (upon a gubernatorial request) if the "waiver is in the public interest and will not result in waste, fraud, or abuse." When making the waiver decision, the President may consider (1) recommendations from the Administrator of FEMA or other agencies administering the duplicative program; (2) if granted, whether the assistance is cost effective; (3) "equity and good conscience"; and (4) "other matters of public policy considered appropriate by the President." Duplication of benefits has been an ongoing issue of congressional concern and DRRA Section 1210 is the most recent attempt to reduce hardships caused by duplication of benefits recoupment. Individuals and households often need to use multiple sources of assistance to fully recover from a major disaster. If the assistance exceeds their unmet disaster needs, then the assistance is considered a "duplication of benefits." Stafford Act Section 312(a)âDuplication of Benefits prohibits the "financial assistance to persons, business concerns, or other entities suffering losses as a result of a major disaster or emergency ... [for] which he has received financial assistance under any other program or from insurance or any other source." Stafford Act Section 312(c) states that the recipient of duplicative assistance is liable to the United States and that the agency that provided the duplicative assistance is responsible for debt collection. The federal duplication of benefits policy is intended to prevent waste, fraud, and abuse of program assistance. 44 C.F.R. Â§206.191 provides procedural guidance known as a "delivery sequence" to prevent the duplication of benefits between federal assistance programs such as FEMA's Individuals and Households Program and the Small Business Administration's (SBA's) Disaster Loan Program, state assistance programs, other assistance programs (e.g., volunteer programs), and insurance benefits (see Figure 1 ). An organization's position within the delivery sequence determines the order in which it should provide assistance and what other resources need to be considered before that assistance is provided. The regulation requires individuals to repay all duplicated assistance to the agency providing the assistance based on the delivery sequence hierarchy that outlines the order assistance should be provided. Critics have argued that the delivery sequence lacks specificity. For example, the U.S. Department of Housing and Urban Development's (HUD's) Community Development Block GrantâDisaster Recovery (CDBG-DR) Program, which is often duplicated with other assistance sources, is not listed in the delivery sequence. However, in addition to prohibiting duplication of benefits, Stafford Act Section 312 also stipulates that assistance cannot be withheld. Section 312(b)(1) states: this section shall not prohibit the provision of federal assistance to a person who is or may be entitled to receive benefits for the same purposes from another source if such person has not received such other benefits by the time of application for federal assistance and if such person agrees to repay all duplicative assistance to the agency providing the federal assistance. The delivery sequence, therefore, is not rigidâit can be broken in certain cases. The most common example is when adhering to the delivery sequence prevents the timely receipt of essential assistance. In some cases, assistance can be provided more quickly by an organization or agency that is lower in the sequence than an agency or organization that is at a higher level. For example, SBA disaster loans can generally be processed more quickly than FEMA grants; CDBG-DR grants take longer still because CDBG-DR disaster funding generally requires Congress to pass an appropriation. Once appropriated, the funding is usually released to the state in the form of a block grant, which is then disbursed by the state to disaster survivors. The underlying rationale for providing assistance when it becomes immediately available instead of rigidly adhering to the delivery sequence is to make sure disaster survivors receive aid as quickly as possible. Advocates of this view argue that preventing duplication of benefits is of secondary importanceâit can be rectified and recouped later. This practice, however, has led to problems, particularly for individuals and households. In some cases, the federal government may fail to identify the duplication. In others cases, it may take a prolonged period of time to identify the duplication and the recoupment notification that they owe money to the federal government may come as a surprise to disaster survivors who did not realize they exceeded their allowable assistance. In some cases they may have spent all of the assistance on recovery, and repaying duplicative assistance constitutes a financial burden to the disaster survivor. One of the most significant changes instituted by DRRA Section 1210 is that it prohibits the President from determining loans as duplicative assistance provided all federal assistance is used toward loss resulting from an emergency or major disaster under the Stafford Act. This arguably removes SBA disaster loans from the delivery sequence. However, the rulemaking on this policy has not been issued. Thus, it remains to be seen how this provision of DRRA will be implemented. Finally, DRRA Section 1210(a)(5) requires the FEMA Administrator, in coordination with relevant federal agencies, to provide a report with recommendations to improve "the comprehensive delivery of disaster assistance to individuals following a major disaster or emergency declaration." The report must include (1) actions planned or taken by the agencies as well as legislative proposals to improve coordination between agencies with respect to delivering disaster assistance; (2) a clarification of the delivery sequence; (3) a clarification of federal-wide interpretation of Stafford Act Section 312 when providing assistance to individuals and households; and (4) recommendations to improve communication to disaster assistance applicants, including the breadth of programs available and the potential impacts of utilizing one program versus another. Section 1239: Cost of Assistance Estimates; Section 1232: Local Impact192 DRRA Section 1239âCost of Assistance Estimates and Section 1232âLocal Impact both require FEMA to review and initiate a rulemaking to update the factors considered when evaluating a governor's request for a major disaster declaration, including how FEMA estimates the cost of major disaster assistance. They also require FEMA to consider anything that may affect a local jurisdiction's capacity to respond to a disaster. Section 1232 in particular requires FEMA to give greater consideration to severe local impact or recent multiple disasters. Both sections address the way FEMA has made major disaster recommendations to Presidents. FEMA uses factors about the severity of the incident (including how the state was affected by the incident) to assess the state's need for federal assistance. The estimated cost of assistance (also known as the per capita threshold) has been a key factor used by FEMA to evaluate the disaster's severity and to determine if the state has the capacity to handle the disaster without federal assistance. Two thresholds are used for estimated cost of assistance: (1) $1 million in public infrastructure damages and (2) a formula based on the state's population (according to the most recent census data) and public infrastructure damages. Based on these thresholds, FEMA has generally recommended that a major disaster be declared if public infrastructure damages exceed $1 million and meet or exceed $1.50 per capita. The underlying rationale for using a per capita threshold is that state fiscal capacity should be sufficient to deal with the disaster if damages and costs fall under the per capita amount. However, concerns related to relying on the per capita threshold include that: the per capita threshold may be difficult to reach for some states. For example, a rural area in a highly populated state may be denied federal disaster assistance because damages and costs do not exceed the per capita threshold; these incidents still warrant federal assistance because they overwhelm local response and recovery capacity in spite of not exceeding the statewide threshold; and the application of the per capita threshold is inequitable because the same incident may affect multiple states but only result in a major disaster declaration for some states by virtue of differences in state population. Pursuant to DRRA Section 1239, within two years of DRRA's enactment (i.e., by October 5, 2020), FEMA is required to initiate a rulemaking to update the factors considered when evaluating a governor's request for a major disaster declaration, including how the cost of assistance is estimated, as well as other impacts on the jurisdiction's response capacity. As part of the review and rulemaking, FEMA may consider whether the per capita threshold is an appropriate mechanism for evaluating capacity, and additional information, such as the results of the 2020 U.S. Census, may factor into the final rule. DRRA Section 1232 also requires FEMA to adjust agency policy and regulations to grant greater consideration to severe local impact or recent multiple disasters, which may enable jurisdictions that struggle to reach the per capita threshold to provide evidence supporting the request for a major disaster declaration as no single factor is dispositive and the determination to grant a request for a major disaster is at the President's discretion. FEMA currently uses nine factors to evaluate a state or territory's request for a major disaster declaration (see Table 2 ). To some, these factors entail a more nuanced evaluation of major disaster requests by assessing both damages and state and local resources. However, it appears that the per capita threshold is still being applied to determine the "amount and type of damages caused by the incident." If that is the case, per capita damages may still figure more prominently than other factorsâsuch as local impactsâwhen making major disaster declaration recommendations to the President. Section 1219: Right of Arbitration196 DRRA Section 1219 amends Stafford Act Section 423âAppeals of Assistance Decisions to add a right of arbitration. Per Stafford Act Section 423, applicants for assistance have the right to appeal decisions regarding "eligibility for, from, or amount of assistance" within 60 days after receiving notification of award or denial of award. FEMA then has to render a decision within 90 days of receiving a notice of appeal. Prior to DRRA, the appeal process outlined in the Stafford Act only provided a way for FEMA to review its own decisions, and did not include a way for applicants to bring claims before an independent arbiter. The need for arbitration, however, was recognized by Congress following Hurricanes Katrina and Rita, which made landfall in 2005, due to disputes that arose from public assistance payments under Stafford Act Sections 403âEssential Assistance, 406âRepair, Restoration, and Replacement of Damaged Facilities, and 407âDebris Removal. Post-Hurricanes Katrina and Rita, the arbitration process was established pursuant to the authority granted under Section 601 of the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 ). Notwithstanding any other provision of law, the President shall establish an arbitration panel under the Federal Emergency Management Agency public assistance program to expedite the recovery efforts from Hurricanes Katrina and Rita within the Gulf Coast Region. The arbitration panel shall have sufficient authority regarding the award or denial of disputed public assistance applications for covered hurricane damage under section 403, 406, or 407 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170b, 5172, or 5173) for a project the total amount of which is more than $500,000. FEMA's public assistance appeal process remains in effect following DRRA's enactment. In addition, post-DRRA a right of arbitration has been added to Stafford Act Section 423 under the authority granted under ARRA Section 601. Applicants, which are states in the context of this section, may request arbitration in order to "dispute the eligibility for assistance or repayment of assistance provided for a dispute of more than $500,000 for any disaster that occurred after January 1, 2016." (Applicants in rural areas are eligible to pursue arbitration if the amount of assistance is $100,000. ) FEMA's Public Assistance Appeals and Arbitration Under the Disaster Recovery Reform Act fact sheet notes that applicants may file a second appeal or request arbitration pursuant to Section 423(d) either (1) within 60 days after receipt of the first appeal decision (if the decision is not appealed or arbitration is not requested, then the first level appeal decision becomes the final agency determination and the applicant no longer has a right to appeal or arbitrate); or (2) at any time after 180 days of filing a first level appeal if the applicant has not received a decision from the agencyâin which case they may withdraw the first level appeal and request Section 423 arbitration. In the event an applicant requests arbitration, the Civilian Board of Contract Appeals (CBCA) will conduct the arbitration, and their decision shall be binding. FEMA has stated that the Agency intends to "initiate rulemaking to implement Section 423 arbitration and revise 44 C.F.R. Â§206.206," including amending regulations that provide for only a first and second level appeal process. In the interim, FEMA has stated that it will rely on the Public Assistance Appeals and Arbitration Under the Disaster Recovery Reform Act fact sheet and the CBCA's Interim Fact Sheet . The CBCA published proposed rules of procedure to implement Section 423 arbitration in the Federal Register on March 5, 2019. Additionally, while new regulations are being promulgated, FEMA will provide information on how applicants may request either a second level appeal or arbitration when FEMA provides first level appeal denials for disputes arising from declarations for disasters occurring after January 1, 2016. There is disagreement regarding whether the arbitration process expedites dispute resolution. The House Transportation and Infrastructure Committee's DRRA Report states that the CBCA panel provides a faster resolution, citing that arbitration was used as a tool for resolving disputes following both Hurricanes Katrina and Sandy to facilitate recovery. FEMA, however, in an earlier version of its Public Assistance Arbitration fact sheet stated that the arbitration process often takes years to arrive at a resolution. This may be, in part, because of the process requiredâsome steps may take multiple weeks or months to completeâwhich includes: a first level appeal; the applicant opting into arbitration; submission of responses; the selection of the arbitration panel; the preliminary conference; the hearing and any follow-up; and the panel's rendering of the final decision. The length of the arbitration process may depend on the complexity of the disputed project and its associated costs for which the applicant is seeking an award of assistance. Additionally, the arbitration process may be costly as there are fees associated with the panel, experts, attorney's fees, and other fees, which are the responsibility of the parties, including both the applicant and FEMA. According to the Senate HSGAC's DRRA Report , the Congressional Budget Office (CBO) estimates that "implementing this provision would cost $4 million over the 2019-2023 period" based on information provided by FEMA on the expected number of arbitration requests. It is unclear, however, whether the evaluation of the cost of implementing this provision included considerations such as the individual cost of the project being arbitrated, the complexity of the project, and the nature of the dispute. Congress may consider tasking the Comptroller General of the United States with conducting a review of the arbitration process to evaluate its effectiveness, including whether arbitration expedites the disaster recovery process and if it is cost effective. Congress may also consider ways to improve the process's efficiency and effectiveness, if warranted based on the results of any such program evaluation. Section 1218: National Veterinary Emergency Teams219 DRRA Section 1218 authorizes, but does not require, that the FEMA Administrator establish one or more national veterinary emergency teams at accredited colleges of veterinary medicine. Such a team(s) shall (1) deploy with Urban Search and Rescue (US&R) response teams to care for canine search teams, companion animals, service animals, livestock, and other animals; (2) recruit, train, and certify veterinary professionals, including veterinary students, regarding emergency response; (3) assist state governments, Indian tribal governments, local governments, and nonprofit organizations in emergency planning for animal rescue and care; and (4) coordinate with other federal, state, local, and Indian tribal governments, veterinary and health care professionals, and volunteers. Veterinary professionals serve in several emergency support capacitiesâaiding in agriculture emergencies by controlling diseases in domestic animals; protecting natural resources by addressing wildlife health impacts; assisting with various emergency public health efforts, such as assuring food safety; and furnishing care to working animals such as search and rescue canines and service animals. Several pre-existing authorities address veterinary support in emergencies in different contexts. The Stafford Act does not specifically mention veterinary services. However, among the work and services authorized for essential assistance is "provision of rescue, care, shelter, and essential needsâ(i) to individuals with household pets and service animals; and (ii) to such pets and animals," which could include veterinary services. In addition, the Stafford Act requires state and local recipients of emergency preparedness planning grants to address the needs of individuals with household pets and service animals in their emergency preparedness plans. The federal department principally responsible for coordinating veterinary support in emergencies often depends upon the principal work performed, in particular whether it involves public health or animal health. Authority for the National Disaster Medical System (NDMS), an operational emergency response asset of the U.S. Department of Health and Human Services (HHS), does not expressly list which health professionals shall constitute NDMS teams. Rather, it states that the system is intended to "provide health services, health-related social services, other appropriate human services, and appropriate auxiliary services to respond to the needs of victims of a public health emergencyâ¦." NDMS currently supports veterinary response teams. Another HHS asset, the Commissioned Corps of the U.S. Public Health Service (USPHS), supports a veterinary professional category. The U.S. Department of Agriculture (USDA) Animal and Plant Health Inspection Service (APHIS) maintains capacity to respond to animal health emergencies affecting domestic livestock and poultry. Section 1229: Extension of Assistance226 DRRA Section 1229 retroactively extended Disaster Unemployment Assistance (DUA). When the President declares a major disaster, individuals who would typically be ineligible for Unemployment Compensation (UC) may be eligible for DUA. After the disaster declaration, the DUA benefits are available to eligible individuals as long as the major disaster continues, for a period of up to 26 weeks. In some cases, UC beneficiaries who had an entitlement to UC benefits of fewer than 26 weeks and who became unemployed as a direct result of a disaster and exhausted their weeks of UC entitlement may be entitled to some DUA benefits. No more than a total of 26 weeks of total benefits (UC plus DUA) are allowable in this situation. The maximum number of available weeks of DUA has been temporarily extended three times, most recently by DRRA. DRRA Section 1229 retroactively extended DUA for an additional 26 weeks for persons who were unemployed in Puerto Rico and the U.S. Virgin Islands as a direct result of the 2017 Hurricane Irma or Hurricane Maria disasters. (This created a total potential entitlement to DUA of up to 52 weeks for some individuals.) Because the disasters had both been declared more than 52 weeks before DRRA's enactment, the remaining DUA weeks will be paid retroactively. Individuals who worked in these areas and exhausted entitlement to UC may be eligible for DUA benefits for any remaining uncompensated weeks, up to 52 weeks total (UC plus DUA). Section 1226: Inspector General Audit of FEMA Contracts for Tarps and Plastic Sheeting233 DRRA Section 1226 requires the DHS IG to audit the contracts that FEMA awarded for tarps and plastic sheeting for the Commonwealth of Puerto Rico and the U.S. Virgin Islands in response to Hurricanes Irma and Maria. Specifically, the DHS IG must review FEMA's contracting process for evaluating offerors and awarding contracts for tarps and plastic sheeting; FEMA's assessment of contractor past performance; FEMA's assessment of the contractors' capacity to carry out the contracts; how FEMA ensured contractors met the terms of the contracts; and whether the failure of contractors to meet the terms of the contracts, and FEMA's cancellation of the contracts affected the provision of tarps and plastic sheeting. In addition, the DHS IG must submit a report containing the audit's findings and recommendations to the House Transportation and Infrastructure Committee and Senate HSGAC no later than 270 days after the audit is initiated. According to the 2017 Hurricane Season FEMA After-Action Report , during Hurricanes Harvey and Irma response operations, FEMA exhausted its pre-negotiated contractsâincluding contracts to provide tarps. To meet the need for tarps in response to Hurricane Maria, FEMA awarded new contracts, reportedly awarding contracts to "entities that were assessed as technically acceptable and committed to meeting the requirements, in accordance with the provisions of the Federal Acquisition Regulation." FEMA stated that, overall, it "executed a successful acquisitions process, with the Agency canceling just three contracts." Included in the cancelled contracts were contracts for tarps and plastic sheeting. FEMA went on to state that, "[t]hese cancellations did not hinder FEMA's ability to deliver on its mission." However, FEMA later acknowledged that the issues with the contracts delayed the delivery of plastic tarps to Puerto Rico. The DHS IG audit requirement included in DRRA may have arisen from congressional concerns regarding FEMA's management of contracts for tarps and plastic sheeting during its 2017 hurricane season response operations. For example, a 2018 report issued by the minority staff of Senate HSGAC concluded that FEMA's acquisition strategy and process, including the use of pre-negotiated, advance contracts during the 2017 hurricane season, was not successful. The Senate HSGAC minority staff report identified several deficiencies in FEMA's contracting process, including that: FEMA did not adequately use prepositioned contracts and awarded new contracts before using prepositioned contracts; FEMA awarded contracts without adequate vetting, including $73 million for tarps and plastic sheeting to two contractors with no relevant past performance, and these contracts were cancelled due to the companies' failure to deliver; and FEMA's bid process did not ensure adequate competition, in part due to limited notice provided to prospective vendors and short timeframes for proposal submission. According to the Senate HSGAC minority staff report, the two contracts for tarps and plastic sheeting that were cancelled were intended to provide a total of 1.1 million tarps and 60 thousand rolls of plastic sheeting. The report also identified additional issues that delayed the delivery of tarps and plastic sheeting, such as other companies that were awarded contracts for tarps and plastic sheeting struggling to meet delivery timeframes, and other logistical issues, such as FEMA's exhausted inventory of commodities following Hurricanes Harvey and Irma, commodity delivery challenges (e.g., delivery truck and driver shortages), and shortages of contractors to perform repairs. The Chairman of the Senate Budget Committee, Senator Mike Enzi, also questioned how FEMA identified, vetted, and awarded contracts following Hurricane Maria, stating "[i]t appears that FEMA has not properly vetted some of the companies that receive contracts and therefore may have wasted millions of taxpayer dollars, while simultaneously denying services to citizens in need of them." Following Hurricane Katrina and the passage of the Post-Katrina Emergency Management Reform Act of 2006 ( P.L. 109-295 ), FEMA worked to maximize the use of advance contracts for goods and services; however, in a 2015 report, the GAO found deficiencies with FEMA's contracting guidance. This remains an issue; in the GAO's assessment of FEMA's 2017 advance contracting, it recommended that FEMA, among other things update its strategy for advance contracting, including defining objectives and how advance contracts should be prioritized in relation to new post-disaster contract awards; update the Disaster Contracting Desk Guide to include guidance for using advance contracts prior to making new post-disaster contract awards, and provide semi-annual training to contracting officers on said guidance; and update and implement existing guidance to identify acquisition planning timeframes and considerations. The GAO also stated that "an outdated strategy and lack of guidance to contracting officers resulted in confusion about whether and how to prioritize and use advance contracts to quickly mobilize resources in response to the three 2017 hurricanes.... " In May 2019, the DHS IG released a report concluding that FEMA should not have awarded two contracts to Bronze Star LLCâone for tarps and one for plastic sheeting. FEMA cancelled both contracts due to nondelivery. The findings of this audit, which are included in the DHS IG's report, FEMA Should Not Have Awarded Two Contracts to Bronze Star LLC , and accompanied by recommendations, may contribute to the audit and report requirements included in DRRA Section 1226. Depending on the DHS IG's findings, Congress may require FEMA to update its contracting strategy, as well as its policies and procedures related to prepositioning supplies and quickly ramping up procurement operations (i.e., using advance contracts and executing new contracts for commodities and services). FEMA's acquisition personnel may also benefit from additional guidance and training regarding advance contracting, including how to determine whether potential contractors have the capacity to successfully perform the requirements of the contract. Concluding Observations DRRA amends many sections of the Stafford Act, and establishes numerous reporting and rulemaking requirements. The implementation of DRRA includes "more than 50 provisions that require FEMA policy or regulation changes...." Thus, it could be argued that much of DRRA's implementation is at FEMA's discretion. Although FEMA is working on DRRA implementation, it is unclear at this time how FEMA will address many of DRRA's requirements and recommendations. Congress may oversee the implementation of DRRA through hearings or other inquiries to ensure that the post-DRRA changes to disaster assistance programs and policies fulfill congressional intent and the interests of Congress. Congress may also review the effectiveness and impacts of FEMA's DRRA-related regulations and policy guidance, including assessing the effects of DRRA-related changes to federal assistance for past and future disasters. Appendix A. Tables of Deadlines Associated with the Implementation Actions and Requirements of the Disaster Recovery Reform Act of 2018 In addition to numerous amendments to the Stafford Act, DRRA includes standalone authorities. DRRA requires reports to Congress, rulemaking/regulatory actions, and other actions to support disaster preparedness, and increase transparency and accountability with regard to FEMA. The following three tables of deadlines are associated with DRRA's reporting, rulemaking/regulatory, and other implementation actions and requirements: Table A-1 . DRRA Reporting Requirements (i.e., reports to Congress); Table A-2 . DRRA Rulemaking and Regulations Requirements; and Table A-3 . DRRA Guidance and Other Required Actions. The tables are organized by deadline for implementation in chronological order, and include: the relevant DRRA Section; referenced Stafford Act Section(s), if applicable; a brief description of the requirement; the entity responsible for accomplishing the requirement; the recipient of the information/action; the due date described in DRRA; and the deadline expressed as a calendar date. Some sections of DRRA include multiple implementation actions and requirements and, as such, are included in multiple tables and may appear multiple times. Additionally, some sections of DRRA do not specify the date by which the implementation action or requirement must be completed. For these sections, the due date and calendar deadline are listed as "N/A." Some sections of DRRA include requirements for ongoing actions (e.g., monthly reporting requirements). For these sections, the deadline is listed as "ongoing." Acronyms used in the tables are defined in the associated notes sections. Note that information included in the three tables of deadlines associated with DRRA implementation may be subject to change, and the following tables may not be up-to-date following the publication of this report. Appendix B. Acronym Table The following acronyms for entities, programs, and legislation are used throughout this report: Appendix C. Brief Legislative History DRRA includes provisions taken from numerous bills aimed at reforming aspects of FEMA. Some of these bills and the provisions incorporated into DRRA include: Disaster Recovery Reform Act ( H.R. 4460 , introduced) included many provisions duplicated or incorporated into DRRA with modifications; Disaster Recovery Reform Act of 2018 ( S. 3041 , introduced) included many provisions duplicated or incorporated into DRRA with modifications; Disaster Assistance Fairness and Accountability Act of 2017 ( H.R. 3176 , introduced) included the provision prohibiting the recoupment of certain assistance (incorporated into DRRA as Section 1216(b)âFlexibility); To amend the Robert T. Stafford Disaster Relief and Emergency Assistance Act concerning the statute of limitations for actions to recover disaster or emergency assistance payments, and for other purposes ( H.R. 1678 , passed House) amended the Stafford Act such that no administrative action to recover payments may be initiated after the date that is three years after the date of transmission of the final expenditure report for project completion as certified by the grantee (incorporated into DRRA as Section 1216(c)âFlexibility); Disaster Assistance Support for Communities and Homeowners Act of 2017 ( H.R. 1684 , passed House) included the provision requiring FEMA to provide technical assistance to a common interest community that provides essential services of a governmental nature on actions they may take to be eligible for reimbursement (incorporated into DRRA as Section 1230âGuidance and Recommendations); Community Empowerment for Mitigated Properties Act of 2017 ( H.R. 1735 , introduced) included a provision for the acquisition of property for open space as a mitigation measure (incorporated into DRRA as Section 1231âGuidance on Hazard Mitigation Assistance); Disaster Declaration Improvement Act ( H.R. 1665 , passed House) included the provision that the FEMA Administrator shall give greater weight and consideration to severe local impact or recent multiple disasters when recommending a major disaster declaration (incorporated into DRRA as Section 1232âLocal Impact); Pacific Northwest Earthquake Preparedness Act of 2017 ( H.R. 654 , passed House) included a provision on the use of mitigation assistance to reduce the risk and impacts of earthquake hazards (incorporated into DRRA as Section 1233âAdditional Hazard Mitigation Activities); Supporting Mitigation Activities and Resiliency Targets for Rebuilding Act, or SMART Rebuilding Act ( H.R. 4455 , introduced) included a provision on the National Public Infrastructure Pre-Disaster Hazard Mitigation Fund; however, it differed from DRRA Section 1234âNational Public Infrastructure Pre-Disaster Hazard Mitigation in that the SMART Rebuilding Act established the fund as a separate account, but DRRA allows for a set-aside from the Disaster Relief Fund. It also includes a provision allowing the President to contribute up to 75% of the cost of hazard mitigation measures determined to be cost effective and which substantially reduce risk or increase resilience (incorporated into DRRA as Section 1235âAdditional Mitigation Activities). Summary:	null	96	104,200	104,202	104,202	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Numerous natural disastersâincluding the 2017 hurricane season and devastating wildfires in Californiaâserved as catalysts for significant recent changes in federal emergency management policy. Most of these policy changes were included in the Disaster Recovery Reform Act of 2018 (DRRA), which was included as Division D of the FAA Reauthorization Act of 2018 ( P.L. 115-254 ). DRRA is the most comprehensive reform of the Federal Emergency Management Agency's (FEMA's) disaster assistance programs since the passage of the Sandy Recovery Improvement Act of 2013 (SRIA, Division B of P.L. 113-2 ) and the Post-Katrina Emergency Management Reform Act of 2006 (PKEMRA, P.L. 109-295 ). As with past disaster legislation, lessons learned following recent disasters revealed areas that could be improved through legislative and programmatic changes, including the need for increased preparedness and pre-disaster mitigation. The legislative intent of DRRA includes improving disaster preparedness, response, recovery, and mitigation, including pre-disaster mitigation; clarifying assistance program eligibility, processes, and limitations, including on the recoupment of funding; and increasing FEMA's transparency and accountability. Thus, DRRA amends many sections of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act, P.L. 93-288 , as amended; 42 U.S.C. Â§Â§5121 et seq.), which provides the authority for the President to issue declarations of emergency and major disasters, and provides a range of federal assistance to local, state, territorial, and Indian tribal governments, as well as certain private nonprofit organizations, and individuals and families. In addition to numerous amendments to the Stafford Act, DRRA includes new standalone authorities, and requires reports to Congress, rulemaking, and other actions. This report is structured to first provide a tabular overview of the major changes that DDRA made to the Stafford Act (see Table 1 ). The report then provides detailed explanations of the programmatic and procedural modifications to various disaster assistance programs under DRRA. These DRRA modifications are grouped in the following sections: preparedness; mitigation; public assistance; individual assistance; flood plain management and flood insurance; and other provisions. In addition to a description of DRRA's changes to programs, each section includes potential policy considerations for Congress. Appendix A includes the following tables of deadlines associated with DRRA's reporting, rulemaking/regulatory, and other implementation actions and requirements: Table A-1 , DRRA Reporting Requirements (i.e., reports to Congress); Table A-2 , DRRA Rulemaking and Regulations Requirements; and Table A-3 , DRRA Guidance and Other Required Actions. A table of common acronyms used throughout this report is also included in Table B-1 of Appendix B . Finally, a brief legislative history of DRRA is included in Appendix C . Preparedness5 Section 1208: Prioritization of Facilities DRRA Section 1208 requires the FEMA Administrator to provide guidance and annual training to state, local, and Indian tribal governments; first responders; and utility companies on the need to prioritize assistance to hospitals, nursing homes, and other long-term health facilities to ensure they remain functioning, or return to functioning as soon as possible, during power outages related to natural hazards and severe weather; how these medical facilities should prepare for power outages related to natural hazards and severe weather; and how local, state, territorial, and Indian tribal governments; first responders; utility companies; and these medical facilities should develop a strategy to coordinate and implement emergency response plans. Recent hurricanes have caused power outages affecting millions of individuals, including those in medical care facilities. For example, following Hurricane Harvey, 200,000 people lost power in south-east Texas. Additionally, in Florida, after Hurricane Irma made landfall, 4 million people lost power and failed air conditioning at a nursing home led to 11 deaths. DRRA Section 1208 may result in medical care facilities being better prepared for power outages and help mitigate the damage (and potential deaths) associated with power outages. Section 1209: Guidance on Evacuation Routes DRRA Section 1209 requires the FEMA Administrator, in coordination with the Administrator of the Federal Highway Administration (FHWA), to develop and issue guidance for state, local, and Indian tribal governments in identifying evacuation routes. Specifically, the FEMA Administrator is to revise existing guidance, or issue new guidance, on these evacuation routes. The FEMA Administrator, in developing this guidance, is to consider whether these evacuation routes have resisted disaster impacts and recovered quickly from disasters; the need to evacuate special needs populations; information sharing and public communications with evacuees; sheltering evacuees, including the care, protection, and sheltering of their animals; the return of evacuees to their homes; other issues or items the Administrator considers appropriate; methods that assist evacuation route planning and implementation; the ability of the evacuation routes to manage contraflow operations; the input of federal land management agencies where evacuation routes may cross or go through public land; and such other issues or items the FHWA Administrator considers appropriate. Section 1209 also states that the FEMA Administrator may, in coordination with the FHWA Administrator and local, state, territorial, and Indian tribal governments, conduct a study of the adequacy of available evacuation routes, and submit recommendations on how to assist with anticipated evacuation flow. Currently, FHWA uses various tools and technology for hurricane modeling, information sharing, and transportation (evacuation) modeling and analysis. DRRA Section 1209 codifies practices that FEMA and FHWA currently employ to address evacuation route planning and implementation of evacuations. Section 1236: Guidance and Training by FEMA on Coordination of Emergency Response Plans DRRA Section 1236 requires the FEMA Administrator, in coordination with other relevant agencies, to provide annual guidance and training on coordination of emergency response plans to local, state, territorial, and Indian tribal governments; first responders; and hazardous material storage facilities. Specifically, the annual guidance and training shall include: a list of required equipment for a release of hazardous substances and material; an outline of health risks associated with exposure to hazardous substances and materials; and published best practices for mitigating damage, and danger, to communities from hazardous materials. This required annual guidance and training is to be implemented not later than 180 days after DRRA's enactment (i.e., by April 3, 2019). Prior to DRRA and presently, the U.S. Department of Homeland Security (DHS) provides hazardous materials information from myriad sources, such as universities and other local and federal agencies. The available information includes procedures and resources for responding to different types of hazardous material releases, independent study training courses, and several resources related to medical management for chemical exposures, but the information is broadly distributed and may not be quickly accessible when responding to a hazardous materials incident. DRRA Section 1236 adds not only the plan coordination training requirement, but also requires the development of resources that may streamline information that can be incorporated into emergency response plans, such as the list of required equipment and health risks. Mitigation Section 1234: National Public Infrastructure Pre-Disaster Hazard Mitigation14 DRRA Section 1234 authorizes the National Public Infrastructure Pre-Disaster Mitigation Fund (NPIPDM), which allows the President to set aside 6% from the Disaster Relief F und (DRF) with respect to each major disaster, establishes limitations on the receipt of pre-disaster hazard mitigation funding, and expands the criteria considered in awarding mitigation funds. Pre-Disaster Mitigation (PDM) funding is authorized by Stafford Act Section 203âPre-Disaster Hazard Mitigation, with the goal of reducing overall risk to the population and structures from future hazard events, while also reducing reliance on federal funding from future disasters. For FY2019, the PDM program is funded through the DRF . Pre-DRRA, the amount available for PDM was appropriated separately on an annual basis, and financial assistance was limited by the amount available in the National Pre-Disaster Mitigation Fund. FEMA awarded PDM grants competitively, and 56 states and jurisdictions, as well as federally-recognized Indian tribal governments, were eligible to apply. Local governments, including Indian tribes or authorized tribal organizations, were required to apply to their state/territory as subapplicants. In FY2018, each state, jurisdiction, and tribe was eligible for a baseline level of financial assistance in the amount of the lesser of 1% of appropriated funding, or $575,000, although additional funding could be awarded competitively. No applicant was eligible to receive more than 15% of the appropriated funding. In FY2018, FEMA set aside 10% of the appropriation for federally recognized tribes. FEMA sets priorities annually for the competitive PDM funding, with priority given to applicants that have little or no disaster funding available through the Hazard Mitigation Grant Program (HMGP). In FY2018, FEMA awarded $235.2 million in PDM funding . DRRA authorizes the NPIPDM, for which the President may set aside from the DRF, with respect to each major disaster, an amount equal to 6% of the estimated aggregate amount of the grants to be made pursuant to the following sections of the Stafford Act: Section 403âEssential Assistance; Section 406âRepair, Restoration, and Replacement of Damaged Facilities; Section 407âDebris Removal; Section 408âFederal Assistance to Individuals and Households; Section 410âUnemployment Assistance; Section 416âCrisis Counseling Assistance and Training; and Section 428âPublic Assistance Program Alternative Procedures. The amount set aside for PDM shall not reduce the amounts otherwise available under the sections above. Funding from the NPIPDM may be used to provide technical and financial mitigation assistance pursuant to each major disaster. An additional clause in DRRA provides that NPIPDM funds may be used "to establish and carry out enforcement activities and implement the latest published editions of relevant consensus-based codes, specifications, and standards that incorporate the latest hazard-resistant designs and establish minimum acceptable criteria for the design, construction, and maintenance of residential structures and facilities that may be eligible for assistance under this Act.... " The changes to PDM funding in DRRA may increase the focus on funding public infrastructure projects that improve community resilience before a disaster occurs, though FEMA has the discretion to shape the program in many ways. There is potential for significantly increased funding post-DRRA through the new transfer from the DRF, but it is not yet clear how FEMA will implement this new program. In the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) , Congress made $250 million available for PDM for FY2019, which may be merged with funds for the NPIPDM once it is fully implemented. The FY2019 PDM program will be the last PDM cycle before the rollout of the new DRRA Building Resilient Infrastructure and Communities (BRIC) Program. FEMA has authority to operate the legacy PDM program for FY2019, after which BRIC will replace the current PDM program. Funding not used in FY2019 will remain for the first year of BRIC, which will likely begin in FY2020. PDM projects already in progress will continue through closeout under the current PDM guidance. Any unobligated PDM funds may be rolled into a "carryover PDM" funding account which could be used for obligations of PDM projects underway when BRIC is implemented. Once BRIC is fully implemented, legacy PDM funds may be merged with BRIC funds, which may then be used for both PDM and BRIC work. FEMA is in the process of determining how funds under the 6% set-aside will be allocated to local, state, territorial, and Indian tribal governments. FEMA expects that BRIC will be funded entirely by the 6% set-aside; however, nothing prohibits Congress from appropriating additional funds for the program. FEMA anticipates setting aside the full 6% estimate from each major disaster declaration within 180 days after declaration. Based on the recent funding trends of the DRF, FEMA assumes that it would be a rare circumstance in which there is no set-aside. Other provisions in DRRA Section 1234 establish that mitigation funds under Stafford Act Section 203 would only be provided to states which had received a major disaster declaration in the past seven years, or any Indian tribal governments located partially or entirely within the boundaries of such states. Other provisions would expand the criteria to be considered in awarding mitigation funds, including the extent to which the applicants have adopted hazard-resistant building codes and design standards, and the extent to which the funding would increase resiliency. Section 1235(a): Additional Mitigation Activities32 DRRA Section 1235(a) amends Stafford Act Section 404(a)âHazard Mitigation to include a provision authorizing the President to contribute up to 75% of the cost of hazard mitigation measures which the President has determined are cost effective and which increase resilience to future damage, hardship, loss, or suffering in any area affected by a major disaster. The pre-DRRA language only authorized funding for hazard mitigation measures which substantially reduce risk. DRRA does not include definitions of reducing risk or increasing resilience. However, DRRA Section 1235(d) requires FEMA to issue a rulemaking defining the terms resilient and resiliency , and although these definitions relate to Stafford Act Section 406âRepair, Restoration, and Replacement of Damaged Facilities, FEMA may consider using these definitions for mitigation activities as well. Section 1205: Additional Activities33 DRRA Section 1205 amends Stafford Act Section 404âHazard Mitigation by adding a section to allow recipients of hazard mitigation assistance provided under this section and Section 203âPre-Disaster Hazard Mitigation to use the funding to conduct activities to help reduce the risk of future damage, hardship, loss, or suffering in any area affected by a wildfire or windstorm. The section includes a nonexclusive list of wildfire and windstorm mitigation activities that are eligible for funding. These activities were eligible for funding pre-DRRA, but this section is intended to clarify eligible uses of funding under FEMA's hazard mitigation grant programs. Section 1217: Additional Disaster Assistance37 DRRA Section 1217 amends Section 209(c)(2) of the Public Works and Economic Development Act of 1965 such that, when assistance is given to communities whose economy has been injured by a major disaster or emergency and which have received a major disaster or emergency declaration under the Stafford Act, the Secretary of Commerce may encourage hazard mitigation if appropriate. The Public Works and Economic Development Act of 1965 did not have any previous mention of mitigation; however, this provision does not give the Secretary any additional tools by which to encourage hazard mitigation. Section 1204: Wildfire Mitigation39 Section 1204 of DRRA amends Stafford Act Sections 420âFire Management Assistance and 404(a)âHazard Mitigation to include HMGP for Fire Management Assistance Grant (FMAG) declarations. The Stafford Act authorizes three types of declarations that provide federal assistance to states and localities: (1) FMAG declarations, (2) emergency declarations, and (3) major disaster declarations. FMAGs provide federal assistance for fire suppression activities. Emergency declarations trigger aid that protects property, public health, and safety and lessens or averts the threat of an incident becoming a catastrophic event. A major disaster declaration constitutes the broadest authority for federal agencies to provide supplemental assistance to help state and local governments, families and individuals, and certain nonprofit organizations recover from the incident. Major disaster declarations also authorize statewide hazard mitigation grants to states and tribes through FEMA's HMGP. Authorized under Stafford Act Section 404âHazard Mitigation, HMGP can be used to fund mitigation projects to protect either private or public property, provided that the project fits within local, state, territorial, and Indian tribal government mitigation strategies to address risk and complies with HMGP guidelines. HMGP grant amounts are provided on a sliding scale based on the percentage of funds spent for Public and Individual Assistance for each presidentially-declared major disaster declaration. For states and federally-recognized tribes with a FEMA-approved Standard State or Tribal Mitigation Plan, the formula provides for up to 15% of the first $2 billion of estimated aggregate amounts of disaster assistance, up to 10% for amounts between $2 billion and $10 billion, and 7.5% for amounts between $10 billion and $35.333 billion. DRRA Section 1204 also requires the FEMA Administrator to submit a report one year after enactment and annually thereafter containing a summary of any mitigation projects carried out, and any funding provided to those projects, to the Senate Committee on Homeland Security and Governmental Affairs (HSGAC), the House Committee on Transportation and Infrastructure, and the House and Senate Committees on Appropriations. One potential issue of congressional concern is the cost implications of providing mitigation funding for FMAG declarations. All things being equal, making HMGP available for FMAGs will increase federal expenditures for HMGP because it expands the number of incidents eligible for HMGP. The additional costs, however, may not be significant compared to HMGP funding for major disaster declarations. As previously discussed, HMGP grants are based on the percentage of funds spent for Public and Individual Assistance. Though it is unclear how the HMGP formula will be applied to FMAG declarations, HMGP grant amounts would likely be less than what is typically provided for major disasters because funding for major disasters is significantly more than what is provided for FMAGs. For example, from FY2017 to FY2018, $12.3 million has been obligated for FMAG declarations. In contrast, $1.7 billion has been obligated for Hurricane Matthew. Furthermore, HMGP funding for FMAGs could be considered an investment because the projects they fund can help save recovery costs for future disasters. Section 1233: Additional Hazard Mitigation Activities46 DRRA Section 1233 authorizes recipients of hazard mitigation assistance to use the assistance to reduce the risk of earthquake damage, hardship, loss, or suffering for areas in the United States affected by earthquake hazards. DRRA Section 1233 addresses three areas of earthquake mitigation, all related to improving the capability for an earthquake early-warning system: improvements to regional seismic networks; improvements to geodetic networks; and improvements to seismometers, global positioning system (GPS) receivers, and associated infrastructure. The earthquake hazards and mitigation community long ago shifted away from an early focus on predicting earthquakes to mitigating earthquake hazards and reducing risk, and more recently to a focus on activities that would enhance the effectiveness of an earthquake early-warning system. An earthquake early-warning system would send a warning after an earthquake occurred but before the damaging seismic waves reach a community that would be affected by the earthquake-induced shaking. In contrast, an earthquake prediction would provide a date, time, and location of a future earthquake. The National Earthquake Hazards Reduction Program Reauthorization Act of 2018 ( P.L. 115-307 ) removed statutory language referencing the goal of earthquake prediction, substituting instead the goal of issuing earthquake early warnings and alerts. Since 2006, the U.S. Geological Survey (USGS), together with several cooperating institutions, has been working to develop a U.S. earthquake early-warning system. According to the USGS, the goal is to create and operate such a system for the nation's highest-risk regions, beginning with California, Oregon, and Washington. Other seismically active western states, such as Alaska, also may eventually be incorporated into an early-warning system, and possibly a region in the Midwest known as the New Madrid Seismic Zone. The authority provided in DRRA Section 1233 could help improve the U.S. early-warning capability because it addresses many of the components for earthquake detection (e.g., seismometers, the instruments that detect shaking), location (e.g., GPS receivers and infrastructure for more precise mapping of where shaking will occur), and improvements to the connected regional networks of seismometers and geodetic instruments. Part of the challenge in implementing an effective earthquake early-warning system is communicating the timing and location of dangerous shaking once the earthquake occurs. The section does not appear to address that challenge directly; however, improvements to the components specified in the section would likely improve overall early-warning system performance. Section 1231: Guidance on Hazard Mitigation Assistance52 DRRA Section 1231 requires FEMA, not later than 180 days after enactment (April 3, 2019), to issue guidance regarding the acquisition of property for open space as a mitigation measure under Stafford Act Section 404âHazard Mitigation. This guidance shall include a process by which the State Hazard Mitigation Officer (SHMO) appointed for the acquisition shall provide written notification to the local government, not later than 60 days after the applicant for assistance enters into an agreement with FEMA regarding the acquisition, that includes (1) the location of the acquisition; (2) the state-local assistance agreement for the Hazard Mitigation Grant Program; (3) a description of the acquisition; and (4) a copy of the deed restrictions. The guidance shall also include recommendations for entering into and implementing a memorandum of understanding between units of local government and the grantee or subgrantee, the state, and the regional FEMA Administrator that includes provisions to (1) use and maintain the open space consistent with Section 404 and all associated regulations, standards and guidance, and consistent with all adjoining property, so long as the cost of the maintenance is borne by the local government; and (2) maintain the open space pursuant to standards exceeding any local government standards defined in the agreement with FEMA. Section 1215: Management CostsâHazard Mitigation54 DRRA Section 1215 amends Stafford Act Section 324(b)(2)(A)âManagement Costs by setting out specific management cost caps for hazard mitigation. A grantee under Stafford Act Section 404âHazard Mitigation may be reimbursed not more than 15% of the total award, of which not more than 10% may be used by the grantee and 5% by a subgrantee. Public Assistance58 Section 1207(c) and (d): Program Improvements DRRA Section 1207(c) amends Stafford Act Section 428(d)âPublic Assistance Program Alternative Procedures to prohibit the conditioning of federal assistance under the Stafford Act on the election of an eligible entity to participate in the alternative procedures set forth in Section 428 of the Stafford Act. Prior to enactment of this provision of DRRA, FEMA had the discretion to impose conditions on the use of Section 428 procedures. DRRA Section 1207(d) amends Section 428(e)(1) to add a provision that requires cost estimates submitted under Section 428 procedures that are certified by a professionally licensed engineer and accepted by the FEMA Administrator to be presumed to be reasonable and eligible costs unless there is evidence of fraud. Prior to enactment of this provision, FEMA had the discretion to make case-by-case determinations regarding whether costs were reasonable and eligible, and FEMA had the discretion to change the determinations even after an original cost estimate had been approved. Section 1206(b): Eligibility for Code Implementation and Enforcement DRRA Section 1206(b) amends Stafford Act Section 406âRepair, Restoration, and Replacement of Damaged Facilities to add base and overtime wages for extra hires to facilitate implementation and enforcement of adopted building codes as an allowable expense. Allowable base and overtime wages are authorized for not more than 180 days after a major disaster declaration is issued. Section 1235(b), (c), and (d): Additional Mitigation Activities DRRA Section 1235(b) amends Stafford Act Section 406âRepair, Restoration, and Replacement of Damaged Facilities to specify that eligible costs for assistance provided under Section 406 be based on estimates of repairing, restoring, reconstructing, or replacing a public facility or private nonprofit facility in conformity with "the latest published editions of relevant consensus-based codes, specifications, and standards that incorporate the latest hazard-resistant designs and establish minimum acceptable criteria for the design, construction, and maintenance of residential structures and facilities." DRRA Section 1235 also requires that such eligible costs include estimates of replacing eligible projects under Stafford Act Section 406 "in a manner that allows the facility to meet the definition of resilient" developed pursuant to Section 406(e)(1)(A). Prior to DRRA's enactment, FEMA required that such project cost estimates be based on more general language of "codes, specifications, and standards" in place at the time the disaster occurred. DRRA Section 1235(c) amends Stafford Act Section 406 to authorize the contributions for eligible costs to be provided on an actual cost basis or based on cost-estimation procedures and DRRA Section 1235(d) directs the FEMA Administrator, in consultation with the heads of relevant federal agencies, to establish new rules regarding defining "resilient" and "resiliency" for the purposes of eligible costs under Section 406 of the Stafford Act. DRRA directs the President, acting through the FEMA Administrator, to issue a final rulemaking notice on the new rules not later than 18 months after DRRA's enactment (i.e., by April 5, 2020), and requires a final report summarizing the regulations and guidance issued defining "resilient" and "resiliency" to be submitted to Congress no later than two years after DRRA's enactment (i.e., by October 5, 2020). Section 1228: Inundated and Submerged Roads DRRA Section 1228 requires the FEMA Administrator, in coordination with the FHWA Administrator, to develop and issue guidance for local, state, territorial, and Indian tribal governments regarding repair, restoration, and replacement of inundated and submerged roads damaged or destroyed by a major disaster. The guidance must address associated expenses incurred by the government for roads eligible for assistance under Stafford Act Section 406âRepair, Restoration, and Replacement of Damaged Facilities. Prior to DRRA's enactment, FEMA did not issue guidance specifically addressing inundated and submerged roads and alternatives in the use of federal disaster assistance for the repair, restoration, and replacement of roads damaged by a major disaster. Section 1215: Management CostsâPublic Assistance DRRA Section 1215 amends Stafford Act Section 324(b)(2)(B)âManagement Costs to place a cap on any direct administrative costs, and any other administrative associated expenses, of not more than 12% of the total award amount provided under Stafford Act Sections 403âEssential Assistance, 406âRepair, Restoration, and Replacement of Damaged Facilities, 407âDebris Removal, and 502âFederal Emergency Assistance. The 12% cap is to be divided between the primary grantee and subgrantees with the primary grantee receiving not more than 7%, and subgrantees receiving not more than 5% of the total award amount. Individual Assistance69 Section 1213: Multifamily Lease and Repair Assistance DRRA Section 1213 amends Stafford Act Section 408(c)(1)(B)(ii)âFederal Assistance to Individuals and Households, Temporary Housing, Direct Assistance, Lease and Repair of Rental Units for Temporary Housing to expand the eligible areas for multifamily lease and repair properties, and remove the requirement that the value of the improvements or repairs not exceed the value of the lease agreement. FEMA's Multifamily Lease and Repair program is a form of direct temporary housing assistance under Stafford Act Section 408. When eligible individuals and households are unable to use Rental Assistance due to a lack of available housing resources and when it is determined to be a cost-effective alternative to other temporary housing options, FEMA may enter into lease agreements with the owners of multifamily rental property units and may make improvements or repairs, in order to provide temporary housing. Expanding the Areas Eligible for Multifamily Lease and Repair FEMA guidance includes limitations on the conditions of eligibility required to authorize properties for multifamily lease and repair. Prior to DRRA's enactment, multifamily lease and repair properties had to be located in areas covered by an emergency or major disaster declaration. Following DRRA's enactment, however, eligible properties also include those "impacted by a major disaster." According to the House Transportation and Infrastructure Committee's Disaster Recovery Reform Act Report ( DRRA Report ), in amending this section of the Stafford Act, Congress intended to "allow greater flexibility and options for housing disaster victims." Thus, DRRA Section 1213 expands program eligibility for properties, which may increase the number of FEMA-leased multifamily rental properties. This may: increase available housing stock for eligible individuals and households; and reduce FEMA's reliance on other, less cost-effective forms of direct assistance (e.g., Transportable Temporary Housing Units (TTHUs)). Although it was released following DRRA's enactment, FEMA's most recent guidanceâthe Individual Assistance Program and Policy Guide ( IAPPG ) âstates that in order to be eligible for multifamily lease and repair, "[t]he property must be located in an area designated for IA [Individual Assistance] included in a major disaster declaration," which is inconsistent with Stafford Act Section 408(c)(1)(B)(ii)(I)(aa), as amended by DRRA. The IAPPG does, however, add the ability for FEMA to add counties/jurisdictions to the major disaster declaration designed for IA "specifically for the purpose of implementing MLR [Multifamily Lease and Repair]." Thus, while FEMA's most recent guidance expands the agency's ability to implement MLR, it still states that properties must be in designated areas. In order to reflect the changes to the Multifamily Lease and Repair program post-DRRA, FEMA would need to update its guidance to be consistent with Stafford Act Section 408(c)(1)(B)(ii)(I)(aa), as amended, and may consider defining what it means for a property to be "impacted by a major disaster," and any additional, related eligibility criteria. Determining the Cost-Effectiveness of Potential Multifamily Lease and Repair Properties Prior to DRRA's enactment, the value of the improvements or repairs were not permitted to exceed the value of the lease agreement, which, per FEMA policy, could not be greater than the Fair Market Rent (FMR). Post-DRRA, the restriction that improvements or repairs not exceed the value of the lease agreement has been removed from Stafford Act Section 408(c)(1)(B)(ii)(II)âFederal Assistance to Individuals and Households, Temporary Housing, Direct Assistance, Lease and Repair of Rental Units for Temporary Housing, as amended. Additionally, and as was the case prior to DRRA, the cost-effectiveness of the potential multifamily lease and repair property must still be considered when FEMA determines whether or not to enter into a lease agreement with a property owner for the purpose of providing Multifamily Lease and Repair assistance. As stated above, when eligible individuals and households are unable to use Rental Assistance and when it is determined to be a cost-effective alternative to other temporary housing options, FEMA may use multifamily lease and repair to provide temporary housing. According to FEMA's guidance, the process by which the agency determines the cost-effectiveness of a potential multifamily lease and repair property is that "FEMA will determine the value of the lease agreement by multiplying the approved monthly Rental Assistance rate by the number of units, and then multiplying the number of months remaining between the date the repairs are completed and the end of the 18-month period of assistance." FEMA guidance, however, currently states that there are three steps that FEMA must take to determine the cost-effectiveness of a potential multifamily lease and repair property. FEMA would need to update the IAPPG to clarify the process by which FEMA determines cost-effectiveness and to reflect the fact that the cost-effectiveness determination is not based on a three-step test. Additionally, it is unclear whether the removal of the restriction that improvements or repairs not exceed the value of the lease agreement will have a significant impact on program administration. There are several reasons the impact of this legislative change may not be significant including: the property must be found to be cost-effective even if a potential property requiring improvements or repairs in excess of the value of the lease agreement may be otherwise eligible; and prior to DRRA's enactment, it was possible for FEMA to enter into lease agreements when the value of the improvements or repairs exceeded the value of the lease agreement, provided the necessary written justification was submitted and approved. Finally, within two years (i.e., due by October 5, 2020), the Inspector General (IG) of DHS must assess the use of FEMA's direct assistance authority, including the adequacy of the benefit-cost analysis conducted, to justify this alternative to other temporary housing options, and submit a report to Congress. Section 1211: State Administration of Assistance for Direct Temporary Housing and Permanent Housing Construction The State or Tribal Government's Role in Providing Direct Temporary Housing Assistance and Permanent Housing Construction DRRA Section 1211(a) amends Stafford Act Section 408(f)âFederal Assistance to Individuals and Households, State Role to expand the types of FEMA Individuals and Households Program (IHP) assistance that a state, territorial, or Indian tribal government may request to administer under Stafford Act Section 408(f)(1)(A) to include Direct Temporary Housing Assistance under Section 408(c)(1)(B) and Permanent Housing Construction under Section 408(c)(4), in addition to Other Needs Assistance (ONA) under Section 408(e). Prior to DRRA's enactment, Stafford Act Section 408(f)(1) only allowed state, territorial, and Indian tribal governments to request financial assistance to manage ONA. According to Senate HSGAC's Disaster Recovery Reform Act of 2018 Report ( DRRA Report ), this section of DRRA "emphasizes the need for and provides tools to execute an effective local response to disasters ... [in part by] empowering states to administer housing assistance efforts." FEMA has also stated that: [s]tate and tribal officials have the best understanding of the temporary housing needs for survivors in their communities. This provision incentivizes innovation, cost containment and prudent management by providing general eligibility requirements while allowing them the flexibility to design their own programs. These statements highlight a key aspect of this amendment to the Stafford Actâthat, because the federal share of eligible housing costs is 100%, in effect, FEMA may now provide state, territorial, and Indian tribal governments with a block grant for disaster housing assistance, provided certain requirements are met (see below). Allowing state, territorial, or Indian tribal governments to administer these housing programs, in addition to ONA, using a flexible, block-grant program that "leverag[es] state autonomy" "to tailor a solution that specifically addresses the needs of disaster victims" may expedite and enhance disaster recovery. Despite these benefits, the ability for state, territorial, or Indian tribal governments to design and administer customized versions of these programs has the potential to result in challenges. For example: individuals and households may face challenges to participating in these programs if application processes and program requirements are not clearly defined, or if their past participation in these programs differs from future program implementation; client advocates and case managers may have trouble supporting individuals and households seeking to and/or participating in these programs if application processes and program administration differ from jurisdiction to jurisdiction, or if a state/territorial/Indian tribal government implements the programs differently for different disasters; state, territorial, and Indian tribal governments seeking to administer these programs may also struggle to administer active programs with different application processes and program administration requirements, and may find it difficult to manage programs when future program implementation differs from past program implementation; and federal partners supporting state, territorial, and Indian tribal governments may find it difficult to keep track of application processes and program administration that differs from jurisdiction to jurisdiction, or when future program implementation differs from past program implementation. In addition to the programmatic flexibility accorded by this amendment to the Stafford Act, state, territorial, or Indian tribal governments that elect to administer housing assistance and/or ONA under Section 408(f) are eligible to expend up to 5% of the amount of the grant for administrative costs. This may increase their capacity to quickly and effectively administer these programs. With the addition of the ability of state, territorial, or Indian tribal governments to administer Direct Temporary Housing Assistance and Permanent Housing Construction, it is possible that the state, territorial, or Indian tribal government may be required to select an option for administration of assistance, as in the case with ONA. Within two years of DRRA's enactment (i.e., by October 5, 2020), FEMA is required to issue final regulations to establish how a state, territorial, or Indian tribal government is to administer Direct Temporary Housing Assistance and Permanent Housing Construction. In the intervening period, FEMA has the ability to administer this as a pilot program until the final regulations are promulgated (an example of such a regulation can be found in 44 C.F.R. Â§206.120âState Administration of Other Needs Assistance, which sets out the regulations for state administration of ONA). New Requirements In addition to expanding the types of assistance state, territorial, and Indian tribal governments may administer, DRRA adds requirements for the receipt of approval to administer such assistance. Prior to DRRA's enactment, in order to administer ONA, a governor had to request a grant to provide financial assistance. Post-DRRA, if a state, territorial, or Indian tribal government would like to administer Direct Temporary Housing Assistance, Permanent Housing Construction, and/or ONA, then it must "submit to the President an application for a grant to provide financial assistance under the program [emphasis added]." DRRA also includes criteria for the approval of applications, as follows: (i) a requirement that the State or Indian tribal government submit a housing strategy under subparagraph (C) [Requirement of Housing Strategy]; (ii) the demonstrated ability of the State or Indian tribal government to manage the program under this section; (iii) there being in effect a plan approved by the President as to how the State or Indian tribal government will comply with applicable Federal laws and regulations and how the State or Indian tribal government will provide assistance under its plan; (iv) a requirement that the State or Indian tribal government comply with rules and regulations established pursuant to subsection (j); and (v) a requirement that the President, or the designee of the President, comply with subsection (i) [Verification Measures]. Three requirements intended to ensure the state, territorial, or Indian tribal government that seeks to administer these programs has the capacity to do so, include: the state, territorial, or Indian tribal government must have an approved housing strategy, which may encourage the development of disaster housing strategies to better enable effective local response to disasters; the state, territorial, or Indian tribal government must have the demonstrated ability to manage the programâalthough it is unclear what evidence may be used to demonstrate the capacity to manage the housing-related programs (note that FEMA is developing guidance for the administration of Direct Temporary Housing and Permanent Housing Construction). An approved State Administrative Plan is a requirement to administer ONA, and FEMA considers this sufficient to demonstrate the state, territorial, or Indian tribal government's capability to manage ONA; and the President or designee shall implement policies, procedures, and internal controls to prevent "waste, fraud, abuse, and program mismanagement"; it is possible for the President to withdraw the approval for the state, territorial, or Indian tribal government to administer Direct Temporary Housing Assistance, Permanent Housing Construction, or ONA. FEMA may need to clarify the application and approval requirements because it is unclear (1) how concepts such as "waste" and "abuse" are defined in this context; (2) how the determination that "the State or Indian tribal government is not administering the program ... in a manner satisfactory to the President" will be madeâalthough DRRA includes a requirement that the DHS IG periodically audit the programs administered by the state, territorial, or Indian tribal governments, and these audits may be used to assess program administration; and (3) how program administration will be managed following a withdrawal of approval and/or whether there will be an opportunity for the state, territorial, or Indian tribal government to remedy any issues identified with regard to program administration or appeal a decision withdrawing approval. Within two years of DRRA's enactment (i.e., by October 5, 2020), FEMA is required to issue final regulations on the administration of this program, in which FEMA may consider addressing the administration of the application and approval processes and requirements, including the requirements for demonstrating the capacity to manage the program, and the process for the withdrawal of approval and any remedies the state, territorial, or Indian tribal government may have. State and Local Reimbursement for Implementing a Housing Solution DRRA Section 1211(b) provides a mechanism for state and local units of government to be reimbursed in the event they do not request a grant to administer housing assistance, if the solution they implement satisfies several conditions. Specifically, DRRA Section 1211(b) notes that FEMA shall reimburse state and local "units of government" for locally-implemented housing solutions that meet three requirements, provided the request for reimbursement is received within a three-year period after a major disaster declaration under Stafford Act Section 401âProcedure for Declaration. The three requirements are that the solution: (1) costs 50 percent of comparable FEMA solution or whatever the locally implemented solution costs, whichever is lower; (2) complies with local housing regulations and ordinances; and (3) the housing solution was implemented within 90 days of the disaster. It is unclear how and when a reimbursement will be provided when a housing solution meets the proper eligibility conditions set forth above. FEMA may issue a new rulemaking and/or policy guidance to establish how the cost of the locally-implemented solution will be assessed and compared with the FEMA solution, as well as how reimbursement requests will be processed. Section 1212: Assistance to Individuals and Households DRRA Section 1212 amends Stafford Act Section 408(h)âFederal Assistance to Individuals and Households, Maximum Amount of Assistanceâto create separate caps for the maximum amount of financial assistance eligible individuals and households may receive for housing assistance and for ONA, and allow for accessibility-related costs. Under FEMA's IHP, financial assistance (e.g., assistance to rent alternate housing accommodations, conduct home repairs, and ONA) and/or direct assistance (e.g., Multifamily Lease and Repair and TTHUs) may be available to eligible individuals and households who, as a result of a disaster, have uninsured or under-insured necessary expenses and serious needs that cannot be met through other means or forms of assistance. Prior to DRRA, an individual or household could receive up to $33,300 (FY2017; adjusted annually) in financial assistance, which included both housing assistance and ONA. Post-DRRA, financial assistance for housing-related needs may not exceed $34,900 (FY2019; adjusted annually), and, separate from that , financial assistance for ONA may not exceed $34,900 (FY2019; adjusted annually). Thus, separate caps of equal amounts have been established for financial housing assistance and ONA. In addition, financial assistance to rent alternate housing accommodations is not subject to the cap . As of the date of this report's publication, FEMA's IAPPG has not been updated to reflect DRRA's changes to the maximum amount of financial assistance. It still notes that Rental Assistance is subject to the cap, which has the potential to create confusion for local, state, territorial, Indian tribal, and federal governments, nonprofit partners, and other entities that assist disaster survivors seeking to rely on the IAPPG as a resource for FEMA's IA policies and procedures. However, FEMA has posted a memorandum on the policy changes to its website, and has stated that the changes will be "incorporated into a subsequent publication of the IAPPG." DRRA Section 1212 also amends Stafford Act Section 408(h) to create exclusions to the maximum amount of assistance for individuals with disabilities for expenses to repair or replace: accessibility-related property improvements under FEMA's Repair Assistance, Replacement Assistance, and Permanent Housing Construction; and accessibility-related personal property under Financial Assistance to Address Other NeedsâPersonal Property, Transportation, and Other Expenses Assistance. Thus, the addition of Stafford Act Section 408(h)(4) may expand the eligibility of individuals with disabilities for financial assistance. In response to the IHP changes post-DRRA, FEMA began processing retroactive payments to applicants who either reached or exceeded the financial cap for disasters declared on or after August 1, 2017, and stated that, in April 2019, it would begin evaluating applications to assess whether some survivors may be eligible for additional rental assistance, which may enable eligible applicants to receive additional funds. Administrative challenges may arise if eligible applicants who received the previous maximum amount of financial assistance now request additional financial assistance for programs to which they did not previously apply. For example, an eligible applicant may not have requested ONA if their request for Repair Assistance already equaled or exceeded the cap. In the past, the combinedâhousing assistance and ONAâcap on the maximum amount of financial assistance that an individual or household was eligible to receive may have resulted in applicants with significant home damage and/or other needs having insufficient funding to meet their disaster-caused needs, including little to no remaining funding available to pay for rental assistance. Thus, changes to Stafford Act Section 408(h) post-DRRA have the potential to result in increased assistance to eligible disaster survivors, and increased federal spending on temporary disaster housing assistance and ONA. This may help to better meet the recovery-related needs of individuals and households who experience significant damage to their primary residence and personal property as a result of a major disaster. However, there is also the potential that this change may disincentivize sufficient insurance coverage because of the new ability for eligible individuals and households to receive separate and increased housing assistance and ONA awards that more comprehensively cover disaster-related real and personal property losses. Section 1216: Flexibility Discretionary Ability to Waive Debts DRRA Section 1216(a) allows FEMA to waive debts owed to the United States related to assistance provided under Stafford Act Section 408âFederal Assistance to Individuals and Households. Federal laws require federal agencies, including FEMA, to identify and recover improper payments . Specifically, the Improper Payments Information Act of 2002 (IPIA, P.L. 107-300 ) and the Improper Payments Elimination and Recovery Act of 2010 (IPERA, P.L. 111-204 ) direct the head of each federal agency to review and identify all programs and activities administered by the agency that may be "susceptible to significant improper payments." IPERA also includes the requirement that the agency take action to collect overpayments. Several federal programs account for a significant portion of improper payments, including FEMA's IHP. The dualâand sometimes conflictingâgoals of (1) expediting FEMA assistance to disaster survivors and (2) maintaining administrative controls to ensure program eligibility may contribute to improper payments. Nonetheless, FEMA reviews disaster assistance payments following every disaster and works to collect overpayments. FEMA does have some discretion not to pursue recoupment. Additionally, the need for FEMA to have discretion with regard to recoupment was previously identifiedâalbeit for a limited period of time. Congressional "concerns about the fairness of FEMA collecting improper payments caused by FEMA error especially when a significant amount of time had elapsed before FEMA provided actual notice to the debtors" led to the passage of the Disaster Assistance Recoupment Fairness Act of 2011 (DARFA, Division D, Section 565 of the Consolidated Appropriations Act, 2012, P.L. 112-74 ). DARFA provided FEMA with the discretionary authority to waive debts arising from improper payments for disasters declared between August 28, 2005, and December 31, 2010âwhich included Hurricanes Katrina and Rita, as well as other disasters. DRRA Section 1216(a) mirrors the factors included in DARFA. Following DRRA's enactment, FEMA may waive a debt related to covered assistance if: distributed in error by FEMA; there was no fault on behalf of the debtor; and collection would be "against equity and good conscience." This section is retroactive, and applies to major disasters or emergencies declared on or after October 28, 2012. Thus, DRRA Section 1216(a) expands FEMA's discretionary ability with regard to debt collection by authorizing FEMA to waive the collection of a debt as long as the above-listed factors are also satisfiedâthe exception is if the debt involves fraud, a false claim, or misrepresentation by the debtor or party having an interest in the claim. However, if FEMA's distributions of covered assistance based on federal agency error exceed 4% of the total amount of covered assistance distributed in any 12-month period, then the DHS IG, charged with monitoring the distribution of covered assistance, shall remove FEMA's waiver authority based on an excessive error rate. That said, according to the House Transportation and Infrastructure Committee's DRRA Report , "FEMA has implemented controls to avoid improper payments ... [and] FEMA's current error rate for improper payments to individuals is less than two percent." It is unclear how FEMA will review and process waivers of improper payments, although FEMA may use the DHS IG's recommendationsâput forth post-DARFAâfor reviewing and processing future debt recoupment cases as outlined in its FEMA's Efforts to Recoup Improper Payments in Accordance with the Disaster Assistance Recoupment Fairness Act of 2011 report. FEMA may also consider issuing a rulemaking and/or policy guidance to require that FEMA's comprehensive quality assurance review procedures apply to the review of recoupment cases, per the DHS IG's recommendation; establish an audit trail for FEMA waiver of recoupment decisions, per the DHS IG's recommendation; and clarify the considerations for approving a waiver (e.g., defining the circumstances under which collection of the debt would be "against equity and good conscience"), which may be especially important given that disaster survivors may face financial hardship if required to repay assistance that they have already spent on recovering from a disaster. Prohibition on Collecting Certain Assistance DRRA Section 1216(b) restricts FEMA's ability to recoup assistance provided under Stafford Act Section 408âFederal Assistance to Individuals and Households. Specifically, Section 1216(b) states: unless there is evidence of civil or criminal fraud, [FEMA] may not take any action to recoup covered assistance ... if the receipt of such assistance occurred on a date that is more than 3 years before the date on which the Agency first provides to the recipient written notification of an intent to recoup [emphasis added]. This section is retroactive, and applies to major disasters or emergencies declared on or after January 1, 2012. According to the House Transportation and Infrastructure Committee's DRRA Report , this provision "will help ensure that FEMA initiates any collection actions as quickly as possible, reduce administrative costs, and provide more certainty to individuals recovering from disasters." FEMA stated that the agency's understanding of this provision is that it establishes a three-year statute of limitations on the agency's ability to recoup debts provided under IHP. Despite apparent congressional and agency intent, FEMA's guidance states that: [w]hile there is no statute of limitations on initiating recoupment of IHP debt owed to the U.S. Government through administrative means, FEMA's goal is to notify applicants of any potential debt owed within three years after the date of the final IHP Assistance payment. FEMA's failure to meet this goal will not preclude it from initiating recoupment of potential debt when otherwise appropriate.... FEMA may notify applicants of any potential debt beyond three years after the date of the final IHP Assistance payment in cases where it considers recovery of funds to be in the best interest of the Federal government.... Congress may require FEMA to update its guidance to reflect DRRA Section 1216(b). Additionally, the legislative language in DRRA Section 1216(b) may result in confusion when interpreting whether the section is discretionary or mandatory. This is because the legislation states that FEMA " may not take any action to recoup covered assistance ... "âas opposed to FEMA " shall not take any action to recoup covered assistance.... " Thus, confusion may exist despite the apparent congressional intent that FEMA should not be able to take any action to recoup covered assistance three years after its receipt and the fact that FEMA has stated it interprets the provision as being mandatory. One action available to Congress is to clarify, through legislation, that this section is mandatory (if that is the intent of Congress) in order to avoid potential ambiguity when interpreting the law. An additional consideration with regard to this provision is that the three-year window to recoup IHP payments will be different for each award to an individual/household, and this will likely pose an administrative challenge for FEMA given the volume of awards provided under the IHP program. Statute of LimitationsâPublic Assistance DRRA Section 1216(c) amends Stafford Act Section 705âDisaster Grant Closeout Procedures to change how the statute of limitations for Public Assistance (PA) is defined. Prior to DRRA's enactment, the statute of limitations on FEMA's ability to recover payments made to a state or local government was three years after the date of transmission of the final expenditure report for the disaster or emergency . DRRA amends the statute of limitations such that no administrative action to recover payments can be initiated " after the date that is 3 years after the date of transmission of the final expenditure report for project completion as certified by the grantee [emphasis added] ." Additionally, this provision applies retroactively to disaster or emergency assistance provided on or after January 1, 2004, and any pending administrative actions were terminated as of the date of DRRA's enactment, if prohibited under Stafford Act Section 705(a)(1), as amended by DRRA. It may take years to close all of the projects associated with a disaster, and, prior to DRRA, FEMA could recoup funding from projects that may have been completed and closed years prior to FEMA's pursuit of funding because the disaster was still open. This post-DRRA project-by-project statute of limitations is a significant change that has the potential to ease the administrative and financial burden that the management of disaster recovery programs places on state, territorial, and Indian tribal governments because it creates certainty as to the projects that may be subject to recoupment. It may also incentivize the timely closeout of PA projects by state and local governments, which may also ease FEMA's administrative and financial burdens. Floodplain Management and Flood Insurance165 Section 1206(a): Eligibility for Code Implementation and Enforcement DRRA Section 1206(a) amends Stafford Act Section 402âGeneral Federal Assistance to allow state and local governments to use general federal assistance funds for the administration and enforcement of building codes and floodplain management ordinances, including inspections for substantial damage compliance. If a building in a Special Flood Hazard Area (SFHA) is determined to be substantially damaged, it must be brought into compliance with local floodplain management standards. Local communities can require the building to be rebuilt to current floodplain management requirements even if the property previously did not need to do so. For instance, the new compliance standard may require the demolition and elevation of the rebuilt building to above the Base Flood Elevation. FEMA does not make a determination of substantial damage; this is the responsibility of the local government, generally by a building department official or floodplain manager. Similarly, the enforcement of building codes and floodplain management ordinances are the responsibility of local government. Particularly following a major flood, communities may be required to assess a large number of properties at the same time, and, as a result, additional resources may be needed. This provision affords an additional source of funding to support communities in carrying out such activities. Section 1207(b): Program Improvements DRRA Section 1207(b) amends Stafford Act Section 406(d)(1)âRepair, Restoration, and Replacement of Damaged Facilities to provide relief from a reduction in disaster assistance for certain public facilities and private nonprofit facilities with multi-structure campuses which were damaged by disasters in 2016 to 2018. Applicants for Public Assistance (PA) for repair, restoration, reconstruction, and replacement are required to obtain flood insurance on damaged insurable facilities (buildings, equipment, contents, and vehicles) as a condition of receiving PA grant funding. Insurance coverage must be subtracted from all applicable PA grants in order to avoid duplication of financial assistance. In addition, the applicant must maintain flood insurance on these facilities in order to be eligible for PA funding in future disasters, whether or not a facility is in the SFHA. If an eligible insurable facility damaged by flooding is located in a SFHA that has been identified for more than one year and the facility is not covered by flood insurance or is underinsured, FEMA will reduce the amount of eligible PA funding for flood losses in the SFHA by the maximum amount of insurance proceeds that would have been received had the buildings and contents been fully covered by a standard National Flood Insurance Program (NFIP) policy. For nonresidential buildings, this is currently a maximum of $500,000 for contents and $500,000 for the building. The Stafford Act previously required that this reduction in disaster assistance should be applied to each individual building in the case of multi-unit campuses, which could result in a significant reduction in PA funding for entities with uninsured multi-structure campuses. The new provision in DRRA provides that the reduction in assistance shall not apply to more than one building of a multi-structure educational, law enforcement, correctional, fire, or medical campus. This amendment applies to disasters declared between January 1, 2016, and December 31, 2018. This means that organizations without flood insurance that had Public Assistance funding reduced under the pre-DRRA Stafford Act provisions will have funding restored for floods such as the 2016 Louisiana floods, and Hurricanes Matthew, Harvey, Irma, Maria, and Florence. Section 1240: Report on Insurance Shortfalls DRRA Section 1240 requires FEMA to submit a report to Congress not later than two years after enactment, and each year after until 2023, on Public Assistance self-insurance shortfalls. As described in " Section 1207(b): Program Improvements ," applicants for PA for repair, restoration, reconstruction, and replacement in an SFHA are required to obtain flood insurance on damaged insurable facilities as a condition of receiving PA grant funding, and maintain insurance on these facilities in order to be eligible for PA funding in future disasters. However, an applicant may apply in writing to FEMA to use a self-insurance plan to comply with the insurance requirement. The details required for the self-insurance plan are set out in FEMA guidance. The DHS IG has issued four reports on applicants' compliance with PA insurance requirements that have identified concerns with applicant compliance with these requirements and FEMA's tracking of applicants' compliance. However, these reports have not focused specifically on self-insurance. The new reports under DRRA Section 1240 will include information on the number of instances and the estimated amounts involved, by state, in which self-insurance amounts have been insufficient to address flood damages. Other Provisions Section 1224: Agency Accountability174 DRRA Section 1224 amends Title IV of the Stafford Act to establish a new section, Section 430âAgency Accountability, addressing public assistance, mission assignments, disaster relief monthly reports, contracts, and the collection of public assistance recipient and subrecipient contracts. Subsection (a) of the new Stafford Act Section 430, established by DRRA Section 1224, requires the FEMA Administrator to publish on the FEMA website award information for grants awarded under Stafford Act Section 406âRepair, Restoration, and Replacement of Damaged Facilities in excess of $1,000,000. For each such grant, FEMA shall provide the following information: FEMA region; declaration number; whether the grantee is a private nonprofit organization; damage category code; amount of the federal share obligated; and the date of the award. Prior to DRRA's enactment, FEMA did not publish contract information on the FEMA website. Stafford Act Section 430(d) requires the FEMA Administrator to publish information about each contract executed by FEMA in excess of $1,000,000 on the FEMA website within the first 10 days of each month. For each such contract, FEMA shall provide the following information: contractor name; date of contract award; amount and scope of the contract; whether the contract was competitively bid; whether and why there was a no competitive bid; the authority used to bypass competitive bidding if applicable; declaration number; and the damage category code. Section 430(d) also requires the FEMA Administrator to provide a report to the appropriate congressional committees on the number of contracts awarded without competition, reasons why there was no competitive bidding process, total amount of the no-competition contracts, and the applicable damage category codes for such contracts. Section 430(e) requires the FEMA Administrator to initiate efforts to maintain and store information on contracts entered into by a Public Assistance recipient or subrecipient of funding through Stafford Act Sections 324âManagement Costs, 403âEssential Assistance, 404âHazard Mitigation, 406âRepair, Restoration, and Replacement of Damaged Facilities, 407âDebris Removal, 428âPublic Assistance Program Alternative Procedures, and 502âFederal Emergency Assistance for contracts with an estimated value of more than $1,000,000. Collected contract information shall include the following: disaster number; project worksheet number; category of work; name of contractor; date of the contract award; amount of the contract; scope of the contract; period of performance for the contract; and whether the contract was awarded through a competitive bid process. The FEMA Administrator is required to make such collected information available to the DHS IG, the Government Accountability Office (GAO), and appropriate congressional committees upon request. The FEMA Administrator is also required to submit a report to relevant committees within 365 days of DRRA's enactment on the efforts of FEMA to collect the required contract information (i.e., by October 5, 2019). Prior to DRRA's enactment, FEMA did not appear to have comprehensive contract information to make available upon request and did not submit annual reports to Congress regarding collection of such information. Section 1221: Closeout Incentives178 DRRA Section 1221 amends Stafford Act Section 705âDisaster Grant Closeout Procedures to authorize the FEMA Administrator to develop incentives and penalties relating to grant closeout activities to encourage grantees to close out disaster-related expenditures on a timely basis. DRRA Section 1221 also requires the FEMA Administrator to improve closeout practices and reduce the time between awarding a grant under Stafford Act provisions and closing out expenditures for the award. The FEMA Administrator is also directed to issue regulations relating to facilitating grant closeout. Prior to DRRA's enactment, FEMA had discretion to engage in activities that would incentivize or penalize grantees for delayed closeouts. This provision made such activities a requirement rather than at FEMA's discretion. Congress designed Section 1221 to improve the timeliness of closeout procedures by limiting or preventing delays in the process. Section 1225: Audit of Contracts180 DRRA Section 1225 prohibits the FEMA Administrator from reimbursing grantees for any activities made pursuant to a contract entered into after August 1, 2017, that prohibits the FEMA Administrator or the Comptroller General of the United States from auditing or reviewing all aspects relating to the contract. Section 1237: Certain Recoupment Prohibited182 DRRA Section 1237 directs FEMA to "deem any covered disaster assistance to have been properly procured, provided, and utilized, and shall restore any funding of covered disaster assistance previously provided but subsequently withdrawn or deobligated." "Covered disaster assistance" is defined as assistance provided to a local government under Stafford Act Sections 403âEssential Assistance, 406âRepair, Restoration, and Replacement of Damaged Facilities, or 407âDebris Removal in which the DHS IG has made a determination, through an audit, that the following conditions were present: (A) the Agency deployed to the local government a Technical Assistance Contractor to review field operations, provide eligibility advice, and assist with day-to-day decisions; (B) the Technical Assistance Contractor provided inaccurate information to the local government; and (C) the local government relied on the inaccurate information to determine that relevant contracts were eligible, reasonable, and reimbursable. Section 1210: Duplication of Benefits185 DRRA Section 1210 amends Stafford Act Section 312(b) by providing the President the authority to waive the prohibition on duplication of benefits (upon a gubernatorial request) if the "waiver is in the public interest and will not result in waste, fraud, or abuse." When making the waiver decision, the President may consider (1) recommendations from the Administrator of FEMA or other agencies administering the duplicative program; (2) if granted, whether the assistance is cost effective; (3) "equity and good conscience"; and (4) "other matters of public policy considered appropriate by the President." Duplication of benefits has been an ongoing issue of congressional concern and DRRA Section 1210 is the most recent attempt to reduce hardships caused by duplication of benefits recoupment. Individuals and households often need to use multiple sources of assistance to fully recover from a major disaster. If the assistance exceeds their unmet disaster needs, then the assistance is considered a "duplication of benefits." Stafford Act Section 312(a)âDuplication of Benefits prohibits the "financial assistance to persons, business concerns, or other entities suffering losses as a result of a major disaster or emergency ... [for] which he has received financial assistance under any other program or from insurance or any other source." Stafford Act Section 312(c) states that the recipient of duplicative assistance is liable to the United States and that the agency that provided the duplicative assistance is responsible for debt collection. The federal duplication of benefits policy is intended to prevent waste, fraud, and abuse of program assistance. 44 C.F.R. Â§206.191 provides procedural guidance known as a "delivery sequence" to prevent the duplication of benefits between federal assistance programs such as FEMA's Individuals and Households Program and the Small Business Administration's (SBA's) Disaster Loan Program, state assistance programs, other assistance programs (e.g., volunteer programs), and insurance benefits (see Figure 1 ). An organization's position within the delivery sequence determines the order in which it should provide assistance and what other resources need to be considered before that assistance is provided. The regulation requires individuals to repay all duplicated assistance to the agency providing the assistance based on the delivery sequence hierarchy that outlines the order assistance should be provided. Critics have argued that the delivery sequence lacks specificity. For example, the U.S. Department of Housing and Urban Development's (HUD's) Community Development Block GrantâDisaster Recovery (CDBG-DR) Program, which is often duplicated with other assistance sources, is not listed in the delivery sequence. However, in addition to prohibiting duplication of benefits, Stafford Act Section 312 also stipulates that assistance cannot be withheld. Section 312(b)(1) states: this section shall not prohibit the provision of federal assistance to a person who is or may be entitled to receive benefits for the same purposes from another source if such person has not received such other benefits by the time of application for federal assistance and if such person agrees to repay all duplicative assistance to the agency providing the federal assistance. The delivery sequence, therefore, is not rigidâit can be broken in certain cases. The most common example is when adhering to the delivery sequence prevents the timely receipt of essential assistance. In some cases, assistance can be provided more quickly by an organization or agency that is lower in the sequence than an agency or organization that is at a higher level. For example, SBA disaster loans can generally be processed more quickly than FEMA grants; CDBG-DR grants take longer still because CDBG-DR disaster funding generally requires Congress to pass an appropriation. Once appropriated, the funding is usually released to the state in the form of a block grant, which is then disbursed by the state to disaster survivors. The underlying rationale for providing assistance when it becomes immediately available instead of rigidly adhering to the delivery sequence is to make sure disaster survivors receive aid as quickly as possible. Advocates of this view argue that preventing duplication of benefits is of secondary importanceâit can be rectified and recouped later. This practice, however, has led to problems, particularly for individuals and households. In some cases, the federal government may fail to identify the duplication. In others cases, it may take a prolonged period of time to identify the duplication and the recoupment notification that they owe money to the federal government may come as a surprise to disaster survivors who did not realize they exceeded their allowable assistance. In some cases they may have spent all of the assistance on recovery, and repaying duplicative assistance constitutes a financial burden to the disaster survivor. One of the most significant changes instituted by DRRA Section 1210 is that it prohibits the President from determining loans as duplicative assistance provided all federal assistance is used toward loss resulting from an emergency or major disaster under the Stafford Act. This arguably removes SBA disaster loans from the delivery sequence. However, the rulemaking on this policy has not been issued. Thus, it remains to be seen how this provision of DRRA will be implemented. Finally, DRRA Section 1210(a)(5) requires the FEMA Administrator, in coordination with relevant federal agencies, to provide a report with recommendations to improve "the comprehensive delivery of disaster assistance to individuals following a major disaster or emergency declaration." The report must include (1) actions planned or taken by the agencies as well as legislative proposals to improve coordination between agencies with respect to delivering disaster assistance; (2) a clarification of the delivery sequence; (3) a clarification of federal-wide interpretation of Stafford Act Section 312 when providing assistance to individuals and households; and (4) recommendations to improve communication to disaster assistance applicants, including the breadth of programs available and the potential impacts of utilizing one program versus another. Section 1239: Cost of Assistance Estimates; Section 1232: Local Impact192 DRRA Section 1239âCost of Assistance Estimates and Section 1232âLocal Impact both require FEMA to review and initiate a rulemaking to update the factors considered when evaluating a governor's request for a major disaster declaration, including how FEMA estimates the cost of major disaster assistance. They also require FEMA to consider anything that may affect a local jurisdiction's capacity to respond to a disaster. Section 1232 in particular requires FEMA to give greater consideration to severe local impact or recent multiple disasters. Both sections address the way FEMA has made major disaster recommendations to Presidents. FEMA uses factors about the severity of the incident (including how the state was affected by the incident) to assess the state's need for federal assistance. The estimated cost of assistance (also known as the per capita threshold) has been a key factor used by FEMA to evaluate the disaster's severity and to determine if the state has the capacity to handle the disaster without federal assistance. Two thresholds are used for estimated cost of assistance: (1) $1 million in public infrastructure damages and (2) a formula based on the state's population (according to the most recent census data) and public infrastructure damages. Based on these thresholds, FEMA has generally recommended that a major disaster be declared if public infrastructure damages exceed $1 million and meet or exceed $1.50 per capita. The underlying rationale for using a per capita threshold is that state fiscal capacity should be sufficient to deal with the disaster if damages and costs fall under the per capita amount. However, concerns related to relying on the per capita threshold include that: the per capita threshold may be difficult to reach for some states. For example, a rural area in a highly populated state may be denied federal disaster assistance because damages and costs do not exceed the per capita threshold; these incidents still warrant federal assistance because they overwhelm local response and recovery capacity in spite of not exceeding the statewide threshold; and the application of the per capita threshold is inequitable because the same incident may affect multiple states but only result in a major disaster declaration for some states by virtue of differences in state population. Pursuant to DRRA Section 1239, within two years of DRRA's enactment (i.e., by October 5, 2020), FEMA is required to initiate a rulemaking to update the factors considered when evaluating a governor's request for a major disaster declaration, including how the cost of assistance is estimated, as well as other impacts on the jurisdiction's response capacity. As part of the review and rulemaking, FEMA may consider whether the per capita threshold is an appropriate mechanism for evaluating capacity, and additional information, such as the results of the 2020 U.S. Census, may factor into the final rule. DRRA Section 1232 also requires FEMA to adjust agency policy and regulations to grant greater consideration to severe local impact or recent multiple disasters, which may enable jurisdictions that struggle to reach the per capita threshold to provide evidence supporting the request for a major disaster declaration as no single factor is dispositive and the determination to grant a request for a major disaster is at the President's discretion. FEMA currently uses nine factors to evaluate a state or territory's request for a major disaster declaration (see Table 2 ). To some, these factors entail a more nuanced evaluation of major disaster requests by assessing both damages and state and local resources. However, it appears that the per capita threshold is still being applied to determine the "amount and type of damages caused by the incident." If that is the case, per capita damages may still figure more prominently than other factorsâsuch as local impactsâwhen making major disaster declaration recommendations to the President. Section 1219: Right of Arbitration196 DRRA Section 1219 amends Stafford Act Section 423âAppeals of Assistance Decisions to add a right of arbitration. Per Stafford Act Section 423, applicants for assistance have the right to appeal decisions regarding "eligibility for, from, or amount of assistance" within 60 days after receiving notification of award or denial of award. FEMA then has to render a decision within 90 days of receiving a notice of appeal. Prior to DRRA, the appeal process outlined in the Stafford Act only provided a way for FEMA to review its own decisions, and did not include a way for applicants to bring claims before an independent arbiter. The need for arbitration, however, was recognized by Congress following Hurricanes Katrina and Rita, which made landfall in 2005, due to disputes that arose from public assistance payments under Stafford Act Sections 403âEssential Assistance, 406âRepair, Restoration, and Replacement of Damaged Facilities, and 407âDebris Removal. Post-Hurricanes Katrina and Rita, the arbitration process was established pursuant to the authority granted under Section 601 of the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 ). Notwithstanding any other provision of law, the President shall establish an arbitration panel under the Federal Emergency Management Agency public assistance program to expedite the recovery efforts from Hurricanes Katrina and Rita within the Gulf Coast Region. The arbitration panel shall have sufficient authority regarding the award or denial of disputed public assistance applications for covered hurricane damage under section 403, 406, or 407 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170b, 5172, or 5173) for a project the total amount of which is more than $500,000. FEMA's public assistance appeal process remains in effect following DRRA's enactment. In addition, post-DRRA a right of arbitration has been added to Stafford Act Section 423 under the authority granted under ARRA Section 601. Applicants, which are states in the context of this section, may request arbitration in order to "dispute the eligibility for assistance or repayment of assistance provided for a dispute of more than $500,000 for any disaster that occurred after January 1, 2016." (Applicants in rural areas are eligible to pursue arbitration if the amount of assistance is $100,000. ) FEMA's Public Assistance Appeals and Arbitration Under the Disaster Recovery Reform Act fact sheet notes that applicants may file a second appeal or request arbitration pursuant to Section 423(d) either (1) within 60 days after receipt of the first appeal decision (if the decision is not appealed or arbitration is not requested, then the first level appeal decision becomes the final agency determination and the applicant no longer has a right to appeal or arbitrate); or (2) at any time after 180 days of filing a first level appeal if the applicant has not received a decision from the agencyâin which case they may withdraw the first level appeal and request Section 423 arbitration. In the event an applicant requests arbitration, the Civilian Board of Contract Appeals (CBCA) will conduct the arbitration, and their decision shall be binding. FEMA has stated that the Agency intends to "initiate rulemaking to implement Section 423 arbitration and revise 44 C.F.R. Â§206.206," including amending regulations that provide for only a first and second level appeal process. In the interim, FEMA has stated that it will rely on the Public Assistance Appeals and Arbitration Under the Disaster Recovery Reform Act fact sheet and the CBCA's Interim Fact Sheet . The CBCA published proposed rules of procedure to implement Section 423 arbitration in the Federal Register on March 5, 2019. Additionally, while new regulations are being promulgated, FEMA will provide information on how applicants may request either a second level appeal or arbitration when FEMA provides first level appeal denials for disputes arising from declarations for disasters occurring after January 1, 2016. There is disagreement regarding whether the arbitration process expedites dispute resolution. The House Transportation and Infrastructure Committee's DRRA Report states that the CBCA panel provides a faster resolution, citing that arbitration was used as a tool for resolving disputes following both Hurricanes Katrina and Sandy to facilitate recovery. FEMA, however, in an earlier version of its Public Assistance Arbitration fact sheet stated that the arbitration process often takes years to arrive at a resolution. This may be, in part, because of the process requiredâsome steps may take multiple weeks or months to completeâwhich includes: a first level appeal; the applicant opting into arbitration; submission of responses; the selection of the arbitration panel; the preliminary conference; the hearing and any follow-up; and the panel's rendering of the final decision. The length of the arbitration process may depend on the complexity of the disputed project and its associated costs for which the applicant is seeking an award of assistance. Additionally, the arbitration process may be costly as there are fees associated with the panel, experts, attorney's fees, and other fees, which are the responsibility of the parties, including both the applicant and FEMA. According to the Senate HSGAC's DRRA Report , the Congressional Budget Office (CBO) estimates that "implementing this provision would cost $4 million over the 2019-2023 period" based on information provided by FEMA on the expected number of arbitration requests. It is unclear, however, whether the evaluation of the cost of implementing this provision included considerations such as the individual cost of the project being arbitrated, the complexity of the project, and the nature of the dispute. Congress may consider tasking the Comptroller General of the United States with conducting a review of the arbitration process to evaluate its effectiveness, including whether arbitration expedites the disaster recovery process and if it is cost effective. Congress may also consider ways to improve the process's efficiency and effectiveness, if warranted based on the results of any such program evaluation. Section 1218: National Veterinary Emergency Teams219 DRRA Section 1218 authorizes, but does not require, that the FEMA Administrator establish one or more national veterinary emergency teams at accredited colleges of veterinary medicine. Such a team(s) shall (1) deploy with Urban Search and Rescue (US&R) response teams to care for canine search teams, companion animals, service animals, livestock, and other animals; (2) recruit, train, and certify veterinary professionals, including veterinary students, regarding emergency response; (3) assist state governments, Indian tribal governments, local governments, and nonprofit organizations in emergency planning for animal rescue and care; and (4) coordinate with other federal, state, local, and Indian tribal governments, veterinary and health care professionals, and volunteers. Veterinary professionals serve in several emergency support capacitiesâaiding in agriculture emergencies by controlling diseases in domestic animals; protecting natural resources by addressing wildlife health impacts; assisting with various emergency public health efforts, such as assuring food safety; and furnishing care to working animals such as search and rescue canines and service animals. Several pre-existing authorities address veterinary support in emergencies in different contexts. The Stafford Act does not specifically mention veterinary services. However, among the work and services authorized for essential assistance is "provision of rescue, care, shelter, and essential needsâ(i) to individuals with household pets and service animals; and (ii) to such pets and animals," which could include veterinary services. In addition, the Stafford Act requires state and local recipients of emergency preparedness planning grants to address the needs of individuals with household pets and service animals in their emergency preparedness plans. The federal department principally responsible for coordinating veterinary support in emergencies often depends upon the principal work performed, in particular whether it involves public health or animal health. Authority for the National Disaster Medical System (NDMS), an operational emergency response asset of the U.S. Department of Health and Human Services (HHS), does not expressly list which health professionals shall constitute NDMS teams. Rather, it states that the system is intended to "provide health services, health-related social services, other appropriate human services, and appropriate auxiliary services to respond to the needs of victims of a public health emergencyâ¦." NDMS currently supports veterinary response teams. Another HHS asset, the Commissioned Corps of the U.S. Public Health Service (USPHS), supports a veterinary professional category. The U.S. Department of Agriculture (USDA) Animal and Plant Health Inspection Service (APHIS) maintains capacity to respond to animal health emergencies affecting domestic livestock and poultry. Section 1229: Extension of Assistance226 DRRA Section 1229 retroactively extended Disaster Unemployment Assistance (DUA). When the President declares a major disaster, individuals who would typically be ineligible for Unemployment Compensation (UC) may be eligible for DUA. After the disaster declaration, the DUA benefits are available to eligible individuals as long as the major disaster continues, for a period of up to 26 weeks. In some cases, UC beneficiaries who had an entitlement to UC benefits of fewer than 26 weeks and who became unemployed as a direct result of a disaster and exhausted their weeks of UC entitlement may be entitled to some DUA benefits. No more than a total of 26 weeks of total benefits (UC plus DUA) are allowable in this situation. The maximum number of available weeks of DUA has been temporarily extended three times, most recently by DRRA. DRRA Section 1229 retroactively extended DUA for an additional 26 weeks for persons who were unemployed in Puerto Rico and the U.S. Virgin Islands as a direct result of the 2017 Hurricane Irma or Hurricane Maria disasters. (This created a total potential entitlement to DUA of up to 52 weeks for some individuals.) Because the disasters had both been declared more than 52 weeks before DRRA's enactment, the remaining DUA weeks will be paid retroactively. Individuals who worked in these areas and exhausted entitlement to UC may be eligible for DUA benefits for any remaining uncompensated weeks, up to 52 weeks total (UC plus DUA). Section 1226: Inspector General Audit of FEMA Contracts for Tarps and Plastic Sheeting233 DRRA Section 1226 requires the DHS IG to audit the contracts that FEMA awarded for tarps and plastic sheeting for the Commonwealth of Puerto Rico and the U.S. Virgin Islands in response to Hurricanes Irma and Maria. Specifically, the DHS IG must review FEMA's contracting process for evaluating offerors and awarding contracts for tarps and plastic sheeting; FEMA's assessment of contractor past performance; FEMA's assessment of the contractors' capacity to carry out the contracts; how FEMA ensured contractors met the terms of the contracts; and whether the failure of contractors to meet the terms of the contracts, and FEMA's cancellation of the contracts affected the provision of tarps and plastic sheeting. In addition, the DHS IG must submit a report containing the audit's findings and recommendations to the House Transportation and Infrastructure Committee and Senate HSGAC no later than 270 days after the audit is initiated. According to the 2017 Hurricane Season FEMA After-Action Report , during Hurricanes Harvey and Irma response operations, FEMA exhausted its pre-negotiated contractsâincluding contracts to provide tarps. To meet the need for tarps in response to Hurricane Maria, FEMA awarded new contracts, reportedly awarding contracts to "entities that were assessed as technically acceptable and committed to meeting the requirements, in accordance with the provisions of the Federal Acquisition Regulation." FEMA stated that, overall, it "executed a successful acquisitions process, with the Agency canceling just three contracts." Included in the cancelled contracts were contracts for tarps and plastic sheeting. FEMA went on to state that, "[t]hese cancellations did not hinder FEMA's ability to deliver on its mission." However, FEMA later acknowledged that the issues with the contracts delayed the delivery of plastic tarps to Puerto Rico. The DHS IG audit requirement included in DRRA may have arisen from congressional concerns regarding FEMA's management of contracts for tarps and plastic sheeting during its 2017 hurricane season response operations. For example, a 2018 report issued by the minority staff of Senate HSGAC concluded that FEMA's acquisition strategy and process, including the use of pre-negotiated, advance contracts during the 2017 hurricane season, was not successful. The Senate HSGAC minority staff report identified several deficiencies in FEMA's contracting process, including that: FEMA did not adequately use prepositioned contracts and awarded new contracts before using prepositioned contracts; FEMA awarded contracts without adequate vetting, including $73 million for tarps and plastic sheeting to two contractors with no relevant past performance, and these contracts were cancelled due to the companies' failure to deliver; and FEMA's bid process did not ensure adequate competition, in part due to limited notice provided to prospective vendors and short timeframes for proposal submission. According to the Senate HSGAC minority staff report, the two contracts for tarps and plastic sheeting that were cancelled were intended to provide a total of 1.1 million tarps and 60 thousand rolls of plastic sheeting. The report also identified additional issues that delayed the delivery of tarps and plastic sheeting, such as other companies that were awarded contracts for tarps and plastic sheeting struggling to meet delivery timeframes, and other logistical issues, such as FEMA's exhausted inventory of commodities following Hurricanes Harvey and Irma, commodity delivery challenges (e.g., delivery truck and driver shortages), and shortages of contractors to perform repairs. The Chairman of the Senate Budget Committee, Senator Mike Enzi, also questioned how FEMA identified, vetted, and awarded contracts following Hurricane Maria, stating "[i]t appears that FEMA has not properly vetted some of the companies that receive contracts and therefore may have wasted millions of taxpayer dollars, while simultaneously denying services to citizens in need of them." Following Hurricane Katrina and the passage of the Post-Katrina Emergency Management Reform Act of 2006 ( P.L. 109-295 ), FEMA worked to maximize the use of advance contracts for goods and services; however, in a 2015 report, the GAO found deficiencies with FEMA's contracting guidance. This remains an issue; in the GAO's assessment of FEMA's 2017 advance contracting, it recommended that FEMA, among other things update its strategy for advance contracting, including defining objectives and how advance contracts should be prioritized in relation to new post-disaster contract awards; update the Disaster Contracting Desk Guide to include guidance for using advance contracts prior to making new post-disaster contract awards, and provide semi-annual training to contracting officers on said guidance; and update and implement existing guidance to identify acquisition planning timeframes and considerations. The GAO also stated that "an outdated strategy and lack of guidance to contracting officers resulted in confusion about whether and how to prioritize and use advance contracts to quickly mobilize resources in response to the three 2017 hurricanes.... " In May 2019, the DHS IG released a report concluding that FEMA should not have awarded two contracts to Bronze Star LLCâone for tarps and one for plastic sheeting. FEMA cancelled both contracts due to nondelivery. The findings of this audit, which are included in the DHS IG's report, FEMA Should Not Have Awarded Two Contracts to Bronze Star LLC , and accompanied by recommendations, may contribute to the audit and report requirements included in DRRA Section 1226. Depending on the DHS IG's findings, Congress may require FEMA to update its contracting strategy, as well as its policies and procedures related to prepositioning supplies and quickly ramping up procurement operations (i.e., using advance contracts and executing new contracts for commodities and services). FEMA's acquisition personnel may also benefit from additional guidance and training regarding advance contracting, including how to determine whether potential contractors have the capacity to successfully perform the requirements of the contract. Concluding Observations DRRA amends many sections of the Stafford Act, and establishes numerous reporting and rulemaking requirements. The implementation of DRRA includes "more than 50 provisions that require FEMA policy or regulation changes...." Thus, it could be argued that much of DRRA's implementation is at FEMA's discretion. Although FEMA is working on DRRA implementation, it is unclear at this time how FEMA will address many of DRRA's requirements and recommendations. Congress may oversee the implementation of DRRA through hearings or other inquiries to ensure that the post-DRRA changes to disaster assistance programs and policies fulfill congressional intent and the interests of Congress. Congress may also review the effectiveness and impacts of FEMA's DRRA-related regulations and policy guidance, including assessing the effects of DRRA-related changes to federal assistance for past and future disasters. Appendix A. Tables of Deadlines Associated with the Implementation Actions and Requirements of the Disaster Recovery Reform Act of 2018 In addition to numerous amendments to the Stafford Act, DRRA includes standalone authorities. DRRA requires reports to Congress, rulemaking/regulatory actions, and other actions to support disaster preparedness, and increase transparency and accountability with regard to FEMA. The following three tables of deadlines are associated with DRRA's reporting, rulemaking/regulatory, and other implementation actions and requirements: Table A-1 . DRRA Reporting Requirements (i.e., reports to Congress); Table A-2 . DRRA Rulemaking and Regulations Requirements; and Table A-3 . DRRA Guidance and Other Required Actions. The tables are organized by deadline for implementation in chronological order, and include: the relevant DRRA Section; referenced Stafford Act Section(s), if applicable; a brief description of the requirement; the entity responsible for accomplishing the requirement; the recipient of the information/action; the due date described in DRRA; and the deadline expressed as a calendar date. Some sections of DRRA include multiple implementation actions and requirements and, as such, are included in multiple tables and may appear multiple times. Additionally, some sections of DRRA do not specify the date by which the implementation action or requirement must be completed. For these sections, the due date and calendar deadline are listed as "N/A." Some sections of DRRA include requirements for ongoing actions (e.g., monthly reporting requirements). For these sections, the deadline is listed as "ongoing." Acronyms used in the tables are defined in the associated notes sections. Note that information included in the three tables of deadlines associated with DRRA implementation may be subject to change, and the following tables may not be up-to-date following the publication of this report. Appendix B. Acronym Table The following acronyms for entities, programs, and legislation are used throughout this report: Appendix C. Brief Legislative History DRRA includes provisions taken from numerous bills aimed at reforming aspects of FEMA. Some of these bills and the provisions incorporated into DRRA include: Disaster Recovery Reform Act ( H.R. 4460 , introduced) included many provisions duplicated or incorporated into DRRA with modifications; Disaster Recovery Reform Act of 2018 ( S. 3041 , introduced) included many provisions duplicated or incorporated into DRRA with modifications; Disaster Assistance Fairness and Accountability Act of 2017 ( H.R. 3176 , introduced) included the provision prohibiting the recoupment of certain assistance (incorporated into DRRA as Section 1216(b)âFlexibility); To amend the Robert T. Stafford Disaster Relief and Emergency Assistance Act concerning the statute of limitations for actions to recover disaster or emergency assistance payments, and for other purposes ( H.R. 1678 , passed House) amended the Stafford Act such that no administrative action to recover payments may be initiated after the date that is three years after the date of transmission of the final expenditure report for project completion as certified by the grantee (incorporated into DRRA as Section 1216(c)âFlexibility); Disaster Assistance Support for Communities and Homeowners Act of 2017 ( H.R. 1684 , passed House) included the provision requiring FEMA to provide technical assistance to a common interest community that provides essential services of a governmental nature on actions they may take to be eligible for reimbursement (incorporated into DRRA as Section 1230âGuidance and Recommendations); Community Empowerment for Mitigated Properties Act of 2017 ( H.R. 1735 , introduced) included a provision for the acquisition of property for open space as a mitigation measure (incorporated into DRRA as Section 1231âGuidance on Hazard Mitigation Assistance); Disaster Declaration Improvement Act ( H.R. 1665 , passed House) included the provision that the FEMA Administrator shall give greater weight and consideration to severe local impact or recent multiple disasters when recommending a major disaster declaration (incorporated into DRRA as Section 1232âLocal Impact); Pacific Northwest Earthquake Preparedness Act of 2017 ( H.R. 654 , passed House) included a provision on the use of mitigation assistance to reduce the risk and impacts of earthquake hazards (incorporated into DRRA as Section 1233âAdditional Hazard Mitigation Activities); Supporting Mitigation Activities and Resiliency Targets for Rebuilding Act, or SMART Rebuilding Act ( H.R. 4455 , introduced) included a provision on the National Public Infrastructure Pre-Disaster Hazard Mitigation Fund; however, it differed from DRRA Section 1234âNational Public Infrastructure Pre-Disaster Hazard Mitigation in that the SMART Rebuilding Act established the fund as a separate account, but DRRA allows for a set-aside from the Disaster Relief Fund. It also includes a provision allowing the President to contribute up to 75% of the cost of hazard mitigation measures determined to be cost effective and which substantially reduce risk or increase resilience (incorporated into DRRA as Section 1235âAdditional Mitigation Activities).	Summary:	gov_report	1,024	null	60
crs_R45798	crs_R45798_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Beneficial ownership refers to the natural person or persons who invest in, control, or otherwise reap gains from an asset, such as a bank account, real estate property, company, or trust. In some cases, an asset's beneficial owner may not be listed in public records or disclosed to federal authorities as the legal owner. For some years, the United States has been criticized by international bodies for gaps in the U.S. anti-money laundering (AML) system related to a lack of systematic beneficial ownership disclosure. While beneficial ownership information is relevant to several types of assets, attention has focused on the beneficial ownership of companies, and in particular, the use of so-called "shell companies" to anonymously purchase assets, such as real property, and to store and move money, including through bank accounts and wire transfers. While such companies may be created for a legitimate purpose, there are also concerns that the use of some of these companies can facilitate crimes, such as money laundering. Recent U.S. regulatory steps and legislation have particularly focused on beneficial ownership disclosure related to the use of shell companies with hidden owners that conduct financial transactions or purchase assets. In the context of AML regimes, law enforcement authorities as well as financial institutions and their regulators may seek beneficial ownership information to identify or verify the natural persons who benefit from or control financial assets held in the name of legal entities, such as corporations and limited liability companies. Drug traffickers, terrorist financiers, tax and sanctions evaders, corrupt government officials, and other criminals have been known to obscure their beneficial ownership of legal entities for money laundering purposes. To do so, they may form nominal legal entities, or "shell companies," which have no physical presence and generate little to no economic activity, but are used to anonymously store and transfer illicit proceeds. By relying on third-party nominees to serve as the legal owners of record for such shell companies, criminals can control and enjoy the benefits of the assets held by such companies while shielding their identities from investigators. Although concealing beneficial ownership has long been a central element of many money laundering schemes, many jurisdictions around the world have not established or implemented policy measures that address beneficial ownership disclosure and transparency. According to the Financial Action Task Force (FATF)âan intergovernmental standards-setting body for AML and countering the financing of terrorism (CFT)âfinancial crime investigations are frequently hampered by the absence of adequate, accurate, and timely information on beneficial ownership. FATF has accordingly identified beneficial ownership transparency as an enduring AML/CFT policy challenge. Some U.S. government agencies have also long recognized that the ability to create legal entities without accurate beneficial ownership information is a key vulnerability in the U.S. financial system. Such ongoing vulnerabilities have placed the United States under domestic and international pressure, including from the FATF, to tighten its AML/CFT regime with respect to beneficial ownership disclosure requirements. In recent years, various U.S. regulators have taken actions to address this issue, and congressional interest in this topic has increased. This report first provides selected case studies of high-profile situations where beneficial ownership has been obscured. It then provides an overview of beneficial ownership issues relating to corporate formation and in real estate transactions. Next, it describes the recent history of beneficial ownership policy and legislation. The report then discusses recent U.S. regulatory changes to address aspects of beneficial ownership transparency. Thereafter, the report analyzes selected current policy issues, including sectors not covered by existing Treasury regulations, the status of international efforts to address beneficial ownership, and the evolution of the Global Legal Entity Identifier (LEI) program. Finally, the report analyzes selected legislative proposals in the 116 th Congress. Overview Beneficial Ownership and U.S. Corporate Formation While beneficial ownership information is relevant to a variety of assets, recent policy attention has focused on the beneficial ownership of companies, and in particular, the use of shell companies to anonymously purchase assets, such as real property, and to store and move money, including through bank accounts and wire transfers. FATF has estimated that over 30 million "legal persons" exist in the United States, and about 2 million new such legal persons are created each year in the states and territories owned by the United States. FATF defines legal persons to include entities such as corporations, limited liability companies (LLCs), various forms of partnerships, foundations, and other entities that can own property and are treated as legal persons. FATF considers trusts, which share some of the same characteristics, to be "legal arrangements." FATF recommends that countries mandate some degree of transparency in identifying beneficial owners, at least for law enforcement and regulatory purposes, for legal persons and legal arrangements. There are a range of legitimate reasons for wanting to create such entities, including diversification of risk with joint owners, tax purposes, limiting liability, and other reasons. However, such legal persons and arrangements can also be used to hide the identities of owners of assets, thereby facilitating money laundering, corruption, and financial crime. For this reason, FATF recommends countries take steps to ensure that accurate and updated information on the identities of beneficial owners be maintained and accessible to authorities. In the United States, corporations, LLCs, and partnerships are formed at the state level, not the federal level. Corporation laws vary from state to state, and the "promoter" of the corporation can choose in which state to incorporate or in which to form another legal entity, often paying a "corporate formation agent" within the state to file the required state-level paperwork. Such corporate formation agents may be attorneys, but are not always required to be attorneys. While state laws vary, most states share some basic requirements for forming a corporation or other entity, including the filing of the entity's articles of incorporation with the secretary of state. These articles often include the corporation's name, the business purpose of the corporation, and the corporation's registered agent and address for the purpose of accepting legal service of process if it is sued. While state requirements vary, most states do not collect, verify, or update identifying information on beneficial owners. Because no federal standards currently exist, a promoter of a corporation can choose to incorporate in a state with fewer disclosure requirements if they wish. The FATF evaluation of the United States' AML system found that "measures to prevent or deter the misuse of legal persons and legal arrangements are generally inadequate" in the United States. FATF reported there were no mechanisms in place to record or verify beneficial ownership information in the states during corporate formation. They also warned that "the relative ease with which U.S. corporations can be established, their opaqueness and their perceived global credibility makes them attractive to abuse for money laundering and terrorism financing, domestically as well as internationally." In a Senate Judiciary Committee hearing on June 19, 2019, witness Adam Szubin, former Under Secretary for the Treasury's Office of Terrorism and Financial Intelligence, noted in the question-and-answer portion that the position of the United States as a leader in the financial system at times gave additional credibility to shell companies that had been formed in the United States anonymously by international criminals, enabling them to transact business or open bank accounts outside the United States through these companies with less scrutiny than they might otherwise have received. Beneficial Ownership and U.S. Real Estate Overview of Real Estate Transactions Some argue that land ownership, even more than ownership of other resources, involves both public and private aspectsâsuch as urban planning, resources and environmental planning, and tax consequences. In the United States, however, unlike in many European countries, the federal government has almost no role in the purchase and sale of real estate. Real estate transactions in the United States are largely private contracts, and transfers may or may not be recorded publicly, although many buyers find it advantageous to do so. Most buyers of property finance their purchases with mortgages from banks. Investors or those who do not require such loans may engage in "all-cash" purchases, which simply means that no loans are involved and that the purchasers must come up with the necessary funds on their own. According to the National Association of REALTORSÂ®, approximately 23% of residential real estate sales transactions were all-cash in 2017. Data from real estate data firm CoreLogic for 2016, however, put the figure at 46% for New York state, and similarly higher for some additional states. In addition to realtors, who may represent buyers or sellers (but are not required to be involved in transactions), escrow agents and title company agents also play a role in real estate transactions in the United States. Escrow agents essentially act as neutral middlemen in real estate sales, temporarily holding funds for either side. In cases where purchases are made in the name of an LLC, for instance, an escrow agent will look at operating agreements of the LLC to identify the person legally authorized to sign documents, but they generally have no specific duties to locate or identify beneficial owners. Usually, escrow agents are not part of title insurance companies or independent title agencies. After a buyer and seller agree on a sales price and sign a purchase and sales contract, real estate transactions are transferred to a land title company, most likely the American Land Title Association (ALTA). ALTA represents 6,300 title insurance agents and companies, from small, single-county operators to large national title insurers. Title insurance is a form of insurance that protects the holder from financial loss if there are previously undiscovered defects in a title to a property (such as previously undiscovered fraud or forgery, or various other situations). A typical title insurance company, before providing coverage to the buyer of a property, usually investigates prior sales of the property. This process often starts with examining public records tracing the property's history, its owners, sales, and any partial property rights that may have been given away. This title search investigation also normally includes tax and court records to give title companies an understanding of what they might be able to insure in their policies issued to buyers. Title insurers are the only professionals in the real estate community who currently have money laundering requirements, which were imposed through FinCEN's Geographic Targeting Orders (GTOs), as detailed below. As part of this process, when real estate transactions fit the thresholds set in GTOs for certain covered metropolitan areas, title insurance companies work with real estate professionals representing buyers to collect the required beneficial ownership information. Money Laundering Risks Through Real Estate and Shell Companies The FATF 2016 evaluation warned that the lack of AML requirements on real estate professionals constituted a significant vulnerability for the United States' AML system. As detailed below, FinCEN exempted the real estate sector from AML requirements pursuant to the USA PATRIOT Act of 2001 ( P.L. 107-56 ). In a 2015 study of the New York luxury property market, the New York Times found that LLCs with anonymous owners were being increasingly utilized in the New York luxury property market. The Times reported that in 2003, for example, one-third of the units sold in one high-end Manhattan buildingâthe Time Warner buildingâwere purchased by shell companies. By 2014, however, that figure had risen to over 80%, according to the article. And nationwide, the Times reported, nearly half of residential purchases of over $5 million were made by shell companies rather than named people, according to data from property data provider First American Data Tree studied by the Times . According to FinCEN, in 2017, 30% of all high-end purchases in six geographic areas involved a beneficial owner or purchaser representative who was also the subject of a previous suspicious activity report (SAR). A 2017 study by the U.S. Government Accountability Office (GAO) reviewed available information on the ownership of General Services Administration (GSA) leased space that required higher levels of security as of March 2016, and found that GSA was leasing high-security space from foreign owners in 20 buildings. GAO could not obtain the beneficial owners of 36% of those buildings for high-security facilities leased by the federal government, including by the Federal Bureau of Investigation. The Appendix provides an example of how an LLC with hidden owners might be used to purchase real estate in the United States with minimal information as to the natural persons behind the purchase or sale of the property. U.S. Policy Responses History of U.S. Beneficial Ownership Policy and Legislation As previously noted, the U.S. government has long recognized the ability to create legal entities without accurate beneficial ownership information as a key vulnerability of the U.S. financial system. In 2006, GAO published a report entitled Company Formations: Minimal Ownership Information Is Collected and Available , which described the challenges of collecting beneficial owner data at the state level. The U.S. Department of the Treasury's 2015 National Money Laundering Risk Assessment and its 2018 update identify the misuse of legal entities as a key vulnerability in the banking and securities sectors. The 2018 risk assessment additionally clarified that such vulnerability is further compounded by shell companies' ability to transfer funds to other overseas entities. Such ongoing vulnerabilities have placed the United States under domestic and international pressure, including from FATF, to tighten its AML/CFT regime with respect to beneficial ownership disclosure requirements. In its 2016 review of the U.S. government's AML/CFT regime, FATF noted that the "lack of timely access to â¦ beneficial ownership information remains one of the most fundamental gaps in the U.S. context." According to FATF, this gap exacerbates U.S. vulnerability to money laundering by preventing law enforcement from efficiently obtaining such information during the course of investigations. FATF further noted that this gap in the U.S. AML/CFT regime limits U.S. law enforcement's ability to respond to foreign mutual legal assistance requests for beneficial ownership information. By contrast, for instance, the European Union (E.U.), in 2015, enacted the E.U. Fourth Anti-Money Laundering Directive, which required member states to collect and share beneficial ownership information. Since at least the 110 th Congress, legislation has been introduced to address long-standing concerns raised by law enforcement, FATF, and other observers over the lack of beneficial ownership disclosure requirements. For example, in the 110 th Congress, Senator Carl Levin introduced S. 2956 , the Incorporation Transparency and Law Enforcement Assistance Act, on May 1, 2008. In his floor statement introducing the bill, Senator Levin noted that the National Association of Secretaries of State (NASS) had requested that he delay introduction of a bill in order for the NASS to first convene a task force in 2007 to examine state company formation practices. In July 2007, the NASS task force issued a proposal. Rather than cure the problem, however, the proposal was full of deficiencies, leading the Treasury Department to state in a letter that the NASS proposal "falls short" and "does not fully address the problem of legal entities masking the identity of criminals." â¦. That is why we are introducing Federal legislation today. Federal legislation is needed to level the playing field among the States, set minimum standards for obtaining beneficial ownership information, put an end to the practice of States forming millions of legal entities each year without knowing who is behind them, and bring the U.S. into compliance with its international commitments. The 115 th Congress considered a number of bills concerning beneficial ownership reporting, including S. 1454 , the True Incorporation Transparency for Law Enforcement (TITLE) Act and the Corporate Transparency Act of 2017 ( H.R. 3089 and S. 1717 ). In the 116 th Congress, the House Committee on Financial Services on June 11, 2019, passed and ordered to be reported to the House an amendment in the nature of a substitute to H.R. 2513 , the "Corporate Transparency Act of 2019," introduced by Representative Maloney. Also, in the Senate, S. 1889 was introduced on June 19, 2019, by Senator Whitehouse with cosponsors, and a discussion draft bill was circulated June 10, 2019, by Senators Warner and Cotton. This report concludes with an analysis of selected introduced legislative proposals in the 116 th Congress. Current Beneficial Ownership Requirements Several federal tools are available to address money laundering risks posed by entities that obscure beneficial ownership information, including Treasury's Customer Due Diligence (CDD) rule, use of Geographic Targeting Orders (GTOs), and a provision in Section 311 of the USA PATRIOT Act. Treasury also uses various elements of its economic sanctions programs to address such risks. Finally, with regard to international cooperation, the U.S. government may obtain and share beneficial ownership information with foreign governments in the course of law enforcement investigations (see text box below). In other policy contexts that reach beyond money laundering issues, beneficial ownership has emerged as a concern related to entities' disclosure of U.S. ownership for tax purposes and entities that lease high-security government office spaces. Beneficial ownership issues are also relevant in other areas, such as securities, which are beyond the scope of this report. Treasury's Customer Due Diligence (CDD) Rule Pursuant to its regulatory authority under the Bank Secrecy Act (BSA) âthe principal federal AML statuteâFinCEN has long administered regulations requiring various types of financial institutions to establish AML programs. The centerpiece of FinCEN's response to concerns about beneficial ownership transparency is its Customer Due Diligence Rule (CDD Rule), which went into effect in May 2018. Under the CDD Rule, certain U.S. financial institutions must establish and maintain procedures to identify and verify the beneficial owners of legal entities that open new accounts. The regulation covers financial institutions that are required to develop AML programs, including banks, securities brokers and dealers, mutual funds, futures commission merchants, and commodities brokers. Under the rule, covered financial institutions must now collect certain identifying information on individuals who own 25% or more of legal entities that open new accounts. The CDD Rule also requires covered financial institutions to develop customer risk profiles and to update customer information on a risk basis for the purposes of ongoing monitoring and suspicious transaction reporting. These requirements make explicit what has been an implicit component of BSA and AML compliance programs. Geographic Targeting Orders (GTOs) FinCEN has the authority to impose additional recordkeeping and reporting requirements on domestic financial institutions and nonfinancial businesses in a particular geographic area in order to assist regulators and law enforcement agencies in identifying criminal activity. This authority to impose so-called "Geographic Targeting Orders" (GTOs) dates back to 1988. GTOs may remain in effect for a maximum of 180 days unless extended by FinCEN. Section 274 of the Countering America's Adversaries Through Sanctions Act ( P.L. 115-44 ) replaced statutory language referring to coins and currency with "funds," thereby including a broader range of financial services, such as wire transfers. Several bills in the 116 th Congress seek to address the use of GTOs to disclose the beneficial owners of entities involved in the purchase of all-cash real estate transactions (see text box below). Special Measures Applied to Jurisdictions, Financial Institutions, Classes of Transactions, or Types of Accounts of Primary Money Laundering Concern Section 311 of the USA PATRIOT Act ( P.L. 107-56 ) added a new provision to the Bank Secrecy Act at 31 U.S.C. Â§5318A. This provision, popularly referred to as "Section 311," authorizes the Secretary of the Treasury to impose regulatory restrictions, known as "special measures," upon finding that a foreign jurisdiction, a financial institution outside the United States, a class of transactions involving a foreign jurisdiction, or a type of account, is "of primary money laundering concern." The statute outlines five special measures that Treasury may impose to address money laundering concerns. The second special measure authorizes the Secretary to require domestic financial institutions and agencies to take reasonable and practicable steps to collect beneficial ownership information associated with accounts opened or maintained in the United States by a foreign person (other than a foreign entity whose shares are subject to public reporting requirements or are listed and traded on a regulated exchange or trading market), or a representative of such a foreign person, involving a foreign jurisdiction, a financial institution outside the United States, a class of transactions involving a jurisdiction outside the United States, or a type of account "of primary money laundering concern." Based on a review of Federal Register notices, FinCEN has neither proposed nor imposed the special measure involving the collection of beneficial ownership information. Treasury's Sanctions Programs and the 50% Rule Affecting Entities Owned by Sanctioned Persons Beneficial ownership information is valuable in the context of economic sanctions administered by the Treasury Department's Office of Foreign Assets Control (OFAC). Under economic sanctions programs, assets of designated persons (i.e., individuals or entities) may be blocked (i.e., frozen), thereby prohibiting transfers, transactions, or dealings of any kind, extending to property and interests in property subject to the jurisdiction of the United States as specified in OFAC's specific regulations. As additional persons, including shell and front companies, are discovered to be associated (i.e., owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly) with someone already subject to sanctions, OFAC may choose to designate those additional persons to be subject to sanctions. In addition to persons explicitly identified on OFAC's Specially Designated Nationals (SDN) or Sectoral Sanctions Identification (SSI) lists, sanctions also apply to nonlisted entities that are owned, in part, by blocked persons. Current guidance states that sanctions also extend to entities that are at least 50% owned by sanctioned persons. Compliance with this so-called "50% Rule" requires financial institutions and others potentially doing business with designated persons or identified sectoral entities to understand an entity's ownership structure, including its beneficial owners. Disclosure of "Substantial" U.S. Ownership for Tax Purposes The Foreign Account Tax Compliance Act (FATCA; Subtitle A of Title V of the Hiring Incentives to Restore Employment Act; P.L. 111-147 , as amended) is a key U.S. policy tool to combat tax evasion. Pursuant to FATCA, U.S. taxpayers are required to disclose to the Internal Revenue Service (IRS) financial assets held overseas. In addition, FATCA requires certain foreign financial institutions to disclose information directly to the IRS when its customers are U.S. persons or when U.S. persons hold a "substantial" ownership interestâdefined to mean ownership, directly or indirectly, of more than 10% of the stock (by vote or value) of a foreign corporation or of the interests (in terms of profits or capital) of a foreign partnership; or, in the case of a trust, the owner of any portion of it or the holder, directly or indirectly, of more than 10% of its beneficial interest. Foreign financial institutions that do not comply with reporting requirements are subject to a 30% withholding tax rate on U.S.-sourced payments. According to FinCEN, some intergovernmental agreements that the United States negotiated with other governments to facilitate the implementation of FATCA "allow foreign financial institutions to rely on existing AML practices â¦ for the purposes of determining whether certain legal entity customers are controlled by U.S. persons." The U.S. government committed in many of these agreements to pursue "equivalent levels of reciprocal automatic information exchange" on the U.S. financial accounts held by taxpayers of that foreign jurisdiction; there is, however, no reciprocity in FATCA. Various observers have debated whether legal entity ownership disclosure information provided to the IRS could be used by other federal entities for AML purposes. Disclosure of Beneficial Ownership of Office Space Leased by the FederalÂ Government Section 2876 of the National Defense Authorization Act for Fiscal Year 2018 (NDAA; 10 U.S.C. 2661 note) requires the Defense Department to identify each beneficial owner of a covered entity proposing to lease accommodation in a building or other improvement that is intended to be used for high-security office space for a military department or defense agency. Prior to the enactment of Section 2876, in January 2017, the GAO reported that the General Services Administration (GSA) did not keep track of beneficial owners, including foreign owners, of high-security office space it leased for tenants that included the Federal Bureau of Investigation (FBI) and the Drug Enforcement Administration (DEA). According to GAO, GSA began in April 2018 to implement a new lease requirement for prospective lease projects that requires offerors to identify and disclose whether the owner of the leased space, including an entity involved in the financing of the property, is a foreign person or a foreign-owned entity. In the 116 th Congress, H.R. 392 , the Secure Government Buildings from Espionage Act of 2019, seeks to expand the scope of the FY2018 NDAA's provisions. Selected Policy Issues The current policy debate surrounding beneficial ownership disclosure is focused on addressing gaps in the U.S. AML regime and tracking changes made by the international community in its approach to addressing the problem. A key area of congressional activity involves evaluating the risks associated with lack of beneficial ownership information in the corporate formation and real estate sectors. The Treasury's current CDD rule mandates that financial institutions must collect informationâfor beneficial owners who hold more than 25% of an entityâupon opening an account for the entity. Some legislative proposals would mandate that this type of information be collected when such legal entities are formed, and that the information be reported to FinCEN or another central repository that authorities can access. International developments in beneficial ownership disclosure practices, including trends in the adoption of a program known as the Global Legal Entity Identifier System (LEI), also raise issues for U.S. policy consideration. Sectors Not Covered by Treasury's CDD Rule Even following the CDD rule's implementation, some critics argue that gaps remain in U.S. financial transparency requirements The CDD rule, for example, applies only to individuals who own 25% or more of a legal entity. Critics note that the 25% ownership threshold means that if five or more people share ownership, a legal entity may not name or identify any of them (only one management official). Also, the rule applies to new, but not existing, accounts. FATF, for example, has criticized the United States for lacking beneficial ownership requirements for corporate formation agents and real estate transactions. Neither sector is directly affected by the FinCEN rule, but recent legislation has been introduced to address both areas (see section below titled " Selected Legislative Proposals in the 116th Congress "). The following sections discuss potential gaps remaining in U.S. financial transparency requirements after implementation of the CDD rule. Company Formation Agent Transparency Third-party service providers known as "company formation agents" often "play a central role in the creation and ongoing maintenance and support of â¦ shell companies." While these services are not inherently illegitimate, they can help shield the identities of a company's beneficial owners from law enforcement. According to a 2016 FATF report, formation agents handle approximately half of the roughly 2 million new company formations undertaken annually in the United States. As discussed, the regulation of company formation agents is primarily a matter of state law. Formation agents are not subject to the BSA or federal AML regulations. However, observers have argued that states have not served as effective regulators of the company formation industry. These perceived inadequacies with current oversight of the company formation industry have prompted a number of legislative proposals discussed below. Status of the GTO Program A number of policymakers have expressed interest in making FinCEN's GTOs targeting money laundering in high-end real estate permanent or otherwise expanding the scope of the current real estate GTO program. Section 702 of the Defending American Security from Kremlin Aggression Act of 2019 ( S. 482 ) would require the Secretary of the Treasury to prescribe regulations mandating that title insurance companies report on the beneficial owners of entities that engage in certain transactions involving residential real estate. Section 214 of the COUNTER Act of 2019 ( H.R. 2514 ), as amended in a mark-up session of the House Financial Services Committee on May 8, 2019, would require the Secretary of the Treasury to apply the real estate GTOs, which currently cover only residential real estate, to commercial real estate transactions. Section 129 of the Department of the Treasury Appropriations Act, 2019 (Title I of H.R. 264 ) would have required FinCEN to submit a report to Congress on GTOs issued since 2016, but it was not enacted. Establishing AML Requirements for Persons Involved in Real Estate Closings and Settlements Section 352 of the USA PATRIOT Act ( P.L. 107-56 ) requires all financial institutions to establish AML programs. In 2002, however, FinCEN exempted from Section 352 certain financial institutions, including persons involved in real estate closings and settlements, in order to study the impact of AML requirements on the industry. In 2003, FinCEN published an advanced notice of proposed rulemaking (ANPRM) to solicit public comments on how to incorporate persons involved in real estate closings and settlements into the U.S. AML regulatory regime. Although no final rule has been issued, other developments have occurred. In 2017, FinCEN released a public advisory on the money laundering risks in the real estate sector. And in November 2018 a notice in the Federal Register on anticipated regulatory actions contained reference to renewed FinCEN plans to issue an ANPRM to initiate rulemaking that would establish BSA requirements for persons involved in real estate closings and settlements. Disclosure of Beneficial Ownership of U.S.-Registered Aircraft To register an aircraft in the United States with the Federal Aviation Administration (FAA), applicants must certify their U.S. citizenship. Non-U.S. citizens may register aircraft under a trust agreement in which the aircraft's title is transferred to an American trustee (e.g., a U.S. bank). Investigations into the FAA's Civil Aviation Registry have revealed a lack of beneficial ownership transparency among aircraft registered through noncitizen trusts. Reports further indicate that drug traffickers, kleptocrats, and sanctions evaders have been among the operators of aircraft registered with the FAA through noncitizen trusts. Some Members of Congress have sought to address beneficial ownership transparency in the FAA's Civil Aviation Registry through legislation. If enacted, H.R. 393 , the Aircraft Ownership Transparency Act of 2019, would require the FAA to collect identifying information, including nationality, of the beneficial owners of certain entities, including trusts, applying to register aircraft in the United States. Status of International Efforts to Address Beneficial Ownership U.S. policymakers' interest in addressing beneficial ownership transparency has been elevated by a series of leaks to the media regarding the abuse of shell companies by money launderers, corrupt politicians, and other criminals, as well as sustained multilateral attention to the issue. In late 2018, information from such leaks reportedly contributed to a raid by German authorities on Deutsche Bank, one of the world's largest banks. Other major banks have become enmeshed in money laundering scandals involving the abuse of accounts associated with shell companies, including Danske Bank, Denmark's largest bank. The international community has taken steps to acknowledge and address the issue of a lack of beneficial ownership transparency in the context of anti-money laundering efforts. Some countries, including the United Kingdom, have created a public register that provides the beneficial owners of companiesâand more countries have committed or are planning to do so. In April 2018, the European Parliament voted to adopt the European Commission's proposed Fifth Anti-Money Laundering (AML) Directive, which among other measures would require European Union member states to maintain public national-level registers of beneficial ownership information for certain types of legal entities. The European Commission has also sought to identify third-country jurisdictions with "strategic deficiencies" in their national AML/CFT regimes, which pose "significant threats" to the EU's financial system. To this end, the Commission has identified eight criteria or "building blocks" for assessing third countriesâone of which is the "availability of accurate and timely information of the beneficial ownership of legal persons and arrangements to competent authorities." In February 2019, the Commission released a proposed list of third countries with strategic AML/CFT deficiencies that included four U.S. territories: American Samoa, Guam, Puerto Rico, and the U.S. Virgin Islands. A key criticism of the U.S. territories' AML/CFT regime was the lack of beneficial ownership disclosure requirements. Evolution of the Global Legal Entity Identifier (LEI) Program The origins of the LEI system lay in some of the problems highlighted in the 2008 financial crisis. These included excessive opacity as to credit risks, and to potential losses accrued across various affiliates of large financial conglomerates. For example, when Lehman Brothers failed in 2008, financial regulators and market participants found it difficult to gauge their financial trading counterparties' exposure to Lehman's large number of subsidiaries and legal entities, domestically and overseas. Partly to better track such exposures, the Financial Stability Board (FSB) and G-20 helped to design and create the concept of the LEI system, starting in 2009. LEI is a voluntary international program that assigns each separate "legal entity" participating in the program a unique 20-digit identifying number. This number can be used across jurisdictions to identify a legally distinct entity engaged in a financial transaction, including a cross-border financial transaction, making it especially useful in today's globally interconnected financial system. The unique identifying number acts as a reference codeâmuch like a bar code, which can be used globally, across different types of markets and for a wide range of financial purposes. These would include, for example, capital markets and derivatives transactions, commercial lending, and customer ownership, due diligence, and financial transparency purposes; as well as risk management purposes for large conglomerates that may have hundreds or thousands of subsidiaries and affiliates to track. A large international bank, for example, may have an LEI identifying the parent entity plus an LEI for each of its legal entities that buy or sell stocks, bonds, swaps, or engage in other financial market transactions. The LEI was designed to enable risk managers and regulators to identify parties to financial transactions instantly and precisely. Although the origins of the LEI stemmed from concerns over credit risk and safety and soundness that surfaced during the 2008 financial crisis, the LEI may also have benefits for financial transparency. A May 2018 study from the Global Legal Entity Foundation found, based on multiple interviews with financial market companies, that the lack of consistent, reliable automated identifiers was creating a great burden on the financial industry; that most in the industry believed the "Know Your Customer" process of onboarding new clients would likely become more automated; and that "there is clearly an opportunity to align on one identifier to generate efficiencies." Similar conclusions were reached in a 2017 study by McKinsey & Co. The current LEI system is aimed more at tracking financial transactions of various affiliates, but creating a unified global identifier could be considered a natural first step toward more easily tracking ownership of affiliates as well. Worldwide, more than 700,000 LEIs have been issued to entities in over 180 countries as of November 2017; however, use of the LEI remains largely voluntary as opposed to legally mandatory. In the United States and abroad, some aspects of financial reporting require use of the LEI and these, in substantial part, rely on voluntary implementation. Some have called the lack of broader adoption of a common legal identifier a collective action problem. In a collective action problem, all participants in a system benefit if everyone participates; if only a few participate, those few bear high costs, as early adopters, with little benefit. Collective action problems are classic examples of situations where a government-organized solution may improve outcomes. Similarly, some argue that all parties would benefit if such LEIs were uniformly assigned, but there is no incentive to be a sole or early adopter. Academics have urged regulators to mandate the use of the LEI in regulatory reporting as a means of solving this collective action problem. Treasury's Office of Financial Research noted, "Universal adoption is necessary to bring efficiencies to reporting entities and useful information to the Financial Stability Oversight Council, its member agencies, and other policymakers." Selected Legislative Proposals in the 116th Congress112 In response to some of the issues discussed above, a number of lawmakers have introduced legislation that would require the collection of beneficial ownership information for both newly formed and existing legal entities. The subsections below discuss two of these proposals in the 116 th Congress. H.R. 2513, Corporate Transparency Act of 2019 In June 2019, the House Committee on Financial Services approved legislation that would require many small corporations and LLCs to report their beneficial owners to the federal government. Under H.R. 2513 , the Corporate Transparency Act of 2019, newly formed corporations and LLCs would be required to report certain identifying information concerning their beneficial owners to FinCEN and annually update that information. The bill would also impose these reporting requirements on existing corporations and LLCs two years after FinCEN adopts final regulations to implement the legislation. Subject to certain exceptions, the bill defines the term beneficial owner to mean natural persons who "directly or indirectly" exercise "substantial control" over a corporation or LLC; own 25% or more of the equity of a corporation or LLC; or receive "substantial economic benefits" from a corporation or LLC. H.R. 2513 's reporting requirements are limited to small corporations and LLCs. Specifically, the bill exempts a variety of regulated entities from its reporting requirements, in addition to any company that (1) employs more than 20 full-time employees, (2) files income tax returns reflecting more than $5 million in gross receipts, and (3) has an operating presence at a physical office within the United States. The bill would also authorize FinCEN to promulgate a number of rules. First, H.R. 2513 would allow FinCEN to adopt a rule requiring covered corporations and LLCs to report changes in their beneficial ownership sooner than the annual update required by the legislation itself. Second, the bill would direct the Treasury Secretary to promulgate a rule clarifying the circumstances in which an individual receives "substantial economic benefits" from a corporation or LLC for purposes of its definition of beneficial owner . Third, the legislation would require FinCEN to revise the CDD Rule within one year of the bill's enactment in order to bring the rule "into conformance" with the bill's requirements and reduce any "unnecessary" burdens on financial institutions. Finally, H.R. 2513 would impose civil and criminal penalties on persons who knowingly provide FinCEN with false beneficial ownership information or willfully fail to provide complete or updated information. S. 1889, True Incorporation Transparency for Law Enforcement (TITLE) Act In June 2019, Senator Sheldon Whitehouse introduced legislation that would require states receiving funds under the Omnibus Crime Control and Safe Streets Act of 1968 to adopt transparent incorporation systems within three years of the bill's enactment. Specifically, S. 1889 , the True Incorporation Transparency for Law Enforcement (TITLE) Act, would mandate that transparent incorporation systems require newly formed corporations and LLCs to report certain identifying information concerning their beneficial owners to their states of incorporation. Under the bill, a compliant formation system would also require corporations and LLCs to report changes in their beneficial ownership within 60 days. These requirements would apply to existing corporations and LLCs two years after a state's adoption of a compliant formation system. Subject to certain exceptions, S. 1889 defines the term beneficial owner to mean natural persons who "directly or indirectly" (1) exercise "substantial control" over a corporation or LLC, or (2) have a "substantial interest" in or receive "substantial economic benefits" from a corporation or LLC. Like H.R. 2513 , S. 1889 's requirements would be limited to small corporations and LLCs. Specifically, S. 1889 would allow states to exempt various regulated entities, in addition to any company that (1) employs more than 20 full-time employees, (2) files income tax returns reflecting more than $5 million in gross receipts, (3) has an operating presence at a physical office within the United States, and (4) has more than 100 shareholders. The bill would also impose civil and criminal penalties on persons who knowingly provide states with false beneficial ownership information or willfully fail to provide complete or updated information. Finally, S. 1889 would amend the BSA to include "any person engaged in the business of forming corporations or [LLCs]" in its definition of a regulated "financial institution," and would direct FinCEN to issue a proposed rule requiring such persons to establish AML programs. Appendix. Hypothetical Example of Shell Companies Obscuring U.S. Property Sale Figure A-1 demonstrates hypothetically how hidden foreign or U.S. buyers might purchase real estate in the United States with minimal disclosure of their identities as hidden beneficial owners. First, foreign or U.S. individuals might establish a foreign-incorporated LLC, subject to that foreign jurisdiction's laws, which could present particular challenges to a U.S. law enforcement agency seeking to investigate the purchase. Alternately, foreign or U.S. individuals could create a U.S. LLC incorporated in a U.S. state with only a "registered agent" required to be disclosed under various states' laws. A foreign LLC might pay for the property through a wire transfer from a foreign bank account. If the foreign LLC or the U.S. LLC were to open a U.S. bank account to pay for the purchase, then, if this were a new account opened since May 2018, the U.S.-regulated bank would look for beneficial owners owning more than 25% of the LLC, and keep records of that information. Currently, however, that information would not be reported to FinCEN automatically, and law enforcement would most likely require a subpoena to procure that information from the bank's records. To create additional layers that could obscure the actual buyers of the property, the LLC, whether U.S. or foreign, could route the payment to the title company, which handles the real estate closing, through a law firm. Payments and wire transfers routed through law firms present an extra layer of information a prosecutor or law enforcement agent must go through to try to obtain details of individuals who own the LLC and are purchasing a property. Often the U.S. attorney-client privilege can make it more difficult to exercise this subpoena authority, without at least the possibility that a legal challenge may arise. Finally, the payment is routed to the title company, which processes the property sale and distributes payment, normally to the seller's account. If the seller obscures his or her identity through an LLC as well, natural persons involved on both sides of the transfer may be hidden. Summary:	null	96	47,224	47,226	47,226	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Beneficial ownership refers to the natural person or persons who invest in, control, or otherwise reap gains from an asset, such as a bank account, real estate property, company, or trust. In some cases, an asset's beneficial owner may not be listed in public records or disclosed to federal authorities as the legal owner. For some years, the United States has been criticized by international bodies for gaps in the U.S. anti-money laundering (AML) system related to a lack of systematic beneficial ownership disclosure. While beneficial ownership information is relevant to several types of assets, attention has focused on the beneficial ownership of companies, and in particular, the use of so-called "shell companies" to anonymously purchase assets, such as real property, and to store and move money, including through bank accounts and wire transfers. While such companies may be created for a legitimate purpose, there are also concerns that the use of some of these companies can facilitate crimes, such as money laundering. Recent U.S. regulatory steps and legislation have particularly focused on beneficial ownership disclosure related to the use of shell companies with hidden owners that conduct financial transactions or purchase assets. In the context of AML regimes, law enforcement authorities as well as financial institutions and their regulators may seek beneficial ownership information to identify or verify the natural persons who benefit from or control financial assets held in the name of legal entities, such as corporations and limited liability companies. Drug traffickers, terrorist financiers, tax and sanctions evaders, corrupt government officials, and other criminals have been known to obscure their beneficial ownership of legal entities for money laundering purposes. To do so, they may form nominal legal entities, or "shell companies," which have no physical presence and generate little to no economic activity, but are used to anonymously store and transfer illicit proceeds. By relying on third-party nominees to serve as the legal owners of record for such shell companies, criminals can control and enjoy the benefits of the assets held by such companies while shielding their identities from investigators. Although concealing beneficial ownership has long been a central element of many money laundering schemes, many jurisdictions around the world have not established or implemented policy measures that address beneficial ownership disclosure and transparency. According to the Financial Action Task Force (FATF)âan intergovernmental standards-setting body for AML and countering the financing of terrorism (CFT)âfinancial crime investigations are frequently hampered by the absence of adequate, accurate, and timely information on beneficial ownership. FATF has accordingly identified beneficial ownership transparency as an enduring AML/CFT policy challenge. Some U.S. government agencies have also long recognized that the ability to create legal entities without accurate beneficial ownership information is a key vulnerability in the U.S. financial system. Such ongoing vulnerabilities have placed the United States under domestic and international pressure, including from the FATF, to tighten its AML/CFT regime with respect to beneficial ownership disclosure requirements. In recent years, various U.S. regulators have taken actions to address this issue, and congressional interest in this topic has increased. This report first provides selected case studies of high-profile situations where beneficial ownership has been obscured. It then provides an overview of beneficial ownership issues relating to corporate formation and in real estate transactions. Next, it describes the recent history of beneficial ownership policy and legislation. The report then discusses recent U.S. regulatory changes to address aspects of beneficial ownership transparency. Thereafter, the report analyzes selected current policy issues, including sectors not covered by existing Treasury regulations, the status of international efforts to address beneficial ownership, and the evolution of the Global Legal Entity Identifier (LEI) program. Finally, the report analyzes selected legislative proposals in the 116 th Congress. Overview Beneficial Ownership and U.S. Corporate Formation While beneficial ownership information is relevant to a variety of assets, recent policy attention has focused on the beneficial ownership of companies, and in particular, the use of shell companies to anonymously purchase assets, such as real property, and to store and move money, including through bank accounts and wire transfers. FATF has estimated that over 30 million "legal persons" exist in the United States, and about 2 million new such legal persons are created each year in the states and territories owned by the United States. FATF defines legal persons to include entities such as corporations, limited liability companies (LLCs), various forms of partnerships, foundations, and other entities that can own property and are treated as legal persons. FATF considers trusts, which share some of the same characteristics, to be "legal arrangements." FATF recommends that countries mandate some degree of transparency in identifying beneficial owners, at least for law enforcement and regulatory purposes, for legal persons and legal arrangements. There are a range of legitimate reasons for wanting to create such entities, including diversification of risk with joint owners, tax purposes, limiting liability, and other reasons. However, such legal persons and arrangements can also be used to hide the identities of owners of assets, thereby facilitating money laundering, corruption, and financial crime. For this reason, FATF recommends countries take steps to ensure that accurate and updated information on the identities of beneficial owners be maintained and accessible to authorities. In the United States, corporations, LLCs, and partnerships are formed at the state level, not the federal level. Corporation laws vary from state to state, and the "promoter" of the corporation can choose in which state to incorporate or in which to form another legal entity, often paying a "corporate formation agent" within the state to file the required state-level paperwork. Such corporate formation agents may be attorneys, but are not always required to be attorneys. While state laws vary, most states share some basic requirements for forming a corporation or other entity, including the filing of the entity's articles of incorporation with the secretary of state. These articles often include the corporation's name, the business purpose of the corporation, and the corporation's registered agent and address for the purpose of accepting legal service of process if it is sued. While state requirements vary, most states do not collect, verify, or update identifying information on beneficial owners. Because no federal standards currently exist, a promoter of a corporation can choose to incorporate in a state with fewer disclosure requirements if they wish. The FATF evaluation of the United States' AML system found that "measures to prevent or deter the misuse of legal persons and legal arrangements are generally inadequate" in the United States. FATF reported there were no mechanisms in place to record or verify beneficial ownership information in the states during corporate formation. They also warned that "the relative ease with which U.S. corporations can be established, their opaqueness and their perceived global credibility makes them attractive to abuse for money laundering and terrorism financing, domestically as well as internationally." In a Senate Judiciary Committee hearing on June 19, 2019, witness Adam Szubin, former Under Secretary for the Treasury's Office of Terrorism and Financial Intelligence, noted in the question-and-answer portion that the position of the United States as a leader in the financial system at times gave additional credibility to shell companies that had been formed in the United States anonymously by international criminals, enabling them to transact business or open bank accounts outside the United States through these companies with less scrutiny than they might otherwise have received. Beneficial Ownership and U.S. Real Estate Overview of Real Estate Transactions Some argue that land ownership, even more than ownership of other resources, involves both public and private aspectsâsuch as urban planning, resources and environmental planning, and tax consequences. In the United States, however, unlike in many European countries, the federal government has almost no role in the purchase and sale of real estate. Real estate transactions in the United States are largely private contracts, and transfers may or may not be recorded publicly, although many buyers find it advantageous to do so. Most buyers of property finance their purchases with mortgages from banks. Investors or those who do not require such loans may engage in "all-cash" purchases, which simply means that no loans are involved and that the purchasers must come up with the necessary funds on their own. According to the National Association of REALTORSÂ®, approximately 23% of residential real estate sales transactions were all-cash in 2017. Data from real estate data firm CoreLogic for 2016, however, put the figure at 46% for New York state, and similarly higher for some additional states. In addition to realtors, who may represent buyers or sellers (but are not required to be involved in transactions), escrow agents and title company agents also play a role in real estate transactions in the United States. Escrow agents essentially act as neutral middlemen in real estate sales, temporarily holding funds for either side. In cases where purchases are made in the name of an LLC, for instance, an escrow agent will look at operating agreements of the LLC to identify the person legally authorized to sign documents, but they generally have no specific duties to locate or identify beneficial owners. Usually, escrow agents are not part of title insurance companies or independent title agencies. After a buyer and seller agree on a sales price and sign a purchase and sales contract, real estate transactions are transferred to a land title company, most likely the American Land Title Association (ALTA). ALTA represents 6,300 title insurance agents and companies, from small, single-county operators to large national title insurers. Title insurance is a form of insurance that protects the holder from financial loss if there are previously undiscovered defects in a title to a property (such as previously undiscovered fraud or forgery, or various other situations). A typical title insurance company, before providing coverage to the buyer of a property, usually investigates prior sales of the property. This process often starts with examining public records tracing the property's history, its owners, sales, and any partial property rights that may have been given away. This title search investigation also normally includes tax and court records to give title companies an understanding of what they might be able to insure in their policies issued to buyers. Title insurers are the only professionals in the real estate community who currently have money laundering requirements, which were imposed through FinCEN's Geographic Targeting Orders (GTOs), as detailed below. As part of this process, when real estate transactions fit the thresholds set in GTOs for certain covered metropolitan areas, title insurance companies work with real estate professionals representing buyers to collect the required beneficial ownership information. Money Laundering Risks Through Real Estate and Shell Companies The FATF 2016 evaluation warned that the lack of AML requirements on real estate professionals constituted a significant vulnerability for the United States' AML system. As detailed below, FinCEN exempted the real estate sector from AML requirements pursuant to the USA PATRIOT Act of 2001 ( P.L. 107-56 ). In a 2015 study of the New York luxury property market, the New York Times found that LLCs with anonymous owners were being increasingly utilized in the New York luxury property market. The Times reported that in 2003, for example, one-third of the units sold in one high-end Manhattan buildingâthe Time Warner buildingâwere purchased by shell companies. By 2014, however, that figure had risen to over 80%, according to the article. And nationwide, the Times reported, nearly half of residential purchases of over $5 million were made by shell companies rather than named people, according to data from property data provider First American Data Tree studied by the Times . According to FinCEN, in 2017, 30% of all high-end purchases in six geographic areas involved a beneficial owner or purchaser representative who was also the subject of a previous suspicious activity report (SAR). A 2017 study by the U.S. Government Accountability Office (GAO) reviewed available information on the ownership of General Services Administration (GSA) leased space that required higher levels of security as of March 2016, and found that GSA was leasing high-security space from foreign owners in 20 buildings. GAO could not obtain the beneficial owners of 36% of those buildings for high-security facilities leased by the federal government, including by the Federal Bureau of Investigation. The Appendix provides an example of how an LLC with hidden owners might be used to purchase real estate in the United States with minimal information as to the natural persons behind the purchase or sale of the property. U.S. Policy Responses History of U.S. Beneficial Ownership Policy and Legislation As previously noted, the U.S. government has long recognized the ability to create legal entities without accurate beneficial ownership information as a key vulnerability of the U.S. financial system. In 2006, GAO published a report entitled Company Formations: Minimal Ownership Information Is Collected and Available , which described the challenges of collecting beneficial owner data at the state level. The U.S. Department of the Treasury's 2015 National Money Laundering Risk Assessment and its 2018 update identify the misuse of legal entities as a key vulnerability in the banking and securities sectors. The 2018 risk assessment additionally clarified that such vulnerability is further compounded by shell companies' ability to transfer funds to other overseas entities. Such ongoing vulnerabilities have placed the United States under domestic and international pressure, including from FATF, to tighten its AML/CFT regime with respect to beneficial ownership disclosure requirements. In its 2016 review of the U.S. government's AML/CFT regime, FATF noted that the "lack of timely access to â¦ beneficial ownership information remains one of the most fundamental gaps in the U.S. context." According to FATF, this gap exacerbates U.S. vulnerability to money laundering by preventing law enforcement from efficiently obtaining such information during the course of investigations. FATF further noted that this gap in the U.S. AML/CFT regime limits U.S. law enforcement's ability to respond to foreign mutual legal assistance requests for beneficial ownership information. By contrast, for instance, the European Union (E.U.), in 2015, enacted the E.U. Fourth Anti-Money Laundering Directive, which required member states to collect and share beneficial ownership information. Since at least the 110 th Congress, legislation has been introduced to address long-standing concerns raised by law enforcement, FATF, and other observers over the lack of beneficial ownership disclosure requirements. For example, in the 110 th Congress, Senator Carl Levin introduced S. 2956 , the Incorporation Transparency and Law Enforcement Assistance Act, on May 1, 2008. In his floor statement introducing the bill, Senator Levin noted that the National Association of Secretaries of State (NASS) had requested that he delay introduction of a bill in order for the NASS to first convene a task force in 2007 to examine state company formation practices. In July 2007, the NASS task force issued a proposal. Rather than cure the problem, however, the proposal was full of deficiencies, leading the Treasury Department to state in a letter that the NASS proposal "falls short" and "does not fully address the problem of legal entities masking the identity of criminals." â¦. That is why we are introducing Federal legislation today. Federal legislation is needed to level the playing field among the States, set minimum standards for obtaining beneficial ownership information, put an end to the practice of States forming millions of legal entities each year without knowing who is behind them, and bring the U.S. into compliance with its international commitments. The 115 th Congress considered a number of bills concerning beneficial ownership reporting, including S. 1454 , the True Incorporation Transparency for Law Enforcement (TITLE) Act and the Corporate Transparency Act of 2017 ( H.R. 3089 and S. 1717 ). In the 116 th Congress, the House Committee on Financial Services on June 11, 2019, passed and ordered to be reported to the House an amendment in the nature of a substitute to H.R. 2513 , the "Corporate Transparency Act of 2019," introduced by Representative Maloney. Also, in the Senate, S. 1889 was introduced on June 19, 2019, by Senator Whitehouse with cosponsors, and a discussion draft bill was circulated June 10, 2019, by Senators Warner and Cotton. This report concludes with an analysis of selected introduced legislative proposals in the 116 th Congress. Current Beneficial Ownership Requirements Several federal tools are available to address money laundering risks posed by entities that obscure beneficial ownership information, including Treasury's Customer Due Diligence (CDD) rule, use of Geographic Targeting Orders (GTOs), and a provision in Section 311 of the USA PATRIOT Act. Treasury also uses various elements of its economic sanctions programs to address such risks. Finally, with regard to international cooperation, the U.S. government may obtain and share beneficial ownership information with foreign governments in the course of law enforcement investigations (see text box below). In other policy contexts that reach beyond money laundering issues, beneficial ownership has emerged as a concern related to entities' disclosure of U.S. ownership for tax purposes and entities that lease high-security government office spaces. Beneficial ownership issues are also relevant in other areas, such as securities, which are beyond the scope of this report. Treasury's Customer Due Diligence (CDD) Rule Pursuant to its regulatory authority under the Bank Secrecy Act (BSA) âthe principal federal AML statuteâFinCEN has long administered regulations requiring various types of financial institutions to establish AML programs. The centerpiece of FinCEN's response to concerns about beneficial ownership transparency is its Customer Due Diligence Rule (CDD Rule), which went into effect in May 2018. Under the CDD Rule, certain U.S. financial institutions must establish and maintain procedures to identify and verify the beneficial owners of legal entities that open new accounts. The regulation covers financial institutions that are required to develop AML programs, including banks, securities brokers and dealers, mutual funds, futures commission merchants, and commodities brokers. Under the rule, covered financial institutions must now collect certain identifying information on individuals who own 25% or more of legal entities that open new accounts. The CDD Rule also requires covered financial institutions to develop customer risk profiles and to update customer information on a risk basis for the purposes of ongoing monitoring and suspicious transaction reporting. These requirements make explicit what has been an implicit component of BSA and AML compliance programs. Geographic Targeting Orders (GTOs) FinCEN has the authority to impose additional recordkeeping and reporting requirements on domestic financial institutions and nonfinancial businesses in a particular geographic area in order to assist regulators and law enforcement agencies in identifying criminal activity. This authority to impose so-called "Geographic Targeting Orders" (GTOs) dates back to 1988. GTOs may remain in effect for a maximum of 180 days unless extended by FinCEN. Section 274 of the Countering America's Adversaries Through Sanctions Act ( P.L. 115-44 ) replaced statutory language referring to coins and currency with "funds," thereby including a broader range of financial services, such as wire transfers. Several bills in the 116 th Congress seek to address the use of GTOs to disclose the beneficial owners of entities involved in the purchase of all-cash real estate transactions (see text box below). Special Measures Applied to Jurisdictions, Financial Institutions, Classes of Transactions, or Types of Accounts of Primary Money Laundering Concern Section 311 of the USA PATRIOT Act ( P.L. 107-56 ) added a new provision to the Bank Secrecy Act at 31 U.S.C. Â§5318A. This provision, popularly referred to as "Section 311," authorizes the Secretary of the Treasury to impose regulatory restrictions, known as "special measures," upon finding that a foreign jurisdiction, a financial institution outside the United States, a class of transactions involving a foreign jurisdiction, or a type of account, is "of primary money laundering concern." The statute outlines five special measures that Treasury may impose to address money laundering concerns. The second special measure authorizes the Secretary to require domestic financial institutions and agencies to take reasonable and practicable steps to collect beneficial ownership information associated with accounts opened or maintained in the United States by a foreign person (other than a foreign entity whose shares are subject to public reporting requirements or are listed and traded on a regulated exchange or trading market), or a representative of such a foreign person, involving a foreign jurisdiction, a financial institution outside the United States, a class of transactions involving a jurisdiction outside the United States, or a type of account "of primary money laundering concern." Based on a review of Federal Register notices, FinCEN has neither proposed nor imposed the special measure involving the collection of beneficial ownership information. Treasury's Sanctions Programs and the 50% Rule Affecting Entities Owned by Sanctioned Persons Beneficial ownership information is valuable in the context of economic sanctions administered by the Treasury Department's Office of Foreign Assets Control (OFAC). Under economic sanctions programs, assets of designated persons (i.e., individuals or entities) may be blocked (i.e., frozen), thereby prohibiting transfers, transactions, or dealings of any kind, extending to property and interests in property subject to the jurisdiction of the United States as specified in OFAC's specific regulations. As additional persons, including shell and front companies, are discovered to be associated (i.e., owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly) with someone already subject to sanctions, OFAC may choose to designate those additional persons to be subject to sanctions. In addition to persons explicitly identified on OFAC's Specially Designated Nationals (SDN) or Sectoral Sanctions Identification (SSI) lists, sanctions also apply to nonlisted entities that are owned, in part, by blocked persons. Current guidance states that sanctions also extend to entities that are at least 50% owned by sanctioned persons. Compliance with this so-called "50% Rule" requires financial institutions and others potentially doing business with designated persons or identified sectoral entities to understand an entity's ownership structure, including its beneficial owners. Disclosure of "Substantial" U.S. Ownership for Tax Purposes The Foreign Account Tax Compliance Act (FATCA; Subtitle A of Title V of the Hiring Incentives to Restore Employment Act; P.L. 111-147 , as amended) is a key U.S. policy tool to combat tax evasion. Pursuant to FATCA, U.S. taxpayers are required to disclose to the Internal Revenue Service (IRS) financial assets held overseas. In addition, FATCA requires certain foreign financial institutions to disclose information directly to the IRS when its customers are U.S. persons or when U.S. persons hold a "substantial" ownership interestâdefined to mean ownership, directly or indirectly, of more than 10% of the stock (by vote or value) of a foreign corporation or of the interests (in terms of profits or capital) of a foreign partnership; or, in the case of a trust, the owner of any portion of it or the holder, directly or indirectly, of more than 10% of its beneficial interest. Foreign financial institutions that do not comply with reporting requirements are subject to a 30% withholding tax rate on U.S.-sourced payments. According to FinCEN, some intergovernmental agreements that the United States negotiated with other governments to facilitate the implementation of FATCA "allow foreign financial institutions to rely on existing AML practices â¦ for the purposes of determining whether certain legal entity customers are controlled by U.S. persons." The U.S. government committed in many of these agreements to pursue "equivalent levels of reciprocal automatic information exchange" on the U.S. financial accounts held by taxpayers of that foreign jurisdiction; there is, however, no reciprocity in FATCA. Various observers have debated whether legal entity ownership disclosure information provided to the IRS could be used by other federal entities for AML purposes. Disclosure of Beneficial Ownership of Office Space Leased by the FederalÂ Government Section 2876 of the National Defense Authorization Act for Fiscal Year 2018 (NDAA; 10 U.S.C. 2661 note) requires the Defense Department to identify each beneficial owner of a covered entity proposing to lease accommodation in a building or other improvement that is intended to be used for high-security office space for a military department or defense agency. Prior to the enactment of Section 2876, in January 2017, the GAO reported that the General Services Administration (GSA) did not keep track of beneficial owners, including foreign owners, of high-security office space it leased for tenants that included the Federal Bureau of Investigation (FBI) and the Drug Enforcement Administration (DEA). According to GAO, GSA began in April 2018 to implement a new lease requirement for prospective lease projects that requires offerors to identify and disclose whether the owner of the leased space, including an entity involved in the financing of the property, is a foreign person or a foreign-owned entity. In the 116 th Congress, H.R. 392 , the Secure Government Buildings from Espionage Act of 2019, seeks to expand the scope of the FY2018 NDAA's provisions. Selected Policy Issues The current policy debate surrounding beneficial ownership disclosure is focused on addressing gaps in the U.S. AML regime and tracking changes made by the international community in its approach to addressing the problem. A key area of congressional activity involves evaluating the risks associated with lack of beneficial ownership information in the corporate formation and real estate sectors. The Treasury's current CDD rule mandates that financial institutions must collect informationâfor beneficial owners who hold more than 25% of an entityâupon opening an account for the entity. Some legislative proposals would mandate that this type of information be collected when such legal entities are formed, and that the information be reported to FinCEN or another central repository that authorities can access. International developments in beneficial ownership disclosure practices, including trends in the adoption of a program known as the Global Legal Entity Identifier System (LEI), also raise issues for U.S. policy consideration. Sectors Not Covered by Treasury's CDD Rule Even following the CDD rule's implementation, some critics argue that gaps remain in U.S. financial transparency requirements The CDD rule, for example, applies only to individuals who own 25% or more of a legal entity. Critics note that the 25% ownership threshold means that if five or more people share ownership, a legal entity may not name or identify any of them (only one management official). Also, the rule applies to new, but not existing, accounts. FATF, for example, has criticized the United States for lacking beneficial ownership requirements for corporate formation agents and real estate transactions. Neither sector is directly affected by the FinCEN rule, but recent legislation has been introduced to address both areas (see section below titled " Selected Legislative Proposals in the 116th Congress "). The following sections discuss potential gaps remaining in U.S. financial transparency requirements after implementation of the CDD rule. Company Formation Agent Transparency Third-party service providers known as "company formation agents" often "play a central role in the creation and ongoing maintenance and support of â¦ shell companies." While these services are not inherently illegitimate, they can help shield the identities of a company's beneficial owners from law enforcement. According to a 2016 FATF report, formation agents handle approximately half of the roughly 2 million new company formations undertaken annually in the United States. As discussed, the regulation of company formation agents is primarily a matter of state law. Formation agents are not subject to the BSA or federal AML regulations. However, observers have argued that states have not served as effective regulators of the company formation industry. These perceived inadequacies with current oversight of the company formation industry have prompted a number of legislative proposals discussed below. Status of the GTO Program A number of policymakers have expressed interest in making FinCEN's GTOs targeting money laundering in high-end real estate permanent or otherwise expanding the scope of the current real estate GTO program. Section 702 of the Defending American Security from Kremlin Aggression Act of 2019 ( S. 482 ) would require the Secretary of the Treasury to prescribe regulations mandating that title insurance companies report on the beneficial owners of entities that engage in certain transactions involving residential real estate. Section 214 of the COUNTER Act of 2019 ( H.R. 2514 ), as amended in a mark-up session of the House Financial Services Committee on May 8, 2019, would require the Secretary of the Treasury to apply the real estate GTOs, which currently cover only residential real estate, to commercial real estate transactions. Section 129 of the Department of the Treasury Appropriations Act, 2019 (Title I of H.R. 264 ) would have required FinCEN to submit a report to Congress on GTOs issued since 2016, but it was not enacted. Establishing AML Requirements for Persons Involved in Real Estate Closings and Settlements Section 352 of the USA PATRIOT Act ( P.L. 107-56 ) requires all financial institutions to establish AML programs. In 2002, however, FinCEN exempted from Section 352 certain financial institutions, including persons involved in real estate closings and settlements, in order to study the impact of AML requirements on the industry. In 2003, FinCEN published an advanced notice of proposed rulemaking (ANPRM) to solicit public comments on how to incorporate persons involved in real estate closings and settlements into the U.S. AML regulatory regime. Although no final rule has been issued, other developments have occurred. In 2017, FinCEN released a public advisory on the money laundering risks in the real estate sector. And in November 2018 a notice in the Federal Register on anticipated regulatory actions contained reference to renewed FinCEN plans to issue an ANPRM to initiate rulemaking that would establish BSA requirements for persons involved in real estate closings and settlements. Disclosure of Beneficial Ownership of U.S.-Registered Aircraft To register an aircraft in the United States with the Federal Aviation Administration (FAA), applicants must certify their U.S. citizenship. Non-U.S. citizens may register aircraft under a trust agreement in which the aircraft's title is transferred to an American trustee (e.g., a U.S. bank). Investigations into the FAA's Civil Aviation Registry have revealed a lack of beneficial ownership transparency among aircraft registered through noncitizen trusts. Reports further indicate that drug traffickers, kleptocrats, and sanctions evaders have been among the operators of aircraft registered with the FAA through noncitizen trusts. Some Members of Congress have sought to address beneficial ownership transparency in the FAA's Civil Aviation Registry through legislation. If enacted, H.R. 393 , the Aircraft Ownership Transparency Act of 2019, would require the FAA to collect identifying information, including nationality, of the beneficial owners of certain entities, including trusts, applying to register aircraft in the United States. Status of International Efforts to Address Beneficial Ownership U.S. policymakers' interest in addressing beneficial ownership transparency has been elevated by a series of leaks to the media regarding the abuse of shell companies by money launderers, corrupt politicians, and other criminals, as well as sustained multilateral attention to the issue. In late 2018, information from such leaks reportedly contributed to a raid by German authorities on Deutsche Bank, one of the world's largest banks. Other major banks have become enmeshed in money laundering scandals involving the abuse of accounts associated with shell companies, including Danske Bank, Denmark's largest bank. The international community has taken steps to acknowledge and address the issue of a lack of beneficial ownership transparency in the context of anti-money laundering efforts. Some countries, including the United Kingdom, have created a public register that provides the beneficial owners of companiesâand more countries have committed or are planning to do so. In April 2018, the European Parliament voted to adopt the European Commission's proposed Fifth Anti-Money Laundering (AML) Directive, which among other measures would require European Union member states to maintain public national-level registers of beneficial ownership information for certain types of legal entities. The European Commission has also sought to identify third-country jurisdictions with "strategic deficiencies" in their national AML/CFT regimes, which pose "significant threats" to the EU's financial system. To this end, the Commission has identified eight criteria or "building blocks" for assessing third countriesâone of which is the "availability of accurate and timely information of the beneficial ownership of legal persons and arrangements to competent authorities." In February 2019, the Commission released a proposed list of third countries with strategic AML/CFT deficiencies that included four U.S. territories: American Samoa, Guam, Puerto Rico, and the U.S. Virgin Islands. A key criticism of the U.S. territories' AML/CFT regime was the lack of beneficial ownership disclosure requirements. Evolution of the Global Legal Entity Identifier (LEI) Program The origins of the LEI system lay in some of the problems highlighted in the 2008 financial crisis. These included excessive opacity as to credit risks, and to potential losses accrued across various affiliates of large financial conglomerates. For example, when Lehman Brothers failed in 2008, financial regulators and market participants found it difficult to gauge their financial trading counterparties' exposure to Lehman's large number of subsidiaries and legal entities, domestically and overseas. Partly to better track such exposures, the Financial Stability Board (FSB) and G-20 helped to design and create the concept of the LEI system, starting in 2009. LEI is a voluntary international program that assigns each separate "legal entity" participating in the program a unique 20-digit identifying number. This number can be used across jurisdictions to identify a legally distinct entity engaged in a financial transaction, including a cross-border financial transaction, making it especially useful in today's globally interconnected financial system. The unique identifying number acts as a reference codeâmuch like a bar code, which can be used globally, across different types of markets and for a wide range of financial purposes. These would include, for example, capital markets and derivatives transactions, commercial lending, and customer ownership, due diligence, and financial transparency purposes; as well as risk management purposes for large conglomerates that may have hundreds or thousands of subsidiaries and affiliates to track. A large international bank, for example, may have an LEI identifying the parent entity plus an LEI for each of its legal entities that buy or sell stocks, bonds, swaps, or engage in other financial market transactions. The LEI was designed to enable risk managers and regulators to identify parties to financial transactions instantly and precisely. Although the origins of the LEI stemmed from concerns over credit risk and safety and soundness that surfaced during the 2008 financial crisis, the LEI may also have benefits for financial transparency. A May 2018 study from the Global Legal Entity Foundation found, based on multiple interviews with financial market companies, that the lack of consistent, reliable automated identifiers was creating a great burden on the financial industry; that most in the industry believed the "Know Your Customer" process of onboarding new clients would likely become more automated; and that "there is clearly an opportunity to align on one identifier to generate efficiencies." Similar conclusions were reached in a 2017 study by McKinsey & Co. The current LEI system is aimed more at tracking financial transactions of various affiliates, but creating a unified global identifier could be considered a natural first step toward more easily tracking ownership of affiliates as well. Worldwide, more than 700,000 LEIs have been issued to entities in over 180 countries as of November 2017; however, use of the LEI remains largely voluntary as opposed to legally mandatory. In the United States and abroad, some aspects of financial reporting require use of the LEI and these, in substantial part, rely on voluntary implementation. Some have called the lack of broader adoption of a common legal identifier a collective action problem. In a collective action problem, all participants in a system benefit if everyone participates; if only a few participate, those few bear high costs, as early adopters, with little benefit. Collective action problems are classic examples of situations where a government-organized solution may improve outcomes. Similarly, some argue that all parties would benefit if such LEIs were uniformly assigned, but there is no incentive to be a sole or early adopter. Academics have urged regulators to mandate the use of the LEI in regulatory reporting as a means of solving this collective action problem. Treasury's Office of Financial Research noted, "Universal adoption is necessary to bring efficiencies to reporting entities and useful information to the Financial Stability Oversight Council, its member agencies, and other policymakers." Selected Legislative Proposals in the 116th Congress112 In response to some of the issues discussed above, a number of lawmakers have introduced legislation that would require the collection of beneficial ownership information for both newly formed and existing legal entities. The subsections below discuss two of these proposals in the 116 th Congress. H.R. 2513, Corporate Transparency Act of 2019 In June 2019, the House Committee on Financial Services approved legislation that would require many small corporations and LLCs to report their beneficial owners to the federal government. Under H.R. 2513 , the Corporate Transparency Act of 2019, newly formed corporations and LLCs would be required to report certain identifying information concerning their beneficial owners to FinCEN and annually update that information. The bill would also impose these reporting requirements on existing corporations and LLCs two years after FinCEN adopts final regulations to implement the legislation. Subject to certain exceptions, the bill defines the term beneficial owner to mean natural persons who "directly or indirectly" exercise "substantial control" over a corporation or LLC; own 25% or more of the equity of a corporation or LLC; or receive "substantial economic benefits" from a corporation or LLC. H.R. 2513 's reporting requirements are limited to small corporations and LLCs. Specifically, the bill exempts a variety of regulated entities from its reporting requirements, in addition to any company that (1) employs more than 20 full-time employees, (2) files income tax returns reflecting more than $5 million in gross receipts, and (3) has an operating presence at a physical office within the United States. The bill would also authorize FinCEN to promulgate a number of rules. First, H.R. 2513 would allow FinCEN to adopt a rule requiring covered corporations and LLCs to report changes in their beneficial ownership sooner than the annual update required by the legislation itself. Second, the bill would direct the Treasury Secretary to promulgate a rule clarifying the circumstances in which an individual receives "substantial economic benefits" from a corporation or LLC for purposes of its definition of beneficial owner . Third, the legislation would require FinCEN to revise the CDD Rule within one year of the bill's enactment in order to bring the rule "into conformance" with the bill's requirements and reduce any "unnecessary" burdens on financial institutions. Finally, H.R. 2513 would impose civil and criminal penalties on persons who knowingly provide FinCEN with false beneficial ownership information or willfully fail to provide complete or updated information. S. 1889, True Incorporation Transparency for Law Enforcement (TITLE) Act In June 2019, Senator Sheldon Whitehouse introduced legislation that would require states receiving funds under the Omnibus Crime Control and Safe Streets Act of 1968 to adopt transparent incorporation systems within three years of the bill's enactment. Specifically, S. 1889 , the True Incorporation Transparency for Law Enforcement (TITLE) Act, would mandate that transparent incorporation systems require newly formed corporations and LLCs to report certain identifying information concerning their beneficial owners to their states of incorporation. Under the bill, a compliant formation system would also require corporations and LLCs to report changes in their beneficial ownership within 60 days. These requirements would apply to existing corporations and LLCs two years after a state's adoption of a compliant formation system. Subject to certain exceptions, S. 1889 defines the term beneficial owner to mean natural persons who "directly or indirectly" (1) exercise "substantial control" over a corporation or LLC, or (2) have a "substantial interest" in or receive "substantial economic benefits" from a corporation or LLC. Like H.R. 2513 , S. 1889 's requirements would be limited to small corporations and LLCs. Specifically, S. 1889 would allow states to exempt various regulated entities, in addition to any company that (1) employs more than 20 full-time employees, (2) files income tax returns reflecting more than $5 million in gross receipts, (3) has an operating presence at a physical office within the United States, and (4) has more than 100 shareholders. The bill would also impose civil and criminal penalties on persons who knowingly provide states with false beneficial ownership information or willfully fail to provide complete or updated information. Finally, S. 1889 would amend the BSA to include "any person engaged in the business of forming corporations or [LLCs]" in its definition of a regulated "financial institution," and would direct FinCEN to issue a proposed rule requiring such persons to establish AML programs. Appendix. Hypothetical Example of Shell Companies Obscuring U.S. Property Sale Figure A-1 demonstrates hypothetically how hidden foreign or U.S. buyers might purchase real estate in the United States with minimal disclosure of their identities as hidden beneficial owners. First, foreign or U.S. individuals might establish a foreign-incorporated LLC, subject to that foreign jurisdiction's laws, which could present particular challenges to a U.S. law enforcement agency seeking to investigate the purchase. Alternately, foreign or U.S. individuals could create a U.S. LLC incorporated in a U.S. state with only a "registered agent" required to be disclosed under various states' laws. A foreign LLC might pay for the property through a wire transfer from a foreign bank account. If the foreign LLC or the U.S. LLC were to open a U.S. bank account to pay for the purchase, then, if this were a new account opened since May 2018, the U.S.-regulated bank would look for beneficial owners owning more than 25% of the LLC, and keep records of that information. Currently, however, that information would not be reported to FinCEN automatically, and law enforcement would most likely require a subpoena to procure that information from the bank's records. To create additional layers that could obscure the actual buyers of the property, the LLC, whether U.S. or foreign, could route the payment to the title company, which handles the real estate closing, through a law firm. Payments and wire transfers routed through law firms present an extra layer of information a prosecutor or law enforcement agent must go through to try to obtain details of individuals who own the LLC and are purchasing a property. Often the U.S. attorney-client privilege can make it more difficult to exercise this subpoena authority, without at least the possibility that a legal challenge may arise. Finally, the payment is routed to the title company, which processes the property sale and distributes payment, normally to the seller's account. If the seller obscures his or her identity through an LLC as well, natural persons involved on both sides of the transfer may be hidden.	Summary:	gov_report	1,024	null	61
crs_R46233	crs_R46233_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction When Congress considers legislation, it takes into account the proposal's potential budgetary effects . This helps Members to weigh the legislation's merits, and to consider whether it complies with the budgetary rules that Congress has created for itself. While information on the potential budgetary effects of legislation may come from numerous sources, the authority to determine whether legislation complies with congressional budgetary rules is given to the House and Senate Budget Committees. In this capacity, the budget committees generally rely on estimates provided by the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT). As described in the following section, cost estimates provided by CBO and JCT are guided by certain requirements that Congress has articulated in different forms. These requirements are not completely prescriptive, however, and as a result both CBO and JCT adopt practices and conventions that guide the creation of cost estimates. Generally, CBO and JCT estimates include projections of the budgetary effects that would result from a proposed policy and incorporate anticipated individual behavioral responses to the policy. The estimates, however, do not typically include the macroeconomic effectsâeffects on the overall size of the economyâof those individual behavioral responses. Congress has sometimes required that JCT and CBO provide estimates that incorporate such macroeconomic effects. These estimates are often referred to as dynamic estimates or dynamic scores . This report provides information on the authorities and requirements under which cost estimates are prepared, as well as a summary of the debate surrounding dynamic cost estimates, and previous rules and requirements related to dynamic estimates. Currently, no congressional rules explicitly require dynamic estimates, and Congress may examine what rules changes, if any, are needed in the area of dynamic estimates. This report, therefore, includes information on options for the creation of dynamic scoring rules, and general considerations for Congress related to dynamic estimates. Authorities and Requirements Under Which Cost Estimates are Prepared Cost estimates provided by CBO and JCT are guided, in part, by certain requirements that have been articulated by Congress in different forms, as described below. The Congressional Budget Act The Congressional Budget Act (CBA) requires that CBO prepare cost estimates for all bills reported from committee, "to the extent practicable." The CBA also requires that (1) CBO rely on estimates provided by JCT for revenue legislation and (2) CBO include in its estimates "the costs which would be incurred" in carrying out the legislation in the fiscal year in which the legislation is to become effective, as well as the four following years, together with "the basis for such estimate." The Baseline When conducting cost estimates, CBO and JCT measure the budgetary effect of a legislative proposal in relation to projections of revenue and spending levels that are assumed to occur under current law, typically referred to as baseline levels. This means that the way a policy is reflected in the baseline will affect how CBO and JCT estimate a related policy. In calculating the baseline, CBO makes its own technical and economic assumptions, but the law generally requires that CBO assume that spending and revenue policies continue or expire based on what is currently slated to occur in statute. For example, CBO's baseline must assume that temporary tax cuts such as those enacted in 2017 actually do expire. The baseline, therefore, shows an increase in the level of revenue expected to be collected after the tax cut provisions expire in law. Therefore, a legislative proposal to continue those tax cut provisions would be scored as increasing the deficit. Although baseline calculations generally require that direct (mandatory) spending program levels reflect what is scheduled to occur in law, important exceptions exist for many direct spending programs. In particular, any program with estimated current year outlays greater than $50 million is assumed to continue to operate under the terms of the law at the time of its expiration. This means that some programs that are slated in law to expire are assumed to continue in the baseline. A legislative proposal that sought to merely continue those expired programs would therefore not be scored as new spending. Scorekeeping Guidelines When creating cost estimates, CBO adheres to scorekeeping guidelines, which are "specific rules for determining the budgetary effects of legislation." These general guidelines are used by the scorekeepersâthe House and Senate Budget Committees, CBO, and the Office of Management and Budget (OMB)âto ensure that each group uses consistent and established practices. The 17 scorekeeping guidelines include general principles, such as a requirement that mandatory spending provisions included in appropriations bills be counted against the Appropriations Committee spending allocation, and direction on how asset sales are to be scored. The guidelines have been revised and expanded over the years, and any changes or additions to the scorekeeping guidelines are first approved by each of the scorekeepers. Chamber Rules and the Budget Resolution Congress sometimes directs the creation and content of cost estimates through chamber rules and provisions contained in budget resolutions. As described subsequently, House rules have sometimes explicitly required CBO and JCT to include in cost estimates information on a policy proposal's projected macroeconomic feedback effects. Similarly, Congress has also used the budget resolution to provide direction on how a policy ought to be estimated. For example, budget resolutions have included provisions requiring that transfers from the Treasury's general fund to the Highway Trust Fund be counted as new spending. Similarly, budget resolutions have stated that certain policies cannot be counted as offsets, such as Federal Reserve System surpluses transferred to the Treasury's general fund, as well as increases or extensions of Freddie Mac and Fannie Mae guarantee fees. The Budget Committees and Tax Committees Congressional committees may also shape the content or creation of cost estimates. The House and Senate Budget Committees have jurisdiction over CBO, and the CBA specifies that CBO's "primary duty and function" is to assist the budget committees. Oversight of CBO, as well as the creation and content of cost estimates is, therefore, under the jurisdiction of the House and Senate Budget Committees, and the budget committees provide related guidance to CBO. For the JCT, the creation and content of its estimates may be shaped by the committee itself, or by guidance or assumptions of the tax committeesâthe House Committee on Ways and Means and the Senate Committee on Finance. Overview of Dynamic Estimating Generally, CBO and JCT estimates include projections of the budgetary effects that would result from proposed policy changes, and incorporate anticipated individual behavioral responses to the policy. The estimates, however, do not typically include the macroeconomic effects of those individual behavioral responses (such as changes in labor supply and the capital stock) that would alter GDP. For example, if an increase in the corporate tax rate caused corporations to use more debt, conventional estimates would take into account the loss of revenue since the returns from debt are taxed more lightly than the returns from equity, and this loss in revenue would offset the revenue gain calculated by multiplying the change in the tax rate by corporate income. The conventional estimate would not, however, take into account the lost revenue from a reduction in income if the rate increase caused a decline in investment, which affects production. These estimates without macroeconomic effects are sometimes imprecisely referred to as "static," but are referred to in this report as conventional estimates because they take into account many behavioral responses. In contrast, a dynamic score aims to account for legislation's macroeconomic effect, by incorporating changes to (1) aggregate demand for goods and services to increase output in an underemployed economy and/or (2) aggregate supply of goods and services ( supply - side effects ) to increase potential output. For example, dynamic scoring can include fiscal stimulus effects that increase aggregate demand. These effects occur when the economy is underemployed (for example, during and after a recession), and increased spending either by the government or from taxpayers after a tax cut can expand the economy through multiplier effects and cause output to move closer to potential output. These effects are referred to subsequently as demand - side effects . Supply-side effects occur if potential output is altered due to changes in investment or savings that increase the capital stock, labor supply, or productivity. The crowding-out (or -in) effect occurs when an increase (or decrease) in the deficit reduces (or increases) funds available for private investment and hence reduces (or increases) the capital stock. Increased Interest in Dynamic Estimating Congressional interest in dynamic estimating has increased in recent decades. This interest may be attributed to the increase in the number of House and Senate rules restricting budgetary legislation. Because bills and resolutions are expected to comply with these congressional rules, estimates of a measure's fiscal impact arguably become more important. Interest in dynamic scoring is also likely related to recent advancements in economic analysis and economic modeling that make estimating macroeconomic feedback effects possible. Views on Dynamic Estimating Both proponents and opponents of dynamic estimating point to accuracy and consistency as their primary objectives. Some have suggested that dynamic scoring is useful, but only under certain circumstances. Arguments for Dynamic Estimating Arguments in favor of dynamic scoring include the view that dynamic scoring provides a more accurate assessment of budgetary impact than conventional scoring, particularly for some types of legislative proposals, and that conventional estimating methods produce a projection that does not reflect the actual expected impact on revenues. Under this argument, dynamic scoring makes use of all available information, and excluding macroeconomic feedback effects "amounts to throwing away valuable information." It has also been argued that including macroeconomic effects can improve Congress's ability to compare competing policy proposals. Arguments in favor of dynamic scoring state that these estimates are required for the sake of consistency, especially for large legislative packages that would likely affect the economy. As stated above, a legislative proposal's budgetary impact is measured against a baseline, and that baseline takes into account macroeconomic assumptions. It is, therefore, argued that certain legislative proposals should also take into account economic assumptions. If such legislation were to be enacted into law, CBO would then build that policy into its baseline, and would have to make assumptions about the macroeconomic feedback effects that would be expected to occur under those policies. It is only consistent, the argument goes, to use macroeconomic feedback effects in the initial estimate of the legislation as well. Advocates for dynamic scoring also state that not using a dynamic approach to measure the impact of policy changes biases the legislative process against policy proposals that are designed to encourage productive economic activity. Some have argued that under conventional estimating methods, the impact of a cut in the marginal tax rates, for example, is viewed (through the lens of budgetary outcomes) less favorably than it should be. It has also been argued that, methodologically, the production of quality dynamic estimates is now possible due to technical advances in modeling and analysis, and an increase in evidence showing public responses to policy changes. Some have pointed out that both CBO and JCT are capable of producing dynamic estimates, and JCT staff have stated that, with regard to macroeconomic estimates, "we think we have been producing reasonable results for over a decade (though we welcome comments and discussion)." Arguments Against Dynamic Estimating Likewise, arguments against dynamic estimates also point to concerns about accuracy and consistency. Those who oppose the use of dynamic scoring argue that projected macroeconomic feedback effects are too uncertain to be relied upon as accurate projections of budgetary outcomes. Projecting macroeconomic feedback effects requires economic modeling, and it has been said that "because reasonable people can disagree about what model, and what parameters of that model, are best, the results from dynamic scoring will always be controversial." Previous macroeconomic analyses by CBO and JCT have yielded a range of estimates depending on what type of model is used and the underlying behavioral assumptions in each model. With assumptions about the behavioral responses that determine macroeconomic feedback being so uncertain, it has been argued that there is consistency in assuming, for all legislative proposals, that GDP remains the same, regardless of changes in tax or spending policy. Arguments against dynamic scoring often point to potential problems with cost estimating in general, but note that under dynamic scoring these vulnerabilities may be exacerbated. For example, as mentioned above, all cost estimates are inherently uncertain. Dynamic estimates are always subject to more uncertainty, even for relatively simple tax changes, because of the uncertainty of taxpayer responses (such as consumer spending and labor supply). In contrast, many conventional estimates (such as the effect of rate changes in the tax code or changes to exemptions and deductions) may be estimated quite precisely because data are readily available on income levels and family characteristics. Similarly, while cost estimates generally might always have the potential to be perceived as subject to manipulation by political forces, it has been argued that this possibility is exacerbated with dynamic scoring, which might damage the budget process's credibility. Arguments for Dynamic Estimating Under Certain Circumstances Some have argued that dynamic estimates would be useful for Congress but only in certain situations. It has been argued that dynamic estimates should be provided by CBO and JCT but only for "major proposals" such as those that have a large estimated budgetary impact or those designated as "major" by either majority or minority committee and/or chamber leadership. (Recent dynamic scoring rules [discussed below] used a similar threshold.) It has been stated that neither CBO nor JCT have sufficient time or staff to carefully estimate the macroeconomic effects of every proposal for which they must conduct an estimate. (To this end, it has also been argued that dynamic estimates should be conducted only when CBO and JCT have the time and tools necessary to conduct the analysis.) Further, it has been stated that dynamic estimates should be conducted for spending as well as revenue proposals because each have the potential to produce notable macroeconomic effects. (As stated below, in some years dynamic estimates were required only for revenue legislation.) It has also been argued that dynamic estimates should be provided for discretionary spending as well as direct/mandatory spending. As stated below, even when dynamic scoring requirements applied to spending as well as revenue, these rules excluded discretionary spending legislation (i.e., appropriations legislation). Previous Dynamic Scoring Rules and Requirements While committees and Members continue to have the ability to request that CBO or JCT provide dynamic estimates for certain policies or legislative proposals, for the first time in decades there are no explicit congressional rules or requirements that pertain specifically to the preparation or use of such estimates. As described below, rules related to dynamic estimates have varied over the years. 1997-2002 In January 1997, the House first adopted a rule that explicitly mentioned dynamic estimates. It stated that a dynamic estimate provided by JCT could be included in the committee report accompanying "major tax legislation" (as designated by the House majority leader), but that the estimate could be used "for informational purposes only." The rule, which was in effect through 2002, defined a dynamic estimate as "a projection based in any part on assumptions concerning probable effects of macroeconomic feedback" and required that the estimate include a statement identifying all such assumptions. When the new rule was adopted in January 1997, JCT staff hosted a symposium entitled "Modeling the Macroeconomic Consequences of Tax Policy." According to JCT This symposium presented the results of a year-long modeling experiment by economists noted for their work in developing models of the U.S. economy. The purpose of this experiment was to explore the predictions of a variety of models regarding the macroeconomic feedback effects of major changes in the U.S. tax code with a focus on evaluating the feasibility of using these types of results to enhance the U.S. budgeting process. 2003-2014 In January 2003, the House replaced its previous dynamic scoring rule with a more extensive rule, which remained in effect through 2014. Whereas the previous rule had permitted a dynamic estimate to be included in a committee report, the new House rule required it. Further, whereas the previous rule had applied only to bills designated as "major tax legislation," the new rule applied to any bill reported by the House Committee on Ways and Means that proposed to amend the Internal Revenue Code. The new rule also omitted the previous provision that explicitly required the estimate be "used for informational purposes only." The new rule no longer used the term "dynamic estimate" but instead used the term "macroeconomic impact analysis," which the rule defined as an estimate provided by JCT "of the changes in economic output, employment, capital stock, and tax revenues expected to result from enactment of the proposal." The estimate was required to identify critical assumptions and the source of data underlying that estimate. Around the time of the rule's adoption in 2003, the JCT released a report providing an overview of the joint committee's efforts to model macroeconomic effects of proposed tax legislation. While varying in length and detail, the macroeconomic analyses provided by JCT during this period (2003-2014) included information on the expected macroeconomic effects (if any) of the proposed legislation, provided general conclusions, and sometimes provided a range of potential budgetary effects using different models and different assumptions within models. The analyses did not include a specific dollar amount or point estimate . These analyses also reported details of the effects on different aspects of the economy (such as labor supply, output, and capital stock). In addition, the estimates often referenced the model(s) used for the analysis. During this time the JCT used four different types of models. Crucially, all of these models incorporated the impact of supply-side effects in their dynamic estimates. Only the MEG and GI model also incorporated demand-side effects (for a brief discussion of these effects, see " Overview of Dynamic Estimating "). The models are briefly described below: 1. MEG: a macroeconomic growth (MEG) model that incorporates aggregate demand effects similar to those in most economic forecasting models and includes labor and savings responses. (This model falls into a class of steady state growth models called Solow models, discussed below.) 2. OLG: an overlapping generations (OLG) life-cycle model that assumes that generations of individuals optimize choices of consumption and leisure over a lifetime and cannot include demand-side effects. 3. GI: a Global Insight (GI) private econometric forecasting model that captures demand-side effects. 4. DSGE: a domestic stochastic general equilibrium (DSGE) model that assumes that individuals optimize over infinite lifetimes and often does not, without modification, capture aggregate demand effects to decrease unemployment. In the past the JCT also had different behavioral responses within models (e.g., a high and low labor supply response in MEG). During this period, the JCT prepared five published macroeconomic estimates of legislative proposals: one (in 2003, for the Jobs and Growth Tax Relief Reconciliation Act, P.L. 108-27 ) that used MEG, GI, and OLG; two that used MEG only (the 2009 economic stimulus legislation and the 2009 Affordable Care Act) and two that used MEG and OLG (a bill extending bonus depreciation in 2014 and the Tax Reform Act of 2014). Several bills were examined but were too small for a macroeconomic analysis. The GI model was dropped after 2003, and the DSGE model was introduced in 2006. That model did not allow unemployment. None of the published analyses of legislation used the DSGE model. The JCT also provided illustrative analysis for different types of proposals on two occasions: to compare individual rate cuts, corporate rate cuts, and increases in the personal exemption in 2005 and to examine a revenue-neutral tax cut that broadened the individual income tax base and lowered the rate in 2006. The first analysis used MEG and the second used the MEG, OLG, and DSGE models. 2015-2018 During this period, dynamic estimates were required to be conducted for revenue and mandatory spending legislation that met the threshold of "major legislation" under both a House rule and budget resolutions. House Rule In 2015, the House replaced its former rule with House Rule XIII, clause 8. The new rule, which was in effect through 2018, expanded the type of legislation for which dynamic estimates were to be conducted to include not just revenue proposals, but also mandatory spending proposals. This meant that the rule now required dynamic estimates from CBO as well as JCT, but only for "major legislation," which was defined as (1) legislation that would be projected (in a conventional cost estimate) to cause an annual gross budgetary effect of at least 0.25% of projected U.S. GDP, (2) mandatory spending legislation designated as major legislation by the chair of the House Budget Committee, or (3) revenue legislation designated as major legislation by the chair or vice chair of the JCT. Although not explicitly stated in the new rule, the rules change resulted in dynamic estimates, for the first time, including a point estimate (i.e., a specific dollar amount) as opposed to a range of potential budgetary outcomes. Under this rule, the estimates would incorporate the budgetary effects of changes in economic output, employment, capital stock, and other macroeconomic variables resulting from such legislation. The estimate was, to the extent practicable, to include a qualitative assessment of the long-term budgetary effects and macroeconomic variables of such legislation, and to identify critical assumptions and the source of data underlying the estimate. Budget Resolutions During this period, Congress also used the budget resolution to direct CBO and JCT to provide dynamic estimates. The budget resolutions agreed to by both the House and Senate for fiscal years 2016 and 2018 included provisions that required dynamic estimates in both houses for the 114 th and 115 th Congresses. The requirements included in these provisions were very similar to the House rule described above. The dynamic estimates were required to be conducted for revenue and mandatory spending legislation that met the threshold of "major legislation." Major legislation was again described as legislation that would be projected (in a conventional cost estimate) to cause an annual gross budgetary effect of at least 0.25% of projected U.S. GDP, but this version of the rule excluded any legislation that met this criterion as a result of a timing shift. To accommodate the Senate's constitutional authority to approve treaties, the rule expanded the definition of major legislation to include any treaty with an impact of at least $15 billion in that fiscal year. And the definition of major legislation also included any mandatory spending legislation designated as major legislation by the chair of the House or Senate Budget Committee, or revenue legislation designated as major legislation by the chair or vice chair of the JCT. As with the House rule, these estimates were required to incorporate the budgetary effects of changes in economic output, employment, capital stock, and other macroeconomic variables resulting from such legislation. The estimate was, to the extent practicable, to include a qualitative assessment of the long-term budgetary effects and macroeconomic variables of such legislation, and to identify critical assumptions and the source of data underlying the estimate. For the Senate provision applying to the 115 th Congress, the estimates were to include the distributional effects across income categories, to the extent practicable. Although not explicitly stated in the provisions, the requirements resulted in dynamic estimates, including a point estimate (i.e., a specific dollar amount) as opposed to a range of potential budgetary outcomes. Although the House and Senate Budget Committees might presumably have used such point estimates as the official estimate for the purposes of budget enforcement (under the authority granted by Section 312 of the CBA), the Senate Budget Committee communicated that the dynamic estimates would be used for informational purposes only. Estimating Practices Estimates during the 2015-2018 period included a point estimate that provided a conventional estimate and the macroeconomic effects for a 10-year period. The JCT currently uses the three models previously discussed: MEG, OLG, and DSGE. In the past the JCT also had different behavioral responses within models (e.g., a high and low labor supply response in MEG). In 2014 JCT had only the MEG and OLG models; the first introduction of the DSGE model in a published estimate for legislation was in 2017. Discussions of the DSGE model in 2018 suggested that it now allowed unemployment. CBO has two models that assume full employment. One is a long-term model that CBO refers to as a "Solow growth model" and the other is a life cycle model. (The Solow growth model is similar to the long-term growth aspects of MEG and the life cycle model is an OLG model. The similarities reflect the way they incorporate behavioral responses.) The Solow model has stronger and weaker labor supply responses and the OLG model has alternative assumptions about how the model was to be closed and whether local or worldwide interest rates predominated. CBO also has a separate short-term model that can capture fiscal stimulus that reduces unemployment, while JCT combines short-term and long-term effects in its MEG and DSGE models. Beginning in 2003, JCT and CBO presented results from more than one model and with different behavioral assumptions within models. Beginning in 2015, when point estimates were provided, the JCT reported a single estimate that was a weighted average of the various models' point estimates. JCT provided information on the weights used, but did not separately report the different models' point estimates when more than one model was used. Also, in contrast to past informational macroeconomic modeling, there was no reported sensitivity analysis within the models (sensitivity analysis effectively measures how macroeconomic effects may change under different behavioral assumptions, such as how much a change in tax rates affects labor supply). In the four analyses that JCT reported on, in the first two cases (in 2015) only MEG, with the high rather than the low labor response assumption, was used. In the case of the major 2017 tax revision, MEG was weighted at 40%, OLG at 40%, and DSGE at 20%. In the final case, MEG was weighted at 40% and OLG and DSGE were each weighted at 30%. CBO and JCT jointly estimated the effects of some bills associated with repeal of the Affordable Care Act or modification of that act (JCT estimated certain tax provisions and CBO estimated the other provisions). JCT used the MEG model and CBO used its Solow model along with its short-term model, each with a single set of labor supply responses. CBO had been preparing macroeconomic analyses of the President's budget since 2003, reporting the results from multiple models and assumptions. When CBO prepared its standard analysis of the President's budget in 2015 and 2016, the analysis continued to report the results from both models, along with estimates of immigration's effect on productivity, with sensitivity analysis within the models leading to 16 different estimated effects on GDP over 10 years ranging from 0.7% to 2.8%. CBO has not prepared any subsequent macroeconomic analyses of the President's budget. Considerations for Congress Currently, no House or Senate rules explicitly require the preparation or use of dynamic estimates, and Congress may choose to examine what rules changes, if any, are needed in the area of dynamic estimates. While committees and Members continue to have the ability to request that CBO or JCT provide dynamic estimates for certain policies or legislative proposals, at some point Congress may choose to reinstitute explicit rules related to such dynamic estimates. These requirements could be articulated as formal direction from the committees of jurisdiction or leadership to JCT and CBO. Alternatively, as was done previously, these requirements might be included in chamber rules or in budget resolutions, or might be included in a standing order or in statute. If Congress were to reinstitute explicit rules related to dynamic estimates, it may choose to consider many facets of such potential rules: Will there be a threshold for the creation of such estimates? Should the proposal also allow the legislation to be designated as "major" by either majority or minority committee and/or chamber leadership? Should CBO and JCT provide dynamic estimates only for "major proposals," such as those that have a large estimated budgetary impact? If so, what will be the threshold for major? Past rules have used a measure equal to 0.25% of GDP. Would the effect on GDP be measured by the entire legislation, or would it be triggered by an individual provision or group of provisions (such as revenue raisers or revenue losers in a tax bill) that met the threshold? The latter approach would capture revenue-neutral legislation that nevertheless made significant changes that could affect GDP. Should rules for dynamic estimates apply to spending as well as revenue proposals since both have the potential to cause notable macroeconomic effects? And if the rule applies to spending, will it apply to discretionary spending that varies from the baseline as well as direct/mandatory spending? What information should be included in such estimates? Practices prior to 2015 provided insight into how sensitive the results were to choice of model and parameters. The JCT has also continued to present information on the parameters of its models that lead to behavioral responses. The justification for assigning model weights might also be addressed in more detail. Should dynamic estimates be used only for informational purposes, or also for enforcement purposes? Dynamic estimates allow Congress to weigh the merits of the legislationâshould they also be used to determine whether the legislation complies with the budgetary rules that Congress has created for itself? Should additional resources be provided to CBO and JCT so that they might develop greater capacity for providing dynamic estimates? Summary:	null	96	32,485	32,487	32,487	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction When Congress considers legislation, it takes into account the proposal's potential budgetary effects . This helps Members to weigh the legislation's merits, and to consider whether it complies with the budgetary rules that Congress has created for itself. While information on the potential budgetary effects of legislation may come from numerous sources, the authority to determine whether legislation complies with congressional budgetary rules is given to the House and Senate Budget Committees. In this capacity, the budget committees generally rely on estimates provided by the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT). As described in the following section, cost estimates provided by CBO and JCT are guided by certain requirements that Congress has articulated in different forms. These requirements are not completely prescriptive, however, and as a result both CBO and JCT adopt practices and conventions that guide the creation of cost estimates. Generally, CBO and JCT estimates include projections of the budgetary effects that would result from a proposed policy and incorporate anticipated individual behavioral responses to the policy. The estimates, however, do not typically include the macroeconomic effectsâeffects on the overall size of the economyâof those individual behavioral responses. Congress has sometimes required that JCT and CBO provide estimates that incorporate such macroeconomic effects. These estimates are often referred to as dynamic estimates or dynamic scores . This report provides information on the authorities and requirements under which cost estimates are prepared, as well as a summary of the debate surrounding dynamic cost estimates, and previous rules and requirements related to dynamic estimates. Currently, no congressional rules explicitly require dynamic estimates, and Congress may examine what rules changes, if any, are needed in the area of dynamic estimates. This report, therefore, includes information on options for the creation of dynamic scoring rules, and general considerations for Congress related to dynamic estimates. Authorities and Requirements Under Which Cost Estimates are Prepared Cost estimates provided by CBO and JCT are guided, in part, by certain requirements that have been articulated by Congress in different forms, as described below. The Congressional Budget Act The Congressional Budget Act (CBA) requires that CBO prepare cost estimates for all bills reported from committee, "to the extent practicable." The CBA also requires that (1) CBO rely on estimates provided by JCT for revenue legislation and (2) CBO include in its estimates "the costs which would be incurred" in carrying out the legislation in the fiscal year in which the legislation is to become effective, as well as the four following years, together with "the basis for such estimate." The Baseline When conducting cost estimates, CBO and JCT measure the budgetary effect of a legislative proposal in relation to projections of revenue and spending levels that are assumed to occur under current law, typically referred to as baseline levels. This means that the way a policy is reflected in the baseline will affect how CBO and JCT estimate a related policy. In calculating the baseline, CBO makes its own technical and economic assumptions, but the law generally requires that CBO assume that spending and revenue policies continue or expire based on what is currently slated to occur in statute. For example, CBO's baseline must assume that temporary tax cuts such as those enacted in 2017 actually do expire. The baseline, therefore, shows an increase in the level of revenue expected to be collected after the tax cut provisions expire in law. Therefore, a legislative proposal to continue those tax cut provisions would be scored as increasing the deficit. Although baseline calculations generally require that direct (mandatory) spending program levels reflect what is scheduled to occur in law, important exceptions exist for many direct spending programs. In particular, any program with estimated current year outlays greater than $50 million is assumed to continue to operate under the terms of the law at the time of its expiration. This means that some programs that are slated in law to expire are assumed to continue in the baseline. A legislative proposal that sought to merely continue those expired programs would therefore not be scored as new spending. Scorekeeping Guidelines When creating cost estimates, CBO adheres to scorekeeping guidelines, which are "specific rules for determining the budgetary effects of legislation." These general guidelines are used by the scorekeepersâthe House and Senate Budget Committees, CBO, and the Office of Management and Budget (OMB)âto ensure that each group uses consistent and established practices. The 17 scorekeeping guidelines include general principles, such as a requirement that mandatory spending provisions included in appropriations bills be counted against the Appropriations Committee spending allocation, and direction on how asset sales are to be scored. The guidelines have been revised and expanded over the years, and any changes or additions to the scorekeeping guidelines are first approved by each of the scorekeepers. Chamber Rules and the Budget Resolution Congress sometimes directs the creation and content of cost estimates through chamber rules and provisions contained in budget resolutions. As described subsequently, House rules have sometimes explicitly required CBO and JCT to include in cost estimates information on a policy proposal's projected macroeconomic feedback effects. Similarly, Congress has also used the budget resolution to provide direction on how a policy ought to be estimated. For example, budget resolutions have included provisions requiring that transfers from the Treasury's general fund to the Highway Trust Fund be counted as new spending. Similarly, budget resolutions have stated that certain policies cannot be counted as offsets, such as Federal Reserve System surpluses transferred to the Treasury's general fund, as well as increases or extensions of Freddie Mac and Fannie Mae guarantee fees. The Budget Committees and Tax Committees Congressional committees may also shape the content or creation of cost estimates. The House and Senate Budget Committees have jurisdiction over CBO, and the CBA specifies that CBO's "primary duty and function" is to assist the budget committees. Oversight of CBO, as well as the creation and content of cost estimates is, therefore, under the jurisdiction of the House and Senate Budget Committees, and the budget committees provide related guidance to CBO. For the JCT, the creation and content of its estimates may be shaped by the committee itself, or by guidance or assumptions of the tax committeesâthe House Committee on Ways and Means and the Senate Committee on Finance. Overview of Dynamic Estimating Generally, CBO and JCT estimates include projections of the budgetary effects that would result from proposed policy changes, and incorporate anticipated individual behavioral responses to the policy. The estimates, however, do not typically include the macroeconomic effects of those individual behavioral responses (such as changes in labor supply and the capital stock) that would alter GDP. For example, if an increase in the corporate tax rate caused corporations to use more debt, conventional estimates would take into account the loss of revenue since the returns from debt are taxed more lightly than the returns from equity, and this loss in revenue would offset the revenue gain calculated by multiplying the change in the tax rate by corporate income. The conventional estimate would not, however, take into account the lost revenue from a reduction in income if the rate increase caused a decline in investment, which affects production. These estimates without macroeconomic effects are sometimes imprecisely referred to as "static," but are referred to in this report as conventional estimates because they take into account many behavioral responses. In contrast, a dynamic score aims to account for legislation's macroeconomic effect, by incorporating changes to (1) aggregate demand for goods and services to increase output in an underemployed economy and/or (2) aggregate supply of goods and services ( supply - side effects ) to increase potential output. For example, dynamic scoring can include fiscal stimulus effects that increase aggregate demand. These effects occur when the economy is underemployed (for example, during and after a recession), and increased spending either by the government or from taxpayers after a tax cut can expand the economy through multiplier effects and cause output to move closer to potential output. These effects are referred to subsequently as demand - side effects . Supply-side effects occur if potential output is altered due to changes in investment or savings that increase the capital stock, labor supply, or productivity. The crowding-out (or -in) effect occurs when an increase (or decrease) in the deficit reduces (or increases) funds available for private investment and hence reduces (or increases) the capital stock. Increased Interest in Dynamic Estimating Congressional interest in dynamic estimating has increased in recent decades. This interest may be attributed to the increase in the number of House and Senate rules restricting budgetary legislation. Because bills and resolutions are expected to comply with these congressional rules, estimates of a measure's fiscal impact arguably become more important. Interest in dynamic scoring is also likely related to recent advancements in economic analysis and economic modeling that make estimating macroeconomic feedback effects possible. Views on Dynamic Estimating Both proponents and opponents of dynamic estimating point to accuracy and consistency as their primary objectives. Some have suggested that dynamic scoring is useful, but only under certain circumstances. Arguments for Dynamic Estimating Arguments in favor of dynamic scoring include the view that dynamic scoring provides a more accurate assessment of budgetary impact than conventional scoring, particularly for some types of legislative proposals, and that conventional estimating methods produce a projection that does not reflect the actual expected impact on revenues. Under this argument, dynamic scoring makes use of all available information, and excluding macroeconomic feedback effects "amounts to throwing away valuable information." It has also been argued that including macroeconomic effects can improve Congress's ability to compare competing policy proposals. Arguments in favor of dynamic scoring state that these estimates are required for the sake of consistency, especially for large legislative packages that would likely affect the economy. As stated above, a legislative proposal's budgetary impact is measured against a baseline, and that baseline takes into account macroeconomic assumptions. It is, therefore, argued that certain legislative proposals should also take into account economic assumptions. If such legislation were to be enacted into law, CBO would then build that policy into its baseline, and would have to make assumptions about the macroeconomic feedback effects that would be expected to occur under those policies. It is only consistent, the argument goes, to use macroeconomic feedback effects in the initial estimate of the legislation as well. Advocates for dynamic scoring also state that not using a dynamic approach to measure the impact of policy changes biases the legislative process against policy proposals that are designed to encourage productive economic activity. Some have argued that under conventional estimating methods, the impact of a cut in the marginal tax rates, for example, is viewed (through the lens of budgetary outcomes) less favorably than it should be. It has also been argued that, methodologically, the production of quality dynamic estimates is now possible due to technical advances in modeling and analysis, and an increase in evidence showing public responses to policy changes. Some have pointed out that both CBO and JCT are capable of producing dynamic estimates, and JCT staff have stated that, with regard to macroeconomic estimates, "we think we have been producing reasonable results for over a decade (though we welcome comments and discussion)." Arguments Against Dynamic Estimating Likewise, arguments against dynamic estimates also point to concerns about accuracy and consistency. Those who oppose the use of dynamic scoring argue that projected macroeconomic feedback effects are too uncertain to be relied upon as accurate projections of budgetary outcomes. Projecting macroeconomic feedback effects requires economic modeling, and it has been said that "because reasonable people can disagree about what model, and what parameters of that model, are best, the results from dynamic scoring will always be controversial." Previous macroeconomic analyses by CBO and JCT have yielded a range of estimates depending on what type of model is used and the underlying behavioral assumptions in each model. With assumptions about the behavioral responses that determine macroeconomic feedback being so uncertain, it has been argued that there is consistency in assuming, for all legislative proposals, that GDP remains the same, regardless of changes in tax or spending policy. Arguments against dynamic scoring often point to potential problems with cost estimating in general, but note that under dynamic scoring these vulnerabilities may be exacerbated. For example, as mentioned above, all cost estimates are inherently uncertain. Dynamic estimates are always subject to more uncertainty, even for relatively simple tax changes, because of the uncertainty of taxpayer responses (such as consumer spending and labor supply). In contrast, many conventional estimates (such as the effect of rate changes in the tax code or changes to exemptions and deductions) may be estimated quite precisely because data are readily available on income levels and family characteristics. Similarly, while cost estimates generally might always have the potential to be perceived as subject to manipulation by political forces, it has been argued that this possibility is exacerbated with dynamic scoring, which might damage the budget process's credibility. Arguments for Dynamic Estimating Under Certain Circumstances Some have argued that dynamic estimates would be useful for Congress but only in certain situations. It has been argued that dynamic estimates should be provided by CBO and JCT but only for "major proposals" such as those that have a large estimated budgetary impact or those designated as "major" by either majority or minority committee and/or chamber leadership. (Recent dynamic scoring rules [discussed below] used a similar threshold.) It has been stated that neither CBO nor JCT have sufficient time or staff to carefully estimate the macroeconomic effects of every proposal for which they must conduct an estimate. (To this end, it has also been argued that dynamic estimates should be conducted only when CBO and JCT have the time and tools necessary to conduct the analysis.) Further, it has been stated that dynamic estimates should be conducted for spending as well as revenue proposals because each have the potential to produce notable macroeconomic effects. (As stated below, in some years dynamic estimates were required only for revenue legislation.) It has also been argued that dynamic estimates should be provided for discretionary spending as well as direct/mandatory spending. As stated below, even when dynamic scoring requirements applied to spending as well as revenue, these rules excluded discretionary spending legislation (i.e., appropriations legislation). Previous Dynamic Scoring Rules and Requirements While committees and Members continue to have the ability to request that CBO or JCT provide dynamic estimates for certain policies or legislative proposals, for the first time in decades there are no explicit congressional rules or requirements that pertain specifically to the preparation or use of such estimates. As described below, rules related to dynamic estimates have varied over the years. 1997-2002 In January 1997, the House first adopted a rule that explicitly mentioned dynamic estimates. It stated that a dynamic estimate provided by JCT could be included in the committee report accompanying "major tax legislation" (as designated by the House majority leader), but that the estimate could be used "for informational purposes only." The rule, which was in effect through 2002, defined a dynamic estimate as "a projection based in any part on assumptions concerning probable effects of macroeconomic feedback" and required that the estimate include a statement identifying all such assumptions. When the new rule was adopted in January 1997, JCT staff hosted a symposium entitled "Modeling the Macroeconomic Consequences of Tax Policy." According to JCT This symposium presented the results of a year-long modeling experiment by economists noted for their work in developing models of the U.S. economy. The purpose of this experiment was to explore the predictions of a variety of models regarding the macroeconomic feedback effects of major changes in the U.S. tax code with a focus on evaluating the feasibility of using these types of results to enhance the U.S. budgeting process. 2003-2014 In January 2003, the House replaced its previous dynamic scoring rule with a more extensive rule, which remained in effect through 2014. Whereas the previous rule had permitted a dynamic estimate to be included in a committee report, the new House rule required it. Further, whereas the previous rule had applied only to bills designated as "major tax legislation," the new rule applied to any bill reported by the House Committee on Ways and Means that proposed to amend the Internal Revenue Code. The new rule also omitted the previous provision that explicitly required the estimate be "used for informational purposes only." The new rule no longer used the term "dynamic estimate" but instead used the term "macroeconomic impact analysis," which the rule defined as an estimate provided by JCT "of the changes in economic output, employment, capital stock, and tax revenues expected to result from enactment of the proposal." The estimate was required to identify critical assumptions and the source of data underlying that estimate. Around the time of the rule's adoption in 2003, the JCT released a report providing an overview of the joint committee's efforts to model macroeconomic effects of proposed tax legislation. While varying in length and detail, the macroeconomic analyses provided by JCT during this period (2003-2014) included information on the expected macroeconomic effects (if any) of the proposed legislation, provided general conclusions, and sometimes provided a range of potential budgetary effects using different models and different assumptions within models. The analyses did not include a specific dollar amount or point estimate . These analyses also reported details of the effects on different aspects of the economy (such as labor supply, output, and capital stock). In addition, the estimates often referenced the model(s) used for the analysis. During this time the JCT used four different types of models. Crucially, all of these models incorporated the impact of supply-side effects in their dynamic estimates. Only the MEG and GI model also incorporated demand-side effects (for a brief discussion of these effects, see " Overview of Dynamic Estimating "). The models are briefly described below: 1. MEG: a macroeconomic growth (MEG) model that incorporates aggregate demand effects similar to those in most economic forecasting models and includes labor and savings responses. (This model falls into a class of steady state growth models called Solow models, discussed below.) 2. OLG: an overlapping generations (OLG) life-cycle model that assumes that generations of individuals optimize choices of consumption and leisure over a lifetime and cannot include demand-side effects. 3. GI: a Global Insight (GI) private econometric forecasting model that captures demand-side effects. 4. DSGE: a domestic stochastic general equilibrium (DSGE) model that assumes that individuals optimize over infinite lifetimes and often does not, without modification, capture aggregate demand effects to decrease unemployment. In the past the JCT also had different behavioral responses within models (e.g., a high and low labor supply response in MEG). During this period, the JCT prepared five published macroeconomic estimates of legislative proposals: one (in 2003, for the Jobs and Growth Tax Relief Reconciliation Act, P.L. 108-27 ) that used MEG, GI, and OLG; two that used MEG only (the 2009 economic stimulus legislation and the 2009 Affordable Care Act) and two that used MEG and OLG (a bill extending bonus depreciation in 2014 and the Tax Reform Act of 2014). Several bills were examined but were too small for a macroeconomic analysis. The GI model was dropped after 2003, and the DSGE model was introduced in 2006. That model did not allow unemployment. None of the published analyses of legislation used the DSGE model. The JCT also provided illustrative analysis for different types of proposals on two occasions: to compare individual rate cuts, corporate rate cuts, and increases in the personal exemption in 2005 and to examine a revenue-neutral tax cut that broadened the individual income tax base and lowered the rate in 2006. The first analysis used MEG and the second used the MEG, OLG, and DSGE models. 2015-2018 During this period, dynamic estimates were required to be conducted for revenue and mandatory spending legislation that met the threshold of "major legislation" under both a House rule and budget resolutions. House Rule In 2015, the House replaced its former rule with House Rule XIII, clause 8. The new rule, which was in effect through 2018, expanded the type of legislation for which dynamic estimates were to be conducted to include not just revenue proposals, but also mandatory spending proposals. This meant that the rule now required dynamic estimates from CBO as well as JCT, but only for "major legislation," which was defined as (1) legislation that would be projected (in a conventional cost estimate) to cause an annual gross budgetary effect of at least 0.25% of projected U.S. GDP, (2) mandatory spending legislation designated as major legislation by the chair of the House Budget Committee, or (3) revenue legislation designated as major legislation by the chair or vice chair of the JCT. Although not explicitly stated in the new rule, the rules change resulted in dynamic estimates, for the first time, including a point estimate (i.e., a specific dollar amount) as opposed to a range of potential budgetary outcomes. Under this rule, the estimates would incorporate the budgetary effects of changes in economic output, employment, capital stock, and other macroeconomic variables resulting from such legislation. The estimate was, to the extent practicable, to include a qualitative assessment of the long-term budgetary effects and macroeconomic variables of such legislation, and to identify critical assumptions and the source of data underlying the estimate. Budget Resolutions During this period, Congress also used the budget resolution to direct CBO and JCT to provide dynamic estimates. The budget resolutions agreed to by both the House and Senate for fiscal years 2016 and 2018 included provisions that required dynamic estimates in both houses for the 114 th and 115 th Congresses. The requirements included in these provisions were very similar to the House rule described above. The dynamic estimates were required to be conducted for revenue and mandatory spending legislation that met the threshold of "major legislation." Major legislation was again described as legislation that would be projected (in a conventional cost estimate) to cause an annual gross budgetary effect of at least 0.25% of projected U.S. GDP, but this version of the rule excluded any legislation that met this criterion as a result of a timing shift. To accommodate the Senate's constitutional authority to approve treaties, the rule expanded the definition of major legislation to include any treaty with an impact of at least $15 billion in that fiscal year. And the definition of major legislation also included any mandatory spending legislation designated as major legislation by the chair of the House or Senate Budget Committee, or revenue legislation designated as major legislation by the chair or vice chair of the JCT. As with the House rule, these estimates were required to incorporate the budgetary effects of changes in economic output, employment, capital stock, and other macroeconomic variables resulting from such legislation. The estimate was, to the extent practicable, to include a qualitative assessment of the long-term budgetary effects and macroeconomic variables of such legislation, and to identify critical assumptions and the source of data underlying the estimate. For the Senate provision applying to the 115 th Congress, the estimates were to include the distributional effects across income categories, to the extent practicable. Although not explicitly stated in the provisions, the requirements resulted in dynamic estimates, including a point estimate (i.e., a specific dollar amount) as opposed to a range of potential budgetary outcomes. Although the House and Senate Budget Committees might presumably have used such point estimates as the official estimate for the purposes of budget enforcement (under the authority granted by Section 312 of the CBA), the Senate Budget Committee communicated that the dynamic estimates would be used for informational purposes only. Estimating Practices Estimates during the 2015-2018 period included a point estimate that provided a conventional estimate and the macroeconomic effects for a 10-year period. The JCT currently uses the three models previously discussed: MEG, OLG, and DSGE. In the past the JCT also had different behavioral responses within models (e.g., a high and low labor supply response in MEG). In 2014 JCT had only the MEG and OLG models; the first introduction of the DSGE model in a published estimate for legislation was in 2017. Discussions of the DSGE model in 2018 suggested that it now allowed unemployment. CBO has two models that assume full employment. One is a long-term model that CBO refers to as a "Solow growth model" and the other is a life cycle model. (The Solow growth model is similar to the long-term growth aspects of MEG and the life cycle model is an OLG model. The similarities reflect the way they incorporate behavioral responses.) The Solow model has stronger and weaker labor supply responses and the OLG model has alternative assumptions about how the model was to be closed and whether local or worldwide interest rates predominated. CBO also has a separate short-term model that can capture fiscal stimulus that reduces unemployment, while JCT combines short-term and long-term effects in its MEG and DSGE models. Beginning in 2003, JCT and CBO presented results from more than one model and with different behavioral assumptions within models. Beginning in 2015, when point estimates were provided, the JCT reported a single estimate that was a weighted average of the various models' point estimates. JCT provided information on the weights used, but did not separately report the different models' point estimates when more than one model was used. Also, in contrast to past informational macroeconomic modeling, there was no reported sensitivity analysis within the models (sensitivity analysis effectively measures how macroeconomic effects may change under different behavioral assumptions, such as how much a change in tax rates affects labor supply). In the four analyses that JCT reported on, in the first two cases (in 2015) only MEG, with the high rather than the low labor response assumption, was used. In the case of the major 2017 tax revision, MEG was weighted at 40%, OLG at 40%, and DSGE at 20%. In the final case, MEG was weighted at 40% and OLG and DSGE were each weighted at 30%. CBO and JCT jointly estimated the effects of some bills associated with repeal of the Affordable Care Act or modification of that act (JCT estimated certain tax provisions and CBO estimated the other provisions). JCT used the MEG model and CBO used its Solow model along with its short-term model, each with a single set of labor supply responses. CBO had been preparing macroeconomic analyses of the President's budget since 2003, reporting the results from multiple models and assumptions. When CBO prepared its standard analysis of the President's budget in 2015 and 2016, the analysis continued to report the results from both models, along with estimates of immigration's effect on productivity, with sensitivity analysis within the models leading to 16 different estimated effects on GDP over 10 years ranging from 0.7% to 2.8%. CBO has not prepared any subsequent macroeconomic analyses of the President's budget. Considerations for Congress Currently, no House or Senate rules explicitly require the preparation or use of dynamic estimates, and Congress may choose to examine what rules changes, if any, are needed in the area of dynamic estimates. While committees and Members continue to have the ability to request that CBO or JCT provide dynamic estimates for certain policies or legislative proposals, at some point Congress may choose to reinstitute explicit rules related to such dynamic estimates. These requirements could be articulated as formal direction from the committees of jurisdiction or leadership to JCT and CBO. Alternatively, as was done previously, these requirements might be included in chamber rules or in budget resolutions, or might be included in a standing order or in statute. If Congress were to reinstitute explicit rules related to dynamic estimates, it may choose to consider many facets of such potential rules: Will there be a threshold for the creation of such estimates? Should the proposal also allow the legislation to be designated as "major" by either majority or minority committee and/or chamber leadership? Should CBO and JCT provide dynamic estimates only for "major proposals," such as those that have a large estimated budgetary impact? If so, what will be the threshold for major? Past rules have used a measure equal to 0.25% of GDP. Would the effect on GDP be measured by the entire legislation, or would it be triggered by an individual provision or group of provisions (such as revenue raisers or revenue losers in a tax bill) that met the threshold? The latter approach would capture revenue-neutral legislation that nevertheless made significant changes that could affect GDP. Should rules for dynamic estimates apply to spending as well as revenue proposals since both have the potential to cause notable macroeconomic effects? And if the rule applies to spending, will it apply to discretionary spending that varies from the baseline as well as direct/mandatory spending? What information should be included in such estimates? Practices prior to 2015 provided insight into how sensitive the results were to choice of model and parameters. The JCT has also continued to present information on the parameters of its models that lead to behavioral responses. The justification for assigning model weights might also be addressed in more detail. Should dynamic estimates be used only for informational purposes, or also for enforcement purposes? Dynamic estimates allow Congress to weigh the merits of the legislationâshould they also be used to determine whether the legislation complies with the budgetary rules that Congress has created for itself? Should additional resources be provided to CBO and JCT so that they might develop greater capacity for providing dynamic estimates?	Summary:	gov_report	1,024	null	62
crs_R46002	crs_R46002_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Background In an Executive Order (E.O. 13767) released during President Donald Trump's first week in office, on January 25, 2017, he declared, "It is the policy of the executive branch to â¦ secure the southern border of the United States through the immediate construction of a physical wall on the southern border â¦ [and] 'Wall' shall mean a contiguous, physical or other similarly secure, contiguous, and impassable physical barrier." The Trump Administration has consistently pursued the deployment of fencing, walls, and other barriers along the U.S.-Mexico border as a high priority. On April 4, 2018, the President, citing "a drastic surge of activity on the southern border," directed the Secretary of Defense, the Attorney General, and the Secretary of Homeland Security to coordinate action on securing the U.S. southern border "to stop the flow of deadly drugs and other contraband, gang members and other criminals, and illegal aliens into this country." The President further directed DOD to mobilize the National Guard to support DHS at the border and to develop a plan for tapping additional military resources using executive authorities. Later that year, as part of budget negotiations over a FY2019 appropriations package, the Administration submitted a supplemental request of $5.7 billion for "construction of a steel barrier for the Southwest border." The new funding request became the focal point of a partial government shutdown that began on December 22, 2018, and lasted 35 days, the longest on record. Unsatisfied with the negotiated agreementâwhich provided $1.375 billion of the Administration's supplemental $5.7 billion requestâPresident Trump declared a national state of emergency and undertook a series of executive actions that redirected $6.1 billion in DOD funds for border barrier construction using a combination of authorities. The Administration's plans were described in a fact sheet entitled, President Donald J. Trump 's Border Security Victory (hereinafter referred to as the factsheet ), and included $2.5 billion in defense funds authorized under (nonemergency authority of) 10 U.S.C. Â§284â Support for counterdrug activities and activities to counter transnational organized crime . $3.6 billion in defense funds authorized under (emergency authority of) Title 10 U.S.C. Â§2808â Construction authority in the event of a declaration of war or national emergency . This report is intended to provide a chronological summary of internal and interagency communication related to DOD's execution of President Trump's border wall funding plan. The information provided here has been drawn chiefly from court exhibits and declarations in ongoing legal proceedings. CRS has not independently authenticated the sworn declarations and accompanying documents submitted by litigants as part of legal proceedings. Summary of 10 U.S.C. Â§284 Internal and Interagency Correspondence A declaration in court records describing communications with DOD suggests that DOD anticipated the use of 10 U.S.C. Â§284 to fund border barrier projects in early 2018 when the Under Secretary of Defense (Comptroller) temporarily froze $947 million in unobligated funds from the defense Drug Interdiction and Counter-Drug Activities account for possible construction of barriers on the Southwest Border. The frozen FY2018 appropriations were released beginning in July 2018, the final quarter of FY2018. In April 2018, DOD created a new office within the Department called the b order s ecurity s upport c ell with responsibility for coordinating and managing all border related issues. Assistant Secretary of Defense for Homeland Defense and Global Security, (ASD[HD&GS]) Kenneth Rapuano led the effort. In a letter to DOD dated February 25, 2019, following the release of the Administration's factsheet plan, DHS formally requested that the Defense Department support its ability to impede and deny illegal entry and drug smuggling activities along the southwest U.S.-Mexico border by assisting with the construction (or replacement) of fences, roads, and lighting. DHS specifically requested that DOD fund a total of 11 border barrier projects on federal lands. In a written reply dated March 25, 2019, to Acting Secretary of Homeland Security Kirstjen Nielsen, Acting Secretary of Defense Patrick Shanahan affirmed that the U.S. Army Corps of Engineers (USACE) would undertake the planning and construction of approved projects and, upon completion, hand over custody of all new infrastructure to DHS. Between March and April 2019, DOD approved $2.5 billion for seven of the border barrier projects requested by DHS and funded them in two tranches drawn from reprogrammed defense program savings. DOD completed a transfer of $1 billion for three projects (El Paso Sector Project 1 and Yuma Sector Projects 1-2) on March 26, 2019. On May 9, 2019, the Department completed a second transfer of $1.5 billion for four additional projects (El Centro Sector Project 1 and Tucson Sector Projects 1-3). The obligation of these funds was temporarily suspended by court injunctions between May and July 2019 issued in a lawsuit that challenged the legal basis of DOD's reprogramming actions. On July 26, 2019, the U.S. Supreme Court lifted the lower court's injunction, allowing work to once again proceed. Litigation in this case (and related) lawsuits remains ongoing. In August 2019, DHS notified DOD that new estimates indicated construction costs would be lower than first projected, resulting in an overall funding surplus. DHS requested the anticipated savings be applied to the execution of three additional projects. DOD approved the request but later terminated the plan after savings proved insufficient. On September 30, 2019, DOD announced the transfer of an additional $129 million in expiring FY2019 appropriations drawn from counternarcotics accounts that Military Departments determined were excess to need. The Department also stated USACE would require an additional $90 million in FY2020 funds for the management and oversight of border barrier projects underway. Unlike the Administration's use of the previous $2.5 billion in transfers, which derived largely from defense program savings drawn from non -drug related appropriations, the Administration plans to fund the anticipated costs in FY2020 from appropriations made directly to the counternarcotic account. On January 14, 2020, DHS requested DOD provide additional assistance, pursuant to 10 U.S.C. Â§284, with the construction of 38 new border barrier projects (and project segments) along drug smuggling corridors. On February 13, 2020, DOD approved 31 of these items and reprogrammed $3.8 billion in FY2020 military procurement funds for their execution. All $3.8 billion in reprogrammed funds were drawn from congressional special interest items included in the final FY2020 defense appropriation, P.L. 116-93 . Summary of 10 U.S.C. Â§2808 Internal and Interagency Correspondence Unlike DOD's use of 10 U.S.C. Â§284 transfer authority, which the Department began executing almost immediately following the release of the President's factsheet , its determination to exercise emergency statute 10 U.S.C. Â§2808 was the result of approximately eight months of additional deliberations. These deliberations included two assessments by the Chairman of the Joint Chiefs of Staff (CJCS) to determine whether the construction of border barriers qualified as a legitimate use under the requirements of 10 U.S.C. Â§2808. The statute specifies that new construction must support the use of armed forces mobilized to address a national emergency declared by the President. On February 11, 2019, CJCS provided a preliminary assessment to the Acting Secretary of Defense that broadly assessed the utility of physical barriers on DHS operations, as well as ongoing demand for DOD support. The report acknowledged empirical challenges associated with quantifying the effectiveness of physical barriers on migration flows "because reliable data is scarce and opinions are divergent," but pointed to anecdotal and historical evidence to suggest that barriers might reasonably be expected to reduce the demand for DOD resources over time: Although military construction projects along the southern border may not alleviate all DHS requirements for DoD support, the construction of physical barriers should reduce the challenges to CBP and, therefore, can be reasonably expected to reduce DHS requirements for DoD support. On February 18, 2019, following the release of the Administration's factsheet plan, DOD requested that DHS provide a prioritized list of projects along with a supplemental analysis explaining how the construction would support military personnel pursuant to 10 U.S.C. Â§2808. DHS responded in March with the detailed information, characterizing the projects as force multipliers for mobilized DOD personnel: Because the requested projects will serve as force multiplier, it will also likely reduce DHS's reliance on DoD for force protection, surveillance support, engineering support, air support, logistical support, and strategic communications assistance. In other words, providing border barriers and the accompanies [sic] roads and technology will allow DoD to focus its efforts on a smaller, more focused area. In April 2019, having received the list of DHS projects, the Secretary of Defense requested the CJCS conduct a second, more detailed analysis of proposed construction and return with a recommendation on how to proceed. Concurrently, the Secretary directed the Under Secretary of Defense (Comptroller) to begin identifying $3.6 billion in existing military construction projects that might be deferred by use of the emergency authority under the statute. In a memorandum report dated May 2019, CJCS General Joseph Dunford delivered his final assessment to Acting Secretary of Defense Shanahan. The report's methodology was based on the presumption that while any barrier construction along the border could reasonably be expected to create "ripple effects" that would support the use of the armed forces, projects more beneficial than others should be prioritized, based on factors identified by DOD. The analysis assessed border barrier projects DHS had requested under 10 U.S.C. Â§2808, as well as those projects not funded by previous transfers under 10 U.S.C. Â§284. Though the CJCS team considered the type of land associated with each project area (federal or private), it developed a prioritization scheme that was missing key details related to land jurisdiction. As a consequence, the CJCS' final recommendations were later revised and included in an action memorandum to the Secretary of Defense on August 21, 2019. On September 3, 2019, Secretary of Defense Mark Esper, having determined that border barrier construction would serve as a "force multiplier" for reducing DHS's demand for DOD personnel and assets, directed the Acting Secretary of the Army to proceed with the construction of 11 DHS border barrier projects, and the deferral of approximately 127 existing military construction projects ($3.6 billion). In a public briefing later that day, DOD officials described a plan for deferring in stages, otherwise authorized military construction projects under 10 U.S.C. Â§2808 authority. Those military construction projects located at non-U.S. locations ($1.8 billion) would be deferred first, followed later by projects within the United States. ($1.8 billion). Officials stated The intent is prioritizing funds in this manner is to provide time to work with Congress to determine opportunities to restore funds, as well as work with our allies and partners on improving burden sharing for overseas construction projects. USACE has noted that the pace for obligating military construction (MILCON) funds for border barrier construction projects will be highly dependent on project location, since land must first be administratively transferred to the Department of the Army before work can proceed. Construction on land that currently falls under the jurisdiction of DOD can be undertaken relatively quickly, since the military effectively manages the parcels. Projects in locations that fall under one or more other federal jurisdictions may be delayed while transfers are negotiated. Projects on private land are expected to take the longest to complete, since the government must first obtain administrative jurisdiction of the land by either purchase or condemnation. On September 18, 2019, Department of the Interior (DOI) issued Public Land Orders that transferred jurisdiction of land required for five of projects for a period of three years to DOD. Detailed Chronologies and Selected Documents This section provides a detailed overview of key documents related to the Administration's use of 10 U.S.C. 284 and 10 U.S.C. 2808 to fund border barriers. The tables that follow each include a summary of source documents, citations, and links that allow readers to access the associated materials directly. (Due to technical considerations, documents are only made available to congressional users.) Table 1 , CRS Document Compilations , contains a collection of reference documents that CRS has compiled for the convenience of users. These include court declarations that do not fit neatly into a chronological framework and documents that describe activities that may be grouped as a single action (e.g., multiple reprogramming actions on the same date for an identical purpose). Where Table 1 documents are cited elsewhere in this report, they are identified by the record's "Short Title" shown in the indicated column. Table 2 , Chronology of 10 U.S.C. 284 Decisionm aking , and Table 3 , Chronology of 10 U.S.C. 2808 Decisionmaking, summarize actions related to each respective authority. The separate tables reflect the fact that interagency decisionmaking has generally operated along separate tracks; deliberations related to 10 U.S.C. 2808 were kept separate from correspondence related to 10 U.S.C. 284. Summary:	null	96	14,182	14,184	14,184	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Background In an Executive Order (E.O. 13767) released during President Donald Trump's first week in office, on January 25, 2017, he declared, "It is the policy of the executive branch to â¦ secure the southern border of the United States through the immediate construction of a physical wall on the southern border â¦ [and] 'Wall' shall mean a contiguous, physical or other similarly secure, contiguous, and impassable physical barrier." The Trump Administration has consistently pursued the deployment of fencing, walls, and other barriers along the U.S.-Mexico border as a high priority. On April 4, 2018, the President, citing "a drastic surge of activity on the southern border," directed the Secretary of Defense, the Attorney General, and the Secretary of Homeland Security to coordinate action on securing the U.S. southern border "to stop the flow of deadly drugs and other contraband, gang members and other criminals, and illegal aliens into this country." The President further directed DOD to mobilize the National Guard to support DHS at the border and to develop a plan for tapping additional military resources using executive authorities. Later that year, as part of budget negotiations over a FY2019 appropriations package, the Administration submitted a supplemental request of $5.7 billion for "construction of a steel barrier for the Southwest border." The new funding request became the focal point of a partial government shutdown that began on December 22, 2018, and lasted 35 days, the longest on record. Unsatisfied with the negotiated agreementâwhich provided $1.375 billion of the Administration's supplemental $5.7 billion requestâPresident Trump declared a national state of emergency and undertook a series of executive actions that redirected $6.1 billion in DOD funds for border barrier construction using a combination of authorities. The Administration's plans were described in a fact sheet entitled, President Donald J. Trump 's Border Security Victory (hereinafter referred to as the factsheet ), and included $2.5 billion in defense funds authorized under (nonemergency authority of) 10 U.S.C. Â§284â Support for counterdrug activities and activities to counter transnational organized crime . $3.6 billion in defense funds authorized under (emergency authority of) Title 10 U.S.C. Â§2808â Construction authority in the event of a declaration of war or national emergency . This report is intended to provide a chronological summary of internal and interagency communication related to DOD's execution of President Trump's border wall funding plan. The information provided here has been drawn chiefly from court exhibits and declarations in ongoing legal proceedings. CRS has not independently authenticated the sworn declarations and accompanying documents submitted by litigants as part of legal proceedings. Summary of 10 U.S.C. Â§284 Internal and Interagency Correspondence A declaration in court records describing communications with DOD suggests that DOD anticipated the use of 10 U.S.C. Â§284 to fund border barrier projects in early 2018 when the Under Secretary of Defense (Comptroller) temporarily froze $947 million in unobligated funds from the defense Drug Interdiction and Counter-Drug Activities account for possible construction of barriers on the Southwest Border. The frozen FY2018 appropriations were released beginning in July 2018, the final quarter of FY2018. In April 2018, DOD created a new office within the Department called the b order s ecurity s upport c ell with responsibility for coordinating and managing all border related issues. Assistant Secretary of Defense for Homeland Defense and Global Security, (ASD[HD&GS]) Kenneth Rapuano led the effort. In a letter to DOD dated February 25, 2019, following the release of the Administration's factsheet plan, DHS formally requested that the Defense Department support its ability to impede and deny illegal entry and drug smuggling activities along the southwest U.S.-Mexico border by assisting with the construction (or replacement) of fences, roads, and lighting. DHS specifically requested that DOD fund a total of 11 border barrier projects on federal lands. In a written reply dated March 25, 2019, to Acting Secretary of Homeland Security Kirstjen Nielsen, Acting Secretary of Defense Patrick Shanahan affirmed that the U.S. Army Corps of Engineers (USACE) would undertake the planning and construction of approved projects and, upon completion, hand over custody of all new infrastructure to DHS. Between March and April 2019, DOD approved $2.5 billion for seven of the border barrier projects requested by DHS and funded them in two tranches drawn from reprogrammed defense program savings. DOD completed a transfer of $1 billion for three projects (El Paso Sector Project 1 and Yuma Sector Projects 1-2) on March 26, 2019. On May 9, 2019, the Department completed a second transfer of $1.5 billion for four additional projects (El Centro Sector Project 1 and Tucson Sector Projects 1-3). The obligation of these funds was temporarily suspended by court injunctions between May and July 2019 issued in a lawsuit that challenged the legal basis of DOD's reprogramming actions. On July 26, 2019, the U.S. Supreme Court lifted the lower court's injunction, allowing work to once again proceed. Litigation in this case (and related) lawsuits remains ongoing. In August 2019, DHS notified DOD that new estimates indicated construction costs would be lower than first projected, resulting in an overall funding surplus. DHS requested the anticipated savings be applied to the execution of three additional projects. DOD approved the request but later terminated the plan after savings proved insufficient. On September 30, 2019, DOD announced the transfer of an additional $129 million in expiring FY2019 appropriations drawn from counternarcotics accounts that Military Departments determined were excess to need. The Department also stated USACE would require an additional $90 million in FY2020 funds for the management and oversight of border barrier projects underway. Unlike the Administration's use of the previous $2.5 billion in transfers, which derived largely from defense program savings drawn from non -drug related appropriations, the Administration plans to fund the anticipated costs in FY2020 from appropriations made directly to the counternarcotic account. On January 14, 2020, DHS requested DOD provide additional assistance, pursuant to 10 U.S.C. Â§284, with the construction of 38 new border barrier projects (and project segments) along drug smuggling corridors. On February 13, 2020, DOD approved 31 of these items and reprogrammed $3.8 billion in FY2020 military procurement funds for their execution. All $3.8 billion in reprogrammed funds were drawn from congressional special interest items included in the final FY2020 defense appropriation, P.L. 116-93 . Summary of 10 U.S.C. Â§2808 Internal and Interagency Correspondence Unlike DOD's use of 10 U.S.C. Â§284 transfer authority, which the Department began executing almost immediately following the release of the President's factsheet , its determination to exercise emergency statute 10 U.S.C. Â§2808 was the result of approximately eight months of additional deliberations. These deliberations included two assessments by the Chairman of the Joint Chiefs of Staff (CJCS) to determine whether the construction of border barriers qualified as a legitimate use under the requirements of 10 U.S.C. Â§2808. The statute specifies that new construction must support the use of armed forces mobilized to address a national emergency declared by the President. On February 11, 2019, CJCS provided a preliminary assessment to the Acting Secretary of Defense that broadly assessed the utility of physical barriers on DHS operations, as well as ongoing demand for DOD support. The report acknowledged empirical challenges associated with quantifying the effectiveness of physical barriers on migration flows "because reliable data is scarce and opinions are divergent," but pointed to anecdotal and historical evidence to suggest that barriers might reasonably be expected to reduce the demand for DOD resources over time: Although military construction projects along the southern border may not alleviate all DHS requirements for DoD support, the construction of physical barriers should reduce the challenges to CBP and, therefore, can be reasonably expected to reduce DHS requirements for DoD support. On February 18, 2019, following the release of the Administration's factsheet plan, DOD requested that DHS provide a prioritized list of projects along with a supplemental analysis explaining how the construction would support military personnel pursuant to 10 U.S.C. Â§2808. DHS responded in March with the detailed information, characterizing the projects as force multipliers for mobilized DOD personnel: Because the requested projects will serve as force multiplier, it will also likely reduce DHS's reliance on DoD for force protection, surveillance support, engineering support, air support, logistical support, and strategic communications assistance. In other words, providing border barriers and the accompanies [sic] roads and technology will allow DoD to focus its efforts on a smaller, more focused area. In April 2019, having received the list of DHS projects, the Secretary of Defense requested the CJCS conduct a second, more detailed analysis of proposed construction and return with a recommendation on how to proceed. Concurrently, the Secretary directed the Under Secretary of Defense (Comptroller) to begin identifying $3.6 billion in existing military construction projects that might be deferred by use of the emergency authority under the statute. In a memorandum report dated May 2019, CJCS General Joseph Dunford delivered his final assessment to Acting Secretary of Defense Shanahan. The report's methodology was based on the presumption that while any barrier construction along the border could reasonably be expected to create "ripple effects" that would support the use of the armed forces, projects more beneficial than others should be prioritized, based on factors identified by DOD. The analysis assessed border barrier projects DHS had requested under 10 U.S.C. Â§2808, as well as those projects not funded by previous transfers under 10 U.S.C. Â§284. Though the CJCS team considered the type of land associated with each project area (federal or private), it developed a prioritization scheme that was missing key details related to land jurisdiction. As a consequence, the CJCS' final recommendations were later revised and included in an action memorandum to the Secretary of Defense on August 21, 2019. On September 3, 2019, Secretary of Defense Mark Esper, having determined that border barrier construction would serve as a "force multiplier" for reducing DHS's demand for DOD personnel and assets, directed the Acting Secretary of the Army to proceed with the construction of 11 DHS border barrier projects, and the deferral of approximately 127 existing military construction projects ($3.6 billion). In a public briefing later that day, DOD officials described a plan for deferring in stages, otherwise authorized military construction projects under 10 U.S.C. Â§2808 authority. Those military construction projects located at non-U.S. locations ($1.8 billion) would be deferred first, followed later by projects within the United States. ($1.8 billion). Officials stated The intent is prioritizing funds in this manner is to provide time to work with Congress to determine opportunities to restore funds, as well as work with our allies and partners on improving burden sharing for overseas construction projects. USACE has noted that the pace for obligating military construction (MILCON) funds for border barrier construction projects will be highly dependent on project location, since land must first be administratively transferred to the Department of the Army before work can proceed. Construction on land that currently falls under the jurisdiction of DOD can be undertaken relatively quickly, since the military effectively manages the parcels. Projects in locations that fall under one or more other federal jurisdictions may be delayed while transfers are negotiated. Projects on private land are expected to take the longest to complete, since the government must first obtain administrative jurisdiction of the land by either purchase or condemnation. On September 18, 2019, Department of the Interior (DOI) issued Public Land Orders that transferred jurisdiction of land required for five of projects for a period of three years to DOD. Detailed Chronologies and Selected Documents This section provides a detailed overview of key documents related to the Administration's use of 10 U.S.C. 284 and 10 U.S.C. 2808 to fund border barriers. The tables that follow each include a summary of source documents, citations, and links that allow readers to access the associated materials directly. (Due to technical considerations, documents are only made available to congressional users.) Table 1 , CRS Document Compilations , contains a collection of reference documents that CRS has compiled for the convenience of users. These include court declarations that do not fit neatly into a chronological framework and documents that describe activities that may be grouped as a single action (e.g., multiple reprogramming actions on the same date for an identical purpose). Where Table 1 documents are cited elsewhere in this report, they are identified by the record's "Short Title" shown in the indicated column. Table 2 , Chronology of 10 U.S.C. 284 Decisionm aking , and Table 3 , Chronology of 10 U.S.C. 2808 Decisionmaking, summarize actions related to each respective authority. The separate tables reflect the fact that interagency decisionmaking has generally operated along separate tracks; deliberations related to 10 U.S.C. 2808 were kept separate from correspondence related to 10 U.S.C. 284.	Summary:	gov_report	1,024	null	63
crs_R45908	crs_R45908_0	You are given a report by a government agency. Write a one-page summary of the report. Report: P resident Trump has long advocated for the construction of additional fencing, walls, and other barriers along the U.S.-Mexico border to deter unlawful border crossings. Less than a week after taking office, the President issued an executive order directing the Secretary of Homeland Security to "take all appropriate steps to immediately plan, design, and construct a physical wall along the southern border." This policy has engendered a robust debate in the public sphere, and a conflict has also made its way to federal court, with various plaintiffs challenging the lawfulness of the Trump Administration's initiatives to pay for the construction of border barriers by reprogramming funds from existing appropriations. At their core, these lawsuits concern whether the Administration's funding initiatives exceed existing statutory authorization and conflict with Congress's constitutionally conferred power over federal funds. Article I of the Constitution provides that "[n]o money shall be drawn from the Treasury but in Consequence of Appropriations made by Law." As Justice Joseph Story noted in his Commentaries on the Constitution , the appropriations power was given to Congress to guard against arbitrary and unchecked expenditures by the executive branch and to "secure regularity, punctuality, and fidelity, in the disbursement of the public money." "In arbitrary governments," he expounded, "the prince levies what money he pleases from his subjects, disposes of it, as he thinks proper, and is beyond responsibility or reproof." To avoid giving the President such "unbounded power over the public purse of the nation," the Framers designated Congress "the guardian of [the national] treasure"âgiving to it "the power to decide, how and when any money should be applied[.]" This "power to control, and direct the appropriations," Justice Story explained, serves as "a most useful and salutary check upon profusion and extravagance, as well as upon corrupt influence and public speculation." Justice Story's sentiments echoed those of James Madison, who in The Federalist No. 58 described the legislature's "power over the purse" as "the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure." The Trump Administration's early efforts to secure funding for border barriers focused on negotiating with Congress to secure appropriations specifically designated for that task. In his FY2018 budget proposal, President Trump requested that Congress appropriate $1.57 billion for border barrier construction. Similarly, President Trump's FY2019 budget request sought $1.6 billion "to construct approximately 65 miles of border wall in south Texas." Congress did not appropriate the amounts requested for either fiscal year. For FY2018, Congress appropriated $1.375 billion for new or repaired fencing and other forms of barriers along the U.S.-Mexico border, as well as $196 million for border monitoring technology. As FY2019 began, Congress and the President negotiated, inter alia , the amount of funding to provide the Department of Homeland Security (DHS) for border barrier construction for FY2019. Ultimately, Congress and the President did not agree on funding levels, leading to a 35-day lapse of appropriations for DHS and other portions of the federal government. During the partial government shutdown, President Trump increased his request for border barrier funding from $1.6 billion to $5.7 billion. Congress did not grant this request. Instead, in the Consolidated Appropriations Act, 2019 (CAA 2019), Congress appropriated $1.375 billionâ$4.325 billion less than was ultimately requestedâfor "the construction of primary pedestrian fencingÂ . . . in the Rio Grande Valley Sector." President Trump signed the CAA 2019 on February 15, 2019, that same day announcing that his Administration would "take Executive action" to "secure additional resources" to construct barriers along the southern border. In particular, President Trump announced that his Administration had identified "up to $8.1 billion" from three additional funding sources "to build the border wall." It remains to be seen whether the Administration will identify further funding sources from the FY2020 budget cycle. Several plaintiffs filed lawsuits in federal courts in California, the District of Columbia, and Texas to prevent the Trump Administration from taking this action. These plaintiffs assert that the Administration's funding initiatives are not authorized under existing law and thus violate the constitutional and statutory provisions requiring that federal money be spent only for the purposes, and in the amounts, specified by Congress. In May 2019, a federal district court in California concluded that one of the Administration's funding initiatives was unlawful and prohibited the Administration from using that authority to repurpose funds for border barrier construction. Though the U.S. Court of Appeals for the Ninth Circuit denied the Administration's request to stay the injunction, the Supreme Court granted that request, thus allowing the Administration to begin contracting for construction of border barriers while litigation in the case continues. A second federal district court in Texas has separately enjoined the use of military construction funds for border barrier construction. Meanwhile, the federal district court in the District of Columbia ruled that the plaintiff in that caseâthe U.S. House of Representativesâdid not have standing to sue and dismissed the suit. The U.S. House of Representatives has appealed the decision. According to DHS's U.S. Customs and Border Protection (CBP), there had been roughly 654 miles of primary barriers deployed along the U.S.-Mexico border as of January 2017. In May 2019, CBP declared that "approximately 205 miles of new and updated border barriers" had been funded (though not necessarily constructed) "through the traditional appropriations process and via Treasury Forfeiture Funding" since January 2017. In addition to this mileage, CBP described DOD as funding in FY2019 "up to approximately 131 miles of new border barriers in place of dilapidated or outdated designs, in addition to road construction and lighting installation." In total, CBP stated that some 336 total miles of barriers (including both replacement barriers and barriers deployed in new locations) would be deployed using funds from FY2017 through FY2019. This report addresses the litigation surrounding the Trump Administration's initiatives to repurpose existing appropriations for the construction of border barriers along the U.S.-Mexico border. It begins by providing an overview of the authorities cited by the Trump Administration to obtain border barrier funding and the steps the Administration has taken to utilize those authorities. It then discusses DHS's existing authority to construct border barriers and the various authorities on which the Trump Administration has relied to secure additional border barrier funding. Finally, this report discusses the ongoing litigation regarding the Administration's funding initiatives, with a focus on the parties' arguments and judicial decisions. Legal Authorities Cited by the Trump Administration The Trump Administration has cited several statutory authorities as giving it both the power and the necessary funds to construct additional border barriers. Some of these authorities belong to DHS, the agency with primary responsibility for securing the U.S. borders. Other authorities permit the Department of Defense (DOD) or the Department of the Treasury to transfer funds for specified military, law enforcement, or other emergency purposes. These authorities are described in more detail below. First , Section 102 of the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) as amended generally authorizes DHS to construct barriers and roads along the international borders in order to deter illegal crossings at locations of high illegal entry, and further directs the agency to construct fencing along no less than 700 miles of the U.S.-Mexico border. This law also authorizes the Secretary of Homeland Security to waive "all legal requirementsÂ . . . necessary to ensure expeditious construction of . . . [the] barriers." Second , the Secretary of Defense is authorized by 10 U.S.C. Â§Â 2808 to "undertake military construction projects . . . not otherwise authorized by law that are necessary to support such use of the armed forces." President Trump stated that he would invoke his authority under this provision to repurpose $3.6 billion allocated to "military construction projects" for border barrier construction. This authority becomes available upon a "declaration by the President of a national emergency" as authorized by the National Emergencies Act (NEA). Third , DOD has authority under 10 U.S.C. Â§Â 284 ("Section 284") to support other departments' or agencies' counterdrug activities, including through the construction of fencing to block drug smuggling corridors. President Trump proposed to direct the DOD to use its authority under Section 284 to support DHS's "counterdrug activities" through the construction of fencing across drug trafficking corridors at the southern border. These support activities would be funded by $2.5 billion in DOD's Drug Interdiction and Counter-Drug Activities Account (Drug Interdiction Account), which would be transferred to that account using the transfer authority in Sections 8005 and 9002 of the 2019 DOD Appropriations Act. These authorities authorize the transfer of up to $6 billion of DOD funds for "unforeseen military requirements" but only "where the item for which funds are requested has been denied by Congress." Fourth , the Treasury Forfeiture Fund contains funds that are confiscated by, or forfeited to, the federal government pursuant to laws enforced or administered by certain law enforcement agencies, and unobligated money in this fund may be used for obligation or expenditure in connection with "law enforcement activities of any Federal agency." The President proposed to withdraw $601 million in unobligated funds from the Treasury Forfeiture Fund ( TFF) to pay for border barrier construction. The Trump Administration has taken steps to make these funds available to construct border barriers along the U.S.-Mexico border. On February 15, the President declared a national emergency under the NEA, and has subsequently vetoed two congressional resolutions disapproving that declaration (which Congress did not override). On September 3, 2019, the Secretary of Defense directed the Acting Secretary of the Army to "expeditiously undertake" 11 border barrier military construction projects pursuant to Section 2808. In addition, on February 25, DHS requested that DOD use its authority under 10 U.S.C. Â§Â 284 to assist in constructing border barriers. DOD granted this request on March 25 and invoked the transfer authority in Section 8005 of the FY2019 DOD Appropriations Act to move $1 billion of Army personnel funds into DOD's Drug Interdiction Account for DOD to help DHS construct border barriers. A few months later, DOD again invoked Section 8005 (along with the related transfer authority in Section 9002 of the FY2019 DOD Appropriations Act) to transfer another $1.5 billion of personnel, procurement, and overseas contingency operation funds into the Drug Interdiction Account for use in constructing border barriers. The Trump Administration proposed to construct "approximately 131 miles of new border barriers . . . in addition to road construction and lighting installation" with these funds. For each of the proposed projects, the Acting Secretary of Homeland Security utilized IIRIRA Â§Â 102's waiver authority to waive the application of several federal environmental, conservation, and historic preservation statutes, including the National Environmental Policy Act (NEPA), the Endangered Species Act, the Safe Drinking Water Act, and the Antiquities Act, to the "fence[s], roads, and lighting" that DOD will be "assist[ing]" in "constructing" under Section 284. Department of Homeland Security Authority DHS's authority to construct barriers along the southern border derives from IIRIRA Â§Â 102, as amended. This law provides that "[t]he Secretary of Homeland Security shall take such actions as may be necessary to install additional physical barriers and roads . . . in the vicinity of the United States border to deter illegal crossings in areas of high illegal entry into the United States." IIRIRA Â§Â 102 directs that "the Secretary of Homeland Security shall construct reinforced fencing along not less than 700 miles of the southwest border," while also "identify[ing] the 370 milesÂ . . . along the southwest border where fencing would be most practical and effective in deterring smugglers and aliens attempting to gain illegal entry into the United States." Finally, IIRIRA Â§Â 102 gives the Secretary of Homeland Security flexibility on where to construct barriers, allowing the Secretary to decline to build a border barrier in a particular location if "[the Secretary] determines that the use or placement of such resources is not the most appropriate means to achieve and maintain operational control over the international border.Â .Â .Â ." To expedite the construction of border barriers, IIRIRA Â§Â 102 authorizes the Secretary of Homeland Security to, "in [the] Secretary's sole discretion," "waive all legal requirements" that the Secretary "determines necessary to ensure expeditious construction of the barriers and roads under this section." And to limit potential legal challenges to this waiver authority, IIRIRA Â§Â 102 cabins the jurisdiction of federal district courts to claims "alleging a violation of the Constitution" and forecloses appellate review of district court decisions, except by seeking discretionary review in the U.S. Supreme Court. IIRIRA Â§Â 102's waiver authority has been challenged on constitutional grounds in cases involving waivers of NEPA and other federal environmental statutes. Those challenging the waiver authority have contended that it violates the nondelegation doctrine, the Presentment Clause, and the Take Care Clause. Courts, however, have uniformly rejected these challenges and concluded that "a valid waiver of theÂ . . . laws under [IIRIRA Â§Â 102] is an affirmative defense" to all claims arising from the waived laws. The National Emergencies Act and Military Construction Funds The President invoked 10 U.S.C. Â§Â 2808 and announced that his Administration would seek to reallocate $3.6 billion from DOD's military construction budget for border barrier construction. The authority to take this action hinges on the President declaring a national emergency under the NEA, which President Trump did on February 15. On September 3, 2019, DOD identified 127 military construction projects that it would delay or suspend in order to reallocate $3.6 billion toward 11 barrier construction projects using this authority. The NEA provides general requirements governing the declaration of a national emergency, while Section 2808 contains additional requirements for its exercise. The National Emergencies Act The Supreme Court has explained that the President's authority "must stem either from an act of Congress or from the Constitution itself." Because Article II of the Constitution does not grant the Executive general emergency powers, the President generally must rely on Congress for such authority. Congress has historically given the President robust powers to act in times of crisis. By 1973, Congress had enacted more than 470 statutes granting the President special authorities upon the declaration of a "national emergency," but these statutes imposed no limitations on either the President's discretion to declare an emergency or the duration of such an emergency. The Senate Special Committee on National Emergencies and Delegated Emergency Powers (previously named the Senate Special Committee on the Termination of the National Emergency) ("Special Committee") was apparently concerned that four presidentially declared national emergencies remained extant in the mid-1970s, the earliest dating to 1933. In 1973, the Special Committee concluded that the President's crisis powers "confer[red] enough authority to rule the country without reference to normal constitutional process," and so Congress enacted the NEA in 1976 to pare back the President's emergency authorities. The NEA does not define "national emergency." Rather, the NEA established a framework to provide enhanced congressional oversight and prevent emergency declarations from continuing in perpetuity. To accomplish these goals, the NEA terminated all then-existing presidentially declared emergencies. The NEA also established procedures for future declarations of national emergencies, requiring the President to specify which statutory emergency authorities he intends to invoke upon a declaration of a national emergency (unlike the pre-NEA regime, under which the declaration of an emergency operated as an invocation of all of the President's emergency authorities); publish the proclamation of a national emergency in the Federal Register and transmit it to Congress; maintain records and transmit to Congress all rules and regulations promulgated to carry out such authorities; and provide an accounting of expenditures directly attributable to the exercise of such authorities for every six-month period following the declaration. The NEA further provides that a national emergency will end (1) automatically after one year unless the President publishes a notice of renewal in the Federal Register , (2) upon a presidential declaration ending the national emergency, or (3) if Congress enacts a joint resolution terminating the emergency (which would likely require the votes of two-thirds majorities in each house of Congress to override a presidential veto). While the NEA directs each house of Congress to meet every six months to consider whether to end a national emergency by joint resolution, Congress has never met to consider such a vote under that deadline prior to this year. The statute does not appear to prevent Congress from considering a resolution to terminate a national emergency at any time before or after a six-month interval. Although a purpose of the NEA was to end perpetual states of emergency, the law does grant the President authority to renew an emergency declaration. As a result, there are currently 34 national emergency declarations in effect, some of which have been renewed for decades. The declaration of a national emergency under the NEA enables the President to invoke a wide array of emergency authorities conferred by statute. The most often invoked is the International Emergency Economic Powers Act (IEEPA), which gives the President broad authority to impose sanctions on foreign countries and entities. Besides Section 2808, another authority that could provide for the reprogramming of funds for construction purposes is 33 U.S.C. Â§ 2293, which, in the event of a national emergency or declaration of war, authorizes the Secretary of the Army to end or defer Army Corps of Engineers civil works projects that are "not essential to the national defense." The Secretary of the Army can then use the funds otherwise allocated to those projects for "authorized civil works, military construction, and civil defense projects that are essential to the national defense." No President has ever invoked this authority, but it could potentially be used in connection with President Trump's declaration of a national emergency at the southern border. Military Construction Funds A declaration of a national emergency triggers Section 2808, which provides emergency authority for unauthorized military construction in the event of a declaration of war or national emergency. President Trump invoked this statutory authority to reallocate $3.6 billion from DOD military construction funds to border barrier construction, stating in his emergency declaration that "this emergency requires use of the Armed Forces and . . . that the construction authority provided in section 2808 of title 10, United States Code, is invoked and made available, according to its terms, to the Secretary of Defense and, at the discretion of the Secretary of Defense, to the Secretaries of the military departments." The President did not describe in his proclamation the tasks the Armed Forces would undertake with respect to the emergency at the southern border. Originally enacted in 1982, Section 2808 provides that upon the President's declaration of a national emergency "that requires use of the armed forces," the Secretary of Defense may "without regard to any other provision of law . . . undertake military construction projects . . . not otherwise authorized by law that are necessary to support such use of the armed forces." The term "military construction project" is defined to include "military construction work," and "military construction" is, in turn, defined to "include any construction, development, conversion, or extension of any kind carried out with respect to a military installation . . . or any acquisition of land or construction of a defense access road." The term "military installation" means a "base, camp, post, station, yard, center, or other activity under the jurisdiction of the Secretary of a military department." Finally, Section 2808 limits the funds available for emergency military construction to "the total amount of funds that have been appropriated for military construction" but which have not been obligated. Section 2808's legislative history provides limited guidance on the types of emergencies and military construction projects envisioned. A House Armed Services Committee report accompanying the original 1982 legislation indicated that while "[i]t is impossible to provide in advance for all conceivable emergency situations," Section 2808 was intended to address contingencies "ranging from relocation of forces to meet geographical threats to continuity of efforts after a direct attack on the United States during which the Congress may be unable to convene." With certain limited exceptions, prior Presidents have generally invoked this authority for construction at military bases in foreign countries. Department of Defense Authorities To obtain additional funds to construct border barriers, the Trump Administration has invoked DOD's authority under 10 U.S.C. Â§Â 284 to support DHS in constructing border fencing. This support would be funded by money transferred to DOD's Drug Interdiction Account pursuant to Sections 8005 and 9002 of the 2019 DOD Appropriations Act. These authorities are not contingent on the declaration of a national emergency. Section 284 In general, U.S. military involvement in civilian law enforcement is permitted only when specifically authorized by Congress. For example, the Secretary of Defense can "make available any equipmentÂ . . . base facility, or research facility" to any "civilian law enforcement officialÂ . . . for law enforcement purposes." Section 284 is another of these authorities. It authorizes the Secretary of Defense to "provide support for the counterdrug activities or activities to counter transnational organized crime of any other department or agency of the Federal Government or of any State, local, tribal, or foreign law enforcement agency." DOD may provide support under Section 284 only after it has been "requested" by the appropriate official from the governmental agency or department, and then only for "the purposes set forth" in Section 284. Those purposes include "the maintenance and repair" of certain equipment, the "training of law enforcement personnel" related to "[c]ounterdrug or counter-transnational organized crime," and "[a]erial and ground reconnaissance." Section 284 also authorizes DOD to provide support for the "[c]onstruction of roads and fences and installation of lighting to block drug smuggling corridors across international boundaries of the United States." And to ensure that DOD can provide this support expeditiously, support under Section 284 is generally not subject to the requirements that govern DOD's other authority to support civil law enforcement agencies. Section 284 also provides for congressional oversight of DOD's support activities. At least 15 days prior to providing support to another agency under Section 284, the Secretary of Defense must submit "a description of any small scale construction project for which support is provided" to the appropriate congressional committees. "Small scale construction project" is, in turn, defined to encompass projects that cost no more than $750,000. Section 284 does not include a reporting requirement for any projects exceeding $750,000. Historically, DOD's activities under Section 284 have been funded by the "Drug Interdiction and Counter-Drug Activities" line item in its annual appropriations bill. For FY2019 Congress appropriated $1,034,625,000 to this line item, with $517,171,000 of that amount being allocated for "counter-narcotics support." Sections 8005 and 9002 of the 2019 DOD Appropriations Act On February 25, 2019, DHS submitted a request to DOD to provide assistance pursuant to Section 284 in constructing border barriers in three locations along the U.S.-Mexico border, and DOD then approved the use of funds from the Drug Interdiction Account for these projects. However, much of the FY2019 funds appropriated for "counter-narcotics support" had been obligated by the time DOD made its request. As a result, DOD sought to use its authority under Section 8005 of the 2019 DOD Appropriations Act to transfer other funds into the Drug Interdiction Account. Section 8005 authorizes the Secretary of Defenseâ"[u]pon a determination by the Secretary of Defense that such action is necessary in the national interest" and with "approval of the Office of Management and Budget"âto "transfer not to exceed [$4 billion] of working capital funds of the [DOD] or funds made available in [the 2019 DOD Appropriations Act] for military functions (except military construction)." Section 8005 further provides that funds may be transferred only "for higher priority items, based on unforeseen military requirements, than those for which originally appropriated," and may not be transferred "where the item for which funds are requested has been denied by Congress." Finally, Section 8005 requires the Secretary of Defense to "notify the Congress promptly of all transfers made pursuant to this authority." This transfer authority, in its current form, originated with the FY1974 DOD Appropriations Act. The 1974 act appears to be the first instance when Congress expressly prohibited the transfer of DOD funds for purposes for which Congress had denied funding. The House committee report for this legislation explained that this language was added "to tighten congressional control of the reprogramming process." Before that time, DOD had "onÂ .Â .Â . occasion[]" reprogrammed funds "which ha[d] been specifically deleted in the legislative process" after obtaining the consent of the authorizing and appropriations committees in the House and Senate. The House committee report explained that this practice "place[d] committees in the position of undoing the work of the Congress." Characterizing this practice as "untenable," the House report declared that "henceforth no such requests will be entertained." Invoking Section 8005's transfer authority, DOD in February 2019 authorized the transfer of an initial $1 billion of Army personnel funds to the Drug Interdiction Account. And on May 9, DOD authorized the transfer of an additional $1.5 billion to that fund using Sections 8005 and 9002 of the 2019 DOD Appropriations Act. Section 9002 authorizes the Secretary of Defense to "transfer up to [$2 billion] between the appropriations or funds made available to [DOD] in this title." This authority is "in addition to any other transfer authority available to [DOD]"âincluding Section 8005âand is also "subject to the same terms and conditions as the authority provided in section 8005." The Acting Secretary of Defense informed Congress of these transfers. Treasury Forfeiture Fund In various federal statutes, Congress has authorized the confiscation, or forfeiture to the federal government, of any property used to facilitate a crime as well as the profits and proceeds of such crimes. None of these statutes is contingent on the declaration of a national emergency. Congress established the TFF to hold proceeds of property forfeited under most laws enforced or administered by a law enforcement organization within the Department of the Treasury or by the Coast Guard. Funds in the TFF may be used by the Secretary of the Treasury for a variety of law enforcement purposes. Some of these purposes are mandatory, such as making "equitable sharing payments" to other federal, state, and local law enforcement agencies that participate in the seizure or forfeiture of property. Others, such as awards for information leading to forfeited property covered by the TFF, are subject to the discretion of the Secretary of the Treasury. At the end of each fiscal year, the Secretary of the Treasury must reserve a sufficient amount in the TFF to cover mandatory and discretionary expenditures. Unobligated balances in the fund over the reserved amount may be used "for obligation or expenditure in connection with the law enforcement activities of any Federal agency or of a Department of the Treasury law enforcement organization." This unobligated amount is known as "Strategic Support." At the end of 2018, DHS requested $681 million of Strategic Support from the TFF for "border security." In response to that request, the Secretary of the Treasury transferred roughly $601 million to CBP for "border barrier construction." The Border Barrier Litigation Following the Trump Administration's announcement of its initiatives to fund border barrier construction, citizens groups, states, and the U.S. House of Representatives filed lawsuits in federal district courts in California, the District of Columbia, and Texas. The plaintiffs in these lawsuits have argued that the Trump Administration's funding initiatives are not authorized by (or are inconsistent with) the relevant statutory authorities. As a result, they have also contended that the Administration's funding initiatives violate constitutional separation of powers principles and the Appropriations Clause's directive that money may be withdrawn from the Treasury only "in Consequence of Appropriations made by Law." Finally, some plaintiffs have asserted that IIRIRA Â§Â 102 does not empower DHS to waive the requirements of NEPA for the border barrier projects being constructed with DOD's assistance because IIRIRA Â§Â 102's waiver authority extends only to projects undertaken by DHS. After bringing suit, certain plaintiffs filed motions for a preliminary injunction, asking the courts to prohibit DOD from implementing its funding initiatives while the litigation was ongoing. On May 24, 2019, a judge on the U.S. District Court for the Northern District of California issued decisions in the two cases pending in that courtâ Sierra Club v. Trump and California v. Trump âresolving one of the issues presented by the plaintiffs' motion: whether Sections 8005 and 9002 of the 2019 DOD Appropriations Act authorized the transfer of funds for border barrier construction. The district court determined that it did not for two reasons. It first concluded that this would violate Section 8005's prohibition on transferring funds where "the item for which funds [were] requested ha[d] been denied by Congress." The court also ruled that the Administration's proposed use of Section 8005 was unlawful because DOD's purported need for additional border barrier funding was not an "unforeseen military requirement," as required by Section 8005. Based on this ruling, the court in Sierra Club issued a preliminary injunction barring the Administration from using Section 8005 to transfer funds for border barrier construction while litigation proceeded. The court declined to also issue a preliminary injunction in the California case because (with the Sierra Club injunction in place) the plaintiffs in California could not establish that they would be irreparably harmed by the denial of an injunction. Because the plaintiffs' lawsuit preceded DOD's May 9 decision to transfer $1.5 billion to the Drug Interdiction Account, the preliminary injunction applied only to the initial, February 25 transfer of $1 billion to fund projects in New Mexico and Arizona. But in a later decision, the district court applied the reasoning from its initial ruling to conclude that the $1.5 billion transfer, like the first, was not authorized by Section 8005 or Section 9002. The court then issued an order permanently prohibiting the Administration from using either of these provisions to transfer any of the $2.5 billion for border barrier construction. The Trump Administration appealed the district court's permanent injunction to the U.S. Court of Appeals for the Ninth Circuit and asked that court to stay the injunction pending appeal. The Ninth Circuit denied that request, agreeing with the district court that Section 8005 does not authorize the transfer of funds for border barrier construction. However, the Supreme Court subsequently issued an order staying the injunction during the pendency of the litigation. As a result of the Supreme Court's order, the Trump Administration may use Section 8005 to transfer funds for border barrier construction. The district court subsequently issued a permanent injunction against the use of military construction funds as well, but stayed the injunction pending appeal. The Texas lawsuit, El Paso County v. Trump , also resulted in a permanent injunction against the Trump Administration's funding scheme for border barrier construction using Section 2808. The district court determined that the use of those provisions to fund border barriers clashed with the Consolidated Appropriations Act, 2019 (CAA 2019), provision that prohibits the use of appropriated funds "to increase . . . funding for a program, project, or activity as proposed in the President's budget request for a fiscal year" unless it is made pursuant to the reprogramming or transfer provisions of an appropriations Act. This section discusses the various arguments raised in these lawsuits regarding the lawfulness of the Trump Administration's initiatives for funding border barrier construction. It also discusses the judicial decisions that have resolved, or otherwise opined on, the lawfulness of the Administration's funding initiatives. The federal court in the District of Columbia presiding over the U.S. House of Representatives' case dismissed that suit for lack of standing, and that decision is currently being appealed. Legal Arguments and Judicial Decisions Regarding the Trump Administration's Efforts to Fund Additional Barrier Deployments Section 8005 The Northern District of California's Sierra Club Decision166 As discussed earlier, Section 8005 authorizes the transfer of funds for "military functions," but provides that funds may be transferred only "for higher priority items, based on unforeseen military requirements, than those for which originally appropriated." Further, funds may not be transferred "where the item for which funds are requested has been denied by Congress." The district court in Sierra Club v. Trump concluded that Section 8005 does not authorize the transfer of funds for the construction of border barriers because the transfer was for an "item" for which funds had been denied by Congress and, in any event, because the asserted need for the construction of border barriers was not "unforeseen." The district court first addressed whether the proposed transfer was for an "item" for which Congress had denied funds. In its briefs, the Trump Administration had argued that the relevant "item for which funds [were] requested" was DOD's assistance to DHS under 10Â U.S.C. Â§Â 284 for "counterdrug activities," not (as the plaintiffs urged) the construction of border barriers generally. Thus, the Administration urged, because Congress had not "denied" a request for appropriations for DOD "counterdrug" assistance under Section 284, transferring funds for that purpose was not prohibited by Section 8005. The district court rejected that argument, concluding instead that the historical context leading up to the transferâincluding the previous disagreement between the Administration and Congress on the appropriate funding for border barriers that led to an extended lapse in appropriationsâshowed that the "item for which funds [were] requested" was the construction of border barriers generally, regardless of which agency would undertake construction or the statutory authority on which it might rely. "[T]he reality is that Congress was presented withâand declined to grantâa $5.7 billion request for border barrier construction," the court explained. Thus, "[b]order barrier construction, expressly, is the item [the Administration] now seek[s] to fund via the Section 8005 transfer, and Congress denied the requested funds for that item." The court also relied on portions of Section 8005's legislative history to support this conclusion. In particular, the court cited portions of a House report from 1973, which explained that Congress originally adopted the "denied by Congress" language to "'tighten congressional control of the reprogramming process''' and to "'prevent the funding for programs which have been considered by Congress and for which funding has been denied.'" In the court's view, an interpretation of Section 8005 that would allow the Administration to transfer money for border barrier construction, despite Congress's refusal to appropriate the amount of money requested for that purpose, would undermine Section 8005's objective. The court also determined that Section 8005's transfer authority was unavailable because the Administration's proposed border barrier construction was not an " unforeseen military requirement[]." The Administration had argued that the proposed border barrier construction (i.e., the "military requirement") was "unforeseen" because the need for DOD to provide support to DHS through Section 284 was not known until DHS had requested that assistanceâwhich occurred after the President's budget request and after Congress had passed the DOD appropriations bill with less funding for barrier construction than the Administration had requested. The district court rejected this interpretation of Section 8005. On this theory, the court explained, " every request for Section 284 support" would be unforeseen because the need to rely on that particular statutory authority would only ever arise when another agency requests DOD's assistance under that provision. The district court also asserted that "[the Administration's] argument that the need for the requested border barrier construction funding was 'unforeseen' cannot logically be squared with the Administration's multiple requests for funding" for a border wall. Finally, the court invoked the canon of constitutional avoidance to support its reading of Section 8005. Under this rule of statutory interpretation, when there are two possible interpretations of a statute, one of which would raise serious constitutional concerns, courts should adopt the interpretation that avoids the constitutional difficulties. According to the district court, the Administration's interpretation of Section 8005 would "pose serious problems under the Constitution's separation of powers principles" because it would allow the executive branch to "render meaningless Congress's constitutionally-mandated power" to control federal expenditures by "ceding essentially boundless appropriations judgment" to the executive branch. Avoiding these potential pitfalls was, in the court's view, another reason to reject the Administration's broader interpretation of Section 8005. On these grounds, the court decided that the plaintiffs would likely succeed on their claim that the Administration could not lawfully use Section 8005 to transfer funds for border barrier construction. Thus, after finding the remaining preliminary injunction requirements satisfied, the court entered an order temporarily prohibiting the Administration from using the $1 billion of funds transferred under Section 8005 to construct the specified border barriers in New Mexico and Arizona. After issuing this decision, the parties submitted additional briefing on the lawfulness of the Administration's May 9 decision to use Sections 8005 and 9002 to transfer another $1.5 billion to the Drug Interdiction Account for the construction of border barriers in four additional locations in California and Arizona. On June 28, the district court issued a decision adopting the same reasoning as its earlier opinion. And having found both of the Administration's proposed uses of Section 8005's transfer authority unlawful, the court entered an injunction permanently prohibiting the Administration "from taking any action to construct a border barrier" using Section 8005. The Ninth Circuit's Sierra Club Decision The Trump Administration appealed the district court's permanent injunction to the U.S. Court of Appeals for the Ninth Circuit and asked that court to stay the injunction pending appeal. On July 3, a divided panel of the Ninth Circuit denied the Administration's request for a stay, concluding that the Administration had not shown a likelihood of success on the merits. In reaching that conclusion, the Ninth Circuit first agreed with the district court that the construction of a border barrier was not an " unforeseen military requirement," as required by Section 8005. Like the district court, the Ninth Circuit declared that the relevant "requirement" was the construction of border barriersânot, as the Administration contended, the need for DHS to request support from DOD under Section 284. The Ninth Circuit also concluded that Congress had "denied" funds for construction of the border barrier. The Administration had argued to that court that the "item for which funds [were] requested" referred to "'a particular budget item' for section 8005 purposes"âwhich Congress had not deniedâand did not encompass other requests for DHS funding for border barriers. The court of appeals rejected this reading, concluding that the "item for which funds [were] requested" was "a wall along the southern border," and that Congress had denied the Administration's request to fund that "item." "In sum," the court reasoned, "Congress considered the 'item' at issue hereâa physical barrier along the entire southern border"âand it "decided in a transparent process subject to great public scrutiny to appropriate less than the total amount the President had sought for that item. To call that anything but a 'denial' is not credible." However, as discussed in more detail below, the Supreme Court ultimately stayed the district court's injunction. The Court's stay order did not rule on the merits of Section 8005 or any of the other statutory authorities on which the Administration has relied to secure additional border barrier funding. Instead, the Court stayed the injunction because it concluded that "the Government had made a sufficient showing at this stage that the plaintiffs have no cause of action to obtain review of the Acting [Secretary of Defense's] compliance with Section 8005." Section 284 The plaintiffs in Sierra Club and California also argued that even if Section 8005 authorized the transfer of funds to the Drug Interdiction Account, Section 284 does not empower DOD to assist another agency in constructing border barriers. The plaintiffs in these cases raised several points to support this conclusion. First , they observed that Section 284 requires DOD to provide to Congress "a description of the small scale construction project for which support is provided," and defines "small scale construction" to mean "construction at a cost not to exceed $75,000 for any project." That Section 284 requires DOD to report to Congress on "small scale construction projects" and not larger projects, the plaintiffs argued, suggests that Section 284 should not be read to authorize assistance with larger-scale projects. "Congress would not have required a description of 'any small scale construction' projects if it was, at the same time, authorizing massive, multibillion-dollar expenditures under this provision," the plaintiffs argued. But even if Section 284 could be read otherwise, the plaintiffs contended that it should not be read broadly here given "the more specific and recent judgment by Congress" to appropriate only $1.375 billion for DHS border barrier construction. If there is a "specific policy embodied in a later statute," they argued, that later statute "should control judicial construction of the earlier broad statute, even though [the latter statute] has not been expressly amended." Second , the plaintiffs argued that Section 284 does not authorize DOD's proposed border barrier projects because the portion of Section 284 relied on by DOD applies solely to "block[ing] drug smuggling corridors." By contrast, the plaintiffs argued that DOD intended to use "Section 284Â .Â .Â . as a tool to create a contiguous border wall, not to address specific corridors." Third , the plaintiffs pointed to a neighboring statutory provision requiring an agency receiving DOD support "to reimburse [DOD] for that support," though DOD may waive this requirement if its support (1) "is provided in the normal course of military training or operation," or (2) "results in a benefitÂ .Â .Â . that is substantially equivalent to that which would otherwise obtain from military operations or training." The plaintiffs argued that DOD has breached this requirementâthus rendering Section 284 unavailableâbecause DHS had "requested support on a 'non-reimbursable basis,'" but neither of the two exceptions to the reimbursement requirement was met. Finally , the plaintiffs argued that DOD's reliance on Section 284 "violates the core principle that executive branch agencies may not mix and match funds from different accounts to exceed the funding limits Congress imposed." In particular, the plaintiffs noted the general rule of appropriations law that "specific appropriations preclude the use of general ones even when the two appropriations come from different accounts." Here, the plaintiffs contended, "Congress ha[d] allocated a specific amount of funding" for border barrier construction, precluding "the government [from] cobbl[ing] together other, more general sources of money to increase funding levels for that same goal." The Administration responded that the plaintiffs in Sierra Club and California had misconstrued Section 284. The Administration first argued that Section 284 contemplates that DOD may assist with projects other than "small scale construction," as certain provisions in Section 284 "refer toâbut are not limited toâ'small scale' or 'minor' construction." As to the reimbursement requirement, the Administration asserted that Section 284 itself makes the reimbursement requirement inapplicable to DOD's counterdrug activities, providing that "[t]he authority provided in this [S]ection [284] for the support of counterdrug activitiesÂ .Â .Â . by [DOD] isÂ .Â .Â . not subject to the other requirements of this chapter." Next, the Administration contended that its proposed border barrier projects satisfied Section 284's "drug smuggling corridor" requirement, as the proposed project areas were "known to have high rates of drug smuggling between the ports of entry." Finally, the Administration rejected as "without merit" the plaintiffs' argument that its use of Section 284 violated the principle that agencies "must use the [most] specific appropriation to the exclusion of [a] general appropriation." This principle, the Administration contended, applies only when both sources of funding belong to a single agency, not where the appropriations at issue are to different agenciesâthat is, Section 8005 and Section 284 to DOD and $1.375 billion to DHS in its appropriations bill. However, the district court in Sierra Club and California ultimately did not resolve this issue because it concluded that Section 8005 does not authorize the transfer of funds to be used by DOD under its Section 284 authority. And, with no district court ruling to review, the Ninth Circuit in Sierra Club also did not address this authority. The district court in El Paso County agreed with the plaintiffs on the basis that Congress's appropriation of funds for border barrier construction is a specific statute that should be given precedence over more general statutes. The court stated that "[a]n appropriation for a specific purpose is exclusive of other appropriations in general terms which might be applicable in the absence of the specific appropriation." Moreover, the court held the use of Section 284 funds for border barrier construction was precluded by Section 739 of the CAA 2019, which prohibits the use of appropriated funds to increase funding for a program, project, or activity proposed in the President's budget request beyond what Congress had provided except through reprogramming or transfer actions pursuant to an appropriations act. Because the President had requested $5.7 billion for FY2019 "for construction of a steel barrier for the Southwest border" but Congress had appropriated $1.375 billion to be made on "construction . . . in the Rio Grande Valley Sector" alone, the court found that the use of Section 284 funds for the border project amounted to an unlawful increase in funding for that activity using appropriated funds. The court noted that Section 284 is not an appropriations statute and its use was thus not eligible for the exception in Section 739 of the CAA 2019 for reprogramming provisions. Nevertheless, because of the Supreme Court's stay of the injunction issued in the Sierra Club case, the court in El Paso declined to enjoin the use of Section 284. Department of Homeland Security Waiver Authority The plaintiffs in Sierra Club and California also argued that the Administration's proposed construction of a border barrier was subject to the environmental assessment requirements of NEPA, and that DHS's waiver authority under IIRIRA Â§Â 102 is ineffective to waive NEPA's application for projects funded and undertaken by any other department or agency. The plaintiffs noted that IIRIRA Â§Â 102's waiver authority may be used only for the "construction of the barriers and roads under this section ." Because the Administration was relying on DOD authority and appropriations (i.e., Section 284 and the Drug Interdiction Account) to construct the border barriers, the plaintiffs contended that those projects did not meet the statutory requirement and thus were not covered by an IIRIRA Â§Â 102 waiver. By contrast, the Administration argued that by requiring DHS to take "such actions as may be necessary" to construct additional border barriers, IIRIRA Â§Â 102 authorized DHS to request DOD's assistance, and thus the waiver authority applied. Ruling for the Administration, the district court in Sierra Club and California held that IIRIRA Â§Â 102's waiver authority extends to border projects undertaken by another agency on behalf of DHS, and thus DHS's waivers rendered NEPA inapplicable to the challenged border barrier projects. "DOD's authority under Section 284 is derivative," the court explained, as it may invoke "its authority [under Section 284] only in response to a request from [another] agency." "Plaintiffs' argument would require the court to conclude that even though it is undisputed that DHS could waive NEPA's requirements if it were paying for the projects out of its own budget, that waiver is inoperative when DOD provides support in response to a request from DHS." The court rejected this approach because it found it "unlikely that Congress intended to impose different NEPA requirements on DOD when it acts in support of DHS's IIRIRA Â§Â 102 authority in response to a direct request under Section 284 than would apply to DHS itself." The court thus ruled that DHS's waivers applied to the challenged border projectsâand all parties agreed that "the waivers, if applicable, would be dispositive of the NEPA claims." Treasury Forfeiture Fund The state plaintiffs in California v. Trump also argued that the Administration's allocation of $601 million from the TFF was not authorized by 31 U.S.C. Â§Â 9705, specifically because the construction of border barriers is not an expenditure for "law enforcement activities." In response, the Administration argued that the allocation of payments from the TFF is not reviewable, citing Supreme Court and Ninth Circuit decisions establishing that an agency's determination of how to allocate funds from a lump-sum appropriation is committed to the agency's discretion. The district court determined that, while the statute provided some discretion for the Secretary of the Treasury to decide what payments should be made from the TFF, the statute provided a "comprehensive list of payments for which TFF" payments must be made. There were therefore sufficient standards for determining whether the Administration had transferred funds in a "statutorily impermissible manner." Despite finding that the use of the TFF was reviewable, the district court declined to address the merits of the state plaintiffs' arguments because the plaintiffs did not meet the other requirements for a preliminary injunction. Specifically, a preliminary injunction requires the court to find that the moving party will suffer irreparable injury if the injunction is not issued. But the TFF statute requires equitable sharing payments for the current and next fiscal years to be reserved before any unobligated balances were available for Strategic Support expenditures. Because the Secretary of the Treasury had reserved such amounts before the requested transfer to DHS, there was no justification for the "extraordinary" remedy of a preliminary injunction against the TFF transfer. Subsequently, on August 2, the parties in California stipulated to the voluntary dismissal of the plaintiffs' TFF claim. According to the parties, this dismissal was based on representations by the Administration that (1) its proposed use of $601 million from the TFF would not cause state and local law enforcement agencies to lose any funds they would otherwise receive from the TFF, and (2) "funds from the TFF will not be used to fund or support the construction of border barriers in any areas other than within the Rio Grande Valley and/or Laredo Sectors"âthat is, areas within Texas. The plaintiffs in Sierra Club have not dismissed their TFF claim. Reprogramming of Funds During National Emergency Two types of challenges have arisen to the reprogramming of military construction funds for use in border barrier construction. The first challenges the declaration of the national emergency itself, while the second challenges the invocation of authority pursuant to Section 2808. The El Paso County Challenge to the President's Declaration of a National Emergency Though the plaintiffs in Sierra Club and California did not challenge the lawfulness of President Trump's declaration of a national emergency under the NEA, the plaintiffs in El Paso County v. Trump did. They have charged that the President's declaration of a national emergency to make use of military construction funds for border barrier construction is unlawful because the situation at the border does not constitute an emergency within the meaning of the NEA. They argue that "emergency" in the NEA must be construed in accordance with its ordinary meaningâ"an unforeseen combination of circumstances requiring immediate action"âor the NEA is an unconstitutional violation of the nondelegation doctrine. Under the nondelegation doctrine, they argue, Congress cannot delegate legislative authority to the executive branch without providing an intelligible principle to guide implementation of a law. Plaintiffs assert that an interpretation of the NEA that leaves unfettered discretion to the President to decide what constitutes a national emergency would be an unconstitutional delegation of congressional authority. The government responded with its own interpretation of the NEA, one that views Congress's failure to provide a definition for "national emergency" as an indication that Congress intended to avoid constricting presidential power. The government also cites historical examples to demonstrate that national emergency declarations need not address circumstances that are unforeseen. Moreover, it argues that courts have uniformly concluded that presidential declarations of national emergencies present a nonjusticiable political question. The Supreme Court set forth the factors courts must consider in determining whether a matter raises nonjusticiable political questions in Baker v. Carr . These factors are a textually demonstrable constitutional commitment of the issue to a coordinate political department; a lack of judicially discoverable and manageable standards for resolving it; the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; the impossibility of a court's undertaking independent resolution without expressing lack of the respect due coordinate branches of government; an unusual need for unquestioning adherence to a political decision already made; or the potentiality of embarrassment from multifarious pronouncements by various departments on one question. The Administration argues that the President's national emergency declaration fulfills "most, if not all of these factors." First, the executive branch claims that Congress intentionally chose to leave the determination of a national emergency to the President with oversight by Congress, without setting forth criteria from which a court could judge the President's action. Second, the Administration contends that how to combat illegal immigration is quintessentially "the sort of policy determination of a kind clearly for nonjudicial discretion." Third, it argues that the policy questions regarding the exclusion of aliens are entrusted to the political branches. The district court did not address the constitutionality of the NEA or the proclamation, but entered summary judgment in favor of the plaintiffs on the basis that the Administration's funding plan for the border, in the court's view, violates the CAA 2019, in particular Section 739. The Challenge to the Use of Section 2808 Considered in Sierra Club The Sierra Club plaintiffs did not challenge the lawfulness of President Trump's declaration of a national emergency under the NEA, but they did argue that the Administration's plan to reallocate $3.6 billion in military construction funds was unlawful because 10 U.S.C. Â§Â 2808 does not authorize the construction of border barriers. Though the district court declined to grant a preliminary injunction because the plaintiffs had not demonstrated irreparable harm from the Administration's as-yet undetermined plans to divert the funds, the court did express doubt that the definition of "military construction" in Section 2808 encompassed border barriers. As noted previously, Section 2808 permits reprogramming of funds for "military construction" necessary to support the use of the Armed Forces in a national emergency. Military construction is defined to "include any construction, development, conversion, or extension of any kind carried out with respect to a military installation," which means a "base, camp, post, station, yard, center, or other activity " under the jurisdiction of the Secretary of a military department. The Administration relied on the term "other activity" and the nonexhaustive word "includes" in the definitions related to "military construction" to argue that Congress had meant the term "military construction" in Section 2808 to be construed broadly. In other words, the government interpreted the definition of military construction to include any sort of construction related to a military installation. This would include any "other activity under the jurisdiction of the Secretary of a military department," which could conceivably include border barriers constructed by DOD. The court in Sierra Club rejected that view, explaining that "the critical language of Section 2801(a) is not the word 'includes,' it is the condition 'with respect to a military installation.'" Further, the court rebuffed the Administration's reliance on the term "other activity." That language, the court explained, is not unbounded but should be interpreted in context of the words that immediately precede itâ"a base, camp, post, station, yard, [and] center." Applying the rule of statutory interpretation that "a word is known by the company it keeps," the court concluded that "other activity" refers to similar discrete and traditional military locations. The court did "not readily see how the U.S.-Mexico border could fit this bill." The court likewise employed the rule of interpretation that "[w]here general words follow specific words in a statutory enumeration, the general words are construed to embrace only objects similar in nature to those objects enumerated by the preceding specific words." The court explained that if Congress "hadÂ . . . intended for 'other activity' .Â .Â . to be so broad as to transform literally any activity conducted by a Secretary of a military department into a 'military installation,' there would have been no reason to include a list of specific, discrete military locations." Thus, viewing the term "in context and with an eye toward the overall statutory scheme," the court could not conclude that "Congress ever contemplated that 'other activity' has such an unbounded reading that it would authorize Defendants to invoke Section 2808 to build a barrier on the southern border." However, because the issue was not yet ripe for decision, the district court did not enjoin the use of military construction funds for border barrier construction. And because the district court did not rule on this issue the Ninth Circuit did not address it either. On December 11, 2019, however, the district court determined that the government's formulation of plans to allocate the military construction funds for 11 border barrier projects made the issue ripe for decision in both the California and Sierra Club cases. Although the court declined to take on the question of whether an emergency requiring the use of troops in fact exists, it found the question of whether the specific projects are "military construction projects" that are "necessary to support such use of the armed forces" to be suitable for adjudication. With respect to the first issue, the court reaffirmed its earlier assessment based on the statutory definitions that such projects have insufficient connection with any military installation to be permissible military construction projects, notwithstanding the government's argument that its taking of administrative jurisdiction over the land for them and assigning it to Fort Bliss in Texas created such a connection. The court was not persuaded that Congress intended "military construction" to have no stronger connection to a military installation than Defendants' own administrative convenience. If this were true, Defendants could redirect billions of dollars from projects to which Congress appropriated funds to projects of Defendants' own choosing, all without congressional approval (and in fact directly contrary to Congress' decision not to fund these projects). Elevating form over substance in this way risks "the Executive [] aggrandizing its power at the expense of [Congress]." Addressing the government's contention that "installation" was meant to be read broadly in the emergency context, the court pointed out that the aim of the NEA was to narrow executive emergency power, and that "Section 2808 has rarely been used, and never to fund projects for which Congress withheld appropriations." The court therefore found that the border barrier construction projects, with the exception of two projects on the Barry M. Goldwater range, are not "'carried out with respect to a military installation' within the meaning of Section 2808." The court next addressed whether the 11 barrier projects are "necessary to support the use of the armed forces," and found the government's arguments unconvincing. In the government's view, these projects will support the armed forces because they "allow DoD to provide support to DHS more efficiently and effectively," and could "ultimately reduce the demand for DoD support at the southern border over time." The court rejoined: Defendants do not explain how the projects are necessary to support the use of the armed forces while simultaneously obviating the need for those forces. This appears to defy the purpose of Section 2808, which specifically refers to construction that is necessary to support the use of the armed forces, not to construction that the armed forces will not use once constructed. Again, Defendants' argument proves too much. Under their theory, any construction could be converted into military constructionâand funded through Section 2808âsimply by sending armed forces temporarily to provide logistical support to a civilian agency during construction. The court concluded that there was "simply nothing in the record . . . indicating that the eleven border barrier projectsâhowever helpfulâare necessary to support the use of the armed forces." The court entered a permanent injunction against the 11 proposed border construction projects, but stayed the injunction pending appeal. The government has appealed. The district court in El Paso County rejected the use of Section 2808 for border barrier construction not because of the definitions at issue, but because the court concluded the provision is not an appropriations measure and therefore cannot be used to circumvent Section 739 of the CAA 2019, for the same reasons that the judge rejected the use of Section 284. Procedural Barriers to Lawsuits Challenging Border Barrier Funding Aside from the merits of the Trump Administration's funding initiatives, the various legal challenges brought by states, private individuals, and the House of Representatives also involve two threshold requirements that must be satisfied by any party seeking to maintain a lawsuit in federal court. A plaintiff must first show that he has suffered a "concrete" and "particularized" injury that was caused by the challenged government actionâthe so-called "standing" requirement. A plaintiff must also have a legal right (i.e., a "cause of action") to enforce whatever provision of federal law is at issue, and he must also fall within the "zone of interests" meant to be protected by that law. These procedural requirements have presented obstacles to those opposing the Trump Administration's funding initiatives. In U.S. House of Representatives v. Mnuchin , the U.S. District Court for the District of Columbia held that the House of Representatives lacked standing to challenge the Trump Administration's actions. And though the district court in Sierra Club and California (and the Ninth Circuit in Sierra Club ) concluded that the plaintiffs in those casesânonprofit organizations and state plaintiffsâsatisfied these procedural requirements, the Supreme Court ultimately stayed the district court's injunction because "the Government ha[d] made a sufficient showing at this stage that the plaintiffs have no cause of action to obtain review of the Acting [Secretary of Defense's] compliance with Section 8005." In staying the permanent injunction in the Sierra Club litigation, the Supreme Court cleared the way for the Trump Administration to use funds transferred under Section 8005 to construct border barriers while the Ninth Circuit considers the Administration's appeal of the permanent injunction. However, the Court's order did not address the merits of Section 8005 or any of the other statutory authorities at issue in that litigation. Standing Article III of the U.S. Constitution "limits federal courts' jurisdiction to certain 'Cases' and 'Controversies.'" This limitation has been interpreted to require that every person or entity bringing a claim in federal court must establish "standing" to sueâthat is, establish that he has suffered an injury that (1) is "concrete, particularized, and actual or imminent"; (2) "fairly traceable to the challenged action"; and (3) would be "redressable by a favorable ruling." The Supreme Court has explained that this standing requirement "is built on separation-of-powers principles" and "serves to prevent the judicial process from being used to usurp the powers of the political branches." Separation-of-powers concerns are heightened where a court is being asked to deem the actions of one of the other two branches of government unconstitutional, and especially so when a suit involves a dispute between the other two branches of the federal government. The plaintiffs challenging the Trump Administration's funding initiatives argued that they satisfied Article III's standing requirement. In Sierra Club and California , the Trump Administration conceded that constructing border barriers would cause a sufficient injury for Article III purposes, but it argued that this injury did not confer standing to challenge the Administration's use of Section 8005 to transfer funds. Rejecting that argument, the district court in Sierra Club and California held that the plaintiffs had established an "actual or imminent" injury that was "fairly traceable" to the Trump Administration's proposed transfer of money. The court explained that the supposedly distinct actions of (1) transferring funds and (2) using those transferred funds to construct border barriers were both part of a single objectiveâthe construction of border barriers. And because a sufficiently concrete injury followed from the attainment of that objective, the plaintiffs had standing to challenge government action that was part of the chain of events leading to the injury. Similarly, in El Paso County , the court held that the plaintiffs' reputational and economic injuries resulting directly from the border barrier construction were sufficient for Article III purposes. By contrast, the federal district court presiding over the U.S. House of Representatives' lawsuit held that the House of Representatives lacks standing because the House's asserted injuryâ"an institutional injury to [Congress's] Appropriations power" âwas not the kind of injury that supports Article III standing. The district court relied on the Supreme Court's decision in Raines v. Byrd , which held that Members of Congress lacked standing to challenge the constitutionality of the Line Item Veto Act. While Article III requires a "particularized" injuryâthat is, an injury that "affect[s] the plaintiff in a personal .Â .Â . way" âthe Court in Raines determined that the Members of Congress had asserted "a type of institutional injury (the diminution of legislative power)" that did not belong to the Members individually. As a result, those Members were unable to show "a sufficient[ly] 'personal stake' in th[e] dispute." Similarly, the district court in Mnuchin noted that the appropriations power is held by Congress as a whole , not by each chamber of Congress separately. Moreover, as had the Court in Raines , the Mnuchin court supported its conclusion by noting the absence of historical examples of federal courts being asked to adjudicate lawsuits "brought on the basis of claimed injury of official authority or power." The U.S. House of Representatives appealed the district court's decision to the D.C. Circuit, but the court of appeals has not yet issued a decision. Cause of Action and Zone of Interests Even if a plaintiff establishes standing, the party must also be able to identify a source of law that authorizes the party to sueâalso known as a "cause of action." In some instances, Congress has included a cause of action within a federal law to enable those injured by a violation of that law to obtain judicial relief. Separately, the Administrative Procedure Act contains a more general cause of action, authorizing "person[s] suffering legal wrong because of agency action" to challenge that action in federal court. Finally, even absent a statutory cause of action, a plaintiff may still be authorized to sue based on "[t]he power of federal courts of equity to enjoin unlawful executive action." Moreover, in order to show that a particular cause of action applies to him, a plaintiff must (generally) show that "[t]he interest he asserts [is] 'arguably within the zone of interests to be protected or regulated by the statute' that he says was violated." This "zone of interests" requirement "applies to all statutorily created causes of action," and its purpose is to "foreclose[] suit .Â .Â . when a plaintiff's 'interests are so marginally related to or inconsistent with the purposes implicit within the statute that it cannot reasonably be assumed that Congress intended to permit the suit.'" Before concluding that the Trump Administration cannot use Section 8005 to transfer funds for border barrier construction, the district court in Sierra Club and California (and the Ninth Circuit on appeal in Sierra Club ) concluded that the plaintiffs in these cases had satisfied these threshold procedural requirements. The court ruled that the plaintiffs' ability to bring their suits was based on the federal courts' equitable power to enjoin unlawful executive action. In so doing, the district court also determined that the "zone of interests" requirement does not apply to claims resting on an equitable (as opposed to a statutory) cause of action. Reviewing the district court's ruling in Sierra Club , the Ninth Circuit agreed that the plaintiffs had an equitable cause of action to challenge the lawfulness of executive action, and determined that they also had a cause of action under the Administrative Procedure Act. The Ninth Circuit expressed "doubt[s]" that the zone-of-interests test applied to equity-based claims, but determined that the plaintiffs satisfied any zone-of-interest requirement that might apply to either of these causes of action. The Supreme Court's Order Though the district court and the Ninth Circuit concluded that the plaintiffs in Sierra Club and California were proper parties to challenge the Trump Administration's intended use of Section 8005, the Supreme Court issued an order staying the district court's injunction. After the Ninth Circuit declined to stay the district court's permanent injunction, the Trump Administration asked the Supreme Court to do so, and on July 26, 2019, the Supreme Court issued an order staying the permanent injunction. Chief Justice Roberts and Justices Thomas, Alito, Gorsuch, and Kavanaugh voted to grant the stay in full, while Justice Breyer indicated that he would have granted the stay in part. The Court's order stated that "[a]mong the reasons" for staying the injunction, "the Government ha[d] made a sufficient showing at this stage that the plaintiffs have no cause of action to obtain review of the Acting [Secretary of Defense's] compliance with Section 8005." The Court's order further stated that the stay would continue "pending disposition of the [Administration's] appeal in the [Ninth Circuit] and disposition of the Government's petition for a writ of certiorari," and will "terminate automatically" upon the Court's denial of a petition for certiorari submitted by the Administration. Justices Ginsburg, Sotomayor, and Kagan voted to deny the request for a stay. Justice Breyer explained that he would have "grant[ed] the Government's application to stay the injunction only to the extent that the injunction prevents the Government from finalizing the contracts [for border barrier construction] or taking other preparatory administrative action," but would have left the injunction "in place insofar as it precludes the Government from disbursing funds or beginning construction." Justice Breyer explained that granting a stay of the injunction in full would irreparably harm the plaintiffs, while denying a stay of the injunction would irreparably harm the government because all funds not obligated by the end of the fiscal year would become unavailable. According to Justice Breyer, staying the injunction to allow the Trump Administration to "finaliz[e] contracts or tak[e] other preparatory administration action" for constructing border barriers would "avoid harm to both the Government and [the plaintiffs] while allowing the litigation to proceed." By staying the district court's permanent injunction, the Supreme Court enabled the Trump Administration to use funds transferred under Section 8005 to construct border barriers, at least during the pendency of the litigation in the Sierra Club and California cases. However, the Court's order did not address the merits of Section 8005 or any of the other statutory authorities at issue in that litigation. Moreover, the Court's order makes clear that it applies only at "this stage" of the litigation and therefore is not binding on the Ninth Circuit as it considers the Administration's appeal of the permanent injunction. As a result, the Court's order does not prevent the Ninth Circuit in Sierra Club âwhich is currently considering the Trump Administration's appeal from the permanent injunctionâfrom concluding that the Sierra Club plaintiffs have a cause of action to enforce Section 8005. Nor does it prevent the district court in Sierra Club and California from ruling on the other funding authorities (including Section 284) and, perhaps, enjoining the Trump Administration from using those authorities to construct border barriers. Considerations for Congress Subsequent Legislation The Supreme Court has said that the Appropriation Clause's "fundamental and comprehensive purpose .Â .Â . is to assure that public funds will be spent according to the letter of the difficult judgments reached by Congress as to the common good and not according to the individual favor of Government agents or the individual pleas of litigants." Consequently, Congress has the power, subject to presidential veto, to enact legislation either appropriating more funds for border barrier construction, to limit the extent that the Administration's proposed funding sources may be used for border barrier construction, or to prohibit the Administration from obtaining additional funding through existing mechanisms. As part of the FY2020 appropriations process, the 116th Congress had considered provisions limiting the expenditure of annually appropriated funds for border barrier construction, though none have yet been enacted. For example, Section 8127 of Division C of H.R. 2740 , the DOD Appropriations Act for FY2020, as passed by the House on June 19, 2019, would generally have provided that "None of the funds appropriated or otherwise made available by this Act or any prior Department of Defense appropriations Acts may be used to construct a wall, fence, border barriers, or border security infrastructure along the southern land border of the United States." If this provision had been enacted it would likely have rendered the litigation over the Northern District of California's injunction moot, as the use of FY2019 funds for the purposes sought by the Administration would be expressly prohibited. Separately, the House-passed H.R. 2740 would also have limited the general transfer authority under either Sections 8005 or 9002 from being used to transfer funds into or out of the DOD Drug Interdiction Account, and the bill would reduce the overall amount of general transfer authority available under Section 8005 from $4 billion to $1 billion. The initial House-passed National Defense Authorization Act for FY2020 included similar limitations. None of these limitations were included as part of the enacted Consolidated Appropriations Act, 2020, or the enacted FY2020 National Defense Authorization Act. In February 2019, the Administration requested $5 billion in border barrier funding for FY2020 to support the construction of approximately 206 miles of border barrier system. The House Appropriations Committee responded to this by recommending no funding for border barriers in H.R. 3931 âits FY2020 DHS Appropriations bill. In addition, the House Appropriations Committee-reported bill would have restricted the ability to transfer or reprogram funds for border barrier construction. That bill stated in Section 227 that, aside from appropriations provided for such purpose in the last three fiscal years, "no Federal funds may be used for the construction of physical barriers along the southern land border of the United States during fiscal year 2020." Furthermore, Section 536 of that bill proposed to rescind $601 million from funding appropriated for border barriers in FY2019 âthus reducing the FY2019 funding available by the amount pledged from the Treasury Forfeiture Fund. On September 26, 2019, the Senate Appropriations Committee reported its annual appropriations act for DHS for FY2020, which would have provided $5 billion for additional new miles of pedestrian fencing. As part of the Consolidated Appropriations Act, 2020, Congress provided $1.375 billion for "construction of barrier system along the southwest border." Comptroller General Opinion Committees and Members of Congress have also requested legal opinions from the Comptroller General of the United States, head of the Government Accountability Office (GAO), regarding questions of appropriations law and executive agencies' compliance with such laws. Though GAO's decisions are not binding on federal courts, those decisions are sometimes given consideration by reviewing courts because of GAO's expertise in appropriations law and its role as the "auditing agent of Congress." On September 5, 2019, in response to such a request from Senate Appropriations Committee Vice Chairman Leahy, Subcommittee on Defense Vice Chairman Durbin, and Subcommittee on Military Construction, Veterans Affairs, and Related Agencies Ranking Member Schatz, the Comptroller General issued a legal opinion concluding that the Administration's use of Section 8005 of the 2019 DOD Appropriations Act and 10 U.S.C. Â§Â 284 to fund border barrier construction is lawful. Like the Northern District of California and the Ninth Circuit decisions, GAO's analysis of the transfer authority focused primarily on (1) whether the use of the funds for border barrier construction was an unforeseen military requirement, and (2) whether Congress had denied funds for the item to which funds were being transferred. GAO agreed with the Administration's argument that the relevant "military requirement" for purposes of Section 8005 was the construction of border barriers by DOD pursuant to its Section 284 authority, not the construction of border barriers generally. According to GAO, this military requirement was "unforeseen" because it was not until DHS requested assistance from DOD to construct border barriersâwell after the President's budget requestsâthat the need for DOD assistance became known. Consequently, GAO concluded that DHS's request for assistance constituted an unforeseen military requirement that made available the transfer authority under Section 8005. GAO next addressed whether the construction of border fencing had been "denied by the Congress." GAO began by noting that this language was not defined by Section 8005 or elsewhere in the FY2019 DOD Appropriations Act. Relying on the "ordinary meaning" of the term "deny" as well as previous decisions by the Comptroller General, GAO concluded that a denial of funds for purposes of Section 8005 required that Congress "actively refuse" funds for an item, rather than merely fail to appropriate the full amount requested for that item. Applying this standard, GAO asserted that it could not identify any statutory provision that prohibited DOD from using funds to build border barriers pursuant to its Section 284 authority. Accordingly, GAO agreed with the Administration that Congress had not denied funds for that purpose, within the meaning of Section 8005. Summary:	null	96	85,378	85,380	85,380	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: P resident Trump has long advocated for the construction of additional fencing, walls, and other barriers along the U.S.-Mexico border to deter unlawful border crossings. Less than a week after taking office, the President issued an executive order directing the Secretary of Homeland Security to "take all appropriate steps to immediately plan, design, and construct a physical wall along the southern border." This policy has engendered a robust debate in the public sphere, and a conflict has also made its way to federal court, with various plaintiffs challenging the lawfulness of the Trump Administration's initiatives to pay for the construction of border barriers by reprogramming funds from existing appropriations. At their core, these lawsuits concern whether the Administration's funding initiatives exceed existing statutory authorization and conflict with Congress's constitutionally conferred power over federal funds. Article I of the Constitution provides that "[n]o money shall be drawn from the Treasury but in Consequence of Appropriations made by Law." As Justice Joseph Story noted in his Commentaries on the Constitution , the appropriations power was given to Congress to guard against arbitrary and unchecked expenditures by the executive branch and to "secure regularity, punctuality, and fidelity, in the disbursement of the public money." "In arbitrary governments," he expounded, "the prince levies what money he pleases from his subjects, disposes of it, as he thinks proper, and is beyond responsibility or reproof." To avoid giving the President such "unbounded power over the public purse of the nation," the Framers designated Congress "the guardian of [the national] treasure"âgiving to it "the power to decide, how and when any money should be applied[.]" This "power to control, and direct the appropriations," Justice Story explained, serves as "a most useful and salutary check upon profusion and extravagance, as well as upon corrupt influence and public speculation." Justice Story's sentiments echoed those of James Madison, who in The Federalist No. 58 described the legislature's "power over the purse" as "the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure." The Trump Administration's early efforts to secure funding for border barriers focused on negotiating with Congress to secure appropriations specifically designated for that task. In his FY2018 budget proposal, President Trump requested that Congress appropriate $1.57 billion for border barrier construction. Similarly, President Trump's FY2019 budget request sought $1.6 billion "to construct approximately 65 miles of border wall in south Texas." Congress did not appropriate the amounts requested for either fiscal year. For FY2018, Congress appropriated $1.375 billion for new or repaired fencing and other forms of barriers along the U.S.-Mexico border, as well as $196 million for border monitoring technology. As FY2019 began, Congress and the President negotiated, inter alia , the amount of funding to provide the Department of Homeland Security (DHS) for border barrier construction for FY2019. Ultimately, Congress and the President did not agree on funding levels, leading to a 35-day lapse of appropriations for DHS and other portions of the federal government. During the partial government shutdown, President Trump increased his request for border barrier funding from $1.6 billion to $5.7 billion. Congress did not grant this request. Instead, in the Consolidated Appropriations Act, 2019 (CAA 2019), Congress appropriated $1.375 billionâ$4.325 billion less than was ultimately requestedâfor "the construction of primary pedestrian fencingÂ . . . in the Rio Grande Valley Sector." President Trump signed the CAA 2019 on February 15, 2019, that same day announcing that his Administration would "take Executive action" to "secure additional resources" to construct barriers along the southern border. In particular, President Trump announced that his Administration had identified "up to $8.1 billion" from three additional funding sources "to build the border wall." It remains to be seen whether the Administration will identify further funding sources from the FY2020 budget cycle. Several plaintiffs filed lawsuits in federal courts in California, the District of Columbia, and Texas to prevent the Trump Administration from taking this action. These plaintiffs assert that the Administration's funding initiatives are not authorized under existing law and thus violate the constitutional and statutory provisions requiring that federal money be spent only for the purposes, and in the amounts, specified by Congress. In May 2019, a federal district court in California concluded that one of the Administration's funding initiatives was unlawful and prohibited the Administration from using that authority to repurpose funds for border barrier construction. Though the U.S. Court of Appeals for the Ninth Circuit denied the Administration's request to stay the injunction, the Supreme Court granted that request, thus allowing the Administration to begin contracting for construction of border barriers while litigation in the case continues. A second federal district court in Texas has separately enjoined the use of military construction funds for border barrier construction. Meanwhile, the federal district court in the District of Columbia ruled that the plaintiff in that caseâthe U.S. House of Representativesâdid not have standing to sue and dismissed the suit. The U.S. House of Representatives has appealed the decision. According to DHS's U.S. Customs and Border Protection (CBP), there had been roughly 654 miles of primary barriers deployed along the U.S.-Mexico border as of January 2017. In May 2019, CBP declared that "approximately 205 miles of new and updated border barriers" had been funded (though not necessarily constructed) "through the traditional appropriations process and via Treasury Forfeiture Funding" since January 2017. In addition to this mileage, CBP described DOD as funding in FY2019 "up to approximately 131 miles of new border barriers in place of dilapidated or outdated designs, in addition to road construction and lighting installation." In total, CBP stated that some 336 total miles of barriers (including both replacement barriers and barriers deployed in new locations) would be deployed using funds from FY2017 through FY2019. This report addresses the litigation surrounding the Trump Administration's initiatives to repurpose existing appropriations for the construction of border barriers along the U.S.-Mexico border. It begins by providing an overview of the authorities cited by the Trump Administration to obtain border barrier funding and the steps the Administration has taken to utilize those authorities. It then discusses DHS's existing authority to construct border barriers and the various authorities on which the Trump Administration has relied to secure additional border barrier funding. Finally, this report discusses the ongoing litigation regarding the Administration's funding initiatives, with a focus on the parties' arguments and judicial decisions. Legal Authorities Cited by the Trump Administration The Trump Administration has cited several statutory authorities as giving it both the power and the necessary funds to construct additional border barriers. Some of these authorities belong to DHS, the agency with primary responsibility for securing the U.S. borders. Other authorities permit the Department of Defense (DOD) or the Department of the Treasury to transfer funds for specified military, law enforcement, or other emergency purposes. These authorities are described in more detail below. First , Section 102 of the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) as amended generally authorizes DHS to construct barriers and roads along the international borders in order to deter illegal crossings at locations of high illegal entry, and further directs the agency to construct fencing along no less than 700 miles of the U.S.-Mexico border. This law also authorizes the Secretary of Homeland Security to waive "all legal requirementsÂ . . . necessary to ensure expeditious construction of . . . [the] barriers." Second , the Secretary of Defense is authorized by 10 U.S.C. Â§Â 2808 to "undertake military construction projects . . . not otherwise authorized by law that are necessary to support such use of the armed forces." President Trump stated that he would invoke his authority under this provision to repurpose $3.6 billion allocated to "military construction projects" for border barrier construction. This authority becomes available upon a "declaration by the President of a national emergency" as authorized by the National Emergencies Act (NEA). Third , DOD has authority under 10 U.S.C. Â§Â 284 ("Section 284") to support other departments' or agencies' counterdrug activities, including through the construction of fencing to block drug smuggling corridors. President Trump proposed to direct the DOD to use its authority under Section 284 to support DHS's "counterdrug activities" through the construction of fencing across drug trafficking corridors at the southern border. These support activities would be funded by $2.5 billion in DOD's Drug Interdiction and Counter-Drug Activities Account (Drug Interdiction Account), which would be transferred to that account using the transfer authority in Sections 8005 and 9002 of the 2019 DOD Appropriations Act. These authorities authorize the transfer of up to $6 billion of DOD funds for "unforeseen military requirements" but only "where the item for which funds are requested has been denied by Congress." Fourth , the Treasury Forfeiture Fund contains funds that are confiscated by, or forfeited to, the federal government pursuant to laws enforced or administered by certain law enforcement agencies, and unobligated money in this fund may be used for obligation or expenditure in connection with "law enforcement activities of any Federal agency." The President proposed to withdraw $601 million in unobligated funds from the Treasury Forfeiture Fund ( TFF) to pay for border barrier construction. The Trump Administration has taken steps to make these funds available to construct border barriers along the U.S.-Mexico border. On February 15, the President declared a national emergency under the NEA, and has subsequently vetoed two congressional resolutions disapproving that declaration (which Congress did not override). On September 3, 2019, the Secretary of Defense directed the Acting Secretary of the Army to "expeditiously undertake" 11 border barrier military construction projects pursuant to Section 2808. In addition, on February 25, DHS requested that DOD use its authority under 10 U.S.C. Â§Â 284 to assist in constructing border barriers. DOD granted this request on March 25 and invoked the transfer authority in Section 8005 of the FY2019 DOD Appropriations Act to move $1 billion of Army personnel funds into DOD's Drug Interdiction Account for DOD to help DHS construct border barriers. A few months later, DOD again invoked Section 8005 (along with the related transfer authority in Section 9002 of the FY2019 DOD Appropriations Act) to transfer another $1.5 billion of personnel, procurement, and overseas contingency operation funds into the Drug Interdiction Account for use in constructing border barriers. The Trump Administration proposed to construct "approximately 131 miles of new border barriers . . . in addition to road construction and lighting installation" with these funds. For each of the proposed projects, the Acting Secretary of Homeland Security utilized IIRIRA Â§Â 102's waiver authority to waive the application of several federal environmental, conservation, and historic preservation statutes, including the National Environmental Policy Act (NEPA), the Endangered Species Act, the Safe Drinking Water Act, and the Antiquities Act, to the "fence[s], roads, and lighting" that DOD will be "assist[ing]" in "constructing" under Section 284. Department of Homeland Security Authority DHS's authority to construct barriers along the southern border derives from IIRIRA Â§Â 102, as amended. This law provides that "[t]he Secretary of Homeland Security shall take such actions as may be necessary to install additional physical barriers and roads . . . in the vicinity of the United States border to deter illegal crossings in areas of high illegal entry into the United States." IIRIRA Â§Â 102 directs that "the Secretary of Homeland Security shall construct reinforced fencing along not less than 700 miles of the southwest border," while also "identify[ing] the 370 milesÂ . . . along the southwest border where fencing would be most practical and effective in deterring smugglers and aliens attempting to gain illegal entry into the United States." Finally, IIRIRA Â§Â 102 gives the Secretary of Homeland Security flexibility on where to construct barriers, allowing the Secretary to decline to build a border barrier in a particular location if "[the Secretary] determines that the use or placement of such resources is not the most appropriate means to achieve and maintain operational control over the international border.Â .Â .Â ." To expedite the construction of border barriers, IIRIRA Â§Â 102 authorizes the Secretary of Homeland Security to, "in [the] Secretary's sole discretion," "waive all legal requirements" that the Secretary "determines necessary to ensure expeditious construction of the barriers and roads under this section." And to limit potential legal challenges to this waiver authority, IIRIRA Â§Â 102 cabins the jurisdiction of federal district courts to claims "alleging a violation of the Constitution" and forecloses appellate review of district court decisions, except by seeking discretionary review in the U.S. Supreme Court. IIRIRA Â§Â 102's waiver authority has been challenged on constitutional grounds in cases involving waivers of NEPA and other federal environmental statutes. Those challenging the waiver authority have contended that it violates the nondelegation doctrine, the Presentment Clause, and the Take Care Clause. Courts, however, have uniformly rejected these challenges and concluded that "a valid waiver of theÂ . . . laws under [IIRIRA Â§Â 102] is an affirmative defense" to all claims arising from the waived laws. The National Emergencies Act and Military Construction Funds The President invoked 10 U.S.C. Â§Â 2808 and announced that his Administration would seek to reallocate $3.6 billion from DOD's military construction budget for border barrier construction. The authority to take this action hinges on the President declaring a national emergency under the NEA, which President Trump did on February 15. On September 3, 2019, DOD identified 127 military construction projects that it would delay or suspend in order to reallocate $3.6 billion toward 11 barrier construction projects using this authority. The NEA provides general requirements governing the declaration of a national emergency, while Section 2808 contains additional requirements for its exercise. The National Emergencies Act The Supreme Court has explained that the President's authority "must stem either from an act of Congress or from the Constitution itself." Because Article II of the Constitution does not grant the Executive general emergency powers, the President generally must rely on Congress for such authority. Congress has historically given the President robust powers to act in times of crisis. By 1973, Congress had enacted more than 470 statutes granting the President special authorities upon the declaration of a "national emergency," but these statutes imposed no limitations on either the President's discretion to declare an emergency or the duration of such an emergency. The Senate Special Committee on National Emergencies and Delegated Emergency Powers (previously named the Senate Special Committee on the Termination of the National Emergency) ("Special Committee") was apparently concerned that four presidentially declared national emergencies remained extant in the mid-1970s, the earliest dating to 1933. In 1973, the Special Committee concluded that the President's crisis powers "confer[red] enough authority to rule the country without reference to normal constitutional process," and so Congress enacted the NEA in 1976 to pare back the President's emergency authorities. The NEA does not define "national emergency." Rather, the NEA established a framework to provide enhanced congressional oversight and prevent emergency declarations from continuing in perpetuity. To accomplish these goals, the NEA terminated all then-existing presidentially declared emergencies. The NEA also established procedures for future declarations of national emergencies, requiring the President to specify which statutory emergency authorities he intends to invoke upon a declaration of a national emergency (unlike the pre-NEA regime, under which the declaration of an emergency operated as an invocation of all of the President's emergency authorities); publish the proclamation of a national emergency in the Federal Register and transmit it to Congress; maintain records and transmit to Congress all rules and regulations promulgated to carry out such authorities; and provide an accounting of expenditures directly attributable to the exercise of such authorities for every six-month period following the declaration. The NEA further provides that a national emergency will end (1) automatically after one year unless the President publishes a notice of renewal in the Federal Register , (2) upon a presidential declaration ending the national emergency, or (3) if Congress enacts a joint resolution terminating the emergency (which would likely require the votes of two-thirds majorities in each house of Congress to override a presidential veto). While the NEA directs each house of Congress to meet every six months to consider whether to end a national emergency by joint resolution, Congress has never met to consider such a vote under that deadline prior to this year. The statute does not appear to prevent Congress from considering a resolution to terminate a national emergency at any time before or after a six-month interval. Although a purpose of the NEA was to end perpetual states of emergency, the law does grant the President authority to renew an emergency declaration. As a result, there are currently 34 national emergency declarations in effect, some of which have been renewed for decades. The declaration of a national emergency under the NEA enables the President to invoke a wide array of emergency authorities conferred by statute. The most often invoked is the International Emergency Economic Powers Act (IEEPA), which gives the President broad authority to impose sanctions on foreign countries and entities. Besides Section 2808, another authority that could provide for the reprogramming of funds for construction purposes is 33 U.S.C. Â§ 2293, which, in the event of a national emergency or declaration of war, authorizes the Secretary of the Army to end or defer Army Corps of Engineers civil works projects that are "not essential to the national defense." The Secretary of the Army can then use the funds otherwise allocated to those projects for "authorized civil works, military construction, and civil defense projects that are essential to the national defense." No President has ever invoked this authority, but it could potentially be used in connection with President Trump's declaration of a national emergency at the southern border. Military Construction Funds A declaration of a national emergency triggers Section 2808, which provides emergency authority for unauthorized military construction in the event of a declaration of war or national emergency. President Trump invoked this statutory authority to reallocate $3.6 billion from DOD military construction funds to border barrier construction, stating in his emergency declaration that "this emergency requires use of the Armed Forces and . . . that the construction authority provided in section 2808 of title 10, United States Code, is invoked and made available, according to its terms, to the Secretary of Defense and, at the discretion of the Secretary of Defense, to the Secretaries of the military departments." The President did not describe in his proclamation the tasks the Armed Forces would undertake with respect to the emergency at the southern border. Originally enacted in 1982, Section 2808 provides that upon the President's declaration of a national emergency "that requires use of the armed forces," the Secretary of Defense may "without regard to any other provision of law . . . undertake military construction projects . . . not otherwise authorized by law that are necessary to support such use of the armed forces." The term "military construction project" is defined to include "military construction work," and "military construction" is, in turn, defined to "include any construction, development, conversion, or extension of any kind carried out with respect to a military installation . . . or any acquisition of land or construction of a defense access road." The term "military installation" means a "base, camp, post, station, yard, center, or other activity under the jurisdiction of the Secretary of a military department." Finally, Section 2808 limits the funds available for emergency military construction to "the total amount of funds that have been appropriated for military construction" but which have not been obligated. Section 2808's legislative history provides limited guidance on the types of emergencies and military construction projects envisioned. A House Armed Services Committee report accompanying the original 1982 legislation indicated that while "[i]t is impossible to provide in advance for all conceivable emergency situations," Section 2808 was intended to address contingencies "ranging from relocation of forces to meet geographical threats to continuity of efforts after a direct attack on the United States during which the Congress may be unable to convene." With certain limited exceptions, prior Presidents have generally invoked this authority for construction at military bases in foreign countries. Department of Defense Authorities To obtain additional funds to construct border barriers, the Trump Administration has invoked DOD's authority under 10 U.S.C. Â§Â 284 to support DHS in constructing border fencing. This support would be funded by money transferred to DOD's Drug Interdiction Account pursuant to Sections 8005 and 9002 of the 2019 DOD Appropriations Act. These authorities are not contingent on the declaration of a national emergency. Section 284 In general, U.S. military involvement in civilian law enforcement is permitted only when specifically authorized by Congress. For example, the Secretary of Defense can "make available any equipmentÂ . . . base facility, or research facility" to any "civilian law enforcement officialÂ . . . for law enforcement purposes." Section 284 is another of these authorities. It authorizes the Secretary of Defense to "provide support for the counterdrug activities or activities to counter transnational organized crime of any other department or agency of the Federal Government or of any State, local, tribal, or foreign law enforcement agency." DOD may provide support under Section 284 only after it has been "requested" by the appropriate official from the governmental agency or department, and then only for "the purposes set forth" in Section 284. Those purposes include "the maintenance and repair" of certain equipment, the "training of law enforcement personnel" related to "[c]ounterdrug or counter-transnational organized crime," and "[a]erial and ground reconnaissance." Section 284 also authorizes DOD to provide support for the "[c]onstruction of roads and fences and installation of lighting to block drug smuggling corridors across international boundaries of the United States." And to ensure that DOD can provide this support expeditiously, support under Section 284 is generally not subject to the requirements that govern DOD's other authority to support civil law enforcement agencies. Section 284 also provides for congressional oversight of DOD's support activities. At least 15 days prior to providing support to another agency under Section 284, the Secretary of Defense must submit "a description of any small scale construction project for which support is provided" to the appropriate congressional committees. "Small scale construction project" is, in turn, defined to encompass projects that cost no more than $750,000. Section 284 does not include a reporting requirement for any projects exceeding $750,000. Historically, DOD's activities under Section 284 have been funded by the "Drug Interdiction and Counter-Drug Activities" line item in its annual appropriations bill. For FY2019 Congress appropriated $1,034,625,000 to this line item, with $517,171,000 of that amount being allocated for "counter-narcotics support." Sections 8005 and 9002 of the 2019 DOD Appropriations Act On February 25, 2019, DHS submitted a request to DOD to provide assistance pursuant to Section 284 in constructing border barriers in three locations along the U.S.-Mexico border, and DOD then approved the use of funds from the Drug Interdiction Account for these projects. However, much of the FY2019 funds appropriated for "counter-narcotics support" had been obligated by the time DOD made its request. As a result, DOD sought to use its authority under Section 8005 of the 2019 DOD Appropriations Act to transfer other funds into the Drug Interdiction Account. Section 8005 authorizes the Secretary of Defenseâ"[u]pon a determination by the Secretary of Defense that such action is necessary in the national interest" and with "approval of the Office of Management and Budget"âto "transfer not to exceed [$4 billion] of working capital funds of the [DOD] or funds made available in [the 2019 DOD Appropriations Act] for military functions (except military construction)." Section 8005 further provides that funds may be transferred only "for higher priority items, based on unforeseen military requirements, than those for which originally appropriated," and may not be transferred "where the item for which funds are requested has been denied by Congress." Finally, Section 8005 requires the Secretary of Defense to "notify the Congress promptly of all transfers made pursuant to this authority." This transfer authority, in its current form, originated with the FY1974 DOD Appropriations Act. The 1974 act appears to be the first instance when Congress expressly prohibited the transfer of DOD funds for purposes for which Congress had denied funding. The House committee report for this legislation explained that this language was added "to tighten congressional control of the reprogramming process." Before that time, DOD had "onÂ .Â .Â . occasion[]" reprogrammed funds "which ha[d] been specifically deleted in the legislative process" after obtaining the consent of the authorizing and appropriations committees in the House and Senate. The House committee report explained that this practice "place[d] committees in the position of undoing the work of the Congress." Characterizing this practice as "untenable," the House report declared that "henceforth no such requests will be entertained." Invoking Section 8005's transfer authority, DOD in February 2019 authorized the transfer of an initial $1 billion of Army personnel funds to the Drug Interdiction Account. And on May 9, DOD authorized the transfer of an additional $1.5 billion to that fund using Sections 8005 and 9002 of the 2019 DOD Appropriations Act. Section 9002 authorizes the Secretary of Defense to "transfer up to [$2 billion] between the appropriations or funds made available to [DOD] in this title." This authority is "in addition to any other transfer authority available to [DOD]"âincluding Section 8005âand is also "subject to the same terms and conditions as the authority provided in section 8005." The Acting Secretary of Defense informed Congress of these transfers. Treasury Forfeiture Fund In various federal statutes, Congress has authorized the confiscation, or forfeiture to the federal government, of any property used to facilitate a crime as well as the profits and proceeds of such crimes. None of these statutes is contingent on the declaration of a national emergency. Congress established the TFF to hold proceeds of property forfeited under most laws enforced or administered by a law enforcement organization within the Department of the Treasury or by the Coast Guard. Funds in the TFF may be used by the Secretary of the Treasury for a variety of law enforcement purposes. Some of these purposes are mandatory, such as making "equitable sharing payments" to other federal, state, and local law enforcement agencies that participate in the seizure or forfeiture of property. Others, such as awards for information leading to forfeited property covered by the TFF, are subject to the discretion of the Secretary of the Treasury. At the end of each fiscal year, the Secretary of the Treasury must reserve a sufficient amount in the TFF to cover mandatory and discretionary expenditures. Unobligated balances in the fund over the reserved amount may be used "for obligation or expenditure in connection with the law enforcement activities of any Federal agency or of a Department of the Treasury law enforcement organization." This unobligated amount is known as "Strategic Support." At the end of 2018, DHS requested $681 million of Strategic Support from the TFF for "border security." In response to that request, the Secretary of the Treasury transferred roughly $601 million to CBP for "border barrier construction." The Border Barrier Litigation Following the Trump Administration's announcement of its initiatives to fund border barrier construction, citizens groups, states, and the U.S. House of Representatives filed lawsuits in federal district courts in California, the District of Columbia, and Texas. The plaintiffs in these lawsuits have argued that the Trump Administration's funding initiatives are not authorized by (or are inconsistent with) the relevant statutory authorities. As a result, they have also contended that the Administration's funding initiatives violate constitutional separation of powers principles and the Appropriations Clause's directive that money may be withdrawn from the Treasury only "in Consequence of Appropriations made by Law." Finally, some plaintiffs have asserted that IIRIRA Â§Â 102 does not empower DHS to waive the requirements of NEPA for the border barrier projects being constructed with DOD's assistance because IIRIRA Â§Â 102's waiver authority extends only to projects undertaken by DHS. After bringing suit, certain plaintiffs filed motions for a preliminary injunction, asking the courts to prohibit DOD from implementing its funding initiatives while the litigation was ongoing. On May 24, 2019, a judge on the U.S. District Court for the Northern District of California issued decisions in the two cases pending in that courtâ Sierra Club v. Trump and California v. Trump âresolving one of the issues presented by the plaintiffs' motion: whether Sections 8005 and 9002 of the 2019 DOD Appropriations Act authorized the transfer of funds for border barrier construction. The district court determined that it did not for two reasons. It first concluded that this would violate Section 8005's prohibition on transferring funds where "the item for which funds [were] requested ha[d] been denied by Congress." The court also ruled that the Administration's proposed use of Section 8005 was unlawful because DOD's purported need for additional border barrier funding was not an "unforeseen military requirement," as required by Section 8005. Based on this ruling, the court in Sierra Club issued a preliminary injunction barring the Administration from using Section 8005 to transfer funds for border barrier construction while litigation proceeded. The court declined to also issue a preliminary injunction in the California case because (with the Sierra Club injunction in place) the plaintiffs in California could not establish that they would be irreparably harmed by the denial of an injunction. Because the plaintiffs' lawsuit preceded DOD's May 9 decision to transfer $1.5 billion to the Drug Interdiction Account, the preliminary injunction applied only to the initial, February 25 transfer of $1 billion to fund projects in New Mexico and Arizona. But in a later decision, the district court applied the reasoning from its initial ruling to conclude that the $1.5 billion transfer, like the first, was not authorized by Section 8005 or Section 9002. The court then issued an order permanently prohibiting the Administration from using either of these provisions to transfer any of the $2.5 billion for border barrier construction. The Trump Administration appealed the district court's permanent injunction to the U.S. Court of Appeals for the Ninth Circuit and asked that court to stay the injunction pending appeal. The Ninth Circuit denied that request, agreeing with the district court that Section 8005 does not authorize the transfer of funds for border barrier construction. However, the Supreme Court subsequently issued an order staying the injunction during the pendency of the litigation. As a result of the Supreme Court's order, the Trump Administration may use Section 8005 to transfer funds for border barrier construction. The district court subsequently issued a permanent injunction against the use of military construction funds as well, but stayed the injunction pending appeal. The Texas lawsuit, El Paso County v. Trump , also resulted in a permanent injunction against the Trump Administration's funding scheme for border barrier construction using Section 2808. The district court determined that the use of those provisions to fund border barriers clashed with the Consolidated Appropriations Act, 2019 (CAA 2019), provision that prohibits the use of appropriated funds "to increase . . . funding for a program, project, or activity as proposed in the President's budget request for a fiscal year" unless it is made pursuant to the reprogramming or transfer provisions of an appropriations Act. This section discusses the various arguments raised in these lawsuits regarding the lawfulness of the Trump Administration's initiatives for funding border barrier construction. It also discusses the judicial decisions that have resolved, or otherwise opined on, the lawfulness of the Administration's funding initiatives. The federal court in the District of Columbia presiding over the U.S. House of Representatives' case dismissed that suit for lack of standing, and that decision is currently being appealed. Legal Arguments and Judicial Decisions Regarding the Trump Administration's Efforts to Fund Additional Barrier Deployments Section 8005 The Northern District of California's Sierra Club Decision166 As discussed earlier, Section 8005 authorizes the transfer of funds for "military functions," but provides that funds may be transferred only "for higher priority items, based on unforeseen military requirements, than those for which originally appropriated." Further, funds may not be transferred "where the item for which funds are requested has been denied by Congress." The district court in Sierra Club v. Trump concluded that Section 8005 does not authorize the transfer of funds for the construction of border barriers because the transfer was for an "item" for which funds had been denied by Congress and, in any event, because the asserted need for the construction of border barriers was not "unforeseen." The district court first addressed whether the proposed transfer was for an "item" for which Congress had denied funds. In its briefs, the Trump Administration had argued that the relevant "item for which funds [were] requested" was DOD's assistance to DHS under 10Â U.S.C. Â§Â 284 for "counterdrug activities," not (as the plaintiffs urged) the construction of border barriers generally. Thus, the Administration urged, because Congress had not "denied" a request for appropriations for DOD "counterdrug" assistance under Section 284, transferring funds for that purpose was not prohibited by Section 8005. The district court rejected that argument, concluding instead that the historical context leading up to the transferâincluding the previous disagreement between the Administration and Congress on the appropriate funding for border barriers that led to an extended lapse in appropriationsâshowed that the "item for which funds [were] requested" was the construction of border barriers generally, regardless of which agency would undertake construction or the statutory authority on which it might rely. "[T]he reality is that Congress was presented withâand declined to grantâa $5.7 billion request for border barrier construction," the court explained. Thus, "[b]order barrier construction, expressly, is the item [the Administration] now seek[s] to fund via the Section 8005 transfer, and Congress denied the requested funds for that item." The court also relied on portions of Section 8005's legislative history to support this conclusion. In particular, the court cited portions of a House report from 1973, which explained that Congress originally adopted the "denied by Congress" language to "'tighten congressional control of the reprogramming process''' and to "'prevent the funding for programs which have been considered by Congress and for which funding has been denied.'" In the court's view, an interpretation of Section 8005 that would allow the Administration to transfer money for border barrier construction, despite Congress's refusal to appropriate the amount of money requested for that purpose, would undermine Section 8005's objective. The court also determined that Section 8005's transfer authority was unavailable because the Administration's proposed border barrier construction was not an " unforeseen military requirement[]." The Administration had argued that the proposed border barrier construction (i.e., the "military requirement") was "unforeseen" because the need for DOD to provide support to DHS through Section 284 was not known until DHS had requested that assistanceâwhich occurred after the President's budget request and after Congress had passed the DOD appropriations bill with less funding for barrier construction than the Administration had requested. The district court rejected this interpretation of Section 8005. On this theory, the court explained, " every request for Section 284 support" would be unforeseen because the need to rely on that particular statutory authority would only ever arise when another agency requests DOD's assistance under that provision. The district court also asserted that "[the Administration's] argument that the need for the requested border barrier construction funding was 'unforeseen' cannot logically be squared with the Administration's multiple requests for funding" for a border wall. Finally, the court invoked the canon of constitutional avoidance to support its reading of Section 8005. Under this rule of statutory interpretation, when there are two possible interpretations of a statute, one of which would raise serious constitutional concerns, courts should adopt the interpretation that avoids the constitutional difficulties. According to the district court, the Administration's interpretation of Section 8005 would "pose serious problems under the Constitution's separation of powers principles" because it would allow the executive branch to "render meaningless Congress's constitutionally-mandated power" to control federal expenditures by "ceding essentially boundless appropriations judgment" to the executive branch. Avoiding these potential pitfalls was, in the court's view, another reason to reject the Administration's broader interpretation of Section 8005. On these grounds, the court decided that the plaintiffs would likely succeed on their claim that the Administration could not lawfully use Section 8005 to transfer funds for border barrier construction. Thus, after finding the remaining preliminary injunction requirements satisfied, the court entered an order temporarily prohibiting the Administration from using the $1 billion of funds transferred under Section 8005 to construct the specified border barriers in New Mexico and Arizona. After issuing this decision, the parties submitted additional briefing on the lawfulness of the Administration's May 9 decision to use Sections 8005 and 9002 to transfer another $1.5 billion to the Drug Interdiction Account for the construction of border barriers in four additional locations in California and Arizona. On June 28, the district court issued a decision adopting the same reasoning as its earlier opinion. And having found both of the Administration's proposed uses of Section 8005's transfer authority unlawful, the court entered an injunction permanently prohibiting the Administration "from taking any action to construct a border barrier" using Section 8005. The Ninth Circuit's Sierra Club Decision The Trump Administration appealed the district court's permanent injunction to the U.S. Court of Appeals for the Ninth Circuit and asked that court to stay the injunction pending appeal. On July 3, a divided panel of the Ninth Circuit denied the Administration's request for a stay, concluding that the Administration had not shown a likelihood of success on the merits. In reaching that conclusion, the Ninth Circuit first agreed with the district court that the construction of a border barrier was not an " unforeseen military requirement," as required by Section 8005. Like the district court, the Ninth Circuit declared that the relevant "requirement" was the construction of border barriersânot, as the Administration contended, the need for DHS to request support from DOD under Section 284. The Ninth Circuit also concluded that Congress had "denied" funds for construction of the border barrier. The Administration had argued to that court that the "item for which funds [were] requested" referred to "'a particular budget item' for section 8005 purposes"âwhich Congress had not deniedâand did not encompass other requests for DHS funding for border barriers. The court of appeals rejected this reading, concluding that the "item for which funds [were] requested" was "a wall along the southern border," and that Congress had denied the Administration's request to fund that "item." "In sum," the court reasoned, "Congress considered the 'item' at issue hereâa physical barrier along the entire southern border"âand it "decided in a transparent process subject to great public scrutiny to appropriate less than the total amount the President had sought for that item. To call that anything but a 'denial' is not credible." However, as discussed in more detail below, the Supreme Court ultimately stayed the district court's injunction. The Court's stay order did not rule on the merits of Section 8005 or any of the other statutory authorities on which the Administration has relied to secure additional border barrier funding. Instead, the Court stayed the injunction because it concluded that "the Government had made a sufficient showing at this stage that the plaintiffs have no cause of action to obtain review of the Acting [Secretary of Defense's] compliance with Section 8005." Section 284 The plaintiffs in Sierra Club and California also argued that even if Section 8005 authorized the transfer of funds to the Drug Interdiction Account, Section 284 does not empower DOD to assist another agency in constructing border barriers. The plaintiffs in these cases raised several points to support this conclusion. First , they observed that Section 284 requires DOD to provide to Congress "a description of the small scale construction project for which support is provided," and defines "small scale construction" to mean "construction at a cost not to exceed $75,000 for any project." That Section 284 requires DOD to report to Congress on "small scale construction projects" and not larger projects, the plaintiffs argued, suggests that Section 284 should not be read to authorize assistance with larger-scale projects. "Congress would not have required a description of 'any small scale construction' projects if it was, at the same time, authorizing massive, multibillion-dollar expenditures under this provision," the plaintiffs argued. But even if Section 284 could be read otherwise, the plaintiffs contended that it should not be read broadly here given "the more specific and recent judgment by Congress" to appropriate only $1.375 billion for DHS border barrier construction. If there is a "specific policy embodied in a later statute," they argued, that later statute "should control judicial construction of the earlier broad statute, even though [the latter statute] has not been expressly amended." Second , the plaintiffs argued that Section 284 does not authorize DOD's proposed border barrier projects because the portion of Section 284 relied on by DOD applies solely to "block[ing] drug smuggling corridors." By contrast, the plaintiffs argued that DOD intended to use "Section 284Â .Â .Â . as a tool to create a contiguous border wall, not to address specific corridors." Third , the plaintiffs pointed to a neighboring statutory provision requiring an agency receiving DOD support "to reimburse [DOD] for that support," though DOD may waive this requirement if its support (1) "is provided in the normal course of military training or operation," or (2) "results in a benefitÂ .Â .Â . that is substantially equivalent to that which would otherwise obtain from military operations or training." The plaintiffs argued that DOD has breached this requirementâthus rendering Section 284 unavailableâbecause DHS had "requested support on a 'non-reimbursable basis,'" but neither of the two exceptions to the reimbursement requirement was met. Finally , the plaintiffs argued that DOD's reliance on Section 284 "violates the core principle that executive branch agencies may not mix and match funds from different accounts to exceed the funding limits Congress imposed." In particular, the plaintiffs noted the general rule of appropriations law that "specific appropriations preclude the use of general ones even when the two appropriations come from different accounts." Here, the plaintiffs contended, "Congress ha[d] allocated a specific amount of funding" for border barrier construction, precluding "the government [from] cobbl[ing] together other, more general sources of money to increase funding levels for that same goal." The Administration responded that the plaintiffs in Sierra Club and California had misconstrued Section 284. The Administration first argued that Section 284 contemplates that DOD may assist with projects other than "small scale construction," as certain provisions in Section 284 "refer toâbut are not limited toâ'small scale' or 'minor' construction." As to the reimbursement requirement, the Administration asserted that Section 284 itself makes the reimbursement requirement inapplicable to DOD's counterdrug activities, providing that "[t]he authority provided in this [S]ection [284] for the support of counterdrug activitiesÂ .Â .Â . by [DOD] isÂ .Â .Â . not subject to the other requirements of this chapter." Next, the Administration contended that its proposed border barrier projects satisfied Section 284's "drug smuggling corridor" requirement, as the proposed project areas were "known to have high rates of drug smuggling between the ports of entry." Finally, the Administration rejected as "without merit" the plaintiffs' argument that its use of Section 284 violated the principle that agencies "must use the [most] specific appropriation to the exclusion of [a] general appropriation." This principle, the Administration contended, applies only when both sources of funding belong to a single agency, not where the appropriations at issue are to different agenciesâthat is, Section 8005 and Section 284 to DOD and $1.375 billion to DHS in its appropriations bill. However, the district court in Sierra Club and California ultimately did not resolve this issue because it concluded that Section 8005 does not authorize the transfer of funds to be used by DOD under its Section 284 authority. And, with no district court ruling to review, the Ninth Circuit in Sierra Club also did not address this authority. The district court in El Paso County agreed with the plaintiffs on the basis that Congress's appropriation of funds for border barrier construction is a specific statute that should be given precedence over more general statutes. The court stated that "[a]n appropriation for a specific purpose is exclusive of other appropriations in general terms which might be applicable in the absence of the specific appropriation." Moreover, the court held the use of Section 284 funds for border barrier construction was precluded by Section 739 of the CAA 2019, which prohibits the use of appropriated funds to increase funding for a program, project, or activity proposed in the President's budget request beyond what Congress had provided except through reprogramming or transfer actions pursuant to an appropriations act. Because the President had requested $5.7 billion for FY2019 "for construction of a steel barrier for the Southwest border" but Congress had appropriated $1.375 billion to be made on "construction . . . in the Rio Grande Valley Sector" alone, the court found that the use of Section 284 funds for the border project amounted to an unlawful increase in funding for that activity using appropriated funds. The court noted that Section 284 is not an appropriations statute and its use was thus not eligible for the exception in Section 739 of the CAA 2019 for reprogramming provisions. Nevertheless, because of the Supreme Court's stay of the injunction issued in the Sierra Club case, the court in El Paso declined to enjoin the use of Section 284. Department of Homeland Security Waiver Authority The plaintiffs in Sierra Club and California also argued that the Administration's proposed construction of a border barrier was subject to the environmental assessment requirements of NEPA, and that DHS's waiver authority under IIRIRA Â§Â 102 is ineffective to waive NEPA's application for projects funded and undertaken by any other department or agency. The plaintiffs noted that IIRIRA Â§Â 102's waiver authority may be used only for the "construction of the barriers and roads under this section ." Because the Administration was relying on DOD authority and appropriations (i.e., Section 284 and the Drug Interdiction Account) to construct the border barriers, the plaintiffs contended that those projects did not meet the statutory requirement and thus were not covered by an IIRIRA Â§Â 102 waiver. By contrast, the Administration argued that by requiring DHS to take "such actions as may be necessary" to construct additional border barriers, IIRIRA Â§Â 102 authorized DHS to request DOD's assistance, and thus the waiver authority applied. Ruling for the Administration, the district court in Sierra Club and California held that IIRIRA Â§Â 102's waiver authority extends to border projects undertaken by another agency on behalf of DHS, and thus DHS's waivers rendered NEPA inapplicable to the challenged border barrier projects. "DOD's authority under Section 284 is derivative," the court explained, as it may invoke "its authority [under Section 284] only in response to a request from [another] agency." "Plaintiffs' argument would require the court to conclude that even though it is undisputed that DHS could waive NEPA's requirements if it were paying for the projects out of its own budget, that waiver is inoperative when DOD provides support in response to a request from DHS." The court rejected this approach because it found it "unlikely that Congress intended to impose different NEPA requirements on DOD when it acts in support of DHS's IIRIRA Â§Â 102 authority in response to a direct request under Section 284 than would apply to DHS itself." The court thus ruled that DHS's waivers applied to the challenged border projectsâand all parties agreed that "the waivers, if applicable, would be dispositive of the NEPA claims." Treasury Forfeiture Fund The state plaintiffs in California v. Trump also argued that the Administration's allocation of $601 million from the TFF was not authorized by 31 U.S.C. Â§Â 9705, specifically because the construction of border barriers is not an expenditure for "law enforcement activities." In response, the Administration argued that the allocation of payments from the TFF is not reviewable, citing Supreme Court and Ninth Circuit decisions establishing that an agency's determination of how to allocate funds from a lump-sum appropriation is committed to the agency's discretion. The district court determined that, while the statute provided some discretion for the Secretary of the Treasury to decide what payments should be made from the TFF, the statute provided a "comprehensive list of payments for which TFF" payments must be made. There were therefore sufficient standards for determining whether the Administration had transferred funds in a "statutorily impermissible manner." Despite finding that the use of the TFF was reviewable, the district court declined to address the merits of the state plaintiffs' arguments because the plaintiffs did not meet the other requirements for a preliminary injunction. Specifically, a preliminary injunction requires the court to find that the moving party will suffer irreparable injury if the injunction is not issued. But the TFF statute requires equitable sharing payments for the current and next fiscal years to be reserved before any unobligated balances were available for Strategic Support expenditures. Because the Secretary of the Treasury had reserved such amounts before the requested transfer to DHS, there was no justification for the "extraordinary" remedy of a preliminary injunction against the TFF transfer. Subsequently, on August 2, the parties in California stipulated to the voluntary dismissal of the plaintiffs' TFF claim. According to the parties, this dismissal was based on representations by the Administration that (1) its proposed use of $601 million from the TFF would not cause state and local law enforcement agencies to lose any funds they would otherwise receive from the TFF, and (2) "funds from the TFF will not be used to fund or support the construction of border barriers in any areas other than within the Rio Grande Valley and/or Laredo Sectors"âthat is, areas within Texas. The plaintiffs in Sierra Club have not dismissed their TFF claim. Reprogramming of Funds During National Emergency Two types of challenges have arisen to the reprogramming of military construction funds for use in border barrier construction. The first challenges the declaration of the national emergency itself, while the second challenges the invocation of authority pursuant to Section 2808. The El Paso County Challenge to the President's Declaration of a National Emergency Though the plaintiffs in Sierra Club and California did not challenge the lawfulness of President Trump's declaration of a national emergency under the NEA, the plaintiffs in El Paso County v. Trump did. They have charged that the President's declaration of a national emergency to make use of military construction funds for border barrier construction is unlawful because the situation at the border does not constitute an emergency within the meaning of the NEA. They argue that "emergency" in the NEA must be construed in accordance with its ordinary meaningâ"an unforeseen combination of circumstances requiring immediate action"âor the NEA is an unconstitutional violation of the nondelegation doctrine. Under the nondelegation doctrine, they argue, Congress cannot delegate legislative authority to the executive branch without providing an intelligible principle to guide implementation of a law. Plaintiffs assert that an interpretation of the NEA that leaves unfettered discretion to the President to decide what constitutes a national emergency would be an unconstitutional delegation of congressional authority. The government responded with its own interpretation of the NEA, one that views Congress's failure to provide a definition for "national emergency" as an indication that Congress intended to avoid constricting presidential power. The government also cites historical examples to demonstrate that national emergency declarations need not address circumstances that are unforeseen. Moreover, it argues that courts have uniformly concluded that presidential declarations of national emergencies present a nonjusticiable political question. The Supreme Court set forth the factors courts must consider in determining whether a matter raises nonjusticiable political questions in Baker v. Carr . These factors are a textually demonstrable constitutional commitment of the issue to a coordinate political department; a lack of judicially discoverable and manageable standards for resolving it; the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; the impossibility of a court's undertaking independent resolution without expressing lack of the respect due coordinate branches of government; an unusual need for unquestioning adherence to a political decision already made; or the potentiality of embarrassment from multifarious pronouncements by various departments on one question. The Administration argues that the President's national emergency declaration fulfills "most, if not all of these factors." First, the executive branch claims that Congress intentionally chose to leave the determination of a national emergency to the President with oversight by Congress, without setting forth criteria from which a court could judge the President's action. Second, the Administration contends that how to combat illegal immigration is quintessentially "the sort of policy determination of a kind clearly for nonjudicial discretion." Third, it argues that the policy questions regarding the exclusion of aliens are entrusted to the political branches. The district court did not address the constitutionality of the NEA or the proclamation, but entered summary judgment in favor of the plaintiffs on the basis that the Administration's funding plan for the border, in the court's view, violates the CAA 2019, in particular Section 739. The Challenge to the Use of Section 2808 Considered in Sierra Club The Sierra Club plaintiffs did not challenge the lawfulness of President Trump's declaration of a national emergency under the NEA, but they did argue that the Administration's plan to reallocate $3.6 billion in military construction funds was unlawful because 10 U.S.C. Â§Â 2808 does not authorize the construction of border barriers. Though the district court declined to grant a preliminary injunction because the plaintiffs had not demonstrated irreparable harm from the Administration's as-yet undetermined plans to divert the funds, the court did express doubt that the definition of "military construction" in Section 2808 encompassed border barriers. As noted previously, Section 2808 permits reprogramming of funds for "military construction" necessary to support the use of the Armed Forces in a national emergency. Military construction is defined to "include any construction, development, conversion, or extension of any kind carried out with respect to a military installation," which means a "base, camp, post, station, yard, center, or other activity " under the jurisdiction of the Secretary of a military department. The Administration relied on the term "other activity" and the nonexhaustive word "includes" in the definitions related to "military construction" to argue that Congress had meant the term "military construction" in Section 2808 to be construed broadly. In other words, the government interpreted the definition of military construction to include any sort of construction related to a military installation. This would include any "other activity under the jurisdiction of the Secretary of a military department," which could conceivably include border barriers constructed by DOD. The court in Sierra Club rejected that view, explaining that "the critical language of Section 2801(a) is not the word 'includes,' it is the condition 'with respect to a military installation.'" Further, the court rebuffed the Administration's reliance on the term "other activity." That language, the court explained, is not unbounded but should be interpreted in context of the words that immediately precede itâ"a base, camp, post, station, yard, [and] center." Applying the rule of statutory interpretation that "a word is known by the company it keeps," the court concluded that "other activity" refers to similar discrete and traditional military locations. The court did "not readily see how the U.S.-Mexico border could fit this bill." The court likewise employed the rule of interpretation that "[w]here general words follow specific words in a statutory enumeration, the general words are construed to embrace only objects similar in nature to those objects enumerated by the preceding specific words." The court explained that if Congress "hadÂ . . . intended for 'other activity' .Â .Â . to be so broad as to transform literally any activity conducted by a Secretary of a military department into a 'military installation,' there would have been no reason to include a list of specific, discrete military locations." Thus, viewing the term "in context and with an eye toward the overall statutory scheme," the court could not conclude that "Congress ever contemplated that 'other activity' has such an unbounded reading that it would authorize Defendants to invoke Section 2808 to build a barrier on the southern border." However, because the issue was not yet ripe for decision, the district court did not enjoin the use of military construction funds for border barrier construction. And because the district court did not rule on this issue the Ninth Circuit did not address it either. On December 11, 2019, however, the district court determined that the government's formulation of plans to allocate the military construction funds for 11 border barrier projects made the issue ripe for decision in both the California and Sierra Club cases. Although the court declined to take on the question of whether an emergency requiring the use of troops in fact exists, it found the question of whether the specific projects are "military construction projects" that are "necessary to support such use of the armed forces" to be suitable for adjudication. With respect to the first issue, the court reaffirmed its earlier assessment based on the statutory definitions that such projects have insufficient connection with any military installation to be permissible military construction projects, notwithstanding the government's argument that its taking of administrative jurisdiction over the land for them and assigning it to Fort Bliss in Texas created such a connection. The court was not persuaded that Congress intended "military construction" to have no stronger connection to a military installation than Defendants' own administrative convenience. If this were true, Defendants could redirect billions of dollars from projects to which Congress appropriated funds to projects of Defendants' own choosing, all without congressional approval (and in fact directly contrary to Congress' decision not to fund these projects). Elevating form over substance in this way risks "the Executive [] aggrandizing its power at the expense of [Congress]." Addressing the government's contention that "installation" was meant to be read broadly in the emergency context, the court pointed out that the aim of the NEA was to narrow executive emergency power, and that "Section 2808 has rarely been used, and never to fund projects for which Congress withheld appropriations." The court therefore found that the border barrier construction projects, with the exception of two projects on the Barry M. Goldwater range, are not "'carried out with respect to a military installation' within the meaning of Section 2808." The court next addressed whether the 11 barrier projects are "necessary to support the use of the armed forces," and found the government's arguments unconvincing. In the government's view, these projects will support the armed forces because they "allow DoD to provide support to DHS more efficiently and effectively," and could "ultimately reduce the demand for DoD support at the southern border over time." The court rejoined: Defendants do not explain how the projects are necessary to support the use of the armed forces while simultaneously obviating the need for those forces. This appears to defy the purpose of Section 2808, which specifically refers to construction that is necessary to support the use of the armed forces, not to construction that the armed forces will not use once constructed. Again, Defendants' argument proves too much. Under their theory, any construction could be converted into military constructionâand funded through Section 2808âsimply by sending armed forces temporarily to provide logistical support to a civilian agency during construction. The court concluded that there was "simply nothing in the record . . . indicating that the eleven border barrier projectsâhowever helpfulâare necessary to support the use of the armed forces." The court entered a permanent injunction against the 11 proposed border construction projects, but stayed the injunction pending appeal. The government has appealed. The district court in El Paso County rejected the use of Section 2808 for border barrier construction not because of the definitions at issue, but because the court concluded the provision is not an appropriations measure and therefore cannot be used to circumvent Section 739 of the CAA 2019, for the same reasons that the judge rejected the use of Section 284. Procedural Barriers to Lawsuits Challenging Border Barrier Funding Aside from the merits of the Trump Administration's funding initiatives, the various legal challenges brought by states, private individuals, and the House of Representatives also involve two threshold requirements that must be satisfied by any party seeking to maintain a lawsuit in federal court. A plaintiff must first show that he has suffered a "concrete" and "particularized" injury that was caused by the challenged government actionâthe so-called "standing" requirement. A plaintiff must also have a legal right (i.e., a "cause of action") to enforce whatever provision of federal law is at issue, and he must also fall within the "zone of interests" meant to be protected by that law. These procedural requirements have presented obstacles to those opposing the Trump Administration's funding initiatives. In U.S. House of Representatives v. Mnuchin , the U.S. District Court for the District of Columbia held that the House of Representatives lacked standing to challenge the Trump Administration's actions. And though the district court in Sierra Club and California (and the Ninth Circuit in Sierra Club ) concluded that the plaintiffs in those casesânonprofit organizations and state plaintiffsâsatisfied these procedural requirements, the Supreme Court ultimately stayed the district court's injunction because "the Government ha[d] made a sufficient showing at this stage that the plaintiffs have no cause of action to obtain review of the Acting [Secretary of Defense's] compliance with Section 8005." In staying the permanent injunction in the Sierra Club litigation, the Supreme Court cleared the way for the Trump Administration to use funds transferred under Section 8005 to construct border barriers while the Ninth Circuit considers the Administration's appeal of the permanent injunction. However, the Court's order did not address the merits of Section 8005 or any of the other statutory authorities at issue in that litigation. Standing Article III of the U.S. Constitution "limits federal courts' jurisdiction to certain 'Cases' and 'Controversies.'" This limitation has been interpreted to require that every person or entity bringing a claim in federal court must establish "standing" to sueâthat is, establish that he has suffered an injury that (1) is "concrete, particularized, and actual or imminent"; (2) "fairly traceable to the challenged action"; and (3) would be "redressable by a favorable ruling." The Supreme Court has explained that this standing requirement "is built on separation-of-powers principles" and "serves to prevent the judicial process from being used to usurp the powers of the political branches." Separation-of-powers concerns are heightened where a court is being asked to deem the actions of one of the other two branches of government unconstitutional, and especially so when a suit involves a dispute between the other two branches of the federal government. The plaintiffs challenging the Trump Administration's funding initiatives argued that they satisfied Article III's standing requirement. In Sierra Club and California , the Trump Administration conceded that constructing border barriers would cause a sufficient injury for Article III purposes, but it argued that this injury did not confer standing to challenge the Administration's use of Section 8005 to transfer funds. Rejecting that argument, the district court in Sierra Club and California held that the plaintiffs had established an "actual or imminent" injury that was "fairly traceable" to the Trump Administration's proposed transfer of money. The court explained that the supposedly distinct actions of (1) transferring funds and (2) using those transferred funds to construct border barriers were both part of a single objectiveâthe construction of border barriers. And because a sufficiently concrete injury followed from the attainment of that objective, the plaintiffs had standing to challenge government action that was part of the chain of events leading to the injury. Similarly, in El Paso County , the court held that the plaintiffs' reputational and economic injuries resulting directly from the border barrier construction were sufficient for Article III purposes. By contrast, the federal district court presiding over the U.S. House of Representatives' lawsuit held that the House of Representatives lacks standing because the House's asserted injuryâ"an institutional injury to [Congress's] Appropriations power" âwas not the kind of injury that supports Article III standing. The district court relied on the Supreme Court's decision in Raines v. Byrd , which held that Members of Congress lacked standing to challenge the constitutionality of the Line Item Veto Act. While Article III requires a "particularized" injuryâthat is, an injury that "affect[s] the plaintiff in a personal .Â .Â . way" âthe Court in Raines determined that the Members of Congress had asserted "a type of institutional injury (the diminution of legislative power)" that did not belong to the Members individually. As a result, those Members were unable to show "a sufficient[ly] 'personal stake' in th[e] dispute." Similarly, the district court in Mnuchin noted that the appropriations power is held by Congress as a whole , not by each chamber of Congress separately. Moreover, as had the Court in Raines , the Mnuchin court supported its conclusion by noting the absence of historical examples of federal courts being asked to adjudicate lawsuits "brought on the basis of claimed injury of official authority or power." The U.S. House of Representatives appealed the district court's decision to the D.C. Circuit, but the court of appeals has not yet issued a decision. Cause of Action and Zone of Interests Even if a plaintiff establishes standing, the party must also be able to identify a source of law that authorizes the party to sueâalso known as a "cause of action." In some instances, Congress has included a cause of action within a federal law to enable those injured by a violation of that law to obtain judicial relief. Separately, the Administrative Procedure Act contains a more general cause of action, authorizing "person[s] suffering legal wrong because of agency action" to challenge that action in federal court. Finally, even absent a statutory cause of action, a plaintiff may still be authorized to sue based on "[t]he power of federal courts of equity to enjoin unlawful executive action." Moreover, in order to show that a particular cause of action applies to him, a plaintiff must (generally) show that "[t]he interest he asserts [is] 'arguably within the zone of interests to be protected or regulated by the statute' that he says was violated." This "zone of interests" requirement "applies to all statutorily created causes of action," and its purpose is to "foreclose[] suit .Â .Â . when a plaintiff's 'interests are so marginally related to or inconsistent with the purposes implicit within the statute that it cannot reasonably be assumed that Congress intended to permit the suit.'" Before concluding that the Trump Administration cannot use Section 8005 to transfer funds for border barrier construction, the district court in Sierra Club and California (and the Ninth Circuit on appeal in Sierra Club ) concluded that the plaintiffs in these cases had satisfied these threshold procedural requirements. The court ruled that the plaintiffs' ability to bring their suits was based on the federal courts' equitable power to enjoin unlawful executive action. In so doing, the district court also determined that the "zone of interests" requirement does not apply to claims resting on an equitable (as opposed to a statutory) cause of action. Reviewing the district court's ruling in Sierra Club , the Ninth Circuit agreed that the plaintiffs had an equitable cause of action to challenge the lawfulness of executive action, and determined that they also had a cause of action under the Administrative Procedure Act. The Ninth Circuit expressed "doubt[s]" that the zone-of-interests test applied to equity-based claims, but determined that the plaintiffs satisfied any zone-of-interest requirement that might apply to either of these causes of action. The Supreme Court's Order Though the district court and the Ninth Circuit concluded that the plaintiffs in Sierra Club and California were proper parties to challenge the Trump Administration's intended use of Section 8005, the Supreme Court issued an order staying the district court's injunction. After the Ninth Circuit declined to stay the district court's permanent injunction, the Trump Administration asked the Supreme Court to do so, and on July 26, 2019, the Supreme Court issued an order staying the permanent injunction. Chief Justice Roberts and Justices Thomas, Alito, Gorsuch, and Kavanaugh voted to grant the stay in full, while Justice Breyer indicated that he would have granted the stay in part. The Court's order stated that "[a]mong the reasons" for staying the injunction, "the Government ha[d] made a sufficient showing at this stage that the plaintiffs have no cause of action to obtain review of the Acting [Secretary of Defense's] compliance with Section 8005." The Court's order further stated that the stay would continue "pending disposition of the [Administration's] appeal in the [Ninth Circuit] and disposition of the Government's petition for a writ of certiorari," and will "terminate automatically" upon the Court's denial of a petition for certiorari submitted by the Administration. Justices Ginsburg, Sotomayor, and Kagan voted to deny the request for a stay. Justice Breyer explained that he would have "grant[ed] the Government's application to stay the injunction only to the extent that the injunction prevents the Government from finalizing the contracts [for border barrier construction] or taking other preparatory administrative action," but would have left the injunction "in place insofar as it precludes the Government from disbursing funds or beginning construction." Justice Breyer explained that granting a stay of the injunction in full would irreparably harm the plaintiffs, while denying a stay of the injunction would irreparably harm the government because all funds not obligated by the end of the fiscal year would become unavailable. According to Justice Breyer, staying the injunction to allow the Trump Administration to "finaliz[e] contracts or tak[e] other preparatory administration action" for constructing border barriers would "avoid harm to both the Government and [the plaintiffs] while allowing the litigation to proceed." By staying the district court's permanent injunction, the Supreme Court enabled the Trump Administration to use funds transferred under Section 8005 to construct border barriers, at least during the pendency of the litigation in the Sierra Club and California cases. However, the Court's order did not address the merits of Section 8005 or any of the other statutory authorities at issue in that litigation. Moreover, the Court's order makes clear that it applies only at "this stage" of the litigation and therefore is not binding on the Ninth Circuit as it considers the Administration's appeal of the permanent injunction. As a result, the Court's order does not prevent the Ninth Circuit in Sierra Club âwhich is currently considering the Trump Administration's appeal from the permanent injunctionâfrom concluding that the Sierra Club plaintiffs have a cause of action to enforce Section 8005. Nor does it prevent the district court in Sierra Club and California from ruling on the other funding authorities (including Section 284) and, perhaps, enjoining the Trump Administration from using those authorities to construct border barriers. Considerations for Congress Subsequent Legislation The Supreme Court has said that the Appropriation Clause's "fundamental and comprehensive purpose .Â .Â . is to assure that public funds will be spent according to the letter of the difficult judgments reached by Congress as to the common good and not according to the individual favor of Government agents or the individual pleas of litigants." Consequently, Congress has the power, subject to presidential veto, to enact legislation either appropriating more funds for border barrier construction, to limit the extent that the Administration's proposed funding sources may be used for border barrier construction, or to prohibit the Administration from obtaining additional funding through existing mechanisms. As part of the FY2020 appropriations process, the 116th Congress had considered provisions limiting the expenditure of annually appropriated funds for border barrier construction, though none have yet been enacted. For example, Section 8127 of Division C of H.R. 2740 , the DOD Appropriations Act for FY2020, as passed by the House on June 19, 2019, would generally have provided that "None of the funds appropriated or otherwise made available by this Act or any prior Department of Defense appropriations Acts may be used to construct a wall, fence, border barriers, or border security infrastructure along the southern land border of the United States." If this provision had been enacted it would likely have rendered the litigation over the Northern District of California's injunction moot, as the use of FY2019 funds for the purposes sought by the Administration would be expressly prohibited. Separately, the House-passed H.R. 2740 would also have limited the general transfer authority under either Sections 8005 or 9002 from being used to transfer funds into or out of the DOD Drug Interdiction Account, and the bill would reduce the overall amount of general transfer authority available under Section 8005 from $4 billion to $1 billion. The initial House-passed National Defense Authorization Act for FY2020 included similar limitations. None of these limitations were included as part of the enacted Consolidated Appropriations Act, 2020, or the enacted FY2020 National Defense Authorization Act. In February 2019, the Administration requested $5 billion in border barrier funding for FY2020 to support the construction of approximately 206 miles of border barrier system. The House Appropriations Committee responded to this by recommending no funding for border barriers in H.R. 3931 âits FY2020 DHS Appropriations bill. In addition, the House Appropriations Committee-reported bill would have restricted the ability to transfer or reprogram funds for border barrier construction. That bill stated in Section 227 that, aside from appropriations provided for such purpose in the last three fiscal years, "no Federal funds may be used for the construction of physical barriers along the southern land border of the United States during fiscal year 2020." Furthermore, Section 536 of that bill proposed to rescind $601 million from funding appropriated for border barriers in FY2019 âthus reducing the FY2019 funding available by the amount pledged from the Treasury Forfeiture Fund. On September 26, 2019, the Senate Appropriations Committee reported its annual appropriations act for DHS for FY2020, which would have provided $5 billion for additional new miles of pedestrian fencing. As part of the Consolidated Appropriations Act, 2020, Congress provided $1.375 billion for "construction of barrier system along the southwest border." Comptroller General Opinion Committees and Members of Congress have also requested legal opinions from the Comptroller General of the United States, head of the Government Accountability Office (GAO), regarding questions of appropriations law and executive agencies' compliance with such laws. Though GAO's decisions are not binding on federal courts, those decisions are sometimes given consideration by reviewing courts because of GAO's expertise in appropriations law and its role as the "auditing agent of Congress." On September 5, 2019, in response to such a request from Senate Appropriations Committee Vice Chairman Leahy, Subcommittee on Defense Vice Chairman Durbin, and Subcommittee on Military Construction, Veterans Affairs, and Related Agencies Ranking Member Schatz, the Comptroller General issued a legal opinion concluding that the Administration's use of Section 8005 of the 2019 DOD Appropriations Act and 10 U.S.C. Â§Â 284 to fund border barrier construction is lawful. Like the Northern District of California and the Ninth Circuit decisions, GAO's analysis of the transfer authority focused primarily on (1) whether the use of the funds for border barrier construction was an unforeseen military requirement, and (2) whether Congress had denied funds for the item to which funds were being transferred. GAO agreed with the Administration's argument that the relevant "military requirement" for purposes of Section 8005 was the construction of border barriers by DOD pursuant to its Section 284 authority, not the construction of border barriers generally. According to GAO, this military requirement was "unforeseen" because it was not until DHS requested assistance from DOD to construct border barriersâwell after the President's budget requestsâthat the need for DOD assistance became known. Consequently, GAO concluded that DHS's request for assistance constituted an unforeseen military requirement that made available the transfer authority under Section 8005. GAO next addressed whether the construction of border fencing had been "denied by the Congress." GAO began by noting that this language was not defined by Section 8005 or elsewhere in the FY2019 DOD Appropriations Act. Relying on the "ordinary meaning" of the term "deny" as well as previous decisions by the Comptroller General, GAO concluded that a denial of funds for purposes of Section 8005 required that Congress "actively refuse" funds for an item, rather than merely fail to appropriate the full amount requested for that item. Applying this standard, GAO asserted that it could not identify any statutory provision that prohibited DOD from using funds to build border barriers pursuant to its Section 284 authority. Accordingly, GAO agreed with the Administration that Congress had not denied funds for that purpose, within the meaning of Section 8005.	Summary:	gov_report	1,024	null	64
crs_R46066	crs_R46066_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Overview of 2019 Leaders' Meeting1 Heads of state and government from NATO's 30 member states met in London, United Kingdom (UK), on December 3-4, 2019. NATO and U.S. officials highlighted the following key deliverables from the London Leaders' Meeting: Completion of a new Readiness Initiative, under which the alliance would have at its disposal 30 mechanized battalions, 30 air squadrons, and 30 naval combat vessels ready to use within 30 days. Declaration of space as a new operational domain for NATO and advances in combatting cyber and hybrid threats, including establishing new baseline requirements for telecommunications infrastructure. Increased defense spending by European allies and Canada. Renewed commitment to NATO's mission in Afghanistan and counterterrorism efforts in the Middle East and North Africa. Agreement to assess China's impact on NATO and transatlantic security. Initiation of a new "forward-looking reflection process â¦ to further strengthen NATO's political dimension including consultation." More broadly, NATO officials sought to highlight NATO's achievements and the importance of strong U.S.-European relations to these efforts. The United States was the driving proponent of NATO's creation in 1949 and has been the unquestioned leader of the alliance as it has evolved from a collective defense organization of 12 members focused on deterring the Soviet Union to a globally engaged security organization of 30 members. Successive U.S. Administrations have viewed U.S. leadership of NATO as a cornerstone of U.S. national security strategy that brings benefits ranging from peace and stability in Europe to the political and military support of 28 allies, including many of the world's most advanced militaries. The London meeting came at a tense time for NATO, however. Some European allies question the Trump Administration's commitment to NATO and have criticized the Administration for a perceived unilateral approach to foreign policy issues, including the October 2019 drawdown of U.S. forces from Syria. Many allies also have criticized fellow NATO member Turkey for its military operations in Syria and its acquisition of a Russian-made air defense system. NATO Secretary General Jens Stoltenberg acknowledges ongoing tensions within the alliance but stresses that continued transatlantic cooperation has enabled NATO to be more active today than it has been in decades. Trump Administration officials maintain that the United States remains committed to NATO, and in London, President Trump stressed that NATO "has a great purpose." U.S. officials also highlight the Administration's successful efforts in 2017 and 2018 to substantially increase funding for the U.S. force presence in Europe and note that Secretary General Stoltenberg has credited President Trump with playing a role in securing defense spending increases across the alliance in recent years. Critics of the Trump Administration's NATO policy maintain that renewed Russian aggression has been a key factor behind such increases. Key Issues At the London meeting, NATO leaders stressed their commitment to advancing existing readiness and deterrence initiatives and to confronting emerging security challenges, including by declaring space as an operational domain for NATO. The allies also reinforced their commitment to NATO's ongoing mission in Afghanistan and other counterterrorism efforts and discussed the implications for NATO of China's growing investment in, and engagement with, Europe. Deterrence Through Increased Readiness In the five years since Russia occupied Crimea and invaded Eastern Ukraine, the United States has supported efforts to renew NATO's focus on territorial defense and deterring Russian aggression. Among other measures, NATO member states have deployed an Enhanced Forward Presence (EFP) totaling about 4,500 troops to the three Baltic States (Estonia, Latvia, and Lithuania) and Poland; increased military exercises and training activities in Central and Eastern Europe; and established new NATO command structures in six Central and Eastern European countries. In London, the allies announced progress on several new initiatives intended to enhance NATO's readiness to respond swiftly to an attack on a NATO member, including by reinforcing the aforementioned EFP battlegroups. A cornerstone of these efforts is full implementation by the end of 2019 of the so-called Four-Thirties Readiness Initiative, proposed by the United States in 2018, under which NATO would have 30 mechanized battalions, 30 air squadrons, and 30 naval combat vessels ready to use within 30 days. Although the allies have continued to support and contribute to NATO deterrence initiatives, some analysts question the effectiveness and sustainability of these efforts. For example, the authors of a February 2016 report by the RAND Corporation contend that "as presently postured, NATO cannot successfully defend the territory of its most exposed members." Some allies, including Poland and the Baltic States, have urged other NATO members to deploy more forces to the region to reinforce that alliance's deterrence posture. Other allies, including leaders in Western European countries such as Germany, Italy, and France, have stressed the importance of a dual-track approach to Russia that complements deterrence with dialogue. These allies contend that efforts to rebuild cooperative relations with Moscow should receive as much attention as efforts to deter Russia. Accordingly, these allies are reluctant to endorse permanently deploying troops in countries that joined NATO after the collapse of the Soviet Union due to concerns that this would violate the terms of the 1997 NATO-Russia Founding Act; in consideration of these terms, NATO's EFP has been referred to as "continuous" but rotational rather than "permanent." Addressing New Security Challenges: Cyber, Hybrid, and Space In London, the allies highlighted progress in responding to cyber and hybrid threats and formally declared space as a new operational domain for the alliance. Since naming cyber defense a core NATO competence in 2014, the alliance has adopted measures to protect NATO networks from cyberattacks and to assist member states in bolstering national cyber defense capabilities. NATO has made available Cyber Rapid Reaction Teams to help allies respond to cyberattacks, and in 2018 it announced plans to establish a new NATO Cyberspace Operations Center in Brussels. The new cyber center will focus on integrating allies' national cyber capabilities into NATO missions and operations. Although NATO member states maintain full ownership of these capabilitiesâas they do with other military capabilities deployed to NATO missionsâthe new operations center is tasked with incorporating cyber defense into all levels of NATO planning and operations. NATO also has sought to bolster capabilities to counter heightened hybrid warfare threats, including propaganda, deception, sabotage, and other nonmilitary tactics. NATO's focus has been on enhancing strategic communications, developing appropriate exercise scenarios, and strengthening coordination with the European Union (EU) to respond to hybrid threats. At their meeting in 2018, NATO leaders agreed to establish counter-hybrid support teams to provide tailored assistance to allies in preparing against and responding to hybrid activities. NATO deployed the first of these teams to Montenegro in November 2019. As discussed in more detail below (see " Assessing China's Impact on NATO and Transatlantic Security "), in London, NATO leaders endorsed new baseline requirements for allies with respect to the resilience of telecommunications infrastructure, including 5G systems. In London, NATO leaders formally declared space as an operational domain for NATO, alongside air, land, sea, and cyber. Secretary General Stoltenberg stated that the declaration reflects a consensus desire within NATO to strengthen defense and deterrence in all areas, including space, where NATO allies reportedly own about half of the approximately 2,000 satellites estimated to be in orbit currently. Stoltenberg has stressed that NATO has no intention of deploying weapons in space and that NATO's approach will remain defensive and in line with international law. Others have questioned whether China, which has a growing presence in space, might view the NATO declaration as a provocation. Defense Spending and Burden-Sharing A primary focus of the Trump Administration's policy toward NATO has been to urge allies to increase their national defense budgets in line with past agreements intended to ensure an equitable distribution of defense responsibilities within the alliance. In London, President Trump continued these calls but also welcomed substantial increases in European allies' defense spending over the past five years. Secretary General Stoltenberg has credited President Trump with playing a key role in spurring increases in European allied defense spending over the past five years. However, critics of the U.S. President express concern that his strident criticism of what he considers insufficient defense spending by some allies could damage NATO cohesion and credibility. In 2006, NATO members informally agreed to aim to allocate at least 2% of gross domestic product (GDP) to their national defense budgets annually and to devote at least 20% of national defense expenditure to procurement and related research and development. These targets were formalized at NATO's 2014 Wales Summit, when the allies pledged to halt declines in defense expenditures and "move towards the 2% guideline within a decade." U.S. and NATO officials say they are encouraged that defense spending by European allies and Canada has grown for five consecutive years (see Figure 1 ). According to Secretary General Stoltenberg, European allies and Canada have added $130 billion in defense spending since 2014; the figure is expected to rise to $400 billion by the end of 2024. In 2014, three allies met the 2% guideline; in 2019, 9 allies are expected to have met the 2% guideline, and 16 allies are expected to have met the 20% benchmark for spending on major equipment. President Trump and others continue to criticize those NATO members perceived to be reluctant to achieve defense-spending targets, however. One such member is Europe's largest economy, Germany, which currently spends about 1.38% of GDP on defense and has plans to reach 1.5% of GDP by 2024. Although all allied governments agreed to the Wales commitments, many, including Germany, emphasize that allied contributions to ongoing NATO missions and the effectiveness of allied military capabilities should be considered as important as total defense spending levels. For example, an ally spending less than 2% of GDP on defense could have more modern, effective military capabilities than an ally that meets the 2% target but allocates most of that funding to personnel costs and relatively little to ongoing missions and modernization. Analysts on both sides of the Atlantic also have argued that a relatively narrow focus on defense inputs (i.e., the size of defense budgets) should be accompanied by an equal, if not greater, focus on defense outputs (i.e., military capabilities and the effectiveness of contributions to NATO missions and activities). The alliance's target to devote at least 20% of each member's national defense expenditure to new equipment and related research and development reflects this goal. Secretary General Stoltenberg has emphasized a broad approach to measuring contributions to the alliance, using a metric of "cash, capabilities, and contributions." Proponents of this approach argue that a broad assessment of allied contributions that takes into account factors beyond the 2% of GDP defense spending metric would be more appropriate given NATO's wide-ranging strategic objectives, some of which may require capabilities beyond the military sphere. In London, allied leaders approved a U.S. proposal to reduce assessed U.S. contributions, and increase German contributions, to NATO's relatively small pot of common funds . National contributions to NATO's common fundsâabout $2.6 billion total in 2019âpay for the day-to-day operations of NATO headquarters, as well as some collective NATO military assets and infrastructure. According to NATO, in 2018, the U.S. share of NATO's common-funded budgets was about 22% , or about $570 million, followed by Germany (15%), France (11%), and the UK (10%). The U.S. proposal approved in London would bring both the U.S. and German contributions to about 16% each. Afghanistan and Counterterrorism In London, the allies renewed their commitment to NATO's ongoing training mission in Afghanistan, despite speculation about a possible drawdown of U.S. forces in the country. In January 2015, following the end of its 11-year-long combat mission in Afghanistan, NATO launched the Resolute Support Mission (RSM) to train, advise, and assist Afghan security forces. Between 2015 and late 2018, NATO allies and partners steadily matched U.S. increases in troop levels to RSM. As of February 2020, about 8,500 of the 16,551 troops contributing to RSM were from NATO members and partner countries other than the United States. After the United States (8,000 troops), the top contributors to the mission were Germany (1,300), the UK (1,100), Italy (895), non-NATO-member Georgia (871), and Romania (797). NATO leaders welcomed the February 29, 2020, Joint Declaration between the United States and Afghanistan and agreement between the United States and the Taliban in pursuit of a peaceful settlement to the conflict in Afghanistan. Secretary General Stoltenberg said that NATO would implement adjustments, including troop reductions, to its mission as outlined in the agreements; he stressed, however, that such actions would be "conditions-based." NATO continues to "reaffirm its longstanding commitment to Afghanistan and ongoing support for the Afghan National Defense and Security Forces." In the past, European allies have expressed concern that they were not consulted on possible drawdown plans and stressed that any such plans be carried out in close coordination with the allies. President Trump consistently has called on NATO to expand its counterterrorism efforts beyond Afghanistan, and terrorist threats emanating from the Middle East and North Africa (MENA) region are key European concerns as well. Over the past several years, NATO leaders have launched several new initiatives aimed at countering terrorism and addressing instability in the MENA region. These initiatives include the noncombat NATO Training Mission in Iraq, carried out by between 300 and 500 allied military trainers; the Package on the South, an initiative that includes a range of partnership activities to enhance cooperation initiatives with MENA countries such as Tunisia and Jordan; and establishment of a NATO Regional Hub for the South in Naples, Italy, to coordinate NATO responses to crises emanating from the South. NATO also has deployed aerial surveillance aircraft (AWACS) to assist the global coalition fighting the Islamic State terrorist organization. Several factors have limited enhanced NATO engagement on security challenges emanating from the MENA region. These factors include a belief among some allies that the EU is the appropriate institution to lead Europe's response to terrorism and migration issues and a related reluctance to cede leadership on these issues to NATO. France, for example, has advocated strong European responses to terrorism and conflict in the Middle East but has generally opposed a larger role for NATO. Some allies also disagree on what the appropriate response should be to some of the security challenges in the MENA region, with some appearing hesitant to involve NATO in a way that could be seen as endorsing military action. Assessing China's Impact on NATO and Transatlantic Security The Trump Administration and some Members of Congress have urged NATO to assess the security implications of growing Chinese investment in Europe and to work to counter potential negative impacts on transatlantic security. As expressed in the December 2017 U.S. National Security Strategy , U.S. officials have grown increasingly concerned that "China is gaining a strategic foothold in Europe by expanding its unfair trade practices and investing in key industries, sensitive technologies, and infrastructure." U.S. officials express particular concern about Chinese investment in critical infrastructure and telecommunications systems, such as 5G networks. Some U.S. defense officials have suggested that the United States might limit military cooperation and intelligence sharing with allies that allow Chinese investment in 5G networks. In London, NATO formally adopted an October 2019 plan by NATO defense ministers to update the alliance's baseline requirements for civilian telecommunications to reflect emerging concerns about 5G technology. The allies agreed to assess the risks to communications systems associated with cyber threats, and the consequences of foreign ownership, control, or direct investment. Although the EU is attempting to develop common guidelines to govern contracting decisions on 5G networks, these decisions would remain the prerogative of individual national governments. As noted above, U.S. officials have warned European allies and partners that using Huawei or other Chinese 5G equipment could impede intelligence sharing with the United States due to fears of compromised network security. Although some allies, such as the UK and Germany, have said they would not prevent Chinese companies from bidding on 5G contracts, these allies have stressed that they would not contract with any companies that do not meet their national security requirements. On January 28, 2020, the UK government announced that "high-risk vendors" including, but not limited to, Huawei, would be excluded from sensitive "core" parts of 5G networks and locations deemed critical national infrastructure, and that such vendors' access to nonsensitive parts of networks would be limited to 35%. Other countries, such as Poland, have considered formally excluding Huawei from their telecommunications sector, and Czech Republic intelligence officials publicly labeled Huawei a national security risk. Despite U.S. concerns about China's growing footprint in Europe, Administration officials have expressed optimism that the United States and Europe can work together to meet the various security and economic issues posed by a rising China. Analysts, too, cite numerous concerns shared on both sides of the Atlantic and contend that joint U.S.-European pressure on China would be more effective than either partner's individual dealings with China. Enlargement to North Macedonia25 On March 27, 2020, North Macedonia became NATO's 30 th member (see Figure 2 for a map of NATO members and accession dates). NATO officials had hoped North Macedonia's accession would be complete in time for the London Leaders' Meeting, but elections in some member states delayed the accession ratification process. The U.S. Senate approved U.S. ratification on October 22, 2019. Political Tensions and Divergent Views Deliberations in London drew attention to heightened tension and divergent views within the alliance on a range of issues, including U.S. policy toward NATO and Europe, Turkey's standing as a member of the alliance, EU security and defense policy, and NATO's relations with Russia. Disagreement within the alliance on whether and how to respond to these and other issues has prompted some, including French President Emmanuel Macron, to question NATO's strategic direction and future. Many officials and analysts on both sides of the Atlantic also have suggested that President Trump's vocal criticism of NATO and the lack of transatlantic coordination on policies related to Syria and Afghanistan have seriously undermined the alliance. Secretary General Stoltenberg and others maintain that disagreement among allies is not a new phenomenon and stress that "Europe and North American are doing more together in NATO today than we have for decades." In an apparent effort to address diverging views within NATO, in London, the allies agreed to initiate a "forward-looking reflection process â¦ to further strengthen NATO's political dimension including consultation." On March 31, 2020, Secretary General Stoltenberg announced the appointment of a group of 10 experts tasked with recommending ways to "reinforce Alliance unity, increase political consultation and coordination between Allies, and strengthen NATO's political role. The group will be cochaired by former U.S. Assistant Secretary of State Wess Mitchell and former German Interior and Defense Minister Thomas De MaziÃ¨re. Allied Concerns Regarding the U.S. Commitment to NATO Some analysts and allied leaders question the Trump Administration's level of commitment to NATO and express concern that President Trump's criticisms of the alliance could cause lasting damage to NATO cohesion and credibility. In addition to admonishing European allies for failing to meet agreed NATO defense spending targets President Trump has repeatedly questioned NATO's value to the United States. Although he is not the first U.S. President to press the allies to increase defense spending, none has done so as stridently and none has called into question the U.S. commitment to NATO as openly or to the same extent as President Trump. In London, President Trump expressed that his Administration remains committed to NATO and to upholding European security, including through increased funding for U.S. defense activities in Europe such as the European Deterrence Initiative (EDI). Some NATO member state governments argue that growing divergence between the United States and many European allies on a range of key foreign and security policy issues, from Iran's nuclear program to fighting the Islamic State terrorist organization in Syria, has impeded cooperation in NATO and exposed strategic rifts within the alliance. Some European allies have expressed particular concern about what they portray as a lack of U.S. coordination on policy in Syria, where many European countries have been fighting alongside the United States to counter the Islamic State. Some maintain that the U.S. drawdown of forces in Syria in October 2019 enabled Turkey's subsequent military operations against Kurdish forces in the country. In a widely reported November 2019 interview, French President Macron cited these divergences when he proclaimed that, "we are currently experiencing the brain death of NATO." Referring to concerns about the drawdown of U.S. forces from Syria in October 2019 and subsequent military operations by Turkey, he lamented, "You have partners together in the same part of the world, and you have no coordination whatsoever of strategic decision-making between the United States and its NATO allies. None. You have an uncoordinated aggressive action by another NATO ally, Turkey, in an area where our interests are at stake. There has been no NATO planning, nor any coordination." In London, President Trump characterized Macron's criticism as "very, very nasty" and stressed that "NATO serves a great purpose"; Macron said he stood by his earlier criticism of the alliance. Tensions with Turkey36 Some of Turkey's fellow NATO members have sharply criticized Turkey's October 2019 military operations against Kurdish forces in northern Syria as well as its planned deployment of a Russian S-400 air defense system, with some policymakers calling into question Turkey's qualification for continued membership in the alliance. Turkey has been a NATO member since 1952 and has participated in numerous NATO missions, including ongoing operations in Afghanistan, Iraq, and the Western Balkans. NATO, in turn, has invested substantially in military facilities in Turkey, including naval bases and radar sites. Since 2013, NATO members have provided Turkey with air defense support through the deployment of defensive missile systems along its southern border. During an October 11, 2019, visit to Turkey, Secretary General Stoltenberg acknowledged Turkey's "legitimate" security concerns but urged Turkey to "act with restraint" and do everything it can to preserve the gains that have been made against the Islamic State. Since 2012, Turkey has on three separate occasions invoked Article 4 of NATO's founding treaty to prompt high-level NATO consultations on a perceived threat from Syria to Turkey's territorial integrity or security. On February 28, 2020, the allies met and expressed full solidarity with Turkey in response to "indiscriminate air strikes by the Syrian regime and Russia in Idlib province." Secretary General Stoltenberg stressed that NATO allies were providing Turkey with air defense support along its border with Syria and aerial surveillance over Syria. NATO has deployed up to three air defense systems along the Turkish-Syrian border since early 2013 in response to a Turkish request for support following shelling by Syrian forces and the shooting down of a Turkish fighter jet in 2012. Although the air defense mission continues, some allies cast doubts on the deployment after Turkey's military incursion into northern Syria in October 2019. Italy withdrew its air defense system from Turkey in December 2019, though it said the decision was not a response to Turkey's actions; Spain continues to deploy a Patriot missile battery along Turkey's border. Secretary General Stoltenberg has said that Turkey's acquisition of the S-400 air defense system is "not good" for NATO, but he stressed that Turkey could continue to participate in NATO's integrated air and missile defense systems if the S-400 is excluded from these systems. Some allied leaders have argued that NATO should exclude Turkey from NATO's defense systems if it deploys the S-400. The North Atlantic Treaty does not contain provisions explicitly authorizing NATO allies to take action against another NATO member without its consent. However, the United States and other NATO members could take measures to affect the character of allied cooperation with Turkeyâfor example, by changing their contributions of equipment or personnel, or their participation in specific activities in Turkey. On October 14, 2019, U.S. Defense Secretary Mark Esper stated that he would "press our other NATO allies to take collective and individual diplomatic and economic measures in response to these egregious Turkish actions." EU Security and Defense Policy Some European leaders, including French President Macron, have argued that uncertainty about the future U.S. role in European security should add urgency to long-standing efforts to develop coordinated European defense capabilities and policies, independent of but complementary to NATO. For two decades, the EU has sought to develop its Common Security and Defense Policy to bolster its common foreign policy, strengthen the EU's ability to respond to security crises, and enhance European military capabilities. Improving European military capabilities has been difficult, however, especially given many years of flat or declining European defense budgets. In recent years, the EU has announced several new defense initiatives, including a European Defense Fund (EDF) to support joint defense research and development activities and a new EU defense pact (known as Permanent Structured Cooperation, or PESCO) aimed at spending defense funds more efficiently. Secretary General Stoltenberg has expressed support for further EU defense integration and cooperation but emphasizes that these efforts should strengthen the European pillar within NATOâ22 NATO members are also members of the EUârather than replace or supplant NATO. Stoltenberg also has stressed that EU defense initiatives should be careful not to duplicate NATO capacities and should complement NATO initiatives. In addition, the Trump Administration has expressed concern that the EDF and PESCO could restrict U.S. defense companies from participating in the development of pan-European military projects. Supporters of EU defense integration highlight that PESCO's initial priority projects were identified in consultation with NATO and that several of these projects focus on enhancing military mobility across Europe, a key NATO priority. Issues for Congress Congress was instrumental in creating NATO in 1949 and has played a critical role in shaping U.S. policy toward the alliance ever since. Although many Members of Congress have criticized specific developments within NATOâregarding burden-sharing, for exampleâCongress as a whole has consistently demonstrated strong support for active U.S. leadership of and support for NATO. Congressional support for NATO traditionally has buttressed broader U.S. policy toward the alliance. During the Trump Administration, however, demonstrations of congressional support for NATO have at times been viewed primarily as an effort to reassure allies about the U.S. commitment to NATO after President Trump's criticisms of the alliance. For example, during the Trump Administration, both chambers of Congress have passed legislation expressly reaffirming U.S. support for NATO at times when some allies have questioned the President's commitment. Some analysts portrayed House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell's joint invitation to Secretary General Stoltenberg to address a joint session of Congress on April 3, 2019, in commemoration of NATO's 70 th anniversary as an additional demonstration of NATO's importance to Congress. Although Congress has expressed consistent support for NATO and its cornerstone Article 5 mutual defense commitment, congressional hearings on NATO in the 115 th and 116 th Congresses have reflected disagreement regarding President Trump's impact on the alliance. Some in Congress argue that President Trump's criticism of allied defense spending levels has spurred recent defense spending increases by NATO members that were not forthcoming under prior Administrations, despite long-standing U.S. concern. Other Members of Congress counter that President Trump's admonition of U.S. allies and his questioning of NATO's utility have damaged essential relationships and undermined NATO's credibility and cohesion. They contend that doubts about the U.S. commitment to the alliance could embolden adversaries, including Russia, and ultimately weaken other allies' commitment to NATO. Critics also have lamented the Administration's reported lack of coordination with its allies on policies that have significant security ramifications for Europe, such as countering the Islamic State in Syria. Despite disagreement over President Trump's impact on the alliance, most Members of Congress continue to express support for robust U.S. leadership of NATO, in particular to address potential threats posed by Russia. Many Members have called for enhanced NATO and U.S. military responses to Russian aggression in Ukraine, and others have advocated stronger European contributions to collective defense measures in Europe. Increasingly, some Members of Congress have questioned whether NATO should take formal action against an ally, such as Turkey, which pursues foreign and defense policies that they believe could threaten alliance security. In light of these considerations, Members of Congress could focus on several key questions regarding NATO's future, including the following: addressing the strategic value of NATO to the United States and the United States' leadership role within NATO; examining whether the alliance should adopt a new strategic concept that better reflects views of the security threat posed by Russia and new and emerging threats in the cyber and hybrid warfare domains (NATO's current strategic concept was adopted in 2010); examining NATO's capacity and willingness to address other security threats to the Euro-Atlantic region, including from the MENA region, posed by challenges such as terrorism and migration; examining the possible consequences of member states' failure to meet agreed defense spending targets; assessing U.S. force posture in Europe and the willingness of European allies to contribute to NATO deterrence efforts and U.S. defense initiatives in Europe, such as the ballistic missile defense program and EDI; examining options to sanction allies that act in ways that jeopardize allied security; revisiting the allies' commitment to NATO's stated "open door" policy on enlargement, especially with respect to the membership aspirations of Georgia and Ukraine; and developing a NATO strategy toward China, particularly given U.S. and other allies' concerns about the security ramifications of increased Chinese investment in Europe. Summary:	null	96	33,166	33,168	33,168	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Overview of 2019 Leaders' Meeting1 Heads of state and government from NATO's 30 member states met in London, United Kingdom (UK), on December 3-4, 2019. NATO and U.S. officials highlighted the following key deliverables from the London Leaders' Meeting: Completion of a new Readiness Initiative, under which the alliance would have at its disposal 30 mechanized battalions, 30 air squadrons, and 30 naval combat vessels ready to use within 30 days. Declaration of space as a new operational domain for NATO and advances in combatting cyber and hybrid threats, including establishing new baseline requirements for telecommunications infrastructure. Increased defense spending by European allies and Canada. Renewed commitment to NATO's mission in Afghanistan and counterterrorism efforts in the Middle East and North Africa. Agreement to assess China's impact on NATO and transatlantic security. Initiation of a new "forward-looking reflection process â¦ to further strengthen NATO's political dimension including consultation." More broadly, NATO officials sought to highlight NATO's achievements and the importance of strong U.S.-European relations to these efforts. The United States was the driving proponent of NATO's creation in 1949 and has been the unquestioned leader of the alliance as it has evolved from a collective defense organization of 12 members focused on deterring the Soviet Union to a globally engaged security organization of 30 members. Successive U.S. Administrations have viewed U.S. leadership of NATO as a cornerstone of U.S. national security strategy that brings benefits ranging from peace and stability in Europe to the political and military support of 28 allies, including many of the world's most advanced militaries. The London meeting came at a tense time for NATO, however. Some European allies question the Trump Administration's commitment to NATO and have criticized the Administration for a perceived unilateral approach to foreign policy issues, including the October 2019 drawdown of U.S. forces from Syria. Many allies also have criticized fellow NATO member Turkey for its military operations in Syria and its acquisition of a Russian-made air defense system. NATO Secretary General Jens Stoltenberg acknowledges ongoing tensions within the alliance but stresses that continued transatlantic cooperation has enabled NATO to be more active today than it has been in decades. Trump Administration officials maintain that the United States remains committed to NATO, and in London, President Trump stressed that NATO "has a great purpose." U.S. officials also highlight the Administration's successful efforts in 2017 and 2018 to substantially increase funding for the U.S. force presence in Europe and note that Secretary General Stoltenberg has credited President Trump with playing a role in securing defense spending increases across the alliance in recent years. Critics of the Trump Administration's NATO policy maintain that renewed Russian aggression has been a key factor behind such increases. Key Issues At the London meeting, NATO leaders stressed their commitment to advancing existing readiness and deterrence initiatives and to confronting emerging security challenges, including by declaring space as an operational domain for NATO. The allies also reinforced their commitment to NATO's ongoing mission in Afghanistan and other counterterrorism efforts and discussed the implications for NATO of China's growing investment in, and engagement with, Europe. Deterrence Through Increased Readiness In the five years since Russia occupied Crimea and invaded Eastern Ukraine, the United States has supported efforts to renew NATO's focus on territorial defense and deterring Russian aggression. Among other measures, NATO member states have deployed an Enhanced Forward Presence (EFP) totaling about 4,500 troops to the three Baltic States (Estonia, Latvia, and Lithuania) and Poland; increased military exercises and training activities in Central and Eastern Europe; and established new NATO command structures in six Central and Eastern European countries. In London, the allies announced progress on several new initiatives intended to enhance NATO's readiness to respond swiftly to an attack on a NATO member, including by reinforcing the aforementioned EFP battlegroups. A cornerstone of these efforts is full implementation by the end of 2019 of the so-called Four-Thirties Readiness Initiative, proposed by the United States in 2018, under which NATO would have 30 mechanized battalions, 30 air squadrons, and 30 naval combat vessels ready to use within 30 days. Although the allies have continued to support and contribute to NATO deterrence initiatives, some analysts question the effectiveness and sustainability of these efforts. For example, the authors of a February 2016 report by the RAND Corporation contend that "as presently postured, NATO cannot successfully defend the territory of its most exposed members." Some allies, including Poland and the Baltic States, have urged other NATO members to deploy more forces to the region to reinforce that alliance's deterrence posture. Other allies, including leaders in Western European countries such as Germany, Italy, and France, have stressed the importance of a dual-track approach to Russia that complements deterrence with dialogue. These allies contend that efforts to rebuild cooperative relations with Moscow should receive as much attention as efforts to deter Russia. Accordingly, these allies are reluctant to endorse permanently deploying troops in countries that joined NATO after the collapse of the Soviet Union due to concerns that this would violate the terms of the 1997 NATO-Russia Founding Act; in consideration of these terms, NATO's EFP has been referred to as "continuous" but rotational rather than "permanent." Addressing New Security Challenges: Cyber, Hybrid, and Space In London, the allies highlighted progress in responding to cyber and hybrid threats and formally declared space as a new operational domain for the alliance. Since naming cyber defense a core NATO competence in 2014, the alliance has adopted measures to protect NATO networks from cyberattacks and to assist member states in bolstering national cyber defense capabilities. NATO has made available Cyber Rapid Reaction Teams to help allies respond to cyberattacks, and in 2018 it announced plans to establish a new NATO Cyberspace Operations Center in Brussels. The new cyber center will focus on integrating allies' national cyber capabilities into NATO missions and operations. Although NATO member states maintain full ownership of these capabilitiesâas they do with other military capabilities deployed to NATO missionsâthe new operations center is tasked with incorporating cyber defense into all levels of NATO planning and operations. NATO also has sought to bolster capabilities to counter heightened hybrid warfare threats, including propaganda, deception, sabotage, and other nonmilitary tactics. NATO's focus has been on enhancing strategic communications, developing appropriate exercise scenarios, and strengthening coordination with the European Union (EU) to respond to hybrid threats. At their meeting in 2018, NATO leaders agreed to establish counter-hybrid support teams to provide tailored assistance to allies in preparing against and responding to hybrid activities. NATO deployed the first of these teams to Montenegro in November 2019. As discussed in more detail below (see " Assessing China's Impact on NATO and Transatlantic Security "), in London, NATO leaders endorsed new baseline requirements for allies with respect to the resilience of telecommunications infrastructure, including 5G systems. In London, NATO leaders formally declared space as an operational domain for NATO, alongside air, land, sea, and cyber. Secretary General Stoltenberg stated that the declaration reflects a consensus desire within NATO to strengthen defense and deterrence in all areas, including space, where NATO allies reportedly own about half of the approximately 2,000 satellites estimated to be in orbit currently. Stoltenberg has stressed that NATO has no intention of deploying weapons in space and that NATO's approach will remain defensive and in line with international law. Others have questioned whether China, which has a growing presence in space, might view the NATO declaration as a provocation. Defense Spending and Burden-Sharing A primary focus of the Trump Administration's policy toward NATO has been to urge allies to increase their national defense budgets in line with past agreements intended to ensure an equitable distribution of defense responsibilities within the alliance. In London, President Trump continued these calls but also welcomed substantial increases in European allies' defense spending over the past five years. Secretary General Stoltenberg has credited President Trump with playing a key role in spurring increases in European allied defense spending over the past five years. However, critics of the U.S. President express concern that his strident criticism of what he considers insufficient defense spending by some allies could damage NATO cohesion and credibility. In 2006, NATO members informally agreed to aim to allocate at least 2% of gross domestic product (GDP) to their national defense budgets annually and to devote at least 20% of national defense expenditure to procurement and related research and development. These targets were formalized at NATO's 2014 Wales Summit, when the allies pledged to halt declines in defense expenditures and "move towards the 2% guideline within a decade." U.S. and NATO officials say they are encouraged that defense spending by European allies and Canada has grown for five consecutive years (see Figure 1 ). According to Secretary General Stoltenberg, European allies and Canada have added $130 billion in defense spending since 2014; the figure is expected to rise to $400 billion by the end of 2024. In 2014, three allies met the 2% guideline; in 2019, 9 allies are expected to have met the 2% guideline, and 16 allies are expected to have met the 20% benchmark for spending on major equipment. President Trump and others continue to criticize those NATO members perceived to be reluctant to achieve defense-spending targets, however. One such member is Europe's largest economy, Germany, which currently spends about 1.38% of GDP on defense and has plans to reach 1.5% of GDP by 2024. Although all allied governments agreed to the Wales commitments, many, including Germany, emphasize that allied contributions to ongoing NATO missions and the effectiveness of allied military capabilities should be considered as important as total defense spending levels. For example, an ally spending less than 2% of GDP on defense could have more modern, effective military capabilities than an ally that meets the 2% target but allocates most of that funding to personnel costs and relatively little to ongoing missions and modernization. Analysts on both sides of the Atlantic also have argued that a relatively narrow focus on defense inputs (i.e., the size of defense budgets) should be accompanied by an equal, if not greater, focus on defense outputs (i.e., military capabilities and the effectiveness of contributions to NATO missions and activities). The alliance's target to devote at least 20% of each member's national defense expenditure to new equipment and related research and development reflects this goal. Secretary General Stoltenberg has emphasized a broad approach to measuring contributions to the alliance, using a metric of "cash, capabilities, and contributions." Proponents of this approach argue that a broad assessment of allied contributions that takes into account factors beyond the 2% of GDP defense spending metric would be more appropriate given NATO's wide-ranging strategic objectives, some of which may require capabilities beyond the military sphere. In London, allied leaders approved a U.S. proposal to reduce assessed U.S. contributions, and increase German contributions, to NATO's relatively small pot of common funds . National contributions to NATO's common fundsâabout $2.6 billion total in 2019âpay for the day-to-day operations of NATO headquarters, as well as some collective NATO military assets and infrastructure. According to NATO, in 2018, the U.S. share of NATO's common-funded budgets was about 22% , or about $570 million, followed by Germany (15%), France (11%), and the UK (10%). The U.S. proposal approved in London would bring both the U.S. and German contributions to about 16% each. Afghanistan and Counterterrorism In London, the allies renewed their commitment to NATO's ongoing training mission in Afghanistan, despite speculation about a possible drawdown of U.S. forces in the country. In January 2015, following the end of its 11-year-long combat mission in Afghanistan, NATO launched the Resolute Support Mission (RSM) to train, advise, and assist Afghan security forces. Between 2015 and late 2018, NATO allies and partners steadily matched U.S. increases in troop levels to RSM. As of February 2020, about 8,500 of the 16,551 troops contributing to RSM were from NATO members and partner countries other than the United States. After the United States (8,000 troops), the top contributors to the mission were Germany (1,300), the UK (1,100), Italy (895), non-NATO-member Georgia (871), and Romania (797). NATO leaders welcomed the February 29, 2020, Joint Declaration between the United States and Afghanistan and agreement between the United States and the Taliban in pursuit of a peaceful settlement to the conflict in Afghanistan. Secretary General Stoltenberg said that NATO would implement adjustments, including troop reductions, to its mission as outlined in the agreements; he stressed, however, that such actions would be "conditions-based." NATO continues to "reaffirm its longstanding commitment to Afghanistan and ongoing support for the Afghan National Defense and Security Forces." In the past, European allies have expressed concern that they were not consulted on possible drawdown plans and stressed that any such plans be carried out in close coordination with the allies. President Trump consistently has called on NATO to expand its counterterrorism efforts beyond Afghanistan, and terrorist threats emanating from the Middle East and North Africa (MENA) region are key European concerns as well. Over the past several years, NATO leaders have launched several new initiatives aimed at countering terrorism and addressing instability in the MENA region. These initiatives include the noncombat NATO Training Mission in Iraq, carried out by between 300 and 500 allied military trainers; the Package on the South, an initiative that includes a range of partnership activities to enhance cooperation initiatives with MENA countries such as Tunisia and Jordan; and establishment of a NATO Regional Hub for the South in Naples, Italy, to coordinate NATO responses to crises emanating from the South. NATO also has deployed aerial surveillance aircraft (AWACS) to assist the global coalition fighting the Islamic State terrorist organization. Several factors have limited enhanced NATO engagement on security challenges emanating from the MENA region. These factors include a belief among some allies that the EU is the appropriate institution to lead Europe's response to terrorism and migration issues and a related reluctance to cede leadership on these issues to NATO. France, for example, has advocated strong European responses to terrorism and conflict in the Middle East but has generally opposed a larger role for NATO. Some allies also disagree on what the appropriate response should be to some of the security challenges in the MENA region, with some appearing hesitant to involve NATO in a way that could be seen as endorsing military action. Assessing China's Impact on NATO and Transatlantic Security The Trump Administration and some Members of Congress have urged NATO to assess the security implications of growing Chinese investment in Europe and to work to counter potential negative impacts on transatlantic security. As expressed in the December 2017 U.S. National Security Strategy , U.S. officials have grown increasingly concerned that "China is gaining a strategic foothold in Europe by expanding its unfair trade practices and investing in key industries, sensitive technologies, and infrastructure." U.S. officials express particular concern about Chinese investment in critical infrastructure and telecommunications systems, such as 5G networks. Some U.S. defense officials have suggested that the United States might limit military cooperation and intelligence sharing with allies that allow Chinese investment in 5G networks. In London, NATO formally adopted an October 2019 plan by NATO defense ministers to update the alliance's baseline requirements for civilian telecommunications to reflect emerging concerns about 5G technology. The allies agreed to assess the risks to communications systems associated with cyber threats, and the consequences of foreign ownership, control, or direct investment. Although the EU is attempting to develop common guidelines to govern contracting decisions on 5G networks, these decisions would remain the prerogative of individual national governments. As noted above, U.S. officials have warned European allies and partners that using Huawei or other Chinese 5G equipment could impede intelligence sharing with the United States due to fears of compromised network security. Although some allies, such as the UK and Germany, have said they would not prevent Chinese companies from bidding on 5G contracts, these allies have stressed that they would not contract with any companies that do not meet their national security requirements. On January 28, 2020, the UK government announced that "high-risk vendors" including, but not limited to, Huawei, would be excluded from sensitive "core" parts of 5G networks and locations deemed critical national infrastructure, and that such vendors' access to nonsensitive parts of networks would be limited to 35%. Other countries, such as Poland, have considered formally excluding Huawei from their telecommunications sector, and Czech Republic intelligence officials publicly labeled Huawei a national security risk. Despite U.S. concerns about China's growing footprint in Europe, Administration officials have expressed optimism that the United States and Europe can work together to meet the various security and economic issues posed by a rising China. Analysts, too, cite numerous concerns shared on both sides of the Atlantic and contend that joint U.S.-European pressure on China would be more effective than either partner's individual dealings with China. Enlargement to North Macedonia25 On March 27, 2020, North Macedonia became NATO's 30 th member (see Figure 2 for a map of NATO members and accession dates). NATO officials had hoped North Macedonia's accession would be complete in time for the London Leaders' Meeting, but elections in some member states delayed the accession ratification process. The U.S. Senate approved U.S. ratification on October 22, 2019. Political Tensions and Divergent Views Deliberations in London drew attention to heightened tension and divergent views within the alliance on a range of issues, including U.S. policy toward NATO and Europe, Turkey's standing as a member of the alliance, EU security and defense policy, and NATO's relations with Russia. Disagreement within the alliance on whether and how to respond to these and other issues has prompted some, including French President Emmanuel Macron, to question NATO's strategic direction and future. Many officials and analysts on both sides of the Atlantic also have suggested that President Trump's vocal criticism of NATO and the lack of transatlantic coordination on policies related to Syria and Afghanistan have seriously undermined the alliance. Secretary General Stoltenberg and others maintain that disagreement among allies is not a new phenomenon and stress that "Europe and North American are doing more together in NATO today than we have for decades." In an apparent effort to address diverging views within NATO, in London, the allies agreed to initiate a "forward-looking reflection process â¦ to further strengthen NATO's political dimension including consultation." On March 31, 2020, Secretary General Stoltenberg announced the appointment of a group of 10 experts tasked with recommending ways to "reinforce Alliance unity, increase political consultation and coordination between Allies, and strengthen NATO's political role. The group will be cochaired by former U.S. Assistant Secretary of State Wess Mitchell and former German Interior and Defense Minister Thomas De MaziÃ¨re. Allied Concerns Regarding the U.S. Commitment to NATO Some analysts and allied leaders question the Trump Administration's level of commitment to NATO and express concern that President Trump's criticisms of the alliance could cause lasting damage to NATO cohesion and credibility. In addition to admonishing European allies for failing to meet agreed NATO defense spending targets President Trump has repeatedly questioned NATO's value to the United States. Although he is not the first U.S. President to press the allies to increase defense spending, none has done so as stridently and none has called into question the U.S. commitment to NATO as openly or to the same extent as President Trump. In London, President Trump expressed that his Administration remains committed to NATO and to upholding European security, including through increased funding for U.S. defense activities in Europe such as the European Deterrence Initiative (EDI). Some NATO member state governments argue that growing divergence between the United States and many European allies on a range of key foreign and security policy issues, from Iran's nuclear program to fighting the Islamic State terrorist organization in Syria, has impeded cooperation in NATO and exposed strategic rifts within the alliance. Some European allies have expressed particular concern about what they portray as a lack of U.S. coordination on policy in Syria, where many European countries have been fighting alongside the United States to counter the Islamic State. Some maintain that the U.S. drawdown of forces in Syria in October 2019 enabled Turkey's subsequent military operations against Kurdish forces in the country. In a widely reported November 2019 interview, French President Macron cited these divergences when he proclaimed that, "we are currently experiencing the brain death of NATO." Referring to concerns about the drawdown of U.S. forces from Syria in October 2019 and subsequent military operations by Turkey, he lamented, "You have partners together in the same part of the world, and you have no coordination whatsoever of strategic decision-making between the United States and its NATO allies. None. You have an uncoordinated aggressive action by another NATO ally, Turkey, in an area where our interests are at stake. There has been no NATO planning, nor any coordination." In London, President Trump characterized Macron's criticism as "very, very nasty" and stressed that "NATO serves a great purpose"; Macron said he stood by his earlier criticism of the alliance. Tensions with Turkey36 Some of Turkey's fellow NATO members have sharply criticized Turkey's October 2019 military operations against Kurdish forces in northern Syria as well as its planned deployment of a Russian S-400 air defense system, with some policymakers calling into question Turkey's qualification for continued membership in the alliance. Turkey has been a NATO member since 1952 and has participated in numerous NATO missions, including ongoing operations in Afghanistan, Iraq, and the Western Balkans. NATO, in turn, has invested substantially in military facilities in Turkey, including naval bases and radar sites. Since 2013, NATO members have provided Turkey with air defense support through the deployment of defensive missile systems along its southern border. During an October 11, 2019, visit to Turkey, Secretary General Stoltenberg acknowledged Turkey's "legitimate" security concerns but urged Turkey to "act with restraint" and do everything it can to preserve the gains that have been made against the Islamic State. Since 2012, Turkey has on three separate occasions invoked Article 4 of NATO's founding treaty to prompt high-level NATO consultations on a perceived threat from Syria to Turkey's territorial integrity or security. On February 28, 2020, the allies met and expressed full solidarity with Turkey in response to "indiscriminate air strikes by the Syrian regime and Russia in Idlib province." Secretary General Stoltenberg stressed that NATO allies were providing Turkey with air defense support along its border with Syria and aerial surveillance over Syria. NATO has deployed up to three air defense systems along the Turkish-Syrian border since early 2013 in response to a Turkish request for support following shelling by Syrian forces and the shooting down of a Turkish fighter jet in 2012. Although the air defense mission continues, some allies cast doubts on the deployment after Turkey's military incursion into northern Syria in October 2019. Italy withdrew its air defense system from Turkey in December 2019, though it said the decision was not a response to Turkey's actions; Spain continues to deploy a Patriot missile battery along Turkey's border. Secretary General Stoltenberg has said that Turkey's acquisition of the S-400 air defense system is "not good" for NATO, but he stressed that Turkey could continue to participate in NATO's integrated air and missile defense systems if the S-400 is excluded from these systems. Some allied leaders have argued that NATO should exclude Turkey from NATO's defense systems if it deploys the S-400. The North Atlantic Treaty does not contain provisions explicitly authorizing NATO allies to take action against another NATO member without its consent. However, the United States and other NATO members could take measures to affect the character of allied cooperation with Turkeyâfor example, by changing their contributions of equipment or personnel, or their participation in specific activities in Turkey. On October 14, 2019, U.S. Defense Secretary Mark Esper stated that he would "press our other NATO allies to take collective and individual diplomatic and economic measures in response to these egregious Turkish actions." EU Security and Defense Policy Some European leaders, including French President Macron, have argued that uncertainty about the future U.S. role in European security should add urgency to long-standing efforts to develop coordinated European defense capabilities and policies, independent of but complementary to NATO. For two decades, the EU has sought to develop its Common Security and Defense Policy to bolster its common foreign policy, strengthen the EU's ability to respond to security crises, and enhance European military capabilities. Improving European military capabilities has been difficult, however, especially given many years of flat or declining European defense budgets. In recent years, the EU has announced several new defense initiatives, including a European Defense Fund (EDF) to support joint defense research and development activities and a new EU defense pact (known as Permanent Structured Cooperation, or PESCO) aimed at spending defense funds more efficiently. Secretary General Stoltenberg has expressed support for further EU defense integration and cooperation but emphasizes that these efforts should strengthen the European pillar within NATOâ22 NATO members are also members of the EUârather than replace or supplant NATO. Stoltenberg also has stressed that EU defense initiatives should be careful not to duplicate NATO capacities and should complement NATO initiatives. In addition, the Trump Administration has expressed concern that the EDF and PESCO could restrict U.S. defense companies from participating in the development of pan-European military projects. Supporters of EU defense integration highlight that PESCO's initial priority projects were identified in consultation with NATO and that several of these projects focus on enhancing military mobility across Europe, a key NATO priority. Issues for Congress Congress was instrumental in creating NATO in 1949 and has played a critical role in shaping U.S. policy toward the alliance ever since. Although many Members of Congress have criticized specific developments within NATOâregarding burden-sharing, for exampleâCongress as a whole has consistently demonstrated strong support for active U.S. leadership of and support for NATO. Congressional support for NATO traditionally has buttressed broader U.S. policy toward the alliance. During the Trump Administration, however, demonstrations of congressional support for NATO have at times been viewed primarily as an effort to reassure allies about the U.S. commitment to NATO after President Trump's criticisms of the alliance. For example, during the Trump Administration, both chambers of Congress have passed legislation expressly reaffirming U.S. support for NATO at times when some allies have questioned the President's commitment. Some analysts portrayed House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell's joint invitation to Secretary General Stoltenberg to address a joint session of Congress on April 3, 2019, in commemoration of NATO's 70 th anniversary as an additional demonstration of NATO's importance to Congress. Although Congress has expressed consistent support for NATO and its cornerstone Article 5 mutual defense commitment, congressional hearings on NATO in the 115 th and 116 th Congresses have reflected disagreement regarding President Trump's impact on the alliance. Some in Congress argue that President Trump's criticism of allied defense spending levels has spurred recent defense spending increases by NATO members that were not forthcoming under prior Administrations, despite long-standing U.S. concern. Other Members of Congress counter that President Trump's admonition of U.S. allies and his questioning of NATO's utility have damaged essential relationships and undermined NATO's credibility and cohesion. They contend that doubts about the U.S. commitment to the alliance could embolden adversaries, including Russia, and ultimately weaken other allies' commitment to NATO. Critics also have lamented the Administration's reported lack of coordination with its allies on policies that have significant security ramifications for Europe, such as countering the Islamic State in Syria. Despite disagreement over President Trump's impact on the alliance, most Members of Congress continue to express support for robust U.S. leadership of NATO, in particular to address potential threats posed by Russia. Many Members have called for enhanced NATO and U.S. military responses to Russian aggression in Ukraine, and others have advocated stronger European contributions to collective defense measures in Europe. Increasingly, some Members of Congress have questioned whether NATO should take formal action against an ally, such as Turkey, which pursues foreign and defense policies that they believe could threaten alliance security. In light of these considerations, Members of Congress could focus on several key questions regarding NATO's future, including the following: addressing the strategic value of NATO to the United States and the United States' leadership role within NATO; examining whether the alliance should adopt a new strategic concept that better reflects views of the security threat posed by Russia and new and emerging threats in the cyber and hybrid warfare domains (NATO's current strategic concept was adopted in 2010); examining NATO's capacity and willingness to address other security threats to the Euro-Atlantic region, including from the MENA region, posed by challenges such as terrorism and migration; examining the possible consequences of member states' failure to meet agreed defense spending targets; assessing U.S. force posture in Europe and the willingness of European allies to contribute to NATO deterrence efforts and U.S. defense initiatives in Europe, such as the ballistic missile defense program and EDI; examining options to sanction allies that act in ways that jeopardize allied security; revisiting the allies' commitment to NATO's stated "open door" policy on enlargement, especially with respect to the membership aspirations of Georgia and Ukraine; and developing a NATO strategy toward China, particularly given U.S. and other allies' concerns about the security ramifications of increased Chinese investment in Europe.	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crs_R46211	crs_R46211_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The National Security Space Launch (NSSL) program aims to acquire launch services and ensure continued access to space for critical national security missions. The U.S. Air Force implemented the original program in 1995âEvolved Expendable Launch Vehicle (EELV)âand awarded four companies contracts to design a cost-effective launch vehicle system. The DOD acquisition strategy was to select one company and ensure that NSS launches were affordable and reliable. The EELV effort was prompted by significant increases in launch costs, procurement concerns, and the lack of competition among U.S. companies. A major challenge and long-standing undercurrent of concern over U.S. reliance on a Russian rocket engine (RD-180), used on one of the primary national security rockets for critical national security space launches, was exacerbated by the Russian backlash over the 2014 U.S. sanctions against its actions in Ukraine. Moreover, significant overall NSSL program cost increases and unresolved questions over individual launch costs, along with legal challenges to the Air Force contract awards by space launch companies, prompted legislative action. In the John S. McCain National Defense Authorization Act (NDAA) for FY2019, Congress renamed the EELV to the NSSL program to reflect a wider mission that would consider both reusable and expendable launch vehicles. The origins of the NSSL program date back to 1995, after years of concerns within the Air Force and space launch community over increasing cost and decreasing confidence in the continued reliability of national access to space. The purpose of EELV was to provide the United States affordable, reliable, and assured access to space with two families of space launch vehicles. Initially only two companies were in competition: Boeing produced the Delta IV launch vehicle, and Lockheed Martin developed the Atlas V. Overall, the program provided critical space lift capability to support DOD and intelligence community satellites, together known as National Security Space (NSS) missions. The EELV program evolved modestly in response to changing circumstances, and the Air Force approved an EELV acquisition strategy in November 2011, further revising it in 2013. That strategy was designed to (1) sustain two major independent rocket-powered launch vehicle families to reduce the chance of launch interruptions and to ensure reliable access to space; (2) license and stockpile the Russian-made RD-180 heavy-lift rocket engine, a critical component of the Atlas V; (3) pursue a block-buy commitment to a number of launches through the end of the decade to reduce launch costs; and (4) increase competition to reduce overall launch costs. The Air Force and others viewed the overall EELV acquisition strategy as having successfully reduced launch costs while demonstrating highly reliable access to space for DOD and the intelligence community. Others in Congress and elsewhere, however, argued that the program remained far too costly and was not as competitive as it should be. The NSSL program is managed by the Launch Enterprise Systems Directorate of the Space and Missile Systems Center, Los Angeles Air Force Base (El Segundo, CA). The NSSL program consists of four launch vehicles: Atlas V and Delta IV Heavy (both provided by United Launch Alliance [ULA] of Denver, CO) and Falcon 9 and Falcon Heavy (both provided by Space Exploration Technologies Corporation [SpaceX] of Hawthorne, CA). NSS launches support the Air Force, Navy, and National Reconnaissance Office (NRO). More specifically, the Atlas V has launched commercial, civil, and NSS satellites into orbit, including commercial and military communications satellites, lunar and other planetary orbiters and probes, earth observation, military research, and weather satellites, missile warning and NRO reconnaissance satellites, a tracking and data relay satellite, and the X-37B space plane (a military orbital test vehicle). The Delta IV has launched commercial and military communications and weather satellites, and missile warning and NRO satellites. The Atlas V and Delta IV Heavy launch vehicles are produced by ULA, which was formed in 2006 as a joint venture of The Boeing Company (of Chicago, IL) and Lockheed Martin (of Bethesda, MD). In addition to the launch vehicles themselves, the NSSL program consists of an extensive array of support capabilities and infrastructure to permit safe operations of U.S. launch ranges. ULA operates five space launch complexes, two at Cape Canaveral Air Force Station, FL (Space Launch Complex-37 and Space Launch Complex-41), and three at Vandenberg Air Force Base, CA (Space Launch Complex-2, Space Launch Complex-3F, and Space Launch Complex-6). A large number of key suppliers for ULA are spread throughout 46 states. DOD certified SpaceX to compete for NSS launches in 2015. The Falcon 9 flew its first NSSL mission on December 23, 2018, which delivered the Global Positioning System (GPS) III to orbit. SpaceX developed a more capable launch capability in the Falcon Heavy, which DOD certified in June 2018 and later awarded NSS missions under Phase 1A of the NSSL program. SpaceX maintains three launch sites, one at Cape Canaveral Air Force Station, FL (Space Launch Complex 40); one at Kennedy Space Center (Launch Complex 39A); and one at Vandenberg Air Force Base, CA (Space Launch Complex 4E). On October 10, 2018, the Air Force awarded three Launch Service Agreement (LSA) Other Transaction Authority (OTA) agreements to space launch companies. The LSA OTA agreements are "public-private partnerships [that] leverage industry's commercial launch solutions to ensure those systems meet NSS requirements." They also "facilitate development of three NSSL launch system prototypes and maturing those launch systems prior to selecting two NSS launch service providers for launch service procurements beginning in FY2020." The Air Force released request for proposals (RFP) in May 2019 for Phase 2 of the NSSL program, with plans to award two separate Launch Service Procurement (LSP) contracts in the summer of 2020. The selected companies will be responsible for launching national security satellites through 2027. However, the Air Force acquisition strategy of down-selecting no more than two launch providers may mitigate short-term risk but could have second- and third-order effects for resiliency in the future. Congress may consider whether the strategy's cost-benefit analysis warrants further research. Should no more than two launch providers be chosen for LSP contracts in Phase 2, the companies not selected would lose the LSA funds received from the Air Force and could potentially be faced with (1) the choice of abandoning NSSL development to focus on competing in the commercial launch sector or (2) investing vast company reserves to continue development on its own. Furthermore, DOD investment in only two launch providers could mean fewer options for an increasingly diverse range of national space security missions and possibly limit competition, once again, in the launch market. Evolution of the EELV 1990s-2011 By the early 1990s, the U.S. space industrial base supported the production of a number of launch vehicles (i.e., Titan II, Delta II, Atlas I/II/IIAS, and Titan IV) and their associated infrastructure. Although launch costs were increasing and operational and procurement deficiencies were noted by many decisionmakers, no clear consensus formed over how best to proceed. Congress took the initiative in the National Defense Authorization Act for Fiscal Year 1994 (NDAA; P.L. 103-160 , Â§213) by directing DOD to develop a Space Launch Modernization Plan (SLMP) that would "establish and clearly define priorities, goals, and milestones regarding modernization of space launch capabilities for the Department of Defense or, if appropriate, for the Government as a whole." The recommendations of the SLMP led DOD to implement the EELV program as the preferred alternative. The primary objective of the EELV program was to reduce costs by 25%. The program also sought to ensure 98% launch vehicle design reliability and to standardize EELV system launch pads and the interface between satellites and their launch vehicles. Congress supported these recommendations through the FY1995 NDAA ( P.L. 103-337 , Â§211), directing DOD to develop an integrated space launch vehicle strategy to replace or consolidate the then-current fleet of medium and heavy launch vehicles and to devise a plan to develop new or upgraded expendable launch vehicles. Congress recommended spending $30 million for a competitive reusable rocket technology program and $60 million for expendable launch vehicle development and acquisition. The original EELV acquisition strategy, initiated in 1994, called for a competitive down-select to a single launch provider and development of a system that could handle the entire NSS launch manifest. In 1995, the Air Force selected four launch providers for the initial competition: Lockheed Martin, Boeing, McDonnell Douglas, and Alliant Techsystems. After the first round of competition, the Air Force selected Lockheed Martin and McDonnell Douglas to continue. When Boeing acquired McDonnell Douglas in 1997, Boeing took over the contract to develop an EELV. Soon thereafter, however, the Air Force revised the EELV acquisition strategy, concluding that there was now a sufficient space launch market to sustain two EELV providers. Throughout the acquisition process, DOD maintained that competition between Lockheed Martin and Boeing was essential. At the time, the Government Accountability Office (GAO) reported that sufficient growth in the commercial launch business would sustain both companies, a premise that, in turn, would lead to lower launch prices for the government. But "the robust commercial market upon which DOD based its acquisition strategy of maintaining two launch companies [throughout the life-cycle of the program] never materialized, and estimated prices for future contracts, along with total program costs, increased." Retaining two launch providers, however, did provide DOD with some confidence in its ability to maintain "assured access to space." This confidence soon collapsed, when in the late 1990s, the United States suffered six space launch failures in less than a year. These failures included the loss of three national security satellites in 1998-1999, at a cost of over $3 billion. One, a critical national security communications satellite (MILSTARâMilitary Strategic and Tactical Relay), was lost on a failed Titan IV launch in 1999. That satellite capability was not replaced until 2010 with an AEHF (Advanced Extremely High Frequency) satellite, which experienced substantial acquisition challenges and frequent changes in both design and requirements. The other two losses were an NRO reconnaissance satellite and a DSP (Defense Support Program) satellite. In addition to the cost, schedule, and operational impacts of these lost missions, including a classified national security loss in coverage with MILSTAR, these failures significantly influenced the transition to the EELV program, which had an initial goal to make national security space launches more affordable and reliable. President Clinton directed a review of these failures and sought recommendations for any necessary changes. The subsequent Broad Area Review (BAR) essentially concluded that the U.S. government should no longer rely on commercial launch suppliers alone to provide confidence and reliability in the EELV program. Instead, the BAR recommended more contractor and government oversight through increasing the number of independent reviews, pursuing performance guarantees from the launch providers, and greater government involvement in the mission assurance process. Although these additional oversight activities eventually proved to significantly increase EELV costs, they also eventually led to notable improvements in launch successes. The early 2000s saw considerable turmoil within the Air Force space community and among the EELV launch service providers due to competition in the shrinking space launch industrial base, cost increases, and the growing need for reliable access to space. During this time, the poor business prospects in the space launch market drove Lockheed and Boeing to consider leaving the market altogether. Therefore, to protect its objective of assured access to space, the U.S. government began to shoulder much of the EELV program's fixed costs. To further protect the United States' ability to deliver NSS satellites into orbit, the George W. Bush Administration conducted a number of internal reviews that culminated in the 2004 National Security Policy Directive (NSPD)-40. This directive established the requirement for "assured access to space" and obliged DOD to fund the annual fixed launch costs for both Lockheed and Boeing until such time as DOD could certify that assured access to space could be maintained without two launch providers. DOD thus revised its EELV acquisition strategy because of the collapse of the commercial launch market and the ongoing erosion of the space industrial base. GAO wrote that "in acknowledging the government's role as the primary EELV customer, the new strategy maintained assured access to space by funding two product lines of launch vehicles." In 2006, The Boeing Company and Lockheed Martin announced plans to consolidate their launch operations into a joint ventureâULA. The companies argued that by combining their resources, infrastructure, expertise, and capabilities, they could assure access to space at lower cost. DOD believed that having two launch vehicle families (Atlas V and Delta IV) under one entity (i.e., ULA) provided significant benefits that outweighed the loss of competition. In October 2006, the Federal Trade Commission granted ULA antitrust clearance allowing the new company to form on December 1, 2006. As a result, "unparalleled EELV mission success" ensued, and the tradeoff over increased costs and reduced competition outside ULA was largely deemed acceptable. 2011-Current Status Since 2006, the Air Force has procured space launches from ULA on a sole-source basis. The former EELV program focused primarily on mission successânot cost control. GAO reported, however, that by 2010 "DOD officials predicted EELV program costs would increase at an unsustainable rate" due to possible instabilities in the launch industrial base and the inefficient buying practice of purchasing one launch vehicle at a time. In 2009, SpaceX, a new entrant to the space launch industrial base, became the first private company to successfully develop a liquid fuel rocket that delivered a commercial satellite to orbit. However, SpaceX was not certified to compete for national security missions until 2005. In response, DOD recognized a need to again reorganize the way it acquired launch services. Additional studies and internal reviews evaluated alternatives to the EELV business model, which in turn led to a new EELV acquisition strategy adopted in November 2011. The new acquisition strategy advocated a steady launch vehicle production rate. This production rate was designed to provide economic benefits to the government through larger buys, or block-buys, of launch vehicles, providing a predictable production schedule to stabilize the space launch industrial base. The new EELV acquisition strategy also announced the government's intent to renew competition in the program. In addition to revising its acquisition strategy, DOD undertook significant efforts to obtain greater insight into ULA program costs in advance of contract negotiations. In May 2011, DOD solicited a Request for Information to prospective launch providers. In March 2012, DOD issued a sole-source solicitation for the block-buy to ULA, and in April 2012, the EELV program incurred a critical Nunn-McCurdy cost breach. In December 2013, DOD followed through on its new EELV strategy, signing a contract modification with ULA committing the government to buy 35 launch vehicle booster cores over a five-year period, along with the associated infrastructure capability to launch them. DOD viewed this contract modification as a significant effort on its part to negotiate better launch prices through improved knowledge of ULA contractor costs. DOD officials expected the new contract to realize significant savings, primarily through stable unit pricing for all launch vehicles. However, some in Congress, and some analysts outside government, strongly disputed the DOD estimates of cost savings. DOD announced that it would add up to 14 additional NSS launches to broader competition. However, in the FY2015 budget request, the Air Force announced that the number of EELV launches open to broader competition through FY2017 would be reduced from 14 to 7. Some Members of Congress, and SpaceX officials, raised questions about how many launches would ultimately be openly competed. Perhaps resulting from turmoil associated with the Nunn-McCurdy cost breach, as well as the perceived instabilities mentioned above, the EELV acquisition strategy proceeded to a three-phased approach: Phase 1 (FY2013-FY2019) would consist of the sole-source block-buy awarded to ULA to procure up to 36 cores and to provide 7 years of NSS launch infrastructure capability. Phase 1A (FY2015-FY2017) emerged as a modification to Phase 1 that would consist of opening up competition for NSS launches to new space launch entrants (such as SpaceX). The Air Force said it could award up to 14 cores to a new entrant over 3 years, if a new entrant became certified. Phase 2 (FY2018-FY2022) envisioned full competition among all launch service providers. The operational requirements, budget, and potential for competition are currently being worked on. Phase 3 (FY2023-FY2030) envisioned full competition with the award of any or all required launch services to any certified provider. The Air Force's strategy appeared to fulfill the mandates to maintain assured access to space and introduce competition into the space launch market. To date, the NSSL program has launched more than 70 successful missions in support of the Air Force, the National Reconnaissance Office, and the U.S. Navy. ULA's Delta IV and Atlas V launch vehicles (which are older than the NNSL program) have performed over 90 consecutive successful missions, whereas SpaceX has performed five successful NSS launches. Factors That Complicated EELV Acquisition Strategy Several interrelated factors created uncertainty over the Air Force's ability to continue with the three-phased EELV acquisition strategy. These included ongoing concerns over program and launch costs, U.S. national security vulnerability from dependence on a Russian component in the EELV program (the RD-180 main engine), legal challenges to the acquisition strategy, and legislation that could change the EELV program. Cost Growth in the EELV In March 2012, the EELV program reported two critical Nunn-McCurdy unit cost breaches, which resulted in a reassessment of the program. The cost of the newly restructured program was estimated by GAO in March 2013 at $69.6 billion. This amount represented an increase of $34.6 billion, or about 100%, over the program's estimated cost of $35 billion from a year earlier. GAO identified several causes for this cost growth, including an extension of the program's life cycle from 2020 to 2030, an increase of the planned number of launch vehicles to be procured from 91 to 150 (an increase of 59%), the inherently unstable nature of demand for launch services, and instability in the industrial base. These causes related to changes in the scope of the program and reflected the industrial-base conditions under which the program was being undertaken; they did not appear to imply poor performance by the Air Force or the industry in executing the program. Even so, the overall increase in estimated program costs complicated the Air Force's challenge in funding the program within available resources without reducing funding for other program priorities. It also contributed to focusing attention on modifying their EELV acquisition strategy. In addition, the costs of individual launches themselves came under renewed scrutiny. SpaceX and others asserted that the launch costs charged by ULA were significantly higher than what SpaceX would charge the U.S. government once it was certified by the Air Force to conduct NSS launches. Part of the challenge in verifying these claims, however, is that much of the detailed cost data are proprietary, not readily comparable, and some are speculative to the extent that there is little empirical data on which those costs are provided. Although the Air Force, GAO, ULA, and SpaceX have provided some launch cost data, it is not apparent the data are directly comparable or are calculated using the same cost model assumptions. In addition, because SpaceX has limited data directly related to NSS launches, its cost figures are not likely based on a long history of actual cost, performance, and reliability. Thus, the issue of reliable and consistent cost data for comparative purposes has been a source of frustration for many in Congress. Reliance on the Russian RD-180 Main Engine The original impetus for licensing the Russian RD-180 as the main engine for the Atlas V launch vehicle grew out of concerns associated with the 1991 collapse of the Soviet Union. At the time, the CIA and others expressed serious concern about the potential export and proliferation of Russian scientific and missile expertise to countries hostile to U.S. interests. These concerns in turn spurred a U.S.-Russian partnership to acquire some of Russia's heavy lift rocket engine capabilities, thus expanding upon existing Cold War civil space cooperation. Initially, this took the form of a license agreement between Energomash NPO and RD Amross (of Palm Beach, FL) for the coproduction of the RD-180 engine as part of the EELV acquisition strategy. This later changed in an acquisition revision to simply purchase and stockpile roughly two years' worth of the engines for the Atlas V, an approach that was then viewed as highly cost-competitive. The existing license agreement for purchasing RD-180 engines extends to 2022. In subsequent years, some Members of Congress and policy experts occasionally expressed concern over the potential vulnerability of the EELV program based on reliance on a single critical Russian component. For instance, the FY2005 defense authorization act ( P.L. 108-375 , Â§912) directed DOD to examine future space launch requirements. The resulting 2006 RAND study concluded that "the use of the Russian-manufactured RD-180 engines in the Atlas V common core is a major policy issue that must be addressed in the near term." Similar concern was noted by GAO in 2011: "the EELV program is dependent on Russian RD-180 engines for its Atlas line of launch vehicles, which according to the Launch Enterprise Transformation Study, is a significant concern for policymakers." In the FY2013 defense authorization act ( P.L. 112-239 , Â§916), Congress directed DOD to undertake an "independent assessment of the national security implications of continuing to use foreign component and propulsion systems for the launch vehicles under the evolved expendable launch vehicle program." None of these concerns, however, led the Air Force to change its EELV acquisition strategy or to seek a change in legislation governing that strategy. After Russian incursions in Ukraine triggered U.S. sanctions in 2014, Russian backlash against those sanctions heightened alarm over the potential vulnerability of the EELV program and catalyzed the desire for change. In March 2014, the United States imposed sanctions on various Russian entities and persons, including Deputy Prime Minister Dimitry Rogozin, the official overseeing export licenses for the RD-180 rocket engine. In retaliation, Rogozin announced that "we can no longer deliver these engines to the United States unless we receive guarantees that our engines are used only for launching civilian payloads." Precise details of what Rogozin meant, and whether any changes would be implemented, were unclear. Many observers in the United States were increasingly concerned, however, that Russia could suddenly ban all exports of the engine to the United States, or ban exports for military use to some degree. To many outside of the Air Force and ULA, that uncertainty raised serious questions about the longer-term viability of the EELV program, and pointed to a need to completely shed U.S. reliance on the RD-180 as soon as practicable. Congress has since taken steps in each of the past several defense authorization bills (described below) to end this reliance and develop an alternative, domestic-produced U.S. main engine. Although the Air Force committed in principle to this ultimate outcome, some in Congress questioned if Air Force efforts were proceeding at an acceptable pace. As the Air Force pursues the congressional mandates to eliminate dependence on the RD-180 engine and continue to transition to a truly competitive launch market, it foresees major challenges. These include ULA's recent retirement of the Delta IV Medium in August 2019, the fact that SpaceX is currently the only other space launch provider awarded NSS mission requirements, and restrictions on acquisition of the RD-180 engine during this interim period that affect the Atlas V launch schedules. Legislative and Industry Options to Replace the RD-180 In spring 2014, DOD formed a commission to bring together various experts to examine the risks, costs, and options for dealing with the potential loss of the Russian RD-180 rocket engine in the EELV program. The 2014 Mitchell Commission recommended accelerating purchases of the RD-180 under the existing licensing agreement to preserve the EELV Phase 1 block-buy schedule and to facilitate competition in Phases 1A and Phase 2. The commission did not recommend coproducing the RD-180 in the United States, but instead recommended spending $141 million to begin development of a new U.S. liquid rocket engine to be available by 2022, to coincide with the end of Phase 2 in the EELV acquisition strategy. Congress has remained supportive of sustaining current space access capabilities while working toward developing a U.S.-made main rocket engine to replace the RD-180. The FY2015 NDAA permitted ULA to use RD-180 Russian engines purchased before Russia's intervention in Ukraine for continued national security space launch missions if the Secretary of Defense determined it was in the national security interest of the United States to do so. The FY2016 NDAA increased this number to nine RD-180s in order to help maintain competitors in the NSS launch market for a longer period, while the market transitions away from the RD-180 and toward a new domestic-produced rocket engine. The FY2017 NDAA increased the number of the Russian RD-180 rocket engines authorized to be used to a total of 18 rocket engines, beginning with the enactment of the FY2017 NDAA and ending on December 31, 2022. The defense bills since the FY2017 NDAA have not amended the total number of Russian RD-180 rocket engines authorized to be used. The NSSL Program Today The Air Force identified four main priorities in NSSL: mission success, innovative mission assurance, transitioning to new launch vehicles, and assured access for future space architectures. DOD expects to achieve cost saving through acquisitions and operability improvements that consist of the use of common components and infrastructure, standard payload interfaces, standardized launch pads, and reducing on-pad processing. To improve acquisitions, the program offers block buys of launch vehicles and competition between certified providers. The competitions are accomplished through two contract vehicles: Launch Service Agreements (LSA) and Launch Service Procurement (LSP) awards: Launch Service Agreement (LSA) awards are a set of three Air Force RDT&E awards intended to facilitate the development of three domestic launch system prototypes. DOD awarded LSA's to ULA, Northrop Grumman, and Blue Origin in October 2018. Launch Service Procurement (LSP) is an ongoing procurement competition that is currently in Phase 2. The second phase is a 5-year procurement of approximately 34 launches starting in 2022. The Air Force plans to select two space launch providers in 2020. United Launch Alliance, Northrop Grumman, SpaceX, and Blue Origin have submitted bids for phase two, with each company proposing their rocket designs: Vulcan, OmegA, Falcon, and New Glenn, respectively. The two companies selected will share the NSSL notional manifest for the next five years. Phase 1 and Phase 1A awards were made to ULA and SpaceX. DOD has identified 18 active contracts for the NSSL program with obligations awarded to six companies (see Figure 1 ). ULA and SpaceX are currently the only space launch providers certified to launch NSS payloads into orbit. The main focus for ULA is on developing a next-generation launch vehicle called the Vulcan. In July 2014, ULA signed commercial contracts with multiple U.S. liquid rocket engine manufacturing companies to investigate next-generation engine concepts. ULA selected Blue Origin (Kent, WA) BE-4 engine to power its Vulcan launch vehicle. Conclusion Although there are important differences in how to achieve it, widespread support appears to exist across the space community and within Congress for the NSS requirement for robust competition and assured access to space. The recurring challenge since the start of the NSSL program has been how best to pursue this requirement while driving down costs through competition and ensuring launch reliability and performance. The Air Force decision of down-selecting no more than two launch providers and award two separate Launch Service Procurement (LSP) contracts in the summer of 2020 is not without potential implications and could have second- and third-order effects. Congress may consider the following: Directing the Air Force to provide a report on the cost-benefit analysis of selecting more than two launch providers. Drafting legislative in the NDAA for FY2021 authorizing additional funds that allows the Air Force to diversify its launch provider options by continuing to provide development funds through LSA awards to launch companies not selected for LSP contracts in Phase 2. Directing the Air Force to provide a report on the cost saving and associated risk using both reusable and expendable launch vehicles for future solicitations. Lastly, efforts to transition away from the RD-180 to a domestic U.S. alternative engine or launch vehicle are not without technical, program, or schedule risks. Even with a smooth, on-schedule transition away from the RD-180 to an alternative engine or launch vehicle, the performance and reliability record achieved with the RD-180 to date would likely not be replicated until well beyond 2030 because the RD-180 has approximately 81 consecutive successful civil, commercial, and NSS launches since 2000. Summary:	null	96	31,435	31,437	31,437	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The National Security Space Launch (NSSL) program aims to acquire launch services and ensure continued access to space for critical national security missions. The U.S. Air Force implemented the original program in 1995âEvolved Expendable Launch Vehicle (EELV)âand awarded four companies contracts to design a cost-effective launch vehicle system. The DOD acquisition strategy was to select one company and ensure that NSS launches were affordable and reliable. The EELV effort was prompted by significant increases in launch costs, procurement concerns, and the lack of competition among U.S. companies. A major challenge and long-standing undercurrent of concern over U.S. reliance on a Russian rocket engine (RD-180), used on one of the primary national security rockets for critical national security space launches, was exacerbated by the Russian backlash over the 2014 U.S. sanctions against its actions in Ukraine. Moreover, significant overall NSSL program cost increases and unresolved questions over individual launch costs, along with legal challenges to the Air Force contract awards by space launch companies, prompted legislative action. In the John S. McCain National Defense Authorization Act (NDAA) for FY2019, Congress renamed the EELV to the NSSL program to reflect a wider mission that would consider both reusable and expendable launch vehicles. The origins of the NSSL program date back to 1995, after years of concerns within the Air Force and space launch community over increasing cost and decreasing confidence in the continued reliability of national access to space. The purpose of EELV was to provide the United States affordable, reliable, and assured access to space with two families of space launch vehicles. Initially only two companies were in competition: Boeing produced the Delta IV launch vehicle, and Lockheed Martin developed the Atlas V. Overall, the program provided critical space lift capability to support DOD and intelligence community satellites, together known as National Security Space (NSS) missions. The EELV program evolved modestly in response to changing circumstances, and the Air Force approved an EELV acquisition strategy in November 2011, further revising it in 2013. That strategy was designed to (1) sustain two major independent rocket-powered launch vehicle families to reduce the chance of launch interruptions and to ensure reliable access to space; (2) license and stockpile the Russian-made RD-180 heavy-lift rocket engine, a critical component of the Atlas V; (3) pursue a block-buy commitment to a number of launches through the end of the decade to reduce launch costs; and (4) increase competition to reduce overall launch costs. The Air Force and others viewed the overall EELV acquisition strategy as having successfully reduced launch costs while demonstrating highly reliable access to space for DOD and the intelligence community. Others in Congress and elsewhere, however, argued that the program remained far too costly and was not as competitive as it should be. The NSSL program is managed by the Launch Enterprise Systems Directorate of the Space and Missile Systems Center, Los Angeles Air Force Base (El Segundo, CA). The NSSL program consists of four launch vehicles: Atlas V and Delta IV Heavy (both provided by United Launch Alliance [ULA] of Denver, CO) and Falcon 9 and Falcon Heavy (both provided by Space Exploration Technologies Corporation [SpaceX] of Hawthorne, CA). NSS launches support the Air Force, Navy, and National Reconnaissance Office (NRO). More specifically, the Atlas V has launched commercial, civil, and NSS satellites into orbit, including commercial and military communications satellites, lunar and other planetary orbiters and probes, earth observation, military research, and weather satellites, missile warning and NRO reconnaissance satellites, a tracking and data relay satellite, and the X-37B space plane (a military orbital test vehicle). The Delta IV has launched commercial and military communications and weather satellites, and missile warning and NRO satellites. The Atlas V and Delta IV Heavy launch vehicles are produced by ULA, which was formed in 2006 as a joint venture of The Boeing Company (of Chicago, IL) and Lockheed Martin (of Bethesda, MD). In addition to the launch vehicles themselves, the NSSL program consists of an extensive array of support capabilities and infrastructure to permit safe operations of U.S. launch ranges. ULA operates five space launch complexes, two at Cape Canaveral Air Force Station, FL (Space Launch Complex-37 and Space Launch Complex-41), and three at Vandenberg Air Force Base, CA (Space Launch Complex-2, Space Launch Complex-3F, and Space Launch Complex-6). A large number of key suppliers for ULA are spread throughout 46 states. DOD certified SpaceX to compete for NSS launches in 2015. The Falcon 9 flew its first NSSL mission on December 23, 2018, which delivered the Global Positioning System (GPS) III to orbit. SpaceX developed a more capable launch capability in the Falcon Heavy, which DOD certified in June 2018 and later awarded NSS missions under Phase 1A of the NSSL program. SpaceX maintains three launch sites, one at Cape Canaveral Air Force Station, FL (Space Launch Complex 40); one at Kennedy Space Center (Launch Complex 39A); and one at Vandenberg Air Force Base, CA (Space Launch Complex 4E). On October 10, 2018, the Air Force awarded three Launch Service Agreement (LSA) Other Transaction Authority (OTA) agreements to space launch companies. The LSA OTA agreements are "public-private partnerships [that] leverage industry's commercial launch solutions to ensure those systems meet NSS requirements." They also "facilitate development of three NSSL launch system prototypes and maturing those launch systems prior to selecting two NSS launch service providers for launch service procurements beginning in FY2020." The Air Force released request for proposals (RFP) in May 2019 for Phase 2 of the NSSL program, with plans to award two separate Launch Service Procurement (LSP) contracts in the summer of 2020. The selected companies will be responsible for launching national security satellites through 2027. However, the Air Force acquisition strategy of down-selecting no more than two launch providers may mitigate short-term risk but could have second- and third-order effects for resiliency in the future. Congress may consider whether the strategy's cost-benefit analysis warrants further research. Should no more than two launch providers be chosen for LSP contracts in Phase 2, the companies not selected would lose the LSA funds received from the Air Force and could potentially be faced with (1) the choice of abandoning NSSL development to focus on competing in the commercial launch sector or (2) investing vast company reserves to continue development on its own. Furthermore, DOD investment in only two launch providers could mean fewer options for an increasingly diverse range of national space security missions and possibly limit competition, once again, in the launch market. Evolution of the EELV 1990s-2011 By the early 1990s, the U.S. space industrial base supported the production of a number of launch vehicles (i.e., Titan II, Delta II, Atlas I/II/IIAS, and Titan IV) and their associated infrastructure. Although launch costs were increasing and operational and procurement deficiencies were noted by many decisionmakers, no clear consensus formed over how best to proceed. Congress took the initiative in the National Defense Authorization Act for Fiscal Year 1994 (NDAA; P.L. 103-160 , Â§213) by directing DOD to develop a Space Launch Modernization Plan (SLMP) that would "establish and clearly define priorities, goals, and milestones regarding modernization of space launch capabilities for the Department of Defense or, if appropriate, for the Government as a whole." The recommendations of the SLMP led DOD to implement the EELV program as the preferred alternative. The primary objective of the EELV program was to reduce costs by 25%. The program also sought to ensure 98% launch vehicle design reliability and to standardize EELV system launch pads and the interface between satellites and their launch vehicles. Congress supported these recommendations through the FY1995 NDAA ( P.L. 103-337 , Â§211), directing DOD to develop an integrated space launch vehicle strategy to replace or consolidate the then-current fleet of medium and heavy launch vehicles and to devise a plan to develop new or upgraded expendable launch vehicles. Congress recommended spending $30 million for a competitive reusable rocket technology program and $60 million for expendable launch vehicle development and acquisition. The original EELV acquisition strategy, initiated in 1994, called for a competitive down-select to a single launch provider and development of a system that could handle the entire NSS launch manifest. In 1995, the Air Force selected four launch providers for the initial competition: Lockheed Martin, Boeing, McDonnell Douglas, and Alliant Techsystems. After the first round of competition, the Air Force selected Lockheed Martin and McDonnell Douglas to continue. When Boeing acquired McDonnell Douglas in 1997, Boeing took over the contract to develop an EELV. Soon thereafter, however, the Air Force revised the EELV acquisition strategy, concluding that there was now a sufficient space launch market to sustain two EELV providers. Throughout the acquisition process, DOD maintained that competition between Lockheed Martin and Boeing was essential. At the time, the Government Accountability Office (GAO) reported that sufficient growth in the commercial launch business would sustain both companies, a premise that, in turn, would lead to lower launch prices for the government. But "the robust commercial market upon which DOD based its acquisition strategy of maintaining two launch companies [throughout the life-cycle of the program] never materialized, and estimated prices for future contracts, along with total program costs, increased." Retaining two launch providers, however, did provide DOD with some confidence in its ability to maintain "assured access to space." This confidence soon collapsed, when in the late 1990s, the United States suffered six space launch failures in less than a year. These failures included the loss of three national security satellites in 1998-1999, at a cost of over $3 billion. One, a critical national security communications satellite (MILSTARâMilitary Strategic and Tactical Relay), was lost on a failed Titan IV launch in 1999. That satellite capability was not replaced until 2010 with an AEHF (Advanced Extremely High Frequency) satellite, which experienced substantial acquisition challenges and frequent changes in both design and requirements. The other two losses were an NRO reconnaissance satellite and a DSP (Defense Support Program) satellite. In addition to the cost, schedule, and operational impacts of these lost missions, including a classified national security loss in coverage with MILSTAR, these failures significantly influenced the transition to the EELV program, which had an initial goal to make national security space launches more affordable and reliable. President Clinton directed a review of these failures and sought recommendations for any necessary changes. The subsequent Broad Area Review (BAR) essentially concluded that the U.S. government should no longer rely on commercial launch suppliers alone to provide confidence and reliability in the EELV program. Instead, the BAR recommended more contractor and government oversight through increasing the number of independent reviews, pursuing performance guarantees from the launch providers, and greater government involvement in the mission assurance process. Although these additional oversight activities eventually proved to significantly increase EELV costs, they also eventually led to notable improvements in launch successes. The early 2000s saw considerable turmoil within the Air Force space community and among the EELV launch service providers due to competition in the shrinking space launch industrial base, cost increases, and the growing need for reliable access to space. During this time, the poor business prospects in the space launch market drove Lockheed and Boeing to consider leaving the market altogether. Therefore, to protect its objective of assured access to space, the U.S. government began to shoulder much of the EELV program's fixed costs. To further protect the United States' ability to deliver NSS satellites into orbit, the George W. Bush Administration conducted a number of internal reviews that culminated in the 2004 National Security Policy Directive (NSPD)-40. This directive established the requirement for "assured access to space" and obliged DOD to fund the annual fixed launch costs for both Lockheed and Boeing until such time as DOD could certify that assured access to space could be maintained without two launch providers. DOD thus revised its EELV acquisition strategy because of the collapse of the commercial launch market and the ongoing erosion of the space industrial base. GAO wrote that "in acknowledging the government's role as the primary EELV customer, the new strategy maintained assured access to space by funding two product lines of launch vehicles." In 2006, The Boeing Company and Lockheed Martin announced plans to consolidate their launch operations into a joint ventureâULA. The companies argued that by combining their resources, infrastructure, expertise, and capabilities, they could assure access to space at lower cost. DOD believed that having two launch vehicle families (Atlas V and Delta IV) under one entity (i.e., ULA) provided significant benefits that outweighed the loss of competition. In October 2006, the Federal Trade Commission granted ULA antitrust clearance allowing the new company to form on December 1, 2006. As a result, "unparalleled EELV mission success" ensued, and the tradeoff over increased costs and reduced competition outside ULA was largely deemed acceptable. 2011-Current Status Since 2006, the Air Force has procured space launches from ULA on a sole-source basis. The former EELV program focused primarily on mission successânot cost control. GAO reported, however, that by 2010 "DOD officials predicted EELV program costs would increase at an unsustainable rate" due to possible instabilities in the launch industrial base and the inefficient buying practice of purchasing one launch vehicle at a time. In 2009, SpaceX, a new entrant to the space launch industrial base, became the first private company to successfully develop a liquid fuel rocket that delivered a commercial satellite to orbit. However, SpaceX was not certified to compete for national security missions until 2005. In response, DOD recognized a need to again reorganize the way it acquired launch services. Additional studies and internal reviews evaluated alternatives to the EELV business model, which in turn led to a new EELV acquisition strategy adopted in November 2011. The new acquisition strategy advocated a steady launch vehicle production rate. This production rate was designed to provide economic benefits to the government through larger buys, or block-buys, of launch vehicles, providing a predictable production schedule to stabilize the space launch industrial base. The new EELV acquisition strategy also announced the government's intent to renew competition in the program. In addition to revising its acquisition strategy, DOD undertook significant efforts to obtain greater insight into ULA program costs in advance of contract negotiations. In May 2011, DOD solicited a Request for Information to prospective launch providers. In March 2012, DOD issued a sole-source solicitation for the block-buy to ULA, and in April 2012, the EELV program incurred a critical Nunn-McCurdy cost breach. In December 2013, DOD followed through on its new EELV strategy, signing a contract modification with ULA committing the government to buy 35 launch vehicle booster cores over a five-year period, along with the associated infrastructure capability to launch them. DOD viewed this contract modification as a significant effort on its part to negotiate better launch prices through improved knowledge of ULA contractor costs. DOD officials expected the new contract to realize significant savings, primarily through stable unit pricing for all launch vehicles. However, some in Congress, and some analysts outside government, strongly disputed the DOD estimates of cost savings. DOD announced that it would add up to 14 additional NSS launches to broader competition. However, in the FY2015 budget request, the Air Force announced that the number of EELV launches open to broader competition through FY2017 would be reduced from 14 to 7. Some Members of Congress, and SpaceX officials, raised questions about how many launches would ultimately be openly competed. Perhaps resulting from turmoil associated with the Nunn-McCurdy cost breach, as well as the perceived instabilities mentioned above, the EELV acquisition strategy proceeded to a three-phased approach: Phase 1 (FY2013-FY2019) would consist of the sole-source block-buy awarded to ULA to procure up to 36 cores and to provide 7 years of NSS launch infrastructure capability. Phase 1A (FY2015-FY2017) emerged as a modification to Phase 1 that would consist of opening up competition for NSS launches to new space launch entrants (such as SpaceX). The Air Force said it could award up to 14 cores to a new entrant over 3 years, if a new entrant became certified. Phase 2 (FY2018-FY2022) envisioned full competition among all launch service providers. The operational requirements, budget, and potential for competition are currently being worked on. Phase 3 (FY2023-FY2030) envisioned full competition with the award of any or all required launch services to any certified provider. The Air Force's strategy appeared to fulfill the mandates to maintain assured access to space and introduce competition into the space launch market. To date, the NSSL program has launched more than 70 successful missions in support of the Air Force, the National Reconnaissance Office, and the U.S. Navy. ULA's Delta IV and Atlas V launch vehicles (which are older than the NNSL program) have performed over 90 consecutive successful missions, whereas SpaceX has performed five successful NSS launches. Factors That Complicated EELV Acquisition Strategy Several interrelated factors created uncertainty over the Air Force's ability to continue with the three-phased EELV acquisition strategy. These included ongoing concerns over program and launch costs, U.S. national security vulnerability from dependence on a Russian component in the EELV program (the RD-180 main engine), legal challenges to the acquisition strategy, and legislation that could change the EELV program. Cost Growth in the EELV In March 2012, the EELV program reported two critical Nunn-McCurdy unit cost breaches, which resulted in a reassessment of the program. The cost of the newly restructured program was estimated by GAO in March 2013 at $69.6 billion. This amount represented an increase of $34.6 billion, or about 100%, over the program's estimated cost of $35 billion from a year earlier. GAO identified several causes for this cost growth, including an extension of the program's life cycle from 2020 to 2030, an increase of the planned number of launch vehicles to be procured from 91 to 150 (an increase of 59%), the inherently unstable nature of demand for launch services, and instability in the industrial base. These causes related to changes in the scope of the program and reflected the industrial-base conditions under which the program was being undertaken; they did not appear to imply poor performance by the Air Force or the industry in executing the program. Even so, the overall increase in estimated program costs complicated the Air Force's challenge in funding the program within available resources without reducing funding for other program priorities. It also contributed to focusing attention on modifying their EELV acquisition strategy. In addition, the costs of individual launches themselves came under renewed scrutiny. SpaceX and others asserted that the launch costs charged by ULA were significantly higher than what SpaceX would charge the U.S. government once it was certified by the Air Force to conduct NSS launches. Part of the challenge in verifying these claims, however, is that much of the detailed cost data are proprietary, not readily comparable, and some are speculative to the extent that there is little empirical data on which those costs are provided. Although the Air Force, GAO, ULA, and SpaceX have provided some launch cost data, it is not apparent the data are directly comparable or are calculated using the same cost model assumptions. In addition, because SpaceX has limited data directly related to NSS launches, its cost figures are not likely based on a long history of actual cost, performance, and reliability. Thus, the issue of reliable and consistent cost data for comparative purposes has been a source of frustration for many in Congress. Reliance on the Russian RD-180 Main Engine The original impetus for licensing the Russian RD-180 as the main engine for the Atlas V launch vehicle grew out of concerns associated with the 1991 collapse of the Soviet Union. At the time, the CIA and others expressed serious concern about the potential export and proliferation of Russian scientific and missile expertise to countries hostile to U.S. interests. These concerns in turn spurred a U.S.-Russian partnership to acquire some of Russia's heavy lift rocket engine capabilities, thus expanding upon existing Cold War civil space cooperation. Initially, this took the form of a license agreement between Energomash NPO and RD Amross (of Palm Beach, FL) for the coproduction of the RD-180 engine as part of the EELV acquisition strategy. This later changed in an acquisition revision to simply purchase and stockpile roughly two years' worth of the engines for the Atlas V, an approach that was then viewed as highly cost-competitive. The existing license agreement for purchasing RD-180 engines extends to 2022. In subsequent years, some Members of Congress and policy experts occasionally expressed concern over the potential vulnerability of the EELV program based on reliance on a single critical Russian component. For instance, the FY2005 defense authorization act ( P.L. 108-375 , Â§912) directed DOD to examine future space launch requirements. The resulting 2006 RAND study concluded that "the use of the Russian-manufactured RD-180 engines in the Atlas V common core is a major policy issue that must be addressed in the near term." Similar concern was noted by GAO in 2011: "the EELV program is dependent on Russian RD-180 engines for its Atlas line of launch vehicles, which according to the Launch Enterprise Transformation Study, is a significant concern for policymakers." In the FY2013 defense authorization act ( P.L. 112-239 , Â§916), Congress directed DOD to undertake an "independent assessment of the national security implications of continuing to use foreign component and propulsion systems for the launch vehicles under the evolved expendable launch vehicle program." None of these concerns, however, led the Air Force to change its EELV acquisition strategy or to seek a change in legislation governing that strategy. After Russian incursions in Ukraine triggered U.S. sanctions in 2014, Russian backlash against those sanctions heightened alarm over the potential vulnerability of the EELV program and catalyzed the desire for change. In March 2014, the United States imposed sanctions on various Russian entities and persons, including Deputy Prime Minister Dimitry Rogozin, the official overseeing export licenses for the RD-180 rocket engine. In retaliation, Rogozin announced that "we can no longer deliver these engines to the United States unless we receive guarantees that our engines are used only for launching civilian payloads." Precise details of what Rogozin meant, and whether any changes would be implemented, were unclear. Many observers in the United States were increasingly concerned, however, that Russia could suddenly ban all exports of the engine to the United States, or ban exports for military use to some degree. To many outside of the Air Force and ULA, that uncertainty raised serious questions about the longer-term viability of the EELV program, and pointed to a need to completely shed U.S. reliance on the RD-180 as soon as practicable. Congress has since taken steps in each of the past several defense authorization bills (described below) to end this reliance and develop an alternative, domestic-produced U.S. main engine. Although the Air Force committed in principle to this ultimate outcome, some in Congress questioned if Air Force efforts were proceeding at an acceptable pace. As the Air Force pursues the congressional mandates to eliminate dependence on the RD-180 engine and continue to transition to a truly competitive launch market, it foresees major challenges. These include ULA's recent retirement of the Delta IV Medium in August 2019, the fact that SpaceX is currently the only other space launch provider awarded NSS mission requirements, and restrictions on acquisition of the RD-180 engine during this interim period that affect the Atlas V launch schedules. Legislative and Industry Options to Replace the RD-180 In spring 2014, DOD formed a commission to bring together various experts to examine the risks, costs, and options for dealing with the potential loss of the Russian RD-180 rocket engine in the EELV program. The 2014 Mitchell Commission recommended accelerating purchases of the RD-180 under the existing licensing agreement to preserve the EELV Phase 1 block-buy schedule and to facilitate competition in Phases 1A and Phase 2. The commission did not recommend coproducing the RD-180 in the United States, but instead recommended spending $141 million to begin development of a new U.S. liquid rocket engine to be available by 2022, to coincide with the end of Phase 2 in the EELV acquisition strategy. Congress has remained supportive of sustaining current space access capabilities while working toward developing a U.S.-made main rocket engine to replace the RD-180. The FY2015 NDAA permitted ULA to use RD-180 Russian engines purchased before Russia's intervention in Ukraine for continued national security space launch missions if the Secretary of Defense determined it was in the national security interest of the United States to do so. The FY2016 NDAA increased this number to nine RD-180s in order to help maintain competitors in the NSS launch market for a longer period, while the market transitions away from the RD-180 and toward a new domestic-produced rocket engine. The FY2017 NDAA increased the number of the Russian RD-180 rocket engines authorized to be used to a total of 18 rocket engines, beginning with the enactment of the FY2017 NDAA and ending on December 31, 2022. The defense bills since the FY2017 NDAA have not amended the total number of Russian RD-180 rocket engines authorized to be used. The NSSL Program Today The Air Force identified four main priorities in NSSL: mission success, innovative mission assurance, transitioning to new launch vehicles, and assured access for future space architectures. DOD expects to achieve cost saving through acquisitions and operability improvements that consist of the use of common components and infrastructure, standard payload interfaces, standardized launch pads, and reducing on-pad processing. To improve acquisitions, the program offers block buys of launch vehicles and competition between certified providers. The competitions are accomplished through two contract vehicles: Launch Service Agreements (LSA) and Launch Service Procurement (LSP) awards: Launch Service Agreement (LSA) awards are a set of three Air Force RDT&E awards intended to facilitate the development of three domestic launch system prototypes. DOD awarded LSA's to ULA, Northrop Grumman, and Blue Origin in October 2018. Launch Service Procurement (LSP) is an ongoing procurement competition that is currently in Phase 2. The second phase is a 5-year procurement of approximately 34 launches starting in 2022. The Air Force plans to select two space launch providers in 2020. United Launch Alliance, Northrop Grumman, SpaceX, and Blue Origin have submitted bids for phase two, with each company proposing their rocket designs: Vulcan, OmegA, Falcon, and New Glenn, respectively. The two companies selected will share the NSSL notional manifest for the next five years. Phase 1 and Phase 1A awards were made to ULA and SpaceX. DOD has identified 18 active contracts for the NSSL program with obligations awarded to six companies (see Figure 1 ). ULA and SpaceX are currently the only space launch providers certified to launch NSS payloads into orbit. The main focus for ULA is on developing a next-generation launch vehicle called the Vulcan. In July 2014, ULA signed commercial contracts with multiple U.S. liquid rocket engine manufacturing companies to investigate next-generation engine concepts. ULA selected Blue Origin (Kent, WA) BE-4 engine to power its Vulcan launch vehicle. Conclusion Although there are important differences in how to achieve it, widespread support appears to exist across the space community and within Congress for the NSS requirement for robust competition and assured access to space. The recurring challenge since the start of the NSSL program has been how best to pursue this requirement while driving down costs through competition and ensuring launch reliability and performance. The Air Force decision of down-selecting no more than two launch providers and award two separate Launch Service Procurement (LSP) contracts in the summer of 2020 is not without potential implications and could have second- and third-order effects. Congress may consider the following: Directing the Air Force to provide a report on the cost-benefit analysis of selecting more than two launch providers. Drafting legislative in the NDAA for FY2021 authorizing additional funds that allows the Air Force to diversify its launch provider options by continuing to provide development funds through LSA awards to launch companies not selected for LSP contracts in Phase 2. Directing the Air Force to provide a report on the cost saving and associated risk using both reusable and expendable launch vehicles for future solicitations. Lastly, efforts to transition away from the RD-180 to a domestic U.S. alternative engine or launch vehicle are not without technical, program, or schedule risks. Even with a smooth, on-schedule transition away from the RD-180 to an alternative engine or launch vehicle, the performance and reliability record achieved with the RD-180 to date would likely not be replicated until well beyond 2030 because the RD-180 has approximately 81 consecutive successful civil, commercial, and NSS launches since 2000.	Summary:	gov_report	1,024	null	66
crs_R45997	crs_R45997_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction This report describes the structure, activities, legislative history, and funding history of seven federally-chartered regional commissions and authorities: the Appalachian Regional Commission (ARC); the Delta Regional Authority (DRA); the Denali Commission; the Northern Border Regional Commission (NBRC); the Northern Great Plains Regional Authority (NGPRA); the Southeast Crescent Regional Commission (SCRC); and the Southwest Border Regional Commission (SBRC) ( Table A-1 ). The federal regional commissions are also functioning examples of place-based and intergovernmental approaches to economic development, which receive regular congressional interest. The federal regional commissions and authorities integrate federal and state economic development priorities alongside regional and local considerations ( Figure A-1 ). As federally-chartered agencies created by acts of Congress, the federal regional commissions and authorities depend on congressional appropriations for their activities and administration, and are subject to congressional oversight. Seven federal regional commissions and authorities were authorized by Congress to address instances of major economic distress in certain defined socio-economic regions, with all but one (Alaska's Denali Commission) being multi-state regions ( Figure B-1 ). The first such federal regional commission, the Appalachian Regional Commission, was founded in 1965. The other commissions and authorities may have roots in the intervening decades, but were not founded until 1998 (Denali), 2000 (Delta Regional Authority), and 2002 (the Northern Great Plains Regional Authority). The most recent commissionsâNorthern Border Regional Commission, Southeast Crescent Regional Commission, and Southwest Border Regional Commissionâwere authorized in 2008. Four of the seven entitiesâthe Appalachian Regional Commission, the Delta Regional Authority, the Denali Commission, and the Northern Border Regional Commissionâare currently active and receive regular annual appropriations. Certain strategic emphases and programs have evolved over time in each of the functioning federal regional commissions and authorities. However, their overarching missions to address economic distress have not changed, and their associated activities have broadly remained consistent to those goals as funding has allowed. In practice, the functioning federal regional commissions and authorities engage in their respective economic development efforts through multiple program areas, which may include, but are not limited to basic infrastructure; energy; ecology/environment and natural resources; workforce/labor; and business development. Appalachian Regional Commission The Appalachian Regional Commission was established in 1965 to address economic distress in the Appalachian region. The ARC's jurisdiction spans 420 counties in Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia ( Figure 1 ). The ARC was originally created to address severe economic disparities between Appalachia and that of the broader United States; recently, its mission has grown to include regional competitiveness in a global economic environment. Structure and Activities Commission Structure According to the authorizing legislation, the Appalachian Regional Development Act of 1965, as amended, the ARC is a federally-chartered, regional economic development entity led by a federal co-chair, whose term is open-ended, and the 13 participating state governors, of which one serves as the state co-chair for a term of "at least one year." The federal co-chair is appointed by the President with the advice and consent of the Senate. The authorizing act also allows for the appointment of federal and state alternates to the commission. The ARC is a federal-state partnership, with administrative costs shared equally by the federal government and member states, while economic development activities are funded by congressional appropriations. Regional Development Plan According to authorizing legislation and the ARC code, the ARC's programs abide by a Regional Development Plan (RDP), which includes documents prepared by the states and the commission. The RDP is comprised of the ARC's strategic plan, its bylaws, member state development plans, each participating state's annual strategy statement, the commission's annual program budget, and the commission's internal implementation and performance management guidelines. The RDP integrates local, state, and federal economic development priorities into a common regional agenda. Through state plans and annual work statements, states establish goals, priorities, and agendas for fulfilling them. State planning typically includes consulting with local development districts (LDDs), which are multicounty organizations that are associated with and financially supported by the ARC and advise on local priorities. There are 73 ARC-associated LDDs. They may be conduits for funding for other eligible organizations, and may also themselves be ARC grantees. State and local governments, governmental entities, and nonprofit organizations are eligible for ARC investments, including both federal- and also state-designated tribal entities. Notably, non-federally recognized, state-designated tribal entities are eligible to receive ARC funding, which is an exception to the general rarity of federal funds being available to non-federally recognized tribal entities. ARC's strategic plan is a five-year document, reviewed annually, and revised as necessary. The current strategic plan, adopted in November 2015, prioritizes five investment goals: 1. entrepreneurial and business development; 2. workforce development; 3. infrastructure development; 4. natural and cultural assets; and 5. leadership and community capacity. The ARC's investment activities are divided into 10 program areas: These program areas can be funded through five types of eligible activities: 1. business development and entrepreneurship, through grants to help create and retain jobs in the region, including through targeted loan funds; 2. education and training, for projects that "develop, support, or expand education and training programs"; 3. health care, through funding for "equipment and demonstration projects" and sometimes for facility construction and renovation, including hospital and community health services; 4. physical infrastructure, including funds for basic infrastructure services such as water and sewer facilities, as well as housing and telecommunications; and 5. leadership development and civic capacity, such as community-based strategic plans, training for local leaders, and organizational support. While most funds are used for economic development grants, approximately $50 million is reserved for the Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative. The POWER Initiative began in 2015 to provide economic development funding for addressing economic and labor dislocations caused by energy transition principally in coal communities in the Appalachian region. Distressed Counties The ARC is statutorily obligated to designate counties according to levels of economic distress. Distress designations influence funding priority and determine grant match requirements. Using an index-based classification system, the ARC compares each county within its jurisdiction with national averages based on three economic indicators: (1) three-year average unemployment rates; (2) per capita market income; and (3) poverty rates. These factors are calculated into a composite index value for each county, which are ranked and sorted into designated distress levels. Each distress level corresponds to a given county's ranking relative to that of the United States as a whole. These designations are defined as follows by the ARC, starting from "worst" distress: distressed counties, or those with values in the "worst" 10% of U.S. counties; at-risk , which rank between worst 10% and 25%; transitional , which rank between worst 25% and best 25%; competitive , which rank between "best" 25% and best 10%; and attainment , or those which rank in the best 10%. The designated level of distress is statutorily tied to allowable funding levels by the ARC (funding allowance), the balance of which must be met through grant matches from other funding sources (including potentially other federal funds) unless a waiver or special dispensation is permitted: distressed (80% funding allowance, 20% grant match); at-risk (70%); transitional (50%); competitive (30%); and attainment (0% funding allowance). Exceptions can be made to grant match thresholds. Attainment counties may be able to receive funding for projects where sub-county areas are considered to be at higher levels of distress, and/or in those cases where the inclusion of an attainment county in a multi-county project would benefit one or more non-attainment counties or areas. In addition, special allowances may reduce or discharge matches, and match requirements may be met with other federal funds. Legislative History Council of Appalachian Governors In 1960, the Alabama, Georgia, Kentucky, Maryland, North Carolina, Pennsylvania, Tennessee, Virginia, and West Virginia governors formed the Council of Appalachian Governors to highlight Appalachia's extended economic distress and to press for increased federal involvement. In 1963, President John F. Kennedy formed the President's Appalachian Regional Commission (PARC) and charged it with developing an economic development program for the region. PARC's report, issued in 1964, called for the creation of an independent agency to coordinate federal and state efforts to address infrastructure, natural resources, and human capital issues in the region. The PARC also included some Ohio counties as part of the Appalachian region. Appalachian Regional Development Act In 1965, President Lyndon Johnson signed the Appalachian Regional Development Act, which created the ARC to address the PARC's recommendations, and added counties in New York and Mississippi. The ARC was directed to administer or assist in the following initiatives: The creation of the Appalachian Development Highway System; Establishing "Demonstration Health Facilities" to fund health infrastructure; Land stabilization, conservation, and erosion control programs; Timber development organizations, for purposes of forest management; Mining area restoration, for rehabilitating and/or revitalizing mining sites; A water resources survey; Vocational education programs; and Sewage treatment infrastructure. Major Amendments to the ARC Before 2008 Appalachian Regional Development Act Amendments of 1975 In 1975, the ARC's authorizing legislation was amended to require that state governors themselves serve as the state representatives on the commission, overriding original statutory language in which governors were permitted to appoint designated representatives. The amendments also included provisions to expand public participation in ARC plans and programs. They also required states to consult with local development districts and local governments and authorized federal grants to the ARC to assist states in enhancing state development planning. Appalachian Regional Development Reform Act of 1998 Legislative reforms in 1998 introduced county-level designations of distress. The legislation organized county-level distress into three bands, from "worst" to "best": distressed counties; competitive counties; and attainment counties. The act imposed limitations on funding for economically strong counties: (1) "competitive," which could only accept ARC funding for 30% of project costs (with the 70% balance being subject to grant match requirements); and (2) "attainment," which were generally ineligible for funding, except through waivers or exceptions. In addition, the act withdrew the ARC's legislative mandate for certain programs, including the land stabilization, conservation, and erosion control program; the timber development program; the mining area restoration program; the water resource development and utilization survey; the Appalachian airport safety improvements program (a program added in 1971); the sewage treatment works program; and amendments to the Housing Act of 1954 from the original 1965 act. Appalachian Regional Development Act Amendments of 2002 Legislation in 2002 expanded the ARC's ability to support LDDs, introduced an emphasis on ecological issues, and provided for a greater coordinating role by the ARC in federal economic development activities. The amendments also provided new stipulations for the ARC's grant making, limiting the organization to funding 50% of project costs or 80% in designated distressed counties. The amendments also expanded the ARC's efforts in human capital development projects, such as through various vocational, entrepreneurial, and skill training initiatives. The Appalachian Regional Development Act Amendments of 2008 The Appalachian Regional Development Act Amendments of 2008 is the ARC's most recent substantive legislative development and reflects its current configuration. The amendments included: 1. various limitations on project funding amounts and commission contributions; 2. the establishment of an economic and energy development initiative; 3. the expansion of county designations to include an "at-risk" designation; and 4. the expansion of the number of counties under the ARC's jurisdiction. The 2008 amendments introduced funding limitations for ARC grant activities as a whole, as well as to specific programs. According to the 2008 legislation, "the amount of the grant shall not exceed 50 percent of administrative expenses." However, at the ARC's discretion, an LDD that included a "distressed" county in its service area could provide for 75% of administrative expenses of a relevant project, or 70% for "at-risk" counties. Eligible activities could only be funded by the ARC at a maximum of 50% of the project cost, or 80% for distressed counties and 70% for "at-risk" counties. The act introduced special project categories, including (1) demonstration health projects; (2) assistance for proposed low- and middle-income housing projects; (3) the telecommunications and technology initiative; (4) the entrepreneurship initiative; and (5) the regional skills partnership. Finally, the "economic and energy development initiative" provided for the ARC to fund activities supporting energy efficiency and renewable technologies. The legislation expanded distress designations to include an "at-risk" category, or counties "most at risk of becoming economically distressed." This raised the number of distress levels to five. The legislation also expanded ARC's service area. Ten counties in four states were added to the ARC, which represents the most recent expansion. Funding History The ARC is a federal-state partnership, with administrative costs shared equally by the federal government and states, while economic development activities are federally funded. The ARC is also the highest-funded of the federal regional commissions and authorities. Its funding ( Table 1 ) has increased 126% from approximately $73 million in FY2008 to $165 million in FY2019. The ARC's funding growth is attributable to incremental increases in appropriations along with an approximately $50 million increase in annual appropriated funds in FY2016 set aside to support the POWER Initiative. The POWER Initiative was part of a wider federal effort under the Obama Administration to support coal communities affected by the decline of the coal industry. The FY2018 White House budget proposed to shutter the ARC as well as the other federal regional commissions and authorities. Congress did not adopt these provisions from the President's budget, and continued to fund the ARC and other commissions. Delta Regional Authority The Delta Regional Authority was established in 2000 to address economic distress in the Mississippi River Delta region. The DRA aims to "improve regional economic opportunity by helping to create jobs, build communities, and improve the lives of the 10 million people" in 252 designated counties and parishes in Alabama, Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri, and Tennessee ( Figure 2 ). Overview of Structure and Activities Authority Structure Like the ARC, the DRA is a federal-state partnership that shares administrative expenses equally, while activities are federally funded. The DRA consists of a federal co-chair appointed by the President with the advice and consent of the Senate, and the eight state governors, of which one is state co-chair. The governors are permitted to appoint a designee to represent the state, who also generally serves as the state alternate. Entities that are eligible to apply for DRA funding include: 1. state and local governmentsÂ (state agencies, cities and counties/parishes); 2. public bodies; and 3. non-profit entities. These entities must apply for projects that operate in or are serving residents and communities within the 252 counties/parishes of the DRA's jurisdiction. DRA Strategic Planning Funding determinations are assessed according to the DRA's authorizing statute, its strategic plan, state priorities, and distress designation. The DRA strategic plan articulates the authority's high-level economic development priorities. The current strategic planâ Moving the Delta Forward , Delta Regional Development Plan IIIâwas released in April 2016 and is in effect through 2021. The strategic plan lists three primary goals: 1. workforce competitiveness, to "advance the productivity and economic competitiveness of the Delta workforce"; 2. strengthened infrastructure, to "strengthen the Delta's physical, digital, and capital connections to the global economy"; and 3. increased community capacity, to "facilitate local capacity building within Delta communities, organizations, businesses, and individuals." State development plans are required by statute every five years to coincide with the strategic plan, and reflect the economic development goals and priorities of member states and LDDs. The DRA funds projects through 44 LDDs, which are multicounty economic development organizations financially supported by the DRA and advise on local priorities. LDDs "provide technical assistance, application support and review, and other services" to the DRA and entities applying for funding. LDDs receive administrative fees paid from awarded DRA funds, which are calculated as 5% of the first $100,000 of an award, and 1% for all dollars above that amount. Distress Designations The DRA determines a county or parish as distressed on an annual basis through the following criteria: 1. an unemployment rate of 1% higher than the national average for the most recent 24-month period; and 2. a per capita income of 80% or less than the national per capita income. The DRA designates counties as either distressed or not, and distressed counties received priority funding from DRA grant making activities. By statute, the DRA directs at least 75% of funds to distressed counties; half of those funds must target transportation and basic infrastructure. As of FY2018, 234 of the DRA's 252 counties are considered distressed. States' Economic Development Assistance Program The principal investment tool used by the DRA is the States' Economic Development Assistance Program (SEDAP), which "provides direct investment into community-based and regional projects that address the DRA's congressionally mandated four funding priorities." The DRA's four funding priorities are: 1. (1) basic public infrastructure; 2. (2) transportation infrastructure; 3. (3) workforce development; and 4. (4) business development (emphasizing entrepreneurship). The DRA's SEDAP funding is made available to each state according to a four-factor, formula-derived allocation that balances geographic breadth, population size, and economic distress ( Table 2 ). The factors and their respective weights are calculated as follows: Equity Factor (equal funding among eight states), 50%; Distressed Population (DRA counties/parishes), 20%; Distressed County Area (DRA counties/parishes), 20%; and Population Factor (DRA counties/parishes), 10%. DRA investments are awarded from state allocations. SEDAP applications are accepted through LDDs, and projects are sorted into tiers of priority. While all projects must be associated with one of the DRA's four funding priorities, additional prioritization determines the rank order of awards, which include county-level distress designations; adherence to at least one of the federal priority eligibility criteria (see below); adherence to at least one of the DRA Regional Development Plan goals (from the strategic plan); and adherence to at least one of the state's DRA priorities. The federal priority eligibility criteria are as follows: The DRA is also mandated to expend 50% of its appropriated SEDAP dollars on basic public and transportation infrastructure projects, which lend additional weight to this particular criterion. Legislative History In 1988, the Rural Development, Agriculture, and Related Agencies Appropriations Act for FY1989 ( P.L. 100-460 ) appropriated $2 million and included language that authorized the creation of the Lower Mississippi Delta Development Commission. The LMDDC was a DRA predecessor tasked with studying economic issues in the Delta and developing a 10-year economic development plan. The LMDDC consisted of two commissioners appointed by the President as well as the governors of Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri, and Tennessee. The commission was chaired by then-Governor William J. Clinton of Arkansas, and the LMDDC released interim and final reports before completing its mandate in 1990. Later, in the White House, the Clinton Administration continued to show interest in an expanded federal role in Mississippi Delta regional economic development. Key Legislative Activity In 1994, Congress enacted the Lower Mississippi Delta Region Heritage Study Act, which built on the LMDDC's recommendations. In particular, the 1994 act saw the Department of the Interior conduct a study on key regional cultural, natural, and heritage sites and locations in the Mississippi Delta region. In 1999, the Delta Regional Authority Act of 1999 was introduced in the House ( H.R. 2911 ) and Senate ( S. 1622 ) to establish the DRA by amending the Consolidated Farm and Rural Development Act. Neither bill was enacted, but they established the structure and mission later incorporated into the DRA. 106th Congress In 2000, the Consolidated Appropriations Act for FY2001 ( P.L. 106-554 ) included language authorizing the creation of the DRA based on the seven participating states of the LMDDC, with the addition of Alabama and 16 of its counties. 107th Congress The Farm Security and Rural Investment Act of 2002, or 2002 farm bill ( P.L. 107-171 ), amended voting procedures for DRA states, provided new funds for Delta regional projects, and added four additional Alabama counties to the DRA. 110th Congress The Food, Conservation, and Energy Act of 2008, or 2008 farm bill ( P.L. 110-234 ) reauthorized the DRA from FY2008 through FY2012 and expanded it to include Beauregard, Bienville, Cameron, Claiborne, DeSoto, Jefferson Davis, Red River, St. Mary, Vermillion, and Webster Parishes in Louisiana; and Jasper and Smith Counties in Mississippi. 113th Congress The Agricultural Act of 2014, or 2014 farm bill ( P.L. 113-79 ) reauthorized the DRA through FY2018. 115th Congress The Agriculture Improvement Act of 2018, or 2018 farm bill ( P.L. 115-334 ), reauthorized the DRA from FY2019 to FY2023, and emphasized Alabama's position as a "full member" of the DRA. Funding History Under "farm bill" legislation, the DRA has consistently received funding authorizations of $30 million annually since it was first authorized. However, appropriations have fluctuated over the years. Although the DRA was appropriated $20 million in the same legislation authorizing its creation, that amount was halved in 2002, and continued a downward trend through its funding nadir of $5 million in FY2004. However, funding had increased by FY2006 to $12 million. Since FY2008, DRA's annual appropriations have increased from almost $12 million to the current level of $25 million ( Table 3 ). Denali Commission The Denali Commission was established in 1998 to support rural economic development in Alaska. It is "designed to provide critical utilities, infrastructure, and economic support throughout Alaska." The Denali Commission is unique as a single-state commission, and in its reliance on federal funding for both administration and activities. Overview of Structure and Activities The commission's statutory mission includes providing workforce and other economic development assistance to distressed rural regions in Alaska. However, the commission no longer engages in substantial activities in general economic development or transportation, which were once core elements of the Denali Commission's activities. Its recent activities are principally limited to coastal infrastructure protection and energy infrastructure and fuel storage projects. Commission Structure The Denali Commission's structure is unique as the only commission with a single-state mandate. The commission is comprised of seven members (or a designated nominee), including the federal co-chair, appointed by the U.S. Secretary of Commerce; the Alaska governor, who is state co-chair (or his/her designated representative); the University of Alaska president; the Alaska Municipal League president; the Alaska Federation of Natives president; the Alaska State AFL-CIO president; and the Associated General Contractors of Alaska president. These structural novelties offer a different model compared to the organization typified by the ARC and broadly adopted by the other functioning federal regional commissions and authorities. For example, the federal co-chair's appointment by the Secretary of Commerce, and not the President with Senate confirmation, allows for a potentially more expeditious appointment of a federal co-chair. The Denali Commission is required by law to create an annual work plan, which solicits project proposals, guides activities, and informs a five-year strategic plan. The work plan is reviewed by the federal co-chair, the Secretary of Commerce, and the Office of Management and Budget, and is subject to a public comment period. The current FY2018-FY2022 strategic plan, released in October 2017, lists four strategic goals and objectives: (1) facilities management; (2) infrastructure protection from ecological change; (3) energy, including storage, production, heating, and electricity; and (4) innovation and collaboration. The commission's recent activities largely focus on energy and infrastructure protection. Distressed Areas The Denali Commission's authorizing statute obligates the Commission to address economic distress in rural areas of Alaska. As of 2018, the Commission utilizes two overlapping standards to assess distress: a "surrogate standard," adopted by the Commission in 2000, and an "expanded standard." These standards are applied to rural communities in Alaska and assessed by the Alaska Department of Labor and Workforce Development (DOL&WD), Research and Analysis Section. DOL&WD uses the most current population, employment, and earnings data available to identify Alaska communities and Census Designated Places considered "distressed." Appeals can be made to community distress determinations, but only through a demonstration that DOL&WD data or analysis was erroneous, invalid, or outdated. New information "must come from a verifiable source, and be robust and representative of the entire community and/or population." Appeals are accepted and adjudicated only for the same reporting year in question. Recent Activities The Denali Commission's scope is more constrained compared to the other federal regional commissions and authorities. The organization reports that due to funding constraints, the commission reduced its involvement in what might be considered traditional economic development and, instead, focused on rural fuel and energy infrastructure and coastal protection efforts. Since the Denali Commission's founding, bulk fuel safety and security, energy reliability and security, transportation system improvements, and healthcare projects have commanded the vast majority of Commission projects. Of these, only energy reliability and security and bulk fuel safety and security projects remain active and are still funded. Village infrastructure protectionâa program launched in 2015 to address community infrastructure threatened by erosion, flooding and permafrost degradationâis a program that is relatively new and still being funded. By contrast, most "traditional" economic development programs are no longer being funded, including in housing, workforce development, and general economic development activities. Legislative History 106th Congress In 1999, the Consolidated Appropriations Act, 2000 ( P.L. 106-113 ) authorized the commission to enter into contracts and cooperative agreements, award grants, and make payments "necessary to carry out the purposes of the commission." The act also established the federal co-chair's compensation schedule, prohibited using more than 5% of appropriated funds for administrative expenses, and established "demonstration health projects" as authorized activities and authorized the Department of Health and Human Services to make grants to the commission to that effect. 108th Congress The Consolidated Appropriations Act, 2004 ( P.L. 108-199 ) created an Economic Development Committee within the commission chaired by the Alaska Federation of Natives president, and included the Alaska Commissioner of Community and Economic Affairs, a representative of the Alaska Bankers Association, the chairman of the Alaska Permanent Fund, a representative from the Alaska Chamber of Commerce, and representatives from each region. 109th Congress In 2005, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, or SAFETEA-LU ( P.L. 109-59 ), established the Denali Access System Program among the commission's authorized activities. The program was part of its surface transportation efforts, which were active from 2005 through 2009. 112th Congress 2012's Moving Ahead for Progress in the 21 st Century Act, or MAP-21 ( P.L. 112-141 ), authorized the commission to accept funds from federal agencies, allowed it to accept gifts or donations of "service, property, or money" on behalf of the U.S. government, and included guidance regarding gifts. 114th Congress In 2016, the Water Infrastructure Improvements for the Nation Act, or the WIIN Act ( P.L. 114-322 ), reauthorized the Denali Commission through FY2021, and established a four-year term for the federal co-chair (with allowances for reappointment), but provided that other members were appointed for life. The act also allowed for the Secretary of Commerce to appoint an interim federal co-chair, and included clarifying language on the non-federal status of commission staff and ethical issues regarding conflicts of interest and disclosure. Funding History Under its authorizing statute, the Denali Commission received funding authorizations for $20 million for FY1999, and "such sums as necessary" (SSAN) for FY2000 through FY2003. Legislation passed in 2003 extended the commission's SSAN funding authorization through 2008. Its authorization lapsed after 2008; reauthorizing legislation was introduced in 2007, but was not enacted. The commission continued to receive annual appropriations for FY2009 and several years thereafter. In 2016, legislation was enacted reauthorizing the Denali Commission through FY2021 with a $15 million annual funding authorization ( Table 4 ). Northern Border Regional Commission The Northern Border Regional Commission (NBRC) was created by the Food, Conservation, and Energy Act of 2008, otherwise known as the 2008 farm bill. The act also created the Southeast Crescent Regional Commission (SCRC) and the Southwest Border Regional Commission (SBRC). All three commissions share common authorizing language modeled after the ARC. The NBRC is the only one of the three new commissions that has been both reauthorized and received progressively increasing annual appropriations since it was established in 2008. The NBRC was founded to alleviate economic distress in the northern border areas of Maine, New Hampshire, New York, and, as of 2018, the entire state of Vermont ( Figure 4 ). The stated mission of the NBRC is "to catalyze regional, collaborative, and transformative community economic development approaches that alleviate economic distress and position the region for economic growth." Eligible counties within the NBRC's jurisdiction may receive funding "for community and economic development" projects pursuant to regional, state, and local planning and priorities ( Table C-4 ). Overview of Structure and Activities The NBRC is led by a federal co-chair, appointed by the President with the advice and consent of the Senate, and four state governors, of which one is appointed state co-chair. There is no term limit for the federal co-chair. The state co-chair is limited to two consecutive terms, but may not serve a term of less than one year. Each of the four governors may appoint an alternate; each state also designates an NBRC program manager to handle the day-to-day operations of coordinating, reviewing, and recommending economic development projects to the full membership. While program funding depends on congressional appropriations, administrative costs are shared equally between the federal government and the four states of the NBRC. Through commission votes, applications are ranked by priority, and are approved in that order as grant funds allow. Program Areas All projects are required to address at least one of the NBRC's four authorized program areas and its five-year strategic plan. The NBRC's four program areas are: (1) economic and infrastructure development (EID); (2) comprehensive planning for states; (3) local development districts; and (4) the regional forest economy partnership. Economic and Infrastructure Development (EID) The NBRC's state EID investment program is the chief mechanism for investing in economic development programs in the participating states. The EID program prioritizes projects focusing on infrastructure, telecommunications, energy costs, business development, entrepreneurship, workforce development, leadership, and regional strategic planning. The EID program provides approximately $3.5 million to each state for such activities. Eligible applicants include public bodies, 501(c) organizations, Native American tribes, and the four state governments. EID projects may require matching funds of up to 50% depending on the level of distress. Comprehensive Planning The NBRC may also assist states in developing comprehensive economic and infrastructure development plans for their NBRC counties. These initiatives are undertaken in collaboration with LDDs, localities, institutions of higher education, and other relevant stakeholders. Local Development Districts (LDD) The NBRC uses 16 multicounty LDDs to advise on local priorities, identify opportunities, conduct outreach, and administer grants, from which the LDDs receive fees. LDDs receive fees according to a graduated schedule tied to total project funds. The rate is 5% for the first $100,000 awarded and 1% in excess of $100,000. Notably, this formula does not apply to Vermont-only projects. Vermont is the only state where grantees are not required to contract with an LDD for the administration of grants, though this requirement may be waived. Regional Forest Economy Partnership (RFEP) The RFEP is an NBRC program to address economic distress caused by the decline of the regional forest products industry. The program provides funding to rural communities for "economic diversity, independence, and innovation." The NBRC received $7 million in FY2018 and FY2019 to address the decline in the forest-based economies in the NBRC region. Strategic Plan The NBRC's activities are guided by a five-year strategic plan, which is developed through "extensive engagement with NBRC stakeholders" alongside "local, state, and regional economic development strategies already in place." The 2017-2021 strategic plan lists three goals: 1. modernizing infrastructure; 2. creating and sustaining jobs; and 3. anticipating and capitalizing on shifting economic and demographic trends. The strategic plan also lists five-year performance goals, which are: 5,000 jobs created or retained; 10,000 households and businesses with access to improved infrastructure; 1,000 businesses representing 5,000 employees benefit from NBRC investments; 7,500 workers provided with skills training; 250 communities and 1,000 leaders engaged in regional leadership, learning and/or innovation networks supported by the NBRC; and 3:1 NBRC investment leverage. The strategic plan also takes stock of various socioeconomic trends in the northern border region, including (1) population shifts; (2) distressed communities; and (3) changing workforce needs. Economic and Demographic Distress The NBRC is unique in that it is statutorily obligated to assess distress according to economic as well as demographic factors ( Table C-4 ). These designations are made and refined annually. The NBRC defines levels of "distress" for counties that "have high rates of poverty, unemployment, or outmigration" and "are the most severely and persistently economic distressed and underdeveloped." The NBRC is required to allocate 50% of its total appropriations to projects in distressed counties. The NBRC's county designations are as follows, in descending levels of distress: Distressed counties (80% maximum funding allowance); Transitional counties (50%); and Attainment (0%). Transitional counties are defined as counties that do not exhibit the same levels of economic and demographic distress as a distressed county, but suffer from "high rates of poverty, unemployment, or outmigration." Attainment counties are not allowed to be funded by the NBRC except for those projects that are located within an "isolated area of distress," or have been granted a waiver. Distress is calculated in tiers of primary and secondary distress categories and constituent factors: Primary Distress Categories 1. Percent of population below the poverty level 2. Unemployment rate 3. Percent change in population Secondary Distress Categories 4. Percent of population below the poverty level 5. Median household income 6. Percent of secondary and/or seasonal homes Each county is assessed by the primary and secondary distress categories and factors and compared to the figures for the United States as a whole. Designations of county distress are made by tallying those factors against the following criteria: Distressed counties are those with at least three factors from both primary and secondary distress categories and at least one from each category; Transitional counties are those with at least one factor from either category; and Attainment counties are those which show no measures of distress. Legislative History 110th Congress The NBRC was first proposed in the Northern Border Economic Development Commission Act of 2007 ( H.R. 1548 ), introduced on March 15, 2007. H.R. 1548 proposed the creation of a federally-chartered, multi-state economic development organizationâmodeled after the ARCâcovering designated northern border counties in Maine, New Hampshire, New York, and Vermont. The bill would have authorized the appropriation of $40 million per year for FY2008 through FY2012 ( H.R. 1548 ). The bill received regional co-sponsorship from Members of Congress representing areas in the northern border region. The NBRC was reintroduced in the Regional Economic and Infrastructure Development Act of 2007 ( H.R. 3246 ), which would have authorized the NBRC, the SCRC, and the SBRC, and reauthorized the DRA and the NGPRA (discussed in the next section) in a combined bill. H.R. 3246 won a broader range of support, which included 18 co-sponsors in addition to the original bill sponsor, and passed the House by a vote of 264-154 on October 4, 2007. Upon House passage, H.R. 3246 was referred to the Senate Committee on Environment and Public Works. The Senate incorporated authorizations for the establishment of the NBRC, SCRC, and the SBRC in the 2008 farm bill. The 2008 farm bill authorized annual appropriations of $30 million for FY2008 through FY2012 for all three new commissions. 115th Congress The only major changes to the NBRC since its creation were made in the Agriculture Improvement Act of 2018 ( P.L. 115-334 ), or the 2018 farm bill, which authorized the state capacity building grant program. In addition, the 2018 farm bill expanded the NBRC to include the following counties: Belknap and Cheshire counties in New Hampshire; Genesee, Greene, Livingston, Montgomery, Niagara, Oneida, Orleans, Rensselaer, Saratoga, Schenectady, Sullivan, Washington, Warren, Wayne, and Yates counties in New York; and Addison, Bennington, Chittenden, Orange, Rutland, Washington, Windham, and Windsor counties in Vermont, making it the only state entirely within the NBRC. Funding History Since its creation, the NBRC has received consistent authorizations of appropriations ( Table 5 ). The 2008 farm bill authorized the appropriation of $30 million for the NBRC for each of FY2008 through FY2013 ( P.L. 110-234 ); the same in the 2014 farm bill for each of FY2014 through FY2018 ( P.L. 113-79 ); and $33 million for each of FY2019 through FY2023 ( P.L. 115-334 ). Due to its statutory linkages to the SCRC and SBRC, all three commissions also share common authorizing legislation and identical funding authorizations. To date, the NBRC is the only commission of the three to receive substantial annual appropriations. Congress has funded the NBRC since FY2010 ( Table 5 ). The NBRC's appropriated funding level has increased from $5 million in FY2014, to $7.5 million in FY2016, $10 million in FY2017, $15 million in FY2018, and $20 million in FY2019. Northern Great Plains Regional Authority The Northern Great Plains Regional Authority was created by the 2002 farm bill. The NGPRA was created to address economic distress in Iowa, Minnesota, Missouri (other than counties included in the Delta Regional Authority), North Dakota, Nebraska, and South Dakota. The NGPRA appears to have been briefly active shortly after it was created, when it received its only annual appropriation from Congress. The NGPRA's funding authorization lapsed at the end of FY2018; it was not reauthorized. Structure and Activities Authority Structure The NGPRA featured broad similarities to the basic structure shared among most of the federal regional authorities and commissions, being a federal-state partnership led by a federal co-chair (appointed by the President, with the advice and consent of the Senate) and governors of the participating states, of which one was designated as the state co-chair. Unique to the NGPRA were certain structural novelties reflective of regional socio-political features. The NGPRA also included a Native American tribal co-chair, who was the chairperson of an Indian tribe in the region (or their designated representative), and appointed by the President, with the advice and consent of the Senate. The tribal co-chair served as the "liaison between the governments of Indian tribes in the region and the [NGPRA]." No term limit is established in statute; the only term-related proscription is that the state co-chair "shall be elected by the state members for a term of not less than 1 year." Another novel feature among the federal regional commissions and authorities was also the NGPRA's statutory reliance on a 501(c)(3) non-profit corporationâNorthern Great Plains, Inc.âin furtherance of its mission. While Northern Great Plains, Inc. was statutorily organized to complement the NGPRA's activities, it effectively served as the sole manifestation of the NGPRA concept and rationale while it was active, given that the NGPRA was only once appropriated funds and never appeared to exist as an active organization. The Northern Great Plains, Inc. was active for several years, and reportedly received external funding, but is currently defunct. Activities and Administration Under its authorizing statute, the federal government would initially fund all administrative costs in FY2002, which would decrease to 75% in FY2003, and 50% in FY2004. Also, the NGPRA would have designated levels of county economic distress; 75% of funds were reserved for the most distressed counties in each state, and 50% reserved for transportation, telecommunications, and basic infrastructure improvements. Accordingly, non-distressed communities were eligible to receive no more than 25% of appropriated funds. The NGPRA was also structured to include a network of designated, multi-county LDDs at the sub-state levels. As with its sister organizations, the LDDs would have served as nodes for project implementation and reporting, and as advisors to their respective states and the NGPRA as a whole. Legislative History 103rd Congress The Northern Great Plains Rural Development Act ( P.L. 103-318 ), which became law in 1994, established the Northern Great Plains Rural Development Commission to study economic conditions and provide economic development planning for the Northern Great Plains region. The Commission was comprised of the governors (or designated representative) from the Northern Great Plains states of Iowa, Minnesota, North Dakota, Nebraska, and South Dakota (prior to Missouri's inclusion), along with one member from each of those states appointed by the Secretary of Agriculture. 104th Congress The Agricultural, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 1995 ( P.L. 103-330 ) provided $1,000,000 to carry out the Northern Great Plains Rural Development Act. The Commission produced a 10-year plan to address economic development and distress in the five states. After a legislative extension ( P.L. 104-327 ), the report was submitted in 1997. The Northern Great Plains Initiative for Rural Development (NGPIRD), a non-profit 501(c)(3), was established to implement the Commission's advisories. 107th Congress The Farm Security and Rural Investment Act of 2002, or 2002 farm bill ( P.L. 107-171 ), authorized the NGPRA, which superseded the Commission. The statute also created Northern Great Plains, Inc., a 501(c)(3), as a resource for regional issues and international trade, which supplanted the NGPIRD with a broader remit that included research, education, training, and issues of international trade. 110th Congress The Food, Conservation, and Energy Act of 2008, or 2008 farm bill ( P.L. 110-246 ), extended the NGPRA's authorization through FY2012. The legislation also expanded the authority to include areas of Missouri not covered by the DRA, and provided mechanisms to enable the NGPRA to begin operations even without the Senate confirmation of a federal co-chair, as well as in the absence of a confirmed tribal co-chair. The Agricultural Act of 2014, or 2014 farm bill ( P.L. 113-79 ), reauthorized the NGPRA and the DRA, and extended their authorizations from FY2012 to FY2018. Funding History The NGPRA was authorized to receive $30 million annually from FY2002 to FY2018. It received appropriations once for $1.5 million in FY2004. Its authorization of appropriations lapsed at the end of FY2018. Southeast Crescent Regional Commission The Southeast Crescent Regional Commission (SCRC) was created by the 2008 farm bill, which also created the NBRC and the Southwest Border Regional Commission. All three commissions share common authorizing language modeled after the ARC. The SCRC is not currently active. The SCRC was created to address economic distress in areas of Virginia, North Carolina, South Carolina, Georgia, Alabama, Mississippi, and Florida ( Figure 6 ) not served by the ARC or the DRA ( Table 13 ). Overview of Structure and Activities As authorized, the SCRC would share an organizing structure with the NBRC and the Southwest Border Regional Commission, as all three share common statutory authorizing language modeled after the ARC. As authorized, the SCRC would consist of a federal co-chair, appointed by the President with the advice and consent of the Senate, along with the participating state governors (or their designated representatives), of which one would be named by the state representatives as state co-chair. There is no term limit for the federal co-chair. However, the state co-chair is limited to two consecutive terms, but may not serve a term of less than one year. However, no federal co-chair has been appointed since the SCRC was authorized; therefore, the commission cannot form and begin operations. Legislative History The SCRC concept was first introduced by university researchers working on rural development issues in 1990 at Tuskegee University's Annual Professional Agricultural Worker's Conference for 1862 and 1890 Land-Grant Universities. In 1994, the Southern Rural Development Commission Act was introduced in the House Agricultural Committee, which would provide the statutory basis for a "Southern Black Belt Commission." While the concept was not reintroduced in Congress until the 2000s, various nongovernmental initiatives sustained discussion and interest in the concept in the intervening period. Supportive legislation was reintroduced in 2002, which touched off other accompanying legislative efforts until the SCRC was authorized in 2008. Funding History Congress authorized $30 million funding levels for each fiscal year from FY2008 to FY2018, and $33 million in FY2019, and appropriated $250,000 in each fiscal year from FY2010 to FY2019 ( Table 5 ). Despite receiving regular appropriations since it was authorized in 2008, a review of government budgetary and fiscal sources yields no record of the SCRC receiving, obligating, or spending funds appropriated by Congress. In successive presidential administration budget requests (FY2013, FY2015-FY2017), no funding was requested. In the U.S. Treasury 2018 Combined Statement of Receipts, Outlays, and Balances, Part III, the SCRC does not appear, further indicating that the SCRC remains unfunded. Notably, the Commission for the Preservation of America's Heritage Abroad, which has periodically shared a common section with the SCRC in presidential budgets, is listed in the 2018 Combined Statement, as it is elsewhere. Southwest Border Regional Commission The Southwest Border Regional Commission (SBRC) was created with the enactment of the Food, Conservation, and Energy Act of 2008, or the 2008 farm bill ( P.L. 110-234 ), which also created the NBRC and the SCRC. All three commissions share common statutory authorizing language modeled after the ARC. The SBRC was created to address economic distress in the southern border regions of Arizona, California, New Mexico, and Texas ( Figure 7 ; Table 1 5 ). The SBRC has not received an annual appropriation since it was created and is not currently active. Overview of Structure and Activities As authorized, the SBRC would share an organizing structure with the NBRC and the SCRC, as all three commissions share common statutory authorizing language modeled after the ARC. By statute, the SBRC consists of a federal co-chair, appointed by the President with the advice and consent of the Senate, along with the participating state governors (or their designated representatives), of which one would be named by the state representatives as state co-chair. As enacted in statute, there is no term limit for the federal co-chair. However, the state co-chair is limited to two consecutive terms, but may not serve a term of less than one year. However, as no federal co-chair has been appointed since the SCRC was authorized, it is not operational. Legislative History The concept of an economic development agency focusing on the southwest border region has existed at least since 1976, though the SBRC was established through more recent efforts. Executive Order 13122 in 1999 created the Interagency Task Force on the Economic Development of the Southwest Border, which examined issues of socioeconomic distress and economic development in the southwest border regions and advised on federal efforts to address them. 108th Congress In February 2003, a "Southwest Regional Border Authority" was proposed in S. 548 . A companion bill, H.R. 1071 , was introduced in March 2003. The SBRC was reintroduced in the Regional Economic and Infrastructure Development Act of 2003 ( H.R. 3196 ), which would have authorized the SBRC, the DRA, the NGPRA, and the SCRC. 109th Congress In 2006, the proposed Southwest Regional Border Authority Act would have created the "Southwest Regional Border Authority" ( H.R. 5742 ), similar to S. 458 in 2003. 110th Congress In 2007, SBRC was reintroduced in the Regional Economic and Infrastructure Development Act of 2007 ( H.R. 3246 ), which would have authorized the SBRC, the SCRC, and the NBRC, and reauthorized the DRA and the NGPRA in a combined bill. Upon House passage, the Senate incorporated authorizations for the establishment of the NBRC, SCRC, and SBRC in the 2008 farm bill. The 2008 farm bill authorized annual appropriations of $30 million for FY2008 through FY2012 for all three of the new organizations. Funding History Congress authorized annual funding of $30 million for the SBRC from FY2008 to FY2018, and $33 million in FY2019. The SBRC has never received annual appropriations and is not active. Concluding Notes Given their geographic reach, broad activities, and integrated intergovernmental structures, the federal regional commissions and authorities are a significant element of federal economic development efforts. At the same time, as organizations that are largely governed by the respective state-based commissioners, the federal regional commissions and authorities are not typical federal agencies but federally-chartered entities that integrate federal funding and direction with state and local economic development priorities. This structure provides Congress with a flexible platform for economic development efforts. The intergovernmental structure allows for strategic-level economic development initiatives to be launched at the federal level and implemented across multi-state jurisdictions with extensive state and local input, and more adaptable to regional needs. The federal regional commissions and authorities reflect an emphasis by the federal government on place-based economic development strategies sensitive to regional and local contexts. However, the geographic specificity and varying functionality of the statutorily authorized federal regional commissions and authorities, both active and inactive, potentially raise questions about the efficacy and equity of federal economic development policies. More in-depth analysis of these and other such issues related to the federal regional authorities and commissions, and their role as instruments for federal economic development efforts, is reserved for possible future companion products to this report. Appendix A. Basic Information at a Glance Contact Information (for active commissions and authorities) Appalachian Regional Commission Address:1666 Connecticut Avenue, NW Suite 700 Washington, DC 20009-1068 Phone:[phone number scrubbed] Website: http://www.arc.gov Delta Regional Authority Address:236 Sharkey Avenue Suite 400 Clarksdale, MS 38614 Phone:[phone number scrubbed] Website: http://www.dra.gov Denali Commission Address:510 L Street Suite 410 Anchorage, AK 99501 Phone:[phone number scrubbed] Website: http://www.denali.gov Northern Border Regional Commission Address:James Cleveland Federal Building, Suite 1201 53 Pleasant Street Concord, NH 03301 Phone:[phone number scrubbed] Website: http://www.NBRC.gov Appendix B. Map of Federal Regional Commissions and Authorities Appendix C. Service Areas of Federal Regional Commissions and Authorities Appalachian Regional Commission Delta Regional Authority Denali Commission Northern Border Regional Commission Northern Great Plains Regional Authority Southeast Crescent Regional Commission Southwest Border Regional Commission Summary:	null	96	57,385	57,387	57,387	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction This report describes the structure, activities, legislative history, and funding history of seven federally-chartered regional commissions and authorities: the Appalachian Regional Commission (ARC); the Delta Regional Authority (DRA); the Denali Commission; the Northern Border Regional Commission (NBRC); the Northern Great Plains Regional Authority (NGPRA); the Southeast Crescent Regional Commission (SCRC); and the Southwest Border Regional Commission (SBRC) ( Table A-1 ). The federal regional commissions are also functioning examples of place-based and intergovernmental approaches to economic development, which receive regular congressional interest. The federal regional commissions and authorities integrate federal and state economic development priorities alongside regional and local considerations ( Figure A-1 ). As federally-chartered agencies created by acts of Congress, the federal regional commissions and authorities depend on congressional appropriations for their activities and administration, and are subject to congressional oversight. Seven federal regional commissions and authorities were authorized by Congress to address instances of major economic distress in certain defined socio-economic regions, with all but one (Alaska's Denali Commission) being multi-state regions ( Figure B-1 ). The first such federal regional commission, the Appalachian Regional Commission, was founded in 1965. The other commissions and authorities may have roots in the intervening decades, but were not founded until 1998 (Denali), 2000 (Delta Regional Authority), and 2002 (the Northern Great Plains Regional Authority). The most recent commissionsâNorthern Border Regional Commission, Southeast Crescent Regional Commission, and Southwest Border Regional Commissionâwere authorized in 2008. Four of the seven entitiesâthe Appalachian Regional Commission, the Delta Regional Authority, the Denali Commission, and the Northern Border Regional Commissionâare currently active and receive regular annual appropriations. Certain strategic emphases and programs have evolved over time in each of the functioning federal regional commissions and authorities. However, their overarching missions to address economic distress have not changed, and their associated activities have broadly remained consistent to those goals as funding has allowed. In practice, the functioning federal regional commissions and authorities engage in their respective economic development efforts through multiple program areas, which may include, but are not limited to basic infrastructure; energy; ecology/environment and natural resources; workforce/labor; and business development. Appalachian Regional Commission The Appalachian Regional Commission was established in 1965 to address economic distress in the Appalachian region. The ARC's jurisdiction spans 420 counties in Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia ( Figure 1 ). The ARC was originally created to address severe economic disparities between Appalachia and that of the broader United States; recently, its mission has grown to include regional competitiveness in a global economic environment. Structure and Activities Commission Structure According to the authorizing legislation, the Appalachian Regional Development Act of 1965, as amended, the ARC is a federally-chartered, regional economic development entity led by a federal co-chair, whose term is open-ended, and the 13 participating state governors, of which one serves as the state co-chair for a term of "at least one year." The federal co-chair is appointed by the President with the advice and consent of the Senate. The authorizing act also allows for the appointment of federal and state alternates to the commission. The ARC is a federal-state partnership, with administrative costs shared equally by the federal government and member states, while economic development activities are funded by congressional appropriations. Regional Development Plan According to authorizing legislation and the ARC code, the ARC's programs abide by a Regional Development Plan (RDP), which includes documents prepared by the states and the commission. The RDP is comprised of the ARC's strategic plan, its bylaws, member state development plans, each participating state's annual strategy statement, the commission's annual program budget, and the commission's internal implementation and performance management guidelines. The RDP integrates local, state, and federal economic development priorities into a common regional agenda. Through state plans and annual work statements, states establish goals, priorities, and agendas for fulfilling them. State planning typically includes consulting with local development districts (LDDs), which are multicounty organizations that are associated with and financially supported by the ARC and advise on local priorities. There are 73 ARC-associated LDDs. They may be conduits for funding for other eligible organizations, and may also themselves be ARC grantees. State and local governments, governmental entities, and nonprofit organizations are eligible for ARC investments, including both federal- and also state-designated tribal entities. Notably, non-federally recognized, state-designated tribal entities are eligible to receive ARC funding, which is an exception to the general rarity of federal funds being available to non-federally recognized tribal entities. ARC's strategic plan is a five-year document, reviewed annually, and revised as necessary. The current strategic plan, adopted in November 2015, prioritizes five investment goals: 1. entrepreneurial and business development; 2. workforce development; 3. infrastructure development; 4. natural and cultural assets; and 5. leadership and community capacity. The ARC's investment activities are divided into 10 program areas: These program areas can be funded through five types of eligible activities: 1. business development and entrepreneurship, through grants to help create and retain jobs in the region, including through targeted loan funds; 2. education and training, for projects that "develop, support, or expand education and training programs"; 3. health care, through funding for "equipment and demonstration projects" and sometimes for facility construction and renovation, including hospital and community health services; 4. physical infrastructure, including funds for basic infrastructure services such as water and sewer facilities, as well as housing and telecommunications; and 5. leadership development and civic capacity, such as community-based strategic plans, training for local leaders, and organizational support. While most funds are used for economic development grants, approximately $50 million is reserved for the Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative. The POWER Initiative began in 2015 to provide economic development funding for addressing economic and labor dislocations caused by energy transition principally in coal communities in the Appalachian region. Distressed Counties The ARC is statutorily obligated to designate counties according to levels of economic distress. Distress designations influence funding priority and determine grant match requirements. Using an index-based classification system, the ARC compares each county within its jurisdiction with national averages based on three economic indicators: (1) three-year average unemployment rates; (2) per capita market income; and (3) poverty rates. These factors are calculated into a composite index value for each county, which are ranked and sorted into designated distress levels. Each distress level corresponds to a given county's ranking relative to that of the United States as a whole. These designations are defined as follows by the ARC, starting from "worst" distress: distressed counties, or those with values in the "worst" 10% of U.S. counties; at-risk , which rank between worst 10% and 25%; transitional , which rank between worst 25% and best 25%; competitive , which rank between "best" 25% and best 10%; and attainment , or those which rank in the best 10%. The designated level of distress is statutorily tied to allowable funding levels by the ARC (funding allowance), the balance of which must be met through grant matches from other funding sources (including potentially other federal funds) unless a waiver or special dispensation is permitted: distressed (80% funding allowance, 20% grant match); at-risk (70%); transitional (50%); competitive (30%); and attainment (0% funding allowance). Exceptions can be made to grant match thresholds. Attainment counties may be able to receive funding for projects where sub-county areas are considered to be at higher levels of distress, and/or in those cases where the inclusion of an attainment county in a multi-county project would benefit one or more non-attainment counties or areas. In addition, special allowances may reduce or discharge matches, and match requirements may be met with other federal funds. Legislative History Council of Appalachian Governors In 1960, the Alabama, Georgia, Kentucky, Maryland, North Carolina, Pennsylvania, Tennessee, Virginia, and West Virginia governors formed the Council of Appalachian Governors to highlight Appalachia's extended economic distress and to press for increased federal involvement. In 1963, President John F. Kennedy formed the President's Appalachian Regional Commission (PARC) and charged it with developing an economic development program for the region. PARC's report, issued in 1964, called for the creation of an independent agency to coordinate federal and state efforts to address infrastructure, natural resources, and human capital issues in the region. The PARC also included some Ohio counties as part of the Appalachian region. Appalachian Regional Development Act In 1965, President Lyndon Johnson signed the Appalachian Regional Development Act, which created the ARC to address the PARC's recommendations, and added counties in New York and Mississippi. The ARC was directed to administer or assist in the following initiatives: The creation of the Appalachian Development Highway System; Establishing "Demonstration Health Facilities" to fund health infrastructure; Land stabilization, conservation, and erosion control programs; Timber development organizations, for purposes of forest management; Mining area restoration, for rehabilitating and/or revitalizing mining sites; A water resources survey; Vocational education programs; and Sewage treatment infrastructure. Major Amendments to the ARC Before 2008 Appalachian Regional Development Act Amendments of 1975 In 1975, the ARC's authorizing legislation was amended to require that state governors themselves serve as the state representatives on the commission, overriding original statutory language in which governors were permitted to appoint designated representatives. The amendments also included provisions to expand public participation in ARC plans and programs. They also required states to consult with local development districts and local governments and authorized federal grants to the ARC to assist states in enhancing state development planning. Appalachian Regional Development Reform Act of 1998 Legislative reforms in 1998 introduced county-level designations of distress. The legislation organized county-level distress into three bands, from "worst" to "best": distressed counties; competitive counties; and attainment counties. The act imposed limitations on funding for economically strong counties: (1) "competitive," which could only accept ARC funding for 30% of project costs (with the 70% balance being subject to grant match requirements); and (2) "attainment," which were generally ineligible for funding, except through waivers or exceptions. In addition, the act withdrew the ARC's legislative mandate for certain programs, including the land stabilization, conservation, and erosion control program; the timber development program; the mining area restoration program; the water resource development and utilization survey; the Appalachian airport safety improvements program (a program added in 1971); the sewage treatment works program; and amendments to the Housing Act of 1954 from the original 1965 act. Appalachian Regional Development Act Amendments of 2002 Legislation in 2002 expanded the ARC's ability to support LDDs, introduced an emphasis on ecological issues, and provided for a greater coordinating role by the ARC in federal economic development activities. The amendments also provided new stipulations for the ARC's grant making, limiting the organization to funding 50% of project costs or 80% in designated distressed counties. The amendments also expanded the ARC's efforts in human capital development projects, such as through various vocational, entrepreneurial, and skill training initiatives. The Appalachian Regional Development Act Amendments of 2008 The Appalachian Regional Development Act Amendments of 2008 is the ARC's most recent substantive legislative development and reflects its current configuration. The amendments included: 1. various limitations on project funding amounts and commission contributions; 2. the establishment of an economic and energy development initiative; 3. the expansion of county designations to include an "at-risk" designation; and 4. the expansion of the number of counties under the ARC's jurisdiction. The 2008 amendments introduced funding limitations for ARC grant activities as a whole, as well as to specific programs. According to the 2008 legislation, "the amount of the grant shall not exceed 50 percent of administrative expenses." However, at the ARC's discretion, an LDD that included a "distressed" county in its service area could provide for 75% of administrative expenses of a relevant project, or 70% for "at-risk" counties. Eligible activities could only be funded by the ARC at a maximum of 50% of the project cost, or 80% for distressed counties and 70% for "at-risk" counties. The act introduced special project categories, including (1) demonstration health projects; (2) assistance for proposed low- and middle-income housing projects; (3) the telecommunications and technology initiative; (4) the entrepreneurship initiative; and (5) the regional skills partnership. Finally, the "economic and energy development initiative" provided for the ARC to fund activities supporting energy efficiency and renewable technologies. The legislation expanded distress designations to include an "at-risk" category, or counties "most at risk of becoming economically distressed." This raised the number of distress levels to five. The legislation also expanded ARC's service area. Ten counties in four states were added to the ARC, which represents the most recent expansion. Funding History The ARC is a federal-state partnership, with administrative costs shared equally by the federal government and states, while economic development activities are federally funded. The ARC is also the highest-funded of the federal regional commissions and authorities. Its funding ( Table 1 ) has increased 126% from approximately $73 million in FY2008 to $165 million in FY2019. The ARC's funding growth is attributable to incremental increases in appropriations along with an approximately $50 million increase in annual appropriated funds in FY2016 set aside to support the POWER Initiative. The POWER Initiative was part of a wider federal effort under the Obama Administration to support coal communities affected by the decline of the coal industry. The FY2018 White House budget proposed to shutter the ARC as well as the other federal regional commissions and authorities. Congress did not adopt these provisions from the President's budget, and continued to fund the ARC and other commissions. Delta Regional Authority The Delta Regional Authority was established in 2000 to address economic distress in the Mississippi River Delta region. The DRA aims to "improve regional economic opportunity by helping to create jobs, build communities, and improve the lives of the 10 million people" in 252 designated counties and parishes in Alabama, Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri, and Tennessee ( Figure 2 ). Overview of Structure and Activities Authority Structure Like the ARC, the DRA is a federal-state partnership that shares administrative expenses equally, while activities are federally funded. The DRA consists of a federal co-chair appointed by the President with the advice and consent of the Senate, and the eight state governors, of which one is state co-chair. The governors are permitted to appoint a designee to represent the state, who also generally serves as the state alternate. Entities that are eligible to apply for DRA funding include: 1. state and local governmentsÂ (state agencies, cities and counties/parishes); 2. public bodies; and 3. non-profit entities. These entities must apply for projects that operate in or are serving residents and communities within the 252 counties/parishes of the DRA's jurisdiction. DRA Strategic Planning Funding determinations are assessed according to the DRA's authorizing statute, its strategic plan, state priorities, and distress designation. The DRA strategic plan articulates the authority's high-level economic development priorities. The current strategic planâ Moving the Delta Forward , Delta Regional Development Plan IIIâwas released in April 2016 and is in effect through 2021. The strategic plan lists three primary goals: 1. workforce competitiveness, to "advance the productivity and economic competitiveness of the Delta workforce"; 2. strengthened infrastructure, to "strengthen the Delta's physical, digital, and capital connections to the global economy"; and 3. increased community capacity, to "facilitate local capacity building within Delta communities, organizations, businesses, and individuals." State development plans are required by statute every five years to coincide with the strategic plan, and reflect the economic development goals and priorities of member states and LDDs. The DRA funds projects through 44 LDDs, which are multicounty economic development organizations financially supported by the DRA and advise on local priorities. LDDs "provide technical assistance, application support and review, and other services" to the DRA and entities applying for funding. LDDs receive administrative fees paid from awarded DRA funds, which are calculated as 5% of the first $100,000 of an award, and 1% for all dollars above that amount. Distress Designations The DRA determines a county or parish as distressed on an annual basis through the following criteria: 1. an unemployment rate of 1% higher than the national average for the most recent 24-month period; and 2. a per capita income of 80% or less than the national per capita income. The DRA designates counties as either distressed or not, and distressed counties received priority funding from DRA grant making activities. By statute, the DRA directs at least 75% of funds to distressed counties; half of those funds must target transportation and basic infrastructure. As of FY2018, 234 of the DRA's 252 counties are considered distressed. States' Economic Development Assistance Program The principal investment tool used by the DRA is the States' Economic Development Assistance Program (SEDAP), which "provides direct investment into community-based and regional projects that address the DRA's congressionally mandated four funding priorities." The DRA's four funding priorities are: 1. (1) basic public infrastructure; 2. (2) transportation infrastructure; 3. (3) workforce development; and 4. (4) business development (emphasizing entrepreneurship). The DRA's SEDAP funding is made available to each state according to a four-factor, formula-derived allocation that balances geographic breadth, population size, and economic distress ( Table 2 ). The factors and their respective weights are calculated as follows: Equity Factor (equal funding among eight states), 50%; Distressed Population (DRA counties/parishes), 20%; Distressed County Area (DRA counties/parishes), 20%; and Population Factor (DRA counties/parishes), 10%. DRA investments are awarded from state allocations. SEDAP applications are accepted through LDDs, and projects are sorted into tiers of priority. While all projects must be associated with one of the DRA's four funding priorities, additional prioritization determines the rank order of awards, which include county-level distress designations; adherence to at least one of the federal priority eligibility criteria (see below); adherence to at least one of the DRA Regional Development Plan goals (from the strategic plan); and adherence to at least one of the state's DRA priorities. The federal priority eligibility criteria are as follows: The DRA is also mandated to expend 50% of its appropriated SEDAP dollars on basic public and transportation infrastructure projects, which lend additional weight to this particular criterion. Legislative History In 1988, the Rural Development, Agriculture, and Related Agencies Appropriations Act for FY1989 ( P.L. 100-460 ) appropriated $2 million and included language that authorized the creation of the Lower Mississippi Delta Development Commission. The LMDDC was a DRA predecessor tasked with studying economic issues in the Delta and developing a 10-year economic development plan. The LMDDC consisted of two commissioners appointed by the President as well as the governors of Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri, and Tennessee. The commission was chaired by then-Governor William J. Clinton of Arkansas, and the LMDDC released interim and final reports before completing its mandate in 1990. Later, in the White House, the Clinton Administration continued to show interest in an expanded federal role in Mississippi Delta regional economic development. Key Legislative Activity In 1994, Congress enacted the Lower Mississippi Delta Region Heritage Study Act, which built on the LMDDC's recommendations. In particular, the 1994 act saw the Department of the Interior conduct a study on key regional cultural, natural, and heritage sites and locations in the Mississippi Delta region. In 1999, the Delta Regional Authority Act of 1999 was introduced in the House ( H.R. 2911 ) and Senate ( S. 1622 ) to establish the DRA by amending the Consolidated Farm and Rural Development Act. Neither bill was enacted, but they established the structure and mission later incorporated into the DRA. 106th Congress In 2000, the Consolidated Appropriations Act for FY2001 ( P.L. 106-554 ) included language authorizing the creation of the DRA based on the seven participating states of the LMDDC, with the addition of Alabama and 16 of its counties. 107th Congress The Farm Security and Rural Investment Act of 2002, or 2002 farm bill ( P.L. 107-171 ), amended voting procedures for DRA states, provided new funds for Delta regional projects, and added four additional Alabama counties to the DRA. 110th Congress The Food, Conservation, and Energy Act of 2008, or 2008 farm bill ( P.L. 110-234 ) reauthorized the DRA from FY2008 through FY2012 and expanded it to include Beauregard, Bienville, Cameron, Claiborne, DeSoto, Jefferson Davis, Red River, St. Mary, Vermillion, and Webster Parishes in Louisiana; and Jasper and Smith Counties in Mississippi. 113th Congress The Agricultural Act of 2014, or 2014 farm bill ( P.L. 113-79 ) reauthorized the DRA through FY2018. 115th Congress The Agriculture Improvement Act of 2018, or 2018 farm bill ( P.L. 115-334 ), reauthorized the DRA from FY2019 to FY2023, and emphasized Alabama's position as a "full member" of the DRA. Funding History Under "farm bill" legislation, the DRA has consistently received funding authorizations of $30 million annually since it was first authorized. However, appropriations have fluctuated over the years. Although the DRA was appropriated $20 million in the same legislation authorizing its creation, that amount was halved in 2002, and continued a downward trend through its funding nadir of $5 million in FY2004. However, funding had increased by FY2006 to $12 million. Since FY2008, DRA's annual appropriations have increased from almost $12 million to the current level of $25 million ( Table 3 ). Denali Commission The Denali Commission was established in 1998 to support rural economic development in Alaska. It is "designed to provide critical utilities, infrastructure, and economic support throughout Alaska." The Denali Commission is unique as a single-state commission, and in its reliance on federal funding for both administration and activities. Overview of Structure and Activities The commission's statutory mission includes providing workforce and other economic development assistance to distressed rural regions in Alaska. However, the commission no longer engages in substantial activities in general economic development or transportation, which were once core elements of the Denali Commission's activities. Its recent activities are principally limited to coastal infrastructure protection and energy infrastructure and fuel storage projects. Commission Structure The Denali Commission's structure is unique as the only commission with a single-state mandate. The commission is comprised of seven members (or a designated nominee), including the federal co-chair, appointed by the U.S. Secretary of Commerce; the Alaska governor, who is state co-chair (or his/her designated representative); the University of Alaska president; the Alaska Municipal League president; the Alaska Federation of Natives president; the Alaska State AFL-CIO president; and the Associated General Contractors of Alaska president. These structural novelties offer a different model compared to the organization typified by the ARC and broadly adopted by the other functioning federal regional commissions and authorities. For example, the federal co-chair's appointment by the Secretary of Commerce, and not the President with Senate confirmation, allows for a potentially more expeditious appointment of a federal co-chair. The Denali Commission is required by law to create an annual work plan, which solicits project proposals, guides activities, and informs a five-year strategic plan. The work plan is reviewed by the federal co-chair, the Secretary of Commerce, and the Office of Management and Budget, and is subject to a public comment period. The current FY2018-FY2022 strategic plan, released in October 2017, lists four strategic goals and objectives: (1) facilities management; (2) infrastructure protection from ecological change; (3) energy, including storage, production, heating, and electricity; and (4) innovation and collaboration. The commission's recent activities largely focus on energy and infrastructure protection. Distressed Areas The Denali Commission's authorizing statute obligates the Commission to address economic distress in rural areas of Alaska. As of 2018, the Commission utilizes two overlapping standards to assess distress: a "surrogate standard," adopted by the Commission in 2000, and an "expanded standard." These standards are applied to rural communities in Alaska and assessed by the Alaska Department of Labor and Workforce Development (DOL&WD), Research and Analysis Section. DOL&WD uses the most current population, employment, and earnings data available to identify Alaska communities and Census Designated Places considered "distressed." Appeals can be made to community distress determinations, but only through a demonstration that DOL&WD data or analysis was erroneous, invalid, or outdated. New information "must come from a verifiable source, and be robust and representative of the entire community and/or population." Appeals are accepted and adjudicated only for the same reporting year in question. Recent Activities The Denali Commission's scope is more constrained compared to the other federal regional commissions and authorities. The organization reports that due to funding constraints, the commission reduced its involvement in what might be considered traditional economic development and, instead, focused on rural fuel and energy infrastructure and coastal protection efforts. Since the Denali Commission's founding, bulk fuel safety and security, energy reliability and security, transportation system improvements, and healthcare projects have commanded the vast majority of Commission projects. Of these, only energy reliability and security and bulk fuel safety and security projects remain active and are still funded. Village infrastructure protectionâa program launched in 2015 to address community infrastructure threatened by erosion, flooding and permafrost degradationâis a program that is relatively new and still being funded. By contrast, most "traditional" economic development programs are no longer being funded, including in housing, workforce development, and general economic development activities. Legislative History 106th Congress In 1999, the Consolidated Appropriations Act, 2000 ( P.L. 106-113 ) authorized the commission to enter into contracts and cooperative agreements, award grants, and make payments "necessary to carry out the purposes of the commission." The act also established the federal co-chair's compensation schedule, prohibited using more than 5% of appropriated funds for administrative expenses, and established "demonstration health projects" as authorized activities and authorized the Department of Health and Human Services to make grants to the commission to that effect. 108th Congress The Consolidated Appropriations Act, 2004 ( P.L. 108-199 ) created an Economic Development Committee within the commission chaired by the Alaska Federation of Natives president, and included the Alaska Commissioner of Community and Economic Affairs, a representative of the Alaska Bankers Association, the chairman of the Alaska Permanent Fund, a representative from the Alaska Chamber of Commerce, and representatives from each region. 109th Congress In 2005, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, or SAFETEA-LU ( P.L. 109-59 ), established the Denali Access System Program among the commission's authorized activities. The program was part of its surface transportation efforts, which were active from 2005 through 2009. 112th Congress 2012's Moving Ahead for Progress in the 21 st Century Act, or MAP-21 ( P.L. 112-141 ), authorized the commission to accept funds from federal agencies, allowed it to accept gifts or donations of "service, property, or money" on behalf of the U.S. government, and included guidance regarding gifts. 114th Congress In 2016, the Water Infrastructure Improvements for the Nation Act, or the WIIN Act ( P.L. 114-322 ), reauthorized the Denali Commission through FY2021, and established a four-year term for the federal co-chair (with allowances for reappointment), but provided that other members were appointed for life. The act also allowed for the Secretary of Commerce to appoint an interim federal co-chair, and included clarifying language on the non-federal status of commission staff and ethical issues regarding conflicts of interest and disclosure. Funding History Under its authorizing statute, the Denali Commission received funding authorizations for $20 million for FY1999, and "such sums as necessary" (SSAN) for FY2000 through FY2003. Legislation passed in 2003 extended the commission's SSAN funding authorization through 2008. Its authorization lapsed after 2008; reauthorizing legislation was introduced in 2007, but was not enacted. The commission continued to receive annual appropriations for FY2009 and several years thereafter. In 2016, legislation was enacted reauthorizing the Denali Commission through FY2021 with a $15 million annual funding authorization ( Table 4 ). Northern Border Regional Commission The Northern Border Regional Commission (NBRC) was created by the Food, Conservation, and Energy Act of 2008, otherwise known as the 2008 farm bill. The act also created the Southeast Crescent Regional Commission (SCRC) and the Southwest Border Regional Commission (SBRC). All three commissions share common authorizing language modeled after the ARC. The NBRC is the only one of the three new commissions that has been both reauthorized and received progressively increasing annual appropriations since it was established in 2008. The NBRC was founded to alleviate economic distress in the northern border areas of Maine, New Hampshire, New York, and, as of 2018, the entire state of Vermont ( Figure 4 ). The stated mission of the NBRC is "to catalyze regional, collaborative, and transformative community economic development approaches that alleviate economic distress and position the region for economic growth." Eligible counties within the NBRC's jurisdiction may receive funding "for community and economic development" projects pursuant to regional, state, and local planning and priorities ( Table C-4 ). Overview of Structure and Activities The NBRC is led by a federal co-chair, appointed by the President with the advice and consent of the Senate, and four state governors, of which one is appointed state co-chair. There is no term limit for the federal co-chair. The state co-chair is limited to two consecutive terms, but may not serve a term of less than one year. Each of the four governors may appoint an alternate; each state also designates an NBRC program manager to handle the day-to-day operations of coordinating, reviewing, and recommending economic development projects to the full membership. While program funding depends on congressional appropriations, administrative costs are shared equally between the federal government and the four states of the NBRC. Through commission votes, applications are ranked by priority, and are approved in that order as grant funds allow. Program Areas All projects are required to address at least one of the NBRC's four authorized program areas and its five-year strategic plan. The NBRC's four program areas are: (1) economic and infrastructure development (EID); (2) comprehensive planning for states; (3) local development districts; and (4) the regional forest economy partnership. Economic and Infrastructure Development (EID) The NBRC's state EID investment program is the chief mechanism for investing in economic development programs in the participating states. The EID program prioritizes projects focusing on infrastructure, telecommunications, energy costs, business development, entrepreneurship, workforce development, leadership, and regional strategic planning. The EID program provides approximately $3.5 million to each state for such activities. Eligible applicants include public bodies, 501(c) organizations, Native American tribes, and the four state governments. EID projects may require matching funds of up to 50% depending on the level of distress. Comprehensive Planning The NBRC may also assist states in developing comprehensive economic and infrastructure development plans for their NBRC counties. These initiatives are undertaken in collaboration with LDDs, localities, institutions of higher education, and other relevant stakeholders. Local Development Districts (LDD) The NBRC uses 16 multicounty LDDs to advise on local priorities, identify opportunities, conduct outreach, and administer grants, from which the LDDs receive fees. LDDs receive fees according to a graduated schedule tied to total project funds. The rate is 5% for the first $100,000 awarded and 1% in excess of $100,000. Notably, this formula does not apply to Vermont-only projects. Vermont is the only state where grantees are not required to contract with an LDD for the administration of grants, though this requirement may be waived. Regional Forest Economy Partnership (RFEP) The RFEP is an NBRC program to address economic distress caused by the decline of the regional forest products industry. The program provides funding to rural communities for "economic diversity, independence, and innovation." The NBRC received $7 million in FY2018 and FY2019 to address the decline in the forest-based economies in the NBRC region. Strategic Plan The NBRC's activities are guided by a five-year strategic plan, which is developed through "extensive engagement with NBRC stakeholders" alongside "local, state, and regional economic development strategies already in place." The 2017-2021 strategic plan lists three goals: 1. modernizing infrastructure; 2. creating and sustaining jobs; and 3. anticipating and capitalizing on shifting economic and demographic trends. The strategic plan also lists five-year performance goals, which are: 5,000 jobs created or retained; 10,000 households and businesses with access to improved infrastructure; 1,000 businesses representing 5,000 employees benefit from NBRC investments; 7,500 workers provided with skills training; 250 communities and 1,000 leaders engaged in regional leadership, learning and/or innovation networks supported by the NBRC; and 3:1 NBRC investment leverage. The strategic plan also takes stock of various socioeconomic trends in the northern border region, including (1) population shifts; (2) distressed communities; and (3) changing workforce needs. Economic and Demographic Distress The NBRC is unique in that it is statutorily obligated to assess distress according to economic as well as demographic factors ( Table C-4 ). These designations are made and refined annually. The NBRC defines levels of "distress" for counties that "have high rates of poverty, unemployment, or outmigration" and "are the most severely and persistently economic distressed and underdeveloped." The NBRC is required to allocate 50% of its total appropriations to projects in distressed counties. The NBRC's county designations are as follows, in descending levels of distress: Distressed counties (80% maximum funding allowance); Transitional counties (50%); and Attainment (0%). Transitional counties are defined as counties that do not exhibit the same levels of economic and demographic distress as a distressed county, but suffer from "high rates of poverty, unemployment, or outmigration." Attainment counties are not allowed to be funded by the NBRC except for those projects that are located within an "isolated area of distress," or have been granted a waiver. Distress is calculated in tiers of primary and secondary distress categories and constituent factors: Primary Distress Categories 1. Percent of population below the poverty level 2. Unemployment rate 3. Percent change in population Secondary Distress Categories 4. Percent of population below the poverty level 5. Median household income 6. Percent of secondary and/or seasonal homes Each county is assessed by the primary and secondary distress categories and factors and compared to the figures for the United States as a whole. Designations of county distress are made by tallying those factors against the following criteria: Distressed counties are those with at least three factors from both primary and secondary distress categories and at least one from each category; Transitional counties are those with at least one factor from either category; and Attainment counties are those which show no measures of distress. Legislative History 110th Congress The NBRC was first proposed in the Northern Border Economic Development Commission Act of 2007 ( H.R. 1548 ), introduced on March 15, 2007. H.R. 1548 proposed the creation of a federally-chartered, multi-state economic development organizationâmodeled after the ARCâcovering designated northern border counties in Maine, New Hampshire, New York, and Vermont. The bill would have authorized the appropriation of $40 million per year for FY2008 through FY2012 ( H.R. 1548 ). The bill received regional co-sponsorship from Members of Congress representing areas in the northern border region. The NBRC was reintroduced in the Regional Economic and Infrastructure Development Act of 2007 ( H.R. 3246 ), which would have authorized the NBRC, the SCRC, and the SBRC, and reauthorized the DRA and the NGPRA (discussed in the next section) in a combined bill. H.R. 3246 won a broader range of support, which included 18 co-sponsors in addition to the original bill sponsor, and passed the House by a vote of 264-154 on October 4, 2007. Upon House passage, H.R. 3246 was referred to the Senate Committee on Environment and Public Works. The Senate incorporated authorizations for the establishment of the NBRC, SCRC, and the SBRC in the 2008 farm bill. The 2008 farm bill authorized annual appropriations of $30 million for FY2008 through FY2012 for all three new commissions. 115th Congress The only major changes to the NBRC since its creation were made in the Agriculture Improvement Act of 2018 ( P.L. 115-334 ), or the 2018 farm bill, which authorized the state capacity building grant program. In addition, the 2018 farm bill expanded the NBRC to include the following counties: Belknap and Cheshire counties in New Hampshire; Genesee, Greene, Livingston, Montgomery, Niagara, Oneida, Orleans, Rensselaer, Saratoga, Schenectady, Sullivan, Washington, Warren, Wayne, and Yates counties in New York; and Addison, Bennington, Chittenden, Orange, Rutland, Washington, Windham, and Windsor counties in Vermont, making it the only state entirely within the NBRC. Funding History Since its creation, the NBRC has received consistent authorizations of appropriations ( Table 5 ). The 2008 farm bill authorized the appropriation of $30 million for the NBRC for each of FY2008 through FY2013 ( P.L. 110-234 ); the same in the 2014 farm bill for each of FY2014 through FY2018 ( P.L. 113-79 ); and $33 million for each of FY2019 through FY2023 ( P.L. 115-334 ). Due to its statutory linkages to the SCRC and SBRC, all three commissions also share common authorizing legislation and identical funding authorizations. To date, the NBRC is the only commission of the three to receive substantial annual appropriations. Congress has funded the NBRC since FY2010 ( Table 5 ). The NBRC's appropriated funding level has increased from $5 million in FY2014, to $7.5 million in FY2016, $10 million in FY2017, $15 million in FY2018, and $20 million in FY2019. Northern Great Plains Regional Authority The Northern Great Plains Regional Authority was created by the 2002 farm bill. The NGPRA was created to address economic distress in Iowa, Minnesota, Missouri (other than counties included in the Delta Regional Authority), North Dakota, Nebraska, and South Dakota. The NGPRA appears to have been briefly active shortly after it was created, when it received its only annual appropriation from Congress. The NGPRA's funding authorization lapsed at the end of FY2018; it was not reauthorized. Structure and Activities Authority Structure The NGPRA featured broad similarities to the basic structure shared among most of the federal regional authorities and commissions, being a federal-state partnership led by a federal co-chair (appointed by the President, with the advice and consent of the Senate) and governors of the participating states, of which one was designated as the state co-chair. Unique to the NGPRA were certain structural novelties reflective of regional socio-political features. The NGPRA also included a Native American tribal co-chair, who was the chairperson of an Indian tribe in the region (or their designated representative), and appointed by the President, with the advice and consent of the Senate. The tribal co-chair served as the "liaison between the governments of Indian tribes in the region and the [NGPRA]." No term limit is established in statute; the only term-related proscription is that the state co-chair "shall be elected by the state members for a term of not less than 1 year." Another novel feature among the federal regional commissions and authorities was also the NGPRA's statutory reliance on a 501(c)(3) non-profit corporationâNorthern Great Plains, Inc.âin furtherance of its mission. While Northern Great Plains, Inc. was statutorily organized to complement the NGPRA's activities, it effectively served as the sole manifestation of the NGPRA concept and rationale while it was active, given that the NGPRA was only once appropriated funds and never appeared to exist as an active organization. The Northern Great Plains, Inc. was active for several years, and reportedly received external funding, but is currently defunct. Activities and Administration Under its authorizing statute, the federal government would initially fund all administrative costs in FY2002, which would decrease to 75% in FY2003, and 50% in FY2004. Also, the NGPRA would have designated levels of county economic distress; 75% of funds were reserved for the most distressed counties in each state, and 50% reserved for transportation, telecommunications, and basic infrastructure improvements. Accordingly, non-distressed communities were eligible to receive no more than 25% of appropriated funds. The NGPRA was also structured to include a network of designated, multi-county LDDs at the sub-state levels. As with its sister organizations, the LDDs would have served as nodes for project implementation and reporting, and as advisors to their respective states and the NGPRA as a whole. Legislative History 103rd Congress The Northern Great Plains Rural Development Act ( P.L. 103-318 ), which became law in 1994, established the Northern Great Plains Rural Development Commission to study economic conditions and provide economic development planning for the Northern Great Plains region. The Commission was comprised of the governors (or designated representative) from the Northern Great Plains states of Iowa, Minnesota, North Dakota, Nebraska, and South Dakota (prior to Missouri's inclusion), along with one member from each of those states appointed by the Secretary of Agriculture. 104th Congress The Agricultural, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 1995 ( P.L. 103-330 ) provided $1,000,000 to carry out the Northern Great Plains Rural Development Act. The Commission produced a 10-year plan to address economic development and distress in the five states. After a legislative extension ( P.L. 104-327 ), the report was submitted in 1997. The Northern Great Plains Initiative for Rural Development (NGPIRD), a non-profit 501(c)(3), was established to implement the Commission's advisories. 107th Congress The Farm Security and Rural Investment Act of 2002, or 2002 farm bill ( P.L. 107-171 ), authorized the NGPRA, which superseded the Commission. The statute also created Northern Great Plains, Inc., a 501(c)(3), as a resource for regional issues and international trade, which supplanted the NGPIRD with a broader remit that included research, education, training, and issues of international trade. 110th Congress The Food, Conservation, and Energy Act of 2008, or 2008 farm bill ( P.L. 110-246 ), extended the NGPRA's authorization through FY2012. The legislation also expanded the authority to include areas of Missouri not covered by the DRA, and provided mechanisms to enable the NGPRA to begin operations even without the Senate confirmation of a federal co-chair, as well as in the absence of a confirmed tribal co-chair. The Agricultural Act of 2014, or 2014 farm bill ( P.L. 113-79 ), reauthorized the NGPRA and the DRA, and extended their authorizations from FY2012 to FY2018. Funding History The NGPRA was authorized to receive $30 million annually from FY2002 to FY2018. It received appropriations once for $1.5 million in FY2004. Its authorization of appropriations lapsed at the end of FY2018. Southeast Crescent Regional Commission The Southeast Crescent Regional Commission (SCRC) was created by the 2008 farm bill, which also created the NBRC and the Southwest Border Regional Commission. All three commissions share common authorizing language modeled after the ARC. The SCRC is not currently active. The SCRC was created to address economic distress in areas of Virginia, North Carolina, South Carolina, Georgia, Alabama, Mississippi, and Florida ( Figure 6 ) not served by the ARC or the DRA ( Table 13 ). Overview of Structure and Activities As authorized, the SCRC would share an organizing structure with the NBRC and the Southwest Border Regional Commission, as all three share common statutory authorizing language modeled after the ARC. As authorized, the SCRC would consist of a federal co-chair, appointed by the President with the advice and consent of the Senate, along with the participating state governors (or their designated representatives), of which one would be named by the state representatives as state co-chair. There is no term limit for the federal co-chair. However, the state co-chair is limited to two consecutive terms, but may not serve a term of less than one year. However, no federal co-chair has been appointed since the SCRC was authorized; therefore, the commission cannot form and begin operations. Legislative History The SCRC concept was first introduced by university researchers working on rural development issues in 1990 at Tuskegee University's Annual Professional Agricultural Worker's Conference for 1862 and 1890 Land-Grant Universities. In 1994, the Southern Rural Development Commission Act was introduced in the House Agricultural Committee, which would provide the statutory basis for a "Southern Black Belt Commission." While the concept was not reintroduced in Congress until the 2000s, various nongovernmental initiatives sustained discussion and interest in the concept in the intervening period. Supportive legislation was reintroduced in 2002, which touched off other accompanying legislative efforts until the SCRC was authorized in 2008. Funding History Congress authorized $30 million funding levels for each fiscal year from FY2008 to FY2018, and $33 million in FY2019, and appropriated $250,000 in each fiscal year from FY2010 to FY2019 ( Table 5 ). Despite receiving regular appropriations since it was authorized in 2008, a review of government budgetary and fiscal sources yields no record of the SCRC receiving, obligating, or spending funds appropriated by Congress. In successive presidential administration budget requests (FY2013, FY2015-FY2017), no funding was requested. In the U.S. Treasury 2018 Combined Statement of Receipts, Outlays, and Balances, Part III, the SCRC does not appear, further indicating that the SCRC remains unfunded. Notably, the Commission for the Preservation of America's Heritage Abroad, which has periodically shared a common section with the SCRC in presidential budgets, is listed in the 2018 Combined Statement, as it is elsewhere. Southwest Border Regional Commission The Southwest Border Regional Commission (SBRC) was created with the enactment of the Food, Conservation, and Energy Act of 2008, or the 2008 farm bill ( P.L. 110-234 ), which also created the NBRC and the SCRC. All three commissions share common statutory authorizing language modeled after the ARC. The SBRC was created to address economic distress in the southern border regions of Arizona, California, New Mexico, and Texas ( Figure 7 ; Table 1 5 ). The SBRC has not received an annual appropriation since it was created and is not currently active. Overview of Structure and Activities As authorized, the SBRC would share an organizing structure with the NBRC and the SCRC, as all three commissions share common statutory authorizing language modeled after the ARC. By statute, the SBRC consists of a federal co-chair, appointed by the President with the advice and consent of the Senate, along with the participating state governors (or their designated representatives), of which one would be named by the state representatives as state co-chair. As enacted in statute, there is no term limit for the federal co-chair. However, the state co-chair is limited to two consecutive terms, but may not serve a term of less than one year. However, as no federal co-chair has been appointed since the SCRC was authorized, it is not operational. Legislative History The concept of an economic development agency focusing on the southwest border region has existed at least since 1976, though the SBRC was established through more recent efforts. Executive Order 13122 in 1999 created the Interagency Task Force on the Economic Development of the Southwest Border, which examined issues of socioeconomic distress and economic development in the southwest border regions and advised on federal efforts to address them. 108th Congress In February 2003, a "Southwest Regional Border Authority" was proposed in S. 548 . A companion bill, H.R. 1071 , was introduced in March 2003. The SBRC was reintroduced in the Regional Economic and Infrastructure Development Act of 2003 ( H.R. 3196 ), which would have authorized the SBRC, the DRA, the NGPRA, and the SCRC. 109th Congress In 2006, the proposed Southwest Regional Border Authority Act would have created the "Southwest Regional Border Authority" ( H.R. 5742 ), similar to S. 458 in 2003. 110th Congress In 2007, SBRC was reintroduced in the Regional Economic and Infrastructure Development Act of 2007 ( H.R. 3246 ), which would have authorized the SBRC, the SCRC, and the NBRC, and reauthorized the DRA and the NGPRA in a combined bill. Upon House passage, the Senate incorporated authorizations for the establishment of the NBRC, SCRC, and SBRC in the 2008 farm bill. The 2008 farm bill authorized annual appropriations of $30 million for FY2008 through FY2012 for all three of the new organizations. Funding History Congress authorized annual funding of $30 million for the SBRC from FY2008 to FY2018, and $33 million in FY2019. The SBRC has never received annual appropriations and is not active. Concluding Notes Given their geographic reach, broad activities, and integrated intergovernmental structures, the federal regional commissions and authorities are a significant element of federal economic development efforts. At the same time, as organizations that are largely governed by the respective state-based commissioners, the federal regional commissions and authorities are not typical federal agencies but federally-chartered entities that integrate federal funding and direction with state and local economic development priorities. This structure provides Congress with a flexible platform for economic development efforts. The intergovernmental structure allows for strategic-level economic development initiatives to be launched at the federal level and implemented across multi-state jurisdictions with extensive state and local input, and more adaptable to regional needs. The federal regional commissions and authorities reflect an emphasis by the federal government on place-based economic development strategies sensitive to regional and local contexts. However, the geographic specificity and varying functionality of the statutorily authorized federal regional commissions and authorities, both active and inactive, potentially raise questions about the efficacy and equity of federal economic development policies. More in-depth analysis of these and other such issues related to the federal regional authorities and commissions, and their role as instruments for federal economic development efforts, is reserved for possible future companion products to this report. Appendix A. Basic Information at a Glance Contact Information (for active commissions and authorities) Appalachian Regional Commission Address:1666 Connecticut Avenue, NW Suite 700 Washington, DC 20009-1068 Phone:[phone number scrubbed] Website: http://www.arc.gov Delta Regional Authority Address:236 Sharkey Avenue Suite 400 Clarksdale, MS 38614 Phone:[phone number scrubbed] Website: http://www.dra.gov Denali Commission Address:510 L Street Suite 410 Anchorage, AK 99501 Phone:[phone number scrubbed] Website: http://www.denali.gov Northern Border Regional Commission Address:James Cleveland Federal Building, Suite 1201 53 Pleasant Street Concord, NH 03301 Phone:[phone number scrubbed] Website: http://www.NBRC.gov Appendix B. Map of Federal Regional Commissions and Authorities Appendix C. Service Areas of Federal Regional Commissions and Authorities Appalachian Regional Commission Delta Regional Authority Denali Commission Northern Border Regional Commission Northern Great Plains Regional Authority Southeast Crescent Regional Commission Southwest Border Regional Commission	Summary:	gov_report	1,024	null	67
crs_R45795	crs_R45795_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Context for Heightened U.S.-Iran Tensions U.S.-Iran relations have been mostly adversarial since the 1979 Islamic Revolution in Iran. U.S. officials and official reports consistently identify Iran's support for militant armed factions in the Middle East region a significant threat to U.S. interests and allies. Attempting to constrain Iran's nuclear program took precedence in U.S. policy after 2002 as that program advanced. The United States also has sought to thwart Iran's purchase of new conventional weaponry and development of ballistic missiles. In May 2018, the Trump Administration withdrew the United States from the 2015 nuclear agreement (Joint Comprehensive Plan of Action, JCPOA), asserting that the accord did not address the broad range of U.S. concerns about Iranian behavior and would not permanently preclude Iran from developing a nuclear weapon. Senior Administration officials explain Administration policy as the application of "maximum pressure" on Iran's economy to (1) compel it to renegotiate the JCPOA to address the broad range of U.S. concerns and (2) deny Iran the revenue to continue to develop its strategic capabilities or intervene throughout the region. Administration officials deny that the policy is intended to stoke economic unrest in Iran. As the Administration has pursued its policy of maximum pressure, including imposing sanctions beyond those in force before JCPOA went into effect in January 2016, bilateral tensions have escalated significantly. Key developments that initially heightened tensions include the following. On April 8, 2019, the Administration designated the Islamic Revolutionary Guard Corps (IRGC) as a Foreign Terrorist Organization (FTO), representing the first time that an official military force was designated as an FTO. The designation stated that "The IRGC continues to provide financial and other material support, training, technology transfer, advanced conventional weapons, guidance, or direction to a broad range of terrorist organizations, including Hezbollah, Palestinian terrorist groups like Hamas and Palestinian Islamic Jihad, Kata'ib Hezbollah in Iraq, al-Ashtar Brigades in Bahrain, and other terrorist groups in Syria and around the Gulf.... Iran continues to allow Al Qaeda (AQ) operatives to reside in Iran, where they have been able to move money and fighters to South Asia and Syria." As of May 2, 2019, the Administration ended a U.S. sanctions exception for any country to purchase Iranian oil, aiming to drive Iran's oil exports to "zero." Since May 2019, the Administration has ended five out of the seven waivers under the Iran Freedom and Counter-Proliferation Act (IFCA, P.L. 112-239 )âwaivers that allow countries to help Iran remain within limits set by the JCPOA. On May 5, 2019, citing reports that Iran or its allies might be preparing to attack U.S. personnel or installations, then-National Security Adviser John Bolton announced that the United States was accelerating the previously planned deployment of the USS Abraham Lincoln Carrier Strike Group and sending a bomber task force to the Persian Gulf region. On May 24, 2019, the Trump Administration notified Congress of immediate foreign military sales and proposed export licenses for direct commercial sales of defense articlesâ training, equipment, and weapons â with a possible value of more than $8 billion, including sales of precision guided munitions (PGMs) to Saudi Arabia and the United Arab Emirates (UAE). In making the 22 emergency sale notifications, Secretary of State Pompeo invoked emergency authority codified in the Arms Export Control Act (AECA), and cited the need "to deter further Iranian adventurism in the Gulf and throughout the Middle East." Iran's Attacks on Tankers in mid-2019 Iran responded to the additional steps in the U.S. maximum pressure campaign in part by demonstrating its ability to harm global commerce and other U.S. interests and to raise renewed concerns about Iran's nuclear activities. Iran apparently has sought to cause international actors, including those that depend on stable oil supplies, to put pressure on the Trump Administration to reduce its sanctions pressure on Iran. On May 12-13, 2019, four oil tankers â two Saudi, one Emirat i , and one Norwegian ship â were damaged . Iran denied involvement, but a Defense Department (DOD) official on May 24, 2019, attributed the tanker attacks to the IRGC. A report to the United Nations based on Saudi, UAE, and Norwegian information found that a "state actor" was likely responsible, but did not name a specific perpetrator. On June 13, 2019, two Saudi tankers in the Gulf of Oman were attacked. Secretary of State Michael Pompeo stated, "It is the assessment of the U.S. government that Iran is responsible for the attacks that occurred in the Gulf of Oman todayâ¦.based on the intelligence, the weapons used, the level of expertise needed to execute the operation, recent similar Iranian attacks on shipping, and the fact that no proxy group in the area has the resources and proficiency to act with such a high degree of sophistication.... " Actions by Iran's Regional Allies Iran's allies in the region have been conducting attacks that might be linked to U.S.-Iran tensions, although it is not known definitively whether Iran directed or encouraged each attack (see Figure 1 for a map of Iran-supported groups). Trump Administration officials, particularly Secretary of State Pompeo, has stated that the United States will hold Tehran responsible for the actions of its regional allies. Some of the most significant actions by Iran-linked forces during mid-2019 are the following: On May 19, 2019, a rocket was fired into the secure "Green Zone" in Baghdad but it caused no injuries or damage. Iran-backed Iraqi militias were widely suspected of the firing and U.S. Defense Department officials attributed it to Iran. The incident came four days after the State Department ordered "nonemergency U.S. government employees" to leave U.S. diplomatic facilities in Iraq, claiming a heightened threat from Iranian allies. An additional rocket attack launched from Iraq included a May 2019 attack on Saudi pipeline infrastructure in Saudi Arabia with an unmanned aerial aircraft, first considered to have been launched from Yemen. Further attacks, discussed below, have led to U.S.-Iran hostilities. In June 2019 and periodically thereafter, the Houthis, who have been fighting against a Saudi-led Arab coalition that intervened in Yemen against the Houthis in March 2015, claimed responsibility for attacks on an airport in Abha, in southern Saudi Arabia, and on Saudi energy installations and targets. The Houthis claimed responsibility for the large-scale attack on Saudi energy infrastructure on September 14, 2019, but, as discussed below, U.S. and Saudi officials have concluded that the attack did not originate from Yemen. In a June 13, 2019, statement, Secretary of State Pompeo asserted Iranian responsibility for a May 31, 2019, car bombing in Afghanistan that wounded four U.S. military personnel. Administration reports have asserted that Iran was providing materiel support to some Taliban militants, but outside experts asserted that the Iranian role in that attack is unlikely. Tensions turn to Hostilities In subsequent weeks, U.S.-Iran tensions erupted into direct hostilities as well as further Iranian actions against U.S. partners. Iran and U.S. Downing of Drones On June 20, 2019, Iran shot down an unmanned aerial surveillance aircraft (RQ-4A Global Hawk Unmanned Aerial Vehicle) near the Strait of Hormuz, claiming it had entered Iranian airspace over the Gulf of Oman. U.S. Central Command officials stated that the drone was over international waters. Later that day, according to his posts on the Twitter social media site, President Trump ordered a strike on three Iranian sites related to the Global Hawk downing, but called off the strike on the grounds that it would have caused Iranian casualties and therefore been "disproportionate" to the Iranian shoot down. The United States did reportedly launch a cyberattack against Iranian equipment used to track commercial ships. On July 18, 2019, President Trump announced that U.S. forces in the Gulf had downed an Iranian drone via electronic jamming in "defensive action" over the Strait of Hormuz (see Figure 3 ). Iran denied that any of its drones were shot down. UK-Iran Tensions and Iran Tanker Seizures U.S.-Iran tensions spilled over into confrontations between Iran and the UK. On July 4, 2019, authorities from the British Overseas Territory Gibraltar, backed by British marines, impounded an Iranian tanker, the Grace I , off the coast of Gibraltar for allegedly violating an EU embargo on the provision of oil to Syria. Iranian officials termed the seizure an act of piracy, and in subsequent days, the IRGC Navy sought to intercept a UK-owned tanker in the Gulf, the British Heritage , but the force was reportedly driven off by a British warship. On July 19, the IRGC Navy seized a British-flagged tanker near the Strait of Hormuz, the Stena Impero , claiming variously that it violated Iranian waters, was polluting the Gulf, collided with an Iranian vessel, or that the seizure was retribution for the seizure of the Grace I . On July 22, 2019, the UK's then-Foreign Secretary Jeremy Hunt explained the government's reaction to the Stena Impero seizure as pursuing diplomacy with Iran to peacefully resolve the dispute, while at the same time sending additional naval vessels to the Gulf to help secure UK commercial shipping. On August 15, 2019, following a reported pledge by Iran not to deliver the oil cargo to Syria, a Gibraltar court ordered the ship (renamed the Adrian Darya 1) released. Gibraltar courts turned down a U.S. Justice Department request to impound the ship as a violator of U.S. sanctions on Syria and on the IRGC, which the U.S. filing said was financially involved in the tanker and its cargo. The ship apparently delivered its oil to Syria despite the pledge and, as a consequence, the United States imposed new sanctions on individuals and entities linked to the ship and to the IRGC. On September 22, 2019, Iran released the Stena Impero . Separate from the UK-Iran dispute over the Grace I and the Stena Impero , Iran seized an Iraqi tanker on August 5, 2019, for allegedly smuggling Iranian diesel fuel to "Persian Gulf Arab states." Attack on Saudi Energy Infrastructure in September 201926 Iran appeared to escalate tensions significantly by conducting an attack, on September 14, 2019, on multiple locations within critical Saudi energy infrastructure sites at Khurais and Abqaiq. The Houthi movement in Yemen, which receives arms and other support from Iran, claimed responsibility but Secretary of State Pompeo stated "Amid all the calls for de-escalation, Iran has now launched an unprecedented attack on the world's energy supply. There is no evidence the attacks came from Yemen." Press reports stated that U.S. intelligence indicates that Iran itself was the staging ground for the attacks, in which cruise missiles, possibly assisted by unmanned aerial vehicles, struck nearly 20 targets at those Saudi sites. Iranian officials denied responsibility for the attack. The attack shut down a significant portion of Saudi oil production and, whether conducted by Iran itself or by one of its regional allies, escalated U.S.-Iran and Iran-Saudi tensions and demonstrated a significant capability to threaten U.S. allies and interests. President Trump stated on September 16, 2019, that he would "like to avoid" conflict with Iran and the Administration did not retaliate militarily. U.S. officials did announce modest increases in U.S. forces in the region and some new U.S. sanctions on Iran. The attacks on the Saudi infrastructure raised several broad questions, including What is the extent and durability of the long-standing implicit and explicit U.S. security guarantees to the Gulf states? Have Iran's military technology capabilities advanced further than has been estimated by U.S. officials and the U.S. intelligence community? U.S. Sanctions Responses to Iranian Provocations As tensions with Iran increased, the Trump Administration increased economic pressure on Iran to weaken it strategically, and compel it to negotiate a broader resolution of U.S.-Iran differences. On May 8, 2019, the President issued Executive Order 13871, blocking U.S.-based property of persons and entities determined to have conducted significant transactions with Iran's iron, steel, aluminum, or copper sectors. On June 24, 2019, President Trump issued Executive Order 13876, blocking the U.S.-based property of Supreme Leader Ali Khamene'i and his top associates. Sanctions on several senior officials, including Iran's Foreign Minister Mohammad Javad Zarif, have since been imposed under that Order. On September 4, 2019, the State Department Special Representative for Iran and Senior Advisor to the Secretary of State Brian Hook said the United States would offer up to $15 million to any person who helps the United States disrupt the financial operations of the IRGC and its Qods Forceâthe IRGC unit that assists Iran-linked forces and factions in the region. The funds are to be drawn from the long-standing "Rewards for Justice Program" that provides incentives for persons to help prevent acts of terrorism. On September 20, 2019, the Trump Administration imposed additional sanctions on Iran's Central Bank by designating it a terrorism supporting entity under Executive Order 13224. The Central Bank was already subject to a number of U.S. sanctions, rendering unclear whether any new effect on the Bank's ability to operate would result. Also sanctioned was an Iranian sovereign wealth fund, the National Development Fund of Iran. In early 2020, U.S. officials indicated that they would use all available options to achieve an extension of the arms transfer ban on Iran provided by U.N. Security Council Resolution 2231, and which expires on October 18, 2020. U.S. officials insisted that the ban be extended in order to prohibit Russia and China from proceeding with planned arms sales to Iran, which would have the effect of increasing the conventional military threat from Iran. See CRS In Focus IF11429, U.N. Ban on Iran Arms Transfers , by Kenneth Katzman. JCPOA-Related Iranian Responses30 Since the Trump Administration's May 2018 announcement that the United States would no longer participate in the JCPOA, Iranian officials repeatedly have rejected renegotiating the agreement or discussing a new agreement. Tehran also has conditioned its ongoing adherence to the JCPOA on receiving the agreement's benefits from the remaining JCPOA parties, collectively known as the "P4+1." On May 10, 2018, Iranian Foreign Minister Mohammad Javad Zarif wrote that, in order for the agreement to survive, "the remaining JCPOA Participants and the international community need to fully ensure that Iran is compensated unconditionally through appropriate national, regional and global measures." He added that Iran has decided to resort to the JCPOA mechanism [the Joint Commission established by the agreement] in good faith to find solutions in order to rectify the United States' multiple cases of significant non-performance and its unlawful withdrawal, and to determine whether and how the remaining JCPOA Participants and other economic partners can ensure the full benefits that the Iranian people are entitled to derive from this global diplomatic achievement. Tehran also threatened to reconstitute and resume the country's pre-JCPOA nuclear activities. Several meetings of the JCPOA-established Joint Commission since the U.S. withdrawal have not produced a firm Iranian commitment to the agreement. Tehran has argued that the remaining JCPOA participants' efforts have been inadequate to sustain the agreement's benefits for Iran. In May 8, 2019, letters to the other JCPOA participant governments, Iran announced that, as of that day, Tehran had stopped "some of its measures under the JCPOA," though the government emphasized that it was not withdrawing from the agreement. Specifically, Iranian officials said that the government will not transfer low enriched uranium (LEU) or heavy water out of the country in order to maintain those stockpiles below the JCPOA-mandated limits. A May 8, 2019, statement from Iran's Supreme National Security Council explained that Iran "does not anymore see itself committed to respecting" the JCPOA-mandated limits on LEU and heavy water stockpiles. Beginning in July 2019, the International Atomic Energy Agency (IAEA) verified that some of Iran's nuclear activities were exceeding JCPOA-mandated limits; the Iranian government has since increased the number of such activities. Specifically, according to IAEA reports, Iran has exceeded JCPOA-mandated limits on its heavy water stockpile, the number of installed centrifuges in Iran's pilot enrichment facility, Iran's LEU stockpile, and the LEU's concentration of the relevant fissile isotope uranium-235. In addition, Tehran is conducting JCPOA-prohibited research and development activities, as well as centrifuge manufacturing, and has also begun to enrich uranium at its Fordow enrichment facility. The Iranian government announced in a January 5, 2020, statement "the fifth and final step in reducing" Tehran's JCPOA commitments, explaining that Tehran would "set aside the final operational restrictions under the JCPOA which is 'the restriction on the number of centrifuges.' " The statement provided no details regarding concrete changes to Iran's nuclear program, but the term "restrictions" may refer to the JCPOA-mandated limits on installed centrifuges at the country's commercial enrichment facility. According to a March report from the IAEA Director General., Iran has not exceeded these limits. The January 5 announcement added that "[i]n case of the removal of sanctions and Iran benefiting from the JCPOA," Iran "is ready to resume its commitments" pursuant to the agreement. In a May 6 speech, Iranian President Hassan Rouhani characterized Tehran's aforementioned actions as a withdrawal from the government's JCPOA commitments "in an equal scale," Whenever the United States and P4+1 "are ready to observe their full commitments under the JCPOA," Iran "will return to the JCPOA the same day," he added. According to an article published May 6, Iran's Permanent Representative to the IAEA Kazzem Gharibabdi stated that Iran could reduce or end its cooperation with the IAEA if the United States and P4+1 continue actions which, Tehran argues, damage the JCPOA. Conflict Erupts (December 2019-January 2020) In early December 2019, press reports and U.S. officials indicated that Iran was supplying short- range missiles to allied forces inside Iraq. A series of indirect fire attacks in mid-December 2019 targeted Iraqi military facilities where U.S. forces are co-located. In response, Secretary Pompeo issued a statement saying, "We must also use this as an opportunity to remind Iran's leaders that any attacks by them, or their proxies of any kind, that harm Americans, our allies, or our interests will be answered with a decisive U.S. response." Secretary of Defense Mark Esper stated that he urged then-Iraqi Prime Minister Adel Abd Al Mahdi to "take proactive actionsâ¦to get that under control." On December 27, 2019, a rocket attack on a base near Kirkuk in northern Iraq killed a U.S. contractor and wounded four U.S. service members and two Iraqi service members. Two days later, the U.S. launched retaliatory airstrikes on five facilities (three in Iraq, two in Syria) used by the Iran-backed Iraqi armed group Kata'ib Hezbollah (KH), a U.S.-designated Foreign Terrorist Organization to which the U.S. attributed the attack. KH leader and leading figure in the Iraqi-state affiliated Popular Mobilization Forces Abu Mahdi al Muhandis said dozens of fighters were killed and injured and promised a "very tough response" on U.S. forces in Iraq. Iraqi leaders, including those who want to maintain good relations with both the United States and Iran, criticized the strikes as a "violation of Iraqi sovereignty." The hostilities came as Iran sought to preserve its political influence amidst large-scale demonstrations in which hundreds of protestors were killed by security forces and which contributed to Abd Al Mahdi's resignation that month. He continues to serve in a caretaker role while Iraqi political leaders negotiate a transition. In a December 6, 2019 press briefing announcing sanctions designations of several Iran-linked Iraqi groups and individuals, Assistant Secretary of State for Near Eastern Affairs David Schenker said the United States Government will work with anyone in the Iraqi Government who is willing to put Iraqi interests first.... This is a sine qua non . But we see in the process of establishing a new government or determining who the next prime minister will be that [IRGC-QF commander] Qasem Soleimani is in Baghdad working this issue. It seems to us that foreign terrorist leaders, or military leaders, should not be meeting with Iraqi political leaders to determine the next premier of Iraq, and this is exactly what the Secretary says about being perhaps the textbook example of why Iran does not behave and is not a normal state. This is not normal. This is not reasonable. This is unorthodox and it is incredibly problematic, and it is a huge violation of Iraqi sovereignty. On December 31, 2019, two days after the U.S. airstrikes against KH targets in Iraq and Syria, supporters of KH and other Iran-backed Iraqi militias surrounded and then entered the U.S. Embassy in Baghdad, setting some outer buildings on fire. The militiamen withdrew after their leaders said they obtained acting Prime Minister Abdul Mahdi's promise for "serious work" on a parliamentary vote to expel U.S. forces from the country, a long-sought goal of Iran and its Iraqi allies. President Trump tweeted that Iran, which "orchestrat[ed the] attack," would "be held fully responsible for lives lost, or damage incurred, at any of our facilities. They will pay a very BIG PRICE!" U.S. Escalation and Aftermath: Drone Strike Kills QasemÂ Soleimani On January 3, 2020, Iraq time, a U.S. military armed drone strike killed IRGC-QF Commander Major General Qasem Soleimani in what the Defense Department termed a "defensive action." The statement cited Soleimani's responsibility for "the deaths of hundreds of Americans and coalition service members" and his approval of the Embassy blockade, and stated that he was "actively developing plans to attack American diplomats and service members in Iraq and throughout the region." The strike, conducted while Soleimani was leaving Baghdad International Airport, also killed KH leader Abu Mahdi al-Muhandis, who also headed the broader Popular Mobilization Forces (PMF) made up mostly of militia fighters, and other Iranian and Iraqi figures. Iraq's Council of Representatives (CoR) on January 5, 2020, voted to direct the government "to work towards ending the presence of all foreign troops on Iraqi soil," according to the media office of the Iraqi Parliament. Soleimani was widely regarded as one of the most powerful and influential figures in Iran, with a direct channel to Khamene'i, who serves as Commander-in-Chief of all Iranian armed forces. One expert described him as "the military center of gravity of Iran's regional hegemonic efforts" and "an operational and organization genius who likely has no peer in the upper ranks of the Islamic Revolutionary Guard Corps." Others contend that "he was only the agent of a government policy that preceded him and will continue without him." Iranian Responses and Subsequent Hostilities Secretary of State Pompeo underscored that the United States is not seeking further escalation, but Iran's leaders, including Supreme Leader Ali Khamene'i, threatened to retaliate for the Soleimani killing. That retaliation, codenamed "Operation Martyr Soleimani" came on January 8, 2020, in the form of an Iranian ballistic missile strike on two Iraqi bases â Ayn al-Asad in western Iraq and an airbase near Irbil, in Kurdish-controlled northern Iraq. The United States reported no "casualties," according to a statement by President Trump on January 8, 2020, and the United States reportedly had some advanced warning of the attack, via Iraqi officials. The President added that "Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world," and there was no U.S. military retaliation for Iran's missile strike. Still, over the coming weeks, about 110 U.S. military personnel were diagnosed with various forms of traumatic brain injury, mostly concussions from the blast. Iran's ability to hit Ayn al-Asad with some degree of precision indicated growing capability in Iran's missile capabilities. For the past several years, the U.S. intelligence community, in its annual worldwide threat assessment briefings for Congress, has assessed that Iran has "the largest inventory of ballistic missiles in the region," and the 2019 version of the annual, congressionally-mandated report on Iran's military power by the Defense Intelligence Agency indicated that Iran is advancing its drone technology and the precision targeting of the missiles it provides to its regional allies. Israel asserts that these advances pose a sufficient threat to justify Israeli attacks against Iranian and Iran-allied targets in the region, including in Lebanon, Syria, and Iraq. Tensions Resurface in Spring 2020: Iraq and the Gulf After about two months marked only by casualty-free occasional rocket attacks in Iraq by Iran-backed factions, U.S.-Iran tensions began to rise again in March 2020. On March 11, 2020, a rocket attack on Camp Taji in Iraq, allegedly by KH, killed two U.S. military personnel and one British medic serving with the U.S.-backed coalition fighting the Islamic State organization. On March 13, 2020, the commander of U.S. Central Command (CENTCOM), Gen. Kenneth McKenzie, said the United State used manned aircraft to strike several sites near Baghdad that KH uses as storage areas for advanced conventional weapons, heavy rockets, and associated propellant. According to McKenzie: "We also assessed that the destruction of these sites will degrade Kata'ib Hezbollah's ability to conduct future strikes." However, the deterrent effect of the U.S. strikes appear limited. On March 15, 2020, according to the Defense Department, three U.S. service personnel were injured in another rocket attack on the same location, Camp Taji, of which two were seriously wounded. Some Iraqi military personnel were also wounded. The United States did not retaliate. The new hostilities in Iraq came amid Iraq's struggles to establish a government to succeed that of Adel Abdul Mahdi, who remains a caretaker prime minister. Soleimani's successor, Esmail Qaani, made his first reported visit to Iraq in late March, reportedly in an effort to unite Iran-backed factions on a successor to Abdul Mahdi. The Iraqi political struggles to form a new government reflect the continuing Iranian and U.S. effort to limit each other's influence on Iraqi politics. Several weeks after the Iraq rocket attacks, Iran resumed some provocations in the Persian Gulf. On April 14, 2020, the IRGC Navy forcibly boarded and steered into Iranian waters a Hong Kong-flagged tanker. The next day, eleven IRGC Navy small boats engaged in what the State Department called "high speed, harassing approaches" of five U.S. naval vessels conducting routine exercises in the Gulf." The United States, either separately or as part of the IMSC Gulf security mission discussed above, did not respond militarily to the Iranian actions. However, on April 22, President Trump posted a message on Twitter saying: "I have instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea." U.S. defense officials characterized the President's message as a warning Iran against further such actions, but they stressed that U.S. commanders have discretion about how to respond to future provocative actions by Iran. Also on April 22, the IRGC announced that it had launched a "military satellite" into orbit. Secretary of State Pompeo reacted by stating "I think today's launch proves what we've been saying all along here in the United States [that Iran's space launches are not for purely commercial purposes]." On May 6, 2020, the Chairman of the Joint Chiefs of Staff Gen. Mark Milley stated "Well, let me put it this way, they launched a satellite vehicle, I think we publicly had stated it was tumbling. So the satellite itself, not overly concerned about it, but the missile technology, the secondary and second and third order missile technology and the lesson learned from that, that is a concern because, you know, different missiles can do different things and one can carry a satellite, another can carry some sort of device that can explode. So, the bottom line is yes, it is a security concern any time Iran is testing any type of long-range missile." Efforts to De-Escalate Tensions U.S. partner countries and U.N. officials have consistently called for the de-escalation of tensions and the avoidance of war. The EU countries have refused to join the U.S. maximum pressure campaign as a consequence of Iran's provocative acts, although the UK, France, and Germany have urged Iran to negotiate a new JCPOA that includes limits on Iran's missile development. Some U.S. allies have joined a U.S. effort to deter Iran from further attacks on shipping in the Gulf. EU officials have said that they still hope to preserve the JCPOA could be preserved. The United States and Iran do not have diplomatic relations and there have been no known high-level talks between Iran and Administration officials since the Trump Administration withdrew from the JCPOA. Prior to the Soleimani killing, various third country leaders, such as Japanese Prime Minister Shinzo Abe in mid-2019 and again in a visit to Iran in December 2019, have sought to move Tehran and Washington toward direct talks. Several Gulf countries have sent delegations to Iran to try to ease U.S.-Iran tensions that the Gulf leaders say could lead to severe destruction in the Gulf states themselves in the event of conflict. A UAE delegation that visited Tehran in late July 2019 undertook the first UAE security talks with Iran since 2013. In late 2019, Saudi Arabia reportedly sought help from Pakistan and Iraq in undertaking talks with Iran to lower tensions. In August 2019, French President Macron appeared to make progress but ultimately did not produce U.S.-Iran talks. While hosting the G-7 summit in Biarritz, Macron invited Foreign Minister Zarif to meet with him there. No Trump-Zarif meeting took place in Biarritz but, at a press conference at the close of the summit, President Trump reiterated his willingness, in principle, to meet with Iranian President Hassan Rouhani, presumably during the U.N. General Assembly meetings in New York in September. President Trump reportedly considered supporting a French proposal to provide Iran with a credit line as an incentive for Iran to meet with him. However, in the wake of the September 14, 2019 attacks in Saudi Arabia and since, the Supreme Leader has stated that there would be no U.S.-Iran talks and Rouhani and Zarif have since repeatedly restated the view that U.S. sanctions be lifted before any such talks. Iran-Focused Additional U.S. Military Deployments For the stated purpose of trying to deter further Iranian attacks and protecting U.S. forces already in the region, the United States added forces and military capabilities in the region. As of early 2020, approximately 14,000 U.S. military personnel had been added to a baseline of more than 60,000 U.S. forces in and around the Persian Gulf, which include those stationed at military facilities in the Arab states of the Gulf Cooperation Council (GCC: Saudi Arabia, Kuwait, UAE, Qatar, Oman, and Bahrain), and those in Iraq and Afghanistan. Defense Department officials indicated that the additional deployments mostly restored forces who were redeployed from the region a few years ago, and did not represent preparation for any U.S. offensive against Iran. Among the additional deployments, the United States sent additional Patriot and Terminal High Altitude Area Defense (THAAD) missile defense systems in the region. Some of the additional forces sent deployed to Prince Sultan Air Base in Saudi Arabia, which is south of Riyadh. U.S. forces used the base to enforce a no-fly zone over southern Iraq during the 1990s, but left there after Saddam Hussein was ousted by Operation Iraqi Freedom in 2003. As 2020 progressed, some U.S. deployments changed. In March 2020, hundreds of U.S forces in Iraq were redeployed from smaller bases in Iraq to larger ones, and some were withdrawn to locations elsewhere in the region. The redeployments reportedly were due to a waning threat in Iraq from the Islamic State organization as well as the apparent need to better defend U.S. forces from attacks by Iran-backed militias. In early May 2019, it was reported that the United States had withdrawn some Patriot air defenses and combat aircraft from Saudi Arabia and other locations in the Gulf, although U.S. officials denied that the deployments signaled an altered assessment of the Iran threat or would degrade U.S. capabilities to deter Iran. Gulf Maritime Security Operation Iran's naval actions in the Gulf in mid-2019 prompted the formation of a new, U.S.-led military operation to protect commercial shipping in the Gulf. The maritime security and monitoring initiative for the Gulf, the Bab el-Mandeb Strait, and the Suez Canal was termed "Operation Sentinel." Operation Sentinel began activities in August 2019 and was then formally inaugurated as the International Maritime Security Construct (IMSC) in Bahrain in November 2019. It consists of: the United States, the UK, the UAE, Saudi Arabia, Bahrain, Qatar, Kuwait, Albania, and Australia) operating four sentry ships at crucial points in the Gulf. Additionally, Israeli Foreign Minister Yisrael Katz said Israel would join the coalition, but Defense Department officials have not listed Israel as a participant in IMSC to date. China's ambassador to the UAE said in early August 2019 that China was considering joining the mission, although no announcement of China's participation has since been made. The IMSC supplements longstanding multilateral Gulf naval operations that have targeted smuggling, piracy, the movement of terrorists and weaponry, and other potential threats in the Gulf. Other countries have started separate maritime security missions in the Gulf. France leads a maritime security mission, headquartered in Abu Dhabi, that began activities in early 2020. India has sent some naval vessels to the Gulf to protect Indian commercial ships. In December 2019, Japan sent vessels to protect Japanese shipping, also separate from the IMSC. U.S. Military Action: Options andÂ Considerations The military is a tool of national power that the United States can use to advance its objectives, and the design of a military campaign and effective military options depend on the policy goals that U.S. leaders seek to accomplish. The Trump Administration has stated that its "core objective ... is the systemic change in the Islamic Republic's hostile and destabilizing actions, including blocking all paths to a nuclear weapon and exporting terrorism." As such, the military could be used in a variety of ways to try to contain and dissuade Iran from prosecuting its "hostile and destabilizing actions." These ways range from further increasing presence and posture in the region to use of force to change Iran's regime. As with any use of the military instrument of national power, any employment of U.S. forces in this scenario could result in further escalation of a crisis. U.S. military action may not be the appropriate tool to achieve systemic change within the Iranian regime, and may potentially set back the political prospects of Iranians sympathetic to a change of regime. Some observers question the utility of military power against Iran due to global strategic considerations. The 2017 National Security Strategy and 2018 National Defense Strategy both noted that China and Russia represent the key current and future strategic challenges to the United States. As such, shifting additional military assets into the United States Central Command (CENTCOM) area of responsibility requires diverting them from use in other theaters such as Europe and the Pacific, thereby sacrificing other long-term U.S. strategic priorities. Secretary of Defense Mark Esper and other U.S. officials have stated that the additional U.S. deployments since May 2019 are intended to deter Iran from taking any further provocative actions and position the United States to defend U.S. forces and interests in the region. Iranian attacks after previous U.S. deployments could suggest that deploying additional assets and capabilities might not necessarily succeed in deterring Iran from using military force. On the other hand, there are risks to military inaction that might potentially outweigh those associated with the employment of force. For example, should Iran acquire a nuclear weapons capability, U.S. options to contain and dissuade it from prosecuting hostile activities could be significantly more constrained than they are at present. For illustrative purposes only, below are some potential additional policy options related to the possible use of military capabilities against Iran. Not all of these options are mutually exclusive, nor do they represent a complete list of possible options, implications, and risks. Congress has assessed its role in any decisions regarding whether to undertake military action against Iran, as discussed later in this report. The following discussion is based entirely on open-source materials. Operations against Iranian a llies or proxies . The Administration might decide to take additional action against Iran's allies or proxies, such as Iran-backed militias in Iraq, Lebanese Hezbollah, or the Houthi movement in Yemen. Such action could take the form of air operations, ground operations, special operations, or cyber and electronic warfare. Further attacks on Iranian allies could be intended to seriously degrade the military ability of the Iranian ally in question and undertaken by U.S. forces, partner government forces, or both. At the same time, military action against Iran's allies could harm the prospects for resolution of the regional conflicts in which Iranian allies operate. Retaliatory Action against Iranian Key Targets and Facilities. The United States retains the option to undertake air and missile strikes, as well as special operations and cyber and electronic warfare against Iranian targets, such as IRGC Navy vessels in the Gulf, nuclear facilities, military bases, ports, oil installations, and any number of other targets within Iran itself. Iran's major Gulf ports are shown in Figure 2 . Blockade. Another option could be to establish a naval and/or air quarantine of Iran. Iran has periodically, including since mid-2019, threatened to block the vital Strait of Hormuz. Some observers have in past confrontations raised the prospect of a U.S. closure of the Strait or other waterways to Iranian commerce. Under international law, blockades are acts of war. Invasion. Although apparently far from current consideration because of the potential risks and costs, a U.S. invasion of Iran to oust its regime is among the options. Press reports in May 2019 indicated that the Administration was considering adding more than 100,000 military forces to the Gulf to deter Iran from any attacks. Such an option, if exercised, might be interpreted as potentially enhancing the U.S. ability to conduct ground attacks inside Iran, although military experts have indicated that a U.S. invasion and/or occupation of Iran would require many more U.S. forces than those cited. Iran's population is about 80 million, and its armed forces collectively number about 525,000, including 350,000 regular military and 125,000 IRGC forces. There has been significant antigovernment unrest in Iran over the past 10 years, but there is no indication that there is substantial support inside Iran for a U.S. invasion to change Iran's regime. Resource Implications of Military Operations Without a more detailed articulation of how the military might be employed to accomplish U.S. objectives vis-a-vis Iran, and a reasonable level of confidence about how any conflict might proceed, it is difficult to assess with any precision the likely fiscal costs of a military campaign, or even just heightened presence. Still, any course of action listed in this report is likely to incur significant additional costs. Factors that might influence the level of expenditure required to conduct operations include, but are not limited to, the following: The number of additional forces, and associated equipment, deployed to the Persian Gulf or the CENTCOM theater more broadly. In particular, deploying forces and equipment from the continental United States (if required) would likely add to the costs of such an operation due to the logistical requirements of moving troops and materiel. The mission set that U.S. forces are required to prosecute and its associated intensity. Some options leading to an increase of the U.S. posture in the Persian Gulf might require upgrading existing facilities or new construction of facilities and installations. By contrast, options that require the prosecution of combat operations would likely result in significant supplemental and/or overseas contingency operations requests, particularly if U.S. forces are involved in ground combat or post-conflict stabilization operations. The time required to accomplish U.S. objectives. As demonstrated by operations in Iraq and Afghanistan, the period of anticipated involvement in a contingency is a critical basis for any cost analysis. On one hand, a large stabilizing or occupying ground force to perform stabilization and reconstruction operations, for example, would likely require the expenditure of significant U.S. resources. At the same time, there is potential for some U.S. costs to be offset by contributions. The Persian Gulf states and other countries have a track record of offsetting U.S. costs for Gulf security. In the current context, President Trump stated in October 2019 that Saudi Arabia would pay for the deployment of additional U.S. troops and capabilities to assist with the territorial defense of Saudi Arabia and the deterrence of Iranian aggression in the region overall, and subsequent reports indicate that U.S. and Saudi officials are negotiating a cost-sharing arrangement for the new deployments. Congressional Responses Members of Congress have responded in different ways to tensions with Iran and to related questions of authorization for the use of military force. Various instances of increased U.S.-Iran tensions in the past year have prompted some Members to express concern about or support for potential military operations against Iran. These episodes include the June 2019 attacks against tankers in the Gulf of Oman and Iran's shoot down of a U.S. military drone; the September 2019 attacks on Saudi oil facilities at Abqaiq and Khurais; and the buildup of U.S. forces in the region in response to Iranian activities. Throughout this period, Congress passed legislation with provisions specifying that authorization for the use of force against Iran is not granted. For instance, Section 1284 of the FY2020 NDAA ( P.L. 116-92 , December 2019) states that "Nothing in this Act, or any amendment made by this Act, may be construed to authorize the use of military force, including the use of military force against Iran or any other country." Similarly, Section 9024 of Division A of H.R. 1158 , the Consolidated Appropriations Act, 2020, ( P.L. 116-89 , December 2019) states that "Nothing in this Act may be construed as authorizing the use of force against Iran." However, Congress has not prohibited the use of funds for operations against Iran, despite the introduction of several standalone measures that would do so, such as the Prevention of Unconstitutional War with Iran Act of 2019 ( H.R. 2354 / S. 1039 ).While the House did pass legislation that included a prohibition on funding for the use of force against Iran, including Section 1229 of H.R. 2500 , the National Defense Authorization Act (NDAA) for FY2020, the Senate rejected by a 50-40 vote an amendment ( S.Amdt. 883 ) that would have added similar text to its version of the FY2020 NDAA, and the House-passed language was not included in conference text of the bill. In response to these moves, President Trump stated that he had wide-ranging authority to unilaterally initiate the use of military force, as successive Administrations have maintained. For instance, in a June 24 interview, President Trump reiterated that he believed he had the authority to order military action against Iran without congressional approval, adding, "I do like keeping them [Congress] abreast, but I don't have to do it, legally." Secretary Pompeo suggested in an April 2019 hearing that the 2001 authorization for use of military force (AUMF, P.L. 107-40 ) against those responsible for the September 11 terrorist attacks could potentially apply to Iran based on the country's ties with Al Qaeda. However, in a June 28, 2019, letter to House Foreign Affairs Committee Chairman Eliot Engel, Assistant Secretary of State for Legislative Affairs Mary Elizabeth Taylor stated that "the Administration has not, to date, interpreted either [the 2001 or 2002] AUMF as authorizing military force against Iran, except as may be necessary to defend U.S. or partner forces engaged in counterterrorism operations or operations to establish a stable, democratic Iraq." The killing of IRGC-QF Commander Soleimani in a U.S. drone strike in Baghdad in January 2020 dramatically increased congressional attention to U.S.-Iran tensions and specifically to the authority under which Soleimani was killed and whether that authority might be used to justify further military action. Immediately after the strike, House Speaker Nancy Pelosi said in a statement that the Administration launched the strike that killed Soleimani "without an Authorization for Use of Military Force (AUMF) against Iran" and "without the consultation of the Congress," and called for Congress to be "immediately briefed on this serious situation." Two days later, on January 4, 2020, President Trump submitted a notification to the Speaker of the House and President Pro Tempore of the Senate of the Soleimani drone strike, as pursuant to the War Powers Resolution ( P.L. 93-148 ), including the constitutional and legislative authority for the action. However, according to a media report, the notification "only contained classified information, according to a senior congressional aide, likely detailing the intelligence that led to the action." Speaker Nancy Pelosi criticized the decision to classify the notification in its entirety as "highly unusual." In statements after the strike, National Security Adviser Robert O'Brien asserted that the Authorization for Use of Military Force Against Iraq Resolution of 2002 ("2002 AUMF"; P.L. 107-243 ) provided the President authority to direct the strike against General Soleimani in Iraq. The House voted to repeal the 2002 AUMF on January 30, 2020, when it passed the No War Against Iran Act ( H.R. 550 ); no action has been taken by the Senate. In response to the strike, numerous pieces of legislation were introduced both commending and condemning the Administration for the action (for more, see CRS Report R46148, U.S. Killing of Qasem Soleimani: Frequently Asked Questions ). Perhaps most significant were two resolutions that would direct the President to terminate the involvement of U.S. forces in conflict with Iran. H.Con.Res. 83 , introduced by Representative Elissa Slotkin on January 8, 2020, pursuant to Section 5(c) of the War Powers Resolution. The resolution would direct the President "to terminate the use of United States Armed Forces to engage in hostilities in or against Iran or any part of its government or military," unless Congress specifically authorizes such use of the armed forces, or if such force is necessary and appropriate to defend the United States or its armed forces against "imminent attack." The House voted to adopt H.Con.Res. 83 by a 224-194 vote on January 9, 2020; no action has been taken by the Senate. Questions have been raised about the constitutionality and effect of Section 5(c) concurrent resolutions. S.J.Res. 68 , introduced by Senator Tim Kaine on January 9, 2020, pursuant to Section 1013 of the Department of State Authorization Act, Fiscal Years 1984 and 1985 (50 U.S.C. Â§ 1546a). The resolution would have directed the President to "terminate the use of U.S. armed forces for hostilities" with Iran (changed from an earlier version that would have required "removal" of U.S. armed forces, perhaps a reflection of concern that the original language might precipitate changes in current deployments). The Senate voted to adopt the resolution by a 55-45 vote on February 13, and the House passed it by a 227-186 vote on March 11. President Trump vetoed the resolution on May 6, 2020, describing it as an "insulting" election ploy by congressional Democrats. The statement also stated that the resolution's implication that "the President's constitutional authority to use military force is limited to defense of the United States and its forces against imminent attack" was "incorrect." The Senate failed to override the veto by a vote of 49-44 on May 7, 2020. Possible Issues for Congress Given ongoing tensions with Iran, Members are likely to continue to assess and perhaps try to shape the congressional role in any decisions regarding whether to commit U.S. forces to potential hostilities. In assessing its authorities in this context, Congress might consider, among other things, the following: Does the President require prior authorization from Congress before initiating hostilities with Iran? If so, what actions, under what circumstances, ought to be covered by such an authorization? If not, what existing authorities provide for the President to initiate hostilities? If the executive branch were to initiate and then sustain hostilities against Iran without congressional authorization, what are the implications for the preservation of Congress's role, relative to that of the executive branch, in the war powers function? How, in turn, might the disposition of the war powers issue in connection with the situation with Iran affect the broader question of Congress's status as an equal branch of government, including the preservation and use of other congressional powers and prerogatives? The Iranian government may continue to take aggressive action short of directly threatening the United States and its territories while it continues policies opposed by the United States. What might be the international legal ramifications for undertaking a retaliatory, preventive, or preemptive strikes against Iran in response to such actions without a U.N. Security Council mandate? Conflict with, or increased military activity in or around, Iran could generate significant costs, financial and otherwise. With that in mind, Congress could consider the following: The potential costs of heightened U.S. operations in the CENTCOM area of operations, particularly if they lead to full-scale war and significant postconflict operations. The need for the United States to reconstitute its forces and capabilities, particularly in the aftermath of a major conflict. The impact of the costs of war and post conflict reconstruction on U.S. deficits and government spending. The costs of persistent military confrontation and/or a conflict in the Gulf region to the global economy. The extent to which regional allies, and the international community more broadly, might contribute forces or resources to a military campaign or its aftermath. Summary:	null	96	52,734	52,736	52,736	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Context for Heightened U.S.-Iran Tensions U.S.-Iran relations have been mostly adversarial since the 1979 Islamic Revolution in Iran. U.S. officials and official reports consistently identify Iran's support for militant armed factions in the Middle East region a significant threat to U.S. interests and allies. Attempting to constrain Iran's nuclear program took precedence in U.S. policy after 2002 as that program advanced. The United States also has sought to thwart Iran's purchase of new conventional weaponry and development of ballistic missiles. In May 2018, the Trump Administration withdrew the United States from the 2015 nuclear agreement (Joint Comprehensive Plan of Action, JCPOA), asserting that the accord did not address the broad range of U.S. concerns about Iranian behavior and would not permanently preclude Iran from developing a nuclear weapon. Senior Administration officials explain Administration policy as the application of "maximum pressure" on Iran's economy to (1) compel it to renegotiate the JCPOA to address the broad range of U.S. concerns and (2) deny Iran the revenue to continue to develop its strategic capabilities or intervene throughout the region. Administration officials deny that the policy is intended to stoke economic unrest in Iran. As the Administration has pursued its policy of maximum pressure, including imposing sanctions beyond those in force before JCPOA went into effect in January 2016, bilateral tensions have escalated significantly. Key developments that initially heightened tensions include the following. On April 8, 2019, the Administration designated the Islamic Revolutionary Guard Corps (IRGC) as a Foreign Terrorist Organization (FTO), representing the first time that an official military force was designated as an FTO. The designation stated that "The IRGC continues to provide financial and other material support, training, technology transfer, advanced conventional weapons, guidance, or direction to a broad range of terrorist organizations, including Hezbollah, Palestinian terrorist groups like Hamas and Palestinian Islamic Jihad, Kata'ib Hezbollah in Iraq, al-Ashtar Brigades in Bahrain, and other terrorist groups in Syria and around the Gulf.... Iran continues to allow Al Qaeda (AQ) operatives to reside in Iran, where they have been able to move money and fighters to South Asia and Syria." As of May 2, 2019, the Administration ended a U.S. sanctions exception for any country to purchase Iranian oil, aiming to drive Iran's oil exports to "zero." Since May 2019, the Administration has ended five out of the seven waivers under the Iran Freedom and Counter-Proliferation Act (IFCA, P.L. 112-239 )âwaivers that allow countries to help Iran remain within limits set by the JCPOA. On May 5, 2019, citing reports that Iran or its allies might be preparing to attack U.S. personnel or installations, then-National Security Adviser John Bolton announced that the United States was accelerating the previously planned deployment of the USS Abraham Lincoln Carrier Strike Group and sending a bomber task force to the Persian Gulf region. On May 24, 2019, the Trump Administration notified Congress of immediate foreign military sales and proposed export licenses for direct commercial sales of defense articlesâ training, equipment, and weapons â with a possible value of more than $8 billion, including sales of precision guided munitions (PGMs) to Saudi Arabia and the United Arab Emirates (UAE). In making the 22 emergency sale notifications, Secretary of State Pompeo invoked emergency authority codified in the Arms Export Control Act (AECA), and cited the need "to deter further Iranian adventurism in the Gulf and throughout the Middle East." Iran's Attacks on Tankers in mid-2019 Iran responded to the additional steps in the U.S. maximum pressure campaign in part by demonstrating its ability to harm global commerce and other U.S. interests and to raise renewed concerns about Iran's nuclear activities. Iran apparently has sought to cause international actors, including those that depend on stable oil supplies, to put pressure on the Trump Administration to reduce its sanctions pressure on Iran. On May 12-13, 2019, four oil tankers â two Saudi, one Emirat i , and one Norwegian ship â were damaged . Iran denied involvement, but a Defense Department (DOD) official on May 24, 2019, attributed the tanker attacks to the IRGC. A report to the United Nations based on Saudi, UAE, and Norwegian information found that a "state actor" was likely responsible, but did not name a specific perpetrator. On June 13, 2019, two Saudi tankers in the Gulf of Oman were attacked. Secretary of State Michael Pompeo stated, "It is the assessment of the U.S. government that Iran is responsible for the attacks that occurred in the Gulf of Oman todayâ¦.based on the intelligence, the weapons used, the level of expertise needed to execute the operation, recent similar Iranian attacks on shipping, and the fact that no proxy group in the area has the resources and proficiency to act with such a high degree of sophistication.... " Actions by Iran's Regional Allies Iran's allies in the region have been conducting attacks that might be linked to U.S.-Iran tensions, although it is not known definitively whether Iran directed or encouraged each attack (see Figure 1 for a map of Iran-supported groups). Trump Administration officials, particularly Secretary of State Pompeo, has stated that the United States will hold Tehran responsible for the actions of its regional allies. Some of the most significant actions by Iran-linked forces during mid-2019 are the following: On May 19, 2019, a rocket was fired into the secure "Green Zone" in Baghdad but it caused no injuries or damage. Iran-backed Iraqi militias were widely suspected of the firing and U.S. Defense Department officials attributed it to Iran. The incident came four days after the State Department ordered "nonemergency U.S. government employees" to leave U.S. diplomatic facilities in Iraq, claiming a heightened threat from Iranian allies. An additional rocket attack launched from Iraq included a May 2019 attack on Saudi pipeline infrastructure in Saudi Arabia with an unmanned aerial aircraft, first considered to have been launched from Yemen. Further attacks, discussed below, have led to U.S.-Iran hostilities. In June 2019 and periodically thereafter, the Houthis, who have been fighting against a Saudi-led Arab coalition that intervened in Yemen against the Houthis in March 2015, claimed responsibility for attacks on an airport in Abha, in southern Saudi Arabia, and on Saudi energy installations and targets. The Houthis claimed responsibility for the large-scale attack on Saudi energy infrastructure on September 14, 2019, but, as discussed below, U.S. and Saudi officials have concluded that the attack did not originate from Yemen. In a June 13, 2019, statement, Secretary of State Pompeo asserted Iranian responsibility for a May 31, 2019, car bombing in Afghanistan that wounded four U.S. military personnel. Administration reports have asserted that Iran was providing materiel support to some Taliban militants, but outside experts asserted that the Iranian role in that attack is unlikely. Tensions turn to Hostilities In subsequent weeks, U.S.-Iran tensions erupted into direct hostilities as well as further Iranian actions against U.S. partners. Iran and U.S. Downing of Drones On June 20, 2019, Iran shot down an unmanned aerial surveillance aircraft (RQ-4A Global Hawk Unmanned Aerial Vehicle) near the Strait of Hormuz, claiming it had entered Iranian airspace over the Gulf of Oman. U.S. Central Command officials stated that the drone was over international waters. Later that day, according to his posts on the Twitter social media site, President Trump ordered a strike on three Iranian sites related to the Global Hawk downing, but called off the strike on the grounds that it would have caused Iranian casualties and therefore been "disproportionate" to the Iranian shoot down. The United States did reportedly launch a cyberattack against Iranian equipment used to track commercial ships. On July 18, 2019, President Trump announced that U.S. forces in the Gulf had downed an Iranian drone via electronic jamming in "defensive action" over the Strait of Hormuz (see Figure 3 ). Iran denied that any of its drones were shot down. UK-Iran Tensions and Iran Tanker Seizures U.S.-Iran tensions spilled over into confrontations between Iran and the UK. On July 4, 2019, authorities from the British Overseas Territory Gibraltar, backed by British marines, impounded an Iranian tanker, the Grace I , off the coast of Gibraltar for allegedly violating an EU embargo on the provision of oil to Syria. Iranian officials termed the seizure an act of piracy, and in subsequent days, the IRGC Navy sought to intercept a UK-owned tanker in the Gulf, the British Heritage , but the force was reportedly driven off by a British warship. On July 19, the IRGC Navy seized a British-flagged tanker near the Strait of Hormuz, the Stena Impero , claiming variously that it violated Iranian waters, was polluting the Gulf, collided with an Iranian vessel, or that the seizure was retribution for the seizure of the Grace I . On July 22, 2019, the UK's then-Foreign Secretary Jeremy Hunt explained the government's reaction to the Stena Impero seizure as pursuing diplomacy with Iran to peacefully resolve the dispute, while at the same time sending additional naval vessels to the Gulf to help secure UK commercial shipping. On August 15, 2019, following a reported pledge by Iran not to deliver the oil cargo to Syria, a Gibraltar court ordered the ship (renamed the Adrian Darya 1) released. Gibraltar courts turned down a U.S. Justice Department request to impound the ship as a violator of U.S. sanctions on Syria and on the IRGC, which the U.S. filing said was financially involved in the tanker and its cargo. The ship apparently delivered its oil to Syria despite the pledge and, as a consequence, the United States imposed new sanctions on individuals and entities linked to the ship and to the IRGC. On September 22, 2019, Iran released the Stena Impero . Separate from the UK-Iran dispute over the Grace I and the Stena Impero , Iran seized an Iraqi tanker on August 5, 2019, for allegedly smuggling Iranian diesel fuel to "Persian Gulf Arab states." Attack on Saudi Energy Infrastructure in September 201926 Iran appeared to escalate tensions significantly by conducting an attack, on September 14, 2019, on multiple locations within critical Saudi energy infrastructure sites at Khurais and Abqaiq. The Houthi movement in Yemen, which receives arms and other support from Iran, claimed responsibility but Secretary of State Pompeo stated "Amid all the calls for de-escalation, Iran has now launched an unprecedented attack on the world's energy supply. There is no evidence the attacks came from Yemen." Press reports stated that U.S. intelligence indicates that Iran itself was the staging ground for the attacks, in which cruise missiles, possibly assisted by unmanned aerial vehicles, struck nearly 20 targets at those Saudi sites. Iranian officials denied responsibility for the attack. The attack shut down a significant portion of Saudi oil production and, whether conducted by Iran itself or by one of its regional allies, escalated U.S.-Iran and Iran-Saudi tensions and demonstrated a significant capability to threaten U.S. allies and interests. President Trump stated on September 16, 2019, that he would "like to avoid" conflict with Iran and the Administration did not retaliate militarily. U.S. officials did announce modest increases in U.S. forces in the region and some new U.S. sanctions on Iran. The attacks on the Saudi infrastructure raised several broad questions, including What is the extent and durability of the long-standing implicit and explicit U.S. security guarantees to the Gulf states? Have Iran's military technology capabilities advanced further than has been estimated by U.S. officials and the U.S. intelligence community? U.S. Sanctions Responses to Iranian Provocations As tensions with Iran increased, the Trump Administration increased economic pressure on Iran to weaken it strategically, and compel it to negotiate a broader resolution of U.S.-Iran differences. On May 8, 2019, the President issued Executive Order 13871, blocking U.S.-based property of persons and entities determined to have conducted significant transactions with Iran's iron, steel, aluminum, or copper sectors. On June 24, 2019, President Trump issued Executive Order 13876, blocking the U.S.-based property of Supreme Leader Ali Khamene'i and his top associates. Sanctions on several senior officials, including Iran's Foreign Minister Mohammad Javad Zarif, have since been imposed under that Order. On September 4, 2019, the State Department Special Representative for Iran and Senior Advisor to the Secretary of State Brian Hook said the United States would offer up to $15 million to any person who helps the United States disrupt the financial operations of the IRGC and its Qods Forceâthe IRGC unit that assists Iran-linked forces and factions in the region. The funds are to be drawn from the long-standing "Rewards for Justice Program" that provides incentives for persons to help prevent acts of terrorism. On September 20, 2019, the Trump Administration imposed additional sanctions on Iran's Central Bank by designating it a terrorism supporting entity under Executive Order 13224. The Central Bank was already subject to a number of U.S. sanctions, rendering unclear whether any new effect on the Bank's ability to operate would result. Also sanctioned was an Iranian sovereign wealth fund, the National Development Fund of Iran. In early 2020, U.S. officials indicated that they would use all available options to achieve an extension of the arms transfer ban on Iran provided by U.N. Security Council Resolution 2231, and which expires on October 18, 2020. U.S. officials insisted that the ban be extended in order to prohibit Russia and China from proceeding with planned arms sales to Iran, which would have the effect of increasing the conventional military threat from Iran. See CRS In Focus IF11429, U.N. Ban on Iran Arms Transfers , by Kenneth Katzman. JCPOA-Related Iranian Responses30 Since the Trump Administration's May 2018 announcement that the United States would no longer participate in the JCPOA, Iranian officials repeatedly have rejected renegotiating the agreement or discussing a new agreement. Tehran also has conditioned its ongoing adherence to the JCPOA on receiving the agreement's benefits from the remaining JCPOA parties, collectively known as the "P4+1." On May 10, 2018, Iranian Foreign Minister Mohammad Javad Zarif wrote that, in order for the agreement to survive, "the remaining JCPOA Participants and the international community need to fully ensure that Iran is compensated unconditionally through appropriate national, regional and global measures." He added that Iran has decided to resort to the JCPOA mechanism [the Joint Commission established by the agreement] in good faith to find solutions in order to rectify the United States' multiple cases of significant non-performance and its unlawful withdrawal, and to determine whether and how the remaining JCPOA Participants and other economic partners can ensure the full benefits that the Iranian people are entitled to derive from this global diplomatic achievement. Tehran also threatened to reconstitute and resume the country's pre-JCPOA nuclear activities. Several meetings of the JCPOA-established Joint Commission since the U.S. withdrawal have not produced a firm Iranian commitment to the agreement. Tehran has argued that the remaining JCPOA participants' efforts have been inadequate to sustain the agreement's benefits for Iran. In May 8, 2019, letters to the other JCPOA participant governments, Iran announced that, as of that day, Tehran had stopped "some of its measures under the JCPOA," though the government emphasized that it was not withdrawing from the agreement. Specifically, Iranian officials said that the government will not transfer low enriched uranium (LEU) or heavy water out of the country in order to maintain those stockpiles below the JCPOA-mandated limits. A May 8, 2019, statement from Iran's Supreme National Security Council explained that Iran "does not anymore see itself committed to respecting" the JCPOA-mandated limits on LEU and heavy water stockpiles. Beginning in July 2019, the International Atomic Energy Agency (IAEA) verified that some of Iran's nuclear activities were exceeding JCPOA-mandated limits; the Iranian government has since increased the number of such activities. Specifically, according to IAEA reports, Iran has exceeded JCPOA-mandated limits on its heavy water stockpile, the number of installed centrifuges in Iran's pilot enrichment facility, Iran's LEU stockpile, and the LEU's concentration of the relevant fissile isotope uranium-235. In addition, Tehran is conducting JCPOA-prohibited research and development activities, as well as centrifuge manufacturing, and has also begun to enrich uranium at its Fordow enrichment facility. The Iranian government announced in a January 5, 2020, statement "the fifth and final step in reducing" Tehran's JCPOA commitments, explaining that Tehran would "set aside the final operational restrictions under the JCPOA which is 'the restriction on the number of centrifuges.' " The statement provided no details regarding concrete changes to Iran's nuclear program, but the term "restrictions" may refer to the JCPOA-mandated limits on installed centrifuges at the country's commercial enrichment facility. According to a March report from the IAEA Director General., Iran has not exceeded these limits. The January 5 announcement added that "[i]n case of the removal of sanctions and Iran benefiting from the JCPOA," Iran "is ready to resume its commitments" pursuant to the agreement. In a May 6 speech, Iranian President Hassan Rouhani characterized Tehran's aforementioned actions as a withdrawal from the government's JCPOA commitments "in an equal scale," Whenever the United States and P4+1 "are ready to observe their full commitments under the JCPOA," Iran "will return to the JCPOA the same day," he added. According to an article published May 6, Iran's Permanent Representative to the IAEA Kazzem Gharibabdi stated that Iran could reduce or end its cooperation with the IAEA if the United States and P4+1 continue actions which, Tehran argues, damage the JCPOA. Conflict Erupts (December 2019-January 2020) In early December 2019, press reports and U.S. officials indicated that Iran was supplying short- range missiles to allied forces inside Iraq. A series of indirect fire attacks in mid-December 2019 targeted Iraqi military facilities where U.S. forces are co-located. In response, Secretary Pompeo issued a statement saying, "We must also use this as an opportunity to remind Iran's leaders that any attacks by them, or their proxies of any kind, that harm Americans, our allies, or our interests will be answered with a decisive U.S. response." Secretary of Defense Mark Esper stated that he urged then-Iraqi Prime Minister Adel Abd Al Mahdi to "take proactive actionsâ¦to get that under control." On December 27, 2019, a rocket attack on a base near Kirkuk in northern Iraq killed a U.S. contractor and wounded four U.S. service members and two Iraqi service members. Two days later, the U.S. launched retaliatory airstrikes on five facilities (three in Iraq, two in Syria) used by the Iran-backed Iraqi armed group Kata'ib Hezbollah (KH), a U.S.-designated Foreign Terrorist Organization to which the U.S. attributed the attack. KH leader and leading figure in the Iraqi-state affiliated Popular Mobilization Forces Abu Mahdi al Muhandis said dozens of fighters were killed and injured and promised a "very tough response" on U.S. forces in Iraq. Iraqi leaders, including those who want to maintain good relations with both the United States and Iran, criticized the strikes as a "violation of Iraqi sovereignty." The hostilities came as Iran sought to preserve its political influence amidst large-scale demonstrations in which hundreds of protestors were killed by security forces and which contributed to Abd Al Mahdi's resignation that month. He continues to serve in a caretaker role while Iraqi political leaders negotiate a transition. In a December 6, 2019 press briefing announcing sanctions designations of several Iran-linked Iraqi groups and individuals, Assistant Secretary of State for Near Eastern Affairs David Schenker said the United States Government will work with anyone in the Iraqi Government who is willing to put Iraqi interests first.... This is a sine qua non . But we see in the process of establishing a new government or determining who the next prime minister will be that [IRGC-QF commander] Qasem Soleimani is in Baghdad working this issue. It seems to us that foreign terrorist leaders, or military leaders, should not be meeting with Iraqi political leaders to determine the next premier of Iraq, and this is exactly what the Secretary says about being perhaps the textbook example of why Iran does not behave and is not a normal state. This is not normal. This is not reasonable. This is unorthodox and it is incredibly problematic, and it is a huge violation of Iraqi sovereignty. On December 31, 2019, two days after the U.S. airstrikes against KH targets in Iraq and Syria, supporters of KH and other Iran-backed Iraqi militias surrounded and then entered the U.S. Embassy in Baghdad, setting some outer buildings on fire. The militiamen withdrew after their leaders said they obtained acting Prime Minister Abdul Mahdi's promise for "serious work" on a parliamentary vote to expel U.S. forces from the country, a long-sought goal of Iran and its Iraqi allies. President Trump tweeted that Iran, which "orchestrat[ed the] attack," would "be held fully responsible for lives lost, or damage incurred, at any of our facilities. They will pay a very BIG PRICE!" U.S. Escalation and Aftermath: Drone Strike Kills QasemÂ Soleimani On January 3, 2020, Iraq time, a U.S. military armed drone strike killed IRGC-QF Commander Major General Qasem Soleimani in what the Defense Department termed a "defensive action." The statement cited Soleimani's responsibility for "the deaths of hundreds of Americans and coalition service members" and his approval of the Embassy blockade, and stated that he was "actively developing plans to attack American diplomats and service members in Iraq and throughout the region." The strike, conducted while Soleimani was leaving Baghdad International Airport, also killed KH leader Abu Mahdi al-Muhandis, who also headed the broader Popular Mobilization Forces (PMF) made up mostly of militia fighters, and other Iranian and Iraqi figures. Iraq's Council of Representatives (CoR) on January 5, 2020, voted to direct the government "to work towards ending the presence of all foreign troops on Iraqi soil," according to the media office of the Iraqi Parliament. Soleimani was widely regarded as one of the most powerful and influential figures in Iran, with a direct channel to Khamene'i, who serves as Commander-in-Chief of all Iranian armed forces. One expert described him as "the military center of gravity of Iran's regional hegemonic efforts" and "an operational and organization genius who likely has no peer in the upper ranks of the Islamic Revolutionary Guard Corps." Others contend that "he was only the agent of a government policy that preceded him and will continue without him." Iranian Responses and Subsequent Hostilities Secretary of State Pompeo underscored that the United States is not seeking further escalation, but Iran's leaders, including Supreme Leader Ali Khamene'i, threatened to retaliate for the Soleimani killing. That retaliation, codenamed "Operation Martyr Soleimani" came on January 8, 2020, in the form of an Iranian ballistic missile strike on two Iraqi bases â Ayn al-Asad in western Iraq and an airbase near Irbil, in Kurdish-controlled northern Iraq. The United States reported no "casualties," according to a statement by President Trump on January 8, 2020, and the United States reportedly had some advanced warning of the attack, via Iraqi officials. The President added that "Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world," and there was no U.S. military retaliation for Iran's missile strike. Still, over the coming weeks, about 110 U.S. military personnel were diagnosed with various forms of traumatic brain injury, mostly concussions from the blast. Iran's ability to hit Ayn al-Asad with some degree of precision indicated growing capability in Iran's missile capabilities. For the past several years, the U.S. intelligence community, in its annual worldwide threat assessment briefings for Congress, has assessed that Iran has "the largest inventory of ballistic missiles in the region," and the 2019 version of the annual, congressionally-mandated report on Iran's military power by the Defense Intelligence Agency indicated that Iran is advancing its drone technology and the precision targeting of the missiles it provides to its regional allies. Israel asserts that these advances pose a sufficient threat to justify Israeli attacks against Iranian and Iran-allied targets in the region, including in Lebanon, Syria, and Iraq. Tensions Resurface in Spring 2020: Iraq and the Gulf After about two months marked only by casualty-free occasional rocket attacks in Iraq by Iran-backed factions, U.S.-Iran tensions began to rise again in March 2020. On March 11, 2020, a rocket attack on Camp Taji in Iraq, allegedly by KH, killed two U.S. military personnel and one British medic serving with the U.S.-backed coalition fighting the Islamic State organization. On March 13, 2020, the commander of U.S. Central Command (CENTCOM), Gen. Kenneth McKenzie, said the United State used manned aircraft to strike several sites near Baghdad that KH uses as storage areas for advanced conventional weapons, heavy rockets, and associated propellant. According to McKenzie: "We also assessed that the destruction of these sites will degrade Kata'ib Hezbollah's ability to conduct future strikes." However, the deterrent effect of the U.S. strikes appear limited. On March 15, 2020, according to the Defense Department, three U.S. service personnel were injured in another rocket attack on the same location, Camp Taji, of which two were seriously wounded. Some Iraqi military personnel were also wounded. The United States did not retaliate. The new hostilities in Iraq came amid Iraq's struggles to establish a government to succeed that of Adel Abdul Mahdi, who remains a caretaker prime minister. Soleimani's successor, Esmail Qaani, made his first reported visit to Iraq in late March, reportedly in an effort to unite Iran-backed factions on a successor to Abdul Mahdi. The Iraqi political struggles to form a new government reflect the continuing Iranian and U.S. effort to limit each other's influence on Iraqi politics. Several weeks after the Iraq rocket attacks, Iran resumed some provocations in the Persian Gulf. On April 14, 2020, the IRGC Navy forcibly boarded and steered into Iranian waters a Hong Kong-flagged tanker. The next day, eleven IRGC Navy small boats engaged in what the State Department called "high speed, harassing approaches" of five U.S. naval vessels conducting routine exercises in the Gulf." The United States, either separately or as part of the IMSC Gulf security mission discussed above, did not respond militarily to the Iranian actions. However, on April 22, President Trump posted a message on Twitter saying: "I have instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea." U.S. defense officials characterized the President's message as a warning Iran against further such actions, but they stressed that U.S. commanders have discretion about how to respond to future provocative actions by Iran. Also on April 22, the IRGC announced that it had launched a "military satellite" into orbit. Secretary of State Pompeo reacted by stating "I think today's launch proves what we've been saying all along here in the United States [that Iran's space launches are not for purely commercial purposes]." On May 6, 2020, the Chairman of the Joint Chiefs of Staff Gen. Mark Milley stated "Well, let me put it this way, they launched a satellite vehicle, I think we publicly had stated it was tumbling. So the satellite itself, not overly concerned about it, but the missile technology, the secondary and second and third order missile technology and the lesson learned from that, that is a concern because, you know, different missiles can do different things and one can carry a satellite, another can carry some sort of device that can explode. So, the bottom line is yes, it is a security concern any time Iran is testing any type of long-range missile." Efforts to De-Escalate Tensions U.S. partner countries and U.N. officials have consistently called for the de-escalation of tensions and the avoidance of war. The EU countries have refused to join the U.S. maximum pressure campaign as a consequence of Iran's provocative acts, although the UK, France, and Germany have urged Iran to negotiate a new JCPOA that includes limits on Iran's missile development. Some U.S. allies have joined a U.S. effort to deter Iran from further attacks on shipping in the Gulf. EU officials have said that they still hope to preserve the JCPOA could be preserved. The United States and Iran do not have diplomatic relations and there have been no known high-level talks between Iran and Administration officials since the Trump Administration withdrew from the JCPOA. Prior to the Soleimani killing, various third country leaders, such as Japanese Prime Minister Shinzo Abe in mid-2019 and again in a visit to Iran in December 2019, have sought to move Tehran and Washington toward direct talks. Several Gulf countries have sent delegations to Iran to try to ease U.S.-Iran tensions that the Gulf leaders say could lead to severe destruction in the Gulf states themselves in the event of conflict. A UAE delegation that visited Tehran in late July 2019 undertook the first UAE security talks with Iran since 2013. In late 2019, Saudi Arabia reportedly sought help from Pakistan and Iraq in undertaking talks with Iran to lower tensions. In August 2019, French President Macron appeared to make progress but ultimately did not produce U.S.-Iran talks. While hosting the G-7 summit in Biarritz, Macron invited Foreign Minister Zarif to meet with him there. No Trump-Zarif meeting took place in Biarritz but, at a press conference at the close of the summit, President Trump reiterated his willingness, in principle, to meet with Iranian President Hassan Rouhani, presumably during the U.N. General Assembly meetings in New York in September. President Trump reportedly considered supporting a French proposal to provide Iran with a credit line as an incentive for Iran to meet with him. However, in the wake of the September 14, 2019 attacks in Saudi Arabia and since, the Supreme Leader has stated that there would be no U.S.-Iran talks and Rouhani and Zarif have since repeatedly restated the view that U.S. sanctions be lifted before any such talks. Iran-Focused Additional U.S. Military Deployments For the stated purpose of trying to deter further Iranian attacks and protecting U.S. forces already in the region, the United States added forces and military capabilities in the region. As of early 2020, approximately 14,000 U.S. military personnel had been added to a baseline of more than 60,000 U.S. forces in and around the Persian Gulf, which include those stationed at military facilities in the Arab states of the Gulf Cooperation Council (GCC: Saudi Arabia, Kuwait, UAE, Qatar, Oman, and Bahrain), and those in Iraq and Afghanistan. Defense Department officials indicated that the additional deployments mostly restored forces who were redeployed from the region a few years ago, and did not represent preparation for any U.S. offensive against Iran. Among the additional deployments, the United States sent additional Patriot and Terminal High Altitude Area Defense (THAAD) missile defense systems in the region. Some of the additional forces sent deployed to Prince Sultan Air Base in Saudi Arabia, which is south of Riyadh. U.S. forces used the base to enforce a no-fly zone over southern Iraq during the 1990s, but left there after Saddam Hussein was ousted by Operation Iraqi Freedom in 2003. As 2020 progressed, some U.S. deployments changed. In March 2020, hundreds of U.S forces in Iraq were redeployed from smaller bases in Iraq to larger ones, and some were withdrawn to locations elsewhere in the region. The redeployments reportedly were due to a waning threat in Iraq from the Islamic State organization as well as the apparent need to better defend U.S. forces from attacks by Iran-backed militias. In early May 2019, it was reported that the United States had withdrawn some Patriot air defenses and combat aircraft from Saudi Arabia and other locations in the Gulf, although U.S. officials denied that the deployments signaled an altered assessment of the Iran threat or would degrade U.S. capabilities to deter Iran. Gulf Maritime Security Operation Iran's naval actions in the Gulf in mid-2019 prompted the formation of a new, U.S.-led military operation to protect commercial shipping in the Gulf. The maritime security and monitoring initiative for the Gulf, the Bab el-Mandeb Strait, and the Suez Canal was termed "Operation Sentinel." Operation Sentinel began activities in August 2019 and was then formally inaugurated as the International Maritime Security Construct (IMSC) in Bahrain in November 2019. It consists of: the United States, the UK, the UAE, Saudi Arabia, Bahrain, Qatar, Kuwait, Albania, and Australia) operating four sentry ships at crucial points in the Gulf. Additionally, Israeli Foreign Minister Yisrael Katz said Israel would join the coalition, but Defense Department officials have not listed Israel as a participant in IMSC to date. China's ambassador to the UAE said in early August 2019 that China was considering joining the mission, although no announcement of China's participation has since been made. The IMSC supplements longstanding multilateral Gulf naval operations that have targeted smuggling, piracy, the movement of terrorists and weaponry, and other potential threats in the Gulf. Other countries have started separate maritime security missions in the Gulf. France leads a maritime security mission, headquartered in Abu Dhabi, that began activities in early 2020. India has sent some naval vessels to the Gulf to protect Indian commercial ships. In December 2019, Japan sent vessels to protect Japanese shipping, also separate from the IMSC. U.S. Military Action: Options andÂ Considerations The military is a tool of national power that the United States can use to advance its objectives, and the design of a military campaign and effective military options depend on the policy goals that U.S. leaders seek to accomplish. The Trump Administration has stated that its "core objective ... is the systemic change in the Islamic Republic's hostile and destabilizing actions, including blocking all paths to a nuclear weapon and exporting terrorism." As such, the military could be used in a variety of ways to try to contain and dissuade Iran from prosecuting its "hostile and destabilizing actions." These ways range from further increasing presence and posture in the region to use of force to change Iran's regime. As with any use of the military instrument of national power, any employment of U.S. forces in this scenario could result in further escalation of a crisis. U.S. military action may not be the appropriate tool to achieve systemic change within the Iranian regime, and may potentially set back the political prospects of Iranians sympathetic to a change of regime. Some observers question the utility of military power against Iran due to global strategic considerations. The 2017 National Security Strategy and 2018 National Defense Strategy both noted that China and Russia represent the key current and future strategic challenges to the United States. As such, shifting additional military assets into the United States Central Command (CENTCOM) area of responsibility requires diverting them from use in other theaters such as Europe and the Pacific, thereby sacrificing other long-term U.S. strategic priorities. Secretary of Defense Mark Esper and other U.S. officials have stated that the additional U.S. deployments since May 2019 are intended to deter Iran from taking any further provocative actions and position the United States to defend U.S. forces and interests in the region. Iranian attacks after previous U.S. deployments could suggest that deploying additional assets and capabilities might not necessarily succeed in deterring Iran from using military force. On the other hand, there are risks to military inaction that might potentially outweigh those associated with the employment of force. For example, should Iran acquire a nuclear weapons capability, U.S. options to contain and dissuade it from prosecuting hostile activities could be significantly more constrained than they are at present. For illustrative purposes only, below are some potential additional policy options related to the possible use of military capabilities against Iran. Not all of these options are mutually exclusive, nor do they represent a complete list of possible options, implications, and risks. Congress has assessed its role in any decisions regarding whether to undertake military action against Iran, as discussed later in this report. The following discussion is based entirely on open-source materials. Operations against Iranian a llies or proxies . The Administration might decide to take additional action against Iran's allies or proxies, such as Iran-backed militias in Iraq, Lebanese Hezbollah, or the Houthi movement in Yemen. Such action could take the form of air operations, ground operations, special operations, or cyber and electronic warfare. Further attacks on Iranian allies could be intended to seriously degrade the military ability of the Iranian ally in question and undertaken by U.S. forces, partner government forces, or both. At the same time, military action against Iran's allies could harm the prospects for resolution of the regional conflicts in which Iranian allies operate. Retaliatory Action against Iranian Key Targets and Facilities. The United States retains the option to undertake air and missile strikes, as well as special operations and cyber and electronic warfare against Iranian targets, such as IRGC Navy vessels in the Gulf, nuclear facilities, military bases, ports, oil installations, and any number of other targets within Iran itself. Iran's major Gulf ports are shown in Figure 2 . Blockade. Another option could be to establish a naval and/or air quarantine of Iran. Iran has periodically, including since mid-2019, threatened to block the vital Strait of Hormuz. Some observers have in past confrontations raised the prospect of a U.S. closure of the Strait or other waterways to Iranian commerce. Under international law, blockades are acts of war. Invasion. Although apparently far from current consideration because of the potential risks and costs, a U.S. invasion of Iran to oust its regime is among the options. Press reports in May 2019 indicated that the Administration was considering adding more than 100,000 military forces to the Gulf to deter Iran from any attacks. Such an option, if exercised, might be interpreted as potentially enhancing the U.S. ability to conduct ground attacks inside Iran, although military experts have indicated that a U.S. invasion and/or occupation of Iran would require many more U.S. forces than those cited. Iran's population is about 80 million, and its armed forces collectively number about 525,000, including 350,000 regular military and 125,000 IRGC forces. There has been significant antigovernment unrest in Iran over the past 10 years, but there is no indication that there is substantial support inside Iran for a U.S. invasion to change Iran's regime. Resource Implications of Military Operations Without a more detailed articulation of how the military might be employed to accomplish U.S. objectives vis-a-vis Iran, and a reasonable level of confidence about how any conflict might proceed, it is difficult to assess with any precision the likely fiscal costs of a military campaign, or even just heightened presence. Still, any course of action listed in this report is likely to incur significant additional costs. Factors that might influence the level of expenditure required to conduct operations include, but are not limited to, the following: The number of additional forces, and associated equipment, deployed to the Persian Gulf or the CENTCOM theater more broadly. In particular, deploying forces and equipment from the continental United States (if required) would likely add to the costs of such an operation due to the logistical requirements of moving troops and materiel. The mission set that U.S. forces are required to prosecute and its associated intensity. Some options leading to an increase of the U.S. posture in the Persian Gulf might require upgrading existing facilities or new construction of facilities and installations. By contrast, options that require the prosecution of combat operations would likely result in significant supplemental and/or overseas contingency operations requests, particularly if U.S. forces are involved in ground combat or post-conflict stabilization operations. The time required to accomplish U.S. objectives. As demonstrated by operations in Iraq and Afghanistan, the period of anticipated involvement in a contingency is a critical basis for any cost analysis. On one hand, a large stabilizing or occupying ground force to perform stabilization and reconstruction operations, for example, would likely require the expenditure of significant U.S. resources. At the same time, there is potential for some U.S. costs to be offset by contributions. The Persian Gulf states and other countries have a track record of offsetting U.S. costs for Gulf security. In the current context, President Trump stated in October 2019 that Saudi Arabia would pay for the deployment of additional U.S. troops and capabilities to assist with the territorial defense of Saudi Arabia and the deterrence of Iranian aggression in the region overall, and subsequent reports indicate that U.S. and Saudi officials are negotiating a cost-sharing arrangement for the new deployments. Congressional Responses Members of Congress have responded in different ways to tensions with Iran and to related questions of authorization for the use of military force. Various instances of increased U.S.-Iran tensions in the past year have prompted some Members to express concern about or support for potential military operations against Iran. These episodes include the June 2019 attacks against tankers in the Gulf of Oman and Iran's shoot down of a U.S. military drone; the September 2019 attacks on Saudi oil facilities at Abqaiq and Khurais; and the buildup of U.S. forces in the region in response to Iranian activities. Throughout this period, Congress passed legislation with provisions specifying that authorization for the use of force against Iran is not granted. For instance, Section 1284 of the FY2020 NDAA ( P.L. 116-92 , December 2019) states that "Nothing in this Act, or any amendment made by this Act, may be construed to authorize the use of military force, including the use of military force against Iran or any other country." Similarly, Section 9024 of Division A of H.R. 1158 , the Consolidated Appropriations Act, 2020, ( P.L. 116-89 , December 2019) states that "Nothing in this Act may be construed as authorizing the use of force against Iran." However, Congress has not prohibited the use of funds for operations against Iran, despite the introduction of several standalone measures that would do so, such as the Prevention of Unconstitutional War with Iran Act of 2019 ( H.R. 2354 / S. 1039 ).While the House did pass legislation that included a prohibition on funding for the use of force against Iran, including Section 1229 of H.R. 2500 , the National Defense Authorization Act (NDAA) for FY2020, the Senate rejected by a 50-40 vote an amendment ( S.Amdt. 883 ) that would have added similar text to its version of the FY2020 NDAA, and the House-passed language was not included in conference text of the bill. In response to these moves, President Trump stated that he had wide-ranging authority to unilaterally initiate the use of military force, as successive Administrations have maintained. For instance, in a June 24 interview, President Trump reiterated that he believed he had the authority to order military action against Iran without congressional approval, adding, "I do like keeping them [Congress] abreast, but I don't have to do it, legally." Secretary Pompeo suggested in an April 2019 hearing that the 2001 authorization for use of military force (AUMF, P.L. 107-40 ) against those responsible for the September 11 terrorist attacks could potentially apply to Iran based on the country's ties with Al Qaeda. However, in a June 28, 2019, letter to House Foreign Affairs Committee Chairman Eliot Engel, Assistant Secretary of State for Legislative Affairs Mary Elizabeth Taylor stated that "the Administration has not, to date, interpreted either [the 2001 or 2002] AUMF as authorizing military force against Iran, except as may be necessary to defend U.S. or partner forces engaged in counterterrorism operations or operations to establish a stable, democratic Iraq." The killing of IRGC-QF Commander Soleimani in a U.S. drone strike in Baghdad in January 2020 dramatically increased congressional attention to U.S.-Iran tensions and specifically to the authority under which Soleimani was killed and whether that authority might be used to justify further military action. Immediately after the strike, House Speaker Nancy Pelosi said in a statement that the Administration launched the strike that killed Soleimani "without an Authorization for Use of Military Force (AUMF) against Iran" and "without the consultation of the Congress," and called for Congress to be "immediately briefed on this serious situation." Two days later, on January 4, 2020, President Trump submitted a notification to the Speaker of the House and President Pro Tempore of the Senate of the Soleimani drone strike, as pursuant to the War Powers Resolution ( P.L. 93-148 ), including the constitutional and legislative authority for the action. However, according to a media report, the notification "only contained classified information, according to a senior congressional aide, likely detailing the intelligence that led to the action." Speaker Nancy Pelosi criticized the decision to classify the notification in its entirety as "highly unusual." In statements after the strike, National Security Adviser Robert O'Brien asserted that the Authorization for Use of Military Force Against Iraq Resolution of 2002 ("2002 AUMF"; P.L. 107-243 ) provided the President authority to direct the strike against General Soleimani in Iraq. The House voted to repeal the 2002 AUMF on January 30, 2020, when it passed the No War Against Iran Act ( H.R. 550 ); no action has been taken by the Senate. In response to the strike, numerous pieces of legislation were introduced both commending and condemning the Administration for the action (for more, see CRS Report R46148, U.S. Killing of Qasem Soleimani: Frequently Asked Questions ). Perhaps most significant were two resolutions that would direct the President to terminate the involvement of U.S. forces in conflict with Iran. H.Con.Res. 83 , introduced by Representative Elissa Slotkin on January 8, 2020, pursuant to Section 5(c) of the War Powers Resolution. The resolution would direct the President "to terminate the use of United States Armed Forces to engage in hostilities in or against Iran or any part of its government or military," unless Congress specifically authorizes such use of the armed forces, or if such force is necessary and appropriate to defend the United States or its armed forces against "imminent attack." The House voted to adopt H.Con.Res. 83 by a 224-194 vote on January 9, 2020; no action has been taken by the Senate. Questions have been raised about the constitutionality and effect of Section 5(c) concurrent resolutions. S.J.Res. 68 , introduced by Senator Tim Kaine on January 9, 2020, pursuant to Section 1013 of the Department of State Authorization Act, Fiscal Years 1984 and 1985 (50 U.S.C. Â§ 1546a). The resolution would have directed the President to "terminate the use of U.S. armed forces for hostilities" with Iran (changed from an earlier version that would have required "removal" of U.S. armed forces, perhaps a reflection of concern that the original language might precipitate changes in current deployments). The Senate voted to adopt the resolution by a 55-45 vote on February 13, and the House passed it by a 227-186 vote on March 11. President Trump vetoed the resolution on May 6, 2020, describing it as an "insulting" election ploy by congressional Democrats. The statement also stated that the resolution's implication that "the President's constitutional authority to use military force is limited to defense of the United States and its forces against imminent attack" was "incorrect." The Senate failed to override the veto by a vote of 49-44 on May 7, 2020. Possible Issues for Congress Given ongoing tensions with Iran, Members are likely to continue to assess and perhaps try to shape the congressional role in any decisions regarding whether to commit U.S. forces to potential hostilities. In assessing its authorities in this context, Congress might consider, among other things, the following: Does the President require prior authorization from Congress before initiating hostilities with Iran? If so, what actions, under what circumstances, ought to be covered by such an authorization? If not, what existing authorities provide for the President to initiate hostilities? If the executive branch were to initiate and then sustain hostilities against Iran without congressional authorization, what are the implications for the preservation of Congress's role, relative to that of the executive branch, in the war powers function? How, in turn, might the disposition of the war powers issue in connection with the situation with Iran affect the broader question of Congress's status as an equal branch of government, including the preservation and use of other congressional powers and prerogatives? The Iranian government may continue to take aggressive action short of directly threatening the United States and its territories while it continues policies opposed by the United States. What might be the international legal ramifications for undertaking a retaliatory, preventive, or preemptive strikes against Iran in response to such actions without a U.N. Security Council mandate? Conflict with, or increased military activity in or around, Iran could generate significant costs, financial and otherwise. With that in mind, Congress could consider the following: The potential costs of heightened U.S. operations in the CENTCOM area of operations, particularly if they lead to full-scale war and significant postconflict operations. The need for the United States to reconstitute its forces and capabilities, particularly in the aftermath of a major conflict. The impact of the costs of war and post conflict reconstruction on U.S. deficits and government spending. The costs of persistent military confrontation and/or a conflict in the Gulf region to the global economy. The extent to which regional allies, and the international community more broadly, might contribute forces or resources to a military campaign or its aftermath.	Summary:	gov_report	1,024	null	68
crs_R46113	crs_R46113_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction This report describes and analyzes annual appropriations for the Department of Homeland Security (DHS) for FY2020. It compares the enacted FY2019 appropriations for DHS, the Donald J. Trump Administration's FY2020 budget request, and the appropriations measures developed and ultimately enacted in response to it. This report identifies additional informational resources, reports, and products on DHS appropriations that provide context for the discussion. A list of Congressional Research Service (CRS) policy experts with whom congressional clients may consult on specific topics may be found in CRS Report R42638, Appropriations: CRS Experts . The suite of CRS reports on homeland security appropriations tracks legislative action and congressional issues related to DHS appropriations, with particular attention paid to discretionary funding amounts. These reports do not provide in-depth analysis of specific issues related to mandatory fundingâsuch as retirement payânor do they systematically follow other legislation related to the authorizing or amending of DHS programs, activities, or fee revenues. Discussion of appropriations legislation involves a variety of specialized budgetary concepts. The Appendix to this report explains several of these concepts, including budget authority, obligations, outlays, discretionary and mandatory spending, offsetting collections, allocations, and adjustments to the discretionary spending caps under the Budget Control Act (BCA; P.L. 112-25 ). A more complete discussion of those terms and the appropriations process in general can be found in CRS Report R42388, The Congressional Appropriations Process: An Introduction , coordinated by James V. Saturno, and the Government Accountability Office's A Glossary of Terms Used in the Federal Budget Process . Note on Data and Citations All amounts contained in CRS reports on homeland security appropriations represent budget authority. For precision in percentages and totals, all calculations in these reports use unrounded data, which are presented in each report's tables. Amounts in narrative discussions may be rounded to the nearest million (or 10 million, in the case of numbers larger than 1 billion), unless noted otherwise. Data used in this report for FY2019 annual appropriations are derived from the conference report accompanying P.L. 116-6 , the Consolidated Appropriations Act, 2019. Division A of P.L. 116-6 is the Department of Homeland Security Appropriations Act, 2019. FY2019 supplemental appropriations data are drawn directly from two enacted measures: P.L. 116-20 , the Additional Supplemental Appropriations Act, 2019, which included funding for response and recovery from a range of natural disasters; and P.L. 116-26 , the Emergency Supplemental Appropriations for Humanitarian Assistance and Security at the Southern Border Act, 2019, which included funding for security and humanitarian needs at the U.S.-Mexico border. Data for the FY2020 requested levels and House Appropriations Committee-recommended levels of annual appropriations are drawn from H.Rept. 116-180 , which accompanied H.R. 3931 . Data for the Senate Appropriations Committee-recommended levels of annual appropriations are drawn from S.Rept. 116-125 , which accompanied S. 2582 . Data for the FY2020 enacted levels are drawn from the explanatory statement accompanying P.L. 116-93 , Division D of which is the FY2020 Department of Homeland Security Appropriations Act. Scoring methodology is consistent across this report, relying on data provided by the Appropriations Committees that has been developed with Congressional Budget Office (CBO) methodology. CRS does not attempt to compare this data with Office of Management and Budget (OMB) data because technical scoring differences at times do not allow precise comparisons. Note: Previous CRS reports on DHS appropriations at times used OMB data on mandatory spending for the Federal Emergency Management Agency and the U.S. Secret Service that was not listed in appropriations committee documentationâfor consistency, OMB data on mandatory spending is no longer included in this report. Legislative Action on FY2020 DHS Appropriations This section provides an overview of the legislative process thus far for appropriations for the Department of Homeland Security for FY2020, from the Administration's initial request, through enactment of annual appropriations in Division D of P.L. 116-93 . Annual Appropriations Trump Administration FY2020 Request On March 18, 2019, the Trump Administration released its detailed budget request for FY2020. A lapse in FY2019 annual appropriations from December 22, 2018, until January 25, 2019, delayed the full budget proposal's release past the first Monday in February, the deadline outlined in the Budget Act of 1974. The Trump Administration requested $51.68 billion in adjusted net discretionary budget authority for DHS for FY2020, as part of an overall budget that the Office of Management and Budget estimated to be $92.08 billion (including fees, trust funds, and other funding that is not annually appropriated or does not score against discretionary budget limits). The request amounted to a $2.27 billion (4.6%) increase from the $49.41 billion in annual net discretionary budget authority in appropriations enacted for FY2019 through the Department of Homeland Security Appropriations Act, 2019 ( P.L. 116-6 , Division A). The Trump Administration also requested discretionary funding that does not count against discretionary spending limits set by the Budget Control Act (BCA; P.L. 112-25 ) for two DHS components and is not reflected in the above totals. The Administration requested an additional $14.08 billion for the Federal Emergency Management Agency (FEMA) in disaster relief funding, as defined by the BCA, and in the budget request for the Department of Defense, $190 million in Overseas Contingency Operations/Global War on Terror designated funding (OCO), to be transferred to the Coast Guard from the Navy. House Committee Action On June 11, 2019, the House Appropriations Committee marked up H.R. 3931 , the Department of Homeland Security Appropriations Act, 2020. H.Rept. 116-180 was filed on July 24, 2019. As reported by the committee, H.R. 3931 included $52.80 billion in adjusted net discretionary budget authority. This was $1.12 billion (2.2%) above the level requested by the Administration, and $3.39 billion (6.9%) above the enacted level of annual appropriations for FY2019. The House committee bill included $14.08 billion in disaster relief-designated funding, reflecting the level in the Administration's modified request, and the House Appropriations Committee-reported Defense Appropriations bill included OCO funding to be transferred to the Coast Guard. As a result of amendments adopted in full committee markup, the initial CBO scoring of the bill exceeded the subcommittee allocation by more than $3 billion. (CBO later revised the scoring of those provisions to $1.9 billion.) Senate Committee Action On September 26, 2019, the Senate Appropriations Committee marked up S. 2582 , its version of the Department of Homeland Security Appropriations Act, 2020. S.Rept. 116-125 was filed the same day. As reported by the committee, S. 2582 included $53.18 billion in adjusted net discretionary budget authority. This was $1.50 billion (2.9%) above the level requested by the Administration, and $3.77 billion (7.6%) above the enacted annual level for FY2019. Much of this latter increase was due to the inclusion of $5 billion in funding for border barrier construction as opposed to $1.38 billion in the FY2019 act. Both the House and Senate committees included more discretionary funding for the Coast Guard, Transportation Security Administration, and FEMA than had been requested by the Administration. The Senate committee bill also included $17.35 billion of disaster relief-designated fundingâ$3.28 billion (23.3%) more than the Administration's modified requestâand $190 million in OCO-designated funding for the Coast Guard. Continuing Resolution No annual appropriations for FY2020 had been enacted by late September as FY2019 was drawing to a close, so on September 27, 2019, Congress passed a continuing resolution (CR) ( P.L. 116-59 ), temporarily extending funding at the FY2019 rate for operations through November 21. This CR was subsequently extended through December 20. P.L. 116-59 included four provisions specifically addressing needs of DHS under a CR: Section 132 provides a special apportionment of CR funds to cover Secret Service expenses related to the FY2020 presidential campaign; Section 133 allows for an accelerated rate of apportionment for the Disaster Relief Fund (DRF) to ensure that the programs it funds can be carried out; Section 134 extends the authorization for the National Flood Insurance Program to issue new policies; and Section 135 allows funds to be allocated in accordance with a planned restructuring of some DHS management activities. In addition, Section 101(6) extends by reference some immigration provisions that have been linked to the appropriations cycle. For further information on the FY2020 continuing resolutions, see CRS Report R45982, Overview of Continuing Appropriations for FY2020 (P.L. 116-59) . Enactment On December 16, 2019, the text and explanatory statements for two consolidated appropriations bills were released on the House Rules Committee website. One, which used H.R. 1158 as a legislative shell, included four appropriations measures, including the FY2020 DHS annual appropriations measure as Division D. Division D included $50.47 billion in adjusted net discretionary budget authority. This was $1.22 billion (2.4%) below the level requested by the Administration, and $1.06 billion (2.1%) above the enacted annual level for FY2019. The act included $17.35 billion for the Federal Emergency Management Agency (FEMA) in disaster relief funding, as defined by the Budget Control Act ( P.L. 112-25 ; BCA), and $190 million in Overseas Contingency Operations designated funding (OCO) in an appropriation to the Coast Guard. The House passed the measure by a vote of 280-138 on December 17, and the Senate did so by a vote of 81-11 on December 19. The bill was signed into law of December 20, 2019, and enacted as P.L. 116-93 . Summary of DHS Appropriations Generally, the homeland security appropriations bill includes all annual appropriations provided for DHS, allocating resources to every departmental component. Discretionary appropriations provide roughly two-thirds to three-fourths of the annual funding for DHS operations, depending how one accounts for disaster relief spending and funding for OCO. The remainder of the budget is a mix of fee revenues, trust funds, and mandatory spending. Annual appropriations measures for DHS typically have been organized into five titles. The first four are thematic groupings of components, while the fifth provides general direction to the department, and sometimes includes provisions providing additional budget authority. The DHS Common Appropriations Structure (CAS) When DHS was established in 2003, components of other agencies were brought together over a matter of months, in the midst of ongoing budget cycles. Rather than developing a new structure of appropriations for the entire department, Congress and the Administration continued to provide resources through existing account structures when possible. At the direction of Congress, in 2014 DHS began to work on a new Common Appropriations Structure (CAS), which would standardize the format of DHS appropriations across components. In an interim report in 2015, DHS noted that operating with "over 70 different appropriations and over 100 Programs, Projects, and Activities ... has contributed to a lack of transparency, inhibited comparisons between programs, and complicated spending decisions and other managerial decision-making." After several years of work and negotiations with Congress, DHS made its first budget request in the CAS for FY2017, and implemented it while operating under a CR in October 2016. Under the CAS, legacy appropriations structures were largely converted to a four-category structure: 1. Operations and Support , which covers operating salaries and expenses; 2. Procurement , Construction, and Improvements , which funds planning, operational development, engineering, purchase, and deployment of assets to support component missions; 3. Research and Development , which provides resources needed to identify, explore, and demonstrate new technologies and capabilities to support component missions; and 4. Federal Assistance , which supports grant funding managed by DHS components. All components have an Operations and Support (O&S) appropriation. All operational components and some support and headquarters components have a Procurement, Construction, and Improvements (PC&I) appropriation. Research and Development (R&D) appropriations are even less common, and only FEMA, the Countering Weapons of Mass Destruction Office (CWMD), and U.S. Citizenship and Immigration Services (USCIS) have federal assistance appropriations. Even with the implementation of the CAS structure, some appropriations are not included in those four categories: Federal Protective Service: The Federal Protective Service, which has been a part of several different components of DHS, does not have an appropriation of an explicit amount. Rather, the appropriations measure has language directing that funds credited to the FPS account may be spent by FPS to carry out its mission. It therefore has a net-zero impact on the total net discretionary spending in the bill. USCG's Retired Pay: The Coast Guard's Retired Pay appropriation supports the costs of the USCG retired personnel entitlements, including pensions, Survivor Benefits Plans, and medical care of retired USCG personnel and their dependents. This appropriation is categorized as appropriated mandatory spending: while the U.S. government has a legal obligation to make these payments, there is no permanent statutory mechanism in place to provide the funds. Because the government is required to make these payments, the Retired Pay appropriation does not count against the discretionary allocation of the bill. FEMA's Disaster Relief Fund: The Federal Emergency Management Agency (FEMA) receives a separate appropriation for its activities authorized under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Â§5121 et seq.). This allows for more consistent tracking of FEMA's disaster assistance spending over time, and ensures more transparency into the availability of funds for disaster assistance versus FEMA's other grant activities, which are funded through the Federal Assistance appropriation. FEMA's National Flood Insurance Fund: The National Flood Insurance Program is largely mandatory spending. However, some program functions, including mission support, floodplain management, and flood mapping, are paid for through discretionary appropriations. Certain other program costs are paid for by fees collected by the government, which requires appropriations language to allow those resources to be spent. These include: Operating expenses and salaries and expenses associated with flood insurance operations; Commissions and taxes of agents; Interest on borrowings from the Treasury; and Flood mitigation actions and flood mitigation assistance. Administrative and General Provisions Prior to the FY2017 act, the provisos accompanying many appropriations included directions to components or specific conditions on how the budget authority it provided could be used. Similarly, general provisions provided directions or conditions to one or more components. In the FY2017 act, a number of these provisions within appropriations and component-specific general provisions were grouped at the ends of the titles where their targeted components are funded, and identified as "administrative provisions." This practice has continued in subsequent years. This report tracks changes in administrative and general provisions compared to the baseline of the prior year's enacted measure, noting provisions dropped, added, and modified. These changes from the baseline may take place for a variety of reasons. Due to the passage of time or enactment of permanent legislation, a provision may require adjustment or lose its relevance. Other provisions are the priority of members in one chamber or another, and as the enacted bill represents a compromise between those positions, the bills developed by a one chamber may not necessarily reflect the other chamber's priorities. DHS Appropriations: Summary by Component Type The following sections of the report discuss the appropriations provided for the department by type of component. It groups the 15 components of DHS into the following structure: Law Enforcement Operational Components (funded in Title II) U.S. Customs and Border Protection Immigration and Customs Enforcement Transportation Security Administration U.S. Coast Guard U.S. Secret Service Incident Response and Recovery Operational Components (Title III) Cybersecurity and Infrastructure Security Agency Federal Emergency Management Agency Support Components (Title IV) U.S. Citizenship and Immigration Services Federal Law Enforcement Training Center Science and Technology Directorate Countering Weapons of Mass Destruction Office Headquarters Components (Title I) Office of the Secretary and Executive Management Departmental Management Directorate Analysis and Operations Office of Inspector General Each group's and component's role is briefly described below, and their FY2019 enacted and FY2020 requested, recommended, and enacted appropriations are presented in tables arranged by grouped components. After each funding table, a brief analysis of selected administrative provisions for that group is provided. Law Enforcement Operational Components Funding for law enforcement operational components is generally provided in Title II of the annual DHS appropriations act. This is the largest title of the bill, although not all of DHS's largest components are included in it. Components and Missions U.S. Customs and Border Protection (CBP) : CBP is responsible for securing America's borders, coastlines, and ports of entry, preventing the illegal entry of persons and goods while facilitating lawful travel, trade, and immigration. Immigration and Customs Enforcement (ICE): ICE is the principal criminal investigative agency within DHS, and is charged with preventing terrorism and combating the illegal movement of people and goods. Transportation Security Administration (TSA): TSA provides security for the U.S. transportation system while ensuring the free and secure movement of people and goods. U.S. Coast Guard (USCG): The USCG is the principal federal agency responsible for maritime safety, security, and environmental stewardship in U.S. ports and inland waterways. The USCG is a hybrid of a law enforcement agency, regulatory agency, and first responder, as well as being a component of DHS, the intelligence community, and of the U.S. Armed Forces. U.S. Secret Service (USSS): The USSS is responsible for protecting the President, the Vice-President, their families and residences, past Presidents and their spouses, national and world leaders visiting the United States, designated buildings (including the White House and Vice President's Residence), and special events of national significance. The USSS also investigates and enforces laws related to counterfeiting and certain financial crimes. Table 1 includes a breakdown of budgetary resources provided to these components controlled through appropriations legislation. Administrative Provisions H.R. 3931 as reported by the House Appropriations Committee had 31 administrative provisions for Title II, 21 of which were unchanged from FY2019. The House committee bill dropped eight provisions which were in the FY2019 act, including Section 208 , which allowed ICE to reprogram funding to maintain detention of aliens that were prioritized for removal; Section 214 , which mandated TSA continue to monitor airport exit lanes; Section 223 , which allowed USCG to allocate its OCO funding within the Operations and Support appropriation; Section 225 , which authorized a TSA pilot program for screening services at locations other than primary passenger terminals; Section 227 , which requires the USCG maintain the mission and staffing of its Operations Systems Center; Section 228 , which prohibited competitions to privatize activities of the USCG National Vessel Documentation Center; Section 229 , which allowed funds in the bill to alter activities of the USCG Civil Engineering program, but not reduce them; and Section 232 , which required DHS collaboration with local governments on siting border barriers within their jurisdictions. Three previously carried administrative provisions were modified, and seven new provisions were added. S. 2582 as reported by the Senate Appropriations Committee, had 33 administrative provisions in Title II. Only one provision was dropped from the FY2019 actâSection 225, described above. One previously carried provision was modified and three new provisions were added. P.L. 116-93 , Div. D, includes 36 administrative provisions in Title II. Sections 225 and 232 from the FY2019 act were dropped, four provisions were modified, and six new administrative provisions were included. Modified administrative provisions are outlined in Table 2 , while new administrative provisions proposed or included by the appropriations committees are outlined in Table 3 . Incident Response and Recovery Operational Components Funding for operational components which are focused on incident response and recovery is generally found in Title III of the annual DHS appropriations act. It includes funding for FEMA, which has the largest budget of any DHS componentâan appropriated budget largely driven by disaster programs authorized under the Stafford Act, and an overall budget which also includes non-appropriated funding for the National Flood Insurance Program. Title III also includes funding for the newly restructured Cybersecurity and Infrastructure Security Agency (CISA), formerly the National Protection and Programs Directorate. The reorganization included a shift of the Federal Protective Service from CISA to the Management Directorate, reducing the gross budgetary resources in this title. Components and Missions Cybersecurity and Infrastructure Security Agency (CISA): Formerly known as the National Protection and Programs Directorate (NPPD), CISA promotes information sharing to build resilience and mitigate risk from cyber and physical threats to infrastructure, and leads cross-government cybersecurity initiatives. Federal Emergency Management Agency (FEMA): FEMA leads the federal government's efforts to reduce the loss of life and property and protect the United States from all hazards, including natural disasters, acts of terrorism, and other disasters through a risk-based, comprehensive emergency management system of preparedness, protection, response, recovery, and mitigation. Table 4 includes a breakdown of budgetary resources for these components controlled through appropriations legislation. As some annually appropriated resources were provided for FEMA from outside Title III in FY2019, by transfer and by appropriation, a separate line is included for FEMA showing a total for what is provided solely within Title III, then the non-Title III funding, followed by the total annual appropriation for FEMA. The table only reflects the impact of transfers in the discretionary funding and budgetary resource totals. Administrative Provisions H.R. 3931 as reported by the House Appropriations Committee had eight administrative provisions in Title III, five of which were unchanged from FY2019. Two provisions were dropped from the FY2019 act: Section 301, which required a report on revised methods to assess and allocate costs for countermeasures used by the Federal Protective Service; and Section 309, which raised the federal share of costs for essential assistance and debris removal for wildfire major disasters declared in calendar year 2018 from 75% to 90%. Two previously carried administrative provisions were modified, and one new provision was added, which would allow governors to resubmit and FEMA to reconsider requests for Stafford Act individual assistance for certain disasters. S. 2582 as reported by the Senate Appropriations Committee had six administrative provisions in Title III. The Senate Appropriations Committee chose to drop three administrative provisions from this title that were included in the FY2019 actâthe two described above, and Section 307, which provided certain waivers for SAFER Act grants. No previously carried provisions were substantively modified and no new provisions were added. P.L. 116-93, Div. D, includes seven administrative provisions in Title III. Sections 301 and 309 from the FY2019 act as described above were dropped, two provisions were modified, and the new provision proposed in the House Appropriations Committee bill was not included. Modified administrative provisions are tracked in Table 5 . Support Components Funding for support components is generally found in Title IV of the annual DHS appropriations bill. The relatively small size of some of these appropriations makes changes in their funding appear more significant if expressed on a percentage basis. Components and Missions U.S. Citizenship and Immigration Services (USCIS): USCIS administers U.S. immigration laws that govern temporary admission and permanent immigration to the United States. Federal Law Enforcement Training Center (FLETC): FLETC is a technical training school for law enforcement professionals, meeting the basic and specialized training needs of approximately 100 federal agencies, as well as state and local organizations. Science and Technology Directorate (S&T): S&T leads and coordinates research, development, testing, and evaluation work for DHS, and supports departmental acquisitions. Countering Weapons of Mass Destruction Office (CWMD): CWMD leads DHS's efforts to develop and enhance programs and capabilities that defend against weapons of mass destruction, and includes the Department's Chief Medical Officer, who serves as the principal advisor to DHS leadership on medical and public health issues. Table 6 includes a breakdown of budgetary resources provided to these components controlled through appropriations legislation. Administrative Provisions H.R. 3931 as reported by the House Appropriations Committee included eight administrative provisions in Title IV, six of which were unchanged from FY2019. It dropped two: Section 402, which barred USCIS from providing immigration benefits unless it had received a background check that did not preclude providing such a benefit; and Section 408, which provided budgetary flexibility to support the transfer of the National Bio- and Agrodefense Facility to the U.S. Department of Agriculture. H.R. 3931 included two new provisions. S. 2582 as reported by the Senate Appropriations Committee had nine administrative provisions in Title IV. The Senate Appropriations Committee chose to drop one provision from this title that was included in the FY2019 actâSection 408, described above. No previously carried provisions were substantively modified and two new provisions were added. P.L. 116-93 , Div. D, includes seven administrative provisions in Title IV. Sections 402 and 408 from the FY2019 act as described above were dropped. One new provision was added. New administrative provisions proposed or included by the appropriations committees are outlined in Table 7 . Headquarters Components Funding for headquarters components is traditionally found in Title I of the annual DHS appropriations act, although some initiatives have been funded in the past through general provisions. Components and Missions Office of the Secretary and Executive Management (OSEM): OSEM provides central leadership, management, direction and oversight for all DHS components. Departmental Management Directorate (DM): DM provides DHS-wide mission support services. Analysis and Operations (A&O): A&O covers two separate offices: The Office of Intelligence and Analysis (I&A), which integrates and shares intelligence with DHS components and stakeholders to allow them to identify, mitigate, and respond to threats; and the Office of Operations Coordination (OPS), which provides operations coordination, information sharing, and the common operating picture for DHS, and helps ensure DHS continuity and resilience. Office of Inspector General (OIG): The OIG is an independent, objective audit, inspection, and investigative body that reports to the Secretary and to Congress on DHS efficiency and effectiveness, and works to prevent waste, fraud, and abuse. Table 8 provides a breakdown of the budgetary resources provided to these components controlled through appropriations legislation. As resources were requested or provided for the Management Directorate from outside Title I, separate lines are included for each of those components showing a total for what is provided solely within Title I, then the individual items funded outside the title, followed by the total annual appropriation for the components. The table only reflects the impact of transfers in the discretionary funding and budgetary resource totals. Administrative Provisions The title funding DHS headquarters components in H.R. 3931 (Title I) had five administrative provisions, three of which are unchanged from FY2019. Two administrative provisions were dropped: Section 101, a requirement for a monthly budget and staffing report; and Section 106, a reporting requirement on visa overstay data. One previously carried administrative provision was modified to bar the use of Treasury Forfeiture Fund resources to build border security infrastructure. One new provision was added in the House bill, to create an Immigration Detention Ombudsman. Senate Appropriations Committee-reported S. 2582 had six administrative provisions in Title I. The Senate Appropriations Committee retained all six previously enacted provisions without substantive modifications, and no new provisions were added. P.L. 116-93 , Div. D, includes seven administrative provisions in Title I. No provisions were dropped. The new provision proposed in the House Appropriations Committee bill creating the Immigration Detention Ombudsman was included with minor modifications. General Provisions As noted earlier, the fifth title of the annual DHS appropriations act contains general provisions, the impact of which may reach across the government, apply to the entire department, affect multiple components, or focus on a single activity. Most general provisions remain functionally unchanged from year to year, providing guidance to DHS or structure to DHS appropriations with little more than updates to effective dates or amounts. The FY2019 DHS appropriations act included 40 such general provisions. H.R. 3931 , as reported by the House Appropriations Committee, carried 36 such provisions, including four added to the committee's initial draft in full committee markup. Four of the 36 were modified versions of FY2019 general provisions providing policy direction, while four were new. Six provisions carried in the FY2019 act were not retained in House committee version of H.R. 3931 : Section 516 , which restricted transfer or release of detainees from Guantanamo Bay; Section 518 , which restricted the use of funds in the bill to hire unauthorized workers; Section 521 , which provided funding for financial systems modernization activities; Section 522 , which required reductions in administrative spending from certain accounts; Section 536 , which barred the use of funds to implement the Arms Trade Treaty prior to its ratification; and Section 537 , which required the Administration to provide a list of spending cuts as alternatives to proposed fee increases that had not been authorized before the beginning of the budget year. S. 2582 , as reported by the Senate Appropriations Committee, had 36 general provisions in Title V, 32 of which were unchanged from FY2019. One provision was added, and one was modified. Three provisions carried in the FY2019 act that reduced budget authority available to DHS were modified in the Senate committee's bill: the DHS-wide reduction in total Operations and Support appropriations (originally Section 522, now Section 521), and rescissions of prior-year appropriations (originally Section 538 and 539, now Section 536). Three other provisions carried in the FY2019 act were dropped: Section 521 , which provided $51 million for DHS financial systems modernization; Section 531 , which provided $41 million in grants for local law enforcement costs for Presidential protection; and Section 535 , which prohibited using funds for a Principal Federal Official during a declared Stafford Act major disaster or emergency, with certain exceptions. P.L. 116-93 , Div. D, included 40 general provisions in Title V. Two provisions were dropped from the FY2019 DHS Appropriations ActâSections 521 and 522 described above. No new policy-related general provisions were added, although the last four general provisions provided rescissions of various types: Section 537 rescinds $233 million in emergency designated supplemental appropriations for CBP from P.L. 116-26 , which are reappropriated in Title II of this act; Section 538 rescinds $202 million in unobligated balances from across DHS; Section 539 rescinds almost $19 million in lapsed balances; Section 540 rescinds $300 million in unobligated balances from the Disaster Relief Fund. Modified and new policy-related general provisions are outlined in Table 9 and Table 10 , respectively. Spending Provisions Some general provisions have a direct impact on the amount of funding in the bill. In FY2019, funding was included in Title V for the Financial Systems Modernization initiative and a grant program for Presidential Residence Protection costs. In this report, Financial Systems Modernization is listed with headquarters components, and it is managed by the DHS Office of the Chief Information Officer. Presidential Residence Protection Cost grants are listed with FEMA, as they manage the distribution of those funds. While H.R. 3931 included funding for Presidential Residence Protection Cost Grants, it did not include separate funding for Financial Systems Modernization. S. 2582 included no additional appropriations for any DHS activities in Title V. P.L. 116-93 , Div. D, included $41 million for Presidential Residence Protection Cost Grants in Title V. In addition to provisions appropriating additional resources, rescissions of prior-year appropriationsâcancellations of budget authorityâthat reduce the net funding level in the bill are found in this title. For FY2019, Division A of P.L. 116-6 included $303 million in rescissions and a provision directing that $300 million of DRF unobligated balances be used to offset new DRF appropriations. For FY2020, the Administration proposed rescinding $250 million in prior-year funding from the portion of the DRF not dedicated to the costs of major disasters. Section 536 of H.R. 3931 included $657 million in rescissions from other appropriations. The largest of these comes from CBP's PC&I appropriation for FY2019, reducing it by $601 millionâthe amount transferred to it from the Treasury's Asset Forfeiture Fund by the Trump Administration for construction of border security infrastructure. S. 2582 included $62 million of provisions that reduced the score of the bill, the largest being a $33 million reduction in administrative costs to be made by DHS from certain operations and support appropriations. P.L. 116-93 , Div. D, included $754 million in rescissions, including $300 million in rescissions from unobligated balances in the DRF, and $233 million in emergency-designated rescissions from CBP appropriations as part of redirecting funds provided in P.L. 116-26 for humanitarian care, critical life and safety improvements to CBP facilities, and electronic health records. For Further Information For additional perspectives on FY2020 DHS appropriations, see the following: CRS Report R45972, Comparing DHS Component Funding, FY2020: In Brief ; CRS Report R44604, Trends in the Timing and Size of DHS Appropriations: In Brief ; and CRS Report R44052, DHS Budget v. DHS Appropriations: Fact Sheet . Congressional clients also may wish to consult CRS's experts directly. Table 11 lists CRS analysts and specialists who have expertise in policy areas linked to DHS appropriations. Appendix. Appropriations Terms and Concepts Budget Authority, Obligations, and Outlays Federal government spending involves a multistep process that begins with the enactment of budget authority by Congress. Federal agencies then obligate funds from enacted budget authority to pay for their activities. Finally, payments are made to liquidate those obligations; the actual payment amounts are reflected in the budget as outlays. Budget authority is established through appropriations acts or direct spending legislation and determines the amounts that are available for federal agencies to spend. The Antideficiency Act prohibits federal agencies from obligating more funds than the budget authority enacted by Congress. Budget authority also may be indefinite in amount, as when Congress enacts appropriations providing "such sums as may be necessary" to complete a project or purpose. Budget authority may be available on a one-year, multiyear, or no-year basis. One-year budget authority is available for obligation only during a specific fiscal year; any unobligated funds at the end of that year are no longer available for spending. Multiyear budget authority specifies a range of time during which funds may be obligated for spending, and no-year budget authority is available for obligation for an indefinite period of time. Obligations are incurred when federal agencies employ personnel, enter into contracts, receive services, and engage in similar transactions in a given fiscal yearâwhich create a legal requirement for the government to pay. Outlays are the funds that are actually spent during the fiscal year. Because multiyear and no-year budget authorities may be obligated over a number of years, outlays do not always match the budget authority enacted in a given year. Additionally, budget authority may be obligated in one fiscal year but spent in a future fiscal year, especially with certain contracts. In sum, budget authority allows federal agencies to incur obligations and authorizes payments, or outlays, to be made from the Treasury. Discretionary funded agencies and programs, and appropriated entitlement programs, are funded each year in appropriations acts. Discretionary and Mandatory Spending Gross budget authority , or the total funds available for spending by a federal agency, may be composed of discretionary and mandatory spending. Discretionary spending is not mandated by existing law and is thus appropriated yearly by Congress through appropriations acts. The Budget Enforcement Act of 1990 defines discretionary appropriations as budget authority provided in annual appropriations acts and the outlays derived from that authority, but it excludes appropriations for entitlements. Mandatory spending , also known as direct spending , consists of budget authority and resulting outlays provided in laws other than appropriations acts and is typically not appropriated each year. Some mandatory entitlement programs, however, must be appropriated each year and are included in appropriations acts. Within DHS, Coast Guard retirement pay is an example of appropriated mandatory spending. Offsetting Collections Offsetting funds are collected by the federal government, either from government accounts or the public, as part of a business-type transaction such as collection of a fee. These funds are not considered federal revenue. Instead, they are counted as negative outlays. DHS net discretionary budget authority , or the total funds appropriated by Congress each year, is composed of discretionary spending minus any fee or fund collections that offset discretionary spending. Some collections offset a portion of an agency's discretionary budget authority. Other collections offset an agency's mandatory spending. These mandatory spending elements are typically entitlement programs under which individuals, businesses, or units of government that meet the requirements or qualifications established by law are entitled to receive certain payments if they establish eligibility. The DHS budget features two mandatory entitlement programs: the Secret Service and the Coast Guard retired pay accounts (pensions). Some entitlements are funded by permanent appropriations, and others are funded by annual appropriations. Secret Service retirement pay is a permanent appropriation and, as such, is not annually appropriated. In contrast, Coast Guard retirement pay is annually appropriated. In addition to these entitlements, the DHS budget contains offsetting Trust and Public Enterprise Funds. These funds are not appropriated by Congress. They are available for obligation and included in the President's budget to calculate the gross budget authority. 302(a) and 302(b) Allocations In general practice, the maximum budget authority for annual appropriations (including DHS) is determined through a two-stage congressional budget process. In the first stage, Congress sets overall spending totals in the annual concurrent resolution on the budget. Subsequently, these totals are allocated among the congressional committees, usually through the statement of managers for the conference report on the budget resolution. These amounts are known as the 302(a) allocations . They include discretionary totals available to the Committees on Appropriations for enactment in annual appropriations bills through the subcommittees responsible for the development of the bills. In the second stage of the process, the appropriations committees allocate the 302(a) discretionary funds among their subcommittees for each of the appropriations bills. These amounts are known as the 302(b) allocations . These allocations must add up to no more than the 302(a) discretionary allocation and form the basis for enforcing budget discipline, since any bill reported with a total above the ceiling is subject to a point of order. The 302(b) allocations may be adjusted during the year by the respective appropriations committee issuing a report delineating the revised suballocations as the various appropriations bills progress toward final enactment. Table A-1 shows comparable figures for the 302(b) allocation for FY2020, based on the adjusted net discretionary budget authority included in Division A of P.L. 116-6 , the President's request for FY2020, and the House and Senate subcommittee allocations for the Homeland Security appropriations bill for FY2020. A series of amendments were offered and adopted in the House full committee markup of the FY2020 DHS appropriations bill that, according to CBO, put the bill $3.066 billion over its 302(b) discretionary allocation. This scoring was later revised to $1.9 billion. These provisions were not included in the final FY2020 DHS annual appropriations act. The Budget Control Act, Discretionary Spending Caps, and Adjustments The Budget Control Act established enforceable discretionary limits, or caps, for defense and nondefense spending for each fiscal year from FY2012 through FY2021. Subsequent legislation, including the Bipartisan Budget Acts of 2013, 2015, 2018, and 2019, amended those caps. Most of the budget for DHS is considered nondefense spending. In addition, the Budget Control Act allows for adjustments that would raise the statutory caps to cover funding for overseas contingency operations/Global War on Terror, emergency spending, and, to a limited extent, disaster relief and appropriations for continuing disability reviews and control of health care fraud and abuse. Three of the four justifications outlined in the Budget Control Act for adjusting the caps on discretionary budget authority have played a role in DHS's appropriations process. Two of theseâemergency spending and overseas contingency operations/Global War on Terrorâare not limited. The third justificationâdisaster reliefâis limited. Under the Budget Control Act, the allowable adjustment for disaster relief was determined by the Office of Management and Budget (OMB), using the following formula until FY2019: Limit on disaster relief cap adjustment for the fiscal year = Rolling average of the disaster relief spending over the last ten fiscal years (throwing out the high and low years) + the unused amount of the potential adjustment for disaster relief from the previous fiscal year. The Bipartisan Budget Act of 2018 amended the above formula, increasing the allowable size of the adjustment by adding 5% of the amount of emergency-designated funding for major disasters under the Stafford Act, calculated by OMB as $6.296 billion. The act also extended the availability of unused adjustment capacity indefinitely, rather than having it only carry over for one year. In August 2019, OMB released a sequestration preview report for FY2020 that provided a preview estimate of the allowable adjustment for FY2020 of $17.5 billion âthe second-largest allowable adjustment for disaster relief in the history of the mechanism. That estimate is the sum of: the 10-year average, dropping the high and low years ($7.9 billion); 5% of the emergency-designated Stafford Act spending since 2012 ($6.6 billion); and carryover from the previous year ($3.0 billion). The final allowable adjustment for FY2020 may still differ from this estimate. Summary:	null	96	46,469	46,471	46,471	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction This report describes and analyzes annual appropriations for the Department of Homeland Security (DHS) for FY2020. It compares the enacted FY2019 appropriations for DHS, the Donald J. Trump Administration's FY2020 budget request, and the appropriations measures developed and ultimately enacted in response to it. This report identifies additional informational resources, reports, and products on DHS appropriations that provide context for the discussion. A list of Congressional Research Service (CRS) policy experts with whom congressional clients may consult on specific topics may be found in CRS Report R42638, Appropriations: CRS Experts . The suite of CRS reports on homeland security appropriations tracks legislative action and congressional issues related to DHS appropriations, with particular attention paid to discretionary funding amounts. These reports do not provide in-depth analysis of specific issues related to mandatory fundingâsuch as retirement payânor do they systematically follow other legislation related to the authorizing or amending of DHS programs, activities, or fee revenues. Discussion of appropriations legislation involves a variety of specialized budgetary concepts. The Appendix to this report explains several of these concepts, including budget authority, obligations, outlays, discretionary and mandatory spending, offsetting collections, allocations, and adjustments to the discretionary spending caps under the Budget Control Act (BCA; P.L. 112-25 ). A more complete discussion of those terms and the appropriations process in general can be found in CRS Report R42388, The Congressional Appropriations Process: An Introduction , coordinated by James V. Saturno, and the Government Accountability Office's A Glossary of Terms Used in the Federal Budget Process . Note on Data and Citations All amounts contained in CRS reports on homeland security appropriations represent budget authority. For precision in percentages and totals, all calculations in these reports use unrounded data, which are presented in each report's tables. Amounts in narrative discussions may be rounded to the nearest million (or 10 million, in the case of numbers larger than 1 billion), unless noted otherwise. Data used in this report for FY2019 annual appropriations are derived from the conference report accompanying P.L. 116-6 , the Consolidated Appropriations Act, 2019. Division A of P.L. 116-6 is the Department of Homeland Security Appropriations Act, 2019. FY2019 supplemental appropriations data are drawn directly from two enacted measures: P.L. 116-20 , the Additional Supplemental Appropriations Act, 2019, which included funding for response and recovery from a range of natural disasters; and P.L. 116-26 , the Emergency Supplemental Appropriations for Humanitarian Assistance and Security at the Southern Border Act, 2019, which included funding for security and humanitarian needs at the U.S.-Mexico border. Data for the FY2020 requested levels and House Appropriations Committee-recommended levels of annual appropriations are drawn from H.Rept. 116-180 , which accompanied H.R. 3931 . Data for the Senate Appropriations Committee-recommended levels of annual appropriations are drawn from S.Rept. 116-125 , which accompanied S. 2582 . Data for the FY2020 enacted levels are drawn from the explanatory statement accompanying P.L. 116-93 , Division D of which is the FY2020 Department of Homeland Security Appropriations Act. Scoring methodology is consistent across this report, relying on data provided by the Appropriations Committees that has been developed with Congressional Budget Office (CBO) methodology. CRS does not attempt to compare this data with Office of Management and Budget (OMB) data because technical scoring differences at times do not allow precise comparisons. Note: Previous CRS reports on DHS appropriations at times used OMB data on mandatory spending for the Federal Emergency Management Agency and the U.S. Secret Service that was not listed in appropriations committee documentationâfor consistency, OMB data on mandatory spending is no longer included in this report. Legislative Action on FY2020 DHS Appropriations This section provides an overview of the legislative process thus far for appropriations for the Department of Homeland Security for FY2020, from the Administration's initial request, through enactment of annual appropriations in Division D of P.L. 116-93 . Annual Appropriations Trump Administration FY2020 Request On March 18, 2019, the Trump Administration released its detailed budget request for FY2020. A lapse in FY2019 annual appropriations from December 22, 2018, until January 25, 2019, delayed the full budget proposal's release past the first Monday in February, the deadline outlined in the Budget Act of 1974. The Trump Administration requested $51.68 billion in adjusted net discretionary budget authority for DHS for FY2020, as part of an overall budget that the Office of Management and Budget estimated to be $92.08 billion (including fees, trust funds, and other funding that is not annually appropriated or does not score against discretionary budget limits). The request amounted to a $2.27 billion (4.6%) increase from the $49.41 billion in annual net discretionary budget authority in appropriations enacted for FY2019 through the Department of Homeland Security Appropriations Act, 2019 ( P.L. 116-6 , Division A). The Trump Administration also requested discretionary funding that does not count against discretionary spending limits set by the Budget Control Act (BCA; P.L. 112-25 ) for two DHS components and is not reflected in the above totals. The Administration requested an additional $14.08 billion for the Federal Emergency Management Agency (FEMA) in disaster relief funding, as defined by the BCA, and in the budget request for the Department of Defense, $190 million in Overseas Contingency Operations/Global War on Terror designated funding (OCO), to be transferred to the Coast Guard from the Navy. House Committee Action On June 11, 2019, the House Appropriations Committee marked up H.R. 3931 , the Department of Homeland Security Appropriations Act, 2020. H.Rept. 116-180 was filed on July 24, 2019. As reported by the committee, H.R. 3931 included $52.80 billion in adjusted net discretionary budget authority. This was $1.12 billion (2.2%) above the level requested by the Administration, and $3.39 billion (6.9%) above the enacted level of annual appropriations for FY2019. The House committee bill included $14.08 billion in disaster relief-designated funding, reflecting the level in the Administration's modified request, and the House Appropriations Committee-reported Defense Appropriations bill included OCO funding to be transferred to the Coast Guard. As a result of amendments adopted in full committee markup, the initial CBO scoring of the bill exceeded the subcommittee allocation by more than $3 billion. (CBO later revised the scoring of those provisions to $1.9 billion.) Senate Committee Action On September 26, 2019, the Senate Appropriations Committee marked up S. 2582 , its version of the Department of Homeland Security Appropriations Act, 2020. S.Rept. 116-125 was filed the same day. As reported by the committee, S. 2582 included $53.18 billion in adjusted net discretionary budget authority. This was $1.50 billion (2.9%) above the level requested by the Administration, and $3.77 billion (7.6%) above the enacted annual level for FY2019. Much of this latter increase was due to the inclusion of $5 billion in funding for border barrier construction as opposed to $1.38 billion in the FY2019 act. Both the House and Senate committees included more discretionary funding for the Coast Guard, Transportation Security Administration, and FEMA than had been requested by the Administration. The Senate committee bill also included $17.35 billion of disaster relief-designated fundingâ$3.28 billion (23.3%) more than the Administration's modified requestâand $190 million in OCO-designated funding for the Coast Guard. Continuing Resolution No annual appropriations for FY2020 had been enacted by late September as FY2019 was drawing to a close, so on September 27, 2019, Congress passed a continuing resolution (CR) ( P.L. 116-59 ), temporarily extending funding at the FY2019 rate for operations through November 21. This CR was subsequently extended through December 20. P.L. 116-59 included four provisions specifically addressing needs of DHS under a CR: Section 132 provides a special apportionment of CR funds to cover Secret Service expenses related to the FY2020 presidential campaign; Section 133 allows for an accelerated rate of apportionment for the Disaster Relief Fund (DRF) to ensure that the programs it funds can be carried out; Section 134 extends the authorization for the National Flood Insurance Program to issue new policies; and Section 135 allows funds to be allocated in accordance with a planned restructuring of some DHS management activities. In addition, Section 101(6) extends by reference some immigration provisions that have been linked to the appropriations cycle. For further information on the FY2020 continuing resolutions, see CRS Report R45982, Overview of Continuing Appropriations for FY2020 (P.L. 116-59) . Enactment On December 16, 2019, the text and explanatory statements for two consolidated appropriations bills were released on the House Rules Committee website. One, which used H.R. 1158 as a legislative shell, included four appropriations measures, including the FY2020 DHS annual appropriations measure as Division D. Division D included $50.47 billion in adjusted net discretionary budget authority. This was $1.22 billion (2.4%) below the level requested by the Administration, and $1.06 billion (2.1%) above the enacted annual level for FY2019. The act included $17.35 billion for the Federal Emergency Management Agency (FEMA) in disaster relief funding, as defined by the Budget Control Act ( P.L. 112-25 ; BCA), and $190 million in Overseas Contingency Operations designated funding (OCO) in an appropriation to the Coast Guard. The House passed the measure by a vote of 280-138 on December 17, and the Senate did so by a vote of 81-11 on December 19. The bill was signed into law of December 20, 2019, and enacted as P.L. 116-93 . Summary of DHS Appropriations Generally, the homeland security appropriations bill includes all annual appropriations provided for DHS, allocating resources to every departmental component. Discretionary appropriations provide roughly two-thirds to three-fourths of the annual funding for DHS operations, depending how one accounts for disaster relief spending and funding for OCO. The remainder of the budget is a mix of fee revenues, trust funds, and mandatory spending. Annual appropriations measures for DHS typically have been organized into five titles. The first four are thematic groupings of components, while the fifth provides general direction to the department, and sometimes includes provisions providing additional budget authority. The DHS Common Appropriations Structure (CAS) When DHS was established in 2003, components of other agencies were brought together over a matter of months, in the midst of ongoing budget cycles. Rather than developing a new structure of appropriations for the entire department, Congress and the Administration continued to provide resources through existing account structures when possible. At the direction of Congress, in 2014 DHS began to work on a new Common Appropriations Structure (CAS), which would standardize the format of DHS appropriations across components. In an interim report in 2015, DHS noted that operating with "over 70 different appropriations and over 100 Programs, Projects, and Activities ... has contributed to a lack of transparency, inhibited comparisons between programs, and complicated spending decisions and other managerial decision-making." After several years of work and negotiations with Congress, DHS made its first budget request in the CAS for FY2017, and implemented it while operating under a CR in October 2016. Under the CAS, legacy appropriations structures were largely converted to a four-category structure: 1. Operations and Support , which covers operating salaries and expenses; 2. Procurement , Construction, and Improvements , which funds planning, operational development, engineering, purchase, and deployment of assets to support component missions; 3. Research and Development , which provides resources needed to identify, explore, and demonstrate new technologies and capabilities to support component missions; and 4. Federal Assistance , which supports grant funding managed by DHS components. All components have an Operations and Support (O&S) appropriation. All operational components and some support and headquarters components have a Procurement, Construction, and Improvements (PC&I) appropriation. Research and Development (R&D) appropriations are even less common, and only FEMA, the Countering Weapons of Mass Destruction Office (CWMD), and U.S. Citizenship and Immigration Services (USCIS) have federal assistance appropriations. Even with the implementation of the CAS structure, some appropriations are not included in those four categories: Federal Protective Service: The Federal Protective Service, which has been a part of several different components of DHS, does not have an appropriation of an explicit amount. Rather, the appropriations measure has language directing that funds credited to the FPS account may be spent by FPS to carry out its mission. It therefore has a net-zero impact on the total net discretionary spending in the bill. USCG's Retired Pay: The Coast Guard's Retired Pay appropriation supports the costs of the USCG retired personnel entitlements, including pensions, Survivor Benefits Plans, and medical care of retired USCG personnel and their dependents. This appropriation is categorized as appropriated mandatory spending: while the U.S. government has a legal obligation to make these payments, there is no permanent statutory mechanism in place to provide the funds. Because the government is required to make these payments, the Retired Pay appropriation does not count against the discretionary allocation of the bill. FEMA's Disaster Relief Fund: The Federal Emergency Management Agency (FEMA) receives a separate appropriation for its activities authorized under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Â§5121 et seq.). This allows for more consistent tracking of FEMA's disaster assistance spending over time, and ensures more transparency into the availability of funds for disaster assistance versus FEMA's other grant activities, which are funded through the Federal Assistance appropriation. FEMA's National Flood Insurance Fund: The National Flood Insurance Program is largely mandatory spending. However, some program functions, including mission support, floodplain management, and flood mapping, are paid for through discretionary appropriations. Certain other program costs are paid for by fees collected by the government, which requires appropriations language to allow those resources to be spent. These include: Operating expenses and salaries and expenses associated with flood insurance operations; Commissions and taxes of agents; Interest on borrowings from the Treasury; and Flood mitigation actions and flood mitigation assistance. Administrative and General Provisions Prior to the FY2017 act, the provisos accompanying many appropriations included directions to components or specific conditions on how the budget authority it provided could be used. Similarly, general provisions provided directions or conditions to one or more components. In the FY2017 act, a number of these provisions within appropriations and component-specific general provisions were grouped at the ends of the titles where their targeted components are funded, and identified as "administrative provisions." This practice has continued in subsequent years. This report tracks changes in administrative and general provisions compared to the baseline of the prior year's enacted measure, noting provisions dropped, added, and modified. These changes from the baseline may take place for a variety of reasons. Due to the passage of time or enactment of permanent legislation, a provision may require adjustment or lose its relevance. Other provisions are the priority of members in one chamber or another, and as the enacted bill represents a compromise between those positions, the bills developed by a one chamber may not necessarily reflect the other chamber's priorities. DHS Appropriations: Summary by Component Type The following sections of the report discuss the appropriations provided for the department by type of component. It groups the 15 components of DHS into the following structure: Law Enforcement Operational Components (funded in Title II) U.S. Customs and Border Protection Immigration and Customs Enforcement Transportation Security Administration U.S. Coast Guard U.S. Secret Service Incident Response and Recovery Operational Components (Title III) Cybersecurity and Infrastructure Security Agency Federal Emergency Management Agency Support Components (Title IV) U.S. Citizenship and Immigration Services Federal Law Enforcement Training Center Science and Technology Directorate Countering Weapons of Mass Destruction Office Headquarters Components (Title I) Office of the Secretary and Executive Management Departmental Management Directorate Analysis and Operations Office of Inspector General Each group's and component's role is briefly described below, and their FY2019 enacted and FY2020 requested, recommended, and enacted appropriations are presented in tables arranged by grouped components. After each funding table, a brief analysis of selected administrative provisions for that group is provided. Law Enforcement Operational Components Funding for law enforcement operational components is generally provided in Title II of the annual DHS appropriations act. This is the largest title of the bill, although not all of DHS's largest components are included in it. Components and Missions U.S. Customs and Border Protection (CBP) : CBP is responsible for securing America's borders, coastlines, and ports of entry, preventing the illegal entry of persons and goods while facilitating lawful travel, trade, and immigration. Immigration and Customs Enforcement (ICE): ICE is the principal criminal investigative agency within DHS, and is charged with preventing terrorism and combating the illegal movement of people and goods. Transportation Security Administration (TSA): TSA provides security for the U.S. transportation system while ensuring the free and secure movement of people and goods. U.S. Coast Guard (USCG): The USCG is the principal federal agency responsible for maritime safety, security, and environmental stewardship in U.S. ports and inland waterways. The USCG is a hybrid of a law enforcement agency, regulatory agency, and first responder, as well as being a component of DHS, the intelligence community, and of the U.S. Armed Forces. U.S. Secret Service (USSS): The USSS is responsible for protecting the President, the Vice-President, their families and residences, past Presidents and their spouses, national and world leaders visiting the United States, designated buildings (including the White House and Vice President's Residence), and special events of national significance. The USSS also investigates and enforces laws related to counterfeiting and certain financial crimes. Table 1 includes a breakdown of budgetary resources provided to these components controlled through appropriations legislation. Administrative Provisions H.R. 3931 as reported by the House Appropriations Committee had 31 administrative provisions for Title II, 21 of which were unchanged from FY2019. The House committee bill dropped eight provisions which were in the FY2019 act, including Section 208 , which allowed ICE to reprogram funding to maintain detention of aliens that were prioritized for removal; Section 214 , which mandated TSA continue to monitor airport exit lanes; Section 223 , which allowed USCG to allocate its OCO funding within the Operations and Support appropriation; Section 225 , which authorized a TSA pilot program for screening services at locations other than primary passenger terminals; Section 227 , which requires the USCG maintain the mission and staffing of its Operations Systems Center; Section 228 , which prohibited competitions to privatize activities of the USCG National Vessel Documentation Center; Section 229 , which allowed funds in the bill to alter activities of the USCG Civil Engineering program, but not reduce them; and Section 232 , which required DHS collaboration with local governments on siting border barriers within their jurisdictions. Three previously carried administrative provisions were modified, and seven new provisions were added. S. 2582 as reported by the Senate Appropriations Committee, had 33 administrative provisions in Title II. Only one provision was dropped from the FY2019 actâSection 225, described above. One previously carried provision was modified and three new provisions were added. P.L. 116-93 , Div. D, includes 36 administrative provisions in Title II. Sections 225 and 232 from the FY2019 act were dropped, four provisions were modified, and six new administrative provisions were included. Modified administrative provisions are outlined in Table 2 , while new administrative provisions proposed or included by the appropriations committees are outlined in Table 3 . Incident Response and Recovery Operational Components Funding for operational components which are focused on incident response and recovery is generally found in Title III of the annual DHS appropriations act. It includes funding for FEMA, which has the largest budget of any DHS componentâan appropriated budget largely driven by disaster programs authorized under the Stafford Act, and an overall budget which also includes non-appropriated funding for the National Flood Insurance Program. Title III also includes funding for the newly restructured Cybersecurity and Infrastructure Security Agency (CISA), formerly the National Protection and Programs Directorate. The reorganization included a shift of the Federal Protective Service from CISA to the Management Directorate, reducing the gross budgetary resources in this title. Components and Missions Cybersecurity and Infrastructure Security Agency (CISA): Formerly known as the National Protection and Programs Directorate (NPPD), CISA promotes information sharing to build resilience and mitigate risk from cyber and physical threats to infrastructure, and leads cross-government cybersecurity initiatives. Federal Emergency Management Agency (FEMA): FEMA leads the federal government's efforts to reduce the loss of life and property and protect the United States from all hazards, including natural disasters, acts of terrorism, and other disasters through a risk-based, comprehensive emergency management system of preparedness, protection, response, recovery, and mitigation. Table 4 includes a breakdown of budgetary resources for these components controlled through appropriations legislation. As some annually appropriated resources were provided for FEMA from outside Title III in FY2019, by transfer and by appropriation, a separate line is included for FEMA showing a total for what is provided solely within Title III, then the non-Title III funding, followed by the total annual appropriation for FEMA. The table only reflects the impact of transfers in the discretionary funding and budgetary resource totals. Administrative Provisions H.R. 3931 as reported by the House Appropriations Committee had eight administrative provisions in Title III, five of which were unchanged from FY2019. Two provisions were dropped from the FY2019 act: Section 301, which required a report on revised methods to assess and allocate costs for countermeasures used by the Federal Protective Service; and Section 309, which raised the federal share of costs for essential assistance and debris removal for wildfire major disasters declared in calendar year 2018 from 75% to 90%. Two previously carried administrative provisions were modified, and one new provision was added, which would allow governors to resubmit and FEMA to reconsider requests for Stafford Act individual assistance for certain disasters. S. 2582 as reported by the Senate Appropriations Committee had six administrative provisions in Title III. The Senate Appropriations Committee chose to drop three administrative provisions from this title that were included in the FY2019 actâthe two described above, and Section 307, which provided certain waivers for SAFER Act grants. No previously carried provisions were substantively modified and no new provisions were added. P.L. 116-93, Div. D, includes seven administrative provisions in Title III. Sections 301 and 309 from the FY2019 act as described above were dropped, two provisions were modified, and the new provision proposed in the House Appropriations Committee bill was not included. Modified administrative provisions are tracked in Table 5 . Support Components Funding for support components is generally found in Title IV of the annual DHS appropriations bill. The relatively small size of some of these appropriations makes changes in their funding appear more significant if expressed on a percentage basis. Components and Missions U.S. Citizenship and Immigration Services (USCIS): USCIS administers U.S. immigration laws that govern temporary admission and permanent immigration to the United States. Federal Law Enforcement Training Center (FLETC): FLETC is a technical training school for law enforcement professionals, meeting the basic and specialized training needs of approximately 100 federal agencies, as well as state and local organizations. Science and Technology Directorate (S&T): S&T leads and coordinates research, development, testing, and evaluation work for DHS, and supports departmental acquisitions. Countering Weapons of Mass Destruction Office (CWMD): CWMD leads DHS's efforts to develop and enhance programs and capabilities that defend against weapons of mass destruction, and includes the Department's Chief Medical Officer, who serves as the principal advisor to DHS leadership on medical and public health issues. Table 6 includes a breakdown of budgetary resources provided to these components controlled through appropriations legislation. Administrative Provisions H.R. 3931 as reported by the House Appropriations Committee included eight administrative provisions in Title IV, six of which were unchanged from FY2019. It dropped two: Section 402, which barred USCIS from providing immigration benefits unless it had received a background check that did not preclude providing such a benefit; and Section 408, which provided budgetary flexibility to support the transfer of the National Bio- and Agrodefense Facility to the U.S. Department of Agriculture. H.R. 3931 included two new provisions. S. 2582 as reported by the Senate Appropriations Committee had nine administrative provisions in Title IV. The Senate Appropriations Committee chose to drop one provision from this title that was included in the FY2019 actâSection 408, described above. No previously carried provisions were substantively modified and two new provisions were added. P.L. 116-93 , Div. D, includes seven administrative provisions in Title IV. Sections 402 and 408 from the FY2019 act as described above were dropped. One new provision was added. New administrative provisions proposed or included by the appropriations committees are outlined in Table 7 . Headquarters Components Funding for headquarters components is traditionally found in Title I of the annual DHS appropriations act, although some initiatives have been funded in the past through general provisions. Components and Missions Office of the Secretary and Executive Management (OSEM): OSEM provides central leadership, management, direction and oversight for all DHS components. Departmental Management Directorate (DM): DM provides DHS-wide mission support services. Analysis and Operations (A&O): A&O covers two separate offices: The Office of Intelligence and Analysis (I&A), which integrates and shares intelligence with DHS components and stakeholders to allow them to identify, mitigate, and respond to threats; and the Office of Operations Coordination (OPS), which provides operations coordination, information sharing, and the common operating picture for DHS, and helps ensure DHS continuity and resilience. Office of Inspector General (OIG): The OIG is an independent, objective audit, inspection, and investigative body that reports to the Secretary and to Congress on DHS efficiency and effectiveness, and works to prevent waste, fraud, and abuse. Table 8 provides a breakdown of the budgetary resources provided to these components controlled through appropriations legislation. As resources were requested or provided for the Management Directorate from outside Title I, separate lines are included for each of those components showing a total for what is provided solely within Title I, then the individual items funded outside the title, followed by the total annual appropriation for the components. The table only reflects the impact of transfers in the discretionary funding and budgetary resource totals. Administrative Provisions The title funding DHS headquarters components in H.R. 3931 (Title I) had five administrative provisions, three of which are unchanged from FY2019. Two administrative provisions were dropped: Section 101, a requirement for a monthly budget and staffing report; and Section 106, a reporting requirement on visa overstay data. One previously carried administrative provision was modified to bar the use of Treasury Forfeiture Fund resources to build border security infrastructure. One new provision was added in the House bill, to create an Immigration Detention Ombudsman. Senate Appropriations Committee-reported S. 2582 had six administrative provisions in Title I. The Senate Appropriations Committee retained all six previously enacted provisions without substantive modifications, and no new provisions were added. P.L. 116-93 , Div. D, includes seven administrative provisions in Title I. No provisions were dropped. The new provision proposed in the House Appropriations Committee bill creating the Immigration Detention Ombudsman was included with minor modifications. General Provisions As noted earlier, the fifth title of the annual DHS appropriations act contains general provisions, the impact of which may reach across the government, apply to the entire department, affect multiple components, or focus on a single activity. Most general provisions remain functionally unchanged from year to year, providing guidance to DHS or structure to DHS appropriations with little more than updates to effective dates or amounts. The FY2019 DHS appropriations act included 40 such general provisions. H.R. 3931 , as reported by the House Appropriations Committee, carried 36 such provisions, including four added to the committee's initial draft in full committee markup. Four of the 36 were modified versions of FY2019 general provisions providing policy direction, while four were new. Six provisions carried in the FY2019 act were not retained in House committee version of H.R. 3931 : Section 516 , which restricted transfer or release of detainees from Guantanamo Bay; Section 518 , which restricted the use of funds in the bill to hire unauthorized workers; Section 521 , which provided funding for financial systems modernization activities; Section 522 , which required reductions in administrative spending from certain accounts; Section 536 , which barred the use of funds to implement the Arms Trade Treaty prior to its ratification; and Section 537 , which required the Administration to provide a list of spending cuts as alternatives to proposed fee increases that had not been authorized before the beginning of the budget year. S. 2582 , as reported by the Senate Appropriations Committee, had 36 general provisions in Title V, 32 of which were unchanged from FY2019. One provision was added, and one was modified. Three provisions carried in the FY2019 act that reduced budget authority available to DHS were modified in the Senate committee's bill: the DHS-wide reduction in total Operations and Support appropriations (originally Section 522, now Section 521), and rescissions of prior-year appropriations (originally Section 538 and 539, now Section 536). Three other provisions carried in the FY2019 act were dropped: Section 521 , which provided $51 million for DHS financial systems modernization; Section 531 , which provided $41 million in grants for local law enforcement costs for Presidential protection; and Section 535 , which prohibited using funds for a Principal Federal Official during a declared Stafford Act major disaster or emergency, with certain exceptions. P.L. 116-93 , Div. D, included 40 general provisions in Title V. Two provisions were dropped from the FY2019 DHS Appropriations ActâSections 521 and 522 described above. No new policy-related general provisions were added, although the last four general provisions provided rescissions of various types: Section 537 rescinds $233 million in emergency designated supplemental appropriations for CBP from P.L. 116-26 , which are reappropriated in Title II of this act; Section 538 rescinds $202 million in unobligated balances from across DHS; Section 539 rescinds almost $19 million in lapsed balances; Section 540 rescinds $300 million in unobligated balances from the Disaster Relief Fund. Modified and new policy-related general provisions are outlined in Table 9 and Table 10 , respectively. Spending Provisions Some general provisions have a direct impact on the amount of funding in the bill. In FY2019, funding was included in Title V for the Financial Systems Modernization initiative and a grant program for Presidential Residence Protection costs. In this report, Financial Systems Modernization is listed with headquarters components, and it is managed by the DHS Office of the Chief Information Officer. Presidential Residence Protection Cost grants are listed with FEMA, as they manage the distribution of those funds. While H.R. 3931 included funding for Presidential Residence Protection Cost Grants, it did not include separate funding for Financial Systems Modernization. S. 2582 included no additional appropriations for any DHS activities in Title V. P.L. 116-93 , Div. D, included $41 million for Presidential Residence Protection Cost Grants in Title V. In addition to provisions appropriating additional resources, rescissions of prior-year appropriationsâcancellations of budget authorityâthat reduce the net funding level in the bill are found in this title. For FY2019, Division A of P.L. 116-6 included $303 million in rescissions and a provision directing that $300 million of DRF unobligated balances be used to offset new DRF appropriations. For FY2020, the Administration proposed rescinding $250 million in prior-year funding from the portion of the DRF not dedicated to the costs of major disasters. Section 536 of H.R. 3931 included $657 million in rescissions from other appropriations. The largest of these comes from CBP's PC&I appropriation for FY2019, reducing it by $601 millionâthe amount transferred to it from the Treasury's Asset Forfeiture Fund by the Trump Administration for construction of border security infrastructure. S. 2582 included $62 million of provisions that reduced the score of the bill, the largest being a $33 million reduction in administrative costs to be made by DHS from certain operations and support appropriations. P.L. 116-93 , Div. D, included $754 million in rescissions, including $300 million in rescissions from unobligated balances in the DRF, and $233 million in emergency-designated rescissions from CBP appropriations as part of redirecting funds provided in P.L. 116-26 for humanitarian care, critical life and safety improvements to CBP facilities, and electronic health records. For Further Information For additional perspectives on FY2020 DHS appropriations, see the following: CRS Report R45972, Comparing DHS Component Funding, FY2020: In Brief ; CRS Report R44604, Trends in the Timing and Size of DHS Appropriations: In Brief ; and CRS Report R44052, DHS Budget v. DHS Appropriations: Fact Sheet . Congressional clients also may wish to consult CRS's experts directly. Table 11 lists CRS analysts and specialists who have expertise in policy areas linked to DHS appropriations. Appendix. Appropriations Terms and Concepts Budget Authority, Obligations, and Outlays Federal government spending involves a multistep process that begins with the enactment of budget authority by Congress. Federal agencies then obligate funds from enacted budget authority to pay for their activities. Finally, payments are made to liquidate those obligations; the actual payment amounts are reflected in the budget as outlays. Budget authority is established through appropriations acts or direct spending legislation and determines the amounts that are available for federal agencies to spend. The Antideficiency Act prohibits federal agencies from obligating more funds than the budget authority enacted by Congress. Budget authority also may be indefinite in amount, as when Congress enacts appropriations providing "such sums as may be necessary" to complete a project or purpose. Budget authority may be available on a one-year, multiyear, or no-year basis. One-year budget authority is available for obligation only during a specific fiscal year; any unobligated funds at the end of that year are no longer available for spending. Multiyear budget authority specifies a range of time during which funds may be obligated for spending, and no-year budget authority is available for obligation for an indefinite period of time. Obligations are incurred when federal agencies employ personnel, enter into contracts, receive services, and engage in similar transactions in a given fiscal yearâwhich create a legal requirement for the government to pay. Outlays are the funds that are actually spent during the fiscal year. Because multiyear and no-year budget authorities may be obligated over a number of years, outlays do not always match the budget authority enacted in a given year. Additionally, budget authority may be obligated in one fiscal year but spent in a future fiscal year, especially with certain contracts. In sum, budget authority allows federal agencies to incur obligations and authorizes payments, or outlays, to be made from the Treasury. Discretionary funded agencies and programs, and appropriated entitlement programs, are funded each year in appropriations acts. Discretionary and Mandatory Spending Gross budget authority , or the total funds available for spending by a federal agency, may be composed of discretionary and mandatory spending. Discretionary spending is not mandated by existing law and is thus appropriated yearly by Congress through appropriations acts. The Budget Enforcement Act of 1990 defines discretionary appropriations as budget authority provided in annual appropriations acts and the outlays derived from that authority, but it excludes appropriations for entitlements. Mandatory spending , also known as direct spending , consists of budget authority and resulting outlays provided in laws other than appropriations acts and is typically not appropriated each year. Some mandatory entitlement programs, however, must be appropriated each year and are included in appropriations acts. Within DHS, Coast Guard retirement pay is an example of appropriated mandatory spending. Offsetting Collections Offsetting funds are collected by the federal government, either from government accounts or the public, as part of a business-type transaction such as collection of a fee. These funds are not considered federal revenue. Instead, they are counted as negative outlays. DHS net discretionary budget authority , or the total funds appropriated by Congress each year, is composed of discretionary spending minus any fee or fund collections that offset discretionary spending. Some collections offset a portion of an agency's discretionary budget authority. Other collections offset an agency's mandatory spending. These mandatory spending elements are typically entitlement programs under which individuals, businesses, or units of government that meet the requirements or qualifications established by law are entitled to receive certain payments if they establish eligibility. The DHS budget features two mandatory entitlement programs: the Secret Service and the Coast Guard retired pay accounts (pensions). Some entitlements are funded by permanent appropriations, and others are funded by annual appropriations. Secret Service retirement pay is a permanent appropriation and, as such, is not annually appropriated. In contrast, Coast Guard retirement pay is annually appropriated. In addition to these entitlements, the DHS budget contains offsetting Trust and Public Enterprise Funds. These funds are not appropriated by Congress. They are available for obligation and included in the President's budget to calculate the gross budget authority. 302(a) and 302(b) Allocations In general practice, the maximum budget authority for annual appropriations (including DHS) is determined through a two-stage congressional budget process. In the first stage, Congress sets overall spending totals in the annual concurrent resolution on the budget. Subsequently, these totals are allocated among the congressional committees, usually through the statement of managers for the conference report on the budget resolution. These amounts are known as the 302(a) allocations . They include discretionary totals available to the Committees on Appropriations for enactment in annual appropriations bills through the subcommittees responsible for the development of the bills. In the second stage of the process, the appropriations committees allocate the 302(a) discretionary funds among their subcommittees for each of the appropriations bills. These amounts are known as the 302(b) allocations . These allocations must add up to no more than the 302(a) discretionary allocation and form the basis for enforcing budget discipline, since any bill reported with a total above the ceiling is subject to a point of order. The 302(b) allocations may be adjusted during the year by the respective appropriations committee issuing a report delineating the revised suballocations as the various appropriations bills progress toward final enactment. Table A-1 shows comparable figures for the 302(b) allocation for FY2020, based on the adjusted net discretionary budget authority included in Division A of P.L. 116-6 , the President's request for FY2020, and the House and Senate subcommittee allocations for the Homeland Security appropriations bill for FY2020. A series of amendments were offered and adopted in the House full committee markup of the FY2020 DHS appropriations bill that, according to CBO, put the bill $3.066 billion over its 302(b) discretionary allocation. This scoring was later revised to $1.9 billion. These provisions were not included in the final FY2020 DHS annual appropriations act. The Budget Control Act, Discretionary Spending Caps, and Adjustments The Budget Control Act established enforceable discretionary limits, or caps, for defense and nondefense spending for each fiscal year from FY2012 through FY2021. Subsequent legislation, including the Bipartisan Budget Acts of 2013, 2015, 2018, and 2019, amended those caps. Most of the budget for DHS is considered nondefense spending. In addition, the Budget Control Act allows for adjustments that would raise the statutory caps to cover funding for overseas contingency operations/Global War on Terror, emergency spending, and, to a limited extent, disaster relief and appropriations for continuing disability reviews and control of health care fraud and abuse. Three of the four justifications outlined in the Budget Control Act for adjusting the caps on discretionary budget authority have played a role in DHS's appropriations process. Two of theseâemergency spending and overseas contingency operations/Global War on Terrorâare not limited. The third justificationâdisaster reliefâis limited. Under the Budget Control Act, the allowable adjustment for disaster relief was determined by the Office of Management and Budget (OMB), using the following formula until FY2019: Limit on disaster relief cap adjustment for the fiscal year = Rolling average of the disaster relief spending over the last ten fiscal years (throwing out the high and low years) + the unused amount of the potential adjustment for disaster relief from the previous fiscal year. The Bipartisan Budget Act of 2018 amended the above formula, increasing the allowable size of the adjustment by adding 5% of the amount of emergency-designated funding for major disasters under the Stafford Act, calculated by OMB as $6.296 billion. The act also extended the availability of unused adjustment capacity indefinitely, rather than having it only carry over for one year. In August 2019, OMB released a sequestration preview report for FY2020 that provided a preview estimate of the allowable adjustment for FY2020 of $17.5 billion âthe second-largest allowable adjustment for disaster relief in the history of the mechanism. That estimate is the sum of: the 10-year average, dropping the high and low years ($7.9 billion); 5% of the emergency-designated Stafford Act spending since 2012 ($6.6 billion); and carryover from the previous year ($3.0 billion). The final allowable adjustment for FY2020 may still differ from this estimate.	Summary:	gov_report	1,024	null	69
crs_R46115	crs_R46115_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Overview On June 5, 2019, the commissioners of the Securities and Exchange Commission (SEC) voted to adopt Regulation Best Interest (Reg BI). Reg BI is arguably the centerpiece and most controversial part of a set of regulatory reforms related to financial professionals adopted by the SEC on that day. A new rule under the Securities and Exchange Act of 1934 (P.L. 73-291), Reg BI changes broker-dealers' obligations in their relationships with retail customers. According to the SEC, the regulation is meant to "enhance the broker-dealer standard of conduct beyond existing ... obligations [by] requiring broker-dealers ... to: (1) act in the best interest of the retail customer at the time the recommendation is made, without placing the financial or other interest of the broker-dealer ahead of the interests of the retail customer; and (2) address [various broker-dealer] conflicts of interest [with those clients]." H.R. 3351 , the FY2020 Financial Services and General Government appropriations bill as passed by the House included an amendment sponsored by House Financial Services Committee Chair Maxine Waters that would have forbidden the SEC from using any of its congressional spending authority to implement, administer, enforce, or publicize the final rules and interpretations with respect to Reg BI. This language, however, was not included in H.R. 1865 / P.L. 116-94 , the Further Consolidated Appropriations Act, 2020, as enacted. This report examines Reg BI in that it (1) provides background on the roles and the regulation of two types of financial professionals, broker-dealers and investment advisers; (2) provides background on the Obama Administration Department of Labor's 2016 fiduciary rule for broker-dealers under the Employee Retirement Income Security Act of 1974 (ERISA, P.L. 93-406 ); (3) describes the component obligations required to fulfill Reg BI's best interest broker-dealer standard; (4) examines state-based broker-dealer fiduciary regulatory and statutory developments; (5) examines congressional concerns and actions regarding Reg BI; (6) presents some key supportive and critical perspectives on Reg BI; and (7) examines research with potential relevance to the debate over the potential costs and benefits of Reg BI. Background on Broker-Dealers and Investment Advisers Broker-dealer firms or their affiliated persons act as brokers when they execute securities trades for their clients and as dealers when they trade their own securities for their own benefit. They are often discussed as a joint entity because most broker-dealers must register with the SEC, and must generally be members of and comply with the rules and guidance of a self-regulatory organization (SRO), the Financial Industry Regulatory Authority (FINRA, an SEC-regulated nonprofit). In addition, broker-dealer sales personnel (called registered representatives) register with their state securities regulator. SEC-registered broker-dealers are largely regulated under the Securities Exchange Act of 1934 (P.L. 73-291) and comprise a small set of large and medium-sized broker-dealers and thousands of smaller broker-dealers who compete in small niche or regional markets. Broker-dealers, or simply brokers, have significant range in the kinds of services they provide and generally divide into two groups, full-service and discount brokerage firms. Broker-dealers typically provide discrete, transaction-specific investment recommendations and are compensated via the commissions they receive for each individual transaction. A broker-dealer's investment recommendations suite may include buying securities from or selling securities to retail customers on a principal basis or recommending the purchase of proprietary products. In their investment recommendations, they are generally subject to what is known as the suitability standard , which requires them to "reasonably believe that a client recommendation is suitable given the client's investor profile." Investment a dvisers are firms or persons who provide investment advice directly to their clients. Clients include individuals and institutional investors, such as mutual funds and hedge funds. Pursuant to the Investment Advisers Act of 1940 (IAA, which regulates key aspects of investment advisers; P.L. 76-768), advisers with more than $110 million in assets under management (AUM) must register with the SEC. States generally register and regulate investment adviser firms with between $25 million and $110 million in AUM. Investment advisers typically provide ongoing investment advice and services with respect to client portfolio management. Their compensation is generally determined by the client's account AUM size, a fixed fee, or other arrangements, such as a fee-based compensation model. Although not expressly written in the IAA, court rulings and decisions from SEC enforcement cases have helped establish the fiduciary standard , the prevailing standard of retail customer care for investment advisers. Under this standard, advisers are generally expected to serve the best interests of their clients and are required to subordinate their own interests to those of their clients. Ideally, advisers are also expected to either eliminate material conflicts of interest or be fully transparent to the client about the existence of such conflicts. By contrast, broker-dealers are generally subject to a less demanding standard of client care that is found in FINRA's Rule 2111, the suitability standard . Triggered when a broker-dealer makes an investment recommendation, the "standard requires that a firm or associated person have a reasonable basis to believe a recommended transaction or investment strategy involving a security or securities is suitable for the customer.... [It] is based on the information obtained through reasonable diligence of the firm or associated person to ascertain the customer's investment profile." Also, unlike investment advisers, brokers do not have an ongoing duty to monitor their clients' financial positions. Broker-dealers are, however, subject to a fiduciary standard (1) when they have control of a client's discretionary account (meaning that they have a client's authority to buy and sell securities on the client's behalf) generally, according to case law; or (2) in a few statesâCalifornia, Missouri, South Dakota, and South Carolinaâwhere state courts have reportedly "imposed an unambiguous fiduciary standard" on them. The overall number of SEC-registered broker-dealers fell from more than 6,000 in 2005 to fewer than 4,000 in 2018, in contrast to an increase of SEC-registered investment advisers from about 9,000 in 2005 to more than 13,000 in 2018. Blurred Lines Between Broker-Dealers and Investment Advisers, the Dodd-Frank Act, and a Uniform Fiduciary Standard During the late 1980s and early 1990s, the landscape for the delivery of investment advice began to shift as broker-dealers increasingly offered financial advisory services somewhat akin to investment advisers, including investment and retirement planning. The expansion was reportedly helped along by the brokers' reliance on the IAA's "solely incidental" exemption from compliance with the act, and the growth of dually registered firms (i.e., firms registered with FINRA and the SEC as both broker-dealers and investment advisers). Compounding the potential retail customer perplexity over who is an investment adviser and who is a broker-dealer is the existence of "dozens of titles [in the broker world], including generic titles, such as financial advisor and financial consultant, as well as advertisements that reportedly claim that 'we do it all.'" As a consequence of these developments, various surveys report that retail customers are often confused over the distinctions between broker-dealers and advisers and the unique set of customer obligations attached to each of them. This was encapsulated in an observation made in a Rand Corporation study: "[T]he industry is becoming increasingly complex, firms are becoming more heterogeneous and intertwined, and investors do not have a clear understanding of the different functions and fiduciary responsibilities of financial professionals." In 2009, the U.S. Department of the Treasury issued a white paper on potential financial reforms in the wake of the financial crisis, Financial Regulatory Reform â A New Foundation: Rebuilding Financial Supervision and Regulation . A section of the report observed that for many investors there was little if any difference in the way they perceived brokers and advisers. It then argued that "retail customers repose the same degree of trust in their brokers as they do in investment advisers, but the legal responsibilities of the intermediaries may not be the same." The white paper then recommended the enactment of new legislation "requiring that broker-dealers who provide investment advice about securities to investors have the same fiduciary obligations as registered investment advisers." On the heels of the Treasury report and driven in part by similar concerns regarding investor confusion over the roles of investment advisors and broker-dealers, Section 913 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act, P.L. 111-203 ) did a number of things in this area. Among them was granting the SEC authority to impose fiduciary rules on broker-dealers subject to certain conditions and requiring the SEC to study various aspects of financial professionals' standards of retail customer care. Among other questions, the study was asked to evaluate "whether there are legal or regulatory gaps, shortcomings, or overlaps in legal or regulatory standards in the protection of retail customers relating to the standards of care for providing personalized investment advice about securities to retail customers that should be addressed by rule or statute." Released in 2011, the staff study recommended that the SEC bolster investor protection and reduce investor confusion regarding the differences between brokers and investment advisers. The staff study then recommended "establishing a uniform fiduciary standard for investment advisers and broker-dealers when providing investment advice about securities to retail customers that is consistent with the standard that currently applies to investment advisers." After the study, then-SEC Chair Mary Schapiro noted that the SEC staff had been tasked with considering the various ramifications of the recommended rulemaking. No such rulemaking was proposed or adopted by the SEC under Chair Schapiro or her successor, Chair Mary Jo White, who in 2015 reportedly said that the agency should "implement a uniform fiduciary duty for broker-dealers and investment advisers where the standard is to act in the best interest of the investor." The 2016 DOL Fiduciary Rules In April 2016, the Obama Administration's Department of Labor (DOL) adopted new rules under the Employee Retirement Income Security Act of 1974 (ERISA; P.L. 93-406 ). Previously, under ERISA, securities brokers-dealers who provided services to retirement plans and who were not fiduciaries were generally subject to a suitability standard. The 2016 DOL rules represented a significant change from this. Under them, broker-dealers were generally deemed to be fiduciaries while providing recommendations to retirement plan participants. Major parts of the rules were not to be implemented until 2018. In making the case for the reform, the Obama Administration argued that the definition of investment advice needed to be revised given the changed nature of how Americans were readying themselves for retirement after ERISA's enactment in 1975. More specifically, the number of participants in traditional defined benefit (DB) plans had significantly declined, whereas the number of participants in defined contribution (DC) plans, such as 401(k) plans, had surged. The Administration argued that DC plan participants tend to confront more decision options, such as contribution amounts, investment allocations, rollovers, and withdrawals, than do DB plan participants. As such, it was argued that those in DB plans may have greater need for investment assistance and advice subject to the more strenuous fiduciary standard. Supporters of DOL's fiduciary rules, including investor advocates, argued that financial advisers (including broker-dealers) would no longer be able to direct clients to products that awarded them larger commissions at the client's expense. Detractors, including broker-dealers, financial planners, and various Members of Congress, stressed that the rules would increase the cost of retirement accounts and would curtail various investors' access to investment advice. In February 2017, President Trump released a presidential memorandum ordering the Labor Department to reexamine the rule. Later, between April and November 2017, DOL ordered a series of delays for key parts of the rule that stretched until July 2019. On March 15, 2018, the Fifth Circuit Court of Appeals vacated the DOL rules. It ruled that DOL had exceeded its statutory authority under ERISA in writing the rules. The decision formally halted implementation of the rules. The adjudication was the result of a lawsuit brought by various business groups, including the U.S. Chamber of Commerce (a major business trade group), the Financial Services Roundtable (a group that represents the nation's largest firms in banking, insurance, and investment services), and the Securities Industry and Financial Markets Association (SIFMA, a major trade group for broker-dealers, investment banks and asset managers). The Trump Administration's DOL has not challenged the Fifth Circuit's decision. However, in fall 2018, DOL officially announced that it was "considering regulatory options in light of the Fifth Circuit opinion" and projected a September 2019 date for the potential new final rules. In June 2019, various DOL officials, including then-DOL Secretary Alexander Acosta, reportedly said that the agency "was working with the SEC to promulgate new rules." The same month, Jeanne Klinefelter Wilson, deputy assistant secretary of the Employee Benefits Security Administration, the DOL unit that oversees ERISA, observed that although DOL and the SEC operate under different regulations, "the goal is to proceed under a raw common framework and propose Department of Labor rules [that] track as closely as possible with [the] SEC's best-interest regulations." In July 2019, President Trump nominated Eugene Scalia to succeed Alexander Acosta as Secretary of Labor. Scalia was later confirmed for that post by the Senate on September 26, 2019. While a partner with the law firm Gibson, Dunn, & Crutcher, Scalia presented oral arguments on behalf of the plaintiffs in the aforementioned case in which the court vacated DOL's fiduciary rule. Scalia has reportedly described the rule as "an immensely controversial and burdensome rule that really pushed the envelope of the agency's regulatory authority." The possibility has been raised that Secretary Scalia may have to recuse himself from involvement in the development of a fiduciary rule because of government ethics rules that guard against conflicts of interest by prohibiting officials from participating in issues they were involved with in the private sector. The Reg BI Final Rule On June 5, 2019, the SEC commissioners separately approved parts of a package of final rules related to the duty of care financial professionals owe to retail investors. The package contained Reg BI; the Form Customer Relationship Summary, a short-form disclosure that would identify key distinctions in the types of services offered by broker-dealers and investment advisers to their clients; applicable legal standards, and potential conflicts of interest; a clarification of the fiduciary duty owed by investment advisers to their clients under the Investment Advisers Act; and an interpretation of the "solely incidental" broker-dealer exclusion under the IAA aimed at clarifying when a broker-dealer's exercise of investment advisory activities redefines it as an investment adviser according to the IAA. As observed earlier, in addition to its stated goal of requiring a broker-dealer to act in the best interest of a retail customer making recommendations, Reg BI also seeks to address some remaining conflict-of-interest concerns. Reg BI will do so by requiring broker-dealers to "address conflicts of interest by establishing, maintaining, and enforcing policies and procedures reasonably designed to identify and fully and fairly disclose material facts about conflicts of interest, and in instances where [the SEC] ... determined that disclosure is insufficient to reasonably address the conflict, to mitigate or, in certain instances, eliminate the conflict." According to SEC officials, under Reg BI, which the SEC deliberately constructed to be a principles-based set of obligations rather than an expressly defined one, when retail investor clients receive and use a broker-dealer recommendation, the broker-dealer will be required to act in the retail customer's best interest without placing the broker-dealer's financial or other interests ahead of the retail customer's. The SEC interprets Regulation BI to apply to recommendations of (1) "any securities transaction" (purchase, sale, and exchange); and (2) any "investment strategy" involving securities (including account recommendations). In addition to investors receiving broker-dealer recommendations for non-retirement-based investment accounts, Reg BI also defines an applicable retail investor to include a "person receiving recommendations for his or her own retirement account, including but not limited to IRAs and individual accounts in workplace retirement plans, such as 401(k) plans and other tax-favored retirement plans." It also interprets applicable broker-dealer "account recommendations to include â¦ recommendations to roll over or transfer assets from one type of account to another (e.g., converting a workplace retirement plan account to an IRA)." Broker-dealers will have until June 30, 2020, to comply with Reg BI. Officials at FINRA have reportedly characterized Reg BI as "sort of federalizing [broker-dealer] sales practice issues." Noting that "most of the [broker-dealer] sales practice requirements historically have come from the FINRA rulebook," they indicated that FINRA will likely have to adjust its rules to align with Reg BI. The "Best Interest" Rule's Component Obligations Under Reg BI, the dictate that a broker-dealer cannot place its financial or other interests ahead of its retail customers' interests is known as the general obligation . To satisfy the general obligation, a broker-dealer must comply with three underlying component obligations: (1) a duty of disclosure; (2) a duty of compliance; and (3) a duty of customer care. These obligations are described below. In addition, a fourth component obligationâa duty to address certain conflicts of interestsâis one of two broad mandates under Reg BI. Given its significance, a separate section (see " The Conflict of Interest Obligation Under Reg BI ") then discusses that obligation. The Disclosure, Compliance, and Duty of Customer Care Obligations The disclosure obligation. Under this obligation, a broker must, prior to or at the time of the recommendation, provide to the retail customer, in writing, full and fair disclosure of all material facts related to the scope and terms of the relationship, including all material facts relating to conflicts of interest associated with the recommendation. The compliance obligation. Reg BI requires broker-dealers to establish written policies and procedures reasonably designed to achieve compliance with Reg BI as a whole. This requirement reflected the SEC's decision to adopt certain commenters' suggestions that the proposed requirement to develop policies and procedures align with the conflict-of-interest obligation described below. The compliance obligation provides flexibility to allow broker-dealers to establish compliance policies and procedures that accommodate a broad range of business models. It does not enumerate specific requirements that broker-dealers must include in their policies and procedures. Instead, each broker-dealer should consider the scope, size, and risks associated with the firm's operations and the types of business in which the firm engages when adopting its policies and procedures. According to the Reg BI release, a reasonably designed compliance program generally would also include controls, remediation of noncompliance, training, and periodic review and testing. The duty of care obligation . Under the duty of care obligation, a broker-dealer must exercise reasonable diligence, care, and skill when making a recommendation to a retail customer. As part of this, the broker-dealer must understand the potential risks, rewards, and costs associated with the recommendation. The broker-dealer must consider such factors in light of the retail customer's investment profile, while ensuring that an ensuing recommendation is in that customer's best interest. The Conflict of Interest Obligation Under Reg BI The broad conflict of interest mandate under Reg BI says that broker-dealers must "address conflicts of interest by establishing, maintaining, and enforcing policies and procedures reasonably designed to identify and fully and fairly disclose material facts about conflicts of interest, and in instances where [the SEC] ... determined that disclosure is insufficient to reasonably address the conflict ... mitigate or, in certain instances, eliminate the conflict." Conflicts of interest occur when the interests of an entity working on behalf of a customer and the interests of that customer are misaligned. This dynamic informs the relationship between broker-dealers and customers because of various factors that potentially encourage broker-dealers to boost their compensation or to benefit in other ways to the possible detriment of their customers, such as the transaction-based commission compensation model. Federal securities laws and FINRA's rules address broker-dealer conflicts through three distinct approaches: (1) the express prohibition of certain actions; (2) mitigation through the client suitability requirement when giving investment advice; and (3) the required disclosure of material conflicts of interest when making client recommendations. Expanding on these, the conflict of interest component obligation under Reg BI requires broker-dealers to have written policies and procedures reasonably designed to identify and, at a minimum, disclose or eliminate conflicts of interest, including the following: Mitigating conflicts that may encourage them to place their interests, or their firm's interests, ahead of the customer's. Mitigation alters a broker-dealer's policies and procedures to "reduce the incentive for the associated person to make a recommendation that places the associated person's or firm's interests ahead of the retail customer's interest." Examples include (1) avoiding broker-dealer compensation targets that disproportionately expand compensation via certain sale increases; and (2) establishing a differential compensation based on neutral factors to minimize broker-dealer employee compensation incentives that incentivize the promotion of certain types of investment accounts over others. (This is similar to a provision in the 2016 DOL fiduciary rules. ) Establishing, maintaining, and enforcing written policies and procedures designed to "identify and eliminate any sales contests, sales quotas, bonuses, and non-cash compensation that are based on the sales of specific securities or specific types of securities within a limited period of time." (This is similar to a provision in the earlier DOL fiduciary rule. ) Preventing customer offerings that have material limitations, including product menus that are very limited in scope or that solely offer proprietary products that can cause a broker-dealer to place his or her interests or the firm's interests ahead of the customer's. (This is said to be a broader and more rigorous requirement than current FINRA rules on noncash compensation. ) The States' Requirements and Reg BI Broker-dealers are subject to state securities laws, known as "Blue Sky Laws," state common laws, and judicial rulings from a state's highest court. As discussed earlier, reports indicate that the common law derived from judicial rulings in four statesâCalifornia, Missouri, South Dakota, and South Carolinaâimposes an "unambiguous fiduciary standard" for broker-dealers who do business in the states. State common laws, however, lack the authority of state regulations and statutes. Under state Blue Sky laws, it is generally unlawful for any person to transact business in a state as a broker-dealer or agent unless they are registered with the state's securities regulatory authority. During the past few years, several states have been attempting to impose either state statutory or regulatory requirements stipulating that state-registered broker-dealers have a fiduciary duty to their retail customers. And as of September 2019, New Jersey, Nevada, Massachusetts, and New York reportedly had ongoing initiatives that would impose fiduciary requirements on broker-dealers in various stages of development. Of these state initiatives, only Massachusetts' (proposed in June 2019) began after the Reg BI proposal and final rule. Explaining the rationale for the Massachusetts initiative, Secretary of the Commonwealth William Galvin blamed the inadequacies of Reg BI: "We are proposing this standard, because the SEC has failed to provide investors with the protections they need against conflicts of interest in the financial industry, with its recent 'Regulation Best Interest' rule." Barbara Roper, director of investor protection at the Consumer Federation of America, a consumer advocacy group, has raised concerns that the state-based fiduciary laws could create loopholes to the detriment of broker-dealer customers. She noted that the Nevada initiative would not recognize insurance agents as financial planners, excluding them from the fiduciary regulation, which she argued could significantly disadvantage consumers within the state. Meanwhile, the brokerage industry and its trade groups have reportedly been lobbying states, such as New Jersey, to halt state-based fiduciary actions. Their arguments are two-pronged: (1) states should reconsider their fiduciary efforts in light of Reg BI; and (2) if adopted, multiple state-based fiduciary broker-dealer standards will result in a messy patchwork of "laws that would be duplicative of, different than, and possibly in conflict with federal standards." Jay Clayton, the SEC chair, has raised related concerns; he identified "the potential patchwork of inconsistent state-level standards [as a development that he] and many others believe ... will increase costs, limit choice for retail investors and make oversight and enforcement more difficult." By contrast, SEC Commissioner Robert Jackson, who provided the sole dissenting vote on Reg BI, has characterized the state fiduciary effort as a potentially encouraging fix to the perceived inadequacies of Reg BI. The National Securities Markets Improvement Act (NSMIA; P.L. 104-290 ) is often cited as being in potential conflict with the state fiduciary proposals. Aimed at increasing financial services industry efficiency, the act expanded federal regulators' authority by taking some authority away from state securities regulators. Among other things, it also prohibited states from imposing additional or different books and records requirements on broker-dealers outside of federal requirements. The provision is often cited as a potential source for a legal challenge in the event that any of the state broker-dealer fiduciary regimes are adopted. Before the SEC's adoption of Reg BI, SIFMA, a critic of the state fiduciary proposals, asked the agency to consider inserting language into Reg BI noting that NSMIA provides for federal preemption of such actions. The final rule does not contain any such language, a position advocated by an association of state and provincial securities regulators, the North American Securities Administrators Association. Instead, the commentary accompanying the rule notes that "the preemptive effect of Regulation Best Interest on any state law governing the relationship between regulated entities and their customers would be determined in future judicial proceedings based on the specific language and effect of that state law." Action by Eight Attorneys General On September 9, 2019, Attorneys General (AGs) from California, Connecticut, Delaware, Maine, New Mexico, New York, Oregon, and the District of Columbia filed a suit in the United States District Court, Southern District of New York, asking the court to vacate Reg BI. In arguing that it should be vacated, the AGs alleged that the regulation injures retail investors in two significant ways: (1) it fails to restrict the provision of conflicted advice as directed by Section 913(g) of the Dodd-Frank Act, which permits the SEC to promulgate rules to provide for a uniform fiduciary standard; and (2) it increases the potential that retail investors will receive conflicted information because it compounds previously existing investor confusion with respect to the duties that broker-dealers owe such investors in the provision of investment advice. The AGs also argued that the standard of customer care provided by Reg BI fails to meaningfully go beyond FINRA's existing "suitability obligation." Congressional Concerns and Actions In September 2018, 35 House and Senate Democratic Membersâincluding House Committee on Financial Services then-ranking member Maxine Waters, who now chairs the committee, and Senate Committee on Banking, Housing, and Urban Affairs ranking member Sherrod Brownâsent a letter to SEC Chair Jay Clayton criticizing the then-proposed Reg BI. The letter stated the following: Regulation BI falls woefully shortâ¦ We urge the SEC to revise its proposal consistent with [the Dodd-Frank law] and require brokers to abide by the same high standard that currently applies to investment advisers so that their advice to retail investors is provided without regard to their financial and other interests. Regulation BI for brokers and the SEC's interpretation of the "fiduciary" obligation owed by investment advisers fail to clearly do this, enabling investors to 'consent' to harmful conduct in complex and legalistic disclosures that most will never read and would not understand if they did. In March 2019, in advance of the SEC's adoption of Reg BI, Chair Waters reportedly said the following: [W]e have to be concerned about best interests of our consumers and our seniors in particular. When you have investment advisors who are not acting in [consumer's] best interest, but are acting in their own best interest, it does not bode well for our senior investors in particular. So we are going to continue to pay attention to that. I don't know what the SEC has decided about what their role should be in this [fiduciary realm], but it's of interest to us. On June 26, 2019, the House passed H.R. 3351 , the Financial Services and General Government Appropriations Act for FY2020. The bill included an amendment sponsored by Chair Waters that would have forbidden the SEC from using any of its congressional spending authority "to implement, administer, enforce or publicize the final rules and interpretations" with respect to Reg BI. On December 20, 2019, President Trump signed H.R. 1865 , the Further Consolidated Appropriations Act, 2020, which became P.L. 116-94 and will fund the federal government through FY2020. It does not contain the aforementioned SEC restrictions contained in H.R. 3351 . Responses to the congressional action generally reflect where observers stand on the merits of Reg BI itself. Various Perspectives on Reg BI Like the wide-ranging comments that followed the release of the proposed Reg BI in 2018, the adoption of the final 2019 rule also elicited an expansive range of responses. This section first identifies the three broad reactions to the reform. It then provides quoted excerpts from various observers and stakeholders that either (1) provide support for or (2) are critical of several concerns regarding Reg BI, including its failure to provide for a broker-dealer fiduciary standard. The Division of Views on Reg BI The three broad divisions with respect to overall views on Reg BI are as follows: those who have given it qualified support, such as Rick Fleming, the SEC's investor advocate, who characterized it as "not as strong as it could be" but "a step in the right direction"; those who broadly support it, including the U.S. Chamber of Commerce, a major business trade group, and SIFMA; and those who are broadly critical, including the Consumer Federation of America and the Public Investors Arbitration Bar Association (PIABA, a bar association whose members represent investors in disputes with the securities industry). Significant Supportive and Critical Perspectives on Debated Assertions About Reg BI This section provides excerpts of quotes from various stakeholders and observers, which provide contrasting supportive and critical views on policy concerns integral to the debate surrounding Reg BI. Framed as debatable assertions, they are as follows: (1) Reg BI represents meaningful progress over the suitability requirement; (2) Reg BI's failure to define best interest is a problem; (3) the absence of a uniform fiduciary standard is not a problem; (4) the absence of a Reg BI fiduciary standard is not a problem; and (5) Reg BI meaningfully addresses outstanding conflict of interest issues. Reg BI Represents Meaningful Progress over the Suitability Requirement Supportive Comments In a letter to Members of the House, SIFMA said the following in support of Reg BI: Reg BI is the most comprehensive enhancement of the standard of conduct rules governing broker-dealers since the enactment of the Securities Exchange Act of 1934. The new SEC rules dramatically and undeniably exceed the previous suitability standard by requiring a duty of loyalty, meaning that a broker's recommendations must be in the customer's best interest and that the broker cannot place its own interests ahead of its customer. The regulations impose a duty of diligence, care and skill in making the recommendations, thereby holding the broker accountable for failures of knowledge or skill. SEC Chairman Jay Clayton said the following in a July 2019 speech: Regulation Best Interestâor "Reg. BI"âimposes a new standard of conduct specifically for broker-dealers that substantially enhances their obligations beyond the current "suitability" requirementsâ¦. Reg. BI is satisfied only if the broker-dealer complies with four specified component obligations: Disclosure, Care, Conflict of Interest, and Compliance. Each of these obligations includes a number of prescriptive requirements, all of which must be satisfied to comply with the rule. The U.S. Chamber of Commerce said the following in a press release supporting Reg BI: The new best interest standards create strong new protections for investors against bad actors, provide clearer information that will help Americans invest and save for their futures, allow investors to choose the right type of advice to fit their needs, and help small businesses provide retirement benefits for their employees. We hope that the Department of Labor moves forward on similar protections for ERISA plans that dovetail with the SEC's approach. Critical Comments SEC Commissioner Robert Jackson, who provided the sole dissenting vote on Reg BI, said the following in a statement after the rule's adoption: As to brokers, today's rule, like the proposal, fails to require that investor interests come first. Congress expressly authorized us to take that step in Dodd-Frankâauthority we should have used today. Instead, the core standard of conduct set forth in Regulation Best Interest remains far too ambiguous about a question on which there should be no confusion. As a result, conflicts will continue to taint the advice American investors receive from brokers. Micah Hauptman, financial services counsel at the Consumer Federation of America, reportedly said the following: [Reg BI is] a bait and switch on investors. The SEC claims to be imposing a new best interest standard on brokers, but it won't change any practices in the brokerage industry. Instead, Reg BI simply codifies the existin g standard under FINRA rules, just like the brokerage industry asked them to. [The investing public is] getting hoodwinked. Barbara Roper, director of investor protection for the Consumer Federation of America, reportedly said the following: [The SEC is saying] we'll let you have the conflict and then just mitigate it. Two different advisors both can call what they do financial planning or retirement planning, and one could have a duty to you for the whole relationship, but for the otherâa brokerâit's transaction by transaction. Reg BI's Failure to Define Best Interest is a Problem Supportive Comments Barbara Roper, of the Consumer Federation of America, said the following in testimony before the House Committee on Financial Services Committee, Subcommittee on Investor Protection, Entrepreneurship and Capital Markets: If the goal behind Reg BI truly is to enhance protections for investors, and not simply to preserve the status quo, the Commission must start by clarifying what it means by "best interest," and it must do so in a way that offers protections beyond those already afforded under FINRA rules.... The Commission must adopt a principles-based definition of best interest clarifying that a broker acts in a customer's best interest when she recommends, from among the reasonably available suitable options, those investments, investment strategies, services, or accounts that she reasonably believes are the best available match for that investor, taking into account both the investor's needs and the investments' material characteristics. While there will often not be a single "best" option, satisfying a best interest standard should require the broker to narrow down the acceptable options beyond the dozens or even hundreds of investments that would satisfy the existing suitability standard in a given situation." Massachusetts Secretary of the Commonwealth William Galvin reportedly said the following: Crucially, the term "best interest" is not defined in the rulemaking package. This ambiguity will lay the groundwork for the same debates and litigation that exist today under the "suitability" standard that applies to broker/dealers. Critical Comments SEC Chairman Jay Clayton said the following in a July 2019 speech: [Some commenters to the Reg BI proposal asked whether the SEC should] provide a detailed, specific, situation-by-situation definition of "best interest" in the rule text.... Our view was that the best approach would be to apply the specific component obligations of Reg. BI, including the "best interest" requirement in the Care Obligation, in a principles-based manner. Under Reg. BI, whether a broker-dealer has acted in the retail customer's best interest will turn on an objective assessment of the facts and circumstances of how the specific components of the rule are satisfied. This principles-based approach is a common and effective approach to addressing issues of duty under law, particularly where the facts and circumstances of individual relationships can vary widely and change over time, including as a result of innovation. [The] approach is â¦ similar to an investment adviser's fiduciary duty, which has worked well for advisers' retail clients and our markets. Indeed, there is no definition of "best interest" under the Advisers Act. Thomas Wade, director of financial services policy at the American Action Forum, said the following: [With respect to Reg BI's lack of a clear definition] the SEC provides for a spectrum of advisor-investor obligation, allowing investors to choose their desired level of protection based on their risk appetite and finances. The criticism of allowing this fluidityâthat investors may not understand the duty of care provided by their advisorâhas been mitigated by the SEC requirement that brokers at stand-alone broker-dealerships not be able to use the word "advisor" in their title. Financial news summary service FINSUM said the following regarding Reg BI's lack of a "best interest" definition: Having a highly defined rule leaves it more vulnerable to loopholes. With the current contextual structure, one has to worry whether their behavior could be considered "best interest" depending on an amorphous standard. It seems like a better way to keep bad actors in line. The Absence of a Uniform Fiduciary Standard in Reg BI is not a Problem Supportive Comments In the text of Reg BI, the SEC said the following regarding a uniform fiduciary standard: We have also declined to craft a new uniform standard that would apply equally and without differentiation to both broker-dealers and investment advisers. Adopting a "one size fits all" approach would risk reducing investor choice and access to existing products, services, service providers, and payment options, and would increase costs for firms and for retail investors in both broker-dealer and investment adviser relationships. In a July 2019 speech, SEC Chairman Jay Clayton said the following regarding the decision to not adopt a uniform fiduciary standard: A number of commenters expressly or impliedly advocated for regulation that would collapse the distinction, with a substantial majority of those commentators favoring the generally applicable investment adviser model where clients pay an asset-based fee or a flat fee for generally broad-based financial advice from a fiduciaryâ¦. [T]his is a good model, and for many investors, this type of investment adviser relationship may better match their needs than the typical broker-dealer relationship. However, for many other investors, the broker-dealer model, particularly after the implementation of Reg. BIâeither alone or in combination with an investment adviser relationshipâprovides the better match. For example, a retail customer that intends to buy and hold a long-term investment may find that paying a one-time commission to a broker-dealer is more cost effective than paying an ongoing advisory fee to an investment adviser to hold the same investment. That same investor might want to use a brokerage account to hold those long-term investments, and an advisory account for other investments. SIFMA described the following findings from a study in support of the idea that a uniform fiduciary standard could negatively impact customer choice: SIFMA has released a study conducted by Oliver Wyman for the Securities and Exchange Commission that examines the impact of unifying the fiduciary standard of care that retail investors receive from financial advisers and broker-dealers.... Oliver Wyman collected data from a broad selection of retail brokerage firms that serve 33% of households and represent 27% of all retail financial assets. The key insight from the survey is that broker-dealers play a critical role in the financial services industry that cannot be easily replicated with alternative services models. Therefore, if the proposed standardization is adopted, retail investors (particularly small investors) could see a negative impact on the choice of advisory model, product access, and affordability of advisory services. Critical Comments The Financial Planning Coalition, an industry group, said the following: Adoption of a uniform fiduciary standard of care will not affect the availability of investment advice or the range of products for moderate- or low-income consumers.... Research shows that the costs to broker-dealers to implement a fiduciary standard would be minimal. Duane Thompson, senior policy analyst at Fi360, reportedly said the following: Instead of having a uniform fiduciary standard for identical advisory services, there will continue to be two somewhat different market conduct standards to what can be identical advisory services. It's another tangible sign that the broker-dealer business model has changed dramatically in recent years, where advice is a dominant feature of what they provide. According to a media report, the AARP's Reg BI comment letter to the SEC said the following: [AARP is asking the SEC to] adopt a uniform fiduciary standard for financial professionals that applies to all types of retail accounts. There is no question that there is confusion among retail investors in the marketplace as a result of standards that are not uniform and do not address the perpetually evolving universe of investment products and industry practices. The Absence of a Reg BI Fiduciary Standard is not a Problem Supportive Comments In a 2015 speech, SEC Commissioner Daniel M. Gallagher said the following regarding the fiduciary duty: Much of the debate on these issues seems to assume that the "fiduciary duty" is some sort of talismanic protection that can overcome any competing regulatory concerns. All too often, this is the approach taken by those who simply do not know how the fiduciary duty works in practice. They do not understand or choose to ignore the limitations of the fiduciary duty. In a 2018 speech, SEC Commissioner Hester Peirce said the following: The word "fiduciary" hangs heavily over any discussion about standards for financial professionals. The word carries a lot of different meanings, and legal context mattersâ¦. Never mind that it took many pages of regulation and lots of interpretation to explain what "fiduciary" meant in the new DOL iteration. Never mind that even lawyers and financial professionals do not have a universal understanding of what the term means. The SEC addressed the fiduciary standard in the text of Reg BI as follows: We have declined to subject broker-dealers to a wholesale and complete application of the existing fiduciary standard under the Advisers Act because it is not appropriately tailored to the structure and characteristics of the broker-dealer business model (i.e., transaction-specific recommendations and compensation), and would not properly take into account, and build upon, existing obligations that apply to broker-dealers, including under FINRA rules. Moreover, we believe (and our experience indicates), that this approach would significantly reduce retail investor access to differing types of investment services and products, reduce retail investor choice in how to pay for those products and services, and increase costs for retail investors of obtaining investment recommendations. In a July 2019 speech, SEC Chairman Clayton said the following: Reg. BIâimposes a new standard of conduct specifically for broker-dealers that substantially enhances their obligations beyond the current "suitability" requirements.... [I]t establishes a general obligation that draws from key fiduciary principles, requiring broker-dealers to act in the best interest of their retail customers and not place their own interest ahead of the retail customer's interest. In the same speech, Chairman Clayton also said the following: This [principles-based] approach is similar to an investment adviser's fiduciary duty, which has worked well for advisers' retail clients and our markets.... [And the determination of whether a broker-dealer is acting in a retail customer's best interests, will be based on] an objective assessment of the facts and circumstances of how the specific components of Regulation Best Interest are satisfied at the time that the recommendation is made (and not in hindsight). In a June 2019 statement, SEC Commissioner Elad L. Roisman said the following: Regulation Best Interest also will impose heightened disclosure requirements about brokers, their investment offerings, and associated conflicts of interest in order to better inform retail customers about their service provider and investing options. Not even the so-called fiduciary standard under the Investment Advisers Act includes the obligation to eliminate or mitigate conflicts. In the same statement, Commissioner Roisman also said the following: In 2016, for example, the DOL acted unilaterally to adopt its so-called "Fiduciary Rule" that would have applied to providers of retirement investment accountsâa significant proportion of the registrants under the SEC's jurisdiction. DOL's rule quickly proved unworkable for many, if not all, providers of pay-as-you-go financial services, raising compliance costs, exposing firms to new litigation risks, and in some cases forcing them to choose whether to continue serving some of their smallest customers. According to some, the rule resulted in huge swaths of U.S. investors losing access to affordable financial advice and others paying much higher fees on their retirement accounts, without receiving any increases in service or other discernable benefits. I am glad that this rule is not in effect. Representative Trey Hollingsworth reportedly said the following: I am very upset that we continue to talk about polls that ask: Do you believe that this fiduciary rule is a good idea? People say yes. What's not disclosed in that is that you, lower and middle income America, won't get the benefit of that because you don't have an account size that's enough to ensure that those people will continue to give you advice. Critical Comments The Financial Planning Coalition said the following: Adoption of a fiduciary standard of care will not negatively affect the availability of investment advice or the range of products for moderate- and low-income consumers.... Research shows that the costs to broker-dealers to implement a fiduciary standard would be minimal, and that broker-dealers and investment advisers who provide financial services under a fiduciary standard experience stronger asset and revenue growth than those under a suitability standard. In comments to the SEC, the CFA Institute, an investment profession industry group, said the following: [B]rokers who are providing non-incidental advice must, by virtue of the Advisers Act, adhere to a fiduciary standard of care and therefore refrain from putting their own interests ahead of their clients' interests. Imposing a fiduciary standard on broker-dealer recommendations, therefore, would still be in keeping with these investor expectations. Representative Carolyn Maloney reportedly said the following during a House subcommittee hearing on Reg BI: [Under Reg BI] brokers have to act in the "best interest of customers," which sounds good, but the rule does not even define what this means. In fact, the rule allows brokers to continue to take their own financial interest into account when making client regulations. They can remain conflicted as long as they offer some basic amount of disclosure. This is dangerous for investors. An industry observer wrote the following regarding the absence of a fiduciary standard: [This rulemaking] presented a perfect opportunity to firm up what "best interest" means, but the SEC declined to do so. I have mixed feelings about this, because best interest can vary from client to client, and this allows flexibility when needed. However, the grey area has proven to be problematic, because, as you can imagine, it's hard to hold someone accountable to a flexible and unclear standard of care. John Britt, a retired SEC enforcement attorney, reportedly said the following: If a securities professional recommends that his client purchase a particular stock, he is giving investment advice. And if he's giving investment advice, he should have a fiduciary duty to his clientânothing less.... [This is] fake regulation. Reg BI Meaningfully Addresses Outstanding Broker-Dealer Conflict of Interest Issues Supportive Comments The SEC addressed conflicts of interest in the text of Reg BI as follows: The conflicts of interest associated with incentives at the associated person level and limitations on the securities or products that may be recommended to retail customers have raised particular concerns in the context of the broker-dealer, transaction-based relationship. Accordingly, the Commission believes specific disclosure and additional mitigation requirements are appropriate to address those conflicts. Sales contests, sales quotas, bonuses and non-cash compensation that are based on the sales of specific securities within a limited period of time create high-pressure situations for associated persons to increase the sales of specific securities or specific types of securities within a limited period of time and thus compromise the best interests of their retail customers. The Commission does not believe such conflicts of interest can be reasonably mitigated and, accordingly, they must be eliminated. In a written statement to Congress, former SEC Chairman Harvey L. Pitt said the following: [N]othing ... requires broker-dealers to recommend the least expensive or least remunerative securities or investment strategies, as long as the firm and its associated individuals comply with the disclosure, care and conflict of interest obligations that would be created by the Regulation. This is significant, because the mere fact that a brokerage firm, or an account executive, receive additional remuneration for pursuing certain strategies or securities does not, ipso facto, make the recommendation improper, unsuitable, or contrary to the best interests of the retail customer. In a July 2019 speech, SEC Chairman Jay Clayton said the following: Some critics have gone so far as to fault Reg. BI for failing to require elimination of all conflicts of interest. This criticism is misguidedâthere are conflicts of interest inherent in all principal-agent relationships, and the broker-customer relationship and the investment adviser-client relationship are no exception. Reg. BI recognizes that these conflicts exist, and requires that firms address those conflicts and provide recommendations that are in the best interest of their retail customers. Thomas Wade, of the American Action Forum, said the following: [It has been argued] that the best interest standard is a greater protection than fiduciary, as brokers must mitigate and eliminate conflicts of interests, where under the fiduciary duty all that was required was disclosure. Critical Comments The Consumer Federation of America said the following in a fact sheet criticizing Reg BI: The rule's conflict obligations don't prohibit firms from creating incentives that encourage and reward advice that is not in customers' best interests. Nor does the rule require firms to manage any conflicts to the benefit of the customer. For example, policies and procedures to "mitigate" financial conflicts don't have to be reasonably designed to prevent the broker from placing its interests ahead of the customer's interests. A media report detailed SEC Commissioner Jackson's criticism of Reg BI's approach to conflicts of interest as follows: The rule would be much improved with the addition of provisions that "limit or ban compensation practices that lead brokers to engage in conflicted activities," he says. "[Y]ou can expect people in the marketplace to do that which they're paid to do," he says. "If you pay them extra to put people in in-house products that are bad for the people, you can expect that there will be conflicts that will be difficult to mitigate, so I've urged for changes there as well." Commissioner Jackson also said the following in his statement on Reg BI: Troubling broker compensation practices that put investors at risk are addressed [in a very limited fashion] when they are "based on the sales of specific securities within a limited period of time," or "create high-pressure situations." These restrictions merely mimic those in longstanding FINRA proposals, and I cannot see why our rules should permit pay practices that create any pressure for brokers to harm investors." An industry observer wrote the following regarding Reg BI and conflicts of interest: The SEC fact sheet [as part of the press release accompanying Reg BI] ... did take positive steps from the proposed rule, but still left significant worries. For instance, sales competitions with award trips, bonuses and other rewards tend to prioritize growth over customer care (think Wells Fargo) were to some degree shot down in the rule, but not entirely. While specific product sales leading to bonuses appear to be shot down, an overall competition or bonus system for selling a suite of products is not clearly prohibited. This could really just cause companies to redo their bonus and competition models and allow them to continue. The Consumer Federation of America said the following in a press release: Even where conflicts would have to be "mitigated," the Commission doesn't make clear that mitigation has to be designed to support compliance with the best interest standard. An Analysis of Reg BI Reform In its 700-page Reg BI release, the SEC spoke of its inability to employ data-based research to gain insight into the reform's probable impact: Because the Commission does not have, has not received, and, in certain cases, does not believe it can reasonably obtain data that may inform on certain economic effects, the Commission is unable to quantify certain economic effects.... [E]ven in cases where it has some data or it has received some data regarding certain economic effects, the quantification of these effects is particularly challenging due to the number of assumptions that it would need to make to forecast how broker-dealers will respond to Regulation Best Interest, and how those responses will, in turn, affect the broader market for investment advice and the retail customers' participation in financial markets. The release, however, included a discussion of theoretical costs and benefits from an alternative to Reg BI that would have imposed fiduciary standards on broker-dealers akin to those that generally apply to investment advisers. The release asserted that a major theoretical benefit to such a uniform fiduciary standard would be reduced customer confusion surrounding what obligations both brokers and investment advisers have toward them. Moreover, the release argued that such a change could also reduce potential customer costs associated with choosing a financial professional who is not a good fit since both brokers and investment advisers would be subject to the same standard of customer care. The release noted, however, that a uniform fiduciary standard could result in a standard of care for brokers "that is not appropriately tailored to the structure and characteristics of the broker-dealer model (i.e., transaction specific recommendations and compensation)." Because of this possibility, it argued that the range of options in the financial advice market would shrink. It contended that at least in the short run, brokers would face greater compliance costs, possibly encouraging them to transition into offering advice in an investment adviser capacity and discouraging them from continuing to offer advice in a broker capacity. In turn, the release observed that brokers formally exiting their roles as broker-dealers could limit retail customers' access to particular securities or investment strategies as well as how they would pay for such advice. As a result, customers' costs for such advice could increase. The release then examined the potential fallout from a hypothetical scenario in which brokers operate under a new fiduciary standard but uniformly remain broker-dealers. According to the release, this could result in increased compliance costs for brokers that could be fully or partially passed on to their clients. That possibility, it argued, could lead to some customers problematically engaging less expensive investment advice providers outside of the regulated world of investment advisers and broker-dealers. Some data-based research has also examined the implications of a hypothetical final rulemaking that imposed a fiduciary standard on brokers. Several examples of this research are examined below, illustrating that research has resulted in disparate views on the nature of such impact. The Deloitte -SIFMA Study . In 2017, the business consultant Deloitte and SIFMA, the broker-dealer trade group, released the results of a collaborative survey conducted by Deloitte on SIFMA members. The study yielded results from the responses of 21 large national corporate SIFMA members on their reactions to the partially implemented DOL fiduciary rule, which the members had responded to by making plans to modify their retail customer-based services and products. Of the 21 respondents, 53% reported that they had either eliminated or limited access to brokerage advice services and 67% had migrated away from open choice to fee-based or limited brokerage services. The study also found that a "trend towards fee-based accounts was likely accelerated by the rule." It noted that "[t]ypically, fee-based accounts offer a higher level of service than brokerage accounts and often include automatic rebalancing of accounts, comprehensive annual reviews, enhanced reporting to account holders, and access to third party money managers. The fees are generally an 'all-in' asset-based fee that is generally higher than the fees paid in an advised brokerage account." Finke and Langdon . As indicated earlier, some states have common laws that impose a fiduciary standard of care on brokers, but many do not. By surveying broker-dealer registered representatives subject to differing state common law-based fiduciary requirements, Finke and Langdon, two academics, exploited those differences to ascertain whether a relatively stricter fiduciary standard of care affected brokers' willingness to provide advisory services to retail consumers. Among other things, the 2012 research found that the number of registered representatives conducting business within a state as a percentage of total households did not significantly change whether or not a state had a stricter fiduciary standard. It also found no significant differences among such financial professionals in states with a strict fiduciary standard compared with states that did not have a fiduciary standard with respect to (1) whether they were limited in their ability to recommend certain products or to serve clients with limited wealth; (2) the percentage of clients with lower incomes and higher levels of wealth; (3) their ability to provide a broad range of investment products including those that involve commission-based compensation; and (4) the ability to provide tailored customer advice. Bhattacharya , Padi , and Illanes . The researchers analyzed patterns of sales behavior for annuities issued by a large national financial company sold between 2013 and 2015 by broker-dealers based in adjacent counties separated by state lines. Released in 2019, the analysis hinged on the fact that some of the counties were in states with common law-based broker fiduciary standards, but adjacent counties were in states without such standards. Among other things, they found that subjecting brokers to a fiduciary duty shifted the suite of investment products that they sell to retail investors. Relative to counties without broker fiduciary obligations, brokers in counties with fiduciary standards saw increased costs of doing business, but the jurisdictions also witnessed direct improvements in the quality of the financial advice. Summary:	null	96	64,296	64,298	64,298	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Overview On June 5, 2019, the commissioners of the Securities and Exchange Commission (SEC) voted to adopt Regulation Best Interest (Reg BI). Reg BI is arguably the centerpiece and most controversial part of a set of regulatory reforms related to financial professionals adopted by the SEC on that day. A new rule under the Securities and Exchange Act of 1934 (P.L. 73-291), Reg BI changes broker-dealers' obligations in their relationships with retail customers. According to the SEC, the regulation is meant to "enhance the broker-dealer standard of conduct beyond existing ... obligations [by] requiring broker-dealers ... to: (1) act in the best interest of the retail customer at the time the recommendation is made, without placing the financial or other interest of the broker-dealer ahead of the interests of the retail customer; and (2) address [various broker-dealer] conflicts of interest [with those clients]." H.R. 3351 , the FY2020 Financial Services and General Government appropriations bill as passed by the House included an amendment sponsored by House Financial Services Committee Chair Maxine Waters that would have forbidden the SEC from using any of its congressional spending authority to implement, administer, enforce, or publicize the final rules and interpretations with respect to Reg BI. This language, however, was not included in H.R. 1865 / P.L. 116-94 , the Further Consolidated Appropriations Act, 2020, as enacted. This report examines Reg BI in that it (1) provides background on the roles and the regulation of two types of financial professionals, broker-dealers and investment advisers; (2) provides background on the Obama Administration Department of Labor's 2016 fiduciary rule for broker-dealers under the Employee Retirement Income Security Act of 1974 (ERISA, P.L. 93-406 ); (3) describes the component obligations required to fulfill Reg BI's best interest broker-dealer standard; (4) examines state-based broker-dealer fiduciary regulatory and statutory developments; (5) examines congressional concerns and actions regarding Reg BI; (6) presents some key supportive and critical perspectives on Reg BI; and (7) examines research with potential relevance to the debate over the potential costs and benefits of Reg BI. Background on Broker-Dealers and Investment Advisers Broker-dealer firms or their affiliated persons act as brokers when they execute securities trades for their clients and as dealers when they trade their own securities for their own benefit. They are often discussed as a joint entity because most broker-dealers must register with the SEC, and must generally be members of and comply with the rules and guidance of a self-regulatory organization (SRO), the Financial Industry Regulatory Authority (FINRA, an SEC-regulated nonprofit). In addition, broker-dealer sales personnel (called registered representatives) register with their state securities regulator. SEC-registered broker-dealers are largely regulated under the Securities Exchange Act of 1934 (P.L. 73-291) and comprise a small set of large and medium-sized broker-dealers and thousands of smaller broker-dealers who compete in small niche or regional markets. Broker-dealers, or simply brokers, have significant range in the kinds of services they provide and generally divide into two groups, full-service and discount brokerage firms. Broker-dealers typically provide discrete, transaction-specific investment recommendations and are compensated via the commissions they receive for each individual transaction. A broker-dealer's investment recommendations suite may include buying securities from or selling securities to retail customers on a principal basis or recommending the purchase of proprietary products. In their investment recommendations, they are generally subject to what is known as the suitability standard , which requires them to "reasonably believe that a client recommendation is suitable given the client's investor profile." Investment a dvisers are firms or persons who provide investment advice directly to their clients. Clients include individuals and institutional investors, such as mutual funds and hedge funds. Pursuant to the Investment Advisers Act of 1940 (IAA, which regulates key aspects of investment advisers; P.L. 76-768), advisers with more than $110 million in assets under management (AUM) must register with the SEC. States generally register and regulate investment adviser firms with between $25 million and $110 million in AUM. Investment advisers typically provide ongoing investment advice and services with respect to client portfolio management. Their compensation is generally determined by the client's account AUM size, a fixed fee, or other arrangements, such as a fee-based compensation model. Although not expressly written in the IAA, court rulings and decisions from SEC enforcement cases have helped establish the fiduciary standard , the prevailing standard of retail customer care for investment advisers. Under this standard, advisers are generally expected to serve the best interests of their clients and are required to subordinate their own interests to those of their clients. Ideally, advisers are also expected to either eliminate material conflicts of interest or be fully transparent to the client about the existence of such conflicts. By contrast, broker-dealers are generally subject to a less demanding standard of client care that is found in FINRA's Rule 2111, the suitability standard . Triggered when a broker-dealer makes an investment recommendation, the "standard requires that a firm or associated person have a reasonable basis to believe a recommended transaction or investment strategy involving a security or securities is suitable for the customer.... [It] is based on the information obtained through reasonable diligence of the firm or associated person to ascertain the customer's investment profile." Also, unlike investment advisers, brokers do not have an ongoing duty to monitor their clients' financial positions. Broker-dealers are, however, subject to a fiduciary standard (1) when they have control of a client's discretionary account (meaning that they have a client's authority to buy and sell securities on the client's behalf) generally, according to case law; or (2) in a few statesâCalifornia, Missouri, South Dakota, and South Carolinaâwhere state courts have reportedly "imposed an unambiguous fiduciary standard" on them. The overall number of SEC-registered broker-dealers fell from more than 6,000 in 2005 to fewer than 4,000 in 2018, in contrast to an increase of SEC-registered investment advisers from about 9,000 in 2005 to more than 13,000 in 2018. Blurred Lines Between Broker-Dealers and Investment Advisers, the Dodd-Frank Act, and a Uniform Fiduciary Standard During the late 1980s and early 1990s, the landscape for the delivery of investment advice began to shift as broker-dealers increasingly offered financial advisory services somewhat akin to investment advisers, including investment and retirement planning. The expansion was reportedly helped along by the brokers' reliance on the IAA's "solely incidental" exemption from compliance with the act, and the growth of dually registered firms (i.e., firms registered with FINRA and the SEC as both broker-dealers and investment advisers). Compounding the potential retail customer perplexity over who is an investment adviser and who is a broker-dealer is the existence of "dozens of titles [in the broker world], including generic titles, such as financial advisor and financial consultant, as well as advertisements that reportedly claim that 'we do it all.'" As a consequence of these developments, various surveys report that retail customers are often confused over the distinctions between broker-dealers and advisers and the unique set of customer obligations attached to each of them. This was encapsulated in an observation made in a Rand Corporation study: "[T]he industry is becoming increasingly complex, firms are becoming more heterogeneous and intertwined, and investors do not have a clear understanding of the different functions and fiduciary responsibilities of financial professionals." In 2009, the U.S. Department of the Treasury issued a white paper on potential financial reforms in the wake of the financial crisis, Financial Regulatory Reform â A New Foundation: Rebuilding Financial Supervision and Regulation . A section of the report observed that for many investors there was little if any difference in the way they perceived brokers and advisers. It then argued that "retail customers repose the same degree of trust in their brokers as they do in investment advisers, but the legal responsibilities of the intermediaries may not be the same." The white paper then recommended the enactment of new legislation "requiring that broker-dealers who provide investment advice about securities to investors have the same fiduciary obligations as registered investment advisers." On the heels of the Treasury report and driven in part by similar concerns regarding investor confusion over the roles of investment advisors and broker-dealers, Section 913 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act, P.L. 111-203 ) did a number of things in this area. Among them was granting the SEC authority to impose fiduciary rules on broker-dealers subject to certain conditions and requiring the SEC to study various aspects of financial professionals' standards of retail customer care. Among other questions, the study was asked to evaluate "whether there are legal or regulatory gaps, shortcomings, or overlaps in legal or regulatory standards in the protection of retail customers relating to the standards of care for providing personalized investment advice about securities to retail customers that should be addressed by rule or statute." Released in 2011, the staff study recommended that the SEC bolster investor protection and reduce investor confusion regarding the differences between brokers and investment advisers. The staff study then recommended "establishing a uniform fiduciary standard for investment advisers and broker-dealers when providing investment advice about securities to retail customers that is consistent with the standard that currently applies to investment advisers." After the study, then-SEC Chair Mary Schapiro noted that the SEC staff had been tasked with considering the various ramifications of the recommended rulemaking. No such rulemaking was proposed or adopted by the SEC under Chair Schapiro or her successor, Chair Mary Jo White, who in 2015 reportedly said that the agency should "implement a uniform fiduciary duty for broker-dealers and investment advisers where the standard is to act in the best interest of the investor." The 2016 DOL Fiduciary Rules In April 2016, the Obama Administration's Department of Labor (DOL) adopted new rules under the Employee Retirement Income Security Act of 1974 (ERISA; P.L. 93-406 ). Previously, under ERISA, securities brokers-dealers who provided services to retirement plans and who were not fiduciaries were generally subject to a suitability standard. The 2016 DOL rules represented a significant change from this. Under them, broker-dealers were generally deemed to be fiduciaries while providing recommendations to retirement plan participants. Major parts of the rules were not to be implemented until 2018. In making the case for the reform, the Obama Administration argued that the definition of investment advice needed to be revised given the changed nature of how Americans were readying themselves for retirement after ERISA's enactment in 1975. More specifically, the number of participants in traditional defined benefit (DB) plans had significantly declined, whereas the number of participants in defined contribution (DC) plans, such as 401(k) plans, had surged. The Administration argued that DC plan participants tend to confront more decision options, such as contribution amounts, investment allocations, rollovers, and withdrawals, than do DB plan participants. As such, it was argued that those in DB plans may have greater need for investment assistance and advice subject to the more strenuous fiduciary standard. Supporters of DOL's fiduciary rules, including investor advocates, argued that financial advisers (including broker-dealers) would no longer be able to direct clients to products that awarded them larger commissions at the client's expense. Detractors, including broker-dealers, financial planners, and various Members of Congress, stressed that the rules would increase the cost of retirement accounts and would curtail various investors' access to investment advice. In February 2017, President Trump released a presidential memorandum ordering the Labor Department to reexamine the rule. Later, between April and November 2017, DOL ordered a series of delays for key parts of the rule that stretched until July 2019. On March 15, 2018, the Fifth Circuit Court of Appeals vacated the DOL rules. It ruled that DOL had exceeded its statutory authority under ERISA in writing the rules. The decision formally halted implementation of the rules. The adjudication was the result of a lawsuit brought by various business groups, including the U.S. Chamber of Commerce (a major business trade group), the Financial Services Roundtable (a group that represents the nation's largest firms in banking, insurance, and investment services), and the Securities Industry and Financial Markets Association (SIFMA, a major trade group for broker-dealers, investment banks and asset managers). The Trump Administration's DOL has not challenged the Fifth Circuit's decision. However, in fall 2018, DOL officially announced that it was "considering regulatory options in light of the Fifth Circuit opinion" and projected a September 2019 date for the potential new final rules. In June 2019, various DOL officials, including then-DOL Secretary Alexander Acosta, reportedly said that the agency "was working with the SEC to promulgate new rules." The same month, Jeanne Klinefelter Wilson, deputy assistant secretary of the Employee Benefits Security Administration, the DOL unit that oversees ERISA, observed that although DOL and the SEC operate under different regulations, "the goal is to proceed under a raw common framework and propose Department of Labor rules [that] track as closely as possible with [the] SEC's best-interest regulations." In July 2019, President Trump nominated Eugene Scalia to succeed Alexander Acosta as Secretary of Labor. Scalia was later confirmed for that post by the Senate on September 26, 2019. While a partner with the law firm Gibson, Dunn, & Crutcher, Scalia presented oral arguments on behalf of the plaintiffs in the aforementioned case in which the court vacated DOL's fiduciary rule. Scalia has reportedly described the rule as "an immensely controversial and burdensome rule that really pushed the envelope of the agency's regulatory authority." The possibility has been raised that Secretary Scalia may have to recuse himself from involvement in the development of a fiduciary rule because of government ethics rules that guard against conflicts of interest by prohibiting officials from participating in issues they were involved with in the private sector. The Reg BI Final Rule On June 5, 2019, the SEC commissioners separately approved parts of a package of final rules related to the duty of care financial professionals owe to retail investors. The package contained Reg BI; the Form Customer Relationship Summary, a short-form disclosure that would identify key distinctions in the types of services offered by broker-dealers and investment advisers to their clients; applicable legal standards, and potential conflicts of interest; a clarification of the fiduciary duty owed by investment advisers to their clients under the Investment Advisers Act; and an interpretation of the "solely incidental" broker-dealer exclusion under the IAA aimed at clarifying when a broker-dealer's exercise of investment advisory activities redefines it as an investment adviser according to the IAA. As observed earlier, in addition to its stated goal of requiring a broker-dealer to act in the best interest of a retail customer making recommendations, Reg BI also seeks to address some remaining conflict-of-interest concerns. Reg BI will do so by requiring broker-dealers to "address conflicts of interest by establishing, maintaining, and enforcing policies and procedures reasonably designed to identify and fully and fairly disclose material facts about conflicts of interest, and in instances where [the SEC] ... determined that disclosure is insufficient to reasonably address the conflict, to mitigate or, in certain instances, eliminate the conflict." According to SEC officials, under Reg BI, which the SEC deliberately constructed to be a principles-based set of obligations rather than an expressly defined one, when retail investor clients receive and use a broker-dealer recommendation, the broker-dealer will be required to act in the retail customer's best interest without placing the broker-dealer's financial or other interests ahead of the retail customer's. The SEC interprets Regulation BI to apply to recommendations of (1) "any securities transaction" (purchase, sale, and exchange); and (2) any "investment strategy" involving securities (including account recommendations). In addition to investors receiving broker-dealer recommendations for non-retirement-based investment accounts, Reg BI also defines an applicable retail investor to include a "person receiving recommendations for his or her own retirement account, including but not limited to IRAs and individual accounts in workplace retirement plans, such as 401(k) plans and other tax-favored retirement plans." It also interprets applicable broker-dealer "account recommendations to include â¦ recommendations to roll over or transfer assets from one type of account to another (e.g., converting a workplace retirement plan account to an IRA)." Broker-dealers will have until June 30, 2020, to comply with Reg BI. Officials at FINRA have reportedly characterized Reg BI as "sort of federalizing [broker-dealer] sales practice issues." Noting that "most of the [broker-dealer] sales practice requirements historically have come from the FINRA rulebook," they indicated that FINRA will likely have to adjust its rules to align with Reg BI. The "Best Interest" Rule's Component Obligations Under Reg BI, the dictate that a broker-dealer cannot place its financial or other interests ahead of its retail customers' interests is known as the general obligation . To satisfy the general obligation, a broker-dealer must comply with three underlying component obligations: (1) a duty of disclosure; (2) a duty of compliance; and (3) a duty of customer care. These obligations are described below. In addition, a fourth component obligationâa duty to address certain conflicts of interestsâis one of two broad mandates under Reg BI. Given its significance, a separate section (see " The Conflict of Interest Obligation Under Reg BI ") then discusses that obligation. The Disclosure, Compliance, and Duty of Customer Care Obligations The disclosure obligation. Under this obligation, a broker must, prior to or at the time of the recommendation, provide to the retail customer, in writing, full and fair disclosure of all material facts related to the scope and terms of the relationship, including all material facts relating to conflicts of interest associated with the recommendation. The compliance obligation. Reg BI requires broker-dealers to establish written policies and procedures reasonably designed to achieve compliance with Reg BI as a whole. This requirement reflected the SEC's decision to adopt certain commenters' suggestions that the proposed requirement to develop policies and procedures align with the conflict-of-interest obligation described below. The compliance obligation provides flexibility to allow broker-dealers to establish compliance policies and procedures that accommodate a broad range of business models. It does not enumerate specific requirements that broker-dealers must include in their policies and procedures. Instead, each broker-dealer should consider the scope, size, and risks associated with the firm's operations and the types of business in which the firm engages when adopting its policies and procedures. According to the Reg BI release, a reasonably designed compliance program generally would also include controls, remediation of noncompliance, training, and periodic review and testing. The duty of care obligation . Under the duty of care obligation, a broker-dealer must exercise reasonable diligence, care, and skill when making a recommendation to a retail customer. As part of this, the broker-dealer must understand the potential risks, rewards, and costs associated with the recommendation. The broker-dealer must consider such factors in light of the retail customer's investment profile, while ensuring that an ensuing recommendation is in that customer's best interest. The Conflict of Interest Obligation Under Reg BI The broad conflict of interest mandate under Reg BI says that broker-dealers must "address conflicts of interest by establishing, maintaining, and enforcing policies and procedures reasonably designed to identify and fully and fairly disclose material facts about conflicts of interest, and in instances where [the SEC] ... determined that disclosure is insufficient to reasonably address the conflict ... mitigate or, in certain instances, eliminate the conflict." Conflicts of interest occur when the interests of an entity working on behalf of a customer and the interests of that customer are misaligned. This dynamic informs the relationship between broker-dealers and customers because of various factors that potentially encourage broker-dealers to boost their compensation or to benefit in other ways to the possible detriment of their customers, such as the transaction-based commission compensation model. Federal securities laws and FINRA's rules address broker-dealer conflicts through three distinct approaches: (1) the express prohibition of certain actions; (2) mitigation through the client suitability requirement when giving investment advice; and (3) the required disclosure of material conflicts of interest when making client recommendations. Expanding on these, the conflict of interest component obligation under Reg BI requires broker-dealers to have written policies and procedures reasonably designed to identify and, at a minimum, disclose or eliminate conflicts of interest, including the following: Mitigating conflicts that may encourage them to place their interests, or their firm's interests, ahead of the customer's. Mitigation alters a broker-dealer's policies and procedures to "reduce the incentive for the associated person to make a recommendation that places the associated person's or firm's interests ahead of the retail customer's interest." Examples include (1) avoiding broker-dealer compensation targets that disproportionately expand compensation via certain sale increases; and (2) establishing a differential compensation based on neutral factors to minimize broker-dealer employee compensation incentives that incentivize the promotion of certain types of investment accounts over others. (This is similar to a provision in the 2016 DOL fiduciary rules. ) Establishing, maintaining, and enforcing written policies and procedures designed to "identify and eliminate any sales contests, sales quotas, bonuses, and non-cash compensation that are based on the sales of specific securities or specific types of securities within a limited period of time." (This is similar to a provision in the earlier DOL fiduciary rule. ) Preventing customer offerings that have material limitations, including product menus that are very limited in scope or that solely offer proprietary products that can cause a broker-dealer to place his or her interests or the firm's interests ahead of the customer's. (This is said to be a broader and more rigorous requirement than current FINRA rules on noncash compensation. ) The States' Requirements and Reg BI Broker-dealers are subject to state securities laws, known as "Blue Sky Laws," state common laws, and judicial rulings from a state's highest court. As discussed earlier, reports indicate that the common law derived from judicial rulings in four statesâCalifornia, Missouri, South Dakota, and South Carolinaâimposes an "unambiguous fiduciary standard" for broker-dealers who do business in the states. State common laws, however, lack the authority of state regulations and statutes. Under state Blue Sky laws, it is generally unlawful for any person to transact business in a state as a broker-dealer or agent unless they are registered with the state's securities regulatory authority. During the past few years, several states have been attempting to impose either state statutory or regulatory requirements stipulating that state-registered broker-dealers have a fiduciary duty to their retail customers. And as of September 2019, New Jersey, Nevada, Massachusetts, and New York reportedly had ongoing initiatives that would impose fiduciary requirements on broker-dealers in various stages of development. Of these state initiatives, only Massachusetts' (proposed in June 2019) began after the Reg BI proposal and final rule. Explaining the rationale for the Massachusetts initiative, Secretary of the Commonwealth William Galvin blamed the inadequacies of Reg BI: "We are proposing this standard, because the SEC has failed to provide investors with the protections they need against conflicts of interest in the financial industry, with its recent 'Regulation Best Interest' rule." Barbara Roper, director of investor protection at the Consumer Federation of America, a consumer advocacy group, has raised concerns that the state-based fiduciary laws could create loopholes to the detriment of broker-dealer customers. She noted that the Nevada initiative would not recognize insurance agents as financial planners, excluding them from the fiduciary regulation, which she argued could significantly disadvantage consumers within the state. Meanwhile, the brokerage industry and its trade groups have reportedly been lobbying states, such as New Jersey, to halt state-based fiduciary actions. Their arguments are two-pronged: (1) states should reconsider their fiduciary efforts in light of Reg BI; and (2) if adopted, multiple state-based fiduciary broker-dealer standards will result in a messy patchwork of "laws that would be duplicative of, different than, and possibly in conflict with federal standards." Jay Clayton, the SEC chair, has raised related concerns; he identified "the potential patchwork of inconsistent state-level standards [as a development that he] and many others believe ... will increase costs, limit choice for retail investors and make oversight and enforcement more difficult." By contrast, SEC Commissioner Robert Jackson, who provided the sole dissenting vote on Reg BI, has characterized the state fiduciary effort as a potentially encouraging fix to the perceived inadequacies of Reg BI. The National Securities Markets Improvement Act (NSMIA; P.L. 104-290 ) is often cited as being in potential conflict with the state fiduciary proposals. Aimed at increasing financial services industry efficiency, the act expanded federal regulators' authority by taking some authority away from state securities regulators. Among other things, it also prohibited states from imposing additional or different books and records requirements on broker-dealers outside of federal requirements. The provision is often cited as a potential source for a legal challenge in the event that any of the state broker-dealer fiduciary regimes are adopted. Before the SEC's adoption of Reg BI, SIFMA, a critic of the state fiduciary proposals, asked the agency to consider inserting language into Reg BI noting that NSMIA provides for federal preemption of such actions. The final rule does not contain any such language, a position advocated by an association of state and provincial securities regulators, the North American Securities Administrators Association. Instead, the commentary accompanying the rule notes that "the preemptive effect of Regulation Best Interest on any state law governing the relationship between regulated entities and their customers would be determined in future judicial proceedings based on the specific language and effect of that state law." Action by Eight Attorneys General On September 9, 2019, Attorneys General (AGs) from California, Connecticut, Delaware, Maine, New Mexico, New York, Oregon, and the District of Columbia filed a suit in the United States District Court, Southern District of New York, asking the court to vacate Reg BI. In arguing that it should be vacated, the AGs alleged that the regulation injures retail investors in two significant ways: (1) it fails to restrict the provision of conflicted advice as directed by Section 913(g) of the Dodd-Frank Act, which permits the SEC to promulgate rules to provide for a uniform fiduciary standard; and (2) it increases the potential that retail investors will receive conflicted information because it compounds previously existing investor confusion with respect to the duties that broker-dealers owe such investors in the provision of investment advice. The AGs also argued that the standard of customer care provided by Reg BI fails to meaningfully go beyond FINRA's existing "suitability obligation." Congressional Concerns and Actions In September 2018, 35 House and Senate Democratic Membersâincluding House Committee on Financial Services then-ranking member Maxine Waters, who now chairs the committee, and Senate Committee on Banking, Housing, and Urban Affairs ranking member Sherrod Brownâsent a letter to SEC Chair Jay Clayton criticizing the then-proposed Reg BI. The letter stated the following: Regulation BI falls woefully shortâ¦ We urge the SEC to revise its proposal consistent with [the Dodd-Frank law] and require brokers to abide by the same high standard that currently applies to investment advisers so that their advice to retail investors is provided without regard to their financial and other interests. Regulation BI for brokers and the SEC's interpretation of the "fiduciary" obligation owed by investment advisers fail to clearly do this, enabling investors to 'consent' to harmful conduct in complex and legalistic disclosures that most will never read and would not understand if they did. In March 2019, in advance of the SEC's adoption of Reg BI, Chair Waters reportedly said the following: [W]e have to be concerned about best interests of our consumers and our seniors in particular. When you have investment advisors who are not acting in [consumer's] best interest, but are acting in their own best interest, it does not bode well for our senior investors in particular. So we are going to continue to pay attention to that. I don't know what the SEC has decided about what their role should be in this [fiduciary realm], but it's of interest to us. On June 26, 2019, the House passed H.R. 3351 , the Financial Services and General Government Appropriations Act for FY2020. The bill included an amendment sponsored by Chair Waters that would have forbidden the SEC from using any of its congressional spending authority "to implement, administer, enforce or publicize the final rules and interpretations" with respect to Reg BI. On December 20, 2019, President Trump signed H.R. 1865 , the Further Consolidated Appropriations Act, 2020, which became P.L. 116-94 and will fund the federal government through FY2020. It does not contain the aforementioned SEC restrictions contained in H.R. 3351 . Responses to the congressional action generally reflect where observers stand on the merits of Reg BI itself. Various Perspectives on Reg BI Like the wide-ranging comments that followed the release of the proposed Reg BI in 2018, the adoption of the final 2019 rule also elicited an expansive range of responses. This section first identifies the three broad reactions to the reform. It then provides quoted excerpts from various observers and stakeholders that either (1) provide support for or (2) are critical of several concerns regarding Reg BI, including its failure to provide for a broker-dealer fiduciary standard. The Division of Views on Reg BI The three broad divisions with respect to overall views on Reg BI are as follows: those who have given it qualified support, such as Rick Fleming, the SEC's investor advocate, who characterized it as "not as strong as it could be" but "a step in the right direction"; those who broadly support it, including the U.S. Chamber of Commerce, a major business trade group, and SIFMA; and those who are broadly critical, including the Consumer Federation of America and the Public Investors Arbitration Bar Association (PIABA, a bar association whose members represent investors in disputes with the securities industry). Significant Supportive and Critical Perspectives on Debated Assertions About Reg BI This section provides excerpts of quotes from various stakeholders and observers, which provide contrasting supportive and critical views on policy concerns integral to the debate surrounding Reg BI. Framed as debatable assertions, they are as follows: (1) Reg BI represents meaningful progress over the suitability requirement; (2) Reg BI's failure to define best interest is a problem; (3) the absence of a uniform fiduciary standard is not a problem; (4) the absence of a Reg BI fiduciary standard is not a problem; and (5) Reg BI meaningfully addresses outstanding conflict of interest issues. Reg BI Represents Meaningful Progress over the Suitability Requirement Supportive Comments In a letter to Members of the House, SIFMA said the following in support of Reg BI: Reg BI is the most comprehensive enhancement of the standard of conduct rules governing broker-dealers since the enactment of the Securities Exchange Act of 1934. The new SEC rules dramatically and undeniably exceed the previous suitability standard by requiring a duty of loyalty, meaning that a broker's recommendations must be in the customer's best interest and that the broker cannot place its own interests ahead of its customer. The regulations impose a duty of diligence, care and skill in making the recommendations, thereby holding the broker accountable for failures of knowledge or skill. SEC Chairman Jay Clayton said the following in a July 2019 speech: Regulation Best Interestâor "Reg. BI"âimposes a new standard of conduct specifically for broker-dealers that substantially enhances their obligations beyond the current "suitability" requirementsâ¦. Reg. BI is satisfied only if the broker-dealer complies with four specified component obligations: Disclosure, Care, Conflict of Interest, and Compliance. Each of these obligations includes a number of prescriptive requirements, all of which must be satisfied to comply with the rule. The U.S. Chamber of Commerce said the following in a press release supporting Reg BI: The new best interest standards create strong new protections for investors against bad actors, provide clearer information that will help Americans invest and save for their futures, allow investors to choose the right type of advice to fit their needs, and help small businesses provide retirement benefits for their employees. We hope that the Department of Labor moves forward on similar protections for ERISA plans that dovetail with the SEC's approach. Critical Comments SEC Commissioner Robert Jackson, who provided the sole dissenting vote on Reg BI, said the following in a statement after the rule's adoption: As to brokers, today's rule, like the proposal, fails to require that investor interests come first. Congress expressly authorized us to take that step in Dodd-Frankâauthority we should have used today. Instead, the core standard of conduct set forth in Regulation Best Interest remains far too ambiguous about a question on which there should be no confusion. As a result, conflicts will continue to taint the advice American investors receive from brokers. Micah Hauptman, financial services counsel at the Consumer Federation of America, reportedly said the following: [Reg BI is] a bait and switch on investors. The SEC claims to be imposing a new best interest standard on brokers, but it won't change any practices in the brokerage industry. Instead, Reg BI simply codifies the existin g standard under FINRA rules, just like the brokerage industry asked them to. [The investing public is] getting hoodwinked. Barbara Roper, director of investor protection for the Consumer Federation of America, reportedly said the following: [The SEC is saying] we'll let you have the conflict and then just mitigate it. Two different advisors both can call what they do financial planning or retirement planning, and one could have a duty to you for the whole relationship, but for the otherâa brokerâit's transaction by transaction. Reg BI's Failure to Define Best Interest is a Problem Supportive Comments Barbara Roper, of the Consumer Federation of America, said the following in testimony before the House Committee on Financial Services Committee, Subcommittee on Investor Protection, Entrepreneurship and Capital Markets: If the goal behind Reg BI truly is to enhance protections for investors, and not simply to preserve the status quo, the Commission must start by clarifying what it means by "best interest," and it must do so in a way that offers protections beyond those already afforded under FINRA rules.... The Commission must adopt a principles-based definition of best interest clarifying that a broker acts in a customer's best interest when she recommends, from among the reasonably available suitable options, those investments, investment strategies, services, or accounts that she reasonably believes are the best available match for that investor, taking into account both the investor's needs and the investments' material characteristics. While there will often not be a single "best" option, satisfying a best interest standard should require the broker to narrow down the acceptable options beyond the dozens or even hundreds of investments that would satisfy the existing suitability standard in a given situation." Massachusetts Secretary of the Commonwealth William Galvin reportedly said the following: Crucially, the term "best interest" is not defined in the rulemaking package. This ambiguity will lay the groundwork for the same debates and litigation that exist today under the "suitability" standard that applies to broker/dealers. Critical Comments SEC Chairman Jay Clayton said the following in a July 2019 speech: [Some commenters to the Reg BI proposal asked whether the SEC should] provide a detailed, specific, situation-by-situation definition of "best interest" in the rule text.... Our view was that the best approach would be to apply the specific component obligations of Reg. BI, including the "best interest" requirement in the Care Obligation, in a principles-based manner. Under Reg. BI, whether a broker-dealer has acted in the retail customer's best interest will turn on an objective assessment of the facts and circumstances of how the specific components of the rule are satisfied. This principles-based approach is a common and effective approach to addressing issues of duty under law, particularly where the facts and circumstances of individual relationships can vary widely and change over time, including as a result of innovation. [The] approach is â¦ similar to an investment adviser's fiduciary duty, which has worked well for advisers' retail clients and our markets. Indeed, there is no definition of "best interest" under the Advisers Act. Thomas Wade, director of financial services policy at the American Action Forum, said the following: [With respect to Reg BI's lack of a clear definition] the SEC provides for a spectrum of advisor-investor obligation, allowing investors to choose their desired level of protection based on their risk appetite and finances. The criticism of allowing this fluidityâthat investors may not understand the duty of care provided by their advisorâhas been mitigated by the SEC requirement that brokers at stand-alone broker-dealerships not be able to use the word "advisor" in their title. Financial news summary service FINSUM said the following regarding Reg BI's lack of a "best interest" definition: Having a highly defined rule leaves it more vulnerable to loopholes. With the current contextual structure, one has to worry whether their behavior could be considered "best interest" depending on an amorphous standard. It seems like a better way to keep bad actors in line. The Absence of a Uniform Fiduciary Standard in Reg BI is not a Problem Supportive Comments In the text of Reg BI, the SEC said the following regarding a uniform fiduciary standard: We have also declined to craft a new uniform standard that would apply equally and without differentiation to both broker-dealers and investment advisers. Adopting a "one size fits all" approach would risk reducing investor choice and access to existing products, services, service providers, and payment options, and would increase costs for firms and for retail investors in both broker-dealer and investment adviser relationships. In a July 2019 speech, SEC Chairman Jay Clayton said the following regarding the decision to not adopt a uniform fiduciary standard: A number of commenters expressly or impliedly advocated for regulation that would collapse the distinction, with a substantial majority of those commentators favoring the generally applicable investment adviser model where clients pay an asset-based fee or a flat fee for generally broad-based financial advice from a fiduciaryâ¦. [T]his is a good model, and for many investors, this type of investment adviser relationship may better match their needs than the typical broker-dealer relationship. However, for many other investors, the broker-dealer model, particularly after the implementation of Reg. BIâeither alone or in combination with an investment adviser relationshipâprovides the better match. For example, a retail customer that intends to buy and hold a long-term investment may find that paying a one-time commission to a broker-dealer is more cost effective than paying an ongoing advisory fee to an investment adviser to hold the same investment. That same investor might want to use a brokerage account to hold those long-term investments, and an advisory account for other investments. SIFMA described the following findings from a study in support of the idea that a uniform fiduciary standard could negatively impact customer choice: SIFMA has released a study conducted by Oliver Wyman for the Securities and Exchange Commission that examines the impact of unifying the fiduciary standard of care that retail investors receive from financial advisers and broker-dealers.... Oliver Wyman collected data from a broad selection of retail brokerage firms that serve 33% of households and represent 27% of all retail financial assets. The key insight from the survey is that broker-dealers play a critical role in the financial services industry that cannot be easily replicated with alternative services models. Therefore, if the proposed standardization is adopted, retail investors (particularly small investors) could see a negative impact on the choice of advisory model, product access, and affordability of advisory services. Critical Comments The Financial Planning Coalition, an industry group, said the following: Adoption of a uniform fiduciary standard of care will not affect the availability of investment advice or the range of products for moderate- or low-income consumers.... Research shows that the costs to broker-dealers to implement a fiduciary standard would be minimal. Duane Thompson, senior policy analyst at Fi360, reportedly said the following: Instead of having a uniform fiduciary standard for identical advisory services, there will continue to be two somewhat different market conduct standards to what can be identical advisory services. It's another tangible sign that the broker-dealer business model has changed dramatically in recent years, where advice is a dominant feature of what they provide. According to a media report, the AARP's Reg BI comment letter to the SEC said the following: [AARP is asking the SEC to] adopt a uniform fiduciary standard for financial professionals that applies to all types of retail accounts. There is no question that there is confusion among retail investors in the marketplace as a result of standards that are not uniform and do not address the perpetually evolving universe of investment products and industry practices. The Absence of a Reg BI Fiduciary Standard is not a Problem Supportive Comments In a 2015 speech, SEC Commissioner Daniel M. Gallagher said the following regarding the fiduciary duty: Much of the debate on these issues seems to assume that the "fiduciary duty" is some sort of talismanic protection that can overcome any competing regulatory concerns. All too often, this is the approach taken by those who simply do not know how the fiduciary duty works in practice. They do not understand or choose to ignore the limitations of the fiduciary duty. In a 2018 speech, SEC Commissioner Hester Peirce said the following: The word "fiduciary" hangs heavily over any discussion about standards for financial professionals. The word carries a lot of different meanings, and legal context mattersâ¦. Never mind that it took many pages of regulation and lots of interpretation to explain what "fiduciary" meant in the new DOL iteration. Never mind that even lawyers and financial professionals do not have a universal understanding of what the term means. The SEC addressed the fiduciary standard in the text of Reg BI as follows: We have declined to subject broker-dealers to a wholesale and complete application of the existing fiduciary standard under the Advisers Act because it is not appropriately tailored to the structure and characteristics of the broker-dealer business model (i.e., transaction-specific recommendations and compensation), and would not properly take into account, and build upon, existing obligations that apply to broker-dealers, including under FINRA rules. Moreover, we believe (and our experience indicates), that this approach would significantly reduce retail investor access to differing types of investment services and products, reduce retail investor choice in how to pay for those products and services, and increase costs for retail investors of obtaining investment recommendations. In a July 2019 speech, SEC Chairman Clayton said the following: Reg. BIâimposes a new standard of conduct specifically for broker-dealers that substantially enhances their obligations beyond the current "suitability" requirements.... [I]t establishes a general obligation that draws from key fiduciary principles, requiring broker-dealers to act in the best interest of their retail customers and not place their own interest ahead of the retail customer's interest. In the same speech, Chairman Clayton also said the following: This [principles-based] approach is similar to an investment adviser's fiduciary duty, which has worked well for advisers' retail clients and our markets.... [And the determination of whether a broker-dealer is acting in a retail customer's best interests, will be based on] an objective assessment of the facts and circumstances of how the specific components of Regulation Best Interest are satisfied at the time that the recommendation is made (and not in hindsight). In a June 2019 statement, SEC Commissioner Elad L. Roisman said the following: Regulation Best Interest also will impose heightened disclosure requirements about brokers, their investment offerings, and associated conflicts of interest in order to better inform retail customers about their service provider and investing options. Not even the so-called fiduciary standard under the Investment Advisers Act includes the obligation to eliminate or mitigate conflicts. In the same statement, Commissioner Roisman also said the following: In 2016, for example, the DOL acted unilaterally to adopt its so-called "Fiduciary Rule" that would have applied to providers of retirement investment accountsâa significant proportion of the registrants under the SEC's jurisdiction. DOL's rule quickly proved unworkable for many, if not all, providers of pay-as-you-go financial services, raising compliance costs, exposing firms to new litigation risks, and in some cases forcing them to choose whether to continue serving some of their smallest customers. According to some, the rule resulted in huge swaths of U.S. investors losing access to affordable financial advice and others paying much higher fees on their retirement accounts, without receiving any increases in service or other discernable benefits. I am glad that this rule is not in effect. Representative Trey Hollingsworth reportedly said the following: I am very upset that we continue to talk about polls that ask: Do you believe that this fiduciary rule is a good idea? People say yes. What's not disclosed in that is that you, lower and middle income America, won't get the benefit of that because you don't have an account size that's enough to ensure that those people will continue to give you advice. Critical Comments The Financial Planning Coalition said the following: Adoption of a fiduciary standard of care will not negatively affect the availability of investment advice or the range of products for moderate- and low-income consumers.... Research shows that the costs to broker-dealers to implement a fiduciary standard would be minimal, and that broker-dealers and investment advisers who provide financial services under a fiduciary standard experience stronger asset and revenue growth than those under a suitability standard. In comments to the SEC, the CFA Institute, an investment profession industry group, said the following: [B]rokers who are providing non-incidental advice must, by virtue of the Advisers Act, adhere to a fiduciary standard of care and therefore refrain from putting their own interests ahead of their clients' interests. Imposing a fiduciary standard on broker-dealer recommendations, therefore, would still be in keeping with these investor expectations. Representative Carolyn Maloney reportedly said the following during a House subcommittee hearing on Reg BI: [Under Reg BI] brokers have to act in the "best interest of customers," which sounds good, but the rule does not even define what this means. In fact, the rule allows brokers to continue to take their own financial interest into account when making client regulations. They can remain conflicted as long as they offer some basic amount of disclosure. This is dangerous for investors. An industry observer wrote the following regarding the absence of a fiduciary standard: [This rulemaking] presented a perfect opportunity to firm up what "best interest" means, but the SEC declined to do so. I have mixed feelings about this, because best interest can vary from client to client, and this allows flexibility when needed. However, the grey area has proven to be problematic, because, as you can imagine, it's hard to hold someone accountable to a flexible and unclear standard of care. John Britt, a retired SEC enforcement attorney, reportedly said the following: If a securities professional recommends that his client purchase a particular stock, he is giving investment advice. And if he's giving investment advice, he should have a fiduciary duty to his clientânothing less.... [This is] fake regulation. Reg BI Meaningfully Addresses Outstanding Broker-Dealer Conflict of Interest Issues Supportive Comments The SEC addressed conflicts of interest in the text of Reg BI as follows: The conflicts of interest associated with incentives at the associated person level and limitations on the securities or products that may be recommended to retail customers have raised particular concerns in the context of the broker-dealer, transaction-based relationship. Accordingly, the Commission believes specific disclosure and additional mitigation requirements are appropriate to address those conflicts. Sales contests, sales quotas, bonuses and non-cash compensation that are based on the sales of specific securities within a limited period of time create high-pressure situations for associated persons to increase the sales of specific securities or specific types of securities within a limited period of time and thus compromise the best interests of their retail customers. The Commission does not believe such conflicts of interest can be reasonably mitigated and, accordingly, they must be eliminated. In a written statement to Congress, former SEC Chairman Harvey L. Pitt said the following: [N]othing ... requires broker-dealers to recommend the least expensive or least remunerative securities or investment strategies, as long as the firm and its associated individuals comply with the disclosure, care and conflict of interest obligations that would be created by the Regulation. This is significant, because the mere fact that a brokerage firm, or an account executive, receive additional remuneration for pursuing certain strategies or securities does not, ipso facto, make the recommendation improper, unsuitable, or contrary to the best interests of the retail customer. In a July 2019 speech, SEC Chairman Jay Clayton said the following: Some critics have gone so far as to fault Reg. BI for failing to require elimination of all conflicts of interest. This criticism is misguidedâthere are conflicts of interest inherent in all principal-agent relationships, and the broker-customer relationship and the investment adviser-client relationship are no exception. Reg. BI recognizes that these conflicts exist, and requires that firms address those conflicts and provide recommendations that are in the best interest of their retail customers. Thomas Wade, of the American Action Forum, said the following: [It has been argued] that the best interest standard is a greater protection than fiduciary, as brokers must mitigate and eliminate conflicts of interests, where under the fiduciary duty all that was required was disclosure. Critical Comments The Consumer Federation of America said the following in a fact sheet criticizing Reg BI: The rule's conflict obligations don't prohibit firms from creating incentives that encourage and reward advice that is not in customers' best interests. Nor does the rule require firms to manage any conflicts to the benefit of the customer. For example, policies and procedures to "mitigate" financial conflicts don't have to be reasonably designed to prevent the broker from placing its interests ahead of the customer's interests. A media report detailed SEC Commissioner Jackson's criticism of Reg BI's approach to conflicts of interest as follows: The rule would be much improved with the addition of provisions that "limit or ban compensation practices that lead brokers to engage in conflicted activities," he says. "[Y]ou can expect people in the marketplace to do that which they're paid to do," he says. "If you pay them extra to put people in in-house products that are bad for the people, you can expect that there will be conflicts that will be difficult to mitigate, so I've urged for changes there as well." Commissioner Jackson also said the following in his statement on Reg BI: Troubling broker compensation practices that put investors at risk are addressed [in a very limited fashion] when they are "based on the sales of specific securities within a limited period of time," or "create high-pressure situations." These restrictions merely mimic those in longstanding FINRA proposals, and I cannot see why our rules should permit pay practices that create any pressure for brokers to harm investors." An industry observer wrote the following regarding Reg BI and conflicts of interest: The SEC fact sheet [as part of the press release accompanying Reg BI] ... did take positive steps from the proposed rule, but still left significant worries. For instance, sales competitions with award trips, bonuses and other rewards tend to prioritize growth over customer care (think Wells Fargo) were to some degree shot down in the rule, but not entirely. While specific product sales leading to bonuses appear to be shot down, an overall competition or bonus system for selling a suite of products is not clearly prohibited. This could really just cause companies to redo their bonus and competition models and allow them to continue. The Consumer Federation of America said the following in a press release: Even where conflicts would have to be "mitigated," the Commission doesn't make clear that mitigation has to be designed to support compliance with the best interest standard. An Analysis of Reg BI Reform In its 700-page Reg BI release, the SEC spoke of its inability to employ data-based research to gain insight into the reform's probable impact: Because the Commission does not have, has not received, and, in certain cases, does not believe it can reasonably obtain data that may inform on certain economic effects, the Commission is unable to quantify certain economic effects.... [E]ven in cases where it has some data or it has received some data regarding certain economic effects, the quantification of these effects is particularly challenging due to the number of assumptions that it would need to make to forecast how broker-dealers will respond to Regulation Best Interest, and how those responses will, in turn, affect the broader market for investment advice and the retail customers' participation in financial markets. The release, however, included a discussion of theoretical costs and benefits from an alternative to Reg BI that would have imposed fiduciary standards on broker-dealers akin to those that generally apply to investment advisers. The release asserted that a major theoretical benefit to such a uniform fiduciary standard would be reduced customer confusion surrounding what obligations both brokers and investment advisers have toward them. Moreover, the release argued that such a change could also reduce potential customer costs associated with choosing a financial professional who is not a good fit since both brokers and investment advisers would be subject to the same standard of customer care. The release noted, however, that a uniform fiduciary standard could result in a standard of care for brokers "that is not appropriately tailored to the structure and characteristics of the broker-dealer model (i.e., transaction specific recommendations and compensation)." Because of this possibility, it argued that the range of options in the financial advice market would shrink. It contended that at least in the short run, brokers would face greater compliance costs, possibly encouraging them to transition into offering advice in an investment adviser capacity and discouraging them from continuing to offer advice in a broker capacity. In turn, the release observed that brokers formally exiting their roles as broker-dealers could limit retail customers' access to particular securities or investment strategies as well as how they would pay for such advice. As a result, customers' costs for such advice could increase. The release then examined the potential fallout from a hypothetical scenario in which brokers operate under a new fiduciary standard but uniformly remain broker-dealers. According to the release, this could result in increased compliance costs for brokers that could be fully or partially passed on to their clients. That possibility, it argued, could lead to some customers problematically engaging less expensive investment advice providers outside of the regulated world of investment advisers and broker-dealers. Some data-based research has also examined the implications of a hypothetical final rulemaking that imposed a fiduciary standard on brokers. Several examples of this research are examined below, illustrating that research has resulted in disparate views on the nature of such impact. The Deloitte -SIFMA Study . In 2017, the business consultant Deloitte and SIFMA, the broker-dealer trade group, released the results of a collaborative survey conducted by Deloitte on SIFMA members. The study yielded results from the responses of 21 large national corporate SIFMA members on their reactions to the partially implemented DOL fiduciary rule, which the members had responded to by making plans to modify their retail customer-based services and products. Of the 21 respondents, 53% reported that they had either eliminated or limited access to brokerage advice services and 67% had migrated away from open choice to fee-based or limited brokerage services. The study also found that a "trend towards fee-based accounts was likely accelerated by the rule." It noted that "[t]ypically, fee-based accounts offer a higher level of service than brokerage accounts and often include automatic rebalancing of accounts, comprehensive annual reviews, enhanced reporting to account holders, and access to third party money managers. The fees are generally an 'all-in' asset-based fee that is generally higher than the fees paid in an advised brokerage account." Finke and Langdon . As indicated earlier, some states have common laws that impose a fiduciary standard of care on brokers, but many do not. By surveying broker-dealer registered representatives subject to differing state common law-based fiduciary requirements, Finke and Langdon, two academics, exploited those differences to ascertain whether a relatively stricter fiduciary standard of care affected brokers' willingness to provide advisory services to retail consumers. Among other things, the 2012 research found that the number of registered representatives conducting business within a state as a percentage of total households did not significantly change whether or not a state had a stricter fiduciary standard. It also found no significant differences among such financial professionals in states with a strict fiduciary standard compared with states that did not have a fiduciary standard with respect to (1) whether they were limited in their ability to recommend certain products or to serve clients with limited wealth; (2) the percentage of clients with lower incomes and higher levels of wealth; (3) their ability to provide a broad range of investment products including those that involve commission-based compensation; and (4) the ability to provide tailored customer advice. Bhattacharya , Padi , and Illanes . The researchers analyzed patterns of sales behavior for annuities issued by a large national financial company sold between 2013 and 2015 by broker-dealers based in adjacent counties separated by state lines. Released in 2019, the analysis hinged on the fact that some of the counties were in states with common law-based broker fiduciary standards, but adjacent counties were in states without such standards. Among other things, they found that subjecting brokers to a fiduciary duty shifted the suite of investment products that they sell to retail investors. Relative to counties without broker fiduciary obligations, brokers in counties with fiduciary standards saw increased costs of doing business, but the jurisdictions also witnessed direct improvements in the quality of the financial advice.	Summary:	gov_report	1,024	null	70
crs_R46290	crs_R46290_0	You are given a report by a government agency. Write a one-page summary of the report. Report: T his report describes actions taken to provide FY2021 appropriations for Commerce, Justice, Science, and Related Agencies (CJS) accounts. The dollar amounts in this report reflect only new appropriations made available at the start of the fiscal year. Therefore, the amounts do not include any rescissions of unobligated or deobligated balances that may be counted as offsets to newly enacted appropriations, nor do they include any scorekeeping adjustments (e.g., the budgetary effects of provisions limiting the availability of the balance in the Crime Victims Fund). In the text of the report, appropriations are rounded to the nearest million. However, percentage changes are calculated using whole, not rounded, numbers, meaning that in some instances there may be small differences between the actual percentage change and the percentage change that would be calculated by using the rounded amounts discussed in the report. Overview of CJS The annual CJS appropriations act provides funding for the Departments of Commerce and Justice, select science agencies, and several related agencies. Appropriations for the Department of Commerce include funding for bureaus and offices such as the Census Bureau, the U.S. Patent and Trademark Office, the National Oceanic and Atmospheric Administration, and the National Institute of Standards and Technology. Appropriations for the Department of Justice (DOJ) provide funding for agencies such as the Federal Bureau of Investigation; the Bureau of Prisons; the U.S. Marshals; the Drug Enforcement Administration; and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, along with funding for a variety of public safety-related grant programs for state, local, and tribal governments. The vast majority of funding for the science agencies goes to the National Aeronautics and Space Administration and the National Science Foundation. The annual appropriation for the related agencies includes funding for agencies such as the Legal Services Corporation and the Equal Employment Opportunity Commission. Department of Commerce The mission of the Department of Commerce is to "create the conditions for economic growth and opportunity." The department promotes "job creation and economic growth by ensuring fair and reciprocal trade, providing the data necessary to support commerce and constitutional democracy, and fostering innovation by setting standards and conducting foundational research and development." It has wide-ranging responsibilities including trade, economic development, technology, entrepreneurship and business development, monitoring the environment, forecasting weather, managing marine resources, and statistical research and analysis. The department pursues and implements policies that affect trade and economic development by working to open new markets for U.S. goods and services and promoting pro-growth business policies. It also invests in research and development to foster innovation. The agencies within the Department of Commerce, and their responsibilities, include the following: International Trade Administration (ITA) seeks to strengthen the international competitiveness of U.S. industry, promote trade and investment, and ensure fair trade and compliance with trade laws and agreements; Bureau of Industry and Security (BIS) works to ensure an effective export control and treaty compliance system and promote continued U.S. leadership in strategic technologies by maintaining and strengthening adaptable, efficient, and effective export controls and treaty compliance systems, along with active leadership and involvement in international export control regimes; Economic Development Administration (EDA) promotes innovation and competitiveness, preparing American regions for growth and success in the worldwide economy; Minority Business Development Agency (MBDA) promotes the growth of minority owned businesses through the mobilization and advancement of public and private sector programs, policy, and research; Bureau of Economic Analysis (BEA) is a federal statistical agency that promotes a better understanding of the U.S. economy by providing timely, relevant, and accurate economic accounts data in an objective and cost-effective manner; Census Bureau is a federal statistical agency that measures and disseminates information about the U.S. economy, society, and institutions, which fosters economic growth, advances scientific understanding, and facilitates informed decisions; National Telecommunications and Information Administration (NTIA) advises the President on communications and information policy; United States Patent and Trademark Office (USPTO) fosters innovation, competitiveness, and economic growth domestically and abroad by providing high-quality and timely examination of patent and trademark applications, guiding domestic and international intellectual property (IP) policy, and delivering IP information and education worldwide; National Institute of Standards and Technology (NIST) promotes U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that enhance economic security and improve quality of life ; and National Oceanic and Atmospheric Administration (NOAA) provides daily weather forecasts, severe storm warnings, climate monitoring, fisheries management, coastal restoration, and support of marine commerce. Department of Justice DOJ's mission is to "enforce the law and defend the interests of the United States according to the law; to ensure public safety against threats foreign and domestic; to provide federal leadership in preventing and controlling crime; to seek just punishment for those guilty of unlawful behavior; and to ensure fair and impartial administration of justice for all Americans." DOJ also provides legal advice and opinions, upon request, to the President and executive branch department heads. The major DOJ offices and agencies, and their functions, are described below: Office of the United States Attorneys prosecutes violations of federal criminal laws, represents the federal government in civil actions, and initiates proceedings for the collection of fines, penalties, and forfeitures owed to the United States; United States Marshals Service (USMS) provides security for the federal judiciary, protects witnesses, executes warrants and court orders, manages seized assets, detains and transports alleged and convicted offenders, and apprehends fugitives; Federal Bureau of Investigation (FBI) investigates violations of federal criminal law; helps protect the United States against terrorism and hostile intelligence efforts; provides assistance to other federal, state, and local law enforcement agencies; and shares jurisdiction with the Drug Enforcement Administration for the investigation of federal drug violations; Drug Enforcement Administration (DEA) investigates federal drug law violations; coordinates its efforts with other federal, state, and local law enforcement agencies; develops and maintains drug intelligence systems; regulates the manufacture, distribution, and dispensing of legitimate controlled substances; and conducts joint intelligence-gathering activities with foreign governments; Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) enforces federal law related to the manufacture, importation, and distribution of alcohol, tobacco, firearms, and explosives; Federal Prison System ( Bureau of Prisons; BOP ) houses offenders sentenced to a term of incarceration for a federal crime and provides for the operation and maintenance of the federal prison system; Office on Violence Against Women (OVW) provides federal leadership in developing the nation's capacity to reduce violence against women and administer justice for and strengthen services to victims of domestic violence, dating violence, sexual assault, and stalking; Office of Justice Programs (OJP) manages and coordinates the activities of the Bureau of Justice Assistance; Bureau of Justice Statistics; National Institute of Justice; Office of Juvenile Justice and Delinquency Prevention; Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking; and Office of Victims of Crime; and Community Oriented Policing Services (COPS) advances the practice of community policing by the nation's state, local, territorial, and tribal law enforcement agencies through information and grant resources. Science Offices and Agencies The science offices and agencies support research and development and related activities across a wide variety of federal missions, including national competitiveness, space exploration, and fundamental discovery. Office of Science and Technology Policy The primary function of the Office of Science and Technology Policy (OSTP) is to provide the President and others within the Executive Office of the President with advice on the scientific, engineering, and technological aspects of issues that require the attention of the federal government. The OSTP director also manages the National Science and Technology Council, which coordinates science and technology policy across the executive branch of the federal government, and cochairs the President's Council of Advisors on Science and Technology, a council of external advisors that provides advice to the President on matters related to science and technology policy. The National Space Council The National Space Council, in the Executive Office of the President, is a coordinating body for U.S. space policy. Chaired by the Vice President, it consists of the Secretaries of State, Defense, Commerce, Transportation, and Homeland Security; the Administrator of NASA; and other senior officials. The council was first established in 1988 through P.L. 100-685 . The council ceased operations in 1993, and was reestablished by the Trump Administration in June 2017. National Science Foundation The National Science Foundation (NSF) supports basic research and education in the nonmedical sciences and engineering. The foundation was established as an independent federal agency "to promote the progress of science; to advance the national health, prosperity, and welfare; to secure the national defense; and for other purposes." The NSF is a primary source of federal support for U.S. university research in the nonmedical sciences and engineering. It is also responsible for significant shares of the federal science, technology, engineering, and mathematics (STEM) education program portfolio and federal STEM student aid and support. National Aeronautics and Space Administration The National Aeronautics and Space Administration (NASA) was created to conduct civilian space and aeronautics activities. It has four mission directorates. The Human Exploration and Operations Mission Directorate is responsible for human spaceflight activities, including the International Space Station and development efforts for future crewed spacecraft. The Science Mission Directorate manages robotic science missions, such as the Hubble Space Telescope, the Mars rover Curiosity, and satellites for Earth science research. The Space Technology Mission Directorate develops new technologies for use in future space missions, such as advanced propulsion and laser communications. The Aeronautics Research Mission Directorate conducts research and development on aircraft and aviation systems. In addition, NASA's Office of STEM Engagement (formerly the Office of Education) manages education programs for schoolchildren, college and university students, and the general public. Related Agencies The annual CJS appropriations act includes funding for several related agencies: U.S. Commission on Civil Rights informs the development of national civil rights policy and enhances enforcement of federal civil rights laws; Equal Employment Opportunity Commission is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability, or genetic information; International Trade Commission investigates the effects of dumped and subsidized imports on domestic industries and conducts global safeguard investigations, adjudicates cases involving imports that allegedly infringe intellectual property rights, and serves as a resource for trade data and other trade policy-related information; Legal Services Corporation (LSC) is a federally funded nonprofit corporation that provides financial support for civil legal aid to low-income Americans; Marine Mammal Commission works for the conservation of marine mammals by providing science-based oversight of domestic and international policies and actions of federal agencies with a mandate to address human effects on marine mammals and their ecosystems; Office of the U.S. Trade Representative is responsible for developing and coordinating U.S. international trade, commodity, and direct investment policy, and overseeing negotiations with other countries; and State Justice Institute is a federally funded nonprofit corporation that awards grants to improve the quality of justice in state courts and foster innovative, efficient solutions to common issues faced by all courts. The Administration's FY2021 Budget Request The Administration's FY2021 budget request for CJS is $74.849 billion, which is $4.910 billion (-6.2%) less than the $79.759 billion appropriated for CJS for FY2020 (see Table 1 ). The Administration's FY2021 request includes the following: $8.318 billion for the Department of Commerce, which is $6.903 billion (-45.4%) less than the $15.221 billion provided for FY2020; $32.964 billion for the Department of Justice, which is $358 million (1.1%) more than the $32.605 billion provided for FY2020; $32.994 billion for the science agencies, which is $2.080 billion (6.7%) more than the $30.915 billion provided for FY2020; and $574 million for the related agencies, which is $445 million (-43.7%) less than the $1.019 billion provided for FY2020. The decrease in funding for the Department of Commerce is largely the result of a proposed $5.886 billion (-77.9%) decrease in funding for the Census Bureau. For the past several fiscal years, Congress has increased funding for the Census Bureau to help build capacity for conducting the decennial 2020 Census. In keeping with past precedent, funding for the Census Bureau peaks in the year in which the decennial census is conducted and it decreases sharply in the following year (see the discussion on historical funding for CJS, below). However, the proposed reduction in funding for the Department of Commerce is not only the result of reduced funding for the Census Bureau. The Administration also proposes shuttering the EDA (though the Administration requests some funding to help provide for an orderly closeout of the EDA's operations) and eliminating NIST's Manufacturing Extension Partnership and NOAA's Pacific Coastal Salmon Recovery Fund. In addition, the Administration proposes reducing funding for several other Department of Commerce accounts, including the following: the International Trade Administration (-$36 million, -7.0%); NIST's Scientific and Technical Research and Services account (-$102 million, -13.5%); NIST's Industrial Technology Services account (-$137 million, -84.4%); NOAA's Operations, Research, and Facilities account (-$599 million, -15.9%); and NOAA's Procurement, Acquisition, and Facilities account (-$64 million, -4.2%). The Administration also proposes a $32 million (-75.5%) reduction for the Minority Business Development Administration. It proposes changing the agency's focus to being a policy office that concentrates on advocating for the minority business community as a whole rather than supporting individual minority business enterprises. The Administration's FY2021 budget includes a proposal to establish a Federal Capital Revolving Fund, which would be administered by the General Services Administration (GSA). The Administration proposes to transfer $294 million from the proposed fund to NIST's Construction of Research Facilities account for renovating NIST's Building 1 in Boulder, CO, which would be repaid by NIST from future appropriations at $20 million per year for 15 years. While the Administration proposes increased funding for most DOJ offices and agencies, the budget request would reduce funding for the FBI (-$152 million, -1.5%) and BOP (-$67 million, -0.9%), though these reductions are the result of proposals for reduced funding for construction-related accounts. The Administration proposes reducing funding for two grant-related DOJ accounts, State and Local Law Enforcement Assistance (-$381 million, -20.1%) and Juvenile Justice Programs (-$93 million, -28.9%). The Administration also proposes to eliminate the COPS program as a separate account in DOJ and requests funding for COPS-related programs under the State and Local Law Enforcement Assistance account. The Administration proposes eliminating the Community Relations Service and moving its functions to DOJ's Civil Rights Division. The Administration's FY2021 budget request would add two new accounts to DOJ. First, the Administration proposes moving funding for the High Intensity Drug Trafficking Areas (HIDTA) program to the DEA. Currently, HIDTA funding is administered by the Office of National Drug Control Policy. In addition, the Administration proposes adding a Construction account for ATF. The Administration requested this funding so the ATF can consolidate its laboratory facilities in Walnut Creek, CA and Atlanta, GA. The annual CJS appropriations act traditionally includes an obligation cap of funds expended from the Crime Victims Fund (CVF). The Administration's FY2021 budget does not include a proposed obligation cap for the CVF. Rather, the Administration proposes a new $2.300 billion annual mandatory appropriation for crime victims programs. Within this amount, $499 million would be for the OVW, $10 million would be for oversight of Office for Victims of Crime (OVC) programs by the Office of the Inspector General, $12 million would be for developing innovative crime victims services initiatives, and a set-aside of up to $115 million would be for tribal victims assistance grants. From the remaining amount, OVC would provide formula and nonformula grants to the states to support crime victim compensation and victims services programs. Under the Administration's proposal, the amount of the mandatory appropriation would decrease if the balance on the CVF falls below $5.000 billion in future fiscal years. Also, the Administration's budget includes a proposal to transfer primary jurisdiction over federal tobacco and alcohol anti-smuggling laws from the ATF to the Department of the Treasury's Tax and Trade Bureau. The Administration's budget request includes increased funding for NASA, but the Administration does propose reduced funding for the Science account (-$832 million, -11.7%) and eliminating the Office of STEM Engagement (formerly the Office of Education). The Administration also proposes renaming three of NASA's accounts: the Space Technology account would be changed to the Exploration Technology account, the Exploration account would be changed to the Deep Space Exploration Systems account, and the Space Operations account would be changed to the Low Earth Orbit and Spaceflight Operations account. Like the Administration's FY2020 budget, the FY2021 budget proposal does not appear to include a realignment of items that would be funded from these accounts, which is what the Administration proposed in its FY2019 budget request. The FY2021 budget request includes reduced funding for NSF (-$537 million, -6.5%), which includes proposed reductions for the Research and Related Activities (-$524 million, -7.8%), Major Research Equipment and Facilities Construction (-$13 million, -5.5%), and Education and Human Resources (-$9 million, -1.0%) accounts. The proposed reductions are partially offset by proposed increases for the Agency Operations and Award Management (+$9 million, +2.6%) and Office of the Inspector General (+$1 million, +8.2%) accounts. The Administration requests reduced funding for most of the related agencies, which includes a proposal to close the LSC, though it requests some funding to help provide for an orderly closeout of the LSC's operations. Table 1 outlines the FY2020 funding and the Administration's FY2021 request for the Department of Commerce, the Department of Justice, the science agencies, and the related agencies. Historical Funding for CJS Figure 1 shows the total CJS funding for FY2010-FY2020, in both nominal and inflation-adjusted dollars (more-detailed historical appropriations data can be found in Table 2 ). The data show that in FY2020 nominal funding for CJS reached its highest level since FY2010, though in inflation-adjusted terms, funding for FY2020 was lower than it was in FY2010. There is a cyclical nature to total nominal funding for CJS because of appropriations for the Census Bureau to administer decennial censuses. Overall funding for CJS traditionally starts to increase a few years before the decennial census, peaks in the fiscal year in which the census is conducted, and then declines immediately thereafter. Figure 1 shows how total funding for CJS decreased after the 2010 Census and started to ramp up again as the Census Bureau prepared to conduct the 2020 Census. Increased funding for CJS also coincides with increases to the discretionary budget caps under the Budget Control Act of 2011 (BCA, P.L. 112-25 ). The BCA put into effect statutory limits on discretionary spending for FY2012-FY2021. Under the act, discretionary spending limits were scheduled to be adjusted downward each fiscal year until FY2021. However, legislation was enacted that increased discretionary spending caps for FY2014 to FY2021. A sequestration of discretionary funding, ordered pursuant to the BCA, cut $2.973 billion out of the total amount Congress and the President provided for CJS for FY2013. Since then, funding for CJS has increased as more discretionary funding has been allowed under the BCA. Figure 2 shows total CJS funding for FY2010-FY2020 by major component (i.e., the Department of Commerce, DOJ, NASA, and the NSF). Although decreased appropriations for the Department of Commerce (-47.4%) from FY2010 to FY2013, during years immediately following the 2010 Census, mostly explain the overall decrease in CJS appropriations during this time, cuts in funding for DOJ (-8.7%) and NASA (-9.8%) also contributed. Funding for NSF held relatively steady from FY2010 to FY2013. Overall CJS funding has increased since FY2014, and this is partially explained by more funding for the Department of Commerce to help the Census Bureau prepare for the 2020 Census. While funding for the Department of Commerce decreased from FY2018 to FY2019, it was partly a function of the department receiving $1.000 billion in emergency supplemental funding for FY2018. If supplemental funding is excluded, appropriations for the Department of Commerce increased 2.5% from FY2018 to FY2019. While increased funding for the Department of Commerce partially explains the overall increase in funding for CJS since FY2014, there have also been steady increases in funding for DOJ (+17.6%), NASA (+28.2%), and NSF (+12.6%), as higher discretionary spending caps have been used to provide additional funding to these agencies. Summary:	null	96	23,779	23,781	23,781	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: T his report describes actions taken to provide FY2021 appropriations for Commerce, Justice, Science, and Related Agencies (CJS) accounts. The dollar amounts in this report reflect only new appropriations made available at the start of the fiscal year. Therefore, the amounts do not include any rescissions of unobligated or deobligated balances that may be counted as offsets to newly enacted appropriations, nor do they include any scorekeeping adjustments (e.g., the budgetary effects of provisions limiting the availability of the balance in the Crime Victims Fund). In the text of the report, appropriations are rounded to the nearest million. However, percentage changes are calculated using whole, not rounded, numbers, meaning that in some instances there may be small differences between the actual percentage change and the percentage change that would be calculated by using the rounded amounts discussed in the report. Overview of CJS The annual CJS appropriations act provides funding for the Departments of Commerce and Justice, select science agencies, and several related agencies. Appropriations for the Department of Commerce include funding for bureaus and offices such as the Census Bureau, the U.S. Patent and Trademark Office, the National Oceanic and Atmospheric Administration, and the National Institute of Standards and Technology. Appropriations for the Department of Justice (DOJ) provide funding for agencies such as the Federal Bureau of Investigation; the Bureau of Prisons; the U.S. Marshals; the Drug Enforcement Administration; and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, along with funding for a variety of public safety-related grant programs for state, local, and tribal governments. The vast majority of funding for the science agencies goes to the National Aeronautics and Space Administration and the National Science Foundation. The annual appropriation for the related agencies includes funding for agencies such as the Legal Services Corporation and the Equal Employment Opportunity Commission. Department of Commerce The mission of the Department of Commerce is to "create the conditions for economic growth and opportunity." The department promotes "job creation and economic growth by ensuring fair and reciprocal trade, providing the data necessary to support commerce and constitutional democracy, and fostering innovation by setting standards and conducting foundational research and development." It has wide-ranging responsibilities including trade, economic development, technology, entrepreneurship and business development, monitoring the environment, forecasting weather, managing marine resources, and statistical research and analysis. The department pursues and implements policies that affect trade and economic development by working to open new markets for U.S. goods and services and promoting pro-growth business policies. It also invests in research and development to foster innovation. The agencies within the Department of Commerce, and their responsibilities, include the following: International Trade Administration (ITA) seeks to strengthen the international competitiveness of U.S. industry, promote trade and investment, and ensure fair trade and compliance with trade laws and agreements; Bureau of Industry and Security (BIS) works to ensure an effective export control and treaty compliance system and promote continued U.S. leadership in strategic technologies by maintaining and strengthening adaptable, efficient, and effective export controls and treaty compliance systems, along with active leadership and involvement in international export control regimes; Economic Development Administration (EDA) promotes innovation and competitiveness, preparing American regions for growth and success in the worldwide economy; Minority Business Development Agency (MBDA) promotes the growth of minority owned businesses through the mobilization and advancement of public and private sector programs, policy, and research; Bureau of Economic Analysis (BEA) is a federal statistical agency that promotes a better understanding of the U.S. economy by providing timely, relevant, and accurate economic accounts data in an objective and cost-effective manner; Census Bureau is a federal statistical agency that measures and disseminates information about the U.S. economy, society, and institutions, which fosters economic growth, advances scientific understanding, and facilitates informed decisions; National Telecommunications and Information Administration (NTIA) advises the President on communications and information policy; United States Patent and Trademark Office (USPTO) fosters innovation, competitiveness, and economic growth domestically and abroad by providing high-quality and timely examination of patent and trademark applications, guiding domestic and international intellectual property (IP) policy, and delivering IP information and education worldwide; National Institute of Standards and Technology (NIST) promotes U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that enhance economic security and improve quality of life ; and National Oceanic and Atmospheric Administration (NOAA) provides daily weather forecasts, severe storm warnings, climate monitoring, fisheries management, coastal restoration, and support of marine commerce. Department of Justice DOJ's mission is to "enforce the law and defend the interests of the United States according to the law; to ensure public safety against threats foreign and domestic; to provide federal leadership in preventing and controlling crime; to seek just punishment for those guilty of unlawful behavior; and to ensure fair and impartial administration of justice for all Americans." DOJ also provides legal advice and opinions, upon request, to the President and executive branch department heads. The major DOJ offices and agencies, and their functions, are described below: Office of the United States Attorneys prosecutes violations of federal criminal laws, represents the federal government in civil actions, and initiates proceedings for the collection of fines, penalties, and forfeitures owed to the United States; United States Marshals Service (USMS) provides security for the federal judiciary, protects witnesses, executes warrants and court orders, manages seized assets, detains and transports alleged and convicted offenders, and apprehends fugitives; Federal Bureau of Investigation (FBI) investigates violations of federal criminal law; helps protect the United States against terrorism and hostile intelligence efforts; provides assistance to other federal, state, and local law enforcement agencies; and shares jurisdiction with the Drug Enforcement Administration for the investigation of federal drug violations; Drug Enforcement Administration (DEA) investigates federal drug law violations; coordinates its efforts with other federal, state, and local law enforcement agencies; develops and maintains drug intelligence systems; regulates the manufacture, distribution, and dispensing of legitimate controlled substances; and conducts joint intelligence-gathering activities with foreign governments; Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) enforces federal law related to the manufacture, importation, and distribution of alcohol, tobacco, firearms, and explosives; Federal Prison System ( Bureau of Prisons; BOP ) houses offenders sentenced to a term of incarceration for a federal crime and provides for the operation and maintenance of the federal prison system; Office on Violence Against Women (OVW) provides federal leadership in developing the nation's capacity to reduce violence against women and administer justice for and strengthen services to victims of domestic violence, dating violence, sexual assault, and stalking; Office of Justice Programs (OJP) manages and coordinates the activities of the Bureau of Justice Assistance; Bureau of Justice Statistics; National Institute of Justice; Office of Juvenile Justice and Delinquency Prevention; Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking; and Office of Victims of Crime; and Community Oriented Policing Services (COPS) advances the practice of community policing by the nation's state, local, territorial, and tribal law enforcement agencies through information and grant resources. Science Offices and Agencies The science offices and agencies support research and development and related activities across a wide variety of federal missions, including national competitiveness, space exploration, and fundamental discovery. Office of Science and Technology Policy The primary function of the Office of Science and Technology Policy (OSTP) is to provide the President and others within the Executive Office of the President with advice on the scientific, engineering, and technological aspects of issues that require the attention of the federal government. The OSTP director also manages the National Science and Technology Council, which coordinates science and technology policy across the executive branch of the federal government, and cochairs the President's Council of Advisors on Science and Technology, a council of external advisors that provides advice to the President on matters related to science and technology policy. The National Space Council The National Space Council, in the Executive Office of the President, is a coordinating body for U.S. space policy. Chaired by the Vice President, it consists of the Secretaries of State, Defense, Commerce, Transportation, and Homeland Security; the Administrator of NASA; and other senior officials. The council was first established in 1988 through P.L. 100-685 . The council ceased operations in 1993, and was reestablished by the Trump Administration in June 2017. National Science Foundation The National Science Foundation (NSF) supports basic research and education in the nonmedical sciences and engineering. The foundation was established as an independent federal agency "to promote the progress of science; to advance the national health, prosperity, and welfare; to secure the national defense; and for other purposes." The NSF is a primary source of federal support for U.S. university research in the nonmedical sciences and engineering. It is also responsible for significant shares of the federal science, technology, engineering, and mathematics (STEM) education program portfolio and federal STEM student aid and support. National Aeronautics and Space Administration The National Aeronautics and Space Administration (NASA) was created to conduct civilian space and aeronautics activities. It has four mission directorates. The Human Exploration and Operations Mission Directorate is responsible for human spaceflight activities, including the International Space Station and development efforts for future crewed spacecraft. The Science Mission Directorate manages robotic science missions, such as the Hubble Space Telescope, the Mars rover Curiosity, and satellites for Earth science research. The Space Technology Mission Directorate develops new technologies for use in future space missions, such as advanced propulsion and laser communications. The Aeronautics Research Mission Directorate conducts research and development on aircraft and aviation systems. In addition, NASA's Office of STEM Engagement (formerly the Office of Education) manages education programs for schoolchildren, college and university students, and the general public. Related Agencies The annual CJS appropriations act includes funding for several related agencies: U.S. Commission on Civil Rights informs the development of national civil rights policy and enhances enforcement of federal civil rights laws; Equal Employment Opportunity Commission is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability, or genetic information; International Trade Commission investigates the effects of dumped and subsidized imports on domestic industries and conducts global safeguard investigations, adjudicates cases involving imports that allegedly infringe intellectual property rights, and serves as a resource for trade data and other trade policy-related information; Legal Services Corporation (LSC) is a federally funded nonprofit corporation that provides financial support for civil legal aid to low-income Americans; Marine Mammal Commission works for the conservation of marine mammals by providing science-based oversight of domestic and international policies and actions of federal agencies with a mandate to address human effects on marine mammals and their ecosystems; Office of the U.S. Trade Representative is responsible for developing and coordinating U.S. international trade, commodity, and direct investment policy, and overseeing negotiations with other countries; and State Justice Institute is a federally funded nonprofit corporation that awards grants to improve the quality of justice in state courts and foster innovative, efficient solutions to common issues faced by all courts. The Administration's FY2021 Budget Request The Administration's FY2021 budget request for CJS is $74.849 billion, which is $4.910 billion (-6.2%) less than the $79.759 billion appropriated for CJS for FY2020 (see Table 1 ). The Administration's FY2021 request includes the following: $8.318 billion for the Department of Commerce, which is $6.903 billion (-45.4%) less than the $15.221 billion provided for FY2020; $32.964 billion for the Department of Justice, which is $358 million (1.1%) more than the $32.605 billion provided for FY2020; $32.994 billion for the science agencies, which is $2.080 billion (6.7%) more than the $30.915 billion provided for FY2020; and $574 million for the related agencies, which is $445 million (-43.7%) less than the $1.019 billion provided for FY2020. The decrease in funding for the Department of Commerce is largely the result of a proposed $5.886 billion (-77.9%) decrease in funding for the Census Bureau. For the past several fiscal years, Congress has increased funding for the Census Bureau to help build capacity for conducting the decennial 2020 Census. In keeping with past precedent, funding for the Census Bureau peaks in the year in which the decennial census is conducted and it decreases sharply in the following year (see the discussion on historical funding for CJS, below). However, the proposed reduction in funding for the Department of Commerce is not only the result of reduced funding for the Census Bureau. The Administration also proposes shuttering the EDA (though the Administration requests some funding to help provide for an orderly closeout of the EDA's operations) and eliminating NIST's Manufacturing Extension Partnership and NOAA's Pacific Coastal Salmon Recovery Fund. In addition, the Administration proposes reducing funding for several other Department of Commerce accounts, including the following: the International Trade Administration (-$36 million, -7.0%); NIST's Scientific and Technical Research and Services account (-$102 million, -13.5%); NIST's Industrial Technology Services account (-$137 million, -84.4%); NOAA's Operations, Research, and Facilities account (-$599 million, -15.9%); and NOAA's Procurement, Acquisition, and Facilities account (-$64 million, -4.2%). The Administration also proposes a $32 million (-75.5%) reduction for the Minority Business Development Administration. It proposes changing the agency's focus to being a policy office that concentrates on advocating for the minority business community as a whole rather than supporting individual minority business enterprises. The Administration's FY2021 budget includes a proposal to establish a Federal Capital Revolving Fund, which would be administered by the General Services Administration (GSA). The Administration proposes to transfer $294 million from the proposed fund to NIST's Construction of Research Facilities account for renovating NIST's Building 1 in Boulder, CO, which would be repaid by NIST from future appropriations at $20 million per year for 15 years. While the Administration proposes increased funding for most DOJ offices and agencies, the budget request would reduce funding for the FBI (-$152 million, -1.5%) and BOP (-$67 million, -0.9%), though these reductions are the result of proposals for reduced funding for construction-related accounts. The Administration proposes reducing funding for two grant-related DOJ accounts, State and Local Law Enforcement Assistance (-$381 million, -20.1%) and Juvenile Justice Programs (-$93 million, -28.9%). The Administration also proposes to eliminate the COPS program as a separate account in DOJ and requests funding for COPS-related programs under the State and Local Law Enforcement Assistance account. The Administration proposes eliminating the Community Relations Service and moving its functions to DOJ's Civil Rights Division. The Administration's FY2021 budget request would add two new accounts to DOJ. First, the Administration proposes moving funding for the High Intensity Drug Trafficking Areas (HIDTA) program to the DEA. Currently, HIDTA funding is administered by the Office of National Drug Control Policy. In addition, the Administration proposes adding a Construction account for ATF. The Administration requested this funding so the ATF can consolidate its laboratory facilities in Walnut Creek, CA and Atlanta, GA. The annual CJS appropriations act traditionally includes an obligation cap of funds expended from the Crime Victims Fund (CVF). The Administration's FY2021 budget does not include a proposed obligation cap for the CVF. Rather, the Administration proposes a new $2.300 billion annual mandatory appropriation for crime victims programs. Within this amount, $499 million would be for the OVW, $10 million would be for oversight of Office for Victims of Crime (OVC) programs by the Office of the Inspector General, $12 million would be for developing innovative crime victims services initiatives, and a set-aside of up to $115 million would be for tribal victims assistance grants. From the remaining amount, OVC would provide formula and nonformula grants to the states to support crime victim compensation and victims services programs. Under the Administration's proposal, the amount of the mandatory appropriation would decrease if the balance on the CVF falls below $5.000 billion in future fiscal years. Also, the Administration's budget includes a proposal to transfer primary jurisdiction over federal tobacco and alcohol anti-smuggling laws from the ATF to the Department of the Treasury's Tax and Trade Bureau. The Administration's budget request includes increased funding for NASA, but the Administration does propose reduced funding for the Science account (-$832 million, -11.7%) and eliminating the Office of STEM Engagement (formerly the Office of Education). The Administration also proposes renaming three of NASA's accounts: the Space Technology account would be changed to the Exploration Technology account, the Exploration account would be changed to the Deep Space Exploration Systems account, and the Space Operations account would be changed to the Low Earth Orbit and Spaceflight Operations account. Like the Administration's FY2020 budget, the FY2021 budget proposal does not appear to include a realignment of items that would be funded from these accounts, which is what the Administration proposed in its FY2019 budget request. The FY2021 budget request includes reduced funding for NSF (-$537 million, -6.5%), which includes proposed reductions for the Research and Related Activities (-$524 million, -7.8%), Major Research Equipment and Facilities Construction (-$13 million, -5.5%), and Education and Human Resources (-$9 million, -1.0%) accounts. The proposed reductions are partially offset by proposed increases for the Agency Operations and Award Management (+$9 million, +2.6%) and Office of the Inspector General (+$1 million, +8.2%) accounts. The Administration requests reduced funding for most of the related agencies, which includes a proposal to close the LSC, though it requests some funding to help provide for an orderly closeout of the LSC's operations. Table 1 outlines the FY2020 funding and the Administration's FY2021 request for the Department of Commerce, the Department of Justice, the science agencies, and the related agencies. Historical Funding for CJS Figure 1 shows the total CJS funding for FY2010-FY2020, in both nominal and inflation-adjusted dollars (more-detailed historical appropriations data can be found in Table 2 ). The data show that in FY2020 nominal funding for CJS reached its highest level since FY2010, though in inflation-adjusted terms, funding for FY2020 was lower than it was in FY2010. There is a cyclical nature to total nominal funding for CJS because of appropriations for the Census Bureau to administer decennial censuses. Overall funding for CJS traditionally starts to increase a few years before the decennial census, peaks in the fiscal year in which the census is conducted, and then declines immediately thereafter. Figure 1 shows how total funding for CJS decreased after the 2010 Census and started to ramp up again as the Census Bureau prepared to conduct the 2020 Census. Increased funding for CJS also coincides with increases to the discretionary budget caps under the Budget Control Act of 2011 (BCA, P.L. 112-25 ). The BCA put into effect statutory limits on discretionary spending for FY2012-FY2021. Under the act, discretionary spending limits were scheduled to be adjusted downward each fiscal year until FY2021. However, legislation was enacted that increased discretionary spending caps for FY2014 to FY2021. A sequestration of discretionary funding, ordered pursuant to the BCA, cut $2.973 billion out of the total amount Congress and the President provided for CJS for FY2013. Since then, funding for CJS has increased as more discretionary funding has been allowed under the BCA. Figure 2 shows total CJS funding for FY2010-FY2020 by major component (i.e., the Department of Commerce, DOJ, NASA, and the NSF). Although decreased appropriations for the Department of Commerce (-47.4%) from FY2010 to FY2013, during years immediately following the 2010 Census, mostly explain the overall decrease in CJS appropriations during this time, cuts in funding for DOJ (-8.7%) and NASA (-9.8%) also contributed. Funding for NSF held relatively steady from FY2010 to FY2013. Overall CJS funding has increased since FY2014, and this is partially explained by more funding for the Department of Commerce to help the Census Bureau prepare for the 2020 Census. While funding for the Department of Commerce decreased from FY2018 to FY2019, it was partly a function of the department receiving $1.000 billion in emergency supplemental funding for FY2018. If supplemental funding is excluded, appropriations for the Department of Commerce increased 2.5% from FY2018 to FY2019. While increased funding for the Department of Commerce partially explains the overall increase in funding for CJS since FY2014, there have also been steady increases in funding for DOJ (+17.6%), NASA (+28.2%), and NSF (+12.6%), as higher discretionary spending caps have been used to provide additional funding to these agencies.	Summary:	gov_report	1,024	null	71
crs_R42567	crs_R42567_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction This report provides background information and potential oversight issues for Congress on the Coast Guard's programs for procuring 8 National Security Cutters (NSCs), 25 Offshore Patrol Cutters (OPCs), and 58 Fast Response Cutters (FRCs). The Coast Guard's proposed FY2020 budget requests a total of $657 million in procurement funding for the NSC, OPC, and FRC programs. The issue for Congress is whether to approve, reject, or modify the Coast Guard's funding requests and acquisition strategies for the NSC, OPC, and FRC programs. Congress's decisions on these three programs could substantially affect Coast Guard capabilities and funding requirements, and the U.S. shipbuilding industrial base. The NSC, OPC, and FRC programs have been subjects of congressional oversight for several years, and were previously covered in other CRS reports that are now archived. CRS testified on the Coast Guard's cutter acquisition programs most recently on November 29. The Coast Guard's plans for modernizing its fleet of polar icebreakers are covered in a separate CRS report. Background Older Ships to Be Replaced by NSCs, OPCs, and FRCs The 91 planned NSCs, OPCs, and FRCs are intended to replace 90 older Coast Guard ships—12 high-endurance cutters (WHECs), 29 medium-endurance cutters (WMECs), and 49 110-foot patrol craft (WPBs). The Coast Guard's 12 Hamilton (WHEC-715) class high-endurance cutters entered service between 1967 and 1972. The Coast Guard's 29 medium-endurance cutters include 13 Famous (WMEC-901) class ships that entered service between 1983 and 1991, 14 Reliance (WMEC-615) class ships that entered service between 1964 and 1969, and 2 one-of-a-kind cutters that originally entered service with the Navy in 1944 and 1971 and were later transferred to the Coast Guard. The Coast Guard's 49 110-foot Island (WPB-1301) class patrol boats entered service between 1986 and 1992. Many of these 90 ships are manpower-intensive and increasingly expensive to maintain, and have features that in some cases are not optimal for performing their assigned missions. Some of them have already been removed from Coast Guard service: eight of the Island-class patrol boats were removed from service in 2007 following an unsuccessful effort to modernize and lengthen them to 123 feet; additional Island-class patrol boats are being decommissioned as new FRCs enter service; the one-of-a-kind medium-endurance cutter that originally entered service with the Navy in 1944 was decommissioned in 2011; and Hamilton-class cutters are being decommissioned as new NSCs enter service. A July 2012 Government Accountability Office (GAO) report discusses the generally poor physical condition and declining operational capacity of the Coast Guard's older high-endurance cutters, medium-endurance cutters, and 110-foot patrol craft. Missions of NSCs, OPCs, and FRCs NSCs, OPCs, and FRCs, like the ships they are intended to replace, are to be multimission ships for routinely performing 7 of the Coast Guard's 11 statutory missions, including search and rescue (SAR); drug interdiction; migrant interdiction; ports, waterways, and coastal security (PWCS); protection of living marine resources; other/general law enforcement; and defense readiness operations. Smaller Coast Guard patrol craft and boats contribute to the performance of some of these seven missions close to shore. NSCs, OPCs, and FRCs perform them both close to shore and in the deepwater environment, which generally refers to waters more than 50 miles from shore. NSC Program National Security Cutters ( Figure 1 )—also known as Legend (WMSL-750) class cutters because they are being named for legendary Coast Guard personnel —are the Coast Guard's largest and most capable general-purpose cutters. They are larger and technologically more advanced than Hamilton-class cutters, and are built by Huntington Ingalls Industries' Ingalls Shipbuilding of Pascagoula, MS (HII/Ingalls). The Coast Guard's acquisition program of record (POR)—the service's list, established in 2004, of planned procurement quantities for various new types of ships and aircraft—calls for procuring 8 NSCs as replacements for the service's 12 Hamilton-class high-endurance cutters. The Coast Guard's FY2019 budget submission estimated the total acquisition cost of a nine-ship NSC program at $6.030 billion, or an average of about $670 million per ship. Although the Coast Guard's POR calls for procuring a total of 8 NSCs to replace the 12 Hamilton-class cutters, Congress through FY2018 has funded 11 NSCs, including the 10 th and 11 th in FY2018. The seventh was delivered to the Coast Guard on September 19, 2018, and the eighth was delivered on April 30, 2019. The ninth through 11th are under construction; the ninth is scheduled for delivery in 2021. The Coast Guard's proposed FY2020 budget requests $60 million in procurement funding for the NSC program; this request does not include funding for a 12 th NSC. For additional information on the status and execution of the NSC program from a May 2018 GAO report, see Appendix C . OPC Program Offshore Patrol Cutters ( Figure 2 , Figure 3 , and Figure 4 )—also known as Heritage (WMSM-915) class cutters because they are being named for past cutters that played a significant role in the history of the Coast Guard and the Coast Guard's predecessor organizations —are to be somewhat smaller and less expensive than NSCs, and in some respects less capable than NSCs. In terms of full load displacement, OPCs are to be about 80% as large as NSCs. Coast Guard officials describe the OPC program as the service's top acquisition priority. OPCs are being built by Eastern Shipbuilding Group of Panama City, FL. The Coast Guard's POR calls for procuring 25 OPCs as replacements for the service's 29 medium-endurance cutters. The Coast Guard's FY2019 budget submission estimated the total acquisition cost of the 25 ships at $10.523 billion, or an average of about $421 million per ship. The first OPC was funded in FY2018 and is to be delivered in 2021. The second OPC and long leadtime materials (LLTM) for the third were funded in FY2019. The Coast Guard's proposed FY2020 budget requests $457 million in procurement funding for the third OPC, LLTM for the fourth and fifth, and other program costs. The Coast Guard's Request for Proposal (RFP) for the OPC program, released on September 25, 2012, established an affordability requirement for the program of an average unit price of $310 million per ship, or less, in then-year dollars (i.e., dollars that are not adjusted for inflation) for ships 4 through 9 in the program. This figure represents the shipbuilder's portion of the total cost of the ship; it does not include the cost of government-furnished equipment (GFE) on the ship, or other program costs—such as those for program management, system integration, and logistics—that contribute to the above-cited figure of $421 million per ship. At least eight shipyards expressed interest in the OPC program. On February 11, 2014, the Coast Guard announced that it had awarded Preliminary and Contract Design (P&CD) contracts to three of those eight firms—Bollinger Shipyards of Lockport, LA; Eastern Shipbuilding Group of Panama City, FL; and General Dynamics' Bath Iron Works (GD/BIW) of Bath, ME. On September 15, 2016, the Coast Guard announced that it had awarded the detail design and construction (DD&C) contract to Eastern Shipbuilding. The contract covers detail design and production of up to 9 OPCs and has a potential value of $2.38 billion if all options are exercised. For additional information on the status and execution of the OPC program from a May 2018 GAO report, see Appendix C . FRC Program Fast Response Cutters ( Figure 5 )—also called Sentinel (WPC-1101) class patrol boats because they are being named for enlisted leaders, trailblazers, and heroes of the Coast Guard and its predecessor services of the U.S. Revenue Cutter Service, U.S. Lifesaving Service, and U.S. Lighthouse Service —are considerably smaller and less expensive than OPCs, but are larger than the Coast Guard's older patrol boats. FRCs are built by Bollinger Shipyards of Lockport, LA. The Coast Guard's POR calls for procuring 58 FRCs as replacements for the service's 49 Island-class patrol boats. The POR figure of 58 FRCs is for domestic operations. The Coast Guard, however, operates six Island-class patrol boats in the Persian Gulf area as elements of a Bahrain-based Coast Guard unit, called Patrol Forces Southwest Asia (PATFORSWA), which is the Coast Guard's largest unit outside the United States. Providing FRCs as one-for-one replacements for all six of the Island-class patrol boats in PATFORSWA would result in a combined POR+PATFORSWA figure of 64 FRCs. The Coast Guard's FY2019 budget submission estimated the total acquisition cost of the 58 cutters at $3.748.1 billion, or an average of about $65 million per cutter. A total of 56 FRCs have been funded through FY2019, including six in FY2019. Four of the 56 (two of the FRCs funded in FY2018 and two of the FRC funded in FY2019) are to be used for replacing PATFORSWA cutters and consequently are not counted against the Coast Guard's 58-ship POR for the program. Excluding these four OPCs, a total of 52 FRCs for domestic operations have been funded through FY2019. The 32nd FRC was commissioned into service on May 1, 2019. The Coast Guard's proposed FY2020 budget requests $140 million in acquisition funding for the procurement of two more FRCs for domestic operations. For additional information on the status and execution of the FRC program from a May 2018 GAO report, see Appendix C . Funding in FY2013-FY2020 Budget Submissions Table 1 shows annual requested and programmed acquisition funding for the NSC, OPC, and FRC programs in the Coast Guard's FY2013-FY2020 budget submissions. Actual appropriated figures differ from these requested and projected amounts. Issues for Congress FY2020 Funding for a 12th NSC One issue for Congress is whether to whether to provide funding in FY2020 for the procurement of a 12 th NSC. Funding long leadtime materials (LLTM) for a 12 th NSC in FY2020 could require tens of millions of dollars; fully funding the procurement of a 12 th NSC in FY2020 could require upwards of $700 million. Supporters of providing funding for a 12 th NSC in FY2020 could argue that a total of 12 NSCs would provide one-for-one replacements for the 12 retiring Hamilton-class cutters; that Coast Guard analyses showing a need for no more than 9 NSCs assumed dual crewing of NSCs—something that has not worked as well as expected; and that the Coast Guard's POR record includes only about 61% as many new cutters as the Coast Guard has calculated would be required to fully perform the Coast Guard's anticipated missions in coming years (see " Planned NSC, OPC, and FRC Procurement Quantities " below, as well as Appendix A ). Skeptics or opponents of providing funding for a 12 th NSC in FY2019 could argue that the Coast Guard's POR includes only 8 NSCs, that the Coast Guard's fleet mix analyses (see " Planned NSC, OPC, and FRC Procurement Quantities " below, as well as Appendix A ) have not shown a potential need for more than 9 NSCs, and that in a situation of finite Coast Guard budgets, providing funding for a 12 th NSC might require reducing funding for other FY2020 Coast Guard programs. Whether to Procure Two FRCs or a Higher Number in FY2020 Another issue for Congress is whether to fund the procurement in FY2020 of two FRCs, as requested by the Coast Guard, or some higher number, such as four or six. Supporters of funding the procurement of a higher number could argue that FRCs in past years have been procured at annual rates of up to six per year; that procuring them at higher annual rates reduces their unit procurement costs due to improved production economies of scale; and that procuring four or six FRCs in FY2020 would accelerate the replacement of aging and less-capable Island-class patrol boats with new and more capable FRCs. Opponents of procuring more than two FRCs in FY2020, while acknowledging these points, could argue that in a situation of finite Coast Guard funding, procuring more than two could require offsetting reductions in funding for other FY2020 Coast Guard programs, producing an uncertain net result on overall Coast Guard capabilities, and that replacing Island-class patrol boats, while desirable, is not so urgent a requirement that the procurement of FRCs needs to be accelerated beyond what the Coast Guard plans under its FY2020 budget submission. Annual or Multiyear (Block Buy) Contracting for OPCs Another issue for Congress is whether to acquire OPCs using annual contracting or multiyear contracting. The Coast Guard currently plans to use a contract with options for procuring the first nine OPCs. Although a contract with options may look like a form of multiyear contracting, it operates more like a series of annual contracts. Contracts with options do not achieve the reductions in acquisition costs that are possible with multiyear contracting. Using multiyear contracting involves accepting certain trade-offs. One form of multiyear contracting, called block buy contracting, can be used at the start of a shipbuilding program, beginning with the first ship. (Indeed, this was a principal reason why block buy contracting was in effect invented in FY1998, as the contracting method for procuring the Navy's first four Virginia-class attack submarines.) Section 311 of the Frank LoBiondo Coast Guard Authorization Act of 2018 ( S. 140 / P.L. 115-282 of December 4, 2018) provides permanent authority for the Coast Guard to use block buy contracting with economic order quantity (EOQ) purchases (i.e., up-front batch purchases) of components in its major acquisition programs. The authority is now codified at 14 U.S.C. 1137. CRS estimates that if the Coast Guard were to use block buy contracting with EOQ purchases of components for acquiring the first several OPCs, and either block buy contracting with EOQ purchases or another form of multiyear contracting known as multiyear procurement (MYP) with EOQ purchases for acquiring the remaining ships in the program, the savings on the total acquisition cost of the 25 OPCs (compared to costs under contracts with options) could amount to roughly $1 billion. CRS also estimates that acquiring the first nine ships in the OPC program under the current contract with options could forego roughly $350 million of the $1 billion in potential savings. One potential option for the subcommittee would be to look into the possibility of having the Coast Guard either convert the current OPC contract at an early juncture into a block buy contract with EOQ authority, or, if conversion is not possible, replace the current contract at an early juncture with a block buy contract with EOQ authority. Replacing the current contract with a block buy contract might require recompeting the program, which would require effort on the Coast Guard's part and could create business risk for Eastern Shipbuilding Group, the shipbuilder that holds the current contract. On the other hand, the cost to the Coast Guard of recompeting the program would arguably be small relative to a potential additional savings of perhaps $300 million, and Eastern arguably would have a learning curve advantage in any new competition by virtue of its experience in building the first OPC. Annual OPC Procurement Rate The current procurement profile for the OPC, which reaches a maximum projected annual rate of two ships per year, would deliver OPCs many years after the end of the originally planned service lives of the medium-endurance cutters that they are to replace. Coast Guard officials have testified that the service plans to extend the service lives of the medium-endurance cutters until they are replaced by OPCs. There will be maintenance and repair expenses associated with extending the service lives of medium-endurance cutters, and if the Coast Guard does not also make investments to increase the capabilities of these ships, the ships may have less capability in certain regards than OPCs. One possible option for addressing this situation would be to increase the maximum annual OPC procurement rate from the currently planned two ships per year to three or four ships per year. Doing this could result in the 25 th OPC being delivered about four years or six years sooner, respectively, than under the currently planned maximum rate. Increasing the OPC procurement rate to three or four ships per year would require a substantial increase to the Coast Guard's Procurement, Construction, and Improvements (PC&I) account, an issue discussed in Appendix B . Increasing the maximum procurement rate for the OPC program could, depending on the exact approach taken, reduce OPC unit acquisition costs due to improved production economies of scale. Doubling the rate for producing a given OPC design to four ships per year, for example, could reduce unit procurement costs for that design by as much as 10%, which could result in hundreds of millions of dollars in additional savings in acquisition costs for the program. Increasing the maximum annual procurement rate could also create new opportunities for using competition in the OPC program. Notional alternative approaches for increasing the OPC procurement rate to three or four ships per year include but are not necessarily limited to the following: increasing the production rate to three or four ships per year at Eastern Shipbuilding—an option that would depend on Eastern Shipbuilding's production capacity; introducing a second shipyard to build Eastern's design for the OPC; introducing a second shipyard (such as one of the other two OPC program finalists) to build its own design for the OPC—an option that would result in two OPC classes; or building additional NSCs in the place of some of the OPCs—an option that might include descoping equipment on those NSCs where possible to reduce their acquisition cost and make their capabilities more like that of the OPC. Such an approach would be broadly similar to how the Navy is using a descoped version of the San Antonio (LPD-17) class amphibious ship as the basis for its LPD-17 Flight II (LPD-30) class amphibious ships. Impact of Hurricane Michael on OPC Program at Eastern Shipbuilding Another potential issue for Congress concerns the impact of Hurricane Michael on Eastern Shipbuilding of Panama City, FL, the shipyard that is to build the first nine OPCs. A May 22, 2019, press report states: A Category 5 hurricane that battered Florida's panhandle region last fall, including shipbuilder Eastern Shipbuilding Group, will impact the new medium-endurance cutter ship the company is building for the Coast Guard but at the moment it's unclear what the effects will be on cost and schedule, Coast Guard Commandant Adm. Karl Schultz said on Tuesday [May 21]. Eastern Shipbuilding's analysis of Hurricane Michael's impact on the Offshore Patrol Cutter (OPC) is due to the Coast Guard by May 31, and from there the service expects to have an understanding on the way forward with the program before the end of June, Schultz said in response to questions from Rep. Garret Graves (R-La.), during a hearing hosted by the House Transportation and Infrastructure Coast Guard and Maritime Transportation Subcommittee. He said Eastern Shipbuilding will provide "perspectives" on the cost and schedule and any other impacts. "It's safe to say that we understand the impacts of a Category 5 hurricane on Eastern Shipbuilding Group will have an impact on the OPC program," Shultz said. He expects there to be some "puts and takes" after Eastern Shipbuilding submits its analysis. Rep. Peter DeFazio (D-Ore.), citing a press report earlier in the hearing, said that Sen. Marco Rubio (R-Fla.) has inserted language in a draft disaster assistance bill allowing the Coast Guard and Eastern Shipbuilding to renegotiate the firm fixed-price contract the shipbuilder is working under for the OPC to account for damage to shore side facilities from Hurricane Michael and increased labor costs. DeFazio said he is skeptical of the company's claim, noting, "I'm pretty sure they had insurance," and adding that "I question whether or not this has something to do with their original bid, which some thought was low." He also said he has concerns that a former Coast Guard Commandant that works for Eastern Shipbuilding has said he'll have authority to negotiate with his former service. Retired Adm. Robert Papp, the 24th commandant of the Coast Guard, runs Eastern Shipbuilding's Washington, D.C., operations. Eastern Shipbuilding did not respond to a query from Defense Daily about impacts to the OPC program from Hurricane Michael and any relief it may need from the current contract. Schultz said that the OPC contract can't be renegotiated without legislative authorities from Congress. He said the Coast Guard, in response to an "ask" from Congress, provided language to help with drafting the proposed legislation related to the OPC in the disaster bill. Schultz also said that the Coast Guard is not involved in Eastern Shipbuilding's lobbying efforts with Congress. A May 17, 2019, press report stated: As the Senate continues to negotiate the particulars of the supplemental disaster relief bill that seems poised to go to a vote next week, a new provision to save something many likely didn't know was at risk has been added. A new line in the draft bill will let Eastern Shipbuilding Group renegotiate its contract with the U.S. Coast Guard to build up to 25 new off-shore patrol cutters. "Under the old contract we were prohibited from negotiating for additional money for increased costs," said Admiral Bob Papp, President of Washington Operations for Eastern. That meant that after Hurricane Michael, they would be unable to negotiate with the Coast Guard to help cover a slew of new costs associated with both the project and the hurricane, such as the damage from the Category 5 storm that needed repairs, the prolonged schedule and the "skyrocketing" costs of labor, Papp said. The contract—the largest in the Coast Guard's history at more than $10 billion—didn't account for a natural disaster. It was going to be hard, Papp said, for Eastern to complete the project and to "stay healthy" without some negotiations. At stake in the community are 900 planned jobs and up to 5,000 indirect jobs officials believe will help jump-start the region's manufacturing economy. But an official in Sen. Marco Rubio's office said the latest version of the supplemental disaster relief bill now includes a provision that will allow negotiations. Rubio, according to the official, spoke with the President Donald Trump on Air Force One following the president's rally in Panama City Beach last week, helping to secure the language that made it into the bill. "We've waited far too long (for disaster relief), and we're also involved in some Florida-specific issues," Rubio said in a recent video. "For example, the Hurricane had an impact on a very important Coast Guard project that's in Northwest Florida and we want to make sure that project stays on target and continues to feed jobs because Northwest Florida desperately needs those jobs to recover. We're very hopeful. Cautiously optimistic, that next week can be a very good week." Papp thanked the area's congressional delegation for stepping up to advocate for this project, saying the company is "honored and delighted" to receive help. A January 28, 2019, press release from Eastern Shipbuilding stated: Panama City, FL, Eastern Shipbuilding Group [ESG] reports that steel cutting for the first offshore patrol cutter (OPC), Coast Guard Cutter ARGUS (WMSM-915), commenced on January 7, 2019 at Eastern's facilities. ESG successfully achieved this milestone even with sustaining damage and work interruption due to Hurricane Michael. The cutting of steel will start the fabrication and assembly of the cutter's hull, and ESG is to complete keel laying of ARGUS later this year. Additionally, ESG completed the placement of orders for all long lead time materials for OPC #2, Coast Guard Cutter CHASE (WMSM-916). Eastern's President Mr. Joey D'Isernia noted the following: "Today represents a monumental day and reflects the dedication of our workforce - the ability to overcome and perform even under the most strenuous circumstances and impacts of Hurricane Michael. ESG families have been dramatically impacted by the storm, and we continue to recover and help rebuild our shipyard and community. I cannot overstate enough how appreciative we are of all of our subcontractors and vendors contributions to our families during the recovery as well as the support we have received from our community partners. Hurricane Michael may have left its marks but it only strengthened our resolve to build the most sophisticated, highly capable national assets for the Coast Guard. Today's success is just the beginning of the construction of the OPCs at ESG by our dedicated team of shipbuilders and subcontractors for our customer and partner, the United States Coast Guard. We are excited for what will be a great 2019 for Eastern Shipbuilding Group and Bay County, Florida." A November 1, 2018, statement from Eastern Shipbuilding states that the firm resumed operations at both of its two main shipbuilding facilities just two weeks after Hurricane Michael devastated Panama City Florida and the surrounding communities…. … the majority of ESG's [Eastern Shipbuilding Group's] workforce has returned to work very quickly despite the damage caused by the storm. "Our employees are a resourceful and resilient group of individuals with the drive to succeed in the face of adversity. This has certainly been proven by their ability to bounce back over the two weeks following the storm. Our employees have returned to work much faster than anticipated and brought with them an unbreakable spirit, that I believe sets this shipyard and our community apart" said [Eastern Shipbuilding] President Joey D'Isernia. "Today, our staffing levels exceed 80% of our pre-Hurricane Michael levels and is rising daily." Immediately following the storm, ESG set out on an aggressive initiative to locate all of its employees and help get them back on the job as soon as practical after they took necessary time to secure the safety and security of their family and home. Together with its network of friends, partners, and customers in the maritime community, ESG organized daily distribution of meals and goods to employees in need. Additionally, ESG created an interest free deferred payback loan program for those employees in need and has organized Go Fund Me account to help those employees hardest hit by the storm. ESG also knew temporary housing was going to be a necessity in the short term and immediately built a small community located on greenfield space near its facilities for those employees with temporary housing needs. ESG has worked closely with its federal, state and commercial partners over the past two weeks to provide updates on the shipyard as well as on projects currently under construction. Power was restored to ESG's Nelson Facility on 10-21-18 and at ESG's Allanton Facility on 10-24-18 and production of vessels under contract is ramping back up. Additionally, all of the ESG personnel currently working on the US Coast Guard's Offshore Patrol Cutter contract have returned to work…. "We are grateful to our partners and the maritime business community as a whole for their support and confidence during the aftermath of this historic storm. Seeing our incredible employees get back to building ships last week was an inspiration," said D'Isernia. "While there is no doubt that the effects of Hurricane Michael will linger with our community for years to come, I can say without reservation that we are open for business and excited about delivering quality vessels to our loyal customers." An October 22, 2018, press report states the following: U.S. Coast Guard officials and Eastern Shipbuilding Group are still assessing the damage caused by deadly category 4 Hurricane Michael to the Panama City, Fla.-based yard contracted to build the new class of Offshore Patrol Cutters. On September 28, the Coast Guard awarded Eastern Shipbuilding a contract to build the future USCGC Argus (WMSM-915), the first offshore patrol cutter (OPC). The yard was also set to build a second OPC, the future USCGC Chase (WMSM-916). Eastern Shipbuilding's contract is for nine OPCs, with options for two additional cutters. Ultimately, the Coast Guard plans to buy 25 OPCs. However, just as the yard was preparing to build Argus , Hurricane Michael struck the Florida Panhandle near Panama City on October 10. Workers from the shipyard and Coast Guard project managers evacuated and are just now returning to assess damage to the yard facilities, Brian Olexy, communications manager for the Coast Guard's Acquisitions Directorate, told USNI News. "Right now we haven't made any decisions yet on shifts in schedule," Olexy said…. Since the yard was just the beginning stages of building Argus , Olexy said the hull wasn't damaged. "No steel had been cut," he said. Eastern Shipbuilding is still in the process of assessing damage to the yard and trying to reach its workforce. Many employees evacuated the area and have not returned, or are in the area but lost their homes, Eastern Shipbuilding spokesman Justin Smith told USNI News. At first, about 200 workers returned to work, but by week's end about 500 were at the yard, Smith said. The company is providing meals, water, and ice for its workforce. "Although we were significantly impacted by this catastrophic weather event, we are making great strides each day thanks to the strength and resiliency of our employees," Joey D'Isernia, president of Eastern Shipbuilding, said in a statement. Planned NSC, OPC, and FRC Procurement Quantities Another issue for Congress concerns the Coast Guard's planned NSC, OPC, and FRC procurement quantities. The POR's planned force of 91 NSCs, OPCs, and FRCs is about equal in number to the Coast Guard's legacy force of 90 high-endurance cutters, medium-endurance cutters, and 110-foot patrol craft. NSCs, OPCs, and FRCs, moreover, are to be individually more capable than the older ships they are to replace. Even so, Coast Guard studies have concluded that the planned total of 91 NSCs, OPCs, and FRCs would provide 61% of the cutters that would be needed to fully perform the service's statutory missions in coming years, in part because Coast Guard mission demands are expected to be greater in coming years than they were in the past. For further discussion of this issue, about which CRS has testified and reported on since 2005, see Appendix A . Legislative Activity in 2019 Summary of Appropriations Action on FY2020 Acquisition Funding Request Table 2 summarizes appropriations action on the Coast Guard's request for FY2020 acquisition funding for the NSC, OPC, and FRC programs. Appendix A. Planned NSC, OPC, and FRC Procurement Quantities This appendix provides further discussion on the issue of the Coast Guard's planned NSC, OPC, and FRC procurement quantities. Overview The Coast Guard's program of record for NSCs, OPCs, and FRCs includes only about 61% as many cutters as the Coast Guard calculated in 2011 would be needed to fully perform its projected future missions. The Coast Guard's planned force levels for NSCs, OPCs, and FRCs have remained unchanged since 2004. In contrast, the Navy since 2004 has adjusted its ship force-level goals eight times in response to changing strategic and budgetary circumstances. Although the Coast Guard's strategic situation and resulting mission demands may not have changed as much as the Navy's have since 2004, the Coast Guard's budgetary circumstances may have changed since 2004. The 2004 program of record was heavily conditioned by Coast Guard expectations in 2004 about future funding levels in the PC&I account. Those expectations may now be different, as suggested by the willingness of Coast Guard officials in 2017 to begin regularly mentioning the need for an PC&I funding level of $2 billion per year (see Appendix B ). It can also be noted that continuing to, in effect, use the Coast Guard's 2004 expectations of future funding levels for the PC&I account as an implicit constraint on planned force levels for NSCs, OPCs, and FRCs can encourage an artificially narrow view of Congress's options regarding future Coast Guard force levels and associated funding levels, depriving Congress of agency in the exercise of its constitutional power to provide for the common defense and general welfare of the United States, and to set funding levels and determine the composition of federal spending. 2009 Coast Guard Fleet Mix Analysis The Coast Guard estimated in 2009 that with the POR's planned force of 91 NSCs, OPCs, and FRCs, the service would have capability or capacity gaps in 6 of its 11 statutory missions—search and rescue (SAR); defense readiness; counterdrug operations; ports, waterways, and coastal security (PWCS); protection of living marine resources (LMR); and alien migrant interdiction operations (AMIO). The Coast Guard judges that some of these gaps would be "high risk" or "very high risk." Public discussions of the POR frequently mention the substantial improvement that the POR force would represent over the legacy force. Only rarely, however, have these discussions explicitly acknowledged the extent to which the POR force would nevertheless be smaller in number than the force that would be required, by Coast Guard estimate, to fully perform the Coast Guard's statutory missions in coming years. Discussions that focus on the POR's improvement over the legacy force while omitting mention of the considerably larger number of cutters that would be required, by Coast Guard estimate, to fully perform the Coast Guard's statutory missions in coming years could encourage audiences to conclude, contrary to Coast Guard estimates, that the POR's planned force of 91 cutters would be capable of fully performing the Coast Guard's statutory missions in coming years. In a study completed in December 2009 called the Fleet Mix Analysis (FMA) Phase 1, the Coast Guard calculated the size of the force that in its view would be needed to fully perform the service's statutory missions in coming years. The study refers to this larger force as the objective fleet mix. Table A-1 compares planned numbers of NSCs, OPCs, and FRCs in the POR to those in the objective fleet mix. As can be seen in Table A-1 , the objective fleet mix includes 66 additional cutters, or about 73% more cutters than in the POR. Stated the other way around, the POR includes about 58% as many cutters as the 2009 FMA Phase I objective fleet mix. As intermediate steps between the POR force and the objective fleet mix, FMA Phase 1 calculated three additional forces, called FMA-1, FMA-2, and FMA-3. (The objective fleet mix was then relabeled FMA-4.) Table A-2 compares the POR to FMAs 1 through 4. FMA-1 was calculated to address the mission gaps that the Coast Guard judged to be "very high risk." FMA-2 was calculated to address both those gaps and additional gaps that the Coast Guard judged to be "high risk." FMA-3 was calculated to address all those gaps, plus gaps that the Coast Guard judged to be "medium risk." FMA-4—the objective fleet mix—was calculated to address all the foregoing gaps, plus the remaining gaps, which the Coast Guard judge to be "low risk" or "very low risk." Table A-3 shows the POR and FMAs 1 through 4 in terms of their mission performance gaps. Figure A-1 , taken from FMA Phase 1, depicts the overall mission capability/performance gap situation in graphic form. It appears to be conceptual rather than drawn to precise scale. The black line descending toward 0 by the year 2027 shows the declining capability and performance of the Coast Guard's legacy assets as they gradually age out of the force. The purple line branching up from the black line shows the added capability from ships and aircraft to be procured under the POR, including the 91 planned NSCs, OPCs, and FRCs. The level of capability to be provided when the POR force is fully in place is the green line, labeled "2005 Mission Needs Statement." As can be seen in the graph, this level of capability is substantially below a projection of Coast Guard mission demands made after the terrorist attacks of September 11, 2001 (the red line, labeled "Post-9/11 CG Mission Demands"), and even further below a Coast Guard projection of future mission demands (the top dashed line, labeled "Future Mission Demands"). The dashed blue lines show future capability levels that would result from reducing planned procurement quantities in the POR or executing the POR over a longer time period than originally planned. FMA Phase 1 was a fiscally unconstrained study, meaning that the larger force mixes shown in Table A-2 were calculated primarily on the basis of their capability for performing missions, rather than their potential acquisition or life-cycle operation and support (O&S) costs. Although the FMA Phase 1 was completed in December 2009, the figures shown in Table A-2 were generally not included in public discussions of the Coast Guard's future force structure needs until April 2011, when GAO presented them in testimony. GAO again presented them in a July 2011 report. The Coast Guard completed a follow-on study, called Fleet Mix Analysis (FMA) Phase 2, in May 2011. Among other things, FMA Phase 2 includes a revised and updated objective fleet mix called the refined objective mix. Table A-4 compares the POR to the objective fleet mix from FMA Phase 1 and the refined objective mix from FMA Phase 2. As can be seen in Table A-4 , compared to the objective fleet mix from FMA Phase 1, the refined objective mix from FMA Phase 2 includes 49 OPCs rather than 57. The refined objective mix includes 58 additional cutters, or about 64% more cutters than in the POR. Stated the other way around, the POR includes about 61% as many cutters as the refined objective mix. Compared to the POR, the larger force mixes shown in Table A-2 and Table A-4 would be more expensive to procure, operate, and support than the POR force. Using the average NSC, OPC, and FRC procurement cost figures presented earlier (see " Background "), procuring the 58 additional cutters in the Refined Objective Mix from FMA Phase 2 might cost an additional $10.7 billion, of which most (about $7.8 billion) would be for the 24 additional FRCs. (The actual cost would depend on numerous factors, such as annual procurement rates.) O&S costs for these 58 additional cutters over their life cycles (including crew costs and periodic ship maintenance costs) would require billions of additional dollars. The larger force mixes in the FMA Phase 1 and 2 studies, moreover, include not only increased numbers of cutters, but also increased numbers of Coast Guard aircraft. In the FMA Phase 1 study, for example, the objective fleet mix included 479 aircraft—93% more than the 248 aircraft in the POR mix. Stated the other way around, the POR includes about 52% as many aircraft as the objective fleet mix. A decision to procure larger numbers of cutters like those shown in Table A-2 and Table A-4 might thus also imply a decision to procure, operate, and support larger numbers of Coast Guard aircraft, which would require billions of additional dollars. The FMA Phase 1 study estimated the procurement cost of the objective fleet mix of 157 cutters and 479 aircraft at $61 billion to $67 billion in constant FY2009 dollars, or about 66% more than the procurement cost of $37 billion to $40 billion in constant FY2009 dollars estimated for the POR mix of 91 cutters and 248 aircraft. The study estimated the total ownership cost (i.e., procurement plus life-cycle O&S cost) of the objective fleet mix of cutters and aircraft at $201 billion to $208 billion in constant FY2009 dollars, or about 53% more than the total ownership cost of $132 billion to $136 billion in constant FY2009 dollars estimated for POR mix of cutters and aircraft. A December 7, 2015, press report states the following: The Coast Guard's No. 2 officer said the small size and advanced age of its fleet is limiting the service's ability to carry out crucial missions in the Arctic and drug transit zones or to meet rising calls for presence in the volatile South China Sea. "The lack of surface vessels every day just breaks my heart," VADM Charles Michel, the Coast Guard's vice commandant, said Dec. 7. Addressing a forum on American Sea Power sponsored by the U.S. Naval Institute at the Newseum, Michel detailed the problems the Coast Guard faces in trying to carry out its missions of national security, law enforcement and maritime safety because of a lack of resources. "That's why you hear me clamoring for recapitalization," he said. Michel noted that China's coast guard has a lot more ships than the U.S. Coast Guard has, including many that are larger than the biggest U.S. cutter, the 1,800-ton [sic:4,800-ton] National Security Cutter. China is using those white-painted vessels rather than "gray-hull navy" ships to enforce its claims to vast areas of the South China Sea, including reefs and shoals claimed by other nations, he said. That is a statement that the disputed areas are "so much our territory, we don't need the navy. That's an absolutely masterful use of the coast guard," he said. The superior numbers of Chinese coast guard vessels and its plans to build more is something, "we have to consider when looking at what we can do in the South China Sea," Michel said. Although they have received requests from the U.S. commanders in the region for U.S. Coast Guard cutters in the South China Sea, "the commandant had to say 'no'. There's not enough to go around," he said. Potential oversight questions for Congress include the following: Under the POR force mix, how large a performance gap, precisely, would there be in each of the missions shown in Table A-3 ? What impact would these performance gaps have on public safety, national security, and protection of living marine resources? How sensitive are these performance gaps to the way in which the Coast Guard translates its statutory missions into more precise statements of required mission performance? Given the performance gaps shown in Table A-3 , should planned numbers of Coast Guard cutters and aircraft be increased, or should the Coast Guard's statutory missions be reduced, or both? How much larger would the performance gaps in Table A-3 be if planned numbers of Coast Guard cutters and aircraft are reduced below the POR figures? Has the executive branch made sufficiently clear to Congress the difference between the number of ships and aircraft in the POR force and the number that would be needed to fully perform the Coast Guard's statutory missions in coming years? Why has public discussion of the POR focused mostly on the capability improvement it would produce over the legacy force and rarely on the performance gaps it would have in the missions shown in Table A-3 ? Appendix B. Funding Levels in PC&I Account This appendix provides background information on funding levels in the Coast Guard's Procurement, Construction, and Improvements (PC&I) account. Overview As shown in Table B-1 , the FY2013 budget submission programmed an average of about $1.5 billion per year in the PC&I account. As also shown in the table, the FY2014-FY2016 budget submissions reduced that figure to between $1 billion and $1.2 billion per year. The Coast Guard has testified that funding the PC&I account at a level of about $1 billion to $1.2 billion per year would make it difficult to fund various Coast Guard acquisition projects, including a new polar icebreaker and improvements to Coast Guard shore installations. Coast Guard plans call for procuring OPCs at an eventual rate of two per year. If each OPC costs roughly $400 million, procuring two OPCs per year in an PC&I account of about $1 billion to $1.2 billion per year, as programmed under the FY2014-FY2016 budget submissions, would leave about $200 million to $400 million per year for all other PC&I-funded programs. Since 2017, Coast Guard officials have been stating more regularly what they stated only infrequently in earlier years: that executing the Coast Guard's various acquisition programs fully and on a timely basis would require the PC&I account to be funded in coming years at a level of about $2 billion per year. Statements from Coast Guard officials on this issue in past years have sometimes put this figure as high as about $2.5 billion per year. Using Past PC&I Funding Levels as a Guide for Future PC&I Funding Levels In assessing future funding levels for executive branch agencies, a common practice is to assume or predict that the figure in coming years will likely be close to where it has been in previous years. While this method can be of analytical and planning value, for an agency like the Coast Guard, which goes through periods with less acquisition of major platforms and periods with more acquisition of major platforms, this approach might not always be the best approach, at least for the PC&I account. More important, in relation to maintaining Congress's status as a co-equal branch of government, including the preservation and use of congressional powers and prerogatives, an analysis that assumes or predicts that future funding levels will resemble past funding levels can encourage an artificially narrow view of congressional options regarding future funding levels, depriving Congress of agency in the exercise of its constitutional power to set funding levels and determine the composition of federal spending. Past Coast Guard Statements About Required PC&I Funding Level At an October 4, 2011, hearing on the Coast Guard's major acquisition programs before the Coast Guard and Maritime Transportation subcommittee of the House Transportation and Infrastructure Committee, the following exchange occurred: REPRESENATIVE FRANK LOBIONDO: Can you give us your take on what percentage of value must be invested each year to maintain current levels of effort and to allow the Coast Guard to fully carry out its missions? ADMIRAL ROBERT J. PAPP, COMMANDANT OF THE COAST GUARD: I think I can, Mr. Chairman. Actually, in discussions and looking at our budget—and I'll give you rough numbers here, what we do now is we have to live within the constraints that we've been averaging about $1.4 billion in acquisition money each year. If you look at our complete portfolio, the things that we'd like to do, when you look at the shore infrastructure that needs to be taken care of, when you look at renovating our smaller icebreakers and other ships and aircraft that we have, we've done some rough estimates that it would really take close to about $2.5 billion a year, if we were to do all the things that we would like to do to sustain our capital plant. So I'm just like any other head of any other agency here, as that the end of the day, we're given a top line and we have to make choices and tradeoffs and basically, my tradeoffs boil down to sustaining frontline operations balancing that, we're trying to recapitalize the Coast Guard and there's where the break is and where we have to define our spending. An April 18, 2012, blog entry stated the following: If the Coast Guard capital expenditure budget remains unchanged at less than $1.5 billion annually in the coming years, it will result in a service in possession of only 70 percent of the assets it possesses today, said Coast Guard Rear Adm. Mark Butt. Butt, who spoke April 17 [2012] at [a] panel [discussion] during the Navy League Sea Air Space conference in National Harbor, Md., echoed Coast Guard Commandant Robert Papp in stating that the service really needs around $2.5 billion annually for procurement. At a May 9, 2012, hearing on the Coast Guard's proposed FY2013 budget before the Homeland Security subcommittee of the Senate Appropriations Committee, Admiral Papp testified, "I've gone on record saying that I think the Coast Guard needs closer to $2 billion dollars a year [in acquisition funding] to recapitalize—[to] do proper recapitalization." At a May 14, 2013, hearing on the Coast Guard's proposed FY2014 budget before the Homeland Security Subcommittee of the Senate Appropriations Committee, Admiral Papp stated the following regarding the difference between having about $1.0 billion per year rather than about $1.5 billion per year in the PC&I account: Well, Madam Chairman, $500 million—a half a billion dollars—is real money for the Coast Guard. So, clearly, we had $1.5 billion in the [FY]13 budget. It doesn't get everything I would like, but it—it gave us a good start, and it sustained a number of projects that are very important to us. When we go down to the $1 billion level this year, it gets my highest priorities in there, but we have to either terminate or reduce to minimum order quantities for all the other projects that we have going. If we're going to stay with our program of record, things that have been documented that we need for our service, we're going to have to just stretch everything out to the right. And when we do that, you cannot order in economic order quantities. It defers the purchase. Ship builders, aircraft companies—they have to figure in their costs, and it inevitably raises the cost when you're ordering them in smaller quantities and pushing it off to the right. Plus, it almost creates a death spiral for the Coast Guard because we are forced to sustain older assets—older ships and older aircraft—which ultimately cost us more money, so it eats into our operating funds, as well, as we try to sustain these older things. So, we'll do the best we can within the budget. And the president and the secretary have addressed my highest priorities, and we'll just continue to go on the—on an annual basis seeing what we can wedge into the budget to keep the other projects going. At a March 12, 2014, hearing on the Coast Guard's proposed FY2015 budget before the Homeland Security subcommittee of the House Appropriations Committee, Admiral Papp stated the following: Well, that's what we've been struggling with, as we deal with the five-year plan, the capital investment plan, is showing how we are able to do that. And it will be a challenge, particularly if it sticks at around $1 billion [per year]. As I've said publicly, and actually, I said we could probably—I've stated publicly before that we could probably construct comfortably at about 1.5 billion [dollars] a year. But if we were to take care of all the Coast Guard's projects that are out there, including shore infrastructure that that fleet that takes care of the Yemen [sic: inland] waters is approaching 50 years of age, as well, but I have no replacement plan in sight for them because we simply can't afford it. Plus, we need at some point to build a polar icebreaker. Darn tough to do all that stuff when you're pushing down closer to 1 billion [dollars per year], instead of 2 billion [dollars per year]. As I said, we could fit most of that in at about the 1.5 billion [dollars per year] level, but the projections don't call for that. So we are scrubbing the numbers as best we can. At a March 24, 2015, hearing on the Coast Guard's proposed FY2016 budget before the Homeland Security subcommittee of the House Appropriations Committee, Admiral Paul Zukunft, Admiral Papp's successor as Commandant of the Coast Guard, stated the following: I look back to better years in our acquisition budget when we had a—an acquisition budget of—of $1.5 billion. That allows me to move these programs along at a much more rapid pace and, the quicker I can build these at full-rate production, the less cost it is in the long run as well. But there's an urgent need for me to be able to deliver these platforms in a timely and also in an affordable manner. But to at least have a reliable and a predictable acquisition budget would make our work in the Coast Guard much easier. But when we see variances of—of 30, 40% over a period of three or four years, and not knowing what the Budget Control Act may have in store for us going on, yes, we are treading water now but any further reductions, and now I am—I am beyond asking for help. We are taking on water. An April 13, 2017, press report states the following (emphasis added): Coast Guard Commandant Adm. Paul Zukunft on Wednesday [April 12] said that for the Coast Guard to sustain its recapitalization plans and operations the service needs a $2 billion annual acquisition budget that grows modestly overtime to keep pace with inflation. The Coast Guard needs a "predictable, reliable" acquisition budget "and within that we need 5 percent annual growth to our operations and maintenance (O&M) accounts," Zukunft told reporters at a Defense Writers Group breakfast. Inflation will clip 2 to 3 percent from that, but "at 5 percent or so it puts you on a moderate but positive glide slope so you can execute, so you can build the force," he said. In an interview published on June 1, 2017, Zukunft said the following (emphasis added): We cannot be more relevant than we are now. But what we need is predictable funding. We have been in over 16 continuing resolutions since 2010. I need stable and repeatable funding. An acquisition budget with a floor of $2 billion. Our operating expenses as I said, they've been funded below the Budget Control Act floor for the past five years. I need 5 percent annualized growth over the next five years and beyond to start growing some of this capability back. But more importantly, we [need] more predictable, more reliable funding so we can execute what we need to do to carry out the business of the world's best Coast Guard. Appendix C. Additional Information on Status and Execution of NSC, OPC, and FRC Programs from May 2018 GAO Report This appendix presents additional information on the status and execution of the NSC, OPC, and FRC programs from a May 2018 GAO report reviewing DHS acquisition programs. NSC Program Regarding the NSC program, the May 2018 GAO report states the following: DHS's Under Secretary for Management (USM) directed the USCG to complete follow-on operational test and evaluation (OT&E) by March 2019. According to USCG officials, the program's OTA began follow-on OT&E in October 2017, which will test unmet key performance parameters (KPP) and address deficiencies found during prior testing. The NSC completed initial operational testing in 2014, but did not fully demonstrate 7 of its 19 KPPs, including those related to unmanned aircraft and cutter-boat deployment in rough seas. According to USCG officials, operators have since demonstrated these KPPs during USCG operations. For example, USCG officials stated that they successfully demonstrated operations of a prototype unmanned aircraft on an NSC. However, the USCG will not evaluate the NSC's unmanned aircraft KPP until the unmanned aircraft undergoes initial OT&E, currently planned for June 2019. In addition, the NSC will be the first USCG asset to undergo cybersecurity testing. However, this test has been delayed over a year with the final cyber test event scheduled for August 2018 because of a change in NSC operational schedules, among other things. The DHS USM also directed the USCG to complete a study to determine the root cause of the NSC's propulsion system issues by December 2017; however, as of January 2018, the study was not yet complete. GAO previously reported on these issues—including high engine temperatures, cracked cylinder heads, and overheating generator bearings that were impacting missions—in January 2016.... The USCG initially planned to implement a crew rotational concept in which crews would rotate while NSCs were underway to achieve a goal of 230 days away from the cutter's homeport. In February 2018, USCG officials told GAO they abandoned the crew rotational concept because the concept did not provide the USCG with the expected return on investment. Instead, USCG officials said a new plan has been implemented that does not rotate crew and is anticipated to increase the days away from home port from the current capability of 185 days to 200 days. OPC Program Regarding the OPC program, the May 2018 GAO report states the following: DHS approved six key performance parameters (KPP) for the OPC related to the ship's operating range and duration, crew size, interoperability and maneuverability, and ability to support operations in moderate to rough seas. The first OPC has not yet been constructed, so the USCG has not yet demonstrated whether it can meet these KPPs. The USCG plans to use engineering reviews, and developmental and operational tests throughout the acquisition to measure the OPC's performance. USCG officials told GAO that the program completed an early operational assessment on the basic ship design in August 2017, which entailed a review of the current design plans. The program plans to refine the ship's design as needed based on preliminary test results. However, as of December 2017, USCG officials had not received the results of this assessment. The USCG plans to conduct initial operational test and evaluation (OT&E) on the first OPC in fiscal year 2023. However, the test results from initial OT&E will not be available to inform key decisions. For example, the results will not be available to inform the decision to build 2 OPCs per year—which USCG officials said is scheduled to begin in fiscal year 2021. Without test results to inform these key decisions, the USCG must make substantial commitments prior to knowing how well the ship will meet its requirements.... The USCG is in the process of completing the design of the OPC before starting construction, which is in-line with GAO shipbuilding best practices. In addition, USCG officials stated that the program is using state-of-the-market technology that has been proven on other ships as opposed to state-of-the-art technology, which lowers the risk of the program. FRC Program Regarding the FRC program, the May 2018 GAO report states the following: In February 2017, DHS's Director, Office of Test and Evaluation (DOT&E) assessed the results from the program's July 2016 follow-on operational test and evaluation (OT&E) and determined that • the program met its six key performance parameters, and • the FRC was operationally effective and suitable. During follow-on OT&E, the OTA found that several deficiencies from the program's initial OT&E had been corrected. For example, the OTA closed a severe deficiency related to the engines based on modifications to the FRC's main diesel engines. However, five major deficiencies remain. According to USCG officials, the remaining deficiencies are related to ergonomics (e.g., improving the working environment for operators) and issues with stowage space. USCG officials stated that they plan to resolve the remaining deficiencies by fiscal year 2020. DOT&E noted that these deficiencies do not prevent mission completion or present a danger to personnel, but recommended that they be resolved as soon as possible. USCG officials indicated that they plan to resolve the remaining deficiencies through engineering or other changes.... The USCG continues to work with the contractor—Bollinger Shipyards, LLC—to address issues covered by the warranty and acceptance clauses for each ship. For example, 18 engines—9 operational engines and 9 spare engines—have been replaced under the program's warranty. According to USCG documentation, 65 percent of the current issues with the engines have been resolved through retrofits; however, additional problems with the engines have been identified since our April 2017 review. For example, issues with water pump shafts are currently being examined through a root cause analysis and will be redesigned and are scheduled to undergo retrofits starting in December 2018. We previously found that the FRC's warranty resulted in improved cost and quality by requiring the shipbuilder to pay for the repair of defects. As of September 2017, USCG officials said the replacements and retrofits completed under the program's warranty allowed the USCG to avoid an estimated $104 million in potential unplanned costs—of which $63 million is related to the engines. For a discussion of some considerations relating to warranties in shipbuilding and other acquisition programs, see Appendix D . Appendix D. Some Considerations Relating to Warranties in Shipbuilding and Other Acquisition Programs This appendix presents some considerations relating to warranties in shipbuilding and other defense acquisition. In discussions of Navy and Coast Guard shipbuilding, one question that sometimes arises is whether including a warranty in a shipbuilding contract is preferable to not including one. Including a warranty in a shipbuilding contract (or a contract for building some other kind of military end item), while potentially valuable, might not always be preferable to not including one—it depends on the circumstances of the acquisition, and it is not necessarily a valid criticism of an acquisition program to state that it is using a contract that does not include a warranty (or a weaker form of a warranty rather than a stronger one). Including a warranty generally shifts to the contractor the risk of having to pay for fixing problems with earlier work. Although that in itself could be deemed desirable from the government's standpoint, a contractor negotiating a contract that will have a warranty will incorporate that risk into its price, and depending on how much the contractor might charge for doing that, it is possible that the government could wind up paying more in total for acquiring the item (including fixing problems with earlier work on that item) than it would have under a contract without a warranty. When a warranty is not included in the contract and the government pays later on to fix problems with earlier work, those payments can be very visible, which can invite critical comments from observers. But that does not mean that including a warranty in the contract somehow frees the government from paying to fix problems with earlier work. In a contract that includes a warranty, the government will indeed pay something to fix problems with earlier work—but it will make the payment in the less-visible (but still very real) form of the up-front charge for including the warranty, and that charge might be more than what it would have cost the government, under a contract without a warranty, to pay later on for fixing those problems. From a cost standpoint, including a warranty in the contract might or might not be preferable, depending on the risk that there will be problems with earlier work that need fixing, the potential cost of fixing such problems, and the cost of including the warranty in the contract. The point is that the goal of avoiding highly visible payments for fixing problems with earlier work and the goal of minimizing the cost to the government of fixing problems with earlier work are separate and different goals, and that pursuing the first goal can sometimes work against achieving the second goal. The Department of Defense's guide on the use of warranties states the following: Federal Acquisition Regulation (FAR) 46.7 states that "the use of warranties is not mandatory." However, if the benefits to be derived from the warranty are commensurate with the cost of the warranty, the CO [contracting officer] should consider placing it in the contract. In determining whether a warranty is appropriate for a specific acquisition, FAR Subpart 46.703 requires the CO to consider the nature and use of the supplies and services, the cost, the administration and enforcement, trade practices, and reduced requirements. The rationale for using a warranty should be documented in the contract file.... In determining the value of a warranty, a CBA [cost-benefit analysis] is used to measure the life cycle costs of the system with and without the warranty. A CBA is required to determine if the warranty will be cost beneficial. CBA is an economic analysis, which basically compares the Life Cycle Costs (LCC) of the system with and without the warranty to determine if warranty coverage will improve the LCCs. In general, five key factors will drive the results of the CBA: cost of the warranty + cost of warranty administration + compatibility with total program efforts + cost of overlap with Contractor support + intangible savings. Effective warranties integrate reliability, maintainability, supportability, availability, and life-cycle costs. Decision factors that must be evaluated include the state of the weapon system technology, the size of the warranted population, the likelihood that field performance requirements can be achieved, and the warranty period of performance. Summary:	null	96	65,374	65,376	65,376	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction This report provides background information and potential oversight issues for Congress on the Coast Guard's programs for procuring 8 National Security Cutters (NSCs), 25 Offshore Patrol Cutters (OPCs), and 58 Fast Response Cutters (FRCs). The Coast Guard's proposed FY2020 budget requests a total of $657 million in procurement funding for the NSC, OPC, and FRC programs. The issue for Congress is whether to approve, reject, or modify the Coast Guard's funding requests and acquisition strategies for the NSC, OPC, and FRC programs. Congress's decisions on these three programs could substantially affect Coast Guard capabilities and funding requirements, and the U.S. shipbuilding industrial base. The NSC, OPC, and FRC programs have been subjects of congressional oversight for several years, and were previously covered in other CRS reports that are now archived. CRS testified on the Coast Guard's cutter acquisition programs most recently on November 29. The Coast Guard's plans for modernizing its fleet of polar icebreakers are covered in a separate CRS report. Background Older Ships to Be Replaced by NSCs, OPCs, and FRCs The 91 planned NSCs, OPCs, and FRCs are intended to replace 90 older Coast Guard ships—12 high-endurance cutters (WHECs), 29 medium-endurance cutters (WMECs), and 49 110-foot patrol craft (WPBs). The Coast Guard's 12 Hamilton (WHEC-715) class high-endurance cutters entered service between 1967 and 1972. The Coast Guard's 29 medium-endurance cutters include 13 Famous (WMEC-901) class ships that entered service between 1983 and 1991, 14 Reliance (WMEC-615) class ships that entered service between 1964 and 1969, and 2 one-of-a-kind cutters that originally entered service with the Navy in 1944 and 1971 and were later transferred to the Coast Guard. The Coast Guard's 49 110-foot Island (WPB-1301) class patrol boats entered service between 1986 and 1992. Many of these 90 ships are manpower-intensive and increasingly expensive to maintain, and have features that in some cases are not optimal for performing their assigned missions. Some of them have already been removed from Coast Guard service: eight of the Island-class patrol boats were removed from service in 2007 following an unsuccessful effort to modernize and lengthen them to 123 feet; additional Island-class patrol boats are being decommissioned as new FRCs enter service; the one-of-a-kind medium-endurance cutter that originally entered service with the Navy in 1944 was decommissioned in 2011; and Hamilton-class cutters are being decommissioned as new NSCs enter service. A July 2012 Government Accountability Office (GAO) report discusses the generally poor physical condition and declining operational capacity of the Coast Guard's older high-endurance cutters, medium-endurance cutters, and 110-foot patrol craft. Missions of NSCs, OPCs, and FRCs NSCs, OPCs, and FRCs, like the ships they are intended to replace, are to be multimission ships for routinely performing 7 of the Coast Guard's 11 statutory missions, including search and rescue (SAR); drug interdiction; migrant interdiction; ports, waterways, and coastal security (PWCS); protection of living marine resources; other/general law enforcement; and defense readiness operations. Smaller Coast Guard patrol craft and boats contribute to the performance of some of these seven missions close to shore. NSCs, OPCs, and FRCs perform them both close to shore and in the deepwater environment, which generally refers to waters more than 50 miles from shore. NSC Program National Security Cutters ( Figure 1 )—also known as Legend (WMSL-750) class cutters because they are being named for legendary Coast Guard personnel —are the Coast Guard's largest and most capable general-purpose cutters. They are larger and technologically more advanced than Hamilton-class cutters, and are built by Huntington Ingalls Industries' Ingalls Shipbuilding of Pascagoula, MS (HII/Ingalls). The Coast Guard's acquisition program of record (POR)—the service's list, established in 2004, of planned procurement quantities for various new types of ships and aircraft—calls for procuring 8 NSCs as replacements for the service's 12 Hamilton-class high-endurance cutters. The Coast Guard's FY2019 budget submission estimated the total acquisition cost of a nine-ship NSC program at $6.030 billion, or an average of about $670 million per ship. Although the Coast Guard's POR calls for procuring a total of 8 NSCs to replace the 12 Hamilton-class cutters, Congress through FY2018 has funded 11 NSCs, including the 10 th and 11 th in FY2018. The seventh was delivered to the Coast Guard on September 19, 2018, and the eighth was delivered on April 30, 2019. The ninth through 11th are under construction; the ninth is scheduled for delivery in 2021. The Coast Guard's proposed FY2020 budget requests $60 million in procurement funding for the NSC program; this request does not include funding for a 12 th NSC. For additional information on the status and execution of the NSC program from a May 2018 GAO report, see Appendix C . OPC Program Offshore Patrol Cutters ( Figure 2 , Figure 3 , and Figure 4 )—also known as Heritage (WMSM-915) class cutters because they are being named for past cutters that played a significant role in the history of the Coast Guard and the Coast Guard's predecessor organizations —are to be somewhat smaller and less expensive than NSCs, and in some respects less capable than NSCs. In terms of full load displacement, OPCs are to be about 80% as large as NSCs. Coast Guard officials describe the OPC program as the service's top acquisition priority. OPCs are being built by Eastern Shipbuilding Group of Panama City, FL. The Coast Guard's POR calls for procuring 25 OPCs as replacements for the service's 29 medium-endurance cutters. The Coast Guard's FY2019 budget submission estimated the total acquisition cost of the 25 ships at $10.523 billion, or an average of about $421 million per ship. The first OPC was funded in FY2018 and is to be delivered in 2021. The second OPC and long leadtime materials (LLTM) for the third were funded in FY2019. The Coast Guard's proposed FY2020 budget requests $457 million in procurement funding for the third OPC, LLTM for the fourth and fifth, and other program costs. The Coast Guard's Request for Proposal (RFP) for the OPC program, released on September 25, 2012, established an affordability requirement for the program of an average unit price of $310 million per ship, or less, in then-year dollars (i.e., dollars that are not adjusted for inflation) for ships 4 through 9 in the program. This figure represents the shipbuilder's portion of the total cost of the ship; it does not include the cost of government-furnished equipment (GFE) on the ship, or other program costs—such as those for program management, system integration, and logistics—that contribute to the above-cited figure of $421 million per ship. At least eight shipyards expressed interest in the OPC program. On February 11, 2014, the Coast Guard announced that it had awarded Preliminary and Contract Design (P&CD) contracts to three of those eight firms—Bollinger Shipyards of Lockport, LA; Eastern Shipbuilding Group of Panama City, FL; and General Dynamics' Bath Iron Works (GD/BIW) of Bath, ME. On September 15, 2016, the Coast Guard announced that it had awarded the detail design and construction (DD&C) contract to Eastern Shipbuilding. The contract covers detail design and production of up to 9 OPCs and has a potential value of $2.38 billion if all options are exercised. For additional information on the status and execution of the OPC program from a May 2018 GAO report, see Appendix C . FRC Program Fast Response Cutters ( Figure 5 )—also called Sentinel (WPC-1101) class patrol boats because they are being named for enlisted leaders, trailblazers, and heroes of the Coast Guard and its predecessor services of the U.S. Revenue Cutter Service, U.S. Lifesaving Service, and U.S. Lighthouse Service —are considerably smaller and less expensive than OPCs, but are larger than the Coast Guard's older patrol boats. FRCs are built by Bollinger Shipyards of Lockport, LA. The Coast Guard's POR calls for procuring 58 FRCs as replacements for the service's 49 Island-class patrol boats. The POR figure of 58 FRCs is for domestic operations. The Coast Guard, however, operates six Island-class patrol boats in the Persian Gulf area as elements of a Bahrain-based Coast Guard unit, called Patrol Forces Southwest Asia (PATFORSWA), which is the Coast Guard's largest unit outside the United States. Providing FRCs as one-for-one replacements for all six of the Island-class patrol boats in PATFORSWA would result in a combined POR+PATFORSWA figure of 64 FRCs. The Coast Guard's FY2019 budget submission estimated the total acquisition cost of the 58 cutters at $3.748.1 billion, or an average of about $65 million per cutter. A total of 56 FRCs have been funded through FY2019, including six in FY2019. Four of the 56 (two of the FRCs funded in FY2018 and two of the FRC funded in FY2019) are to be used for replacing PATFORSWA cutters and consequently are not counted against the Coast Guard's 58-ship POR for the program. Excluding these four OPCs, a total of 52 FRCs for domestic operations have been funded through FY2019. The 32nd FRC was commissioned into service on May 1, 2019. The Coast Guard's proposed FY2020 budget requests $140 million in acquisition funding for the procurement of two more FRCs for domestic operations. For additional information on the status and execution of the FRC program from a May 2018 GAO report, see Appendix C . Funding in FY2013-FY2020 Budget Submissions Table 1 shows annual requested and programmed acquisition funding for the NSC, OPC, and FRC programs in the Coast Guard's FY2013-FY2020 budget submissions. Actual appropriated figures differ from these requested and projected amounts. Issues for Congress FY2020 Funding for a 12th NSC One issue for Congress is whether to whether to provide funding in FY2020 for the procurement of a 12 th NSC. Funding long leadtime materials (LLTM) for a 12 th NSC in FY2020 could require tens of millions of dollars; fully funding the procurement of a 12 th NSC in FY2020 could require upwards of $700 million. Supporters of providing funding for a 12 th NSC in FY2020 could argue that a total of 12 NSCs would provide one-for-one replacements for the 12 retiring Hamilton-class cutters; that Coast Guard analyses showing a need for no more than 9 NSCs assumed dual crewing of NSCs—something that has not worked as well as expected; and that the Coast Guard's POR record includes only about 61% as many new cutters as the Coast Guard has calculated would be required to fully perform the Coast Guard's anticipated missions in coming years (see " Planned NSC, OPC, and FRC Procurement Quantities " below, as well as Appendix A ). Skeptics or opponents of providing funding for a 12 th NSC in FY2019 could argue that the Coast Guard's POR includes only 8 NSCs, that the Coast Guard's fleet mix analyses (see " Planned NSC, OPC, and FRC Procurement Quantities " below, as well as Appendix A ) have not shown a potential need for more than 9 NSCs, and that in a situation of finite Coast Guard budgets, providing funding for a 12 th NSC might require reducing funding for other FY2020 Coast Guard programs. Whether to Procure Two FRCs or a Higher Number in FY2020 Another issue for Congress is whether to fund the procurement in FY2020 of two FRCs, as requested by the Coast Guard, or some higher number, such as four or six. Supporters of funding the procurement of a higher number could argue that FRCs in past years have been procured at annual rates of up to six per year; that procuring them at higher annual rates reduces their unit procurement costs due to improved production economies of scale; and that procuring four or six FRCs in FY2020 would accelerate the replacement of aging and less-capable Island-class patrol boats with new and more capable FRCs. Opponents of procuring more than two FRCs in FY2020, while acknowledging these points, could argue that in a situation of finite Coast Guard funding, procuring more than two could require offsetting reductions in funding for other FY2020 Coast Guard programs, producing an uncertain net result on overall Coast Guard capabilities, and that replacing Island-class patrol boats, while desirable, is not so urgent a requirement that the procurement of FRCs needs to be accelerated beyond what the Coast Guard plans under its FY2020 budget submission. Annual or Multiyear (Block Buy) Contracting for OPCs Another issue for Congress is whether to acquire OPCs using annual contracting or multiyear contracting. The Coast Guard currently plans to use a contract with options for procuring the first nine OPCs. Although a contract with options may look like a form of multiyear contracting, it operates more like a series of annual contracts. Contracts with options do not achieve the reductions in acquisition costs that are possible with multiyear contracting. Using multiyear contracting involves accepting certain trade-offs. One form of multiyear contracting, called block buy contracting, can be used at the start of a shipbuilding program, beginning with the first ship. (Indeed, this was a principal reason why block buy contracting was in effect invented in FY1998, as the contracting method for procuring the Navy's first four Virginia-class attack submarines.) Section 311 of the Frank LoBiondo Coast Guard Authorization Act of 2018 ( S. 140 / P.L. 115-282 of December 4, 2018) provides permanent authority for the Coast Guard to use block buy contracting with economic order quantity (EOQ) purchases (i.e., up-front batch purchases) of components in its major acquisition programs. The authority is now codified at 14 U.S.C. 1137. CRS estimates that if the Coast Guard were to use block buy contracting with EOQ purchases of components for acquiring the first several OPCs, and either block buy contracting with EOQ purchases or another form of multiyear contracting known as multiyear procurement (MYP) with EOQ purchases for acquiring the remaining ships in the program, the savings on the total acquisition cost of the 25 OPCs (compared to costs under contracts with options) could amount to roughly $1 billion. CRS also estimates that acquiring the first nine ships in the OPC program under the current contract with options could forego roughly $350 million of the $1 billion in potential savings. One potential option for the subcommittee would be to look into the possibility of having the Coast Guard either convert the current OPC contract at an early juncture into a block buy contract with EOQ authority, or, if conversion is not possible, replace the current contract at an early juncture with a block buy contract with EOQ authority. Replacing the current contract with a block buy contract might require recompeting the program, which would require effort on the Coast Guard's part and could create business risk for Eastern Shipbuilding Group, the shipbuilder that holds the current contract. On the other hand, the cost to the Coast Guard of recompeting the program would arguably be small relative to a potential additional savings of perhaps $300 million, and Eastern arguably would have a learning curve advantage in any new competition by virtue of its experience in building the first OPC. Annual OPC Procurement Rate The current procurement profile for the OPC, which reaches a maximum projected annual rate of two ships per year, would deliver OPCs many years after the end of the originally planned service lives of the medium-endurance cutters that they are to replace. Coast Guard officials have testified that the service plans to extend the service lives of the medium-endurance cutters until they are replaced by OPCs. There will be maintenance and repair expenses associated with extending the service lives of medium-endurance cutters, and if the Coast Guard does not also make investments to increase the capabilities of these ships, the ships may have less capability in certain regards than OPCs. One possible option for addressing this situation would be to increase the maximum annual OPC procurement rate from the currently planned two ships per year to three or four ships per year. Doing this could result in the 25 th OPC being delivered about four years or six years sooner, respectively, than under the currently planned maximum rate. Increasing the OPC procurement rate to three or four ships per year would require a substantial increase to the Coast Guard's Procurement, Construction, and Improvements (PC&I) account, an issue discussed in Appendix B . Increasing the maximum procurement rate for the OPC program could, depending on the exact approach taken, reduce OPC unit acquisition costs due to improved production economies of scale. Doubling the rate for producing a given OPC design to four ships per year, for example, could reduce unit procurement costs for that design by as much as 10%, which could result in hundreds of millions of dollars in additional savings in acquisition costs for the program. Increasing the maximum annual procurement rate could also create new opportunities for using competition in the OPC program. Notional alternative approaches for increasing the OPC procurement rate to three or four ships per year include but are not necessarily limited to the following: increasing the production rate to three or four ships per year at Eastern Shipbuilding—an option that would depend on Eastern Shipbuilding's production capacity; introducing a second shipyard to build Eastern's design for the OPC; introducing a second shipyard (such as one of the other two OPC program finalists) to build its own design for the OPC—an option that would result in two OPC classes; or building additional NSCs in the place of some of the OPCs—an option that might include descoping equipment on those NSCs where possible to reduce their acquisition cost and make their capabilities more like that of the OPC. Such an approach would be broadly similar to how the Navy is using a descoped version of the San Antonio (LPD-17) class amphibious ship as the basis for its LPD-17 Flight II (LPD-30) class amphibious ships. Impact of Hurricane Michael on OPC Program at Eastern Shipbuilding Another potential issue for Congress concerns the impact of Hurricane Michael on Eastern Shipbuilding of Panama City, FL, the shipyard that is to build the first nine OPCs. A May 22, 2019, press report states: A Category 5 hurricane that battered Florida's panhandle region last fall, including shipbuilder Eastern Shipbuilding Group, will impact the new medium-endurance cutter ship the company is building for the Coast Guard but at the moment it's unclear what the effects will be on cost and schedule, Coast Guard Commandant Adm. Karl Schultz said on Tuesday [May 21]. Eastern Shipbuilding's analysis of Hurricane Michael's impact on the Offshore Patrol Cutter (OPC) is due to the Coast Guard by May 31, and from there the service expects to have an understanding on the way forward with the program before the end of June, Schultz said in response to questions from Rep. Garret Graves (R-La.), during a hearing hosted by the House Transportation and Infrastructure Coast Guard and Maritime Transportation Subcommittee. He said Eastern Shipbuilding will provide "perspectives" on the cost and schedule and any other impacts. "It's safe to say that we understand the impacts of a Category 5 hurricane on Eastern Shipbuilding Group will have an impact on the OPC program," Shultz said. He expects there to be some "puts and takes" after Eastern Shipbuilding submits its analysis. Rep. Peter DeFazio (D-Ore.), citing a press report earlier in the hearing, said that Sen. Marco Rubio (R-Fla.) has inserted language in a draft disaster assistance bill allowing the Coast Guard and Eastern Shipbuilding to renegotiate the firm fixed-price contract the shipbuilder is working under for the OPC to account for damage to shore side facilities from Hurricane Michael and increased labor costs. DeFazio said he is skeptical of the company's claim, noting, "I'm pretty sure they had insurance," and adding that "I question whether or not this has something to do with their original bid, which some thought was low." He also said he has concerns that a former Coast Guard Commandant that works for Eastern Shipbuilding has said he'll have authority to negotiate with his former service. Retired Adm. Robert Papp, the 24th commandant of the Coast Guard, runs Eastern Shipbuilding's Washington, D.C., operations. Eastern Shipbuilding did not respond to a query from Defense Daily about impacts to the OPC program from Hurricane Michael and any relief it may need from the current contract. Schultz said that the OPC contract can't be renegotiated without legislative authorities from Congress. He said the Coast Guard, in response to an "ask" from Congress, provided language to help with drafting the proposed legislation related to the OPC in the disaster bill. Schultz also said that the Coast Guard is not involved in Eastern Shipbuilding's lobbying efforts with Congress. A May 17, 2019, press report stated: As the Senate continues to negotiate the particulars of the supplemental disaster relief bill that seems poised to go to a vote next week, a new provision to save something many likely didn't know was at risk has been added. A new line in the draft bill will let Eastern Shipbuilding Group renegotiate its contract with the U.S. Coast Guard to build up to 25 new off-shore patrol cutters. "Under the old contract we were prohibited from negotiating for additional money for increased costs," said Admiral Bob Papp, President of Washington Operations for Eastern. That meant that after Hurricane Michael, they would be unable to negotiate with the Coast Guard to help cover a slew of new costs associated with both the project and the hurricane, such as the damage from the Category 5 storm that needed repairs, the prolonged schedule and the "skyrocketing" costs of labor, Papp said. The contract—the largest in the Coast Guard's history at more than $10 billion—didn't account for a natural disaster. It was going to be hard, Papp said, for Eastern to complete the project and to "stay healthy" without some negotiations. At stake in the community are 900 planned jobs and up to 5,000 indirect jobs officials believe will help jump-start the region's manufacturing economy. But an official in Sen. Marco Rubio's office said the latest version of the supplemental disaster relief bill now includes a provision that will allow negotiations. Rubio, according to the official, spoke with the President Donald Trump on Air Force One following the president's rally in Panama City Beach last week, helping to secure the language that made it into the bill. "We've waited far too long (for disaster relief), and we're also involved in some Florida-specific issues," Rubio said in a recent video. "For example, the Hurricane had an impact on a very important Coast Guard project that's in Northwest Florida and we want to make sure that project stays on target and continues to feed jobs because Northwest Florida desperately needs those jobs to recover. We're very hopeful. Cautiously optimistic, that next week can be a very good week." Papp thanked the area's congressional delegation for stepping up to advocate for this project, saying the company is "honored and delighted" to receive help. A January 28, 2019, press release from Eastern Shipbuilding stated: Panama City, FL, Eastern Shipbuilding Group [ESG] reports that steel cutting for the first offshore patrol cutter (OPC), Coast Guard Cutter ARGUS (WMSM-915), commenced on January 7, 2019 at Eastern's facilities. ESG successfully achieved this milestone even with sustaining damage and work interruption due to Hurricane Michael. The cutting of steel will start the fabrication and assembly of the cutter's hull, and ESG is to complete keel laying of ARGUS later this year. Additionally, ESG completed the placement of orders for all long lead time materials for OPC #2, Coast Guard Cutter CHASE (WMSM-916). Eastern's President Mr. Joey D'Isernia noted the following: "Today represents a monumental day and reflects the dedication of our workforce - the ability to overcome and perform even under the most strenuous circumstances and impacts of Hurricane Michael. ESG families have been dramatically impacted by the storm, and we continue to recover and help rebuild our shipyard and community. I cannot overstate enough how appreciative we are of all of our subcontractors and vendors contributions to our families during the recovery as well as the support we have received from our community partners. Hurricane Michael may have left its marks but it only strengthened our resolve to build the most sophisticated, highly capable national assets for the Coast Guard. Today's success is just the beginning of the construction of the OPCs at ESG by our dedicated team of shipbuilders and subcontractors for our customer and partner, the United States Coast Guard. We are excited for what will be a great 2019 for Eastern Shipbuilding Group and Bay County, Florida." A November 1, 2018, statement from Eastern Shipbuilding states that the firm resumed operations at both of its two main shipbuilding facilities just two weeks after Hurricane Michael devastated Panama City Florida and the surrounding communities…. … the majority of ESG's [Eastern Shipbuilding Group's] workforce has returned to work very quickly despite the damage caused by the storm. "Our employees are a resourceful and resilient group of individuals with the drive to succeed in the face of adversity. This has certainly been proven by their ability to bounce back over the two weeks following the storm. Our employees have returned to work much faster than anticipated and brought with them an unbreakable spirit, that I believe sets this shipyard and our community apart" said [Eastern Shipbuilding] President Joey D'Isernia. "Today, our staffing levels exceed 80% of our pre-Hurricane Michael levels and is rising daily." Immediately following the storm, ESG set out on an aggressive initiative to locate all of its employees and help get them back on the job as soon as practical after they took necessary time to secure the safety and security of their family and home. Together with its network of friends, partners, and customers in the maritime community, ESG organized daily distribution of meals and goods to employees in need. Additionally, ESG created an interest free deferred payback loan program for those employees in need and has organized Go Fund Me account to help those employees hardest hit by the storm. ESG also knew temporary housing was going to be a necessity in the short term and immediately built a small community located on greenfield space near its facilities for those employees with temporary housing needs. ESG has worked closely with its federal, state and commercial partners over the past two weeks to provide updates on the shipyard as well as on projects currently under construction. Power was restored to ESG's Nelson Facility on 10-21-18 and at ESG's Allanton Facility on 10-24-18 and production of vessels under contract is ramping back up. Additionally, all of the ESG personnel currently working on the US Coast Guard's Offshore Patrol Cutter contract have returned to work…. "We are grateful to our partners and the maritime business community as a whole for their support and confidence during the aftermath of this historic storm. Seeing our incredible employees get back to building ships last week was an inspiration," said D'Isernia. "While there is no doubt that the effects of Hurricane Michael will linger with our community for years to come, I can say without reservation that we are open for business and excited about delivering quality vessels to our loyal customers." An October 22, 2018, press report states the following: U.S. Coast Guard officials and Eastern Shipbuilding Group are still assessing the damage caused by deadly category 4 Hurricane Michael to the Panama City, Fla.-based yard contracted to build the new class of Offshore Patrol Cutters. On September 28, the Coast Guard awarded Eastern Shipbuilding a contract to build the future USCGC Argus (WMSM-915), the first offshore patrol cutter (OPC). The yard was also set to build a second OPC, the future USCGC Chase (WMSM-916). Eastern Shipbuilding's contract is for nine OPCs, with options for two additional cutters. Ultimately, the Coast Guard plans to buy 25 OPCs. However, just as the yard was preparing to build Argus , Hurricane Michael struck the Florida Panhandle near Panama City on October 10. Workers from the shipyard and Coast Guard project managers evacuated and are just now returning to assess damage to the yard facilities, Brian Olexy, communications manager for the Coast Guard's Acquisitions Directorate, told USNI News. "Right now we haven't made any decisions yet on shifts in schedule," Olexy said…. Since the yard was just the beginning stages of building Argus , Olexy said the hull wasn't damaged. "No steel had been cut," he said. Eastern Shipbuilding is still in the process of assessing damage to the yard and trying to reach its workforce. Many employees evacuated the area and have not returned, or are in the area but lost their homes, Eastern Shipbuilding spokesman Justin Smith told USNI News. At first, about 200 workers returned to work, but by week's end about 500 were at the yard, Smith said. The company is providing meals, water, and ice for its workforce. "Although we were significantly impacted by this catastrophic weather event, we are making great strides each day thanks to the strength and resiliency of our employees," Joey D'Isernia, president of Eastern Shipbuilding, said in a statement. Planned NSC, OPC, and FRC Procurement Quantities Another issue for Congress concerns the Coast Guard's planned NSC, OPC, and FRC procurement quantities. The POR's planned force of 91 NSCs, OPCs, and FRCs is about equal in number to the Coast Guard's legacy force of 90 high-endurance cutters, medium-endurance cutters, and 110-foot patrol craft. NSCs, OPCs, and FRCs, moreover, are to be individually more capable than the older ships they are to replace. Even so, Coast Guard studies have concluded that the planned total of 91 NSCs, OPCs, and FRCs would provide 61% of the cutters that would be needed to fully perform the service's statutory missions in coming years, in part because Coast Guard mission demands are expected to be greater in coming years than they were in the past. For further discussion of this issue, about which CRS has testified and reported on since 2005, see Appendix A . Legislative Activity in 2019 Summary of Appropriations Action on FY2020 Acquisition Funding Request Table 2 summarizes appropriations action on the Coast Guard's request for FY2020 acquisition funding for the NSC, OPC, and FRC programs. Appendix A. Planned NSC, OPC, and FRC Procurement Quantities This appendix provides further discussion on the issue of the Coast Guard's planned NSC, OPC, and FRC procurement quantities. Overview The Coast Guard's program of record for NSCs, OPCs, and FRCs includes only about 61% as many cutters as the Coast Guard calculated in 2011 would be needed to fully perform its projected future missions. The Coast Guard's planned force levels for NSCs, OPCs, and FRCs have remained unchanged since 2004. In contrast, the Navy since 2004 has adjusted its ship force-level goals eight times in response to changing strategic and budgetary circumstances. Although the Coast Guard's strategic situation and resulting mission demands may not have changed as much as the Navy's have since 2004, the Coast Guard's budgetary circumstances may have changed since 2004. The 2004 program of record was heavily conditioned by Coast Guard expectations in 2004 about future funding levels in the PC&I account. Those expectations may now be different, as suggested by the willingness of Coast Guard officials in 2017 to begin regularly mentioning the need for an PC&I funding level of $2 billion per year (see Appendix B ). It can also be noted that continuing to, in effect, use the Coast Guard's 2004 expectations of future funding levels for the PC&I account as an implicit constraint on planned force levels for NSCs, OPCs, and FRCs can encourage an artificially narrow view of Congress's options regarding future Coast Guard force levels and associated funding levels, depriving Congress of agency in the exercise of its constitutional power to provide for the common defense and general welfare of the United States, and to set funding levels and determine the composition of federal spending. 2009 Coast Guard Fleet Mix Analysis The Coast Guard estimated in 2009 that with the POR's planned force of 91 NSCs, OPCs, and FRCs, the service would have capability or capacity gaps in 6 of its 11 statutory missions—search and rescue (SAR); defense readiness; counterdrug operations; ports, waterways, and coastal security (PWCS); protection of living marine resources (LMR); and alien migrant interdiction operations (AMIO). The Coast Guard judges that some of these gaps would be "high risk" or "very high risk." Public discussions of the POR frequently mention the substantial improvement that the POR force would represent over the legacy force. Only rarely, however, have these discussions explicitly acknowledged the extent to which the POR force would nevertheless be smaller in number than the force that would be required, by Coast Guard estimate, to fully perform the Coast Guard's statutory missions in coming years. Discussions that focus on the POR's improvement over the legacy force while omitting mention of the considerably larger number of cutters that would be required, by Coast Guard estimate, to fully perform the Coast Guard's statutory missions in coming years could encourage audiences to conclude, contrary to Coast Guard estimates, that the POR's planned force of 91 cutters would be capable of fully performing the Coast Guard's statutory missions in coming years. In a study completed in December 2009 called the Fleet Mix Analysis (FMA) Phase 1, the Coast Guard calculated the size of the force that in its view would be needed to fully perform the service's statutory missions in coming years. The study refers to this larger force as the objective fleet mix. Table A-1 compares planned numbers of NSCs, OPCs, and FRCs in the POR to those in the objective fleet mix. As can be seen in Table A-1 , the objective fleet mix includes 66 additional cutters, or about 73% more cutters than in the POR. Stated the other way around, the POR includes about 58% as many cutters as the 2009 FMA Phase I objective fleet mix. As intermediate steps between the POR force and the objective fleet mix, FMA Phase 1 calculated three additional forces, called FMA-1, FMA-2, and FMA-3. (The objective fleet mix was then relabeled FMA-4.) Table A-2 compares the POR to FMAs 1 through 4. FMA-1 was calculated to address the mission gaps that the Coast Guard judged to be "very high risk." FMA-2 was calculated to address both those gaps and additional gaps that the Coast Guard judged to be "high risk." FMA-3 was calculated to address all those gaps, plus gaps that the Coast Guard judged to be "medium risk." FMA-4—the objective fleet mix—was calculated to address all the foregoing gaps, plus the remaining gaps, which the Coast Guard judge to be "low risk" or "very low risk." Table A-3 shows the POR and FMAs 1 through 4 in terms of their mission performance gaps. Figure A-1 , taken from FMA Phase 1, depicts the overall mission capability/performance gap situation in graphic form. It appears to be conceptual rather than drawn to precise scale. The black line descending toward 0 by the year 2027 shows the declining capability and performance of the Coast Guard's legacy assets as they gradually age out of the force. The purple line branching up from the black line shows the added capability from ships and aircraft to be procured under the POR, including the 91 planned NSCs, OPCs, and FRCs. The level of capability to be provided when the POR force is fully in place is the green line, labeled "2005 Mission Needs Statement." As can be seen in the graph, this level of capability is substantially below a projection of Coast Guard mission demands made after the terrorist attacks of September 11, 2001 (the red line, labeled "Post-9/11 CG Mission Demands"), and even further below a Coast Guard projection of future mission demands (the top dashed line, labeled "Future Mission Demands"). The dashed blue lines show future capability levels that would result from reducing planned procurement quantities in the POR or executing the POR over a longer time period than originally planned. FMA Phase 1 was a fiscally unconstrained study, meaning that the larger force mixes shown in Table A-2 were calculated primarily on the basis of their capability for performing missions, rather than their potential acquisition or life-cycle operation and support (O&S) costs. Although the FMA Phase 1 was completed in December 2009, the figures shown in Table A-2 were generally not included in public discussions of the Coast Guard's future force structure needs until April 2011, when GAO presented them in testimony. GAO again presented them in a July 2011 report. The Coast Guard completed a follow-on study, called Fleet Mix Analysis (FMA) Phase 2, in May 2011. Among other things, FMA Phase 2 includes a revised and updated objective fleet mix called the refined objective mix. Table A-4 compares the POR to the objective fleet mix from FMA Phase 1 and the refined objective mix from FMA Phase 2. As can be seen in Table A-4 , compared to the objective fleet mix from FMA Phase 1, the refined objective mix from FMA Phase 2 includes 49 OPCs rather than 57. The refined objective mix includes 58 additional cutters, or about 64% more cutters than in the POR. Stated the other way around, the POR includes about 61% as many cutters as the refined objective mix. Compared to the POR, the larger force mixes shown in Table A-2 and Table A-4 would be more expensive to procure, operate, and support than the POR force. Using the average NSC, OPC, and FRC procurement cost figures presented earlier (see " Background "), procuring the 58 additional cutters in the Refined Objective Mix from FMA Phase 2 might cost an additional $10.7 billion, of which most (about $7.8 billion) would be for the 24 additional FRCs. (The actual cost would depend on numerous factors, such as annual procurement rates.) O&S costs for these 58 additional cutters over their life cycles (including crew costs and periodic ship maintenance costs) would require billions of additional dollars. The larger force mixes in the FMA Phase 1 and 2 studies, moreover, include not only increased numbers of cutters, but also increased numbers of Coast Guard aircraft. In the FMA Phase 1 study, for example, the objective fleet mix included 479 aircraft—93% more than the 248 aircraft in the POR mix. Stated the other way around, the POR includes about 52% as many aircraft as the objective fleet mix. A decision to procure larger numbers of cutters like those shown in Table A-2 and Table A-4 might thus also imply a decision to procure, operate, and support larger numbers of Coast Guard aircraft, which would require billions of additional dollars. The FMA Phase 1 study estimated the procurement cost of the objective fleet mix of 157 cutters and 479 aircraft at $61 billion to $67 billion in constant FY2009 dollars, or about 66% more than the procurement cost of $37 billion to $40 billion in constant FY2009 dollars estimated for the POR mix of 91 cutters and 248 aircraft. The study estimated the total ownership cost (i.e., procurement plus life-cycle O&S cost) of the objective fleet mix of cutters and aircraft at $201 billion to $208 billion in constant FY2009 dollars, or about 53% more than the total ownership cost of $132 billion to $136 billion in constant FY2009 dollars estimated for POR mix of cutters and aircraft. A December 7, 2015, press report states the following: The Coast Guard's No. 2 officer said the small size and advanced age of its fleet is limiting the service's ability to carry out crucial missions in the Arctic and drug transit zones or to meet rising calls for presence in the volatile South China Sea. "The lack of surface vessels every day just breaks my heart," VADM Charles Michel, the Coast Guard's vice commandant, said Dec. 7. Addressing a forum on American Sea Power sponsored by the U.S. Naval Institute at the Newseum, Michel detailed the problems the Coast Guard faces in trying to carry out its missions of national security, law enforcement and maritime safety because of a lack of resources. "That's why you hear me clamoring for recapitalization," he said. Michel noted that China's coast guard has a lot more ships than the U.S. Coast Guard has, including many that are larger than the biggest U.S. cutter, the 1,800-ton [sic:4,800-ton] National Security Cutter. China is using those white-painted vessels rather than "gray-hull navy" ships to enforce its claims to vast areas of the South China Sea, including reefs and shoals claimed by other nations, he said. That is a statement that the disputed areas are "so much our territory, we don't need the navy. That's an absolutely masterful use of the coast guard," he said. The superior numbers of Chinese coast guard vessels and its plans to build more is something, "we have to consider when looking at what we can do in the South China Sea," Michel said. Although they have received requests from the U.S. commanders in the region for U.S. Coast Guard cutters in the South China Sea, "the commandant had to say 'no'. There's not enough to go around," he said. Potential oversight questions for Congress include the following: Under the POR force mix, how large a performance gap, precisely, would there be in each of the missions shown in Table A-3 ? What impact would these performance gaps have on public safety, national security, and protection of living marine resources? How sensitive are these performance gaps to the way in which the Coast Guard translates its statutory missions into more precise statements of required mission performance? Given the performance gaps shown in Table A-3 , should planned numbers of Coast Guard cutters and aircraft be increased, or should the Coast Guard's statutory missions be reduced, or both? How much larger would the performance gaps in Table A-3 be if planned numbers of Coast Guard cutters and aircraft are reduced below the POR figures? Has the executive branch made sufficiently clear to Congress the difference between the number of ships and aircraft in the POR force and the number that would be needed to fully perform the Coast Guard's statutory missions in coming years? Why has public discussion of the POR focused mostly on the capability improvement it would produce over the legacy force and rarely on the performance gaps it would have in the missions shown in Table A-3 ? Appendix B. Funding Levels in PC&I Account This appendix provides background information on funding levels in the Coast Guard's Procurement, Construction, and Improvements (PC&I) account. Overview As shown in Table B-1 , the FY2013 budget submission programmed an average of about $1.5 billion per year in the PC&I account. As also shown in the table, the FY2014-FY2016 budget submissions reduced that figure to between $1 billion and $1.2 billion per year. The Coast Guard has testified that funding the PC&I account at a level of about $1 billion to $1.2 billion per year would make it difficult to fund various Coast Guard acquisition projects, including a new polar icebreaker and improvements to Coast Guard shore installations. Coast Guard plans call for procuring OPCs at an eventual rate of two per year. If each OPC costs roughly $400 million, procuring two OPCs per year in an PC&I account of about $1 billion to $1.2 billion per year, as programmed under the FY2014-FY2016 budget submissions, would leave about $200 million to $400 million per year for all other PC&I-funded programs. Since 2017, Coast Guard officials have been stating more regularly what they stated only infrequently in earlier years: that executing the Coast Guard's various acquisition programs fully and on a timely basis would require the PC&I account to be funded in coming years at a level of about $2 billion per year. Statements from Coast Guard officials on this issue in past years have sometimes put this figure as high as about $2.5 billion per year. Using Past PC&I Funding Levels as a Guide for Future PC&I Funding Levels In assessing future funding levels for executive branch agencies, a common practice is to assume or predict that the figure in coming years will likely be close to where it has been in previous years. While this method can be of analytical and planning value, for an agency like the Coast Guard, which goes through periods with less acquisition of major platforms and periods with more acquisition of major platforms, this approach might not always be the best approach, at least for the PC&I account. More important, in relation to maintaining Congress's status as a co-equal branch of government, including the preservation and use of congressional powers and prerogatives, an analysis that assumes or predicts that future funding levels will resemble past funding levels can encourage an artificially narrow view of congressional options regarding future funding levels, depriving Congress of agency in the exercise of its constitutional power to set funding levels and determine the composition of federal spending. Past Coast Guard Statements About Required PC&I Funding Level At an October 4, 2011, hearing on the Coast Guard's major acquisition programs before the Coast Guard and Maritime Transportation subcommittee of the House Transportation and Infrastructure Committee, the following exchange occurred: REPRESENATIVE FRANK LOBIONDO: Can you give us your take on what percentage of value must be invested each year to maintain current levels of effort and to allow the Coast Guard to fully carry out its missions? ADMIRAL ROBERT J. PAPP, COMMANDANT OF THE COAST GUARD: I think I can, Mr. Chairman. Actually, in discussions and looking at our budget—and I'll give you rough numbers here, what we do now is we have to live within the constraints that we've been averaging about $1.4 billion in acquisition money each year. If you look at our complete portfolio, the things that we'd like to do, when you look at the shore infrastructure that needs to be taken care of, when you look at renovating our smaller icebreakers and other ships and aircraft that we have, we've done some rough estimates that it would really take close to about $2.5 billion a year, if we were to do all the things that we would like to do to sustain our capital plant. So I'm just like any other head of any other agency here, as that the end of the day, we're given a top line and we have to make choices and tradeoffs and basically, my tradeoffs boil down to sustaining frontline operations balancing that, we're trying to recapitalize the Coast Guard and there's where the break is and where we have to define our spending. An April 18, 2012, blog entry stated the following: If the Coast Guard capital expenditure budget remains unchanged at less than $1.5 billion annually in the coming years, it will result in a service in possession of only 70 percent of the assets it possesses today, said Coast Guard Rear Adm. Mark Butt. Butt, who spoke April 17 [2012] at [a] panel [discussion] during the Navy League Sea Air Space conference in National Harbor, Md., echoed Coast Guard Commandant Robert Papp in stating that the service really needs around $2.5 billion annually for procurement. At a May 9, 2012, hearing on the Coast Guard's proposed FY2013 budget before the Homeland Security subcommittee of the Senate Appropriations Committee, Admiral Papp testified, "I've gone on record saying that I think the Coast Guard needs closer to $2 billion dollars a year [in acquisition funding] to recapitalize—[to] do proper recapitalization." At a May 14, 2013, hearing on the Coast Guard's proposed FY2014 budget before the Homeland Security Subcommittee of the Senate Appropriations Committee, Admiral Papp stated the following regarding the difference between having about $1.0 billion per year rather than about $1.5 billion per year in the PC&I account: Well, Madam Chairman, $500 million—a half a billion dollars—is real money for the Coast Guard. So, clearly, we had $1.5 billion in the [FY]13 budget. It doesn't get everything I would like, but it—it gave us a good start, and it sustained a number of projects that are very important to us. When we go down to the $1 billion level this year, it gets my highest priorities in there, but we have to either terminate or reduce to minimum order quantities for all the other projects that we have going. If we're going to stay with our program of record, things that have been documented that we need for our service, we're going to have to just stretch everything out to the right. And when we do that, you cannot order in economic order quantities. It defers the purchase. Ship builders, aircraft companies—they have to figure in their costs, and it inevitably raises the cost when you're ordering them in smaller quantities and pushing it off to the right. Plus, it almost creates a death spiral for the Coast Guard because we are forced to sustain older assets—older ships and older aircraft—which ultimately cost us more money, so it eats into our operating funds, as well, as we try to sustain these older things. So, we'll do the best we can within the budget. And the president and the secretary have addressed my highest priorities, and we'll just continue to go on the—on an annual basis seeing what we can wedge into the budget to keep the other projects going. At a March 12, 2014, hearing on the Coast Guard's proposed FY2015 budget before the Homeland Security subcommittee of the House Appropriations Committee, Admiral Papp stated the following: Well, that's what we've been struggling with, as we deal with the five-year plan, the capital investment plan, is showing how we are able to do that. And it will be a challenge, particularly if it sticks at around $1 billion [per year]. As I've said publicly, and actually, I said we could probably—I've stated publicly before that we could probably construct comfortably at about 1.5 billion [dollars] a year. But if we were to take care of all the Coast Guard's projects that are out there, including shore infrastructure that that fleet that takes care of the Yemen [sic: inland] waters is approaching 50 years of age, as well, but I have no replacement plan in sight for them because we simply can't afford it. Plus, we need at some point to build a polar icebreaker. Darn tough to do all that stuff when you're pushing down closer to 1 billion [dollars per year], instead of 2 billion [dollars per year]. As I said, we could fit most of that in at about the 1.5 billion [dollars per year] level, but the projections don't call for that. So we are scrubbing the numbers as best we can. At a March 24, 2015, hearing on the Coast Guard's proposed FY2016 budget before the Homeland Security subcommittee of the House Appropriations Committee, Admiral Paul Zukunft, Admiral Papp's successor as Commandant of the Coast Guard, stated the following: I look back to better years in our acquisition budget when we had a—an acquisition budget of—of $1.5 billion. That allows me to move these programs along at a much more rapid pace and, the quicker I can build these at full-rate production, the less cost it is in the long run as well. But there's an urgent need for me to be able to deliver these platforms in a timely and also in an affordable manner. But to at least have a reliable and a predictable acquisition budget would make our work in the Coast Guard much easier. But when we see variances of—of 30, 40% over a period of three or four years, and not knowing what the Budget Control Act may have in store for us going on, yes, we are treading water now but any further reductions, and now I am—I am beyond asking for help. We are taking on water. An April 13, 2017, press report states the following (emphasis added): Coast Guard Commandant Adm. Paul Zukunft on Wednesday [April 12] said that for the Coast Guard to sustain its recapitalization plans and operations the service needs a $2 billion annual acquisition budget that grows modestly overtime to keep pace with inflation. The Coast Guard needs a "predictable, reliable" acquisition budget "and within that we need 5 percent annual growth to our operations and maintenance (O&M) accounts," Zukunft told reporters at a Defense Writers Group breakfast. Inflation will clip 2 to 3 percent from that, but "at 5 percent or so it puts you on a moderate but positive glide slope so you can execute, so you can build the force," he said. In an interview published on June 1, 2017, Zukunft said the following (emphasis added): We cannot be more relevant than we are now. But what we need is predictable funding. We have been in over 16 continuing resolutions since 2010. I need stable and repeatable funding. An acquisition budget with a floor of $2 billion. Our operating expenses as I said, they've been funded below the Budget Control Act floor for the past five years. I need 5 percent annualized growth over the next five years and beyond to start growing some of this capability back. But more importantly, we [need] more predictable, more reliable funding so we can execute what we need to do to carry out the business of the world's best Coast Guard. Appendix C. Additional Information on Status and Execution of NSC, OPC, and FRC Programs from May 2018 GAO Report This appendix presents additional information on the status and execution of the NSC, OPC, and FRC programs from a May 2018 GAO report reviewing DHS acquisition programs. NSC Program Regarding the NSC program, the May 2018 GAO report states the following: DHS's Under Secretary for Management (USM) directed the USCG to complete follow-on operational test and evaluation (OT&E) by March 2019. According to USCG officials, the program's OTA began follow-on OT&E in October 2017, which will test unmet key performance parameters (KPP) and address deficiencies found during prior testing. The NSC completed initial operational testing in 2014, but did not fully demonstrate 7 of its 19 KPPs, including those related to unmanned aircraft and cutter-boat deployment in rough seas. According to USCG officials, operators have since demonstrated these KPPs during USCG operations. For example, USCG officials stated that they successfully demonstrated operations of a prototype unmanned aircraft on an NSC. However, the USCG will not evaluate the NSC's unmanned aircraft KPP until the unmanned aircraft undergoes initial OT&E, currently planned for June 2019. In addition, the NSC will be the first USCG asset to undergo cybersecurity testing. However, this test has been delayed over a year with the final cyber test event scheduled for August 2018 because of a change in NSC operational schedules, among other things. The DHS USM also directed the USCG to complete a study to determine the root cause of the NSC's propulsion system issues by December 2017; however, as of January 2018, the study was not yet complete. GAO previously reported on these issues—including high engine temperatures, cracked cylinder heads, and overheating generator bearings that were impacting missions—in January 2016.... The USCG initially planned to implement a crew rotational concept in which crews would rotate while NSCs were underway to achieve a goal of 230 days away from the cutter's homeport. In February 2018, USCG officials told GAO they abandoned the crew rotational concept because the concept did not provide the USCG with the expected return on investment. Instead, USCG officials said a new plan has been implemented that does not rotate crew and is anticipated to increase the days away from home port from the current capability of 185 days to 200 days. OPC Program Regarding the OPC program, the May 2018 GAO report states the following: DHS approved six key performance parameters (KPP) for the OPC related to the ship's operating range and duration, crew size, interoperability and maneuverability, and ability to support operations in moderate to rough seas. The first OPC has not yet been constructed, so the USCG has not yet demonstrated whether it can meet these KPPs. The USCG plans to use engineering reviews, and developmental and operational tests throughout the acquisition to measure the OPC's performance. USCG officials told GAO that the program completed an early operational assessment on the basic ship design in August 2017, which entailed a review of the current design plans. The program plans to refine the ship's design as needed based on preliminary test results. However, as of December 2017, USCG officials had not received the results of this assessment. The USCG plans to conduct initial operational test and evaluation (OT&E) on the first OPC in fiscal year 2023. However, the test results from initial OT&E will not be available to inform key decisions. For example, the results will not be available to inform the decision to build 2 OPCs per year—which USCG officials said is scheduled to begin in fiscal year 2021. Without test results to inform these key decisions, the USCG must make substantial commitments prior to knowing how well the ship will meet its requirements.... The USCG is in the process of completing the design of the OPC before starting construction, which is in-line with GAO shipbuilding best practices. In addition, USCG officials stated that the program is using state-of-the-market technology that has been proven on other ships as opposed to state-of-the-art technology, which lowers the risk of the program. FRC Program Regarding the FRC program, the May 2018 GAO report states the following: In February 2017, DHS's Director, Office of Test and Evaluation (DOT&E) assessed the results from the program's July 2016 follow-on operational test and evaluation (OT&E) and determined that • the program met its six key performance parameters, and • the FRC was operationally effective and suitable. During follow-on OT&E, the OTA found that several deficiencies from the program's initial OT&E had been corrected. For example, the OTA closed a severe deficiency related to the engines based on modifications to the FRC's main diesel engines. However, five major deficiencies remain. According to USCG officials, the remaining deficiencies are related to ergonomics (e.g., improving the working environment for operators) and issues with stowage space. USCG officials stated that they plan to resolve the remaining deficiencies by fiscal year 2020. DOT&E noted that these deficiencies do not prevent mission completion or present a danger to personnel, but recommended that they be resolved as soon as possible. USCG officials indicated that they plan to resolve the remaining deficiencies through engineering or other changes.... The USCG continues to work with the contractor—Bollinger Shipyards, LLC—to address issues covered by the warranty and acceptance clauses for each ship. For example, 18 engines—9 operational engines and 9 spare engines—have been replaced under the program's warranty. According to USCG documentation, 65 percent of the current issues with the engines have been resolved through retrofits; however, additional problems with the engines have been identified since our April 2017 review. For example, issues with water pump shafts are currently being examined through a root cause analysis and will be redesigned and are scheduled to undergo retrofits starting in December 2018. We previously found that the FRC's warranty resulted in improved cost and quality by requiring the shipbuilder to pay for the repair of defects. As of September 2017, USCG officials said the replacements and retrofits completed under the program's warranty allowed the USCG to avoid an estimated $104 million in potential unplanned costs—of which $63 million is related to the engines. For a discussion of some considerations relating to warranties in shipbuilding and other acquisition programs, see Appendix D . Appendix D. Some Considerations Relating to Warranties in Shipbuilding and Other Acquisition Programs This appendix presents some considerations relating to warranties in shipbuilding and other defense acquisition. In discussions of Navy and Coast Guard shipbuilding, one question that sometimes arises is whether including a warranty in a shipbuilding contract is preferable to not including one. Including a warranty in a shipbuilding contract (or a contract for building some other kind of military end item), while potentially valuable, might not always be preferable to not including one—it depends on the circumstances of the acquisition, and it is not necessarily a valid criticism of an acquisition program to state that it is using a contract that does not include a warranty (or a weaker form of a warranty rather than a stronger one). Including a warranty generally shifts to the contractor the risk of having to pay for fixing problems with earlier work. Although that in itself could be deemed desirable from the government's standpoint, a contractor negotiating a contract that will have a warranty will incorporate that risk into its price, and depending on how much the contractor might charge for doing that, it is possible that the government could wind up paying more in total for acquiring the item (including fixing problems with earlier work on that item) than it would have under a contract without a warranty. When a warranty is not included in the contract and the government pays later on to fix problems with earlier work, those payments can be very visible, which can invite critical comments from observers. But that does not mean that including a warranty in the contract somehow frees the government from paying to fix problems with earlier work. In a contract that includes a warranty, the government will indeed pay something to fix problems with earlier work—but it will make the payment in the less-visible (but still very real) form of the up-front charge for including the warranty, and that charge might be more than what it would have cost the government, under a contract without a warranty, to pay later on for fixing those problems. From a cost standpoint, including a warranty in the contract might or might not be preferable, depending on the risk that there will be problems with earlier work that need fixing, the potential cost of fixing such problems, and the cost of including the warranty in the contract. The point is that the goal of avoiding highly visible payments for fixing problems with earlier work and the goal of minimizing the cost to the government of fixing problems with earlier work are separate and different goals, and that pursuing the first goal can sometimes work against achieving the second goal. The Department of Defense's guide on the use of warranties states the following: Federal Acquisition Regulation (FAR) 46.7 states that "the use of warranties is not mandatory." However, if the benefits to be derived from the warranty are commensurate with the cost of the warranty, the CO [contracting officer] should consider placing it in the contract. In determining whether a warranty is appropriate for a specific acquisition, FAR Subpart 46.703 requires the CO to consider the nature and use of the supplies and services, the cost, the administration and enforcement, trade practices, and reduced requirements. The rationale for using a warranty should be documented in the contract file.... In determining the value of a warranty, a CBA [cost-benefit analysis] is used to measure the life cycle costs of the system with and without the warranty. A CBA is required to determine if the warranty will be cost beneficial. CBA is an economic analysis, which basically compares the Life Cycle Costs (LCC) of the system with and without the warranty to determine if warranty coverage will improve the LCCs. In general, five key factors will drive the results of the CBA: cost of the warranty + cost of warranty administration + compatibility with total program efforts + cost of overlap with Contractor support + intangible savings. Effective warranties integrate reliability, maintainability, supportability, availability, and life-cycle costs. Decision factors that must be evaluated include the state of the weapon system technology, the size of the warranted population, the likelihood that field performance requirements can be achieved, and the warranty period of performance.	Summary:	gov_report	1,024	null	72
crs_R45957	crs_R45957_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The asset management industry operates in a complex system with many components. Asset management companies have two major product categoriesâpublic funds and private funds. Additionally, a number of intermediaries, such as investment advisers and custodians, provide distribution channels, safeguards, and other essential services to investors and issuers. Nearly half, or 44.8%, of all U.S. households own some form of public funds. When operating as expected, the industry functions to pool assets, share risks, allocate resources, produce information, and protect investors. Asset management companiesâalso referred to as investment management companies, money managers, funds, or investment fundsâare collective investment vehicles that pool money from various individual or institutional investor clients and invest on their behalf for financial returns. The Securities and Exchange Commission (SEC) is the primary regulator of the asset management industry. The main statutes that govern the asset management industry at the federal level include the Investment Company Act of 1940 (P.L. 76-768), the Investment Advisers Act of 1940 (P.L. 76-768), the Securities Act of 1933 (P.L. 73-22), and the Securities Exchange Act of 1934 (P.L. 73-291). Public and private funds are distinguished by the types of investors who can access them and by the regulation applied to them. Public funds, such as mutual funds, exchange-traded funds (ETFs), closed-end funds, and unit investment trusts (UITs), are broadly accessible to investors of all types. Private funds are limited to more sophisticated institutional and retail (individual) investors, thus the name private fund . The main types of private funds are hedge funds, venture capital funds, and private equity. The first part of this report provides an overview of the asset management industry and its regulation. Although there is no single definition for the industry, the report generally covers public and private investment funds and the industry components that serve those funds. The report also illustrates some of the industry's key risk exposures and the regulations designed to disclose, monitor, and mitigate them. The second part of this report considers current trends and policy issues, including (1) whether the asset management industry affects the financial stability of the United States; (2) whether regulation of the asset management industry provides sufficient protection for the retail investors who invest money in the industry; and (3) the impact of financial technology, or "fintech," on the industry, and whether the current regulatory framework is adequate to address these new technologies. Industry Assets The asset management industry is large and highly concentrated. Exact statistics differ somewhat depending on the source, but one industry report on the world's 500 largest asset managers indicates that the largest U.S. asset managers (i.e., those within the global top 500 ranking) managed around $50 trillion in assets in 2017. The top 10 U.S. asset managers alone held $26.2 trillion in assets under management as of year-end 2017 ( Table 1 ). The industry's assets are measured by assets under management (AUM) and net assets. AUM or gross assets refer to the sum of assets overseen by the asset manager. Net assets refer to the value of assets minus liabilities. U.S.-registered investment companies or "public funds" held $21.4 trillion in total net assets as of 2018. Private funds, which are not accessible by typical households, held $8.7 trillion in total net assets and $13.5 trillion in AUM as of December 2018. In addition, other market intermediaries, such as broker-dealers, held around $3.1 trillion AUM as of second quarter 2018. Types of Asset Management Companies Many types of asset management companies exist. Further, the different types of asset management companies are subject to different regulatory requirements. This section highlights major types of asset management companies, including public funds, private funds, and other forms of asset management. Public Funds Public funds are pooled investment vehicles that gather money from a wide variety of investors and invest the money in stocks, bonds, and other securities. They are SEC-registered investment companies that are open to all institutional and retail investors in the public, thus the name public funds. Asset holdings of public funds experienced significant growth in the past two decades ( Figure 1 ). At year-end 2018, public funds managed more than $21.4 trillion in assets, largely on behalf of more than 100 million U.S. retail investors. The four basic types of public funds are mutual funds, closed-end funds, exchange-traded funds, and unit investment trusts. Mutual Funds Mutual funds are the most widely used pooled investment vehicle. They are also called open-ended funds, referring to their continuous offering of shares. Mutual funds do not have a limit on the number of shares they can issue. The shares are not traded on exchanges. When investors need to exit their investment positions, they "redeem" shares at net asset value (NAV). Redemption means selling shares back to the mutual fund. These technical features, including NAV and redemption, are revisited in the context of compliance and risk controls in " Regulatory and Risk Mitigation Frameworks " section of this report. Closed-End Funds A closed-end fund is a publicly traded investment company that sells a limited number of shares rather than continuously offering them. Closed-end fund shares are not redeemable, meaning they cannot be returned to the fund for NAV, but they are traded in the secondary market. Investors can exit closed-end funds by buying or selling shares on securities exchanges. Exchange-Traded Funds (ETF) ETFs are pooled investment vehicles that combine features of both mutual funds and closed-end funds. ETFs offer investors a way to pool their money into a fund with continuous share offerings that can also trade on exchanges like a stock. Unit Investment Trusts (UIT) UITs invest money raised from many investors in a one-time public offering in a generally fixed portfolio of stocks, bonds, or other investments. It is an investment company organized under a trust or similar structure that issues redeemable securities, each of which represents an interest in a unit of specified securities. Private Funds Private funds, in contrast, are investment companies that operate through exemptions from certain SEC regulation. Private funds are also called alternative investments. Relative to public funds, private funds tend to take on higher risk, and they are subject to more investor access restrictions. Private funds are available to only a limited number of qualified investors, thus the name private funds. As of December 2018, private funds held $8.7 trillion in total net assets and $13.5 trillion in gross assets under management ( Figure 2 ). From the SEC's first available private funds statistics in the first quarter of 2013 to the fourth quarter of 2018, the private fund industry grew more than 60%, primarily led by increases in private equity and hedge funds. The rules governing the funds were established as part of the Investment Company Act in the 1940s, but some argue the drafters never foresaw the rise of private funds at such a scale. The current private fund landscape thus raises questions regarding if or how the regulations ought to be updated. The main types of private funds include hedge funds, venture capital funds, private equity funds, and family offices, but these fund types are not mutually exclusive. Some use the term private equity interchangeably as a catch-all phrase to describe all types of private funds. This report uses the terminology set forth by the SEC in its private funds Form PF reporting system. Among all major types of private funds, only venture capital funds and family offices have legal definitions. In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203; Dodd-Frank Act) removed the historical exemption from SEC registration for investment advisers with fewer than 15 clients to "fill a key gap in the regulatory landscape." The act also established legal definitions of venture capital funds and family offices, so that these selected private funds could be exempted from the new regulation requirement. In addition, private funds with less than $150 million in assets under management continue to be exempted. Private Equity Funds A private equity fund is a pooled investment vehicle that typically concentrates on investments not offered to the public, such as ownership stakes in privately held companies. Private equity fund investors include high-net-worth individuals and families, pension funds, endowments, banks and insurance companies. According to a 2017 survey, around 88% of institutional investors invested in private equity funds; nearly a third allocated more than 10% of their assets in private equity. Venture Capital Funds Venture capital funds are sources of startup financing for early stage, high-potential firms, such as high-tech startups. Pursuant to the Dodd-Frank Act, the SEC established a definition for venture capital funds in 2011. To be considered for the venture capital exemption from certain investment company regulatory requirements, the fund should generally pursue a venture strategy, cannot borrow funding to incur leverage, and should hold no more than 20% of its capital in nonqualifying investments, among other conditions. The legal definition of "venture capital fund" needs to be met in order to qualify for regulatory exemptions. Hedge Funds Hedge funds are pooled investment vehicles that often deploy more "speculative" investment practices than mutual funds, such as leverage and short-selling. Among investors, hedge funds are more controversial than other funds because of their high fee structure coupled with reported persistent underperformance. Hedge fund fee structures often include an annual asset management fee of 1% to 2% of assets under management as well as an additional 20% performance fee on any profits. This fee structure could motivate a hedge fund manager to take greater risks in the hope of generating a larger performance fee, yet only the investors, not the hedge funds, bear the downside risk. Prior to the Dodd-Frank Act, hedge funds were virtually unregulated, and regulators were largely unaware of the hedge fund market's size, investment strategies, and number of players. The Dodd-Frank Act mandated more detailed reporting of hedge funds and other private funds. Confidential filings from hedge funds are now reported to the SEC. Despite continuous discussions of whether hedge funds' fees are excessive and their closings, the hedge fund industry remains at peak net assets levels of around $4 trillion ( Figure 2 ). Family Offices Family offices are investment firms that solely manage the wealth of family clients. They do not offer their services to the public and are generally exempt from SEC registration requirements. According to a 2018 report, around two-thirds of family offices were established after 2000. Owing to their exclusivity, family offices receive minimal regulation and oversight. They have grown rapidly in recent years and are reportedly increasingly becoming an option for some hedge fund managers, who solely manage their own money. Public Versus Private Funds Table 2 compares public and private funds' characteristics. The main differences between public and private funds include the following examples: Risk âprivate funds normally invest in higher-risk assets and deploy more volatile investment strategies. For example, certain private funds focus on funding for startups, which are inherently riskier with higher possibilities for business failure. Certain private funds also have a greater ability to borrow money to invest (leverage), which could multiply the funds' risks and returns. Regulation âprivate funds face less regulation relative to public funds. For example, whereas public funds generally have to calculate daily valuation and maintain periodic public reporting, private funds are not subject to such mandates. Investor access â private funds are limited as to the type and the number of investors they can reach, while public funds are available to all investors. These restrictions are meant to protect certain retail investors who are perceived as less sophisticated, given the generally higher risk and lower levels of regulation. Portfolio company involvement â a private equity or venture capital fund typically uses client funds to obtain a controlling interest in a nonpublicly traded company (called a portfolio company). This controlling interest normally allows the private fund to have a say in the portfolio company's operations. Public funds, in contrast, typically do not directly affect portfolio company management and operations, except through shareholder voting processes. Liquidity â liquidity refers to how easy it is to buy and sell securities without affecting the price. Public funds are considered liquid for investors because of their redemption or exchange trading features, whereas private funds are considered illiquid. H olding period Private funds often invest in private securities that are not publicly traded. This causes private funds to normally have to wait for three to seven years before a "liquidity event" can occur. The liquidity events are typically company buyouts or initial public offerings (IPOs). Private funds typically realize the gains or losses of their investments only when portfolio companies are sold or go public. Public funds mostly invest in publicly traded companies that are considered to offer immediate liquidity. Public funds are not restricted from investing in private securities, but certain public fund regulatory requirements, such as daily valuation, make private investment operations less practical for public funds. As such, public funds largely focus on publicly traded securities and have not significantly undertaken private securities investments. Publicly traded private funds Some of the world's largest private fund managers are publicly traded, and thus able to offer company stock level liquidity. This means that public investors can directly purchase these fund companies' stocks and gain exposure to the companies' private fund investment portfolios as a whole. Publicly listed asset management firms include Amundi Group, Man Group, Och-Ziff Capital Management Group, Blackstone Group, and KKR. In 2017, they managed $2.4 trillion combined. Publicly traded private funds must concurrently adhere to private fund compliance requirements and restrictions, as well as public security offering standards. These private funds separately answer to both their direct fund investors and public shareholders. Other Forms of Asset Management Other forms of asset management do not fit tightly into the public or private fund categorization. Business Development Companies Business development companies (BDCs) are closed-end funds that primarily invest in small and developing businesses, and that generally provide operational assistance to such businesses in addition to funding. Congress created BDCs in 1980 in amendments to the Investment Company Act of 1940 to "make capital more readily available to small, developing, and financially troubled companies that are not able to access public markets or other forms of conventional financing." BDCs are not required to register with the SEC as investment companies, and thus face much less regulation than mutual funds. But they do offer their securities to the public, and their public offerings are subject to full SEC reporting requirements. Fund of Funds A fund of funds is an investment fund that invests in other funds. The fund of funds design aims to achieve asset allocation, diversification, hedging, or other investment objectives. The SEC estimates that almost half of all registered funds invest in other funds. Operational Components The asset management industry operates in a complex system with many components, including different types of funds and various intermediaries. This section explains the operation of a typical public fund as well as other prominent actors supporting the fund and the efficient operations of the industry. Operation of a Fund Funds typically operate through asset management companies (AMCs). The largest AMCs, as measured by assets under management, are shown in Table 1 . The AMCs can manage multiple funds of different types. Each fund has an Investment Management Agreement that designates the AMC to manage the fund's portfolio composition and trading. As Figure 3 illustrates, the end investors own the fund and contribute cash for its shares, custodians safeguard the fund assets, and the fund can also interact with certain counterparties for other transactions. Key Intermediaries The main players supporting the asset management industry include those who are more directly related to the flow of capital, such as financial advisers and others who serve back-office or administrative functions, such as data and research, asset safekeeping, and shareholder voting. Because funds are also financial products that are sold to investors, investment advisers and broker-dealers are the most commonly used retail sales and distribution channels. This section discusses several selected groups of players that frequently appear in asset management policy discussions. Investment Advisers An investment adviser is "any person or firm that for compensation is engaged in the business of providing advice to others or issuing reports or analysis regarding securities." Investment advisers generally include money managers, investment consultants, financial planners, and others who provide advice about securities. Investment advisers meeting the SEC legal definition must register with the SEC. As of 2018, the SEC oversaw around 13,200 registered investment advisers. Broker-Dealers Brokers and dealers are often discussed together, but they are two different types of entities. Brokers conduct securities transactions for others. They are generally paid a commission on securities sales. Dealers conduct securities transactions for their own accounts. Most brokers and dealers must register with the SEC and also comply with the guidance of self-regulatory organizations (SROs). The Financial Industry Regulatory Authority (FINRA) is the main SRO for the broker-dealer industry. FINRA writes and enforces broker-dealer rules, conducts examinations, and provides investor education. As of 2018, FINRA supervises around 3,596 member firms and 626,127 individual registered reps. Custodians Custodians provide safekeeping of financial assets. They are financial institutions that do not have legal ownership of assets but are tasked with holding and securing the assets, among other administrative functions. As mentioned in more detail in the " Asset Management Risks and Regulation " section of this report, client assets are not owned by an adviser or fund. As part of the regulatory requirements to protect investors, client assets are generally required to be safeguarded by a qualified custodian who maintains possession and control of the assets. In the past 90 years, financial custody has evolved from a system of self-custody to custodians playing key component of asset management operations. Today, four banks (BNY Mellon, J.P. Morgan, State Street, and Citigroup) service around $114 trillion of global assets under custody. Information Services The asset management industry in its essence is also an investment research industry that aggregates data and analysis for investment decision-making. Owing to the sophistication of the industry's technology and analysis, there are many data vendors and research providers, including national exchanges, data and technology aggregators, and sell-side researchers involved. The Proxy System A proxy vote is a vote cast by others on behalf of a shareholder who may not physically attend a shareholder meeting. This is how the vast majority of shareholder votes are cast. The SEC requires investment managers to vote as proxies in the best interest of their clients and disclose their voting policies and records to clients. During the 2018 shareholder meeting season, there were more than 4,000 shareholder meetings involving over 259 million proxy votes. Under the current system, shareholders cast their votes through a variety of intermediaries that assume the functions of forwarding proxy materials, collecting voting instructions, voting shares, soliciting proxies, tabulating proxies, and analyzing proxy issues. Different aspects of this complex system have attracted years-long policy debates regarding proxy reform. Regulatory and Risk Mitigation Frameworks The asset management industry's legislative history is relatively long and complex. The current regulatory regime governing the asset management industry was not a comprehensive design from inception, but rather developed through many iterations of adjustments and expansions. Therefore, the asset management industry is overseen by a somewhat fragmented regulatory regime with areas of disconnect between business practices and the legal definitions describing them. Congress created the SEC during the Great Depression to restore public confidence in the U.S. capital markets. Early policymaking in the 1930s focused on full disclosure, with the specific intention that publicly traded companies tell the whole truth about any material issues pertaining to their securities and the risks associated with investing in them. However, Congress realized that the disclosure-based approach alone was not enough to deter fraudulent and abusive activities in the asset management industry, which flourished in the 1920s and 1930s. Congress thus directed the SEC to conduct a 1Â½-year study of the issue in the Public Utility Holding Company Act of 1935. The SEC took four years, resulting in a four-part study with six additional supplemental reports. Based on the SEC research and subsequent hearings, in 1940, Congress introduced two new laws to govern the asset management industryâthe Investment Company Act of 1940 and the Investment Advisers Act of 1940. These statutes and regulations required those who manage and distribute funds to treat investors fairly and honestly. The textbox below describes the individual laws, which generally apply to the asset management industry as follows: Asset management companies must comply with the Investment Company Act of 1940 or gain exemption from its requirements. Funds' portfolio managers or investment advisers generally must register with the SEC under the Investment Advisers Act of 1940. The funds themselves are securities, and thus subject to federal securities regulation in relation to securities offering and trading, including the Securities Act of 1933 and the Securities Exchange Act of 1934. Asset Management Risks and Regulation Compared With Banking After the 2007-2009 financial crisis, Congress directed more attention toward financial services sector risks and policy solutions. In some congressional discussions, risks in the banking and asset management industries were jointly debated. Although similarities exist between the two industries' financial risks, there are fundamental differences. These differences are derived from the industries' different business models, risk controls, and risk mitigation backstops. Agent-Based Versus Principal-Based Models The asset management framework is an agent-based model that separates investment management functions from investment ownership. This is different from the principal-based model for banking, in which banks own and retain the assets and risks. In many ways, asset managers are viewed as agents that perform investment management services. They are compensated through service or performance fees, but otherwise they are insulated from the investment returns or their clients' account losses. Because their clients' assets are not owned by the funds, asset managers routinely exit the market without significant market impact. Even when under market stress, the risks associated with asset managers winding down differ greatly from those associated with bank liquidations. Whereas bank failures may lead to government financial intervention for either recovery or resolution, asset managers do not own or guarantee client assets. Their clients bear investment performance risks and can directly transfer assets out of failing asset management firms. With that said, macro-prudential tools for detecting and mitigating systemic risks in the banking sector have been considered for asset management firms. For example, the Dodd-Frank Act mandated the SEC implement annual stress testing for certain asset managers. Disclosure Requirements Disclosure requirements are the cornerstone of securities regulation. The purposes of and requirements for disclosure differ for public and private funds. Public funds normally provide public disclosures to inform investors. Private funds normally provide SEC-only disclosures that allow the agency to monitor risks and inform policy, while maintaining confidentiality. Public Disclosure Public disclosures allow the public to make informed judgments about whether to invest in specific funds by ensuring that investors receive significant information on the funds. The disclosure-based regulatory philosophy is consistent with Supreme Court Justice Louis Brandeis's famous dictum that "sunlight is said to be the best of disinfectants; electric light the most efficient policeman." Public disclosures, including mutual fund and ETF prospectuses, are available for free from the SEC public disclosure portal. SEC-registered investment advisers, for example, are also required to publicly report their business operations and certain disciplinary events. Nonpublic SEC-only Disclosure A number of SEC-only reporting requirements apply to public and private funds and their advisers. The private disclosures are often for purposes of regulatory review, risk monitoring, and policymaking. The SEC normally does not make information that identifies any particular registrant publicly available, although it can release certain information in aggregate and use the information in enforcement actions. Examples of private disclosure include public fund liquidity position reporting and periodic reporting of private funds by SEC-registered investment advisers pursuant to Dodd-Frank Act requirements. Investor Access Restrictions Public funds are open to all investors, but private funds' investor access is restricted by several intersecting federal laws that govern different regulatory requirements for securities offerings, investment management companies, and investment advisers. Only those investors who meet certain definitions can invest in private funds without triggering related regulatory requirements. Funds can avoid additional regulatory requirements by adhering to restrictions on the types of investors permitted to invest in the fund; some examples follows: Accredited investorâif a fund's investors meet the definition, such a fund could qualify for private securities exemption. Qualified clientâif a fund's investors meet the definition, the fund manager could receive performance-based compensation. Qualified purchaserâif a fund's investors meet the definition, the fund could be exempted from registering as an investment company. Most private funds choose to comply with investor definitions to preserve their scaled-down regulatory requirements relative to public funds. The specifics of the investor access definitions, especially the accredited investor definition, have been a source of policy debate. Examinations The SEC's Office of Compliance Inspections and Examinations (OCIE) is responsible for conducting examinations and certain other risk oversight of the asset management industry. In addition, self-regulatory agencies, such as FINRA, also conduct examinations of their members under SEC oversight. OCIE examinations focus on compliance, fraud, risk monitoring, and informing policymaking. OCIE has 1,000 employees in 11 regional offices and headquarters. Approximately 10,000 mutual funds and ETFs, 13,200 investment advisers, and 3,800 broker-dealers, among other regulated entities are subject to potential examinations. The OCIE completed more than 3,000 examinations in fiscal year 2018. Securities Investor Protection Corporation The federal government does not guarantee or insure the value and performance of investment management accounts. As the common investment disclaimerâ"past performance is no guarantee of future results"âsuggests, due to unpredictable market fluctuations, capital markets investors could experience underperformance or lose their principal. Investors should be prepared to absorb their own losses. When a capital markets firm fails, certain losses could possibly receive limited payouts for investors from the Securities Investor Protection Corporation (SIPC). However, the nature and the level of payouts are different than those associated with the banking insurer Federal Deposit Insurance Corporation (FDIC). SIPC is a nongovernment nonprofit corporation created by the Securities Investor Protection Act. It insures up to $500,000 of cash and securities (with a $250,000 limit for cash) in brokerage accounts to protect customers against cash and securities losses if their brokerage firm fails. SIPC only protects the custody function of the broker-dealers, which means it works to restore any assets missing from customers' accounts but it does not protect the principal against the decline in market value of investments. The FDIC, in contrast, is a government organization that insures up to $250,000 of deposits, including principal, in banks and thrift institutions when these institutions fail. Risk Mitigation Controls The asset management industry faces a number of risks. Some of them are inherent in the industry's agent-based business model whereas others are more common to financial services institutions. This section lays out examples of the risk factors and attendant mitigation controls to help policymakers better comprehend the rationale behind the regulatory requirements. This section also contains a summary table ( Table 3 ) providing context on how certain existing regulations fit into risk mitigation policy goals. Conflict of Interest Context : Conflicts of interest may occur in any principal-agent paradigm within which one entity (agent) makes decisions on behalf of another entity (principal). In the context of asset management industry client relationships, the central concern is that asset managers (agents) may not act in the best interest of investors (principals). An example of a conflict of interest would be an investment adviser directing clients' investments toward products that generate higher sales commissions, rather than products that best fit the clients' financial needs. Example s of mitigation controls : SEC-registered investment advisers are fiduciaries, meaning they have a legal obligation to act in the best interest of their clients. FINRA also casts a similar, yet less rigorous suitability requirement for broker-dealers. The standard requires broker-dealers to make investment recommendations to suit client financial needs. In addition, the SEC adopted Regulation Best Interest in June 2019 to address certain conflict of interest concerns in financial advisory services. The proposal aims to further prevent financial advisers from placing their own financial or other interests ahead of the best interest of their clients. Liquidity Context : Liquidity, as mentioned previously, is commonly defined as the ease of buying or selling assets without affecting their prices. The easier the assets are to sell, the higher their liquidity. The liquidity issue could be especially important during market distress, when factors like cash needs and exceptional volatility in asset valuations could drive panic reactions in the market. Different funds have different types of liquidity risk concerns. Mutual funds that allow investors to redeem their shares daily need to maintain sufficient liquid assets to meet shareholder redemptions and minimize the impact of the redemptions on the funds' remaining shareholders. Private funds present different concerns because, in most cases, their investors enter into illiquid investments knowing that they could experience several years of holding periods. Private funds generally do not promise daily redemption, and investors in private funds cannot easily sell their positions to meet urgent cash needs. Example s of mitigation controls : Funds that offer frequent redemption as a product feature must maintain liquid assets to meet potential redemptions. Under the SEC liquidity rule, such funds must categorize their investments into four different types and limit their illiquid investments to no more than 15% of the funds' net assets. Leverage Context : Leverage generally refers to the use of borrowed funding to invest, which may multiply risks and returns. High leverage could complicate funds' investment structures and increase risks to both individual investors and the financial system as a whole, due to its effects in multiplying both losses and returns. Examples of mitigation controls: Mutual funds and closed-end funds are subject to a 300% asset coverage requirement. This is a leverage ratio of 33%, meaning the fund cannot borrow an amount exceeding a third of its portfolio size. By contrast, most private funds do not have leverage restrictions. Operational Risks Context : Operational risks arise from operational challenges and business transaction issues. Operational risks are especially important for the asset management industry because the industry manages client accounts. Accurate client account recordkeeping and transfer, asset safeguards, information sharing, and cybersecurity are some areas of operational importance. Examples of mitigation controls: The SEC's custody rule requires registered investment advisers to engage qualified custodians to (1) have possession and control of assets, (2) undergo annual surprise examinations, (3) have a qualified custodian maintaining client assets, and (4) send account statements directly to the clients instead of to funds, among other requirements. Recent Trends Over the past several decades, the asset-management industry has undergone several changes that may have important implications for public policy. This section discusses a number of these changes, including (1) the industry's overall growth; (2) increased reliance on capital markets for financing rather than bank loans by American businesses; (3) a shift from active to passive investment style; and (4) the expansion of private securities markets. The Asset-Management Industry's Growth In the past two decades, the asset-management industry has grown significantly because of increased use of defined-contribution retirement plans, asset appreciation, and changes in investment styles and preferences, among other things (see Figure 1 and Figure 2 ). Over the past 70 years, investors have largely shifted from investing directly themselves to investing indirectly through asset managers. For example, in the 1940s, almost all corporate equities were held by households and nonprofits, whereas in 2017, direct holdings by individuals made up less than 40% of total holdings. Some argue that the percentage of equity directly held by individuals could be closer to 20%. As a result of these changes, asset managers now dominate the investment decisionmaking on behalf of retail investors and other institutions. Their influence on both investors and the companies they invest in has expanded. Capital Market Financing Outpaces Bank Lending The importance of the asset-management industry has also increased because of changes in the relative importance of the capital markets and banks. Specifically, growth in capital markets financing (i.e., the issuance of bonds and other debt securities) significantly outpaced growth in bank loans ( Figure 4 ). This general trend has increased the relative importance of asset managers, who represent major holders of such bonds and debt securities. For example, mutual funds and ETFs held about 21% of all U.S. corporate bonds in 2018, more than double their percentage of such holdings in 2009. The International Monetary Fund (IMF) has observed that this shift may be attributable to tighter banking regulation, rising compliance costs, and bank deleveraging following the 2007-2009 financial crisis. As Figure 4 illustrates, U.S. capital markets play a much more dominant role in business financing relative to the Euro area. Active to Passive Investment Style Shift The asset-management industry has also witnessed a trend away from active and toward passive management, whereby asset managers do not actively select funds' portfolio assets, instead pegging investments to an index, such as the S&P 500. In recent years, passive investment through index mutual funds and ETFs has displaced active investment ( Figure 5 ). This trend has mostly been driven by passive funds' lower costs through management fee savings and superior performance. According to a 2016 S&P Global study, for example, active stock managers underperformed their passive-fund targets more than 80% of the time over 1-year, 5-year, and 10-year periods. The rise of passive investing has generated criticism from active asset managers. Some active managers are concerned that the growth of passive investing will undermine price discovery through reduced fundamental research by active asset managers. They argue this could create systemic risk concerns through correlations and volatility, affecting the efficient allocation of capital. Regarding financial stability, a recent Federal Reserve whitepaper concludes that the shift from active to passive investment has probably reduced liquidity transformation risks while amplifying market volatility and asset management industry concentration. Finally, some argued that actively managed funds perform better than passive strategies when markets are less efficient. If this argument is true, then actively managed funds may be able to capitalize on market inefficiencies caused by growth in passive investment, enabling continued growth in active management as well. Private Securities Offerings Outpace Public Offerings The asset-management industry has also taken on increased importance because of a significant rise in the volume of private securities offerings. Because many asset managers purchase large volumes of private securities, this shift has led the asset-management industry to occupy an increasingly central role in U.S. financial markets. In 2018, American companies raised roughly $2.9 trillion through private offeringsâmore than double the size of public offerings that year. The increase in the volume of private securities offerings has also attracted the attention of policymakers, some of whom have proposed measures to increase investor access to private securities markets. For example, a type of closed-end fund, referred to as an interval fund, can conduct periodic repurchases generally every 3, 6, or 12 months. Because of the longer intervals, these funds are better able to involve less liquid assets such as private securities. In a 2017 report, the Treasury recommended the SEC review the rules governing interval funds. The SEC also explored the potential of interval funds in its 2019 concept release regarding private securities markets. Policy Issues The increased importance of the asset-management industry raises a variety of policy issues. This section discusses several of these issues, including financial stability, investor protection, and financial innovation. Financial Stability Financial stability typically refers to the ability of the financial system to withstand economic shocks and satisfy its basic functions: financial intermediation, risk management, and capital allocation. Policymakers attempting to safeguard financial stability generally focus on the minimization of s ystemic risk âthe risk that the entire financial system will cease to perform these functions. Former Federal Reserve Governor Daniel Tarullo has identified four possible sources of systemic risk: Domino or spillover effects â when one firm's failure imposes debilitating losses on its counterparties. Feedback loops â when fire sales of assets depress market prices, thereby imposing losses on all investors holding the same asset class. Contagion effects âa run in which investors suddenly withdraw their funds from a class of institutions or assets. Disruptions to critical functions â when a market can no longer operate because of a breakdown in market infrastructure. According to an international financial organization, the Financial Stability Board, asset-management companies did not display particularly large financial stability concerns during the 2007-2009 financial crisis, with the exception of money market mutual funds (MMFs). This is a result of the fact that asset managers are generally agents who provide investment services to clients rather than principals who invest for themselves. They manage large amounts of assets, but do not have direct ownership of them. As such, asset managers are largely insulated from client account losses. This does not mean that the industry is free of financial stability concerns. Actual market events show that even perceived-to-be-safe funds could trigger financial system instability. For example, the money market mutual fund industry triggered market disruptions in 2008 and accelerated the 2007-2009 financial crisis. Before that, hedge fund Long-Term Capital Management's failure in 1998 also demonstrated that the transmission of risks from one event can broadly affect the functioning of the financial system. The Financial Stability Board identified several asset management structural vulnerabilities that could present financial stability risks. These vulnerabilities include liquidity mismatch, leverage within investment funds, operational risk and challenges under stressed conditions, and certain lending activities of asset managers and funds. This section uses three examplesâmoney market mutual funds, ETFs, and leveraged lendingâto illustrate the context of selected asset management structural vulnerabilities and the extent to which these vulnerabilities could cause financial stability concerns. Money Market Mutual Funds139 Money market mutual funds (MMFs) represent one corner of the asset-management industry that has generated systemic-risk issues. MMFs are mutual funds that invest in short-term debt securities, such as U.S. Treasury bills or commercial paper (a type of corporate debt). Because MMFs invest in high-quality, short-term debt securities, investors generally regard them as safe alternatives to bank deposits even though they are not federally insured like bank deposits. Like the shares of other mutual funds, MMF shares are generally redeemed at net asset value (NAV), meaning investors sell shares back to a fund at a per share value of the fund's assets minus its liabilities. Some MMFs, however, operate somewhat differently than most other mutual funds. Specifically, some MMFs aim to keep a stable NAV at $1.00 per share, paying dividends as their value rises and thereby even more closely mimicking the features of bank deposits. If its stable NAV drops below $1.00, which rarely occurs, it is said that the MMF "broke the buck." On September 15, 2008, Lehman Brothers Holdings Inc. filed for bankruptcy . The next day, one MMF, the Reserve Primary Fund, broke the buck when its shares fell to 97 cents after writing off the debt issued by Lehman Brothers. This event triggered an array of market reactions and accelerated the 2007-2009 financial crisis. Ultimately the Treasury Department intervened with an emergency guarantee program for MMFs as one of the ways to address the crises. MMFs thus became a known financial stability concern, demonstrating clearly that they are susceptible to sudden large redemptions (runs) that can cause dislocation in short-term funding markets. MMFs are vulnerable to runs because shareholders have an incentive to redeem their shares before others do when there is a perception that the fund could suffer a loss. To address this concern, the SEC promulgated MMF rules in 2010 and 2014 mandating that institutional municipal and institutional prime MMFs float their NAV from stable value. The SEC also provided new tools to the MMFs' boards, allowing them to impose fees and redemption gates to discourage runs. Policy discussions continued after the 2014 revisions, especially about whether the MMFs' NAV should be floating or stable, generating controversy and attracting congressional interest. For example, the Consumer Financial Choice and Capital Markets Protection Act of 2019 (S. 733) would require the SEC to reverse the floating NAV back to a stable NAV for the affected MMFs. A floating NAV reflects more closely the actual market value of the fund. Proponents believe the floating NAV could (1) reduces investors' incentive in distressed markets to run because of the difference between stable value and the actual market value; (2) allows investors to understand price movements and market fluctuations, and (3) removes the implicit guarantee of zero investor losses through stable value that could lead to unrealistic expectations of safety. Opponents believe that floating NAV does not solve the issue of investors fleeing. For example, one academic research article concludes that European MMFs that offer similar structures to floating NAV did not experience significant reduction in run propensity during market distress. In addition, providing floating NAV requires calculation time and more tax, accounting, and disclosure related business model changes. Opponents also point to the volume decline of affected MMFs since the reform as an example of a shrinking MMF market that may create working capital shortages for business and municipal operations. Others argue that because the MMF reform has been fully implemented since October 2016, it makes sense to study the actual effectiveness and impact of the reform before considering changes. Exchange-Traded Funds Some commentators have also argued that ETFs raise certain systemic-risk concerns. The vast majority of all ETF assets are passively managed or index-based; thus investors often view the high growth in ETFs as one of the driving forces behind the passive investment trend the report discusses in the previous section. With U.S. ETFs accounting for more than $3.4 trillion in assets under management and 30% of all U.S. equity trading volume in 2018, ETFs' scale and continued growth give rise to financial stability considerations. The key systemic-risk issue surrounding certain ETFs involves liquidity mismatch . Liquidity mismatch generally points to a relatively complex ETF operational structure that offers buying and selling activities at both the fund level and the portfolio asset level. If the amount of liquidity differs between the two levels, for example, if the ETF shares trade differently than the underlying portfolio ETF holdings of stocks or other assets, there could be a liquidity mismatch. Some argue this liquidity mismatch could amplify market distress and potentially trigger fire sales that further depress asset prices and worsen market conditions. In contrast, others have argued that liquidity provision through the ETF structure is additive, meaning an ETF's liquidity is at least as great as that of its underlying assets. Other commentators have argued that not all ETFs are created equal. The majority of ETFs are "plain-vanilla" index-tracking products that are considered lower risk. However, there is also a growing subset of complex, higher-risk ETFs that is a source of greater concern. To add to the confusion, the industry does not currently have a consistent naming convention to clearly differentiate between the types of products that are higher risk. On September 26, 2019, the SEC established a comprehensive listing standard for ETFs only. Prior to that, prospective ETF issuers typically must have been approved by the SEC under an exemption to the Investment Company Act. The new ETF approval process replaces individual exemptive orders with a single rule for plain-vanilla ETFs. The approach excludes certain higher-risk ETFs and mandates new disclosures and other conditions on index-based and actively managed ETFs. Leveraged Lending Leveraged lending, also referred to as leveraged loans, is financing made to below investment grade companies (i.e., companies with a credit rating below BBB-/Baa3), which tend to be highly indebted. Leveraged lending received its name because of the recipients' high-debt-to-earnings leverage. Most leveraged loans are syndicated, meaning that a group of bank or nonbank lenders, including asset managers, collectively funds a single borrower, in contrast to a traditional loan held by a single bank. Some regulators consider syndicated loans to be an emerging regulatory gray area that is not fully overseen by either banking or securities regulators. Leveraged loans generally present higher risks than other forms of lending because they involve riskier borrowers and often feature relatively weak investor safeguards (indicated by a weak "covenant") and relatively weak capabilities for loan repayment, indicated by high ratios of debt to earnings before interest, tax, depreciation and amortization (EBITDA). During the past decade, the U.S. leveraged loan market experienced rapid growth, deteriorating credit quality, and decreased repayment capabilities ( Table 4 ). However, the total amount of leveraged loans outstanding remained relatively low at around $1 trillion as of 2018. Nonbanks make up around 90% of the leveraged loan primary market investor base as of 2017. Mutual funds and hedge funds held 21% and 5% of leveraged loans in 2017 respectively, with mutual funds' share of the market more than doubling between 2006 and 2017. In addition, nearly 60% of U.S. leveraged loans are packaged into a type of structured credit called a collateralized loan obligation (CLO). CLOs are then sold to institutional investors, including asset managers, banks, and others, with the asset management industry holding the riskier CLO tranches and banks holding the higher-quality tranches. Mutual funds and other investment vehicles hold more than 20% of CLOs. Multiple financial regulators and Members of Congress have voiced concerns about leveraged loans' risks and implications for financial stability. However, other commentators have argued that leveraged loans are resilient and stable, claiming unwarranted fears. Leveraged lending raises a variety of policy issues, including the following: Market o pacity . Leveraged lending, particularly the increase of covenant-lite loans, couples high risk with relative lack of transparency, potentially leading to unexpectedly high losses and shocks to the financial system ( Table 4 ). It is unclear, as discussed below, the degree to which contagion across the financial system would result from this. Liquidity mismatch. Public funds expect easy entry and exit through daily redemption or intraday trading, whereas leveraged loans, which could serve as underlying assets to funds, trade infrequently and take longer to settle. These features of leveraged loans have prompted the Chairman of the SEC to caution that investors should be aware of their relative illiquidity. The loan syndication process and federal oversight. Leveraged loans are usually syndicated by groups of institutional investors, including asset managers. Some regulators and researchers worry that certain leveraged loans are less regulated than other financial products like bonds and bank loans. Contagion risk . Given the leveraged loan market's size and investor composition, some experts have argued that leveraged lending raises concerns about financial contagion. However, most investors in leveraged loans are nonbanks, with the asset management industry holding a significant portion of total outstanding exposure. As a result, some commentators have argued that direct financial losses from leveraged loans would largely stop at the investor level, instead of being multiplied throughout the interconnected financial system by banks. The Chairman of the Federal Reserve, for example, has indicated that while leveraged loans raise some concerns, they "do[es] not appear to present notable risks to financial stability." Data gap. Some analysts have argued that the lack of available information through data collection and sharing on CLO holdings has prevented the industry and the regulators from monitoring risks in the leveraged lending market. Investor Protection Investor protections attempt to prevent investors from being harmed due to inappropriate risk exposure, conflicts of interest, or abusive conduct. This section discusses certain policy debates concerning investors' access to private funds, fund disclosures, and asset managers' voting of clients' stocks. Defining Accredited Investors173 Some private funds are limited to "accredited investors"âa limitation that has generated debate about which categories of investors should be eligible for this status. An individual can qualify as an accredited investor if he or she (1) earned more than $200,000 (or $300,000 together with a spouse) in annual gross income during each of the prior two years and can reasonably be expected to earn a gross income above that threshold in the current year, or (2) has a net worth of more than $1 million (either alone or together with a spouse), excluding the value of their primary residence. Institutions can also qualify as accredited investors if they own more than $5 million in assets. A number of regulated entities, such as banks, insurance companies, and registered investment companies, automatically qualify as accredited investors. Some commentators have criticized the SEC's existing rules for determining accredited investor status, arguing that income and net-worth criteria bear little relationship to investor sophistication. These critics contend that the current accredited investor definition is both over- and under-inclusive, capturing wealthy but unsophisticated investors while excluding those who are well-informed but less affluent. In addition, given the trend of private securities offerings outpacing public offerings, some observers are concerned about ensuring equal access to investment opportunities and the diversification benefits from allocating capital across the full spectrum of public and private securities and funds. Commentators have accordingly discussed expanding the accredited investor definition to (1) account for individuals with financial training or demonstrated financial experience, (2) allow investors to opt-in to private market investment opportunities, or (3) expand the eligible accredited investor base in other ways, subject to certain limitations. Voting of Proxy Shares Proxy voting represents another issue involving investor protection that has taken on increased significance. Asset managers have fiduciary duties to vote the proxies of their public company voting shares on their clients' behalf. Some asset managers outsource proxy voting and research to proxy advisory firms, whereas others operate these functions in-house. Commentators have identified a number of policy issues involving the proxy system, including (1) stewardshipâwhether asset managers and proxy advisory firms are in fact voting in their clients' best interests; and (2) accuracyâwhether the actual votes are tabulated correctly. These topics are critically important because proxy voting can often decide the strategic directions of publicly traded companies. To address these issues, the SEC issued a concept release soliciting public feedback on the proxy system in 2010. The SEC has also held multiple roundtables to discuss the proxy process, most recently in November 2018. Fund Disclosure Ensuring full and fair disclosure of material information is a key objective of the federal securities laws. To promote these goals, the SEC has implemented a series of initiatives to improve the investor experience by updating the design, delivery, and content of fund disclosure. For example, after longstanding policy debate, the SEC adopted Rule 30e-3 in June 2018 to allow certain investment funds to transmit shareholder reports digitally as the default option. Supporters of this rule point to its environmental and economic benefits, including its estimated $2 billion savings over a 10-year period. In contrast, the rule's opponents have voiced concerns over the usefulness of electronic reports for elderly and rural investors who may lack access to or familiarity with the Internet. The SEC continues to seek public input on the fund disclosure and retail investor experience, including shareholder reports, prospectuses, advertising, and other types of disclosure. Financial Innovation Financial innovation is an integral part of the asset management industry's development. Innovation raises policy and regulatory issues, including (1) whether new technologies and practices have outgrown or are sufficiently served by the existing regulatory system; (2) how the regulatory framework can achieve the goal of "same business, same risk, same regulation"; and (3) how to protect investors without hindering innovation. This section explains policy challenges involving these general issues. Digital Asset Custody Digital-asset custody has recently attracted regulatory attention. Under the SEC's Custody Rule, custodians of client assets must abide by certain requirements designed to protect client funds from the possibility of being lost or misappropriated. This rule was developed for the traditional asset management industry that dealt in instruments with more tangible tracks of physical existence and recording, and thus could pose unique challenges for digital assets often without tangible representation. For example, the digital asset industry's common practice thus far focuses on the safeguarding of private keys. Private keys are unique numbers assigned mathematically to digital asset transactions to confirm ownership, raising questions about the nature of "possession" and "control" of a digital asset. A March 2019 letter from the SEC to the digital asset industry solicited public input regarding the custody of digital assets. In the letter, the SEC summarized a number of policy issues involving the custody of digital assets, including the use of distributed ledger technology (DLT) to record ownership, the use of public and private cryptographic key pairings to transfer digital assets, the ability to restore or recover lost digital assets, the generally anonymous nature of DLT transactions, and the challenges auditors face in examining DLT and digital assets. Congressional hearings have also addressed the issue of digital asset custody. Nonfinancial Technology Platforms A second recent development in financial technology that raises important policy questions involves the entry of nonfinancial technology platforms into the financial services industry. Large technology firms such as Amazon, Facebook, and Uber have all started financial-services operations as potential competitors and partners to the asset-management industry. Although the scale of this innovation has not been broadly felt, industry experts like the World Economic Forum predict that platforms offering the ability to engage with different financial institutions from a single channel will likely become the dominant model for the delivery of financial services. Technology firms have the potential to disrupt the asset-management industry through digital asset transactions, robo advisory services, and direct asset management product distribution to investors. Investment researchers argue that Amazon, for example, could use the trust of its brand and distribution channels to become "an arms-length distributor of funds." The influence of technology platforms has already been realized in certain overseas markets. For example, Ant Financialâan affiliate of Alibaba Groupâmanages the world's largest MMF, with 588 million Alipay users, a third of the Chinese population, among its investors. This entry of technology companies into financial services raises a number of concerns related to these companies' power, their control over user data, and personal privacy. Facebook Libra's ETF-Like Characteristics Facebook is among the technology companies that have expressed interest in entering financial services. In June 2019, the social media company announced its intention to develop a new cryptocurrency called Libraâa revelation that has attracted congressional interest. At a hearing addressing the issue, several Members of Congress questioned Facebook officials about how Libra should be regulated and whether it meets the existing regulatory definition of an ETF, among other issues. Some commentators have argued that because Libra will be backed by reserve assets that certain authorized sellers can exchange for units of the cryptocurrency, its operational structure is similar to that of ETFs, which rely on a roughly comparable creation and redemption process. Although Facebook officials acknowledged that Libra uses operational mechanisms that are similar to ETFs, the company maintained that the cryptocurrency should not be considered an ETF because it is intended to operate as a payment tool rather than an investment vehicle. If Libra did qualify as an ETF, it would fall under the SEC's oversight and require regulatory approval. The SEC is reportedly evaluating whether the cryptocurrency will fall within that category. Some Members of Congress have also expressed opposition to Facebook's Libra project. Members of the House Financial Services Committee have circulated a discussion draft, the Keep Big Tech Out of Finance Act , which would prevent certain large technology firms from creating digital assets intended to be used widely as a medium of exchange, unit of account, or store of value. Conclusion The asset-management industry is large, complex, and governed by a host of intersecting federal regulations primarily overseen by the SEC. The industry has undergone a number of changes, including increases in its size, changes in the relative importance of capital markets and banks, shifts away from active and toward passive investment management, and increases in the volume of private securities offerings. Some of these trends raise important policy issues, including financial stability, investor protection, and the promotion of financial innovation. As a general matter, asset-management companies have generated fewer financial-stability concerns than some other financial institutions. This is largely because asset managers generally are agents who provide investment services rather than principals who invest for their own accounts. But it does not mean that the industry is free of financial stability risks. Specific structural vulnerabilities, for example, redemption risk and liquidity mismatch, among other vulnerabilities, could be observed in the context of certain MMFs, ETFs, and leveraged lending, but their implications are uncertain. The asset-management industry is governed by a range of investor-protection rules that raise various policy issues, including the appropriate level of investor access to certain types of funds, fund disclosure, and proxy voting. Finally, the need to balance financial innovation with investor protection has generated a number of important debates surrounding digital asset custody and the entry of technology firms into financial services. Appendix. Related CRS Products CRS Report R45221, Capital Markets, Securities Offerings, and Related Policy Issues , by Eva Su. CRS Report R45318, Exchange-Traded Funds (ETFs): Issues for Congress , by Eva Su. CRS Report R45308, JOBS and Investor Confidence Act (House-Amended S. 488): Capital Markets Provisions , coordinated by Eva Su. CRS Report R43413, Costs of Government Interventions in Response to the Financial Crisis: A Retrospective , by Baird Webel and Marc Labonte. CRS In Focus IF10700, Introduction to Financial Services: Systemic Risk , by Marc Labonte. CRS In Focus IF11062, Introduction to Financial Services: Capital Markets , by Eva Su. CRS In Focus IF11278, Accredited Investor Definition and Private Securities Markets , by Eva Su. CRS In Focus IF10747, Private Securities Offerings: Background and Legislation , by Eva Su. CRS In Focus IF11004, Financial Innovation: Digital Assets and Initial Coin Offerings , by Eva Su. CRS In Focus IF11256, SEC Securities Disclosure: Background and Policy Issues , by Eva Su. CRS In Focus IF11320, Money Market Mutual Funds: A Financial Stability Case Study , by Eva Su. Summary:	null	96	65,887	65,889	65,889	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The asset management industry operates in a complex system with many components. Asset management companies have two major product categoriesâpublic funds and private funds. Additionally, a number of intermediaries, such as investment advisers and custodians, provide distribution channels, safeguards, and other essential services to investors and issuers. Nearly half, or 44.8%, of all U.S. households own some form of public funds. When operating as expected, the industry functions to pool assets, share risks, allocate resources, produce information, and protect investors. Asset management companiesâalso referred to as investment management companies, money managers, funds, or investment fundsâare collective investment vehicles that pool money from various individual or institutional investor clients and invest on their behalf for financial returns. The Securities and Exchange Commission (SEC) is the primary regulator of the asset management industry. The main statutes that govern the asset management industry at the federal level include the Investment Company Act of 1940 (P.L. 76-768), the Investment Advisers Act of 1940 (P.L. 76-768), the Securities Act of 1933 (P.L. 73-22), and the Securities Exchange Act of 1934 (P.L. 73-291). Public and private funds are distinguished by the types of investors who can access them and by the regulation applied to them. Public funds, such as mutual funds, exchange-traded funds (ETFs), closed-end funds, and unit investment trusts (UITs), are broadly accessible to investors of all types. Private funds are limited to more sophisticated institutional and retail (individual) investors, thus the name private fund . The main types of private funds are hedge funds, venture capital funds, and private equity. The first part of this report provides an overview of the asset management industry and its regulation. Although there is no single definition for the industry, the report generally covers public and private investment funds and the industry components that serve those funds. The report also illustrates some of the industry's key risk exposures and the regulations designed to disclose, monitor, and mitigate them. The second part of this report considers current trends and policy issues, including (1) whether the asset management industry affects the financial stability of the United States; (2) whether regulation of the asset management industry provides sufficient protection for the retail investors who invest money in the industry; and (3) the impact of financial technology, or "fintech," on the industry, and whether the current regulatory framework is adequate to address these new technologies. Industry Assets The asset management industry is large and highly concentrated. Exact statistics differ somewhat depending on the source, but one industry report on the world's 500 largest asset managers indicates that the largest U.S. asset managers (i.e., those within the global top 500 ranking) managed around $50 trillion in assets in 2017. The top 10 U.S. asset managers alone held $26.2 trillion in assets under management as of year-end 2017 ( Table 1 ). The industry's assets are measured by assets under management (AUM) and net assets. AUM or gross assets refer to the sum of assets overseen by the asset manager. Net assets refer to the value of assets minus liabilities. U.S.-registered investment companies or "public funds" held $21.4 trillion in total net assets as of 2018. Private funds, which are not accessible by typical households, held $8.7 trillion in total net assets and $13.5 trillion in AUM as of December 2018. In addition, other market intermediaries, such as broker-dealers, held around $3.1 trillion AUM as of second quarter 2018. Types of Asset Management Companies Many types of asset management companies exist. Further, the different types of asset management companies are subject to different regulatory requirements. This section highlights major types of asset management companies, including public funds, private funds, and other forms of asset management. Public Funds Public funds are pooled investment vehicles that gather money from a wide variety of investors and invest the money in stocks, bonds, and other securities. They are SEC-registered investment companies that are open to all institutional and retail investors in the public, thus the name public funds. Asset holdings of public funds experienced significant growth in the past two decades ( Figure 1 ). At year-end 2018, public funds managed more than $21.4 trillion in assets, largely on behalf of more than 100 million U.S. retail investors. The four basic types of public funds are mutual funds, closed-end funds, exchange-traded funds, and unit investment trusts. Mutual Funds Mutual funds are the most widely used pooled investment vehicle. They are also called open-ended funds, referring to their continuous offering of shares. Mutual funds do not have a limit on the number of shares they can issue. The shares are not traded on exchanges. When investors need to exit their investment positions, they "redeem" shares at net asset value (NAV). Redemption means selling shares back to the mutual fund. These technical features, including NAV and redemption, are revisited in the context of compliance and risk controls in " Regulatory and Risk Mitigation Frameworks " section of this report. Closed-End Funds A closed-end fund is a publicly traded investment company that sells a limited number of shares rather than continuously offering them. Closed-end fund shares are not redeemable, meaning they cannot be returned to the fund for NAV, but they are traded in the secondary market. Investors can exit closed-end funds by buying or selling shares on securities exchanges. Exchange-Traded Funds (ETF) ETFs are pooled investment vehicles that combine features of both mutual funds and closed-end funds. ETFs offer investors a way to pool their money into a fund with continuous share offerings that can also trade on exchanges like a stock. Unit Investment Trusts (UIT) UITs invest money raised from many investors in a one-time public offering in a generally fixed portfolio of stocks, bonds, or other investments. It is an investment company organized under a trust or similar structure that issues redeemable securities, each of which represents an interest in a unit of specified securities. Private Funds Private funds, in contrast, are investment companies that operate through exemptions from certain SEC regulation. Private funds are also called alternative investments. Relative to public funds, private funds tend to take on higher risk, and they are subject to more investor access restrictions. Private funds are available to only a limited number of qualified investors, thus the name private funds. As of December 2018, private funds held $8.7 trillion in total net assets and $13.5 trillion in gross assets under management ( Figure 2 ). From the SEC's first available private funds statistics in the first quarter of 2013 to the fourth quarter of 2018, the private fund industry grew more than 60%, primarily led by increases in private equity and hedge funds. The rules governing the funds were established as part of the Investment Company Act in the 1940s, but some argue the drafters never foresaw the rise of private funds at such a scale. The current private fund landscape thus raises questions regarding if or how the regulations ought to be updated. The main types of private funds include hedge funds, venture capital funds, private equity funds, and family offices, but these fund types are not mutually exclusive. Some use the term private equity interchangeably as a catch-all phrase to describe all types of private funds. This report uses the terminology set forth by the SEC in its private funds Form PF reporting system. Among all major types of private funds, only venture capital funds and family offices have legal definitions. In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203; Dodd-Frank Act) removed the historical exemption from SEC registration for investment advisers with fewer than 15 clients to "fill a key gap in the regulatory landscape." The act also established legal definitions of venture capital funds and family offices, so that these selected private funds could be exempted from the new regulation requirement. In addition, private funds with less than $150 million in assets under management continue to be exempted. Private Equity Funds A private equity fund is a pooled investment vehicle that typically concentrates on investments not offered to the public, such as ownership stakes in privately held companies. Private equity fund investors include high-net-worth individuals and families, pension funds, endowments, banks and insurance companies. According to a 2017 survey, around 88% of institutional investors invested in private equity funds; nearly a third allocated more than 10% of their assets in private equity. Venture Capital Funds Venture capital funds are sources of startup financing for early stage, high-potential firms, such as high-tech startups. Pursuant to the Dodd-Frank Act, the SEC established a definition for venture capital funds in 2011. To be considered for the venture capital exemption from certain investment company regulatory requirements, the fund should generally pursue a venture strategy, cannot borrow funding to incur leverage, and should hold no more than 20% of its capital in nonqualifying investments, among other conditions. The legal definition of "venture capital fund" needs to be met in order to qualify for regulatory exemptions. Hedge Funds Hedge funds are pooled investment vehicles that often deploy more "speculative" investment practices than mutual funds, such as leverage and short-selling. Among investors, hedge funds are more controversial than other funds because of their high fee structure coupled with reported persistent underperformance. Hedge fund fee structures often include an annual asset management fee of 1% to 2% of assets under management as well as an additional 20% performance fee on any profits. This fee structure could motivate a hedge fund manager to take greater risks in the hope of generating a larger performance fee, yet only the investors, not the hedge funds, bear the downside risk. Prior to the Dodd-Frank Act, hedge funds were virtually unregulated, and regulators were largely unaware of the hedge fund market's size, investment strategies, and number of players. The Dodd-Frank Act mandated more detailed reporting of hedge funds and other private funds. Confidential filings from hedge funds are now reported to the SEC. Despite continuous discussions of whether hedge funds' fees are excessive and their closings, the hedge fund industry remains at peak net assets levels of around $4 trillion ( Figure 2 ). Family Offices Family offices are investment firms that solely manage the wealth of family clients. They do not offer their services to the public and are generally exempt from SEC registration requirements. According to a 2018 report, around two-thirds of family offices were established after 2000. Owing to their exclusivity, family offices receive minimal regulation and oversight. They have grown rapidly in recent years and are reportedly increasingly becoming an option for some hedge fund managers, who solely manage their own money. Public Versus Private Funds Table 2 compares public and private funds' characteristics. The main differences between public and private funds include the following examples: Risk âprivate funds normally invest in higher-risk assets and deploy more volatile investment strategies. For example, certain private funds focus on funding for startups, which are inherently riskier with higher possibilities for business failure. Certain private funds also have a greater ability to borrow money to invest (leverage), which could multiply the funds' risks and returns. Regulation âprivate funds face less regulation relative to public funds. For example, whereas public funds generally have to calculate daily valuation and maintain periodic public reporting, private funds are not subject to such mandates. Investor access â private funds are limited as to the type and the number of investors they can reach, while public funds are available to all investors. These restrictions are meant to protect certain retail investors who are perceived as less sophisticated, given the generally higher risk and lower levels of regulation. Portfolio company involvement â a private equity or venture capital fund typically uses client funds to obtain a controlling interest in a nonpublicly traded company (called a portfolio company). This controlling interest normally allows the private fund to have a say in the portfolio company's operations. Public funds, in contrast, typically do not directly affect portfolio company management and operations, except through shareholder voting processes. Liquidity â liquidity refers to how easy it is to buy and sell securities without affecting the price. Public funds are considered liquid for investors because of their redemption or exchange trading features, whereas private funds are considered illiquid. H olding period Private funds often invest in private securities that are not publicly traded. This causes private funds to normally have to wait for three to seven years before a "liquidity event" can occur. The liquidity events are typically company buyouts or initial public offerings (IPOs). Private funds typically realize the gains or losses of their investments only when portfolio companies are sold or go public. Public funds mostly invest in publicly traded companies that are considered to offer immediate liquidity. Public funds are not restricted from investing in private securities, but certain public fund regulatory requirements, such as daily valuation, make private investment operations less practical for public funds. As such, public funds largely focus on publicly traded securities and have not significantly undertaken private securities investments. Publicly traded private funds Some of the world's largest private fund managers are publicly traded, and thus able to offer company stock level liquidity. This means that public investors can directly purchase these fund companies' stocks and gain exposure to the companies' private fund investment portfolios as a whole. Publicly listed asset management firms include Amundi Group, Man Group, Och-Ziff Capital Management Group, Blackstone Group, and KKR. In 2017, they managed $2.4 trillion combined. Publicly traded private funds must concurrently adhere to private fund compliance requirements and restrictions, as well as public security offering standards. These private funds separately answer to both their direct fund investors and public shareholders. Other Forms of Asset Management Other forms of asset management do not fit tightly into the public or private fund categorization. Business Development Companies Business development companies (BDCs) are closed-end funds that primarily invest in small and developing businesses, and that generally provide operational assistance to such businesses in addition to funding. Congress created BDCs in 1980 in amendments to the Investment Company Act of 1940 to "make capital more readily available to small, developing, and financially troubled companies that are not able to access public markets or other forms of conventional financing." BDCs are not required to register with the SEC as investment companies, and thus face much less regulation than mutual funds. But they do offer their securities to the public, and their public offerings are subject to full SEC reporting requirements. Fund of Funds A fund of funds is an investment fund that invests in other funds. The fund of funds design aims to achieve asset allocation, diversification, hedging, or other investment objectives. The SEC estimates that almost half of all registered funds invest in other funds. Operational Components The asset management industry operates in a complex system with many components, including different types of funds and various intermediaries. This section explains the operation of a typical public fund as well as other prominent actors supporting the fund and the efficient operations of the industry. Operation of a Fund Funds typically operate through asset management companies (AMCs). The largest AMCs, as measured by assets under management, are shown in Table 1 . The AMCs can manage multiple funds of different types. Each fund has an Investment Management Agreement that designates the AMC to manage the fund's portfolio composition and trading. As Figure 3 illustrates, the end investors own the fund and contribute cash for its shares, custodians safeguard the fund assets, and the fund can also interact with certain counterparties for other transactions. Key Intermediaries The main players supporting the asset management industry include those who are more directly related to the flow of capital, such as financial advisers and others who serve back-office or administrative functions, such as data and research, asset safekeeping, and shareholder voting. Because funds are also financial products that are sold to investors, investment advisers and broker-dealers are the most commonly used retail sales and distribution channels. This section discusses several selected groups of players that frequently appear in asset management policy discussions. Investment Advisers An investment adviser is "any person or firm that for compensation is engaged in the business of providing advice to others or issuing reports or analysis regarding securities." Investment advisers generally include money managers, investment consultants, financial planners, and others who provide advice about securities. Investment advisers meeting the SEC legal definition must register with the SEC. As of 2018, the SEC oversaw around 13,200 registered investment advisers. Broker-Dealers Brokers and dealers are often discussed together, but they are two different types of entities. Brokers conduct securities transactions for others. They are generally paid a commission on securities sales. Dealers conduct securities transactions for their own accounts. Most brokers and dealers must register with the SEC and also comply with the guidance of self-regulatory organizations (SROs). The Financial Industry Regulatory Authority (FINRA) is the main SRO for the broker-dealer industry. FINRA writes and enforces broker-dealer rules, conducts examinations, and provides investor education. As of 2018, FINRA supervises around 3,596 member firms and 626,127 individual registered reps. Custodians Custodians provide safekeeping of financial assets. They are financial institutions that do not have legal ownership of assets but are tasked with holding and securing the assets, among other administrative functions. As mentioned in more detail in the " Asset Management Risks and Regulation " section of this report, client assets are not owned by an adviser or fund. As part of the regulatory requirements to protect investors, client assets are generally required to be safeguarded by a qualified custodian who maintains possession and control of the assets. In the past 90 years, financial custody has evolved from a system of self-custody to custodians playing key component of asset management operations. Today, four banks (BNY Mellon, J.P. Morgan, State Street, and Citigroup) service around $114 trillion of global assets under custody. Information Services The asset management industry in its essence is also an investment research industry that aggregates data and analysis for investment decision-making. Owing to the sophistication of the industry's technology and analysis, there are many data vendors and research providers, including national exchanges, data and technology aggregators, and sell-side researchers involved. The Proxy System A proxy vote is a vote cast by others on behalf of a shareholder who may not physically attend a shareholder meeting. This is how the vast majority of shareholder votes are cast. The SEC requires investment managers to vote as proxies in the best interest of their clients and disclose their voting policies and records to clients. During the 2018 shareholder meeting season, there were more than 4,000 shareholder meetings involving over 259 million proxy votes. Under the current system, shareholders cast their votes through a variety of intermediaries that assume the functions of forwarding proxy materials, collecting voting instructions, voting shares, soliciting proxies, tabulating proxies, and analyzing proxy issues. Different aspects of this complex system have attracted years-long policy debates regarding proxy reform. Regulatory and Risk Mitigation Frameworks The asset management industry's legislative history is relatively long and complex. The current regulatory regime governing the asset management industry was not a comprehensive design from inception, but rather developed through many iterations of adjustments and expansions. Therefore, the asset management industry is overseen by a somewhat fragmented regulatory regime with areas of disconnect between business practices and the legal definitions describing them. Congress created the SEC during the Great Depression to restore public confidence in the U.S. capital markets. Early policymaking in the 1930s focused on full disclosure, with the specific intention that publicly traded companies tell the whole truth about any material issues pertaining to their securities and the risks associated with investing in them. However, Congress realized that the disclosure-based approach alone was not enough to deter fraudulent and abusive activities in the asset management industry, which flourished in the 1920s and 1930s. Congress thus directed the SEC to conduct a 1Â½-year study of the issue in the Public Utility Holding Company Act of 1935. The SEC took four years, resulting in a four-part study with six additional supplemental reports. Based on the SEC research and subsequent hearings, in 1940, Congress introduced two new laws to govern the asset management industryâthe Investment Company Act of 1940 and the Investment Advisers Act of 1940. These statutes and regulations required those who manage and distribute funds to treat investors fairly and honestly. The textbox below describes the individual laws, which generally apply to the asset management industry as follows: Asset management companies must comply with the Investment Company Act of 1940 or gain exemption from its requirements. Funds' portfolio managers or investment advisers generally must register with the SEC under the Investment Advisers Act of 1940. The funds themselves are securities, and thus subject to federal securities regulation in relation to securities offering and trading, including the Securities Act of 1933 and the Securities Exchange Act of 1934. Asset Management Risks and Regulation Compared With Banking After the 2007-2009 financial crisis, Congress directed more attention toward financial services sector risks and policy solutions. In some congressional discussions, risks in the banking and asset management industries were jointly debated. Although similarities exist between the two industries' financial risks, there are fundamental differences. These differences are derived from the industries' different business models, risk controls, and risk mitigation backstops. Agent-Based Versus Principal-Based Models The asset management framework is an agent-based model that separates investment management functions from investment ownership. This is different from the principal-based model for banking, in which banks own and retain the assets and risks. In many ways, asset managers are viewed as agents that perform investment management services. They are compensated through service or performance fees, but otherwise they are insulated from the investment returns or their clients' account losses. Because their clients' assets are not owned by the funds, asset managers routinely exit the market without significant market impact. Even when under market stress, the risks associated with asset managers winding down differ greatly from those associated with bank liquidations. Whereas bank failures may lead to government financial intervention for either recovery or resolution, asset managers do not own or guarantee client assets. Their clients bear investment performance risks and can directly transfer assets out of failing asset management firms. With that said, macro-prudential tools for detecting and mitigating systemic risks in the banking sector have been considered for asset management firms. For example, the Dodd-Frank Act mandated the SEC implement annual stress testing for certain asset managers. Disclosure Requirements Disclosure requirements are the cornerstone of securities regulation. The purposes of and requirements for disclosure differ for public and private funds. Public funds normally provide public disclosures to inform investors. Private funds normally provide SEC-only disclosures that allow the agency to monitor risks and inform policy, while maintaining confidentiality. Public Disclosure Public disclosures allow the public to make informed judgments about whether to invest in specific funds by ensuring that investors receive significant information on the funds. The disclosure-based regulatory philosophy is consistent with Supreme Court Justice Louis Brandeis's famous dictum that "sunlight is said to be the best of disinfectants; electric light the most efficient policeman." Public disclosures, including mutual fund and ETF prospectuses, are available for free from the SEC public disclosure portal. SEC-registered investment advisers, for example, are also required to publicly report their business operations and certain disciplinary events. Nonpublic SEC-only Disclosure A number of SEC-only reporting requirements apply to public and private funds and their advisers. The private disclosures are often for purposes of regulatory review, risk monitoring, and policymaking. The SEC normally does not make information that identifies any particular registrant publicly available, although it can release certain information in aggregate and use the information in enforcement actions. Examples of private disclosure include public fund liquidity position reporting and periodic reporting of private funds by SEC-registered investment advisers pursuant to Dodd-Frank Act requirements. Investor Access Restrictions Public funds are open to all investors, but private funds' investor access is restricted by several intersecting federal laws that govern different regulatory requirements for securities offerings, investment management companies, and investment advisers. Only those investors who meet certain definitions can invest in private funds without triggering related regulatory requirements. Funds can avoid additional regulatory requirements by adhering to restrictions on the types of investors permitted to invest in the fund; some examples follows: Accredited investorâif a fund's investors meet the definition, such a fund could qualify for private securities exemption. Qualified clientâif a fund's investors meet the definition, the fund manager could receive performance-based compensation. Qualified purchaserâif a fund's investors meet the definition, the fund could be exempted from registering as an investment company. Most private funds choose to comply with investor definitions to preserve their scaled-down regulatory requirements relative to public funds. The specifics of the investor access definitions, especially the accredited investor definition, have been a source of policy debate. Examinations The SEC's Office of Compliance Inspections and Examinations (OCIE) is responsible for conducting examinations and certain other risk oversight of the asset management industry. In addition, self-regulatory agencies, such as FINRA, also conduct examinations of their members under SEC oversight. OCIE examinations focus on compliance, fraud, risk monitoring, and informing policymaking. OCIE has 1,000 employees in 11 regional offices and headquarters. Approximately 10,000 mutual funds and ETFs, 13,200 investment advisers, and 3,800 broker-dealers, among other regulated entities are subject to potential examinations. The OCIE completed more than 3,000 examinations in fiscal year 2018. Securities Investor Protection Corporation The federal government does not guarantee or insure the value and performance of investment management accounts. As the common investment disclaimerâ"past performance is no guarantee of future results"âsuggests, due to unpredictable market fluctuations, capital markets investors could experience underperformance or lose their principal. Investors should be prepared to absorb their own losses. When a capital markets firm fails, certain losses could possibly receive limited payouts for investors from the Securities Investor Protection Corporation (SIPC). However, the nature and the level of payouts are different than those associated with the banking insurer Federal Deposit Insurance Corporation (FDIC). SIPC is a nongovernment nonprofit corporation created by the Securities Investor Protection Act. It insures up to $500,000 of cash and securities (with a $250,000 limit for cash) in brokerage accounts to protect customers against cash and securities losses if their brokerage firm fails. SIPC only protects the custody function of the broker-dealers, which means it works to restore any assets missing from customers' accounts but it does not protect the principal against the decline in market value of investments. The FDIC, in contrast, is a government organization that insures up to $250,000 of deposits, including principal, in banks and thrift institutions when these institutions fail. Risk Mitigation Controls The asset management industry faces a number of risks. Some of them are inherent in the industry's agent-based business model whereas others are more common to financial services institutions. This section lays out examples of the risk factors and attendant mitigation controls to help policymakers better comprehend the rationale behind the regulatory requirements. This section also contains a summary table ( Table 3 ) providing context on how certain existing regulations fit into risk mitigation policy goals. Conflict of Interest Context : Conflicts of interest may occur in any principal-agent paradigm within which one entity (agent) makes decisions on behalf of another entity (principal). In the context of asset management industry client relationships, the central concern is that asset managers (agents) may not act in the best interest of investors (principals). An example of a conflict of interest would be an investment adviser directing clients' investments toward products that generate higher sales commissions, rather than products that best fit the clients' financial needs. Example s of mitigation controls : SEC-registered investment advisers are fiduciaries, meaning they have a legal obligation to act in the best interest of their clients. FINRA also casts a similar, yet less rigorous suitability requirement for broker-dealers. The standard requires broker-dealers to make investment recommendations to suit client financial needs. In addition, the SEC adopted Regulation Best Interest in June 2019 to address certain conflict of interest concerns in financial advisory services. The proposal aims to further prevent financial advisers from placing their own financial or other interests ahead of the best interest of their clients. Liquidity Context : Liquidity, as mentioned previously, is commonly defined as the ease of buying or selling assets without affecting their prices. The easier the assets are to sell, the higher their liquidity. The liquidity issue could be especially important during market distress, when factors like cash needs and exceptional volatility in asset valuations could drive panic reactions in the market. Different funds have different types of liquidity risk concerns. Mutual funds that allow investors to redeem their shares daily need to maintain sufficient liquid assets to meet shareholder redemptions and minimize the impact of the redemptions on the funds' remaining shareholders. Private funds present different concerns because, in most cases, their investors enter into illiquid investments knowing that they could experience several years of holding periods. Private funds generally do not promise daily redemption, and investors in private funds cannot easily sell their positions to meet urgent cash needs. Example s of mitigation controls : Funds that offer frequent redemption as a product feature must maintain liquid assets to meet potential redemptions. Under the SEC liquidity rule, such funds must categorize their investments into four different types and limit their illiquid investments to no more than 15% of the funds' net assets. Leverage Context : Leverage generally refers to the use of borrowed funding to invest, which may multiply risks and returns. High leverage could complicate funds' investment structures and increase risks to both individual investors and the financial system as a whole, due to its effects in multiplying both losses and returns. Examples of mitigation controls: Mutual funds and closed-end funds are subject to a 300% asset coverage requirement. This is a leverage ratio of 33%, meaning the fund cannot borrow an amount exceeding a third of its portfolio size. By contrast, most private funds do not have leverage restrictions. Operational Risks Context : Operational risks arise from operational challenges and business transaction issues. Operational risks are especially important for the asset management industry because the industry manages client accounts. Accurate client account recordkeeping and transfer, asset safeguards, information sharing, and cybersecurity are some areas of operational importance. Examples of mitigation controls: The SEC's custody rule requires registered investment advisers to engage qualified custodians to (1) have possession and control of assets, (2) undergo annual surprise examinations, (3) have a qualified custodian maintaining client assets, and (4) send account statements directly to the clients instead of to funds, among other requirements. Recent Trends Over the past several decades, the asset-management industry has undergone several changes that may have important implications for public policy. This section discusses a number of these changes, including (1) the industry's overall growth; (2) increased reliance on capital markets for financing rather than bank loans by American businesses; (3) a shift from active to passive investment style; and (4) the expansion of private securities markets. The Asset-Management Industry's Growth In the past two decades, the asset-management industry has grown significantly because of increased use of defined-contribution retirement plans, asset appreciation, and changes in investment styles and preferences, among other things (see Figure 1 and Figure 2 ). Over the past 70 years, investors have largely shifted from investing directly themselves to investing indirectly through asset managers. For example, in the 1940s, almost all corporate equities were held by households and nonprofits, whereas in 2017, direct holdings by individuals made up less than 40% of total holdings. Some argue that the percentage of equity directly held by individuals could be closer to 20%. As a result of these changes, asset managers now dominate the investment decisionmaking on behalf of retail investors and other institutions. Their influence on both investors and the companies they invest in has expanded. Capital Market Financing Outpaces Bank Lending The importance of the asset-management industry has also increased because of changes in the relative importance of the capital markets and banks. Specifically, growth in capital markets financing (i.e., the issuance of bonds and other debt securities) significantly outpaced growth in bank loans ( Figure 4 ). This general trend has increased the relative importance of asset managers, who represent major holders of such bonds and debt securities. For example, mutual funds and ETFs held about 21% of all U.S. corporate bonds in 2018, more than double their percentage of such holdings in 2009. The International Monetary Fund (IMF) has observed that this shift may be attributable to tighter banking regulation, rising compliance costs, and bank deleveraging following the 2007-2009 financial crisis. As Figure 4 illustrates, U.S. capital markets play a much more dominant role in business financing relative to the Euro area. Active to Passive Investment Style Shift The asset-management industry has also witnessed a trend away from active and toward passive management, whereby asset managers do not actively select funds' portfolio assets, instead pegging investments to an index, such as the S&P 500. In recent years, passive investment through index mutual funds and ETFs has displaced active investment ( Figure 5 ). This trend has mostly been driven by passive funds' lower costs through management fee savings and superior performance. According to a 2016 S&P Global study, for example, active stock managers underperformed their passive-fund targets more than 80% of the time over 1-year, 5-year, and 10-year periods. The rise of passive investing has generated criticism from active asset managers. Some active managers are concerned that the growth of passive investing will undermine price discovery through reduced fundamental research by active asset managers. They argue this could create systemic risk concerns through correlations and volatility, affecting the efficient allocation of capital. Regarding financial stability, a recent Federal Reserve whitepaper concludes that the shift from active to passive investment has probably reduced liquidity transformation risks while amplifying market volatility and asset management industry concentration. Finally, some argued that actively managed funds perform better than passive strategies when markets are less efficient. If this argument is true, then actively managed funds may be able to capitalize on market inefficiencies caused by growth in passive investment, enabling continued growth in active management as well. Private Securities Offerings Outpace Public Offerings The asset-management industry has also taken on increased importance because of a significant rise in the volume of private securities offerings. Because many asset managers purchase large volumes of private securities, this shift has led the asset-management industry to occupy an increasingly central role in U.S. financial markets. In 2018, American companies raised roughly $2.9 trillion through private offeringsâmore than double the size of public offerings that year. The increase in the volume of private securities offerings has also attracted the attention of policymakers, some of whom have proposed measures to increase investor access to private securities markets. For example, a type of closed-end fund, referred to as an interval fund, can conduct periodic repurchases generally every 3, 6, or 12 months. Because of the longer intervals, these funds are better able to involve less liquid assets such as private securities. In a 2017 report, the Treasury recommended the SEC review the rules governing interval funds. The SEC also explored the potential of interval funds in its 2019 concept release regarding private securities markets. Policy Issues The increased importance of the asset-management industry raises a variety of policy issues. This section discusses several of these issues, including financial stability, investor protection, and financial innovation. Financial Stability Financial stability typically refers to the ability of the financial system to withstand economic shocks and satisfy its basic functions: financial intermediation, risk management, and capital allocation. Policymakers attempting to safeguard financial stability generally focus on the minimization of s ystemic risk âthe risk that the entire financial system will cease to perform these functions. Former Federal Reserve Governor Daniel Tarullo has identified four possible sources of systemic risk: Domino or spillover effects â when one firm's failure imposes debilitating losses on its counterparties. Feedback loops â when fire sales of assets depress market prices, thereby imposing losses on all investors holding the same asset class. Contagion effects âa run in which investors suddenly withdraw their funds from a class of institutions or assets. Disruptions to critical functions â when a market can no longer operate because of a breakdown in market infrastructure. According to an international financial organization, the Financial Stability Board, asset-management companies did not display particularly large financial stability concerns during the 2007-2009 financial crisis, with the exception of money market mutual funds (MMFs). This is a result of the fact that asset managers are generally agents who provide investment services to clients rather than principals who invest for themselves. They manage large amounts of assets, but do not have direct ownership of them. As such, asset managers are largely insulated from client account losses. This does not mean that the industry is free of financial stability concerns. Actual market events show that even perceived-to-be-safe funds could trigger financial system instability. For example, the money market mutual fund industry triggered market disruptions in 2008 and accelerated the 2007-2009 financial crisis. Before that, hedge fund Long-Term Capital Management's failure in 1998 also demonstrated that the transmission of risks from one event can broadly affect the functioning of the financial system. The Financial Stability Board identified several asset management structural vulnerabilities that could present financial stability risks. These vulnerabilities include liquidity mismatch, leverage within investment funds, operational risk and challenges under stressed conditions, and certain lending activities of asset managers and funds. This section uses three examplesâmoney market mutual funds, ETFs, and leveraged lendingâto illustrate the context of selected asset management structural vulnerabilities and the extent to which these vulnerabilities could cause financial stability concerns. Money Market Mutual Funds139 Money market mutual funds (MMFs) represent one corner of the asset-management industry that has generated systemic-risk issues. MMFs are mutual funds that invest in short-term debt securities, such as U.S. Treasury bills or commercial paper (a type of corporate debt). Because MMFs invest in high-quality, short-term debt securities, investors generally regard them as safe alternatives to bank deposits even though they are not federally insured like bank deposits. Like the shares of other mutual funds, MMF shares are generally redeemed at net asset value (NAV), meaning investors sell shares back to a fund at a per share value of the fund's assets minus its liabilities. Some MMFs, however, operate somewhat differently than most other mutual funds. Specifically, some MMFs aim to keep a stable NAV at $1.00 per share, paying dividends as their value rises and thereby even more closely mimicking the features of bank deposits. If its stable NAV drops below $1.00, which rarely occurs, it is said that the MMF "broke the buck." On September 15, 2008, Lehman Brothers Holdings Inc. filed for bankruptcy . The next day, one MMF, the Reserve Primary Fund, broke the buck when its shares fell to 97 cents after writing off the debt issued by Lehman Brothers. This event triggered an array of market reactions and accelerated the 2007-2009 financial crisis. Ultimately the Treasury Department intervened with an emergency guarantee program for MMFs as one of the ways to address the crises. MMFs thus became a known financial stability concern, demonstrating clearly that they are susceptible to sudden large redemptions (runs) that can cause dislocation in short-term funding markets. MMFs are vulnerable to runs because shareholders have an incentive to redeem their shares before others do when there is a perception that the fund could suffer a loss. To address this concern, the SEC promulgated MMF rules in 2010 and 2014 mandating that institutional municipal and institutional prime MMFs float their NAV from stable value. The SEC also provided new tools to the MMFs' boards, allowing them to impose fees and redemption gates to discourage runs. Policy discussions continued after the 2014 revisions, especially about whether the MMFs' NAV should be floating or stable, generating controversy and attracting congressional interest. For example, the Consumer Financial Choice and Capital Markets Protection Act of 2019 (S. 733) would require the SEC to reverse the floating NAV back to a stable NAV for the affected MMFs. A floating NAV reflects more closely the actual market value of the fund. Proponents believe the floating NAV could (1) reduces investors' incentive in distressed markets to run because of the difference between stable value and the actual market value; (2) allows investors to understand price movements and market fluctuations, and (3) removes the implicit guarantee of zero investor losses through stable value that could lead to unrealistic expectations of safety. Opponents believe that floating NAV does not solve the issue of investors fleeing. For example, one academic research article concludes that European MMFs that offer similar structures to floating NAV did not experience significant reduction in run propensity during market distress. In addition, providing floating NAV requires calculation time and more tax, accounting, and disclosure related business model changes. Opponents also point to the volume decline of affected MMFs since the reform as an example of a shrinking MMF market that may create working capital shortages for business and municipal operations. Others argue that because the MMF reform has been fully implemented since October 2016, it makes sense to study the actual effectiveness and impact of the reform before considering changes. Exchange-Traded Funds Some commentators have also argued that ETFs raise certain systemic-risk concerns. The vast majority of all ETF assets are passively managed or index-based; thus investors often view the high growth in ETFs as one of the driving forces behind the passive investment trend the report discusses in the previous section. With U.S. ETFs accounting for more than $3.4 trillion in assets under management and 30% of all U.S. equity trading volume in 2018, ETFs' scale and continued growth give rise to financial stability considerations. The key systemic-risk issue surrounding certain ETFs involves liquidity mismatch . Liquidity mismatch generally points to a relatively complex ETF operational structure that offers buying and selling activities at both the fund level and the portfolio asset level. If the amount of liquidity differs between the two levels, for example, if the ETF shares trade differently than the underlying portfolio ETF holdings of stocks or other assets, there could be a liquidity mismatch. Some argue this liquidity mismatch could amplify market distress and potentially trigger fire sales that further depress asset prices and worsen market conditions. In contrast, others have argued that liquidity provision through the ETF structure is additive, meaning an ETF's liquidity is at least as great as that of its underlying assets. Other commentators have argued that not all ETFs are created equal. The majority of ETFs are "plain-vanilla" index-tracking products that are considered lower risk. However, there is also a growing subset of complex, higher-risk ETFs that is a source of greater concern. To add to the confusion, the industry does not currently have a consistent naming convention to clearly differentiate between the types of products that are higher risk. On September 26, 2019, the SEC established a comprehensive listing standard for ETFs only. Prior to that, prospective ETF issuers typically must have been approved by the SEC under an exemption to the Investment Company Act. The new ETF approval process replaces individual exemptive orders with a single rule for plain-vanilla ETFs. The approach excludes certain higher-risk ETFs and mandates new disclosures and other conditions on index-based and actively managed ETFs. Leveraged Lending Leveraged lending, also referred to as leveraged loans, is financing made to below investment grade companies (i.e., companies with a credit rating below BBB-/Baa3), which tend to be highly indebted. Leveraged lending received its name because of the recipients' high-debt-to-earnings leverage. Most leveraged loans are syndicated, meaning that a group of bank or nonbank lenders, including asset managers, collectively funds a single borrower, in contrast to a traditional loan held by a single bank. Some regulators consider syndicated loans to be an emerging regulatory gray area that is not fully overseen by either banking or securities regulators. Leveraged loans generally present higher risks than other forms of lending because they involve riskier borrowers and often feature relatively weak investor safeguards (indicated by a weak "covenant") and relatively weak capabilities for loan repayment, indicated by high ratios of debt to earnings before interest, tax, depreciation and amortization (EBITDA). During the past decade, the U.S. leveraged loan market experienced rapid growth, deteriorating credit quality, and decreased repayment capabilities ( Table 4 ). However, the total amount of leveraged loans outstanding remained relatively low at around $1 trillion as of 2018. Nonbanks make up around 90% of the leveraged loan primary market investor base as of 2017. Mutual funds and hedge funds held 21% and 5% of leveraged loans in 2017 respectively, with mutual funds' share of the market more than doubling between 2006 and 2017. In addition, nearly 60% of U.S. leveraged loans are packaged into a type of structured credit called a collateralized loan obligation (CLO). CLOs are then sold to institutional investors, including asset managers, banks, and others, with the asset management industry holding the riskier CLO tranches and banks holding the higher-quality tranches. Mutual funds and other investment vehicles hold more than 20% of CLOs. Multiple financial regulators and Members of Congress have voiced concerns about leveraged loans' risks and implications for financial stability. However, other commentators have argued that leveraged loans are resilient and stable, claiming unwarranted fears. Leveraged lending raises a variety of policy issues, including the following: Market o pacity . Leveraged lending, particularly the increase of covenant-lite loans, couples high risk with relative lack of transparency, potentially leading to unexpectedly high losses and shocks to the financial system ( Table 4 ). It is unclear, as discussed below, the degree to which contagion across the financial system would result from this. Liquidity mismatch. Public funds expect easy entry and exit through daily redemption or intraday trading, whereas leveraged loans, which could serve as underlying assets to funds, trade infrequently and take longer to settle. These features of leveraged loans have prompted the Chairman of the SEC to caution that investors should be aware of their relative illiquidity. The loan syndication process and federal oversight. Leveraged loans are usually syndicated by groups of institutional investors, including asset managers. Some regulators and researchers worry that certain leveraged loans are less regulated than other financial products like bonds and bank loans. Contagion risk . Given the leveraged loan market's size and investor composition, some experts have argued that leveraged lending raises concerns about financial contagion. However, most investors in leveraged loans are nonbanks, with the asset management industry holding a significant portion of total outstanding exposure. As a result, some commentators have argued that direct financial losses from leveraged loans would largely stop at the investor level, instead of being multiplied throughout the interconnected financial system by banks. The Chairman of the Federal Reserve, for example, has indicated that while leveraged loans raise some concerns, they "do[es] not appear to present notable risks to financial stability." Data gap. Some analysts have argued that the lack of available information through data collection and sharing on CLO holdings has prevented the industry and the regulators from monitoring risks in the leveraged lending market. Investor Protection Investor protections attempt to prevent investors from being harmed due to inappropriate risk exposure, conflicts of interest, or abusive conduct. This section discusses certain policy debates concerning investors' access to private funds, fund disclosures, and asset managers' voting of clients' stocks. Defining Accredited Investors173 Some private funds are limited to "accredited investors"âa limitation that has generated debate about which categories of investors should be eligible for this status. An individual can qualify as an accredited investor if he or she (1) earned more than $200,000 (or $300,000 together with a spouse) in annual gross income during each of the prior two years and can reasonably be expected to earn a gross income above that threshold in the current year, or (2) has a net worth of more than $1 million (either alone or together with a spouse), excluding the value of their primary residence. Institutions can also qualify as accredited investors if they own more than $5 million in assets. A number of regulated entities, such as banks, insurance companies, and registered investment companies, automatically qualify as accredited investors. Some commentators have criticized the SEC's existing rules for determining accredited investor status, arguing that income and net-worth criteria bear little relationship to investor sophistication. These critics contend that the current accredited investor definition is both over- and under-inclusive, capturing wealthy but unsophisticated investors while excluding those who are well-informed but less affluent. In addition, given the trend of private securities offerings outpacing public offerings, some observers are concerned about ensuring equal access to investment opportunities and the diversification benefits from allocating capital across the full spectrum of public and private securities and funds. Commentators have accordingly discussed expanding the accredited investor definition to (1) account for individuals with financial training or demonstrated financial experience, (2) allow investors to opt-in to private market investment opportunities, or (3) expand the eligible accredited investor base in other ways, subject to certain limitations. Voting of Proxy Shares Proxy voting represents another issue involving investor protection that has taken on increased significance. Asset managers have fiduciary duties to vote the proxies of their public company voting shares on their clients' behalf. Some asset managers outsource proxy voting and research to proxy advisory firms, whereas others operate these functions in-house. Commentators have identified a number of policy issues involving the proxy system, including (1) stewardshipâwhether asset managers and proxy advisory firms are in fact voting in their clients' best interests; and (2) accuracyâwhether the actual votes are tabulated correctly. These topics are critically important because proxy voting can often decide the strategic directions of publicly traded companies. To address these issues, the SEC issued a concept release soliciting public feedback on the proxy system in 2010. The SEC has also held multiple roundtables to discuss the proxy process, most recently in November 2018. Fund Disclosure Ensuring full and fair disclosure of material information is a key objective of the federal securities laws. To promote these goals, the SEC has implemented a series of initiatives to improve the investor experience by updating the design, delivery, and content of fund disclosure. For example, after longstanding policy debate, the SEC adopted Rule 30e-3 in June 2018 to allow certain investment funds to transmit shareholder reports digitally as the default option. Supporters of this rule point to its environmental and economic benefits, including its estimated $2 billion savings over a 10-year period. In contrast, the rule's opponents have voiced concerns over the usefulness of electronic reports for elderly and rural investors who may lack access to or familiarity with the Internet. The SEC continues to seek public input on the fund disclosure and retail investor experience, including shareholder reports, prospectuses, advertising, and other types of disclosure. Financial Innovation Financial innovation is an integral part of the asset management industry's development. Innovation raises policy and regulatory issues, including (1) whether new technologies and practices have outgrown or are sufficiently served by the existing regulatory system; (2) how the regulatory framework can achieve the goal of "same business, same risk, same regulation"; and (3) how to protect investors without hindering innovation. This section explains policy challenges involving these general issues. Digital Asset Custody Digital-asset custody has recently attracted regulatory attention. Under the SEC's Custody Rule, custodians of client assets must abide by certain requirements designed to protect client funds from the possibility of being lost or misappropriated. This rule was developed for the traditional asset management industry that dealt in instruments with more tangible tracks of physical existence and recording, and thus could pose unique challenges for digital assets often without tangible representation. For example, the digital asset industry's common practice thus far focuses on the safeguarding of private keys. Private keys are unique numbers assigned mathematically to digital asset transactions to confirm ownership, raising questions about the nature of "possession" and "control" of a digital asset. A March 2019 letter from the SEC to the digital asset industry solicited public input regarding the custody of digital assets. In the letter, the SEC summarized a number of policy issues involving the custody of digital assets, including the use of distributed ledger technology (DLT) to record ownership, the use of public and private cryptographic key pairings to transfer digital assets, the ability to restore or recover lost digital assets, the generally anonymous nature of DLT transactions, and the challenges auditors face in examining DLT and digital assets. Congressional hearings have also addressed the issue of digital asset custody. Nonfinancial Technology Platforms A second recent development in financial technology that raises important policy questions involves the entry of nonfinancial technology platforms into the financial services industry. Large technology firms such as Amazon, Facebook, and Uber have all started financial-services operations as potential competitors and partners to the asset-management industry. Although the scale of this innovation has not been broadly felt, industry experts like the World Economic Forum predict that platforms offering the ability to engage with different financial institutions from a single channel will likely become the dominant model for the delivery of financial services. Technology firms have the potential to disrupt the asset-management industry through digital asset transactions, robo advisory services, and direct asset management product distribution to investors. Investment researchers argue that Amazon, for example, could use the trust of its brand and distribution channels to become "an arms-length distributor of funds." The influence of technology platforms has already been realized in certain overseas markets. For example, Ant Financialâan affiliate of Alibaba Groupâmanages the world's largest MMF, with 588 million Alipay users, a third of the Chinese population, among its investors. This entry of technology companies into financial services raises a number of concerns related to these companies' power, their control over user data, and personal privacy. Facebook Libra's ETF-Like Characteristics Facebook is among the technology companies that have expressed interest in entering financial services. In June 2019, the social media company announced its intention to develop a new cryptocurrency called Libraâa revelation that has attracted congressional interest. At a hearing addressing the issue, several Members of Congress questioned Facebook officials about how Libra should be regulated and whether it meets the existing regulatory definition of an ETF, among other issues. Some commentators have argued that because Libra will be backed by reserve assets that certain authorized sellers can exchange for units of the cryptocurrency, its operational structure is similar to that of ETFs, which rely on a roughly comparable creation and redemption process. Although Facebook officials acknowledged that Libra uses operational mechanisms that are similar to ETFs, the company maintained that the cryptocurrency should not be considered an ETF because it is intended to operate as a payment tool rather than an investment vehicle. If Libra did qualify as an ETF, it would fall under the SEC's oversight and require regulatory approval. The SEC is reportedly evaluating whether the cryptocurrency will fall within that category. Some Members of Congress have also expressed opposition to Facebook's Libra project. Members of the House Financial Services Committee have circulated a discussion draft, the Keep Big Tech Out of Finance Act , which would prevent certain large technology firms from creating digital assets intended to be used widely as a medium of exchange, unit of account, or store of value. Conclusion The asset-management industry is large, complex, and governed by a host of intersecting federal regulations primarily overseen by the SEC. The industry has undergone a number of changes, including increases in its size, changes in the relative importance of capital markets and banks, shifts away from active and toward passive investment management, and increases in the volume of private securities offerings. Some of these trends raise important policy issues, including financial stability, investor protection, and the promotion of financial innovation. As a general matter, asset-management companies have generated fewer financial-stability concerns than some other financial institutions. This is largely because asset managers generally are agents who provide investment services rather than principals who invest for their own accounts. But it does not mean that the industry is free of financial stability risks. Specific structural vulnerabilities, for example, redemption risk and liquidity mismatch, among other vulnerabilities, could be observed in the context of certain MMFs, ETFs, and leveraged lending, but their implications are uncertain. The asset-management industry is governed by a range of investor-protection rules that raise various policy issues, including the appropriate level of investor access to certain types of funds, fund disclosure, and proxy voting. Finally, the need to balance financial innovation with investor protection has generated a number of important debates surrounding digital asset custody and the entry of technology firms into financial services. Appendix. Related CRS Products CRS Report R45221, Capital Markets, Securities Offerings, and Related Policy Issues , by Eva Su. CRS Report R45318, Exchange-Traded Funds (ETFs): Issues for Congress , by Eva Su. CRS Report R45308, JOBS and Investor Confidence Act (House-Amended S. 488): Capital Markets Provisions , coordinated by Eva Su. CRS Report R43413, Costs of Government Interventions in Response to the Financial Crisis: A Retrospective , by Baird Webel and Marc Labonte. CRS In Focus IF10700, Introduction to Financial Services: Systemic Risk , by Marc Labonte. CRS In Focus IF11062, Introduction to Financial Services: Capital Markets , by Eva Su. CRS In Focus IF11278, Accredited Investor Definition and Private Securities Markets , by Eva Su. CRS In Focus IF10747, Private Securities Offerings: Background and Legislation , by Eva Su. CRS In Focus IF11004, Financial Innovation: Digital Assets and Initial Coin Offerings , by Eva Su. CRS In Focus IF11256, SEC Securities Disclosure: Background and Policy Issues , by Eva Su. CRS In Focus IF11320, Money Market Mutual Funds: A Financial Stability Case Study , by Eva Su.	Summary:	gov_report	1,024	null	73
crs_R45811	crs_R45811_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The United States has actively pursued the development of hypersonic weapons as a part of its conventional prompt global strike (CPGS) program since the early 2000s. In recent years, it has focused such efforts on hypersonic glide vehicles and hypersonic cruise missiles with shorter and intermediate ranges for use in regional conflicts. Although funding for these programs has been relatively restrained in the past, both the Pentagon and Congress have shown a growing interest in pursuing the development and near-term deployment of hypersonic systems. This is due, in part, to the growing interest in these technologies in Russia and China, leading to a heightened focus in the United States on the strategic threat posed by hypersonic flight. Open-source reporting indicates that both China and Russia have conducted numerous successful tests of hypersonic glide vehicles, and both are expected to field an operational capability as early as 2020 . Experts disagree on the potential impact of competitor hypersonic weapons on both strategic stability and the U.S. military's competitive advantage. Nevertheless, current Under Secretary of Defense for Research and Engineering (USD R&E) Michael Griffin has testified to Congress that the United States does not "have systems which can hold [China and Russia] at risk in a corresponding manner, and we don't have defenses against [their] systems." Although the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (FY2019 NDAA, P.L. 115-232 ) accelerated the development of hypersonic weapons, which USD R&E identifies as a priority research and development area, the United States is unlikely to field an operational system before 2023. However, the United States, in contrast to Russia and China, is not currently considering or developing hypersonic weapons for use with a nuclear warhead. As a result, U.S. hypersonic weapons will likely require greater accuracy and will be more technically challenging to develop than nuclear-armed Chinese and Russian systems. In addition to accelerating development of hypersonic weapons, Section 247 of the FY2019 NDAA required that the Secretary of Defense, in coordination with the Director of the Defense Intelligence Agency, produce a classified assessment of U.S. and adversary hypersonic weapons programs, to include the following elements: (1) An evaluation of spending by the United States and adversaries on such technology. (2) An evaluation of the quantity and quality of research on such technology. (3) An evaluation of the test infrastructure and workforce supporting such technology. (4) An assessment of the technological progress of the United States and adversaries on such technology. (5) Descriptions of timelines for operational deployment of such technology. (6) An assessment of the intent or willingness of adversaries to use such technology. This report was delivered to Congress in July 2019. Similarly, Section 1689 of the FY2019 NDAA requires the Director of the Missile Defense Agency to produce a report on "how hypersonic missile defense can be accelerated to meet emerging hypersonic threats." The findings of these reports could hold implications for congressional authorizations, appropriations, and oversight. The following report reviews the hypersonic weapons programs in the United States, Russia, and China, providing information on the programs and infrastructure in each nation, based on unclassified sources. It also provides a brief summary of the state of global hypersonic weapons research development. It concludes with a discussion of the issues that Congress might address as it considers DOD's funding requests for U.S. hypersonic technology programs. Background Several countries are developing hypersonic weapons, which fly at speeds of at least Mach 5 (five times the speed of sound), but none have yet introduced them into their operational military forces. There are two primary categories of hypersonic weapons Hypersonic glide vehicles (HGV) are launched from a rocket before gliding to a target. Hypersonic cruise missiles are powered by high-speed, air-breathing engines, or "scramjets," after acquiring their target. Unlike ballistic missiles, hypersonic weapons do not follow a ballistic trajectory and can maneuver en route to their destination. As Vice Chairman of the Joint Chiefs of Staff and former Commander of U.S. Strategic Command General John Hyten has stated, hypersonic weapons could enable "responsive, long-range, strike options against distant, defended, and/or time-critical threats [such as road-mobile missiles] when other forces are unavailable, denied access, or not preferred." Conventional hypersonic weapons use only kinetic energyâenergy derived from motionâto destroy unhardened targets or, potentially, underground facilities. Hypersonic weapons could challenge detection and defense due to their speed, maneuverability, and low altitude of flight. For example, terrestrial-based radar cannot detect hypersonic weapons until late in the weapon's flight. Figure 1 depicts the differences in terrestrial-based radar detection timelines for ballistic missiles versus hypersonic glide vehicles. This delayed detection compresses the timeline for decision-makers assessing their response options and for a defensive system to intercept the attacking weaponâpotentially permitting only a single intercept attempt. Furthermore, U.S. defense officials have stated that both terrestrial- and current space-based sensor architectures are insufficient to detect and track hypersonic weapons, with USD R&E Griffin noting that "hypersonic targets are 10 to 20 times dimmer than what the U.S. normally tracks by satellites in geostationary orbit." Some analysts have suggested that space-based sensor layersâintegrated with tracking and fire-control systems to direct high-performance interceptors or directed energy weaponsâcould theoretically present viable options for defending against hypersonic weapons in the future. Indeed, the 2019 Missile Defense Review notes that "such sensors take advantage of the large area viewable from space for improved tracking and potentially targeting of advanced threats, including HGVs and hypersonic cruise missiles." Other analysts have questioned the affordability, technological feasibility, and/or utility of wide-area hypersonic weapons defense. As physicist and nuclear expert James Acton explains, "point-defense systems, and particularly [Terminal High-Altitude Area Defense (THAAD)], could very plausibly be adapted to deal with hypersonic missiles. The disadvantage of those systems is that they can only defend small areas. To defend the whole of the continental United States, you would need an unaffordable number of THAAD batteries." In addition, some analysts have argued that the United States' current command and control architecture would be incapable of "processing data quickly enough to respond to and neutralize an incoming hypersonic threat." (A broader discussion of hypersonic weapons defense is outside the scope of this report.) United States The Department of Defense (DOD) is currently developing hypersonic weapons under the Navy's Conventional Prompt Strike program, which is intended to provide the U.S. military with the ability to strike hardened or time-sensitive targets with conventional warheads, as well as through several Air Force, Army, and DARPA programs. Those who support these development efforts argue that hypersonic weapons could enhance deterrence, as well as provide the U.S. military with an ability to defeat capabilities such as advanced air and missile defense systems that form the foundation of U.S. competitors' anti-access/area denial strategies. In recognition of this, the 2018 National Defense Strategy identifies hypersonic weapons as one of the key technologies "[ensuring the United States] will be able to fight and win the wars of the future." Programs Unlike China and Russia, the United States is not currently developing hypersonic weapons for use with a nuclear warhead. As a result, U.S. hypersonic weapons will likely require greater accuracy and will be more technically challenging to develop than nuclear-armed Chinese and Russian systems. Indeed, according to one expert, "a nuclear-armed glider would be effective if it were 10 or even 100 times less accurate [than a conventionally-armed glider]" due to nuclear blast effects. According to open-source reporting, the United States has a number of major offensive hypersonic weapons and hypersonic technology programs in development, including the following (see Table 1 ): U.S. NavyâConventional Prompt Strike (CPS); U.S. ArmyâLong-Range Hypersonic Weapon (LRHW); U.S. Air ForceâAGM-183 Air-Launched Rapid Response Weapon (ARRW, pronounced "arrow"); DARPAâTactical Boost Glide (TBG); DARPAâOperational Fires (OpFires); and DARPAâHypersonic Air-breathing Weapon Concept (HAWC, pronounced "hawk"). These programs are intended to produce operational prototypes, as there are currently no programs of record for hypersonic weapons. Accordingly, funding for U.S. hypersonic weapons programs is found in the Research, Development, Test, and Evaluation accounts, rather than in Procurement. U.S. Navy In a June 2018 memorandum, DOD announced that the Navy would lead the development of a common glide vehicle for use across the services. The common glide vehicle is being adapted from a Mach 6 Army prototype warhead, the Alternate Re-Entry System, which was successfully tested in 2011 and 2017. Once development is complete, "Sandia National Laboratories, the designer of the original concept, then will build the common glide vehiclesâ¦. Booster systems are being developed separately." The Navy's Conventional Prompt Strike (CPS) is expected to pair the common glide vehicle with a submarine-launched booster system, achieving initial operational capability (IOC) on a Virginia-class submarine with Virginia Payload Module in FY2028. The Navy is requesting $1 billion for CPS in FY2021âan increase of $415 million over the FY2020 request and $496 million over the FY2020 appropriationâand $5.3 billion across the five-year Future Years Defense Program (FYDP). U.S. Army The Army's Long-Range Hypersonic Weapon program is expected to pair the common glide vehicle with the Navy's booster system. The system is intended to have a range of 1,400 miles and "provide the Army with a prototype strategic attack weapon system to defeat A2/AD capabilities, suppress adversary Long Range Fires, and engage other high payoff/time sensitive targets." The Army is requesting $801 million for the program in FY2021â$573 million over the FY2020 request and $397 million over the FY2020 appropriationâand $3.3 billion across the FYDP. It plans to conduct flight tests for LRHW from FY2021 to FY2023, field combat rounds in FY2023, and transition to a program of record in the fourth quarter of FY2024. U.S. Air Force T he AGM-183 Air- L aunched Rapid Response Weapon is expected to leverage DARPA's Tactical Boost Glide technology to develop an air-launched hypersonic glide vehicle prototype capable of travelling at speeds up to Mach 20 at a range of approximately 575 miles. Despite testing delays due to technical challenges, ARRW completed a successful flight test in June 2019 and is expected to complete flight tests in FY2022. The Air Force has requested $382 million for ARRW in FY2021âup from $286 million in the FY2020 request and appropriationâand $581 million across the FYDP, with no funds requested beyond FY2022. ARRW is a project under the Air Force's Hypersonics Prototyping Program Element, which is intended to demonstrate concepts "to [enable] leadership to make informed strategy and resource decisions â¦ for future programs." In February 2020, the Air Force announced that it had cancelled its second hypersonic weapon program, the Hypersonic Conventional Strike Weapon (HCSW), which had been expected to use the common glide vehicle, due to budget pressures that forced it to choose between ARRW and HCSW. Air Force acquisition chief Will Roper explained that ARRW was selected because it was more advanced and gave the Air Force additional options. "[ARRW] is smaller; we can carry twice as many on the B-52, and it's possible it could be on the F-15," he explained. The Air Force will continue its technical review of HCSW through March 2020. DARPA DARPA, in partnership with the Air Force, continues to test Tactical Boost Glide, a wedge-shaped hypersonic glide vehicle capable of Mach 7+ flight that "aims to develop and demonstrate technologies to enable future air-launched, tactical-range hypersonic boost glide systems." TBG will "also consider traceability, compatibility, and integration with the Navy Vertical Launch System" and is planned to transition to both the Air Force and the Navy. DARPA has requested $117 millionâdown from the $162 million FY2020 request and the $152 million FY2020 appropriationâfor TBG in FY2021. DARPA's Operational Fires reportedly seeks to leverage TBG technologies to develop a ground-launched system that will enable "advanced tactical weapons to penetrate modern enemy air defenses and rapidly and precisely engage critical time sensitive targets." DARPA has requested $40 million for OpFires in FY2021âdown from the $50 million FY2020 request and appropriationâand intends to transition the program to the Army. In the longer term, DARPA, with Air Force support, is continuing work on the Hypersonic Air-breathing Weapon Concept, which "seeks to develop and demonstrate critical technologies to enable an effective and affordable air-launched hypersonic cruise missile." Assistance Director for Hypersonics Mike White has stated that such a missile would be smaller than DOD's hypersonic glide vehicles and could therefore launch from a wider range of platforms. Director White has additionally noted that HAWC and other hypersonic cruise missiles could integrate seekers more easily than hypersonic glide vehicles. DARPA requested $7 million to develop HAWC in FY2021âdown from the $10 million FY2020 request and $20 million FY2020 appropriation. Hypersonic Missile Defenses DOD is also investing in counter-hypersonic weapons capabilities, although USD R&E Michael Griffin has stated that the United States will not have a defensive capability against hypersonic weapons until the mid-2020s, at the earliest. In September 2018, the Missile Defense Agency (MDA)âwhich in 2017 established a Hypersonic Defense Program pursuant to Section 1687 of the FY2017 NDAA ( P.L. 114-840 )âcommissioned 21 white papers to explore hypersonic missile defense options, including interceptor missiles, hypervelocity projectiles, laser guns, and electronic attack systems. In January 2020, MDA issued a draft request for prototype proposals for a Hypersonic Defense Regional Glide Phase Weapons System interceptor. This effort is intended to "reduce interceptor key technology and integration risks, anchor modeling and simulation in areas of large uncertainty, and to increase the interceptor technology readiness levels (TRL) to level 5." MDA has also awarded four companiesâNorthrop Grumman, Raytheon, Leidos, and L3Harrisâwith $20 million contracts to design prototype space-based (low-Earth orbit) sensors by October 31, 2020. Such sensors could theoretically extend the range at which incoming missiles could be detected and trackedâa critical requirement for hypersonic missile defense, according to USD Griffin. MDA requested $206.8 million for hypersonic defense in FY2021âup from its $157.4 million FY2020 requestâand $659 million across the FYDP. In addition, DARPA is working on a program called Glide Breaker, which "will develop critical component technology to support a lightweight vehicle designed for precise engagement of hypersonic threats at very long range." DARPA requested $3 million for Glide Breaker in FY2021âdown from $10 million in FY2020. Infrastructure According to a study mandated by the FY2013 National Defense Authorization Act ( P.L. 112-239 ) and conducted by the Institute for Defense Analyses (IDA) , the United States had 48 critical hypersonic test facilities and mobile assets in 2014 needed for the maturation of hypersonic technologies for defense systems development through 2030 . These specialized facilities, which simulate the unique conditions experienced in hypersonic flight (e.g., speed, pressure, heating), included 10 DOD hypersonic ground test facilities, 11 DOD open-air ranges, 11 DOD mobile assets, 9 NASA facilities, 2 Department of Energy facilities, and 5 industry or academic facilities. In its 2014 evaluation ofÂ U.S. hypersonic test and evaluation infrastructure, IDAÂ noted thatÂ " no current U.S. facility can provide full-scale, time-dependent, coupled aerodynamic and thermal-loading environments for flight durations necessary to evaluate theseÂ characteristics aboveÂ Mach 8. " Â Since the 2014Â study report was published,Â the University of Notre Dame has opened a Mach 6 hypersonic wind t unnel and at least one hypersonic testing facility has been inactivated. D evelopment of Mach 8 and Mach 10 wind tunnels at Purdue University and the University of Notre Dame , respectively, is ongoing. In addition, t he University of Arizona plans to modify one of its wind tunnels to enable Mach 5 testing by early 2021 , while Texas A&M Universityâ in partnership with Army Futures Commandâplans to complete construction of a kilometer-long Mach 10 wind tunnel by 2021 . ( For a list of U.S. hypersonic test assets and their capabilities, see the Appendix .) The United States also uses the Royal Australian Air Force Woomera Test Range in Australia and the AndÃ¸ya Rocket Range in Norway for flight testing. In January 2019, the Navy announced plans to reactivate its Launch Test Complex at China Lake, CA, to improve air launch and underwater testing capabilities for the conventional prompt strike program. In addition, in March 2020, DOD announced that it had established a "hypersonic war room" to assess the U.S. industrial base for hypersonic weapons and identify "critical nodes" in the supply chain. Initial findings are to be released in mid-2020. Russia Although Russia has conducted research on hypersonic weapons technology since the 1980s, it accelerated its efforts in response to U.S. missile defense deployments in both the United States and Europe, and in response to the U.S. withdrawal from the Anti-Ballistic Missile Treaty in 2001. Detailing Russia's concerns, President Putin stated that "the US is permitting constant, uncontrolled growth of the number of anti-ballistic missiles, improving their quality, and creating new missile launching areas. If we do not do something, eventually this will result in the complete devaluation of Russia's nuclear potential. Meaning that all of our missiles could simply be intercepted." Russia thus seeks hypersonic weapons, which can maneuver as they approach their targets, as an assured means of penetrating U.S. missile defenses and restoring its sense of strategic stability. Programs Russia is pursuing two hypersonic weapons programsâthe Avangard and the 3M22 Tsirkon (or Zircon)âand has reportedly fielded the Kinzhal ("Dagger"), a maneuvering air-launched ballistic missile. Avangard ( Figure 2 ) is a hypersonic glide vehicle launched from an intercontinental ballistic missile (ICBM), giving it "effectively 'unlimited' range." Reports indicate that Avangard is currently deployed on the SS-19 Stiletto ICBM, though Russia plans to eventually launch the vehicle from the Sarmat ICBM. Sarmat is still in development, although it may be deployed by 2021. Avangard features onboard countermeasures and will reportedly carry a nuclear warhead. It was successfully tested twice in 2016 and once in December 2018, reportedly reaching speeds of Mach 20; however, an October 2017 test resulted in failure. Russian news sources claim that Avangard entered into combat duty in December 2019. In addition to Avangard, Russia is developing Tsirkon, a ship-launched hypersonic cruise missile capable of traveling at speeds of between Mach 6 and Mach 8. Tsirkon is reportedly capable of striking both ground and naval targets. According to Russian news sources, Tsirkon has a range of between approximately 250 and 600 miles and can be fired from the vertical launch systems mounted on cruisers Admiral Nakhimov and Pyotr Veliky , Project 20380 corvettes, Project 22350 frigates, and Project 885 Yasen-class submarines, among other platforms. These sources assert that Tsirkon was successfully launched from a Project 22350 frigate in January 2020. U.S. intelligence reports indicate that the missile will become operational in 2023. In addition, Russia has reportedly fielded Kinzhal, a maneuvering air-launched ballistic missile modified from the Iskander missile. According to U.S. intelligence reports, Kinzhal was successfully test fired from a modified MiG-31 fighter (NATO code name: Foxhound) as recently as July 2018âstriking a target at a distance of approximately 500 milesâand is expected by U.S. intelligence sources to become ready for combat by 2020. Russia plans to deploy the missile on both the MiG-31 and the Su-34 long-range strike fighter. Russia is working to mount the missile on the Tu-22M3 strategic bomber (NATO code name: Backfire), although the slower-moving bomber may face challenges in "accelerating the weapon into the correct launch parameters." Russian media has reported Kinzhal's top speed as Mach 10, with a range of up to 1,200 miles when launched from the MiG-31. The Kinzhal is reportedly capable of maneuverable flight, as well as of striking both ground and naval targets, and could eventually be fitted with a nuclear warhead. However, such claims regarding Kinzhal's performance characteristics have not been publicly verified by U.S. intelligence agencies, and have been met with skepticism by a number of analysts. Infrastructure Russia reportedly conducts hypersonic wind tunnel testing at the Central Aero-Hydrodynamic Institute in Zhukovsky and the Khristianovich Institute of Theoretical and Applied Mechanics in Novosibirsk, and has tested hypersonic weapons at Dombarovskiy Air Base, the Baykonur Cosmodrome, and the Kura Range. China According to Tong Zhao, a fellow at the Carnegie-Tsinghua Center for Global Policy, "most experts argue that the most important reason to prioritize hypersonic technology development [in China] is the necessity to counter specific security threats from increasingly sophisticated U.S. military technology, including [hypersonic weapons]." In particular, China's pursuit of hypersonic weapons, like Russia's, reflects a concern that U.S. hypersonic weapons could enable the United States to conduct a preemptive, decapitating strike on China's nuclear arsenal and supporting infrastructure. U.S. missile defense deployments could then limit China's ability to conduct a retaliatory strike against the United States. China has demonstrated a growing interest in Russian advances in hypersonic weapons technology, conducting flight tests of a hypersonic-glide vehicle (HGV) only days after Russia tested its own system. Furthermore, a January 2017 report found that over half of open-source Chinese papers on hypersonic weapons include references to Russian weapons programs. This could indicate that China is increasingly considering hypersonic weapons within a regional context. Indeed, some analysts believe that China may be planning to mate conventionally armed HGVs with the DF-21 and DF-26 ballistic missiles in support of an anti-access/area denial strategy. China has reportedly not made a final determination as to whether its hypersonic weapons will be nuclear- or conventionally-armedâor dual-capable. Programs China has conducted a number of successful tests of the DF-17, a medium-range ballistic missile specifically designed to launch HGVs. U.S. intelligence analysts assess that the missile has a range of approximately 1,000 to 1,500 miles and could be deployed in 2020. China has also tested the DF-41 intercontinental ballistic missile, which could be modified to carry a conventional or nuclear HGV, according to a report by a U.S. Congressional commission. The development of the DF-41 thus "significantly increases the [Chinese] rocket force's nuclear threat to the U.S. mainland," the report states. China has tested the DF-ZF HGV (previously referred to as the WU-14) at least nine times since 2014. U.S. defense officials have reportedly identified the range of the DF-ZF as approximately 1,200 miles and have stated that the missile may be capable of performing "extreme maneuvers" during flight. Although unconfirmed by intelligence agencies, some analysts believe the DF-ZF will be operational as early as 2020. According to U.S. defense officials, China also successfully tested Starry Sky-2 (or Xing Kong-2), a nuclear-capable hypersonic vehicle prototype, in August 2018. China claims the vehicle reached top speeds of Mach 6 and executed a series of in-flight maneuvers before landing. Unlike the DF-ZF, Starry Sky-2 is a "waverider" that uses powered flight after launch and derives lift from its own shockwaves. Some reports indicate that the Starry Sky-2 could be operational by 2025. U.S. officials have declined to comment on the program. Infrastructure China has a robust research and development infrastructure devoted to hypersonic weapons. USD (R&E) Michael Griffin stated in March 2018 that China has conducted 20 times as many hypersonic tests as the United States. China tested three hypersonic vehicle models (D18-1S, D18-2S, and D18-3S)âeach with different aerodynamic propertiesâin September 2018. Analysts believe that these tests could be designed to help China develop weapons that fly at variable speeds, including hypersonic speeds. Similarly, China has used the Lingyun Mach 6+ high-speed engine, or "scramjet," test bed ( Figure 3 ) to research thermal resistant components and hypersonic cruise missile technologies. According to Jane's Defence Weekly , "China is also investing heavily in hypersonic ground testing facilities." CAAA operates the FD-02, FD-03, and FD-07 hypersonic wind tunnels, which are capable of reaching speeds of Mach 8, Mach 10, and Mach 12, respectively. China also operates the JF-12 hypersonic wind tunnel, which reaches speeds of between Mach 5 and Mach 9, and the FD-21 hypersonic wind tunnel, which reaches speeds of between Mach 10 and Mach 15. China is expected to have an operational wind tunnel capable of reaching speeds of Mach 25 by 2020. China is known to have tested hypersonic weapons at the Jiuquan Satellite Launch Center and the Taiyuan Satellite Launch Center. Issues for Congress As Congress reviews the Pentagon's plans for U.S. hypersonic weapons programs during the annual authorization and appropriations process, it might consider a number of questions about the rationale for hypersonic weapons, their expected costs, and their implications for strategic stability and arms control. This section provides an overview of some of these questions. Mission Requirements Although the Department of Defense is funding a number of hypersonic weapons programs, it has not established any programs of record, suggesting that it may not have approved requirements for hypersonic weapons or long-term funding plans. Indeed, as Assistant Director for Hypersonics (USD R&E) Mike White has stated, DOD has not yet made a decision to acquire hypersonic weapons and is instead developing prototypes to "[identify] the most viable overarching weapon system concepts to choose from and then make a decision based on success and challenges." As Congress conducts oversight of U.S. hypersonic weapons programs, it may seek to obtain information about DOD's evaluation of potential mission sets for hypersonic weapons, a cost analysis of alternative means of executing these mission sets, and an assessment of the enabling technologiesâsuch as space-based sensors or autonomous command and control systemsâthat may be required to employ or defend against hypersonic weapons. Funding Considerations Assistant Director for Hypersonics (USD R&E) Mike White has noted that DOD is prioritizing offensive programs while it determines "the path forward to get a robust defensive strategy." This approach is reflected in DOD's FY2021 request, which allocates $206.8 million for hypersonic defense programsâof a total $3.2 billion request for all hypersonic-related research. Similarly, in FY2020, DOD requested $157.4 million for hypersonic defense programsâof a total $2.6 billion for all hypersonic-related research. Although the Defense Subcommittees of the Appropriations Committees increased FY2020 appropriations for both hypersonic offense and defense above the FY2020 request, they expressed concerns, noting in their joint explanatory statement of H.R. 1158 "that the rapid growth in hypersonic research has the potential to result in stove-piped, proprietary systems that duplicate capabilities and increase costs." To mitigate this concern, they appropriated $100 million for DOD to establish a Joint Hypersonic Transition Office to "develop and implement an integrated science and technology roadmap for hypersonics" and "establish a university consortium for hypersonic research and workforce development" in support of DOD efforts. Given the lack of defined mission requirements for hypersonic weapons, it may be challenging for Congress to evaluate the balance of funding for hypersonic weapons programs, enabling technologies, supporting test infrastructure, and hypersonic missile defense. Strategic Stability Analysts disagree about the strategic implications of hypersonic weapons. Some have identified two factors that could hold significant implications for strategic stability: the weapon's short time-of-flightâwhich, in turn, compresses the timeline for responseâ and its unpredictable flight pathâwhich could generate uncertainty about the weapon's intended target and therefore heighten the risk of miscalculation or unintended escalation in the event of a conflict. This risk could be further compounded in countries that co-locate nuclear and conventional capabilities or facilities . Some analysts argue that unintended escalation could occur as a result of warhead ambiguity, or from the inability to distinguish between a conventionally armed hypersonic weapon and a nuclear-armed one. However, as a United Nations report notes, "even if a State did know that an HGV launched toward it was conventionally armed, it may still view such a weapon as strategic in nature, regardless of how it was perceived by the State firing the weapon, and decide that a strategic response was warranted." Differences in threat perception and escalation ladders could thus result in unintended escalation. Such concerns have previously led Congress to restrict funding for conventional prompt strike programs. Other analysts have argued that the strategic implications of hypersonic weapons are minimal. Pavel Podvig, a senior research fellow at the United Nations Institute for Disarmament Research, has noted that the weapons "don't â¦ change much in terms of strategic balance and military capability." This, some analysts argue, is because U.S. competitors such as China and Russia already possess the ability to strike the United States with intercontinental ballistic missiles, which, when launched in salvos, could overwhelm U.S. missile defenses. Furthermore, these analysts note that in the case of hypersonic weapons, traditional principles of deterrence hold: "it is really a stretch to try to imagine any regime in the world that would be so suicidal that it would even think threating to useânot to mention to actually useâhypersonic weapons against the United States ... would end well." Arms Control Some analysts who believe that hypersonic weapons could present a threat to strategic stability or inspire an arms race have argued that the United States should take measures to mitigate risks or limit the weapons' proliferation. Proposed measures include expanding New START, negotiating new multilateral arms control agreements, and undertaking transparency and confidence-building measures. The New START Treaty, a strategic offensive arms treaty between the United States and Russia, does not currently cover weapons that fly on a ballistic trajectory for less than 50% of their flight, as do hypersonic glide vehicles and hypersonic cruise missiles. However, Article V of the treaty states that "when a Party believes that a new kind of strategic offensive arm is emerging, that Party shall have the right to raise the question of such a strategic offensive arm for consideration in the Bilateral Consultative Commission (BCC)." Accordingly, some legal experts hold that the United States could raise the issue in the BCC of negotiating to include hypersonic weapons in the New START limits. However, because New START is due to expire in 2021, unless extended through 2026, this solution is likely to be temporary. As an alternative, some analysts have proposed negotiating a new international arms control agreement that would institute a moratorium or ban on hypersonic weapon testing. These analysts argue that a test ban would be a "highly verifiable" and "highly effective" means of preventing a potential arms race and preserving strategic stability. Other analysts have countered that a test ban would be infeasible, as "no clear technical distinction can be made between hypersonic missiles and other conventional capabilities that are less prompt, have shorter ranges, and also have the potential to undermine nuclear deterrence." These analysts have instead proposed international transparency and confidence-building measures, such as exchanging weapons data; conducting joint technical studies; "providing advance notices of tests; choosing separate, distinctive launch locations for tests of hypersonic missiles; and placing restraints on sea-based tests." Appendix. U.S. Hypersonic Testing Infrastructure114 Summary:	null	96	34,481	34,483	34,483	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The United States has actively pursued the development of hypersonic weapons as a part of its conventional prompt global strike (CPGS) program since the early 2000s. In recent years, it has focused such efforts on hypersonic glide vehicles and hypersonic cruise missiles with shorter and intermediate ranges for use in regional conflicts. Although funding for these programs has been relatively restrained in the past, both the Pentagon and Congress have shown a growing interest in pursuing the development and near-term deployment of hypersonic systems. This is due, in part, to the growing interest in these technologies in Russia and China, leading to a heightened focus in the United States on the strategic threat posed by hypersonic flight. Open-source reporting indicates that both China and Russia have conducted numerous successful tests of hypersonic glide vehicles, and both are expected to field an operational capability as early as 2020 . Experts disagree on the potential impact of competitor hypersonic weapons on both strategic stability and the U.S. military's competitive advantage. Nevertheless, current Under Secretary of Defense for Research and Engineering (USD R&E) Michael Griffin has testified to Congress that the United States does not "have systems which can hold [China and Russia] at risk in a corresponding manner, and we don't have defenses against [their] systems." Although the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (FY2019 NDAA, P.L. 115-232 ) accelerated the development of hypersonic weapons, which USD R&E identifies as a priority research and development area, the United States is unlikely to field an operational system before 2023. However, the United States, in contrast to Russia and China, is not currently considering or developing hypersonic weapons for use with a nuclear warhead. As a result, U.S. hypersonic weapons will likely require greater accuracy and will be more technically challenging to develop than nuclear-armed Chinese and Russian systems. In addition to accelerating development of hypersonic weapons, Section 247 of the FY2019 NDAA required that the Secretary of Defense, in coordination with the Director of the Defense Intelligence Agency, produce a classified assessment of U.S. and adversary hypersonic weapons programs, to include the following elements: (1) An evaluation of spending by the United States and adversaries on such technology. (2) An evaluation of the quantity and quality of research on such technology. (3) An evaluation of the test infrastructure and workforce supporting such technology. (4) An assessment of the technological progress of the United States and adversaries on such technology. (5) Descriptions of timelines for operational deployment of such technology. (6) An assessment of the intent or willingness of adversaries to use such technology. This report was delivered to Congress in July 2019. Similarly, Section 1689 of the FY2019 NDAA requires the Director of the Missile Defense Agency to produce a report on "how hypersonic missile defense can be accelerated to meet emerging hypersonic threats." The findings of these reports could hold implications for congressional authorizations, appropriations, and oversight. The following report reviews the hypersonic weapons programs in the United States, Russia, and China, providing information on the programs and infrastructure in each nation, based on unclassified sources. It also provides a brief summary of the state of global hypersonic weapons research development. It concludes with a discussion of the issues that Congress might address as it considers DOD's funding requests for U.S. hypersonic technology programs. Background Several countries are developing hypersonic weapons, which fly at speeds of at least Mach 5 (five times the speed of sound), but none have yet introduced them into their operational military forces. There are two primary categories of hypersonic weapons Hypersonic glide vehicles (HGV) are launched from a rocket before gliding to a target. Hypersonic cruise missiles are powered by high-speed, air-breathing engines, or "scramjets," after acquiring their target. Unlike ballistic missiles, hypersonic weapons do not follow a ballistic trajectory and can maneuver en route to their destination. As Vice Chairman of the Joint Chiefs of Staff and former Commander of U.S. Strategic Command General John Hyten has stated, hypersonic weapons could enable "responsive, long-range, strike options against distant, defended, and/or time-critical threats [such as road-mobile missiles] when other forces are unavailable, denied access, or not preferred." Conventional hypersonic weapons use only kinetic energyâenergy derived from motionâto destroy unhardened targets or, potentially, underground facilities. Hypersonic weapons could challenge detection and defense due to their speed, maneuverability, and low altitude of flight. For example, terrestrial-based radar cannot detect hypersonic weapons until late in the weapon's flight. Figure 1 depicts the differences in terrestrial-based radar detection timelines for ballistic missiles versus hypersonic glide vehicles. This delayed detection compresses the timeline for decision-makers assessing their response options and for a defensive system to intercept the attacking weaponâpotentially permitting only a single intercept attempt. Furthermore, U.S. defense officials have stated that both terrestrial- and current space-based sensor architectures are insufficient to detect and track hypersonic weapons, with USD R&E Griffin noting that "hypersonic targets are 10 to 20 times dimmer than what the U.S. normally tracks by satellites in geostationary orbit." Some analysts have suggested that space-based sensor layersâintegrated with tracking and fire-control systems to direct high-performance interceptors or directed energy weaponsâcould theoretically present viable options for defending against hypersonic weapons in the future. Indeed, the 2019 Missile Defense Review notes that "such sensors take advantage of the large area viewable from space for improved tracking and potentially targeting of advanced threats, including HGVs and hypersonic cruise missiles." Other analysts have questioned the affordability, technological feasibility, and/or utility of wide-area hypersonic weapons defense. As physicist and nuclear expert James Acton explains, "point-defense systems, and particularly [Terminal High-Altitude Area Defense (THAAD)], could very plausibly be adapted to deal with hypersonic missiles. The disadvantage of those systems is that they can only defend small areas. To defend the whole of the continental United States, you would need an unaffordable number of THAAD batteries." In addition, some analysts have argued that the United States' current command and control architecture would be incapable of "processing data quickly enough to respond to and neutralize an incoming hypersonic threat." (A broader discussion of hypersonic weapons defense is outside the scope of this report.) United States The Department of Defense (DOD) is currently developing hypersonic weapons under the Navy's Conventional Prompt Strike program, which is intended to provide the U.S. military with the ability to strike hardened or time-sensitive targets with conventional warheads, as well as through several Air Force, Army, and DARPA programs. Those who support these development efforts argue that hypersonic weapons could enhance deterrence, as well as provide the U.S. military with an ability to defeat capabilities such as advanced air and missile defense systems that form the foundation of U.S. competitors' anti-access/area denial strategies. In recognition of this, the 2018 National Defense Strategy identifies hypersonic weapons as one of the key technologies "[ensuring the United States] will be able to fight and win the wars of the future." Programs Unlike China and Russia, the United States is not currently developing hypersonic weapons for use with a nuclear warhead. As a result, U.S. hypersonic weapons will likely require greater accuracy and will be more technically challenging to develop than nuclear-armed Chinese and Russian systems. Indeed, according to one expert, "a nuclear-armed glider would be effective if it were 10 or even 100 times less accurate [than a conventionally-armed glider]" due to nuclear blast effects. According to open-source reporting, the United States has a number of major offensive hypersonic weapons and hypersonic technology programs in development, including the following (see Table 1 ): U.S. NavyâConventional Prompt Strike (CPS); U.S. ArmyâLong-Range Hypersonic Weapon (LRHW); U.S. Air ForceâAGM-183 Air-Launched Rapid Response Weapon (ARRW, pronounced "arrow"); DARPAâTactical Boost Glide (TBG); DARPAâOperational Fires (OpFires); and DARPAâHypersonic Air-breathing Weapon Concept (HAWC, pronounced "hawk"). These programs are intended to produce operational prototypes, as there are currently no programs of record for hypersonic weapons. Accordingly, funding for U.S. hypersonic weapons programs is found in the Research, Development, Test, and Evaluation accounts, rather than in Procurement. U.S. Navy In a June 2018 memorandum, DOD announced that the Navy would lead the development of a common glide vehicle for use across the services. The common glide vehicle is being adapted from a Mach 6 Army prototype warhead, the Alternate Re-Entry System, which was successfully tested in 2011 and 2017. Once development is complete, "Sandia National Laboratories, the designer of the original concept, then will build the common glide vehiclesâ¦. Booster systems are being developed separately." The Navy's Conventional Prompt Strike (CPS) is expected to pair the common glide vehicle with a submarine-launched booster system, achieving initial operational capability (IOC) on a Virginia-class submarine with Virginia Payload Module in FY2028. The Navy is requesting $1 billion for CPS in FY2021âan increase of $415 million over the FY2020 request and $496 million over the FY2020 appropriationâand $5.3 billion across the five-year Future Years Defense Program (FYDP). U.S. Army The Army's Long-Range Hypersonic Weapon program is expected to pair the common glide vehicle with the Navy's booster system. The system is intended to have a range of 1,400 miles and "provide the Army with a prototype strategic attack weapon system to defeat A2/AD capabilities, suppress adversary Long Range Fires, and engage other high payoff/time sensitive targets." The Army is requesting $801 million for the program in FY2021â$573 million over the FY2020 request and $397 million over the FY2020 appropriationâand $3.3 billion across the FYDP. It plans to conduct flight tests for LRHW from FY2021 to FY2023, field combat rounds in FY2023, and transition to a program of record in the fourth quarter of FY2024. U.S. Air Force T he AGM-183 Air- L aunched Rapid Response Weapon is expected to leverage DARPA's Tactical Boost Glide technology to develop an air-launched hypersonic glide vehicle prototype capable of travelling at speeds up to Mach 20 at a range of approximately 575 miles. Despite testing delays due to technical challenges, ARRW completed a successful flight test in June 2019 and is expected to complete flight tests in FY2022. The Air Force has requested $382 million for ARRW in FY2021âup from $286 million in the FY2020 request and appropriationâand $581 million across the FYDP, with no funds requested beyond FY2022. ARRW is a project under the Air Force's Hypersonics Prototyping Program Element, which is intended to demonstrate concepts "to [enable] leadership to make informed strategy and resource decisions â¦ for future programs." In February 2020, the Air Force announced that it had cancelled its second hypersonic weapon program, the Hypersonic Conventional Strike Weapon (HCSW), which had been expected to use the common glide vehicle, due to budget pressures that forced it to choose between ARRW and HCSW. Air Force acquisition chief Will Roper explained that ARRW was selected because it was more advanced and gave the Air Force additional options. "[ARRW] is smaller; we can carry twice as many on the B-52, and it's possible it could be on the F-15," he explained. The Air Force will continue its technical review of HCSW through March 2020. DARPA DARPA, in partnership with the Air Force, continues to test Tactical Boost Glide, a wedge-shaped hypersonic glide vehicle capable of Mach 7+ flight that "aims to develop and demonstrate technologies to enable future air-launched, tactical-range hypersonic boost glide systems." TBG will "also consider traceability, compatibility, and integration with the Navy Vertical Launch System" and is planned to transition to both the Air Force and the Navy. DARPA has requested $117 millionâdown from the $162 million FY2020 request and the $152 million FY2020 appropriationâfor TBG in FY2021. DARPA's Operational Fires reportedly seeks to leverage TBG technologies to develop a ground-launched system that will enable "advanced tactical weapons to penetrate modern enemy air defenses and rapidly and precisely engage critical time sensitive targets." DARPA has requested $40 million for OpFires in FY2021âdown from the $50 million FY2020 request and appropriationâand intends to transition the program to the Army. In the longer term, DARPA, with Air Force support, is continuing work on the Hypersonic Air-breathing Weapon Concept, which "seeks to develop and demonstrate critical technologies to enable an effective and affordable air-launched hypersonic cruise missile." Assistance Director for Hypersonics Mike White has stated that such a missile would be smaller than DOD's hypersonic glide vehicles and could therefore launch from a wider range of platforms. Director White has additionally noted that HAWC and other hypersonic cruise missiles could integrate seekers more easily than hypersonic glide vehicles. DARPA requested $7 million to develop HAWC in FY2021âdown from the $10 million FY2020 request and $20 million FY2020 appropriation. Hypersonic Missile Defenses DOD is also investing in counter-hypersonic weapons capabilities, although USD R&E Michael Griffin has stated that the United States will not have a defensive capability against hypersonic weapons until the mid-2020s, at the earliest. In September 2018, the Missile Defense Agency (MDA)âwhich in 2017 established a Hypersonic Defense Program pursuant to Section 1687 of the FY2017 NDAA ( P.L. 114-840 )âcommissioned 21 white papers to explore hypersonic missile defense options, including interceptor missiles, hypervelocity projectiles, laser guns, and electronic attack systems. In January 2020, MDA issued a draft request for prototype proposals for a Hypersonic Defense Regional Glide Phase Weapons System interceptor. This effort is intended to "reduce interceptor key technology and integration risks, anchor modeling and simulation in areas of large uncertainty, and to increase the interceptor technology readiness levels (TRL) to level 5." MDA has also awarded four companiesâNorthrop Grumman, Raytheon, Leidos, and L3Harrisâwith $20 million contracts to design prototype space-based (low-Earth orbit) sensors by October 31, 2020. Such sensors could theoretically extend the range at which incoming missiles could be detected and trackedâa critical requirement for hypersonic missile defense, according to USD Griffin. MDA requested $206.8 million for hypersonic defense in FY2021âup from its $157.4 million FY2020 requestâand $659 million across the FYDP. In addition, DARPA is working on a program called Glide Breaker, which "will develop critical component technology to support a lightweight vehicle designed for precise engagement of hypersonic threats at very long range." DARPA requested $3 million for Glide Breaker in FY2021âdown from $10 million in FY2020. Infrastructure According to a study mandated by the FY2013 National Defense Authorization Act ( P.L. 112-239 ) and conducted by the Institute for Defense Analyses (IDA) , the United States had 48 critical hypersonic test facilities and mobile assets in 2014 needed for the maturation of hypersonic technologies for defense systems development through 2030 . These specialized facilities, which simulate the unique conditions experienced in hypersonic flight (e.g., speed, pressure, heating), included 10 DOD hypersonic ground test facilities, 11 DOD open-air ranges, 11 DOD mobile assets, 9 NASA facilities, 2 Department of Energy facilities, and 5 industry or academic facilities. In its 2014 evaluation ofÂ U.S. hypersonic test and evaluation infrastructure, IDAÂ noted thatÂ " no current U.S. facility can provide full-scale, time-dependent, coupled aerodynamic and thermal-loading environments for flight durations necessary to evaluate theseÂ characteristics aboveÂ Mach 8. " Â Since the 2014Â study report was published,Â the University of Notre Dame has opened a Mach 6 hypersonic wind t unnel and at least one hypersonic testing facility has been inactivated. D evelopment of Mach 8 and Mach 10 wind tunnels at Purdue University and the University of Notre Dame , respectively, is ongoing. In addition, t he University of Arizona plans to modify one of its wind tunnels to enable Mach 5 testing by early 2021 , while Texas A&M Universityâ in partnership with Army Futures Commandâplans to complete construction of a kilometer-long Mach 10 wind tunnel by 2021 . ( For a list of U.S. hypersonic test assets and their capabilities, see the Appendix .) The United States also uses the Royal Australian Air Force Woomera Test Range in Australia and the AndÃ¸ya Rocket Range in Norway for flight testing. In January 2019, the Navy announced plans to reactivate its Launch Test Complex at China Lake, CA, to improve air launch and underwater testing capabilities for the conventional prompt strike program. In addition, in March 2020, DOD announced that it had established a "hypersonic war room" to assess the U.S. industrial base for hypersonic weapons and identify "critical nodes" in the supply chain. Initial findings are to be released in mid-2020. Russia Although Russia has conducted research on hypersonic weapons technology since the 1980s, it accelerated its efforts in response to U.S. missile defense deployments in both the United States and Europe, and in response to the U.S. withdrawal from the Anti-Ballistic Missile Treaty in 2001. Detailing Russia's concerns, President Putin stated that "the US is permitting constant, uncontrolled growth of the number of anti-ballistic missiles, improving their quality, and creating new missile launching areas. If we do not do something, eventually this will result in the complete devaluation of Russia's nuclear potential. Meaning that all of our missiles could simply be intercepted." Russia thus seeks hypersonic weapons, which can maneuver as they approach their targets, as an assured means of penetrating U.S. missile defenses and restoring its sense of strategic stability. Programs Russia is pursuing two hypersonic weapons programsâthe Avangard and the 3M22 Tsirkon (or Zircon)âand has reportedly fielded the Kinzhal ("Dagger"), a maneuvering air-launched ballistic missile. Avangard ( Figure 2 ) is a hypersonic glide vehicle launched from an intercontinental ballistic missile (ICBM), giving it "effectively 'unlimited' range." Reports indicate that Avangard is currently deployed on the SS-19 Stiletto ICBM, though Russia plans to eventually launch the vehicle from the Sarmat ICBM. Sarmat is still in development, although it may be deployed by 2021. Avangard features onboard countermeasures and will reportedly carry a nuclear warhead. It was successfully tested twice in 2016 and once in December 2018, reportedly reaching speeds of Mach 20; however, an October 2017 test resulted in failure. Russian news sources claim that Avangard entered into combat duty in December 2019. In addition to Avangard, Russia is developing Tsirkon, a ship-launched hypersonic cruise missile capable of traveling at speeds of between Mach 6 and Mach 8. Tsirkon is reportedly capable of striking both ground and naval targets. According to Russian news sources, Tsirkon has a range of between approximately 250 and 600 miles and can be fired from the vertical launch systems mounted on cruisers Admiral Nakhimov and Pyotr Veliky , Project 20380 corvettes, Project 22350 frigates, and Project 885 Yasen-class submarines, among other platforms. These sources assert that Tsirkon was successfully launched from a Project 22350 frigate in January 2020. U.S. intelligence reports indicate that the missile will become operational in 2023. In addition, Russia has reportedly fielded Kinzhal, a maneuvering air-launched ballistic missile modified from the Iskander missile. According to U.S. intelligence reports, Kinzhal was successfully test fired from a modified MiG-31 fighter (NATO code name: Foxhound) as recently as July 2018âstriking a target at a distance of approximately 500 milesâand is expected by U.S. intelligence sources to become ready for combat by 2020. Russia plans to deploy the missile on both the MiG-31 and the Su-34 long-range strike fighter. Russia is working to mount the missile on the Tu-22M3 strategic bomber (NATO code name: Backfire), although the slower-moving bomber may face challenges in "accelerating the weapon into the correct launch parameters." Russian media has reported Kinzhal's top speed as Mach 10, with a range of up to 1,200 miles when launched from the MiG-31. The Kinzhal is reportedly capable of maneuverable flight, as well as of striking both ground and naval targets, and could eventually be fitted with a nuclear warhead. However, such claims regarding Kinzhal's performance characteristics have not been publicly verified by U.S. intelligence agencies, and have been met with skepticism by a number of analysts. Infrastructure Russia reportedly conducts hypersonic wind tunnel testing at the Central Aero-Hydrodynamic Institute in Zhukovsky and the Khristianovich Institute of Theoretical and Applied Mechanics in Novosibirsk, and has tested hypersonic weapons at Dombarovskiy Air Base, the Baykonur Cosmodrome, and the Kura Range. China According to Tong Zhao, a fellow at the Carnegie-Tsinghua Center for Global Policy, "most experts argue that the most important reason to prioritize hypersonic technology development [in China] is the necessity to counter specific security threats from increasingly sophisticated U.S. military technology, including [hypersonic weapons]." In particular, China's pursuit of hypersonic weapons, like Russia's, reflects a concern that U.S. hypersonic weapons could enable the United States to conduct a preemptive, decapitating strike on China's nuclear arsenal and supporting infrastructure. U.S. missile defense deployments could then limit China's ability to conduct a retaliatory strike against the United States. China has demonstrated a growing interest in Russian advances in hypersonic weapons technology, conducting flight tests of a hypersonic-glide vehicle (HGV) only days after Russia tested its own system. Furthermore, a January 2017 report found that over half of open-source Chinese papers on hypersonic weapons include references to Russian weapons programs. This could indicate that China is increasingly considering hypersonic weapons within a regional context. Indeed, some analysts believe that China may be planning to mate conventionally armed HGVs with the DF-21 and DF-26 ballistic missiles in support of an anti-access/area denial strategy. China has reportedly not made a final determination as to whether its hypersonic weapons will be nuclear- or conventionally-armedâor dual-capable. Programs China has conducted a number of successful tests of the DF-17, a medium-range ballistic missile specifically designed to launch HGVs. U.S. intelligence analysts assess that the missile has a range of approximately 1,000 to 1,500 miles and could be deployed in 2020. China has also tested the DF-41 intercontinental ballistic missile, which could be modified to carry a conventional or nuclear HGV, according to a report by a U.S. Congressional commission. The development of the DF-41 thus "significantly increases the [Chinese] rocket force's nuclear threat to the U.S. mainland," the report states. China has tested the DF-ZF HGV (previously referred to as the WU-14) at least nine times since 2014. U.S. defense officials have reportedly identified the range of the DF-ZF as approximately 1,200 miles and have stated that the missile may be capable of performing "extreme maneuvers" during flight. Although unconfirmed by intelligence agencies, some analysts believe the DF-ZF will be operational as early as 2020. According to U.S. defense officials, China also successfully tested Starry Sky-2 (or Xing Kong-2), a nuclear-capable hypersonic vehicle prototype, in August 2018. China claims the vehicle reached top speeds of Mach 6 and executed a series of in-flight maneuvers before landing. Unlike the DF-ZF, Starry Sky-2 is a "waverider" that uses powered flight after launch and derives lift from its own shockwaves. Some reports indicate that the Starry Sky-2 could be operational by 2025. U.S. officials have declined to comment on the program. Infrastructure China has a robust research and development infrastructure devoted to hypersonic weapons. USD (R&E) Michael Griffin stated in March 2018 that China has conducted 20 times as many hypersonic tests as the United States. China tested three hypersonic vehicle models (D18-1S, D18-2S, and D18-3S)âeach with different aerodynamic propertiesâin September 2018. Analysts believe that these tests could be designed to help China develop weapons that fly at variable speeds, including hypersonic speeds. Similarly, China has used the Lingyun Mach 6+ high-speed engine, or "scramjet," test bed ( Figure 3 ) to research thermal resistant components and hypersonic cruise missile technologies. According to Jane's Defence Weekly , "China is also investing heavily in hypersonic ground testing facilities." CAAA operates the FD-02, FD-03, and FD-07 hypersonic wind tunnels, which are capable of reaching speeds of Mach 8, Mach 10, and Mach 12, respectively. China also operates the JF-12 hypersonic wind tunnel, which reaches speeds of between Mach 5 and Mach 9, and the FD-21 hypersonic wind tunnel, which reaches speeds of between Mach 10 and Mach 15. China is expected to have an operational wind tunnel capable of reaching speeds of Mach 25 by 2020. China is known to have tested hypersonic weapons at the Jiuquan Satellite Launch Center and the Taiyuan Satellite Launch Center. Issues for Congress As Congress reviews the Pentagon's plans for U.S. hypersonic weapons programs during the annual authorization and appropriations process, it might consider a number of questions about the rationale for hypersonic weapons, their expected costs, and their implications for strategic stability and arms control. This section provides an overview of some of these questions. Mission Requirements Although the Department of Defense is funding a number of hypersonic weapons programs, it has not established any programs of record, suggesting that it may not have approved requirements for hypersonic weapons or long-term funding plans. Indeed, as Assistant Director for Hypersonics (USD R&E) Mike White has stated, DOD has not yet made a decision to acquire hypersonic weapons and is instead developing prototypes to "[identify] the most viable overarching weapon system concepts to choose from and then make a decision based on success and challenges." As Congress conducts oversight of U.S. hypersonic weapons programs, it may seek to obtain information about DOD's evaluation of potential mission sets for hypersonic weapons, a cost analysis of alternative means of executing these mission sets, and an assessment of the enabling technologiesâsuch as space-based sensors or autonomous command and control systemsâthat may be required to employ or defend against hypersonic weapons. Funding Considerations Assistant Director for Hypersonics (USD R&E) Mike White has noted that DOD is prioritizing offensive programs while it determines "the path forward to get a robust defensive strategy." This approach is reflected in DOD's FY2021 request, which allocates $206.8 million for hypersonic defense programsâof a total $3.2 billion request for all hypersonic-related research. Similarly, in FY2020, DOD requested $157.4 million for hypersonic defense programsâof a total $2.6 billion for all hypersonic-related research. Although the Defense Subcommittees of the Appropriations Committees increased FY2020 appropriations for both hypersonic offense and defense above the FY2020 request, they expressed concerns, noting in their joint explanatory statement of H.R. 1158 "that the rapid growth in hypersonic research has the potential to result in stove-piped, proprietary systems that duplicate capabilities and increase costs." To mitigate this concern, they appropriated $100 million for DOD to establish a Joint Hypersonic Transition Office to "develop and implement an integrated science and technology roadmap for hypersonics" and "establish a university consortium for hypersonic research and workforce development" in support of DOD efforts. Given the lack of defined mission requirements for hypersonic weapons, it may be challenging for Congress to evaluate the balance of funding for hypersonic weapons programs, enabling technologies, supporting test infrastructure, and hypersonic missile defense. Strategic Stability Analysts disagree about the strategic implications of hypersonic weapons. Some have identified two factors that could hold significant implications for strategic stability: the weapon's short time-of-flightâwhich, in turn, compresses the timeline for responseâ and its unpredictable flight pathâwhich could generate uncertainty about the weapon's intended target and therefore heighten the risk of miscalculation or unintended escalation in the event of a conflict. This risk could be further compounded in countries that co-locate nuclear and conventional capabilities or facilities . Some analysts argue that unintended escalation could occur as a result of warhead ambiguity, or from the inability to distinguish between a conventionally armed hypersonic weapon and a nuclear-armed one. However, as a United Nations report notes, "even if a State did know that an HGV launched toward it was conventionally armed, it may still view such a weapon as strategic in nature, regardless of how it was perceived by the State firing the weapon, and decide that a strategic response was warranted." Differences in threat perception and escalation ladders could thus result in unintended escalation. Such concerns have previously led Congress to restrict funding for conventional prompt strike programs. Other analysts have argued that the strategic implications of hypersonic weapons are minimal. Pavel Podvig, a senior research fellow at the United Nations Institute for Disarmament Research, has noted that the weapons "don't â¦ change much in terms of strategic balance and military capability." This, some analysts argue, is because U.S. competitors such as China and Russia already possess the ability to strike the United States with intercontinental ballistic missiles, which, when launched in salvos, could overwhelm U.S. missile defenses. Furthermore, these analysts note that in the case of hypersonic weapons, traditional principles of deterrence hold: "it is really a stretch to try to imagine any regime in the world that would be so suicidal that it would even think threating to useânot to mention to actually useâhypersonic weapons against the United States ... would end well." Arms Control Some analysts who believe that hypersonic weapons could present a threat to strategic stability or inspire an arms race have argued that the United States should take measures to mitigate risks or limit the weapons' proliferation. Proposed measures include expanding New START, negotiating new multilateral arms control agreements, and undertaking transparency and confidence-building measures. The New START Treaty, a strategic offensive arms treaty between the United States and Russia, does not currently cover weapons that fly on a ballistic trajectory for less than 50% of their flight, as do hypersonic glide vehicles and hypersonic cruise missiles. However, Article V of the treaty states that "when a Party believes that a new kind of strategic offensive arm is emerging, that Party shall have the right to raise the question of such a strategic offensive arm for consideration in the Bilateral Consultative Commission (BCC)." Accordingly, some legal experts hold that the United States could raise the issue in the BCC of negotiating to include hypersonic weapons in the New START limits. However, because New START is due to expire in 2021, unless extended through 2026, this solution is likely to be temporary. As an alternative, some analysts have proposed negotiating a new international arms control agreement that would institute a moratorium or ban on hypersonic weapon testing. These analysts argue that a test ban would be a "highly verifiable" and "highly effective" means of preventing a potential arms race and preserving strategic stability. Other analysts have countered that a test ban would be infeasible, as "no clear technical distinction can be made between hypersonic missiles and other conventional capabilities that are less prompt, have shorter ranges, and also have the potential to undermine nuclear deterrence." These analysts have instead proposed international transparency and confidence-building measures, such as exchanging weapons data; conducting joint technical studies; "providing advance notices of tests; choosing separate, distinctive launch locations for tests of hypersonic missiles; and placing restraints on sea-based tests." Appendix. U.S. Hypersonic Testing Infrastructure114	Summary:	gov_report	1,024	null	74
crs_R45746	crs_R45746_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Technological convergence, in general, refers to the trend or phenomenon where two or more independent technologies integrate and form a new outcome. One example is the smartphone. A smartphone integrates several independent technologies—such as telephone, computer, camera, music player, television (TV), and geolocating and navigation tool—into a single device. The smartphone has become its own, identifiable category of technology. Currently, over 35% of the global population are smartphone users and over 3 billion active devices are in circulation. In the United States, about 80% of the U.S. population are smartphone users, and over 280 million active devices are in circulation. The technological convergence has resulted in establishing a new and prominent smartphone industry sector, worth over $350 billion globally, according to some estimates. Technological convergence may present a range of issues where Congress may take legislative and/or oversight actions. Three selected issue areas associated with technological convergence are regulatory jurisdiction, digital privacy, and data security. First, merging and integrating multiple technologies from distinct functional categories into one converged technology may pose challenges to defining regulatory policies, roles, and responsibilities. Determining oversight jurisdictions and regulatory authorities for converged technologies may become complicated as the boundaries that once separated single-function technologies are blended together. In other words, delineating which policy authorizes which government agency to apply which standards to regulate which industry is no longer simple and straightforward. How Congress chooses to oversee certain industries and government agencies may also become complicated due to converging technologies that blur and blend existing categorical boundaries. Second, digital privacy concerns stem from converged technologies' collection and usage of personal and machine data. Technological convergence facilitates increasing consumption and collection of data, which poses potential digital privacy concerns for consumers. Data collection and usage are tied to digital privacy issues because a piece or aggregation of information could identify an individual or reveal patterns in their activities. Converged technologies leverage large volumes of data to try to improve the user experience by generating more tailored and anticipatory results. This data can also potentially be used to identify, locate, track, and monitor an individual without the person's knowledge. The same data can potentially be sold to third-party entities without an individual's awareness. As the use of converged technologies continues to propagate, digital privacy issues will likely remain central to the policy debate. Third, data security concerns are often associated with smart devices. As devices are able to interconnect, the convenient ubiquitous features may create vulnerabilities that could be exploited by malicious actors. Data security, a component of cybersecurity, protects data from unauthorized access and use. Along with digital privacy, data security is a pertinent issue for converged technologies, which generate and consume large volumes of data. Technological convergence poses three potential data security concerns: increased number of access points susceptible to cyberattacks, linkage to physical security, and theft of data. The first section of this report describes technological convergence along with closely associated media convergence and network convergence. The report uses the Internet of Things (IoT) and smart home devices as primary examples. Of these three convergences, consumers most often directly engage with converged technologies. In contrast, general consumers may not have the same level of engagement or understanding of media and network convergences, as they often occur in the background. The second section of this report presents regulatory, digital privacy, and data security issues pertaining to technological convergence. The current state, challenges, and recent legislative activities are discussed. The third section of this report concludes with potential considerations for Congress. An overarching consideration for regulatory, digital privacy, and data security issues may be determining the role, if any, of the federal government in an environment where technological evolution changes quickly and continues to disrupt existing frameworks. Policies governing these three issues—regulations, digital privacy, and data security—may be of interest to Congress as well as other stakeholders, including U.S. government agencies, commercial entities, and the general public. Description of Technological Convergence "Technological convergence" is a concept whereby merging, blending, integration, and transformation of independent technologies leads to a completely new converged technology. This broad, complex concept encompasses a wide range of technologies, including IoT and smart home devices. When a converged technology emerges, it often replaces single-function technologies or renders them obsolete. In this sense, technological convergence can be viewed as a progression or evolution of technology. A discussion of technological convergence in isolation is difficult because technological convergence is closely associated with media convergence and network convergence. Technological, media, and network convergences are interdependent, but each possesses subtle distinctions. These three terms are often used interchangeably, further complicating the discussion of an already complex topic. Figure 1 illustrates relationships between technological, media, and network convergences. Technological convergence : This occurs when the functions of different technologies are merged and interoperate as a single unit. A converged unit can typically process multiple types of media that correspond to each technology that merged. Technological convergence includes devices and systems that interface with end users. For example, a user interacts with converged devices, such as a smart television (TV), to access the contents that are distributed over a network. A smart TV has combined the functions of a traditional TV, a computer, and several other devices that used to have one specific purpose. In addition to displaying over-the-air broadcast TV channels, smart TVs interface with users to surf the internet, view photos taken from smartphones and stored in the "cloud," display feeds from home security cameras connected to a network, play music, notify users of incoming calls and messages, and allow video teleconferencing. Smart TVs can process a variety of formats of media to perform multiple functions. Media convergence : This refers to content that is made available through multiple forms, formats, and access points. Media convergence proliferated as analog mediums of communication became digitized. For example, the contents on a newspaper used to be available only in print. The same content is currently available in both print and digital forms, as text, visual, and/or audio formats, and through multiple devices and platforms including social media. Network convergence : This refers to a single network infrastructure that handles and distributes multiple types of media. Network convergence became prominent when telecommunications and information networks integrated; it became prevalent when mobile cellular communications incorporated access to the internet and made it widespread. For example, today's cable companies process information in forms of voice, video, and data on a single network and often offer their services as a bundle package (e.g., phone, television, and internet services). Similarly, cellular networks, which distribute information to and from mobile devices and fixed platforms, process voice, video, and data. Prior to network, media, and technological convergences, a separate, independent network was dedicated to handling and distributing one particular type of media that was processed by a single-function device. For example, a telephone network distributed audio information (i.e., voice) between telephone handsets. A broadcasting network delivered video to television sets. Convergence removes such pairing (i.e., "decouples") between media, network, and device. Decoupling gives convergence its versatility, flexibility, and complexity. Characteristics of Smart Devices Many technological convergence devices are called "smart" devices, which often include IoT devices. (Examples of IoT devices are discussed in following sections.) Despite a wide range of applications, smart converged technologies share key characteristics: Smart devices can execute multiple functions to serve blended purposes; Smart devices can collect and use data in various formats and employ machine learning algorithms to deliver optimized and enhanced user experience; and Smart devices are connected to a network directly and/or are interconnected with other smart devices, offering ubiquitous access to users from anywhere on any platform. These key characteristics may present potential policy questions for Congress, including the following: Who will provide oversight and how will regulatory authorities be applied to technologies that serve multiple functions or that do not belong to an established category? How should consumer data be collected and used to protect digital privacy without limiting technology innovation? How to shape data security practices to safeguard personal information and physical security from malicious actors? An Overview of Internet of Things The IoT is a common example of technological convergence. The IoT is a system of devices that are connected to a network and each other, exchanging data without necessarily requiring human-to-human or human-to-computer interaction. In other words, IoT is a collection of electronic devices that can share information among themselves (e.g., smart home devices). The IoT possess all three characteristics of converged technologies: multiple functions, data collection and use, and ubiquitous access. Various categories of IoT include industrial Internet of Things, Internet of Medical Things, smart city infrastructures, and smart home devices. IoT industry is a growing market both globally and in the United States. According to some estimates, in 2018, the IoT retail market in the United States was almost $4 billion, and over 700 million consumer IoT devices were in use in 2017 in the United States. Figure 2 illustrates global revenue of the IoT from 2012 to 2018, according to Statista, a company that consolidates statistical data, based on information from IC Insights. In 2018, consumer IoT devices, such as wearable and connected smart home devices, generated over $14 billion globally. The connected cities category, or smart cities, was the largest (41%) of 2018 global IoT revenue. The industrial Internet of Things, such as smart factories, had the biggest growth in terms of global revenue between 2017 and 2018 among the different categories of the IoT. An estimate of various IoT markets by McKinsey also shows the industrial IoT as potentially increasing the most by 2025 compared to other IoT systems. The development, application, and usage of IoT will likely continue to grow with Fifth-Generation (5G) Technologies cellular service, which will allow a larger number of devices to be connected simultaneously to a network, supporting not only consumer but industrial use of IoT devices and systems. IoT devices are used in many different fields and serve a variety of functions. The IoT encompasses a broad range of applications. Selected categories of IoT devices are discussed below. Industrial Internet of Things (IIoT): Examples of commercial application of the IoT can be found in the manufacturing industry. Referred to as industrial Internet of Things (IIoT), networked machines in a production facility can communicate and share information to improve efficiency, productivity, and performance. The application of IIoT can vary significantly, from detecting corrosion inside a refinery pipe to providing real-time production data. Also, IIoTs can enable a variety of industries, such as manufacturing, chemicals, food and beverage, automotive, and steel, to transform their operations and potentially yield financial benefits. Currently in North America, there are more consumer IoT connections than IIoT connections, but this may change in the future. Incorporation of IIoT and analytics is considered by some as the Fourth Industrial Revolution (4IR). Internet of Medical Things (IoMT): Some experts project the use of Internet of Medical Things (IoMT) is increasing. IoMT devices, such as heart monitors and pace makers, collect and send a patient's health statistics over various networks to healthcare providers for monitoring, remote configuration, and preventions. In 2017, over 300 million IoT devices in the medical sector were connected worldwide, and, in 2018, over 400 million devices were connected. At a personal health level, wearable IoT devices, such as smart watches and fitness trackers, can track a user's physical activities, basic vitals, and sleeping patterns. In 2017, over 40 million fitness tracker IoT were in use in the United States. Smart Cities: IoT devices and systems in transportation, utilities, and infrastructure sectors may be grouped under the category of "smart city." An example of utilities IoT in a smart city is "smart" grid and meters for electricity, water, and gas where sensors collect and share customer usage data to enable the central control system to optimize production and distribution to meet demand real-time. An example of transportation IoT in a smart city is fare readers and status trackers or locaters that interface across all public transportation platforms. Columbus, OH's winning proposal for the Department of Transportation's (DOT) Smart City Challenge of 2016, included connected infrastructure that interacts with vehicles, trip planning and common payment system across multiple transit system, and electric autonomous vehicles and shuttles. Other finalists of the DoT Smart City Challenge were Austin, TX; Denver, CO; Kansas City, MO; Pittsburgh, PA; Portland, OR; and San Francisco, CA. Smart cities is currently the largest segment of IoT in terms of revenue. Smart Home: Consumer product IoT devices used in homes and buildings are often grouped under the "smart home" category. Included in this categories are smart appliances, smart TV, smart entertainment systems, smart thermostats, and network-connected light bulbs, outlets, door locks, door bells, and home security systems. These smart home IoT devices are connected to a single network and can be controlled remotely over the internet. Eight of 11 categories of consumer IoT devices used in 2017 were related to smart home. In 2018, the size of the global smart home market was estimated to be over $30 billion. An Example: Smart Home A smart home contains a collection of consumer IoT devices intended for personal use where user experience is improved by connecting various features of a house to a network. For example, smart home IoT devices may be interconnected to each other and to a central control system for a home with voice interface, often referred to as a virtual assistant. Commonly known examples of virtual assistants are Amazon's Alexa, Apple's Siri, Google Assistant, Microsoft's Cortana, and Samsung's Bixby. A virtual assistant is a platform that can manage and relay information to smart home devices based on user-established criteria. Moreover, a smart home may have a doorbell with a video camera and a speaker that allows a user to see who is at the door and to speak to the person at the door from anywhere over the internet. A smart home may have a smart door lock that can be locked and unlocked remotely. In addition, the thermostat, lights, electrical outlets, and appliances in a smart home may be remotely controlled by a user over the internet. A smart appliance, such as a smart refrigerator that is networked, can use its sensors to identify items and can notify a user based on set criteria, such as restocking alerts or suggested recipes. Some smart home devices resemble traditional devices, but with cross-over functions or networking abilities. Examples include smart lightbulbs, smart electrical outlet plugs, smart TV, and smart appliances. Some smart home devices are establishing a new category of industry segment that did not exist previously. An example is Amazon's Echo products with virtual assistant Alexa as voice user interface. Whether it is the former (evolutionary technologies) or the latter (new/revolutionary technologies), the smart home industry is fast emerging and growing. Smart home devices, which are a type of IoT, possess the three characteristics of converged technologies: multiple or blended functions, collection and use of data, and ubiquitous access through network connection. Thus, potential policy interests associated with technological convergence can be also observed in smart home devices. Potential smart home issues for Congress include the following. Congress may decide it is necessary to resolve oversight jurisdictions and regulatory authorities of smart home devices, especially for products like virtual assistants, which may not belong to an established category of technology. The mission of the Federal Trade Commission (FTC) includes both protecting consumers and promoting business competition. Congress may choose to review the FTC's current authorities to ensure that they are sufficient to oversee emerging smart home technologies. In addition, potentially deconflicting or harmonizing jurisdictions may be discussed if other federal government organizations and their mission are impacted by emerging smart home technologies. Congress may decide that new or expanded policies are necessary to protect consumer digital privacy, including personal data that are collected and used by smart home devices, such as a smart TV, in private spaces, such as a user's home. Although the FTC does promote a level of digital privacy through its consumer protection authorities, emerging digital privacy issues are linked to practices that are legal as opposed to fraud, theft, or other malicious activities. Congress may examine whether a federal law that comprehensively addresses personal digital privacy is necessary or an expansion of the FTC's consumer data protection authorities is required. Emerging smart home technologies may further necessitate safeguarding data from malicious actors. In addition to collecting and using personal data, smart home devices bridge physical security and cybersecurity. Malicious actors may have more means to exploit a user's information and home through smart home devices, which offer ubiquitous access as a key convenience feature. Whether current policies adequately addresses data, cyber, and physical security concerns may also be considered. Selected Issues Associated with Technological Convergence Regulation, digital privacy, and data security are three selected issues associated with technological convergence that may be of interest to many stakeholders, including Congress. As identified in the smart home example in the previous section, each of these three issues is discussed further in subsequent subsections. The three selected issues are tied to the three characteristics of converged technologies discussed previously in the " Characteristics of Smart Devices " section. First, convergence of technologies blend and blur existing categorical distinctions for each technology because a converged technology can perform multiple functions. Second, technological convergence consumes, collects, and generates a large volume of both personal and machine data. Third, converged technologies allow ubiquitous access points to the end users. These characteristics are typically observed as a result of decoupling the devices from media and network. Regulatory Issues Congress may consider policies that address blending standards and boundaries as converged technologies and companies merge and replace traditionally independent and distinct categories. Policy issues may include oversight jurisdictions, regulatory authorities, and commercial competitiveness since a converged technology could fall within multiple domains. An example may be delineating the Federal Communications and Commission's (FCC) and the FTC's authorities on convergence technologies as more devices and services become mobile and wirelessly connected. Merging and integrating multiple technologies from distinct functional categories into one converged technology pose challenges to regulatory policies and responsibilities. Determining oversight jurisdictions and regulatory authorities for converged technologies becomes unclear as the boundaries that once separated single-function technologies blend and blur together. A challenge for policymakers may be in delineating which government agency and which policies and standards would best apply to certain technologies or certain industries. Where there were once clear lines of authority by industry or media type (e.g., voice, video, data), they are no longer simple and straightforward for technologies where these functionalities have converged. How Congress oversees which industries and government agencies may become complicated due to converging technologies that blend existing categorical boundaries. Congress may decide that it is necessary for specific legislative committees to effectively oversee a converged technology that serves multiple functions. As a result, the alignment of converged technologies to regulatory authorities may shift as technologies evolve. The complexities in setting regulatory jurisdiction can be further subdivided into regulating converging technologies and regulating evolving technology companies . They are discussed below. Regulating Converging Technologies Regulating a converging technology, which is a result of blending or integrating multiple technologies, can be challenging. This is because (1) the one-to-one relationship between a converging technology and a regulatory entity is no longer clear, and (2) a converging technology may create a new sector where a regulatory entity has not been identified. Initially, the standards and oversight policies for a specific technology were established independently. They were not necessarily developed with merging or interoperability in mind. For example, telephony (when providing voice), cable TV (when providing video), and mobile cellular technologies each follow their respective standards, and these services were regulated by policies specific to each type. When a converged technology utilizes differing communications technologies, it may be required to adhere to multiple standards and regulations. In such cases, multiple agencies may need to regulate a single converged technology. This may require extended timelines for regulatory reviews. Industry may incur additional costs to meet standards and reporting requirements for converged technologies. In other situations, as technologies converge, the outcome may yield a completely new technology for which a regulatory category did not previously exist. Examples include social media, IoTs, and virtual assistants. Without a clear regulatory and oversight framework in place, new converged technologies may be left unregulated, partially regulated, or regulated under a newly developed framework. They could also be left to self-regulate by the industry; or they could be overlooked as governing bodies remain indeterminate on which jurisdictional boundaries need to be stretched to cover emerging technology fields. Regulating Evolving Companies Regulating companies that offer converged technologies is challenging because the services and product lines evolve and expand such that they do not fall within a single category. Although diversification is considered normal business practice, technological convergence broadens the operational range for companies, spanning multiple industry sectors. Antitrust concerns could arise, or companies may not be subjected to the same level of oversight and regulation due to lack of classification. For example, companies such as Amazon, Apple, and Google each offer smart home devices and platforms. Some of these devices, such as a smart doorbell with a video camera, smart doors and locks, and networked contact sensors and video cameras, may function as home security devices. Many of these products are bundled as a starting kit for home security. However, these technology convergence companies may not be required to follow state and local regulations as traditional home security companies that provide monitored security service do. Another example discussed widely in Congress is social media—whether social media companies should be classified as information technology companies, as advertising and marketing firms, as communications platforms, or as the press. As converged technologies and associated companies straddle or fall between jurisdictional boundaries, regulatory roles and responsibilities become more complex. Digital Privacy Issues Congress may be interested in digital privacy concerns of converged technologies, which often collect and use personal information and machine data as they directly interface with end-users. Current federal laws protect certain types of data pertaining to privacy by specifying collection, storage, use, and dissemination practices. As converged technologies generate and innovatively leverage more types and volumes of data that can identify, locate, or track a person, consumer concerns for protecting digital privacy may intensify. Technological convergence facilitates increased consumption and collection of data, posing potential digital privacy concerns for consumers. Data collection and usage are tied to digital privacy issues because a piece or aggregation of information could identify an individual or reveal patterns in their activities. Converged technologies leverage large volumes of data to try to improve the user experience by generating more tailored and anticipatory results. However, such data can potentially identify, locate, track, and monitor an individual without the person's knowledge. As the use of converged technologies continues to propagate, digital privacy issues will likely remain central. Current Data Protection Laws While a federal law that comprehensively addresses digital privacy does not currently exist, many laws are in place to protect certain types of data and their impact on specific aspects of privacy. Current U.S. data protection laws include the following, as taken from CRS Report R45631, Data Protection Law: An Overview : Gramm-Leach-Bliley Act (GLBA): The GLBA imposes several data protection obligations on financial institutions. These obligations are centered on a category of data called "consumer" "nonpublic personal information" (NPI), and generally relate to: (1) sharing NPI with third parties, (2) providing privacy notices to consumers, and (3) security NPI from unauthorized access. Health Insurance Portability and Accountability Act (HIPAA): Under the HIPAA, the Department of Health and Human Services (HHS) has enacted regulations protecting a category of medical information called "protected health information" (PHI). These regulations apply to health care providers, health plans, and health care clearinghouses (covered entities), as well as certain "business associates" of such entities. The HIPAA regulations generally speak to covered entities': (1) using or sharing of PHI, (2) disclosure of information to consumers, (3) safeguards for securing PHI, and (4) notification of consumers following a breach of PHI. Fair Credit Reporting Act (FCRA): The FCRA covers the collection and use of information bearing on a consumer's creditworthiness. FCRA and its implementing regulations govern the activities of three categories of entities: (1) credit reporting agencies (CRAs), (2) entities furnishing information to CRAs (furnishers), and (3) individuals who use credit reports issued by CRAs (users). In contrast to HIPAA or GLBA, there are no privacy provisions in FCRA requiring entities to provide notice to a consumer or to obtain his opt-in or opt-out consent before collecting or disclosing the consumer's data to third parties. FCRA further has no data security provisions requiring entities to maintain safeguards to protect consumer information from unauthorized access. Rather, FCRA's requirements generally focus on ensuring that the consumer information reported by CRAs and furnishers is accurate and that it is used only for certain permissible purposes. The Communications Act : The Communications Act of 1934 (Communications Act or Act), as amended, established the Federal Communications Commission (FCC) and provides a "comprehensive scheme" for the regulations of interstate communication. [T]he Communications Act includes data protection provisions applicable to common carriers, cable operators, and satellite carriers. Video Privacy Protection Act (VPPA): The VPPA was enacted in 1988 in order to "preserve personal privacy with respect to the rental, purchase, or delivery of video tapes or similar audio visual materials." The VPPA does not have any data security provisions requiring entities to maintain safeguards to protect consumer information from unauthorized access. However, it does have privacy provisions restricting when covered entities can share certain consumer information. Specifically, the VPPA prohibits "video tape service providers"—a term that includes both digital video streaming services and brick-and-mortar video rental stores—from knowingly disclosing [personally identifiable information] (PII) concerning any "consumer" without that consumer's opt-in consent. The VPPA does not empower any federal agency to enforce violations or the Act and there are no criminal penalties for violations, but it does provide for a private right of action for persons aggrieved by the Act. Family Educational Rights and Privacy Act (FERPA): The FERPA creates privacy protections for student education records. "Education records" are defined broadly to generally include any "materials which contain information directly related to a student" and are "maintained by an educational agency or institution." FERPA defines an "educational agency of institution" to include "any public or private agency or institution which is the recipient of funds under any applicable program." FERPA generally requires that any "educational agency or institution" (i.e., covered entities) give parents or, depending on their age, the student (1) control over the disclosure of the student's educational records, (2) an opportunity to review those records, and (3) an opportunity to challenge them as inaccurate. Federal Securities Laws : While federal securities statutes and regulations do not explicitly address data protection, two requirements under these laws have implications for how companies prevent and respond to data breaches. First, federal securities laws may require companies to adopt controls designed to protect against data breaches. Second, federal securities laws may require companies to discuss data breaches when making required disclosures under securities laws. Children's Online Privacy Protection Act (COPPA): The COPPA and the FTC's implementing regulations regulate the online collection and use of children's information. Specifically, COPPA's requirements apply to: (1) any "operator" of a website or online service that is "directed to children," or (2) any operator that has any "actual knowledge that it is collecting personal information from a child" (i.e., covered operators). Covered operators must comply with various requirements regarding data collection and use, privacy policy notifications, and data security. Electronic Communications Privacy Act (ECPA): The ECPA was enacted in 1986, and is composed of three acts: the Wiretap Act, the Stored Communications Act (SCA), and the Pen Register Act. Much of ECPA is directed at law enforcement, providing "Fourth Amendment like privacy protections" to electronic communications. However, "ECPA's three acts also contain privacy obligations relevant to non-governmental actors. ECPA is perhaps the most compressive federal law on electronic privacy, as it is not sector-specific, and many of its provisions apply to a wide range of private and public actors. Nevertheless, its impact on online privacy has been limited. As some commentators have observed, ECPA "was designed to regulate wiretapping and electronic snooping rather than commercial data gathering," and litigants attempting to apply ECPA to online data collection have generally been unsuccessful. Computer Fraud and Abuse Act (CFAA): The CFAA was originally intended as a computer hacking statute and is centrally concerned with prohibiting unauthorized intrusions into computers, rather than addressing other data protection issues such as the collection or use of data. Specifically, the CFAA imposes liability when a person "intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains… information from any protected computer." A "protected computer" is broadly defined as any computer used in or affecting interstate commerce or communications, functionally allowing the statute to apply to any computer that is connected to the internet. Federal Trade Commission Act (FTC Act): The FTC Act has emerged as a critical law relevant to data privacy and security. As some commentators have noted, the FTC has used its authority under the Act to become the "go-to agency for privacy," effectively filling in gaps left by the aforementioned federal statutes. While the FTC Act was originally enacted in 1914 to strengthen competition law, the 1938 Wheeler-Lea amendment revised Section 5 of the Act to prohibit a broad range of unscrupulous or misleading practices harmful to consumers. The Act gives the FTC jurisdiction over most individuals and entities, although there are several exemptions. For instance, the FTC Act exempts common carriers, nonprofits, and financial institutions such as banks, savings and loan institutions, and federal credit unions. Consumer Financial Protection Act (CFPA): Similar to the FTC Act, the CFPA prohibits covered entities from engaging in certain unfair, deceptive, or abusive acts. Enacted in 2010 as Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPA created the Consumer Financial Protection Bureau (CFPB) as an independent agency within the Federal Reserve System. The Act gives the CFPB certain "organic" authorities, including the authority to take any action to prevent any "covered person" from "committing or engaging in an unfair, deceptive, or abusive act or practice" (UDAAP) in connection with offering or providing a "consumer financial product or service." State laws, such as California Consumer Privacy Act (CCPA), and international laws, such as European Union's General Data Protection Regulations (GDPR), aim to provide a comprehensive guidance on digital privacy. The FTC Act and the Clayton Act are the primary statutes that give the FTC investigative, law enforcement, and litigating authority to protect consumers and promote competition (i.e., antitrust). The FTC "has enforcement or administrative responsibilities under more than 70 laws." The FTC's consumer protection mission currently focuses more on data security issues—such as identity theft, violation of Do Not Call or Do Not Track, and deceptive advertising—than digital privacy concerns associated with lawful activities. While consumer protection and digital privacy are increasingly becoming synonymous, consumer protection law alone may not provide sufficient jurisdiction and authority to encompass digital privacy and data security issues for all data on all devices. Data Privacy and Data Security Digital privacy discussions often involve two closely associated topics: data privacy and data security. Data privacy is the governing of data collection, use, and sharing. Data security is protection of data from unauthorized or malicious actors. These two topics often differ in the lawfulness of activities, the intended use of data, and the effect on an individual. Data security is an aspect of cybersecurity more so than privacy. Data security defends against illicit activities such as theft of data. Data security practices include proactive measures against cyber-attacks and responsive measures such as sending notifications to affected individuals upon a data breach. Data security issues typically involve actors whose intents are malicious, who carry out unlawful activities, and use data in ways that harm an individual. Examples include breaking into a database or sending spear phishing emails to steal identity and financial information. Stolen identity and financial information are often exploited, causing financial damage to individuals and businesses. Privacy implications arise when personal information is compromised during a data security incident. D ata privacy practices determine how and to what extent data are collected, used, and with whom the data are shared. Data privacy sets the scope for control of personal information—this may include data ownership and responsibilities of involved entities. Data privacy issues typically arise from lawful activities, but personal information may have been collected, used, or shared beyond given permission or awareness of an individual. The process or results may reveal aspects of an individual that were unexpected. Examples of data privacy issues include mobile apps and websites collecting and using an individual's online activity and location data to suggest targeted ads. In general, such activities are a lawful commercial marketing strategy, from which the customers may benefit in forms of enhanced user experience and discounts. But, these activities become an issue when they lack transparency (i.e., when customers are not aware of what information is collected on them, who shares the information with whom, and how the information is used and for what purpose). Individuals may experience that their rights to privacy have been violated when aggregation of information reveals highly targeted information that an individual did not anticipate. Key aspects of data privacy—such as data collection, storage, sharing, access, and use—are not defined for digital data that are often leveraged by convergent technologies. These key aspects are defined only for certain types of information, such as medical and financial, where federal laws are in place. Similar guidance is limited or not available for other personal data, such as the following: Geolocation data collected by apps; Contact information and other user-generated content on social media; Video recordings made by smart home IoT devices; Voice recordings made by virtual assistants; and Vitals and health data collected by fitness tracking wearable IoT devices. Committees in both the House and the Senate of the 115 th Congress held several hearings where technology companies were present as witnesses. Over a dozen bills were introduced in the 115 th Congress to address various aspects of data privacy and security; but, none became a law. Committees in both the House and the Senate of the 116 th Congress have already held multiple hearings on privacy. Several bills were introduced by the 116 th Congress to address data privacy concerns as they relate to technological convergence. These bills include the following: H.R. 1282 (Representative Bobby Rush), introduced on February 14, 2019, as the Data Accountability and Trust Act, would "require certain entities who collect and maintain personal information of individuals to secure such information and to provide notice to such individuals in the case of a breach of security involving such information…." This bill would define the term personal information; outline special requirements for information brokers; and assign specific responsibilities to the FTC to regulate commercial entities' data security policies and procedures for using and protecting personal information. S. 142 (Senator Marco Rubio), introduced on January 16, 2019, as the American Data Dissemination (ADD) Act of 2019, would "impose privacy requirements on providers of internet services similar to the requirement imposed on Federal agencies under the Privacy Act of 1974." This bill would require the FTC to submit recommendations for privacy requirements for internet service providers. S. 189 (Senator Amy Klobuchar), introduced on January 17, 2019, as the Social Media Privacy Protection and Consumer Rights Act of 2019, would "protect the privacy of users of social media and other online platforms." This bill would require commercial entities with an online platform to clearly disclose their practices for personal data collection and use prior to obtaining user consents. This bill also outlines enforcement of privacy requirements by the FTC and the attorney general of each state. S. 583 (Senator Catherine Cortez Masto), introduced on February 27, 2019, as the Digital Accountability and Transparency to Advance (DATA) Privacy Act, would provide "digital accountability and transparency." This bill would require commercial entities to clearly disclose its privacy practices for various collected data. This bill also would require the FTC to enforce privacy practices to ensure that the minimum requirements are satisfied. Data Brokers According to the FTC, data brokers are companies that collect consumers' personal information and resell or share that information with others. Data brokers collect personal information about consumers from a wide range of sources and provide it for a variety of purposes, including verifying an individual's identity, marking products, and detecting fraud. Because these companies generally never interact with consumers, consumers are often unaware of their existence, much less the variety of practices in which they engage. The FTC classifies data brokers into three categories: 1. Entities subject to the FCRA; 2. Entities that maintain data for marketing purposes; and 3. Non-FCRA covered entities that maintain data for non-marketing purposes that fall outside of the FCRA. The FCRA governs the activities of credit reporting agencies, such as Equifax, Experian, and TransUnion; entities furnishing information to credit reporting agencies; and individuals who use credit reports issued by credit reporting agencies. These entities subjected to the FCRA fall within the first of the three categories of data brokers listed above. However, the FCRA does not have privacy or data security provisions. Regarding the second and third categories of data brokers, the FTC report notes that "while the FCRA addresses a number of critical transparency issues associated with companies that sell data for credit, employment, and insurance purposes, data brokers within the other two categories remain opaque." Data brokerage companies include Acxiom, Cambridge Analytica, Corelogic, Datalogix, Epsilon, Exactis, ID Analytics, Intelius, PeekYou, Rapleaf, and Recorded Future in addition to the "big three" credit reporting agencies (Equifax, Experian, and TransUnion). Many data brokers, which are conducting lawful activities, are self-regulated. As depicted in Figure 3 , data brokerage companies purchase and aggregate information from various sources, which are also self-regulated. These sources include app developers, websites, and social media. As technological convergence continues to proliferate, more data will likely be generated and consumed. Aggregations of seemingly simple and benign pieces of data when examined together could expose highly personal aspects in detail. Data brokers and entities that collect data could significantly impact digital privacy especially if individuals remain unaware of activities pertaining to their personal data. Data Security Issues Congress may be interested in data and physical security aspects of converged technologies because ubiquitous access equates to more possible entry points for both authorized and unauthorized users. This is often referred to as increase in attack surface. As more converged devices become connected to each other and to the internet, the overall impact of a compromise increases, along with the possibility of a cascading effect of a cyberattack. In policies, the requirements and responsibilities of data protection may be addressed separately from privacy concerns associated with legal use of personal data. Data security, a component of cybersecurity, protects data from unauthorized access and use. Along with digital privacy, data security is a pertinent issue to technological convergence, which generates and consumes large volumes of data. Technological convergence poses a number of different types of potential data security concerns, including the following: potentially increased number of access points susceptible to cyberattacks, linkage to physical security, and theft of data. Increased connectivity generally translates to increased risk of cyberattack. Converged technologies, such as IoT devices, offer the users ubiquitous access: access from anywhere, at any time, using any device. While this is an extremely convenient characteristic, it also poses cybersecurity concerns. Multiple access points equate to increased points or opportunities for potential exploitation by malicious actors. This is often described as increased attack vectors, or broadening attack surface, which is a sum of attack vectors. The same entry points a user may use for remote access can be exploited by an adversary to steal personal information. From the data security perspective, this is a tradeoff to consider between convenience and vulnerability. Cybersecurity and physical security are directly linked through converged technologies. For example, when smart doors and smart locks are remotely controlled by a malicious actor through cyberattack, the physical security of that building also becomes compromised. The damage may not be limited to loss of digital content or information. Loss of personal data stored in the compromised location as well as personal security could be in jeopardy. Potential loss or theft of personal data may be a data security concern for converged technologies because IoT devices often do not employ strong encryption at the device or user interface level. Not implementing strong encryption may be intentional due to associated benefits—it usually keeps the cost low, increases battery life of devices, minimizes memory requirements, reduces device size, and is easier to use or implement. This means, not only is the attack vector increased, but a system is also easier to break into. IoT devices may be the most vulnerable points of a system targeted by malicious actors for exploitation. Some experts note that IoT security currently lacks critical elements such as end-to-end security solutions, common security standards across the IoT industry, and customers' willingness to pay additional cost for enhanced security. Congressional Considerations for Technological Convergence With relatively few policies in place for specifically overseeing technological convergence, Congress may consider potential policy options to address the issues discussed in this report. The fundamental policy considerations to identifying options may be determining the role, if any, of the federal government in overseeing technological convergence, digital privacy, and data security. Regulatory Considerations Regulating technological convergence may entail policies for jurisdictional deconfliction, harmonization, and expansion to address blended or new categories of technology. Currently, aspects of converged technologies may be regulated by different agencies based on the individual technologies that compose the convergence, but not as a whole. Regulating a converged technology as a whole can also be challenging because the combinations of technologies may generate too many possible outcomes. When converged technologies establish a new domain and fall outside of existing regulatory jurisdictions, they are often left to self-regulate. Congress and the Administration could take a number of approaches in regulating technological convergence. Three potential approaches are discussed here. First, the federal government could continue to allow industry to self-regulate, especially where technology evolves quickly. This may promote innovative space, but relies on the industry to exercise responsible and accountable practices. Second, Congress and the Administration could maintain current regulatory jurisdiction but leverage a deconfliction or harmonization policy so that convergent technologies are regulated under one primary authority instead of potentially multiple authorities. Preserving existing regulatory jurisdiction may require minimal restructuring and allow relatively short timeline for implementation. While a deconfliction or harmonization policy could increase coordination, overlaying such policy on an existing regulatory framework may not present the most efficient process. Third, the Administration could consider expanding regulatory jurisdictions and authorities to include new and emerging convergent technologies that are self-regulated. This may require a complete overhaul of the technology regulatory framework, requiring congressional action and a relatively lengthy adaptation timeline for the affected industries. Some could also view such actions as extensive regulation that stifles innovation and commercial growth. On the other hand, this approach could present an opportunity to update policies on par with technology progressions and posture for emerging capabilities. Digital Privacy Considerations Federal data protection laws currently in place apply to specific types of data and have varied privacy and data security provisions. A federal law that comprehensively addresses digital privacy for all types of data is not in place. While illegal use of personal information (such as identity theft and fraud) is defined and enforced by federal agencies, legal use of data generated by users or converged technologies (such as social media and IoT) is not regulated to the same extent. Transparency into the activities of legal data brokers and collectors is limited. Congress may choose to define the role of the federal government overseeing digital privacy by introducing new comprehensive federal law(s) and/or by determining minimal required standards of digital privacy. An alternative option could be expanding existing digital privacy authorities. This could include deciding whether federal entities, such as the FTC, should have their rulemaking abilities clarified or expanded. An expanded or new federal digital privacy policy may require a variety of decisions by Congress. Two of many potential decisions pertaining to federal digital privacy policy are determining how data privacy and data security could be addressed legislatively and determining whether various types, or categories, of personal data should be treated equally or differently under varied guidance. Data Security Considerations Data security, as it pertains to technological convergence, may impact both the cyber and physical fronts. Some of the federal data protection laws currently in place have data security provisions, though they vary and may be focused predominantly on the cyber-aspect. This also means that different data security protocols apply to different types of data. For instance, the guidance for notifying users when personal data gets compromised is different for health, financial, and location data. Similar to the digital privacy considerations, Congress could begin by determining whether overarching legislation for data security is necessary. Congress may consider new legislation explicitly addressing data security concerns pertaining to technological convergence. Or, Congress may consider new legislation to expand existing cybersecurity missions to address data security issues. Data security is often considered as a component of cybersecurity, but protection of the data is equally important as safeguarding a network or a system. As with any security challenge, finding the right balance between convenience and security measures is a key component of an effective security policy. A data security policy that predominantly focuses on security measures to address potential vulnerabilities created by converged technologies could negate convenient features and beneficial capabilities, such as ubiquitous access, offered by the converged technologies. On the other hand, allowing maximum accessibility without a security measure exposes both the data and the system to risks. Not having an updated data security policy relies on existing cybersecurity measures to address potential vulnerabilities introduced by technological convergence. Congress may determine whether data privacy and data security should be addressed in one policy. Data privacy and data security are linked and complementary, especially for digital information. While two coupled topics could be addressed in a single policy, data privacy and data security are two distinct issues. Having separate complementary policies could potentially focus more clearly on specific aspects of each issue. Summary:	null	96	54,050	54,052	54,052	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Technological convergence, in general, refers to the trend or phenomenon where two or more independent technologies integrate and form a new outcome. One example is the smartphone. A smartphone integrates several independent technologies—such as telephone, computer, camera, music player, television (TV), and geolocating and navigation tool—into a single device. The smartphone has become its own, identifiable category of technology. Currently, over 35% of the global population are smartphone users and over 3 billion active devices are in circulation. In the United States, about 80% of the U.S. population are smartphone users, and over 280 million active devices are in circulation. The technological convergence has resulted in establishing a new and prominent smartphone industry sector, worth over $350 billion globally, according to some estimates. Technological convergence may present a range of issues where Congress may take legislative and/or oversight actions. Three selected issue areas associated with technological convergence are regulatory jurisdiction, digital privacy, and data security. First, merging and integrating multiple technologies from distinct functional categories into one converged technology may pose challenges to defining regulatory policies, roles, and responsibilities. Determining oversight jurisdictions and regulatory authorities for converged technologies may become complicated as the boundaries that once separated single-function technologies are blended together. In other words, delineating which policy authorizes which government agency to apply which standards to regulate which industry is no longer simple and straightforward. How Congress chooses to oversee certain industries and government agencies may also become complicated due to converging technologies that blur and blend existing categorical boundaries. Second, digital privacy concerns stem from converged technologies' collection and usage of personal and machine data. Technological convergence facilitates increasing consumption and collection of data, which poses potential digital privacy concerns for consumers. Data collection and usage are tied to digital privacy issues because a piece or aggregation of information could identify an individual or reveal patterns in their activities. Converged technologies leverage large volumes of data to try to improve the user experience by generating more tailored and anticipatory results. This data can also potentially be used to identify, locate, track, and monitor an individual without the person's knowledge. The same data can potentially be sold to third-party entities without an individual's awareness. As the use of converged technologies continues to propagate, digital privacy issues will likely remain central to the policy debate. Third, data security concerns are often associated with smart devices. As devices are able to interconnect, the convenient ubiquitous features may create vulnerabilities that could be exploited by malicious actors. Data security, a component of cybersecurity, protects data from unauthorized access and use. Along with digital privacy, data security is a pertinent issue for converged technologies, which generate and consume large volumes of data. Technological convergence poses three potential data security concerns: increased number of access points susceptible to cyberattacks, linkage to physical security, and theft of data. The first section of this report describes technological convergence along with closely associated media convergence and network convergence. The report uses the Internet of Things (IoT) and smart home devices as primary examples. Of these three convergences, consumers most often directly engage with converged technologies. In contrast, general consumers may not have the same level of engagement or understanding of media and network convergences, as they often occur in the background. The second section of this report presents regulatory, digital privacy, and data security issues pertaining to technological convergence. The current state, challenges, and recent legislative activities are discussed. The third section of this report concludes with potential considerations for Congress. An overarching consideration for regulatory, digital privacy, and data security issues may be determining the role, if any, of the federal government in an environment where technological evolution changes quickly and continues to disrupt existing frameworks. Policies governing these three issues—regulations, digital privacy, and data security—may be of interest to Congress as well as other stakeholders, including U.S. government agencies, commercial entities, and the general public. Description of Technological Convergence "Technological convergence" is a concept whereby merging, blending, integration, and transformation of independent technologies leads to a completely new converged technology. This broad, complex concept encompasses a wide range of technologies, including IoT and smart home devices. When a converged technology emerges, it often replaces single-function technologies or renders them obsolete. In this sense, technological convergence can be viewed as a progression or evolution of technology. A discussion of technological convergence in isolation is difficult because technological convergence is closely associated with media convergence and network convergence. Technological, media, and network convergences are interdependent, but each possesses subtle distinctions. These three terms are often used interchangeably, further complicating the discussion of an already complex topic. Figure 1 illustrates relationships between technological, media, and network convergences. Technological convergence : This occurs when the functions of different technologies are merged and interoperate as a single unit. A converged unit can typically process multiple types of media that correspond to each technology that merged. Technological convergence includes devices and systems that interface with end users. For example, a user interacts with converged devices, such as a smart television (TV), to access the contents that are distributed over a network. A smart TV has combined the functions of a traditional TV, a computer, and several other devices that used to have one specific purpose. In addition to displaying over-the-air broadcast TV channels, smart TVs interface with users to surf the internet, view photos taken from smartphones and stored in the "cloud," display feeds from home security cameras connected to a network, play music, notify users of incoming calls and messages, and allow video teleconferencing. Smart TVs can process a variety of formats of media to perform multiple functions. Media convergence : This refers to content that is made available through multiple forms, formats, and access points. Media convergence proliferated as analog mediums of communication became digitized. For example, the contents on a newspaper used to be available only in print. The same content is currently available in both print and digital forms, as text, visual, and/or audio formats, and through multiple devices and platforms including social media. Network convergence : This refers to a single network infrastructure that handles and distributes multiple types of media. Network convergence became prominent when telecommunications and information networks integrated; it became prevalent when mobile cellular communications incorporated access to the internet and made it widespread. For example, today's cable companies process information in forms of voice, video, and data on a single network and often offer their services as a bundle package (e.g., phone, television, and internet services). Similarly, cellular networks, which distribute information to and from mobile devices and fixed platforms, process voice, video, and data. Prior to network, media, and technological convergences, a separate, independent network was dedicated to handling and distributing one particular type of media that was processed by a single-function device. For example, a telephone network distributed audio information (i.e., voice) between telephone handsets. A broadcasting network delivered video to television sets. Convergence removes such pairing (i.e., "decouples") between media, network, and device. Decoupling gives convergence its versatility, flexibility, and complexity. Characteristics of Smart Devices Many technological convergence devices are called "smart" devices, which often include IoT devices. (Examples of IoT devices are discussed in following sections.) Despite a wide range of applications, smart converged technologies share key characteristics: Smart devices can execute multiple functions to serve blended purposes; Smart devices can collect and use data in various formats and employ machine learning algorithms to deliver optimized and enhanced user experience; and Smart devices are connected to a network directly and/or are interconnected with other smart devices, offering ubiquitous access to users from anywhere on any platform. These key characteristics may present potential policy questions for Congress, including the following: Who will provide oversight and how will regulatory authorities be applied to technologies that serve multiple functions or that do not belong to an established category? How should consumer data be collected and used to protect digital privacy without limiting technology innovation? How to shape data security practices to safeguard personal information and physical security from malicious actors? An Overview of Internet of Things The IoT is a common example of technological convergence. The IoT is a system of devices that are connected to a network and each other, exchanging data without necessarily requiring human-to-human or human-to-computer interaction. In other words, IoT is a collection of electronic devices that can share information among themselves (e.g., smart home devices). The IoT possess all three characteristics of converged technologies: multiple functions, data collection and use, and ubiquitous access. Various categories of IoT include industrial Internet of Things, Internet of Medical Things, smart city infrastructures, and smart home devices. IoT industry is a growing market both globally and in the United States. According to some estimates, in 2018, the IoT retail market in the United States was almost $4 billion, and over 700 million consumer IoT devices were in use in 2017 in the United States. Figure 2 illustrates global revenue of the IoT from 2012 to 2018, according to Statista, a company that consolidates statistical data, based on information from IC Insights. In 2018, consumer IoT devices, such as wearable and connected smart home devices, generated over $14 billion globally. The connected cities category, or smart cities, was the largest (41%) of 2018 global IoT revenue. The industrial Internet of Things, such as smart factories, had the biggest growth in terms of global revenue between 2017 and 2018 among the different categories of the IoT. An estimate of various IoT markets by McKinsey also shows the industrial IoT as potentially increasing the most by 2025 compared to other IoT systems. The development, application, and usage of IoT will likely continue to grow with Fifth-Generation (5G) Technologies cellular service, which will allow a larger number of devices to be connected simultaneously to a network, supporting not only consumer but industrial use of IoT devices and systems. IoT devices are used in many different fields and serve a variety of functions. The IoT encompasses a broad range of applications. Selected categories of IoT devices are discussed below. Industrial Internet of Things (IIoT): Examples of commercial application of the IoT can be found in the manufacturing industry. Referred to as industrial Internet of Things (IIoT), networked machines in a production facility can communicate and share information to improve efficiency, productivity, and performance. The application of IIoT can vary significantly, from detecting corrosion inside a refinery pipe to providing real-time production data. Also, IIoTs can enable a variety of industries, such as manufacturing, chemicals, food and beverage, automotive, and steel, to transform their operations and potentially yield financial benefits. Currently in North America, there are more consumer IoT connections than IIoT connections, but this may change in the future. Incorporation of IIoT and analytics is considered by some as the Fourth Industrial Revolution (4IR). Internet of Medical Things (IoMT): Some experts project the use of Internet of Medical Things (IoMT) is increasing. IoMT devices, such as heart monitors and pace makers, collect and send a patient's health statistics over various networks to healthcare providers for monitoring, remote configuration, and preventions. In 2017, over 300 million IoT devices in the medical sector were connected worldwide, and, in 2018, over 400 million devices were connected. At a personal health level, wearable IoT devices, such as smart watches and fitness trackers, can track a user's physical activities, basic vitals, and sleeping patterns. In 2017, over 40 million fitness tracker IoT were in use in the United States. Smart Cities: IoT devices and systems in transportation, utilities, and infrastructure sectors may be grouped under the category of "smart city." An example of utilities IoT in a smart city is "smart" grid and meters for electricity, water, and gas where sensors collect and share customer usage data to enable the central control system to optimize production and distribution to meet demand real-time. An example of transportation IoT in a smart city is fare readers and status trackers or locaters that interface across all public transportation platforms. Columbus, OH's winning proposal for the Department of Transportation's (DOT) Smart City Challenge of 2016, included connected infrastructure that interacts with vehicles, trip planning and common payment system across multiple transit system, and electric autonomous vehicles and shuttles. Other finalists of the DoT Smart City Challenge were Austin, TX; Denver, CO; Kansas City, MO; Pittsburgh, PA; Portland, OR; and San Francisco, CA. Smart cities is currently the largest segment of IoT in terms of revenue. Smart Home: Consumer product IoT devices used in homes and buildings are often grouped under the "smart home" category. Included in this categories are smart appliances, smart TV, smart entertainment systems, smart thermostats, and network-connected light bulbs, outlets, door locks, door bells, and home security systems. These smart home IoT devices are connected to a single network and can be controlled remotely over the internet. Eight of 11 categories of consumer IoT devices used in 2017 were related to smart home. In 2018, the size of the global smart home market was estimated to be over $30 billion. An Example: Smart Home A smart home contains a collection of consumer IoT devices intended for personal use where user experience is improved by connecting various features of a house to a network. For example, smart home IoT devices may be interconnected to each other and to a central control system for a home with voice interface, often referred to as a virtual assistant. Commonly known examples of virtual assistants are Amazon's Alexa, Apple's Siri, Google Assistant, Microsoft's Cortana, and Samsung's Bixby. A virtual assistant is a platform that can manage and relay information to smart home devices based on user-established criteria. Moreover, a smart home may have a doorbell with a video camera and a speaker that allows a user to see who is at the door and to speak to the person at the door from anywhere over the internet. A smart home may have a smart door lock that can be locked and unlocked remotely. In addition, the thermostat, lights, electrical outlets, and appliances in a smart home may be remotely controlled by a user over the internet. A smart appliance, such as a smart refrigerator that is networked, can use its sensors to identify items and can notify a user based on set criteria, such as restocking alerts or suggested recipes. Some smart home devices resemble traditional devices, but with cross-over functions or networking abilities. Examples include smart lightbulbs, smart electrical outlet plugs, smart TV, and smart appliances. Some smart home devices are establishing a new category of industry segment that did not exist previously. An example is Amazon's Echo products with virtual assistant Alexa as voice user interface. Whether it is the former (evolutionary technologies) or the latter (new/revolutionary technologies), the smart home industry is fast emerging and growing. Smart home devices, which are a type of IoT, possess the three characteristics of converged technologies: multiple or blended functions, collection and use of data, and ubiquitous access through network connection. Thus, potential policy interests associated with technological convergence can be also observed in smart home devices. Potential smart home issues for Congress include the following. Congress may decide it is necessary to resolve oversight jurisdictions and regulatory authorities of smart home devices, especially for products like virtual assistants, which may not belong to an established category of technology. The mission of the Federal Trade Commission (FTC) includes both protecting consumers and promoting business competition. Congress may choose to review the FTC's current authorities to ensure that they are sufficient to oversee emerging smart home technologies. In addition, potentially deconflicting or harmonizing jurisdictions may be discussed if other federal government organizations and their mission are impacted by emerging smart home technologies. Congress may decide that new or expanded policies are necessary to protect consumer digital privacy, including personal data that are collected and used by smart home devices, such as a smart TV, in private spaces, such as a user's home. Although the FTC does promote a level of digital privacy through its consumer protection authorities, emerging digital privacy issues are linked to practices that are legal as opposed to fraud, theft, or other malicious activities. Congress may examine whether a federal law that comprehensively addresses personal digital privacy is necessary or an expansion of the FTC's consumer data protection authorities is required. Emerging smart home technologies may further necessitate safeguarding data from malicious actors. In addition to collecting and using personal data, smart home devices bridge physical security and cybersecurity. Malicious actors may have more means to exploit a user's information and home through smart home devices, which offer ubiquitous access as a key convenience feature. Whether current policies adequately addresses data, cyber, and physical security concerns may also be considered. Selected Issues Associated with Technological Convergence Regulation, digital privacy, and data security are three selected issues associated with technological convergence that may be of interest to many stakeholders, including Congress. As identified in the smart home example in the previous section, each of these three issues is discussed further in subsequent subsections. The three selected issues are tied to the three characteristics of converged technologies discussed previously in the " Characteristics of Smart Devices " section. First, convergence of technologies blend and blur existing categorical distinctions for each technology because a converged technology can perform multiple functions. Second, technological convergence consumes, collects, and generates a large volume of both personal and machine data. Third, converged technologies allow ubiquitous access points to the end users. These characteristics are typically observed as a result of decoupling the devices from media and network. Regulatory Issues Congress may consider policies that address blending standards and boundaries as converged technologies and companies merge and replace traditionally independent and distinct categories. Policy issues may include oversight jurisdictions, regulatory authorities, and commercial competitiveness since a converged technology could fall within multiple domains. An example may be delineating the Federal Communications and Commission's (FCC) and the FTC's authorities on convergence technologies as more devices and services become mobile and wirelessly connected. Merging and integrating multiple technologies from distinct functional categories into one converged technology pose challenges to regulatory policies and responsibilities. Determining oversight jurisdictions and regulatory authorities for converged technologies becomes unclear as the boundaries that once separated single-function technologies blend and blur together. A challenge for policymakers may be in delineating which government agency and which policies and standards would best apply to certain technologies or certain industries. Where there were once clear lines of authority by industry or media type (e.g., voice, video, data), they are no longer simple and straightforward for technologies where these functionalities have converged. How Congress oversees which industries and government agencies may become complicated due to converging technologies that blend existing categorical boundaries. Congress may decide that it is necessary for specific legislative committees to effectively oversee a converged technology that serves multiple functions. As a result, the alignment of converged technologies to regulatory authorities may shift as technologies evolve. The complexities in setting regulatory jurisdiction can be further subdivided into regulating converging technologies and regulating evolving technology companies . They are discussed below. Regulating Converging Technologies Regulating a converging technology, which is a result of blending or integrating multiple technologies, can be challenging. This is because (1) the one-to-one relationship between a converging technology and a regulatory entity is no longer clear, and (2) a converging technology may create a new sector where a regulatory entity has not been identified. Initially, the standards and oversight policies for a specific technology were established independently. They were not necessarily developed with merging or interoperability in mind. For example, telephony (when providing voice), cable TV (when providing video), and mobile cellular technologies each follow their respective standards, and these services were regulated by policies specific to each type. When a converged technology utilizes differing communications technologies, it may be required to adhere to multiple standards and regulations. In such cases, multiple agencies may need to regulate a single converged technology. This may require extended timelines for regulatory reviews. Industry may incur additional costs to meet standards and reporting requirements for converged technologies. In other situations, as technologies converge, the outcome may yield a completely new technology for which a regulatory category did not previously exist. Examples include social media, IoTs, and virtual assistants. Without a clear regulatory and oversight framework in place, new converged technologies may be left unregulated, partially regulated, or regulated under a newly developed framework. They could also be left to self-regulate by the industry; or they could be overlooked as governing bodies remain indeterminate on which jurisdictional boundaries need to be stretched to cover emerging technology fields. Regulating Evolving Companies Regulating companies that offer converged technologies is challenging because the services and product lines evolve and expand such that they do not fall within a single category. Although diversification is considered normal business practice, technological convergence broadens the operational range for companies, spanning multiple industry sectors. Antitrust concerns could arise, or companies may not be subjected to the same level of oversight and regulation due to lack of classification. For example, companies such as Amazon, Apple, and Google each offer smart home devices and platforms. Some of these devices, such as a smart doorbell with a video camera, smart doors and locks, and networked contact sensors and video cameras, may function as home security devices. Many of these products are bundled as a starting kit for home security. However, these technology convergence companies may not be required to follow state and local regulations as traditional home security companies that provide monitored security service do. Another example discussed widely in Congress is social media—whether social media companies should be classified as information technology companies, as advertising and marketing firms, as communications platforms, or as the press. As converged technologies and associated companies straddle or fall between jurisdictional boundaries, regulatory roles and responsibilities become more complex. Digital Privacy Issues Congress may be interested in digital privacy concerns of converged technologies, which often collect and use personal information and machine data as they directly interface with end-users. Current federal laws protect certain types of data pertaining to privacy by specifying collection, storage, use, and dissemination practices. As converged technologies generate and innovatively leverage more types and volumes of data that can identify, locate, or track a person, consumer concerns for protecting digital privacy may intensify. Technological convergence facilitates increased consumption and collection of data, posing potential digital privacy concerns for consumers. Data collection and usage are tied to digital privacy issues because a piece or aggregation of information could identify an individual or reveal patterns in their activities. Converged technologies leverage large volumes of data to try to improve the user experience by generating more tailored and anticipatory results. However, such data can potentially identify, locate, track, and monitor an individual without the person's knowledge. As the use of converged technologies continues to propagate, digital privacy issues will likely remain central. Current Data Protection Laws While a federal law that comprehensively addresses digital privacy does not currently exist, many laws are in place to protect certain types of data and their impact on specific aspects of privacy. Current U.S. data protection laws include the following, as taken from CRS Report R45631, Data Protection Law: An Overview : Gramm-Leach-Bliley Act (GLBA): The GLBA imposes several data protection obligations on financial institutions. These obligations are centered on a category of data called "consumer" "nonpublic personal information" (NPI), and generally relate to: (1) sharing NPI with third parties, (2) providing privacy notices to consumers, and (3) security NPI from unauthorized access. Health Insurance Portability and Accountability Act (HIPAA): Under the HIPAA, the Department of Health and Human Services (HHS) has enacted regulations protecting a category of medical information called "protected health information" (PHI). These regulations apply to health care providers, health plans, and health care clearinghouses (covered entities), as well as certain "business associates" of such entities. The HIPAA regulations generally speak to covered entities': (1) using or sharing of PHI, (2) disclosure of information to consumers, (3) safeguards for securing PHI, and (4) notification of consumers following a breach of PHI. Fair Credit Reporting Act (FCRA): The FCRA covers the collection and use of information bearing on a consumer's creditworthiness. FCRA and its implementing regulations govern the activities of three categories of entities: (1) credit reporting agencies (CRAs), (2) entities furnishing information to CRAs (furnishers), and (3) individuals who use credit reports issued by CRAs (users). In contrast to HIPAA or GLBA, there are no privacy provisions in FCRA requiring entities to provide notice to a consumer or to obtain his opt-in or opt-out consent before collecting or disclosing the consumer's data to third parties. FCRA further has no data security provisions requiring entities to maintain safeguards to protect consumer information from unauthorized access. Rather, FCRA's requirements generally focus on ensuring that the consumer information reported by CRAs and furnishers is accurate and that it is used only for certain permissible purposes. The Communications Act : The Communications Act of 1934 (Communications Act or Act), as amended, established the Federal Communications Commission (FCC) and provides a "comprehensive scheme" for the regulations of interstate communication. [T]he Communications Act includes data protection provisions applicable to common carriers, cable operators, and satellite carriers. Video Privacy Protection Act (VPPA): The VPPA was enacted in 1988 in order to "preserve personal privacy with respect to the rental, purchase, or delivery of video tapes or similar audio visual materials." The VPPA does not have any data security provisions requiring entities to maintain safeguards to protect consumer information from unauthorized access. However, it does have privacy provisions restricting when covered entities can share certain consumer information. Specifically, the VPPA prohibits "video tape service providers"—a term that includes both digital video streaming services and brick-and-mortar video rental stores—from knowingly disclosing [personally identifiable information] (PII) concerning any "consumer" without that consumer's opt-in consent. The VPPA does not empower any federal agency to enforce violations or the Act and there are no criminal penalties for violations, but it does provide for a private right of action for persons aggrieved by the Act. Family Educational Rights and Privacy Act (FERPA): The FERPA creates privacy protections for student education records. "Education records" are defined broadly to generally include any "materials which contain information directly related to a student" and are "maintained by an educational agency or institution." FERPA defines an "educational agency of institution" to include "any public or private agency or institution which is the recipient of funds under any applicable program." FERPA generally requires that any "educational agency or institution" (i.e., covered entities) give parents or, depending on their age, the student (1) control over the disclosure of the student's educational records, (2) an opportunity to review those records, and (3) an opportunity to challenge them as inaccurate. Federal Securities Laws : While federal securities statutes and regulations do not explicitly address data protection, two requirements under these laws have implications for how companies prevent and respond to data breaches. First, federal securities laws may require companies to adopt controls designed to protect against data breaches. Second, federal securities laws may require companies to discuss data breaches when making required disclosures under securities laws. Children's Online Privacy Protection Act (COPPA): The COPPA and the FTC's implementing regulations regulate the online collection and use of children's information. Specifically, COPPA's requirements apply to: (1) any "operator" of a website or online service that is "directed to children," or (2) any operator that has any "actual knowledge that it is collecting personal information from a child" (i.e., covered operators). Covered operators must comply with various requirements regarding data collection and use, privacy policy notifications, and data security. Electronic Communications Privacy Act (ECPA): The ECPA was enacted in 1986, and is composed of three acts: the Wiretap Act, the Stored Communications Act (SCA), and the Pen Register Act. Much of ECPA is directed at law enforcement, providing "Fourth Amendment like privacy protections" to electronic communications. However, "ECPA's three acts also contain privacy obligations relevant to non-governmental actors. ECPA is perhaps the most compressive federal law on electronic privacy, as it is not sector-specific, and many of its provisions apply to a wide range of private and public actors. Nevertheless, its impact on online privacy has been limited. As some commentators have observed, ECPA "was designed to regulate wiretapping and electronic snooping rather than commercial data gathering," and litigants attempting to apply ECPA to online data collection have generally been unsuccessful. Computer Fraud and Abuse Act (CFAA): The CFAA was originally intended as a computer hacking statute and is centrally concerned with prohibiting unauthorized intrusions into computers, rather than addressing other data protection issues such as the collection or use of data. Specifically, the CFAA imposes liability when a person "intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains… information from any protected computer." A "protected computer" is broadly defined as any computer used in or affecting interstate commerce or communications, functionally allowing the statute to apply to any computer that is connected to the internet. Federal Trade Commission Act (FTC Act): The FTC Act has emerged as a critical law relevant to data privacy and security. As some commentators have noted, the FTC has used its authority under the Act to become the "go-to agency for privacy," effectively filling in gaps left by the aforementioned federal statutes. While the FTC Act was originally enacted in 1914 to strengthen competition law, the 1938 Wheeler-Lea amendment revised Section 5 of the Act to prohibit a broad range of unscrupulous or misleading practices harmful to consumers. The Act gives the FTC jurisdiction over most individuals and entities, although there are several exemptions. For instance, the FTC Act exempts common carriers, nonprofits, and financial institutions such as banks, savings and loan institutions, and federal credit unions. Consumer Financial Protection Act (CFPA): Similar to the FTC Act, the CFPA prohibits covered entities from engaging in certain unfair, deceptive, or abusive acts. Enacted in 2010 as Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPA created the Consumer Financial Protection Bureau (CFPB) as an independent agency within the Federal Reserve System. The Act gives the CFPB certain "organic" authorities, including the authority to take any action to prevent any "covered person" from "committing or engaging in an unfair, deceptive, or abusive act or practice" (UDAAP) in connection with offering or providing a "consumer financial product or service." State laws, such as California Consumer Privacy Act (CCPA), and international laws, such as European Union's General Data Protection Regulations (GDPR), aim to provide a comprehensive guidance on digital privacy. The FTC Act and the Clayton Act are the primary statutes that give the FTC investigative, law enforcement, and litigating authority to protect consumers and promote competition (i.e., antitrust). The FTC "has enforcement or administrative responsibilities under more than 70 laws." The FTC's consumer protection mission currently focuses more on data security issues—such as identity theft, violation of Do Not Call or Do Not Track, and deceptive advertising—than digital privacy concerns associated with lawful activities. While consumer protection and digital privacy are increasingly becoming synonymous, consumer protection law alone may not provide sufficient jurisdiction and authority to encompass digital privacy and data security issues for all data on all devices. Data Privacy and Data Security Digital privacy discussions often involve two closely associated topics: data privacy and data security. Data privacy is the governing of data collection, use, and sharing. Data security is protection of data from unauthorized or malicious actors. These two topics often differ in the lawfulness of activities, the intended use of data, and the effect on an individual. Data security is an aspect of cybersecurity more so than privacy. Data security defends against illicit activities such as theft of data. Data security practices include proactive measures against cyber-attacks and responsive measures such as sending notifications to affected individuals upon a data breach. Data security issues typically involve actors whose intents are malicious, who carry out unlawful activities, and use data in ways that harm an individual. Examples include breaking into a database or sending spear phishing emails to steal identity and financial information. Stolen identity and financial information are often exploited, causing financial damage to individuals and businesses. Privacy implications arise when personal information is compromised during a data security incident. D ata privacy practices determine how and to what extent data are collected, used, and with whom the data are shared. Data privacy sets the scope for control of personal information—this may include data ownership and responsibilities of involved entities. Data privacy issues typically arise from lawful activities, but personal information may have been collected, used, or shared beyond given permission or awareness of an individual. The process or results may reveal aspects of an individual that were unexpected. Examples of data privacy issues include mobile apps and websites collecting and using an individual's online activity and location data to suggest targeted ads. In general, such activities are a lawful commercial marketing strategy, from which the customers may benefit in forms of enhanced user experience and discounts. But, these activities become an issue when they lack transparency (i.e., when customers are not aware of what information is collected on them, who shares the information with whom, and how the information is used and for what purpose). Individuals may experience that their rights to privacy have been violated when aggregation of information reveals highly targeted information that an individual did not anticipate. Key aspects of data privacy—such as data collection, storage, sharing, access, and use—are not defined for digital data that are often leveraged by convergent technologies. These key aspects are defined only for certain types of information, such as medical and financial, where federal laws are in place. Similar guidance is limited or not available for other personal data, such as the following: Geolocation data collected by apps; Contact information and other user-generated content on social media; Video recordings made by smart home IoT devices; Voice recordings made by virtual assistants; and Vitals and health data collected by fitness tracking wearable IoT devices. Committees in both the House and the Senate of the 115 th Congress held several hearings where technology companies were present as witnesses. Over a dozen bills were introduced in the 115 th Congress to address various aspects of data privacy and security; but, none became a law. Committees in both the House and the Senate of the 116 th Congress have already held multiple hearings on privacy. Several bills were introduced by the 116 th Congress to address data privacy concerns as they relate to technological convergence. These bills include the following: H.R. 1282 (Representative Bobby Rush), introduced on February 14, 2019, as the Data Accountability and Trust Act, would "require certain entities who collect and maintain personal information of individuals to secure such information and to provide notice to such individuals in the case of a breach of security involving such information…." This bill would define the term personal information; outline special requirements for information brokers; and assign specific responsibilities to the FTC to regulate commercial entities' data security policies and procedures for using and protecting personal information. S. 142 (Senator Marco Rubio), introduced on January 16, 2019, as the American Data Dissemination (ADD) Act of 2019, would "impose privacy requirements on providers of internet services similar to the requirement imposed on Federal agencies under the Privacy Act of 1974." This bill would require the FTC to submit recommendations for privacy requirements for internet service providers. S. 189 (Senator Amy Klobuchar), introduced on January 17, 2019, as the Social Media Privacy Protection and Consumer Rights Act of 2019, would "protect the privacy of users of social media and other online platforms." This bill would require commercial entities with an online platform to clearly disclose their practices for personal data collection and use prior to obtaining user consents. This bill also outlines enforcement of privacy requirements by the FTC and the attorney general of each state. S. 583 (Senator Catherine Cortez Masto), introduced on February 27, 2019, as the Digital Accountability and Transparency to Advance (DATA) Privacy Act, would provide "digital accountability and transparency." This bill would require commercial entities to clearly disclose its privacy practices for various collected data. This bill also would require the FTC to enforce privacy practices to ensure that the minimum requirements are satisfied. Data Brokers According to the FTC, data brokers are companies that collect consumers' personal information and resell or share that information with others. Data brokers collect personal information about consumers from a wide range of sources and provide it for a variety of purposes, including verifying an individual's identity, marking products, and detecting fraud. Because these companies generally never interact with consumers, consumers are often unaware of their existence, much less the variety of practices in which they engage. The FTC classifies data brokers into three categories: 1. Entities subject to the FCRA; 2. Entities that maintain data for marketing purposes; and 3. Non-FCRA covered entities that maintain data for non-marketing purposes that fall outside of the FCRA. The FCRA governs the activities of credit reporting agencies, such as Equifax, Experian, and TransUnion; entities furnishing information to credit reporting agencies; and individuals who use credit reports issued by credit reporting agencies. These entities subjected to the FCRA fall within the first of the three categories of data brokers listed above. However, the FCRA does not have privacy or data security provisions. Regarding the second and third categories of data brokers, the FTC report notes that "while the FCRA addresses a number of critical transparency issues associated with companies that sell data for credit, employment, and insurance purposes, data brokers within the other two categories remain opaque." Data brokerage companies include Acxiom, Cambridge Analytica, Corelogic, Datalogix, Epsilon, Exactis, ID Analytics, Intelius, PeekYou, Rapleaf, and Recorded Future in addition to the "big three" credit reporting agencies (Equifax, Experian, and TransUnion). Many data brokers, which are conducting lawful activities, are self-regulated. As depicted in Figure 3 , data brokerage companies purchase and aggregate information from various sources, which are also self-regulated. These sources include app developers, websites, and social media. As technological convergence continues to proliferate, more data will likely be generated and consumed. Aggregations of seemingly simple and benign pieces of data when examined together could expose highly personal aspects in detail. Data brokers and entities that collect data could significantly impact digital privacy especially if individuals remain unaware of activities pertaining to their personal data. Data Security Issues Congress may be interested in data and physical security aspects of converged technologies because ubiquitous access equates to more possible entry points for both authorized and unauthorized users. This is often referred to as increase in attack surface. As more converged devices become connected to each other and to the internet, the overall impact of a compromise increases, along with the possibility of a cascading effect of a cyberattack. In policies, the requirements and responsibilities of data protection may be addressed separately from privacy concerns associated with legal use of personal data. Data security, a component of cybersecurity, protects data from unauthorized access and use. Along with digital privacy, data security is a pertinent issue to technological convergence, which generates and consumes large volumes of data. Technological convergence poses a number of different types of potential data security concerns, including the following: potentially increased number of access points susceptible to cyberattacks, linkage to physical security, and theft of data. Increased connectivity generally translates to increased risk of cyberattack. Converged technologies, such as IoT devices, offer the users ubiquitous access: access from anywhere, at any time, using any device. While this is an extremely convenient characteristic, it also poses cybersecurity concerns. Multiple access points equate to increased points or opportunities for potential exploitation by malicious actors. This is often described as increased attack vectors, or broadening attack surface, which is a sum of attack vectors. The same entry points a user may use for remote access can be exploited by an adversary to steal personal information. From the data security perspective, this is a tradeoff to consider between convenience and vulnerability. Cybersecurity and physical security are directly linked through converged technologies. For example, when smart doors and smart locks are remotely controlled by a malicious actor through cyberattack, the physical security of that building also becomes compromised. The damage may not be limited to loss of digital content or information. Loss of personal data stored in the compromised location as well as personal security could be in jeopardy. Potential loss or theft of personal data may be a data security concern for converged technologies because IoT devices often do not employ strong encryption at the device or user interface level. Not implementing strong encryption may be intentional due to associated benefits—it usually keeps the cost low, increases battery life of devices, minimizes memory requirements, reduces device size, and is easier to use or implement. This means, not only is the attack vector increased, but a system is also easier to break into. IoT devices may be the most vulnerable points of a system targeted by malicious actors for exploitation. Some experts note that IoT security currently lacks critical elements such as end-to-end security solutions, common security standards across the IoT industry, and customers' willingness to pay additional cost for enhanced security. Congressional Considerations for Technological Convergence With relatively few policies in place for specifically overseeing technological convergence, Congress may consider potential policy options to address the issues discussed in this report. The fundamental policy considerations to identifying options may be determining the role, if any, of the federal government in overseeing technological convergence, digital privacy, and data security. Regulatory Considerations Regulating technological convergence may entail policies for jurisdictional deconfliction, harmonization, and expansion to address blended or new categories of technology. Currently, aspects of converged technologies may be regulated by different agencies based on the individual technologies that compose the convergence, but not as a whole. Regulating a converged technology as a whole can also be challenging because the combinations of technologies may generate too many possible outcomes. When converged technologies establish a new domain and fall outside of existing regulatory jurisdictions, they are often left to self-regulate. Congress and the Administration could take a number of approaches in regulating technological convergence. Three potential approaches are discussed here. First, the federal government could continue to allow industry to self-regulate, especially where technology evolves quickly. This may promote innovative space, but relies on the industry to exercise responsible and accountable practices. Second, Congress and the Administration could maintain current regulatory jurisdiction but leverage a deconfliction or harmonization policy so that convergent technologies are regulated under one primary authority instead of potentially multiple authorities. Preserving existing regulatory jurisdiction may require minimal restructuring and allow relatively short timeline for implementation. While a deconfliction or harmonization policy could increase coordination, overlaying such policy on an existing regulatory framework may not present the most efficient process. Third, the Administration could consider expanding regulatory jurisdictions and authorities to include new and emerging convergent technologies that are self-regulated. This may require a complete overhaul of the technology regulatory framework, requiring congressional action and a relatively lengthy adaptation timeline for the affected industries. Some could also view such actions as extensive regulation that stifles innovation and commercial growth. On the other hand, this approach could present an opportunity to update policies on par with technology progressions and posture for emerging capabilities. Digital Privacy Considerations Federal data protection laws currently in place apply to specific types of data and have varied privacy and data security provisions. A federal law that comprehensively addresses digital privacy for all types of data is not in place. While illegal use of personal information (such as identity theft and fraud) is defined and enforced by federal agencies, legal use of data generated by users or converged technologies (such as social media and IoT) is not regulated to the same extent. Transparency into the activities of legal data brokers and collectors is limited. Congress may choose to define the role of the federal government overseeing digital privacy by introducing new comprehensive federal law(s) and/or by determining minimal required standards of digital privacy. An alternative option could be expanding existing digital privacy authorities. This could include deciding whether federal entities, such as the FTC, should have their rulemaking abilities clarified or expanded. An expanded or new federal digital privacy policy may require a variety of decisions by Congress. Two of many potential decisions pertaining to federal digital privacy policy are determining how data privacy and data security could be addressed legislatively and determining whether various types, or categories, of personal data should be treated equally or differently under varied guidance. Data Security Considerations Data security, as it pertains to technological convergence, may impact both the cyber and physical fronts. Some of the federal data protection laws currently in place have data security provisions, though they vary and may be focused predominantly on the cyber-aspect. This also means that different data security protocols apply to different types of data. For instance, the guidance for notifying users when personal data gets compromised is different for health, financial, and location data. Similar to the digital privacy considerations, Congress could begin by determining whether overarching legislation for data security is necessary. Congress may consider new legislation explicitly addressing data security concerns pertaining to technological convergence. Or, Congress may consider new legislation to expand existing cybersecurity missions to address data security issues. Data security is often considered as a component of cybersecurity, but protection of the data is equally important as safeguarding a network or a system. As with any security challenge, finding the right balance between convenience and security measures is a key component of an effective security policy. A data security policy that predominantly focuses on security measures to address potential vulnerabilities created by converged technologies could negate convenient features and beneficial capabilities, such as ubiquitous access, offered by the converged technologies. On the other hand, allowing maximum accessibility without a security measure exposes both the data and the system to risks. Not having an updated data security policy relies on existing cybersecurity measures to address potential vulnerabilities introduced by technological convergence. Congress may determine whether data privacy and data security should be addressed in one policy. Data privacy and data security are linked and complementary, especially for digital information. While two coupled topics could be addressed in a single policy, data privacy and data security are two distinct issues. Having separate complementary policies could potentially focus more clearly on specific aspects of each issue.	Summary:	gov_report	1,024	null	75
crs_R46146	crs_R46146_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Election security is one of the most prominent policy challenges facing Congress. A November 2019 warning from the heads of several federal agencies illustrates the interdisciplinary and ongoing nature of the threat to American elections. According to the joint statement, in the 2020 election cycle, "Russia, China, Iran, and other foreign malicious actors all will seek to interfere in the voting process or influence voter perceptions. Adversaries may try to accomplish their goals through a variety of means, including social media campaigns, directing disinformation operations or conducting disruptive or destructive cyber-attacks on state and local infrastructure." These are just the latest challenges in securing American elections. Traditionally, election administration emphasizes policy goals such as ensuring that all eligible voters, and only eligible voters, may register and cast ballots; that those ballots are counted properly; and that the voting public views that process as legitimate and transparent. Preserving election continuity is a chief concern. Election officials therefore have long prepared contingency plans that address various risks, such as equipment malfunctions, power outages, and natural disasters. These traditional concerns remain, but have taken on new complexity amid foreign interference in U.S. elections. In addition to managing traditional security concerns about infrastructure and administrative processes (e.g., counting ballots), mitigating external threats to the accuracy of information voters receive, particularly from foreign sources, is a potential challenge for political campaigns, election administrators, and the public. Addressing any one of these topics might involve multiple areas of public policy or law. Doing so also can involve complex practical challenges about which levels of government, or agencies, are best equipped or most appropriate to respond. How those entities can or should interact with political campaigns, the private sector, and voters, are also ongoing questions. Technical complexity in some areas, such as cybersecurity, and the federal structure of shared national, state or territorial, and local responsibility for administering federal elections make election security even more challenging. Election security in general appears to be a shared policy goal, but debate exists in Congress about which policy issues and options to pursue. Debate over the scope of the federal government's role in election security shapes much of that debate. State, territorial, and local governments are responsible for most aspects of election administration, including security. This report provides congressional readers with an overview that includes how campaign and election security has developed as a policy field; recent legislative activity, especially bills that have advanced beyond introduction; federal statutes and agencies that appear to be most relevant for campaign and election security; state, territorial, or local roles in administering elections, and federal support for those functions; and highlights of recent policy debates, and potential future questions for congressional consideration. Defining Election Security There is no single definition of "election security," nor is there necessarily agreement on which topics should or should not be included in the policy debate. Broadly speaking, election security involves efforts to ensure fair, accurate, and safe elections. This can include a variety of activities that happen before, during, and after voters cast their ballots. A narrow definition of election security might address only efforts to protect traditional election infrastructure, such as voter registration databases, voting machines, polling places, and election result tabulations. More expansive definitions might also address issues affecting candidates and campaigns. This includes, for example, regulating political advertising or fundraising; providing physical or cybersecurity assistance for campaigns; or combating disinformation or misinformation in the political debate. The policy debates discussed herein can affect different kinds of entities uniquely. Perhaps most notably, security concerns affecting campaigns can differ from those for safeguarding elections and voting. Campaigns in the United States are about persuading voters in an effort to win elections. They are private, not governmental, operations and are subject to relatively little regulation beyond campaign finance policy. Elections are more highly regulated, although specific practices can vary, as their administration is primarily a state- or local-level responsibility. Provisions in state or local law, and, to a lesser degree, federal law, regulate how voters cast ballots and who may do so. Some security discussions include issues related to voter access, while others view access as a separate elections policy matter. This report briefly notes that access can be a component of campaign and election security policy debates, but the report does not otherwise address access issues. This report does not attempt definitively to resolve ongoing policy debates about what campaign and election security entails or should entail, nor does it fully address all aspects of the policy issues discussed. Instead, it provides congressional readers with background information to consider that debate and decide whether or how to pursue legislation (including appropriations) or oversight. Because all the topics noted aboveâand others discussed throughout the reportâhave been components of the recent congressional debate over how to safeguard American campaigns, elections, and voting, this report uses the general term campaign and election security . Scope of the Report This report discusses federal agencies, statutes, and policies designed to prevent or respond to deliberate domestic or foreign security threats to campaigns, elections, or voting. Concepts discussed in the report also have implications for some unintentional threats, such as natural disasters or other emergencies that could affect campaigns, elections, or voting. Legislation cited in the report contains specific references to campaign and election security. This includes bill text that uses variations of terms such as campaign , election , or vote near variations of the terms interference or security . Some readers might view areas addressed herein as more or less directly related to campaign or election security, and alternative methodologies could yield other bills or policy topics for consideration. The report does not include detailed attention to more traditional aspects of campaign finance, election administration, or voting, particularly voter mobilization. For example, the report discusses Help America Vote Act provisions that authorize funding states may use to help secure elections, but not provisions that authorize funding for the Election Assistance Commission generally. Similarly, the report briefly discusses Voting Rights Act provisions that prohibit voter intimidation, but it does not discuss other federal statutes enacted to make registration and voting easier. In addition, the report briefly notes lobbying statutes that might be relevant for regulating certain corporate or foreign activity related to U.S. election interference, but it does not substantially address lobbying as a policy area. The report emphasizes domestic implications of campaign and election security. This includes attention to protections for U.S. campaigns and elections from the effects of foreign disinformation and misinformation efforts. The Appendix at the end of this report includes sanctions or immigration legislation that specifically references interference in U.S. elections, and which has advanced beyond introduction during the 116 th Congress. However, foreign policy implications of such interference, or a discussion of offensive operations and tactics that the United States might or might not use against foreign adversaries, are otherwise beyond the scope of this report. Because of the still-developing and complex policy challenges surrounding campaign and election security, other areas of law, policy, or practice might also be relevant but are not addressed here. The report references other CRS products that contain additional discussion of several such topics. The report does not provide legal or constitutional analysis. It also does not attempt to catalog all alleged or established instances of campaign and election interference or security concerns, or to independently evaluate allegations. Recent Legislative Activity Highlights of recent legislative activity include the following. Additional discussion appears throughout the report. The 115 th Congress (2017-2019) appropriated $380 million for FY2018 for improvements to the administration of federal elections, including upgrades to election technology and security. The 116 th Congress (2019-2021) appropriated $425 million for FY2020 in the consolidated appropriations bill ( H.R. 1158 ; P.L. 116-93 ) enacted in December 2019. The " Funding for States After the 2016 Election Cycle " section of this report contains additional detail. The 116 th Congress enacted S. 1790 ( P.L. 116-92 ), the FY2020 National Defense Authorization Act (NDAA), in December 2019. The legislation contains several provisions related to campaign and election security. Table 1 below lists bills that have passed at least one chamber. The Appendix in this report briefly summarizes 116 th Congress legislation containing campaign and election security provisions that has advanced beyond introduction. In addition, during the 116 th Congress, committees in both chambers have held hearings on these and related campaign and election security topics. The Committee on House Administration and Senate Committee on Rules and Administration exercise primary jurisdiction over federal elections. Several other committees oversee related areas, such as intelligence or voting rights issues. Another CRS product contains additional discussion of committee roles in federal campaigns and elections generally. Development of Federal Role in Campaign and Election Security Foreign interference is only the highest-profile and latest campaign and election security policy challenge. Physical security, to protect voters, ballots, and vote counts, has been an ongoing concern. Specifically, in modern history, the federal government's first role in securing elections was primarily about access and voting rights. In 1965, Congress enacted the Voting Rights Act (VRA), which protects voters against race- or color-based discrimination in registration, redistricting, and voting. More explicitly related to security, the VRA prohibits intimidation, threats, or coercion in voting. Congress primarily tasked the U.S. Department of Justice (DOJ) with enforcing the statute and related criminal provisions. Federal law enforcement agencies, especially the Federal Bureau of Investigation (FBI), also support states and localitiesâwhich retain primary responsibility for election administration in the United Statesâin investigating election crimes and providing physical security at the polls. The federal role in election administration expanded after the disputed 2000 presidential election. In response, Congress authorized federal funding for the states, the District of Columbia, and territories to make improvements to the administration of federal elections. It also created the Election Assistance Commission (EAC) to administer those funds. Congress charged the agency with overseeing a voluntary voting system testing and certification program, and providing states and localities with voluntary election administration guidance, research, and best practices. These developments notwithstanding, securing campaigns and elections historically was not a major policy topic at the federal level, as most security matters were reserved for state- or local-level policy. The policy environment changed dramatically during the 2016 election cycle, when media reports and subsequent congressional and federal-agency investigations documented Russian government interference with that year's U.S. presidential election. According to Special Counsel Robert Mueller's report, these interference efforts targeted private technology firms that provide election-related software and hardware; state and local government entities; and a major political party and nominee. The investigations did not find that this activity was a determinative factor in the election outcome. However, the possibility of such activity, and of additional efforts to affect political attitudes or participation, remains. In July 2018 remarks at the Hudson Institute, then-Director of National Intelligence (DNI) Dan Coats, a former Senator, said that the Intelligence Community (IC) reported "aggressive attempts to manipulate social media and to spread propaganda focused on hot-button issues that are intended to exacerbate socio-political divisions" in elections. To the extent that those efforts affect campaignsâincluding campaign security, or the information voters receive from campaignsâcampaign finance policy and law could be relevant. The Federal Election Campaign Act (FECA) originated in the 1970s amid concerns about limiting domestic political corruption. The act also contains a wide-ranging prohibition on foreign-national involvement in federal, state, or local U.S. elections. These provisions, and disclosure and disclaimer requirements for all "persons" who raise or spend funds to influence federal elections, are key elements of regulating both domestic and foreign efforts to affect political fundraising, spending, and advertising. Political committees (campaigns, parties, and political action committees [PACs]) are responsible for their own security measures, although, as noted elsewhere in this report, federal agencies (or private-sector entities) provide assistance in some cases. Today, election security is one of the most rapidly evolving policy issues facing Congress and the federal government. Both chambers have passed legislation on the topic during the 116 th Congress. Multiple House and Senate committees have held investigative and oversight hearings. Congress and the Obama and Trump Administrations have tasked federal agencies with new responsibilities for supporting states and thwarting future possible interference. The Intelligence Community has warned that countering foreign interference in U.S. elections "will require a whole-of-society approach, including support from the private sector and the active engagement of an informed public." Selected Federal Statutes The U.S. Constitution and federal statutes regulate the division of governmental responsibility for elections. No existing statute is devoted specifically to election security, although, as discussed below, some statutes address aspects of the topic. Most broadly, the Constitution's Elections Clause assigns states with setting the "Times, Places and Manner" for House and Senate elections, and also permits Congress to "at any time â¦ make or alter such Regulations." As discussed in the " State and Local Role in Election Security " section of this report, the federal government thus plays a largely supporting role in election administration generally, and in election security specifically. Two election-specific statutes can be particularly important for campaign and election security. Relevant legislation typically proposes amending one or both. First, the Help America Vote Act (HAVA, 2002) is the only federal statute devoted to assisting states with election administration. Congress relied on HAVA to establish the Election Assistance Commission, provide for a voluntary federal voting system testing and certification program, and authorize federal funding states could use to help secure their elections. Second, FECA's disclaimer and disclosure provisions, and the prohibition on foreign national fundraising or spending in U.S. elections, can be particularly relevant for concerns about foreign interference in U.S. elections. Several other statutes could be relevant in specific cases. Table 2 below provides a brief summary. Selected Federal Agencies No single federal agency has responsibility for providing election or campaign security. Only two federal agenciesâthe Election Assistance Commission (EAC) and the Federal Election Commission (FEC)âare devoted entirely to campaigns and elections. The EAC administers congressionally appropriated federal funding, oversees a voluntary voting system testing and certification program, and provides voluntary election administration guidance, research, and best practices. The FEC is responsible for administration and civil enforcement of FECA. Other departments and agencies, primarily with responsibilities for other areas of public policy, support campaign and election security in specific cases. Some agency roles developed from a January 2017 "critical infrastructure" designation. Additional detail appears below. Additional information about agency roles appears below, and in the " Coordination By and Among Selected Federal Agencies " section of this report. Election Assistance Commission (EAC) The EAC is the only federal agency focused specifically on assisting states with election administration. Congress has charged the EAC with administering funding states may use to help secure their elections. The EAC also provides states and localities with election administration assistance, adopting voluntary voting system guidelines (VVSG, discussed below), providing for systems to be tested to the VVSG, and certifying systems as meeting the guidelines. It also conducts research about state election administration and voting, and shares information about best practices. Although not mandated by Congress, the EAC also participates in activities related to the designation of election systems as critical infrastructure, such as serving on the Election Infrastructure Subsector Government Coordinating Council (EIS-GCC) and on the EIS-GCC executive committee. Federal Election Commission (FEC) The FEC enforces civil compliance with FECA provisions and commission regulations regarding campaign finance. This includes activities related to fundraising, spending, advertising disclaimers, and financial disclosure reports. These provisions are relevant for some aspects of security affecting political candidates or campaigns, parties, political action committees (PACs), or other entities (e.g., independent spenders that are not political committees) that raise or spend funds to affect federal campaigns. The FEC does not regulate election administration or voting matters. Department of Homeland Security (DHS) DHS provides states and localities with assistance mitigating risks to their election systems, especially concerning cybersecurity. DHS is the sector-specific agency (SSA) responsible for securing the election infrastructure subsector. Additional information appears later in this report. DHS's Cybersecurity and Infrastructure Security Agency (CISA) is responsible for most of the department's election security activities, including the Election Security Initiative (ESI). DHS protects major presidential candidates through the U.S. Secret Service (USSS). The Secret Service is also the lead security agency for "national special security events" (NSSEs), such as presidential nominating conventions. Department of Justice (DOJ) The Department of Justice enforces several federal statutes, discussed above, that could be relevant for campaign and election security. Within DOJ, the FBI is the lead federal law enforcement agency supporting state and local election administration, and is the lead federal agency in investigating and prosecuting foreign influence campaigns. Intelligence Community (IC) Several agencies contribute to or produce intelligence about election security threats. For example, a declassified version of a January 2017 Intelligence Community Assessment (ICA) documenting Russian attempts to influence 2016-cycle U.S. elections contained information and analysis from the CIA, FBI, and NSA. The " Coordination By and Among Selected Federal Agencies " section below provides additional discussion of the IC campaign and election security roles. Selected Other Federal Agencies The State Department's Global Engagement Center (GEC) is charged with coordinating federal efforts to counter foreign propaganda and disinformation efforts aimed at undermining U.S. national security interests. The GEC partners with other U.S. government agencies, including those within the State Department, at the Defense Department, and elsewhere. The Departments of Justice, State, and the Treasury all can be involved in administering sanctions for election interference. As noted previously, sanctions policy generally is beyond the scope of this report. Via the FY2020 NDAA bill ( S. 1790 ; P.L. 116-92 ), Congress assigned various agencies, especially DHS and the DNI, additional campaign and election security responsibilities. Most provisions involve providing Congress or federal or state agencies with information about election interference. The Appendix of this report provides additional detail. Table 3 provides a brief overview of selected agency roles in campaign and election security. Coordination By and Among Selected Federal Agencies Because no single federal agency is solely responsible for campaign and election securityâand because state and local governments have most practical responsibility for election securityâcoordination among agencies and governments is an ongoing congressional concern. Adding to the complexity of the election security challenge, government agencies, in some cases, both support and regulate private actorsâsuch as political campaignsâand sometimes rely on those private entities to provide threat information. Highlights of federal coordination issues appear below. Because some of these relationships appear to be in development, some information about agency coordination, or the lack thereof, remains unclear in the public record. Similarly, some information about coordination among intelligence-gathering agencies is publicly unavailable, beyond the scope of this report, or both. As such, other formal or information coordination among or by agencies likely occurs but is not reflected here. Department of Homeland Security Coordination Roles DHS takes a lead role in coordinating the federal support for campaign and election security. Most of the DHS coordination role stems from a January 2017 "critical infrastructure" designation that treats election infrastructure as an essential service requiring federal support and protection. The designation established the Elections Infrastructure Subsector (EIS) within the Government Facilities Sector, which includes various government buildings and equipment. As a result of the critical infrastructure designation, DHS prioritizes support for the subsector, including to those state and local election jurisdictions that choose to accept such assistance. This includes sharing information about threats; and conducting cyber hygiene and risk and vulnerability assessments. The critical infrastructure designation applies to physical and technical resources related to elections, such as communications technology, voting equipment, and polling places. It does not apply to political campaigns. The designation does not give DHS regulatory authority over federal elections. DHS serves as the Sector-Specific Agency (SSA) for the EIS. As SSA, the agency plays various coordinating roles among public and private entities, as highlighted below. As SSA, DHS coordinates information sharing among various governmental and nongovernmental entities (e.g., vendors) responsible for election administration. In this role, DHS also coordinates activities for the EIS Government Coordinating Council (GCC). The EIS-GCC includes representatives from DHS, EAC, and state and local governments. DHS also works with a Sector Coordinating Council (SCC), which consists of industry representatives (e.g., voting-machine manufacturers). DHS also funds the Elections Infrastructure Information Sharing and Analysis Center (EI-ISAC), a voluntary membership organization of state and local election jurisdictions run by the private Center for Internet Security. The EI-ISAC coordinates security information sharing among these entities. Election Assistance Commission Coordination Roles As the only federal agency devoted specifically to election administration, the EAC helps facilitate communication between state or local election administrators and other federal agencies, and vice versa. EAC commissioners serve on the EIS Government Coordinating Council (EIS-GCC), coordinated by DHS, and on the EIS-GCC executive committee. Intelligence Community Coordination Roles As noted previously, the IC includes more than a dozen agencies from throughout the federal government. Highlights of the IC role in coordination surrounding campaign and election security appear below. In July 2019, then-DNI Coats created an IC Election Threats Executive (ETE) position to serve as the DNI's principal elections adviser and to coordinate IC election security work. Coats also directed IC agencies to assign a senior executive to serve as the point-of-contact for that agency's election security work and to serve on a new IC Election Executive and Leadership Board. U.S. Cyber Command and the NSA monitors foreign threats to U.S. elections. This reportedly includes a recently established Election Security Group. In addition, the FY2020 NDAA bill requires the DNI to appoint a national counterintelligence officer within the National Counterintelligence and Security Center to coordinate election security counterintelligence, particularly regarding foreign interference and equipment issues. Coordination Roles and Selected Other Federal Agencies In addition to coordination on IC threat assessments noted above, multiple federal agencies have collaborated on campaign and election security educational resources for political committees, election administrators, or voters. Agencies also have issued joint warnings. The State Department's Global Engagement Center (GEC) is charged with coordinating federal efforts to counter foreign propaganda and disinformation. The State Department also works with the Treasury Department and Justice Department to administer sanctions for election interference. The FY2020 NDAA and Coordination Roles The FY2020 NDAA bill ( S. 1790 ; P.L. 116-92 ), enacted in December 2019, requires the DNI to "develop a whole-of-government strategy for countering the threat of Russian cyberattacks and attempted cyberattacks against election systems and processes in the United States." Congress specified that the strategy should include protecting federal, state, and local election systems, voter registration databases, voting tabulation equipment, and systems for transmitting election results. Congress also required the DNI to develop the strategy "in coordination" with the Secretaries of Defense, Homeland Security, State, and the Treasury, and with the Directors of the CIA and FBI. Federal Agency Roles and Campaign Security Perhaps because the 2017 critical infrastructure designation does not apply to political campaigns or other political committees, it appears that no federal agency has specific responsibility for coordinating security preparations for these entities. However, federal law enforcement agencies, particularly the FBI, can and do receive reports of, and investigate, suspected criminal activity. In preparation for the 2020 elections, the FBI also established a "Protected Voices" program that provides political campaigns, private companies, and individuals with information about how to guard against and respond to cyberattacks and foreign influence campaigns. In addition, DHS (CISA), the FBI, and ODNI have jointly briefed some 2020 federal political campaigns on security threats and best practices. Federal Election Security Guidance Federal election law takes a mostly voluntary approach to election security. Congress has set some security requirements for federal elections, such as directing election officials to provide a certain level of technological security for their HAVA-mandated computerized voter registration lists. Most election security standards are set at the state or local levels. Some examples of the voluntary election security guidance the federal government provides are the research, best practices, and technical assistance described in the " Selected Federal Agencies " section of this report. HAVA also charges the EACâwith assistance from the agency's advisory bodies and NISTâwith developing voluntary voting system guidelines (VVSG), accrediting laboratories to test voting systems to the VVSG, and certifying systems as meeting the VVSG. The proposed update to the VVSG that was in development as of this writing (VVSG 2.0) includes some security-related principles and guidelines, such as ensuring that voting systems are auditable, limiting and logging access to voting systems, and preventing or detecting unauthorized physical access to voting system hardware. Participation in the federal voting system testing and certification program is voluntary under federal law. The testing and certification program covers the "voting system" as defined by HAVA, which does not include some components of the election system, such as voter registration databases and election night reporting systems. Changes to one part of a voting system, such as updating software to patch security vulnerabilities, might require recertification of the system under the policies in effect as of this writing, and updates to the VVSG require approval by a three-vote majority of the EAC's commissioners. Federal Funding for Securing Election Systems Congress has responded to the threats that emerged during the 2016 election cycle, discussed above, in part with funding. Since the 2016 elections, it has provided funding for helping secure election systems both to states, territories, and the District of Columbia (DC), and to federal agencies. Funding for States After the 2016 Election Cycle The Consolidated Appropriations Act, 2020 ( H.R. 1158 ; P.L. 116-93 ), and the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), included $425 million and $380 million, respectively, for payments under provisions of HAVA that authorize funding for general improvements to the administration of federal elections. The explanatory statements accompanying the bills listed the following election security-specific purposes as potential uses of the funds: replacing voting equipment that only records a voter's intent electronically with equipment that utilizes a voter-verified paper record; implementing a post-election audit system that provides a high level of confidence in the accuracy of the final vote tally; upgrading election-related computer systems to address cyber vulnerabilities identified through DHS or similar scans or assessments of existing election systems; facilitating cybersecurity training for the state chief election official's office and local election officials; implementing established cybersecurity best practices for election systems; and funding other activities that will improve the security of elections for federal office. The 50 states, DC, American Samoa, Guam, Puerto Rico, and the U.S. Virgin Islands were eligible for both FY2018 and FY2020 payments. The Commonwealth of the Northern Mariana Islands (CNMI) was eligible for FY2020 funding. Each recipient was guaranteed a minimum payment amount each year it was eligibleâ$3 million for each of the 50 states and DC and $600,000 per eligible territoryâwith the remainder of the appropriated funding distributed according to a formula based on voting-age population. Recipients are required to provide a 5% match for the FY2018 funds within two years of receiving a federal payment and a 20% match for the FY2020 funding. The EAC, which was charged with administering the payments, reported that all of the FY2018 funds were requested by July 16, 2018, and disbursed to the states by September 20, 2018. Each state has five years to spend the funds, according to the EAC, and must report on its spending each fiscal year. The EAC posts links to the states' reportsâand spending plansâon its website and issues its own overview reports of state spending. Funding for Federal Agencies After the 2016 Election Cycle As noted in the " Selected Federal Agencies " section of this report, multiple federal agencies are involved in helping secure election systems. Congress has designated some of the funding it has appropriated to such agencies specifically for election system security. For example, following the designation of election systems as critical infrastructure in January 2017, the report language for DHS appropriations measures has specified funding for the department's election security initiative. The explanatory statement for the FY2018 spending bill also directed the FBI to use some of its funding to help counter threats to democratic institutions and processes. Agencies may also spend some of the funding they receive for more general purposes on activities related to election system security. The U.S. Department of Defense's (DOD's) Defense Advanced Research Projects Agency (DARPA) has provided funding under its System Security Integrated Through Hardware and Firmware (SSITH) program to advance development of a secure, open-source voting system, for example, and the EAC applies some of its operational funding to the federal voting system testing and certification program described in the " Federal Election Security Guidance " section of this report. State and Local Role in Election Security Some threats to U.S. electionsâincluding both intentional interference efforts and the unintended threats posed by errors and natural disastersâinvolve the state and local systems used to administer elections. Other election security threats involve efforts to spread disinformation about elections or the integrity of the electoral process. States and localities may play a role in countering both types of threat. First, states and localities take the lead on defending their election systems. As noted previously, states and localities have primary responsibility for administering elections in the United States. The federal government has provided some funding and technical support to help them secure the systems they use to run elections, but states and localities have primary responsibility for ensuring that their systems are physically and technologically secure. That includes primary responsibility for funding election system security measures. Securing election systems may involve capital expenditures, such as replacing voting machines, that exceed funding provided by Congress. It may also involve ongoing costsâfrom identifying and addressing emerging security threats to renewing software licenses, paying election security staff, and conducting post-election auditsâthat extend beyond the period for which federal funding is available. Such expenses are covered, if they are covered, by states and localities. State and local responsibility for election system security also includes primary responsibility for making and implementing most decisions about how to secure election systems. Federal law sets some general standards for the administration of elections, such as the voter registration list digitization requirement noted in the " Federal Election Security Guidance " section of this report. States and localities decideâwithin the broad parameters set by such general standardsâwhich election equipment and procedures to use and how to mitigate risks to them. They choose, for example, whether to use electronic devices to capture or count votes; whether, when, and how to conduct post-election audits; whether and how to set security standards for election equipment vendors; whether to have in-house security staff in local jurisdictions or rely on state or vendor IT support; which cybersecurity tools and procedures to use; whether and how to train election officials and poll workers on election security; how to secure election materials between elections and ensure a secure physical chain of custody on Election Day; and what cyber and physical security standards to set for election equipment. Second, states and localities can help combat disinformation or misinformation about elections or the integrity of the electoral process. They can, for example, use official websites and social media accounts to share accurate information about elections or counter false information; and help educate the public about the steps they take to safeguard the electoral process. States also can work through their professional associationsâusing initiatives such as a public education campaign launched by the National Association of Secretaries of State (NASS) in November 2019âto help direct voters to trustworthy sources of election information. These efforts might occur as part of or in parallel with responses to disinformation or misinformation by the federal government or private entities like social media companies. States might partner with social media companies to remove posts containing election disinformation, for example, or adopt disclosure requirements that supplement or override the companies' policies on digital political advertising. Selected Recent Policy Issues for Congress Table 4 below briefly summarizes selected policy issues and options that have shaped recent policy debates in Congress. In addition, the Appendix at the end of this report briefly summarizes legislation primarily devoted to campaign and election security that has advanced beyond introduction during the 116 th Congress. The table reflects recent policy debates, but is not intended to be exhaustive. Some observers might consider other issues not reflected here to be relevant for campaign and election security. Concluding Observations Campaign and election security are developing fields that cross policy and disciplinary boundaries. This complexity is reflected in the various statutes, agencies, and congressional committees that share responsibility for policymaking and administrative matters relevant for security U.S. campaigns and elections. Questions such as those that follow reflect themes discussed throughout this report. These and other questions could help congressional readers decide whether they want to maintain the status quo, appropriate funds, or pursue oversight or legislation. Federal R ole. A key question for Congress is whether, where, and how it chooses to be involved in campaign and election security. Most broadly, this potentially includes how to define this rapidly developing policy area, and in so doing, considering which issues are most appropriately addressed at the federal level versus at the state or local levels. This report has emphasized the federal role because those topics are most relevant for Congress. As the report also explains, states, localities, and territories are responsible for making many of their own election security decisionsâjust as political campaigns, parties, and PACs are responsible for their own security. Therefore, there are important debates about what campaign and election security includes that the federal government can influence, but that are primarily addressed below the federal level, in the private sector, or both. Examples include, but are not limited to, how election security might affect voter access, and vice versa; whether states require voter identification at the polls and whether or to what extent alleged vote fraud exists; how much and on what jurisdictions choose to spend available funds; and whether states, localities, or political campaigns and parties have sufficient resources to secure their elections or organizations. Communication. Does Congress want to encourage or require additional information sharing about campaign and election security matters between the federal government and nonfederal elections agencies? Similarly, do state, territorial, and local elections officials feel that they have or need clear points of contact within federal agencies, and do they know which agencies to contact in various circumstances? If it determines that the status quo is inadequate, does Congress want to encourage or require different reporting protocols, agency outreach, etc.? Coordination. Various agencies have reported to Congress that they have improved coordination among themselves, particularly through working groups or task forces. Less clear, at least from publicly available information, is specifically how such coordination works and whether current coordinating mechanisms are sufficient or whether agencies need additional resources or mechanisms to improve coordination. If it determines that the status quo is inadequate, does Congress want to exercise oversight in this area, provide additional information-sharing authorities, funding, etc., or does it consider current coordination authorities and mechanisms sufficient? Sectors. Much of the federal government's attention to campaign and election security appears to emphasize outreach to election administrators in states, territories, and localities. With respect to the private sector (such as political campaigns and equipment manufacturers), is federal agency support sufficient? To what extent are information-sharing practices among federal agencies and the private sector (or voters) similar to or different from those that shape communication between federal agencies and state, territorial, or local governments? If it determines that the status quo is inadequate, does Congress want to encourage or require additional federal agency support for nongovernmental entities in campaign and election security, or reporting requirements for those entities to the federal government? Voters. Some federal public education campaigns, such as those to counter disinformation in elections, are aimed at individual voters. Overall, however, much of the federal role in campaign and election security emphasizes communication among government agencies or, in some cases, the private sector. If it determines that the status quo is inadequate, does Congress want to task federal agenciesâand if so, which onesâwith additional responsibility for educating voters about campaign and election security; to provide funding for nongovernmental organizations to do so, etc.? The scope of potential campaign and election security threats, and the federal government's role in responding to those threats, has changed substantially in less than five years. The foreign interference revealed during the 2016 cycleâand widely reported to be an ongoing threatâhas renewed congressional attention to campaign and election security and raised new questions. Whatever Congress determines about whether these or other questions are relevant for its consideration of campaign and election security policy, the issue is likely to remain prominent for the foreseeable future. Appendix. Legislation Related to Campaign and Election Security That Has Advanced Beyond Introduction, 116th Congress Summary:	null	96	43,830	43,832	43,832	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Election security is one of the most prominent policy challenges facing Congress. A November 2019 warning from the heads of several federal agencies illustrates the interdisciplinary and ongoing nature of the threat to American elections. According to the joint statement, in the 2020 election cycle, "Russia, China, Iran, and other foreign malicious actors all will seek to interfere in the voting process or influence voter perceptions. Adversaries may try to accomplish their goals through a variety of means, including social media campaigns, directing disinformation operations or conducting disruptive or destructive cyber-attacks on state and local infrastructure." These are just the latest challenges in securing American elections. Traditionally, election administration emphasizes policy goals such as ensuring that all eligible voters, and only eligible voters, may register and cast ballots; that those ballots are counted properly; and that the voting public views that process as legitimate and transparent. Preserving election continuity is a chief concern. Election officials therefore have long prepared contingency plans that address various risks, such as equipment malfunctions, power outages, and natural disasters. These traditional concerns remain, but have taken on new complexity amid foreign interference in U.S. elections. In addition to managing traditional security concerns about infrastructure and administrative processes (e.g., counting ballots), mitigating external threats to the accuracy of information voters receive, particularly from foreign sources, is a potential challenge for political campaigns, election administrators, and the public. Addressing any one of these topics might involve multiple areas of public policy or law. Doing so also can involve complex practical challenges about which levels of government, or agencies, are best equipped or most appropriate to respond. How those entities can or should interact with political campaigns, the private sector, and voters, are also ongoing questions. Technical complexity in some areas, such as cybersecurity, and the federal structure of shared national, state or territorial, and local responsibility for administering federal elections make election security even more challenging. Election security in general appears to be a shared policy goal, but debate exists in Congress about which policy issues and options to pursue. Debate over the scope of the federal government's role in election security shapes much of that debate. State, territorial, and local governments are responsible for most aspects of election administration, including security. This report provides congressional readers with an overview that includes how campaign and election security has developed as a policy field; recent legislative activity, especially bills that have advanced beyond introduction; federal statutes and agencies that appear to be most relevant for campaign and election security; state, territorial, or local roles in administering elections, and federal support for those functions; and highlights of recent policy debates, and potential future questions for congressional consideration. Defining Election Security There is no single definition of "election security," nor is there necessarily agreement on which topics should or should not be included in the policy debate. Broadly speaking, election security involves efforts to ensure fair, accurate, and safe elections. This can include a variety of activities that happen before, during, and after voters cast their ballots. A narrow definition of election security might address only efforts to protect traditional election infrastructure, such as voter registration databases, voting machines, polling places, and election result tabulations. More expansive definitions might also address issues affecting candidates and campaigns. This includes, for example, regulating political advertising or fundraising; providing physical or cybersecurity assistance for campaigns; or combating disinformation or misinformation in the political debate. The policy debates discussed herein can affect different kinds of entities uniquely. Perhaps most notably, security concerns affecting campaigns can differ from those for safeguarding elections and voting. Campaigns in the United States are about persuading voters in an effort to win elections. They are private, not governmental, operations and are subject to relatively little regulation beyond campaign finance policy. Elections are more highly regulated, although specific practices can vary, as their administration is primarily a state- or local-level responsibility. Provisions in state or local law, and, to a lesser degree, federal law, regulate how voters cast ballots and who may do so. Some security discussions include issues related to voter access, while others view access as a separate elections policy matter. This report briefly notes that access can be a component of campaign and election security policy debates, but the report does not otherwise address access issues. This report does not attempt definitively to resolve ongoing policy debates about what campaign and election security entails or should entail, nor does it fully address all aspects of the policy issues discussed. Instead, it provides congressional readers with background information to consider that debate and decide whether or how to pursue legislation (including appropriations) or oversight. Because all the topics noted aboveâand others discussed throughout the reportâhave been components of the recent congressional debate over how to safeguard American campaigns, elections, and voting, this report uses the general term campaign and election security . Scope of the Report This report discusses federal agencies, statutes, and policies designed to prevent or respond to deliberate domestic or foreign security threats to campaigns, elections, or voting. Concepts discussed in the report also have implications for some unintentional threats, such as natural disasters or other emergencies that could affect campaigns, elections, or voting. Legislation cited in the report contains specific references to campaign and election security. This includes bill text that uses variations of terms such as campaign , election , or vote near variations of the terms interference or security . Some readers might view areas addressed herein as more or less directly related to campaign or election security, and alternative methodologies could yield other bills or policy topics for consideration. The report does not include detailed attention to more traditional aspects of campaign finance, election administration, or voting, particularly voter mobilization. For example, the report discusses Help America Vote Act provisions that authorize funding states may use to help secure elections, but not provisions that authorize funding for the Election Assistance Commission generally. Similarly, the report briefly discusses Voting Rights Act provisions that prohibit voter intimidation, but it does not discuss other federal statutes enacted to make registration and voting easier. In addition, the report briefly notes lobbying statutes that might be relevant for regulating certain corporate or foreign activity related to U.S. election interference, but it does not substantially address lobbying as a policy area. The report emphasizes domestic implications of campaign and election security. This includes attention to protections for U.S. campaigns and elections from the effects of foreign disinformation and misinformation efforts. The Appendix at the end of this report includes sanctions or immigration legislation that specifically references interference in U.S. elections, and which has advanced beyond introduction during the 116 th Congress. However, foreign policy implications of such interference, or a discussion of offensive operations and tactics that the United States might or might not use against foreign adversaries, are otherwise beyond the scope of this report. Because of the still-developing and complex policy challenges surrounding campaign and election security, other areas of law, policy, or practice might also be relevant but are not addressed here. The report references other CRS products that contain additional discussion of several such topics. The report does not provide legal or constitutional analysis. It also does not attempt to catalog all alleged or established instances of campaign and election interference or security concerns, or to independently evaluate allegations. Recent Legislative Activity Highlights of recent legislative activity include the following. Additional discussion appears throughout the report. The 115 th Congress (2017-2019) appropriated $380 million for FY2018 for improvements to the administration of federal elections, including upgrades to election technology and security. The 116 th Congress (2019-2021) appropriated $425 million for FY2020 in the consolidated appropriations bill ( H.R. 1158 ; P.L. 116-93 ) enacted in December 2019. The " Funding for States After the 2016 Election Cycle " section of this report contains additional detail. The 116 th Congress enacted S. 1790 ( P.L. 116-92 ), the FY2020 National Defense Authorization Act (NDAA), in December 2019. The legislation contains several provisions related to campaign and election security. Table 1 below lists bills that have passed at least one chamber. The Appendix in this report briefly summarizes 116 th Congress legislation containing campaign and election security provisions that has advanced beyond introduction. In addition, during the 116 th Congress, committees in both chambers have held hearings on these and related campaign and election security topics. The Committee on House Administration and Senate Committee on Rules and Administration exercise primary jurisdiction over federal elections. Several other committees oversee related areas, such as intelligence or voting rights issues. Another CRS product contains additional discussion of committee roles in federal campaigns and elections generally. Development of Federal Role in Campaign and Election Security Foreign interference is only the highest-profile and latest campaign and election security policy challenge. Physical security, to protect voters, ballots, and vote counts, has been an ongoing concern. Specifically, in modern history, the federal government's first role in securing elections was primarily about access and voting rights. In 1965, Congress enacted the Voting Rights Act (VRA), which protects voters against race- or color-based discrimination in registration, redistricting, and voting. More explicitly related to security, the VRA prohibits intimidation, threats, or coercion in voting. Congress primarily tasked the U.S. Department of Justice (DOJ) with enforcing the statute and related criminal provisions. Federal law enforcement agencies, especially the Federal Bureau of Investigation (FBI), also support states and localitiesâwhich retain primary responsibility for election administration in the United Statesâin investigating election crimes and providing physical security at the polls. The federal role in election administration expanded after the disputed 2000 presidential election. In response, Congress authorized federal funding for the states, the District of Columbia, and territories to make improvements to the administration of federal elections. It also created the Election Assistance Commission (EAC) to administer those funds. Congress charged the agency with overseeing a voluntary voting system testing and certification program, and providing states and localities with voluntary election administration guidance, research, and best practices. These developments notwithstanding, securing campaigns and elections historically was not a major policy topic at the federal level, as most security matters were reserved for state- or local-level policy. The policy environment changed dramatically during the 2016 election cycle, when media reports and subsequent congressional and federal-agency investigations documented Russian government interference with that year's U.S. presidential election. According to Special Counsel Robert Mueller's report, these interference efforts targeted private technology firms that provide election-related software and hardware; state and local government entities; and a major political party and nominee. The investigations did not find that this activity was a determinative factor in the election outcome. However, the possibility of such activity, and of additional efforts to affect political attitudes or participation, remains. In July 2018 remarks at the Hudson Institute, then-Director of National Intelligence (DNI) Dan Coats, a former Senator, said that the Intelligence Community (IC) reported "aggressive attempts to manipulate social media and to spread propaganda focused on hot-button issues that are intended to exacerbate socio-political divisions" in elections. To the extent that those efforts affect campaignsâincluding campaign security, or the information voters receive from campaignsâcampaign finance policy and law could be relevant. The Federal Election Campaign Act (FECA) originated in the 1970s amid concerns about limiting domestic political corruption. The act also contains a wide-ranging prohibition on foreign-national involvement in federal, state, or local U.S. elections. These provisions, and disclosure and disclaimer requirements for all "persons" who raise or spend funds to influence federal elections, are key elements of regulating both domestic and foreign efforts to affect political fundraising, spending, and advertising. Political committees (campaigns, parties, and political action committees [PACs]) are responsible for their own security measures, although, as noted elsewhere in this report, federal agencies (or private-sector entities) provide assistance in some cases. Today, election security is one of the most rapidly evolving policy issues facing Congress and the federal government. Both chambers have passed legislation on the topic during the 116 th Congress. Multiple House and Senate committees have held investigative and oversight hearings. Congress and the Obama and Trump Administrations have tasked federal agencies with new responsibilities for supporting states and thwarting future possible interference. The Intelligence Community has warned that countering foreign interference in U.S. elections "will require a whole-of-society approach, including support from the private sector and the active engagement of an informed public." Selected Federal Statutes The U.S. Constitution and federal statutes regulate the division of governmental responsibility for elections. No existing statute is devoted specifically to election security, although, as discussed below, some statutes address aspects of the topic. Most broadly, the Constitution's Elections Clause assigns states with setting the "Times, Places and Manner" for House and Senate elections, and also permits Congress to "at any time â¦ make or alter such Regulations." As discussed in the " State and Local Role in Election Security " section of this report, the federal government thus plays a largely supporting role in election administration generally, and in election security specifically. Two election-specific statutes can be particularly important for campaign and election security. Relevant legislation typically proposes amending one or both. First, the Help America Vote Act (HAVA, 2002) is the only federal statute devoted to assisting states with election administration. Congress relied on HAVA to establish the Election Assistance Commission, provide for a voluntary federal voting system testing and certification program, and authorize federal funding states could use to help secure their elections. Second, FECA's disclaimer and disclosure provisions, and the prohibition on foreign national fundraising or spending in U.S. elections, can be particularly relevant for concerns about foreign interference in U.S. elections. Several other statutes could be relevant in specific cases. Table 2 below provides a brief summary. Selected Federal Agencies No single federal agency has responsibility for providing election or campaign security. Only two federal agenciesâthe Election Assistance Commission (EAC) and the Federal Election Commission (FEC)âare devoted entirely to campaigns and elections. The EAC administers congressionally appropriated federal funding, oversees a voluntary voting system testing and certification program, and provides voluntary election administration guidance, research, and best practices. The FEC is responsible for administration and civil enforcement of FECA. Other departments and agencies, primarily with responsibilities for other areas of public policy, support campaign and election security in specific cases. Some agency roles developed from a January 2017 "critical infrastructure" designation. Additional detail appears below. Additional information about agency roles appears below, and in the " Coordination By and Among Selected Federal Agencies " section of this report. Election Assistance Commission (EAC) The EAC is the only federal agency focused specifically on assisting states with election administration. Congress has charged the EAC with administering funding states may use to help secure their elections. The EAC also provides states and localities with election administration assistance, adopting voluntary voting system guidelines (VVSG, discussed below), providing for systems to be tested to the VVSG, and certifying systems as meeting the guidelines. It also conducts research about state election administration and voting, and shares information about best practices. Although not mandated by Congress, the EAC also participates in activities related to the designation of election systems as critical infrastructure, such as serving on the Election Infrastructure Subsector Government Coordinating Council (EIS-GCC) and on the EIS-GCC executive committee. Federal Election Commission (FEC) The FEC enforces civil compliance with FECA provisions and commission regulations regarding campaign finance. This includes activities related to fundraising, spending, advertising disclaimers, and financial disclosure reports. These provisions are relevant for some aspects of security affecting political candidates or campaigns, parties, political action committees (PACs), or other entities (e.g., independent spenders that are not political committees) that raise or spend funds to affect federal campaigns. The FEC does not regulate election administration or voting matters. Department of Homeland Security (DHS) DHS provides states and localities with assistance mitigating risks to their election systems, especially concerning cybersecurity. DHS is the sector-specific agency (SSA) responsible for securing the election infrastructure subsector. Additional information appears later in this report. DHS's Cybersecurity and Infrastructure Security Agency (CISA) is responsible for most of the department's election security activities, including the Election Security Initiative (ESI). DHS protects major presidential candidates through the U.S. Secret Service (USSS). The Secret Service is also the lead security agency for "national special security events" (NSSEs), such as presidential nominating conventions. Department of Justice (DOJ) The Department of Justice enforces several federal statutes, discussed above, that could be relevant for campaign and election security. Within DOJ, the FBI is the lead federal law enforcement agency supporting state and local election administration, and is the lead federal agency in investigating and prosecuting foreign influence campaigns. Intelligence Community (IC) Several agencies contribute to or produce intelligence about election security threats. For example, a declassified version of a January 2017 Intelligence Community Assessment (ICA) documenting Russian attempts to influence 2016-cycle U.S. elections contained information and analysis from the CIA, FBI, and NSA. The " Coordination By and Among Selected Federal Agencies " section below provides additional discussion of the IC campaign and election security roles. Selected Other Federal Agencies The State Department's Global Engagement Center (GEC) is charged with coordinating federal efforts to counter foreign propaganda and disinformation efforts aimed at undermining U.S. national security interests. The GEC partners with other U.S. government agencies, including those within the State Department, at the Defense Department, and elsewhere. The Departments of Justice, State, and the Treasury all can be involved in administering sanctions for election interference. As noted previously, sanctions policy generally is beyond the scope of this report. Via the FY2020 NDAA bill ( S. 1790 ; P.L. 116-92 ), Congress assigned various agencies, especially DHS and the DNI, additional campaign and election security responsibilities. Most provisions involve providing Congress or federal or state agencies with information about election interference. The Appendix of this report provides additional detail. Table 3 provides a brief overview of selected agency roles in campaign and election security. Coordination By and Among Selected Federal Agencies Because no single federal agency is solely responsible for campaign and election securityâand because state and local governments have most practical responsibility for election securityâcoordination among agencies and governments is an ongoing congressional concern. Adding to the complexity of the election security challenge, government agencies, in some cases, both support and regulate private actorsâsuch as political campaignsâand sometimes rely on those private entities to provide threat information. Highlights of federal coordination issues appear below. Because some of these relationships appear to be in development, some information about agency coordination, or the lack thereof, remains unclear in the public record. Similarly, some information about coordination among intelligence-gathering agencies is publicly unavailable, beyond the scope of this report, or both. As such, other formal or information coordination among or by agencies likely occurs but is not reflected here. Department of Homeland Security Coordination Roles DHS takes a lead role in coordinating the federal support for campaign and election security. Most of the DHS coordination role stems from a January 2017 "critical infrastructure" designation that treats election infrastructure as an essential service requiring federal support and protection. The designation established the Elections Infrastructure Subsector (EIS) within the Government Facilities Sector, which includes various government buildings and equipment. As a result of the critical infrastructure designation, DHS prioritizes support for the subsector, including to those state and local election jurisdictions that choose to accept such assistance. This includes sharing information about threats; and conducting cyber hygiene and risk and vulnerability assessments. The critical infrastructure designation applies to physical and technical resources related to elections, such as communications technology, voting equipment, and polling places. It does not apply to political campaigns. The designation does not give DHS regulatory authority over federal elections. DHS serves as the Sector-Specific Agency (SSA) for the EIS. As SSA, the agency plays various coordinating roles among public and private entities, as highlighted below. As SSA, DHS coordinates information sharing among various governmental and nongovernmental entities (e.g., vendors) responsible for election administration. In this role, DHS also coordinates activities for the EIS Government Coordinating Council (GCC). The EIS-GCC includes representatives from DHS, EAC, and state and local governments. DHS also works with a Sector Coordinating Council (SCC), which consists of industry representatives (e.g., voting-machine manufacturers). DHS also funds the Elections Infrastructure Information Sharing and Analysis Center (EI-ISAC), a voluntary membership organization of state and local election jurisdictions run by the private Center for Internet Security. The EI-ISAC coordinates security information sharing among these entities. Election Assistance Commission Coordination Roles As the only federal agency devoted specifically to election administration, the EAC helps facilitate communication between state or local election administrators and other federal agencies, and vice versa. EAC commissioners serve on the EIS Government Coordinating Council (EIS-GCC), coordinated by DHS, and on the EIS-GCC executive committee. Intelligence Community Coordination Roles As noted previously, the IC includes more than a dozen agencies from throughout the federal government. Highlights of the IC role in coordination surrounding campaign and election security appear below. In July 2019, then-DNI Coats created an IC Election Threats Executive (ETE) position to serve as the DNI's principal elections adviser and to coordinate IC election security work. Coats also directed IC agencies to assign a senior executive to serve as the point-of-contact for that agency's election security work and to serve on a new IC Election Executive and Leadership Board. U.S. Cyber Command and the NSA monitors foreign threats to U.S. elections. This reportedly includes a recently established Election Security Group. In addition, the FY2020 NDAA bill requires the DNI to appoint a national counterintelligence officer within the National Counterintelligence and Security Center to coordinate election security counterintelligence, particularly regarding foreign interference and equipment issues. Coordination Roles and Selected Other Federal Agencies In addition to coordination on IC threat assessments noted above, multiple federal agencies have collaborated on campaign and election security educational resources for political committees, election administrators, or voters. Agencies also have issued joint warnings. The State Department's Global Engagement Center (GEC) is charged with coordinating federal efforts to counter foreign propaganda and disinformation. The State Department also works with the Treasury Department and Justice Department to administer sanctions for election interference. The FY2020 NDAA and Coordination Roles The FY2020 NDAA bill ( S. 1790 ; P.L. 116-92 ), enacted in December 2019, requires the DNI to "develop a whole-of-government strategy for countering the threat of Russian cyberattacks and attempted cyberattacks against election systems and processes in the United States." Congress specified that the strategy should include protecting federal, state, and local election systems, voter registration databases, voting tabulation equipment, and systems for transmitting election results. Congress also required the DNI to develop the strategy "in coordination" with the Secretaries of Defense, Homeland Security, State, and the Treasury, and with the Directors of the CIA and FBI. Federal Agency Roles and Campaign Security Perhaps because the 2017 critical infrastructure designation does not apply to political campaigns or other political committees, it appears that no federal agency has specific responsibility for coordinating security preparations for these entities. However, federal law enforcement agencies, particularly the FBI, can and do receive reports of, and investigate, suspected criminal activity. In preparation for the 2020 elections, the FBI also established a "Protected Voices" program that provides political campaigns, private companies, and individuals with information about how to guard against and respond to cyberattacks and foreign influence campaigns. In addition, DHS (CISA), the FBI, and ODNI have jointly briefed some 2020 federal political campaigns on security threats and best practices. Federal Election Security Guidance Federal election law takes a mostly voluntary approach to election security. Congress has set some security requirements for federal elections, such as directing election officials to provide a certain level of technological security for their HAVA-mandated computerized voter registration lists. Most election security standards are set at the state or local levels. Some examples of the voluntary election security guidance the federal government provides are the research, best practices, and technical assistance described in the " Selected Federal Agencies " section of this report. HAVA also charges the EACâwith assistance from the agency's advisory bodies and NISTâwith developing voluntary voting system guidelines (VVSG), accrediting laboratories to test voting systems to the VVSG, and certifying systems as meeting the VVSG. The proposed update to the VVSG that was in development as of this writing (VVSG 2.0) includes some security-related principles and guidelines, such as ensuring that voting systems are auditable, limiting and logging access to voting systems, and preventing or detecting unauthorized physical access to voting system hardware. Participation in the federal voting system testing and certification program is voluntary under federal law. The testing and certification program covers the "voting system" as defined by HAVA, which does not include some components of the election system, such as voter registration databases and election night reporting systems. Changes to one part of a voting system, such as updating software to patch security vulnerabilities, might require recertification of the system under the policies in effect as of this writing, and updates to the VVSG require approval by a three-vote majority of the EAC's commissioners. Federal Funding for Securing Election Systems Congress has responded to the threats that emerged during the 2016 election cycle, discussed above, in part with funding. Since the 2016 elections, it has provided funding for helping secure election systems both to states, territories, and the District of Columbia (DC), and to federal agencies. Funding for States After the 2016 Election Cycle The Consolidated Appropriations Act, 2020 ( H.R. 1158 ; P.L. 116-93 ), and the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ), included $425 million and $380 million, respectively, for payments under provisions of HAVA that authorize funding for general improvements to the administration of federal elections. The explanatory statements accompanying the bills listed the following election security-specific purposes as potential uses of the funds: replacing voting equipment that only records a voter's intent electronically with equipment that utilizes a voter-verified paper record; implementing a post-election audit system that provides a high level of confidence in the accuracy of the final vote tally; upgrading election-related computer systems to address cyber vulnerabilities identified through DHS or similar scans or assessments of existing election systems; facilitating cybersecurity training for the state chief election official's office and local election officials; implementing established cybersecurity best practices for election systems; and funding other activities that will improve the security of elections for federal office. The 50 states, DC, American Samoa, Guam, Puerto Rico, and the U.S. Virgin Islands were eligible for both FY2018 and FY2020 payments. The Commonwealth of the Northern Mariana Islands (CNMI) was eligible for FY2020 funding. Each recipient was guaranteed a minimum payment amount each year it was eligibleâ$3 million for each of the 50 states and DC and $600,000 per eligible territoryâwith the remainder of the appropriated funding distributed according to a formula based on voting-age population. Recipients are required to provide a 5% match for the FY2018 funds within two years of receiving a federal payment and a 20% match for the FY2020 funding. The EAC, which was charged with administering the payments, reported that all of the FY2018 funds were requested by July 16, 2018, and disbursed to the states by September 20, 2018. Each state has five years to spend the funds, according to the EAC, and must report on its spending each fiscal year. The EAC posts links to the states' reportsâand spending plansâon its website and issues its own overview reports of state spending. Funding for Federal Agencies After the 2016 Election Cycle As noted in the " Selected Federal Agencies " section of this report, multiple federal agencies are involved in helping secure election systems. Congress has designated some of the funding it has appropriated to such agencies specifically for election system security. For example, following the designation of election systems as critical infrastructure in January 2017, the report language for DHS appropriations measures has specified funding for the department's election security initiative. The explanatory statement for the FY2018 spending bill also directed the FBI to use some of its funding to help counter threats to democratic institutions and processes. Agencies may also spend some of the funding they receive for more general purposes on activities related to election system security. The U.S. Department of Defense's (DOD's) Defense Advanced Research Projects Agency (DARPA) has provided funding under its System Security Integrated Through Hardware and Firmware (SSITH) program to advance development of a secure, open-source voting system, for example, and the EAC applies some of its operational funding to the federal voting system testing and certification program described in the " Federal Election Security Guidance " section of this report. State and Local Role in Election Security Some threats to U.S. electionsâincluding both intentional interference efforts and the unintended threats posed by errors and natural disastersâinvolve the state and local systems used to administer elections. Other election security threats involve efforts to spread disinformation about elections or the integrity of the electoral process. States and localities may play a role in countering both types of threat. First, states and localities take the lead on defending their election systems. As noted previously, states and localities have primary responsibility for administering elections in the United States. The federal government has provided some funding and technical support to help them secure the systems they use to run elections, but states and localities have primary responsibility for ensuring that their systems are physically and technologically secure. That includes primary responsibility for funding election system security measures. Securing election systems may involve capital expenditures, such as replacing voting machines, that exceed funding provided by Congress. It may also involve ongoing costsâfrom identifying and addressing emerging security threats to renewing software licenses, paying election security staff, and conducting post-election auditsâthat extend beyond the period for which federal funding is available. Such expenses are covered, if they are covered, by states and localities. State and local responsibility for election system security also includes primary responsibility for making and implementing most decisions about how to secure election systems. Federal law sets some general standards for the administration of elections, such as the voter registration list digitization requirement noted in the " Federal Election Security Guidance " section of this report. States and localities decideâwithin the broad parameters set by such general standardsâwhich election equipment and procedures to use and how to mitigate risks to them. They choose, for example, whether to use electronic devices to capture or count votes; whether, when, and how to conduct post-election audits; whether and how to set security standards for election equipment vendors; whether to have in-house security staff in local jurisdictions or rely on state or vendor IT support; which cybersecurity tools and procedures to use; whether and how to train election officials and poll workers on election security; how to secure election materials between elections and ensure a secure physical chain of custody on Election Day; and what cyber and physical security standards to set for election equipment. Second, states and localities can help combat disinformation or misinformation about elections or the integrity of the electoral process. They can, for example, use official websites and social media accounts to share accurate information about elections or counter false information; and help educate the public about the steps they take to safeguard the electoral process. States also can work through their professional associationsâusing initiatives such as a public education campaign launched by the National Association of Secretaries of State (NASS) in November 2019âto help direct voters to trustworthy sources of election information. These efforts might occur as part of or in parallel with responses to disinformation or misinformation by the federal government or private entities like social media companies. States might partner with social media companies to remove posts containing election disinformation, for example, or adopt disclosure requirements that supplement or override the companies' policies on digital political advertising. Selected Recent Policy Issues for Congress Table 4 below briefly summarizes selected policy issues and options that have shaped recent policy debates in Congress. In addition, the Appendix at the end of this report briefly summarizes legislation primarily devoted to campaign and election security that has advanced beyond introduction during the 116 th Congress. The table reflects recent policy debates, but is not intended to be exhaustive. Some observers might consider other issues not reflected here to be relevant for campaign and election security. Concluding Observations Campaign and election security are developing fields that cross policy and disciplinary boundaries. This complexity is reflected in the various statutes, agencies, and congressional committees that share responsibility for policymaking and administrative matters relevant for security U.S. campaigns and elections. Questions such as those that follow reflect themes discussed throughout this report. These and other questions could help congressional readers decide whether they want to maintain the status quo, appropriate funds, or pursue oversight or legislation. Federal R ole. A key question for Congress is whether, where, and how it chooses to be involved in campaign and election security. Most broadly, this potentially includes how to define this rapidly developing policy area, and in so doing, considering which issues are most appropriately addressed at the federal level versus at the state or local levels. This report has emphasized the federal role because those topics are most relevant for Congress. As the report also explains, states, localities, and territories are responsible for making many of their own election security decisionsâjust as political campaigns, parties, and PACs are responsible for their own security. Therefore, there are important debates about what campaign and election security includes that the federal government can influence, but that are primarily addressed below the federal level, in the private sector, or both. Examples include, but are not limited to, how election security might affect voter access, and vice versa; whether states require voter identification at the polls and whether or to what extent alleged vote fraud exists; how much and on what jurisdictions choose to spend available funds; and whether states, localities, or political campaigns and parties have sufficient resources to secure their elections or organizations. Communication. Does Congress want to encourage or require additional information sharing about campaign and election security matters between the federal government and nonfederal elections agencies? Similarly, do state, territorial, and local elections officials feel that they have or need clear points of contact within federal agencies, and do they know which agencies to contact in various circumstances? If it determines that the status quo is inadequate, does Congress want to encourage or require different reporting protocols, agency outreach, etc.? Coordination. Various agencies have reported to Congress that they have improved coordination among themselves, particularly through working groups or task forces. Less clear, at least from publicly available information, is specifically how such coordination works and whether current coordinating mechanisms are sufficient or whether agencies need additional resources or mechanisms to improve coordination. If it determines that the status quo is inadequate, does Congress want to exercise oversight in this area, provide additional information-sharing authorities, funding, etc., or does it consider current coordination authorities and mechanisms sufficient? Sectors. Much of the federal government's attention to campaign and election security appears to emphasize outreach to election administrators in states, territories, and localities. With respect to the private sector (such as political campaigns and equipment manufacturers), is federal agency support sufficient? To what extent are information-sharing practices among federal agencies and the private sector (or voters) similar to or different from those that shape communication between federal agencies and state, territorial, or local governments? If it determines that the status quo is inadequate, does Congress want to encourage or require additional federal agency support for nongovernmental entities in campaign and election security, or reporting requirements for those entities to the federal government? Voters. Some federal public education campaigns, such as those to counter disinformation in elections, are aimed at individual voters. Overall, however, much of the federal role in campaign and election security emphasizes communication among government agencies or, in some cases, the private sector. If it determines that the status quo is inadequate, does Congress want to task federal agenciesâand if so, which onesâwith additional responsibility for educating voters about campaign and election security; to provide funding for nongovernmental organizations to do so, etc.? The scope of potential campaign and election security threats, and the federal government's role in responding to those threats, has changed substantially in less than five years. The foreign interference revealed during the 2016 cycleâand widely reported to be an ongoing threatâhas renewed congressional attention to campaign and election security and raised new questions. Whatever Congress determines about whether these or other questions are relevant for its consideration of campaign and election security policy, the issue is likely to remain prominent for the foreseeable future. Appendix. Legislation Related to Campaign and Election Security That Has Advanced Beyond Introduction, 116th Congress	Summary:	gov_report	1,024	null	76
crs_R46262	crs_R46262_0	You are given a report by a government agency. Write a one-page summary of the report. Report: C ongressional employees are retained to perform public duties that include assisting Members in official responsibilities in personal, committee, leadership, or administrative office settings. The roles, duties, and activities of congressional staff are matters of ongoing interest to Members of Congress, congressional staff, groups, and individuals, including those who raise concerns about congressional operations. Most observers recognize that Congress does not function without staff, but there is little systematic attention to what staff do, or what Members expect of them. In congressional offices, there may be interest in identifying Member expectations of congressional staff duties by position from multiple perspectives, including assessment of staffing needs in Member offices; guidance in setting position expectations, qualifications, and experience when offices choose to hire staff; and informing current and potential congressional employees of position expectations. Members of the House and Senate generally establish their own employment policies and practices for their personal offices. It is arguably the case that within Member offices, a common group of activities is executed for which staff with relevant skillsets and other qualifications are necessary. A body of publicly available job advertisements for staff positions from a number of different offices can shed light on the expectations Members have for position duties, as well as staff skills, characteristics, experience, and other expectations. For 33 commonly used congressional staff position titles, this report describes the most frequently listed job duties, applicant skills, characteristics, prior experiences, and other expectations found in a sample of job advertisements placed by Members of Congress between approximately December 2014 and September 2019 seeking staff in their offices. Table 1 lists the position titles and the frequency with which advertisements for them appeared in the sample. Identifying Job Advertisements for Congressional Staff Positions Data used in developing sample position expectations were taken from several publicly available sources, including the following, over the periods specified: The House Employment Bulletin, published weekly by the House Vacancy Announcement and Placement Service (HVAPS) in the Human Resources Office of the House Chief Administrative Officer (CAO). Data were collected from ads published between approximately January 2015 and September 2019. The Employment Bulletin, published online by the Senate "as a service to Senate offices choosing to advertise staff vacancies." Data were collected from ads, which were not dated, appearing from approximately July 2016 to July 2019. The House GOP Job and Resume Bank, which posts ads on behalf of the House Republican Conference on Facebook. Ads were collected between approximately January and June 2017. Other ads were collected from the period between approximately December 2014 and January 2017 from the House GOP Job Bank web page on the website of Representative Virginia Foxx during part of her tenure as the House Republican Conference Secretary. The Job Announcements Board hosted by Representative Steny Hoyer during part of his tenure as House Minority Whip. Data were collected from ads posted between approximately January 2016 and December 2017. Categorizing and Coding Job Advertisements More than 1,800 ads were collected from all sources. Duplicate ads resulting from posts to more than one source, and ads that appear to have been frequently reposted, were removed, as were ads for positions in congressional settings other than personal offices, yielding 880 ads for positions in Member personal offices. Substantially similar position titles (e.g., deputy scheduler and state deputy scheduler) for which there were five or more ads were identified and grouped together, as were related job titles (e.g., positions designated as district, field, or regional representative that had essentially similar job duties and expectations) for which there were five or more substantially similar ads, yielding a total of 704 ads. Ads for the 33 identified position titles were further categorized if there were five or more ads that specified the advertised position as "not entry level" or other signifier of presumptive advanced status. The 704 ads were coded against a variety of variables within eight categories, including ad tracking information; ad details; position responsibilities and responsibility areas; expected job skills, qualifications, and credentials; application materials; and office type. The distribution of ads by job title and level is provided in Table 1 . Solicitations of applicants for congressional staff appear to originate in a highly decentralized manner. Means of identifying appropriate candidates might potentially include reassigning staff within offices, placing ads in services that make them available by subscription, word of mouth, and other nonpublic means of identifying potential applicants for congressional staff positions. Consequently, it cannot be determined whether the dataset of ads analyzed in this report is representative of all congressional employment solicitations. In addition, the process by which candidates for some Member office senior staff positions are identified may not be public-facing. Based on information specified within the ads, most position titles were identified by one of the following four primary responsibility areas (some positions were identified by up to three responsibility areas): Legislative, Policy, and Oversight, Media, Messaging, and Speeches, Constituent Communications, Outreach, and Service, and Office Administration and Support. For each position, at least one sample position description was created based on the coded data. Information includes the most frequently occurring of the following: primary responsibility areas; widely expected duties, typically up to six of the most frequently occurring duties specified in all ads for that position; other potential duties, typically up to six other duties mentioned in more than one ad; applicant information, including characteristics, skills, and knowledge and prior experience; and other expectations. Concluding Observations Categorizing congressional staff positions by position title relies on an assumption that similarly titled positions in House and Senate personal offices carry out the same tasks under essentially similar circumstances. While personal offices may carry out similar activities, the assumption might be questionable given the differences in staff resources in House and Senate offices, as well as potential differences within offices of each chamber. Generalizations about staff roles and duties may also be limited in some ways due to the broad discretion Members have with regard to running their office activities. Variations from office to office, which might include differences in job duties, work schedules, office emphases, and other factors, may limit the extent to which sample position expectations provided here match operational practices in all congressional offices. Sample Position Expectations Caseworker18 Communications Director19 Communications Director, "Senior Level" or "Not Entry Level"20 Constituent Services Representative21 Correspondence Manager22 Deputy Press Secretary23 Deputy Scheduler24 Deputy Scheduler/Assistant to Chief of Staff25 Digital Director/Press Assistant26 Digital Media Director27 District Director28 Executive Assistant29 Executive Assistant/Scheduler30 Executive Assistant/Scheduler, "Not Entry Level"31 Field, District, or Regional Representative32 Field Representative/Caseworker33 Legislative Aide34 Legislative Assistant35 Legislative Assistant, "Not Entry Level"36 Legislative Correspondent37 Legislative Correspondent/Press Assistant38 Legislative Correspondent/Staff Assistant39 Legislative Counsel40 Legislative Director, House41 Legislative Director "Senior Level," or "Not Entry Level"42 Legislative Director, Senate43 Military Legislative Assistant44 Press Assistant45 Press Secretary46 Regional Coordinator47 Scheduler48 Scheduler, "Not Entry Level"49 Scheduler/Office Manager50 Senior Legislative Assistant51 Speechwriter52 Staff Assistant53 Staff Assistant/Driver54 Staff Assistant/Press Assistant55 Systems Administrator56 Summary:	null	96	8,603	8,605	8,605	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: C ongressional employees are retained to perform public duties that include assisting Members in official responsibilities in personal, committee, leadership, or administrative office settings. The roles, duties, and activities of congressional staff are matters of ongoing interest to Members of Congress, congressional staff, groups, and individuals, including those who raise concerns about congressional operations. Most observers recognize that Congress does not function without staff, but there is little systematic attention to what staff do, or what Members expect of them. In congressional offices, there may be interest in identifying Member expectations of congressional staff duties by position from multiple perspectives, including assessment of staffing needs in Member offices; guidance in setting position expectations, qualifications, and experience when offices choose to hire staff; and informing current and potential congressional employees of position expectations. Members of the House and Senate generally establish their own employment policies and practices for their personal offices. It is arguably the case that within Member offices, a common group of activities is executed for which staff with relevant skillsets and other qualifications are necessary. A body of publicly available job advertisements for staff positions from a number of different offices can shed light on the expectations Members have for position duties, as well as staff skills, characteristics, experience, and other expectations. For 33 commonly used congressional staff position titles, this report describes the most frequently listed job duties, applicant skills, characteristics, prior experiences, and other expectations found in a sample of job advertisements placed by Members of Congress between approximately December 2014 and September 2019 seeking staff in their offices. Table 1 lists the position titles and the frequency with which advertisements for them appeared in the sample. Identifying Job Advertisements for Congressional Staff Positions Data used in developing sample position expectations were taken from several publicly available sources, including the following, over the periods specified: The House Employment Bulletin, published weekly by the House Vacancy Announcement and Placement Service (HVAPS) in the Human Resources Office of the House Chief Administrative Officer (CAO). Data were collected from ads published between approximately January 2015 and September 2019. The Employment Bulletin, published online by the Senate "as a service to Senate offices choosing to advertise staff vacancies." Data were collected from ads, which were not dated, appearing from approximately July 2016 to July 2019. The House GOP Job and Resume Bank, which posts ads on behalf of the House Republican Conference on Facebook. Ads were collected between approximately January and June 2017. Other ads were collected from the period between approximately December 2014 and January 2017 from the House GOP Job Bank web page on the website of Representative Virginia Foxx during part of her tenure as the House Republican Conference Secretary. The Job Announcements Board hosted by Representative Steny Hoyer during part of his tenure as House Minority Whip. Data were collected from ads posted between approximately January 2016 and December 2017. Categorizing and Coding Job Advertisements More than 1,800 ads were collected from all sources. Duplicate ads resulting from posts to more than one source, and ads that appear to have been frequently reposted, were removed, as were ads for positions in congressional settings other than personal offices, yielding 880 ads for positions in Member personal offices. Substantially similar position titles (e.g., deputy scheduler and state deputy scheduler) for which there were five or more ads were identified and grouped together, as were related job titles (e.g., positions designated as district, field, or regional representative that had essentially similar job duties and expectations) for which there were five or more substantially similar ads, yielding a total of 704 ads. Ads for the 33 identified position titles were further categorized if there were five or more ads that specified the advertised position as "not entry level" or other signifier of presumptive advanced status. The 704 ads were coded against a variety of variables within eight categories, including ad tracking information; ad details; position responsibilities and responsibility areas; expected job skills, qualifications, and credentials; application materials; and office type. The distribution of ads by job title and level is provided in Table 1 . Solicitations of applicants for congressional staff appear to originate in a highly decentralized manner. Means of identifying appropriate candidates might potentially include reassigning staff within offices, placing ads in services that make them available by subscription, word of mouth, and other nonpublic means of identifying potential applicants for congressional staff positions. Consequently, it cannot be determined whether the dataset of ads analyzed in this report is representative of all congressional employment solicitations. In addition, the process by which candidates for some Member office senior staff positions are identified may not be public-facing. Based on information specified within the ads, most position titles were identified by one of the following four primary responsibility areas (some positions were identified by up to three responsibility areas): Legislative, Policy, and Oversight, Media, Messaging, and Speeches, Constituent Communications, Outreach, and Service, and Office Administration and Support. For each position, at least one sample position description was created based on the coded data. Information includes the most frequently occurring of the following: primary responsibility areas; widely expected duties, typically up to six of the most frequently occurring duties specified in all ads for that position; other potential duties, typically up to six other duties mentioned in more than one ad; applicant information, including characteristics, skills, and knowledge and prior experience; and other expectations. Concluding Observations Categorizing congressional staff positions by position title relies on an assumption that similarly titled positions in House and Senate personal offices carry out the same tasks under essentially similar circumstances. While personal offices may carry out similar activities, the assumption might be questionable given the differences in staff resources in House and Senate offices, as well as potential differences within offices of each chamber. Generalizations about staff roles and duties may also be limited in some ways due to the broad discretion Members have with regard to running their office activities. Variations from office to office, which might include differences in job duties, work schedules, office emphases, and other factors, may limit the extent to which sample position expectations provided here match operational practices in all congressional offices. Sample Position Expectations Caseworker18 Communications Director19 Communications Director, "Senior Level" or "Not Entry Level"20 Constituent Services Representative21 Correspondence Manager22 Deputy Press Secretary23 Deputy Scheduler24 Deputy Scheduler/Assistant to Chief of Staff25 Digital Director/Press Assistant26 Digital Media Director27 District Director28 Executive Assistant29 Executive Assistant/Scheduler30 Executive Assistant/Scheduler, "Not Entry Level"31 Field, District, or Regional Representative32 Field Representative/Caseworker33 Legislative Aide34 Legislative Assistant35 Legislative Assistant, "Not Entry Level"36 Legislative Correspondent37 Legislative Correspondent/Press Assistant38 Legislative Correspondent/Staff Assistant39 Legislative Counsel40 Legislative Director, House41 Legislative Director "Senior Level," or "Not Entry Level"42 Legislative Director, Senate43 Military Legislative Assistant44 Press Assistant45 Press Secretary46 Regional Coordinator47 Scheduler48 Scheduler, "Not Entry Level"49 Scheduler/Office Manager50 Senior Legislative Assistant51 Speechwriter52 Staff Assistant53 Staff Assistant/Driver54 Staff Assistant/Press Assistant55 Systems Administrator56	Summary:	gov_report	1,024	null	77
crs_R46108	crs_R46108_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Congress has a long-standing interest in ensuring access to broadband internet service in rural areas. Federal subsidies underwritten by taxes and long-distance telephone subscriber fees have injected billions of dollars into rural broadband markets over a period of decadesâmostly on the supply sideâin the form of grants, loans, and direct support to broadband providers. As of 2019, more than 20 million Americans still lacked broadband access. According to many stakeholders and policy experts, federal spending on broadband expansion has not adequately accounted for local conditions in rural areas that depress effective demand for broadband. Lower demand in rural areas may discourage private-sector investment and reduce the effectiveness of federal efforts to expand and improve broadband service. According to the authors of a 2015 study on rural broadband expansion, "While the vast majority of federal programs dealing with broadband have focused on the provision of infrastructure, many economists and others involved in the debate have argued that the emphasis should instead be on increasing demand in the areas that are lagging behind." The study found that rural households' broadband adoption rate lagged that of urban households by 12-13 percentage points and that while 38% of the rural-urban "broadband gap" in 2011 was attributable to lack of necessary infrastructure, 52% was attributable to lower adoption rates. "Implicit in many supply-side arguments is an assumption that demand-side issues will resolve themselves once there is ample supply of cheap and ultra-fast broadband," wrote the directors of the Advanced Communications Law & Policy Institute (ACLP) in a public comment to the Commerce Department's Broadband Opportunity Council in 2015. "Though appealing, this reductive causeâandâeffect has been questioned by social scientists, researchers, practitioners, and others who have worked to identify and better understand the complex mechanics associated with broadband adoption across key demographics and in key sectors." The geographic and demographic distribution of rural broadband demand is uneven. There is unmet demand in some rural areas. In others, even where there is access, that may not translate into widespread adoption. Observers cite a range of factors. On average, rural areas are less wealthy than urbanized areas, and have older populations with lower educational attainmentâfactors which negatively correlate with demand for broadband service. Related barriers to adoption, such as lower perceived value, affordability, computer ownership, and computer literacy, have persisted over many years. Rural areas with relatively favorable geography and demographics may attract significant investment in broadband service, but even subsidies may fail to spur buildout in less-attractive rural markets. This report complements separate CRS analyses of major federal subsidy programs on the supply side of the market by providing an analysis of demand-side issues at the nexus of infrastructure buildout and adoption. It focuses exclusively on demand for fixed broadband among rural households and small businesses. It does not address the role of schools, healthcare facilities, public libraries, and other "community anchor institutions" as end users of broadband. However, it does include discussion of the role schools and libraries play as providers of broadband service and training to rural residents who may lack home access to the internet, and how this may affect overall household adoption behavior. It also includes discussion of broadband-enabled services, such as telemedicine and precision agriculture, which may incentivize more rural households and small businesses to adopt broadband service. The report begins with a discussion of the rural broadband marketâspecifically, the characteristics of demand in rural households and small businesses, and how these affect private-sector infrastructure investments. It then provides a survey of federal broadband programs and policies designed to spur broadband buildout and adoption, with a discussion of how demand-side issues may impede achievement of these goals. It concludes with a discussion of selected options for Congress. The Rural Broadband Market According to the U.S. Census Bureau, 60 million Americans, or 19.3% of the total population, live in rural areas, defined as "all population, housing, and territory not included within an urbanized area or urban cluster." As of 2010, urbanized areas and urban clusters occupied about 3% of the U.S. land mass, yet contained more than 80% of the U.S. population. As a result, fixed broadband network infrastructure, which largely relies on wireline connections to the physical addresses of subscribers, is geographically concentrated. Urban areas have benefited from this concentration, especially areas with favorable geographic locations and economic conditions. For example, the City of Huntington Beach, CA, charges broadband providers rent for access to its utility polesâ$2,000 per pole per yearâand leases access to city-owned fiber-optic cable (fiber) infrastructure. "We continue to have a lot of carriers wanting to site on our poles in our downtown area which is next to the beach," a city official said during a 2019 webinar, noting that other, less favorably located cities had not been able to duplicate Huntington Beach's development model. "[An] inland city is not going to get what we get here on the coast." In contrast, in many rural areas, the cost of providing broadband service may approachâor even exceedâthe predicted return on investment. Broadband providers may not be willing to serve these areas without support from direct government subsidies, grants, or loans. Local conditions in rural areas vary widely, though. Some rural markets may be relatively attractive on commercial terms, because of unique characteristics such as the presence of post-secondary educational institutions or tourism attractions, relatively high levels of economic development and educational attainment, favorable demographics, or proximity to urban areas. Other rural markets that lack these characteristics are likely to be less commercially attractive. Long-term demographic trends suggest a growing bifurcation of the rural broadband market. According to a 2018 U.S. Department of Agriculture (USDA) analysis, rural areas have witnessed "declining unemployment, rising incomes, and declining poverty," as well as more favorable net migration rates since 2013. However, the analysis also found that "people moving to rural areas tend to persistently favor more densely settled rural areas with attractive scenic qualities, or those near large cities. Fewer are moving to sparsely settled, less scenic, and more remote locations, which compounds economic development challenges in those areas." For reasons that will be explained in more detail below, household and small business demand for broadband service is likely to be impacted in rural areas by demographic trends, geography, and economic context. As a result, these factors affect the infrastructure investment behavior of broadband providers, raising policy questions about the appropriate level of federal assistance and how it can be distributed most effectively and efficiently. The next three sections of this report discuss the adoption of broadband service by rural households and rural small businesses and the implications of market demand for private-sector investment in rural broadband infrastructure. Valuation of Broadband Service by Rural Households Adoption rates for broadband service are highly dependent on the valuation that households and small businesses place on internet access. Studies suggest that on average, valuation of internet accessâmeasured as willingness to pay for broadband serviceâis lower for rural households than for urban households. Knowledge of computers, computer ownership, and perceived relevance of the internetâall of which affect consumer valuationâtend to be lower among older, less educated, and less wealthy households. Because rural households tend to be older, less educated, and less wealthy than their urban counterparts, their willingness to pay for broadband also tends to be lower. Not all households are the same, of course. A substantial number of low-income households do not subscribe to broadband service even when it is offered to them at no cost, indicating a valuation of zero. At the same time, many reports indicate that some rural residents are willing go to extensive lengths to access the internet for tasks they view as essential, even if broadband service is not available at their home or business. The relatively lower proportion of potential subscribers in rural areas who are both highly motivated to adopt broadband and are able to pay for it complicates the business case. A 2010 study, based on a report commissioned by the Federal Communications Commission (FCC), found that survey respondents were, on average, willing to pay an extra $45 per month for "fast" speeds adequate for music, photo sharing, and videos. However, on average, respondents were only willing to pay an extra $48âa difference of $3âfor "very fast" speeds adequate for gaming, large file transfers, and high-definition movies. Households that already had relatively high speed broadband were generally willing to pay more than average for very fast service. While consumer expectations have certainly evolved over the past decade, the 2010 study's findings are broadly consistent with those of subsequent studies: most consumers, regardless of where they reside, value basic internet access at speeds adequate for everyday use, but only a relative few are willing to pay substantially more for very high speeds. Members of the latter group generally have higher levels of broadband connectivity than others, and belong to relatively wealthier, better-educated demographic groups. The FCC sponsored a series of field experiments, beginning in 2012, to gain better understanding of broadband demand among low-income households. The goal of these experiments was to inform administration of the federal Lifeline program, which subsidizes voice and broadband service charges for qualifying low-income consumers. A 2015 report on a field experiment conducted in West Virginia and eastern Ohio found that Lifeline-eligible non-subscribers in that region were overwhelmingly willing to pay $3 more per month to move from bottom-tier speeds (1 megabits-per-second (Mbps), offered at $31.99 per month) to moderate broadband speeds (6 Mbps, offered at $34.99 per month). However, only one out of 118 participants was willing to pay $44.99 per monthâan extra $10âto double their maximum download speed from 6 to 12 Mbps. The Lifeline program itself has long been undersubscribed, despite the fact that it frequently reduces consumer out-of-pocket costs to zero (see text box above, "Why Is the Lifeline Program Undersubscribed?"). A 2014 study, based on a survey funded by the Department of Commerce of 15,000 non-adopting households at all income levels, found that approximately two-thirds of respondents would not consider adopting broadband at any price, and that non-adopters were disproportionately rural (36% of non-adopters lived in rural areas, as compared to 19.3% of all Americans). The remaining one-third of respondents voiced interest in broadband adoption. Rural respondents were more likely to belong to this group than their urban counterparts, despite making up a disproportionately large share of non-adopters overall. These respondents most commonly identified price and availability as the main barriers to adoption. The study authors estimated that achieving a 10% increase in subscribership among members of the group who reported price as a factor in their decision would require an average price decrease of 15%. A 2012 study of broadband usage among Kentucky farmers broadly tracks with other studies that show a higher propensity for broadband adoption among younger, better educated, higher earning, business-oriented households with experience using the internet, regardless of location. The study found that a representative 45-year-old producer earning more than $50,000 on a 750 acre farm, who had experience using the internet but did not have broadband access, was willing to pay $171.42 as a hypothetical one-time property tax payment to support buildout of the necessary local infrastructure to provide broadband access to area farms. On the other end of the spectrum, a representative 63-year-old producer with a 250 acre farm earning less than $50,000, who had not subscribed to broadband service even when it was available, was willing to pay a one-time payment of just 20 cents to support broadband infrastructure improvements. The average age of survey respondents was 59.2 years. The Kentucky Department of Agriculture reported in 2019 that the demographic profile of Kentucky farmers is shifting, including a larger number of younger producers. This demographic shift may lead to increased demand for broadband service expansion and improvements in the rural areas of Kentucky where it is most pronounced. Given that demographic trends vary at the local level, though, they will likely not affect broadband market development equally in all parts of the state. Valuation of Broadband Service by Rural Small Businesses Small businesses are generally more likely than residential households to regard broadband internet access as essential. However, within the small business sector there are significant differences in willingness to pay for any given level of service. Businesses with relatively modest data requirements may elect not to upgrade to a higher tier of service if the expected productivity benefits are less than the expected subscription and equipment upgrade costs. A 2010 study sponsored by the Small Business Administration (SBA), in fulfilment of requirements of the Broadband Data Improvement Act ( P.L. 110-385 ), found that "broadband is central to U.S. small businesses in ways that it is not to individuals. The small business broadband adoption rate has increased to 90% as of the date of this survey (April 2010), compared to 74% of adults with broadband access in their homes.... " Surveys conducted for the SBA study showed that both rural and urban respondents viewed high-speed internet "as an essential service" that enabled them to "achieve strategic goals, improve competitiveness and efficiency, reach customers, and interact with vendors." However, the study found that non-agricultural rural businesses were significantly less likely to have their own website than their urban counterparts were. Likewise, they were less likely to be willing to pay substantially more for improved service, even though the study found that they rated the quality of service in rural areas lower than respondents in urban areas did. Most rural businesses surveyed indicated that they were not willing to pay 10% more for significantly improved service. Studies that are more recent have made similar findings. Although basic access to the internet in rural areas is much more widespread than it was a decade ago, usage practices of many small businesses do not appear to have changed significantly. Most appear to value basic internet access to support a few essential low-bandwidth functions, such as making the name and location of the business available on internet searches, but proportionately fewer appear to demand high-bandwidth advanced business applications. For example, a 2017 study comparing selected rural and urban areas of North Carolina found that many small rural businesses have no web presence beyond a listing in Google search results, and that more than half of those businesses that did have a web page used it solely to provide basic information about the business. "Overall, small rural businesses are not using internet-based technology to support their businesses. While they may have broadband access, their use of websites, e-commerce and social media is limited, and it is significantly lower than small urban businesses," the study authors wrote. Apparently, small businesses find internet access useful, but many do not use applications requiring high bandwidth. It is not clear from these results what immediate benefits would be provided to non-intensive business users in remote rural areas by improvements in broadband service speed and quality. However, broadband advocacy groups have suggested that emerging new applications and encouraging small businesses to adopt more sophisticated web development strategies may increase demand for improved service over time. Other studies indicate that the type and location of business activity may have a significant influence on demand for higher-speed broadband. The businesses covered in the North Carolina study were, by and large, small retail establishments in isolated rural areas. Businesses in "intermediate" exurban locales that work in healthcare or knowledge-intensive sectors are more likely to use high-bandwidth applications, according to one study. For example, a survey of local businesses by the Central Coast Broadband Consortium, a nonprofit representing independent broadband providers serving the greater Monterey Bay area, found that business respondents had significant data and file transfer needs. The area surveyed includes many sparsely populated rural areas with difficult terrain, but it is also home to significant tourist destinations, large agriculture enterprises, and a University of California campus, and its northern boundary extends to the exurbs of San Jose, one of the most highly developed technology hubs in the nation. Market Demand and Private-Sector Investment Observers often comment that rural broadband markets are hyper-localâthat is, that conditions affecting broadband deployment and adoption vary widely from one area to the next. Historically, investments in broadband infrastructure have tended to cluster in areas with lower risk and potentially higher returns. Broadband providers may view investment in rural markets with little history of internet usage as a high-risk endeavor. Subsidies may lower financial risk to broadband providers, but do not change their basic preference for low-risk, high-return projects, which guides private sector investment in expansion of broadband service. In a 2019 report, Merit Network, Inc., a nonprofit corporation owned and governed by Michigan's public universities, highlighted the business challenges faced by broadband providers in nascent rural broadband markets. According to the report, "Despite the significant qualitative benefits that a broadband project may bring, depending on the method of financing, it is critical to accurately estimate adoption rates and build a solid financial model to ensure that adequate revenue will be achieved to repay any loan obligations, maintain ongoing operations and fund depreciation of capital equipment." "Even if rural areas are profitable for telecommunications companies, urban areas offer still higher returns on investment. This makes rural areas less attractive markets and perpetuates the urban focus of market decisions," according to the authors of one academic study. "The market for telecommunications shows that a free-market rationale can ensure an efficient use of limited resources, i.e. using the resources for profitable markets in high-density areas, but it cannot ensure an equal delivery of services in all areas, leaving the rural underserved." A 2019 report from the Arkansas governor's office stated that low broadband adoption rates "have consistently been a primary barrier to investment by the provider community." Noting that age affects adoption rates, the report concluded that "increased adoption within [the older] demographic has the potential to strengthen the business case for broadband deployment." The Arkansas report also highlighted low statewide enrollment in the Lifeline program as a barrier to investment. The FCC estimates that the Lifeline enrollment rate was 18% for Arkansas in 2018. The Arkansas report found that "raising adoption rates [of the Lifeline program] could also strengthen the business case for private companies to invest in broadband infrastructure, resulting in better internet access for both poor and non-poor Arkansans.... " Studies elsewhere have found a similar relationship between demand and investment. For example, in a 2015 report on its broadband expansion projects, the Appalachian Regional Commission, which serves 13 Appalachian states, found that "broadband internet service providers [are] less likely to provide services in sparsely populated areas because it initially has a lower return on investment and is less cost-effective." Federal Programs and Policies Federal programs and policies play a significant role in the development of rural broadband markets, given their often-challenging economics. In 2018, USDA and the FCC spent a combined $9.1 billion on broadband programs, largely in rural areas (see Figure 1 ). The following four sections discuss the major USDA and FCC broadband programs, rural considerations for the FCC's broadband speed benchmarks, demand factors in awarding federal funds for broadband infrastructure buildout, and selected federal broadband adoption programs that may influence rural demand. Major USDA and FCC Broadband Programs There are two major sources of federal funding for broadband in rural areas: the broadband and telecommunications programs of the USDA's Rural Utilities Service (RUS) and the Universal Service Fund (USF) programs of the FCC. Most of these programs focus on the supply side, targeting infrastructure deployment, but they also include some affordability initiatives that offer limited discounts on broadband subscription costs to low-income households, certain rural healthcare providers, and schools. Rural Utilities Service Programs34 The RUS houses three ongoing assistance programs exclusively dedicated to financing broadband deployment: the Rural Broadband Access Loan and Loan Guarantee Program, the Community Connect Grant Program, and the ReConnect Program. The primary legislative authority for the Rural Broadband Access Loan and Loan Guarantee Program, and the Community Connect Grant Program, derives from the Rural Electrification Act of 1936, which Congress subsequently amended in various farm bills to support broadband buildout in rural areas. Section 6103 of the Farm Security and Rural Investment Act of 2002 ( P.L. 107-171 ) amended the Rural Electrification Act of 1936 to authorize the Rural Broadband Access Loan and Loan Guarantee Program to provide funds for the costs of the construction, improvement, and acquisition of facilities and equipment for broadband service in eligible rural communities. The 2018 farm bill ( P.L. 115-334 , Agriculture Improvement Act of 2018) authorized a grant componentâthe Community Connect programâin combination with the broadband loan program. This provision increased the annual authorization level from $25 million to $350 million, raising the proposed service area eligibility threshold of unserved households from 15% to 50% for broadband loans; authorizing grants, loans, and loan guarantees for middle mile infrastructure; directing improved federal agency broadband program coordination; and providing eligible applicants with technical assistance and training to prepare applications. Congress authorized the ReConnect Program separately through the annual appropriations process, funding it at $600 million through the Consolidated Appropriations Act of 2018 ( P.L. 115-141 ). The ReConnect Program includes both loans and grants to promote broadband deployment in rural areas where 90% of households do not have sufficient access to broadband at 10 Mbps/1 Mbps. Two additional programs also support broadband deployment in rural areas. The Telecommunications Infrastructure Loan and Loan Guarantee Program (previously the Telephone Loan Program) is similar in purpose to the Rural Broadband Access Loan and Loan Guarantee Program, but eligibility requirements are tailored to support deployment in areas with extremely low population densities. Distance Learning and Telemedicine (DLT) grantsâwhile not principally supporting connectivityâfund equipment and software that operate via telecommunications to rural end-users of telemedicine and distance learning applications. Congress funds RUS programs through annual appropriations. For FY2019, the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provided $5.83 million to subsidize a Rural Broadband Access loan level of $29.851 million; $30 million for Community Connect broadband grants; $550 million for the ReConnect Program (in addition to $600 million provided for that program in FY2018); $1.725 million to subsidize a total loan level of $690 million for the Telecommunications Infrastructure Loan and Loan Guarantee Program; and $47 million for DLT grants. Universal Service Fund Programs37 The FCC established the USF in 1997 to meet objectives and principles established by the Telecommunications Act of 1996 ( P.L. 104-104 ). The Universal Service Administrative Company (USAC), an independent not-for-profit organization, administers the USF under FCC direction. USF programs are not funded via annual appropriations, but rather from fees the FCC receives from telecommunications carriers that provide interstate service. The FCC has discretion to spend these fees without congressional appropriations. FCC supply-side support for broadband infrastructure, primarily through the USF High Cost program, totaled nearly $14 billion from FY2016 through FY2018. The High Cost program includes several funds that support broadband infrastructure deployment and provide ongoing subsidies to keep the operation of telecommunications and broadband networks in high cost areas economically viable for broadband providers. These providers must meet deployment benchmarks and offer service at rates reasonably comparable with those offered in urban areas. The subsidy indirectly benefits households and businesses in cases where there is a significant urban-rural price differential by making below-market subscription rates available. The other USF programs are the Lifeline program, which directly supports low-income households by subsidizing affordable or no-cost monthly broadband plans, and the Schools and Libraries program and Rural Health Care program, which pay for local network equipment purchases and some broadband subscription costs for eligible schools, libraries, and health care facilities. Broadband Provider Discretion Broadband providers have wide discretion in howâand whetherâthey choose to participate in these programs. Although the federal government imposes certain conditions on its subsidies, grants, and loans to broadband providers, it does not make participation compulsory. Even in subsidized markets, broadband provider investment behavior is conditioned to a greater or lesser degree by demand, predicted adoption rates, and anticipated return on investment. The federal government mayâwithin the existing legislative frameworkâadjust the structure and funding levels of its major funding programs to encourage private-sector investment in rural areas that supports its policy goals. FCC Service Benchmarks and Market Demand for Higher Speeds The FCC changes its definition of broadband service as technologies, user expectations, and markets evolve. It reviews its data speed benchmarks on an annual basis, and its decisions have regulatory implications that may affect private-sector investment decisions in rural areas. The degree to which these benchmarks should be aspirational or reflect current market demand is a topic of frequent debate in policy circles. Assessment of demand and its likely development over time informs many of these debates. Section 706 of the Telecommunications Act of 1996 ( P.L. 104-104 ; the Telecommunications Act) requires the FCC to report yearly on whether "advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion." The act does not specifically define advanced telecommunications capability, delegating this determination to the FCC. It directs the FCC to "take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market" if its determination is negative. Since 1999, there have been 11 Section 706 reports, each providing a snapshot and assessment of broadband deployment. As part of this assessment, and to help determine whether broadband is being deployed in "a reasonable and timely fashion," the FCC has established minimum data speeds that qualify as broadband service for the purposes of the Section 706 determination. In 2015, citing changing broadband usage patterns and multiple devices using broadband within single households, the FCC raised its minimum fixed broadband benchmark speed from 4 megabits-per-second (Mbps) (download)/1 Mbps (upload) to 25 Mbps/3 Mbps. The 25/3 Mbps threshold is meaningful in both technical and policy terms, because the legacy copper-based connections utilized by some broadband providers would likely require significant upgrades in order to meet higher thresholds. While fiber-based "middle-mile" cable has been broadly deployed over the last two decades, "fiber-to-the-home" installations that enable faster speeds are much less widespread, especially in remote rural areas. Increases in minimum speed thresholds have frequently engendered policy debates about the regulatory role of the FCC and how best to allocate limited resources for broadband expansion. Stakeholders in both the public and private sectors have frequently raised the issue of market demand for improved service when justifying their positions on the FCC's annual Section 706 determinations. During the Obama Administration, FCC leadership justified increases in service speed thresholds as necessary to ensure that broadband infrastructure kept pace with changes in consumer behavior and the increasing number of bandwidth-hungry electronic devices and applications. "Application and service providers, consumers, and the broadband providers are all pointing to 25/3 as the new standard," wrote then-Chairman Tom Wheeler when commenting on the agency's 2015 progress report. "Content providers are increasingly offering high-quality video online, which uses a lot of bandwidth and could use a lot more as 4K video emerges." Opponents argued that demand does not justify investments in faster service that requires costly fiber-optic installations. Two FCC commissioners then serving released dissenting statements, citing tepid demand for faster broadband service as a reason to refrain from mandating higher speeds. Some criticized the FCC for subsidizing infrastructure buildout under one standard, which was then superseded by a new higher standardâin effect designating newly built-out areas as unserved. Commissioner Ajit Pai wrote, "The driving factor in defining broadband should be consumer preference.... 71% of consumers who can purchase fixed 25 Mbps serviceâover 70 million householdsâchoose not to." As FCC Chairman since 2017, Pai has retained the 25/3 Mbps standard as sufficient to meet the Telecommunications Act requirement for the FCC to ensure availability of advanced telecommunications capabilities. In public comments submitted for the 2019 FCC progress report, some large broadband providers and associated trade and public policy groups expressed concerns that any increase of speed requirements beyond the existing 25/3 Mbps standard would impose unnecessary burdens on providers based on predicted cost and market demand. "The Commission should not change benchmarks based on aspirations that do not reflect widespread consumer demand and that are not grounded in the text of Section 706," wrote the Free State Foundation. "Instead, Section 706 implies a realistic analysis that takes stock of actual market data regarding deployment of infrastructure and the availability of advanced capabilities that a substantial majority or at least an early majority of consumers subscribe to." By contrast, rural co-ops and other independent broadband providers have tended to argue (directly or through trade associations) for a higher speed benchmark, which would lead to federal subsidization of higher-speed service. In a 2018 letter to a Member of Congress, the manager of an Iowa electric co-op wrote, "Broadband systems funded with limited federal funds should meet the growing speed and data consumption needs of today and into the future.... [Congress] should recognize that in today's 21 st century economy, broadband systems built to 10/1 or slower speeds cannot support a modern household much less attract and retain new businesses." Trade organizations with memberships that include a cross-section of companies by size, corporate structure, and technology type have generally avoided discussing speed benchmarks in their submitted comments, focusing instead on other issues, such as substitutability of mobile broadband for fixed broadband. FCC data released as part of the 2019 progress report indicated that 25.3% of households in the nation's least rural counties where service was available had adopted 100/10 Mbps broadbandâmore than double the 9.9% adoption rate in the nation's most rural counties (see Figure 2 ). The same data indicated higher overall adoption of the current standard of 25/3 Mbps, with a 57.7% adoption in the least rural counties and 23.1% in the most rural. Some recent state and regional reports have questioned whether market demand justifies government-subsidized investment in higher speed broadband in all cases. "There is an ongoing, multifaceted debate about whether, where, and when the performance advantages of fiber justify the investment in upgrading communications networks," according to the Arkansas Development Finance Authority. "Most uses of the internet today do not require the capacity and speed that fiber internet offers, and internet service providers who deploy fiber don't necessarily experience strong demand for the upgraded service." According to an April 2019 report from the Southeastern Indiana Regional Planning Commission, "Some providers argue that even when broadband is available, customers do not subscribe as expected." The authors argued for energetic measures to promote broadband affordability and adoption as a remedy. Federal Programs' Consideration of Market Demand When Awarding Funds for Broadband Infrastructure Buildout The primary purpose of the RUS and USF High Cost programs is to support expansion of broadband availability in unserved or underserved areas, rather than to promote broadband adoption. Funding under these programs has typically been awarded based on ISP commitments to making a certain level of service available to a certain number of eligible households and businesses within a certain period of time. However, there are some important differences. The RUS programs include loans, which recipients must repay. Applicants for funding under the Rural Broadband Access Loan program are required to complete and submit a financial forecast to demonstrate that they can repay the loan, and that the proposed project "is financially feasible and sustainable." The forecast must includeâwith few exceptionsâa market survey that describes service packages and rates, and provides the number of existing and proposed subscribers. This requirement may incentivize recipients to encourage adoption in their service areas in order to increase revenues that they can then use for loan repayment. At the same time, it may also deter providers from accepting loans to serve areas where the business case for deployment is particularly difficult. Perhaps because of disincentives for investment in unattractive markets, RUS selection criteria and loan terms prioritize buildout to unserved or underserved areas over subscription rates or other business performance metrics. According to the application guide, "Priority must be given to applicants that propose to offer broadband service to the greatest proportion of households that, prior to the provision of the broadband service, had no incumbent service provider." Program administrators prioritize projects according to four tiers, which range from 25% to 100% of households unserved. The standard loan term is 3 years, but applicants can request up to a 35-year repayment term and a principal deferral period of up to 4 years if at least 50% of the households in the proposed service area are unserved. The RUS ReConnect program has similar goals, but also includes grants and loan-grant combinations. Applicants can likewise request more generous loan terms if they plan to serve a Substantially Underserved Trust Area (typically tribal lands), and their application may be granted priority status. Reviewers score applications against evaluation criteria using a points-based system. They award points for population density (less dense areas receiving preference), number of farms served, number of businesses served, number of educational facilities served, performance of the offered services, and other criteria. Neither projected business performance metrics nor adoption rates are included in the evaluation criteria. Under the High Cost program, federal subsidies are premised on the absence of a business case for broadband expansion. In announcing the latest proposed round of support, known as the Rural Digital Opportunity Fund (RDOF), the FCC stated that it would prioritize buildout in areas where "there is currently no private sector business case to deploy broadband without assistance." USF programs only require that participating broadband providers advertise the availability of broadband service within their service areas, and that the broadband provider be able to provide service at rates "reasonably comparable to rates offered in urban areas" to any area household within 10 business days if requested to do so. Census blocksâthe administrative-territorial unit used by the FCC to measure broadband coverageâare considered served if a local broadband provider meets these conditions. As with the RUS programs, the High Cost program has prioritized buildout and higher broadband performance over adoption. Phase I of the proposed RDOF program would prioritize support to broadband providers that serve "completely unserved areas" at higher data speeds, higher usage allowances, and lower latency, but sets no specific adoption benchmarks. The FCC expressed concerns in its RDOF proposal that recipients of support might lack any incentive to aggressively market their services or otherwise stimulate demand beyond relatively low-cost high-return areas, and might even take measures to limit subscription in order to protect profits. Since [RDOF] support may require certain providers to offer much higher data caps than they do to [non-RDOF] subscribers and price the services similarly, such providers may have an incentive to limit [RDOF] subscribers to sell their capacity to more profitable [non-RDOF] subscribers. Spectrum-based providers that do not have a network sufficient to serve most locations in a geographic area would also have an incentive to limit subscription if expanding capacity would be less profitable than limiting subscription and collecting [RDOF] subsidies based purely on deployment. Even wireline bidders may lack the proper incentives to serve additional customers in some areas, given that it may not be profitable without a per-subscriber payment to run wires from the street to the customer location and install customer premises equipment. Having expressed these concerns, the FCC put forward a proposal to introduce subscribership milestones for RDOF recipients. It requested comment on several different implementation options. One proposal would offer a baseline level of support to broadband providers and then add per-subscriber payments. Another would withhold a certain percentage of support if broadband providers failed to meet subscription milestones, although it raised the question of what milestones were appropriate given "the unique challenges of serving rural areas." Eliciting private sector participation in rural broadband programs appears to be a concern for the FCC, just as it is for USDA. In its last round of USF funding support, FCC increased the term of support to broadband providers from 5 years to 10 years in order to gain "robust participation" in the program. Federal Programs That May Stimulate Broadband Demand A number of federal programs may stimulate demand for broadband in underserved areas, though this is not always their primary purpose. Such programs include end-user subsidies to reduce out-of-pocket costs for subscribers; education and outreach activities to promote digital awareness and skills; infrastructure-oriented programs that support community anchor institutions such as schools and libraries; and infrastructure-oriented programs supporting specific applications, such as telemedicine and precision agriculture. This section presents a non-exhaustive summary of these programs. End-User Subsidies The FCC's Lifeline program is the only major federal broadband program that directly targets broadband adoption by residential subscribers. It targets households earning less than 135% of the federal poverty level. Program enrollment rates vary widely by state, with a nationwide average of 28% of eligible beneficiaries. The program subsidizes enrollees to cover the recurring monthly service charges associated with broadband subscribership. Support is not given directly to the subscriber but to the subscriber-selected service provider. Although stimulating broadband demand is not an explicit purpose of the Lifeline program, expansion of Lifeline enrollment may improve the business case for broadband deployment in rural areas, which on average have a disproportionately high number of low-income residents. In many cases, facilities-based telecommunications providers sell excess capacity in areas they already serve to resellers, who then rebrand the service and market low-cost plans to eligible Lifeline beneficiaries. In 2017, the FCC proposed changes to the Lifeline program that would bar resellers from participation. Some in Congress claimed that these changes would reduce enrollment by 70% from current levels. In a further action, the proposed FCC update to Lifeline minimum service standards for 2019 raised concerns in some quarters that low-income subscribers would be priced out of the market by required upgrades. In a letter to the FCC, NTCAâThe Rural Broadband Association wrote that unless the FCC requirement is waived, "current Lifeline subscribers to fixed broadband service will be forced to upgrade to a higher speed tier than they may need, want, or have the ability to affordâresulting in either stretched consumer budgets or the potential for price-sensitive customers to cease buying broadband altogether." The FCC stated that the increase was required under provisions of the 2016 Lifeline Order. In its November 2019 decision, the FCC retained the existing subsidy level for broadband service and increased the monthly data minimums from 2 gigabytes to 3 gigabytesâa reduction from the 8.75 gigabyte minimum originally proposed. Outreach and Education Programs The federal government has supported numerous broadband-related outreach and education activities over the years, typically as part of broad-ranging development grant programs focused primarily on housing and education. Agencies providing grant support of this type include the Departments of Education, Housing and Urban Development, and Commerce, as well as the National Science Foundation and several regional development commissions. The Broadband Technology Opportunities Program (BTOP) is an exception to this pattern, as it includes dedicated funding for broadband adoption programs. The American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ) provided approximately $4 billion for BTOP, to be administered by the National Telecommunications and Information Agency (NTIA, an agency of the Department of Commerce) as a program including broadband infrastructure grants, grants for expanding public computer capacity, and grants to encourage sustainable adoption of broadband service. As of August 2015, BTOP had awarded $3.48 billion for infrastructure buildout, $201 million for public computer centers, and $250.7 million for sustainable broadband adoption. Most BTOP funds have been expended, but NTIA continues to monitor existing grants. A 2015 Government Accountability Office (GAO) report found that affordability, lack of perceived relevance, and lack of computer skills are the "principal barriers" to broadband adoption. It identified outreach and training, along with discounts, as "key approaches" to addressing those barriers. Regarding BTOP, it noted, "NTIA compiled and published self-reported information from its BTOP grantees about best practices, but has not assessed the effectiveness of these approaches in addressing adoption barriers." In a response to the GAO, the Deputy Secretary of Commerce wrote that grant recipients were individually responsible for program design and assessments of program effectiveness. Support to Community Anchor Institutions The FCC's E-Rate (Schools and Libraries) Program under the USF provides discounts of up to 90% for broadband to and within public and private elementary and secondary schools and public libraries in both rural and nonrural areas. Some have suggested that broadband non-adopters may be more likely to subscribe to at-home service if they gain experience using the internet and become more aware of the benefits it can provide in finding employment, accessing educational resources, and interacting with government agencies, among other uses. However, a 2015 study found that "counties with libraries that aggressively increased their number of Internet-accessible computers between 2008 and 2012 did not see measurably higher increases in their rates of residential broadband adoption." Telemedicine and Telehealth The USDA's Distance Learning and Telemedicine (DLT) grants fund end-user equipment and broadband facilities to help rural communities use telecommunications to "link teachers and medical service providers in one area to students and patients in another." DLT grants serve as initial capital for purchasing equipment and software that operate via telecommunications to rural end-users of telemedicine and distance learning. Eligible applicants include most entities in rural areas that provide education or health care through telecommunications, including most state and local governmental entities, federally recognized tribes, nonprofits, for-profit businesses, and consortia of eligible entities. The FCC Rural Health Care Program provides similar benefits to eligible public and nonprofit health care providers in rural areas. Additionally, providers may receive a 65% discount on the costs of broadband service (if available) or a discount equal to the urban-rural broadband service price differential. This program does not address the issue of household connectivity with providers. The effect that support for the emerging telehealth sector has on rural demand for broadband service is unclear. Rural counties with the least access to medical care typically also have the least access to broadband internet. The demographic profiles typical of these locations are associated with both lower broadband adoption and lower rates of health insurance coverage, so broadband buildout there might or might not lead to substantially greater telehealth use. A 2018 USDA study on rural telehealth, conducted by the agency's Economic Research Service, found that rural residents were significantly less likely to use telehealth services than urban residents were, even when broadband availability was not a factor. The study measured usage across three categories: online health research; online health maintenance; and online health monitoring. According to the study, a usage gap between rural and urban patients existed across all three categories. Usage rates appeared to track closely with cost. The highest usage rates were for online health research that costs little and can be conducted anywhere that has basic internet access. According to the study, "Lack of Internet service in the home, whether by choice or due to lack of availability, did not deter everyone from conducting online health research." The study also found that existing rural connectivity was sufficient for most health maintenance activities, but "the issue of acceptance and/or remuneration levels by the health insurance industry and government health support programsâand not technologyâ[was] cited as an impediment to implementation." Online health monitoringâthe most expensive telehealth service categoryâwas also the least used. "As online monitoring was costly, the results largely reflect who had or did not have health insurance." Some industry groups have argued that subsidized buildout of higher speed broadband will enable the use of new applications, which may promote telehealth use. NTCA, which represents rural broadband providers, commented in 2019, "The capabilities and promise of telemedicine are as unlimited as other applications and technology that are evolving to take full advantage of broadband capabilities." These may include use of virtual and augmented reality applications, embedded devices, and wearables, technologies that depend on high-speed fiber-based broadband networks, according to NTCA. Likewise, some advocacy groups and researchers highlight regulatory issues, such as varying state regulations for Medicaid reimbursement, which they claim may hinder development of the market for telehealth services. Precision Agriculture Section 12511 of the Agriculture Improvement Act of 2018, commonly known as the 2018 farm bill ( P.L. 115-334 ), established the Task Force for Reviewing the Connectivity and Technology Needs of Precision Agriculture in the United States. The FCC announced the creation of this congressionally mandated task force on June 17, 2019. The task force plans to "develop policy recommendations to promote the rapid, expanded deployment of broadband Internet access service on unserved agricultural land," in consultation with the Secretary of Agriculture. However, the USDA has noted that adoption of precision agriculture methods by the farm community "has been hesitant and weak," especially among smaller producers, because of concerns over upfront costs, uncertain economic returns, and technological complexity. In addition to the interagency task force, the 2018 farm bill authorizes several initiatives to fund research and development on precision agriculture. It also modifies prioritization criteria for USDA broadband loans and grants to include precision agriculture activities. However, these provisions do not directly address end-user affordability issues. Options for Congress Promoting universal access to broadband has generally enjoyed wide bipartisan support in Congress. Despite federal support for broadband infrastructure buildout, however, adoption continues to lag in rural areas, even where the infrastructure exists and service is available. In turn, low adoption rates may lower the private sector's incentive to invest in nascent rural broadband markets, despite federal subsidies for high-cost service. This section highlights selected options Congress could consider as it addresses rural broadband demand issues. Oversight or Legislation Addressing the Lifeline Program In the Lifeline program, intended to address broadband affordability for low-income households, FCC changes to provider eligibility rules and minimum service requirements have prompted considerable debate (see " End-User Subsidies "). The FCC has wide latitude to set program rules, subject to the established rulemaking process. Congress might continue its oversight of that rulemaking process or might choose in some cases to direct FCC actions through legislation. Issues of potential interest include beneficiary eligibility requirements, beneficiary eligibility verification procedures, the level of the benefit (currently $9.25 per household, with additional benefits for beneficiaries who reside on tribal lands), ISP eligibility requirements, ISP minimum service requirements, and how oversight authorities are shared between the federal government and the states. Research on How the Costs of Broadband-Enabled Services Affect Rural Broadband Demand In addition to the direct cost of broadband connectivity, cost barriers may reduce the attractiveness of broadband-related services that might otherwise stimulate rural broadband demand. For example, access to affordable health insurance may be one factor affecting the affordability, and hence adoption, of telehealth services (see " Telemedicine and Telehealth "). Similarly, the upfront costs of sensors and other technology may be slowing the adoption of precision agriculture practices (see " Precision Agriculture "). Congress might consider mandating further research on the extent to which these factors influence broadband demand, and how such barriers could be overcome. Broadband-Focused Education and Outreach Grants With the exception of BTOP, most federal support for broadband-related education and outreach activities has been through housing and education grant programs that include internet and computer skills among numerous other eligible funding categories (see " Outreach and Education Programs "). Grant recipients typically expend the majority of funds on the non-broadband-related categories, which may be considered more central to housing development and education goals. Congress might consider whether a focused grant program or programs specifically designated for support of broadband-enabled applications would be more effective, and if so, how lessons from BTOP might be applied to program design and implementation. In addition to general internet and computer skills, Congress might consider including broadband-enabled applications in such an education and outreach program. Rural adoption of precision agriculture practices may be stymied if the benefits are not fully understood or if familiarity with the technology is lacking. Rural small businesses often do not make full use of broadband technology, even when adequate connectivity is available (see " Valuation of Broadband Service "). Even farmers and small rural business owners who can afford broadband service might benefit from education on the use of web-based applications to improve their operations or on how to calculate long-term benefits more accurately. Rural use of telehealth services might increase if potential users were more aware of the health and convenience benefits offered by emerging applications. Incentivizing Adoption via the Terms of Federal Infrastructure Buildout Programs The RUS and USF programs that support broadband infrastructure buildout (see " Major USDA and FCC Broadband Programs ") rely on private-sector broadband providers for on-the-ground deployment. Therefore, the conditions of federal support need to be sufficiently attractive in business terms to elicit participation from the private sector. At the same time, taxpayer or ratepayer value-for-money is also a policy concern that becomes especially salient if wide scale broadband adoption does not follow subsidized buildout. Under current RUS program rules, award recipients must demonstrate the economic viability of proposed projects. However, scoring criteria heavily favor applicants proposing to build out infrastructure in the most remote, underserved areas, which are least likely to present a strong business case. Some in Congress have expressed concern about RUS loan subscription rates (see " Federal Programs' Consideration of Market Demand When Awarding Funds for Broadband Infrastructure Buildout "). Through legislation or enhanced oversight of RUS program rules, Congress might seek to change end-user subsidy programs to improve the business case for buildout projects, or to adjust program rules in other ways to mitigate disincentives for investment. Under current USF program rules, participating broadband providers have limited responsibility to develop the demand side of local broadband markets. They are only responsible for ensuring availability of service at a given speed and latency benchmark, and advertising it within a designated service area. There is no other requirement for broadband providers to develop their subscriber base or otherwise promote adoption. The FCC included requests for comments on this issue in its 2019 proposal for the RDOF program. Congress might consider legislation or oversight to effect changes in program rules that would incentivize ISP investments in broadband adoption. For example, under current FCC rules, the term of support for High Cost program subsidies is 10 years; Congress might consider directing the FCC to lengthen or shorten this term to adjust ISP business incentives. Oversight of FCC Section 706 Process Finally, broadband speed benchmarks and other service quality metrics are frequently debated as part of the congressionally mandated requirement for the FCC to assess deployment of communications technology under Section 706 of the Telecommunications Act (see " FCC Service Benchmarks and Market Demand for Higher Speeds "). Higher service quality requirements may boost American technological leadership and ensure that citizens can use high-bandwidth internet applications, but they may also impose costs on broadband providers and lead to higher costs for customersâpricing some of them out of the market. Congress may consider the costs and benefits of proposed service requirements, and how such requirements might affect rural broadband adoption, when exercising oversight of the FCC's Section 706 responsibilities. Summary:	null	96	58,732	58,734	58,734	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Congress has a long-standing interest in ensuring access to broadband internet service in rural areas. Federal subsidies underwritten by taxes and long-distance telephone subscriber fees have injected billions of dollars into rural broadband markets over a period of decadesâmostly on the supply sideâin the form of grants, loans, and direct support to broadband providers. As of 2019, more than 20 million Americans still lacked broadband access. According to many stakeholders and policy experts, federal spending on broadband expansion has not adequately accounted for local conditions in rural areas that depress effective demand for broadband. Lower demand in rural areas may discourage private-sector investment and reduce the effectiveness of federal efforts to expand and improve broadband service. According to the authors of a 2015 study on rural broadband expansion, "While the vast majority of federal programs dealing with broadband have focused on the provision of infrastructure, many economists and others involved in the debate have argued that the emphasis should instead be on increasing demand in the areas that are lagging behind." The study found that rural households' broadband adoption rate lagged that of urban households by 12-13 percentage points and that while 38% of the rural-urban "broadband gap" in 2011 was attributable to lack of necessary infrastructure, 52% was attributable to lower adoption rates. "Implicit in many supply-side arguments is an assumption that demand-side issues will resolve themselves once there is ample supply of cheap and ultra-fast broadband," wrote the directors of the Advanced Communications Law & Policy Institute (ACLP) in a public comment to the Commerce Department's Broadband Opportunity Council in 2015. "Though appealing, this reductive causeâandâeffect has been questioned by social scientists, researchers, practitioners, and others who have worked to identify and better understand the complex mechanics associated with broadband adoption across key demographics and in key sectors." The geographic and demographic distribution of rural broadband demand is uneven. There is unmet demand in some rural areas. In others, even where there is access, that may not translate into widespread adoption. Observers cite a range of factors. On average, rural areas are less wealthy than urbanized areas, and have older populations with lower educational attainmentâfactors which negatively correlate with demand for broadband service. Related barriers to adoption, such as lower perceived value, affordability, computer ownership, and computer literacy, have persisted over many years. Rural areas with relatively favorable geography and demographics may attract significant investment in broadband service, but even subsidies may fail to spur buildout in less-attractive rural markets. This report complements separate CRS analyses of major federal subsidy programs on the supply side of the market by providing an analysis of demand-side issues at the nexus of infrastructure buildout and adoption. It focuses exclusively on demand for fixed broadband among rural households and small businesses. It does not address the role of schools, healthcare facilities, public libraries, and other "community anchor institutions" as end users of broadband. However, it does include discussion of the role schools and libraries play as providers of broadband service and training to rural residents who may lack home access to the internet, and how this may affect overall household adoption behavior. It also includes discussion of broadband-enabled services, such as telemedicine and precision agriculture, which may incentivize more rural households and small businesses to adopt broadband service. The report begins with a discussion of the rural broadband marketâspecifically, the characteristics of demand in rural households and small businesses, and how these affect private-sector infrastructure investments. It then provides a survey of federal broadband programs and policies designed to spur broadband buildout and adoption, with a discussion of how demand-side issues may impede achievement of these goals. It concludes with a discussion of selected options for Congress. The Rural Broadband Market According to the U.S. Census Bureau, 60 million Americans, or 19.3% of the total population, live in rural areas, defined as "all population, housing, and territory not included within an urbanized area or urban cluster." As of 2010, urbanized areas and urban clusters occupied about 3% of the U.S. land mass, yet contained more than 80% of the U.S. population. As a result, fixed broadband network infrastructure, which largely relies on wireline connections to the physical addresses of subscribers, is geographically concentrated. Urban areas have benefited from this concentration, especially areas with favorable geographic locations and economic conditions. For example, the City of Huntington Beach, CA, charges broadband providers rent for access to its utility polesâ$2,000 per pole per yearâand leases access to city-owned fiber-optic cable (fiber) infrastructure. "We continue to have a lot of carriers wanting to site on our poles in our downtown area which is next to the beach," a city official said during a 2019 webinar, noting that other, less favorably located cities had not been able to duplicate Huntington Beach's development model. "[An] inland city is not going to get what we get here on the coast." In contrast, in many rural areas, the cost of providing broadband service may approachâor even exceedâthe predicted return on investment. Broadband providers may not be willing to serve these areas without support from direct government subsidies, grants, or loans. Local conditions in rural areas vary widely, though. Some rural markets may be relatively attractive on commercial terms, because of unique characteristics such as the presence of post-secondary educational institutions or tourism attractions, relatively high levels of economic development and educational attainment, favorable demographics, or proximity to urban areas. Other rural markets that lack these characteristics are likely to be less commercially attractive. Long-term demographic trends suggest a growing bifurcation of the rural broadband market. According to a 2018 U.S. Department of Agriculture (USDA) analysis, rural areas have witnessed "declining unemployment, rising incomes, and declining poverty," as well as more favorable net migration rates since 2013. However, the analysis also found that "people moving to rural areas tend to persistently favor more densely settled rural areas with attractive scenic qualities, or those near large cities. Fewer are moving to sparsely settled, less scenic, and more remote locations, which compounds economic development challenges in those areas." For reasons that will be explained in more detail below, household and small business demand for broadband service is likely to be impacted in rural areas by demographic trends, geography, and economic context. As a result, these factors affect the infrastructure investment behavior of broadband providers, raising policy questions about the appropriate level of federal assistance and how it can be distributed most effectively and efficiently. The next three sections of this report discuss the adoption of broadband service by rural households and rural small businesses and the implications of market demand for private-sector investment in rural broadband infrastructure. Valuation of Broadband Service by Rural Households Adoption rates for broadband service are highly dependent on the valuation that households and small businesses place on internet access. Studies suggest that on average, valuation of internet accessâmeasured as willingness to pay for broadband serviceâis lower for rural households than for urban households. Knowledge of computers, computer ownership, and perceived relevance of the internetâall of which affect consumer valuationâtend to be lower among older, less educated, and less wealthy households. Because rural households tend to be older, less educated, and less wealthy than their urban counterparts, their willingness to pay for broadband also tends to be lower. Not all households are the same, of course. A substantial number of low-income households do not subscribe to broadband service even when it is offered to them at no cost, indicating a valuation of zero. At the same time, many reports indicate that some rural residents are willing go to extensive lengths to access the internet for tasks they view as essential, even if broadband service is not available at their home or business. The relatively lower proportion of potential subscribers in rural areas who are both highly motivated to adopt broadband and are able to pay for it complicates the business case. A 2010 study, based on a report commissioned by the Federal Communications Commission (FCC), found that survey respondents were, on average, willing to pay an extra $45 per month for "fast" speeds adequate for music, photo sharing, and videos. However, on average, respondents were only willing to pay an extra $48âa difference of $3âfor "very fast" speeds adequate for gaming, large file transfers, and high-definition movies. Households that already had relatively high speed broadband were generally willing to pay more than average for very fast service. While consumer expectations have certainly evolved over the past decade, the 2010 study's findings are broadly consistent with those of subsequent studies: most consumers, regardless of where they reside, value basic internet access at speeds adequate for everyday use, but only a relative few are willing to pay substantially more for very high speeds. Members of the latter group generally have higher levels of broadband connectivity than others, and belong to relatively wealthier, better-educated demographic groups. The FCC sponsored a series of field experiments, beginning in 2012, to gain better understanding of broadband demand among low-income households. The goal of these experiments was to inform administration of the federal Lifeline program, which subsidizes voice and broadband service charges for qualifying low-income consumers. A 2015 report on a field experiment conducted in West Virginia and eastern Ohio found that Lifeline-eligible non-subscribers in that region were overwhelmingly willing to pay $3 more per month to move from bottom-tier speeds (1 megabits-per-second (Mbps), offered at $31.99 per month) to moderate broadband speeds (6 Mbps, offered at $34.99 per month). However, only one out of 118 participants was willing to pay $44.99 per monthâan extra $10âto double their maximum download speed from 6 to 12 Mbps. The Lifeline program itself has long been undersubscribed, despite the fact that it frequently reduces consumer out-of-pocket costs to zero (see text box above, "Why Is the Lifeline Program Undersubscribed?"). A 2014 study, based on a survey funded by the Department of Commerce of 15,000 non-adopting households at all income levels, found that approximately two-thirds of respondents would not consider adopting broadband at any price, and that non-adopters were disproportionately rural (36% of non-adopters lived in rural areas, as compared to 19.3% of all Americans). The remaining one-third of respondents voiced interest in broadband adoption. Rural respondents were more likely to belong to this group than their urban counterparts, despite making up a disproportionately large share of non-adopters overall. These respondents most commonly identified price and availability as the main barriers to adoption. The study authors estimated that achieving a 10% increase in subscribership among members of the group who reported price as a factor in their decision would require an average price decrease of 15%. A 2012 study of broadband usage among Kentucky farmers broadly tracks with other studies that show a higher propensity for broadband adoption among younger, better educated, higher earning, business-oriented households with experience using the internet, regardless of location. The study found that a representative 45-year-old producer earning more than $50,000 on a 750 acre farm, who had experience using the internet but did not have broadband access, was willing to pay $171.42 as a hypothetical one-time property tax payment to support buildout of the necessary local infrastructure to provide broadband access to area farms. On the other end of the spectrum, a representative 63-year-old producer with a 250 acre farm earning less than $50,000, who had not subscribed to broadband service even when it was available, was willing to pay a one-time payment of just 20 cents to support broadband infrastructure improvements. The average age of survey respondents was 59.2 years. The Kentucky Department of Agriculture reported in 2019 that the demographic profile of Kentucky farmers is shifting, including a larger number of younger producers. This demographic shift may lead to increased demand for broadband service expansion and improvements in the rural areas of Kentucky where it is most pronounced. Given that demographic trends vary at the local level, though, they will likely not affect broadband market development equally in all parts of the state. Valuation of Broadband Service by Rural Small Businesses Small businesses are generally more likely than residential households to regard broadband internet access as essential. However, within the small business sector there are significant differences in willingness to pay for any given level of service. Businesses with relatively modest data requirements may elect not to upgrade to a higher tier of service if the expected productivity benefits are less than the expected subscription and equipment upgrade costs. A 2010 study sponsored by the Small Business Administration (SBA), in fulfilment of requirements of the Broadband Data Improvement Act ( P.L. 110-385 ), found that "broadband is central to U.S. small businesses in ways that it is not to individuals. The small business broadband adoption rate has increased to 90% as of the date of this survey (April 2010), compared to 74% of adults with broadband access in their homes.... " Surveys conducted for the SBA study showed that both rural and urban respondents viewed high-speed internet "as an essential service" that enabled them to "achieve strategic goals, improve competitiveness and efficiency, reach customers, and interact with vendors." However, the study found that non-agricultural rural businesses were significantly less likely to have their own website than their urban counterparts were. Likewise, they were less likely to be willing to pay substantially more for improved service, even though the study found that they rated the quality of service in rural areas lower than respondents in urban areas did. Most rural businesses surveyed indicated that they were not willing to pay 10% more for significantly improved service. Studies that are more recent have made similar findings. Although basic access to the internet in rural areas is much more widespread than it was a decade ago, usage practices of many small businesses do not appear to have changed significantly. Most appear to value basic internet access to support a few essential low-bandwidth functions, such as making the name and location of the business available on internet searches, but proportionately fewer appear to demand high-bandwidth advanced business applications. For example, a 2017 study comparing selected rural and urban areas of North Carolina found that many small rural businesses have no web presence beyond a listing in Google search results, and that more than half of those businesses that did have a web page used it solely to provide basic information about the business. "Overall, small rural businesses are not using internet-based technology to support their businesses. While they may have broadband access, their use of websites, e-commerce and social media is limited, and it is significantly lower than small urban businesses," the study authors wrote. Apparently, small businesses find internet access useful, but many do not use applications requiring high bandwidth. It is not clear from these results what immediate benefits would be provided to non-intensive business users in remote rural areas by improvements in broadband service speed and quality. However, broadband advocacy groups have suggested that emerging new applications and encouraging small businesses to adopt more sophisticated web development strategies may increase demand for improved service over time. Other studies indicate that the type and location of business activity may have a significant influence on demand for higher-speed broadband. The businesses covered in the North Carolina study were, by and large, small retail establishments in isolated rural areas. Businesses in "intermediate" exurban locales that work in healthcare or knowledge-intensive sectors are more likely to use high-bandwidth applications, according to one study. For example, a survey of local businesses by the Central Coast Broadband Consortium, a nonprofit representing independent broadband providers serving the greater Monterey Bay area, found that business respondents had significant data and file transfer needs. The area surveyed includes many sparsely populated rural areas with difficult terrain, but it is also home to significant tourist destinations, large agriculture enterprises, and a University of California campus, and its northern boundary extends to the exurbs of San Jose, one of the most highly developed technology hubs in the nation. Market Demand and Private-Sector Investment Observers often comment that rural broadband markets are hyper-localâthat is, that conditions affecting broadband deployment and adoption vary widely from one area to the next. Historically, investments in broadband infrastructure have tended to cluster in areas with lower risk and potentially higher returns. Broadband providers may view investment in rural markets with little history of internet usage as a high-risk endeavor. Subsidies may lower financial risk to broadband providers, but do not change their basic preference for low-risk, high-return projects, which guides private sector investment in expansion of broadband service. In a 2019 report, Merit Network, Inc., a nonprofit corporation owned and governed by Michigan's public universities, highlighted the business challenges faced by broadband providers in nascent rural broadband markets. According to the report, "Despite the significant qualitative benefits that a broadband project may bring, depending on the method of financing, it is critical to accurately estimate adoption rates and build a solid financial model to ensure that adequate revenue will be achieved to repay any loan obligations, maintain ongoing operations and fund depreciation of capital equipment." "Even if rural areas are profitable for telecommunications companies, urban areas offer still higher returns on investment. This makes rural areas less attractive markets and perpetuates the urban focus of market decisions," according to the authors of one academic study. "The market for telecommunications shows that a free-market rationale can ensure an efficient use of limited resources, i.e. using the resources for profitable markets in high-density areas, but it cannot ensure an equal delivery of services in all areas, leaving the rural underserved." A 2019 report from the Arkansas governor's office stated that low broadband adoption rates "have consistently been a primary barrier to investment by the provider community." Noting that age affects adoption rates, the report concluded that "increased adoption within [the older] demographic has the potential to strengthen the business case for broadband deployment." The Arkansas report also highlighted low statewide enrollment in the Lifeline program as a barrier to investment. The FCC estimates that the Lifeline enrollment rate was 18% for Arkansas in 2018. The Arkansas report found that "raising adoption rates [of the Lifeline program] could also strengthen the business case for private companies to invest in broadband infrastructure, resulting in better internet access for both poor and non-poor Arkansans.... " Studies elsewhere have found a similar relationship between demand and investment. For example, in a 2015 report on its broadband expansion projects, the Appalachian Regional Commission, which serves 13 Appalachian states, found that "broadband internet service providers [are] less likely to provide services in sparsely populated areas because it initially has a lower return on investment and is less cost-effective." Federal Programs and Policies Federal programs and policies play a significant role in the development of rural broadband markets, given their often-challenging economics. In 2018, USDA and the FCC spent a combined $9.1 billion on broadband programs, largely in rural areas (see Figure 1 ). The following four sections discuss the major USDA and FCC broadband programs, rural considerations for the FCC's broadband speed benchmarks, demand factors in awarding federal funds for broadband infrastructure buildout, and selected federal broadband adoption programs that may influence rural demand. Major USDA and FCC Broadband Programs There are two major sources of federal funding for broadband in rural areas: the broadband and telecommunications programs of the USDA's Rural Utilities Service (RUS) and the Universal Service Fund (USF) programs of the FCC. Most of these programs focus on the supply side, targeting infrastructure deployment, but they also include some affordability initiatives that offer limited discounts on broadband subscription costs to low-income households, certain rural healthcare providers, and schools. Rural Utilities Service Programs34 The RUS houses three ongoing assistance programs exclusively dedicated to financing broadband deployment: the Rural Broadband Access Loan and Loan Guarantee Program, the Community Connect Grant Program, and the ReConnect Program. The primary legislative authority for the Rural Broadband Access Loan and Loan Guarantee Program, and the Community Connect Grant Program, derives from the Rural Electrification Act of 1936, which Congress subsequently amended in various farm bills to support broadband buildout in rural areas. Section 6103 of the Farm Security and Rural Investment Act of 2002 ( P.L. 107-171 ) amended the Rural Electrification Act of 1936 to authorize the Rural Broadband Access Loan and Loan Guarantee Program to provide funds for the costs of the construction, improvement, and acquisition of facilities and equipment for broadband service in eligible rural communities. The 2018 farm bill ( P.L. 115-334 , Agriculture Improvement Act of 2018) authorized a grant componentâthe Community Connect programâin combination with the broadband loan program. This provision increased the annual authorization level from $25 million to $350 million, raising the proposed service area eligibility threshold of unserved households from 15% to 50% for broadband loans; authorizing grants, loans, and loan guarantees for middle mile infrastructure; directing improved federal agency broadband program coordination; and providing eligible applicants with technical assistance and training to prepare applications. Congress authorized the ReConnect Program separately through the annual appropriations process, funding it at $600 million through the Consolidated Appropriations Act of 2018 ( P.L. 115-141 ). The ReConnect Program includes both loans and grants to promote broadband deployment in rural areas where 90% of households do not have sufficient access to broadband at 10 Mbps/1 Mbps. Two additional programs also support broadband deployment in rural areas. The Telecommunications Infrastructure Loan and Loan Guarantee Program (previously the Telephone Loan Program) is similar in purpose to the Rural Broadband Access Loan and Loan Guarantee Program, but eligibility requirements are tailored to support deployment in areas with extremely low population densities. Distance Learning and Telemedicine (DLT) grantsâwhile not principally supporting connectivityâfund equipment and software that operate via telecommunications to rural end-users of telemedicine and distance learning applications. Congress funds RUS programs through annual appropriations. For FY2019, the Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) provided $5.83 million to subsidize a Rural Broadband Access loan level of $29.851 million; $30 million for Community Connect broadband grants; $550 million for the ReConnect Program (in addition to $600 million provided for that program in FY2018); $1.725 million to subsidize a total loan level of $690 million for the Telecommunications Infrastructure Loan and Loan Guarantee Program; and $47 million for DLT grants. Universal Service Fund Programs37 The FCC established the USF in 1997 to meet objectives and principles established by the Telecommunications Act of 1996 ( P.L. 104-104 ). The Universal Service Administrative Company (USAC), an independent not-for-profit organization, administers the USF under FCC direction. USF programs are not funded via annual appropriations, but rather from fees the FCC receives from telecommunications carriers that provide interstate service. The FCC has discretion to spend these fees without congressional appropriations. FCC supply-side support for broadband infrastructure, primarily through the USF High Cost program, totaled nearly $14 billion from FY2016 through FY2018. The High Cost program includes several funds that support broadband infrastructure deployment and provide ongoing subsidies to keep the operation of telecommunications and broadband networks in high cost areas economically viable for broadband providers. These providers must meet deployment benchmarks and offer service at rates reasonably comparable with those offered in urban areas. The subsidy indirectly benefits households and businesses in cases where there is a significant urban-rural price differential by making below-market subscription rates available. The other USF programs are the Lifeline program, which directly supports low-income households by subsidizing affordable or no-cost monthly broadband plans, and the Schools and Libraries program and Rural Health Care program, which pay for local network equipment purchases and some broadband subscription costs for eligible schools, libraries, and health care facilities. Broadband Provider Discretion Broadband providers have wide discretion in howâand whetherâthey choose to participate in these programs. Although the federal government imposes certain conditions on its subsidies, grants, and loans to broadband providers, it does not make participation compulsory. Even in subsidized markets, broadband provider investment behavior is conditioned to a greater or lesser degree by demand, predicted adoption rates, and anticipated return on investment. The federal government mayâwithin the existing legislative frameworkâadjust the structure and funding levels of its major funding programs to encourage private-sector investment in rural areas that supports its policy goals. FCC Service Benchmarks and Market Demand for Higher Speeds The FCC changes its definition of broadband service as technologies, user expectations, and markets evolve. It reviews its data speed benchmarks on an annual basis, and its decisions have regulatory implications that may affect private-sector investment decisions in rural areas. The degree to which these benchmarks should be aspirational or reflect current market demand is a topic of frequent debate in policy circles. Assessment of demand and its likely development over time informs many of these debates. Section 706 of the Telecommunications Act of 1996 ( P.L. 104-104 ; the Telecommunications Act) requires the FCC to report yearly on whether "advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion." The act does not specifically define advanced telecommunications capability, delegating this determination to the FCC. It directs the FCC to "take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market" if its determination is negative. Since 1999, there have been 11 Section 706 reports, each providing a snapshot and assessment of broadband deployment. As part of this assessment, and to help determine whether broadband is being deployed in "a reasonable and timely fashion," the FCC has established minimum data speeds that qualify as broadband service for the purposes of the Section 706 determination. In 2015, citing changing broadband usage patterns and multiple devices using broadband within single households, the FCC raised its minimum fixed broadband benchmark speed from 4 megabits-per-second (Mbps) (download)/1 Mbps (upload) to 25 Mbps/3 Mbps. The 25/3 Mbps threshold is meaningful in both technical and policy terms, because the legacy copper-based connections utilized by some broadband providers would likely require significant upgrades in order to meet higher thresholds. While fiber-based "middle-mile" cable has been broadly deployed over the last two decades, "fiber-to-the-home" installations that enable faster speeds are much less widespread, especially in remote rural areas. Increases in minimum speed thresholds have frequently engendered policy debates about the regulatory role of the FCC and how best to allocate limited resources for broadband expansion. Stakeholders in both the public and private sectors have frequently raised the issue of market demand for improved service when justifying their positions on the FCC's annual Section 706 determinations. During the Obama Administration, FCC leadership justified increases in service speed thresholds as necessary to ensure that broadband infrastructure kept pace with changes in consumer behavior and the increasing number of bandwidth-hungry electronic devices and applications. "Application and service providers, consumers, and the broadband providers are all pointing to 25/3 as the new standard," wrote then-Chairman Tom Wheeler when commenting on the agency's 2015 progress report. "Content providers are increasingly offering high-quality video online, which uses a lot of bandwidth and could use a lot more as 4K video emerges." Opponents argued that demand does not justify investments in faster service that requires costly fiber-optic installations. Two FCC commissioners then serving released dissenting statements, citing tepid demand for faster broadband service as a reason to refrain from mandating higher speeds. Some criticized the FCC for subsidizing infrastructure buildout under one standard, which was then superseded by a new higher standardâin effect designating newly built-out areas as unserved. Commissioner Ajit Pai wrote, "The driving factor in defining broadband should be consumer preference.... 71% of consumers who can purchase fixed 25 Mbps serviceâover 70 million householdsâchoose not to." As FCC Chairman since 2017, Pai has retained the 25/3 Mbps standard as sufficient to meet the Telecommunications Act requirement for the FCC to ensure availability of advanced telecommunications capabilities. In public comments submitted for the 2019 FCC progress report, some large broadband providers and associated trade and public policy groups expressed concerns that any increase of speed requirements beyond the existing 25/3 Mbps standard would impose unnecessary burdens on providers based on predicted cost and market demand. "The Commission should not change benchmarks based on aspirations that do not reflect widespread consumer demand and that are not grounded in the text of Section 706," wrote the Free State Foundation. "Instead, Section 706 implies a realistic analysis that takes stock of actual market data regarding deployment of infrastructure and the availability of advanced capabilities that a substantial majority or at least an early majority of consumers subscribe to." By contrast, rural co-ops and other independent broadband providers have tended to argue (directly or through trade associations) for a higher speed benchmark, which would lead to federal subsidization of higher-speed service. In a 2018 letter to a Member of Congress, the manager of an Iowa electric co-op wrote, "Broadband systems funded with limited federal funds should meet the growing speed and data consumption needs of today and into the future.... [Congress] should recognize that in today's 21 st century economy, broadband systems built to 10/1 or slower speeds cannot support a modern household much less attract and retain new businesses." Trade organizations with memberships that include a cross-section of companies by size, corporate structure, and technology type have generally avoided discussing speed benchmarks in their submitted comments, focusing instead on other issues, such as substitutability of mobile broadband for fixed broadband. FCC data released as part of the 2019 progress report indicated that 25.3% of households in the nation's least rural counties where service was available had adopted 100/10 Mbps broadbandâmore than double the 9.9% adoption rate in the nation's most rural counties (see Figure 2 ). The same data indicated higher overall adoption of the current standard of 25/3 Mbps, with a 57.7% adoption in the least rural counties and 23.1% in the most rural. Some recent state and regional reports have questioned whether market demand justifies government-subsidized investment in higher speed broadband in all cases. "There is an ongoing, multifaceted debate about whether, where, and when the performance advantages of fiber justify the investment in upgrading communications networks," according to the Arkansas Development Finance Authority. "Most uses of the internet today do not require the capacity and speed that fiber internet offers, and internet service providers who deploy fiber don't necessarily experience strong demand for the upgraded service." According to an April 2019 report from the Southeastern Indiana Regional Planning Commission, "Some providers argue that even when broadband is available, customers do not subscribe as expected." The authors argued for energetic measures to promote broadband affordability and adoption as a remedy. Federal Programs' Consideration of Market Demand When Awarding Funds for Broadband Infrastructure Buildout The primary purpose of the RUS and USF High Cost programs is to support expansion of broadband availability in unserved or underserved areas, rather than to promote broadband adoption. Funding under these programs has typically been awarded based on ISP commitments to making a certain level of service available to a certain number of eligible households and businesses within a certain period of time. However, there are some important differences. The RUS programs include loans, which recipients must repay. Applicants for funding under the Rural Broadband Access Loan program are required to complete and submit a financial forecast to demonstrate that they can repay the loan, and that the proposed project "is financially feasible and sustainable." The forecast must includeâwith few exceptionsâa market survey that describes service packages and rates, and provides the number of existing and proposed subscribers. This requirement may incentivize recipients to encourage adoption in their service areas in order to increase revenues that they can then use for loan repayment. At the same time, it may also deter providers from accepting loans to serve areas where the business case for deployment is particularly difficult. Perhaps because of disincentives for investment in unattractive markets, RUS selection criteria and loan terms prioritize buildout to unserved or underserved areas over subscription rates or other business performance metrics. According to the application guide, "Priority must be given to applicants that propose to offer broadband service to the greatest proportion of households that, prior to the provision of the broadband service, had no incumbent service provider." Program administrators prioritize projects according to four tiers, which range from 25% to 100% of households unserved. The standard loan term is 3 years, but applicants can request up to a 35-year repayment term and a principal deferral period of up to 4 years if at least 50% of the households in the proposed service area are unserved. The RUS ReConnect program has similar goals, but also includes grants and loan-grant combinations. Applicants can likewise request more generous loan terms if they plan to serve a Substantially Underserved Trust Area (typically tribal lands), and their application may be granted priority status. Reviewers score applications against evaluation criteria using a points-based system. They award points for population density (less dense areas receiving preference), number of farms served, number of businesses served, number of educational facilities served, performance of the offered services, and other criteria. Neither projected business performance metrics nor adoption rates are included in the evaluation criteria. Under the High Cost program, federal subsidies are premised on the absence of a business case for broadband expansion. In announcing the latest proposed round of support, known as the Rural Digital Opportunity Fund (RDOF), the FCC stated that it would prioritize buildout in areas where "there is currently no private sector business case to deploy broadband without assistance." USF programs only require that participating broadband providers advertise the availability of broadband service within their service areas, and that the broadband provider be able to provide service at rates "reasonably comparable to rates offered in urban areas" to any area household within 10 business days if requested to do so. Census blocksâthe administrative-territorial unit used by the FCC to measure broadband coverageâare considered served if a local broadband provider meets these conditions. As with the RUS programs, the High Cost program has prioritized buildout and higher broadband performance over adoption. Phase I of the proposed RDOF program would prioritize support to broadband providers that serve "completely unserved areas" at higher data speeds, higher usage allowances, and lower latency, but sets no specific adoption benchmarks. The FCC expressed concerns in its RDOF proposal that recipients of support might lack any incentive to aggressively market their services or otherwise stimulate demand beyond relatively low-cost high-return areas, and might even take measures to limit subscription in order to protect profits. Since [RDOF] support may require certain providers to offer much higher data caps than they do to [non-RDOF] subscribers and price the services similarly, such providers may have an incentive to limit [RDOF] subscribers to sell their capacity to more profitable [non-RDOF] subscribers. Spectrum-based providers that do not have a network sufficient to serve most locations in a geographic area would also have an incentive to limit subscription if expanding capacity would be less profitable than limiting subscription and collecting [RDOF] subsidies based purely on deployment. Even wireline bidders may lack the proper incentives to serve additional customers in some areas, given that it may not be profitable without a per-subscriber payment to run wires from the street to the customer location and install customer premises equipment. Having expressed these concerns, the FCC put forward a proposal to introduce subscribership milestones for RDOF recipients. It requested comment on several different implementation options. One proposal would offer a baseline level of support to broadband providers and then add per-subscriber payments. Another would withhold a certain percentage of support if broadband providers failed to meet subscription milestones, although it raised the question of what milestones were appropriate given "the unique challenges of serving rural areas." Eliciting private sector participation in rural broadband programs appears to be a concern for the FCC, just as it is for USDA. In its last round of USF funding support, FCC increased the term of support to broadband providers from 5 years to 10 years in order to gain "robust participation" in the program. Federal Programs That May Stimulate Broadband Demand A number of federal programs may stimulate demand for broadband in underserved areas, though this is not always their primary purpose. Such programs include end-user subsidies to reduce out-of-pocket costs for subscribers; education and outreach activities to promote digital awareness and skills; infrastructure-oriented programs that support community anchor institutions such as schools and libraries; and infrastructure-oriented programs supporting specific applications, such as telemedicine and precision agriculture. This section presents a non-exhaustive summary of these programs. End-User Subsidies The FCC's Lifeline program is the only major federal broadband program that directly targets broadband adoption by residential subscribers. It targets households earning less than 135% of the federal poverty level. Program enrollment rates vary widely by state, with a nationwide average of 28% of eligible beneficiaries. The program subsidizes enrollees to cover the recurring monthly service charges associated with broadband subscribership. Support is not given directly to the subscriber but to the subscriber-selected service provider. Although stimulating broadband demand is not an explicit purpose of the Lifeline program, expansion of Lifeline enrollment may improve the business case for broadband deployment in rural areas, which on average have a disproportionately high number of low-income residents. In many cases, facilities-based telecommunications providers sell excess capacity in areas they already serve to resellers, who then rebrand the service and market low-cost plans to eligible Lifeline beneficiaries. In 2017, the FCC proposed changes to the Lifeline program that would bar resellers from participation. Some in Congress claimed that these changes would reduce enrollment by 70% from current levels. In a further action, the proposed FCC update to Lifeline minimum service standards for 2019 raised concerns in some quarters that low-income subscribers would be priced out of the market by required upgrades. In a letter to the FCC, NTCAâThe Rural Broadband Association wrote that unless the FCC requirement is waived, "current Lifeline subscribers to fixed broadband service will be forced to upgrade to a higher speed tier than they may need, want, or have the ability to affordâresulting in either stretched consumer budgets or the potential for price-sensitive customers to cease buying broadband altogether." The FCC stated that the increase was required under provisions of the 2016 Lifeline Order. In its November 2019 decision, the FCC retained the existing subsidy level for broadband service and increased the monthly data minimums from 2 gigabytes to 3 gigabytesâa reduction from the 8.75 gigabyte minimum originally proposed. Outreach and Education Programs The federal government has supported numerous broadband-related outreach and education activities over the years, typically as part of broad-ranging development grant programs focused primarily on housing and education. Agencies providing grant support of this type include the Departments of Education, Housing and Urban Development, and Commerce, as well as the National Science Foundation and several regional development commissions. The Broadband Technology Opportunities Program (BTOP) is an exception to this pattern, as it includes dedicated funding for broadband adoption programs. The American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ) provided approximately $4 billion for BTOP, to be administered by the National Telecommunications and Information Agency (NTIA, an agency of the Department of Commerce) as a program including broadband infrastructure grants, grants for expanding public computer capacity, and grants to encourage sustainable adoption of broadband service. As of August 2015, BTOP had awarded $3.48 billion for infrastructure buildout, $201 million for public computer centers, and $250.7 million for sustainable broadband adoption. Most BTOP funds have been expended, but NTIA continues to monitor existing grants. A 2015 Government Accountability Office (GAO) report found that affordability, lack of perceived relevance, and lack of computer skills are the "principal barriers" to broadband adoption. It identified outreach and training, along with discounts, as "key approaches" to addressing those barriers. Regarding BTOP, it noted, "NTIA compiled and published self-reported information from its BTOP grantees about best practices, but has not assessed the effectiveness of these approaches in addressing adoption barriers." In a response to the GAO, the Deputy Secretary of Commerce wrote that grant recipients were individually responsible for program design and assessments of program effectiveness. Support to Community Anchor Institutions The FCC's E-Rate (Schools and Libraries) Program under the USF provides discounts of up to 90% for broadband to and within public and private elementary and secondary schools and public libraries in both rural and nonrural areas. Some have suggested that broadband non-adopters may be more likely to subscribe to at-home service if they gain experience using the internet and become more aware of the benefits it can provide in finding employment, accessing educational resources, and interacting with government agencies, among other uses. However, a 2015 study found that "counties with libraries that aggressively increased their number of Internet-accessible computers between 2008 and 2012 did not see measurably higher increases in their rates of residential broadband adoption." Telemedicine and Telehealth The USDA's Distance Learning and Telemedicine (DLT) grants fund end-user equipment and broadband facilities to help rural communities use telecommunications to "link teachers and medical service providers in one area to students and patients in another." DLT grants serve as initial capital for purchasing equipment and software that operate via telecommunications to rural end-users of telemedicine and distance learning. Eligible applicants include most entities in rural areas that provide education or health care through telecommunications, including most state and local governmental entities, federally recognized tribes, nonprofits, for-profit businesses, and consortia of eligible entities. The FCC Rural Health Care Program provides similar benefits to eligible public and nonprofit health care providers in rural areas. Additionally, providers may receive a 65% discount on the costs of broadband service (if available) or a discount equal to the urban-rural broadband service price differential. This program does not address the issue of household connectivity with providers. The effect that support for the emerging telehealth sector has on rural demand for broadband service is unclear. Rural counties with the least access to medical care typically also have the least access to broadband internet. The demographic profiles typical of these locations are associated with both lower broadband adoption and lower rates of health insurance coverage, so broadband buildout there might or might not lead to substantially greater telehealth use. A 2018 USDA study on rural telehealth, conducted by the agency's Economic Research Service, found that rural residents were significantly less likely to use telehealth services than urban residents were, even when broadband availability was not a factor. The study measured usage across three categories: online health research; online health maintenance; and online health monitoring. According to the study, a usage gap between rural and urban patients existed across all three categories. Usage rates appeared to track closely with cost. The highest usage rates were for online health research that costs little and can be conducted anywhere that has basic internet access. According to the study, "Lack of Internet service in the home, whether by choice or due to lack of availability, did not deter everyone from conducting online health research." The study also found that existing rural connectivity was sufficient for most health maintenance activities, but "the issue of acceptance and/or remuneration levels by the health insurance industry and government health support programsâand not technologyâ[was] cited as an impediment to implementation." Online health monitoringâthe most expensive telehealth service categoryâwas also the least used. "As online monitoring was costly, the results largely reflect who had or did not have health insurance." Some industry groups have argued that subsidized buildout of higher speed broadband will enable the use of new applications, which may promote telehealth use. NTCA, which represents rural broadband providers, commented in 2019, "The capabilities and promise of telemedicine are as unlimited as other applications and technology that are evolving to take full advantage of broadband capabilities." These may include use of virtual and augmented reality applications, embedded devices, and wearables, technologies that depend on high-speed fiber-based broadband networks, according to NTCA. Likewise, some advocacy groups and researchers highlight regulatory issues, such as varying state regulations for Medicaid reimbursement, which they claim may hinder development of the market for telehealth services. Precision Agriculture Section 12511 of the Agriculture Improvement Act of 2018, commonly known as the 2018 farm bill ( P.L. 115-334 ), established the Task Force for Reviewing the Connectivity and Technology Needs of Precision Agriculture in the United States. The FCC announced the creation of this congressionally mandated task force on June 17, 2019. The task force plans to "develop policy recommendations to promote the rapid, expanded deployment of broadband Internet access service on unserved agricultural land," in consultation with the Secretary of Agriculture. However, the USDA has noted that adoption of precision agriculture methods by the farm community "has been hesitant and weak," especially among smaller producers, because of concerns over upfront costs, uncertain economic returns, and technological complexity. In addition to the interagency task force, the 2018 farm bill authorizes several initiatives to fund research and development on precision agriculture. It also modifies prioritization criteria for USDA broadband loans and grants to include precision agriculture activities. However, these provisions do not directly address end-user affordability issues. Options for Congress Promoting universal access to broadband has generally enjoyed wide bipartisan support in Congress. Despite federal support for broadband infrastructure buildout, however, adoption continues to lag in rural areas, even where the infrastructure exists and service is available. In turn, low adoption rates may lower the private sector's incentive to invest in nascent rural broadband markets, despite federal subsidies for high-cost service. This section highlights selected options Congress could consider as it addresses rural broadband demand issues. Oversight or Legislation Addressing the Lifeline Program In the Lifeline program, intended to address broadband affordability for low-income households, FCC changes to provider eligibility rules and minimum service requirements have prompted considerable debate (see " End-User Subsidies "). The FCC has wide latitude to set program rules, subject to the established rulemaking process. Congress might continue its oversight of that rulemaking process or might choose in some cases to direct FCC actions through legislation. Issues of potential interest include beneficiary eligibility requirements, beneficiary eligibility verification procedures, the level of the benefit (currently $9.25 per household, with additional benefits for beneficiaries who reside on tribal lands), ISP eligibility requirements, ISP minimum service requirements, and how oversight authorities are shared between the federal government and the states. Research on How the Costs of Broadband-Enabled Services Affect Rural Broadband Demand In addition to the direct cost of broadband connectivity, cost barriers may reduce the attractiveness of broadband-related services that might otherwise stimulate rural broadband demand. For example, access to affordable health insurance may be one factor affecting the affordability, and hence adoption, of telehealth services (see " Telemedicine and Telehealth "). Similarly, the upfront costs of sensors and other technology may be slowing the adoption of precision agriculture practices (see " Precision Agriculture "). Congress might consider mandating further research on the extent to which these factors influence broadband demand, and how such barriers could be overcome. Broadband-Focused Education and Outreach Grants With the exception of BTOP, most federal support for broadband-related education and outreach activities has been through housing and education grant programs that include internet and computer skills among numerous other eligible funding categories (see " Outreach and Education Programs "). Grant recipients typically expend the majority of funds on the non-broadband-related categories, which may be considered more central to housing development and education goals. Congress might consider whether a focused grant program or programs specifically designated for support of broadband-enabled applications would be more effective, and if so, how lessons from BTOP might be applied to program design and implementation. In addition to general internet and computer skills, Congress might consider including broadband-enabled applications in such an education and outreach program. Rural adoption of precision agriculture practices may be stymied if the benefits are not fully understood or if familiarity with the technology is lacking. Rural small businesses often do not make full use of broadband technology, even when adequate connectivity is available (see " Valuation of Broadband Service "). Even farmers and small rural business owners who can afford broadband service might benefit from education on the use of web-based applications to improve their operations or on how to calculate long-term benefits more accurately. Rural use of telehealth services might increase if potential users were more aware of the health and convenience benefits offered by emerging applications. Incentivizing Adoption via the Terms of Federal Infrastructure Buildout Programs The RUS and USF programs that support broadband infrastructure buildout (see " Major USDA and FCC Broadband Programs ") rely on private-sector broadband providers for on-the-ground deployment. Therefore, the conditions of federal support need to be sufficiently attractive in business terms to elicit participation from the private sector. At the same time, taxpayer or ratepayer value-for-money is also a policy concern that becomes especially salient if wide scale broadband adoption does not follow subsidized buildout. Under current RUS program rules, award recipients must demonstrate the economic viability of proposed projects. However, scoring criteria heavily favor applicants proposing to build out infrastructure in the most remote, underserved areas, which are least likely to present a strong business case. Some in Congress have expressed concern about RUS loan subscription rates (see " Federal Programs' Consideration of Market Demand When Awarding Funds for Broadband Infrastructure Buildout "). Through legislation or enhanced oversight of RUS program rules, Congress might seek to change end-user subsidy programs to improve the business case for buildout projects, or to adjust program rules in other ways to mitigate disincentives for investment. Under current USF program rules, participating broadband providers have limited responsibility to develop the demand side of local broadband markets. They are only responsible for ensuring availability of service at a given speed and latency benchmark, and advertising it within a designated service area. There is no other requirement for broadband providers to develop their subscriber base or otherwise promote adoption. The FCC included requests for comments on this issue in its 2019 proposal for the RDOF program. Congress might consider legislation or oversight to effect changes in program rules that would incentivize ISP investments in broadband adoption. For example, under current FCC rules, the term of support for High Cost program subsidies is 10 years; Congress might consider directing the FCC to lengthen or shorten this term to adjust ISP business incentives. Oversight of FCC Section 706 Process Finally, broadband speed benchmarks and other service quality metrics are frequently debated as part of the congressionally mandated requirement for the FCC to assess deployment of communications technology under Section 706 of the Telecommunications Act (see " FCC Service Benchmarks and Market Demand for Higher Speeds "). Higher service quality requirements may boost American technological leadership and ensure that citizens can use high-bandwidth internet applications, but they may also impose costs on broadband providers and lead to higher costs for customersâpricing some of them out of the market. Congress may consider the costs and benefits of proposed service requirements, and how such requirements might affect rural broadband adoption, when exercising oversight of the FCC's Section 706 responsibilities.	Summary:	gov_report	1,024	null	78
crs_R45743	crs_R45743_0	You are given a report by a government agency. Write a one-page summary of the report. Report: T he Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) was enacted on February 15, 2019.This omnibus bill included appropriations for the U.S. Department of Agriculture (USDA), of which USDA's domestic food assistance is a part. Prior to its enactment, the government had continued to operate for the first six months of the fiscal year under continuing resolutions (CRs). USDA experienced a 35-day lapse in FY2019 funding and partial government shutdown prior to the enactment of the Further Additional Continuing Appropriations Act, 2019 ( P.L. 116-5 ), a continuing resolution enacted prior to the Omnibus bill. (See the Appendix .) This report focuses on USDA's domestic food assistance programs; their funding; and, in some instances, policy changes provided by the enacted FY2018 appropriations law. USDA's domestic food assistance programs include the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program), Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), and the child nutrition programs (such as the National School Lunch Program). The domestic food assistance funding is, for the most part, administered by USDA's Food and Nutrition Service (FNS). CRS Report R45230, Agriculture and Related Agencies: FY2019 Appropriations provides an overview of the entire FY2019 Agriculture and Related Agencies appropriations law as well as a review of the reported bills and CRs preceding its enactment. With its focus on appropriations, this report discusses programs' eligibility requirements and operations minimally. See CRS Report R42353, Domestic Food Assistance: Summary of Programs for more background. Overview of FY2019 USDA-FNS Funding Domestic food assistance—SNAP and child nutrition programs in the mandatory spending accounts, and WIC and other programs in the discretionary spending accounts—represents over two-thirds of the FY2018 Agriculture appropriations act ( Figure 1 ). The federal budget process treats discretionary and mandatory spending differently. Discretionary spending is controlled by annual appropriations acts and receives most of the attention during the appropriations process. The annual budget resolution process sets spending limits for discretionary appropriations. Agency operations (salaries and expenses) and many grant programs are discretionary. Mandatory spending —though carried in the appropriation—is controlled by budget rules during the authorization process. Appropriations acts then provide funding to match the parameters required by the mandatory programs' authorizing laws. For the domestic food assistance programs, these laws are typically reauthorized in farm bill and child nutrition reauthorizations. Domestic food assistance funding ( Table 1 ) largely consists of open-ended, appropriated mandatory programs—that is, it varies with program participation (and in some cases inflation) under the terms of the underlying authorization law. The largest mandatory programs include SNAP and the child nutrition programs (including the National School Lunch Program and School Breakfast Program). Though their funding levels are dictated by the authorizing law, in most cases appropriations are needed to make funds available. The three largest discretionary budget items are WIC, the Commodity Supplemental Food Program (CSFP), and federal nutrition program administration. The enacted FY2019 appropriation would provide over $103 billion for domestic food assistance ( Table 1 ). This is a decrease of approximately $1.7 billion from FY2018. Declining participation in SNAP is responsible for most of the difference. Over 95% of the FY2019 appropriations are for mandatory spending. Table 1 summarizes funding for the domestic food assistance programs, comparing FY2019 levels to those of prior years. In addition to the accounts' appropriations language, the enacted appropriation's general provisions include additional funding, rescissions, and/or policy changes. These are summarized in this report. President's FY2019 Budget Request Table 1 compares the enacted funding to the House- and Senate-reported bills, prior years' enacted funding, and the President's FY2019 budget request. The President's budget request includes the Administration's forecast for programs with open-ended funding such as SNAP and the child nutrition programs; this assists the appropriations committees in providing funding levels expected to meet obligations. The budget also includes the Administration's requests for discretionary programs. Additionally, it is a place for the Administration to include legislative requests. The FY2019 request did include SNAP legislative proposals. Most significantly for the FNS programs, the President's FY2019 budget request did the following: It included 14 legislative proposals pertaining to SNAP. The majority of these would have restricted SNAP eligibility and made changes to the benefit calculation. This request also proposed to replace a portion of the SNAP benefit with a box of USDA-purchased foods and to limit federal funding for states' administrative costs, nutrition education, and performance bonuses. Together, these proposals were estimated by both the Administration and Congressional Budget Office (CBO) to reduce program spending in FY2019 and over the 10-year budget window. None of these policies were enacted as part of the FY2019 appropriation. Some of these policies were debated in the formulation of the 2018 farm bill (Agriculture Improvement Act of 2018, P.L. 115-334 ), but ultimately only the elimination of performance bonus funding was enacted in the December 2018 law. It requested no funding for a number of discretionary spending programs, including the following: school meals equipment grants, which have received discretionary funding since FY2009; the WIC Farmers' Market Nutrition Program (FMNP), which has received annual discretionary funding since 1992; and the Commodity Supplemental Food Program (CSFP), which has received annual discretionary funding since 1969. Domestic Food Assistance Appropriations Accounts and Related General Provisions Office of the Under Secretary for Food, Nutrition, and Consumer Services For the Under Secretary's office, the enacted FY2019 appropriation provides approximately $0.8 million. This office received approximately equal funding in FY2018. The enacted appropriation (§734) continues to require the coordination of FNS research efforts with USDA's Research, Education and Economics mission area. This is to include a research and evaluation plan submitted to Congress. SNAP and Other Programs under the Food and Nutrition Act Appropriations under the Food and Nutrition Act (formerly the Food Stamp Act) support (1) SNAP (and related grants); (2) a nutrition assistance block grant for Puerto Rico and nutrition assistance block grants to American Samoa and the Commonwealth of the Northern Mariana Islands (all in lieu of SNAP); (3) the cost of food commodities as well as administrative and distribution expenses under the Food Distribution Program on Indian Reservations (FDPIR); (4) the cost of commodities for TEFAP, but not administrative/distribution expenses, which are covered under the Commodity Assistance Program budget account; and (5) Community Food Projects. The enacted appropriation provides approximately $73.5 billion for programs under the Food and Nutrition Act. This FY2019 level is approximately $540 million less than FY2018 appropriations. This difference is largely due to a forecasted reduction in SNAP participation. The enacted appropriation provides $3 billion for the SNAP contingency reserve fund. The SNAP account also includes mandatory funding for TEFAP commodities. The enacted appropriation provides nearly $295 million, according to the terms of the Food and Nutrition Act. This is an increase ($5.0 million, 1.7%) over $289.5 million provided in FY2018. (TEFAP also receives discretionary funding for storage and distribution costs, as discussed later in " Commodity Assistance Program .") SNAP Account: Other General Provisions and Committee Report Language SNAP-Authorized Retailers. The FY2017 and FY2018 appropriations law limited USDA's implementation of December 2016 regulations regarding SNAP retailers' inventory requirements, and the enacted FY2019 appropriation (§727) continues those limits. Only SNAP-authorized retailers may accept SNAP benefits. On December 15, 2016, FNS published a final rule to change retailer requirements for SNAP authorization. The final rule would have implemented the 2014 farm bill's changes to inventory requirements for SNAP-authorized retailers ( P.L. 113-79 , §4002). Namely, the 2014 farm bill increased both the varieties of "staple foods" and the perishable items within those varieties that SNAP retailers must stock. In addition to codifying the farm bill's changes, the final rule would have changed how staple foods are defined, clarified limitations on retailers' sale of hot foods, and increased the minimum number of stocking units. Section 727 in the enacted appropriation continues to require that USDA amend its final rule to define "variety" more expansively and that USDA "apply the requirements regarding acceptable varieties and breadth of stock" that were in place prior to P.L. 113-79 until such regulatory amendments are made. In the meantime, USDA-FNS implemented other aspects of the 2016 final rule, such as increased stocking units. On April 5, 2019, USDA did publish a proposed rule, proposing amendments to the definition of "variety". Child Nutrition Programs16 Appropriations under the child nutrition account fund a number of programs and activities authorized by the Richard B. Russell National School Lunch Act and the Child Nutrition Act. These include the National School Lunch Program (NSLP), School Breakfast Program (SBP), Child and Adult Care Food Program (CACFP), Summer Food Service Program (SFSP), Special Milk Program (SMP), assistance for state administrative expenses, procurement of commodities (in addition to transfers from separate budget accounts within USDA), state-federal reviews of the integrity of school meal operations ("Administrative Reviews"), "Team Nutrition" and education initiatives to improve meal quality and food safety, and support activities such as technical assistance to providers and studies/evaluations. (Child nutrition efforts are also supported by permanent mandatory appropriations and other funding sources discussed in the section " Other Nutrition Funding Support .") The enacted FY2019 appropriation provides approximately $23.1 billion for child nutrition programs. This is approximately $1.1 billion less (-4.6%) than the amount provided in FY2018, and reflects a transfer of more than $9.1 billion from the Section 32 account. The enacted appropriation funds certain child nutrition discretionary grants. These include the following: School Meals Equipment Grants. The law provides $30 million, the same amount as FY2018. Summer EBT (Electronic Benefit Transfer) Demonstration Projects. These projects provide electronic food benefits over summer months to households with children in order to make up for school meals that children miss when school is out of session and as an alternative to Summer Food Service Program meals. The projects were originally authorized and funded in the FY2010 appropriations law ( P.L. 111-80 ). The enacted appropriation provides $28 million, the same amount as FY2018. The child nutrition programs and WIC were up for reauthorization in 2016, but it was not completed. Many provisions of the operating law nominally expired at the end of FY2015, but nearly all operations continued via funding provided in appropriations laws since that time, including the enacted FY2018 appropriation. The enacted appropriation also continued to extend, through September 30, 2019, two expiring provisions: mandatory funding for an Information Clearinghouse and food safety audits. (See the Appendix for information about the child nutrition programs during the partial government shutdown.) Child Nutrition Programs: General Provisions One general provision in the enacted FY2019 appropriation included additional funding for child nutrition programs: Farm to School Grants. Section 754 of the enacted appropriation provides $5 million for competitive grants to assist schools and nonprofit entities in establishing farm-to-school programs. The same amount was provided in FY2018. This is in addition to $5 million in permanent mandatory funding (provided annually by Section 18 of the Richard B. Russell National School Lunch Act), for a total of $10 million available in FY2019. FY2019 general provisions also included policy provisions : Processed Poultry from China. The enacted appropriation includes a policy provision (§749) to prevent any processed poultry imported from China from being included in the National School Lunch Program, School Breakfast Program, Child and Adult Care Food Program, and Summer Food Service Program. This policy has been included in enacted appropriations laws since FY2015. Paid Lunch Pricing . For school year 2019-2020, Section 760 of the enacted appropriation changes federal policy on the pricing of paid (full-price) meals. Included in the 2010 child nutrition reauthorization, and first implemented in the 2011-2012 school year, this policy required schools annually to review their revenue from paid lunches and to determine, using a calculation specified in law and regulation, whether paid prices had to be increased. The purpose of the calculation was to ensure that federal funding intended for F/RP meals was not instead subsidizing full-price meals. For school year 2019-2020, the enacted appropriation requires a smaller subset of schools—only those with a negative balance in their nonprofit school food service account as of December 31, 2018—to be subject to this calculation and potentially to be required to raise prices. The same provision was included in the FY2018 enacted appropriation for school year 2018-2019. Vegetables in School Breakfasts. Section 768 of the enacted appropriation increases the frequency with which starchy vegetables can be substituted for fruits in the School Breakfast Program. Under current regulations, schools are allowed to substitute vegetables for the required servings of fruits (at least one cup daily, and at least five cups weekly) in school breakfasts. The regulations also specify that, "the first two cups per week of any such substitution must be from the dark green, red/orange, beans and peas (legumes) or 'Other vegetables' subgroups." This excludes the starchy vegetable subgroup, which includes corn, plantains, and white potatoes. The enacted appropriation specifies that FY2019 funds cannot be used to enforce this requirement, thereby allowing schools to substitute any type of vegetables for any or all of the required daily and weekly servings of fruits. Child Nutrition Program Commodities. Section 775 of the enacted appropriation changes the calculation of commodity assistance in child nutrition programs. Under current law, commodity assistance in child nutrition programs must comprise at least 12% of total funding provided under Sections 4 and 11 (reimbursements for school lunches) and Section 6 (commodity assistance) of the Richard B. Russell National School Lunch Act. Section 775 eliminates the inclusion of bonus commodities in this calculation as of September 30, 2018, thereby ensuring that only appropriated funds inform the required level of commodity assistance. WIC Program24 Although WIC is a discretionary funded program, since the late 1990s the practice of the appropriations committees has been to provide enough funds for WIC to serve all projected participants. The enacted FY2019 appropriation provides $6.075 billion for WIC; however, the law also rescinds available carryover funds from past years. This funding level is $175 million less than the FY2018 appropriation. The enacted appropriation also includes set-asides for WIC breastfeeding peer counselors and related activities ("not less than $60 million") and infrastructure ($19.0 million). The peer counselor set-aside is equal to FY2018 levels. The infrastructure set-aside is an increase of $5 million from FY2018, and further sets aside $5 million for telehealth competitive grants to increase WIC access as specified in the law. The enacted law (§723) rescinds $500 million in prior-year (or carryover) WIC funds. The House-reported and Senate-passed bills also would have rescinded carryover funds: H.R. 5961 (§723) would have rescinded $300 million; H.R. 6147 (§724) would have rescinded $400 million. Commodity Assistance Program The Commodity Assistance Program budget account supports several discretionary programs and activities: (1) Commodity Supplemental Food Program (CSFP), (2) funding for TEFAP administrative and distribution costs, (3) the WIC Farmers' Market Nutrition Program (FMNP), and (4) special Pacific Island assistance for nuclear-test-affected zones in the Pacific (the Marshall Islands) and areas affected by natural disasters. The enacted appropriation provides over $322 million for this account, no change from FY2018. Within the account, CSFP receives just below $223 million (a decrease of approximately $15 million or 6.8%); TEFAP Administrative Costs receives nearly $110 million—this includes $79.6 million in FY2019 funding (+$15.2 million compared to FY2018) as well as a transfer of $30.0 million in prior-year (carryover) CSFP funds; in addition to this discretionary TEFAP funding, the law allows the conversion of up to 15% of TEFAP entitlement commodity funding (included in the SNAP account discussed above) to administrative and distribution costs; and WIC FMNP receives $18.5 million, the same level as FY2018. Nutrition Programs Administration This budget account funds federal administration of all the USDA domestic food assistance program areas noted previously; special projects for improving the integrity and quality of these programs; and the Center for Nutrition Policy and Promotion, which provides nutrition education and information to consumers (including various dietary guides). The enacted appropriation provides nearly $165 million for this account, an increase of approximately $11 million from FY2018. As in FY2018 and prior years, the law sets aside $2 million for the fellowship programs administered by the Congressional Hunger Center. Other Nutrition Funding Support Domestic food assistance programs also receive funds from sources other than appropriations: In addition to appropriated funds from the child nutrition account for commodity foods (which provides over $1.4 billion), USDA purchases commodity foods for the child nutrition programs using "Section 32" funds—a permanent appropriation. For FY2019, the enacted appropriation specifies that up to $485 million from Section 32 is to be available for child nutrition entitlement commodities, compared to $465 million in FY2018. The Fresh Fruit and Vegetable Program (FFVP) for selected elementary schools nationwide is financed with permanent, mandatory funding from Section 32. The underlying law (Section 19 of the Richard B. Russell National School Lunch Act) provides funds at the beginning of every school year (July). For FY2019, there is $171.5 million available for FFVP, which is consistent with the FY2018 base amount adjusted for inflation. The Food Service Management Institute (technical assistance to child nutrition providers, also known as the Institute of Child Nutrition) is funded through a permanent annual appropriation of $5 million. The Senior Farmers' Market Nutrition program receives nearly $21 million of mandatory funding per year (FY2002-FY2023) outside of the regular appropriations process. Appendix. USDA-FNS Programs during the FY2019 Partial Government Shutdown USDA was one of the departments affected by a lapse in FY2019 funding and the resulting 35-day partial government shutdown (during parts of December 2018 and January 2019). Most of USDA's Food and Nutrition Service (FNS) programs, whether mandatory or discretionary, rely on funding provided in appropriations acts. As a result, the lapse in FY2019 appropriations required the execution of contingency plans, including staff furloughs, and at times the operating status of programs was in flux. FNS program operations during a government shutdown vary based on the different programs' available resources, determined by factors such as contingency or carryover funds and terms of the expired appropriations acts as well as USDA's decisionmaking. Beginning in late December 2018, FNS released program-specific memoranda to states and program operators describing the status of different nutrition assistance programs during the funding lapse. In addition to the impact on programs' funding discussed below, furloughs of FNS staff during this time period may have affected program operations (for example, the availability of technical assistance) on a case-by-case basis. This appendix summarizes some of the key issues and impacts on the SNAP, Child Nutrition, and WIC programs during this partial government shutdown. Further detail can be found in the FNS documents referenced above. It is important to note that because circumstances during a lapse in appropriations and executive-branch decisionmaking can vary, operations during this partial shutdown are not necessarily how a future shutdown would proceed. SNAP Benefits States issue SNAP benefits on a monthly basis. As in the FY2019 appropriations law, the FY2018 appropriations law ( P.L. 115-141 ) provided one year of SNAP funding as well as a contingency fund of $3 billion that can be spent in FY2018 or FY2019. The $3 billion is less than the cost of one month of SNAP benefits, so the contingency fund alone would not fund a month of SNAP benefits in the case of a lapse of funding. At the start of the partial shutdown, when a continuing resolution ( P.L. 115-298 ) expired after December 21, 2018, December 2018 benefits had already been provided. In addition, during the shutdown period, a provision of the continuing resolution allowed for payments to be made 30 days after the continuing resolution's expiration; this allowed states to issue January 2019 benefits. On January 8, 2019, USDA interpreted the provision to authorize issuance of February 2019 benefits as well, so long as states conducted early issuance—before January 20, 2019. By the end of the partial shutdown, recipients had received their December 2018, January 2019, and February 2019 benefits. However, at the beginning of the shutdown, it was not clear that benefits would be provided for these months. USDA-FNS provided a series of memoranda to states during the shutdown that included answers to frequently asked questions. Child Nutrition and WIC Unlike SNAP, the appropriations language for the child nutrition programs (National School Lunch Program and others) and WIC accounts provides funding that can be obligated over a two-year period. WIC also has a contingency fund. In addition, the child nutrition programs may have more flexibility to continue operating during a shutdown because federal funds are generally provided retroactively (on a reimbursement basis). During the FY2019 lapse in funding, the Administration had carryover and contingency funds to maintain program operations. This includes FY2018 appropriations that are available for spending through FY2019 and contingency funds (in the case of WIC). Programs with this source of funding potentially available are those with two-year funding from the Child Nutrition Programs account and the WIC account. How long these operations could continue would depend on (1) the funding lapse's duration and (2) the amount of carryover or contingency funding available. Ultimately, for child nutrition and WIC programs, USDA continued operating the child nutrition programs "with funding provided under the terms and conditions of the prior continuing resolution [P.L. 115-245]"; USDA stated that the programs had enough funding to continue operating at least through March 2019 if the shutdown were to continue; and USDA continued WIC and WIC FMNP operations using funding that had already been allocated to states and, for WIC, prior-year carryover funding. Summary:	null	96	24,579	24,581	24,581	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: T he Consolidated Appropriations Act, 2019 ( P.L. 116-6 ) was enacted on February 15, 2019.This omnibus bill included appropriations for the U.S. Department of Agriculture (USDA), of which USDA's domestic food assistance is a part. Prior to its enactment, the government had continued to operate for the first six months of the fiscal year under continuing resolutions (CRs). USDA experienced a 35-day lapse in FY2019 funding and partial government shutdown prior to the enactment of the Further Additional Continuing Appropriations Act, 2019 ( P.L. 116-5 ), a continuing resolution enacted prior to the Omnibus bill. (See the Appendix .) This report focuses on USDA's domestic food assistance programs; their funding; and, in some instances, policy changes provided by the enacted FY2018 appropriations law. USDA's domestic food assistance programs include the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program), Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), and the child nutrition programs (such as the National School Lunch Program). The domestic food assistance funding is, for the most part, administered by USDA's Food and Nutrition Service (FNS). CRS Report R45230, Agriculture and Related Agencies: FY2019 Appropriations provides an overview of the entire FY2019 Agriculture and Related Agencies appropriations law as well as a review of the reported bills and CRs preceding its enactment. With its focus on appropriations, this report discusses programs' eligibility requirements and operations minimally. See CRS Report R42353, Domestic Food Assistance: Summary of Programs for more background. Overview of FY2019 USDA-FNS Funding Domestic food assistance—SNAP and child nutrition programs in the mandatory spending accounts, and WIC and other programs in the discretionary spending accounts—represents over two-thirds of the FY2018 Agriculture appropriations act ( Figure 1 ). The federal budget process treats discretionary and mandatory spending differently. Discretionary spending is controlled by annual appropriations acts and receives most of the attention during the appropriations process. The annual budget resolution process sets spending limits for discretionary appropriations. Agency operations (salaries and expenses) and many grant programs are discretionary. Mandatory spending —though carried in the appropriation—is controlled by budget rules during the authorization process. Appropriations acts then provide funding to match the parameters required by the mandatory programs' authorizing laws. For the domestic food assistance programs, these laws are typically reauthorized in farm bill and child nutrition reauthorizations. Domestic food assistance funding ( Table 1 ) largely consists of open-ended, appropriated mandatory programs—that is, it varies with program participation (and in some cases inflation) under the terms of the underlying authorization law. The largest mandatory programs include SNAP and the child nutrition programs (including the National School Lunch Program and School Breakfast Program). Though their funding levels are dictated by the authorizing law, in most cases appropriations are needed to make funds available. The three largest discretionary budget items are WIC, the Commodity Supplemental Food Program (CSFP), and federal nutrition program administration. The enacted FY2019 appropriation would provide over $103 billion for domestic food assistance ( Table 1 ). This is a decrease of approximately $1.7 billion from FY2018. Declining participation in SNAP is responsible for most of the difference. Over 95% of the FY2019 appropriations are for mandatory spending. Table 1 summarizes funding for the domestic food assistance programs, comparing FY2019 levels to those of prior years. In addition to the accounts' appropriations language, the enacted appropriation's general provisions include additional funding, rescissions, and/or policy changes. These are summarized in this report. President's FY2019 Budget Request Table 1 compares the enacted funding to the House- and Senate-reported bills, prior years' enacted funding, and the President's FY2019 budget request. The President's budget request includes the Administration's forecast for programs with open-ended funding such as SNAP and the child nutrition programs; this assists the appropriations committees in providing funding levels expected to meet obligations. The budget also includes the Administration's requests for discretionary programs. Additionally, it is a place for the Administration to include legislative requests. The FY2019 request did include SNAP legislative proposals. Most significantly for the FNS programs, the President's FY2019 budget request did the following: It included 14 legislative proposals pertaining to SNAP. The majority of these would have restricted SNAP eligibility and made changes to the benefit calculation. This request also proposed to replace a portion of the SNAP benefit with a box of USDA-purchased foods and to limit federal funding for states' administrative costs, nutrition education, and performance bonuses. Together, these proposals were estimated by both the Administration and Congressional Budget Office (CBO) to reduce program spending in FY2019 and over the 10-year budget window. None of these policies were enacted as part of the FY2019 appropriation. Some of these policies were debated in the formulation of the 2018 farm bill (Agriculture Improvement Act of 2018, P.L. 115-334 ), but ultimately only the elimination of performance bonus funding was enacted in the December 2018 law. It requested no funding for a number of discretionary spending programs, including the following: school meals equipment grants, which have received discretionary funding since FY2009; the WIC Farmers' Market Nutrition Program (FMNP), which has received annual discretionary funding since 1992; and the Commodity Supplemental Food Program (CSFP), which has received annual discretionary funding since 1969. Domestic Food Assistance Appropriations Accounts and Related General Provisions Office of the Under Secretary for Food, Nutrition, and Consumer Services For the Under Secretary's office, the enacted FY2019 appropriation provides approximately $0.8 million. This office received approximately equal funding in FY2018. The enacted appropriation (§734) continues to require the coordination of FNS research efforts with USDA's Research, Education and Economics mission area. This is to include a research and evaluation plan submitted to Congress. SNAP and Other Programs under the Food and Nutrition Act Appropriations under the Food and Nutrition Act (formerly the Food Stamp Act) support (1) SNAP (and related grants); (2) a nutrition assistance block grant for Puerto Rico and nutrition assistance block grants to American Samoa and the Commonwealth of the Northern Mariana Islands (all in lieu of SNAP); (3) the cost of food commodities as well as administrative and distribution expenses under the Food Distribution Program on Indian Reservations (FDPIR); (4) the cost of commodities for TEFAP, but not administrative/distribution expenses, which are covered under the Commodity Assistance Program budget account; and (5) Community Food Projects. The enacted appropriation provides approximately $73.5 billion for programs under the Food and Nutrition Act. This FY2019 level is approximately $540 million less than FY2018 appropriations. This difference is largely due to a forecasted reduction in SNAP participation. The enacted appropriation provides $3 billion for the SNAP contingency reserve fund. The SNAP account also includes mandatory funding for TEFAP commodities. The enacted appropriation provides nearly $295 million, according to the terms of the Food and Nutrition Act. This is an increase ($5.0 million, 1.7%) over $289.5 million provided in FY2018. (TEFAP also receives discretionary funding for storage and distribution costs, as discussed later in " Commodity Assistance Program .") SNAP Account: Other General Provisions and Committee Report Language SNAP-Authorized Retailers. The FY2017 and FY2018 appropriations law limited USDA's implementation of December 2016 regulations regarding SNAP retailers' inventory requirements, and the enacted FY2019 appropriation (§727) continues those limits. Only SNAP-authorized retailers may accept SNAP benefits. On December 15, 2016, FNS published a final rule to change retailer requirements for SNAP authorization. The final rule would have implemented the 2014 farm bill's changes to inventory requirements for SNAP-authorized retailers ( P.L. 113-79 , §4002). Namely, the 2014 farm bill increased both the varieties of "staple foods" and the perishable items within those varieties that SNAP retailers must stock. In addition to codifying the farm bill's changes, the final rule would have changed how staple foods are defined, clarified limitations on retailers' sale of hot foods, and increased the minimum number of stocking units. Section 727 in the enacted appropriation continues to require that USDA amend its final rule to define "variety" more expansively and that USDA "apply the requirements regarding acceptable varieties and breadth of stock" that were in place prior to P.L. 113-79 until such regulatory amendments are made. In the meantime, USDA-FNS implemented other aspects of the 2016 final rule, such as increased stocking units. On April 5, 2019, USDA did publish a proposed rule, proposing amendments to the definition of "variety". Child Nutrition Programs16 Appropriations under the child nutrition account fund a number of programs and activities authorized by the Richard B. Russell National School Lunch Act and the Child Nutrition Act. These include the National School Lunch Program (NSLP), School Breakfast Program (SBP), Child and Adult Care Food Program (CACFP), Summer Food Service Program (SFSP), Special Milk Program (SMP), assistance for state administrative expenses, procurement of commodities (in addition to transfers from separate budget accounts within USDA), state-federal reviews of the integrity of school meal operations ("Administrative Reviews"), "Team Nutrition" and education initiatives to improve meal quality and food safety, and support activities such as technical assistance to providers and studies/evaluations. (Child nutrition efforts are also supported by permanent mandatory appropriations and other funding sources discussed in the section " Other Nutrition Funding Support .") The enacted FY2019 appropriation provides approximately $23.1 billion for child nutrition programs. This is approximately $1.1 billion less (-4.6%) than the amount provided in FY2018, and reflects a transfer of more than $9.1 billion from the Section 32 account. The enacted appropriation funds certain child nutrition discretionary grants. These include the following: School Meals Equipment Grants. The law provides $30 million, the same amount as FY2018. Summer EBT (Electronic Benefit Transfer) Demonstration Projects. These projects provide electronic food benefits over summer months to households with children in order to make up for school meals that children miss when school is out of session and as an alternative to Summer Food Service Program meals. The projects were originally authorized and funded in the FY2010 appropriations law ( P.L. 111-80 ). The enacted appropriation provides $28 million, the same amount as FY2018. The child nutrition programs and WIC were up for reauthorization in 2016, but it was not completed. Many provisions of the operating law nominally expired at the end of FY2015, but nearly all operations continued via funding provided in appropriations laws since that time, including the enacted FY2018 appropriation. The enacted appropriation also continued to extend, through September 30, 2019, two expiring provisions: mandatory funding for an Information Clearinghouse and food safety audits. (See the Appendix for information about the child nutrition programs during the partial government shutdown.) Child Nutrition Programs: General Provisions One general provision in the enacted FY2019 appropriation included additional funding for child nutrition programs: Farm to School Grants. Section 754 of the enacted appropriation provides $5 million for competitive grants to assist schools and nonprofit entities in establishing farm-to-school programs. The same amount was provided in FY2018. This is in addition to $5 million in permanent mandatory funding (provided annually by Section 18 of the Richard B. Russell National School Lunch Act), for a total of $10 million available in FY2019. FY2019 general provisions also included policy provisions : Processed Poultry from China. The enacted appropriation includes a policy provision (§749) to prevent any processed poultry imported from China from being included in the National School Lunch Program, School Breakfast Program, Child and Adult Care Food Program, and Summer Food Service Program. This policy has been included in enacted appropriations laws since FY2015. Paid Lunch Pricing . For school year 2019-2020, Section 760 of the enacted appropriation changes federal policy on the pricing of paid (full-price) meals. Included in the 2010 child nutrition reauthorization, and first implemented in the 2011-2012 school year, this policy required schools annually to review their revenue from paid lunches and to determine, using a calculation specified in law and regulation, whether paid prices had to be increased. The purpose of the calculation was to ensure that federal funding intended for F/RP meals was not instead subsidizing full-price meals. For school year 2019-2020, the enacted appropriation requires a smaller subset of schools—only those with a negative balance in their nonprofit school food service account as of December 31, 2018—to be subject to this calculation and potentially to be required to raise prices. The same provision was included in the FY2018 enacted appropriation for school year 2018-2019. Vegetables in School Breakfasts. Section 768 of the enacted appropriation increases the frequency with which starchy vegetables can be substituted for fruits in the School Breakfast Program. Under current regulations, schools are allowed to substitute vegetables for the required servings of fruits (at least one cup daily, and at least five cups weekly) in school breakfasts. The regulations also specify that, "the first two cups per week of any such substitution must be from the dark green, red/orange, beans and peas (legumes) or 'Other vegetables' subgroups." This excludes the starchy vegetable subgroup, which includes corn, plantains, and white potatoes. The enacted appropriation specifies that FY2019 funds cannot be used to enforce this requirement, thereby allowing schools to substitute any type of vegetables for any or all of the required daily and weekly servings of fruits. Child Nutrition Program Commodities. Section 775 of the enacted appropriation changes the calculation of commodity assistance in child nutrition programs. Under current law, commodity assistance in child nutrition programs must comprise at least 12% of total funding provided under Sections 4 and 11 (reimbursements for school lunches) and Section 6 (commodity assistance) of the Richard B. Russell National School Lunch Act. Section 775 eliminates the inclusion of bonus commodities in this calculation as of September 30, 2018, thereby ensuring that only appropriated funds inform the required level of commodity assistance. WIC Program24 Although WIC is a discretionary funded program, since the late 1990s the practice of the appropriations committees has been to provide enough funds for WIC to serve all projected participants. The enacted FY2019 appropriation provides $6.075 billion for WIC; however, the law also rescinds available carryover funds from past years. This funding level is $175 million less than the FY2018 appropriation. The enacted appropriation also includes set-asides for WIC breastfeeding peer counselors and related activities ("not less than $60 million") and infrastructure ($19.0 million). The peer counselor set-aside is equal to FY2018 levels. The infrastructure set-aside is an increase of $5 million from FY2018, and further sets aside $5 million for telehealth competitive grants to increase WIC access as specified in the law. The enacted law (§723) rescinds $500 million in prior-year (or carryover) WIC funds. The House-reported and Senate-passed bills also would have rescinded carryover funds: H.R. 5961 (§723) would have rescinded $300 million; H.R. 6147 (§724) would have rescinded $400 million. Commodity Assistance Program The Commodity Assistance Program budget account supports several discretionary programs and activities: (1) Commodity Supplemental Food Program (CSFP), (2) funding for TEFAP administrative and distribution costs, (3) the WIC Farmers' Market Nutrition Program (FMNP), and (4) special Pacific Island assistance for nuclear-test-affected zones in the Pacific (the Marshall Islands) and areas affected by natural disasters. The enacted appropriation provides over $322 million for this account, no change from FY2018. Within the account, CSFP receives just below $223 million (a decrease of approximately $15 million or 6.8%); TEFAP Administrative Costs receives nearly $110 million—this includes $79.6 million in FY2019 funding (+$15.2 million compared to FY2018) as well as a transfer of $30.0 million in prior-year (carryover) CSFP funds; in addition to this discretionary TEFAP funding, the law allows the conversion of up to 15% of TEFAP entitlement commodity funding (included in the SNAP account discussed above) to administrative and distribution costs; and WIC FMNP receives $18.5 million, the same level as FY2018. Nutrition Programs Administration This budget account funds federal administration of all the USDA domestic food assistance program areas noted previously; special projects for improving the integrity and quality of these programs; and the Center for Nutrition Policy and Promotion, which provides nutrition education and information to consumers (including various dietary guides). The enacted appropriation provides nearly $165 million for this account, an increase of approximately $11 million from FY2018. As in FY2018 and prior years, the law sets aside $2 million for the fellowship programs administered by the Congressional Hunger Center. Other Nutrition Funding Support Domestic food assistance programs also receive funds from sources other than appropriations: In addition to appropriated funds from the child nutrition account for commodity foods (which provides over $1.4 billion), USDA purchases commodity foods for the child nutrition programs using "Section 32" funds—a permanent appropriation. For FY2019, the enacted appropriation specifies that up to $485 million from Section 32 is to be available for child nutrition entitlement commodities, compared to $465 million in FY2018. The Fresh Fruit and Vegetable Program (FFVP) for selected elementary schools nationwide is financed with permanent, mandatory funding from Section 32. The underlying law (Section 19 of the Richard B. Russell National School Lunch Act) provides funds at the beginning of every school year (July). For FY2019, there is $171.5 million available for FFVP, which is consistent with the FY2018 base amount adjusted for inflation. The Food Service Management Institute (technical assistance to child nutrition providers, also known as the Institute of Child Nutrition) is funded through a permanent annual appropriation of $5 million. The Senior Farmers' Market Nutrition program receives nearly $21 million of mandatory funding per year (FY2002-FY2023) outside of the regular appropriations process. Appendix. USDA-FNS Programs during the FY2019 Partial Government Shutdown USDA was one of the departments affected by a lapse in FY2019 funding and the resulting 35-day partial government shutdown (during parts of December 2018 and January 2019). Most of USDA's Food and Nutrition Service (FNS) programs, whether mandatory or discretionary, rely on funding provided in appropriations acts. As a result, the lapse in FY2019 appropriations required the execution of contingency plans, including staff furloughs, and at times the operating status of programs was in flux. FNS program operations during a government shutdown vary based on the different programs' available resources, determined by factors such as contingency or carryover funds and terms of the expired appropriations acts as well as USDA's decisionmaking. Beginning in late December 2018, FNS released program-specific memoranda to states and program operators describing the status of different nutrition assistance programs during the funding lapse. In addition to the impact on programs' funding discussed below, furloughs of FNS staff during this time period may have affected program operations (for example, the availability of technical assistance) on a case-by-case basis. This appendix summarizes some of the key issues and impacts on the SNAP, Child Nutrition, and WIC programs during this partial government shutdown. Further detail can be found in the FNS documents referenced above. It is important to note that because circumstances during a lapse in appropriations and executive-branch decisionmaking can vary, operations during this partial shutdown are not necessarily how a future shutdown would proceed. SNAP Benefits States issue SNAP benefits on a monthly basis. As in the FY2019 appropriations law, the FY2018 appropriations law ( P.L. 115-141 ) provided one year of SNAP funding as well as a contingency fund of $3 billion that can be spent in FY2018 or FY2019. The $3 billion is less than the cost of one month of SNAP benefits, so the contingency fund alone would not fund a month of SNAP benefits in the case of a lapse of funding. At the start of the partial shutdown, when a continuing resolution ( P.L. 115-298 ) expired after December 21, 2018, December 2018 benefits had already been provided. In addition, during the shutdown period, a provision of the continuing resolution allowed for payments to be made 30 days after the continuing resolution's expiration; this allowed states to issue January 2019 benefits. On January 8, 2019, USDA interpreted the provision to authorize issuance of February 2019 benefits as well, so long as states conducted early issuance—before January 20, 2019. By the end of the partial shutdown, recipients had received their December 2018, January 2019, and February 2019 benefits. However, at the beginning of the shutdown, it was not clear that benefits would be provided for these months. USDA-FNS provided a series of memoranda to states during the shutdown that included answers to frequently asked questions. Child Nutrition and WIC Unlike SNAP, the appropriations language for the child nutrition programs (National School Lunch Program and others) and WIC accounts provides funding that can be obligated over a two-year period. WIC also has a contingency fund. In addition, the child nutrition programs may have more flexibility to continue operating during a shutdown because federal funds are generally provided retroactively (on a reimbursement basis). During the FY2019 lapse in funding, the Administration had carryover and contingency funds to maintain program operations. This includes FY2018 appropriations that are available for spending through FY2019 and contingency funds (in the case of WIC). Programs with this source of funding potentially available are those with two-year funding from the Child Nutrition Programs account and the WIC account. How long these operations could continue would depend on (1) the funding lapse's duration and (2) the amount of carryover or contingency funding available. Ultimately, for child nutrition and WIC programs, USDA continued operating the child nutrition programs "with funding provided under the terms and conditions of the prior continuing resolution [P.L. 115-245]"; USDA stated that the programs had enough funding to continue operating at least through March 2019 if the shutdown were to continue; and USDA continued WIC and WIC FMNP operations using funding that had already been allocated to states and, for WIC, prior-year carryover funding.	Summary:	gov_report	1,024	null	79
crs_R45866	crs_R45866_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The rules of the House of Representatives have included provisions related to preserving order and decorum in the chamber since the 1 st Congress (1789-1790). Under current House rules, Members may violate decorum if they engage in certain behaviors, such as using disorderly language. Members may be called to order by colleagues for the use of allegedly disorderly, or unparliamentary, language, which may include a formal demand that their words be taken down. This demand initiates a series of procedures to determine whether the words are, in fact, unparliamentary and to decide whether a Member who uses such language should be allowed to proceed in debate. This report covers these procedures, which are provided for in the standing rules of the House as a mechanism to maintain decorum in debate. The sections below present details about how and when a Member might invoke the demand that words be taken down, the procedural steps that may follow the demand, and an overview of the rule's history in the House. The report concludes with information about the practice of invoking this rule in the House in recent decades. The "Words Taken Down" Rule The standing rules of the House establish a parliamentary mechanismâreferred to as "words taken down"âwhereby a Member may call another Member to order for the use of disorderly language. Members may invoke this mechanism during debate on the House floor or in the Committee of the Whole. It may also be invoked in the standing and select committees of the House. A Member initiates the call to order by demanding that a colleague's "words be taken down." The phrase taken down , as described in the rule, refers to the writing down of the words objected to so they may be read back to the House by the Clerk. In current practice, all deba te in the House and in standing and select committees is transcribed by the official reporters of debate. Therefore, when a Member demands that the words of a colleague be taken down, the Clerk will consult with the transcriber to identify the words objected to, which the Clerk will then read out loud. Following the reading of the allegedly unparliamentary remarks, the Speaker of the House (or, if the words are spoken in a committee, the chair of the committee) will determine whether the words are in order. The standing rules of the House do not state explicitly what language is considered to be disorderly, although clause 1(b) of Rule XVII prohibits Members from engaging in "personalities" in debate. House precedents catalog words and phrases previously deemed to be in order and those that were ruled out of order, or unparliamentary. When ruling on the words objected to, the presiding officer considers the words themselves, as well as the context in which they were used, and bases the ruling on these precedents. On the floor, the Parliamentarian advises the Speaker based on recorded precedents. The Office of the Parliamentarian is not responsible for providing procedural assistance during committee meetings, although the chair could attempt to consult with the Parliamentarian in advance of or during such meetings. Rule XVII, clause 4, details the procedure for demanding that words be taken down: (a) If a Member, Delegate, or Resident Commissioner, in speaking or otherwise, transgresses the Rules of the House, the Speaker shall, or a Member, Delegate, or Resident Commissioner may, call to order the offending Member, Delegate, or Resident Commissioner, who shall immediately sit down unless permitted on motion of another Member, Delegate, or the Resident Commissioner to explain. If a Member, Delegate, or Resident Commissioner is called to order, the Member, Delegate, or Resident Commissioner making the call to order shall indicate the words excepted to, which shall be taken down in writing at the Clerk's desk and read aloud to the House. (b) The Speaker shall decide the validity of a call to order. The House, if appealed to, shall decide the question without debate. If the decision is in favor of the Member, Delegate, or Resident Commissioner called to order, the Member, Delegate, or Resident Commissioner shall be at liberty to proceed, but not otherwise. If the case requires it, an offending Member, Delegate, or Resident Commissioner shall be liable to censure or such other punishment as the House may consider proper. A Member, Delegate, or Resident Commissioner may not be held to answer a call to order, and may not be subject to the censure of the House therefor, if further debate or other business has intervened. Demanding That a Member's Words Be Taken Down According to clause 4(b) of Rule XVII, the demand for words to be taken down must be timely: It must generally occur before intervening business or debate. Therefore, immediately after the allegedly offensive words are spoken, the Member would state: Mr./Madam Speaker (or Chair), I demand that the gentleman's/gentlewoman's words be taken down. Debate is not in order at this point, but the Member demanding that the words be taken down may briefly state the reason for objecting to the language (e.g., the words include an improper personal reference to the President). A Member will be allowed to explain the remarks only if prompted by the presiding officer or if another Member makes a motion to allow an explanation and the motion is agreed to by the House. Usually, the presiding officer orders the Member who spoke the allegedly disorderly words to suspend and asks the Clerk to report the words. (On the House floor, the Member whose words were objected to may be asked by the Speaker to sit down.) The gentleman/gentlewoman from [state] will suspend. The Clerk will report the words. It may take several minutes for the Clerk to review the transcript and read the words out loud. During this pause in proceedings, the Member who spoke the allegedly offensive words may ask unanimous consent to withdraw the words: Mr./Madam Speaker (or Chair), I ask unanimous consent to withdraw my words. Alternatively, the Member who demanded that the words be taken down may withdraw the request, which does not require unanimous consent: Mr./Madam Speaker (or Chair), I withdraw my demand that the gentleman's/gentlewoman's words be taken down. If neither occurs, then the Clerk will read the words to the House, and the presiding officer will make a ruling on the remarks: In the opinion of the Chair, the words in question [were/were not] in order. The presiding officer's ruling is subject to appeal, and that appeal is subject to a motion to table. If the presiding officer rules that the words are not unparliamentary (and if this ruling is sustained following any appeal), then the House continues with the business pending prior to the demand that words be taken down. If the presiding officer rules that the words are out of order (and if this ruling is sustained following any appeal), the words are usually stricken from the Congressional Record by unanimous consent. The presiding officer might initiate this by stating: Without objection, the words are stricken from the Record . Alternatively, a Member (although not the Member whose words were taken down) may make a motion to remove the disorderly language from the Record , on which the House will vote: I move that the words of the gentleman/gentlewoman from [state] be stricken from the Record . In the event that a Member's words are ruled out of order, that Member may not be recognized to speak for the rest of the day (even on yielded time) or insert undelivered remarks into the Record unless the Member is allowed to proceed in order by the House. The Member may be permitted to proceed in order by unanimous consent, which is often initiated by the presiding officer: Without objection, the gentleman/gentlewoman from [state] will proceed in order. A Member may also make a motion to allow the Member whose words were ruled out of order to proceed in order, and the House will vote on the motion. I move that the gentleman/gentlewoman from [state] be allowed to proceed in order. If a Member is not allowed to proceed in order, the Member may vote and demand the yeas and the nays. History of the "Words Taken Down" Rule The concept of taking disorderly words down in writing is provided for in the principles of general parliamentary law. Although the rules of the House have, since its inception, included provisions related to preserving order and decorum in the chamber, the formal call for a Member's words to be taken down was not adopted as part of the standing rules of the House in the 1 st Congress (1789-1790). The rules of the House initially provided for the Speaker to call a Member to order for disorderly remarks or for a Member to make a point of order against a Member's language, on which the Speaker would rule. (These parliamentary mechanisms are still available today under clause 4 of Rule XVII.) The practice of taking down words began in 1808 when a Member called a colleague to order for disorderly language and the Speaker asked that Member to put the words objected to down in writing. This practice was formally adopted as part of the standing rules of the House in 1837. The original rule, which introduced the need for the demand to be timely, stated: If a member be called to order for words spoken in debate, the person calling him to order shall repeat the words excepted to, and they shall be taken down in writing at the Clerk's table; and no member shall be held to answer, or be subject to the censure of the House, for words spoken in debate, if any other member has spoken, or other business has intervened, after the words spoken, and before exception to them shall have been taken. An amendment to the rule in 1880 modified the procedure by which a Member demanded that words be taken down. The amended rule removed the provision that the Member calling another to order should repeat the objectionable words. This version, which is similar to the corresponding sentences of the rule in effect today, provided for the words to be taken down in writing and repeated by the Clerk. The 1880 version of the rule states: If a member is called to order for words spoken in debate, the member calling him to order shall indicate the words excepted to, and they shall be taken down in writing at the Clerk's desk and read aloud to the House; but he shall not be held to answer, nor be subject to the censure of the House therefor, if further debate or other business has intervened. The rule took its current form when the House comprehensively recodified its rules in the 106 th Congress, although the changes were largely technical. During the recodification, the previously separate clauses in the House rules for addressing unparliamentary languageâone providing for a Member to make a point of order against a colleague's remarks and the other providing for a demand that a Member's words be taken downâwere combined. The text of the rule was also amended to clarify that the rule applies to a "Member, Delegate, or Resident Commissioner" (both for calling someone to order and for being called to order). Recent Practice CRS conducted full-text searches of the Congressional Record to identify instances in which a Member demanded that another Member's words be taken down on the House floor (or in the Committee of the Whole) since January 1, 1971. Throughout this nearly 50-year period, the formal demand that words be taken down was invoked 170 times. These calls to order took place in the Committee of the Whole, as well as in the House proper, including during periods of time arranged for Members to speak on topics of their choice rather than on legislation, such as one-minute speeches and special order speeches. In contemporary practice, it is uncommon that the full procedure presented aboveâin which the Speaker rules whether or not the words are in orderâoccurs in the House. Of the 170 demands that words be taken down, 107, or more than half, were settled before the Speaker made a ruling, usually before the Clerk reported the words. In 75 of these instances, the Member whose words were taken down asked to withdraw or revise the words, and in another 32 cases, the Member who demanded that the words be taken down withdrew the request. There were an additional 13 occasions on which the Speaker ruled that a Member's call for words to be taken down was untimely. Throughout this time period the Speaker ruled on the words taken down 50 times. Twenty-seven, or more than half, of these rulings took place in the 1990s, with only nine rulings by the Speaker since 2000. In 25 of the 50 rulings following a demand that words be taken down, the Speaker ruled that the words were not disorderly. These occurrences are identified in Table 1 in reverse chronological order. When the Speaker provided a reason for the ruling, it was often that the Member's remarks did not constitute an improper personal reference toward another Member. For example, after words were taken down during debate on February 5, 1992, the Speaker, when ruling on the words, stated: "The Chair will rule that since the gentleman from Louisiana is generically speaking and not specifically alleging improper conduct by any individual Member, the words are in order." The Speaker ruled that the words were out of order 25 times during this time period. These 25 occurrences are presented in Table 2 in reverse chronological order. As the fourth column of the table indicates, in nearly every instance in which a rationale was given for the ruling, the Speaker stated that the Member was engaging in personalities toward an identifiable individual, often another Member. Following the determination that the remarks were out of order, the words were usually stricken from the Record by unanimous consent at the initiative of the Speaker. This happened in all but five instances presented in Table 2 . The words were ultimately stricken, either by unanimous consent or motion, in 17 of the 25 cases. It is also common for the Member whose words were ruled out of order to be allowed to proceed in order, usually by unanimous consent initiated by the Speaker. Indeed, the Speaker initiated such a request in 14 of the cases presented in Table 2 . Members whose words were ruled out of order were given permission to proceed in 17 of the 25 instances, either by unanimous consent or motion. Summary:	null	96	14,542	14,544	14,544	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The rules of the House of Representatives have included provisions related to preserving order and decorum in the chamber since the 1 st Congress (1789-1790). Under current House rules, Members may violate decorum if they engage in certain behaviors, such as using disorderly language. Members may be called to order by colleagues for the use of allegedly disorderly, or unparliamentary, language, which may include a formal demand that their words be taken down. This demand initiates a series of procedures to determine whether the words are, in fact, unparliamentary and to decide whether a Member who uses such language should be allowed to proceed in debate. This report covers these procedures, which are provided for in the standing rules of the House as a mechanism to maintain decorum in debate. The sections below present details about how and when a Member might invoke the demand that words be taken down, the procedural steps that may follow the demand, and an overview of the rule's history in the House. The report concludes with information about the practice of invoking this rule in the House in recent decades. The "Words Taken Down" Rule The standing rules of the House establish a parliamentary mechanismâreferred to as "words taken down"âwhereby a Member may call another Member to order for the use of disorderly language. Members may invoke this mechanism during debate on the House floor or in the Committee of the Whole. It may also be invoked in the standing and select committees of the House. A Member initiates the call to order by demanding that a colleague's "words be taken down." The phrase taken down , as described in the rule, refers to the writing down of the words objected to so they may be read back to the House by the Clerk. In current practice, all deba te in the House and in standing and select committees is transcribed by the official reporters of debate. Therefore, when a Member demands that the words of a colleague be taken down, the Clerk will consult with the transcriber to identify the words objected to, which the Clerk will then read out loud. Following the reading of the allegedly unparliamentary remarks, the Speaker of the House (or, if the words are spoken in a committee, the chair of the committee) will determine whether the words are in order. The standing rules of the House do not state explicitly what language is considered to be disorderly, although clause 1(b) of Rule XVII prohibits Members from engaging in "personalities" in debate. House precedents catalog words and phrases previously deemed to be in order and those that were ruled out of order, or unparliamentary. When ruling on the words objected to, the presiding officer considers the words themselves, as well as the context in which they were used, and bases the ruling on these precedents. On the floor, the Parliamentarian advises the Speaker based on recorded precedents. The Office of the Parliamentarian is not responsible for providing procedural assistance during committee meetings, although the chair could attempt to consult with the Parliamentarian in advance of or during such meetings. Rule XVII, clause 4, details the procedure for demanding that words be taken down: (a) If a Member, Delegate, or Resident Commissioner, in speaking or otherwise, transgresses the Rules of the House, the Speaker shall, or a Member, Delegate, or Resident Commissioner may, call to order the offending Member, Delegate, or Resident Commissioner, who shall immediately sit down unless permitted on motion of another Member, Delegate, or the Resident Commissioner to explain. If a Member, Delegate, or Resident Commissioner is called to order, the Member, Delegate, or Resident Commissioner making the call to order shall indicate the words excepted to, which shall be taken down in writing at the Clerk's desk and read aloud to the House. (b) The Speaker shall decide the validity of a call to order. The House, if appealed to, shall decide the question without debate. If the decision is in favor of the Member, Delegate, or Resident Commissioner called to order, the Member, Delegate, or Resident Commissioner shall be at liberty to proceed, but not otherwise. If the case requires it, an offending Member, Delegate, or Resident Commissioner shall be liable to censure or such other punishment as the House may consider proper. A Member, Delegate, or Resident Commissioner may not be held to answer a call to order, and may not be subject to the censure of the House therefor, if further debate or other business has intervened. Demanding That a Member's Words Be Taken Down According to clause 4(b) of Rule XVII, the demand for words to be taken down must be timely: It must generally occur before intervening business or debate. Therefore, immediately after the allegedly offensive words are spoken, the Member would state: Mr./Madam Speaker (or Chair), I demand that the gentleman's/gentlewoman's words be taken down. Debate is not in order at this point, but the Member demanding that the words be taken down may briefly state the reason for objecting to the language (e.g., the words include an improper personal reference to the President). A Member will be allowed to explain the remarks only if prompted by the presiding officer or if another Member makes a motion to allow an explanation and the motion is agreed to by the House. Usually, the presiding officer orders the Member who spoke the allegedly disorderly words to suspend and asks the Clerk to report the words. (On the House floor, the Member whose words were objected to may be asked by the Speaker to sit down.) The gentleman/gentlewoman from [state] will suspend. The Clerk will report the words. It may take several minutes for the Clerk to review the transcript and read the words out loud. During this pause in proceedings, the Member who spoke the allegedly offensive words may ask unanimous consent to withdraw the words: Mr./Madam Speaker (or Chair), I ask unanimous consent to withdraw my words. Alternatively, the Member who demanded that the words be taken down may withdraw the request, which does not require unanimous consent: Mr./Madam Speaker (or Chair), I withdraw my demand that the gentleman's/gentlewoman's words be taken down. If neither occurs, then the Clerk will read the words to the House, and the presiding officer will make a ruling on the remarks: In the opinion of the Chair, the words in question [were/were not] in order. The presiding officer's ruling is subject to appeal, and that appeal is subject to a motion to table. If the presiding officer rules that the words are not unparliamentary (and if this ruling is sustained following any appeal), then the House continues with the business pending prior to the demand that words be taken down. If the presiding officer rules that the words are out of order (and if this ruling is sustained following any appeal), the words are usually stricken from the Congressional Record by unanimous consent. The presiding officer might initiate this by stating: Without objection, the words are stricken from the Record . Alternatively, a Member (although not the Member whose words were taken down) may make a motion to remove the disorderly language from the Record , on which the House will vote: I move that the words of the gentleman/gentlewoman from [state] be stricken from the Record . In the event that a Member's words are ruled out of order, that Member may not be recognized to speak for the rest of the day (even on yielded time) or insert undelivered remarks into the Record unless the Member is allowed to proceed in order by the House. The Member may be permitted to proceed in order by unanimous consent, which is often initiated by the presiding officer: Without objection, the gentleman/gentlewoman from [state] will proceed in order. A Member may also make a motion to allow the Member whose words were ruled out of order to proceed in order, and the House will vote on the motion. I move that the gentleman/gentlewoman from [state] be allowed to proceed in order. If a Member is not allowed to proceed in order, the Member may vote and demand the yeas and the nays. History of the "Words Taken Down" Rule The concept of taking disorderly words down in writing is provided for in the principles of general parliamentary law. Although the rules of the House have, since its inception, included provisions related to preserving order and decorum in the chamber, the formal call for a Member's words to be taken down was not adopted as part of the standing rules of the House in the 1 st Congress (1789-1790). The rules of the House initially provided for the Speaker to call a Member to order for disorderly remarks or for a Member to make a point of order against a Member's language, on which the Speaker would rule. (These parliamentary mechanisms are still available today under clause 4 of Rule XVII.) The practice of taking down words began in 1808 when a Member called a colleague to order for disorderly language and the Speaker asked that Member to put the words objected to down in writing. This practice was formally adopted as part of the standing rules of the House in 1837. The original rule, which introduced the need for the demand to be timely, stated: If a member be called to order for words spoken in debate, the person calling him to order shall repeat the words excepted to, and they shall be taken down in writing at the Clerk's table; and no member shall be held to answer, or be subject to the censure of the House, for words spoken in debate, if any other member has spoken, or other business has intervened, after the words spoken, and before exception to them shall have been taken. An amendment to the rule in 1880 modified the procedure by which a Member demanded that words be taken down. The amended rule removed the provision that the Member calling another to order should repeat the objectionable words. This version, which is similar to the corresponding sentences of the rule in effect today, provided for the words to be taken down in writing and repeated by the Clerk. The 1880 version of the rule states: If a member is called to order for words spoken in debate, the member calling him to order shall indicate the words excepted to, and they shall be taken down in writing at the Clerk's desk and read aloud to the House; but he shall not be held to answer, nor be subject to the censure of the House therefor, if further debate or other business has intervened. The rule took its current form when the House comprehensively recodified its rules in the 106 th Congress, although the changes were largely technical. During the recodification, the previously separate clauses in the House rules for addressing unparliamentary languageâone providing for a Member to make a point of order against a colleague's remarks and the other providing for a demand that a Member's words be taken downâwere combined. The text of the rule was also amended to clarify that the rule applies to a "Member, Delegate, or Resident Commissioner" (both for calling someone to order and for being called to order). Recent Practice CRS conducted full-text searches of the Congressional Record to identify instances in which a Member demanded that another Member's words be taken down on the House floor (or in the Committee of the Whole) since January 1, 1971. Throughout this nearly 50-year period, the formal demand that words be taken down was invoked 170 times. These calls to order took place in the Committee of the Whole, as well as in the House proper, including during periods of time arranged for Members to speak on topics of their choice rather than on legislation, such as one-minute speeches and special order speeches. In contemporary practice, it is uncommon that the full procedure presented aboveâin which the Speaker rules whether or not the words are in orderâoccurs in the House. Of the 170 demands that words be taken down, 107, or more than half, were settled before the Speaker made a ruling, usually before the Clerk reported the words. In 75 of these instances, the Member whose words were taken down asked to withdraw or revise the words, and in another 32 cases, the Member who demanded that the words be taken down withdrew the request. There were an additional 13 occasions on which the Speaker ruled that a Member's call for words to be taken down was untimely. Throughout this time period the Speaker ruled on the words taken down 50 times. Twenty-seven, or more than half, of these rulings took place in the 1990s, with only nine rulings by the Speaker since 2000. In 25 of the 50 rulings following a demand that words be taken down, the Speaker ruled that the words were not disorderly. These occurrences are identified in Table 1 in reverse chronological order. When the Speaker provided a reason for the ruling, it was often that the Member's remarks did not constitute an improper personal reference toward another Member. For example, after words were taken down during debate on February 5, 1992, the Speaker, when ruling on the words, stated: "The Chair will rule that since the gentleman from Louisiana is generically speaking and not specifically alleging improper conduct by any individual Member, the words are in order." The Speaker ruled that the words were out of order 25 times during this time period. These 25 occurrences are presented in Table 2 in reverse chronological order. As the fourth column of the table indicates, in nearly every instance in which a rationale was given for the ruling, the Speaker stated that the Member was engaging in personalities toward an identifiable individual, often another Member. Following the determination that the remarks were out of order, the words were usually stricken from the Record by unanimous consent at the initiative of the Speaker. This happened in all but five instances presented in Table 2 . The words were ultimately stricken, either by unanimous consent or motion, in 17 of the 25 cases. It is also common for the Member whose words were ruled out of order to be allowed to proceed in order, usually by unanimous consent initiated by the Speaker. Indeed, the Speaker initiated such a request in 14 of the cases presented in Table 2 . Members whose words were ruled out of order were given permission to proceed in 17 of the 25 instances, either by unanimous consent or motion.	Summary:	gov_report	1,024	null	80
crs_R45979	crs_R45979_0	You are given a report by a government agency. Write a one-page summary of the report. Report: S afe and affordable financial services are an important tool for most American households to avoid financial hardship, build assets, and achieve financial security over the course of their lives. In the United States, robust consumer credit markets allow most consumers to access financial services and credit products to meet their needs in traditional financial markets. The vast majority of consumers have, for example, a bank account, a credit score, a credit card, and other types of credit products. However, some consumersâwho tend to be younger adults, low- and moderate-income (LMI) consumers or possess imperfect credit repayment historyâcan find gaining access to these prod ucts and services difficult. For those excluded, consumers may find managing their financial lives expensive and difficult. This report provides an overview on financial inclusion. It then focuses on three areas: (1) access to bank and other payment accounts; (2) inclusion in the credit reporting system; and (3) access to affordable short-term credit. These areas are generally considered foundational for households to successfully manage their financial affairs and graduate to wealth building activities in the future. Wealth building activitiesâsuch as access to homeownership, education, and other financial investmentsâare outside the scope of this report. Financial Inclusion Overview Financial inclusion refers to the idea that individuals "have access to useful and affordable financial products and services that meet their needsâtransactions, payments, savings, credit, and insuranceâdelivered in a responsible and sustainable way." Access to financial products allows households to better manage their financial lives, such as storing funds safely, making payments in exchange for goods and services, and coping with unforeseen financial emergencies, such as medical expenses or car or home repairs. In the United States, most households rely on financial products found at traditional depository intuitionsâcommercial banks or credit unions. Some households also use financial products and services outside of the banking system, either by choice or due to a lack of access to traditional institutions. While products outside the banking sector may better suit some households' needs, these products might also lack consumer protections or other benefits that traditional financial institutions tend to provide. Different barriers affect different populations. For some younger consumers, a lack of a co-signer might make it more difficult to build a credit report history or a lack of knowledge or familiarity with financial institutions may be a barrier to obtaining a bank account. For consumers living paycheck to paycheck, a bad credit history or a lack of money could serve as barriers to obtaining affordable credit or a bank account. For immigrants, the absence of a credit history in the United States or language differences could be critical access barriers. For consumers who do not have familiarity or access to the internet or mobile phones, a group in which older Americans may be overrepresented, technology can be a barrier to accessing financial products and services. Financial Product Access and Financial Well-Being Some consumers face barriers that make it more difficult for them to access traditional bank products, such as a bank account, enter the credit system, and gain access to financial product and service offerings in traditional financial markets. These barriers can be significant because they may disadvantage these consumers from effectively managing their financial lives and achieving financial well-being, which the Bureau of Consumer Financial Protection (CFPB) defines as 1. having control over day-to-day, month-to-month finances; 2. having the ability to absorb a financial shock; 3. being on track to meet financial goals; and 4. being able to make choices that allow a person to enjoy life. Research has examined the factors involved in achieving financial well-being. For example, a CFPB study found thatâafter controlling for certain economic factorsâmoney management is strongly associated with financial well-being. In addition, the CFPB has found that not having a bank account and nonbank transaction product use (e.g., check cashing or money orders) is correlated with lower financial well-being. Although nonbank short-term credit is also correlated with lower financial well-being, the effect is not as large as the financial products previously mentioned. Lastly, holding liquid savings is highly correlated with the CFPB's financial well-being scale. Academic research conducted abroad also suggests the importance of access to financial products to improve financial well-being. For example, some studies suggest that access to bank accounts can lead to more savings. In particular, debit accounts seem to have strong effects, by helping consumers save more by reducing money spent on financial services and monitoring costs. Moreover, access to faster and more secure payment services has also been shown to provide significant benefits to consumers, including helping lower-income consumers better handle financial shocks. Likewise, inclusion in credit bureaus also have positive effects on consumers by reducing market information asymmetry and allowing some consumers to obtain better terms of credit. In contrast, the evidence on the effect of small-dollar short-term credit on individuals' financial well-being is mixed. Many Americans have low financial well-being and live paycheck to paycheck. National surveys suggest that about 40% of Americans find "covering expenses and bills in a typical month is somewhat or very difficult," and they could not pay all of their bills on time in the past year. In addition, more than 40% of households did not set aside any money in the past year for emergency expenses. Therefore, a sizable portion of the adult population report they would have difficulty meeting an unexpected expense. If faced with a $400 unexpected expense, 39% of adults say they would borrow, sell something, or not be able to cover the expense. These financial struggles lead to real impacts on the health and wellness of these families; those with low financial well-being are more likely to face material hardship. Access to Checking and Other Banking Accounts The banking sector provides valuable financial services for households that allow them to save, make payments, and access credit. Most U.S. consumers choose to open a bank account because it is a safe and secure way to store money. For example, the Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per depositor against an institution's failure. In addition, consumers gain access to payment services through checking accounts, such as bill pay and paper checks. Frequently, a checking account includes access to a debit card, which increases a consumer's ability to make payment transactions through the account. For most consumers, a checking or savings account is less expensive than alternative ways to access these types of services. Some studies suggest that affordable access to payment transactions may be particularly important for consumers to manage their financial lives. For most consumers, opening a bank account is relatively easy. Consumers undergo an account verification process and sometimes provide a small initial opening deposit of money into the account. Many consumers open their first depository account when they get their first job or start post-secondary education. Checking and savings accounts are often the first relationship that a consumer has with a financial institution, which can later progress into other types of financial products and services, such as loan products or financial investments. Safe and affordable financial services, especially for families with unpredictable income or expenses, have the potential to help households avoid financial hardship. However, many U.S. householdsâoften those with low incomes, lack of credit histories, or credit histories marked with missed debt paymentsâdo not use banking services. The Unbanked and Underbanked According to the FDIC's 2017 National Survey of Unbanked and Underbanked Households, 6.5% of households in the United States were unbanked , meaning that these households do not have a bank account (see Figure 1 ). In addition, another 18.7% of households were underbanked , meaning that although these households had a bank account, they still obtained one or more of certain financial products and services outside of the banking system in the past year. These specified nonbank financial products, called alternative financial services , include check cashing, money orders, payday loans, auto title loans, pawn shop loans, refund anticipation loans, and rent-to-own services. Unbanked consumers tend to be lower-income, younger, have less formal education, of a racial or ethnic minority, disabled, and have incomes that varied substantially from month to month compared with the general U.S. population. Unbanked persons may be electing not to open a bank account due to costs, a lack of trust, or other barriers. According to the survey, these households report that they do not have a bank account because they do not have enough money, do not trust banks, and to avoid high and unpredictable bank fees. In addition, for immigrants, the account verification process may be more challenging to complete, and the consumer's country of origin may influence their trust of banks. In the past decade or so, the availability of free or low-cost checking accounts has reportedly diminished, and fees associated with checking accounts have grown. Some bank accounts require minimum account balances to avoid certain maintenance or service fees. The most common fees that checking account consumers incur are overdraft and nonsufficient fund fees. Overdraft services can help consumers pay bills on time, but fees can be costly particularly if used repeatedly. For consumers living paycheck to paycheck, maintaining bank account minimums and avoiding account overdrafts might be difficult, leading to unaffordable account fees. In addition, unpaid fees can lead to involuntary account closures, making it more difficult to obtain a bank account in the future. Checking and Savings Accounts: Banking Economics Depository institutions incur expenses to provide checking and savings accounts to consumers. In addition to specific account maintenance costs, physical banking branches incur costs to hire staff and maintain retail locations. To recoup these costs, depository institutions make money from interest rate spreads (i.e., loaning out funds in checking and savings accounts) and account fees. Historically, some banks were willing to lose money on these types of accounts to begin a relationship with a client and later get more profitable business from the client, such as a credit card or mortgage loan. In fact, checking and savings accounts data might allow a bank to better underwrite and price loans to a consumer. In this way, banks with a checking account relationship with a consumer might be able to provide more attractive loan terms than other banks without this relationship. Given these dynamics, lower-balance or less credit-worthy consumers may generally be less profitable for banks to serve. Consumers with low checking or savings account balances provide banks minimal funds to lend out and make a profit with. Moreover, less credit-worthy consumers may be less likely to develop into a profitable relationship for the banks if the consumer is not in a position to obtain loans from the bank in the near future. Therefore, bank fees may be seen as the best way for banks to recoup their account costs for these consumers. Because of the way bank fees are structured, consumers with lower balances using checking and savings accounts tend to incur more fees than consumers with higher balances. Bank access may also have a geographic component, as some observers are concerned that banking des erts â areas without a bank branch nearby â exist in certain communities. Branch offices are still important to many consumers, even as mobile and online banking has become more popular. For example, most banked households visit a bank branch regularly, and one-third of banked households visit 10 or more times in a year. However, in the past 10 years, the number of bank branch offices has declined in the United States due to many causes, such as bank consolidations and the rise of online banking. Some argue that this has left some communities without any nearby bank branches, making it more difficult to access quality banking services, particularly in lower-income, non-urban areas. Yet others argue that banking deserts are not a major issue in the United States because they have been stable over time, and minority areas are less likely to be affected than other areas of the country. Banking Account Alternatives Unbanked households rely on nonbank alternative financial products and services. Both unbanked and underbanked households are more likely to use transaction alternative financial products than credit alternative financial products. Transaction alternative financial products include check cashing, money orders, and other nonbank transaction products. In a typical month, unbanked consumers are more likely to use cash, nonbank money orders, and prepaid cards to pay bills and receive income, in contrast to banked consumers, who are most likely to use direct deposit, electronic bank payments, personal checks, debit cards, and credit cards. Alternative financial products can sometimes be less expensive, faster, and more convenient for some consumers. For example, although check cashing, money orders, and other nonbank transaction products might charge high fees, some consumers may incur higher or less predictable fees with a checking account. In addition, such alternative financial products might allow consumers to access cash more quickly, which might be valuable for consumers with tight budgets and little liquid savings or credit to manage financial shocks or other expenses. Lastly, nonbank stores often are open longer hours including evenings and weekends than banks, which might be more convenient for working households. Moreover, these nonbank stores might also be more likely to cater to a local ethnic or racial community, for example, by hiring staff who speak a native language and live in the local community. Although consumers may find benefits in using alternative financial products substitutes, these products may not always have all of the benefits of bank accounts, such as FDIC insurance or other consumer protections. General-purpose prepaid cards are another popular alternative to a traditional checking account. Use of prepaid cards is more prevalent among unbanked householdsâ26.9% of unbanked and 14.5% of underbanked households used a prepaid card in the past year. These cards can be obtained through a bank, at a retail store, or online, and they can be used in payment networks, such as Visa and MasterCard. General-purpose reloadable prepaid cards generally have features similar to debit and checking accounts, such as the ability to pay bills electronically, get cash at an ATM, make purchases at stores or online, and receive direct deposits. However, unlike checking accounts, prepaid card funds are not always federally insured against an institution's failure. Prepaid cards often have a monthly maintenance fee and other particular service fees, such as using an ATM or reloading cash. Some banks offer prepaid cards, yet unbanked consumers are much more likely to use a prepaid card from a store or website that is not a bank. Nonbank private-sector innovation could also provide more affordable financial products to unbanked and underbanked consumers. Whereas bank products may be expensive to provide to lower-income or less credit-worthy consumers, technology may be able to reduce the cost. For example, internet-based mobile wallets may provide access to payment services for unbanked consumers. Alternatives to a banking-based payment system have been proposed or pursued in other countries. For example, the M-pesa, a mobile payment system that does not use banks, has achieved a relatively high level of usage in parts of Africa. In addition, new mobile products aim to help consumers manage their money better and save by automating savings behavior. Yet, concerns continue to exist for internet-based products around data privacy and cybersecurity issues. Policymakers debate whether existing regulation can accommodate financial innovation or whether a new regulatory framework is needed. Access to Emergency Savings and Savings Accounts Some research suggests that emergency savings is crucial for a household's financial stability. The ability to meet unexpected expenses is particularly important, because within any given year, most households face an unexpected financial shock. For example, one study found that families with even a relatively small amount of non-retirement savings (e.g., $250-$750) are less likely in a financial shock to be evicted, miss a housing or utility payment, or receive means-tested public benefits. These findings are consistent throughout the income spectrum, not only for lower-income families. One barrier for building emergency savings may include not having a separate account dedicated to saving. For example, money in a transaction account intended for emergencies can be vulnerable to unintentional overspending. Although almost all banked households report having a checking account, roughly a quarter do not have a savings account. These households tend to be lower-income and living in rural areas and are more likely to be an ethnic or racial minority or working-age disabled compared with the U.S. population. Moreover, unbanked households are much less likely to report saving for unexpected expenses and emergencies (17.4%) than banked households (61.6%). Whereas most households save using a checking or savings account, most unbanked households save at home or with family or friends. In addition, saving with a prepaid card is much more common for unbanked households. Some recent research suggests that saving, not only through a savings account, but also through savings wallets on prepaid cards, can help consumers avoid high-cost credit and alternative financial services. Possible Policy Responses In regard to accessing financial products and services that help consumers manage their finances and achieve financial success, some research suggests that consumers may particularly benefit from (1) access to affordable electronic payment system services, for example, through a traditional bank account; and (2) a safe way to accumulate and hold emergency savings. The government, the private sector, and the nonprofit sector all may be in a position to help increase access to these types of financial products for the underserved. Some propose changes to bank regulation to try to increase access to bank accounts. For example, the Community Reinvestment Act (CRA) encourages banking institutions to meet the credit needs of the areas they serve, particularly in LMI neighborhoods. Banks receive "CRA credits" for qualifying activities, such as mortgage, consumer, and business loans. Currently, providing bank accounts to LMI consumers or neighborhoods is not included in the calculation. Bank regulators are considering updating the CRA, and they recently received public comments on reforming implementation of the law. The Federal Reserve indicated that it is considering, due to public feedback, expanding the list of products and services that are eligible for CRA credits, including "financial services and products aimed at helping consumers get on a healthier financial path," such as affordable checking and savings accounts for LMI consumers. Bank regulators may need to balance expanding CRA credit for these products with the CRA's statutory purpose, which was focused on encouraging bank lending activities to meet local communities' credit needs. Payment system improvements, either by the government or the private sector, may also have the potential to improve welfare for unbanked or underbanked consumers. Many of these consumers choose alternative financial payment products such as check cashers to access their funds quickly. These consumers might not require such alternative services if bank payment systems operated faster than they normally do. Both the private sector and the government are currently working on initiatives to make the bank payment system faster. For example, the Federal Reserve plans to introduce a real time payment system called FedNow in 2023 or 2024, which would allow consumers access to funds quickly after initiating the transfer. Faster payments may help some consumers avoid overdraft fees on checking accounts. However, some payments that households make would also be cleared fasterâdebiting their accounts more quicklyâwhich could be disadvantageous to some of these households compared with the current system. Other policy proposals include the government directly providing accounts to retail customers. For example, offering banking services through postal offices or providing banking services online to the public through the Federal Reserve, which already provides accounts to banks. Opposition to these proposals often centers on the appropriate role for the government. Some argue that the government should not be competing with the private sector to provide these services to consumers, especially in the competitive banking market. Moreover, government bank accounts may not attract consumer demand. For example, the Treasury Department's myRA account programâwhich provided workers without a work retirement account a vehicle for retirement savingsâclosed after about three years, in part due to lack of participation. Financial education programs or outreach initiatives coordinated by the government, nonprofit organizations, and financial institutions could support financial inclusion as well. Given the importance of emergency savings, in 2019, CFPB Director Kraninger announced that the CFPB wants to focus on increasing consumer savings, through financial education initiatives and joint research projects with the financial industry. In addition, the "Bank On" movementâa coalition between city, state, and federal government agencies, community organizations, financial institutions, and othersâaims to encourage unbanked consumers to open and use bank accounts. Bank accounts associated with the movement must have no overdraft fees, charge a minimal amount of monthly fees, have deposits that are federally insured, and offer traditional banking services, such as direct deposit, debit or prepaid cards, and online banking. Nearly 3 million accounts have been opened through the movement, generally to new bank customers, and consumers tend to actively use these accounts. This topic may continue to be the subject of congressional interest and legislative proposals. In the 116 th Congress, the House Financial Services Committee marked up and ordered reported H.R. 4067 , directing the CFPB to report to Congress on unbanked, underbanked, and underserved consumers. In addition, other legislation introduced proposes establishing an office within the CFPB to work on unbanked and underbanked issues ( H.R. 1285 ) and proposes developing short-term non-retirement savings accounts for consumers with their employers automatically deducting from their paychecks ( S. 1019 , H.R. 2120 , S. 1053 ) or using their tax refund to save ( H.R. 2112 , S. 1018 ). Access to the Credit Reporting System The credit reporting industry collects information on consumers and uses it to estimate the probability of future financial behaviors, such as successfully repaying a loan or defaulting on it. The information collected has largely related to consumers' past financial performance and repayment history on traditional credit products. Consumer files generally do not contain information on consumer income or assets or on alternative financial services. Credit bureaus collect and store payment data reported to them by financial firms, and they or other credit scoring companies use this data to estimate individual consumers' creditworthiness, generally expressed as a numerical "score." The three largest credit bureausâEquifax, Experian, and TransUnionâprovide credit reports nationwide that include repayment histories. Credit reports generally may not include information on items such as race or ethnicity, religious or political preference, or medical history. This industry significantly affects consumer access to financial products, because lenders and other financial firms use consumer data when deciding whether to provide credit or other products to an individual and under what terms. Consumers who find it challenging to enter the traditional credit reporting system face challenges accessing many consumer credit products, such as mortgages or credit cards, because creditors are unable to assess the consumer's credit worthiness. This section examines some consumer credit reporting issues and related developments and policy issues. Credit Invisibles and Unscorables According to the CFPB, credit scores cannot be generated for approximately 20% of the U.S. population due to their limited credit histories. The CFPB categorizes consumers with limited credit histories into several groups. One category of consumers, referred to as credit invisibles , have no credit record at the three nationwide credit reporting agencies and, thus, do not exist for the purposes of credit reporting. Credit invisibles represents 11% of the U.S. adult population, or 26 million consumers (see Figure 2 ). Another category of consumers have a credit record and thus exist, but they cannot be scored or are considered un scorable . Unscorable consumers either have insufficient (short) histories or stale (outdated) histories. The insufficient and stale unscored groups, each containing more than 9 million individuals, collectively represent 8.3% of the U.S. adult population, or approximately 19 million consumers. Limited credit history is correlated with age, income, race, and ethnicity. Many consumers that are credit invisible or unscorable are young. For example, 40% of credit invisibles are under 25 years old. Moreover, consumers who live in lower-income neighborhoods or are black or Hispanic are also disproportionately credit invisible or unscorable compared with the U.S. population. Barriers to Entering the Credit System Most young adults transition into the credit reporting system in their early twentiesâ80% of consumers transition out of credit invisibility before age 25 and 90% before age 30. For young consumers, the most common ways to become credit visible is through credit cards, student loans, and piggybacking (i.e., becoming a joint account holder or authorized user on another person's account, such as a parent's account). Young adults in LMI neighborhoods tend to make the transition to credit visibility at older ages than young adults in higher-income neighborhoods. In urban areas, consumers over 25 years old from LMI neighborhoods have higher rates of credit invisibility than those in middle and upper income areas. In addition, the highest rates of credit invisibility for consumers over 25 years old are in rural areas, and these rates do not vary much based on neighborhood income. Credit invisible consumers in LMI and rural areas are less likely to enter the credit bureaus through a credit card than credit invisible consumers in other parts of the country, possibly because piggybacking is notably less common in LMI communities. Moreover, using student loans to become credit visible is also less common in LMI areas. Recent immigrants also have trouble entering the credit system when they come to the United States. Existing credit history from other countries does not transfer to the U.S. system. In addition, immigrants' alternative forms of identification, such as the Individual Taxpayer Identification Numbers (ITINs) might not be accepted by some financial services providers. Expanding Credit Visibility Policy Issues Consumers without a credit record have trouble accessing credit, but without access to credit, a consumer cannot establish a credit record. In general, there are two ways that policymakers tend to approach this issue, either by (1) expanding uptake of financial products reported in the current system or (2) expanding the types of information in the credit reporting system using alternative data. Expanding Use of Currently Reported Products The first approach often focuses on financial education and entry-level products. Financial education and partnerships between financial services providers and nonprofit groups may help consumers learn how credit reporting works, develop a credit history, and become scorable. For example, financial wellness programs at workplaces are a growing way to deliver these types of programs. Yet financial education, coaching, and counseling can be expensive and difficult to provide to consumers. On the financial product side, tensions exist between expanding credit access to build a credit history and upholding consumer protection. For example, credit cards are the most common first product reported to credit bureaus, yet consumer protection regulations, such as the CARD Act of 2009, reduce young consumers' access to credit cards. Stakeholders believe that large financial services providers should develop entry-level credit products that are profitable and sustainable, without sacrificing consumer protections. For example, secured credit cardsâwhich are "secured" by a consumer deposit, so the issuer faces little risk of defaultâcan help establish a credit history, but currently, are less likely to move consumers to credit visibility than unsecured (regular) credit cards. Some consumer advocates believe that the security deposit is an obstacle for lower-income consumers. This issue epitomizes the difficulty in developing credit-building financial products for unscorable consumers that are safe, accessible, and prudent for the financial institution. Using Alternative Data in Credit Reports Alternative data generally refers to data that the national consumer reporting agencies do not traditionally use (e.g., information other than traditional financial institution credit repayments) to calculate a credit score. It can include both financial and nonfinancial data. In a 2017 Request for Information, the CFPB included examples of alternative data, such as payments on telecommunications; rent or utilities; checking account transaction information; educational or occupational attainment; how consumers shop, browse, or use devices; and social media information. Alternative data could potentially be used to expand access to credit for current credit invisible or unscorable consumers, but it also could create data security risks or consumer protection violations. Alternative data used in credit scoring could increase accuracy, visibility, and scorability in credit reporting by including additional information beyond that which is traditionally used. The ability to calculate scores for the credit invisible or unscoreable consumer groups could allow lenders using these scores to better determine the creditworthiness of people in these groups. Arguably, this would increase access toâand lower the cost ofâcredit for some credit invisible or unscorable individuals, as lenders using alternative data are able to find new creditworthy consumers. However, in cases where the alternative data includes negative or derogatory information, it has the potential to harm some consumers' existing credit scores. Some prospective borrowers may be unaware that alternative data has been used in credit decisions, raising privacy and consumer protection concerns. Moreover, alternative data may pose fair lending risks if the data used are correlated with characteristics, such as race or ethnicity. Using alternative data for credit reporting raises regulatory compliance questions, which may be why adaption of alternative data in the credit reporting system is currently limited. The main statute regulating the credit reporting industry is the Fair Credit Reporting Act (FCRA), which establishes consumers' rights in relation to their credit reports, as well as permissible uses of credit reports. It also imposes certain responsibilities on those who collect, furnish, and use the information contained in consumers' credit reports. Alternative data providers outside of the traditional consumer credit industry may find FCRA data furnishing requirements burdensome. Some alternative data may have accuracy issues, and managing consumer disputes requires time and resources. These regulations may discourage some organizations from furnishing alternative data, even if the data could help some consumers become scorable or increase their credit scores. In an effort to address such concerns, many consumer data industry firms use alternative data only when consumers' opt-in. Using alternative data for credit reporting may continue to be the subject of congressional interest and legislative proposals. In the 116 th Congress, the House Financial Services Committee marked up and ordered reported H.R. 3629 , which among other things directs the CFPB to report to Congress on the impact of using nontraditional data on credit scoring. In addition, other legislation introduced allows types of alternative data to be furnished to the credit bureaus ( S. 1828 , H.R. 4231 ). Access to Affordable Small-Dollar Credit Short-term, small-dollar loans are consumer loans with relatively low initial principal amounts, often less than $1,000, with relatively short repayment periods, generally for a small number of weeks or months. Small-dollar loans can be offered in various forms and by both traditional financial institutions (e.g., banks) and alternative financial services providers (e.g., payday lenders). Many U.S. consumers do not have access to affordable small-dollar credit; often for these consumers, small-dollar credit is either expensive or difficult to access. The extent to which borrowers' financial situations would be harmed by using expensive credit or having limited access to credit is widely debated. Credit is an important way households pay for unexpected expenses and compensate for emergencies, such as a car or home repair, a medical expense, or a pay cut. Credit that can be paid back flexibly is particularly valued by consumers, especially those living paycheck to paycheck. Research suggests that access to this type of short-term credit can help households during short-term emergencies, yet unsustainable debt can harm households. Consumer groups often raise concerns regarding the affordability of small-dollar loans. Some borrowers may fall into debt traps , situations where borrowers repeatedly roll over existing loans into new loans and find it difficult to repay outstanding balances. Regulations aimed at reducing costs for borrowers may result in higher costs for lenders, possibly limiting or reducing credit availability for financially distressed individuals. This section focuses on expanding access to affordable small-dollar credit. Policymakers continue to be interested in ways to increase access to affordable credit because it is an important step in achieving financial stability. Access to Traditional Bank Credit Products About 80% of U.S. households have access to bank or traditional financial institution credit products, such as a general or store credit card, a mortgage, an auto loan, a student loan, or a bank personal loan. Credit cards are the most common form of credit, and they are what most households use for small-dollar credit needs. In general, banks require a credit score or other information about the consumer to prudently underwrite a loan. Scorable and credit-worthy consumers are in a position to gain access to credit from traditional sources. Financial institutions also sometimes provide consumer loans to existing customers, even if the borrower lacks a credit score (e.g., a consumer with a checking account who is a student or young worker). Some institutions make these loans to build long-term relationships. The remaining 20% of households do not have access to any traditional bank credit products, generally because they are either unscorable or have a blemished credit history. They are more likely to be unbanked, low-income, and minority households. Not having access to traditional bank credit is also correlated with age, formal education, disability status, and being a foreign-born noncitizen. According to an FDIC estimate, 12.9% of households had unmet demand for bank small-dollar credit. Of these households interested in bank credit, over three-quarters were current on bills in the last year, suggesting these households might be creditworthy. Policymakers often face a trade-off between consumer protection and access to credit when regulating the banking sector. Consumer protection laws at the state and federal levels often limit the profitability of small-dollar, short-term loans. For example, legislation such as the CARD Act of 2009 placed restrictions on subprime credit card lending. Small-dollar, short-term loans can be expensive for banks to provide. Although many of the underwriting and servicing costs are somewhat fixed regardless of size, smaller loans earn less total interest income, making them more likely to be unprofitable. Moreover, excluded consumers often are either unscorable or have a blemished credit history, making it difficult for banks to prudently underwrite loans for these consumers. In addition, banks face various regulatory restrictions on their permissible activities, in contrast to nonbanks. For these reasons, many banks choose not to offer credit products to some consumers. Nevertheless, banks have demonstrated interest in providing certain small-dollar financial services such as direct deposit advances, subprime credit cards, and overdraft protection services. In these cases, banks may face regulatory disincentives to providing these services, because bank regulators and legislators have sometimes demonstrated concerns about banks providing these products. For example, before 2013, some banks offered deposit advance products to consumers with bank accounts, which were short-term loans paid back automatically out of the borrower's next qualifying electronic deposit. Research findings from the CFPB suggest that although deposit advance was designed to be a short-term product, many consumers used it intensively. In the CFPB's sample, the median user was in debt for 31% of the year. Because of this sustained use and concerns about consumer default risk, in 2013, the Office of the Comptroller of the Currency (OCC), FDIC, and Federal Reserve issued supervisory guidance, advising banks to make sure deposit advance products complied with consumer protection and safety and soundness regulations. Many banks subsequently discontinued offering deposit advances. At the same time, regulators and policymakers have implemented policies aimed at increasing credit availability. Regulation implemented pursuant to the CRA (the 1977 law discussed in the "Access to Checking and Other Banking Accounts" section above) encourages banking institutions to meet the credit needs of consumers in the areas they serve, particularly in LMI neighborhoods that tend to include these excluded consumers. However, the CRA applies only to individuals with an established relationship with a bank, excluding unbanked consumers in an area. Likewise, many small-dollar loan products may not be considered qualifying activities. Moreover, the CRA does not encourage banks from engaging in unprofitable activities, so the incentives it creates might be limited. Credit Alternative Financial Products Credit alternative financial products include payday loans, pawn shop loans, auto title loans, and other types of loan products from nonbank providers. According to the FDIC, 6.9% of American households used a credit alternative financial service in 2017. Households that rely on credit alternative financial services are more likely to be lower-income, younger, and a racial or ethnic minority compared with the general U.S. population. Some argue that credit alternative financial products are expensive and are more likely than bank products to lead to debt traps. Bank small-dollar credit may be less expensive for prime borrowers with credit histories or relationships with banks. For other consumers, credit alternative financial products might better serve their needs due to fee structure or less stringent underwriting. Yet, some of these consumers may not have access to bank products and thus rely on credit alternative financial products for their credit needs. New Technology and Market Developments New technology may have the potential to help expand access to affordable credit to underserved consumers. For example, new nonbank digital or mobile-based financial products may lower the cost to provide small-dollar loans, making it easier to expand credit access to the underserved. Other nonbank products try to reduce default risk, for example, through employer-based lending models, to expand access to credit for more consumers. In addition, some lenders choose not to rely solely on the credit reporting system, and instead use alternative data directly to make credit decisions. New products that use alternative data on prospective borrowersâeither publicly or with the borrower's permissionâmay be able to better price lenders' default risk, which could expand credit access or make credit cheaper for some consumers. Recent findings suggest that some types of alternative dataâsuch as education, employment, and cash-flow informationâmight be promising ways to expand access to credit. For example, initial results from the Upstart Network's credit model, which uses alternative data to make credit and pricing decisions, shows that the model expands the number of consumers approved for credit, lowers the rate consumers pay for credit on average, and does not increase disparities based on race, ethnicity, gender, or age. Moreover, another recent study suggests that cash-flow data may more accurately predict creditworthiness, and its use would expand credit access to more borrowers, while meeting fair lending rules. One market segment is particularly illustrative of this practice. With the proliferation of internet access and data availability, some new lendersâoften referred to as marketplace lenders or fintech lendersârely on online platforms and frequently underwrite loans using alternative data. Although fintech lending remains a small part of the consumer lending market, it has grown rapidly in recent years. According to the Government Accountability Office (GAO), "in 2017, personal loans provided by these lenders totaled about $17.7 billion, up from about $2.5 billion in 2013." In addition, incumbent bank and nonbank lenders have adopted certain of these technologies and practices to varying degrees, and in some cases have partnered or contracted with fintech companies to build or run online, algorithmic platforms. Yet, despite the potential of new technology in small-dollar lending markets, these technologies also create risks for consumers. For example, new digital technology exposes consumers to data security risks. In addition, lenders' alternative data used to make credit decisions could result in disparate impacts or other consumer protection violations. Possible Policy Responses Policymakers and observers will likely continue to explore ways to make affordable and safe credit accessible to a greater portion of the population (in addition to including more people in the credit reporting system, as discussed in a previous section of the report). Changes to bank regulation could encourage more banking institutions to increase access to credit to underserved consumers. For example, some question the effectiveness of how the CRA is currently implemented, particularly with regard to short-term, small-dollar loans. As bank regulators consider updating the CRA, the Federal Reserve said that another area they are considering changing, due to public feedback, is expanding CRA-eligible products and services, such as payday loan alternatives and other small-dollar short-term loans for LMI consumers. Yet, as stated earlier in the report, bank regulators need to balance new CRA criteria with federal prudential regulations for safety and soundness , which requires banks to prudently undertake CRA-qualified activities and not engage in activities that are likely unprofitable to the bank. Reducing regulatory barriers may also allow more banking institutions to increase access to credit to underserved consumers. Financial regulators have taken recent steps to encourage banks to re-enter the small-dollar lending market. In October 2017, the OCC rescinded the 2013 guidance, and in May 2018 issued a new bulletin to encourage their banks to enter this market. In November 2018, the FDIC solicited advice about how to encourage more banks to offer small-dollar credit products. It is unclear whether these efforts will encourage banks to enter the small-dollar market with a product similar to deposit advance. In terms of using new technology and alternative data in consumer lending, questions exist about how to comply with fair lending and other consumer protection regulations. Currently, the federal financial regulators are monitoring these new technologies, but they have not provided detailed guidance. In February 2017, the CFPB requested information from the public about the use of alternative data and modeling techniques in the credit process. Information from this request led the CFPB to outline principles for consumer-authorized financial data sharing and aggregation in October 2017. These nine principles include, among other things, consumer access and usability, consumer control and informed consent, and data security and accuracy. According to the GAO, both fintech lenders and federally regulated banks that work with fintech lenders reported that additional regulatory clarification would be helpful. Therefore, the GAO recommended "that the CFPB and the federal banking regulators communicate in writing to fintech lenders and banks that partner with fintech lenders, respectively, on the appropriate use of alternative data in the underwriting process." Lastly, some advocate for the federal government providing small-dollar short-term loans to consumers directly if the private sector leaves some underserved, for example, through postal offices. Yet, providing credit to consumers is more risky than providing bank accounts or other banking services because some consumers will default on their loans. Opponents of the government directly providing consumer loans often centers on concerns about the federal government managing the credit risks it would undertake. These opponents generally argue that the private sector is in a more appropriate position to take these risks. Conclusion Access to bank and other payment accounts, the credit reporting system, and affordable short-term small-dollar credit are generally considered foundational for households to manage their financial affairs, improve their financial well-being, and graduate to wealth building activities in the future. In the United States, robust consumer credit markets allow most consumers to access financial services and credit products to meet their needs in traditional financial markets. Yet currently, consumers tend to rely on family or community connections to get their first bank account, establish a credit history, and gain access to affordable and safe credit. Given the importance of financial inclusion to financial well-being, and the challenges facing certain segments of the population, this topic is likely to continue to be the subject of congressional interest and legislative proposals. As markets develop and technology continues to change, new financial products have the potential to lower costs and expand access. Yet, as this report described, relevant laws and regulations may need to be reconsidered or updated in response to these technological developments. Moreover, policymakers may consider whether other policy changes could help expand consumers' affordable access to these financial products and services. Disagreements will continue to exist around whether government programs or regulation should be used to directly support financial inclusion or whether laws and regulations make it more difficult for the private sector to create new or existing products targeted at underserved consumers. Summary:	null	96	49,354	49,356	49,356	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: S afe and affordable financial services are an important tool for most American households to avoid financial hardship, build assets, and achieve financial security over the course of their lives. In the United States, robust consumer credit markets allow most consumers to access financial services and credit products to meet their needs in traditional financial markets. The vast majority of consumers have, for example, a bank account, a credit score, a credit card, and other types of credit products. However, some consumersâwho tend to be younger adults, low- and moderate-income (LMI) consumers or possess imperfect credit repayment historyâcan find gaining access to these prod ucts and services difficult. For those excluded, consumers may find managing their financial lives expensive and difficult. This report provides an overview on financial inclusion. It then focuses on three areas: (1) access to bank and other payment accounts; (2) inclusion in the credit reporting system; and (3) access to affordable short-term credit. These areas are generally considered foundational for households to successfully manage their financial affairs and graduate to wealth building activities in the future. Wealth building activitiesâsuch as access to homeownership, education, and other financial investmentsâare outside the scope of this report. Financial Inclusion Overview Financial inclusion refers to the idea that individuals "have access to useful and affordable financial products and services that meet their needsâtransactions, payments, savings, credit, and insuranceâdelivered in a responsible and sustainable way." Access to financial products allows households to better manage their financial lives, such as storing funds safely, making payments in exchange for goods and services, and coping with unforeseen financial emergencies, such as medical expenses or car or home repairs. In the United States, most households rely on financial products found at traditional depository intuitionsâcommercial banks or credit unions. Some households also use financial products and services outside of the banking system, either by choice or due to a lack of access to traditional institutions. While products outside the banking sector may better suit some households' needs, these products might also lack consumer protections or other benefits that traditional financial institutions tend to provide. Different barriers affect different populations. For some younger consumers, a lack of a co-signer might make it more difficult to build a credit report history or a lack of knowledge or familiarity with financial institutions may be a barrier to obtaining a bank account. For consumers living paycheck to paycheck, a bad credit history or a lack of money could serve as barriers to obtaining affordable credit or a bank account. For immigrants, the absence of a credit history in the United States or language differences could be critical access barriers. For consumers who do not have familiarity or access to the internet or mobile phones, a group in which older Americans may be overrepresented, technology can be a barrier to accessing financial products and services. Financial Product Access and Financial Well-Being Some consumers face barriers that make it more difficult for them to access traditional bank products, such as a bank account, enter the credit system, and gain access to financial product and service offerings in traditional financial markets. These barriers can be significant because they may disadvantage these consumers from effectively managing their financial lives and achieving financial well-being, which the Bureau of Consumer Financial Protection (CFPB) defines as 1. having control over day-to-day, month-to-month finances; 2. having the ability to absorb a financial shock; 3. being on track to meet financial goals; and 4. being able to make choices that allow a person to enjoy life. Research has examined the factors involved in achieving financial well-being. For example, a CFPB study found thatâafter controlling for certain economic factorsâmoney management is strongly associated with financial well-being. In addition, the CFPB has found that not having a bank account and nonbank transaction product use (e.g., check cashing or money orders) is correlated with lower financial well-being. Although nonbank short-term credit is also correlated with lower financial well-being, the effect is not as large as the financial products previously mentioned. Lastly, holding liquid savings is highly correlated with the CFPB's financial well-being scale. Academic research conducted abroad also suggests the importance of access to financial products to improve financial well-being. For example, some studies suggest that access to bank accounts can lead to more savings. In particular, debit accounts seem to have strong effects, by helping consumers save more by reducing money spent on financial services and monitoring costs. Moreover, access to faster and more secure payment services has also been shown to provide significant benefits to consumers, including helping lower-income consumers better handle financial shocks. Likewise, inclusion in credit bureaus also have positive effects on consumers by reducing market information asymmetry and allowing some consumers to obtain better terms of credit. In contrast, the evidence on the effect of small-dollar short-term credit on individuals' financial well-being is mixed. Many Americans have low financial well-being and live paycheck to paycheck. National surveys suggest that about 40% of Americans find "covering expenses and bills in a typical month is somewhat or very difficult," and they could not pay all of their bills on time in the past year. In addition, more than 40% of households did not set aside any money in the past year for emergency expenses. Therefore, a sizable portion of the adult population report they would have difficulty meeting an unexpected expense. If faced with a $400 unexpected expense, 39% of adults say they would borrow, sell something, or not be able to cover the expense. These financial struggles lead to real impacts on the health and wellness of these families; those with low financial well-being are more likely to face material hardship. Access to Checking and Other Banking Accounts The banking sector provides valuable financial services for households that allow them to save, make payments, and access credit. Most U.S. consumers choose to open a bank account because it is a safe and secure way to store money. For example, the Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per depositor against an institution's failure. In addition, consumers gain access to payment services through checking accounts, such as bill pay and paper checks. Frequently, a checking account includes access to a debit card, which increases a consumer's ability to make payment transactions through the account. For most consumers, a checking or savings account is less expensive than alternative ways to access these types of services. Some studies suggest that affordable access to payment transactions may be particularly important for consumers to manage their financial lives. For most consumers, opening a bank account is relatively easy. Consumers undergo an account verification process and sometimes provide a small initial opening deposit of money into the account. Many consumers open their first depository account when they get their first job or start post-secondary education. Checking and savings accounts are often the first relationship that a consumer has with a financial institution, which can later progress into other types of financial products and services, such as loan products or financial investments. Safe and affordable financial services, especially for families with unpredictable income or expenses, have the potential to help households avoid financial hardship. However, many U.S. householdsâoften those with low incomes, lack of credit histories, or credit histories marked with missed debt paymentsâdo not use banking services. The Unbanked and Underbanked According to the FDIC's 2017 National Survey of Unbanked and Underbanked Households, 6.5% of households in the United States were unbanked , meaning that these households do not have a bank account (see Figure 1 ). In addition, another 18.7% of households were underbanked , meaning that although these households had a bank account, they still obtained one or more of certain financial products and services outside of the banking system in the past year. These specified nonbank financial products, called alternative financial services , include check cashing, money orders, payday loans, auto title loans, pawn shop loans, refund anticipation loans, and rent-to-own services. Unbanked consumers tend to be lower-income, younger, have less formal education, of a racial or ethnic minority, disabled, and have incomes that varied substantially from month to month compared with the general U.S. population. Unbanked persons may be electing not to open a bank account due to costs, a lack of trust, or other barriers. According to the survey, these households report that they do not have a bank account because they do not have enough money, do not trust banks, and to avoid high and unpredictable bank fees. In addition, for immigrants, the account verification process may be more challenging to complete, and the consumer's country of origin may influence their trust of banks. In the past decade or so, the availability of free or low-cost checking accounts has reportedly diminished, and fees associated with checking accounts have grown. Some bank accounts require minimum account balances to avoid certain maintenance or service fees. The most common fees that checking account consumers incur are overdraft and nonsufficient fund fees. Overdraft services can help consumers pay bills on time, but fees can be costly particularly if used repeatedly. For consumers living paycheck to paycheck, maintaining bank account minimums and avoiding account overdrafts might be difficult, leading to unaffordable account fees. In addition, unpaid fees can lead to involuntary account closures, making it more difficult to obtain a bank account in the future. Checking and Savings Accounts: Banking Economics Depository institutions incur expenses to provide checking and savings accounts to consumers. In addition to specific account maintenance costs, physical banking branches incur costs to hire staff and maintain retail locations. To recoup these costs, depository institutions make money from interest rate spreads (i.e., loaning out funds in checking and savings accounts) and account fees. Historically, some banks were willing to lose money on these types of accounts to begin a relationship with a client and later get more profitable business from the client, such as a credit card or mortgage loan. In fact, checking and savings accounts data might allow a bank to better underwrite and price loans to a consumer. In this way, banks with a checking account relationship with a consumer might be able to provide more attractive loan terms than other banks without this relationship. Given these dynamics, lower-balance or less credit-worthy consumers may generally be less profitable for banks to serve. Consumers with low checking or savings account balances provide banks minimal funds to lend out and make a profit with. Moreover, less credit-worthy consumers may be less likely to develop into a profitable relationship for the banks if the consumer is not in a position to obtain loans from the bank in the near future. Therefore, bank fees may be seen as the best way for banks to recoup their account costs for these consumers. Because of the way bank fees are structured, consumers with lower balances using checking and savings accounts tend to incur more fees than consumers with higher balances. Bank access may also have a geographic component, as some observers are concerned that banking des erts â areas without a bank branch nearby â exist in certain communities. Branch offices are still important to many consumers, even as mobile and online banking has become more popular. For example, most banked households visit a bank branch regularly, and one-third of banked households visit 10 or more times in a year. However, in the past 10 years, the number of bank branch offices has declined in the United States due to many causes, such as bank consolidations and the rise of online banking. Some argue that this has left some communities without any nearby bank branches, making it more difficult to access quality banking services, particularly in lower-income, non-urban areas. Yet others argue that banking deserts are not a major issue in the United States because they have been stable over time, and minority areas are less likely to be affected than other areas of the country. Banking Account Alternatives Unbanked households rely on nonbank alternative financial products and services. Both unbanked and underbanked households are more likely to use transaction alternative financial products than credit alternative financial products. Transaction alternative financial products include check cashing, money orders, and other nonbank transaction products. In a typical month, unbanked consumers are more likely to use cash, nonbank money orders, and prepaid cards to pay bills and receive income, in contrast to banked consumers, who are most likely to use direct deposit, electronic bank payments, personal checks, debit cards, and credit cards. Alternative financial products can sometimes be less expensive, faster, and more convenient for some consumers. For example, although check cashing, money orders, and other nonbank transaction products might charge high fees, some consumers may incur higher or less predictable fees with a checking account. In addition, such alternative financial products might allow consumers to access cash more quickly, which might be valuable for consumers with tight budgets and little liquid savings or credit to manage financial shocks or other expenses. Lastly, nonbank stores often are open longer hours including evenings and weekends than banks, which might be more convenient for working households. Moreover, these nonbank stores might also be more likely to cater to a local ethnic or racial community, for example, by hiring staff who speak a native language and live in the local community. Although consumers may find benefits in using alternative financial products substitutes, these products may not always have all of the benefits of bank accounts, such as FDIC insurance or other consumer protections. General-purpose prepaid cards are another popular alternative to a traditional checking account. Use of prepaid cards is more prevalent among unbanked householdsâ26.9% of unbanked and 14.5% of underbanked households used a prepaid card in the past year. These cards can be obtained through a bank, at a retail store, or online, and they can be used in payment networks, such as Visa and MasterCard. General-purpose reloadable prepaid cards generally have features similar to debit and checking accounts, such as the ability to pay bills electronically, get cash at an ATM, make purchases at stores or online, and receive direct deposits. However, unlike checking accounts, prepaid card funds are not always federally insured against an institution's failure. Prepaid cards often have a monthly maintenance fee and other particular service fees, such as using an ATM or reloading cash. Some banks offer prepaid cards, yet unbanked consumers are much more likely to use a prepaid card from a store or website that is not a bank. Nonbank private-sector innovation could also provide more affordable financial products to unbanked and underbanked consumers. Whereas bank products may be expensive to provide to lower-income or less credit-worthy consumers, technology may be able to reduce the cost. For example, internet-based mobile wallets may provide access to payment services for unbanked consumers. Alternatives to a banking-based payment system have been proposed or pursued in other countries. For example, the M-pesa, a mobile payment system that does not use banks, has achieved a relatively high level of usage in parts of Africa. In addition, new mobile products aim to help consumers manage their money better and save by automating savings behavior. Yet, concerns continue to exist for internet-based products around data privacy and cybersecurity issues. Policymakers debate whether existing regulation can accommodate financial innovation or whether a new regulatory framework is needed. Access to Emergency Savings and Savings Accounts Some research suggests that emergency savings is crucial for a household's financial stability. The ability to meet unexpected expenses is particularly important, because within any given year, most households face an unexpected financial shock. For example, one study found that families with even a relatively small amount of non-retirement savings (e.g., $250-$750) are less likely in a financial shock to be evicted, miss a housing or utility payment, or receive means-tested public benefits. These findings are consistent throughout the income spectrum, not only for lower-income families. One barrier for building emergency savings may include not having a separate account dedicated to saving. For example, money in a transaction account intended for emergencies can be vulnerable to unintentional overspending. Although almost all banked households report having a checking account, roughly a quarter do not have a savings account. These households tend to be lower-income and living in rural areas and are more likely to be an ethnic or racial minority or working-age disabled compared with the U.S. population. Moreover, unbanked households are much less likely to report saving for unexpected expenses and emergencies (17.4%) than banked households (61.6%). Whereas most households save using a checking or savings account, most unbanked households save at home or with family or friends. In addition, saving with a prepaid card is much more common for unbanked households. Some recent research suggests that saving, not only through a savings account, but also through savings wallets on prepaid cards, can help consumers avoid high-cost credit and alternative financial services. Possible Policy Responses In regard to accessing financial products and services that help consumers manage their finances and achieve financial success, some research suggests that consumers may particularly benefit from (1) access to affordable electronic payment system services, for example, through a traditional bank account; and (2) a safe way to accumulate and hold emergency savings. The government, the private sector, and the nonprofit sector all may be in a position to help increase access to these types of financial products for the underserved. Some propose changes to bank regulation to try to increase access to bank accounts. For example, the Community Reinvestment Act (CRA) encourages banking institutions to meet the credit needs of the areas they serve, particularly in LMI neighborhoods. Banks receive "CRA credits" for qualifying activities, such as mortgage, consumer, and business loans. Currently, providing bank accounts to LMI consumers or neighborhoods is not included in the calculation. Bank regulators are considering updating the CRA, and they recently received public comments on reforming implementation of the law. The Federal Reserve indicated that it is considering, due to public feedback, expanding the list of products and services that are eligible for CRA credits, including "financial services and products aimed at helping consumers get on a healthier financial path," such as affordable checking and savings accounts for LMI consumers. Bank regulators may need to balance expanding CRA credit for these products with the CRA's statutory purpose, which was focused on encouraging bank lending activities to meet local communities' credit needs. Payment system improvements, either by the government or the private sector, may also have the potential to improve welfare for unbanked or underbanked consumers. Many of these consumers choose alternative financial payment products such as check cashers to access their funds quickly. These consumers might not require such alternative services if bank payment systems operated faster than they normally do. Both the private sector and the government are currently working on initiatives to make the bank payment system faster. For example, the Federal Reserve plans to introduce a real time payment system called FedNow in 2023 or 2024, which would allow consumers access to funds quickly after initiating the transfer. Faster payments may help some consumers avoid overdraft fees on checking accounts. However, some payments that households make would also be cleared fasterâdebiting their accounts more quicklyâwhich could be disadvantageous to some of these households compared with the current system. Other policy proposals include the government directly providing accounts to retail customers. For example, offering banking services through postal offices or providing banking services online to the public through the Federal Reserve, which already provides accounts to banks. Opposition to these proposals often centers on the appropriate role for the government. Some argue that the government should not be competing with the private sector to provide these services to consumers, especially in the competitive banking market. Moreover, government bank accounts may not attract consumer demand. For example, the Treasury Department's myRA account programâwhich provided workers without a work retirement account a vehicle for retirement savingsâclosed after about three years, in part due to lack of participation. Financial education programs or outreach initiatives coordinated by the government, nonprofit organizations, and financial institutions could support financial inclusion as well. Given the importance of emergency savings, in 2019, CFPB Director Kraninger announced that the CFPB wants to focus on increasing consumer savings, through financial education initiatives and joint research projects with the financial industry. In addition, the "Bank On" movementâa coalition between city, state, and federal government agencies, community organizations, financial institutions, and othersâaims to encourage unbanked consumers to open and use bank accounts. Bank accounts associated with the movement must have no overdraft fees, charge a minimal amount of monthly fees, have deposits that are federally insured, and offer traditional banking services, such as direct deposit, debit or prepaid cards, and online banking. Nearly 3 million accounts have been opened through the movement, generally to new bank customers, and consumers tend to actively use these accounts. This topic may continue to be the subject of congressional interest and legislative proposals. In the 116 th Congress, the House Financial Services Committee marked up and ordered reported H.R. 4067 , directing the CFPB to report to Congress on unbanked, underbanked, and underserved consumers. In addition, other legislation introduced proposes establishing an office within the CFPB to work on unbanked and underbanked issues ( H.R. 1285 ) and proposes developing short-term non-retirement savings accounts for consumers with their employers automatically deducting from their paychecks ( S. 1019 , H.R. 2120 , S. 1053 ) or using their tax refund to save ( H.R. 2112 , S. 1018 ). Access to the Credit Reporting System The credit reporting industry collects information on consumers and uses it to estimate the probability of future financial behaviors, such as successfully repaying a loan or defaulting on it. The information collected has largely related to consumers' past financial performance and repayment history on traditional credit products. Consumer files generally do not contain information on consumer income or assets or on alternative financial services. Credit bureaus collect and store payment data reported to them by financial firms, and they or other credit scoring companies use this data to estimate individual consumers' creditworthiness, generally expressed as a numerical "score." The three largest credit bureausâEquifax, Experian, and TransUnionâprovide credit reports nationwide that include repayment histories. Credit reports generally may not include information on items such as race or ethnicity, religious or political preference, or medical history. This industry significantly affects consumer access to financial products, because lenders and other financial firms use consumer data when deciding whether to provide credit or other products to an individual and under what terms. Consumers who find it challenging to enter the traditional credit reporting system face challenges accessing many consumer credit products, such as mortgages or credit cards, because creditors are unable to assess the consumer's credit worthiness. This section examines some consumer credit reporting issues and related developments and policy issues. Credit Invisibles and Unscorables According to the CFPB, credit scores cannot be generated for approximately 20% of the U.S. population due to their limited credit histories. The CFPB categorizes consumers with limited credit histories into several groups. One category of consumers, referred to as credit invisibles , have no credit record at the three nationwide credit reporting agencies and, thus, do not exist for the purposes of credit reporting. Credit invisibles represents 11% of the U.S. adult population, or 26 million consumers (see Figure 2 ). Another category of consumers have a credit record and thus exist, but they cannot be scored or are considered un scorable . Unscorable consumers either have insufficient (short) histories or stale (outdated) histories. The insufficient and stale unscored groups, each containing more than 9 million individuals, collectively represent 8.3% of the U.S. adult population, or approximately 19 million consumers. Limited credit history is correlated with age, income, race, and ethnicity. Many consumers that are credit invisible or unscorable are young. For example, 40% of credit invisibles are under 25 years old. Moreover, consumers who live in lower-income neighborhoods or are black or Hispanic are also disproportionately credit invisible or unscorable compared with the U.S. population. Barriers to Entering the Credit System Most young adults transition into the credit reporting system in their early twentiesâ80% of consumers transition out of credit invisibility before age 25 and 90% before age 30. For young consumers, the most common ways to become credit visible is through credit cards, student loans, and piggybacking (i.e., becoming a joint account holder or authorized user on another person's account, such as a parent's account). Young adults in LMI neighborhoods tend to make the transition to credit visibility at older ages than young adults in higher-income neighborhoods. In urban areas, consumers over 25 years old from LMI neighborhoods have higher rates of credit invisibility than those in middle and upper income areas. In addition, the highest rates of credit invisibility for consumers over 25 years old are in rural areas, and these rates do not vary much based on neighborhood income. Credit invisible consumers in LMI and rural areas are less likely to enter the credit bureaus through a credit card than credit invisible consumers in other parts of the country, possibly because piggybacking is notably less common in LMI communities. Moreover, using student loans to become credit visible is also less common in LMI areas. Recent immigrants also have trouble entering the credit system when they come to the United States. Existing credit history from other countries does not transfer to the U.S. system. In addition, immigrants' alternative forms of identification, such as the Individual Taxpayer Identification Numbers (ITINs) might not be accepted by some financial services providers. Expanding Credit Visibility Policy Issues Consumers without a credit record have trouble accessing credit, but without access to credit, a consumer cannot establish a credit record. In general, there are two ways that policymakers tend to approach this issue, either by (1) expanding uptake of financial products reported in the current system or (2) expanding the types of information in the credit reporting system using alternative data. Expanding Use of Currently Reported Products The first approach often focuses on financial education and entry-level products. Financial education and partnerships between financial services providers and nonprofit groups may help consumers learn how credit reporting works, develop a credit history, and become scorable. For example, financial wellness programs at workplaces are a growing way to deliver these types of programs. Yet financial education, coaching, and counseling can be expensive and difficult to provide to consumers. On the financial product side, tensions exist between expanding credit access to build a credit history and upholding consumer protection. For example, credit cards are the most common first product reported to credit bureaus, yet consumer protection regulations, such as the CARD Act of 2009, reduce young consumers' access to credit cards. Stakeholders believe that large financial services providers should develop entry-level credit products that are profitable and sustainable, without sacrificing consumer protections. For example, secured credit cardsâwhich are "secured" by a consumer deposit, so the issuer faces little risk of defaultâcan help establish a credit history, but currently, are less likely to move consumers to credit visibility than unsecured (regular) credit cards. Some consumer advocates believe that the security deposit is an obstacle for lower-income consumers. This issue epitomizes the difficulty in developing credit-building financial products for unscorable consumers that are safe, accessible, and prudent for the financial institution. Using Alternative Data in Credit Reports Alternative data generally refers to data that the national consumer reporting agencies do not traditionally use (e.g., information other than traditional financial institution credit repayments) to calculate a credit score. It can include both financial and nonfinancial data. In a 2017 Request for Information, the CFPB included examples of alternative data, such as payments on telecommunications; rent or utilities; checking account transaction information; educational or occupational attainment; how consumers shop, browse, or use devices; and social media information. Alternative data could potentially be used to expand access to credit for current credit invisible or unscorable consumers, but it also could create data security risks or consumer protection violations. Alternative data used in credit scoring could increase accuracy, visibility, and scorability in credit reporting by including additional information beyond that which is traditionally used. The ability to calculate scores for the credit invisible or unscoreable consumer groups could allow lenders using these scores to better determine the creditworthiness of people in these groups. Arguably, this would increase access toâand lower the cost ofâcredit for some credit invisible or unscorable individuals, as lenders using alternative data are able to find new creditworthy consumers. However, in cases where the alternative data includes negative or derogatory information, it has the potential to harm some consumers' existing credit scores. Some prospective borrowers may be unaware that alternative data has been used in credit decisions, raising privacy and consumer protection concerns. Moreover, alternative data may pose fair lending risks if the data used are correlated with characteristics, such as race or ethnicity. Using alternative data for credit reporting raises regulatory compliance questions, which may be why adaption of alternative data in the credit reporting system is currently limited. The main statute regulating the credit reporting industry is the Fair Credit Reporting Act (FCRA), which establishes consumers' rights in relation to their credit reports, as well as permissible uses of credit reports. It also imposes certain responsibilities on those who collect, furnish, and use the information contained in consumers' credit reports. Alternative data providers outside of the traditional consumer credit industry may find FCRA data furnishing requirements burdensome. Some alternative data may have accuracy issues, and managing consumer disputes requires time and resources. These regulations may discourage some organizations from furnishing alternative data, even if the data could help some consumers become scorable or increase their credit scores. In an effort to address such concerns, many consumer data industry firms use alternative data only when consumers' opt-in. Using alternative data for credit reporting may continue to be the subject of congressional interest and legislative proposals. In the 116 th Congress, the House Financial Services Committee marked up and ordered reported H.R. 3629 , which among other things directs the CFPB to report to Congress on the impact of using nontraditional data on credit scoring. In addition, other legislation introduced allows types of alternative data to be furnished to the credit bureaus ( S. 1828 , H.R. 4231 ). Access to Affordable Small-Dollar Credit Short-term, small-dollar loans are consumer loans with relatively low initial principal amounts, often less than $1,000, with relatively short repayment periods, generally for a small number of weeks or months. Small-dollar loans can be offered in various forms and by both traditional financial institutions (e.g., banks) and alternative financial services providers (e.g., payday lenders). Many U.S. consumers do not have access to affordable small-dollar credit; often for these consumers, small-dollar credit is either expensive or difficult to access. The extent to which borrowers' financial situations would be harmed by using expensive credit or having limited access to credit is widely debated. Credit is an important way households pay for unexpected expenses and compensate for emergencies, such as a car or home repair, a medical expense, or a pay cut. Credit that can be paid back flexibly is particularly valued by consumers, especially those living paycheck to paycheck. Research suggests that access to this type of short-term credit can help households during short-term emergencies, yet unsustainable debt can harm households. Consumer groups often raise concerns regarding the affordability of small-dollar loans. Some borrowers may fall into debt traps , situations where borrowers repeatedly roll over existing loans into new loans and find it difficult to repay outstanding balances. Regulations aimed at reducing costs for borrowers may result in higher costs for lenders, possibly limiting or reducing credit availability for financially distressed individuals. This section focuses on expanding access to affordable small-dollar credit. Policymakers continue to be interested in ways to increase access to affordable credit because it is an important step in achieving financial stability. Access to Traditional Bank Credit Products About 80% of U.S. households have access to bank or traditional financial institution credit products, such as a general or store credit card, a mortgage, an auto loan, a student loan, or a bank personal loan. Credit cards are the most common form of credit, and they are what most households use for small-dollar credit needs. In general, banks require a credit score or other information about the consumer to prudently underwrite a loan. Scorable and credit-worthy consumers are in a position to gain access to credit from traditional sources. Financial institutions also sometimes provide consumer loans to existing customers, even if the borrower lacks a credit score (e.g., a consumer with a checking account who is a student or young worker). Some institutions make these loans to build long-term relationships. The remaining 20% of households do not have access to any traditional bank credit products, generally because they are either unscorable or have a blemished credit history. They are more likely to be unbanked, low-income, and minority households. Not having access to traditional bank credit is also correlated with age, formal education, disability status, and being a foreign-born noncitizen. According to an FDIC estimate, 12.9% of households had unmet demand for bank small-dollar credit. Of these households interested in bank credit, over three-quarters were current on bills in the last year, suggesting these households might be creditworthy. Policymakers often face a trade-off between consumer protection and access to credit when regulating the banking sector. Consumer protection laws at the state and federal levels often limit the profitability of small-dollar, short-term loans. For example, legislation such as the CARD Act of 2009 placed restrictions on subprime credit card lending. Small-dollar, short-term loans can be expensive for banks to provide. Although many of the underwriting and servicing costs are somewhat fixed regardless of size, smaller loans earn less total interest income, making them more likely to be unprofitable. Moreover, excluded consumers often are either unscorable or have a blemished credit history, making it difficult for banks to prudently underwrite loans for these consumers. In addition, banks face various regulatory restrictions on their permissible activities, in contrast to nonbanks. For these reasons, many banks choose not to offer credit products to some consumers. Nevertheless, banks have demonstrated interest in providing certain small-dollar financial services such as direct deposit advances, subprime credit cards, and overdraft protection services. In these cases, banks may face regulatory disincentives to providing these services, because bank regulators and legislators have sometimes demonstrated concerns about banks providing these products. For example, before 2013, some banks offered deposit advance products to consumers with bank accounts, which were short-term loans paid back automatically out of the borrower's next qualifying electronic deposit. Research findings from the CFPB suggest that although deposit advance was designed to be a short-term product, many consumers used it intensively. In the CFPB's sample, the median user was in debt for 31% of the year. Because of this sustained use and concerns about consumer default risk, in 2013, the Office of the Comptroller of the Currency (OCC), FDIC, and Federal Reserve issued supervisory guidance, advising banks to make sure deposit advance products complied with consumer protection and safety and soundness regulations. Many banks subsequently discontinued offering deposit advances. At the same time, regulators and policymakers have implemented policies aimed at increasing credit availability. Regulation implemented pursuant to the CRA (the 1977 law discussed in the "Access to Checking and Other Banking Accounts" section above) encourages banking institutions to meet the credit needs of consumers in the areas they serve, particularly in LMI neighborhoods that tend to include these excluded consumers. However, the CRA applies only to individuals with an established relationship with a bank, excluding unbanked consumers in an area. Likewise, many small-dollar loan products may not be considered qualifying activities. Moreover, the CRA does not encourage banks from engaging in unprofitable activities, so the incentives it creates might be limited. Credit Alternative Financial Products Credit alternative financial products include payday loans, pawn shop loans, auto title loans, and other types of loan products from nonbank providers. According to the FDIC, 6.9% of American households used a credit alternative financial service in 2017. Households that rely on credit alternative financial services are more likely to be lower-income, younger, and a racial or ethnic minority compared with the general U.S. population. Some argue that credit alternative financial products are expensive and are more likely than bank products to lead to debt traps. Bank small-dollar credit may be less expensive for prime borrowers with credit histories or relationships with banks. For other consumers, credit alternative financial products might better serve their needs due to fee structure or less stringent underwriting. Yet, some of these consumers may not have access to bank products and thus rely on credit alternative financial products for their credit needs. New Technology and Market Developments New technology may have the potential to help expand access to affordable credit to underserved consumers. For example, new nonbank digital or mobile-based financial products may lower the cost to provide small-dollar loans, making it easier to expand credit access to the underserved. Other nonbank products try to reduce default risk, for example, through employer-based lending models, to expand access to credit for more consumers. In addition, some lenders choose not to rely solely on the credit reporting system, and instead use alternative data directly to make credit decisions. New products that use alternative data on prospective borrowersâeither publicly or with the borrower's permissionâmay be able to better price lenders' default risk, which could expand credit access or make credit cheaper for some consumers. Recent findings suggest that some types of alternative dataâsuch as education, employment, and cash-flow informationâmight be promising ways to expand access to credit. For example, initial results from the Upstart Network's credit model, which uses alternative data to make credit and pricing decisions, shows that the model expands the number of consumers approved for credit, lowers the rate consumers pay for credit on average, and does not increase disparities based on race, ethnicity, gender, or age. Moreover, another recent study suggests that cash-flow data may more accurately predict creditworthiness, and its use would expand credit access to more borrowers, while meeting fair lending rules. One market segment is particularly illustrative of this practice. With the proliferation of internet access and data availability, some new lendersâoften referred to as marketplace lenders or fintech lendersârely on online platforms and frequently underwrite loans using alternative data. Although fintech lending remains a small part of the consumer lending market, it has grown rapidly in recent years. According to the Government Accountability Office (GAO), "in 2017, personal loans provided by these lenders totaled about $17.7 billion, up from about $2.5 billion in 2013." In addition, incumbent bank and nonbank lenders have adopted certain of these technologies and practices to varying degrees, and in some cases have partnered or contracted with fintech companies to build or run online, algorithmic platforms. Yet, despite the potential of new technology in small-dollar lending markets, these technologies also create risks for consumers. For example, new digital technology exposes consumers to data security risks. In addition, lenders' alternative data used to make credit decisions could result in disparate impacts or other consumer protection violations. Possible Policy Responses Policymakers and observers will likely continue to explore ways to make affordable and safe credit accessible to a greater portion of the population (in addition to including more people in the credit reporting system, as discussed in a previous section of the report). Changes to bank regulation could encourage more banking institutions to increase access to credit to underserved consumers. For example, some question the effectiveness of how the CRA is currently implemented, particularly with regard to short-term, small-dollar loans. As bank regulators consider updating the CRA, the Federal Reserve said that another area they are considering changing, due to public feedback, is expanding CRA-eligible products and services, such as payday loan alternatives and other small-dollar short-term loans for LMI consumers. Yet, as stated earlier in the report, bank regulators need to balance new CRA criteria with federal prudential regulations for safety and soundness , which requires banks to prudently undertake CRA-qualified activities and not engage in activities that are likely unprofitable to the bank. Reducing regulatory barriers may also allow more banking institutions to increase access to credit to underserved consumers. Financial regulators have taken recent steps to encourage banks to re-enter the small-dollar lending market. In October 2017, the OCC rescinded the 2013 guidance, and in May 2018 issued a new bulletin to encourage their banks to enter this market. In November 2018, the FDIC solicited advice about how to encourage more banks to offer small-dollar credit products. It is unclear whether these efforts will encourage banks to enter the small-dollar market with a product similar to deposit advance. In terms of using new technology and alternative data in consumer lending, questions exist about how to comply with fair lending and other consumer protection regulations. Currently, the federal financial regulators are monitoring these new technologies, but they have not provided detailed guidance. In February 2017, the CFPB requested information from the public about the use of alternative data and modeling techniques in the credit process. Information from this request led the CFPB to outline principles for consumer-authorized financial data sharing and aggregation in October 2017. These nine principles include, among other things, consumer access and usability, consumer control and informed consent, and data security and accuracy. According to the GAO, both fintech lenders and federally regulated banks that work with fintech lenders reported that additional regulatory clarification would be helpful. Therefore, the GAO recommended "that the CFPB and the federal banking regulators communicate in writing to fintech lenders and banks that partner with fintech lenders, respectively, on the appropriate use of alternative data in the underwriting process." Lastly, some advocate for the federal government providing small-dollar short-term loans to consumers directly if the private sector leaves some underserved, for example, through postal offices. Yet, providing credit to consumers is more risky than providing bank accounts or other banking services because some consumers will default on their loans. Opponents of the government directly providing consumer loans often centers on concerns about the federal government managing the credit risks it would undertake. These opponents generally argue that the private sector is in a more appropriate position to take these risks. Conclusion Access to bank and other payment accounts, the credit reporting system, and affordable short-term small-dollar credit are generally considered foundational for households to manage their financial affairs, improve their financial well-being, and graduate to wealth building activities in the future. In the United States, robust consumer credit markets allow most consumers to access financial services and credit products to meet their needs in traditional financial markets. Yet currently, consumers tend to rely on family or community connections to get their first bank account, establish a credit history, and gain access to affordable and safe credit. Given the importance of financial inclusion to financial well-being, and the challenges facing certain segments of the population, this topic is likely to continue to be the subject of congressional interest and legislative proposals. As markets develop and technology continues to change, new financial products have the potential to lower costs and expand access. Yet, as this report described, relevant laws and regulations may need to be reconsidered or updated in response to these technological developments. Moreover, policymakers may consider whether other policy changes could help expand consumers' affordable access to these financial products and services. Disagreements will continue to exist around whether government programs or regulation should be used to directly support financial inclusion or whether laws and regulations make it more difficult for the private sector to create new or existing products targeted at underserved consumers.	Summary:	gov_report	1,024	null	81
crs_R45789	crs_R45789_0	You are given a report by a government agency. Write a one-page summary of the report. Report: T he Constitution grants Congress enormous power and freedom to engage in what we now refer to as budgeting. First, the Constitution grants Congress the power of the purse but does not prescribe or require any specific budgetary legislation or budgetary outcomes. Further, the Constitution allows the House and Senate to determine the rules of their internal proceedings but does not prescribe or establish any budgetary rules or restrictions. Congress has thus developed certain types of budgetary legislation as well as rules and practices that govern the content and consideration of that budgetary legislation. This collection of budgetary legislation, rules, and practices is referred to as the congressional budget process. Some have criticized the current congressional budget process and the budget outcomes that it has produced and have suggested that Congress adopt a more long-term budget focus. There is no consensus on what is meant by long term . For example, advocates of biennial budgeting (i.e., two-year budget resolutions, two-year appropriations legislation) sometimes characterize a two-year cycle as long-term budgeting. Some view the current 10-year budget window (described below) as being a form of long-term budgeting, while others consider long-term budgeting to span a lengthier period, such as 30 years or 50 years. There is also no general consensus on what is required by long-term budgeting. Would it simply require Congress to stay informed of the long-term projections for spending, revenue, deficits, and debt? Would it require Congress to affirmatively vote annually on policies that are projected to continue year to year? Would it require Congress to adopt a long-term budget plan or long-term fiscal targets (e.g., debt-to-GDP ratio limits)? And if targets were agreed upon, would it require automatic triggers to enforce fiscal targets (e.g., automatic spending cuts or automatic tax increases)? Rationale for Long-Term Budgeting Members of Congress, the Administration, and outside groups have expressed concern over projected levels of deficits and debt. The Congressional Budget Office (CBO) recently stated that federal deficits and debt held by the public, which are higher than average, are projected to increase sharply over the next 30 years. CBO states that deficits would rise from 4.2% of gross domestic product (GDP) in 2019 to 8.7% in 2049. According to CBO, federal debt held by the public is currently 78% of GDP, significantly higher than the 50-year average of 42%. Under current law, budget deficits would cause the debt to be 92% of GDP by 2029 and 144% of GDP by 2049, which "would be the highest in the nation's history by far." If policymakers want debt in 2049 to equal its current share of GDP (78%), the deficit would need to be reduced by $400 billion every year until then, CBO has projected. Some have argued that the current congressional budget process has created, or at least exacerbated, the projected long-term deficit and debt challenges. One recurring criticism is that the process does not encourage or require the consideration of long-term budgetary outcomes. Some argue that the lack of a formal requirement for Congress to consider long-term budget outcomes discourages long-term planning and encourages policy outcomes that are desirable in the short term at the expense of the long-term budget situation. Further, they argue that the current process does not even deter or prohibit Congress from enacting legislation that worsens the long-term deficit and debt projections. They argue that Congress needs to adopt a long-term budget focus. This report provides information on existing resources and congressional rules related to a long-term budget focus. Challenges Associated with Long-Term Budgeting There are potential challenges or obstacles associated with the adoption of a long-term budget focus within the current congressional budget process. Many think of the budget as being decided annually, but most policies that dictate how much will be spent and collected are fixed. Mandatory spending makes up 70% of total spending, is generally set by laws enacted years or decades ago, and remains in effect without the need for annual congressional approval. (Mandatory spending includes Medicare, Social Security, Medicaid, and interest on the debt.) Likewise, the collection of revenue as prescribed by the tax code continues without the need for legislative action. These mandatory spending and revenue policies change only if Congress and the President enact legislation making such changes. Under current law, these fixed spending and revenue policies are projected to result in increasing deficits and debt. Many argue that addressing rising deficit and debt in the long term would require policy changes. Another challenge associated with long-term budgeting is that any projected levels of spending and revenue are inherently uncertain. The further out spending and revenue are projected, the more uncertain they become. For example, within CBO's long-term budget projections (referenced above), the agency notes that such projections are "very uncertain." CBO concludes that while debt as a percentage of GDP in 2049 would likely be much greater than it is today if current laws remain unchanged, many factors (e.g., labor force participation, productivity in the economy, interest rates on federal debt, and health care costs per person) may alter actual outcomes. Other challenges associated with long-term budgeting include the difficulty of budgeting for unforeseen events (such as military engagements, natural disasters, and downturns in the economy); underlying projection assumptions; and the problem of setting fiscal policy or establishing long-term goals that a future Congress may not support. Information Available to Congress on the Long-Term Budget Outlook Information and data are publicly available to assist Congress in understanding the projected long-term budget situation. Projections are available that show spending, revenue, deficits, and debt in the long term, and in some instances, data evaluating the long-term outlook of specific programs are available. Selected examples of that information are described below. General Budgetary Projections for the Upcoming 10-Year Period CBO regularly publishes budgetary and economic projections, which are formally known as the annual Budget and Economic Outlook but are often referred to in Congress as the annual baseline. These baseline projections cover a 10-year period, which is often referred to as the budget window. These projections are based on the assumption that current laws regarding federal spending and revenues will generally remain in place. The Budget and Economic Outlook includes information on projected spending, revenue, deficits, debt, economic growth, and alternative fiscal scenarios. Congress typically uses this baseline as a benchmark against which it measures legislative proposals. The Office of Management and Budget (OMB) also publishes budgetary and economic projections. As required by law, OMB includes information in the President's annual budget request on projected spending and revenue. Such projections typically span 10 years. In addition to the information provided on the 10-year budgetary outlook under current law, CBO provides Congress with cost estimates of certain proposed legislation. The Congressional Budget Act of 1974 (the Budget Act) requires that the CBO provide an estimate for any bill reported from committee. These cost estimates provide information on how the legislation would affect spending, revenues, and the deficit over the next 10 years relative to the baseline. Such cost estimates assist Congress in adhering to the budget resolution and other points of order, described below. General Budgetary Projections for the Upcoming Decades Each year, CBO provides Congress with its Long-Term Budget Outlook , which shows the effects of demographic trends, economic developments, and rising health care costs on federal spending, revenues, and deficits over the next 30 years. The report also shows the long-term budgetary and economic effects of some alternative policies. In addition, in its cost estimates, CBO is required to note whether the underlying legislation would increase deficits in future decades. To assist the Senate in complying with its "long-term deficit rule" (described below), CBO notes whether the legislation would increase on-budget deficits in any of the four consecutive 10-year periods beginning with 2030. OMB provides long-term projections in the President's annual budget request in a section titled, "Long Term Budget Outlook." These projections recently spanned a 25-year period and include projections under different fiscal scenarios. The Government Accountability Office also provides information and interactive tools on projected spending, revenue, deficits, and debt over the next 70 years. Spending Projections for Individual Programs Long-term information and projections are available for some individual programs. For example, the Social Security and Medicare Trustees issue respective actuarial estimates of each trust fund for the next 75 years. These reports contain both short- and long-range projections of annual program expenditures and payroll tax receipts. There are also estimates of the actuarial deficits over the next 75 years that represent the shortfall between the program's projected expenditures and income. In addition, the CBO provides long-term projections on specific programs. For example, CBO publishes recurring reports on the long-term projections for Social Security, the long-term implications of the Future Years Defense Program, and 10-year costs of U.S. nuclear forces. Current Congressional Tools for Long-Term Budgeting The Constitution grants Congress the power of the purse. In carrying out such duties, Congress has developed budget-related rules and legislation as well as committees to carry out this responsibility. Some of these tools might be used in long-term budgeting. Congressional Committees Congressional committees serve Congress by specializing in particular policy areas. They do this by gathering information, making policy recommendations, and performing oversight. In the course of this work, committees study and make recommendations related to the long-term implications of the specific programs within their jurisdiction. For example, the Senate Finance Committee and the House Ways and Means Committee may hold hearings on the long-term outlook for Social Security. In addition, the House and Senate each have a Budget Committee, established by the Budget Act. They enjoy jurisdiction over the budget resolution, the budget reconciliation process (described below), and the budget process generally. As stated by the Senate Budget Committee, "The [Budget] Committee, the budget resolution and reconciliation process, and enforcement authorities were created to enable Congress to create, enforce, and manage the annual Federal budget, including all types of Federal spending and revenues." The Budget Committees may impact the budget and the budget process in many ways. They are responsible for developing and drafting a budget plan in the form of a budget resolution. A budget resolution agreed to by the House and Senate may trigger the budget reconciliation process, which has been used to make legislative changes reducing future deficits (described below). During the development of the budget plan, the Budget Committees gather information on the budget from many sources. They review the President's budget submission, and the director of OMB typically testifies before each Budget Committee. Additionally, the committees closely review CBO's annual budget and economic outlook for the upcoming 10 years, and the director of CBO testifies before the Budget Committees to answer questions. The Budget Committees also hold hearings and consider legislation related to the budget process and the budget as a whole. This has included examining the long-term budget outlook and the potential for a more long-term budget process. Since the Budget Committees enjoy jurisdiction over the budget process generally, they would likely be involved in any efforts to alter the current process. The Budget Resolution and the Budget Reconciliation Process The budget resolution reflects an annual agreement between the House and Senate on spending and revenue levels for the upcoming fiscal year and at least four additional years. The budget resolution does not become law. Therefore, no money is spent or collected as a result of its adoption. Instead, it is an agreement between the House and Senate meant to assist Congress in considering an overall budget plan. Once agreed to by both chambers in the exact same form, the budget resolution creates parameters that may be enforced in two primary ways: (1) by points of order and (2) by using the budget reconciliation process. Enforcement through Points of Order Once the budget resolution has been agreed to by both chambers, certain levels contained in it are enforceable through points of order. This means that if legislation is being considered on the House or Senate floor that would violate certain levels contained in the budget resolution, a Member may raise a point of order against the consideration of that legislation. The Budget Act requires that the budget resolution include the following budgetary levels for the upcoming fiscal year and at least four additional years (often referred to as out years): total spending, total revenues, the surplus/deficit, new spending for each major functional category, the public debt, and (in the Senate only) Social Security spending and revenue levels. The Budget Act also requires that the aggregate amounts of spending recommended in the budget resolution be allocated among committees. Enforcement through the Budget Reconciliation Process While points of order can be effective in enforcing the budgetary goals outlined in the budget resolution, they can be raised against legislation only when it is pending on the House or Senate floor. Moreover, points of order cannot limit direct spending or revenue levels resulting from current law. Often, for the budgetary levels in the budget resolution to be achieved, Congress must pass legislation to alter the levels of revenue and/or direct spending resulting from existing law. In this situation, Congress seeks to reconcile the levels of direct spending and revenue under existing law with those budgetary levels expressed in the budget resolution. To assist in this process, the budget reconciliation process allows special consideration of legislation that would accomplish those budgetary levels expressed in the budget resolution. If Congress intends to use the reconciliation process, reconciliation directives must be included in the annual budget resolution. These directives instruct individual committees in the House and Senate to develop and report legislation that would change laws within their jurisdiction related to direct spending, revenue, or the debt limit. Such reconciliation legislation is then eligible to be considered under special expedited procedures in both the House and Senate. These procedures are especially important in the Senate as they include a limit on debate time. This means the legislation does not require the support of three-fifths of Senators to bring debate to a close. Since 1980, Congress has sent the President 25 reconciliation acts, 21 of which were signed into law. Reconciliation has most often been used to enact legislation that was projected to reduce deficits. For example, between 1981 and 1984, four reconciliation bills were enacted that were each projected to decrease the deficit. Reconciliation legislation can be used to make policy changes that are temporary or permanent, therefore affecting the long-term budget. For a brief description of each reconciliation bill enacted into law, see CRS Report R40480, Budget Reconciliation Measures Enacted Into Law: 1980-2017 , by Megan S. Lynch. While the reconciliation process has been used to enact legislation that was projected to increase the net deficit, a Senate rule (known as the Byrd rule) prohibits reconciliation legislation from increasing the net deficit outside the "budget window." (The budget window is the period covered by the underlying budget resolution and recently has spanned 10 years. ) Additional Rules and Points of Order The House and Senate have many additional budget-related points of order that seek to restrict or prohibit consideration of different types of budgetary legislation, some of which have long-term implications. These points of order are found in various places such as the Budget Act, House and Senate standing rules, and past budget resolutions. For example, the House and Senate have pay-as-you-go (PAYGO) rules that prohibit the consideration of direct spending or revenue legislation that is projected to increase the deficit in either of two time periods: (1) the period consisting of the current fiscal year, the budget year, and the four ensuing fiscal years following the budget year and (2) the period consisting of the current fiscal year, the budget year, and the ensuing nine fiscal years following the budget year. Additionally, in the Senate, a rule exists that is often referred to as the "long-term deficit point of order." It prohibits the consideration of legislation that would cause a net increase in deficits of more than $5 billion in any of the four consecutive 10-year periods beginning after the upcoming 10 years. Previously, the House had a similar rule that prohibited consideration of legislation that would cause a net increase in mandatory spending in excess of $5 billion during the same period. The House rule is no longer in effect. Additional Budget Enforcement Mechanisms Currently in Effect In addition to points of order, there are other types of budget enforcement mechanisms that seek to restrict or prohibit the enactment of budgetary legislation over the long term. Legal Limits on Annual Discretionary Spending The Budget Control Act of 2011 (BCA; P.L. 112-25 ) established statutory limits on discretionary spending for a 10-year period ( FY2012-FY2021 ) . (S imilar discretionary spending limits were in effect between FY1991 and FY2002.) The BCA sets separate annual limits for defense discretionary and nondefense discretionary spending. The defense category consists of discretionary spending in budget function 050 (national defense) only. The nondefense category includes discretionary spending in all other budget functions. If discretionary appropriations are enacted that exceed a statutory limit for a fiscal year, across-the-board reductions (i.e., sequestration) of nonexempt budgetary resources are triggered to eliminate the excess spending within the applicable category. Statutory PAYGO In February 2010, the Statutory Pay-As-You-Go Act of 2010 ( P.L. 111-139 ) was enacted establishing a budget enforcement mechanism commonly referred to as "Statutory PAYGO." Statutory PAYGO is generally intended to discourage enactment of legislation that is projected to increase the on-budget deficit over five and 10 years. To enforce Statutory PAYGO, OMB is required to record the budgetary effects of newly enacted revenue and direct spending legislation over the course of a year. After the end of a congressional session, OMB is required to issue an annual PAYGO report noting whether a debit has been recorded for the current budget year. If no such debit is found, no action occurs. If a debit is found, however, the President must issue a sequestration order, which automatically implements across-the-board cuts to non-exempt direct spending programs to compensate for the amount of the debit. Selected Budget Enforcement Related Mechanisms No Longer inÂ Effect While the following budget related mechanisms are no longer in effect, they provide insight into Congress's past budget process reform efforts and the desire for long-term budgeting. Statutory Deficit Limits In 1985, the Balanced Budget and Emergency Deficit Control Act ( P.L. 99-177 )âreferred to as the Gramm-Rudman-Hollings Actâemployed budget process mechanisms in an attempt to force Congress and the President to balance the budget within a six-year period by specifying annual deficit limits for each fiscal year (1986-1991). The act required that both the President and Congress adhere to the deficit limits when developing their budget plans. The act did not specify what policy changes should be made to achieve deficit reduction, leaving Congress and the President to negotiate over possible revenue increases and spending decreases. To enforce the specified deficit limits, the act set forth a specific process for the cancellation of spending by sequestration in the event that the deficit limits were breached. These deficit targets and related enforcement mechanism were amended by the Balanced Budget and Emergency Deficit Control Act of 1987 ( P.L. 100-119 ) and then were fundamentally revised by the Budget Enforcement Act of 1990 ( P.L. 101-508 ), which replaced the focus on deficit targets under Gramm-Rudman-Hollings with a two-pronged approach to budgetary enforcement: the implementation of PAYGO procedures to control new direct spending and revenue legislation and discretionary spending limits to control the level of discretionary spending. For more information, see CRS Report R41901, Statutory Budget Controls in Effect Between 1985 and 2002 , by Megan S. Lynch. The Joint Select Committee on Deficit Reduction (111th Congress) The BCA created a Joint Select Committee on Deficit Reduction. The committee comprised 12 Members from the House and Senateâthree chosen by each of the chambers' party leaders. The committee was instructed to develop legislation to reduce the budget deficit by at least $1.5 trillion over the 10-year period FY2012-FY2021. Legislation reported by the committee would then be eligible to be considered under special expedited procedures in both the House and Senate. These procedures are especially important in the Senate since they include a limit on debate time. This means the legislation does not require the support of three-fifths of Senators to bring debate to a close. The BCA stipulated that if a measure meeting specific requirements was not enacted by January 15, 2012, then an automatic process would be triggered to enforce the budgetary goal established for the committee. The committee did not reach agreement on such legislation, and while the committee is no longer in effect, the automatic process triggered by the lack of enactment still remains. This comprises annual downward adjustments of the discretionary spending limits (described above) and sequester of nonexempt mandatory spending programs through FY2027. The Joint Select Committee on Budget and Appropriations Process Reform (115th Congress) The Bipartisan Budget Act of 2018 ( P.L. 115-123 ) created the Joint Select Committee on Budget and Appropriations Process Reform. The committee comprised 16 Members from the House and Senateâfour chosen by each of the chambers' party leaders. The committee was tasked with formulating recommendations and legislative language to "significantly reform the budget and appropriations process." The committee held a markup on draft legislation that concluded on November 29, 2018. The principal recommendation in the draft provided that the budget resolution would be adopted for a two-year cycle rather than the current annual cycle. The committee ultimately did not vote to report the bill as amended, and it was never considered by the full house. Summary:	null	96	24,001	24,003	24,003	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: T he Constitution grants Congress enormous power and freedom to engage in what we now refer to as budgeting. First, the Constitution grants Congress the power of the purse but does not prescribe or require any specific budgetary legislation or budgetary outcomes. Further, the Constitution allows the House and Senate to determine the rules of their internal proceedings but does not prescribe or establish any budgetary rules or restrictions. Congress has thus developed certain types of budgetary legislation as well as rules and practices that govern the content and consideration of that budgetary legislation. This collection of budgetary legislation, rules, and practices is referred to as the congressional budget process. Some have criticized the current congressional budget process and the budget outcomes that it has produced and have suggested that Congress adopt a more long-term budget focus. There is no consensus on what is meant by long term . For example, advocates of biennial budgeting (i.e., two-year budget resolutions, two-year appropriations legislation) sometimes characterize a two-year cycle as long-term budgeting. Some view the current 10-year budget window (described below) as being a form of long-term budgeting, while others consider long-term budgeting to span a lengthier period, such as 30 years or 50 years. There is also no general consensus on what is required by long-term budgeting. Would it simply require Congress to stay informed of the long-term projections for spending, revenue, deficits, and debt? Would it require Congress to affirmatively vote annually on policies that are projected to continue year to year? Would it require Congress to adopt a long-term budget plan or long-term fiscal targets (e.g., debt-to-GDP ratio limits)? And if targets were agreed upon, would it require automatic triggers to enforce fiscal targets (e.g., automatic spending cuts or automatic tax increases)? Rationale for Long-Term Budgeting Members of Congress, the Administration, and outside groups have expressed concern over projected levels of deficits and debt. The Congressional Budget Office (CBO) recently stated that federal deficits and debt held by the public, which are higher than average, are projected to increase sharply over the next 30 years. CBO states that deficits would rise from 4.2% of gross domestic product (GDP) in 2019 to 8.7% in 2049. According to CBO, federal debt held by the public is currently 78% of GDP, significantly higher than the 50-year average of 42%. Under current law, budget deficits would cause the debt to be 92% of GDP by 2029 and 144% of GDP by 2049, which "would be the highest in the nation's history by far." If policymakers want debt in 2049 to equal its current share of GDP (78%), the deficit would need to be reduced by $400 billion every year until then, CBO has projected. Some have argued that the current congressional budget process has created, or at least exacerbated, the projected long-term deficit and debt challenges. One recurring criticism is that the process does not encourage or require the consideration of long-term budgetary outcomes. Some argue that the lack of a formal requirement for Congress to consider long-term budget outcomes discourages long-term planning and encourages policy outcomes that are desirable in the short term at the expense of the long-term budget situation. Further, they argue that the current process does not even deter or prohibit Congress from enacting legislation that worsens the long-term deficit and debt projections. They argue that Congress needs to adopt a long-term budget focus. This report provides information on existing resources and congressional rules related to a long-term budget focus. Challenges Associated with Long-Term Budgeting There are potential challenges or obstacles associated with the adoption of a long-term budget focus within the current congressional budget process. Many think of the budget as being decided annually, but most policies that dictate how much will be spent and collected are fixed. Mandatory spending makes up 70% of total spending, is generally set by laws enacted years or decades ago, and remains in effect without the need for annual congressional approval. (Mandatory spending includes Medicare, Social Security, Medicaid, and interest on the debt.) Likewise, the collection of revenue as prescribed by the tax code continues without the need for legislative action. These mandatory spending and revenue policies change only if Congress and the President enact legislation making such changes. Under current law, these fixed spending and revenue policies are projected to result in increasing deficits and debt. Many argue that addressing rising deficit and debt in the long term would require policy changes. Another challenge associated with long-term budgeting is that any projected levels of spending and revenue are inherently uncertain. The further out spending and revenue are projected, the more uncertain they become. For example, within CBO's long-term budget projections (referenced above), the agency notes that such projections are "very uncertain." CBO concludes that while debt as a percentage of GDP in 2049 would likely be much greater than it is today if current laws remain unchanged, many factors (e.g., labor force participation, productivity in the economy, interest rates on federal debt, and health care costs per person) may alter actual outcomes. Other challenges associated with long-term budgeting include the difficulty of budgeting for unforeseen events (such as military engagements, natural disasters, and downturns in the economy); underlying projection assumptions; and the problem of setting fiscal policy or establishing long-term goals that a future Congress may not support. Information Available to Congress on the Long-Term Budget Outlook Information and data are publicly available to assist Congress in understanding the projected long-term budget situation. Projections are available that show spending, revenue, deficits, and debt in the long term, and in some instances, data evaluating the long-term outlook of specific programs are available. Selected examples of that information are described below. General Budgetary Projections for the Upcoming 10-Year Period CBO regularly publishes budgetary and economic projections, which are formally known as the annual Budget and Economic Outlook but are often referred to in Congress as the annual baseline. These baseline projections cover a 10-year period, which is often referred to as the budget window. These projections are based on the assumption that current laws regarding federal spending and revenues will generally remain in place. The Budget and Economic Outlook includes information on projected spending, revenue, deficits, debt, economic growth, and alternative fiscal scenarios. Congress typically uses this baseline as a benchmark against which it measures legislative proposals. The Office of Management and Budget (OMB) also publishes budgetary and economic projections. As required by law, OMB includes information in the President's annual budget request on projected spending and revenue. Such projections typically span 10 years. In addition to the information provided on the 10-year budgetary outlook under current law, CBO provides Congress with cost estimates of certain proposed legislation. The Congressional Budget Act of 1974 (the Budget Act) requires that the CBO provide an estimate for any bill reported from committee. These cost estimates provide information on how the legislation would affect spending, revenues, and the deficit over the next 10 years relative to the baseline. Such cost estimates assist Congress in adhering to the budget resolution and other points of order, described below. General Budgetary Projections for the Upcoming Decades Each year, CBO provides Congress with its Long-Term Budget Outlook , which shows the effects of demographic trends, economic developments, and rising health care costs on federal spending, revenues, and deficits over the next 30 years. The report also shows the long-term budgetary and economic effects of some alternative policies. In addition, in its cost estimates, CBO is required to note whether the underlying legislation would increase deficits in future decades. To assist the Senate in complying with its "long-term deficit rule" (described below), CBO notes whether the legislation would increase on-budget deficits in any of the four consecutive 10-year periods beginning with 2030. OMB provides long-term projections in the President's annual budget request in a section titled, "Long Term Budget Outlook." These projections recently spanned a 25-year period and include projections under different fiscal scenarios. The Government Accountability Office also provides information and interactive tools on projected spending, revenue, deficits, and debt over the next 70 years. Spending Projections for Individual Programs Long-term information and projections are available for some individual programs. For example, the Social Security and Medicare Trustees issue respective actuarial estimates of each trust fund for the next 75 years. These reports contain both short- and long-range projections of annual program expenditures and payroll tax receipts. There are also estimates of the actuarial deficits over the next 75 years that represent the shortfall between the program's projected expenditures and income. In addition, the CBO provides long-term projections on specific programs. For example, CBO publishes recurring reports on the long-term projections for Social Security, the long-term implications of the Future Years Defense Program, and 10-year costs of U.S. nuclear forces. Current Congressional Tools for Long-Term Budgeting The Constitution grants Congress the power of the purse. In carrying out such duties, Congress has developed budget-related rules and legislation as well as committees to carry out this responsibility. Some of these tools might be used in long-term budgeting. Congressional Committees Congressional committees serve Congress by specializing in particular policy areas. They do this by gathering information, making policy recommendations, and performing oversight. In the course of this work, committees study and make recommendations related to the long-term implications of the specific programs within their jurisdiction. For example, the Senate Finance Committee and the House Ways and Means Committee may hold hearings on the long-term outlook for Social Security. In addition, the House and Senate each have a Budget Committee, established by the Budget Act. They enjoy jurisdiction over the budget resolution, the budget reconciliation process (described below), and the budget process generally. As stated by the Senate Budget Committee, "The [Budget] Committee, the budget resolution and reconciliation process, and enforcement authorities were created to enable Congress to create, enforce, and manage the annual Federal budget, including all types of Federal spending and revenues." The Budget Committees may impact the budget and the budget process in many ways. They are responsible for developing and drafting a budget plan in the form of a budget resolution. A budget resolution agreed to by the House and Senate may trigger the budget reconciliation process, which has been used to make legislative changes reducing future deficits (described below). During the development of the budget plan, the Budget Committees gather information on the budget from many sources. They review the President's budget submission, and the director of OMB typically testifies before each Budget Committee. Additionally, the committees closely review CBO's annual budget and economic outlook for the upcoming 10 years, and the director of CBO testifies before the Budget Committees to answer questions. The Budget Committees also hold hearings and consider legislation related to the budget process and the budget as a whole. This has included examining the long-term budget outlook and the potential for a more long-term budget process. Since the Budget Committees enjoy jurisdiction over the budget process generally, they would likely be involved in any efforts to alter the current process. The Budget Resolution and the Budget Reconciliation Process The budget resolution reflects an annual agreement between the House and Senate on spending and revenue levels for the upcoming fiscal year and at least four additional years. The budget resolution does not become law. Therefore, no money is spent or collected as a result of its adoption. Instead, it is an agreement between the House and Senate meant to assist Congress in considering an overall budget plan. Once agreed to by both chambers in the exact same form, the budget resolution creates parameters that may be enforced in two primary ways: (1) by points of order and (2) by using the budget reconciliation process. Enforcement through Points of Order Once the budget resolution has been agreed to by both chambers, certain levels contained in it are enforceable through points of order. This means that if legislation is being considered on the House or Senate floor that would violate certain levels contained in the budget resolution, a Member may raise a point of order against the consideration of that legislation. The Budget Act requires that the budget resolution include the following budgetary levels for the upcoming fiscal year and at least four additional years (often referred to as out years): total spending, total revenues, the surplus/deficit, new spending for each major functional category, the public debt, and (in the Senate only) Social Security spending and revenue levels. The Budget Act also requires that the aggregate amounts of spending recommended in the budget resolution be allocated among committees. Enforcement through the Budget Reconciliation Process While points of order can be effective in enforcing the budgetary goals outlined in the budget resolution, they can be raised against legislation only when it is pending on the House or Senate floor. Moreover, points of order cannot limit direct spending or revenue levels resulting from current law. Often, for the budgetary levels in the budget resolution to be achieved, Congress must pass legislation to alter the levels of revenue and/or direct spending resulting from existing law. In this situation, Congress seeks to reconcile the levels of direct spending and revenue under existing law with those budgetary levels expressed in the budget resolution. To assist in this process, the budget reconciliation process allows special consideration of legislation that would accomplish those budgetary levels expressed in the budget resolution. If Congress intends to use the reconciliation process, reconciliation directives must be included in the annual budget resolution. These directives instruct individual committees in the House and Senate to develop and report legislation that would change laws within their jurisdiction related to direct spending, revenue, or the debt limit. Such reconciliation legislation is then eligible to be considered under special expedited procedures in both the House and Senate. These procedures are especially important in the Senate as they include a limit on debate time. This means the legislation does not require the support of three-fifths of Senators to bring debate to a close. Since 1980, Congress has sent the President 25 reconciliation acts, 21 of which were signed into law. Reconciliation has most often been used to enact legislation that was projected to reduce deficits. For example, between 1981 and 1984, four reconciliation bills were enacted that were each projected to decrease the deficit. Reconciliation legislation can be used to make policy changes that are temporary or permanent, therefore affecting the long-term budget. For a brief description of each reconciliation bill enacted into law, see CRS Report R40480, Budget Reconciliation Measures Enacted Into Law: 1980-2017 , by Megan S. Lynch. While the reconciliation process has been used to enact legislation that was projected to increase the net deficit, a Senate rule (known as the Byrd rule) prohibits reconciliation legislation from increasing the net deficit outside the "budget window." (The budget window is the period covered by the underlying budget resolution and recently has spanned 10 years. ) Additional Rules and Points of Order The House and Senate have many additional budget-related points of order that seek to restrict or prohibit consideration of different types of budgetary legislation, some of which have long-term implications. These points of order are found in various places such as the Budget Act, House and Senate standing rules, and past budget resolutions. For example, the House and Senate have pay-as-you-go (PAYGO) rules that prohibit the consideration of direct spending or revenue legislation that is projected to increase the deficit in either of two time periods: (1) the period consisting of the current fiscal year, the budget year, and the four ensuing fiscal years following the budget year and (2) the period consisting of the current fiscal year, the budget year, and the ensuing nine fiscal years following the budget year. Additionally, in the Senate, a rule exists that is often referred to as the "long-term deficit point of order." It prohibits the consideration of legislation that would cause a net increase in deficits of more than $5 billion in any of the four consecutive 10-year periods beginning after the upcoming 10 years. Previously, the House had a similar rule that prohibited consideration of legislation that would cause a net increase in mandatory spending in excess of $5 billion during the same period. The House rule is no longer in effect. Additional Budget Enforcement Mechanisms Currently in Effect In addition to points of order, there are other types of budget enforcement mechanisms that seek to restrict or prohibit the enactment of budgetary legislation over the long term. Legal Limits on Annual Discretionary Spending The Budget Control Act of 2011 (BCA; P.L. 112-25 ) established statutory limits on discretionary spending for a 10-year period ( FY2012-FY2021 ) . (S imilar discretionary spending limits were in effect between FY1991 and FY2002.) The BCA sets separate annual limits for defense discretionary and nondefense discretionary spending. The defense category consists of discretionary spending in budget function 050 (national defense) only. The nondefense category includes discretionary spending in all other budget functions. If discretionary appropriations are enacted that exceed a statutory limit for a fiscal year, across-the-board reductions (i.e., sequestration) of nonexempt budgetary resources are triggered to eliminate the excess spending within the applicable category. Statutory PAYGO In February 2010, the Statutory Pay-As-You-Go Act of 2010 ( P.L. 111-139 ) was enacted establishing a budget enforcement mechanism commonly referred to as "Statutory PAYGO." Statutory PAYGO is generally intended to discourage enactment of legislation that is projected to increase the on-budget deficit over five and 10 years. To enforce Statutory PAYGO, OMB is required to record the budgetary effects of newly enacted revenue and direct spending legislation over the course of a year. After the end of a congressional session, OMB is required to issue an annual PAYGO report noting whether a debit has been recorded for the current budget year. If no such debit is found, no action occurs. If a debit is found, however, the President must issue a sequestration order, which automatically implements across-the-board cuts to non-exempt direct spending programs to compensate for the amount of the debit. Selected Budget Enforcement Related Mechanisms No Longer inÂ Effect While the following budget related mechanisms are no longer in effect, they provide insight into Congress's past budget process reform efforts and the desire for long-term budgeting. Statutory Deficit Limits In 1985, the Balanced Budget and Emergency Deficit Control Act ( P.L. 99-177 )âreferred to as the Gramm-Rudman-Hollings Actâemployed budget process mechanisms in an attempt to force Congress and the President to balance the budget within a six-year period by specifying annual deficit limits for each fiscal year (1986-1991). The act required that both the President and Congress adhere to the deficit limits when developing their budget plans. The act did not specify what policy changes should be made to achieve deficit reduction, leaving Congress and the President to negotiate over possible revenue increases and spending decreases. To enforce the specified deficit limits, the act set forth a specific process for the cancellation of spending by sequestration in the event that the deficit limits were breached. These deficit targets and related enforcement mechanism were amended by the Balanced Budget and Emergency Deficit Control Act of 1987 ( P.L. 100-119 ) and then were fundamentally revised by the Budget Enforcement Act of 1990 ( P.L. 101-508 ), which replaced the focus on deficit targets under Gramm-Rudman-Hollings with a two-pronged approach to budgetary enforcement: the implementation of PAYGO procedures to control new direct spending and revenue legislation and discretionary spending limits to control the level of discretionary spending. For more information, see CRS Report R41901, Statutory Budget Controls in Effect Between 1985 and 2002 , by Megan S. Lynch. The Joint Select Committee on Deficit Reduction (111th Congress) The BCA created a Joint Select Committee on Deficit Reduction. The committee comprised 12 Members from the House and Senateâthree chosen by each of the chambers' party leaders. The committee was instructed to develop legislation to reduce the budget deficit by at least $1.5 trillion over the 10-year period FY2012-FY2021. Legislation reported by the committee would then be eligible to be considered under special expedited procedures in both the House and Senate. These procedures are especially important in the Senate since they include a limit on debate time. This means the legislation does not require the support of three-fifths of Senators to bring debate to a close. The BCA stipulated that if a measure meeting specific requirements was not enacted by January 15, 2012, then an automatic process would be triggered to enforce the budgetary goal established for the committee. The committee did not reach agreement on such legislation, and while the committee is no longer in effect, the automatic process triggered by the lack of enactment still remains. This comprises annual downward adjustments of the discretionary spending limits (described above) and sequester of nonexempt mandatory spending programs through FY2027. The Joint Select Committee on Budget and Appropriations Process Reform (115th Congress) The Bipartisan Budget Act of 2018 ( P.L. 115-123 ) created the Joint Select Committee on Budget and Appropriations Process Reform. The committee comprised 16 Members from the House and Senateâfour chosen by each of the chambers' party leaders. The committee was tasked with formulating recommendations and legislative language to "significantly reform the budget and appropriations process." The committee held a markup on draft legislation that concluded on November 29, 2018. The principal recommendation in the draft provided that the budget resolution would be adopted for a two-year cycle rather than the current annual cycle. The committee ultimately did not vote to report the bill as amended, and it was never considered by the full house.	Summary:	gov_report	1,024	null	82
crs_R46305	crs_R46305_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The Department of Homeland Security (DHS) is the third largest agency in the federal government in terms of personnel. The appropriations bill that funds itâproviding $70 billion in FY2020âis the seventh largest of the 12 annual funding measures developed by the appropriations committees, and is the only appropriations bill that funds a single agency in its entirety and nothing else. This report provides an overview of the FY2021 budget request for the Department of Homeland Security. It provides a component-level overview of the appropriations sought in the FY2021 budget request, putting the requested appropriations in the context of the FY2020 requested and enacted level of appropriations, and noting some of the larger changes in this proposal from those baselines. Data Sources and Caveats To ensure consistency of methodology, the analysis in this report is based on Office of Management and Budget (OMB) data as presented in the FY2020 and FY2021 Budget in Brief for DHS, with supporting information from the DHS congressional budget justifications for FY2021, except where noted. Most other CRS reports rely on Congressional Budget Office (CBO) data, which was not available at the time of publication at a similar level of granularity. Numbers expressed in billions are rounded to the nearest hundredth ($10 million), while numbers expressed in millions are rounded to the nearest million. None of the FY2020 requested or enacted levels in this bill include supplemental appropriations requested and provided in the wake of the COVID-19 pandemic, as the intent is to analyze the FY2021 annual appropriations request in comparison to the preceding request and ensuing annual appropriation. Structure of the DHS Budget FY2021 Context The FY2021 budget request represents the fourth detailed budget proposed by the administration of President Donald J. Trump. It is the earliest release of a budget request by the Trump Administration, and comes 52 days after the enactment of the FY2020 consolidated appropriations measuresâthe longest such gap since the release of the FY2017 request (53 days), and the first since then to include prior-year enacted funding levels as a comparative baseline. This allows for easier analysis of the request compared to current funding. The budget for DHS includes a variety of discretionary and mandatory budget authority. Aside from standard discretionary spending, some of the discretionary spending in the bill is offset by collections of fees, reducing the net effect on the general fund of the Treasury. Some discretionary budget authority is specially designated under the Budget Control Act (BCA), adjusting the statutory limits on discretionary spending to accommodate it. DHS also draws resources from fee revenues and other collections included in the mandatory budget, which are not usually referenced in annual appropriations legislation. However, some mandatory spending items still require an appropriation because there is no dedicated source of funding to meet the government's obligations established in lawâe.g., U.S. Coast Guard (USCG) retirement accounts. Figure 1 shows a breakdown of these different categories from the FY2021 budget request. Congress and the Administration may differ on how funding for the department is structured; frequently, administrations of both parties have suggested paying for certain activities with fee increases that would require legislative approval. If fees are not increased, additional discretionary appropriations must be provided to fund the planned activities. Figure 2 compares the structure of the FY2021 budget request to its enacted FY2020 equivalent, as well as the FY2020 request. Significant differences include In budget authority from discretionary appropriations, a $3 billion reduction in border barrier funding through U.S. Customs and Border Protection (CBP) compared to the FY2020 request; and a $2.4 billion reduction from the enacted level of funding due to the proposed move of the U.S. Secret Service to the Department of the Treasury. In fee-funded discretionary budget authority, a $709 million increase in requested Transportation Security Administration (TSA) fee revenues; and In discretionary budget authority covered by adjustments under the BCA, a $9 billion reduction in disaster relief funding through the Federal Emergency Management Agency (FEMA) compared to the FY2020 request. Appropriations Analysis Comparing the FY2021 Request to Prior-Year Levels Table 1 presents for comparison the requested gross budget authority controlled in appropriations legislation for FY2021 for each DHS component, as well as the level requested and enacted for FY2020. This is essentially composed of the first four elements in Figure 1 and Figure 2 . Four analytical columns on the right side of the table provide comparisons of the FY2021 requested funding levels with the FY2020 requested and enacted levels, indicating dollar and percentage change. Components are listed in order of their total FY2020 enacted gross budget authority. Indented and italicized lines beneath the Coast Guard and Federal Emergency Management Agency entries show the portion of the above amount covered by adjustments for disaster relief and overseas contingency operations, provided for under the BCA. The funding levels in Table 1 include the effects of all elements of the budget tracked in the detail tables accompanying annual appropriations for DHS, except rescissions of prior-year appropriations. While this table compares data developed with the Congressional Budget Office (CBO) scoring methodology and the Office of Management and Budget (OMB) scoring methodology, most of the data compared is identical. Most of the $40 million in scoring differences identified by OMB is the result of $34 million differences in the treatment of fees, transfers and rounding within the CBP budget, with the remainder being the result of differences in rounding across the DHS funding structure. Table 1 illuminates several shifts within the FY2021 DHS budget request that are not apparent in top-line analysis: a $986 million increase from the FY2020 requested level for the U.S. Coast Guard; a $1.1 billion increase from the FY2020 requested level for Immigration and Customs Enforcementâ$2 billion (24%) more than enacted in FY2020; a $456 million increase for the Transportation Security Administration's budget from the FY2020 requested level; and a proposed transfer of the Federal Protective Service from the Cybersecurity and Infrastructure Security Agency to the Management Directorate during the FY2020 process, shifting almost $1.6 billion between the components. Table 1 also illuminates budgetary pressure on DHS's smaller headquarters and support components. With one exceptionâAnalysis and Operationsâthe seven smallest components by gross budget authority saw their budget requests reduced by at least 5% from the enacted level, and four of those components saw reductions of more than 10%. Common DHS Appropriation Types Under the Common Appropriations Structure (CAS) first implemented with the FY2017 DHS annual appropriation, most DHS discretionary appropriations were rearranged into four uniform categories: Operations and Supportâgenerally personnel and operational costs (all components have this); Procurement, Construction, and Improvementsâgenerally acquisition and construction (many components have this); Research and Development (TSA, USCG, USSS, CISA, S&T, and CWMD have this in the FY2021 budget request); and Federal Assistance (only FEMA and CWMD have this in the FY2021 budget request). FEMA's Disaster Relief Fund is a unique discretionary appropriation which was preserved separately, in part due to the history of the high level of public and congressional interest in that particular structure. The use of the CAS structure allows a quick survey of the level of departmental investment in these broad categories of spending through the appropriations process. A visual representation of this new structure follows in Figure 3 . On the left are the five appropriations categories of the CAS with a black bar representing the requested FY2021 funding levels requested for DHS for each. A sixth catch-all category is included for budget authority associated with the legislation that does not fit the CAS categories. Colored lines flow to the DHS components listed on the right, showing the amount of funding provided through each category to each component. Staffing The Operations and Support appropriation for each component pays for most DHS staffing. Table 2 analyzes changes to DHS staffing, as illuminated by the request's information on positions and full-time equivalents (FTEs) for each component. Appropriations legislation does not explicitly set these levels, so the information is drawn from budget request documents alone. The first data column indicates the number of positions requested for each component in the FY2021 budget request. The next four columns show the difference between the FY2021 request and the Administration's previous requestâexpressed numerically, then as a percentageâand then shows the same comparison with the FY2020 enacted number of positions as interpreted by the Administration. Another data column shows the number of FTEs, followed by four more analytical columns showing the same comparisons as were run for positions. Overview of Component-Level Changes The following summaries of the budget requests for DHS components are drawn from a survey of the DHS FY2021 B udget in Brief and the budget justifications for each component. Each begins with a graphic outlining the appropriations requested and enacted for the components in FY2020 and FY2021, followed by some observations on the factors that contribute to the illustrated structure. The appropriations request includes all funding provided through the appropriations measure, regardless of how it is scored: it does not include most mandatory spending, such as programs paid for directly by collected fees that have appropriations in permanent law. Each component has an Operations and Support appropriation, which includes discretionary funding for pay. A 3.1% civilian pay increase was adopted for 2020, and a 1.0% civilian pay increase has been proposed by the Administration for 2021. Descriptions of each Operations and Support appropriation note the impact of these pay increases and associated increases to component retirement contributions to better illuminate the changes in the level of other operational funding. Law Enforcement Operational Components (Title II) Customs and Border Protection (CBP) The Administration's $15.60 billion appropriations request for CBP was $724 million (4.9%) above the FY2020 enacted level, and $2.55 billion (14.1%) below the level of appropriations originally requested for FY2020. The request includes $252 million more than enacted for Operations and Support, largely driven by $414 million for pay and retirement cost increases. $161 million was requested for 750 additional border patrol agents and 126 support staff. No additional appropriations were requested for new CBP Officers, who staff ports of entry. $21 million was requested for 300 Border Patrol Processing Coordinators, who are intended to take over non-law enforcement duties currently performed by Border Patrol Agents. The request for Operations and Support includes a new $7 million item for the Southwest Border Wall System Program, intended to maintain newly constructed barriers. $377 million more than enacted for Procurement, Construction, and Improvements. The $2.06 billion request for Border Security Assets and Infrastructure is $552 million more than enacted in annual appropriations for FY2020, and $3.12 billion less than requested in FY2020. The primary driver of this change from the FY2020 request is a reduction of $3.04 billion in construction funding for the border wall system. While the FY2020 Budget-in-Brief cites $182 million for facilities improvements and various investments for technology, aircraft, and vehicles, appropriations not for border barriers were reduced from the FY2020 enacted level of $529 million to $281 million in the request. Immigration and Customs Enforcement (ICE) The Administration's $9.93 billion appropriations request for ICE was $1.85 billion (22.9%) above the FY2020 enacted level, and $1.15 billion (13.0%) above the level of appropriations originally requested for FY2020. The request includes $1.79 billion more than enacted for Operations and Support, largely driven by a 4,636 position (22%) increase requested in personnel funded through appropriations. This increase would include 2,844 law enforcement officers and 1,792 support staff. While all of the primary programs under ICE would receive additional staff, Enforcement and Removal Operations (ERO) would receive 2,792 positions, a 34% increase above the current enacted level (8,201). Homeland Security Investigations (HSI) would receive 1,053 additional personnel, a 12% increase above the current enacted level (8,784). $220 million (12.3%) of the requested increase in Operations and Support appropriations is for pay and retirement increases. $58 million more than enacted for Procurement, Construction, and Improvements. This is $26 million more than the request for FY2020, growth largely driven by a nearly $14 million increase above the FY2020 requested level for Operational Communications and Information Technology. Also included in the Administration's request was $112 million in fee funding from the Immigration Examinations Fee Accountâsimilar to a proposal not approved by Congress for FY2020âwhich would fund 936 current personnel. Transportation Security Administration (TSA) The Administration's $4.09 billion net appropriations request for TSA was $890 million (17.9%) below the FY2020 enacted level, and $175 million (4.5%) above the level of appropriations originally requested for FY2020. With the resources from offsetting fees included, the gross discretionary total is for a request of $7.63 billion, $181 million (2.3%) below the FY2020 enacted level, and $334 million (4.6%) above the FY2020 requested level. The request includes $820 million (16.9%) less than enacted in FY2020 for Operations and Support appropriations, compensated for in large part by $709 million in proposed increases to offsetting collections. Operations and Support cost increases within this amount include $251 million for paying increased pay and retirement costs. $77 million (69.7%) less in discretionary appropriations than enacted in FY2020 for Procurement, Construction, and Improvements; $129 million less in discretionary appropriations than was requested for FY2020. $250 million continues to be provided in mandatory appropriations from the Aviation Security Capital Fund as it has since FY2004. $7 million (28.9%) more than enacted in FY2020 for Research and Development appropriations, on the basis of $8 million for two new projects to improve threat detection at TSA checkpoints. U.S. Coast Guard (USCG) The Administration's $12.11 billion appropriations request for USCG was $139 million (1.2%) above the FY2020 enacted level, and $986 million (8.9%) above the level of appropriations originally requested for FY2020. The request included $196 million (2.4%) more than enacted in FY2020 for Operations and Support, $164 million of which is for pay and retirement increases, and increases to allowances for military personnel. For the first time in many years, the costs of Overseas Contingency Operations (OCO) were proposed for inclusion in the base discretionary appropriation for Operations and Support, without designation to adjust the discretionary budget limits to accommodate it. The OCO proposal was for $215 million in FY2021, up $25 million from the FY2020 enacted level. The budget request also included more than $30 million in increases for cyber operations. $135 million (7.6%) less than enacted for Procurement, Construction, and Improvements. Reductions of $130 million (80.7%) for the National Security Cutter program and $240 million (92.3%) for the Fast Response Cutter program were offset by increases of $234 million (75%) for the Offshore Patrol Cutter program and $420 million (311%) for the Polar Security Cutter program, as part of a net increase of $286 million (28.8%) for USCG vessels procurement. $351 million (69.6%) less than enacted was requested for USCG aircraft procurement. $13 million (18.6%) less than enacted was requested for other acquisition programs, and $58 million (28.3%) less than enacted for Shore Facilities and Aids to Navigation. Less than $1 million (6.6%) more than enacted was requested for Research and Development. U.S. Secret Service (USSS) The Administration's budget request envisions moving the USSS to the Department of the Treasury. However, the budget is still structured as it would be in DHS, and the numbers are provided here for analytical purposes. The $2.36 billion appropriations request for USSS was $55 million (2.3%) below the FY2020 enacted level, and $52 million (2.2%) above the level of appropriations originally requested for FY2020. The request included $26 million (1.1%) less than enacted for Operations and Support, despite $71 million being added for the costs of pay and retirement increases. The primary driver of the decrease was the anticipated reduction of $86 million in costs from the conclusion of the 2020 presidential election cycle. $20 million for 119 additional personnel and $20 million in transition costs for the proposed transition of the USSS back to Treasury also are included in the request. $29 million (42.8%) less than enacted in FY2020 for Procurement, Construction, and Improvements, and less than $1 million (4.2%) less than enacted for Research and Development. Incident Response and Recovery Operational Components (Title III) Cybersecurity and Infrastructure Security Agency (CISA) The Administration's $1.76 billion appropriations request for CISA was $258 million (12.8%) below the FY2020 enacted level, and $150 million (9.3%) above the level of net appropriations originally requested for FY2020. The request included $128 million (8.2%) less than enacted in FY2020 for Operations and Support, despite $28 million being added for the costs of pay and retirement increases. The reduction is largely driven by the proposal to convert the Chemical Facility Anti-Terrorism and Safety program to a voluntary initiative, reducing program costs by $68 million, and a $34 million reduction in Threat Analysis and Response. $121 million (27.9%) less than enacted in FY2020 for Procurement, Construction, and Improvements, largely driven by a $114 million reduction in Cybersecurity Assets and Infrastructure, $75 million of which is to the National Cybersecurity Protection System. $8 million (55.4%) less than enacted in FY2020 for Research and Development, due to reductions in funding for the Technology Development and Deployment Program and National Infrastructure Simulation and Analysis Center. Federal Emergency Management Agency (FEMA) The Administration's $9.36 billion appropriations request for FEMA was $12.92 billion (58.0%) below the FY2020 enacted level, and $8.65 billion (48.0%) below the level of appropriations originally requested for FY2020. The primary driver of this change is a $12.29 billion reduction from the enacted level for the costs of major disasters (a large portion of the resources in the Disaster Relief Fund). If this reduction is set aside, the request is a $628 million reduction from the FY2020 enacted level, and a $364 million increase from the FY2020 request. The request includes $32 million (2.9%) more than enacted for Operations and Support, $32 million of which is for pay and retirement increases (the combination of other increases and decreases in the account has a net zero effect); $47 million (35.1%) less than enacted for Procurement, Construction, and Improvements, largely due to lower requests for grants management modernization, Mount Weather facilities, and the Center for Domestic Preparedness; $696 million (21.9%) less than enacted for Federal Assistance, largely due to reduction in preparedness grants, the Flood Hazard Mapping and Risk Analysis Program, and elimination of the Emergency Food and Shelter Program; and $12.21 billion (68.4%) less than enacted for the Disaster Relief Fund (DRF). The request for the portion of the DRF that covers major disasters dropped from an enacted level of $17.35 billion to $5.06 billion, a request that is based on the average of the last 10 years obligations for major disasters costing less than $500 million (termed "non-catastrophic disasters"), and spending plans for past disasters costing FEMA more than $500 million (termed "catastrophic disasters"). The portion of the DRF that covers emergencies and other activities increased $82 million (16.1%) to $521 million, largely on the basis of an increase in the 10-year average of those costs, and $15 million for real estate needs associated with FEMA's Recovery Service Centers. Support Components (Title IV) U.S. Citizenship and Immigration Services (USCIS) The Administration's $119 million appropriations request for USCIS was $14 million (10.4%) below the FY2020 enacted level, and $3 million (2.4%) below the level of appropriations originally requested for FY2020. The request includes $4 million (3.0%) less for Operations and Support than enacted in FY2020, and $3 million (2.4%) less than requestedâ$2 million in increased pay raise and retirement costs were offset by reduced costs for rent and efficiencies through modernization efforts. The request does not include an appropriations request for Federal Assistance, which received $10 million in the FY2020 enacted DHS appropriations bill for Citizenship and Integration Grants, which the Administration proposes funding through Immigration Examinations Fee revenues. Less than 3% of the USCIS budget is appropriated. The budget request projects more than $4.9 billion in mandatory spending for USCISâ97% of its total budgetâwill be supported by fees in FY2021, up $213 million (4.5%) from FY2020 levels. This overall structure is similar to last year's request. Federal Law Enforcement Training Centers (FLETC) The Administration's $331 million appropriations request for FLETC was $20 million (5.6%) below the FY2020 enacted level, and $19 million (5.5%) below the level of appropriations originally requested for FY2020. FLETC also anticipates receiving $211 million (up $25 million, or 13.4%) in reimbursements for training and facilities use from those it serves. The request includes $12 million (4.3%) more than was enacted in FY2020 for Operations and Support, $7 million of which is for increased pay and retirement costs; $32 million (55.3%) less than was enacted in FY2020 for Procurement, Construction, and Improvements, due to completion of funding for projects in the FY2020 enacted appropriation. The FY2021 budget includes $26 million for the purchase of two dorms it currently leases. Science and Technology Directorate (S&T) The Administration's $644 million appropriations request for the S&T Directorate was $94 million (12.7%) below the FY2020 enacted level, and $62 million (10.6%) above the level of appropriations originally requested for FY2020. The request includes $30 million (9.6%) less than the enacted level for the Operations and Support appropriation, largely due to a $35 million (24.6%) reduction in mission support activities; Only $3 million of the Operations and Support request is for pay and retirement cost increases. $19 million in the Procurement, Construction, and Improvements appropriation (which had no funding requested or provided in FY2020) for costs associated with the closure and sale of the Plum Island Animal Disease Center; and $82 million (19.5%) less than enacted for the Research and Development appropriation, due to a $64 million (16.6%) reduction in in-house research activities and a $19 million (46.3%) reduction in university-based research. Countering Weapons of Mass Destruction Office (CWMD) The Administration's $377 million appropriations request for CWMD was $55 million (12.8%) below the FY2020 enacted level, and $46 million (10.9%) below the level of appropriations originally requested for FY2020. The request includes $7 million (3.7%) less than the enacted level for the Operations and Support appropriation, $40 million (18.7%) less than was requested for FY2020; This reduction is driven by a $5 million (40.7%) reduction in funding for the National Biosurveillance Integration Center's biosurveillance and early warning support on biological attacks and emerging pandemics, and an almost $3 million reduction in technical forensics operational readiness, which the request says is being funded by the National Nuclear Security Administration. $1 million (0.4%) was requested for covering the increased pay and retirement costs. $32 million (26.5%) less than the enacted level for the Procurement, Construction, and Improvements appropriation, largely driven by reductions to the Radiation Portal Monitor Replacement Program ($46 million, 68.1%) and Common Viewer program ($8 million, zeroed out); $11 million (15.9%) less than the enacted level for the Research and Development appropriation, largely driven by a $7 million reduction in Technical Forensics and a $9 million (27.3%) reduction in detection capability activity; and $6 million (9.3%) less than the enacted level for the Federal Assistance appropriation, largely due to an $11 million (44.6%) reduction in funding for the Securing the Cities program. Headquarters Components (Title I) Office of the Secretary and Executive Management (OSEM) The Administration's $150 million appropriations request for OSEM was $28 million (15.9%) below the FY2020 enacted level, and $9 million (6.4%) above the level of appropriations originally requested for FY2020. The request includes $18 million (10.9%) less than enacted level for the Operations and Support appropriation, largely driven by a $15 million (25.9%) reduction in operations and engagement activities. The request included $5 million to pay for increased salary and retirement costs. $10 million less than the enacted level for the Federal Assistance program, as the targeted violence grants funded in this component in FY2020 are funded in the FEMA request for FY2021. Departmental Management Directorate (MD) The Administration's $1.76 billion appropriations request for MD was $198 million (12.7%) above the FY2020 enacted level, and $204 million (13.1%) above the level of appropriations originally requested for FY2020. The request includes $220 million (18.6%) more than was enacted in FY2020 for the Operations and Support appropriation, $186 million of which is net transfers as a result of DHS transitioning away from using a working capital fund; Also included in this appropriations request is a $13 million increase to cover increased pay and retirement costs. Of the remaining changes, most of the net increase is due to investments in information technology and cybersecurity. $22 million (5.7%) less than was enacted in FY2020 for the Procurement, Construction, and Improvement appropriation. Of the $359 million requested, over $200 million was for investments in DHS headquarters facilities, including St. Elizabeths; Mount Weather; and consolidation of headquarters leases. Analysis and Operations (A&O) The Administration's $313 million appropriations request for A&O was $28 million (10.0%) above the FY2020 enacted level, and $36 million (13.0%) above the level of appropriations originally requested for FY2020. Most of the details of the A&O budget request are classified. However, the request included a $6 million increase to cover increases in pay and retirement costs. Office of Inspector General (OIG) The Administration's $178 million appropriations request for the OIG was $12 million (6.5%) below the FY2020 enacted level, and $8 million (4.5%) above the level of appropriations originally requested for FY2020. $5 million in additional funding is requested to cover increased pay and retirement costs. The budget request includes a reduction of more than $15 million (16.5%) in OIG audits and investigations. The budget justification notes that the OIG submitted a funding request of $196 million, which the OIG states "is essential to sustain FY 2020 operations into FY 2021 at the FY 2020 appropriated level and maintain oversight capacity commensurate with the Department's growth in several high-risk areas, including frontline security and infrastructure along the southern border, cybersecurity defenses, major acquisitions and investments, and accelerated hiring of law enforcement personnel." Administrative and General Provisions Administrative Provisions Administrative provisions are included at the end of each title of the DHS appropriations bill and generally provide direction to a single component within that title. In the FY2021 budget request, the Administration proposed a number of changes from the FY2020 enacted DHS appropriations measure, including Deleting Â§106, which established the Ombudsman for Immigration Detention. Adding a new section related to the proposed transfer of the Secret Service to the Department of the Treasury, which would allow for funds from the DHS OIG to be transferred to the Treasury OIG. Deleting Â§207-Â§212, which barred any new land border crossing fees; required an expenditure plan be submitted to Congress for the CBP Procurement, Construction, and Improvements appropriation before any of that appropriation could be obligated; constrained the use of the CBP Procurement, Construction, and Improvements appropriation, including limiting the types and locations of border barriers that could be constructed and requiring reporting to the appropriations committees on (1) the plans for barrier construction, (2) changes in barrier construction priorities, and (3) consultation with affected local communities, as well as an annual update to risk-based plan for improving border security; barred construction of barriers in certain locations; required statutory authorization for reducing vetting operations at the CBP's National Targeting Center; and directed certain CBP Operations and Support appropriations to humanitarian needs at the border and addressing health, life, and safety issues at Border Patrol facilities. Deleting Â§216, which barred DHS from detaining or removing a sponsor, potential sponsor or the family member of sponsor or potential sponsor of an unaccompanied alien child on the basis of information from the Department of Health and Human Services, unless a background check reveals certain felony convictions or association with prostitution or child labor violators; Deleting Â§227, which provided flexibility in allocating Coast Guard Overseas Contingency Operations funding; Deleting Â§229, which bars the use of funds to conduct or implement an A-76 competition for privatizing activities at the National Vessel Documentation Center; Deleting Â§231-Â§232, which were changes to permanent law (and thus no longer required inclusion in the bill) that allowed for continued death gratuity payments for the USCG if appropriated funding was unavailable for obligation; and categorized amounts credited to the Coast Guard Housing Fund as offsetting receipts. Deleting Â§233-Â§236, which allowed the Secret Service to obligate funds in advance of reimbursement by other federal agencies for training expenses; barred the Secret Service from protecting agency heads other than the secretary of DHS, unless an agreement is reached with DHS to do so on a reimbursable basis; allowed the Secret Service to reprogram up to $15 million in its Operation and Support appropriation; and allowed flexibility for Secret Service employees on protective missions to pay for travel without regard to limitations on costs, with prior notification to the appropriations committees. Adding Â§308, which requires a 25% nonfederal contribution for projects funded under the State Homeland Security Grant Program, Urban Area Security Initiative, Public Transportation Security Assistance, Railroad Security Assistance, and Over-the-Road Bus Security Assistance programsâcurrently there is no such cost share; and Adding Â§309, which would allow a transfer 1% of funding provided for the State Homeland Security Grant Program and Urban Area Security Initiative to FEMA Operations and Support for evaluations of the effectiveness of those programs. General Provisions General provisions are included in the last title of the DHS appropriations bill and generally provide direction to the entire department. They include rescissions or additional budget authority in some cases. In the FY2021 budget request, the Administration proposed relatively few substantive changes to the general provisions enacted in the FY2020 bill. They sought to: Remove Â§530, which provided $41 million for reimbursement of extraordinary law enforcement costs for protecting the residence of the President; Remove Â§532, which required that DHS allow Members of Congress and their designated staff access to DHS facilities housing aliens for oversight purposes; and Remove Â§537-Â§540, which rescinded prior year appropriations from various accounts. Appendix. Summary:	null	96	33,752	33,754	33,754	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The Department of Homeland Security (DHS) is the third largest agency in the federal government in terms of personnel. The appropriations bill that funds itâproviding $70 billion in FY2020âis the seventh largest of the 12 annual funding measures developed by the appropriations committees, and is the only appropriations bill that funds a single agency in its entirety and nothing else. This report provides an overview of the FY2021 budget request for the Department of Homeland Security. It provides a component-level overview of the appropriations sought in the FY2021 budget request, putting the requested appropriations in the context of the FY2020 requested and enacted level of appropriations, and noting some of the larger changes in this proposal from those baselines. Data Sources and Caveats To ensure consistency of methodology, the analysis in this report is based on Office of Management and Budget (OMB) data as presented in the FY2020 and FY2021 Budget in Brief for DHS, with supporting information from the DHS congressional budget justifications for FY2021, except where noted. Most other CRS reports rely on Congressional Budget Office (CBO) data, which was not available at the time of publication at a similar level of granularity. Numbers expressed in billions are rounded to the nearest hundredth ($10 million), while numbers expressed in millions are rounded to the nearest million. None of the FY2020 requested or enacted levels in this bill include supplemental appropriations requested and provided in the wake of the COVID-19 pandemic, as the intent is to analyze the FY2021 annual appropriations request in comparison to the preceding request and ensuing annual appropriation. Structure of the DHS Budget FY2021 Context The FY2021 budget request represents the fourth detailed budget proposed by the administration of President Donald J. Trump. It is the earliest release of a budget request by the Trump Administration, and comes 52 days after the enactment of the FY2020 consolidated appropriations measuresâthe longest such gap since the release of the FY2017 request (53 days), and the first since then to include prior-year enacted funding levels as a comparative baseline. This allows for easier analysis of the request compared to current funding. The budget for DHS includes a variety of discretionary and mandatory budget authority. Aside from standard discretionary spending, some of the discretionary spending in the bill is offset by collections of fees, reducing the net effect on the general fund of the Treasury. Some discretionary budget authority is specially designated under the Budget Control Act (BCA), adjusting the statutory limits on discretionary spending to accommodate it. DHS also draws resources from fee revenues and other collections included in the mandatory budget, which are not usually referenced in annual appropriations legislation. However, some mandatory spending items still require an appropriation because there is no dedicated source of funding to meet the government's obligations established in lawâe.g., U.S. Coast Guard (USCG) retirement accounts. Figure 1 shows a breakdown of these different categories from the FY2021 budget request. Congress and the Administration may differ on how funding for the department is structured; frequently, administrations of both parties have suggested paying for certain activities with fee increases that would require legislative approval. If fees are not increased, additional discretionary appropriations must be provided to fund the planned activities. Figure 2 compares the structure of the FY2021 budget request to its enacted FY2020 equivalent, as well as the FY2020 request. Significant differences include In budget authority from discretionary appropriations, a $3 billion reduction in border barrier funding through U.S. Customs and Border Protection (CBP) compared to the FY2020 request; and a $2.4 billion reduction from the enacted level of funding due to the proposed move of the U.S. Secret Service to the Department of the Treasury. In fee-funded discretionary budget authority, a $709 million increase in requested Transportation Security Administration (TSA) fee revenues; and In discretionary budget authority covered by adjustments under the BCA, a $9 billion reduction in disaster relief funding through the Federal Emergency Management Agency (FEMA) compared to the FY2020 request. Appropriations Analysis Comparing the FY2021 Request to Prior-Year Levels Table 1 presents for comparison the requested gross budget authority controlled in appropriations legislation for FY2021 for each DHS component, as well as the level requested and enacted for FY2020. This is essentially composed of the first four elements in Figure 1 and Figure 2 . Four analytical columns on the right side of the table provide comparisons of the FY2021 requested funding levels with the FY2020 requested and enacted levels, indicating dollar and percentage change. Components are listed in order of their total FY2020 enacted gross budget authority. Indented and italicized lines beneath the Coast Guard and Federal Emergency Management Agency entries show the portion of the above amount covered by adjustments for disaster relief and overseas contingency operations, provided for under the BCA. The funding levels in Table 1 include the effects of all elements of the budget tracked in the detail tables accompanying annual appropriations for DHS, except rescissions of prior-year appropriations. While this table compares data developed with the Congressional Budget Office (CBO) scoring methodology and the Office of Management and Budget (OMB) scoring methodology, most of the data compared is identical. Most of the $40 million in scoring differences identified by OMB is the result of $34 million differences in the treatment of fees, transfers and rounding within the CBP budget, with the remainder being the result of differences in rounding across the DHS funding structure. Table 1 illuminates several shifts within the FY2021 DHS budget request that are not apparent in top-line analysis: a $986 million increase from the FY2020 requested level for the U.S. Coast Guard; a $1.1 billion increase from the FY2020 requested level for Immigration and Customs Enforcementâ$2 billion (24%) more than enacted in FY2020; a $456 million increase for the Transportation Security Administration's budget from the FY2020 requested level; and a proposed transfer of the Federal Protective Service from the Cybersecurity and Infrastructure Security Agency to the Management Directorate during the FY2020 process, shifting almost $1.6 billion between the components. Table 1 also illuminates budgetary pressure on DHS's smaller headquarters and support components. With one exceptionâAnalysis and Operationsâthe seven smallest components by gross budget authority saw their budget requests reduced by at least 5% from the enacted level, and four of those components saw reductions of more than 10%. Common DHS Appropriation Types Under the Common Appropriations Structure (CAS) first implemented with the FY2017 DHS annual appropriation, most DHS discretionary appropriations were rearranged into four uniform categories: Operations and Supportâgenerally personnel and operational costs (all components have this); Procurement, Construction, and Improvementsâgenerally acquisition and construction (many components have this); Research and Development (TSA, USCG, USSS, CISA, S&T, and CWMD have this in the FY2021 budget request); and Federal Assistance (only FEMA and CWMD have this in the FY2021 budget request). FEMA's Disaster Relief Fund is a unique discretionary appropriation which was preserved separately, in part due to the history of the high level of public and congressional interest in that particular structure. The use of the CAS structure allows a quick survey of the level of departmental investment in these broad categories of spending through the appropriations process. A visual representation of this new structure follows in Figure 3 . On the left are the five appropriations categories of the CAS with a black bar representing the requested FY2021 funding levels requested for DHS for each. A sixth catch-all category is included for budget authority associated with the legislation that does not fit the CAS categories. Colored lines flow to the DHS components listed on the right, showing the amount of funding provided through each category to each component. Staffing The Operations and Support appropriation for each component pays for most DHS staffing. Table 2 analyzes changes to DHS staffing, as illuminated by the request's information on positions and full-time equivalents (FTEs) for each component. Appropriations legislation does not explicitly set these levels, so the information is drawn from budget request documents alone. The first data column indicates the number of positions requested for each component in the FY2021 budget request. The next four columns show the difference between the FY2021 request and the Administration's previous requestâexpressed numerically, then as a percentageâand then shows the same comparison with the FY2020 enacted number of positions as interpreted by the Administration. Another data column shows the number of FTEs, followed by four more analytical columns showing the same comparisons as were run for positions. Overview of Component-Level Changes The following summaries of the budget requests for DHS components are drawn from a survey of the DHS FY2021 B udget in Brief and the budget justifications for each component. Each begins with a graphic outlining the appropriations requested and enacted for the components in FY2020 and FY2021, followed by some observations on the factors that contribute to the illustrated structure. The appropriations request includes all funding provided through the appropriations measure, regardless of how it is scored: it does not include most mandatory spending, such as programs paid for directly by collected fees that have appropriations in permanent law. Each component has an Operations and Support appropriation, which includes discretionary funding for pay. A 3.1% civilian pay increase was adopted for 2020, and a 1.0% civilian pay increase has been proposed by the Administration for 2021. Descriptions of each Operations and Support appropriation note the impact of these pay increases and associated increases to component retirement contributions to better illuminate the changes in the level of other operational funding. Law Enforcement Operational Components (Title II) Customs and Border Protection (CBP) The Administration's $15.60 billion appropriations request for CBP was $724 million (4.9%) above the FY2020 enacted level, and $2.55 billion (14.1%) below the level of appropriations originally requested for FY2020. The request includes $252 million more than enacted for Operations and Support, largely driven by $414 million for pay and retirement cost increases. $161 million was requested for 750 additional border patrol agents and 126 support staff. No additional appropriations were requested for new CBP Officers, who staff ports of entry. $21 million was requested for 300 Border Patrol Processing Coordinators, who are intended to take over non-law enforcement duties currently performed by Border Patrol Agents. The request for Operations and Support includes a new $7 million item for the Southwest Border Wall System Program, intended to maintain newly constructed barriers. $377 million more than enacted for Procurement, Construction, and Improvements. The $2.06 billion request for Border Security Assets and Infrastructure is $552 million more than enacted in annual appropriations for FY2020, and $3.12 billion less than requested in FY2020. The primary driver of this change from the FY2020 request is a reduction of $3.04 billion in construction funding for the border wall system. While the FY2020 Budget-in-Brief cites $182 million for facilities improvements and various investments for technology, aircraft, and vehicles, appropriations not for border barriers were reduced from the FY2020 enacted level of $529 million to $281 million in the request. Immigration and Customs Enforcement (ICE) The Administration's $9.93 billion appropriations request for ICE was $1.85 billion (22.9%) above the FY2020 enacted level, and $1.15 billion (13.0%) above the level of appropriations originally requested for FY2020. The request includes $1.79 billion more than enacted for Operations and Support, largely driven by a 4,636 position (22%) increase requested in personnel funded through appropriations. This increase would include 2,844 law enforcement officers and 1,792 support staff. While all of the primary programs under ICE would receive additional staff, Enforcement and Removal Operations (ERO) would receive 2,792 positions, a 34% increase above the current enacted level (8,201). Homeland Security Investigations (HSI) would receive 1,053 additional personnel, a 12% increase above the current enacted level (8,784). $220 million (12.3%) of the requested increase in Operations and Support appropriations is for pay and retirement increases. $58 million more than enacted for Procurement, Construction, and Improvements. This is $26 million more than the request for FY2020, growth largely driven by a nearly $14 million increase above the FY2020 requested level for Operational Communications and Information Technology. Also included in the Administration's request was $112 million in fee funding from the Immigration Examinations Fee Accountâsimilar to a proposal not approved by Congress for FY2020âwhich would fund 936 current personnel. Transportation Security Administration (TSA) The Administration's $4.09 billion net appropriations request for TSA was $890 million (17.9%) below the FY2020 enacted level, and $175 million (4.5%) above the level of appropriations originally requested for FY2020. With the resources from offsetting fees included, the gross discretionary total is for a request of $7.63 billion, $181 million (2.3%) below the FY2020 enacted level, and $334 million (4.6%) above the FY2020 requested level. The request includes $820 million (16.9%) less than enacted in FY2020 for Operations and Support appropriations, compensated for in large part by $709 million in proposed increases to offsetting collections. Operations and Support cost increases within this amount include $251 million for paying increased pay and retirement costs. $77 million (69.7%) less in discretionary appropriations than enacted in FY2020 for Procurement, Construction, and Improvements; $129 million less in discretionary appropriations than was requested for FY2020. $250 million continues to be provided in mandatory appropriations from the Aviation Security Capital Fund as it has since FY2004. $7 million (28.9%) more than enacted in FY2020 for Research and Development appropriations, on the basis of $8 million for two new projects to improve threat detection at TSA checkpoints. U.S. Coast Guard (USCG) The Administration's $12.11 billion appropriations request for USCG was $139 million (1.2%) above the FY2020 enacted level, and $986 million (8.9%) above the level of appropriations originally requested for FY2020. The request included $196 million (2.4%) more than enacted in FY2020 for Operations and Support, $164 million of which is for pay and retirement increases, and increases to allowances for military personnel. For the first time in many years, the costs of Overseas Contingency Operations (OCO) were proposed for inclusion in the base discretionary appropriation for Operations and Support, without designation to adjust the discretionary budget limits to accommodate it. The OCO proposal was for $215 million in FY2021, up $25 million from the FY2020 enacted level. The budget request also included more than $30 million in increases for cyber operations. $135 million (7.6%) less than enacted for Procurement, Construction, and Improvements. Reductions of $130 million (80.7%) for the National Security Cutter program and $240 million (92.3%) for the Fast Response Cutter program were offset by increases of $234 million (75%) for the Offshore Patrol Cutter program and $420 million (311%) for the Polar Security Cutter program, as part of a net increase of $286 million (28.8%) for USCG vessels procurement. $351 million (69.6%) less than enacted was requested for USCG aircraft procurement. $13 million (18.6%) less than enacted was requested for other acquisition programs, and $58 million (28.3%) less than enacted for Shore Facilities and Aids to Navigation. Less than $1 million (6.6%) more than enacted was requested for Research and Development. U.S. Secret Service (USSS) The Administration's budget request envisions moving the USSS to the Department of the Treasury. However, the budget is still structured as it would be in DHS, and the numbers are provided here for analytical purposes. The $2.36 billion appropriations request for USSS was $55 million (2.3%) below the FY2020 enacted level, and $52 million (2.2%) above the level of appropriations originally requested for FY2020. The request included $26 million (1.1%) less than enacted for Operations and Support, despite $71 million being added for the costs of pay and retirement increases. The primary driver of the decrease was the anticipated reduction of $86 million in costs from the conclusion of the 2020 presidential election cycle. $20 million for 119 additional personnel and $20 million in transition costs for the proposed transition of the USSS back to Treasury also are included in the request. $29 million (42.8%) less than enacted in FY2020 for Procurement, Construction, and Improvements, and less than $1 million (4.2%) less than enacted for Research and Development. Incident Response and Recovery Operational Components (Title III) Cybersecurity and Infrastructure Security Agency (CISA) The Administration's $1.76 billion appropriations request for CISA was $258 million (12.8%) below the FY2020 enacted level, and $150 million (9.3%) above the level of net appropriations originally requested for FY2020. The request included $128 million (8.2%) less than enacted in FY2020 for Operations and Support, despite $28 million being added for the costs of pay and retirement increases. The reduction is largely driven by the proposal to convert the Chemical Facility Anti-Terrorism and Safety program to a voluntary initiative, reducing program costs by $68 million, and a $34 million reduction in Threat Analysis and Response. $121 million (27.9%) less than enacted in FY2020 for Procurement, Construction, and Improvements, largely driven by a $114 million reduction in Cybersecurity Assets and Infrastructure, $75 million of which is to the National Cybersecurity Protection System. $8 million (55.4%) less than enacted in FY2020 for Research and Development, due to reductions in funding for the Technology Development and Deployment Program and National Infrastructure Simulation and Analysis Center. Federal Emergency Management Agency (FEMA) The Administration's $9.36 billion appropriations request for FEMA was $12.92 billion (58.0%) below the FY2020 enacted level, and $8.65 billion (48.0%) below the level of appropriations originally requested for FY2020. The primary driver of this change is a $12.29 billion reduction from the enacted level for the costs of major disasters (a large portion of the resources in the Disaster Relief Fund). If this reduction is set aside, the request is a $628 million reduction from the FY2020 enacted level, and a $364 million increase from the FY2020 request. The request includes $32 million (2.9%) more than enacted for Operations and Support, $32 million of which is for pay and retirement increases (the combination of other increases and decreases in the account has a net zero effect); $47 million (35.1%) less than enacted for Procurement, Construction, and Improvements, largely due to lower requests for grants management modernization, Mount Weather facilities, and the Center for Domestic Preparedness; $696 million (21.9%) less than enacted for Federal Assistance, largely due to reduction in preparedness grants, the Flood Hazard Mapping and Risk Analysis Program, and elimination of the Emergency Food and Shelter Program; and $12.21 billion (68.4%) less than enacted for the Disaster Relief Fund (DRF). The request for the portion of the DRF that covers major disasters dropped from an enacted level of $17.35 billion to $5.06 billion, a request that is based on the average of the last 10 years obligations for major disasters costing less than $500 million (termed "non-catastrophic disasters"), and spending plans for past disasters costing FEMA more than $500 million (termed "catastrophic disasters"). The portion of the DRF that covers emergencies and other activities increased $82 million (16.1%) to $521 million, largely on the basis of an increase in the 10-year average of those costs, and $15 million for real estate needs associated with FEMA's Recovery Service Centers. Support Components (Title IV) U.S. Citizenship and Immigration Services (USCIS) The Administration's $119 million appropriations request for USCIS was $14 million (10.4%) below the FY2020 enacted level, and $3 million (2.4%) below the level of appropriations originally requested for FY2020. The request includes $4 million (3.0%) less for Operations and Support than enacted in FY2020, and $3 million (2.4%) less than requestedâ$2 million in increased pay raise and retirement costs were offset by reduced costs for rent and efficiencies through modernization efforts. The request does not include an appropriations request for Federal Assistance, which received $10 million in the FY2020 enacted DHS appropriations bill for Citizenship and Integration Grants, which the Administration proposes funding through Immigration Examinations Fee revenues. Less than 3% of the USCIS budget is appropriated. The budget request projects more than $4.9 billion in mandatory spending for USCISâ97% of its total budgetâwill be supported by fees in FY2021, up $213 million (4.5%) from FY2020 levels. This overall structure is similar to last year's request. Federal Law Enforcement Training Centers (FLETC) The Administration's $331 million appropriations request for FLETC was $20 million (5.6%) below the FY2020 enacted level, and $19 million (5.5%) below the level of appropriations originally requested for FY2020. FLETC also anticipates receiving $211 million (up $25 million, or 13.4%) in reimbursements for training and facilities use from those it serves. The request includes $12 million (4.3%) more than was enacted in FY2020 for Operations and Support, $7 million of which is for increased pay and retirement costs; $32 million (55.3%) less than was enacted in FY2020 for Procurement, Construction, and Improvements, due to completion of funding for projects in the FY2020 enacted appropriation. The FY2021 budget includes $26 million for the purchase of two dorms it currently leases. Science and Technology Directorate (S&T) The Administration's $644 million appropriations request for the S&T Directorate was $94 million (12.7%) below the FY2020 enacted level, and $62 million (10.6%) above the level of appropriations originally requested for FY2020. The request includes $30 million (9.6%) less than the enacted level for the Operations and Support appropriation, largely due to a $35 million (24.6%) reduction in mission support activities; Only $3 million of the Operations and Support request is for pay and retirement cost increases. $19 million in the Procurement, Construction, and Improvements appropriation (which had no funding requested or provided in FY2020) for costs associated with the closure and sale of the Plum Island Animal Disease Center; and $82 million (19.5%) less than enacted for the Research and Development appropriation, due to a $64 million (16.6%) reduction in in-house research activities and a $19 million (46.3%) reduction in university-based research. Countering Weapons of Mass Destruction Office (CWMD) The Administration's $377 million appropriations request for CWMD was $55 million (12.8%) below the FY2020 enacted level, and $46 million (10.9%) below the level of appropriations originally requested for FY2020. The request includes $7 million (3.7%) less than the enacted level for the Operations and Support appropriation, $40 million (18.7%) less than was requested for FY2020; This reduction is driven by a $5 million (40.7%) reduction in funding for the National Biosurveillance Integration Center's biosurveillance and early warning support on biological attacks and emerging pandemics, and an almost $3 million reduction in technical forensics operational readiness, which the request says is being funded by the National Nuclear Security Administration. $1 million (0.4%) was requested for covering the increased pay and retirement costs. $32 million (26.5%) less than the enacted level for the Procurement, Construction, and Improvements appropriation, largely driven by reductions to the Radiation Portal Monitor Replacement Program ($46 million, 68.1%) and Common Viewer program ($8 million, zeroed out); $11 million (15.9%) less than the enacted level for the Research and Development appropriation, largely driven by a $7 million reduction in Technical Forensics and a $9 million (27.3%) reduction in detection capability activity; and $6 million (9.3%) less than the enacted level for the Federal Assistance appropriation, largely due to an $11 million (44.6%) reduction in funding for the Securing the Cities program. Headquarters Components (Title I) Office of the Secretary and Executive Management (OSEM) The Administration's $150 million appropriations request for OSEM was $28 million (15.9%) below the FY2020 enacted level, and $9 million (6.4%) above the level of appropriations originally requested for FY2020. The request includes $18 million (10.9%) less than enacted level for the Operations and Support appropriation, largely driven by a $15 million (25.9%) reduction in operations and engagement activities. The request included $5 million to pay for increased salary and retirement costs. $10 million less than the enacted level for the Federal Assistance program, as the targeted violence grants funded in this component in FY2020 are funded in the FEMA request for FY2021. Departmental Management Directorate (MD) The Administration's $1.76 billion appropriations request for MD was $198 million (12.7%) above the FY2020 enacted level, and $204 million (13.1%) above the level of appropriations originally requested for FY2020. The request includes $220 million (18.6%) more than was enacted in FY2020 for the Operations and Support appropriation, $186 million of which is net transfers as a result of DHS transitioning away from using a working capital fund; Also included in this appropriations request is a $13 million increase to cover increased pay and retirement costs. Of the remaining changes, most of the net increase is due to investments in information technology and cybersecurity. $22 million (5.7%) less than was enacted in FY2020 for the Procurement, Construction, and Improvement appropriation. Of the $359 million requested, over $200 million was for investments in DHS headquarters facilities, including St. Elizabeths; Mount Weather; and consolidation of headquarters leases. Analysis and Operations (A&O) The Administration's $313 million appropriations request for A&O was $28 million (10.0%) above the FY2020 enacted level, and $36 million (13.0%) above the level of appropriations originally requested for FY2020. Most of the details of the A&O budget request are classified. However, the request included a $6 million increase to cover increases in pay and retirement costs. Office of Inspector General (OIG) The Administration's $178 million appropriations request for the OIG was $12 million (6.5%) below the FY2020 enacted level, and $8 million (4.5%) above the level of appropriations originally requested for FY2020. $5 million in additional funding is requested to cover increased pay and retirement costs. The budget request includes a reduction of more than $15 million (16.5%) in OIG audits and investigations. The budget justification notes that the OIG submitted a funding request of $196 million, which the OIG states "is essential to sustain FY 2020 operations into FY 2021 at the FY 2020 appropriated level and maintain oversight capacity commensurate with the Department's growth in several high-risk areas, including frontline security and infrastructure along the southern border, cybersecurity defenses, major acquisitions and investments, and accelerated hiring of law enforcement personnel." Administrative and General Provisions Administrative Provisions Administrative provisions are included at the end of each title of the DHS appropriations bill and generally provide direction to a single component within that title. In the FY2021 budget request, the Administration proposed a number of changes from the FY2020 enacted DHS appropriations measure, including Deleting Â§106, which established the Ombudsman for Immigration Detention. Adding a new section related to the proposed transfer of the Secret Service to the Department of the Treasury, which would allow for funds from the DHS OIG to be transferred to the Treasury OIG. Deleting Â§207-Â§212, which barred any new land border crossing fees; required an expenditure plan be submitted to Congress for the CBP Procurement, Construction, and Improvements appropriation before any of that appropriation could be obligated; constrained the use of the CBP Procurement, Construction, and Improvements appropriation, including limiting the types and locations of border barriers that could be constructed and requiring reporting to the appropriations committees on (1) the plans for barrier construction, (2) changes in barrier construction priorities, and (3) consultation with affected local communities, as well as an annual update to risk-based plan for improving border security; barred construction of barriers in certain locations; required statutory authorization for reducing vetting operations at the CBP's National Targeting Center; and directed certain CBP Operations and Support appropriations to humanitarian needs at the border and addressing health, life, and safety issues at Border Patrol facilities. Deleting Â§216, which barred DHS from detaining or removing a sponsor, potential sponsor or the family member of sponsor or potential sponsor of an unaccompanied alien child on the basis of information from the Department of Health and Human Services, unless a background check reveals certain felony convictions or association with prostitution or child labor violators; Deleting Â§227, which provided flexibility in allocating Coast Guard Overseas Contingency Operations funding; Deleting Â§229, which bars the use of funds to conduct or implement an A-76 competition for privatizing activities at the National Vessel Documentation Center; Deleting Â§231-Â§232, which were changes to permanent law (and thus no longer required inclusion in the bill) that allowed for continued death gratuity payments for the USCG if appropriated funding was unavailable for obligation; and categorized amounts credited to the Coast Guard Housing Fund as offsetting receipts. Deleting Â§233-Â§236, which allowed the Secret Service to obligate funds in advance of reimbursement by other federal agencies for training expenses; barred the Secret Service from protecting agency heads other than the secretary of DHS, unless an agreement is reached with DHS to do so on a reimbursable basis; allowed the Secret Service to reprogram up to $15 million in its Operation and Support appropriation; and allowed flexibility for Secret Service employees on protective missions to pay for travel without regard to limitations on costs, with prior notification to the appropriations committees. Adding Â§308, which requires a 25% nonfederal contribution for projects funded under the State Homeland Security Grant Program, Urban Area Security Initiative, Public Transportation Security Assistance, Railroad Security Assistance, and Over-the-Road Bus Security Assistance programsâcurrently there is no such cost share; and Adding Â§309, which would allow a transfer 1% of funding provided for the State Homeland Security Grant Program and Urban Area Security Initiative to FEMA Operations and Support for evaluations of the effectiveness of those programs. General Provisions General provisions are included in the last title of the DHS appropriations bill and generally provide direction to the entire department. They include rescissions or additional budget authority in some cases. In the FY2021 budget request, the Administration proposed relatively few substantive changes to the general provisions enacted in the FY2020 bill. They sought to: Remove Â§530, which provided $41 million for reimbursement of extraordinary law enforcement costs for protecting the residence of the President; Remove Â§532, which required that DHS allow Members of Congress and their designated staff access to DHS facilities housing aliens for oversight purposes; and Remove Â§537-Â§540, which rescinded prior year appropriations from various accounts. Appendix.	Summary:	gov_report	1,024	null	83
crs_R45923	crs_R45923_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The U.S. Coast Guard is the agency charged by law with overseeing the safety of vessels and maritime operations. For at least four decades, Congress has been concerned about the Coast Guard's ability to maintain an adequate staff of experienced marine safety personnel with technical knowledge of vessel construction and accident investigation. Recent incidents, particularly the 2015 sinking of the U.S.-flag cargo ship El Faro with the loss of 33 lives during a hurricane near the Bahamas, have revived questions about the Coast Guard's persistent difficulty with hiring and training a marine safety workforce. The safety inspections of the vessel were found to have been inadequate. In the Hamm Alert Maritime Safety Act of 2018 ( P.L. 115-265 , Â§210), Congress directed the Coast Guard to brief congressional committees of jurisdiction on its efforts to enhance its marine inspections staff, the staff responsible for ensuring that vessels are meeting safety standards. In the Frank LoBiondo Coast Guard Authorization Act of 2018 ( P.L. 115-282 , Â§501) Congress requested a report from the Coast Guard detailing the courses and other training a marine inspector must complete to be considered qualified, including any courses that have been dropped from the training curriculum in recent years. This report examines the staffing challenges the Coast Guard faces in assuring marine safety at a time when its responsibilities in this area are increasing significantly. It also considers proposals to realign marine safety functions within the federal government. The Marine Safety Mission The Coast Guard engages in two distinct activities with respect to marine safety: Vessel inspection . The Coast Guard has a staff of 671 marine inspectorsâ533 military and 138 civilianâwho are responsible for inspecting U.S.-registered passenger and cargo vessels, foreign-flag vessels calling at U.S. ports, mobile offshore drilling units, and towing vessels and barges carrying hazardous cargoes. Foreign-flag vessels are those registered in jurisdictions other than the United States. Accident investigation. The Coast Guard employs 158 accident investigatorsâ120 military and 38 civilianâwho conduct casualty investigations of U.S.- and foreign-flag vessels to detect and correct safety hazards, prepare investigation reports, analyze trends, and recommend enforcement action. These two assignments fall under the Coast Guard's prevention policy workforce headed by the Assistant Commandant for Prevention Policy, a rear admiral. Reporting to the Assistant Commandant is the Director of Inspections and Compliance, a captain, who oversees the Office of Commercial Vessel Compliance and the Office of Investigations and Casualty Analysis, among other safety-related offices. The prevention policy workforce is especially critical for the commercial U.S.-flag fleet because a majority of this fleet is much older than the 15 to 20 years of age at which ships in the worldwide oceangoing fleet are typically scrapped. About 60% of the 217 ships in the dry-cargo U.S.-flag commercial fleet and 53% of U.S.-flag offshore supply vessels (which service oil rigs) are older than 20 years; the El Faro had been in service for 40 years. Some 72% of the 1,497 vessels in the U.S.-flag passenger and ferry fleet are over 20 years old. In general, older vessels require more frequent inspection; the National Transportation Safety Board (NTSB) raised questions about the quality of the Coast Guard's inspections in its investigation of the El Faro sinking, after which the Coast Guard revoked the safety certificate for another vessel of the same design and similar age, forcing its removal from service. Generally, inspections of vessels carrying passengers or hazardous cargo, and inspections of older vessels, are more frequent than inspections of general-cargo vessels and newer vessels. Vessels transporting cargo or passengers domestically (from one U.S. point to another U.S. point) must be U.S.-built, as required by the Jones Act. The cost of U.S.-built vessels, particularly deep-draft ships, can be multiples of world prices, which may retard vessel replacement. U.S.-flag vessels on international voyages need not be U.S.-built, and this fleet is younger than the Jones Act fleet. Congress's request for information about the Coast Guard's inspection staff comes at a time when the number of vessels requiring inspection is increasing by about 50% because towing vessels have been added to the list. Congress has been increasing the agency's role in fishing vessel safety as well, putting additional demands on the safety workforce. Adding to the Coast Guard's safety responsibilities is the construction of several liquefied natural gas (LNG) export terminals, whose siting, operations, and security are partly or entirely under Coast Guard jurisdiction, as well as the increasing use of LNG as ship fuel. Workforce Qualifications, Training, and Pay Scales According to the Coast Guard, the marine inspector workforce consists of commissioned officers, chief warrant officers (CWOs), and civilians. Officer marine inspectors enter the workforce through a variety of accession sources, including Officer Candidate School, the Direct Commission Officer program for U.S. Maritime Academy graduates, and the Coast Guard Academy. CWOs are divided into two specialties: Marine Safety Specialty Deck and Marine Safety Specialty Engineer. Those who meet the eligibility requirements to compete for CWO are selected through an accession panel. An emphasis is placed on past maritime and inspection experience when hiring civilian marine inspectors. Additionally, the Coast Guard hires and trains civilians who are inexperienced in inspections to become marine inspectors through its civilian marine inspector apprenticeship program. The normal entry is a marine inspector apprenticeship tour at a larger port (referred to as a feeder port). A feeder port is located near a unit that is better prepared and equipped to train inspectors. The civilian inspectors generally remain at a single location for their entire careers to provide continuity. Most officers complete one to three tours as a field-level marine inspector or marine investigator and do not rotate between tours ashore and afloat. Officers rotate approximately every three years and may be promoted to leadership positions in the marine safety organization. CWOs remain marine inspectors or marine investigators until retirement. On average, a CWO serving as a marine inspector works in this capacity for approximately 8.7 years. Inspector pay scales range from CWO2 to CWO4 (approximately $90,000 to $124,000); officers (O-1 to O-5, approximately $64,000 to $152,000). Civilian marine inspectors are typically classified at GS-12 ($64,000 to $84,000). The investigator workforce also comprises commissioned officers, CWOs, and civilians. It has the same path for entry as marine inspection. Many marine investigators have prior experience as inspectors, giving them familiarity with commercial shipping operations and regulations. However, this is not true in all cases, and some marine investigators become familiar with marine inspections through on-the-job training. The typical pay scale for investigators is CWO3 to CWO4 (approximately $106,000 to $124,000) and O-2 to O-4 (approximately $83,000 to $130,000). The Coast Guard has recognized the training of the inspection staff as an important concern. As Rear Admiral John Nadeau, then the Coast Guard's Assistant Commandant for Prevention Policy, testified at a January 2018 hearing about the El Faro casualty: [T]his is not strictly a capacity problem. There are elements to training. If you just gave me another 1,000 marine inspectors, it wouldn't solve this problem. This problem involves training. This problem involves getting the right information. This problem involves getting the right policy and procedures in place.... Entry-level marine inspections is not what I am talking about. I need to have a small corpsâit is not a lotâa small corps of people that can get out and are highly trained and proficient and stay focused on this area until we get it right. In a March 2019 hearing, Rear Admiral Nadeau testified that the agency was improving the quality of its safety inspection workforce: [T]he Coast Guard has prioritized marine inspector training, established new staff dedicated to performing third party oversight, increased opportunities for maritime graduates to join the Coast Guard, and prioritized the hiring of civilian marine inspectors.... The Coast Guard is actively developing a comprehensive training architecture for our marine inspectors. This architecture will provide cohesive strategy, policy, and performance support to ensure that Coast Guard marine inspectors are trained consistently from the basic to the advanced level in a manner that keeps pace with industry, technology, and related regulatory changes. Managing Marine Safety The Coast Guard repeatedly has made statements in recent decades laying out its plans to improve the quality of its inspection workforce. Often, these pronouncements have been in response to heightened congressional scrutiny of the agency's marine inspection program in the aftermath of a major marine casualty in which investigators found that subpar vessel inspections played a contributing role. This cycle was described by a retired Coast Guard senior official in 2015: [T]he Marine Safety program is a low profile mission within the Coast Guard's multi-mission portfolio. That is true until a confluence of factors markedly raises its visibility and causes great introspection. The program's purpose is to keep bad things from happening. Non-events are virtually impossible to measure. Marine Safety is normally not a major budget item of interest to the Service. The Coast Guard, especially in what has generally been a declining resource environment, will always have many pressing and competing budget needs. And if a major incident occurs, Congress is willing to throw the Service a lifesaver in the form of significant dollars. As employees of a military organization, Coast Guard personnel typically change mission assignments and/or locations every two or three years, so they do not develop the knowledge and experience required of a proficient marine inspector or investigator. As noted, the scope of the vessel types the Coast Guard inspects ranges from small passenger boats to oceangoing ships to mobile offshore drilling rigs. Geographic reassignments can change the category of vessels an individual inspector must evaluate. Vessel technology can be complex and is constantly changing, and the safety regulations are voluminous and technical. An internal Coast Guard study in 2012 revealed that "41% of marine inspectors were not confident interacting with maritime industry personnel concerning marine inspection issues." Even if personnel rotate back into marine inspection after a different assignment, they need time to regain proficiency. The Coast Guard recognizes the difficulty of building marine inspection and investigation proficiency among uniformed officers who rotate assignments frequently. Consequently, each Commandant's initiative or plan to revamp marine inspections has stated a goal of boosting the civilian inspector and investigator workforce and creating more attractive long-term career paths by extending promotion potential. However, a perception inside the agency that marine safety is an area that retards promotion could be thwarting efforts to boost the inspection workforce. This is asserted in a study by a career Coast Guard official who spent his last several years working in human resources for the agency: [T]he Coast Guard's internal manpower management processes are considered to be at odds with the need to build and maintain a competent marine safety officer corps â¦ The perception for decades is that it is difficult for marine safety officers to succeed in the Coast Guard's military officer promotion system. The Service endeavors to manage individual officer specialties, such as marine safety, while at the same time operate an "up or out" promotion system that is mandated by law.... officers who follow a marine safety career path consider themselves disadvantaged as they become more senior and face stiffer competition for promotion.... Currently, the perception of disadvantage continues. World War II Gives Coast Guard New Role The Coast Guard's challenges with marine inspection and investigation date to a government reorganization in preparation for World War II. A 1942 executive order transferred the civilian Bureau of Marine Inspection and Navigation (BMIN) from the Department of Commerce to the Coast Guard for the duration of the war and for six months after hostilities ended. After the war ended, President Truman proposed keeping the marine inspection function under the Coast Guard rather than transferring it back to the Department of Commerce. Proponents of this approach contended that the Coast Guard had performed the mission adequately during the U.S. involvement in the war and that synergies existed with other Coast Guard missions such as maritime search and rescue. Furthermore, they asserted, there was no need to create additional overhead and administrative expenses by establishing a separate bureau. The maritime industry argued against keeping marine inspections under the Coast Guard. A witness representing the American Petroleum Institute testified in 1947 that under the BMIN, almost all of the inspectors had been former merchant marine officers with 10 to 20 years of experience aboard ships who had practical knowledge of vessel safety vulnerabilities. The permanent assignment of marine inspections to the Coast Guard was part of a much larger government reorganization plan advanced by the Truman Administration that was to go into effect unless both houses passed a concurrent resolution of disapproval within a specified period. The House adopted such a resolution, but the Senate did not. Consequently, President Truman's plan became effective in 1946. In subsequent years, the Coast Guard's role remained a point of contention. In 1947, a representative of a ship captains' union testified that under the old regime, the men in the Bureau of Marine Inspection were the wearers of the purple cloth. Before men could become assistant local inspector and go up to the grade of local inspector and supervising inspector, and so forth, they had to be either a master mariner [ship captain], or a chief engineer â¦ with the result that the most mature, and most sensible and most experienced and most intelligent of our profession got into the service. It was very seldom that you found a local inspector under 35 years of age.... They were of mature judgement and they were one of the most respected organizations in the entire marine industry. The concern that the Coast Guard would be unable to replace the experience of the ex-BMIN inspectors as they retired persisted over the decades. In 1979, the General Accounting Office (GAO, known since 2004 as the Government Accountability Office) conducted an audit of the Coast Guard's marine inspection program after a series of tanker accidents in or near U.S. waters during the winter of 1976-1977 resulted in losses of life and property and environmental damage. Under the heading "Trained and Experienced Personnel Needed," the GAO report raised questions about the training of marine inspectors: Most of the inspectors in the three districts included in our review have had at least one tour of sea duty on Coast Guard cutters. Considering this sea experience, along with the on-the-job and formal training, it would seem that most inspectors would be highly qualified. However, we found that relatively few field unit inspectors could be considered as qualified hull or boiler inspectors. This has occurred because the Coast Guard has not established uniform criteria or procedures to determine whether inspectors are actually qualified and has not scheduled needed vessel inspection training in a timely manner. In addition, the rotation policy caused by the lack of a specialized job classification or career ladder contributes to the difficulty in achieving and maintaining expertise in marine inspection. The report note d that the Coast Guard Merchant Marine Safety Manual in effect at the time stated as a customarily accepted fact that it takes three years of experience to become a qualified marine inspector , adding that "every 2 to 3 years the Coast Guard rotates its staff among various duty stations such as search and rescue, buoy tenders, and high- and medium-endurance cutters , " and that " about the time personnel become proficient in one area, such as vessel inspection, they are transferred and assigned to another job." The GAO found that "few field inspectors had previous inspection duty or consecutive assignments at marine inspection offices" and the Coast Guard had been "unable to keep experienced and trained staff in the vessel inspection area." Some of the Coast Guard field officers interviewed by the GAO commented that inspectors needed to have additional expertise to gain the respect of the maritime industry, and that most inspectors were not knowledgeable enough to provide industry with a precise interpretation of marine rules and regulations. In response to the 1979 GAO report, the Coast Guard stated that while it would consider establishing an inspection specialty career classification for both officers and enlisted personnel and extend its inspection assignment tour, its existing job classification system was better suited to the multimission nature of the agency. The 1980s In October 1980, the U.S.-flag ship Poet , carrying a load of corn to Egypt, disappeared with no trace somewhere in the Atlantic. Its disappearance was believed to have coincided with a period of heavy weather; the structural integrity of the 36-year-old ship was suspected as a possible cause. The Coast Guard's Marine Board of Investigation found that the Coast Guard inspector conducting most of the ship's inspections during the year prior to the voyage had no previous experience inspecting commercial vessels, which heightened the Marine Board's concern that structural defects may have gone undetected. In February 1983, the Marine Electric , a 40-year-old Jones Act ship carrying coal from Norfolk, VA, to Massachusetts, sank in heavy weather, killing 31 crew members. Investigators concluded that the probable cause of the sinking was the poor condition of the cargo hatches and deck plating, which allowed waves to flood the hull. The Coast Guard's Marine Board of Investigation stated that the ship's Coast Guard inspectors lacked the experience to conduct safety examinations of a vessel the size, service, and configuration of the Marine Electric . The incompleteness of these inspections as to the dictates of regulations and policy was attributed to the lack of training and experience on the part of the Coast Guard inspectors.... the inexperience of the inspectors who went aboard the Marine Electric , and their failure to recognize the safety hazard imposed by the deteriorated, weakened and non-tight hatch covers, raises doubts about the capabilities of the Coast Guard inspectors to enforce the laws and regulations in a satisfactory manner. At a 1983 congressional hearing examining the marine casualty, a representative of a ship engineers' union noted that "Coast Guard officers with 12 weeks experience behind a desk are dealing with officers of the merchant marine who have spent 20 years at sea," and that "an inspector can't condemn a dangerous ship if he doesn't know what a dangerous ship is." This representative further stated that "while multi-mission flexibility and frequent rotation may be an optimal way to fulfill the Coast Guard's military readiness mission, it is a serious and even fatal distraction from the regulation of commercial industry." The witness urged Congress to transfer ship inspection responsibilities to an agency of civilian career professionals, similar to the Bureau of Marine Inspection and Navigation that existed before World War II. Some committee Members appeared receptive to this idea. The witness also raised the issue of whether the more fundamental problem was the age of the U.S. fleet: The problem of course is old ships. This means dangerous ships â¦ The Poet and the Marine Electric are trying to tell us something: If a ship isn't retired when it gets old, it will retire itself ... Although 40% of the U.S. fleet is at least 20 years old, 75% of the dozen worst U.S. marine tragedies in the past two decades struck these ships aged 20 or older. Twenty is the rounded number when industry experts say a ship should be junked. In conclusion, any analysis of the plight of maritime safety is misleading if it does not identify old ships as the core of the problem. The only way to uproot this evil is to mandate an aggressive attack by a dedicated and seasoned staff of professional inspectorsâa team that the Coast Guard could never field unless it ended its fundamental multi-missioned military structure. In 1985, following up on its 1979 audit, the GAO reported that the Coast Guard had recently completed a two-year project to develop a new marine safety training and qualification program. One change was establishment of uniform standardized on-the-job training and on-the-job qualification requirements. Another change was selection of three "training ports" where new inspectors would go for 18 months of intensive training before their initial assignment. The GAO stated that it was too early to assess whether these changes had addressed the qualification problems identified in its 1979 report. On March 24, 1989, the U.S.-flag tanker Exxon Valdez grounded on Bligh Reef after departing Valdez, AK, spilling about 11 million gallons of oil. The actions of the ship captain, who was found to be impaired by alcohol, and who had turned over operation of the vessel to a third mate before reaching open waters, was the focus of the marine casualty investigation. In response to the Exxon Valdez incident, among other things, Congress increased funding for Coast Guard safety personnel. According to one Coast Guard senior official, the "War on Drugs" in the mid-1980s had shifted resources from the agency's safety mission to its drug interdiction mission. The 1990s In the 1990s, the quality of Coast Guard inspections came under scrutiny again as the result of two fatal passenger vessel incidents. On December 5, 1993, the wooden vessel El Toro II , a fishing charter party vessel built in 1961 and carrying 23 people, began sinking in the Chesapeake Bay when water seeped through the hull's planks. There were three fatalities. The Coast Guard's Marine Board of Investigation found that the Coast Guard inspector's knowledge of wooden boat structure was lacking, and that inspection staff were not cognizant of previous inspection reports that would have prompted concern about the vessel's seaworthiness, given the owner's poor track record in making needed repairs to the 32-year-old vessel. The second incident occurred on a lake near Hot Springs, AR, in May 1999. The Miss Majestic , an amphibious "duckboat" built during World War II to transport troops and supplies, which had since been converted into a tour boat, began taking on water and sank in less than 30 seconds, drowning 13 of its 20 passengers. The Coast Guard's Marine Board of Investigation found that the Coast Guard inspector had not noticed that a critical part was missing from the rear shaft that was the main source of the leak. It determined that the inspector lacked awareness of the importance of this vessel's design components. The board also found that the local Coast Guard office was not keeping adequate inspection records, which would have shown that the vessel's owner had not installed safety equipment that previous inspectors had called for. The NTSB concluded that the Coast Guard's inspections of the vessel were "inadequate and cursory" and that the "lack of Coast Guard guidance and training for the inspection of [this vessel design] contributed to the inadequate inspections of the Miss Majestic ." Moreover, the NTSB found that Coast Guard inspectors over the preceding five years had missed deficiencies with the vessel that might have been obvious even to an untrained observer, such as pinholes in the hull of the vessel caused by corrosion and an improper repair using a rubber patch to conceal a large, wasted area of the hull. These marine casualties in the 1990s prompted the Coast Guard and Congress to examine the marine safety mission of the agency once again. In December 1995, the Coast Guard conducted an internal study of its accident investigation activity. One of the recommendations of the internal report was "To improve the overall quality of the information derived from investigations, an investigations career path should be developed. This would enable the Coast Guard to raise the overall level of expertise in investigations." In 1996, the GAO reviewed whether the Coast Guard had fully utilized additional funding Congress provided the agency in the early 1990s to add 875 positions to its Marine Safety Program. At a 1997 congressional hearing, a representative of the passenger vessel industry noted that vessel inspection "responsibilities fill hundreds of pages of regulations and thousands of pages of referenced consensus standards and rules." The industry representative was "concerned that the problems in the commercial vessel safety program will grow because of a resulting lack of training and experience on the part of many Coast Guard inspectors." The 2000s Following the terrorist attacks of September 11, 2001, Congress greatly increased the Coast Guard's resources directed toward maritime security matters. The maritime industry's reaction to the Coast Guard's new security responsibilities came to light at a 2007 congressional hearing. Some industry witnesses at the hearing contended that since the Coast Guard had been transferred from the Department of Transportation to the newly created Department of Homeland Security (DHS) in 2002, the agency was more focused on security matters than on safety. One industry witness asserted that the industry's relationship with Coast Guard inspectors had changed from being partners with a mutual interest in safety to being viewed as a security risk. The purpose of the 2007 hearing was to examine a proposal by the chairman of the House Transportation and Infrastructure Committee to transfer the Coast Guard's marine safety inspection function to a civilian agencyâin other words, to undo the World War II-era reorganization. The chairman argued that "What we need is what we have in the [Federal Aviation Administration], skilled personnel who have years of seasoning, who aren't shifted year after year from one post to another with only three years on staff." At the hearing, a witness representing ship captains described how marine inspection was performed in other countries: In foreign countries outside the United States, you go to the Netherlands or Germany or Norway, that is a civilian force that comes on. They are all retired masters or chief engineers, and they become the inspection service for that country. When they go aboard a ship, they are interfacing with chief engineers and masters that have a shared experience. There is a great deal of respect for the inspectors, and the inspectors have a great deal of respect for the officers on the ship. It is an effective system. You have expertise. You have competence, and you have motivation. They obviously love the maritime industry because that is their choice. It is not something they have been assigned to as part of their tour of duty and attaining a generalized background in the Coast Guard. I think that is the way to go. When a fellow retires after a career at sea and he is 45, 50 years old, he might not be looking for a future career advancement as Coast Guard officer. You make him a civilian inspector, and he would fill the same role that they fill in Germany and most maritime countries. Most maritime countries do not have a uniform Coast Guard acting as the maritime inspection service. They use maritime professionals from the industry to fill that role. When they send a petty officer down to represent the United States' interest in enforcing international conventions on foreign flag ships as a port state control officer, the foreign masters, the Germans and the British, take offense that the Coast Guard hasn't sent an officer down or a civilian personnel with a maritime background. At the hearing, the Commandant of the Coast Guard explained the dilemma facing the agency regarding its inspection staff: Here is the quandary we are faced with. Sooner or later, as you get promoted in the Coast Guard, you become a commanding officer. If you get selected for flag, you become a district commander and maybe even a Commandant. When you get to there, you become a general. You are representing the entire organization. We have an issue of needing specialists, subject matter experts, but at some point we need to generalize these folks and give them other experiences if they are going to be promotable and move up to become executives in the organization. In corporate America, for example, if you are a vice president, everybody needs to understand corporate finance. What we have developed inside the Coast Guard is the notion of what we call a broadened specialist. What we need to look at is maintaining the subject matter expertise that is critical to mission execution and then how we can broaden these people at a later date and still make them promotable. They want to be able to move up in the organization as well. At the 2007 hearing, the Commandant urged the ex-chairman of the Transportation and Infrastructure Committee to defer his proposal until the Coast Guard had a chance to rectify the problem, which the chairman agreed to do. The Commandant outlined the actions he was taking to improve the inspection workforce: In the last year, I have directed significant changes and improvements in the training and qualifications of our inspectors to keep pace with the technological advancements and growth in maritime industry. We have made changes to our warrant officer selection system to bring more talented and experienced enlisted personnel into the maritime safety specialty. We have learned valuable lessons from joint military and civilian staffing of our sector command centers and our vessel traffic services. These are areas where we used to have Coast Guard personnel only staffing. We now have brought civilian personnel in to provide continuity, corporate memory and way to bridge during the transfer season, so we get the best of training for our people in uniform by maintaining continuity of services. I am committed to the establishment of more civilian positions in the marine inspection field. We need people with critical job skills. We need to maintain continuity while providing our military members access to this type of experience. We must leverage and expand this dual staffing model. Getting the inspection program right in terms of training, qualifications and staffing is my highest maritime safety priority. The Commandant also argued that marine safety and security were two sides of the same coin; they were not mutually exclusive missions but synergistic to the Coast Guard's other maritime missions. The Commandant's first step was an internal study of the issue by a retired Commandant. This internal study acknowledged that the agency's practice of regularly rotating staff geographically or by activity, as military organizations typically do, hindered its ability to develop a cadre of staff with sufficient technical expertise in marine safety. The report noted the following: "If the inspector is constantly referring to the regulations when conducting an inspection, the customer doesn't have much confidence in the quality of the Coast Guard inspection. I understand that the Coast Guard has sent unqualified personnel or marginally qualified personnel to conduct inspections and investigations." The report also stated that "the DHS has no responsibility for transportation safety so getting them to embrace the Marine Safety program could be a heavy lift." In response to this problem, the agency revamped its safety program and Congress appropriated additional funds specifically for safety personnel. The FY2009 Coast Guard budget request noted that "the Coast Guard is encountering serious stakeholder concern about our capacity to conduct marine inspections, investigations, and rulemaking." Under the revamped safety program, the Coast Guard created additional civilian safety positions, converted military positions into civilian ones, and developed a long-term career path for civilian safety inspectors and investigators. A 2008 audit by the DHS Inspector General (IG) confirmed that Coast Guard stated that the problems identified with respect to its safety program workforce also existed among vessel accident investigators. The IG found that accident investigations were hindered by unqualified personnel and recommended hiring more civilians for this activity. The IG also found that the Coast Guard had lowered the qualification standard for accident investigators in August 2007 by removing the requirement that an investigator have experience as a hull or machinery and small passenger vessel inspector. Since vessel casualties commonly involve structural deficiencies in the hull or loss of propulsion, this experience is considered important for an accident investigator. The IG noted that in the United Kingdom, Australia, and Canada, accident investigators are required to be former ship captains or chief engineers with several years of experience. The IG report noted issues with rotating assignments and promotion potential in the marine safety area: A tour in the Prevention Directorate could mean yearly rotations across specialty areas, such as waterways management and drug and alcohol testing. Given the lack of a career path and the unpredictable nature of investigation assignments, potential Coast Guard candidates also may not want to become investigators. Hull and Machinery Inspectors told us that promotion to the position of marine casualty investigator would not advance their careers. Additionally, according to Coast Guard personnel, tour of duty rotations hinder investigators in acquiring the experience needed for career development. The agency's uniformed investigators generally are not in their positions for more than a single, three-year tour of duty in the same location. The forced rotations preclude the investigators from acquiring the extensive knowledge of local waterways and industries that experienced casualty investigators have told us is needed to be an effective investigator. In contrast, civilian marine casualty investigators are not subject to the three year tour of duty rotation standard. Over time, they can gain a greater knowledge of specialties such as local waterways and industries or experience in enforcing maritime regulations to enhance their qualifications. Of the 22 marine casualty investigators that we reviewed, one was a civilian. A 2009 study by the Homeland Security Institute, a federally funded research center established by Congress in the Homeland Security Act of 2002 (Â§312) to assist DHS in addressing policy issues, reiterated the same theme regarding frequent rotations of uniformed staff hindering proficiency in marine inspection and investigation. The study's recommendations were to increase tour lengths as well as require back-to-back tours in these areas and to rely more on civilians for these functions. The study found that the Coast Guard's workforce database was not able to indicate years of service or level of expertise for marine safety personnel. The study found that the Coast Guard had no central office responsible for overall management of the marine safety workforce and therefore there were no agency-wide specific standards for determining qualifications in this area. Lacking documentation, the study's authors relied heavily on interviews with hundreds of Coast Guard personnel and private industry to gather data on the marine safety workforce. Recent Developments On April 20, 2010, the mobile offshore drilling unit Deepwater Horizon , 45 miles off the coast of Louisiana, experienced a catastrophic blowout, causing a major explosion and fire, and resulting in its sinking. There were 11 deaths and an oil spill estimated at approximately 206 million gallons, the largest in U.S. history. The Department of the Interior's Minerals Management Service had responsibility for inspection of the drilling apparatus that was the cause of the explosion, but the Coast Guard was responsible for the safety inspection of the rig above water that has commonality with vessels in general (firefighting and lifesaving equipment, evacuation procedures, electrical systems). The ensuing investigation revealed that Coast Guard regulations of offshore structures dated to 1978 and had not been updated as rigs moved farther and farther offshore. For instance, in places where they are not attached to the seabed because of the tremendous depth, these rigs use dynamic positioning systems (propeller systems) to remain in place, but at the time of the accident the Coast Guard had not developed regulations for checking the safety aspects of these critical systems. In response to the Deepwater Horizon marine casualty, Congress required the Coast Guard to take several initiatives to improve the quality of its marine inspection workforce in the Coast Guard Authorization Act of 2010 ( P.L. 111-281 ). Under the subtitle "Workforce Expertise" (Â§Â§521-526), these initiatives included improving career path management, adding apprenticeships to the program, measuring workforce quality and quantity, adding a marine industry training program and a marine safety curriculum at the Coast Guard Academy, and preparing a report on recruiting and retaining civilian marine inspectors and investigators. A June 2011 audit by the DHS IG of vessel inspections in the offshore oil and gas industry (involving rigs and vessels that support operation of the rigs) found a positive result for the marine inspection program in this sector. The IG found that 99% of those inspections had been performed by Coast Guard inspectors who had been fully qualified. However, the IG found that the Coast Guard's guidance on how to inspect these vessels and how to record the results of these inspections was deficient. A May 2013 audit by the DHS Inspector General found that the agency's efforts had not improved its marine accident reporting system, due to familiar issues surrounding the qualifications and rotation of the personnel: The USCG [United States Coast Guard] does not have adequate processes to investigate, take corrective actions, and enforce Federal regulations related to the reporting of marine accidents. These conditions exist because the USCG has not developed and retained sufficient personnel, established a complete process with dedicated resources to address corrective actions, and provided adequate training to personnel on enforcement of marine accident reporting. As a result, the USCG may be delayed in identifying the causes of accidents; initiating corrective actions; and providing the findings and lessons learned to mariners, the public, and other government entities. These conditions may also delay the development of new standards, which could prevent future accidents. [T]he Director of Prevention Policy [the marine safety program] provides personnel with career management guidance that suggests they should leave this specialty to improve their promotion potential, because of the USCG's emphasis on personnel attaining a wide variety of experience. Personnel indicated that both investigations and inspections suffer from investing time and money into training people only to have them leave the specialty. The IG found that at the 11 sites it visited, two-thirds of accident inspectors and investigators did not meet the Coast Guard's own qualification standards. The IG stated that the shortage of qualified personnel would be further compounded by the new towing vessel safety regime, which would expand the inspection workload by about 50% (or an additional 5,700 vessels to inspect). In January 2015, the new Commandant, Paul Zukunft, indicated that human resource competencies would be one of his key focus areas. He referred to the need to grow "subject matter experts" for the marine safety workforce and overhaul the generalist-driven military personnel system in favor of a specialist workforce. Commandant Zukunft called for increasing proficiency through more specialization in both the officer and enlisted corps and to extend the time between job rotations. He noted the complexity of systems aboard vessels and new developments in using LNG as fuel, stating that the Coast Guard needed to know these technologies in order to lead the industry on safety rather than having to learn them from industry. In February 2015, Commandant Zukunft stated his priorities regarding the marine safety mission: I have directed the Vice Commandant to undertake a service-wide effort to revitalize our marine safety enterprise with particular focus on marine inspection and our regulatory framework.... We will increase the proficiency of our marine safety workforce, and we will continue to train new marine inspectorsâadding to the more than 500 that have entered our workforce since 2008.... We will review our civilian career management process to eliminate barriers and improve upward mobility. As noted above, the October 2015 sinking of the El Faro has renewed focus on the Coast Guard's marine inspection workforce, but, as in the past, the age of ships in the U.S.-flag fleet has been raised as a corollary safety issue. Regarding the El Faro , the Coast Guard testified in 2018: We looked a little further beyond this particular incident, caused us to look at other vessels in the fleet and did cause us concern about their condition.â¦ And the findings indicate that it is not unique to the El Faro . We have other ships out there that are in substandard condition.â¦ You know, some of our fleetâour fleet is almost three times older than the average fleet sailing around the world today. Just like your old car, those are the ones likely to breakdown. Those are the (inaudible) oneâthe ones that are more difficult to maintain and may not start when I go out, turn the key. Considerations in Realigning Marine Safety Functions As the above history indicates, the measure most often proposed to increase the competence of marine safety personnel is to shift this mission to a civilian workforce in a civilian subagency, either under the Coast Guard or somewhere else in the executive branch with complementary maritime functions. While such a shift could have the advantages stated, one cannot necessarily expect it, in and of itself, to solve the issue completely. Civilian agencies with inspection workforces covering technically demanding industries also have had difficulty retaining experienced staff. For instance, the Federal Aviation Administration has been criticized for increasing its reliance on private-sector inspectors paid by industry rather than enhancing its in-house inspection workforce. The rationale for this reliance on private-industry inspectors is that the pace of technological development in aviation has overwhelmed the capability of government inspectors. Similarly, the Department of Transportation's Pipeline and Hazardous Materials Safety Administration, which regulates pipeline safety, has found that experienced inspectors are often hired away as safety compliance officers by pipeline companies. The Department of the Interior has voiced much the same concern with respect to the offshore oil rig inspection workforce of the Bureau of Safety and Environmental Enforcement. Even under a civilian agency, vessel inspectors would be subject to recruitment by private industry, as experienced inspectors are sought by ship owners, banks that finance ships, and insurers, all of which want to ensure ships are built to, and are being maintained to, safety standards. Inspectors are employed by private ship classification societies for this purpose. Another consideration with respect to realigning the government's marine safety function is the benefit of housing maritime-related missions in a single agency. As commandants have argued, there are synergies among these missions. For example, the knowledge of and familiarity with vessels and crews that safety inspectors gain via their interactions with them provide risk intelligence relevant to the agency's security mission. Personnel involved in the often perilous mission of search and rescue directly benefit from a competent and effective safety inspection workforce that can reduce the number of such missions. The vessel safety inspection function has synergies with vessel environmental inspections related to oil pollution, ballast water, and emissions. The marine safety function is also complimentary to the Coast Guard's responsibility for deploying and maintaining channel marker buoys and lights and breaking ice in winter. Fisheries enforcement has synergies with fishing safety and security missions. All of these missions require special knowledge for operating on the water, and most require a fleet to do so. Thus, there are both human resource and capital equipment synergies among these missions. Notwithstanding these factors, one can also rationalize dismantling parts of the Coast Guard and reorganizing them under other agencies. The Coast Guard has a close relationship with the Navy, even in peacetime. In 1982, Members of Congress sponsored bills to transfer the agency to the Navy or the Department of Defense ( H.R. 4996 , H.R. 5567 ). These proposals were partly in response to the Reagan Administration's proposal to drastically reduce the size of the Coast Guard, replace the commandant with a civilian administrator, and transfer the Coast Guard's aids to navigation mission to the Army Corps of Engineers. During the partial government shutdown in January 2019, when Coast Guard personnel were the only military personnel not paid, calls for shifting the Coast Guard to the Navy or Department of Defense were renewed. While some supporters hope that transferring the Coast Guard to the military might boost the agency's budget, others have argued that the Coast Guard's nondefense-related missions would suffer, as these missions are not a priority for the military. It would appear that such a transfer might not assist the Coast Guard in addressing the issue of rotating staff in the marine safety program. In addition to realigning marine safety functions, Congress has discussed rearranging navigation-related functions in the federal government more broadly. Some Members of Congress, dissatisfied with the Army Corps of Engineers' performance in the provision of navigation channel infrastructure, have proposed transferring that function to the Department of Transportation. The Trump Administration also has proposed this transfer as part of a larger reorganization plan involving multiple agencies. Congress has requested a National Academy of Sciences study related to this idea. If such a transfer were to occur, navigation infrastructure functions could be combined with a marine safety inspection and accident investigation within the Department of Transportation. This combination of safety and infrastructure provision parallels the primary missions of the department with respect to other transportation modes. However, Congress has shown reluctance to eliminate any of the Coast Guard's missions. Both in 1967, when the Department of Transportation was created and the Coast Guard was transferred there from the Department of the Treasury, and in 2003 after the Department of Homeland Security was created, and the agency was transferred there from the Department of Transportation, the Coast Guard was transferred as a distinct entity. Summary:	null	96	48,691	48,693	48,693	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The U.S. Coast Guard is the agency charged by law with overseeing the safety of vessels and maritime operations. For at least four decades, Congress has been concerned about the Coast Guard's ability to maintain an adequate staff of experienced marine safety personnel with technical knowledge of vessel construction and accident investigation. Recent incidents, particularly the 2015 sinking of the U.S.-flag cargo ship El Faro with the loss of 33 lives during a hurricane near the Bahamas, have revived questions about the Coast Guard's persistent difficulty with hiring and training a marine safety workforce. The safety inspections of the vessel were found to have been inadequate. In the Hamm Alert Maritime Safety Act of 2018 ( P.L. 115-265 , Â§210), Congress directed the Coast Guard to brief congressional committees of jurisdiction on its efforts to enhance its marine inspections staff, the staff responsible for ensuring that vessels are meeting safety standards. In the Frank LoBiondo Coast Guard Authorization Act of 2018 ( P.L. 115-282 , Â§501) Congress requested a report from the Coast Guard detailing the courses and other training a marine inspector must complete to be considered qualified, including any courses that have been dropped from the training curriculum in recent years. This report examines the staffing challenges the Coast Guard faces in assuring marine safety at a time when its responsibilities in this area are increasing significantly. It also considers proposals to realign marine safety functions within the federal government. The Marine Safety Mission The Coast Guard engages in two distinct activities with respect to marine safety: Vessel inspection . The Coast Guard has a staff of 671 marine inspectorsâ533 military and 138 civilianâwho are responsible for inspecting U.S.-registered passenger and cargo vessels, foreign-flag vessels calling at U.S. ports, mobile offshore drilling units, and towing vessels and barges carrying hazardous cargoes. Foreign-flag vessels are those registered in jurisdictions other than the United States. Accident investigation. The Coast Guard employs 158 accident investigatorsâ120 military and 38 civilianâwho conduct casualty investigations of U.S.- and foreign-flag vessels to detect and correct safety hazards, prepare investigation reports, analyze trends, and recommend enforcement action. These two assignments fall under the Coast Guard's prevention policy workforce headed by the Assistant Commandant for Prevention Policy, a rear admiral. Reporting to the Assistant Commandant is the Director of Inspections and Compliance, a captain, who oversees the Office of Commercial Vessel Compliance and the Office of Investigations and Casualty Analysis, among other safety-related offices. The prevention policy workforce is especially critical for the commercial U.S.-flag fleet because a majority of this fleet is much older than the 15 to 20 years of age at which ships in the worldwide oceangoing fleet are typically scrapped. About 60% of the 217 ships in the dry-cargo U.S.-flag commercial fleet and 53% of U.S.-flag offshore supply vessels (which service oil rigs) are older than 20 years; the El Faro had been in service for 40 years. Some 72% of the 1,497 vessels in the U.S.-flag passenger and ferry fleet are over 20 years old. In general, older vessels require more frequent inspection; the National Transportation Safety Board (NTSB) raised questions about the quality of the Coast Guard's inspections in its investigation of the El Faro sinking, after which the Coast Guard revoked the safety certificate for another vessel of the same design and similar age, forcing its removal from service. Generally, inspections of vessels carrying passengers or hazardous cargo, and inspections of older vessels, are more frequent than inspections of general-cargo vessels and newer vessels. Vessels transporting cargo or passengers domestically (from one U.S. point to another U.S. point) must be U.S.-built, as required by the Jones Act. The cost of U.S.-built vessels, particularly deep-draft ships, can be multiples of world prices, which may retard vessel replacement. U.S.-flag vessels on international voyages need not be U.S.-built, and this fleet is younger than the Jones Act fleet. Congress's request for information about the Coast Guard's inspection staff comes at a time when the number of vessels requiring inspection is increasing by about 50% because towing vessels have been added to the list. Congress has been increasing the agency's role in fishing vessel safety as well, putting additional demands on the safety workforce. Adding to the Coast Guard's safety responsibilities is the construction of several liquefied natural gas (LNG) export terminals, whose siting, operations, and security are partly or entirely under Coast Guard jurisdiction, as well as the increasing use of LNG as ship fuel. Workforce Qualifications, Training, and Pay Scales According to the Coast Guard, the marine inspector workforce consists of commissioned officers, chief warrant officers (CWOs), and civilians. Officer marine inspectors enter the workforce through a variety of accession sources, including Officer Candidate School, the Direct Commission Officer program for U.S. Maritime Academy graduates, and the Coast Guard Academy. CWOs are divided into two specialties: Marine Safety Specialty Deck and Marine Safety Specialty Engineer. Those who meet the eligibility requirements to compete for CWO are selected through an accession panel. An emphasis is placed on past maritime and inspection experience when hiring civilian marine inspectors. Additionally, the Coast Guard hires and trains civilians who are inexperienced in inspections to become marine inspectors through its civilian marine inspector apprenticeship program. The normal entry is a marine inspector apprenticeship tour at a larger port (referred to as a feeder port). A feeder port is located near a unit that is better prepared and equipped to train inspectors. The civilian inspectors generally remain at a single location for their entire careers to provide continuity. Most officers complete one to three tours as a field-level marine inspector or marine investigator and do not rotate between tours ashore and afloat. Officers rotate approximately every three years and may be promoted to leadership positions in the marine safety organization. CWOs remain marine inspectors or marine investigators until retirement. On average, a CWO serving as a marine inspector works in this capacity for approximately 8.7 years. Inspector pay scales range from CWO2 to CWO4 (approximately $90,000 to $124,000); officers (O-1 to O-5, approximately $64,000 to $152,000). Civilian marine inspectors are typically classified at GS-12 ($64,000 to $84,000). The investigator workforce also comprises commissioned officers, CWOs, and civilians. It has the same path for entry as marine inspection. Many marine investigators have prior experience as inspectors, giving them familiarity with commercial shipping operations and regulations. However, this is not true in all cases, and some marine investigators become familiar with marine inspections through on-the-job training. The typical pay scale for investigators is CWO3 to CWO4 (approximately $106,000 to $124,000) and O-2 to O-4 (approximately $83,000 to $130,000). The Coast Guard has recognized the training of the inspection staff as an important concern. As Rear Admiral John Nadeau, then the Coast Guard's Assistant Commandant for Prevention Policy, testified at a January 2018 hearing about the El Faro casualty: [T]his is not strictly a capacity problem. There are elements to training. If you just gave me another 1,000 marine inspectors, it wouldn't solve this problem. This problem involves training. This problem involves getting the right information. This problem involves getting the right policy and procedures in place.... Entry-level marine inspections is not what I am talking about. I need to have a small corpsâit is not a lotâa small corps of people that can get out and are highly trained and proficient and stay focused on this area until we get it right. In a March 2019 hearing, Rear Admiral Nadeau testified that the agency was improving the quality of its safety inspection workforce: [T]he Coast Guard has prioritized marine inspector training, established new staff dedicated to performing third party oversight, increased opportunities for maritime graduates to join the Coast Guard, and prioritized the hiring of civilian marine inspectors.... The Coast Guard is actively developing a comprehensive training architecture for our marine inspectors. This architecture will provide cohesive strategy, policy, and performance support to ensure that Coast Guard marine inspectors are trained consistently from the basic to the advanced level in a manner that keeps pace with industry, technology, and related regulatory changes. Managing Marine Safety The Coast Guard repeatedly has made statements in recent decades laying out its plans to improve the quality of its inspection workforce. Often, these pronouncements have been in response to heightened congressional scrutiny of the agency's marine inspection program in the aftermath of a major marine casualty in which investigators found that subpar vessel inspections played a contributing role. This cycle was described by a retired Coast Guard senior official in 2015: [T]he Marine Safety program is a low profile mission within the Coast Guard's multi-mission portfolio. That is true until a confluence of factors markedly raises its visibility and causes great introspection. The program's purpose is to keep bad things from happening. Non-events are virtually impossible to measure. Marine Safety is normally not a major budget item of interest to the Service. The Coast Guard, especially in what has generally been a declining resource environment, will always have many pressing and competing budget needs. And if a major incident occurs, Congress is willing to throw the Service a lifesaver in the form of significant dollars. As employees of a military organization, Coast Guard personnel typically change mission assignments and/or locations every two or three years, so they do not develop the knowledge and experience required of a proficient marine inspector or investigator. As noted, the scope of the vessel types the Coast Guard inspects ranges from small passenger boats to oceangoing ships to mobile offshore drilling rigs. Geographic reassignments can change the category of vessels an individual inspector must evaluate. Vessel technology can be complex and is constantly changing, and the safety regulations are voluminous and technical. An internal Coast Guard study in 2012 revealed that "41% of marine inspectors were not confident interacting with maritime industry personnel concerning marine inspection issues." Even if personnel rotate back into marine inspection after a different assignment, they need time to regain proficiency. The Coast Guard recognizes the difficulty of building marine inspection and investigation proficiency among uniformed officers who rotate assignments frequently. Consequently, each Commandant's initiative or plan to revamp marine inspections has stated a goal of boosting the civilian inspector and investigator workforce and creating more attractive long-term career paths by extending promotion potential. However, a perception inside the agency that marine safety is an area that retards promotion could be thwarting efforts to boost the inspection workforce. This is asserted in a study by a career Coast Guard official who spent his last several years working in human resources for the agency: [T]he Coast Guard's internal manpower management processes are considered to be at odds with the need to build and maintain a competent marine safety officer corps â¦ The perception for decades is that it is difficult for marine safety officers to succeed in the Coast Guard's military officer promotion system. The Service endeavors to manage individual officer specialties, such as marine safety, while at the same time operate an "up or out" promotion system that is mandated by law.... officers who follow a marine safety career path consider themselves disadvantaged as they become more senior and face stiffer competition for promotion.... Currently, the perception of disadvantage continues. World War II Gives Coast Guard New Role The Coast Guard's challenges with marine inspection and investigation date to a government reorganization in preparation for World War II. A 1942 executive order transferred the civilian Bureau of Marine Inspection and Navigation (BMIN) from the Department of Commerce to the Coast Guard for the duration of the war and for six months after hostilities ended. After the war ended, President Truman proposed keeping the marine inspection function under the Coast Guard rather than transferring it back to the Department of Commerce. Proponents of this approach contended that the Coast Guard had performed the mission adequately during the U.S. involvement in the war and that synergies existed with other Coast Guard missions such as maritime search and rescue. Furthermore, they asserted, there was no need to create additional overhead and administrative expenses by establishing a separate bureau. The maritime industry argued against keeping marine inspections under the Coast Guard. A witness representing the American Petroleum Institute testified in 1947 that under the BMIN, almost all of the inspectors had been former merchant marine officers with 10 to 20 years of experience aboard ships who had practical knowledge of vessel safety vulnerabilities. The permanent assignment of marine inspections to the Coast Guard was part of a much larger government reorganization plan advanced by the Truman Administration that was to go into effect unless both houses passed a concurrent resolution of disapproval within a specified period. The House adopted such a resolution, but the Senate did not. Consequently, President Truman's plan became effective in 1946. In subsequent years, the Coast Guard's role remained a point of contention. In 1947, a representative of a ship captains' union testified that under the old regime, the men in the Bureau of Marine Inspection were the wearers of the purple cloth. Before men could become assistant local inspector and go up to the grade of local inspector and supervising inspector, and so forth, they had to be either a master mariner [ship captain], or a chief engineer â¦ with the result that the most mature, and most sensible and most experienced and most intelligent of our profession got into the service. It was very seldom that you found a local inspector under 35 years of age.... They were of mature judgement and they were one of the most respected organizations in the entire marine industry. The concern that the Coast Guard would be unable to replace the experience of the ex-BMIN inspectors as they retired persisted over the decades. In 1979, the General Accounting Office (GAO, known since 2004 as the Government Accountability Office) conducted an audit of the Coast Guard's marine inspection program after a series of tanker accidents in or near U.S. waters during the winter of 1976-1977 resulted in losses of life and property and environmental damage. Under the heading "Trained and Experienced Personnel Needed," the GAO report raised questions about the training of marine inspectors: Most of the inspectors in the three districts included in our review have had at least one tour of sea duty on Coast Guard cutters. Considering this sea experience, along with the on-the-job and formal training, it would seem that most inspectors would be highly qualified. However, we found that relatively few field unit inspectors could be considered as qualified hull or boiler inspectors. This has occurred because the Coast Guard has not established uniform criteria or procedures to determine whether inspectors are actually qualified and has not scheduled needed vessel inspection training in a timely manner. In addition, the rotation policy caused by the lack of a specialized job classification or career ladder contributes to the difficulty in achieving and maintaining expertise in marine inspection. The report note d that the Coast Guard Merchant Marine Safety Manual in effect at the time stated as a customarily accepted fact that it takes three years of experience to become a qualified marine inspector , adding that "every 2 to 3 years the Coast Guard rotates its staff among various duty stations such as search and rescue, buoy tenders, and high- and medium-endurance cutters , " and that " about the time personnel become proficient in one area, such as vessel inspection, they are transferred and assigned to another job." The GAO found that "few field inspectors had previous inspection duty or consecutive assignments at marine inspection offices" and the Coast Guard had been "unable to keep experienced and trained staff in the vessel inspection area." Some of the Coast Guard field officers interviewed by the GAO commented that inspectors needed to have additional expertise to gain the respect of the maritime industry, and that most inspectors were not knowledgeable enough to provide industry with a precise interpretation of marine rules and regulations. In response to the 1979 GAO report, the Coast Guard stated that while it would consider establishing an inspection specialty career classification for both officers and enlisted personnel and extend its inspection assignment tour, its existing job classification system was better suited to the multimission nature of the agency. The 1980s In October 1980, the U.S.-flag ship Poet , carrying a load of corn to Egypt, disappeared with no trace somewhere in the Atlantic. Its disappearance was believed to have coincided with a period of heavy weather; the structural integrity of the 36-year-old ship was suspected as a possible cause. The Coast Guard's Marine Board of Investigation found that the Coast Guard inspector conducting most of the ship's inspections during the year prior to the voyage had no previous experience inspecting commercial vessels, which heightened the Marine Board's concern that structural defects may have gone undetected. In February 1983, the Marine Electric , a 40-year-old Jones Act ship carrying coal from Norfolk, VA, to Massachusetts, sank in heavy weather, killing 31 crew members. Investigators concluded that the probable cause of the sinking was the poor condition of the cargo hatches and deck plating, which allowed waves to flood the hull. The Coast Guard's Marine Board of Investigation stated that the ship's Coast Guard inspectors lacked the experience to conduct safety examinations of a vessel the size, service, and configuration of the Marine Electric . The incompleteness of these inspections as to the dictates of regulations and policy was attributed to the lack of training and experience on the part of the Coast Guard inspectors.... the inexperience of the inspectors who went aboard the Marine Electric , and their failure to recognize the safety hazard imposed by the deteriorated, weakened and non-tight hatch covers, raises doubts about the capabilities of the Coast Guard inspectors to enforce the laws and regulations in a satisfactory manner. At a 1983 congressional hearing examining the marine casualty, a representative of a ship engineers' union noted that "Coast Guard officers with 12 weeks experience behind a desk are dealing with officers of the merchant marine who have spent 20 years at sea," and that "an inspector can't condemn a dangerous ship if he doesn't know what a dangerous ship is." This representative further stated that "while multi-mission flexibility and frequent rotation may be an optimal way to fulfill the Coast Guard's military readiness mission, it is a serious and even fatal distraction from the regulation of commercial industry." The witness urged Congress to transfer ship inspection responsibilities to an agency of civilian career professionals, similar to the Bureau of Marine Inspection and Navigation that existed before World War II. Some committee Members appeared receptive to this idea. The witness also raised the issue of whether the more fundamental problem was the age of the U.S. fleet: The problem of course is old ships. This means dangerous ships â¦ The Poet and the Marine Electric are trying to tell us something: If a ship isn't retired when it gets old, it will retire itself ... Although 40% of the U.S. fleet is at least 20 years old, 75% of the dozen worst U.S. marine tragedies in the past two decades struck these ships aged 20 or older. Twenty is the rounded number when industry experts say a ship should be junked. In conclusion, any analysis of the plight of maritime safety is misleading if it does not identify old ships as the core of the problem. The only way to uproot this evil is to mandate an aggressive attack by a dedicated and seasoned staff of professional inspectorsâa team that the Coast Guard could never field unless it ended its fundamental multi-missioned military structure. In 1985, following up on its 1979 audit, the GAO reported that the Coast Guard had recently completed a two-year project to develop a new marine safety training and qualification program. One change was establishment of uniform standardized on-the-job training and on-the-job qualification requirements. Another change was selection of three "training ports" where new inspectors would go for 18 months of intensive training before their initial assignment. The GAO stated that it was too early to assess whether these changes had addressed the qualification problems identified in its 1979 report. On March 24, 1989, the U.S.-flag tanker Exxon Valdez grounded on Bligh Reef after departing Valdez, AK, spilling about 11 million gallons of oil. The actions of the ship captain, who was found to be impaired by alcohol, and who had turned over operation of the vessel to a third mate before reaching open waters, was the focus of the marine casualty investigation. In response to the Exxon Valdez incident, among other things, Congress increased funding for Coast Guard safety personnel. According to one Coast Guard senior official, the "War on Drugs" in the mid-1980s had shifted resources from the agency's safety mission to its drug interdiction mission. The 1990s In the 1990s, the quality of Coast Guard inspections came under scrutiny again as the result of two fatal passenger vessel incidents. On December 5, 1993, the wooden vessel El Toro II , a fishing charter party vessel built in 1961 and carrying 23 people, began sinking in the Chesapeake Bay when water seeped through the hull's planks. There were three fatalities. The Coast Guard's Marine Board of Investigation found that the Coast Guard inspector's knowledge of wooden boat structure was lacking, and that inspection staff were not cognizant of previous inspection reports that would have prompted concern about the vessel's seaworthiness, given the owner's poor track record in making needed repairs to the 32-year-old vessel. The second incident occurred on a lake near Hot Springs, AR, in May 1999. The Miss Majestic , an amphibious "duckboat" built during World War II to transport troops and supplies, which had since been converted into a tour boat, began taking on water and sank in less than 30 seconds, drowning 13 of its 20 passengers. The Coast Guard's Marine Board of Investigation found that the Coast Guard inspector had not noticed that a critical part was missing from the rear shaft that was the main source of the leak. It determined that the inspector lacked awareness of the importance of this vessel's design components. The board also found that the local Coast Guard office was not keeping adequate inspection records, which would have shown that the vessel's owner had not installed safety equipment that previous inspectors had called for. The NTSB concluded that the Coast Guard's inspections of the vessel were "inadequate and cursory" and that the "lack of Coast Guard guidance and training for the inspection of [this vessel design] contributed to the inadequate inspections of the Miss Majestic ." Moreover, the NTSB found that Coast Guard inspectors over the preceding five years had missed deficiencies with the vessel that might have been obvious even to an untrained observer, such as pinholes in the hull of the vessel caused by corrosion and an improper repair using a rubber patch to conceal a large, wasted area of the hull. These marine casualties in the 1990s prompted the Coast Guard and Congress to examine the marine safety mission of the agency once again. In December 1995, the Coast Guard conducted an internal study of its accident investigation activity. One of the recommendations of the internal report was "To improve the overall quality of the information derived from investigations, an investigations career path should be developed. This would enable the Coast Guard to raise the overall level of expertise in investigations." In 1996, the GAO reviewed whether the Coast Guard had fully utilized additional funding Congress provided the agency in the early 1990s to add 875 positions to its Marine Safety Program. At a 1997 congressional hearing, a representative of the passenger vessel industry noted that vessel inspection "responsibilities fill hundreds of pages of regulations and thousands of pages of referenced consensus standards and rules." The industry representative was "concerned that the problems in the commercial vessel safety program will grow because of a resulting lack of training and experience on the part of many Coast Guard inspectors." The 2000s Following the terrorist attacks of September 11, 2001, Congress greatly increased the Coast Guard's resources directed toward maritime security matters. The maritime industry's reaction to the Coast Guard's new security responsibilities came to light at a 2007 congressional hearing. Some industry witnesses at the hearing contended that since the Coast Guard had been transferred from the Department of Transportation to the newly created Department of Homeland Security (DHS) in 2002, the agency was more focused on security matters than on safety. One industry witness asserted that the industry's relationship with Coast Guard inspectors had changed from being partners with a mutual interest in safety to being viewed as a security risk. The purpose of the 2007 hearing was to examine a proposal by the chairman of the House Transportation and Infrastructure Committee to transfer the Coast Guard's marine safety inspection function to a civilian agencyâin other words, to undo the World War II-era reorganization. The chairman argued that "What we need is what we have in the [Federal Aviation Administration], skilled personnel who have years of seasoning, who aren't shifted year after year from one post to another with only three years on staff." At the hearing, a witness representing ship captains described how marine inspection was performed in other countries: In foreign countries outside the United States, you go to the Netherlands or Germany or Norway, that is a civilian force that comes on. They are all retired masters or chief engineers, and they become the inspection service for that country. When they go aboard a ship, they are interfacing with chief engineers and masters that have a shared experience. There is a great deal of respect for the inspectors, and the inspectors have a great deal of respect for the officers on the ship. It is an effective system. You have expertise. You have competence, and you have motivation. They obviously love the maritime industry because that is their choice. It is not something they have been assigned to as part of their tour of duty and attaining a generalized background in the Coast Guard. I think that is the way to go. When a fellow retires after a career at sea and he is 45, 50 years old, he might not be looking for a future career advancement as Coast Guard officer. You make him a civilian inspector, and he would fill the same role that they fill in Germany and most maritime countries. Most maritime countries do not have a uniform Coast Guard acting as the maritime inspection service. They use maritime professionals from the industry to fill that role. When they send a petty officer down to represent the United States' interest in enforcing international conventions on foreign flag ships as a port state control officer, the foreign masters, the Germans and the British, take offense that the Coast Guard hasn't sent an officer down or a civilian personnel with a maritime background. At the hearing, the Commandant of the Coast Guard explained the dilemma facing the agency regarding its inspection staff: Here is the quandary we are faced with. Sooner or later, as you get promoted in the Coast Guard, you become a commanding officer. If you get selected for flag, you become a district commander and maybe even a Commandant. When you get to there, you become a general. You are representing the entire organization. We have an issue of needing specialists, subject matter experts, but at some point we need to generalize these folks and give them other experiences if they are going to be promotable and move up to become executives in the organization. In corporate America, for example, if you are a vice president, everybody needs to understand corporate finance. What we have developed inside the Coast Guard is the notion of what we call a broadened specialist. What we need to look at is maintaining the subject matter expertise that is critical to mission execution and then how we can broaden these people at a later date and still make them promotable. They want to be able to move up in the organization as well. At the 2007 hearing, the Commandant urged the ex-chairman of the Transportation and Infrastructure Committee to defer his proposal until the Coast Guard had a chance to rectify the problem, which the chairman agreed to do. The Commandant outlined the actions he was taking to improve the inspection workforce: In the last year, I have directed significant changes and improvements in the training and qualifications of our inspectors to keep pace with the technological advancements and growth in maritime industry. We have made changes to our warrant officer selection system to bring more talented and experienced enlisted personnel into the maritime safety specialty. We have learned valuable lessons from joint military and civilian staffing of our sector command centers and our vessel traffic services. These are areas where we used to have Coast Guard personnel only staffing. We now have brought civilian personnel in to provide continuity, corporate memory and way to bridge during the transfer season, so we get the best of training for our people in uniform by maintaining continuity of services. I am committed to the establishment of more civilian positions in the marine inspection field. We need people with critical job skills. We need to maintain continuity while providing our military members access to this type of experience. We must leverage and expand this dual staffing model. Getting the inspection program right in terms of training, qualifications and staffing is my highest maritime safety priority. The Commandant also argued that marine safety and security were two sides of the same coin; they were not mutually exclusive missions but synergistic to the Coast Guard's other maritime missions. The Commandant's first step was an internal study of the issue by a retired Commandant. This internal study acknowledged that the agency's practice of regularly rotating staff geographically or by activity, as military organizations typically do, hindered its ability to develop a cadre of staff with sufficient technical expertise in marine safety. The report noted the following: "If the inspector is constantly referring to the regulations when conducting an inspection, the customer doesn't have much confidence in the quality of the Coast Guard inspection. I understand that the Coast Guard has sent unqualified personnel or marginally qualified personnel to conduct inspections and investigations." The report also stated that "the DHS has no responsibility for transportation safety so getting them to embrace the Marine Safety program could be a heavy lift." In response to this problem, the agency revamped its safety program and Congress appropriated additional funds specifically for safety personnel. The FY2009 Coast Guard budget request noted that "the Coast Guard is encountering serious stakeholder concern about our capacity to conduct marine inspections, investigations, and rulemaking." Under the revamped safety program, the Coast Guard created additional civilian safety positions, converted military positions into civilian ones, and developed a long-term career path for civilian safety inspectors and investigators. A 2008 audit by the DHS Inspector General (IG) confirmed that Coast Guard stated that the problems identified with respect to its safety program workforce also existed among vessel accident investigators. The IG found that accident investigations were hindered by unqualified personnel and recommended hiring more civilians for this activity. The IG also found that the Coast Guard had lowered the qualification standard for accident investigators in August 2007 by removing the requirement that an investigator have experience as a hull or machinery and small passenger vessel inspector. Since vessel casualties commonly involve structural deficiencies in the hull or loss of propulsion, this experience is considered important for an accident investigator. The IG noted that in the United Kingdom, Australia, and Canada, accident investigators are required to be former ship captains or chief engineers with several years of experience. The IG report noted issues with rotating assignments and promotion potential in the marine safety area: A tour in the Prevention Directorate could mean yearly rotations across specialty areas, such as waterways management and drug and alcohol testing. Given the lack of a career path and the unpredictable nature of investigation assignments, potential Coast Guard candidates also may not want to become investigators. Hull and Machinery Inspectors told us that promotion to the position of marine casualty investigator would not advance their careers. Additionally, according to Coast Guard personnel, tour of duty rotations hinder investigators in acquiring the experience needed for career development. The agency's uniformed investigators generally are not in their positions for more than a single, three-year tour of duty in the same location. The forced rotations preclude the investigators from acquiring the extensive knowledge of local waterways and industries that experienced casualty investigators have told us is needed to be an effective investigator. In contrast, civilian marine casualty investigators are not subject to the three year tour of duty rotation standard. Over time, they can gain a greater knowledge of specialties such as local waterways and industries or experience in enforcing maritime regulations to enhance their qualifications. Of the 22 marine casualty investigators that we reviewed, one was a civilian. A 2009 study by the Homeland Security Institute, a federally funded research center established by Congress in the Homeland Security Act of 2002 (Â§312) to assist DHS in addressing policy issues, reiterated the same theme regarding frequent rotations of uniformed staff hindering proficiency in marine inspection and investigation. The study's recommendations were to increase tour lengths as well as require back-to-back tours in these areas and to rely more on civilians for these functions. The study found that the Coast Guard's workforce database was not able to indicate years of service or level of expertise for marine safety personnel. The study found that the Coast Guard had no central office responsible for overall management of the marine safety workforce and therefore there were no agency-wide specific standards for determining qualifications in this area. Lacking documentation, the study's authors relied heavily on interviews with hundreds of Coast Guard personnel and private industry to gather data on the marine safety workforce. Recent Developments On April 20, 2010, the mobile offshore drilling unit Deepwater Horizon , 45 miles off the coast of Louisiana, experienced a catastrophic blowout, causing a major explosion and fire, and resulting in its sinking. There were 11 deaths and an oil spill estimated at approximately 206 million gallons, the largest in U.S. history. The Department of the Interior's Minerals Management Service had responsibility for inspection of the drilling apparatus that was the cause of the explosion, but the Coast Guard was responsible for the safety inspection of the rig above water that has commonality with vessels in general (firefighting and lifesaving equipment, evacuation procedures, electrical systems). The ensuing investigation revealed that Coast Guard regulations of offshore structures dated to 1978 and had not been updated as rigs moved farther and farther offshore. For instance, in places where they are not attached to the seabed because of the tremendous depth, these rigs use dynamic positioning systems (propeller systems) to remain in place, but at the time of the accident the Coast Guard had not developed regulations for checking the safety aspects of these critical systems. In response to the Deepwater Horizon marine casualty, Congress required the Coast Guard to take several initiatives to improve the quality of its marine inspection workforce in the Coast Guard Authorization Act of 2010 ( P.L. 111-281 ). Under the subtitle "Workforce Expertise" (Â§Â§521-526), these initiatives included improving career path management, adding apprenticeships to the program, measuring workforce quality and quantity, adding a marine industry training program and a marine safety curriculum at the Coast Guard Academy, and preparing a report on recruiting and retaining civilian marine inspectors and investigators. A June 2011 audit by the DHS IG of vessel inspections in the offshore oil and gas industry (involving rigs and vessels that support operation of the rigs) found a positive result for the marine inspection program in this sector. The IG found that 99% of those inspections had been performed by Coast Guard inspectors who had been fully qualified. However, the IG found that the Coast Guard's guidance on how to inspect these vessels and how to record the results of these inspections was deficient. A May 2013 audit by the DHS Inspector General found that the agency's efforts had not improved its marine accident reporting system, due to familiar issues surrounding the qualifications and rotation of the personnel: The USCG [United States Coast Guard] does not have adequate processes to investigate, take corrective actions, and enforce Federal regulations related to the reporting of marine accidents. These conditions exist because the USCG has not developed and retained sufficient personnel, established a complete process with dedicated resources to address corrective actions, and provided adequate training to personnel on enforcement of marine accident reporting. As a result, the USCG may be delayed in identifying the causes of accidents; initiating corrective actions; and providing the findings and lessons learned to mariners, the public, and other government entities. These conditions may also delay the development of new standards, which could prevent future accidents. [T]he Director of Prevention Policy [the marine safety program] provides personnel with career management guidance that suggests they should leave this specialty to improve their promotion potential, because of the USCG's emphasis on personnel attaining a wide variety of experience. Personnel indicated that both investigations and inspections suffer from investing time and money into training people only to have them leave the specialty. The IG found that at the 11 sites it visited, two-thirds of accident inspectors and investigators did not meet the Coast Guard's own qualification standards. The IG stated that the shortage of qualified personnel would be further compounded by the new towing vessel safety regime, which would expand the inspection workload by about 50% (or an additional 5,700 vessels to inspect). In January 2015, the new Commandant, Paul Zukunft, indicated that human resource competencies would be one of his key focus areas. He referred to the need to grow "subject matter experts" for the marine safety workforce and overhaul the generalist-driven military personnel system in favor of a specialist workforce. Commandant Zukunft called for increasing proficiency through more specialization in both the officer and enlisted corps and to extend the time between job rotations. He noted the complexity of systems aboard vessels and new developments in using LNG as fuel, stating that the Coast Guard needed to know these technologies in order to lead the industry on safety rather than having to learn them from industry. In February 2015, Commandant Zukunft stated his priorities regarding the marine safety mission: I have directed the Vice Commandant to undertake a service-wide effort to revitalize our marine safety enterprise with particular focus on marine inspection and our regulatory framework.... We will increase the proficiency of our marine safety workforce, and we will continue to train new marine inspectorsâadding to the more than 500 that have entered our workforce since 2008.... We will review our civilian career management process to eliminate barriers and improve upward mobility. As noted above, the October 2015 sinking of the El Faro has renewed focus on the Coast Guard's marine inspection workforce, but, as in the past, the age of ships in the U.S.-flag fleet has been raised as a corollary safety issue. Regarding the El Faro , the Coast Guard testified in 2018: We looked a little further beyond this particular incident, caused us to look at other vessels in the fleet and did cause us concern about their condition.â¦ And the findings indicate that it is not unique to the El Faro . We have other ships out there that are in substandard condition.â¦ You know, some of our fleetâour fleet is almost three times older than the average fleet sailing around the world today. Just like your old car, those are the ones likely to breakdown. Those are the (inaudible) oneâthe ones that are more difficult to maintain and may not start when I go out, turn the key. Considerations in Realigning Marine Safety Functions As the above history indicates, the measure most often proposed to increase the competence of marine safety personnel is to shift this mission to a civilian workforce in a civilian subagency, either under the Coast Guard or somewhere else in the executive branch with complementary maritime functions. While such a shift could have the advantages stated, one cannot necessarily expect it, in and of itself, to solve the issue completely. Civilian agencies with inspection workforces covering technically demanding industries also have had difficulty retaining experienced staff. For instance, the Federal Aviation Administration has been criticized for increasing its reliance on private-sector inspectors paid by industry rather than enhancing its in-house inspection workforce. The rationale for this reliance on private-industry inspectors is that the pace of technological development in aviation has overwhelmed the capability of government inspectors. Similarly, the Department of Transportation's Pipeline and Hazardous Materials Safety Administration, which regulates pipeline safety, has found that experienced inspectors are often hired away as safety compliance officers by pipeline companies. The Department of the Interior has voiced much the same concern with respect to the offshore oil rig inspection workforce of the Bureau of Safety and Environmental Enforcement. Even under a civilian agency, vessel inspectors would be subject to recruitment by private industry, as experienced inspectors are sought by ship owners, banks that finance ships, and insurers, all of which want to ensure ships are built to, and are being maintained to, safety standards. Inspectors are employed by private ship classification societies for this purpose. Another consideration with respect to realigning the government's marine safety function is the benefit of housing maritime-related missions in a single agency. As commandants have argued, there are synergies among these missions. For example, the knowledge of and familiarity with vessels and crews that safety inspectors gain via their interactions with them provide risk intelligence relevant to the agency's security mission. Personnel involved in the often perilous mission of search and rescue directly benefit from a competent and effective safety inspection workforce that can reduce the number of such missions. The vessel safety inspection function has synergies with vessel environmental inspections related to oil pollution, ballast water, and emissions. The marine safety function is also complimentary to the Coast Guard's responsibility for deploying and maintaining channel marker buoys and lights and breaking ice in winter. Fisheries enforcement has synergies with fishing safety and security missions. All of these missions require special knowledge for operating on the water, and most require a fleet to do so. Thus, there are both human resource and capital equipment synergies among these missions. Notwithstanding these factors, one can also rationalize dismantling parts of the Coast Guard and reorganizing them under other agencies. The Coast Guard has a close relationship with the Navy, even in peacetime. In 1982, Members of Congress sponsored bills to transfer the agency to the Navy or the Department of Defense ( H.R. 4996 , H.R. 5567 ). These proposals were partly in response to the Reagan Administration's proposal to drastically reduce the size of the Coast Guard, replace the commandant with a civilian administrator, and transfer the Coast Guard's aids to navigation mission to the Army Corps of Engineers. During the partial government shutdown in January 2019, when Coast Guard personnel were the only military personnel not paid, calls for shifting the Coast Guard to the Navy or Department of Defense were renewed. While some supporters hope that transferring the Coast Guard to the military might boost the agency's budget, others have argued that the Coast Guard's nondefense-related missions would suffer, as these missions are not a priority for the military. It would appear that such a transfer might not assist the Coast Guard in addressing the issue of rotating staff in the marine safety program. In addition to realigning marine safety functions, Congress has discussed rearranging navigation-related functions in the federal government more broadly. Some Members of Congress, dissatisfied with the Army Corps of Engineers' performance in the provision of navigation channel infrastructure, have proposed transferring that function to the Department of Transportation. The Trump Administration also has proposed this transfer as part of a larger reorganization plan involving multiple agencies. Congress has requested a National Academy of Sciences study related to this idea. If such a transfer were to occur, navigation infrastructure functions could be combined with a marine safety inspection and accident investigation within the Department of Transportation. This combination of safety and infrastructure provision parallels the primary missions of the department with respect to other transportation modes. However, Congress has shown reluctance to eliminate any of the Coast Guard's missions. Both in 1967, when the Department of Transportation was created and the Coast Guard was transferred there from the Department of the Treasury, and in 2003 after the Department of Homeland Security was created, and the agency was transferred there from the Department of Transportation, the Coast Guard was transferred as a distinct entity.	Summary:	gov_report	1,024	null	84
crs_R45793	crs_R45793_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The detection of certain per- and polyfluoroalkyl substances (PFAS) in some public water supplies has generated public concern and increased congressional attention to the U.S. Environmental Protection Agency's (EPA) efforts to address these substances. Over the past decade, EPA has been evaluating several PFAS under the Safe Drinking Water Act (SDWA) to determine whether national drinking water regulations may be warranted. EPA has not issued SDWA regulations for any PFAS but has taken various actions to address PFAS contamination. Using SDWA authorities, in 2016, EPA issued non-enforceable health advisories for two PFASâperfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS)âin drinking water. The 116 th Congress has held hearings on PFAS and passed legislation to address PFAS contamination issues through various authorities and departments and agencies. The National Defense Authorization Act (NDAA) for Fiscal Year 2020 ( P.L. 116-92 ) includes several PFAS provisions involving the Department of Defense (DOD) and other federal agencies. Of the EPA provisions related to drinking water, Title LXXIII, Subtitle A, directs EPA to require public water systems to conduct additional monitoring for PFAS and establishes a grant program for public water systems to address PFAS and other emerging contaminants. On January 10, 2020, the House passed H.R. 535 , a broad PFAS bill that would direct EPA and other federal agencies to take numerous actions to address PFAS. Among its provisions, H.R. 535 would amend SDWA to direct EPA to regulate PFAS in drinking water and would authorize grants for communities for treatment technologies. Other bills would variously direct EPA to take regulatory and other actions under several environmental statutes, including SDWA. Similar to H.R. 535 , multiple SDWA bills would require EPA to establish final or interim drinking water regulations for some or all PFAS, require monitoring for more of these substances, or authorize grants to assist communities in treating PFAS in drinking water. (See Table 1 .) PFAS are a large, diverse group of fluorinated compounds, some of which have been used for decades in a wide array of commercial, industrial, and U.S. military applications. Since the 1940s, more than 1,200 PFAS compounds have been used in commerce, and about 600 are still in use today. The chemical characteristics of PFAS have led to the widespread use of these substances for beneficial purposes (such as firefighting) and in the processing and manufacture of many commercial products, such as nonstick cookware, food wrapper coatings, stain-resistant carpets, waterproof clothing, and food containers. The two PFAS most frequently detected in water supplies are PFOA and PFOS. Since 2002, U.S. manufacturers have phased out the production and most uses of PFOS. In coordination with EPA, manufacturers completed the phase-out of PFOA production by 2015. EPA reports that food and consumer products represent a large portion of exposure to PFOA and PFOS, while drinking water can be an additional source in the small percentage of communities with contaminated water supplies. Among the thousands of different PFAS, few have sufficient health effects studies for determining a threshold at which adverse effects are not expected to occur. Most studies of potential health effects of PFAS have focused on PFOA and PFOS because of their predominant historical use. For those PFAS for which scientific information is available, animal studies suggest that exposure to particular substances above certain levels may be linked to various health effects, including developmental effects; changes in liver, immune, and thyroid function; and increased risk of some cancers. A discussion of these studies and their results is beyond the scope of this report. In 2016, EPA reported that public water systems in 29 states had detected at least one PFAS in their water supplies. In total, 63 public water systems serving approximately 5.5 million people reported detections of PFOA and PFOS (separately or combined) above EPA's health advisory level of 70 parts per trillion (ppt). EPA has reported that PFAS contamination of drinking water "is typically localized and associated with a specific facility." According to the Agency for Toxic Substances and Disease Registry, PFAS may have been released to surface or ground water from manufacturing sites, industrial use, use and disposal of PFAS-containing consumer products (e.g., unlined landfills), fire/crash training areas, wastewater treatment facilities, and the spreading of contaminated biosolids. A discussion of PFAS use, including at U.S. military installations, and PFAS disposal is not included in this report. Uncertainty about potential health effects that may be associated with exposure to specific PFAS above particular concentrationsâcombined with the absence of a federal health-based drinking water standardâhas posed challenges and created uncertainty for states, water suppliers and their customers, homeowners using private wells, and others regarding treatment or other potential responses. State drinking water regulators and others have called for greater federal leadership to address these substances through several federal laws and, specifically, have urged EPA to set federal drinking water standards for one or more PFAS under SDWA. Representatives of public water systems have supported EPA's commitment to follow the statutory process for regulating contaminants in drinking water, which prioritizes regulating those that occur at levels and frequency of public health concern. SDWA provides EPA with several authorities to address emerging contaminants in public water supplies and drinking water sources. These include the authority to (1) issue health advisories, (2) regulate contaminants in water provided by public water systems, and (3) issue enforcement orders in certain circumstances. For more than a decade, EPA has been using SDWA authorities to evaluate several PFASâparticularly PFOA and PFOSâto determine whether national drinking water regulations may be warranted. To date, EPA has not promulgated drinking water regulations for any PFAS but has taken a number of related actions. In February 2019, EPA issued a PFAS Action Plan, which identifies and discusses the agency's current and proposed efforts to address PFAS through several statutory authorities, including SDWA. These actions range from potential regulatory actions to public outreach on PFAS. Many of these actions support EPA's evaluation of PFAS for potential regulation under SDWA. These include research and development of analytical methods needed to accurately measure substances in drinking water, development of additional toxicity information to increase understanding of potential health risks associated with exposures to different PFAS, and research on drinking water treatment effectiveness and costs for various PFAS. EPA also plans to generate occurrence data for more PFAS to determine their frequencies and concentrations in public water supplies. Further, EPA is working with federal, state, and tribal partners to develop risk communication materials on PFAS and plans to develop an interactive map on potential PFAS sources and occurrence. Table A-1 includes EPA's selected actions and associated timelines relevant to addressing PFAS in drinking water. The challenges of regulating individual substances or categories of PFAS in drinking water are multifaceted and may raise several policy and scientific questions. Technical issues involve availability of data, detection methods, and treatment techniques for related but diverse contaminants. Scientific questions exist about health effects attributed to many individual PFAS and whether health effects can be generalized from one or a category of PFAS to others. Policy and regulatory considerations may involve setting priorities among numerous unregulated contaminants, the value of establishing uniform national drinking water standards, and the ability to demonstrate the relative risk-reduction benefits compared to compliance costs to communities associated with regulating individual or multiple PFAS. The absence of a federal health-based standard can pose challenges for states and communities with PFAS contamination. State drinking water regulators have noted that many states may face significant obstacles in setting their own standards. This report provides an overview of EPA's ongoing and proposed actions to address PFAS under SDWA authorities, with particular focus on the statutory process for evaluating PFASâparticularly PFOA and PFOSâfor potential regulation. It also reviews PFAS-related legislation introduced in the 116 th Congress, with emphasis on bills that would amend SDWA. This report does not address the status of scientific research on health effects that may be associated with exposure to one or more PFAS, nor does it discuss federal actions regarding other environmental statutes, such as the Toxic Substances Control Act (TSCA) and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Addressing PFAS Using SDWA Authorities SDWA provides EPA with several authorities to address emerging contaminants in drinking water supplies and sources. The act authorizes EPA to promulgate regulations that include enforceable standards and monitoring requirements for contaminants in water provided by public water systems. For contaminants that are not regulated under the act, SDWA authorizes EPA to issue contaminant-specific health advisories that include technical guidance and identify concentrations that are expected to be protective of sensitive populations. In addition, if the appropriate state and local authorities have not acted to protect public health, SDWA authorizes EPA to take actions to abate an imminent and substantial endangerment to public health from "a contaminant that is present in or is likely to enter a public water system or an underground source of drinking water." Evaluating Emerging Contaminants for Regulation SDWA specifies a multistep process for evaluating contaminants to determine whether a national primary drinking water regulation is warranted. The evaluation process includes identifying contaminants of potential concern, assessing health risks, collecting occurrence data (and developing reliable analytical methods necessary to do so), and making determinations as to whether or not regulatory action is needed for a contaminant. To make a positive determination that a national drinking water regulation is warranted for a contaminant, EPA must find that a contaminant may have an adverse health effect; it is known to occur or there is a substantial likelihood that it will occur in public water systems with a frequency and at levels of public health concern; and in the sole judgment of the EPA Administrator, regulation of the contaminant presents a meaningful opportunity for health risk reduction for persons served by water systems. Identifying Contaminants That May Warrant Regulation SDWA Section 1412(b) requires EPA to publish, every five years, a list of contaminants that are known or anticipated to occur in public water systems and may require regulation under the act. Before publishing a final contaminant candidate list (CCL), EPA is required to provide an opportunity for public comment and consult with the scientific community, including the Science Advisory Board. In 2009, EPA placed PFOA and PFOS on the third such list (CCL 3) for evaluation. In preparing the CCL 3, EPA considered over 7,500 chemical and microbial contaminants and screened these contaminants based on their potential to occur in public water systems and potential health effects. EPA selected 116 of the contaminants on the proposed CCL based on more detailed evaluation of occurrence, health effects, expert judgement, and public input. In 2016, EPA published the fourth list, CCL 4, which carried over many CCL 3 contaminants, including PFOA and PFOS. EPA carried forward these contaminants to continue evaluating health effects, gathering national occurrence data, and developing analytical methods. Monitoring for Emerging Contaminants in Public Water Systems To generate data on the nationwide occurrence of emerging contaminants in public water supplies, EPA is required to administer a monitoring program for unregulated contaminants. SDWA directs EPA to promulgate, every five years, an unregulated contaminant monitoring rule (UCMR) that requires public water systems to test for no more than 30 contaminants. Only a representative sample of systems serving 10,000 or fewer people is required to conduct monitoring. EPA uses data collected through UCMRs to estimate whether the occurrence of the contaminant in public water supplies is local, regional, or national in scope. UCMRs set a minimum reporting level (MRL) for each contaminant. MRLs are not health based; rather, they establish concentrations for reporting and data collection purposes. EPA makes the UCMR monitoring results available to the public and reports the number of detections above the MRL and also detections above EPA's health-based reference levels (discussed below), where available. The act includes an authorization of appropriations to cover monitoring and related costs for small systems (serving 10,000 persons or fewer). However, large systems pay UCMR monitoring and laboratory costs. In 2012, EPA issued the third UCMR (UCMR 3), under which 4,864 public water systems tested their drinking water for six PFASâincluding PFOA and PFOSâbetween January 2013 and December 2015. Among these systems, EPA reported the following monitoring results for PFOA and PFOS: 117 of the public water systems reported detections of PFOA at levels above the MRL of 20 ppt, and 95 reported detections of PFOS at concentrations above the MRL of 40 ppt. Overall, 63 of the 4,864 (1.3%) water systems that conducted PFAS monitoring reported at least one sample with PFOA and/or PFOS (separately or combined) concentrations exceeding EPA's health advisory level of 70 ppt for PFOA and PFOS. Actual exposures among individuals served by these systems would be expected to vary depending on water use and consumption. EPA estimates that these 63 water systems serve approximately 5.5 million individuals. Of the 63 systems: 9 reported detections of both PFOS and PFOA above 70 ppt; 4 reported detections of PFOA above 70 ppt; 37 reported detections of PFOS above 70 ppt; and 13 reported detections of PFOA and PFOS (combined but not separately) above 70 ppt. Systems with PFOA or PFOS detections above 70 ppt were located in 21 states, the Pima-Maricopa Indian community, and 2 U.S. territories. EPA's PFAS Action Plan notes that the agency intends to propose monitoring requirements for other PFAS when it proposes the next UCMR (UCMR 5) in 2020. As of January 2020, EPA has developed an analytical method to detect 29 PFAS in drinking water supplies. The plan states that the agency would use the monitoring data gathered through UCMR 5 to evaluate the national occurrence of additional PFAS. The agency is currently working to develop analytical methods to support monitoring for additional PFAS. Regulatory Determinations SDWA requires EPA, every five years, to make a regulatory determinationâa determination of whether or not to promulgate a national primary drinking water regulationâfor at least five contaminants on the CCL. To consider a contaminant for a regulatory determination (RD), EPA requires, at a minimum, a peer-reviewed risk assessment and nationally representative occurrence data. In selecting contaminants for an RD, SDWA requires EPA to give priority to those that present the greatest public health concern while considering a contaminant's health effects on specified subgroups of the population (e.g., infants, children, pregnant women) who may be at greater risk of adverse health effects due to exposure to a contaminant. As noted above, to make a positive determination to regulate a contaminant, EPA must find that (1) a contaminant may have an adverse health effect; (2) it is known to occur or there is a substantial likelihood that it will occur in public water systems with a frequency and at levels of public health concern; and (3) in the sole judgment of the EPA Administrator, regulation of the contaminant presents a meaningful opportunity for health risk reduction for persons served by water systems. SDWA directs EPA to publish a preliminary determination and seek public comment prior to making an RD. EPA may also make RDs for contaminants not listed on the CCL if EPA finds that the statutory criteria regarding health effects and occurrence are satisfied. EPA has issued RDs for CCL 1 through CCL 3. EPA published final determinations that no regulatory action was appropriate or necessary for nine contaminants on CCL 1 (2003) and 11 contaminants (including perchlorate) on CCL 2 (2008). In the most recent RD (2016), EPA determined that regulation was not needed for four of the 116 contaminants listed on CCL 3. EPA delayed a determination on a fifth contaminant, strontium, "in order to consider additional data and decide whether there is a meaningful opportunity for health risk reduction by regulating strontium in drinking water." In 2014, when EPA published preliminary RDs for contaminants on CCL 3 (including PFOA and PFOS), UCMR 3 monitoring was underway and national occurrence data were not available. EPA did not include any PFAS among the contaminants selected for the third RD. In November 2016, EPA included PFOA and PFOS on the agency's list of unregulated contaminants for which sufficient health effect and occurrence data were available to make RDs. The next round of RDs is scheduled for 2021, although SDWA does not prevent EPA from making determinations outside of that five-year cycle. In the Fall 2019 Unified Regulatory Agenda , EPA expected to propose preliminary determinations for two PFASâPFOA and PFOSâby the end of 2019, followed by final determinations by January 2021. Developing Regulations and Standards for Emerging Contaminants Once the Administrator makes a determination to regulate a contaminant, SDWA allows EPA 24 months to propose a "national primary drinking water regulation" and request public comment. EPA is required to promulgate a final rule within 18 months after the proposal. SDWA authorizes EPA to extend the deadline to publish a final rule for up to nine months, by notice in the Federal Register . For each contaminant that EPA determines to regulate, EPA is required to establish a non-enforceable maximum contaminant level goal (MCLG) at a level at which no known or anticipated adverse health effects occur and which allows an adequate margin of safety. An MCLG is based solely on health effects data and does not reflect cost or technical feasibility considerations. EPA derives an MCLG based on an estimate of the amount of a contaminant that a person can be exposed to on a daily basis that is not anticipated to cause adverse health effects over a lifetime. This amount is derived using the best available peer-reviewed studies and incorporates uncertainty factors to provide a margin of protection for sensitive subpopulations. In developing an MCLG, EPA also estimates the general population's exposure to a contaminant from drinking water and other sources (e.g., food, dust, soil, and air). After considering other exposure routes, EPA estimates the proportion of exposure attributable to drinking water (i.e., the relative source contribution). When exposure information is not available, EPA uses a default assumption that 20% of exposure to a contaminant is attributable to drinking water. EPA applies the relative source contribution to ensure that an individual's total exposure from all sources remains within the estimated protective level. The MCLG provides the basis for calculating a drinking water standard. Thus, EPA's ability to develop a drinking water regulation for a contaminant is dependent, in part, on the availability of peer-reviewed scientific studies. Drinking water regulations generally specify a maximum contaminant level (MCL)âan enforceable limit for a contaminant in public water supplies. SDWA requires EPA to set the MCL as close to the MCLG as feasible. When assessing feasibility, the law directs EPA to consider the best available (and field-demonstrated) treatment technologies, taking cost into consideration. If the treatment of a contaminant is not feasibleâtechnologically or economicallyâEPA may establish a treatment technique in lieu of an MCL. Each regulation also establishes associated monitoring, treatment, and reporting requirements. These regulations can cover multiple contaminants and, generally, establish an MCL for each contaminant covered by the regulation. Regulations generally take effect three years after promulgation. EPA may allow up to two additional years if the Administrator determines that more time is needed for public water systems to make capital improvements. (States have the same authority for individual water systems. ) The law directs EPA to reviewâand if necessary reviseâeach regulation every six years and requires that any revision maintain or provide greater health protection. Health Advisories For emerging contaminants of concern, data may be limited, particularly regarding a contaminant's potential health effects and occurrence in public water supplies. SDWA authorizes EPA to issue health advisories for contaminants in drinking water that are not regulated under the act. These advisories provide information on a contaminant's health effects, chemical properties, occurrence, and exposure. They also provide technical guidance on identifying, measuring, and treating contaminants. Health advisories include non-enforceable levels for concentrations of contaminants in drinking water. EPA sets health advisories at levels that are expected to protect the most sensitive subpopulations (e.g., nursing infants) from any deleterious health effects, with a margin of protection, over specific exposure durations (e.g., one-day, 10-day, or lifetime). These non-regulatory levels are intended to help states, water suppliers, and others address contaminants for which federal (or state) drinking water standards have not been established. Some states may use health advisories to inform their own state-specific drinking water regulations. Health advisories may be used to address various circumstances: to provide interim guidance while EPA evaluates a contaminant for possible regulation, to provide information for contaminants with limited or localized occurrence that may not warrant regulation, and to address short-term incidents or spills. EPA has issued health advisories for more than 200 contaminants to address different circumstances and subsequently established regulations for many of these contaminants. In May 2016, EPA issued health advisory levels for lifetime exposure to PFOA and PFOS in drinking water. EPA established the Lifetime Health Advisory level for PFOA and PFOS at 70 ppt, separately or combined. In calculating the health advisory level, EPA applied a relative source contribution of 20% (i.e., an assumption that 20% of PFOS and/or PFOA exposure is attributable to drinking water and 80% is from diet, dust, air or other sources). These levels are intended to protect the most sensitive subpopulations (e.g., nursing infants), with a margin of safety, over a lifetime of daily exposure. The Lifetime Health Advisories replaced Provisional Health Advisories that EPA issued in 2009 to address short-term exposures to PFOA and PFOS. Emergency Powers Orders SDWA Section 1431 grants EPA "emergency powers" to issue orders to abate an imminent and substantial endangerment to public health from "a contaminant that is present in or is likely to enter a public water system or an underground source of drinking water" and if the appropriate state and local authorities have not acted to protect public health. This authority is available to address both regulated and unregulated contaminants. The EPA Administrator "may take such actions as he may deem necessary" to protect the health of persons who may be affected. Actions may include issuing orders requiring persons who caused or contributed to the endangerment to provide alternative water supplies or to treat contamination. When using this authority, EPA generally coordinates closely with states. EPA reports that it has used its emergency powers under Section 1431 to require responses to PFOA and/or PFOS releases and related contamination of drinking water supplies at four sites, three of which involved the Department of Defense (DOD). Warminster Naval Warfare Center, Pennsylvania. In 2014, EPA issued an administrative enforcement order directing the U.S. Navy to address PFOS in three drinking water supply wells at and near this National Priorities List site. Former Pease Air Force Base, New Hampshire. In August 2015, EPA issued an administrative enforcement order to require the U.S. Air Force to design and construct a system to treat water systems contaminated from releases of PFOA and PFOS at the former Pease Air Force Base in New Hampshire. Horsham Air Guard Station/Willow Grove, Pennsylvania . In 2015, EPA issued an order directing the Air Guard/Air Force to treat onsite drinking water wells and to provide treatment for private offsite wells. Chemours Washington Works Facility , West Virginia/Ohio. EPA issued three emergency orders to this facility in 2002, 2006, and 2009âand amended the 2009 order in 2017 to incorporate the 2016 Lifetime Health Advisory levelârequiring DuPont and Chemours to offer water treatment, connection to a public water system, or bottled water where PFOA concentrations exceeded 70 ppt. Related Legislation in the 116th Congress In the 116 th Congress, more than 40 bills have been introduced to address PFAS through a broad range of actions and federal agencies. The NDAA for FY2020 (P.L 116-92) and House-passed H.R. 535 include provisions to reduce exposures to PFAS in drinking water and to prevent or remediate the contamination of groundwater, surface water, and drinking water supplies from releases of these substances. This discussion focuses primarily on legislation that amends the Safe Drinking Water Act (SDWA) or otherwise affect public water systems. Table 1 briefly describes relevant provisions of such bills offered in the 116 th Congress. In the context of SDWA, congressional attention has focused primarily on whether EPA might set drinking water standards (MCLs) for PFOA, PFOS, and/or other PFAS. SDWA directs EPA to follow a regulatory development process for contaminants, which includes consideration of technical feasibility and the assessment of health risk reduction benefits and costs, among other factors. On occasion, Congress has directed EPA to promulgate a regulation for a particular contaminant within a specified time frame. Congress has used this approach to prompt EPA to regulate certain contaminants already under review and/or to specify a deadline for issuing regulations under development. In the case of PFAS, representatives of public water systems and others have cautioned against bypassing SDWA's science-based and risk-driven process. As regulatory compliance costs are borne by communities, public water suppliers have urged that regulations be data-driven to better ensure risk reduction benefits. Others have urged "federal leadership" to provide more certainty to states and communities with contaminated water supplies. State drinking water regulators have noted that some states may lack the resources to assess and/or the authority to regulate drinking water contaminants that are not federally regulated, including PFAS. As with certain other contaminants, some states have urged EPA to set national standards. A further concern is that state-by-state actions could create public confusion regarding the safety of drinking water. National Defense Authorization Act Enacted December 20, 2019, the NDAA for FY2020 ( P.L. 116-92 ) contain PFAS provisions specific to DOD, EPA, and several other federal agencies. Some NDAA provisions involve the use of aqueous film forming foam, while others address DOD remediation of PFAS-contaminated drinking water, groundwater, and surface water. Among the EPA provisions, the NDAA addresses drinking water as follows: Section 7311 requires EPA to add to UCMR 5 all PFAS or categories of PFAS with validated test methods. Section 7312 amends SDWA to establish a grant program within the Drinking Water State Revolving Fund to assist water systems in addressing emerging contaminants with an emphasis on PFAS. Section 7312 authorizes appropriations of $100 million annually for FY2020-FY2024 for this purpose. House-Passed H.R. 535 On January 10, 2020, the House passed H.R. 535 , a broad PFAS bill. H.R. 535 contains a range of provisions that would address PFAS using multiple authorities, including several EPA-administered laws. Regarding drinking water, the bill includes several specific provisions, some of which would amend SDWA: Section 5 would amend SDWA to require EPA, within two years of enactment, to promulgate a national primary drinking water regulation for PFAS with standards for PFOA and PFOS at a minimum. It would establish a separate regulatory process for PFAS to accelerate EPA's promulgation of drinking water standards. Among other provisions, this section would require EPA to propose a regulation for a PFAS within 18 months (rather than 24 months) of making a determination to regulate it. This section would allow EPA, when developing regulations, to rely on health risk information for one PFAS to make reasoned extrapolations regarding the health risks of other PFAS. It would also direct EPA to issue a health advisory within a year of finalizing a toxicity value for a single PFAS or class of PFAS. Section 6 would prohibit EPA (but not states) from imposing penalties for violations of PFAS drinking water regulations until five years after the date of promulgation (to allow systems time to make capital improvements as needed for compliance). Section 7 would add SDWA Section 1459E to direct EPA to establish a competitive grant program to assist community water systems with installing treatment technologies to address PFAS contamination. To support this program, Section 7 would authorize annual appropriations of $125 million for FY2020 and FY2021 and $100 million for FY2022-FY2024. EPA would be required to give funding priority to community water systems that (1) serve a "disadvantaged community or a disproportionately exposed community," (2) provide at-least a 10% cost share, or (3) demonstrate the capacity to maintain the treatment technology. Other bills introduced in the 116 th Congress would variously require EPA to establish an MCL for specific PFAS or for PFAS as a group. These include S. 1507 (as reported), S. 1473 , and H.R. 2377 . Additionally, S. 1507 and H.R. 2800 would require public water systems to conduct monitoring for more PFAS in drinking water. Several billsâincluding S. 1507 , H.R. 2533 / H.R. 2741 (Title II), and H.R. 1417 / S. 611 âwould authorize grants for public water systems and/or households to treat PFAS in drinking water. In contrast, H.R. 2570 would direct EPA to establish PFAS manufacturing fees to support the "PFAS Treatment Trust Fund." Amounts in the trust fund would be available to EPA, without further appropriation, to make grants to community water systems and municipal wastewater treatment works for costs associated with PFAS removal. Appendix. Selected Drinking-Water-Related Actions by EPA Summary:	null	96	32,042	32,044	32,044	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The detection of certain per- and polyfluoroalkyl substances (PFAS) in some public water supplies has generated public concern and increased congressional attention to the U.S. Environmental Protection Agency's (EPA) efforts to address these substances. Over the past decade, EPA has been evaluating several PFAS under the Safe Drinking Water Act (SDWA) to determine whether national drinking water regulations may be warranted. EPA has not issued SDWA regulations for any PFAS but has taken various actions to address PFAS contamination. Using SDWA authorities, in 2016, EPA issued non-enforceable health advisories for two PFASâperfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS)âin drinking water. The 116 th Congress has held hearings on PFAS and passed legislation to address PFAS contamination issues through various authorities and departments and agencies. The National Defense Authorization Act (NDAA) for Fiscal Year 2020 ( P.L. 116-92 ) includes several PFAS provisions involving the Department of Defense (DOD) and other federal agencies. Of the EPA provisions related to drinking water, Title LXXIII, Subtitle A, directs EPA to require public water systems to conduct additional monitoring for PFAS and establishes a grant program for public water systems to address PFAS and other emerging contaminants. On January 10, 2020, the House passed H.R. 535 , a broad PFAS bill that would direct EPA and other federal agencies to take numerous actions to address PFAS. Among its provisions, H.R. 535 would amend SDWA to direct EPA to regulate PFAS in drinking water and would authorize grants for communities for treatment technologies. Other bills would variously direct EPA to take regulatory and other actions under several environmental statutes, including SDWA. Similar to H.R. 535 , multiple SDWA bills would require EPA to establish final or interim drinking water regulations for some or all PFAS, require monitoring for more of these substances, or authorize grants to assist communities in treating PFAS in drinking water. (See Table 1 .) PFAS are a large, diverse group of fluorinated compounds, some of which have been used for decades in a wide array of commercial, industrial, and U.S. military applications. Since the 1940s, more than 1,200 PFAS compounds have been used in commerce, and about 600 are still in use today. The chemical characteristics of PFAS have led to the widespread use of these substances for beneficial purposes (such as firefighting) and in the processing and manufacture of many commercial products, such as nonstick cookware, food wrapper coatings, stain-resistant carpets, waterproof clothing, and food containers. The two PFAS most frequently detected in water supplies are PFOA and PFOS. Since 2002, U.S. manufacturers have phased out the production and most uses of PFOS. In coordination with EPA, manufacturers completed the phase-out of PFOA production by 2015. EPA reports that food and consumer products represent a large portion of exposure to PFOA and PFOS, while drinking water can be an additional source in the small percentage of communities with contaminated water supplies. Among the thousands of different PFAS, few have sufficient health effects studies for determining a threshold at which adverse effects are not expected to occur. Most studies of potential health effects of PFAS have focused on PFOA and PFOS because of their predominant historical use. For those PFAS for which scientific information is available, animal studies suggest that exposure to particular substances above certain levels may be linked to various health effects, including developmental effects; changes in liver, immune, and thyroid function; and increased risk of some cancers. A discussion of these studies and their results is beyond the scope of this report. In 2016, EPA reported that public water systems in 29 states had detected at least one PFAS in their water supplies. In total, 63 public water systems serving approximately 5.5 million people reported detections of PFOA and PFOS (separately or combined) above EPA's health advisory level of 70 parts per trillion (ppt). EPA has reported that PFAS contamination of drinking water "is typically localized and associated with a specific facility." According to the Agency for Toxic Substances and Disease Registry, PFAS may have been released to surface or ground water from manufacturing sites, industrial use, use and disposal of PFAS-containing consumer products (e.g., unlined landfills), fire/crash training areas, wastewater treatment facilities, and the spreading of contaminated biosolids. A discussion of PFAS use, including at U.S. military installations, and PFAS disposal is not included in this report. Uncertainty about potential health effects that may be associated with exposure to specific PFAS above particular concentrationsâcombined with the absence of a federal health-based drinking water standardâhas posed challenges and created uncertainty for states, water suppliers and their customers, homeowners using private wells, and others regarding treatment or other potential responses. State drinking water regulators and others have called for greater federal leadership to address these substances through several federal laws and, specifically, have urged EPA to set federal drinking water standards for one or more PFAS under SDWA. Representatives of public water systems have supported EPA's commitment to follow the statutory process for regulating contaminants in drinking water, which prioritizes regulating those that occur at levels and frequency of public health concern. SDWA provides EPA with several authorities to address emerging contaminants in public water supplies and drinking water sources. These include the authority to (1) issue health advisories, (2) regulate contaminants in water provided by public water systems, and (3) issue enforcement orders in certain circumstances. For more than a decade, EPA has been using SDWA authorities to evaluate several PFASâparticularly PFOA and PFOSâto determine whether national drinking water regulations may be warranted. To date, EPA has not promulgated drinking water regulations for any PFAS but has taken a number of related actions. In February 2019, EPA issued a PFAS Action Plan, which identifies and discusses the agency's current and proposed efforts to address PFAS through several statutory authorities, including SDWA. These actions range from potential regulatory actions to public outreach on PFAS. Many of these actions support EPA's evaluation of PFAS for potential regulation under SDWA. These include research and development of analytical methods needed to accurately measure substances in drinking water, development of additional toxicity information to increase understanding of potential health risks associated with exposures to different PFAS, and research on drinking water treatment effectiveness and costs for various PFAS. EPA also plans to generate occurrence data for more PFAS to determine their frequencies and concentrations in public water supplies. Further, EPA is working with federal, state, and tribal partners to develop risk communication materials on PFAS and plans to develop an interactive map on potential PFAS sources and occurrence. Table A-1 includes EPA's selected actions and associated timelines relevant to addressing PFAS in drinking water. The challenges of regulating individual substances or categories of PFAS in drinking water are multifaceted and may raise several policy and scientific questions. Technical issues involve availability of data, detection methods, and treatment techniques for related but diverse contaminants. Scientific questions exist about health effects attributed to many individual PFAS and whether health effects can be generalized from one or a category of PFAS to others. Policy and regulatory considerations may involve setting priorities among numerous unregulated contaminants, the value of establishing uniform national drinking water standards, and the ability to demonstrate the relative risk-reduction benefits compared to compliance costs to communities associated with regulating individual or multiple PFAS. The absence of a federal health-based standard can pose challenges for states and communities with PFAS contamination. State drinking water regulators have noted that many states may face significant obstacles in setting their own standards. This report provides an overview of EPA's ongoing and proposed actions to address PFAS under SDWA authorities, with particular focus on the statutory process for evaluating PFASâparticularly PFOA and PFOSâfor potential regulation. It also reviews PFAS-related legislation introduced in the 116 th Congress, with emphasis on bills that would amend SDWA. This report does not address the status of scientific research on health effects that may be associated with exposure to one or more PFAS, nor does it discuss federal actions regarding other environmental statutes, such as the Toxic Substances Control Act (TSCA) and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Addressing PFAS Using SDWA Authorities SDWA provides EPA with several authorities to address emerging contaminants in drinking water supplies and sources. The act authorizes EPA to promulgate regulations that include enforceable standards and monitoring requirements for contaminants in water provided by public water systems. For contaminants that are not regulated under the act, SDWA authorizes EPA to issue contaminant-specific health advisories that include technical guidance and identify concentrations that are expected to be protective of sensitive populations. In addition, if the appropriate state and local authorities have not acted to protect public health, SDWA authorizes EPA to take actions to abate an imminent and substantial endangerment to public health from "a contaminant that is present in or is likely to enter a public water system or an underground source of drinking water." Evaluating Emerging Contaminants for Regulation SDWA specifies a multistep process for evaluating contaminants to determine whether a national primary drinking water regulation is warranted. The evaluation process includes identifying contaminants of potential concern, assessing health risks, collecting occurrence data (and developing reliable analytical methods necessary to do so), and making determinations as to whether or not regulatory action is needed for a contaminant. To make a positive determination that a national drinking water regulation is warranted for a contaminant, EPA must find that a contaminant may have an adverse health effect; it is known to occur or there is a substantial likelihood that it will occur in public water systems with a frequency and at levels of public health concern; and in the sole judgment of the EPA Administrator, regulation of the contaminant presents a meaningful opportunity for health risk reduction for persons served by water systems. Identifying Contaminants That May Warrant Regulation SDWA Section 1412(b) requires EPA to publish, every five years, a list of contaminants that are known or anticipated to occur in public water systems and may require regulation under the act. Before publishing a final contaminant candidate list (CCL), EPA is required to provide an opportunity for public comment and consult with the scientific community, including the Science Advisory Board. In 2009, EPA placed PFOA and PFOS on the third such list (CCL 3) for evaluation. In preparing the CCL 3, EPA considered over 7,500 chemical and microbial contaminants and screened these contaminants based on their potential to occur in public water systems and potential health effects. EPA selected 116 of the contaminants on the proposed CCL based on more detailed evaluation of occurrence, health effects, expert judgement, and public input. In 2016, EPA published the fourth list, CCL 4, which carried over many CCL 3 contaminants, including PFOA and PFOS. EPA carried forward these contaminants to continue evaluating health effects, gathering national occurrence data, and developing analytical methods. Monitoring for Emerging Contaminants in Public Water Systems To generate data on the nationwide occurrence of emerging contaminants in public water supplies, EPA is required to administer a monitoring program for unregulated contaminants. SDWA directs EPA to promulgate, every five years, an unregulated contaminant monitoring rule (UCMR) that requires public water systems to test for no more than 30 contaminants. Only a representative sample of systems serving 10,000 or fewer people is required to conduct monitoring. EPA uses data collected through UCMRs to estimate whether the occurrence of the contaminant in public water supplies is local, regional, or national in scope. UCMRs set a minimum reporting level (MRL) for each contaminant. MRLs are not health based; rather, they establish concentrations for reporting and data collection purposes. EPA makes the UCMR monitoring results available to the public and reports the number of detections above the MRL and also detections above EPA's health-based reference levels (discussed below), where available. The act includes an authorization of appropriations to cover monitoring and related costs for small systems (serving 10,000 persons or fewer). However, large systems pay UCMR monitoring and laboratory costs. In 2012, EPA issued the third UCMR (UCMR 3), under which 4,864 public water systems tested their drinking water for six PFASâincluding PFOA and PFOSâbetween January 2013 and December 2015. Among these systems, EPA reported the following monitoring results for PFOA and PFOS: 117 of the public water systems reported detections of PFOA at levels above the MRL of 20 ppt, and 95 reported detections of PFOS at concentrations above the MRL of 40 ppt. Overall, 63 of the 4,864 (1.3%) water systems that conducted PFAS monitoring reported at least one sample with PFOA and/or PFOS (separately or combined) concentrations exceeding EPA's health advisory level of 70 ppt for PFOA and PFOS. Actual exposures among individuals served by these systems would be expected to vary depending on water use and consumption. EPA estimates that these 63 water systems serve approximately 5.5 million individuals. Of the 63 systems: 9 reported detections of both PFOS and PFOA above 70 ppt; 4 reported detections of PFOA above 70 ppt; 37 reported detections of PFOS above 70 ppt; and 13 reported detections of PFOA and PFOS (combined but not separately) above 70 ppt. Systems with PFOA or PFOS detections above 70 ppt were located in 21 states, the Pima-Maricopa Indian community, and 2 U.S. territories. EPA's PFAS Action Plan notes that the agency intends to propose monitoring requirements for other PFAS when it proposes the next UCMR (UCMR 5) in 2020. As of January 2020, EPA has developed an analytical method to detect 29 PFAS in drinking water supplies. The plan states that the agency would use the monitoring data gathered through UCMR 5 to evaluate the national occurrence of additional PFAS. The agency is currently working to develop analytical methods to support monitoring for additional PFAS. Regulatory Determinations SDWA requires EPA, every five years, to make a regulatory determinationâa determination of whether or not to promulgate a national primary drinking water regulationâfor at least five contaminants on the CCL. To consider a contaminant for a regulatory determination (RD), EPA requires, at a minimum, a peer-reviewed risk assessment and nationally representative occurrence data. In selecting contaminants for an RD, SDWA requires EPA to give priority to those that present the greatest public health concern while considering a contaminant's health effects on specified subgroups of the population (e.g., infants, children, pregnant women) who may be at greater risk of adverse health effects due to exposure to a contaminant. As noted above, to make a positive determination to regulate a contaminant, EPA must find that (1) a contaminant may have an adverse health effect; (2) it is known to occur or there is a substantial likelihood that it will occur in public water systems with a frequency and at levels of public health concern; and (3) in the sole judgment of the EPA Administrator, regulation of the contaminant presents a meaningful opportunity for health risk reduction for persons served by water systems. SDWA directs EPA to publish a preliminary determination and seek public comment prior to making an RD. EPA may also make RDs for contaminants not listed on the CCL if EPA finds that the statutory criteria regarding health effects and occurrence are satisfied. EPA has issued RDs for CCL 1 through CCL 3. EPA published final determinations that no regulatory action was appropriate or necessary for nine contaminants on CCL 1 (2003) and 11 contaminants (including perchlorate) on CCL 2 (2008). In the most recent RD (2016), EPA determined that regulation was not needed for four of the 116 contaminants listed on CCL 3. EPA delayed a determination on a fifth contaminant, strontium, "in order to consider additional data and decide whether there is a meaningful opportunity for health risk reduction by regulating strontium in drinking water." In 2014, when EPA published preliminary RDs for contaminants on CCL 3 (including PFOA and PFOS), UCMR 3 monitoring was underway and national occurrence data were not available. EPA did not include any PFAS among the contaminants selected for the third RD. In November 2016, EPA included PFOA and PFOS on the agency's list of unregulated contaminants for which sufficient health effect and occurrence data were available to make RDs. The next round of RDs is scheduled for 2021, although SDWA does not prevent EPA from making determinations outside of that five-year cycle. In the Fall 2019 Unified Regulatory Agenda , EPA expected to propose preliminary determinations for two PFASâPFOA and PFOSâby the end of 2019, followed by final determinations by January 2021. Developing Regulations and Standards for Emerging Contaminants Once the Administrator makes a determination to regulate a contaminant, SDWA allows EPA 24 months to propose a "national primary drinking water regulation" and request public comment. EPA is required to promulgate a final rule within 18 months after the proposal. SDWA authorizes EPA to extend the deadline to publish a final rule for up to nine months, by notice in the Federal Register . For each contaminant that EPA determines to regulate, EPA is required to establish a non-enforceable maximum contaminant level goal (MCLG) at a level at which no known or anticipated adverse health effects occur and which allows an adequate margin of safety. An MCLG is based solely on health effects data and does not reflect cost or technical feasibility considerations. EPA derives an MCLG based on an estimate of the amount of a contaminant that a person can be exposed to on a daily basis that is not anticipated to cause adverse health effects over a lifetime. This amount is derived using the best available peer-reviewed studies and incorporates uncertainty factors to provide a margin of protection for sensitive subpopulations. In developing an MCLG, EPA also estimates the general population's exposure to a contaminant from drinking water and other sources (e.g., food, dust, soil, and air). After considering other exposure routes, EPA estimates the proportion of exposure attributable to drinking water (i.e., the relative source contribution). When exposure information is not available, EPA uses a default assumption that 20% of exposure to a contaminant is attributable to drinking water. EPA applies the relative source contribution to ensure that an individual's total exposure from all sources remains within the estimated protective level. The MCLG provides the basis for calculating a drinking water standard. Thus, EPA's ability to develop a drinking water regulation for a contaminant is dependent, in part, on the availability of peer-reviewed scientific studies. Drinking water regulations generally specify a maximum contaminant level (MCL)âan enforceable limit for a contaminant in public water supplies. SDWA requires EPA to set the MCL as close to the MCLG as feasible. When assessing feasibility, the law directs EPA to consider the best available (and field-demonstrated) treatment technologies, taking cost into consideration. If the treatment of a contaminant is not feasibleâtechnologically or economicallyâEPA may establish a treatment technique in lieu of an MCL. Each regulation also establishes associated monitoring, treatment, and reporting requirements. These regulations can cover multiple contaminants and, generally, establish an MCL for each contaminant covered by the regulation. Regulations generally take effect three years after promulgation. EPA may allow up to two additional years if the Administrator determines that more time is needed for public water systems to make capital improvements. (States have the same authority for individual water systems. ) The law directs EPA to reviewâand if necessary reviseâeach regulation every six years and requires that any revision maintain or provide greater health protection. Health Advisories For emerging contaminants of concern, data may be limited, particularly regarding a contaminant's potential health effects and occurrence in public water supplies. SDWA authorizes EPA to issue health advisories for contaminants in drinking water that are not regulated under the act. These advisories provide information on a contaminant's health effects, chemical properties, occurrence, and exposure. They also provide technical guidance on identifying, measuring, and treating contaminants. Health advisories include non-enforceable levels for concentrations of contaminants in drinking water. EPA sets health advisories at levels that are expected to protect the most sensitive subpopulations (e.g., nursing infants) from any deleterious health effects, with a margin of protection, over specific exposure durations (e.g., one-day, 10-day, or lifetime). These non-regulatory levels are intended to help states, water suppliers, and others address contaminants for which federal (or state) drinking water standards have not been established. Some states may use health advisories to inform their own state-specific drinking water regulations. Health advisories may be used to address various circumstances: to provide interim guidance while EPA evaluates a contaminant for possible regulation, to provide information for contaminants with limited or localized occurrence that may not warrant regulation, and to address short-term incidents or spills. EPA has issued health advisories for more than 200 contaminants to address different circumstances and subsequently established regulations for many of these contaminants. In May 2016, EPA issued health advisory levels for lifetime exposure to PFOA and PFOS in drinking water. EPA established the Lifetime Health Advisory level for PFOA and PFOS at 70 ppt, separately or combined. In calculating the health advisory level, EPA applied a relative source contribution of 20% (i.e., an assumption that 20% of PFOS and/or PFOA exposure is attributable to drinking water and 80% is from diet, dust, air or other sources). These levels are intended to protect the most sensitive subpopulations (e.g., nursing infants), with a margin of safety, over a lifetime of daily exposure. The Lifetime Health Advisories replaced Provisional Health Advisories that EPA issued in 2009 to address short-term exposures to PFOA and PFOS. Emergency Powers Orders SDWA Section 1431 grants EPA "emergency powers" to issue orders to abate an imminent and substantial endangerment to public health from "a contaminant that is present in or is likely to enter a public water system or an underground source of drinking water" and if the appropriate state and local authorities have not acted to protect public health. This authority is available to address both regulated and unregulated contaminants. The EPA Administrator "may take such actions as he may deem necessary" to protect the health of persons who may be affected. Actions may include issuing orders requiring persons who caused or contributed to the endangerment to provide alternative water supplies or to treat contamination. When using this authority, EPA generally coordinates closely with states. EPA reports that it has used its emergency powers under Section 1431 to require responses to PFOA and/or PFOS releases and related contamination of drinking water supplies at four sites, three of which involved the Department of Defense (DOD). Warminster Naval Warfare Center, Pennsylvania. In 2014, EPA issued an administrative enforcement order directing the U.S. Navy to address PFOS in three drinking water supply wells at and near this National Priorities List site. Former Pease Air Force Base, New Hampshire. In August 2015, EPA issued an administrative enforcement order to require the U.S. Air Force to design and construct a system to treat water systems contaminated from releases of PFOA and PFOS at the former Pease Air Force Base in New Hampshire. Horsham Air Guard Station/Willow Grove, Pennsylvania . In 2015, EPA issued an order directing the Air Guard/Air Force to treat onsite drinking water wells and to provide treatment for private offsite wells. Chemours Washington Works Facility , West Virginia/Ohio. EPA issued three emergency orders to this facility in 2002, 2006, and 2009âand amended the 2009 order in 2017 to incorporate the 2016 Lifetime Health Advisory levelârequiring DuPont and Chemours to offer water treatment, connection to a public water system, or bottled water where PFOA concentrations exceeded 70 ppt. Related Legislation in the 116th Congress In the 116 th Congress, more than 40 bills have been introduced to address PFAS through a broad range of actions and federal agencies. The NDAA for FY2020 (P.L 116-92) and House-passed H.R. 535 include provisions to reduce exposures to PFAS in drinking water and to prevent or remediate the contamination of groundwater, surface water, and drinking water supplies from releases of these substances. This discussion focuses primarily on legislation that amends the Safe Drinking Water Act (SDWA) or otherwise affect public water systems. Table 1 briefly describes relevant provisions of such bills offered in the 116 th Congress. In the context of SDWA, congressional attention has focused primarily on whether EPA might set drinking water standards (MCLs) for PFOA, PFOS, and/or other PFAS. SDWA directs EPA to follow a regulatory development process for contaminants, which includes consideration of technical feasibility and the assessment of health risk reduction benefits and costs, among other factors. On occasion, Congress has directed EPA to promulgate a regulation for a particular contaminant within a specified time frame. Congress has used this approach to prompt EPA to regulate certain contaminants already under review and/or to specify a deadline for issuing regulations under development. In the case of PFAS, representatives of public water systems and others have cautioned against bypassing SDWA's science-based and risk-driven process. As regulatory compliance costs are borne by communities, public water suppliers have urged that regulations be data-driven to better ensure risk reduction benefits. Others have urged "federal leadership" to provide more certainty to states and communities with contaminated water supplies. State drinking water regulators have noted that some states may lack the resources to assess and/or the authority to regulate drinking water contaminants that are not federally regulated, including PFAS. As with certain other contaminants, some states have urged EPA to set national standards. A further concern is that state-by-state actions could create public confusion regarding the safety of drinking water. National Defense Authorization Act Enacted December 20, 2019, the NDAA for FY2020 ( P.L. 116-92 ) contain PFAS provisions specific to DOD, EPA, and several other federal agencies. Some NDAA provisions involve the use of aqueous film forming foam, while others address DOD remediation of PFAS-contaminated drinking water, groundwater, and surface water. Among the EPA provisions, the NDAA addresses drinking water as follows: Section 7311 requires EPA to add to UCMR 5 all PFAS or categories of PFAS with validated test methods. Section 7312 amends SDWA to establish a grant program within the Drinking Water State Revolving Fund to assist water systems in addressing emerging contaminants with an emphasis on PFAS. Section 7312 authorizes appropriations of $100 million annually for FY2020-FY2024 for this purpose. House-Passed H.R. 535 On January 10, 2020, the House passed H.R. 535 , a broad PFAS bill. H.R. 535 contains a range of provisions that would address PFAS using multiple authorities, including several EPA-administered laws. Regarding drinking water, the bill includes several specific provisions, some of which would amend SDWA: Section 5 would amend SDWA to require EPA, within two years of enactment, to promulgate a national primary drinking water regulation for PFAS with standards for PFOA and PFOS at a minimum. It would establish a separate regulatory process for PFAS to accelerate EPA's promulgation of drinking water standards. Among other provisions, this section would require EPA to propose a regulation for a PFAS within 18 months (rather than 24 months) of making a determination to regulate it. This section would allow EPA, when developing regulations, to rely on health risk information for one PFAS to make reasoned extrapolations regarding the health risks of other PFAS. It would also direct EPA to issue a health advisory within a year of finalizing a toxicity value for a single PFAS or class of PFAS. Section 6 would prohibit EPA (but not states) from imposing penalties for violations of PFAS drinking water regulations until five years after the date of promulgation (to allow systems time to make capital improvements as needed for compliance). Section 7 would add SDWA Section 1459E to direct EPA to establish a competitive grant program to assist community water systems with installing treatment technologies to address PFAS contamination. To support this program, Section 7 would authorize annual appropriations of $125 million for FY2020 and FY2021 and $100 million for FY2022-FY2024. EPA would be required to give funding priority to community water systems that (1) serve a "disadvantaged community or a disproportionately exposed community," (2) provide at-least a 10% cost share, or (3) demonstrate the capacity to maintain the treatment technology. Other bills introduced in the 116 th Congress would variously require EPA to establish an MCL for specific PFAS or for PFAS as a group. These include S. 1507 (as reported), S. 1473 , and H.R. 2377 . Additionally, S. 1507 and H.R. 2800 would require public water systems to conduct monitoring for more PFAS in drinking water. Several billsâincluding S. 1507 , H.R. 2533 / H.R. 2741 (Title II), and H.R. 1417 / S. 611 âwould authorize grants for public water systems and/or households to treat PFAS in drinking water. In contrast, H.R. 2570 would direct EPA to establish PFAS manufacturing fees to support the "PFAS Treatment Trust Fund." Amounts in the trust fund would be available to EPA, without further appropriation, to make grants to community water systems and municipal wastewater treatment works for costs associated with PFAS removal. Appendix. Selected Drinking-Water-Related Actions by EPA	Summary:	gov_report	1,024	null	85
crs_R45914	crs_R45914_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The K-12 teacher workforce is relatively largeâeach year, nearly 4 million teachers are employed in U.S. elementary and secondary schools. Turnover in these schools is high relative to earlier periodsâabout 1 in 10 teachers left his or her job in 2018. This figure follows federal statistical trends that show a steady growth in teacher attrition since the 1980s. The problem of teacher turnover raises a number of recruitment and retention issues of interest to policymakers. The Higher Education Act (HEA) is the main federal law containing policies designed to address these issues. Title II of the HEA authorizes grant support for schools that prepare new teachers. Title IV of the HEA authorizes financial support to encourage people to stay in the teaching profession in the form of loan forgiveness and other benefits. The HEA was last comprehensively amended in 2008 by the Higher Education Opportunity Act (HEOA, P.L. 110-315 ). Although the authorities have expired, the associated programs continue to receive appropriations. Congressional consideration of potentially reauthorizing the HEA is ongoing, with the introduction of numerous bills to amend current law and address teacher recruitment and retention. This report describes (1) the history of federal teacher recruitment and retention policy, (2) current policies in this area, and (3) related issues that may arise as Congress considers reauthorizing the HEA. Legislative History6 Teacher recruitment and retention have been the focus of federal policy since the HEA was first enacted in 1965. This section briefly describes the history of federal policy in this area. Teacher Corps and Teacher Centers The HEA was originally enacted by the 89 th Congress and signed into law on November 8, 1965 (P.L. 89-329). Title V authorized the Teacher Corps program, which recruited interns for teaching in high-poverty areas of the country. These interns, directed by experienced teachers, taught in participating K-12 schools while also taking higher education courses to secure teaching certificates. The program was initially funded in FY1966 and phased out in FY1981 under the Omnibus Budget Reconciliation Act of 1981 ( P.L. 97-35 ). In 1967, Title V became the Education Professions Development Act (EPDA, P.L. 90-35), which reauthorized the Teacher Corps program and authorized a number of new teacher development programs. Among these programs were efforts to attract low-income persons to teaching and a fellowship program for enhancing the skills of higher education faculty training elementary and secondary school teachers. In general, EPDA programs were funded beginning for FY1969 or FY1970. The Education Amendments of 1976 ( P.L. 94-482 ) repealed all of the EPDA with the exception of the Teacher Corps program. The Education Amendments of 1976 ( P.L. 94-482 ) renamed Title V as Teacher Corps and Teacher Training Programs, extended the Teacher Corps program authorization, and authorized a new Teacher Centers program. Teacher Centers, first funded for FY1978, were operated by local educational agencies (LEAs) or institutions of higher education (IHEs), and provided in-service training to the elementary and secondary school teaching force. The Omnibus Budget Reconciliation Act phased out the program in FY1981. Paul Douglas Teacher Scholarships and Christa McAuliffe Fellowships Initially enacted in 1984 under the Human Services Reauthorization Act ( P.L. 98-558 ), the Paul Douglas Teacher Scholarships provided annual $5,000 postsecondary education scholarships, for up to four years, to outstanding high school graduates (candidates in the top 10% of their high school graduating class, among other criteria). Recipients were required to teach for two years at the K-12 level for each year of scholarship assistance they received, an obligation that could be reduced by half for those teaching in geographic or subject areas that were experiencing shortages. Federal funds were allocated by formula to states. The Paul Douglas Teacher Scholarships were first funded for FY1986 and last funded for FY1995 (when the program authority was terminated). Also initially authorized under the Human Services Reauthorization Act, the National Talented Teacher Fellowships, later-renamed the Christa McAuliffe Fellowships, provided one-year awards to outstanding, experienced public and private elementary and secondary school teachers for sabbaticals. Following sabbaticals to develop innovative teaching projects, recipients had to return to their prior place of employment for two years. The federal appropriation was allocated by formula among the states. The Christa McAuliffe Fellowships were first funded for FY1987 and last funded for FY1995. Mid-Career Teacher Training and Minority Teacher Recruitment The Higher Education Amendments of 1986 ( P.L. 99-498 ) rewrote Title V as Educator Recruitment, Retention, and Development. These amendments not only extended and renamed the scholarship and fellowship programs enacted in 1984, but also added two new programs intended to recruit new teachers to the profession: Mid-Career Teacher Training and Minority Teacher Recruitment. Mid-Career Teacher Training provided grants to IHEs for the establishment of programs to prepare individuals leaving their current careers in order to teach. Eligibility was limited to individuals with a baccalaureate or advanced degree who had job experience in education-related fields. Two fields are specifically cited in the authorizing statute: preschool and early childhood education. IHEs were initially to receive a planning grant of not more than $100,000 to be used in the two fiscal years following selection; however, the program was funded for two years (FY1990 and FY1991). Minority Teacher Recruitment awarded grants to partnerships between an IHE and either a State Education Agency (SEA) or an LEA to recruit and train minority students, beginning with students in 7 th grade, to become teachers. The program also awarded grants to IHEs to improve teacher preparation programs and to support teacher placement in schools with high minority student enrollment. It was initially funded for FY1993 and received its last appropriation for FY1997. Teacher Quality Enhancement Program The Higher Education Amendments of 1998 established a new federal teacher program in Title II, the Teacher Quality Enhancement Grant program. Part A of Title II authorized three types of competitively awarded grants: State Grants, Partnership Grants, and Recruitment Grants. State Grants and Partnership Grants were each authorized to receive 45% of the appropriation for Title II-A and Recruitment Grants were allocated the remaining 10%. Funds for these grants were first appropriated for FY1999 and have been continued to the present day under new authority described below. State Grants and Partnership Grants funds were to be used for activities including the improvement of teacher pre-service preparation, accountability for teacher preparation programs, the reform of teacher certification requirements (including alternative routes to certification), and in-service professional development. Recruitment Grants funds were to be used for the recruitment of highly qualified teachers (Partnership Grants could also be used for this purpose). Specific recruitment activities described in Title II include teacher education scholarships, support services to help recipients complete postsecondary education, follow-up services during the first three years of teaching, and activities enabling high-need LEAs and schools to recruit highly qualified teachers. In 2008, HEA Title II-A was renamed the Teacher Quality Partnership program under amendments made by the HEOA, which remains current law. Current Programs The HEA, as amended by the HEOA, addresses current K-12 teacher issues through programs supporting the improvement of teacher preparation and recruitment. Title II of the HEA authorizes grants for improving teacher education programs, strengthening teacher recruitment efforts, and providing training for prospective teachers. This title also includes reporting requirements for states and IHEs regarding the quality of teacher education programs. Title IV of the HEA authorizes Teacher Education Assistance for College and Higher Education (TEACH) Grants to encourage more students to prepare for a career in teaching and student loan forgiveness for individuals teaching in certain high-need subjects. Teachers may also be eligible for loan relief through the Title IV Public Service Loan Forgiveness program. Teacher Quality Partnership Grants Title II, Part A of the HEA authorizes Teacher Quality Partnership (TQP) grants to improve the quality of teachers working in high-need schools and early childhood education programs by improving the preparation of teachers and enhancing professional development activities for them, holding teacher preparation programs accountable for preparing effective teachers, and recruiting highly qualified individuals into the teaching force. Eligible Partnerships To be eligible, partnerships must include a high-need LEA; a high-need school or high-need early childhood education program (or a consortium of high-need schools or early childhood education programs served by the partner high-need LEA); a partner IHE; a school, department, or program of education within the partner IHE; and a school or department of arts and sciences within the partner IHE. The TQP statute requires that a high-need LEA must have either a high rate of out-of-field teachers or a high rate of teacher turnover and meet one of the following three criteria: 1. have at least 20% of its children served be from low-income families; 2. serve at least 10,000 children from low-income families; or 3. be eligible for one of the two Rural Education Achievement Programs. Partnership Activities Partnership grant funds are authorized to be used for a Pre-Baccalaureate Preparation program, a Teacher Residency program, or both. Funds may also be used for a Leadership Development program, but only in addition to one of the other two programs. Activities authorized by the HEOA amendments are described below. Pre-Baccalaureate Preparation Program Grants are provided to implement a wide range of reforms in teacher preparation programs and, as applicable, preparation programs for early childhood educators. These reforms may include, among other things, implementing curriculum changes that improve, evaluate, and assess how well prospective teachers develop teaching skills; using teaching and learning research so that teachers implement research-based instructional practices and use data to improve classroom instruction; developing a high-quality and sustained pre-service clinical education program that includes high-quality mentoring or coaching; creating a high-quality induction program for new teachers; implementing initiatives that increase compensation for qualified early childhood educators who attain two-year and four-year degrees; developing and implementing high-quality professional development for teachers in the partner high-need LEAs; developing effective mechanisms, which may include alternative routes to state certification, to recruit qualified individuals into the teaching profession; and strengthening literacy teaching skills of prospective and new elementary and secondary school teachers. Teacher Residency Program Grants are provided to develop and implement teacher residency programs that are based on models of successful teaching residencies and that serve as a mechanism to prepare teachers for success in high-need schools and academic subjects. Grant funds must be used to support programs that provide, among other things, rigorous graduate-level course work to earn a master's degree while undertaking a guided teaching apprenticeship, learning opportunities alongside a trained and experienced mentor teacher, and clear criteria for selecting mentor teachers based on measures of teacher effectiveness. Programs must place graduates in targeted schools as a cohort in order to facilitate professional collaboration and provide to members of the cohort a one-year living stipend or salary, which must be repaid by any recipient who does not teach full-time for at least three years in a high-need school or subject area. Leadership Development Program Grants are provided to develop and implement effective school leadership programs to prepare individuals for careers as superintendents, principals, early childhood education program directors, or other school leaders. Such programs must promote strong leadership skills and techniques so that school leaders are able to create a school climate conducive to professional development for teachers, understand the teaching and assessment skills needed to support successful classroom instruction, use data to evaluate teacher instruction and drive teacher and student learning, manage resources and time to improve academic achievement, engage and involve parents and other community stakeholders, and understand how students learn and develop in order to increase academic achievement. Grant funds must also be used to develop a yearlong clinical education program, a mentoring and induction program, and programs to recruit qualified individuals to become school leaders. Enhancing Teacher Education Programs The HEOA amendments established five new programs in HEA, Title II, Part B, Enhancing Teacher Education: Subpart 1, Preparing Teachers for Digital Age Learners; Subpart 2, Hawkins Centers of Excellence; Subpart 3, Teach to Reach Grants; Subpart 4, Adjunct Teacher Corps; and Subpart 5, Graduate Fellowships to Prepare Faculty in High-Need Areas. None of these programs has received funding. TEACH Grants The College Cost Reduction and Access Act ( P.L. 110-84 ) established the TEACH Grants under Subpart 9 of HEA, Title VI-A to provide aid directly to postsecondary students who are training to become teachers. The program provides grants to cover the cost of attendance of up to $4,000 per year ($16,000 total) for bachelor's studies or $8,000 total for master's studies to students who commit to teaching high-need subjects in low-income schools after completing their postsecondary education. Both undergraduate and graduate students are eligible for the grants and must agree to serve as full-time mathematics, science, foreign language, bilingual education, special education, or reading teachers in low-income schools for at least four years within eight years of graduating. Current teachers, retirees from other occupations, and those who became teachers through alternative certification routes are also eligible for TEACH Grants to help pay for the costs of obtaining graduate degrees. An individual who fails to complete the agreed-upon service in low-income schools and high-need subjects is required to pay back his or her TEACH Grant as an Unsubsidized Direct Loan, including interest from the day the grant was made. Debt Relief from Student Loans Relief from repayment obligations under federal student loan programs has been available to teachers since before enactment of the HEA. The National Defense Education Act of 1958 (NDEA, P.L. 85-864) included a loan forgiveness component of the National Defense Student Loan (NDSL) program that was intended to increase the number and quality of teachers in U.S. schools. The NDSL program was incorporated into the HEA through the Education Amendments of 1972 (P.L. 92-318) and was later renamed the Federal Perkins Loan Program by amendments made through the Higher Education Amendments of 1986 ( P.L. 99-498 ). Under current HEA provisions, qualified teachers may receive relief from up to 100% of their Perkins Loan balance, depending on years of service; although new Perkins Loans are no longer being made. Loan forgiveness for teachers was expanded to include loans made under the Federal Family Education Loan and Direct Loan programs by the Higher Education Amendments of 1998 ( P.L. 105-244 ). For individuals who teach for five years on a full-time basis in eligible low-income schools, up to $5,000 may be canceled. Forbearance is available to borrowers during their five years of qualified teaching. Only individuals who are new borrowers on or after October 1, 1998, are eligible for this loan forgiveness benefit. The Taxpayer-Teacher Protection Act of 2004 ( P.L. 108-409 ) increased the maximum amount of loan forgiveness to $17,500 for special education teachers and those teaching mathematics or science in secondary schools. Teachers may also qualify for student debt relief under the Public Service Loan Forgiveness (PSLF) program, enacted by the College Cost Reduction and Access Act of 2007 ( P.L. 110-84 ). Under the PSLF program, individuals may qualify to have the balance (principal and interest) of their Direct Loans forgiven if they have made 120 full, scheduled, monthly payments on those loans, according to certain repayment plans, while concurrently employed full-time in public service (which can include teaching). HEA Reauthorization Issues The 116 th Congress is expected to consider reauthorizing the HEA. Thus far, numerous bills have been introduced to amend current law and address teacher recruitment and retention. This section discusses issues that may arise as the potential reauthorization process unfolds. The policy issues discussed here are based on existing and prior legislative proposals and are intended to provide some context for their consideration. These issues include modifying the Title II grant partnership structure, targeting support to specific teacher shortage areas or non-instructional staff, expanding teacher preparation program accountability requirements, reforming administration of the TEACH Grant program, and expanding or consolidating teacher loan forgiveness programs. Title II Grant Partnership Structure Currently, IHEs are a required partner in the TQP program and often serve as the sponsor of a partnership. With the rise of alternatives to traditional routes into the teaching profession, some proposals would eliminate the requirement that IHEs be a partner by allowing non-IHE-based teacher preparation providers to serve as TQP grantee sponsors as well. Current law defines a "partner institution" as a four-year IHE. Policymakers may consider amending this definition to allow two-year IHEs or other nonprofit teacher preparation programs to serve as a TQP partner institution or partnership sponsor. To be a partner in a TQP grant, LEAs and schools must be designated as "high-need" according to definitions in Title II of the HEA. Those definitions attempt to direct support, in part, toward low-income LEAs and schools. Some feel the thresholds set by the HEA are too low and that funds should be reserved for very low-income LEAs and schools. Targeting School Staff Current federal teacher recruitment and retention programs often direct support to certain instructional areas that are considered hard-to-staff, such as mathematics, science, and special education. Some feel these provisions should be broadened to include additional subject areas (e.g., English language learner instruction) or certain hard-to-staff schools (e.g., rural and/or Native American schools). Others have proposed that the targeted position types should be broadened to include non-instructional staff such as school counselors, librarians, literacy specialists, and coaches. There are also proposals focused on staff who serve in leadership roles (e.g., establishing principal residency programs similar to the current teacher residencies). Some have pushed for Title II amendments that would support teacher advancement into leadership through the creation of career ladders and incentives for master teachers. Still others would like to allow the Secretary to set aside Title II funds for a state grant for leadership training activities. Preparation Program Accountability Under current HEA provisions, IHEs that operate teacher preparation programs are required to report information on their performance including pass rates and scaled scores on teacher certification exams. States are required to report these data in aggregate as well as the results of program evaluations and any programs designated as "low-performing." Thirty states have never identified a program as low-performing and fewer than 3% of all programs nationwide have ever been identified as low-performing or at-risk of such designation. Some policymakers have argued that current accountability provisions are inadequate. Some have asserted that non-IHE-based programs in particular are not sufficiently scrutinized. Others think that all teacher preparation programs should be subject to outcome measures beyond passage of certification exams and that programs should be judged by their graduates' professional readiness, ability to find employment, and retention in teaching, as well as the performance of their students. TEACH Grant Program Administration The TEACH Grant program has reportedly encountered significant administrative challenges and has been the subject of increasing congressional scrutiny. Changes that have been suggested to alleviate these issues include providing grant recipients additional time to complete the service requirement, the option to pay back part of their grant if they are unable to complete the service requirement in full, and a better process by which to appeal the conversion of their grant to a loan. Some observers are concerned that students in the first year or two of college are not fully aware of what profession they want to go into, and they have advocated that TEACH Grants be made available to student in their junior and senior years of college and/or to master's degree candidates. Others have sought to limit TEACH Grants to programs with a proven ability to prepare individuals effectively for the teaching profession. Loan Forgiveness Teachers may access several separate loan relief options under current federal law. In many cases, these options serve similar purposes, but benefit requirements may conflict with or not complement one another (i.e., exercising eligibility for one program may nullify or forestall eligibility for another). The existence of multiple programs may lead to borrower confusion as well as administrative complexity. Policymakers might consider consolidating programs or targeting them to a narrower set of borrowers. Some argue that the requirements teachers must meet to qualify for loan relief are too difficult to understand and/or fulfill. These requirements caused the loan forgiveness programs to encounter administrative problems similar to those in the TEACH Grant program. Policymakers may consider whether to simplify these requirements to improve the effectiveness of loan forgiveness as a teacher retention tool. Summary:	null	96	23,150	23,152	23,152	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The K-12 teacher workforce is relatively largeâeach year, nearly 4 million teachers are employed in U.S. elementary and secondary schools. Turnover in these schools is high relative to earlier periodsâabout 1 in 10 teachers left his or her job in 2018. This figure follows federal statistical trends that show a steady growth in teacher attrition since the 1980s. The problem of teacher turnover raises a number of recruitment and retention issues of interest to policymakers. The Higher Education Act (HEA) is the main federal law containing policies designed to address these issues. Title II of the HEA authorizes grant support for schools that prepare new teachers. Title IV of the HEA authorizes financial support to encourage people to stay in the teaching profession in the form of loan forgiveness and other benefits. The HEA was last comprehensively amended in 2008 by the Higher Education Opportunity Act (HEOA, P.L. 110-315 ). Although the authorities have expired, the associated programs continue to receive appropriations. Congressional consideration of potentially reauthorizing the HEA is ongoing, with the introduction of numerous bills to amend current law and address teacher recruitment and retention. This report describes (1) the history of federal teacher recruitment and retention policy, (2) current policies in this area, and (3) related issues that may arise as Congress considers reauthorizing the HEA. Legislative History6 Teacher recruitment and retention have been the focus of federal policy since the HEA was first enacted in 1965. This section briefly describes the history of federal policy in this area. Teacher Corps and Teacher Centers The HEA was originally enacted by the 89 th Congress and signed into law on November 8, 1965 (P.L. 89-329). Title V authorized the Teacher Corps program, which recruited interns for teaching in high-poverty areas of the country. These interns, directed by experienced teachers, taught in participating K-12 schools while also taking higher education courses to secure teaching certificates. The program was initially funded in FY1966 and phased out in FY1981 under the Omnibus Budget Reconciliation Act of 1981 ( P.L. 97-35 ). In 1967, Title V became the Education Professions Development Act (EPDA, P.L. 90-35), which reauthorized the Teacher Corps program and authorized a number of new teacher development programs. Among these programs were efforts to attract low-income persons to teaching and a fellowship program for enhancing the skills of higher education faculty training elementary and secondary school teachers. In general, EPDA programs were funded beginning for FY1969 or FY1970. The Education Amendments of 1976 ( P.L. 94-482 ) repealed all of the EPDA with the exception of the Teacher Corps program. The Education Amendments of 1976 ( P.L. 94-482 ) renamed Title V as Teacher Corps and Teacher Training Programs, extended the Teacher Corps program authorization, and authorized a new Teacher Centers program. Teacher Centers, first funded for FY1978, were operated by local educational agencies (LEAs) or institutions of higher education (IHEs), and provided in-service training to the elementary and secondary school teaching force. The Omnibus Budget Reconciliation Act phased out the program in FY1981. Paul Douglas Teacher Scholarships and Christa McAuliffe Fellowships Initially enacted in 1984 under the Human Services Reauthorization Act ( P.L. 98-558 ), the Paul Douglas Teacher Scholarships provided annual $5,000 postsecondary education scholarships, for up to four years, to outstanding high school graduates (candidates in the top 10% of their high school graduating class, among other criteria). Recipients were required to teach for two years at the K-12 level for each year of scholarship assistance they received, an obligation that could be reduced by half for those teaching in geographic or subject areas that were experiencing shortages. Federal funds were allocated by formula to states. The Paul Douglas Teacher Scholarships were first funded for FY1986 and last funded for FY1995 (when the program authority was terminated). Also initially authorized under the Human Services Reauthorization Act, the National Talented Teacher Fellowships, later-renamed the Christa McAuliffe Fellowships, provided one-year awards to outstanding, experienced public and private elementary and secondary school teachers for sabbaticals. Following sabbaticals to develop innovative teaching projects, recipients had to return to their prior place of employment for two years. The federal appropriation was allocated by formula among the states. The Christa McAuliffe Fellowships were first funded for FY1987 and last funded for FY1995. Mid-Career Teacher Training and Minority Teacher Recruitment The Higher Education Amendments of 1986 ( P.L. 99-498 ) rewrote Title V as Educator Recruitment, Retention, and Development. These amendments not only extended and renamed the scholarship and fellowship programs enacted in 1984, but also added two new programs intended to recruit new teachers to the profession: Mid-Career Teacher Training and Minority Teacher Recruitment. Mid-Career Teacher Training provided grants to IHEs for the establishment of programs to prepare individuals leaving their current careers in order to teach. Eligibility was limited to individuals with a baccalaureate or advanced degree who had job experience in education-related fields. Two fields are specifically cited in the authorizing statute: preschool and early childhood education. IHEs were initially to receive a planning grant of not more than $100,000 to be used in the two fiscal years following selection; however, the program was funded for two years (FY1990 and FY1991). Minority Teacher Recruitment awarded grants to partnerships between an IHE and either a State Education Agency (SEA) or an LEA to recruit and train minority students, beginning with students in 7 th grade, to become teachers. The program also awarded grants to IHEs to improve teacher preparation programs and to support teacher placement in schools with high minority student enrollment. It was initially funded for FY1993 and received its last appropriation for FY1997. Teacher Quality Enhancement Program The Higher Education Amendments of 1998 established a new federal teacher program in Title II, the Teacher Quality Enhancement Grant program. Part A of Title II authorized three types of competitively awarded grants: State Grants, Partnership Grants, and Recruitment Grants. State Grants and Partnership Grants were each authorized to receive 45% of the appropriation for Title II-A and Recruitment Grants were allocated the remaining 10%. Funds for these grants were first appropriated for FY1999 and have been continued to the present day under new authority described below. State Grants and Partnership Grants funds were to be used for activities including the improvement of teacher pre-service preparation, accountability for teacher preparation programs, the reform of teacher certification requirements (including alternative routes to certification), and in-service professional development. Recruitment Grants funds were to be used for the recruitment of highly qualified teachers (Partnership Grants could also be used for this purpose). Specific recruitment activities described in Title II include teacher education scholarships, support services to help recipients complete postsecondary education, follow-up services during the first three years of teaching, and activities enabling high-need LEAs and schools to recruit highly qualified teachers. In 2008, HEA Title II-A was renamed the Teacher Quality Partnership program under amendments made by the HEOA, which remains current law. Current Programs The HEA, as amended by the HEOA, addresses current K-12 teacher issues through programs supporting the improvement of teacher preparation and recruitment. Title II of the HEA authorizes grants for improving teacher education programs, strengthening teacher recruitment efforts, and providing training for prospective teachers. This title also includes reporting requirements for states and IHEs regarding the quality of teacher education programs. Title IV of the HEA authorizes Teacher Education Assistance for College and Higher Education (TEACH) Grants to encourage more students to prepare for a career in teaching and student loan forgiveness for individuals teaching in certain high-need subjects. Teachers may also be eligible for loan relief through the Title IV Public Service Loan Forgiveness program. Teacher Quality Partnership Grants Title II, Part A of the HEA authorizes Teacher Quality Partnership (TQP) grants to improve the quality of teachers working in high-need schools and early childhood education programs by improving the preparation of teachers and enhancing professional development activities for them, holding teacher preparation programs accountable for preparing effective teachers, and recruiting highly qualified individuals into the teaching force. Eligible Partnerships To be eligible, partnerships must include a high-need LEA; a high-need school or high-need early childhood education program (or a consortium of high-need schools or early childhood education programs served by the partner high-need LEA); a partner IHE; a school, department, or program of education within the partner IHE; and a school or department of arts and sciences within the partner IHE. The TQP statute requires that a high-need LEA must have either a high rate of out-of-field teachers or a high rate of teacher turnover and meet one of the following three criteria: 1. have at least 20% of its children served be from low-income families; 2. serve at least 10,000 children from low-income families; or 3. be eligible for one of the two Rural Education Achievement Programs. Partnership Activities Partnership grant funds are authorized to be used for a Pre-Baccalaureate Preparation program, a Teacher Residency program, or both. Funds may also be used for a Leadership Development program, but only in addition to one of the other two programs. Activities authorized by the HEOA amendments are described below. Pre-Baccalaureate Preparation Program Grants are provided to implement a wide range of reforms in teacher preparation programs and, as applicable, preparation programs for early childhood educators. These reforms may include, among other things, implementing curriculum changes that improve, evaluate, and assess how well prospective teachers develop teaching skills; using teaching and learning research so that teachers implement research-based instructional practices and use data to improve classroom instruction; developing a high-quality and sustained pre-service clinical education program that includes high-quality mentoring or coaching; creating a high-quality induction program for new teachers; implementing initiatives that increase compensation for qualified early childhood educators who attain two-year and four-year degrees; developing and implementing high-quality professional development for teachers in the partner high-need LEAs; developing effective mechanisms, which may include alternative routes to state certification, to recruit qualified individuals into the teaching profession; and strengthening literacy teaching skills of prospective and new elementary and secondary school teachers. Teacher Residency Program Grants are provided to develop and implement teacher residency programs that are based on models of successful teaching residencies and that serve as a mechanism to prepare teachers for success in high-need schools and academic subjects. Grant funds must be used to support programs that provide, among other things, rigorous graduate-level course work to earn a master's degree while undertaking a guided teaching apprenticeship, learning opportunities alongside a trained and experienced mentor teacher, and clear criteria for selecting mentor teachers based on measures of teacher effectiveness. Programs must place graduates in targeted schools as a cohort in order to facilitate professional collaboration and provide to members of the cohort a one-year living stipend or salary, which must be repaid by any recipient who does not teach full-time for at least three years in a high-need school or subject area. Leadership Development Program Grants are provided to develop and implement effective school leadership programs to prepare individuals for careers as superintendents, principals, early childhood education program directors, or other school leaders. Such programs must promote strong leadership skills and techniques so that school leaders are able to create a school climate conducive to professional development for teachers, understand the teaching and assessment skills needed to support successful classroom instruction, use data to evaluate teacher instruction and drive teacher and student learning, manage resources and time to improve academic achievement, engage and involve parents and other community stakeholders, and understand how students learn and develop in order to increase academic achievement. Grant funds must also be used to develop a yearlong clinical education program, a mentoring and induction program, and programs to recruit qualified individuals to become school leaders. Enhancing Teacher Education Programs The HEOA amendments established five new programs in HEA, Title II, Part B, Enhancing Teacher Education: Subpart 1, Preparing Teachers for Digital Age Learners; Subpart 2, Hawkins Centers of Excellence; Subpart 3, Teach to Reach Grants; Subpart 4, Adjunct Teacher Corps; and Subpart 5, Graduate Fellowships to Prepare Faculty in High-Need Areas. None of these programs has received funding. TEACH Grants The College Cost Reduction and Access Act ( P.L. 110-84 ) established the TEACH Grants under Subpart 9 of HEA, Title VI-A to provide aid directly to postsecondary students who are training to become teachers. The program provides grants to cover the cost of attendance of up to $4,000 per year ($16,000 total) for bachelor's studies or $8,000 total for master's studies to students who commit to teaching high-need subjects in low-income schools after completing their postsecondary education. Both undergraduate and graduate students are eligible for the grants and must agree to serve as full-time mathematics, science, foreign language, bilingual education, special education, or reading teachers in low-income schools for at least four years within eight years of graduating. Current teachers, retirees from other occupations, and those who became teachers through alternative certification routes are also eligible for TEACH Grants to help pay for the costs of obtaining graduate degrees. An individual who fails to complete the agreed-upon service in low-income schools and high-need subjects is required to pay back his or her TEACH Grant as an Unsubsidized Direct Loan, including interest from the day the grant was made. Debt Relief from Student Loans Relief from repayment obligations under federal student loan programs has been available to teachers since before enactment of the HEA. The National Defense Education Act of 1958 (NDEA, P.L. 85-864) included a loan forgiveness component of the National Defense Student Loan (NDSL) program that was intended to increase the number and quality of teachers in U.S. schools. The NDSL program was incorporated into the HEA through the Education Amendments of 1972 (P.L. 92-318) and was later renamed the Federal Perkins Loan Program by amendments made through the Higher Education Amendments of 1986 ( P.L. 99-498 ). Under current HEA provisions, qualified teachers may receive relief from up to 100% of their Perkins Loan balance, depending on years of service; although new Perkins Loans are no longer being made. Loan forgiveness for teachers was expanded to include loans made under the Federal Family Education Loan and Direct Loan programs by the Higher Education Amendments of 1998 ( P.L. 105-244 ). For individuals who teach for five years on a full-time basis in eligible low-income schools, up to $5,000 may be canceled. Forbearance is available to borrowers during their five years of qualified teaching. Only individuals who are new borrowers on or after October 1, 1998, are eligible for this loan forgiveness benefit. The Taxpayer-Teacher Protection Act of 2004 ( P.L. 108-409 ) increased the maximum amount of loan forgiveness to $17,500 for special education teachers and those teaching mathematics or science in secondary schools. Teachers may also qualify for student debt relief under the Public Service Loan Forgiveness (PSLF) program, enacted by the College Cost Reduction and Access Act of 2007 ( P.L. 110-84 ). Under the PSLF program, individuals may qualify to have the balance (principal and interest) of their Direct Loans forgiven if they have made 120 full, scheduled, monthly payments on those loans, according to certain repayment plans, while concurrently employed full-time in public service (which can include teaching). HEA Reauthorization Issues The 116 th Congress is expected to consider reauthorizing the HEA. Thus far, numerous bills have been introduced to amend current law and address teacher recruitment and retention. This section discusses issues that may arise as the potential reauthorization process unfolds. The policy issues discussed here are based on existing and prior legislative proposals and are intended to provide some context for their consideration. These issues include modifying the Title II grant partnership structure, targeting support to specific teacher shortage areas or non-instructional staff, expanding teacher preparation program accountability requirements, reforming administration of the TEACH Grant program, and expanding or consolidating teacher loan forgiveness programs. Title II Grant Partnership Structure Currently, IHEs are a required partner in the TQP program and often serve as the sponsor of a partnership. With the rise of alternatives to traditional routes into the teaching profession, some proposals would eliminate the requirement that IHEs be a partner by allowing non-IHE-based teacher preparation providers to serve as TQP grantee sponsors as well. Current law defines a "partner institution" as a four-year IHE. Policymakers may consider amending this definition to allow two-year IHEs or other nonprofit teacher preparation programs to serve as a TQP partner institution or partnership sponsor. To be a partner in a TQP grant, LEAs and schools must be designated as "high-need" according to definitions in Title II of the HEA. Those definitions attempt to direct support, in part, toward low-income LEAs and schools. Some feel the thresholds set by the HEA are too low and that funds should be reserved for very low-income LEAs and schools. Targeting School Staff Current federal teacher recruitment and retention programs often direct support to certain instructional areas that are considered hard-to-staff, such as mathematics, science, and special education. Some feel these provisions should be broadened to include additional subject areas (e.g., English language learner instruction) or certain hard-to-staff schools (e.g., rural and/or Native American schools). Others have proposed that the targeted position types should be broadened to include non-instructional staff such as school counselors, librarians, literacy specialists, and coaches. There are also proposals focused on staff who serve in leadership roles (e.g., establishing principal residency programs similar to the current teacher residencies). Some have pushed for Title II amendments that would support teacher advancement into leadership through the creation of career ladders and incentives for master teachers. Still others would like to allow the Secretary to set aside Title II funds for a state grant for leadership training activities. Preparation Program Accountability Under current HEA provisions, IHEs that operate teacher preparation programs are required to report information on their performance including pass rates and scaled scores on teacher certification exams. States are required to report these data in aggregate as well as the results of program evaluations and any programs designated as "low-performing." Thirty states have never identified a program as low-performing and fewer than 3% of all programs nationwide have ever been identified as low-performing or at-risk of such designation. Some policymakers have argued that current accountability provisions are inadequate. Some have asserted that non-IHE-based programs in particular are not sufficiently scrutinized. Others think that all teacher preparation programs should be subject to outcome measures beyond passage of certification exams and that programs should be judged by their graduates' professional readiness, ability to find employment, and retention in teaching, as well as the performance of their students. TEACH Grant Program Administration The TEACH Grant program has reportedly encountered significant administrative challenges and has been the subject of increasing congressional scrutiny. Changes that have been suggested to alleviate these issues include providing grant recipients additional time to complete the service requirement, the option to pay back part of their grant if they are unable to complete the service requirement in full, and a better process by which to appeal the conversion of their grant to a loan. Some observers are concerned that students in the first year or two of college are not fully aware of what profession they want to go into, and they have advocated that TEACH Grants be made available to student in their junior and senior years of college and/or to master's degree candidates. Others have sought to limit TEACH Grants to programs with a proven ability to prepare individuals effectively for the teaching profession. Loan Forgiveness Teachers may access several separate loan relief options under current federal law. In many cases, these options serve similar purposes, but benefit requirements may conflict with or not complement one another (i.e., exercising eligibility for one program may nullify or forestall eligibility for another). The existence of multiple programs may lead to borrower confusion as well as administrative complexity. Policymakers might consider consolidating programs or targeting them to a narrower set of borrowers. Some argue that the requirements teachers must meet to qualify for loan relief are too difficult to understand and/or fulfill. These requirements caused the loan forgiveness programs to encounter administrative problems similar to those in the TEACH Grant program. Policymakers may consider whether to simplify these requirements to improve the effectiveness of loan forgiveness as a teacher retention tool.	Summary:	gov_report	1,024	null	86
crs_R45764	crs_R45764_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Economic factors, new technologies, environmental concerns and associated regulatory policies, and other developments are changing the energy sources used to generate electricity in the United States. One notable change is increased generation from variable renewable energy (VRE) sources such as wind and solar. According to the U.S. Energy Information Administration (EIA), combined generation from wind and solar sources increased from 1% of total electricity generation in 2008 to 9% of total electricity generation in 2018. These sources have weather-dependent availability, meaning that changing weather patterns can change available electricity supply from those sources. In contrast, conventional sources for electricity generation, such as coal, natural gas, or nuclear energy, are usually available under normal weather conditions. Power system operators have adjusted existing reliability standards and planning practices to accommodate weather-dependent wind and solar sources. Further adjustments are being discussed as generation from wind and solar sources continue to grow. Congress required the setting and enforcement of electric reliability standards in the Energy Policy Act of 2005 (EPACT05; P.L. 109-58 ). These standards are developed by the North American Electric Reliability Corporation (NERC) and approved by the Federal Energy Regulatory Commission (FERC) in the United States. These mandatory standards apply to the bulk power system, which is comprised mostly of large-scale generators and electricity transmission systems. Small-scale generators (e.g., rooftop solar electricity generation), publicly owned utilities, and local electricity distribution systems are generally under the jurisdiction of state public utility regulatory commissions (PUCs). To date, generation from wind and solar sources does not appear to be causing electric reliability issues at the national level. NERC's 2018 annual report on reliability showed that, of the 13 metrics it uses to assess reliability, 9 were stable or improving over the 2013-2017 period and 4 showed trends that were, at least partly, inconclusive. Of the four metrics with inconclusive trends, three improved over this period for a subset of bulk power system components. Data from NERC also indicate that reliability performance is currently stable in regions such as the Midwest and California where the shares of generation from wind and solar sources are above the national average. Questions remain about how higher levels of generation from wind and solar sources might impact electric reliability moving forward. This report provides background on reliability planning in the United States with an emphasis on the effects of daily and seasonal variability in wind and solar sources on the bulk power system. Members of Congress might consider how reliability could be impacted if generation from wind and solar sources increases, as many analysts expect. Other reliability concerns, such as cyber and physical security, small-scale generators, and local distribution networks, may be of interest to Congress but are not discussed at length in this report. Electric Power Sector Overview As shown in Figure 1 the electric power sector consists primarily of three systems. The generation system consists of power plants that generate electricity. The transmission system consists of high voltage transmission lines that move power across long distances. The distribution systems make final delivery of electricity to homes and businesses. This report will refer to the combined generation and transmission systems as the bulk power system, following the definition Congress established in EPACT05: The term "bulk-power system" meansâ(a) facilities and control systems necessary for operating an interconnected electric energy transmission network (or any portion thereof); and (b) electric energy from generation facilities needed to maintain transmission system reliability. The term does not include facilities used in the local distribution of electric energy. Notably, the discussion in this report generally excludes distributed energy resources such as rooftop solar electricity generation. These resources might pose separate reliability challenges that Congress might choose to consider. Ownership structures for bulk power system components vary across the country. In some regions, shown in Figure 2 , competitive markets exist for wholesale electric power, and regional transmission organizations (RTOs) and independent system operators (ISOs) manage the generation and transmission components of the power system. In RTO regions, electricity generators compete to sell power to distribution utilities. The RTO manages an auction process to select the sources for generation that distribution utilities resell to end-use customers. The RTO is also responsible for managing the transmission system and overseeing reliability within its boundaries. In RTO regions, market signals primarily determine investment decisions. Some RTOs operate separate auction processes specifically for essential reliability services. According to FERC, two-thirds of U.S. electricity demand comes from RTO regions. In non-RTO regions, vertically integrated electric utilities are largely responsible for power generation, transmission, and distribution of electricity to end-use customers. These utilities are regulated as natural monopolies and, unlike utilities in RTO regions, do not face competition for generation and transmission services. These utilities may also take responsibility for some aspects of reliability as discussed in the Appendix . State regulators generally oversee these utility operations and are responsible for authorizing new investments, including those related to reliability. Even in RTO regions, municipal utilities and rural electric cooperatives may own generation and transmission system components and oversee their operation. These systems and operation are generally outside of federal and state regulatory jurisdiction. What Is Electric Reliability? A colloquial definition of electric reliability is "having power when it is needed." Operators of bulk power system components, though, require specific and highly technical definitions for reliability. For purposes of regulation, these definitions are provided in the form of NERC reliability standards. NERC develops individual standards for each set of power system components, which may include separate standards covering different reliability timescales for each set of components. As NERC defines "reliability standard," it includes requirements for the operation of existing Bulk-Power System facilities, including cybersecurity protection, and the design of planned additions or modifications to such facilities to the extent necessary to provide for Reliable Operation of the Bulk-Power System, but the term does not include any requirement to enlarge such facilities or to construct new transmission capacity or generation capacity. When all bulk power system components meet reliability standards, NERC expects the vast majority of individuals to have the full amount of electricity they desire. NERC reliability standards do not apply to local electricity distribution system components and operations (see discussion in text box, "Distribution System Reliability"), so localized outages could still occur when reliability standards are met. An analysis found that from 2008 to 2014, upwards of 90% of power outages originated in local distribution systems. This measure includes major events (e.g., hurricanes), but may not capture the full scope or severity of large-scale outages. NERC's reliability standards are meant to ensure an Adequate Level of Reliability (ALR) for the bulk power system during normal operating conditions and following localized disturbances such as lightning strikes. For economic reasons, some risk of occasional power loss is accepted in reliability planning. A common goal is to limit outages to no more than 1 day every 10 years under normal operating conditions. Achieving ALR is not the same goal as preventing all brownouts and blackouts. Bulk power system outages could still occur when reliability standards are fully met. These outages might follow a major event such as a hurricane affecting large areas of the bulk power system. Generally, factors that increase uncertainty reduce reliability, and factors that reduce uncertainty increase reliability. Wind and solar are types of variable renewable energy sources of electricity, and weather is a key source of uncertainty for forecasts of generation from these sources. In contrast, conventional sources such as coal and nuclear have long-lasting, on-site fuel supplies that reduce the uncertainty about their availability. This difference has raised questions about how to integrate large amounts of VRE sources into the existing bulk power system, since it was not originally designed to accommodate large amounts of weather-dependent sources of electricity. Figure 3 shows typical patterns for electricity generation for wind and solar sources in the United States. Wind generation tends to peak overnight and during winter months. Solar generation, on the other hand, tends to be highest during the middle of the day and during the summer. Though these typical patterns are well established for most of the United States, actual generation from wind and solar sources at any particular moment will depend upon specific weather conditions. Changing Electricity Generation Profile The electric power sector is increasing its use of sources associated with more uncertainty in availability. According to the U.S. Energy Information Administration, combined generation from wind and utility-scale solar sources increased from 1% of total electricity generation in 2008 to 8% of total electricity generation in 2018. Of the generation in 2018 from wind and utility-scale solar sources, 80% came from wind. Conventional sources such as coal, natural gas, and nuclear comprised a large majority of generation over this time period. The annual share of generation from different sources from 2008 to 2018 in shown in Figure 4 . National-level data are not indicative of how generation from wind and solar sources varies across the country. Similarly, annual data do not show how electricity generation varies throughout the day or during different seasons. For example, during brief periods in some regions, wind and solar sources have provided a majority of the energy for electricity generation. Some examples are Generation from wind sources supplied 56% of electricity demand in ERCOT, the RTO covering most of Texas, at 3:10 am on January 19, 2019. Generation from solar sources supplied 59% of electricity demand in CAISO, the RTO covering most of California, at 2:45 pm on March 16, 2019. Generation from wind supplied 67.3% of electricity demand in SPP, the RTO covering many central states, at 1:25 am on April 27, 2019. These events all set records for maximum share of generation from renewable sources, and the bulk power system maintained reliability during them. Some advocates for increased use of wind and solar sources have pointed to events like these as evidence that VRE sources can be used to an even greater degree without impacting reliability. Extrapolating these events to scenarios of correspondingly high national levels of generation from wind and solar sources, however, is complicated by several factors. First, these events were all short lived, typically five minutes or less. Further, these events all occurred when electricity demand was relatively low, namely weekend days during cool months. During times of the year when electricity demand is high, such as the summer cooling season, the share of electricity generation from renewable sources is lower. For example, SPP has reported that during its peak demand hours in 2016, wind supplied 11% of generation while conventional sources such as coal (47%) and natural gas (33%) supplied the majority of electricity. The seasonality of VRE availability also likely contributed to these record-setting events, especially for wind, which tends to have maximum generation during winter and spring months. Balancing Variable Renewable Energy Electricity is essentially generated as a just-in-time commodity, due to limited energy storage capacities. If electricity supply and demand differ by too much, system components could be damaged, leading to system instability or potential failure. The operations that keep electricity supply and demand within acceptable levels are known as balancing. Balancing involves increasing or decreasing output from generators according to system conditions over timescales of minutes to hours, and it is a critical aspect of maintaining reliability. Balancing authorities, discussed in the Appendix , issue orders to generators to change their output as needed to maintain reliability. Balancing authorities can be utilities, or RTOs can act as balancing authorities in the regions where they exist. The rules for selecting which generators must increase or decrease output typically reflect an approach known as security-constrained economic dispatch (SCED). Under SCED, system operators ensure that electricity is produced at the lowest overall cost while respecting any transmission or operational constraints. When generation from a low-cost source would jeopardize reliability, a higher-cost source is used. In other words, SCED has two goals: affordability and reliability. SCED favors sources with low operating costs, and wind and solar sources do not have to pay for fuel. As a result, wind and solar sources typically generate the maximum amount of electricity they can at any moment. Balancing typically involves quickly increasing or decreasing output from other sources in response to variable output from wind and solar sources. The capability to quickly change output is known as ramping, and electricity sources differ in their ramping capability. System operators use a variety of electricity sources to balance generation from wind and solar sources. Some may be more commonly used in certain regions of the country, depending on local factors. Each has different benefits and limitations, some of which are summarized below. Reciprocating internal combustion engines (RICE) have seen an increase in installed capacity since 2000, partly in response to higher levels of generation from wind and solar sources. These sources have high ramping capabilities and use mature technologies. They usually use natural gas or fuel oil as fuel, so they have associated fuel costs and environmental impacts. Steam turbines, usually fueled by coal or nuclear energy , have historically been operated at steady, high output levels, barring maintenance needs, because that is the most efficient and lowest cost operational mode for them. These sources are capable of ramping to some extent. This operational mode may provide revenue for certain sources located in regions of the country with low wholesale electricity prices. It might also result in higher costs for electricity from these sources, compared to when they are not ramped. Wind and solar sources located in one area can balance wind and solar sources in other areas, since it is rare to have cloudy skies or calm winds over broad regions of the country simultaneously. This could have the benefit of using sources with zero fuel costs and zero emissions for balancing; however, existing electricity transmission system constraints limit the extent to which this is possible. Energy storage can be used for balancing because it stores electricity during periods of high supply and then provides electricity when supply is low. Many experts also see storage as a way to address the daily variability shown in Figure 3 and thereby expand the utilization of installed wind and solar sources. Many energy storage types are expensive and not currently deployed in large amounts. Energy storage can be co-located with wind or solar generators, or it can be located at other sites in the power system or the distribution system. Demand response, sometimes called demand-side management, involves adjusting electricity demand in response to available supply. This is counter to how the power system has historically been operated, but has become more commonly used. Demand response includes programs in which electricity consumers voluntarily reduce their usage in exchange for financial compensation. Demand response can be a low-cost balancing option because it does not require electricity generation; however, it comes at a social cost because consumers do not use electricity at their preferred time.The electric power sector is working to improve the use of weather and power forecasting in system balancing. For example, MISO changed its wholesale electricity market rules in 2011 to create a Dispatchable Intermittent Resources program. This program allows wind sources to make use of their own generation forecasts and offer generation at five-minute intervals. Previously, offers had to be made on an hourly basis. This was creating inefficiencies in using wind sources since their output can vary over the course of an hour. Improved forecasting could result in increased use of low-cost wind and solar sources, but forecasting methodologies are still being optimized for this purpose. The above considerations apply to bulk power system balancing today. Technological or policy developments could alter how system balancing is conducted in the future. Additionally, if wind and solar sources provided even larger shares of overall generation, new benefits or limitations for each balancing source type could emerge. Federal Government Activities Affecting Reliability and Balancing Work at the federal level to address reliability needs associated with increased use of wind and solar sources has been underway for some time. For example, NERC created a task force in December 2007 to study the integration of VRE and identify gaps in reliability standards. The federal government undertakes actions in addition to the development and enforcement of reliability standards that affect electric reliability. FERC regulates interstate electricity transmission, which can be a key determinant of what sources are available to balance wind and solar. FERC also regulates wholesale electricity markets in most regions of the country. Market rules, including how SCED is implemented, can influence which individual generators are used for system balancing. Market prices can directly affect project revenues and influence investment decisions. Additionally, Congress funds projects and programs that support technology development and deployment, including for sources and operations that improve reliability. Some examples demonstrate the breadth of federal activities related to reliability. In EPACT05, Congress created Section 219 of the Federal Power Act that directs FERC to establish financial incentives for certain electricity transmission investments. FERC's resulting rule became effective in 2006 and includes provisions allowing higher rates of return, accelerated depreciation, and full cost recovery, all for investments and activities that FERC approves on a case-by-case basis. Transmission investment has increased since the passage of EPACT05, although there may be many factors driving this investment. On March 21, 2019, FERC opened an inquiry on potential changes to its transmission incentive policy. In 2011, FERC issued a rule, Order No. 1000, revising requirements related to new transmission projects. Among other revisions, Order No. 1000 increased the weight given to achieving public policy requirements when FERC considers approval of transmission projects. An example of a public policy requirement might be a state requirement that a specified share of electricity sales come from renewable sources, a policy commonly known as a renewable portfolio standard. New transmission capacity is often needed to access and balance wind and solar sources. Several FERC orders demonstrate how market rules are changing in response to increased need for balancing and ramping. Order No. 745 allows demand response to earn compensation from wholesale electricity markets for providing energy services to balance the power system in day-ahead and real-time markets. Order No. 841 allows energy storage systems to earn compensation from wholesale electricity markets for providing any energy, capacity, and essential reliability services they are capable of providing. Implementation of Order No. 841 might lead to greater deployment of energy storage which could improve balancing. Various grant programs administered by the Department of Energy (DOE) have supported the development of new technologies that can balance wind and solar sources or support reliability in other ways. These include research and development into electricity generators; wind forecast models and methodology; power electronics for solar sources; and standards for interconnection into the bulk power system. DOE's Office of Energy Efficiency and Renewable Energy (EERE) has funded research meant to improve short-term weather forecasting specifically related to wind power forecasts in two Wind Forecast Improvement Projects. DOE reports that advances made during this research include improved observations of meteorological data and improved methodologies for using those data in wind forecasts. Potential Issues for Congress Congress has held hearings related to the changes in the electricity generation profile of the country, and some Members raised concerns about reliability during these hearings. Members may continue to examine reliability issues moving forward, in light of projections that wind and solar will become an increasingly larger share of electricity generation. For example, EIA's projection of existing law and regulations shows wind and solar sources contributing 23% of electricity generation in 2050. Members may also choose to include reliability as part of any debate about policies to increase the generation from wind and solar sources. Preparing for higher levels of generation from wind and solar might require new approaches to maintaining electric reliability. The existing regulatory framework can accommodate some changes since FERC and NERC have authority to initiate development of new reliability standards. For example, NERC has raised the issue of whether it should develop new reliability metrics in light of the increasing use of VRE for electricity generation. In addition to its capacity supply assessment, NERC's Reliability Assessment Subcommittee should lead the electric industry in developing a common approach and identify metrics to assess energy adequacy. As identified in this assessment, the changing resource mix can alter the energy and availability characteristics of the generation fleet. Additional analysis is needed to determine energy sufficiency, particularly during off-peak periods and where energy-limited resources are most prominent. Congress could choose to provide guidance for FERC and NERC activities in this area. Congress could also assess whether the existing regulatory framework is sufficient to maintain reliability if generation from wind and solar sources increase above current projections. One area of discussion is the siting and approval of transmission projects, particularly those that might result in enhanced availability of wind and solar sources for system balancing. Currently, the siting of electricity transmission facilities is largely left to the states. Section 1221 of EPACT05 directs FERC to issue permits for the construction or modification of transmission facilities in certain circumstances in areas designated by the Secretary of Energy as "National Interest Electric Transmission Corridors." This authority was to be exercised only if the relevant state agency lacks the authority to permit the transmission facilities or has "withheld approval for more than one year." Shortly after passage of EPACT05, DOE set out to designate the National Interest Electric Transmission Corridors and FERC set up a framework for permitting transmission facilities on those corridors. However, federal courts vacated both agencies' actions, and neither agency has taken any significant action pursuant to their Section 1221 authority since that time. As noted above, most power outages occur on local electricity distribution systems, and these are regulated by state or local governments. Congress could consider expanding federal activities affecting distribution system reliability. This might involve studies of the factors (e.g., weather, aging infrastructure, VRE) that result in power outages. Such activities might also include federal financial support for projects or practices that improve reliability of distribution systems or encouraging new operational regimes such as independent distribution system operators (see earlier discussion of this issue in text box, "Distribution System Reliability"). Congress might also consider acting on the emerging and related issue of electric resilience. Some support for an enhanced federal role in electricity system resilience exists. For example, the National Academy recommends Congress and the Department of Energy leadership should sustain and expand the substantive areas of research, development, and demonstration that are now being undertaken by the Department of Energy's Office of Electricity Delivery and Energy Reliability and Office of Energy Efficiency and Renewable Energy, with respect to grid modernization and systems integration, with the explicit intention of improving the resilience of the U.S. power grid. Many sources currently used to balance wind and solar have received federal financial support in the past, such as tax credits, grants to states or other entities, and DOE research programs. Congress might consider continuing or expanding this type of support if current activities affecting reliability were deemed insufficient. Appendix. Key Reliability Concepts for Policymakers Electric reliability encompasses short-term and long-term aspects as shown in Figure A-1 . System operators and reliability planners, governed by reliability standards from the North American Electric Reliability Corporation (NERC), have different practices in place to address reliability over these various timescales. Reliability over Different Timescales At the smallest timescales, typically seconds or less, are factors such as frequency control, voltage support, and ramping capability. These are often automatic responses of power system components. NERC refers to these factors as Essential Reliability Services (ERS), and they are sometimes called ancillary services. Historically, many ERS were provided as a natural consequence of the physical operational characteristics of steam turbines. Wind and solar generators do not inherently provide ERS in the same way. They require additional electrical components to do so, and these are being more commonly deployed. In some cases, FERC has mandated the use of technologies that allow wind and solar to provide ERS. Balancing, described in the main body of this report, typically occurs over minutes to hours. Unlike ERS, balancing typically requires action by a system operator. Long-term aspects of reliability relate to planning for energy and transmission needs over months to years. This is sometimes referred to as resource adequacy. Policy goals, such as preferences for certain electricity sources over others, tend to influence long-term reliability planning more than shorter-term reliability aspects. Planning for resource adequacy involves forecasts of electricity supply and demand. For variable renewable energy (VRE) like wind and solar sources, these forecasts require assumptions about wind and solar availability. Reliability planners commonly use planning reserve margins to assess whether planned generation and transmission capacity will be sufficient to supply electricity demand. A planning reserve margin is the difference between expected peak demand and available generating capacity at the peak period in each forecast year. It is often expressed as a percentage where the difference is normalized by the peak demand value. According to NERC, reserve margins "in the range of 10-18 percent" are typically sufficient for ensuring reliability, although "by itself the expected Planning Reserve Margin cannot communicate how reliable a system is." Reserve margins are calculated months or years ahead as part of assessments of whether and where reliability concerns might exist. High planning reserve margins may indicate a likelihood that reliability will be maintained, but, especially when variable sources are present, they might not be predictive. That is, a high planning reserve margin does not guarantee reliability and a low planning reserve margin does not guarantee power disruptions. At the national level, NERC annually assesses resource adequacy over a 10-year forecasting window. NERC uses historic VRE generation data in its assessment and has noted "methods for determining the on-peak availability of wind and solar are improving with growing performance data." In its 2018 Long-Term Reliability Assessment, NERC recommended enhancing its reliability assessment process to account for events, like those noted in the " Changing Electricity Generation Profile " section above, during which VRE sources provided large shares of generation during off-peak periods. Solar eclipses, though rare events, provide opportunities to test the ability of grid operators to reliably operate the grid when solar sources are unavailable. The August 21, 2017, solar eclipse that affected many parts of the United States was one such opportunity. According to NERC, no reliability issues developed during the event, in part because of the measures implemented in advance by the electric industry. Electric Reliability Regulatory Framework Current electric reliability planning is a coordinated process involving multiple entities and spanning multiple jurisdictions. These reliability planning organizations share responsibility for, among other responsibilities, ensuring electricity from wind and solar sources are reliably integrated into the power system. Table A-1 summarizes these entities and their responsibilities. In the Energy Policy Act of 2005 (EPACT05; P.L. 109-58 ), Congress gave FERC responsibility for reliability of the grid through the setting and enforcement of electric reliability standards. These standards are developed by NERC and approved by FERC in the United States. NERC has set over 100 reliability standards that cover all timescales of reliability planning. Congress gave NERC authority to enforce reliability standards in EPACT05. Per statute, NERC has delegated this authority to the Regional Entities shown in Figure A-2 . The jurisdiction for enforcing compliance with reliability standards includes "all users, owners and operators of the bulk-power system" within the contiguous United States. Separate from the tasks of setting and enforcing reliability standards is the task of reliably operating the power system in real time. Per NERC's reliability standards, balancing authorities carry most of the responsibility for matching generation levels with electricity demand. Balancing authorities can have different geographic footprints. RTOs act as balancing authorities and they may have a footprint spanning multiple states. Other balancing authorities might have a footprint spanning an area within a single state. Another class of entities with operational responsibilities are reliability coordinators. A reliability coordinator may operate over larger geographic areas than balancing authorities and can overrule real-time decisions by balancing authorities to preserve the larger scale power system reliability. RTOs typically also act as reliability coordinators. NERC has certified 66 balancing authorities and 11 reliability coordinators in the United States. Summary:	null	96	32,359	32,361	32,361	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Economic factors, new technologies, environmental concerns and associated regulatory policies, and other developments are changing the energy sources used to generate electricity in the United States. One notable change is increased generation from variable renewable energy (VRE) sources such as wind and solar. According to the U.S. Energy Information Administration (EIA), combined generation from wind and solar sources increased from 1% of total electricity generation in 2008 to 9% of total electricity generation in 2018. These sources have weather-dependent availability, meaning that changing weather patterns can change available electricity supply from those sources. In contrast, conventional sources for electricity generation, such as coal, natural gas, or nuclear energy, are usually available under normal weather conditions. Power system operators have adjusted existing reliability standards and planning practices to accommodate weather-dependent wind and solar sources. Further adjustments are being discussed as generation from wind and solar sources continue to grow. Congress required the setting and enforcement of electric reliability standards in the Energy Policy Act of 2005 (EPACT05; P.L. 109-58 ). These standards are developed by the North American Electric Reliability Corporation (NERC) and approved by the Federal Energy Regulatory Commission (FERC) in the United States. These mandatory standards apply to the bulk power system, which is comprised mostly of large-scale generators and electricity transmission systems. Small-scale generators (e.g., rooftop solar electricity generation), publicly owned utilities, and local electricity distribution systems are generally under the jurisdiction of state public utility regulatory commissions (PUCs). To date, generation from wind and solar sources does not appear to be causing electric reliability issues at the national level. NERC's 2018 annual report on reliability showed that, of the 13 metrics it uses to assess reliability, 9 were stable or improving over the 2013-2017 period and 4 showed trends that were, at least partly, inconclusive. Of the four metrics with inconclusive trends, three improved over this period for a subset of bulk power system components. Data from NERC also indicate that reliability performance is currently stable in regions such as the Midwest and California where the shares of generation from wind and solar sources are above the national average. Questions remain about how higher levels of generation from wind and solar sources might impact electric reliability moving forward. This report provides background on reliability planning in the United States with an emphasis on the effects of daily and seasonal variability in wind and solar sources on the bulk power system. Members of Congress might consider how reliability could be impacted if generation from wind and solar sources increases, as many analysts expect. Other reliability concerns, such as cyber and physical security, small-scale generators, and local distribution networks, may be of interest to Congress but are not discussed at length in this report. Electric Power Sector Overview As shown in Figure 1 the electric power sector consists primarily of three systems. The generation system consists of power plants that generate electricity. The transmission system consists of high voltage transmission lines that move power across long distances. The distribution systems make final delivery of electricity to homes and businesses. This report will refer to the combined generation and transmission systems as the bulk power system, following the definition Congress established in EPACT05: The term "bulk-power system" meansâ(a) facilities and control systems necessary for operating an interconnected electric energy transmission network (or any portion thereof); and (b) electric energy from generation facilities needed to maintain transmission system reliability. The term does not include facilities used in the local distribution of electric energy. Notably, the discussion in this report generally excludes distributed energy resources such as rooftop solar electricity generation. These resources might pose separate reliability challenges that Congress might choose to consider. Ownership structures for bulk power system components vary across the country. In some regions, shown in Figure 2 , competitive markets exist for wholesale electric power, and regional transmission organizations (RTOs) and independent system operators (ISOs) manage the generation and transmission components of the power system. In RTO regions, electricity generators compete to sell power to distribution utilities. The RTO manages an auction process to select the sources for generation that distribution utilities resell to end-use customers. The RTO is also responsible for managing the transmission system and overseeing reliability within its boundaries. In RTO regions, market signals primarily determine investment decisions. Some RTOs operate separate auction processes specifically for essential reliability services. According to FERC, two-thirds of U.S. electricity demand comes from RTO regions. In non-RTO regions, vertically integrated electric utilities are largely responsible for power generation, transmission, and distribution of electricity to end-use customers. These utilities are regulated as natural monopolies and, unlike utilities in RTO regions, do not face competition for generation and transmission services. These utilities may also take responsibility for some aspects of reliability as discussed in the Appendix . State regulators generally oversee these utility operations and are responsible for authorizing new investments, including those related to reliability. Even in RTO regions, municipal utilities and rural electric cooperatives may own generation and transmission system components and oversee their operation. These systems and operation are generally outside of federal and state regulatory jurisdiction. What Is Electric Reliability? A colloquial definition of electric reliability is "having power when it is needed." Operators of bulk power system components, though, require specific and highly technical definitions for reliability. For purposes of regulation, these definitions are provided in the form of NERC reliability standards. NERC develops individual standards for each set of power system components, which may include separate standards covering different reliability timescales for each set of components. As NERC defines "reliability standard," it includes requirements for the operation of existing Bulk-Power System facilities, including cybersecurity protection, and the design of planned additions or modifications to such facilities to the extent necessary to provide for Reliable Operation of the Bulk-Power System, but the term does not include any requirement to enlarge such facilities or to construct new transmission capacity or generation capacity. When all bulk power system components meet reliability standards, NERC expects the vast majority of individuals to have the full amount of electricity they desire. NERC reliability standards do not apply to local electricity distribution system components and operations (see discussion in text box, "Distribution System Reliability"), so localized outages could still occur when reliability standards are met. An analysis found that from 2008 to 2014, upwards of 90% of power outages originated in local distribution systems. This measure includes major events (e.g., hurricanes), but may not capture the full scope or severity of large-scale outages. NERC's reliability standards are meant to ensure an Adequate Level of Reliability (ALR) for the bulk power system during normal operating conditions and following localized disturbances such as lightning strikes. For economic reasons, some risk of occasional power loss is accepted in reliability planning. A common goal is to limit outages to no more than 1 day every 10 years under normal operating conditions. Achieving ALR is not the same goal as preventing all brownouts and blackouts. Bulk power system outages could still occur when reliability standards are fully met. These outages might follow a major event such as a hurricane affecting large areas of the bulk power system. Generally, factors that increase uncertainty reduce reliability, and factors that reduce uncertainty increase reliability. Wind and solar are types of variable renewable energy sources of electricity, and weather is a key source of uncertainty for forecasts of generation from these sources. In contrast, conventional sources such as coal and nuclear have long-lasting, on-site fuel supplies that reduce the uncertainty about their availability. This difference has raised questions about how to integrate large amounts of VRE sources into the existing bulk power system, since it was not originally designed to accommodate large amounts of weather-dependent sources of electricity. Figure 3 shows typical patterns for electricity generation for wind and solar sources in the United States. Wind generation tends to peak overnight and during winter months. Solar generation, on the other hand, tends to be highest during the middle of the day and during the summer. Though these typical patterns are well established for most of the United States, actual generation from wind and solar sources at any particular moment will depend upon specific weather conditions. Changing Electricity Generation Profile The electric power sector is increasing its use of sources associated with more uncertainty in availability. According to the U.S. Energy Information Administration, combined generation from wind and utility-scale solar sources increased from 1% of total electricity generation in 2008 to 8% of total electricity generation in 2018. Of the generation in 2018 from wind and utility-scale solar sources, 80% came from wind. Conventional sources such as coal, natural gas, and nuclear comprised a large majority of generation over this time period. The annual share of generation from different sources from 2008 to 2018 in shown in Figure 4 . National-level data are not indicative of how generation from wind and solar sources varies across the country. Similarly, annual data do not show how electricity generation varies throughout the day or during different seasons. For example, during brief periods in some regions, wind and solar sources have provided a majority of the energy for electricity generation. Some examples are Generation from wind sources supplied 56% of electricity demand in ERCOT, the RTO covering most of Texas, at 3:10 am on January 19, 2019. Generation from solar sources supplied 59% of electricity demand in CAISO, the RTO covering most of California, at 2:45 pm on March 16, 2019. Generation from wind supplied 67.3% of electricity demand in SPP, the RTO covering many central states, at 1:25 am on April 27, 2019. These events all set records for maximum share of generation from renewable sources, and the bulk power system maintained reliability during them. Some advocates for increased use of wind and solar sources have pointed to events like these as evidence that VRE sources can be used to an even greater degree without impacting reliability. Extrapolating these events to scenarios of correspondingly high national levels of generation from wind and solar sources, however, is complicated by several factors. First, these events were all short lived, typically five minutes or less. Further, these events all occurred when electricity demand was relatively low, namely weekend days during cool months. During times of the year when electricity demand is high, such as the summer cooling season, the share of electricity generation from renewable sources is lower. For example, SPP has reported that during its peak demand hours in 2016, wind supplied 11% of generation while conventional sources such as coal (47%) and natural gas (33%) supplied the majority of electricity. The seasonality of VRE availability also likely contributed to these record-setting events, especially for wind, which tends to have maximum generation during winter and spring months. Balancing Variable Renewable Energy Electricity is essentially generated as a just-in-time commodity, due to limited energy storage capacities. If electricity supply and demand differ by too much, system components could be damaged, leading to system instability or potential failure. The operations that keep electricity supply and demand within acceptable levels are known as balancing. Balancing involves increasing or decreasing output from generators according to system conditions over timescales of minutes to hours, and it is a critical aspect of maintaining reliability. Balancing authorities, discussed in the Appendix , issue orders to generators to change their output as needed to maintain reliability. Balancing authorities can be utilities, or RTOs can act as balancing authorities in the regions where they exist. The rules for selecting which generators must increase or decrease output typically reflect an approach known as security-constrained economic dispatch (SCED). Under SCED, system operators ensure that electricity is produced at the lowest overall cost while respecting any transmission or operational constraints. When generation from a low-cost source would jeopardize reliability, a higher-cost source is used. In other words, SCED has two goals: affordability and reliability. SCED favors sources with low operating costs, and wind and solar sources do not have to pay for fuel. As a result, wind and solar sources typically generate the maximum amount of electricity they can at any moment. Balancing typically involves quickly increasing or decreasing output from other sources in response to variable output from wind and solar sources. The capability to quickly change output is known as ramping, and electricity sources differ in their ramping capability. System operators use a variety of electricity sources to balance generation from wind and solar sources. Some may be more commonly used in certain regions of the country, depending on local factors. Each has different benefits and limitations, some of which are summarized below. Reciprocating internal combustion engines (RICE) have seen an increase in installed capacity since 2000, partly in response to higher levels of generation from wind and solar sources. These sources have high ramping capabilities and use mature technologies. They usually use natural gas or fuel oil as fuel, so they have associated fuel costs and environmental impacts. Steam turbines, usually fueled by coal or nuclear energy , have historically been operated at steady, high output levels, barring maintenance needs, because that is the most efficient and lowest cost operational mode for them. These sources are capable of ramping to some extent. This operational mode may provide revenue for certain sources located in regions of the country with low wholesale electricity prices. It might also result in higher costs for electricity from these sources, compared to when they are not ramped. Wind and solar sources located in one area can balance wind and solar sources in other areas, since it is rare to have cloudy skies or calm winds over broad regions of the country simultaneously. This could have the benefit of using sources with zero fuel costs and zero emissions for balancing; however, existing electricity transmission system constraints limit the extent to which this is possible. Energy storage can be used for balancing because it stores electricity during periods of high supply and then provides electricity when supply is low. Many experts also see storage as a way to address the daily variability shown in Figure 3 and thereby expand the utilization of installed wind and solar sources. Many energy storage types are expensive and not currently deployed in large amounts. Energy storage can be co-located with wind or solar generators, or it can be located at other sites in the power system or the distribution system. Demand response, sometimes called demand-side management, involves adjusting electricity demand in response to available supply. This is counter to how the power system has historically been operated, but has become more commonly used. Demand response includes programs in which electricity consumers voluntarily reduce their usage in exchange for financial compensation. Demand response can be a low-cost balancing option because it does not require electricity generation; however, it comes at a social cost because consumers do not use electricity at their preferred time.The electric power sector is working to improve the use of weather and power forecasting in system balancing. For example, MISO changed its wholesale electricity market rules in 2011 to create a Dispatchable Intermittent Resources program. This program allows wind sources to make use of their own generation forecasts and offer generation at five-minute intervals. Previously, offers had to be made on an hourly basis. This was creating inefficiencies in using wind sources since their output can vary over the course of an hour. Improved forecasting could result in increased use of low-cost wind and solar sources, but forecasting methodologies are still being optimized for this purpose. The above considerations apply to bulk power system balancing today. Technological or policy developments could alter how system balancing is conducted in the future. Additionally, if wind and solar sources provided even larger shares of overall generation, new benefits or limitations for each balancing source type could emerge. Federal Government Activities Affecting Reliability and Balancing Work at the federal level to address reliability needs associated with increased use of wind and solar sources has been underway for some time. For example, NERC created a task force in December 2007 to study the integration of VRE and identify gaps in reliability standards. The federal government undertakes actions in addition to the development and enforcement of reliability standards that affect electric reliability. FERC regulates interstate electricity transmission, which can be a key determinant of what sources are available to balance wind and solar. FERC also regulates wholesale electricity markets in most regions of the country. Market rules, including how SCED is implemented, can influence which individual generators are used for system balancing. Market prices can directly affect project revenues and influence investment decisions. Additionally, Congress funds projects and programs that support technology development and deployment, including for sources and operations that improve reliability. Some examples demonstrate the breadth of federal activities related to reliability. In EPACT05, Congress created Section 219 of the Federal Power Act that directs FERC to establish financial incentives for certain electricity transmission investments. FERC's resulting rule became effective in 2006 and includes provisions allowing higher rates of return, accelerated depreciation, and full cost recovery, all for investments and activities that FERC approves on a case-by-case basis. Transmission investment has increased since the passage of EPACT05, although there may be many factors driving this investment. On March 21, 2019, FERC opened an inquiry on potential changes to its transmission incentive policy. In 2011, FERC issued a rule, Order No. 1000, revising requirements related to new transmission projects. Among other revisions, Order No. 1000 increased the weight given to achieving public policy requirements when FERC considers approval of transmission projects. An example of a public policy requirement might be a state requirement that a specified share of electricity sales come from renewable sources, a policy commonly known as a renewable portfolio standard. New transmission capacity is often needed to access and balance wind and solar sources. Several FERC orders demonstrate how market rules are changing in response to increased need for balancing and ramping. Order No. 745 allows demand response to earn compensation from wholesale electricity markets for providing energy services to balance the power system in day-ahead and real-time markets. Order No. 841 allows energy storage systems to earn compensation from wholesale electricity markets for providing any energy, capacity, and essential reliability services they are capable of providing. Implementation of Order No. 841 might lead to greater deployment of energy storage which could improve balancing. Various grant programs administered by the Department of Energy (DOE) have supported the development of new technologies that can balance wind and solar sources or support reliability in other ways. These include research and development into electricity generators; wind forecast models and methodology; power electronics for solar sources; and standards for interconnection into the bulk power system. DOE's Office of Energy Efficiency and Renewable Energy (EERE) has funded research meant to improve short-term weather forecasting specifically related to wind power forecasts in two Wind Forecast Improvement Projects. DOE reports that advances made during this research include improved observations of meteorological data and improved methodologies for using those data in wind forecasts. Potential Issues for Congress Congress has held hearings related to the changes in the electricity generation profile of the country, and some Members raised concerns about reliability during these hearings. Members may continue to examine reliability issues moving forward, in light of projections that wind and solar will become an increasingly larger share of electricity generation. For example, EIA's projection of existing law and regulations shows wind and solar sources contributing 23% of electricity generation in 2050. Members may also choose to include reliability as part of any debate about policies to increase the generation from wind and solar sources. Preparing for higher levels of generation from wind and solar might require new approaches to maintaining electric reliability. The existing regulatory framework can accommodate some changes since FERC and NERC have authority to initiate development of new reliability standards. For example, NERC has raised the issue of whether it should develop new reliability metrics in light of the increasing use of VRE for electricity generation. In addition to its capacity supply assessment, NERC's Reliability Assessment Subcommittee should lead the electric industry in developing a common approach and identify metrics to assess energy adequacy. As identified in this assessment, the changing resource mix can alter the energy and availability characteristics of the generation fleet. Additional analysis is needed to determine energy sufficiency, particularly during off-peak periods and where energy-limited resources are most prominent. Congress could choose to provide guidance for FERC and NERC activities in this area. Congress could also assess whether the existing regulatory framework is sufficient to maintain reliability if generation from wind and solar sources increase above current projections. One area of discussion is the siting and approval of transmission projects, particularly those that might result in enhanced availability of wind and solar sources for system balancing. Currently, the siting of electricity transmission facilities is largely left to the states. Section 1221 of EPACT05 directs FERC to issue permits for the construction or modification of transmission facilities in certain circumstances in areas designated by the Secretary of Energy as "National Interest Electric Transmission Corridors." This authority was to be exercised only if the relevant state agency lacks the authority to permit the transmission facilities or has "withheld approval for more than one year." Shortly after passage of EPACT05, DOE set out to designate the National Interest Electric Transmission Corridors and FERC set up a framework for permitting transmission facilities on those corridors. However, federal courts vacated both agencies' actions, and neither agency has taken any significant action pursuant to their Section 1221 authority since that time. As noted above, most power outages occur on local electricity distribution systems, and these are regulated by state or local governments. Congress could consider expanding federal activities affecting distribution system reliability. This might involve studies of the factors (e.g., weather, aging infrastructure, VRE) that result in power outages. Such activities might also include federal financial support for projects or practices that improve reliability of distribution systems or encouraging new operational regimes such as independent distribution system operators (see earlier discussion of this issue in text box, "Distribution System Reliability"). Congress might also consider acting on the emerging and related issue of electric resilience. Some support for an enhanced federal role in electricity system resilience exists. For example, the National Academy recommends Congress and the Department of Energy leadership should sustain and expand the substantive areas of research, development, and demonstration that are now being undertaken by the Department of Energy's Office of Electricity Delivery and Energy Reliability and Office of Energy Efficiency and Renewable Energy, with respect to grid modernization and systems integration, with the explicit intention of improving the resilience of the U.S. power grid. Many sources currently used to balance wind and solar have received federal financial support in the past, such as tax credits, grants to states or other entities, and DOE research programs. Congress might consider continuing or expanding this type of support if current activities affecting reliability were deemed insufficient. Appendix. Key Reliability Concepts for Policymakers Electric reliability encompasses short-term and long-term aspects as shown in Figure A-1 . System operators and reliability planners, governed by reliability standards from the North American Electric Reliability Corporation (NERC), have different practices in place to address reliability over these various timescales. Reliability over Different Timescales At the smallest timescales, typically seconds or less, are factors such as frequency control, voltage support, and ramping capability. These are often automatic responses of power system components. NERC refers to these factors as Essential Reliability Services (ERS), and they are sometimes called ancillary services. Historically, many ERS were provided as a natural consequence of the physical operational characteristics of steam turbines. Wind and solar generators do not inherently provide ERS in the same way. They require additional electrical components to do so, and these are being more commonly deployed. In some cases, FERC has mandated the use of technologies that allow wind and solar to provide ERS. Balancing, described in the main body of this report, typically occurs over minutes to hours. Unlike ERS, balancing typically requires action by a system operator. Long-term aspects of reliability relate to planning for energy and transmission needs over months to years. This is sometimes referred to as resource adequacy. Policy goals, such as preferences for certain electricity sources over others, tend to influence long-term reliability planning more than shorter-term reliability aspects. Planning for resource adequacy involves forecasts of electricity supply and demand. For variable renewable energy (VRE) like wind and solar sources, these forecasts require assumptions about wind and solar availability. Reliability planners commonly use planning reserve margins to assess whether planned generation and transmission capacity will be sufficient to supply electricity demand. A planning reserve margin is the difference between expected peak demand and available generating capacity at the peak period in each forecast year. It is often expressed as a percentage where the difference is normalized by the peak demand value. According to NERC, reserve margins "in the range of 10-18 percent" are typically sufficient for ensuring reliability, although "by itself the expected Planning Reserve Margin cannot communicate how reliable a system is." Reserve margins are calculated months or years ahead as part of assessments of whether and where reliability concerns might exist. High planning reserve margins may indicate a likelihood that reliability will be maintained, but, especially when variable sources are present, they might not be predictive. That is, a high planning reserve margin does not guarantee reliability and a low planning reserve margin does not guarantee power disruptions. At the national level, NERC annually assesses resource adequacy over a 10-year forecasting window. NERC uses historic VRE generation data in its assessment and has noted "methods for determining the on-peak availability of wind and solar are improving with growing performance data." In its 2018 Long-Term Reliability Assessment, NERC recommended enhancing its reliability assessment process to account for events, like those noted in the " Changing Electricity Generation Profile " section above, during which VRE sources provided large shares of generation during off-peak periods. Solar eclipses, though rare events, provide opportunities to test the ability of grid operators to reliably operate the grid when solar sources are unavailable. The August 21, 2017, solar eclipse that affected many parts of the United States was one such opportunity. According to NERC, no reliability issues developed during the event, in part because of the measures implemented in advance by the electric industry. Electric Reliability Regulatory Framework Current electric reliability planning is a coordinated process involving multiple entities and spanning multiple jurisdictions. These reliability planning organizations share responsibility for, among other responsibilities, ensuring electricity from wind and solar sources are reliably integrated into the power system. Table A-1 summarizes these entities and their responsibilities. In the Energy Policy Act of 2005 (EPACT05; P.L. 109-58 ), Congress gave FERC responsibility for reliability of the grid through the setting and enforcement of electric reliability standards. These standards are developed by NERC and approved by FERC in the United States. NERC has set over 100 reliability standards that cover all timescales of reliability planning. Congress gave NERC authority to enforce reliability standards in EPACT05. Per statute, NERC has delegated this authority to the Regional Entities shown in Figure A-2 . The jurisdiction for enforcing compliance with reliability standards includes "all users, owners and operators of the bulk-power system" within the contiguous United States. Separate from the tasks of setting and enforcing reliability standards is the task of reliably operating the power system in real time. Per NERC's reliability standards, balancing authorities carry most of the responsibility for matching generation levels with electricity demand. Balancing authorities can have different geographic footprints. RTOs act as balancing authorities and they may have a footprint spanning multiple states. Other balancing authorities might have a footprint spanning an area within a single state. Another class of entities with operational responsibilities are reliability coordinators. A reliability coordinator may operate over larger geographic areas than balancing authorities and can overrule real-time decisions by balancing authorities to preserve the larger scale power system reliability. RTOs typically also act as reliability coordinators. NERC has certified 66 balancing authorities and 11 reliability coordinators in the United States.	Summary:	gov_report	1,024	null	87
crs_R45342	crs_R45342_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The Bureau of Reclamation (Reclamation), part of the Department of the Interior (DOI), operates the multipurpose federal Central Valley Project (CVP) in California, one of the world's largest water storage and conveyance systems. The CVP runs approximately 400 miles in California, from Redding to Bakersfield ( Figure 1 ). It supplies water to hundreds of thousands of acres of irrigated agriculture throughout the state, including some of the most valuable cropland in the country. It also provides water to selected state and federal wildlife refuges, as well as to some municipal and industrial (M&I) water users. This report provides information on hydrologic conditions in California and their impact on state and federal water management, with a focus on deliveries related to the federal CVP. It also summarizes selected issues for Congress related to the CVP. Recent Developments The drought of 2012-2016, widely considered to be among California's most severe droughts in recent history, resulted in major reductions to CVP contractor allocations and economic and environmental impacts throughout the state. These impacts were of interest to Congress, which oversees federal operation of the CVP. Although the drought ended with the wet winter of 2017, many of the water supply controversies associated with the CVP predated those water shortages and remain unresolved. Absent major changes to existing hydrologic, legislative, and regulatory baselines, most agree that at least some water users are likely to face ongoing constraints to their water supplies. Due to the limited water supplies available, proposed changes to the current operations and allocation system are controversial. As a result of the scarcity of water in the West and the importance of federal water infrastructure to the region, western water issues are regularly of interest to many lawmakers. Legislation enacted in the 114 th Congress (Title II of the Water Infrastructure Improvements for the Nation [WIIN] Act; P.L. 114-322 ) included several CVP-related sections. These provisions directed pumping to "maximize" water supplies for the CVP (including pumping or "exports" to CVP water users south of the Sacramento and San Joaquin Rivers' confluence with the San Francisco Bay, known as the Bay-Delta or Delta ) in accordance with applicable biological opinions (BiOps) for project operations. They also allowed for increased pumping during certain storm events generating high flows, authorized actions to facilitate water transfers, and established a new standard for measuring the effects of water operations on species. In addition to operational provisions, the WIIN Act authorized funding for construction of new federal and nonfederal water storage projects. CVP projects are among the most likely recipients of this funding. Due to increased precipitation and disagreements with the state, among other factors, the WIIN Act's CVP operational authorities did not yield significant new water exports south of the Delta in 2017 and 2018. However, the authorities may be more significant in years of limited precipitation and thus may yield increased supplies in the future. Although use of the new operational authorities was limited, Reclamation received funding for WIIN Act-authorized water storage project design and construction in FY2017-FY2019; a significant amount of this funding has gone to CVP-related projects. Several state and federal proposals are also currently under consideration and have generated controversy for their potential to significantly alter CVP operations. In mid-2018, the State of California proposed revisions to its Bay-Delta Water Quality Control Plan. These changes would require that more flows from the San Joaquin and Sacramento Rivers reach the California Bay-Delta for water quality and fish and wildlife enhancement (and would thus further restrict water supplies for other users). At the same time, the Trump Administration is exploring options to increase CVP water supplies for users. Background California's Central Valley encompasses almost 20,000 square miles in the center of the state ( Figure 1 ). It is bound by the Cascade Range to the north, the Sierra Nevada to the east, the Tehachapi Mountains to the south, and the Coast Ranges and San Francisco Bay to the west. The northern third of the valley is drained by the Sacramento River, and the southern two-thirds of the valley are drained by the San Joaquin River. Historically, this area was home to significant fish and wildlife populations. The CVP originally was conceived as a state project; the state studied the project as early as 1921, and the California state legislature formally authorized it for construction in 1933. After it became clear that the state was unable to finance the project, the federal government (through the U.S. Army Corps of Engineers, or USACE) assumed control of the CVP as a public works construction project authority provided under the Rivers and Harbors Act of 1935. The Franklin D. Roosevelt Administration subsequently transferred the project to Reclamation. Construction on the first unit of the CVP (Contra Costa Canal) began in October 1937, with water first delivered in 1940. Additional CVP units were completed and came online over time, and some USACE-constructed units also have been incorporated into the project. The New Melones Unit was the last unit of the CVP to come online; it was completed in 1978 and began operations in 1979. The CVP made significant changes to California's natural hydrology to develop water supplies for irrigated agriculture, municipalities, and hydropower, among other things. Most of the CVP's major units, however, predated major federal natural resources and environmental protection laws such as the Endangered Species Act (ESA; 87 Stat. 884. 16 U.S.C. §§1531-1544) and the National Environmental Policy Act (NEPA; 42 U.S.C. §§4321 et seq), among others. Thus, much of the current debate surrounding the project revolves around how to address the project's changes to California's hydrologic system that were not major considerations when it was constructed. Today, CVP water serves a variety of different purposes for both human uses and fish and wildlife needs. The CVP provides a major source of support for California agriculture, which is first in the nation in terms of farm receipts. CVP water supplies irrigate more than 3 million acres of land in central California and support 7 of California's top 10 agricultural counties. In addition, CVP M&I water provides supplies for approximately 2.5 million people per year. CVP operations also are critical for hydropower, recreation, and fish and wildlife protection. In addition to fisheries habitat, CVP flows support wetlands, which provide habitat for migrating birds. Overview of the CVP and California Water Infrastructure The CVP ( Figure 1 ) is made up of 20 dams and reservoirs, 11 power plants, and 500 miles of canals, as well as numerous other conduits, tunnels, and storage and distribution facilities. In an average year, it delivers approximately 5 million acre-feet (AF) of water to farms (including some of the nation's most valuable farmland); 600,000 AF to M&I users; 410,000 AF to wildlife refuges; and 800,000 AF for other fish and wildlife needs, among other purposes. A separate major project owned and operated by the State of California, the State Water Project (SWP), draws water from many of the same sources as the CVP and coordinates its operations with the CVP under several agreements. In contrast to the CVP, the SWP delivers about 70% of its water to urban users (including water for approximately 25 million users in the San Francisco Bay, Central Valley, and Southern California); the remaining 30% is used for irrigation. At their confluence, the Sacramento and San Joaquin Rivers flow into the San Francisco Bay (the Bay-Delta, or Delta). Operation of the CVP and SWP occurs through the storage, pumping, and conveyance of significant volumes of water from both river basins (as well as trans-basin diversions from the Trinity River Basin in Northern California) for delivery to users. Federal and state pumping facilities in the Delta near Tracy, CA, export water from Northern California to Central and Southern California and are a hub for CVP operations and related debates. In the context of these controversies, north of Delta (NOD) and south of Delta (SOD) are important categorical distinctions for water users. CVP storage is spread throughout Northern and Central California. The largest CVP storage facility is Shasta Dam and Reservoir in Northern California ( Figure 2 ), which has a capacity of 4.5 million AF. Other major storage facilities, from north to south, include Trinity Dam and Reservoir (2.4 million AF), Folsom Dam and Reservoir (977,000 AF), New Melones Dam and Reservoir (2.4 million AF), Friant Dam and Reservoir (520,000 AF), and San Luis Dam and Reservoir (1.8 million AF of storage, of which half is federal and half is nonfederal). The CVP also includes numerous water conveyance facilities, the longest of which are the Delta-Mendota Canal (which runs for 117 miles from the federally operated Bill Jones pumping plant in the Bay-Delta to the San Joaquin River near Madera) and the Friant-Kern Canal (which runs 152 miles from Friant Dam to the Kern River near Bakersfield). Non-CVP water storage and infrastructure also is spread throughout the Central Valley and in some cases is integrated with CVP operations. Major non-CVP storage infrastructure in the Central Valley includes multiple storage projects that are part of the SWP (the largest of which is Oroville Dam and Reservoir in Northern California), as well as private storage facilities (e.g., Don Pedro and Exchequer Dams and Reservoirs) and local government-owned dams and infrastructure (e.g., O'Shaughnessy Dam and Hetch-Hetchy Reservoir and Aqueduct, which are owned by the San Francisco Public Utilities Commission). In addition to its importance for agricultural water supplies, California's Central Valley also provides valuable wetland habitat for migratory birds and other species. As such, it is home to multiple state, federal, and private wildlife refuges north and south of the Delta. Nineteen of these refuges (including 12 refuges within the National Wildlife Refuge system, 6 State Wildlife Areas/Units, and 1 privately managed complex) provide managed wetland habitat that receives water from the CVP and other sources. Five of these units are located in the Sacramento River Basin (i.e., North of the Delta), 12 are in the San Joaquin River Basin, and the remaining 2 are in the Tulare Lake Basin. Central Valley Project Water Contractors and Allocations In normal years, snowpack accounts for approximately 30% of California's water supplies and is an important factor in determining CVP and SWP allocations. Water from snowpack typically melts in the spring and early summer, and it is stored and made available to meet water needs throughout the state in the summer and fall. By late winter, the state's water supply outlook typically is sufficient for Reclamation to issue the amount of water it expects to deliver to its contractors. At that time, Reclamation announces estimated deliveries for its 250 CVP water contractors in the upcoming water year. More than 9.5 million AF of water per year is potentially available from the CVP for delivery based on contracts between Reclamation and CVP contractors. However, most CVP water contracts provide exceptions for Reclamation to reduce water deliveries due to hydrologic conditions and other conditions outside Reclamation's control. As a result of these stipulations, Reclamation regularly makes cutbacks to actual CVP water deliveries to contractors due to drought and other factors. Even under normal hydrological circumstances, the CVP often delivers much less than the maximum contracted amount of water; since the early 1980s, an average of about 7 million AF of water has been made available to CVP contractors annually (including 5 million AF to agricultural contractors). However, during drought years deliveries may be significantly less. In the extremely dry water years of 2012-2015, CVP annual deliveries averaged approximately 3.45 million AF. CVP contractors receive varying levels of priority for water deliveries based on their water rights and other related factors, and some of the largest and most prominent water contractors have a relatively low allocation priority. Major groups of CVP contractors include water rights contractors (i.e., senior water rights holders such as the Sacramento River Settlement and San Joaquin River Exchange Contractors, see box below), North and South of Delta water service contractors, and Central Valley refuge water contractors. The relative locations for these groups are shown in Figure 1 . The largest contract holders of CVP water by percentage of total contracted amounts are Sacramento River Settlement Contractors, located on the Sacramento River. The second-largest group are SOD water service contractors (including Westlands Water District, the CVP's largest contractor), located in the area south of the Delta. Other major contractors include San Joaquin River Exchange Contractors, located west of the San Joaquin River and Friant Division contractors, located on the east side of the San Joaquin Valley. Central Valley refuges and several smaller contractor groups (e.g., Eastside Contracts, In-Delta-Contra Costa Contracts, and SOD Settlement Contracts) also factor into CVP water allocation discussions. Figure 3 depicts an approximate division of maximum available CVP water deliveries pursuant to contracts with Reclamation. The largest contractor groups and their relative delivery priority are discussed in more detail in the Appendix to this report. CVP Allocations Reclamation provided its allocations for the 2019 water year in a series of announcements in early 2019. As was the case in 2018, over the course of the spring Reclamation increased its allocations for some contractors from initially announced levels. Most CVP contractor groups were allocated 100% of their maximum contracted amounts in 2019. One major exception is SOD agricultural water service contractors, who were allocated 70% of their contracted supplies. Prior to receiving a full allocation in 2017, the last time these contractors received a 100% allocation was 2006. They have received their full contract allocations only four times since 1990. State Water Project Allocations The other major water project serving California, the SWP, is operated by California's Department of Water Resources (DWR). The SWP primarily provides water to M&I users and some agricultural users, and it integrates its operations with the CVP. Similar to the CVP, the SWP has considerably more contracted supplies than it typically makes available in its deliveries. SWP contracted entitlements are 4.17 million AF, but average annual deliveries are typically considerably less than that amount. SWP water deliveries were at their lowest point in 2014 and 2015, and they were significantly higher in the wet year of 2017. SWP water supply allocations for water years 2012-2019 are shown in Table 2 . Combined CVP/SWP Operations The CVP and SWP are operated in conjunction under the 1986 Coordinated Operations Agreement (COA), which was executed pursuant to P.L. 99-546 . COA defines the rights and responsibilities of the CVP and SWP with respect to in-basin water needs and provides a mechanism to account for those rights and responsibilities. Despite several prior efforts to review and update the agreement to reflect major changes over time (e.g., water delivery reductions pursuant to the Central Valley Project Improvement Act, the Endangered Species Act requirements, and new Delta Water Quality Standards, among other things), the 1986 agreement remains in place. Combined CVP and SWP exports (i.e., water transferred from north to south of the Delta) is of interest to many observers because it reflects trends over time in the transfer of water from north to south (i.e., exports ) by the two projects, in particular through pumping. Exports of the CVP and SWP, as well as total combined exports since 1978, have varied over time ( Figure 4 ). Most recently, combined exports dropped significantly during the 2012-2016 drought but have rebounded since 2016. Prior to the drought, overall export levels had increased over time, having averaged more from 2001 to 2011 than over any previous 10-year period. The 6.42 million AF of combined exports in 2017 was the second most on record, behind 6.59 million AF in 2011. Over time, CVP exports have decreased on average, whereas SWP exports have increased. Additionally, exports for agricultural purposes have declined as a subset of total exports, in part due to those exports being made available for other purposes (e.g., fish and wildlife). Previously, some observers argued that CVP obligations under COA were no longer proportional to water supplies that the CVP receives from the Delta, thus the agreement should be renegotiated. Dating to 2015, Reclamation and DWR conducted a mutual review of COA but reportedly were unable to agree on revisions. On August 17, 2018, Reclamation provided a Notice of Negotiations to DWR. Following negotiations in the fall of 2018, Reclamation and DWR agreed to an addendum to COA in December 2018. Whereas the original 1986 agreement included a fixed ratio of 75% CVP/25% SWP for the sharing of regulatory requirements associated with storage withdrawals for Sacramento Valley in-basin uses (e.g., curtailments for water quality and species uses), the revised addendum adjusted the ratio of sharing percentages based on water year types ( Table 3 ). The 2018 addendum also adjusted the sharing of export capacity under constrained conditions. Whereas under the 1986 COA, export capacity was shared 50/50 between the CVP and the SWP, under the revised COA the split is to be 60% CVP/40% SWP during excess conditions, and 65% CVP/35% SWP during balanced conditions. Finally, the state also agreed in the 2018 revisions to transport up to 195,000 AF of CVP water through the California Aqueduct, during certain conditions. Constraints on CVP Deliveries Concerns over CVP water supply deliveries persist in part because even in years with high levels of precipitation and runoff, some contractors (in particular SOD water service contractors) have regularly received allocations of less than 100% of their contract supplies. Allocations for some users have declined over time; additional environmental requirements in recent decades have reduced water deliveries for human uses. Coupled with reduced water supplies available in drought years, some have increasingly focused on what can be done to increase water supplies for users. At the same time, others that depend on or advocate for the health of the San Francisco Bay and its tributaries, including fishing and environmental groups and water users throughout Northern California, have argued for maintaining or increasing existing environmental protections (the latter of which likely would further constrain CVP exports). Hydrology and state water rights are the two primary drivers of CVP allocations. However, at least three other regulatory factors affect the timing and amount of water available for delivery to CVP contractors and are regularly the subject of controversy: State water quality requirements pursuant to state and the federal water quality laws (including the Clean Water Act [CWA, 33 U.S.C. §§1251-138]); Regulations and court orders pertaining to implementation of the federal Endangered Species Act (ESA, 87 Stat. 884. 16 U.S.C. §§1531-1544); and Implementation of the Central Valley Project Improvement Act (CVPIA; P.L. 102-575 ). Each of these factors is discussed in more detail below. Water Quality Requirements: Bay-Delta Water Quality Control Plan California sets water quality standards and issues permits for the discharge of pollutants in compliance with the federal CWA, enacted in 1972. Through the Porter-Cologne Act (a state law), California implements federal CWA requirements and authorizes the State Water Resources Control Board (State Water Board) to adopt water quality control plans, or basin plans. The CVP and the SWP affect water quality in the Bay-Delta depending on how much freshwater the projects release into the area as "unimpaired flows" (thereby affecting area salinity levels). The first Water Quality Control Plan for the Bay-Delta (Bay-Delta Plan) was issued by the State Water Board in 1978. Since then, there have been three substantive updates to the plan—in 1991, 1995, and 2006. The plans generally have required the SWP and CVP to meet certain water quality and flow objectives in the Delta to maintain desired salinity levels for in-Delta diversions (e.g., water quality levels for in-Delta water supplies) and fish and wildlife, among other things. These objectives often affect the amount and timing of water available to be pumped, or exported, from the Delta and thus at times result in reduced Delta exports to CVP and SWP water users south of the Delta. The Bay-Delta Plan is currently implemented through the State Water Board's Decision 1641 (or D-1641), which was issued in 1999 and placed responsibility for plan implementation on the state's largest two water rights holders, Reclamation and the California DWR. Pumping restrictions to meet state-set water quality levels—particularly increases in salinity levels—can sometimes be significant. However, the relative magnitude of these effects varies depending on hydrology. For instance, Reclamation estimated that in 2014, water quality restrictions accounted for 176,300 AF of the reduction in pumping from the long-term average for CVP exports. In 2016, Reclamation estimated that D-1641 requirements accounted for 114,500 AF in reductions from the long-term export average. Bay-Delta Plan Update In mid-2018, the State Water Board released the final draft of the update to the 2006 Bay Delta Plan (i.e., the Bay-Delta Plan Update) for the Lower San Joaquin River and Southern Delta. It also announced further progress on related efforts under the update for flow requirements on the Sacramento River and its tributaries. The Bay-Delta Plan Update requires additional flows to the ocean (generally referred to in these documents as "unimpaired flows") from the San Joaquin River and its tributaries (i.e., the Stanislaus, Tuolumne, and Merced Rivers). Under the proposal, the unimpaired flow requirement for the San Joaquin River would be 40% (within a range of 30%-50%); average unimpaired flows currently range from 21% to 40%. The state estimates that the updated version of the plan would reduce water available for human use from the San Joaquin River and its tributaries by between 7% and 23%, on average (depending on the water year type), but it could reduce these water supplies by as much as 38% during critically dry years. A more detailed plan for the Sacramento River and its tributaries also is expected in the future. A preliminary framework released by the state in July 2018 proposed a potential requirement of 55% unimpaired flows from the Sacramento River (within a range of 45% to 65%). According to the State Water Board, if the plan updates for the San Joaquin and Sacramento Rivers are finalized and water users do not enter into voluntary agreements to implement them, the board could take actions to require their implementation, such as promulgation of regulations and conditioning of water rights. Reclamation and its contractors likely would play key roles in implementing any update to the Bay-Delta Plan, as they do in implementing the current plan under D-1641. Pursuant to Section 8 of the Reclamation Act of 1902, Reclamation generally defers to state water law in carrying out its authorities, but the proposed Bay Delta Plan Update has generated controversy. In a July 2018 letter to the State Water Board, the Commissioner of Reclamation opposed the proposed standards for the San Joaquin River, arguing that meeting them would necessitate decreased water in storage at New Melones Reservoir of approximately 315,000 AF per year (a higher amount than estimated by the State Water Board). Reclamation argued that such a change would be contrary to the CVP prioritization scheme as established by Congress. On December 12, 2018, the State Water Board approved the Bay Delta Plan Update in Resolution 1018-0059. According to the state, the plan establishes a "starting point" for increased river flows but also makes allowances for reduced river flows on tributaries where stakeholders have reached voluntary agreements to pursue both flow and "non-flow" measures. The conditions in the Bay-Delta Plan Update would be implemented through water rights conditions imposed by the State Water Board; these conditions are to be implemented no later than 2022. On March 28, 2019, the Department of Justice and DOI filed civil actions in federal and state court against the State Water Board for failing to comply with the California Environmental Quality Act. Endangered Species Act Several species that have been listed under the federal ESA are affected by the operations of the CVP and the SWP. One species, the Delta smelt, is a small pelagic fish that is susceptible to entrainment in CVP and SWP pumps in the Delta; it was listed as threatened under ESA in 1993. Surveys of Delta smelt in 2017 found two adult smelt, the lowest catch in the history of the survey. These results were despite the relatively wet winter of 2017, which is a concern for many stakeholders because low population sizes of Delta smelt could result in greater restrictions on water flowing to users. It also raises larger concerns about the overall health and resilience of the Bay-Delta ecosystem. In addition to Delta smelt, multiple anadromous salmonid species are listed under ESA, including the endangered Sacramento River winter-run Chinook salmon, the threatened Central Valley spring-run Chinook salmon, the threatened Central Valley steelhead, threatened Southern Oregon/Northern California Coast coho salmon, and the threatened Central California Coast steelhead. Federal agencies consult with the U.S. Fish and Wildlife Service (FWS) in DOI or the Department of Commerce's (DOC's) National Marine Fisheries Service (NMFS) to determine if a federal project or action might jeopardize the continued existence of a species listed under ESA or adversely modify its habitat. If an effect is possible, formal consultation is started and usually concludes with the appropriate service issuing a BiOp on the potential harm the project poses and, if necessary, issuing reasonable and prudent measures to reduce the harm. FWS and NMFS each have issued federal BiOps on the coordinated operation of the CVP and the SWP. In addition, both agencies have undertaken formal consultation on proposed changes in the operations and have concluded that the changes, including increased pumping from the Delta, would jeopardize the continued existence of several species protected under ESA. To avoid such jeopardy, the FWS and NMFS BiOps have included Reasonable and Prudent Alternatives (RPAs) for project operations. CVP and SWP BiOps have been challenged and revised over time. Until 2004, a 1993 winter-run Chinook salmon BiOp and a 1995 Delta smelt BiOp (as amended) governed Delta exports for federal ESA purposes. In 2004, a proposed change in coordinated operation of the SWP and CVP (including increased Delta exports), known as OCAP (Operations Criteria and Plan) resulted in the development of new BiOps. Environmental groups challenged the agencies' 2004 BiOps; this challenge resulted in the development of new BiOps by the FWS and NMFS in 2008 and 2009, respectively. These BiOps placed additional restrictions on the amount of water exported via SWP and CVP Delta pumps and other limitations on pumping and release of stored water. The CVP and SWP currently are operated in accordance with these BiOps, both of which concluded that the coordinated long-term operation of the CVP and SWP, as proposed in Reclamation's 2008 Biological Assessment, was likely to jeopardize the continued existence of listed species and destroy or adversely modify designated critical habitat. Both BiOps included RPAs designed to allow the CVP and SWP to continue operating without causing jeopardy to listed species or destruction or adverse modification to designated critical habitat. Reclamation accepted and then began project operations consistent with the FWS and NMFS RPAs, which continue to govern operations. The exact magnitude of reductions in pumping due to ESA restrictions compared to the aforementioned water quality restrictions has varied considerably over time. In absolute terms, ESA-driven reductions typically are greater in wet years than in dry years, but the proportion of ESA reductions relative to deliveries is not necessarily constant and depends on numerous factors. For instance, Reclamation estimated that ESA restrictions accounted for a reduction in deliveries of 62,000 AF from the long-term average for CVP deliveries in 2014 and 144,800 AF of CVP delivery reductions in 2015 (both years were extremely dry). In 2016, ESA reductions accounted for a much larger amount (528,000 AF) in a wet year, when more water is delivered. Some scientists estimate that flows used to protect all species listed under ESA accounted for approximately 6.5% of the total Delta outflow from 2011 to 2016. During the 2012-2016 drought, implementation of the RPAs (which generally limit pumping under specific circumstances and call for water releases from key reservoirs to support listed species) was modified due to temporary urgency change orders (TUCs). These TUCs, issued by the State Water Resources Control Board in 2014 and again in 2015, were deemed consistent with the existing BiOps by NMFS and FWS. Such changes allowed more water to be pumped during certain periods based on real-time monitoring of species and water conditions. DWR estimates that approximately 400,000 AF of water was made available in 2014 for export due to these orders. In August 2016, Reclamation and DWR requested reinitiation of consultation on long-term, system-wide operations of the CVP and the SWP based on new information related to multiple years of drought, species decline, and related data. In December 2017, the Trump Administration gave formal notice of its intent to prepare an environmental impact statement analyzing potential long-term modifications to the coordinated operations of the CVP and the SWP. According to the notice, the actions under consideration will include those with the potential to "maximize" water and power supplies for users and that modify existing regulatory requirements, among other things. The effort is widely viewed as an initial step toward potential long-term changes to CVP operations and existing BiOp requirements. The Biological Assessment (BA) proposing changes for the operation of the CVP and SWP was sent to FWS and NMFS by Reclamation on January 31, 2019. The BA discusses the operational changes proposed by Reclamation and mitigation factors to address listed species. The changes reflect provisions in the WIIN Act and efforts to maximize water supplies for users. The BA also states that nonoperational activities will be implemented to augment and bolster listed fish populations. These activities include habitat restoration and introducing hatchery-bred Delta smelt. Operational changes include increasing flows to take into account additional water from winter storms and increasing base flows when storage levels are higher. The Trump Administration also has indicated its intent to expedite other regulatory changes under ESA. On October 19, 2018, President Trump issued a memorandum that directed DOI and DOC to identify water infrastructure projects in California for which they have responsibilities under ESA. Per the memorandum, the agencies are to identify regulations and procedures that burden the projects and develop a plan to "suspend, revise, or rescind" those regulations. The White House memorandum also directed that the aforementioned joint BiOps be completed by June 15, 2019. Central Valley Project Improvement Act In an effort to mitigate many of the environmental effects of the CVP, Congress in 1992 passed the CVPIA as Title 34 of P.L. 102-575 . The act made major changes to the management of the CVP. Among other things, it formally established fish and wildlife purposes as an official project purpose of the CVP and called for a number of actions to protect, restore, and enhance these resources. Overall, the CVPIA's provisions resulted in a combination of decreased water availability and increased costs for agricultural and M&I contractors, along with new water and funding sources to restore fish and wildlife. Thus, the law remains a source of tension, and some would prefer to see it repealed in part or in full. Some of the CVPIA's most prominent changes to the CVP included directives to double certain anadromous fish populations by 2002 (which did occur); allocate 800,000 AF of "(b)(2)" CVP yield (600,000 AF in drought years) to fish and wildlife purposes; provide water supplies (in the form of "Level 2" and "Level 4" supplies) for 19 designated Central Valley wildlife refuges; establish a fund, the Central Valley Project Restoration Fund (CVPRF), to be financed by water and power users for habitat restoration and land and water acquisitions. Pursuant to prior court rulings since enactment of the legislation, CVPIA (b)(2) allocations may be used to meet other state and federal requirements that reduce exports or require an increase from baseline reservoir releases. Thus, in a given year, the aforementioned export reductions due to state water quality and federal ESA restrictions are counted and reported on annually as (b)(2) water, and in some cases overlap with other stated purposes of CVPIA (e.g., anadromous fish restoration). The exact makeup of (b)(2) water in a given year typically varies. For example, in 2014 (a critically dry year), out of a total of 402,000 AF of (b)(2) water, 176,300 AF (44%) was attributed to export reductions for Bay-Delta Plan water quality requirements. Remaining (b)(2) water was comprised of a combination of reservoir releases classified as CVPIA anadromous fish restoration and NMFS BiOp compliance purposes (163,500 AF) and export reductions under the 2009 salmonid BiOp (62,200 AF). In 2016 (a wet year), 793,000 AF of (b)(2) water included 528,000 AF (66%) of export pumping reductions under FWS and NMFS BiOps and 114,500 AF (14%) for Bay-Delta Plan requirements. The remaining water was accounted for as reservoir releases for the anadromous fish restoration programs, the NMFS BiOp, and the Bay-Delta Plan. Ecosystem Restoration Efforts Development of the CVP made significant changes to California's natural hydrology. In addition to the aforementioned CVPIA efforts to address some of these impacts, three ongoing, congressionally authorized restoration initiatives also factor into federal activities associated with the CVP: The Trinity River Restoration Program (TRRP), administered by Reclamation, attempts to mitigate impacts and restore fisheries impacted by construction of the Trinity River Division of the CVP. The San Joaquin River Restoration Program (SJRRP) is an ongoing effort to implement a congressionally enacted settlement to restore fisheries in the San Joaquin River. The California Bay-Delta Restoration Program aims to restore and protect areas within the Bay-Delta that are affected by the CVP and other activities. In addition to their habitat restoration activities, both the TRRP and the SJRRP involve the maintenance of instream flow levels that use water that was at one time diverted for other uses. Each effort is discussed briefly below. Trinity River Restoration Program TRRP—administered by DOI—aims to mitigate impacts of the Trinity Division of the CVP and restore fisheries to their levels prior to the Bureau of Reclamation's construction of this division in 1955. The Trinity Division primarily consists of two dams (Trinity and Lewiston Dams), related power facilities, and a series of tunnels (including the 10.7-mile tunnel Clear Creek Tunnel) that divert water from the Trinity River Basin to the Sacramento River Basin and Whiskeytown Reservoir. Diversion of Trinity River water (which originally required that a minimum of 120,000 AF be reserved for Trinity River flows) resulted in the near drying of the Trinity River in some years, thereby damaging spawning habitat and severely depleting salmon stocks. Efforts to mitigate the effects of the Trinity Division date back to the early 1980s, when DOI initiated efforts to study the issue and increase Trinity River flows for fisheries. Congress authorized legislation in 1984 ( P.L. 98-541 ) and in 1992 ( P.L. 102-575 ) providing for restoration activities and construction of a fish hatchery, and directed that 340,000 AF per year be reserved for Trinity River flows (a significant increase from the original amount). Congress also mandated completion of a flow evaluation study, which was formalized in a 2000 record of decision (ROD) that called for additional water for instream flows, river channel restoration, and watershed rehabilitation. The 2000 ROD forms the basis for TRRP. The flow releases outlined in that document have in some years been supplemented to protect fish health in the river, and these increases have been controversial among some water users. From FY2013 to FY2018, TRRP was funded at approximately $12 million per year in discretionary appropriations from Reclamation's Fish and Wildlife Management and Development activity. San Joaquin River Restoration Program Historically, the San Joaquin River supported large Chinook salmon populations. After the Bureau of Reclamation completed Friant Dam on the San Joaquin River in the late 1940s, much of the river's water was diverted for agricultural uses and approximately 60 miles of the river became dry in most years. These conditions made it impossible to support Chinook salmon populations upstream of the Merced River confluence. In 1988, a coalition of environmental, conservation, and fishing groups advocating for river restoration to support Chinook salmon recovery sued the Bureau of Reclamation. A U.S. District Court judge eventually ruled that operation of Friant Dam was violating state law because of its destruction of downstream fisheries. Faced with mounting legal fees, considerable uncertainty, and the possibility of dramatic cuts to water diversions, the parties agreed to negotiate a settlement instead of proceeding to trial on a remedy regarding the court's ruling. This settlement was agreed to in 2006 and enacted by Congress in 2010 (Title X of P.L. 111-11 ). The settlement agreement and its implementing legislation form the basis for the SJRRP, which requires new releases of CVP water from Friant Dam to restore fisheries (including salmon fisheries) in the San Joaquin River below Friant Dam (which forms Millerton Lake) to the confluence with the Merced River (i.e., 60 miles). The SJRRP also requires efforts to mitigate water supply delivery losses due to these releases, among other things. In combination with the new releases, the settlement's goals are to be achieved through a combination of channel and structural modifications along the San Joaquin River and the reintroduction of Chinook salmon ( Figure 5 ). These activities are funded in part by federal discretionary appropriations and in part by repayment and surcharges paid by CVP Friant water users that are redirected toward the SJRRP in P.L. 111-11 . Because increased water flows for restoring fisheries (known as restoration flows ) would reduce CVP diversions of water for off-stream purposes, such as irrigation, hydropower, and M&I uses, the settlement and its implementation have been controversial. The quantity of water used for restoration flows and the quantity by which water deliveries would be reduced are related, but the relationship is not necessarily one-for-one, due to flood flows in some years and other mitigating factors. Under the settlement agreement, no water would be released for restoration purposes in the driest of years; thus, the agreement would not reduce deliveries to Friant contractors in those years. Additionally, in some years, the restoration flows released in late winter and early spring may free up space for additional runoff storage in Millerton Lake, potentially minimizing reductions in deliveries later in the year—assuming Millerton Lake storage is replenished. Consequently, how deliveries to Friant water contractors may be reduced in any given year is likely to depend on many factors. Regardless of the specifics of how much water may be released for fisheries restoration vis-à-vis diverted for off-stream purposes, the SJRRP will impact existing surface and groundwater supplies in and around the Friant Division service area and affect local economies. SJRRP construction activities are in the early stages, but planning efforts have targeted a completion date of 2024 for the first stage of construction efforts. CALFED Bay-Delta Restoration Program The Bay-Delta Restoration Program is a cooperative effort among the federal government, the State of California, local governments, and water users to proactively address the water management and aquatic ecosystem needs of California's Central Valley. The CALFED Bay-Delta Restoration Act ( P.L. 108-361 ), enacted in 2004, provided new and expanded federal authorities for six agencies related to the 2000 ROD for the CALFED Bay-Delta Program's Programmatic Environmental Impact Statement. These authorities were extended through FY2019 under the WIIN Act. The interim action plan for CALFED has four objectives: a renewed federal-state partnership, smarter water supply and use, habitat restoration, and drought and floodplain management. From FY2013 to FY2018, Reclamation funded its Bay-Delta restoration activities at approximately $37 million per year; the majority of this funding has gone for projects to address the degraded Bay-Delta ecosystem and includes federal activities under California WaterFix (see below section, " California WaterFix "). Other agencies receiving funding to carry out authorities under CALFED include DOI's U.S. Fish and Wildlife Service and U.S. Geological Survey; the Department of Agriculture's Natural Resources Conservation Service; the Department of Defense's Army Corps of Engineers; the Department of Commerce's National Oceanic and Atmospheric Administration; and the Environmental Protection Agency. Similar to Reclamation, these agencies report on CALFED expenditures that involve a combination of activities under "base" authorities and new authorities that were provided under the CALFED authorizing legislation. The annual CALFED crosscut budget records the funding for CALFED across all federal agencies. The budget generally is included in the Administration's budget request and contains CALFED programs, their authority, and requested funding. For FY2019, the Administration requested $474 million for CALFED activities. This figure is an increase from the FY2018 enacted level of $415 million. New Storage and Conveyance Reductions in available water deliveries due to hydrological and regulatory factors have caused some stakeholders, legislators, and state and federal government officials to look at other methods of augmenting water supplies. In particular, proposals to build new or augmented CVP and/or SWP water storage projects have been of interest to some policymakers. Additionally, the State of California is pursuing a major water conveyance project, the California WaterFix, with a nexus to CVP operations. New and Augmented Water Storage Projects The aforementioned CALFED legislation ( P.L. 108-361 ) also authorized the study of several new or augmented CVP storage projects throughout the Central Valley that have been ongoing for a number of years. These studies include Shasta Lake Water Resources Investigation, North of the Delta Offstream Storage Investigation (also known as Sites Reservoir), In-Delta Storage, Los Vaqueros Reservoir Expansion, and Upper San Joaquin River/Temperance Flat Storage Investigation ( Figure 6 ). Although the recommendations of these studies normally would be subject to congressional approval, Section 4007 of the WIIN Act authorized $335 million in Reclamation financial support for new or expanded federal and nonfederal water storage projects and provided that these projects could be deemed authorized, subject to a finding by the Administration that individual projects met certain criteria. In 2018 reporting to Congress, Reclamation recommended an initial list of seven projects that it concluded met the WIIN Act criteria. The projects were allocated $33.3 million in FY2017 funding that was previously appropriated for WIIN Act Section 4007 projects. Congress approved the funding allocations for these projects in enacted appropriations for FY2018 ( P.L. 115-141 ). Four of the projects receiving FY2017 funds ($28.05 million) were CALFED studies that would address water availability in the CVP: Shasta Dam and Reservoir Enlargement Project ($20 million for design and preconstruction); North-of-Delta Off-Stream Storage Investigation/Sites Reservoir Storage Project ($4.35 million for feasibility study); Upper San Joaquin River Basin Storage Investigation ($1.5 million for feasibility study); and Friant-Kern Canal Subsidence Challenges Project ($2.2 million for feasibility study). The enacted FY2018 Energy and Water appropriations bill further stipulated that $134 million of the amount set aside for additional water conservation and delivery projects be provided for Section 4007 WIIN Act storage projects (i.e., similar direction as FY2017). The enacted FY2019 bill set aside another $134 million for these purposes. Future reporting and appropriations legislation is expected to propose allocation of this and any other applicable funding. Congress also may consider additional directives for these and other efforts to address water supplies in the CVP, including approval of physical construction for one or more of these projects. Funding by the State of California also may influence the viability and timing of construction for some of the proposed projects. For example, in June 2018, the state announced significant bond funding for Sites Reservoir ($1.008 billion), as well as other projects. California WaterFix In addition to water storage, some have advocated for a more flexible water conveyance system for CVP and SWP water. An alternative was the California WaterFix, a project initiated by the State of California in 2015 to address some of the water conveyance and ecosystem issues in the Bay-Delta. The objective of this project was to divert water from the Sacramento River, north of the Bay-Delta, into twin tunnels running south along the eastern portion of the Bay-Delta and emptying into existing pumps that feed water into the CVP and SWP. In the spring of 2019, Governor Newsom of California canceled the plans for this project and introduced an alternative plan for conveying water through the Delta. DWR is creating plans to construct a single tunnel to convey water from the Sacramento River to the existing pumps in the Bay-Delta. DWR's stated reasons for supporting this approach are to protect water supplies from sea-level rise, saltwater intrusion, and earthquakes. The new plan is expected to take a "portfolio" approach that focuses on a number of interrelated efforts to make water supplies climate resilient. This approach includ es actions such as strengthening levees, protecting Delta water quality, and recharging groundwater, according to DWR. This project will require a new environmental review process for federal and state permits. It is being led by the Delta Conveyance Design and Construction Authority, a joint powers authority created by public water agencies to oversee the design and construction of the new conveyance system. DWR is expected to oversee the planning effort. The cost of the project is anticipated to be largely paid by public water agencies. The federal government's role in this project beyond evaluating permit applications and maintaining related CVP operations has not been defined. Congressional Interest Congress plays a role in CVP water management and previously has attempted to make available additional water supplies in the region by facilitating efforts such as water banking, water transfers, and construction of new and augmented storage. In 2016, Congress enacted provisions aiming to benefit the CVP and the SWP, including major operational changes in the WIIN Act and additional appropriations for western drought response and new water storage that have benefited (or are expected to benefit) the CVP. Congress also continues to consider legislation that would further alter CVP operational authorities and responsibilities related to individual units of the project. The below section discusses some of the main issues related to the CVP that may receive attention by Congress. CVP Operational Authorities Under the WIIN Act72 Title II, Subtitle J of the WIIN Act (enacted in December 2016) included multiple provisions related to the Bureau of Reclamation's operations of the CVP. Most of the WIIN Act's operational provisions are set to expire in 2021 (five years after the bill's enactment). In addition to overseeing the implementation of these operational provisions, Congress may also consider their amendment, extension, or repeal. The WIIN Act directed Reclamation to "maximize" CVP pumping (in accordance with applicable BiOps), allowed for increased pumping during certain temporary storm events, and authorized expedited reviews of water transfers, among other things. The WIIN Act also established a new standard for measuring the effects of water operations on species listed as endangered or threatened under the ESA, allowing most of the bill's actions to go forward unless they are determined to cause additional adverse effects on listed species beyond the range of the effects anticipated to occur for the duration of the species BiOp. Although the WIIN Act included some provisions from legislation that had been proposed dating back to the 112 th Congress, many of the controversial provisions from prior bills were not included in the act. Supporters of WIIN Act operational changes contended that these changes had the potential to make additional water available to users facing curtailed deliveries, while also improving the flexibility and responsiveness of the management and operations of the CVP and SWP. Opponents worried that the changes may have detrimental effects on species' survival in both the short and long terms and may limit agency efforts to manage water supplies for the benefit of species. Some of the notable CVP operational provisions in the WIIN Act aimed to provide the Administration with authority to make available more water supplies during periods in which pumping otherwise would have been limited. According to Reclamation, some changes authorized under the WIIN Act were implemented during the winter of 2017-2018. In particular, communication and transparency were reportedly increased for some operational decisions, allowing for reduced or rescheduled pumping restrictions. Additionally, as of spring 2018, WIIN Act allowances relaxed restrictions on inflow-to-export ratios related to the voluntary sale, transfer, or exchange of water that were used to affect a transfer resulting in additional exports of 50,000-60,000 AF. Reclamation has noted that hydrology has affected its ability to implement some of the act's provisions. Many of the WIIN Act changes have the potential to make their greatest impact during drought years. At the same time, some federal operational changes pursuant to the WIIN Act reportedly were proposed but were deemed incompatible with state requirements. Despite these limitations, WIIN Act authorities are likely to continue as a topic of congressional interest. Other Proposed Changes to CVP Operations Previous Congresses have considered legislation that proposed additional changes to CVP operations. For instance, in the 115 th Congress, H.R. 23 , the Gaining Responsibility on Water Act (GROW Act), incorporated a number of provisions that were included in previous California drought legislation in the 112 th , 113 th , and 114 th Congresses but were not enacted in the WIIN Act. Generally speaking, the GROW Act included provisions that would have loosened some environmental protections and restrictions that are imposed under the CVPIA, ESA, CWA, and SJRRP, and had the potential to increase exports under some scenarios. This legislation was not enacted. In addition to legislation proposing operational changes, the Administration has indicated its intent to propose administrative changes to CVP operations, including through reinitiation of consultation on long-term, system-wide operations of the CVP and SWP (see earlier section, " Endangered Species Act "). A 2018 White House memorandum directed DOC and DOI to finalize their new BiOps for the coordinated operation of the CVP and SWP by June 15, 2019, and to "suspend, revise, or rescind" regulations that unduly burden the project. It is unclear how the latter process might unfold or what particular regulations will be addressed. New Water Storage Projects As previously noted, Reclamation and the State of California have funded the study of new water storage projects in recent years, and future appropriations legislation and reporting may provide additional direction for these and other efforts to develop new water supplies for the CVP. As such, Congress may consider oversight, authorization, and/or funding for these projects. Some projects, such as the Shasta Dam and Reservoir Enlargement Project, have the potential to augment CVP water supplies but also have generated controversy for their potential to conflict with the intent of certain state laws. Although Reclamation has indicated its interest in pursuing the Shasta Dam raise project, the state has opposed the project under Governor Jerry Brown's Administration, and it is unclear how such a project might proceed absent state regulatory approvals and financial support. As previously noted, in early 2018, Reclamation proposed and Congress agreed to $20 million in design and preconstruction funding for the project. An additional $75 million was recommended by the Trump Administration in February 2019. In addition to the Shasta Dam and Reservoir Enlargement Project, Congress approved Reclamation-recommended study funding for Sites Reservoir/North of Delta Offstream Storage (NODOS), Upper San Joaquin River Basin Storage Investigation, and the Friant-Kern Canal Subsidence Challenges Project. Overall, from FY2017 to FY2019 Congress provided Reclamation with $335 million for new water storage projects authorized under Section 4007 of the WIIN Act. A significant share of this total is expected to be used on CVP and related water storage projects in California. Once the appropriations ceiling for these projects has been reached, funding for storage projects under Section 4007 would need to be extended by Congress before projects could proceed further. Legislation in the 116 th Congress has proposed to expedite certain water storage studies in the Central Valley, and could also provide mandatory funding for their eventual construction. For instance, Section 5 of H.R. 2473 would direct the Secretary to complete, as soon as practicable, the ongoing feasibility studies associated with Sites Reservoir, Del Puerto Canyon Reservoir, Los Vaqueros Reservoir, and San Luis Reservoir. Section 2 of the same legislation would authorize $100 million per year for fiscal years 2030 to 2060, without further appropriation (i.e., mandatory funding) for new Reclamation surface or groundwater storage projects. Conclusion The CVP is one of the largest and most complex water storage and conveyance projects in the world. Congress has regularly expressed interest in CVP operations and allocations, in particular pumping in the Bay-Delta. In addition to ongoing oversight of project operations and previously enacted authorities, a number of developing issues and proposals related to the CVP have been of interest to congressional decisionmakers. These include study and approval of new water storage and conveyance projects, updates to the state's Bay-Delta Water Quality Plan, and a multipronged effort by the Trump Administration to make available more water for CVP water contractors, in particular those south of the Delta. Future drought or other stressors on California water supplies are likely to further magnify these issues. Appendix. CVP Water Contractors The below sections provide a brief discussion some of the major contractor groups and individual contractors served by the CVP. Sacramento River Settlement Contractors and San Joaquin River Exchange Contractors (Water Rights Contractors) CVP water generally is made available for delivery first to those contractors north and south of the Delta with water rights that predate construction of the CVP: the Sacramento River Settlement Contractors and the San Joaquin River Exchange Contractors. (These contractors are sometimes referred to collectively as water rights contractors .) Water rights contractors typically receive 100% of their contracted amounts in most water year types. During water shortages, their annual maximum entitlement may be reduced, but not by more than 25%. Sacramento River Settlement Contractors include the 145 contractors (both individuals and districts) that diverted natural flows from the Sacramento River prior to the CVP's construction and executed a settlement agreement with Reclamation that provided for negotiated allocation of water rights. Reclamation entered into this agreement in exchange for these contractors withdrawing their protests related to Reclamation's application for water rights for the CVP. The San Joaquin River Exchange Contractors are four irrigation districts that agreed to "exchange" exercising their water rights to divert water on the San Joaquin and Kings Rivers for guaranteed water deliveries from the CVP (typically in the form of deliveries from the Delta-Mendota Canal and waters north of the Delta). During all years except for when critical conditions are declared, Reclamation is responsible for delivering 840,000 AF of "substitute" water to these users (i.e., water from north of the Delta as a substitute for San Joaquin River water). In the event that Reclamation is unable to make its contracted deliveries, these Exchange Contractors have the right to divert water directly from the San Joaquin River, which may reduce water available for other San Joaquin River water service contactors. Friant Division Contractors CVP's Friant Division contractors receive water stored behind Friant Dam (completed in 1944) in Millerton Lake. This water is delivered through the Friant-Kern and Madera Canals. The 32 Friant Division contractors, who irrigate roughly 1 million acres on the San Joaquin River, are contracted to receive two "classes" of water: Class 1 water is the first 800,000 AF available for delivery; Class 2 water is the next 1.4 million AF available for delivery. Some districts receive water from both classes. Generally, Class 2 waters are released as "uncontrolled flows" (i.e., for flood control concerns), and may not necessarily be scheduled at a contractor's convenience. Deliveries to the Friant Division are affected by a 2009 congressionally enacted settlement stemming from Friant Dam's effects on the San Joaquin River. The settlement requires reductions in deliveries to Friant users for protection of fish and wildlife purposes. In some years, some of these "restorations flows" have been made available to contractors for delivery as Class 2 water. Unlike most other CVP contractors, Friant Division contractors have converted their water service contracts to repayment contracts and have repaid their capital obligation to the federal government for the development of their facilities. In years in which Reclamation is unable to make contracted deliveries to Exchange Contractors, these contractors can make a "call" on water in the San Joaquin River, thereby requiring releases from Friant Dam that otherwise would go to Friant contractors. South-of-Delta (SOD) Water Service Contractors: Westlands Water District As shown in Figure 3 , SOD water service contractors account for a large amount (2.09 million AF, or 22.1%) of the CVP's contracted water. The largest of these contractors is Westlands Water District, which consists of 700 farms covering more than 600,000 acres in Fresno and Kings Counties. In geographic terms, Westlands is the largest agricultural water district in the United States; its lands are valuable and productive, producing more than $1 billion of food and fiber annually. Westlands' maximum contracted CVP water is in excess of 1.2 million AF, an amount that makes up more than half of the total amount of SOD CVP water service contracts and significantly exceeds any other individual CVP contactor. However, due to a number of factors, Westlands often receives considerably less water on average than it did historically. Westlands has been prominently involved in a number of policy debates, including proposals to alter environmental requirements to increase pumping south of the Delta. Westlands also is involved in a major proposed settlement with Reclamation, the San Luis Drainage Settlement. The settlement would, among other things, forgive Westlands' share of federal CVP repayment responsibilities in exchange for relieving the federal government of its responsibility to construct drainage facilities to deal with toxic runoff associated with naturally occurring metals in area soils. Central Valley Wildlife Refuges The 20,000 square mile California Central Valley provides valuable wetland habitat for migratory birds and other species. As such, it is the home to multiple state and federally-designated wildlife refuges north and south of the Delta. These refuges provide managed wetland habitat that receives water from the CVP and other sources. The Central Valley Project Improvement Act (CVPIA; P.L. 102-575 ), enacted in 1992, sought to improve conditions for fish and wildlife in these areas by providing them coequal priority with other project purposes. CVPIA also authorized a Refuge Water Supply Program to acquire approximately 555,000 AF annually in water supplies for 19 Central Valley refuges administered by three managing agencies: California Department of Fish and Wildlife, U.S. Fish and Wildlife Service, and Grassland Water District (a private landowner). Pursuant to CVPIA, Reclamation entered into long-term water supply contracts with the managing agencies to provide these supplies. Authorized refuge water supply under CVPIA is divided into two categories: Level 2 and Level 4 supplies. Level 2 supplies (approximately 422,251 AF, except in critically dry years, when the allocation is reduced to 75%) are the historical average of water deliveries to the refuges prior to enactment of CVPIA. Reclamation is obligated to acquire and deliver this water under CVPIA, and costs are 100% reimbursable by CVP contractors through a fund established by the act, the Central Valley Project Restoration Fund (CVPRF; see previous section, " Central Valley Project Improvement Act "). Level 4 supplies (approximately 133,264 AF) are the additional increment of water beyond Level 2 supplies for optimal wetland habitat development. This water must be acquired by Reclamation through voluntary measures and is funded as a 75% federal cost (through the CVPRF) and 25% state cost. In most cases, the Level 2 requirement is met; however, Level 4 supplies have not always been provided in full for a number of reasons, including a dearth of supplies due to costs in excess of available CVPRF funding and a lack of willing sellers. In recent years, costs for the Refuge Water Supply Program (i.e., the costs for both Level 2 and Level 4 water) have ranged from $11 million to $20 million. Summary:	null	96	64,941	64,943	64,943	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The Bureau of Reclamation (Reclamation), part of the Department of the Interior (DOI), operates the multipurpose federal Central Valley Project (CVP) in California, one of the world's largest water storage and conveyance systems. The CVP runs approximately 400 miles in California, from Redding to Bakersfield ( Figure 1 ). It supplies water to hundreds of thousands of acres of irrigated agriculture throughout the state, including some of the most valuable cropland in the country. It also provides water to selected state and federal wildlife refuges, as well as to some municipal and industrial (M&I) water users. This report provides information on hydrologic conditions in California and their impact on state and federal water management, with a focus on deliveries related to the federal CVP. It also summarizes selected issues for Congress related to the CVP. Recent Developments The drought of 2012-2016, widely considered to be among California's most severe droughts in recent history, resulted in major reductions to CVP contractor allocations and economic and environmental impacts throughout the state. These impacts were of interest to Congress, which oversees federal operation of the CVP. Although the drought ended with the wet winter of 2017, many of the water supply controversies associated with the CVP predated those water shortages and remain unresolved. Absent major changes to existing hydrologic, legislative, and regulatory baselines, most agree that at least some water users are likely to face ongoing constraints to their water supplies. Due to the limited water supplies available, proposed changes to the current operations and allocation system are controversial. As a result of the scarcity of water in the West and the importance of federal water infrastructure to the region, western water issues are regularly of interest to many lawmakers. Legislation enacted in the 114 th Congress (Title II of the Water Infrastructure Improvements for the Nation [WIIN] Act; P.L. 114-322 ) included several CVP-related sections. These provisions directed pumping to "maximize" water supplies for the CVP (including pumping or "exports" to CVP water users south of the Sacramento and San Joaquin Rivers' confluence with the San Francisco Bay, known as the Bay-Delta or Delta ) in accordance with applicable biological opinions (BiOps) for project operations. They also allowed for increased pumping during certain storm events generating high flows, authorized actions to facilitate water transfers, and established a new standard for measuring the effects of water operations on species. In addition to operational provisions, the WIIN Act authorized funding for construction of new federal and nonfederal water storage projects. CVP projects are among the most likely recipients of this funding. Due to increased precipitation and disagreements with the state, among other factors, the WIIN Act's CVP operational authorities did not yield significant new water exports south of the Delta in 2017 and 2018. However, the authorities may be more significant in years of limited precipitation and thus may yield increased supplies in the future. Although use of the new operational authorities was limited, Reclamation received funding for WIIN Act-authorized water storage project design and construction in FY2017-FY2019; a significant amount of this funding has gone to CVP-related projects. Several state and federal proposals are also currently under consideration and have generated controversy for their potential to significantly alter CVP operations. In mid-2018, the State of California proposed revisions to its Bay-Delta Water Quality Control Plan. These changes would require that more flows from the San Joaquin and Sacramento Rivers reach the California Bay-Delta for water quality and fish and wildlife enhancement (and would thus further restrict water supplies for other users). At the same time, the Trump Administration is exploring options to increase CVP water supplies for users. Background California's Central Valley encompasses almost 20,000 square miles in the center of the state ( Figure 1 ). It is bound by the Cascade Range to the north, the Sierra Nevada to the east, the Tehachapi Mountains to the south, and the Coast Ranges and San Francisco Bay to the west. The northern third of the valley is drained by the Sacramento River, and the southern two-thirds of the valley are drained by the San Joaquin River. Historically, this area was home to significant fish and wildlife populations. The CVP originally was conceived as a state project; the state studied the project as early as 1921, and the California state legislature formally authorized it for construction in 1933. After it became clear that the state was unable to finance the project, the federal government (through the U.S. Army Corps of Engineers, or USACE) assumed control of the CVP as a public works construction project authority provided under the Rivers and Harbors Act of 1935. The Franklin D. Roosevelt Administration subsequently transferred the project to Reclamation. Construction on the first unit of the CVP (Contra Costa Canal) began in October 1937, with water first delivered in 1940. Additional CVP units were completed and came online over time, and some USACE-constructed units also have been incorporated into the project. The New Melones Unit was the last unit of the CVP to come online; it was completed in 1978 and began operations in 1979. The CVP made significant changes to California's natural hydrology to develop water supplies for irrigated agriculture, municipalities, and hydropower, among other things. Most of the CVP's major units, however, predated major federal natural resources and environmental protection laws such as the Endangered Species Act (ESA; 87 Stat. 884. 16 U.S.C. §§1531-1544) and the National Environmental Policy Act (NEPA; 42 U.S.C. §§4321 et seq), among others. Thus, much of the current debate surrounding the project revolves around how to address the project's changes to California's hydrologic system that were not major considerations when it was constructed. Today, CVP water serves a variety of different purposes for both human uses and fish and wildlife needs. The CVP provides a major source of support for California agriculture, which is first in the nation in terms of farm receipts. CVP water supplies irrigate more than 3 million acres of land in central California and support 7 of California's top 10 agricultural counties. In addition, CVP M&I water provides supplies for approximately 2.5 million people per year. CVP operations also are critical for hydropower, recreation, and fish and wildlife protection. In addition to fisheries habitat, CVP flows support wetlands, which provide habitat for migrating birds. Overview of the CVP and California Water Infrastructure The CVP ( Figure 1 ) is made up of 20 dams and reservoirs, 11 power plants, and 500 miles of canals, as well as numerous other conduits, tunnels, and storage and distribution facilities. In an average year, it delivers approximately 5 million acre-feet (AF) of water to farms (including some of the nation's most valuable farmland); 600,000 AF to M&I users; 410,000 AF to wildlife refuges; and 800,000 AF for other fish and wildlife needs, among other purposes. A separate major project owned and operated by the State of California, the State Water Project (SWP), draws water from many of the same sources as the CVP and coordinates its operations with the CVP under several agreements. In contrast to the CVP, the SWP delivers about 70% of its water to urban users (including water for approximately 25 million users in the San Francisco Bay, Central Valley, and Southern California); the remaining 30% is used for irrigation. At their confluence, the Sacramento and San Joaquin Rivers flow into the San Francisco Bay (the Bay-Delta, or Delta). Operation of the CVP and SWP occurs through the storage, pumping, and conveyance of significant volumes of water from both river basins (as well as trans-basin diversions from the Trinity River Basin in Northern California) for delivery to users. Federal and state pumping facilities in the Delta near Tracy, CA, export water from Northern California to Central and Southern California and are a hub for CVP operations and related debates. In the context of these controversies, north of Delta (NOD) and south of Delta (SOD) are important categorical distinctions for water users. CVP storage is spread throughout Northern and Central California. The largest CVP storage facility is Shasta Dam and Reservoir in Northern California ( Figure 2 ), which has a capacity of 4.5 million AF. Other major storage facilities, from north to south, include Trinity Dam and Reservoir (2.4 million AF), Folsom Dam and Reservoir (977,000 AF), New Melones Dam and Reservoir (2.4 million AF), Friant Dam and Reservoir (520,000 AF), and San Luis Dam and Reservoir (1.8 million AF of storage, of which half is federal and half is nonfederal). The CVP also includes numerous water conveyance facilities, the longest of which are the Delta-Mendota Canal (which runs for 117 miles from the federally operated Bill Jones pumping plant in the Bay-Delta to the San Joaquin River near Madera) and the Friant-Kern Canal (which runs 152 miles from Friant Dam to the Kern River near Bakersfield). Non-CVP water storage and infrastructure also is spread throughout the Central Valley and in some cases is integrated with CVP operations. Major non-CVP storage infrastructure in the Central Valley includes multiple storage projects that are part of the SWP (the largest of which is Oroville Dam and Reservoir in Northern California), as well as private storage facilities (e.g., Don Pedro and Exchequer Dams and Reservoirs) and local government-owned dams and infrastructure (e.g., O'Shaughnessy Dam and Hetch-Hetchy Reservoir and Aqueduct, which are owned by the San Francisco Public Utilities Commission). In addition to its importance for agricultural water supplies, California's Central Valley also provides valuable wetland habitat for migratory birds and other species. As such, it is home to multiple state, federal, and private wildlife refuges north and south of the Delta. Nineteen of these refuges (including 12 refuges within the National Wildlife Refuge system, 6 State Wildlife Areas/Units, and 1 privately managed complex) provide managed wetland habitat that receives water from the CVP and other sources. Five of these units are located in the Sacramento River Basin (i.e., North of the Delta), 12 are in the San Joaquin River Basin, and the remaining 2 are in the Tulare Lake Basin. Central Valley Project Water Contractors and Allocations In normal years, snowpack accounts for approximately 30% of California's water supplies and is an important factor in determining CVP and SWP allocations. Water from snowpack typically melts in the spring and early summer, and it is stored and made available to meet water needs throughout the state in the summer and fall. By late winter, the state's water supply outlook typically is sufficient for Reclamation to issue the amount of water it expects to deliver to its contractors. At that time, Reclamation announces estimated deliveries for its 250 CVP water contractors in the upcoming water year. More than 9.5 million AF of water per year is potentially available from the CVP for delivery based on contracts between Reclamation and CVP contractors. However, most CVP water contracts provide exceptions for Reclamation to reduce water deliveries due to hydrologic conditions and other conditions outside Reclamation's control. As a result of these stipulations, Reclamation regularly makes cutbacks to actual CVP water deliveries to contractors due to drought and other factors. Even under normal hydrological circumstances, the CVP often delivers much less than the maximum contracted amount of water; since the early 1980s, an average of about 7 million AF of water has been made available to CVP contractors annually (including 5 million AF to agricultural contractors). However, during drought years deliveries may be significantly less. In the extremely dry water years of 2012-2015, CVP annual deliveries averaged approximately 3.45 million AF. CVP contractors receive varying levels of priority for water deliveries based on their water rights and other related factors, and some of the largest and most prominent water contractors have a relatively low allocation priority. Major groups of CVP contractors include water rights contractors (i.e., senior water rights holders such as the Sacramento River Settlement and San Joaquin River Exchange Contractors, see box below), North and South of Delta water service contractors, and Central Valley refuge water contractors. The relative locations for these groups are shown in Figure 1 . The largest contract holders of CVP water by percentage of total contracted amounts are Sacramento River Settlement Contractors, located on the Sacramento River. The second-largest group are SOD water service contractors (including Westlands Water District, the CVP's largest contractor), located in the area south of the Delta. Other major contractors include San Joaquin River Exchange Contractors, located west of the San Joaquin River and Friant Division contractors, located on the east side of the San Joaquin Valley. Central Valley refuges and several smaller contractor groups (e.g., Eastside Contracts, In-Delta-Contra Costa Contracts, and SOD Settlement Contracts) also factor into CVP water allocation discussions. Figure 3 depicts an approximate division of maximum available CVP water deliveries pursuant to contracts with Reclamation. The largest contractor groups and their relative delivery priority are discussed in more detail in the Appendix to this report. CVP Allocations Reclamation provided its allocations for the 2019 water year in a series of announcements in early 2019. As was the case in 2018, over the course of the spring Reclamation increased its allocations for some contractors from initially announced levels. Most CVP contractor groups were allocated 100% of their maximum contracted amounts in 2019. One major exception is SOD agricultural water service contractors, who were allocated 70% of their contracted supplies. Prior to receiving a full allocation in 2017, the last time these contractors received a 100% allocation was 2006. They have received their full contract allocations only four times since 1990. State Water Project Allocations The other major water project serving California, the SWP, is operated by California's Department of Water Resources (DWR). The SWP primarily provides water to M&I users and some agricultural users, and it integrates its operations with the CVP. Similar to the CVP, the SWP has considerably more contracted supplies than it typically makes available in its deliveries. SWP contracted entitlements are 4.17 million AF, but average annual deliveries are typically considerably less than that amount. SWP water deliveries were at their lowest point in 2014 and 2015, and they were significantly higher in the wet year of 2017. SWP water supply allocations for water years 2012-2019 are shown in Table 2 . Combined CVP/SWP Operations The CVP and SWP are operated in conjunction under the 1986 Coordinated Operations Agreement (COA), which was executed pursuant to P.L. 99-546 . COA defines the rights and responsibilities of the CVP and SWP with respect to in-basin water needs and provides a mechanism to account for those rights and responsibilities. Despite several prior efforts to review and update the agreement to reflect major changes over time (e.g., water delivery reductions pursuant to the Central Valley Project Improvement Act, the Endangered Species Act requirements, and new Delta Water Quality Standards, among other things), the 1986 agreement remains in place. Combined CVP and SWP exports (i.e., water transferred from north to south of the Delta) is of interest to many observers because it reflects trends over time in the transfer of water from north to south (i.e., exports ) by the two projects, in particular through pumping. Exports of the CVP and SWP, as well as total combined exports since 1978, have varied over time ( Figure 4 ). Most recently, combined exports dropped significantly during the 2012-2016 drought but have rebounded since 2016. Prior to the drought, overall export levels had increased over time, having averaged more from 2001 to 2011 than over any previous 10-year period. The 6.42 million AF of combined exports in 2017 was the second most on record, behind 6.59 million AF in 2011. Over time, CVP exports have decreased on average, whereas SWP exports have increased. Additionally, exports for agricultural purposes have declined as a subset of total exports, in part due to those exports being made available for other purposes (e.g., fish and wildlife). Previously, some observers argued that CVP obligations under COA were no longer proportional to water supplies that the CVP receives from the Delta, thus the agreement should be renegotiated. Dating to 2015, Reclamation and DWR conducted a mutual review of COA but reportedly were unable to agree on revisions. On August 17, 2018, Reclamation provided a Notice of Negotiations to DWR. Following negotiations in the fall of 2018, Reclamation and DWR agreed to an addendum to COA in December 2018. Whereas the original 1986 agreement included a fixed ratio of 75% CVP/25% SWP for the sharing of regulatory requirements associated with storage withdrawals for Sacramento Valley in-basin uses (e.g., curtailments for water quality and species uses), the revised addendum adjusted the ratio of sharing percentages based on water year types ( Table 3 ). The 2018 addendum also adjusted the sharing of export capacity under constrained conditions. Whereas under the 1986 COA, export capacity was shared 50/50 between the CVP and the SWP, under the revised COA the split is to be 60% CVP/40% SWP during excess conditions, and 65% CVP/35% SWP during balanced conditions. Finally, the state also agreed in the 2018 revisions to transport up to 195,000 AF of CVP water through the California Aqueduct, during certain conditions. Constraints on CVP Deliveries Concerns over CVP water supply deliveries persist in part because even in years with high levels of precipitation and runoff, some contractors (in particular SOD water service contractors) have regularly received allocations of less than 100% of their contract supplies. Allocations for some users have declined over time; additional environmental requirements in recent decades have reduced water deliveries for human uses. Coupled with reduced water supplies available in drought years, some have increasingly focused on what can be done to increase water supplies for users. At the same time, others that depend on or advocate for the health of the San Francisco Bay and its tributaries, including fishing and environmental groups and water users throughout Northern California, have argued for maintaining or increasing existing environmental protections (the latter of which likely would further constrain CVP exports). Hydrology and state water rights are the two primary drivers of CVP allocations. However, at least three other regulatory factors affect the timing and amount of water available for delivery to CVP contractors and are regularly the subject of controversy: State water quality requirements pursuant to state and the federal water quality laws (including the Clean Water Act [CWA, 33 U.S.C. §§1251-138]); Regulations and court orders pertaining to implementation of the federal Endangered Species Act (ESA, 87 Stat. 884. 16 U.S.C. §§1531-1544); and Implementation of the Central Valley Project Improvement Act (CVPIA; P.L. 102-575 ). Each of these factors is discussed in more detail below. Water Quality Requirements: Bay-Delta Water Quality Control Plan California sets water quality standards and issues permits for the discharge of pollutants in compliance with the federal CWA, enacted in 1972. Through the Porter-Cologne Act (a state law), California implements federal CWA requirements and authorizes the State Water Resources Control Board (State Water Board) to adopt water quality control plans, or basin plans. The CVP and the SWP affect water quality in the Bay-Delta depending on how much freshwater the projects release into the area as "unimpaired flows" (thereby affecting area salinity levels). The first Water Quality Control Plan for the Bay-Delta (Bay-Delta Plan) was issued by the State Water Board in 1978. Since then, there have been three substantive updates to the plan—in 1991, 1995, and 2006. The plans generally have required the SWP and CVP to meet certain water quality and flow objectives in the Delta to maintain desired salinity levels for in-Delta diversions (e.g., water quality levels for in-Delta water supplies) and fish and wildlife, among other things. These objectives often affect the amount and timing of water available to be pumped, or exported, from the Delta and thus at times result in reduced Delta exports to CVP and SWP water users south of the Delta. The Bay-Delta Plan is currently implemented through the State Water Board's Decision 1641 (or D-1641), which was issued in 1999 and placed responsibility for plan implementation on the state's largest two water rights holders, Reclamation and the California DWR. Pumping restrictions to meet state-set water quality levels—particularly increases in salinity levels—can sometimes be significant. However, the relative magnitude of these effects varies depending on hydrology. For instance, Reclamation estimated that in 2014, water quality restrictions accounted for 176,300 AF of the reduction in pumping from the long-term average for CVP exports. In 2016, Reclamation estimated that D-1641 requirements accounted for 114,500 AF in reductions from the long-term export average. Bay-Delta Plan Update In mid-2018, the State Water Board released the final draft of the update to the 2006 Bay Delta Plan (i.e., the Bay-Delta Plan Update) for the Lower San Joaquin River and Southern Delta. It also announced further progress on related efforts under the update for flow requirements on the Sacramento River and its tributaries. The Bay-Delta Plan Update requires additional flows to the ocean (generally referred to in these documents as "unimpaired flows") from the San Joaquin River and its tributaries (i.e., the Stanislaus, Tuolumne, and Merced Rivers). Under the proposal, the unimpaired flow requirement for the San Joaquin River would be 40% (within a range of 30%-50%); average unimpaired flows currently range from 21% to 40%. The state estimates that the updated version of the plan would reduce water available for human use from the San Joaquin River and its tributaries by between 7% and 23%, on average (depending on the water year type), but it could reduce these water supplies by as much as 38% during critically dry years. A more detailed plan for the Sacramento River and its tributaries also is expected in the future. A preliminary framework released by the state in July 2018 proposed a potential requirement of 55% unimpaired flows from the Sacramento River (within a range of 45% to 65%). According to the State Water Board, if the plan updates for the San Joaquin and Sacramento Rivers are finalized and water users do not enter into voluntary agreements to implement them, the board could take actions to require their implementation, such as promulgation of regulations and conditioning of water rights. Reclamation and its contractors likely would play key roles in implementing any update to the Bay-Delta Plan, as they do in implementing the current plan under D-1641. Pursuant to Section 8 of the Reclamation Act of 1902, Reclamation generally defers to state water law in carrying out its authorities, but the proposed Bay Delta Plan Update has generated controversy. In a July 2018 letter to the State Water Board, the Commissioner of Reclamation opposed the proposed standards for the San Joaquin River, arguing that meeting them would necessitate decreased water in storage at New Melones Reservoir of approximately 315,000 AF per year (a higher amount than estimated by the State Water Board). Reclamation argued that such a change would be contrary to the CVP prioritization scheme as established by Congress. On December 12, 2018, the State Water Board approved the Bay Delta Plan Update in Resolution 1018-0059. According to the state, the plan establishes a "starting point" for increased river flows but also makes allowances for reduced river flows on tributaries where stakeholders have reached voluntary agreements to pursue both flow and "non-flow" measures. The conditions in the Bay-Delta Plan Update would be implemented through water rights conditions imposed by the State Water Board; these conditions are to be implemented no later than 2022. On March 28, 2019, the Department of Justice and DOI filed civil actions in federal and state court against the State Water Board for failing to comply with the California Environmental Quality Act. Endangered Species Act Several species that have been listed under the federal ESA are affected by the operations of the CVP and the SWP. One species, the Delta smelt, is a small pelagic fish that is susceptible to entrainment in CVP and SWP pumps in the Delta; it was listed as threatened under ESA in 1993. Surveys of Delta smelt in 2017 found two adult smelt, the lowest catch in the history of the survey. These results were despite the relatively wet winter of 2017, which is a concern for many stakeholders because low population sizes of Delta smelt could result in greater restrictions on water flowing to users. It also raises larger concerns about the overall health and resilience of the Bay-Delta ecosystem. In addition to Delta smelt, multiple anadromous salmonid species are listed under ESA, including the endangered Sacramento River winter-run Chinook salmon, the threatened Central Valley spring-run Chinook salmon, the threatened Central Valley steelhead, threatened Southern Oregon/Northern California Coast coho salmon, and the threatened Central California Coast steelhead. Federal agencies consult with the U.S. Fish and Wildlife Service (FWS) in DOI or the Department of Commerce's (DOC's) National Marine Fisheries Service (NMFS) to determine if a federal project or action might jeopardize the continued existence of a species listed under ESA or adversely modify its habitat. If an effect is possible, formal consultation is started and usually concludes with the appropriate service issuing a BiOp on the potential harm the project poses and, if necessary, issuing reasonable and prudent measures to reduce the harm. FWS and NMFS each have issued federal BiOps on the coordinated operation of the CVP and the SWP. In addition, both agencies have undertaken formal consultation on proposed changes in the operations and have concluded that the changes, including increased pumping from the Delta, would jeopardize the continued existence of several species protected under ESA. To avoid such jeopardy, the FWS and NMFS BiOps have included Reasonable and Prudent Alternatives (RPAs) for project operations. CVP and SWP BiOps have been challenged and revised over time. Until 2004, a 1993 winter-run Chinook salmon BiOp and a 1995 Delta smelt BiOp (as amended) governed Delta exports for federal ESA purposes. In 2004, a proposed change in coordinated operation of the SWP and CVP (including increased Delta exports), known as OCAP (Operations Criteria and Plan) resulted in the development of new BiOps. Environmental groups challenged the agencies' 2004 BiOps; this challenge resulted in the development of new BiOps by the FWS and NMFS in 2008 and 2009, respectively. These BiOps placed additional restrictions on the amount of water exported via SWP and CVP Delta pumps and other limitations on pumping and release of stored water. The CVP and SWP currently are operated in accordance with these BiOps, both of which concluded that the coordinated long-term operation of the CVP and SWP, as proposed in Reclamation's 2008 Biological Assessment, was likely to jeopardize the continued existence of listed species and destroy or adversely modify designated critical habitat. Both BiOps included RPAs designed to allow the CVP and SWP to continue operating without causing jeopardy to listed species or destruction or adverse modification to designated critical habitat. Reclamation accepted and then began project operations consistent with the FWS and NMFS RPAs, which continue to govern operations. The exact magnitude of reductions in pumping due to ESA restrictions compared to the aforementioned water quality restrictions has varied considerably over time. In absolute terms, ESA-driven reductions typically are greater in wet years than in dry years, but the proportion of ESA reductions relative to deliveries is not necessarily constant and depends on numerous factors. For instance, Reclamation estimated that ESA restrictions accounted for a reduction in deliveries of 62,000 AF from the long-term average for CVP deliveries in 2014 and 144,800 AF of CVP delivery reductions in 2015 (both years were extremely dry). In 2016, ESA reductions accounted for a much larger amount (528,000 AF) in a wet year, when more water is delivered. Some scientists estimate that flows used to protect all species listed under ESA accounted for approximately 6.5% of the total Delta outflow from 2011 to 2016. During the 2012-2016 drought, implementation of the RPAs (which generally limit pumping under specific circumstances and call for water releases from key reservoirs to support listed species) was modified due to temporary urgency change orders (TUCs). These TUCs, issued by the State Water Resources Control Board in 2014 and again in 2015, were deemed consistent with the existing BiOps by NMFS and FWS. Such changes allowed more water to be pumped during certain periods based on real-time monitoring of species and water conditions. DWR estimates that approximately 400,000 AF of water was made available in 2014 for export due to these orders. In August 2016, Reclamation and DWR requested reinitiation of consultation on long-term, system-wide operations of the CVP and the SWP based on new information related to multiple years of drought, species decline, and related data. In December 2017, the Trump Administration gave formal notice of its intent to prepare an environmental impact statement analyzing potential long-term modifications to the coordinated operations of the CVP and the SWP. According to the notice, the actions under consideration will include those with the potential to "maximize" water and power supplies for users and that modify existing regulatory requirements, among other things. The effort is widely viewed as an initial step toward potential long-term changes to CVP operations and existing BiOp requirements. The Biological Assessment (BA) proposing changes for the operation of the CVP and SWP was sent to FWS and NMFS by Reclamation on January 31, 2019. The BA discusses the operational changes proposed by Reclamation and mitigation factors to address listed species. The changes reflect provisions in the WIIN Act and efforts to maximize water supplies for users. The BA also states that nonoperational activities will be implemented to augment and bolster listed fish populations. These activities include habitat restoration and introducing hatchery-bred Delta smelt. Operational changes include increasing flows to take into account additional water from winter storms and increasing base flows when storage levels are higher. The Trump Administration also has indicated its intent to expedite other regulatory changes under ESA. On October 19, 2018, President Trump issued a memorandum that directed DOI and DOC to identify water infrastructure projects in California for which they have responsibilities under ESA. Per the memorandum, the agencies are to identify regulations and procedures that burden the projects and develop a plan to "suspend, revise, or rescind" those regulations. The White House memorandum also directed that the aforementioned joint BiOps be completed by June 15, 2019. Central Valley Project Improvement Act In an effort to mitigate many of the environmental effects of the CVP, Congress in 1992 passed the CVPIA as Title 34 of P.L. 102-575 . The act made major changes to the management of the CVP. Among other things, it formally established fish and wildlife purposes as an official project purpose of the CVP and called for a number of actions to protect, restore, and enhance these resources. Overall, the CVPIA's provisions resulted in a combination of decreased water availability and increased costs for agricultural and M&I contractors, along with new water and funding sources to restore fish and wildlife. Thus, the law remains a source of tension, and some would prefer to see it repealed in part or in full. Some of the CVPIA's most prominent changes to the CVP included directives to double certain anadromous fish populations by 2002 (which did occur); allocate 800,000 AF of "(b)(2)" CVP yield (600,000 AF in drought years) to fish and wildlife purposes; provide water supplies (in the form of "Level 2" and "Level 4" supplies) for 19 designated Central Valley wildlife refuges; establish a fund, the Central Valley Project Restoration Fund (CVPRF), to be financed by water and power users for habitat restoration and land and water acquisitions. Pursuant to prior court rulings since enactment of the legislation, CVPIA (b)(2) allocations may be used to meet other state and federal requirements that reduce exports or require an increase from baseline reservoir releases. Thus, in a given year, the aforementioned export reductions due to state water quality and federal ESA restrictions are counted and reported on annually as (b)(2) water, and in some cases overlap with other stated purposes of CVPIA (e.g., anadromous fish restoration). The exact makeup of (b)(2) water in a given year typically varies. For example, in 2014 (a critically dry year), out of a total of 402,000 AF of (b)(2) water, 176,300 AF (44%) was attributed to export reductions for Bay-Delta Plan water quality requirements. Remaining (b)(2) water was comprised of a combination of reservoir releases classified as CVPIA anadromous fish restoration and NMFS BiOp compliance purposes (163,500 AF) and export reductions under the 2009 salmonid BiOp (62,200 AF). In 2016 (a wet year), 793,000 AF of (b)(2) water included 528,000 AF (66%) of export pumping reductions under FWS and NMFS BiOps and 114,500 AF (14%) for Bay-Delta Plan requirements. The remaining water was accounted for as reservoir releases for the anadromous fish restoration programs, the NMFS BiOp, and the Bay-Delta Plan. Ecosystem Restoration Efforts Development of the CVP made significant changes to California's natural hydrology. In addition to the aforementioned CVPIA efforts to address some of these impacts, three ongoing, congressionally authorized restoration initiatives also factor into federal activities associated with the CVP: The Trinity River Restoration Program (TRRP), administered by Reclamation, attempts to mitigate impacts and restore fisheries impacted by construction of the Trinity River Division of the CVP. The San Joaquin River Restoration Program (SJRRP) is an ongoing effort to implement a congressionally enacted settlement to restore fisheries in the San Joaquin River. The California Bay-Delta Restoration Program aims to restore and protect areas within the Bay-Delta that are affected by the CVP and other activities. In addition to their habitat restoration activities, both the TRRP and the SJRRP involve the maintenance of instream flow levels that use water that was at one time diverted for other uses. Each effort is discussed briefly below. Trinity River Restoration Program TRRP—administered by DOI—aims to mitigate impacts of the Trinity Division of the CVP and restore fisheries to their levels prior to the Bureau of Reclamation's construction of this division in 1955. The Trinity Division primarily consists of two dams (Trinity and Lewiston Dams), related power facilities, and a series of tunnels (including the 10.7-mile tunnel Clear Creek Tunnel) that divert water from the Trinity River Basin to the Sacramento River Basin and Whiskeytown Reservoir. Diversion of Trinity River water (which originally required that a minimum of 120,000 AF be reserved for Trinity River flows) resulted in the near drying of the Trinity River in some years, thereby damaging spawning habitat and severely depleting salmon stocks. Efforts to mitigate the effects of the Trinity Division date back to the early 1980s, when DOI initiated efforts to study the issue and increase Trinity River flows for fisheries. Congress authorized legislation in 1984 ( P.L. 98-541 ) and in 1992 ( P.L. 102-575 ) providing for restoration activities and construction of a fish hatchery, and directed that 340,000 AF per year be reserved for Trinity River flows (a significant increase from the original amount). Congress also mandated completion of a flow evaluation study, which was formalized in a 2000 record of decision (ROD) that called for additional water for instream flows, river channel restoration, and watershed rehabilitation. The 2000 ROD forms the basis for TRRP. The flow releases outlined in that document have in some years been supplemented to protect fish health in the river, and these increases have been controversial among some water users. From FY2013 to FY2018, TRRP was funded at approximately $12 million per year in discretionary appropriations from Reclamation's Fish and Wildlife Management and Development activity. San Joaquin River Restoration Program Historically, the San Joaquin River supported large Chinook salmon populations. After the Bureau of Reclamation completed Friant Dam on the San Joaquin River in the late 1940s, much of the river's water was diverted for agricultural uses and approximately 60 miles of the river became dry in most years. These conditions made it impossible to support Chinook salmon populations upstream of the Merced River confluence. In 1988, a coalition of environmental, conservation, and fishing groups advocating for river restoration to support Chinook salmon recovery sued the Bureau of Reclamation. A U.S. District Court judge eventually ruled that operation of Friant Dam was violating state law because of its destruction of downstream fisheries. Faced with mounting legal fees, considerable uncertainty, and the possibility of dramatic cuts to water diversions, the parties agreed to negotiate a settlement instead of proceeding to trial on a remedy regarding the court's ruling. This settlement was agreed to in 2006 and enacted by Congress in 2010 (Title X of P.L. 111-11 ). The settlement agreement and its implementing legislation form the basis for the SJRRP, which requires new releases of CVP water from Friant Dam to restore fisheries (including salmon fisheries) in the San Joaquin River below Friant Dam (which forms Millerton Lake) to the confluence with the Merced River (i.e., 60 miles). The SJRRP also requires efforts to mitigate water supply delivery losses due to these releases, among other things. In combination with the new releases, the settlement's goals are to be achieved through a combination of channel and structural modifications along the San Joaquin River and the reintroduction of Chinook salmon ( Figure 5 ). These activities are funded in part by federal discretionary appropriations and in part by repayment and surcharges paid by CVP Friant water users that are redirected toward the SJRRP in P.L. 111-11 . Because increased water flows for restoring fisheries (known as restoration flows ) would reduce CVP diversions of water for off-stream purposes, such as irrigation, hydropower, and M&I uses, the settlement and its implementation have been controversial. The quantity of water used for restoration flows and the quantity by which water deliveries would be reduced are related, but the relationship is not necessarily one-for-one, due to flood flows in some years and other mitigating factors. Under the settlement agreement, no water would be released for restoration purposes in the driest of years; thus, the agreement would not reduce deliveries to Friant contractors in those years. Additionally, in some years, the restoration flows released in late winter and early spring may free up space for additional runoff storage in Millerton Lake, potentially minimizing reductions in deliveries later in the year—assuming Millerton Lake storage is replenished. Consequently, how deliveries to Friant water contractors may be reduced in any given year is likely to depend on many factors. Regardless of the specifics of how much water may be released for fisheries restoration vis-à-vis diverted for off-stream purposes, the SJRRP will impact existing surface and groundwater supplies in and around the Friant Division service area and affect local economies. SJRRP construction activities are in the early stages, but planning efforts have targeted a completion date of 2024 for the first stage of construction efforts. CALFED Bay-Delta Restoration Program The Bay-Delta Restoration Program is a cooperative effort among the federal government, the State of California, local governments, and water users to proactively address the water management and aquatic ecosystem needs of California's Central Valley. The CALFED Bay-Delta Restoration Act ( P.L. 108-361 ), enacted in 2004, provided new and expanded federal authorities for six agencies related to the 2000 ROD for the CALFED Bay-Delta Program's Programmatic Environmental Impact Statement. These authorities were extended through FY2019 under the WIIN Act. The interim action plan for CALFED has four objectives: a renewed federal-state partnership, smarter water supply and use, habitat restoration, and drought and floodplain management. From FY2013 to FY2018, Reclamation funded its Bay-Delta restoration activities at approximately $37 million per year; the majority of this funding has gone for projects to address the degraded Bay-Delta ecosystem and includes federal activities under California WaterFix (see below section, " California WaterFix "). Other agencies receiving funding to carry out authorities under CALFED include DOI's U.S. Fish and Wildlife Service and U.S. Geological Survey; the Department of Agriculture's Natural Resources Conservation Service; the Department of Defense's Army Corps of Engineers; the Department of Commerce's National Oceanic and Atmospheric Administration; and the Environmental Protection Agency. Similar to Reclamation, these agencies report on CALFED expenditures that involve a combination of activities under "base" authorities and new authorities that were provided under the CALFED authorizing legislation. The annual CALFED crosscut budget records the funding for CALFED across all federal agencies. The budget generally is included in the Administration's budget request and contains CALFED programs, their authority, and requested funding. For FY2019, the Administration requested $474 million for CALFED activities. This figure is an increase from the FY2018 enacted level of $415 million. New Storage and Conveyance Reductions in available water deliveries due to hydrological and regulatory factors have caused some stakeholders, legislators, and state and federal government officials to look at other methods of augmenting water supplies. In particular, proposals to build new or augmented CVP and/or SWP water storage projects have been of interest to some policymakers. Additionally, the State of California is pursuing a major water conveyance project, the California WaterFix, with a nexus to CVP operations. New and Augmented Water Storage Projects The aforementioned CALFED legislation ( P.L. 108-361 ) also authorized the study of several new or augmented CVP storage projects throughout the Central Valley that have been ongoing for a number of years. These studies include Shasta Lake Water Resources Investigation, North of the Delta Offstream Storage Investigation (also known as Sites Reservoir), In-Delta Storage, Los Vaqueros Reservoir Expansion, and Upper San Joaquin River/Temperance Flat Storage Investigation ( Figure 6 ). Although the recommendations of these studies normally would be subject to congressional approval, Section 4007 of the WIIN Act authorized $335 million in Reclamation financial support for new or expanded federal and nonfederal water storage projects and provided that these projects could be deemed authorized, subject to a finding by the Administration that individual projects met certain criteria. In 2018 reporting to Congress, Reclamation recommended an initial list of seven projects that it concluded met the WIIN Act criteria. The projects were allocated $33.3 million in FY2017 funding that was previously appropriated for WIIN Act Section 4007 projects. Congress approved the funding allocations for these projects in enacted appropriations for FY2018 ( P.L. 115-141 ). Four of the projects receiving FY2017 funds ($28.05 million) were CALFED studies that would address water availability in the CVP: Shasta Dam and Reservoir Enlargement Project ($20 million for design and preconstruction); North-of-Delta Off-Stream Storage Investigation/Sites Reservoir Storage Project ($4.35 million for feasibility study); Upper San Joaquin River Basin Storage Investigation ($1.5 million for feasibility study); and Friant-Kern Canal Subsidence Challenges Project ($2.2 million for feasibility study). The enacted FY2018 Energy and Water appropriations bill further stipulated that $134 million of the amount set aside for additional water conservation and delivery projects be provided for Section 4007 WIIN Act storage projects (i.e., similar direction as FY2017). The enacted FY2019 bill set aside another $134 million for these purposes. Future reporting and appropriations legislation is expected to propose allocation of this and any other applicable funding. Congress also may consider additional directives for these and other efforts to address water supplies in the CVP, including approval of physical construction for one or more of these projects. Funding by the State of California also may influence the viability and timing of construction for some of the proposed projects. For example, in June 2018, the state announced significant bond funding for Sites Reservoir ($1.008 billion), as well as other projects. California WaterFix In addition to water storage, some have advocated for a more flexible water conveyance system for CVP and SWP water. An alternative was the California WaterFix, a project initiated by the State of California in 2015 to address some of the water conveyance and ecosystem issues in the Bay-Delta. The objective of this project was to divert water from the Sacramento River, north of the Bay-Delta, into twin tunnels running south along the eastern portion of the Bay-Delta and emptying into existing pumps that feed water into the CVP and SWP. In the spring of 2019, Governor Newsom of California canceled the plans for this project and introduced an alternative plan for conveying water through the Delta. DWR is creating plans to construct a single tunnel to convey water from the Sacramento River to the existing pumps in the Bay-Delta. DWR's stated reasons for supporting this approach are to protect water supplies from sea-level rise, saltwater intrusion, and earthquakes. The new plan is expected to take a "portfolio" approach that focuses on a number of interrelated efforts to make water supplies climate resilient. This approach includ es actions such as strengthening levees, protecting Delta water quality, and recharging groundwater, according to DWR. This project will require a new environmental review process for federal and state permits. It is being led by the Delta Conveyance Design and Construction Authority, a joint powers authority created by public water agencies to oversee the design and construction of the new conveyance system. DWR is expected to oversee the planning effort. The cost of the project is anticipated to be largely paid by public water agencies. The federal government's role in this project beyond evaluating permit applications and maintaining related CVP operations has not been defined. Congressional Interest Congress plays a role in CVP water management and previously has attempted to make available additional water supplies in the region by facilitating efforts such as water banking, water transfers, and construction of new and augmented storage. In 2016, Congress enacted provisions aiming to benefit the CVP and the SWP, including major operational changes in the WIIN Act and additional appropriations for western drought response and new water storage that have benefited (or are expected to benefit) the CVP. Congress also continues to consider legislation that would further alter CVP operational authorities and responsibilities related to individual units of the project. The below section discusses some of the main issues related to the CVP that may receive attention by Congress. CVP Operational Authorities Under the WIIN Act72 Title II, Subtitle J of the WIIN Act (enacted in December 2016) included multiple provisions related to the Bureau of Reclamation's operations of the CVP. Most of the WIIN Act's operational provisions are set to expire in 2021 (five years after the bill's enactment). In addition to overseeing the implementation of these operational provisions, Congress may also consider their amendment, extension, or repeal. The WIIN Act directed Reclamation to "maximize" CVP pumping (in accordance with applicable BiOps), allowed for increased pumping during certain temporary storm events, and authorized expedited reviews of water transfers, among other things. The WIIN Act also established a new standard for measuring the effects of water operations on species listed as endangered or threatened under the ESA, allowing most of the bill's actions to go forward unless they are determined to cause additional adverse effects on listed species beyond the range of the effects anticipated to occur for the duration of the species BiOp. Although the WIIN Act included some provisions from legislation that had been proposed dating back to the 112 th Congress, many of the controversial provisions from prior bills were not included in the act. Supporters of WIIN Act operational changes contended that these changes had the potential to make additional water available to users facing curtailed deliveries, while also improving the flexibility and responsiveness of the management and operations of the CVP and SWP. Opponents worried that the changes may have detrimental effects on species' survival in both the short and long terms and may limit agency efforts to manage water supplies for the benefit of species. Some of the notable CVP operational provisions in the WIIN Act aimed to provide the Administration with authority to make available more water supplies during periods in which pumping otherwise would have been limited. According to Reclamation, some changes authorized under the WIIN Act were implemented during the winter of 2017-2018. In particular, communication and transparency were reportedly increased for some operational decisions, allowing for reduced or rescheduled pumping restrictions. Additionally, as of spring 2018, WIIN Act allowances relaxed restrictions on inflow-to-export ratios related to the voluntary sale, transfer, or exchange of water that were used to affect a transfer resulting in additional exports of 50,000-60,000 AF. Reclamation has noted that hydrology has affected its ability to implement some of the act's provisions. Many of the WIIN Act changes have the potential to make their greatest impact during drought years. At the same time, some federal operational changes pursuant to the WIIN Act reportedly were proposed but were deemed incompatible with state requirements. Despite these limitations, WIIN Act authorities are likely to continue as a topic of congressional interest. Other Proposed Changes to CVP Operations Previous Congresses have considered legislation that proposed additional changes to CVP operations. For instance, in the 115 th Congress, H.R. 23 , the Gaining Responsibility on Water Act (GROW Act), incorporated a number of provisions that were included in previous California drought legislation in the 112 th , 113 th , and 114 th Congresses but were not enacted in the WIIN Act. Generally speaking, the GROW Act included provisions that would have loosened some environmental protections and restrictions that are imposed under the CVPIA, ESA, CWA, and SJRRP, and had the potential to increase exports under some scenarios. This legislation was not enacted. In addition to legislation proposing operational changes, the Administration has indicated its intent to propose administrative changes to CVP operations, including through reinitiation of consultation on long-term, system-wide operations of the CVP and SWP (see earlier section, " Endangered Species Act "). A 2018 White House memorandum directed DOC and DOI to finalize their new BiOps for the coordinated operation of the CVP and SWP by June 15, 2019, and to "suspend, revise, or rescind" regulations that unduly burden the project. It is unclear how the latter process might unfold or what particular regulations will be addressed. New Water Storage Projects As previously noted, Reclamation and the State of California have funded the study of new water storage projects in recent years, and future appropriations legislation and reporting may provide additional direction for these and other efforts to develop new water supplies for the CVP. As such, Congress may consider oversight, authorization, and/or funding for these projects. Some projects, such as the Shasta Dam and Reservoir Enlargement Project, have the potential to augment CVP water supplies but also have generated controversy for their potential to conflict with the intent of certain state laws. Although Reclamation has indicated its interest in pursuing the Shasta Dam raise project, the state has opposed the project under Governor Jerry Brown's Administration, and it is unclear how such a project might proceed absent state regulatory approvals and financial support. As previously noted, in early 2018, Reclamation proposed and Congress agreed to $20 million in design and preconstruction funding for the project. An additional $75 million was recommended by the Trump Administration in February 2019. In addition to the Shasta Dam and Reservoir Enlargement Project, Congress approved Reclamation-recommended study funding for Sites Reservoir/North of Delta Offstream Storage (NODOS), Upper San Joaquin River Basin Storage Investigation, and the Friant-Kern Canal Subsidence Challenges Project. Overall, from FY2017 to FY2019 Congress provided Reclamation with $335 million for new water storage projects authorized under Section 4007 of the WIIN Act. A significant share of this total is expected to be used on CVP and related water storage projects in California. Once the appropriations ceiling for these projects has been reached, funding for storage projects under Section 4007 would need to be extended by Congress before projects could proceed further. Legislation in the 116 th Congress has proposed to expedite certain water storage studies in the Central Valley, and could also provide mandatory funding for their eventual construction. For instance, Section 5 of H.R. 2473 would direct the Secretary to complete, as soon as practicable, the ongoing feasibility studies associated with Sites Reservoir, Del Puerto Canyon Reservoir, Los Vaqueros Reservoir, and San Luis Reservoir. Section 2 of the same legislation would authorize $100 million per year for fiscal years 2030 to 2060, without further appropriation (i.e., mandatory funding) for new Reclamation surface or groundwater storage projects. Conclusion The CVP is one of the largest and most complex water storage and conveyance projects in the world. Congress has regularly expressed interest in CVP operations and allocations, in particular pumping in the Bay-Delta. In addition to ongoing oversight of project operations and previously enacted authorities, a number of developing issues and proposals related to the CVP have been of interest to congressional decisionmakers. These include study and approval of new water storage and conveyance projects, updates to the state's Bay-Delta Water Quality Plan, and a multipronged effort by the Trump Administration to make available more water for CVP water contractors, in particular those south of the Delta. Future drought or other stressors on California water supplies are likely to further magnify these issues. Appendix. CVP Water Contractors The below sections provide a brief discussion some of the major contractor groups and individual contractors served by the CVP. Sacramento River Settlement Contractors and San Joaquin River Exchange Contractors (Water Rights Contractors) CVP water generally is made available for delivery first to those contractors north and south of the Delta with water rights that predate construction of the CVP: the Sacramento River Settlement Contractors and the San Joaquin River Exchange Contractors. (These contractors are sometimes referred to collectively as water rights contractors .) Water rights contractors typically receive 100% of their contracted amounts in most water year types. During water shortages, their annual maximum entitlement may be reduced, but not by more than 25%. Sacramento River Settlement Contractors include the 145 contractors (both individuals and districts) that diverted natural flows from the Sacramento River prior to the CVP's construction and executed a settlement agreement with Reclamation that provided for negotiated allocation of water rights. Reclamation entered into this agreement in exchange for these contractors withdrawing their protests related to Reclamation's application for water rights for the CVP. The San Joaquin River Exchange Contractors are four irrigation districts that agreed to "exchange" exercising their water rights to divert water on the San Joaquin and Kings Rivers for guaranteed water deliveries from the CVP (typically in the form of deliveries from the Delta-Mendota Canal and waters north of the Delta). During all years except for when critical conditions are declared, Reclamation is responsible for delivering 840,000 AF of "substitute" water to these users (i.e., water from north of the Delta as a substitute for San Joaquin River water). In the event that Reclamation is unable to make its contracted deliveries, these Exchange Contractors have the right to divert water directly from the San Joaquin River, which may reduce water available for other San Joaquin River water service contactors. Friant Division Contractors CVP's Friant Division contractors receive water stored behind Friant Dam (completed in 1944) in Millerton Lake. This water is delivered through the Friant-Kern and Madera Canals. The 32 Friant Division contractors, who irrigate roughly 1 million acres on the San Joaquin River, are contracted to receive two "classes" of water: Class 1 water is the first 800,000 AF available for delivery; Class 2 water is the next 1.4 million AF available for delivery. Some districts receive water from both classes. Generally, Class 2 waters are released as "uncontrolled flows" (i.e., for flood control concerns), and may not necessarily be scheduled at a contractor's convenience. Deliveries to the Friant Division are affected by a 2009 congressionally enacted settlement stemming from Friant Dam's effects on the San Joaquin River. The settlement requires reductions in deliveries to Friant users for protection of fish and wildlife purposes. In some years, some of these "restorations flows" have been made available to contractors for delivery as Class 2 water. Unlike most other CVP contractors, Friant Division contractors have converted their water service contracts to repayment contracts and have repaid their capital obligation to the federal government for the development of their facilities. In years in which Reclamation is unable to make contracted deliveries to Exchange Contractors, these contractors can make a "call" on water in the San Joaquin River, thereby requiring releases from Friant Dam that otherwise would go to Friant contractors. South-of-Delta (SOD) Water Service Contractors: Westlands Water District As shown in Figure 3 , SOD water service contractors account for a large amount (2.09 million AF, or 22.1%) of the CVP's contracted water. The largest of these contractors is Westlands Water District, which consists of 700 farms covering more than 600,000 acres in Fresno and Kings Counties. In geographic terms, Westlands is the largest agricultural water district in the United States; its lands are valuable and productive, producing more than $1 billion of food and fiber annually. Westlands' maximum contracted CVP water is in excess of 1.2 million AF, an amount that makes up more than half of the total amount of SOD CVP water service contracts and significantly exceeds any other individual CVP contactor. However, due to a number of factors, Westlands often receives considerably less water on average than it did historically. Westlands has been prominently involved in a number of policy debates, including proposals to alter environmental requirements to increase pumping south of the Delta. Westlands also is involved in a major proposed settlement with Reclamation, the San Luis Drainage Settlement. The settlement would, among other things, forgive Westlands' share of federal CVP repayment responsibilities in exchange for relieving the federal government of its responsibility to construct drainage facilities to deal with toxic runoff associated with naturally occurring metals in area soils. Central Valley Wildlife Refuges The 20,000 square mile California Central Valley provides valuable wetland habitat for migratory birds and other species. As such, it is the home to multiple state and federally-designated wildlife refuges north and south of the Delta. These refuges provide managed wetland habitat that receives water from the CVP and other sources. The Central Valley Project Improvement Act (CVPIA; P.L. 102-575 ), enacted in 1992, sought to improve conditions for fish and wildlife in these areas by providing them coequal priority with other project purposes. CVPIA also authorized a Refuge Water Supply Program to acquire approximately 555,000 AF annually in water supplies for 19 Central Valley refuges administered by three managing agencies: California Department of Fish and Wildlife, U.S. Fish and Wildlife Service, and Grassland Water District (a private landowner). Pursuant to CVPIA, Reclamation entered into long-term water supply contracts with the managing agencies to provide these supplies. Authorized refuge water supply under CVPIA is divided into two categories: Level 2 and Level 4 supplies. Level 2 supplies (approximately 422,251 AF, except in critically dry years, when the allocation is reduced to 75%) are the historical average of water deliveries to the refuges prior to enactment of CVPIA. Reclamation is obligated to acquire and deliver this water under CVPIA, and costs are 100% reimbursable by CVP contractors through a fund established by the act, the Central Valley Project Restoration Fund (CVPRF; see previous section, " Central Valley Project Improvement Act "). Level 4 supplies (approximately 133,264 AF) are the additional increment of water beyond Level 2 supplies for optimal wetland habitat development. This water must be acquired by Reclamation through voluntary measures and is funded as a 75% federal cost (through the CVPRF) and 25% state cost. In most cases, the Level 2 requirement is met; however, Level 4 supplies have not always been provided in full for a number of reasons, including a dearth of supplies due to costs in excess of available CVPRF funding and a lack of willing sellers. In recent years, costs for the Refuge Water Supply Program (i.e., the costs for both Level 2 and Level 4 water) have ranged from $11 million to $20 million.	Summary:	gov_report	1,024	null	88
crs_R45861	crs_R45861_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Relations between the United States and Russia have shifted over timeâsometimes reassuring and sometimes concerningâyet most experts agree that Russia is the only nation that poses, through its arsenal of nuclear weapons, an existential threat to the United States. While its nuclear arms have declined sharply in quantity since the end of the Cold War, Russia retains a stockpile of thousands of nuclear weapons, with more than 1,500 warheads deployed on missiles and bombers capable of reaching U.S. territory. The United States has always viewed these weapons as a potential threat to U.S. security and survival. It has not only maintained a nuclear deterrent to counter this threat, it has also signed numerous arms control treaties with the Soviet Union and later Russia in an effort to restrain and reduce the number and capabilities of nuclear weapons. The collapse of the 1987 Intermediate-range Nuclear Forces (INF) Treaty and the possible expiration of the 2010 New Strategic Arms Reduction Treaty (New START) in 2021 may signal the end to mutual restraint and limits on such weapons. The 2018 National Defense Strategy identifies the reemergence of long-term, strategic competition with Russia and China as the "the central challenge to U.S. prosperity and security." It notes that Russia seeks "to shatter the North Atlantic Treaty Organization and change European and Middle East security and economic structures to its favor." It argues that the challenge from Russia is clear when its malign behavior is "coupled with its expanding and modernizing nuclear arsenal." The 2018 Nuclear Posture Review (NPR) amplifies this theme. It notes that "Russia has demonstrated its willingness to use force to alter the map of Europe and impose its will on its neighbors, backed by implicit and explicit nuclear first-use threats." The NPR describes changes to Russia's nuclear doctrine and catalogues Russia's efforts to modernize its nuclear forces, arguing that these efforts have "increased, and will continue to increase, [Russia's] warhead delivery capacity, and provides Russia with the ability to rapidly expand its deployed warhead numbers." Congress has shown growing concern about the challenges Russia poses to the United States and its allies. It has expressed concerns about Russia's nuclear doctrine and nuclear modernization programs and has held hearings focused on Russia's compliance with arms control agreements and the future of the arms control process. Moreover, Members have raised questions about whether U.S. and Russian nuclear modernization programs, combined with the demise of restraints on U.S. and Russian nuclear forces, may be fueling an arms race and undermining strategic stability. This report seeks to advise this debate by providing information about Russia's nuclear doctrine, its current nuclear force structure, and its ongoing nuclear modernization programs. It is divided into five sections. The first section describes Russia's nuclear strategy and focuses on ways in which that strategy differs from that of the Soviet Union. The second section provides a historical overview of the Soviet Union's nuclear force structure. The third section details Russia's current force structure, including its long-range intercontinental ballistic missiles (ICBM), submarine-launched ballistic missiles (SLBM), and heavy bombers and shorter-range nonstrategic nuclear weapons. This section also highlights key elements of relevant infrastructure, including early warning, command and control, production, testing, and warhead storage. It also describes the key modernization programs that Russia is pursuing to maintain and, in some cases, expand its nuclear arsenal. The fourth section focuses on how arms control has affected the size and structure of Russia's nuclear forces. The fifth section discusses several potential issues for Congress. Strategy and Doctrine Soviet Doctrine The Soviet Union valued nuclear weapons for both their political and military attributes. From a political perspective, nuclear weapons served as a measure of Soviet status, while nuclear parity with the United States offered the Soviet Union prestige and influence in international affairs. From a military perspective, the Soviet Union considered nuclear weapons to be instrumental to its plans for fighting and prevailing in a conventional war that escalated to a nuclear one. As a leading Russian analyst has written, "for the first quarter-century of the nuclear age, the fundamental assumption of Soviet military doctrine was that, if a global war was unleashed by the 'imperialist West,' the Soviet Union would defeat the enemy and achieve victory, despite the enormous ensuing damage." Soviet views on nuclear weapons gradually evolved as the United States and the Soviet Union engaged in arms control talks in the wake of the 1962 Cuban Missile Crisis, and as the Soviet Union achieved parity with the United States. During the 1960s, both countries recognized the reality of the concept of "Mutually Assured Destruction" (MAD)âa situation in which both sides had nuclear retaliatory capabilities that prevented either side from prevailing in an all-out nuclear war. Analysts argue that the reality that neither side could initiate a nuclear war without facing the certainty of a devastating retaliatory attack from the other was codified in the agreements negotiated during the Strategic Arms Limitation Talks (SALT). With the signing of the 1972 Anti-Ballistic Missile (ABM) Treaty, both sides accepted limits on their ability to protect themselves from a retaliatory nuclear attack, thus presumably reducing incentives for either side to engage in a nuclear first strike. The Soviet Union offered rhetorical support to the nonuse of nuclear weapons throughout the 1960s and 1970s. At the time, this approach placed the Soviet Union on the moral high ground with nonaligned nations during the negotiations on the Nuclear Nonproliferation Treaty. The United States and its NATO allies refused to adopt a similar pledge, maintaining a "flexible response" policy that allowed for the possible use of nuclear weapons in response to a massive conventional attack by the Soviet Union and its Warsaw Pact allies. At the same time, however, most U.S. analysts doubted that Soviet support for the nonuse of nuclear weapons actually influenced Soviet warfighting plans, even though Soviet-Warsaw Pact advantages in conventional forces along the Central European front meant that the Soviet Union would not necessarily need to use nuclear weapons first. U.S. and NATO skepticism about a Soviet nonuse policy reflected concerns about the Soviet military buildup of a vast arsenal of battlefield and shorter-range nuclear delivery systems. These systems could have been employed on a European battlefield in the event of a conflict with the United States and NATO. On the other hand, interviews with Soviet military officials have suggested that this theater nuclear buildup was intended to "reduce the probability of NATO's first use [of nuclear weapons] and thereby to keep the war conventional." In addition, many U.S. commentators feared that the Soviet Union might launch a "bolt from the blue" attack against U.S. territory even in the absence of escalation from a conflict in Europe. Other military analysts suspect that the Soviet Union would not have initiated such an attack and likely did not have the capability to conduct an disarming attack against U.S. nuclear forcesâa capability that would have been needed to restrain the effectiveness of a U.S. retaliatory strike. Instead, the Soviet Union might have launched its weapons on warning of an imminent attack, which has sometimes been translated as a retaliatory reciprocal counter strike , or in a retaliatory strike after initial nuclear detonations on Soviet soil. Many believe that, in practice, the Soviet Union planned only for these latter retaliatory strikes. Regardless, some scholars argue that the Soviet leadership likely retained the option of launching a first strike against the United States. Improvements to the accuracy of U.S. ballistic missiles raised concerns in the Soviet Union about the ability of retaliatory forces to survive a U.S. attack. For Soviet leaders, the increasing vulnerability of Soviet missile silos called into question the stability of mutual deterrence and possibly raised questions about the Soviet Union's international standing and bargaining position in arms control negotiations with the United States. In 1982, General Secretary Leonid Brezhnev officially announced that the Soviet Union would not be the first nation to use nuclear weapons in a conflict. When General Secretary Brezhnev formally enunciated the Soviet no-first-use policy in the 1980s, actual Soviet military doctrine may have become more consistent with this declaratory doctrine, as the Soviet military hoped to keep a conflict in the European theater conventional. In addition, by the end of the decade, and especially in the aftermath of the accident at the Chernobyl Nuclear Power Plant, Soviet leader Mikhail Gorbachev believed that the use of nuclear weapons would lead to catastrophic consequences. Russian Nuclear Doctrine Russia has altered and adjusted Soviet nuclear doctrine to meet the circumstances of the post-Cold War world. In 1993, Russia explicitly rejected the Soviet Union's no-first-use pledge, in part because of the weakness of its conventional forces at the time. Russia has subsequently revised its military doctrine and national security concept several times over the past few decades, with successive versions in the 1990s appearing to place a greater reliance on nuclear weapons. For example, the national security concept issued in 1997 allowed for the use of nuclear weapons "in case of a threat to the existence of the Russian Federation as an independent sovereign state." The military doctrine published in 2000 expanded the circumstances in which Russia might use nuclear weapons, including in response to attacks using weapons of mass destruction against Russia or its allies, as well as in response to "large-scale aggression utilizing conventional weapons in situations critical to the national security of the Russian Federation." These revisions have led to questions about whether Russia would employ nuclear weapons preemptively in a regional war or only in response to the use of nuclear weapons in a broader conflict. In mid-2009, Nikolai Patrushev, the head of Russia's Security Council, hinted that Russia would have the option to launch a "preemptive nuclear strike" against an aggressor "using conventional weapons in an all-out, regional, or even local war." However, when Russia updated its military doctrine in 2010, it did not specifically provide for the preemptive use of nuclear weapons. Instead, the doctrine stated that Russia "reserves the right to utilize nuclear weapons in response to the utilization of nuclear and other types of weapons of mass destruction against it and (or) its allies, and also in the event of aggression against the Russian Federation involving the use of conventional weapons when the very existence of the state is under threat." Compared with the 2000 version, which allowed for nuclear use "in situations critical to the national security of the Russian Federation," this change seemed to narrow the conditions for nuclear weapons use. The language on nuclear weapons in Russia's most current 2014 military doctrine is similar to that in the 2010 doctrine. Analysts have identified several factors that contributed to Russia's increasing reliance on nuclear weapons during the 1990s. First, with the demise of the Soviet Union and Russia's subsequent economic collapse, Russia no longer had the means to support large and effective conventional forces. Conflicts in the Russian region of Chechnya and, in 2008, neighboring Georgia also highlighted seeming weaknesses in Russia's conventional military forces. In addition, Russian analysts saw emerging threats in other neighboring post-Soviet states; many analysts believed that by even implicitly threatening that it might resort to nuclear weapons, Russia hoped it could enhance its ability to deter the start of, or NATO interference in, such regional conflicts. Russia's sense of vulnerability, and its view that its security was being increasingly threatened, also stemmed from NATO enlargement. Russia has long feared that an expanding alliance would create a new challenge to Russia's security, particularly if NATO were to move nuclear weapons closer to Russia's borders. These concerns contributed to the statement in the 1997 doctrine that Russia might use nuclear weapons if its national survival was threatened. For many in Russia, NATO's air campaign in Kosovo in 1999 underlined Russia's growing weakness and NATO's increasing willingness to threaten Russian interests. Russia's 2000 National Security Concept noted that the level and scope of the military threat to Russia was growing. It cited, specifically, "the desire of some states and international associations to diminish the role of existing mechanisms for ensuring international security." It also noted that "a vital task of the Russian Federation is to exercise deterrence to prevent aggression on any scale, nuclear or otherwise, against Russia and its allies." Consequently, it concluded, Russia "must have nuclear forces capable of delivering specified damage to any aggressor state or a coalition of states in any situation." The potential threat from NATO remained a concern for Russia in its 2010 and 2014 military doctrines. The 2010 doctrine stated that the main external military dangers to Russia were "the desire to endow the force potential of the North Atlantic Treaty Organization (NATO) with global functions carried out in violation of the norms of international law and to move the military infrastructure of NATO member countries closer to the borders of the Russian Federation, including by expanding the bloc." It also noted that Russia was threatened by "the deployment of troop contingents of foreign states (groups of states) on the territories of states contiguous with the Russian Federation and its allies and also in adjacent waters" (a reference to the fact that NATO now included states that had been part of the Warsaw Pact). Russian concerns also extend ed to U.S. missile defense deployed on land in Poland and Romania and at sea near Russian territory as a part of the European Phased Adaptive Approach (EPAA). Russia's possession of a large arsenal of nonstrategic nuclear weapons and dual-capable systems, combined with recent statements designed to remind others of the strength of Russia's nuclear deterrent, have led some to argue that Russia has increased the role of nuclear weapons in its military strategy and military planning. Before Russia's invasion of Ukraine in 2014, some analysts argued that Russia's nonstrategic nuclear weapons had "no defined mission and no deterrence framework [had] been elaborated for them." However, subsequent Russian statements, coupled with military exercises that appeared to simulate the use of nuclear weapons against NATO members, have led many to believe that Russia might threaten to use its shorter-range, nonstrategic nuclear weapons to coerce or intimidate its neighbors. Such a nuclear threat could occur before or during a conflict if Russia believed that a threat to use nuclear weapons could lead its adversaries, including the United States and its allies, to back down. Consequently, several analysts have argued that Russia has adopted an "escalate to de-escalate" nuclear doctrine. They contend that when faced with the likelihood of defeat in a military conflict with NATO, Russia might threaten to use nuclear weapons in an effort to coerce NATO members to withdraw from the battlefield. This view of Russian doctrine has been advanced by officials in the Trump Administration and has informed decisions made during the 2018 Nuclear Posture Review. However, Russia does not use the phrase "escalate to de-escalate" in any versions of its military doctrine, and debate exists about whether this is an accurate characterization of Russian thinking about nuclear weapons. Conflicting statements from Russia have contributed to disagreements among U.S. analysts over the circumstances under which Russia would use nuclear weapons. During a March 2018 speech to the Federal Assembly, President Putin seemed to affirm the broad role for nuclear weapons that Russia's military doctrine assigns: I should note that our military doctrine says Russia reserves the right to use nuclear weapons solely in response to a nuclear attack, or an attack with other weapons of mass destruction against the country or its allies, or an act of aggression against us with the use of conventional weapons that threaten the very existence of the state. This all is very clear and specific. As such, I see it is my duty to announce the following. Any use of nuclear weapons against Russia or its allies, weapons of short, medium or any range at all, will be considered as a nuclear attack on this country. Retaliation will be immediate, with all the attendant consequences. There should be no doubt about this whatsoever. Putin and other Russian officials have extensively used what some Western analysts have described as "nuclear messaging" in the wake of Russia's annexation of Crimea and instigation of conflict in eastern Ukraine. Their references to Russia's nuclear capabilities have seemed like an effort to signal that Russia's stakes are higher than those of the West and that Russia is willing to go to great lengths to protect its interests. At times, however, President Putin has offered a more restrained view of the role of nuclear weapons. In 2016, Putin stated that "brandishing nuclear weapons is the last thing to do. This is harmful rhetoric, and I do not welcome it." He also dismissed suggestions that Russia would consider using nuclear weapons offensively, stating that "nuclear weapons are a deterrent and a factor of ensuring peace and security worldwide. They should not be considered as a factor in any potential aggression, because it is impossible, and it would probably mean the end of our civilization." In October 2018, President Putin made a statement that some analysts interpreted as potentially moving toward a "sole purpose" doctrine, by which Russia would use nuclear weapons only in response to others' use of nuclear weapons. Putin declared: There is no provision for a preventive strike in our nuclear weapons doctrine. Our concept is based on a retaliatory reciprocal counter strike. This means that we are prepared and will use nuclear weapons only when we know for certain that some potential aggressor is attacking Russia, our territory [with nuclear weapons]â¦. Only when we know for certainâand this takes a few seconds to understandâthat Russia is being attacked will we deliver a counterstrikeâ¦. Of course, this amounts to a global catastrophe, but I would like to repeat that we cannot be the initiators of such a catastrophe because we have no provision for a preventive strike. Soviet Nuclear Forces The Soviet Union conducted its first explosive test of a nuclear device on August 29, 1949, four years after the United States employed nuclear weapons against Japan at the end of World War II. After this test, the Soviet Union initiated the serial production of nuclear devices and work on thermonuclear weapons, and it began to explore delivery methods for its nascent nuclear arsenal. The Soviet Union tested its first version of a thermonuclear bomb in 1953, two years after the United States crossed that threshold. The Soviet stockpile of nuclear warheads grew rapidly through the 1960s and 1970s, peaking at more than 40,000 warheads in 1986, according to unclassified estimates (see Figure 1 ). Within this total, around 10,700 warheads were carried by long-range delivery systems, the strategic forces that could reach targets in the United States in the mid-1980s. By the 1960s, the Soviet Union, like the United States, had developed a triad of nuclear forces: land-based intercontinental ballistic missiles (ICBMs), submarine-launched ballistic missiles (SLBMs), and heavy bombers equipped with nuclear weapons. In 1951, the Soviet Union conducted its first air drop test of a nuclear bomb and began to deploy nuclear weapons with its Long-Range Aviation forces soon thereafter. Bomber aircraft included the M-4 Bison, which barely had the range needed to attack the United States and then return home. The Tu-95 Bear strategic bomber, which had a longer range, entered service in 1956. Later modifications of the Bear bomber have since been the mainstay of the Soviet/Russian nuclear triad's air leg. In 1956, the Soviet Union tested and deployed its first ballistic missile with a nuclear warhead, the SS-3, a shorter-range, or theater, missile. It tested and deployed the SS-4, a theater ballistic missile that would be at the heart of the 1962 Cuban Missile Crisis, by 1959. Soviet missile ranges were further extended with the deployment of an intermediate-range ballistic missile, the SS-5. The 1957 launch of the Sputnik satellite on a modified SS-6 long-range missile heralded the Soviet Union's development of ICBMs. By the end of the decade, the Soviet Union had launched an SS-N-1 SLBM from a Zulu-class attack submarine of the Soviet Navy. The undersea leg of the triad would steadily progress over the following decade with the deployment of SLBMs on the Golf class attack submarine and then the Hotel and Yankee class nuclear-powered submarines. Manned since 1959 by a separate military service called the Strategic Rocket Forces, the ICBM leg came to dominate the Soviet nuclear triad. During the 1960s, the Soviet Union rapidly augmented its force of fixed land-based ICBMs, expanding from around 10 launchers and two types of missiles in 1961 to just over 1,500 launchers with eight different types of missiles in 1971. Because these missiles were initially based on soft launch pads or in vertical silos that could not withstand an attack from U.S. nuclear warheads, many concluded that the Soviet Union likely planned to use them in a first strike attack against U.S. missile forces and U.S. territory. Moreover, the United States believed that the design of Soviet ICBMs provided the Soviet Union with the ability to contemplate, and possibly execute, a successful disarming first strike against U.S. land-based forces. Half of the ICBM missile types were different variants of the largest missile, the SS-9 ICBM. The United States referred to this as a "heavy" ICBM due to its significant throwweight, which allowed it to carry a higher-yield warhead, estimated at around 20 megatons. The United States believed, possibly inaccurately, that the missile's combination of improved accuracy and high yield posed a unique threat to U.S. land-based missiles. Concerns about Soviet heavy ICBMs persisted throughout the Cold War, affecting both U.S. force structure decisions and U.S. proposals for arms control negotiations. Although smaller and less capable than its land-based forces, the sea-based leg of the Soviet triad was built up during the 1960s, with the deployment of SLBMs on Golf-, Hotel-, and Yankee- class submarines. These submarines carried intermediate-range (rather than intercontinental-range) missiles, but their mobility allowed the Soviet Union to threaten targets throughout Europe and, to a lesser extent, in the United States. The Soviet Union began the decade with 30 missile launchers on 10 submarines and ended it with 228 launchers on 31 submarines. By the end of the 1960s, the United States and the Soviet Union had initiated negotiations to limit the numbers of launchers for long-range missiles. The emerging parity in numbers of deployed nuclear-armed missiles, coupled with several nuclear crises, had paved the way for a recognition of their mutual deterrence relationship and arms control talks. As noted below, the Interim Agreement on Offensive Armsânegotiated as part of the Strategic Arms Limitation Talks (SALT I) and signed in 1972âcapped the construction and size of ICBM silo launchers (in an effort to limit the number of heavy ICBMs in the Soviet force) and limited the number of launchers for SLBMs. It did not, however, limit the nuclear warheads that could be carried by ICBMs or SLBMs. As a result, the Soviet Union continued to modernize and expand its nuclear forces in the 1970s. During this time, the Soviet Union commissioned numerous Delta-class strategic missile submarines, armed with the single-warhead, intercontinental-range SS-N-8 SLBM; developed the Tu-22M Backfire intermediate-range bomber aircraft; began to develop a new supersonic strategic heavy bomber (eventually the Tu-160 Blackjack); and began to deploy the SS-20 intermediate-range ballistic missile in 1976, which, along with other missiles of its class, would be eliminated under the 1987 INF Treaty. The Soviet Union also pursued an extensive expansion of its land-based ICBM force. It not only developed a number of new types of ICBMs, but, in 1974, it began to deploy these missiles with multiple warheads (known as MIRVs, or multiple independent reentry vehicles). During this time frame the Soviet Union developed, tested, and deployed the 4-warhead SS-17 ICBM, 10-warhead SS-18 ICBM (a new heavy ICBM that replaced the SS-9), and 6-warhead SS-19 ICBM. Because each of these missiles could carry multiple warheads, the SALT I limit on ICBM launchers did not constrain the number of warheads on the Soviet missile force. Moreover, the ICBM force began to dominate the Soviet triad during this time (see Figure 2 ). U.S. analysts and officials expressed particular concern about the heavy SS-18 ICBM and its subsequent modifications. The Soviet Union deployed 308 of these missiles, each with the ability to carry up to 10 warheads and numerous decoys and penetration aides designed to confuse missile defense radars. These concerns contributed to a debate in the U.S. defense community about a "window of vulnerability" in the U.S.-Soviet nuclear balance due to a Soviet advantage in cumulative ballistic missile throwweight. Some asserted that the Soviets' throwweight advantage could translate into an edge in the number of warheads deployed on land-based missiles. They postulated that the Soviet Union could attack all U.S. land-based missiles with just a portion of the Soviet land-based force, leaving it with enough warheads after an initial nuclear attack to dominate and possibly coerce the United States into surrendering without any retaliation. Others disputed this theory, noting that the United States maintained a majority of its nuclear warheads on sea-based systems that could survive a Soviet first strike and that the synergy of U.S. land-based, sea-based, and air-delivered weapons would complicate, and therefore deter, a Soviet first strike. Recent research examining the records of Soviet planners and officials suggests that Soviet missile developments during the 1970s did not seek to achieve, and did not have the capabilities needed for, a first-strike advantage or a warfighting posture. Instead, the Soviet Union began to harden its missile silos so they could survive attack and to develop an early warning system, thus moving toward a second-strike capability. Moreover, the 1980s saw Soviet planners worrying about maintaining their second-strike capability in light of U.S. strategic offense and missile defense programs. The United States was modernizing its land-based ICBMs, ballistic missile submarines and SLBMs, and heavy bombers. Each of the new U.S. missiles would carry multiple warheads, and the Soviets believed all would have the accuracy to target and destroy Soviet land-based missiles. In March 1983, President Reagan announced the Strategic Defense Initiative, a missile defense program that he pledged would make ballistic missiles "impotent and obsolete." The SS-18 ICBM, with its capacity to carry 10 warheads and penetration aids, provided a counter to these U.S. capabilities. During the 1980s, development continued across all three legs of the Soviet nuclear triad. The Typhoon-class strategic submarine and the Tu-160 Blackjack bomber entered into service. Anti-ship cruise missiles were joined by modern AS-15 land-attack cruise missiles. The Soviet Union continued to improve the accuracy of its fixed, silo-based missiles and began to deploy mobile ICBMs, adding both the road-mobile, single warhead SS-25 missile and the rail-mobile, 10-warhead SS-24 missile. By the end of the 1980s, prior to the signing of the 1991 Strategic Arms Reduction Treaty (START), the Soviet Union had completed the backbone of what was to become the Russian nuclear triad of the 1990s. Its air leg consisted of Bear, Backfire, and Blackjack bombers. Its undersea leg consisted of Delta- and Typhoon-class submarines with MIRV SLBMs. Its ICBM leg consisted of the SS-18, SS-19, and SS-25 missiles. During the Cold War, the Soviet Union produced and deployed a wide range of delivery vehicles for nonstrategic nuclear weapons. At different times during the period, it deployed devices small enough to fit into a suitcase-sized container; nuclear mines; shells for artillery; short-, medium-, and intermediate-range ballistic missiles; short-range, air-delivered missiles; and gravity bombs. The Soviet Union deployed these weapons at nearly 600 bases, with some located in Warsaw Pact countries in Eastern Europe, some in the Soviet Union's non-Russian republics along its western and southern perimeter, and others throughout the Soviet Union. Estimates vary, but many analysts believe that by 1991 the Soviet Union had more than 20,000 of these weapons. Before the collapse of the Warsaw Pact in 1989, the numbers may have been higher, in the range of 25,000 weapons. Russian Nuclear Forces Like the Soviet Union, the Russia Federation maintains a triad of nuclear forces consisting of ICBMs, SLBMs, and heavy bombers. The total number of warheads in the Soviet and Russian arsenal and the number deployed on Soviet and Russian strategic forces began to decline in the late 1980s (see Figure 1 and Figure 2 above). These reductions were primarily driven by the limits in the 1991 START I Treaty, the 2002 Strategic Offensive Reductions Treaty, and the 2010 New START Treaty. The reductions also reflect the retirement of many older Soviet-era missiles and their replacement with new missiles that carry fewer warheads, as well as the effects of the fiscal crisis in the late 1990s, which slowed the deployment of the next generation of Russian missiles and submarines. Moreover, under the Nunn-Lugar Cooperative Threat Reduction program, the United States helped Russia, Ukraine, Belarus, and Kazakhstan move Soviet-era nuclear weapons back to Russian territory and to dismantle portions of the Soviet Union's nuclear arsenal. Russia deploys its strategic nuclear forces at more than a dozen bases across its territory. These bases are shown on Figure 4 , below. Russia is currently modernizing most of the components of its nuclear triad. The current phase of modernization essentially began in 1998. The Soviet Union replaced its land-based missiles frequently, with new systems entering the force every 10-15 years and modifications appearing every few years. Russia has not kept up this pace. When it began the most recent modernization cycle, it was in the midst of a financial crisis. The crisis not only reduced the number of new missiles entering the force each year, but slowed the process. As a result, some of the systems that have had been under development since the late 1990s and early 2000s began to enter the force in the late 2000s, but others will not do so until the 2020s. Active Forces Intercontinental Ballistic Missiles As was the case during the Soviet era, Russia's Strategic Rocket Forces (SRF) are a separate branch of the Russian armed forces. These forces are still the mainstay of Russia's nuclear triad. Today, the SRF includes three missile armies, which, in turn, comprise 11 missile divisions (see Figure 3 ). These divisions are spread across Russia's territory, from Vypolzovo in the west to the Irkutsk region in eastern Siberia. The Strategic Rocket Forces are estimated to have approximately 60,000 personnel. According to official and unofficial sources, Russia's ICBM force currently comprises 318 missiles that can carry up to 1,165 warheads, although only about 860 warheads are deployed and available for use. Over half of these missiles are MIRVed, carrying multiple warheads. Russia is modernizing its ICBM force, replacing the last of the missiles remaining from the Soviet era with new single warhead and multiple warhead missiles. According to U.S. estimates, Russia is likely to complete this modernization around 2022. It is anticipated that, after modernization, Russia's ICBM force will come to rely primarily on two missiles: the single-warhead SS-27 Mod 1 (Topol-M) and the SS-27 Mod 2 (Yars), which can carry up to 4 MIRV warheads. As discussed below, Russia is developing a new heavy ICBM, known as the Sarmat (SS-X-30), which is expected to deploy with 10 or more warheads on each missile. It may also carry the new Avangard hypersonic glide vehicle, also described below. According to unclassified reports, Russia has pursued other projects, including an intermediate-range version of the SS-27 Mod 2 (known as the RS-26) and a rail-mobile ICBM called Barguzin, but their future is unclear. Submarine-Launched Ballistic Missiles Russia's Strategic Naval Forces are a part of the Russian Navy. Ballistic missile submarines are deployed with the Northern Fleet, headquartered in Severomorsk in the Murmansk region, and the Pacific Fleet, headquartered in Vladivostok. The Strategic Naval Forces have 10 strategic submarines of three different types: Delta, Typhoon, and Borei class. Some of these are no longer operational. The last submarine of the Typhoon class is used as a testbed for launches of the Bulava missile, which is deployed on the Borei-class submarines. The Delta and Borei-class submarines can each carry 16 SLBMs, with multiple warheads on a missile, "for a combined maximum loading of more than 700 warheads." However, because Russia may have reduced the number of warheads on some of the missiles to comply with limitations set by the 2010 New START Treaty, the submarine fleet may carry only 600 warheads. Most of the submarines in Russia's fleet are the older Delta class, including one Delta III submarine and 6 Delta IV submarines. The last of these was built in 1992; they are based with Russia's Northern Fleet. Although older Delta submarines were deployed with three-warhead SS-N-18 missiles, the Delta IV submarines carry the four-warhead SS-N-23 missile. An upgraded version of this missile, known as the Sineva system, entered into service in 2007. Another modification, known as the Liner (or Layner), could reportedly carry up to 10 warheads. Russia began constructing the lead ship in its Borei class of ballistic missile submarines (SSBN) in 1996. After numerous delays, the lead ship joined the Northern Fleet in 2013. According to public reports, Russia will eventually deploy 10 Borei-class submarines, with 5 in the Pacific Fleet and 5 in the Northern Fleet. Three submarines are currently in service, all in the Northern Fleet, and five more are in "various stages of construction." The latter five submarines will be an improved version, known as the Borei-A/II. The first of these has recently completed its sea trials. Russia plans to complete the first eight ships by 2023 and to finish the last two by 2027. Borei-class submarines can carry 16 of the SS-N-32 Bulava missiles; each missile can carry six warheads. The Bulava missile began development in the late 1990s. It experienced numerous test failures before it entered service in 2018. Heavy Bombers Russia's strategic aviation units are part of the Russian Aerospace Forces' Long-Range Aviation Command. This command includes two divisions of Tu-160 (Blackjack) and Tu-95MS (Bear H) aircraft, which are the current mainstay of Russia's strategic bomber fleet. These are located in the Saratov region, in southwestern Russia, and the Amurskaya region, in Russia's Far East. Unclassified sources estimate that Russia has 60 to 70 bombers in its inventoryâ50 of them count under the New START Treaty. Around 50 of these are Tu-95MS Bear bombers; the rest are Tu-160 Blackjack bombers. The former can carry up to 16 AS-15 (Kh-55) nuclear-armed cruise missiles, while the latter can carry up to 12 AS-15 nuclear-armed cruise missiles. Both bombers can also carry nuclear gravity bombs, though experts contend that the bombers would be vulnerable to U.S. or allied air defenses in such a delivery mission. Russia has recently modernized both of its bombers, fitting them with a new cruise missile system, the conventional AS-23A (Kh-101) and the nuclear AS-23B (Kh-102). A newer version of the Tu-160, which is expected to include improved stealth characteristics and a longer range, is set to begin production in the mid-2020s. Experts believe the fleet will then include around 50-60 aircraft, with the eventual development of a new stealth bomber, known as the PAK-DA, as a part of Russia's long-term plans. Nonstrategic Nuclear Weapons Russia has a variety of delivery systems that can carry nuclear warheads to shorter and intermediate ranges. These systems are generally referred to as nonstrategic nuclear weapons, and they do not fall under the limits in U.S.-Soviet or U.S.-Russian arms control treaties. According to unclassified reports, Russia has a number of nuclear weapons available for use by its "naval, tactical air, air- and missile defense forces, as well as on short-range ballistic missiles." It is reportedly engaged in a modernization effort focused on "phasing out Soviet-era weapons and replacing them with newer versions." Unclassified estimates place the number of warheads assigned to nonstrategic nuclear weapons at 1,830. Recent analyses indicate that Russia is both modernizing existing types of short-range delivery systems that can carry nuclear warheads and introducing new versions of weapons that have not been a part of the Soviet/Russian arsenal since the latter years of the Cold War. In May 2019, Lt. Gen. Robert P. Ashley of the Defense Intelligence Agency (DIA) raised this point in a public speech. He stated that Russia has 2,000 nonstrategic nuclear warheads and that its stockpile "is likely to grow significantly over the next decade." He also stated that Russia is adding new military capabilities to its existing stockpile of nonstrategic nuclear weapons, including those employable by ships, aircraft, and ground forces. These nuclear warheads include theater- and tactical-range systems that Russia relies on to deter and defeat NATO or China in a conflict. Russia's stockpile of non-strategic nuclear weapons [is] already large and diverse and is being modernized with an eye towards greater accuracy, longer ranges, and lower yields to suit their potential warfighting role. We assess Russia to have dozens of these systems already deployed or in development. They include, but are not limited to: short- and close-range ballistic missiles, ground-launched cruise missiles, including the 9M729 missile, which the U.S. Government determined violates the Intermediate-Range Nuclear Forces or INF Treaty, as well as antiship and antisubmarine missiles, torpedoes, and depth charges. It is not clear from General Ashley's comments, or from many of the other assessments of Russia's nonstrategic nuclear forces, whether Russia will deploy these new delivery systems with nuclear warheads. Many of Russia's medium- and intermediate-range missile systems, including the Kalibr sea-launched cruise missile and the Iskander ballistic and cruise missiles, are dual-capable and can carry either nuclear or conventional warheads. This is also likely true of the new 9M729 land-based, ground-launched cruise missile, the missile that the United States has identified as a violation of the 1987 INF Treaty. It unclear why Russia retains, and may expand, its stockpile of nonstrategic nuclear weapons. Some argue that these weapons serve to bolster Russia's less capable conventional military forces and assert that as Russia develops more capable advanced conventional weapons, it may limit its nonstrategic modernization program and retire more of these weapons than it acquires. Others, however, see Russia's modernization of its nonstrategic nuclear weapons as complementary to an "escalate to de-escalate" nuclear doctrine and argue that Russia will expand its nonstrategic nuclear forces as it raises the profile of such weapons in its doctrine and warfighting plans. Key Infrastructure Early Warning Russia deploys an extensive early warning system. Operated by its Aerospace Forces, the system consists of a network of early warning satellites that transmit to two command centers: one in the East, in the Khabarovsk region, and one in the West, in the Kaluga region. The data are then transmitted to a command center in the Moscow region. Russia also operates an extensive network of ground-based radars across Russia, as well as in neighboring Kazakhstan and Belarus, that are used for early warning of missile launches and to monitor objects at low-earth orbits. Russia uses the Okno observation station, located in Tajikistan, to monitor of objects that orbit at higher altitudes. Command and Control The Russian President is the Supreme Commander in Chief of the Russian Armed Forces, and he has the authority to direct the use of nuclear weapons. According to a 2016 DIA report, "The General Staff monitors the status of the weapons of the nuclear triad and will send the direct command to the launch crews following the president's decision to use nuclear weapons. The Russians send this command over multiple C2 systems, which creates a redundant dissemination process to guarantee that they can launch their nuclear weapons." According to DIA, Russia "also maintains the Perimetr system, which is designed to ensure that a retaliatory launch can be ordered when Russia is under nuclear attack." It is unknown whether the order to transfer warheads from central storage and release them to the forces is part of the launch authorization. Production, Testing, and Storage Russia has an extensive infrastructure of facilities for the production of nuclear weapons and missiles, although it has consolidated and reduced the size of this infrastructure since the end of the Cold War. Moreover, Russia has improved the security of its nuclear weapons facilities through U.S.-Russian cooperation under the Nunn-Lugar CTR program. Russia has about a dozen research institutes and facilities that participate in the design and manufacture of nuclear and nonnuclear components for its nuclear weapons, provide stockpile support, and engage in civilian nuclear and other research. Russia, which has a significant stockpile of weapons-usable materials, no longer produces highly enriched uranium or plutonium for use in nuclear weapons. Russia's nuclear weapons are stored at approximately 12 national central storage sites. According to analysts, Russia also maintains 34 base-level storage facilities (see Appendix B ). A special unit, the 12 th Main Directorate (GUMO), is responsible for security, transportation, and handling of the warheads. In a period immediately preceding a conflict, it is anticipated that nuclear warheads could be transferred from the national central storage sites to the base-level facilities. Russia ratified the Comprehensive Test Ban Treaty (CTBT) in 2000. Although this treaty has yet to enter into force, Russia claims it has refrained from explosive nuclear testing in accordance with the treaty's requirements. Russia conducts hydrodynamic tests, which do not produce a nuclear yield, at a site located on Novaya Zemlya, an archipelago located in the Arctic Ocean. In his May 2019 speech, DIA Director General Ashley stated that "the United States believes that Russia probably is not adhering to its nuclear testing moratorium in a manner consistent with the 'zero-yield' standard." However, when questioned about this assertion, he said that the U.S. intelligence community does not have "specific evidence that Russia had conducted low-yield nuclear tests" but that the DIA thinks Russia has "the capability to do that." Key Modernization Programs In addition to replacing aging Soviet-era ICBMs, SLBMs, and ballistic missile submarines, Russia is developing several kinds of nuclear delivery vehicles. Some of these, like the Sarmat ICBM, may replicate capabilities that already exist; others could expand the force with new types of delivery systems not previously deployed with nuclear warheads. President Putin unveiled most of these systems during his March 1, 2018, annual State of the Nation address to the Federal Assembly, when he presented a range of weapons systems currently under development in Russia. His speech also featured videos and animations of new weapons systems. During his speech, President Putin explicitly linked Russia's new strategic weapons programs to the U.S. withdrawal from the ABM Treaty in 2002. He said: We did our best to dissuade the Americans from withdrawing from the treaty. All in vain. The US pulled out of the treaty in 2002. Even after that we tried to develop constructive dialogue with the Americans. We proposed working together in this area to ease concerns and maintain the atmosphere of trust. At one point, I thought that a compromise was possible, but this was not to be. All our proposals, absolutely all of them, were rejected. And then we said that we would have to improve our modern strike systems to protect our security . [Emphasis added] In reply, the US said that it is not creating a global BMD system against Russia, which is free to do as it pleases, and that the US will presume that our actions are not spearheaded against the USâ¦. â¦ the US, is permitting constant, uncontrolled growth of the number of anti-ballistic missiles, improving their quality, and creating new missile launching areas. If we do not do something, eventually this will result in the complete devaluation of Russia's nuclear potential. Meaning that all of our missiles could simply be intercepted. Let me recall that the United States is creating a global missile defence system primarily for countering strategic arms that follow ballistic trajectories. These weapons form the backbone of our nuclear deterrence forces, just as of other members of the nuclear club. As such, Russia has developed, and works continuously to perfect, highly effective but modestly priced systems to overcome missile defence. They are installed on all of our intercontinental ballistic missile complexes. These comments, and President Putin's repeated reference to U.S. ballistic missile defenses, provide a possible context for many of the ongoing modernization programs. Avangard Hypersonic Glide Vehicle The Avangard hypersonic glide vehicle (HGV), previously known as Project 4202, is a reentry body carried atop an existing ballistic missile that can maneuver to evade air defenses and ballistic missile defenses to deliver a nuclear warhead to targets in Europe and the United States. Russia views the Avangard system as a hedge to buttress its second-strike capability, ensuring that a retaliatory strike can penetrate U.S. ballistic missile defenses. In his March 2018 remarks, President Putin specifically stressed that Russia would pursue "a new hypersonic-speed, high-precision new weapons systems that can hit targets at inter-continental distance and can adjust their altitude and course as they travel" in response to the U.S. withdrawal from the ABM Treaty. Some U.S. analysts, however, have noted that the Avangard could be used "as a first strike system to be used specifically against missile defenses, clearing the way for the rest of Russia's nuclear deterrent." Others have stressed that the Avangard is likely to serve as a niche capability that adds little to Russia's existing nuclear force structure. The Soviet Union first experimented with HGV technology in the 1980s, partly in response to the expected deployment of U.S. ballistic missile defense systems under the SDI program. The current program has been under development since at least 2004 and has undergone numerous tests. In the most recent test, on December 26, 2018, the glider was launched atop an SS-19 ICBM from the Dombarovskiy missile base in the Southern Urals toward a target on the Kamchatka Peninsula more than 3,500 miles away. According to some sources, Russia might deploy the Avangard on the SS-18, SS-19 and, potentially, on the new Sarmat ICBMs. Experts continue to debate Avangard's true technical characteristics. However, President Putin has stated that the system is capable of "intensive maneuvering" and achieving "supersonic speeds in excess of Mach 20." After the December 2018 test, President Putin announced that the weapon would be added to Russia's nuclear arsenal in 2019. In January 2019, an official with Russia's Security Council confirmed that the Avangard had been integrated onto the SS-19 force. According to the Commander of Russia's Strategic Rocket Forces, the Dombarovskiy Missile Division will stand up a "missile regiment comprising a modified command-and-control post and two silo-based launchers" in 2019. On December 27, 2019, the Russian military announced that the Strategic Rocket Forces had activated two SS-19 missiles equipped with Avangard hypersonic glide vehicles. Although not specified in the Russian announcement, the missiles are likely deployed with the 13 th regiment of the Dombarovskiy (Red Banner) missile division based in the Orenburg region. The regiment has reportedly received two retrofitted UR-100NUTTkH (NATO reporting name: SS-19 Stiletto) ICBMs armed with one Avangard hypersonic boost-glide warhead each. According to earlier reports, the 13 th regiment is expected to eventually receive four more SS-19 ICBMs fitted with Avangard warheads. Reports have stated that the Strategic Rocket Forces will have two missile regiments, each with six Avangard systems by 2027. Each converted missile would carry one HGV. Russian officials have indicated that these missiles will count under the New START Treaty. Consequently, Russians officials conducted an exhibition of the system for U.S. inspectors, as mandated by the New START Treaty, prior to deployment. The exhibition demonstrated that each missile will carry one Avangard HGV, but it is not clear whether or how Russia demonstrated that each HGV would carry only one warhead. Sarmat ICBM The RS-28 Sarmat (SS-X-30) missile is a liquid-fueled heavy ICBM that Russia intends to eventually deploy as a replacement for the SS-18 heavy ICBM. Russia has been reducing the number of SS-18 missiles in its force since the 1990s, when the original START Treaty required a reduction from 308 to 154 missiles. Russia likely would have eliminated all of the missiles if the START II Treaty (described below) had entered into force, but it has retained 46 of them under New START, while awaiting the development of the Sarmat. Reports indicate that the Sarmat can carry 10, or according to some sources, 15 warheads, along with penetration aids, and potentially several Avangard hypersonic glide vehicles. Putin stated in his March 2018 speech that Sarmat weighs over 200 tons, but details about the ICBM's true weight, and thus its payload, remain unclear. Russia began testing the Sarmat missile in 2016; reports indicate that it is likely to be deployed in the Uzhur Missile Division around 2021. Russia also may deploy the missile at the Dombarovsky Missile Division, with an eventual total of seven Sarmat regiments with 46 missiles. This number is equal to roughly the number of SS-18 ICBMs that Russia has retained under New START and, therefore, indicates that Russia could be planning to deploy the Sarmat in a manner consistent with the limits in the treaty. Some have speculated, however, that Russia could exceed the limits in the treaty by eventually expanding its deployment of Sarmat missiles or increasing the number of warheads on each missile to exceed the treaty's warhead limits. In his March 2018 speech, President Putin highlighted the Sarmat missile's ability to confound and evade ballistic missile defense systems. As was the case with the SS-18 missile, the large number of warheads and penetration aids are designed to increase the probability that the missile's warhead could penetrate defenses and reach its target. In addition, President Putin noted that Sarmat could attack targets by flying over both the North and South Poles, evading detection by radars seeking missiles flying in an expected trajectory over the North Pole. He also stated that the missile "has a short boost phase, which makes it more difficult to intercept for missile defense systems." He emphasized that Sarmat is a formidable missile and, owing to its characteristics, "is untroubled by even the most advanced missile defense systems." Poseidon Autonomous Underwater Vehicle The existence of Poseidon, a nuclear-powered autonomous underwater vehicle (also known as Status 6 or Kanyon, its NATO designation), was first "leaked" to the press in November 2015, when a slide detailing it appeared in a Russian Ministry of Defense briefing. According to that slide, the autonomous underwater vehicle, or drone, could reach a depth of 1,000 meters, go at a speed of 100 knots, and have a range of up to 10,000 km. The slide indicated that the system would be tested between 2019 and 2025. Press reports indicate, however, that Russia has been testing the system since at least 2016, with the most recent test occurring in November 2018. However, the system may not be deployed until 2027. Russia may deploy the Poseidon drone on four submarines, two in the Northern Fleet and two in the Pacific Fleet. Each submarine would carry eight drones. According to some reports, each drone would be armed with a two-megaton nuclear or conventional payload that could be detonated "thousands of feet" below the surface. Russia could release the drone from its submarine off the U.S. coast and detonate it in a way that would "generate a radioactive tsunami" that could destroy cities and other infrastructure along the U.S. coast. When Russia first revealed the existence of this new drone, some analysts questioned whether Russia was developing a new first-strike weapon that could evade U.S. defenses and devastate the U.S. coastline. Russia, however, views the weapon as a second- or third-strike option that could ensure a retaliatory strike against U.S. cities. Like the Avangard and Sarmat, this system, according to Russian statements, would also serve as a Russian response to concerns about the U.S. withdrawal from the ABM Treaty and U.S. advances in ballistic missile defenses. As President Putin noted in his March 2018 speech, "we have developed unmanned submersible vehicles that can move at great depths (I would say extreme depths) intercontinentally, at a speed multiple times higher than the speed of submarines, cutting-edge torpedoes and all kinds of surface vesselsâ¦. They are quiet, highly manoeuvrable and have hardly any vulnerabilities for the enemy to exploit." Burevestnik Nuclear-Powered Cruise Missile The Burevestnik (SSC-X-9 Skyfall) is a nuclear-powered cruise missile intended to have "unlimited" range, because it would be powered by a nuclear reactor. In his March 2018 speech, Putin stressed that the "low-flying stealth missile carrying a nuclear warhead, with almost an unlimited range, unpredictable trajectory and ability to bypass interception boundaries" would be "invincible against all existing and prospective missile defense and counter-air defense systems." According to reports, Russia has been conducting tests with a prototype missile, and with an electric power source instead of a nuclear reactor, since 2016. Tests have continued to take place as recently as January 2019. Reports indicate, however, that most of the tests have ended in failure, and that tests using a nuclear power source are unlikely to occur in the near future, as failed tests could spread deadly radiation. According to some reports, Russia is unlikely to deploy the cruise missile for at least another decade and, even then, the high cost could limit the number introduced into the Russian arsenal. Kinzhal Air-Launched Ballistic Missile Russia is developing a nuclear-capable air-launched ballistic missile, known as the Kinzhal, that could be launched on MiG-31K interceptor aircraft or Tu-22M bombers. According to press reports, the Kinzhal is a variant of the Iskander short-range ballistic missile currently in service with the Russian Armed Forces. The air-launched version may be intended to be launched while the aircraft is at supersonic speeds, adding to the system's invulnerability to U.S. air and missile defenses. President Putin noted this capability in his March 2018 speech, when he said that the missile "flying at a hypersonic speed, 10 times faster than the speed of sound, can also maneuver at all phases of its flight trajectory, which also allows it to overcome all existing and, I think, prospective anti-aircraft and anti-missile defense systems, delivering nuclear and conventional warheads in a range of over 2,000 kilometers." Unless Russian aircraft approach U.S. shores before releasing the missile, however, it will not have the range needed to target U.S. territory. Instead, experts believe the missile is intended primarily to target naval vessels. President Putin stated that the system entered service in the Southern Military District in December 2017. Russia's Minister of Defense stated in February 2019 that MiG-31 crews have taken the Kinzhal on air patrols over the Black and Caspian seas. Tsirkon Anti-Ship Hypersonic Cruise Missile Russia has been developing the Tsirkon (3M-22, NATO designated SS-N-33), an anti-ship hypersonic cruise missile, since at least 2011. The missile is "designed for naval surface vessels and submarines, able to attack both ships and ground targets." It is intended to replace the SS-N-19 cruise missile on the Kirov-class cruisers and is expected to be test-launched from the new Yasen-class submarine Kazan . In a February 2019 address to the Federal Assembly, Putin stated that Tsirkon is a "hypersonic missile that can reach speeds of approximately Mach 9 and strike a target more than 1,000 km away both under water and on the ground." He also stated that the missile could be launched from submarines. In late 2019, President Putin also noted that Russia would develop a land-based version of this missile as a response to the U.S. withdrawal from the INF Treaty. The Tsirkon is undergoing testing with potential deployment around 2020. Barguzin Rail-Mobile ICBM Russia has been developing a rail-mobile ICBM system to replace the SS-24 Mod 3 Scalpel since 2013. An ejection test of the missile appears to have been conducted. However, Russia may have canceled the program in 2017. RS-26 Rubezh ICBM Russia has been developing a version of its three-stage RS-24 Yars ICBM with only two stages. According to unclassified reports, Russia conducted four flight tests of this missile in the early part of this decade. Two of these flight testsâone that failed in September 2011 and one that succeeded in May 2012âflew from Plesetsk to Kura, a distance of approximately 5,800 kilometers (3,600 miles). The second two testsâin October 2012 and June 2013âwere both successful. In both cases, the missile flew from Kapustin Yar to Sary-Shagan, a distance of 2,050 kilometers (1,270 miles). These tests raised questions about whether the missile was designed to violate, or circumvent, the limits in the 1987 INF Treaty, as that treaty banned the testing and deployment of missiles with a range between 500 and 5,500 kilometers. Russia appears to have cancelled this missile program in 2018, but some analysts believe it might reappear now that the INF Treaty has lapsed. The Effect of Arms Control on Russia's NuclearÂ Forces The number of warheads on Soviet strategic nuclear delivery vehicles reached its peak in the mid-1980s and began to decline sharply by the early 1990s (see Figure 2 ). This decline continued, with a few pauses, through the 1990s and 2000s. While a number of factors likely contributed to this decline, most experts agree that these reductions were shaped by the limits in bilateral arms control agreements. The SALT Era (1972-1979) The United States and the Soviet Union signed their first formal agreements limiting nuclear offensive and defensive weapons in May 1972. The Strategic Arms Limitation Talks (SALT) produced two agreements: the Interim Agreement on Certain Measures with Respect to the Limitation of Strategic Offensive Arms (Interim Agreement) and the Treaty on the Limitation of Anti-Ballistic Missile Systems (ABM Treaty). The parties paired these two agreements, in part, to forestall an offense-defense arms race, where increases in the number of missile defense interceptors on one side would encourage the other to increase the number of missiles needed to saturate those defenses. The United States also sought to limit the number of large ICBMs in the Soviet offensive force, an area where the Soviet Union had an advantage over the United States. As a result, the Interim Agreement imposed a freeze on the number of launchers for ICBMs that the United States and the Soviet Union could deploy. (At the time the United States had 1,054 ICBM launchers and the Soviet Union had 1,618 ICBM launchers.) The two countries also agreed to freeze their number of SLBM launchers and modern ballistic missile submarines, though they could add SLBM launchers if they retired old ICBM launchers. Although the Interim Agreement limited the number of Soviet ICBM and SLBM launchers, it did not restrain the growth in the number of warheads carried on the missiles deployed in those launchers. After signing the agreement, both nations expanded the number of warheads on their missiles by deploying missiles with multiple warheads (MIRVs). The Soviet deployment of MIRVs led to a sharp increaseâfrom around 2,000 to more than 6,100âin the number of warheads on ICBMs and SLBMs between 1972 and 1979. The second Strategic Arms Limitation Treaty (SALT II) sought to curb this growth by limiting the number of missiles that could carry multiple warheads. The treaty would have capped all strategic nuclear delivery systems at 2,400 and limited each side to 1,320 MIRVed ICBMs, MIRVed SLBMs, and heavy bombers equipped to carry nuclear-armed, air-launched cruise missiles (ALCMs). The treaty would not have limited the total number of warheads that could be carried on these delivery vehicles, even though the parties agreed that they would not deploy MIRVed ICBMs with more than 10 warheads each and MIRVed SLBMs with more than 14 warheads each. SALT II proved to be highly controversial. Some analysts argued that it would fail to reduce nuclear warheads or curb the arms race, while others argued that the treaty would allow the Soviet Union to maintain strategic superiority over the United States with its force of large, heavily MIRVed land-based ballistic missiles. Shortly after the Soviet Union invaded Afghanistan in December 1979, President Carter withdrew the treaty from the Senate's consideration. The Soviet Union continued to increase the number of warheads on its ICBMs and SLBMs, reaching around 10,000 warheads in 1989. INF and START (1982-1993) President Reagan entered office in 1981 planning to expand U.S. nuclear forces and capabilities in an effort to counter the perceived Soviet advantages in nuclear weapons. Initially, at least, he rejected the use of arms control agreements, but after Congress and many analysts pressed for more diplomatic initiatives, the Reagan Administration outlined negotiating positions to address intermediate-range missiles, long-range strategic weapons, and ballistic missile defenses. These negotiations began to bear fruit in the latter half of President Reagan's second term, with the signing of the Intermediate-Range Nuclear Forces (INF) Treaty in 1987. In the INF Treaty, the United States and Soviet Union agreed to destroy all intermediate-range and shorter-range ground-launched ballistic missiles and ground-launched cruise missiles with ranges between 500 and 5,500 kilometers (between 300 and 3,400 miles). The Soviet Union destroyed 1,846 missiles, including 654 SS-20 missiles that carried three warheads apiece, resulting in a reduction of more than 3,100 deployed warheads. The INF Treaty was seen as a significant milestone in arms control because it established an intrusive verification regime and eliminated entire classes of weapons that both sides regarded as modern and effective. The United States and the Soviet Union began negotiations on the Strategic Arms Reduction Treaty (START) in 1982, although the talks stopped between 1983 and 1985 after a Soviet walkout in response to the U.S. deployment of intermediate-range missiles in Europe. The Soviet Union viewed START as a continuation of the SALT process and initially proposed limits on the same categories of weapons defined in the SALT II Treaty: total delivery vehicles, MIRVed ballistic missiles, and heavy bombers equipped to carry nuclear-armed ALCMs. The United States, however, sought to change the units of account from launchers to missiles and warheads, and proposed deep reductions rather than marginal changes from the SALT II level. The United States specifically sought sublimits on heavy ICBMs (the Soviet SS-18) and heavily MIRVed ICBMs (at the time, the Soviet SS-19), but it did not include any limits on heavy bombers. The nations adjusted their positions in 1985 and 1986 and saw the beginnings of a convergence after the October 1986 summit in Reykjavik, Iceland. However, they were unable to reach agreement by the end of the Reagan Administration. President George H. W. Bush continued the negotiations during his term, and the United States and the Soviet Union signed START in July 1991. The countries agreed that each side could deploy up to 6,000 attributed warheads on 1,600 ballistic missiles and bombers, with up to 4,900 warheads on ICBMs and SLBMs (see Table 4 ). START also limited each side to 1,540 warheads on "heavy" ICBMs, which represented a 50% reduction in the number of warheads deployed on the SS-18 ICBMs. The United States placed a high priority on reductions in Soviet heavy ICBMs during the negotiations (as it had during the SALT negotiations) and seemed to succeed, with this provision, in reducing the Soviet advantage in this category of weapons. When the Soviet Union collapsed at the end of 1991, about 70% of the strategic nuclear weapons covered by START were deployed at bases in Russia, and the other 30% were deployed in Ukraine, Belarus, and Kazakhstan. In May 1992, the four newly independent countries and the United States signed a protocol that made all four post-Soviet states parties to the treaty, and Ukraine, Belarus, and Kazakhstan agreed to eliminate all of the nuclear weapons on their territory. The collapse of the Soviet Union also led to calls for deeper reductions in strategic offensive arms. As a result, the United States and Russia signed a second treaty, known as START II, in January 1993, weeks before the end of the Bush Administration. START II would have limited each side to between 3,000 and 3,500 warheads; reductions initially were to occur by the year 2003, but that deadline would have been extended until 2007 if the nations had approved a new protocol. In addition, START II would have banned all MIRVed ICBMs. As a result, it would have accomplished the long-standing U.S. objective of eliminating the Soviet SS-18 heavy ICBMs. Although START II was signed in early January 1993, its full consideration was delayed until START entered into force at the end of 1994, during a dispute over the future of the Arms Control and Disarmament Agency. The U.S. Senate eventually consented to its ratification on January 26, 1996. The Russian Duma also delayed its consideration of START II as members addressed concerns about some of the limits. Russia also objected to the economic costs it would bear when implementing the treaty, because, with many Soviet-era systems nearing the end of their service lives, Russia would have to invest in new systems to maintain forces at START levels. This proved difficult as Russia endured a financial crisis in the latter half of the 1990s. The treaty's future clouded again after the United States sought to negotiate amendments to the 1972 ABM Treaty. With these delays and disputes, START II never entered into force, although Russian nuclear forces continued to decline as Russia retired its older systems. The Moscow Treaty and New START Although the START Treaty was due to remain in force through December 2009, the United States and Russia signed the Strategic Offensive Reductions Treaty, known as the Moscow Treaty, in May 2002. The United States had not expected to negotiate a new treaty. During a summit meeting with Russian President Putin, President Bush stated that the United States would reduce its "operationally deployed" strategic nuclear warheads to between 1,700 and 2,200 warheads during the next decade. President Putin indicated that Russia wanted to use the formal arms control process to reach a "reliable and verifiable agreement" in the form of a legally binding treaty that would provide "predictability and transparency" and ensure the "irreversibility of the reduction of nuclear forces." The United States preferred a less formal processâsuch as an exchange of letters and, possibly, new transparency measuresâthat would allow the United States to maintain the flexibility to size and structure its nuclear forces in response to its own needs. The resulting treaty satisfied these objectives; it codified the planned reductions to 1,700-2,200 warheads, but it contained no definitions, counting rules, or schedules to guide implementation. Each party would simply declare the number of operationally deployed warheads (a term that remained undefined) in its forces at the implementation deadline of December 31, 2012. The treaty would then expire, allowing both parties to restore forces or remain at the limit. The treaty also lacked monitoring and verification provisions, but because the original START Treaty remained in force, its verification provisions continued to provide insights into Russian forces. Knowing that the verification provisions in START were due to expire in late 2009, the United States and Russia began to discuss options for arms control after START in mid-2006, but they were unable to agree on a path forward. The United States initially did not want to negotiate a new treaty, but it would have been willing to informally extend some of START's monitoring provisions. Russia wanted to replace START with a new treaty that would further reduce deployed forces while using many of the same definitions and counting rules in START. In December 2008, the two sides agreed that they wanted to replace START before it expired, but acknowledged that this task would have to be left to negotiations between Russia and the Obama Administration. These talks began in early 2009; the United States and Russia signed the new Strategic Arms Reduction Treaty (New START) in April 2010. The New START Treaty limits each side to no more than 800 deployed and nondeployed ICBM and SLBM launchers and deployed and nondeployed heavy bombers equipped to carry nuclear armaments. Within that total, it limits each side to no more than 700 deployed ICBMs, SLBMs, and heavy bombers equipped to carry nuclear armaments. The treaty also limits each side to no more than 1,550 deployed warheads; this limit counts the actual number of warheads carried by deployed ICBMs and SLBMs, and one warhead for each deployed heavy bomber equipped for nuclear armaments. New START also contains a monitoring regime, similar to the regime in START, that requires extensive data exchanges, exhibitions, and on-site inspections to verify compliance with the treaty. The limits in New START differ from those in the original START Treaty in a number of ways. First, START contained sublimits on warheads attributed to different types of strategic weapons, in part because the United States wanted the treaty to impose specific limits on elements of the Soviet force that were deemed to be destabilizing. New START, in contrast, contains only a single limit on the aggregate number of deployed warheads, thereby providing each nation with the freedom to mix their forces as they see fit. Second, under START, to determine the number of warheads that counted against the treaty limits, the United States and Russia tallied the number of deployed launchers, assuming that each launcher contained a missile carrying the number of warheads "attributed" to that type of missile. Under New START, the United States and Russia also count the number of deployed launchers, but instead of calculating an attributed number of warheads, they simply declare the total number of warheads deployed across their force. Table 4 summarizes the limits in START, the Moscow Treaty, and New START. Figure 4 shows how the numbers of warheads and launchers in Russia's strategic nuclear forces have declined over the last 20 years. Because the definitions and counting rules differ, it is difficult to compare the force sizes across treaties. Moreover, Russia's fiscal crisis in the late 1990s and subsequent delays in some of its modernization programs may have produced similar reductions even in the absence of arms control. Nevertheless, while the numbers of warheads on Soviet strategic nuclear forces peaked in the late 1980s, the numbers have declined since the two sides began implementing the reductions mandated by these treaties. Issues for Congress Congress has held several hearings in recent years where it has sought information about Russian nuclear weapons and raised concerns about the pace and direction of Russia's nuclear modernization programs. Specifically, some Members have questioned whether Russia and the United States are approaching a new arms race as both modernize their forces; they have addressed concerns about the future size and structure of Russia's nuclear forces if the New START Treaty lapses in 2021, and they have sought to understand the content of and debate about Russia's nuclear doctrine. This section reviews some of the key issues discussed in these hearings. Arms Race Dynamics The United States and Russia are both pursuing modernization programs to rebuild and recapitalize their nuclear forces. Each began this process to replace existing systems that have been in service since the Cold War and are reaching the end of their service lives. In many cases, both nations have extended the life of these aging systems. Russia retains some ballistic missiles that the Soviet Union first fielded in the 1980s (and, therefore, were expected to be replaced by the early 2000s); it may retire many of these over the next 10 years as it completes its current modernization programs. The United States extended the life of its Ohio-class submarines from 30 to 42 years by refueling their reactor cores, and it extended the lives of both land-based and submarine-based missiles by replacing the propellant in existing motors and replacing guidance systems. The United States plans to begin fielding new systems in the late 2020s. Many analysts and observers have identified an arms race dynamic in these parallel modernization programs. Some believe that Russia is at faultâthat the United States is falling behind because Russia began to deploy new missiles and submarines in the early 2000s, while the United States will not field similar systems until the late 2020s, and because Russia is developing new and more exotic systems, as described above. David Trachtenberg, the Principal Deputy Under Secretary of Defense for Policy, raised this point in April 2018, when he noted that "it takes two to race." He stated that the United States is "not interested in matching the Russians system for system. The Russians have been developing an incredible amount of new nuclear weapons systems, including the novel, nuclear systems that President Putin unveiled to great fanfare a number of months ago." Franklin Miller, a former Pentagon and National Security Council official, made a similar point during a Senate Armed Services Committee hearing in early 2019 when he noted that "the [U.S.] program is not creating a nuclear arms race. Russia and China began modernizing and expanding their nuclear forces in the 2008-2010 timeframe and since then have been placing large numbers of new strategic nuclear systems in the field. The United States has not deployed a new nuclear delivery system in this century and the first products of our nuclear modernization program will not be deployed until the mid to late 2020s." Others argue that the United States is spurring the arms race, in that the expansive U.S. modernization program might heighten the mistrust between the two nations and provide Russia with an incentive to expand its programs beyond what was needed to replace aging Soviet-era systems. Former Secretary of Defense William Perry raised this point in an interview in 2015, when the Obama Administration offered its support to the full scope of U.S. nuclear modernization programs. He noted that "we're now at the precipice, maybe I should say the brink, of a new nuclear arms race" that "will be at least as expensive as the arms race we had during the Cold War, which is a lot of money." Some have disputed the notion that the modernization programs are either evidence of an arms race or an incentive to pursue one. Both nations are modernizing their forces because existing systems are aging out; neither is pursuing these programs because the other is modernizing its forces, and neither would likely cancel its programs if the other refrained from its efforts. As former Secretary of Defense Ashton Carter noted in 2016, "In the end, though, this is about maintaining the bedrock of our security and after too many years of not investing enough, it's an investment that we, as a nation, have to make because it's critical to sustaining nuclear deterrence in the 21 st century." Russia seems to be in a similar position; it delayed a planned modernization cycle in the late 1990s and has been pursuing a number of programs at a relatively slow pace since that time. Moreover, the new types of strategic offensive arms introduced recently seem to be more of a response to concerns about U.S. missile defense programs than a response to U.S. offensive modernization programs. The Future of Arms Control The New START Treaty is due to lapse in 2021 unless the United States and Russia agree to extend it for a period of no more than five years. The Trump Administration is reportedly conducting an interagency review of New START to determine whether it continues to serve U.S. national security interests, and this review will inform the U.S. approach to the treaty's extension. Among the issues that might be under consideration are whether the United States should be willing to extend New START following Russia's violation of the INF Treaty, whether the limits in the treaty continue to serve U.S. national security interests, and whether the insights and data that the monitoring regime provides about Russian nuclear forces remain of value for U.S. national security. Russia's nuclear modernization programs, in general, and its development of new kinds of strategic offensive arms have also figured into the debate about the extension of New START. For example, General John Hyten, the commander of U.S. Strategic Command (STRATCOM), has stated that he believes New START serves U.S. national security interests because its monitoring regime provides transparency and visibility into Russian nuclear forces, and because its limits provide predictability about the future size and structure of those forces. However, in testimony before the Senate Armed Services Committee in February 2019, General Hyten expressed concern about Russia's new nuclear delivery systemsâthe Poseidon underwater drone, the Burevestnik nuclear-powered cruise missile, the Kinzhal air-launched ballistic missile, and the Tsirkon hypersonic cruise missileâwhich would not count under New START's limits. He noted that these weapons could eventually pose a threat to the United States and that he believed the United States and Russia should expand New START so they would count them under the treaty. Some analysts have questioned whether this approach makes sense. As noted above, Russia is not likely to deploy these systems until later in the 2020s and, even then, the numbers are likely to be relatively small. On the other hand, Russia began to deploy the Avangard hypersonic glide vehicle in late December 2019 and may deploy the Sarmat heavy ballistic missile in 2020 or 2021. Both will count under New START if it remains in force. If Russia refuses to count the more exotic weapons under New START and the treaty expires, it will no longer be bound by any numerical limits on the number of long-range missiles and heavy bombers it can deploy, or the number of nuclear warheads that could be deployed on those missiles and bombers. Because Russia is already producing new missiles like the Yars, it could possibly accelerate production if New START expires to increase the number of warheads added to the force. Russia could also possibly add to the number of warheads deployed on some of these missiles, increasing them from four warheads to six to eight warheads per missile. In addition, Russia would likely have to limit the deployment of the Sarmat missile and retire old SS-18 missiles to remain under New START limits, but it could deploy hundreds of new warheads on the Sarmat between 2021 and 2026 if the treaty were not in place. According to some analyses, if Russia expanded its forces with these changes, it could possibly add more than 1,000 warheads to its force without increasing the number of deployed missiles between 2021 and 2026. The Debate Over Russia's Nuclear Doctrine The 2018 Nuclear Posture Review (NPR) adheres to the view that Russia has adopted an "escalate to de-escalate" strategy and asserts that Russia "mistakenly assesses that the threat of nuclear escalation or actual first use of nuclear weapons would serve to 'de-escalate' a conflict on terms favorable to Russia." The NPR's primary concern is with a scenario where Russia executes a land-grab on a NATO ally's territory and then presents U.S. and NATO forces with a fait accompli by threatening to use nuclear weapons. The NPR thus recommends that the United States develop new low-yield nonstrategic weapons that, it argues, would provide the United States with a credible response, thereby "ensuring that the Russian leadership does not miscalculate regarding the consequences of limited nuclear first use." While some experts outside government agree with the assessment of Russian nuclear doctrine described in the Nuclear Posture Review, others argue that it overstates or is inconsistent with Russian statements and actions. Some have argued that the NPR's "evidence of a dropped threshold for Russian nuclear employment is weak." They note that, although some Russian authors and analysts advocated such an approach, was not evident in the government documents published in 2010 and 2014. As a result, they argue that the advocates for this type of strategy may have lost the bureaucratic debates. Others have reviewed reports on Russian military exercises and have disputed the conclusion that there is evidence that Russia simulated nuclear use against NATO in large conventional exercises. One analyst has postulated that Russia may actually raise its nuclear threshold as it bolsters its conventional forces. According to this analyst, "It is difficult to understand why Russia would want to pursue military adventurism that would risk all-out confrontation with a technologically advanced and nuclear-armed adversary like NATO. While opportunistic, and possibly even reckless, the Putin regime does not appear to be suicidal." As a study from the RAND Corporation noted, Russia has "invested considerable sums in developing and fielding long-range conventional strike weapons since the mid-2000s to provide Russian leadership with a buffer against reaching the nuclear thresholdâa set of conventional escalatory options that can achieve strategic effects without resorting to nuclear weapons." Others note, however, that Russia has integrated these "conventional precision weapons and nuclear weapons into a single strategic weapon set," lending credence to the view that Russia may be prepared to employ, or threaten to employ, nuclear weapons during a regional conflict. Appendix A. Russian Nuclear-Capable DeliveryÂ Systems Appendix B. Russian Nuclear Storage Facilities Summary:	null	96	85,947	85,949	85,949	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Relations between the United States and Russia have shifted over timeâsometimes reassuring and sometimes concerningâyet most experts agree that Russia is the only nation that poses, through its arsenal of nuclear weapons, an existential threat to the United States. While its nuclear arms have declined sharply in quantity since the end of the Cold War, Russia retains a stockpile of thousands of nuclear weapons, with more than 1,500 warheads deployed on missiles and bombers capable of reaching U.S. territory. The United States has always viewed these weapons as a potential threat to U.S. security and survival. It has not only maintained a nuclear deterrent to counter this threat, it has also signed numerous arms control treaties with the Soviet Union and later Russia in an effort to restrain and reduce the number and capabilities of nuclear weapons. The collapse of the 1987 Intermediate-range Nuclear Forces (INF) Treaty and the possible expiration of the 2010 New Strategic Arms Reduction Treaty (New START) in 2021 may signal the end to mutual restraint and limits on such weapons. The 2018 National Defense Strategy identifies the reemergence of long-term, strategic competition with Russia and China as the "the central challenge to U.S. prosperity and security." It notes that Russia seeks "to shatter the North Atlantic Treaty Organization and change European and Middle East security and economic structures to its favor." It argues that the challenge from Russia is clear when its malign behavior is "coupled with its expanding and modernizing nuclear arsenal." The 2018 Nuclear Posture Review (NPR) amplifies this theme. It notes that "Russia has demonstrated its willingness to use force to alter the map of Europe and impose its will on its neighbors, backed by implicit and explicit nuclear first-use threats." The NPR describes changes to Russia's nuclear doctrine and catalogues Russia's efforts to modernize its nuclear forces, arguing that these efforts have "increased, and will continue to increase, [Russia's] warhead delivery capacity, and provides Russia with the ability to rapidly expand its deployed warhead numbers." Congress has shown growing concern about the challenges Russia poses to the United States and its allies. It has expressed concerns about Russia's nuclear doctrine and nuclear modernization programs and has held hearings focused on Russia's compliance with arms control agreements and the future of the arms control process. Moreover, Members have raised questions about whether U.S. and Russian nuclear modernization programs, combined with the demise of restraints on U.S. and Russian nuclear forces, may be fueling an arms race and undermining strategic stability. This report seeks to advise this debate by providing information about Russia's nuclear doctrine, its current nuclear force structure, and its ongoing nuclear modernization programs. It is divided into five sections. The first section describes Russia's nuclear strategy and focuses on ways in which that strategy differs from that of the Soviet Union. The second section provides a historical overview of the Soviet Union's nuclear force structure. The third section details Russia's current force structure, including its long-range intercontinental ballistic missiles (ICBM), submarine-launched ballistic missiles (SLBM), and heavy bombers and shorter-range nonstrategic nuclear weapons. This section also highlights key elements of relevant infrastructure, including early warning, command and control, production, testing, and warhead storage. It also describes the key modernization programs that Russia is pursuing to maintain and, in some cases, expand its nuclear arsenal. The fourth section focuses on how arms control has affected the size and structure of Russia's nuclear forces. The fifth section discusses several potential issues for Congress. Strategy and Doctrine Soviet Doctrine The Soviet Union valued nuclear weapons for both their political and military attributes. From a political perspective, nuclear weapons served as a measure of Soviet status, while nuclear parity with the United States offered the Soviet Union prestige and influence in international affairs. From a military perspective, the Soviet Union considered nuclear weapons to be instrumental to its plans for fighting and prevailing in a conventional war that escalated to a nuclear one. As a leading Russian analyst has written, "for the first quarter-century of the nuclear age, the fundamental assumption of Soviet military doctrine was that, if a global war was unleashed by the 'imperialist West,' the Soviet Union would defeat the enemy and achieve victory, despite the enormous ensuing damage." Soviet views on nuclear weapons gradually evolved as the United States and the Soviet Union engaged in arms control talks in the wake of the 1962 Cuban Missile Crisis, and as the Soviet Union achieved parity with the United States. During the 1960s, both countries recognized the reality of the concept of "Mutually Assured Destruction" (MAD)âa situation in which both sides had nuclear retaliatory capabilities that prevented either side from prevailing in an all-out nuclear war. Analysts argue that the reality that neither side could initiate a nuclear war without facing the certainty of a devastating retaliatory attack from the other was codified in the agreements negotiated during the Strategic Arms Limitation Talks (SALT). With the signing of the 1972 Anti-Ballistic Missile (ABM) Treaty, both sides accepted limits on their ability to protect themselves from a retaliatory nuclear attack, thus presumably reducing incentives for either side to engage in a nuclear first strike. The Soviet Union offered rhetorical support to the nonuse of nuclear weapons throughout the 1960s and 1970s. At the time, this approach placed the Soviet Union on the moral high ground with nonaligned nations during the negotiations on the Nuclear Nonproliferation Treaty. The United States and its NATO allies refused to adopt a similar pledge, maintaining a "flexible response" policy that allowed for the possible use of nuclear weapons in response to a massive conventional attack by the Soviet Union and its Warsaw Pact allies. At the same time, however, most U.S. analysts doubted that Soviet support for the nonuse of nuclear weapons actually influenced Soviet warfighting plans, even though Soviet-Warsaw Pact advantages in conventional forces along the Central European front meant that the Soviet Union would not necessarily need to use nuclear weapons first. U.S. and NATO skepticism about a Soviet nonuse policy reflected concerns about the Soviet military buildup of a vast arsenal of battlefield and shorter-range nuclear delivery systems. These systems could have been employed on a European battlefield in the event of a conflict with the United States and NATO. On the other hand, interviews with Soviet military officials have suggested that this theater nuclear buildup was intended to "reduce the probability of NATO's first use [of nuclear weapons] and thereby to keep the war conventional." In addition, many U.S. commentators feared that the Soviet Union might launch a "bolt from the blue" attack against U.S. territory even in the absence of escalation from a conflict in Europe. Other military analysts suspect that the Soviet Union would not have initiated such an attack and likely did not have the capability to conduct an disarming attack against U.S. nuclear forcesâa capability that would have been needed to restrain the effectiveness of a U.S. retaliatory strike. Instead, the Soviet Union might have launched its weapons on warning of an imminent attack, which has sometimes been translated as a retaliatory reciprocal counter strike , or in a retaliatory strike after initial nuclear detonations on Soviet soil. Many believe that, in practice, the Soviet Union planned only for these latter retaliatory strikes. Regardless, some scholars argue that the Soviet leadership likely retained the option of launching a first strike against the United States. Improvements to the accuracy of U.S. ballistic missiles raised concerns in the Soviet Union about the ability of retaliatory forces to survive a U.S. attack. For Soviet leaders, the increasing vulnerability of Soviet missile silos called into question the stability of mutual deterrence and possibly raised questions about the Soviet Union's international standing and bargaining position in arms control negotiations with the United States. In 1982, General Secretary Leonid Brezhnev officially announced that the Soviet Union would not be the first nation to use nuclear weapons in a conflict. When General Secretary Brezhnev formally enunciated the Soviet no-first-use policy in the 1980s, actual Soviet military doctrine may have become more consistent with this declaratory doctrine, as the Soviet military hoped to keep a conflict in the European theater conventional. In addition, by the end of the decade, and especially in the aftermath of the accident at the Chernobyl Nuclear Power Plant, Soviet leader Mikhail Gorbachev believed that the use of nuclear weapons would lead to catastrophic consequences. Russian Nuclear Doctrine Russia has altered and adjusted Soviet nuclear doctrine to meet the circumstances of the post-Cold War world. In 1993, Russia explicitly rejected the Soviet Union's no-first-use pledge, in part because of the weakness of its conventional forces at the time. Russia has subsequently revised its military doctrine and national security concept several times over the past few decades, with successive versions in the 1990s appearing to place a greater reliance on nuclear weapons. For example, the national security concept issued in 1997 allowed for the use of nuclear weapons "in case of a threat to the existence of the Russian Federation as an independent sovereign state." The military doctrine published in 2000 expanded the circumstances in which Russia might use nuclear weapons, including in response to attacks using weapons of mass destruction against Russia or its allies, as well as in response to "large-scale aggression utilizing conventional weapons in situations critical to the national security of the Russian Federation." These revisions have led to questions about whether Russia would employ nuclear weapons preemptively in a regional war or only in response to the use of nuclear weapons in a broader conflict. In mid-2009, Nikolai Patrushev, the head of Russia's Security Council, hinted that Russia would have the option to launch a "preemptive nuclear strike" against an aggressor "using conventional weapons in an all-out, regional, or even local war." However, when Russia updated its military doctrine in 2010, it did not specifically provide for the preemptive use of nuclear weapons. Instead, the doctrine stated that Russia "reserves the right to utilize nuclear weapons in response to the utilization of nuclear and other types of weapons of mass destruction against it and (or) its allies, and also in the event of aggression against the Russian Federation involving the use of conventional weapons when the very existence of the state is under threat." Compared with the 2000 version, which allowed for nuclear use "in situations critical to the national security of the Russian Federation," this change seemed to narrow the conditions for nuclear weapons use. The language on nuclear weapons in Russia's most current 2014 military doctrine is similar to that in the 2010 doctrine. Analysts have identified several factors that contributed to Russia's increasing reliance on nuclear weapons during the 1990s. First, with the demise of the Soviet Union and Russia's subsequent economic collapse, Russia no longer had the means to support large and effective conventional forces. Conflicts in the Russian region of Chechnya and, in 2008, neighboring Georgia also highlighted seeming weaknesses in Russia's conventional military forces. In addition, Russian analysts saw emerging threats in other neighboring post-Soviet states; many analysts believed that by even implicitly threatening that it might resort to nuclear weapons, Russia hoped it could enhance its ability to deter the start of, or NATO interference in, such regional conflicts. Russia's sense of vulnerability, and its view that its security was being increasingly threatened, also stemmed from NATO enlargement. Russia has long feared that an expanding alliance would create a new challenge to Russia's security, particularly if NATO were to move nuclear weapons closer to Russia's borders. These concerns contributed to the statement in the 1997 doctrine that Russia might use nuclear weapons if its national survival was threatened. For many in Russia, NATO's air campaign in Kosovo in 1999 underlined Russia's growing weakness and NATO's increasing willingness to threaten Russian interests. Russia's 2000 National Security Concept noted that the level and scope of the military threat to Russia was growing. It cited, specifically, "the desire of some states and international associations to diminish the role of existing mechanisms for ensuring international security." It also noted that "a vital task of the Russian Federation is to exercise deterrence to prevent aggression on any scale, nuclear or otherwise, against Russia and its allies." Consequently, it concluded, Russia "must have nuclear forces capable of delivering specified damage to any aggressor state or a coalition of states in any situation." The potential threat from NATO remained a concern for Russia in its 2010 and 2014 military doctrines. The 2010 doctrine stated that the main external military dangers to Russia were "the desire to endow the force potential of the North Atlantic Treaty Organization (NATO) with global functions carried out in violation of the norms of international law and to move the military infrastructure of NATO member countries closer to the borders of the Russian Federation, including by expanding the bloc." It also noted that Russia was threatened by "the deployment of troop contingents of foreign states (groups of states) on the territories of states contiguous with the Russian Federation and its allies and also in adjacent waters" (a reference to the fact that NATO now included states that had been part of the Warsaw Pact). Russian concerns also extend ed to U.S. missile defense deployed on land in Poland and Romania and at sea near Russian territory as a part of the European Phased Adaptive Approach (EPAA). Russia's possession of a large arsenal of nonstrategic nuclear weapons and dual-capable systems, combined with recent statements designed to remind others of the strength of Russia's nuclear deterrent, have led some to argue that Russia has increased the role of nuclear weapons in its military strategy and military planning. Before Russia's invasion of Ukraine in 2014, some analysts argued that Russia's nonstrategic nuclear weapons had "no defined mission and no deterrence framework [had] been elaborated for them." However, subsequent Russian statements, coupled with military exercises that appeared to simulate the use of nuclear weapons against NATO members, have led many to believe that Russia might threaten to use its shorter-range, nonstrategic nuclear weapons to coerce or intimidate its neighbors. Such a nuclear threat could occur before or during a conflict if Russia believed that a threat to use nuclear weapons could lead its adversaries, including the United States and its allies, to back down. Consequently, several analysts have argued that Russia has adopted an "escalate to de-escalate" nuclear doctrine. They contend that when faced with the likelihood of defeat in a military conflict with NATO, Russia might threaten to use nuclear weapons in an effort to coerce NATO members to withdraw from the battlefield. This view of Russian doctrine has been advanced by officials in the Trump Administration and has informed decisions made during the 2018 Nuclear Posture Review. However, Russia does not use the phrase "escalate to de-escalate" in any versions of its military doctrine, and debate exists about whether this is an accurate characterization of Russian thinking about nuclear weapons. Conflicting statements from Russia have contributed to disagreements among U.S. analysts over the circumstances under which Russia would use nuclear weapons. During a March 2018 speech to the Federal Assembly, President Putin seemed to affirm the broad role for nuclear weapons that Russia's military doctrine assigns: I should note that our military doctrine says Russia reserves the right to use nuclear weapons solely in response to a nuclear attack, or an attack with other weapons of mass destruction against the country or its allies, or an act of aggression against us with the use of conventional weapons that threaten the very existence of the state. This all is very clear and specific. As such, I see it is my duty to announce the following. Any use of nuclear weapons against Russia or its allies, weapons of short, medium or any range at all, will be considered as a nuclear attack on this country. Retaliation will be immediate, with all the attendant consequences. There should be no doubt about this whatsoever. Putin and other Russian officials have extensively used what some Western analysts have described as "nuclear messaging" in the wake of Russia's annexation of Crimea and instigation of conflict in eastern Ukraine. Their references to Russia's nuclear capabilities have seemed like an effort to signal that Russia's stakes are higher than those of the West and that Russia is willing to go to great lengths to protect its interests. At times, however, President Putin has offered a more restrained view of the role of nuclear weapons. In 2016, Putin stated that "brandishing nuclear weapons is the last thing to do. This is harmful rhetoric, and I do not welcome it." He also dismissed suggestions that Russia would consider using nuclear weapons offensively, stating that "nuclear weapons are a deterrent and a factor of ensuring peace and security worldwide. They should not be considered as a factor in any potential aggression, because it is impossible, and it would probably mean the end of our civilization." In October 2018, President Putin made a statement that some analysts interpreted as potentially moving toward a "sole purpose" doctrine, by which Russia would use nuclear weapons only in response to others' use of nuclear weapons. Putin declared: There is no provision for a preventive strike in our nuclear weapons doctrine. Our concept is based on a retaliatory reciprocal counter strike. This means that we are prepared and will use nuclear weapons only when we know for certain that some potential aggressor is attacking Russia, our territory [with nuclear weapons]â¦. Only when we know for certainâand this takes a few seconds to understandâthat Russia is being attacked will we deliver a counterstrikeâ¦. Of course, this amounts to a global catastrophe, but I would like to repeat that we cannot be the initiators of such a catastrophe because we have no provision for a preventive strike. Soviet Nuclear Forces The Soviet Union conducted its first explosive test of a nuclear device on August 29, 1949, four years after the United States employed nuclear weapons against Japan at the end of World War II. After this test, the Soviet Union initiated the serial production of nuclear devices and work on thermonuclear weapons, and it began to explore delivery methods for its nascent nuclear arsenal. The Soviet Union tested its first version of a thermonuclear bomb in 1953, two years after the United States crossed that threshold. The Soviet stockpile of nuclear warheads grew rapidly through the 1960s and 1970s, peaking at more than 40,000 warheads in 1986, according to unclassified estimates (see Figure 1 ). Within this total, around 10,700 warheads were carried by long-range delivery systems, the strategic forces that could reach targets in the United States in the mid-1980s. By the 1960s, the Soviet Union, like the United States, had developed a triad of nuclear forces: land-based intercontinental ballistic missiles (ICBMs), submarine-launched ballistic missiles (SLBMs), and heavy bombers equipped with nuclear weapons. In 1951, the Soviet Union conducted its first air drop test of a nuclear bomb and began to deploy nuclear weapons with its Long-Range Aviation forces soon thereafter. Bomber aircraft included the M-4 Bison, which barely had the range needed to attack the United States and then return home. The Tu-95 Bear strategic bomber, which had a longer range, entered service in 1956. Later modifications of the Bear bomber have since been the mainstay of the Soviet/Russian nuclear triad's air leg. In 1956, the Soviet Union tested and deployed its first ballistic missile with a nuclear warhead, the SS-3, a shorter-range, or theater, missile. It tested and deployed the SS-4, a theater ballistic missile that would be at the heart of the 1962 Cuban Missile Crisis, by 1959. Soviet missile ranges were further extended with the deployment of an intermediate-range ballistic missile, the SS-5. The 1957 launch of the Sputnik satellite on a modified SS-6 long-range missile heralded the Soviet Union's development of ICBMs. By the end of the decade, the Soviet Union had launched an SS-N-1 SLBM from a Zulu-class attack submarine of the Soviet Navy. The undersea leg of the triad would steadily progress over the following decade with the deployment of SLBMs on the Golf class attack submarine and then the Hotel and Yankee class nuclear-powered submarines. Manned since 1959 by a separate military service called the Strategic Rocket Forces, the ICBM leg came to dominate the Soviet nuclear triad. During the 1960s, the Soviet Union rapidly augmented its force of fixed land-based ICBMs, expanding from around 10 launchers and two types of missiles in 1961 to just over 1,500 launchers with eight different types of missiles in 1971. Because these missiles were initially based on soft launch pads or in vertical silos that could not withstand an attack from U.S. nuclear warheads, many concluded that the Soviet Union likely planned to use them in a first strike attack against U.S. missile forces and U.S. territory. Moreover, the United States believed that the design of Soviet ICBMs provided the Soviet Union with the ability to contemplate, and possibly execute, a successful disarming first strike against U.S. land-based forces. Half of the ICBM missile types were different variants of the largest missile, the SS-9 ICBM. The United States referred to this as a "heavy" ICBM due to its significant throwweight, which allowed it to carry a higher-yield warhead, estimated at around 20 megatons. The United States believed, possibly inaccurately, that the missile's combination of improved accuracy and high yield posed a unique threat to U.S. land-based missiles. Concerns about Soviet heavy ICBMs persisted throughout the Cold War, affecting both U.S. force structure decisions and U.S. proposals for arms control negotiations. Although smaller and less capable than its land-based forces, the sea-based leg of the Soviet triad was built up during the 1960s, with the deployment of SLBMs on Golf-, Hotel-, and Yankee- class submarines. These submarines carried intermediate-range (rather than intercontinental-range) missiles, but their mobility allowed the Soviet Union to threaten targets throughout Europe and, to a lesser extent, in the United States. The Soviet Union began the decade with 30 missile launchers on 10 submarines and ended it with 228 launchers on 31 submarines. By the end of the 1960s, the United States and the Soviet Union had initiated negotiations to limit the numbers of launchers for long-range missiles. The emerging parity in numbers of deployed nuclear-armed missiles, coupled with several nuclear crises, had paved the way for a recognition of their mutual deterrence relationship and arms control talks. As noted below, the Interim Agreement on Offensive Armsânegotiated as part of the Strategic Arms Limitation Talks (SALT I) and signed in 1972âcapped the construction and size of ICBM silo launchers (in an effort to limit the number of heavy ICBMs in the Soviet force) and limited the number of launchers for SLBMs. It did not, however, limit the nuclear warheads that could be carried by ICBMs or SLBMs. As a result, the Soviet Union continued to modernize and expand its nuclear forces in the 1970s. During this time, the Soviet Union commissioned numerous Delta-class strategic missile submarines, armed with the single-warhead, intercontinental-range SS-N-8 SLBM; developed the Tu-22M Backfire intermediate-range bomber aircraft; began to develop a new supersonic strategic heavy bomber (eventually the Tu-160 Blackjack); and began to deploy the SS-20 intermediate-range ballistic missile in 1976, which, along with other missiles of its class, would be eliminated under the 1987 INF Treaty. The Soviet Union also pursued an extensive expansion of its land-based ICBM force. It not only developed a number of new types of ICBMs, but, in 1974, it began to deploy these missiles with multiple warheads (known as MIRVs, or multiple independent reentry vehicles). During this time frame the Soviet Union developed, tested, and deployed the 4-warhead SS-17 ICBM, 10-warhead SS-18 ICBM (a new heavy ICBM that replaced the SS-9), and 6-warhead SS-19 ICBM. Because each of these missiles could carry multiple warheads, the SALT I limit on ICBM launchers did not constrain the number of warheads on the Soviet missile force. Moreover, the ICBM force began to dominate the Soviet triad during this time (see Figure 2 ). U.S. analysts and officials expressed particular concern about the heavy SS-18 ICBM and its subsequent modifications. The Soviet Union deployed 308 of these missiles, each with the ability to carry up to 10 warheads and numerous decoys and penetration aides designed to confuse missile defense radars. These concerns contributed to a debate in the U.S. defense community about a "window of vulnerability" in the U.S.-Soviet nuclear balance due to a Soviet advantage in cumulative ballistic missile throwweight. Some asserted that the Soviets' throwweight advantage could translate into an edge in the number of warheads deployed on land-based missiles. They postulated that the Soviet Union could attack all U.S. land-based missiles with just a portion of the Soviet land-based force, leaving it with enough warheads after an initial nuclear attack to dominate and possibly coerce the United States into surrendering without any retaliation. Others disputed this theory, noting that the United States maintained a majority of its nuclear warheads on sea-based systems that could survive a Soviet first strike and that the synergy of U.S. land-based, sea-based, and air-delivered weapons would complicate, and therefore deter, a Soviet first strike. Recent research examining the records of Soviet planners and officials suggests that Soviet missile developments during the 1970s did not seek to achieve, and did not have the capabilities needed for, a first-strike advantage or a warfighting posture. Instead, the Soviet Union began to harden its missile silos so they could survive attack and to develop an early warning system, thus moving toward a second-strike capability. Moreover, the 1980s saw Soviet planners worrying about maintaining their second-strike capability in light of U.S. strategic offense and missile defense programs. The United States was modernizing its land-based ICBMs, ballistic missile submarines and SLBMs, and heavy bombers. Each of the new U.S. missiles would carry multiple warheads, and the Soviets believed all would have the accuracy to target and destroy Soviet land-based missiles. In March 1983, President Reagan announced the Strategic Defense Initiative, a missile defense program that he pledged would make ballistic missiles "impotent and obsolete." The SS-18 ICBM, with its capacity to carry 10 warheads and penetration aids, provided a counter to these U.S. capabilities. During the 1980s, development continued across all three legs of the Soviet nuclear triad. The Typhoon-class strategic submarine and the Tu-160 Blackjack bomber entered into service. Anti-ship cruise missiles were joined by modern AS-15 land-attack cruise missiles. The Soviet Union continued to improve the accuracy of its fixed, silo-based missiles and began to deploy mobile ICBMs, adding both the road-mobile, single warhead SS-25 missile and the rail-mobile, 10-warhead SS-24 missile. By the end of the 1980s, prior to the signing of the 1991 Strategic Arms Reduction Treaty (START), the Soviet Union had completed the backbone of what was to become the Russian nuclear triad of the 1990s. Its air leg consisted of Bear, Backfire, and Blackjack bombers. Its undersea leg consisted of Delta- and Typhoon-class submarines with MIRV SLBMs. Its ICBM leg consisted of the SS-18, SS-19, and SS-25 missiles. During the Cold War, the Soviet Union produced and deployed a wide range of delivery vehicles for nonstrategic nuclear weapons. At different times during the period, it deployed devices small enough to fit into a suitcase-sized container; nuclear mines; shells for artillery; short-, medium-, and intermediate-range ballistic missiles; short-range, air-delivered missiles; and gravity bombs. The Soviet Union deployed these weapons at nearly 600 bases, with some located in Warsaw Pact countries in Eastern Europe, some in the Soviet Union's non-Russian republics along its western and southern perimeter, and others throughout the Soviet Union. Estimates vary, but many analysts believe that by 1991 the Soviet Union had more than 20,000 of these weapons. Before the collapse of the Warsaw Pact in 1989, the numbers may have been higher, in the range of 25,000 weapons. Russian Nuclear Forces Like the Soviet Union, the Russia Federation maintains a triad of nuclear forces consisting of ICBMs, SLBMs, and heavy bombers. The total number of warheads in the Soviet and Russian arsenal and the number deployed on Soviet and Russian strategic forces began to decline in the late 1980s (see Figure 1 and Figure 2 above). These reductions were primarily driven by the limits in the 1991 START I Treaty, the 2002 Strategic Offensive Reductions Treaty, and the 2010 New START Treaty. The reductions also reflect the retirement of many older Soviet-era missiles and their replacement with new missiles that carry fewer warheads, as well as the effects of the fiscal crisis in the late 1990s, which slowed the deployment of the next generation of Russian missiles and submarines. Moreover, under the Nunn-Lugar Cooperative Threat Reduction program, the United States helped Russia, Ukraine, Belarus, and Kazakhstan move Soviet-era nuclear weapons back to Russian territory and to dismantle portions of the Soviet Union's nuclear arsenal. Russia deploys its strategic nuclear forces at more than a dozen bases across its territory. These bases are shown on Figure 4 , below. Russia is currently modernizing most of the components of its nuclear triad. The current phase of modernization essentially began in 1998. The Soviet Union replaced its land-based missiles frequently, with new systems entering the force every 10-15 years and modifications appearing every few years. Russia has not kept up this pace. When it began the most recent modernization cycle, it was in the midst of a financial crisis. The crisis not only reduced the number of new missiles entering the force each year, but slowed the process. As a result, some of the systems that have had been under development since the late 1990s and early 2000s began to enter the force in the late 2000s, but others will not do so until the 2020s. Active Forces Intercontinental Ballistic Missiles As was the case during the Soviet era, Russia's Strategic Rocket Forces (SRF) are a separate branch of the Russian armed forces. These forces are still the mainstay of Russia's nuclear triad. Today, the SRF includes three missile armies, which, in turn, comprise 11 missile divisions (see Figure 3 ). These divisions are spread across Russia's territory, from Vypolzovo in the west to the Irkutsk region in eastern Siberia. The Strategic Rocket Forces are estimated to have approximately 60,000 personnel. According to official and unofficial sources, Russia's ICBM force currently comprises 318 missiles that can carry up to 1,165 warheads, although only about 860 warheads are deployed and available for use. Over half of these missiles are MIRVed, carrying multiple warheads. Russia is modernizing its ICBM force, replacing the last of the missiles remaining from the Soviet era with new single warhead and multiple warhead missiles. According to U.S. estimates, Russia is likely to complete this modernization around 2022. It is anticipated that, after modernization, Russia's ICBM force will come to rely primarily on two missiles: the single-warhead SS-27 Mod 1 (Topol-M) and the SS-27 Mod 2 (Yars), which can carry up to 4 MIRV warheads. As discussed below, Russia is developing a new heavy ICBM, known as the Sarmat (SS-X-30), which is expected to deploy with 10 or more warheads on each missile. It may also carry the new Avangard hypersonic glide vehicle, also described below. According to unclassified reports, Russia has pursued other projects, including an intermediate-range version of the SS-27 Mod 2 (known as the RS-26) and a rail-mobile ICBM called Barguzin, but their future is unclear. Submarine-Launched Ballistic Missiles Russia's Strategic Naval Forces are a part of the Russian Navy. Ballistic missile submarines are deployed with the Northern Fleet, headquartered in Severomorsk in the Murmansk region, and the Pacific Fleet, headquartered in Vladivostok. The Strategic Naval Forces have 10 strategic submarines of three different types: Delta, Typhoon, and Borei class. Some of these are no longer operational. The last submarine of the Typhoon class is used as a testbed for launches of the Bulava missile, which is deployed on the Borei-class submarines. The Delta and Borei-class submarines can each carry 16 SLBMs, with multiple warheads on a missile, "for a combined maximum loading of more than 700 warheads." However, because Russia may have reduced the number of warheads on some of the missiles to comply with limitations set by the 2010 New START Treaty, the submarine fleet may carry only 600 warheads. Most of the submarines in Russia's fleet are the older Delta class, including one Delta III submarine and 6 Delta IV submarines. The last of these was built in 1992; they are based with Russia's Northern Fleet. Although older Delta submarines were deployed with three-warhead SS-N-18 missiles, the Delta IV submarines carry the four-warhead SS-N-23 missile. An upgraded version of this missile, known as the Sineva system, entered into service in 2007. Another modification, known as the Liner (or Layner), could reportedly carry up to 10 warheads. Russia began constructing the lead ship in its Borei class of ballistic missile submarines (SSBN) in 1996. After numerous delays, the lead ship joined the Northern Fleet in 2013. According to public reports, Russia will eventually deploy 10 Borei-class submarines, with 5 in the Pacific Fleet and 5 in the Northern Fleet. Three submarines are currently in service, all in the Northern Fleet, and five more are in "various stages of construction." The latter five submarines will be an improved version, known as the Borei-A/II. The first of these has recently completed its sea trials. Russia plans to complete the first eight ships by 2023 and to finish the last two by 2027. Borei-class submarines can carry 16 of the SS-N-32 Bulava missiles; each missile can carry six warheads. The Bulava missile began development in the late 1990s. It experienced numerous test failures before it entered service in 2018. Heavy Bombers Russia's strategic aviation units are part of the Russian Aerospace Forces' Long-Range Aviation Command. This command includes two divisions of Tu-160 (Blackjack) and Tu-95MS (Bear H) aircraft, which are the current mainstay of Russia's strategic bomber fleet. These are located in the Saratov region, in southwestern Russia, and the Amurskaya region, in Russia's Far East. Unclassified sources estimate that Russia has 60 to 70 bombers in its inventoryâ50 of them count under the New START Treaty. Around 50 of these are Tu-95MS Bear bombers; the rest are Tu-160 Blackjack bombers. The former can carry up to 16 AS-15 (Kh-55) nuclear-armed cruise missiles, while the latter can carry up to 12 AS-15 nuclear-armed cruise missiles. Both bombers can also carry nuclear gravity bombs, though experts contend that the bombers would be vulnerable to U.S. or allied air defenses in such a delivery mission. Russia has recently modernized both of its bombers, fitting them with a new cruise missile system, the conventional AS-23A (Kh-101) and the nuclear AS-23B (Kh-102). A newer version of the Tu-160, which is expected to include improved stealth characteristics and a longer range, is set to begin production in the mid-2020s. Experts believe the fleet will then include around 50-60 aircraft, with the eventual development of a new stealth bomber, known as the PAK-DA, as a part of Russia's long-term plans. Nonstrategic Nuclear Weapons Russia has a variety of delivery systems that can carry nuclear warheads to shorter and intermediate ranges. These systems are generally referred to as nonstrategic nuclear weapons, and they do not fall under the limits in U.S.-Soviet or U.S.-Russian arms control treaties. According to unclassified reports, Russia has a number of nuclear weapons available for use by its "naval, tactical air, air- and missile defense forces, as well as on short-range ballistic missiles." It is reportedly engaged in a modernization effort focused on "phasing out Soviet-era weapons and replacing them with newer versions." Unclassified estimates place the number of warheads assigned to nonstrategic nuclear weapons at 1,830. Recent analyses indicate that Russia is both modernizing existing types of short-range delivery systems that can carry nuclear warheads and introducing new versions of weapons that have not been a part of the Soviet/Russian arsenal since the latter years of the Cold War. In May 2019, Lt. Gen. Robert P. Ashley of the Defense Intelligence Agency (DIA) raised this point in a public speech. He stated that Russia has 2,000 nonstrategic nuclear warheads and that its stockpile "is likely to grow significantly over the next decade." He also stated that Russia is adding new military capabilities to its existing stockpile of nonstrategic nuclear weapons, including those employable by ships, aircraft, and ground forces. These nuclear warheads include theater- and tactical-range systems that Russia relies on to deter and defeat NATO or China in a conflict. Russia's stockpile of non-strategic nuclear weapons [is] already large and diverse and is being modernized with an eye towards greater accuracy, longer ranges, and lower yields to suit their potential warfighting role. We assess Russia to have dozens of these systems already deployed or in development. They include, but are not limited to: short- and close-range ballistic missiles, ground-launched cruise missiles, including the 9M729 missile, which the U.S. Government determined violates the Intermediate-Range Nuclear Forces or INF Treaty, as well as antiship and antisubmarine missiles, torpedoes, and depth charges. It is not clear from General Ashley's comments, or from many of the other assessments of Russia's nonstrategic nuclear forces, whether Russia will deploy these new delivery systems with nuclear warheads. Many of Russia's medium- and intermediate-range missile systems, including the Kalibr sea-launched cruise missile and the Iskander ballistic and cruise missiles, are dual-capable and can carry either nuclear or conventional warheads. This is also likely true of the new 9M729 land-based, ground-launched cruise missile, the missile that the United States has identified as a violation of the 1987 INF Treaty. It unclear why Russia retains, and may expand, its stockpile of nonstrategic nuclear weapons. Some argue that these weapons serve to bolster Russia's less capable conventional military forces and assert that as Russia develops more capable advanced conventional weapons, it may limit its nonstrategic modernization program and retire more of these weapons than it acquires. Others, however, see Russia's modernization of its nonstrategic nuclear weapons as complementary to an "escalate to de-escalate" nuclear doctrine and argue that Russia will expand its nonstrategic nuclear forces as it raises the profile of such weapons in its doctrine and warfighting plans. Key Infrastructure Early Warning Russia deploys an extensive early warning system. Operated by its Aerospace Forces, the system consists of a network of early warning satellites that transmit to two command centers: one in the East, in the Khabarovsk region, and one in the West, in the Kaluga region. The data are then transmitted to a command center in the Moscow region. Russia also operates an extensive network of ground-based radars across Russia, as well as in neighboring Kazakhstan and Belarus, that are used for early warning of missile launches and to monitor objects at low-earth orbits. Russia uses the Okno observation station, located in Tajikistan, to monitor of objects that orbit at higher altitudes. Command and Control The Russian President is the Supreme Commander in Chief of the Russian Armed Forces, and he has the authority to direct the use of nuclear weapons. According to a 2016 DIA report, "The General Staff monitors the status of the weapons of the nuclear triad and will send the direct command to the launch crews following the president's decision to use nuclear weapons. The Russians send this command over multiple C2 systems, which creates a redundant dissemination process to guarantee that they can launch their nuclear weapons." According to DIA, Russia "also maintains the Perimetr system, which is designed to ensure that a retaliatory launch can be ordered when Russia is under nuclear attack." It is unknown whether the order to transfer warheads from central storage and release them to the forces is part of the launch authorization. Production, Testing, and Storage Russia has an extensive infrastructure of facilities for the production of nuclear weapons and missiles, although it has consolidated and reduced the size of this infrastructure since the end of the Cold War. Moreover, Russia has improved the security of its nuclear weapons facilities through U.S.-Russian cooperation under the Nunn-Lugar CTR program. Russia has about a dozen research institutes and facilities that participate in the design and manufacture of nuclear and nonnuclear components for its nuclear weapons, provide stockpile support, and engage in civilian nuclear and other research. Russia, which has a significant stockpile of weapons-usable materials, no longer produces highly enriched uranium or plutonium for use in nuclear weapons. Russia's nuclear weapons are stored at approximately 12 national central storage sites. According to analysts, Russia also maintains 34 base-level storage facilities (see Appendix B ). A special unit, the 12 th Main Directorate (GUMO), is responsible for security, transportation, and handling of the warheads. In a period immediately preceding a conflict, it is anticipated that nuclear warheads could be transferred from the national central storage sites to the base-level facilities. Russia ratified the Comprehensive Test Ban Treaty (CTBT) in 2000. Although this treaty has yet to enter into force, Russia claims it has refrained from explosive nuclear testing in accordance with the treaty's requirements. Russia conducts hydrodynamic tests, which do not produce a nuclear yield, at a site located on Novaya Zemlya, an archipelago located in the Arctic Ocean. In his May 2019 speech, DIA Director General Ashley stated that "the United States believes that Russia probably is not adhering to its nuclear testing moratorium in a manner consistent with the 'zero-yield' standard." However, when questioned about this assertion, he said that the U.S. intelligence community does not have "specific evidence that Russia had conducted low-yield nuclear tests" but that the DIA thinks Russia has "the capability to do that." Key Modernization Programs In addition to replacing aging Soviet-era ICBMs, SLBMs, and ballistic missile submarines, Russia is developing several kinds of nuclear delivery vehicles. Some of these, like the Sarmat ICBM, may replicate capabilities that already exist; others could expand the force with new types of delivery systems not previously deployed with nuclear warheads. President Putin unveiled most of these systems during his March 1, 2018, annual State of the Nation address to the Federal Assembly, when he presented a range of weapons systems currently under development in Russia. His speech also featured videos and animations of new weapons systems. During his speech, President Putin explicitly linked Russia's new strategic weapons programs to the U.S. withdrawal from the ABM Treaty in 2002. He said: We did our best to dissuade the Americans from withdrawing from the treaty. All in vain. The US pulled out of the treaty in 2002. Even after that we tried to develop constructive dialogue with the Americans. We proposed working together in this area to ease concerns and maintain the atmosphere of trust. At one point, I thought that a compromise was possible, but this was not to be. All our proposals, absolutely all of them, were rejected. And then we said that we would have to improve our modern strike systems to protect our security . [Emphasis added] In reply, the US said that it is not creating a global BMD system against Russia, which is free to do as it pleases, and that the US will presume that our actions are not spearheaded against the USâ¦. â¦ the US, is permitting constant, uncontrolled growth of the number of anti-ballistic missiles, improving their quality, and creating new missile launching areas. If we do not do something, eventually this will result in the complete devaluation of Russia's nuclear potential. Meaning that all of our missiles could simply be intercepted. Let me recall that the United States is creating a global missile defence system primarily for countering strategic arms that follow ballistic trajectories. These weapons form the backbone of our nuclear deterrence forces, just as of other members of the nuclear club. As such, Russia has developed, and works continuously to perfect, highly effective but modestly priced systems to overcome missile defence. They are installed on all of our intercontinental ballistic missile complexes. These comments, and President Putin's repeated reference to U.S. ballistic missile defenses, provide a possible context for many of the ongoing modernization programs. Avangard Hypersonic Glide Vehicle The Avangard hypersonic glide vehicle (HGV), previously known as Project 4202, is a reentry body carried atop an existing ballistic missile that can maneuver to evade air defenses and ballistic missile defenses to deliver a nuclear warhead to targets in Europe and the United States. Russia views the Avangard system as a hedge to buttress its second-strike capability, ensuring that a retaliatory strike can penetrate U.S. ballistic missile defenses. In his March 2018 remarks, President Putin specifically stressed that Russia would pursue "a new hypersonic-speed, high-precision new weapons systems that can hit targets at inter-continental distance and can adjust their altitude and course as they travel" in response to the U.S. withdrawal from the ABM Treaty. Some U.S. analysts, however, have noted that the Avangard could be used "as a first strike system to be used specifically against missile defenses, clearing the way for the rest of Russia's nuclear deterrent." Others have stressed that the Avangard is likely to serve as a niche capability that adds little to Russia's existing nuclear force structure. The Soviet Union first experimented with HGV technology in the 1980s, partly in response to the expected deployment of U.S. ballistic missile defense systems under the SDI program. The current program has been under development since at least 2004 and has undergone numerous tests. In the most recent test, on December 26, 2018, the glider was launched atop an SS-19 ICBM from the Dombarovskiy missile base in the Southern Urals toward a target on the Kamchatka Peninsula more than 3,500 miles away. According to some sources, Russia might deploy the Avangard on the SS-18, SS-19 and, potentially, on the new Sarmat ICBMs. Experts continue to debate Avangard's true technical characteristics. However, President Putin has stated that the system is capable of "intensive maneuvering" and achieving "supersonic speeds in excess of Mach 20." After the December 2018 test, President Putin announced that the weapon would be added to Russia's nuclear arsenal in 2019. In January 2019, an official with Russia's Security Council confirmed that the Avangard had been integrated onto the SS-19 force. According to the Commander of Russia's Strategic Rocket Forces, the Dombarovskiy Missile Division will stand up a "missile regiment comprising a modified command-and-control post and two silo-based launchers" in 2019. On December 27, 2019, the Russian military announced that the Strategic Rocket Forces had activated two SS-19 missiles equipped with Avangard hypersonic glide vehicles. Although not specified in the Russian announcement, the missiles are likely deployed with the 13 th regiment of the Dombarovskiy (Red Banner) missile division based in the Orenburg region. The regiment has reportedly received two retrofitted UR-100NUTTkH (NATO reporting name: SS-19 Stiletto) ICBMs armed with one Avangard hypersonic boost-glide warhead each. According to earlier reports, the 13 th regiment is expected to eventually receive four more SS-19 ICBMs fitted with Avangard warheads. Reports have stated that the Strategic Rocket Forces will have two missile regiments, each with six Avangard systems by 2027. Each converted missile would carry one HGV. Russian officials have indicated that these missiles will count under the New START Treaty. Consequently, Russians officials conducted an exhibition of the system for U.S. inspectors, as mandated by the New START Treaty, prior to deployment. The exhibition demonstrated that each missile will carry one Avangard HGV, but it is not clear whether or how Russia demonstrated that each HGV would carry only one warhead. Sarmat ICBM The RS-28 Sarmat (SS-X-30) missile is a liquid-fueled heavy ICBM that Russia intends to eventually deploy as a replacement for the SS-18 heavy ICBM. Russia has been reducing the number of SS-18 missiles in its force since the 1990s, when the original START Treaty required a reduction from 308 to 154 missiles. Russia likely would have eliminated all of the missiles if the START II Treaty (described below) had entered into force, but it has retained 46 of them under New START, while awaiting the development of the Sarmat. Reports indicate that the Sarmat can carry 10, or according to some sources, 15 warheads, along with penetration aids, and potentially several Avangard hypersonic glide vehicles. Putin stated in his March 2018 speech that Sarmat weighs over 200 tons, but details about the ICBM's true weight, and thus its payload, remain unclear. Russia began testing the Sarmat missile in 2016; reports indicate that it is likely to be deployed in the Uzhur Missile Division around 2021. Russia also may deploy the missile at the Dombarovsky Missile Division, with an eventual total of seven Sarmat regiments with 46 missiles. This number is equal to roughly the number of SS-18 ICBMs that Russia has retained under New START and, therefore, indicates that Russia could be planning to deploy the Sarmat in a manner consistent with the limits in the treaty. Some have speculated, however, that Russia could exceed the limits in the treaty by eventually expanding its deployment of Sarmat missiles or increasing the number of warheads on each missile to exceed the treaty's warhead limits. In his March 2018 speech, President Putin highlighted the Sarmat missile's ability to confound and evade ballistic missile defense systems. As was the case with the SS-18 missile, the large number of warheads and penetration aids are designed to increase the probability that the missile's warhead could penetrate defenses and reach its target. In addition, President Putin noted that Sarmat could attack targets by flying over both the North and South Poles, evading detection by radars seeking missiles flying in an expected trajectory over the North Pole. He also stated that the missile "has a short boost phase, which makes it more difficult to intercept for missile defense systems." He emphasized that Sarmat is a formidable missile and, owing to its characteristics, "is untroubled by even the most advanced missile defense systems." Poseidon Autonomous Underwater Vehicle The existence of Poseidon, a nuclear-powered autonomous underwater vehicle (also known as Status 6 or Kanyon, its NATO designation), was first "leaked" to the press in November 2015, when a slide detailing it appeared in a Russian Ministry of Defense briefing. According to that slide, the autonomous underwater vehicle, or drone, could reach a depth of 1,000 meters, go at a speed of 100 knots, and have a range of up to 10,000 km. The slide indicated that the system would be tested between 2019 and 2025. Press reports indicate, however, that Russia has been testing the system since at least 2016, with the most recent test occurring in November 2018. However, the system may not be deployed until 2027. Russia may deploy the Poseidon drone on four submarines, two in the Northern Fleet and two in the Pacific Fleet. Each submarine would carry eight drones. According to some reports, each drone would be armed with a two-megaton nuclear or conventional payload that could be detonated "thousands of feet" below the surface. Russia could release the drone from its submarine off the U.S. coast and detonate it in a way that would "generate a radioactive tsunami" that could destroy cities and other infrastructure along the U.S. coast. When Russia first revealed the existence of this new drone, some analysts questioned whether Russia was developing a new first-strike weapon that could evade U.S. defenses and devastate the U.S. coastline. Russia, however, views the weapon as a second- or third-strike option that could ensure a retaliatory strike against U.S. cities. Like the Avangard and Sarmat, this system, according to Russian statements, would also serve as a Russian response to concerns about the U.S. withdrawal from the ABM Treaty and U.S. advances in ballistic missile defenses. As President Putin noted in his March 2018 speech, "we have developed unmanned submersible vehicles that can move at great depths (I would say extreme depths) intercontinentally, at a speed multiple times higher than the speed of submarines, cutting-edge torpedoes and all kinds of surface vesselsâ¦. They are quiet, highly manoeuvrable and have hardly any vulnerabilities for the enemy to exploit." Burevestnik Nuclear-Powered Cruise Missile The Burevestnik (SSC-X-9 Skyfall) is a nuclear-powered cruise missile intended to have "unlimited" range, because it would be powered by a nuclear reactor. In his March 2018 speech, Putin stressed that the "low-flying stealth missile carrying a nuclear warhead, with almost an unlimited range, unpredictable trajectory and ability to bypass interception boundaries" would be "invincible against all existing and prospective missile defense and counter-air defense systems." According to reports, Russia has been conducting tests with a prototype missile, and with an electric power source instead of a nuclear reactor, since 2016. Tests have continued to take place as recently as January 2019. Reports indicate, however, that most of the tests have ended in failure, and that tests using a nuclear power source are unlikely to occur in the near future, as failed tests could spread deadly radiation. According to some reports, Russia is unlikely to deploy the cruise missile for at least another decade and, even then, the high cost could limit the number introduced into the Russian arsenal. Kinzhal Air-Launched Ballistic Missile Russia is developing a nuclear-capable air-launched ballistic missile, known as the Kinzhal, that could be launched on MiG-31K interceptor aircraft or Tu-22M bombers. According to press reports, the Kinzhal is a variant of the Iskander short-range ballistic missile currently in service with the Russian Armed Forces. The air-launched version may be intended to be launched while the aircraft is at supersonic speeds, adding to the system's invulnerability to U.S. air and missile defenses. President Putin noted this capability in his March 2018 speech, when he said that the missile "flying at a hypersonic speed, 10 times faster than the speed of sound, can also maneuver at all phases of its flight trajectory, which also allows it to overcome all existing and, I think, prospective anti-aircraft and anti-missile defense systems, delivering nuclear and conventional warheads in a range of over 2,000 kilometers." Unless Russian aircraft approach U.S. shores before releasing the missile, however, it will not have the range needed to target U.S. territory. Instead, experts believe the missile is intended primarily to target naval vessels. President Putin stated that the system entered service in the Southern Military District in December 2017. Russia's Minister of Defense stated in February 2019 that MiG-31 crews have taken the Kinzhal on air patrols over the Black and Caspian seas. Tsirkon Anti-Ship Hypersonic Cruise Missile Russia has been developing the Tsirkon (3M-22, NATO designated SS-N-33), an anti-ship hypersonic cruise missile, since at least 2011. The missile is "designed for naval surface vessels and submarines, able to attack both ships and ground targets." It is intended to replace the SS-N-19 cruise missile on the Kirov-class cruisers and is expected to be test-launched from the new Yasen-class submarine Kazan . In a February 2019 address to the Federal Assembly, Putin stated that Tsirkon is a "hypersonic missile that can reach speeds of approximately Mach 9 and strike a target more than 1,000 km away both under water and on the ground." He also stated that the missile could be launched from submarines. In late 2019, President Putin also noted that Russia would develop a land-based version of this missile as a response to the U.S. withdrawal from the INF Treaty. The Tsirkon is undergoing testing with potential deployment around 2020. Barguzin Rail-Mobile ICBM Russia has been developing a rail-mobile ICBM system to replace the SS-24 Mod 3 Scalpel since 2013. An ejection test of the missile appears to have been conducted. However, Russia may have canceled the program in 2017. RS-26 Rubezh ICBM Russia has been developing a version of its three-stage RS-24 Yars ICBM with only two stages. According to unclassified reports, Russia conducted four flight tests of this missile in the early part of this decade. Two of these flight testsâone that failed in September 2011 and one that succeeded in May 2012âflew from Plesetsk to Kura, a distance of approximately 5,800 kilometers (3,600 miles). The second two testsâin October 2012 and June 2013âwere both successful. In both cases, the missile flew from Kapustin Yar to Sary-Shagan, a distance of 2,050 kilometers (1,270 miles). These tests raised questions about whether the missile was designed to violate, or circumvent, the limits in the 1987 INF Treaty, as that treaty banned the testing and deployment of missiles with a range between 500 and 5,500 kilometers. Russia appears to have cancelled this missile program in 2018, but some analysts believe it might reappear now that the INF Treaty has lapsed. The Effect of Arms Control on Russia's NuclearÂ Forces The number of warheads on Soviet strategic nuclear delivery vehicles reached its peak in the mid-1980s and began to decline sharply by the early 1990s (see Figure 2 ). This decline continued, with a few pauses, through the 1990s and 2000s. While a number of factors likely contributed to this decline, most experts agree that these reductions were shaped by the limits in bilateral arms control agreements. The SALT Era (1972-1979) The United States and the Soviet Union signed their first formal agreements limiting nuclear offensive and defensive weapons in May 1972. The Strategic Arms Limitation Talks (SALT) produced two agreements: the Interim Agreement on Certain Measures with Respect to the Limitation of Strategic Offensive Arms (Interim Agreement) and the Treaty on the Limitation of Anti-Ballistic Missile Systems (ABM Treaty). The parties paired these two agreements, in part, to forestall an offense-defense arms race, where increases in the number of missile defense interceptors on one side would encourage the other to increase the number of missiles needed to saturate those defenses. The United States also sought to limit the number of large ICBMs in the Soviet offensive force, an area where the Soviet Union had an advantage over the United States. As a result, the Interim Agreement imposed a freeze on the number of launchers for ICBMs that the United States and the Soviet Union could deploy. (At the time the United States had 1,054 ICBM launchers and the Soviet Union had 1,618 ICBM launchers.) The two countries also agreed to freeze their number of SLBM launchers and modern ballistic missile submarines, though they could add SLBM launchers if they retired old ICBM launchers. Although the Interim Agreement limited the number of Soviet ICBM and SLBM launchers, it did not restrain the growth in the number of warheads carried on the missiles deployed in those launchers. After signing the agreement, both nations expanded the number of warheads on their missiles by deploying missiles with multiple warheads (MIRVs). The Soviet deployment of MIRVs led to a sharp increaseâfrom around 2,000 to more than 6,100âin the number of warheads on ICBMs and SLBMs between 1972 and 1979. The second Strategic Arms Limitation Treaty (SALT II) sought to curb this growth by limiting the number of missiles that could carry multiple warheads. The treaty would have capped all strategic nuclear delivery systems at 2,400 and limited each side to 1,320 MIRVed ICBMs, MIRVed SLBMs, and heavy bombers equipped to carry nuclear-armed, air-launched cruise missiles (ALCMs). The treaty would not have limited the total number of warheads that could be carried on these delivery vehicles, even though the parties agreed that they would not deploy MIRVed ICBMs with more than 10 warheads each and MIRVed SLBMs with more than 14 warheads each. SALT II proved to be highly controversial. Some analysts argued that it would fail to reduce nuclear warheads or curb the arms race, while others argued that the treaty would allow the Soviet Union to maintain strategic superiority over the United States with its force of large, heavily MIRVed land-based ballistic missiles. Shortly after the Soviet Union invaded Afghanistan in December 1979, President Carter withdrew the treaty from the Senate's consideration. The Soviet Union continued to increase the number of warheads on its ICBMs and SLBMs, reaching around 10,000 warheads in 1989. INF and START (1982-1993) President Reagan entered office in 1981 planning to expand U.S. nuclear forces and capabilities in an effort to counter the perceived Soviet advantages in nuclear weapons. Initially, at least, he rejected the use of arms control agreements, but after Congress and many analysts pressed for more diplomatic initiatives, the Reagan Administration outlined negotiating positions to address intermediate-range missiles, long-range strategic weapons, and ballistic missile defenses. These negotiations began to bear fruit in the latter half of President Reagan's second term, with the signing of the Intermediate-Range Nuclear Forces (INF) Treaty in 1987. In the INF Treaty, the United States and Soviet Union agreed to destroy all intermediate-range and shorter-range ground-launched ballistic missiles and ground-launched cruise missiles with ranges between 500 and 5,500 kilometers (between 300 and 3,400 miles). The Soviet Union destroyed 1,846 missiles, including 654 SS-20 missiles that carried three warheads apiece, resulting in a reduction of more than 3,100 deployed warheads. The INF Treaty was seen as a significant milestone in arms control because it established an intrusive verification regime and eliminated entire classes of weapons that both sides regarded as modern and effective. The United States and the Soviet Union began negotiations on the Strategic Arms Reduction Treaty (START) in 1982, although the talks stopped between 1983 and 1985 after a Soviet walkout in response to the U.S. deployment of intermediate-range missiles in Europe. The Soviet Union viewed START as a continuation of the SALT process and initially proposed limits on the same categories of weapons defined in the SALT II Treaty: total delivery vehicles, MIRVed ballistic missiles, and heavy bombers equipped to carry nuclear-armed ALCMs. The United States, however, sought to change the units of account from launchers to missiles and warheads, and proposed deep reductions rather than marginal changes from the SALT II level. The United States specifically sought sublimits on heavy ICBMs (the Soviet SS-18) and heavily MIRVed ICBMs (at the time, the Soviet SS-19), but it did not include any limits on heavy bombers. The nations adjusted their positions in 1985 and 1986 and saw the beginnings of a convergence after the October 1986 summit in Reykjavik, Iceland. However, they were unable to reach agreement by the end of the Reagan Administration. President George H. W. Bush continued the negotiations during his term, and the United States and the Soviet Union signed START in July 1991. The countries agreed that each side could deploy up to 6,000 attributed warheads on 1,600 ballistic missiles and bombers, with up to 4,900 warheads on ICBMs and SLBMs (see Table 4 ). START also limited each side to 1,540 warheads on "heavy" ICBMs, which represented a 50% reduction in the number of warheads deployed on the SS-18 ICBMs. The United States placed a high priority on reductions in Soviet heavy ICBMs during the negotiations (as it had during the SALT negotiations) and seemed to succeed, with this provision, in reducing the Soviet advantage in this category of weapons. When the Soviet Union collapsed at the end of 1991, about 70% of the strategic nuclear weapons covered by START were deployed at bases in Russia, and the other 30% were deployed in Ukraine, Belarus, and Kazakhstan. In May 1992, the four newly independent countries and the United States signed a protocol that made all four post-Soviet states parties to the treaty, and Ukraine, Belarus, and Kazakhstan agreed to eliminate all of the nuclear weapons on their territory. The collapse of the Soviet Union also led to calls for deeper reductions in strategic offensive arms. As a result, the United States and Russia signed a second treaty, known as START II, in January 1993, weeks before the end of the Bush Administration. START II would have limited each side to between 3,000 and 3,500 warheads; reductions initially were to occur by the year 2003, but that deadline would have been extended until 2007 if the nations had approved a new protocol. In addition, START II would have banned all MIRVed ICBMs. As a result, it would have accomplished the long-standing U.S. objective of eliminating the Soviet SS-18 heavy ICBMs. Although START II was signed in early January 1993, its full consideration was delayed until START entered into force at the end of 1994, during a dispute over the future of the Arms Control and Disarmament Agency. The U.S. Senate eventually consented to its ratification on January 26, 1996. The Russian Duma also delayed its consideration of START II as members addressed concerns about some of the limits. Russia also objected to the economic costs it would bear when implementing the treaty, because, with many Soviet-era systems nearing the end of their service lives, Russia would have to invest in new systems to maintain forces at START levels. This proved difficult as Russia endured a financial crisis in the latter half of the 1990s. The treaty's future clouded again after the United States sought to negotiate amendments to the 1972 ABM Treaty. With these delays and disputes, START II never entered into force, although Russian nuclear forces continued to decline as Russia retired its older systems. The Moscow Treaty and New START Although the START Treaty was due to remain in force through December 2009, the United States and Russia signed the Strategic Offensive Reductions Treaty, known as the Moscow Treaty, in May 2002. The United States had not expected to negotiate a new treaty. During a summit meeting with Russian President Putin, President Bush stated that the United States would reduce its "operationally deployed" strategic nuclear warheads to between 1,700 and 2,200 warheads during the next decade. President Putin indicated that Russia wanted to use the formal arms control process to reach a "reliable and verifiable agreement" in the form of a legally binding treaty that would provide "predictability and transparency" and ensure the "irreversibility of the reduction of nuclear forces." The United States preferred a less formal processâsuch as an exchange of letters and, possibly, new transparency measuresâthat would allow the United States to maintain the flexibility to size and structure its nuclear forces in response to its own needs. The resulting treaty satisfied these objectives; it codified the planned reductions to 1,700-2,200 warheads, but it contained no definitions, counting rules, or schedules to guide implementation. Each party would simply declare the number of operationally deployed warheads (a term that remained undefined) in its forces at the implementation deadline of December 31, 2012. The treaty would then expire, allowing both parties to restore forces or remain at the limit. The treaty also lacked monitoring and verification provisions, but because the original START Treaty remained in force, its verification provisions continued to provide insights into Russian forces. Knowing that the verification provisions in START were due to expire in late 2009, the United States and Russia began to discuss options for arms control after START in mid-2006, but they were unable to agree on a path forward. The United States initially did not want to negotiate a new treaty, but it would have been willing to informally extend some of START's monitoring provisions. Russia wanted to replace START with a new treaty that would further reduce deployed forces while using many of the same definitions and counting rules in START. In December 2008, the two sides agreed that they wanted to replace START before it expired, but acknowledged that this task would have to be left to negotiations between Russia and the Obama Administration. These talks began in early 2009; the United States and Russia signed the new Strategic Arms Reduction Treaty (New START) in April 2010. The New START Treaty limits each side to no more than 800 deployed and nondeployed ICBM and SLBM launchers and deployed and nondeployed heavy bombers equipped to carry nuclear armaments. Within that total, it limits each side to no more than 700 deployed ICBMs, SLBMs, and heavy bombers equipped to carry nuclear armaments. The treaty also limits each side to no more than 1,550 deployed warheads; this limit counts the actual number of warheads carried by deployed ICBMs and SLBMs, and one warhead for each deployed heavy bomber equipped for nuclear armaments. New START also contains a monitoring regime, similar to the regime in START, that requires extensive data exchanges, exhibitions, and on-site inspections to verify compliance with the treaty. The limits in New START differ from those in the original START Treaty in a number of ways. First, START contained sublimits on warheads attributed to different types of strategic weapons, in part because the United States wanted the treaty to impose specific limits on elements of the Soviet force that were deemed to be destabilizing. New START, in contrast, contains only a single limit on the aggregate number of deployed warheads, thereby providing each nation with the freedom to mix their forces as they see fit. Second, under START, to determine the number of warheads that counted against the treaty limits, the United States and Russia tallied the number of deployed launchers, assuming that each launcher contained a missile carrying the number of warheads "attributed" to that type of missile. Under New START, the United States and Russia also count the number of deployed launchers, but instead of calculating an attributed number of warheads, they simply declare the total number of warheads deployed across their force. Table 4 summarizes the limits in START, the Moscow Treaty, and New START. Figure 4 shows how the numbers of warheads and launchers in Russia's strategic nuclear forces have declined over the last 20 years. Because the definitions and counting rules differ, it is difficult to compare the force sizes across treaties. Moreover, Russia's fiscal crisis in the late 1990s and subsequent delays in some of its modernization programs may have produced similar reductions even in the absence of arms control. Nevertheless, while the numbers of warheads on Soviet strategic nuclear forces peaked in the late 1980s, the numbers have declined since the two sides began implementing the reductions mandated by these treaties. Issues for Congress Congress has held several hearings in recent years where it has sought information about Russian nuclear weapons and raised concerns about the pace and direction of Russia's nuclear modernization programs. Specifically, some Members have questioned whether Russia and the United States are approaching a new arms race as both modernize their forces; they have addressed concerns about the future size and structure of Russia's nuclear forces if the New START Treaty lapses in 2021, and they have sought to understand the content of and debate about Russia's nuclear doctrine. This section reviews some of the key issues discussed in these hearings. Arms Race Dynamics The United States and Russia are both pursuing modernization programs to rebuild and recapitalize their nuclear forces. Each began this process to replace existing systems that have been in service since the Cold War and are reaching the end of their service lives. In many cases, both nations have extended the life of these aging systems. Russia retains some ballistic missiles that the Soviet Union first fielded in the 1980s (and, therefore, were expected to be replaced by the early 2000s); it may retire many of these over the next 10 years as it completes its current modernization programs. The United States extended the life of its Ohio-class submarines from 30 to 42 years by refueling their reactor cores, and it extended the lives of both land-based and submarine-based missiles by replacing the propellant in existing motors and replacing guidance systems. The United States plans to begin fielding new systems in the late 2020s. Many analysts and observers have identified an arms race dynamic in these parallel modernization programs. Some believe that Russia is at faultâthat the United States is falling behind because Russia began to deploy new missiles and submarines in the early 2000s, while the United States will not field similar systems until the late 2020s, and because Russia is developing new and more exotic systems, as described above. David Trachtenberg, the Principal Deputy Under Secretary of Defense for Policy, raised this point in April 2018, when he noted that "it takes two to race." He stated that the United States is "not interested in matching the Russians system for system. The Russians have been developing an incredible amount of new nuclear weapons systems, including the novel, nuclear systems that President Putin unveiled to great fanfare a number of months ago." Franklin Miller, a former Pentagon and National Security Council official, made a similar point during a Senate Armed Services Committee hearing in early 2019 when he noted that "the [U.S.] program is not creating a nuclear arms race. Russia and China began modernizing and expanding their nuclear forces in the 2008-2010 timeframe and since then have been placing large numbers of new strategic nuclear systems in the field. The United States has not deployed a new nuclear delivery system in this century and the first products of our nuclear modernization program will not be deployed until the mid to late 2020s." Others argue that the United States is spurring the arms race, in that the expansive U.S. modernization program might heighten the mistrust between the two nations and provide Russia with an incentive to expand its programs beyond what was needed to replace aging Soviet-era systems. Former Secretary of Defense William Perry raised this point in an interview in 2015, when the Obama Administration offered its support to the full scope of U.S. nuclear modernization programs. He noted that "we're now at the precipice, maybe I should say the brink, of a new nuclear arms race" that "will be at least as expensive as the arms race we had during the Cold War, which is a lot of money." Some have disputed the notion that the modernization programs are either evidence of an arms race or an incentive to pursue one. Both nations are modernizing their forces because existing systems are aging out; neither is pursuing these programs because the other is modernizing its forces, and neither would likely cancel its programs if the other refrained from its efforts. As former Secretary of Defense Ashton Carter noted in 2016, "In the end, though, this is about maintaining the bedrock of our security and after too many years of not investing enough, it's an investment that we, as a nation, have to make because it's critical to sustaining nuclear deterrence in the 21 st century." Russia seems to be in a similar position; it delayed a planned modernization cycle in the late 1990s and has been pursuing a number of programs at a relatively slow pace since that time. Moreover, the new types of strategic offensive arms introduced recently seem to be more of a response to concerns about U.S. missile defense programs than a response to U.S. offensive modernization programs. The Future of Arms Control The New START Treaty is due to lapse in 2021 unless the United States and Russia agree to extend it for a period of no more than five years. The Trump Administration is reportedly conducting an interagency review of New START to determine whether it continues to serve U.S. national security interests, and this review will inform the U.S. approach to the treaty's extension. Among the issues that might be under consideration are whether the United States should be willing to extend New START following Russia's violation of the INF Treaty, whether the limits in the treaty continue to serve U.S. national security interests, and whether the insights and data that the monitoring regime provides about Russian nuclear forces remain of value for U.S. national security. Russia's nuclear modernization programs, in general, and its development of new kinds of strategic offensive arms have also figured into the debate about the extension of New START. For example, General John Hyten, the commander of U.S. Strategic Command (STRATCOM), has stated that he believes New START serves U.S. national security interests because its monitoring regime provides transparency and visibility into Russian nuclear forces, and because its limits provide predictability about the future size and structure of those forces. However, in testimony before the Senate Armed Services Committee in February 2019, General Hyten expressed concern about Russia's new nuclear delivery systemsâthe Poseidon underwater drone, the Burevestnik nuclear-powered cruise missile, the Kinzhal air-launched ballistic missile, and the Tsirkon hypersonic cruise missileâwhich would not count under New START's limits. He noted that these weapons could eventually pose a threat to the United States and that he believed the United States and Russia should expand New START so they would count them under the treaty. Some analysts have questioned whether this approach makes sense. As noted above, Russia is not likely to deploy these systems until later in the 2020s and, even then, the numbers are likely to be relatively small. On the other hand, Russia began to deploy the Avangard hypersonic glide vehicle in late December 2019 and may deploy the Sarmat heavy ballistic missile in 2020 or 2021. Both will count under New START if it remains in force. If Russia refuses to count the more exotic weapons under New START and the treaty expires, it will no longer be bound by any numerical limits on the number of long-range missiles and heavy bombers it can deploy, or the number of nuclear warheads that could be deployed on those missiles and bombers. Because Russia is already producing new missiles like the Yars, it could possibly accelerate production if New START expires to increase the number of warheads added to the force. Russia could also possibly add to the number of warheads deployed on some of these missiles, increasing them from four warheads to six to eight warheads per missile. In addition, Russia would likely have to limit the deployment of the Sarmat missile and retire old SS-18 missiles to remain under New START limits, but it could deploy hundreds of new warheads on the Sarmat between 2021 and 2026 if the treaty were not in place. According to some analyses, if Russia expanded its forces with these changes, it could possibly add more than 1,000 warheads to its force without increasing the number of deployed missiles between 2021 and 2026. The Debate Over Russia's Nuclear Doctrine The 2018 Nuclear Posture Review (NPR) adheres to the view that Russia has adopted an "escalate to de-escalate" strategy and asserts that Russia "mistakenly assesses that the threat of nuclear escalation or actual first use of nuclear weapons would serve to 'de-escalate' a conflict on terms favorable to Russia." The NPR's primary concern is with a scenario where Russia executes a land-grab on a NATO ally's territory and then presents U.S. and NATO forces with a fait accompli by threatening to use nuclear weapons. The NPR thus recommends that the United States develop new low-yield nonstrategic weapons that, it argues, would provide the United States with a credible response, thereby "ensuring that the Russian leadership does not miscalculate regarding the consequences of limited nuclear first use." While some experts outside government agree with the assessment of Russian nuclear doctrine described in the Nuclear Posture Review, others argue that it overstates or is inconsistent with Russian statements and actions. Some have argued that the NPR's "evidence of a dropped threshold for Russian nuclear employment is weak." They note that, although some Russian authors and analysts advocated such an approach, was not evident in the government documents published in 2010 and 2014. As a result, they argue that the advocates for this type of strategy may have lost the bureaucratic debates. Others have reviewed reports on Russian military exercises and have disputed the conclusion that there is evidence that Russia simulated nuclear use against NATO in large conventional exercises. One analyst has postulated that Russia may actually raise its nuclear threshold as it bolsters its conventional forces. According to this analyst, "It is difficult to understand why Russia would want to pursue military adventurism that would risk all-out confrontation with a technologically advanced and nuclear-armed adversary like NATO. While opportunistic, and possibly even reckless, the Putin regime does not appear to be suicidal." As a study from the RAND Corporation noted, Russia has "invested considerable sums in developing and fielding long-range conventional strike weapons since the mid-2000s to provide Russian leadership with a buffer against reaching the nuclear thresholdâa set of conventional escalatory options that can achieve strategic effects without resorting to nuclear weapons." Others note, however, that Russia has integrated these "conventional precision weapons and nuclear weapons into a single strategic weapon set," lending credence to the view that Russia may be prepared to employ, or threaten to employ, nuclear weapons during a regional conflict. Appendix A. Russian Nuclear-Capable DeliveryÂ Systems Appendix B. Russian Nuclear Storage Facilities	Summary:	gov_report	1,024	null	89
crs_R46013	crs_R46013_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The Constitution grants Congress authority to impeach and remove the President, Vice President, and other federal "civil Officers" for treason, bribery, or "other high Crimes and Misdemeanors." Impeachment is one of the various checks and balances created by the Constitution, serving as a crucial tool for holding government officers accountable for abuse of power, corruption, and conduct considered incompatible with the nature of an individual's office. Although the term impeachment is commonly used to refer to the removal of a government official from office, the impeachment process, as described in the Constitution, entails two distinct proceedings carried out by the separate houses of Congress. First, a simple majority of the House impeaches âor formally approves allegations of wrongdoing amounting to an impeachable offense. The second proceeding is an impeachment trial in the Senate. If the Senate votes to convict with a two-thirds majority, the official is removed from office. Following a conviction, the Senate also may vote to disqualify that official from holding a federal office in the future. The House has impeached nineteen individuals: fifteen federal judges, one Senator, one Cabinet member, and two Presidents. Of these, eight individualsâall federal judgesâwere convicted by the Senate. The Constitution imposes several requirements on the impeachment process. When conducting an impeachment trial, Senators must be "on Oath or Affirmation," and the right to a jury trial does not extend to impeachment proceedings. If the President is impeached and tried in the Senate, the Chief Justice of the United States presides at the trial. Finally, the Constitution bars the President from using the pardon power to shield individuals from impeachment or removal from office. Understanding the historical practices of Congress on impeachment is central to fleshing out the meaning of the Constitution's impeachment clauses. While much of constitutional law is developed through jurisprudence analyzing the text of the Constitution and applying prior judicial precedents, the Constitution's meaning is also shaped by institutional practices and political norms. James Madison, for instance, argued that the meaning of certain provisions in the Constitution would be "liquidated" over time, or determined through a "regular course of practice." Justice Joseph Story thought this principle applied to impeachment, noting that the Framers understood that the meaning of "high Crimes and Misdemeanors" constituting impeachable offenses would develop over time, much like the common law. Indeed, Justice Story believed it would be impossible to define precisely the full scope of political offenses that may constitute impeachable behavior in the future. Moreover, the power of impeachment is largely immune from judicial review, meaning that Congress's choices in this arena are unlikely to be overturned by the courts. For that reason, examining the history of actual impeachments is crucial to determining the meaning of the Constitution's impeachment provisions. Consistent with this backdrop, this report begins with an examination of the historical background on impeachment, including the perspective of the Framers as informed by English and colonial practice. It then turns to the unique constitutional roles of the House and Senate in the process, followed by a discussion of impeachment practices throughout the country's history. The report concludes by noting and exploring several recurring questions about impeachment, including legal considerations relevant to a Senate impeachment trial. Historical Background on Impeachment English and Colonial Practice The concept of impeachment and the standard of "high Crimes and Misdemeanors" in the federal Constitution originate from English, colonial, and early state practice. During the struggle in England by Parliament to impose restraints on the Crown's powers, the House of Commons impeached and tried before the House of Lords ministers of the Crown and influential individualsâbut not the Crown itself âwho were often considered beyond the reach of the criminal courts. The tool was used by Parliament to police political offenses committed against the "system of government." Parliament used impeachment as a tool to punish political offenses that damaged the state or subverted the government, although impeachment was not limited to government ministers. At least by the second half of the seventeenth century, impeachment in England represented a remedy for "misconduct in high places." The standard of high crimes and misdemeanors appeared to apply to, among other things, significant abuses of a government office, misapplication of funds, neglect of duty, corruption, abridgement of parliamentary rights, and betrayals of the public trust. Punishment for impeachment was not limited to removal from office, but could include a range of penalties upon conviction by the House of Lords, including imprisonment, fines, or even death. In the English experience, the standard of high crimes and misdemeanors appears to have addressed conduct involving an individual's abuse of power or office that damaged the state. Inheriting the English practice, the American colonies adopted their own distinctive impeachment practices. These traditions extended into state constitutions established during the early years of the Republic. The colonies largely limited impeachment to officeholders based on misconduct committed in office, and the available punishment for impeachment was limited to removal from office. Likewise, many state constitutions adopted after the Declaration of Independence in 1776, but before the federal Constitution was ratified, incorporated impeachment provisions limiting impeachment to government officials and restricting the punishment for impeachment to removal from office with the possibility of future disqualification from office. At the state level, the body charged with trying an impeachment varied. Choices of the Framers: An "Americanized" Impeachment System The English and colonial history thus informed the Framers' consideration and adoption of impeachment procedures at the Constitutional Convention. In some ways, the Framers adopted the general framework of impeachment inherited from English practice. The English Parliamentary structure of a bicameral legislatureâdividing the power of impeachment between the "lower" house, which impeached individuals, and an "upper" house, which tried themâwas replicated in the federal system with the power to impeach given to the House of Representatives and the power to try impeachments assigned to the Senate. Nonetheless, influenced by the impeachment experiences in the colonies, the Framers ultimately adopted an "Americanized" impeachment practice with a republican character distinct from English practice. The Framers' choices narrowed the scope of impeachable offenses and persons subject to impeachment as compared to English practice. For example, the Constitution established an impeachment mechanism exclusively geared toward holding public officials, including the President, accountable. This contrasted with the English practice of impeachment, which could extend to any individual save the Crown and was not limited to removal from office, but could lead to a variety of punishments. Likewise, the Framers adopted a requirement of a two-thirds majority vote for conviction on impeachment charges, shielding the process somewhat from naked partisan control. This too differed from the English practice, which allowed conviction on a simple majority vote. And in England, the Crown could pardon individuals following an impeachment conviction. In contrast, the Framers restricted the pardon power from being applied to impeachments, rendering the impeachment process essentially unchecked by the executive branch. Ultimately, the Framers' choices in crafting the Constitution's impeachment provisions provide Congress with a crucial check on the other branches of the federal government and inform the Constitution's separation of powers. Impeachment Trials The Framers also applied the lessons of English history and colonial practice in determini ng the structure and location of impeachment trials. As mentioned above, most of the American colonies and early state constitutions adopted their own impeachment procedures before the establishment of the federal Constitution, placing the power to try impeachments in various bodies. At the Constitutional Convention, the proper body to try impeachments posed a difficult question. Several proposals were considered that would have assigned responsibility for trying impeachments to different bodies, including the Supreme Court, a panel of state court judges, or a combination of these bodies. One objection to granting the Supreme Court authority to try impeachments was that Justices were to be appointed by the President, casting doubt on their ability to be independent in an impeachment trial of the President or another executive official. Further, a crucial legislative check in the Constitution's structure against the judicial branch is impeachment, as Article III judges cannot be removed by other means. To permit the judiciary to have the ultimate say in one of the most significant checks on its power would subvert the purpose of that important constitutional limitation. Rather than allowing a coordinate branch to play a role in the impeachment process, the Framers decided that Congress alone would determine who is subject to impeachment. This framework guards against, in the words of Alexander Hamilton, "a series of deliberate usurpations on the authority of the legislature" by the judiciary. Likewise, the Framers' choice to place both the accusatory and adjudicatory aspects of impeachment in the legislature renders impeachment "a bridle in the hands of the legislative body upon the executive" branch. That said, the Framers' choice also imposed institutional constraints on the process. Dividing the power to impeach from the authority to try and convict guards against "the danger of persecution from the prevalency of a fractious spirit in either" body. Finally, the Framers made one exception to the legislature's exclusive role in the impeachment process that promotes integrity in the proceedings. The Chief Justice of the United States presides at impeachment trials of the President of the United States. This provision ensures that a Vice President, in his usual capacity as Presiding Officer of the Senate, shall not preside over proceedings that could lead to his own elevation to the presidency, a particularly important concern at the time of the founding, when a President and Vice President could belong to rival parties. High Crimes and Misdemeanors The Framers narrowed the standard for impeachable conduct as compared to the English experience. While the English Parliament never formally defined the parameters of what counted as impeachable conduct, the Framers restricted impeachment to treason, bribery, and "other high Crimes and Misdemeanors," the latter phrase a standard inherited from English practice. This standard applied to behavior found damaging to the state, including significant abuses of a government office or power, misapplication of funds, neglect of duty, corruption, abridgement of parliamentary rights, and betrayals of the public trust. The debates at the Constitutional Convention over what behavior should be subject to impeachment focused mainly on the President. In discussing whether the President should be removable by impeachment, Gouverneur Morris argued that the President should be removable through the impeachment process, noting concern that the President might "be bribed by a greater interest to betray his trust," and pointed to the example of Charles II receiving a bribe from Louis XIV. The adoption of the high crimes and misdemeanors standard during the Constitutional Convention reveals that the Framers did not envision impeachment as the proper remedy for simple policy disagreements with the President. During the debate, the Framers rejected a proposal to includeâin addition to treason and briberyâ"maladministration" as an impeachable offense, which would have presumably incorporated a broad range of common-law offenses. Although "maladministration" was a ground for impeachment in many state constitutions at the time of the Constitution's drafting, the Framers instead adopted the term "high Crimes and Misdemeanors" from English practice. James Madison objected to including "maladministration" as grounds for impeachment because such a vague standard would "be equivalent to a tenure during pleasure of the Senate." The Convention voted to include "high crimes and misdemeanors" instead. Arguably, the Framers' rejection of such a broad term supports the view that congressional disagreement with a President's policy goals is not sufficient grounds for impeachment. Of particular importance to the understanding of high crimes and misdemeanors to the Framers was the roughly contemporaneous British impeachment proceedings of Warren Hastings, the governor general of India, which were transpiring at the time of the Constitution's formulation and ratification. Hastings was charged with high crimes and misdemeanors, which included corruption and abuse of power. At the Constitutional Convention, George Mason positively referenced the impeachment of Hastings. At that point in the Convention, a proposal to define impeachment as appropriate for treason and bribery was under consideration. George Mason objected, noting that treason would not cover the misconduct of Hastings. He also thought impeachment should extend to "attempts to subvert the Constitution." Mason thus proposed that maladministration be included as an impeachable offense, although, as noted above, this was eventually rejected in favor of "high Crimes and Misdemeanors." While evidence of precisely what conduct the Framers and ratifiers of the Constitution considered to constitute high crimes and misdemeanors is relatively sparse, the evidence available indicates that they considered impeachment to be an essential tool to hold government officers accountable for political crimes, or offenses against the state. James Madison considered it "indispensable that some provision be made for defending the community against incapacity, negligence, or perfidy of the chief executive," as the President might "pervert his administration into a scheme of peculation or oppression," or "betray his trust to foreign powers." Alexander Hamilton, in explaining the Constitution's impeachment provisions, described impeachable offenses as arising from "the misconduct of public men, or in other words, from the abuse or violation of some public trust." Such offenses were " Political , as they relate chiefly to injuries done immediately to the society itself." These political offenses could take innumerable forms and simply could not be neatly delineated. At the North Carolina ratifying convention, James Iredell, later to serve as an Associate Justice of the Supreme Court, noted the difficulty in defining what constitutes an impeachable offense, beyond causing injury to the government. For him, impeachment was "calculated to bring [offenders] to punishment for crime which is not easy to describe, but which every one must be convinced is a high crime and misdemeanor against government. . . . [T]he occasion for its exercise will arise from acts of great injury to the community." He thought the President would be impeachable for receiving a bribe or "act[ing] from some corrupt motive or other," but not merely for "want of judgment." Similarly, Samuel Johnston, then the governor of North Carolina and later the state's first Senator, thought impeachment was reserved for "great misdemeanors against the public." At the Virginia ratifying convention, a number of individuals claimed that impeachable offenses were not limited to indictable crimes. For example, James Madison argued that were the President to assemble a minority of states in order to ratify a treaty at the expense of the other states, this would constitute an impeachable "misdemeanor." And Virginia Governor Edmund Randolph, who would become the nation's first Attorney General, noted that impeachment was appropriate for a "willful mistake of the heart," but not for incorrect opinions. Randolph also argued that impeachment was appropriate for a President's violation of the Foreign Emoluments Clause, which, he noted, guards against corruption. James Wilson, delegate to the Constitutional Convention and later a Supreme Court Justice, delivered talks at the College of Philadelphia on impeachment following the adoption of the federal Constitution. He claimed that impeachment was reserved to "political crimes and misdemeanors, and to political punishments." He argued that, in the eyes of the Framers, impeachments did not come "within the sphere of ordinary jurisprudence. They are founded on different principles; are governed by different maxims; and are directed to different objects." Thus, for Wilson, the impeachment and removal of an individual did not preclude a later trial and punishment for a criminal offense based on the same behavior. Justice Joseph Story's writings on the Constitution echo the understanding that impeachment applied to political offenses. He noted that impeachment applied to those "offences â¦ committed by public men in violation of their public trust and duties," duties that are often "political." And like Hamilton, Story considered the range of impeachable offenses "so various in their character, and so indefinable in their actual involutions, that it is almost impossible to provide systematically for them by positive law." At the time of ratification of the Constitution, the phrase "high crimes and misdemeanors" thus appears understood to have applied to uniquely "political" offenses, or misdeeds committed by public officials against the state. Such offenses simply resist a full delineation, as the possible range of potential misdeeds in office cannot be determined in advance. Instead, the type of misconduct that merits impeachment is worked out over time through the political process. In the years following the Constitution's ratification, precisely what behavior constitutes a high crime or misdemeanor has thus been the subject of much debate. The Role of the House of Representatives The Constitution grants the sole power of impeachment to the House of Representatives. Generally speaking, the impeachment process has often been initiated in the House by a Member by resolution or declaration of a charge, although anyoneâincluding House Members, a grand jury, or a state legislatureâmay request that the House investigate an individual for impeachment purposes. Indeed, in modern practice, many impeachments have been sparked by referrals from an external investigatory body. Beginning in the 1980s, the Judicial Conference has referred its findings to the House recommending an impeachment investigation into a number of federal judges who were eventually impeached. Similarly, in the impeachment of President Bill Clinton, an independent counselâa temporary prosecutor given statutory independence and charged with investigating certain misconduct when approved by a judicial body âfirst conducted an investigation into a variety of alleged activities on the part of the President and his associates, and then delivered a report to the House detailing conduct that the independent counsel considered potentially impeachable. Regardless of the source requesting an impeachment investigation, the House has sole discretion under the Constitution to begin any impeachment proceedings against an individual. In practice, impeachment investigations are often handled by an already existing or specially created subcommittee of the House Judiciary Committee. The scope of the investigation can vary. In some instances, an entirely independent investigation may be initiated by the House. In other cases, an impeachment investigation might rely on records delivered by outside entities, such as those delivered by the Judicial Conference or an independent counsel. Following this investigation, the full House may vote on the relevant impeachment articles. If articles of impeachment are approved, the House chooses managers to present the matter to the Senate. The Chairman of the House Managers then presents the articles of impeachment to the Senate and requests that the body order the appearance of the accused. The House Managers typically act as prosecutors in the Senate trial. The House has impeached nineteen individuals: fifteen federal judges, one Senator, one Cabinet member, and two Presidents. The consensus reflected in these proceedings is that impeachment may serve as a means to address misconduct that does not necessarily give rise to criminal sanction. According to congressional sources, the types of conduct that constitute grounds for impeachment in the House appear to fall into three general categories: (1) improperly exceeding or abusing the powers of the office; (2) behavior incompatible with the function and purpose of the office; and (3) misusing the office for an improper purpose or for personal gain. Consistent with scholarship on the scope of impeachable offenses, congressional materials have cautioned that the grounds for impeachment "do not all fit neatly and logically into categories" because the remedy of impeachment is intended to "reach a broad variety of conduct by officers that is both serious and incompatible with the duties of the office." While successful impeachments and convictions of federal officials represent some clear guideposts for what constitutes impeachable conduct, impeachment processes that do not result in a final vote for impeachment and removal also may influence the understanding of Congress, executive and judicial branch officials, and the public over what constitutes an impeachable offense. A prominent example involves the first noteworthy attempt at a presidential impeachment, aimed at John Tyler in 1842. At the time, the presidential practice had generally been to reserve vetoes for constitutional, rather than policy, disagreements with Congress. Following President Tyler's veto of a tariff bill on policy grounds, the House endorsed a select committee report condemning President Tyler and suggesting that he might be an appropriate subject for impeachment proceedings. The possibility apparently ended when the Whigs, who had led the movement to impeach, lost their House majority in the midterm elections. In the years following the aborted effort to impeach President Tyler, Presidents have routinely used their veto power for policy reasons. This practice is generally seen as an important separation of powers limitation on Congress's ability to pass laws rather than a potential ground for impeachment. Likewise, although President Richard Nixon resigned before impeachment proceedings were completed in the House, the approval of three articles of impeachment by the House Judiciary Committee against him may inform lawmakers' understanding of conduct that constitutes an impeachable offense. The approved impeachment articles included allegations that President Nixon obstructed justice by using the office of the presidency to impede the investigation into the break-in of the Democratic National Committee headquarters at the Watergate Hotel and Office Building and authorized a cover-up of the activities that were being investigated. President Nixon was alleged to have abused the power of his office by using federal agencies to punish political enemies and refusing to cooperate with the Judiciary Committee's investigation. While no impeachment vote was taken by the House, the Nixon experience nevertheless established what some would call the quintessential case for impeachmentâa serious abuse of the office of the presidency that undermined the office's integrity. That said, one must be cautious in extrapolating wide-ranging lessons from the lack of impeachment proceedings in the House. Specific behavior not believed to constitute an impeachable offense in prior contexts might be considered impeachable in a different set of circumstances. Moreover, given the varied contextual permutations, the full scope of impeachable behavior resists specification, and historical precedent may not always serve as a useful guide to whether conduct is grounds for impeachment. For instance, no President has been impeached for abandoning the office and refusing to govern. That this event has not occurred, however, hardly proves that this behavior would not constitute an impeachable offense meriting removal from office. The Role of the Senate Historical Practice The Constitution grants the Senate sole authority "to try all impeachments." The Senate thus enjoys broad discretion in establishing procedures to be undertaken in an impeachment trial. For instance, in a lawsuit challenging the Senate's use of a trial committee to take and report evidence, the Supreme Court in Nixon v. United States unanimously ruled that the suit posed a nonjusticiable political question and was not subject to judicial resolution. The Court explained that the term "try" in the Constitution's provisions on impeachment was textually committed to the Senate for interpretation and lacked sufficient precision to enable a judicially manageable standard of review. In reaching this conclusion, the Court noted that the Constitution imposes three precise requirements for impeachment trials in the Senate: (1) Members must be under oath during the proceedings; (2) conviction requires a two-thirds vote; and (3) the Chief Justice must preside if the President is tried. Given these three clear requirements, the Court reasoned that the Framers "did not intend to impose additional limitations on the form of the Senate proceedings by the use of the word 'try.'" Thus, subject to these three clear requirements of the Constitution, the Senate enjoys substantial discretion in establishing its own procedures during impeachment trials. While the Senate determines for itself how to conduct impeachment proceedings, the nature and frequency of Senate impeachment trials largely hinge on the impeachment charges brought by the House. The House has impeached thirteen federal district judges, a judge on the Commerce Court, a Senator, a Supreme Court Justice, the secretary of an executive department, and two Presidents. But the Senate ultimately has only convicted and removed from office seven federal district judges and a Commerce Court judge. While this pattern obviously does not mean that Presidents or other civil officers are immune from removal based on impeachment, the Senate's acquittals may be considered to have precedential value when assessing whether particular conduct constitutes a removable offense. For instance, the first subject of an impeachment by the House involved a sitting U.S. Senator for allegedly conspiring to aid Great Britain's attempt to seize Spanish-controlled territory. The Senate voted to dismiss the charges in 1799, and no Member of Congress has been impeached since. The House also impeached Supreme Court Justice Samuel Chase, who was widely viewed by Jeffersonian Republicans as openly partisan for, among other things, misapplying the law. The Senate acquitted Justice Chase, establishing, at least for many, a general principle that impeachment is not an appropriate remedy for disagreement with a judge's judicial philosophy or decisions. Requirement of Oath or Affirmation The Constitution requires Senators sitting as an impeachment tribunal to take a special oath distinct from the oath of office that all Members of Congress must take. This requirement underscores the unique nature of the role the Senate plays in impeachment trials, at least in comparison to its normal deliberative functions. The Senate practice has been to require each Senator to swear or affirm that he will "do impartial justice according to the Constitution and laws." The oath was originally adopted by the Senate before proceedings in the impeachment of Senator Blount in 1798 and has remained largely unchanged since. Judgment in Cases of Impeachment While the Constitution authorizes the Senate, following an individual's conviction in an impeachment trial, to bar an individual from holding office in the future, the text of the Constitution does not make clear that a vote for disqualification from future office must be taken separately from the initial vote for conviction. Instead, the potential for a separate vote for disqualification has arisen through the historical practice of the Senate. The Senate did not choose to disqualify an impeached individual from holding future office until the Civil War era. Federal district judge West H. Humphreys took a position as a judge in the Confederate government but did not resign his seat in the U.S. government. The House impeached Humphreys in 1862. The Senate then voted unanimously to convict Judge Humphreys and separately voted to disqualify him from holding office in the future. Senate practice since the Humphreys case has been to require a simple majority vote to disqualify an individual from holding future office, rather than the supermajority required by the Constitution's text for removal, but it is unclear what justifies this result beyond historical practice. The Constitution also distinguishes the impeachment remedy from the criminal process, providing that an individual removed from office following impeachment "shall nevertheless be liable and subject to indictment." The Senate's power to convict and remove individuals from office, as well as to bar them from holding office in the future, thus does not overlap with criminal remedies for misconduct. Indeed, the unique nature of impeachment as a political remedy distinct from criminal proceedings ensures that "the most powerful magistrates should be amenable to the law." Rather than helping police violations of strictly criminal activity, impeachment is a "method of national inquest into the conduct of public men" for "the abuse or violation of some public trust." Impeachable offenses are those that "relate chiefly to injuries done immediately to the society itself." Put another way, the purpose of impeachment is to protect the public interest, rather than impose a punitive measure on an individual. This distinction was highlighted in the impeachment trial of federal district judge Alcee Hastings. Judge Hastings had been indicted for a criminal offense, but was acquitted. In 1988, the House impeached Hastings for much of the same conduct for which he had been indicted. Judge Hastings argued that the impeachment proceedings constituted "double jeopardy" because of his previous acquittal in a criminal proceeding. The Senate rejected his motion to dismiss the articles against him. The Senate voted to convict and remove Judge Hastings on eight articles, but it did not disqualify him from holding office in the future. Judge Hastings was later elected to the House of Representatives. History of Impeachment in Congress The Constitution provides that the President, Vice President, and all civil officers are subject to impeachment for "treason, bribery, or other high Crimes and Misdemeanors." The meaning of high crimes and misdemeanors, like the other provisions in the Constitution relevant to impeachment, is not primarily determined through the development of jurisprudence in the courts. Instead, the meaning of the Constitution's impeachment clauses is "liquidated" over time, or determined through historical practice. The Framers did not delineate with specificity the complete range of behavior that would merit impeachment, as the scope of possible "offenses committed by federal officers are myriad and unpredictable." According to one scholar, impeachments are sometimes "aimed at articulating, establishing, preserving, and protecting constitutional norms," or "'constructing' constitutional meaning and practices." At times, impeachment might be used to reinforce an existing norm, indicating that certain behavior continues to constitute grounds for removal; in others, it may be used to establish a new norm, setting a marker that signifies what practices are impeachable for the future. Examining the history of impeachment in Congress can thus illuminate the constitutional meaning of impeachment, including when Congress has established or reaffirmed a particular norm. Early Historical Practices (1789â1860) Congressional understanding of the scope of activities subject to impeachment and the potential persons who may be impeached was first put to the test during the Adams Administration. In 1797, letters sent to President Adams revealed a conspiracy by Senator William Blountâin violation of the U.S. government's policy of neutrality on the matter and the Neutrality Act âto organize a military expedition with the British to invade land in the American Southwest under Spanish control. The House voted to impeach Senator Blount on July 7, 1797, while the Senate voted to expel Senator William Blount the next day. Before impeaching Senator Blount, several House Members questioned whether Senators were "civil officers" subject to impeachment. But Samuel W. Dana of Connecticut argued that Members of Congress must be civil officers, because other provisions of the Constitution that mention offices appear to include holding legislative office. Despite already having voted to impeach Senator Blount, it was not until early in the next year that the House actually adopted specific articles of impeachment against him. At the Senate impeachment trial in 1799, Blount's attorneys argued that impeachment was improper because Blount had already been expelled from his Senate seat and had not been charged with a crime. But the primary issue of debate was whether Members of Congress qualified as civil officers subject to impeachment. The House prosecutors argued that under the American system, as in England, virtually anyone was subject to impeachment. The defense responded that this broad interpretation of the impeachment power would enable Congress to impeach state officials as well as federal, upending the proper division of federal and state authorities in the young Republic. The Senate voted to defeat a resolution that declared Blount was a "civil officer" and therefore subject to impeachment. The Senate ultimately voted to dismiss the impeachment articles brought against Blount because it lacked jurisdiction over the matter, although the impeachment record does not reveal the precise basis for this conclusion. In any event, the House has not impeached a Member of Congress since. The first federal official to be impeached and removed from office was John Pickering, a federal district judge. The election of President Thomas Jefferson in 1800, along with Jeffersonian Republican majorities in both Houses of Congress, signaled a shift from Federalist party control of government. Much of the federal judiciary at this early stage of the Republic were members of the Federalist party, and the new Jeffersonian Republican majority strongly opposed the Federalist-controlled courts. John Pickering was impeached by the House of Representatives in 1803 and convicted by the Senate on March 12, 1804. The circumstances of Judge Pickering's impeachment are somewhat unique as it appears that the judge had been mentally ill for some time, although the articles of impeachment did not address Pickering's mental faculties but instead accused him of drunkenness, blasphemy on the bench, and refusing to follow legal precedent. Judge Pickering did not appear at his trial, and Senator John Quincy Adams apparently served as a defense counsel. Following debate in a closed session, the Senate voted to permit evidence of Judge Pickering's insanity, drunkenness, and behavior on the bench. The Senate also rejected a resolution to disqualify three Senators, who were previously in the House and had voted to impeach Judge Pickering, from participating in the impeachment trial. The Senate voted to convict Judge Pickering guilty as charged, but the articles did not explicitly specify that any of Pickering's behavior constituted a high crime or misdemeanor. Objections to the framing of the question at issue caused several Senators to withdraw from the trial. On the same day the Senate convicted Judge Pickering, the House of Representatives impeached Supreme Court Justice Samuel Chase. Like the impeachment trial of Judge Pickering, the proceedings occurred following the election of President Thomas Jefferson and amid intense conflict between the Federalists and Jeffersonian Republicans. Justice Chase was viewed by Jeffersonian Republicans as openly partisan, and in fact the Justice openly campaigned for Federalist John Adams in the presidential election of 1800. Republicans also took issue with Justice Chase's aggressive approach to jury instructions in Sedition Act prosecutions. The eight articles of impeachment accused him of acting in an "arbitrary, oppressive, and unjust" manner at trial, misapplying the law, and expressing partisan political views to a grand jury. The Senate trial began on February 4, 1805. Both the House Managers and defense counsel for Justice Chase presented witnesses detailing the Justice's behavior. While some aspects of the dispute focused on whether Justice Chase took certain actions, the primary conflict centered on whether his behavior was impeachable. Before reaching a verdict, the Senate approved a motion from Senator James Bayard, a Federalist from Delaware, that the underlying question be whether Justice Chase was guilty of high crimes and misdemeanors, rather than guilty as charged. Of the eight articles, a majority of Senators voted to convict on three, while the remaining five did not muster a majority for conviction. But the Senate vote ultimately fell short of the necessary two-thirds majority to secure a conviction on any of the articles. The trial raised several questions that have recurred throughout the history of impeachments. For example, is impeachment limited to criminal acts, or does it extend to noncriminal behavior? The opposing sides in the Chase case took differing views on this matter, as they would in later impeachments to come. Due in part to the charged political atmosphere of the historical context, the attempted impeachment of Justice Chase has also come to represent an important limit on the scope of the impeachment remedy. Commentators have interpreted the acquittal of Justice Chase as establishing that impeachment does not extend to congressional disagreement with a judge's opinions or judicial philosophy. At least some Senators who voted to acquit did not consider the alleged offenses as rising to the level of impeachable behavior. By the time of the next impeachment in 1830, both houses of Congress were controlled by Jacksonian Democrats, and the federal courts were unpopular with Congress and the public. The House of Representatives impeached James Peck, a federal district judge, for abusing his judicial authority. The sole article accused the judge of holding an attorney in contempt for publishing an article critical of Peck and barring the attorney from practicing law for eighteen months. The context surrounding Judge Peck's actions involved disputes over French and Spanish land grant titles following the transfer of land in the Louisiana territory from French to U.S. control. Shortly after Missouri was admitted to the United States as part of the Missouri Compromise in 1821, Judge Peck decided a land rights case against the claimants in favor of the United States. The attorney for the plaintiffs wrote an article critical of the decision in a local paper. Judge Peck held the attorney in contempt, sentenced him to jail for twenty-four hours, and barred him from practicing law for eighteen months. The House impeached Judge Peck by a wide margin. Of central concern during the Senate trial were the limits of a judge's common law contempt power, a matter that appeared to be in dispute. The Senate ultimately acquitted Judge Peck, with roughly half of the Jacksonian Democrats voting against conviction. Shortly thereafter, Congress passed a law reforming and defining the scope of the judicial contempt power. Finally, in the midst of the Civil War, federal district judge West H. Humphreys was appointed to a position as a judge in the Confederate government, but he did not resign as a U.S. federal judge. In 1862, the House impeached and the Senate convicted Judge Humphreys for joining the Confederate government and abandoning his position. As in the trial of Judge Pickering previously, Judge Humphreys did not attend the proceedings. Unlike in the case of Judge Pickering, however, no defense was offered in the impeachment trial of Judge Humphreys. Impeachment of Andrew Johnson The impeachment and trial of President Andrew Johnson took place in the shadow of the Civil War and the assassination of President Abraham Lincoln. President Johnson was a Democrat and former slave owner who was the only southern Senator to remain in his seat when the South seceded from the Union. President Lincoln, a Republican, appointed Johnson military governor of Tennessee in 1862, and Johnson was later selected as Lincoln's second-term running mate on a "Union" ticket. Given these unique circumstances, President Johnson lacked both a party and geographic power base when in office, which likely isolated him when he assumed the presidency following the assassination of President Lincoln. The majority Republican Congress and President Johnson clashed over, among other things, Reconstruction policies implemented in the former slave states and control over officials in the executive branch. President Johnson vetoed twenty-one bills while in office, compared to thirty-six vetoes by all prior Presidents. Congress overrode fifteen of Johnson's vetoes, compared to just six with prior Presidents. On March 2, 1867, Congress reauthorized, over President Johnson's veto, the Tenure of Office Act, extending its protections for all officeholders. In essence, the Act provided that all federal officeholders subject to Senate confirmation could not be removed by the President except with Senate approval, although the reach of this requirement to officials appointed by a prior administration was unclear. Congressional Republicans apparently anticipated the possible impeachment of President Johnson when drafting the legislation; Republicans already knew of President Johnson's plans to fire Secretary of War Edwin Stanton, and the Act provided that a violation of its terms constituted a "high misdemeanor." President Johnson then fired Secretary Stanton without the approval of the Senate. Importantly, his Cabinet unanimously agreed that the new restrictions on the President's removal power imposed by the Tenure of Office Act were unconstitutional. Shortly thereafter, on February 24, 1868, the House voted to impeach President Johnson. The impeachment articles adopted by the House against President Johnson included defying the Tenure of Office Act by removing Stanton from office and violating (and encouraging others to violate) the Army Appropriations Act. One article of impeachment also accused the President of making "utterances, declarations, threats, and harangues" against Congress. The Senate appointed a committee to recommend rules of procedure for the impeachment trial which then were adopted by the Senate, including a one-hour time limit for each side to debate questions of law that would arise during the trial. Chief Justice Salmon P. Chase presided over the trial and was sworn in by Associate Justice Samuel Nelson. During the swearing-in of the individual Senators, the body paused to debate whether Senator Benjamin Wade of Indiana, the president pro tempore of the Senate, was eligible to participate in the trial. Because the office of the Vice President was empty, under the laws of succession at that time Senator Wade would assume the presidency upon a conviction of President Johnson. Ultimately, the Senator who raised this point, Thomas Hendricks of Indiana, withdrew the issue and Senator Wade was sworn in. An important point of contention at the trial was whether the Tenure of Office Act protected Stanton at all because of his appointment by President Lincoln, rather than President Johnson. Counsel for President Johnson argued that impeachment for violating a statute whose meaning was unclear was inappropriate, and the statute barring removal of the Secretary of War was an unconstitutional intrusion into the President's authority under Article II. The Senate failed to convict President Johnson with a two-thirds majority by one vote on three articles, and it failed to vote on the remaining eight. But reports suggest that several Senators were prepared to acquit if their votes were needed. Seven Republicans voted to acquit; of those Senators, some thought it questionable whether the Tenure of Office Act applied to Stanton and believe it was improper to impeach a President for incorrectly interpreting an arguably ambiguous law. The implications of the acquittal of President Johnson are difficult to encapsulate neatly. Some commentators have concluded that the failure to convict President Johnson coincides with a general understanding that while impeachment is appropriate for abuses of power or violations of the public trust, it does not pertain to political or policy disagreements with the President, no matter how weighty. Of course, it bears mention that by the time of the Senate trial Johnson was in the last year of his Presidency, was not going to receive a nomination for President by either major political party for the next term, and appears to have promised in private to appoint a replacement for Stanton that could be confirmable. More broadly, the Johnson impeachment also represented a larger struggle between Congress and the President over the scope of executive power, one that arguably reconstituted their respective roles following the Civil War presidency of Abraham Lincoln. Postbellum Practices (1865â1900) The postbellum experience in American history saw a variety of government officials impeached on several different grounds. These examples provide important principles that guide the practice of impeachment through the present day. For example, the Senate has not always conducted a trial following an impeachment by the House. In 1873, the House impeached federal district judge Mark. H. Delahay for, among other things, drunkenness on and off the bench. The impeachment followed an investigation by a subcommittee of the House Judiciary Committee into his conduct. Following the House vote on impeachment, Judge Delahay resigned before written impeachment articles were drawn up, and the Senate did not hold a trial. The impeachment of Judge Delahay shows that the scope of impeachable behavior is not limited to strictly criminal behavior; Congress has been willing to impeach individuals for behavior that is not indictable, but still constitutes an abuse of an individual's power and duties. This period of American history was fraught with partisan conflict over Reconstruction. Besides President Johnson, a number of other individuals were investigated by Congress during this time for purposes of impeachment. For example, in 1873, the House voted to authorize the House Judiciary Committee to investigate the behavior of Edward H. Durrell, federal district judge for Louisiana. A majority of the House Judiciary Committee reported in favor of impeaching Judge Durell for corruption and usurpation of power, including interfering with the state's election. Judge Durrell resigned on December 1, 1874, and the House discontinued impeachment proceedings. The first and only time a Cabinet-level official was impeached occurred during the presidential administration of Ulysses S. Grant. Grant's Secretary of War, William W. Belknap, was impeached in 1876 for allegedly receiving payments in return for appointing an individual to maintain a trading post in Indian territory. Belknap resigned two hours before the House unanimously impeached him, but the Senate still conducted a trial in which Belknap was acquitted. During the trial, upon objection by Belknap's counsel that the Senate lacked jurisdiction because Belknap was now a private citizen, the Senate voted 37-29 in favor of jurisdiction. A majority of Senators voted to convict Belknap, but no article mustered a two-thirds majority, resulting in acquittal. A number of Senators voting to acquit indicated that they did so because the Senate lacked jurisdiction over an individual no longer in office. Notably, although bribery is explicitly included as an impeachable offense in the Constitution, the impeachment articles brought against Belknap instead charged his behavior as constituting high crimes and misdemeanors. Bribery was mentioned at the Senate trial, but it was not specifically referenced in the impeachment articles themselves. Early Twentieth Century Practices The twentieth century saw further development of the scope of conduct considered by Congress to be impeachable, including the extent to which noncriminal conduct can constitute impeachable behavior and the proper role of a federal judge. The question of judicial review of impeachments also received its first treatment in the federal courts. The question of whether Congress can designate particular behavior as a "high crime or misdemeanor" by statute arose in the impeachment of Charles Swayne, a federal district judge for the Northern District of Florida, during the first decade of the twentieth century. A federal statute provided that federal district judges live in their districts and that anyone violating this requirement was "guilty of a high misdemeanor." Judge Swayne's impeachment originated from a resolution passed by the Florida legislature requesting the state's congressional delegation to recommend an investigation into his behavior. The procedures followed by the House in impeaching Judge Swayne were somewhat unique. First, the House referred the impeachment request to the Judiciary Committee for investigation. Following this investigation, the House voted to impeach Judge Swayne based on the report prepared by the committee. The committee was then tasked with preparing articles of impeachment to present to the Senate. The House then voted again on these individual articles, each of which received less support than the single prior impeachment vote had received. The impeachment articles accused Judge Swayne of a variety of offenses, including misusing the office, abusing the contempt power, and living outside his judicial district. At the trial in the Senate, Judge Swayne essentially admitted to certain accused behavior, although his attorneys did dispute the residency charge, and Swayne instead argued that his actions were not impeachable. The Senate vote failed to convict Judge Swayne on any of the charges brought by the House. The impeachability of certain noncriminal behavior for federal judges was firmly established by the impeachment of Judge Robert W. Archbald in 1912. Judge Archbald served as a federal district judge before being appointed to the short-lived U.S. Commerce Court, which was created to review decisions of the Interstate Commerce Commission. He was impeached by the House for behavior occurring both as a federal district judge and as a judge on the Commerce Court. The impeachment articles accused Judge Archbald of, among other things, using his position as a judge to generate profitable business deals with potential future litigants in his court. This behavior did not violate any criminal statute and did not appear to violate any laws regulating judges. Judge Archbald argued at trial that noncriminal conduct was not impeachable. The Senate voted to convict him on five articles and also voted to disqualify him from holding office in the future. Four of those articles centered on behavior that occurred while Judge Archbald sat on the Commerce Court, whereas the fifth described his conduct over the course of his career. In the 1920s, a series of corruption scandals swirled around the administration of President Warren G. Harding. Most prominently, the Teapot Dome Scandal, which involved the noncompetitive lease of government land to oil companies, implicated many government officials and led to resignations and the criminal conviction and incarceration of a Cabinet-level official. The Secretary of the Navy, at the time Edwin Denby, was entrusted with overseeing the development of oil reserves that had recently been located. The Secretary of the Interior, Albert Fall, convinced Denby that the Interior Department should assume responsibility for two of the reserve locations, including in Teapot Dome, Wyoming. Secretary Fall then leased the reserves to two of his friends, Harry F. Sinclair and Edward L. Doheny. Revelations of the lease without competitive bidding launched a lengthy congressional investigation that sparked the eventual criminal conviction of Fall for bribery and conspiracy and Sinclair for jury tampering. President Harding, however, died in 1923, before congressional hearings began. The affair also generated significant judicial decisions examining the scope of Congress's investigatory powers. One aspect of the controversy included an impeachment investigation into the decisions of then-Attorney General Harry M. Daugherty. In 1922, the House of Representatives referred a resolution to impeach Daugherty for a variety of activities, including his failure to prosecute those involved in the Teapot Dome Scandal, to the House Judiciary Committee. The House Judiciary Committee eventually found there was not sufficient evidence to impeach Daugherty. But in 1924, a Senate special committee was formed to investigate similar matters. That investigation spawned allegations of many improper activities in the Justice Department. Daugherty resigned on March 28, 1924. In 1926, federal district judge George W. English was impeached for a variety of alleged offenses, including (1) directing a U.S. marshal to gather a number of state and local officials into court in an imaginary case in which Judge English proceeded to denounce them; (2) threatening two members of the press with imprisonment without sufficient cause; and (3) showing favoritism to certain litigants before his court. Judge English resigned before a trial in the Senate occurred; and the Senate dismissed the charges without conducting a trial in his absence. Federal district judge Harold Louderback was impeached in 1933 for showing favoritism in the appointment of bankruptcy receivers, which were coveted positions following the stock market crash of 1929 and the ensuing Depression. The House authorized a subcommittee to investigate, which held hearings and recommended to the Judiciary Committee that Judge Louderback be impeached. The Judiciary Committee actually voted against recommending impeachment, urging censure of Judge Louderback instead, but permitted the minority report that favored impeachment to be reported to the House together with the majority report. The full House voted to impeach anyway, but the Senate failed to convict him. Shortly thereafter, the House impeached federal district judge Halsted L. Ritter for showing favoritism in and profiting from appointing receivers in bankruptcy proceedings; practicing law while a judge; and failing to fully report his income on his tax returns. The Senate acquitted Judge Ritter on each individual count alleging specific behavior, but convicted him on the final count which referenced the previous articles, and charged him with bringing his court into disrepute and undermining the public's confidence in the judiciary. Congress's impeachment of Judge Ritter was the first to be challenged in court. Judge Ritter sued in the Federal Court of Claims seeking back pay, arguing that the charges brought against him were not impeachable under the Constitution and that the Senate improperly voted to acquit on six specific articles but to convict on a single omnibus article. In rejecting Judge Ritter's suit, the court held that the Senate has exclusive jurisdiction over impeachments and courts lack authority to review the Senate's verdict. Effort to Impeach President Richard Nixon The impeachment investigation and ensuing resignation of President Richard Nixon stands out as a profoundly important experience informing the standard for the impeachment of Presidents. Although President Nixon was never impeached by the House or subjected to a trial in the Senate, his conduct exemplifies for many authorities, scholars, and members of the public the quintessential case of impeachable behavior in a President. Less than two years after a landslide reelection as President, Richard Nixon resigned following the House Judiciary Committee's adoption of three articles of impeachment against him. The circumstances surrounding the impeachment of President Nixon were sparked by the arrest of five men for breaking into the Democratic National Committee Headquarters at the Watergate Hotel and Office Building. The arrested men were employed by the committee to Re-Elect the President (CRP), a campaign organization formed to support President Nixon's reelection. In the early summer of 1973, Attorney General Elliot Richardson appointed Archibald Cox as a special prosecutor to investigate the connection between the five burglars and CRP. Likewise, the Senate Select Committee on Presidential Campaign Activities began its own investigation. After President Nixon fired various staffers allegedly involved in covering up the incident, he spoke on national television disclaiming knowledge of the cover-up. But the investigations uncovered evidence that President Nixon was involved, that he illegally harassed his enemies through, among other things, the use of tax audits, and that the men arrested for the Watergate break-inâthe "plumbers unit," because they were used to "plug leaks" considered damaging to the Nixon Administrationâhad committed burglaries before. Eventually a White House aide revealed that the President had a tape recording system in his office, raising the possibility that many of Nixon's conversations about the Watergate incident were recorded. The President refused to hand over such tapes to the special prosecutor or Congress. In his capacity as special prosecutor, Cox then subpoenaed tapes of conversations in the Oval Office on Saturday, October 20, 1973. This sparked the sequence of events commonly known as the Saturday Night Massacre. In response to the subpoena, President Nixon ordered Attorney General Elliot Richardson to fire Special Prosecutor Cox. Richardson refused and resigned. Nixon ordered Deputy Attorney General William D. Ruckelshaus to fire the special prosecutor, but Ruckelshaus also refused to do so and resigned. Solicitor General Robert Bork, in his capacity as Acting Attorney General, then fired the special prosecutor. Nixon eventually agreed to deliver some of the subpoenaed tapes to the judge supervising the grand jury. The Justice Department appointed Leon Jaworski to replace Cox as special prosecutor. The House Judiciary Committee began an official investigation of the Watergate issue and commenced impeachment hearings in April 1974. On March 1, 1974, a grand jury indicted seven individuals connected to the larger Watergate investigation and named the President as an unindicted coconspirator. On April 18, a subpoena was issued, upon the motion of the special prosecutor, by the United States District Court for the District of Columbia requiring the production of tapes and various items relating to meetings between the President and other individuals. Following a challenge to the subpoena in district court, the Supreme Court reviewed the case. On July 24, 1974, the Supreme Court affirmed the district court's order. In late July, following its investigation and hearings, the House Judiciary Committee voted to adopt three articles of impeachment against President Nixon. The first impeachment article alleged that the President obstructed justice by attempting to impede the investigation into the Watergate break-in. The second charged the President with abuse of power for using federal agencies to harass his political enemies and authorizing burglaries of private citizens who opposed the President. The third article accused the President of refusing to cooperate with the Judiciary Committee's investigation. The committee considered but rejected two proposed articles of impeachment. The first rejected article accused the President of concealing from Congress the bombing operations in Cambodia during the Vietnam conflict. This article was rejected for two primary reasons: some Members thought (1) the President was performing his constitutional duty as Commander-in-Chief and (2) Congress was given sufficient notice of these operations. The second rejected article concerned receiving compensation in the form of government expenditures at President Nixon's private properties in California and Floridaâwhich allegedly constituted an emolument from the United States in violation of Article II, Section 1, Clause 7 of the Constitutionâand tax evasion. Those Members opposed to the portion of the charge alleging receipt of federal funds argued that most of the President's expenditures were made pursuant to a request from the Secret Service; that there was no direct evidence the President knew at the time that the source of these funds was public, rather than private; and that this conduct failed to rise to the level of an impeachable offense. Some Members opposed to the tax evasion charge argued that the evidence was insufficient to impeach; others that tax fraud is not the type of behavior "at which the remedy of impeachment is directed." President Nixon resigned on August 9, 1974, before the full House voted on the articles. The lessons and standards established by the Nixon impeachment investigation and resignation are disputed. On the one hand, the behavior alleged in the approved articles against President Nixon is arguably a "paradigmatic" case of impeachment, constituting actions that are almost certainly impeachable conduct for the President. On the other hand, the significance of the House Judiciary Committee's rejection of certain impeachment articles is unclear. In particular, whether conduct considered unrelated to the performance of official duties, such as the rejected article alleging tax evasion, can constitute an impeachable offense for the President is disputed. During the later impeachment of President Bill Clinton, for example, the majority and minority reports of the House Judiciary Committee on the committee's impeachment recommendation took different views on when conduct that might traditionally be viewed as private or unrelated to the functions of the presidency constitutes an impeachable offense. The House Judiciary Committee report that recommended articles of impeachment argued that perjury by the President was an impeachable offense, even if committed with regard to matters outside his official duties. In contrast, the minority views in the report argued that impeachment was reserved for "conduct that constitutes an egregious abuse or subversion of the powers of the executive office." The minority noted that the Judiciary Committee had rejected an article of impeachment against President Nixon alleging that he committed tax fraud, mainly because that "related to the President's private conduct, not to an abuse of his authority as President." Impeachment of President Bill Clinton The impeachment of President Bill Clinton stemmed from an investigation that originally centered on financial transactions occurring years before President Clinton took federal office. Attorney General Janet Reno appointed Robert Fiske Jr. as a special prosecutor in January 1994 to investigate the dealings of President Clinton and his wife with the "Whitewater" real estate development during the President's tenure as attorney general and then governor of Arkansas. Following the reauthorization of the Independent Counsel Act in June, the Special Division of the United States Court of Appeals for the District of Columbia Circuit replaced Fiske in August with Independent Counsel Kenneth W. Starr, a former Solicitor General in the George H.W. Bush Administration and federal appellate judge. During the Whitewater investigation, Paula Jones, an Arkansas state employee, filed a civil suit against President Clinton in May 1994 alleging that he sexually harassed her in 1991 while governor of Arkansas. Lawyers for Jones deposed President Clinton at the White House and asked questions about the President's relationship with staffers, including an intern named Monica Lewinsky. Independent Counsel Starr received information alleging that Lewinsky had tried to influence the testimony of a witness in the Jones litigation, along with tapes of recordings between Monica Lewinsky and former White House employee Linda Tripp. Tripp had recorded conversations between herself and Lewinsky about Lewinsky's relationship with the President and hope of obtaining a job outside the White House. Starr presented this information to Attorney General Reno. Reno petitioned the Special Division of the United States Court of Appeals for the District of Columbia Circuit to expand the independent counsel's jurisdiction, and the Special Division issued an order on January 16, 1998, permitting the expansion of Starr's investigation into President Clinton's response to the Paula Jones case. Over the course of the spring and summer a grand jury investigated whether President Clinton committed perjury in his response to the Jones suit and whether he obstructed justice by encouraging others to lie about his relationship with Lewinsky. President Clinton appeared by video before the grand jury and testified about the Lewinsky relationship. Independent Counsel Starr referred his report to the House of Representatives on September 9, 1998, noting that under the independent counsel statute, his office was required to do so because President Clinton engaged in behavior that might constitute grounds for impeachment. The House then voted to open an impeachment investigation into President Clinton's behavior, released the Starr report publicly, and the House Judiciary Committee voted to release the tape of the President's grand jury testimony. Although the House Judiciary Committee had already conducted several hearings on the possibility of impeachment, the committee did not engage in an independent fact-finding investigation or call any live witnesses to testify about the President's conduct. Instead, the Judiciary Committee largely relied on the Starr report to inform the committee's own report recommending impeachment, released December 16, 1998. The committee report recommended impeachment of President Clinton on four counts. The first article alleged that President Clinton perjured himself when testifying to a criminal grand jury about his response to the Jones lawsuit and his relationship with Lewinsky. The second alleged that the President committed perjury during a deposition in the civil suit brought against him by Paula Jones. The third alleged that President Clinton obstructed justice in the suit brought against him by Jones and in the investigation by Independent Counsel Starr. The fourth alleged that the President abused his office by refusing to respond to certain requests for admission from Congress and making untruthful responses to Congress during the investigation into his behavior. On December 19, 1998, in a lame-duck session, the House voted to approve the first and third articles. After trial in the Senate, the President was acquitted on February 12, 1999. Statements of the Senators entered into the record on the impeachment reflect disagreement about what constitutes an impeachable offense for the President and whether Clinton's behavior rose to this level. For instance, Republican Senator Richard G. Lugar voted to convict on both articles, noting in his statement the gravity of the "presidential misconduct at issue" and arguing that the case was "not about adultery." Instead, it centered on the obstruction of justice that occurred when the President "lied to a federal grand jury and worked to induce others to give false testimony." For Senator Lugar, the President ultimately "betrayed [the] trust" of the nation through his actions and should be removed from office. In contrast, Republican Senator Olympia Snowe voted to acquit on both articles. In her statement, she admonished the President's "lowly conduct," but concluded there was "insufficient evidence of the requisite untruth and the requisite intent" to establish perjury with regard to the concealment of his relationship with a subordinate; and the perjury charges regarding his relationship with a subordinate concerned statements that were largely "ruled irrelevant and inadmissible in the underlying civil case" which "undermine[d] [their] materiality." She also stated that she thought one of the allegations in the second impeachment article had been provenâthe President's attempt to influence the testimony of his personal assistantâbut that the proper remedy for this was a criminal prosecution. Indeed, a number of Senators indicated that they did not consider the President's behavior to constitute an impeachable offense because the President's conduct was not of a distinctly public nature. For instance, Democratic Senator Byron L. Dorgan voted to acquit on both articles. He described Clinton's behavior as "reprehensible," but concluded that it did not constitute "a grave danger to the nation." The significance of the Clinton impeachment experience to informing the understanding of what constitutes an impeachable offense is thus open to debate. One might point to the impeachment articles recommended by the House Judiciary Committee, but not adopted by the full House, as concerning conduct insufficient to establish an impeachable offense. Specifically, the House declined to impeach President Clinton for his alleged perjury in a civil suit against him as well as for alleged untruthful statements made in response to congressional requests. Likewise, some scholars have pointed to the acquittal in the Senate of both impeachment articles brought by the House as evidence that the Clinton impeachment articles lacked merit or were adopted on purely partisan grounds. The statements of some Senators mentioned above, reasoning that Clinton's conduct did not qualify as an impeachable offense, may support arguments that impeachment is not an appropriate tool to address at least some sphere of conduct by a President not directly tied to his official duties. Even so, the failure to convict President Clinton might instead simply reflect the failure of the House Managers to prove their case, or simply bare political calculation by some Senators. Ultimately, the lessons of the Clinton impeachment experience will be revealed in the future practice of Congress when assessing whether similar conduct is impeachable if committed by future Presidents. Contemporary Judicial Impeachments Congress has impeached federal judges with comparatively greater frequency in recent decades, and some of these impeachments appear to augur important consequences for the practice in the future. In particular, within three years in the 1980s the House voted to impeach three federal judges, each occurring after a criminal prosecution of the judge. One impeached federal judge was not barred from future office and later was elected to serve in the House of Representatives, the body that had earlier impeached him. Another judge challenged the adequacy of his impeachment trial in a case that ultimately reached the Supreme Court, which ruled that the case was nonjusticiable. The House of Representatives impeached federal district judge Harry E. Claiborne in 1986, following his criminal conviction and imprisonment for providing false statements on his tax returns. Despite his incarceration, Judge Claiborne did not resign his seat and continued to collect his judicial salary. The House unanimously voted in favor of four articles of impeachment against him. The first two articles against Judge Claiborne simply laid out the underlying behavior that had led to his criminal prosecution. The third article "rest[ed] entirely on the conviction itself" and stood for the principle that "by conviction alone he is guilty of . . . 'high crimes' in office." The fourth alleged that Judge Claiborne's actions brought the "judiciary into disrepute, thereby undermining public confidence in the integrity and impartiality of the administration of justice" which amounted to a "misdemeanor." The Senate impeachment trial of Judge Claiborne was the first in which that body used a committee to take evidence. Rather than conducting a full trial with the entire Senate, the committee took testimony, received evidence, and voted on pretrial motions regarding evidence and discovery. The committee then reported a transcript of the proceedings to the full Senate, without recommending whether impeachment was warranted. The Senate voted to convict Judge Claiborne on the first, second, and fourth articles. In 1988, the House impeached a federal district judge who had been indicted for a criminal offense but was acquitted. Judge Alcee L. Hastings was acquitted in a criminal trial where he was accused of conspiracy and obstruction of justice for soliciting a bribe in return for reducing the sentences of two felons. After his acquittal, a judicial committee investigated the case and concluded that Judge Hastings's behavior might merit impeachment. The Judicial Conference (a national entity composed of federal judges that reviews investigations of judges and may refer recommendations to Congress) eventually referred the matter to the House of Representatives, noting that impeachment might be warranted. The House of Representatives approved seventeen impeachment articles against Judge Hastings, including for perjury, bribery, and conspiracy. Judge Hastings objected to the impeachment proceedings as "double jeopardy" because he had already been acquitted in a previous criminal proceeding. The Senate, however, rejected his motion to dismiss the articles against him. The Senate again used a trial committee to receive evidence. That body voted to convict and remove Judge Hastings on eight articles, but did not vote to disqualify him from holding future office. Judge Hastings was later elected to the House of Representatives. Before the trial of Judge Hastings even began in the Senate, the House impeached Judge Walter L. Nixon. Judge Nixon was convicted in a criminal trial of perjury to a grand jury and imprisoned. Following an investigation by the House Judiciary Committee's Subcommittee on Civil and Constitutional Rights, the Judiciary Committee reported a resolution to the full House recommending impeachment on three articles. The full House approved three articles of impeachment, the first two involving lying to a grand jury and the last for undermining the integrity of and bringing disrepute on the federal judicial system. The Senate convicted Judge Nixon on the first two articles but acquitted him on the third. Judge Nixon challenged the Senate's use of a committee to receive evidence and conduct hearings. He sued in federal court arguing that the use of a committee, rather than the full Senate, to take evidence violated the Constitution's provision that the Senate "try" all impeachments. The Supreme Court ultimately rejected his challenge in Nixon v. United States , ruling that the issue was a nonjusticiable political question because the Constitution grants the power to try impeachments "in the Senate and nowhere else"; and the word "try" "lacks sufficient precision to afford any judicially manageable standard of review of the Senate's actions. " As a result of this decision, impeachment proceedings appear largely immune from judicial review. Two judges have been impeached in the twenty-first century. As with the three impeachments of judges in the 1980s, the first followed a criminal indictment. District Judge Samuel B. Kent pleaded guilty to obstruction of justice for lying to a judicial investigation into alleged sexual misconduct and was sentenced to thirty-three months in prison. The House impeached Judge Kent for sexually assaulting two court employees, obstructing the judicial investigation of his behavior, and making false and misleading statements to agents of the Federal Bureau of Investigation about the activity. Judge Kent resigned his office before a Senate trial. The Senate declined to conduct a trial following his resignation. Although the four previous impeachments of federal judges followed criminal proceedings, the most recent impeachment did not. In 2010, Judge G. Thomas Porteous Jr. was impeached for participating in a corrupt financial relationship with attorneys in a case before him, and engaging in a corrupt relationship with bail bondsmen whereby he received things of value in return for helping the bondsman develop corrupt relationships with state court judges. Judge Porteous was the first individual impeached by the House and convicted by the Senate based in part on conduct occurring before he began his tenure in federal office. The first and second articles of impeachment each alleged misconduct by Judge Porteous during both his state and federal judgeships. The fourth alleged that Judge Porteous made false statements to the Senate and FBI in connection with his nomination and confirmation to the U.S. District Court for the Eastern District of Louisiana. Judge Porteous's filings in answer to the articles of impeachment argued that conduct occurring before he was appointed to the federal bench cannot constitute impeachable behavior. The House Managers' replication, or reply to this argument, argued that Porteous's contention had no basis in the Constitution. On December 8, 2010, he was convicted on all four articles, removed from office, and disqualified from holding future federal offices. The first article, which included conduct occurring before he was a federal judge, was affirmed 96-0. The second article, approved 90-6, alleged that he lied to the Senate in his confirmation hearing to be a federal judge. A number of Senators explicitly adopted the reasoning supplied by expert witness testimony before the House that the crucial issue over the appropriateness of impeachment was not the timing of the misconduct, but "whether Judge Porteous committed such misconduct and whether such misconduct demonstrates the lack of integrity and judgment that are required in order for him to continue to function" in office. Senator Claire McCaskill explained in her statement entered in the Congressional Record that Judge Porteous's argument for an "absolute, categorical rule that would preclude impeachment and removal for any pre-federal conduct" should be rejected. "That should not be the rule," she noted, "any more than allowing impeachment for any pre-federal conduct that is entirely unrelated to the federal office." Senator Patrick Leahy agreed, noting that he "reject[ed] any notion of impeachment immunity [for pre-federal behavior] if misconduct was hidden, or otherwise went undiscovered during the confirmation process, and it is relevant to a judge's ability to serve as an impartial arbiter." Recurring Questions About Impeachment Who Counts as an Impeachable Officer? The Constitution explicitly makes "[t]he President, Vice President and all civil Officers of the United States" subject to impeachment and removal. Which officials are considered "civil Officers of the United States" for purposes of impeachment is a significant constitutional question that remains partly unresolved. Based on both the constitutional text and historical precedent, federal judges and Cabinet-level officials are "civil Officers" subject to impeachment, while military officers, state and local officials, purely private individuals, and Members of Congress likely are not. A question that neither the Constitution nor historical practice has answered is whether Congress may impeach and remove lower-level, non-Cabinet executive branch officials. The Constitution does not define "civil Officers of the United States." Nor do the debates at the Constitutional Convention provide significant evidence of which individuals (beyond the President and Vice President) the Framers intended to be impeachable. Impeachment precedents in both the House and Senate are of equally limited utility with respect to subordinate executive officials (i.e., executive branch officials other than the President and Vice President). In all of American history, only one such official has been impeached: Secretary of War William Belknap. Thus, while it seems that executive officials of the highest levels have been viewed as "civil Officers," historical precedent provides no examples of the impeachment power being used against lower-level executive officials. One must therefore look to other sources for aid in determining precisely how far down the federal bureaucracy the impeachment power might reach. The general purposes of impeachment may assist in interpreting the proper scope of "civil Officers of the United States." The congressional power of impeachment constitutes an important aspect of the various checks and balances built into the Constitution to preserve the separation of powers. It is a tool, entrusted to the House and Senate alone, to remove government officials in the other branches of government, who either abuse their power or engage in conduct that warrants their dismissal from an office of public trust. At least one commentator has suggested that the Framers recognized, particularly for executive branch officials, that there would be times when it may not be in the President's interest to remove a "favorite" from office, even when that individual has violated the public trust. As such, the Framers "dwelt repeatedly on the need of power to oust corrupt or oppressive ministers whom the President might seek to shelter." If the impeachment power were meant to ensure that Congress has the ability to impeach and remove corrupt officials that the President was unwilling to dismiss, it would seem arguable that the power should extend to officers exercising a degree of authority, the abuse of which would harm the separation of powers and good government. The writings of early constitutional commentators also arguably suggest a broad interpretation of "civil Officers of the United States." Joseph Story addressed the reach of the impeachment power in his influential Commentaries on the Constitution , asserting that " all officers of the United states [] who hold their appointments under the national government, whether their duties are executive or judicial, in the highest or in the lowest departments of the government , with the exception of officers in the army and navy, are properly civil officers within the meaning of the constitution, and liable to impeachment." Similarly, William Rawle reasoned that "civil Officers" included "[ a ] ll executive and judicial officers, from the President downwards , from the judges of the Supreme Court to those of the most inferior tribunals. . . ." Consistent with the text of the Constitution, these early interpretations suggest the impeachment power was arguably intended to extend to "all" executive officers, and not just Cabinet-level officials and other executive officials at the highest levels. The meaning of "officer of the United States" under the impeachment provisions may be informed by other provisions of the Constitution that use the same phrase. Applying this contextual approach, the most thorough, and perhaps most helpful, judicial elucidation of the definition of "Officers of the United States" comes in the Constitution's Appointments Clause. Indeed, that provision, which establishes the methods by which "Officers of the United States" may be appointed, has generally been viewed as a useful guidepost in establishing the definition of "civil Officers" for purposes of impeachment. The Appointments Clause provides that the President shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments. In interpreting the Appointments Clause, the Court has distinguished "Officers of the United States," whose appointment is subject to the requirements of the Clause, and non-officers, also known as employees, whose appointment is not. The amount of authority that an individual exercises will generally determine his classification as either an officer or employee. As established in Buckley v. Valeo , an officer is "any appointee exercising significant authority pursuant to the laws of the United States," while employees are viewed as "lesser functionaries subordinate to the officers of the United States," who do not exercise "significant authority." The Supreme Court has further subdivided "officers" into two categories: principal officers, who may be appointed only by the President with the advice and consent of the Senate; and inferior officers, whose appointment Congress may vest "in the President alone, in the Courts of Law, or in the Heads of Departments." The Court has acknowledged that its "cases have not set forth an exclusive criterion for distinguishing between principal and inferior officers for Appointments Clause purposes." The clearest statement of the proper standard to be applied in differentiating between the two types of officers appears to have been made in Edmond v. United States when the Court noted that "[g]enerally speaking, the term 'inferior officer' connotes a relationship with some higher ranking officer or officers below the President . . . [and] whose work is directed and supervised at some level by others who were appointed by presidential nomination with the advice and consent of the Senate. " Thus, in analyzing whether one may be properly characterized as either an inferior or a principal officer, the Court's decisions appear to focus on the extent of the officer's discretion to make autonomous policy choices and the authority of other officials to supervise and to remove the officer. Using the principles established in the Court's Appointments Clause jurisprudence to interpret the scope of "civil Officers" for purposes of impeachment, it would appear that employees, as non-officers, would not be subject to impeachment. Thus, lesser functionariesâsuch as federal employees who belong to the civil service, do not exercise "significant authority," and are not appointed by the President or an agency headâwould not be subject to impeachment. At the opposite end of the spectrum, it would seem that any official who qualifies as a principal officer, including a head of an agency such as a Secretary, Administrator, or Commissioner, would be impeachable. The remaining question is whether inferior officers, or those officers who exercise significant authority under the supervision of a principal officer, are subject to impeachment and removal. As noted above, an argument can be made from the text and purpose of the impeachment clauses, as well as early constitutional interpretations, that the impeachment power was intended to extend to " all " officers of the United States, and not just those in the highest levels of government. Any official exercising "significant authority," including both principal and inferior officers, would therefore qualify as a "civil Officer" subject to impeachment. This view would permit Congress to impeach and remove any executive branch "officer," including many deputy political appointees and certain administrative judges. There is some historical evidence, however, to suggest that inferior officers were not meant to be subject to impeachment. For example, a delegate at the North Carolina ratifying convention asserted that "[i]t appears to me . . . the most horrid ignorance to suppose that every officer, however trifling his office, is to be impeached for every petty offense . . . I hope every gentleman . . . must see plainly that impeachments cannot extend to inferior officers of the United States." Additionally, Governeur Morris, member of the Pennsylvania delegation to the Constitutional Convention, arguably implied that inferior officers would not be subject to impeachment in stating that "certain great officers of State; a minister of finance, of war, of foreign affairs, etc. . . . will be amenable by impeachment to the public justice." Despite this ongoing debate, the authority to resolve any ambiguity in the scope of "civil Officers" for purposes of impeachment lays initially with the House, in adopting articles of impeachment, and then with the Senate, in trying the officer. Is Impeachment Limited to Criminal Acts? The Constitution describes the grounds of impeachment as "Treason, Bribery, or other high Crimes and Misdemeanors." As discussed above, the meaning of "high Crimes and Misdemeanors" is not defined in the Constitution or in statute. Some have argued that only criminal acts are impeachable offenses under the U.S. Constitution; impeachment is therefore inappropriate for noncriminal activity. In support of this assertion, one might note that the debate on impeachable offenses during the Constitutional Convention in 1787 shows that criminal conduct was encompassed in the "high crimes and misdemeanors" standard. As noted above, the notion that only criminal conduct can constitute sufficient grounds for impeachment does not, however, track historical practice. A variety of congressional materials support the notion that impeachment applies to certain noncriminal misconduct. For example, House committee reports on potential grounds for impeachment have described the history of English impeachment as including noncriminal conduct and noted that this tradition was adopted by the Framers. In accordance with the understanding of "high" offenses in the English tradition, impeachable offenses under this view are "constitutional wrongs that subvert the structure of government, or undermine the integrity of office and even the Constitution itself." "[O]ther high crimes and misdemeanor[s]" are not limited to indictable offenses, but apply to "serious violations of the public trust." Congressional materials take the view that "'Misdemeanor' . . . does not mean a minor criminal offense as the term is generally employed in the criminal law," but refers instead to the behavior of public officials. "[H]igh Crimes and Misdemeanors" may thus be characterized as "misconduct that damages the state and the operations of governmental institutions." According to congressional materials, the purposes underlying the impeachment process also reflect that noncriminal activity may constitute sufficient grounds for impeachment. The purpose of impeachment is not to inflict personal punishment for criminal activity. In fact, the Constitution explicitly makes clear that impeached individuals are not immunized from criminal liability once they are impeached for particular activity. Instead, impeachment is a "remedial" tool; it serves to effectively "maintain constitutional government" by removing individuals unfit for office. Grounds for impeachment include abuse of the particular powers of government office or a violation of the "public trust" âconduct that is unlikely to be barred by statute. Congressional practice also supports this position. Many impeachments approved by the House of Representatives have included conduct that did not involve criminal activity. For example, in 1803, Judge John Pickering was impeached and convicted for, among other things, appearing on the bench "in a state of total intoxication." In 1912, Judge Robert W. Archbald was impeached and convicted for abusing his position as a judge by inducing parties before him to enter financial transactions with him. In 1936, Judge Halstead Ritter was impeached and convicted for conduct that "br[ought] his court into scandal and disrepute, to the prejudice of said court and public confidence in the administration of justice . . . and to the prejudice of public respect for and confidence in the Federal judiciary." And a number of judges were impeached for misusing their position for personal profit. Are the Standards for Impeachable Offenses the Same for Judges and Executive Branch Officials? Some have suggested that the standard for impeaching a federal judge differs from an executive branch official. While Article II, Section 1, of the Constitution specifies the grounds for the impeachment of civil officers as "Treason, Bribery, or other high Crimes and Misdemeanors," Article III, Section 1, provides that federal judges "hold their Offices during good Behaviour." One argument posits that these clauses should be read in conjunction, meaning that judges can be impeached and removed from office if they fail to exhibit good behavior or if they are guilty of "treason, bribery, or other high Crimes and Misdemeanors." But while one might find some support for the notion that the "good behavior" clause constitutes an additional ground for impeachment in early twentieth century practice, the "modern view" of Congress appears to be that the phrase "good behavior" simply designates judicial tenure. Under this reasoning, rather than functioning as a ground for impeachment, the "good behavior" phrase simply makes clear that federal judges retain their office for life unless they are removed through a proper constitutional mechanism. For example, a 1973 discussion of impeachment grounds released by the House Judiciary Committee reviewed the history of the phrase and concluded that the "Constitutional Convention . . . quite clearly rejected" a "dual standard" for judges and civil officers. The next year, the House Judiciary Committee's Impeachment Inquiry asked whether the "good behavior" clause provides another ground for impeachment of judges and concluded that "[i]t does not." It emphasized that the House's impeachment of judges was "consistent" with impeachment of "non-judicial officers." Finally, the House Report on the Impeachment of President Clinton affirmed this reading of the Constitution, stating that impeachable conduct for judges mirrored impeachable conduct for other civil officers in the government. The "treason, bribery, and high Crimes and Misdemeanors" clause thus serves as the sole standard for impeachable conduct for both executive branch officials and federal judges. Still, even if the "good behavior" clause does not delineate a standard for impeachment and removal for federal judges, as a practical matter, one might argue that the range of impeachable conduct differs between judges and executive branch officials because of the differing nature of each office. For example, one might argue that a federal judge could be impeached for perjury or fraud because of the importance of trustworthiness and impartiality to the judiciary, while the same behavior might not always constitute impeachable conduct for an executive branch official. But given the varied factors at issueâincluding political calculations, the relative paucity of impeachments of nonjudicial officers compared to judges, and the fact that a nonjudicial officer has never been convicted by the Senateâit is uncertain if conduct meriting impeachment and conviction for a judge would fail to qualify for a nonjudicial officer. The impeachment and acquittal of President Clinton highlights this difficulty. The House of Representatives impeached President Clinton for (1) providing perjurious and misleading testimony to a federal grand jury and (2) obstruction of justice in regards to a civil rights action against him. The House Judiciary Committee report that recommended articles of impeachment argued that perjury by the President was an impeachable offense, even if committed with regard to matters outside his official duties. The report rejected the notion that conduct such as perjury was "more detrimental when committed by judges and therefore only impeachable when committed by judges." The report pointed to the impeachment of Judge Claiborne, who was impeached and convicted for falsifying his income tax returnsâan act which "betrayed the trust of the people of the United States and reduced confidence in the integrity and impartiality of the judiciary." While it is "devastating" for the judiciary when judges are perceived as dishonest, the report argued, perjury by the President is "just as devastating to our system of government." And, the report continued, both Judge Claiborne and Judge Nixon were impeached and convicted for perjury and false statements in matters distinct from their official duties. Likewise, the report concluded that President Clinton's perjurious conduct, though seemingly falling outside his official duties as President, nonetheless constituted grounds for impeachment. In contrast, the minority views from the report opposing impeachment reasoned that "not all impeachable offenses are crimes and not all crimes are impeachable offenses." The minority argued that the President is not impeachable for all potential crimes, no matter how minor; impeachment is reserved for "conduct that constitutes an egregious abuse or subversion of the powers of the executive office." Examining the impeachment of President Andrew Johnson and the articles of impeachment drawn up for President Richard Nixon, the minority concluded that both were accused of committing "public misconduct" integral to their "official duties." The minority noted that the Judiciary Committee had rejected an article of impeachment against President Nixon alleging that he committed tax fraud, primarily because that "related to the President's private conduct, not to an abuse of his authority as President." The minority did not explicitly claim that the grounds for impeachment might be different between federal judges and executive branch officials, but its reasoning at least hints in that direction. Its rejection of nonpublic behavior as sufficient grounds for impeachment of the Presidentâincluding its example of tax fraud as nonpublic behavior that does not qualifyâappears to conflict with the past impeachment and conviction of federal judges on just this basis. One reading of the minority's position is that certain behavior might be impeachable conduct for a federal judge, but not for the President. While two articles of impeachment were approved by the House, the Senate acquitted President Clinton on both charges. Even so, generating firm conclusions from this result is difficult, as there may have been varying motivations for these votes. One possibility is that the acquittal occurred because some Senatorsâthough agreeing that the conduct merited impeachmentâthought the House Managers failed to prove their case. Another is that certain Senators disagreed that the behavior was impeachable at all. Yet another possibility is that neither ideological stance was considered and voting was conducted solely according to political calculations. What Is the Constitutional Definition of Bribery? Civil officers are subject to impeachment for treason, bribery, or "other high Crimes and Misdemeanors." Treason is defined in the constitutional text, but bribery is not. As this report has discussed, Congress has substantial discretion in determining what misconduct constitutes "high Crimes and Misdemeanors" meriting impeachment and removal for government officials. Likewise, Congress could presumably look to several different sources to inform its understanding of what behavior qualifies as bribery under the Constitution. One source might be the current federal criminal code. Under federal statute, it is a criminal offense for a public official to corruptly seek or receive bribes in return for official acts. Another might be the understanding of the crime of bribery at the nation's Founding. At the time of the Constitutional Convention, bribery was a common law crime, although its precise scope is somewhat difficult to determine. According to Blackstone, it included situations where a judge, or other person involved in the administration of justice, took "any undue reward to influence his behavior in office." Though the scope of the crime of bribery was initially narrow, it appears to have expanded to include giving as well as receiving bribes, as well as attempted bribery in certain situations. Some commentators assert that, at the time of the Founding, the English and American common law definition of bribery had developed to apply not just to judges, but also to executive officers . No matter the precise scope of bribery in the common law courts, in Parliamentary practice it was understood to constitute an impeachable offense in England at the time of the nation's Founding. In 1624, the House of Commons impeached the Lord Treasurer (one of the King's ministers) for bribery. Actual debate on the meaning of bribery at the Constitutional Convention was limited. As mentioned above, while discussing presidential impeachment, Gouverneur Morris asserted that the President should be subject to the impeachment process because he might "be bribed by a greater interest to betray his trust," noting the example of Charles II receiving a bribe from Louis XIV. The First Congress enacted a federal bribery statute for customs officers, which provided that those officers convicted of taking or receiving a bribe be fined and barred from holding office in the future, while the payer of a bribe would be fined as well . The same Congress passed another bribery statute that applied to anyone who "directly or indirectly, give[s] any sum or sums of money, or any other bribe, present or reward, or any promise, contract, obligation or security, for the payment or delivery of any money, present or reward, or any other thing to obtain or procure the opinion, judgment or decree of any judge or judges of the United States" as well as the judge who accepted the bribe. Other officers of the United States were added to the federal statute's provisions in 1853. And the states passed their own laws about the time of the Constitution's drafting that prohibited bribery and the closely related crime of extortion by state officers and judges. A number of impeachments in the United States have charged individuals with misconduct that was viewed as bribery. In most of those instances, however, the specific articles of impeachment were framed as "high crimes and misdemeanors" or an "impeachable offense." For instance, the House of Representatives approved articles of impeachment against then-Judge Hastings, including one for the "impeachable offense" of participating in a "corrupt conspiracy to obtain $150,000 from defendants [in a case before him] in return for the imposition of [lighter] sentences." Although the article did not mention bribery, the Judiciary Committee report analyzing the article described Judge Hastings as participating in a "bribery conspiracy" or a "bribery scheme." The Senate convicted Hastings on this article. Likewise, the first article of impeachment against Judge Porteous charged him with "solicit[ing] and accept[ing] things of value" from attorneys without disclosure and ruling in those clients favor. The second charged him with "solicit[ing] and accept[ing] things of value . . . for his personal use and benefit, while at the same time taking official actions that benefitted" a bail bondman and his sister. Neither article explicitly referenced bribery, but much like the Hastings impeachment, the Judiciary Committee report analyzing the articles alleged that Judge Porteous had participated in a "bribery scheme." In sum, the Framers provided that bribery was an impeachable offense for the President, Vice President, and other civil officers. At the time of the Constitution's drafting, bribery was a common law crime whose scope had expanded from its earlier roots. And Parliament had impeached ministers of the Crown for bribery. But the Framers did not adopt a formal definition of bribery in the Constitution, and the debates at the Constitutional Convention and during ratification do not clearly indicate the intended meaning of bribery for impeachment purposes. In any case, the practice of impeachment in the United States has tended to envelop charges of bribery within the broader standard of "other high Crimes and Misdemeanors." Impeachment for Behavior Prior to Assuming Office Most impeachments have concerned behavior occurring while an individual is in a federal office. But some have addressed, at least in part, conduct before individuals assumed their positions. For example, in 1912, a resolution impeaching Judge Robert W. Archbald and setting forth thirteen articles of impeachment was reported out of the House Judiciary Committee and agreed to by the House. The Senate convicted Judge Archbald in January the next year. At the time that Judge Archbald was impeached by the House and tried by the Senate in the 62nd Congress, he was U.S. Circuit Judge for the Third Circuit and a designated judge of the U.S. Commerce Court. The articles of impeachment brought against him alleged misconduct in those positions as well as in his previous position as U.S. District Court Judge of the Middle District of Pennsylvania. Judge Archbald was convicted on four articles alleging misconduct in his then-current positions as a circuit judge and Commerce Court judge, and on a fifth article that alleged misuse of his office both in his then-current positions and in his previous position as U.S. District Judge. While Judge Archbald was impeached and convicted in part for behavior occurring before he assumed his then-current position, that behavior occurred while he held a prior federal office. Judge G. Thomas Porteous, in contrast, is the first individual to be impeached by the House and convicted by the Senate based in part on conduct occurring before he began his tenure in federal office. Article II alleged misconduct beginning while Judge Porteous was a state court judge as well as misconduct while he was a federal judge. Article IV alleged that Judge Porteous made false statements to the Senate and FBI in connection with his nomination and confirmation to the U.S. District Court for the Eastern District of Louisiana. He was convicted on all four articles, removed from office, and disqualified from holding future federal offices. On the other hand, it does not appear that any President, Vice President, or other civil officer of the United States has been impeached by the House solely based on conduct occurring before he began his tenure in the office held at the time of the impeachment investigation, although the House has, on occasion, investigated such allegations. Impeachment After an Individual Leaves Office It appears that federal officials who have resigned have still been thought to be susceptible to impeachment and a ban on holding future office. Secretary of War William W. Belknap resigned hours before the House impeached him, but the Senate still conducted a trial in which Belknap was acquitted. During the trial, upon objection by Belknap's counsel that the Senate lacked jurisdiction because Belknap was now a private citizen, the Senate voted in favor of jurisdiction. That said, the resignation of an official under investigation for impeachment often ends impeachment proceedings. For example, no impeachment vote was taken following President Richard Nixon's resignation after the House Judiciary Committee decided to report articles of impeachment to the House. And proceedings were ended following the resignation of Judges English, Delahay, and Kent. What Is the Standard of Proof in House and Senate Impeachment Proceedings? In the judicial system, the degree of certainty with which parties must prove their allegations through the production of evidenceâwhat is known as the burden of persuasion or the standard of proof âvaries depending on the type of proceeding. In a criminal trial, in which a defendant risks deprivation of life and liberty, the prosecutor's burden of proof is high. Each element of the offense must be proved "beyond a reasonable doubt." In civil litigation between private parties, in which the potential harm to a defendant is less severe, the plaintiff's burden of proof is reduced. The allegations generally need only be proved by a "preponderance of the evidence." An even more generous standard is used by federal grand juries, who may issue an indictment on a finding that there is "probable cause" to believe that a crime has occurred. In yet other settings, an intermediate standard of "clear and convincing evidence" is used. This burden is somewhere below "reasonable doubt" but higher than "preponderance." The Constitution establishes no clear standard of proof to be applied in the impeachment process. Neither has the House in its decision to impeach, nor the Senate in its decision to convict, chosen to establish (either by rule or precedent) a particular governing standard. The question has been repeatedly debated in both chambers, but ultimately individual Members have been free to use any standard they wish in deciding how to cast their respective votes. In short, when deciding questions of impeachment and removal, historical practice seems to indicate that Members need be convinced only to their own satisfaction. Moreover, even if the House or Senate chose to establish a governing standard of proof, it may be hard for such a rule to be enforced. Standard of Proof in the House In the House, the debate over the standard of proof that should be applied in determining whether the evidence supports approval of articles of impeachment has generally focused on the lower end of the standards-of-proof spectrum. Those who have argued for the most easily satisfied probable cause standard have often analogized the House's decision to impeach to that of a grand jury's decision to indict. Like a grand jury, the House's role is to ascertain whether sufficient evidence exists to charge an official with an impeachable offense, not to determine guilt. That role is reserved to the Senate, which may apply a different, potentially higher standard of proof. As such, it is argued that the House should apply a similar standard to what is applied by an investigating grand juryâa standard such as preponderance of the evidence or "probable cause." This position was perhaps most clearly articulated during the Judiciary Committee's consideration of the impeachment of Judge Charles Swayne in 1904 by Representative Powers, who argued the following: This House has no constitutional power to pass upon the question of the guilt or the innocent of the respondent. He is not on trial before us. We have no right to take from him the presumption of innocence which he enjoys under the law. All we have the right to do is to say whether there has been made out such probable cause of guilt as to entitle the American people to the right to have the case tried before the Senate of the United States. Those who have argued for the more demanding clear and convincing standard have often focused on the gravity of the impeachment process and its impact not only on the impeached official, but in the case of a presidential impeachment, on the entire executive branch. For example, during the House's consideration of articles of impeachment against President Clinton, the President's counsel asserted that the clear and convincing standard was "commensurate with the gravity of impeachment." "Lower standards," it was argued, "are simply not demanding enough to justify the fateful step of an impeachment trial." The House Judiciary Committee's report issued in connection with its approval of articles of impeachment against President Nixon displays the House's historical reluctance to impose any formalized burden of proof on Members. In describing the articles, the report noted that the committee had found "clear and convincing evidence" of the individual impeachable offenses, but did not explicitly contend that such a finding was required, or that "clear and convincing" should represent the governing standard of proof in House impeachments. The dissenting Members took a different approach, arguing that they were persuaded that the applicable standard for proof in House impeachments "must be no less rigorous than proof by 'clear and convincing evidence.'" Even so, the minority not only acknowledged that the House has never sought to "fix by rule" an applicable standard of proof, but also explicitly stated that they would not "advocate such a rule." "The question," the minority concluded, "is properly left to the discretion of individual Members." Standard of Proof in the Senate Much like Members of the House, Senators are not bound by any specific burden of proof in the trial of an impeached official. Counsel for the impeached official have generally argued that individual Senators should adopt the most demanding standard of "beyond a reasonable doubt," while the House Managers have generally urged a lower standard. The Constitution's use of words like "try" and "convicted" could be read to suggest an intent that the Senate adopt a criminal-like standard in impeachment trials. Counsel for President Clinton argued this position, at least with respect to presidential impeachments, asserting that the Constitution's phrasing "strongly suggests that an impeachment trial is akin to a criminal proceeding and that the beyond-a-reasonable-doubt standard of criminal proceedings should be used." House Managers, on the other hand, have generally argued that use of the "beyond reasonable doubt" standard is inappropriate. They have noted that "an impeachment trial is not a criminal trial," nor are the consequences of a convictionâwhich are limited to removal from office and possible disqualification from holding future federal officeâcriminal in nature. The Senate's approach of ensuring that its Members retain the ability to make individualized decisions on the standard of proof necessary for conviction was perhaps best exhibited during the impeachment trial of Judge Claiborne. There, counsel for Judge Claiborne submitted a motion to establish "beyond a reasonable doubt" as the applicable standard of proof in the trial. The House Managers disagreed, arguing that standard was inappropriate, and that setting any standards would prevent individual members from exercising their own personal judgment. Judge Claiborne's motion was ultimately rejected by the Presiding Officer, who held that the standard of proof to be applied was left to the discretion of each individual Senator. This approach was affirmed in the Senate's most recent statement on the standard of proof in a Senate trial. During Judge Porteous's trial, the Senate trial committee referenced the resolution of the Claiborne motion, noting that the Senate had "declin[ed] to establish an obligatory standard." Accordingly, the committee report concluded that "Each Senator may, therefore, use the standard of proof that he or she feels is appropriate." As such, rather than impose a specific standard of proof on its members, both the House and Senate have sought to ensure that individual Members remain free to make their own determinations, guided by their individual conscience and judgment, and their oath to do "impartial justice." What Are the Applicable Evidentiary Rules and Standards in a Senate Impeachment Trial? Like most aspects of the Senate impeachment trial, the body's approach to evidentiary questions is unique. The Senate has not bound itself to any specific controlling set of evidentiary rules. Instead, the admissibility of evidence is primarily based on Senate precedent, with objections first ruled on by the Presiding Officer, but ultimately settled by a majority vote of the Senate. The present Senate Impeachment Rules provide a basic procedural framework for how evidentiary questions are to be handled. Under the Rules, objections to the admissibility of evidence "may be made by the parties or their counsel." Those objections are directed to the Presiding Officer who "may rule on all questions of evidence." That ruling is given effect unless challenged by an individual Senator. At that point, the Rules provide that the question be "submitted to the Senate for decision without debate." The Rules set the process by which evidentiary questions are to be decided, but provide only the most basic guidance on the substantive standards to be applied by either the Presiding Officer or individual Senators in making such decisions. The Rules state only that the Presiding Officer's authority to rule on questions of evidence includes, but is not limited to, "questions of relevancy, materiality, and redundancy of evidence and incidental questions." Similarly, the Senate reserves the right to "determine competency, relevancy, and materiality." The Rules therefore suggest only that evidence should meet basic relevancy requirements. To the extent there are additional substantive standards for either the Presiding Officer or individual Senators to apply in making evidentiary determinations, they appear to derive primarily from Senate precedent. Evaluating and understanding those precedents, however, is difficult because evidentiary questions submitted to the Senate are generally made with no debate. As such, the historical record of Senate deliberations on evidentiary questions typically includes the final disposition of the question and perhaps only limited evidence of the particular reasoning that led to the Senate's decision. Given the quasi-judicial aspects of the Senate trial, the parties have often used judicial evidentiary standards, including the Federal Rules of Evidence, to support their motions to either allow or exclude evidence. The Senate has generally been receptive to this approach and in fact arguably supported some adherence to judicial rules of evidence. But more recent trials have made clear that the Senate is "not bound by the Federal Rules of Evidence, although those rules may provide some guidance. . . ." Indeed, it has been argued that the Federal Rules of Evidence, which were designed to protect jurors from prejudicial evidence and to help them judge evidence, have little if any place in a Senate impeachment trial, where each individual Senator must weigh all relevant evidence as he or she deems fit. This approach is consistent with Chief Justice Rehnquist's ruling during the Clinton impeachment trial that the Senators should not be referred to as "jurors" because in an impeachment trial "the Senate is not simply a jury. It is a court. . . ." Accordingly, while judicial principles may guide the Senate, the body primarily "determine[s] the admissibility of evidence by looking to Senate precedents rather than court decisions. A Senate vote is the ultimate authority for determining the admissibility of evidence." In the end, viewing House and Senate impeachment proceedings through the lens of established judicial constructsâincluding rules of procedure, evidence, and standards of proofâshould be undertaken with caution. The impeachment process does not fit into existing judicial molds of either a criminal or civil proceeding. Indeed, it is not necessarily a judicial proceeding at all. It is instead an exceptional proceeding defined by its distinctive combination of judicial and legislative characteristics that has historically required a unique approach to procedural and evidentiary questions. Are Impeachment Proceedings Subject to Judicial Review? Impeachment proceedings have been challenged in federal court on a number of occasions. Perhaps most significantly, the Supreme Court has ruled that a challenge to the Senate's use of a trial committee to take evidence posed a nonjusticiable political question. In Nixon v. United States , Judge Walter L. Nixon had been convicted in a criminal trial on two counts of making false statements before a grand jury and was sent to prison. He refused, however, to resign and continued to receive his salary as a judge while in prison. The House of Representatives adopted articles of impeachment against the judge and presented the Senate with the articles. The Senate invoked Impeachment Rule XI, a Senate procedural rule which permits a committee to take evidence and testimony. After the committee completed its proceedings, it presented the full Senate with a transcript and report. Both sides presented briefs to the full Senate and delivered arguments, and the Senate then voted to convict and remove him from office. The judge then brought a suit arguing that the use of a committee to take evidence violated the Constitution's provision that the Senate "try" all impeachments. The Supreme Court noted that the Constitution grants "the sole Power" to try impeachments "in the Senate and nowhere else"; and the word "try" "lacks sufficient precision to afford any judicially manageable standard of review of the Senate's actions." This constitutional grant of sole authority, the Court reasoned, meant that the "Senate alone shall have authority to determine whether an individual should be acquitted or convicted." In addition, because impeachment functions as the " only check on the Judicial Branch by the Legislature," the Court noted the important separation of powers concerns that would be implicated if the "final reviewing authority with respect to impeachments [was placed] in the hands of the same body that the impeachment process is meant to regulate." Further, the Court explained that certain prudential considerationsâ"the lack of finality and the difficulty of fashioning relief"âweighed against adjudication of the case. Judicial review of impeachments could create considerable political uncertainty, if, for example, an impeached President sued for judicial review. The Court in Nixon was careful to distinguish the situation from Powell v. McC ormack , a case also involving congressional procedure where the Court declined to apply the political question doctrine. That case involved a challenge brought by a Member-elect of the House of Representatives, who had been excluded from his seat pursuant to a House Resolution. The precise issue in Powell was whether the judiciary could review a congressional decision that the plaintiff was "unqualified" to take his seat. That determination had turned, the Court explained, "on whether the Constitution committed authority to the House to judge its Members' qualifications, and if so, the extent of that commitment." The Court noted that while Article I, Section 5, does provide that Congress shall determine the qualifications of its Members, Article I, Section 2, delineates the three requirements for House membershipâRepresentatives must be at least twenty-five years old, have been U.S. citizens for at least seven years, and inhabit the states they represent. Therefore, the Powell Court concluded, the House's claim that it possessed unreviewable authority to determine the qualifications of its Members "was defeated by . . . this separate provision specifying the only qualifications which might be imposed for House membership." In other words, finding that the House had unreviewable authority to decide its Members' qualifications would violate another provision of the Constitution. The Court therefore concluded in Powell that whether the three requirements in the Constitution were satisfied was textually committed to the House, "but the decision as to what these qualifications consisted of was not." Applying the logic of Powell to the case at hand, the Nixon Court noted that here, in contrast, leaving the interpretation of the word "try" with the Senate did not violate any "separate provision" of the Constitution. In addition, several other aspects of the impeachment process have been challenged. Judge G. Thomas Porteous sued seeking to bar counsel for the Impeachment Task Force of the House Judiciary Committee from using sworn testimony the judge had provided under a grant of immunity. The impeachment proceedings were started after a judicial investigation of Judge Porteous for alleged corruption on the bench. During that investigation, Judge Porteous testified under oath to the Special Investigatory Committee under an order granting him immunity from that information being used against him in a criminal case. Before the U.S. District Court for the District of Columbia, Judge Porteous argued that the use of his immunized testimony during an impeachment proceeding violated his Fifth Amendment right not to be compelled to serve as a witness against himself. The court rejected his challenge, reasoning that because the use of the testimony for an impeachment proceeding fell within the legislative sphere, the Speech or Debate Clause prevented the court from ordering the committee staff members to refrain from using the testimony. Similarly, Judge Alcee L. Hastings sought to prevent the House Judiciary Committee from obtaining the records of a grand jury inquiry during the committee's impeachment investigation. Prior to the impeachment proceedings, although ultimately acquitted, Judge Hastings had been indicted by a federal grand jury for a conspiracy to commit bribery. Judge Hastings's argument was grounded in the separation of powers: he claimed that permitting disclosure of grand jury records for an impeachment investigation risked improperly allowing the executive and judicial branches to participate in the impeachment processâa tool reserved for the legislature. The U.S. Court of Appeals for the Eleventh Circuit, however, rejected this "absolutist" concept of the separation of powers and held that "a merely generalized assertion of secrecy in grand jury materials must yield to a demonstrated, specific need for evidence in a pending impeachment investigation." The U.S. District Court for the District of Columbia initially threw out Judge Hastings's Senate impeachment conviction, because the Senate had tried his impeachment before a committee rather than the full Senate. The decision was vacated on appeal and remanded for reconsideration under Nixon v. United States . The district court then dismissed the suit because it presented a nonjusticiable political question. Conclusion Influenced by both English and colonial practice, the Framers of the Constitution crafted an Americanized impeachment remedy that ultimately holds government officers accountable for political offenses, or misdeeds committed by public officials against the state. The meaning of the Constitution's impeachment provisions has been worked out over time, informed by the historical practices of the House and Senate in pursuing impeachment for the misconduct of government officers. Impeachment is also generally immune from judicial review, meaning that Congress has substantial discretion in how it structures impeachment proceedings. The Constitution does not delineate the range of misconduct that qualifies as "high Crimes and Misdemeanors," perhaps because the scope of possible offenses by government officers is impossible to delineate in advance. The history of impeachment in the United States shows that the remedy has generally applied against government officers for abuses of power, corruption, and conduct determined incompatible with an individual's office, but does not extend to strictly political or policy disagreements. Summary:	null	96	129,094	129,096	129,096	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The Constitution grants Congress authority to impeach and remove the President, Vice President, and other federal "civil Officers" for treason, bribery, or "other high Crimes and Misdemeanors." Impeachment is one of the various checks and balances created by the Constitution, serving as a crucial tool for holding government officers accountable for abuse of power, corruption, and conduct considered incompatible with the nature of an individual's office. Although the term impeachment is commonly used to refer to the removal of a government official from office, the impeachment process, as described in the Constitution, entails two distinct proceedings carried out by the separate houses of Congress. First, a simple majority of the House impeaches âor formally approves allegations of wrongdoing amounting to an impeachable offense. The second proceeding is an impeachment trial in the Senate. If the Senate votes to convict with a two-thirds majority, the official is removed from office. Following a conviction, the Senate also may vote to disqualify that official from holding a federal office in the future. The House has impeached nineteen individuals: fifteen federal judges, one Senator, one Cabinet member, and two Presidents. Of these, eight individualsâall federal judgesâwere convicted by the Senate. The Constitution imposes several requirements on the impeachment process. When conducting an impeachment trial, Senators must be "on Oath or Affirmation," and the right to a jury trial does not extend to impeachment proceedings. If the President is impeached and tried in the Senate, the Chief Justice of the United States presides at the trial. Finally, the Constitution bars the President from using the pardon power to shield individuals from impeachment or removal from office. Understanding the historical practices of Congress on impeachment is central to fleshing out the meaning of the Constitution's impeachment clauses. While much of constitutional law is developed through jurisprudence analyzing the text of the Constitution and applying prior judicial precedents, the Constitution's meaning is also shaped by institutional practices and political norms. James Madison, for instance, argued that the meaning of certain provisions in the Constitution would be "liquidated" over time, or determined through a "regular course of practice." Justice Joseph Story thought this principle applied to impeachment, noting that the Framers understood that the meaning of "high Crimes and Misdemeanors" constituting impeachable offenses would develop over time, much like the common law. Indeed, Justice Story believed it would be impossible to define precisely the full scope of political offenses that may constitute impeachable behavior in the future. Moreover, the power of impeachment is largely immune from judicial review, meaning that Congress's choices in this arena are unlikely to be overturned by the courts. For that reason, examining the history of actual impeachments is crucial to determining the meaning of the Constitution's impeachment provisions. Consistent with this backdrop, this report begins with an examination of the historical background on impeachment, including the perspective of the Framers as informed by English and colonial practice. It then turns to the unique constitutional roles of the House and Senate in the process, followed by a discussion of impeachment practices throughout the country's history. The report concludes by noting and exploring several recurring questions about impeachment, including legal considerations relevant to a Senate impeachment trial. Historical Background on Impeachment English and Colonial Practice The concept of impeachment and the standard of "high Crimes and Misdemeanors" in the federal Constitution originate from English, colonial, and early state practice. During the struggle in England by Parliament to impose restraints on the Crown's powers, the House of Commons impeached and tried before the House of Lords ministers of the Crown and influential individualsâbut not the Crown itself âwho were often considered beyond the reach of the criminal courts. The tool was used by Parliament to police political offenses committed against the "system of government." Parliament used impeachment as a tool to punish political offenses that damaged the state or subverted the government, although impeachment was not limited to government ministers. At least by the second half of the seventeenth century, impeachment in England represented a remedy for "misconduct in high places." The standard of high crimes and misdemeanors appeared to apply to, among other things, significant abuses of a government office, misapplication of funds, neglect of duty, corruption, abridgement of parliamentary rights, and betrayals of the public trust. Punishment for impeachment was not limited to removal from office, but could include a range of penalties upon conviction by the House of Lords, including imprisonment, fines, or even death. In the English experience, the standard of high crimes and misdemeanors appears to have addressed conduct involving an individual's abuse of power or office that damaged the state. Inheriting the English practice, the American colonies adopted their own distinctive impeachment practices. These traditions extended into state constitutions established during the early years of the Republic. The colonies largely limited impeachment to officeholders based on misconduct committed in office, and the available punishment for impeachment was limited to removal from office. Likewise, many state constitutions adopted after the Declaration of Independence in 1776, but before the federal Constitution was ratified, incorporated impeachment provisions limiting impeachment to government officials and restricting the punishment for impeachment to removal from office with the possibility of future disqualification from office. At the state level, the body charged with trying an impeachment varied. Choices of the Framers: An "Americanized" Impeachment System The English and colonial history thus informed the Framers' consideration and adoption of impeachment procedures at the Constitutional Convention. In some ways, the Framers adopted the general framework of impeachment inherited from English practice. The English Parliamentary structure of a bicameral legislatureâdividing the power of impeachment between the "lower" house, which impeached individuals, and an "upper" house, which tried themâwas replicated in the federal system with the power to impeach given to the House of Representatives and the power to try impeachments assigned to the Senate. Nonetheless, influenced by the impeachment experiences in the colonies, the Framers ultimately adopted an "Americanized" impeachment practice with a republican character distinct from English practice. The Framers' choices narrowed the scope of impeachable offenses and persons subject to impeachment as compared to English practice. For example, the Constitution established an impeachment mechanism exclusively geared toward holding public officials, including the President, accountable. This contrasted with the English practice of impeachment, which could extend to any individual save the Crown and was not limited to removal from office, but could lead to a variety of punishments. Likewise, the Framers adopted a requirement of a two-thirds majority vote for conviction on impeachment charges, shielding the process somewhat from naked partisan control. This too differed from the English practice, which allowed conviction on a simple majority vote. And in England, the Crown could pardon individuals following an impeachment conviction. In contrast, the Framers restricted the pardon power from being applied to impeachments, rendering the impeachment process essentially unchecked by the executive branch. Ultimately, the Framers' choices in crafting the Constitution's impeachment provisions provide Congress with a crucial check on the other branches of the federal government and inform the Constitution's separation of powers. Impeachment Trials The Framers also applied the lessons of English history and colonial practice in determini ng the structure and location of impeachment trials. As mentioned above, most of the American colonies and early state constitutions adopted their own impeachment procedures before the establishment of the federal Constitution, placing the power to try impeachments in various bodies. At the Constitutional Convention, the proper body to try impeachments posed a difficult question. Several proposals were considered that would have assigned responsibility for trying impeachments to different bodies, including the Supreme Court, a panel of state court judges, or a combination of these bodies. One objection to granting the Supreme Court authority to try impeachments was that Justices were to be appointed by the President, casting doubt on their ability to be independent in an impeachment trial of the President or another executive official. Further, a crucial legislative check in the Constitution's structure against the judicial branch is impeachment, as Article III judges cannot be removed by other means. To permit the judiciary to have the ultimate say in one of the most significant checks on its power would subvert the purpose of that important constitutional limitation. Rather than allowing a coordinate branch to play a role in the impeachment process, the Framers decided that Congress alone would determine who is subject to impeachment. This framework guards against, in the words of Alexander Hamilton, "a series of deliberate usurpations on the authority of the legislature" by the judiciary. Likewise, the Framers' choice to place both the accusatory and adjudicatory aspects of impeachment in the legislature renders impeachment "a bridle in the hands of the legislative body upon the executive" branch. That said, the Framers' choice also imposed institutional constraints on the process. Dividing the power to impeach from the authority to try and convict guards against "the danger of persecution from the prevalency of a fractious spirit in either" body. Finally, the Framers made one exception to the legislature's exclusive role in the impeachment process that promotes integrity in the proceedings. The Chief Justice of the United States presides at impeachment trials of the President of the United States. This provision ensures that a Vice President, in his usual capacity as Presiding Officer of the Senate, shall not preside over proceedings that could lead to his own elevation to the presidency, a particularly important concern at the time of the founding, when a President and Vice President could belong to rival parties. High Crimes and Misdemeanors The Framers narrowed the standard for impeachable conduct as compared to the English experience. While the English Parliament never formally defined the parameters of what counted as impeachable conduct, the Framers restricted impeachment to treason, bribery, and "other high Crimes and Misdemeanors," the latter phrase a standard inherited from English practice. This standard applied to behavior found damaging to the state, including significant abuses of a government office or power, misapplication of funds, neglect of duty, corruption, abridgement of parliamentary rights, and betrayals of the public trust. The debates at the Constitutional Convention over what behavior should be subject to impeachment focused mainly on the President. In discussing whether the President should be removable by impeachment, Gouverneur Morris argued that the President should be removable through the impeachment process, noting concern that the President might "be bribed by a greater interest to betray his trust," and pointed to the example of Charles II receiving a bribe from Louis XIV. The adoption of the high crimes and misdemeanors standard during the Constitutional Convention reveals that the Framers did not envision impeachment as the proper remedy for simple policy disagreements with the President. During the debate, the Framers rejected a proposal to includeâin addition to treason and briberyâ"maladministration" as an impeachable offense, which would have presumably incorporated a broad range of common-law offenses. Although "maladministration" was a ground for impeachment in many state constitutions at the time of the Constitution's drafting, the Framers instead adopted the term "high Crimes and Misdemeanors" from English practice. James Madison objected to including "maladministration" as grounds for impeachment because such a vague standard would "be equivalent to a tenure during pleasure of the Senate." The Convention voted to include "high crimes and misdemeanors" instead. Arguably, the Framers' rejection of such a broad term supports the view that congressional disagreement with a President's policy goals is not sufficient grounds for impeachment. Of particular importance to the understanding of high crimes and misdemeanors to the Framers was the roughly contemporaneous British impeachment proceedings of Warren Hastings, the governor general of India, which were transpiring at the time of the Constitution's formulation and ratification. Hastings was charged with high crimes and misdemeanors, which included corruption and abuse of power. At the Constitutional Convention, George Mason positively referenced the impeachment of Hastings. At that point in the Convention, a proposal to define impeachment as appropriate for treason and bribery was under consideration. George Mason objected, noting that treason would not cover the misconduct of Hastings. He also thought impeachment should extend to "attempts to subvert the Constitution." Mason thus proposed that maladministration be included as an impeachable offense, although, as noted above, this was eventually rejected in favor of "high Crimes and Misdemeanors." While evidence of precisely what conduct the Framers and ratifiers of the Constitution considered to constitute high crimes and misdemeanors is relatively sparse, the evidence available indicates that they considered impeachment to be an essential tool to hold government officers accountable for political crimes, or offenses against the state. James Madison considered it "indispensable that some provision be made for defending the community against incapacity, negligence, or perfidy of the chief executive," as the President might "pervert his administration into a scheme of peculation or oppression," or "betray his trust to foreign powers." Alexander Hamilton, in explaining the Constitution's impeachment provisions, described impeachable offenses as arising from "the misconduct of public men, or in other words, from the abuse or violation of some public trust." Such offenses were " Political , as they relate chiefly to injuries done immediately to the society itself." These political offenses could take innumerable forms and simply could not be neatly delineated. At the North Carolina ratifying convention, James Iredell, later to serve as an Associate Justice of the Supreme Court, noted the difficulty in defining what constitutes an impeachable offense, beyond causing injury to the government. For him, impeachment was "calculated to bring [offenders] to punishment for crime which is not easy to describe, but which every one must be convinced is a high crime and misdemeanor against government. . . . [T]he occasion for its exercise will arise from acts of great injury to the community." He thought the President would be impeachable for receiving a bribe or "act[ing] from some corrupt motive or other," but not merely for "want of judgment." Similarly, Samuel Johnston, then the governor of North Carolina and later the state's first Senator, thought impeachment was reserved for "great misdemeanors against the public." At the Virginia ratifying convention, a number of individuals claimed that impeachable offenses were not limited to indictable crimes. For example, James Madison argued that were the President to assemble a minority of states in order to ratify a treaty at the expense of the other states, this would constitute an impeachable "misdemeanor." And Virginia Governor Edmund Randolph, who would become the nation's first Attorney General, noted that impeachment was appropriate for a "willful mistake of the heart," but not for incorrect opinions. Randolph also argued that impeachment was appropriate for a President's violation of the Foreign Emoluments Clause, which, he noted, guards against corruption. James Wilson, delegate to the Constitutional Convention and later a Supreme Court Justice, delivered talks at the College of Philadelphia on impeachment following the adoption of the federal Constitution. He claimed that impeachment was reserved to "political crimes and misdemeanors, and to political punishments." He argued that, in the eyes of the Framers, impeachments did not come "within the sphere of ordinary jurisprudence. They are founded on different principles; are governed by different maxims; and are directed to different objects." Thus, for Wilson, the impeachment and removal of an individual did not preclude a later trial and punishment for a criminal offense based on the same behavior. Justice Joseph Story's writings on the Constitution echo the understanding that impeachment applied to political offenses. He noted that impeachment applied to those "offences â¦ committed by public men in violation of their public trust and duties," duties that are often "political." And like Hamilton, Story considered the range of impeachable offenses "so various in their character, and so indefinable in their actual involutions, that it is almost impossible to provide systematically for them by positive law." At the time of ratification of the Constitution, the phrase "high crimes and misdemeanors" thus appears understood to have applied to uniquely "political" offenses, or misdeeds committed by public officials against the state. Such offenses simply resist a full delineation, as the possible range of potential misdeeds in office cannot be determined in advance. Instead, the type of misconduct that merits impeachment is worked out over time through the political process. In the years following the Constitution's ratification, precisely what behavior constitutes a high crime or misdemeanor has thus been the subject of much debate. The Role of the House of Representatives The Constitution grants the sole power of impeachment to the House of Representatives. Generally speaking, the impeachment process has often been initiated in the House by a Member by resolution or declaration of a charge, although anyoneâincluding House Members, a grand jury, or a state legislatureâmay request that the House investigate an individual for impeachment purposes. Indeed, in modern practice, many impeachments have been sparked by referrals from an external investigatory body. Beginning in the 1980s, the Judicial Conference has referred its findings to the House recommending an impeachment investigation into a number of federal judges who were eventually impeached. Similarly, in the impeachment of President Bill Clinton, an independent counselâa temporary prosecutor given statutory independence and charged with investigating certain misconduct when approved by a judicial body âfirst conducted an investigation into a variety of alleged activities on the part of the President and his associates, and then delivered a report to the House detailing conduct that the independent counsel considered potentially impeachable. Regardless of the source requesting an impeachment investigation, the House has sole discretion under the Constitution to begin any impeachment proceedings against an individual. In practice, impeachment investigations are often handled by an already existing or specially created subcommittee of the House Judiciary Committee. The scope of the investigation can vary. In some instances, an entirely independent investigation may be initiated by the House. In other cases, an impeachment investigation might rely on records delivered by outside entities, such as those delivered by the Judicial Conference or an independent counsel. Following this investigation, the full House may vote on the relevant impeachment articles. If articles of impeachment are approved, the House chooses managers to present the matter to the Senate. The Chairman of the House Managers then presents the articles of impeachment to the Senate and requests that the body order the appearance of the accused. The House Managers typically act as prosecutors in the Senate trial. The House has impeached nineteen individuals: fifteen federal judges, one Senator, one Cabinet member, and two Presidents. The consensus reflected in these proceedings is that impeachment may serve as a means to address misconduct that does not necessarily give rise to criminal sanction. According to congressional sources, the types of conduct that constitute grounds for impeachment in the House appear to fall into three general categories: (1) improperly exceeding or abusing the powers of the office; (2) behavior incompatible with the function and purpose of the office; and (3) misusing the office for an improper purpose or for personal gain. Consistent with scholarship on the scope of impeachable offenses, congressional materials have cautioned that the grounds for impeachment "do not all fit neatly and logically into categories" because the remedy of impeachment is intended to "reach a broad variety of conduct by officers that is both serious and incompatible with the duties of the office." While successful impeachments and convictions of federal officials represent some clear guideposts for what constitutes impeachable conduct, impeachment processes that do not result in a final vote for impeachment and removal also may influence the understanding of Congress, executive and judicial branch officials, and the public over what constitutes an impeachable offense. A prominent example involves the first noteworthy attempt at a presidential impeachment, aimed at John Tyler in 1842. At the time, the presidential practice had generally been to reserve vetoes for constitutional, rather than policy, disagreements with Congress. Following President Tyler's veto of a tariff bill on policy grounds, the House endorsed a select committee report condemning President Tyler and suggesting that he might be an appropriate subject for impeachment proceedings. The possibility apparently ended when the Whigs, who had led the movement to impeach, lost their House majority in the midterm elections. In the years following the aborted effort to impeach President Tyler, Presidents have routinely used their veto power for policy reasons. This practice is generally seen as an important separation of powers limitation on Congress's ability to pass laws rather than a potential ground for impeachment. Likewise, although President Richard Nixon resigned before impeachment proceedings were completed in the House, the approval of three articles of impeachment by the House Judiciary Committee against him may inform lawmakers' understanding of conduct that constitutes an impeachable offense. The approved impeachment articles included allegations that President Nixon obstructed justice by using the office of the presidency to impede the investigation into the break-in of the Democratic National Committee headquarters at the Watergate Hotel and Office Building and authorized a cover-up of the activities that were being investigated. President Nixon was alleged to have abused the power of his office by using federal agencies to punish political enemies and refusing to cooperate with the Judiciary Committee's investigation. While no impeachment vote was taken by the House, the Nixon experience nevertheless established what some would call the quintessential case for impeachmentâa serious abuse of the office of the presidency that undermined the office's integrity. That said, one must be cautious in extrapolating wide-ranging lessons from the lack of impeachment proceedings in the House. Specific behavior not believed to constitute an impeachable offense in prior contexts might be considered impeachable in a different set of circumstances. Moreover, given the varied contextual permutations, the full scope of impeachable behavior resists specification, and historical precedent may not always serve as a useful guide to whether conduct is grounds for impeachment. For instance, no President has been impeached for abandoning the office and refusing to govern. That this event has not occurred, however, hardly proves that this behavior would not constitute an impeachable offense meriting removal from office. The Role of the Senate Historical Practice The Constitution grants the Senate sole authority "to try all impeachments." The Senate thus enjoys broad discretion in establishing procedures to be undertaken in an impeachment trial. For instance, in a lawsuit challenging the Senate's use of a trial committee to take and report evidence, the Supreme Court in Nixon v. United States unanimously ruled that the suit posed a nonjusticiable political question and was not subject to judicial resolution. The Court explained that the term "try" in the Constitution's provisions on impeachment was textually committed to the Senate for interpretation and lacked sufficient precision to enable a judicially manageable standard of review. In reaching this conclusion, the Court noted that the Constitution imposes three precise requirements for impeachment trials in the Senate: (1) Members must be under oath during the proceedings; (2) conviction requires a two-thirds vote; and (3) the Chief Justice must preside if the President is tried. Given these three clear requirements, the Court reasoned that the Framers "did not intend to impose additional limitations on the form of the Senate proceedings by the use of the word 'try.'" Thus, subject to these three clear requirements of the Constitution, the Senate enjoys substantial discretion in establishing its own procedures during impeachment trials. While the Senate determines for itself how to conduct impeachment proceedings, the nature and frequency of Senate impeachment trials largely hinge on the impeachment charges brought by the House. The House has impeached thirteen federal district judges, a judge on the Commerce Court, a Senator, a Supreme Court Justice, the secretary of an executive department, and two Presidents. But the Senate ultimately has only convicted and removed from office seven federal district judges and a Commerce Court judge. While this pattern obviously does not mean that Presidents or other civil officers are immune from removal based on impeachment, the Senate's acquittals may be considered to have precedential value when assessing whether particular conduct constitutes a removable offense. For instance, the first subject of an impeachment by the House involved a sitting U.S. Senator for allegedly conspiring to aid Great Britain's attempt to seize Spanish-controlled territory. The Senate voted to dismiss the charges in 1799, and no Member of Congress has been impeached since. The House also impeached Supreme Court Justice Samuel Chase, who was widely viewed by Jeffersonian Republicans as openly partisan for, among other things, misapplying the law. The Senate acquitted Justice Chase, establishing, at least for many, a general principle that impeachment is not an appropriate remedy for disagreement with a judge's judicial philosophy or decisions. Requirement of Oath or Affirmation The Constitution requires Senators sitting as an impeachment tribunal to take a special oath distinct from the oath of office that all Members of Congress must take. This requirement underscores the unique nature of the role the Senate plays in impeachment trials, at least in comparison to its normal deliberative functions. The Senate practice has been to require each Senator to swear or affirm that he will "do impartial justice according to the Constitution and laws." The oath was originally adopted by the Senate before proceedings in the impeachment of Senator Blount in 1798 and has remained largely unchanged since. Judgment in Cases of Impeachment While the Constitution authorizes the Senate, following an individual's conviction in an impeachment trial, to bar an individual from holding office in the future, the text of the Constitution does not make clear that a vote for disqualification from future office must be taken separately from the initial vote for conviction. Instead, the potential for a separate vote for disqualification has arisen through the historical practice of the Senate. The Senate did not choose to disqualify an impeached individual from holding future office until the Civil War era. Federal district judge West H. Humphreys took a position as a judge in the Confederate government but did not resign his seat in the U.S. government. The House impeached Humphreys in 1862. The Senate then voted unanimously to convict Judge Humphreys and separately voted to disqualify him from holding office in the future. Senate practice since the Humphreys case has been to require a simple majority vote to disqualify an individual from holding future office, rather than the supermajority required by the Constitution's text for removal, but it is unclear what justifies this result beyond historical practice. The Constitution also distinguishes the impeachment remedy from the criminal process, providing that an individual removed from office following impeachment "shall nevertheless be liable and subject to indictment." The Senate's power to convict and remove individuals from office, as well as to bar them from holding office in the future, thus does not overlap with criminal remedies for misconduct. Indeed, the unique nature of impeachment as a political remedy distinct from criminal proceedings ensures that "the most powerful magistrates should be amenable to the law." Rather than helping police violations of strictly criminal activity, impeachment is a "method of national inquest into the conduct of public men" for "the abuse or violation of some public trust." Impeachable offenses are those that "relate chiefly to injuries done immediately to the society itself." Put another way, the purpose of impeachment is to protect the public interest, rather than impose a punitive measure on an individual. This distinction was highlighted in the impeachment trial of federal district judge Alcee Hastings. Judge Hastings had been indicted for a criminal offense, but was acquitted. In 1988, the House impeached Hastings for much of the same conduct for which he had been indicted. Judge Hastings argued that the impeachment proceedings constituted "double jeopardy" because of his previous acquittal in a criminal proceeding. The Senate rejected his motion to dismiss the articles against him. The Senate voted to convict and remove Judge Hastings on eight articles, but it did not disqualify him from holding office in the future. Judge Hastings was later elected to the House of Representatives. History of Impeachment in Congress The Constitution provides that the President, Vice President, and all civil officers are subject to impeachment for "treason, bribery, or other high Crimes and Misdemeanors." The meaning of high crimes and misdemeanors, like the other provisions in the Constitution relevant to impeachment, is not primarily determined through the development of jurisprudence in the courts. Instead, the meaning of the Constitution's impeachment clauses is "liquidated" over time, or determined through historical practice. The Framers did not delineate with specificity the complete range of behavior that would merit impeachment, as the scope of possible "offenses committed by federal officers are myriad and unpredictable." According to one scholar, impeachments are sometimes "aimed at articulating, establishing, preserving, and protecting constitutional norms," or "'constructing' constitutional meaning and practices." At times, impeachment might be used to reinforce an existing norm, indicating that certain behavior continues to constitute grounds for removal; in others, it may be used to establish a new norm, setting a marker that signifies what practices are impeachable for the future. Examining the history of impeachment in Congress can thus illuminate the constitutional meaning of impeachment, including when Congress has established or reaffirmed a particular norm. Early Historical Practices (1789â1860) Congressional understanding of the scope of activities subject to impeachment and the potential persons who may be impeached was first put to the test during the Adams Administration. In 1797, letters sent to President Adams revealed a conspiracy by Senator William Blountâin violation of the U.S. government's policy of neutrality on the matter and the Neutrality Act âto organize a military expedition with the British to invade land in the American Southwest under Spanish control. The House voted to impeach Senator Blount on July 7, 1797, while the Senate voted to expel Senator William Blount the next day. Before impeaching Senator Blount, several House Members questioned whether Senators were "civil officers" subject to impeachment. But Samuel W. Dana of Connecticut argued that Members of Congress must be civil officers, because other provisions of the Constitution that mention offices appear to include holding legislative office. Despite already having voted to impeach Senator Blount, it was not until early in the next year that the House actually adopted specific articles of impeachment against him. At the Senate impeachment trial in 1799, Blount's attorneys argued that impeachment was improper because Blount had already been expelled from his Senate seat and had not been charged with a crime. But the primary issue of debate was whether Members of Congress qualified as civil officers subject to impeachment. The House prosecutors argued that under the American system, as in England, virtually anyone was subject to impeachment. The defense responded that this broad interpretation of the impeachment power would enable Congress to impeach state officials as well as federal, upending the proper division of federal and state authorities in the young Republic. The Senate voted to defeat a resolution that declared Blount was a "civil officer" and therefore subject to impeachment. The Senate ultimately voted to dismiss the impeachment articles brought against Blount because it lacked jurisdiction over the matter, although the impeachment record does not reveal the precise basis for this conclusion. In any event, the House has not impeached a Member of Congress since. The first federal official to be impeached and removed from office was John Pickering, a federal district judge. The election of President Thomas Jefferson in 1800, along with Jeffersonian Republican majorities in both Houses of Congress, signaled a shift from Federalist party control of government. Much of the federal judiciary at this early stage of the Republic were members of the Federalist party, and the new Jeffersonian Republican majority strongly opposed the Federalist-controlled courts. John Pickering was impeached by the House of Representatives in 1803 and convicted by the Senate on March 12, 1804. The circumstances of Judge Pickering's impeachment are somewhat unique as it appears that the judge had been mentally ill for some time, although the articles of impeachment did not address Pickering's mental faculties but instead accused him of drunkenness, blasphemy on the bench, and refusing to follow legal precedent. Judge Pickering did not appear at his trial, and Senator John Quincy Adams apparently served as a defense counsel. Following debate in a closed session, the Senate voted to permit evidence of Judge Pickering's insanity, drunkenness, and behavior on the bench. The Senate also rejected a resolution to disqualify three Senators, who were previously in the House and had voted to impeach Judge Pickering, from participating in the impeachment trial. The Senate voted to convict Judge Pickering guilty as charged, but the articles did not explicitly specify that any of Pickering's behavior constituted a high crime or misdemeanor. Objections to the framing of the question at issue caused several Senators to withdraw from the trial. On the same day the Senate convicted Judge Pickering, the House of Representatives impeached Supreme Court Justice Samuel Chase. Like the impeachment trial of Judge Pickering, the proceedings occurred following the election of President Thomas Jefferson and amid intense conflict between the Federalists and Jeffersonian Republicans. Justice Chase was viewed by Jeffersonian Republicans as openly partisan, and in fact the Justice openly campaigned for Federalist John Adams in the presidential election of 1800. Republicans also took issue with Justice Chase's aggressive approach to jury instructions in Sedition Act prosecutions. The eight articles of impeachment accused him of acting in an "arbitrary, oppressive, and unjust" manner at trial, misapplying the law, and expressing partisan political views to a grand jury. The Senate trial began on February 4, 1805. Both the House Managers and defense counsel for Justice Chase presented witnesses detailing the Justice's behavior. While some aspects of the dispute focused on whether Justice Chase took certain actions, the primary conflict centered on whether his behavior was impeachable. Before reaching a verdict, the Senate approved a motion from Senator James Bayard, a Federalist from Delaware, that the underlying question be whether Justice Chase was guilty of high crimes and misdemeanors, rather than guilty as charged. Of the eight articles, a majority of Senators voted to convict on three, while the remaining five did not muster a majority for conviction. But the Senate vote ultimately fell short of the necessary two-thirds majority to secure a conviction on any of the articles. The trial raised several questions that have recurred throughout the history of impeachments. For example, is impeachment limited to criminal acts, or does it extend to noncriminal behavior? The opposing sides in the Chase case took differing views on this matter, as they would in later impeachments to come. Due in part to the charged political atmosphere of the historical context, the attempted impeachment of Justice Chase has also come to represent an important limit on the scope of the impeachment remedy. Commentators have interpreted the acquittal of Justice Chase as establishing that impeachment does not extend to congressional disagreement with a judge's opinions or judicial philosophy. At least some Senators who voted to acquit did not consider the alleged offenses as rising to the level of impeachable behavior. By the time of the next impeachment in 1830, both houses of Congress were controlled by Jacksonian Democrats, and the federal courts were unpopular with Congress and the public. The House of Representatives impeached James Peck, a federal district judge, for abusing his judicial authority. The sole article accused the judge of holding an attorney in contempt for publishing an article critical of Peck and barring the attorney from practicing law for eighteen months. The context surrounding Judge Peck's actions involved disputes over French and Spanish land grant titles following the transfer of land in the Louisiana territory from French to U.S. control. Shortly after Missouri was admitted to the United States as part of the Missouri Compromise in 1821, Judge Peck decided a land rights case against the claimants in favor of the United States. The attorney for the plaintiffs wrote an article critical of the decision in a local paper. Judge Peck held the attorney in contempt, sentenced him to jail for twenty-four hours, and barred him from practicing law for eighteen months. The House impeached Judge Peck by a wide margin. Of central concern during the Senate trial were the limits of a judge's common law contempt power, a matter that appeared to be in dispute. The Senate ultimately acquitted Judge Peck, with roughly half of the Jacksonian Democrats voting against conviction. Shortly thereafter, Congress passed a law reforming and defining the scope of the judicial contempt power. Finally, in the midst of the Civil War, federal district judge West H. Humphreys was appointed to a position as a judge in the Confederate government, but he did not resign as a U.S. federal judge. In 1862, the House impeached and the Senate convicted Judge Humphreys for joining the Confederate government and abandoning his position. As in the trial of Judge Pickering previously, Judge Humphreys did not attend the proceedings. Unlike in the case of Judge Pickering, however, no defense was offered in the impeachment trial of Judge Humphreys. Impeachment of Andrew Johnson The impeachment and trial of President Andrew Johnson took place in the shadow of the Civil War and the assassination of President Abraham Lincoln. President Johnson was a Democrat and former slave owner who was the only southern Senator to remain in his seat when the South seceded from the Union. President Lincoln, a Republican, appointed Johnson military governor of Tennessee in 1862, and Johnson was later selected as Lincoln's second-term running mate on a "Union" ticket. Given these unique circumstances, President Johnson lacked both a party and geographic power base when in office, which likely isolated him when he assumed the presidency following the assassination of President Lincoln. The majority Republican Congress and President Johnson clashed over, among other things, Reconstruction policies implemented in the former slave states and control over officials in the executive branch. President Johnson vetoed twenty-one bills while in office, compared to thirty-six vetoes by all prior Presidents. Congress overrode fifteen of Johnson's vetoes, compared to just six with prior Presidents. On March 2, 1867, Congress reauthorized, over President Johnson's veto, the Tenure of Office Act, extending its protections for all officeholders. In essence, the Act provided that all federal officeholders subject to Senate confirmation could not be removed by the President except with Senate approval, although the reach of this requirement to officials appointed by a prior administration was unclear. Congressional Republicans apparently anticipated the possible impeachment of President Johnson when drafting the legislation; Republicans already knew of President Johnson's plans to fire Secretary of War Edwin Stanton, and the Act provided that a violation of its terms constituted a "high misdemeanor." President Johnson then fired Secretary Stanton without the approval of the Senate. Importantly, his Cabinet unanimously agreed that the new restrictions on the President's removal power imposed by the Tenure of Office Act were unconstitutional. Shortly thereafter, on February 24, 1868, the House voted to impeach President Johnson. The impeachment articles adopted by the House against President Johnson included defying the Tenure of Office Act by removing Stanton from office and violating (and encouraging others to violate) the Army Appropriations Act. One article of impeachment also accused the President of making "utterances, declarations, threats, and harangues" against Congress. The Senate appointed a committee to recommend rules of procedure for the impeachment trial which then were adopted by the Senate, including a one-hour time limit for each side to debate questions of law that would arise during the trial. Chief Justice Salmon P. Chase presided over the trial and was sworn in by Associate Justice Samuel Nelson. During the swearing-in of the individual Senators, the body paused to debate whether Senator Benjamin Wade of Indiana, the president pro tempore of the Senate, was eligible to participate in the trial. Because the office of the Vice President was empty, under the laws of succession at that time Senator Wade would assume the presidency upon a conviction of President Johnson. Ultimately, the Senator who raised this point, Thomas Hendricks of Indiana, withdrew the issue and Senator Wade was sworn in. An important point of contention at the trial was whether the Tenure of Office Act protected Stanton at all because of his appointment by President Lincoln, rather than President Johnson. Counsel for President Johnson argued that impeachment for violating a statute whose meaning was unclear was inappropriate, and the statute barring removal of the Secretary of War was an unconstitutional intrusion into the President's authority under Article II. The Senate failed to convict President Johnson with a two-thirds majority by one vote on three articles, and it failed to vote on the remaining eight. But reports suggest that several Senators were prepared to acquit if their votes were needed. Seven Republicans voted to acquit; of those Senators, some thought it questionable whether the Tenure of Office Act applied to Stanton and believe it was improper to impeach a President for incorrectly interpreting an arguably ambiguous law. The implications of the acquittal of President Johnson are difficult to encapsulate neatly. Some commentators have concluded that the failure to convict President Johnson coincides with a general understanding that while impeachment is appropriate for abuses of power or violations of the public trust, it does not pertain to political or policy disagreements with the President, no matter how weighty. Of course, it bears mention that by the time of the Senate trial Johnson was in the last year of his Presidency, was not going to receive a nomination for President by either major political party for the next term, and appears to have promised in private to appoint a replacement for Stanton that could be confirmable. More broadly, the Johnson impeachment also represented a larger struggle between Congress and the President over the scope of executive power, one that arguably reconstituted their respective roles following the Civil War presidency of Abraham Lincoln. Postbellum Practices (1865â1900) The postbellum experience in American history saw a variety of government officials impeached on several different grounds. These examples provide important principles that guide the practice of impeachment through the present day. For example, the Senate has not always conducted a trial following an impeachment by the House. In 1873, the House impeached federal district judge Mark. H. Delahay for, among other things, drunkenness on and off the bench. The impeachment followed an investigation by a subcommittee of the House Judiciary Committee into his conduct. Following the House vote on impeachment, Judge Delahay resigned before written impeachment articles were drawn up, and the Senate did not hold a trial. The impeachment of Judge Delahay shows that the scope of impeachable behavior is not limited to strictly criminal behavior; Congress has been willing to impeach individuals for behavior that is not indictable, but still constitutes an abuse of an individual's power and duties. This period of American history was fraught with partisan conflict over Reconstruction. Besides President Johnson, a number of other individuals were investigated by Congress during this time for purposes of impeachment. For example, in 1873, the House voted to authorize the House Judiciary Committee to investigate the behavior of Edward H. Durrell, federal district judge for Louisiana. A majority of the House Judiciary Committee reported in favor of impeaching Judge Durell for corruption and usurpation of power, including interfering with the state's election. Judge Durrell resigned on December 1, 1874, and the House discontinued impeachment proceedings. The first and only time a Cabinet-level official was impeached occurred during the presidential administration of Ulysses S. Grant. Grant's Secretary of War, William W. Belknap, was impeached in 1876 for allegedly receiving payments in return for appointing an individual to maintain a trading post in Indian territory. Belknap resigned two hours before the House unanimously impeached him, but the Senate still conducted a trial in which Belknap was acquitted. During the trial, upon objection by Belknap's counsel that the Senate lacked jurisdiction because Belknap was now a private citizen, the Senate voted 37-29 in favor of jurisdiction. A majority of Senators voted to convict Belknap, but no article mustered a two-thirds majority, resulting in acquittal. A number of Senators voting to acquit indicated that they did so because the Senate lacked jurisdiction over an individual no longer in office. Notably, although bribery is explicitly included as an impeachable offense in the Constitution, the impeachment articles brought against Belknap instead charged his behavior as constituting high crimes and misdemeanors. Bribery was mentioned at the Senate trial, but it was not specifically referenced in the impeachment articles themselves. Early Twentieth Century Practices The twentieth century saw further development of the scope of conduct considered by Congress to be impeachable, including the extent to which noncriminal conduct can constitute impeachable behavior and the proper role of a federal judge. The question of judicial review of impeachments also received its first treatment in the federal courts. The question of whether Congress can designate particular behavior as a "high crime or misdemeanor" by statute arose in the impeachment of Charles Swayne, a federal district judge for the Northern District of Florida, during the first decade of the twentieth century. A federal statute provided that federal district judges live in their districts and that anyone violating this requirement was "guilty of a high misdemeanor." Judge Swayne's impeachment originated from a resolution passed by the Florida legislature requesting the state's congressional delegation to recommend an investigation into his behavior. The procedures followed by the House in impeaching Judge Swayne were somewhat unique. First, the House referred the impeachment request to the Judiciary Committee for investigation. Following this investigation, the House voted to impeach Judge Swayne based on the report prepared by the committee. The committee was then tasked with preparing articles of impeachment to present to the Senate. The House then voted again on these individual articles, each of which received less support than the single prior impeachment vote had received. The impeachment articles accused Judge Swayne of a variety of offenses, including misusing the office, abusing the contempt power, and living outside his judicial district. At the trial in the Senate, Judge Swayne essentially admitted to certain accused behavior, although his attorneys did dispute the residency charge, and Swayne instead argued that his actions were not impeachable. The Senate vote failed to convict Judge Swayne on any of the charges brought by the House. The impeachability of certain noncriminal behavior for federal judges was firmly established by the impeachment of Judge Robert W. Archbald in 1912. Judge Archbald served as a federal district judge before being appointed to the short-lived U.S. Commerce Court, which was created to review decisions of the Interstate Commerce Commission. He was impeached by the House for behavior occurring both as a federal district judge and as a judge on the Commerce Court. The impeachment articles accused Judge Archbald of, among other things, using his position as a judge to generate profitable business deals with potential future litigants in his court. This behavior did not violate any criminal statute and did not appear to violate any laws regulating judges. Judge Archbald argued at trial that noncriminal conduct was not impeachable. The Senate voted to convict him on five articles and also voted to disqualify him from holding office in the future. Four of those articles centered on behavior that occurred while Judge Archbald sat on the Commerce Court, whereas the fifth described his conduct over the course of his career. In the 1920s, a series of corruption scandals swirled around the administration of President Warren G. Harding. Most prominently, the Teapot Dome Scandal, which involved the noncompetitive lease of government land to oil companies, implicated many government officials and led to resignations and the criminal conviction and incarceration of a Cabinet-level official. The Secretary of the Navy, at the time Edwin Denby, was entrusted with overseeing the development of oil reserves that had recently been located. The Secretary of the Interior, Albert Fall, convinced Denby that the Interior Department should assume responsibility for two of the reserve locations, including in Teapot Dome, Wyoming. Secretary Fall then leased the reserves to two of his friends, Harry F. Sinclair and Edward L. Doheny. Revelations of the lease without competitive bidding launched a lengthy congressional investigation that sparked the eventual criminal conviction of Fall for bribery and conspiracy and Sinclair for jury tampering. President Harding, however, died in 1923, before congressional hearings began. The affair also generated significant judicial decisions examining the scope of Congress's investigatory powers. One aspect of the controversy included an impeachment investigation into the decisions of then-Attorney General Harry M. Daugherty. In 1922, the House of Representatives referred a resolution to impeach Daugherty for a variety of activities, including his failure to prosecute those involved in the Teapot Dome Scandal, to the House Judiciary Committee. The House Judiciary Committee eventually found there was not sufficient evidence to impeach Daugherty. But in 1924, a Senate special committee was formed to investigate similar matters. That investigation spawned allegations of many improper activities in the Justice Department. Daugherty resigned on March 28, 1924. In 1926, federal district judge George W. English was impeached for a variety of alleged offenses, including (1) directing a U.S. marshal to gather a number of state and local officials into court in an imaginary case in which Judge English proceeded to denounce them; (2) threatening two members of the press with imprisonment without sufficient cause; and (3) showing favoritism to certain litigants before his court. Judge English resigned before a trial in the Senate occurred; and the Senate dismissed the charges without conducting a trial in his absence. Federal district judge Harold Louderback was impeached in 1933 for showing favoritism in the appointment of bankruptcy receivers, which were coveted positions following the stock market crash of 1929 and the ensuing Depression. The House authorized a subcommittee to investigate, which held hearings and recommended to the Judiciary Committee that Judge Louderback be impeached. The Judiciary Committee actually voted against recommending impeachment, urging censure of Judge Louderback instead, but permitted the minority report that favored impeachment to be reported to the House together with the majority report. The full House voted to impeach anyway, but the Senate failed to convict him. Shortly thereafter, the House impeached federal district judge Halsted L. Ritter for showing favoritism in and profiting from appointing receivers in bankruptcy proceedings; practicing law while a judge; and failing to fully report his income on his tax returns. The Senate acquitted Judge Ritter on each individual count alleging specific behavior, but convicted him on the final count which referenced the previous articles, and charged him with bringing his court into disrepute and undermining the public's confidence in the judiciary. Congress's impeachment of Judge Ritter was the first to be challenged in court. Judge Ritter sued in the Federal Court of Claims seeking back pay, arguing that the charges brought against him were not impeachable under the Constitution and that the Senate improperly voted to acquit on six specific articles but to convict on a single omnibus article. In rejecting Judge Ritter's suit, the court held that the Senate has exclusive jurisdiction over impeachments and courts lack authority to review the Senate's verdict. Effort to Impeach President Richard Nixon The impeachment investigation and ensuing resignation of President Richard Nixon stands out as a profoundly important experience informing the standard for the impeachment of Presidents. Although President Nixon was never impeached by the House or subjected to a trial in the Senate, his conduct exemplifies for many authorities, scholars, and members of the public the quintessential case of impeachable behavior in a President. Less than two years after a landslide reelection as President, Richard Nixon resigned following the House Judiciary Committee's adoption of three articles of impeachment against him. The circumstances surrounding the impeachment of President Nixon were sparked by the arrest of five men for breaking into the Democratic National Committee Headquarters at the Watergate Hotel and Office Building. The arrested men were employed by the committee to Re-Elect the President (CRP), a campaign organization formed to support President Nixon's reelection. In the early summer of 1973, Attorney General Elliot Richardson appointed Archibald Cox as a special prosecutor to investigate the connection between the five burglars and CRP. Likewise, the Senate Select Committee on Presidential Campaign Activities began its own investigation. After President Nixon fired various staffers allegedly involved in covering up the incident, he spoke on national television disclaiming knowledge of the cover-up. But the investigations uncovered evidence that President Nixon was involved, that he illegally harassed his enemies through, among other things, the use of tax audits, and that the men arrested for the Watergate break-inâthe "plumbers unit," because they were used to "plug leaks" considered damaging to the Nixon Administrationâhad committed burglaries before. Eventually a White House aide revealed that the President had a tape recording system in his office, raising the possibility that many of Nixon's conversations about the Watergate incident were recorded. The President refused to hand over such tapes to the special prosecutor or Congress. In his capacity as special prosecutor, Cox then subpoenaed tapes of conversations in the Oval Office on Saturday, October 20, 1973. This sparked the sequence of events commonly known as the Saturday Night Massacre. In response to the subpoena, President Nixon ordered Attorney General Elliot Richardson to fire Special Prosecutor Cox. Richardson refused and resigned. Nixon ordered Deputy Attorney General William D. Ruckelshaus to fire the special prosecutor, but Ruckelshaus also refused to do so and resigned. Solicitor General Robert Bork, in his capacity as Acting Attorney General, then fired the special prosecutor. Nixon eventually agreed to deliver some of the subpoenaed tapes to the judge supervising the grand jury. The Justice Department appointed Leon Jaworski to replace Cox as special prosecutor. The House Judiciary Committee began an official investigation of the Watergate issue and commenced impeachment hearings in April 1974. On March 1, 1974, a grand jury indicted seven individuals connected to the larger Watergate investigation and named the President as an unindicted coconspirator. On April 18, a subpoena was issued, upon the motion of the special prosecutor, by the United States District Court for the District of Columbia requiring the production of tapes and various items relating to meetings between the President and other individuals. Following a challenge to the subpoena in district court, the Supreme Court reviewed the case. On July 24, 1974, the Supreme Court affirmed the district court's order. In late July, following its investigation and hearings, the House Judiciary Committee voted to adopt three articles of impeachment against President Nixon. The first impeachment article alleged that the President obstructed justice by attempting to impede the investigation into the Watergate break-in. The second charged the President with abuse of power for using federal agencies to harass his political enemies and authorizing burglaries of private citizens who opposed the President. The third article accused the President of refusing to cooperate with the Judiciary Committee's investigation. The committee considered but rejected two proposed articles of impeachment. The first rejected article accused the President of concealing from Congress the bombing operations in Cambodia during the Vietnam conflict. This article was rejected for two primary reasons: some Members thought (1) the President was performing his constitutional duty as Commander-in-Chief and (2) Congress was given sufficient notice of these operations. The second rejected article concerned receiving compensation in the form of government expenditures at President Nixon's private properties in California and Floridaâwhich allegedly constituted an emolument from the United States in violation of Article II, Section 1, Clause 7 of the Constitutionâand tax evasion. Those Members opposed to the portion of the charge alleging receipt of federal funds argued that most of the President's expenditures were made pursuant to a request from the Secret Service; that there was no direct evidence the President knew at the time that the source of these funds was public, rather than private; and that this conduct failed to rise to the level of an impeachable offense. Some Members opposed to the tax evasion charge argued that the evidence was insufficient to impeach; others that tax fraud is not the type of behavior "at which the remedy of impeachment is directed." President Nixon resigned on August 9, 1974, before the full House voted on the articles. The lessons and standards established by the Nixon impeachment investigation and resignation are disputed. On the one hand, the behavior alleged in the approved articles against President Nixon is arguably a "paradigmatic" case of impeachment, constituting actions that are almost certainly impeachable conduct for the President. On the other hand, the significance of the House Judiciary Committee's rejection of certain impeachment articles is unclear. In particular, whether conduct considered unrelated to the performance of official duties, such as the rejected article alleging tax evasion, can constitute an impeachable offense for the President is disputed. During the later impeachment of President Bill Clinton, for example, the majority and minority reports of the House Judiciary Committee on the committee's impeachment recommendation took different views on when conduct that might traditionally be viewed as private or unrelated to the functions of the presidency constitutes an impeachable offense. The House Judiciary Committee report that recommended articles of impeachment argued that perjury by the President was an impeachable offense, even if committed with regard to matters outside his official duties. In contrast, the minority views in the report argued that impeachment was reserved for "conduct that constitutes an egregious abuse or subversion of the powers of the executive office." The minority noted that the Judiciary Committee had rejected an article of impeachment against President Nixon alleging that he committed tax fraud, mainly because that "related to the President's private conduct, not to an abuse of his authority as President." Impeachment of President Bill Clinton The impeachment of President Bill Clinton stemmed from an investigation that originally centered on financial transactions occurring years before President Clinton took federal office. Attorney General Janet Reno appointed Robert Fiske Jr. as a special prosecutor in January 1994 to investigate the dealings of President Clinton and his wife with the "Whitewater" real estate development during the President's tenure as attorney general and then governor of Arkansas. Following the reauthorization of the Independent Counsel Act in June, the Special Division of the United States Court of Appeals for the District of Columbia Circuit replaced Fiske in August with Independent Counsel Kenneth W. Starr, a former Solicitor General in the George H.W. Bush Administration and federal appellate judge. During the Whitewater investigation, Paula Jones, an Arkansas state employee, filed a civil suit against President Clinton in May 1994 alleging that he sexually harassed her in 1991 while governor of Arkansas. Lawyers for Jones deposed President Clinton at the White House and asked questions about the President's relationship with staffers, including an intern named Monica Lewinsky. Independent Counsel Starr received information alleging that Lewinsky had tried to influence the testimony of a witness in the Jones litigation, along with tapes of recordings between Monica Lewinsky and former White House employee Linda Tripp. Tripp had recorded conversations between herself and Lewinsky about Lewinsky's relationship with the President and hope of obtaining a job outside the White House. Starr presented this information to Attorney General Reno. Reno petitioned the Special Division of the United States Court of Appeals for the District of Columbia Circuit to expand the independent counsel's jurisdiction, and the Special Division issued an order on January 16, 1998, permitting the expansion of Starr's investigation into President Clinton's response to the Paula Jones case. Over the course of the spring and summer a grand jury investigated whether President Clinton committed perjury in his response to the Jones suit and whether he obstructed justice by encouraging others to lie about his relationship with Lewinsky. President Clinton appeared by video before the grand jury and testified about the Lewinsky relationship. Independent Counsel Starr referred his report to the House of Representatives on September 9, 1998, noting that under the independent counsel statute, his office was required to do so because President Clinton engaged in behavior that might constitute grounds for impeachment. The House then voted to open an impeachment investigation into President Clinton's behavior, released the Starr report publicly, and the House Judiciary Committee voted to release the tape of the President's grand jury testimony. Although the House Judiciary Committee had already conducted several hearings on the possibility of impeachment, the committee did not engage in an independent fact-finding investigation or call any live witnesses to testify about the President's conduct. Instead, the Judiciary Committee largely relied on the Starr report to inform the committee's own report recommending impeachment, released December 16, 1998. The committee report recommended impeachment of President Clinton on four counts. The first article alleged that President Clinton perjured himself when testifying to a criminal grand jury about his response to the Jones lawsuit and his relationship with Lewinsky. The second alleged that the President committed perjury during a deposition in the civil suit brought against him by Paula Jones. The third alleged that President Clinton obstructed justice in the suit brought against him by Jones and in the investigation by Independent Counsel Starr. The fourth alleged that the President abused his office by refusing to respond to certain requests for admission from Congress and making untruthful responses to Congress during the investigation into his behavior. On December 19, 1998, in a lame-duck session, the House voted to approve the first and third articles. After trial in the Senate, the President was acquitted on February 12, 1999. Statements of the Senators entered into the record on the impeachment reflect disagreement about what constitutes an impeachable offense for the President and whether Clinton's behavior rose to this level. For instance, Republican Senator Richard G. Lugar voted to convict on both articles, noting in his statement the gravity of the "presidential misconduct at issue" and arguing that the case was "not about adultery." Instead, it centered on the obstruction of justice that occurred when the President "lied to a federal grand jury and worked to induce others to give false testimony." For Senator Lugar, the President ultimately "betrayed [the] trust" of the nation through his actions and should be removed from office. In contrast, Republican Senator Olympia Snowe voted to acquit on both articles. In her statement, she admonished the President's "lowly conduct," but concluded there was "insufficient evidence of the requisite untruth and the requisite intent" to establish perjury with regard to the concealment of his relationship with a subordinate; and the perjury charges regarding his relationship with a subordinate concerned statements that were largely "ruled irrelevant and inadmissible in the underlying civil case" which "undermine[d] [their] materiality." She also stated that she thought one of the allegations in the second impeachment article had been provenâthe President's attempt to influence the testimony of his personal assistantâbut that the proper remedy for this was a criminal prosecution. Indeed, a number of Senators indicated that they did not consider the President's behavior to constitute an impeachable offense because the President's conduct was not of a distinctly public nature. For instance, Democratic Senator Byron L. Dorgan voted to acquit on both articles. He described Clinton's behavior as "reprehensible," but concluded that it did not constitute "a grave danger to the nation." The significance of the Clinton impeachment experience to informing the understanding of what constitutes an impeachable offense is thus open to debate. One might point to the impeachment articles recommended by the House Judiciary Committee, but not adopted by the full House, as concerning conduct insufficient to establish an impeachable offense. Specifically, the House declined to impeach President Clinton for his alleged perjury in a civil suit against him as well as for alleged untruthful statements made in response to congressional requests. Likewise, some scholars have pointed to the acquittal in the Senate of both impeachment articles brought by the House as evidence that the Clinton impeachment articles lacked merit or were adopted on purely partisan grounds. The statements of some Senators mentioned above, reasoning that Clinton's conduct did not qualify as an impeachable offense, may support arguments that impeachment is not an appropriate tool to address at least some sphere of conduct by a President not directly tied to his official duties. Even so, the failure to convict President Clinton might instead simply reflect the failure of the House Managers to prove their case, or simply bare political calculation by some Senators. Ultimately, the lessons of the Clinton impeachment experience will be revealed in the future practice of Congress when assessing whether similar conduct is impeachable if committed by future Presidents. Contemporary Judicial Impeachments Congress has impeached federal judges with comparatively greater frequency in recent decades, and some of these impeachments appear to augur important consequences for the practice in the future. In particular, within three years in the 1980s the House voted to impeach three federal judges, each occurring after a criminal prosecution of the judge. One impeached federal judge was not barred from future office and later was elected to serve in the House of Representatives, the body that had earlier impeached him. Another judge challenged the adequacy of his impeachment trial in a case that ultimately reached the Supreme Court, which ruled that the case was nonjusticiable. The House of Representatives impeached federal district judge Harry E. Claiborne in 1986, following his criminal conviction and imprisonment for providing false statements on his tax returns. Despite his incarceration, Judge Claiborne did not resign his seat and continued to collect his judicial salary. The House unanimously voted in favor of four articles of impeachment against him. The first two articles against Judge Claiborne simply laid out the underlying behavior that had led to his criminal prosecution. The third article "rest[ed] entirely on the conviction itself" and stood for the principle that "by conviction alone he is guilty of . . . 'high crimes' in office." The fourth alleged that Judge Claiborne's actions brought the "judiciary into disrepute, thereby undermining public confidence in the integrity and impartiality of the administration of justice" which amounted to a "misdemeanor." The Senate impeachment trial of Judge Claiborne was the first in which that body used a committee to take evidence. Rather than conducting a full trial with the entire Senate, the committee took testimony, received evidence, and voted on pretrial motions regarding evidence and discovery. The committee then reported a transcript of the proceedings to the full Senate, without recommending whether impeachment was warranted. The Senate voted to convict Judge Claiborne on the first, second, and fourth articles. In 1988, the House impeached a federal district judge who had been indicted for a criminal offense but was acquitted. Judge Alcee L. Hastings was acquitted in a criminal trial where he was accused of conspiracy and obstruction of justice for soliciting a bribe in return for reducing the sentences of two felons. After his acquittal, a judicial committee investigated the case and concluded that Judge Hastings's behavior might merit impeachment. The Judicial Conference (a national entity composed of federal judges that reviews investigations of judges and may refer recommendations to Congress) eventually referred the matter to the House of Representatives, noting that impeachment might be warranted. The House of Representatives approved seventeen impeachment articles against Judge Hastings, including for perjury, bribery, and conspiracy. Judge Hastings objected to the impeachment proceedings as "double jeopardy" because he had already been acquitted in a previous criminal proceeding. The Senate, however, rejected his motion to dismiss the articles against him. The Senate again used a trial committee to receive evidence. That body voted to convict and remove Judge Hastings on eight articles, but did not vote to disqualify him from holding future office. Judge Hastings was later elected to the House of Representatives. Before the trial of Judge Hastings even began in the Senate, the House impeached Judge Walter L. Nixon. Judge Nixon was convicted in a criminal trial of perjury to a grand jury and imprisoned. Following an investigation by the House Judiciary Committee's Subcommittee on Civil and Constitutional Rights, the Judiciary Committee reported a resolution to the full House recommending impeachment on three articles. The full House approved three articles of impeachment, the first two involving lying to a grand jury and the last for undermining the integrity of and bringing disrepute on the federal judicial system. The Senate convicted Judge Nixon on the first two articles but acquitted him on the third. Judge Nixon challenged the Senate's use of a committee to receive evidence and conduct hearings. He sued in federal court arguing that the use of a committee, rather than the full Senate, to take evidence violated the Constitution's provision that the Senate "try" all impeachments. The Supreme Court ultimately rejected his challenge in Nixon v. United States , ruling that the issue was a nonjusticiable political question because the Constitution grants the power to try impeachments "in the Senate and nowhere else"; and the word "try" "lacks sufficient precision to afford any judicially manageable standard of review of the Senate's actions. " As a result of this decision, impeachment proceedings appear largely immune from judicial review. Two judges have been impeached in the twenty-first century. As with the three impeachments of judges in the 1980s, the first followed a criminal indictment. District Judge Samuel B. Kent pleaded guilty to obstruction of justice for lying to a judicial investigation into alleged sexual misconduct and was sentenced to thirty-three months in prison. The House impeached Judge Kent for sexually assaulting two court employees, obstructing the judicial investigation of his behavior, and making false and misleading statements to agents of the Federal Bureau of Investigation about the activity. Judge Kent resigned his office before a Senate trial. The Senate declined to conduct a trial following his resignation. Although the four previous impeachments of federal judges followed criminal proceedings, the most recent impeachment did not. In 2010, Judge G. Thomas Porteous Jr. was impeached for participating in a corrupt financial relationship with attorneys in a case before him, and engaging in a corrupt relationship with bail bondsmen whereby he received things of value in return for helping the bondsman develop corrupt relationships with state court judges. Judge Porteous was the first individual impeached by the House and convicted by the Senate based in part on conduct occurring before he began his tenure in federal office. The first and second articles of impeachment each alleged misconduct by Judge Porteous during both his state and federal judgeships. The fourth alleged that Judge Porteous made false statements to the Senate and FBI in connection with his nomination and confirmation to the U.S. District Court for the Eastern District of Louisiana. Judge Porteous's filings in answer to the articles of impeachment argued that conduct occurring before he was appointed to the federal bench cannot constitute impeachable behavior. The House Managers' replication, or reply to this argument, argued that Porteous's contention had no basis in the Constitution. On December 8, 2010, he was convicted on all four articles, removed from office, and disqualified from holding future federal offices. The first article, which included conduct occurring before he was a federal judge, was affirmed 96-0. The second article, approved 90-6, alleged that he lied to the Senate in his confirmation hearing to be a federal judge. A number of Senators explicitly adopted the reasoning supplied by expert witness testimony before the House that the crucial issue over the appropriateness of impeachment was not the timing of the misconduct, but "whether Judge Porteous committed such misconduct and whether such misconduct demonstrates the lack of integrity and judgment that are required in order for him to continue to function" in office. Senator Claire McCaskill explained in her statement entered in the Congressional Record that Judge Porteous's argument for an "absolute, categorical rule that would preclude impeachment and removal for any pre-federal conduct" should be rejected. "That should not be the rule," she noted, "any more than allowing impeachment for any pre-federal conduct that is entirely unrelated to the federal office." Senator Patrick Leahy agreed, noting that he "reject[ed] any notion of impeachment immunity [for pre-federal behavior] if misconduct was hidden, or otherwise went undiscovered during the confirmation process, and it is relevant to a judge's ability to serve as an impartial arbiter." Recurring Questions About Impeachment Who Counts as an Impeachable Officer? The Constitution explicitly makes "[t]he President, Vice President and all civil Officers of the United States" subject to impeachment and removal. Which officials are considered "civil Officers of the United States" for purposes of impeachment is a significant constitutional question that remains partly unresolved. Based on both the constitutional text and historical precedent, federal judges and Cabinet-level officials are "civil Officers" subject to impeachment, while military officers, state and local officials, purely private individuals, and Members of Congress likely are not. A question that neither the Constitution nor historical practice has answered is whether Congress may impeach and remove lower-level, non-Cabinet executive branch officials. The Constitution does not define "civil Officers of the United States." Nor do the debates at the Constitutional Convention provide significant evidence of which individuals (beyond the President and Vice President) the Framers intended to be impeachable. Impeachment precedents in both the House and Senate are of equally limited utility with respect to subordinate executive officials (i.e., executive branch officials other than the President and Vice President). In all of American history, only one such official has been impeached: Secretary of War William Belknap. Thus, while it seems that executive officials of the highest levels have been viewed as "civil Officers," historical precedent provides no examples of the impeachment power being used against lower-level executive officials. One must therefore look to other sources for aid in determining precisely how far down the federal bureaucracy the impeachment power might reach. The general purposes of impeachment may assist in interpreting the proper scope of "civil Officers of the United States." The congressional power of impeachment constitutes an important aspect of the various checks and balances built into the Constitution to preserve the separation of powers. It is a tool, entrusted to the House and Senate alone, to remove government officials in the other branches of government, who either abuse their power or engage in conduct that warrants their dismissal from an office of public trust. At least one commentator has suggested that the Framers recognized, particularly for executive branch officials, that there would be times when it may not be in the President's interest to remove a "favorite" from office, even when that individual has violated the public trust. As such, the Framers "dwelt repeatedly on the need of power to oust corrupt or oppressive ministers whom the President might seek to shelter." If the impeachment power were meant to ensure that Congress has the ability to impeach and remove corrupt officials that the President was unwilling to dismiss, it would seem arguable that the power should extend to officers exercising a degree of authority, the abuse of which would harm the separation of powers and good government. The writings of early constitutional commentators also arguably suggest a broad interpretation of "civil Officers of the United States." Joseph Story addressed the reach of the impeachment power in his influential Commentaries on the Constitution , asserting that " all officers of the United states [] who hold their appointments under the national government, whether their duties are executive or judicial, in the highest or in the lowest departments of the government , with the exception of officers in the army and navy, are properly civil officers within the meaning of the constitution, and liable to impeachment." Similarly, William Rawle reasoned that "civil Officers" included "[ a ] ll executive and judicial officers, from the President downwards , from the judges of the Supreme Court to those of the most inferior tribunals. . . ." Consistent with the text of the Constitution, these early interpretations suggest the impeachment power was arguably intended to extend to "all" executive officers, and not just Cabinet-level officials and other executive officials at the highest levels. The meaning of "officer of the United States" under the impeachment provisions may be informed by other provisions of the Constitution that use the same phrase. Applying this contextual approach, the most thorough, and perhaps most helpful, judicial elucidation of the definition of "Officers of the United States" comes in the Constitution's Appointments Clause. Indeed, that provision, which establishes the methods by which "Officers of the United States" may be appointed, has generally been viewed as a useful guidepost in establishing the definition of "civil Officers" for purposes of impeachment. The Appointments Clause provides that the President shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments. In interpreting the Appointments Clause, the Court has distinguished "Officers of the United States," whose appointment is subject to the requirements of the Clause, and non-officers, also known as employees, whose appointment is not. The amount of authority that an individual exercises will generally determine his classification as either an officer or employee. As established in Buckley v. Valeo , an officer is "any appointee exercising significant authority pursuant to the laws of the United States," while employees are viewed as "lesser functionaries subordinate to the officers of the United States," who do not exercise "significant authority." The Supreme Court has further subdivided "officers" into two categories: principal officers, who may be appointed only by the President with the advice and consent of the Senate; and inferior officers, whose appointment Congress may vest "in the President alone, in the Courts of Law, or in the Heads of Departments." The Court has acknowledged that its "cases have not set forth an exclusive criterion for distinguishing between principal and inferior officers for Appointments Clause purposes." The clearest statement of the proper standard to be applied in differentiating between the two types of officers appears to have been made in Edmond v. United States when the Court noted that "[g]enerally speaking, the term 'inferior officer' connotes a relationship with some higher ranking officer or officers below the President . . . [and] whose work is directed and supervised at some level by others who were appointed by presidential nomination with the advice and consent of the Senate. " Thus, in analyzing whether one may be properly characterized as either an inferior or a principal officer, the Court's decisions appear to focus on the extent of the officer's discretion to make autonomous policy choices and the authority of other officials to supervise and to remove the officer. Using the principles established in the Court's Appointments Clause jurisprudence to interpret the scope of "civil Officers" for purposes of impeachment, it would appear that employees, as non-officers, would not be subject to impeachment. Thus, lesser functionariesâsuch as federal employees who belong to the civil service, do not exercise "significant authority," and are not appointed by the President or an agency headâwould not be subject to impeachment. At the opposite end of the spectrum, it would seem that any official who qualifies as a principal officer, including a head of an agency such as a Secretary, Administrator, or Commissioner, would be impeachable. The remaining question is whether inferior officers, or those officers who exercise significant authority under the supervision of a principal officer, are subject to impeachment and removal. As noted above, an argument can be made from the text and purpose of the impeachment clauses, as well as early constitutional interpretations, that the impeachment power was intended to extend to " all " officers of the United States, and not just those in the highest levels of government. Any official exercising "significant authority," including both principal and inferior officers, would therefore qualify as a "civil Officer" subject to impeachment. This view would permit Congress to impeach and remove any executive branch "officer," including many deputy political appointees and certain administrative judges. There is some historical evidence, however, to suggest that inferior officers were not meant to be subject to impeachment. For example, a delegate at the North Carolina ratifying convention asserted that "[i]t appears to me . . . the most horrid ignorance to suppose that every officer, however trifling his office, is to be impeached for every petty offense . . . I hope every gentleman . . . must see plainly that impeachments cannot extend to inferior officers of the United States." Additionally, Governeur Morris, member of the Pennsylvania delegation to the Constitutional Convention, arguably implied that inferior officers would not be subject to impeachment in stating that "certain great officers of State; a minister of finance, of war, of foreign affairs, etc. . . . will be amenable by impeachment to the public justice." Despite this ongoing debate, the authority to resolve any ambiguity in the scope of "civil Officers" for purposes of impeachment lays initially with the House, in adopting articles of impeachment, and then with the Senate, in trying the officer. Is Impeachment Limited to Criminal Acts? The Constitution describes the grounds of impeachment as "Treason, Bribery, or other high Crimes and Misdemeanors." As discussed above, the meaning of "high Crimes and Misdemeanors" is not defined in the Constitution or in statute. Some have argued that only criminal acts are impeachable offenses under the U.S. Constitution; impeachment is therefore inappropriate for noncriminal activity. In support of this assertion, one might note that the debate on impeachable offenses during the Constitutional Convention in 1787 shows that criminal conduct was encompassed in the "high crimes and misdemeanors" standard. As noted above, the notion that only criminal conduct can constitute sufficient grounds for impeachment does not, however, track historical practice. A variety of congressional materials support the notion that impeachment applies to certain noncriminal misconduct. For example, House committee reports on potential grounds for impeachment have described the history of English impeachment as including noncriminal conduct and noted that this tradition was adopted by the Framers. In accordance with the understanding of "high" offenses in the English tradition, impeachable offenses under this view are "constitutional wrongs that subvert the structure of government, or undermine the integrity of office and even the Constitution itself." "[O]ther high crimes and misdemeanor[s]" are not limited to indictable offenses, but apply to "serious violations of the public trust." Congressional materials take the view that "'Misdemeanor' . . . does not mean a minor criminal offense as the term is generally employed in the criminal law," but refers instead to the behavior of public officials. "[H]igh Crimes and Misdemeanors" may thus be characterized as "misconduct that damages the state and the operations of governmental institutions." According to congressional materials, the purposes underlying the impeachment process also reflect that noncriminal activity may constitute sufficient grounds for impeachment. The purpose of impeachment is not to inflict personal punishment for criminal activity. In fact, the Constitution explicitly makes clear that impeached individuals are not immunized from criminal liability once they are impeached for particular activity. Instead, impeachment is a "remedial" tool; it serves to effectively "maintain constitutional government" by removing individuals unfit for office. Grounds for impeachment include abuse of the particular powers of government office or a violation of the "public trust" âconduct that is unlikely to be barred by statute. Congressional practice also supports this position. Many impeachments approved by the House of Representatives have included conduct that did not involve criminal activity. For example, in 1803, Judge John Pickering was impeached and convicted for, among other things, appearing on the bench "in a state of total intoxication." In 1912, Judge Robert W. Archbald was impeached and convicted for abusing his position as a judge by inducing parties before him to enter financial transactions with him. In 1936, Judge Halstead Ritter was impeached and convicted for conduct that "br[ought] his court into scandal and disrepute, to the prejudice of said court and public confidence in the administration of justice . . . and to the prejudice of public respect for and confidence in the Federal judiciary." And a number of judges were impeached for misusing their position for personal profit. Are the Standards for Impeachable Offenses the Same for Judges and Executive Branch Officials? Some have suggested that the standard for impeaching a federal judge differs from an executive branch official. While Article II, Section 1, of the Constitution specifies the grounds for the impeachment of civil officers as "Treason, Bribery, or other high Crimes and Misdemeanors," Article III, Section 1, provides that federal judges "hold their Offices during good Behaviour." One argument posits that these clauses should be read in conjunction, meaning that judges can be impeached and removed from office if they fail to exhibit good behavior or if they are guilty of "treason, bribery, or other high Crimes and Misdemeanors." But while one might find some support for the notion that the "good behavior" clause constitutes an additional ground for impeachment in early twentieth century practice, the "modern view" of Congress appears to be that the phrase "good behavior" simply designates judicial tenure. Under this reasoning, rather than functioning as a ground for impeachment, the "good behavior" phrase simply makes clear that federal judges retain their office for life unless they are removed through a proper constitutional mechanism. For example, a 1973 discussion of impeachment grounds released by the House Judiciary Committee reviewed the history of the phrase and concluded that the "Constitutional Convention . . . quite clearly rejected" a "dual standard" for judges and civil officers. The next year, the House Judiciary Committee's Impeachment Inquiry asked whether the "good behavior" clause provides another ground for impeachment of judges and concluded that "[i]t does not." It emphasized that the House's impeachment of judges was "consistent" with impeachment of "non-judicial officers." Finally, the House Report on the Impeachment of President Clinton affirmed this reading of the Constitution, stating that impeachable conduct for judges mirrored impeachable conduct for other civil officers in the government. The "treason, bribery, and high Crimes and Misdemeanors" clause thus serves as the sole standard for impeachable conduct for both executive branch officials and federal judges. Still, even if the "good behavior" clause does not delineate a standard for impeachment and removal for federal judges, as a practical matter, one might argue that the range of impeachable conduct differs between judges and executive branch officials because of the differing nature of each office. For example, one might argue that a federal judge could be impeached for perjury or fraud because of the importance of trustworthiness and impartiality to the judiciary, while the same behavior might not always constitute impeachable conduct for an executive branch official. But given the varied factors at issueâincluding political calculations, the relative paucity of impeachments of nonjudicial officers compared to judges, and the fact that a nonjudicial officer has never been convicted by the Senateâit is uncertain if conduct meriting impeachment and conviction for a judge would fail to qualify for a nonjudicial officer. The impeachment and acquittal of President Clinton highlights this difficulty. The House of Representatives impeached President Clinton for (1) providing perjurious and misleading testimony to a federal grand jury and (2) obstruction of justice in regards to a civil rights action against him. The House Judiciary Committee report that recommended articles of impeachment argued that perjury by the President was an impeachable offense, even if committed with regard to matters outside his official duties. The report rejected the notion that conduct such as perjury was "more detrimental when committed by judges and therefore only impeachable when committed by judges." The report pointed to the impeachment of Judge Claiborne, who was impeached and convicted for falsifying his income tax returnsâan act which "betrayed the trust of the people of the United States and reduced confidence in the integrity and impartiality of the judiciary." While it is "devastating" for the judiciary when judges are perceived as dishonest, the report argued, perjury by the President is "just as devastating to our system of government." And, the report continued, both Judge Claiborne and Judge Nixon were impeached and convicted for perjury and false statements in matters distinct from their official duties. Likewise, the report concluded that President Clinton's perjurious conduct, though seemingly falling outside his official duties as President, nonetheless constituted grounds for impeachment. In contrast, the minority views from the report opposing impeachment reasoned that "not all impeachable offenses are crimes and not all crimes are impeachable offenses." The minority argued that the President is not impeachable for all potential crimes, no matter how minor; impeachment is reserved for "conduct that constitutes an egregious abuse or subversion of the powers of the executive office." Examining the impeachment of President Andrew Johnson and the articles of impeachment drawn up for President Richard Nixon, the minority concluded that both were accused of committing "public misconduct" integral to their "official duties." The minority noted that the Judiciary Committee had rejected an article of impeachment against President Nixon alleging that he committed tax fraud, primarily because that "related to the President's private conduct, not to an abuse of his authority as President." The minority did not explicitly claim that the grounds for impeachment might be different between federal judges and executive branch officials, but its reasoning at least hints in that direction. Its rejection of nonpublic behavior as sufficient grounds for impeachment of the Presidentâincluding its example of tax fraud as nonpublic behavior that does not qualifyâappears to conflict with the past impeachment and conviction of federal judges on just this basis. One reading of the minority's position is that certain behavior might be impeachable conduct for a federal judge, but not for the President. While two articles of impeachment were approved by the House, the Senate acquitted President Clinton on both charges. Even so, generating firm conclusions from this result is difficult, as there may have been varying motivations for these votes. One possibility is that the acquittal occurred because some Senatorsâthough agreeing that the conduct merited impeachmentâthought the House Managers failed to prove their case. Another is that certain Senators disagreed that the behavior was impeachable at all. Yet another possibility is that neither ideological stance was considered and voting was conducted solely according to political calculations. What Is the Constitutional Definition of Bribery? Civil officers are subject to impeachment for treason, bribery, or "other high Crimes and Misdemeanors." Treason is defined in the constitutional text, but bribery is not. As this report has discussed, Congress has substantial discretion in determining what misconduct constitutes "high Crimes and Misdemeanors" meriting impeachment and removal for government officials. Likewise, Congress could presumably look to several different sources to inform its understanding of what behavior qualifies as bribery under the Constitution. One source might be the current federal criminal code. Under federal statute, it is a criminal offense for a public official to corruptly seek or receive bribes in return for official acts. Another might be the understanding of the crime of bribery at the nation's Founding. At the time of the Constitutional Convention, bribery was a common law crime, although its precise scope is somewhat difficult to determine. According to Blackstone, it included situations where a judge, or other person involved in the administration of justice, took "any undue reward to influence his behavior in office." Though the scope of the crime of bribery was initially narrow, it appears to have expanded to include giving as well as receiving bribes, as well as attempted bribery in certain situations. Some commentators assert that, at the time of the Founding, the English and American common law definition of bribery had developed to apply not just to judges, but also to executive officers . No matter the precise scope of bribery in the common law courts, in Parliamentary practice it was understood to constitute an impeachable offense in England at the time of the nation's Founding. In 1624, the House of Commons impeached the Lord Treasurer (one of the King's ministers) for bribery. Actual debate on the meaning of bribery at the Constitutional Convention was limited. As mentioned above, while discussing presidential impeachment, Gouverneur Morris asserted that the President should be subject to the impeachment process because he might "be bribed by a greater interest to betray his trust," noting the example of Charles II receiving a bribe from Louis XIV. The First Congress enacted a federal bribery statute for customs officers, which provided that those officers convicted of taking or receiving a bribe be fined and barred from holding office in the future, while the payer of a bribe would be fined as well . The same Congress passed another bribery statute that applied to anyone who "directly or indirectly, give[s] any sum or sums of money, or any other bribe, present or reward, or any promise, contract, obligation or security, for the payment or delivery of any money, present or reward, or any other thing to obtain or procure the opinion, judgment or decree of any judge or judges of the United States" as well as the judge who accepted the bribe. Other officers of the United States were added to the federal statute's provisions in 1853. And the states passed their own laws about the time of the Constitution's drafting that prohibited bribery and the closely related crime of extortion by state officers and judges. A number of impeachments in the United States have charged individuals with misconduct that was viewed as bribery. In most of those instances, however, the specific articles of impeachment were framed as "high crimes and misdemeanors" or an "impeachable offense." For instance, the House of Representatives approved articles of impeachment against then-Judge Hastings, including one for the "impeachable offense" of participating in a "corrupt conspiracy to obtain $150,000 from defendants [in a case before him] in return for the imposition of [lighter] sentences." Although the article did not mention bribery, the Judiciary Committee report analyzing the article described Judge Hastings as participating in a "bribery conspiracy" or a "bribery scheme." The Senate convicted Hastings on this article. Likewise, the first article of impeachment against Judge Porteous charged him with "solicit[ing] and accept[ing] things of value" from attorneys without disclosure and ruling in those clients favor. The second charged him with "solicit[ing] and accept[ing] things of value . . . for his personal use and benefit, while at the same time taking official actions that benefitted" a bail bondman and his sister. Neither article explicitly referenced bribery, but much like the Hastings impeachment, the Judiciary Committee report analyzing the articles alleged that Judge Porteous had participated in a "bribery scheme." In sum, the Framers provided that bribery was an impeachable offense for the President, Vice President, and other civil officers. At the time of the Constitution's drafting, bribery was a common law crime whose scope had expanded from its earlier roots. And Parliament had impeached ministers of the Crown for bribery. But the Framers did not adopt a formal definition of bribery in the Constitution, and the debates at the Constitutional Convention and during ratification do not clearly indicate the intended meaning of bribery for impeachment purposes. In any case, the practice of impeachment in the United States has tended to envelop charges of bribery within the broader standard of "other high Crimes and Misdemeanors." Impeachment for Behavior Prior to Assuming Office Most impeachments have concerned behavior occurring while an individual is in a federal office. But some have addressed, at least in part, conduct before individuals assumed their positions. For example, in 1912, a resolution impeaching Judge Robert W. Archbald and setting forth thirteen articles of impeachment was reported out of the House Judiciary Committee and agreed to by the House. The Senate convicted Judge Archbald in January the next year. At the time that Judge Archbald was impeached by the House and tried by the Senate in the 62nd Congress, he was U.S. Circuit Judge for the Third Circuit and a designated judge of the U.S. Commerce Court. The articles of impeachment brought against him alleged misconduct in those positions as well as in his previous position as U.S. District Court Judge of the Middle District of Pennsylvania. Judge Archbald was convicted on four articles alleging misconduct in his then-current positions as a circuit judge and Commerce Court judge, and on a fifth article that alleged misuse of his office both in his then-current positions and in his previous position as U.S. District Judge. While Judge Archbald was impeached and convicted in part for behavior occurring before he assumed his then-current position, that behavior occurred while he held a prior federal office. Judge G. Thomas Porteous, in contrast, is the first individual to be impeached by the House and convicted by the Senate based in part on conduct occurring before he began his tenure in federal office. Article II alleged misconduct beginning while Judge Porteous was a state court judge as well as misconduct while he was a federal judge. Article IV alleged that Judge Porteous made false statements to the Senate and FBI in connection with his nomination and confirmation to the U.S. District Court for the Eastern District of Louisiana. He was convicted on all four articles, removed from office, and disqualified from holding future federal offices. On the other hand, it does not appear that any President, Vice President, or other civil officer of the United States has been impeached by the House solely based on conduct occurring before he began his tenure in the office held at the time of the impeachment investigation, although the House has, on occasion, investigated such allegations. Impeachment After an Individual Leaves Office It appears that federal officials who have resigned have still been thought to be susceptible to impeachment and a ban on holding future office. Secretary of War William W. Belknap resigned hours before the House impeached him, but the Senate still conducted a trial in which Belknap was acquitted. During the trial, upon objection by Belknap's counsel that the Senate lacked jurisdiction because Belknap was now a private citizen, the Senate voted in favor of jurisdiction. That said, the resignation of an official under investigation for impeachment often ends impeachment proceedings. For example, no impeachment vote was taken following President Richard Nixon's resignation after the House Judiciary Committee decided to report articles of impeachment to the House. And proceedings were ended following the resignation of Judges English, Delahay, and Kent. What Is the Standard of Proof in House and Senate Impeachment Proceedings? In the judicial system, the degree of certainty with which parties must prove their allegations through the production of evidenceâwhat is known as the burden of persuasion or the standard of proof âvaries depending on the type of proceeding. In a criminal trial, in which a defendant risks deprivation of life and liberty, the prosecutor's burden of proof is high. Each element of the offense must be proved "beyond a reasonable doubt." In civil litigation between private parties, in which the potential harm to a defendant is less severe, the plaintiff's burden of proof is reduced. The allegations generally need only be proved by a "preponderance of the evidence." An even more generous standard is used by federal grand juries, who may issue an indictment on a finding that there is "probable cause" to believe that a crime has occurred. In yet other settings, an intermediate standard of "clear and convincing evidence" is used. This burden is somewhere below "reasonable doubt" but higher than "preponderance." The Constitution establishes no clear standard of proof to be applied in the impeachment process. Neither has the House in its decision to impeach, nor the Senate in its decision to convict, chosen to establish (either by rule or precedent) a particular governing standard. The question has been repeatedly debated in both chambers, but ultimately individual Members have been free to use any standard they wish in deciding how to cast their respective votes. In short, when deciding questions of impeachment and removal, historical practice seems to indicate that Members need be convinced only to their own satisfaction. Moreover, even if the House or Senate chose to establish a governing standard of proof, it may be hard for such a rule to be enforced. Standard of Proof in the House In the House, the debate over the standard of proof that should be applied in determining whether the evidence supports approval of articles of impeachment has generally focused on the lower end of the standards-of-proof spectrum. Those who have argued for the most easily satisfied probable cause standard have often analogized the House's decision to impeach to that of a grand jury's decision to indict. Like a grand jury, the House's role is to ascertain whether sufficient evidence exists to charge an official with an impeachable offense, not to determine guilt. That role is reserved to the Senate, which may apply a different, potentially higher standard of proof. As such, it is argued that the House should apply a similar standard to what is applied by an investigating grand juryâa standard such as preponderance of the evidence or "probable cause." This position was perhaps most clearly articulated during the Judiciary Committee's consideration of the impeachment of Judge Charles Swayne in 1904 by Representative Powers, who argued the following: This House has no constitutional power to pass upon the question of the guilt or the innocent of the respondent. He is not on trial before us. We have no right to take from him the presumption of innocence which he enjoys under the law. All we have the right to do is to say whether there has been made out such probable cause of guilt as to entitle the American people to the right to have the case tried before the Senate of the United States. Those who have argued for the more demanding clear and convincing standard have often focused on the gravity of the impeachment process and its impact not only on the impeached official, but in the case of a presidential impeachment, on the entire executive branch. For example, during the House's consideration of articles of impeachment against President Clinton, the President's counsel asserted that the clear and convincing standard was "commensurate with the gravity of impeachment." "Lower standards," it was argued, "are simply not demanding enough to justify the fateful step of an impeachment trial." The House Judiciary Committee's report issued in connection with its approval of articles of impeachment against President Nixon displays the House's historical reluctance to impose any formalized burden of proof on Members. In describing the articles, the report noted that the committee had found "clear and convincing evidence" of the individual impeachable offenses, but did not explicitly contend that such a finding was required, or that "clear and convincing" should represent the governing standard of proof in House impeachments. The dissenting Members took a different approach, arguing that they were persuaded that the applicable standard for proof in House impeachments "must be no less rigorous than proof by 'clear and convincing evidence.'" Even so, the minority not only acknowledged that the House has never sought to "fix by rule" an applicable standard of proof, but also explicitly stated that they would not "advocate such a rule." "The question," the minority concluded, "is properly left to the discretion of individual Members." Standard of Proof in the Senate Much like Members of the House, Senators are not bound by any specific burden of proof in the trial of an impeached official. Counsel for the impeached official have generally argued that individual Senators should adopt the most demanding standard of "beyond a reasonable doubt," while the House Managers have generally urged a lower standard. The Constitution's use of words like "try" and "convicted" could be read to suggest an intent that the Senate adopt a criminal-like standard in impeachment trials. Counsel for President Clinton argued this position, at least with respect to presidential impeachments, asserting that the Constitution's phrasing "strongly suggests that an impeachment trial is akin to a criminal proceeding and that the beyond-a-reasonable-doubt standard of criminal proceedings should be used." House Managers, on the other hand, have generally argued that use of the "beyond reasonable doubt" standard is inappropriate. They have noted that "an impeachment trial is not a criminal trial," nor are the consequences of a convictionâwhich are limited to removal from office and possible disqualification from holding future federal officeâcriminal in nature. The Senate's approach of ensuring that its Members retain the ability to make individualized decisions on the standard of proof necessary for conviction was perhaps best exhibited during the impeachment trial of Judge Claiborne. There, counsel for Judge Claiborne submitted a motion to establish "beyond a reasonable doubt" as the applicable standard of proof in the trial. The House Managers disagreed, arguing that standard was inappropriate, and that setting any standards would prevent individual members from exercising their own personal judgment. Judge Claiborne's motion was ultimately rejected by the Presiding Officer, who held that the standard of proof to be applied was left to the discretion of each individual Senator. This approach was affirmed in the Senate's most recent statement on the standard of proof in a Senate trial. During Judge Porteous's trial, the Senate trial committee referenced the resolution of the Claiborne motion, noting that the Senate had "declin[ed] to establish an obligatory standard." Accordingly, the committee report concluded that "Each Senator may, therefore, use the standard of proof that he or she feels is appropriate." As such, rather than impose a specific standard of proof on its members, both the House and Senate have sought to ensure that individual Members remain free to make their own determinations, guided by their individual conscience and judgment, and their oath to do "impartial justice." What Are the Applicable Evidentiary Rules and Standards in a Senate Impeachment Trial? Like most aspects of the Senate impeachment trial, the body's approach to evidentiary questions is unique. The Senate has not bound itself to any specific controlling set of evidentiary rules. Instead, the admissibility of evidence is primarily based on Senate precedent, with objections first ruled on by the Presiding Officer, but ultimately settled by a majority vote of the Senate. The present Senate Impeachment Rules provide a basic procedural framework for how evidentiary questions are to be handled. Under the Rules, objections to the admissibility of evidence "may be made by the parties or their counsel." Those objections are directed to the Presiding Officer who "may rule on all questions of evidence." That ruling is given effect unless challenged by an individual Senator. At that point, the Rules provide that the question be "submitted to the Senate for decision without debate." The Rules set the process by which evidentiary questions are to be decided, but provide only the most basic guidance on the substantive standards to be applied by either the Presiding Officer or individual Senators in making such decisions. The Rules state only that the Presiding Officer's authority to rule on questions of evidence includes, but is not limited to, "questions of relevancy, materiality, and redundancy of evidence and incidental questions." Similarly, the Senate reserves the right to "determine competency, relevancy, and materiality." The Rules therefore suggest only that evidence should meet basic relevancy requirements. To the extent there are additional substantive standards for either the Presiding Officer or individual Senators to apply in making evidentiary determinations, they appear to derive primarily from Senate precedent. Evaluating and understanding those precedents, however, is difficult because evidentiary questions submitted to the Senate are generally made with no debate. As such, the historical record of Senate deliberations on evidentiary questions typically includes the final disposition of the question and perhaps only limited evidence of the particular reasoning that led to the Senate's decision. Given the quasi-judicial aspects of the Senate trial, the parties have often used judicial evidentiary standards, including the Federal Rules of Evidence, to support their motions to either allow or exclude evidence. The Senate has generally been receptive to this approach and in fact arguably supported some adherence to judicial rules of evidence. But more recent trials have made clear that the Senate is "not bound by the Federal Rules of Evidence, although those rules may provide some guidance. . . ." Indeed, it has been argued that the Federal Rules of Evidence, which were designed to protect jurors from prejudicial evidence and to help them judge evidence, have little if any place in a Senate impeachment trial, where each individual Senator must weigh all relevant evidence as he or she deems fit. This approach is consistent with Chief Justice Rehnquist's ruling during the Clinton impeachment trial that the Senators should not be referred to as "jurors" because in an impeachment trial "the Senate is not simply a jury. It is a court. . . ." Accordingly, while judicial principles may guide the Senate, the body primarily "determine[s] the admissibility of evidence by looking to Senate precedents rather than court decisions. A Senate vote is the ultimate authority for determining the admissibility of evidence." In the end, viewing House and Senate impeachment proceedings through the lens of established judicial constructsâincluding rules of procedure, evidence, and standards of proofâshould be undertaken with caution. The impeachment process does not fit into existing judicial molds of either a criminal or civil proceeding. Indeed, it is not necessarily a judicial proceeding at all. It is instead an exceptional proceeding defined by its distinctive combination of judicial and legislative characteristics that has historically required a unique approach to procedural and evidentiary questions. Are Impeachment Proceedings Subject to Judicial Review? Impeachment proceedings have been challenged in federal court on a number of occasions. Perhaps most significantly, the Supreme Court has ruled that a challenge to the Senate's use of a trial committee to take evidence posed a nonjusticiable political question. In Nixon v. United States , Judge Walter L. Nixon had been convicted in a criminal trial on two counts of making false statements before a grand jury and was sent to prison. He refused, however, to resign and continued to receive his salary as a judge while in prison. The House of Representatives adopted articles of impeachment against the judge and presented the Senate with the articles. The Senate invoked Impeachment Rule XI, a Senate procedural rule which permits a committee to take evidence and testimony. After the committee completed its proceedings, it presented the full Senate with a transcript and report. Both sides presented briefs to the full Senate and delivered arguments, and the Senate then voted to convict and remove him from office. The judge then brought a suit arguing that the use of a committee to take evidence violated the Constitution's provision that the Senate "try" all impeachments. The Supreme Court noted that the Constitution grants "the sole Power" to try impeachments "in the Senate and nowhere else"; and the word "try" "lacks sufficient precision to afford any judicially manageable standard of review of the Senate's actions." This constitutional grant of sole authority, the Court reasoned, meant that the "Senate alone shall have authority to determine whether an individual should be acquitted or convicted." In addition, because impeachment functions as the " only check on the Judicial Branch by the Legislature," the Court noted the important separation of powers concerns that would be implicated if the "final reviewing authority with respect to impeachments [was placed] in the hands of the same body that the impeachment process is meant to regulate." Further, the Court explained that certain prudential considerationsâ"the lack of finality and the difficulty of fashioning relief"âweighed against adjudication of the case. Judicial review of impeachments could create considerable political uncertainty, if, for example, an impeached President sued for judicial review. The Court in Nixon was careful to distinguish the situation from Powell v. McC ormack , a case also involving congressional procedure where the Court declined to apply the political question doctrine. That case involved a challenge brought by a Member-elect of the House of Representatives, who had been excluded from his seat pursuant to a House Resolution. The precise issue in Powell was whether the judiciary could review a congressional decision that the plaintiff was "unqualified" to take his seat. That determination had turned, the Court explained, "on whether the Constitution committed authority to the House to judge its Members' qualifications, and if so, the extent of that commitment." The Court noted that while Article I, Section 5, does provide that Congress shall determine the qualifications of its Members, Article I, Section 2, delineates the three requirements for House membershipâRepresentatives must be at least twenty-five years old, have been U.S. citizens for at least seven years, and inhabit the states they represent. Therefore, the Powell Court concluded, the House's claim that it possessed unreviewable authority to determine the qualifications of its Members "was defeated by . . . this separate provision specifying the only qualifications which might be imposed for House membership." In other words, finding that the House had unreviewable authority to decide its Members' qualifications would violate another provision of the Constitution. The Court therefore concluded in Powell that whether the three requirements in the Constitution were satisfied was textually committed to the House, "but the decision as to what these qualifications consisted of was not." Applying the logic of Powell to the case at hand, the Nixon Court noted that here, in contrast, leaving the interpretation of the word "try" with the Senate did not violate any "separate provision" of the Constitution. In addition, several other aspects of the impeachment process have been challenged. Judge G. Thomas Porteous sued seeking to bar counsel for the Impeachment Task Force of the House Judiciary Committee from using sworn testimony the judge had provided under a grant of immunity. The impeachment proceedings were started after a judicial investigation of Judge Porteous for alleged corruption on the bench. During that investigation, Judge Porteous testified under oath to the Special Investigatory Committee under an order granting him immunity from that information being used against him in a criminal case. Before the U.S. District Court for the District of Columbia, Judge Porteous argued that the use of his immunized testimony during an impeachment proceeding violated his Fifth Amendment right not to be compelled to serve as a witness against himself. The court rejected his challenge, reasoning that because the use of the testimony for an impeachment proceeding fell within the legislative sphere, the Speech or Debate Clause prevented the court from ordering the committee staff members to refrain from using the testimony. Similarly, Judge Alcee L. Hastings sought to prevent the House Judiciary Committee from obtaining the records of a grand jury inquiry during the committee's impeachment investigation. Prior to the impeachment proceedings, although ultimately acquitted, Judge Hastings had been indicted by a federal grand jury for a conspiracy to commit bribery. Judge Hastings's argument was grounded in the separation of powers: he claimed that permitting disclosure of grand jury records for an impeachment investigation risked improperly allowing the executive and judicial branches to participate in the impeachment processâa tool reserved for the legislature. The U.S. Court of Appeals for the Eleventh Circuit, however, rejected this "absolutist" concept of the separation of powers and held that "a merely generalized assertion of secrecy in grand jury materials must yield to a demonstrated, specific need for evidence in a pending impeachment investigation." The U.S. District Court for the District of Columbia initially threw out Judge Hastings's Senate impeachment conviction, because the Senate had tried his impeachment before a committee rather than the full Senate. The decision was vacated on appeal and remanded for reconsideration under Nixon v. United States . The district court then dismissed the suit because it presented a nonjusticiable political question. Conclusion Influenced by both English and colonial practice, the Framers of the Constitution crafted an Americanized impeachment remedy that ultimately holds government officers accountable for political offenses, or misdeeds committed by public officials against the state. The meaning of the Constitution's impeachment provisions has been worked out over time, informed by the historical practices of the House and Senate in pursuing impeachment for the misconduct of government officers. Impeachment is also generally immune from judicial review, meaning that Congress has substantial discretion in how it structures impeachment proceedings. The Constitution does not delineate the range of misconduct that qualifies as "high Crimes and Misdemeanors," perhaps because the scope of possible offenses by government officers is impossible to delineate in advance. The history of impeachment in the United States shows that the remedy has generally applied against government officers for abuses of power, corruption, and conduct determined incompatible with an individual's office, but does not extend to strictly political or policy disagreements.	Summary:	gov_report	1,024	null	90
crs_R45809	crs_R45809_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Critical infrastructure (CI) refers to the machinery, facilities, and information that enable vital functions of governance, public health, and the economy. Adverse events may occur when CI systems and assets are subject to loss or disruption for any cause, whether by natural disasters or deliberate attack. This report highlights four key areas of enduring policy concern for Congress, and outlines the parameters of ongoing debates within them. A section is devoted below to each key area: defining and identifying CI; understanding and assessing CI risk; federal organization to address CI; and the role of the private sector. Defining and Identifying CI Presidential Decision Directive 63 (PDD-63) on critical infrastructure protection, released in 1998, was the first high-level policy guidance for critical infrastructure protection in the contemporary era. It framed the critical infrastructure issue in terms of national vulnerability to potentially devastating asymmetric attacks. The directive presented U.S. military economic and military might as "mutually reinforcing and dependent" elements of national power dependent upon critical infrastructure to function properly. The directive provided an austere definition of critical infrastructure as "those physical and cyber-based systems essential to the minimum operations of the economy and government." PDD-63 set ambitious national goals for the elimination of any significant national vulnerability to "non-traditional" asymmetric cyber or physical attacks on CI. In practice, it has proven extremely difficult even to establish consistent criteria for assessing the criticality of specific assets and systems, in part because criticality relates not only to the physical attributes of infrastructure systems and assets, but also to the perspectives, values, and priorities of those making the assessment. The sheer scale, complexity, and interconnectedness of the U.S. and global economies complicate efforts to identify and inventory critical assets and systems. For example, the United States electricity sub-sector alone has nearly 7,000 operational power plants, which in turn depend upon other infrastructure assets and complex supply chains to support continuing operations. The Evolving Definition of CI The most commonly cited statutory definition of critical infrastructure was established in the USA PATRIOT Act of 2001 ( P.L. 107-56 ), and echoes PDD-63 in its focus on protecting the industrial and demographic foundations of national mobilization against catastrophic risks. The USA PATRIOT Act defines critical infrastructure as "systems and assets, whether physical or virtual, so vital to the United States that the incapacity or destruction of such systems and assets would have a debilitating impact on security, national economic security, national public health or safety, or any combination of those matters." Over time, critical infrastructure policy has expanded from its earlier emphasis on the physical foundations of national power to a wider concern with provision of essential services and customary conveniences to the public. The universe of threats to CI commonly considered by Congress and executive branch departments and agencies has also expanded since the early post-9/11 period. The intelligence community continues to devote significant attention to asymmetric threats to CI posed by state and non-state adversaries who lack the means to directly confront U.S. military power, or for strategic reasons choose to avoid direct military confrontation. Asymmetric attacks may use a combination of physical or cyber means to damage or disrupt domestic CI systems and assets, or cause mass civilian casualties. However, natural disasters and other causes of damage and disruption not directly linked to terrorism or other intentional acts have become more salient elements of critical infrastructure policy and practice in the years since 9/11. Although the USA PATRIOT Act's definition of critical infrastructure remains law and is still commonly cited as a basis for official policy, CI policymakers have lowered the threshold of criticality to include infrastructure-related events with disruptive, but not necessarily catastrophic, effects at all levels of society and government. Policy increasingly reflects local, society-centric perspectives on infrastructure that place emphasis on it as an enabler of prosperity, public safety, and civic life. For example, National Infrastructure Protection Plan (NIPP), published by DHS in 2013 as official policy guidance for interagency coordination and public-private partnerships, defines critical infrastructure as "assets, systems, and networks that underpin American society," and considers impacts of a wide range of natural and manmade hazard events at the national, regional, and local levels. Successive Administrations since 1998 have gradually expanded the aperture of CI policy beyond protection of sectors regarded as essential to national security, the economy, and public health and safety. This reflects a global trend among developed countries toward CI policies favoring society-centric resilience at the system level over security-oriented protection of specific assets deemed at risk. In January 2017, the Department of Homeland Security (DHS) designated U.S. election systems as a sub-sector of the Government Facilities critical infrastructure sector, which also includes national monuments and icons and education facilities. The components of the elections systems as described by DHS include physical locations (storage facilities, polling places, and locations where votes are tabulated) and technology infrastructure (voter registration databases, voting systems, and other technology used to manage elections and to report and validate results). The criticality of these facilities, systems, and assets derives primarily from their essential role in supporting the nation's civic life. Currently, there are 16 critical infrastructure sectors as set forth in Presidential Policy Directive 21 (PPD-21), "Critical Infrastructure Security and Resilience," and elaborated in the 2013 NIPP. The federal government uses CI sectors as an organizing framework for voluntary public-private partnerships with self-identified CI owner-operators. Public-private partnership activities are non-regulatory in nature. DHS has overall responsibility for coordination of partnership programs and activities, but in several cases other federal agencies are assigned leading roles as Sector-Specific Agencies (SSAs). (The roles and responsibilities of the public and private sectors are discussed in the final section of this report, " The Role of the Private Sector .") Together, these sectors represent a broad and diverse array of national economic activity and social life, each with its own distinct characteristics. The expanding multiplicity and breadth of definitions used for critical infrastructure designation has policy implications for Congress. Each officially-designated critical infrastructure sector is represented by formal coordination bodies, which include numerous private sector stakeholder groups and representatives of state, local, tribal, and territorial (SLTT) governments. In addition, industry and non-profit groups may participate in certain sector-wide activities. As sectors mature, new public and private sector communities of interest emerge within the broader critical infrastructure enterprise, each with its own unique perspective on what criticality means as applied to the nation's infrastructure. For this reason, there is no single, consistently applied definition of critical infrastructure. Even though the most commonly cited statutory definition of CI has not changed in nearly two decades, identification and prioritization of critical systems and assets as categories of applied practice reflects diverse interests and perspectives, which continue to evolve. This suggests that definitions of critical infrastructure are not merely a matter of semantics, and the multiplicity of official definitions in common use is not simply a matter of imprecision. Rather, variation reflects diverse constituencies' efforts to negotiate the boundaries of congressional responsibility, the scope of government programs, and the nature and extent of public-private sector relationships at any given point in time. CI Protection vs. CI Resilience Critical infrastructure policy has taken on two distinct orientations that significantly overlap but nonetheless reflect different organizational perspectives and requirements. Critical infrastructure protection (CIP) emphasizes the identification, prioritization, and protection of infrastructure assets. Criticality from this perspective is generally defined in terms of the consequences of asset loss or system disruption (i.e., an infrastructure asset or system is critical to the degree that loss or disruption of service would have system-level impacts on essential functions of society, the economy, or government). Critical infrastructure resilience (CIR) emphasizes broad investments in hazard mitigation and preparedness during steady-state periods, and adaptation during emergencies, to ensure availability of critical infrastructure functions that enable provision of essential services. Much of the major legislation that serves as the foundation for CI policy was passed in the immediate aftermath of the 9/11 attacks, when concerns with physical protection of critical assets predominated in policy circles. However, policy practice in the United States and other developed countries has increasingly favored a focus on system resilience over asset protection. As such, national CI policy reflects a hybrid approach that contains elements of both CIP and CIR. This can exacerbate already complex issues inherent in defining criticality and identifying what exactly is critical in the context of time and place. Recognizing this inherent tension, this report uses the term "critical infrastructure security" to discuss CI policy without favoring CIP or CIR. CIP Asset Lists, Catalogs, Databases, and Reports CIP-focused legislation and government policy directives since 2001 have frequently contained requirements for the creation of asset lists, catalogs, databases, and reports to identify systems and assets that meet a given threshold of criticality, and thus require higher than ordinary levels of protection against plausible threats. The logic is simple on its face: we need to know what we have; what is most important; and what we need to protect. However, application of this logic often introduces many complexities in actual practice, and so national-level issues of asset identification and prioritization persist across all CI sectors. Nonetheless, inventory requirements are typically the first step of the broader risk management strategies applied to critical infrastructure protection, both at the national level and in the private sector at the enterprise level. Definitional criteria of criticality will likely continue to be a subject of considerable debate within the CI policy community, but the forcing mechanism provided by list/no-list decisions serve to define what specific assets are considered critical in actual practice. Policy Guidance for Asset Identification One of the earliest examples of a CIP-based inventory requirement is the National Strategy for the Physical Protection of Critical Infrastructures and Key Assets , released in February 2003 just before the newly created Department of Homeland Security began operations. The strategy directed DHS to develop a "uniform methodology for identifying facilities, systems, and functions with national-level criticality," and use it to "build a comprehensive database to catalog these critical facilities, systems, and functions." It was followed by the December 2003 release of Homeland Security Presidential Directive 7: Critical Infrastructure Identification, Prioritization, and Protection (HSPD-7), which served as the basis of CI policy development and implementation for the next decade until it was superseded by PPD-21 in 2013. HSPD-7 shared the CIP-orientation of other early policy documents, directing federal departments and agencies to "identify, prioritize, and coordinate the protection of critical infrastructure and key resources in order to prevent, deter, and mitigate the effects of deliberate efforts to destroy, incapacitate, or exploit them." DHS claimed in the 2006 NIPPâthe first plan of its typeâthat it had compiled a comprehensive CI database to meet the CI identification requirement. However, a 2006 DHS Inspector General (IG) report found that these early efforts to produce a national database of CI assets suffered from conceptual and methodological shortcomings. The report stated that the Department's National Asset Database had rapidly grown from 160 key assets in 2003 to include 77,069 assets in 2006, and that listed assets included everything from nuclear power plants and dams to local petting zoos and water parks. The IG report concluded that the database contained many entries that listed "unusual, or out-of-place, assets whose criticality is not readily apparent," without providing assurance that truly critical assets were included. Likewise, data collection procedures were not standardized, so that San Francisco listed its entire light rail system as a single asset, while New York City listed its subway stations as multiple individual assets. Congressional Oversight of Asset Identification Congress subsequently included provisions for the National Asset Database as part of the Implementing the Recommendations of the 9-11 Commission Act of 2007 ( P.L. 110-53 , The 9-11 Commission Act). The legislation requires compilation of a national database of vital systems or assets, and creation of a separate classified list of "prioritized critical infrastructure," to be updated annually and submitted to Congress. The classified list is to include assets that the Secretary determined would cause national or regional catastrophic effects if subject to disruption or destruction. Other provisions include definitions of infrastructure-related terms, and a requirement for the Secretary to implement certain quality control procedures to ensure that asset nominations from state governments or other sources meet the threshold of criticality as determined by the Secretary. A 2013 Government Accountability Office (GAO) report found that DHS had improved its processes for critical asset identification, but that significant questions regarding reporting criteria and methodology persisted. The report documented frequent changes in nomination and adjudication criteria and reporting format used by National Critical Infrastructure Prioritization Program (NCIPP), which DHS instituted to fulfil the congressional mandate of the 9-11 Commission Act. After 2009, NCIPP assessed criticality of all nominations according to four types of potential adverse consequences above certain designated thresholds: fatalities, economic loss, mass evacuation length, and national security impacts. Methodological adjustments were subsequently made in some cases to account for unique CI characteristics. For example, collapse of the U.S. financial system would likely not cause immediate mass casualties, but might still have debilitating second-order effects on national security, economic security, and public health and safety. The same might also apply to election infrastructure used in federal elections, which was added as a CI sub-sector in 2017. The report noted that asset nomination vetting methods had not undergone an independent peer review. It recommended to Congress that DHS commission such a review to "assure that the NCIPP list identifies the nation's highest priority infrastructure." Policy and Legal Implications of Criticality Designation Being listed as a prioritized asset in the NCIPP immediately elevates a given asset making it an object of national significance under relevant statutes. This action may affect government prioritization of certain on-site risk assessments, administration of regulatory regimes and grant programs, conduct of certain criminal prosecutions, and emergency preparedness and response coordination, among other activities. Exact numbers of nominated assets are not publicly available due to classification requirements, but they number in the thousands. Despite the often significant ramifications of the NCIPP list, the 2013 GAO report found that some state governments were opting not to participate in DHS data calls, citing compliance burdens, technical limitations, and cost-benefit calculations. For example, some states said they lacked expertise to develop scenarios and model complex infrastructure systems with sufficient fidelity to assess likely consequences of failure or disruption. For this reason alone, the NCIPP list cannot be regarded as a current and complete national inventory of critical systems and assets. Furthermore, GAO found that DHS was unable to provide documentation to show that it had complied with the statutory annual reporting requirement in recent years. The inherent complexities of CI inventory and categorization as described above also suggest the presence of persistent difficulties in assuring the completeness, quality, and currency of centralized inventories of CI assets requiring protected status. CIR Identification of Systems and Assets CIR prioritizes adaptive use of critical capabilities to enable continuity of service during periods of stress on critical infrastructure systems. This approach to CI inventory expands the scope of data collection to include any and all assets within a given CI sector that might be useful in emergency planning or contingency situationsâregardless of their inclusion on a particular list. The data can then be used as needed to identify alternative means of maintaining critical functions and providing essential services if systems and assets ordinarily used to provide these services are compromised. The major CI interagency database using the capabilities approach is known as Homeland Infrastructure FoundationâLevel Data (HIFLD). Four lead agenciesâDHS, Department of Defense (DOD), the National Geospatial-Intelligence Agency, and the U.S. Geological Surveyâcompile data gleaned from outreach to public and private sector partners, and make it available to eligible law enforcement, emergency management, and other organizations at all levels of government. HIFLD is comprised of hundreds of data "layers," which encompass nearly every conceivable category of asset relevant to homeland security functions and are curated by designated partner agencies, or "stewards" as they are known. Layers include assets considered critical under any definition, which are essential to supporting lifeline CI functions of energy, communications, transportation systems, and water and wastewater systems. However, HIFLD also includes many asset categories that are not necessarily critical according to any given statutory or official definition of criticality, but may become critical in the context of specific emergencies or CI policy decisionsâfor example, truck driving schools, express shipping facilities, and cruise ship terminals. The Department of Health and Human Services (HHS) used HIFLD during the 2017 hurricane season to locate day care centers in impacted areas. These specific day care centers would likely not be defined as critical under the common statutory definition of CI, because they were not so vital to the functioning of the national public health system as a whole that physical loss of the facilities would be debilitating at the national level. However, knowledge of where these centers were located was essential in allowing HHS to provide a critical public health serviceâensuring the safety of children in a disaster zone. The HIFLD partnership model is intended to enable relevant agencies at all levels of government and certain private sector entities to leverage a large universe of readily-accessible infrastructure data to address real-world use cases. Unlike the NCIPP list, it does not elevate the status of specific systems and assets in ways that directly support official functions of federal oversight, regulation, and administration. However, it is widely used to inform preparedness and incident management activities of federal and SLTT agencies. The robust development of HIFLD partnerships at all levels of government in recent years contrasts with the declining state participation in NCIPP documented by GAO. Nonetheless, CIP-based approaches to inventory of CI assets remain relevant. For example, provisions of the 2017 National Defense Authorization Act related to national preparedness against electromagnetic threats and hazards required DHS to determine, to the extent practicable, "the critical utilities and national security assets and infrastructure that are at risk.... " Likewise, specific chemical manufacturing facilities posing a high risk for malicious exploitation continue to be subject to DHS inspection and regulatory enforcement under Chemical Facility Anti-Terrorism Standards (CFATS) first authorized by Congress in 2007. These regulations require owner-operators to protect their facilities against cyber and physical threats according to specified standards. Issues for Congress Congress may consider the implications of the policy shift towards system-level resilience for legacy programs, such as the NCIPP asset list. Continuing policy changes made by DHS may further reduce the profile of NCIPP specifically, and asset-protection approaches to CI risk management in general. Stakeholder participation in NCIPP is not cost-neutral, so Congress may consider the frequency of data calls, elimination of any overlapping efforts or duplication, or additional appropriations to support data gathering and analysis. Congress may also consider updates to National Asset Database requirements contained in the 9/11 Commission Act to ensure their continuing relevance and applicability to emerging CISA programs and priorities, and their alignment with the requirements of other congressionally authorized programs, such as the Homeland Security Grant Program. Understanding and Assessing CI Risk Efforts to identify and prioritize CI systems and assets are part of a larger national effort to systematically understand and assess homeland security risks. In recent decades, Congress has frequently sought authoritative assessments of national level risk to CI. Risk assessments may be used to inform planning and resource allocation decisions related to congressional appropriations, emergency preparedness, regulatory oversight of certain industries, federal grant funding, and voluntary security measures by CI owner-operators. DHS, which is responsible for coordination and oversight of the national infrastructure security effort, defines risk as the "potential for an unwanted outcome resulting from an incident, event, or occurrence, as determined by its likelihood and the associated consequences." DHS officially considers three factors as components of risk: threat, vulnerability, and consequence. DHS defines threat as "a natural or man-made occurrence, individual, entity, or action that has or indicates the potential to harm life, information, operations, the environment, and/or property." Threat assessments usually include data on human adversaries or natural hazards, such as extreme weather events. In the case of the former, threat estimates are based on available information about the identity of threat actors or groups, and their motivations, capabilities, and observed targets. Information on likely timing, methods, and frequency of attacks may also be incorporated if available. In the case of natural hazards, likelihood and severity of event occurrence is usually estimated using databases of past similar events in conjunction with predictive modeling of weather, tectonic activity, and the like. DHS defines vulnerability as the "physical feature or operational attribute that renders an entity, asset, system, network, or geographic area open to exploitation or susceptible to a given hazard." Vulnerability assessments provide information about characteristics of assets or systems that may leave them open to exploitation or damage from a threat or hazard. This may include, for example, software design characteristics or structural weaknesses in a levy system. Assessments may contain recommendations for adoption of resilience measures to mitigate identified vulnerabilities. DHS defines consequence as the "effect of an event, incident, or occurrence." As discussed in the previous section, criticality assessments focus on potential consequences of adverse events that disrupt or destroy infrastructure systems and assets. These assessments use a range of technical and non-technical methods of assessment. Research centers, universities, and industry groups develop and refine many different modeling methodologies to inform infrastructure security investments and activities of federal agencies and SLTT jurisdictions. In other cases, recognized subject-matter experts and responsible officials make non-technical assessments based upon accumulated knowledge and experience. Consequence-based criticality assessments can be used to inform risk assessments when combined with threat and vulnerability assessments. Since 2007, DHS has applied these elements of risk to its various planning, programs, and budget activities as a function: "risk is a function of threat, vulnerability, and consequence," or R=f(TVC). Critics have challenged the usefulness of this formula on several grounds. They assert DHS has not demonstrated the capability to accurately assign probabilities to rare events like terrorist attacks, or otherwise determine precise values for all the terms in the equation. Likewise, the terms of the equation are not necessarily independent from one another. Complex interactions between threat, vulnerability, and predicted consequences make application of this formula to grant applications and other resource allocation decisions related to risk mitigation problematic. DHS recognized in 2018 the need to provide a "complete systemic risk picture" for CI, and has proposed revision or updates to risk assessment approaches described above. Several significant legislative and executive branch initiatives related to CI risk assessment were instituted in 2018-2019 to establish the organizational basis for significant changes. The Cybersecurity and Infrastructure Security Agency Act of 2018 (CISA Act; P.L. 115-278 ) created the eponymous agency (CISA) as an operational component of DHS to take over the functions previously carried out by the National Protection and Programs Directorate (NPPD) as a DHS headquarters organization. The creation of a dedicated agency for infrastructure security elevates CI risk management as an area of policy focus. CISA has established the National Risk Management Center (NRMC) as a "planning, analysis, and collaboration center" to manage national CI risk. According to CISA, the NRMC will adopt an "evolved approach" to CI risk management, which emphasizes cross-sector analysis, and capabilities-oriented approaches to identification and prioritization of CI. Issues for Congress Congress may request information from CISA on its efforts to institutionalize new risk management methods and approaches, and to ensure that these are validated by qualified external reviewers. The National Laboratories, the relevant university-based DHS Centers of Excellence, certain other universities and research centers, industry research groups, and the Homeland Security Advisory Council may provide relevant expertise in infrastructure risk assessment methodology. The Homeland Security Act specifies how the Secretary of Homeland Security may leverage these organizational resources in support of homeland security activities. Congress may choose to exercise its discretion in establishing funding priorities and program guidance for these organizations as appropriate to support national CI security goals. Federal Organization to Address CI Federal organization to address CI issues has changed significantly in response to evolving threats and the accompanying maturation of the homeland security enterprise. Three distinct periods of development are covered below: the initial policy development and coordination initiatives of the late 1990s; the post-9/11 reorganization of federal government to counter terrorist threats to infrastructure; and the ongoing transition to the all-hazards resilience framework for infrastructure security. From the 1990s to the Homeland Security Act Federal attention to CI policy increased in the 1990s as concerns grew about the potential for malicious exploitation of the expanding interface between computing technologies and physical infrastructure. The Clinton Administration established the Commission on Critical Infrastructure Protection in 1996 with a mandate to produce a report on infrastructures "that constitute the life support systems" of the nation, with a focus on emerging cyber threats. Two years later the Administration issued PDD-63 based in part on the Commission's report, requiring the government "to swiftly eliminate any significant vulnerability" of critical infrastructures to "non-traditional" cyber or physical attack within five years. The organizational directives set forth in PDD-63 focused on increasing interagency coordination by leveraging existing federal entities. The National Coordinator for Security, Infrastructure Protection and Counter-Terrorism, the senior executive position created by the directive, did not report directly to the President, and his duties were confined largely to leadership of an interagency coordination group and service as executive director of a stakeholder advisory group. Congress chartered a blue ribbon commission in 1999 to assess both terrorist threats to national security and early efforts to implement PDD-63. The Gilmore Commission, as it was known, submitted a report to Congress and the White House in December of 2000 titled "Toward a National Strategy for Combating Terrorism." The report found that implementation of PDD-63 was incomplete, and that the nascent CIP enterprise had developed only fitfully since it was signed in 1998. Specifically, it found Information Sharing and Analysis Centers (ISACs) created to facilitate broader risk awareness in government and industry about infrastructure vulnerabilities and threats were "still embryonic." The National Coordinator for Security, Infrastructure Protection, and Counterterrorism had broad authorities that left little time for CIP responsibilities, and lacked program and budget authority. No overall national CIP strategy existed to guide government actions. The National Infrastructure Protection Center (NIPC), responsible for CI threat and vulnerability assessments, warning and response coordination, and law enforcement investigation and response activities, had taken few concrete actions to establish its basic functions under Federal Bureau of Investigation (FBI) auspices. Consolidation and the Creation of DHS The 9/11 attacks had a galvanizing effect on homeland security policy, and, by extension, critical infrastructure protection. Policy initiatives that had previously languished became matters of urgent national concern overnight. Two broad tracks of legislative action emerged. The first favored reestablishing the Office of Homeland Security and the national coordination role under statute, with the addition of certain budget authorities, responsibilities, and oversight requirements, similar in organization and scope to the National Office of Drug Control Policy. This option followed the recommendations of the Gilmore Commission, and would have left much of the existing federal government structure intact, focusing on improved interagency coordination to ensure increased protection against major terrorist attacks. The second legislative track favored comprehensive consolidation of government counterterrorism functions under a single federal agency to be named the National Homeland Security Agency. This track followed the recommendations of a blue ribbon panel chartered by DOD in 1998 to study 21 st century security issues, known as the Hart-Rudman Commission. Key supporters in Congress believed that dispersion of homeland security-related functions across federal departments and agencies whose missions were not primarily security related had left the nation vulnerable to terrorist attacks. They favored consolidation to ensure clearer lines of executive authority, centralization of relevant counterterrorism functions, and better interagency coordination, among other anticipated benefits. The Homeland Security Act of 2002 generally reflected the approach that the Hart-Rudman Commission had advocated for. The Homeland Security Act P.L. 107-296 transferred many infrastructure security functions to DHSâfunctions which previously had been regarded as properly belonging to the various diverse spheres of business, finance, commerce, energy, public health, agriculture, and environmental protection. GAO designated creation of DHS as high risk in 2003 because of the large number of agencies being transferred, and the management challenges this presented to the new department. DHS ultimately incorporated nearly three dozen federal agencies and other entities into four major directorates: Information Analysis and Infrastructure Protection, Science and Technology, Border and Transportation Security, and Emergency Preparedness and Response. Although several long-established agencies such as the Coast Guard retained customary missions not related to homeland security, the new departmental structure prioritized their homeland security related missions, especially counterterrorism. Policy and Budgetary Implications of Organizational Change This approach represented a change from what infrastructure policy had previously been. The White House had regarded CIP as only tangentially related to counterterrorism functions of government before 9/11. The Office of Management and Budget (OMB) stated in a report to Congress on federal counterterrorism programs, submitted in August 2001, that "CIP is a separate but related mission." The authors justified this distinction on the grounds that infrastructure risks were diverse, and included many hazards beyond terrorism to include equipment failure, human error, weather and natural disasters, and criminal activity. They wrote, "This year's report focuses on combating terrorism, mentioning CIP efforts only where they directly impact the combating terrorism mission." That direct impact, according to budget estimates in the 2001 report, was negligible. CIP funding that overlapped counterterrorism amounted to less than half of one percent of the total CIP funding of $2.6 billion requested by the White House for the 2002 fiscal year. 9/11 changed the budget picture significantly, as seen in the 2003 OMB report to Congress. Infrastructure programs and activities that had not previously been seen as directly impacting the combating terrorism mission were included in the report, and their relation to counterterrorism efforts highlighted. Requested budget increases for FY2004 reflected the newfound centrality of counterterrorism priorities across federal departments and agencies with infrastructure-related programs. The White House request for FY2004 was $12.1 billion, representing an increase of more than 450% over its final pre-9/11 request, and included 28 federal entities outside the newly-created DHS. The 2003 report did not provide a separate estimate of the proportion of the CIP-related budget that overlapped counterterrorism, as the 2001 report had. This was hardly necessary in any case, because CIP in all its diverse aspects had largely been redefined as a counterterrorism mission. Evolution of CI Policy Since the Establishment of DHS Creation of a new purpose-built department was intended to ensure that CIP and other core homeland security missions were institutionalized as top federal priorities under unified leadership. Under the new consolidation of functions, more than half of the government's pre-9/11 homeland security funding was transferred to a single agency. However, the amalgam of independent agencies transferred to DHS retained significant independence as operational components of the new Department. Likewise, other departments and agencies outside DHS retained many of the infrastructure security functions they had before 9/11. Therefore, despite significant changes, CIP remains a highly distributed enterprise that competes for limited resources with other priorities across the federal government. Perceived Threat of Terrorism and CIP Priorities As long as the threat of terrorism continued to be an overriding national priority, counterterrorism continued to be a focal point for critical infrastructure security policy. However, by the time Hurricane Katrina struck the Gulf Coast in August 2005, nearly four years after the 9/11 attacks, public perception of the terrorist threat had already softened considerably. In the immediate aftermath of the attacks, 46% of Americans surveyed by Gallup named terrorism as the most important problem facing the United States. By the second half of 2005, the percentage hovered between 6%-8%. This broad trend has continued, with periodic upticks caused by high-profile incidents. Gallup surveys in early 2019 did not list terrorism as a category of public concern, because it did not garner sufficient responses to be included in results. After Katrina, the well-publicized failure of the extensive levy system designed to protect New Orleans from catastrophic floods further highlighted the vulnerability of critical systems and assets to diverse hazards besides terrorism. Issues of equipment failure, human error, weather and natural disasters, and criminal activity highlighted in the pre-9/11 OMB report (described above) reemerged as national-level policy concerns. New Strategic Directions In 2006, the Critical Infrastructure Task Force of the Homeland Security Advisory Council initiated a public policy debate arguing that the government's critical infrastructure policies were focused too much on protecting assets from terrorist attacks and not focused enough on improving the resilience of assets against a variety of threats. According to the Task Force, such a defensive posture was "brittle." Not all possible targets could be protected and adversaries could find ways to defeat defenses, still leaving the nation having to deal with the consequences. In 2008, as part of its oversight function, the House Committee on Homeland Security held a series of hearings addressing resilience. At those hearings, DHS officials argued that government policies and actions did encourage resilience as well as protection. Even so, subsequent policy documents made greater reference to resilience. The 2010 Quadrennial Homeland Security Review (QHSR), the first top-level DHS strategic review submitted to Congress under Title VII of the Homeland Security Act, highlighted the diversity of missions and stakeholders in what had become an expansive enterprise. The QHSR stated that, "while the importance of preventing another terrorist attack in the United States remains undiminished, much has been learned since September 11, 2001, about the range of challenges we face." Examples of threats and hazards included natural disasters (specifically, Hurricane Katrina), widespread international cyberattacks, the expansion of transnational criminal activities, and contagious diseases. The QHSR noted the leadership role of DHS in managing risks to critical infrastructure, as well as other homeland security missions related to immigration, border security, cybersecurity, and disaster response. However, it presented homeland security as a decentralized enterprise shared by diverse stakeholders in the public and private sector. "[A]s a distributed system," the report read, "no single entity is responsible for or directly manages all aspects of the enterprise." In 2013, PPD-21 superseded HSPD-7, which had provided authoritative policy guidance for federal infrastructure protection for a decade. PPD-21, which remains in force, informed development of the 2013 NIPP. It placed less emphasis protection of physical infrastructure assets against terrorist threats than HSPD-7 did. Rather, it emphasized all-hazards CI resilience as part of a broader national disaster preparedness effort. "Critical infrastructure must be secure and able to withstand and rapidly recover from all hazards," it stated. "Achieving this will require integration with the national preparedness system across prevention, protection, mitigation, response, and recovery." The 2014 QHSR further expanded the boundaries of critical infrastructure security beyond terrorism-related threats to include factors such as aging and neglect of critical systems and assetsârecasting once-ordinary issues of investment, maintenance, and utility service provision as homeland security concerns. DHS did not submit a QHSR to Congress in 2017 as required by the Homeland Security Act. This means there is no current departmental-level statement that specifies DHS strategic direction and priorities for infrastructure security or other homeland security goals. The boundaries of responsibility for critical infrastructure securityâas well as the definition of critical infrastructure itselfâcontinue to be negotiated among Congress, executive branch departments and agencies, SLTT jurisdictions, and a diverse array of private-sector stakeholders. For example, in 2002 Congress directed the U.S. Department of Agriculture (USDA) to transfer the Plum Island Animal Disease Center to DHS under the Homeland Security Act ( P.L. 107-296 ), based partly on concerns that terrorists might target the nation's food and agriculture sector with contagious pathogens. However, in 2018 Congress authorized transfer of a replacement facility and its functions back to USDA from the DHS Science and Technology Directorate under the Consolidated Appropriations Act of 2018 ( P.L. 115-141 ), as proposed by the White House in its FY2019 budget request. After a relatively brief period of extensive consolidation in the early 2000s, critical infrastructure security in the federal government has evolved into a distributed enterprise loosely structured by institutionalized partnerships and policy frameworks that increasingly emphasize an all-hazards approach to critical infrastructure security. Issues for Congress Congress may consider which aspects of critical infrastructure security properly reside within the homeland security enterprise, and which relate more closely to government responsibilities in areas of commerce, trade, and public utilities regulation. The distributed enterprise model of critical infrastructure security based on an all-hazards approach potentially elides boundaries between homeland security and other dimensions of infrastructure policy. Likewise, the definition of homeland security itself continues to evolve beyond its counterterrorism roots. DHS has not submitted a top-level strategy to Congress since the 2014 QHSR. (As noted above, a quadrennial review was due to Congress no later than December 31, 2017.) A more current strategy or other high-level policy statement might serve to more clearly define current Departmental goals, the parameters of its activities related to critical infrastructure security, and how these relate to activities of interagency partners with infrastructure-related responsibilities. Congressional interest in homeland security strategy was indicated by the Quadrennial Homeland Security Review Technical Corrections Act of 2019 ( H.R. 1892 ), which passed the House of Representatives unanimously and was referred to the Senate Committee on Homeland Security and Governmental Affairs on May 15, 2019. The proposed act would require DHS to consult with relevant advisory committees when developing its capstone strategy, and to more directly link the strategy with budgeting, program management, and prioritization, among other provisions, including new deadlines linked to the budget cycle rather than the end of the calendar year. Congress has periodically acted to define organizational relationships within DHS. The Department was originally formed with four main directorates, each of which corresponded with a primary homeland security mission. The centralized directorate structure under headquarters management has given way to a more federated structure that emphasizes the operational role and organizational identity of its operational components. Most recently, the National Protection and Programs Directorate, which administered many of the Department's infrastructure partnership programs, was made an agency within DHS through the 2018 CISA Act. Congress may consider the nature of intra-Departmental organization and relationships within DHS as appropriate, and what degree of centralization or federation best supports the critical infrastructure security mission. The Role of the Private Sector Although much of the nation's CI is privately owned, the public may be put at risk if these privately owned critical systems fail. Management of CI risk within a complex ownership and regulatory environment presents enduring policy challenges. Legislators and other policymakers have generally favored variations of the federated partnership model first elaborated in PDD-63, which relies on voluntary collaboration between the public and private sectors (as opposed to regulatory mandates) to guide investment in critical infrastructure security. Under this model, CI owner-operators, not the government, have ultimate responsibility for assessing and mitigating risk at the enterprise level. At the same time, Congress has directed executive branch agencies to assess and manage risk at the national level. Infrastructure risk management is structured under this framework as a collaborative endeavor between the public and private sectors reliant on incentives, information sharing, and voluntary investments in security. Investments in critical infrastructure security in the private sector are largely the purview of private individuals or entities, but many of the most serious risks are borne collectively by the public and larger business community. Under the current partnership structure, government and private-sector representatives collaboratively ascertain what individual enterprise-level investments in security and resilience are necessary to manage CI risk at the societal level. While there is little question that businesses, government, and society have a "clear and shared interest" in CI resilience, it is often difficult at the policy level to work out exactly who should bear responsibility for up-front costs of investment, and what mandatory requirements, regulatory oversight measures, and cost-recovery mechanisms might be necessary in a given case. Incentives for Private Sector Participation By and large, the federal government relies upon the private sector to voluntarily develop CI risk management strategies and mitigation investments to support national resilience goals. The 2013 NIPP states that, "Government can succeed in encouraging industry to go beyond what is in their commercial interest and invest in the national interest through active engagement in partnership efforts." In practice, government efforts to encourage voluntary investments in infrastructure resilience through public-private partnerships have varied in extent and effectiveness, particularly when risks in question are diffuse and involve low-probability/high-consequence events such as major terrorist attacks or earthquakes. The main incentives for industry participation are threefold: improved access to risk information from government sources on security threats and hazards; the value of analyses of national-level risks that exceed the capabilities of most private companies to provide for themselves; and the opportunity to engage with government to influence CI policy. Congress acted to reduce barriers to information sharing between the public and private sectors through the Critical Infrastructure Information Act of 2002, which is designed to ensure confidentiality of industry information shared with DHS in good faith under the Protected Critical Infrastructure Information (PCII) program. Likewise, a number of public-private coordination councils established under the authority of Presidential directives provide a forum for policy discussions and deliberation. A 2019 report by the Organization for Economic Cooperation and Development (OECD) found that voluntary information sharing and collaboration partnerships in advanced industrialized economies "[do not] necessarily guarantee a strong enough incentive structure to ensure that sufficient investments are effectively made to attain expected resilience targets." Most developed countries augment voluntary policy instruments with regulatory mandates to spur investments in resilience in certain sectors. Regulatory mandates tend to be favored for CI sectors or sub-sectors where incident impacts are potentially catastrophic and elicit broad public concern, such as nuclear meltdowns, gas pipeline explosions, airliner crashes, or terrorist theft of chemicals for use in explosives. According to an academic survey of public-private partnerships for CI security, collaborative approaches more broadly apply "as risks become more privatized" and "harms are more divisible and isolated with respect to their impacts." Federal Regulation Policymakers have generally sought to limit the regulatory reach of government within CI security enterprise. For example, PDD-63 stated that "we should, to the extent feasible, seek to avoid outcomes that increase government regulation or expand unfunded government mandates to the private sector." The Homeland Security Act created an organizationâDHSâwith wide-ranging responsibilities, but relatively narrow regulatory mandates. The Transportation Security Administration has (but does not exercise) regulatory oversight over oil and gas pipeline security. The Coast Guard regulates certain aspects of port securityâa mission that long predates the transfer of the service to DHS under the Homeland Security Act. Finally, CISA directly regulates certain chemical facilities under the Chemical Facilities Anti-Terrorism Standards program to prevent terrorist exploitation of the chemical industry. Many other federal, state, and local agencies exercise regulatory authorities that are related to infrastructure security, but are not necessarily specific to homeland security. For instance, the Nuclear Regulatory Commission (NRC) regulates civilian nuclear facilities and enforces extensive safety and reporting requirements. Many of these requirements are traceable to the partial reactor meltdown at Three Mile Island in 1979, and as such are treated as industrial safety and reliability issues in most cases. Many of the aspects of infrastructure security most relevant to homeland security, such as facility protection against deliberate attacks, are overseen by the NRC, not DHS. Agencies with dual responsibilities for regulation and partnership typically separate the two rolesâa lesson learned from early experience with NIPC, which was not clearly separated from the law-enforcement functions of the FBI, and thus had difficulty eliciting participation from private sector entities in its early stages. (See " From the 1990s to the Homeland Security Act " section). The preponderance of DHS infrastructure security programs focus on enhancing voluntary collaboration with infrastructure security partners through development of information sharing, analysis, training, and coordination capabilities, as well as voluntary on-site assessments in certain cases. The Voluntary CI Partnership Structure Current CI partnership structures are organized under the authority of PPD-21. The directive is implemented through sector and cross-sector partnership structures described in the 2013 NIPP. The 2013 NIPP outlined an infrastructure protection effort that was less centralized and less focused on critical asset protection than previous iterations of the NIPP, instead emphasizing distributed responsibility among an expansive group of stakeholders committed to common national resilience goals. NIPP partnerships at the federal level are administered by CISA in partnership with other DHS components, and other federal departments and agencies. Government Coordinating Councils and Sector-Specific Agencies Each of the 16 CI sectors under the NIPP framework has its own Government Coordinating Council (GCC) and Sector Coordinating Council (SCC). GCCs are made up of federal and SLTT agencies, and, according to the NIPP, enable "interagency, intergovernmental, and cross-jurisdictional coordination" on infrastructure issues of common concern. Each GCC is led by a designated federal agency with sector-relevant responsibilities and expertise, known as a Sector-Specific Agency (SSA). DHS leads or co-leads 10 of the 16 GCCs as the SSA. Other SSAs include the Environmental Protection Agency, the Government Services Agency, and the departments of Agriculture, Defense, Energy, Health and Human Services, Transportation, and Treasury. (See Table 1 for description of CI sectors and SSAs, and Appendix C for visualization of CI partnership structure). SSAs leverage various NIPP partnership structures to formulate sector-specific infrastructure protection plans that support the overall goals of the NIPP, taking unique sector characteristics and requirements into account. The sector-specific plans contain broad analyses of sector risks, interdependencies with other CI sectors, and stakeholders and partners, which together are used to develop sector-specific resilience goals and measures of effectiveness. Sector Coordinating Councils Each SCC is made up of private-sector trade associations and individual CI owner-operators. SCCs are self-organized and self-governed, but must be recognized by the corresponding GCC as "appropriately representative" of the sector. They have an advisory relationship with the federal government, and also have coordination and information-sharing functions between government and private-sector stakeholders. SCCs may also support independently organized Information Sharing and Analysis Centers (ISACs) specific to their sector to facilitate information sharing among stakeholders. The National Council of ISACs currently lists 24 member organizations. ISACs maintain operations centers, deploy representatives to the National Cybersecurity and Communications Integration Center (NCCIC) and National Infrastructure Coordinating Center (NICC), conduct preparedness exercises, and prepare a range of informational products for their members. Reliable data on the scale and scope of private-sector participation in SCC activities across CI sectors is not available, but it varies widely depending on sector characteristics. Cross-Sector Councils Four cross-sector councils serve to represent key stakeholder groups whose broad interests are not specific to one sector. The State, Local, Territorial, and Tribal Government Coordinating Council (SLTTGCC) is intended to enhance infrastructure resilience partnerships between SLTT jurisdictions, and to represent their common governance-related interests in GCC and SCC deliberations. The Critical Infrastructure Cross-Sector Council consists of the chairs and vice-chairs of the SCCs, and coordinates cross-sector issues among private-sector CI stakeholders. The Regional Consortium Coordinating Council represents regional CI resilience coalitions and encourages sharing of best practices among them. The Federal Senior Leadership Council (FSLC) is composed of senior officials from federal departments and agencies responsible for implementation of the NIPP, and is chaired by the CISA Director or his designee. It exercises leadership over the other cross-sector councils. According to its charter, the FSLC forges policy consensus among federal agencies on CI risk management strategies, coordinates "issue management resolution" among the other cross-sector councils, develops coordinated resource requests, and advances collaboration with international partners, among other activities. Advisory Councils The various NIPP partnership councils may organize certain deliberations under the auspices of the Critical Infrastructure Partnership Advisory Council (CIPAC), which was first established in 2006. The CIPAC Charter has been renewed several times since then, most recently in 2018. Under certain circumstances, CIPAC provides NIPP coordinating councils and member organizations legal exemption from Federal Advisory Committee Act (FACA) provisions for open meetings, chartering, public involvement, and reporting in order to facilitate discussion between CI stakeholders on sensitive topics relating to infrastructure security. CIPAC engages its government and private-sector stakeholders through the NIPP partnership structure to develop consensus policy advice and recommendations for DHS and other relevant agencies. The Homeland Security Advisory Committee (HSAC) provides advice and recommendations to the Secretary of Homeland Security on matters related to homeland security. Members are appointed by the Secretary, and include leaders from state and local government, first responder communities, the private sector, and academia. The Secretary may also establish subcommittees to focus attention on specific homeland security issues as needed. CI-relevant subcommittees have focused on cybersecurity and emerging technologies. The National Infrastructure Advisory Council is a committee made up of senior industry leaders who advise the President and SSAs on CI policy. It is not formally part of the NIPP partnership structure, but plays an intermediary role between the various coordination councils, the Secretary of Homeland Security, and the President by providing a mechanism for consultation between public and private sector representatives at the highest levels of government. First established by executive order on October 16, 2001, it is tasked with monitoring "the development and operations of critical infrastructure sector coordinating councils and their information sharing mechanisms" and encouraging private industry to improve risk management practices, among other activities. This partnership structure is more flat than hierarchical, and is realized in multiple formats to include symposia, research collaborations, working groups, policy deliberations, and emergency preparedness and response activities. By design, participation in these activities often crosses organizational lines and includes governmental and non-governmental stakeholders. Increasingly, partnership activities include representatives from multiple CI sectors, due to recognition of the interdependencies inherent in complex CI systems and the general policy trend favoring system resilience over asset protection. Operational Elements of the Partnership System The distributed partnership structure has several operational elements maintained by DHS that provide centralized hubs for various non-regulatory coordination and information sharing functions. The National Infrastructure Coordinating Center (NICC) collects, analyzes, and shares threat or other operational information throughout the critical infrastructure partnership network on a real-time basis. It also conducts training and exercises and provides decision support to private sector partners. It is part of the DHS National Operations Center, which serves as the principal operations center for the Department of Homeland Security. Additionally, the National Cybersecurity and Communications Integration Center (NCCIC) serves as a monitoring and incident response center for incidents affecting cybersecurity and communications networks, and also performs several related analytic functions. CISA administers both the NICC and the NCCIC. Assessing the Effectiveness of This Approach The underlying policy premise of the current partnership system is that removing or mitigating disincentives to information sharing and increasing trust between the public and private sector will lead to greater industry willingness to invest in system-level resilience. Three related questions may be considered: To what extent are private sector owner-operators actually embracing collaboration and information-sharing initiatives offered by federal departments and agencies under the current partnership system? Is private-sector participation in these initiatives incentivizing effective investments (beyond those made for business reasons) in programs to reduce overall public risk? What legislative remedies are appropriate in cases where broader and more effective investments in risk reduction are necessary? Given the diversity and breadth of the critical infrastructure enterprise as currently defined, the answers to these questions vary across sectors. Rigorous empirical analyses that might shed light on the extent and effectiveness of collaboration within the voluntary framework are scarce. A 2013 study found that fewer than half of the 16 CI sectors had strong "communities of interest" that actively engaged in CIP issues through NIPP partnership structures. CI communities of interest were strongest in those sectors with strong trade or professional associations unified by relatively specific threats posing individual risk to member companies. A 2011 study found that the most important factor in private-sector risk mitigation investment is a company's own cost-benefit analysis; and that many CI owner-operators believed government will (or should) cover externalized social costs incurred by loss or disruption of company facilities due to a terrorist attack. GAO testimony provided to Congress in 2014 asserted that DHS partnership efforts faced challenges, and identified three key factors that impact effectiveness of the partnership approach: recognizing and addressing barriers to sharing information, sharing the results of DHS assessments with industry and other stakeholders, and measuring and evaluating the performance of DHS's partnership efforts. GAO found that DHS did not systematically collect data on reasons for industry participation or non-participation in security surveys and vulnerability surveys, and whether or not security improvements were made as a result. GAO asserted that DHS cannot adequately evaluate program effectiveness absent these measures. Although DHS concurred and agreed to corrective measures, GAO reported that it had not verified DHS's progress in implementing them. Overall, the picture that emerges from this testimony and other sources is one of extensive partnership activity across multiple CI sectors, but relatively few measures to systematically assess effectiveness of this activity in meeting CI resilience goals. Issues for Congress Congress may explore the progress DHS has made in implementing GAO recommended data gathering and analysis initiatives. Availability of data and rigorous analyses may enable Congress to better ascertain the effectiveness of the partnership system in incentivizing industry information sharing and investments in risk reduction. CISA and its predecessor organizations have not been able to provide reliable data indicating the reach and effectiveness of public-partnership programs in incentivizing bidirectional information sharing and efficient private investments in national level (as opposed to enterprise level) resilience. (The volume and quality of industry information shared with DHS through the PCII program may be one of several useful indicators of program effectiveness.) Congress may address this gap, such as through introduction of appropriate reporting requirements. Congress may also consider enhancement of regulatory authorities of federal departments and agencies as appropriate to meet national CI resilience goals in cases where voluntary measures do not result in effective industry action to mitigate risk, or emergent threats make immediate action necessary. One recent example is the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), which expands the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS) to prevent foreign adversaries from exploiting the legitimate trade system to gain control of CI assets or related information. Likewise, Congress may exercise oversight in cases where regulatory authorities related to infrastructure security exist but are not exercised, as in the case of TSA described above. CISA plans to maintain the current sector specific public-private partnership structures as the preferred vehicle for information sharing and policy coordination. Congress may consider whether adjustment or replacement of these structures is needed to streamline and better align partnership efforts with the emerging federal risk management approach, which emphasizes inter-sectoral analysis and resilience rather than sector-specific asset identification and protection. Appendix A. National Critical Functions Appendix B. Key Terms Appendix C. Sector and Cross-Sector Coordinating Structures Summary:	null	96	66,127	66,129	66,129	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction Critical infrastructure (CI) refers to the machinery, facilities, and information that enable vital functions of governance, public health, and the economy. Adverse events may occur when CI systems and assets are subject to loss or disruption for any cause, whether by natural disasters or deliberate attack. This report highlights four key areas of enduring policy concern for Congress, and outlines the parameters of ongoing debates within them. A section is devoted below to each key area: defining and identifying CI; understanding and assessing CI risk; federal organization to address CI; and the role of the private sector. Defining and Identifying CI Presidential Decision Directive 63 (PDD-63) on critical infrastructure protection, released in 1998, was the first high-level policy guidance for critical infrastructure protection in the contemporary era. It framed the critical infrastructure issue in terms of national vulnerability to potentially devastating asymmetric attacks. The directive presented U.S. military economic and military might as "mutually reinforcing and dependent" elements of national power dependent upon critical infrastructure to function properly. The directive provided an austere definition of critical infrastructure as "those physical and cyber-based systems essential to the minimum operations of the economy and government." PDD-63 set ambitious national goals for the elimination of any significant national vulnerability to "non-traditional" asymmetric cyber or physical attacks on CI. In practice, it has proven extremely difficult even to establish consistent criteria for assessing the criticality of specific assets and systems, in part because criticality relates not only to the physical attributes of infrastructure systems and assets, but also to the perspectives, values, and priorities of those making the assessment. The sheer scale, complexity, and interconnectedness of the U.S. and global economies complicate efforts to identify and inventory critical assets and systems. For example, the United States electricity sub-sector alone has nearly 7,000 operational power plants, which in turn depend upon other infrastructure assets and complex supply chains to support continuing operations. The Evolving Definition of CI The most commonly cited statutory definition of critical infrastructure was established in the USA PATRIOT Act of 2001 ( P.L. 107-56 ), and echoes PDD-63 in its focus on protecting the industrial and demographic foundations of national mobilization against catastrophic risks. The USA PATRIOT Act defines critical infrastructure as "systems and assets, whether physical or virtual, so vital to the United States that the incapacity or destruction of such systems and assets would have a debilitating impact on security, national economic security, national public health or safety, or any combination of those matters." Over time, critical infrastructure policy has expanded from its earlier emphasis on the physical foundations of national power to a wider concern with provision of essential services and customary conveniences to the public. The universe of threats to CI commonly considered by Congress and executive branch departments and agencies has also expanded since the early post-9/11 period. The intelligence community continues to devote significant attention to asymmetric threats to CI posed by state and non-state adversaries who lack the means to directly confront U.S. military power, or for strategic reasons choose to avoid direct military confrontation. Asymmetric attacks may use a combination of physical or cyber means to damage or disrupt domestic CI systems and assets, or cause mass civilian casualties. However, natural disasters and other causes of damage and disruption not directly linked to terrorism or other intentional acts have become more salient elements of critical infrastructure policy and practice in the years since 9/11. Although the USA PATRIOT Act's definition of critical infrastructure remains law and is still commonly cited as a basis for official policy, CI policymakers have lowered the threshold of criticality to include infrastructure-related events with disruptive, but not necessarily catastrophic, effects at all levels of society and government. Policy increasingly reflects local, society-centric perspectives on infrastructure that place emphasis on it as an enabler of prosperity, public safety, and civic life. For example, National Infrastructure Protection Plan (NIPP), published by DHS in 2013 as official policy guidance for interagency coordination and public-private partnerships, defines critical infrastructure as "assets, systems, and networks that underpin American society," and considers impacts of a wide range of natural and manmade hazard events at the national, regional, and local levels. Successive Administrations since 1998 have gradually expanded the aperture of CI policy beyond protection of sectors regarded as essential to national security, the economy, and public health and safety. This reflects a global trend among developed countries toward CI policies favoring society-centric resilience at the system level over security-oriented protection of specific assets deemed at risk. In January 2017, the Department of Homeland Security (DHS) designated U.S. election systems as a sub-sector of the Government Facilities critical infrastructure sector, which also includes national monuments and icons and education facilities. The components of the elections systems as described by DHS include physical locations (storage facilities, polling places, and locations where votes are tabulated) and technology infrastructure (voter registration databases, voting systems, and other technology used to manage elections and to report and validate results). The criticality of these facilities, systems, and assets derives primarily from their essential role in supporting the nation's civic life. Currently, there are 16 critical infrastructure sectors as set forth in Presidential Policy Directive 21 (PPD-21), "Critical Infrastructure Security and Resilience," and elaborated in the 2013 NIPP. The federal government uses CI sectors as an organizing framework for voluntary public-private partnerships with self-identified CI owner-operators. Public-private partnership activities are non-regulatory in nature. DHS has overall responsibility for coordination of partnership programs and activities, but in several cases other federal agencies are assigned leading roles as Sector-Specific Agencies (SSAs). (The roles and responsibilities of the public and private sectors are discussed in the final section of this report, " The Role of the Private Sector .") Together, these sectors represent a broad and diverse array of national economic activity and social life, each with its own distinct characteristics. The expanding multiplicity and breadth of definitions used for critical infrastructure designation has policy implications for Congress. Each officially-designated critical infrastructure sector is represented by formal coordination bodies, which include numerous private sector stakeholder groups and representatives of state, local, tribal, and territorial (SLTT) governments. In addition, industry and non-profit groups may participate in certain sector-wide activities. As sectors mature, new public and private sector communities of interest emerge within the broader critical infrastructure enterprise, each with its own unique perspective on what criticality means as applied to the nation's infrastructure. For this reason, there is no single, consistently applied definition of critical infrastructure. Even though the most commonly cited statutory definition of CI has not changed in nearly two decades, identification and prioritization of critical systems and assets as categories of applied practice reflects diverse interests and perspectives, which continue to evolve. This suggests that definitions of critical infrastructure are not merely a matter of semantics, and the multiplicity of official definitions in common use is not simply a matter of imprecision. Rather, variation reflects diverse constituencies' efforts to negotiate the boundaries of congressional responsibility, the scope of government programs, and the nature and extent of public-private sector relationships at any given point in time. CI Protection vs. CI Resilience Critical infrastructure policy has taken on two distinct orientations that significantly overlap but nonetheless reflect different organizational perspectives and requirements. Critical infrastructure protection (CIP) emphasizes the identification, prioritization, and protection of infrastructure assets. Criticality from this perspective is generally defined in terms of the consequences of asset loss or system disruption (i.e., an infrastructure asset or system is critical to the degree that loss or disruption of service would have system-level impacts on essential functions of society, the economy, or government). Critical infrastructure resilience (CIR) emphasizes broad investments in hazard mitigation and preparedness during steady-state periods, and adaptation during emergencies, to ensure availability of critical infrastructure functions that enable provision of essential services. Much of the major legislation that serves as the foundation for CI policy was passed in the immediate aftermath of the 9/11 attacks, when concerns with physical protection of critical assets predominated in policy circles. However, policy practice in the United States and other developed countries has increasingly favored a focus on system resilience over asset protection. As such, national CI policy reflects a hybrid approach that contains elements of both CIP and CIR. This can exacerbate already complex issues inherent in defining criticality and identifying what exactly is critical in the context of time and place. Recognizing this inherent tension, this report uses the term "critical infrastructure security" to discuss CI policy without favoring CIP or CIR. CIP Asset Lists, Catalogs, Databases, and Reports CIP-focused legislation and government policy directives since 2001 have frequently contained requirements for the creation of asset lists, catalogs, databases, and reports to identify systems and assets that meet a given threshold of criticality, and thus require higher than ordinary levels of protection against plausible threats. The logic is simple on its face: we need to know what we have; what is most important; and what we need to protect. However, application of this logic often introduces many complexities in actual practice, and so national-level issues of asset identification and prioritization persist across all CI sectors. Nonetheless, inventory requirements are typically the first step of the broader risk management strategies applied to critical infrastructure protection, both at the national level and in the private sector at the enterprise level. Definitional criteria of criticality will likely continue to be a subject of considerable debate within the CI policy community, but the forcing mechanism provided by list/no-list decisions serve to define what specific assets are considered critical in actual practice. Policy Guidance for Asset Identification One of the earliest examples of a CIP-based inventory requirement is the National Strategy for the Physical Protection of Critical Infrastructures and Key Assets , released in February 2003 just before the newly created Department of Homeland Security began operations. The strategy directed DHS to develop a "uniform methodology for identifying facilities, systems, and functions with national-level criticality," and use it to "build a comprehensive database to catalog these critical facilities, systems, and functions." It was followed by the December 2003 release of Homeland Security Presidential Directive 7: Critical Infrastructure Identification, Prioritization, and Protection (HSPD-7), which served as the basis of CI policy development and implementation for the next decade until it was superseded by PPD-21 in 2013. HSPD-7 shared the CIP-orientation of other early policy documents, directing federal departments and agencies to "identify, prioritize, and coordinate the protection of critical infrastructure and key resources in order to prevent, deter, and mitigate the effects of deliberate efforts to destroy, incapacitate, or exploit them." DHS claimed in the 2006 NIPPâthe first plan of its typeâthat it had compiled a comprehensive CI database to meet the CI identification requirement. However, a 2006 DHS Inspector General (IG) report found that these early efforts to produce a national database of CI assets suffered from conceptual and methodological shortcomings. The report stated that the Department's National Asset Database had rapidly grown from 160 key assets in 2003 to include 77,069 assets in 2006, and that listed assets included everything from nuclear power plants and dams to local petting zoos and water parks. The IG report concluded that the database contained many entries that listed "unusual, or out-of-place, assets whose criticality is not readily apparent," without providing assurance that truly critical assets were included. Likewise, data collection procedures were not standardized, so that San Francisco listed its entire light rail system as a single asset, while New York City listed its subway stations as multiple individual assets. Congressional Oversight of Asset Identification Congress subsequently included provisions for the National Asset Database as part of the Implementing the Recommendations of the 9-11 Commission Act of 2007 ( P.L. 110-53 , The 9-11 Commission Act). The legislation requires compilation of a national database of vital systems or assets, and creation of a separate classified list of "prioritized critical infrastructure," to be updated annually and submitted to Congress. The classified list is to include assets that the Secretary determined would cause national or regional catastrophic effects if subject to disruption or destruction. Other provisions include definitions of infrastructure-related terms, and a requirement for the Secretary to implement certain quality control procedures to ensure that asset nominations from state governments or other sources meet the threshold of criticality as determined by the Secretary. A 2013 Government Accountability Office (GAO) report found that DHS had improved its processes for critical asset identification, but that significant questions regarding reporting criteria and methodology persisted. The report documented frequent changes in nomination and adjudication criteria and reporting format used by National Critical Infrastructure Prioritization Program (NCIPP), which DHS instituted to fulfil the congressional mandate of the 9-11 Commission Act. After 2009, NCIPP assessed criticality of all nominations according to four types of potential adverse consequences above certain designated thresholds: fatalities, economic loss, mass evacuation length, and national security impacts. Methodological adjustments were subsequently made in some cases to account for unique CI characteristics. For example, collapse of the U.S. financial system would likely not cause immediate mass casualties, but might still have debilitating second-order effects on national security, economic security, and public health and safety. The same might also apply to election infrastructure used in federal elections, which was added as a CI sub-sector in 2017. The report noted that asset nomination vetting methods had not undergone an independent peer review. It recommended to Congress that DHS commission such a review to "assure that the NCIPP list identifies the nation's highest priority infrastructure." Policy and Legal Implications of Criticality Designation Being listed as a prioritized asset in the NCIPP immediately elevates a given asset making it an object of national significance under relevant statutes. This action may affect government prioritization of certain on-site risk assessments, administration of regulatory regimes and grant programs, conduct of certain criminal prosecutions, and emergency preparedness and response coordination, among other activities. Exact numbers of nominated assets are not publicly available due to classification requirements, but they number in the thousands. Despite the often significant ramifications of the NCIPP list, the 2013 GAO report found that some state governments were opting not to participate in DHS data calls, citing compliance burdens, technical limitations, and cost-benefit calculations. For example, some states said they lacked expertise to develop scenarios and model complex infrastructure systems with sufficient fidelity to assess likely consequences of failure or disruption. For this reason alone, the NCIPP list cannot be regarded as a current and complete national inventory of critical systems and assets. Furthermore, GAO found that DHS was unable to provide documentation to show that it had complied with the statutory annual reporting requirement in recent years. The inherent complexities of CI inventory and categorization as described above also suggest the presence of persistent difficulties in assuring the completeness, quality, and currency of centralized inventories of CI assets requiring protected status. CIR Identification of Systems and Assets CIR prioritizes adaptive use of critical capabilities to enable continuity of service during periods of stress on critical infrastructure systems. This approach to CI inventory expands the scope of data collection to include any and all assets within a given CI sector that might be useful in emergency planning or contingency situationsâregardless of their inclusion on a particular list. The data can then be used as needed to identify alternative means of maintaining critical functions and providing essential services if systems and assets ordinarily used to provide these services are compromised. The major CI interagency database using the capabilities approach is known as Homeland Infrastructure FoundationâLevel Data (HIFLD). Four lead agenciesâDHS, Department of Defense (DOD), the National Geospatial-Intelligence Agency, and the U.S. Geological Surveyâcompile data gleaned from outreach to public and private sector partners, and make it available to eligible law enforcement, emergency management, and other organizations at all levels of government. HIFLD is comprised of hundreds of data "layers," which encompass nearly every conceivable category of asset relevant to homeland security functions and are curated by designated partner agencies, or "stewards" as they are known. Layers include assets considered critical under any definition, which are essential to supporting lifeline CI functions of energy, communications, transportation systems, and water and wastewater systems. However, HIFLD also includes many asset categories that are not necessarily critical according to any given statutory or official definition of criticality, but may become critical in the context of specific emergencies or CI policy decisionsâfor example, truck driving schools, express shipping facilities, and cruise ship terminals. The Department of Health and Human Services (HHS) used HIFLD during the 2017 hurricane season to locate day care centers in impacted areas. These specific day care centers would likely not be defined as critical under the common statutory definition of CI, because they were not so vital to the functioning of the national public health system as a whole that physical loss of the facilities would be debilitating at the national level. However, knowledge of where these centers were located was essential in allowing HHS to provide a critical public health serviceâensuring the safety of children in a disaster zone. The HIFLD partnership model is intended to enable relevant agencies at all levels of government and certain private sector entities to leverage a large universe of readily-accessible infrastructure data to address real-world use cases. Unlike the NCIPP list, it does not elevate the status of specific systems and assets in ways that directly support official functions of federal oversight, regulation, and administration. However, it is widely used to inform preparedness and incident management activities of federal and SLTT agencies. The robust development of HIFLD partnerships at all levels of government in recent years contrasts with the declining state participation in NCIPP documented by GAO. Nonetheless, CIP-based approaches to inventory of CI assets remain relevant. For example, provisions of the 2017 National Defense Authorization Act related to national preparedness against electromagnetic threats and hazards required DHS to determine, to the extent practicable, "the critical utilities and national security assets and infrastructure that are at risk.... " Likewise, specific chemical manufacturing facilities posing a high risk for malicious exploitation continue to be subject to DHS inspection and regulatory enforcement under Chemical Facility Anti-Terrorism Standards (CFATS) first authorized by Congress in 2007. These regulations require owner-operators to protect their facilities against cyber and physical threats according to specified standards. Issues for Congress Congress may consider the implications of the policy shift towards system-level resilience for legacy programs, such as the NCIPP asset list. Continuing policy changes made by DHS may further reduce the profile of NCIPP specifically, and asset-protection approaches to CI risk management in general. Stakeholder participation in NCIPP is not cost-neutral, so Congress may consider the frequency of data calls, elimination of any overlapping efforts or duplication, or additional appropriations to support data gathering and analysis. Congress may also consider updates to National Asset Database requirements contained in the 9/11 Commission Act to ensure their continuing relevance and applicability to emerging CISA programs and priorities, and their alignment with the requirements of other congressionally authorized programs, such as the Homeland Security Grant Program. Understanding and Assessing CI Risk Efforts to identify and prioritize CI systems and assets are part of a larger national effort to systematically understand and assess homeland security risks. In recent decades, Congress has frequently sought authoritative assessments of national level risk to CI. Risk assessments may be used to inform planning and resource allocation decisions related to congressional appropriations, emergency preparedness, regulatory oversight of certain industries, federal grant funding, and voluntary security measures by CI owner-operators. DHS, which is responsible for coordination and oversight of the national infrastructure security effort, defines risk as the "potential for an unwanted outcome resulting from an incident, event, or occurrence, as determined by its likelihood and the associated consequences." DHS officially considers three factors as components of risk: threat, vulnerability, and consequence. DHS defines threat as "a natural or man-made occurrence, individual, entity, or action that has or indicates the potential to harm life, information, operations, the environment, and/or property." Threat assessments usually include data on human adversaries or natural hazards, such as extreme weather events. In the case of the former, threat estimates are based on available information about the identity of threat actors or groups, and their motivations, capabilities, and observed targets. Information on likely timing, methods, and frequency of attacks may also be incorporated if available. In the case of natural hazards, likelihood and severity of event occurrence is usually estimated using databases of past similar events in conjunction with predictive modeling of weather, tectonic activity, and the like. DHS defines vulnerability as the "physical feature or operational attribute that renders an entity, asset, system, network, or geographic area open to exploitation or susceptible to a given hazard." Vulnerability assessments provide information about characteristics of assets or systems that may leave them open to exploitation or damage from a threat or hazard. This may include, for example, software design characteristics or structural weaknesses in a levy system. Assessments may contain recommendations for adoption of resilience measures to mitigate identified vulnerabilities. DHS defines consequence as the "effect of an event, incident, or occurrence." As discussed in the previous section, criticality assessments focus on potential consequences of adverse events that disrupt or destroy infrastructure systems and assets. These assessments use a range of technical and non-technical methods of assessment. Research centers, universities, and industry groups develop and refine many different modeling methodologies to inform infrastructure security investments and activities of federal agencies and SLTT jurisdictions. In other cases, recognized subject-matter experts and responsible officials make non-technical assessments based upon accumulated knowledge and experience. Consequence-based criticality assessments can be used to inform risk assessments when combined with threat and vulnerability assessments. Since 2007, DHS has applied these elements of risk to its various planning, programs, and budget activities as a function: "risk is a function of threat, vulnerability, and consequence," or R=f(TVC). Critics have challenged the usefulness of this formula on several grounds. They assert DHS has not demonstrated the capability to accurately assign probabilities to rare events like terrorist attacks, or otherwise determine precise values for all the terms in the equation. Likewise, the terms of the equation are not necessarily independent from one another. Complex interactions between threat, vulnerability, and predicted consequences make application of this formula to grant applications and other resource allocation decisions related to risk mitigation problematic. DHS recognized in 2018 the need to provide a "complete systemic risk picture" for CI, and has proposed revision or updates to risk assessment approaches described above. Several significant legislative and executive branch initiatives related to CI risk assessment were instituted in 2018-2019 to establish the organizational basis for significant changes. The Cybersecurity and Infrastructure Security Agency Act of 2018 (CISA Act; P.L. 115-278 ) created the eponymous agency (CISA) as an operational component of DHS to take over the functions previously carried out by the National Protection and Programs Directorate (NPPD) as a DHS headquarters organization. The creation of a dedicated agency for infrastructure security elevates CI risk management as an area of policy focus. CISA has established the National Risk Management Center (NRMC) as a "planning, analysis, and collaboration center" to manage national CI risk. According to CISA, the NRMC will adopt an "evolved approach" to CI risk management, which emphasizes cross-sector analysis, and capabilities-oriented approaches to identification and prioritization of CI. Issues for Congress Congress may request information from CISA on its efforts to institutionalize new risk management methods and approaches, and to ensure that these are validated by qualified external reviewers. The National Laboratories, the relevant university-based DHS Centers of Excellence, certain other universities and research centers, industry research groups, and the Homeland Security Advisory Council may provide relevant expertise in infrastructure risk assessment methodology. The Homeland Security Act specifies how the Secretary of Homeland Security may leverage these organizational resources in support of homeland security activities. Congress may choose to exercise its discretion in establishing funding priorities and program guidance for these organizations as appropriate to support national CI security goals. Federal Organization to Address CI Federal organization to address CI issues has changed significantly in response to evolving threats and the accompanying maturation of the homeland security enterprise. Three distinct periods of development are covered below: the initial policy development and coordination initiatives of the late 1990s; the post-9/11 reorganization of federal government to counter terrorist threats to infrastructure; and the ongoing transition to the all-hazards resilience framework for infrastructure security. From the 1990s to the Homeland Security Act Federal attention to CI policy increased in the 1990s as concerns grew about the potential for malicious exploitation of the expanding interface between computing technologies and physical infrastructure. The Clinton Administration established the Commission on Critical Infrastructure Protection in 1996 with a mandate to produce a report on infrastructures "that constitute the life support systems" of the nation, with a focus on emerging cyber threats. Two years later the Administration issued PDD-63 based in part on the Commission's report, requiring the government "to swiftly eliminate any significant vulnerability" of critical infrastructures to "non-traditional" cyber or physical attack within five years. The organizational directives set forth in PDD-63 focused on increasing interagency coordination by leveraging existing federal entities. The National Coordinator for Security, Infrastructure Protection and Counter-Terrorism, the senior executive position created by the directive, did not report directly to the President, and his duties were confined largely to leadership of an interagency coordination group and service as executive director of a stakeholder advisory group. Congress chartered a blue ribbon commission in 1999 to assess both terrorist threats to national security and early efforts to implement PDD-63. The Gilmore Commission, as it was known, submitted a report to Congress and the White House in December of 2000 titled "Toward a National Strategy for Combating Terrorism." The report found that implementation of PDD-63 was incomplete, and that the nascent CIP enterprise had developed only fitfully since it was signed in 1998. Specifically, it found Information Sharing and Analysis Centers (ISACs) created to facilitate broader risk awareness in government and industry about infrastructure vulnerabilities and threats were "still embryonic." The National Coordinator for Security, Infrastructure Protection, and Counterterrorism had broad authorities that left little time for CIP responsibilities, and lacked program and budget authority. No overall national CIP strategy existed to guide government actions. The National Infrastructure Protection Center (NIPC), responsible for CI threat and vulnerability assessments, warning and response coordination, and law enforcement investigation and response activities, had taken few concrete actions to establish its basic functions under Federal Bureau of Investigation (FBI) auspices. Consolidation and the Creation of DHS The 9/11 attacks had a galvanizing effect on homeland security policy, and, by extension, critical infrastructure protection. Policy initiatives that had previously languished became matters of urgent national concern overnight. Two broad tracks of legislative action emerged. The first favored reestablishing the Office of Homeland Security and the national coordination role under statute, with the addition of certain budget authorities, responsibilities, and oversight requirements, similar in organization and scope to the National Office of Drug Control Policy. This option followed the recommendations of the Gilmore Commission, and would have left much of the existing federal government structure intact, focusing on improved interagency coordination to ensure increased protection against major terrorist attacks. The second legislative track favored comprehensive consolidation of government counterterrorism functions under a single federal agency to be named the National Homeland Security Agency. This track followed the recommendations of a blue ribbon panel chartered by DOD in 1998 to study 21 st century security issues, known as the Hart-Rudman Commission. Key supporters in Congress believed that dispersion of homeland security-related functions across federal departments and agencies whose missions were not primarily security related had left the nation vulnerable to terrorist attacks. They favored consolidation to ensure clearer lines of executive authority, centralization of relevant counterterrorism functions, and better interagency coordination, among other anticipated benefits. The Homeland Security Act of 2002 generally reflected the approach that the Hart-Rudman Commission had advocated for. The Homeland Security Act P.L. 107-296 transferred many infrastructure security functions to DHSâfunctions which previously had been regarded as properly belonging to the various diverse spheres of business, finance, commerce, energy, public health, agriculture, and environmental protection. GAO designated creation of DHS as high risk in 2003 because of the large number of agencies being transferred, and the management challenges this presented to the new department. DHS ultimately incorporated nearly three dozen federal agencies and other entities into four major directorates: Information Analysis and Infrastructure Protection, Science and Technology, Border and Transportation Security, and Emergency Preparedness and Response. Although several long-established agencies such as the Coast Guard retained customary missions not related to homeland security, the new departmental structure prioritized their homeland security related missions, especially counterterrorism. Policy and Budgetary Implications of Organizational Change This approach represented a change from what infrastructure policy had previously been. The White House had regarded CIP as only tangentially related to counterterrorism functions of government before 9/11. The Office of Management and Budget (OMB) stated in a report to Congress on federal counterterrorism programs, submitted in August 2001, that "CIP is a separate but related mission." The authors justified this distinction on the grounds that infrastructure risks were diverse, and included many hazards beyond terrorism to include equipment failure, human error, weather and natural disasters, and criminal activity. They wrote, "This year's report focuses on combating terrorism, mentioning CIP efforts only where they directly impact the combating terrorism mission." That direct impact, according to budget estimates in the 2001 report, was negligible. CIP funding that overlapped counterterrorism amounted to less than half of one percent of the total CIP funding of $2.6 billion requested by the White House for the 2002 fiscal year. 9/11 changed the budget picture significantly, as seen in the 2003 OMB report to Congress. Infrastructure programs and activities that had not previously been seen as directly impacting the combating terrorism mission were included in the report, and their relation to counterterrorism efforts highlighted. Requested budget increases for FY2004 reflected the newfound centrality of counterterrorism priorities across federal departments and agencies with infrastructure-related programs. The White House request for FY2004 was $12.1 billion, representing an increase of more than 450% over its final pre-9/11 request, and included 28 federal entities outside the newly-created DHS. The 2003 report did not provide a separate estimate of the proportion of the CIP-related budget that overlapped counterterrorism, as the 2001 report had. This was hardly necessary in any case, because CIP in all its diverse aspects had largely been redefined as a counterterrorism mission. Evolution of CI Policy Since the Establishment of DHS Creation of a new purpose-built department was intended to ensure that CIP and other core homeland security missions were institutionalized as top federal priorities under unified leadership. Under the new consolidation of functions, more than half of the government's pre-9/11 homeland security funding was transferred to a single agency. However, the amalgam of independent agencies transferred to DHS retained significant independence as operational components of the new Department. Likewise, other departments and agencies outside DHS retained many of the infrastructure security functions they had before 9/11. Therefore, despite significant changes, CIP remains a highly distributed enterprise that competes for limited resources with other priorities across the federal government. Perceived Threat of Terrorism and CIP Priorities As long as the threat of terrorism continued to be an overriding national priority, counterterrorism continued to be a focal point for critical infrastructure security policy. However, by the time Hurricane Katrina struck the Gulf Coast in August 2005, nearly four years after the 9/11 attacks, public perception of the terrorist threat had already softened considerably. In the immediate aftermath of the attacks, 46% of Americans surveyed by Gallup named terrorism as the most important problem facing the United States. By the second half of 2005, the percentage hovered between 6%-8%. This broad trend has continued, with periodic upticks caused by high-profile incidents. Gallup surveys in early 2019 did not list terrorism as a category of public concern, because it did not garner sufficient responses to be included in results. After Katrina, the well-publicized failure of the extensive levy system designed to protect New Orleans from catastrophic floods further highlighted the vulnerability of critical systems and assets to diverse hazards besides terrorism. Issues of equipment failure, human error, weather and natural disasters, and criminal activity highlighted in the pre-9/11 OMB report (described above) reemerged as national-level policy concerns. New Strategic Directions In 2006, the Critical Infrastructure Task Force of the Homeland Security Advisory Council initiated a public policy debate arguing that the government's critical infrastructure policies were focused too much on protecting assets from terrorist attacks and not focused enough on improving the resilience of assets against a variety of threats. According to the Task Force, such a defensive posture was "brittle." Not all possible targets could be protected and adversaries could find ways to defeat defenses, still leaving the nation having to deal with the consequences. In 2008, as part of its oversight function, the House Committee on Homeland Security held a series of hearings addressing resilience. At those hearings, DHS officials argued that government policies and actions did encourage resilience as well as protection. Even so, subsequent policy documents made greater reference to resilience. The 2010 Quadrennial Homeland Security Review (QHSR), the first top-level DHS strategic review submitted to Congress under Title VII of the Homeland Security Act, highlighted the diversity of missions and stakeholders in what had become an expansive enterprise. The QHSR stated that, "while the importance of preventing another terrorist attack in the United States remains undiminished, much has been learned since September 11, 2001, about the range of challenges we face." Examples of threats and hazards included natural disasters (specifically, Hurricane Katrina), widespread international cyberattacks, the expansion of transnational criminal activities, and contagious diseases. The QHSR noted the leadership role of DHS in managing risks to critical infrastructure, as well as other homeland security missions related to immigration, border security, cybersecurity, and disaster response. However, it presented homeland security as a decentralized enterprise shared by diverse stakeholders in the public and private sector. "[A]s a distributed system," the report read, "no single entity is responsible for or directly manages all aspects of the enterprise." In 2013, PPD-21 superseded HSPD-7, which had provided authoritative policy guidance for federal infrastructure protection for a decade. PPD-21, which remains in force, informed development of the 2013 NIPP. It placed less emphasis protection of physical infrastructure assets against terrorist threats than HSPD-7 did. Rather, it emphasized all-hazards CI resilience as part of a broader national disaster preparedness effort. "Critical infrastructure must be secure and able to withstand and rapidly recover from all hazards," it stated. "Achieving this will require integration with the national preparedness system across prevention, protection, mitigation, response, and recovery." The 2014 QHSR further expanded the boundaries of critical infrastructure security beyond terrorism-related threats to include factors such as aging and neglect of critical systems and assetsârecasting once-ordinary issues of investment, maintenance, and utility service provision as homeland security concerns. DHS did not submit a QHSR to Congress in 2017 as required by the Homeland Security Act. This means there is no current departmental-level statement that specifies DHS strategic direction and priorities for infrastructure security or other homeland security goals. The boundaries of responsibility for critical infrastructure securityâas well as the definition of critical infrastructure itselfâcontinue to be negotiated among Congress, executive branch departments and agencies, SLTT jurisdictions, and a diverse array of private-sector stakeholders. For example, in 2002 Congress directed the U.S. Department of Agriculture (USDA) to transfer the Plum Island Animal Disease Center to DHS under the Homeland Security Act ( P.L. 107-296 ), based partly on concerns that terrorists might target the nation's food and agriculture sector with contagious pathogens. However, in 2018 Congress authorized transfer of a replacement facility and its functions back to USDA from the DHS Science and Technology Directorate under the Consolidated Appropriations Act of 2018 ( P.L. 115-141 ), as proposed by the White House in its FY2019 budget request. After a relatively brief period of extensive consolidation in the early 2000s, critical infrastructure security in the federal government has evolved into a distributed enterprise loosely structured by institutionalized partnerships and policy frameworks that increasingly emphasize an all-hazards approach to critical infrastructure security. Issues for Congress Congress may consider which aspects of critical infrastructure security properly reside within the homeland security enterprise, and which relate more closely to government responsibilities in areas of commerce, trade, and public utilities regulation. The distributed enterprise model of critical infrastructure security based on an all-hazards approach potentially elides boundaries between homeland security and other dimensions of infrastructure policy. Likewise, the definition of homeland security itself continues to evolve beyond its counterterrorism roots. DHS has not submitted a top-level strategy to Congress since the 2014 QHSR. (As noted above, a quadrennial review was due to Congress no later than December 31, 2017.) A more current strategy or other high-level policy statement might serve to more clearly define current Departmental goals, the parameters of its activities related to critical infrastructure security, and how these relate to activities of interagency partners with infrastructure-related responsibilities. Congressional interest in homeland security strategy was indicated by the Quadrennial Homeland Security Review Technical Corrections Act of 2019 ( H.R. 1892 ), which passed the House of Representatives unanimously and was referred to the Senate Committee on Homeland Security and Governmental Affairs on May 15, 2019. The proposed act would require DHS to consult with relevant advisory committees when developing its capstone strategy, and to more directly link the strategy with budgeting, program management, and prioritization, among other provisions, including new deadlines linked to the budget cycle rather than the end of the calendar year. Congress has periodically acted to define organizational relationships within DHS. The Department was originally formed with four main directorates, each of which corresponded with a primary homeland security mission. The centralized directorate structure under headquarters management has given way to a more federated structure that emphasizes the operational role and organizational identity of its operational components. Most recently, the National Protection and Programs Directorate, which administered many of the Department's infrastructure partnership programs, was made an agency within DHS through the 2018 CISA Act. Congress may consider the nature of intra-Departmental organization and relationships within DHS as appropriate, and what degree of centralization or federation best supports the critical infrastructure security mission. The Role of the Private Sector Although much of the nation's CI is privately owned, the public may be put at risk if these privately owned critical systems fail. Management of CI risk within a complex ownership and regulatory environment presents enduring policy challenges. Legislators and other policymakers have generally favored variations of the federated partnership model first elaborated in PDD-63, which relies on voluntary collaboration between the public and private sectors (as opposed to regulatory mandates) to guide investment in critical infrastructure security. Under this model, CI owner-operators, not the government, have ultimate responsibility for assessing and mitigating risk at the enterprise level. At the same time, Congress has directed executive branch agencies to assess and manage risk at the national level. Infrastructure risk management is structured under this framework as a collaborative endeavor between the public and private sectors reliant on incentives, information sharing, and voluntary investments in security. Investments in critical infrastructure security in the private sector are largely the purview of private individuals or entities, but many of the most serious risks are borne collectively by the public and larger business community. Under the current partnership structure, government and private-sector representatives collaboratively ascertain what individual enterprise-level investments in security and resilience are necessary to manage CI risk at the societal level. While there is little question that businesses, government, and society have a "clear and shared interest" in CI resilience, it is often difficult at the policy level to work out exactly who should bear responsibility for up-front costs of investment, and what mandatory requirements, regulatory oversight measures, and cost-recovery mechanisms might be necessary in a given case. Incentives for Private Sector Participation By and large, the federal government relies upon the private sector to voluntarily develop CI risk management strategies and mitigation investments to support national resilience goals. The 2013 NIPP states that, "Government can succeed in encouraging industry to go beyond what is in their commercial interest and invest in the national interest through active engagement in partnership efforts." In practice, government efforts to encourage voluntary investments in infrastructure resilience through public-private partnerships have varied in extent and effectiveness, particularly when risks in question are diffuse and involve low-probability/high-consequence events such as major terrorist attacks or earthquakes. The main incentives for industry participation are threefold: improved access to risk information from government sources on security threats and hazards; the value of analyses of national-level risks that exceed the capabilities of most private companies to provide for themselves; and the opportunity to engage with government to influence CI policy. Congress acted to reduce barriers to information sharing between the public and private sectors through the Critical Infrastructure Information Act of 2002, which is designed to ensure confidentiality of industry information shared with DHS in good faith under the Protected Critical Infrastructure Information (PCII) program. Likewise, a number of public-private coordination councils established under the authority of Presidential directives provide a forum for policy discussions and deliberation. A 2019 report by the Organization for Economic Cooperation and Development (OECD) found that voluntary information sharing and collaboration partnerships in advanced industrialized economies "[do not] necessarily guarantee a strong enough incentive structure to ensure that sufficient investments are effectively made to attain expected resilience targets." Most developed countries augment voluntary policy instruments with regulatory mandates to spur investments in resilience in certain sectors. Regulatory mandates tend to be favored for CI sectors or sub-sectors where incident impacts are potentially catastrophic and elicit broad public concern, such as nuclear meltdowns, gas pipeline explosions, airliner crashes, or terrorist theft of chemicals for use in explosives. According to an academic survey of public-private partnerships for CI security, collaborative approaches more broadly apply "as risks become more privatized" and "harms are more divisible and isolated with respect to their impacts." Federal Regulation Policymakers have generally sought to limit the regulatory reach of government within CI security enterprise. For example, PDD-63 stated that "we should, to the extent feasible, seek to avoid outcomes that increase government regulation or expand unfunded government mandates to the private sector." The Homeland Security Act created an organizationâDHSâwith wide-ranging responsibilities, but relatively narrow regulatory mandates. The Transportation Security Administration has (but does not exercise) regulatory oversight over oil and gas pipeline security. The Coast Guard regulates certain aspects of port securityâa mission that long predates the transfer of the service to DHS under the Homeland Security Act. Finally, CISA directly regulates certain chemical facilities under the Chemical Facilities Anti-Terrorism Standards program to prevent terrorist exploitation of the chemical industry. Many other federal, state, and local agencies exercise regulatory authorities that are related to infrastructure security, but are not necessarily specific to homeland security. For instance, the Nuclear Regulatory Commission (NRC) regulates civilian nuclear facilities and enforces extensive safety and reporting requirements. Many of these requirements are traceable to the partial reactor meltdown at Three Mile Island in 1979, and as such are treated as industrial safety and reliability issues in most cases. Many of the aspects of infrastructure security most relevant to homeland security, such as facility protection against deliberate attacks, are overseen by the NRC, not DHS. Agencies with dual responsibilities for regulation and partnership typically separate the two rolesâa lesson learned from early experience with NIPC, which was not clearly separated from the law-enforcement functions of the FBI, and thus had difficulty eliciting participation from private sector entities in its early stages. (See " From the 1990s to the Homeland Security Act " section). The preponderance of DHS infrastructure security programs focus on enhancing voluntary collaboration with infrastructure security partners through development of information sharing, analysis, training, and coordination capabilities, as well as voluntary on-site assessments in certain cases. The Voluntary CI Partnership Structure Current CI partnership structures are organized under the authority of PPD-21. The directive is implemented through sector and cross-sector partnership structures described in the 2013 NIPP. The 2013 NIPP outlined an infrastructure protection effort that was less centralized and less focused on critical asset protection than previous iterations of the NIPP, instead emphasizing distributed responsibility among an expansive group of stakeholders committed to common national resilience goals. NIPP partnerships at the federal level are administered by CISA in partnership with other DHS components, and other federal departments and agencies. Government Coordinating Councils and Sector-Specific Agencies Each of the 16 CI sectors under the NIPP framework has its own Government Coordinating Council (GCC) and Sector Coordinating Council (SCC). GCCs are made up of federal and SLTT agencies, and, according to the NIPP, enable "interagency, intergovernmental, and cross-jurisdictional coordination" on infrastructure issues of common concern. Each GCC is led by a designated federal agency with sector-relevant responsibilities and expertise, known as a Sector-Specific Agency (SSA). DHS leads or co-leads 10 of the 16 GCCs as the SSA. Other SSAs include the Environmental Protection Agency, the Government Services Agency, and the departments of Agriculture, Defense, Energy, Health and Human Services, Transportation, and Treasury. (See Table 1 for description of CI sectors and SSAs, and Appendix C for visualization of CI partnership structure). SSAs leverage various NIPP partnership structures to formulate sector-specific infrastructure protection plans that support the overall goals of the NIPP, taking unique sector characteristics and requirements into account. The sector-specific plans contain broad analyses of sector risks, interdependencies with other CI sectors, and stakeholders and partners, which together are used to develop sector-specific resilience goals and measures of effectiveness. Sector Coordinating Councils Each SCC is made up of private-sector trade associations and individual CI owner-operators. SCCs are self-organized and self-governed, but must be recognized by the corresponding GCC as "appropriately representative" of the sector. They have an advisory relationship with the federal government, and also have coordination and information-sharing functions between government and private-sector stakeholders. SCCs may also support independently organized Information Sharing and Analysis Centers (ISACs) specific to their sector to facilitate information sharing among stakeholders. The National Council of ISACs currently lists 24 member organizations. ISACs maintain operations centers, deploy representatives to the National Cybersecurity and Communications Integration Center (NCCIC) and National Infrastructure Coordinating Center (NICC), conduct preparedness exercises, and prepare a range of informational products for their members. Reliable data on the scale and scope of private-sector participation in SCC activities across CI sectors is not available, but it varies widely depending on sector characteristics. Cross-Sector Councils Four cross-sector councils serve to represent key stakeholder groups whose broad interests are not specific to one sector. The State, Local, Territorial, and Tribal Government Coordinating Council (SLTTGCC) is intended to enhance infrastructure resilience partnerships between SLTT jurisdictions, and to represent their common governance-related interests in GCC and SCC deliberations. The Critical Infrastructure Cross-Sector Council consists of the chairs and vice-chairs of the SCCs, and coordinates cross-sector issues among private-sector CI stakeholders. The Regional Consortium Coordinating Council represents regional CI resilience coalitions and encourages sharing of best practices among them. The Federal Senior Leadership Council (FSLC) is composed of senior officials from federal departments and agencies responsible for implementation of the NIPP, and is chaired by the CISA Director or his designee. It exercises leadership over the other cross-sector councils. According to its charter, the FSLC forges policy consensus among federal agencies on CI risk management strategies, coordinates "issue management resolution" among the other cross-sector councils, develops coordinated resource requests, and advances collaboration with international partners, among other activities. Advisory Councils The various NIPP partnership councils may organize certain deliberations under the auspices of the Critical Infrastructure Partnership Advisory Council (CIPAC), which was first established in 2006. The CIPAC Charter has been renewed several times since then, most recently in 2018. Under certain circumstances, CIPAC provides NIPP coordinating councils and member organizations legal exemption from Federal Advisory Committee Act (FACA) provisions for open meetings, chartering, public involvement, and reporting in order to facilitate discussion between CI stakeholders on sensitive topics relating to infrastructure security. CIPAC engages its government and private-sector stakeholders through the NIPP partnership structure to develop consensus policy advice and recommendations for DHS and other relevant agencies. The Homeland Security Advisory Committee (HSAC) provides advice and recommendations to the Secretary of Homeland Security on matters related to homeland security. Members are appointed by the Secretary, and include leaders from state and local government, first responder communities, the private sector, and academia. The Secretary may also establish subcommittees to focus attention on specific homeland security issues as needed. CI-relevant subcommittees have focused on cybersecurity and emerging technologies. The National Infrastructure Advisory Council is a committee made up of senior industry leaders who advise the President and SSAs on CI policy. It is not formally part of the NIPP partnership structure, but plays an intermediary role between the various coordination councils, the Secretary of Homeland Security, and the President by providing a mechanism for consultation between public and private sector representatives at the highest levels of government. First established by executive order on October 16, 2001, it is tasked with monitoring "the development and operations of critical infrastructure sector coordinating councils and their information sharing mechanisms" and encouraging private industry to improve risk management practices, among other activities. This partnership structure is more flat than hierarchical, and is realized in multiple formats to include symposia, research collaborations, working groups, policy deliberations, and emergency preparedness and response activities. By design, participation in these activities often crosses organizational lines and includes governmental and non-governmental stakeholders. Increasingly, partnership activities include representatives from multiple CI sectors, due to recognition of the interdependencies inherent in complex CI systems and the general policy trend favoring system resilience over asset protection. Operational Elements of the Partnership System The distributed partnership structure has several operational elements maintained by DHS that provide centralized hubs for various non-regulatory coordination and information sharing functions. The National Infrastructure Coordinating Center (NICC) collects, analyzes, and shares threat or other operational information throughout the critical infrastructure partnership network on a real-time basis. It also conducts training and exercises and provides decision support to private sector partners. It is part of the DHS National Operations Center, which serves as the principal operations center for the Department of Homeland Security. Additionally, the National Cybersecurity and Communications Integration Center (NCCIC) serves as a monitoring and incident response center for incidents affecting cybersecurity and communications networks, and also performs several related analytic functions. CISA administers both the NICC and the NCCIC. Assessing the Effectiveness of This Approach The underlying policy premise of the current partnership system is that removing or mitigating disincentives to information sharing and increasing trust between the public and private sector will lead to greater industry willingness to invest in system-level resilience. Three related questions may be considered: To what extent are private sector owner-operators actually embracing collaboration and information-sharing initiatives offered by federal departments and agencies under the current partnership system? Is private-sector participation in these initiatives incentivizing effective investments (beyond those made for business reasons) in programs to reduce overall public risk? What legislative remedies are appropriate in cases where broader and more effective investments in risk reduction are necessary? Given the diversity and breadth of the critical infrastructure enterprise as currently defined, the answers to these questions vary across sectors. Rigorous empirical analyses that might shed light on the extent and effectiveness of collaboration within the voluntary framework are scarce. A 2013 study found that fewer than half of the 16 CI sectors had strong "communities of interest" that actively engaged in CIP issues through NIPP partnership structures. CI communities of interest were strongest in those sectors with strong trade or professional associations unified by relatively specific threats posing individual risk to member companies. A 2011 study found that the most important factor in private-sector risk mitigation investment is a company's own cost-benefit analysis; and that many CI owner-operators believed government will (or should) cover externalized social costs incurred by loss or disruption of company facilities due to a terrorist attack. GAO testimony provided to Congress in 2014 asserted that DHS partnership efforts faced challenges, and identified three key factors that impact effectiveness of the partnership approach: recognizing and addressing barriers to sharing information, sharing the results of DHS assessments with industry and other stakeholders, and measuring and evaluating the performance of DHS's partnership efforts. GAO found that DHS did not systematically collect data on reasons for industry participation or non-participation in security surveys and vulnerability surveys, and whether or not security improvements were made as a result. GAO asserted that DHS cannot adequately evaluate program effectiveness absent these measures. Although DHS concurred and agreed to corrective measures, GAO reported that it had not verified DHS's progress in implementing them. Overall, the picture that emerges from this testimony and other sources is one of extensive partnership activity across multiple CI sectors, but relatively few measures to systematically assess effectiveness of this activity in meeting CI resilience goals. Issues for Congress Congress may explore the progress DHS has made in implementing GAO recommended data gathering and analysis initiatives. Availability of data and rigorous analyses may enable Congress to better ascertain the effectiveness of the partnership system in incentivizing industry information sharing and investments in risk reduction. CISA and its predecessor organizations have not been able to provide reliable data indicating the reach and effectiveness of public-partnership programs in incentivizing bidirectional information sharing and efficient private investments in national level (as opposed to enterprise level) resilience. (The volume and quality of industry information shared with DHS through the PCII program may be one of several useful indicators of program effectiveness.) Congress may address this gap, such as through introduction of appropriate reporting requirements. Congress may also consider enhancement of regulatory authorities of federal departments and agencies as appropriate to meet national CI resilience goals in cases where voluntary measures do not result in effective industry action to mitigate risk, or emergent threats make immediate action necessary. One recent example is the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), which expands the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS) to prevent foreign adversaries from exploiting the legitimate trade system to gain control of CI assets or related information. Likewise, Congress may exercise oversight in cases where regulatory authorities related to infrastructure security exist but are not exercised, as in the case of TSA described above. CISA plans to maintain the current sector specific public-private partnership structures as the preferred vehicle for information sharing and policy coordination. Congress may consider whether adjustment or replacement of these structures is needed to streamline and better align partnership efforts with the emerging federal risk management approach, which emphasizes inter-sectoral analysis and resilience rather than sector-specific asset identification and protection. Appendix A. National Critical Functions Appendix B. Key Terms Appendix C. Sector and Cross-Sector Coordinating Structures	Summary:	gov_report	1,024	null	91
crs_R46096	crs_R46096_0	You are given a report by a government agency. Write a one-page summary of the report. Report: R apid growth in leveraged lending, a relatively complex form of credit, in the current economic expansion has raised concerns with some policymakers because they have noted similarities between leveraged lending and mortgage lending and mortgage-backed securities (MBS) markets in the lead-up to the 2007-2009 financial crisis. This report explains how leveraged lending works; identifies the borrowers, lenders, and investors who participate in the market; and examines the characteristics of a leveraged loan. It then explains the characteristics of collateralized loan obligations (CLOs)âsecurities backed by cash flow from pools of leveraged loansâand their investors. Understanding CLOs is crucial to a discussion of the policy issues surrounding leveraged lending because more than 60% of investment in leveraged lending occurs through CLOs. The report also provides data on trends and investor composition. Once these basics are explained, the report explores the regulation ofâand some of the potential risks posed byâleveraged lending and CLOs. Finally, it discusses how policymakers have addressed leveraged lending issues to date. What Is Leveraged Lending? Put simply, leveraged lending refers to loans to companies that are highly indebted (in financial jargon, highly leveraged ). Conceptually, a leveraged loan is understood to be a relatively high-risk loan made to a corporate borrower, but there is no consensus definition of leveraged lending for measurement purposes. Instead, different observers or industry groups use various working definitions that may refer to the borrower's corporate credit rating or a ratio of the company's debt to some measure of its ability to repay that debt, such as earnings or net worth. Because they are high risk, leveraged loans typically have relatively high interest rates, and thus offer higher potential returns for lenders. Who Are the Borrowers? Leveraged loans are made to companies from all industries, and the concentration of leveraged lending in each industry varies over time based on industries' economic conditions. In the second quarter of 2018, healthcare and service were the top two industries using leveraged lending. Leveraged loans are often used to complete a buyout or merger, restructure a company's balance sheet (by buying back shares, for example), or refinance existing debt. Who Are the Lenders? Several types of institutions provide funds to borrowers in leveraged lending, including banks, insurance companies, pension funds, mutual funds, hedge funds, and other private investment funds. Put simply, those institutions are the lenders. However, this concise explanation does not capture certain important characteristics and dynamics within the leveraged lending market. The institution that originates a leveraged loan rarely, if ever, subsequently holds the loan entirely on its own balance sheet, because a lender often would be wary of taking on a large exposure to a single highly indebted company. Instead, the originating lender typically will either (1) partner with colenders, (2) sell pieces of a single loan to investors, or (3) bundle part or all of the loan into a pool of other leveraged loans in a process called securitization , then sell pieces of the pool to investors. The first two optionsâreferred to as syndicat ion and participation , respectivelyâare described in more detail below. The third option creates securities called collateralized loan obligations (CLOs), which are described in more detail in the " What Are CLOs? " section. When examining statistics or regulations related to leveraged loans, this report will distinguish between institutions that issue (i.e., originate or create) leveraged loans and institutions that hold (i.e., invest in or purchase pieces of) leveraged loans or CLOs. One notable recent trend is the migration of activity from the banking sector to the nonbank sector. Historically, banks played a primary role in both issuing and holding leveraged loans. However, in recent decades, nonbank credit investors, such as private investment funds and finance companies, have increasingly overtaken market share. As shown in Figure 1 , in the primary market , where leveraged loans are first created, bank financing has fallen from about 70% in the mid-1990s to below 10% in 2018, whereas all other nonbank financing combined now comprises more than 90% of leveraged loan investments. As discussed below, this migration of activity from the banking industry to nonbank institutions has implications for systemic risk and how leveraged loans are regulated. What Are Loan Syndication and Participation? In general, a single lender does not want to hold a whole leveraged loan because such loans are large and risky. Instead, lenders typically use economically similar but contractually different arrangementsâsyndication and participationâto divide the loan among multiple lenders. Under both arrangements, multiple lenders provide a portion of the loan's funding and share in its risk and returns. The contractual relationship between the parties differs in syndications and participations. In a syndicated loan, the borrower enters into a single loan agreement with multiple lenders. Hence, all lenders have a direct contractual relationship with the borrower. Alternatively, a single lender could enter into the loan agreement with the borrower, and this originating lender could then sell portions of the loan, called participations , to other lenders. In this case, the borrower has a direct contractual relationship with the originating lender, who in turn has contractual relationships with the other participants. In either case, the loan has in effect been split up between multiple lenders, even though the particulars of the various parties' contractual rights and responsibilities differ. Syndication and participation require a relatively high degree of coordination among various institutions and stakeholders, and industry practice is that one company acts as an arranger of the deal. The arranger gathers information about the borrower and the loan's purpose, determines appropriate pricing and loan terms, and brings together lenders to join a loan syndication or buy participations. After the deal is closed, the arranger or another company acts as the loan's agent by collecting the payments and fees and passing the appropriate amounts to the loan's holders. The arranger and agent collect fees for these services. Traditionally, arrangers and agents were banks, who would also hold a large portion of the loan, and the colenders were also banks. Since the mid-1990s, colenders have increasingly been nonbank lenders, such as finance companies and private investment funds, and the portions of loans held by banks have decreased. In some cases, nonbank lenders have taken on the arranger and agent roles. How syndications and participations are regulated is covered in " How Are Leveraged Loans Regulated? " What Are Covenants and Covenant-Lite Loans? Leveraged loan agreements typically include covenants âprovisions in the loan contract that set conditions the borrower must meet to avoid technical default (as opposed to a payment default, wherein a scheduled payment is missed). Often these conditions relate to indications of the borrower's ability to repay the loan, such as cash flow and financial performance, or restrict certain actions the borrower may take, such as management changes or asset sales. If the borrower violates a covenant, the lender can accelerate or call the loan (possibly forcing the borrower into bankruptcy), but often lenders will instead restructure the loan with stricter terms that may include additional restrictions on the borrower's behavior. Lenders see covenants as an important mechanism to monitor the borrower's ability to repay the loan and avoid repayment defaults. Loan agreements that include fewer or more lax covenants than are found in traditional leveraged lending contracts are often characterized as covenant-lite . A number of industry observers have noted that covenant-lite loans are becoming more common, and some have argued this indicates credit standards are declining and could lead to higher losses in the future. However, the causes of the increase in covenant-lite loans and the level of concern this trend warrants are subject to debate. What Is the Size of the Leveraged Lending Market, and How Much Has It Grown Recently? The Federal Reserve states that there were approximately $1.15 trillion of leveraged loans outstanding at the end of 2018. For comparison, this amount was similar to U.S. auto loans ($1.16 trillion) or credit card debt ($1.06 trillion) outstanding. In recent years, leveraged lending has grown much faster than other categories of credit reported by the Federal Reserve (see Table 1 ). The $1.15 trillion outstanding was a 20.1% increase from a year earlierâmore than four times the growth of overall business creditâand annual growth has averaged 15.8% since 2000. By comparison, student loans outstanding grew 5.3% last year and have averaged 9.7% annual growth since 1997. In part, the rapid growth in leveraged loans reflects growing nonfinancial business indebtedness, but overall nonfinancial business indebtedness grew only about a fifth as quickly as leveraged lending. This suggests that leveraged lending growth may reflect a substitution of one type of debt for another. Who Holds Leveraged Loans? Investors can hold leveraged loans by either (1) investing directly in individual leveraged loans, typically through syndications and participations or (2) investing in CLOs. Institutions that directly hold large shares of outstanding leveraged loans include mutual funds (19%), banks (8%), and insurance companies (6%), as shown in Figure 2 . According to one study, mutual fund holdings are split fairly evenly between funds offered to institutional investors and funds offered to retail investors. Nearly all of the remainder of leveraged loans (62%) are held by CLOs. Portions, or tranches , of CLOs are then sold, largely to the same types of investors that invest directly in leveraged loans. CLOs will be discussed in more detail in the next section. As discussed above, banks' share of funding in the leveraged loan market has exhibited a long-term decline. What Are CLOs? Collateralized loan obligations are securities backed by portfolios of corporate loans. Although CLOs can be backed by a pool of any type of business loan, in practice, U.S. CLOs are primarily backed by leveraged loans, according to the Federal Reserve. The outstanding value of U.S. CLOs has grown from around $200 billion at year-end 2006 to $617 billion at year-end 2018. As noted above, about 60% of leveraged loans are held in CLOs. CLOs offer a way for investors to receive cash flows from many loans, instead of being completely exposed to potential payments or defaults on a single loan. To isolate financial risks, CLOs are structured as bankruptcy-remote special purpose vehicles (SPVs) that are separate legal entities. Each CLO has a portfolio manager, who is responsible for constructing the initial portfolio as well as the CLO's ongoing trading activities. CLO managers are primarily banks, investment firms (including hedge funds), and private equity firms. CLOs are sold in separate tranches , which give the holder the right to the payment of cash flow on the underlying loans. The different tranches are assigned different payment priorities, so some will incur losses before others. This tranche structure redistributes the loan portfolios' credit risk. The tranches are often known as senior , mezzanine , and equity tranches, in order from highest to lowest payment priority, credit quality, and credit rating. Through this process, the loan portfolio's risks are redistributed to the lower tranches first, and tranches with higher credit ratings are formed. In general, the financial industry views CLOs' tranched structure as an effective method for providing economic protection against unexpected losses. As Figure 3 illustrates, in the event of default, the lower CLO tranches would incur losses before others. Hence, tranches with higher payment priority have additional protection from losses and receive a higher credit rating. The pricing of the tranches also reflects this difference in asset quality and credit risk, with lower tranches offering potentially higher returns to compensate for greater risks taken. Who Holds CLOs? CLOs are often sold to institutional investors, including asset managers, banks, insurance companies, and others. The asset management industry, which includes hedge funds and mutual funds, mainly holds the riskier mezzanine and equity tranches, and banks and insurers hold most of the lower-risk senior CLO tranches. The Federal Reserve estimated that U.S. investors held approximately $556 billion in CLOs based on U.S. loans at the end of 2018. Of this, an estimated $147 billion in U.S. CLO holdings were issued domestically. Detailed data on domestic CLOs' holders are not available; certain detailed data, however, can be found in the reporting of cross-border financial holdings, which comprise a large majority of U.S. CLOs. The cross-border financial reporting indicates that $409 billion of U.S. CLO holdings were issued in the Cayman Islands, apparently the only offshore issuer. Figure 4 provides an overview by investor type for domestic holdings of these CLOs. Could Leveraged Loans Exacerbate an Economic Downturn? The rapid growth of leveraged lending has led to concerns that this source of credit could dry up in the next downturn. A slowdown in leveraged loan issuance could pose challenges for the (primarily) nonfinancial companies relying on leveraged loans for financing. Were these firms to lose access to financing, they could be forced to reduce their capital spending, among other operational constraints, if they were unable to find alternative funding sources. Capital spending (physical investment) by businesses is typically one of the most cyclical components of the economy, meaning it is highly sensitive to expansions and recessions. Overall borrowing by nonfinancial firms is historically high at present. This raises concerns that heavily indebted firms could experience a debt overhang âwhere high levels of existing debt curtail a firm's ability to take on new debtâin the next downturn. If a debt overhang at nonfinancial firms leads to a larger-than-normal reduction in capital spending or more corporate failures, this might exacerbate the overall downturn. If a downturn in the leveraged loan market had a negative effect on financial stability, as discussed in the next section, negative effects on the overall economy could be greater. What Are the Risks Associated with Leveraged Loans and CLOs? Leveraged loans and CLOs pose potential risks to investors and overall financial stability. Some risks, such as potential unexpected losses for investors, are presented by both leveraged loans and CLOs. Some apply to only one, such as risks posed by securitization presented by CLOs. This section considers the risks posed by both, highlighting differences between the two where applicable. Risks to investors. Like any financial instrument, leveraged loans and CLOs pose various types of risk to investors. In particular, they pose credit risk âthe risk that loans will not be repaid in full (due to default, for example). Credit risk is heightened because the borrowers are typically relatively indebted, have low credit ratings, and, in the case of covenant-lite loans, certain common risk-mitigating protections have been omitted. The ways borrowers often use the funds raised from leveraged loans, such as for leveraged buyouts, can also be high risk. Nevertheless, the overall risk of leveraged loans should not be exaggeratedâleveraged loans have historically had lower default rates and higher recovery rates in default than high-yield ( junk ) bonds, another form of debt issued by financially weaker firms. Credit risk is mitigated to a certain degree because leveraged loans are typically secured and their holders stand ahead of the firm's equity holders to be repaid in the event of bankruptcy. Furthermore, leveraged loans typically have floating interest rates, so interest rate risk is borne by the borrower, not the investor. As mentioned in the "What Are CLOs?" section, when leveraged loans are securitized and packaged into CLOs, the credit risk of the original leveraged loans is redistributed by the CLOs' tranched structure, with senior tranches (mostly held by banks and insurers) often receiving the highest credit rating (e.g., AAA) and junior tranches (mostly held by hedge funds and other asset managers) receiving lower credit ratings. Subordinated debt and equity positions provide additional protection to the senior tranches. Tranching distributes CLO credit risk differently across investors in different tranches. Up to this point in the credit cycle, the risks associated with leveraged loans and CLOs have largely not materializedâleveraged loan default rates have been relatively low because of low interest rates and robust business conditions. But some analysts fear that default rates could spike if economic conditions worsen, interest rates rise, or bothâand these possibilities may not have been properly priced in. Default rates on leveraged loans rose from below 1% to almost 11% during the last recession. An unanticipated spike in default rates would impose unexpected losses on leveraged loan and CLO holders. Systemic risk. Investment losses associated with changing asset values, by themselves, are routine in financial markets across many types of assets and pose no particular policy concern if investors have the opportunity to make informed decisions. The main policy concern is whether leveraged loans and CLOs pose systemic risk ; that is, whether a deterioration in leveraged loans' performanceâparticularly if it were large and unexpectedâcould lead to broader financial instability. This depends on whether channels exist through which problems with leveraged loans could spill over to cause broader problems in financial markets. Losses on leveraged loans or liquidity problems with leveraged loans could lead to financial instability through various transmission channels discussed below. During the financial crisis, problems with mortgage-backed securities (MBS) demonstrated how a class of securities can pose systemic risk. Similar to CLOs, MBS are complex, opaque securities backed by a pool of underlying assets that are typically tranched, with the senior tranches receiving the highest credit rating. Unexpected declines in housing prices and increases in mortgage default rates revealed that MBSâboth highly rated and lowly rated tranchesâhad been mispriced, with the previous pricing not accurately reflecting the underlying risks. The subsequent repricing led to a cascade of systemic distress in the financial system: liquidity in the secondary market for MBS rapidly declined and fire sales pushed all MBS prices even lower. MBS losses caused certain leveraged and interconnected financial institutions, including banks, investment firms, and insurance companies, to experience capital shortfalls and lose access to the short-term borrowing markets on which they relied. Ultimately, these problems caused financial panic and a broader decline in credit availability as financial institutions deleveraged âreducing new lending activity to restore their capital levelsâin response to MBS losses. The resulting reduction in credit in turn caused a sharp decline in real economic activity. CLOs today share some similarities with MBS before the crisis, but there are important differences. Similarities include the rapid growth in available credit and erosion of underwriting standards. Both types of securities are relatively complex and opaque, potentially obfuscating the underlying assets' true risks. Outstanding leveraged loans and CLOs are small relative to overall securities markets, which in isolation is prima facie evidence that they pose limited systemic risk, even if they were to become illiquid or subject to fire sales. However, before the financial crisis, policy concerns were mainly focused on potential problems in subprime mortgage markets, which were also relatively small. Nevertheless, problems with subprime mortgages turned out to be the proverbial tip of the iceberg, as the deflating housing bubble caused losses in the much-larger overall mortgage market. Analogously, a disruption in the leveraged lending market could create spillover effects in related asset classes, similar to how problems that started with subprime mortgages eventually spread to the entire mortgage market and nonmortgage asset-backed securities in the financial crisis. Ultimately, the underlying cause of the MBS meltdown was the bursting of the housing bubble. Despite the high share of business debt to gross domestic product (GDP) at present, experts are divided on whether there is any underlying asset bubble in corporate debt markets (analogous to the housing bubble) that could lead to a destabilizing downturn. In addition, it is not clear whether unexpected losses in leveraged lending would lead to broader systemic deleveraging by financial firms or problems for systemically important institutions. Losses on leveraged loans or CLOs might not cause problems for leveraged financial institutions, such as banks, because (1) their leveraged loan and CLO holdings are small relative to total assets and limited mostly to AAA tranches; and (2) banks face higher capital and liquidity requirements to protect against losses or a liquidity freeze, respectively, than they did before the crisis. Furthermore, the largest holders of leveraged loans and CLOs are asset managers. They generally hold these assets as agents on their clients' behalf and thus are normally not vulnerable to insolvency from asset losses because those losses are directly passed on to account holders, who own the assets. Another source of systemic risk relates to a liquidity mismatch for certain holders. There is potentially an incentive for investors in leveraged loan mutual funds and exchange traded funds (ETFs), respectively, to redeem their shares on demand for cash or sell their shares during episodes of market or systemic distress, similar to a bank run. Because the underlying leveraged loans and CLOs are illiquid, investors who are first to exit could limit their losses if they redeem them while the fund still has cash on hand and is not forced to sell the underlying assets at fire sale prices. This incentive could act as a self-fulfilling prophecy, as the incentive to run could cause mass redemptions that then force fire sales that reduce the fund's value. Leveraged loan mutual funds generally allow withdrawal on demand, but other run risk may be limited because "U.S. CLOs are not required to mark-to-market their assets, and early redemption by investors is generally not permissible" and other private investment funds, such as hedge funds, often feature redemption restrictions. Although the financial crisis is a cautionary tale, there are other historical examples where a sudden shift in an asset class's performance did not lead to financial instability. For example, a collapse in the junk bond market following a spike in defaults from 1989 to 1990 did not pose problems for the broader financial system or economy. In addition, while CLO issuance slowed during the last financial crisis, the rating agency and data provider Standard & Poor's reports that CLO default rates remained low and "no tranches originally rated AAA or AA experienced a loss" throughout the crisis. However, the amount of CLOs outstanding was much smaller then compared to now, and product features have changed over time. More recently, in December 2018, relatively large investor withdrawals from bank loan mutual funds did not result in instability in the leveraged loan market. How Are Leveraged Loans Regulated? The goals of financial regulation, and the tools used to achieve those goals, vary based on the type of financial institution, market, or instrument involved. Thus, to answer this question, it is useful to break down leveraged loan regulation by the type of institution and activity (issuance, investment, and securitization). Leveraged lending falls under the purview of multiple regulators with different regulatory approaches and authorities. This regulatory fragmentation could encourage activities to migrate to less-regulated sectors, limits the official data available, and may complicate the evaluation and mitigation of any potential systemic risk to financial stability associated with leveraged lending. Following the 2007-2009 financial crisis, the Financial Stability Oversight Council (FSOC), an interagency council of regulators headed by the Treasury Secretary, was created to address threats to financial stability and issues where regulatory fragmentation hinders an effective policy response. In its 2018 Annual Report, FSOC recommended that the financial regulators "continue to monitor levels of nonfinancial business leverage, trends in asset valuations, and potential implications for the entities they regulate." Outside of monitoring risk, FSOC has not, to date, recommended any regulatory or legislative changes to address leveraged lending. How Are Leveraged Loan Issuance and Syndication Regulated? The regulations applicable to leveraged loan issuance and syndication differ between banks and nonbank lenders. In both cases, though, leveraged lending falls under the laws and regulations applied to business lending in general, rather than rules that apply specifically to leveraged lending. In general, banks are required to act in a safe and sound manner to mitigate the potential for failure and are subject to supervision to ensure that they are doing so. As such, regulators generally will check banks' leverage loan origination, syndication, and participation practices as part of regular examinations. This supervision could uncover cases in which a bank is originating or syndicating excessively risky leveraged loans. In addition, the bank regulators have issued guidance documents, most recently in 2013, describing certain standards and practices and communicating regulator expectations related to leveraged lending. Whether this guidance qualifies as regulation that must go through the rulemaking process is a matter of debate examined in the " What Is the Status of the Bank Regulators' Leveraged Loan Guidance? " section later in this report. In any case, the guidance covers only the leveraged loan activities of banks, is not meant to cover nonbank activity or bank investment in CLOs, and cannot address potential systemic risk originating outside of the banking system. Nonbank participants, with the exception of insurance companies, generally are not subject to similar oversight. To the extent that banks' role in leveraged lending is decreasing, and particularly in cases where a bank is not involved in a leveraged loan at all, this could result in reduced regulatory oversight of leveraged loan issuance and syndication. What Regulations Do Investors Face When They Hold Leveraged Loans or CLOs? Regulations applicable to holding leveraged loans or CLOs depend on what type of entity is involved. Nonbank investment funds, banks, and insurance companies all face different requirements. As with regulations applying to issuance, these rules generally are not uniquely or specifically applied to leveraged loans and CLOs, but rather to all types of loans and assets held by these institutions. Banks. Banks face a number of prudential (or safety and soundness) regulations related to all bank activities, including leveraged lending. Capital requirements and the Volcker Rule are notable prudential regulations banks must consider when engaged in leveraged lending. Certain payments banks make on capital are flexible, unlike the rigid payment obligations they face on deposits and liabilities. Thus, capital gives banks the ability to absorb some amount of losses without failing. Banks are required to satisfy several requirements to ensure they hold enough capital. In general, these requirements are expressed as minimum ratios between certain balance sheet items that banks must maintain. L everage ratios require banks to hold a certain amount of capital for all loans regardless of riskiness, whereas r isk -weighted ratios require banks to hold an amount of capital based on the riskiness of the loan. When a bank holds leveraged loans or CLO tranches or makes credit available to others to finance leveraged loans or CLOs, it must comply with both types of requirements. Based on the characteristics of individual loans and assets, a bank might be required to hold a relatively large amount of capital for leveraged loans and CLOs to comply with risk-weighted ratios. Banks also face certain permissible activity restrictions , which prohibit them from engaging in certain risky activities. Section 619 of the Dodd-Frank Act (called the Volcker Rule) is one such regulation that prohibits banks from proprietary trading and certain relationships with hedge funds and certain other funds. The latter restriction may be pertinent to banks' involvement in CLOs, depending on how they are structured. Although CLOs may be structured in a manner similar to loan participations (which generally are allowed under the Volcker Rule), they can also be structured such that banks' ownership interests appear similar to those associated with hedge funds (which is generally not allowed under the Volcker Rule). The Volcker Rule establishes criteria for a CLO to qualify for an exemption. Moreover, the final rule provides guidance on how banks may construct CLO structures to avoid retaining impermissible ownership or equity interests that resemble hedge funds. In addition, banks are subject to periodic examination by federal bank regulators. If examiners determine a bank is holding overly risky loans, they can give it a worse rating (which in turn could increase the fees it pays for deposit insurance or restrict it from certain activities) or direct it to take corrective action. Because leveraged loans are considered more risky than other loan types, they may be more likely to draw examiners' attention and elicit a response. Furthermore, the bank regulators established the Shared National Credit Program in 1977 to more closely monitor and assess risk related to large syndicated loans. The program requires banks to report data on syndicated loans larger than $100 million. To inform banks of their regulatory obligations and regulator expectations related to leveraged lending, the federal bank regulatory agencies have issued a guidance document to banks. Whether this document qualifies as an official regulation, as well as, whether it inappropriately discouraged banks from engaging in leveraged lending, is a subject of debate covered in this report's section " What Is the Status of the Bank Regulators' Leveraged Loan Guidance? " below. Asset management . Relative to banking, investment funds in the asset management industry involve different operational frameworks and regulatory requirements. The asset management industry's operating framework is an agent-based model that separates investment management functions from investment ownership. In this model, risk is largely borne by the investors who own the assets, not by the companies managing them. This is different from the model used for banking, in which banks own and retain the assets and risks. Asset managers are generally not subject to safety and soundness regulations that apply to banks. The Securities and Exchange Commission (SEC) is the primary regulator overseeing the asset management industry. The main components of the SEC's asset management regulatory regime include disclosure requirements, investor access restrictions, examinations, and risk mitigation controls. In addition, the SEC's Office of Compliance Inspections and Examinations (OCIE) is responsible for conducting examinations and certain other risk oversight of the asset management industry. Examples of violations involving leveraged loan capital markets participants that could trigger a SEC investigation include market manipulation and violation of fiduciary duties. Industry self-regulatory organizations under SEC oversight, such as the Financial Industry Regulatory Authority (FINRA), could also examine broker-dealers involved with leveraged lending. Restrictions or requirements for investment funds in the leveraged lending and CLO markets depend on whether a fund is public (broadly accessible by investors of all types) or private (accessible only by institutional and individual investors who meet certain size and sophistication criteria). Public funds that invest in leveraged lending and CLOs include mutual funds and exchange-traded funds (ETFs), whereas private fund investors include hedge funds and private equity. Depending on the types of the funds, they could also be subject to other requirements, such as disclosure of portfolio holdings through prospectus, conflict of interest mitigation through fiduciary requirements, liquidity and leverage restrictions, as well as operational compliance requirements to safeguard client assets. Insurance. Insurance firms are regulated for safety and soundness, but at the state level rather than by a federal entity. Insurance firms also face risk-based capital requirements that affect how many leveraged loans and CLOs they hold. Insurance capital requirements focus significantly on the riskiness of insurers' contingent liabilities (i.e., potential claims), in addition to the riskiness of the assets they hold. The National Association of Insurance Commissioners (NAIC) assigns a risk assessment to the assets (including leveraged loans and CLOs) insurance companies purchase to back their claims. Riskier assets get less credit toward fulfilling those capital requirements. Thus, the risk assessment assigned to individual leveraged loans and CLOs largely determines the limits that capital requirements impose on insurers' holdings of those loans and securities. In 2017, 97% of CLOs held by insurers received an investment-grade rating from the NAIC (NAIC-1 or NAIC-2), posing less expected risk and requiring less capital to guard against that risk than lower-rated holdings. A significant difference between the insurance and banking industries, and thus how they are regulated for safety and soundness, is the importance of matching the durations of assets and liabilities in insurance, particularly life insurance. Insurance often entails much longer-term liabilities than does banking, allowing insurers to safely hold longer-term assets to match these longer-term liabilities. This allowance for duration matching may influence the leveraged loans and CLOs an insurer can safely hold. However, insurance regulators have recently increased their focus on the liquidity of insurers' assets, which could discourage insurers from holding many leveraged loans and CLOs because of their relative illiquidity. How Is the Securitization Process to Create CLOs Regulated? Through the securitization process, securities (CLOs) backed by leveraged loans are issued and sold to investors. This section highlights the regulatory requirements applied to CLOs and CLO managers. Notably, it discusses the initial application of risk-retention rules to CLOs, and their subsequent partial removal. The securitization process traditionally allowed managers creating the securities to fully transfer their portfolio assets (and risks) to capital markets investors. This process could result in a misalignment of incentives between managers and investors because the managers did not share much of the securitized products' risks, which has been referred to as a lack of "skin in the game." The 2007-2009 financial crisis revealed this misalignment as a structural flaw that contributed to the crisis. To address the issue, the SEC and other financial regulators adopted credit risk-retention rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act ( P.L. 111-203 ) for securitization structures, including CLOs, in December 2016. The risk retention rule requires CLO managers to retain 5% of the original value of CLO assets, thus aligning their own interests with those of investors (i.e., imposing skin in the game). Subsequently, in 2018, the U.S. Court of Appeals ruled that managers of open-market CLOs, which are reportedly the most common form of CLOs, are no longer subject to risk-retention rules. However, other types of CLOs are still subject to risk-retention requirements. CLOs are securities instruments. The federal securities laws, including the Securities Act of 1933 (P.L. 73-22) and the Securities Exchange Act of 1934 (P.L. 73-291), require all offers and sales of CLO securities to either be registered under its provisions or qualify for an exemption from registration. Registration requires public disclosure of material information, such as the underlying security's financial details. However, most CLOs are created under private exemptions, which require less registration than public offerings but confine offerings to a more limited investor base. As discussed above, a CLO manager oversees the securitization process. CLO managers are generally registered as investment advisers under the Investment Advisers Act of 1940. As a result, they are subject to the SEC's registration and compliance requirements as well as the fiduciary duties that obligate them to place clients' interests above their own. What Is the Status of the Bank Regulators' Leveraged Loan Guidance? Bank regulators use guidance to provide clarity to banks on supervision, such as how supervisors treat specific activities in their exams. In 2013, the federal bank regulators jointly issued an updated 15-page guidance document that described their "expectations for the sound risk management of leveraged lending activities." Subsequently, banks asserted that following the guidance constrained them from making sound loans and that regulators enforced the guidance as if it were a binding regulation. As opposed to guidance, a regulation can be issued only if the agency follows the Administrative Procedure Act's requirements (5 U.S.C. Â§551 et seq.), including the notice and comment process and other relevant requirements. Under the Congressional Review Act (CRA; P.L. 104-121 ), regulators must submit new regulations and certain guidance documents to Congress, which can then prevent a regulation or guidance from taking effect by enacting a joint resolution of disapproval. Because the bank regulators appeared to have the view that the document did not meet the CRA's definition of "rule," they did not submit it to Congress. In 2017, Senator Pat Toomey asked the Government Accountability Office (GAO) to analyze the guidance and determine whether it qualified as a rule subject to CRA review. GAO concluded that the guidance is a rule subject to CRA review. Following GAO's determination, the bank regulators reportedly sent letters to Congress indicating they would seek further feedback on the guidance, and Federal Reserve Chairman Jerome Powell indicated at a hearing on February 27, 2018, that the Federal Reserve has emphasized to its bank supervisors that the guidance was nonbinding. The Comptroller of the Currency, Joseph Otting, reportedly stated in 2018 that the guidance provides flexibility for leveraged loans that do not meet its criteria, provided banks operate in a safe and sound manner. To date, no changes have been made to the guidance and no joint resolution of disapproval under the CRA has been introduced. The Congressional Research Service has been unable to locate a submission of the guidance to Congress following the GAO finding that it was required under the CRA. How Has Congress Responded to Leveraged Lending? The House Financial Services Committee held a hearing on June 4, 2019, entitled Emerging Threats to Stability: Considering the Systemic Risk of Leveraged Lending . Two unnumbered draft bills related to leveraged lending were considered at this hearing. The draft Leveraged Lending Data and Analysis Act would require the Office of Financial Research, a Treasury office that supports FSOC, to gather information, assess risks, and make recommendations in a report to Congress on leveraged lending. The draft Leveraged Lending Examination Enhancement Act would require the Federal Financial Institutions Examination Council (FFIEC), an interagency council of federal bank regulators, to set prudential standards for leveraged lending by depository institutions. It would also require the FFIEC to report quarterly on leveraged lending by depository institutions. Summary:	null	96	41,261	41,263	41,263	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: R apid growth in leveraged lending, a relatively complex form of credit, in the current economic expansion has raised concerns with some policymakers because they have noted similarities between leveraged lending and mortgage lending and mortgage-backed securities (MBS) markets in the lead-up to the 2007-2009 financial crisis. This report explains how leveraged lending works; identifies the borrowers, lenders, and investors who participate in the market; and examines the characteristics of a leveraged loan. It then explains the characteristics of collateralized loan obligations (CLOs)âsecurities backed by cash flow from pools of leveraged loansâand their investors. Understanding CLOs is crucial to a discussion of the policy issues surrounding leveraged lending because more than 60% of investment in leveraged lending occurs through CLOs. The report also provides data on trends and investor composition. Once these basics are explained, the report explores the regulation ofâand some of the potential risks posed byâleveraged lending and CLOs. Finally, it discusses how policymakers have addressed leveraged lending issues to date. What Is Leveraged Lending? Put simply, leveraged lending refers to loans to companies that are highly indebted (in financial jargon, highly leveraged ). Conceptually, a leveraged loan is understood to be a relatively high-risk loan made to a corporate borrower, but there is no consensus definition of leveraged lending for measurement purposes. Instead, different observers or industry groups use various working definitions that may refer to the borrower's corporate credit rating or a ratio of the company's debt to some measure of its ability to repay that debt, such as earnings or net worth. Because they are high risk, leveraged loans typically have relatively high interest rates, and thus offer higher potential returns for lenders. Who Are the Borrowers? Leveraged loans are made to companies from all industries, and the concentration of leveraged lending in each industry varies over time based on industries' economic conditions. In the second quarter of 2018, healthcare and service were the top two industries using leveraged lending. Leveraged loans are often used to complete a buyout or merger, restructure a company's balance sheet (by buying back shares, for example), or refinance existing debt. Who Are the Lenders? Several types of institutions provide funds to borrowers in leveraged lending, including banks, insurance companies, pension funds, mutual funds, hedge funds, and other private investment funds. Put simply, those institutions are the lenders. However, this concise explanation does not capture certain important characteristics and dynamics within the leveraged lending market. The institution that originates a leveraged loan rarely, if ever, subsequently holds the loan entirely on its own balance sheet, because a lender often would be wary of taking on a large exposure to a single highly indebted company. Instead, the originating lender typically will either (1) partner with colenders, (2) sell pieces of a single loan to investors, or (3) bundle part or all of the loan into a pool of other leveraged loans in a process called securitization , then sell pieces of the pool to investors. The first two optionsâreferred to as syndicat ion and participation , respectivelyâare described in more detail below. The third option creates securities called collateralized loan obligations (CLOs), which are described in more detail in the " What Are CLOs? " section. When examining statistics or regulations related to leveraged loans, this report will distinguish between institutions that issue (i.e., originate or create) leveraged loans and institutions that hold (i.e., invest in or purchase pieces of) leveraged loans or CLOs. One notable recent trend is the migration of activity from the banking sector to the nonbank sector. Historically, banks played a primary role in both issuing and holding leveraged loans. However, in recent decades, nonbank credit investors, such as private investment funds and finance companies, have increasingly overtaken market share. As shown in Figure 1 , in the primary market , where leveraged loans are first created, bank financing has fallen from about 70% in the mid-1990s to below 10% in 2018, whereas all other nonbank financing combined now comprises more than 90% of leveraged loan investments. As discussed below, this migration of activity from the banking industry to nonbank institutions has implications for systemic risk and how leveraged loans are regulated. What Are Loan Syndication and Participation? In general, a single lender does not want to hold a whole leveraged loan because such loans are large and risky. Instead, lenders typically use economically similar but contractually different arrangementsâsyndication and participationâto divide the loan among multiple lenders. Under both arrangements, multiple lenders provide a portion of the loan's funding and share in its risk and returns. The contractual relationship between the parties differs in syndications and participations. In a syndicated loan, the borrower enters into a single loan agreement with multiple lenders. Hence, all lenders have a direct contractual relationship with the borrower. Alternatively, a single lender could enter into the loan agreement with the borrower, and this originating lender could then sell portions of the loan, called participations , to other lenders. In this case, the borrower has a direct contractual relationship with the originating lender, who in turn has contractual relationships with the other participants. In either case, the loan has in effect been split up between multiple lenders, even though the particulars of the various parties' contractual rights and responsibilities differ. Syndication and participation require a relatively high degree of coordination among various institutions and stakeholders, and industry practice is that one company acts as an arranger of the deal. The arranger gathers information about the borrower and the loan's purpose, determines appropriate pricing and loan terms, and brings together lenders to join a loan syndication or buy participations. After the deal is closed, the arranger or another company acts as the loan's agent by collecting the payments and fees and passing the appropriate amounts to the loan's holders. The arranger and agent collect fees for these services. Traditionally, arrangers and agents were banks, who would also hold a large portion of the loan, and the colenders were also banks. Since the mid-1990s, colenders have increasingly been nonbank lenders, such as finance companies and private investment funds, and the portions of loans held by banks have decreased. In some cases, nonbank lenders have taken on the arranger and agent roles. How syndications and participations are regulated is covered in " How Are Leveraged Loans Regulated? " What Are Covenants and Covenant-Lite Loans? Leveraged loan agreements typically include covenants âprovisions in the loan contract that set conditions the borrower must meet to avoid technical default (as opposed to a payment default, wherein a scheduled payment is missed). Often these conditions relate to indications of the borrower's ability to repay the loan, such as cash flow and financial performance, or restrict certain actions the borrower may take, such as management changes or asset sales. If the borrower violates a covenant, the lender can accelerate or call the loan (possibly forcing the borrower into bankruptcy), but often lenders will instead restructure the loan with stricter terms that may include additional restrictions on the borrower's behavior. Lenders see covenants as an important mechanism to monitor the borrower's ability to repay the loan and avoid repayment defaults. Loan agreements that include fewer or more lax covenants than are found in traditional leveraged lending contracts are often characterized as covenant-lite . A number of industry observers have noted that covenant-lite loans are becoming more common, and some have argued this indicates credit standards are declining and could lead to higher losses in the future. However, the causes of the increase in covenant-lite loans and the level of concern this trend warrants are subject to debate. What Is the Size of the Leveraged Lending Market, and How Much Has It Grown Recently? The Federal Reserve states that there were approximately $1.15 trillion of leveraged loans outstanding at the end of 2018. For comparison, this amount was similar to U.S. auto loans ($1.16 trillion) or credit card debt ($1.06 trillion) outstanding. In recent years, leveraged lending has grown much faster than other categories of credit reported by the Federal Reserve (see Table 1 ). The $1.15 trillion outstanding was a 20.1% increase from a year earlierâmore than four times the growth of overall business creditâand annual growth has averaged 15.8% since 2000. By comparison, student loans outstanding grew 5.3% last year and have averaged 9.7% annual growth since 1997. In part, the rapid growth in leveraged loans reflects growing nonfinancial business indebtedness, but overall nonfinancial business indebtedness grew only about a fifth as quickly as leveraged lending. This suggests that leveraged lending growth may reflect a substitution of one type of debt for another. Who Holds Leveraged Loans? Investors can hold leveraged loans by either (1) investing directly in individual leveraged loans, typically through syndications and participations or (2) investing in CLOs. Institutions that directly hold large shares of outstanding leveraged loans include mutual funds (19%), banks (8%), and insurance companies (6%), as shown in Figure 2 . According to one study, mutual fund holdings are split fairly evenly between funds offered to institutional investors and funds offered to retail investors. Nearly all of the remainder of leveraged loans (62%) are held by CLOs. Portions, or tranches , of CLOs are then sold, largely to the same types of investors that invest directly in leveraged loans. CLOs will be discussed in more detail in the next section. As discussed above, banks' share of funding in the leveraged loan market has exhibited a long-term decline. What Are CLOs? Collateralized loan obligations are securities backed by portfolios of corporate loans. Although CLOs can be backed by a pool of any type of business loan, in practice, U.S. CLOs are primarily backed by leveraged loans, according to the Federal Reserve. The outstanding value of U.S. CLOs has grown from around $200 billion at year-end 2006 to $617 billion at year-end 2018. As noted above, about 60% of leveraged loans are held in CLOs. CLOs offer a way for investors to receive cash flows from many loans, instead of being completely exposed to potential payments or defaults on a single loan. To isolate financial risks, CLOs are structured as bankruptcy-remote special purpose vehicles (SPVs) that are separate legal entities. Each CLO has a portfolio manager, who is responsible for constructing the initial portfolio as well as the CLO's ongoing trading activities. CLO managers are primarily banks, investment firms (including hedge funds), and private equity firms. CLOs are sold in separate tranches , which give the holder the right to the payment of cash flow on the underlying loans. The different tranches are assigned different payment priorities, so some will incur losses before others. This tranche structure redistributes the loan portfolios' credit risk. The tranches are often known as senior , mezzanine , and equity tranches, in order from highest to lowest payment priority, credit quality, and credit rating. Through this process, the loan portfolio's risks are redistributed to the lower tranches first, and tranches with higher credit ratings are formed. In general, the financial industry views CLOs' tranched structure as an effective method for providing economic protection against unexpected losses. As Figure 3 illustrates, in the event of default, the lower CLO tranches would incur losses before others. Hence, tranches with higher payment priority have additional protection from losses and receive a higher credit rating. The pricing of the tranches also reflects this difference in asset quality and credit risk, with lower tranches offering potentially higher returns to compensate for greater risks taken. Who Holds CLOs? CLOs are often sold to institutional investors, including asset managers, banks, insurance companies, and others. The asset management industry, which includes hedge funds and mutual funds, mainly holds the riskier mezzanine and equity tranches, and banks and insurers hold most of the lower-risk senior CLO tranches. The Federal Reserve estimated that U.S. investors held approximately $556 billion in CLOs based on U.S. loans at the end of 2018. Of this, an estimated $147 billion in U.S. CLO holdings were issued domestically. Detailed data on domestic CLOs' holders are not available; certain detailed data, however, can be found in the reporting of cross-border financial holdings, which comprise a large majority of U.S. CLOs. The cross-border financial reporting indicates that $409 billion of U.S. CLO holdings were issued in the Cayman Islands, apparently the only offshore issuer. Figure 4 provides an overview by investor type for domestic holdings of these CLOs. Could Leveraged Loans Exacerbate an Economic Downturn? The rapid growth of leveraged lending has led to concerns that this source of credit could dry up in the next downturn. A slowdown in leveraged loan issuance could pose challenges for the (primarily) nonfinancial companies relying on leveraged loans for financing. Were these firms to lose access to financing, they could be forced to reduce their capital spending, among other operational constraints, if they were unable to find alternative funding sources. Capital spending (physical investment) by businesses is typically one of the most cyclical components of the economy, meaning it is highly sensitive to expansions and recessions. Overall borrowing by nonfinancial firms is historically high at present. This raises concerns that heavily indebted firms could experience a debt overhang âwhere high levels of existing debt curtail a firm's ability to take on new debtâin the next downturn. If a debt overhang at nonfinancial firms leads to a larger-than-normal reduction in capital spending or more corporate failures, this might exacerbate the overall downturn. If a downturn in the leveraged loan market had a negative effect on financial stability, as discussed in the next section, negative effects on the overall economy could be greater. What Are the Risks Associated with Leveraged Loans and CLOs? Leveraged loans and CLOs pose potential risks to investors and overall financial stability. Some risks, such as potential unexpected losses for investors, are presented by both leveraged loans and CLOs. Some apply to only one, such as risks posed by securitization presented by CLOs. This section considers the risks posed by both, highlighting differences between the two where applicable. Risks to investors. Like any financial instrument, leveraged loans and CLOs pose various types of risk to investors. In particular, they pose credit risk âthe risk that loans will not be repaid in full (due to default, for example). Credit risk is heightened because the borrowers are typically relatively indebted, have low credit ratings, and, in the case of covenant-lite loans, certain common risk-mitigating protections have been omitted. The ways borrowers often use the funds raised from leveraged loans, such as for leveraged buyouts, can also be high risk. Nevertheless, the overall risk of leveraged loans should not be exaggeratedâleveraged loans have historically had lower default rates and higher recovery rates in default than high-yield ( junk ) bonds, another form of debt issued by financially weaker firms. Credit risk is mitigated to a certain degree because leveraged loans are typically secured and their holders stand ahead of the firm's equity holders to be repaid in the event of bankruptcy. Furthermore, leveraged loans typically have floating interest rates, so interest rate risk is borne by the borrower, not the investor. As mentioned in the "What Are CLOs?" section, when leveraged loans are securitized and packaged into CLOs, the credit risk of the original leveraged loans is redistributed by the CLOs' tranched structure, with senior tranches (mostly held by banks and insurers) often receiving the highest credit rating (e.g., AAA) and junior tranches (mostly held by hedge funds and other asset managers) receiving lower credit ratings. Subordinated debt and equity positions provide additional protection to the senior tranches. Tranching distributes CLO credit risk differently across investors in different tranches. Up to this point in the credit cycle, the risks associated with leveraged loans and CLOs have largely not materializedâleveraged loan default rates have been relatively low because of low interest rates and robust business conditions. But some analysts fear that default rates could spike if economic conditions worsen, interest rates rise, or bothâand these possibilities may not have been properly priced in. Default rates on leveraged loans rose from below 1% to almost 11% during the last recession. An unanticipated spike in default rates would impose unexpected losses on leveraged loan and CLO holders. Systemic risk. Investment losses associated with changing asset values, by themselves, are routine in financial markets across many types of assets and pose no particular policy concern if investors have the opportunity to make informed decisions. The main policy concern is whether leveraged loans and CLOs pose systemic risk ; that is, whether a deterioration in leveraged loans' performanceâparticularly if it were large and unexpectedâcould lead to broader financial instability. This depends on whether channels exist through which problems with leveraged loans could spill over to cause broader problems in financial markets. Losses on leveraged loans or liquidity problems with leveraged loans could lead to financial instability through various transmission channels discussed below. During the financial crisis, problems with mortgage-backed securities (MBS) demonstrated how a class of securities can pose systemic risk. Similar to CLOs, MBS are complex, opaque securities backed by a pool of underlying assets that are typically tranched, with the senior tranches receiving the highest credit rating. Unexpected declines in housing prices and increases in mortgage default rates revealed that MBSâboth highly rated and lowly rated tranchesâhad been mispriced, with the previous pricing not accurately reflecting the underlying risks. The subsequent repricing led to a cascade of systemic distress in the financial system: liquidity in the secondary market for MBS rapidly declined and fire sales pushed all MBS prices even lower. MBS losses caused certain leveraged and interconnected financial institutions, including banks, investment firms, and insurance companies, to experience capital shortfalls and lose access to the short-term borrowing markets on which they relied. Ultimately, these problems caused financial panic and a broader decline in credit availability as financial institutions deleveraged âreducing new lending activity to restore their capital levelsâin response to MBS losses. The resulting reduction in credit in turn caused a sharp decline in real economic activity. CLOs today share some similarities with MBS before the crisis, but there are important differences. Similarities include the rapid growth in available credit and erosion of underwriting standards. Both types of securities are relatively complex and opaque, potentially obfuscating the underlying assets' true risks. Outstanding leveraged loans and CLOs are small relative to overall securities markets, which in isolation is prima facie evidence that they pose limited systemic risk, even if they were to become illiquid or subject to fire sales. However, before the financial crisis, policy concerns were mainly focused on potential problems in subprime mortgage markets, which were also relatively small. Nevertheless, problems with subprime mortgages turned out to be the proverbial tip of the iceberg, as the deflating housing bubble caused losses in the much-larger overall mortgage market. Analogously, a disruption in the leveraged lending market could create spillover effects in related asset classes, similar to how problems that started with subprime mortgages eventually spread to the entire mortgage market and nonmortgage asset-backed securities in the financial crisis. Ultimately, the underlying cause of the MBS meltdown was the bursting of the housing bubble. Despite the high share of business debt to gross domestic product (GDP) at present, experts are divided on whether there is any underlying asset bubble in corporate debt markets (analogous to the housing bubble) that could lead to a destabilizing downturn. In addition, it is not clear whether unexpected losses in leveraged lending would lead to broader systemic deleveraging by financial firms or problems for systemically important institutions. Losses on leveraged loans or CLOs might not cause problems for leveraged financial institutions, such as banks, because (1) their leveraged loan and CLO holdings are small relative to total assets and limited mostly to AAA tranches; and (2) banks face higher capital and liquidity requirements to protect against losses or a liquidity freeze, respectively, than they did before the crisis. Furthermore, the largest holders of leveraged loans and CLOs are asset managers. They generally hold these assets as agents on their clients' behalf and thus are normally not vulnerable to insolvency from asset losses because those losses are directly passed on to account holders, who own the assets. Another source of systemic risk relates to a liquidity mismatch for certain holders. There is potentially an incentive for investors in leveraged loan mutual funds and exchange traded funds (ETFs), respectively, to redeem their shares on demand for cash or sell their shares during episodes of market or systemic distress, similar to a bank run. Because the underlying leveraged loans and CLOs are illiquid, investors who are first to exit could limit their losses if they redeem them while the fund still has cash on hand and is not forced to sell the underlying assets at fire sale prices. This incentive could act as a self-fulfilling prophecy, as the incentive to run could cause mass redemptions that then force fire sales that reduce the fund's value. Leveraged loan mutual funds generally allow withdrawal on demand, but other run risk may be limited because "U.S. CLOs are not required to mark-to-market their assets, and early redemption by investors is generally not permissible" and other private investment funds, such as hedge funds, often feature redemption restrictions. Although the financial crisis is a cautionary tale, there are other historical examples where a sudden shift in an asset class's performance did not lead to financial instability. For example, a collapse in the junk bond market following a spike in defaults from 1989 to 1990 did not pose problems for the broader financial system or economy. In addition, while CLO issuance slowed during the last financial crisis, the rating agency and data provider Standard & Poor's reports that CLO default rates remained low and "no tranches originally rated AAA or AA experienced a loss" throughout the crisis. However, the amount of CLOs outstanding was much smaller then compared to now, and product features have changed over time. More recently, in December 2018, relatively large investor withdrawals from bank loan mutual funds did not result in instability in the leveraged loan market. How Are Leveraged Loans Regulated? The goals of financial regulation, and the tools used to achieve those goals, vary based on the type of financial institution, market, or instrument involved. Thus, to answer this question, it is useful to break down leveraged loan regulation by the type of institution and activity (issuance, investment, and securitization). Leveraged lending falls under the purview of multiple regulators with different regulatory approaches and authorities. This regulatory fragmentation could encourage activities to migrate to less-regulated sectors, limits the official data available, and may complicate the evaluation and mitigation of any potential systemic risk to financial stability associated with leveraged lending. Following the 2007-2009 financial crisis, the Financial Stability Oversight Council (FSOC), an interagency council of regulators headed by the Treasury Secretary, was created to address threats to financial stability and issues where regulatory fragmentation hinders an effective policy response. In its 2018 Annual Report, FSOC recommended that the financial regulators "continue to monitor levels of nonfinancial business leverage, trends in asset valuations, and potential implications for the entities they regulate." Outside of monitoring risk, FSOC has not, to date, recommended any regulatory or legislative changes to address leveraged lending. How Are Leveraged Loan Issuance and Syndication Regulated? The regulations applicable to leveraged loan issuance and syndication differ between banks and nonbank lenders. In both cases, though, leveraged lending falls under the laws and regulations applied to business lending in general, rather than rules that apply specifically to leveraged lending. In general, banks are required to act in a safe and sound manner to mitigate the potential for failure and are subject to supervision to ensure that they are doing so. As such, regulators generally will check banks' leverage loan origination, syndication, and participation practices as part of regular examinations. This supervision could uncover cases in which a bank is originating or syndicating excessively risky leveraged loans. In addition, the bank regulators have issued guidance documents, most recently in 2013, describing certain standards and practices and communicating regulator expectations related to leveraged lending. Whether this guidance qualifies as regulation that must go through the rulemaking process is a matter of debate examined in the " What Is the Status of the Bank Regulators' Leveraged Loan Guidance? " section later in this report. In any case, the guidance covers only the leveraged loan activities of banks, is not meant to cover nonbank activity or bank investment in CLOs, and cannot address potential systemic risk originating outside of the banking system. Nonbank participants, with the exception of insurance companies, generally are not subject to similar oversight. To the extent that banks' role in leveraged lending is decreasing, and particularly in cases where a bank is not involved in a leveraged loan at all, this could result in reduced regulatory oversight of leveraged loan issuance and syndication. What Regulations Do Investors Face When They Hold Leveraged Loans or CLOs? Regulations applicable to holding leveraged loans or CLOs depend on what type of entity is involved. Nonbank investment funds, banks, and insurance companies all face different requirements. As with regulations applying to issuance, these rules generally are not uniquely or specifically applied to leveraged loans and CLOs, but rather to all types of loans and assets held by these institutions. Banks. Banks face a number of prudential (or safety and soundness) regulations related to all bank activities, including leveraged lending. Capital requirements and the Volcker Rule are notable prudential regulations banks must consider when engaged in leveraged lending. Certain payments banks make on capital are flexible, unlike the rigid payment obligations they face on deposits and liabilities. Thus, capital gives banks the ability to absorb some amount of losses without failing. Banks are required to satisfy several requirements to ensure they hold enough capital. In general, these requirements are expressed as minimum ratios between certain balance sheet items that banks must maintain. L everage ratios require banks to hold a certain amount of capital for all loans regardless of riskiness, whereas r isk -weighted ratios require banks to hold an amount of capital based on the riskiness of the loan. When a bank holds leveraged loans or CLO tranches or makes credit available to others to finance leveraged loans or CLOs, it must comply with both types of requirements. Based on the characteristics of individual loans and assets, a bank might be required to hold a relatively large amount of capital for leveraged loans and CLOs to comply with risk-weighted ratios. Banks also face certain permissible activity restrictions , which prohibit them from engaging in certain risky activities. Section 619 of the Dodd-Frank Act (called the Volcker Rule) is one such regulation that prohibits banks from proprietary trading and certain relationships with hedge funds and certain other funds. The latter restriction may be pertinent to banks' involvement in CLOs, depending on how they are structured. Although CLOs may be structured in a manner similar to loan participations (which generally are allowed under the Volcker Rule), they can also be structured such that banks' ownership interests appear similar to those associated with hedge funds (which is generally not allowed under the Volcker Rule). The Volcker Rule establishes criteria for a CLO to qualify for an exemption. Moreover, the final rule provides guidance on how banks may construct CLO structures to avoid retaining impermissible ownership or equity interests that resemble hedge funds. In addition, banks are subject to periodic examination by federal bank regulators. If examiners determine a bank is holding overly risky loans, they can give it a worse rating (which in turn could increase the fees it pays for deposit insurance or restrict it from certain activities) or direct it to take corrective action. Because leveraged loans are considered more risky than other loan types, they may be more likely to draw examiners' attention and elicit a response. Furthermore, the bank regulators established the Shared National Credit Program in 1977 to more closely monitor and assess risk related to large syndicated loans. The program requires banks to report data on syndicated loans larger than $100 million. To inform banks of their regulatory obligations and regulator expectations related to leveraged lending, the federal bank regulatory agencies have issued a guidance document to banks. Whether this document qualifies as an official regulation, as well as, whether it inappropriately discouraged banks from engaging in leveraged lending, is a subject of debate covered in this report's section " What Is the Status of the Bank Regulators' Leveraged Loan Guidance? " below. Asset management . Relative to banking, investment funds in the asset management industry involve different operational frameworks and regulatory requirements. The asset management industry's operating framework is an agent-based model that separates investment management functions from investment ownership. In this model, risk is largely borne by the investors who own the assets, not by the companies managing them. This is different from the model used for banking, in which banks own and retain the assets and risks. Asset managers are generally not subject to safety and soundness regulations that apply to banks. The Securities and Exchange Commission (SEC) is the primary regulator overseeing the asset management industry. The main components of the SEC's asset management regulatory regime include disclosure requirements, investor access restrictions, examinations, and risk mitigation controls. In addition, the SEC's Office of Compliance Inspections and Examinations (OCIE) is responsible for conducting examinations and certain other risk oversight of the asset management industry. Examples of violations involving leveraged loan capital markets participants that could trigger a SEC investigation include market manipulation and violation of fiduciary duties. Industry self-regulatory organizations under SEC oversight, such as the Financial Industry Regulatory Authority (FINRA), could also examine broker-dealers involved with leveraged lending. Restrictions or requirements for investment funds in the leveraged lending and CLO markets depend on whether a fund is public (broadly accessible by investors of all types) or private (accessible only by institutional and individual investors who meet certain size and sophistication criteria). Public funds that invest in leveraged lending and CLOs include mutual funds and exchange-traded funds (ETFs), whereas private fund investors include hedge funds and private equity. Depending on the types of the funds, they could also be subject to other requirements, such as disclosure of portfolio holdings through prospectus, conflict of interest mitigation through fiduciary requirements, liquidity and leverage restrictions, as well as operational compliance requirements to safeguard client assets. Insurance. Insurance firms are regulated for safety and soundness, but at the state level rather than by a federal entity. Insurance firms also face risk-based capital requirements that affect how many leveraged loans and CLOs they hold. Insurance capital requirements focus significantly on the riskiness of insurers' contingent liabilities (i.e., potential claims), in addition to the riskiness of the assets they hold. The National Association of Insurance Commissioners (NAIC) assigns a risk assessment to the assets (including leveraged loans and CLOs) insurance companies purchase to back their claims. Riskier assets get less credit toward fulfilling those capital requirements. Thus, the risk assessment assigned to individual leveraged loans and CLOs largely determines the limits that capital requirements impose on insurers' holdings of those loans and securities. In 2017, 97% of CLOs held by insurers received an investment-grade rating from the NAIC (NAIC-1 or NAIC-2), posing less expected risk and requiring less capital to guard against that risk than lower-rated holdings. A significant difference between the insurance and banking industries, and thus how they are regulated for safety and soundness, is the importance of matching the durations of assets and liabilities in insurance, particularly life insurance. Insurance often entails much longer-term liabilities than does banking, allowing insurers to safely hold longer-term assets to match these longer-term liabilities. This allowance for duration matching may influence the leveraged loans and CLOs an insurer can safely hold. However, insurance regulators have recently increased their focus on the liquidity of insurers' assets, which could discourage insurers from holding many leveraged loans and CLOs because of their relative illiquidity. How Is the Securitization Process to Create CLOs Regulated? Through the securitization process, securities (CLOs) backed by leveraged loans are issued and sold to investors. This section highlights the regulatory requirements applied to CLOs and CLO managers. Notably, it discusses the initial application of risk-retention rules to CLOs, and their subsequent partial removal. The securitization process traditionally allowed managers creating the securities to fully transfer their portfolio assets (and risks) to capital markets investors. This process could result in a misalignment of incentives between managers and investors because the managers did not share much of the securitized products' risks, which has been referred to as a lack of "skin in the game." The 2007-2009 financial crisis revealed this misalignment as a structural flaw that contributed to the crisis. To address the issue, the SEC and other financial regulators adopted credit risk-retention rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act ( P.L. 111-203 ) for securitization structures, including CLOs, in December 2016. The risk retention rule requires CLO managers to retain 5% of the original value of CLO assets, thus aligning their own interests with those of investors (i.e., imposing skin in the game). Subsequently, in 2018, the U.S. Court of Appeals ruled that managers of open-market CLOs, which are reportedly the most common form of CLOs, are no longer subject to risk-retention rules. However, other types of CLOs are still subject to risk-retention requirements. CLOs are securities instruments. The federal securities laws, including the Securities Act of 1933 (P.L. 73-22) and the Securities Exchange Act of 1934 (P.L. 73-291), require all offers and sales of CLO securities to either be registered under its provisions or qualify for an exemption from registration. Registration requires public disclosure of material information, such as the underlying security's financial details. However, most CLOs are created under private exemptions, which require less registration than public offerings but confine offerings to a more limited investor base. As discussed above, a CLO manager oversees the securitization process. CLO managers are generally registered as investment advisers under the Investment Advisers Act of 1940. As a result, they are subject to the SEC's registration and compliance requirements as well as the fiduciary duties that obligate them to place clients' interests above their own. What Is the Status of the Bank Regulators' Leveraged Loan Guidance? Bank regulators use guidance to provide clarity to banks on supervision, such as how supervisors treat specific activities in their exams. In 2013, the federal bank regulators jointly issued an updated 15-page guidance document that described their "expectations for the sound risk management of leveraged lending activities." Subsequently, banks asserted that following the guidance constrained them from making sound loans and that regulators enforced the guidance as if it were a binding regulation. As opposed to guidance, a regulation can be issued only if the agency follows the Administrative Procedure Act's requirements (5 U.S.C. Â§551 et seq.), including the notice and comment process and other relevant requirements. Under the Congressional Review Act (CRA; P.L. 104-121 ), regulators must submit new regulations and certain guidance documents to Congress, which can then prevent a regulation or guidance from taking effect by enacting a joint resolution of disapproval. Because the bank regulators appeared to have the view that the document did not meet the CRA's definition of "rule," they did not submit it to Congress. In 2017, Senator Pat Toomey asked the Government Accountability Office (GAO) to analyze the guidance and determine whether it qualified as a rule subject to CRA review. GAO concluded that the guidance is a rule subject to CRA review. Following GAO's determination, the bank regulators reportedly sent letters to Congress indicating they would seek further feedback on the guidance, and Federal Reserve Chairman Jerome Powell indicated at a hearing on February 27, 2018, that the Federal Reserve has emphasized to its bank supervisors that the guidance was nonbinding. The Comptroller of the Currency, Joseph Otting, reportedly stated in 2018 that the guidance provides flexibility for leveraged loans that do not meet its criteria, provided banks operate in a safe and sound manner. To date, no changes have been made to the guidance and no joint resolution of disapproval under the CRA has been introduced. The Congressional Research Service has been unable to locate a submission of the guidance to Congress following the GAO finding that it was required under the CRA. How Has Congress Responded to Leveraged Lending? The House Financial Services Committee held a hearing on June 4, 2019, entitled Emerging Threats to Stability: Considering the Systemic Risk of Leveraged Lending . Two unnumbered draft bills related to leveraged lending were considered at this hearing. The draft Leveraged Lending Data and Analysis Act would require the Office of Financial Research, a Treasury office that supports FSOC, to gather information, assess risks, and make recommendations in a report to Congress on leveraged lending. The draft Leveraged Lending Examination Enhancement Act would require the Federal Financial Institutions Examination Council (FFIEC), an interagency council of federal bank regulators, to set prudential standards for leveraged lending by depository institutions. It would also require the FFIEC to report quarterly on leveraged lending by depository institutions.	Summary:	gov_report	1,024	null	92
crs_R46144	crs_R46144_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction This report provides an overview of the FY2020 National Defense Authorization Act ( H.R. 2500 , S. 1790 , P.L. 116-92 ) and serves as a portal to other CRS products providing additional context, detail, and analysis concerning particular aspects of that legislation. Enacted annually to cover every defense budget since FY1962, the NDAA authorizes funding for the Department of Defense (DOD) activities at the same level of detail at which budget authority is provided by the corresponding defense, military construction, and other appropriations bills. While the NDAA does not provide budget authority, historically it has provided a fairly reliable indicator of congressional sentiment on funding for particular programs. The bill also incorporates provisions of law governing military compensation, the DOD acquisition process, and aspects of DOD policy toward other countries, among other subjects. Of the $761.8 billion requested by the Trump Administration for National Defense-related activities in FY2020, $750.0 billion is discretionary spending, of which approximately $741.9 billion falls within the scope of the annual NDAA. This includes $718.4 billion for DOD operations and $23.2 billion for defense-related work by the Energy Department involving nuclear energy, mostly related to nuclear weapons and nuclear power plants for warships. Other funding for defense-related activities, such as counter-intelligence work of the Federal Bureau of Investigation (FBI), falls mostly under the jurisdiction of other congressional committees. (See Figure 1 .) The following overview reviews the strategic and budgetary context within which Congress debated the FY2020 NDAA. Subsequent sections of the report summarize the bill's treatment of major components of the Trump Administration's FY2020 budget request as well as provisions attached to the final bill that deal with other issues. FY2020 NDAA Overview As enacted, the FY2020 NDAA authorizes a total of $729.9 billion for national defense-related activities, which is $12.0 billion (1.6%) less than the Administration requested. The request included $568.1 billion to be designated as base budget funds to cover the routine, recurring costs to man, train, and operate U.S. forces. The request also included an additional $173.8 billion to be designated as Overseas Contingency Operations (OCO) funds to cover costs associated with the aftermath of the terrorist attacks of September 11, 2001, and other activities. OCO-designated funds are exempt from the binding caps on defense spending set by the Budget Control Act of 2011 ( P.L. 112-25 ) and the Administration's request included $97.7 billion to be designated as OCO funding but intended to pay base budget expenses. ( Table 1 .) The Senate Armed Services Committee reported its version of the FY2020 NDAA ( S. 1790 , S.Rept. 116-48 ) on June 11, 2019 and the Senate passed the bill on June 27, 2019. The House Armed Services Committee (HASC) reported its version ( H.R. 2500 , H.Rept. 116-120 ) on June 19, 2019 and the House passed the bill on July 12, 2019. On September 17, 2019, the House took up the Senate-passed S. 1790 , amended it by eliminating the Senate-passed provisions and replacing them with the provisions of the House-passed H.R. 2500 , and then passed the amended bill by voice vote. House and Senate conferees worked to produce a conference version of S. 1790 . The conference report ( H.Rept. 116-333 ) was agreed to by the House on December 11, 2019 by a vote of 377-48 and agreed to by the Senate on December 17, 2019 by a vote of 86-8. ( Table 2 .) Strategic Context According to the Administration, the FY2020 budget request for DOD reflects a shift in strategic emphasis based on the 2018 National Defense Strategy (NDS), which called for "increased and sustained investment" to counter evolving threats from China and Russia. This would mark a change from the focus of U.S. national security policy for nearly the past three decades and a renewed emphasis on competition between nuclear-armed superpowers, which had been the cornerstone of U.S. strategy for more than four decades after the end of World War II. During the Cold War, U.S. national security policy and the design of the U.S. military establishment were strategically focused on competing with the Union of Soviet Socialist Republics and containing the global spread of communism. In the years following the collapse of the Soviet Union, U.S. policies were designedâand U.S. forces were trained and equippedâlargely with a focus on dealing with potential regional aggressors such as Iraq, Iran, and North Korea and on recalibrating relations with China and Russia. After the terrorist attacks of September 11, 2001, U.S. national security policy and DOD planning focused largely on countering terrorism and insurgencies in the Middle East while containing, if not reversing, North Korean and Iranian nuclear weapons programs. However, as a legacy of the Cold War, U.S. and allied military forces had overwhelming military superiority over these adversaries and, accordingly, operations were conducted in relatively permissive environments. The 2014 Russian invasion of the Crimean peninsula and subsequent proxy war in eastern Ukraine fostered a renewed concern in the United States and Europe about an aggressive and revanchist regime in Moscow. Meanwhile, China began building and militarizing islands in the South China Sea in order to lay claim to key shipping lanes. Together, these events highlighted anew the salience in the U.S. national security agenda of dealing with other great powers , that is, states able and willing to use military force unilaterally to accomplish their objectives. At the same time, the challenges that had surfaced at the end of the Cold Warâfragile states, genocide, terrorism, and nuclear proliferation, to name a fewâremained serious threats to U.S. interests. In some cases, adversaries appear to be collaborating to achieve shared or compatible objectives and to take advantage of social and economic tools to advance their agendas. Some states are also collaborating with non-state proxies (including, but not limited to, militias, criminal networks, corporations, and hackers) and deliberately blurring the lines between conventional and irregular conflict and between civilian and military activities. In this complex security environment, it is arguably more difficult than in past eras to manage these myriad problems. The Trump Administration's December 2017 National Security Strategy (NSS), the 11-page unclassified summary of the January 2018 National Defense Strategy (NDS), and the 2019 National Intelligence Strategy explicitly reorient U.S. national security strategy (including defense strategy) toward a primary focus on great power competition with China and Russia and on countering their military capabilities. In addition to explicitly making the great power competition the primary U.S. national security concern, the NDS also argues for a focus on bolstering the competitive advantage of U.S. forces, which, the document contends, has eroded in recent decades vis-Ã -vis the Chinese and Russian threats. The NDS also maintains that, contrary to what was the case for most of the years since the end of the Cold War, U.S. forces now must assume that their ability to approach military objectives will be vigorously contested. The Trump Administration's strategic orientation as laid out in the NSS and NDA is consistent with the strategy outlined in comparable documents issued by prior Administrations, in identifying five significant external threats to U.S. interests: China, Russia, North Korea, Iran, and terrorist groups with global reach. In a break from previous Administrations, however, the NDS views retaining the U.S. strategic competitive edge relative to China and Russia as a higher priority than countering violent extremist organizations. Accordingly, the new orientation for U.S. strategy is sometimes referred to a " 2+3 " strategy, meaning a strategy for countering two primary challenges (China and Russia) and three additional challenges (North Korea, Iran, and terrorist groups). Budgetary Context In the four decades since the end of U.S. military involvement in Vietnam, annual outlays by the federal government have increased by a factor of nine. The fastest growing segment of federal spending during that period has been mandatory spending for entitlement programs such as Social Security, Medicare, and Medicaid. (See Figure 2 .) The Budget Control Act (BCA) of 2011 (P.L. 112-25) was intended to reduce spending by $2.1 trillion over the period FY2012-FY2021, compared to projected spending over that period. One element of the act established binding annual limits (or caps) to reduce discretionary federal spending through FY2021 by $1.0 trillion. Separate annual caps on discretionary appropriations for defense-related activities and nondefense activities are enforced by a mechanism called sequestration . Sequestration provides for the automatic cancellation of previous appropriations, to reduce discretionary spending to the BCA cap for the year in question. The caps on defense-related spending apply to discretionary funding for DOD and for defense-related activities of other agencies, comprising the national defense budget function which is designated budget function 050 . Compliance with the BCA defense caps would have required DOD to reduce its planned spending by tens of billions of dollars per year through FY2021. Congress repeatedly has raised the annual spending caps to reduce their impact on projected spending. Nevertheless, the defense cap in effect when the Trump Administration submitted its FY2020 budget request was $576 billionâ$97.9 billion less than the Administration requested for base budget spending. To avoid breaking that cap, the Administration designated as OCO funding a total of $97.9 billion to fund base budget activities. In marking up their respective versions of the FY2020 NDAA, the Armed Services Committees of the House and Senate each treated those funds as part of the base budget. The issue became moot after the defense spending cap was raised by the Bipartisan Budget Act of 2019 (P.L. 116-37), enacted on August 2, 2019. Long-term Trends The total FY2020 DOD requestâincluding both base budget and OCO fundingâcontinued an upswing that began with the FY2016 budget, which marked the end of a relatively steady decline in real (that is, inflation-adjusted) DOD purchasing power. Measured in constant dollars, DOD funding peaked in FY2010, after which the drawdown of U.S. troops in OCO operations drove a reduction in DOD spending. ( Figure 3 .) Selected Authorization Issues Military Personnel Issues The enacted version of the FY2020 NDAA â like the House and Senate versions of the bill -- approves the Administration's proposal for a relatively modest net increase in the number of active-duty military personnel. It also authorizes the Administration's proposed reduction in the end-strength of the Selected Reserveâthose members of the military reserve components and the National Guard who are organized into operational units that routinely drill, usually on a monthly basis. ( Ta b le 3 .) Basic Pay Increase5 Section 609 of the enacted FY2020 NDAA authorizes a 3.1% increase in military basic pay, as was requested by the Administration. It is the same increase that would have occurred if neither Congress nor the President had taken any action on the subject. By law, military personnel receive an annual increase in basic pay that is indexed to the annual increase in the Labor Department's Employment Cost Index (ECI) unless either (1) Congress passes a law to provide otherwise; or (2) the President specifies an alternative pay adjustment. The initial Senate version of the NDAA was silent regarding the pay raise. The initial House version of the bill would have: Mandated a 3.1% raise (Section 606); and Authorized the same 3.1% raise, even if the President had specified a different increase (Section 607). This provision was not included in the final version of the bill. "Widows' Tax"7 Following the death of a servicemember, certain beneficiaries may be eligible for survivor benefits from both DOD (under the Survivors Benefit Program or SBP) and the Department of Veterans Affairs (under the Dependency and Indemnity Compensation or DIC). However, by law, surviving spouses who receive both annuities must have their SBP payments reduced by the amount of DIC they receive. Critics refer to this offset as aÂ widows' tax . Section 622 of the enacted version of the FY2020 NDAA phases out the DIC offset requirement over a period of three years. Section 630A of the initial House-passed version would have repealed the offset, outright. The initial Senate-passed version was silent on the issue. Ban on Transgender Military Personnel A DOD policy adopted on April 12, 2019, prohibits entry into military service of any person who identifies as transgender. The policy allows transgender individuals to apply for a waiver of that prohibition. The enacted version of the bill does not challenge the Administration's policy. However, Section 596 of the NDAA conference report requires DOD to report on the number of requested waivers to the transgender ban that have been denied. Section 596 of the House-passed version of the bill would have established a similar reporting requirement. Section 530B of the House-passed version of the bill, which was not included in the conference report, would have nullified the transgender ban, extending to gender identity the same legal protection against discrimination that current law provides for race and sex. The Senate version of the NDAA contained no provisions relevant to this issue. Military Medical Malpractice9 Section 731 of the NDAA conference report authorizes the Secretary of Defense to pay a claim for the death or personal injury of a servicemember resulting from medical malpractice by a DOD health care provider. This addresses a legal doctrine rooted in the Supreme Court's 1950 ruling, in the case of Feres v. United States , that the federal government is immunized from liability "for injuries to servicemen where the injuries arise out of or are in the course of activity incident to service." Many lower federal courts have concluded that this principle, known as the Feres doctrine, generally prohibits military servicemembers from asserting malpractice claims against the United States based on the negligent actions of health care providers employed by the military. Section 729 of the House version of the NDAA bill would have overturned the Feres doctrine by amending the Federal Tort Claims Act to allow servicemembers to pursue tort claims against the United States for medical malpractice committed by health care provider in a Military Treatment Facility (MTF). The Senate bill had no provision covering this subject. Strategic Nuclear-armed Systems In general, the conference report on the FY2020 NDAA supported the Trump Administration's budget request for nuclear and other long-range strike weapons. This program continues an across the board modernization of the nuclear triad: ballistic missile-launching submarines, long-range bombers, and intercontinental ballistic missiles (ICBMs). However, the Trump program also included proposals to diversify the arsenal of nuclear weapons that the triad might deliver. The conference report did not include provisions of the House version of the bill that would have limited some of those efforts. "Low-Yield" Nuclear Warhead The NDAA conference report authorizes $29.6 million requested to deploy on some Trident II submarine-launched missiles nuclear warheads with significantly less explosive power than those now in service. According to unclassified sources, each of the several W-76 warheads currently carried by a single Trident II currently has an explosive power (or yield) approximately equal to that of 100 thousand tons of TNT (100 kilotons). The intended yield of the new "low-yield" warhead is reported to be about 10 kilotons. The atomic weapons detonated at Hiroshima and Nagasaki were roughly 15 kilotons and 20 kilotons, respectively. As requested, the enacted NDAA authorizes $10 million in the Energy Department's national security budget to modify existing warheads and $19.6 million to install them in deployed missiles. The Trump Administration contends that a low-yield warhead would discourage potential adversaries from thinking that, if they used relatively small nuclear weapons in a regional conflict, the United States would shrink from retaliating (or threatening to respond) if the only nuclear weapons at its disposal were the considerably more destructive warheads currently in the U.S. arsenal. Critics of the proposal contend that deployment of new, low-yield weapons could increase the risk of nuclear war by making it easier for U.S. officials to consider their use in a limited conflict. The House bill would have denied all funds requested for the program and included a provision (Section 1646) that would have barred the use of any funds for this purpose. A floor amendment to strike this provision was rejected by the House on a near-party-line vote of 201-221. The provision was not included in the enacted bill. ICBMs and Warheads As enacted, the FY2020 NDAA authorizes more than 97% of the $682.4 million requested to develop a fleet of new ICBMs to replace the 400 Minuteman missiles currently deployed in silos located in Montana, North Dakota, and Wyoming. This total includes $552.4 million of the $570.4 million requested to continue development of the new missile, designated the Ground Based Strategic Defense (GBSD). It also includes, in the Energy Department's national security budget, $112.0 million â the entire amount requested -- to develop a new warhead (designated W87-1) to equip the new missile, in lieu of the W78 warhead carried by the Minuteman. Section 1672 of the enacted bill prohibits any reduction in the number of deployed U.S. ICBMs, currently 400 missiles. The Senate version of the bill would have authorized $22 million more than was requested for GBSD. Section 1664 of the Senate bill would have prohibited any reduction in the number of ICBMs The House bill would have imposed a reduction of $140.0 million on the $682.4 million request for R&D related to a new ICBMâa cut of about 20%. This included a net reduction of $81.0 million for GBSD and a reduction of $59.0 million for the warhead. The House rejected by a vote of 164-264 an amendment to the House version of the bill that would have delayed the GBSD program and required an independent study of options to extend the service life of the currently deployed Minuteman missiles. Nuclear Warhead "Pits"14 The NDAA conference report authorizes $712.4 million as requested to continue expanding the Energy Department's capacity for manufacturing so-called plutonium pits â the nuclear triggers that initiate the explosion of a thermonuclear bomb or missile warhead. This includes $241.1 million to begin construction of a new pit production facility at the Energy Department's Savannah River Site, near Aiken, GA. The new facility would put the Energy Department on track to meet a goal of being able to produce 80 pits per year by 2030, a goal set the by Trump Administration in 2018. The House bill would have denied authorization of the $241.1 million requested for the Savanah River facility. Section 3114 of the House bill would have repealed a provision of law that codifies the 80 pit per year goal. Long-range, Precision Strike Weapons In general, the NDAA conference report support's the Administration requests to expand the U.S. arsenal of guided missiles that could accurately strike targets at ranges of 100 miles and more with conventional (that is, nonnuclear) warheads. ( Table 5 .) As U.S. strategy has focused more sharply on Russia and China as potential adversaries, DOD has placed increasing emphasis on developing such weapons, partly because those two countries are developing defenses intended to keep U.S. forces at a distance. Space Programs and Organization The enacted version of the FY2020 NDAA authorizes the bulk of the Administration's $14.1 billion request for National Security Space operations, which includes funds for DOD's satellite acquisition, space launches, and other space-oriented activities. The requested amount is 17% higher than the amount appropriated for these activities in FY2019âa rate of increase more than triple the Administration's proposed 4.9% increase in the overall DOD budget. The final bill authorizes most of the funds requested for DOD's most expensive acquisition programs for space systems, as the House and Senate versions would have done. (See Table 6 .) Space Force As proposed by the Administration, the FY2020 NDAA establishes the U.S. Space Force as a separate armed service within the Department of the Air Force (a status analogous to that of the Marine Corps as a separate service within the Department of the Navy). The bill authorizes $72.4 million, as requested, to fund operation of the new organization. The new organization is to be headed by a four-star general (designated Chief of Space Operations) who is to report directly to the Secretary of the Air Force. After one year, that officer is to become a member of the Joint Chiefs of Staff (JCS), in which capacity he or she may provide advice to the President, without going through the Air Force chain of command, after first informing the Secretary of Defense and the Chairman of the Joint Chiefs of Staff. Similarly, as a member of the JCS, the Chief of Space Operations may make recommendations to Congress, after informing the Secretary of Defense. The enacted NDAA authorizes the Secretary of the Air Force to transfer into the new organization all military personnel currently assigned to the Air Force Space Command and other Air Force military personnel. The Administration had proposed transferring into the Space Force personnel currently assigned to all of DOD's space-oriented organizations. The earlier House and Senate versions of the FY2020 NDAA each would have approved some elements of the proposed consolidation, though neither bill would have afforded the new space organization the degree of bureaucratic independence that the Administration proposed. The Senate bill would have authorized the requested $72.4 million for a Space Force within the Air Force to be overseen by a less senior civilian political appointee (an assistant secretary rather than an undersecretary). The House bill would have authorized $15.0 million for the new organization, which would have been designated a Space Corps and which would have had no civilian political overseer. Ballistic Missile Defense The enacted FY2020 NDAA approves the broad thrusts â and most of the detailsâ of the Administration's FY2020 anti-missile defense budget request. The request reflected the results of the Administration's Missile Defense Review, published in January 2019. That study reaffirmed ongoing DOD efforts to (1) expand and improve a network of interceptor missiles that could protect U.S. territory against a relatively small number of intercontinental ballistic missiles (ICBMs) and (2) deploy systems to defense U.S. allies and U.S. forces stationed abroad against attack by missiles of shorter range. ( Table 7 .) Many of the enacted bill's differences with the budget request were linked to delays in the development of a more reliable warhead, designated the Redesigned Kill Vehicle (RKV), to be carried by the homeland defense system's interceptor missiles. On August 21, 2019, after the House and Senate each had passed their respective versions of the FY2020 NDAA, DOD cancelled the RKV project. New Interceptor Missile and Additional Radars The enacted bill authorizes a total of $602.7 million of the $843.8 million requested to develop an improved missile defense for U.S. territory that would include a new interceptor missile carrying the planned new warhead (RKV). The largest component of the net reduction from the request is a transfer of $140.0 million, associated with the RKV project, to develop improvements to the currently deployed homeland defense system. The bill also authorizes $173.4 million ($101.0 less than requested) for development work on a new radar to be located in Hawaii. The House bill would have authorized $150.0 million less than requested for development of the new interceptor. The Senate bill would have authorized the amount requested. Aegis vs. ICBM18 The enacted bill authorizes a total of $53.8 million, distributed over several funding lines, to test the Navy's Standard missile against an ICBM. The Standard, which is part of the Navy's Aegis anti-missile system, was designed to intercept missiles of shorter range than ICBMs. However, new versions of the Standard theoretically would be capable of ICBM intercepts. Section 1680 of the FY2018 NDAA ( P.L. 115-91 ) directed DOD to conduct a test of Aegis against an ICBM-range target. The House version of the bill would have eliminated the planned ICBM intercept test of Aegis, authorizing $12.1 million of the amount requested. Ground Combat Systems The Army presented its FY2020 budget request for weapons acquisition as "a bold shift" intended to place greater emphasis on shaping the force to deal with potential threats from Russia and China, as called for by the Administration's FY2018 National Defense Strategy. Compared with the five-year defense plan (FYDP) that had accompanied the Army's FY2019 budget request, the FY2020 FYDP would reduce previously planned spending for many systems currently in production to make funds available for accelerated development of successor weapons, better adapted to the newly emphasized "peer competitors." The enacted version of the FY2020 NDAA largely supported the Army's revised spending plans for ground combat vehicles, anti-aircraft defenses, and long-range precision strike weapons. The versions passed initially by the House and Senate would have done likewise. (See Table 8 .) Anti-Aircraft Defense The Army's modernization plan would reconstitute the service's short-range anti-aircraft defenses which had atrophied after the Soviet Union collapsed and DOD focused on counter-terrorism and related missions in the aftermath of 9/11. In this period, the Patriot missileâdesigned in the 1970s to intercept aircraftâwas adapted to intercept long-range ballistic missiles as the shortest-range component of a layered defense. Since the turn of the century, DOD has focused more attention on other types of aerial threats which (because of their relatively short range or for other reasons) would challenge or thwart existing U.S. anti-missile/anti-aircraft defenses. These threats include unguided, short-range rockets and mortar shells used by insurgents; swarms of relatively small, armed drone aircraft; and technologically sophisticated cruise missiles, such as are deployed by Russia and China. The conference report on the bill â like the House and Senate versions â generally support this renewed focus on anti-aircraft defense, which includes: M-SHORAD (Maneuver-Short Range Air Defense), a variant of the Stryker combat vehicle equipped with and array of guns and guided missiles to protect maneuvering combat units against aerial threats; and IFPC (Indirect Fire Protection Capability), an array of sensors, missile launchers and various types of missiles to protect fixed sites. Naval Forces The Navy's $23.8 billion shipbuilding budget request for FY2020 reflects a 2016 plan to increase the size of the fleet to 355 ships, a target some 15% higher than the force goal set by the previous Navy plan. The enacted version of the FY2020 NDAA â like the versions of the bill passed by the House and the Senate â generally supports the Navy program. The House-passed bill would have cut a total of $1.6 billion from the shipbuilding request, most of which the House Armed Services Committee justified as reflecting "excess cost growth." (See Table 9 .) Aircraft Carrier Funding As enacted, the NDAA authorized the $2.35 billion requested for construction of two nuclear-powered aircraft carriers. The funding will be split between two carriersâcosting roughly $12 billion apieceâfor which a contract was signed in January 2019. One of the ships is slated for delivery to the Navy in 2028 and the other in 2032. As a general rule, Congress requires DOD to budget for the entire cost of any weapon in a single year, with limited exceptions. However, in the case of certain high-priced items, such as carriers, Congress allows DOD to use incremental funding âspreading the cost of a ship or other item across the budgets of several fiscal years. Unmanned Surface and Undersea Vessels23 The enacted FY2020 NDAA would rein in spending on the Navy's plan to speed development of several types of relatively large, unmanned surface ships and submarines that could supplement the current force by distributing its firepower and sensor network across a larger number of platforms. The FY2020 budget request includes a total of $628.8 million to develop these items, of which more than halfâ$372.5 millionâis to jump-start the acquisition of Large Unmanned Surface Vehicles (LUSVs), based on commercial ship designs and able to carry modular payloads including various types of anti-ship and land attack missiles. Reportedly, the Navy envisions LUSVs as being as long as 300 feet in length and displacing 2,000 tons, in which case they would be roughly half the size of the Perry -class missile frigates the Navy used in the 1980s and 1990s. The conference report on the FY2020 NDAA authorizes the full amounts requested to develop a smaller unmanned surface vessel (designated MUSV) and a relatively large robot submarine with a payload volume of up to 2,000 cubic feet. However, it authorizes $196.5 millionâslightly more than half the requestâfor the LUSV project, funding one of the two vessels requested. The joint explanatory statement accompanying the conference report on the bill did not discuss conferees' rationale for the cut. The Senate Armed Services Committee, in its report on the original, Senate-passed version of the bill had questioned the Navy's plan to develop and procure these ships on an accelerated schedule, given their technological and operational novelty. Military Aircraft Procurement The FY2020 budget request sought to fund the procurement of 385 aircraft across the military services; this is 71 aircraft more than the total included in the projected FY2020 budget request published in early 2018. Generally speaking, the enacted version of the bill, like the versions passed earlier by the House and Senate -- authorizes the Administration's requests, subject to relatively minor additions and reductions reflecting routine congressional oversight. One major departure from the request is an increase in the number of F-35 Joint Strike Fighters authorized. Other Issues Border Wall Construction To construct a barrier along the U.S.-Mexican border, which Congress has not explicitly authorized as military construction, the Trump Administration used various budget transfer and reprogramming authorities to make available a total of $6.1 billion comprising DOD program savings and unobligated funds from prior fiscal years. In addition, its FY2020 budget request sought $7.2 billion in barrier-related military construction funding, of which $3.6 billion would replenish prior year funds that were transferred to barrier construction and $3.6 billion that would fund new barrier construction in FY2020. The enacted version of the FY2020 NDAA reduces from $8.0 billion (in FY2019) to $5.5 billion the total amount of DOD funding that could be transferred. It authorizes none of the $7.2 billion request in connection with the border barrier project. The Senate bill would have reduced transfer authority by a smaller amount, the House bill by a larger amount. In addition, Sections 1046 and 2801 of the House bill would have prohibited the use of defense funds appropriated between FY2015 and FY2020 for barrier construction. ( Table 11 .) PFAS Contaminants PFAS (per- and polyfluoroalkyl substances) are a large, diverse group of fluorinated compounds that have been used for several decades in numerous commercial, industrial, and U.S. military applications including use as an ingredient in aqueous film forming foam (AFFF) for extinguishing petroleum-based liquid fuel fires. Releases of certain PFAS have been detected in drinking water sources, other environmental media, and dairy milk at various locations, some of which have been associated with the use of AFFF at U.S. military installations. The House and Senate versions of the FY2020 NDAA each contained multiple provisions related to PFAS that would require DOD, the U.S. Environmental Protection Agency, and other agencies to address potential risks of these chemicals under existing laws or new authorities. The conference agreement includes PFAS provisions related to drinking water and agricultural water sources, reporting of releases on the Toxics Release Inventory, data calls and significant new use notices under the Toxic Substances Control Act, environmental remediation at active and decommissioned U.S. military installations and National Guard facilities, DOD use and disposal of AFFF, and other purposes. The conference agreement does not include provisions regarding PFAS standards under the Clean Water Act or Safe Drinking Water Act, or liability for PFAS releases under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA often referred to as "Superfund"). Paid Parental Leave for Federal Employees Sections 1121-1126 of the initial House-passed bill would have provided 12 weeks of paid leave to federal government employees covered by Title V, Chapter 63 of the U.S. Code for reasons covered by the Family and Medical Leave Act of 1993 (FMLA), as amended ( P.L. 103-3 ). That legislation provides entitlement for such leave in the event of the employee's own serious health condition and certain family-related situations including the birth, adoption, or fostering of a child; the serious illness of certain family members; and military family needs. The bill would have permitted the Office of Personnel Management to increase the amount of such paid leave to a total of 16 weeks. The same paid leave entitlement would have been provided to Legislative Branch employees covered by the Congressional Accountability Act (CAA) of 1995. Conforming amendments would have been included to extend benefits to Government Accountability Office (GAO) employees and certain TSA employees. The initial Senate-passed bill included no provision related to this subject. Sections 7601-7606 of the enacted version of the bill entitle federal employees (as described above) to 12 weeks of paid parental leave in connection with the birth, adoption, or fostering of a child. Federal civil service employees must meet the FMLA 12-months-of-service requirements before becoming eligible for the paid parental leave benefit; by contrast the FMLA eligibility requirements for Legislative Branch employees covered by the CAA and for GAO employees do not apply to the paid parental leave benefit. In addition, use of the paid parental leave benefit by federal civil service employees is conditioned upon an agreement from the employee that he or she will return to work for the employing agency for 12 workweeks following the conclusion of that leave. Should an employee fail to do so and if certain conditions enumerated in the bill do not apply, the employing agency may recoup its contributions to the employee's health care premiums made during the period of leave. No such requirement is provided for Legislative Branch employees covered by the CAA nor for GAO employees. Appendix. Following, in numerical order, are CRS products cited in this report, including those cited in tables by only their reference number: CRS Reports CRS Report RS20643, Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress , by Ronald O'Rourke CRS Report RL30563, F-35 Joint Strike Fighter (JSF) Program , by Jeremiah Gertler CRS Report RL32109, Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress , by Ronald O'Rourke CRS Report RL32418, Navy Virginia (SSN-774) Class Attack Submarine Procurement: Background and Issues for Congress , by Ronald O'Rourke CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress , by Ronald O'Rourke CRS Report RL33640, U.S. Strategic Nuclear Forces: Background, Developments, and Issues , by Amy F. Woolf CRS Report RL33745, Navy Aegis Ballistic Missile Defense (BMD) Program: Background and Issues for Congress , by Ronald O'Rourke CRS Report R41129, Navy Columbia (SSBN-826) Class Ballistic Missile Submarine Program: Background and Issues for Congress , by Ronald O'Rourke CRS Report R41909, Multiyear Procurement (MYP) and Block Buy Contracting in Defense Acquisition: Background and Issues for Congress , by Ronald O'Rourke CRS Report R42972, Sequestration as a Budget Enforcement Process: Frequently Asked Questions , by Megan S. Lynch CRS Report R43049, U.S. Air Force Bomber Sustainment and Modernization: Background and Issues for Congress , by Jeremiah Gertler CRS Report R43240, The Army's Armored Multi-Purpose Vehicle (AMPV): Background and Issues for Congress , by Andrew Feickert CRS Report R43543, Navy LPD-17 Flight II and LHA Amphibious Ship Programs: Background and Issues for Congress , by Ronald O'Rourke CRS Report R43546, Navy John Lewis (TAO-205) Class Oiler Shipbuilding Program: Background and Issues for Congress , by Ronald O'Rourke CRS Report R43838, Renewed Great Power Competition: Implications for DefenseâIssues for Congress , by Ronald O'Rourke CRS Report R44039, The Defense Budget and the Budget Control Act: Frequently Asked Questions , by Brendan W. McGarry CRS Report R44274, The Family and Medical Leave Act: An Overview of Title I , by Sarah A. Donovan CRS Report R44442, Energy and Water Development Appropriations: Nuclear Weapons Activities , by Amy F. Woolf CRS Report R44463, Air Force B-21 Raider Long-Range Strike Bomber , by Jeremiah Gertler CRS Report R44835, Paid Family Leave in the United States , by Sarah A. Donovan CRS Report R44891, U.S. Role in the World: Background and Issues for Congress , by Ronald O'Rourke and Michael Moodie CRS Report R44968, Infantry Brigade Combat Team (IBCT) Mobility, Reconnaissance, and Firepower Programs , by Andrew Feickert CRS Report R44972, Navy Frigate (FFG[X]) Program: Background and Issues for Congress , by Ronald O'Rourke CRS Report R45349, The 2018 National Defense Strategy: Fact Sheet , by Kathleen J. McInnis CRS Report R45519, The Army's Optionally Manned Fighting Vehicle (OMFV) Program: Background and Issues for Congress , by Andrew Feickert CRS Report R45757, Navy Large Unmanned Surface and Undersea Vehicles: Background and Issues for Congress , by Ronald O'Rourke CRS Report R45793, PFAS and Drinking Water: Selected EPA and Congressional Actions , by Elena H. Humphreys and Mary Tiemann CRS Report R45937, Military Funding for Southwest Border Barriers , by Christopher T. Mann CRS Report R45986, Federal Role in Responding to Potential Risks of Per- and Polyfluoroalkyl Substances (PFAS) , coordinated by David M. Bearden CRS Report R45996, Precision-Guided Munitions: Background and Issues for Congress , by John R. Hoehn CRS Report R45998, Contaminants of Emerging Concern under the Clean Water Act , by Laura Gatz CRS Report R46107, FY2020 National Defense Authorization Act: Selected Military Personnel Issues , coordinated by Bryce H. P. Mendez CRS In Focus CRS In Focus IF10541, Defense Primer: Ballistic Missile Defense , by Stephen M. McCall CRS In Focus IF10999, Defense's 30-Year Aircraft Plan Reveals New Details , by Jeremiah Gertler CRS In Focus IF11102, Military Medical Malpractice and the Feres Doctrine , by Bryce H. P. Mendez and Kevin M. Lewis CRS In Focus IF11143, A Low-Yield, Submarine-Launched Nuclear Warhead: Overview of the Expert Debate , by Amy F. Woolf CRS In Focus IF11203, Proposed Civilian Personnel System Supporting "Space Force , " by Alan Ott CRS In Focus IF11219, Regulating Drinking Water Contaminants: EPA PFAS Actions , by Mary Tiemann and Elena H. Humphreys CRS In Focus IF11244, FY2020 National Security Space Budget Request: An Overview , by Stephen M. McCall and Brendan W. McGarry CRS In Focus IF11326, Military Space Reform: FY2020 NDAA Legislative Proposals , by Stephen M. McCall CRS In Focus IF11353, Defense Primer: U.S. Precision-Guided Munitions , by John R. Hoehn CRS In Focus IF11367, Army Future Vertical Lift (FVL) Program , by Jeremiah Gertler Congressional Insight CRS Insight IN10931, U.S. Army's Initial Maneuver, Short-Range Air Defense (IM-SHORAD) System , by Andrew Feickert CRS Insight IN11052, The Defense Department and 10 U.S.C. 284: Legislative Origins and Funding Questions , by Liana W. Rosen Legal Side Bar CRS Legal Sidebar LSB10242, Can the Department of Defense Build the Border Wall? , by Jennifer K. Elsea, Edward C. Liu, and Jay B. Sykes CRS Legal Sidebar LSB10305, The Feres Doctrine: Congress, the Courts, and Military Servicemember Lawsuits Against the United States , by Kevin M. Lewis CRS Legal Sidebar LSB10316, Eliminating the SBP-DIC Offset for Surviving Spouses of Military Servicemembers: Current Proposals and Related Issues , by Mainon A. Schwartz Summary:	null	96	42,048	42,050	42,050	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction This report provides an overview of the FY2020 National Defense Authorization Act ( H.R. 2500 , S. 1790 , P.L. 116-92 ) and serves as a portal to other CRS products providing additional context, detail, and analysis concerning particular aspects of that legislation. Enacted annually to cover every defense budget since FY1962, the NDAA authorizes funding for the Department of Defense (DOD) activities at the same level of detail at which budget authority is provided by the corresponding defense, military construction, and other appropriations bills. While the NDAA does not provide budget authority, historically it has provided a fairly reliable indicator of congressional sentiment on funding for particular programs. The bill also incorporates provisions of law governing military compensation, the DOD acquisition process, and aspects of DOD policy toward other countries, among other subjects. Of the $761.8 billion requested by the Trump Administration for National Defense-related activities in FY2020, $750.0 billion is discretionary spending, of which approximately $741.9 billion falls within the scope of the annual NDAA. This includes $718.4 billion for DOD operations and $23.2 billion for defense-related work by the Energy Department involving nuclear energy, mostly related to nuclear weapons and nuclear power plants for warships. Other funding for defense-related activities, such as counter-intelligence work of the Federal Bureau of Investigation (FBI), falls mostly under the jurisdiction of other congressional committees. (See Figure 1 .) The following overview reviews the strategic and budgetary context within which Congress debated the FY2020 NDAA. Subsequent sections of the report summarize the bill's treatment of major components of the Trump Administration's FY2020 budget request as well as provisions attached to the final bill that deal with other issues. FY2020 NDAA Overview As enacted, the FY2020 NDAA authorizes a total of $729.9 billion for national defense-related activities, which is $12.0 billion (1.6%) less than the Administration requested. The request included $568.1 billion to be designated as base budget funds to cover the routine, recurring costs to man, train, and operate U.S. forces. The request also included an additional $173.8 billion to be designated as Overseas Contingency Operations (OCO) funds to cover costs associated with the aftermath of the terrorist attacks of September 11, 2001, and other activities. OCO-designated funds are exempt from the binding caps on defense spending set by the Budget Control Act of 2011 ( P.L. 112-25 ) and the Administration's request included $97.7 billion to be designated as OCO funding but intended to pay base budget expenses. ( Table 1 .) The Senate Armed Services Committee reported its version of the FY2020 NDAA ( S. 1790 , S.Rept. 116-48 ) on June 11, 2019 and the Senate passed the bill on June 27, 2019. The House Armed Services Committee (HASC) reported its version ( H.R. 2500 , H.Rept. 116-120 ) on June 19, 2019 and the House passed the bill on July 12, 2019. On September 17, 2019, the House took up the Senate-passed S. 1790 , amended it by eliminating the Senate-passed provisions and replacing them with the provisions of the House-passed H.R. 2500 , and then passed the amended bill by voice vote. House and Senate conferees worked to produce a conference version of S. 1790 . The conference report ( H.Rept. 116-333 ) was agreed to by the House on December 11, 2019 by a vote of 377-48 and agreed to by the Senate on December 17, 2019 by a vote of 86-8. ( Table 2 .) Strategic Context According to the Administration, the FY2020 budget request for DOD reflects a shift in strategic emphasis based on the 2018 National Defense Strategy (NDS), which called for "increased and sustained investment" to counter evolving threats from China and Russia. This would mark a change from the focus of U.S. national security policy for nearly the past three decades and a renewed emphasis on competition between nuclear-armed superpowers, which had been the cornerstone of U.S. strategy for more than four decades after the end of World War II. During the Cold War, U.S. national security policy and the design of the U.S. military establishment were strategically focused on competing with the Union of Soviet Socialist Republics and containing the global spread of communism. In the years following the collapse of the Soviet Union, U.S. policies were designedâand U.S. forces were trained and equippedâlargely with a focus on dealing with potential regional aggressors such as Iraq, Iran, and North Korea and on recalibrating relations with China and Russia. After the terrorist attacks of September 11, 2001, U.S. national security policy and DOD planning focused largely on countering terrorism and insurgencies in the Middle East while containing, if not reversing, North Korean and Iranian nuclear weapons programs. However, as a legacy of the Cold War, U.S. and allied military forces had overwhelming military superiority over these adversaries and, accordingly, operations were conducted in relatively permissive environments. The 2014 Russian invasion of the Crimean peninsula and subsequent proxy war in eastern Ukraine fostered a renewed concern in the United States and Europe about an aggressive and revanchist regime in Moscow. Meanwhile, China began building and militarizing islands in the South China Sea in order to lay claim to key shipping lanes. Together, these events highlighted anew the salience in the U.S. national security agenda of dealing with other great powers , that is, states able and willing to use military force unilaterally to accomplish their objectives. At the same time, the challenges that had surfaced at the end of the Cold Warâfragile states, genocide, terrorism, and nuclear proliferation, to name a fewâremained serious threats to U.S. interests. In some cases, adversaries appear to be collaborating to achieve shared or compatible objectives and to take advantage of social and economic tools to advance their agendas. Some states are also collaborating with non-state proxies (including, but not limited to, militias, criminal networks, corporations, and hackers) and deliberately blurring the lines between conventional and irregular conflict and between civilian and military activities. In this complex security environment, it is arguably more difficult than in past eras to manage these myriad problems. The Trump Administration's December 2017 National Security Strategy (NSS), the 11-page unclassified summary of the January 2018 National Defense Strategy (NDS), and the 2019 National Intelligence Strategy explicitly reorient U.S. national security strategy (including defense strategy) toward a primary focus on great power competition with China and Russia and on countering their military capabilities. In addition to explicitly making the great power competition the primary U.S. national security concern, the NDS also argues for a focus on bolstering the competitive advantage of U.S. forces, which, the document contends, has eroded in recent decades vis-Ã -vis the Chinese and Russian threats. The NDS also maintains that, contrary to what was the case for most of the years since the end of the Cold War, U.S. forces now must assume that their ability to approach military objectives will be vigorously contested. The Trump Administration's strategic orientation as laid out in the NSS and NDA is consistent with the strategy outlined in comparable documents issued by prior Administrations, in identifying five significant external threats to U.S. interests: China, Russia, North Korea, Iran, and terrorist groups with global reach. In a break from previous Administrations, however, the NDS views retaining the U.S. strategic competitive edge relative to China and Russia as a higher priority than countering violent extremist organizations. Accordingly, the new orientation for U.S. strategy is sometimes referred to a " 2+3 " strategy, meaning a strategy for countering two primary challenges (China and Russia) and three additional challenges (North Korea, Iran, and terrorist groups). Budgetary Context In the four decades since the end of U.S. military involvement in Vietnam, annual outlays by the federal government have increased by a factor of nine. The fastest growing segment of federal spending during that period has been mandatory spending for entitlement programs such as Social Security, Medicare, and Medicaid. (See Figure 2 .) The Budget Control Act (BCA) of 2011 (P.L. 112-25) was intended to reduce spending by $2.1 trillion over the period FY2012-FY2021, compared to projected spending over that period. One element of the act established binding annual limits (or caps) to reduce discretionary federal spending through FY2021 by $1.0 trillion. Separate annual caps on discretionary appropriations for defense-related activities and nondefense activities are enforced by a mechanism called sequestration . Sequestration provides for the automatic cancellation of previous appropriations, to reduce discretionary spending to the BCA cap for the year in question. The caps on defense-related spending apply to discretionary funding for DOD and for defense-related activities of other agencies, comprising the national defense budget function which is designated budget function 050 . Compliance with the BCA defense caps would have required DOD to reduce its planned spending by tens of billions of dollars per year through FY2021. Congress repeatedly has raised the annual spending caps to reduce their impact on projected spending. Nevertheless, the defense cap in effect when the Trump Administration submitted its FY2020 budget request was $576 billionâ$97.9 billion less than the Administration requested for base budget spending. To avoid breaking that cap, the Administration designated as OCO funding a total of $97.9 billion to fund base budget activities. In marking up their respective versions of the FY2020 NDAA, the Armed Services Committees of the House and Senate each treated those funds as part of the base budget. The issue became moot after the defense spending cap was raised by the Bipartisan Budget Act of 2019 (P.L. 116-37), enacted on August 2, 2019. Long-term Trends The total FY2020 DOD requestâincluding both base budget and OCO fundingâcontinued an upswing that began with the FY2016 budget, which marked the end of a relatively steady decline in real (that is, inflation-adjusted) DOD purchasing power. Measured in constant dollars, DOD funding peaked in FY2010, after which the drawdown of U.S. troops in OCO operations drove a reduction in DOD spending. ( Figure 3 .) Selected Authorization Issues Military Personnel Issues The enacted version of the FY2020 NDAA â like the House and Senate versions of the bill -- approves the Administration's proposal for a relatively modest net increase in the number of active-duty military personnel. It also authorizes the Administration's proposed reduction in the end-strength of the Selected Reserveâthose members of the military reserve components and the National Guard who are organized into operational units that routinely drill, usually on a monthly basis. ( Ta b le 3 .) Basic Pay Increase5 Section 609 of the enacted FY2020 NDAA authorizes a 3.1% increase in military basic pay, as was requested by the Administration. It is the same increase that would have occurred if neither Congress nor the President had taken any action on the subject. By law, military personnel receive an annual increase in basic pay that is indexed to the annual increase in the Labor Department's Employment Cost Index (ECI) unless either (1) Congress passes a law to provide otherwise; or (2) the President specifies an alternative pay adjustment. The initial Senate version of the NDAA was silent regarding the pay raise. The initial House version of the bill would have: Mandated a 3.1% raise (Section 606); and Authorized the same 3.1% raise, even if the President had specified a different increase (Section 607). This provision was not included in the final version of the bill. "Widows' Tax"7 Following the death of a servicemember, certain beneficiaries may be eligible for survivor benefits from both DOD (under the Survivors Benefit Program or SBP) and the Department of Veterans Affairs (under the Dependency and Indemnity Compensation or DIC). However, by law, surviving spouses who receive both annuities must have their SBP payments reduced by the amount of DIC they receive. Critics refer to this offset as aÂ widows' tax . Section 622 of the enacted version of the FY2020 NDAA phases out the DIC offset requirement over a period of three years. Section 630A of the initial House-passed version would have repealed the offset, outright. The initial Senate-passed version was silent on the issue. Ban on Transgender Military Personnel A DOD policy adopted on April 12, 2019, prohibits entry into military service of any person who identifies as transgender. The policy allows transgender individuals to apply for a waiver of that prohibition. The enacted version of the bill does not challenge the Administration's policy. However, Section 596 of the NDAA conference report requires DOD to report on the number of requested waivers to the transgender ban that have been denied. Section 596 of the House-passed version of the bill would have established a similar reporting requirement. Section 530B of the House-passed version of the bill, which was not included in the conference report, would have nullified the transgender ban, extending to gender identity the same legal protection against discrimination that current law provides for race and sex. The Senate version of the NDAA contained no provisions relevant to this issue. Military Medical Malpractice9 Section 731 of the NDAA conference report authorizes the Secretary of Defense to pay a claim for the death or personal injury of a servicemember resulting from medical malpractice by a DOD health care provider. This addresses a legal doctrine rooted in the Supreme Court's 1950 ruling, in the case of Feres v. United States , that the federal government is immunized from liability "for injuries to servicemen where the injuries arise out of or are in the course of activity incident to service." Many lower federal courts have concluded that this principle, known as the Feres doctrine, generally prohibits military servicemembers from asserting malpractice claims against the United States based on the negligent actions of health care providers employed by the military. Section 729 of the House version of the NDAA bill would have overturned the Feres doctrine by amending the Federal Tort Claims Act to allow servicemembers to pursue tort claims against the United States for medical malpractice committed by health care provider in a Military Treatment Facility (MTF). The Senate bill had no provision covering this subject. Strategic Nuclear-armed Systems In general, the conference report on the FY2020 NDAA supported the Trump Administration's budget request for nuclear and other long-range strike weapons. This program continues an across the board modernization of the nuclear triad: ballistic missile-launching submarines, long-range bombers, and intercontinental ballistic missiles (ICBMs). However, the Trump program also included proposals to diversify the arsenal of nuclear weapons that the triad might deliver. The conference report did not include provisions of the House version of the bill that would have limited some of those efforts. "Low-Yield" Nuclear Warhead The NDAA conference report authorizes $29.6 million requested to deploy on some Trident II submarine-launched missiles nuclear warheads with significantly less explosive power than those now in service. According to unclassified sources, each of the several W-76 warheads currently carried by a single Trident II currently has an explosive power (or yield) approximately equal to that of 100 thousand tons of TNT (100 kilotons). The intended yield of the new "low-yield" warhead is reported to be about 10 kilotons. The atomic weapons detonated at Hiroshima and Nagasaki were roughly 15 kilotons and 20 kilotons, respectively. As requested, the enacted NDAA authorizes $10 million in the Energy Department's national security budget to modify existing warheads and $19.6 million to install them in deployed missiles. The Trump Administration contends that a low-yield warhead would discourage potential adversaries from thinking that, if they used relatively small nuclear weapons in a regional conflict, the United States would shrink from retaliating (or threatening to respond) if the only nuclear weapons at its disposal were the considerably more destructive warheads currently in the U.S. arsenal. Critics of the proposal contend that deployment of new, low-yield weapons could increase the risk of nuclear war by making it easier for U.S. officials to consider their use in a limited conflict. The House bill would have denied all funds requested for the program and included a provision (Section 1646) that would have barred the use of any funds for this purpose. A floor amendment to strike this provision was rejected by the House on a near-party-line vote of 201-221. The provision was not included in the enacted bill. ICBMs and Warheads As enacted, the FY2020 NDAA authorizes more than 97% of the $682.4 million requested to develop a fleet of new ICBMs to replace the 400 Minuteman missiles currently deployed in silos located in Montana, North Dakota, and Wyoming. This total includes $552.4 million of the $570.4 million requested to continue development of the new missile, designated the Ground Based Strategic Defense (GBSD). It also includes, in the Energy Department's national security budget, $112.0 million â the entire amount requested -- to develop a new warhead (designated W87-1) to equip the new missile, in lieu of the W78 warhead carried by the Minuteman. Section 1672 of the enacted bill prohibits any reduction in the number of deployed U.S. ICBMs, currently 400 missiles. The Senate version of the bill would have authorized $22 million more than was requested for GBSD. Section 1664 of the Senate bill would have prohibited any reduction in the number of ICBMs The House bill would have imposed a reduction of $140.0 million on the $682.4 million request for R&D related to a new ICBMâa cut of about 20%. This included a net reduction of $81.0 million for GBSD and a reduction of $59.0 million for the warhead. The House rejected by a vote of 164-264 an amendment to the House version of the bill that would have delayed the GBSD program and required an independent study of options to extend the service life of the currently deployed Minuteman missiles. Nuclear Warhead "Pits"14 The NDAA conference report authorizes $712.4 million as requested to continue expanding the Energy Department's capacity for manufacturing so-called plutonium pits â the nuclear triggers that initiate the explosion of a thermonuclear bomb or missile warhead. This includes $241.1 million to begin construction of a new pit production facility at the Energy Department's Savannah River Site, near Aiken, GA. The new facility would put the Energy Department on track to meet a goal of being able to produce 80 pits per year by 2030, a goal set the by Trump Administration in 2018. The House bill would have denied authorization of the $241.1 million requested for the Savanah River facility. Section 3114 of the House bill would have repealed a provision of law that codifies the 80 pit per year goal. Long-range, Precision Strike Weapons In general, the NDAA conference report support's the Administration requests to expand the U.S. arsenal of guided missiles that could accurately strike targets at ranges of 100 miles and more with conventional (that is, nonnuclear) warheads. ( Table 5 .) As U.S. strategy has focused more sharply on Russia and China as potential adversaries, DOD has placed increasing emphasis on developing such weapons, partly because those two countries are developing defenses intended to keep U.S. forces at a distance. Space Programs and Organization The enacted version of the FY2020 NDAA authorizes the bulk of the Administration's $14.1 billion request for National Security Space operations, which includes funds for DOD's satellite acquisition, space launches, and other space-oriented activities. The requested amount is 17% higher than the amount appropriated for these activities in FY2019âa rate of increase more than triple the Administration's proposed 4.9% increase in the overall DOD budget. The final bill authorizes most of the funds requested for DOD's most expensive acquisition programs for space systems, as the House and Senate versions would have done. (See Table 6 .) Space Force As proposed by the Administration, the FY2020 NDAA establishes the U.S. Space Force as a separate armed service within the Department of the Air Force (a status analogous to that of the Marine Corps as a separate service within the Department of the Navy). The bill authorizes $72.4 million, as requested, to fund operation of the new organization. The new organization is to be headed by a four-star general (designated Chief of Space Operations) who is to report directly to the Secretary of the Air Force. After one year, that officer is to become a member of the Joint Chiefs of Staff (JCS), in which capacity he or she may provide advice to the President, without going through the Air Force chain of command, after first informing the Secretary of Defense and the Chairman of the Joint Chiefs of Staff. Similarly, as a member of the JCS, the Chief of Space Operations may make recommendations to Congress, after informing the Secretary of Defense. The enacted NDAA authorizes the Secretary of the Air Force to transfer into the new organization all military personnel currently assigned to the Air Force Space Command and other Air Force military personnel. The Administration had proposed transferring into the Space Force personnel currently assigned to all of DOD's space-oriented organizations. The earlier House and Senate versions of the FY2020 NDAA each would have approved some elements of the proposed consolidation, though neither bill would have afforded the new space organization the degree of bureaucratic independence that the Administration proposed. The Senate bill would have authorized the requested $72.4 million for a Space Force within the Air Force to be overseen by a less senior civilian political appointee (an assistant secretary rather than an undersecretary). The House bill would have authorized $15.0 million for the new organization, which would have been designated a Space Corps and which would have had no civilian political overseer. Ballistic Missile Defense The enacted FY2020 NDAA approves the broad thrusts â and most of the detailsâ of the Administration's FY2020 anti-missile defense budget request. The request reflected the results of the Administration's Missile Defense Review, published in January 2019. That study reaffirmed ongoing DOD efforts to (1) expand and improve a network of interceptor missiles that could protect U.S. territory against a relatively small number of intercontinental ballistic missiles (ICBMs) and (2) deploy systems to defense U.S. allies and U.S. forces stationed abroad against attack by missiles of shorter range. ( Table 7 .) Many of the enacted bill's differences with the budget request were linked to delays in the development of a more reliable warhead, designated the Redesigned Kill Vehicle (RKV), to be carried by the homeland defense system's interceptor missiles. On August 21, 2019, after the House and Senate each had passed their respective versions of the FY2020 NDAA, DOD cancelled the RKV project. New Interceptor Missile and Additional Radars The enacted bill authorizes a total of $602.7 million of the $843.8 million requested to develop an improved missile defense for U.S. territory that would include a new interceptor missile carrying the planned new warhead (RKV). The largest component of the net reduction from the request is a transfer of $140.0 million, associated with the RKV project, to develop improvements to the currently deployed homeland defense system. The bill also authorizes $173.4 million ($101.0 less than requested) for development work on a new radar to be located in Hawaii. The House bill would have authorized $150.0 million less than requested for development of the new interceptor. The Senate bill would have authorized the amount requested. Aegis vs. ICBM18 The enacted bill authorizes a total of $53.8 million, distributed over several funding lines, to test the Navy's Standard missile against an ICBM. The Standard, which is part of the Navy's Aegis anti-missile system, was designed to intercept missiles of shorter range than ICBMs. However, new versions of the Standard theoretically would be capable of ICBM intercepts. Section 1680 of the FY2018 NDAA ( P.L. 115-91 ) directed DOD to conduct a test of Aegis against an ICBM-range target. The House version of the bill would have eliminated the planned ICBM intercept test of Aegis, authorizing $12.1 million of the amount requested. Ground Combat Systems The Army presented its FY2020 budget request for weapons acquisition as "a bold shift" intended to place greater emphasis on shaping the force to deal with potential threats from Russia and China, as called for by the Administration's FY2018 National Defense Strategy. Compared with the five-year defense plan (FYDP) that had accompanied the Army's FY2019 budget request, the FY2020 FYDP would reduce previously planned spending for many systems currently in production to make funds available for accelerated development of successor weapons, better adapted to the newly emphasized "peer competitors." The enacted version of the FY2020 NDAA largely supported the Army's revised spending plans for ground combat vehicles, anti-aircraft defenses, and long-range precision strike weapons. The versions passed initially by the House and Senate would have done likewise. (See Table 8 .) Anti-Aircraft Defense The Army's modernization plan would reconstitute the service's short-range anti-aircraft defenses which had atrophied after the Soviet Union collapsed and DOD focused on counter-terrorism and related missions in the aftermath of 9/11. In this period, the Patriot missileâdesigned in the 1970s to intercept aircraftâwas adapted to intercept long-range ballistic missiles as the shortest-range component of a layered defense. Since the turn of the century, DOD has focused more attention on other types of aerial threats which (because of their relatively short range or for other reasons) would challenge or thwart existing U.S. anti-missile/anti-aircraft defenses. These threats include unguided, short-range rockets and mortar shells used by insurgents; swarms of relatively small, armed drone aircraft; and technologically sophisticated cruise missiles, such as are deployed by Russia and China. The conference report on the bill â like the House and Senate versions â generally support this renewed focus on anti-aircraft defense, which includes: M-SHORAD (Maneuver-Short Range Air Defense), a variant of the Stryker combat vehicle equipped with and array of guns and guided missiles to protect maneuvering combat units against aerial threats; and IFPC (Indirect Fire Protection Capability), an array of sensors, missile launchers and various types of missiles to protect fixed sites. Naval Forces The Navy's $23.8 billion shipbuilding budget request for FY2020 reflects a 2016 plan to increase the size of the fleet to 355 ships, a target some 15% higher than the force goal set by the previous Navy plan. The enacted version of the FY2020 NDAA â like the versions of the bill passed by the House and the Senate â generally supports the Navy program. The House-passed bill would have cut a total of $1.6 billion from the shipbuilding request, most of which the House Armed Services Committee justified as reflecting "excess cost growth." (See Table 9 .) Aircraft Carrier Funding As enacted, the NDAA authorized the $2.35 billion requested for construction of two nuclear-powered aircraft carriers. The funding will be split between two carriersâcosting roughly $12 billion apieceâfor which a contract was signed in January 2019. One of the ships is slated for delivery to the Navy in 2028 and the other in 2032. As a general rule, Congress requires DOD to budget for the entire cost of any weapon in a single year, with limited exceptions. However, in the case of certain high-priced items, such as carriers, Congress allows DOD to use incremental funding âspreading the cost of a ship or other item across the budgets of several fiscal years. Unmanned Surface and Undersea Vessels23 The enacted FY2020 NDAA would rein in spending on the Navy's plan to speed development of several types of relatively large, unmanned surface ships and submarines that could supplement the current force by distributing its firepower and sensor network across a larger number of platforms. The FY2020 budget request includes a total of $628.8 million to develop these items, of which more than halfâ$372.5 millionâis to jump-start the acquisition of Large Unmanned Surface Vehicles (LUSVs), based on commercial ship designs and able to carry modular payloads including various types of anti-ship and land attack missiles. Reportedly, the Navy envisions LUSVs as being as long as 300 feet in length and displacing 2,000 tons, in which case they would be roughly half the size of the Perry -class missile frigates the Navy used in the 1980s and 1990s. The conference report on the FY2020 NDAA authorizes the full amounts requested to develop a smaller unmanned surface vessel (designated MUSV) and a relatively large robot submarine with a payload volume of up to 2,000 cubic feet. However, it authorizes $196.5 millionâslightly more than half the requestâfor the LUSV project, funding one of the two vessels requested. The joint explanatory statement accompanying the conference report on the bill did not discuss conferees' rationale for the cut. The Senate Armed Services Committee, in its report on the original, Senate-passed version of the bill had questioned the Navy's plan to develop and procure these ships on an accelerated schedule, given their technological and operational novelty. Military Aircraft Procurement The FY2020 budget request sought to fund the procurement of 385 aircraft across the military services; this is 71 aircraft more than the total included in the projected FY2020 budget request published in early 2018. Generally speaking, the enacted version of the bill, like the versions passed earlier by the House and Senate -- authorizes the Administration's requests, subject to relatively minor additions and reductions reflecting routine congressional oversight. One major departure from the request is an increase in the number of F-35 Joint Strike Fighters authorized. Other Issues Border Wall Construction To construct a barrier along the U.S.-Mexican border, which Congress has not explicitly authorized as military construction, the Trump Administration used various budget transfer and reprogramming authorities to make available a total of $6.1 billion comprising DOD program savings and unobligated funds from prior fiscal years. In addition, its FY2020 budget request sought $7.2 billion in barrier-related military construction funding, of which $3.6 billion would replenish prior year funds that were transferred to barrier construction and $3.6 billion that would fund new barrier construction in FY2020. The enacted version of the FY2020 NDAA reduces from $8.0 billion (in FY2019) to $5.5 billion the total amount of DOD funding that could be transferred. It authorizes none of the $7.2 billion request in connection with the border barrier project. The Senate bill would have reduced transfer authority by a smaller amount, the House bill by a larger amount. In addition, Sections 1046 and 2801 of the House bill would have prohibited the use of defense funds appropriated between FY2015 and FY2020 for barrier construction. ( Table 11 .) PFAS Contaminants PFAS (per- and polyfluoroalkyl substances) are a large, diverse group of fluorinated compounds that have been used for several decades in numerous commercial, industrial, and U.S. military applications including use as an ingredient in aqueous film forming foam (AFFF) for extinguishing petroleum-based liquid fuel fires. Releases of certain PFAS have been detected in drinking water sources, other environmental media, and dairy milk at various locations, some of which have been associated with the use of AFFF at U.S. military installations. The House and Senate versions of the FY2020 NDAA each contained multiple provisions related to PFAS that would require DOD, the U.S. Environmental Protection Agency, and other agencies to address potential risks of these chemicals under existing laws or new authorities. The conference agreement includes PFAS provisions related to drinking water and agricultural water sources, reporting of releases on the Toxics Release Inventory, data calls and significant new use notices under the Toxic Substances Control Act, environmental remediation at active and decommissioned U.S. military installations and National Guard facilities, DOD use and disposal of AFFF, and other purposes. The conference agreement does not include provisions regarding PFAS standards under the Clean Water Act or Safe Drinking Water Act, or liability for PFAS releases under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA often referred to as "Superfund"). Paid Parental Leave for Federal Employees Sections 1121-1126 of the initial House-passed bill would have provided 12 weeks of paid leave to federal government employees covered by Title V, Chapter 63 of the U.S. Code for reasons covered by the Family and Medical Leave Act of 1993 (FMLA), as amended ( P.L. 103-3 ). That legislation provides entitlement for such leave in the event of the employee's own serious health condition and certain family-related situations including the birth, adoption, or fostering of a child; the serious illness of certain family members; and military family needs. The bill would have permitted the Office of Personnel Management to increase the amount of such paid leave to a total of 16 weeks. The same paid leave entitlement would have been provided to Legislative Branch employees covered by the Congressional Accountability Act (CAA) of 1995. Conforming amendments would have been included to extend benefits to Government Accountability Office (GAO) employees and certain TSA employees. The initial Senate-passed bill included no provision related to this subject. Sections 7601-7606 of the enacted version of the bill entitle federal employees (as described above) to 12 weeks of paid parental leave in connection with the birth, adoption, or fostering of a child. Federal civil service employees must meet the FMLA 12-months-of-service requirements before becoming eligible for the paid parental leave benefit; by contrast the FMLA eligibility requirements for Legislative Branch employees covered by the CAA and for GAO employees do not apply to the paid parental leave benefit. In addition, use of the paid parental leave benefit by federal civil service employees is conditioned upon an agreement from the employee that he or she will return to work for the employing agency for 12 workweeks following the conclusion of that leave. Should an employee fail to do so and if certain conditions enumerated in the bill do not apply, the employing agency may recoup its contributions to the employee's health care premiums made during the period of leave. No such requirement is provided for Legislative Branch employees covered by the CAA nor for GAO employees. Appendix. Following, in numerical order, are CRS products cited in this report, including those cited in tables by only their reference number: CRS Reports CRS Report RS20643, Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress , by Ronald O'Rourke CRS Report RL30563, F-35 Joint Strike Fighter (JSF) Program , by Jeremiah Gertler CRS Report RL32109, Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress , by Ronald O'Rourke CRS Report RL32418, Navy Virginia (SSN-774) Class Attack Submarine Procurement: Background and Issues for Congress , by Ronald O'Rourke CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress , by Ronald O'Rourke CRS Report RL33640, U.S. Strategic Nuclear Forces: Background, Developments, and Issues , by Amy F. Woolf CRS Report RL33745, Navy Aegis Ballistic Missile Defense (BMD) Program: Background and Issues for Congress , by Ronald O'Rourke CRS Report R41129, Navy Columbia (SSBN-826) Class Ballistic Missile Submarine Program: Background and Issues for Congress , by Ronald O'Rourke CRS Report R41909, Multiyear Procurement (MYP) and Block Buy Contracting in Defense Acquisition: Background and Issues for Congress , by Ronald O'Rourke CRS Report R42972, Sequestration as a Budget Enforcement Process: Frequently Asked Questions , by Megan S. Lynch CRS Report R43049, U.S. Air Force Bomber Sustainment and Modernization: Background and Issues for Congress , by Jeremiah Gertler CRS Report R43240, The Army's Armored Multi-Purpose Vehicle (AMPV): Background and Issues for Congress , by Andrew Feickert CRS Report R43543, Navy LPD-17 Flight II and LHA Amphibious Ship Programs: Background and Issues for Congress , by Ronald O'Rourke CRS Report R43546, Navy John Lewis (TAO-205) Class Oiler Shipbuilding Program: Background and Issues for Congress , by Ronald O'Rourke CRS Report R43838, Renewed Great Power Competition: Implications for DefenseâIssues for Congress , by Ronald O'Rourke CRS Report R44039, The Defense Budget and the Budget Control Act: Frequently Asked Questions , by Brendan W. McGarry CRS Report R44274, The Family and Medical Leave Act: An Overview of Title I , by Sarah A. Donovan CRS Report R44442, Energy and Water Development Appropriations: Nuclear Weapons Activities , by Amy F. Woolf CRS Report R44463, Air Force B-21 Raider Long-Range Strike Bomber , by Jeremiah Gertler CRS Report R44835, Paid Family Leave in the United States , by Sarah A. Donovan CRS Report R44891, U.S. Role in the World: Background and Issues for Congress , by Ronald O'Rourke and Michael Moodie CRS Report R44968, Infantry Brigade Combat Team (IBCT) Mobility, Reconnaissance, and Firepower Programs , by Andrew Feickert CRS Report R44972, Navy Frigate (FFG[X]) Program: Background and Issues for Congress , by Ronald O'Rourke CRS Report R45349, The 2018 National Defense Strategy: Fact Sheet , by Kathleen J. McInnis CRS Report R45519, The Army's Optionally Manned Fighting Vehicle (OMFV) Program: Background and Issues for Congress , by Andrew Feickert CRS Report R45757, Navy Large Unmanned Surface and Undersea Vehicles: Background and Issues for Congress , by Ronald O'Rourke CRS Report R45793, PFAS and Drinking Water: Selected EPA and Congressional Actions , by Elena H. Humphreys and Mary Tiemann CRS Report R45937, Military Funding for Southwest Border Barriers , by Christopher T. Mann CRS Report R45986, Federal Role in Responding to Potential Risks of Per- and Polyfluoroalkyl Substances (PFAS) , coordinated by David M. Bearden CRS Report R45996, Precision-Guided Munitions: Background and Issues for Congress , by John R. Hoehn CRS Report R45998, Contaminants of Emerging Concern under the Clean Water Act , by Laura Gatz CRS Report R46107, FY2020 National Defense Authorization Act: Selected Military Personnel Issues , coordinated by Bryce H. P. Mendez CRS In Focus CRS In Focus IF10541, Defense Primer: Ballistic Missile Defense , by Stephen M. McCall CRS In Focus IF10999, Defense's 30-Year Aircraft Plan Reveals New Details , by Jeremiah Gertler CRS In Focus IF11102, Military Medical Malpractice and the Feres Doctrine , by Bryce H. P. Mendez and Kevin M. Lewis CRS In Focus IF11143, A Low-Yield, Submarine-Launched Nuclear Warhead: Overview of the Expert Debate , by Amy F. Woolf CRS In Focus IF11203, Proposed Civilian Personnel System Supporting "Space Force , " by Alan Ott CRS In Focus IF11219, Regulating Drinking Water Contaminants: EPA PFAS Actions , by Mary Tiemann and Elena H. Humphreys CRS In Focus IF11244, FY2020 National Security Space Budget Request: An Overview , by Stephen M. McCall and Brendan W. McGarry CRS In Focus IF11326, Military Space Reform: FY2020 NDAA Legislative Proposals , by Stephen M. McCall CRS In Focus IF11353, Defense Primer: U.S. Precision-Guided Munitions , by John R. Hoehn CRS In Focus IF11367, Army Future Vertical Lift (FVL) Program , by Jeremiah Gertler Congressional Insight CRS Insight IN10931, U.S. Army's Initial Maneuver, Short-Range Air Defense (IM-SHORAD) System , by Andrew Feickert CRS Insight IN11052, The Defense Department and 10 U.S.C. 284: Legislative Origins and Funding Questions , by Liana W. Rosen Legal Side Bar CRS Legal Sidebar LSB10242, Can the Department of Defense Build the Border Wall? , by Jennifer K. Elsea, Edward C. Liu, and Jay B. Sykes CRS Legal Sidebar LSB10305, The Feres Doctrine: Congress, the Courts, and Military Servicemember Lawsuits Against the United States , by Kevin M. Lewis CRS Legal Sidebar LSB10316, Eliminating the SBP-DIC Offset for Surviving Spouses of Military Servicemembers: Current Proposals and Related Issues , by Mainon A. Schwartz	Summary:	gov_report	1,024	null	93
crs_R44972	crs_R44972_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction This report provides background information and discusses potential issues for Congress regarding the Navy's FFG(X) program, a program to procure a new class of 20 guided-missile frigates (FFGs). The Navy's proposed FY2020 budget requests $1,281.2 million for the procurement of the first FFG(X). The FFG(X) program presents several potential oversight issues for Congress. Congress's decisions on the program could affect Navy capabilities and funding requirements and the shipbuilding industrial base. This report focuses on the FFG(X) program. A related Navy shipbuilding program, the Littoral Combat Ship (LCS) program, is covered in detail in CRS Report RL33741, Navy Littoral Combat Ship (LCS) Program: Background and Issues for Congress , by Ronald O'Rourke. Other CRS reports discuss the strategic context within which the FFG(X) program and other Navy acquisition programs may be considered. Background Navy's Force of Small Surface Combatants (SSCs) In discussing its force-level goals and 30-year shipbuilding plans, the Navy organizes its surface combatants into large surface combatants (LSCs), meaning the Navy's cruisers and destroyers, and small surface combatants (SSCs), meaning the Navy's frigates, LCSs, mine warfare ships, and patrol craft. SSCs are smaller, less capable in some respects, and individually less expensive to procure, operate, and support than LSCs. SSCs can operate in conjunction with LSCs and other Navy ships, particularly in higher-threat operating environments, or independently, particularly in lower-threat operating environments. In December 2016, the Navy released a goal to achieve and maintain a Navy of 355 ships, including 52 SSCs, of which 32 are to be LCSs and 20 are to be FFG(X)s. Although patrol craft are SSCs, they do not count toward the 52-ship SSC force-level goal, because patrol craft are not considered battle force ships, which are the kind of ships that count toward the quoted size of the Navy and the Navy's force-level goal. At the end of FY2018, the Navy's force of SSCs totaled 27 battle force ships, including 0 frigates, 16 LCSs, and 11 mine warfare ships. Under the Navy's FY2020 30-year (FY2020-FY2049) shipbuilding plan, the SSC force is to grow to 52 ships (34 LCSs and 18 FFG[X]s) in FY2034, reach a peak of 62 ships (30 LCSs, 20 FFG[X]s, and 12 SSCs of a future design) in FY2040, and then decline to 50 ships (20 FFG[X]s and 30 SSCs of a future design) in FY2049. U.S. Navy Frigates in General In contrast to cruisers and destroyers, which are designed to operate in higher-threat areas, frigates are generally intended to operate more in lower-threat areas. U.S. Navy frigates perform many of the same peacetime and wartime missions as U.S. Navy cruisers and destroyers, but since frigates are intended to do so in lower-threat areas, they are equipped with fewer weapons, less-capable radars and other systems, and less engineering redundancy and survivability than cruisers and destroyers. The most recent class of frigates operated by the Navy was the Oliver Hazard Perry (FFG-7) class ( Figure 1 ). A total of 51 FFG-7 class ships were procured between FY1973 and FY1984. The ships entered service between 1977 and 1989, and were decommissioned between 1994 and 2015. In their final configuration, FFG-7s were about 455 feet long and had full load displacements of roughly 3,900 tons to 4,100 tons. (By comparison, the Navy's Arleigh Burke [DDG-51] class destroyers are about 510 feet long and have full load displacements of roughly 9,300 tons.) Following their decommissioning, a number of FFG-7 class ships, like certain other decommissioned U.S. Navy ships, have been transferred to the navies of U.S. allied and partner countries. FFG(X) Program Meaning of Designation FFG(X) In the program designation FFG(X), FF means frigate, G means guided-missile ship (indicating a ship equipped with an area-defense AAW system), and (X) indicates that the specific design of the ship has not yet been determined. FFG(X) thus means a guided-missile frigate whose specific design has not yet been determined. Procurement Quantity and Schedule Procurement Quantity The Navy wants to procure 20 FFG(X)s, which in combination with the Navy's planned total of 32 LCSs would meet the Navy's 52-ship SSC force-level goal. A total of 35 (rather than 32) LCSs have been procured through FY2019, but Navy officials have stated that the Navy nevertheless wants to procure 20 FFG(X)s. The Navy's 355-ship force-level goal is the result of a Force Structure Analysis (FSA) that the Navy conducted in 2016. The Navy conducts a new or updated FSA every few years, and it is currently conducting a new FSA that is scheduled to be completed by the end of 2019. Navy officials have stated that this new FSA will likely not reduce the required number of small surface combatants, and might increase it. Navy officials have also suggested that the Navy in coming years may shift to a new surface force architecture that will include, among other things, a larger proportion of small surface combatants. Figure 2 shows a Navy briefing slide depicting the potential new surface force architecture, with each sphere representing a manned ship or an unmanned surface vehicle (USV). Consistent with Figure 2 , the Navy's 355-ship goal, reflecting the current force architecture, calls for a Navy with twice as many large surface combatants as small surface combatants. Figure 2 suggests that the potential new surface force architecture could lead to the obverse—a planned force mix that calls for twice as many small surface combatants than large surface combatants—along with a new third tier of numerous USVs. Procurement Schedule The Navy wants to procure the first FFG(X) in FY2020, the next 18 at a rate of two per year in FY2021-FY2029, and the 20th in FY2030. Under the Navy's FY2020 budget submission, the first FFG(X) is scheduled to be delivered in July 2026, 72 months after the contract award date of July 2020. Ship Capabilities, Design, and Crewing Ship Capabilities and Design As mentioned above, the (X) in the program designation FFG(X) means that the design of the ship has not yet been determined. In general, the Navy envisages the FFG(X) as follows: The ship is to be a multimission small surface combatant capable of conducting anti-air warfare (AAW), anti-surface warfare (ASuW), antisubmarine warfare (ASW), and electromagnetic warfare (EMW) operations. Compared to an FF concept that emerged under a February 2014 restructuring of the LCS program, the FFG(X) is to have increased AAW and EMW capability, and enhanced survivability. The ship's area-defense AAW system is to be capable of local area AAW, meaning a form of area-defense AAW that extends to a lesser range than the area-defense AAW that can be provided by the Navy's cruisers and destroyers. The ship is to be capable of operating in both blue water (i.e., mid-ocean) and littoral (i.e., near-shore) areas. The ship is to be capable of operating either independently (when that is appropriate for its assigned mission) or as part of larger Navy formations. Given the above, the FFG(X) design will likely be larger in terms of displacement, more heavily armed, and more expensive to procure than either the LCS or an FF concept that emerged from the February 2014 LCS program restructuring. Figure 3 shows a January 2019 Navy briefing slide summarizing the FFG(X)'s planned capabilities. For additional information on the FFG(X)'s planned capabilities, see the Appendix A . Dual Crewing To help maximize the time that each ship spends at sea, the Navy reportedly is considering operating FFG(X)s with dual crews—an approach, commonly called blue-gold crewing, that the Navy uses for operating its ballistic missile submarines and LCSs. Procurement Cost The Navy wants the follow-on ships in the FFG(X) program (i.e., ships 2 through 20) to have an average unit procurement cost of $800 million to $950 million each in constant 2018 dollars. The Navy reportedly believes that the ship's cost can be held closer to the $800 million figure. By way of comparison, the Navy estimates the average unit procurement cost of the three LCSs procured in FY2019 at $523.7 million (not including the cost of each ship's embarked mission package), and the average unit procurement cost of the three DDG-51 class destroyers that the Navy has requested for procurement in FY2020 at $1,821.0 million. As shown in Table 2 , the Navy's proposed FY2020 budget requests $1,281.2 million for the procurement of the first FFG(X). The lead ship in the program will be considerably more expensive than the follow-on ships in the program, because the lead ship's procurement cost incorporates most or all of the detailed design/nonrecurring engineering (DD/NRE) costs for the class. (It is a traditional Navy budgeting practice to attach most or all of the DD/NRE costs for a new ship class to the procurement cost of the lead ship in the class.) As shown in Table 2 , the Navy's FY2020 budget submission shows that subsequent ships in the class are estimated by the Navy to cost roughly $900 million each in then-year dollars over the next few years. The Navy's FY2020 budget submission estimates the total procurement cost of 20 FFG(X)s at $20,470.1 million (i.e., about $20.5 billion) in then-year dollars, or an average of about $1,023.5 million each. Since the figure of $20,470.1 million is a then-year dollar figure, it incorporates estimated annual inflation for FFG(X)s to be procured out to FY2030. Acquisition Strategy Parent-Design Approach The Navy's desire to procure the first FFG(X) in FY2020 does not allow enough time to develop a completely new design (i.e., a clean-sheet design) for the FFG(X). (Using a clean-sheet design might defer the procurement of the first ship to about FY2024.) Consequently, the Navy intends to build the FFG(X) to a modified version of an existing ship design—an approach called the parent-design approach. The parent design could be a U.S. ship design or a foreign ship design. Using the parent-design approach can reduce design time, design cost, and cost, schedule, and technical risk in building the ship. The Coast Guard and the Navy are currently using the parent-design approach for the Coast Guard's polar security cutter (i.e., polar icebreaker) program. The parent-design approach has also been used in the past for other Navy and Coast Guard ships, including Navy mine warfare ships and the Coast Guard's new Fast Response Cutters (FRCs). No New Technologies or Systems As an additional measure for reducing cost, schedule, and technical risk in the FFG(X) program, the Navy envisages developing no new technologies or systems for the FFG(X)—the ship is to use systems and technologies that already exist or are already being developed for use in other programs. Number of Builders Given the currently envisaged procurement rate of two ships per year, the Navy's baseline plan for the FFG(X) program envisages using a single builder to build the ships. Consistent with U.S. law, the ship is to be built in a U.S. shipyard, even if it is based on a foreign design. Using a foreign design might thus involve cooperation or a teaming arrangement between a U.S. builder and a foreign developer of the parent design. The Navy has not, however, ruled out the option of building the ships at two or three shipyards. At a December 12, 2018, hearing on Navy readiness before two subcommittees (the Seapower subcommittee and the Readiness and Management Support subcommittee, meeting jointly) of the Senate Armed Services Committee, the following exchange occurred: SENATOR ANGUS KING (continuing): Talking about industrial base and acquisition, the frigate, which we're talking about, there are 5 yards competing, there are going to be 20 ships. As I understand it, the intention now is to award all 20 ships to the winner, it's a winner take all among the five. In terms of industrial base and also just spreading the work, getting the—getting the work done faster, talk to me about the possibility of splitting that award between at least two yards if not three. SECRETARY OF THE NAVY RICHARD SPENCER: You bring up an interesting concept. There's two things going on here that need to be weighed out. One, yes, we do have to be attentive to our industrial base and the ability to keep hands busy and trained. Two, one thing we also have to look at, though, is the balancing of the flow of new ships into the fleet because what we want to avoid is a spike because that spike will come down and bite us again when they all go through regular maintenance cycles and every one comes due within two or three years or four years. It gets very crowded. It's not off the table because we've not awarded anything yet, but we will—we will look at how best we can balance with how we get resourced and, if we have the resources to bring expedition, granted, we will do that. Block Buy Contracting As a means of reducing their procurement cost, the Navy envisages using one or more fixed-price block buy contracts to procure the ships. Competing Industry Teams As shown in Table 1 , at least four industry teams are reportedly competing for the FFG(X) program. Two of the teams are reportedly proposing to build their FFG(X) designs at the two shipyards that have been building Littoral Combat Ships (LCSs) for the Navy—Austal USA of Mobile, AL, and Fincantieri/Marinette Marine (F/MM) of Marinette, WI. The other two teams are reportedly proposing to build their FFG(X) designs at General Dynamics/Bath Iron Works (GD/BIW), of Bath, ME, and Huntington Ingalls Industries/Ingalls Shipbuilding (HII/Ingalls) of Pascagoula, MS. As also shown in Table 1 , a fifth industry team that had been interested in the FFG(X) program reportedly informed the Navy on May 23, 2019, that it had decided to not submit a bid for the program. As shown in the table, this fifth industry team, like one of the other four, reportedly had proposed building its FFG(X) design at F/MM. On February 16, 2018, the Navy awarded five FFG(X) conceptual design contracts with a value of $15.0 million each to the leaders of the five industry teams shown in Table 1 . Being a recipient of a conceptual design contract was not a requirement for competing for the subsequent Detailed Design and Construction (DD&C) contract for the program. The Navy plans to announce the outcome of the FFG(X) competition—the winner of the DD&C contract—in July 2020. Program Funding Table 2 shows funding for the FFG(X) program under the Navy's FY2020 budget submission. Issues for Congress FY2020 Funding Request One issue for Congress is whether to approve, reject, or modify the Navy's FY2020 funding request for the program. In assessing this question, Congress may consider, among other things, whether the work the Navy is proposing to do in the program in FY2020 is appropriate, and whether the Navy has accurately priced that work. Cost, Capabilities, and Growth Margin Another issue for Congress is whether the Navy has appropriately defined the cost, capabilities, and growth margin of the FFG(X). Analytical Basis for Desired Ship Capabilities One aspect of this issue is whether the Navy has an adequately rigorous analytical basis for its identification of the capability gaps or mission needs to be met by the FFG(X), and for its decision to meet those capability gaps or mission needs through the procurement of a FFG with the capabilities outlined earlier in this CRS report. The question of whether the Navy has an adequately rigorous analytical basis for these things was discussed in greater detail in earlier editions of this CRS report. Balance Between Cost and Capabilities Another potential aspect of this issue is whether the Navy has arrived at a realistic balance between its desired capabilities for the FFG(X) and the its estimated procurement cost for the ship. An imbalance between these two could lead to an increased risk of cost growth in the program. The Navy could argue that a key aim of the five FFG(X) conceptual design contracts and other preliminary Navy interactions with industry was to help the Navy arrive at a realistic balance by informing the Navy's understanding of potential capability-cost tradeoffs in the FFG(X) design. Number of VLS Tubes Another potential aspect of this issue concerns the planned number of Vertical Launch System (VLS) missile tubes on the FFG(X). The VLS is the FFG(X)'s principal (though not only) means of storing and launching missiles. As shown in Figure 3 (see the box in the upper-left corner labeled "AW," meaning air warfare), the FFG(X) is to be equipped with 32 Mark 41 VLS tubes. (The Mark 41 is the Navy's standard VLS design.) Supporters of requiring the FFG(X) to be equipped with a larger number of VLS tubes, such as 48, might argue that the FFG(X) is to be roughly half as expensive to procure as the DDG-51 destroyer, and might therefore be more appropriately equipped with 48 VLS tubes, which is one-half the number on recent DDG-51s. They might also argue that in a context of renewed great power competition with potential adversaries such as China, which is steadily improving its naval capabilities, it might be prudent to equip the FFG(X)s with 48 rather than 32 VLS tubes, and that doing so might only marginally increase the unit procurement cost of the FFG(X). Supporters of requiring the FFG(X) to have no more than 32 VLS tubes might argue that the analyses indicating a need for 32 already took improving adversary capabilities (as well as other U.S. Navy capabilities) into account. They might also argue that the FFG(X), in addition to having 32 VLS tubes, is also to have a separate, 21-cell Rolling Airframe Missile (RAM) missile launcher (see again the "AW" box in the upper-left corner of Figure 3 ), and that increasing the number of VLS tubes from 32 to 48 would increase the procurement cost of a ship that is intended to be an affordable supplement to the Navy's cruisers and destroyers. Potential oversight questions for Congress might be: What would be the estimated increase in unit procurement cost of the FFG(X) of increasing the number of VLS tubes from 32 to 48? What would be the estimated increase in unit procurement cost of equipping the FFG(X) with 32 VLS tubes but designing the ship so that the number could easily be increased to 48 at some point later in the ship's life? Growth Margin Another potential aspect of this issue is whether, beyond the specific question of the number of VLS tubes, the Navy more generally has chosen the appropriate amount of growth margin to incorporate into the FFG(X) design. As shown in the Appendix A , the Navy wants the FFG(X) design to have a growth margin (also called service life allowance) of 5%, meaning an ability to accommodate upgrades and other changes that might be made to the ship's design over the course of its service life that could require up to 5% more space, weight, electrical power, or equipment cooling capacity. As shown in the Appendix A , the Navy also wants the FFG(X) design to have an additional growth margin (above the 5% factor) for accommodating a future directed energy system (i.e., a laser or high-power microwave device) or an active electronic attack system (i.e., electronic warfare system). Supporters could argue that a 5% growth margin is traditional for a ship like a frigate, that the FFG(X)'s 5% growth margin is supplemented by the additional growth margin for a directed energy system or active electronic attack system, and that requiring a larger growth margin could make the FFG(X) design larger and more expensive to procure. Skeptics might argue that a larger growth margin (such as 10%—a figure used in designing cruisers and destroyers) would provide more of a hedge against the possibility of greater-than-anticipated improvements in the capabilities of potential adversaries such as China, that a limited growth margin was a concern in the FFG-7 design, and that increasing the FFG(X) growth margin from 5% to 10% would have only a limited impact on the FFG(X)'s procurement cost. A potential oversight question for Congress might be: What would be the estimated increase in unit procurement cost of the FFG(X) of increasing the ship's growth margin from 5% to 10%? Parent-Design Approach Another potential oversight issue for Congress concerns the parent-design approach for the program. One alternative would be to use a clean-sheet design approach, under which procurement of the FFG(X) would begin about FY2024 and procurement of LCSs might be extended through about 2023. As mentioned earlier, using the parent-design approach can reduce design time, design cost, and technical, schedule, and cost risk in building the ship. A clean-sheet design approach, on the other hand, might result in a design that more closely matches the Navy's desired capabilities for the FFG(X), which might make the design more cost-effective for the Navy over the long run. It might also provide more work for the U.S. ship design and engineering industrial base. Another possible alternative would be to consider frigate designs that have been developed, but for which there are not yet any completed ships. This approach might make possible consideration of designs, such as (to cite just one possible example) the UK's new Type 26 frigate design, production of which was in its early stages in 2018. Compared to a clean-sheet design approach, using a developed-but-not-yet-built design would offer a reduction in design time and cost, but might not offer as much reduction in technical, schedule, and cost risk in building the ship as would be offered by use of an already-built design. Cost, Schedule, and Technical Risk Another potential oversight issue for Congress concerns cost, schedule, and technical risk in the FFG(X) program. The Navy can argue that the program's cost, schedule, and technical risk has been reduced by use of the parent-design approach and the decision to use only systems and technologies that already exist or are already being developed for use in other programs, rather than new technologies that need to be developed. Skeptics, while acknowledging that point, might argue that lead ships in Navy shipbuilding programs inherently pose cost, schedule, and technical risk, because they serve as the prototypes for their programs, and that, as detailed by CBO and GAO, lead ships in Navy shipbuilding programs in many cases have turned out to be more expensive to build than the Navy had estimated. A May 2019 report from the Government Accountability Office (GAO) on the status of various Department of Defense (DOD) acquisition programs states the following about the FFG(X) program: Current Status The FFG(X) program continues conceptual design work ahead of planned award of a lead ship detail design and construction contract in September 2020. In May 2017, the Navy revised its plans for a new frigate derived from minor modifications of an LCS design. The current plan is to select a design and shipbuilder through full and open competition to provide a more lethal and survivable small surface combatant. As stated in the FFG(X) acquisition strategy, the Navy awarded conceptual design contracts in February 2018 for development of five designs based on ships already demonstrated at sea. The tailoring plan indicates the program will minimize technology development by relying on government-furnished equipment from other programs or known-contractor-furnished equipment. In November 2018, the program received approval to tailor its acquisition documentation to support development start in February 2020. This included waivers for several requirements, such as an analysis of alternatives and an affordability analysis for the total program life cycle. FFG(X) also received approval to tailor reviews to validate system specifications and the release of the request for proposals for the detail design and construction contract…. Program Office Comments We provided a draft of this assessment to the program office for review and comment. The program office did not have any comments. Procurement of LCSs in FY2020 as Hedge against FFG(X) Delay Another potential issue for Congress is whether any additional LCSs should be procured in FY2020 as a hedge against potential delays in the FFG(X) program. Supporters might argue that, as detailed by GAO, lead ships in Navy shipbuilding programs in many cases encounter schedule delays, some quite lengthy, and that procuring additional LCSs in FY2020 could hedge against that risk at reasonable cost by taking advantage of hot LCS production lines. Skeptics might argue that the Navy does not have a requirement for any additional LCSs, and that funding the procurement of additional LCSs in FY2020 could reduce FY2020 funding available for other Navy or DOD programs, with an uncertain impact on net Navy or DOD capabilities. Potential Industrial-Base Impacts of FFG(X) Program Another issue for Congress concerns the potential industrial-base impacts of the FFG(X) for shipyards and supplier firms. Shipyards One aspect of this issue concerns the potential impact on shipyards of the Navy's plan to shift procurement of small surface combatants from LCSs to FFG(X)s starting in FY2020, particularly in terms of future workloads and employment levels at the two LCS shipyards, if one or both of these yards are not involved in building FFG(X)s. If a design proposed for construction at one of the LCS shipyards is chosen as the winner of the FFG(X) competition, then other things held equal (e.g., without the addition of new work other than building LCSs), workloads and employment levels at the other LCS shipyard (the one not chosen for the FFG(X) program), as well as supplier firms associated with that other LCS shipyard, would decline over time as the other LCS shipyard's backlog of prior-year-funded LCSs is completed and not replaced with new FFG(X) work. If no design proposed for construction at an LCS shipyard is chosen as the FFG(X)—that is, if the winner of the FFG(X) competition is a design to be built at a shipyard other than the two LCS shipyards—then other things held equal, employment levels at both LCS shipyards and their supplier firms would decline over time as their backlogs of prior-year-funded LCSs are completed and not replaced with FFG(X) work. As mentioned earlier, the Navy's current baseline plan for the FFG(X) program is to build FFG(X)s at a single shipyard. One possible alternative to this baseline plan would be to build FFG(X)s at two or three shipyards, including one or both of the LCS shipyards. This alternative is discussed further in the section below entitled " Number of FFG(X) Builders ." Another possible alternative would be would be to shift Navy shipbuilding work at one of the LCS yards (if the other wins the FFG(X) competition) or at both of the LCS yards (if neither wins the FFG(X) competition) to the production of sections of larger Navy ships (such as DDG-51 destroyers or amphibious ships) that undergo final assembly at other shipyards. Under this option, in other words, one or both of the LCS yards would function as shipyards participating in the production of larger Navy ships that undergo final assembly at other shipyards. This option might help maintain workloads and employment levels at one or both of the LCS yards, and might alleviate capacity constraints at other shipyards, permitting certain parts of the Navy's 355-ship force-level objective to be achieved sooner. The concept of shipyards producing sections of larger naval ships that undergo final assembly in other shipyards was examined at length in a 2011 RAND report. Supplier Firms Another aspect of the industrial-base issue concerns the FFG(X) program's potential impact on supplier firms (i.e., firms that provide materials and components that are incorporated into ships). Some supporters of U.S. supplier firms argue that the FFG(X) program as currently structured does not include strong enough provisions for requiring certain FFG(X) components to be U.S.-made, particularly since two of the five industry teams reported to be competing for the FFG(X) program (see the earlier section entitled " Competing Industry Teams ") are reportedly using European frigate designs as their proposed parent design. For example, the American Shipbuilding Suppliers Association (ASSA)—a trade association for U.S. ship supplier firms—states: The US Navy has historically selected US manufactured components for its major surface combatants and designated them as class standard equipment to be procured either as government-furnished equipment (GFE) or contractor-furnished equipment (CFE). In a major departure from that policy, the Navy has imposed no such requirement for the FFG(X), the Navy's premier small surface combatant. The acquisition plan for FFG(X) requires proposed offerings to be based on an in-service parent craft design. Foreign designs and/or foreign-manufactured components are being considered, with foreign companies performing a key role in selecting these components. Without congressional direction, there is a high likelihood that critical HM&E components on the FFG(X) will not be manufactured within the US shipbuilding industrial supplier base.…. The Navy's requirements are very clear regarding the combat system, radar, C4I suite, EW [electronic warfare], weapons, and numerous other war-fighting elements. However, unlike all major surface combatants currently in the fleet (CGs [cruisers], DDGs [destroyers]), the [Navy's] draft RFP [Request for Proposals] for the FFG(X) does not identify specific major HM&E components such as propulsion systems, machinery controls, power generation and other systems that are critical to the ship's operations and mission execution. Instead, the draft RFP relegates these decisions to shipyard primes or their foreign-owned partners, and there is no requirement for sourcing these components within the US shipbuilding supplier industrial base. The draft RFP also does not clearly identify life-cycle cost as a critical evaluation factor, separate from initial acquisition cost. This ignores the cost to the government of initial introduction [of the FFG(X)] into the [Navy's] logistics system, the training necessary for new systems, the location of repair services (e.g., does the equipment need to leave the US?), and the cost and availability of parts and services for the lifetime of the ship. Therefore, lowest acquisition cost is likely to drive the award—certainly for component suppliers. Further, the US Navy's acquisition approach not only encourages, but advantages, the use of foreign designs, most of which have a component supplier base that is foreign. Many of these component suppliers (and in some cases the shipyards they work with) are wholly or partially owned by their respective governments and enjoy direct subsidies as well as other benefits from being state owned (e.g., requirements relaxation, tax incentives, etc.). This uneven playing field, and the high-volume commercial shipbuilding market enjoyed by the foreign suppliers, make it unlikely for an American manufacturer to compete on cost. As incumbent component manufacturers, these foreign companies have a substantial advantage over US component manufacturers seeking to provide equipment even if costs could be matched, given the level of non-recurring engineering (NRE) required to facilitate new equipment into a parent craft's design and the subsequent performance risk. The potential outcome of such a scenario would have severe consequences across the US shipbuilding supplier base…. the loss of the FFG(X) opportunity to US suppliers would increase the cost on other Navy platforms [by reducing production economies of scale at U.S. suppliers that make components for other U.S. military ships]. Most importantly, maintaining a robust domestic [supplier] manufacturing capability allows for a surge capability by ensuring rapidly scalable capacity when called upon to support major military operations—a theme frequently emphasized by DOD and Navy leaders. These capabilities are a critical national asset and once lost, it is unlikely or extremely costly to replicate them. This would be a difficult lesson that is not in the government's best interests to re-learn. One such lesson exists on the DDG-51 [destroyer production] restart, where the difficulty of reconstituting a closed production line of a critical component manufacturer—its main reduction gear—required the government to fund the manufacturer directly as GFE, since the US manufacturer for the reduction gear had ceased operations. Other observers, while perhaps acknowledging some of the points made above, might argue one or more of the following: foreign-made components have long been incorporated into U.S. Navy ships (and other U.S. military equipment); U.S-made components have long been incorporated into foreign warships (and other foreign military equipment); and requiring a foreign parent design for the FFG(X) to be modified to incorporate substitute U.S.-made components could increase the unit procurement cost of the FFG(X) or the FFG(X) program's acquisition risk (i.e., cost, schedule, and technical risk), or both. Current U.S. law requires certain components of U.S. Navy ships to be made by a manufacturer in the national technology and industrial base. The primary statute in question—10 U.S.C. 2534—states in part: §2534. Miscellaneous limitations on the procurement of goods other than United States goods (a) Limitation on Certain Procurements.-The Secretary of Defense may procure any of the following items only if the manufacturer of the item satisfies the requirements of subsection (b):… (3) Components for naval vessels.-(A) The following components: (i) Air circuit breakers. (ii) Welded shipboard anchor and mooring chain with a diameter of four inches or less. (iii) Vessel propellers with a diameter of six feet or more. (B) The following components of vessels, to the extent they are unique to marine applications: gyrocompasses, electronic navigation chart systems, steering controls, pumps, propulsion and machinery control systems, and totally enclosed lifeboats. (b) Manufacturer in the National Technology and Industrial Base.- (1) General requirement.-A manufacturer meets the requirements of this subsection if the manufacturer is part of the national technology and industrial base…. (3) Manufacturer of vessel propellers.-In the case of a procurement of vessel propellers referred to in subsection (a)(3)(A)(iii), the manufacturer of the propellers meets the requirements of this subsection only if- (A) the manufacturer meets the requirements set forth in paragraph (1); and (B) all castings incorporated into such propellers are poured and finished in the United States. (c) Applicability to Certain Items.- (1) Components for naval vessels.-Subsection (a) does not apply to a procurement of spare or repair parts needed to support components for naval vessels produced or manufactured outside the United States…. (4) Vessel propellers.-Subsection (a)(3)(A)(iii) and this paragraph shall cease to be effective on February 10, 1998…. (d) Waiver Authority.-The Secretary of Defense may waive the limitation in subsection (a) with respect to the procurement of an item listed in that subsection if the Secretary determines that any of the following apply: (1) Application of the limitation would cause unreasonable costs or delays to be incurred. (2) United States producers of the item would not be jeopardized by competition from a foreign country, and that country does not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country. (3) Application of the limitation would impede cooperative programs entered into between the Department of Defense and a foreign country, or would impede the reciprocal procurement of defense items under a memorandum of understanding providing for reciprocal procurement of defense items that is entered into under section 2531 of this title, and that country does not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country. (4) Satisfactory quality items manufactured by an entity that is part of the national technology and industrial base (as defined in section 2500(1) of this title) are not available. (5) Application of the limitation would result in the existence of only one source for the item that is an entity that is part of the national technology and industrial base (as defined in section 2500(1) of this title). (6) The procurement is for an amount less than the simplified acquisition threshold and simplified purchase procedures are being used. (7) Application of the limitation is not in the national security interests of the United States. (8) Application of the limitation would adversely affect a United States company…. (h) Implementation of Naval Vessel Component Limitation.-In implementing subsection (a)(3)(B), the Secretary of Defense- (1) may not use contract clauses or certifications; and (2) shall use management and oversight techniques that achieve the objective of the subsection without imposing a significant management burden on the Government or the contractor involved. (i) Implementation of Certain Waiver Authority.-(1) The Secretary of Defense may exercise the waiver authority described in paragraph (2) only if the waiver is made for a particular item listed in subsection (a) and for a particular foreign country. (2) This subsection applies to the waiver authority provided by subsection (d) on the basis of the applicability of paragraph (2) or (3) of that subsection. (3) The waiver authority described in paragraph (2) may not be delegated below the Under Secretary of Defense for Acquisition, Technology, and Logistics. (4) At least 15 days before the effective date of any waiver made under the waiver authority described in paragraph (2), the Secretary shall publish in the Federal Register and submit to the congressional defense committees a notice of the determination to exercise the waiver authority. (5) Any waiver made by the Secretary under the waiver authority described in paragraph (2) shall be in effect for a period not greater than one year, as determined by the Secretary.... In addition to 10 U.S.C. 2534, the paragraph in the annual DOD appropriations act that makes appropriations for the Navy's shipbuilding account (i.e., the Shipbuilding and Conversion, Navy, or SCN, appropriation account) has in recent years included this proviso: … Provided further , That none of the funds provided under this heading for the construction or conversion of any naval vessel to be constructed in shipyards in the United States shall be expended in foreign facilities for the construction of major components of such vessel…. 10 U.S.C. 2534 explicitly applies to certain ship components, but not others. The meaning of "major components" in the above proviso from the annual DOD appropriations act might be subject to interpretation. The issue of U.S.-made components for Navy ships is also, for somewhat different reasons, an issue for Congress in connection with the Navy's John Lewis (TAO-205) class oiler shipbuilding program. Number of FFG(X) Builders Another issue for Congress whether to build FFG(X)s at a single shipyard, as the Navy's baseline plan calls for, or at two or three shipyards. As mentioned earlier, one possible alternative to the Navy's current baseline plan for building FFG(X)s at a single shipyard would be to build them at two or three yards, including potentially one or both of the LCS shipyards. The Navy's FFG-7 class frigates, which were procured at annual rates of as high as eight ships per year, were built at three shipyards. Supporters of building FFG(X)s at two or three yards might argue that it could boost FFG(X) production from the currently planned two ships per year to four or more ships per year, substantially accelerating the date for attaining the Navy's small surface combatant force-level goal; permit the Navy to use competition (either competition for quantity at the margin, or competition for profit [i.e., Profit Related to Offers, or PRO, bidding]) to help restrain FFG(X) prices and ensure production quality and on-time deliveries; and perhaps complicate adversary defense planning by presenting potential adversaries with multiple FFG(X) designs, each with its own specific operating characteristics. Opponents of this plan might argue that it could weaken the current FFG(X) competition by offering the winner a smaller prospective number of FFG(X)s and perhaps also essentially guaranteeing the LCSs yard that they will build some number of FFG(X)s; substantially increase annual FFG(X) procurement funding requirements so as to procure four or more FFG(X)s per year rather than two per year, which in a situation of finite DOD funding could require offsetting reductions in other Navy or DOD programs; and reduce production economies of scale in the FFG(X) program by dividing FFG(X) among two or three designs, and increase downstream Navy FFG(X) operation and support (O&S) costs by requiring the Navy to maintain two or three FFG(X) logistics support systems. Potential Change in Navy Surface Force Architecture Another potential oversight issue for Congress concerns the potential impact on required numbers of FFG(X)s of a possible change in the Navy's surface force architecture. As mentioned earlier, Navy officials have stated that the new Force Structure Assessment (FSA) being conducted by the Navy may shift the Navy to a new fleet architecture that will include, among other thing, a larger proportion of small surface combatants—and, by implication, a smaller proportion of large surface combatants (i.e., cruisers and destroyers). A change in the required number of FFG(X)s could influence perspectives on the annual procurement rate for the program and the number of shipyards used to build the ships. A January 15, 2019, press report states: The Navy plans to spend this year taking the first few steps into a markedly different future, which, if it comes to pass, will upend how the fleet has fought since the Cold War. And it all starts with something that might seem counterintuitive: It's looking to get smaller. "Today, I have a requirement for 104 large surface combatants in the force structure assessment; [and] I have [a requirement for] 52 small surface combatants," said Surface Warfare Director Rear Adm. Ronald Boxall. "That's a little upside down. Should I push out here and have more small platforms? I think the future fleet architecture study has intimated 'yes,' and our war gaming shows there is value in that." An April 8, 2019, press report states that Navy discussions about the future surface fleet include the upcoming construction and fielding of the [FFG(X)] frigate, which [Vice Admiral Bill Merz, the deputy chief of naval operations for warfare systems] said is surpassing expectations already in terms of the lethality that industry can put into a small combatant. "The FSA may actually help us on, how many (destroyers) do we really need to modernize, because I think the FSA is going to give a lot of credit to the frigate—if I had a crystal ball and had to predict what the FSA was going to do, it's going to probably recommend more small surface combatants, meaning the frigate … and then how much fewer large surface combatants can we mix?" Merz said. An issue the Navy has to work through is balancing a need to have enough ships and be capable enough today, while also making decisions that will help the Navy get out of the top-heavy surface fleet and into a better balance as soon as is feasible. "You may see the evolution over time where frigates start replacing destroyers, the Large Surface Combatant [a future cruiser/destroyer-type ship] starts replacing destroyers, and in the end, as the destroyers blend away you're going to get this healthier mix of small and large surface combatants," he said—though the new FSA may shed more light on what that balance will look like and when it could be achieved. Legislative Activity for FY2020 Summary of Congressional Action on FY2020 Funding Request Table 3 summarizes congressional action on the Navy's FY2020 funding request for the LCS program. Appendix A. Navy Briefing Slides from July 25, 2017, FFG(X) Industry Day Event This appendix reprints some of the briefing slides that the Navy presented at its July 25, 2017, industry day event on the FFG(X) program, which was held in association with the Request for Information (RFI) that the Navy issued on July 25, 2017, to solicit information for better understanding potential trade-offs between cost and capability in the FFG(X) design. The reprinted slides begin on the next page. Appendix B. Competing Industry Teams This appendix presents additional background information on the industry teams competing for the FFG(X) program. February 16, 2018, Press Report About Five Competing Industry Teams A February 16, 2018, press report about the five competing industry teams reportedly competing for the FFG(X) program (i.e., the five industry teams shown in Table 1 ) stated the following: The Navy would not confirm how many groups bid for the [FFG(X)] work. At least one U.S.-German team that was not selected for a [conceptual] design contract, Atlas USA and ThyssenKrupp Marine Systems, told USNI News they had submitted for the [DD&C] competition.... During last month's Surface Navy Association [annual symposium], several shipbuilders outlined their designs for the FFG(X) competition. Austal USA Shipyard: Austal USA in Mobile, Ala. Parent Design: Independence-class [i.e., LCS-2 class] Littoral Combat Ship One of the two Littoral Combat Ship builders, Austal USA has pitched an upgunned variant of the Independence-class LCS as both a foreign military sales offering and as the answer to the Navy's upgunned small surface combatant and then frigate programs. Based on the 3,000-ton aluminum trimaran design, the hull boasts a large flight deck and space for up to 16 Mk-41 Vertical Launching System (VLS) cells. Fincantieri Marine Group Shipyard: Fincantieri Marinette Marine in Marinette, Wisc. Parent Design: Fincantieri Italian FREMM As part of the stipulations of the FFG(X) programs, a contractor can offer just one design in the competition as a prime contractor but may also support a second bid as a subcontractor. Fincantieri elected to offer its 6,700-ton Italian Fregata europea multi-missione (FREMM) design for construction in its Wisconsin Marinette Marine shipyard, as well as partner with Lockheed Martin on its Freedom-class pitch as a subcontractor. The Italian FREMM design features a 16-cell VLS as well as space for deck-launched anti-ship missiles. General Dynamics Bath Iron Works Shipyard: Bath Iron Works in Bath, Maine Parent Design: Navantia Álvaro de Bazán-class F100 Frigate The 6,000-ton air defense guided-missile frigates fitted with the Aegis Combat System have been in service for the Spanish Armada since 2002 and are the basis of the Australian Hobart-class air defense destroyers and the Norwegian Fridtjof Nansen-class frigates. The Navantia partnership with Bath is built on a previous partnership from the turn of the century. The F100 frigates were a product of a teaming agreement between BIW, Lockheed Martin and Navantia predecessor Izar as part of the Advanced Frigate Consortium from 2000. Huntington Ingalls Industries Shipyard: Ingalls Shipbuilding in Pascagoula, Miss. Parent Design: Unknown Out of the competitors involved in the competition, HII was the only company that did not present a model or a rendering of its FFG(X) at the Surface Navy Association symposium in January. A spokeswoman for the company declined to elaborate on the offering when contacted by USNI News on Friday. In the past, HII has presented a naval version of its Legend-class National Security Cutter design as a model at trade shows labeled as a "Patrol Frigate." Lockheed Martin Shipyard: Fincantieri Marinette Marine in Marinette, Wisc. Parent Design: Freedom-class [i.e., LCS-1 class] Littoral Combat Ship Of the two LCS builders, Lockheed Martin is the first to have secured a foreign military sale with its design. The company's FFG(X) bid will have much in common with its offering for the Royal Saudi Navy's 4,000-ton multi-mission surface combatant. The new Saudi ships will be built around an eight-cell Mk-41 vertical launch system and a 4D air search radar. Lockheed has pitched several other variants of the hull that include more VLS cells. "We are proud of our 15-year partnership with the U.S. Navy on the Freedom-variant Littoral Combat Ship and look forward to extending it to FFG(X)," said Joe DePietro, Lockheed Martin vice president of small combatants and ship systems in a Friday evening statement. "Our frigate design offers an affordable, low-risk answer to meeting the Navy's goals of a larger and more capable fleet." May 28, 2019, Press Report About One Industry Team Deciding to Not Submit a Bid On May 28, 2019, it was reported that one of the five industry teams that had been interested in the FFG(X) program had informed the Navy on May 23 that it had decided to not submit a bid for the program. The May 28, 2019, press report about this industry team's decision stated: Lockheed Martin won't submit a bid to compete in the design of the Navy's next-generation guided-missile (FFG(X)) frigate competition, company officials told USNI News on Tuesday [May 28]. The company elected to focus on its involvement developing the frigate combat system and other systems rather than forward its Freedom-class LCS design for the detailed design and construction contract Naval Sea Systems Command plans to issue this summer, Joe DePietro, Lockheed Martin vice president of small combatants and ship systems, told USNI News. "We reviewed the entire program and obviously, given some of the stuff that has already happened that is outside of the contract for the program—that includes the designation of our combat management system, COMBATSS 21, derived off of Aegis; we have the Mk-41 vertical launch system; the processing for our anti-submarine warfare area; advanced [electronic warfare] and platform integration," he said. "As we evaluated all of those different areas, we determined not to pursue, as a prime contractor, the FFG(X) detailed design and construction." The company informed the Navy on May 23 it would not join the other bidders for the hull design, two sources familiar with the notification told USNI News. While the design passed two Navy reviews, the company told the service it felt the Freedom design would be stretched too far to accommodate all the capabilities required, one source told USNI News…. While Lockheed is moving away from leading a frigate team, the company will be heavily involved with whoever wins. The FFG(X)'s COMBATSS-21 Combat Management System will be derived from the company's Aegis Combat System, and Lockheed Martin makes the ship's vertical launch system. Summary:	null	96	51,614	51,616	51,616	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction This report provides background information and discusses potential issues for Congress regarding the Navy's FFG(X) program, a program to procure a new class of 20 guided-missile frigates (FFGs). The Navy's proposed FY2020 budget requests $1,281.2 million for the procurement of the first FFG(X). The FFG(X) program presents several potential oversight issues for Congress. Congress's decisions on the program could affect Navy capabilities and funding requirements and the shipbuilding industrial base. This report focuses on the FFG(X) program. A related Navy shipbuilding program, the Littoral Combat Ship (LCS) program, is covered in detail in CRS Report RL33741, Navy Littoral Combat Ship (LCS) Program: Background and Issues for Congress , by Ronald O'Rourke. Other CRS reports discuss the strategic context within which the FFG(X) program and other Navy acquisition programs may be considered. Background Navy's Force of Small Surface Combatants (SSCs) In discussing its force-level goals and 30-year shipbuilding plans, the Navy organizes its surface combatants into large surface combatants (LSCs), meaning the Navy's cruisers and destroyers, and small surface combatants (SSCs), meaning the Navy's frigates, LCSs, mine warfare ships, and patrol craft. SSCs are smaller, less capable in some respects, and individually less expensive to procure, operate, and support than LSCs. SSCs can operate in conjunction with LSCs and other Navy ships, particularly in higher-threat operating environments, or independently, particularly in lower-threat operating environments. In December 2016, the Navy released a goal to achieve and maintain a Navy of 355 ships, including 52 SSCs, of which 32 are to be LCSs and 20 are to be FFG(X)s. Although patrol craft are SSCs, they do not count toward the 52-ship SSC force-level goal, because patrol craft are not considered battle force ships, which are the kind of ships that count toward the quoted size of the Navy and the Navy's force-level goal. At the end of FY2018, the Navy's force of SSCs totaled 27 battle force ships, including 0 frigates, 16 LCSs, and 11 mine warfare ships. Under the Navy's FY2020 30-year (FY2020-FY2049) shipbuilding plan, the SSC force is to grow to 52 ships (34 LCSs and 18 FFG[X]s) in FY2034, reach a peak of 62 ships (30 LCSs, 20 FFG[X]s, and 12 SSCs of a future design) in FY2040, and then decline to 50 ships (20 FFG[X]s and 30 SSCs of a future design) in FY2049. U.S. Navy Frigates in General In contrast to cruisers and destroyers, which are designed to operate in higher-threat areas, frigates are generally intended to operate more in lower-threat areas. U.S. Navy frigates perform many of the same peacetime and wartime missions as U.S. Navy cruisers and destroyers, but since frigates are intended to do so in lower-threat areas, they are equipped with fewer weapons, less-capable radars and other systems, and less engineering redundancy and survivability than cruisers and destroyers. The most recent class of frigates operated by the Navy was the Oliver Hazard Perry (FFG-7) class ( Figure 1 ). A total of 51 FFG-7 class ships were procured between FY1973 and FY1984. The ships entered service between 1977 and 1989, and were decommissioned between 1994 and 2015. In their final configuration, FFG-7s were about 455 feet long and had full load displacements of roughly 3,900 tons to 4,100 tons. (By comparison, the Navy's Arleigh Burke [DDG-51] class destroyers are about 510 feet long and have full load displacements of roughly 9,300 tons.) Following their decommissioning, a number of FFG-7 class ships, like certain other decommissioned U.S. Navy ships, have been transferred to the navies of U.S. allied and partner countries. FFG(X) Program Meaning of Designation FFG(X) In the program designation FFG(X), FF means frigate, G means guided-missile ship (indicating a ship equipped with an area-defense AAW system), and (X) indicates that the specific design of the ship has not yet been determined. FFG(X) thus means a guided-missile frigate whose specific design has not yet been determined. Procurement Quantity and Schedule Procurement Quantity The Navy wants to procure 20 FFG(X)s, which in combination with the Navy's planned total of 32 LCSs would meet the Navy's 52-ship SSC force-level goal. A total of 35 (rather than 32) LCSs have been procured through FY2019, but Navy officials have stated that the Navy nevertheless wants to procure 20 FFG(X)s. The Navy's 355-ship force-level goal is the result of a Force Structure Analysis (FSA) that the Navy conducted in 2016. The Navy conducts a new or updated FSA every few years, and it is currently conducting a new FSA that is scheduled to be completed by the end of 2019. Navy officials have stated that this new FSA will likely not reduce the required number of small surface combatants, and might increase it. Navy officials have also suggested that the Navy in coming years may shift to a new surface force architecture that will include, among other things, a larger proportion of small surface combatants. Figure 2 shows a Navy briefing slide depicting the potential new surface force architecture, with each sphere representing a manned ship or an unmanned surface vehicle (USV). Consistent with Figure 2 , the Navy's 355-ship goal, reflecting the current force architecture, calls for a Navy with twice as many large surface combatants as small surface combatants. Figure 2 suggests that the potential new surface force architecture could lead to the obverse—a planned force mix that calls for twice as many small surface combatants than large surface combatants—along with a new third tier of numerous USVs. Procurement Schedule The Navy wants to procure the first FFG(X) in FY2020, the next 18 at a rate of two per year in FY2021-FY2029, and the 20th in FY2030. Under the Navy's FY2020 budget submission, the first FFG(X) is scheduled to be delivered in July 2026, 72 months after the contract award date of July 2020. Ship Capabilities, Design, and Crewing Ship Capabilities and Design As mentioned above, the (X) in the program designation FFG(X) means that the design of the ship has not yet been determined. In general, the Navy envisages the FFG(X) as follows: The ship is to be a multimission small surface combatant capable of conducting anti-air warfare (AAW), anti-surface warfare (ASuW), antisubmarine warfare (ASW), and electromagnetic warfare (EMW) operations. Compared to an FF concept that emerged under a February 2014 restructuring of the LCS program, the FFG(X) is to have increased AAW and EMW capability, and enhanced survivability. The ship's area-defense AAW system is to be capable of local area AAW, meaning a form of area-defense AAW that extends to a lesser range than the area-defense AAW that can be provided by the Navy's cruisers and destroyers. The ship is to be capable of operating in both blue water (i.e., mid-ocean) and littoral (i.e., near-shore) areas. The ship is to be capable of operating either independently (when that is appropriate for its assigned mission) or as part of larger Navy formations. Given the above, the FFG(X) design will likely be larger in terms of displacement, more heavily armed, and more expensive to procure than either the LCS or an FF concept that emerged from the February 2014 LCS program restructuring. Figure 3 shows a January 2019 Navy briefing slide summarizing the FFG(X)'s planned capabilities. For additional information on the FFG(X)'s planned capabilities, see the Appendix A . Dual Crewing To help maximize the time that each ship spends at sea, the Navy reportedly is considering operating FFG(X)s with dual crews—an approach, commonly called blue-gold crewing, that the Navy uses for operating its ballistic missile submarines and LCSs. Procurement Cost The Navy wants the follow-on ships in the FFG(X) program (i.e., ships 2 through 20) to have an average unit procurement cost of $800 million to $950 million each in constant 2018 dollars. The Navy reportedly believes that the ship's cost can be held closer to the $800 million figure. By way of comparison, the Navy estimates the average unit procurement cost of the three LCSs procured in FY2019 at $523.7 million (not including the cost of each ship's embarked mission package), and the average unit procurement cost of the three DDG-51 class destroyers that the Navy has requested for procurement in FY2020 at $1,821.0 million. As shown in Table 2 , the Navy's proposed FY2020 budget requests $1,281.2 million for the procurement of the first FFG(X). The lead ship in the program will be considerably more expensive than the follow-on ships in the program, because the lead ship's procurement cost incorporates most or all of the detailed design/nonrecurring engineering (DD/NRE) costs for the class. (It is a traditional Navy budgeting practice to attach most or all of the DD/NRE costs for a new ship class to the procurement cost of the lead ship in the class.) As shown in Table 2 , the Navy's FY2020 budget submission shows that subsequent ships in the class are estimated by the Navy to cost roughly $900 million each in then-year dollars over the next few years. The Navy's FY2020 budget submission estimates the total procurement cost of 20 FFG(X)s at $20,470.1 million (i.e., about $20.5 billion) in then-year dollars, or an average of about $1,023.5 million each. Since the figure of $20,470.1 million is a then-year dollar figure, it incorporates estimated annual inflation for FFG(X)s to be procured out to FY2030. Acquisition Strategy Parent-Design Approach The Navy's desire to procure the first FFG(X) in FY2020 does not allow enough time to develop a completely new design (i.e., a clean-sheet design) for the FFG(X). (Using a clean-sheet design might defer the procurement of the first ship to about FY2024.) Consequently, the Navy intends to build the FFG(X) to a modified version of an existing ship design—an approach called the parent-design approach. The parent design could be a U.S. ship design or a foreign ship design. Using the parent-design approach can reduce design time, design cost, and cost, schedule, and technical risk in building the ship. The Coast Guard and the Navy are currently using the parent-design approach for the Coast Guard's polar security cutter (i.e., polar icebreaker) program. The parent-design approach has also been used in the past for other Navy and Coast Guard ships, including Navy mine warfare ships and the Coast Guard's new Fast Response Cutters (FRCs). No New Technologies or Systems As an additional measure for reducing cost, schedule, and technical risk in the FFG(X) program, the Navy envisages developing no new technologies or systems for the FFG(X)—the ship is to use systems and technologies that already exist or are already being developed for use in other programs. Number of Builders Given the currently envisaged procurement rate of two ships per year, the Navy's baseline plan for the FFG(X) program envisages using a single builder to build the ships. Consistent with U.S. law, the ship is to be built in a U.S. shipyard, even if it is based on a foreign design. Using a foreign design might thus involve cooperation or a teaming arrangement between a U.S. builder and a foreign developer of the parent design. The Navy has not, however, ruled out the option of building the ships at two or three shipyards. At a December 12, 2018, hearing on Navy readiness before two subcommittees (the Seapower subcommittee and the Readiness and Management Support subcommittee, meeting jointly) of the Senate Armed Services Committee, the following exchange occurred: SENATOR ANGUS KING (continuing): Talking about industrial base and acquisition, the frigate, which we're talking about, there are 5 yards competing, there are going to be 20 ships. As I understand it, the intention now is to award all 20 ships to the winner, it's a winner take all among the five. In terms of industrial base and also just spreading the work, getting the—getting the work done faster, talk to me about the possibility of splitting that award between at least two yards if not three. SECRETARY OF THE NAVY RICHARD SPENCER: You bring up an interesting concept. There's two things going on here that need to be weighed out. One, yes, we do have to be attentive to our industrial base and the ability to keep hands busy and trained. Two, one thing we also have to look at, though, is the balancing of the flow of new ships into the fleet because what we want to avoid is a spike because that spike will come down and bite us again when they all go through regular maintenance cycles and every one comes due within two or three years or four years. It gets very crowded. It's not off the table because we've not awarded anything yet, but we will—we will look at how best we can balance with how we get resourced and, if we have the resources to bring expedition, granted, we will do that. Block Buy Contracting As a means of reducing their procurement cost, the Navy envisages using one or more fixed-price block buy contracts to procure the ships. Competing Industry Teams As shown in Table 1 , at least four industry teams are reportedly competing for the FFG(X) program. Two of the teams are reportedly proposing to build their FFG(X) designs at the two shipyards that have been building Littoral Combat Ships (LCSs) for the Navy—Austal USA of Mobile, AL, and Fincantieri/Marinette Marine (F/MM) of Marinette, WI. The other two teams are reportedly proposing to build their FFG(X) designs at General Dynamics/Bath Iron Works (GD/BIW), of Bath, ME, and Huntington Ingalls Industries/Ingalls Shipbuilding (HII/Ingalls) of Pascagoula, MS. As also shown in Table 1 , a fifth industry team that had been interested in the FFG(X) program reportedly informed the Navy on May 23, 2019, that it had decided to not submit a bid for the program. As shown in the table, this fifth industry team, like one of the other four, reportedly had proposed building its FFG(X) design at F/MM. On February 16, 2018, the Navy awarded five FFG(X) conceptual design contracts with a value of $15.0 million each to the leaders of the five industry teams shown in Table 1 . Being a recipient of a conceptual design contract was not a requirement for competing for the subsequent Detailed Design and Construction (DD&C) contract for the program. The Navy plans to announce the outcome of the FFG(X) competition—the winner of the DD&C contract—in July 2020. Program Funding Table 2 shows funding for the FFG(X) program under the Navy's FY2020 budget submission. Issues for Congress FY2020 Funding Request One issue for Congress is whether to approve, reject, or modify the Navy's FY2020 funding request for the program. In assessing this question, Congress may consider, among other things, whether the work the Navy is proposing to do in the program in FY2020 is appropriate, and whether the Navy has accurately priced that work. Cost, Capabilities, and Growth Margin Another issue for Congress is whether the Navy has appropriately defined the cost, capabilities, and growth margin of the FFG(X). Analytical Basis for Desired Ship Capabilities One aspect of this issue is whether the Navy has an adequately rigorous analytical basis for its identification of the capability gaps or mission needs to be met by the FFG(X), and for its decision to meet those capability gaps or mission needs through the procurement of a FFG with the capabilities outlined earlier in this CRS report. The question of whether the Navy has an adequately rigorous analytical basis for these things was discussed in greater detail in earlier editions of this CRS report. Balance Between Cost and Capabilities Another potential aspect of this issue is whether the Navy has arrived at a realistic balance between its desired capabilities for the FFG(X) and the its estimated procurement cost for the ship. An imbalance between these two could lead to an increased risk of cost growth in the program. The Navy could argue that a key aim of the five FFG(X) conceptual design contracts and other preliminary Navy interactions with industry was to help the Navy arrive at a realistic balance by informing the Navy's understanding of potential capability-cost tradeoffs in the FFG(X) design. Number of VLS Tubes Another potential aspect of this issue concerns the planned number of Vertical Launch System (VLS) missile tubes on the FFG(X). The VLS is the FFG(X)'s principal (though not only) means of storing and launching missiles. As shown in Figure 3 (see the box in the upper-left corner labeled "AW," meaning air warfare), the FFG(X) is to be equipped with 32 Mark 41 VLS tubes. (The Mark 41 is the Navy's standard VLS design.) Supporters of requiring the FFG(X) to be equipped with a larger number of VLS tubes, such as 48, might argue that the FFG(X) is to be roughly half as expensive to procure as the DDG-51 destroyer, and might therefore be more appropriately equipped with 48 VLS tubes, which is one-half the number on recent DDG-51s. They might also argue that in a context of renewed great power competition with potential adversaries such as China, which is steadily improving its naval capabilities, it might be prudent to equip the FFG(X)s with 48 rather than 32 VLS tubes, and that doing so might only marginally increase the unit procurement cost of the FFG(X). Supporters of requiring the FFG(X) to have no more than 32 VLS tubes might argue that the analyses indicating a need for 32 already took improving adversary capabilities (as well as other U.S. Navy capabilities) into account. They might also argue that the FFG(X), in addition to having 32 VLS tubes, is also to have a separate, 21-cell Rolling Airframe Missile (RAM) missile launcher (see again the "AW" box in the upper-left corner of Figure 3 ), and that increasing the number of VLS tubes from 32 to 48 would increase the procurement cost of a ship that is intended to be an affordable supplement to the Navy's cruisers and destroyers. Potential oversight questions for Congress might be: What would be the estimated increase in unit procurement cost of the FFG(X) of increasing the number of VLS tubes from 32 to 48? What would be the estimated increase in unit procurement cost of equipping the FFG(X) with 32 VLS tubes but designing the ship so that the number could easily be increased to 48 at some point later in the ship's life? Growth Margin Another potential aspect of this issue is whether, beyond the specific question of the number of VLS tubes, the Navy more generally has chosen the appropriate amount of growth margin to incorporate into the FFG(X) design. As shown in the Appendix A , the Navy wants the FFG(X) design to have a growth margin (also called service life allowance) of 5%, meaning an ability to accommodate upgrades and other changes that might be made to the ship's design over the course of its service life that could require up to 5% more space, weight, electrical power, or equipment cooling capacity. As shown in the Appendix A , the Navy also wants the FFG(X) design to have an additional growth margin (above the 5% factor) for accommodating a future directed energy system (i.e., a laser or high-power microwave device) or an active electronic attack system (i.e., electronic warfare system). Supporters could argue that a 5% growth margin is traditional for a ship like a frigate, that the FFG(X)'s 5% growth margin is supplemented by the additional growth margin for a directed energy system or active electronic attack system, and that requiring a larger growth margin could make the FFG(X) design larger and more expensive to procure. Skeptics might argue that a larger growth margin (such as 10%—a figure used in designing cruisers and destroyers) would provide more of a hedge against the possibility of greater-than-anticipated improvements in the capabilities of potential adversaries such as China, that a limited growth margin was a concern in the FFG-7 design, and that increasing the FFG(X) growth margin from 5% to 10% would have only a limited impact on the FFG(X)'s procurement cost. A potential oversight question for Congress might be: What would be the estimated increase in unit procurement cost of the FFG(X) of increasing the ship's growth margin from 5% to 10%? Parent-Design Approach Another potential oversight issue for Congress concerns the parent-design approach for the program. One alternative would be to use a clean-sheet design approach, under which procurement of the FFG(X) would begin about FY2024 and procurement of LCSs might be extended through about 2023. As mentioned earlier, using the parent-design approach can reduce design time, design cost, and technical, schedule, and cost risk in building the ship. A clean-sheet design approach, on the other hand, might result in a design that more closely matches the Navy's desired capabilities for the FFG(X), which might make the design more cost-effective for the Navy over the long run. It might also provide more work for the U.S. ship design and engineering industrial base. Another possible alternative would be to consider frigate designs that have been developed, but for which there are not yet any completed ships. This approach might make possible consideration of designs, such as (to cite just one possible example) the UK's new Type 26 frigate design, production of which was in its early stages in 2018. Compared to a clean-sheet design approach, using a developed-but-not-yet-built design would offer a reduction in design time and cost, but might not offer as much reduction in technical, schedule, and cost risk in building the ship as would be offered by use of an already-built design. Cost, Schedule, and Technical Risk Another potential oversight issue for Congress concerns cost, schedule, and technical risk in the FFG(X) program. The Navy can argue that the program's cost, schedule, and technical risk has been reduced by use of the parent-design approach and the decision to use only systems and technologies that already exist or are already being developed for use in other programs, rather than new technologies that need to be developed. Skeptics, while acknowledging that point, might argue that lead ships in Navy shipbuilding programs inherently pose cost, schedule, and technical risk, because they serve as the prototypes for their programs, and that, as detailed by CBO and GAO, lead ships in Navy shipbuilding programs in many cases have turned out to be more expensive to build than the Navy had estimated. A May 2019 report from the Government Accountability Office (GAO) on the status of various Department of Defense (DOD) acquisition programs states the following about the FFG(X) program: Current Status The FFG(X) program continues conceptual design work ahead of planned award of a lead ship detail design and construction contract in September 2020. In May 2017, the Navy revised its plans for a new frigate derived from minor modifications of an LCS design. The current plan is to select a design and shipbuilder through full and open competition to provide a more lethal and survivable small surface combatant. As stated in the FFG(X) acquisition strategy, the Navy awarded conceptual design contracts in February 2018 for development of five designs based on ships already demonstrated at sea. The tailoring plan indicates the program will minimize technology development by relying on government-furnished equipment from other programs or known-contractor-furnished equipment. In November 2018, the program received approval to tailor its acquisition documentation to support development start in February 2020. This included waivers for several requirements, such as an analysis of alternatives and an affordability analysis for the total program life cycle. FFG(X) also received approval to tailor reviews to validate system specifications and the release of the request for proposals for the detail design and construction contract…. Program Office Comments We provided a draft of this assessment to the program office for review and comment. The program office did not have any comments. Procurement of LCSs in FY2020 as Hedge against FFG(X) Delay Another potential issue for Congress is whether any additional LCSs should be procured in FY2020 as a hedge against potential delays in the FFG(X) program. Supporters might argue that, as detailed by GAO, lead ships in Navy shipbuilding programs in many cases encounter schedule delays, some quite lengthy, and that procuring additional LCSs in FY2020 could hedge against that risk at reasonable cost by taking advantage of hot LCS production lines. Skeptics might argue that the Navy does not have a requirement for any additional LCSs, and that funding the procurement of additional LCSs in FY2020 could reduce FY2020 funding available for other Navy or DOD programs, with an uncertain impact on net Navy or DOD capabilities. Potential Industrial-Base Impacts of FFG(X) Program Another issue for Congress concerns the potential industrial-base impacts of the FFG(X) for shipyards and supplier firms. Shipyards One aspect of this issue concerns the potential impact on shipyards of the Navy's plan to shift procurement of small surface combatants from LCSs to FFG(X)s starting in FY2020, particularly in terms of future workloads and employment levels at the two LCS shipyards, if one or both of these yards are not involved in building FFG(X)s. If a design proposed for construction at one of the LCS shipyards is chosen as the winner of the FFG(X) competition, then other things held equal (e.g., without the addition of new work other than building LCSs), workloads and employment levels at the other LCS shipyard (the one not chosen for the FFG(X) program), as well as supplier firms associated with that other LCS shipyard, would decline over time as the other LCS shipyard's backlog of prior-year-funded LCSs is completed and not replaced with new FFG(X) work. If no design proposed for construction at an LCS shipyard is chosen as the FFG(X)—that is, if the winner of the FFG(X) competition is a design to be built at a shipyard other than the two LCS shipyards—then other things held equal, employment levels at both LCS shipyards and their supplier firms would decline over time as their backlogs of prior-year-funded LCSs are completed and not replaced with FFG(X) work. As mentioned earlier, the Navy's current baseline plan for the FFG(X) program is to build FFG(X)s at a single shipyard. One possible alternative to this baseline plan would be to build FFG(X)s at two or three shipyards, including one or both of the LCS shipyards. This alternative is discussed further in the section below entitled " Number of FFG(X) Builders ." Another possible alternative would be would be to shift Navy shipbuilding work at one of the LCS yards (if the other wins the FFG(X) competition) or at both of the LCS yards (if neither wins the FFG(X) competition) to the production of sections of larger Navy ships (such as DDG-51 destroyers or amphibious ships) that undergo final assembly at other shipyards. Under this option, in other words, one or both of the LCS yards would function as shipyards participating in the production of larger Navy ships that undergo final assembly at other shipyards. This option might help maintain workloads and employment levels at one or both of the LCS yards, and might alleviate capacity constraints at other shipyards, permitting certain parts of the Navy's 355-ship force-level objective to be achieved sooner. The concept of shipyards producing sections of larger naval ships that undergo final assembly in other shipyards was examined at length in a 2011 RAND report. Supplier Firms Another aspect of the industrial-base issue concerns the FFG(X) program's potential impact on supplier firms (i.e., firms that provide materials and components that are incorporated into ships). Some supporters of U.S. supplier firms argue that the FFG(X) program as currently structured does not include strong enough provisions for requiring certain FFG(X) components to be U.S.-made, particularly since two of the five industry teams reported to be competing for the FFG(X) program (see the earlier section entitled " Competing Industry Teams ") are reportedly using European frigate designs as their proposed parent design. For example, the American Shipbuilding Suppliers Association (ASSA)—a trade association for U.S. ship supplier firms—states: The US Navy has historically selected US manufactured components for its major surface combatants and designated them as class standard equipment to be procured either as government-furnished equipment (GFE) or contractor-furnished equipment (CFE). In a major departure from that policy, the Navy has imposed no such requirement for the FFG(X), the Navy's premier small surface combatant. The acquisition plan for FFG(X) requires proposed offerings to be based on an in-service parent craft design. Foreign designs and/or foreign-manufactured components are being considered, with foreign companies performing a key role in selecting these components. Without congressional direction, there is a high likelihood that critical HM&E components on the FFG(X) will not be manufactured within the US shipbuilding industrial supplier base.…. The Navy's requirements are very clear regarding the combat system, radar, C4I suite, EW [electronic warfare], weapons, and numerous other war-fighting elements. However, unlike all major surface combatants currently in the fleet (CGs [cruisers], DDGs [destroyers]), the [Navy's] draft RFP [Request for Proposals] for the FFG(X) does not identify specific major HM&E components such as propulsion systems, machinery controls, power generation and other systems that are critical to the ship's operations and mission execution. Instead, the draft RFP relegates these decisions to shipyard primes or their foreign-owned partners, and there is no requirement for sourcing these components within the US shipbuilding supplier industrial base. The draft RFP also does not clearly identify life-cycle cost as a critical evaluation factor, separate from initial acquisition cost. This ignores the cost to the government of initial introduction [of the FFG(X)] into the [Navy's] logistics system, the training necessary for new systems, the location of repair services (e.g., does the equipment need to leave the US?), and the cost and availability of parts and services for the lifetime of the ship. Therefore, lowest acquisition cost is likely to drive the award—certainly for component suppliers. Further, the US Navy's acquisition approach not only encourages, but advantages, the use of foreign designs, most of which have a component supplier base that is foreign. Many of these component suppliers (and in some cases the shipyards they work with) are wholly or partially owned by their respective governments and enjoy direct subsidies as well as other benefits from being state owned (e.g., requirements relaxation, tax incentives, etc.). This uneven playing field, and the high-volume commercial shipbuilding market enjoyed by the foreign suppliers, make it unlikely for an American manufacturer to compete on cost. As incumbent component manufacturers, these foreign companies have a substantial advantage over US component manufacturers seeking to provide equipment even if costs could be matched, given the level of non-recurring engineering (NRE) required to facilitate new equipment into a parent craft's design and the subsequent performance risk. The potential outcome of such a scenario would have severe consequences across the US shipbuilding supplier base…. the loss of the FFG(X) opportunity to US suppliers would increase the cost on other Navy platforms [by reducing production economies of scale at U.S. suppliers that make components for other U.S. military ships]. Most importantly, maintaining a robust domestic [supplier] manufacturing capability allows for a surge capability by ensuring rapidly scalable capacity when called upon to support major military operations—a theme frequently emphasized by DOD and Navy leaders. These capabilities are a critical national asset and once lost, it is unlikely or extremely costly to replicate them. This would be a difficult lesson that is not in the government's best interests to re-learn. One such lesson exists on the DDG-51 [destroyer production] restart, where the difficulty of reconstituting a closed production line of a critical component manufacturer—its main reduction gear—required the government to fund the manufacturer directly as GFE, since the US manufacturer for the reduction gear had ceased operations. Other observers, while perhaps acknowledging some of the points made above, might argue one or more of the following: foreign-made components have long been incorporated into U.S. Navy ships (and other U.S. military equipment); U.S-made components have long been incorporated into foreign warships (and other foreign military equipment); and requiring a foreign parent design for the FFG(X) to be modified to incorporate substitute U.S.-made components could increase the unit procurement cost of the FFG(X) or the FFG(X) program's acquisition risk (i.e., cost, schedule, and technical risk), or both. Current U.S. law requires certain components of U.S. Navy ships to be made by a manufacturer in the national technology and industrial base. The primary statute in question—10 U.S.C. 2534—states in part: §2534. Miscellaneous limitations on the procurement of goods other than United States goods (a) Limitation on Certain Procurements.-The Secretary of Defense may procure any of the following items only if the manufacturer of the item satisfies the requirements of subsection (b):… (3) Components for naval vessels.-(A) The following components: (i) Air circuit breakers. (ii) Welded shipboard anchor and mooring chain with a diameter of four inches or less. (iii) Vessel propellers with a diameter of six feet or more. (B) The following components of vessels, to the extent they are unique to marine applications: gyrocompasses, electronic navigation chart systems, steering controls, pumps, propulsion and machinery control systems, and totally enclosed lifeboats. (b) Manufacturer in the National Technology and Industrial Base.- (1) General requirement.-A manufacturer meets the requirements of this subsection if the manufacturer is part of the national technology and industrial base…. (3) Manufacturer of vessel propellers.-In the case of a procurement of vessel propellers referred to in subsection (a)(3)(A)(iii), the manufacturer of the propellers meets the requirements of this subsection only if- (A) the manufacturer meets the requirements set forth in paragraph (1); and (B) all castings incorporated into such propellers are poured and finished in the United States. (c) Applicability to Certain Items.- (1) Components for naval vessels.-Subsection (a) does not apply to a procurement of spare or repair parts needed to support components for naval vessels produced or manufactured outside the United States…. (4) Vessel propellers.-Subsection (a)(3)(A)(iii) and this paragraph shall cease to be effective on February 10, 1998…. (d) Waiver Authority.-The Secretary of Defense may waive the limitation in subsection (a) with respect to the procurement of an item listed in that subsection if the Secretary determines that any of the following apply: (1) Application of the limitation would cause unreasonable costs or delays to be incurred. (2) United States producers of the item would not be jeopardized by competition from a foreign country, and that country does not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country. (3) Application of the limitation would impede cooperative programs entered into between the Department of Defense and a foreign country, or would impede the reciprocal procurement of defense items under a memorandum of understanding providing for reciprocal procurement of defense items that is entered into under section 2531 of this title, and that country does not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country. (4) Satisfactory quality items manufactured by an entity that is part of the national technology and industrial base (as defined in section 2500(1) of this title) are not available. (5) Application of the limitation would result in the existence of only one source for the item that is an entity that is part of the national technology and industrial base (as defined in section 2500(1) of this title). (6) The procurement is for an amount less than the simplified acquisition threshold and simplified purchase procedures are being used. (7) Application of the limitation is not in the national security interests of the United States. (8) Application of the limitation would adversely affect a United States company…. (h) Implementation of Naval Vessel Component Limitation.-In implementing subsection (a)(3)(B), the Secretary of Defense- (1) may not use contract clauses or certifications; and (2) shall use management and oversight techniques that achieve the objective of the subsection without imposing a significant management burden on the Government or the contractor involved. (i) Implementation of Certain Waiver Authority.-(1) The Secretary of Defense may exercise the waiver authority described in paragraph (2) only if the waiver is made for a particular item listed in subsection (a) and for a particular foreign country. (2) This subsection applies to the waiver authority provided by subsection (d) on the basis of the applicability of paragraph (2) or (3) of that subsection. (3) The waiver authority described in paragraph (2) may not be delegated below the Under Secretary of Defense for Acquisition, Technology, and Logistics. (4) At least 15 days before the effective date of any waiver made under the waiver authority described in paragraph (2), the Secretary shall publish in the Federal Register and submit to the congressional defense committees a notice of the determination to exercise the waiver authority. (5) Any waiver made by the Secretary under the waiver authority described in paragraph (2) shall be in effect for a period not greater than one year, as determined by the Secretary.... In addition to 10 U.S.C. 2534, the paragraph in the annual DOD appropriations act that makes appropriations for the Navy's shipbuilding account (i.e., the Shipbuilding and Conversion, Navy, or SCN, appropriation account) has in recent years included this proviso: … Provided further , That none of the funds provided under this heading for the construction or conversion of any naval vessel to be constructed in shipyards in the United States shall be expended in foreign facilities for the construction of major components of such vessel…. 10 U.S.C. 2534 explicitly applies to certain ship components, but not others. The meaning of "major components" in the above proviso from the annual DOD appropriations act might be subject to interpretation. The issue of U.S.-made components for Navy ships is also, for somewhat different reasons, an issue for Congress in connection with the Navy's John Lewis (TAO-205) class oiler shipbuilding program. Number of FFG(X) Builders Another issue for Congress whether to build FFG(X)s at a single shipyard, as the Navy's baseline plan calls for, or at two or three shipyards. As mentioned earlier, one possible alternative to the Navy's current baseline plan for building FFG(X)s at a single shipyard would be to build them at two or three yards, including potentially one or both of the LCS shipyards. The Navy's FFG-7 class frigates, which were procured at annual rates of as high as eight ships per year, were built at three shipyards. Supporters of building FFG(X)s at two or three yards might argue that it could boost FFG(X) production from the currently planned two ships per year to four or more ships per year, substantially accelerating the date for attaining the Navy's small surface combatant force-level goal; permit the Navy to use competition (either competition for quantity at the margin, or competition for profit [i.e., Profit Related to Offers, or PRO, bidding]) to help restrain FFG(X) prices and ensure production quality and on-time deliveries; and perhaps complicate adversary defense planning by presenting potential adversaries with multiple FFG(X) designs, each with its own specific operating characteristics. Opponents of this plan might argue that it could weaken the current FFG(X) competition by offering the winner a smaller prospective number of FFG(X)s and perhaps also essentially guaranteeing the LCSs yard that they will build some number of FFG(X)s; substantially increase annual FFG(X) procurement funding requirements so as to procure four or more FFG(X)s per year rather than two per year, which in a situation of finite DOD funding could require offsetting reductions in other Navy or DOD programs; and reduce production economies of scale in the FFG(X) program by dividing FFG(X) among two or three designs, and increase downstream Navy FFG(X) operation and support (O&S) costs by requiring the Navy to maintain two or three FFG(X) logistics support systems. Potential Change in Navy Surface Force Architecture Another potential oversight issue for Congress concerns the potential impact on required numbers of FFG(X)s of a possible change in the Navy's surface force architecture. As mentioned earlier, Navy officials have stated that the new Force Structure Assessment (FSA) being conducted by the Navy may shift the Navy to a new fleet architecture that will include, among other thing, a larger proportion of small surface combatants—and, by implication, a smaller proportion of large surface combatants (i.e., cruisers and destroyers). A change in the required number of FFG(X)s could influence perspectives on the annual procurement rate for the program and the number of shipyards used to build the ships. A January 15, 2019, press report states: The Navy plans to spend this year taking the first few steps into a markedly different future, which, if it comes to pass, will upend how the fleet has fought since the Cold War. And it all starts with something that might seem counterintuitive: It's looking to get smaller. "Today, I have a requirement for 104 large surface combatants in the force structure assessment; [and] I have [a requirement for] 52 small surface combatants," said Surface Warfare Director Rear Adm. Ronald Boxall. "That's a little upside down. Should I push out here and have more small platforms? I think the future fleet architecture study has intimated 'yes,' and our war gaming shows there is value in that." An April 8, 2019, press report states that Navy discussions about the future surface fleet include the upcoming construction and fielding of the [FFG(X)] frigate, which [Vice Admiral Bill Merz, the deputy chief of naval operations for warfare systems] said is surpassing expectations already in terms of the lethality that industry can put into a small combatant. "The FSA may actually help us on, how many (destroyers) do we really need to modernize, because I think the FSA is going to give a lot of credit to the frigate—if I had a crystal ball and had to predict what the FSA was going to do, it's going to probably recommend more small surface combatants, meaning the frigate … and then how much fewer large surface combatants can we mix?" Merz said. An issue the Navy has to work through is balancing a need to have enough ships and be capable enough today, while also making decisions that will help the Navy get out of the top-heavy surface fleet and into a better balance as soon as is feasible. "You may see the evolution over time where frigates start replacing destroyers, the Large Surface Combatant [a future cruiser/destroyer-type ship] starts replacing destroyers, and in the end, as the destroyers blend away you're going to get this healthier mix of small and large surface combatants," he said—though the new FSA may shed more light on what that balance will look like and when it could be achieved. Legislative Activity for FY2020 Summary of Congressional Action on FY2020 Funding Request Table 3 summarizes congressional action on the Navy's FY2020 funding request for the LCS program. Appendix A. Navy Briefing Slides from July 25, 2017, FFG(X) Industry Day Event This appendix reprints some of the briefing slides that the Navy presented at its July 25, 2017, industry day event on the FFG(X) program, which was held in association with the Request for Information (RFI) that the Navy issued on July 25, 2017, to solicit information for better understanding potential trade-offs between cost and capability in the FFG(X) design. The reprinted slides begin on the next page. Appendix B. Competing Industry Teams This appendix presents additional background information on the industry teams competing for the FFG(X) program. February 16, 2018, Press Report About Five Competing Industry Teams A February 16, 2018, press report about the five competing industry teams reportedly competing for the FFG(X) program (i.e., the five industry teams shown in Table 1 ) stated the following: The Navy would not confirm how many groups bid for the [FFG(X)] work. At least one U.S.-German team that was not selected for a [conceptual] design contract, Atlas USA and ThyssenKrupp Marine Systems, told USNI News they had submitted for the [DD&C] competition.... During last month's Surface Navy Association [annual symposium], several shipbuilders outlined their designs for the FFG(X) competition. Austal USA Shipyard: Austal USA in Mobile, Ala. Parent Design: Independence-class [i.e., LCS-2 class] Littoral Combat Ship One of the two Littoral Combat Ship builders, Austal USA has pitched an upgunned variant of the Independence-class LCS as both a foreign military sales offering and as the answer to the Navy's upgunned small surface combatant and then frigate programs. Based on the 3,000-ton aluminum trimaran design, the hull boasts a large flight deck and space for up to 16 Mk-41 Vertical Launching System (VLS) cells. Fincantieri Marine Group Shipyard: Fincantieri Marinette Marine in Marinette, Wisc. Parent Design: Fincantieri Italian FREMM As part of the stipulations of the FFG(X) programs, a contractor can offer just one design in the competition as a prime contractor but may also support a second bid as a subcontractor. Fincantieri elected to offer its 6,700-ton Italian Fregata europea multi-missione (FREMM) design for construction in its Wisconsin Marinette Marine shipyard, as well as partner with Lockheed Martin on its Freedom-class pitch as a subcontractor. The Italian FREMM design features a 16-cell VLS as well as space for deck-launched anti-ship missiles. General Dynamics Bath Iron Works Shipyard: Bath Iron Works in Bath, Maine Parent Design: Navantia Álvaro de Bazán-class F100 Frigate The 6,000-ton air defense guided-missile frigates fitted with the Aegis Combat System have been in service for the Spanish Armada since 2002 and are the basis of the Australian Hobart-class air defense destroyers and the Norwegian Fridtjof Nansen-class frigates. The Navantia partnership with Bath is built on a previous partnership from the turn of the century. The F100 frigates were a product of a teaming agreement between BIW, Lockheed Martin and Navantia predecessor Izar as part of the Advanced Frigate Consortium from 2000. Huntington Ingalls Industries Shipyard: Ingalls Shipbuilding in Pascagoula, Miss. Parent Design: Unknown Out of the competitors involved in the competition, HII was the only company that did not present a model or a rendering of its FFG(X) at the Surface Navy Association symposium in January. A spokeswoman for the company declined to elaborate on the offering when contacted by USNI News on Friday. In the past, HII has presented a naval version of its Legend-class National Security Cutter design as a model at trade shows labeled as a "Patrol Frigate." Lockheed Martin Shipyard: Fincantieri Marinette Marine in Marinette, Wisc. Parent Design: Freedom-class [i.e., LCS-1 class] Littoral Combat Ship Of the two LCS builders, Lockheed Martin is the first to have secured a foreign military sale with its design. The company's FFG(X) bid will have much in common with its offering for the Royal Saudi Navy's 4,000-ton multi-mission surface combatant. The new Saudi ships will be built around an eight-cell Mk-41 vertical launch system and a 4D air search radar. Lockheed has pitched several other variants of the hull that include more VLS cells. "We are proud of our 15-year partnership with the U.S. Navy on the Freedom-variant Littoral Combat Ship and look forward to extending it to FFG(X)," said Joe DePietro, Lockheed Martin vice president of small combatants and ship systems in a Friday evening statement. "Our frigate design offers an affordable, low-risk answer to meeting the Navy's goals of a larger and more capable fleet." May 28, 2019, Press Report About One Industry Team Deciding to Not Submit a Bid On May 28, 2019, it was reported that one of the five industry teams that had been interested in the FFG(X) program had informed the Navy on May 23 that it had decided to not submit a bid for the program. The May 28, 2019, press report about this industry team's decision stated: Lockheed Martin won't submit a bid to compete in the design of the Navy's next-generation guided-missile (FFG(X)) frigate competition, company officials told USNI News on Tuesday [May 28]. The company elected to focus on its involvement developing the frigate combat system and other systems rather than forward its Freedom-class LCS design for the detailed design and construction contract Naval Sea Systems Command plans to issue this summer, Joe DePietro, Lockheed Martin vice president of small combatants and ship systems, told USNI News. "We reviewed the entire program and obviously, given some of the stuff that has already happened that is outside of the contract for the program—that includes the designation of our combat management system, COMBATSS 21, derived off of Aegis; we have the Mk-41 vertical launch system; the processing for our anti-submarine warfare area; advanced [electronic warfare] and platform integration," he said. "As we evaluated all of those different areas, we determined not to pursue, as a prime contractor, the FFG(X) detailed design and construction." The company informed the Navy on May 23 it would not join the other bidders for the hull design, two sources familiar with the notification told USNI News. While the design passed two Navy reviews, the company told the service it felt the Freedom design would be stretched too far to accommodate all the capabilities required, one source told USNI News…. While Lockheed is moving away from leading a frigate team, the company will be heavily involved with whoever wins. The FFG(X)'s COMBATSS-21 Combat Management System will be derived from the company's Aegis Combat System, and Lockheed Martin makes the ship's vertical launch system.	Summary:	gov_report	1,024	null	94
crs_R45956	crs_R45956_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Human Rights Developments in China1 Overview Thirty years after the June 1989 Tiananmen Square crackdown, the Chinese Communist Party (CCP) remains firmly in power. People's Republic of China (PRC) leaders have maintained political control through a mix of repression and responsiveness to some public preferences, delivering economic prosperity to many citizens, co-opting the middle and educated classes, and stoking nationalism to bolster CCP legitimacy. The party has rejected reforms that it perceives might undermine its monopoly on power, and continues to respond forcefully to signs of autonomous social organization, independent political activity, or social instability. The party is particularly wary of unsanctioned collective activity among sensitive groups, such as religious congregations, ethnic minorities, industrial workers, political dissidents, and human rights defenders and activists. Technological advances have enhanced the government's ability to monitor the activities of these groups, particularly Tibetan Buddhists and Uyghur Muslims. Some experts refer to the PRC model of governance as "responsive authoritarianism" or, in some aspects, "consultative authoritarianism." Despite the government's many repressive policies, some reports indicate that many PRC citizens may appreciate the government's focus on stability, are generally satisfied with the government's performance, and are optimistic about the future, although the depth of their support for the government is unclear. CCP General Secretary and State President Xi Jinping's anti-corruption campaign, in which over 1.5 million party members have been punished and which is viewed by many experts as partly a political purge, appears to have gained widespread popular support. For part of the leadership term of Hu Jintao, who served as CCP General Secretary and State President from 2002 to 2012, the party tolerated limited public criticism of state policies, relatively unfettered dissemination of news and exchange of opinion on social media on many social topics, and some investigative journalism and human rights advocacy around issues not seen as threatening to CCP control. After consolidating power in 2013, Xi Jinping intensified and expanded the reassertion of party control over society that began during the final years of Hu's term, and strengthened his own control over the party. In high-profile speeches, Xi has repeated the maxim, "The party exercises overall leadership over all areas of endeavor in every part of the country." In 2018, Xi backed a constitutional amendment removing the previous limit of two five-year-terms for the presidency, clearing the way for him potentially to stay in power indefinitely. Xi also has cultivated what some observers view as a cult of personality, launching far-reaching campaigns for Chinese citizens, beginning with pre-school, to study his political philosophy. Some analysts argue that Xi's efforts to bolster the party and his leadership reflect a heightened sense of insecurity rather than confidence in the CCP's ability to address internal and external threats, and that he and his supporters among the party elite have responded by choosing to "clamp down and not loosen up." New Laws and Policies Since Xi's rise to power, the PRC government has introduced laws and policies that enhance the legal authority of the party and state to counteract potential ideological, political, and human rights challenges. In 2013, the CCP issued a directive (Document No. 9) that identified seven "false ideological trends, positions, and activities," largely aimed at reining in the media and liberal academics. In 2015, the government launched a crackdown on over 250 human rights lawyers and activists, detaining many of them and convicting over a dozen of them of "disturbing social order," subversion, and other crimes. PRC authorities targeted, in particular, legal staff of the Fengrui Law Firm in Beijing, which had taken on high profile human rights cases, and revoked the firm's business license in 2018. The government has also placed greater constraints upon environmental activism, which has been a relatively vibrant area of civil society, viewing it as a threat to social stability. Since 2015, the government has enacted new laws that place further restrictions on civil society in the name of national security, authorize greater control over minority and religious groups, particularly Uyghur Muslims, and reduce the autonomy of citizens. A law regulating foreign non-governmental organizations (NGOs), which took effect in 2017, places such NGOs under the jurisdiction of the Ministry of Public Security, tightens their registration requirements, and imposes greater controls on their activities, funding, and staffing. Some international NGOs that specialize in rule of law, rights advocacy, and labor rights have suspended their work in China. A new Cybersecurity Law, which went into effect in 2017, codifies broad governmental powers to control and restrict online traffic, including for the purposes of protecting social order and national security. The law also places a greater legal burden upon private internet service providers to monitor content and assist public security organs. A new National Intelligence Law, also enacted in 2017, obliges individuals, organizations, and institutions to assist and cooperate with state intelligence efforts. In 2016, President Xi launched a policy known as "Sinicization," through which the government has taken measures to further compel China's religious practitioners and ethnic minorities to conform to Chinese culture, the socialist system, and Communist Party policies. Many analysts view this strategy as the CCP's response to what it perceives as excessive feelings of separateness and divided loyalties among some religious and ethnic groups. In April 2016, Xi presided over a conference on national religious affairs, the first Chinese president in over ten years to do so. He emphasized that the "legitimate rights of religious peoples must be protected," but also stated, "We must resolutely guard against overseas infiltrations via religious means.... " At the 19 th Party Congress in October 2017, Xi emphasized, "We will fully implement the Party's basic policy on religious affairs, uphold the principle that religions in China must be Chinese in orientation, and provide active guidance to religions so that they can adapt themselves to socialist society." The Revised Regulations on Religious Affairs, which took effect in February 2018, place an emphasis on religious and social harmony and the prevention of religious extremism and terrorism. Freedom of Speech The PRC Constitution provides for many civil and political rights, including, in Article 35, the freedoms of speech, press, assembly, association, and demonstration, and in Article 36, "freedom of religious belief." Other provisions in China's constitution and laws, however, circumscribe or condition these freedoms, and the state routinely restricts these freedoms in practice. Under Xi's leadership, the government has further closed the space for free speech and silenced independent journalists. Authorities have used criminal prosecution, civil lawsuits, and other forms of harassment and punishment to intimidate and silence journalists and authors. Since 2013, China has dropped three places, from 173 to 177 (out of 180 countries), on Reporters Without Borders' World Press Freedom Index . The recent clampdown includes not only political speech but also "vulgar, immoral, and unhealthy" content. More than 60 journalists and bloggers currently are detained in China. In July 2019, a court in Sichuan province sentenced dissident Huang Qi to 12 years in prison for "providing state secrets to foreign entities." In 1998, Huang had created "64 Tianwang," a website that reported on sensitive topics, including government corruption and human rights violations. The PRC government, which operates one of the most extensive and sophisticated internet censorship systems in the world, blocks access to over 20% of the world's most trafficked websites, according to one source. Xi also has attempted to place greater controls on the use of censorship circumvention tools, such as virtual private networks (VPNs). Although the government often tolerates the use of VPNs for some purposes, such as academic research and international business, it sometimes punishes people for providing VPN services without authorization or for using VPNs to disseminate sensitive information. The use of VPNs is not widespread, either due to a lack of interest or to inconveniences such as slower browsing speeds. New Surveillance Technologies PRC methods of social and political control are evolving to include the widespread use of sophisticated surveillance and big data technologies. Human rights groups and the U.S. Department of State argue that these methods, which have not yet been fully deployed nationally, violate rights to privacy, "mental autonomy," and the presumption of innocence, and are used to restrict freedoms of movement, association, and religion. Chinese authorities and companies have installed ubiquitous surveillance cameras, as well as facial, voice, iris, and gait recognition equipment, ostensibly to reduce crime, but likely also to track the movements of ethnic Tibetans and Uyghurs (also spelled "Uighurs") and critics of the regime. In Xinjiang, police and officials reportedly are collecting massive amounts of data and entering it into an "Integrated Joint Operations Platform" (IJOP). The IJOP reportedly flags individuals who exhibit behaviors that authorities view as deviating from the norm or potentially threatening to social stability. Many forms of lawful, peaceful, daily activities may be viewed suspiciously by authorities through the use of this law enforcement tool. The government is developing a "social credit system" that would not only rate individuals' credit worthiness but also how well they abide by rules and regulations. It involves aggregating data on individuals and "creating measures to incentivize 'trustworthy' conduct, and penalize untrustworthy' conduct." Citizens deemed untrustworthy may be banned from making purchases for travel, prevented from applying for certain types of jobs, or denied educational opportunities for their children. Examples of untrustworthy behavior include traffic violations, smoking in prohibited areas, making repeated purchases that indicate poor character, and posting untruthful news online. Labor Rights and Student Activism The PRC government, which generally restricts the operations of independent labor groups, has been carrying out a year-long suppression campaign against labor activism in Guangdong province, a center for export-oriented manufacturing, and elsewhere. Authorities have harassed, detained, and arrested labor organizers and activists, labor NGOs, social workers, and journalists who attempted to provide support to workers, and students and recent graduates from around the country who advocated for their rights. Workers have protested low pay, unsafe or unhealthy working conditions, and other violations of the China's Labor Law. Over 50 labor activists are in custody or their whereabouts are unknown. In July 2018, workers at Jasic Technology Corporation in Shenzhen attempted to form their own union and went on strike to protest the dismissal of labor organizers. Other labor unrest during this time related to fair wages and the safety and health of working conditions. Since August 2018, authorities in Beijing have attempted to silence student labor activists at Peking University in Beijing, one of the country's most prestigious institutions of higher learning. At least 21 members of the university's Marxist Society have been placed under house arrest or have disappeared, and many others have been interrogated or surveilled. Although the students are not agitating for Western-style democracy, the CCP appears to fear that the movement could help workers to independently organize and stage protests at a time when labor demonstrations are rising across the country, or ignite other forms of social activism. The government appears particularly sensitive to student movements originating in China's most elite university, a traditional incubator of political activism. China, Global Human Rights, and the United Nations In part to defend and promote acceptance of its own principles of human rights, on the global stage, China has rejected notions of universal human rights, supported principles of non-intervention, and emphasized economic development over the protection of individual civil and political rights. A member of the United Nations Human Rights Council (UNHRC) most recently in 2017-2019, China sponsored its first ever UNHRC resolutions in 2017 and 2018, both of which passed, emphasizing national sovereignty, calling for "quiet dialogue" and cooperation rather than investigations and international calls for action, and advocating for the Chinese model of state-led development. In July 2019, China sponsored a UNHRC resolution, which was adopted by a vote of 33 to 13, reaffirming the "contribution of development to the enjoyment of human all rights." In a speech given on global Human Rights Day in 2018, President Xi provided his perspective on "people-centered human rights," including a "path of human rights development with Chinese characteristics in line with its own conditions" and emphasizing the "right to subsistence and development as primary basic human rights." Religious and Ethnic Minority Policies According to Freedom House, the extent of allowed religious freedom and activity among China's estimated 350 million religious practitioners varies widely by religion, region, and ethnic group, depending on "the level of perceived threat or benefit to [Communist] party interests, as well as the discretion of local officials." The party's Sinicization policy and the 2018 amendments to the government's Regulations on Religious Affairs have affected all religions to varying degrees. New policies further restrict religious travel to foreign countries and contacts with foreign religious organizations and tighten bans on religious practice among party members and state employees and the religious education of minors. Religious venues are required to raise the national flag and teach traditional Chinese culture and "core socialist values," and online religious activities now need approval by the provincial Religious Affairs Bureau. Christians Christianity is the second-largest religion in China after Buddhism, and is growing steadily. Between an estimated 70 million and 90 million Chinese Christians worship in both officially-registered and unregistered churches. China's Siniciz ation campaign has intensified government efforts to pressure churches that are not formally approved by the government, and hundreds reportedly have been shut down in recent years. Since 2014, authorities have ordered crosses removed from nearly 4,000 churches, particularly in Z hejiang and Henan provinces, where there are large and growing Christian populations. The U.S. Commission on International Religious Freedom reported that roughly 1,000 church leaders were detained for brief periods in 2018. In Nanjing, municipal authorities launched a five-year Sinicization campaign that the U.S. Department of State characterized as aiming to incorporate "Chinese elements into church worship services, hymns and songs, clergy attire, and the architectural style of church buildings." (See Figure 1 ) In September 2018 , the PRC government and the Vatican , which have disagreed over the appointment of bishops, religious freedom, and the Vatican's diplomatic ties with Taiwan, reached a breakthrough in negotiations on diplomatic relations. According to a 2018 provisional agreement, Beijing is to recognize the Pope as the head of the Catholic Church in China, the Vatican is to recognize seven excommunicated Chinese bisho ps appointed by PRC authorities, and China is to appoint future bishops, while the Pope has veto power over their nomination. Some observers have criticized the possible arrangement, which they believe would strengthen state control over Catholics in China. In June 2019, the Vatican asked the PRC government to refrain from harassing Catholic clergy who want to remain loyal to the Pope rather than pledge allegiance to the Chinese Patriotic Catholic Association, the official organization that governs Catholics in China. Falun Gong Falun Gong combines traditional Chinese exercise movements with Buddhist and Daoist concepts and precepts formulated by its founder, Li Hongzhi. In the mid-1990s, the spiritual exercise gained tens of millions of adherents across China, including members of the Communist Party. Authorities have harshly suppressed Falun Gong beginning in 1999 after thousands of adherents gathered in Beijing to protest growing restrictions on their activities. Hundreds of thousands of practitioners who refused to renounce Falun Gong were sent to Re-education through Labor (RTL) centers until they were deemed "transformed." Since the formal dismantling of the RTL penal system in 2014, many Falun Gong detainees reportedly have been sent to "Legal Education Centers" to undergo indoctrination, or to mental health facilities. Overseas Falun Gong groups reported that in 2018, authorities arrested or harassed approximately 9,000 Falun Gong practitioners for refusing to renounce the spiritual exercise. In November 2018, judiciary officials in Changsha, Hunan province suspended the licenses of two lawyers for six months for arguing that Falun Gong was not an illegal cult and for engaging in speech that "disrupted courtroom order." Falun Gong overseas organizations claim that over 4,300 adherents have died in government custody since 1999. Some reports allege that Falun Gong practitioners held in detention facilities in China were victims of illegal organ harvestingâthe unlawful, large-scale, systematic, and nonconsensual removal of body organs for transplantationâwhile they were still alive, resulting in their deaths. The claims of organ harvesting from Falun Gong detainees are based largely upon circumstantial evidence and interviews. China reportedly has made efforts to reform its organ-transplant system, to outlaw organ trafficking and the use of organs from executed prisoners, create a national organ registry, and encourage voluntary donations. Overseas Falun Gong organizations claim that the practice of organ harvesting continues. Tibetans The Tibetan Autonomous Region (TAR) is home to about 2.7 million Tibetans out of China's total ethnic Tibetan population of 6 million. Most of China's remaining ethnic Tibetan population lives in Tibetan autonomous prefectures and counties in bordering provinces. Although some Tibetans advocate independence, the Dalai Lama, the Tibetan Buddhist spiritual leader who has lived with other Tibetan exiles in Dharamsala, India since a failed Tibetan uprising against Chinese rule in 1959, has proposed a "middle way approach," or "genuine autonomy" without independence in Tibet. China's leaders have referred to the middle way as "half independence" or "independence in disguise" and to the Dalai Lama as a "separatist" and a "wolf in monk's robes." Talks between PRC officials and representatives of the Dalai Lama on issues related to Tibetan autonomy and the return of the Dalai Lama have been stalled since 2010. Following anti-government protests in 2008, TAR authorities imposed increasingly expansive controls on Tibetan religious life and culture. These include a heightened police presence within monasteries; the ideological re-education of Tibetan Buddhist monks and nuns; the arbitrary detention and imprisonment of Tibetans; strengthened media controls; and greater restrictions on the use of the Tibetan language in schools. Authorities in some Tibetan areas, in an effort to prevent "separatist" thoughts and activities, have inspected private homes for pictures of the Dalai Lama, examined cell phones for Tibetan religious and cultural content, and monitored online posts for political speech. Since 2016, authorities have destroyed religious structures and homes at the Larung Gar and Yanchen Gar monasteries in Sichuan Province, and evicted roughly 11,500 monks and nuns. The PRC government insists that Chinese laws, and not Tibetan Buddhist religious traditions, govern the process by which lineages of Tibetan lamas are reincarnated, and that the state has the right to choose the successor to the current Dalai Lama. U.S. officials and some Members of Congress have expressed support for the right of Tibetans to choose their own religious leaders without government interference. Since 2009, 155 Tibetans within China are known to have self-immolated, many apparently to protest PRC policies or to call for the return of the Dalai Lama, and 123 are reported to have died. Uyghurs The Uyghurs are a Turkic ethnic group who practice a moderate form of Sunni Islam and live primarily in the Xinjiang Uyghur Autonomous Region (XUAR). In the past decade, PRC authorities have imposed severe restrictions on the religious and cultural activities of Uyghurs. Ethnic unrest in Xinjiang erupted in 2009, featuring Uyghur violence against Han Chinese and government reprisals. Subsequent periodic clashes between Uyghurs and Xinjiang security personnel spiked between 2013 and 2015, and PRC leaders responded with more intensive security measures, including thousands of arrests. Following the 2016 appointment of a new Communist Party Secretary to the XUAR, Chen Quanguo, and the implementation of new national security and counterterrorism laws and regulations on religious practice, Xinjiang officials stepped up security measures aimed at the Uyghur population. They included tighter restrictions on movement, the installation of thousands of neighborhood police kiosks, and ubiquitous surveillance cameras. Authorities reportedly have collected biometric data, including DNA samples, blood types, and fingerprints of Uyghur residents, for identification purposes. XUAR authorities also have implemented systems and installed phone apps to register and monitor Uyghurs' electronic devices and online activity for "extremist" content. The PRC government has instituted policies intended to assimilate Uyghurs into Han Chinese society and reduce the influences of Uyghur, Islamic, and Arabic cultures and languages. The XUAR enacted a regulation in 2017 that prohibits "expressions of extremification," including wearing face veils, growing "irregular" beards, and expanding halal practices beyond food. Authorities reportedly have banned traditional Uyghur wedding and funeral customs and Islamic names for children. Thousands of mosques in Xinjiang reportedly have been demolished as part of a "mosque rectification" or safety campaign. PRC authorities reportedly have conscripted as many as a million citizens to live temporarily in the homes of Uyghurs and other Muslim minorities to assess their hosts' loyalty to the Communist Party. Mass Internment of Uyghurs Since 2017, Xinjiang authorities have undertaken the mass internment of Turkic Muslims, some of whom may have engaged in religious and ethnic cultural practices that the government now perceives as extremist or terrorist, or as manifesting "strongly religious" views or thoughts that could lead to the spread of religious extremism or terrorism. The government has detained, without formal charges, up to an estimated 1.5 million Uyghurs out of a population of about 10.5 million, and a smaller number of ethnic Kazakhs, in ideological re-education centers. Over 400 prominent Uyghur intellectuals reportedly have been detained or their whereabouts are unknown. Many detainees reportedly are forced to express their love of the Communist Party and Xi Jinping, sing patriotic songs, and renounce or reject many of their religious beliefs and customs. According to former detainees, conditions in the centers are often crowded and unsanitary, and treatment often includes psychological pressure, forced labor, beatings, and food deprivation. PRC officials describe the Xinjiang camps as "vocational education and training centers" in which "trainees" study Chinese, take courses on PRC law, learn job skills, and undergo "de-extremization" or are "cured of ideological infection." The government states that the centers "have never made any attempts to have the trainees change their religious beliefs." In July 2019, some Chinese officials claimed that most detainees had "returned to society" and to their families, while in August 2019, other officials stated that the "only 500,000 Uyghurs" were held in 68 camps. Some Uyghurs living abroad, however, claim that they still have not heard from missing relatives in Xinjiang. Some reports indicate that many of those released from re-education centers have been placed under house arrest or in state-run factories, and continue to be held under close political supervision. Hui Muslims The Hui, another Muslim minority group in China who number around 11 million, largely have practiced their faith with less government interference. The Hui are more geographically dispersed and culturally assimilated than the Uyghurs, are generally physically indistinguishable from Hans, and do not speak a non-Chinese language. China's new religious policies have affected the Hui and other Muslims outside of Xinjiang, but less severely than the Uyghurs. Nonetheless, authorities in the Ningxia Hui Autonomous Region have ordered mosques to be "Sinicized"âminarets have been taken down, onion domes have been replaced by traditional Chinese roofs, and Islamic motifs and Arabic writings have been removed. Officials have cancelled Arabic classes in some mosques and private schools, and calls to prayer have been banned in Yinchuan, the capital of Ningxia. In Beijing, authorities have mandated that Arabic signage over Halal food shops be removed. In August 2018, thousands of Hui Muslims gathered in front of a newly-built mosque in Weizhou, Ningxia, in an attempt to block the government's announced demolition of the building due in part to its Middle Eastern architectural style. While the government backed down on its threat to destroy the mosque, PRC anticorruption investigators have begun investigating local Hui officials who they say have "strayed from the party's leadership and political discipline in religious matters." U.S. Efforts to Advance Human Rights in China Human Rights and U.S.-China Relations Human rights conditions in the PRC have been a recurring point of friction and source of mutual mistrust in U.S.-China relations, particularly since the Tiananmen Square crackdown in 1989 and the end of the Cold War in 1991. China's persistent human rights violations, as well as its authoritarian political system, often have caused U.S. policymakers and/or the American public to view the PRC government with greater suspicion. Chinese officials may in turn view expressed human rights concerns by U.S. policymakers, and the broader U.S. democracy promotion agenda, as tools meant to undermine CCP rule and slow China's rise. Frictions over human rights may affect other issues in the relationship, including those related to economics and security. In engaging China on human rights issues, the United States has often focused on China's inability or unwillingness to respect universal civil and political rights, while China prefers to tout its progress in delivering economic development and well-being, and advancing social rights for its people, including ethnic minorities. U.S. Policy Evolution In the period following the 1989 Tiananmen Square crackdown, the United States sought to leverage China's desire for "most favored nation" (MFN) trade status by linking its annual renewal to improvements in human rights conditions in China. The Clinton Administration ultimately abandoned this direct linkage, however, in favor of a general policy of engagement with China that it hoped would contribute to improved respect for human rights and greater political freedoms for the Chinese people. President Bill Clinton, in his 1999 State of the Union Address, summed up the long-term aspirations of this approach, stating, "It's important not to isolate China. The more we bring China into the world, the more the world will bring change and freedom to China." In the following more than two decades, U.S. Administrations and Congresses employed broadly similar strategies for promoting human rights in China, combining efforts to deepen trade and other forms of engagement to help create conditions for positive change, on the one hand, with specific human rights promotion efforts, on the other. Presidents Bill Clinton, George W. Bush, and Barack Obama held that U.S. engagement with China and encouraging China to respect international norms, including on human rights, would result in mutual benefits, including China's own success and stability. Policy tools for promoting human rights have included open censure of China; quiet diplomacy, such as closed-door discussions; congressional investigations, hearings, legislation, statements, letters, and visits; funding for human rights and democracy foreign assistance programs in the PRC; congressionally-mandated reports on human rights in China; support for human rights defenders and pro-democracy groups in China, Hong Kong, and the United States; economic sanctions; efforts to promote Internet freedom; support for international broadcasting; and coordination of international pressure, including through multilateral organizations. In addition, some U.S. officials and Members of Congress have regularly met with Chinese dissidents and with the Dalai Lama and exiled Tibetan officials, in both Washington, D.C. and Dharamsala, India, where the headquarters of the Central Tibetan Administration (sometimes referred to as the Tibetan government-in-exile) is located. Beijing opposes such meetings as encouraging Tibetan independence and contravening the U.S. policy that Tibet is part of China. Trump Administration Policy In recent years, policy analysts have increasingly debated the effectiveness of aspects of the U.S. engagement strategy with China, including, in light of China's deepening domestic political repression, its results in securing improvements in Beijing's respect for human rights and political freedoms. Under President Trump, U.S. policy documents have declared that China's international integration has not liberalized its political or economic system, and the United States has begun to place less emphasis on engagement. The Trump Administration has referred to China as a "revisionist power," a strategic competitor, or even an adversary, and curtailed some government-to-government cooperation. Some critics of the Administration's China policy argue that U.S. effectiveness and credibility on human rights is strengthened when the United States works with allies and within international organizations to promote human rights and democracy globally and in China, while maintaining openness to engaging China's government and society, where appropriate. A U.S. policy approach that is less concerned with maintaining broad engagement with China may afford greater space and opportunity to push the PRC on human rights concerns. Trump Administration efforts in this area arguably have been uneven to date, with some commentators criticizing the Administration for inconsistency in its commitment to human rights issues as it pursues other priorities with China, particularly on trade. More broadly, the Administration has placed less emphasis on existing multilateral institutions and on multilateral diplomacy in its foreign policy, including with regard to human rights. The forcefulness of the Administration's public rhetoric on PRC human rights issues has differed between the President and some senior Administration officials. Since 2018, some Administration officials have used increasingly sharp language on China's human rights abuses. Vice President Mike Pence's October 2018 speech on the Administration's China policy, which was critical of China across a broad set of policy areas, cited concern over China's "control and repression of its own people" and referenced "an unparalleled surveillance state." At the announcement of the Department of State's 2019 release of its annual report on human rights practices around the world, Secretary of State Michael Pompeo stated that China was in a "league of its own" in the area of human rights violations. In July 2019, Pompeo described the situation in Xinjiang in particular as "one of the worst human rights crises of our time," and "the stain of the century." President Trump generally has not publicly raised the issue of human rights in China and reportedly remains focused largely on trade issues. In July 2019, President Trump met with survivors of religious persecution around the world, including four individuals from China: a Uyghur Muslim, a Tibetan Buddhist, a Christian, and a Falun Gong practitioner. In September 2019 at a United Nations event on religious freedom, the President issued a broad statement calling for an end to religious persecution, but did not mention religious freedom issues in China specifically; his later remarks to the U.N. General Assembly, as they related to China, emphasized trade issues. The Trump Administration has not attempted to restart the U.S.-China Human Rights Dialogue, which Beijing suspended in 2016. Many other operative elements of U.S. human rights policy toward China, however, reflect continuity with prior administrations; many are statutorily mandated and/or continue to be funded by Congress (as described below). The State Department's most recent "integrated country strategy" for China, released in August 2018, includes an objective to "advocate for and urge China to adhere to the rule of law, respect the individual rights and dignity of all its citizens, and ease restrictions on the free flow of information and ideas to advance civil society." Policy Options and Tools Human Rights and Democracy Foreign Assistance Programs Since 2001, U.S. foreign assistance programs have sought to promote human rights, civil society, democracy, rule of law, and Internet freedom in China. In addition, some programs also have addressed environmental and rule of law issues and focused upon sustainable development, environmental conservation, and preservation of indigenous culture in Tibetan areas of China. U.S.-funded programs do not provide assistance to PRC government entities or directly to Chinese non-governmental organizations (NGOs), and are predominantly awarded in the form of grants to U.S.-based NGOs and academic institutions. The State Department's Bureau of Democracy, Human Rights, and Labor (DRL) has generally administered programs to promote human rights and democracy in China, while the U.S. Agency for International Development (USAID) has administered the aforementioned programs in Tibet and some additional programs in the areas of the environment and rule of law. DRL programs across China have generally supported rule of law development, civil society, labor rights, religious freedom, government transparency, public participation in government, and Internet freedom. Between 2001 and 2018, the U.S. government provided approximately $241 million for DRL programs in China, $99 million for Tibetan programs, and $72 million for environmental and rule of law efforts in the PRC (see Figure 2 above). Since 2015, Congress has appropriated additional funds for Tibetan communities in India and Nepal ($6 million in FY2019). Since 2018, Congress also has provided $3 million annually to strengthen institutions and governance in the Tibetan exile communities. National Endowment for Democracy Grants Established in 1983, the National Endowment for Democracy (NED) is a private, nonprofit foundation "dedicated to the growth and strengthening of democratic institutions around the world." Funded primarily by an annual congressional appropriation, NED has played an active role in promoting human rights and democracy in China since the mid-1980s. A grant-making institution, NEDÂ has supported projects in China carried out by grantees that include its four affiliated organizations; Chinese, Tibetan, and Uyghur human rights and democracy groups and media platforms based in the United States and Hong Kong; and a small number of NGOs based in mainland China. Program areas have included efforts related to prisoners of conscience; rights defenders; freedom of expression; civil society; the rule of law; public interest law; Internet freedom; religious freedom; promoting understanding of Tibetan, Uyghur, and other ethnic concerns in China; government accountability and transparency; political participation; labor rights; public policy analysis and debate; and rural land rights, among others. NED currently describes China as a priority country in Asia in light of the "significant and systemic challenges to democratization" there. NED grants for China (including Tibet and Hong Kong) totaled approximately $7 million in 2017 and $6.5 million in 2018. This support is provided using NED's regular congressional appropriations. International Broadcasting The U.S. Agency for Global Media (USAGM; formerly the Broadcasting Board of Governors) utilizes international broadcasting and media activities to "advance the broad foreign policy priorities of the United States, including the universal values of freedom and democracy." It targets resources to areas "most impacted by state-sponsored disinformation" (as well as by violent extremism), and identifies people in China as a key audience. USAGM-supported Voice of America (VOA) and Radio Free Asia (RFA) provide external sources of independent or alternative news and opinion to Chinese audiences. The two media services play small but unique roles in providing U.S.-style broadcasting, journalism, and public debate in China. VOA, which offers mainly U.S. and international news, and RFA, which serves as an uncensored source of domestic Chinese news, often report on important world and local events, including human rights issues. The PRC government regularly jams and blocks VOA and RFA Mandarin, Cantonese, Tibetan, and Uyghur language radio and television broadcasts and Internet sites, while VOA English services generally receive less interference. VOA and RFA have made efforts to enhance their Internet services, develop circumvention or counter-censorship technologies, and provide access to their programs on social media platforms. USAGM increasingly emphasizes digital and social media content in China, arguing that these are "effective channels for information-seeking people to evade government firewalls." The agency describes RFA Uyghur as the "only Uyghur language news outlet for the Xinjiang Uyghur Autonomous Region," and states that the outlet's social media content is popular among the Uyghur exile community, which shares the content with Uyghurs in Xinjiang. Sanctions China is subject to some U.S. economic sanctions in response to its human rights conditions. The sanctions' effects have been limited, however, and arguably largely symbolic. Many sanctions imposed on China as a response to the 1989 Tiananmen crackdown (including restrictions on foreign aid, military and government exchanges, and export licenses) are no longer in effect. Remaining Tiananmen-related sanctions suspend Overseas Private Investment Corporation programs and restrict export licenses for U.S. Munitions List (USML) items and crime control equipment. The United States also limits its support for international financial institution (IFI) lending to China for human rights reasons. For example, U.S. representatives to IFIs may by law support projects in Tibet only if they do not encourage the migration and settlement of non-Tibetans into Tibet or the transfer of Tibetan-owned properties to non-Tibetans, due in part to the potential for such activities to erode Tibetan culture and identity. Relatedly, China also has been subject to potential nonhumanitarian and nontrade-related foreign assistance restrictions as a result of its State Department designation as a "Tier 3" (worst) country for combating human trafficking in recent years. Sanctions on Individuals The Global Magnitsky Human Rights Accountability Act, enacted as part of the National Defense Authorization Act for FY2017 ( P.L. 114-328 , Subtitle F, Title XII), authorizes the President to impose both economic sanctions and visa denials or revocations against foreign individuals responsible for "gross violations of internationally recognized human rights." The Trump Administration has thus far sanctioned one Chinese security official, Gao Yan, pursuant to the Global Magnitsky Act. According to the Treasury Department, Gao headed the Public Security Bureau branch in Beijing at which human rights activist Cao Shunli was held and denied medical treatment; Cao died in March 2014. The executive branch may also utilize Section 7031(c) of the Department of State, Foreign Operations, and Related Appropriations Act, 2019 (Division F of P.L. 116-6 ) or the broad authorities under Section 212 of the Immigration and Nationality Act (INA) to impose visa sanctions on individuals responsible for human rights abuses. Numerous human rights advocates and Members of Congress have called on the Trump Administration to sanction Chinese government officials responsible for the human rights abuses occurring in Xinjiang; many have argued for Global Magnitsky sanctions against XUAR Party Secretary Chen Quanguo, in particular. Press reports suggest the Trump Administration has been considering sanctions under the Global Magnitsky Act against Xinjiang officials, but has delayed actions in the midst of the U.S.-China bilateral trade negotiations. In October 2019, the State Department announced visa restrictions against an unspecified number of "Chinese government and Communist Party officials who are believed to be responsible for, or complicit in, the detention or abuse of Uighurs, Kazakhs, or other members of Muslim minority groups" in Xinjiang, and stated that the officials' family members may also be subject to visa restrictions. Designations and Actions Pursuant to the International Religious Freedom Act The International Religious Freedom Act of 1998 (IRFA, P.L. 105-292 ) mandates that the President produce an annual report on the status of religious freedom in countries around the world and identify "countries of particular concern" (CPCs) for "particularly severe violations of religious freedom," and prescribes punitive actions in response to such violations. The law provides a menu of potential sanctions against CPCs, such as foreign assistance restrictions or loan prohibitions, but provides the executive branch with significant discretion in determining which, if any, actions to take. U.S. reports under IRFA have been consistently critical of China's religious freedom conditions, and the U.S. government has designated China as a CPC in each of its annual designation announcements since IRFA's enactment. Consistent with prior administrations, the Trump Administration has to date chosen not to take new actions against the Chinese government pursuant to IRFA and instead referred to existing, ongoing sanctions to satisfy the law's requirements. These existing sanctions relate to the above-mentioned restrictions on exports of crime control and detection equipment adopted following the Tiananmen crackdown. Visa Sanctions Pursuant to the Reciprocal Access to Tibet Act The Reciprocal Access to Tibet Act (RATA, P.L. 115-330 ), enacted in December 2018, requires that, absent a waiver by the Secretary of State, no individual determined to be "substantially involved in the formulation or execution of policies related to access for foreigners to Tibetan areas" may receive a visa or be admitted to the United States while PRC policies restricting foreigners' access to Tibetan areas of China remain in place. The State Department is to report to Congress annually for five years following RATA's enactment, identifying the individuals who had visas denied or revoked pursuant to the law, and, "to the extent practicable," provide a broader list of the "substantially involved" individuals. Export Controls On October 7, 2019, the U.S. Department of Commerce announced that it would add 28 PRC entities to the Bureau of Industry and Security (BIS) "entity list" under the Export Administration Regulations (EAR), asserting that the entities "have been implicated in human rights violations and abuses in the implementation of China's campaign of repression, mass arbitrary detention, and high-technology surveillance against Uighurs, Kazakhs, and other members of Muslim minority groups in the XUAR." The entities to be added include eight technology companies, the XUAR Public Security Bureau (PSB) and eighteen subordinate PSBs, and the PSB-affiliated Xinjiang Police College. The action imposes licensing requirements prior to the sale or transfer of U.S. items to these entities. For each entity, the Commerce Department indicated that there would be a presumption of license denial for all items subject to the EAR, with the exception of certain categories to be subject to a case-by-case review. Secretary of Commerce Wilbur Ross stated that adding the entities would "ensure that our technologies, fostered in an environment of individual liberty and free enterprise, are not used to repress defenseless minority populations." Previously, Members of Congress had written to Secretary Ross and other senior Administration officials urging them to expand the entity list "to ensure that U.S. companies are not assisting, directly or indirectly, in creating the vast civilian surveillance or big-data predictive policing systems being used in [Xinjiang]." Some observers believe the decision could result in significant adverse business impacts for some of the Chinese technology companies. Multilateral Diplomacy The United States also has engaged in multilateral diplomacy to advocate for improved human rights conditions in China. For example, in March 2016, the United States joined 11 other countries to deliver a joint statement at the United Nations Human Rights Council criticizing China's human rights record and calling on China to uphold its human rights commitments. The Trump Administration has curtailed U.S. participation in some multilateral human rights organizations, most prominently by announcing the U.S. withdrawal from the UNHRC in June 2018, and arguably has placed less emphasis on multilateral diplomacy. The United States reportedly did not sign a 2018 joint letter by 15 foreign ambassadors in Beijing requesting a meeting with XUAR Party Secretary Chen Quanguo to raise concerns over human rights abuses in Xinjiang. On July 8, 2019, 22 nations issued a joint statement to the UNHRC president and the U.N. High Commissioner on Human Rights calling on China to "refrain from the arbitrary detention and restrictions on freedom of movement of Uighurs, and other Muslim and minority communities in Xinjiang," and to "allow meaningful access to Xinjiang for independent international observers." The statement, which was signed by numerous countries that are not current members of the UNHRC, was not signed by the United States. The Trump Administration has sought some new venues through which to issue multilateral statements on certain PRC human rights issues, particularly on religious freedom. The State Department convened a Ministerial to Advance Religious Freedom in July 2018 and July 2019, with participation from foreign delegations and civil society leaders, and each time released a joint statement expressing concern over religious freedom conditions in China. The United States was joined in the 2019 statement by Canada, Kosovo, the Marshall Islands, and the United Kingdom. More broadly, the Administration is also working to establish an "International Religious Freedom Alliance" comprised of governments "dedicated to confronting religious persecution around the world," presumably including in China. Despite its withdrawal from the UNHRC, the United States has also continued to participate in some Council activities in its capacity as a U.N. member state, such as the Universal Periodic Review (UPR) process, including China's most recent UPR. During China's review in November 2018, over one dozen countries, including the United States, raised questions and concerns about China's treatment of Tibetans, Uyghurs, and other minorities, as well as over freedom of religion in China. The United States made four recommendations, including for China to "abolish all forms of arbitrary detention, including internment camps in Xinjiang, and immediately release the hundreds of thousands, possibly millions, of individuals detained in these camps." Summary:	null	96	49,476	49,478	49,478	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Human Rights Developments in China1 Overview Thirty years after the June 1989 Tiananmen Square crackdown, the Chinese Communist Party (CCP) remains firmly in power. People's Republic of China (PRC) leaders have maintained political control through a mix of repression and responsiveness to some public preferences, delivering economic prosperity to many citizens, co-opting the middle and educated classes, and stoking nationalism to bolster CCP legitimacy. The party has rejected reforms that it perceives might undermine its monopoly on power, and continues to respond forcefully to signs of autonomous social organization, independent political activity, or social instability. The party is particularly wary of unsanctioned collective activity among sensitive groups, such as religious congregations, ethnic minorities, industrial workers, political dissidents, and human rights defenders and activists. Technological advances have enhanced the government's ability to monitor the activities of these groups, particularly Tibetan Buddhists and Uyghur Muslims. Some experts refer to the PRC model of governance as "responsive authoritarianism" or, in some aspects, "consultative authoritarianism." Despite the government's many repressive policies, some reports indicate that many PRC citizens may appreciate the government's focus on stability, are generally satisfied with the government's performance, and are optimistic about the future, although the depth of their support for the government is unclear. CCP General Secretary and State President Xi Jinping's anti-corruption campaign, in which over 1.5 million party members have been punished and which is viewed by many experts as partly a political purge, appears to have gained widespread popular support. For part of the leadership term of Hu Jintao, who served as CCP General Secretary and State President from 2002 to 2012, the party tolerated limited public criticism of state policies, relatively unfettered dissemination of news and exchange of opinion on social media on many social topics, and some investigative journalism and human rights advocacy around issues not seen as threatening to CCP control. After consolidating power in 2013, Xi Jinping intensified and expanded the reassertion of party control over society that began during the final years of Hu's term, and strengthened his own control over the party. In high-profile speeches, Xi has repeated the maxim, "The party exercises overall leadership over all areas of endeavor in every part of the country." In 2018, Xi backed a constitutional amendment removing the previous limit of two five-year-terms for the presidency, clearing the way for him potentially to stay in power indefinitely. Xi also has cultivated what some observers view as a cult of personality, launching far-reaching campaigns for Chinese citizens, beginning with pre-school, to study his political philosophy. Some analysts argue that Xi's efforts to bolster the party and his leadership reflect a heightened sense of insecurity rather than confidence in the CCP's ability to address internal and external threats, and that he and his supporters among the party elite have responded by choosing to "clamp down and not loosen up." New Laws and Policies Since Xi's rise to power, the PRC government has introduced laws and policies that enhance the legal authority of the party and state to counteract potential ideological, political, and human rights challenges. In 2013, the CCP issued a directive (Document No. 9) that identified seven "false ideological trends, positions, and activities," largely aimed at reining in the media and liberal academics. In 2015, the government launched a crackdown on over 250 human rights lawyers and activists, detaining many of them and convicting over a dozen of them of "disturbing social order," subversion, and other crimes. PRC authorities targeted, in particular, legal staff of the Fengrui Law Firm in Beijing, which had taken on high profile human rights cases, and revoked the firm's business license in 2018. The government has also placed greater constraints upon environmental activism, which has been a relatively vibrant area of civil society, viewing it as a threat to social stability. Since 2015, the government has enacted new laws that place further restrictions on civil society in the name of national security, authorize greater control over minority and religious groups, particularly Uyghur Muslims, and reduce the autonomy of citizens. A law regulating foreign non-governmental organizations (NGOs), which took effect in 2017, places such NGOs under the jurisdiction of the Ministry of Public Security, tightens their registration requirements, and imposes greater controls on their activities, funding, and staffing. Some international NGOs that specialize in rule of law, rights advocacy, and labor rights have suspended their work in China. A new Cybersecurity Law, which went into effect in 2017, codifies broad governmental powers to control and restrict online traffic, including for the purposes of protecting social order and national security. The law also places a greater legal burden upon private internet service providers to monitor content and assist public security organs. A new National Intelligence Law, also enacted in 2017, obliges individuals, organizations, and institutions to assist and cooperate with state intelligence efforts. In 2016, President Xi launched a policy known as "Sinicization," through which the government has taken measures to further compel China's religious practitioners and ethnic minorities to conform to Chinese culture, the socialist system, and Communist Party policies. Many analysts view this strategy as the CCP's response to what it perceives as excessive feelings of separateness and divided loyalties among some religious and ethnic groups. In April 2016, Xi presided over a conference on national religious affairs, the first Chinese president in over ten years to do so. He emphasized that the "legitimate rights of religious peoples must be protected," but also stated, "We must resolutely guard against overseas infiltrations via religious means.... " At the 19 th Party Congress in October 2017, Xi emphasized, "We will fully implement the Party's basic policy on religious affairs, uphold the principle that religions in China must be Chinese in orientation, and provide active guidance to religions so that they can adapt themselves to socialist society." The Revised Regulations on Religious Affairs, which took effect in February 2018, place an emphasis on religious and social harmony and the prevention of religious extremism and terrorism. Freedom of Speech The PRC Constitution provides for many civil and political rights, including, in Article 35, the freedoms of speech, press, assembly, association, and demonstration, and in Article 36, "freedom of religious belief." Other provisions in China's constitution and laws, however, circumscribe or condition these freedoms, and the state routinely restricts these freedoms in practice. Under Xi's leadership, the government has further closed the space for free speech and silenced independent journalists. Authorities have used criminal prosecution, civil lawsuits, and other forms of harassment and punishment to intimidate and silence journalists and authors. Since 2013, China has dropped three places, from 173 to 177 (out of 180 countries), on Reporters Without Borders' World Press Freedom Index . The recent clampdown includes not only political speech but also "vulgar, immoral, and unhealthy" content. More than 60 journalists and bloggers currently are detained in China. In July 2019, a court in Sichuan province sentenced dissident Huang Qi to 12 years in prison for "providing state secrets to foreign entities." In 1998, Huang had created "64 Tianwang," a website that reported on sensitive topics, including government corruption and human rights violations. The PRC government, which operates one of the most extensive and sophisticated internet censorship systems in the world, blocks access to over 20% of the world's most trafficked websites, according to one source. Xi also has attempted to place greater controls on the use of censorship circumvention tools, such as virtual private networks (VPNs). Although the government often tolerates the use of VPNs for some purposes, such as academic research and international business, it sometimes punishes people for providing VPN services without authorization or for using VPNs to disseminate sensitive information. The use of VPNs is not widespread, either due to a lack of interest or to inconveniences such as slower browsing speeds. New Surveillance Technologies PRC methods of social and political control are evolving to include the widespread use of sophisticated surveillance and big data technologies. Human rights groups and the U.S. Department of State argue that these methods, which have not yet been fully deployed nationally, violate rights to privacy, "mental autonomy," and the presumption of innocence, and are used to restrict freedoms of movement, association, and religion. Chinese authorities and companies have installed ubiquitous surveillance cameras, as well as facial, voice, iris, and gait recognition equipment, ostensibly to reduce crime, but likely also to track the movements of ethnic Tibetans and Uyghurs (also spelled "Uighurs") and critics of the regime. In Xinjiang, police and officials reportedly are collecting massive amounts of data and entering it into an "Integrated Joint Operations Platform" (IJOP). The IJOP reportedly flags individuals who exhibit behaviors that authorities view as deviating from the norm or potentially threatening to social stability. Many forms of lawful, peaceful, daily activities may be viewed suspiciously by authorities through the use of this law enforcement tool. The government is developing a "social credit system" that would not only rate individuals' credit worthiness but also how well they abide by rules and regulations. It involves aggregating data on individuals and "creating measures to incentivize 'trustworthy' conduct, and penalize untrustworthy' conduct." Citizens deemed untrustworthy may be banned from making purchases for travel, prevented from applying for certain types of jobs, or denied educational opportunities for their children. Examples of untrustworthy behavior include traffic violations, smoking in prohibited areas, making repeated purchases that indicate poor character, and posting untruthful news online. Labor Rights and Student Activism The PRC government, which generally restricts the operations of independent labor groups, has been carrying out a year-long suppression campaign against labor activism in Guangdong province, a center for export-oriented manufacturing, and elsewhere. Authorities have harassed, detained, and arrested labor organizers and activists, labor NGOs, social workers, and journalists who attempted to provide support to workers, and students and recent graduates from around the country who advocated for their rights. Workers have protested low pay, unsafe or unhealthy working conditions, and other violations of the China's Labor Law. Over 50 labor activists are in custody or their whereabouts are unknown. In July 2018, workers at Jasic Technology Corporation in Shenzhen attempted to form their own union and went on strike to protest the dismissal of labor organizers. Other labor unrest during this time related to fair wages and the safety and health of working conditions. Since August 2018, authorities in Beijing have attempted to silence student labor activists at Peking University in Beijing, one of the country's most prestigious institutions of higher learning. At least 21 members of the university's Marxist Society have been placed under house arrest or have disappeared, and many others have been interrogated or surveilled. Although the students are not agitating for Western-style democracy, the CCP appears to fear that the movement could help workers to independently organize and stage protests at a time when labor demonstrations are rising across the country, or ignite other forms of social activism. The government appears particularly sensitive to student movements originating in China's most elite university, a traditional incubator of political activism. China, Global Human Rights, and the United Nations In part to defend and promote acceptance of its own principles of human rights, on the global stage, China has rejected notions of universal human rights, supported principles of non-intervention, and emphasized economic development over the protection of individual civil and political rights. A member of the United Nations Human Rights Council (UNHRC) most recently in 2017-2019, China sponsored its first ever UNHRC resolutions in 2017 and 2018, both of which passed, emphasizing national sovereignty, calling for "quiet dialogue" and cooperation rather than investigations and international calls for action, and advocating for the Chinese model of state-led development. In July 2019, China sponsored a UNHRC resolution, which was adopted by a vote of 33 to 13, reaffirming the "contribution of development to the enjoyment of human all rights." In a speech given on global Human Rights Day in 2018, President Xi provided his perspective on "people-centered human rights," including a "path of human rights development with Chinese characteristics in line with its own conditions" and emphasizing the "right to subsistence and development as primary basic human rights." Religious and Ethnic Minority Policies According to Freedom House, the extent of allowed religious freedom and activity among China's estimated 350 million religious practitioners varies widely by religion, region, and ethnic group, depending on "the level of perceived threat or benefit to [Communist] party interests, as well as the discretion of local officials." The party's Sinicization policy and the 2018 amendments to the government's Regulations on Religious Affairs have affected all religions to varying degrees. New policies further restrict religious travel to foreign countries and contacts with foreign religious organizations and tighten bans on religious practice among party members and state employees and the religious education of minors. Religious venues are required to raise the national flag and teach traditional Chinese culture and "core socialist values," and online religious activities now need approval by the provincial Religious Affairs Bureau. Christians Christianity is the second-largest religion in China after Buddhism, and is growing steadily. Between an estimated 70 million and 90 million Chinese Christians worship in both officially-registered and unregistered churches. China's Siniciz ation campaign has intensified government efforts to pressure churches that are not formally approved by the government, and hundreds reportedly have been shut down in recent years. Since 2014, authorities have ordered crosses removed from nearly 4,000 churches, particularly in Z hejiang and Henan provinces, where there are large and growing Christian populations. The U.S. Commission on International Religious Freedom reported that roughly 1,000 church leaders were detained for brief periods in 2018. In Nanjing, municipal authorities launched a five-year Sinicization campaign that the U.S. Department of State characterized as aiming to incorporate "Chinese elements into church worship services, hymns and songs, clergy attire, and the architectural style of church buildings." (See Figure 1 ) In September 2018 , the PRC government and the Vatican , which have disagreed over the appointment of bishops, religious freedom, and the Vatican's diplomatic ties with Taiwan, reached a breakthrough in negotiations on diplomatic relations. According to a 2018 provisional agreement, Beijing is to recognize the Pope as the head of the Catholic Church in China, the Vatican is to recognize seven excommunicated Chinese bisho ps appointed by PRC authorities, and China is to appoint future bishops, while the Pope has veto power over their nomination. Some observers have criticized the possible arrangement, which they believe would strengthen state control over Catholics in China. In June 2019, the Vatican asked the PRC government to refrain from harassing Catholic clergy who want to remain loyal to the Pope rather than pledge allegiance to the Chinese Patriotic Catholic Association, the official organization that governs Catholics in China. Falun Gong Falun Gong combines traditional Chinese exercise movements with Buddhist and Daoist concepts and precepts formulated by its founder, Li Hongzhi. In the mid-1990s, the spiritual exercise gained tens of millions of adherents across China, including members of the Communist Party. Authorities have harshly suppressed Falun Gong beginning in 1999 after thousands of adherents gathered in Beijing to protest growing restrictions on their activities. Hundreds of thousands of practitioners who refused to renounce Falun Gong were sent to Re-education through Labor (RTL) centers until they were deemed "transformed." Since the formal dismantling of the RTL penal system in 2014, many Falun Gong detainees reportedly have been sent to "Legal Education Centers" to undergo indoctrination, or to mental health facilities. Overseas Falun Gong groups reported that in 2018, authorities arrested or harassed approximately 9,000 Falun Gong practitioners for refusing to renounce the spiritual exercise. In November 2018, judiciary officials in Changsha, Hunan province suspended the licenses of two lawyers for six months for arguing that Falun Gong was not an illegal cult and for engaging in speech that "disrupted courtroom order." Falun Gong overseas organizations claim that over 4,300 adherents have died in government custody since 1999. Some reports allege that Falun Gong practitioners held in detention facilities in China were victims of illegal organ harvestingâthe unlawful, large-scale, systematic, and nonconsensual removal of body organs for transplantationâwhile they were still alive, resulting in their deaths. The claims of organ harvesting from Falun Gong detainees are based largely upon circumstantial evidence and interviews. China reportedly has made efforts to reform its organ-transplant system, to outlaw organ trafficking and the use of organs from executed prisoners, create a national organ registry, and encourage voluntary donations. Overseas Falun Gong organizations claim that the practice of organ harvesting continues. Tibetans The Tibetan Autonomous Region (TAR) is home to about 2.7 million Tibetans out of China's total ethnic Tibetan population of 6 million. Most of China's remaining ethnic Tibetan population lives in Tibetan autonomous prefectures and counties in bordering provinces. Although some Tibetans advocate independence, the Dalai Lama, the Tibetan Buddhist spiritual leader who has lived with other Tibetan exiles in Dharamsala, India since a failed Tibetan uprising against Chinese rule in 1959, has proposed a "middle way approach," or "genuine autonomy" without independence in Tibet. China's leaders have referred to the middle way as "half independence" or "independence in disguise" and to the Dalai Lama as a "separatist" and a "wolf in monk's robes." Talks between PRC officials and representatives of the Dalai Lama on issues related to Tibetan autonomy and the return of the Dalai Lama have been stalled since 2010. Following anti-government protests in 2008, TAR authorities imposed increasingly expansive controls on Tibetan religious life and culture. These include a heightened police presence within monasteries; the ideological re-education of Tibetan Buddhist monks and nuns; the arbitrary detention and imprisonment of Tibetans; strengthened media controls; and greater restrictions on the use of the Tibetan language in schools. Authorities in some Tibetan areas, in an effort to prevent "separatist" thoughts and activities, have inspected private homes for pictures of the Dalai Lama, examined cell phones for Tibetan religious and cultural content, and monitored online posts for political speech. Since 2016, authorities have destroyed religious structures and homes at the Larung Gar and Yanchen Gar monasteries in Sichuan Province, and evicted roughly 11,500 monks and nuns. The PRC government insists that Chinese laws, and not Tibetan Buddhist religious traditions, govern the process by which lineages of Tibetan lamas are reincarnated, and that the state has the right to choose the successor to the current Dalai Lama. U.S. officials and some Members of Congress have expressed support for the right of Tibetans to choose their own religious leaders without government interference. Since 2009, 155 Tibetans within China are known to have self-immolated, many apparently to protest PRC policies or to call for the return of the Dalai Lama, and 123 are reported to have died. Uyghurs The Uyghurs are a Turkic ethnic group who practice a moderate form of Sunni Islam and live primarily in the Xinjiang Uyghur Autonomous Region (XUAR). In the past decade, PRC authorities have imposed severe restrictions on the religious and cultural activities of Uyghurs. Ethnic unrest in Xinjiang erupted in 2009, featuring Uyghur violence against Han Chinese and government reprisals. Subsequent periodic clashes between Uyghurs and Xinjiang security personnel spiked between 2013 and 2015, and PRC leaders responded with more intensive security measures, including thousands of arrests. Following the 2016 appointment of a new Communist Party Secretary to the XUAR, Chen Quanguo, and the implementation of new national security and counterterrorism laws and regulations on religious practice, Xinjiang officials stepped up security measures aimed at the Uyghur population. They included tighter restrictions on movement, the installation of thousands of neighborhood police kiosks, and ubiquitous surveillance cameras. Authorities reportedly have collected biometric data, including DNA samples, blood types, and fingerprints of Uyghur residents, for identification purposes. XUAR authorities also have implemented systems and installed phone apps to register and monitor Uyghurs' electronic devices and online activity for "extremist" content. The PRC government has instituted policies intended to assimilate Uyghurs into Han Chinese society and reduce the influences of Uyghur, Islamic, and Arabic cultures and languages. The XUAR enacted a regulation in 2017 that prohibits "expressions of extremification," including wearing face veils, growing "irregular" beards, and expanding halal practices beyond food. Authorities reportedly have banned traditional Uyghur wedding and funeral customs and Islamic names for children. Thousands of mosques in Xinjiang reportedly have been demolished as part of a "mosque rectification" or safety campaign. PRC authorities reportedly have conscripted as many as a million citizens to live temporarily in the homes of Uyghurs and other Muslim minorities to assess their hosts' loyalty to the Communist Party. Mass Internment of Uyghurs Since 2017, Xinjiang authorities have undertaken the mass internment of Turkic Muslims, some of whom may have engaged in religious and ethnic cultural practices that the government now perceives as extremist or terrorist, or as manifesting "strongly religious" views or thoughts that could lead to the spread of religious extremism or terrorism. The government has detained, without formal charges, up to an estimated 1.5 million Uyghurs out of a population of about 10.5 million, and a smaller number of ethnic Kazakhs, in ideological re-education centers. Over 400 prominent Uyghur intellectuals reportedly have been detained or their whereabouts are unknown. Many detainees reportedly are forced to express their love of the Communist Party and Xi Jinping, sing patriotic songs, and renounce or reject many of their religious beliefs and customs. According to former detainees, conditions in the centers are often crowded and unsanitary, and treatment often includes psychological pressure, forced labor, beatings, and food deprivation. PRC officials describe the Xinjiang camps as "vocational education and training centers" in which "trainees" study Chinese, take courses on PRC law, learn job skills, and undergo "de-extremization" or are "cured of ideological infection." The government states that the centers "have never made any attempts to have the trainees change their religious beliefs." In July 2019, some Chinese officials claimed that most detainees had "returned to society" and to their families, while in August 2019, other officials stated that the "only 500,000 Uyghurs" were held in 68 camps. Some Uyghurs living abroad, however, claim that they still have not heard from missing relatives in Xinjiang. Some reports indicate that many of those released from re-education centers have been placed under house arrest or in state-run factories, and continue to be held under close political supervision. Hui Muslims The Hui, another Muslim minority group in China who number around 11 million, largely have practiced their faith with less government interference. The Hui are more geographically dispersed and culturally assimilated than the Uyghurs, are generally physically indistinguishable from Hans, and do not speak a non-Chinese language. China's new religious policies have affected the Hui and other Muslims outside of Xinjiang, but less severely than the Uyghurs. Nonetheless, authorities in the Ningxia Hui Autonomous Region have ordered mosques to be "Sinicized"âminarets have been taken down, onion domes have been replaced by traditional Chinese roofs, and Islamic motifs and Arabic writings have been removed. Officials have cancelled Arabic classes in some mosques and private schools, and calls to prayer have been banned in Yinchuan, the capital of Ningxia. In Beijing, authorities have mandated that Arabic signage over Halal food shops be removed. In August 2018, thousands of Hui Muslims gathered in front of a newly-built mosque in Weizhou, Ningxia, in an attempt to block the government's announced demolition of the building due in part to its Middle Eastern architectural style. While the government backed down on its threat to destroy the mosque, PRC anticorruption investigators have begun investigating local Hui officials who they say have "strayed from the party's leadership and political discipline in religious matters." U.S. Efforts to Advance Human Rights in China Human Rights and U.S.-China Relations Human rights conditions in the PRC have been a recurring point of friction and source of mutual mistrust in U.S.-China relations, particularly since the Tiananmen Square crackdown in 1989 and the end of the Cold War in 1991. China's persistent human rights violations, as well as its authoritarian political system, often have caused U.S. policymakers and/or the American public to view the PRC government with greater suspicion. Chinese officials may in turn view expressed human rights concerns by U.S. policymakers, and the broader U.S. democracy promotion agenda, as tools meant to undermine CCP rule and slow China's rise. Frictions over human rights may affect other issues in the relationship, including those related to economics and security. In engaging China on human rights issues, the United States has often focused on China's inability or unwillingness to respect universal civil and political rights, while China prefers to tout its progress in delivering economic development and well-being, and advancing social rights for its people, including ethnic minorities. U.S. Policy Evolution In the period following the 1989 Tiananmen Square crackdown, the United States sought to leverage China's desire for "most favored nation" (MFN) trade status by linking its annual renewal to improvements in human rights conditions in China. The Clinton Administration ultimately abandoned this direct linkage, however, in favor of a general policy of engagement with China that it hoped would contribute to improved respect for human rights and greater political freedoms for the Chinese people. President Bill Clinton, in his 1999 State of the Union Address, summed up the long-term aspirations of this approach, stating, "It's important not to isolate China. The more we bring China into the world, the more the world will bring change and freedom to China." In the following more than two decades, U.S. Administrations and Congresses employed broadly similar strategies for promoting human rights in China, combining efforts to deepen trade and other forms of engagement to help create conditions for positive change, on the one hand, with specific human rights promotion efforts, on the other. Presidents Bill Clinton, George W. Bush, and Barack Obama held that U.S. engagement with China and encouraging China to respect international norms, including on human rights, would result in mutual benefits, including China's own success and stability. Policy tools for promoting human rights have included open censure of China; quiet diplomacy, such as closed-door discussions; congressional investigations, hearings, legislation, statements, letters, and visits; funding for human rights and democracy foreign assistance programs in the PRC; congressionally-mandated reports on human rights in China; support for human rights defenders and pro-democracy groups in China, Hong Kong, and the United States; economic sanctions; efforts to promote Internet freedom; support for international broadcasting; and coordination of international pressure, including through multilateral organizations. In addition, some U.S. officials and Members of Congress have regularly met with Chinese dissidents and with the Dalai Lama and exiled Tibetan officials, in both Washington, D.C. and Dharamsala, India, where the headquarters of the Central Tibetan Administration (sometimes referred to as the Tibetan government-in-exile) is located. Beijing opposes such meetings as encouraging Tibetan independence and contravening the U.S. policy that Tibet is part of China. Trump Administration Policy In recent years, policy analysts have increasingly debated the effectiveness of aspects of the U.S. engagement strategy with China, including, in light of China's deepening domestic political repression, its results in securing improvements in Beijing's respect for human rights and political freedoms. Under President Trump, U.S. policy documents have declared that China's international integration has not liberalized its political or economic system, and the United States has begun to place less emphasis on engagement. The Trump Administration has referred to China as a "revisionist power," a strategic competitor, or even an adversary, and curtailed some government-to-government cooperation. Some critics of the Administration's China policy argue that U.S. effectiveness and credibility on human rights is strengthened when the United States works with allies and within international organizations to promote human rights and democracy globally and in China, while maintaining openness to engaging China's government and society, where appropriate. A U.S. policy approach that is less concerned with maintaining broad engagement with China may afford greater space and opportunity to push the PRC on human rights concerns. Trump Administration efforts in this area arguably have been uneven to date, with some commentators criticizing the Administration for inconsistency in its commitment to human rights issues as it pursues other priorities with China, particularly on trade. More broadly, the Administration has placed less emphasis on existing multilateral institutions and on multilateral diplomacy in its foreign policy, including with regard to human rights. The forcefulness of the Administration's public rhetoric on PRC human rights issues has differed between the President and some senior Administration officials. Since 2018, some Administration officials have used increasingly sharp language on China's human rights abuses. Vice President Mike Pence's October 2018 speech on the Administration's China policy, which was critical of China across a broad set of policy areas, cited concern over China's "control and repression of its own people" and referenced "an unparalleled surveillance state." At the announcement of the Department of State's 2019 release of its annual report on human rights practices around the world, Secretary of State Michael Pompeo stated that China was in a "league of its own" in the area of human rights violations. In July 2019, Pompeo described the situation in Xinjiang in particular as "one of the worst human rights crises of our time," and "the stain of the century." President Trump generally has not publicly raised the issue of human rights in China and reportedly remains focused largely on trade issues. In July 2019, President Trump met with survivors of religious persecution around the world, including four individuals from China: a Uyghur Muslim, a Tibetan Buddhist, a Christian, and a Falun Gong practitioner. In September 2019 at a United Nations event on religious freedom, the President issued a broad statement calling for an end to religious persecution, but did not mention religious freedom issues in China specifically; his later remarks to the U.N. General Assembly, as they related to China, emphasized trade issues. The Trump Administration has not attempted to restart the U.S.-China Human Rights Dialogue, which Beijing suspended in 2016. Many other operative elements of U.S. human rights policy toward China, however, reflect continuity with prior administrations; many are statutorily mandated and/or continue to be funded by Congress (as described below). The State Department's most recent "integrated country strategy" for China, released in August 2018, includes an objective to "advocate for and urge China to adhere to the rule of law, respect the individual rights and dignity of all its citizens, and ease restrictions on the free flow of information and ideas to advance civil society." Policy Options and Tools Human Rights and Democracy Foreign Assistance Programs Since 2001, U.S. foreign assistance programs have sought to promote human rights, civil society, democracy, rule of law, and Internet freedom in China. In addition, some programs also have addressed environmental and rule of law issues and focused upon sustainable development, environmental conservation, and preservation of indigenous culture in Tibetan areas of China. U.S.-funded programs do not provide assistance to PRC government entities or directly to Chinese non-governmental organizations (NGOs), and are predominantly awarded in the form of grants to U.S.-based NGOs and academic institutions. The State Department's Bureau of Democracy, Human Rights, and Labor (DRL) has generally administered programs to promote human rights and democracy in China, while the U.S. Agency for International Development (USAID) has administered the aforementioned programs in Tibet and some additional programs in the areas of the environment and rule of law. DRL programs across China have generally supported rule of law development, civil society, labor rights, religious freedom, government transparency, public participation in government, and Internet freedom. Between 2001 and 2018, the U.S. government provided approximately $241 million for DRL programs in China, $99 million for Tibetan programs, and $72 million for environmental and rule of law efforts in the PRC (see Figure 2 above). Since 2015, Congress has appropriated additional funds for Tibetan communities in India and Nepal ($6 million in FY2019). Since 2018, Congress also has provided $3 million annually to strengthen institutions and governance in the Tibetan exile communities. National Endowment for Democracy Grants Established in 1983, the National Endowment for Democracy (NED) is a private, nonprofit foundation "dedicated to the growth and strengthening of democratic institutions around the world." Funded primarily by an annual congressional appropriation, NED has played an active role in promoting human rights and democracy in China since the mid-1980s. A grant-making institution, NEDÂ has supported projects in China carried out by grantees that include its four affiliated organizations; Chinese, Tibetan, and Uyghur human rights and democracy groups and media platforms based in the United States and Hong Kong; and a small number of NGOs based in mainland China. Program areas have included efforts related to prisoners of conscience; rights defenders; freedom of expression; civil society; the rule of law; public interest law; Internet freedom; religious freedom; promoting understanding of Tibetan, Uyghur, and other ethnic concerns in China; government accountability and transparency; political participation; labor rights; public policy analysis and debate; and rural land rights, among others. NED currently describes China as a priority country in Asia in light of the "significant and systemic challenges to democratization" there. NED grants for China (including Tibet and Hong Kong) totaled approximately $7 million in 2017 and $6.5 million in 2018. This support is provided using NED's regular congressional appropriations. International Broadcasting The U.S. Agency for Global Media (USAGM; formerly the Broadcasting Board of Governors) utilizes international broadcasting and media activities to "advance the broad foreign policy priorities of the United States, including the universal values of freedom and democracy." It targets resources to areas "most impacted by state-sponsored disinformation" (as well as by violent extremism), and identifies people in China as a key audience. USAGM-supported Voice of America (VOA) and Radio Free Asia (RFA) provide external sources of independent or alternative news and opinion to Chinese audiences. The two media services play small but unique roles in providing U.S.-style broadcasting, journalism, and public debate in China. VOA, which offers mainly U.S. and international news, and RFA, which serves as an uncensored source of domestic Chinese news, often report on important world and local events, including human rights issues. The PRC government regularly jams and blocks VOA and RFA Mandarin, Cantonese, Tibetan, and Uyghur language radio and television broadcasts and Internet sites, while VOA English services generally receive less interference. VOA and RFA have made efforts to enhance their Internet services, develop circumvention or counter-censorship technologies, and provide access to their programs on social media platforms. USAGM increasingly emphasizes digital and social media content in China, arguing that these are "effective channels for information-seeking people to evade government firewalls." The agency describes RFA Uyghur as the "only Uyghur language news outlet for the Xinjiang Uyghur Autonomous Region," and states that the outlet's social media content is popular among the Uyghur exile community, which shares the content with Uyghurs in Xinjiang. Sanctions China is subject to some U.S. economic sanctions in response to its human rights conditions. The sanctions' effects have been limited, however, and arguably largely symbolic. Many sanctions imposed on China as a response to the 1989 Tiananmen crackdown (including restrictions on foreign aid, military and government exchanges, and export licenses) are no longer in effect. Remaining Tiananmen-related sanctions suspend Overseas Private Investment Corporation programs and restrict export licenses for U.S. Munitions List (USML) items and crime control equipment. The United States also limits its support for international financial institution (IFI) lending to China for human rights reasons. For example, U.S. representatives to IFIs may by law support projects in Tibet only if they do not encourage the migration and settlement of non-Tibetans into Tibet or the transfer of Tibetan-owned properties to non-Tibetans, due in part to the potential for such activities to erode Tibetan culture and identity. Relatedly, China also has been subject to potential nonhumanitarian and nontrade-related foreign assistance restrictions as a result of its State Department designation as a "Tier 3" (worst) country for combating human trafficking in recent years. Sanctions on Individuals The Global Magnitsky Human Rights Accountability Act, enacted as part of the National Defense Authorization Act for FY2017 ( P.L. 114-328 , Subtitle F, Title XII), authorizes the President to impose both economic sanctions and visa denials or revocations against foreign individuals responsible for "gross violations of internationally recognized human rights." The Trump Administration has thus far sanctioned one Chinese security official, Gao Yan, pursuant to the Global Magnitsky Act. According to the Treasury Department, Gao headed the Public Security Bureau branch in Beijing at which human rights activist Cao Shunli was held and denied medical treatment; Cao died in March 2014. The executive branch may also utilize Section 7031(c) of the Department of State, Foreign Operations, and Related Appropriations Act, 2019 (Division F of P.L. 116-6 ) or the broad authorities under Section 212 of the Immigration and Nationality Act (INA) to impose visa sanctions on individuals responsible for human rights abuses. Numerous human rights advocates and Members of Congress have called on the Trump Administration to sanction Chinese government officials responsible for the human rights abuses occurring in Xinjiang; many have argued for Global Magnitsky sanctions against XUAR Party Secretary Chen Quanguo, in particular. Press reports suggest the Trump Administration has been considering sanctions under the Global Magnitsky Act against Xinjiang officials, but has delayed actions in the midst of the U.S.-China bilateral trade negotiations. In October 2019, the State Department announced visa restrictions against an unspecified number of "Chinese government and Communist Party officials who are believed to be responsible for, or complicit in, the detention or abuse of Uighurs, Kazakhs, or other members of Muslim minority groups" in Xinjiang, and stated that the officials' family members may also be subject to visa restrictions. Designations and Actions Pursuant to the International Religious Freedom Act The International Religious Freedom Act of 1998 (IRFA, P.L. 105-292 ) mandates that the President produce an annual report on the status of religious freedom in countries around the world and identify "countries of particular concern" (CPCs) for "particularly severe violations of religious freedom," and prescribes punitive actions in response to such violations. The law provides a menu of potential sanctions against CPCs, such as foreign assistance restrictions or loan prohibitions, but provides the executive branch with significant discretion in determining which, if any, actions to take. U.S. reports under IRFA have been consistently critical of China's religious freedom conditions, and the U.S. government has designated China as a CPC in each of its annual designation announcements since IRFA's enactment. Consistent with prior administrations, the Trump Administration has to date chosen not to take new actions against the Chinese government pursuant to IRFA and instead referred to existing, ongoing sanctions to satisfy the law's requirements. These existing sanctions relate to the above-mentioned restrictions on exports of crime control and detection equipment adopted following the Tiananmen crackdown. Visa Sanctions Pursuant to the Reciprocal Access to Tibet Act The Reciprocal Access to Tibet Act (RATA, P.L. 115-330 ), enacted in December 2018, requires that, absent a waiver by the Secretary of State, no individual determined to be "substantially involved in the formulation or execution of policies related to access for foreigners to Tibetan areas" may receive a visa or be admitted to the United States while PRC policies restricting foreigners' access to Tibetan areas of China remain in place. The State Department is to report to Congress annually for five years following RATA's enactment, identifying the individuals who had visas denied or revoked pursuant to the law, and, "to the extent practicable," provide a broader list of the "substantially involved" individuals. Export Controls On October 7, 2019, the U.S. Department of Commerce announced that it would add 28 PRC entities to the Bureau of Industry and Security (BIS) "entity list" under the Export Administration Regulations (EAR), asserting that the entities "have been implicated in human rights violations and abuses in the implementation of China's campaign of repression, mass arbitrary detention, and high-technology surveillance against Uighurs, Kazakhs, and other members of Muslim minority groups in the XUAR." The entities to be added include eight technology companies, the XUAR Public Security Bureau (PSB) and eighteen subordinate PSBs, and the PSB-affiliated Xinjiang Police College. The action imposes licensing requirements prior to the sale or transfer of U.S. items to these entities. For each entity, the Commerce Department indicated that there would be a presumption of license denial for all items subject to the EAR, with the exception of certain categories to be subject to a case-by-case review. Secretary of Commerce Wilbur Ross stated that adding the entities would "ensure that our technologies, fostered in an environment of individual liberty and free enterprise, are not used to repress defenseless minority populations." Previously, Members of Congress had written to Secretary Ross and other senior Administration officials urging them to expand the entity list "to ensure that U.S. companies are not assisting, directly or indirectly, in creating the vast civilian surveillance or big-data predictive policing systems being used in [Xinjiang]." Some observers believe the decision could result in significant adverse business impacts for some of the Chinese technology companies. Multilateral Diplomacy The United States also has engaged in multilateral diplomacy to advocate for improved human rights conditions in China. For example, in March 2016, the United States joined 11 other countries to deliver a joint statement at the United Nations Human Rights Council criticizing China's human rights record and calling on China to uphold its human rights commitments. The Trump Administration has curtailed U.S. participation in some multilateral human rights organizations, most prominently by announcing the U.S. withdrawal from the UNHRC in June 2018, and arguably has placed less emphasis on multilateral diplomacy. The United States reportedly did not sign a 2018 joint letter by 15 foreign ambassadors in Beijing requesting a meeting with XUAR Party Secretary Chen Quanguo to raise concerns over human rights abuses in Xinjiang. On July 8, 2019, 22 nations issued a joint statement to the UNHRC president and the U.N. High Commissioner on Human Rights calling on China to "refrain from the arbitrary detention and restrictions on freedom of movement of Uighurs, and other Muslim and minority communities in Xinjiang," and to "allow meaningful access to Xinjiang for independent international observers." The statement, which was signed by numerous countries that are not current members of the UNHRC, was not signed by the United States. The Trump Administration has sought some new venues through which to issue multilateral statements on certain PRC human rights issues, particularly on religious freedom. The State Department convened a Ministerial to Advance Religious Freedom in July 2018 and July 2019, with participation from foreign delegations and civil society leaders, and each time released a joint statement expressing concern over religious freedom conditions in China. The United States was joined in the 2019 statement by Canada, Kosovo, the Marshall Islands, and the United Kingdom. More broadly, the Administration is also working to establish an "International Religious Freedom Alliance" comprised of governments "dedicated to confronting religious persecution around the world," presumably including in China. Despite its withdrawal from the UNHRC, the United States has also continued to participate in some Council activities in its capacity as a U.N. member state, such as the Universal Periodic Review (UPR) process, including China's most recent UPR. During China's review in November 2018, over one dozen countries, including the United States, raised questions and concerns about China's treatment of Tibetans, Uyghurs, and other minorities, as well as over freedom of religion in China. The United States made four recommendations, including for China to "abolish all forms of arbitrary detention, including internment camps in Xinjiang, and immediately release the hundreds of thousands, possibly millions, of individuals detained in these camps."	Summary:	gov_report	1,024	null	95
crs_R46309	crs_R46309_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The federal research and development (R&D) enterprise is a large and complex system, spanning the country, that includes government facilities and employees as well as federally funded work in industry, academia, and the nonprofit sector. In FY2019, federal agencies obligated an estimated $141.5 billion for R&D, including $39.6 billion for intramural R&D and $101.9 billion for extramural R&D. Its work is essential to U.S. economic prosperity, national security, health care, and other national priorities. It also plays a substantial direct role in the U.S. economy. Today, the operation of the system is being affected profoundly by the Coronavirus Disease 2019 (COVID-19) pandemic and the national response to it. This report provides an overview of how the nation's response to COVID-19 is affecting the federal R&D enterprise, how the federal government and others are addressing those effects, and issues that may arise as the situation develops. The scope of this report is limited to the effects of COVID-19 on federally funded R&D. It does not attempt to address effects on the broader U.S. R&D enterprise, the majority of which is funded by and conducted in the private sector. In addition, it does not attempt to address the federal R&D resources now being focused on understanding the science of COVID-19, developing tests and treatments, and otherwise applying R&D to address the pandemic. As the scientific, government, and public understanding of COVID-19 has grown, the national response has evolved, and it is likely to continue to evolve. The scope, scale, and dynamism of responses by the federal government, state and local governments, and the private sector are too great to catalog fully in this report. Rather, the report highlights key effects and issues of concern and provides examples of agency actions. Effects on R&D Institutions and Projects Faced with the global spread of a contagious and deadly virus, U.S. institutions have taken a number of extraordinary measures. One key response has been social distancingâlimiting close contacts between individuals in order to reduce opportunities for transmission of the virus. This response has led to the closure of many businesses, schools, government offices, and other institutions. Where possible, these institutions have continued to operate via telework and e-learning. Research and development activities, however, often require physical access to unique facilities and equipment. As a result, many R&D organizationsâincluding federal facilities as well as industrial and academic laboratories supported by federal fundsâhave closed or curtailed operations. Closure of Laboratories and Laboratory Activities Closures of R&D facilities and social distancing requirements for researchers depend less on coordinated national policies than on the independent decisions of individual agencies, universities, and other institutions. For example, the National Aeronautics and Space Administration (NASA) decides the status of each of its centers separately, based on local conditions, according to a four-stage response framework. At the same time, some NASA centers may be at stage 3 (open to mission-essential personnel) while others are at stage 4 (closed except to protect life and critical infrastructure). During March 2020, NASA made the decision to move to stage 3 and subsequently from stage 3 to stage 4 at different times for different centers. Actions by state or local governments may be a factor in the decisions of some facilities. For example, shutdowns at Department of Energy (DOE) laboratories in California and Illinois followed statewide social distancing orders issued by the governors of those states. In some cases, specific R&D activities may be allowed to continue, despite closures, if an institution determines that the work is sufficiently important, that suspending it would be too costly or disruptive, or that it can be conducted remotely. For example, most employees of the National Institute of Standards and Technology (NIST) are on telework with limited access to the laboratories' physical facilities and only with supervisor approval. However, some NIST employees continue to work onsite to provide certain limited essential services, including the sale of Standard Reference Materials, calibration of precision instruments, distribution of time and frequency signals, and maintenance of the National Vulnerability Database. Many of these considerations for laboratories and other research facilities apply similarly to research conducted in the field. Identification of Essential and Critical R&D Activities The policies guiding these decisions often use terms like essential or critical . In the NASA response framework, for example, mission-essential work includes work needed for the safety of human life or protection of property and "work that must be performed to maintain mission/project operations or schedules and cannot be performed remotely/virtually." The Office of Management and Budget (OMB) has provided guidance to agencies about what travel (including travel to conduct R&D or to attend scientific meetings) should be considered mission-critical, based on a list of 11 factors, such as whether the travel is for activities essential to national security or whether it is time-sensitive. Presidential Policy Directive 21 (PPD-21) identifies the defense industrial base, including defense R&D, as one of 16 critical infrastructure sectors. A memorandum from the Under Secretary of Defense for Acquisition and Sustainment identifies development and testing by Department of Defense (DOD) contractors as an essential part of this critical infrastructure. Some state emergency orders have included exemptions for facilities and organizations that are considered critical infrastructure, suggesting that defense-related R&D may be allowed to continue even when other R&D is suspended. In general, however, state and local authoritiesânot federal agenciesâassume responsibility for adjudicating claims of criticality by private-sector organizations. In some cases, the determination of whether an R&D project should continue is based on how severely it would be affected by being suspended. For example, the relative positions of Earth and Mars in their respective orbits typically create a narrow launch window for NASA science missions to Mars. If a mission misses that window, it is likely to be delayed 26 months until the next launch window. While NASA has suspended a number of other major projects, it is continuing work on the Mars 2020 mission, scheduled for a launch window that opens in mid-July 2020. Other time-sensitive projects may include experiments that require continuity of data collection or that involve caring for live animals or maintaining cell cultures. University decisions about essential research functions may be informed by local conditions, federal funding agency directives, ethical considerations about the well-being of human subjects and animals in discontinued or scaled-back research, and each university's own risk management decisionmaking. Columbia University has defined essential functions to include, in addition to COVID-19 research and ongoing clinical trials, "the maintenance of equipment, laboratory resources, critical animal resources, and cell lines." Johns Hopkins University has defined three tiers of its clinical research. The top, essential, tier includes trials of potential COVID-19 treatments and trials that address certain acute, life-threatening conditions such as Huntington's disease. Only trials in this tier can continue normally, including enrolling new patients. According to the Association of Public and Land-Grant Universities, research functions that some (but not necessarily all) universities have identified as essential include COVID-19 related research; activity that if discontinued would generate significant data and sample loss; activity that if discontinued would pose a safety hazard; activity that maintains critical equipment or core facilities; activity that maintains critical samples, reagents, and materials; activity that maintains animal populations; activity that maintains critically needed plant populations, tissue cultures, or other living organisms; activity in support of essential human subjects research; and clinical trial activity that if discontinued would adversely affect patient care. Not all time-sensitive research is necessarily considered essential, however. One example of an activity that is generally not being treated as essential is agricultural research that depends on an annual planting cycle or an animal maturation cycle. Continuing R&D Remotely Whether researchers can continue to make progress on a particular R&D project remotely may also depend on the nature of the project. For example, researchers working remotely may be able to perform scientific computations, engage in modeling and simulation, design experimental hardware, analyze data already obtained, and prepare journal articles. In contrast, handling physical and biological samples, caring for laboratory animals, and building or operating specialized equipment likely require a researcher to be present in the laboratory. Research involving human subjects may be interrupted if those subjects are unavailable because of social distancing. In some cases, the extent to which research activities can continue may depend on the duration of the disruption; for example, analyzing data and preparing results for publication may no longer be an option once all existing data have been analyzed and written up. These factors may affect different disciplines differently; for example, research in mathematics, computer science, and theoretical physics may be more amenable to remote working than research in agricultural science, geology, or microbiology. Cancellation of Conferences Travel restrictions and social distancing requirements have also resulted in the cancellation of numerous scientific and technical conferences. The person-to-person interactionsâboth formal and informalâthat take place at such conferences are an instrumental mechanism for knowledge sharing, peer feedback, the ideation of new research, technology transfer, and interactions between researchers and agency program managers. Other mechanisms, such as scientific papers and electronic communications, also offer other important ways to exchange knowledge and share ideas, but they lack some of the interactive advantages of in-person conferences. Accordingly, the cancellation of scientific and technical conferences may have a detrimental impact on advances in knowledge and the benefits that emerge from such knowledge. These adverse effects apply both to federal scientists and engineers and to their counterparts in academia and the private sector who work on federally funded R&D. The impact of cancelling conferences may be particularly significant in certain fields. In computer science, for example, papers published in conference proceedings may be as influential as journal articles, to an extent that is rare in other fields. In some cases, conferences are continuing virtually with attempts to facilitate informal interactions that would normally take place in person. For example, the annual Conference on Retroviruses and Opportunistic Infections, originally scheduled to be held in Boston in March 2020, was converted to a virtual conference, with prerecorded presentations, live webcasts, and electronic poster presentations. In April 2020, the annual International Conference on Learning Representations (devoted to machine learning) plans to present papers using prerecorded videos and offer online opportunities to ask questions of speakers, see questions and answers from other participants, take part in discussion groups, meet with sponsors, and join groups for networking. Scientific and technical conferences are often run by professional societies and other organizations that rely on them for revenue. Cancellations are likely to result in financial losses for these organizations as expected revenues are not realized and cancellation costs associated with the use of hotels, meeting facilities, and other services are incurred. Such losses can be considerable for the organizations involved. The cancellation of the March 2020 annual meeting of the American Physical Society cost the society about $7 million, about 12% of its typical annual revenues; other societies have reported cancellation losses that wiped out essentially all of their financial reserves. Federal agencies also run scientific and technical conferences. While these conferences are not generally a significant source of agency revenues, some agencies are likely to face one-time cancellation costs that may be considerable. Researchers planning to attend conferences that have been cancelled may have incurred nonrefundable travel or lodging expenses. Some agencies have determined that awardees may charge these costs to their research awards despite regulations that would normally prohibit doing so. Some of the same considerations apply to other types of meetings. For example, some DOE scientific user facilities have cancelled or postponed their annual user meetings, limiting opportunities for facility outreach and user engagement. Effects on R&D That Is Not Suspended Efficiency and Quality Even when R&D projects can continue, restrictions may affect efficiency or quality. According to one space policy expert, "The enforced separation of people working on the same or related tasks will inject delays and miscommunications. It will certainly be an obstacle to schedules and success in activities like preparing for a launch or building an exploratory spacecraft." A U.S. researcher working remotely on a particle physics experiment has described the inefficiency of guiding an on-site technician through installing a piece of electronics: "I've spent probably 3 hours over the past 24 on Skype with somebodyâ¦. He says something then points the webcam at what we're looking at, then we talk a little bit more." Others note the need to devote time to emergency planning. Additional Costs Institutions may incur unplanned expenses even for R&D that is not suspended. For example, they may need additional computing and networking equipment and services to accommodate researchers working remotely. Janitorial expenses may increase at facilities that remain open, if additional cleaning is required to guard against the spread of infection. Prices may increase for materials and equipment that are in short supply. Disrupted Access to Supplies and Services R&D at institutions that remain open may also be affected by disruptions to the supply of materials and equipment or by closures at collaborating research institutions. Laboratories have reported shortages of widely used supplies, such as RNA-extraction kits, swabs, and personal protective equipment, that are in high demand for COVID-19 testing and patient care. Basic laboratory supplies such as reagents and pipette tips, when still available, may be on backorder or available only at multiples of the usual price. Depending on the duration of the pandemic, NASA's plans for a 2021 launch of the James Webb Space Telescope may be jeopardized. It is to be launched from a European Space Agency spaceport in Kourou, French Guiana, but France suspended launch campaigns from the Guiana Space Center on March 16, 2020, due to the COVID-19 pandemic. Shifts in R&D Focus In some cases, agencies and researchers are shifting their research focus to COVID-19 related topics. The National Institutes of Health (NIH) has issued several funding opportunity announcements for researchers to submit competitive revisions or seek supplemental funding for existing projects, in order to redirect their research efforts to COVID-19. Other agencies that are typically less focused on health research have also sought to shift their R&D priorities. For example, light source user facilities operated by the DOE Office of Basic Energy Sciences are used for structural biology research in partnership with NIH and universities. According to DOE, these facilities are making "every effort to give [COVID-19] researchers priority access" and "want to ensure they are doing everything possible to enable research into this virus and the search for an effective vaccine or other treatment." More generally, DOE wrote an open letter to the research community asking for "ideas about how DOE and the National Labs might contribute resources to help address COVID-19 through science and technology efforts and collaborations." A newly formed consortium of agencies, universities, and companies is making supercomputing resources available "to accelerate understanding of the COVID-19 virus and the development of treatments and vaccines." The NASA Earth Science program has provided guidance to "investigators looking to reprioritize currently-funded efforts" and noted that an existing funding opportunity could support "investigations making innovative use of NASA satellite data to address â¦ impacts of the COVID-19 pandemic." NIST has announced a new grant opportunity under the Manufacturing USA National Emergency Assistance Program to support rapid, high-impact projects that support the nation's response to the COVID-19 pandemic. Up to $2 million is to be available to Manufacturing USA institutes under the program. Other Financial and Infrastructural Effects Shutdown and Restart Costs Suspending research may result in additional costs for activities such as animal care, maintenance of cell cultures and biological samples, and safe storage of hazardous materials. Restarting research, when conditions permit, may also incur costs for staff time and supplies to bring experimental equipment back to operational status, reestablish laboratory animal populations, or replace masks and other personal protective equipment that was donated to hospitals and first responders during the pandemic. The extent to which these costs may be covered out of existing federal research awards is not yet clear. Auditing Issues There may be future auditing issues for federally funded research that is redirected to address COVID-19, or for federally funded researchers who incurred costs to shut down and restart their projects or donated personal protective gear that had been paid for out of grant funds. Even if these changes had the support of the federal funding agency, the time-sensitive circumstances may mean that not all approvals were adequately documented to satisfy auditing requirements. The flexibilities provided to funding agencies in these circumstances (see " Federal Actions to Date " below) may not yet be aligned with corresponding flexibilities for accounting and auditing. University-Based Shared Research Infrastructure There are specific challenges for shared university research infrastructure, including core facilitiesâspecialized laboratories with unique instruments and capabilities that provide services to an institution's researchers âas well as animal care facilities and clinical trial infrastructure. These facilities are typically supported mostly through user fees, often paid from federal funds that are supporting a user's research. They are widely used: one university reported that a majority of its grant-funded research in FY2019 relied in part on core facilities, while a majority of its NIH-funded research made use of shared animal care facilities. Much of this infrastructure has closed, creating uncertainty about funding for shutdown and restart costs as well as continuity of pay for technical staff. Some facilities remain open to support research that is continuing, but open facilities may face their own financial challenges in continuing to operate, as the fees that usually support them are likely to be reduced by the suspension of research by some of their users. Delayed Availability of Major R&D Equipment Planned R&D may be delayed by interruptions in the development or manufacturing of major equipment. NASA, for example, has suspended work on the James Webb Space Telescope, which had been scheduled for launch in March 2021, and on the Space Launch System rocket and Orion crew capsule, needed for its plans to land humans on the Moon in 2024. Loss of Revenues by Federal R&D Agencies Some federal laboratories engage in R&D activities under a Work for Others (WFO) or similar agreement. Using a WFO, a federal agency, federal laboratory, or company can pay to have R&D conducted by another federal laboratory. This often enables access to unique facilities, equipment, and personnel. While the cancellation or suspension of WFO projects due to the COVID-19 response may reduce costs to the sponsoring organization, it may simultaneously reduce revenue that would otherwise have supported the staff, facilities, and equipment of the laboratory that was to perform the work. According to the Government Accountability Office, from FY2008 through FY2012, DOE performed about $2 billion worth of R&D annually under WFO agreements, accounting for 13%-17% of total DOE laboratory revenues. Most of the work (88%) was performed for other federal agencies. NIST conducted $94.4 million in research, development and supporting services for other federal agencies in FY2019. NIST certifies and provides more than 1,300 Standard Reference Materials (SRM) that are used to perform instrument calibrations, verify the accuracy of specific measurements, and support the development of new measurement methods. NIST SRMs are used by industry, academia, and government to facilitate commerce and trade and advance R&D. NIST revenues from SRMs in FY2019 were $21.8 million. NIST also provides calibration and testing services for industry, academia, and government; its FY2019 revenues for these services were $33.5 million. As of the date of this report, NIST continues to provide SRM and calibration services, but it is unclear how long NIST will be able to provide these services if the pandemic continues for an extended period. Future Availability of Federal Funding As some agencies and researchers shift their R&D priorities to respond to the COVID-19 pandemic, the funding available for R&D on other topics may be reduced, at least in the near term. More generally, the federal funding needed for the national response to COVID-19 may reduce the overall federal resources available for R&D. While supplemental appropriations already enacted include additional funds for R&D and institutions that conduct R&D, increased federal spending to address the pandemic, coupled with decreased federal revenue associated with potential economic contraction, may lead to a future fiscal environment with constrained spending across the government. These outcomes may not be clear for some time, however, and may depend on a host of independent decisions by agencies and Congress. Impact on Students, Postdoctoral Researchers, and Early-Career Faculty University research typically involves postdoctoral researchers (postdocs), graduate students, and sometimes undergraduate students in addition to faculty members. Even if the nature of a particular research project qualifies it to continue despite COVID-19, many universities are limiting the continued participation of postdocs and students. Cancelled or suspended research may be of particular concern to these groups. Continuing to work remotely may also be more challenging for students, postdocs, and early-career faculty who have families, as their children are more likely to be young than those of more senior researchers. Failing to complete a project on time may delay the completion of a degree or make it difficult to demonstrate research success when applying for a job or seeking tenure. Cancelled conferences are also a particular concern for postdocs, students, and other early-career researchers, who often rely on conferences to meet more senior scientists, present their work, and find jobs. In some circumstances, there may be uncertainty about continuity of pay for students employed as research assistants or teaching assistants. Because there are disparities between disciplines in the extent to which research can continue while working remotely, students and postdocs in different disciplines may find disparities in how their careers are affected. Disparities may also arise between students and postdocs whose experiments can be suspended and restarted and those whose experiments must simply be abandoned and begun afresh. To the extent that research disruptions, delayed graduation, or difficulty obtaining in-field employment discourage students and early-career researchers from continuing in their field of research, those outcomes could create challenges for the future science and engineering workforce. Continued travel restrictions may also affect the enrollment of foreign science and engineering students in U.S. universities in the 2020-2021 academic year. As well as potentially creating financial challenges for some universities, reduced international enrollment could have long-term workforce consequences, given that many foreign students in science and engineering remain in the United States after graduation. Federal Actions to Date On March 9, 2020, OMB authorized federal agencies to provide certain short-term relief from administrative, financial management, and auditing requirements for grantees involved in research related to COVID-19. On March 18, four organizations representing universities and other research organizations wrote to OMB requesting the expansion of these flexibilities to all research grants. On March 19, OMB provided relief for "an expanded scope of recipients affected by the loss of operational capacity and increased costs due to the COVID-19 crisis." The Appendix summarizes OMB's government-wide administrative actions, extensions of authorities, and guidance. It also provides a link to a compilation maintained by the Council on Governmental Relations (COGR) of guidance from federal agencies, academic institutions, and other organizations, as well as frequently asked questions about how federal agencies that fund R&D are implementing the OMB-directed flexibilities. Some agencies have compiled special guidance for awardees. For example, an NIH webpage provides information on changes to proposal submission and award management, updated policies on clinical trials and animal welfare, and revised procedures for peer review. The National Science Foundation (NSF) has issued guidance for contractors operating NSF-funded facilities. COGR has compiled links to such guidance, sorted by agency, along with links to institutional guidance from a long list of individual universities. Some agencies have extended the due dates for research proposals, announced that they will accommodate applications received late, or reduced the institutional approvals required for an initial proposal. While these accommodations provide additional flexibility for researchers, delays in receiving and acting on proposals may result in delays in issuing awards. Some agencies have announced accommodations for existing awardees, such as no-cost extensions of awards, extensions of financial and other reporting deadlines, changes to the allowability of cancellation fees and costs resulting from the pausing and restarting of research, and allowing the continued payment of salaries and benefits out of grant funds. While these steps give researchers additional flexibility, they may create challenges once research resumes. For example, grant funds that have been spent on cancellation fees, activities required for the suspension of research, or researcher salaries while research is suspended necessarily reduce the balance of funds subsequently available to complete a research project. No-cost extensions extend an award's completion date; they do not provide additional funds to cover costs incurred because of delays. Congress has already enacted some legislation with R&D-related funding and provisions in response to the COVID-19 pandemic. For example The Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 ( P.L. 116-123 ), enacted on March 6, 2020, appropriated $836 million in supplemental funding for NIH, with additional transferrable amounts from other accounts. Some of the $3.1 billion appropriated to the Public Health and Social Services Emergency Fund may also be made available to the Biomedical Advanced Research and Development Authority for the development of COVID-19 medical countermeasures, such as therapies and vaccines. The Coronavirus Aid, Relief, and Economic Security (CARES) Act ( P.L. 116-136 ), enacted on March 27, 2020, appropriated more than $1 billion in supplemental funding for R&D. Most of this total was for research on COVID-19 itself, including $945 million for NIH, $415 million for research, development, testing, and evaluation (RDT&E) in the DOD Defense Health Program, and smaller sums for several other agencies. The act also provided funding to several R&D agencies to offset unanticipated costs arising from the pandemic. For example, NASA received $60 million to cover the costs of mission delays caused by center closures, while the U.S. Forest Service received $3 million to reestablish experiments affected by travel restrictions. Section 18004 of the CARES Act established a $14 billion Higher Education Emergency Relief Fund for colleges and universities. At least half of this total must be allocated for emergency financial aid grants to students. It is not yet clear how much, if any, will be available to address issues directly related to R&D. Section 3610 of the CARES Act authorized federal agencies to reimburse contractors for "any paid leave, including sick leave, a contractor provides to keep its employees or subcontractors in a ready state" when they are unable to work on-site due to facility closures and telework is not an option. Although this provision is not specifically directed at R&D, it could be significant for agencies such as DOE and NASA whose R&D facilities are staffed with numerous contractor employees. Section 12004 of the CARES Act authorized the Patent and Trademark Office to temporarily suspend, modify, adjust, or waive timing deadlines under the Patent Act and the Trademark Act during the COVID-19 emergency period. Section 13006 of the CARES Act gave DOD additional flexibility in the use of its other transaction authority for the development of prototypes related to COVID-19. The CARES Act provided NIST laboratories with $6 million in additional funding, including $5 million to support and accelerate measurement science related to viral testing and biomanufacturing; $50 million for the NIST Manufacturing Extension Partnership program to help companies across the country transform operations in support of COVID-19 related needs and to foster development of COVID-19 related supply chains; and $10 million for research related activities at Manufacturing USA's National Institute for Innovation in Manufacturing Biopharmaceuticals (NIIMBL). The CARES Act provided $2.25 million for the Environmental Protection Agency's Science and Technology account to prevent, prepare for, and respond to coronavirus, domestically or internationally, including $1.5 million for research on methods to reduce the risks from environmental transmission of coronavirus via contaminated surfaces or materials. The CARES Act provided NSF with $76 million "to prevent, prepare for, and respond to coronavirus, domestically or internationally, including to fund research grants and other necessary expenses." The Senate Appropriations Committee summary notes that $75 million is to support NSF's RAPID grant mechanism, "which will support near real-time research at the cellular, physiological, and ecological levels to better understand coronavirus," and $1 million is to assist in the administration of these grants. In the House, Speaker Pelosi has announced plans for a special committee to oversee the federal response to COVID-19, including the spending of supplemental funding provided under the above legislation. Potential Additional Federal Actions Several organizations from industry and academia have put forward policy recommendations to address R&D-related challenges resulting from COVID-19. Congress may also seek to take additional actions through legislation or oversight. The Commercial Spaceflight Federation, an industry group, has asked Congress for legislation directing the Internal Revenue Service to provide for immediate refunds of accumulated research and experimentation (R&E) tax credits. It argues that this would allow "continued innovation through R&D reinvestment." In many cases, under current law, companies that qualify for this credit are unable to use the full amount immediately because of insufficient tax liability or other factors; unused amounts can be carried forward for up to 20 years. The credit only applies to R&D funded by a company itself, but companies that conduct R&D with federal funding often fund their own R&D as well. Organizations representing research universities, medical schools, and teaching hospitals have asked Congress, among other steps, to give research institutions receiving federal funding additional flexibility to cover researcher salaries and benefits while their institutions are affected, to provide $13 billion in additional extramural research funding, and to allow agencies to reprogram any supplemental funds that are not spent within a year for new awards. The latter proposal, they argued, "could have a stimulative effect and help to address the nation's research competitiveness." Noting that "many scientific societies have been and will continue to be adversely impacted by meeting and conference cancellations as a result of COVID-19," the Federation of American Societies for Experimental Biology has asked Congress to include measures such as zero-interest loans and grant to associations, nonprofit organizations, and other tax-exempt organizations in future economic stimulus packages and supplemental appropriations measures. While OMB has issued guidance to agencies regarding administrative flexibilities and other issues, as described above, agency implementation of that guidance has varied. Representatives of the Association of American Universities have indicated that more uniform implementation by federal research funding agencies would reduce administrative burdens and uncertainties for award recipients. Congress may consider a variety of other legislative and oversight actions, either in the near term while the pandemic continues or retrospectively to improve the response to future crises. These might include seeking a clearer understanding of how federally funded R&D is being affected by COVID-19, through hearings, mandates for agency reports, support for academic studies, or mandates for reports by organizations such as the Government Accountability Office or the National Academies of Sciences, Engineering, and Medicine; directing OMB, the Office of Science and Technology Policy, or an interagency task force to develop more uniform guidance on how to identify essential or critical R&D activities, with recommendations for implementing that guidance at government laboratories, universities, companies, and other institutions involved in intramural and extramural federally funded R&D; and establishing a post-pandemic task force on the federal R&D enterprise to examine lessons learned from the COVID-19 pandemic and recommend policy changes to improve the national response of the R&D community in the event of future pandemics. Concluding Observations Over time, the near-term and long-term effects of COVID-19 on the nation's R&D enterprise will become more apparent. Congress may monitor these effects and develop a deeper understanding of their implications for the wide-ranging national policy objectives that motivate federal spending on R&Dâsuch as national security, economic growth and job creation, public health, transportation, and agricultureâas well as the implications for the U.S. science and engineering workforce and the education of the next generation of American scientists, engineers, and technicians. The effects of COVID-19 on federally funded R&D, as described in this report, may adversely affect the pace of R&D generally and the pace of the innovation that builds on it. The national and global economic consequences may have implications for economic growth, the workforce, the development of new products and services, and the competitiveness of companies and nations. The extent of these effects cannot yet be known and may not be fully understood for years. An optimist might hope for a silver lining. If the R&D community learns to overcome some of the challenges of remote working and travel restrictions, that might create future opportunities, after the COVID-19 pandemic is over, for increased workplace flexibilities and reduced travel expenses. The pandemic has also highlighted issues that Congress may seek to address in the future, such as additional R&D on cybersecurity for virtual collaboration and rural access to broadband internet for off-site work during emergencies. Appendix. Government-wide COVID-19 Related Guidance and Other Resources Office of Management and Budget Memoranda OMB has issued a number of memoranda related to the COVID-19 response. These memoranda are written broadly, not focused solely on federal R&D activities. Nevertheless, elements included in these memoranda have relevant information regarding the operation of the federal R&D enterprise. The memoranda are downloadable from the OMB website. As of the date of this report, COVID-19-related memoranda include M-20-19 Harnessing Technology to Support Mission Continuity (March 22, 2020) Directs agencies to utilize technology to the greatest extent practicable to support mission continuity. The memorandum addresses a set of frequently asked questions to provide additional guidance and assist the IT workforce as it addresses impacts of COVID-19. https://www.whitehouse.gov/wp-content/uploads/2020/03/M-20-19.pdf M-20-18 Managing Federal Contract Performance Issues Associated with the Novel Coronavirus (COVID-19) (March 20, 2020) Identifies certain agency actions to relieve short-term administrative, financial management, and audit requirements under 2 C.F.R. Â§200, Uniform Administrative Requirements, Cost P rinciples and Audit Requirements for Federal Awards , without compromising federal financial assistance accountability requirements. These include (1) flexibility with System for Award Management (SAM) registration/recertification for applicants, (2) waiver for Notice of Funding Opportunities (NOFOs) publication, (3) pre-award costs, (4) no-cost extensions on expiring awards, (5) abbreviated noncompetitive continuation requests, (6) expenditure of award funds for salaries and other project activities, (7) waivers from prior approval requirements, (8) exemption of certain procurement requirements, (9) extension of financial and other reporting, and (10) extension of Single Audit submission. In accordance with 2 CFR Â§200.102, "Exceptions," OMB is allowing federal agencies to grant class exceptions in instances where the agency has determined that the purpose of the federal awards is to support the continued research and services necessary to carry out the emergency response related to COVID-19. The memorandum also reminds agencies of existing flexibility to issue exceptions on a case-by-case basis in accordance with 2 CFR Â§200.102, "Exceptions." https://www.whitehouse.gov/wp-content/uploads/2020/03/M-20-18.pdf M-20-17 Administrative Relief for Recipients and Applicants of Federal Financial Assistance Directly Impacted by the Novel Coronavirus (COVID-19) Due to Loss of OperationsÂ (March 19, 2020) Identifies steps to help ensure safety while maintaining continued contract performance in support of agency missions, wherever possible and consistent with the precautions issued by the Centers for Disease Control and Prevention (CDC). Agencies are urged to work with their contractors, if they have not already, to evaluate and maximize telework for contractor employees, wherever possible; be flexible in providing extensions to performance dates if telework or other flexible work solutions, such as virtual work environments, are not possible, or if a contractor is unable to perform in a timely manner due to quarantining, social distancing, or other COVID-19 related interruptions; take into consideration whether it is beneficial to keep skilled professionals or key personnel in a mobile-ready state for activities the agency deems critical to national security or other high priorities; consider whether contracts that possess capabilities for addressing impending requirements such as security, logistics, or other functions may be retooled for pandemic response consistent with the scope of the contract; and leverage the special emergency procurement authorities authorized in connection with the President's emergency declaration under Section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. Â§Â§5121-5207 (the Stafford Act). The memorandum also provides answers to a set of frequently asked questions intended to assist the acquisition workforce as it addresses impacts due to COVID-19. https://www.whitehouse.gov/wp-content/uploads/2020/03/M-20-17.pdf M-20-16 Federal Agency Operational Alignment to Slow the Spread of Coronavirus COVID-19 (March 17, 2020) Provided agencies with initial guidance, consistent with the President's Coronavirus Guidelines for America, directing agencies to take appropriate steps to prioritize all resources to slow the transmission of COVID-19, while ensuring mission-critical activities continue. The memorandum further required all agencies, within 48 hours, to review, modify, and begin implementing risk-based policies and procedures based on CDC guidance and legal advice, as necessary to safeguard the health and safety of federal workplaces to restrict the transmission of COVID-19. https://www.whitehouse.gov/wp-content/uploads/2020/03/M-20-16.pdf M-20-15 Updated Guidance for the National Capital Region on Telework Flexibilities in Response to Coronavirus (March 15, 2020) Directs agencies to offer maximum telework flexibilities to all current telework-eligible employees, consistent with operational needs of the departments and agencies as determined by their heads, as well as to use all existing authorities to offer telework to additional employees, to the extent their work could be telework enabled. https://www.whitehouse.gov/wp-content/uploads/2020/03/M20-15-Telework-Guidance-OMB.pdf M-20-14 Updated Federal Travel Guidance in Response to Coronavirus (March 14, 2020) Advises that "only mission-critical travel is recommended at this time." The memorandum also authorizes executive branch agency heads to determine what travel meets the mission-critical threshold and provides a list of factors to be considered in this determination. https://www.whitehouse.gov/wp-content/uploads/2020/03/M-20-14-travel-guidance-OMB-1.pdf M-20-13 Updated Guidance on Telework Flexibilities in Response to Coronavirus (March 12, 2020) Encourages agencies to maximize telework flexibilities (1) to eligible workers within those populations that the CDC identified as being at higher risk for serious complications from COVID-19 (e.g., older adults and individuals who have chronic health conditions, such as high blood pressure, heart disease, diabetes, lung disease, compromised immune systems); and (2) to CDC-identified special populations including pregnant women. Further directs that agencies do not need to require certification by a medical professional, and may accept self-identification by employees in one of these populations. The memorandum also encourages agencies to consult with local public health officials and the CDC about whether to extend telework flexibilities more broadly to all eligible teleworkers in areas in which either such local officials or the CDC have determined there is community spread. Agencies are also encouraged to extend telework flexibilities more broadly to accommodate state and local responses to the outbreak, including, but not limited to, school closures. Agencies are encouraged to consider the mission-critical nature of employees' work in determining telework and leave decisions. https://www.whitehouse.gov/wp-content/uploads/2020/03/M-20-13.pdf M-20-11 Administrative Relief for Recipients and Applicants of Federal Financial Assistance Directly Impacted by the Novel Coronavirus (COVID-19) (March 9, 2020) Identifies and authorizes agency actions to relieve short-term administrative, financial management and audit requirements under 2 C.F.R. Â§200, Uniform Administrative Requirements, Cost P rinciples and Audit Requirements for Federal Awards , without compromising federal financial assistance accountability requirements. Notes that OMB is allowing federal agencies to grant class exceptions in instances where the agency has determined that the purpose of the federal awards is to support the continued research and services necessary to carry out the emergency response related to COVID-19. The memorandum also notes agencies' existing flexibility to issue exceptions on a case-by-case basis in accordance with 2 C.F.R. Â§200.102, "Exceptions." https://www.whitehouse.gov/wp-content/uploads/2020/03/M-20-11.pdf Compilation of Other Resources The Council on Governmental Relations maintains an online compilation of guidance from federal agencies, academic institutions, and other organizations, as well as responses to frequently asked questions about how federal agencies that fund R&D are implementing the OMB-directed flexibilities. See "Institutional and Agency Responses to COVID-19 and Additional Resources," https://www.cogr.edu/institutional-and-agency-responses-covid-19-and-additional-resources . Summary:	null	96	46,409	46,411	46,411	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The federal research and development (R&D) enterprise is a large and complex system, spanning the country, that includes government facilities and employees as well as federally funded work in industry, academia, and the nonprofit sector. In FY2019, federal agencies obligated an estimated $141.5 billion for R&D, including $39.6 billion for intramural R&D and $101.9 billion for extramural R&D. Its work is essential to U.S. economic prosperity, national security, health care, and other national priorities. It also plays a substantial direct role in the U.S. economy. Today, the operation of the system is being affected profoundly by the Coronavirus Disease 2019 (COVID-19) pandemic and the national response to it. This report provides an overview of how the nation's response to COVID-19 is affecting the federal R&D enterprise, how the federal government and others are addressing those effects, and issues that may arise as the situation develops. The scope of this report is limited to the effects of COVID-19 on federally funded R&D. It does not attempt to address effects on the broader U.S. R&D enterprise, the majority of which is funded by and conducted in the private sector. In addition, it does not attempt to address the federal R&D resources now being focused on understanding the science of COVID-19, developing tests and treatments, and otherwise applying R&D to address the pandemic. As the scientific, government, and public understanding of COVID-19 has grown, the national response has evolved, and it is likely to continue to evolve. The scope, scale, and dynamism of responses by the federal government, state and local governments, and the private sector are too great to catalog fully in this report. Rather, the report highlights key effects and issues of concern and provides examples of agency actions. Effects on R&D Institutions and Projects Faced with the global spread of a contagious and deadly virus, U.S. institutions have taken a number of extraordinary measures. One key response has been social distancingâlimiting close contacts between individuals in order to reduce opportunities for transmission of the virus. This response has led to the closure of many businesses, schools, government offices, and other institutions. Where possible, these institutions have continued to operate via telework and e-learning. Research and development activities, however, often require physical access to unique facilities and equipment. As a result, many R&D organizationsâincluding federal facilities as well as industrial and academic laboratories supported by federal fundsâhave closed or curtailed operations. Closure of Laboratories and Laboratory Activities Closures of R&D facilities and social distancing requirements for researchers depend less on coordinated national policies than on the independent decisions of individual agencies, universities, and other institutions. For example, the National Aeronautics and Space Administration (NASA) decides the status of each of its centers separately, based on local conditions, according to a four-stage response framework. At the same time, some NASA centers may be at stage 3 (open to mission-essential personnel) while others are at stage 4 (closed except to protect life and critical infrastructure). During March 2020, NASA made the decision to move to stage 3 and subsequently from stage 3 to stage 4 at different times for different centers. Actions by state or local governments may be a factor in the decisions of some facilities. For example, shutdowns at Department of Energy (DOE) laboratories in California and Illinois followed statewide social distancing orders issued by the governors of those states. In some cases, specific R&D activities may be allowed to continue, despite closures, if an institution determines that the work is sufficiently important, that suspending it would be too costly or disruptive, or that it can be conducted remotely. For example, most employees of the National Institute of Standards and Technology (NIST) are on telework with limited access to the laboratories' physical facilities and only with supervisor approval. However, some NIST employees continue to work onsite to provide certain limited essential services, including the sale of Standard Reference Materials, calibration of precision instruments, distribution of time and frequency signals, and maintenance of the National Vulnerability Database. Many of these considerations for laboratories and other research facilities apply similarly to research conducted in the field. Identification of Essential and Critical R&D Activities The policies guiding these decisions often use terms like essential or critical . In the NASA response framework, for example, mission-essential work includes work needed for the safety of human life or protection of property and "work that must be performed to maintain mission/project operations or schedules and cannot be performed remotely/virtually." The Office of Management and Budget (OMB) has provided guidance to agencies about what travel (including travel to conduct R&D or to attend scientific meetings) should be considered mission-critical, based on a list of 11 factors, such as whether the travel is for activities essential to national security or whether it is time-sensitive. Presidential Policy Directive 21 (PPD-21) identifies the defense industrial base, including defense R&D, as one of 16 critical infrastructure sectors. A memorandum from the Under Secretary of Defense for Acquisition and Sustainment identifies development and testing by Department of Defense (DOD) contractors as an essential part of this critical infrastructure. Some state emergency orders have included exemptions for facilities and organizations that are considered critical infrastructure, suggesting that defense-related R&D may be allowed to continue even when other R&D is suspended. In general, however, state and local authoritiesânot federal agenciesâassume responsibility for adjudicating claims of criticality by private-sector organizations. In some cases, the determination of whether an R&D project should continue is based on how severely it would be affected by being suspended. For example, the relative positions of Earth and Mars in their respective orbits typically create a narrow launch window for NASA science missions to Mars. If a mission misses that window, it is likely to be delayed 26 months until the next launch window. While NASA has suspended a number of other major projects, it is continuing work on the Mars 2020 mission, scheduled for a launch window that opens in mid-July 2020. Other time-sensitive projects may include experiments that require continuity of data collection or that involve caring for live animals or maintaining cell cultures. University decisions about essential research functions may be informed by local conditions, federal funding agency directives, ethical considerations about the well-being of human subjects and animals in discontinued or scaled-back research, and each university's own risk management decisionmaking. Columbia University has defined essential functions to include, in addition to COVID-19 research and ongoing clinical trials, "the maintenance of equipment, laboratory resources, critical animal resources, and cell lines." Johns Hopkins University has defined three tiers of its clinical research. The top, essential, tier includes trials of potential COVID-19 treatments and trials that address certain acute, life-threatening conditions such as Huntington's disease. Only trials in this tier can continue normally, including enrolling new patients. According to the Association of Public and Land-Grant Universities, research functions that some (but not necessarily all) universities have identified as essential include COVID-19 related research; activity that if discontinued would generate significant data and sample loss; activity that if discontinued would pose a safety hazard; activity that maintains critical equipment or core facilities; activity that maintains critical samples, reagents, and materials; activity that maintains animal populations; activity that maintains critically needed plant populations, tissue cultures, or other living organisms; activity in support of essential human subjects research; and clinical trial activity that if discontinued would adversely affect patient care. Not all time-sensitive research is necessarily considered essential, however. One example of an activity that is generally not being treated as essential is agricultural research that depends on an annual planting cycle or an animal maturation cycle. Continuing R&D Remotely Whether researchers can continue to make progress on a particular R&D project remotely may also depend on the nature of the project. For example, researchers working remotely may be able to perform scientific computations, engage in modeling and simulation, design experimental hardware, analyze data already obtained, and prepare journal articles. In contrast, handling physical and biological samples, caring for laboratory animals, and building or operating specialized equipment likely require a researcher to be present in the laboratory. Research involving human subjects may be interrupted if those subjects are unavailable because of social distancing. In some cases, the extent to which research activities can continue may depend on the duration of the disruption; for example, analyzing data and preparing results for publication may no longer be an option once all existing data have been analyzed and written up. These factors may affect different disciplines differently; for example, research in mathematics, computer science, and theoretical physics may be more amenable to remote working than research in agricultural science, geology, or microbiology. Cancellation of Conferences Travel restrictions and social distancing requirements have also resulted in the cancellation of numerous scientific and technical conferences. The person-to-person interactionsâboth formal and informalâthat take place at such conferences are an instrumental mechanism for knowledge sharing, peer feedback, the ideation of new research, technology transfer, and interactions between researchers and agency program managers. Other mechanisms, such as scientific papers and electronic communications, also offer other important ways to exchange knowledge and share ideas, but they lack some of the interactive advantages of in-person conferences. Accordingly, the cancellation of scientific and technical conferences may have a detrimental impact on advances in knowledge and the benefits that emerge from such knowledge. These adverse effects apply both to federal scientists and engineers and to their counterparts in academia and the private sector who work on federally funded R&D. The impact of cancelling conferences may be particularly significant in certain fields. In computer science, for example, papers published in conference proceedings may be as influential as journal articles, to an extent that is rare in other fields. In some cases, conferences are continuing virtually with attempts to facilitate informal interactions that would normally take place in person. For example, the annual Conference on Retroviruses and Opportunistic Infections, originally scheduled to be held in Boston in March 2020, was converted to a virtual conference, with prerecorded presentations, live webcasts, and electronic poster presentations. In April 2020, the annual International Conference on Learning Representations (devoted to machine learning) plans to present papers using prerecorded videos and offer online opportunities to ask questions of speakers, see questions and answers from other participants, take part in discussion groups, meet with sponsors, and join groups for networking. Scientific and technical conferences are often run by professional societies and other organizations that rely on them for revenue. Cancellations are likely to result in financial losses for these organizations as expected revenues are not realized and cancellation costs associated with the use of hotels, meeting facilities, and other services are incurred. Such losses can be considerable for the organizations involved. The cancellation of the March 2020 annual meeting of the American Physical Society cost the society about $7 million, about 12% of its typical annual revenues; other societies have reported cancellation losses that wiped out essentially all of their financial reserves. Federal agencies also run scientific and technical conferences. While these conferences are not generally a significant source of agency revenues, some agencies are likely to face one-time cancellation costs that may be considerable. Researchers planning to attend conferences that have been cancelled may have incurred nonrefundable travel or lodging expenses. Some agencies have determined that awardees may charge these costs to their research awards despite regulations that would normally prohibit doing so. Some of the same considerations apply to other types of meetings. For example, some DOE scientific user facilities have cancelled or postponed their annual user meetings, limiting opportunities for facility outreach and user engagement. Effects on R&D That Is Not Suspended Efficiency and Quality Even when R&D projects can continue, restrictions may affect efficiency or quality. According to one space policy expert, "The enforced separation of people working on the same or related tasks will inject delays and miscommunications. It will certainly be an obstacle to schedules and success in activities like preparing for a launch or building an exploratory spacecraft." A U.S. researcher working remotely on a particle physics experiment has described the inefficiency of guiding an on-site technician through installing a piece of electronics: "I've spent probably 3 hours over the past 24 on Skype with somebodyâ¦. He says something then points the webcam at what we're looking at, then we talk a little bit more." Others note the need to devote time to emergency planning. Additional Costs Institutions may incur unplanned expenses even for R&D that is not suspended. For example, they may need additional computing and networking equipment and services to accommodate researchers working remotely. Janitorial expenses may increase at facilities that remain open, if additional cleaning is required to guard against the spread of infection. Prices may increase for materials and equipment that are in short supply. Disrupted Access to Supplies and Services R&D at institutions that remain open may also be affected by disruptions to the supply of materials and equipment or by closures at collaborating research institutions. Laboratories have reported shortages of widely used supplies, such as RNA-extraction kits, swabs, and personal protective equipment, that are in high demand for COVID-19 testing and patient care. Basic laboratory supplies such as reagents and pipette tips, when still available, may be on backorder or available only at multiples of the usual price. Depending on the duration of the pandemic, NASA's plans for a 2021 launch of the James Webb Space Telescope may be jeopardized. It is to be launched from a European Space Agency spaceport in Kourou, French Guiana, but France suspended launch campaigns from the Guiana Space Center on March 16, 2020, due to the COVID-19 pandemic. Shifts in R&D Focus In some cases, agencies and researchers are shifting their research focus to COVID-19 related topics. The National Institutes of Health (NIH) has issued several funding opportunity announcements for researchers to submit competitive revisions or seek supplemental funding for existing projects, in order to redirect their research efforts to COVID-19. Other agencies that are typically less focused on health research have also sought to shift their R&D priorities. For example, light source user facilities operated by the DOE Office of Basic Energy Sciences are used for structural biology research in partnership with NIH and universities. According to DOE, these facilities are making "every effort to give [COVID-19] researchers priority access" and "want to ensure they are doing everything possible to enable research into this virus and the search for an effective vaccine or other treatment." More generally, DOE wrote an open letter to the research community asking for "ideas about how DOE and the National Labs might contribute resources to help address COVID-19 through science and technology efforts and collaborations." A newly formed consortium of agencies, universities, and companies is making supercomputing resources available "to accelerate understanding of the COVID-19 virus and the development of treatments and vaccines." The NASA Earth Science program has provided guidance to "investigators looking to reprioritize currently-funded efforts" and noted that an existing funding opportunity could support "investigations making innovative use of NASA satellite data to address â¦ impacts of the COVID-19 pandemic." NIST has announced a new grant opportunity under the Manufacturing USA National Emergency Assistance Program to support rapid, high-impact projects that support the nation's response to the COVID-19 pandemic. Up to $2 million is to be available to Manufacturing USA institutes under the program. Other Financial and Infrastructural Effects Shutdown and Restart Costs Suspending research may result in additional costs for activities such as animal care, maintenance of cell cultures and biological samples, and safe storage of hazardous materials. Restarting research, when conditions permit, may also incur costs for staff time and supplies to bring experimental equipment back to operational status, reestablish laboratory animal populations, or replace masks and other personal protective equipment that was donated to hospitals and first responders during the pandemic. The extent to which these costs may be covered out of existing federal research awards is not yet clear. Auditing Issues There may be future auditing issues for federally funded research that is redirected to address COVID-19, or for federally funded researchers who incurred costs to shut down and restart their projects or donated personal protective gear that had been paid for out of grant funds. Even if these changes had the support of the federal funding agency, the time-sensitive circumstances may mean that not all approvals were adequately documented to satisfy auditing requirements. The flexibilities provided to funding agencies in these circumstances (see " Federal Actions to Date " below) may not yet be aligned with corresponding flexibilities for accounting and auditing. University-Based Shared Research Infrastructure There are specific challenges for shared university research infrastructure, including core facilitiesâspecialized laboratories with unique instruments and capabilities that provide services to an institution's researchers âas well as animal care facilities and clinical trial infrastructure. These facilities are typically supported mostly through user fees, often paid from federal funds that are supporting a user's research. They are widely used: one university reported that a majority of its grant-funded research in FY2019 relied in part on core facilities, while a majority of its NIH-funded research made use of shared animal care facilities. Much of this infrastructure has closed, creating uncertainty about funding for shutdown and restart costs as well as continuity of pay for technical staff. Some facilities remain open to support research that is continuing, but open facilities may face their own financial challenges in continuing to operate, as the fees that usually support them are likely to be reduced by the suspension of research by some of their users. Delayed Availability of Major R&D Equipment Planned R&D may be delayed by interruptions in the development or manufacturing of major equipment. NASA, for example, has suspended work on the James Webb Space Telescope, which had been scheduled for launch in March 2021, and on the Space Launch System rocket and Orion crew capsule, needed for its plans to land humans on the Moon in 2024. Loss of Revenues by Federal R&D Agencies Some federal laboratories engage in R&D activities under a Work for Others (WFO) or similar agreement. Using a WFO, a federal agency, federal laboratory, or company can pay to have R&D conducted by another federal laboratory. This often enables access to unique facilities, equipment, and personnel. While the cancellation or suspension of WFO projects due to the COVID-19 response may reduce costs to the sponsoring organization, it may simultaneously reduce revenue that would otherwise have supported the staff, facilities, and equipment of the laboratory that was to perform the work. According to the Government Accountability Office, from FY2008 through FY2012, DOE performed about $2 billion worth of R&D annually under WFO agreements, accounting for 13%-17% of total DOE laboratory revenues. Most of the work (88%) was performed for other federal agencies. NIST conducted $94.4 million in research, development and supporting services for other federal agencies in FY2019. NIST certifies and provides more than 1,300 Standard Reference Materials (SRM) that are used to perform instrument calibrations, verify the accuracy of specific measurements, and support the development of new measurement methods. NIST SRMs are used by industry, academia, and government to facilitate commerce and trade and advance R&D. NIST revenues from SRMs in FY2019 were $21.8 million. NIST also provides calibration and testing services for industry, academia, and government; its FY2019 revenues for these services were $33.5 million. As of the date of this report, NIST continues to provide SRM and calibration services, but it is unclear how long NIST will be able to provide these services if the pandemic continues for an extended period. Future Availability of Federal Funding As some agencies and researchers shift their R&D priorities to respond to the COVID-19 pandemic, the funding available for R&D on other topics may be reduced, at least in the near term. More generally, the federal funding needed for the national response to COVID-19 may reduce the overall federal resources available for R&D. While supplemental appropriations already enacted include additional funds for R&D and institutions that conduct R&D, increased federal spending to address the pandemic, coupled with decreased federal revenue associated with potential economic contraction, may lead to a future fiscal environment with constrained spending across the government. These outcomes may not be clear for some time, however, and may depend on a host of independent decisions by agencies and Congress. Impact on Students, Postdoctoral Researchers, and Early-Career Faculty University research typically involves postdoctoral researchers (postdocs), graduate students, and sometimes undergraduate students in addition to faculty members. Even if the nature of a particular research project qualifies it to continue despite COVID-19, many universities are limiting the continued participation of postdocs and students. Cancelled or suspended research may be of particular concern to these groups. Continuing to work remotely may also be more challenging for students, postdocs, and early-career faculty who have families, as their children are more likely to be young than those of more senior researchers. Failing to complete a project on time may delay the completion of a degree or make it difficult to demonstrate research success when applying for a job or seeking tenure. Cancelled conferences are also a particular concern for postdocs, students, and other early-career researchers, who often rely on conferences to meet more senior scientists, present their work, and find jobs. In some circumstances, there may be uncertainty about continuity of pay for students employed as research assistants or teaching assistants. Because there are disparities between disciplines in the extent to which research can continue while working remotely, students and postdocs in different disciplines may find disparities in how their careers are affected. Disparities may also arise between students and postdocs whose experiments can be suspended and restarted and those whose experiments must simply be abandoned and begun afresh. To the extent that research disruptions, delayed graduation, or difficulty obtaining in-field employment discourage students and early-career researchers from continuing in their field of research, those outcomes could create challenges for the future science and engineering workforce. Continued travel restrictions may also affect the enrollment of foreign science and engineering students in U.S. universities in the 2020-2021 academic year. As well as potentially creating financial challenges for some universities, reduced international enrollment could have long-term workforce consequences, given that many foreign students in science and engineering remain in the United States after graduation. Federal Actions to Date On March 9, 2020, OMB authorized federal agencies to provide certain short-term relief from administrative, financial management, and auditing requirements for grantees involved in research related to COVID-19. On March 18, four organizations representing universities and other research organizations wrote to OMB requesting the expansion of these flexibilities to all research grants. On March 19, OMB provided relief for "an expanded scope of recipients affected by the loss of operational capacity and increased costs due to the COVID-19 crisis." The Appendix summarizes OMB's government-wide administrative actions, extensions of authorities, and guidance. It also provides a link to a compilation maintained by the Council on Governmental Relations (COGR) of guidance from federal agencies, academic institutions, and other organizations, as well as frequently asked questions about how federal agencies that fund R&D are implementing the OMB-directed flexibilities. Some agencies have compiled special guidance for awardees. For example, an NIH webpage provides information on changes to proposal submission and award management, updated policies on clinical trials and animal welfare, and revised procedures for peer review. The National Science Foundation (NSF) has issued guidance for contractors operating NSF-funded facilities. COGR has compiled links to such guidance, sorted by agency, along with links to institutional guidance from a long list of individual universities. Some agencies have extended the due dates for research proposals, announced that they will accommodate applications received late, or reduced the institutional approvals required for an initial proposal. While these accommodations provide additional flexibility for researchers, delays in receiving and acting on proposals may result in delays in issuing awards. Some agencies have announced accommodations for existing awardees, such as no-cost extensions of awards, extensions of financial and other reporting deadlines, changes to the allowability of cancellation fees and costs resulting from the pausing and restarting of research, and allowing the continued payment of salaries and benefits out of grant funds. While these steps give researchers additional flexibility, they may create challenges once research resumes. For example, grant funds that have been spent on cancellation fees, activities required for the suspension of research, or researcher salaries while research is suspended necessarily reduce the balance of funds subsequently available to complete a research project. No-cost extensions extend an award's completion date; they do not provide additional funds to cover costs incurred because of delays. Congress has already enacted some legislation with R&D-related funding and provisions in response to the COVID-19 pandemic. For example The Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 ( P.L. 116-123 ), enacted on March 6, 2020, appropriated $836 million in supplemental funding for NIH, with additional transferrable amounts from other accounts. Some of the $3.1 billion appropriated to the Public Health and Social Services Emergency Fund may also be made available to the Biomedical Advanced Research and Development Authority for the development of COVID-19 medical countermeasures, such as therapies and vaccines. The Coronavirus Aid, Relief, and Economic Security (CARES) Act ( P.L. 116-136 ), enacted on March 27, 2020, appropriated more than $1 billion in supplemental funding for R&D. Most of this total was for research on COVID-19 itself, including $945 million for NIH, $415 million for research, development, testing, and evaluation (RDT&E) in the DOD Defense Health Program, and smaller sums for several other agencies. The act also provided funding to several R&D agencies to offset unanticipated costs arising from the pandemic. For example, NASA received $60 million to cover the costs of mission delays caused by center closures, while the U.S. Forest Service received $3 million to reestablish experiments affected by travel restrictions. Section 18004 of the CARES Act established a $14 billion Higher Education Emergency Relief Fund for colleges and universities. At least half of this total must be allocated for emergency financial aid grants to students. It is not yet clear how much, if any, will be available to address issues directly related to R&D. Section 3610 of the CARES Act authorized federal agencies to reimburse contractors for "any paid leave, including sick leave, a contractor provides to keep its employees or subcontractors in a ready state" when they are unable to work on-site due to facility closures and telework is not an option. Although this provision is not specifically directed at R&D, it could be significant for agencies such as DOE and NASA whose R&D facilities are staffed with numerous contractor employees. Section 12004 of the CARES Act authorized the Patent and Trademark Office to temporarily suspend, modify, adjust, or waive timing deadlines under the Patent Act and the Trademark Act during the COVID-19 emergency period. Section 13006 of the CARES Act gave DOD additional flexibility in the use of its other transaction authority for the development of prototypes related to COVID-19. The CARES Act provided NIST laboratories with $6 million in additional funding, including $5 million to support and accelerate measurement science related to viral testing and biomanufacturing; $50 million for the NIST Manufacturing Extension Partnership program to help companies across the country transform operations in support of COVID-19 related needs and to foster development of COVID-19 related supply chains; and $10 million for research related activities at Manufacturing USA's National Institute for Innovation in Manufacturing Biopharmaceuticals (NIIMBL). The CARES Act provided $2.25 million for the Environmental Protection Agency's Science and Technology account to prevent, prepare for, and respond to coronavirus, domestically or internationally, including $1.5 million for research on methods to reduce the risks from environmental transmission of coronavirus via contaminated surfaces or materials. The CARES Act provided NSF with $76 million "to prevent, prepare for, and respond to coronavirus, domestically or internationally, including to fund research grants and other necessary expenses." The Senate Appropriations Committee summary notes that $75 million is to support NSF's RAPID grant mechanism, "which will support near real-time research at the cellular, physiological, and ecological levels to better understand coronavirus," and $1 million is to assist in the administration of these grants. In the House, Speaker Pelosi has announced plans for a special committee to oversee the federal response to COVID-19, including the spending of supplemental funding provided under the above legislation. Potential Additional Federal Actions Several organizations from industry and academia have put forward policy recommendations to address R&D-related challenges resulting from COVID-19. Congress may also seek to take additional actions through legislation or oversight. The Commercial Spaceflight Federation, an industry group, has asked Congress for legislation directing the Internal Revenue Service to provide for immediate refunds of accumulated research and experimentation (R&E) tax credits. It argues that this would allow "continued innovation through R&D reinvestment." In many cases, under current law, companies that qualify for this credit are unable to use the full amount immediately because of insufficient tax liability or other factors; unused amounts can be carried forward for up to 20 years. The credit only applies to R&D funded by a company itself, but companies that conduct R&D with federal funding often fund their own R&D as well. Organizations representing research universities, medical schools, and teaching hospitals have asked Congress, among other steps, to give research institutions receiving federal funding additional flexibility to cover researcher salaries and benefits while their institutions are affected, to provide $13 billion in additional extramural research funding, and to allow agencies to reprogram any supplemental funds that are not spent within a year for new awards. The latter proposal, they argued, "could have a stimulative effect and help to address the nation's research competitiveness." Noting that "many scientific societies have been and will continue to be adversely impacted by meeting and conference cancellations as a result of COVID-19," the Federation of American Societies for Experimental Biology has asked Congress to include measures such as zero-interest loans and grant to associations, nonprofit organizations, and other tax-exempt organizations in future economic stimulus packages and supplemental appropriations measures. While OMB has issued guidance to agencies regarding administrative flexibilities and other issues, as described above, agency implementation of that guidance has varied. Representatives of the Association of American Universities have indicated that more uniform implementation by federal research funding agencies would reduce administrative burdens and uncertainties for award recipients. Congress may consider a variety of other legislative and oversight actions, either in the near term while the pandemic continues or retrospectively to improve the response to future crises. These might include seeking a clearer understanding of how federally funded R&D is being affected by COVID-19, through hearings, mandates for agency reports, support for academic studies, or mandates for reports by organizations such as the Government Accountability Office or the National Academies of Sciences, Engineering, and Medicine; directing OMB, the Office of Science and Technology Policy, or an interagency task force to develop more uniform guidance on how to identify essential or critical R&D activities, with recommendations for implementing that guidance at government laboratories, universities, companies, and other institutions involved in intramural and extramural federally funded R&D; and establishing a post-pandemic task force on the federal R&D enterprise to examine lessons learned from the COVID-19 pandemic and recommend policy changes to improve the national response of the R&D community in the event of future pandemics. Concluding Observations Over time, the near-term and long-term effects of COVID-19 on the nation's R&D enterprise will become more apparent. Congress may monitor these effects and develop a deeper understanding of their implications for the wide-ranging national policy objectives that motivate federal spending on R&Dâsuch as national security, economic growth and job creation, public health, transportation, and agricultureâas well as the implications for the U.S. science and engineering workforce and the education of the next generation of American scientists, engineers, and technicians. The effects of COVID-19 on federally funded R&D, as described in this report, may adversely affect the pace of R&D generally and the pace of the innovation that builds on it. The national and global economic consequences may have implications for economic growth, the workforce, the development of new products and services, and the competitiveness of companies and nations. The extent of these effects cannot yet be known and may not be fully understood for years. An optimist might hope for a silver lining. If the R&D community learns to overcome some of the challenges of remote working and travel restrictions, that might create future opportunities, after the COVID-19 pandemic is over, for increased workplace flexibilities and reduced travel expenses. The pandemic has also highlighted issues that Congress may seek to address in the future, such as additional R&D on cybersecurity for virtual collaboration and rural access to broadband internet for off-site work during emergencies. Appendix. Government-wide COVID-19 Related Guidance and Other Resources Office of Management and Budget Memoranda OMB has issued a number of memoranda related to the COVID-19 response. These memoranda are written broadly, not focused solely on federal R&D activities. Nevertheless, elements included in these memoranda have relevant information regarding the operation of the federal R&D enterprise. The memoranda are downloadable from the OMB website. As of the date of this report, COVID-19-related memoranda include M-20-19 Harnessing Technology to Support Mission Continuity (March 22, 2020) Directs agencies to utilize technology to the greatest extent practicable to support mission continuity. The memorandum addresses a set of frequently asked questions to provide additional guidance and assist the IT workforce as it addresses impacts of COVID-19. https://www.whitehouse.gov/wp-content/uploads/2020/03/M-20-19.pdf M-20-18 Managing Federal Contract Performance Issues Associated with the Novel Coronavirus (COVID-19) (March 20, 2020) Identifies certain agency actions to relieve short-term administrative, financial management, and audit requirements under 2 C.F.R. Â§200, Uniform Administrative Requirements, Cost P rinciples and Audit Requirements for Federal Awards , without compromising federal financial assistance accountability requirements. These include (1) flexibility with System for Award Management (SAM) registration/recertification for applicants, (2) waiver for Notice of Funding Opportunities (NOFOs) publication, (3) pre-award costs, (4) no-cost extensions on expiring awards, (5) abbreviated noncompetitive continuation requests, (6) expenditure of award funds for salaries and other project activities, (7) waivers from prior approval requirements, (8) exemption of certain procurement requirements, (9) extension of financial and other reporting, and (10) extension of Single Audit submission. In accordance with 2 CFR Â§200.102, "Exceptions," OMB is allowing federal agencies to grant class exceptions in instances where the agency has determined that the purpose of the federal awards is to support the continued research and services necessary to carry out the emergency response related to COVID-19. The memorandum also reminds agencies of existing flexibility to issue exceptions on a case-by-case basis in accordance with 2 CFR Â§200.102, "Exceptions." https://www.whitehouse.gov/wp-content/uploads/2020/03/M-20-18.pdf M-20-17 Administrative Relief for Recipients and Applicants of Federal Financial Assistance Directly Impacted by the Novel Coronavirus (COVID-19) Due to Loss of OperationsÂ (March 19, 2020) Identifies steps to help ensure safety while maintaining continued contract performance in support of agency missions, wherever possible and consistent with the precautions issued by the Centers for Disease Control and Prevention (CDC). Agencies are urged to work with their contractors, if they have not already, to evaluate and maximize telework for contractor employees, wherever possible; be flexible in providing extensions to performance dates if telework or other flexible work solutions, such as virtual work environments, are not possible, or if a contractor is unable to perform in a timely manner due to quarantining, social distancing, or other COVID-19 related interruptions; take into consideration whether it is beneficial to keep skilled professionals or key personnel in a mobile-ready state for activities the agency deems critical to national security or other high priorities; consider whether contracts that possess capabilities for addressing impending requirements such as security, logistics, or other functions may be retooled for pandemic response consistent with the scope of the contract; and leverage the special emergency procurement authorities authorized in connection with the President's emergency declaration under Section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. Â§Â§5121-5207 (the Stafford Act). The memorandum also provides answers to a set of frequently asked questions intended to assist the acquisition workforce as it addresses impacts due to COVID-19. https://www.whitehouse.gov/wp-content/uploads/2020/03/M-20-17.pdf M-20-16 Federal Agency Operational Alignment to Slow the Spread of Coronavirus COVID-19 (March 17, 2020) Provided agencies with initial guidance, consistent with the President's Coronavirus Guidelines for America, directing agencies to take appropriate steps to prioritize all resources to slow the transmission of COVID-19, while ensuring mission-critical activities continue. The memorandum further required all agencies, within 48 hours, to review, modify, and begin implementing risk-based policies and procedures based on CDC guidance and legal advice, as necessary to safeguard the health and safety of federal workplaces to restrict the transmission of COVID-19. https://www.whitehouse.gov/wp-content/uploads/2020/03/M-20-16.pdf M-20-15 Updated Guidance for the National Capital Region on Telework Flexibilities in Response to Coronavirus (March 15, 2020) Directs agencies to offer maximum telework flexibilities to all current telework-eligible employees, consistent with operational needs of the departments and agencies as determined by their heads, as well as to use all existing authorities to offer telework to additional employees, to the extent their work could be telework enabled. https://www.whitehouse.gov/wp-content/uploads/2020/03/M20-15-Telework-Guidance-OMB.pdf M-20-14 Updated Federal Travel Guidance in Response to Coronavirus (March 14, 2020) Advises that "only mission-critical travel is recommended at this time." The memorandum also authorizes executive branch agency heads to determine what travel meets the mission-critical threshold and provides a list of factors to be considered in this determination. https://www.whitehouse.gov/wp-content/uploads/2020/03/M-20-14-travel-guidance-OMB-1.pdf M-20-13 Updated Guidance on Telework Flexibilities in Response to Coronavirus (March 12, 2020) Encourages agencies to maximize telework flexibilities (1) to eligible workers within those populations that the CDC identified as being at higher risk for serious complications from COVID-19 (e.g., older adults and individuals who have chronic health conditions, such as high blood pressure, heart disease, diabetes, lung disease, compromised immune systems); and (2) to CDC-identified special populations including pregnant women. Further directs that agencies do not need to require certification by a medical professional, and may accept self-identification by employees in one of these populations. The memorandum also encourages agencies to consult with local public health officials and the CDC about whether to extend telework flexibilities more broadly to all eligible teleworkers in areas in which either such local officials or the CDC have determined there is community spread. Agencies are also encouraged to extend telework flexibilities more broadly to accommodate state and local responses to the outbreak, including, but not limited to, school closures. Agencies are encouraged to consider the mission-critical nature of employees' work in determining telework and leave decisions. https://www.whitehouse.gov/wp-content/uploads/2020/03/M-20-13.pdf M-20-11 Administrative Relief for Recipients and Applicants of Federal Financial Assistance Directly Impacted by the Novel Coronavirus (COVID-19) (March 9, 2020) Identifies and authorizes agency actions to relieve short-term administrative, financial management and audit requirements under 2 C.F.R. Â§200, Uniform Administrative Requirements, Cost P rinciples and Audit Requirements for Federal Awards , without compromising federal financial assistance accountability requirements. Notes that OMB is allowing federal agencies to grant class exceptions in instances where the agency has determined that the purpose of the federal awards is to support the continued research and services necessary to carry out the emergency response related to COVID-19. The memorandum also notes agencies' existing flexibility to issue exceptions on a case-by-case basis in accordance with 2 C.F.R. Â§200.102, "Exceptions." https://www.whitehouse.gov/wp-content/uploads/2020/03/M-20-11.pdf Compilation of Other Resources The Council on Governmental Relations maintains an online compilation of guidance from federal agencies, academic institutions, and other organizations, as well as responses to frequently asked questions about how federal agencies that fund R&D are implementing the OMB-directed flexibilities. See "Institutional and Agency Responses to COVID-19 and Additional Resources," https://www.cogr.edu/institutional-and-agency-responses-covid-19-and-additional-resources .	Summary:	gov_report	1,024	null	96
crs_R46340	crs_R46340_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The Department of Veterans Affairs (VA) provides a range of benefits and services to veterans who meet certain eligibility criteria. These benefits and services include, among other things, hospital and medical care; disability compensation and pensions; education; vocational rehabilitation and employment services; assistance to homeless veterans; home loan guarantees; administration of life insurance, as well as traumatic injury protection insurance for servicemembers; and death benefits that cover burial expenses. The department carries out its programs nationwide through three administrations and the Board of Veterans' Appeals (BVA). The Veterans Health Administration (VHA) is responsible for health care services and medical and prosthetic research programs. The Veterans Benefits Administration (VBA) is responsible for, among other things, providing disability compensation, pensions, and education assistance. The National Cemetery Administration (NCA) is responsible for maintaining national veterans cemeteries; providing grants to states for establishing, expanding, or improving state veterans cemeteries; and providing headstones and markers for the graves of eligible persons, among other things. In addition to providing health care services to veterans and certain eligible dependents, the VHA must, by statute, serve as a contingency backup to the Department of Defense (DOD) medical system during a national security emergency and provide support to the National Disaster Medical System and the Department of Health and Human Services (HHS) as necessary in response to national crises. The department must also take appropriate actions to ensure VA medical centers are prepared to protect veteran patients and staff during a public health emergency. Novel Coronavirus (COVID-19)13 On December 31, 2019, the World Health Organization (WHO) learned of a cluster of pneumonia cases in Wuhan City, Hubei Province of China. The WHO has since linked these illnesses to a disease, called Coronavirus Disease 2019 or COVID-19, caused by a previously unidentified strain of coronavirus, designated SARS-CoV-2. On January 30, 2020, an Emergency Committee convened by the WHO Director-General declared the COVID-19 outbreak to be a Public Health Emergency of International Concern (PHEIC). On January 31, the Secretary of Health and Human Services declared a public health emergency under Section 319 of the Public Health Service Act (42 U.S.C. Â§247d). On March 11, 2020, the WHO characterized the COVID-19 outbreak as a pandemic. Two days later, on March 13, the President declared the COVID-19 outbreak a national emergency, beginning March 1, 2020. The VHA plays a significant role in the domestic response to a pandemic. The VHA is one of the largest integrated direct health care delivery systems in the nation, caring for more than 7.1 million patients in FY2020 and providing 123.8 million outpatient visits at approximately 1,450 VA sites of care. The VHA employs a workforce of 337,908 full-time equivalent employees (FTEs), largely composed of health care professionals. In addition, the VHA has a statutory mission to contribute to the overall federal emergency response capabilities. Scope and Limitations of This Report This report provides an overview of VA's and Congress's response thus far to the rapidly evolving COVID-19 pandemic. The report does not provide an exhaustive description of all of the department's activities, and it is based on publicly available information and daily updates provided from the VA. The report is organized as follows: first, it provides details on VHA's, VBA's, and NCA's response activities; second, it provides details on VA's emergency preparedness ("Fourth Mission") activities to provide support to the overall federal emergency response; and third, it describes congressional activity related to VA and veterans programs and services. The COVID-19 pandemic is a rapidly evolving situation and information changes on a daily, or often hourly, basis. The Appendix provides a summary of VHA's emergency authorities. Medical Care for Veterans During the COVID-19Â Outbreak VHA's provision of medical care to veterans in response to the COVID-19 outbreak includes implementing mitigation strategies at VHA sites of care, as well as testing and treating veterans diagnosed with or suspected of having COVID-19. (A general description of medical care to veterans is provided in other CRS reports. ) In late February 2020, the VA provided information to congressional oversight committees on the number of positive and presumptive positive cases of COVID-19. On March 13, 2020, the department began publishing this information publicly on its website, which it updates on a regular basis. The VA has been providing regular updates to congressional oversight committees since that time. The VA has published two public documents that provide valuable information to patients and the public regarding the response to COVID-19: (1) a COVID-19 response plan that provides operational details for both medical care for veterans, as well as other VHA missions, and (2) Coronavirus Frequently Asked Questions (FAQ) for patients. The VA COVID-19 response plan is summarized in more detail in the " Emergency Preparedness ("Fourth Mission") " section of this report. This section describes current health system capacity (including staffing changes), guidance for patients, mitigation at VHA sites of care (including limitations to community care), and testing and treatment for COVID-19. Health System Capacity This subsection reflects point-in-time information provided by the VA to reflect the current capacity of the system. As of April 14, 2020, veterans and VHA employees at sites of care spanning the United States have been diagnosed with COVID-19. The vast majority of COVID-19-positive veterans are being treated in outpatient settings, with a minority in VA inpatient intensive care unit (ICU) and acute care settings. The COVID-19 pandemic is a rapidly evolving situation and information changes on a daily, or often hourly, basis. In response to the pandemic, the VA increased the number of ICU and acute care beds that are typically available. As of April 29, 2020, bed capacity across the health system is 12,215, with far less than half occupied. No regional or local level occupancy data have been reported. The VA started deploying Vet Centers, which provide a range of counseling services, in locations facing large COVID-19 outbreaks. The VA is reporting that the health system has adequate levels of personal protective equipment (PPE), including N95 respirators. Earlier media reports, citing internal VA memoranda, stated that the VA has a shortage of PPE and hospitals are being directed to decide which employees get certain supplies. The media reports suggested that only employees that work directly with COVID-19 patients are to be provided N95 respirators. An April 16, 2020, memorandum to Veterans Integrated Service Networks (VISN) directors from the VA Deputy Under Secretary for Health for Operations and Management confirmed that the VA received a significant number of N95 respirators and is working to secure additional facemasks and surgical masks. The memo specified that facilities have enough masks and respirators to follow CDC-based contingency strategies for supply management. The memo provides system-wide guidance for staff use of respirators and masks. Staff providing direct care should use N95 respirators. If N95 respirators are in short supply, staff are directed to use surgical masks for low-risk care on suspected or confirmed COVID-19 patients. Staff providing care for patients in specified institutional settings will be provided with one facemask or surgical mask per day. It goes on to provide guidance to VISN directors on how to support medical facility directors in implementing contingency and crisis strategies based on the referenced CDC guidelines. Medical facility directors have authority to determine allocation and crisis standards of care, in the event that resources become scarce. The VA is allocating equipment within VISNs, as needed, and it has increased pharmaceutical inventories from 8 days to 10 days and is utilizing certain medications needed for hospitalized COVID-19 patients as national system-wide resources. As described below, the VA has taken a number of actions to ensure that there is adequate staffing and that safeguards are in place to protect frontline employees. These actions are described in the next section. Employment Actions Related to the Pandemic Response Actions related to employment can be separated into two categories: (1) actions to increase the capacity of the health system during the pandemic response and (2) actions to protect current employees from contracting the COVID-19 virus. Employment Actions to Increase Health System Capacity The VA submitted a request to the Office of Personnel Management (OPM) and received approval to waive a requirement that retiree' salaries be reduced when rehired to reflect the retirement annuity they already receive, otherwise known as a dual compensation reduction waiver. The VA is asking retired clinicians to register online to join the workforce and to act as surge capacity if needed. The registration form adds the reemployed retirees to VHA's national provider database and matches them to opportunities based on their specialties. The VA has indicated that it is exploring the use of existing hiring authorities to make 30-day appointments where a critical need exists, one-year appointments in remote/isolated areas, and temporary not-to-exceed 120-day appointments. VA on-boarded 3,107 new hires in the period between April 22 and April 28, 2020. In addition, activation of the Disaster Emergency Medical Personnel System (DEMPS) allows the VA to deploy personnel from areas that are less impacted by COVID-19 to reinforce staff levels at other facilities as needed (e.g., facilities in New York City and New Orleans). Under DEMPS, movement of personnel must be approved by the VISN and the originating medical center's director. Employment Actions to Protect Employees A number of VHA employees have been diagnosed with COVID-19 or are being monitored for COVID-19. As of April 29, 2020, over 2,200 employees have been diagnosed with COVID-19 and 20 employees have died from the disease. The VA has taken specific actions to protect employees, which, in turn, increases health system capacity by reducing the need for front-line employees to take leave during the pandemic. The VA is following CDC precautions to reduce the likelihood of transmission of COVID-19 among employees. According to the VA, staff have been given guidance to remain home if symptoms develop, to obtain health checks for symptoms associated with COVID-19 while at work, and to report symptoms through the correct process. Employees are also being encouraged to develop personal and family disaster plans that enable them to continue working. Employees are encouraged to telework, if their work can be accomplished remotely. Sites of care are encouraged to use alternative treatment methods wherever possible, such as telemedicine and telehealth. To prevent the spread of infection, the VA has dedicated specific treatment areas for COVID-19 patients. This and other mitigation efforts at VHA sites of care are discussed below. Mitigation at VHA Sites of Care The VHA operates care settings with varying levels of patient risk for developing severe symptoms if COVID-19 is contracted. Each VA medical center is implementing a two-tiered system to mitigate the potential for spread of the virus, with one zone for active COVID-19 cases and a passive zone for care unrelated to COVID-19. The VA has canceled all elective surgeries and limited routine appointments to only those with the most critical need. This section describes mitigation efforts at community living centers (CLCs; nursing homes) and spinal cord injury/disorder (SCI/D) centers, which are high-risk settings, separate from other care settings. The VA has implemented different screening processes and other pandemic responses depending on the care setting. On March 26, 2020, the VA Office of Inspector General (OIG) published the results of inspections of VA facilities for implementing the enhanced screening processes and pandemic readiness, which took place between March 19 and March 24. The findings of those inspections for each care setting appear in the appropriate sections below. CLCs and SCI/Ds On March 10, 2020, the VA announced safeguards to protect nursing home residents and spinal cord injury patients. As of that date, no visitors are allowed at either VA nursing homes or spinal cord injury/disorder centers. The only exception to this policy is if a veteran is in the last stages of life, in which case the VA allows visitors in the veteran's room only. The VA is not accepting any new admissions to nursing homes and is limiting new admissions to SCI/D centers. The OIG tested the no-access policy at 54 CLCs and found the majority to be in compliance with the policy. Nine of the 54 CLCs tested were prepared to allow OIG staff to enter, despite the no-access policy. Enhanced Screening at All Sites of Care The VA implemented enhanced screening procedures at all sites of care to screen for respiratory illness and COVID-19 exposure. Because each facility determines its own enhanced screening procedures, those procedures vary at the local level. However, the VA has designed standardized screening questions for each facility. Screening consists of the following three general questions: Do you have a fever or worsening cough or shortness of breath or flu-like symptoms? Have you or a close contact traveled to an area with widespread or sustained community transmission of COVID-19 within 14 days of symptom onset? Have you been in close contact with someone, including health care workers, confirmed to have COVID-19? The VA's COVID-19 response plan provided specific potential questions that sites of care can implement in different care settings. Those screening questions also include screening scenarios for virtual triage via phone, telehealth, or secure messaging. If screened individuals are determined to be at risk, staff are instructed to isolate them immediately. If critically ill, individuals are transferred to the emergency department. If stable, individuals are sent home with printed instructions to isolate and contact their primary care providers. The OIG evaluated screening procedures at 58 medical centers and 125 community-based outpatient clinics (CBOC). The OIG found that 41 of 58 (71%) of medical centers' screening processes were generally adequate, 16 (28%) had some opportunities for improvement, and one medical center had inadequate screening procedures. The OIG found that the vast majority of CBOCs (97%) had screening processes in place. Four CBOCs had no screening process in place. Limitations on Community Care The VA instituted several changes to community care guidance during the COVID-19 pandemic response on community care access under the Veterans Community Care Program (VCCP). Under normal circumstances, veterans generally are eligible for access to medical care from non-VA community providers if they meet certain criteria, including wait time and drive time access standards and if the veteran elects to receive community care. The eligibility criteria are mandated by law, and the VA has no authority to waive them. However, as many non-VA providers are postponing or canceling routine care to mitigate the spread of COVID-19, wait times may be just as long or longer in the community. In addition, the VA indicated that community providers should not have veterans attend routine appointments in-person except where the urgency of in-person treatment outweighs the risk of contracting COVID-19. VA issued the following guidance to providers: convert routine in-person appointments to telehealth; follow CMS, CDC, state, and local guidance regarding screening, testing, case reporting, and PPE; plan for increased high acuity demand; communicate with local VA medical center regarding any veteran cases or exposure to COVID-19; episodes of care ordered through the VA can be extended by 60 days; and work with the third-party administrators of the community care network (CCN) to expand enrollment where possible. Guidance for Patients The VA is promoting the Coronavirus FAQ document as the main source of guidance for veterans. This document includes answers to broad questions about COVID-19, VA's role, testing, access to care, mental health, and visiting patients. A fact sheet with similar information is also available to patients. The VA is advising veterans who may be sick or who are exhibiting flu-like symptoms not to come to a VA facility. Instead, patients are asked to send a secure message through the VHA online portal, My HealtheVet, or to schedule a telehealth appointment. The VA is experiencing high call volumes at some facilities and call centers, so it is advising veterans to use online tools first. However, patients can call their health care providers instead of using the online tools available from the VA. In addition, the VA is advising patients to budget additional time for appointments due to enhanced screening measures at VA facilities. These enhanced screening measures, as well as other mitigation strategies at VHA facilities, are described below. COVID-19 Testing and Treatment65 This section describes the current VA policy on testing patients for COVID-19 and treatment following a COVID-19 diagnosis. COVID-19 Diagnostic Testing On March 13, 2020, the department began publishing the number of positive cases of COVID-19, and the number of tests conducted, on its public website, which it updates on a regular basis. Individual medical centers have discretion on where to send samples for testing. Samples can be tested at the Palo Alto VA Medical Center, state public health labs, or private labs. Individual providers decide whether to test for COVID-19 on a patient-by-patient basis. However, the VA has advised providers that to be tested, patients must be exhibiting respiratory symptoms and have another factor, such as recent travel or known exposure to someone who tested positive. Generally, diagnostic testing is a covered service under VA's standard medical benefits package, which is available to all veterans enrolled in the VA health care system. Some veterans are required to pay copayments for care that is not related to a service-connected disability. However, routine lab tests are exempt from copayment requirements. The Families First Coronavirus Response Act ( P.L. 116-127 ), enacted on March 18, 2020, does not allow the VA to charge any copayment or other cost-sharing payments for COVID-19 testing or medical visits during any period of this public health emergency. (For a discussion of P.L. 116-127 , see the " Congressional Response " section of this report.) COVID-19 Treatment The VA has not indicated whether it has developed a specific treatment plan for patients diagnosed with COVID-19. Treatment depends largely on the severity of symptoms that each patient experiences. The VA is handling coverage and cost of treatment for COVID-19 as it would for any other treatment for a condition that is not service-connected. Treatment for COVID-19 is a covered benefit under the VA standard medical benefits package. However, some veterans may have to pay copayments for both outpatient and inpatient care. Normal coverage rules apply for veterans who report to urgent care or walk-in clinics. To be eligible, a veteran must be enrolled in the VA health care system and must have received VA care in the past 24 months preceding the episode of urgent or walk-in care. Eligible veterans needing urgent care must obtain care through facilities that are part of VA's contracted network of community providers. These facilities typically post information indicating that they are part of VA's contracted network. If an eligible veteran receives urgent care from a noncontracted provider or receives services that are not covered under the urgent care benefit, the veteran may be required to pay the full cost of such care. Certain veterans are required to pay copayments for care obtained at a VA-contracted urgent care facility or walk-in retail health clinic. In addition, normal rules apply for veterans who report to non-VA emergency departments. To be eligible for VA payment or reimbursement, a veteran's non-VA care must meet the following criteria: The emergency care or services were provided in a hospital emergency department or a similar facility that provides emergency care to the public. The claim for payment or reimbursement for the initial evaluation and treatment was for a condition of such a nature that a prudent layperson would have reasonably expected that delay in seeking immediate medical attention would have been hazardous to life or health. A VA or other federal facility or provider was not feasibly available, and an attempt to use them beforehand would not have been considered reasonable by a prudent layperson. At the time the emergency care or services were furnished, the veteran was enrolled in the VA health care system and had received medical services from the VHA within the 24-month period preceding the furnishing of such emergency treatment. The veteran was financially liable to the provider of emergency treatment for that treatment. The veteran had no coverage under a health plan contract that would fully cancel the medical liability for the emergency treatment. If the condition for which the emergency treatment was furnished was caused by an accident or work-related injury, the veteran is required to first pursue all claims against a third party for payment of such treatment. Potential Vaccine Cost-sharing In the event that a vaccine is approved by FDA and brought to market, it is unclear whether certain veterans would be charged copayments for administration of the vaccine. Under current regulations, the VA is prohibited from charging copayments for "an outpatient visit solely consisting of preventive screening and immunizations (e.g., influenza immunization, pneumococcal immunization)." Homelessness and Housing Veterans experiencing homelessness live in conditions that could make them particularly vulnerable to COVID-19. Those who are unsheltered lack access to sanitary facilities. For those sleeping in emergency shelters, conditions may be crowded, with short distances between beds, and there may be limited facilities for washing and keeping clean. The VA administers programs to assist veterans experiencing homelessness and also manages several grant programs for nonprofit and public entities to provide housing and services to homeless veterans. These include the Homeless Providers Grant and Per Diem program (GPD), for transitional housing and services; the Supportive Services for Veteran Families program (SSVF), for short- to medium-term rental assistance and services; and Contract Residential Services (CRS), for providing housing for veterans participating in VA's Health Care for Homeless Veterans program. In addition, the Department of Housing and Urban Development (HUD), together with VA, administers the HUD-VA Supportive Housing program (HUD-VASH), through which veterans who are homeless may receive Section 8 vouchers to cover the costs of permanent housing and VA provides case management services. VA General Guidance for Homeless Program Grantees The VA released guidance on March 13, 2020, for its grantees that administer programs for veterans who are homeless. The guidance suggests grantees take a number of actions: Develop a response plan, or review an existing plan, and coordinate response planning with local entities, including health departments, local VA medical providers, and Continuums of Care. Plans should address staff health, potential staff shortages, and acquisition of food and other supplies, as well as how to assist veteran clients. Prevent infection through methods recommended by the CDC, such as frequent handwashing, wiping down surfaces, and informing clients about prevention techniques. In congregate living facilities, such as those provided through VA's Grant and Per Diem program, keep beds at least three feet apart (preferably six, if space permits), sleep head-to-toe, or place barriers between beds, if possible. Develop questions to ask clients about their health to determine their needs and how best to serve them. For new clients, interviews should occur prior to entry into a facility (such as over the phone), if possible, or in a place separate from other clients. If a client's answers to questions indicate risk of COVID-19, separate them from other program participants (have an isolation area, if possible), clean surfaces, and reach out to medical professionals. If isolation is not practical, reach out to other providers who might be able to isolate. Supportive Services for Veteran Families (SSVF) The VA has released additional specific guidance and flexibilities for SSVF providers. SSVF regulations allow funds to be used for emergency housing, including hotels and motels; however, this use of funds may occur only when no other housing options, such as transitional housing through GPD, are available. In response to COVID-19, however, grantees may use funds for high-risk veterans to live in hotels and motels instead of congregate settings. Due to Public Housing Authority (PHA) closures and remote work, veterans who have HUD-VASH vouchers, but who have not yet moved into a housing unit, may face delays in receiving rental assistance. This delay may occur if a PHA cannot conduct a housing quality standards (HQS) inspection or complete other administrative tasks that allow move-in to occur. In these cases, SSVF grantees may use funds to cover rental assistance until a PHA has completed the tasks allowing the voucher to be used. HUD-VA Supportive Housing program (HUD-VASH) For veterans residing in rental housing using HUD-VASH vouchers, HUD has waived certain requirements pursuant to CARES Act ( P.L. 116-136 ) waiver authority to address situations that may arise due to COVID-19. For example, ordinarily HUD will not approve a unit for Section 8 rental assistance (which includes HUD-VASH vouchers) unless it has passed an HQS inspection. However, HUD has waived this requirement and will accept an owner certification that there is "no reasonable basis to have knowledge that life threatening conditions exist in the unit." PHAs must conduct inspections of units as soon as reasonably possible, and no later than October 31, 2020. PHAs may also accept alternative inspection results rather than HQS inspections and allow families to move into units in these cases. For existing tenants, PHAs may change from an annual unit inspection schedule to a biennial schedule without updating their administrative plan. If resident income changes due to an inability to work, or other reason, residents should report the change to their local PHA and rent should be adjusted accordingly. HUD has waived the requirement that PHAs obtain third-party verification of an income change for these income recertifications. In addition, as part of the CARES Act ( P.L. 116-136 ), residents receiving Section 8 rental assistance cannot be evicted for nonpayment of rent for 120 days from the date of the bill's enactment (March 27, 2020). VA Loan Programs The VA administers both guaranteed and direct loans for veterans through the Veterans Benefits Administration. Prior to enactment of the CARES Act, VA encouraged lenders to establish a foreclosure moratorium for borrowers with VA loans, but a moratorium was not required. However, the CARES Act provides for both forbearance (i.e., allowing borrowers to reduce or suspend mortgage payments) and a foreclosure moratorium for federally backed single-family mortgages, including guaranteed VA loans. Direct VA loans do not appear to be included in the CARES Act definition of federally backed mortgage. Borrowers may request forbearance from their loan servicer for up to 180 days, with another 180-day extension, due to financial hardship caused directly or indirectly by COVID-19. The foreclosure moratorium is in effect for 60 days beginning March 18, 2020. For more information about these provisions, see CRS Insight IN11334, Mortgage Provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act . Veterans Benefits Administration The Veterans Benefits Administration has taken several actions to assure continued delivery of disability compensation, pensions, and education assistance. Compensation and Pension Benefits On March 18, 2020, the Veterans Benefits Administration announced via Facebook and Twitter that all regional offices would be closed to the public starting March 19. The regional offices are to remain open to ensure the continuity of benefits, however, the offices are longer accepting walk-ins for claims assistance, scheduled appointments, counseling, or other in-person services. The VBA is directing veterans who have claims-specific questions or any other questions to use the Inquiry Routing & Information System (IRIS) or to call 1-800-827-1000. In a March 26 interview, VA Under Secretary for Benefits, Dr. Paul Lawrence, assured veterans and their families that benefits were still being processed thanks in part to the large telework capability in place for the VBA. Lawrence stated that about 90% of all VBA employees, approximately 22,500 individuals, are set up and teleworking to retain the continuity of processing claims. Dr. Lawrence also addressed the issue of veterans who need a compensation and pension exam completed as part of their benefits application. Due to travel restrictions and social distancing policies, Lawrence explained VBA's attempt at still providing the exams but without in-person contact. He stated: So we're trying to do more, a lot more through telehealth, You know phone call or a Skype session or something. We can get these exams done that we're flexing in new ways. Where once things were done in person â¦ now they're being done electronically. Following Dr. Lawrence's interview, on March 31, the VA issued a press release announcing changes to several in-person meetings and programs to ensure the safety of both the staff and veteran/dependent during this time. Some of these changes included providing educational counseling through online and telephone services; using teleconferencing and VA Video Connect for case management, general counseling and connecting veterans to VR&E services; conducting informal conference hearings by telephone or video conferencing; providing virtual briefings and individualized counseling for transitioning servicemembers; and conducting examinations for disability benefits using tele-compensation and pension (Tele-C&P) exams. If an in-person examination is required, veterans will be notified for scheduling. However, on April 6, the VBA announced via email that it is "suspending in-person C&P examinations until further notice and will continue to conduct C&P exams through ACE and Tele-C&P, when possible." The email also provided guidance on filing claims and information to assist veterans with submitting medical documentation without appearing in person. On April 3, the VA announced that claimants who need an extension in filing their paperwork "can simply submit [the request] with any late-filed paperwork and veterans do not have to proactively request an extension in advance." Educational Assistance In FY2020, over 900,000 individuals are expected to receive veterans educational assistance from the GI Bills (e.g., the Post-9/11 GI Bill), Vocational Rehabilitation & Employment (VR&E), Veteran Employment Through Technology Education Courses (VET TEC), Veterans Work-Study, Veterans Counseling, and VetSuccess on Campus (VSOC). As a result of COVID-19, some participants' training and education may be disrupted, and some participants may receive a lower level of benefits, or none at all. These concerns may directly affect beneficiaries in several ways, including the following: Some students may be required to stop out, discontinue working, or take a leave of absence as a result of their own illness. Some training establishments, educational institutions, and work-study providers may close temporarily or permanently. Some training establishments, educational institutions, and work-study providers may be required to reduce participants' hours, enrollment rate, or rate of pursuit. Some educational institutions may transition some courses to a distance learning format. Some educational institutions may require students living on campus to move off campus. Individuals receiving benefits in foreign countries may encounter any of the above circumstances while residing in a foreign country whose COVID-19 situation may differ from that in the United States, or may stop out, discontinue working, or take a leave of absence and return to the United States. Since mid-March, the VA has sent direct emails to GI Bill participants and school certifying officials (SCOs) and held webinars for SCOs to explain its authority and payment processing procedures that are directly relevant to COVID-19 disruptions. On March 13, 2020, the VBA Education Service requested that school-certifying officials "temporarily refrain from making any adjustments to enrollment certifications" if resident courses transitioned to distance education pending subsequent VA guidance and/or legislative action. The VBA Education Service administers VA educational assistance programs. Prior to the COVID-19 emergency, educational institutions were required to receive approval before transitioning any courses to a distance learning format for the courses to remain GI Bill-eligible. GI Bill benefits could not be paid for the pursuit of online courses that had not been previously approved as online courses. This limitation was alleviated by recently enacted legislation (for a discussion of P.L. 116-128 , see the " Congressional Response " section of this report). In addition, on April 3, 2020, the VA announced that it was suspending for sixty days the collection of institutions' and veterans' debt, including for debts under the jurisdiction of the Department of the Treasury. Individuals with an existing repayment plan must request a suspension if they are unable to make payments. In 2019, the VA indicated that approximately 25% of GI Bill participants must resolve an overpayment-related debt at some point. The VBA Education Service has announced that it is moving away from paper correspondence, including faxes. In an effort to accomplish this transition, VBA has requested that GI Bill participants provide or update their email addresses. On-the-job training (OJT) and apprenticeship training establishments must submit certifications electronically. National Cemetery Administration The National Cemetery Administration has provided information for the survivors and dependents of veterans who have passed away and are scheduled to be buried in a National Cemetery during this national emergency. Effective March 23, 2020, the NCA announced that all "committal services and the rendering of military funeral honors, whether by military personnel or volunteer organizations, will be discontinued until further notice at VA national cemeteries." VA National Cemeteries will remain open to visitors and for interments, but visitors should follow their local communities' restrictions on visitations and travel. In addition, visitors should be prepared for certain areas of the cemetery typically open to the public to be closed. These areas include public information centers, visitor centers, and chapels. For direct interments, the NCA is limiting attendance to immediate family of deceased family members, up to 10 individuals. In addition, the NCA is to work with families to schedule a committal or memorial service at a later date. On Friday, March 27, the NCA informed funeral directors of a change in the floral arrangement policy, stating that national cemeteries will no longer accept floral arrangements with direct interments.Â If families want to place a floral arrangement at the gravesite, they may do so after 4:30 pm on the day of interment or any time after. In addition, the NCA limited floral arrangements to two per gravesite. The NCA announced that the National Cemetery Scheduling Office in St. Louis will continue to provide scheduling services. The NCA has set up an "Alerts" web page for the public to check cemetery operating status and is directing the public to its Facebook and Twitter pages for the most recent operating information. Emergency Preparedness ("Fourth Mission") In 1982, the Veterans Administration and Department of Defense Health Resources Sharing and Emergency Operations Act ( P.L. 97-174 ) was enacted to serve as the primary health care backup to the military health care system during and immediately following an outbreak of war or a national emergency. Since then, Congress has provided additional authorities to VA to "use its vast infrastructure and resources, geographic reach, deployable assets, and health care expertise, to make significant contributions to the Federal emergency response effort in times of emergencies and disasters." Among other authorities, the VHA may care for nonveterans, as well as veterans not enrolled in the VA health care system. The VA also has authority to provide certain health services such as medical counter measures to VA employees. The authority to care for care for nonveterans, applies in situations where the President has declared a major disaster or emergency under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), or where the HHS Secretary has declared a disaster or emergency activating the National Disaster Medical System established pursuant to Section 2811(b) of the Public Health Service Act (42 U.S.C. Â§300hh-11(b)). The President's March 13, 2020, declaration of a national emergency under Section 501(b) of the Stafford Act allows VA to use this authority. On March 27, 2020, the VA released its COVID-19 Response Plan. The plan defines the VA's national level roles and responsibilities: VHA will provide [personal protective equipment] PPE fit-testing, medical screening, and training for [Emergency Support Function #8] ESF #8 and other Federal response personnel. Provide VHA staff as ESF #8 liaisons to [Federal Emergency Management Agency] FEMA the Incident Management Assistance Teams deploying to the state emergency operations center. Provide VHA planners currently trained to support ESF #8 teams. VHA provides vaccination services to VA staff and VA beneficiaries in order to minimize stress on local communities. VHA furnishes available VA hospital care and medical services to individuals responding to a major disaster or emergency, including active duty members of the Armed Forces as well as National Guard and military Reserve members activated by state or Federal authority for disaster response support. VHA provides ventilators, medical equipment and supplies, pharmaceuticals, and acquisition and logistical support through VA National Acquisition Center. [NCA] provides burial services for eligible veterans and dependents and advises on methods for interment during national security emergencies. VHA designates and deploys available medical, surgical, mental health, and other health service support assets. VHA provides one representative to the National Response Coordination Center (NRCC) during the operational period on a 24/7 basis. According to the VA, during declared major disasters and emergencies, service-connected veterans receive the highest priority for VA care and services, followed by members of the Armed Forces receiving care under 38 U.S.C. Section 8111A, and then followed by individuals affected by a disaster or emergency described in 38 U.S.C. Section 1785 (i.e., individuals requiring care during a declared disaster or emergency or during activation of the National Disaster Medical System [NDMS]). In general, care is prioritized based on clinical needâthat is, urgent, life-threating medical conditions are treated before routine medical conditions (see the Appendix ). The Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136 ), provided funding for the Public Health and Social Services Emergency Fund to reimburse the VHA to respond to COVID-19 and to provide medical care for nonveterans. However, prior to reimbursing the VHA, the HHS Secretary is required to certify to congressional appropriations committees that funds available under the Robert T. Stafford Disaster Relief and Emergency Assistance Act are insufficient and that funds provided under the CARES Act are necessary to reimburse the VHA for expenses incurred to provide health care to nonveterans . Generally, if a state, tribal, or territorial government needs resources, it can request assistance from the federal government through its local HHS regional emergency coordinator (REC), which is a part of FEMA's NRCC. The VA cannot receive direct requests for assistance from state and local governments. In addition, the VA does not support providing VA medical personnel to nondepartment facilities. The VHA has accepted several "fourth mission" assignments from FEMA/HHS. For example, the VHA has responded and provided assistance to New York and New Jersey. On March 29, VA New York Harbor Healthcare System's Manhattan and Brooklyn VA medical centers admitted nonveteran, non-COVID-19 patients, and on April 1, East Orange, New Jersey VA Medical Center, admitted nonveteran critical and noncritical COVID-19 patients. Furthermore, the VHA is providing laboratory services, pharmaceutical and medication supply through the National Acquisition Center (NAC), and mobile pharmacy units, among others, as requested by FEMA/HHS. Congressional Response In response to the COVID-19 pandemic, Congress passed several measures to provide the VA with supplemental appropriations and provided temporary statutory changes to enhance veterans' benefits and services during this public health emergency. Families First Coronavirus Response Act (P.L. 116-127) Supplemental Appropriations and Cost-Sharing On March 18, 2020, the President signed into law the Families First Coronavirus Response Act ( P.L. 116-127 ). The act provides $30 million for VHA's medical services account to fund health services and related items pertaining to COVID-19, and $30 million for VHA's medical community care account (see Table 1 ). These funds are designated as emergency spending and are to remain available until September 30, 2022. Among other things, the act does not allow the VA to charge any copayment or other cost-sharing payments for COVID-19 testing or medical visits during any period of this public health emergency. P.L. 116-128 Education Assistance P.L. 116-128 , as enacted on March 21, 2020, allows the VA to continue to provide GI Bill benefits from March 1, 2020, through December 21, 2020, for courses at educational institutions that are converted from in-residence to distance learning by reason of an emergency or health-related situation. P.L. 116-128 further permits the VA to pay the Post-9/11 GI Bill housing allowance as if the courses were not offered through distance learning throughout the same period. With the exception of those participants covered under this P.L. 116-128 exemption, Post-9/11 GI Bill participants enrolled exclusively in distance education are eligible for no more than one-half the national average of the housing allowance. Coronavirus Aid, Relief, and Economic Security Act, "CARES Act" (P.L. 116-136) Emergency Supplemental Appropriations On March 17, 2020, the Administration submitted to Congress a supplemental appropriations request. The Administration sought $16.6 billion for FY2020 for VA's response to the COVID-19 outbreak. This amount included $13.1 billion for the medical services account. According to the request, this additional amount would provide funding for "healthcare treatment costs, testing kits, temporary intensive care unit bed conversion and expansion, and personal protective equipment." The request also included $2.1 billion for the medical community care account to provide three months of health care treatment provided in the community in response to COVID-19. The VA assumes that about 20% of care for eligible veterans will be provided in the community, since community care facilities would be at full capacity with nonveteran patients. Furthermore, the emergency supplemental appropriations request included $100 million for the medical support and compliance account to provide 24-hour emergency management coordination overtime payments, to cover costs associated with travel and transport of materials, and to enable VHA' s Office of Emergency Management to manage its response to COVID-19; $175 million for the medical facilities account to upgrade VA medical facilities to respond to the virus; and $1.2 billion for the information technology systems account to upgrade telehealth and related internet technology to deliver more health care services remotely. On March 27, the President signed into law the CARES Act ( P.L. 116-136 ). Division B of this act included an emergency supplemental appropriations measure. Title X of Division B provides supplemental appropriations for FY2020 for certain VA accounts totaling $19.6 billion, and is designated as emergency spending. Unless otherwise noted below, funds remain available until September 30, 2021. Funding provided in the CARES Act is broken down as follows (see Table 1 ): VBA, general operating expenses account, $13 million, for enhancing telework support for VBA staff and for additional cleaning contracts. VHA, medical services account, $14.4 billion, for increased telehealth services; purchasing of additional medical equipment and supplies, testing kits, and personal protective equipment; and to provide additional support to homeless veterans, among other things. VHA, medical community care account, $2.1 billion, for increased emergency room and urgent care usage in the community. VHA, medical support and compliance account, $100 million, for the provision of 24-hour emergency management coordination overtime payments, and for costs associated with travel and transport of materials. VHA, medical facilities account, $606 million, for the procurement of mobile treatment facilities, improvements in security, and nonrecurring maintenance projects. VA, general administration account, $6.0 million, for maintaining 24-hour operations of crisis response and continuity of operations plans at VA facilities, among other things. VA, information technology systems account, 2.2 billion, for increased telework capacity, purchasing additional laptops for telework and telehealth-enabled laptops for VHA providers to work from home, and to increase bandwidth and IT infrastructure needs, among other things. VA, Office of Inspector General account, $12.5 million, for increased oversight of VA's preparation and response to COVID-19 (funds remain available until September 30, 2022). VA, grants for construction of state extended care facilities account, $150 million, to assist state homes to renovate, alter, or repair facilities to respond to COVID-19. General CARES Act Provisions Affecting VA Programs and Services Section 20001. Transfer of Funds This section allows the VA to transfer funds between the medical services, medical community care, medical support and compliance, and medical facilities accounts. The VA can make any transfer that is less than 2% of the total amount appropriated to an account and may follow after notifying the congressional appropriations committees. Any transfer that is greater than 2% of the total amount appropriated to an account or exceeding a cumulative 2% for all of the funds appropriated to the VA in the CARES Act requires Senate and House Appropriations Committee approval. Section 20002. Monthly Reports This section requires the VA to provide monthly reports to the Senate and House Appropriations Committees detailing obligations, expenditures, and planned activities for all the funds provided to the VA in the CARES Act. Section 20003. Public Health Emergency This section defines a public health emergency as an emergency with respect to COVID-19 declared by a federal, state, or local authority. Section 20004. Short-Term Agreements or Contracts with Telecommunications Providers to Expand Telemental Health Services for Isolated Veterans During A Public Health Emergency The VHA provides telehealth services to veteran patients in their communities from any location in the United States, including U.S. territories, the District of Columbia, and the Commonwealth of Puerto Rico. Section 20004 defines telehealth as "the use of electronic information and telecommunications technologies to support and promote long-distance clinical health care, patient and professional health-related education, public health, and health administration." Examples of telecommunications technologies include the internet, videoconferencing, streaming media, and terrestrial and wireless communications. This section allows the VA Secretary to enter into short-term agreements or contracts with telecommunications companies to expand veteran patients' access to telemental health care services . The goal of the short-term agreements and contracts is for the telecommunications companies to provide temporary, complimentary, or subsidized fixed and mobile broadband services to veteran patients. The Secretary is allowed to enter into short-term agreements or contracts with telecommunications companies only during the period of the COVID-19 outbreak. During this period, covered veteran patients can assess VA telemental health care services through telehealth and the VA Video Connect (VVC) mobile application, which the act refers to as the VA program that connects veteran patients with their health care teams using encryption. Veteran patients can access the VVC on their mobile devices, such as laptops and smartphones. The short-term agreements or contracts with telecommunications companies must address the telemental health care needs of isolated veterans; therefore, the VA Secretary must prioritize eligibility to veterans who either have low-incomes, live in unserved and underserved areas, reside in rural and highly rural areas, or are considered by the Secretary as having a higher risk of committing suicide and mental health care needs while being isolated during the COVID-19 outbreak. The VA, however, may expand eligibility for telemental health care services to veteran patients who are currently receiving VA care but who are ineligible to receive mental health care services and other health care services through telehealth and/or the VVC. Section 20005. Treatment of State Homes During Public Health Emergency The state veterans' home program is a federal-state partnership to construct or acquire nursing home, domiciliary, and adult day health care facilities. VA provides assistance to states in three ways: First, VA provides states with up to 65% of the cost to construct, acquire, remodel, or modify state homes. Second, VA provides per diem payments to states for the care of eligible veterans in state homes. VA may adjust the per diem rates each year. A state home is required to meet all VA standards in order to continue to receive per diem payments. Third, VA is required to support states financially to assist state homes in the hiring and retention of nurses to reduce nursing shortages at state veterans' homes. This section modifies the treatment of state homes during the public health emergency by (1) waiving requirements for per diem reimbursements for state homes under the VHA State Home Per Diem Program and (2) authorizing the Secretary to provide equipment to state homes. The section waives the occupancy rate requirement under 38 C.F.R. Section 51.40(c), authorizing a state home to receive per diem payments for veterans who are temporarily absent from nursing home care regardless of the state home's occupancy rate. In addition, the section waives the requirement under 38 C.F.R. Section 51.210(d) that a state home must maintain a certain percentage of veteran residents. Lastly, the section authorizes the Secretary to provide state homes with medication, personal protective equipment, medical supplies, and any other equipment, supplies, and assistance available to VA. The personal protective equipment may be provided through the All Hazards Emergency Cache in addition to any other source available. Section 20006. Modifications to Veteran Directed Care Program of Department of Veterans Affairs The Veteran Directed Care Program helps isolated veterans who need assistance with activities of daily living or instrumental activities of daily living, and who are at high risk of nursing home placement, to live in their own homes. Veterans in this program are provided a budget for services that can be managed by the veteran or a family caregiver. This section modifies the Veterans Directed Care Program during the public health emergency to require that the Secretary (1) accept telephone or telehealth enrollments and renewals; (2) stop all suspensions or disenrollments unless requested by a veteran or representative, or the veteran and provider make a mutual decision; (3) waive paperwork requirements and penalties for late paperwork; and (4) waive any requirement to stop payments under the program if the veteran or caregiver is out of state for more than 14 days. Section 20007. Provision by Department of Veterans Affairs of Prosthetic Appliances through Non-Department Providers During Public Health Emergency In general, VHA prosthetics staff are responsible for providing and fitting prosthetic appliances that meet the best medical needs of the veteran patient. This provision requires the Secretary to ensure that eligible veterans receiving or requiring prosthetic appliances and services are able to obtain them from contracted non-VA providers during this emergency period. Section 20008. Waiver of Pay Caps for Employees of Department Of Veterans Affairs During Public Health Emergencies Under existing regulations, certain VA employees may not receive any combination of premium pay, including overtime pay, that, when added to their base pay, results in total pay above the higher of two rates: GS-15, step 10, or the rate payable for Level V of the Executive Schedule on a biweekly basis. This provision allows the Secretary waive any limitation on pay for any employee of the VA during a public health emergency for work done in support of the emergency. The Secretary is required to provide reports on a monthly basis to the Senate and House Committees on Veterans' Affairs detailing the waivers. Section 20009. Provision by Department of Veterans Affairs of Personal Protective Equipment for Home Health Workers This section requires the Secretary to provide VA home health workers with personal protective equipment from the All Hazards Emergency Cache or any other available source. Section 20010. Clarification of Treatment of Payments for Purposes of Eligibility for Veterans Pension and Other Veterans Benefits Under ordinary circumstances, eligibility for a VA pension is, in part, based upon the annual income of the individual. Generally, "all payments of any kind or from any source (including salary, retirement or annuity payments, or similar income, which has been waived, irrespective of whether the waiver was made pursuant to statute, contract, or otherwise) shall be included" when calculating a veteran's annual income. This provision of the CARES Act excludes the recovery rebate from a veteran's annual income, thereby preventing it from counting towards the income limit associated with pension eligibility. It explicitly states that the rebate "shall not be treated as income or resources for purposes of determining eligibility for pension under chapter 15 of title 38." Consequently, the direct individual payment included in the CARES Act will not affect a veteran's eligibility for a VA pension. Section 20011. Availability of Telehealth for Case Managers and HomelessÂ Veterans Formerly homeless veterans participating in the HUD-VASH program are assigned VA case managers to assist with their health and other needs. This section requires the VA to ensure that telehealth capabilities are available to veterans and case managers participating in HUD-VASH. Section 20012. Funding Limits for Financial Assistance for Supportive Services for Very Low-Income Veteran Families in Permanent Housing During A Public Health Emergency The SSVF program, which provides short- to medium-term rental assistance and supportive services to homeless veterans and their families, is authorized at $380 million through FY2021. Without legislative authority, the VA cannot obligate additional funding for the program. This provision removes the SSVF funding limitation in cases of public health emergencies. Section 20013. Modifications to Comprehensive Service Programs for Homeless Veterans During A Public Health Emergency The Homeless Providers Grant and Per Diem (GPD) program provides grants to public entities and private nonprofit organizations for the capital costs associated with developing facilities to serve homeless veterans and also makes per diem payments to grantees for the costs of providing housing and supportive services to homeless veterans. Together, grant and per diem funding is authorized at approximately $258 million per year. In addition, grant costs are limited to 65% of the costs of acquisition, construction, expansion, or remodeling of facilities, and per diem payments are limited to the VA domiciliary care per diem rate, which, for FY2020, is $48.50 per day. This section allows additional appropriations for the GPD program in cases of public health emergencies notwithstanding the FY2020 authorization level, and it also allows the Secretary to waive statutory limitations on grant and per diem payments to grantees. Generally, VA, under GPD guidance, requires providers to discharge veterans residing in GPD housing who are absent for more than 14 days. In addition, VA will not make per diem payments after a veteran has been absent for more than 72 consecutive hours. This section requires the VA Secretary to waive the discharge requirement and allows the Secretary to reimburse providers for veterans who have been absent for more than 72 hours. Student Veteran Coronavirus Response Act of 2020 (P.L. 116-140) The Student Veteran Coronavirus Response Act of 2020 ( P.L. 116-140 ), as enacted on April 28, 2020, responds to concerns that abrupt and temporary closures or suspensions of educational institutions, programs of education, and employment could negatively impact the short-term finances of eligible beneficiaries and their continued pursuit of educational programs. Eligible beneficiaries include participants in several VA educational assistance programs and Vocational Rehabilitation and Employment (VR&E). The act provides special authorities for the period beginning on March 1, 2020, and ending on December 21, 2020, including academic terms beginning prior to December 21, 2020. Selected sections of the bill are discussed below. Section 3. Payment of Work-Study Allowances During Emergency Situations The Veterans Work-Study Program allows GI Bill and VR&E participants to receive additional financial assistance through the VA in exchange for employment. Provisions in this section permit Work-Study payments in accordance with an existing Work-Study agreement or at a lesser amount despite the participant's inability to perform work by reason of an emergency situation. These provisions further require the VA to extend an existing agreement for a subsequent period beginning during the covered period if requested by the Work-Study participant. Section 4. Payment of Allowances to Veterans Enrolled in Educational Institutions Closed for Emergency Situations The VA has authority under 38 U.S.C. Section 3680(a)(2)(A) to pay GI Bill and VR&E allowances for up to four weeks when an educational institution temporarily closes under an established policy based on an Executive order of the President or due to an emergency situation. The provisions in this section permit GI Bill and VR&E payments for up to four weeks, in addition to any payments under 38 U.S.C. Section 3680(a)(2)(A), if an educational institution closes or the program of education is suspended due to an emergency situation. Section 5. Prohibition of Charge to Entitlement of Students Unable to Pursue a Program of Education Due to an Emergency Situation In general, the GI Bills provide eligible persons a 36-month entitlement to educational assistance. GI Bill entitlement is restored in the following instances: for an incomplete course if an individual is unable to receive credit or lost training time as a result of an educational institution closing; for an incomplete course if an individual is unable to receive credit or lost training time because the course or program is disapproved by a subsequently established or modified policy, regulation, or law; and for the interim (through the end of the academic term but no more than 120 days) Post-9/11 GI Bill housing allowance paid following either a closure or disapproval. The provisions in this section require that the VA restore entitlement for an incomplete course if an individual is unable to receive credit or lost training time as a result of a temporary closure of an educational institution or the temporary termination of a course or program of education by reason of an emergency situation. Section 6. Extension of Time Limitations for Use of Entitlement Many GI Bill participants must use their educational entitlement within a specified time period beginning upon discharge or release from active duty or eligibility. There are notable exceptions to the time limitation. For example, Post-9/11 GI Bill participants whose last discharge or release from active duty was on or after January 1, 2013, are not subject to a time limitation. The provisions in this section exempt from the time limitation, the period during which an individual is prevented from pursuing a program of education because the educational institution closed (temporarily or permanently) under an established policy based on an Executive order of the President or due to an emergency situation until the individual is able to resume pursuit. The provisions are applicable to the Montgomery GI Bill-Active Duty (MGIB-AD) 10-year limitation, the Post-9/11 GI Bill 15-year limitation and age limitation for children using transferred benefits, the VR&E 12-year limitation and the period of a veteran's vocational rehabilitation program, and the Montgomery GI Bill-Selected Reserve (MGIB-SR) limitation. Section 7. Restoration of Entitlement to Rehabilitation Programs for Veterans Affected by School Closure or Disapproval Typically, programs under VR&E are limited to 48 months of entitlement and veterans pursuing an education program under VR&E must be enrolled to receive a subsistence allowance. For the covered period, the provisions in this section extend protections from entitlement charges following school closures that are established for the GI Bills to veterans participating in education programs under the VR&E program. The provisions further allow the VA to (1) continue paying subsistence allowances to VR&E participants through the end of the academic term but no more than 120 days following either a closure or disapproval and (2) prohibits VA from charging the impacted term against a veteran's VR&E entitlement if the veteran did not receive credit for classes. Section 8. Extension of Payment of Vocational Rehabilitation Subsistence Allowances The provisions in this section provide two additional months of subsistence allowance to veterans who were following a program of employment services under the VR&E program during the covered period. Appendix. VHA Emergency Powers Summary:	null	96	64,917	64,919	64,919	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The Department of Veterans Affairs (VA) provides a range of benefits and services to veterans who meet certain eligibility criteria. These benefits and services include, among other things, hospital and medical care; disability compensation and pensions; education; vocational rehabilitation and employment services; assistance to homeless veterans; home loan guarantees; administration of life insurance, as well as traumatic injury protection insurance for servicemembers; and death benefits that cover burial expenses. The department carries out its programs nationwide through three administrations and the Board of Veterans' Appeals (BVA). The Veterans Health Administration (VHA) is responsible for health care services and medical and prosthetic research programs. The Veterans Benefits Administration (VBA) is responsible for, among other things, providing disability compensation, pensions, and education assistance. The National Cemetery Administration (NCA) is responsible for maintaining national veterans cemeteries; providing grants to states for establishing, expanding, or improving state veterans cemeteries; and providing headstones and markers for the graves of eligible persons, among other things. In addition to providing health care services to veterans and certain eligible dependents, the VHA must, by statute, serve as a contingency backup to the Department of Defense (DOD) medical system during a national security emergency and provide support to the National Disaster Medical System and the Department of Health and Human Services (HHS) as necessary in response to national crises. The department must also take appropriate actions to ensure VA medical centers are prepared to protect veteran patients and staff during a public health emergency. Novel Coronavirus (COVID-19)13 On December 31, 2019, the World Health Organization (WHO) learned of a cluster of pneumonia cases in Wuhan City, Hubei Province of China. The WHO has since linked these illnesses to a disease, called Coronavirus Disease 2019 or COVID-19, caused by a previously unidentified strain of coronavirus, designated SARS-CoV-2. On January 30, 2020, an Emergency Committee convened by the WHO Director-General declared the COVID-19 outbreak to be a Public Health Emergency of International Concern (PHEIC). On January 31, the Secretary of Health and Human Services declared a public health emergency under Section 319 of the Public Health Service Act (42 U.S.C. Â§247d). On March 11, 2020, the WHO characterized the COVID-19 outbreak as a pandemic. Two days later, on March 13, the President declared the COVID-19 outbreak a national emergency, beginning March 1, 2020. The VHA plays a significant role in the domestic response to a pandemic. The VHA is one of the largest integrated direct health care delivery systems in the nation, caring for more than 7.1 million patients in FY2020 and providing 123.8 million outpatient visits at approximately 1,450 VA sites of care. The VHA employs a workforce of 337,908 full-time equivalent employees (FTEs), largely composed of health care professionals. In addition, the VHA has a statutory mission to contribute to the overall federal emergency response capabilities. Scope and Limitations of This Report This report provides an overview of VA's and Congress's response thus far to the rapidly evolving COVID-19 pandemic. The report does not provide an exhaustive description of all of the department's activities, and it is based on publicly available information and daily updates provided from the VA. The report is organized as follows: first, it provides details on VHA's, VBA's, and NCA's response activities; second, it provides details on VA's emergency preparedness ("Fourth Mission") activities to provide support to the overall federal emergency response; and third, it describes congressional activity related to VA and veterans programs and services. The COVID-19 pandemic is a rapidly evolving situation and information changes on a daily, or often hourly, basis. The Appendix provides a summary of VHA's emergency authorities. Medical Care for Veterans During the COVID-19Â Outbreak VHA's provision of medical care to veterans in response to the COVID-19 outbreak includes implementing mitigation strategies at VHA sites of care, as well as testing and treating veterans diagnosed with or suspected of having COVID-19. (A general description of medical care to veterans is provided in other CRS reports. ) In late February 2020, the VA provided information to congressional oversight committees on the number of positive and presumptive positive cases of COVID-19. On March 13, 2020, the department began publishing this information publicly on its website, which it updates on a regular basis. The VA has been providing regular updates to congressional oversight committees since that time. The VA has published two public documents that provide valuable information to patients and the public regarding the response to COVID-19: (1) a COVID-19 response plan that provides operational details for both medical care for veterans, as well as other VHA missions, and (2) Coronavirus Frequently Asked Questions (FAQ) for patients. The VA COVID-19 response plan is summarized in more detail in the " Emergency Preparedness ("Fourth Mission") " section of this report. This section describes current health system capacity (including staffing changes), guidance for patients, mitigation at VHA sites of care (including limitations to community care), and testing and treatment for COVID-19. Health System Capacity This subsection reflects point-in-time information provided by the VA to reflect the current capacity of the system. As of April 14, 2020, veterans and VHA employees at sites of care spanning the United States have been diagnosed with COVID-19. The vast majority of COVID-19-positive veterans are being treated in outpatient settings, with a minority in VA inpatient intensive care unit (ICU) and acute care settings. The COVID-19 pandemic is a rapidly evolving situation and information changes on a daily, or often hourly, basis. In response to the pandemic, the VA increased the number of ICU and acute care beds that are typically available. As of April 29, 2020, bed capacity across the health system is 12,215, with far less than half occupied. No regional or local level occupancy data have been reported. The VA started deploying Vet Centers, which provide a range of counseling services, in locations facing large COVID-19 outbreaks. The VA is reporting that the health system has adequate levels of personal protective equipment (PPE), including N95 respirators. Earlier media reports, citing internal VA memoranda, stated that the VA has a shortage of PPE and hospitals are being directed to decide which employees get certain supplies. The media reports suggested that only employees that work directly with COVID-19 patients are to be provided N95 respirators. An April 16, 2020, memorandum to Veterans Integrated Service Networks (VISN) directors from the VA Deputy Under Secretary for Health for Operations and Management confirmed that the VA received a significant number of N95 respirators and is working to secure additional facemasks and surgical masks. The memo specified that facilities have enough masks and respirators to follow CDC-based contingency strategies for supply management. The memo provides system-wide guidance for staff use of respirators and masks. Staff providing direct care should use N95 respirators. If N95 respirators are in short supply, staff are directed to use surgical masks for low-risk care on suspected or confirmed COVID-19 patients. Staff providing care for patients in specified institutional settings will be provided with one facemask or surgical mask per day. It goes on to provide guidance to VISN directors on how to support medical facility directors in implementing contingency and crisis strategies based on the referenced CDC guidelines. Medical facility directors have authority to determine allocation and crisis standards of care, in the event that resources become scarce. The VA is allocating equipment within VISNs, as needed, and it has increased pharmaceutical inventories from 8 days to 10 days and is utilizing certain medications needed for hospitalized COVID-19 patients as national system-wide resources. As described below, the VA has taken a number of actions to ensure that there is adequate staffing and that safeguards are in place to protect frontline employees. These actions are described in the next section. Employment Actions Related to the Pandemic Response Actions related to employment can be separated into two categories: (1) actions to increase the capacity of the health system during the pandemic response and (2) actions to protect current employees from contracting the COVID-19 virus. Employment Actions to Increase Health System Capacity The VA submitted a request to the Office of Personnel Management (OPM) and received approval to waive a requirement that retiree' salaries be reduced when rehired to reflect the retirement annuity they already receive, otherwise known as a dual compensation reduction waiver. The VA is asking retired clinicians to register online to join the workforce and to act as surge capacity if needed. The registration form adds the reemployed retirees to VHA's national provider database and matches them to opportunities based on their specialties. The VA has indicated that it is exploring the use of existing hiring authorities to make 30-day appointments where a critical need exists, one-year appointments in remote/isolated areas, and temporary not-to-exceed 120-day appointments. VA on-boarded 3,107 new hires in the period between April 22 and April 28, 2020. In addition, activation of the Disaster Emergency Medical Personnel System (DEMPS) allows the VA to deploy personnel from areas that are less impacted by COVID-19 to reinforce staff levels at other facilities as needed (e.g., facilities in New York City and New Orleans). Under DEMPS, movement of personnel must be approved by the VISN and the originating medical center's director. Employment Actions to Protect Employees A number of VHA employees have been diagnosed with COVID-19 or are being monitored for COVID-19. As of April 29, 2020, over 2,200 employees have been diagnosed with COVID-19 and 20 employees have died from the disease. The VA has taken specific actions to protect employees, which, in turn, increases health system capacity by reducing the need for front-line employees to take leave during the pandemic. The VA is following CDC precautions to reduce the likelihood of transmission of COVID-19 among employees. According to the VA, staff have been given guidance to remain home if symptoms develop, to obtain health checks for symptoms associated with COVID-19 while at work, and to report symptoms through the correct process. Employees are also being encouraged to develop personal and family disaster plans that enable them to continue working. Employees are encouraged to telework, if their work can be accomplished remotely. Sites of care are encouraged to use alternative treatment methods wherever possible, such as telemedicine and telehealth. To prevent the spread of infection, the VA has dedicated specific treatment areas for COVID-19 patients. This and other mitigation efforts at VHA sites of care are discussed below. Mitigation at VHA Sites of Care The VHA operates care settings with varying levels of patient risk for developing severe symptoms if COVID-19 is contracted. Each VA medical center is implementing a two-tiered system to mitigate the potential for spread of the virus, with one zone for active COVID-19 cases and a passive zone for care unrelated to COVID-19. The VA has canceled all elective surgeries and limited routine appointments to only those with the most critical need. This section describes mitigation efforts at community living centers (CLCs; nursing homes) and spinal cord injury/disorder (SCI/D) centers, which are high-risk settings, separate from other care settings. The VA has implemented different screening processes and other pandemic responses depending on the care setting. On March 26, 2020, the VA Office of Inspector General (OIG) published the results of inspections of VA facilities for implementing the enhanced screening processes and pandemic readiness, which took place between March 19 and March 24. The findings of those inspections for each care setting appear in the appropriate sections below. CLCs and SCI/Ds On March 10, 2020, the VA announced safeguards to protect nursing home residents and spinal cord injury patients. As of that date, no visitors are allowed at either VA nursing homes or spinal cord injury/disorder centers. The only exception to this policy is if a veteran is in the last stages of life, in which case the VA allows visitors in the veteran's room only. The VA is not accepting any new admissions to nursing homes and is limiting new admissions to SCI/D centers. The OIG tested the no-access policy at 54 CLCs and found the majority to be in compliance with the policy. Nine of the 54 CLCs tested were prepared to allow OIG staff to enter, despite the no-access policy. Enhanced Screening at All Sites of Care The VA implemented enhanced screening procedures at all sites of care to screen for respiratory illness and COVID-19 exposure. Because each facility determines its own enhanced screening procedures, those procedures vary at the local level. However, the VA has designed standardized screening questions for each facility. Screening consists of the following three general questions: Do you have a fever or worsening cough or shortness of breath or flu-like symptoms? Have you or a close contact traveled to an area with widespread or sustained community transmission of COVID-19 within 14 days of symptom onset? Have you been in close contact with someone, including health care workers, confirmed to have COVID-19? The VA's COVID-19 response plan provided specific potential questions that sites of care can implement in different care settings. Those screening questions also include screening scenarios for virtual triage via phone, telehealth, or secure messaging. If screened individuals are determined to be at risk, staff are instructed to isolate them immediately. If critically ill, individuals are transferred to the emergency department. If stable, individuals are sent home with printed instructions to isolate and contact their primary care providers. The OIG evaluated screening procedures at 58 medical centers and 125 community-based outpatient clinics (CBOC). The OIG found that 41 of 58 (71%) of medical centers' screening processes were generally adequate, 16 (28%) had some opportunities for improvement, and one medical center had inadequate screening procedures. The OIG found that the vast majority of CBOCs (97%) had screening processes in place. Four CBOCs had no screening process in place. Limitations on Community Care The VA instituted several changes to community care guidance during the COVID-19 pandemic response on community care access under the Veterans Community Care Program (VCCP). Under normal circumstances, veterans generally are eligible for access to medical care from non-VA community providers if they meet certain criteria, including wait time and drive time access standards and if the veteran elects to receive community care. The eligibility criteria are mandated by law, and the VA has no authority to waive them. However, as many non-VA providers are postponing or canceling routine care to mitigate the spread of COVID-19, wait times may be just as long or longer in the community. In addition, the VA indicated that community providers should not have veterans attend routine appointments in-person except where the urgency of in-person treatment outweighs the risk of contracting COVID-19. VA issued the following guidance to providers: convert routine in-person appointments to telehealth; follow CMS, CDC, state, and local guidance regarding screening, testing, case reporting, and PPE; plan for increased high acuity demand; communicate with local VA medical center regarding any veteran cases or exposure to COVID-19; episodes of care ordered through the VA can be extended by 60 days; and work with the third-party administrators of the community care network (CCN) to expand enrollment where possible. Guidance for Patients The VA is promoting the Coronavirus FAQ document as the main source of guidance for veterans. This document includes answers to broad questions about COVID-19, VA's role, testing, access to care, mental health, and visiting patients. A fact sheet with similar information is also available to patients. The VA is advising veterans who may be sick or who are exhibiting flu-like symptoms not to come to a VA facility. Instead, patients are asked to send a secure message through the VHA online portal, My HealtheVet, or to schedule a telehealth appointment. The VA is experiencing high call volumes at some facilities and call centers, so it is advising veterans to use online tools first. However, patients can call their health care providers instead of using the online tools available from the VA. In addition, the VA is advising patients to budget additional time for appointments due to enhanced screening measures at VA facilities. These enhanced screening measures, as well as other mitigation strategies at VHA facilities, are described below. COVID-19 Testing and Treatment65 This section describes the current VA policy on testing patients for COVID-19 and treatment following a COVID-19 diagnosis. COVID-19 Diagnostic Testing On March 13, 2020, the department began publishing the number of positive cases of COVID-19, and the number of tests conducted, on its public website, which it updates on a regular basis. Individual medical centers have discretion on where to send samples for testing. Samples can be tested at the Palo Alto VA Medical Center, state public health labs, or private labs. Individual providers decide whether to test for COVID-19 on a patient-by-patient basis. However, the VA has advised providers that to be tested, patients must be exhibiting respiratory symptoms and have another factor, such as recent travel or known exposure to someone who tested positive. Generally, diagnostic testing is a covered service under VA's standard medical benefits package, which is available to all veterans enrolled in the VA health care system. Some veterans are required to pay copayments for care that is not related to a service-connected disability. However, routine lab tests are exempt from copayment requirements. The Families First Coronavirus Response Act ( P.L. 116-127 ), enacted on March 18, 2020, does not allow the VA to charge any copayment or other cost-sharing payments for COVID-19 testing or medical visits during any period of this public health emergency. (For a discussion of P.L. 116-127 , see the " Congressional Response " section of this report.) COVID-19 Treatment The VA has not indicated whether it has developed a specific treatment plan for patients diagnosed with COVID-19. Treatment depends largely on the severity of symptoms that each patient experiences. The VA is handling coverage and cost of treatment for COVID-19 as it would for any other treatment for a condition that is not service-connected. Treatment for COVID-19 is a covered benefit under the VA standard medical benefits package. However, some veterans may have to pay copayments for both outpatient and inpatient care. Normal coverage rules apply for veterans who report to urgent care or walk-in clinics. To be eligible, a veteran must be enrolled in the VA health care system and must have received VA care in the past 24 months preceding the episode of urgent or walk-in care. Eligible veterans needing urgent care must obtain care through facilities that are part of VA's contracted network of community providers. These facilities typically post information indicating that they are part of VA's contracted network. If an eligible veteran receives urgent care from a noncontracted provider or receives services that are not covered under the urgent care benefit, the veteran may be required to pay the full cost of such care. Certain veterans are required to pay copayments for care obtained at a VA-contracted urgent care facility or walk-in retail health clinic. In addition, normal rules apply for veterans who report to non-VA emergency departments. To be eligible for VA payment or reimbursement, a veteran's non-VA care must meet the following criteria: The emergency care or services were provided in a hospital emergency department or a similar facility that provides emergency care to the public. The claim for payment or reimbursement for the initial evaluation and treatment was for a condition of such a nature that a prudent layperson would have reasonably expected that delay in seeking immediate medical attention would have been hazardous to life or health. A VA or other federal facility or provider was not feasibly available, and an attempt to use them beforehand would not have been considered reasonable by a prudent layperson. At the time the emergency care or services were furnished, the veteran was enrolled in the VA health care system and had received medical services from the VHA within the 24-month period preceding the furnishing of such emergency treatment. The veteran was financially liable to the provider of emergency treatment for that treatment. The veteran had no coverage under a health plan contract that would fully cancel the medical liability for the emergency treatment. If the condition for which the emergency treatment was furnished was caused by an accident or work-related injury, the veteran is required to first pursue all claims against a third party for payment of such treatment. Potential Vaccine Cost-sharing In the event that a vaccine is approved by FDA and brought to market, it is unclear whether certain veterans would be charged copayments for administration of the vaccine. Under current regulations, the VA is prohibited from charging copayments for "an outpatient visit solely consisting of preventive screening and immunizations (e.g., influenza immunization, pneumococcal immunization)." Homelessness and Housing Veterans experiencing homelessness live in conditions that could make them particularly vulnerable to COVID-19. Those who are unsheltered lack access to sanitary facilities. For those sleeping in emergency shelters, conditions may be crowded, with short distances between beds, and there may be limited facilities for washing and keeping clean. The VA administers programs to assist veterans experiencing homelessness and also manages several grant programs for nonprofit and public entities to provide housing and services to homeless veterans. These include the Homeless Providers Grant and Per Diem program (GPD), for transitional housing and services; the Supportive Services for Veteran Families program (SSVF), for short- to medium-term rental assistance and services; and Contract Residential Services (CRS), for providing housing for veterans participating in VA's Health Care for Homeless Veterans program. In addition, the Department of Housing and Urban Development (HUD), together with VA, administers the HUD-VA Supportive Housing program (HUD-VASH), through which veterans who are homeless may receive Section 8 vouchers to cover the costs of permanent housing and VA provides case management services. VA General Guidance for Homeless Program Grantees The VA released guidance on March 13, 2020, for its grantees that administer programs for veterans who are homeless. The guidance suggests grantees take a number of actions: Develop a response plan, or review an existing plan, and coordinate response planning with local entities, including health departments, local VA medical providers, and Continuums of Care. Plans should address staff health, potential staff shortages, and acquisition of food and other supplies, as well as how to assist veteran clients. Prevent infection through methods recommended by the CDC, such as frequent handwashing, wiping down surfaces, and informing clients about prevention techniques. In congregate living facilities, such as those provided through VA's Grant and Per Diem program, keep beds at least three feet apart (preferably six, if space permits), sleep head-to-toe, or place barriers between beds, if possible. Develop questions to ask clients about their health to determine their needs and how best to serve them. For new clients, interviews should occur prior to entry into a facility (such as over the phone), if possible, or in a place separate from other clients. If a client's answers to questions indicate risk of COVID-19, separate them from other program participants (have an isolation area, if possible), clean surfaces, and reach out to medical professionals. If isolation is not practical, reach out to other providers who might be able to isolate. Supportive Services for Veteran Families (SSVF) The VA has released additional specific guidance and flexibilities for SSVF providers. SSVF regulations allow funds to be used for emergency housing, including hotels and motels; however, this use of funds may occur only when no other housing options, such as transitional housing through GPD, are available. In response to COVID-19, however, grantees may use funds for high-risk veterans to live in hotels and motels instead of congregate settings. Due to Public Housing Authority (PHA) closures and remote work, veterans who have HUD-VASH vouchers, but who have not yet moved into a housing unit, may face delays in receiving rental assistance. This delay may occur if a PHA cannot conduct a housing quality standards (HQS) inspection or complete other administrative tasks that allow move-in to occur. In these cases, SSVF grantees may use funds to cover rental assistance until a PHA has completed the tasks allowing the voucher to be used. HUD-VA Supportive Housing program (HUD-VASH) For veterans residing in rental housing using HUD-VASH vouchers, HUD has waived certain requirements pursuant to CARES Act ( P.L. 116-136 ) waiver authority to address situations that may arise due to COVID-19. For example, ordinarily HUD will not approve a unit for Section 8 rental assistance (which includes HUD-VASH vouchers) unless it has passed an HQS inspection. However, HUD has waived this requirement and will accept an owner certification that there is "no reasonable basis to have knowledge that life threatening conditions exist in the unit." PHAs must conduct inspections of units as soon as reasonably possible, and no later than October 31, 2020. PHAs may also accept alternative inspection results rather than HQS inspections and allow families to move into units in these cases. For existing tenants, PHAs may change from an annual unit inspection schedule to a biennial schedule without updating their administrative plan. If resident income changes due to an inability to work, or other reason, residents should report the change to their local PHA and rent should be adjusted accordingly. HUD has waived the requirement that PHAs obtain third-party verification of an income change for these income recertifications. In addition, as part of the CARES Act ( P.L. 116-136 ), residents receiving Section 8 rental assistance cannot be evicted for nonpayment of rent for 120 days from the date of the bill's enactment (March 27, 2020). VA Loan Programs The VA administers both guaranteed and direct loans for veterans through the Veterans Benefits Administration. Prior to enactment of the CARES Act, VA encouraged lenders to establish a foreclosure moratorium for borrowers with VA loans, but a moratorium was not required. However, the CARES Act provides for both forbearance (i.e., allowing borrowers to reduce or suspend mortgage payments) and a foreclosure moratorium for federally backed single-family mortgages, including guaranteed VA loans. Direct VA loans do not appear to be included in the CARES Act definition of federally backed mortgage. Borrowers may request forbearance from their loan servicer for up to 180 days, with another 180-day extension, due to financial hardship caused directly or indirectly by COVID-19. The foreclosure moratorium is in effect for 60 days beginning March 18, 2020. For more information about these provisions, see CRS Insight IN11334, Mortgage Provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act . Veterans Benefits Administration The Veterans Benefits Administration has taken several actions to assure continued delivery of disability compensation, pensions, and education assistance. Compensation and Pension Benefits On March 18, 2020, the Veterans Benefits Administration announced via Facebook and Twitter that all regional offices would be closed to the public starting March 19. The regional offices are to remain open to ensure the continuity of benefits, however, the offices are longer accepting walk-ins for claims assistance, scheduled appointments, counseling, or other in-person services. The VBA is directing veterans who have claims-specific questions or any other questions to use the Inquiry Routing & Information System (IRIS) or to call 1-800-827-1000. In a March 26 interview, VA Under Secretary for Benefits, Dr. Paul Lawrence, assured veterans and their families that benefits were still being processed thanks in part to the large telework capability in place for the VBA. Lawrence stated that about 90% of all VBA employees, approximately 22,500 individuals, are set up and teleworking to retain the continuity of processing claims. Dr. Lawrence also addressed the issue of veterans who need a compensation and pension exam completed as part of their benefits application. Due to travel restrictions and social distancing policies, Lawrence explained VBA's attempt at still providing the exams but without in-person contact. He stated: So we're trying to do more, a lot more through telehealth, You know phone call or a Skype session or something. We can get these exams done that we're flexing in new ways. Where once things were done in person â¦ now they're being done electronically. Following Dr. Lawrence's interview, on March 31, the VA issued a press release announcing changes to several in-person meetings and programs to ensure the safety of both the staff and veteran/dependent during this time. Some of these changes included providing educational counseling through online and telephone services; using teleconferencing and VA Video Connect for case management, general counseling and connecting veterans to VR&E services; conducting informal conference hearings by telephone or video conferencing; providing virtual briefings and individualized counseling for transitioning servicemembers; and conducting examinations for disability benefits using tele-compensation and pension (Tele-C&P) exams. If an in-person examination is required, veterans will be notified for scheduling. However, on April 6, the VBA announced via email that it is "suspending in-person C&P examinations until further notice and will continue to conduct C&P exams through ACE and Tele-C&P, when possible." The email also provided guidance on filing claims and information to assist veterans with submitting medical documentation without appearing in person. On April 3, the VA announced that claimants who need an extension in filing their paperwork "can simply submit [the request] with any late-filed paperwork and veterans do not have to proactively request an extension in advance." Educational Assistance In FY2020, over 900,000 individuals are expected to receive veterans educational assistance from the GI Bills (e.g., the Post-9/11 GI Bill), Vocational Rehabilitation & Employment (VR&E), Veteran Employment Through Technology Education Courses (VET TEC), Veterans Work-Study, Veterans Counseling, and VetSuccess on Campus (VSOC). As a result of COVID-19, some participants' training and education may be disrupted, and some participants may receive a lower level of benefits, or none at all. These concerns may directly affect beneficiaries in several ways, including the following: Some students may be required to stop out, discontinue working, or take a leave of absence as a result of their own illness. Some training establishments, educational institutions, and work-study providers may close temporarily or permanently. Some training establishments, educational institutions, and work-study providers may be required to reduce participants' hours, enrollment rate, or rate of pursuit. Some educational institutions may transition some courses to a distance learning format. Some educational institutions may require students living on campus to move off campus. Individuals receiving benefits in foreign countries may encounter any of the above circumstances while residing in a foreign country whose COVID-19 situation may differ from that in the United States, or may stop out, discontinue working, or take a leave of absence and return to the United States. Since mid-March, the VA has sent direct emails to GI Bill participants and school certifying officials (SCOs) and held webinars for SCOs to explain its authority and payment processing procedures that are directly relevant to COVID-19 disruptions. On March 13, 2020, the VBA Education Service requested that school-certifying officials "temporarily refrain from making any adjustments to enrollment certifications" if resident courses transitioned to distance education pending subsequent VA guidance and/or legislative action. The VBA Education Service administers VA educational assistance programs. Prior to the COVID-19 emergency, educational institutions were required to receive approval before transitioning any courses to a distance learning format for the courses to remain GI Bill-eligible. GI Bill benefits could not be paid for the pursuit of online courses that had not been previously approved as online courses. This limitation was alleviated by recently enacted legislation (for a discussion of P.L. 116-128 , see the " Congressional Response " section of this report). In addition, on April 3, 2020, the VA announced that it was suspending for sixty days the collection of institutions' and veterans' debt, including for debts under the jurisdiction of the Department of the Treasury. Individuals with an existing repayment plan must request a suspension if they are unable to make payments. In 2019, the VA indicated that approximately 25% of GI Bill participants must resolve an overpayment-related debt at some point. The VBA Education Service has announced that it is moving away from paper correspondence, including faxes. In an effort to accomplish this transition, VBA has requested that GI Bill participants provide or update their email addresses. On-the-job training (OJT) and apprenticeship training establishments must submit certifications electronically. National Cemetery Administration The National Cemetery Administration has provided information for the survivors and dependents of veterans who have passed away and are scheduled to be buried in a National Cemetery during this national emergency. Effective March 23, 2020, the NCA announced that all "committal services and the rendering of military funeral honors, whether by military personnel or volunteer organizations, will be discontinued until further notice at VA national cemeteries." VA National Cemeteries will remain open to visitors and for interments, but visitors should follow their local communities' restrictions on visitations and travel. In addition, visitors should be prepared for certain areas of the cemetery typically open to the public to be closed. These areas include public information centers, visitor centers, and chapels. For direct interments, the NCA is limiting attendance to immediate family of deceased family members, up to 10 individuals. In addition, the NCA is to work with families to schedule a committal or memorial service at a later date. On Friday, March 27, the NCA informed funeral directors of a change in the floral arrangement policy, stating that national cemeteries will no longer accept floral arrangements with direct interments.Â If families want to place a floral arrangement at the gravesite, they may do so after 4:30 pm on the day of interment or any time after. In addition, the NCA limited floral arrangements to two per gravesite. The NCA announced that the National Cemetery Scheduling Office in St. Louis will continue to provide scheduling services. The NCA has set up an "Alerts" web page for the public to check cemetery operating status and is directing the public to its Facebook and Twitter pages for the most recent operating information. Emergency Preparedness ("Fourth Mission") In 1982, the Veterans Administration and Department of Defense Health Resources Sharing and Emergency Operations Act ( P.L. 97-174 ) was enacted to serve as the primary health care backup to the military health care system during and immediately following an outbreak of war or a national emergency. Since then, Congress has provided additional authorities to VA to "use its vast infrastructure and resources, geographic reach, deployable assets, and health care expertise, to make significant contributions to the Federal emergency response effort in times of emergencies and disasters." Among other authorities, the VHA may care for nonveterans, as well as veterans not enrolled in the VA health care system. The VA also has authority to provide certain health services such as medical counter measures to VA employees. The authority to care for care for nonveterans, applies in situations where the President has declared a major disaster or emergency under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), or where the HHS Secretary has declared a disaster or emergency activating the National Disaster Medical System established pursuant to Section 2811(b) of the Public Health Service Act (42 U.S.C. Â§300hh-11(b)). The President's March 13, 2020, declaration of a national emergency under Section 501(b) of the Stafford Act allows VA to use this authority. On March 27, 2020, the VA released its COVID-19 Response Plan. The plan defines the VA's national level roles and responsibilities: VHA will provide [personal protective equipment] PPE fit-testing, medical screening, and training for [Emergency Support Function #8] ESF #8 and other Federal response personnel. Provide VHA staff as ESF #8 liaisons to [Federal Emergency Management Agency] FEMA the Incident Management Assistance Teams deploying to the state emergency operations center. Provide VHA planners currently trained to support ESF #8 teams. VHA provides vaccination services to VA staff and VA beneficiaries in order to minimize stress on local communities. VHA furnishes available VA hospital care and medical services to individuals responding to a major disaster or emergency, including active duty members of the Armed Forces as well as National Guard and military Reserve members activated by state or Federal authority for disaster response support. VHA provides ventilators, medical equipment and supplies, pharmaceuticals, and acquisition and logistical support through VA National Acquisition Center. [NCA] provides burial services for eligible veterans and dependents and advises on methods for interment during national security emergencies. VHA designates and deploys available medical, surgical, mental health, and other health service support assets. VHA provides one representative to the National Response Coordination Center (NRCC) during the operational period on a 24/7 basis. According to the VA, during declared major disasters and emergencies, service-connected veterans receive the highest priority for VA care and services, followed by members of the Armed Forces receiving care under 38 U.S.C. Section 8111A, and then followed by individuals affected by a disaster or emergency described in 38 U.S.C. Section 1785 (i.e., individuals requiring care during a declared disaster or emergency or during activation of the National Disaster Medical System [NDMS]). In general, care is prioritized based on clinical needâthat is, urgent, life-threating medical conditions are treated before routine medical conditions (see the Appendix ). The Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136 ), provided funding for the Public Health and Social Services Emergency Fund to reimburse the VHA to respond to COVID-19 and to provide medical care for nonveterans. However, prior to reimbursing the VHA, the HHS Secretary is required to certify to congressional appropriations committees that funds available under the Robert T. Stafford Disaster Relief and Emergency Assistance Act are insufficient and that funds provided under the CARES Act are necessary to reimburse the VHA for expenses incurred to provide health care to nonveterans . Generally, if a state, tribal, or territorial government needs resources, it can request assistance from the federal government through its local HHS regional emergency coordinator (REC), which is a part of FEMA's NRCC. The VA cannot receive direct requests for assistance from state and local governments. In addition, the VA does not support providing VA medical personnel to nondepartment facilities. The VHA has accepted several "fourth mission" assignments from FEMA/HHS. For example, the VHA has responded and provided assistance to New York and New Jersey. On March 29, VA New York Harbor Healthcare System's Manhattan and Brooklyn VA medical centers admitted nonveteran, non-COVID-19 patients, and on April 1, East Orange, New Jersey VA Medical Center, admitted nonveteran critical and noncritical COVID-19 patients. Furthermore, the VHA is providing laboratory services, pharmaceutical and medication supply through the National Acquisition Center (NAC), and mobile pharmacy units, among others, as requested by FEMA/HHS. Congressional Response In response to the COVID-19 pandemic, Congress passed several measures to provide the VA with supplemental appropriations and provided temporary statutory changes to enhance veterans' benefits and services during this public health emergency. Families First Coronavirus Response Act (P.L. 116-127) Supplemental Appropriations and Cost-Sharing On March 18, 2020, the President signed into law the Families First Coronavirus Response Act ( P.L. 116-127 ). The act provides $30 million for VHA's medical services account to fund health services and related items pertaining to COVID-19, and $30 million for VHA's medical community care account (see Table 1 ). These funds are designated as emergency spending and are to remain available until September 30, 2022. Among other things, the act does not allow the VA to charge any copayment or other cost-sharing payments for COVID-19 testing or medical visits during any period of this public health emergency. P.L. 116-128 Education Assistance P.L. 116-128 , as enacted on March 21, 2020, allows the VA to continue to provide GI Bill benefits from March 1, 2020, through December 21, 2020, for courses at educational institutions that are converted from in-residence to distance learning by reason of an emergency or health-related situation. P.L. 116-128 further permits the VA to pay the Post-9/11 GI Bill housing allowance as if the courses were not offered through distance learning throughout the same period. With the exception of those participants covered under this P.L. 116-128 exemption, Post-9/11 GI Bill participants enrolled exclusively in distance education are eligible for no more than one-half the national average of the housing allowance. Coronavirus Aid, Relief, and Economic Security Act, "CARES Act" (P.L. 116-136) Emergency Supplemental Appropriations On March 17, 2020, the Administration submitted to Congress a supplemental appropriations request. The Administration sought $16.6 billion for FY2020 for VA's response to the COVID-19 outbreak. This amount included $13.1 billion for the medical services account. According to the request, this additional amount would provide funding for "healthcare treatment costs, testing kits, temporary intensive care unit bed conversion and expansion, and personal protective equipment." The request also included $2.1 billion for the medical community care account to provide three months of health care treatment provided in the community in response to COVID-19. The VA assumes that about 20% of care for eligible veterans will be provided in the community, since community care facilities would be at full capacity with nonveteran patients. Furthermore, the emergency supplemental appropriations request included $100 million for the medical support and compliance account to provide 24-hour emergency management coordination overtime payments, to cover costs associated with travel and transport of materials, and to enable VHA' s Office of Emergency Management to manage its response to COVID-19; $175 million for the medical facilities account to upgrade VA medical facilities to respond to the virus; and $1.2 billion for the information technology systems account to upgrade telehealth and related internet technology to deliver more health care services remotely. On March 27, the President signed into law the CARES Act ( P.L. 116-136 ). Division B of this act included an emergency supplemental appropriations measure. Title X of Division B provides supplemental appropriations for FY2020 for certain VA accounts totaling $19.6 billion, and is designated as emergency spending. Unless otherwise noted below, funds remain available until September 30, 2021. Funding provided in the CARES Act is broken down as follows (see Table 1 ): VBA, general operating expenses account, $13 million, for enhancing telework support for VBA staff and for additional cleaning contracts. VHA, medical services account, $14.4 billion, for increased telehealth services; purchasing of additional medical equipment and supplies, testing kits, and personal protective equipment; and to provide additional support to homeless veterans, among other things. VHA, medical community care account, $2.1 billion, for increased emergency room and urgent care usage in the community. VHA, medical support and compliance account, $100 million, for the provision of 24-hour emergency management coordination overtime payments, and for costs associated with travel and transport of materials. VHA, medical facilities account, $606 million, for the procurement of mobile treatment facilities, improvements in security, and nonrecurring maintenance projects. VA, general administration account, $6.0 million, for maintaining 24-hour operations of crisis response and continuity of operations plans at VA facilities, among other things. VA, information technology systems account, 2.2 billion, for increased telework capacity, purchasing additional laptops for telework and telehealth-enabled laptops for VHA providers to work from home, and to increase bandwidth and IT infrastructure needs, among other things. VA, Office of Inspector General account, $12.5 million, for increased oversight of VA's preparation and response to COVID-19 (funds remain available until September 30, 2022). VA, grants for construction of state extended care facilities account, $150 million, to assist state homes to renovate, alter, or repair facilities to respond to COVID-19. General CARES Act Provisions Affecting VA Programs and Services Section 20001. Transfer of Funds This section allows the VA to transfer funds between the medical services, medical community care, medical support and compliance, and medical facilities accounts. The VA can make any transfer that is less than 2% of the total amount appropriated to an account and may follow after notifying the congressional appropriations committees. Any transfer that is greater than 2% of the total amount appropriated to an account or exceeding a cumulative 2% for all of the funds appropriated to the VA in the CARES Act requires Senate and House Appropriations Committee approval. Section 20002. Monthly Reports This section requires the VA to provide monthly reports to the Senate and House Appropriations Committees detailing obligations, expenditures, and planned activities for all the funds provided to the VA in the CARES Act. Section 20003. Public Health Emergency This section defines a public health emergency as an emergency with respect to COVID-19 declared by a federal, state, or local authority. Section 20004. Short-Term Agreements or Contracts with Telecommunications Providers to Expand Telemental Health Services for Isolated Veterans During A Public Health Emergency The VHA provides telehealth services to veteran patients in their communities from any location in the United States, including U.S. territories, the District of Columbia, and the Commonwealth of Puerto Rico. Section 20004 defines telehealth as "the use of electronic information and telecommunications technologies to support and promote long-distance clinical health care, patient and professional health-related education, public health, and health administration." Examples of telecommunications technologies include the internet, videoconferencing, streaming media, and terrestrial and wireless communications. This section allows the VA Secretary to enter into short-term agreements or contracts with telecommunications companies to expand veteran patients' access to telemental health care services . The goal of the short-term agreements and contracts is for the telecommunications companies to provide temporary, complimentary, or subsidized fixed and mobile broadband services to veteran patients. The Secretary is allowed to enter into short-term agreements or contracts with telecommunications companies only during the period of the COVID-19 outbreak. During this period, covered veteran patients can assess VA telemental health care services through telehealth and the VA Video Connect (VVC) mobile application, which the act refers to as the VA program that connects veteran patients with their health care teams using encryption. Veteran patients can access the VVC on their mobile devices, such as laptops and smartphones. The short-term agreements or contracts with telecommunications companies must address the telemental health care needs of isolated veterans; therefore, the VA Secretary must prioritize eligibility to veterans who either have low-incomes, live in unserved and underserved areas, reside in rural and highly rural areas, or are considered by the Secretary as having a higher risk of committing suicide and mental health care needs while being isolated during the COVID-19 outbreak. The VA, however, may expand eligibility for telemental health care services to veteran patients who are currently receiving VA care but who are ineligible to receive mental health care services and other health care services through telehealth and/or the VVC. Section 20005. Treatment of State Homes During Public Health Emergency The state veterans' home program is a federal-state partnership to construct or acquire nursing home, domiciliary, and adult day health care facilities. VA provides assistance to states in three ways: First, VA provides states with up to 65% of the cost to construct, acquire, remodel, or modify state homes. Second, VA provides per diem payments to states for the care of eligible veterans in state homes. VA may adjust the per diem rates each year. A state home is required to meet all VA standards in order to continue to receive per diem payments. Third, VA is required to support states financially to assist state homes in the hiring and retention of nurses to reduce nursing shortages at state veterans' homes. This section modifies the treatment of state homes during the public health emergency by (1) waiving requirements for per diem reimbursements for state homes under the VHA State Home Per Diem Program and (2) authorizing the Secretary to provide equipment to state homes. The section waives the occupancy rate requirement under 38 C.F.R. Section 51.40(c), authorizing a state home to receive per diem payments for veterans who are temporarily absent from nursing home care regardless of the state home's occupancy rate. In addition, the section waives the requirement under 38 C.F.R. Section 51.210(d) that a state home must maintain a certain percentage of veteran residents. Lastly, the section authorizes the Secretary to provide state homes with medication, personal protective equipment, medical supplies, and any other equipment, supplies, and assistance available to VA. The personal protective equipment may be provided through the All Hazards Emergency Cache in addition to any other source available. Section 20006. Modifications to Veteran Directed Care Program of Department of Veterans Affairs The Veteran Directed Care Program helps isolated veterans who need assistance with activities of daily living or instrumental activities of daily living, and who are at high risk of nursing home placement, to live in their own homes. Veterans in this program are provided a budget for services that can be managed by the veteran or a family caregiver. This section modifies the Veterans Directed Care Program during the public health emergency to require that the Secretary (1) accept telephone or telehealth enrollments and renewals; (2) stop all suspensions or disenrollments unless requested by a veteran or representative, or the veteran and provider make a mutual decision; (3) waive paperwork requirements and penalties for late paperwork; and (4) waive any requirement to stop payments under the program if the veteran or caregiver is out of state for more than 14 days. Section 20007. Provision by Department of Veterans Affairs of Prosthetic Appliances through Non-Department Providers During Public Health Emergency In general, VHA prosthetics staff are responsible for providing and fitting prosthetic appliances that meet the best medical needs of the veteran patient. This provision requires the Secretary to ensure that eligible veterans receiving or requiring prosthetic appliances and services are able to obtain them from contracted non-VA providers during this emergency period. Section 20008. Waiver of Pay Caps for Employees of Department Of Veterans Affairs During Public Health Emergencies Under existing regulations, certain VA employees may not receive any combination of premium pay, including overtime pay, that, when added to their base pay, results in total pay above the higher of two rates: GS-15, step 10, or the rate payable for Level V of the Executive Schedule on a biweekly basis. This provision allows the Secretary waive any limitation on pay for any employee of the VA during a public health emergency for work done in support of the emergency. The Secretary is required to provide reports on a monthly basis to the Senate and House Committees on Veterans' Affairs detailing the waivers. Section 20009. Provision by Department of Veterans Affairs of Personal Protective Equipment for Home Health Workers This section requires the Secretary to provide VA home health workers with personal protective equipment from the All Hazards Emergency Cache or any other available source. Section 20010. Clarification of Treatment of Payments for Purposes of Eligibility for Veterans Pension and Other Veterans Benefits Under ordinary circumstances, eligibility for a VA pension is, in part, based upon the annual income of the individual. Generally, "all payments of any kind or from any source (including salary, retirement or annuity payments, or similar income, which has been waived, irrespective of whether the waiver was made pursuant to statute, contract, or otherwise) shall be included" when calculating a veteran's annual income. This provision of the CARES Act excludes the recovery rebate from a veteran's annual income, thereby preventing it from counting towards the income limit associated with pension eligibility. It explicitly states that the rebate "shall not be treated as income or resources for purposes of determining eligibility for pension under chapter 15 of title 38." Consequently, the direct individual payment included in the CARES Act will not affect a veteran's eligibility for a VA pension. Section 20011. Availability of Telehealth for Case Managers and HomelessÂ Veterans Formerly homeless veterans participating in the HUD-VASH program are assigned VA case managers to assist with their health and other needs. This section requires the VA to ensure that telehealth capabilities are available to veterans and case managers participating in HUD-VASH. Section 20012. Funding Limits for Financial Assistance for Supportive Services for Very Low-Income Veteran Families in Permanent Housing During A Public Health Emergency The SSVF program, which provides short- to medium-term rental assistance and supportive services to homeless veterans and their families, is authorized at $380 million through FY2021. Without legislative authority, the VA cannot obligate additional funding for the program. This provision removes the SSVF funding limitation in cases of public health emergencies. Section 20013. Modifications to Comprehensive Service Programs for Homeless Veterans During A Public Health Emergency The Homeless Providers Grant and Per Diem (GPD) program provides grants to public entities and private nonprofit organizations for the capital costs associated with developing facilities to serve homeless veterans and also makes per diem payments to grantees for the costs of providing housing and supportive services to homeless veterans. Together, grant and per diem funding is authorized at approximately $258 million per year. In addition, grant costs are limited to 65% of the costs of acquisition, construction, expansion, or remodeling of facilities, and per diem payments are limited to the VA domiciliary care per diem rate, which, for FY2020, is $48.50 per day. This section allows additional appropriations for the GPD program in cases of public health emergencies notwithstanding the FY2020 authorization level, and it also allows the Secretary to waive statutory limitations on grant and per diem payments to grantees. Generally, VA, under GPD guidance, requires providers to discharge veterans residing in GPD housing who are absent for more than 14 days. In addition, VA will not make per diem payments after a veteran has been absent for more than 72 consecutive hours. This section requires the VA Secretary to waive the discharge requirement and allows the Secretary to reimburse providers for veterans who have been absent for more than 72 hours. Student Veteran Coronavirus Response Act of 2020 (P.L. 116-140) The Student Veteran Coronavirus Response Act of 2020 ( P.L. 116-140 ), as enacted on April 28, 2020, responds to concerns that abrupt and temporary closures or suspensions of educational institutions, programs of education, and employment could negatively impact the short-term finances of eligible beneficiaries and their continued pursuit of educational programs. Eligible beneficiaries include participants in several VA educational assistance programs and Vocational Rehabilitation and Employment (VR&E). The act provides special authorities for the period beginning on March 1, 2020, and ending on December 21, 2020, including academic terms beginning prior to December 21, 2020. Selected sections of the bill are discussed below. Section 3. Payment of Work-Study Allowances During Emergency Situations The Veterans Work-Study Program allows GI Bill and VR&E participants to receive additional financial assistance through the VA in exchange for employment. Provisions in this section permit Work-Study payments in accordance with an existing Work-Study agreement or at a lesser amount despite the participant's inability to perform work by reason of an emergency situation. These provisions further require the VA to extend an existing agreement for a subsequent period beginning during the covered period if requested by the Work-Study participant. Section 4. Payment of Allowances to Veterans Enrolled in Educational Institutions Closed for Emergency Situations The VA has authority under 38 U.S.C. Section 3680(a)(2)(A) to pay GI Bill and VR&E allowances for up to four weeks when an educational institution temporarily closes under an established policy based on an Executive order of the President or due to an emergency situation. The provisions in this section permit GI Bill and VR&E payments for up to four weeks, in addition to any payments under 38 U.S.C. Section 3680(a)(2)(A), if an educational institution closes or the program of education is suspended due to an emergency situation. Section 5. Prohibition of Charge to Entitlement of Students Unable to Pursue a Program of Education Due to an Emergency Situation In general, the GI Bills provide eligible persons a 36-month entitlement to educational assistance. GI Bill entitlement is restored in the following instances: for an incomplete course if an individual is unable to receive credit or lost training time as a result of an educational institution closing; for an incomplete course if an individual is unable to receive credit or lost training time because the course or program is disapproved by a subsequently established or modified policy, regulation, or law; and for the interim (through the end of the academic term but no more than 120 days) Post-9/11 GI Bill housing allowance paid following either a closure or disapproval. The provisions in this section require that the VA restore entitlement for an incomplete course if an individual is unable to receive credit or lost training time as a result of a temporary closure of an educational institution or the temporary termination of a course or program of education by reason of an emergency situation. Section 6. Extension of Time Limitations for Use of Entitlement Many GI Bill participants must use their educational entitlement within a specified time period beginning upon discharge or release from active duty or eligibility. There are notable exceptions to the time limitation. For example, Post-9/11 GI Bill participants whose last discharge or release from active duty was on or after January 1, 2013, are not subject to a time limitation. The provisions in this section exempt from the time limitation, the period during which an individual is prevented from pursuing a program of education because the educational institution closed (temporarily or permanently) under an established policy based on an Executive order of the President or due to an emergency situation until the individual is able to resume pursuit. The provisions are applicable to the Montgomery GI Bill-Active Duty (MGIB-AD) 10-year limitation, the Post-9/11 GI Bill 15-year limitation and age limitation for children using transferred benefits, the VR&E 12-year limitation and the period of a veteran's vocational rehabilitation program, and the Montgomery GI Bill-Selected Reserve (MGIB-SR) limitation. Section 7. Restoration of Entitlement to Rehabilitation Programs for Veterans Affected by School Closure or Disapproval Typically, programs under VR&E are limited to 48 months of entitlement and veterans pursuing an education program under VR&E must be enrolled to receive a subsistence allowance. For the covered period, the provisions in this section extend protections from entitlement charges following school closures that are established for the GI Bills to veterans participating in education programs under the VR&E program. The provisions further allow the VA to (1) continue paying subsistence allowances to VR&E participants through the end of the academic term but no more than 120 days following either a closure or disapproval and (2) prohibits VA from charging the impacted term against a veteran's VR&E entitlement if the veteran did not receive credit for classes. Section 8. Extension of Payment of Vocational Rehabilitation Subsistence Allowances The provisions in this section provide two additional months of subsistence allowance to veterans who were following a program of employment services under the VR&E program during the covered period. Appendix. VHA Emergency Powers	Summary:	gov_report	1,024	null	97
crs_R44413	crs_R44413_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Budget Structure The Defense Nuclear Nonproliferation (DNN) programs were reorganized starting with the FY2016 request. There are two main mission areas under the DNN appropriation: the Defense Nuclear Nonproliferation Program and the Nuclear Counterterrorism and Incident Response Program (NCTIR). NCTIR was previously funded under Weapons Activities. According to the FY2016 budget justification, "These transfers align all NNSA funding to prevent, counter, and respond to nuclear proliferation and terrorism in one appropriation." The DNN Program is now divided into six functional areas: Materials Management and Minimization (M3) conducts activities to reduce and, where possible, eliminate stockpiles of weapons-useable material around the world. Major activities include conversion of reactors that use highly enriched uranium (useable for weapons) to low enriched uranium, removal and consolidation of nuclear material stockpiles, and disposition of excess nuclear materials. Global Material Security has three major program elements: international nuclear security, radiological security, and nuclear smuggling detection and deterrence. Activities toward achieving those goals include the provision of equipment and training, workshops and exercises, and collaboration with international organizations. Nonproliferation and Arms Control implements programs that aim to strengthen international nuclear safeguards, control the spread of dual-use technologies and expertise, and verify nuclear reductions and compliance with treaties and agreements. This program conducts reviews of nuclear export applications and technology transfer authorizations. National Technical Nuclear Forensics Research and Development (NTNF R&D ) examines and evaluates nuclear materials and devices, nuclear test explosions or radiological dispersals, and post-detonation debris through nuclear forensics development at the national laboratories. The program includes a field response capability to assist the interagency in the event of a nuclear or radiological incident. Defense Nuclear Nonproliferation Research and Development ( DNN R&D ) advances U.S. capabilities to detect and characterize global nuclear security threats such as foreign nuclear material and weapons production, diversion of special nuclear material, and nuclear detonations. The Nonproliferation Construction program consists of the Surplus Plutonium Disposition Project (SPD) and the Mixed-Oxide (MOX) Fuel Fabrication Facility (MFFF), which was to be built in South Carolina to convert surplus weapons plutonium into nuclear reactor fuel. This project was terminated and replaced with a different disposal method (see below). The Nuclear Counterterrorism and Incident Response Program (NCTIR) evaluates nuclear and radiological threats and develops emergency preparedness plans, including organizing scientific teams to provide rapid response to nuclear or radiological incidents or accidents worldwide. FY2021 Request The FY2021 request for DNN appropriations totaled $2.031 billion, reflecting a 6.2% decrease from FY2020-enacted levels. The budget justification says that this decrease is mainly due to the "completion of funding for contractual termination" of the Mixed Oxide Fuel Fabrication Facility (MOX) project at the Savannah River Site. Funding for that program was decreased by 50% (-$150 million). A $42 million, or 9.65%, decrease to the Global Material Security program was due to an increase in FY2020 funds for the Cesium Irradiator Replace Program. The budget proposal requests a $37.2 million, or 10%, increase in funding for the Material Management Minimization program. The increase is mainly in the conversion subprogram, which is working to establish non-HEU based molybdenum-99 production technologies in the United States. The National Technical Nuclear Forensics Research and Development (NTNF R&D) is a new program in FY2021. The budget request says that the program will allow NNSA to "take on a more active leadership role" in nuclear forensics. The $40 million in funding for NTNF was moved from the DNN R&D Nuclear Detonation Detection subprogram. As in past years, the FY2020 appropriations included a provision prohibiting funds in the Defense Nuclear Nonproliferation account for certain activities and assistance in the Russian Federation. Appropriations bills have prohibited this since FY2015. U.S. Plutonium Disposition The FY2021 budget justification requests funds related to the U.S. plutonium disposition program in the M3 Material Disposition subprogram and Nonproliferation Construction Surplus Plutonium Disposition subprogram. The United States pledged to dispose of 34 metric tons of U.S. surplus weapons plutonium, which was originally to be converted into fuel for commercial power reactors. The U.S. facility for this purpose was to be the Mixed Oxide Fuel Fabrication Facility (MFFF), which had been under construction at the DOE Savannah River site in South Carolina. The MFFF faced sharply escalating construction and operation cost estimates, and the Obama Administration proposed to terminate it in FY2017. After congressional approval, in 2018 DOE ended MFFF construction and began pursuing a replacement disposal method, Dilute and Dispose (D&D), for this material . The D&D method consists of "blending plutonium with an inert mixture, packaging it for safe storage and transport, and disposing of it in a geologic repository," according to the FY2021 request. The Nonproliferation Construction account's proposed decrease of $150 million in FY2021 is due to the final steps in ending construction of the MFFF. In her testimony before the House Appropriations Committee, NNSA Administrator Lisa Gordon-Hagerty said that decrease reflects the completion of the MOX contractual termination settlement. She said that the requested $148.6 million would be used for the Surplus Plutonium Disposition (SPD) project, in support of the D&D method. FY2021 activities would include "execution of early site preparation and long lead procurements activities, as well as continuing the maturation of the design for all major systems supporting the plutonium processing gloveboxes." Summary:	null	96	6,301	6,303	6,303	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Budget Structure The Defense Nuclear Nonproliferation (DNN) programs were reorganized starting with the FY2016 request. There are two main mission areas under the DNN appropriation: the Defense Nuclear Nonproliferation Program and the Nuclear Counterterrorism and Incident Response Program (NCTIR). NCTIR was previously funded under Weapons Activities. According to the FY2016 budget justification, "These transfers align all NNSA funding to prevent, counter, and respond to nuclear proliferation and terrorism in one appropriation." The DNN Program is now divided into six functional areas: Materials Management and Minimization (M3) conducts activities to reduce and, where possible, eliminate stockpiles of weapons-useable material around the world. Major activities include conversion of reactors that use highly enriched uranium (useable for weapons) to low enriched uranium, removal and consolidation of nuclear material stockpiles, and disposition of excess nuclear materials. Global Material Security has three major program elements: international nuclear security, radiological security, and nuclear smuggling detection and deterrence. Activities toward achieving those goals include the provision of equipment and training, workshops and exercises, and collaboration with international organizations. Nonproliferation and Arms Control implements programs that aim to strengthen international nuclear safeguards, control the spread of dual-use technologies and expertise, and verify nuclear reductions and compliance with treaties and agreements. This program conducts reviews of nuclear export applications and technology transfer authorizations. National Technical Nuclear Forensics Research and Development (NTNF R&D ) examines and evaluates nuclear materials and devices, nuclear test explosions or radiological dispersals, and post-detonation debris through nuclear forensics development at the national laboratories. The program includes a field response capability to assist the interagency in the event of a nuclear or radiological incident. Defense Nuclear Nonproliferation Research and Development ( DNN R&D ) advances U.S. capabilities to detect and characterize global nuclear security threats such as foreign nuclear material and weapons production, diversion of special nuclear material, and nuclear detonations. The Nonproliferation Construction program consists of the Surplus Plutonium Disposition Project (SPD) and the Mixed-Oxide (MOX) Fuel Fabrication Facility (MFFF), which was to be built in South Carolina to convert surplus weapons plutonium into nuclear reactor fuel. This project was terminated and replaced with a different disposal method (see below). The Nuclear Counterterrorism and Incident Response Program (NCTIR) evaluates nuclear and radiological threats and develops emergency preparedness plans, including organizing scientific teams to provide rapid response to nuclear or radiological incidents or accidents worldwide. FY2021 Request The FY2021 request for DNN appropriations totaled $2.031 billion, reflecting a 6.2% decrease from FY2020-enacted levels. The budget justification says that this decrease is mainly due to the "completion of funding for contractual termination" of the Mixed Oxide Fuel Fabrication Facility (MOX) project at the Savannah River Site. Funding for that program was decreased by 50% (-$150 million). A $42 million, or 9.65%, decrease to the Global Material Security program was due to an increase in FY2020 funds for the Cesium Irradiator Replace Program. The budget proposal requests a $37.2 million, or 10%, increase in funding for the Material Management Minimization program. The increase is mainly in the conversion subprogram, which is working to establish non-HEU based molybdenum-99 production technologies in the United States. The National Technical Nuclear Forensics Research and Development (NTNF R&D) is a new program in FY2021. The budget request says that the program will allow NNSA to "take on a more active leadership role" in nuclear forensics. The $40 million in funding for NTNF was moved from the DNN R&D Nuclear Detonation Detection subprogram. As in past years, the FY2020 appropriations included a provision prohibiting funds in the Defense Nuclear Nonproliferation account for certain activities and assistance in the Russian Federation. Appropriations bills have prohibited this since FY2015. U.S. Plutonium Disposition The FY2021 budget justification requests funds related to the U.S. plutonium disposition program in the M3 Material Disposition subprogram and Nonproliferation Construction Surplus Plutonium Disposition subprogram. The United States pledged to dispose of 34 metric tons of U.S. surplus weapons plutonium, which was originally to be converted into fuel for commercial power reactors. The U.S. facility for this purpose was to be the Mixed Oxide Fuel Fabrication Facility (MFFF), which had been under construction at the DOE Savannah River site in South Carolina. The MFFF faced sharply escalating construction and operation cost estimates, and the Obama Administration proposed to terminate it in FY2017. After congressional approval, in 2018 DOE ended MFFF construction and began pursuing a replacement disposal method, Dilute and Dispose (D&D), for this material . The D&D method consists of "blending plutonium with an inert mixture, packaging it for safe storage and transport, and disposing of it in a geologic repository," according to the FY2021 request. The Nonproliferation Construction account's proposed decrease of $150 million in FY2021 is due to the final steps in ending construction of the MFFF. In her testimony before the House Appropriations Committee, NNSA Administrator Lisa Gordon-Hagerty said that decrease reflects the completion of the MOX contractual termination settlement. She said that the requested $148.6 million would be used for the Surplus Plutonium Disposition (SPD) project, in support of the D&D method. FY2021 activities would include "execution of early site preparation and long lead procurements activities, as well as continuing the maturation of the design for all major systems supporting the plutonium processing gloveboxes."	Summary:	gov_report	1,024	null	98
crs_R46269	crs_R46269_0	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The Elementary and Secondary Education Act (ESEA), most recently comprehensively amended by the Every Student Succeeds Act (ESSA; P.L. 114-95 ), is the primary source of federal aid to elementary and secondary education. Title I-A is the largest program in the ESEA, funded at $15.9 billion for FY2019. Title I-A is designed to provide supplementary educational and related services to low-achieving and other students attending elementary and secondary schools with relatively high concentrations of students from low-income families. The U.S. Department of Education (ED) determines Title I-A grants to local educational agencies (LEAs) based on four separate funding formulas: Basic Grants, Concentration Grants, Targeted Grants, and Education Finance Incentive Grants (EFIG). This report provides FY2019 state grant amounts under each of the four formulas used to determine Title I-A grants. For a general overview of the Title I-A formulas, see CRS Report R44164, ESEA Title I-A Formulas: In Brief . For a more detailed discussion of the Title I-A formulas, see CRS Report R44461, Allocation of Funds Under Title I-A of the Elementary and Secondary Education Act . Methodology Under Title I-A, funds are allocated to LEAs via state educational agencies (SEAs) using the four Title I-A formulas. Annual appropriations acts specify portions of each year's Title I-A appropriation to be allocated to LEAs and states under each of the formulas. In FY2019, about 41% of Title I-A appropriations were allocated through the Basic Grants formula, 9% through the Concentration Grants formula, and 25% each through the Targeted Grants and EFIG formulas. Once funds reach LEAs, the amounts allocated under the four formulas are combined and used jointly. For each formula, a maximum grant is calculated by multiplying a "formula child count," consisting primarily of estimated numbers of school-age children living in families in poverty, by an "expenditure factor" based on state average per pupil expenditures for public elementary and secondary education. In some of the Title I-A formulas, additional factors are multiplied by the formula child count and expenditure factor to determine a maximum grant amount. These maximum grants are then reduced to equal the level of available appropriations for each formula, taking into account a variety of state and LEA minimum grant provisions. In general, LEAs must have a minimum number of formula children and/or a minimum formula child rate to be eligible to receive a grant under a specific Title I-A formula. Some LEAs may qualify for a grant under only one formula, while other LEAs may be eligible to receive grants under multiple formulas. Under three of the formulasâBasic, Concentration, and Targeted Grantsâgrants are initially calculated at the LEA level. State grants are the total of allocations for all LEAs in the state, adjusted for state minimum grant provisions. Under EFIG, grants are first calculated for each state overall and then are subsequently suballocated to LEAs within the state using a different formula. FY2019 grants included in this report were calculated by ED. The percentage share of funds allocated under each of the Title I-A formulas was calculated by CRS for each state by dividing the total grant received by the total amount allocated under each respective formula. FY2019 Title I-A Grants Table 1 provides each state's grant amount and percentage share of funds allocated under each of the Title I-A formulas for FY2019. Total Title I-A grants, calculated by summing the state level grant for each of the four formulas, are also shown in Table 1 . Overall, California received the largest total Title I-A grant amount ($2.0 billion) and, as a result, the largest percentage share (12.52%) of Title I-A grants. Vermont received the smallest total Title I-A grant amount ($36.9 million) and, as a result, the smallest percentage share (0.24%) of Title I-A grants. In general, grant amounts for states vary among formulas due to the different allocation amounts for the formulas. For example, the Basic Grant formula receives a greater share of overall Title I-A appropriations than the Concentration Grant formula, so states generally receive higher grant amounts under the Basic Grant formula than under the Concentration Grant formula. Among states, Title I-A grant amounts and the percentage shares of funds vary due to the different characteristics of each state. For example, Texas has a larger population of children included in the formula calculations than North Carolina and, therefore, is to receive a higher grant amount and larger share of Title I-A funds. Within a state, the percentage share of funds allocated may vary by formula, as certain formulas are more favorable to certain types of states (e.g., EFIG is generally more favorable to states with comparatively equal levels of spending per pupil among their LEAs). If a state's share of a given Title I-A formula exceeds its share of overall Title I-A funds, this is generally an indication that this particular formula is more favorable to the state than formulas for which the state's share of funds is below its overall share of Title I-A funds. For example, Alaska, Arizona, California, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Illinois, Louisiana, Maine, Maryland, Montana, Nevada, New Hampshire, New Mexico, New York, North Dakota, Rhode Island, South Dakota, Texas, Vermont, and Wyoming each received a higher percentage share of Targeted Grants than of overall Title I-A funds, indicating that the Targeted Grant formula is more favorable to them than other Title I-A formulas may be. In states that received a minimum grant under all four formulas (Montana, North Dakota, New Hampshire, South Dakota, Vermont, and Wyoming), the shares under the Targeted Grant and EFIG formulas are greater than under the Basic Grant or Concentration Grant formulas, due to higher state minimums under these formulas. If a state received the minimum grant under a given Title I-A formula, the grant amount is denoted with an asterisk (*) in Table 1 . Summary:	null	96	6,241	6,243	6,243	... [The rest of the report is omitted]	You are given a report by a government agency. Write a one-page summary of the report. Report: Introduction The Elementary and Secondary Education Act (ESEA), most recently comprehensively amended by the Every Student Succeeds Act (ESSA; P.L. 114-95 ), is the primary source of federal aid to elementary and secondary education. Title I-A is the largest program in the ESEA, funded at $15.9 billion for FY2019. Title I-A is designed to provide supplementary educational and related services to low-achieving and other students attending elementary and secondary schools with relatively high concentrations of students from low-income families. The U.S. Department of Education (ED) determines Title I-A grants to local educational agencies (LEAs) based on four separate funding formulas: Basic Grants, Concentration Grants, Targeted Grants, and Education Finance Incentive Grants (EFIG). This report provides FY2019 state grant amounts under each of the four formulas used to determine Title I-A grants. For a general overview of the Title I-A formulas, see CRS Report R44164, ESEA Title I-A Formulas: In Brief . For a more detailed discussion of the Title I-A formulas, see CRS Report R44461, Allocation of Funds Under Title I-A of the Elementary and Secondary Education Act . Methodology Under Title I-A, funds are allocated to LEAs via state educational agencies (SEAs) using the four Title I-A formulas. Annual appropriations acts specify portions of each year's Title I-A appropriation to be allocated to LEAs and states under each of the formulas. In FY2019, about 41% of Title I-A appropriations were allocated through the Basic Grants formula, 9% through the Concentration Grants formula, and 25% each through the Targeted Grants and EFIG formulas. Once funds reach LEAs, the amounts allocated under the four formulas are combined and used jointly. For each formula, a maximum grant is calculated by multiplying a "formula child count," consisting primarily of estimated numbers of school-age children living in families in poverty, by an "expenditure factor" based on state average per pupil expenditures for public elementary and secondary education. In some of the Title I-A formulas, additional factors are multiplied by the formula child count and expenditure factor to determine a maximum grant amount. These maximum grants are then reduced to equal the level of available appropriations for each formula, taking into account a variety of state and LEA minimum grant provisions. In general, LEAs must have a minimum number of formula children and/or a minimum formula child rate to be eligible to receive a grant under a specific Title I-A formula. Some LEAs may qualify for a grant under only one formula, while other LEAs may be eligible to receive grants under multiple formulas. Under three of the formulasâBasic, Concentration, and Targeted Grantsâgrants are initially calculated at the LEA level. State grants are the total of allocations for all LEAs in the state, adjusted for state minimum grant provisions. Under EFIG, grants are first calculated for each state overall and then are subsequently suballocated to LEAs within the state using a different formula. FY2019 grants included in this report were calculated by ED. The percentage share of funds allocated under each of the Title I-A formulas was calculated by CRS for each state by dividing the total grant received by the total amount allocated under each respective formula. FY2019 Title I-A Grants Table 1 provides each state's grant amount and percentage share of funds allocated under each of the Title I-A formulas for FY2019. Total Title I-A grants, calculated by summing the state level grant for each of the four formulas, are also shown in Table 1 . Overall, California received the largest total Title I-A grant amount ($2.0 billion) and, as a result, the largest percentage share (12.52%) of Title I-A grants. Vermont received the smallest total Title I-A grant amount ($36.9 million) and, as a result, the smallest percentage share (0.24%) of Title I-A grants. In general, grant amounts for states vary among formulas due to the different allocation amounts for the formulas. For example, the Basic Grant formula receives a greater share of overall Title I-A appropriations than the Concentration Grant formula, so states generally receive higher grant amounts under the Basic Grant formula than under the Concentration Grant formula. Among states, Title I-A grant amounts and the percentage shares of funds vary due to the different characteristics of each state. For example, Texas has a larger population of children included in the formula calculations than North Carolina and, therefore, is to receive a higher grant amount and larger share of Title I-A funds. Within a state, the percentage share of funds allocated may vary by formula, as certain formulas are more favorable to certain types of states (e.g., EFIG is generally more favorable to states with comparatively equal levels of spending per pupil among their LEAs). If a state's share of a given Title I-A formula exceeds its share of overall Title I-A funds, this is generally an indication that this particular formula is more favorable to the state than formulas for which the state's share of funds is below its overall share of Title I-A funds. For example, Alaska, Arizona, California, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Illinois, Louisiana, Maine, Maryland, Montana, Nevada, New Hampshire, New Mexico, New York, North Dakota, Rhode Island, South Dakota, Texas, Vermont, and Wyoming each received a higher percentage share of Targeted Grants than of overall Title I-A funds, indicating that the Targeted Grant formula is more favorable to them than other Title I-A formulas may be. In states that received a minimum grant under all four formulas (Montana, North Dakota, New Hampshire, South Dakota, Vermont, and Wyoming), the shares under the Targeted Grant and EFIG formulas are greater than under the Basic Grant or Concentration Grant formulas, due to higher state minimums under these formulas. If a state received the minimum grant under a given Title I-A formula, the grant amount is denoted with an asterisk (*) in Table 1 .	Summary:	gov_report	1,024	null	99

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